Rivalry Corp. (the “Company” or “Rivalry”) (TSXV: RVLY) (OTCQX: RVLCF) (FSE: 9VK), the leading sportsbook and iGaming operator for Millennials and Gen Z, today announced a non-brokered private placement offering of convertible debentures (“Convertible Debentures“), and the closing of the first tranche of such offering for aggregate gross proceeds of $14,000,000. The investment comprising this initial closing came from an existing institutional shareholder. All dollar figures are quoted in Canadian dollars.

Under the Offering, each Convertible Debenture will consist of $1,000 principal amount of 10% senior secured convertible debentures of the Company, maturing on November 14, 2027 (the “Maturity Date“). The outstanding principal under the Convertible Debentures will be convertible at the option of the holder, at any time prior to the close of business on the last business day immediately preceding the Maturity Date, into subordinate voting shares in the capital of the Company (“Subordinate Voting Shares“) at the conversion price of $1.40 per Subordinate Voting Share (the “Conversion Price“).

“We are very pleased to receive the support of a long-standing institutional shareholder of Rivalry with this investment,” said Steven Salz, Co-founder and CEO, Rivalry. “Rivalry’s unique product mix and position in the marketplace has brought the business to the inflection point it’s reached today. We’re deeply confident in the underlying trends the business is showing and maintain our expectation to achieve profitability in H1 2024.”

“Strengthening our balance sheet positions the company to maximize the opportunity in front of us. The capital will enable Rivalry to accelerate the development and release of new products, expand marketing efforts, and extend into new geographies and verticals, setting us on a path where we can pursue growth and profitability at the same time,” Salz added.

Terms of the Offering
The Convertible Debentures will bear interest from the date of issue at 10.0% per annum, and will be payable in cash quarterly in arrears on March 30, June 30 September 30 and December 30 of each year (each, an “Interest Payment Date”) commencing December 31, 2025 and will consist of interest accrued from and including the date of issue to the initial Interest Payment Date. Additional tranches of the non-brokered private placement offering may close for aggregate gross proceeds of up to $27,500,000 (inclusive of the initial closing) (the “Offering“).

The Convertible Debentures will be senior secured obligations of the Company, subject to certain exceptions, and will be secured by all of the assets and property of the Company, subject to certain permitted encumbrances, pursuant to a general security agreement, and guaranteed by the Company’s wholly-owned material subsidiaries, and such guarantee shall be secured by a security agreement executed by such subsidiaries granting a first priority security interest on all of their present and after acquired personal property.

The net proceeds received by the Company are expected to be used to fund general working capital and corporate purposes.

The Convertible Debentures shall be offered and sold (i) to investors in Canada on a private placement basis; (ii) to institutional accredited investors in the United States pursuant to available private placement exemptions; (iii) to investors residing in jurisdictions outside of Canada and the United States, in each case in accordance with all applicable laws; provided that no prospectus, registration statement or similar document is required to be filed in such foreign jurisdiction.

All securities issued in connection with the Offering will be subject to a hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation.

The securities issuable in connection with the Offering have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act“) or any U.S. state securities laws and may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referenced in this press release, in any jurisdiction in which such offer, solicitation or sale would be unlawful.