Editor’s note: This article was updated to represent a recent increase in share capital, which is not yet visible in the German commercial register. Freaks 4U Gaming CEO Michael Haenisch reached out to TEA and shared that “before agreeing upon the Convertible Note with NODWIN, we increased the share capital of Freaks 4U Gaming among the existing shareholders to 104,764 shares.” The original version of this article stated that Freaks 4U Gaming has 82,910 outstanding shares with a share distribution of 37.47% (Michael Haenisch), 29.36% (Co-Investor FRE Gmbh & Co. KG), 16.27% (Jens Enders), 14.73% (Game.Fin S.r.l), and 2.16% (Matthias Remmert).
In a recent filing, India-based mobile gaming company Nazara Technologies revealed that on Dec. 29 Nodwin Singapore (NODWIN Gaming International Pte. Ltd.)—a division of its wholly-owned subsidiary NODWIN Gaming— signed an agreement with Berlin-based esports marketing company Freaks 4U Gaming for a convertible note at a consideration of €3.6M EUR (INR ₹33.26 Cr, or roughly $3.9M USD), to be paid in cash.
“If [the] conversion option of the convertible note is exercised the same will be converted into 7,366 shares at a future date/conversion date. The percentage of shareholding will depend on the terms and conditions of the said convertible note,” Nazara wrote in a filing. Nazara further added that NODWIN is exploring ways to work with Freaks 4U to improve its efforts in the PC gaming space.
Currently, Freaks 4U Gaming GmbH has 104,764 outstanding shares. Therefore, a conversion of NODWIN Gaming’s loan via the issuance of new shares would value Freaks 4U Gaming at approximately €51.2M ($56.3M). Freaks 4U Gaming is owned by Co-Investor FRE Gmbh & Co. KG (owning a 44.83% stake), co-founder and CEO Michael Haenisch (who owns a 33.27% stake), co-founder Jens Enders (who owns a 14.56% stake), Game.Fin S.r.l (owning a 5.46% stake), and Senior Vice President Product, TV & Media Productions Matthias Remmert (who owns a 1.88% stake).
In case you didn’t know, a convertible note is a type of bond (debt) issued by companies that is convertible to company stock, depending on the circumstances, terms, and conditions set by the issuing party. You can learn more about convertible notes here.
Freaks 4U Gaming CEO Michael Haenisch told The Esports Advocate the following on Tuesday morning:
“It’s exciting to see the many similarities and complementary strengths between NODWIN Gaming and Freaks 4U Gaming. We are eager to explore potential synergies and ideas. I am particularly enthusiastic about advancing our conversations with NODWIN to explore how our two companies might collaborate more closely in the future.“
Freaks 4U has had a few financial challenges over the last several months, culminating in several belt-tightening measures, including turning over the license to the Northern League of Legends Championship (NLC) to Denmark-based esports platform and organizer Leagues.gg, and some layoffs at the end of November (the company said at the time that by the end of 2023 it would cut around 30 positions).
Tobias Seck contributed to this article.