Item 1.01. Entry into a Material Definitive Agreement.
September 2022 Ionic Securities Purchase Agreement & 12% Promissory Note
On September 8, 2022, Simplicity Esports and Gaming Company (the "Company")
entered into a securities purchase agreement (the "September 2022 Ionic SPA"),
dated as of September 8, 2022, with Ionic Ventures, LLC ("Ionic"), pursuant to
which the Company issued a 12% promissory convertible note (the "September 2022
Ionic Note") with a maturity date of January 8, 2023, in the principal sum of
$66,000. Pursuant to the terms of the September 2022 Ionic Note, the Company
agreed to pay to Ionic $66,000 and to pay interest on the principal balance at
the rate of 12% per annum. The September 2022 Ionic Note carries an original
issue discount of $6,000. Accordingly, Ionic paid the purchase price of $60,000
in exchange for the September 2022 Ionic Note. The Company intends to use the
proceeds for working capital. Ionic may convert the September 2022 Ionic Note
into the Company's common stock (subject to the beneficial ownership limitations
of 4.99% in the September 2022 Ionic Note; provided however, that the limitation
on conversion may be waived (up to 9.99%) by Ionic upon, at the election of
Ionic, not less than 61 days' prior notice to the Company) at any time at a
conversion price equal to $0.02 per share, as the same may be adjusted as
provided in the September 2022 Ionic Note.
The Company may prepay the September 2022 Ionic Note in accordance with the
terms of the September 2022 Ionic Note, with the understanding that $2,640 of
interest is guaranteed and earned in full as of September 8, 2022. The September
2022 Ionic Note contains customary events of default relating to, among other
things, payment defaults, breach of representations and warranties, and breach
of provisions of the September 2022 Ionic Note or the September 2022 Ionic SPA.
Upon the occurrence of any Event of Default (as defined in the September 2022
Ionic Note), which has not been cured within the time prescribed in the
September 2022 Ionic Note, it shall become immediately due and payable and the
Company shall pay to Ionic, in full satisfaction of its obligations hereunder,
an amount equal to the principal amount then outstanding plus accrued interest
multiplied by 125%.
September 2022 Ionic Ventures Common Stock Purchase Warrant
Pursuant to the terms of the September 2022 Ionic SPA, on September 8, 2022, the
Company also issued to Ionic a three-year warrant (the "September 2022 Ionic
Warrant") to purchase 120,000 shares of the Company's common stock at an
exercise price of $1.00.
The description of the September 2022 Ionic SPA, the September 2022 Ionic Note,
and the September 2022 Ionic Warrant does not purport to be complete and is
qualified in its entirety by reference to the September 2022 Ionic SPA, the
September 2022 Ionic Note, and the September 2022 Ionic Warrant, copies of which
are filed as Exhibits 10.1, 10.2, and 10.3, respectively, hereto and are
incorporated herein by reference.
September 2022 Jefferson Street Securities Purchase Agreement & 12% Promissory
Note
On September 8, 2022, the Company entered into a securities purchase agreement
(the "September 2022 Jefferson Street SPA"), dated as of September 8, 2022, with
Jefferson Street Capital, LLC ("Jefferson Street"), pursuant to which the
Company issued a 12% promissory convertible note (the "September 2022 Jefferson
Street Note") with a maturity date of January 8, 2023, in the principal sum of
$27,500. Pursuant to the terms of the September 2022 Jefferson Street Note, the
Company agreed to pay to Jefferson Street $27,500 and to pay interest on the
principal balance at the rate of 12% per annum. The September 2022 Jefferson
Street Note carries an original issue discount of $2,500. Accordingly, Jefferson
Street paid the purchase price of $25,000 in exchange for the September 2022
Jefferson Street Note. The Company intends to use the proceeds for working
capital. Jefferson Street may convert the September 2022 Jefferson Street Note
into the Company's common stock (subject to the beneficial ownership limitations
of 4.99% in the September 2022 Jefferson Street Note; provided however, that the
limitation on conversion may be waived (up to 9.99%) by Jefferson Street upon,
at the election of Jefferson Street, not less than 61 days' prior notice to the
Company) at any time at a conversion price equal to $0.02 per share, as the same
may be adjusted as provided in the September 2022 Jefferson Street Note.
The Company may prepay the September 2022 Jefferson Street Note in accordance
with the terms of the September 2022 Jefferson Street Note, with the
understanding that $1,100 of interest is guaranteed and earned in full as of
September 8, 2022. The September 2022 Jefferson Street Note contains customary
events of default relating to, among other things, payment defaults, breach of
representations and warranties, and breach of provisions of the September 2022
Jefferson Street Note or the September 2022 Jefferson Street SPA.
Upon the occurrence of any Event of Default (as defined in the September 2022
Jefferson Street Note), which has not been cured within the time prescribed in
the September 2022 Jefferson Street Note, it shall become immediately due and
payable and the Company shall pay to Jefferson Street, in full satisfaction of
its obligations hereunder, an amount equal to the principal amount then
outstanding plus accrued interest multiplied by 125%.
September 2022 Jefferson Street Common Stock Purchase Warrant
Pursuant to the terms of the September 2022 Jefferson Street SPA, on September
8, 2022, the Company also issued to Jefferson Street a three-year warrant (the
"September 2022 Jefferson Street Warrant") to purchase 45,454 shares of the
Company's common stock at an exercise price of $1.00.
The description of the September 2022 Jefferson Street SPA, the September 2022
Jefferson Street Note, and the September 2022 Jefferson Street Warrant does not
purport to be complete and is qualified in its entirety by reference to the
September 2022 Jefferson Street SPA, the September 2022 Jefferson Street Note,
and the September 2022 Jefferson Street Warrant, copies of which are filed as
Exhibits 10.4, 10.5, and 10.6, respectively, hereto and are incorporated herein
by reference.
September 2022 FirstFire Securities Purchase Agreement & 12% Promissory Note
On September 8, 2022, the Company entered into a securities purchase agreement
(the "September 2022 FirstFire SPA"), dated as of September 8, 2022, with
FirstFire Global Opportunities Fund, LLC ("FirstFire"), pursuant to which the
Company issued a 12% promissory convertible note (the "September 2022 FirstFire
Note") with a maturity date of January 8, 2023, in the principal sum of $66,000.
Pursuant to the terms of the September 2022 FirstFire Note, the Company agreed
to pay to FirstFire $66,000 and to pay interest on the principal balance at the
rate of 12% per annum. The September 2022 FirstFire Note carries an original
issue discount of $6,000. Accordingly, FirstFire paid the purchase price of
$60,000 in exchange for the September 2022 FirstFire Note. The Company intends
to use the proceeds for working capital. FirstFire may convert the September
2022 FirstFire Note into the Company's common stock (subject to the beneficial
ownership limitations of 4.99% in the September 2022 FirstFire Note; provided
however, that the limitation on conversion may be waived (up to 9.99%) by
FirstFire upon, at the election of FirstFire, not less than 61 days' prior
notice to the Company) at any time at a conversion price equal to $0.02 per
share, as the same may be adjusted as provided in the September 2022 FirstFire
Note.
The Company may prepay the September 2022 FirstFire Note in accordance with the
terms of the September 2022 FirstFire Note, with the understanding that $2,640
of interest is guaranteed and earned in full as of September 8, 2022. The
September 2022 FirstFire Note contains customary events of default relating to,
among other things, payment defaults, breach of representations and warranties,
and breach of provisions of the September 2022 FirstFire Note or the September
2022 FirstFire SPA.
Upon the occurrence of any Event of Default (as defined in the September 2022
FirstFire Note), which has not been cured within the time prescribed in the
September 2022 FirstFire Note, it shall become immediately due and payable and
the Company shall pay to FirstFire, in full satisfaction of its obligations
hereunder, an amount equal to the principal amount then outstanding plus accrued
interest multiplied by 125%.
September 2022 FirstFire Common Stock Purchase Warrant
Pursuant to the terms of the September 2022 FirstFire SPA, on September 8, 2022,
the Company also issued to FirstFire a three-year warrant (the "September 2022
FirstFire Warrant") to purchase 120,000 shares of the Company's common stock at
an exercise price of $1.00.
The description of the September 2022 FirstFire SPA, the September 2022
FirstFire Note, and the September 2022 FirstFire Warrant does not purport to be
complete and is qualified in its entirety by reference to the September 2022
FirstFire SPA, the September 2022 FirstFire Note, and the September 2022
FirstFire Warrant, copies of which are filed as Exhibits 10.7, 10.8, and 10.9,
respectively, hereto and are incorporated herein by reference.
Item 9.01. Financial Statement and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Securities Purchase Agreement, dated as of September 8, 2022, by
and between the registrant and Ionic Ventures, LLC.
10.2 Convertible Promissory Note, dated as of September 8, 2022, issued
by the registrant in favor of Ionic Ventures, LLC.
10.3 Common Stock Purchase Warrant, dated as of September 8, 2022,
issued by the registrant in favor of Ionic Ventures, LLC.
10.4 Securities Purchase Agreement, dated as of September 8, 2022, by
and between the registrant and Jefferson Street Capital, LLC.
10.5 Convertible Promissory Note, dated as of September 8, 2022, issued
by the registrant in favor of Jefferson Street Capital, LLC.
10.6 Common Stock Purchase Warrant, dated as of September 8, 2022,
issued by the registrant in favor of Jefferson Street Capital,
LLC.
10.7 Securities Purchase Agreement, dated as of September 8, 2022, by
and between the registrant and FirstFire Global Opportunities Fund,
LLC.
10.8 Convertible Promissory Note, dated as of September 8, 2022, issued
by the registrant in favor of FirstFire Global Opportunities Fund,
LLC.
10.9 Common Stock Purchase Warrant, dated as of September 8, 2022,
issued by the registrant in favor of FirstFire Global Opportunities
Fund, LLC.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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