Esports Entertainment Group, Inc. Announces Reverse Stock Split
St. Julians, Malta--(Newsfile Corp. - February 21, 2023) - Esports Entertainment Group, Inc. (NASDAQ: GMBL) (NASDAQ: GMBLP) (NASDAQ: GMBLW) (NASDAQ: GMBLZ) (the "Company") today announced that it will effect a 1-for-100 reverse stock split of its outstanding common stock, effective today at 7:00 p.m. Eastern Standard Time (4:00 p.m. Pacific Standard Time). Beginning on February 22, 2022, the Company's common stock will open for trading on The Nasdaq Capital Market ("Nasdaq") on a split adjusted basis under the existing trading symbol "GMBL," but will trade under the new CUSIP number 29667K504.
On January 26, 2023, the Company's shareholders approved the reverse stock split without a corresponding reduction in the total number of authorized shares of the Company's common stock, and granted the Company's board of directors discretionary authority to select the ratio for the reverse stock split ranging from 1-for-20 to 1-for-100. The board of directors approved the reverse stock split at a ratio of 1-for-100. The Company's Board of Directors approved the reverse stock split with the objective of regaining compliance with the Nasdaq $1.00 minimum bid price requirement. The Company has until March 7, 2023 to comply with this requirement. To comply with this requirement, the closing bid price of the Company's common stock must be at least $1.00 per share for a minimum of 10 consecutive business days through March 7, 2023. There is no guarantee the Company will meet the minimum bid price requirement.
As a result of the reverse stock split, every 100 shares of common stock issued and outstanding as of the effective date will be automatically combined into one share of common stock. The reverse stock split will not change the terms of the common stock. Outstanding warrants, equity-based awards and other outstanding equity rights will be proportionately adjusted by dividing the shares of common stock underlying the securities by 100 and multiplying the exercise/conversion price, as the case may be, by 100. The reverse stock split will also apply to common stock issuable upon the conversion of the Company's Senior Convertible Note dated February 22, 2022 (the "Senior Convertible Note"), with the Conversion Price, as defined in the Senior Convertible Note, being subject to adjustment under the terms of the Senior Convertible Note and the Amendment and Waiver to the Senior Convertible Note dated February 16, 2023. The 10% Series A Cumulative Redeemable Convertible Preferred Stock will not be affected by the reverse stock split.
No fractional shares will be issued in connection with the reverse stock split. Any fractional shares of common stock resulting from the reverse stock split will be rounded up to the nearest whole post-split share and no shareholders will receive cash in lieu of fractional shares.
Stockholders holding their shares electronically in book-entry form are not required to take any action to receive post-split shares. Stockholders owning shares through a bank, broker or other nominee will have their positions automatically adjusted to reflect the reverse stock split, subject to brokers' particular processes, and will not be required to take any action in connection with the reverse stock split. For those stockholders holding physical stock certificates, the Company's transfer agent, VStock Transfer, LLC, will send instructions for exchanging those certificates for shares held electronically in book-entry form or for new certificates, in either case representing the post-split number of shares.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of our securities or any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
About Esports Entertainment Group
EEG is a full-service esports and online betting company. EEG focuses on two verticals: Games and iGaming. EEG Games provides esports entertainment experiences to gamers through a combination of proprietary infrastructure software that includes ggCircuit and our EGL ("Esports Gaming League") tournament platform. EEG iGaming is a licensed operator of online casino and sportsbook services for gaming customers primarily in Europe. EEG iGaming operates proprietary technology that facilitates wagering, payments, payment automation, bonusing, loyalty, compliance and casino integrations. EEG has offices in New Jersey, Estonia, the United Kingdom, and Malta. For more information, visit www.esportsentertainmentgroup.com.
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 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. 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, regarding our ability to continue as a going concern, our ability to regain compliance with Nasdaq Listing Rules, our significant indebtedness, and our obligations under our Senior Convertible Note. 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 the Act.
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