$GMBLZ

ESPORTS ENTERTAINMENT GROUP, INC.

CIK:0001451448|SEC Filings

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024	Mar. 31, 2023
Net revenue	$ 1,723,415	$ 4,175,994	$ 6,995,259	$ 20,190,663
Operating costs and expenses:
Cost of revenue	474,700	1,292,743	1,765,258	7,414,814
Sales and marketing	262,849	928,692	1,834,791	5,217,584
General and administrative	2,799,644	7,369,452	13,771,533	24,399,888
Loss on disposal of businesses, net		4,198,362		4,198,362
Asset impairment charges			12,981,142	16,135,000
Total operating expenses	3,537,193	13,789,249	30,352,724	57,365,648
Operating loss	(1,813,778)	(9,613,255)	(23,357,465)	(37,174,985)
Other income (expense):
Interest expense	(9,448)	(460,914)	(9,448)	(2,490,696)
Gain on termination of lease		799,901		799,901
Loss on extinguishment of senior convertible note		(3,616,372)		(3,616,372)
Change in fair value of derivative liability	(462,997)	(1,163,979)	(999,695)	7,435,687
Change in fair value of warrant liability	(565,533)	1,412,941	(286,057)	6,435,229
Loss on contingent consideration				(2,864,551)
Other non-operating income (loss)	9,197	(551,921)	(36,119)	(19,085)
Total other income (expense), net	(1,028,781)	(3,580,344)	(1,331,319)	5,680,113
Income (Loss) before income taxes	(2,842,559)	(13,193,599)	(24,688,784)	(31,494,872)
Income tax benefit (expense)		(376)		(376)
Net loss	(2,842,559)	(13,193,975)	(24,688,784)	(31,495,248)
10% Series A cumulative redeemable convertible preferred stock cash dividend		(200,628)	(334,380)	(601,884)
Undeclared dividend on 10% Series A cumulative redeemable convertible preferred stock	(200,628)		(267,504)
Accretion of 10% Series A cumulative redeemable convertible preferred stock to redemption value	(78,933)	(75,980)	(234,559)	(225,782)
Accretion of the original discount on Series D convertible preferred stock	(422,143)		(422,143)
Dividend on Series C convertible preferred stock and Series D convertible preferred stock	(33,832)		(589,421)
Deemed dividend on accretion of Series D convertible preferred Stock to redemption value	(172,636)		(197,377)
Deemed dividend on make whole provision on Series C convertible preferred stock			(4,805,990)
Deemed dividend from down round provision on Series C convertible preferred stock and Series D convertible preferred stock	(3,586,295)		(23,949,067)
Accretion of original derivative liability on extinguishment of Series C convertible preferred stock and Series D convertible preferred stock	3,236,090		3,236,090
Extinguishment of Series C convertible preferred stock and Series D convertible preferred stock	1,762,017		1,762,017
Accretion of issuance costs of Series D convertible preferred stock on extinguishment	(143,621)		(143,621)
Net loss attributable to common stockholders	$ (3,930,662)	$ (13,470,583)	$ (53,902,861)	$ (32,322,914)
Net loss per common share - basic	$ (3.43)	$ (2,305.82)	$ (95.07)	$ (11,084.68)
Net loss per common share - diluted	$ (3.43)	$ (2,305.82)	$ (95.07)	$ (11,084.68)
Weighted average number of common shares outstanding - basic	1,145,980	5,842	566,997	2,916
Weighted average number of common shares outstanding - diluted	1,145,980	5,842	566,997	2,916
Series C Convertible Preferred Stock [Member]
Other income (expense):
Accretion of discount on Series C convertible preferred stock and Series D convertible preferred stock			$ (1,820,000)
Series D Convertible Preferred Stock [Member]
Other income (expense):
Accretion of discount on Series C convertible preferred stock and Series D convertible preferred stock	(1,377,878)		(1,377,878)
Series C And Series D Convertible Preferred Stock [Member]
Other income (expense):
Accretion of discount on Series C convertible preferred stock and Series D convertible preferred stock	$ (70,244)		$ (70,244)

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net loss	$ (24,688,784)	$ (31,495,248)
Adjustments to reconcile net loss to net cash used in operating activities:
Asset impairment charges	12,981,142	16,135,000
Amortization and depreciation	2,411,580	5,408,467
Right-of-use asset amortization	79,896	69,597
Bad debt expense	324,558
Stock-based compensation	42,156	1,127,070
Loss on extinguishment of senior convertible note		3,616,372
Amortization of issuance costs on secured note	500
Increase in secured note from accrued interest	8,948
Change in fair value of warrant liability	286,057	(6,435,229)
Change in fair value of contingent consideration		2,864,551
Change in fair value of derivative liability	999,695	(7,435,687)
Loss on disposal of businesses, net		4,198,362
Gain on termination of lease		(799,901)
Changes in operating assets and liabilities:
Accounts receivable	88,485	(158,567)
Receivables reserved for users	462,465	40,638
Other receivables	39,308	(14,076)
Prepaid expenses and other current assets	417,592	588,519
Other non-current assets		680,409
Accounts payable and accrued expenses	1,293,525	1,947,924
Liabilities to customers	(439,459)	(2,448,734)
Deferred revenue	213,095	700,874
Operating lease liability	(71,491)	(116,391)
Net cash used in operating activities	(5,550,732)	(11,526,050)
Cash flows from investing activities:
Proceeds from the sale of Bethard Business		1,739,882
Proceeds from the sale of Spanish operations		1,200,000
Purchase of intangible assets	(62,790)
Purchase of equipment		(3,321)
Net cash used in (provided by) investing activities	(62,790)	2,936,561
Cash flows from financing activities:
Proceeds from issuance of secured note, net of issuance costs	1,405,000
Proceeds from equity financing, net of issuance costs	193,500	9,001,103
Proceeds from the exercise of pre-funded warrants	806,500	17,850
Proceeds from issuance of Series B redeemable preferred stock		1,000
Redemption of Series B redeemable preferred stock		(1,000)
Redemption of Series D redeemable preferred stock, net of issuance costs	(2,617,942)
Proceeds from issuance of Series E convertible preferred stock, net of issuance costs	1,000
Payment of dividends on 10% Series A cumulative redeemable convertible preferred stock	(334,380)	(601,884)
Issuance of common stock under the ATM, net of issuance costs	5,248,886
Repayment of senior convertible note		(2,778,427)
Repayment of notes payable and finance leases		(37,150)
Net cash provided by financing activities	4,702,564	5,601,492
Effect of exchange rate on changes in cash and restricted cash	21,371	1,026,933
Net decrease in cash and restricted cash	(889,587)	(1,961,064)
Cash and restricted cash, beginning of period	1,913,602	4,809,808
Cash and restricted cash	1,024,015	2,848,744
Cash	957,112	1,875,758
Restricted cash	66,903	972,986
CASH PAID FOR:
Interest		2,442,673
Income taxes		376
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Accretion of 10% Series A cumulative redeemable convertible preferred stock to redemption value	234,559	225,782
Undeclared dividend on 10% Series A cumulative redeemable convertible preferred stock	267,504
Increase in Senior Convertible Note from conversion of accounts payable and accrued interest		2,500,000
Conversion of Senior Convertible Notes to common stock		19,261,583
Conversion of Series C Convertible Preferred Stock to common stock	16,467,745
Common Stock issued to settle registration rights delay fee	12,078
Bifurcation of derivative	1,820,000
Accretion of the original discount on Series C convertible preferred stock	1,820,000
Deemed dividend on accretion of Series D convertible preferred Stock to redemption value	197,377
Dividend on Series C convertible preferred stock and Series D convertible preferred stock	589,421
Deemed dividend on make whole provision on Series C convertible preferred stock	4,805,990
Deemed dividend from down round provision on Series C convertible preferred stock and Series D convertible preferred stock	23,949,067
Accretion of the original preferred warrant discount on Series D convertible preferred stock	1,377,878
Bifurcation of derivative	422,143
Accretion of the original discount on Series D convertible preferred stock	422,143
Accretion of original derivative liability on extinguishment of Series C convertible preferred stock and Series D convertible preferred stock	3,236,090
Extinguishment of Series C convertible preferred stock and Series D convertible preferred stock	1,762,017
Accretion of issuance costs of Series D convertible preferred stock on extinguishment	143,621
Bifurcation of derivative on Series C Convertible Preferred Stock dividends and Series D convertible preferred stock	345,263
Accretion of discount on Series C convertible preferred stock and Series D convertible preferred stock	$ 70,244

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2024	Jun. 30, 2023
Current assets
Cash	$ 957,112	$ 1,745,298
Restricted cash	66,903	168,304
Accounts receivable, net	5,386	93,871
Receivables reserved for users	362,294	831,942
Other receivables	267,466	497,603
Prepaid expenses and other current assets	318,222	706,030
Total current assets	1,977,383	4,043,048
Equipment, net		20,013
Operating lease right-of-use asset	21,154	85,517
Intangible assets, net	2,645,396	13,324,627
Goodwill		4,491,223
Other non-current assets		136,863
TOTAL ASSETS	4,643,933	22,101,291
Current liabilities
Accounts payable and accrued expenses	8,353,041	7,106,194
Liabilities to customers	219,360	664,313
Deferred revenue	1,202,122	989,027
Operating lease liability – current	24,412	95,903
Total current liabilities	9,798,935	8,855,437
Long-term debt, net of issuance costs	1,414,448
Derivative liability	351,011
Warrant liability	651,783	365,726
Deferred income taxes
Total liabilities	12,216,177	9,221,163
Commitments and contingencies (Note 10)
Mezzanine equity:
Total Mezzanine equity	12,002,323	8,083,869
Stockholders’ equity (deficit)
Preferred stock value
Common stock $0.001 par value; 1,250,000 shares authorized, 1,145,980 and 9,461 shares issued and outstanding as of March 31, 2024 and June 30, 2023, respectively	1,146	9
Additional paid-in capital	190,970,211	173,465,492
Accumulated deficit	(206,114,689)	(181,425,905)
Accumulated other comprehensive loss	(4,431,235)	(4,667,164)
Total stockholders’ equity (deficit)	(19,574,567)	4,796,259
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT)	4,643,933	22,101,291
Series A Cumulative Redeemable Convertible Preferred Stock [Member]
Mezzanine equity:
Redeemable convertible preferred stock	8,585,932	8,083,869
Series B Redeemable Preferred Stock [Member]
Mezzanine equity:
Redeemable convertible preferred stock
Series C Convertible Preferred Stock [Member]
Mezzanine equity:
Redeemable convertible preferred stock	2,236,797
Stockholders’ equity (deficit)
Preferred stock value		14,805,438
Series D Convertible Preferred Stock [Member]
Mezzanine equity:
Redeemable convertible preferred stock	1,178,594
Stockholders’ equity (deficit)
Preferred stock value		2,618,389
Series E Redeemable Preferred Stock [Member]
Mezzanine equity:
Redeemable convertible preferred stock	$ 1,000