Atari will announce various steps to consolidate its balance sheet, set up a consolidation and propose a transfer to Euronext Growth

ATARI

Atari will announce various steps to consolidate its balance sheet, set up a consolidation and propose a transfer to Euronext grow

Paris, February 21, 2022 Atari, SA, a global producer in the industry of consumer brands and interactive entertainment products (the “Company”), announced today that it is working on long-term solutions to strengthen its balance sheet, limit the volatility of its shares and reduce the compliance burden by transferring its listing to Euronext Growth.

As discussed during the General Meeting of November 30, 2021, the Company is currently preparing a recapitalization of 22 to 25 million euros with maintenance of the preferential subscription right, the realization of which remains subject to the approval of the AMF on the prospectus and to the granting of a public offering exemption.

If approved by the AMF, this capital increase will be made available to existing shareholders through a capital increase and Irata LLC, the main shareholder of the Company, will irrevocably guarantee its completion up to 75% of the initial size (the “Fund raising”).

As part of this guarantee, Irata LLC is likely to cross the threshold of 30% of the capital and voting rights of the Company, which would place it in a situation of mandatory public offer. The maximum participation of Irata LLC in the Company post-Fundraising could be between approximately 29% and 34% of the capital and voting rights (depending on the price assumptions and including the remuneration of the guarantee which will make the object of an acknowledgment of debt and will be incorporated in the capital increase). Irata LLC has therefore asked the AMF to grant an exemption from the obligation to file a public offer on the basis of Article 234-9 2° of the AMF General Regulations (subscription to the increase capital of a company in financial difficulty, subject to the approval of the general meeting of its shareholders).

Following completion of the planned fundraising, the Company is considering a subsequent transfer of the listing of its shares from Euronext to Euronext Growth. These steps will enable Atari to adequately finance the implementation of its short and medium-term strategy, reduce its cost exposure to regulatory constraints linked to the Euronext market and be listed on a simplified market more suited to the Profile of the group and current need. This will allow the Company to focus its resources more on the underlying business while maintaining a listing on Euronext on a market more appropriate to the size of the Company.

This transfer to Euronext Growth will be discussed and decided at a general meeting that Atari will convene shortly.

This planned transfer from Euronext to Euronext Growth would possibly be preceded or followed by a reverse stock split of the Company’s shares, the terms of which will subsequently be determined by the Company’s Board of Directors, in order to improve the market profile and limit share price volatility.

Atari remains fully focused and dedicated to the implementation of the Group’s strategy presented to shareholders at the General Meeting of November 30, 2021.

Following the negative vote of the shareholders of Atari SA during the General Meeting of November 30, 2021 concerning the compensation of Frédéric Chesnais in respect of his former mandate as Chief Executive Officer for the financial year ended March 31, 2021, January 28, 2022, the Company has notified Frédéric Chesnais of its request for restitution and restitution of the corresponding variable and exceptional compensation consisting of 49,108,403 ATRI Atari cryptocurrency tokens and 94,439 USD, in order to comply with the applicable Say-on-Pay regulations .

The Atari Group has encountered certain problems in the relationship with its licensee ICICB Limited and ICICB Investments Limited with respect to the Atari licenses granted to ICICB. As a result, notices of breach have been sent by the Atari Group to these licensees in relation to the corresponding license agreements, requesting the remedy of the breaches concerned. If no corrective action is taken by the ICICB in the short term to remedy these shortcomings, the Atari Group could be required to terminate the corresponding license agreements. In the event that such a termination could not be avoided, this would lead to a depreciation of the minimum revenues recorded in Atari’s accounts in accordance with the applicable accounting principles, for an estimated financial impact of $11.4 million.

It has also come to Atari’s attention that ICICB Limited has issued a press release regarding the list of decentralized Atari tokens in which a member of ICICB Limited has been misidentified as an Atari officer. In addition, it has come to the knowledge of Atari that past and current legal actions may have been taken by a foreign jurisdiction against the sole shareholder and director of ICICB Limited. Although these legal actions do not relate in any way to the activities carried out by Atari Chain, Limited and more generally by the Atari Group, Atari is evaluating the most appropriate course of action to minimize the harmful consequences for Atari, including with regard to potential reputational risk.

In addition, while Atari is involved in customary litigation related to the protection of its intellectual property, Atari is currently appealing a loss in a unique intellectual property protection case and is resisting a claim for fees and charges over $2 million. Atari considers the request to be unreasonable and legally questionable and will vigorously defend against the claim.

Finally, Atari is currently reviewing its business strategy with respect to its hardware business and will communicate in due course the operational and financial impacts of these decisions if necessary.

Warning:

The realization of the plans, their operating budget and their financing plan remain by nature uncertain, and the non-fulfilment of these assumptions may impact their value.
About Atari:

Atari, comprised of Atari SA and its subsidiaries, is a global, cross-platform, interactive entertainment licensing group. A true video game innovator, founded in 1972, Atari owns and/or manages a portfolio of more than 200 games and franchises, including world-famous brands such as Asteroids®, Centipede®, Missile Command® and Pong®. From this large portfolio of intellectual properties, Atari offers attractive online games for smartphones, tablets and other connected devices. Atari also develops and distributes interactive entertainment for Microsoft, Sony and Nintendo game consoles. Atari also leverages its brand and franchises with licensing agreements through other media, merchandise, and publishing. For more information: www.atari.com and www.atari-investors.fr/en/. The Atari share is listed in France on Euronext Paris (Compartment C, ISIN code FR0010478248, Ticker ATA) and is eligible for the Nasdaq International program in the United States (OTC – Ticker PONGF).

contacts

Atari – Philippe Mularski, Financial Director Calyptus – Marie Calleux
Tel +33 1 83 64 61 57 – [email protected] Tel + 33 1 53 65 68 68 – [email protected]

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