HeadsUp Entertainment, a gaming operator and media company, announced that it had been selected by an acquirer as the target of a reverse triangular merger.
Reverse triangle mergers are a form of acquisition in which the buying entity creates a subsidiary to purchase the target business. The target business will then absorb the subsidiary, creating a brand new, wholly owned company.
This business, which trades for $0.069 a share and is therefore a penny-stock, says one of its goals in the merger was to get to a higher-tier exchange.
HeadsUp, currently, is an OTC security. This means that the stock isn’t listed at a formal exchange and is instead traded via broker-dealer network.
Markets have reacted negatively to this announcement. The share price of the company has dropped by 22.7% from the start of today’s trading.
HeadsUp reports that the company was in a “mandated silence period” because of a variety non-disclosure contracts. Multiple corporate finance agreements were signed by the operator to consolidate assets and announce upcoming deals.
Audited Statements
It is now the management’s responsibility to complete two years worth of financial statements. The executives must create an exchange statement to satisfy the requirements of the transaction.
HeadsUp is also required to provide the Alberta Securities Commission with information they had requested previously. They have issued a Cease Trade Order against the company.
A provincial regulator in Canada can issue such an order if a company fails to provide timely or adequate information.
While the company has not yet disclosed the name of its acquiring company publicly, the company states that it will “make all the material disclosures necessary as it navigates the corporate financing process and as mandated by various exchanges” through filings.
HeadsUp said that “new additions to its management team will also be forthcoming, which will clarify scope of enhanced business model within the multi-pillared monetization plans for gaming, lottery and the media sectors.”
Spinola acquisition
HeadsUp, in August 2022 announced that it was acquiring Spinola Gaming. This acquisition took place by purchasing all third party shares of Spinola.
HeadsUp announced at the time that it would announce “a significant number of contracts” after the deal.
