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Elys Game Technology to Acquire U.S. Bookmaking

NEW YORK–() – Elys Game Technology, Corp. (“Elys” or the “Company”) (Nasdaq: ELYS) (NEO | ELYS), an interactive gaming and sports betting technology company, today announced a definitive purchase agreement to acquire 100% of Bookmakers Company US LLC, a corporation Nevada limited liability company operating as US Bookmaking (“USB”).

Founded in 2016, USB is a provider of sports betting services such as design and advice, turnkey sports betting solutions and risk management. USB’s management team includes legendary sports betting company Victor Salerno, President, with over 40 years of experience in the Nevada sports betting business, who manages risk on over 100 properties and was inducted into the American Gaming Association’s Gaming Hall of Fame and the Hall of SBC in 2015 became fame in 2020; Bob Kocienski, CEO, with over 40 years of experience in the gambling industry including overseeing sports betting at several high profile casinos; Robert Walker, Director of Bookmaking, with over 30 years of experience managing sports betting at multiple casinos including Stardust, Mirage and MGM; and John Salerno, Director of Operations and Compliance with over 20 years of experience in the sports betting industry under the guidance of his father, Victor Salerno.

Following the repeal of the Professional and Amateur Sports Protection Act in 2018, USB began providing services to the Santa Ana Star Casino in Albuquerque, New Mexico, and expanded its presence in New Mexico with service agreements at the Isleta Resort & Casino and Santa Claran Hotel & Casino . USB then expanded into Colorado on the Sky Ute property, followed by agreements with the Odawa Tribe in Michigan and the 4 Bears Tribe in North Dakota. In 2021, USB signed a service contract in Washington DC with an expected opening for sports betting in the second half of 2021. USB also landed its first B2C agreement by renting a skin for interactive stores in Iowa.

The structure of the deal is that Elys will acquire 100% of USB and USB will be a wholly owned subsidiary of USB, subject to final closing shipments expected by July 15, 2021 or as soon as possible thereafter (the “Closing Date”). becomes Elys (the “Proposed Transaction”). Under the terms of the Membership Share Purchase Agreement, Elys will pay $ 12 million on the closing date, of which 50% will be paid in cash and 50% will be paid in Elys common stock at a price equal to the volume weighted average price of. equates to Elys shares for the 90 trading days prior to the closing date, subject to shareholder approval, if the number of shares exceeds 4,401,020. In addition, USB members have the option to earn up to $ 38 million plus a potential 10% (or $ 3.8 million) reward (the “Earnout “), Payable 50% in cash and 50% in shares at a price equal to the volume weighted average price of Elys common shares for the 90 trading days prior to January 1 of each year during the earnout period, subject to the approval described above of shareholders and an upper limit on the number of shares to be issued of no more than 5,065,000. Any excess that is not approved by shareholders or that exceeds the cap will be paid out in cash. Annual earnout payments are based on the achievement of certain Adjusted Cumulative EBITDA milestones that range from $ (213,850) for 2021 to $ 19,441,483 for 2025.

“We started US Bookmaking with the vision of building a first-class team of experienced bookmakers in view of the impending lifting of the sports betting ban in the USA. Our team and customer network has been building up rapidly since 2018 and we are very optimistic about the expansion and growth opportunities in the US sports betting market. We realized that we needed a viable technology partner who knew the sports betting business very well in order to effectively compete and grow with this opportunity. After visiting the Elys retail floor in Italy, we are very impressed with the work the Elys team is doing to Americanize their sports betting technology. We believe the timing of this acquisition is ideal for USB as we have reviewed the tech space for the best in sports betting technology while preparing to reopen our customers as the COVID pandemic wears off. The addition of a proprietary sports betting platform will allow USB to customize the features our customers want while maintaining full control over our cost structure, ”said Vic Salerno, President and Founder of USB. “We look forward to working with the ELYS team to close the transaction as soon as possible.”

“Our team at Elys has worked hard to prepare our top platform for the booming opportunities in the US market. Our focus was to ensure that our future US customers had access to a design-built solution for sports betting in the US, supported on-site with extensive trading, risk management, operations and maintenance teams for smooth operations. We are very pleased with the relationship we have established during our negotiations with the founders and the very experienced team at USB, and the extensive synergies that we believe the merged entities will have. We found great similarities between the family culture that Elys cultivates in its Italian operations, such as USB, and its operations, which span a number of US states. Presence in the US and potential development of operations in the evolving Canadian sports betting market ” said Michele Ciavarella, Executive Chairman of Elys Game Technology. “The agreement with USB offers our shareholders a convincing growth opportunity through the combination of our leading betting technology and USB’s many years of bookmaking expertise.”

Proposed transaction structure:

The proposed transaction is structured as a membership purchase agreement with Elys acquiring 100% of USB and USB becoming a wholly owned subsidiary of Elys. USB sellers will receive $ 12 million, 50% cash, 50% Elys common stock and an earnout of up to $ 41.8 million, 50% cash and 50% Elys, as of the reporting date. Common shares, subject to the requirements and limit described above, subject to the approval of shareholders. Completion of the proposed transaction is subject to the satisfactory completion of due diligence and, if necessary, the approval of Elys and Nasdaq shareholders. The boards of directors of the parties have unanimously approved the purchase agreement of the membership shares and the proposed transaction on a preliminary basis, with the completion of the closing being subject, among other things, to a satisfactory fairness opinion and due diligence. No assurance can be given that the proposed transaction will take place.

About Elys Game Technology, Corp.

Elys Game Technology, Corp. is a global B2B gaming technology company operating in multiple countries around the world and operating B2C online and land based gaming operations in Italy. In Italy, Elys offers its customers a full range of recreational gaming products and services such as sports betting, esports, virtual sports, online casino, poker, bingo, interactive games and slot machines.

The company’s innovative betting solution serves online operators, casinos, retail betting companies and franchise distribution networks. For more information, please visit our company website at www.elysgame.com.

Investors can also find us on Twitter @ELYS_gaming.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are identified by the use of the words “may,” “believe,” “anticipate,” “intend,” “estimate” , “Expect,” “may,” “continue,” “predict,” “potentially,” “project” and similar expressions that are intended to identify forward-looking statements and include statements regarding the completion of the proposed transaction include until July 15, 2021 or as soon as possible thereafter, the extensive synergies of the merged entities and Elys gameboard technology give USB the tools it needs to quickly expand and develop its current US presence. These forward-looking statements are based on management’s expectations and assumptions as of the date of this press release and are subject to a number of risks and uncertainties, many of which are difficult to predict, which could cause actual results to differ materially from current expectations and assumptions of those set out or implied in forward-looking statements. Important factors that could cause actual results to differ materially from current expectations include, but are not limited to, the company’s ability to complete the proposed transaction as planned, the company’s ability to utilize the synergies of the combined entities, the ability of the Company to assist USB in its rapid expansion its current presence in the United States, the company’s ability to execute its growth strategy and vision, the duration and extent of the global COVID-19 outbreak, including the impact on the state and local economies , and those in the company’s annual report on form. 10-K for the year ended December 31, 2020 and its subsequent SEC filings, including subsequent periodic reports on Form 10-Q and current reports on Form 8-K. The information in this press release is provided only as of the date of this press release and the company assumes no obligation to update or publicly revise any forward-looking statements, whether as a result of new information, future events or otherwise, after the date such statements are made or reflect the occurrence of unforeseen events, unless required by law.