Item 1.01. Entry
into a Material Definitive Agreement.
Streeterville July 2021 Exchange Agreement
As previously reported in the Current
Report on Form 8-K filed by NextPlay Technologies, Inc., formerly Monaker Group, Inc. (the “Company”,
“we”, and “us”) with the Securities and Exchange Commission (the “SEC” or the
“Commission”) on November 27, 2020, the Company sold Streeterville Capital, LLC (“Streeterville”),
an accredited investor, a Secured Promissory Note in the original principal amount of $5,520,000 on November 23, 2020 (the “November
2020 Streeterville Note”). Streeterville paid consideration of (a) $3,500,000 in cash; and (b) issued the Company
a promissory note in the amount of $1,500,000 (the “November 2020 Investor Note”), in consideration for the November
2020 Streeterville Note (which November 2020 Investor Note was funded on January 6, 2021), which included an original issue discount (“OID”)
of $500,000 and reimbursement of Streeterville’s transaction expenses of $20,000.
The November 2020 Streeterville
Note bears interest at a rate of 10% per annum and matures 12 months after its issuance date (i.e., on November 23, 2021). From time to
time, beginning six months after issuance, Streeterville may redeem a portion of the November 2020 Streeterville Note, not to exceed an
amount of $875,000 per month if the Investor Note has not been funded by Streeterville, and $1.25 million in the event the Investor Note
has been funded in full (which as discussed above, it has). In the event we don’t pay the amount of any requested redemption within
three trading days, an amount equal to 25% of such redemption amount is added to the outstanding balance of the November 2020 Streeterville
Note.
On July 21, 2021, and effective
on July 15, 2021, the Company entered into an Exchange Agreement with Streeterville (the “Streeterville Exchange Agreement”),
pursuant to which Streeterville exchanged $400,000 under the November 2020 Streeterville Note (which amount was partitioned into a separate
promissory note) for 200,000 shares of the Company’s common stock (the “Exchange Shares”).
The description of the Exchange
Amendment above is qualified in its entirety by the full text of the Exchange Amendment, a copy of which is filed herewith as Exhibit
10.1, and is incorporated herein by reference. The November 2020 Streeterville Note is described in greater detail in the November
27, 2020, Current Report on Form 8-K.
IFEB Bank Exchange Agreement and Related Transactions
As previously disclosed in the Current
Report on Form 8-K filed by the Company with the Commission on April 7, 2021, on April 1, 2021, we entered into a Bill of Sale
for Common Stock, effective March 22, 2021 (the “Bill of Sale”), with certain third parties (the “Initial
Sellers”) pursuant to which the Company agreed to purchase 2,191,489 shares (the “Initial IFEB Shares”) of
authorized and outstanding Class A Common Stock (the “Class A Stock”) of International Financial Enterprise Bank, Inc.,
a Puerto Rico corporation licensed as an Act 273-2012 international financial entity headquartered in San Juan Puerto Rico (“IFEB”),
which Initial IFEB Shares total approximately 57.06% of the outstanding Class A Stock of IFEB. The purchase price of the Initial IFEB
Shares was $6,400,000, which amount was paid to the Initial Sellers on April 1, 2021.
IFEB was incorporated in 2017
as a corporation under the laws of the Commonwealth of Puerto Rico and received its international financial entity license on June 18,
2017 from the Office of the Commissioner of Financial Institutions of Puerto Rico, in Spanish, “Oficina del Comisionado de Instituciones
Financieras” or (“OCIF”), as amended, as license #51. As a result, IFEB is regulated by OCIF.
Notwithstanding the terms of the
Bill of the Sale, and the payment by the Company of the aggregate purchase price pursuant thereto, the transfer of the Initial IFEB Shares
to the Company and the Company’s acquisition of control of IFEB was subject to review of the Company’s financial viability,
as well as other matters, by OCIF, which approval of OCIF was received in June 2021, but which acquisition did not close until July 21,
2021, as discussed below in Item 2.01 hereof.
Separately, on July 21, 2021,
the Company entered into, and closed the transactions contemplated by, a Share Exchange Agreement with various other holders of shares
of Class A Common Stock of IFEB (the “Additional Sellers” and the “IFEB Exchange Agreement”). Pursuant
to the IFEB Exchange Agreement, the Additional Sellers exchanged an aggregate of 1,649,614 of the outstanding Class A Stock of IFEB, representing
42.94% of such outstanding Class A Stock of IFEB in consideration for an aggregate of 1,926,750 shares of the Company’s restricted
common stock (the “IFEB Common Shares”), with each one share of Class A Stock of IFEB being exchanged for 1.168 shares
of restricted common stock of the Company, based on an agreed upon value of $2.50 per share for each share of Company common stock and
$2.92 per share for each share of Class A Stock of IFEB.
The IFEB Exchange Agreement contained
customary representations and warranties of the Additional Sellers and the Company.
The IFEB Exchange Agreement also
requires that:
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(a)
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three legacy board members of IFEB remain on the Board of Directors of IFEB
for a period of one year after the closing date of the IFEB Exchange Agreement, subject to rights of removal if such continued appointment/service
as board members would violate the fiduciary duties of any other board members;
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(b)
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certain outstanding loans held by one of the legacy board members be extended,
and be subject to a further extension;
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(c)
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that Ms. Nithinan Boonyawattanapisut, Mr. J. Todd Bonner, Mr. Donald P.
Monaco and Mr. William Kerby (each members of the Board of Directors of the Company) and Mr. Jan Reinhart, the founder of Reinhart Interactive
TV AG, a company organized in Switzerland, of which the Company owns a 51% interest, will be appointed as members of the Board of Directors
of IFEB;
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(d)
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that Ronald Poe will be appointed as Vice President of Longroot, Inc., the
Company’s wholly-owned subsidiary, and be provided a salary of $120,000 per year, pursuant to an employment agreement; and
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(e)
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that Robert Fiallo, will be hired by an affiliate of the Company pursuant
to an employment agreement, and be paid a base salary of $300,000 per year, plus a bonus of 3% of the profits from projects he works with
or assists in developing.
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The transactions contemplated
by the IFEB Exchange Agreement closed on July 21, 2021.
As previously reported in the
Current Report on Form 8-K which
the Company filed with the Commission on May 11, 2021, on May 6, 2021, in anticipation of the acquisition of the Initial IFEB Shares,
and control of IFEB, the Company and IFEB entered into a Preferred Stock Exchange Agreement, which was amended by a First Amendment to
Preferred Stock Exchange Agreement entered into May 10, 2021 and effective May 6, 2021 (as amended by the first amendment, the “Preferred
Exchange Agreement”), pursuant to which the Company agreed to exchange 1,950,000 shares of the Company’s restricted common
stock (the “Monaker Shares”) for 5,850 shares of cumulative, non-compounding, non-voting, non-convertible, perpetual
Series A preferred shares of IFEB (the “IFEB Preferred Shares”). The closing of the transactions contemplated by such
Preferred Exchange Agreement remain subject to various closing conditions, including, but not limited to the filing of a formal designation
of the Series A preferred stock by IFEB with the Secretary of State of Puerto Rico. As such, the transactions contemplated by the Preferred
Exchange Agreement may not close on a timely basis, if at all. The Preferred Exchange Agreement can be terminated by either party with
written notice to the other at any time, provided that such agreement has not yet been terminated by the parties. It is currently anticipated
that the Company and IFEB will move forward with the transactions contemplated by the IFEB Exchange Agreement, subject to approval from
OCIF.