SINGAPORE, June 18, 2019 /PRNewswire/ -- Clarion Finance Pte Ltd., a private investment and asset management firm based in Monaco and Singapore, releases the following letter to Newgioco Group Inc. (OTCMKTS: NWGI)
Dear Mr. Michele Ciavarella, CEO Newgioco Group
CC. Mr. Paul Sallwasser (Director) Mr. Steven Shallcross (Director)
Subject: Recent Letter to Stockholders
I am writing to you as a Shareholder and major Debenture Holder that has reviewed your recent letter of June 05, 2019 with great disdain.
Your letter is greatly misleading and lacks candor. Let me bring to your attention the following issues faced by Newgioco Group that puts at great risk value creation potential of Newgioco and major concerns of Newgioco's viability and ability to sustain servicing its obligations to Debenture Holders.
These issues are;
- Other than "promotional" press announcements no material progress with the USA expansion strategy which was a key use of proceeds from the 2018 Debenture capital raise. In fact, when we have followed up with several of the organizations from the press announcements, Newgioco's plans appeared to be one of retrenchment not expansion. More specifically, they misled investors by not disclosing that Montana's SB330 was vetoed by the Governor in favor of HB725 which favors the state lottery.
- The last two reported quarters represented ongoing cash losses. When we look at the core operations of the company, Newgioco appears to be shrinking in margin while increasing its use of capital and capital commitments (example Virtual Gaming acquisition payables).
- We have conducted "channel checks" with various gaming experts in the USA who have deep regulatory gaming knowledge. Your particular background which was not disclosed to us by Echelon Wealth Management the time of the Debenture would appear to not be suitable for gaming licensing in key jurisdictions such as Nevada and New Jersey. Clearly such restriction of shareholder value creation cannot be accepted.
- Discrepancy of facts from your Letter to Shareholders of June 05 and the Resignation Letter of the Independent Members of the Board is deeply concerning and we would expect would have raised "alarms" with the Securities and Exchange Commission.
I and other Debenture holders are requesting an immediate public shareholder meeting to be held at a location in which we intend to attend and participate.
The above matters are of deep concern to us and we expect that our concerns will be treated seriously.
About Clarion Finance AG
Clarion is a Monaco and Singapore based Private, Venture and Direct to Public investment and asset management firm with over 35 years of experience funding more than a thousand private and public companies many growing to billions of dollars of value. Clarion and its team are globally positioned with operations in Europe, USA and Asia.
Carlo Civelli, Clarion Finance AG, Tel: +65 6697 5250, Email: email@example.com; Craig MacPhail, Group Director, T +1 416-586-1938
SOURCE Clarion Finance AG