FansUnite Entertainment Inc (CSE:FANS) (OTCPINK:FUNFF), an online gaming company, announced Monday that it sold its interest in an assigned debt of C$833,730 to Victory Square Technologies Inc (CSE:VST) (OTC:VSQT).
The move will pay FansUnite C$658,212 and reduce its own long term debt to Victory Square down to C$40,000, the company said.
The company came to possess the interest in the assigned debt because of a game financing agreement between V2 Games and Just Games Interactive Entertainment LLC, doing business as Kung Fu Factory, in February 2019. FansUnite acquired the debt through an interest purchase agreement with V2 Games in December.
Essentially, FansUnite has assigned the debt to Victory Square, satisfying the $658,212 the company owed itself to Victory Square and certain affiliates. When it is all said and done, FansUnite‘s long-term debt will be reduced from $698,212 to $40,000.
FansUnite also has the right to repurchase and cancel a portion of its common shares that were issued to V2 Games, which it plans to do. The company said it will buy 501,484 common shares back from V2 Games at $0.00001 per share, which represents the difference in value between the assigned Debt and the set-off debt.
“Strengthening our balance sheet has always been a financial goal for us and we are delighted to see that we have cleared out our debt,” FansUnite CEO Scott Burton said in a statement. “We are also grateful to have Victory Square support this deal as this highlights our strong relationship with a key shareholder of this company. This transaction substantially reduces our debt and allows us to now focus our financial resources on expanding our business operations and growing our company.”
Additionally, the company announced that it has granted a total of 825,000 incentive stock options to directors and/or officers under its stock options plan. The options are exercisable at C$0.25 per share, expire on September 27, 2030, and will vest quarterly over a three-year period.
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