UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 4, 2019, (August 30, 2019)
Date of Report (Date of earliest event reported)
PLAYAGS, INC.
(Exact name of registrant as specified in its charter)
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Nevada
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001-38357
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46-3698600
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(State of
Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification Number)
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5475 S. Decatur Blvd., Suite #100
Las Vegas, Nevada 89118
(Address of principal executive offices) (Zip Code)
(702) 722-6700
(Registrant’s telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common stock, $0.01 par value
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AGS
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New York Stock Exchange
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Item 1.01 Entry into Material Definitive Agreement.
On August 30, 2019 (the “Closing Date”), AP Gaming I, LLC (the “Borrower”), a Delaware limited liability company and wholly owned indirect subsidiary of PlayAGS, Inc. (the “Company”), as borrower, and AP Gaming Holdings, LLC, a Delaware limited liability company and wholly owned indirect subsidiary of the Company (“Holdings”), as holdings, entered into an Amendment Agreement No. 3 (the “Repricing Amendment”) to that certain First Lien Credit Agreement, dated as of June 6, 2017, as amended on December 6, 2017, as amended and restated on February 7, 2018, as amended and restated on October 5, 2018 and as further amended, restated, supplemented, waived or otherwise modified from time to time prior to the date hereof (the “Credit Agreement”), among the Borrower, Holdings, the lenders party thereto from time to time and Jefferies Finance LLC, as administrative agent.
The Repricing Amendment reduced the interest rate margin applicable to the revolving credit facility under the Credit Agreement by 200 basis points, from LIBOR plus 550 basis points to LIBOR plus 350 basis points. The Repricing Amendment also provides that the interest rate margin applicable to the revolving credit facility will be further reduced by an additional 25 basis points if at any time the Company receives a corporate credit rating of at least B1 from Moody’s. As a result, following the Repricing Amendment, the revolving credit facility has the same interest rate margin with the term loans issued under the Credit Agreement.
Other than as described above, the revolving credit facility continues to have the same terms as provided under the Credit Agreement. Additionally, the parties to the Repricing Amendment continue to have the same obligations set forth in the Credit Agreement. Other than as described above, the provisions of the revolving credit facility and the obligations under the Credit Agreement are described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Indebtedness – First Lien Credit Facilities” in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 5, 2019, which description is hereby incorporated by reference into this Form 8-K.
The foregoing description of the Repricing Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Repricing Amendment, a copy of which is filed as Exhibit 10.1 hereto.
Item 7.01 Regulation FD Disclosure
On September 4, 2019, the Company issued a press release announcing the consummation of the Repricing Amendment, a copy of which is filed as Exhibit 99.1 hereto and incorporated by reference herein.
The information in this Item 7.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Item 7.01, including Exhibit 99.1 hereto, shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
The information in this Current Report on Form 8-K contains forward-looking statements based on management’s current expectations and projections, which are intended to qualify for the safe harbor of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding the public offering and other statements identified by words such as “believe,” “will,” “may,” “might,” “likely,” “expect,” “anticipates,” “intends,” “plans,” “seeks,” “estimates,” “believes,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. All forward-looking statements are based on current expectations and projections of future events. These forward-looking statements reflect the current views, models, and assumptions of the Company, and are subject to various risks and uncertainties that cannot be predicted or qualified and could cause actual results in the Company’s performance to differ materially from those expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to, the ability of the Company to maintain strategic alliances, unit placements or installations, grow revenue, garner new market share, secure new licenses in new jurisdictions, successfully develop or place proprietary product, comply with regulations, have its games approved by relevant jurisdictions and other factors set forth under “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 5, 2019. All forward-looking statements made herein are expressly qualified in their entirety by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Readers are cautioned that all forward-looking statements speak only to the facts and circumstances present as of the date of this Current Report on Form 8-K. The Company expressly disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit No.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PLAYAGS, INC.
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Date: September 4, 2019
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By: /s/ Kimo Akiona
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Name: Kimo Akiona
Title: Chief Financial Officer,
Chief Accounting Officer and
Treasurer
(Principal Financial and Accounting
Officer)
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Exhibit 10.1
AMENDMENT AGREEMENT NO. 3
This AMENDMENT AGREEMENT NO. 3 (this “Agreement”), dated as of August 30, 2019 (the “Effective Date”), is made by and among AP Gaming Holdings, LLC, a Delaware limited liability company (“Holdings”), AP Gaming I, LLC, a Delaware limited liability company (the “Borrower”), Jefferies Finance LLC, as Administrative Agent under the Existing Credit Agreement (as defined below) (the “Administrative Agent”), and each of the Revolving Facility Lenders party hereto.
PRELIMINARY STATEMENTS:
(1) Holdings, the Borrower, the Lenders party thereto from time to time and the Administrative Agent are party to that certain First Lien Credit Agreement, dated as of June 6, 2017 (as amended on December 6, 2017, as amended and restated on February 7, 2018, as amended and restated on October 5, 2018 and as further amended, restated, supplemented, waived or otherwise modified from time to time prior to the date hereof, the “Existing Credit Agreement”).
(2) The Borrower and the Revolving Facility Lenders have agreed to amend the definition of “Applicable Margin” that is applicable to the Initial Revolving Loans in the Existing Credit Agreement as set forth below.
NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and subject to the conditions set forth herein, the parties hereto hereby agree as follows:
section 1. Defined Terms. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Existing Credit Agreement as amended by this Agreement (the “Amended Credit Agreement”).
section 2. Amendment to Existing Credit Agreement. Effective as of the Effective Date,
(a) the definition of “Adjusted LIBO Rate” in the Existing Credit Agreement shall be amended and restated in its entirety to read as follows:
“Adjusted LIBO Rate” shall mean, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum equal to the greater of (x) (a) the LIBO Rate in effect for such Interest Period divided by (b) one minus the Statutory Reserves applicable to such Eurocurrency Borrowing, if any; provided that if the Adjusted LIBO Rate shall be less than zero pursuant to this clause (x), such interest rate shall be deemed to be zero and (y) in the case of Eurocurrency Borrowings composed of Eurocurrency Term Loans or Eurocurrency Revolving Loans, 1.00%.
(b) clause (ii) of the definition of “Applicable Margin” in the Existing Credit Agreement shall be amended and restated in its entirety to read as follows:
“(ii) with respect to any Initial Revolving Loan, 3.50% per annum in the case of any Eurocurrency Loan and 2.50% per annum in the case of any ABR Loan; provided that if the Borrower receives a corporate credit rating of at least B1 from Moody’s at any time after the Effective Date, the Applicable Margin with respect to any Initial Revolving Loan shall be 3.25% per annum in the case of any Eurocurrency Loan and 2.25% per annum in the case of any ABR Loan, in each case, at all times thereafter regardless of any future rating and”
section 3. Reference to and Effect on the Loan Documents. (a) On and after the Effective Date, each reference in the Amended Credit Agreement to “hereunder”, “hereof”, “Agreement”, “this Agreement” or words of like import and each reference in the other Loan Documents to “Credit Agreement”, “First Lien Credit Agreement”, “thereunder”, “thereof” or words of like import shall, unless the context otherwise requires, mean and be a reference to the Amended Credit Agreement. From and after the Effective Date, this Agreement shall be a Loan Document under the Amended Credit Agreement.
(b) The Security Documents and each other Loan Document, as specifically amended by this Agreement, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed, and the respective guarantees, pledges, grants of security interests and other agreements, as applicable, under each of the Security Documents, notwithstanding the consummation of the transactions contemplated hereby, shall continue to be in full force and effect and shall accrue to the benefit of the Secured Parties under the Existing Credit Agreement and the Amended Credit Agreement. Without limiting the generality of the foregoing, the Security Documents and all of the Collateral described therein do and shall continue to secure the payment of all Obligations of the Loan Parties under the Loan Documents, in each case, as amended by this Agreement.
(c) The execution, delivery and effectiveness of this Agreement shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.
section 4. Binding Effect; Execution in Counterparts. This Agreement shall become effective when it shall have been executed by Holdings, the Borrower the Administrative Agent and the Revolving Facility Lenders, and thereafter shall be binding upon and inure to the benefit of Holdings, the Borrower, the Administrative Agent, each Issuing Bank and each Lender and their respective permitted successors and assigns. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by .pdf or other electronic form shall be effective as delivery of a manually executed original counterpart of this Agreement.
section 5. Amendments; Headings; Severability. This Agreement may not be amended nor may any provision hereof be waived except pursuant to a writing signed by Holdings, the Borrower, the Administrative Agent and the Revolving Facility Lenders party hereto. The Section headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting this Agreement. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof, and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
section 6. Governing Law; Etc.
(a) THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSES OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY PRINCIPLE OF CONFLICTS OF LAW THAT COULD REQUIRE THE APPLICATION OF ANY OTHER LAW.
(b) EACH PARTY HERETO HEREBY AGREES AS SET FORTH IN SECTIONS 9.11 AND 9.15 OF THE EXISTING CREDIT AGREEMENT AS IF SUCH SECTIONS WERE SET FORTH IN FULL HEREIN.
section 7. No Novation. This Agreement shall not extinguish the obligations for the payment of money outstanding under the Existing Credit Agreement or discharge or release the Lien or priority of any Security Document or any other security therefor. Nothing herein contained shall be construed as a substitution or novation of the obligations outstanding under the Existing Credit Agreement or instruments securing the same, which shall remain in full force and effect, except to any extent modified hereby or by instruments executed concurrently herewith and except to the extent repaid as provided herein. This Agreement shall not constitute a novation of the Credit Agreement or any other Loan Document. Nothing implied in this Agreement or in any other document contemplated hereby shall be construed as a release or other discharge of any of the Loan Parties under any Loan Document from any of its obligations and liabilities as a borrower, guarantor or pledgor under any of the Loan Documents.
section 8. Notices. All notices hereunder shall be given in accordance with the provisions of Section 9.01 of the Amended Credit Agreement.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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HOLDINGS:
AP GAMING HOLDINGS, LLC, a Delaware limited
liability company
By: /s/ Kimo Akiona
_____________________________
Name: Kimo Akiona
Title: CFO
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BORROWER:
AP GAMING I, LLC, a Delaware limited liability
company
By: /s/ Kimo Akiona
______________________________
Name: Kimo Akiona
Title: CFO
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[Amendment Agreement No. 3]
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JEFFERIES FINANCE LLC, as Administrative Agent
and Revolving Facility Lender
By: /s/ Paul McDonnell
______________________________
Name: Paul McDonnell
Title: Managing Director
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[Amendment Agreement No. 3]
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MACQUARIE CAPITAL FUNDING LLC, as a
Revolving Facility Lender
By: /s/ Mimi Shah
_____________________________
Name: Mimi Shah
Title: Authorized Signatory
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By: /s/ Lisa Grushkin
______________________________
Name: Lisa Grushkin
Title: Authorized Signatory
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[Amendment Agreement No. 3]
Exhibit 99.1
FOR IMMEDIATE RELEASE
AGS ANNOUNCES REPRICING OF $30 MILLION REVOLVING CREDIT FACILITY
LAS VEGAS – September 4, 2019 – AGS (NYSE: AGS) or (the “Company”) today announced a repricing of the $30 million revolving credit facility via a group of lenders, effective August 30, 2019, that reduces the interest rate margin on the revolver by 200 basis points to LIBOR plus 350 basis points (which will be further reduced by 25 basis points if at any time the Company receives a corporate credit rating of at least B1 from Moody’s).
The Company expects to record minimal fees related to this transaction in the third quarter of 2019.
AGS Chief Financial Officer Kimo Akiona said, “This interest rate reduction on our revolving credit facility reflects the progress we have made in reducing our leverage, the continued strong support of our lenders, and our ongoing commitment to maintaining a strong credit profile.”
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About AGS
AGS is a global company focused on creating a diverse mix of entertaining gaming experiences for every kind of player. Our roots are firmly planted in the Class II Native American gaming market, but our customer-centric culture and growth have helped us branch out to become a leading all-inclusive commercial gaming supplier. Powered by high-performing Class II and Class III slot products, an expansive table products portfolio, real-money gaming platforms and content, highly rated social casino solutions for operators and players, and best-in-class service, we offer an unmatched value proposition for our casino partners. Learn more at www.playags.com.
AGS Media Contacts:
Julia Boguslawski, Chief Marketing Officer and Executive Vice President of Investor Relations
jboguslawski@PlayAGS.com
Steve Kopjo, Director of Investor Relations
SKopjo@PlayAGS.com
©2019 AGS LLC. All® notices signify marks registered in the United States. All ™ and ℠ notices signify unregistered trademarks. Products referenced herein are sold by AGS LLC or other subsidiaries of PlayAGS, Inc.
