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eGames Acquires Heyday Games(June 28, 2011)
LANGHORNE, Pa., June 28, 2011 (GLOBE NEWSWIRE) -- eGames, Inc. (Pink Sheets:EGAM), a publisher of popular casual games at retail and online for over ten years announced today that it has completed the acquisition of substantially all of the assets of Heyday Games, Inc., a producer of cross-platform social game content, effectively making eGames one of the only publicly-traded social game companies in the market today. As part of the transaction, Gene Mauro, Heyday's former CEO, has joined eGames as its new President and Chief Operating Officer. Mr. Mauro will be in charge of all aspects of future game products. Also joining eGames as part of the transaction is F.J. Lennon, Heyday's former Chief Creative Officer, who will join eGames in that capacity and will oversee the development and production of future game products. Jerry Klein will remain as eGames' CEO.
eGames management will apply its background in producing traditional and social game content to the creation of a widely appealing virtual universe accessible on Facebook, the open web and mobile devices. "We are creating an innovative social game product aimed at boomers and early boomers," said Mauro. "Our team has a strong track record of creating hit games and launching cutting edge web companies and we look forward to combining this group with eGames' marketing, sales, financial reporting and legal expertise and experience." Members of the Heyday management team, including Mauro, Lennon, and Jeff Kesselman, Chief Technological Officer at Heyday who has now joined eGames in that role, have been responsible for launching companies like Take-Two Interactive Software, Bunchball, and hit web/Facebook games including: "Zoo Kingdom", "Oregon Trail", "Where in the World is Carmen Sandiego" and "Poptropica."
Social games have been a catalyst for the significant growth over the past three years on social networks like Facebook where companies like Zynga, a privately held developer and publisher of social games, has been reported to be valued at over ten billion dollars. "There is tremendous growth in social games but to date investment has been limited to venture capitalists, private investors, other institutional investors, and so called 'secondary markets'," said Klein. "Gene and I have worked together in different capacities since 1997 and this acquisition is the culmination of an opportunity we have considered for a long time. Gene has assembled a world-class team to realize the Heyday vision and we are thrilled to have them as members of the eGames team. We are excited about this acquisition and our prospects for creating a sustainable and profitable growth strategy," added Klein.
Pursuant to the purchase agreement between eGames, Heyday and its shareholders, eGames has issued 3,706,387 shares of its common stock to Heyday, and will issue an additional 411,821 shares of common stock in one year, which shares are being held back and subject to eGames' indemnification claims under the purchase agreement. eGames will issue an additional 2,745,472 shares of eGames common stock to Heyday if eGames' cumulative net income equals or exceeds, in the aggregate, $20,592,000 during any of the fiscal years beginning June 30, 2011 and ending June 30, 2015. The Company is relying on the exemption from registration provided by Rule 506 of Regulation D under the Securities Act of 1933, as amended ("Regulation D"), for sales to "accredited investors" (as such term is defined in Rule 501 of Regulation D) in issuing the shares to Heyday. Also as part of the transaction, Heyday, Mauro and Lennon have each entered into Non-Competition and Confidentiality Agreements with eGames. eGames and Heyday also entered into a Registration Rights Agreement covering the shares issued in this transaction.
About eGames, Inc.:
eGames, Inc., headquartered in Langhorne, Pennsylvania, develops and publishes casual games for leading Social Networks, the PC, Nintendo DS and Wii, iPhone, and the Internet. Additional information regarding eGames, Inc. can be found at http://www.egames.com.
The eGames Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7123
Forward-Looking Statement Safe Harbor
This press release contains certain forward-looking statements, including without limitation, statements regarding: the creation of a widely appealing virtual universe accessible on Facebook, the open web and mobile devices which is aimed at an under-served audience; and eGames' prospects for creating a sustainable and profitable growth strategy. eGames cautions readers that the risks and uncertainties that may affect our future results and performance include, but are not limited to: continued overall economic problems in the United States and around the world that negatively affect consumer spending, retail markets and the videogame industry; the potential failure of business partners with which we do business, including developers, distributors, retailers, licensees and publishers; delays in the development and release of future titles; inability to fund continued development of future titles; technical and other issues that may delay or halt development of future titles; the failure of new titles to be accepted by consumers; our ability to enter into and maintain commercially successful publishing, licensing and distribution relationships; and an increase in competition; as well as the risks and uncertainties discussed under the heading "Factors Affecting Future Performance" in our Annual Report for the fiscal year ended June 30, 2010 as posted on the Company's website and on www.otcmarkets.com
CONTACT: eGames, Inc.
Jerry Klein, CEO
(215) 750-6606 (Ext. 118)
Gene Mauro, President and COO
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