CrowdGather Sells Gaming Unit

CrowdGather Inc. has sold off its social gaming subsidiary to a Nevada company in a deal valued at $3.5 million. CrowdGather, in Woodland Hills, an operator of online forums, acquired Boston-based Plaor Inc. in 2014 for $5 million. The deal with Native Games America, in Las Vegas, has the purchaser paying $200,000 in cash, assuming more than $2 million in debt and liabilities and paying $1 million in deferred payments starting a year from now. “We believe that the sale of Plaor Inc. may help shareholder value by allowing the company to refocus on its core business of forums and social network,” CrowdGather said in a filing with the Securities and Exchange Commission. Plaor specializes in developing multi-platform social games simulating a casino environment that are available on Facebook, Google Play, and the Apple App Store. The betting connected with the games is virtual and players cannot redeem winnings for cash. In the SEC filing, CrowdGather said that while it operated Plaor at break even, it was difficult to raise capital to service debt and pursue a player acquisition strategy necessary for Plaor reach its full potential. “Those challenges combined with an increasingly competitive market fueled by consolidation posed what we believed were significant future challenges to our strategic initiative to grow the social games business at the rate we determined was needed,” the filing said. Shares closed up at less than 1 cent, or more than 20 percent, to 2 cents on over-the-counter trading.