Reported Earnings • Nov 30
Third quarter 2022 earnings released: EPS: US$0.017 (vs US$0.065 in 3Q 2021) Third quarter 2022 results: EPS: US$0.017 (down from US$0.065 in 3Q 2021). Revenue: US$13.0m (up 8.1% from 3Q 2021). Net income: US$2.17m (down 73% from 3Q 2021). Profit margin: 17% (down from 67% in 3Q 2021). Over the last 3 years on average, earnings per share has increased by 62% per year but the company’s share price has only increased by 24% per year, which means it is significantly lagging earnings growth. Board Change • Nov 16
Less than half of directors are independent No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 1 experienced director. 4 highly experienced directors. 2 independent directors (3 non-independent directors). Independent Director Larry Hoff was the last independent director to join the board, commencing their role in 2010. The following issues are considered to be risks according to the Simply Wall St Risk Model: Minority of independent directors. Insufficient board refreshment. Announcement • Sep 09
Maverick Gaming LLC entered into an arrangement agreement to acquire 94.3% stake in Evergreen Gaming Corporation (TSXV:TNA) for $64.2 million. Maverick Gaming LLC entered into an arrangement agreement to acquire 94.3% stake in Evergreen Gaming Corporation (TSXV:TNA) for $64.2 million on September 8, 2022. In a related transaction, Maverick Gaming LLC entered into an initial purchase agreement to acquire 5.7% stake in Evergreen Gaming Corporation from Michel's Development, LLC for $3.9 million. Under the transactions, Maverick would acquire 100% of the outstanding common shares of Evergreen for cash consideration of $0.55 per Evergreen share. Both the transactions provides total consideration, subject to potential adjustment, of approximately $68 million. Maverick Gaming will acquire 7 million shares of Evergreen under the initial purchase agreement and remaining shares will be acquired under the arrangement agreement. Post completion of both transactions, which is anticipated to occur on the same day, Maverick Gaming will hold 100% stake in Evergreen. The Arrangement Agreement provides that if Evergreen's Closing Cash, is less than $26 million, then the total consideration payable to the Evergreen shareholders under the Transaction will be reduced proportionately, provided however that if Closing Cash is less than $20.6 million, there is no further reduction in the total purchase price beyond $5.4 million. If the total purchase price is reduced then the price payable for each share is reduced from $0.55. If the sale contemplated by the Initial Purchase Agreement is completed and the Arrangement Agreement should subsequently fail to close for any reason, the sale under the Initial Purchase Agreement will be rescinded. Evergreen is entitled to terminate the Arrangement Agreement in order to enter into a definitive agreement with respect to a superior proposal, in which case Maverick is entitled to a termination fee of $2.5 million. Evergreen is entitled to a reverse break fee of $2.5 million in certain circumstances upon the termination of the Arrangement Agreement.
The Transaction is subject to approval by the Evergreen shareholders, court approval and other closing conditions, including Closing Cash being not less than $28 million, receipt of required Washington State gaming approvals and the TSX Venture Exchange accepting the Arrangement Agreement for filing. The Transaction was unanimously approved at a meeting of the Evergreen Board of Directors and the Evergreen Board of Directors unanimously recommends that Evergreen shareholders vote in favour of the Transaction. The consideration is not subject to a financing condition. Shareholders who collectively hold or control approximately 78% of Evergreen’s outstanding shares have entered into support agreements pursuant to which they have agreed to vote their shares in favour of the Transaction. The Transaction is expected to close by the end of 2022. The consideration secures immediate value for Evergreen shareholders. Evans & Evans, Inc. is acting as financial advisor to Evergreen. Evans & Evans, Inc. acted as fairness opinion provider to Evergreen’s Board of Directors. 
