Item
1.01. Entry into Material Definitive Agreement.
Firstfire
Global Opportunities Fund, LLC Securities Purchase Agreement and 12% Convertible Promissory Note
On
March 21, 2022, Simplicity Esports and Gaming Company (the “Company”) entered into a securities purchase agreement (the “Firstfire
Global SPA”), dated as of March 21, 2022, with Firstfire Global Opportunities Fund, LLC, LLC (“Firstfire Global”),
pursuant to which the Company issued a 12% promissory convertible note (the “Firstfire Global Note”) with a maturity date
of September 21, 2022 (the “Firstfire Global Maturity Date”), in the principal sum of $110,000.00. In addition, the Company
issued 935 shares of its common stock to Firstfire Global as a commitment fee pursuant to the Firstfire Global SPA. Pursuant to the terms
of the Firstfire Global Note, the Company agreed to pay to Firstfire Global $110,000.00 and to pay interest on the principal balance
at the rate of 12% per annum (provided that the first six months of interest ($6,600.00) shall be guaranteed and the remaining 6 months
of interest shall be deemed earned in full as of the Issue Date thereof. The Firstfire Global Note carries an original issue discount
of $10,000.00. Accordingly, Firstfire Global paid the purchase price of $100,000.00 in exchange for the Firstfire Global Note. The Company
intends to use the proceeds for working capital. Firstfire Global may convert the Firstfire Global Note into the Company’s common
stock (subject to the beneficial ownership limitations of 4.99% in the Firstfire Global Note; provided however, that the limitation on
conversion may be waived (up to 9.99%) by Firstfire Global upon, at the election of Firstfire Global, not less than 61 days’ prior
notice to the Company) at any time at a conversion price equal to $1.00 per share, as the same may be adjusted as provided in the Firstfire
Global Note.
The
Company may prepay the Firstfire Global Note at any time prior to maturity in accordance with the terms of the Firstfire Global Note.
The Firstfire Global Note contains customary events of default relating to, among other things, payment defaults, breach of representations
and warranties, and breach of provisions of the Firstfire Global Note or the Firstfire Global SPA.
Upon
the occurrence of any Event of Default (as defined in the Firstfire Global Note), which has not been cured within the time prescribed
in the Firstfire Global Note, it shall become immediately due and payable and the Company shall pay to Firstfire Global, in full satisfaction
of its obligations hereunder, an amount equal to the principal amount then outstanding plus accrued interest multiplied by 125%.
Firstfire
Global Opportunities Fund, LLC Common Stock Purchase Warrant
Pursuant
to the terms of the Firstfire Global SPA, on March 21, 2022, the Company also issued to Firstfire Global a three-year warrant (the “Firstfire
Global Warrant”) to purchase 50,000 shares of the Company’s common stock at an exercise price of $1.00.
Firstfire
Global Opportunities Fund, LLC Registration Rights Agreement
Pursuant
to the terms of the Firstfire Global SPA, on March 21, 2022, the Company also entered into a registration rights agreement, dated March
21, 2022, by and between the Company and Firstfire Global (the “Firstfire Global Registration Rights Agreement”). Pursuant
to the terms of the Firstfire Global Registration Rights Agreement, the Company agreed to prepare and file with the SEC a registration
statement covering the resale of all shares issued or issuable pursuant to the Firstfire Global SPA, including shares issued upon conversion
of the Firstfire Global Note or upon exercise of the Firstfire Global Warrant. The Company agreed to use its commercially reasonable
efforts to have the registration statement filed with the SEC within 30 days following March 21, 2022 and to have the registration statement
declared effective by the SEC within 60 days following March 21, 2022.
The
Firstfire Global Registration Rights Agreement contains customary indemnification provisions.
The
description of the Firstfire Global SPA, the Firstfire Global Note, the Firstfire Global Warrant, and the Firstfire Global Registration
Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the Firstfire Global SPA, the Firstfire
Global Note, the Firstfire Global Warrant, and the Firstfire Global Registration Rights Agreement, copies of which will be filed as exhibits
to the company’s next periodic report.
GS
Capital Partners, LLC Securities Purchase Agreement and 12% Convertible Promissory Note
On
March 21, 2022, the Company entered into a securities purchase agreement (the “GS Capital SPA”), dated as of March 21, 2022,
with GS Capital Partners, LLC (“GS Capital”), pursuant to which the Company issued a 12% promissory convertible note (the
“GS Capital Note”) with a maturity date of September 21, 2022 (the “GS Capital Maturity Date”), in the principal
sum of $82,500.00. In addition, the Company issued 703 shares of its common stock to GS Capital as a commitment fee pursuant to the GS
Capital SPA. Pursuant to the terms of the GS Capital Note, the Company agreed to pay to GS Capital $82,500.00 and to pay interest on
the principal balance at the rate of 12% per annum (provided that the first six months of interest ($4,950.00) shall be guaranteed and
the remaining 6 months of interest shall be deemed earned in full as of the Issue Date thereof. The GS Capital Note carries an original
issue discount of $7,500.00. Accordingly, GS Capital paid the purchase price of $75,000.00 in exchange for the GS Capital Note. The Company
intends to use the proceeds for working capital. GS Capital may convert the GS Capital Note into the Company’s common stock (subject
to the beneficial ownership limitations of 4.99% in the GS Capital Note; provided however, that the limitation on conversion may be waived
(up to 9.99%) by GS Capital upon, at the election of GS Capital, not less than 61 days’ prior notice to the Company) at any time
at a conversion price equal to $1.00 per share, as the same may be adjusted as provided in the GS Capital Note.
The
Company may prepay the GS Capital Note at any time prior to maturity in accordance with the terms of the GS Capital Note. The GS Capital
Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties,
and breach of provisions of the GS Capital Note or the GS Capital SPA.
Upon
the occurrence of any Event of Default (as defined in the GS Capital Note), which has not been cured within the time prescribed in the
GS Capital Note, it shall become immediately due and payable and the Company shall pay to GS Capital, in full satisfaction of its obligations
hereunder, an amount equal to the principal amount then outstanding plus accrued interest multiplied by 125%.
GS
Capital Common Stock Purchase Warrant
Pursuant
to the terms of the GS Capital SPA, on March 21, 2022, the Company also issued to GS Capital a three-year warrant (the “GS Capital
Warrant”) to purchase 37,500 shares of the Company’s common stock at an exercise price of $1.00.
GS
Capital Registration Rights Agreement
Pursuant
to the terms of the GS Capital SPA, on March 21, 2022, the Company also entered into a registration rights agreement, dated March 21,
2022, by and between the Company and GS Capital (the “GS Capital Registration Rights Agreement”). Pursuant to the terms of
the GS Capital Registration Rights Agreement, the Company agreed to prepare and file with the SEC a registration statement covering the
resale of all shares issued or issuable pursuant to the GS Capital SPA, including shares issued upon conversion of the GS Capital Note
or upon exercise of the GS Capital Warrant. The Company agreed to use its commercially reasonable efforts to have the registration statement
filed with the SEC within 30 days following March 21, 2022 and to have the registration statement declared effective by the SEC within
60 days following March 21, 2022.
The
GS Capital Registration Rights Agreement contains customary indemnification provisions.
The
description of the GS Capital SPA, the GS Capital Note, the GS Capital Warrant, and the GS Capital Registration Rights Agreement does
not purport to be complete and is qualified in its entirety by reference to the GS Capital SPA, the GS Capital Note, the GS Capital Warrant,
and the GS Capital Registration Rights Agreement, copies of which will be filed as exhibits to the company’s next periodic report.
Ionic
Ventures, LLC Securities Purchase Agreement and 12% Convertible Promissory Note
On
March 21, 2022, the Company entered into a securities purchase agreement (the “Ionic SPA”), dated as of March 21, 2022, with
Ionic Ventures, LLC (“Ionic”), pursuant to which the Company issued a 12% promissory convertible note (the “Ionic Note”)
with a maturity date of September 21, 2022 (the “Ionic Maturity Date”), in the principal sum of $110,000.00. In addition,
the Company issued 935 shares of its common stock to Ionic as a commitment fee pursuant to the Ionic SPA. Pursuant to the terms of the
Ionic Note, the Company agreed to pay to Ionic $110,000.00 and to pay interest on the principal balance at the rate of 12% per annum
(provided that the first six months of interest ($6,600.00) shall be guaranteed and the remaining 6 months of interest shall be deemed
earned in full as of the Issue Date thereof. The Ionic Note carries an original issue discount of $10,000.00. Accordingly, Ionic paid
the purchase price of $100,000.00 in exchange for the Ionic Note. The Company intends to use the proceeds for working capital. Ionic
may convert the Ionic Note into the Company’s common stock (subject to the beneficial ownership limitations of 4.99% in the Ionic
Note; provided however, that the limitation on conversion may be waived (up to 9.99%) by Ionic upon, at the election of Ionic, not less
than 61 days’ prior notice to the Company) at any time at a conversion price equal to $1.00 per share, as the same may be adjusted
as provided in the Ionic Note.
The
Company may prepay the Ionic Note at any time prior to maturity in accordance with the terms of the Ionic Note. The Ionic Note contains
customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of
provisions of the Ionic Note or the Ionic SPA.
Upon
the occurrence of any Event of Default (as defined in the Ionic Note), which has not been cured within the time prescribed in the Ionic
Note, it shall become immediately due and payable and the Company shall pay to Ionic, in full satisfaction of its obligations hereunder,
an amount equal to the principal amount then outstanding plus accrued interest multiplied by 125%.
Ionic
Ventures, LLC Common Stock Purchase Warrant
Pursuant
to the terms of the Ionic SPA, on March 21, 2022, the Company also issued to Ionic a three-year warrant (the “Ionic Warrant”)
to purchase 50,000 shares of the Company’s common stock at an exercise price of $1.00.
Ionic
Ventures, LLC Registration Rights Agreement
Pursuant
to the terms of the Ionic SPA, on March 21, 2022, the Company also entered into a registration rights agreement, dated March 21, 2022,
by and between the Company and Ionic (the “Ionic Registration Rights Agreement”). Pursuant to the terms of the Ionic Registration
Rights Agreement, the Company agreed to prepare and file with the SEC a registration statement covering the resale of all shares issued
or issuable pursuant to the Ionic SPA, including shares issued upon conversion of the Ionic Note or upon exercise of the Ionic Warrant.
The Company agreed to use its commercially reasonable efforts to have the registration statement filed with the SEC within 30 days following
March 21, 2022 and to have the registration statement declared effective by the SEC within 60 days following March 21, 2022.
The
Ionic Registration Rights Agreement contains customary indemnification provisions.
The
description of the Ionic SPA, the Ionic Note, the Ionic Warrant, and the Ionic Registration Rights Agreement does not purport to be complete
and is qualified in its entirety by reference to the Ionic SPA, the Ionic Note, the Ionic Warrant, and the Ionic Registration Rights
Agreement, copies of which will be filed as exhibits to the company’s next periodic report.
Labrys
Amendment
As
previously disclosed in the Company’s Current Report on Form 8-K filed by the Company on February 24, 2021 with the Securities
and Exchange Commission (the “SEC”), on February 19, 2021, the Company and Labrys Fund, LP (“Labrys”) entered
a securities purchase agreement (the “Labrys SPA”), pursuant to which the Company issued a 12% promissory note (the “Labrys
Note”) with a maturity date of February 19, 2022 in the principal sum of $1,650,000. As of March 16, 2022, the Company and Labrys
entered into Amendment #2 (the “Labrys Amendment”) to the Labrys SPA and the Labrys Note, as amended. Pursuant to the terms
of the Labrys Amendment, the maturity date of the Labrys Note was extended to the earlier of (i) September 15, 2022, and (ii) the date
that the Company’s common stock is listed on the Nasdaq Stock Market or the New York Stock Exchange. In addition, the Labrys Note
was amended to provide that Labrys has the right, at any time on or following the date that an event of default occurs under the Labrys
Note, as amended, to convert all or any portion of the then outstanding and unpaid principal and interest into common stock, subject
to a 4.99% equity blocker. In the Labrys Amendment, the parties also agreed that the Company has already received cash proceeds in excess
of the $2,000,000 minimum threshold referenced in the Labrys Note. Pursuant to the terms of the Labrys Amendment, Labrys waived its rights
to receive any portion of the next $750,000 of cash proceeds received by the Company to the extent that such amounts are received by
the Company between March 15, 2022 and April 9, 2022.
Except
as set forth in the Labrys Amendment, the Labrys Note, as amended, remains in full force and effect.
The
description of the Labrys Amendment does not purport to be complete and is qualified in its entirety by reference to the Labrys Amendment,
a copy of which will be filed as an exhibit to the company’s next periodic report.
Lucas
Ventures Note Amendment
As
previously disclosed in the Company’s Current Report on Form 8-K filed by the Company on September 7, 2021 with the SEC, on August
31, 2021, the Company issued to Lucas Ventures, LLC (“Lucas Ventures”) a 12% promissory note (the “Lucas Ventures Note”)
with a maturity date of August 31, 2023, in the principal amount of $200,000. As of March 16, 2022, the Company and Lucas Ventures entered
into an Amendment and Waiver Pursuant to Convertible Promissory Note (the “Lucas Ventures Amendment”). Pursuant to the terms
of the Lucas Ventures Amendment, the parties agreed that the FirstFire Note, FirstFire Warrant, GS Capital Note, GS Capital Warrant,
Ionic Note, Ionic Warrant, Jefferson Street Note, and Jefferson Street Warrant would not be deemed a “Dilutive Issuance”
as provided in the Lucas Ventures Note. In addition, pursuant to the terms of the Lucas Ventures Amendment, the conversion price of the
Lucas Ventures Note was decreased from $11.50 per share to $1.00 per share; provided, however, that upon failure to make any payment
under the Lucas Ventures Note, as amended, the conversion price will be $0.50 per share, as the same may be adjusted as provided in the
Lucas Ventures Note, as amended. Pursuant to the terms of the Lucas Ventures Amendment, the parties also agreed that Lucas Ventures may
not convert the Lucas Ventures Note, as amended, prior to September 15, 2022.
Except
as set forth in the Lucas Ventures Amendment, the Lucas Ventures Note remains in full force and effect.
The
description of the Lucas Ventures Amendment does not purport to be complete and is qualified in its entirety by reference to the Lucas
Ventures Amendment, a copy of which will be filed as an exhibit to the company’s next periodic report.
LGH
Note Amendment
As
previously disclosed in the Company’s Current Report on Form 8-K filed by the Company on September 7, 2021 with the SEC, on August
31, 2021, the Company issued to LGH Investments, LLC (“LGH”) a 12% promissory note (the “LGH Note”) with a maturity
date of August 31, 2023, in the principal amount of $200,000. As of March 16, 2022, the Company and LGH entered into an Amendment and
Waiver Pursuant to Convertible Promissory Note (the “LGH Amendment”). Pursuant to the terms of the LGH Amendment, the parties
agreed that the FirstFire Note, FirstFire Warrant, GS Capital Note, GS Capital Warrant, Ionic Note, Ionic Warrant, Jefferson Street Note,
and Jefferson Street Warrant would not be deemed a “Dilutive Issuance” as provided in the LGH Note. In addition, pursuant
to the terms of the LGH Amendment, the conversion price of the LGH Note was decreased from $11.50 per share to $1.00 per share; provided,
however, that upon failure to make any payment under the LGH Note, as amended, the conversion price will be $0.50 per share, as the same
may be adjusted as provided in the LGH Note, as amended. Pursuant to the terms of the LGH Amendment, the parties also agreed that LGH
may not convert the LGH Note, as amended, prior to September 15, 2022.
Except
as set forth in the LGH Amendment, the LGH Note remains in full force and effect.
The
description of the LGH Amendment does not purport to be complete and is qualified in its entirety by reference to the LGH Amendment,
a copy of which will be filed as an exhibit to the company’s next periodic report.