International edition
September 20, 2020

It also made an equity investment

Station Casinos signed a significant agreement with DEQ Systems

(US).- DEQ Systems announced last week that it has entered into a five year patent licensing agreement and joint research and development agreement with Station Casinos, that is valued at more than us$ 2.6 million.

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oncurrently with entering into the agreement, Station completed a private equity placement in DEQ. It includes a one-time patent licensing fee and annual royalty payments over five years that total approximately us$ 2.6 million.

The agreement also calls for DEQ and Station to expend additional financial and human resources to jointly develop and obtain regulatory approval of certain new technology. It also includes an option for Station to extend the term for an additional five years, which would provide DEQ with additional royalty payments.

Bill Warner, Chief Operating Officer of Station Casinos, stated “We are looking forward to working with DEQ to leverage its patent portfolio in developing table game bonusing concepts which will provide additional gaming entertainment value to our customers.” Then he added: “We like DEQ's vision for gaming entertainment, its intellectual property, and its approach. We feel that it's a very good strategic fit for our company.”

Earle G. Hall, President and CEO of DEQ stated: “Station Casinos has a proven business model in one of the most competitive casino markets in the World, the Las Vegas locals' gaming market. To attract, entertain and retain its customers, Station has excelled in offering value to very discriminating customers. DEQ is pleased to have been chosen as Station Casinos' leading provider of side betting and table games bonusing technologies for table games.”

Station's equity investment, as well as the first annual royalty payment, has been made upon the signature of the agreement and closing of the placement, while the one-time licensing fee will be paid upon receipt of all necessary Nevada gaming regulatory approvals for DEQ's G3 table games bonusing system.

As part of this strategic alliance, DEQ has completed a private equity placement by Station for 900,000 units of the company, at a subscription price of us$ 0.58 per unit, for an aggregate amount of us$ 524,000. Each unit consists of one common share of the company and one common share purchase warrant.

Each warrant entitles Station to purchase one common share at an exercise price of us$ 0.76 prior to the first anniversary of the closing date of the private equity placement; us$ 0.89 between the first and second anniversary dates; us$ 1.12 between the second and third anniversary dates; us$ 1.20 between the third and fourth anniversary dates; and us$ 1.25 between the fourth and fifth anniversary dates.

The securities issued within the scope of this private placement are subject to a four-month hold period. Canaccord Adams, acting as the financial advisor to DEQ in this strategic transaction, will receive a us$ 44,800 fee.

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