Esports Entertainment Group Agrees to $4.3 Million Private Placement

Esports Entertainment Group, Inc. has announced that it has entered into a securities purchase agreement to complete a private placement of new unsecured, Series D Convertible Preferred Stock with an institutional investor. The private placement is expected to provide the Company with net proceeds of approximately US$4.0 million (£3.2 million/€3.6 million) after estimated offering expenses.

The B2B esports content and solutions provider is a leading, global iGaming company, and the private placement agreement may also provide the Company with an opportunity for additional funding whereby the Investor would receive a warrant to purchase shares of common stock and a warrant to purchase additional shares of Series D Convertible Preferred Stock. The closing of the offering is expected to occur during the first week of May 2023, subject to customary and other closing conditions.

In addition, the Company has exchanged the $15,230,024 in aggregate principal amount of the Company’s Senior Convertible Note outstanding into 15,230 shares of the new unsecured Series C Convertible Preferred Stock with Alto Opportunity Master Fund, SPC – Segregated Master Portfolio B (“Alto”) in a previously announced agreement. This exchange transaction was consummated on April 28, 2023, which will result in a significant reduction of its indebtedness.

The Company also reported that it now has stockholders’ equity in excess of the Nasdaq Stock Market’s minimum stockholders’ equity requirement of $2,500,000 as set forth in Nasdaq listing rule 5550(b)(1) as a result of recent actions, including the aforementioned private placement and exchange of the Senior Convertible Note into unsecured Series C Convertible Preferred Stock, as well as the elimination of other debt and liabilities.

Alex Igelman, CEO of Esports Entertainment, stated, “We appreciate the additional investment in the Company, which not only bolsters our cash position but also complements the previously announced exchange of the Company’s $15 million Senior Convertible Note into unsecured, Series C Convertible Preferred Stock. As a result of these transactions, we expect to have significantly enhanced our balance sheet. Moreover, we have eliminated over $4.0 million of annual operating expenses and project that we will have reduced debt and other liabilities by over $42 million, year to date. As a result, we are now positioning the Company to execute on our new, highly focused and capital efficient business model, targeting the growing iGaming, esports and e-simulator markets.”