DraftKings : JackPocket - IRS Form 8937 Report Actions Affecting Basis

DocuSign Envelope ID: BE75F4D2-3C26-480C-ABDC-9CA7340184D2

DocuSign Envelope ID: BE75F4D2-3C26-480C-ABDC-9CA7340184D2

6/18/2024 | 14:53 PDT

DocuSign Envelope ID: BE75F4D2-3C26-480C-ABDC-9CA7340184D2

DraftKings Inc.

EIN: 87-2764212

Attachment to Form 8937

Form 8937, Part II, Box 14

Describe the organizational action and, if applicable, the date of the action or the date against which shareholders' ownership is measured for the action.

On May 22, 2024, DraftKings Inc. ("DraftKings") issued 7,507,817 shares of its Class A Common Stock (the "DraftKings Common Stock"), in connection with the consummation of the transactions contemplated by the Agreement and Plan of Merger and Plan of Reorganization, dated as of February 11, 2024, pursuant to which DraftKings, through its direct wholly owned subsidiary, DraftKings Holdings Inc. ("DK HoldCo"), acquired all of the issued and outstanding shares of capital stock of JackPocket Inc. ("JackPocket") through a merger of Fortune Merger Sub Inc., a wholly owned subsidiary of DK HoldCo ("Merger Sub I"), with and into JackPocket (the "Initial Merger") with JackPocket continuing as the surviving corporation and a wholly owned subsidiary of DK HoldCo and, promptly following the Initial Merger, a merger of JackPocket with and into Fortune Merger Sub LLC, a wholly owned subsidiary of DK HoldCo ("Merger Sub II"), with Merger Sub II continuing as the surviving company (such merger, the "Subsequent Merger," and together with the Initial Merger, the "Transactions"). As a result of the Transactions, (x) each outstanding share of JackPocket's common and preferred stock held by accredited investors was converted into (i) approximately 0.052 shares of DraftKings Common Stock, with a cash payment in lieu of fractional shares, plus (ii) approximately $2.85 in cash, less any applicable withholding tax, and (y) each outstanding share of JackPocket's common and preferred stock held by non-accredited investors was converted into approximately $5.09 in cash, less any applicable withholding tax. The expected tax treatment of the Transactions is a tax-free reorganization under Section 368(a)(2)(D) of the Internal Revenue Code of 1986.

Immediately after the Transactions, DraftKings stockholders continued to own their existing shares of DraftKings common stock, the form of which was not changed by the Transactions.