Adventure Box enters into final agreement to acquire Lion Gaming Group Inc.

STRATEGIC RATIONALE AND SYNERGIES

Lion is a leading provider of technology platform solutions for the iGaming sector, specializing in white-label turnkey casino and sportsbook platforms. The company is known for its innovative solutions and solid customer base in the global iGaming market. For 2024, Lion has a projected turnover of approximately MSEK 350 (MUSD 33) and an EBITDA of approximately MSEK 180 (MUSD 17).

"The acquisition allows us to capitalize on synergies and expand our global footprint. It equips us with the resources and backing necessary to position ourselves as a leader in iGaming technology," said Duncan McIntyre, CEO of Lion Gaming Group Inc.

The acquisition of Lion will strengthen Adventure Box's technological capabilities, enhance revenue streams, and enable it to better compete in the iGaming industry while bringing together two complementary businesses to enable operational efficiencies, including:

• Expanded Technological Resources: Adventure Box will gain access to all of Lion's technology, intellectual property, and platforms, enhancing its iGaming offerings.
  
  
• Improved Financial Stability: The acquisition will contribute to a stronger financial foundation for Adventure Box due to Lion's existing revenues and operational synergies.

"With the acquisition of Lion Gaming Group, we are building a significant new force in the iGaming market, as we anticipate strong synergies between the technological resources and improved financial stability. This acquisition sets the stage for creating a global leader," said Mads Jørgensen, Chairman of the Board of Adventure Box Technologies AB.

STRATEGIC BENEFITS AND FUTURE GROWTH POTENTIAL

The acquisition of Lion represents a significant strategic advancement for Adventure Box, delivering both technological and operational benefits. By acquiring a leading iGaming technology platform provider, Adventure Box gains access to Lion's cutting-edge casino and sportsbook platforms, expanding its product offerings and positioning the company for global growth. This move strengthens the combined company's overall capacity, leveraging existing revenues to enhance operational performance. The integration of both companies will generate cost synergies, resulting in greater efficiency and optimized resource usage. Additionally, new cross-selling opportunities, product development, and market expansion will drive further growth and competitiveness. The acquisition enhances Adventure Box's ability to lead in the iGaming market by creating a stronger competitive advantage. The operational plan includes clear steps for addressing convertible and warrant holder agreements to mitigate risks, ensuring the smooth execution of the acquisition. By reinforcing Adventure Box's capital structure and market presence, the transaction aims to support long-term value creation and business growth.

SALE AND PURCHASE

Under the terms of the SPA, Adventure Box will acquire all shares of Lion from its current shareholders. Shareholders owning approximately 98 % of all shares in Lion have entered into the SPA. One of the closing conditions of the Transactions, as described below, is that the remaining shareholders shall accede to the SPA. In return, the sellers will receive 1,166,272,194 newly issued Adventure Box shares (the "Consideration Shares").

PURCHASE PRICE

The acquisition will be settled through the issuance of Consideration Shares valued at SEK 0.40 per share.

FINANCIAL DETAILS OF THE ACQUISITION

• Purchase Price: The purchase price will be paid through the issuance of new Consideration Shares at a valuation of SEK 0.40 per share.
• Share Capital: Following the acquisition, the total number of shares in Adventure Box will increase to 1,229,180,950, with an updated share capital of SEK 122,918,095.
• Lock-Up Periods: The sellers of Lion have agreed to a lock-up, whereby approximately (i) 82% of the Consideration Shares are locked up during a period of twelve monthsfrom closing, after which 10% of such Consideration Shares may be divested each month, (ii) 2% of the Consideration Shares are locked up during a period of three months from closing, after which 16.67% of such Consideration Shares may be divested each month, and (iii) 16% of the Consideration Shares may be divested by 16.67% each month from closing. The sellers shall not sell or otherwise transfer the newly issued shares outside such thresholds, except in certain conditions, such as a general offer for all shares in Adventure Box under the Takeover Rules, or with prior written consent from Adventure Box.
• Ownership Structure: Post-acquisition, Lion's shareholders will own approximately 94.88% of Adventure Box.
• Convertibles: Lion has outstanding convertible notes to around 15 convertible holders amounting to a total nominal amount of approximately USD 8.8 million ("Convertibles"). The Convertibles may be, at the holder's own discretion, converted into shares in Lion. If the Convertibles are not converted, the nominal amount of the Convertibles shall be paid back to the holders. For three of the Convertibles, amounting to a nominal amount of approximately USD 4.1 million, the maturity date has passed and for one of the Convertibles, amounting to a nominal amount of approximately USD 4.3 million, the maturity date is on 30 October 2024. Lion is currently negotiating an extension of the maturity date of six months for these Convertibles. The remaining Convertibles are due for payment either on 30 December 2024 or 30 December 2025. Adventure Box and Lion plans to negotiate with the convertible holders for the conversion of the Convertibles into equity, aligning with its strategy to strengthen the capital structure. In parallel, Adventure Box will initiate preparations for a capital raise to finance the newly formed group and support future acquisitions. This step is designed to secure the necessary capital to integrate Lion and ensure the continued growth and stability of the combined entity.
• Warrants: Lion has outstanding warrants ("Warrants") to four warrant holders. In accordance with the relevant closing condition, as described below, Adventure Box and Lion plans to negotiate with the warrant holders in regard to exchange of the warrants in Lion to warrants in Adventure Box. The terms for such exchange aresubject to the negotiations with the warrant holders.

CONDITIONS FOR CLOSING

The Transaction is conditional on fulfilment of customary closing conditions as well as the below conditions:

• Convertible holders: The Convertibles shall have been either (1) repaid and settled in full (without Lion incurring additional debt), (2) converted into shares in Lion, entailing that the convertible holders will become part of the SPA and will receive shares in Adventure Box as part of the Transaction, or (3) the Convertibles have been amended to not include any right of conversion into shares or other similar instrumentand shall therefore be paid back on the maturity date.
• Warrant holders: All warrant holders shall have agreed to exchange their respective Warrants to warrants to be issued by Adventure Box, subject to approval by an Extraordinary General Meeting in Adventure Box.
• Additional shareholders: The shareholders of Lion that have not yet entered into the SPA shall have acceded to the SPA, to ensure that Adventure Box will acquire 100 % of Lion.
• EGM: Approval of the issuance of the Consideration Shares to the sellers and amendment of the articles of association by an Extraordinary General Meeting. This will also require that the auditor of Adventure Box confirms that the value of Lion has not been ascribed a higher value than the fair value, which is needed for the auditor's statement regarding the value of the assets to be contributed in kind to be provided to the EGM.

The conditions for closing shall be either fulfilled or waived within the next three months.

TIME PLAN FOR THE ACQUISITION

The Transaction is conditional on fulfilment of the conditions for closing as described above. Adventure Box will summon an Extraordinary General Meeting in regard to approval of issuance of the Considerations Shares and amendment of the articles of association as soon as practically possible considering the fulfilment of certain conditions for closing. In accordance with the terms of the SPA, the conditions for closing shall be fulfilled within the next three months. Adventure Box will provide a detailed time plan related to the Extraordinary General Meeting and the issuance of the Considerations Shares in connection with summoning the Extraordinary General Meeting.

This information is such that Adventure Box Technology AB (publ) is required to disclose in accordance with the EU Market Abuse Regulation. Information was provided through the below contact persons' publication for publication on 1 Oct 2024 at 8:32 CET.