i3 Provides Corporate Update

By | December 3, 2021

 

i3 Interactive Inc. – is pleased to provide a corporate update to its patient shareholders.

i3’s strategy remains as it was when the company was formed: assemble an experienced management team to build an online gaming presence globally. Since inception the Company has had several key developments towards this goal. Starting with key markets of focus in the United States, Canada, and India, the Company has made progress that will continue to drive growth in these markets and serve as a springboard into additional markets as the foundation continues to set. These initial markets were chosen based on current opportunity, future potential, regulatory posture and relevant management experience. i3 has put together an executive team with over 100 years of online gaming experience, launching and operating companies and brands in these specific markets, among others, and have subsequently assembled operations teams with commensurate experience.

With this strategy in mind, i3 in the first instance built out a plan to move into one of the fastest growing online gaming markets in the world in India with a vision to create a destination for the growing number of online gamers looking for entertainment in the skill based online gaming category. The market is still in its early stages yet has already seen several unicorns with the likes of Dream111 and Mobile Premier League2 (MPL) as recent examples, along with other material transactions such as the 50.06% investment by Flutter Entertainment in Junglee Rummy for US$66MM.3 i3 has executed against its strategy by investing in fantasy sports, poker, rummy, and other skill-based games showing unprecedented growth in India. The objective being to create an ecosystem of players engaged in online skill-based gaming entertainment and providing them with a second to none experience across a multitude of gaming products. These investments include:

  • BLITZPOKER – which has seen a 51% year-on-year growth in gross gaming revenue4 and 205,000 new players within the last 12 months.
  • BLITZPOOLS – which has exceeded 4,000,000 players, which helps reduce the cost of acquisition per player based on cross selling to BLITZPOKER and other more profitable products offered by i3.

As an extension of this strategy, on April 20, 2021, the Company announced the signing of a binding LOI to acquire a leading gaming company in India (the “Target”). On May 14, 2021, the Company completed the initial funding commitment of US$5,000,000. Since then, the Company had been working diligently with the Target executive on an acquisition structure with a satisfactory valuation factoring in the Target’s rapid growth and ultimately agreed i3 would for the time being remain a shareholder in the Target while further discussions continue. Upon conversion of the initial funding into equity of the Target, i3 will own approximately 4.9% of the Target. This initial funding was used by the Target for marketing and branding, specifically in their fantasy, poker, rummy and skill-based games. The Company has informed the Canadian Securities Exchange (the “CSE”) that the acquisition of the Target as previously presented has been terminated and is the midst of finalizing its annual information form, which will allow the trading halt to be lifted in the coming days.

In parallel to the investment in the Target, i3 had already been aggressively growing its own ecosystem of online gamers by way of its majority acquisition of what is now BLITZPOKER, one of the fastest growing online poker companies in India. i3 also acquired a stake in the rapidly growing fantasy sports market by way of its investment in what is now BLITZPOOLS. i3 will provide further updates on both of these businesses in the coming weeks.

Further and in keeping with its strategy to build a loyal player base and provide value across a multitude of products, i3 has entered into an LOI to acquire 100% of one of the top gaming brands in India. Further details of this LOI will be provided in subsequent releases once the Company has completed its due diligence of the target. The Company is excited to move forward with this opportunity as it fits squarely within i3’s strategy of building its online ecosystem, which gamers will enjoy and benefit from, as the rewards and service will reflect the loyalty i3 will continue to provide to its customers.

North America

On March 16, 2021, the Company announced its strategy to enter the US market. i3 and its JV partner, being a large US-facing commercial partner, are able to offer online gambling expertise, including management of online operations, official data feeds, marketing services, trading solutions and a sportsbetting platform. i3 and its JV partner offer land-based casinos a turnkey solution, using the casinos’ existing licenses to offer market access and a local brand, to offer online gaming to their existing customer base. i3 and its JV partner continue to identify potential clients for their services in the North American gambling market in line with its North America strategy. i3 and its JV partner have identified several potential clients that are at various stages of discussions and negotiations with these potential partners. As more new US States legalize and regulate sports betting and iGaming, i3 will seek further opportunities in these jurisdictions.

The Canadian market is one i3 has long been and remains excited about, having already launched a product in market. With recent developments in regulation, starting with the province of Ontario but likely leading to other provinces following suit, i3 has decided to remove its Canadian offering and is actively going through a licensing evaluation process.

Litigation Updates

Dan Bilzerian and Blitz NV, LLC have commenced actions against the Company, in Canada for breach of contract, and in the United States for trademark infringement. The actions arise from a dispute between the Company and Mr. Bilzerian relating to the lack of services provided by Mr. Bilzerian after he received compensation. Mr. Bilzerian asserted that a rogue employee, who did not have authority, entered into various Bilzerian Agreements (as defined in the Company’s Listing Statement dated June 29, 2020, a copy of which and copies of the Bilzerian Agreements are available on SEDAR). Despite initially denying the validity of the Bilzerian Agreements, and refusing to fulfil his obligations thereunder, in an about-face, Mr. Bilzerian brought a claim asserting i3 breached the Bilzerian Agreements. As such, the Company believes the subject matter of these claims to be without merit and intends to defend and counterclaim in Canada and intends to the proceed in a similar fashion in the United States.

In addition, Christopher Neville, commenced an action against the Company claiming wrongful dismissal and punitive damages. The Company believes the subject matter of the claim to be without merit and has brought a separate Claim against Mr. Neville for misappropriation of Company funds, breach of fiduciary duty and defamation.

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