Item
1.01 Entry into a Material Definitive Agreement.
On
November 11, 2021 (the “Signing Date”), Good Gaming, Inc. (the “Company”) entered into a securities purchase
agreement (the “Purchase Agreement”) with a several institutional and accredited investors (the “Investors”)
pursuant to which the Company will sell to the Investors in a private placement an aggregate of (i) 15,922,156 shares of common stock
(the “Shares”), (ii) pre-funded warrants to purchase up to an aggregate of 4,811,181 shares of common stock (the “Pre-Funded
Warrants”) and (iii) warrants to purchase up to an aggregate of 20,733,337 shares of common stock for gross proceeds to the Company
of approximately $3,100,000. The combined purchase price for one share of common stock and a warrant to purchase one share of common
stock is $0.15 and the combined purchase price for one pre-funded warrant to purchase one share of common stock and a warrant to purchase
one share of common stock is 0.1499.
The
Company intends to use the net proceeds primarily to expand and promote Microbuddies, as well as for working capital and general corporate
purposes. The closing is expected to occur on or about November 16, 2021, subject to the satisfaction of customary closing conditions.
The
Pre-Funded warrants have an exercise price of $0.0001 per share, subject to adjustment, and no expiration date. The Pre-Funded
Warrants will be exercisable immediately upon issuance and may be exercised at any time (subject to any Beneficial Ownership Limitation
as set forth in the Pre-Funded Warrant (which may not exceed either 4.99% or 9.99% as elected by each Investor receiving
a Pre-Funded Warrant) until all of the Pre-Funded Warrants are exercised in full.
The
Warrant is exercisable immediately upon issuance for a period of five and one-half years from the date of issuance and has an
exercise price of $0.20 per share, subject to adjustment as set forth in the Warrant for stock splits, stock dividends, recapitalizations
and similar customary adjustments. The Investor may exercise the Warrant on a cashless basis if the shares of common stock underlying
the Warrant (the “Warrant Shares”) are not then registered pursuant to an effective registration statement. The Investors
have contractually agreed to restrict their ability to exercise the Warrants such that the number of shares of the Company’s common
stock held by the Investors and their respective affiliates after such exercise does not exceed the Beneficial Ownership Limitation set
forth in the Warrant which may not exceed 4.99% (or 9.99%, at the election of each Investor) of the Company’s then issued
and outstanding shares of common stock.
In
connection with the Purchase Agreement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”)
with the Investors. Pursuant to the Registration Rights Agreement, the Company will be required to file a resale registration
statement (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) to register
for resale of the Shares, the shares issuable upon exercise of the Pre-Funded Warrants and the Warrant Shares, within 15 days of the
Signing Date, and to have such Registration Statement declared effective within 60 days after the Signing Date, or 90 days of the Signing
Date in the event the Registration Statement is “fully” reviewed by the SEC. The Company will be obligated to pay certain
liquidated damages to the investor if the Company fails to file the resale registration statement when required, fails to cause the Registration
Statement to be declared effective by the SEC when required, of if the Company fails to maintain the effectiveness of the Registration
Statement.
Pursuant
to an engagement letter (the “Engagement Letter”), dated as of November 8, 2021, by and between the Company and H.C.
Wainwright & Co., LLC (“Wainwright”), the Company engaged Wainwright to act as the Company’s exclusive placement
agent in connection with the offering. Pursuant to the engagement agreement, the Company agreed to pay Wainwright a cash fee of 7.5%
of the gross proceeds the Company receives under the Purchase Agreement. The Company also agreed to pay Wainwright (i) a management fee
equal to 1.0% of the gross proceeds raised in the offering; (ii) $35,000 for non-accountable expenses and (iii) up to $50,000 for fees
and expenses of legal counsel and other out-of-pocket expenses. In addition, the Company agreed to issue to Wainwright (or its designees)
placement agent warrants (the “Placement Agent Warrants”) to purchase a number of shares equal to 8.0% of the aggregate number
of shares of common stock (including shares of common stock issuable pursuant to the Pre-Funded Warrants) sold under the Purchase Agreement,
or warrants to purchase up to an aggregate of 1,658,667 shares. The Placement Agent Warrants generally will have the same terms as the
Warrants, except they will have an exercise price of $0.1875 per share.
The
foregoing descriptions of the Purchase Agreement, Warrants, Registration Rights Agreement, Engagement Letter and Placement Agent Warrants
described herein are subject to, and qualified in their entirety by, such documents, which are incorporated herein by reference.