Esports Entertainment Group Announces Agreement to Exchange $15 Million Senior Convertible Note to Unsecured Convertible Preferred Stock

Expects to report elimination of substantially all debt

St. Julians, Malta--(Newsfile Corp. - April 20, 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 content and solutions provider, today announced it has entered into an agreement with Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B ("Alto"), the holder of the Senior Convertible Note to exchange the remaining balance of the Senior Convertible Note into new unsecured, Series C Convertible Preferred Stock immediately after its next capital raise. Once completed, this transaction, in combination with prior transactions effected earlier this year, will reduce nearly $42 million of the Company's liabilities, resulting in a substantially debt free balance sheet and material progress towards addressing the Company's remaining Nasdaq listing deficiencies. The closing of the exchange transaction is subject to the Company's completion of a capital raise that will allow it to demonstrate compliance with the minimum of $2.5 million stockholders' equity requirement outlined in the Nasdaq Stock Exchange's Listing Rules, and also is subject to customary closing conditions.

"We appreciate the tremendous support of our senior lender, who has agreed to exchange their Senior Convertible Note to preferred equity, which we believe illustrates their confidence in the outlook for the business, while improving our balance sheet, enhancing cash flow, and providing us greater financial flexibility to execute our new growth strategy," stated Alex Igelman, CEO of Esports Entertainment. "I recently outlined a series of initiatives, well underway, to focus our efforts on key business lines within the iGaming, esports and e-simulator markets, while simultaneously streamlining operations. Through the actions already in place, we expect to reduce our operating expenses by over $4.0 million on an annualized basis and have identified further opportunities to reduce costs going forward. Including this latest note exchange, we have also reduced debt and other liabilities by over $42 million, year to date. As a result, I believe the company's financial and operational outlook is back on track to capitalize on the esports opportunities ahead of us."

Waqas Khatri, Director of Alto, said, "We are excited to support this debt reduction transaction, which not only demonstrates our confidence in the Company's leadership, direction, and fiscal discipline but also reflects our belief in the new management team's cohesive vision for the Company's technology assets. We applaud the Company's more operationally efficient business model and the team's focus on creating long-term value and profitability. This transaction is a testament of our commitment to the Company, and we are honored to be a part of its success story."

The material terms of the exchange agreement, the terms of the Series C Preferred Stock to be issued, and the transactions contemplated thereby are described in the Company's Form 8-K, which has been filed with the U.S. Securities and Exchange Commission and is available on the Company's website.

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

Esports Entertainment Group is a leading, global MGA-licensed, "esports-first" iGaming B2C operator and a US-focused B2B aggregator and supplier of esports solutions and e-simulator content. The Company owns and operates the world's leading esport venue management system, currently deployed in 810 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 e-simulator content, which features competitive, short-cycle head-tohead 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 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.

Contact:

Crescendo Communications, LLC
Tel: (212) 671-1021
Email: [email protected]

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