UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 21, 2016
ENTERTAINMENT GAMING ASIA INC.
(Exact Name of Registrant as Specified in Its Charter)
| Nevada | 001-32161 | 91-1696010 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (I.R.S. Employer Identification Number) |
| Unit C1, Ground Floor, Koon Wah Bldg. No.2 Yuen Shun Circuit, Yuen Chau Kok Shatin, New Territories, Hong Kong SAR |
| (Address of principal executive offices) |
| + 852-3151-3800 |
| (Registrant’s telephone number, including area code) |
| Not applicable |
| (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 obligations of the registrant under any of the following provisions.
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c) |
| Item 1.01 | Entry Into a Material Definitive Agreement |
On April 21, 2016, Entertainment Gaming Asia Inc. (“the Company”) entered into a binding letter of intent (“LOI”) with Gaming Partners International Corporation (“GPIC”) to sell the assets of the Company’s wholly-owned Hong Kong subsidiary, Dolphin Products Limited (“Dolphin”), to GPIC. Dolphin is a leading manufacturer and distributor of RFID and traditional gaming chips and plaques under the Dolphin brand to major casinos in Asia and Australia.
Under the terms of the LOI, GPIC will acquire the assets of Dolphin including fixed assets, raw materials and inventory, and intellectual property for an estimated cash purchase price of approximately $5.9 million, subject to physical inventory counts at closing. The purchase price will be paid out in installments over a 24-month period after closing. In addition, GPIC will make earn out payments to the Company over the next five years based on a varying percentage of net revenues on certain select sales to specific Asian-based casinos. The asset sale represents Dolphin’s and the Company’s exit from the table game equipment business and, as part of the transaction, Dolphin and the Company will each agree not to engage in the manufacture of table game equipment in competition with GPIC.
The Company anticipates negotiating a definitive asset purchase agreement to effect the transaction consistent with the terms of the LOI and closing the transaction in May 2016. However, there is no guarantee the transaction will be consummated.
The Company announced this transaction in a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by this reference.
| Item 9.01 | Financial Statements and Exhibits |
| (d) Exhibits | Method of Filing |
The following exhibit is filed with this report:
| Exhibit 10.1 | Press Release Announcing Entrance into Binding Letter of Intent to Sell Dolphin Assets to Gaming Partners International Corporation issued on April 22, 2016 | Filed Electronically herewith |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ENTERTAINMENT GAMING ASIA INC. | ||
| Dated: April 22, 2016 | /s/ Clarence Chung | |
| Clarence (Yuk Man) Chung | ||
| Chief Executive Officer |
Exhibit 99.1
For Immediate Release
CONTACTS:
Entertainment Gaming Asia Inc.
Traci Mangini, Interim Chief Financial Officer
tracimangini@EGT-Group.com
872/802-4227
Gaming Partners International Corporation
Gregory Gronau, President
and Chief Executive Officer
702/384-2425
ENTERTAINMENT GAMING ASIA INC.’S DOLPHIN PRODUCTS SUBSIDIARY
ENTERS INTO BINDING LETTER OF INTENT TO SELL ITS ASSETS TO
GAMING PARTNERS INTERNATIONAL CORPORATION
Hong Kong – April 22, 2016 – Entertainment Gaming Asia Inc. (NASDAQ: EGT) and Gaming Partners International Corporation (NASDAQ: GPIC), today announced that EGT’s wholly-owned Hong Kong subsidiary, Dolphin Products Limited (“Dolphin”), has entered into a binding letter of intent (“LOI”) to sell its assets to GPIC. Dolphin is a leading manufacturer and distributor of RFID and traditional gaming chips and plaques under the Dolphin brand to major casinos in Asia and Australia. GPIC is a leading manufacturer and supplier of casino table game equipment, including gaming chips and plaques, to licensed casinos worldwide under the brand names Paulson, Bourgogne et Grasset, Gemaco and Bud Jones.
Under the terms of the LOI, GPIC will acquire the assets of Dolphin including fixed assets, raw materials and inventory and intellectual property for an estimated cash purchase price of approximately $5.9 million, subject to physical inventory counts at closing. The purchase price will be paid out in installments over a 24-month period after closing. In addition, GPIC will make earn out payments to EGT over the next five years based on a varying percentage of net revenues on certain select sales to specific Asian-based casinos. The asset sale represents Dolphin’s and EGT’s exit from the table game equipment business and, as part of the transaction, Dolphin and EGT will each agree not to engage in the manufacture of table game equipment in competition with GPIC.
The companies anticipate negotiating a definitive asset purchase agreement to effect the transaction consistent with the terms of the LOI and closing the transaction in May 2016. The closing of the transaction will be subject to GPIC’s satisfactory due diligence review of Dolphin and customary closing conditions to be set forth in the definitive asset purchase agreement. Accordingly, there is no guarantee the transaction will be consummated.
– more –
| EGT Enters into Binding LOI to Sell Assets of its Dolphin Subsidiary to GPI, 4/22/2016 | page 2 |
About Gaming Partners International Corporation
Gaming Partners International Corporate (NASDAQ: GPIC) manufactures and supplies casino table game equipment to licensed casinos worldwide. Under the brand names of Paulson®, Bourgogne et Grasset®, Gemaco® and Bud Jones®, GPIC provides casino currency such as chips, plaques and jetons; playing cards; gaming furniture and table accessories; table layouts; dice; and roulette wheels. GPIC pioneered the use of security features such as radio frequency identification device (RFID) technology in casino currency and provides RFID solutions including RFID readers, software and displays. Headquartered in North Las Vegas, Nevada, GPIC also has manufacturing facilities, warehouses and/or sales offices in Beaune, France; San Luis Rio Colorado, Mexico; Blue Springs, Missouri; Atlantic City, New Jersey; Gulfport, Mississippi; and Macau S.A.R., China.
About Entertainment Gaming Asia Inc.
Entertainment Gaming Asia Inc. (NASDAQ: EGT), an indirect, majority-owned subsidiary of Melco International Development Limited, is a gaming company in Pan-Asia engaged in the leasing of electronic gaming machines to the gaming industry in Cambodia and the Philippines and the development and operation of gaming venues in Asia under its “Dreamworld” brand. The Company also manufactures and sells RFID and traditional gaming chips and plaques to major casinos under its “Dolphin” brand.
Forward Looking Statements
This press release contains forward-looking statements concerning Entertainment Gaming Asia and Gaming Partners International Corporation within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those forward-looking statements include statements regarding expectations for the total consideration value of the transaction, the ability to complete the acquisition and in the timeframe contemplated and the expected benefits to the companies from completing the acquisition. Such statements are subject to certain risks and uncertainties, and actual circumstances, events or results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to differences include, but are not limited to, the risk that the acquisition cannot be completed or completed under the terms specified in the LOI and those other risks set forth in the companies’ respective annual reports on Form 10-K for the year ended December 31, 2015 filed with the SEC and subsequently filed reports. The companies caution readers not to place undue reliance on any forward-looking statements and they do not undertake, and specifically disclaim any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur.
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