Item 1.01 Entry into a Material Definitive Agreement.
On January 14, 2020 (the "Effective Date"), Allied Esports Entertainment, Inc.
(the "Company") entered into a Share Purchase Agreement (the "Purchase
Agreement") with BPR Cumulus LLC ("Investor"), an affiliate of Brookfield
Property Partners. Pursuant to the Purchase Agreement, the Company issued to
Investor 758,725 shares (the "Shares") of the Company's common stock in exchange
for $5,000,000 (the "Purchase Price") on January 16, 2020. The Purchase Price is
to be used by the Company or its subsidiaries to develop integrated esports
experience venues at mutually agreed upon shopping malls owned and/or operated
by Investor or any of its affiliates (each, an "Investor Mall") that will
include a dedicated gaming space and production capabilities to attract and to
activate esports and other emerging live events (each, an "Esports Venue"). To
that end, half of the Purchase Price is held in escrow until the parties execute
a written lease agreement for the first Esports Venue, and the other half is
held in escrow until the parties execute a written lease agreement for the
second Esports Venue.
Under the Purchase Agreement, the Company is obligated to file with the
Securities and Exchange Commission (the "Commission") a registration statement
on or before March 30, 2020 registering the resale of the Shares (as amended
from time to time, the "Registration Statement"), and use its best efforts to
have the Registration Statement declared effective within the earlier of (i)
sixty (60) days of the filing of the Registration Statement and (ii) five (5)
business days after being advised by the Commission that the Commission is not
reviewing the Registration Statement or has no further comments to the
Registration Statement.
Under the Purchase Agreement, the Company, or one of its subsidiaries, must
create, produce, and execute three (3) esports events during each calendar year
2020, 2021 and 2022 that will include the Company's HyperX Esports Truck at one
or more Investor Malls at mutually agreed times.
The foregoing description of the Purchase Agreement is qualified in its entirety
by reference thereto, which is filed as Exhibit 10.1 to this Current Report, and
is incorporated herein by reference. On January 14, 2020, the Company issued a
press release regarding the Purchase Agreement and the transactions contemplated
therein, a copy of which is filed herewith as Exhibit 99.1.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure in Item 1.01 is incorporated herein by reference thereto. The
Shares were not registered under the Securities Act of 1933, as amended (the
"Securities Act") at the time of issuance, and therefore may not be offered or
sold in the United States absent registration or an applicable exemption from
registration requirements. For this issuance, the Company relied on the
exemption from federal registration under Section 4(a)(2) of the Securities Act
and/or Rule 506 promulgated thereunder, based on the Company's belief that the
offer and sale of such securities has not and will not involve a public
offering.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 Share Purchase Agreement dated January 14, 2020 by and between Allied
Esports Entertainment, Inc. and BPR Cumulus LLC.
99.1 Press Release dated January 14, 2020
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