LVFH TO SUPPLY ONLINE GAMES TO CHINESE

18 January 2008

Asian multi-player software developed


The Toronto and Frankfurt listed online gambling software company Las Vegas From Home has signed a licensing arrangement to supply an Asian multi-player software platform to CY Foundation, a company which claims it has a license to operate online games in China.

The deal calls for the product to be delivered through an unamed but controlled entity in the People's Republic of China, apparently licensed by the Ministry of Culture to operate online games and tournaments across the country.

LVFH President and CEO, Jake Kalpakian commented, "This is a tremendous opportunity for the company. This relationship allows us to be a recognized supplier in arguably the world's most sought after market, all through a strong and solid organization such as CYF Group which has the licensing approvals from the government to operate tournament style games online as well as having a very impressive distribution network."

In terms of the agreement, CYF Group will pay LVFH a standard but unspecified licensing royalty. LVFH has also entered into a definitive agreement to pay CYF Cdn$ 850 000 in order for CYF Group to exclusively use LVFH software to operate both the popular "Fight the Landlord" ("Dou Di Zhu") and "13 Card Poker" ("Shi San Zhang") online games in the Henan Province and in the city of Beijing including its suburbs.

CYF Group will pay royalty payments to LVFH the greater of either 10 percent of all tournament fees collected by CYF Group less the tournament prizes paid to the players or 1 percent of all tournament collection fees collected by CYF Group without any deductions for prizes paid to the players.

Kalpakian says: "The purchase of the Exclusivity Rights for certain games in the Designated Territory not only solidifies our long term operating position in the PRC, but also has tremendous potential when you factor in the populations of Henan Province and Beijing, approximately 93.7 million and 15.3 million respectively, according to the National Bureau of Statistics of China."

LVFH plans to raise capital through a complicated share arrangement with Special Opportunity Limited, an investment holding company and Touchdown Capital Inc., a capital pool company. TD will also receive an undivided interest in the Asian Multi-player Software Platform and the software licensing agreement between LVFH and CYF Group for a significant tranche of shares representing 26.5 percent of TD. Finally, a Hong Kong based investor group will invest Cdn$ 9.7 million of a proposed $10 million financing in TD, making significant funds available for marketing.

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