ESPORTS ENTERTAINMENT GROUP, INC. : Entry into a Material Definitive Agreement, Other Events (form 8-K)

Item 1.01 Entry into a Material Definitive Agreement.

Letter Agreement

On November 2, 2021, Esports Entertainment Group, Inc. (the “Company”) entered
into a letter agreement (the “Letter Agreement”) with Alto Opportunity Master
Fund, SPC – Segregated Master Portfolio B (“Alto”) pursuant to which Alto agreed
to waive certain rights contained in that certain Securities Purchase Agreement,
dated as of May 28, 2021 (the “Purchase Agreement”), between the Company and
Alto, for the purpose of permitting the Company to designate and issue shares of
10.0% Series A Cumulative Redeemable Convertible Preferred Stock (the “Series A
Preferred Stock”).

Under the Letter Agreement, Alto provided a waiver of (i) the prohibition
against the issuance of Common Stock Equivalents (as defined in the Purchase
Agreement) set forth in Section 4.13 of the Purchase Agreement in connection
with the issuance of the Series A Preferred Stock only, and (ii) the
prohibitions in Section 14(e) of the Note (as defined in the Purchase Agreement)
to permit (a) the payment of a dividend of 10% per annum on the Series A
Preferred Stock only and (b) the redemption of the Series A Preferred Stock upon
a Change of Control (as defined in the Certificate of Designation) only.

In addition, Alto agreed to forbear on any action until December 31, 2021 (the
“Forbearance Termination Date”) in connection with the Company’s delays in
filing a registration statement with regard to Alto’s securities as required by
the Transaction Documents (as defined in the Purchase Agreement). Alto further
agreed that, if and only if the Company obtains Shareholder Approval (as defined
in the Purchase Agreement) on or prior to the Forbearance Termination Date, Alto
shall irrevocably waive the Company’s obligation to pay $800,000 of the amount
owed to Alto due to the registration statement filing delays (the “Initial
Registration Delay Payment”). The Company and Alto agreed that $700,000 of the
Initial Registration Delay Payment shall remain due and owing to Alto and such
amount shall be added to the principal amount of the Note on the Forbearance
Termination Date. The Company agreed that, if the Company does not obtain
Shareholder Approval by the Forbearance Termination Date, the Company’s
obligation to pay $800,000 of the Initial Registration Delay Payment is
immediately payable to Alto in cash.

The above-mentioned waivers and forbearances were provided by Alto to the
Company in consideration of the Company granting to Alto a 10% redemption
premium in the event the Company redeems the amounts owed to Alto prior to the
Note’s maturity date.

The foregoing description of the material terms of the Letter Agreement is
qualified in its entirety by reference to the full agreement, a copy of which
will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for
the period that will end on December 31, 2021.

Item 8.01 Other Events.

10.0% Series A Cumulative Redeemable Convertible Preferred Stock

On November 3, 2021, the Company issued a press release announcing the
commencement of an underwritten registered public offering of its 10.0% Series A
Cumulative Redeemable Convertible Preferred Stock, par value $0.001 per shares
(the “Series A Preferred Stock”), at a price of $10.00 per share. Each share of
Series A Preferred Stock will be convertible into shares of the Company’s common
stock, at a conversion price of $17.50 per common share, at any time at the
option of the holder. A copy of the press release is attached hereto as Exhibit
99.1 and is incorporated herein by reference.

Metaverse

In Note 19, Subsequent Events to the audited financial statements for the year
ended June 30, 2021 that appeared in the Company’s Annual Report on Form 10-K,
filed with the SEC on October 13, 2021, the Company provided disclosure
regarding a Services Agreement, Loan Agreement and Put-Agreement with Metaverse
Partners LP (“Metaverse”). To date, the Company has not received any funds from
Metaverse and, after consultation with the Company’s lender, the Company has
decided not to move forward with Metaverse at this time.

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