© Reuters.
The Esports Entertainment Group (NASDAQ: GMBL) disclosed that it has issued a secured promissory note amounting to about $1.42 million, along with amendments to its Series C and D Convertible Preferred Stock. The agreement signed on March 7, 2024, provides the holder with a first priority security interest in all of the firm’s personal property, both tangible and intangible.
The note has an annual interest rate of 10%, which gets added quarterly to the principal amount, and has an expiration date of March 7, 2026. If the company fails to comply, the interest rate would surge to 12%. This contract includes standard default terms like failure of payment and violation of covenants. Moreover, the company pledged to protect the note holder as detailed in the agreement.
Such financial maneuvering from Esports Entertainment Group is a tactical measure as it tries to steer its capital structure amid the unpredictable conditions of the esports sector. The action could possibly grant the company the flexibility to handle its financial resources and invest in growth prospects.
The repercussions of this financial arrangement are under watch by investors and market analysts as it mirrors the company’s strategy to obtain more capital and reorganise its present debts. The secured note along with the amended conditions for the preferred stock make up a crucial aspect of the company’s financial strategy.
This report was produced with the assistance of AI and subsequently examined by an editor. You can refer to our T&C for further details.