Mr. Prit Singh reports

FANSUNITE SELLS CHAMELEON GAMING PLATFORM TO BETR HOLDINGS, RETAINING WORLDWIDE AND PERPETUAL LICENSE

Fansunite Entertainment Inc. has signed a definitive asset purchase agreement, dated May 8, 2023, pursuant to which the company has sold the source code related to the company's Chameleon gaming platform to Betr Holdings Inc. and pursuant to which Fansunite retains the use of the platform and source code to further develop and maintain the platform and the ability to sell such use to another buyer in the future. Future code sales by Fansunite would not include any future enhancements made by Betr postclose. The transaction will allow the company to further focus on growing its most profitable business units.

Chameleon gaming platform

Chameleon is an i-gaming platform that enables companies to launch their own sports and related gambling brands or expand offerings thereunder.

Transaction highlights

Fansunite currently provides the player account management (PAM) system for Betr's operations, which made Chameleon an excellent fit with Betr's long-term strategy of owning its technology platform. Betr is the microbetting specialist sportsbook co-founded by Jake Paul, currently operating in Ohio with plans to expand throughout the United States.

In addition, Betr has engaged 28 employees or contractors from the company to continue work on the platform and the parties have entered into a transition services agreement with respect to certain transition services to be provided on a postclose basis.

"This is a transformational transaction for Fansunite and we are excited to move forward as a business that is a dominant player in its sector with the ability to execute on a profitable growth strategy," said Scott Burton, chief executive officer of Fansunite. "With the completion of this sale, we will reduce annual costs, ensuring we can execute on our strategy to generate positive cash flow this year.

"When we entered into our multiyear agreement with Betr, we knew their long-term strategy included building or acquiring their PAM. In addition to the cash component of the deal, we will receive equity ownership in Betr, allowing us to participate in their growth while also retaining use of the current code to support existing B2B [business to business] clients and the ability to further sell such use to a buyer in the future," added Mr. Burton.

"With both the recent sales behind us, we can focus additional resources towards our highest revenue and margin businesses, such as Betting Hero and the affiliate business," continued Mr. Burton. "The Betting Hero team continues to scale as proven by their most recent success at the EGR Awards. They are a dominant operator in the live activation affiliate space and have added two new business lines to their offering with Hero Hotline and Hero Research. Both new segments are gaining traction and we believe they have the potential to be as successful as the primary business of Betting Hero while driving profitability for Fansunite."

Transaction terms

Pursuant to the terms of the definitive agreement, Betr will acquire the property and assets used in the platform for total consideration of approximately $10-million. The purchase price comprises (i) $3-million in cash paid on closing; (ii) $2-million in Series A2 preferred shares of Betr, to be settled through warrants to purchase the Series A2 preferred shares at a price of one U.S. cent per preferred share; and (iii) milestone payments of up to $5-million payable over 12 months following the closing of the transaction upon achievement of certain integration milestones, payable as to $3-million in cash and as to $2-million payable by way of warrants to purchase preferred shares at a price of one U.S. cent per preferred share.

The company will divide the net proceeds of this transaction and its recently announced sale of its wholly owned subsidiary, McBookie Ltd., with a portion to be allocated to pay money owed to Centurion Financial Trust, an investment trust formed by Centurion Asset Management Inc., pursuant to the loan announced in the company's Sept. 19, 2022, news release. It is expected that the loan amount will be reduced by approximately $5.5-million.

Tekkorp Capital Advisors acts as a strategic adviser to the company.

DLA Piper LLP acted as legal adviser to Fansunite and Bennett Jones LLP acted as legal adviser to Betr.

About Fansunite Entertainment Inc.

Fansunite is a global sports entertainment and gaming company. Its business is focused on the regulated and lawful sports betting and i-gaming market which includes sports betting, customer acquisition, retention, support and reactivation.

We seek Safe Harbor.