Current Report Filing (8-k)
February 24 2021 - 4:53PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (date of earliest event reported): February 19, 2021
SIMPLICITY
ESPORTS AND GAMING COMPANY
(Exact
name of registrant as specified in its charter)
Delaware
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001-38188
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82-1231127
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
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7000
W. Palmetto Park Rd., Suite 505
Boca
Raton, FL 33433
(Address
of Principal Executive Offices)
(855)
345-9467
Registrant’s
telephone number, including area code
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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None
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N/A
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N/A
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company [X]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item
1.01. Entry into a Material Definitive Agreement.
On
February 19, 2021, Simplicity Esports and Gaming Company, a Delaware corporation (the “Company”), entered into a securities
purchase agreement (the “SPA”) dated as of February 19, 2021, with an accredited investor (the “Holder”),
pursuant to which the Company issued a 12% promissory note (the “Note”) with a maturity date of February 19, 2022
(the “Maturity Date”), in the principal sum of $1,650,000. In addition, the Company issued 10,000 shares of its common
stock to the Holder as a commitment fee pursuant to the SPA. Pursuant to the terms of the Note, the Company agreed to pay to $1,650,000
(the “Principal Sum”) to the Holder and to pay interest on the principal balance at the rate of 12% per annum (provided
that the first twelve months of interest shall be guaranteed). The Note carries an original issue discount (“OID”)
of $165,000. Accordingly, on the Closing Date (as defined in the SPA), the Holder paid the purchase price of $1,485,000 in exchange
for the Note. The Company intends to use the proceeds for its operational expenses, the repayment of those certain self-amortization
promissory notes previously issued to the Holder on June 18, 2020 and November 23, 2020, and the repayment of certain other existing
debt obligations. The Holder may convert the Note into the Company’s common stock (subject to the beneficial ownership limitations
of 4.99% in the Note) at any time at a conversion price equal to $11.50 per share.
The
Company may prepay the Note at any time prior to the date that an Event of Default (as defined in the Note) (each an “Event
of Default”) occurs at an amount equal to 100% of the Principal Sum then outstanding plus accrued and unpaid interest (no
prepayment premium). The Note contains customary events of default relating to, among other things, payment defaults, breach of
representations and warranties, and breach of provisions of the Note or SPA.
The
Company is required to make an interim payment to the Holder in the amount of $363,000, on or before August 19, 2021, towards
the repayment of the balance of the Note.
Upon
the Holder’s provision of notice to the Company of the occurrence of any Event of Default, which has not been cured within
five (5) calendar days (provided, however, that this five (5) calendar day cure period shall not apply to any event of default
under Sections 3.1, 3.2, and 3.19 of the Note), the Note shall become immediately due and payable and the Company shall pay to
the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Principal Sum then outstanding plus accrued
interest multiplied by 125% (the “Default Amount”). Upon the occurrence of an Event of Default, additional interest
will accrue from the date of the Event of Default at the rate equal to the lower of 15% per annum or the highest rate permitted
by law.
The
foregoing descriptions of the Note and SPA do not purport to be complete and are qualified in its entirety by reference to the
full text of the Note and SPA, copies of which are filed hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated
herein by reference.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The
disclosure set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item
9.01 Financial Statements and Exhibits.
(c)
Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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SIMPLICITY
ESPORTS AND GAMING COMPANY
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Date:
February 24, 2021
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By:
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/s/
Jed Kaplan
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Jed
Kaplan
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Chief
Executive Officer
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