Business
FansUnite Secures Senior Debt to Restructure Earn-Out Obligations
FansUnite Secures Senior Debt to Restructure Earn-Out Obligations.
About this update from Fansunite Entertainment Inc.
[{"type":"text","content":"Vancouver, British Columbia--(Newsfile Corp. - September 19, 2022) - FansUnite Entertainment Inc. (TSX: FANS) (OTCQX: FUNFF) (\"FansUnite\" or the \"Company\") is pleased to announce that it has entered into a definitive agreement with Centurion Financial Trust, an investment trust formed by Centurion Asset Management Inc., one of Canada's leading asset management companies specializing in real estate and other alternative asset classes, in respect of a senior term loan up to C$12,350,000. The purposes of the loan are for restructuring of earn-out obligations owed to a number of individuals under the definitive agreement dated November 22, 2021 (the \"Prior Agreement\"). The Company will initially draw on C$8,233,000.Pursuant to the restructuring, the payments will constitute of ‎US$4,775,000 (C$6,303,000) upfront (cash and loan forgiveness) and US$550,000 (C$726,000) contingent on certain future events, resulting in an estimated reduction in contingent liabilities of the Company of over C$43.0M. ObligationPreviousRestructured toEarn-out Multiple on EBITDA*2.75x1.00xContingent LiabilityC$78.4m** C$35.0m*** *the Prior Agreement provided for earn-out payments calculated according to EBITDA targets with minimum margin guarantees each fiscal quarter for the three year period following closing**as reported on June 30, 2022 Financial Statements***based on current estimates, this will be reported on September 30, 2022 quarterly financial statements\"With current market conditions and share price, we made it a priority to restructure the earn-out terms of the American Affiliate acquisition as it was in the best interest of all parties and our shareholders,\" said Scott Burton, CEO of FansUnite. \"We secured senior debt with a great partner to allow us to significantly reduce the contingent liability associated with the acquisition, resulting in substantially less future dilution for our shareholders.\"Burton continued, \"As part of the restructure, we will keep more cash in the Company moving forward. We also maintain a strong balance sheet and will not need to raise equity capital at this time. We continue to be ahead of internal revenue projections and are excited for the NFL season and American sports to restart as these sports correlate with our largest revenue months. Further, the Company has already cut approximately C$...