Completion of Transaction with River

Gaming Realms plc

("Gaming Realms", the "Company" or the "Group")

Completion of Transaction with River

Further to the announcement on 22 February 2019 (and updates on 18 March 2019 and 28 June 2019) regarding the proposed transaction to (i) sell the entire issued share capital of Bear Group Limited, (ii) license the Company's real money gaming platform and (iii) sell the Company's residual interest in River UK Casino Limited, to River iGaming plc ("River") (the "Transaction"), the Company is pleased to confirm that the Transaction has completed.

The cash consideration of the Transaction is £11.5m on a cash-free, debt-free basis. The Company has received an initial cash sum of £7.35m, with a deferred consideration of £1.5m due on or before 31 December 2020. As part of the Transaction, River has assumed £2.65m of liabilities associated with Bear Group Limited.

The Company will be using part of the funds received to repay its Barclays Bank overdraft facility, certain creditors, and costs relating to the Transaction, which together total £3.1m. The Board believes that the remaining £4.25m will fund the game development and licensing division until it is cash positive. The Company also continues to review options for the sale or rationalisation of the social publishing division.

The completion of the Transaction finalises Gaming Realms' withdrawal from the UK real money B2C market as a direct supplier. The Transaction will reduce headcount by around 50 people and therefore lead to a very significant reduction in costs and overheads. It will also allow the simplified Group to focus on the expanding and higher margin game development and licensing part of the Company.

The Company acquired the Slingo IP in 2015 with the intention of using the format to differentiate its offering from other online gaming operators. Since then, the Company has developed the Slingo branded games and they have generated an increasing proportion of the Company's revenue.

The success of its Slingo games encouraged the Company to establish a standalone licensing division in 2017, and the Board is pleased with its progress shown by revenues already growing to £2.2m in 2018. It has brand partnerships with international companies such as Hasbro, Endemol and ITV, and distribution deals in place with many leading gaming companies. During 2019, the Company has announced distribution deals with Relax Gaming and Scientific Games, who are international gaming distribution companies with around 70 and 200 global partners respectively. The Board is excited by the potential of these deals, particularly given the geographical spread they will provide for the Company's Slingo games. The Company expects the Slingo content to go live on Relax's platform by September this year and on Scientific Games' platform during Q4'19. 

The US market presents a large opportunity for the Company, given the changes in regulation which has led to the lifting of certain gambling restrictions. In addition to its New Jersey license, where the Company's Slingo content accounts for approximately 3.5% of online casino turnover in that state, the Company is applying for a license in Pennsylvania and will also pursue other opportunities in the US as they arise.

Commenting on the completion, Patrick Southon, CEO, said: "The completion of the Transaction marks a major step change for the business and the ability to now focus on creating new gaming content and licensing, which is delivering much higher margin. With a number of new licensing agreements in the pipeline and a much stronger balance sheet, the Company looks forward to updating the market on further progress in due course."

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About Gaming Realms

Gaming Realms creates and publishes innovative real money and social games for mobile, with operations in the UK, U.S. and Canada. Through its market leading mobile platform and unique IP and brands, Gaming Realms is bringing together media, entertainment and gaming assets in new game formats. The Gaming Realms management team includes accomplished entrepreneurs and experienced executives from a wide range of leading gaming and media companies.