Item
1.01. Entry into a Material Definitive Agreement.
On
March 31, 2021, Simplicity Esports and Gaming Company (the “Company”) entered into a Stock Purchase Agreement (this
“Agreement”) by and between the Company and Tiger Trout Capital Puerto Rico, LLC (“Tiger Trout”), pursuant
to which the Company agreed to issue and sell to Tiger Trout an aggregate of 125,000 shares of common stock, par value $0.0001
per share, of the Company (the “Common Stock”) at a purchase price of $12.00 per share, for a total purchase price
of $1,500,000.
The
Agreement provides that the sale will occur in two tranches, as follows:
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The
Company agreed to issue and sell to Tiger Trout on March 31, 2021 41,667 shares of Common Stock (the “First Tranche
Shares”) at a purchase price of $12.00 per share, for a total purchase price of $500,004 (the “First Tranche Purchase
Price”). The closing of the purchase and sale of the First Tranche Shares is referred to herein as the “First
Closing”.
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Subject
to the satisfaction or waiver, by the party for whose benefit such conditions exist, of the conditions to the Second Closing
(as hereinafter defined), at such time and pursuant to the terms and conditions in the Agreement, the Company agreed to issue
and sell to Tiger Trout 83,333 shares of Common Stock (the “Second Tranche Shares” and together with the First
Tranche Shares, the “Shares”) at a purchase price of $12.00 per share, for a total purchase price of $999,996
(the “Second Tranche Purchase Price” and together with the First Tranche Purchase Price, the “Purchase Price”).
The closing of the purchase and sale of the Second Tranche Shares is referred to herein as the “Second Closing”.
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In
the Agreement, the Company agreed that, following the First Closing, the Company will utilize its commercially reasonable efforts
to file a resale registration statement (the “Registration Statement”) pursuant to the Securities Act of 1933, as
amended (the “Securities Act”), with the Securities and Exchange Commission (the “Commission”) for the
resale of the Shares, and will use its commercially reasonable efforts to have such registration statement declared effective
by the Commission within 30 calendar days, but not more than 90 calendar days after March 31, 2021.
The
Company also agreed to, among other things, (i) make and keep adequate current public information available, as those terms are
understood and defined in Rule 144 promulgated under the Securities Act, and (ii) file with the SEC in a timely manner all reports
and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains subject
to such requirements and the filing of such reports and other documents as required for the applicable provisions of Rule 144.
The
obligations of Tiger Trout to consummate the Second Closing is subject to certain conditions, including, but not limited to: (i)
the Registration Statement shall have become effective, and (ii) from March 31, 2021 to the date of the Second Closing, trading
in the shares of Common Stock shall not have been suspended by the Commission of the Company’s principal Trading Market
(as defined in the Agreement), and, at any time prior to the date of the Second Closing, trading in securities generally as reported
by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose
trades are reported by such services, or on any Trading Market, nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of Tiger Trout, makes it impracticable or inadvisable to purchase the Second
Tranche Shares at the Second Closing.
The
Agreement contains customary representations and warranties of the Company and the Purchaser and other customary covenants and
agreements. The Agreement may be terminated by either the Company or Tiger Trout if the Second Closing has not occurred by the
date that is 90 calendar days after March 31, 2021.
The
description of the Agreement as set forth above is qualified in its entirety by reference to the Agreement, a copy of which is
filed as Exhibit 10.1 hereto and is incorporated herein by reference.