FansUnite's Shareholders Approve Sale Transaction, Distribution and Voluntary Delisting

Rhea-AI Summary

FansUnite Entertainment Inc. (TSX: FANS) (OTCQB: FUNFF) shareholders have approved the sale of FansUnite US Inc. to Hero Group Corp. for US$37.5 million, adjusted on a cash-free, debt-free basis. The transaction is expected to close on August 15, 2024. Following this, the company plans to voluntarily delist from the Toronto Stock Exchange on August 21, 2024. FansUnite will distribute 90% of the net proceeds to shareholders, estimated at C$0.065 to C$0.075 per share. The distribution record date is set for August 26, 2024, with payment expected on August 29, 2024. Only shareholders of record on the delisting date will be eligible for the distribution.

Positive

• Sale of FansUnite US Inc. for US$37.5 million, providing significant cash inflow
• 90% of net proceeds to be distributed to shareholders
• Estimated distribution of C$0.065 to C$0.075 per share to shareholders

Negative

• Voluntary delisting from Toronto Stock Exchange, potentially reducing liquidity for shareholders
• Sale of a major subsidiary (FansUnite US Inc.) may impact future revenue streams
• Only 50.53% of total issued and outstanding shares were represented at the shareholder meeting

Vancouver, British Columbia--(Newsfile Corp. - August 13, 2024) - FansUnite Entertainment Inc. (TSX: FANS) (OTCQB: FUNFF) ("FansUnite" or the "Company") is pleased to announce that, further to its new release dated June 27, 2024 in respect of the proposed sale (the "Sale Transaction") of all of the issued and outstanding shares of FansUnite US Inc. ("FansUS") to Hero Group Corp. (the "Purchaser"), the Company's shareholders have approved the special resolution required for completion of the Sale Transaction, the special resolution required for the Distribution (as described below) and the ordinary resolution required for the Voluntary Delisting (as described below) at the Company's special meeting of shareholders (the "Meeting") held on August 13, 2024. The total number of shares represented in person or by proxy at the Meeting was 181,685,741 representing 50.53% of the total issued and outstanding common shares (the "Common Shares") in the capital of the Company as at July 4, 2024.

Detailed voting results for the Meeting were filed under the Company's SEDAR+ profile at www.sedarplus.com on August 13, 2024.

As previously announced, the Company, FansUS, the Purchaser and GeoComply Solutions Inc. entered into a stock purchase agreement dated June 27‎, 2024 (the "Stock Purchase Agreement") pursuant to which the Company agreed to sell all of the issued and outstanding shares of FansUS, a wholly-owned subsidiary of the Company that carries on its Betting Hero business, to the Purchaser for a total purchase price of US$37.5 million, adjusted on a cash-free, debt-free basis.

Assuming that the conditions to closing are satisfied or waived, it is currently expected that the Sale Transaction will be completed on or about August 15, 2024. If the Sale Transaction is completed, the Company expects to voluntarily delist its Common Shares from the Toronto Stock Exchange (the "Voluntary Delisting") on or about August 21, 2024.

Pursuant to the terms of the Stock Purchase Agreement, the Company has agreed to distribute 90% of the net proceeds of the Sale Transaction (after payment or discharge of certain obligations and liabilities of the Company, including those associated with the Sale Transaction or otherwise) to the holders Common Shares, subject to applicable solvency and other legal or contractual requirements, as a return of capital on the Common Shares (the "Distribution") equal to approximately C$0.065 to C$0.075 per Common Share.

If the Sale Transaction is completed, the Company expects the record date for the Distribution will be at the end of business on August 26, 2024 in order to allow trades to settle following the Voluntary Delisting date and the payment date to be on or ‎about August 29, 2024. As a result, only shareholders of record on ‎the Voluntary Delisting date will be entitled to the Distribution.

Key dates for the Sale Transaction, Voluntary Delisting and Distribution are expected to be:

Closing of Sale Transaction:	August 15, 2024
Voluntary Delisting Date:	August 21, 2024
Distribution Record Date:	August 26, 2024
Distribution Payment Date:	August 29, 2024

 

The terms of the Sale Transaction, the Distribution and the Voluntary Delisting as well as the Stock Purchase Agreement are further described in the Company's management information circular dated July 5, 2024 and related materials for the Meeting, all of which are available under FansUnite's profile on SEDAR+ at www.sedarplus.com.

ABOUT FANSUNITE ENTERTAINMENT INC.

FansUnite is a global sports entertainment and gaming company. Our business is focused on the regulated and lawful sports betting affiliate market which includes customer acquisition, retention, support and reactivation. FansUnite has established itself as a leader in the North American affiliate market through its subsidiary American Affiliate. American Affiliate is a North American omni-channel customer acquisition company, covering both retail and digital customer activation for sportsbooks, casinos, poker and fantasy sports platforms.

FORWARD-LOOKING STATEMENTS

This news release contains "forward-looking information" which may include, but is not limited to, ‎information with respect to the activities, events or developments that the Company expects or anticipates ‎will or may occur in the future. Such forward-looking information is often, but not always, identified by the ‎use of words and phrases such as "plans," "expects," "is expected," "budget," "scheduled," "estimates," ‎‎"forecasts," "intends," "anticipates," or "believes" or variations (including negative variations) of such words ‎and phrases, or state that certain actions, events or results "may," "could," "would," "might" or "will" be ‎taken, occur or be achieved. Such forward-looking information includes, among other things, information ‎regarding: the Company's expectations regarding its ability to complete, and the anticipated results of, the ‎Sale Transaction, the Voluntary Delisting, the anticipated Distribution of approximately C$0.065 to C$0.075 per Common Share, and the parties' ability to satisfy closing conditions and receive ‎necessary approvals and the anticipated timing for completion of the Sale Transaction, the Voluntary Delisting and the Distribution. Various assumptions or factors are typically applied in drawing conclusions or making ‎the forecasts or projections set out in forward-looking information. Those assumptions and factors are ‎based on information currently available to the Company. Although such statements are based on‎ assumptions management considers reasonable, there can be no assurance: (i) that the Sale Transaction will be ‎completed; (ii) if the Sale Transaction is completed, that it will be completed on the terms described above; (iii) that the Company will voluntarily delist its Common Shares from the TSX; (iv) that the proposed Distribution will be made; or (v) if the proposed Distribution is made, as to the amount or terms of such Distribution.

Forward-looking information contained in this news release is based on certain factors and assumptions ‎regarding, among other things, the receipt of all necessary regulatory approvals and ‎satisfaction of other conditions to the completion of the Sale Transaction, the Voluntary Delisting, the Distribution, and other similar matters. While the ‎Company considers these assumptions to be reasonable based on information currently available to it, they ‎may prove to be incorrect. Forward looking information involves known and unknown risks, uncertainties ‎and other risk factors which may cause the actual results, performance or achievements to be materially ‎different from any future results, performance or achievements expressed or implied by the forward-looking ‎information. Such risks include risks that the Sale Transaction does not close on the anticipated timeline, or at ‎all, risks related to increased competition and current global financial conditions, access and supply risks, ‎reliance on key personnel, operational risks, regulatory risks, capitalization and liquidity risks, the occurrence of any event, change or other circumstances that could give rise to the termination of the Stock Purchase Agreement, ‎risks that a closing condition to the Sale Transaction may not be satisfied, risks relating to the potential failure to receive all requisite regulatory approvals, and potential legal proceedings relating to the proposed Sale Transaction and the outcome of any such legal proceeding. ‎Although the Company has attempted to identify important factors that could cause actual results to differ ‎materially from those contained in forward-looking information, there may be other factors that cause results ‎not to be as anticipated, estimated or intended. There can be no assurance that such information will prove ‎to be accurate, as actual results and future events could differ materially from those anticipated in such ‎statements. Accordingly, readers should not place undue reliance on forward-looking information. The ‎Company undertakes no obligation, except as otherwise required by law, to update these forward-looking ‎statements if management's beliefs, estimates or opinions, or other factors change.‎

The Sale Transaction, the Voluntary Delisting, and the Distribution cannot be completed until the required regulatory approvals are obtained. There can be no assurance that the Sale Transaction, the Voluntary Delisting and the Distribution will be completed as proposed or at all. The Sale Transaction could be modified, restructured or terminated. Investors are cautioned that, except as disclosed in the Circular and in the Stock Purchase Agreement itself, copies of each of which are or will be filed under the Company's profile at www.sedarplus.com, any information released or received with respect to the Sale Transaction, the voluntary delisting from the TSX and the Distribution may not be accurate or complete and should not be relied upon.

The TSX has not reviewed and does not accept responsibility for the adequacy or ‎accuracy of the content of this news release.‎

For further information, please contact FansUnite's Shareholder Communications Advisor:

Laurel Hill Advisory Group
North American Toll-Free: 1-877-452-7184
Calls Outside North America: 1-416-304-0211
Email: assistance@laurelhill.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/219820

FAQ

What is the sale price for FansUnite US Inc. in the FUNFF stock transaction?

FansUnite US Inc. is being sold to Hero Group Corp. for US$37.5 million, adjusted on a cash-free, debt-free basis.

When will FUNFF stock be delisted from the Toronto Stock Exchange?

FansUnite Entertainment Inc. (FUNFF) is expected to voluntarily delist from the Toronto Stock Exchange on August 21, 2024.

What is the expected distribution amount per share for FUNFF stockholders?

FansUnite (FUNFF) shareholders are expected to receive approximately C$0.065 to C$0.075 per share as a distribution from the sale proceeds.

When is the record date for the FUNFF stock distribution?

The record date for the distribution of FUNFF stock is set for August 26, 2024.

What percentage of net proceeds will be distributed to FUNFF shareholders?

FansUnite (FUNFF) will distribute 90% of the net proceeds from the sale transaction to its shareholders.