SOURCE: HC2 Holdings, Inc.

HC2 Holdings, Inc.

June 10, 2015 08:29 ET

HC2 Announces Acquisition of an Interest in Gaming Nation Inc.


HERNDON, VA--(Marketwired - Jun 10, 2015) - HC2 Holdings, Inc. ("HC2") (NYSE MKT: HCHC) is pleased to announce that, through a wholly owned subsidiary ("HC2 Holdco"), it has made an investment in Gaming Nation Acquisition Corp. ("GNAC") pursuant to the purchase of an unsecured convertible debenture (the "Convertible Debenture") in the principal amount of CDN$20 million (the "Convertible Debenture Transaction"). GNAC, headquartered in Toronto, Ontario, is a leading provider of interactive gaming designed for the avid sports fan and daily fantasy sports participants. 

"We are thrilled to support GNAC -- a company that has the potential to be an industry leader in daily fantasy sports gaming," said Philip Falcone, Chairman, President and Chief Executive Officer of HC2. "This is a unique opportunity where HC2 gains access to an early-stage company with positive EBITDA and a platform for substantial future growth through a distinctive customer acquisition strategy."

The Convertible Debenture Transaction was completed in connection with the reverse take-over transaction (the "RTO Transaction") involving GNAC and Oceanside Capital Corp. ("Oceanside"), which RTO Transaction closed on June 9, 2015. Pursuant to the RTO Transaction, a wholly-owned subsidiary of Oceanside amalgamated with GNAC and the shareholders of GNAC became shareholders of Gaming Nation Inc. (formerly Oceanside), a company listed on the TSX Venture Exchange. In connection with the RTO Transaction, Oceanside has changed its name to Gaming Nation Inc. ("Gaming Nation").

The Convertible Debenture has a maturity date of April 6, 2017, earns 6% interest in-kind and is convertible at HC2 Holdco's option into common shares of Gaming Nation (the "Common Shares") at a conversion price of $2.25 per Common Share until the maturity date. Based on the number of Common Shares that are currently issued and outstanding, if the whole of the Convertible Debenture was converted (excluding any interest accrued thereon), the number of Common Shares issued upon conversion would be 8,888,889, representing approximately 19.4% of the currently issued and outstanding Common Shares on a non-dilutive basis, and 12.04% on a fully dilutive basis.

In connection with the Convertible Debenture, Gaming Nation has issued a warrant to HC2 Holdco exercisable into 28,126,068 Common Shares, representing 37.99% of the current issued and outstanding Common Shares on a fully-diluted basis, for a term of five years at a varying exercise price, commencing at $5.00 per Common Share during the 2 year period following the completion of the RTO Transaction.

Cautionary Statement Regarding Forward-Looking Statements

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This release contains, and certain oral statements made by our representatives from time to time may contain, forward-looking statements. Generally, forward-looking statements include information describing actions, events, results, strategies and expectations and are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans," "seeks," "estimates," "projects," "may," "will," "could," "might," or "continues" or similar expressions. These statements are based on the beliefs and assumptions of HC2's management and the management of HC2's subsidiaries. Factors that could cause actual results, events and developments to differ include, without limitation, capital market conditions, the ability of HC2's subsidiaries to generate sufficient net income and cash flows to make upstream cash distributions, trading characteristics of the HC2 common stock, the ability of HC2 and its subsidiaries to identify any suitable future acquisition opportunities, efficiencies/cost avoidance, cost savings, income and margins, growth, economies of scale, combined operations, future economic performance, conditions to, and the timetable for, completing the integration of financial reporting of acquired or target businesses, completing future acquisitions and dispositions, litigation, potential and contingent liabilities, management's plans, changes in regulations, taxes and the risks that may affect the performance of the operating subsidiaries of HC2 and those factors listed under the caption "Risk Factors" in HC2's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, filed with the SEC. All forward-looking statements described herein are qualified by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. HC2 does not undertake any obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operation results.

About HC2

HC2 Holdings, Inc. is a publicly traded (NYSE MKT: HCHC), diversified holding company, which seeks to acquire and grow attractive businesses that generate sustainable free cash flow. HC2 has a diverse array of operating subsidiaries, each with its own dedicated management team, across a broad set of industries, including, but not limited to, telecom/infrastructure, large-scale U.S. construction, energy, subsea services and life sciences. HC2 seeks opportunities that generate attractive returns and significant cash flow in order to maximize value for all stakeholders. HC2's largest operating subsidiaries include Schuff, a leading structural steel fabricator in the United States, and Global Marine, a leading global offshore engineering company focused on subsea cable installation and maintenance. Founded in 1994, HC2 is headquartered in Herndon, Virginia.

About Gaming Nation

Gaming Nation Inc.'s mission is to provide innovative and engaging sports entertainment through games of skill designed for the avid sports fan and daily fantasy participant. Gaming Nation's platforms include 5050 Central's electronic raffle system which is currently operational in more than 80 major professional sports team facilities and more than 250 venues in North America; Fantasy Feud, a daily fantasy sports portal that provides 5 different daily fantasy games across 8 sports with more than 100,000 participants; as well as Fantasy Guru and PickNation, two of the leading sports information sites designed for the fantasy sports player. Collectively the companies reach more than 100 million sports fans in North American and is considering launching similar platforms globally in 2015.

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