On July

The Share Sale Agreement, dated as of July 13, 2016, by and among Hydra, the Vendors named on Schedule 1 thereto, DMWSL 633 Limited (Target Parent), DMWSL 632 Limited and Gaming Acquisitions Limited (the Sale Agreement), provides for the acquisition by Hydra from the Vendors of all of the equity and shareholder loan notes of Target Parent and the Inspired Group (the Business Combination).

The Sale Agreement reflects a transaction value for the Business Combination of 200 million/$264 million, plus an earn-out of up to $25 million (up to 2.5 million Hydra shares), expected to represent approximately 96 million/$126 million of equity value after adjusting for the maintenance of debt and certain other liabilities (based on the current USD/GBP exchange rate of $1.32/ 1.00 as of July 13, 2016). Exclusive of the potential earn-out, the consideration to be paid for the equity and shareholder loan notes of the Target Parent and the Inspired Group will be the aggregate of the Base Consideration (as defined below),

less

a fixed amount of Accruing Negative Consideration (21,500 per day from but excluding July 2, 2016 through and including the closing of the Business Combination).

The Base Consideration to be paid for the equity and shareholder loan notes pursuant to the Sale Agreement will equal (i) 100,363,394.31,

plus

(ii) any amount by which the Companys transaction expenses (Purchaser Costs) referred to in Schedule 6 to the Sale Agreement exceeds 8,237,909.41,

minus

(iii) certain expenses of the Vendors noticed by the Institutional Vendors Representative, not to exceed 3,000,000,

minus

(iv) certain excess interest payments owing on the Inspired Groups existing financing arrangements.

The Vendors will be paid the Base Consideration, adjusted for the Accruing Negative Consideration (the Completion Payment), partially in cash (the Cash Consideration), to the extent available after the payment oftransaction expenses and working capital adjustments, if any, and partially in newly-issued shares of Company common stock (Purchaser Shares) at a value of $10.00 per share (the Stock Consideration), as follows:

a.

The Cash Consideration represents the cash Hydra will have available at closing to pay the Completion Payment. The Cash Consideration will equal (i) the Companys current cash in trust, (the $20 million proceeds of a private placement to Macquarie Capital), and any other available funds,

minus

(ii) an agreed amount of Purchaser Costs (including expenses incurred in connection with the preparation of the proxy statement and meetings with Hydra stockholders),

minus

(iii) an agreed amount of the Vendors transaction expenses,

minus

(iv) the amount of repayment required under certain of the Inspired Groups financing arrangements,

minus

(v) 5 million for the purposes of retaining cash on the Companys balance sheet.

b.

The Stock Consideration will equal the Completion Payment minus the Cash Consideration, divided by $10.00 per share.

The earn-out payment of up to $25,000,000 (the Earn-out Consideration) shall be paid to the Vendors exclusively in Purchaser Shares and will be determined based on Inspireds performance in certain jurisdictions through September 30, 2018 pursuant to a formula set forth in Schedule 5 to the Sale Agreement.

The consummation of the Business Combination is conditioned upon the approval of Hydras stockholders, certain regulatory approvals pertaining to the gaming industry and other customary closing conditions.

This is only a summary of certain terms of the Sale Agreement and is qualified by reference to the complete text of that agreement, which is incorporated by reference herein. Certain additional information related to the Business Combination and Inspired can be found in the Companys press release dated July 14, 2016. A copy of the press release was filed as Exhibit 99.1 to the Companys Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2016. An investor presentation regarding the Business Combination and Inspired was furnished pursuant to Item 7.01 of Form 8-K as Exhibit 99.1 to the Companys Current Report on Form 8-K filed with the Securities and Exchange Commission on July 19, 2016.

SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01 Financial Statements and Exhibits

Exhibits

Exhibit Number

Description

10.1

Share Sale Agreement, dated as of July 13, 2016, by and among Hydra Industries Acquisition Corp., the Vendors named on Schedule 1 thereto, DMWSL 633 Limited, DMWSL 632 Limited and Gaming Acquisitions Limited.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: July 19, 2016

HYDRA INDUSTRIES ACQUISITION CORP.

By

/s/ Martin E. Schloss

Name: Martin E. Schloss

Title: Executive Vice President, General

Counsel and Secretary

EXHIBIT INDEX

Exhibit Number

Description

10.1

Share Sale Agreement, dated as of July 13, 2016, by and among Hydra Industries Acquisition Corp., the Vendors named on Schedule 1 thereto, DMWSL 633 Limited, DMWSL 632 Limited and Gaming Acquisitions Limited.

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