Esports Entertainment Group Inc (NASDAQ:GMBL) is raising $35 million via convertible notes to fund new acquisitions.
The gaming company said it entered into a definitive agreement with an institutional investor for the sale of $35 million in principal amount of 8% senior convertible notes with a maturity date of two years following the date of issuance in a private placement.
The notes are convertible into shares of common stock at a conversion price of $17.50 per share.
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As part of the private placement, the company said it is issuing to the investor Series A warrants to purchase up to 2 million shares of common stock and Series B warrants to purchase up to 2 million shares of common stock at an exercise price of $17.50.
The Series A warrants are exercisable for four years following the date of issuance and the Series B warrants are exercisable for two years following the date of issuance. The Series B warrants are not exercisable until vesting under certain conditions.
Esports Entertainment has the right to call the Series A and Series B warrants, subject to the satisfaction of certain conditions for 30 consecutive trading days.
Maxim Group LLC is acting as the sole placement agent in connection with the offering.
Newark, New Jersey-based Esports said it plans to use the net proceeds of the offering primarily for working capital and acquisition related expenses.
The financing is expected to close by June 1.
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