GMBL Esports Entertainment Group Inc

Item 1.01 Entry into a Material Definitive Agreement

On February 14, 2023, Esports Entertainment Group, Inc. (“Company”) and Gameday Group PLC (“Purchaser”) entered into a share purchase agreement (“Purchase Agreement”) for the sale of the Company’s Bethard business, an online operator of casino and sportsbook brands that is licensed in Malta and Sweden. Under the terms of the Purchase Agreement, the Purchaser will acquire the shares of Prozone Limited, a company registered in Malta for total purchase consideration determined between the parties of approximately €9.5 million (approximately $10.2 million using exchange rates in effect on the date of the Purchase Agreement) comprised of €1.65 million (approximately $1.77 million using exchange rates in effect on the date of the Purchase Agreement) of cash proceeds payable to the Company at closing, with an additional €6.5 million (approximately $7.0 million using exchange rates in effect on the date of the Purchase Agreement) of purchase consideration attributed to the Company’s release from payment of its contingent consideration liability from the Bethard acquisition. The purchaser of the Bethard business will also assume liabilities of approximately €1.2 million (approximately $1.3 million using exchange rates in effect on the date of the Purchase Agreement). The terms of sale allow for a cash holdback of €0.15 million (approximately $0.16 million using exchange rates in effect on the date of the Purchase Agreement) which may be retained by the purchaser should liabilities exceed agreed upon amounts in the Purchase Agreement.

The closing date (“Closing Date”) of the sale of the Bethard Business is subject to closing terms and conditions as outlined in the Purchase Agreement. The Purchase Agreement sets forth a two-week period for the Company to satisfy certain conditions for completion of sale following the signing of the Purchase Agreement.

The Company entered into an Amendment and Waiver Agreement (“Amendment”) on February 16, 2023 as a condition to the closing of the sale of the Bethard business. The Amendment requires the Company to deposit 50% of the proceeds from the sale of the Bethard business in a bank account in favor of the holder (the “Debt Holder”) of its Senior Convertible Note, dated February 22, 2022 (the “Senior Convertible Note”). The Amendment also requires the Company to deposit 50% of the proceeds of any permitted future sale of assets or any subsequent debt or equity offer or sale (a “Securities Transaction”) and 100% of the proceeds of any additional indebtedness incurred in the future, into such bank account in favor of the Debt Holder, or, at the option of the Debt Holder, redeem amounts under the Senior Convertible Note using such proceeds.

The Amendment also modifies the Senior Convertible Note to increase the principal balance by $2.95 million for additional interest and other amounts previously recorded by the Company as liabilities to the Debt Holder, as well as for fees for the Amendment. The Amendment further provides for a voluntary reduction in the Conversion Price (as defined in the Senior Convertible Note) when the Company issues or is deemed to issue common stock in a future registered offering at a price below the Conversion Price then in effect, to the lower issuance price in such offering, subject to certain exceptions. The Amendment also provides rights to the Debt Holder to participate in future Securities Transactions for a period of two years from the later of the date of the Amendment and the date that no payment amounts due to the Debt Holder remain outstanding.

This summary of the Purchase Agreement and Amendment does not purport to be complete and is qualified in its entirety by reference to the provisions of the Purchase Agreement and Amendment, copies of which are filed as Exhibit 10.1 and Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.