Esports Entertainment Group has announced the departure of Grant Johnson from his position as Chairman and Chief Executive Officer of the company, a move that became effective earlier this month, on December 3. In a press statement, the esports and online betting company said its Board of Directors has identified “several candidates” to be EEG’s next CEO, and that these candidates are currently going through the evaluation process. The operator has faced a turbulent time in recent years amid brand closures and large operating losses.
“The company has identified a preferred candidate for interim/acting CEO, and we will make a formal announcement naming this individual in the coming days pending a formal approval by the Nominating and Corporate Governance Committee,” said the firm last week. “The company has also announced Jan Jones Blackhurst as Chair of the Board of Directors.”
“Grant recognized the value of esports and online gambling and founded EEG on that basis. On behalf of the Board, we wish him well,” stated Jones Blackhurst. “The company is looking forward to bringing in new leadership to work with the Board to realize the full potential of our acquired esports businesses.”
News of Johnson’s departure comes as the company advances on its plans to reduce costs and as it considers strategic options for iGaming assets that do not contribute to profits and cash flow. The company has recently sold its online casino business in Spain, expected to close today, Monday; and closed the Argyll iGaming operations in the United Kingdom and Ireland on December 7 due to high costs to operate in these markets and an inability to generate profits.
But EEG is also considering exiting the iGaming vertical altogether and has initiated a process to evaluate strategic options, including a sale of iGaming assets due to “increasing regulatory burdens and competition.” The new CEO will be tasked with assessing the value of the online gaming assets and determining the next steps, said the company.
The operator has also escaped Nasdaq delisting this month, and will continue listing on the stock exchange under the condition it drastically increases its share price by February. EEG is seeking to continue executing on its plan to be publicly listed while restructuring its debt and capitalizing on its esports assets.
The Nasdaq Hearings Panel granted EEG’s request for continued listing on November 30, subject to its evidencing compliance with the minimum bid price requirement by February 7, evidencing compliance with the shareholder equity requirement of a minimum $2.5 million stockholder’s equity by March 31, and adhering “to certain other conditions and requirements.”
The company is also in discussions with its debt holder to restructure its payment obligations, including but not limited to eliminating the derivative liability on its consolidated balance and addressing the firm’s default status under the debt. “The company is optimistic that an agreement can be reached to the benefit of both parties in the near term,” said the firm.
Moreover, EEG announced it recently received a non-binding letter of intent from a third party that offered to merge its assets, including intellectual property, with that of the operator. “The combined company would focus on growing esports revenues,” noted EEG, highlighting the proposal is currently “under consideration.”
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