Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 16, 2023

ESPORTS ENTERTAINMENT GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada	001-39262	26-3062752
(State or other jurisdiction of	(Commission	(IRS Employer
incorporation or organization)	File Number)	Identification No.)

BLOCK 6,

TRIQ PACEVILLE,

ST. JULIANS STJ 3109

MALTA

(Address of principal executive offices)

356 2713 1276

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	GMBL	The Nasdaq Stock Market LLC
Common Stock Purchase Warrants	GMBLW	The Nasdaq Stock Market LLC
10.0% Series A Cumulative Redeemable Convertible Preferred Stock	GMBLP	The Nasdaq Stock Market LLC
Common Stock Purchase Warrants	GMBLZ	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On October 16, 2023, Esports Entertainment Group, Inc. (the “Company”) issued a press release providing a business update for the year ended June 30, 2023. The text of the press release is furnished as Exhibit 99.1 and incorporated herein by reference.

The information set forth in Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit

Number

Exhibit Description

99.1

Press release dated October 16, 2023

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

Forward-Looking Statements

The information contained herein includes forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “will likely result,” and similar expressions. These statements relate to future events or to our strategies, targeted markets, and future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements, including, the ability to effectuate debt for equity exchanges, the conversion prices, the timing and other terms of such exchanges, and the ability to consummate the required capital raise. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, and those discussed in other documents we file with the SEC, including our ability to regain compliance with Nasdaq Listing Rules and stay listed on Nasdaq, our significant indebtedness, our obligations under our Senior Convertible Note, and our ability to continue as a going concern. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future, unless required by law. The safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of such Act.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 16, 2023

	ESPORTS ENTERTAINMENT GROUP, INC.

	By:	/s/ Michael Villani
	Name:	Michael Villani
	Title:	Chief Financial Officer

Exhibit 99.1

Esports Entertainment Group Provides Fiscal Year-End 2023 Business Update

Continues Strategic Restructuring to Optimize Operations;

Reduces Total Liabilities by Over $51 Million Since Beginning of Calendar 2023

Cuts Non-Profitable Operations and Contracts;

Projects Over $4 Million in Annual Savings

Broadens Offerings with Key Partnerships in iGaming and Esports Wagering

St. Julians, Malta–October 16, 2023–Esports Entertainment Group, Inc. (NASDAQ: GMBL) (NASDAQ: GMBLP) (NASDAQ: GMBLW) (NASDAQ: GMBLZ) (“Esports Entertainment” or the “Company”), a leading, global iGaming company and business-to-business (B2B) esports solutions provider, today provided strategic, financial, and operational updates for the fiscal year end June 30, 2023.

“Over recent months, the Company has undertaken a comprehensive examination of our organization, focusing on the anticipated trajectory of the esports and iGaming sectors,” commented Alex Igelman, CEO of Esports Entertainment. “Through this process, we conducted a deep dive into our business from top to bottom and pinpointed operations and contracts that weren’t profitable, leading to decisive actions that have set us up for a promising future. Although the restructuring came with one-time expenses, we are confident that the long-term advantages will significantly outweigh these costs. Moving forward, the Company anticipates a reduction in annual operating expenses of more than $4 million. We have also reduced total liabilities by approximately $51.8 million since January 2023. By focusing resources around core assets, we believe we are establishing a robust foundation for our future. This period of time in the Company’s evolution marks a pivotal shift and new beginning, allowing us to leave behind past barriers and shape a path that maximizes our potential for success, which we believe will drive significant revenue growth and value for our shareholders.”

“Our recent focus has turned towards developing initiatives to further broaden the Company’s esports and iGaming offerings in order to create a comprehensive, end-to-end offering of online betting options to our customers.”

“Building on our recently announced upcoming sportsbook offering, we also recently announced a key partnership with Oddin.gg, a top-tier esports betting solution provider. We plan to integrate Oddin’s cutting-edge iFrame solution into our Idefix iGaming platform, enabling us to supply betting markets for our customers. This anticipated integration, subject to the approval of the Malta Gaming Authority, is targeted for Q1 2024. Expanding our partnership with Oddin.gg marks a significant step forward for Esports Entertainment as it will allow us to provide odds on traditional esports events, such as seasonal, big-name events, annual esports tournaments, as well as short-cycle wagerable events. What sets Oddin.gg apart is their unique combination of proprietary statistical models, unique algorithms, and deep understanding of game nuances and player inclinations, ensuring an unparalleled user experience. Their platform’s capability to anticipate in-game event outcomes and facilitate live, in-game markets provides users with what we believe will be an unparalleled, iGaming and esports betting experience. The integration of Oddin.gg’s advanced esports wagering solution, combined with the addition of Delasport’s sportsbook, provides Esports Entertainment a comprehensive, B2C esports wagering and iGaming ecosystem.”

“At the same time, our wholly owned subsidiary, ggCircuit, entered into a partnership with Ghost Gaming and Skillshot Media to establish a first-of-its-kind Scholastic Esports Innovation Center within the Ghost Gaming HQ lab, dedicated to pioneering research and co-developing cutting-edge technology tailored to the evolving needs of school esports programs.”

“Overall, we believe the Company-wide initiatives we have undertaken this year will place us in a stronger financial position, and at the forefront of the rapidly growing esports wagering market which is poised to grow significantly by 2025. Moreover, the addition of Oddin.gg’s iFrame supports the Company’s global expansion strategies, given Oddin’s established international presence. As a result, I could not be more excited by the outlook for our business.”

Financial Results - Fiscal 2023

	●	Revenue totaled $23.0 million for the fiscal year ended June 30, 2023, compared to $58.4 million for the 2022 comparable period
	●	Cost of revenue totaled $8.8 million for the fiscal year ended June 30, 2023, a decrease of $15.4 million, or 64%, from $24.2 million in the 2022 fiscal year
	●	Sales and marketing expense totaled $5.9 million for the fiscal year ended June 30, 2023, a decrease of $19.8 million, or 77%, compared to $25.7 million in the 2022 fiscal year
	●	General and administrative expense totaled $28.9 million for the fiscal year ended June 30, 2023, a decrease of $22.4 million, or 44%, compared to $51.3 million for the 2022 comparable period
	●	Net loss for the fiscal year ended June 30, 2023, was $32.3 million, compared to $102.2 million for the 2022 fiscal year

The Company’s complete financial results are available in the Company’s Form 10-K, which has been with the Securities and Exchange Commission and will be available on the Company’s website.

About Esports Entertainment Group

Esports Entertainment Group is a global MGA-licensed, “esports-focused” iGaming B2C operator and a US-focused B2B provider of esports solutions. The Company owns and operates the world’s leading esport venue management system, currently deployed in over 800 global locations, including more than 100 colleges and universities. The Company’s strategy is to capitalize on the multi-billion-dollar market for esports and esports wagering by leveraging its leading position in the industry. The Company is also targeting the rapidly growing market for short-form esports wagerable content, which features competitive, short-cycle head-to-head leagues that are optimized for betting. In addition to its plans to distribute esports content, the Company currently provides B2C-focused wagering through its MGA-licensed suite of brands. For additional information about the Company, please visit www.esportsentertainmentgroup.com.

Forward-Looking Statements

The information contained herein includes forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “will likely result,” and similar expressions. These statements relate to future events or to our strategies, targeted markets, and future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements, including the Center serving as a hub for competitive gaming communities, bringing together the brightest minds from all stakeholders to develop bespoke software and hardware solutions that equip both students and educators to thrive in the digital age. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, and those discussed in other documents we file with the SEC, including our ability to maintain compliance with Nasdaq Listing Rules and stay listed on Nasdaq, our obligations under our preferred stock outstanding, and our ability to continue as a going concern. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future, unless required by law. The safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of such Act.

Investor Relations Contact:

Crescendo Communications, LLC

Tel: (212) 671-1021

Email: GMBL@crescendo-ir.com

Cover	Oct. 16, 2023
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 16, 2023
Entity File Number	001-39262
Entity Registrant Name	ESPORTS ENTERTAINMENT GROUP, INC.
Entity Central Index Key	0001451448
Entity Tax Identification Number	26-3062752
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	BLOCK 6
Entity Address, Address Line Two	TRIQ PACEVILLE
Entity Address, City or Town	ST. JULIANS STJ 3109
Entity Address, Country	MT
City Area Code	356
Local Phone Number	2713 1276
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock [Member]
Title of 12(b) Security	Common Stock
Trading Symbol	GMBL
Security Exchange Name	NASDAQ
Common Stock Purchase Warrants
Title of 12(b) Security	Common Stock Purchase Warrants
Trading Symbol	GMBLW
Security Exchange Name	NASDAQ
10.0% Series A Cumulative Redeemable Convertible Preferred Stock
Title of 12(b) Security	10.0% Series A Cumulative Redeemable Convertible Preferred Stock
Trading Symbol	GMBLP
Security Exchange Name	NASDAQ
Common Stock Purchase Warrants 1 [Member]
Title of 12(b) Security	Common Stock Purchase Warrants
Trading Symbol	GMBLZ
Security Exchange Name	NASDAQ