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Midas Edge

ESPORTS ENTERTAINMENT GROUP INC

For the period ended Mar 31, 2024. Filed May 23, 2024.

View on SEC.gov

About this filing

A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Mar 31, 2024 · Filed May 23, 2024

GMBLP$0.020.0%Stored close · as of Jun 29, 2026

Extracted filing text, with the paragraph anchors used by the comparison.

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Contents

Item 1. Financial Statements

Condensed Consolidated Balance Sheets

March 31, 2024June 30, 2023
(Unaudited)
ASSETS
Current assets
Cash$957,112$1,745,298
Restricted cash66,903168,304
Accounts receivable, net5,38693,871
Receivables reserved for users362,294831,942
Other receivables267,466497,603
Prepaid expenses and other current assets318,222706,030
Total current assets1,977,3834,043,048
Equipment, net-20,013
Operating lease right-of-use asset21,15485,517
Intangible assets, net2,645,39613,324,627
Goodwill-4,491,223
Other non-current assets-136,863
TOTAL ASSETS$4,643,933$22,101,291
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued expenses$8,353,041$7,106,194
Liabilities to customers219,360664,313
Deferred revenue1,202,122989,027
Operating lease liability – current24,41295,903
Total current liabilities9,798,9358,855,437
Long-term debt, net of issuance costs1,414,448-
Derivative liability351,011-
Warrant liability651,783365,726
Deferred income taxes--
Total liabilities12,216,1779,221,163
Commitments and contingencies (Note 10)--
Mezzanine equity:
10% Series A cumulative redeemable convertible preferred stock, $0.001 par value, 1,725,000 authorized, 835,950 shares issued and outstanding, aggregate liquidation preference $9,462,954 at March 31, 2024 and $9,195,450 at June 30, 20238,585,9328,083,869
Series B redeemable preferred stock, $0.001 par value, 100 authorized, no shares issued and outstanding, March 31, 2024 and June 30, 2023--
Series C Convertible Preferred Stock, $0.001 par value, 20,000 authorized, 1,775 shares issued and outstanding, aggregate liquidation preference $3,944,444 at March 31, 20242,236,797-
Series D Convertible Preferred Stock, $0.001 par value, 10,000 authorized, 1,811 shares issued and outstanding, aggregate liquidation preference $2,114,916 at March 31, 20241,178,594-
Series E redeemable Preferred Stock, $0.001 par value, 100 authorized, 100 and 0 shares issued and outstanding, March 31, 2024 and June 30, 2023, respectively1,000-
Total Mezzanine equity12,002,3238,083,869
Stockholders’ equity (deficit)
Preferred stock $0.001 par value; 10,000,000 shares authorized--
Series C Convertible Preferred Stock, $0.001 par value, 20,000 authorized, 14,601 shares issued and outstanding, aggregate liquidation preference $18,506,798 at June 30, 2023-14,805,438
Series D Convertible Preferred Stock, $0.001 par value, 10,000 authorized, 4,300 shares issued and outstanding, aggregate liquidation preference $5,421,245 at June 30, 2023-2,618,389
Common stock $0.001 par value; 1,250,000 shares authorized, 1,145,980 and 9,461 shares issued and outstanding as of March 31, 2024 and June 30, 2023, respectively1,1469
Additional paid-in capital190,970,211173,465,492
Accumulated deficit(206,114,689)(181,425,905)
Accumulated other comprehensive loss(4,431,235)(4,667,164)
Total stockholders’ equity (deficit)(19,574,567)4,796,259
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT)$4,643,933$22,101,291

Condensed Consolidated Statements of Operations

Three Months Ended March 31,Nine Months Ended March 31,
2024202320242023
Net revenue$1,723,415$4,175,994$6,995,259$20,190,663
Operating costs and expenses:
Cost of revenue474,7001,292,7431,765,2587,414,814
Sales and marketing262,849928,6921,834,7915,217,584
General and administrative2,799,6447,369,45213,771,53324,399,888
Loss on disposal of businesses, net-4,198,362-4,198,362
Asset impairment charges--12,981,14216,135,000
Total operating expenses3,537,19313,789,24930,352,72457,365,648
Operating loss(1,813,778)(9,613,255)(23,357,465)(37,174,985)
Other income (expense):
Interest expense(9,448)(460,914)(9,448)(2,490,696)
Gain on termination of lease-799,901-799,901
Loss on extinguishment of senior convertible note-(3,616,372)-(3,616,372)
Change in fair value of derivative liability(462,997)(1,163,979)(999,695)7,435,687
Change in fair value of warrant liability(565,533)1,412,941(286,057)6,435,229
Loss on contingent consideration---(2,864,551)
Other non-operating income (loss)9,197(551,921)(36,119)(19,085)
Total other income (expense), net(1,028,781)(3,580,344)(1,331,319)5,680,113
Income (Loss) before income taxes(2,842,559)(13,193,599)(24,688,784)(31,494,872)
Income tax benefit (expense)-(376)-(376)
Net loss$(2,842,559)$(13,193,975)$(24,688,784)$(31,495,248)
10% Series A cumulative redeemable convertible preferred stock cash dividend-(200,628)(334,380)(601,884)
Undeclared dividend on 10% Series A cumulative redeemable convertible preferred stock(200,628)-(267,504)-
Accretion of 10% Series A cumulative redeemable convertible preferred stock to redemption value(78,933)(75,980)(234,559)(225,782)
Accretion of the original discount on Series C convertible preferred stock--(1,820,000)-
Accretion of the original preferred warrant discount on Series D convertible preferred stock(1,377,878)-(1,377,878)-
Accretion of the original discount on Series D convertible preferred stock(422,143)-(422,143)-
Dividend on Series C convertible preferred stock and Series D convertible preferred stock(33,832)-(589,421)-
Deemed dividend on accretion of Series D convertible preferred Stock to redemption value(172,636)-(197,377)-
Deemed dividend on make whole provision on Series C convertible preferred stock--(4,805,990)-
Deemed dividend from down round provision on Series C convertible preferred stock and Series D convertible preferred stock(3,586,295)-(23,949,067)-
Accretion of original derivative liability on extinguishment of Series C convertible preferred stock and Series D convertible preferred stock3,236,090-3,236,090-
Extinguishment of Series C convertible preferred stock and Series D convertible preferred stock1,762,017-1,762,017-
Accretion of issuance costs of Series D convertible preferred stock on extinguishment(143,621)-(143,621)-
Accretion of discount on Series C convertible preferred stock and Series D convertible preferred stock(70,244)-(70,244)-
Net loss attributable to common stockholders$(3,930,662)$(13,470,583)$(53,902,861)$(32,322,914)
Net loss per common share:
Basic and diluted loss per common share$(3.43)$(2,305.82)$(95.07)$(11,084.68)
Weighted average number of common shares outstanding, basic and diluted1,145,9805,842566,9972,916

Condensed Consolidated Statements of Comprehensive Loss

Three Months Ended March 31,Nine Months Ended March 31,
2024202320242023
Net loss$(2,842,559)$(13,193,975)$(24,688,784)$(31,495,248)
Other comprehensive loss:
Reclassification of accumulated foreign currency translation net losses to net loss as a result of the disposal of businesses-2,466,016-2,466,016
Foreign currency translation gain11,225107,167235,929117,352
Total comprehensive loss$(2,831,334)$(10,620,792)$(24,452,855)$(28,911,880)

Condensed Consolidated Statements of Changes in Mezzanine Equity and Stockholders’ Equity (Deficit)

For the Three and Nine Months Ended March 31, 2024 and 2023 (Unaudited)

Mezzanine Equity · Shareholders’ Equity (Deficit)
10% Series A Cumulative Redeemable Convertible Preferred Stock · Series B Redeemable Preferred Stock · Series C Convertible Preferred Stock · Series D Convertible Preferred Stock · Series E Redeemable Preferred Stock · Series C Convertible Preferred Stock · Series D Convertible Preferred Stock · Common Stock · Additional paid-in · Accumulated · Accumulated other comprehensive · Total Stockholders’ Equity
Shares · Amount · Shares · Amount · Shares · Amount · Shares · Amount · Shares · Amount · Shares · Amount · Shares · Amount · Shares · Amount · capital · Deficit · loss · (Deficit)
Balance as at July 1, 2023835,950$8,083,869-$--$--$--$-14,601$14,805,4384,300$2,618,3899,460$9$173,465,492$(181,425,905)$(4,667,164)$4,796,259
Common stock and warrants issued in equity financing--------------2,5003193,497--193,500
Proceeds from exercise of pre funded warrants--------------10,42010806,490--806,500
Accretion of redemption value and issuance costs for 10% Series A cumulative redeemable convertible preferred stock-77,442--------------(77,442)--(77,442)
10% Series A cumulative redeemable convertible preferred stock cash dividend----------------(200,628)--(200,628)
Dividend on Series C convertible preferred stock and Series D convertible preferred stock-----------255,523-87,325--(342,848)---
Deemed dividend on make whole provision on Series C convertible preferred stock-----3,759,649----(3,759,649)---
Deemed dividend from down round provision on Series C convertible preferred stock and Series D convertible preferred stock--------------------
Conversions of the Convertible preferred stock----------(10,382.00)(12,406,014)--124,79212512,405,889---
Delay Payment for Series D Convertible Preferred Stock--------------25-1,935--1,935
Stock based compensation----------------21,078--21,078
Foreign exchange translation------------------(335,242)(335,242)
Net loss-----------------(4,798,152)-(4,798,152)
Balance as of September 30, 2023835,950$8,161,311-$--$--$--$-4,219$6,414,5964,300$2,705,714147,197$147$182,513,814$(186,224,057)$(5,002,406)$407,808
Accretion of 10% Series A cumulative redeemable convertible preferred stock to redemption value-78,184--------------(78,184)--(78,184)
10% Series A cumulative redeemable convertible preferred stock cash dividend----------------(133,752)--(133,752)
Undeclared dividend on 10% Series A cumulative redeemable convertible preferred stock-66,876--------------(66,876)--(66,876)
Dividend on Series C convertible preferred stock and Series D convertible preferred stock-----------125,459-87,282--(212,741)---
Deemed dividend on make whole provision on Series C convertible preferred stock-----------1,046,341----(1,046,341)---
Deemed dividend from down round provision on Series C convertible preferred stock and Series D convertible preferred stock--------------------
Conversions of the Convertible preferred stock----------(2,444)(4,061,731)--401,7114024,061,329---
Redemption of Series D convertible preferred stock and payment of dividend------------(312)(322,120)-----(322,120)
Deemed dividend on accretion of Series D convertible preferred Stock to redemption value-------------24,741--(24,741)---
Delay Payment for Series D Convertible Preferred Stock--------------627110,143--10,144
Reclass of Series C convertible preferred stock and Series D convertible preferred stock to Mezzanine Equity----1,7753,524,665----(1,775)(3,524,665)-------(3,524,665)
Bifurcation of derivative-----(1,820,000)--------------
Accretion of the original discount on Series C convertible preferred stock-----1,820,000----------(1,820,000)--(1,820,000)
Issuance of common stock under the ATM, net of issuance costs--------------515,3945155,248,371--5,248,886
Stock based compensation----------------21,078--21,078
Issuance of common stock due to the reverse stock split round-up--------------81,05181(81)---
Foreign exchange translation------------------559,946559,946
Net loss-----------------(17,048,073)-(17,048,073)
Balance as of December 31, 2023835,950$8,306,371-$-1,775$3,524,665-$--$--$-3,988$2,495,6171,145,980$1,146$188,472,019$(203,272,130)$(4,442,460)$(16,745,808)
Accretion of 10% Series A cumulative redeemable convertible preferred stock to redemption value-78,933--------------(78,933)--(78,933)
Undeclared dividend on 10% Series A cumulative redeemable convertible preferred stock-200,628--------------(200,628)--(200,628)
Dividend on Series C convertible preferred stock and Series D convertible preferred stock-----24,512-------9,320--(33,832)--(24,512)
Deemed dividend from down round provision on Series C convertible preferred stock and Series D convertible preferred stock--------------------
Redemption of Series D convertible preferred stock and payment of dividend------------(2,177)(2,295,822)-----(2,295,822.00)
Deemed dividend on accretion of Series D convertible preferred Stock to redemption value-------------172,636--(172,636)---
Accretion of the original preferred warrant discount on Series D convertible preferred stock-------------1,377,878--(1,377,878)---
Reclass of Series D convertible preferred Stock to Mezzanine Equity------18111,759,629----(1,811)(1,759,629)-----(1,759,629)
Bifurcation of old Series D derivative-------(422,143)------------
Accretion of the original preferred warrant discount on Series D convertible preferred stock-------422,143--------(422,143)--(422,143)
Bifurcation of Series C & Series D derivative-----(224,762)-(120,501)------------
Accretion of original derivative liability on extinguishment of Series C convertible preferred stock and Series D convertible preferred stock----------------3,236,090--3,236,090
Extinguishment of Series C convertible preferred stock and Series D convertible preferred stock-----(1,132,872)-(629,145)--------1,762,017--1,762,017
Accretion of issuance costs of Series D convertible preferred stock on extinguishment-------143,621--------(143,621)--(143,621)
Accretion of discount on Series C convertible preferred stock and Series D convertible preferred stock-----45,254-24,990--------(70,244)--(70,244)
Proceeds from issuance of Series E redeemable preferred stock--------1001,000----------
Foreign exchange translation------------------11,22511,225
Net loss-----------------(2,842,559)-(2,842,559)
Balance as of March 31, 2024835,950$8,585,932-$-1,775$2,236,7971,811$1,178,594100$1,000-$--$-1,145,980$1,146$190,970,211$(206,114,689)$(4,431,235)$(19,574,567)
Balance as of July 1, 2022835,950$7,781,380-$--$--$--$--$--$-1,024$1$144,915,095$(149,140,426)$(7,376,114)(11,601,444)
Accretion of redemption value and issuance costs-74,544--------------(74,544)--(74,544)
10% Series A cumulative redeemable convertible preferred stock cash dividend----------------(200,628)--(200,628)
Common stock and warrants issued in equity financing, net of issuance costs--------------75011,568,129--1,568,130
Stock based compensation----------------921,991--921,991
Foreign exchange translation------------------(2,526,478)(2,526,478)
Net loss-----------------(4,168,591)-(4,168,591)
Balance as at September 30, 2022835,950$7,855,924-$--$--$--$--$--$-1,774$2$147,130,043$(153,309,017)$(9,902,592)$(16,081,564)
Accretion of redemption value and issuance costs-75,258--------------(75,258)--(75,258)
10% Series A cumulative redeemable convertible preferred stock cash dividend---------------(200,628)--(200,628)
Proceeds from issuance of Series B redeemable preferred stock--1001,000----------------
Common stock and pre-funded warrants issued in equity financing, net of issuance costs-------------177-2,146,685--2,146,685
Common stock issued on exercise of Pre-funded warrants--------------165-6,566--6,566
Foreign exchange translation----------------2,536,6632,536,663
Net loss-----------------(14,132,682)-(14,132,682)
Balance as of December 31, 2022835,950$7,931,182100$1,000-$--$--$--$--$-2,116$2$149,007,408$(167,441,699)$(7,365,929)$(25,800,218)
Accretion of redemption value and issuance costs-75,979--------------(75,980)--(75,980)
10% Series A cumulative redeemable convertible preferred stock cash dividend---------------(200,628)--(200,628)
Redemption of the Series B--(100)(1,000)----------------
Common stock and warrants issued in equity financing, net of issuance costs-------------92-----
Common stock issued on exercise of Pre-funded warrants--------------282-11,284--11,284
Conversion of senior convertible note--------------5,603622,877,949--22,877,955
Common stock issued for services-------------63-184,000--184,000
Stock based compensation----------------21,079--21,079
Foreign exchange translation------------------2,573,1832,573,183
Net loss-----------------(13,193,975)-(13,193,975)
Balance as of March 31, 2023835,950$8,007,161-$--$--$--$--$--$-8,156$8$171,825,112$(180,635,674)$(4,792,746)$(13,603,300)
ContentsView on SEC.gov

The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.