FansUnite (FANS.TO) is a sports and entertainment company, focusing on technology related to regulated and lawful online sports betting, esports betting, casino and fantasy. Their mission is to be a leader in the gaming industry by providing their partners and players the industry’s most versatile and vertically integrated platforms with a portfolio of unique products and a focus on esports, sports betting, casino and the next generation of bettors.
Today, FansUnite announced it has sold the source code related to the Company’s Chameleon gaming platform to Betr Holdings, a micro-betting specialist sportsbook co-founded by Jake Paul, currently operating in Ohio with plans to expand throughout the U.S.
FansUnite will retain the use of the platform and source code to further develop and maintain the Platform, and the ability to sell such use to another buyer in the future. Future code sales by FansUnite would not include any future enhancements made by Betr post close. The Transaction will allow the Company to further focus on growing its most profitable business units.
Betr has engaged 28 employees or contractors from the Company to continue work on the Platform and the parties have entered into a transition services agreement with respect to certain transition services to be provided on a post close basis.
Chameleon is a complete business-to-business (B2B) sports and esports white label iGaming platform offering turn-key and API solutions. Two distinct offerings (turn-key & API) make it flexible and scalable for FansUnite clients. Chameleon provides a client dashboard with tailored reporting and real-time analytics. It allows for companies to launch their own sports and related gambling brands or expand offerings.
Currently, FansUnite provides the Player Account Management (PAM) system for Betr’s operations, which made Chameleon an excellent fit with Betr’s long-term strategy of owning its technology platform.
“This is a transformational transaction for FansUnite and we are excited to move forward as a business that is a dominant player in its sector with the ability to execute on a profitable growth strategy,” said Scott Burton, CEO of FansUnite. “With the completion of this sale, we will reduce annual costs, ensuring we can execute on our strategy to generate positive cash flow this year.”
“When we entered into our multi-year agreement with Betr, we knew their long-term strategy included building or acquiring their PAM. In addition to the cash component of the deal, we will receive equity ownership in Betr, allowing us to participate in their growth while also retaining use of the current code to support existing B2B clients and the ability to further sell such use to a buyer in the future,” added Burton.
“With both the recent sales behind us, we can focus additional resources towards our highest revenue and margin businesses, such as Betting Hero and the affiliate business,” continued Scott Burton. “The Betting Hero team continues to scale as proven by their most recent success at the EGR Awards. They are a dominant operator in the live activation affiliate space, and have added two new business lines to their offering with Hero Hotline and Hero Research. Both new segments are gaining traction, and we believe they have the potential to be as successful as the primary business of Betting Hero while driving profitability for FansUnite.”
Betr will acquire the property and assets used in the Platform for total consideration of approximately CAD$10 million. The Purchase Price is comprised of: (i) CAD$3 million in cash paid on closing; (ii) CAD$2 million in Series A2 Preferred Shares of Betr, to be settled through warrants to purchase the Series A2 Preferred Shares at a price of USD$0.01 per Preferred Share; and (iii) milestone payments of up to CAD$5 million payable over 12 months following the closing of the Transaction upon achievement of certain integration milestones, payable as to CAD$3 million in cash and as to CAD$2 million payable by way of Warrants to purchase Preferred Shares at a price of USD$0.01 per Preferred Share.
This news comes days after FansUnite announced it sold McBookie for more than CAD $5 million. Equity Guru founder, Chris Parry, called this the catalyst for FansUnite setting up to become the big trade of the Summer.
The stock is up over 7% on the news at time of writing, and sits at a market cap just over $25 million.
The technical play remains the same as I have previously covered, albeit with strong volume and the strongest single price action candle, known as the engulfing candle, potentially being confirmed.
The stock is currently sitting at a major support zone, very close to previous record lows printed at $0.06. You can see that FansUnite actually popped from this support at the beginning of the year. The pop provided a return of over 100% from support at $0.07 to highs just above $0.15.
In recent days, buyers have been entering at this zone as can be seen by large wick and full bodied green candles and generally remaining above this support. Buyers have not been able to lift the price above $0.075, and hence the stock has developed an interim range here. A strong candle close above this price level would be a major bullish trigger.
Earnings and the McBookie sale did not turn out to be the catalyst the stock needed for liftoff. This Chameleon deal is seeing far better reaction from investors.
Going forward, we want to see a daily candle close above the $0.075 zone to trigger a breakout. This would lead to the momentum shifting strongly to the side of the bulls and see the stock run up to $0.11 and higher.
