Esports Entertainment Group (EEG) is in hot water according to their last quarterly report, which casts “substantial doubt about its ability to continue as a going concern for at least one year.” The report also stated that EEG “has not maintained compliance with certain debt covenants and is currently in default.” Following the news, CEO Grant Johnson spoke about what the company would have to do to alter its repayment plans and cut costs.
“To address our liquidity position and improve our ability to invest in the business and adequately support our growth initiatives, we are actively working with our lender on key modifications to the loan and hope to have more to share on this front in the near-term,” said Johnson.
Johnson touched on a number of strategies the company is looking at to achieve these goals including “dramatically simplify[ing]” its esports space, “aggressively” cut costs across all of its seven brands by de-emphasizing core assets and removing “duplicative functions.”
“We have also identified further avenues to increase our cost savings and will pursue these in the coming months,” added Johnson. “We are encouraged by the early results of these efforts and expect them to have a significant positive impact on our future results, including our progress towards profitability, with a goal to achieve break-even on an annualized basis by early fiscal 2023.”
Since the announcement, EEG has altered its forecasts for the full year, with revenue now expected in the range of $55 million and $60 million, down from the initial range of $70 million to $75 million.
(All information was provided by iGaming Business)