LONDON, UK: Gfinity plc (AIM:GFIN) has today disposed of the remaining business and assets of its former Esports Solutions Division.

As previously announced in February 2023, given the inconsistent nature of service delivery work, and also the high cost to the Company of delivering a true end-to-end esports solution and the resources required to support clients in their activations around the globe, Gfinity had decided to partner with a US esports business to jointly deliver solutions on a profit-share basis and no fixed cost and as a result, had decided to close the Gfinity Arena in Fulham.

Subsequently, on 6 June 2023, the Company announced that the Board had decided to close down its Esports Solutions Division as the market for esports remained soft and the directors saw limited profitable growth opportunities and had further resolved to focus solely on the media division.

Ingenuity Loop Limited, a newly formed company owned by media investor Mike Luckwell,  has agreed to buy the remaining business and assets of the Esports Solutions Division for an upfront cash payment of £15,000 as a contribution to costs incurred by the Esports Solutions Division since August 2023 (including transaction costs) and a 15% equity interest in the Buyer.

The Buyer has an option to buy Gfinity’s 15% interest in Ingenuity for £200,000 in cash at any time in the first 12 months following completion of the sale. Neville Upton, Non-executive Chairman  of the Company, has agreed to join Ingenuity Loop as Chief Executive and will not receive a salary until Ingenuity Loop is profitable. In return, Neville Upton will have an equity interest of approximately 41.65% in Ingenuity Loop on completion.

Under the proposed terms of the Disposal, the Buyer will have the licence for a transitionary period of up to four years to trade as “Gfinity Esports Solutions” provided that the Buyer is not permitted to make any public announcements using the Gfinity trading name and there are standard provisions protecting Gfinity if in any way the Gfinity brand is brought into disrepute by the Buyer.

The Disposal sale and purchase agreement includes standard drag and tag provisions and warranties by Gfinity capped at the value of the consideration.

As Neville Upton has an interest in the Buyer, the Disposal is a related party transaction pursuant to Rule 13 of the AIM Rules for Companies.

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