# EDGAR Filing Document

**Accession Number:** 0001451448
**File Stem:** 0001493152-23-006598
**Filing Date:** 2023-3
**Character Count:** 30386
**Document Hash:** d6beaa86ac3b99b74b5dcebf608a4d45
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-23-006598.hdr.sgml**: 20230302

**ACCESSION NUMBER**: 0001493152-23-006598

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230224

**ITEM INFORMATION**: Completion of Acquisition or Disposition of Assets

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230302

**DATE AS OF CHANGE**: 20230302

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ESPORTS ENTERTAINMENT GROUP, INC.
- **CENTRAL INDEX KEY:** 0001451448
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-AMUSEMENT & RECREATION SERVICES [7900]
- **IRS NUMBER:** 263062752
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39262
- **FILM NUMBER:** 23700320

**BUSINESS ADDRESS:**
- **STREET 1:** BLOCK 6, TRIQ PACEVILLE
- **STREET 2:** ST. JULIANS STJ 3109
- **CITY:** MALTA
- **STATE:** O1
- **ZIP:** BKR 9077
- **BUSINESS PHONE:** 356 2757 7000

**MAIL ADDRESS:**
- **STREET 1:** BLOCK 6, TRIQ PACEVILLE
- **STREET 2:** ST. JULIANS STJ 3109
- **CITY:** MALTA
- **STATE:** O1
- **ZIP:** BKR 9077

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** VGambling Inc.
- **DATE OF NAME CHANGE:** 20150402

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** VGambling, Inc.
- **DATE OF NAME CHANGE:** 20140815

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** DK Sinopharma, Inc.
- **DATE OF NAME CHANGE:** 20100615

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, DC 20549**

**FORM 8-K**

**CURRENT REPORT**

**PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIES EXCHANGE ACT OF 1934**

Date of Report (Date of earliest event reported): **February 24, 2023**

**<u>ESPORTS ENTERTAINMENT GROUP, INC.</u>**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Nevada** | **001-39262** | **26-3062752** |
| (State or other jurisdiction of | (Commission | (IRS Employer |
| incorporation or organization) | File Number) | Identification No.) |

---

**BLOCK 6, TRIQ PACEVILLE, ST. JULIANS STJ 3109**

**MALTA**

(Address of principal executive offices)

**<u>356 2713 1276</u>**

(Registrant's telephone number, including area code)

**<u>Not Applicable</u>**

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock | GMBL | The Nasdaq Stock Market LLC |
| Common Stock Purchase Warrants | GMBLW | The Nasdaq Stock Market LLC |
| 10.0% Series A Cumulative Redeemable Convertible Preferred Stock | GMBLP | The Nasdaq Stock Market LLC |
| Common Stock Purchase Warrants | GMBLZ | The Nasdaq Stock Market LLC |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**Item 2.01 Completion of Acquisition or Disposition of Assets**

On February 24, 2023, ("Closing Date"), Esports Entertainment Group, Inc., a Nevada corporation ("Company"), pursuant to a stock purchase agreement ("Purchase Agreement") dated February 14, 2023 with Gameday Group PLC, a Malta company ("Purchaser"), completed the divestiture of Prozone Limited, a Malta company containing the online casino and sportsbook business, including the Bethard brand (the "Bethard Business"), that is licensed in Malta and Sweden (and together the sale of Prozone Limited with the Bethard Business herein referred to as the "Sale of the Bethard Business)." The purchase consideration was determined by the Company to be $8,090,965 comprised of cash received on the Closing date of €1,650,000 ($1,739,882 using exchange rates in effect on the Closing Date), holdback consideration, of €150,000 ($158,171 using exchange rates in effect on the Closing Date) and the Company's settlement of its contingent consideration liability of €5,872,989 ($6,192,912 using exchange rates in effect on the Closing Date) that had originated from its acquisition of the Bethard Business on July 13, 2021. The Purchaser further assumed net working capital of the Bethard Business consisting primarily of accounts payable and accrued liabilities estimated to be €1,238,552 ($1,306,021 using exchange rates at the Closing Date).

The foregoing description of the Sale of the Bethard Business is qualified in its entirety by the full text of the Purchase Agreement, which was filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 17, 2023 (the "Prior Report") and is incorporated herein by reference.

**Item 9.01 Financial Statements and Exhibits.**

(b) Pro Forma Financial Information

The unaudited pro forma consolidated financial statements of the Company as of December 31, 2022, and for the six months ended December 31, 2022, and for the year ended June 30, 2022, together with the related notes to the unaudited pro forma condensed consolidated financial information, are included as Exhibit 99.1 to this Current Report and are incorporated herein by reference.

---

| | |
|:---|:---|
| **Exhibit**<br> **Number** | **Exhibit Description** |
| 99.1 | [Pro forma financial information of Esports Entertainment Group, Inc.](ex99-1.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

**Forward-Looking Statements**

The information contained herein includes forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "will be," "will continue," "will likely result," and similar expressions. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements, including, the amount of debt for equity exchanges we will be able to effect, the conversion price, and for what period of time such exchanges will continue to occur, if at all. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, and those discussed in other documents we file with the SEC, including, our significant indebtedness, and our obligations under our Senior Convertible Note, our ability to continue as a going concern, and our ability to regain compliance with Nasdaq Listing Rules. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future, unless required by law. The safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of such Act.

**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: March 2, 2023

---

| | |
|:---|:---|
| **ESPORTS ENTERTAINMENT GROUP, INC.** | **ESPORTS ENTERTAINMENT GROUP, INC.** |
| By: | */s/ Michael Villani* |
| Name: | Michael Villani |
| Title: | Interim Chief Financial Officer and Controller |

---

## Exhibit 99.1

**Exhibit 99.1**

**UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION**

On February 24, 2023, ("Closing Date"), Esports Entertainment Group, Inc., a Nevada corporation ("Company"), pursuant to a stock purchase agreement ("Purchase Agreement") dated February 14, 2023 with Gameday Group PLC, a Malta company ("Purchaser"), completed the divestiture of Prozone Limited, a Malta company containing the online casino and sportsbook business, including the Bethard brand (the "Bethard Business"), that is licensed in Malta and Sweden (and together the sale of Prozone Limited with the Bethard Business herein referred to as the "Sale of the Bethard Business)." The purchase consideration was determined by the Company to be $8,090,965 comprised of cash received on the Closing date of €1,650,000 ($1,739,882 using exchange rates in effect on the Closing Date), holdback consideration, of €150,000 ($158,171 using exchange rates in effect on the Closing Date) and the Company's settlement of its contingent consideration liability of €5,872,989 ($6,192,912 using exchange rates in effect on the Closing Date) that had originated from its acquisition of the Bethard Business on July 13, 2021. The Purchaser further assumed net working capital of the Bethard Business consisting primarily of accounts payable and accrued liabilities estimated to be €1,238,552 ($1,306,021 using exchange rates at the Closing Date).

The Sale of the Bethard Business was determined to be a disposition of a significant business under Item 2.01 of Form 8-K. As a result, the Company prepared the accompanying unaudited pro forma condensed consolidated financial statements included herein in accordance with Article 11 of Regulation S-X and based on historical financial information of the Company. The accompanying unaudited pro forma condensed consolidated balance sheet gives effect to the Sale of the Bethard Business as if it had occurred on December 31, 2022. The accompanying unaudited pro forma condensed consolidated statement of operations for the six month period December 31, 2022 and the year ended June 30, 2022 gives effect to the Sale of the Bethard Business as if it had occurred on July 1, 2021, the beginning of the earliest period presented.

The accompanying unaudited pro forma condensed consolidated financial information includes pro forma adjustments that are directly attributable to the Sale of the Bethard Business and are factually supportable. Pro forma adjustments are presented for informational purposes only and are described in the accompanying notes based on information and assumptions currently available at the time of the filing of the Current Report on Form 8-K to which the accompanying unaudited pro forma condensed consolidated financial information is included as an exhibit. The accompanying unaudited pro forma condensed consolidated financial information should be read in conjunction with:

(i) the
 historical unaudited condensed consolidated financial statements of the Company for the three and six months ended December 31, 2022
 included in the Company's Quarterly Report on Form 10-Q filed with the SEC on February 21, 2023;

(ii) the
 audited consolidated financial statements and accompanying notes and "Management's Discussion and Analysis of Financial
 Condition and Results of Operations" included in the Company's Annual Report on Form 10-K for the year ended June 30,
 2022 filed with the SEC on October 13, 2022;

(iii) the
 announcement reporting the Company had entered into a share purchase agreement with Gameday Group PLC dated February 14, 2023, and
 also an Amendment and Waiver Agreement on February 16, 2023 to its Senior Convertible Note to complete the Sale of the Bethard Business,
 which are included in the Current Report on Form 8-K filed with the SEC on February 17, 2023; and

(iv) The
 announcements to report the holder of the Senior Convertible Note had effected debt for equity exchanges as included in the Current
 Report on Form 8-K filed with the SEC on February 6, 2023 and the Current Report on Form 8-k filed with the SEC on February 13, 2023.

The unaudited pro forma financial information has been presented for informational purposes only and is not necessarily indicative of what the Company's results of operations or financial condition would have been had the Sale of the Bethard Business been completed as of the date and for the periods presented. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma transaction accounting adjustments represent management's estimates based on information available as of the date of these unaudited pro forma condensed combined financial statements and are subject to change as additional information becomes available and analyses are performed.

**Esports Entertainment Group, Inc.**

**Consolidated Balance Sheet**

**December 31, 2022**

**(Unaudited)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Historical** | **Transaction Accounting Adjustments** | **Notes** | **Other Transaction Accounting Adjustments** | **Pro Forma** |
| **ASSETS** |  |  |  |  |  |
| **<u>Current assets</u>** |  |  |  |  |  |
| Cash | $682378 | $867407 | (a),(b) | $11284 (k) | $1561069 |
| Restricted cash | 677730 | 869941 | (a) |  | 1547671 |
| Accounts receivable, net | 894204 |  |  |  | 894204 |
| Receivables reserved for users | 2965926 | (1613737) | (b) |  | 1352189 |
| Other receivables | 1292776 | (1014032) | (a),(b) |  | 278744 |
| Prepaid expenses and other current assets | 1358808 | (113818) | (b) | - | 1244990 |
| &nbsp;&nbsp;&nbsp;**Total current assets** | 7871822 | (1004239) |  | 11284 | 6878867 |
| Equipment, net | 35966 |  |  |  | 35966 |
| Operating lease right-of-use asset | 126064 |  |  |  | 126064 |
| Intangible assets, net | 27048230 | (11703918) | (b) |  | 15344312 |
| Goodwill | 6584114 | (2153419) | (c) |  | 4430695 |
| Other non-current assets | 1522328 | - |  | - | 1522328 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**TOTAL ASSETS** | $43188524 | $(14861577) |  | $11284 | $28338231 |
| **LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY** |  |  |  |  |  |
| **<u>Current liabilities</u>** |  |  |  |  |  |
| Accounts payable and accrued expenses | $14399368 | $(1240317) | (b) | $(2500000) (j) | $10659051 |
| Liabilities to customers | 2848252 | (1613737) | (b) |  | 1234515 |
| Deferred revenue | 1090333 |  |  |  | 1090333 |
| Senior convertible note | 32221573 |  |  | (16311573) (i)(j) | 15910000 |
| Derivative liability | 799954 |  |  |  | 799954 |
| Current portion of notes payable and other long-term debt | 75612 |  |  |  | 75612 |
| Operating lease liability - current | 422344 |  |  |  | 422344 |
| Contingent consideration - current | 3012978 | (3012978) | (d) | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current liabilities** | 54870414 | (5867032) |  | (18811573) | 30191809 |
| Warrant liability | 2456730 |  |  |  | 2456730 |
| Deferred income taxes |  |  |  |  |  |
| Operating lease liability - non-current | 549482 |  |  |  | 549482 |
| Contingent consideration - non-current | 3179934 | (3179934) | (d) | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | 61056560 | (9046966) |  | (18811573) | 33198021 |
| Commitments and contingencies (Note 13) |  |  |  |  |  |
| **<u>Mezzanine equity:</u>** |  |  |  |  |  |
| 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 $9,195,450 | 7931182 |  |  |  | 7931182 |
| Series B redeemable preferred stock, $0.001 par value, 1,000 authorized, 1,000 shares issued and outstanding | 1000 |  |  |  | 1000 |
| **<u>Stockholders' equity</u>** |  |  |  |  |  |
| Preferred stock $0.001 par value; 10,000,000 shares authorized |  |  |  |  |  |
| Common stock $0.001 par value; 500,000,000 shares authorized, 84,553,944 shares issued and outstanding as of December 31, 2022 Historical and Common stock $0.001 par value; 500,000,000 shares authorized, 3,225,577 shares issued and outstanding December 31, 2022 Pro forma | 84554 |  |  | (81328) (h)(i)(k) | 3226 |
| Additional paid-in capital | 148922856 |  |  | 19621595 (h)(i)(k) | 168544451 |
| Accumulated deficit | (167441699) | (7934975) | (e) | (717410) (j)(k) | (176094084) |
| Accumulated other comprehensive loss | (7365929) | 2120365 | (f) | - | (5245564) |
| &nbsp;&nbsp;&nbsp;**Total stockholders' equity** | (25800218) | (5814611) |  | 18822857 | (12791972) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | $43188524 | $(14861577) |  | $11284 | $28338231 |

---

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.

**Esports Entertainment Group, Inc.**

**Consolidated Statement of Operations**

**For The Six months Ended December 31, 2022**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Historical** | **Transaction Accounting Adjustments** | **Other Transaction Accounting Adjustments** | **Pro Forma** |
| Net revenue | $16014669 | $(4393562) (b) | $- | $11621107 |
| **Operating costs and expenses:** |  |  |  |  |
| Cost of revenue | 6122071 | (2070246) (b) |  | 4051825 |
| Sales and marketing | 4288892 | (1360062) (b) |  | 2928830 |
| General and administrative | 17030436 | (2662090) (b) |  | 14368346 |
| Asset impairment charges | 16135000 | - | - | 16135000 |
| Total operating expenses | 43576399 | (6092398) | - | 37484001 |
| **Operating income (loss)** | (27561730) | 1698836 | - | (25862894) |
| **Other income (expense):** |  |  |  |  |
| Interest expense | (2029782) |  |  | (2029782) |
| Loss on conversion of Senior Convertible Notes |  |  |  |  |
| Loss on extinguishment of senior convertible note |  |  |  |  |
| Change in fair value of derivative liability on Senior Convertible Note | 8599666 |  |  | 8599666 |
| Change in fair value of warrant liability | 5022288 |  |  | 5022288 |
| Change in fair value of contingent consideration | (2864551) | 2864551 (d) |  |  |
| Other non-operating income (loss) | 532836 | 14921 (b) | - | 547757 |
| Total other income (expense), net | 9260457 | 2879472 | - | 12139929 |
| Loss before income taxes | (18301273) | 4578308 | - | (13722965) |
| Income tax benefit (expense) | - | - | - | - |
| **Net loss** | $(18301273) | $4578308 | $- | $(13722965) |
| Dividend on 10% Series A cumulative redeemable convertible preferred stock | (401256) |  |  | (401256) |
| Accretion of 10% Series A cumulative redeemable convertible preferred stock to redemption value | (149802) | - | - | (149802) |
| **Net loss attributable to common stockholders** | $(18852331) | $4578308 | $- | $(14274023) |
| Net loss per common share: |  |  |  |  |
| Basic and diluted loss per common share | $(0.32) |  |  | $(24.29) |
| Weighted average number of common shares outstanding, basic and diluted | 58764491 |  | (58176846) (h) | 587645 |

---

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.

**Esports Entertainment Group, Inc.**

**Consolidated Statement of Operations**

**For The Year Ended June 30, 2022**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Historical** | **Transaction Accounting Adjustments** | **Other Transaction Accounting Adjustments** | **Pro Forma** |
| Net revenue | $58351650 | $(16580702) (b) | $- | $41770948 |
| **Operating costs and expenses:** |  |  |  |  |
| Cost of revenue | 24164661 | (6460964) (b) |  | 17703697 |
| Sales and marketing | 25728220 | (5362056) (b) |  | 20366164 |
| General and administrative | 51321978 | (7175538) (b) |  | 44146440 |
| Asset impairment charges | 46498689 | - | - | 46498689 |
| Total operating expenses | 147713548 | (18998558) | - | 128714990 |
| **Operating loss** | (89361898) | 2417856 | - | (86944042) |
| **Other income (expense):** |  |  |  |  |
| Interest expense | (6423039) |  |  | (6423039) |
| Loss on conversion of Senior Convertible Notes | (5999662) |  |  | (5999662) |
| Loss on extinguishment of senior convertible note | (28478804) |  |  | (28478804) |
| Change in fair value of derivative liability on Senior Convertible Note | (10882241) |  |  | (10882241) |
| Change in fair value of warrant liability | 31468270 |  |  | 31468270 |
| Change in fair value of contingent consideration | 2355308 | (2355308) (d) |  |  |
| Other non-operating income (loss) | (584466) | (8384986) (e) | - | (8969452) |
| Total other income (expense), net | (18544634) | (10740294) | - | (29284928) |
| Loss before income taxes | (107906532) | (8322438) | - | (116228970) |
| Income tax benefit (expense) | 5674442 | (5671861) (g) | - | 2581 |
| **Net loss** | $(102232090) | $(13994299) | $- | $(116226389) |
| Dividend on 10% Series A cumulative redeemable convertible preferred stock | (501570) |  |  | (501570) |
| Accretion of 10% Series A cumulative redeemable convertible preferred stock to redemption value | (182046) |  |  | (182046) |
| **Net loss attributable to common stockholders** | $(102915706) |  |  | $(116910005) |
| Net loss per common share: |  |  |  |  |
| Basic and diluted loss per common share | $(3.56) |  |  | $(404.71) |
| Weighted average number of common shares outstanding, basic and diluted | 28886918 |  | (28598048) (h) | 288870 |

---

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.

**Esports Entertainment Group, Inc.**

**Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements**

**1. Description of the Transaction**

On February 24, 2023, ("Closing Date"), Esports Entertainment Group, Inc., a Nevada corporation ("Company"), pursuant to a stock purchase agreement ("Purchase Agreement") dated February 14, 2023 with and Gameday Group PLC, a Malta company ("Purchaser"), completed the divestiture of Prozone Limited, a Malta company containing the online casino and sportsbook business, including the Bethard brand (the "Bethard Business"), that is licensed in Malta and Sweden (and together the sale of Prozone Limited with the Bethard Business herein referred to as the "Sale of the Bethard Business)." The purchase consideration was determined by the Company to be $8,090,965 comprised of cash received on the Closing date of €1,650,000 ($1,739,882 using exchange rates in effect on the Closing Date), holdback consideration, of €150,000 ($158,171 using exchange rates in effect on the Closing Date) and the Company's settlement of its contingent consideration liability of €5,872,989 ($6,192,912 using exchange rates in effect on the Closing Date) that had originated from its acquisition of the Bethard Business on July 13, 2021. The Purchaser further assumed net working capital of the Bethard Business consisting primarily of accounts payable and accrued liabilities estimated to be €1,238,552 ($1,306,021 using exchange rates at the Closing Date).

**2. Transaction Accounting Adjustments**

(a) Represents
 the cash consideration received on the Closing Date of €1,650,000 ($1,739,882 using exchange rates in effect on the Closing
 Date), for which 50% of the proceeds received from the Sale of Bethard, or €825,000 ($869,941 using exchange rates in effect
 on the Closing Date) are required to be deposited into a bank account in favor of the debt holder pursuant to the terms of an Amendment
 and Waiver to the Senior Convertible Note dated February 16, 2023. A receivable of €150,000 ($158,171 using exchange rates in
 effect on the Closing Date) is also recorded in Other receivables on the unaudited condensed consolidated balance sheet to reflect
 the holdback consideration that is payable to the Company under the terms of the Purchase Agreement at the completion of the two
 month holdback period.

(b) Represents
 the removal of historical assets and liabilities, and revenues and expenses directly attributed to the Sale of the Bethard business.

(c) Represents
 the Company's preliminary estimate of goodwill allocated to the Sale of the Bethard Business which is based on the estimated
 fair value of the Sale of the Bethard Business relative to the estimated fair value of the iGaming reporting unit.

(d) Represents
 a release of the Company's obligation to pay the remaining Contingent consideration – current and Contingent consideration
 – non-current liabilities totaling $6,192,912, which had originated from the acquisition of the Bethard Business. The effects
 of the change in fair value of contingent consideration related to the Bethard Business, being an expense of $2,864,551 for the six
 months ended December 31, 2022 and a benefit of $2,355,308 for the year ended June 30, 2022, were also removed from the unaudited
 condensed consolidated statements of operations for each respective period.

(e) Represents
 the estimated loss on Sale of the Bethard Business.

(f) Represents
 the release of the cumulative translation adjustment of Prozone Limited for inclusion in the loss on Sale of the Bethard Business.

(g) Represents
 a reversal of an income tax benefit that was previously recorded based on the tax attributes of the Bethard Business. The Company
 had previously recorded a reduction in the valuation allowance in the amount of $5,671,861 during the year ended June 30, 2022 based
 on the deferred tax liabilities of the Bethard Business, and their impact on the Company's estimate of realizability of its
 deferred tax assets. The Company maintains a full valuation allowance against its net deferred tax asset position and therefore the
 deferred taxes of Prozone had no effect on the unaudited pro forma condensed consolidated balance sheet at December 31, 2022.

**3. Other Transaction Accounting Adjustments**

Since December 31, 2022, the Company has entered into transactions that were not directly attributable to the Sale of the Bethard Business but were determined to be material for investors and users of the pro forma condensed combined financial statements. In accordance with Article 11 of Regulation S-X, these transactions are included as other transaction accounting adjustments, and are described below.

(h) The
 Company announced on February 21, 2022 a 1-for-100 reverse stock split of its outstanding common stock. Beginning on February 22,
 2022, the Company's common stock opened for trading on a split adjusted basis. The adjustment reflects the effects of the reverse
 stock split on common stock, additional paid-in capital, earnings per share and weighted average shares outstanding.

(i) On
 January 27, 2023, the Company received the written consent of the holder of its outstanding Senior Convertible Note to lower the
 conversion price of the Senior Convertible Note into shares of Common Stock under Section 7(g) of the Senior Convertible Note to
 90% of the lowest VWAP (as defined in the Senior Convertible Note) of the Common Stock for a trading day during the five (5) consecutive
 trading day period ending, and including, the applicable date that the conversion price is lowered for purposes of a conversion (as
 adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events during such measuring period)
 until further written notice to the holder from the Company. Since January 27, 2023, the Company has converted $19,261,583
 of principal outstanding under the Senior Convertible Note to common stock resulting in the issuance of 2,242,143 share on
 a post reverse stock split basis. The reduction of the Senior Convertible Note through the Conversions was a net $16,311,573 after
 the balance was increased for the converted accrued liabilities and incurred fees discussed in (j) below.

(j) The
 Company increased the Senior Convertible Note by $2,950,000, for converted accrued liabilities
 of $2,500,000 and incurred fees of $450,000, in connection with the signing of the Amendment and Waiver to the Senor Convertible
 Note dated February 16, 2023, which was required for the Company to proceed with the Sale of the Bethard Business.

(k) In addition to the conversion of principal outstanding
 under the senior convertible note discussed above, subsequent to December 31, 2022, the Company issued shares of common stock and
 issued options as follows:

● 25,000 shares and 25,000 options were issued to the CEO subsequent to December 31, 2022, pursuant to his employment agreement. The share based compensation expense related to the issuance of the common stock and stock options was $185,000 and $82,400, respectively;

● 112,840 Pre-funded Warrants were redeemed for shares of common stock for net proceeds of $11,284;

● Other issuances of 55 shares of common stock.