Esports Betting & Entertainment Company Esports Entertainment Group (EEG) has announced that it will revise its existing portfolio of assets following liquidity concerns.
During EEG’s Q3 2022 fiscal year financial report, which ended 31 March 2022, the company announced a $38.6m (~£30.87m) impairment charge related to its export assets Helix, ggCircuit and EGL,
Image credit: EEG
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An impairment charge is a process used by businesses to permanently write off asset valuations. In the report, EEG CEO Grant Johnson said that it has been unable to monetize its esports entities given the lack of liquidity.
He added: “We do not see a path to attractive profitability in the Helix business, given its significant overhead and ongoing capex and we are currently working to split our two existing centers.
“GG Circuits and EGL are two assets that we have not been able to monetize effectively due to liquidity constraints. Our team is working internally to properly forecast the long-term opportunity for these businesses, which will help us will allow their carrying value to be better established.”
EEG announced the acquisition of Helix, GG Circuits and EGL in 2020.
The company has reported a net loss of $63.8m (~£51m), with general and administrative expenses of $14.34m (~£11.46m) as a result of the impairment charge.
The esports and gambling company reported net revenue of $15.7m (~£12.56m), an increase of $10.3m (~£8.23m) compared to Q3 2021. The company had even greater success with its iGaming products. Johnson highlighted “record-breaking quarterly revenue” for its iGaming brand Lucky Dino, in addition to saying its business has experienced a “more balanced sportsbook hold.”
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Earlier this year, Esports Entertainment Group completed a public offering, raising $13.6 million. In addition, the company launched its esports betting platform VIE.gg in New Jersey after the betting license was granted.
Esports Insider says: Things are definitely looking bleak for EEG. The company is looking for restructuring to ensure that not much value is lost on its assets. There have been some positive signs with EEG’s iGaming assets, but any gains are likely outweighed by this significant loss.
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