Esports Entertainment Group Inc. has announced its restructuring plan, aiming to drive accelerated growth and increase operational efficiency. The company will be divesting or closing non-core business lines to streamline its operations while also reducing headcount from 158 full-time employees at the end of 2022 to 99 full-time employees. They plan to lower operating expenses by over $4.0 million annually, which includes pinpointing further opportunities for cost savings. Esports Entertainment Group Inc. plans to have a renewed focus on esports wagering through new betting content and offerings.

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The Company's Restructuring Plan

Esports Entertainment Group Inc. announced its restructuring plan to streamline its operations, drive accelerated growth, and increase operational efficiency. To lower operating expenses by over $4.0 million annually, they will divest or close non-core business lines and reduce headcount.

The company completed the sale of the eSports Spanish Gaming license for $1.2 million, Bethard business for $1.7 million in cash, and initiated the liquidation of Argyll Entertainment, an online gambling business in the UK with recurring losses. They have also reduced full-time employees from 158 to 99, expected to decline annualized salaries by approximately 36% based on the actions being taken thus far.

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The Renewed Focus on Esports Wagering

Esports Entertainment Group Inc. plans to have a renewed focus on esports wagering through new betting content and offerings. They plan to expand their business-to-consumer (B2C) esports wagering services through its Idefix platform, and are in the final stages of integrating the Oddin.gg iFrame solution on their platform for esports wagering. They also plan to offer an "esports-first," Idefix-based business-to-business (B2B) platform for sale and distribution to third parties.

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Aggregating and Supplying B2B Esports Solutions

Esports Entertainment Group Inc. expects to direct its attention toward aggregating and supplying B2B esports solutions and content for the esports and esports gambling industries in the US market. The company plans to direct significant attention toward bespoke e-simulator tournaments and related e-simulator content. Among the markets they plan to target, they believe there is a significant near-term opportunity within the education market, where there has been considerable growth across both domestic and international college and university campuses as well as K-12 schools.

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Balance Sheet Improvement and Management Restructuring

Esports Entertainment Group Inc. has dramatically enhanced its balance sheet by reducing debt and other liabilities by approximately $27.1 million since December 31, 2022. The principal amount of the Senior Convertible Note was reduced by $16.3 million, and they eliminated approximately $7.5 million of debt and liabilities by selling Bethard business. They also terminated a lease, resulting in a $0.8 million reduction in lease liability. The company is working to convert additional debt to preferred equity, which they believe illustrates the lender's confidence in the long-term outlook for the business.

Michael Villani was promoted to interim CFO, bringing deep experience in corporate finance and capital markets. He has been instrumental in the restructuring of the business and resulting cost reductions. With this restructuring plan, Esports Entertainment Group Inc. is poised to establish a dominant position within the high-growth industry and drive long-term profitability.

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Members of LevelFields received the alert of this event on April 17, 9:55 AM ET

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