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Well-known provider of online gaming conversion solutions SharpLink Gaming has agreed to sell RSports its business divisions for creating free-to-play and fantasy sports games for a total of $22.5 million in cash. According to the terms of the deal, which was signed on January 18, RSports will get all issued and existing shares of common stock or membership interests.
“Nearly all” of the employees from the acquired business units will move to RSports as part of the agreement to guarantee a smooth transition of operations. Maintaining operational continuity and taking use of the present workforce’s expertise in the acquired sectors are the two main objectives of the migration.
Of the profits, SharpLink has allotted around $14.9 million to pay back its lender for outstanding term loans and credit lines. Redeeming an 8% Interest, 10% Original Issue Discount Senior Convertible Debenture offered to an existing shareholder will cost an extra $4.5 million. SharpLink is positioned to operate debt-free and eliminate interest-bearing debt thanks to its intelligent use of money.
The Board of Directors of SharpLink deliberated over several matters before to approving the transaction, as will be explained in a forthcoming Current Report on Form 8-K that will be filed with the US Securities and Exchange Commission. Important considerations include much lower operating expenses, a stronger working cash position, increased shareholder ownership, and the ability to create positive cash flow from the remaining performance marketing firm.
Rob Phythian, SharpLink’s Chief Executive Officer, commented on the sale, stating, “This sale represents a pivotal milestone for SharpLink, allowing us to unlock significant value in our fantasy sports and game development businesses.” Phythian emphasized the strategic focus on the remaining sports betting and iGaming performance marketing business, envisioning a more streamlined and innovative approach.
In line with the deal, Chris Nicholas, a director and the company’s chief operational officer, has resigned with immediate effect. This choice is consistent with the company’s objective to strategically realign and transform into a pure-play, performance marketing enterprise in the global markets for iGaming and sports betting.
Thanks to the acquisition, SharpLink is now in a stronger position to continue long-term shareholder value development, adhere to Nasdaq requirements, and have solid financial standing.