A company controlled by the founder and former CEO of Galaxy Gaming has been issued a $39 million promissory note to redeem a roughly 60 percent stake in the Las Vegas-based table game provider.
In a statement Tuesday afternoon, Galaxy said redemption of the shares owned by Triangulum Partners LLC “satisfied the conditions” in the company’s articles of incorporation and “was in the best interests of the company and its stockholders.”
Triangulum is controlled by Robert Saucier, who founded Galaxy 18 years ago. Saucier resigned his roles as CEO and board chairman in 2017 after Nevada gaming regulators threatened to reject the company’s license application because of issues in Saucier’s past.
Saucier resigned completely from the company’s board last year and gave up an executive vice president role when Galaxy retained Macquarie Capital to assist it in evaluating strategic alternatives, “including the potential sale of the shares of the company’s common stock held by Triangulum.”
According to the company’s statement, Galaxy issued a promissory note payable to Triangulum in the face amount of $39,096,401. The promissory note matures on May 5, 2029, and bears interest at a rate of 2 percent per year. Galaxy said it can prepay principal and accrued interest at any time.
Galaxy Gaming CFO Harry Hagerty said Wednesday Triangulum would be paid the 2 percent interest on the total amount annually. He said the company could pay off the entire promissory note at any time during the 10-year period.
“In redeeming Triangulum’s shares, we have fulfilled our obligations to Galaxy and its stockholders, and the jurisdictions in which the company is privileged to hold or seek gaming licenses,” Galaxy Chairman Mark Lipparelli said in a statement.
Saucier could not be reached.
Galaxy provides casinos with non-traditional table games and table game bonus features, such as side wagers on blackjack.
The company is traded on the Over the Counter Market and closed Wednesday at $1.80 per share. Galaxy shares have a 52-week high of $2.20, and the company has a market capitalization of $72.7 million.
The company said Triangulum’s 23.3 million shares were redeemed at $1.68 per share, which was the average closing price over a 30-day period prior to the board voting on the redemption.
In July 2017, Galaxy’s gaming license application in Nevada was referred back to staff for additional work after the Gaming Control Board spent two days grilling the company and Saucier over past business practices in Washington, Oregon and California. The company was licensed as a manufacturer and distributor two months later after Saucier was removed from the key positions. Saucier’s license was also referred back to staff.
Hagerty said in November the company was seeking licensing opportunities in other jurisdictions, but regulators “were unwilling to move forward,” due primarily to the 2017 investigation in Nevada and Saucier’s continued majority ownership stake in the company.
“As a gaming company, we have a duty to preserve, protect and procure the licenses that are fundamental to our business,” Galaxy CEO Todd Cravens said in a statement. Cravens and Lipparelli were both named to their positions in 2017.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
