Item
1.01 Entry Into a Material Definitive Agreement.
On April 14, 2020, Esports Entertainment Group,
Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Maxim Group
LLC on behalf of itself and Joseph Gunnar & Co., LLC (collectively, the “Underwriters”),
with respect to the issuance and sale in an underwritten public offering (the “Offering”) by the Company of units of
its securities for aggregate gross proceeds of $8,415,000. Each unit consists of one share of common stock, par value $0.001 per
share (the “Common Stock”) and two warrants (the “Unit A Warrants” and “Unit B Warrants” and
together with the Common Stock, the “Securities”), with each to purchase one share of Common Stock, at a public offering
price of $4.25 per unit. The warrants will have a per share exercise price of $4.25 and are exercisable immediately. The Unit A
Warrant will expire five years from the date of issuance. The Unit B Warrants will expire 12 months from the date of issuance.
The Common Stock and the Unit A Warrants have been approved to list on the Nasdaq Capital Market under the symbols GMBL and GMBLW,
respectively, and are expected to begin trading on April 14, 2020. The Unit B Warrant will not trade.
Pursuant to the Underwriting Agreement, the
Company granted the Underwriters a 45-day option to purchase up to an additional 297,000 shares of our common stock and/or warrants
to purchase an aggregate of 594,000 shares of our common stock to cover over-allotments, if any. Maxim Group LLC is acting as lead
book-running manager for the Offering and Joseph Gunnar & Co., LLC is acting as co-book-running manager for the Offering.
The Underwriting Agreement contains customary
representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the
Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, other obligations of the
parties and termination provisions. In addition, pursuant to the terms of the Underwriting Agreement and related “lock-up”
agreements, the Company, each director and executive officer of the Company, and certain stockholders have agreed with the Underwriters
not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our Common Stock or securities convertible
into Common Stock for a period of 365 days after the date on which a final prospectus relating to the Offering (“the Final
Prospectus”) filed with the Securities and Exchange Commission (the “SEC”), in the case of our directors and
officers, 180 days from the date of the Final Prospectus, in the case of certain of our principal stockholders. The Underwriters
also obtained certain lock-up agreements from certain debt holders whose indebtedness will convert into securities of the Company
at closing.
The
Offering is expected to close on April 16, 2020, subject to the satisfaction of customary closing conditions.
The
Company expects to receive approximately $7,234,000 in net proceeds from the Offering after deducting the underwriting discount
and other estimated offering expenses payable by the Company (or, if the over-allotment option is exercised in full, approximately
$8,395,000). The Company expects to use the net proceeds of the Offering to develop and launch its skill-based video game tournaments
for play on mobile devices, PCs and video game consoles, to obtain an online gaming license from, and establish operations in,
Malta, to obtain an online gaming license from, and establish operations in, an Asian country to be determined, to upgrade sales
and marketing capabilities including but not limited to professional relations and adding additional staff, and for general working
capital purposes, including acquisitions.
The
Unit A Warrants and Unit B Warrants will be issued pursuant to a warrant agency agreement to be entered into by and between the
Company and VStock Transfer, LLC, as warrant agent.
The
SEC declared effective a registration statement on Form S-1 (File No. 333-231167) relating to the Securities on April 14, 2020.
The
Underwriting Agreement is included as an exhibit to this Current Report on Form 8-K to provide investors and security holders
with information regarding its terms. The representations, warranties and covenants contained in the Underwriting Agreement were
made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements,
and may be subject to limitations agreed upon by the contracting parties.
The
foregoing description of the Underwriting Agreement and the Unit A Warrants and the Unit B Warrants does not purport to be complete
and is qualified in its entirety by reference to the full text of the Underwriting Agreement and form of Warrant Agency Agreement,
which are filed as Exhibit 1.1 and 4.1 hereto, respectively, and are incorporated herein by reference.
