Esports Entertainment Group Secures $4 Million Investment for Enhanced Balance Sheet
Esports Entertainment Group, Inc. announced that it has entered into an agreement with an institutional investor to complete a private placement of new unsecured, Series D Convertible Preferred Stock. The private placement is expected to provide the Company with net proceeds of approximately $4.0 million after estimated offering expenses and may also provide an opportunity for additional funding.
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.” Esports Entertainment Group has recently taken steps to significantly improve its balance sheet.
In April, the Company completed an exchange of its Senior Convertible Note for 15,230 shares of unsecured Series C Convertible Preferred Stock, resulting in a significant reduction of its debt. The successful completion of the private placement of Series D Convertible Preferred Stock has further bolstered the Company’s stockholders’ equity, now exceeding the Nasdaq Stock Market’s minimum stockholders’ equity requirement of $2,500,000. Maxim Group LLC is acting as the sole placement agent in connection with the offering.
The closing of the offering is expected to occur during the first week of May 2023, subject to customary and other closing conditions. Certain issuances of shares of common stock upon conversion of the Series D Convertible Preferred Stock and common warrant are expected to require approval by the Company’s stockholders pursuant to the rules and regulations of the Nasdaq Stock Market.
In addition, the Company expects to grant the Investor certain registration rights with respect to shares of common stock it is issued upon conversion of shares of Series D Convertible Preferred Stock and exercise of the warrant to purchase common stock.