Bethard Will Be Sold by Esports Entertainment Group for €9.5 Million

The operator of online casino and sportsbook brands licenced by Malta and Sweden, Bethard iGaming, which the company acquired in July 2021, signed a share purchase agreement on February 14, 2023, according to a report from the Malta-based esports and online gambling company Esports Entertainment Group on February 17.

The whole price is agreed:

According to the parties' agreement, the total purchase price in the purchase agreement will be around €9.5 million. This includes €1.65 million in cash income that will be paid to the company at closing and an additional €6.5 million purchase payment that will relieve the company of its contingent liability related to the acquisition of Bethard.

Additionally, the buyer of the Bethard company will take on a roughly €1.2 million debt. In the event that the financial obligation exceeds the amount specified in the purchase agreement, the buyer may keep up to €0.15 million in cash under the provisions of the purchase agreement. Subject to customary closing requirements, the sale of the Bethard company is anticipated to close two weeks after the acquisition agreement is signed.

Agreement for Modification and Waiver:

However, the firm signed an Amendment and Waiver Agreement on February 16 in order to fulfil a requirement for the effective completion of the sale of the Bethard company. Effective February 22, 2022, the Company shall deposit into a bank account for the benefit of the holder of its Senior Convertible Note 50% of the net proceeds from the sale of the Bethard business.

Additionally, per this agreement, the company must deposit 100% of the proceeds of any additional debt incurred in the future, as well as 50% of the proceeds of any permitted future property sales, offers, or sales of debt or equity, in such a bank account for the benefit of the debt holder, or, at the debt holder's discretion, use such income to redeem amounts under the Senior Convertible Note.

The Senior Convertible Note is also amended to provide for an increase in principle of $2.95 million to pay for additional interest and other amounts that have been previously recognised by the Company as financial liabilities to the Debt Holder, as well as amendment costs.

The Amendment also provides, subject to certain exceptions, a voluntary reduction of the conversion price (as defined in the Senior Convertible Note) in the event that the Company delivers or is deemed to deliver Common Stock in a Future Registered Offering at a Cost Below the Conversion Price Then In Effect for a Lower Issue Price. The amendment also grants the debt holder the right to participate in future securities transactions for a period of two years following the later of the amendment's effective date and the day on which the debt holder is no longer due any payments.

Reduced debt:

Following the corporation's prior announcement on December 7, 2022 that it was formally shutting its Argyll company, a licenced gaming establishment in the UK, the anticipated sale of the Bethard business comes following that announcement. Following the sale of the Bethard company and the formal shutdown of the Argyll firm, the company plans to concentrate on its Lucky Dino iGaming brands that use the Idefix platform, which is handled by Esports.

Additionally, the business disclosed:

At December 31, 2022, the reporting unit for its iGaming business had the most goodwill impairment. A significant non-cash charge for the amount of the impairment will be recorded in the company's statement of operations for the fiscal quarter that concluded on December 31, 2022. The Senior Convertible Note's outstanding principal will reduce by $16.7 million as a consequence of conversions into common stock. Prior to accounting for the consequences of the Amendment, the corporation reduced its debt from $32.2 million at September 30, 2022 to $15.5 million at February 16, 2023;
Real property lease termination on January 26, 2023, eliminating $0.8 million of the total remaining lease obligation over the lease term. Completed sale of Spanish gambling licence on January 18, 2023, resulting in company proceeds of €2.1 million, of which 50% will be deposited into a bank account for the benefit of debt holder.
CEO Alex Igelman expressed his satisfaction with the efforts being made to cut debt and concentrate on the company's core iGaming and esports businesses. We are still dedicated to creating a top-tier, globally accessible esports gambling organisation that offers strategic services and esports content to both existing players in the sector and those looking to break into it. The speed and efficiency with which top management carried out these crucial initiatives gives me great hope and satisfaction.