Item 1.01 Entry into a Material Definitive Agreement.
On March 9, 2021, Super League Gaming, Inc. (the
“Company”) entered into an Agreement and Plan of
Merger (the “Merger
Agreement”) by and among
Mobcrush Streaming, Inc. (“Mobcrush”), the Company, and SLG Merger Sub II,
Inc., a wholly-owned subsidiary of the Company
(“Merger Co”). The Merger Agreement provides for the
acquisition of Mobcrush by Super League pursuant to the merger of
Merger Co with and into Mobcrush, with Mobcrush as the surviving
corporation (the “Merger”). Upon completion of the Merger, Mobcrush
will be a wholly-owned subsidiary of the
Company.
Merger Consideration
In accordance with the terms and subject to the conditions of the
Merger Agreement: (A) each outstanding share of Mobcrush common
stock, par value $0.001 per share ("Mobcrush Common
Stock"), and Mobcrush preferred
stock, par value $0.001 ("Mobcrush Preferred
Stock", and with the Mobcrush
Common Stock, the "Mobcrush
Stock") (other than dissenting
shares) will be canceled and converted into the right to receive
(i) 0.528 shares of the Company's common stock, par value $0.001
per share ("Company Common
Stock"), as determined in the
Merger Agreement (the “Share Conversion
Ratio”), and (ii) any
cash in lieu of fractional shares of Common Stock otherwise
issuable under the Merger Agreement (the "Merger
Consideration"); (B) vested
options of Mobcrush will be assumed by Mobcrush and converted into
comparable options that are exercisable for shares of Company
Common Stock, with a value determined in accordance with the Share
Conversion Ratio; and (C) unvested options of Mobcrush will either
be (i) assumed by the Company and converted into comparable options
that are exercisable for shares of Company Common Stock, with a
value as determined by the Company and Mobcrush prior to the
closing of the Merger, or (ii) terminated and re-issued as options
that are exercisable for shares of Company Common Stock with a
value as determined by the Company and Mobcrush prior to the
closing of the Merger. Subject to certain adjustments and other
terms and conditions more specifically set forth in the Merger
Agreement, the Company will be issuing 12,582,204 shares of Company
Common Stock as the Merger Consideration.
Covenants
The Merger Agreement contains representations, warranties and
covenants of each of the parties thereto that are customary for
transactions of this type. Mobcrush and the Company have, among
other things as set forth in the Merger Agreement, agreed to take
all necessary action such that effective immediately after the
closing of the Merger, the Company's board of directors (the
“Board”) shall consist of eight directors, of whom
one individual shall be Mike Wann, the Chief Executive Officer of
Mobcrush, and another individual that qualifies as an
“independent director” pursuant to the rules and
regulations of Nasdaq Stock Market, shall be designated by
agreement between Mike Wann and the remaining members of the Board,
with the remaining six individuals designated by the
Company.
Conditions to Each Party’s Obligations
The obligations of the Company and Mobcrush to consummate the
Merger are subject to certain closing conditions, including, but
not limited to, (i) the approval of Mobcrush's and the
Company’s shareholders, (ii) Mobcrush and the Company
reaching an agreement as to the treatment of Mobcrush's unvested
options exercisable for shares of Mobcrush Common Stock, (iii)
receipt of any necessary regulatory approvals, (iv) the execution
and delivery of the Support Agreements by the Voting Stockholders
(as more specifically discussed below), and (v) the execution and
delivery of the Registration Rights Agreement (as more specifically
set forth below).
The foregoing description of the Merger Agreement is subject to and
is qualified in its entirety by reference to the full text of the
Merger Agreement, a copy of which is included as Exhibit 2.1
hereto, and the terms of which are incorporated herein by
reference.
The Merger Agreement contains representations, warranties and
covenants of each of the parties thereto that are customary for
transactions of this type, and such representations, warrants, and
covenants were made to each other as of the date of the Merger
Agreement or other specific dates. The assertions embodied in those
representations, warranties and covenants were made for purposes of
the contract among the respective parties and are subject to
important qualifications and limitations agreed to by the parties
in connection with negotiating the Merger Agreement. The Merger
Agreement will be filed to provide investors with information
regarding its terms. It is not intended to provide any other
factual information about the parties to the Merger Agreement. In
particular, the representations, warranties, covenants and
agreements contained in the Merger Agreement, which were made
only for purposes of the Merger Agreement and as of specific dates,
were solely for the benefit of the parties to the Merger Agreement,
may be subject to limitations agreed upon by the contracting
parties (including being qualified by confidential disclosures made
for the purposes of allocating contractual risk between the parties
to the Merger Agreement instead of establishing these matters as
facts) and may be subject to standards of materiality applicable to
the contracting parties that differ from those applicable to
investors, security holders and reports and documents filed with
the SEC. Investors and security holders are not third-party
beneficiaries under Merger Agreement and should not rely on the
representations, warranties, covenants and agreements, or any
descriptions thereof, as characterizations of the actual state of
facts or condition of any party to the Merger Agreement. In
addition, the representations, warranties, covenants and agreements
and other terms of the Merger Agreement may be subject to
subsequent waiver or modification. Moreover, information concerning
the subject matter of the representations and warranties and other
terms may change after the date of the Merger Agreement, which
subsequent information may or may not be fully reflected in the
Company's public disclosures.
Voting and Support Agreements
Pursuant to the Merger Agreement, certain stockholders of Mobcrush
and the Company (collectively, the “Voting
Stockholders”) will enter
into voting agreements (collectively, the
“Support
Agreements”) with the
Company and Mobcrush, pursuant to which the Voting Stockholders
have agreed to, among other things, (i) vote in favor of the Merger
Agreement and the transactions contemplated thereby and (ii) be
bound by certain other covenants and agreements related to the
Merger.
The foregoing description of the Support Agreements is subject to
and qualified in its entirety by reference to the full text of the
form of Support Agreement, a copy of which is included as Exhibit
10.1 hereto, and the terms of which are incorporated herein by
reference.
Registration Rights Agreement
At the closing of the Merger, the Company, Mike Wann, and certain
other holders of Mobcrush Preferred Stock (Mike Wann and such
holders of Mobcrush Preferred stock are collectively, the
"Rights
Parties") will enter into a
registration rights agreement (the “Registration Rights
Agreement”) pursuant to
which, among other matters, the Rights Parties will be granted
certain customary mandatory, demand and “piggy-back”
registration rights with respect to their respective shares of
Company Common Stock acquired pursuant to the
Merger.
The foregoing description of the Registration Rights Agreement is
subject to and qualified in its entirety by reference to the full
text of the form of Amended and Restated Registration Rights
Agreement, a copy of which is included as Exhibit 10.2 hereto, and
the terms of which are incorporated by reference.