Item
2.01 Completion of Acquisition or Disposition of Assets.
Helix
Holdings, LLC Purchase Agreement Closing
As
previously reported on January 27, 2021 and May 26, 2021 (the “Prior Reports”), Esports Entertainment Group, Inc. (the “Company”)
entered into an equity purchase agreement dated January 22, 2021, as amended on May 21, 2021 (the “Helix Purchase Agreement”),
by and among the Company, Helix Holdings, LLC, a limited liability company incorporated under the laws of Delaware (“Helix”),
and the equity holders of Helix (the “Helix Equity Holders”), whereby the Company would acquire from the Helix Equity Holders,
all of the issued and outstanding membership units of Helix (the “Helix Interests”), making Helix a wholly owned subsidiary
of the Company.
On
June 1, 2021, the Company, Helix and the Helix Equity Holders, having met all conditions precedent in the Helix Purchase Agreement, consummated
the closing for the Helix Interests (the “Helix Closing”). Pursuant to the Helix Purchase Agreement, as consideration for
the Helix Interests, the Company paid the Helix Equity Holders at the Helix Closing: (i) $10,000,000 in cash (the “Helix Cash Consideration”)
and $7,000,000 in stock (the “Helix Stock Consideration”) through the issuance of 528,302 shares of the Company’s common
stock, par value $0.0001 per share, valued at $13.25 per share. In connection with the Helix Cash Consideration, the Company received
credit for certain loans and operating expense payments made by the Company to Helix during 2020 and 2021.
At
the Helix Closing, $1,609,349 of the Helix Cash Consideration was placed in an escrow account pursuant to a June 1, 2021, Indemnification
Escrow Agreement, by and among the Company, Helix, the Helix Equity Holders and Lucosky Brookman LLP, as escrow agent (the “Helix
Indemnification Escrow Agreement), as security for potential obligations of the Helix Equity Holders for damages which the Company and
related persons may incur in connection with certain indemnifiable events set forth in the Helix Purchase Agreement. The foregoing
description contains only a brief description of the material terms and does not purport to be a complete description of the rights and
obligations of the parties to the Helix Indemnification Escrow Agreement, and such description is qualified in its entirety by reference
to the full text of the Helix Indemnification Escrow Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form
8-K and is incorporated herein by reference.
At
the Helix Closing, the Helix Equity Holders assigned and transferred the Helix Interests to the Company pursuant to the terms and provisions
of that certain Assignment of Membership Interest dated as of June 1, 2021 (the “Helix Assignment Agreement”) by and among
the Company, as assignee, and the Helix Equity Holders, as assignors. The full text of the Helix Assignment Agreement is filed as Exhibit
10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Additionally,
at the Helix Closing, the Company entered into Employment Agreements (the “Helix Employment Agreements”) and Non-Compete,
Non-Solicitation and Non-Disclosure Agreements (the “Helix Non-Competes”) with certain key employees of Helix, including
those key employees identified in Exhibit A to the Helix Purchase Agreement. The Helix Employment Agreements generally provide for, among
other things, a base annual salary, benefits and perquisites consistent with that which the Company provides to similarly situated employees,
the right to participate in Company benefit plans, paid vacation time, expense reimbursement and a lump sum payment to the employee (generally
equal to one month of pay) in the event such employee is terminated by the Company without cause or for good reason. Each Helix Employment
Agreement has a one-year term and is subject to annual renewals for additional one-year terms unless terminated by the Company or the
employee at least 90 days prior to the end of the existing term. The Helix Non-Competes restrict the employee from working with a competitor
of the Company, or soliciting any of the Company’s employees, suppliers or any person that has a material relationship with the
Company during the term of employment and for one year after such employee’s termination. The Helix Non-Competes include customary
confidentiality provisions. The foregoing description contains only a brief description of the material terms and does not purport to
be a complete description of the rights and obligations of the parties to the Helix Employment Agreements and Helix Non-Competes, and
such description is qualified in its entirety by reference to the full text of the Company’s form of Employment Agreement and form
of Non-Compete, Non-Solicitation and Non-Disclosure Agreement, a copy of which is filed as Exhibit 10.3 and 10.4, respectively, to this
Current Report on Form 8-K and is incorporated herein by reference.
The
Helix Purchase Agreement contains customary representations, warranties, covenants, indemnification and other terms for transactions
of a similar nature.
The
foregoing description contains only a brief description of the material terms and does not purport to be a complete description of
the rights and obligations of the parties to the Helix Purchase Agreement, and such description is qualified in its entirety by
reference to the full text of (i)the Helix Purchase Agreement, a copy of which was filed as Exhibit 10.1 to the Company’s Form
8-K dated January 22,2021 and filed with the SEC on January 27,2021, and (ii) Amendment No. 1 to the Helix Purchase Agreement, a
copy of which was filed as Exhibit 10.1 to the Company’s Form 8-K dated May 21,2021 and filed with the SEC on May 26, 2021,
each of which is incorporated herein by reference.
ggCIRCUIT
LLC Purchase Agreement Closing
As
previously reported on January 27, 2021 and May 26, 2021(the “Prior Reports”), the Company entered into an equity purchase
agreement dated January 22, 2021, as amended on May 21, 2021 (the “GGC Purchase Agreement”), by and among the Company, ggCIRCUIT
LLC, an Indiana limited liability company (“GGC”), and the equity holders of GGC (the “GGC Equity Holders”),
whereby the Company would acquire from the GGC Equity Holders all of the issued and outstanding membership units of GGC (the “GGC
Interests”), making GGC a wholly owned subsidiary of the Company.
On
June 1, 2021, the Company, GGC and the GGC Equity Holders, having met all conditions precedent in the GGC Purchase Agreement, consummated
the closing for the GGC Interests (the “GGC Closing”). Pursuant to the GGC Purchase Agreement, as consideration for the GGC
Interests, the Company paid the GGC Equity Holders at the GGC Closing: (i) $15,000,000 in cash (the “GGC Cash Consideration”)
and $11,000,000 in stock (the “GGC Stock Consideration”) through the issuance of 830,189 shares of the Company’s common
stock, par value $0.0001 per share, valued at $13.25 per share. In connection with the GGC Cash Consideration, the Company received credit
for certain loans and operating expense payments made by the Company to GGC during 2020 and 2021.
At
the GGC Closing, $2,457,548 of the GGC Cash Consideration was placed in an escrow account pursuant to a June 1, 2021, Indemnification
Escrow Agreement, by and among the Company, GGC, the GGC Equity Holders and Lucosky Brookman LLP, as escrow agent (the “GGC Indemnification
Escrow Agreement), as security for potential obligations of the GGC Equity Holders for damages which the Company and related persons
may incur in connection with certain indemnifiable events set forth in the GGC Purchase Agreement. The foregoing description contains
only a brief description of the material terms and does not purport to be a complete description of the rights and obligations of the
parties to the GGC Indemnification Escrow Agreement, and such description is qualified in its entirety by reference to the full text
of the GGC Indemnification Escrow Agreement, a copy of which is filed as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated
herein by reference.
At
the GGC Closing, the GGC Equity Holders assigned and transferred the GGC Interests to the Company pursuant to the terms and provisions
of that certain Assignment of Membership Interest dated as of June 1, 2021 (the “GGC Assignment Agreement”) by and among
the Company, as assignee, and the GGC Equity Holders, as assignors. The full text of the GGC Assignment Agreement is filed as Exhibit
10.6 to this Current Report on Form 8-K and is incorporated herein by reference.
Additionally,
at the GGC Closing, the Company entered into Non-Compete, Non-Solicitation and Non-Disclosure Agreements (the “GGC Non-Competes”)
with certain key employees of GGC, including those key employees identified in Exhibit A to the GGC Purchase Agreement . The GGC Non-Competes
are similar in all material respects to the Helix Non-Competes. They restrict the employee from working with a competitor of the Company,
or soliciting any of the Company’s employees, suppliers or any person that has a material relationship with the Company during
the term of employment and for one year after such employee’s termination. The GGC Non-Competes include customary confidentiality
provisions. The foregoing description contains only a brief description of the material terms and does not purport to be a complete description
of the rights and obligations of the parties to the GGC Non-Competes, and such description is qualified in its entirety by reference
to the full text of the Company’s form of Non-Compete, Non-Solicitation and Non-Disclosure Agreement, a copy of which is filed
as Exhibit 10.4, to this Current Report on Form 8-K and is incorporated herein by reference. As set forth in Exhibit A to the GGC Purchase
Agreement, the Company assumed the existing employment arrangements between the key employees of GGC identified in Exhibit A and GGC,
the principal terms of which are set forth therein.
The
GGC Purchase Agreement contains customary representations, warranties, covenants, indemnification and other terms for transactions of
a similar nature.
The
foregoing description contains only a brief description of the material terms and does not purport to be a complete description of the
rights and obligations of the parties to the GGC Purchase Agreement, and such description is qualified in its entirety by reference to
the full text of (i) the GGC Purchase Agreement, a copy of which was filed as Exhibit 10.2 to the Company’s Form 8-K dated January
22,2021 and filed with the SEC on January 27,2021, and (ii) Amendment No. 1 to the GGC Purchase Agreement, a copy of which was filed
as Exhibit 10.2 to the Company’s Form 8-K dated May 21,2021 and filed with the SEC on May 26,2021, each of which is incorporated
herein by reference.