Thursday, November 04, 2021
eSports Entertainment Group, Inc. (GMBL)
Just What The Doctor Ordered
Esports Entertainment Group Inc is a development-stage online gambling company focused purely on esports. The company’s principal business operations include design, develop and test wagering systems.
Michael Kupinski, Director of Research, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Plans to raise cash. The company announced an offering for 1,500,000 Series A Cumulative Redeemable Convertible Preferred Shares. The price of the newly offered preferred stock will be $10 per share and each share will be convertible to common stock anytime by the holder, at a price of $17.50 per share. At $10 per share, the 1.5-million share offering is set to provide the company with an influx of cash roughly in the amount of $15 million. Additionally, the company has signaled its intention to allow a 45-day window wherein the underwriters can purchase another 225,000 Series A Preferred Shares. With the potential for additional share purchases by the underwriters, the total cash raise for the company could reach $17.25 million. The company has applied to list the new preferred shares on the NASDAQ using the symbol, “GMBLP.” We view the move favorably and believe that it is the right financial instrument at this time to raise cash.
Resetting the clock. The company found itself low on cash in recent months. After its $17 million acquisition of Bethard in July, the company’s cash position had been depleted from nearly $20 million as of June 30th to an estimated $2.5 million by October. Moreover, the company’s cash burn has been about $1 million per month, further highlighting the need to raise cash. Therefore, the $15 million …
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
