Item
1.01. Entry into Material Definitive Agreement.
2022
Ionic Ventures Securities Purchase Agreement and 12% Convertible Promissory Note
On
July 14, 2022, Simplicity Esports and Gaming Company (the “Company”) entered into a securities purchase agreement (the “2022
Ionic SPA”), dated as of July 14, 2022, with Ionic Ventures, LLC (“Ionic”), pursuant to which the Company issued a
12% promissory convertible note (the “2022 Ionic Note”) with a maturity date of September 14, 2022, in the principal sum of $27,500. In addition, the Company issued 935 shares of its common stock to Ionic as a
commitment fee pursuant to the 2022 Ionic SPA. Pursuant to the terms of the 2022 Ionic Note, the Company agreed to pay to Ionic $27,500
and to pay interest on the principal balance at the rate of 12% per annum. The 2022 Ionic Note carries an original issue discount of
$2,500. Accordingly, Ionic paid the purchase price of $25,000 in exchange for the 2022 Ionic Note. The Company intends to use the proceeds
for working capital. Ionic may convert the 2022 Ionic Note into the Company’s common stock (subject to the beneficial ownership
limitations of 4.99% in the 2022 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
$0.10 per share, as the same may be adjusted as provided in the 2022 Ionic Note.
The
Company may prepay the 2022 Ionic Note in accordance with the terms of the 2022 Ionic Note, with the understanding that two months of
interest ($550) is guaranteed and earned in full as of July 14, 2022. The 2022 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 2022 Ionic Note or
the 2022 Ionic SPA.
Upon
the occurrence of any Event of Default (as defined in the 2022 Ionic Note), which has not been cured within the time prescribed in the
2022 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%.
2022
Ionic Ventures Common Stock Purchase Warrant
Pursuant
to the terms of the 2022 Ionic SPA, on July 14, 2022, the Company also issued to Ionic a three-year warrant (the “2022 Ionic Warrant”)
to purchase 50,000 shares of the Company’s common stock at an exercise price of $1.00.
The
description of the 2022 Ionic SPA, the 2022 Ionic Note, and the 2022 Ionic Warrant does not purport to be complete and is qualified in
its entirety by reference to the 2022 Ionic SPA, the 2022 Ionic Note, and the 2022 Ionic Warrant, copies of which are filed as Exhibits
10.1, 10.2, and 10.3, respectively, hereto and are incorporated herein by reference.
2022
Jefferson Street Securities Purchase Agreement and 12% Convertible Promissory Note
On
July 14, 2022, the Company entered into a securities purchase agreement (the “2022 Jefferson Street SPA”), dated as of July
14, 2022, with Jefferson Street Capital, LLC (“Jefferson Street”), pursuant to which the Company issued a 12% promissory
convertible note (the “2022 Jefferson Street Note”) with a maturity date of September 14, 2022, in the principal sum of $27,500.
In addition, the Company issued 935 shares of its common stock to Jefferson Street as a commitment fee pursuant to the 2022 Jefferson
Street SPA. Pursuant to the terms of the 2022 Jefferson Street Note, the Company agreed to pay to Jefferson Street $27,500 and to pay
interest on the principal balance at the rate of 12% per annum. The 2022 Jefferson Street Note carries an original issue discount of
$2,500. Accordingly, Jefferson Street paid the purchase price of $25,000 in exchange for the 2022 Jefferson Street Note. The Company
intends to use the proceeds for working capital. Jefferson Street may convert the 2022 Jefferson Street Note into the Company’s
common stock (subject to the beneficial ownership limitations of 4.99% in the 2022 Jefferson Street Note; provided however, that the
limitation on conversion may be waived (up to 9.99%) by Jefferson Street upon, at the election of Jefferson Street, not less than 61
days’ prior notice to the Company) at any time at a conversion price equal to $0.10 per share, as the same may be adjusted as provided
in the 2022 Jefferson Street Note.
The
Company may prepay the 2022 Jefferson Street Note in accordance with the terms of the 2022 Jefferson Street Note, with the understanding
that two months of interest ($550) is guaranteed and earned in full as of July 14, 2022. The 2022 Jefferson Street Note contains customary
events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions
of the 2022 Jefferson Street Note or the 2022 Jefferson Street SPA.
Upon
the occurrence of any Event of Default (as defined in the 2022 Jefferson Street Note), which has not been cured within the time prescribed
in the 2022 Jefferson Street Note, it shall become immediately due and payable and the Company shall pay to Jefferson Street, in full
satisfaction of its obligations hereunder, an amount equal to the principal amount then outstanding plus accrued interest multiplied
by 125%.
2022
Jefferson Street Common Stock Purchase Warrant
Pursuant
to the terms of the 2022 Jefferson Street SPA, on July 14, 2022, the Company also issued to Jefferson Street a three-year warrant (the
“2022 Jefferson Street Warrant”) to purchase 50,000 shares of the Company’s common stock at an exercise price of $1.00.
The
description of the 2022 Jefferson Street SPA, the 2022 Jefferson Street Note, and the 2022 Jefferson Street Warrant does not purport
to be complete and is qualified in its entirety by reference to the 2022 Jefferson Street SPA, the 2022 Jefferson Street Note, and the
2022 Jefferson Street Warrant, copies of which are filed as Exhibits 10.4, 10.5, and 10.6, respectively, hereto and are incorporated
herein by reference.
2022
FirstFire Securities Purchase Agreement and 12% Convertible Promissory Note
On
July 14, 2022, the Company entered into a securities purchase agreement (the “2022 FirstFire SPA”), dated as of July 14,
2022, with FirstFire Global Opportunities Fund, LLC (“FirstFire”), pursuant to which the Company issued a 12% promissory
convertible note (the “2022 FirstFire Note”) with a maturity date of September 14, 2022, in the principal sum of $27,500.
In addition, the Company issued 935 shares of its common stock to FirstFire as a commitment fee pursuant to the 2022 FirstFire SPA. Pursuant
to the terms of the 2022 FirstFire Note, the Company agreed to pay to FirstFire $27,500 and to pay interest on the principal balance
at the rate of 12% per annum. The 2022 FirstFire Note carries an original issue discount of $2,500. Accordingly, FirstFire paid the purchase
price of $25,000 in exchange for the 2022 FirstFire Note. The Company intends to use the proceeds for working capital. FirstFire may
convert the 2022 FirstFire Note into the Company’s common stock (subject to the beneficial ownership limitations of 4.99% in the
2022 FirstFire Note; provided however, that the limitation on conversion may be waived (up to 9.99%) by FirstFire upon, at the election
of FirstFire, not less than 61 days’ prior notice to the Company) at any time at a conversion price equal to $0.10 per share, as
the same may be adjusted as provided in the 2022 FirstFire Note.
The
Company may prepay the 2022 FirstFire Note in accordance with the terms of the 2022 FirstFire Note, with the understanding that two months
of interest ($550) is guaranteed and earned in full as of July 14, 2022. The 2022 FirstFire Note contains customary events of default
relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the 2022 FirstFire
Note or the 2022 FirstFire SPA.
Upon
the occurrence of any Event of Default (as defined in the 2022 FirstFire Note), which has not been cured within the time prescribed in
the 2022 FirstFire Note, it shall become immediately due and payable and the Company shall pay to FirstFire, in full satisfaction of
its obligations hereunder, an amount equal to the principal amount then outstanding plus accrued interest multiplied by 125%.
2022
FirstFire Common Stock Purchase Warrant
Pursuant
to the terms of the 2022 FirstFire SPA, on July 14, 2022, the Company also issued to FirstFire a three-year warrant (the “2022
FirstFire Warrant”) to purchase 50,000 shares of the Company’s common stock at an exercise price of $1.00.
The
description of the 2022 FirstFire SPA, the 2022 FirstFire Note, and the 2022 FirstFire Warrant does not purport to be complete and is
qualified in its entirety by reference to the 2022 FirstFire SPA, the 2022 FirstFire Note, and the 2022 FirstFire Warrant, copies of
which are filed as Exhibits 10.7, 10.8, and 10.9, respectively, hereto and are incorporated herein by reference.
2022
GS Capital Securities Purchase Agreement and 12% Convertible Promissory Note
On
July 14, 2022, the Company entered into a securities purchase agreement (the “2022 FirstFire SPA”), dated as of July 14,
2022, with GS Capital Partners, LLC (“GS Capital”), pursuant to which the Company issued a 12% promissory convertible note
(the “2022 GS Capital Note”) with a maturity date of September 14, 2022, in the principal sum of $27,500. In addition, the
Company issued 935 shares of its common stock to GS Capital as a commitment fee pursuant to the 2022 GS Capital SPA. Pursuant to the
terms of the 2022 GS Capital Note, the Company agreed to pay to GS Capital $27,500 and to pay interest on the principal balance at the
rate of 12% per annum. The 2022 GS Capital Note carries an original issue discount of $2,500. Accordingly, GS Capital paid the purchase
price of $25,000 in exchange for the 2022 GS Capital Note. The Company intends to use the proceeds for working capital. GS Capital may
convert the 2022 GS Capital Note into the Company’s common stock (subject to the beneficial ownership limitations of 4.99% in the
2022 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 $0.10 per share,
as the same may be adjusted as provided in the 2022 GS Capital Note.
The
Company may prepay the 2022 GS Capital Note in accordance with the terms of the 2022 GS Capital Note, with the understanding that two
months of interest ($550) is guaranteed and earned in full as of July 14, 2022. The 2022 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
2022 GS Capital Note or the 2022 GS Capital SPA.
Upon
the occurrence of any Event of Default (as defined in the 2022 GS Capital Note), which has not been cured within the time prescribed
in the 2022 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%.
2022
GS Capital Common Stock Purchase Warrant
Pursuant
to the terms of the 2022 GS Capital SPA, on July 14, 2022, the Company also issued to GS Capital a three-year warrant (the “2022
GS Capital Warrant”) to purchase 50,000 shares of the Company’s common stock at an exercise price of $1.00.
The
description of the 2022 GS Capital SPA, the 2022 GS Capital Note, and the 2022 GS Capital Warrant does not purport to be complete and
is qualified in its entirety by reference to the 2022 GS Capital SPA, the 2022 GS Capital Note, and the 2022 GS Capital Warrant, copies
of which are filed as Exhibits 10.10, 10.11, and 10.12, respectively, hereto and are incorporated herein by reference.
