TransGaming Inc.

TransGaming Inc.

November 20, 2012 14:13 ET

TransGaming Announces Closing of First Tranche of Private Placement of Up to $1,800,000

TORONTO, ONTARIO--(Marketwire - Nov. 20, 2012) -


TransGaming Inc. (TSX VENTURE:TNG) ("TransGaming" or the "Company") today announced that the Company completed the first tranche of a non-brokered private placement of $175,000, which is part of a larger placement of up to $1,800,000 over the next 12 months. A total of 875,000 units were issued to subscribers with each unit priced at $0.20 and comprised of one (1) common share and one (1) common share purchase warrant ("Warrant"). Each Warrant entitles the holder to purchase one common share at an exercise price of $0.30 at any time on or before the 24-month anniversary of the closing date.

As part of this private placement, the Company entered into an agreement with a certain investor to give the investor the right, but not the obligation, to purchase up to $1,650,000 in additional units for the next 12 months, at an issue price that is a 20% discount from the 30-day volume weighted average price of the stock, subject to the pricing requirements of the TSX Venture Exchange Corporate Finance Manual ("Subscription Units"). The investor may exercise any or all of the Subscription Units anytime but each month the right to $150,000 in Subscription Units expires. Each Subscription Unit is comprised of one (1) common share and one (1) common share purchase warrant ("Subscription Warrant"). Each Subscription Warrant entitles the holder to purchase one common share at an exercise price that is a 20% premium to the 30-day volume weighted average price of the stock. The Subscription Warrant can be exercised at any time on or before the 24-month anniversary of the subscription date, subject to the TSX Venture Exchange Corporate Finance Manual.

The net proceeds from the private placement will be used by the Company for working capital and general corporate purposes.

"In these difficult capital markets, we are pleased to close a private placement that will yield up to $1.8 million to TransGaming to fuel our ongoing growth," commented Vikas Gupta, CEO & President of TransGaming. "Our revenues are climbing, our costs have been constrained, and we are on target to achieve a record fiscal year. The unique structure of this private placement demonstrates how close TransGaming is to attaining the critical break-even threshold and allows TransGaming to effectively execute on its objectives while preserving shareholder value by mitigating dilution over the longer-term."

In connection with the private placements, a finder's fee of 6% of the aggregate gross proceeds arising therefrom, including upon the future exercise of Subscription Units, will be paid to the Northern Securities Inc. In addition, the Agents will receive such number of non-transferable warrants (the "Compensation Warrants") equal to 8% of the total number of common shares issued in connection with the offering. Each Compensation Warrant will be exercisable at a price of $0.30 for a period of 24 months from the closing date to acquire one Common Share of the Company.

The private placement, including the issuance of Subscription Units, is subject to the final approval of the TSX Venture Exchange. Securities issued will be subject to a hold period of four months and one day pursuant to applicable securities laws; however certain insiders of the Company entered into share loan and pledge agreements with one of the investors, which provide for the loan of free trading shares by the insiders. The insiders will not dispose or sell any of their shareholdings under these agreements and all shares loaned will be returned to the insiders after four months.

The Company also announced that the agreement it had announced August 16, 2012 for a brokered private placement of up to $1,000,000 CAD was terminated.

In addition, the Company announced that it had received approval from the TSX Venture Exchange to issue 750,000 bonus shares to Business, Engineering, Science & Technology Discoveries Fund and three affiliate funds (BEST Funds) as previously announced on October 30, 2012.

About TransGaming Inc.

TransGaming Inc. (TSX VENTURE:TNG) is the global leader in the multiplatform deployment of interactive entertainment. TransGaming works with the industry's leading developers and publishers to enable and distribute games for Smart TVs, next-generation set-top boxes, Mac computers, and Linux/CE platforms. TransGaming is headquartered in Toronto, Canada.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.

Forward-Looking Statements

This news release contains forward-looking statements. Actual events or results may differ materially from those described in the forward-looking statements due to a number of risks and uncertainties, including changes in financial and product market conditions. Forward-looking statements are based on management's estimates, beliefs, and opinions. The Company assumes no obligation to update forward-looking statements, other than as may be required by applicable law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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