GMBL 8-K
Esports Entertainment Group, Inc. (GMBL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 16, 2021
ESPORTS ENTERTAINMENT GROUP, INC.
(Exact name of registrant as specified in its charter)
| Nevada | 001-39262 | 26-3062752 | ||
| (State
or other jurisdiction of incorporation or organization) |
(Commission
File Number) |
(IRS
Employer Identification No.) |
13/14 Penthouse Office, Mannarino Road
Birkirkara, Malta, BKR 9080
(Address of principal executive offices)
356 2713 1276
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock | GMBL | The Nasdaq Stock Market LLC | ||
| Common Stock Purchase Warrants | GMBLW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02 Results of Operations and Financial Condition.
On February 16, 2021, Esports Entertainment Group, Inc. (the “Company”) issued a press release announcing the financial and operating results of the Company for the quarter ended December 31, 2020. The text of the press release is furnished as Exhibit 99.1 and incorporated herein by reference.
Additionally, on February 16, 2021, the Company held an earnings phone call open to the public (the “Earnings Call”). Mr. Grant Johnson, the Company’s Chief Executive Officer along with Mr. Daniel Michael Marks, the Company’s Chief Financial Officer, discussed the financial and operating results of the Company for the quarter ended December 31, 2020. The script for the Earnings Call is furnished hereto as Exhibit 99.2 and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
The information set forth in Item 2.02 of this Current Report on Form 8-K is incorporated by reference into this Item 7.01.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K includes information that may constitute forward-looking statements. These forward-looking statements are based on the Company’s current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to the Company. By their nature, forward-looking statements address matters that are subject to risks and uncertainties. Forward looking statements include, without limitation, statements relating to projected industry growth rates, the Company’s current growth rates and the Company’s present and future cash flow position. A variety of factors could cause actual events and results, as well as the Company’s expectations, to differ materially from those expressed in or contemplated by the forward-looking statements. Risk factors affecting the Company are discussed in detail in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by applicable securities laws.
The information in Item 2.02 and Item 7.01 to this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
The Press Release and script of the Earnings Call can also be found on our website at https://esportsentertainmentgroup.com.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description of Exhibit | |
| 99.1 | Press Release dated February 16, 2021 | |
| 99.2 | Script of Earnings Call with Mr. Grant Johnson and Mr. Daniel Michael Marks, dated February 16, 2021 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ESPORTS ENTERTAINMENT GROUP, INC. | ||
| Dated: February 17, 2021 | By: | /s/ Grant Johnson |
| Grant
Johnson Chief Executive Officer | ||
Exhibit 99.1
Esports Entertainment Group Reports Fiscal Second Quarter 2021 Financial Results
Feb 16, 2021
Company raises fiscal 2021 revenue guidance to $18 million; fiscal 2022 guide $70 million; Conference call to discuss Q2F21 results today at 4:30 pm ET
Newark, New Jersey–(Newsfile Corp. – February 16, 2021) – Esports Entertainment Group, Inc. (NASDAQ: GMBL) (NASDAQ: GMBLW) (or the “Company”), an esports and online gambling company, today announced its financial results for the fiscal second quarter ended December 31, 2020, as well as recent corporate developments.
Business Highlights
| ● | Signed binding agreement to acquire Helix eSports and ggCircuit in deal valued at $43 million | |
| ● | VIE.bet and SportNation.com brands approved to market and operate their services in more than 150 jurisdictions globally through the Company’s Malta gaming license secured in April 2020 | |
| ● | Filed first US gaming license application with the New Jersey Division of Gaming Enforcement; expect approval in Q2 of calendar 2021 | |
| ● | Acquired Esports Gaming League, with a history of partnerships that include Microsoft, Red Bull Arsenal FC, and Activision; subsequent to acquisition, EGL announced first-of-their kind deals with Baltimore Ravens, Philadelphia Eagles, Philadelphia Union, LA Kings, and LA Galaxy to be official esports tournament provider | |
| ● | Opened access to new markets with acquisition of Lucky Dino, an established Malta licensed online casino operator with its own proprietary casino platform; Lucky Dino generated $21 million revenue and $3.8 million EBITDA in FY20. | |
| ● | Closed $30 million registered direct offering priced at-the-market |
“The foundation we have built is primed to generate rapid growth in the quarters ahead,” commented Grant Johnson, CEO of Esports Entertainment Group. “Revenue growth, driven by our Argyll Entertainment acquisition, accelerated throughout the fiscal second quarter. With the acquisitions of Lucky Dino, Helix Esports and ggCircuit, we have raised our revenue guidance from $13 million to $18 million for fiscal 2021. Additional key milestone achievements subsequent to quarter end, including completing our acquisition of EGL and greatly expanding the eligible operating jurisdictions for our VIE and SportNation brands, provide further growth opportunities.”
Johnson continued, “The COVID-19 pandemic has absolutely accelerated the rapid growth of esports with mainstream broadcasts to national TV audiences on ESPN and Fox, as well as growing interest from traditional professional sports franchises, including top NFL, NHL, and MLS teams. We believe the diversified esports and online gambling company we are building is ideally positioned to capitalize on these trends, providing investors broad exposure to the rise of competitive gaming and the legalization of online gambling in the US.”
“Looking ahead, we are building on our momentum, and with today’s capital raise of $30 million, we have the resources to further accelerate the monetization of our robust three pillar strategy,” concluded Johnson.
F2Q21 Financial Results
Revenue for the three months ended December 31, 2020 totaled $2.4 million, an increase of $2.4 million over the $0 recorded for the three months ended December 31, 2019. The increase was primarily attributable to the acquisition of Argyll Entertainment as we are now revenue a generating company.
Turnover, Gross Gaming Revenue and Net Revenue returned to pre-COVID levels in October, with total handle above $16 million for the month and revenues above $700K. Total handle for December was $20 million, with revenues above $850K.
Total operating expenses for the three months ended December 31, 2020 totaled $8.1 million, an increase from the $0.7 million recorded for the three months ended December 31, 2019. The increase was primarily attributable to the increased payroll, stock compensation, marketing, legal and professional services fees related to increased business activity.
Total net loss for the three months ended December 31, 2020 was $7.3 million, driven principally by reduced revenues related to the measures taken post the regular UK Gambling Commission audit of Argyll Entertainment, as well as Equity Based Comp, Depreciation and Change in the Fair value of Warrant liabilities, totaling $3.5m between them.
At December 31, 2020, we had cash and cash equivalents totaling $7.6 million and shareholders’ equity was $14.0 million at December 31, 2020.
Guidance
The Company raised its fiscal 2021 revenue guidance to $18 million, up from $13 million, reflecting the addition of Lucky Dino, Helix Esports and ggCircuit to its core Argyll and VIE platforms. On a proforma basis, including the acquisitions of Helix Esports and ggCircuit, the Company expects to report $70 million in revenue in fiscal 2022.
Fiscal Second Quarter 2021 Conference Call
The Company will host a conference call today at 4:30 p.m. Eastern Time to discuss its F2Q21 financial results. Participants may join the conference call by dialing 1-855-327-6837 (U.S. Toll-Free) or 1-631-891-4304 (International). A live webcast of the conference call will also be available at http://public.viavid.com/index.php?id=143549.
For those unable to participate in the conference call, a telephonic replay of the call will also be available shortly after the completion of the call, until 11:59 pm ET on Monday, November 30, 2020, by dialing 1-844-512-2921 (United States) or 1-412-317-6671 (International) and entering the replay pin number: 10013196.
About Esports Entertainment Group
Esports Entertainment Group, Inc. is an esports and online gambling company. The Company operates a number of entities across three key pillars: 1) esports entertainment and infrastructure, 2) esports wagering, 3) iGaming. The Company maintains offices in New Jersey, the UK and Malta. The Company maintains offices in New Jersey, the UK and Malta. For more information visit www.esportsentertainmentgroup.com.
Forward Looking Statements
The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.
Contact:
U.S. Investor Relations
RedChip Companies, Inc.
Dave Gentry
407-491-4498
[email protected]
Media & Investor Relations Inquiries
Esports Entertainment Group, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
Exhibit 99.2
CORPORATE PARTICIPANTS
Daniel Michael Marks Esports Entertainment Group, Inc. - CFO, Principal Accounting Officer & Director
Grant R. Johnson Esports Entertainment Group, Inc. - CEO, Chairman, President, Secretary & Treasurer
CONFERENCE CALL PARTICIPANTS
Lisa Springer Singular Research, LLC - Research Analyst
Michael A. Kupinski NOBLE Capital Markets, Inc., Research Division - Director of Research and Senior Media & Entertainment Analyst
PRESENTATION
Operator
Good afternoon, and welcome to Esports Entertainment Group’s Second Quarter Fiscal 2021 Conference Call. As a reminder, this call is being recorded and all participants are in listen-only mode. We will open the call for question-and-answer after the presentation.
On the call today is Esports Entertainment Group’s CEO, Grant Johnson; and CFO, Dan Marks. The company would like to remind everyone that various remarks about future expectations, plans and prospects constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Red Cat cautions that these forward-looking statements are subject to risks and uncertainties that may cause their actual results to differ materially from those indicated including risks described in the company’s filings with the SEC. Any forward-looking statements made on this conference call speak only as of today’s date, Tuesday, February 16, 2021, and the company does not intend to update any of these forward-looking statements to reflect events or circumstances that occur after today.
With that, I’d like to now turn the call over to Esports Entertainment Group’s CEO, Grant Johnson. Please go ahead, Mr. Johnson.
Grant R. Johnson - Esports Entertainment Group, Inc. - CEO, Chairman, President, Secretary & Treasurer
Thank you. Good afternoon, everyone. Thank you for joining us for our fiscal quarter — second quarter 2021 earnings call. Despite unprecedented circumstances, I’m incredibly proud of how our team continues to grow and execute on our commitments that we laid out in our S1 prior to our uplisting last April.
The year 2020 has been transformative for Esports Entertainment Group and for the esports industry as a whole. Esports Entertainment Group currently sits at the crossroads of 2 growing mega trends right now, esports and online gambling. Gaming and esports have never been more popular than they are currently with game stream platforms like Twitch, setting records of viewership in 2020 with time watched up over 69% year-over-year.
Gaming has become a new form of social network for Gen Zers and has brought people together virtually during this period when we’ve all had to be physically distanced due to the COVID-19 pandemic.
New console launches from Sony and Microsoft set sales records and continue to flatten the shelves throughout the holiday season. And according to the latest reports of Newzoo, there are now 2.7 billion gamers globally. And of those 2.7 billion gamers, almost 500 million of them are esports fans.
Surveys indicate that over 50% of these fans would like the opportunity to bet on matches they’re watching. And according to [Isler’s and Gray Jack], the esports wagering market is currently $750 million addressable opportunity, which we see growing to over $3 billion in the next 5 years. This is in addition to the player versus player, which is skill-based wagering market that we intend to address with our Orlando product, which we expect to launch around Memorial Day in New Jersey this year. With our play, watch, bet esports strategy and first-mover advantage, we believe we’re in a unique position to capture the large and growing addressable market.
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On the online gambling side, the regulatory environment, esports remains very favorable as states continue to explore ways to fill the budget challenges that COVID has unfortunately created. There are currently over 20 states with some form of legal sports betting and a number of state legislatures continue to look at the potential.
EEG is currently the only esports-focused wagering platform with a U.S. state license. We plan to launch our VIE platform in New Jersey this spring, early April. After that rollout, we explore market access for expansion into the — into additional U.S. states. We also look forward to working with proposed new regulatory framework in Canada as provinces there begin to offer single-event sports wagering in the near future.
I’d like to walk through some of the operational highlights from the quarter. In December, our Esports Gaming League subsidiary resigned its agreement with Arsenal Football Club to manage their Pro Evolution Soccer roster. This is the second year of this partnership, and we value the opportunity to work with such a storied, traditional sports brand in Europe and help them enter the world of esports.
Also in December, we reached a multiyear agreement with the Philadelphia Eagles to be their exclusive esports [turner] platform provider. EEG will host biannual Madden NFL sports tournaments for the Eagles. The Eagles joined the Philadelphia Union, the LA Kings, LA Galaxy and Baltimore Ravens, which we signed just last week, as teams of all who have joined our platform. As part of the agreement, the Eagles are now shareholders of Esports Entertainment Group, which we think is a great testament to their belief in what we’re building here at EEG. We remain in ongoing discussions with a large number of additional sporting franchises and anticipate further announcements in the coming months.
During the past quarter, we’ve also announced the acquisition of Lucky Dino, an established Malta licensed online casino operator with its own proprietary casino software platform. In addition to further strengthening our tech stack, what the Lucky Dino asset gives us is a substantial foothold in multiple new jurisdictions across Europe and Scandinavia, where esports are extremely popular.
The 25,000 monthly active casino players created a tremendous cross-selling opportunity for our sports nation and VIE.bet betting platforms. The Lucky Dino transaction is a great blueprint for our strategy of acquiring profitable iGaming operators that provide us with strategic licenses, pools and players that we can efficiently cross-sell our other offerings into. We expect this transaction to close prior to the end of this month, February.
Subsequent to the quarter’s end, we have had a large number of exciting developments that I’d also like to detail for you. Market access continues to be a strategic priority for the company. In January, we announced that we have put VIE.bet, SportNation onto our company — onto the company’s multi gaming license. This allows both brands to market into 150 additional jurisdictions for the first time. Our initial focus will be in South and Central America. Northern and Eastern Europe, together representing a multibillion-dollar opportunity.
As discussed earlier, we have submitted our gaming applications to the State of New Jersey, Department of Gaming Enforcement (sic) [Division of Gaming Enforcement] and plan to launch there this spring, late March, early April. This will make us the first company with an esports-dedicated waging platform available in the United States, should give us a first-mover advantage and enable us to build a strong brand around our VIE platform. Following our launch in New Jersey, we intend to explore as many additional states for expansions and the opportunities as possible.
January 25, we announced that we finalized terms around our previously announced acquisition of Helix and ggCircuit. This acquisition significantly bolsters our esports strategy with state-of-the-art esports entertainment centers, esports-focused vertically — vertical enterprise software business and best-in-class esports analytics platform. And of course, in this acquisition comes our player versus player skill-based wagering platform, LAN Duel.
We expect this transaction to close in April, following the receipt of the shareholder approval. We’ve already begun integrating the assets and working on several exciting cross-company projects that will be announced shortly. All senior executives of both Helix and ggCircuit will be remaining with Esports Entertainment Group following the close of this transaction.
Finally, today, as you’ve seen in the news, we’ve closed a $30 million financing round for new institutional investors at $15 a share. The use of proceeds for this transaction are to finance the Lucky Dino acquisition. We welcome the new shareholders board, and thank them for their support.
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Finally, I want to close by thanking all of our employees for their hard work. We began 2020 on the OTC Bulletin Board with 10 employees and finished the year on the NASDAQ with over 75 employees. This is really a testament to the team we pulled together, and I know that we have many more exciting milestones to come in 2021.
I’m going to turn the call over now to our CFO, Dan Marks, who’ll walk through some of the financial performance in the quarter and our new upward revised full year guidance. Dan?
Daniel Michael Marks - Esports Entertainment Group, Inc. - CFO, Principal Accounting Officer & Director
Thank you, Grant, and good afternoon, everyone, and thanks again for joining us today. To begin with, I’m happy to say that the past quarter for the group was its first as a meaningfully revenue-generating company.
We delivered $2.4 million of revenue in the quarter, principally from our flagship SportNation.bet brand in the U.K., which is part of the Argyll Entertainment entity. This represents a $2.1 million increase over the prior quarter, which was materially impacted by our decision to [cross] marketing spend whilst we integrated a new customer affordability tool into our platform, post that guidance given over the summer by the U.K. Gambling Commission.
Across Q2, we took out the $54 million in handle and have over 24,000 unique active players on our Argyll platform materially up on the prior quarter. Revenues would actually have been circa $0.2 million higher were it not for unusually low hold on the casino product in December.
As we look forward to the remainder of the fiscal year, revenue growth opportunities are abundant and will allow us to expand our current concentration outside of the U.K. By the end of February, we will have launched both our VIE.bet and SportNation.com brand on our MGA license, allowing us access to operate our services in 150 jurisdictions. And as Grant mentioned previously, this brings with it substantial opportunities, both in widening the breadth of the markets we are in as well as giving us the opportunity to cross-sell customers between our esports and sports bet brands.
Furthermore, several new revenue streams will be initiated in the coming months. The launch of the VIE.gg wagering platform on our New Jersey license in the spring, the hosting on our EGL tournament platform of several pro team-sponsored esport tournaments in the coming weeks and months, and together with the impending closing of both the Lucky Dino transaction by the start of March and the ggCircuit, Helix transaction during Q4.
With the above in mind, our revised revenue guidance for fiscal year 2021, which includes the Lucky Dino acquisition, will be $18 million. And our revised guidance for fiscal ‘22, including both Lucky Dino and ggCircuit, Helix will be $70 million.
Returning to the quarterly numbers. Total operating loss for Q2 was $5.8 million compared to an operating loss of $3.9 million in the prior quarter. So Q2’s figures were impacted by an equity-based compensation charge of $1.3 million and depreciation charges of $0.7 million.
Total net loss for the period was $7.3 million compared to $1.8 million in the prior period. So this quarter’s net loss was compounded by an adverse sales of $2.1 million when compared to the prior quarter in the fair value of warrant liabilities.
Operating expenses in the quarter totaled $8.1 million versus $4.1 million in Q1. So those equity-based compensation and depreciation charges outlined previously drove a portion of those costs.
Payroll increased quarter-over-quarter as we had 3, 4 months’ worth of Argyll and FLIP Sports employees on the books following the completion of their acquisitions during Q1. And sales and marketing expenses in Q2 were $1.9 million, an increase of $1.3 million over the prior period as we reinitiated marketing spend on the SportNation.bet brand following the [fours in] over the summer months.
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Moving on to the balance sheet and liquidity. We are very well capitalized to execute our growth plan and address our key priorities. As of December 31, we had $5.6 million in available cash. But with the subsequent net proceeds from the sale of approximately 1.4 million shares issued for warrants exercised since the beginning of 2021, our cash on hand at the bank is now over $12 million. With the additional raise of $30 million via the financing round announced today, we are well funded to complete the upcoming Lucky Dino acquisition as well as to fund our operational growth strategy going forward.
Our current monthly net cash burn rate on operational activities is circa $0.9 million, but will reduce to $0.6 million post the closing of the Lucky Dino acquisition. And we will continue to be focused on finding efficiencies within our enlarged group’s cost structure. As stated last quarter, we are confident our existing operational resources and cost base can support a doubling in customer activity in the next 6 to 12 months, whilst some incremental investment will continue in augmenting our tech function as we build out our buy and EGL platforms.
In summary, therefore, with revenue-generating activities having commenced and with closing and impending closures of EGL, Lucky Dino and ggCircuit, Helix acquisitions, together with the launch of new platforms in new jurisdiction, we remain extremely optimistic in our growth opportunities across the next 12 months, as we look to accelerate our development into becoming the most diversified esports online gambling company in the industry.
And with that, please, can we now open the line for Q&A, operator?
QUESTIONS AND ANSWERS
Operator
(Operator Instructions) The first question comes from Michael Kupinski with NOBLE Capital Markets.
Michael A. Kupinski - NOBLE Capital Markets, Inc., Research Division - Director of Research and Senior Media & Entertainment Analyst
Just a couple of quick questions here. Regarding — you mentioned the stock-based compensation. Did I hear this right, it was $1.3 million, correct, in the quarter? And then depreciation was $0.37 million, $370,000? I just want to make sure I got that right.
Daniel Michael Marks - Esports Entertainment Group, Inc. - CFO, Principal Accounting Officer & Director
It was $1.3 million on equity base and $0.7 million on depreciation.
Michael A. Kupinski - NOBLE Capital Markets, Inc., Research Division - Director of Research and Senior Media & Entertainment Analyst
Okay. $0.7 million. Okay. Got you. And then in terms of the cash, can you just kind of give us the net following the Lucky Dino acquisition. You mentioned that you had cash in hand of over $12 million, right, at the — as the warrants were exercised. Can you just kind of give us what cash are you going to have in terms of after the Lucky Dino as you kind of ramp up to the Helix acquisition later in the fall because you have a $47 million acquisition there? And then if you can just give us a sense on the debt and equity composition at this point, if you have some thoughts on that?
Daniel Michael Marks - Esports Entertainment Group, Inc. - CFO, Principal Accounting Officer & Director
Sure. Well, the financing round that closed today was specifically earmarked for the Lucky Dino acquisition. And the remaining cash on hand at bank will be used for — to fund operational activities, whether that be marketing or other expenses.
Grant, I don’t know if you want to speak specifically with regard to the ggCircuit financing?
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Grant R. Johnson - Esports Entertainment Group, Inc. - CEO, Chairman, President, Secretary & Treasurer
Yes, I can address that. I should add also, Michael, that even as we speak, warrant money over the past — as Dan already laid out, over the past 30 days has been coming in at an accelerated basis, and that is also true today. So these numbers are constantly in flux and rising as more cash goes into our accounts.
That said, with ggCircuit, Helix, we have already committed $2 million in funds to the transaction. Half of the transaction, roughly $20 million, will be in equity and the other half, we are still determining whether it would be debt or equity. We have offers on both, and we’re just looking to see what is in the best interest of the shareholders. But that decision won’t be made until we get closer to — when they finish [around] and we get closer to closing, which will be end of March, early April.
Michael A. Kupinski - NOBLE Capital Markets, Inc., Research Division - Director of Research and Senior Media & Entertainment Analyst
Got you. And then can you just give us a sense on how Helix is performing? I know that you had indicated that you found a way for it to kind of breakeven in this environment through sales and so forth. Where do you stand on the build-out of the facilities? Because I understand that there was a couple of them that they were going to be building out or the — is that on hold at this point? Or can you just give us a sense on what — how Helix is performing?
Grant R. Johnson - Esports Entertainment Group, Inc. - CEO, Chairman, President, Secretary & Treasurer
Well, sure. In terms of the build-out, of course, no additional physical locations have been brought online during COVID nor will they until this is behind us. I can say, we received good news over the weekend that with some of the loosening of restrictions, they were able to increase their attendance up to 50% and have been fully booked ever since that took place, say, just over the weekend.
What you’re referring to as well on where we’re breaking even or close to breakeven prior to going up to 50% was a combination of food, bev sales as well as some of the software platforms that we have running in those facilities, which we’ll talk more about in the coming weeks as we message the market as to how we’re generating additional revenue there. But to get directly to your question, have we been opening? No. Are there plans to open some additional facilities? Yes. I would imagine those will start to pick up again late summer, early fall. And those of you who have looked at what the facility looks like, the Patriots’ place, we have started to talk with the other teams that we’ve entered into agreements with about a similar type of a structure in their facilities. So we’ll see how those progress. But again, that’s not likely going to be a 2021 conversation. The additional facilities becoming online late 2021, more likely 2022.
Michael A. Kupinski - NOBLE Capital Markets, Inc., Research Division - Director of Research and Senior Media & Entertainment Analyst
Got you. And my last question is, obviously, this is a very active marketplace. Are there additional acquisitions that you have at this point that you’re looking at? And what areas are you mostly focused on at this point?
Grant R. Johnson - Esports Entertainment Group, Inc. - CEO, Chairman, President, Secretary & Treasurer
Well, to answer the question, the short answer is yes. We are constantly looking at it. I think we’ve messaged the market we’re fairly aggressive when — in our M&A program. We have multiple targets that are brought before us constantly from [Kerr], who’s our consultants based in the U.K. in the iGaming space. And how we determine whether or not we are going to proceed to engage in a letter of intent and go further, a, they have to be accretive. So obviously, we don’t want to have any dilutive events.
Second, what does it do for our other assets? If it’s just — if it’s an iGaming company, is it — brings us — as just — we just talked about in the report here, does it bring us access to markets we’re currently not in? Does it bring us additional licenses, which opens up those markets, not just for the other iGaming to cross-market into it, but for the expansion of esports.
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And on the esports-centric M&A, we’re looking at opportunities where we can acquire unique software or unique elements that we currently don’t have. With this acquisition ggCircuit, Helix, Genji, et cetera, there’s not many things that are left unaddressed in terms of our product mix, but we’re always on the look for new technologies that will accelerate what we’re doing with our business model.
So I guess that’s probably the best way to finish it. Yes, we are looking all the time. Yes, we have a full pipe. And when we make these decisions, they have to be more than just a plus one. It has to give us outside of just an increase to revenues, has to also give us an opportunity for additional synergies or unique technology.
Operator
Our next question comes from Lisa Springer of Singular Research.
Lisa Springer - Singular Research, LLC - Research Analyst
Given the large number of moving parts, I’m wondering how we should think about G&A in the second half of the year. I mean how much of it in the second quarter was like a onetime deal because of M&A? And how much of it should we expect to be recurring?
Grant R. Johnson - Esports Entertainment Group, Inc. - CEO, Chairman, President, Secretary & Treasurer
Dan? Yes. Okay. Sorry.
Daniel Michael Marks - Esports Entertainment Group, Inc. - CFO, Principal Accounting Officer & Director
Yes. Lisa, I just — without getting into too much granularity, I mean, I called out a couple of the numbers, about direct equity-based comps specifically that will not be recurring numbers in — or at least not to that magnitude in the second half of the year. So from that perspective, it’s possible to model out what that looks like. Obviously, with Lucky Dino coming on an EBITDA-accretive acquisition from a cash perspective, those numbers should be coming down, as alluded to in the notes earlier.
Lisa Springer - Singular Research, LLC - Research Analyst
Okay. And looking forward, what growth metrics do you think investors should focus on to measure your success? Would it be number of players? Or what would you think would be the best metric to look at?
Grant R. Johnson - Esports Entertainment Group, Inc. - CEO, Chairman, President, Secretary & Treasurer
Well, there’s going to be — oh, sorry. Go ahead, Dan.
Daniel Michael Marks - Esports Entertainment Group, Inc. - CFO, Principal Accounting Officer & Director
No. [Go on, Grant. I’m talking about the end.]
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Grant R. Johnson - Esports Entertainment Group, Inc. - CEO, Chairman, President, Secretary & Treasurer
I — there’s going to be a number of difference. As you say, there’s a lot of moving pieces here. So there will be a number of different metrics. One will be the increased number of pro teams and franchises we connect with. This is — the reason this is a key indicator is that these teams have huge fan bases. Some of these teams have fan bases in the 20 million range, and they will effectively be exclusive marketing partners of ours. So that will an indicator and that will trickle down to the number of fans that sign up. Another indicator will be on our ability to continue sourcing and closing accretive transactions. And these, of course, will have the accelerated growth much more quickly than the organic growth we’re going to get through signing up.
And in addition to those, we are going to be launching the LAN Duel product around Memorial Day, which is a completely new, groundbreaking type of wagering in esports. That one, once we launch that, we’ll update the numbers once we get a better sense for how the initial proof-of-concept and the uptake. And again, that will be closer to our fiscal year-end.
Operator
This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Johnson for any closing remarks.
Grant R. Johnson - Esports Entertainment Group, Inc. - CEO, Chairman, President, Secretary & Treasurer
Just to — thank you all for coming to our earnings call here and your continuing support in the market. Jeff Cohen, our VP of Strategy and VP of IR, is available to address any other further questions you may have after this call. He can be reached through his e-mail address, it’s Jeff@esportsentertainmentgroup (sic) [[email protected]]. And of course, RedChip, our IR company, is also happy to forward your questions to my or Jeff’s attention. Thank you.
Operator
This concludes today’s conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
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