Item 1.01. Entry into a Material Definitive Agreement.
On August 5, 2019,
Black Ridge Acquisition Corp. (NASDAQ: BRAC), a public acquisition vehicle (“BRAC”) sponsored by Black
Ridge Oil & Gas, Inc. (“Black Ridge”), entered into an amendment (the “Amendment”) to the previously
announced Agreement and Plan of Merger, dated as of December 19, 2018 (the “Agreement”), by and among BRAC, Black Ridge
Merger Sub Corp. (“Merger Sub”), Allied Esports Media, Inc. (f/k/a Allied Esports Entertainment, Inc.) (“AEM”),
Noble Link Global Limited (“Noble”), Ourgame International Holdings Ltd. (“Ourgame”), and Primo Vital Ltd.
A summary of the specific modifications
to the Amended Merger Agreement include the following:
The Amendment reduces the closing condition
originally contained in the Agreement requiring BRAC to have minimum cash on hand following the proper exercise of conversion rights
by the holders of public shares from at least $80,000,000 to $22,000,000. The Agreement also originally provided for BRAC to repay
$35,000,000 of indebtedness of AEM and the World Poker Tour (“WPT”) owed to Ourgame in cash at the closing of the transactions
Pursuant to the Amendment, the parties agreed
that instead of paying the full $35,000,000 in cash at the Closing, BRAC would (i) assume $10,000,000 of the debt obligations of
Ourgame and Noble (including an additional $1,200,000 of accrued interest) and (ii) repay Ourgame the remaining balance of $23,800,000
by paying $3,500,000 in cash to Ourgame and its designees, issuing to Ourgame and its designees 2,928,679 shares of BRAC’s
common stock and Ourgame retaining $1,000,000 of the proceeds of such loans to pay its transaction expenses incurred in the Merger.
In connection with entering into the Amendment,
Black Ridge agreed to transfer an aggregate of 600,000 shares of BRAC’s common stock held by it to Ourgame.
In connection with the execution of the
Amendment, the parties entered into an amendment and acknowledgment agreement (“Acknowledgment Agreement”) whereby
the terms of the previously issued convertible notes (“Notes”) of Allied Esports and WPT (collectively “AEII/WPT”)
whereby bridge holders provided $14 million to be used for the operations of AEII/WPT were amended. Pursuant to the Acknowledgement
Agreement, the bridge holders have agreed to defer repayment of the Notes to one year and two weeks following the Closing (the
“Maturity Date”). In consideration of agreeing to the deferred repayment, the bridge holders will be paid an additional
six months of interest (i.e., a total of 18 months interest) to the extent any bridge holder elects not to convert their Note to
equity. BRAC has agreed to assume the debt under the Notes as part of the mergers contemplated by the Agreement, and agreed that
the debt will be secured by all of BRAC’s assets following the Closing. Black Ridge has also agreed that it will not make
any further transfer of its BRAC securities, subject to certain exceptions, until the debt is repaid. The Notes are convertible
at any time by a holder between the Closing and the Maturity Date at the “Conversion Price.” The “Conversion
Price” is the lesser of $8.50 per share or the price at which shares are issued to Ourgame or its affiliates in connection
with the mergers.
On August 5, 2019, Black Ridge and BRAC
also entered into several additional share purchase agreements with several third parties. The form of the Purchase Agreements
are the same form of purchase agreement that were previously executed by BRAC on July 17, 2019 with Lyle Berman, a director of
Black Ridge and BRAC, and Morris Goldfarb, a stockholder of Black Ridge, as previously reported in the Current Report on Form 8-K
filed by BRAC on July 19, 2019. All of such purchase agreements are hereafter collectively referred to as the “Purchase Agreements”
and all of the purchasers are hereafter referred to collectively as the “Purchasers.” Pursuant to the Purchase Agreements,
the Purchasers have agreed to purchase an aggregate of $18,000,000 of shares of BRAC’s common stock in open market or privately
negotiated transactions. If the Purchasers are unable to purchase the full $18,000,000 of shares of common stock in open market
or privately negotiated transactions, BRAC will issue to the Purchasers newly issued shares at the Closing at a per-share price
equal to the per-share amount held in BRAC’s trust account (currently approximately $10.30 per share), and having an aggregate
value equal to the difference between $18,000,000 and the dollar amount of shares purchased by them in the open market or in privately
negotiated transactions. One of the agreements also contains certain restrictions on the use of cash from the purchase.
At the Closing, BRAC has agreed to issue
to the Purchasers 1.5 shares of common stock for every 10 shares purchased by them under the Purchase Agreements. Additionally,
Black Ridge has agreed to transfer an aggregate of 720,000 shares of BRAC held by it to the Purchasers. Pursuant to the Purchase
Agreements, BRAC is required to file a registration statement with the SEC as promptly as practicable following Closing to register
the resale of any securities purchased by the Purchasers that are not already registered and cause such registration statement
to become effective as soon as possible.
The foregoing summaries of the Amendment
and the Acknowledgement Agreement and the Purchase Agreements are qualified in their entirety by reference to such agreements,
the forms of which are attached as exhibits to the Current Report on Form 8-K filed by BRAC on August 6, 2019 and the Current Report
on Form 8-K filed by Black Ridge on July 17, 2019 and are incorporated herein by reference.