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Esports Group secures $1.42 million note, amends stock terms

Published 03/14/2024, 05:48 AM
© Reuters.

Esports Entertainment Group (NASDAQ: GMBL) disclosed the issuance of a secured promissory note valued at approximately $1.42 million, alongside amendments to its Series C and D Convertible Preferred Stock. The agreement, dated March 7, 2024, provides the holder with a first priority security interest in all of the company's tangible and intangible personal property.

The note carries an annual interest rate of 10%, to be added quarterly to the principal balance, and is set to mature on March 7, 2026. Should the company default, the interest rate would increase to 12%. This transaction includes standard default terms, such as failure to pay and breach of covenants, and the company has also agreed to indemnify the note holder as described in the agreement.

The financial maneuvering by Esports Entertainment Group is a strategic step as the company navigates its capital structure amidst the dynamic conditions of the esports industry. The move could potentially provide the company with the flexibility to manage its finances and invest in growth opportunities.

Investors and market watchers are observing the implications of this financial arrangement, as it reflects the company's approach to securing additional capital and restructuring its existing obligations. The secured note and the amended terms of the preferred stock represent a critical element in the company's financial planning.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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