On January 18, 2024, SharpLink Gaming Ltd. sold its SportsHub/fantasy sports and free-to-play sports game development business units to RSports Interactive, Inc. ("RSports") for $22.5 million in an all-cash transaction. The sale of all issued and outstanding shares of common stock or membership interests, as applicable, was also announced today. Almost every employee from these purchased business divisions will join RSports for a smooth transition. According to fantasy sports news reports, SharpLink also disclosed that it used about $ 14.9 million of the sale proceeds to pay off all outstanding term loans and lines of credit with its lender. Additionally, about $4.5 million was used to redeem an 8 percent interest, 10 percent original issue discount senior convertible debenture issued to an existing shareholder in connection with a securities purchase agreement signed in February 2023. Consequently, the business does not have any debt that accrues interest anymore. Later today, SharpLink will submit a Current Report on Form 8-K with the U.S. Securities and Exchange Commission. In that report, the following considerations will be discussed in additional depth. SharpLink Fantasy Sports CompanyAfter the sale is finalized, SharpLink plans to cut operating expenses. This will be achieved through a combination of factors, including a reduction in headcount, lower office lease costs, reduced state licensing requirements, elimination of interest-bearing debt service, and other cost savings. As a result, the company will be in a better position to quickly generate positive cash flow from its remaining performance marketing business. With the proceeds from the sale, the company may pay off its almost $19.4 million in interest-bearing debt and improve its working capital and total shareholders' equity. This will allow the company to develop without relying on dilutive equity financings. With the increase in the company's total shareholders' equity, SharpLink should be able to meet Nasdaq's ongoing listing standards again. Do you want to make smarter NFL bets? We recommend reading tutorials and guides to improve your profitability in the long run.
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September 2021
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