Flashback: FansUnite (FANS.C) closes upsized $24.7 million growth capital financing

Originally posted July 16, 2021

FansUnite Entertainment (FANS.C) announced the closing of their public offering, which raised gross proceeds of $24,792,390.

FANS issued 27,547,100 units for the offering, which they sold at $0.90 a piece. Each unit consisted of one share and one-half of a common share warrant. Every full warrant allows its holder to buy one FANS share for $1.30 and is exercisable for 36 months.

FansUnite had originally planned to raise $10 million but decided to upsize the placement to $21.7 million after receiving strong demand for the units.

The final figure, a whopping $24,792,390, was met after a partial exercise of the over-allotment option by the Co-Lead Agents.

“We are pleased to see continued demand from new and existing investors that believe in our vision of becoming a global gaming company,” said Scott Burton, CEO of FansUnite. “With this additional growth capital, we are in the best financial position to date as a company. Since going public in May 2020 we have remained committed in growing our three lines of business while expanding our international footprint to showcase our gaming assets to a growing base of customers. As more jurisdictions around the globe focus on legalizing all forms of betting, we are in a favourable position to have a treasury that can accelerate our expansion plans while being a leader in the international regulated gaming market.”

The $24.7 million did not come cheap, however. Because the offering price was well below the trading price at the time of the announcement, shares fell from $1.23 to $1.03 following the announcement of the upsizing. It has continued to slide since then, although it is still trading above where it was before its uptick in June. There is obviously still confidence in the stock though, otherwise the over-allotment option would not have been exercised.

FansUnite has said they plan on using the funds for:

potential future acquisitions
developing additional innovative games under the Askott Games brand
certifying the Chameleon Software Platform for use in the United Kingdom, as well as expanding the Company’s footprint in the United States
launching and marketing of a new business-to-consumer brand
entering into new partnerships and increasing brand awareness‎.

Also worth noting is they have plenty of cash on hand just as Canada has recently legalized betting on individual sports events by passing Bill C-218. This is a game-changer for sports betting in Canada, and so having money to invest in a recently opened up market could be hugely beneficial.