Clairvest unhappy with India banning real money gaming

Executive Summary

• Clairvest Group Inc. reports a material adverse regulatory development regarding its investment in Head Digital Works, an online skill-based gaming platform in India.
• On August 21, 2025, the Indian parliament passed new legislation banning real-money gaming and associated facilitation, which would render Head Digital Works' business operations illegal if enacted.
• Clairvest holds a 9.6% stake in Head Digital Works (based on book value as of June 30, 2025) and intends to pursue legal challenges, including injunctive relief, against the new legislation.

Key Details

• Regulatory Action: The Parliament of India passed new online gaming legislation on August 21, 2025, banning real-money gaming and its facilitation.
• Legislative Status: The legislation requires the signature of the President of India to come into effect.
• Impact on Investee: If enacted, the legislation would make it illegal for Head Digital Works to conduct its business, as all operations are located in India.
• Investment Position: Clairvest Group and Clairvest Equity Partners invested in Head Digital Works in 2017. The investment represents 9.6% of Clairvest's book value on a pretax, precarry basis as at June 30, 2025.
• Company Response: Head Digital Works intends to pursue all legal rights to challenge the validity of the legislation, including seeking injunctive relief while court challenges are in process.

Notable Quotes

• "Clairvest Group Inc. has seen a material adverse regulatory development with respect to Head Digital Works..."
• "The company intends to pursue all of its legal rights to challenge the validity of the legislation, including seeking injunctive relief while court challenges are in process."