Esports Entertainment Group Submits Transactional Waiver to New Jersey Division of Gaming Enforcement

 

Newark, New Jersey–(Newsfile Corp. – October 28, 2021) – Esports Entertainment Group, Inc. (NASDAQ: GMBL) (NASDAQ: GMBLW) (or the “Company”) is pleased to announce that its transactional waiver for the New Jersey Division of Gaming Enforcement (or “DGE”) has been submitted. Once approved, it would allow the Company to begin betting operations in the Garden State.

“New Jersey sports betting reported the first $1 billion handle in September alone and it shows no signs of slowing down anytime soon,” said Grant Johnson, CEO of Esports Entertainment Group. “The transactional waiver is one of the final steps in us being able to go live and bring the exciting world of esports betting to the state of New Jersey.”

In preparation for the issuance of its New Jersey gaming license, the Company opened an office in Hoboken at the beginning of September. In the Company’s October earnings call, it was announced that Q4 revenue was up 63 percent from Q3 and there was a significant increase in stockholder equity to $74.8 million in FY2021.

About Esports Entertainment Group

Esports Entertainment Group is a full stack esports and online gambling company fueled by the growth of video-gaming and the ascendance of esports with new generations. Our mission is to help connect the world at large with the future of sports entertainment in unique and enriching ways that bring fans and gamers together. Esports Entertainment Group and its affiliates are well-poised to help fans and players to stay connected and involved with their favorite esports. From traditional sports partnerships with professional NFL/NHL/NBA/FIFA teams, community-focused tournaments in a wide range of esports, and boots-on-the-ground LAN cafes, EEG has influence over the full-spectrum of esports and gaming at all levels. The Company maintains offices in New Jersey, the UK and Malta. For more information visit www.esportsentertainmentgroup.com.

Forward-Looking Statements

The information contained herein includes forward-looking statements. These statements relate to future events or to our 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. 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. 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. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

Contact:
U.S. Investor Relations
RedChip Companies, Inc.
Dave Gentry
407-491-4498
[email protected]

Media Inquiries
[email protected]

Investor Relations Inquiries
[email protected]

Esports Entertainment Group Partners with NetEase to Become Official Tournament and Broadcast Provider of Naraka: Bladepoint

Newark, New Jersey–(Newsfile Corp. – October 22, 2021) – Esports Entertainment Group, Inc. (NASDAQ: GMBL) (NASDAQ: GMBLW) (or the “Company”) and their EGL brand have signed a partnership with NetEase (NASDAQ: NTES) to become their official North American tournament and broadcasting provider for Naraka: Bladepoint, running the entirety of the Morus Cups Seasons One, Two, and Three, which take place between September and November 2021. The Company will run the tournaments as well as produce the broadcasts to cover it all. This partnership is another six-figure source of revenue for the Company.

The partnership’s promotion began at the end of August with the Asura Showmatch, with players getting an opportunity to go up against some of the world’s most popular streamers. The event drew over 85,000 viewers.

“Naraka: Bladepoint has already taken the gaming world by storm, and we are hoping that in working with NetEase, we can build a fun, competitive and sustainable esport ecosystem,” said Glen Elliott, General Manager of EGL. “It’s a pleasure working with such a global giant like NetEase on launching their esport activation around its new exciting game, Naraka: Bladepoint.”

Each of the three seasons of the Morus Cup will be narrowed down through three stages with each having a distinct prize pool of $20,000, including a qualification into the December Grand Finals that has a $100,000 reward. The Grand Finals will be broadcasted live in studio.

“We couldn’t be more thrilled to partner with Esports Entertainment Group and EGL to bring an amazing gaming experience to our Naraka: Bladepoint players,” said Archer Wang, Marketing Executive of NetEase’s 24 Entertainment. “With the success of August’s showmatch, we are more than confident in Esports Entertainment Group’s ability to create a top notch event for both our competitors and viewers.”

The Morus Cup kicked off on September 4 and Naraka: Bladepoint looks to be one of the battle royale genre’s hottest new entries. Naraka: Bladepoint has recently been nominated for a Golden Joystick Award in the category of Best Multiplayer Game.

About Esports Entertainment Group

Esports Entertainment Group is a full stack esports and online gambling company fueled by the growth of video-gaming and the ascendance of esports with new generations. Our mission is to help connect the world at large with the future of sports entertainment in unique and enriching ways that bring fans and gamers together. Esports Entertainment Group and its affiliates are well-poised to help fans and players to stay connected and involved with their favorite esports. From traditional sports partnerships with professional NFL/NHL/NBA/FIFA teams, community-focused tournaments in a wide range of esports, and boots-on-the-ground LAN cafes, EEG has influence over the full-spectrum of esports and gaming at all levels. The Company maintains offices in New Jersey, the UK and Malta. For more information visit www.esportsentertainmentgroup.com.

FORWARD-LOOKING STATEMENTS

The information contained herein includes forward-looking statements. These statements relate to future events or to our 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. 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. 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. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

Contact:

U.S. Investor Relations
RedChip Companies, Inc.
Dave Gentry
407-491-4498
[email protected]

Media Inquiries
[email protected]

Investor Relations Inquiries
[email protected]

Esports Entertainment Group Announces Fan-Centered EGL ClubClash Program with Professional Sports Teams

Newark, New Jersey–(Newsfile Corp. – October 21, 2021) – Esports Entertainment Group, Inc. (NASDAQ: GMBL) (NASDAQ: GMBLW) (or the “Company”) has partnered with a number of professional sports teams as their official esports tournament provider. Over the past year, fans of these organizations have enjoyed playing in one-off tournaments to see who is the best gamer. In an effort to provide fans more opportunities for interaction with one another and all of the participating teams, the Company is excited to unveil a brand new, immersive program titled “EGL ClubClash”, which gives fans the opportunity to play on their team’s behalf to prove which team has the greatest gamers.

As competitors play different games, they will earn team and individual points called “ClubClash Rep” which can be used to redeem everything from team merchandise to tickets. Some of the top prizes include tickets to a home game, signed and game worn memorabilia, video messages from players and more.

“With the unveiling of EGL ClubClash, we’re thrilled to bring a unique experience to sports and esports fans alike,” said Magnus Leppäniemi, President of Esports at Esports Entertainment Group. “Competitors will get to play their favorite games while also being able to earn exclusive experiences that bring them closer to the team they follow and represent during this program.”

Each professional team participating in EGL ClubClash will have their own leaderboards with constant updates on weekly and lifetime ranking in addition to where the team stands in the overall program standings. EGL Club Clash will have two distinct areas – Arena and Arcade – with arena being a more traditional competitive platform where players will vie for Rep and cash prizes through solo play and tournaments. Meanwhile, Arcade allows players to compete at any time to earn Rep.

EGL ClubClash’s Arena mode opens up preseason registration on October 25, 2021 with the preseason getting underway on November 24. The preseason finals will take place December 15-18. Madden, Fortnite, Rocket League and Valorant are the four games selected for the preseason. The first full season (arcade and arena) kicks off on January 3, 2022, with the finals taking place March 23-26.

About Esports Entertainment Group

Esports Entertainment Group is a full stack esports and online gambling company fueled by the growth of video-gaming and the ascendance of esports with new generations. Our mission is to help connect the world at large with the future of sports entertainment in unique and enriching ways that bring fans and gamers together. Esports Entertainment Group and its affiliates are well-poised to help fans and players to stay connected and involved with their favorite esports. From traditional sports partnerships with professional NFL/NHL/NBA/FIFA teams, community-focused tournaments in a wide range of esports, and boots-on-the-ground LAN cafes, EEG has influence over the full-spectrum of esports and gaming at all levels. The Company maintains offices in New Jersey, the UK and Malta. For more information visit www.esportsentertainmentgroup.com.

Forward-Looking Statements

The information contained herein includes forward-looking statements. These statements relate to future events or to our 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. 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. 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. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

Contact:

U.S. Investor Relations
RedChip Companies, Inc.
Dave Gentry
407-491-4498
[email protected]

Media Inquiries
[email protected]

Investor Relations Inquiries
[email protected]

Esports Entertainment Group Reaches $1 Million Milestone in Crypto Mining Since Launch in May

Newark, New Jersey–(Newsfile Corp. – October 13, 2021) – Esports Entertainment Group, Inc. (NASDAQ: GMBL) (NASDAQ: GMBLW) (or the “Company”), an esports and online gambling company, is pleased to announce that ggCircuit’s crypto mining application for LAN centers has crossed the $1 million mark. The mining application is an add-on to the ggLeap subscription that enables center owners to utilize idle computing power to mine for Ethereum. Since the beta launch in May 2021, 304 centers across 58 countries have opted in and mined over $1 million.

“The crypto mining application has grown exponentially over the last few months and we’ve added nearly 200 more centers since July,” said Grant Johnson, CEO of Esports Entertainment Group. “This milestone is another significant step forward as we continue to grow and receive positive feedback on ggCircuit’s product.”

ggCircuit is a B2B software company that provides cloud-based management for LAN centers, a tournament platform, and integrated wallet/point-of-sale solutions for enterprise customers.

About Esports Entertainment Group
Esports Entertainment Group is a full stack esports and online gambling company fueled by the growth of video-gaming and the ascendance of esports with new generations. Our mission is to help connect the world at large with the future of sports entertainment in unique and enriching ways that bring fans and gamers together. Esports Entertainment Group and its affiliates are well-poised to help fans and players to stay connected and involved with their favorite esports. From traditional sports partnerships with professional NFL/NHL/NBA/FIFA teams, community-focused tournaments in a wide range of esports, and boots-on-the-ground LAN cafes, EEG has influence over the full-spectrum of esports and gaming at all levels. The Company maintains offices in New Jersey, the UK and Malta. For more information visit www.esportsentertainmentgroup.com.

Forward-Looking Statements
The information contained herein includes forward-looking statements. These statements relate to future events or to our 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. 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. 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. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

Contact:
U.S. Investor Relations
RedChip Companies, Inc.
Dave Gentry
407-491-4498
[email protected]

Media Inquiries
[email protected]

Investor Relations Inquiries
[email protected]

Esports Entertainment Group Reports Fourth Quarter and Fiscal Year 2021 Results

Q4 revenue up 63% over Q3 to $8.8 million

$16.8 million revenue generated for fiscal year 2021

Stockholders’ equity increased to $74.8M, up $63.4M over FY20

Company reaffirms FY22 revenue guidance of $100M to $105M

Newark, New Jersey–(Newsfile Corp. – October 13, 2021) – Esports Entertainment Group, Inc. (NASDAQ: GMBL) (NASDAQ: GMBLW) (or the “Company”) today announced financial results for its fourth quarter and fiscal year ended June 30, 2021.

Fiscal Fourth Quarter 2021 and Recent Operational Highlights

  • Completed acquisitions of Helix eSports and ggCircuit
  • Completed acquisition of BetHard, the B2C business of Gameday Group, adding Swedish and Spanish gaming licenses and substantially increasing revenue base
  • New Jersey gaming license formally accepted by NJ Division of Gaming Enforcement in May 2021
  • Opened New Jersey office and expanded hiring ahead of VIE US launch
  • Completed $35 million private placement of convertible notes with $17.50 conversion price
  • Partnered with Square, the world-leading point of sale and payment processing provider, to integrate its payment solution into ggLeap, a premium esports center management software
  • Partnered with Game Fund Partners to become a part of their venture capital arm and a new planned $300 million game fund
  • Continued to expand partnerships with professional sports teams, becoming official tournament sponsor for the Cleveland Cavaliers, New York Rangers, Indianapolis Colts, Tampa Bay Buccaneers, LA Chargers, and LAFC
  • Partnered with Pro Football Retired Players Association, a national membership organization that develops benefits and programs for retired NFL players, to be its official esports partner and tournament provider
  • Partnered with Hall of Fame Resort and Entertainment Company to become the official esports provider for the Hall of Fame Village powered by Johnson Controls, joining Topgolf Swing Suites and Don Shula’s among others
  • Signed agreement with Associated Students of UCLA to launch state-of-the-art Helix eSports gaming facility inside Ackerman Union, located in the heart of UCLA’s campus
  • Launched crypto mining application at ggCircuit enabled LAN centers
  • Launched “pay-and-play” casino brand targeting the Finnish gaming market
  • Partnered with Indian Gaming Esports Association and Spectrum Gaming to bring esports to tribal nations and casinos
  • Partnered with Liquipedia.net to create the most community-centric and responsible betting integration in esports
  • Launched InVIE esports tournament series with Dota 2 Season 1 in South America
  • Became official gambling sponsor of Beyond the Summit’s May 2021 CS:GO tournament; Beyond the Summit is one of the world’s largest esports networks
  • Partnered with Riot Games to host the Summer 2021 North American LCS Proving Grounds tournament
  • The Company’s Helix eSports subsidiary partnered with GUNNAR Optiks, the leader in blue-light gaming and computer glasses
  • Signed agreement to co-produce the 24th Annual East Coast Gaming Congress in Atlantic City
  • Signed exclusive content partnership with ESTV EsportsTV, the world’s first 24-7 live linear video channel dedicated to esports
  • Partnered with SG Esports, a Brazilian professional gaming organization, as their primary jersey sponsor
  • Partnered with Real Cricket 20, the world’s top mobile cricket game, to provide software integration services for the dafaNEWS Ecricket World Series
  • The Company’s SportNation brand nominated for eGaming’s Marketing Campaign of the Year Award
  • Partnered with Alpha Esports Tech to design computer vision technology for automated scoring

Fiscal Fourth Quarter 2021 Financial Results

  • Net revenue of $8.8 million, up $8.8 million over 4Q20 and up 63% compared to 3Q21’s $5.4 million
  • Gross profit of $5.2 million, up $5.2 million over 4Q20 and up 69% compared to 3Q21’s $3.1 million
  • Gross margin as a percentage of net sales was 59%, compared to 57% in 3Q21
  • Sales and marketing expenses of $5.1 million, up from $0.3 million in 4Q20 and compared to $2.4 million in 3Q21
  • General and administrative expenses of $10.5 million, up from $1.8 million in 4Q20 and compared to $6.3 million in 3Q21
  • Operating loss of $10.5 million, up from a loss of $2.1 million in 4Q20 and compared to $5.6 million in 3Q21
  • GAAP Net loss of $4.8 million or ($2.80) per basic common share, up from a net gain of $1.9 million or $2.09 per basic common share in 4Q20 and compared to a net loss of $12.4 million or ($0.73) per share in 3Q21
  • Non-GAAP adjusted EBITDA* of ($5.5 million), compared to adjusted EBITDA of ($0.9 million) in 4Q20 and compared to adjusted EBITDA of $2.1 million in 3Q21

Full Year Fiscal 2021 Financial Results

  • Net revenue of $16.8 million, up $16.8 million over FY20
  • Gross profit of $8.9 million, up $8.9 million over FY20
  • Gross margin as a percentage of net sales was 53%
  • Sales and marketing expenses of $10.0 million, up $9.7 million over FY20
  • General and administrative expenses of $24.6 million, up $3.7 million over FY20
  • Operating loss of $25.7 million, up $21.7 million over FY20
  • GAAP net loss of $26.4 million or $1.68 per basic common share, compared to a net loss of $10.4 million or $1.50 per share in FY20
  • Non-GAAP adjusted EBITDA* of ($14.0 million), compared to adjusted EBITDA of ($2.3 million) in FY20
  • Stockholders’ equity increased $63.4 million to $74.8 million at the end of FY21, up from $11.4 million at the end of FY20

* Reconciliation on non-GAAP financial measures provided in the tables of this press release.

Fiscal 2022 Financial Outlook

The Company expects net revenue to increase by at least 490% to $100 million to $105 million in FY22, driven primarily by the multiple acquisitions completed in calendar 2021.

Management Commentary

“The formidable foundation we built since our 2020 IPO drove strong performance in the fourth quarter and sets the stage for achieving significant growth in FY22. Based on a new record single-day performance of our iGaming division in late September, I am extremely confident in our ability to hit our guidance target,” added Grant Johnson, CEO of Esports Entertainment Group. “The partnerships we have formed, from top professional sports teams to industry-leading esports and gaming companies, clearly demonstrate the strength of our expansive product and service portfolio, and I believe our future is very bright as we continue to execute on our rapid expansion strategy driven by the solidification of our market position and the ongoing growth of our unique assets.”

Conference Call

Esports Entertainment Group will host a conference call and webcast today, Wednesday, October 13, at 5:00 p.m. ET to answer questions about the Company’s operational and financial highlights for its fourth quarter and fiscal year 2021 as well as other recent developments.

Date: Wednesday, October 13, 2021

Time: 5:00 p.m. Eastern Time

Live Call: +1-800-437-2398 (U.S. Toll-Free) or +1-323-347-3294 (International)

Webcast: http://public.viavid.com/index.php?id=146743

For interested individuals unable to join the conference call, a dial-in replay of the call will be available until October 27 and can be accessed by dialing +1-844-512-2921 (U.S. Toll Free) or +1-412-317-6671 (International) and entering replay pin number: 6234338.

About Esports Entertainment Group

Esports Entertainment Group is a full stack esports and online gambling company fueled by the growth of video-gaming and the ascendance of esports with new generations. Our mission is to help connect the world at large with the future of sports entertainment in unique and enriching ways that bring fans and gamers together. Esports Entertainment Group and its affiliates are well-poised to help fans and players to stay connected and involved with their favorite esports. From traditional sports partnerships with professional NFL/NHL/NBA/FIFA teams, community-focused tournaments in a wide range of esports, and boots-on-the-ground LAN cafes, EEG has influence over the full-spectrum of esports and gaming at all levels. The Company maintains offices in New Jersey, the UK and Malta. For more information visit www.esportsentertainmentgroup.com.

FORWARD-LOOKING STATEMENTS

The information contained herein includes forward-looking statements. These statements relate to future events or to our 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. 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. 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. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

Contact:

U.S. Investor Relations
RedChip Companies, Inc.
Dave Gentry
407-491-4498
[email protected]

Media Inquiries
[email protected]

Investor Relations Inquiries
[email protected]

Esports Entertainment Group, Inc.
Condensed Consolidated Balance Sheets

ASSETS June 30, 2021 June 30, 2020
Current assets
Cash $ 19,917,196 $ 12,353,307
Restricted cash 3,443,172
Accounts receivable, net 136,681
Receivables reserved for users 2,290,105
Other receivables 658,745
Deposit on business acquisition 500,000
Prepaid expenses and other current assets 3,264,344 263,345
Total current assets 29,710,243 13,116,652
Equipment, net 726,942 8,041
Operating lease right-of-use asset 1,272,920
Intangible assets, net 45,772,555 2,000
Goodwill 40,937,370
Other non-current assets 1,315,009 6,833
TOTAL ASSETS $ 119,735,039 $ 13,133,526
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses $ 8,458,689 $ 811,549
Liabilities to customers 3,057,942
Deferred revenue 22,110
Liabilities to be settled in stock 927,855
Current portion of long-term debt 223,217
Operating lease liability – current 414,215
Total current liabilities 12,176,173 1,739,404
Long-term debt 6,523,804
Warrant liability 23,500,000
Deferred income taxes 1,870,861
Operating lease liability – non-current 878,809
Total liabilities 44,949,647 1,739,404
Commitments and contingencies (Note 14)
Stockholders’ equity
Preferred stock $0.001 par value; 10,000,000 shares authorized, none issued and outstanding
Common stock $0.001 par value; 500,000,000 shares authorized, 21,896,145 and 11,233,223 shares issued and outstanding as of June 30, 2021 and June 30, 2020, respectively 21,896 11,233
Additional paid-in capital 122,341,002 31,918,491
Accumulated deficit (46,908,336 ) (20,535,602 )
Accumulated other comprehensive loss (669,170 )
Total stockholders’ equity $ 74,785,392 11,394,122
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 119,735,039 $ 13,133,526

 

Esports Entertainment Group, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss

Year Ended June 30,
2021 2020
Net revenue $ 16,783,914 $
Operating costs and expenses:
Cost of revenue 7,861,317
Sales and marketing 10,038,524 322,517
General and administrative 24,610,511 3,727,198
Total operating expenses 42,510,352 4,049,714
Operating loss 25,726,438 4,049,714
Other income (expense):
Interest expense (698,973 ) (1,995,458 )
Net amortization of debt discount and premium on convertible debt (1,156,877 )
Change in fair value of derivative liabilities (2,432,302 )
Change in fair value of warrant liability (1,549,924 )
Change in fair value of contingent consideration (1,748,607 )
Loss on extinguishment of debt (2,795,582 )
Gain on warrant exchange 1,894,418
Other non-operating income (loss) (460,328 ) 186,498
Total other expense (4,457,832 ) (6,299,303 )
Loss before income taxes 30,184,270 10,349,017
Income tax benefit (expense) 3,811,536 (2,398 )
Net loss $ 26,372,734 $ 10,351,415
Basic and diluted loss per common share $ (1.68 ) $ (1.50 )
Weighted average number of common shares outstanding, basic and diluted 15,697,058 6,880,321

 

Esports Entertainment Group, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss

Quarter Ended June 30
Q4 2021 Q4 2020
Net revenue 8,800,621
Operating costs and expenses:
Cost of revenue 3,611,428
Sales and marketing 5,146,836 322,517
General and administrative 10,528,001 1,814,328
Total operating expenses 19,286,264 2,136,844
Operating loss 10,485,643 2,136,844
Other income (expense):
Interest expense (699,372 ) 290,334
Net amortization of debt discount and premium on convertible debt 68,328
Change in fair value of derivative liabilities 3,433,149
Change in fair value of warrant liability 3,180,000
Change in fair value of contingent consideration (442,803 )
Loss on extinguishment of debt
Gain on warrant exchange
Other non-operating income (loss) (194,625 ) 212,277
Total other expense 1,843,200 4,004,088
Loss before income taxes 8,642,443 (1,867,244 )
Income tax benefit (expense) 3,811,536 (2,398 )
Net loss (income) $ 4,830,907 $ (1,864,846 )
Basic and diluted loss per common share (2.80 ) 2.09
Weighted average number of common shares outstanding, basic and diluted 1,722,861 890,702
Non GAAP Items
Net income (loss) $ (4,830,907 ) $ 1,864,846
Increase / (decrease) to adjusted EBITDA
Interest $ 699,372 $ (290,334 )
Income tax $ (3,811,536 ) $ 2,398
Depreciation and amortization $ 1,891,636 $ 2,618
Shared based compensation $ 1,074,608 $ 1,165,802
Transaction cost $ 2,073,641 $
Settlement of litigation $ (44,497 ) $ 35,771
Other non-operating cost $ 194,842 $ (212,277 )
Change in fair value of warant liability $ (3,180,000 ) $
Change in fair value of contingent consideration $ 442,803 $
Net amortization of debt discount and premium on convertible debt $ $ (68,328 )
Change in fair value of derivative liabilities $ $ (3,433,149 )
Loss on extinguishment of debt $ $
Gain on warrant exchange $ $
Adjusted EBITDA loss $ (5,490,038 ) $ (932,653 )

 

Adjusted EBITDA

The table below presents our Adjusted EBITDA reconciled to our net loss, the closest U.S. GAAP measure, for the periods indicated:

Year Ended June 30,
2021 2020
Net income (loss) $ (26,372,734 ) $ (10,351,415 )
Adjusted for:
Interest 698,973 1,995,458
Income tax (3,811,536 ) 2,398
Depreciation and amortization 3,578,797 20,631
Shared based compensation 4,129,726 1,614,236
Transaction cost 3,509,429
Settlement of litigation 464,409 114,226
Other non-operating cost 460,328 (186,498 )
Change in fair value of warant liability 1,549,924
Change in fair value of contingent consideration 1,748,607
Net amortization of debt discount and premium on convertible debt 1,156,877
Change in fair value of derivative liabilities 2,432,302
Loss on extinguishment of debt 2,795,582
Gain on warrant exchange (1,894,418 )
Adjusted EBITDA loss $ (14,044,077 ) $ (2,300,621 )

 

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles (GAAP), the Company uses adjusted EBITDA, a non-GAAP financial measure. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses this non-GAAP financial measure for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that it provides useful information about operating results, enhances the overall understanding of past financial performance and future prospects, and allows for greater transparency with respect to key metrics used by management in its financial and operational decision making. The non-GAAP financial measure used by the Company in this press release may be different from the methods used by other companies.

We define and calculate Adjusted EBITDA as net loss before the impact of interest income or expense, income tax expense or benefit, depreciation and amortization, and further adjusted for the following items: stock-based compensation, transaction-related costs, non-core litigation, settlement and related costs, remeasurement of warrant liabilities, and certain other non-recurring, non-cash or non-core items, as described in the reconciliation below.

Adjusted EBITDA excludes certain expenses that are required in accordance with U.S. GAAP because they are non-recurring items (for example, in the case of transaction-related costs), non-cash expenditures (for example, in the case of depreciation, amortization, and stock-based compensation), or are not related to our underlying business performance (for example, in the case of interest income and expense and litigation settlement and related costs).

Esports Entertainment Group’s EEG Labs Announces Partnership with Alpha Esports Tech Inc. to Design Computer Vision for Automated Scoring

Newark, New Jersey and Vancouver, British Columbia–(Newsfile Corp. – October 4, 2021) – Esports Entertainment Group, Inc. (NASDAQ: GMBL) (NASDAQ: GMBLW) (or the “Company”) and their newly rebranded subsidiary EEG Labs (formerly Genji) are proud to announce a partnership with Alpha Esports Tech Inc. (“Alpha Tech”) (CSE: ALPA) (FSE: 9HN), (OTC Pink: APETF). The Company and Alpha Tech will develop a new computer vision tech system that will allow Alpha Tech’s online platform, GamerzArena, to conduct automated scoring for popular games such as Call of Duty and Fortnite.

The new computer vision tech simplifies match scoring and allows GamerzArena to detect many common types of fraudulent activity, such as falsifying game outcomes. An additional benefit of this new technology involves tournament results being available instantly on the leaderboards on GamerzArena. The automated tech will allow users to have an added sense of trust for the results of tournaments and contests due to the consistency of the computer vision tech around scoring. EEG Labs will also deploy its computer vision tech to extract data from additional sources and contests to optimize content plans for the Alpha Tech.

“We’re excited to continue expanding EEG Labs’ technology and GamerzArena is a great avenue to do so,” adds Magnus Leppaniemi, President of EEG Games. “In working together, we will pave the way for ground-breaking and efficient scoring of esports match results, allowing gamers everywhere to compete safely and reliably.”

“Partnering with EEG Labs to design a computer vision tech will push GamerzArena to the next level,” said Interim CEO, Matthew Schmidt. “The automated scoring system will give GamerzArena an added level of trust and security, which will help us continue to increase our user base.”

About Alpha Esports Tech Inc

Alpha Esports Tech Inc. is a technology company that focuses on emerging markets in Esports, mobile gaming, ecommerce, blockchain and high growth opportunities. Through a strong portfolio of technology assets, we bring a new edge to modern gaming.

About EEG Labs

EEG Labs is a subsidiary of Esports Entertainment Group that uses sophisticated statistical models, computer vision, and natural language processing to deliver cutting-edge broadcast optimization and talent scouting analytics.

About Esports Entertainment Group

Esports Entertainment Group is a full stack esports and online gambling company fueled by the growth of video-gaming and the ascendance of esports with new generations. Our mission is to help connect the world at large with the future of sports entertainment in unique and enriching ways that bring fans and gamers together. Esports Entertainment Group and its affiliates are well-poised to help fans and players to stay connected and involved with their favorite esports. From traditional sports partnerships with professional NFL/NHL/NBA/FIFA teams, community-focused tournaments in a wide range of esports, and boots-on-the-ground LAN cafes, EEG has influence over the full-spectrum of esports and gaming at all levels. The Company maintains offices in New Jersey, the UK and Malta. For more information visit www.esportsentertainmentgroup.com.

FORWARD-LOOKING STATEMENTS

The information contained herein includes forward-looking statements. These statements relate to future events or to our 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. 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. 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. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

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