Item
8.01 Other Events.
Nasdaq
Compliance
As
previously disclosed, on April 11, 2022, the Company received a deficiency notification letter from the Listing Qualifications Staff
of the Nasdaq Stock Market (“Nasdaq”) indicating that the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2)
because the bid price for the Company’s common stock had closed below $1.00 per share for the previous thirty consecutive business
days.
On
June 7, 2022, the Company received a further letter from Nasdaq notifying the Company that for the last 30 consecutive business days,
the Company’s minimum Market Value of Listed Securities (“MVLS”) was below the minimum of $35,000,000 required for
continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(b)(2).
On
October 11, 2022, the Company received a third letter from Nasdaq notifying the Company that the Company’s common stock will be
delisted, and the Company’s Common Stock warrants traded under the symbols GMBLW and GMBLZ and the Company’s 10% Series A
cumulative redeemable convertible preferred stock traded under symbol GMBLP will no longer qualify for listing, and in that regard trading
of the Company’s common stock, Common Stock warrants and 10% Series A cumulative redeemable convertible preferred stock will be
suspended. The Company requested an appeal with the Panel and the hearing was held on November 17, 2022.
On
November 30, 2022, the Company received a determination from the Panel granting the Company’s request for the continued listing
of its common stock on the Capital Market tier of Nasdaq, subject to the Company evidencing compliance with Nasdaq’s minimum bid
price, and the $2,500,000 stockholders’ equity requirement, as set forth in Nasdaq Listing Rules 5550(a)(2) and 5550(b)(1), respectively,
on or before February 7, 2023 (which, as described below, was subsequently extended to March 7, 2023) and March 31, 2023, respectively,
and adhering to certain other conditions.
On
December 6, 2022, the Company received a fourth letter from Nasdaq notifying the Company that it has not regained compliance with Listing
Rule 5550(b)(2) requiring the Company to maintain a MVLS at a minimum of $35,000,000. This was addressed in the November 17, 2022, hearing
before the Panel where the Company presented on its plan to comply with the Rule 5550(b)(2) or alternative criteria and was granted continued
listing subject to the criteria noted above.
On
February 8, 2023 the Company received notice from the Panel updating its requirements to evidencing compliance with Nasdaq’s minimum
bid price, and the $2,500,000 stockholders’ equity requirement, as set forth in Nasdaq Listing Rules 5550(a)(2) and 5550(b)(1),
respectively, on or before March 7, 2023 and March 31, 2023.
On
March 9, 2023, the Company received a letter from the Panel indicating that the Company has regained compliance with the Minimum Bid
Price requirement concern.
The
Company’s continued listing is still subject to compliance with the $2,500,000 stockholders’ equity requirement, Listing
Rule 5550(b)(1). As previously granted by the Panel, the Company has until March 31, 2023 to demonstrate compliance.
The
Company is in the process of taking definitive steps to comply with all applicable conditions and criteria for continued listing on Nasdaq.
There can be no assurances, however, that the Company will be able to do so. The Company must satisfy the time frame granted by the Panel
or Nasdaq will provide written notification that its securities will be delisted.
Risk
Factor
The
Company is including the below update to its risk factors, for the purpose of supplementing and updating the disclosure contained in
its Annual Report on Form 10-K for the fiscal year ended June 30, 2022 filed with the Securities and Exchange Commission, or SEC, on
October 13, 2022, and our Quarterly Reports on Form 10-Q for the quarters ended September 30, 2022 and December 31, 2022 filed with the
SEC on November 14, 2022 and February 21, 2023, respectively.
If
we fail to regain compliance with the continued listing requirements of Nasdaq, our common stock may be delisted and the price of our
common stock and our ability to access the capital markets could be negatively impacted.
On
April 11, 2022, we received a deficiency notification letter from the Listing Qualifications Staff of the Nasdaq Stock Market (“Nasdaq”)
indicating that we were not in compliance with Nasdaq Listing Rule 5550(a)(2) because the bid price for our common stock had closed below
$1.00 per share for the previous 30 consecutive business days.
On
June 7, 2022, the Company received a further letter from Nasdaq notifying the Company that for the last 30 consecutive business days,
the Company’s minimum Market Value of Listed Securities (“MVLS”) was below the minimum of $35,000,000 required for
continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(b)(2).
On
October 11, 2022, we received a third letter from Nasdaq notifying us that our common stock will be delisted, and our Common Stock warrants
traded under the symbols GMBLW and GMBLZ and our 10% Series A cumulative redeemable convertible preferred stock traded under symbol GMBLP
will no longer qualify for listing, and in that regard trading of our common stock, Common Stock warrants and 10% Series A cumulative
redeemable convertible preferred stock will be suspended. We requested an appeal with the Nasdaq Hearings Panel (the “Panel”)
and the hearing was held on November 17, 2022.
On
November 30, 2022, we received a determination from the Panel granting our request for the continued listing of our common stock on the
Capital Market tier of Nasdaq, subject to our evidencing compliance with Nasdaq’s minimum bid price, and the $2,500,000 shareholders’
equity requirement, as set forth in Nasdaq Listing Rules 5550(a)(2) and 5550(b)(1), respectively, on or before February 7, 2023 (which,
as described below, was subsequently extended to March 7, 2023) and March 31, 2023, respectively, and adhering to certain other conditions
and requirements.
On
December 6, 2022, we received a fourth letter from Nasdaq notifying us that we had not regained compliance with Listing Rule 5550(b)(2)
requiring us to maintain a MVLS at a minimum of $35,000,000. This was addressed in the November 17, 2022, hearing before the Panel where
we presented on our plan to comply with the Rule 5550(b)(2) or alternative criteria and were granted continued listing subject to the
criteria noted above.
On
February 8, 2023, we received a further notice from Nasdaq notifying the Company that it was granted continued listing of its common
stock on the Capital Market tier of the Nasdaq, subject to the Company evidencing compliance with Nasdaq’s minimum bid price and
$2,500,000 stockholders’ equity requirement, as set forth in Nasdaq Listing Rules 5550(a)(2) and 5550(b)(1), respectively, on or
before March 7, 2023 and March 31, 2023, respectively, and adhering to certain other conditions and requirements.
As
part of the compliance plan, we are negotiating with the Holder to further restructure the Company’s outstanding Senior Convertible
Note, including the derivative liability.
On
January 26, 2023, the Company’s stockholders approved proposals, among others, regarding (1) the potential issuance of an excess
of 19.99% of our outstanding common stock upon the conversion of the Company’s outstanding Senior Convertible Note, (2) the potential
issuance of our outstanding common stock upon the conversion of a new perpetual convertible preferred stock to be issued in exchange
for the Senior Convertible Note, as part of the Company’s approved plan of compliance with the Nasdaq Listing Rules, and (3) a
reverse stock split of our common stock at a ratio of not less than one-for-twenty (1-for-20) and not more than one-for-one hundred (1-for-100),
with our board of directors having the discretion as to the exact ratio to be set within the above range, without a corresponding reduction
in the total number of authorized shares of common stock.
On
February 22, 2023, the Company effected the Reverse Stock Split of its common stock trading on Nasdaq.
On
March 9, 2023, the Company received a letter from the Panel indicating that the Company has regained compliance with the Minimum Bid
Price requirement concern.
While
we are exercising diligent efforts to comply with the Panel’s remaining terms of compliance and maintain the listing of its common
stock on Nasdaq, there can be no assurance that we will be able to regain or maintain compliance with Nasdaq listing standards, or that
our securities will not be delisted.
Any
failure to regain and maintain compliance with the continued listing requirements of Nasdaq could result in delisting of our common stock
from Nasdaq and negatively impact our company and holders of our common stock, including by reducing the willingness of investors to
hold our common stock because of the resulting decreased price, liquidity and trading of our common stock, limited availability of price
quotations and reduced news and analyst coverage. Delisting may adversely impact the perception of our financial condition, cause reputational
harm with investors, our employees and parties conducting business with us and limit our access to debt and equity financing.
Further
debt to equity conversions under our Senior Convertible Note and the exercise of our outstanding options and warrants will result in
significant dilution to our stockholders.
Pursuant
to the debt for equity exchanges under our Senior Convertible Note that we have recently completed, the Holder exchanged $19,261,583
in aggregate principal amount of the Senior Convertible
Note for an aggregate of 2,242,143 shares
of our common stock, at conversion prices equal to 90% of the lowest VWAP (as defined in the Senior Convertible Note) of our common stock
for a trading day during the five (5) consecutive trading day period ending, and including, the applicable date that the conversion price
was lowered for purposes of a conversion, in accordance with Section 7(g) of the Senior Convertible Note.
We
intend to continue to effect additional debt for equity exchanges in the foreseeable future. Such exchanges will continue to result in
our issuing a substantial number of shares of common stock at implied issuance prices that are discounted to the market price, which
will result in significant dilution to our stockholders.
Also,
as of December 31, 2022, we had outstanding options to purchase up to 7,635 shares of our common stock and subsequently we have entered
into an agreement to issue an award of 25,000 time-based stock options with our new CEO, for options to purchase a total of 32,635 shares
of common stock. In addition, as of December 31, 2022, we had outstanding warrants to purchase up to approximately 562,006 shares of
our common stock and we had pre-funded warrants to purchase another 112,840 shares of our common stock for a total of 674,846 warrants
outstanding as of December 31, 2022. Subsequent to December 31, 2022, 112,840 pre-funded warrants were exercised, increasing the number
of shares of common stock outstanding by 112,840 and reducing the total of outstanding warrants to 562,006. The exercise of a significant
portion of our outstanding options and warrants may result in significant dilution to our stockholders.
Exhibit
Number |
|
Exhibit
Description |
| 104 |
|
Cover
Page Interactive Data File (embedded within the Inline XBRL document). |
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 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 amount of debt for equity exchanges we will
be able to effect, the conversion price, and for what period of time such exchanges will continue to occur, if at all. 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.
