ESPORTS ENTERTAINMENT GROUP INC

Previous wording

On February 13, 2024, the Company announced it was voluntarily delisting from the Nasdaq Capital Markets, LLC (“Nasdaq”). On February 16, 2024, the Company received notice from Nasdaq that it was being suspended on Nasdaq on opening of trading on February 21, 2024. As a result of the suspension, on February 21, 2024 the Company began trading on the Over the Counter Market (the “OTC”). The Company is currently trading on the “Pink Market” of the OTC. On February 27, 2024, the Company filed a Form 25 with the SEC to effect the delisting of its securities from Nasdaq. At the time of announcing its delisting and suspension the Company was not in compliance with the minimum of $2,500,000 stockholders’ equity requirement (the “Equity Rule”), as set forth in Nasdaq Listing Rules 5550(a)(2) and 5550(b)(1). The Company is now subject to listing requirements of the OTC and expects to be trading on the OTCQB tier of the OTC upon filing of this report.

Current wording

On February 13, 2024, the Company announced it was voluntarily delisting from the Nasdaq Capital Markets, LLC (“Nasdaq”). On February 16, 2024, the Company received notice from Nasdaq that it was being suspended on Nasdaq on opening of trading on February 21, 2024. As a result of the suspension, on February 21, 2024 the Company began trading on the Over the Counter Market (the “OTC”). On February 27, 2024, the Company filed a Form 25 with the SEC to effect the delisting of its securities from Nasdaq. The Company is now subject to listing requirements of the OTC and is trading on the OTCQB tier level of the OTC.

Previous wording

The following tables set forth a summary of our financial results for the periods indicated and are derived from our unaudited condensed consolidated financial statements for the three and six months ended December 31, 2023 and 2022, respectively:

Current wording

The following tables set forth a summary of our financial results for the periods indicated and are derived from our unaudited condensed consolidated financial statements for the three and nine months ended March 31, 2024 and 2023, respectively:

Previous wording

This report includes Adjusted EBITDA, which is a non-U.S. GAAP (“U.S. GAAP” is defined as accounting principles generally accepted in the United States of America) financial performance measure that we use to supplement our results presented in accordance with U.S. GAAP. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. The Company uses this non-U.S. GAAP financial measure for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that it provides useful information about operating results, enhances the overall understanding of past financial performance and future prospects, and allows for greater transparency with respect to key metrics used by management in its financial and operational decision making. Adjusted EBITDA, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry. We define Adjusted EBITDA as earnings (loss) before, as applicable to the particular period, interest expense; income taxes; depreciation and amortization including right of use asset amortization; stock-based compensation; cost of acquisitions; asset impairment charges; loss on extinguishment of senior convertible note; loss on conversion of senior convertible note; change in fair value of derivative liability; change in fair value of warrant liability; change in fair value of contingent consideration; and other non-operating income (loss), net and certain other non-recurring, non-cash or non-core items, as described in the reconciliation below, if not covered above.

Current wording

This report includes Adjusted EBITDA, which is a non-U.S. GAAP (“U.S. GAAP” is defined as accounting principles generally accepted in the United States of America) financial performance measure that we use to supplement our results presented in accordance with U.S. GAAP. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. The Company uses this non-U.S. GAAP financial measure for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that it provides useful information about operating results, enhances the overall understanding of past financial performance and future prospects, and allows for greater transparency with respect to key metrics used by management in its financial and operational decision making. Adjusted EBITDA, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry. We define Adjusted EBITDA as earnings (loss) before, as applicable to the particular period, interest expense; income taxes; depreciation and amortization, right of use asset amortization; stock-based compensation; legal settlements; loss on disposal of assets; cost of acquisitions; asset impairment charges; loss on extinguishment of senior convertible note; loss on conversion of senior convertible note; gain on termination of lease; change in fair value of derivative liability; change in fair value of warrant liability; change in fair value of contingent consideration; and other non-operating income (loss), net, and certain other non-recurring, non-cash or non-core items, as described in the reconciliation below, if not covered above.

Previous wording

Adjusted EBITDA excludes certain expenses that are required in accordance with U.S. GAAP because they are non-recurring items (for example, in the case of transaction-related costs), non-cash expenditures (for example, in the case of depreciation and amortization, stock-based compensation, legal settlements, asset impairment charges, change in fair value of derivative liability and change in fair value of warrant liability), or are not related to our underlying business performance (for example, in the case of interest income and expense and litigation settlement and related costs).

Current wording

Adjusted EBITDA excludes certain expenses that are required in accordance with U.S. GAAP because they are non-recurring items (for example, in the case of transaction-related costs or legal settlements and related costs), non-cash expenditures (for example, in the case of depreciation and amortization, stock-based compensation, asset impairment charges, change in fair value of derivative liability and change in fair value of warrant liability), or are not related to our underlying business performance (for example, in the case of interest income and expense).

Previous wording

Net revenue totaled $2.6 million in the three months ended December 31, 2023, a decrease of $3.8 million, or 59%, from the $6.4 million recorded in the three months ended December 31, 2022. The decrease is primarily attributable to the sale of the Bethard Business on February 24, 2023 and the wind down and eventual liquidation of the Argyll entities where revenue producing operations were ceased on December 8, 2022. The iGaming operations of Lucky Dino, Bethard and Argyll (before Bethard and Argyll were disposed of) were also impacted by worsening investment and market conditions and regulatory changes in the Finland and the UK from fiscal 2023, and the worsening investment and market conditions. The decrease in the iGaming segment revenue was $3.7 million, falling from $5.5 million to $1.8 million. Revenue in the EEG Games segment also decreased $0.1 million from $0.9 million to $0.8 million due to the timing of hardware installations.

Current wording

Net revenue totaled $1.7 million in the three months ended March 31, 2024, a decrease of $2.5 million, or 60%, from the $4.2 million recorded in the three months ended March 31, 2023. The decrease is primarily attributable to the sale of the Bethard Business on February 24, 2023 and the wind down and eventual liquidation of the Argyll entities where revenue producing operations were ceased on December 8, 2022. The iGaming operations of Lucky Dino, Bethard and Argyll (before Bethard and Argyll were disposed of) were also impacted by worsening investment and market conditions and regulatory changes in the Finland and the UK from fiscal 2023, and the worsening investment and market conditions. The decrease in the iGaming segment revenue was $2.5 million, falling from $3.5 million to $1.0 million. Revenue in the EEG Games segment remained flat at 0.7 million.

Previous wording

Cost of revenue totaled $0.7 million in the three months ended December 31, 2023, a decrease of $1.7 million, or 70%, from the $2.4 million recorded in the three months ended December 31, 2022. The decrease is primarily attributable to the previously mentioned disposals of the Bethard Business and the Argyll operating entities and the decrease in the iGaming operations of Lucky Dino in the EEG iGaming segment and includes corresponding EEG iGaming decreases in line with revenue. The iGaming decreases include $1.0 million lower payment processing fees, platform costs, gaming duties and costs related to revenue sharing arrangements, $0.2 million lower game provider expenses and $0.5 million lower other direct expenses related to the delivery of services.

Current wording

Cost of revenue totaled $0.5 million in the three months ended March 31, 2024, a decrease of $0.8 million, or 62%, from the $1.3 million recorded in the three months ended March 31, 2023. The decrease is primarily attributable to the previously mentioned disposals of the Bethard Business and the Argyll operating entities and the decrease in the iGaming operations of Lucky Dino in the EEG iGaming segment and includes corresponding EEG iGaming decreases in line with revenue. The iGaming decreases include $0.6 million lower payment processing fees, platform costs, gaming duties and costs related to revenue sharing arrangements, $0.1 million lower game provider expenses and $0.1 million lower other direct expenses related to the delivery of services.

Previous wording

Sales and marketing expense totaled $0.7 million in the three months ended December 31, 2023, a decrease of $1.1 million, or 61%, compared to the $1.8 million recorded for the three months ended December 31, 2022. The decrease was primarily attributable to $1.1 million lower affiliate costs related to the EEG iGaming segment.

Current wording

Sales and marketing expense totaled $0.3 million in the three months ended March 31, 2024, a decrease of $0.6 million, or 67%, compared to the $0.9 million recorded for the three months ended March 31, 2023. The decrease was primarily attributable to $0.9 million lower affiliate costs related to the EEG iGaming segment, offset by $0.3 million higher service partners expense.

Previous wording

General and administrative expense totaled $4.8 million for the three months ended December 31, 2023, a decrease of $2.8 million, or 37%, compared to the $7.6 million recorded for the three months ended December 31, 2022. The decrease was primarily attributable to decreases of $1.5 million in payroll costs, $0.8 million depreciation and amortization, and $0.3 million in information technology related costs from the EEG iGaming segment, decreases of $0.5 million in payroll costs and $0.1 million related to other general and administrative costs from the EEG Games segment, offset by a $0.4 million increase in other general and administrative costs in corporate expenses.

Current wording

General and administrative expense totaled $2.8 million for the three months ended March 31, 2024, a decrease of $4.6 million, or 62%, compared to the $7.4 million recorded for the three months ended March 31, 2023. The decrease was primarily attributable to decreases of $0.7 million in payroll costs, $1.3 million depreciation and amortization, $0.3 million in information technology related costs and $0.3 million other general and administrative costs from the EEG iGaming segment, decreases of $0.6 million in payroll costs and $0.2 million related to other general and administrative costs from the EEG Games segment, and decreases of $0.9 million in professional fees, $0.2 million in share based compensation expense and $0.1 million in legal fees in corporate expenses.

Previous wording

The other income (expense), net for the three months ended December 31, 2022 results primarily from $2.0 million of interest expense related to the Senior Convertible Note and $2.9 million for the change in the fair value of the contingent consideration due as part of the Bethard transaction from the prior year, offset by other income primarily made up of $8.6 million for the change in the fair value of the derivative liability on Senior Convertible Note due to its elimination on the exchange to Series C Convertible Preferred Stock, $5.0 million from the reduction in fair value of the warrant liability. The driver of the change in fair value of the warrants was a decrease of $3.0 million for the September 2022 Warrants issued as part of the September 2022 Offering that decreased from the $5.3 million valued on issuance at September 19, 2022 to $2.3 million at December 31, 2022, a decrease of $1.9 million for the March 2022 Warrants from $2.1 million at June 30, 2022 to $0.2 million at December 31, 2022 and a decrease of $0.1 million in other warrants.

Current wording

The other expense for the three months ended March 31, 2023 resulted primarily from $0.5 million of interest expense related to the Senior Convertible Note, $1.2 million for the change in the fair value of the derivative liability on Senior Convertible Note, $3.6 million for the loss on extinguishment of the Senior Convertible Note related to the conversion of $19.3 million of the Senior Convertible note into 5,606 shares of our common stock and $0.6 million other non-operating loss, offset by other income primarily made up of $1.4 million from the reduction in fair value of the warrant liability and $0.8 million gain on the termination of the UCLA lease. The driver of the change in fair value of the warrants was a decrease of $1.4 million for the September 2022 Warrants issued as part of the September 2022 Offering, offset by an increase of $0.2 million for the March 2022 Warrants.

Previous wording

Net revenue totaled $5.3 million in the six months ended December 31, 2023, a decrease of $10.7 million, or 67%, from the $16.0 million recorded in the six months ended December 31, 2022. The decrease is primarily attributable to the sale of the Bethard Business on February 24, 2023 and the wind down and eventual liquidation of the Argyll entities where revenue producing operations were ceased on December 8, 2022. The iGaming operations of Lucky Dino, Bethard and Argyll (before Bethard and Argyll were disposed of) were also impacted by worsening investment and market conditions and regulatory changes in the Finland and the UK from fiscal 2023, and the worsening investment and market conditions. The decrease in the iGaming segment revenue was $10.3 million falling from $14.1 million to $3.8 million. Revenue in the EEG Games segment also decreased $0.4 million from $1.9 million to $1.5 million due to the disposal of EGL and the timing of hardware installations.

Current wording

Net revenue totaled $7.0 million in the nine months ended March 31, 2024, a decrease of $13.2 million, or 65%, from the $20.2 million recorded in the nine months ended March 31, 2023. The decrease is primarily attributable to the sale of the Bethard Business on February 24, 2023 and the wind down and eventual liquidation of the Argyll entities where revenue producing operations were ceased on December 8, 2022. The iGaming operations of Lucky Dino, Bethard and Argyll (before Bethard and Argyll were disposed of) were also impacted by worsening investment and market conditions and regulatory changes in the Finland and the UK from fiscal 2023, and the worsening investment and market conditions. The decrease in the iGaming segment revenue was $12.8 million falling from $17.6 million to $4.8 million. Revenue in the EEG Games segment also decreased $0.4 million from $2.6 million to $2.2 million due to the disposal of EGL and the timing of hardware installations.

Previous wording

Cost of revenue totaled $1.3 million in the six months ended December 31, 2023, a decrease of $4.8 million, or 79%, from the $6.1 million recorded in the six months ended December 31, 2022. The decrease is primarily attributable to the previously mentioned disposals of the Bethard Business and the Argyll operating entities and the decrease in the iGaming operations of Lucky Dino in the EEG iGaming segment and includes corresponding EEG iGaming decreases in line with revenue. The iGaming decreases include $3.2 million lower payment processing fees, platform costs, gaming duties and costs related to revenue sharing arrangements, $0.5 million lower game provider expenses and $1.0 million lower other direct expenses related to the delivery of services. EEG Games also had a reduction in costs with $0.1 million lower hosting, hardware and equipment costs and other direct expenses.

Current wording

Cost of revenue totaled $1.8 million in the nine months ended March 31, 2024, a decrease of $5.6 million, or 76%, from the $7.4 million recorded in the nine months ended March 31, 2023. The decrease is primarily attributable to the previously mentioned disposals of the Bethard Business and the Argyll operating entities and the decrease in the iGaming operations of Lucky Dino in the EEG iGaming segment and includes corresponding EEG iGaming decreases in line with revenue. The iGaming decreases include $3.8 million lower payment processing fees, platform costs, gaming duties and costs related to revenue sharing arrangements, $0.6 million lower game provider expenses and $1.1 million lower other direct expenses related to the delivery of services. EEG Games also had a reduction in costs with $0.1 million lower hosting, hardware and equipment costs and other direct expenses.

Previous wording

Sales and marketing expense totaled $1.6 million in the six months ended December 31, 2023, a decrease of $2.7 million, or 63%, compared to the $4.3 million recorded for the six months ended December 31, 2022. The decrease was primarily attributable to a $0.3 million reduction in marketing and $2.6 million lower affiliate costs related to the EEG iGaming segment, offset by a $0.2 million increase in corporate expense driven by our service partners.

Current wording

Sales and marketing expense totaled $1.8 million in the nine months ended March 31, 2024, a decrease of $3.4 million, or 65%, compared to the $5.2 million recorded for the nine months ended March 31, 2023. The decrease was primarily attributable to a $0.4 million reduction in marketing and $3.5 million lower affiliate costs related to the EEG iGaming segment, offset by a $0.5 million increase in corporate expense driven by our service partners.

Previous wording

General and administrative expense totaled $11.0 million for the six months ended December 31, 2023, a decrease of $6.0 million, or 35%, compared to the $17.0 million recorded for the six months ended December 31, 2022. The decrease was primarily attributable to decreases of $2.7 million in payroll costs, $1.6 million depreciation and amortization, $0.9 million in information technology related costs and $0.3 million decrease related to other general and administrative cost from the EEG iGaming segment, decreases of $1.0 million in payroll costs and $0.2 million related to other general and administrative costs from the EEG Games segment, and $0.9 million decrease in share based compensation, $0.2 million decrease in payroll offset by $1.1 million increase related to the legal settlement with the former CEO and related legal costs, $0.4 million increase in other professional fees and $0.3 million increase in other general and administrative costs in corporate expenses.

Current wording

General and administrative expense totaled $13.8 million for the nine months ended March 31, 2024, a decrease of $10.6 million, or 43%, compared to the $24.4 million recorded for the nine months ended March 31, 2023. The decrease was primarily attributable to decreases of $3.4 million in payroll costs, $2.9 million depreciation and amortization, $1.2 million in information technology related costs and $0.6 million decrease related to other general and administrative cost from the EEG iGaming segment, decreases of $1.6 million in payroll costs and $0.3 million related to other general and administrative costs from the EEG Games segment, and $1.1 million decrease in share based compensation, $0.2 million decrease in payroll and $0.4 million decrease in professional fees, offset by $1.0 million increase related to the legal settlement with the former CEO and related legal costs and $0.3 million increase in other general and administrative costs in corporate expenses.

Previous wording

At December 31, 2023, the Company concluded that impairment indicators existed considering that the Company delisted from Nasdaq, had management changes in the EEG iGaming segment and continued to see revenues decline in the EEG iGaming segment and that they were significantly down from levels seen in the previous year and in the previous quarters, and EEG Games was not performing at the level previously expected. This, the decline in the Company’s stock price and other factors were determined to be a triggering event and the long-lived assets of the Company were quantitatively tested for impairment. The Company recognized total asset impairment charges of $13.0 million, including $3.6 million of goodwill and $8.4 million of other intangible assets from the EEG iGaming segment and $1.0 million in of goodwill from the EEG Games. Further downturns in economic, regulatory and operating conditions could result in additional impairment in future periods.

Current wording

During the nine months ended March 31, 2024, the Company had concluded that impairment indicators existed considering that the Company delisted from Nasdaq, had management changes in the EEG iGaming segment and continued to see revenues decline in the EEG iGaming segment and that they were significantly down from levels seen in the previous year and in the previous quarters and EEG Games was not performing at the level previously expected. This, the decline in the Company’s stock price and other factors were determined to be a triggering event and the long-lived assets of the Company were quantitatively tested for impairment. The Company recognized total asset impairment charges of $13.0 million, including $3.6 million of goodwill and $8.4 million of other intangible assets from the EEG iGaming segment and $1.0 million in of goodwill from the EEG Games. Further downturns in economic, regulatory and operating conditions could result in additional impairment in future periods.

Previous wording

During the three months ended December 31, 2022, the Company initiated a process to evaluate the strategic options for the EEG iGaming business and subsequent to the period end, the Company appointed a new CEO and a new CFO and on January 18, 2023 sold its EEG iGaming Spanish license. This and uncertainties caused by inflation and world instability were determined to be a triggering event and the long-lived assets of the Company were quantitatively tested for impairment. The Company recognized total goodwill asset impairment charges of $16.1 million, including asset impairment charges to the goodwill to the iGaming reporting unit of $14.5 million, which is part of the EEG iGaming segment, and to the goodwill of the GGC reporting unit of $1.6 million, which is part of the EEG Games segment.

Current wording

During the nine months ended March 31, 2023, the Company initiated a process to evaluate the strategic options for the EEG iGaming business and subsequent to the period end, the Company appointed a new CEO and a new CFO and on January 18, 2023 sold its EEG iGaming Spanish license. This and uncertainties caused by inflation and world instability were determined to be a triggering event and the long-lived assets of the Company were quantitatively tested for impairment. The Company recognized total goodwill asset impairment charges of $16.1 million, including asset impairment charges to the goodwill to the iGaming reporting unit of $14.5 million, which is part of the EEG iGaming segment, and to the goodwill of the GGC reporting unit of $1.6 million, which is part of the EEG Games segment.

Previous wording

The other income (expense), net for the three months ended December 31, 2022 resulted primarily from $1.0 million of interest expense related to the Senior Convertible Note and $3.0 million for the change in the fair value of the contingent consideration due as part of the Bethard transaction from the prior year, offset by other income primarily made up of $8.3 million for the change in the fair value of the derivative liability on Senior Convertible Note due to its elimination on the exchange to Series C Convertible Preferred Stock, and $2.6 million from the reduction in fair value of the warrant liability. The driver of the change in fair value of the warrants was a decrease of $1.5 million for the September 2022 Warrants issued as part of the September 2022 Offering that decreased from the $3.8 million valued on issuance at September 30, 2022 to $2.3 million at December 31, 2022, a decrease of $1.0 million for the March 2022 Warrants from $1.2 million at June 30, 2022 to $0.2 million at December 31, 2022 and a decrease of $0.1 million in other warrants.

Current wording

The other expense for the nine months ended March 31, 2023 resulted primarily from $2.5 million of interest expense related to the Senior Convertible Note, $3.6 million for the loss on extinguishment of the Senior Convertible Note related to the conversion of $19.3 million of the Senior Convertible note into 5,606 shares of our common stock and an increase of $2.9 million for the change in the fair value of the contingent consideration for Bethard, offset by other income primarily made up of $7.4 million for the change in the fair value of the derivative liability on Senior Convertible Note and $6.4 million from the reduction in fair value of the warrant liability and $0.8 million gain on the termination of the UCLA lease. The driver of the change in fair value of the warrants was a decrease of $4.6 million for the September 2022 Warrants issued as part of the September 2022 Offering and a decrease of $1.8 million for the March 2022 Warrants. Other warrants also decreased $0.1 million for the nine months ended March 31, 2023.

Previous wording

The Company considered that it had an accumulated deficit of $203.3 million as of December 31, 2023 and that it has had a history of recurring losses from operations and recurring negative cash flows from operations as it has prepared to grow its esports business through acquisition and new venture opportunities. At December 31, 2023, the Company had $1.1 million of available cash on-hand and net current liabilities of $7.8 million. Net cash used in operating activities for the six months ended December 31, 2023 was $4.1 million, which includes a net loss of $21.8 million.

Current wording

The Company considered that it had an accumulated deficit of $206.1 million as of March 31, 2024 and that it has had a history of recurring losses from operations and recurring negative cash flows from operations as it has prepared to grow its esports business through acquisition and new venture opportunities. At March 31, 2024, the Company had $1.0 million of available cash on-hand and net current liabilities of $7.8 million. Net cash used in operating activities for the nine months ended March 31, 2024 was $5.6 million, which includes a net loss of $24.7 million.

Previous wording

The amount of available cash on hand on March 26, 2024, one business day preceding this filing, was approximately $1,300,000.

Current wording

The amount of available cash on hand on May 21, 2024, one business day preceding this filing, was approximately $0.6 million.

Previous wording

Our material cash requirements include sponsorships with professional teams and an online wagering and services agreement. The Company is expected to incur $0.5 million in sponsorship obligations with various sports teams, with $0.3 million being incurred within the next 12 months. The Company is also required to pay $1.25 million and issue 1 share of common stock annually under the Bally’s Corporation wagering and services agreement that extends for 10 years from July 1, 2021 and the Company has minimum annual commitments of approximately $0.4 million under the online wagering and services agreement with Delasport Limited that has an initial term of 18 months with subsequent annual renewals. Further, the Company is required to pay $0.05 million monthly for the first 9 months of the calendar year related to the legal settlement with the former CEO, until the remaining $0.45 million outstanding, as of December 31, 2023, is paid in full.

Current wording

Our material cash requirements include sponsorships with professional teams and an online wagering and services agreement. The Company is expected to incur $0.3 million in sponsorship obligations with various sports teams, with $0.2 million being incurred within the next 12 months. The Company is also required to pay $1.25 million and issue 1 share of common stock annually under the Bally’s Corporation wagering and services agreement that extends for 10 years from July 1, 2021 and the Company has minimum annual commitments of approximately $0.4 million under the online wagering and services agreement with Delasport Limited that has an initial term of 18 months with subsequent annual renewals. Further, the Company is required to pay $0.05 million monthly for the first 9 months of the calendar year related to the legal settlement with the former CEO, until the remaining $0.3 million outstanding, as of March 31, 2024, is paid in full.

Previous wording

Net cash used in operating activities for the six months ended December 31, 2023 was $4.1 million, which includes a net loss of $21.8 million, offset by net non-cash adjustments of $15.8 million and changes in operating assets and liabilities of $2.0 million.

Current wording

Net cash used in operating activities for the nine months ended March 31, 2024 was $5.6 million, which includes a net loss of $24.7 million, offset by net non-cash adjustments of $17.1 million and changes in operating assets and liabilities of $2.0 million.

Previous wording

Net cash used in investing activities for the six months ended December 31, 2023 totaled less than $0.1 million principally related to the purchase of intangible assets.

Current wording

Net cash used in investing activities for the nine months ended March 31, 2024 totaled less than $0.1 million principally related to the purchase of intangible assets.

Previous wording

Net cash provided by financing activities for the six months ended December 31, 2023 totaled $5.6 million, which included $5.2 million from use of the ATM facility, $1.0 million in net proceeds from the August 15, 2023 offering of common stock and the exercise of the related warrants, offset by $0.3 million used to redeem part of the Series D Preferred Stock and $0.3 million for the payments of the dividends on the 10% Series A cumulative redeemable convertible preferred stock.

Current wording

Net cash provided by financing activities for the nine months ended March 31, 2024 totaled $4.7 million, which included $1.4 million from the issuance of the secured note, $5.2 million from use of the ATM facility, $1.0 million in net proceeds from the August 15, 2023 offering of common stock and the exercise of the related warrants, offset by $2.6 million used to redeem part of the Series D Preferred Stock and $0.3 million for the payments of the dividends on the 10% Series A cumulative redeemable convertible preferred stock.

Previous wording

Our critical accounting estimates are those that are both material to the presentation of our financial condition and results of operations and require management’s most subjective and complex judgments. Other than as described below, there have been no material changes or updates to our critical accounting estimates during the six months ended December 31, 2023 as compared to the critical accounting estimates disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

Current wording

Our critical accounting estimates are those that are both material to the presentation of our financial condition and results of operations and require management’s most subjective and complex judgments. Other than as described below, there have been no material changes or updates to our critical accounting estimates during the nine months ended March 31, 2024 as compared to the critical accounting estimates disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.