Item
1.01 Entry into a Material Definitive Agreement.
On
May 25, 2021 (the “Signing Date”), Esports Entertainment Group, Inc (the “Company”), entered into
a Share Sale and Purchase Agreement (the “Purchase Agreement”) with Gameday Group Plc, a limited liability company
incorporated in Malta (the “Seller”, and together with the Company, the “Parties”). Subject to
the terms and conditions of the Purchase Agreement, the Parties agreed that the Shares (as defined below) will be sold by the Seller
to the Company five Business Days after the issuance of the Seller’s Pre-Closing Restructuring Confirmation (as defined below),
or such other date as the Parties may agree on writing (the “Closing Date”). All defined terms used herein and not
otherwise defined have the meanings set forth in the Purchase Agreement.
According
to the Purchase Agreement, the Seller owns certain business assets (the “Assets”) regarding the Bethard, Fastbet and
Betive brands (the “Business”), including (i) the brand name Bethard (and, together with the Fastbet and Betive brands
the “Brands”); (ii) domains relating to the Brands (the “Domains”); (iii) the customer databases
relating to the Brands (the “Customer Databases”); (iv) website content, materials and code pertaining to the Domains
(or any part/s thereof) currently owned by the Seller and any of its Affiliates (the “Front-End Code”); (v) certain
licensee rights under an ambassador agreement originally entered into by Bethard Group Limited (“BG”) and Unknown
AB (“Unknown”), dated February 14, 2018 (and amended on February 26, 2018 and on March 16, 2018), and thereafter assigned
and novated by BG to Together Gaming Solutions p.l.c (“TGS”) on April 30, 2019 and subsequently amended on March 27,
2020 (the “Zlatan Agreement”); and (vi) B2C online gambling licenses in Sweden, Spain, Malta, and Ireland (each a
“License” and together the “Licenses”).
As
described in the Purchase Agreement, Prozone Limited, a limited liability company incorporated in Malta (“Prozone”)
prior to the completion of all actions and the transactions (including the Transaction defined below) required to take place at the Closing
on the Closing Date (the “Closing”) intends to enter into (i) an asset transfer agreement with the Seller’s
subsidiaries, BG and TGS (the “Asset Transfer Agreements”), pursuant to which Prozone will acquire, prior to the Closing,
full legal title and ownership of the Assets (with the exception of the Licenses and the Zlatan Agreement) owned by each of BG and TGS,
free and clear from any Encumbrances; (ii) a white label platform licensing agreement with TGS for the Together Gaming Platform (the
“Platform”) (the “White Label Agreement”) regarding the Business; (iii) a turnkey platform licensing
agreement with the TGS for the Platform (the “Turnkey Agreement”); and (iv) a services agreement with BG for operational
support services (the “Services Agreement”) (the “Pre-Closing Restructuring”).
Following
the Closing, the Seller agreed to procure that each of the Licenses are transferred to Prozone as soon as practicable, subject to such
transfers being permitted under the relevant local regulations. Prozone agreed to operate for a minimum period of 24 months from the
Closing the Domains utilizing the Platform, pursuant to the terms of the White Label Agreement and/or the Turnkey Agreement. After 24
months from the Closing have passed, Prozone shall be free to terminate the White Label Agreement and/or Turnkey Agreement (as applicable)
and migrate the Domains and the Customer Databases to another platform of Prozone’s choice. The Seller agreed to procure that the
Zlatan Agreement (which is currently the subject of negotiation between TGS and Unknown) will be assigned and novated in favor of Prozone
pursuant to an assignment and novation agreement to be entered into between TGS, Unknown, and Prozone (the “Zlatan Agreement
Assignment”).
Following
the Pre-Closing Restructuring but prior to the Closing, the Seller intends to assume Prozone’s payment obligations to BG and TGS
under the Asset Transfer Agreements in consideration for receivables (of an aggregate amount that is equal to those payment obligations)
due by Prozone to the Seller in accordance with an assignment and novation agreement to be entered into between Prozone, the Seller,
and BG and an assignment and novation agreement to be entered into between Prozone, the Seller, and TGS (the “Assignment and
Novation Agreements”). These receivables will then be capitalized (i.e., converted into shares in Prozone) and at which point
Prozone is expected to have an issued share capital of the EUR 25,101,200 divided into 25,101,200 shares of EUR 1 each (the “Shares”),
all of which will be owned by the Seller. The Parties intend that following the increase in the issued share capital of Prozone, the
Seller will sell all of the Shares together with all rights attached to them and free from any Encumbrance to the Company (the “Transaction”)
on the Closing Date subject to the terms and conditions of the Purchase Agreement.
The
Purchase Price for the Shares shall be an amount corresponding to the aggregate of (i) EUR 16,000,000 (the “Closing Payment”);
(ii) the additional consideration payable to the Seller by the Company as set out in Section 5 of the Purchase agreement (the “Additional
Payment”); and (iii) the shares of the Company’s common stock, par value $0.0001 to be allotted and issued to the Seller
by the second year anniversary of the Closing Date, representing an aggregate value of the USD Currency Equivalent of EUR7,600,000 as
set out in Section 6 of the Purchase Agreement or such lower amount as may be applicable in accordance with Section 9.3 of the Purchase
Agreement (the “Share Consideration”, and together with the Closing Payment and the Additional Payment, the “Purchase
Price”).
Following
the Signing Date, and in any event no later than 15 Business Days following the Signing Date, the Seller agreed to carry out the Pre-Closing
Restructuring and needs to confirm, in writing, to the Company once the Pre-Closing Restructuring has been completed (the “Seller’s
Pre-Closing Restructuring Confirmation”), provided, however, that the White Label Agreement and the Turnkey Agreement
shall be entered into on the Closing.
The
Purchase Agreement imposes on the Seller and any of its Affiliates, customary non-compete and non-solicitation restrictions and customary
non-disclosure obligations, all of which are subject to certain exceptions and qualifications.
Subject
to the terms of the Purchase Agreement, the Seller will be required to indemnify the Company, in the event of a breach of any Warranties,
covenants or other provisions of the Purchase Agreement by the Seller.
The
Purchase Agreement contains customary representations, warranties and agreements by the Company and the Seller, customary conditions
to closing, and other conditions and obligations of the Parties.
The
foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the
full text of the Purchase Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated
by reference herein.