Item 1.01. Entry into Material Definitive Agreement.

2023 Ionic Ventures Securities Purchase Agreement and 12% Convertible Promissory Note

On January 30, 2023, Simplicity Esports and Gaming Company (the "Company") entered into a securities purchase agreement (the "2023 Ionic SPA"), dated as of January 30, 2023, with Ionic Ventures, LLC ("Ionic"), pursuant to which the Company issued a 12% promissory convertible note (the "2023 Ionic Note") with a maturity date of May 30, 2023, in the principal sum of $35,200. Pursuant to the terms of the 2023 Ionic Note, the Company agreed to pay to Ionic $35,200 and to pay interest on the principal balance at the rate of 12% per annum. The 2023 Ionic Note carries an original issue discount of $3,200. Accordingly, Ionic paid the purchase price of $32,000 in exchange for the 2023 Ionic Note. The Company intends to use the proceeds for working capital. See Item 8.01, which information is incorporated herein by reference. Ionic may convert the 2023 Ionic Note into the Company's common stock (subject to the beneficial ownership limitations of 4.99% in the 2023 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 $0.0175 per share, as the same may be adjusted as provided in the 2023 Ionic Note.

The Company may prepay the 2023 Ionic Note in accordance with the terms of the 2023 Ionic Note, with the understanding that $1,056 of interest is guaranteed and earned in full as of January 30, 2023. The 2023 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 2023 Ionic Note or the 2023 Ionic SPA.

Upon the occurrence of any Event of Default (as defined in the 2023 Ionic Note), which has not been cured within the time prescribed in the 2023 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%.

The 2023 Ionic SPA contains certain scrivener's errors referencing a warrant although the parties to the 2023 Ionic SPA did not contemplate the issuance of a warrant in this transaction. The Company is in the process of preparing an amendment to the 2023 Ionic SPA to remove the inadvertent references to a warrant.

The description of the 2023 Ionic SPA and the 2023 Ionic Note does not purport to be complete and is qualified in its entirety by reference to the 2023 Ionic SPA and the 2023 Ionic Note, copies of which are filed as Exhibits 10.1 and 10.2, respectively, hereto and are incorporated herein by reference.

2023 FirstFire Securities Purchase Agreement and 12% Convertible Promissory Note

On January 30, 2023, the Company entered into a securities purchase agreement (the "2023 FirstFire SPA"), dated as of January 30, 2023, with FirstFire Global Opportunities Fund, LLC ("FirstFire"), pursuant to which the Company issued a 12% promissory convertible note (the "2023 FirstFire Note") with a maturity date of May 30, 2023, in the principal sum of $35,200. Pursuant to the terms of the 2023 FirstFire Note, the Company agreed to pay to FirstFire $35,200 and to pay interest on the principal balance at the rate of 12% per annum. The 2023 FirstFire Note carries an original issue discount of $3,200. Accordingly, FirstFire paid the purchase price of $32,000 in exchange for the 2023 FirstFire Note. The Company intends to use the proceeds for working capital. See Item 8.01, which information is incorporated herein by reference. FirstFire may convert the 2023 FirstFire Note into the Company's common stock (subject to the beneficial ownership limitations of 4.99% in the 2023 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 $0.0175 per share, as the same may be adjusted as provided in the 2023 FirstFire Note.

The Company may prepay the 2023 FirstFire Note in accordance with the terms of the 2023 FirstFire Note, with the understanding that $1,056 of interest is guaranteed and earned in full as of January 30, 2023. The 2023 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 2023 FirstFire Note or the 2023 FirstFire SPA.

Upon the occurrence of any Event of Default (as defined in the 2023 FirstFire Note), which has not been cured within the time prescribed in the 2023 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%.

The 2023 FirstFire SPA contains certain scrivener's errors referencing a warrant although the parties to the 2023 FirstFire SPA did not contemplate the issuance of a warrant in this transaction. The Company is in the process of preparing an amendment to the 2023 FirstFire SPA to remove the inadvertent references to a warrant.

The description of the 2023 FirstFire SPA and the 2023 FirstFire Note does not purport to be complete and is qualified in its entirety by reference to the 2023 FirstFire SPA and the 2023 FirstFire Note, copies of which are filed as Exhibits 10.3 and 10.4, respectively, hereto 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 with respect to the 2023 Ionic Note and the 2023 FirstFire Note and is incorporated herein by reference.




Item 8.01. Other Events.

As previously disclosed, the Company entered into an exchange agreement, as amended (the "Exchange Agreement"), by and among the Company, Diverted River Technology, LLC ("Diverted River"), the member(s) of Diverted River from time to time (the "Members") and Zachary Johnson, as the Members' representative. Pursuant to the terms of the Exchange Agreement, the Company agreed to acquire from the Members 100% of the membership interests of Diverted River held by the Members as of the closing (the "Closing"), in exchange for the issuance by the Company to the Members of shares of the Company's common stock equal to 80% of the issued and outstanding shares of the Company's common stock as of the Closing. The parties may terminate the Exchange Agreement pursuant to the terms of the Exchange Agreement, including, but not limited to, if the conditions to Closing have not been satisfied or waived by February 1, 2023. As of February 2, 2023, the Exchange Agreement has not been terminated. The Company entered into the 2023 Ionic SPA and the 2023 FirstFire SPA, and issued the 2023 Ionic Note and the 2023 FirstFire Note, in order that (i) the Company is able to complete the filing of its Quarterly Report on Form 10-Q for the quarter ended November 30, 2022; and (ii) the Company can continue moving toward satisfaction of the closing conditions pursuant to the Exchange Agreement.

Item 9.01. Financial Statements and Exhibits.





(d) Exhibits



Exhibit No.   Description
10.1            Securities Purchase Agreement, dated as of January 30, 2023, by
              and between the registrant and Ionic Ventures, LLC.
10.2            Convertible Promissory Note, dated as of January 30, 2023, issued
              by the registrant in favor of Ionic Ventures, LLC.
10.3            Securities Purchase Agreement, dated as of January 30, 2023, by
              and between the registrant and FirstFire Global Opportunities Fund,
              LLC.
10.4            Convertible Promissory Note, dated as of January 30, 2023, issued
              by the registrant in favor of FirstFire Global Opportunities Fund,
              LLC.
104           Cover Page Interactive Data File (embedded within the Inline XBRL
              document).

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