EEG published a strategic update on 16 October, providing details of its activities and financial performance during the financial year. This update reflects the challenges faced by EEG in the 12 months ending 30 June, following a tough financial year in 2021.
In October 2022, EEG defaulted on convertible notes issued in 2021, resulting in a creditor taking control of the company’s future. These notes had a principal value of $35.0m. Furthermore, in December, EEG contemplated abandoning its igaming operations and announced the departure of former CEO Grant Johnson. The company narrowly avoided delisting from the Nasdaq stock exchange during the same month.
In January 2023, CFO and COO Daniel Mathews resigned from his positions, followed by former CEO Grant Johnson filing a lawsuit against EEG, claiming wrongful termination. In February, EEG sold its Bethard online casino and sportsbook business for €9.5m.
In April, newly-appointed CEO Alex Igelman highlighted EEG’s expansion plans in the business-to-consumer (B2C) sector, along with divestment strategies. Additionally, EEG entered into an agreement to convert a significant portion of its debt into company stock.
Financially, EEG reported total revenue of $23.0m for the financial year 2023, a significant decrease from $58.4m in 2022. However, the cost of revenue decreased by 63.6% to $8.8m. Sales and marketing expenses were reduced by 77.0% to $5.9m, while general and administrative expenses declined by 43.6% to $28.9m. The net loss for the year stood at $32.2m, as compared to a loss of $102.2m in 2022.
Despite the challenges, CEO Alex Igelman expressed confidence in EEG’s future, attributing the positive outlook to strategic decisions and cost reduction measures taken by the company. EEG expects a $4m reduction in annual operating expenses and has reduced total liabilities by approximately $51.8m since January. The company’s focus going forward will be on developing initiatives related to esports and igaming.
In conclusion, EEG’s strategic update reflects a turbulent financial year, marked by defaults, management changes, and divestments. However, with strategic actions undertaken and a focus on emerging opportunities in esports and igaming, EEG aims to position itself for a promising future in the rapidly growing wagering market.
