# EDGAR Filing Document

**Accession Number:** 0001708410
**File Stem:** 0001493152-23-009977
**Filing Date:** 2023-3
**Character Count:** 39305
**Document Hash:** 7e93a22a8a47c406378cd74a5b970137
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-23-009977.hdr.sgml**: 20230331

**ACCESSION NUMBER**: 0001493152-23-009977

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 16

**CONFORMED PERIOD OF REPORT**: 20230310

**ITEM INFORMATION**: Entry into a Material Definitive Agreement

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230331

**DATE AS OF CHANGE**: 20230331

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SIMPLICITY ESPORTS & GAMING Co
- **CENTRAL INDEX KEY:** 0001708410
- **STANDARD INDUSTRIAL CLASSIFICATION:** RETAIL-EATING & DRINKING PLACES [5810]
- **IRS NUMBER:** 821231127
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0531

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38188
- **FILM NUMBER:** 23783678

**BUSINESS ADDRESS:**
- **STREET 1:** 7000 W. PALMETTO PARK RD.,
- **STREET 2:** SUITE 505,
- **CITY:** BOCA RATON,
- **STATE:** FL
- **ZIP:** 33433
- **BUSINESS PHONE:** 855-345-9467

**MAIL ADDRESS:**
- **STREET 1:** 7000 W. PALMETTO PARK RD.,
- **STREET 2:** SUITE 505,
- **CITY:** BOCA RATON,
- **STATE:** FL
- **ZIP:** 33433

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SMAAASH ENTERTAINMENT INC.
- **DATE OF NAME CHANGE:** 20181127

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** I-AM CAPITAL ACQUISITION Co
- **DATE OF NAME CHANGE:** 20170605

?xml version="1.0" encoding="utf-8"?

**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): **March 10, 2023**

**SIMPLICITY ESPORTS AND GAMING COMPANY**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-38188** | **82-1231127** |
| (State or other jurisdiction<br> of incorporation) | (Commission<br> File Number) | (I.R.S. Employer<br> Identification No.) |

---

**7000 W. Palmetto Park Rd., Suite 505**

**<u>Boca Raton, FL 33433</u>**

(Address of Principal Executive Offices)

**<u>(855) 345-9467</u>**

Registrant's telephone number, including area code

**<u>N/A</u>**

(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:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| None | N/A | N/A |

---

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 ☒

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 Material Definitive Agreement.**

As previously disclosed by Simplicity Esports and Gaming Company (the "Company") in its Current Report on Form 8-K filed on September 28, 2022 with the Securities and Exchange Commission (the "SEC"), on September 28, 2022, the Company entered into an exchange agreement (the "Exchange Agreement"), dated as of September 28, 2022, 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.

Pursuant to the terms of the Exchange Agreement, following the Closing, Diverted River will become a wholly owned subsidiary of the Company. Also following the Closing, it is expected that the Company's name will be changed to Diverted River Technology, Inc., and the business of the Company will become that of Diverted River, an ETO focused on a sustainable, high margin, recurring revenue business model that requires limited capital expenditures.

At the Closing, the Company will expand the size of the Company's Board of Directors (the "Board") by three persons, to a total of seven persons, and will name Mr. Johnson and, within 90 days after Closing, two other persons, as directors on the Board, one of whom will be an independent director. Also at the Closing, the Company will name Mr. Johnson as Chief Executive Officer of the Company. Within 90 days of Closing, the Board will name a Chief Technology Officer, subject to Mr. Johnson's approval. At the Closing, the Company will also enter into employment agreements with Mr. Johnson and certain other Diverted River employees as identified and agreed by the parties. Within 90 days of Closing, the Company will hire Velocity 42 Limited as its primary software developer.

The Exchange Agreement contains certain covenants, representations and warranties customary for an agreement of this type. In addition, the Closing is subject to the satisfaction or waiver of certain conditions, including, but not limited to, (i) the increase by the Company of its authorized shares of common stock to 250,000,000 shares; (ii) execution by Diverted River of agreements with clients generating at least $60,000 per month in revenue for at least 24 months following the Closing, with such agreements being in form and substance as agreed to by the Company and Diverted River; (iii) settlement by the Company of any debt with landlords related to the closure of the Company's gaming center venues; (iv) the Company having obtained binding commitments from investors to invest at least $4,000,000, through the issuance of shares of Company common stock; (v) repayment by the Company of its convertible notes, or execution of agreements with noteholders to convert such notes into shares of Company common stock comprising no more than 12.5% of the issued and outstanding common stock of the Company after giving effect to the Closing; (vi) reaching an agreement with warrant holders to amend the exercise price to be $1.00 per share; (vii) execution of note amendments by holders of Company promissory notes that are not presently convertible into shares of Company common stock such that the notes will be converted into Company common stock and such notes shall have been converted, with such shares being included in the 12.5% limitation set forth in clause (v) hereof; (viii) provision by Diverted River of audited financial statements; and (ix) completion of satisfactory due diligence reviews by the Company and Diverted River.

Pursuant to the terms of the Exchange Agreement, the parties could terminate the Exchange Agreement pursuant to the terms of the Exchange Agreement, including, but not limited to, if the conditions to Closing had not been satisfied or waived by December 15, 2022.

The description of the Exchange Agreement does not purport to be complete and is qualified in its entirety by reference to the Exchange Agreement, a copy of which was filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on September 28, 2022 is incorporated herein by reference.

Also as previously disclosed, on December 15, 2022, the parties entered into Amendment No. 1 to Exchange Agreement ("Amendment No. 1"). Pursuant to the terms of Amendment No. 1, the termination date was amended to be February 1, 2023. Except as set forth in Amendment No. 1, the Exchange Agreement remains in full force and effect.

The description of Amendment No. 1 does not purport to be complete and is qualified in its entirety by reference to Amendment No. 1, a copy of which was filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on December 16, 2022 and is incorporated herein by reference.

On March 10, 2023, the parties to the Exchange Agreement entered into Amendment No. 2 to Exchange Agreement ("Amendment No. 2"). Amendment No. 2 was executed on March 10, 2023 and placed in escrow. Amendment No. 2 was released from escrow on March 28, 2023.

Pursuant to the terms of Amendment No. 2, the termination date was amended to be July 14, 2023. In addition, pursuant to the terms of Amendment No. 2, the Company agreed to acquire from the Members 100% of the membership interests of Diverted River held by the Members as of the Closing in exchange for the issuance by the Company to the Members of shares of the Company's common stock equal to 75% of the issued and outstanding shares of the Company's common stock as of the Closing. The parties acknowledge that the Company is currently, or shall shortly become, a party to the Notes Exchange Agreement by and between the Company and the Noteholders (as hereinafter defined) of the Notes (as hereinafter defined), pursuant to which, at or simultaneous with the Closing hereunder, such Notes shall be exchanged for a number of shares of Company common stock equal to 5% of the Company's outstanding shares of common stock following the Closing and the closing of the Offering (as hereinafter defined) (the "Note Exchange Transactions"). The parties also acknowledge and agree that in connection with the transactions and the Note Exchange Transactions, the Company expects to complete an offering of Company common stock to certain additional investors (the "Offering"). The number of shares of common stock to be issued and sold in the Offering, when added to the shares of common stock issued and outstanding prior to the closing of the Note Exchange Transactions and the Closing, will comprise no more than 20% of the issued and outstanding shares of Company common stock following the closing of the Offering, the closing of the Note Exchange Transactions and the Closing, such that the ending capitalization of the Company at such time shall be comprised of (i) the investors in the Offering and the other shareholders of the Company, holding 20% of the issued and outstanding shares of the Company's common stock, (ii) the DRT Members holding 75% of the issued and outstanding shares of the Company's common stock; and (iii) the Noteholders, collectively, holding 5% of the issued and outstanding shares of the Company's common stock, and provided that such 5% number may be reduced as set forth in the Note Exchange Agreement, in which event the proportion of the shares of common stock to be held by the investors in the Offering and the other shareholders of the Company other than the DRT Members and the Noteholders, shall be adjusted from such current 20% number.

Except as set forth in Amendment No. 2, the Exchange Agreement, as amended, remains in full force and effect.

The description of Amendment No. 2 does not purport to be complete and is qualified in its entirety by reference to Amendment No. 2, a copy of which is filed as Exhibit 10.3 hereto and is incorporated herein by reference.

On March 21, 2023, the Company, Ionic Ventures, LLC ("Ionic"), FirstFire Global Opportunities Fund ("FirstFire"), Jefferson Street Capital ("Jefferson"), Labrys Fund ("Labrys"), GS Capital Partners ("GS"), and Lucas Ventures & LGH Investments ("Lucas" and collectively with Ionic, FirstFire, Jefferson, Labrys and GS, the "Noteholders") entered into a letter agreement (the "Letter Agreement") pursuant to which the Noteholders agreed to convert their Notes into a number of shares of the Company's common stock equal to 5% of the outstanding shares of common stock on March 21, 2023 (the "Equity Percentage Shares"). Each Noteholder agreed to convert its respective Note(s) into the equity percentage based on the ratio which the principal amount of such Noteholder's Note bears to the aggregate principal amount of all Noteholders. Pursuant to the terms of the Letter Agreement, "Notes" is defined to include the following promissory notes:

---

| | | |
|:---|:---|:---|
| **Noteholder** | **Origination** | **Principal and<br> Interest Balance**<br> **(In Dollars)** |
| FirstFire | 3/21/22 | 120819 |
| FirstFire | 7/14/22 | 29196 |
| FirstFire | 6/10/21 | 1364167 |
| FirstFire | 3/10/21 | 528847 |
| GS | 3/21/22 | 90614 |
| GS | 7/14/22 | 29196 |
| GS | 6/10/21 | 299678 |
| GS | 9/13/22 | 11440 |
| Ionic | 3/21/22 | 120819 |
| Ionic | 7/14/22 | 29196 |
| Ionic | 9/29/21 | 1526014 |
| Jefferson | 4/1/22 | 90162 |
| Jefferson | 8/24/21 | 327529 |
| Jefferson | 7/14/22 | 29196 |
| Labrys | 2/19/21 | 1021697 |
| LGH | 9/2/21 | 248000 |
| Lucas | 9/2/21 | 248000 |

---

The following promissory notes are expressly omitted from the definition of Notes:

---

| | | | |
|:---|:---|:---|:---|
| **Noteholder** | **Origination** | **Principal and<br> Interest Balance**<br> **(In Dollars)** | **Principal and<br> Interest Balance**<br> **(In Dollars)** |
| FirstFire | 9/8/22 |  | 68640 |
| FirstFire | 1/30/23 |  | 35200 |
| FirstFire | 3/8/23 |  | 16500 |
| Ionic | 9/8/22 |  | 68640 |
| Ionic | 1/30/23 |  | 35200 |
| Ionic | 3/8/23 |  | 16500 |
| Jefferson | 9/8/22 |  | 28600 |
| Jefferson | 1/30/23 |  | 35200 |

---

Notwithstanding the terms of the Letter Agreement, the Noteholders are entitled to continue conversions from March 21, 2023 until the Closing. Any conversions that occur in accordance with the Letter Agreement will reduce the number of shares of common stock that would be issued to each Noteholder upon conversion of each of its respective Notes equal to the ratio multiplied by the Equity Percentage Shares.

The description of the Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the Letter Agreement, a copy of which is filed as Exhibit 10.4 hereto and is incorporated herein by reference.

**Item 7.01. Regulation FD Disclosure.**

On March 31, 2023, the Company issued a press release announcing entry into Amendment No. 2 and the Letter Agreement. A copy of the press release is attached hereto as Exhibit 99.1.

The information included in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The information set forth under this Item 7.01 shall not be deemed an admission as to the materiality of any information in this Current Report on Form 8-K that is required to be disclosed solely to satisfy the requirements of Regulation FD.

**Item 9.01. Financial Statements and Exhibits.**

(d) Exhibits

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 10.1 | [Exchange Agreement, dated as of September 28, 2022, by and among the registrant, Diverted River Technology, LLC, the member(s) of Diverted River Technology, LLC from time to time and Zachary Johnson, as the Members' representative (incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form 8-K filed on September 28, 2022).](https://www.sec.gov/Archives/edgar/data/1708410/000149315222027023/ex10-1.htm) |
| 10.2 | [Amendment No. 1 to Exchange Agreement, dated as of December 15, 2022, by and among the registrant, Diverted River Technology, LLC, the member(s) of Diverted River Technology, LLC from time to time and Zachary Johnson, as the Members' representative (incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form 8-K filed on December 16, 2022).](https://www.sec.gov/Archives/edgar/data/1708410/000149315222035672/ex10-1.htm) |
| 10.3 | [Amendment No. 2 to Exchange Agreement, dated as of March 10, 2023, by and among the registrant, Diverted River Technology, LLC, the member(s) of Diverted River Technology, LLC from time to time and Zachary Johnson, as the Members' representative.](ex10-3.htm) |
| 10.4 | [Letter Agreement, dated as of March 21, 2023, by and among the registrant, Ionic Ventures, LLC, FirstFire Global Opportunities Fund, Jefferson Street Capital, Labrys Fund, GS Capital Partners, and Lucas Ventures & LGH Investments.](ex10-4.htm) |
| 99.1 | [Press release issued by the registrant on March 31, 2023.](ex99-1.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

**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.

---

| | | |
|:---|:---|:---|
|  | **SIMPLICITY ESPORTS AND GAMING COMPANY** | **SIMPLICITY ESPORTS AND GAMING COMPANY** |
| Date: March 31, 2023 | By: | */s/ Roman Franklin* |
|  |  | Roman Franklin |
|  |  | Chief Executive Officer |

---

## Exhibit 10.3

**Exhibit 10.3**

**Amendment No. 2 to Exchange Agreement**

**Dated as of March 10, 2023**

This Amendment No. 1 to Exchange Agreement (this "Amendment") is entered into as of the date first set forth above (the "Amendment Date") by and between (i) Simplicity Esports and Gaming Company, a Delaware corporation (the "Company"); (ii) Diverted River Technology, LLC, an Indiana limited liability company ("DRT"), and (iii) Zachary Johnson (the "Members' Representative"). Each of the Company, DRT and the Members' Representative may be referred to herein collectively as the "Parties" and separately as a "Party".

WHEREAS, the Parties are parties to that certain Exchange Agreement, dated as of September 29, 2022, as amended by the Amendment No. 1 to Exchange Agreement dated as of December 15, 2022 (as so amended, the "Original Agreement") and now desire to amend the Original Agreement, and the Original Agreement may be so amended in a writing executed by the Parties;

NOW THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the Parties to be derived herefrom, and intending to be legally bound hereby, it is hereby agreed as follows:

&nbsp;&nbsp;&nbsp;&nbsp;1. Defined
 terms used herein without definition shall have the meanings given in the Original Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;2. Pursuant
 to the provisions of Section 9.12 of the Original Agreement, the Original Agreement is hereby
 amended as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 date "December 15, 2022" in the definition of "Termination Date"
 in Section 1.01(ttt) of the Original Agreement is hereby amended to be "July 14, 2023".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Section
 2.02(b) of the Original Agreement is hereby amended and restated in its entirety to provide
 as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Exchange Shares.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The
 Parties acknowledge that the Company is currently, or shall shortly become a party to the
 Notes Exchange Agreement by and between the Company and certain holders (the "Noteholders")
 of promissory notes of the Company (the "Notes"), pursuant to which, at or simultaneous
 with the Closing hereunder, such Notes shall be exchanged for a number of shares of Company
 Common Stock be equal to 5% of the shares of Company Common Stock issued and outstanding
 following the Closing hereunder and the closing of the Offering (as defined below) (the "Note
 Exchange Transactions").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The
 Parties further acknowledge and agree that in connection with the Transactions and the Note
 Exchange Transactions, the Company expects to complete an offering of Company Common Stock
 to certain additional investors (the "Offering"). The number of shares of Common
 Stock to be issued and sold in the Offering, when added to the shares of Common Stock issued
 and outstanding prior to the closing of the Note Exchange Transactions and the Closing herein,
 will comprise no more than 20% of the issued and outstanding shares of Company Common Stock
 following the closing of the Offering, the closing of the Note Exchange Transactions and
 the Closing herein, such that the ending capitalization of the Company at such time shall
 be comprised of (i) the investors in the Offering and the other shareholders of the Company,
 holding 20% of the issued and outstanding shares of Common Stock, (ii) the DRT Members holding
 75% of the issued and outstanding shares of Common Stock; and (iii) the Noteholders, collectively,
 holding 5% of the issued and outstanding shares of Common Stock, and provided that such 5%
 number may be adjusted as set forth in the Note Exchange Agreement, in which event the proportion
 of the shares of Common Stock to be held by the investors in the Offering and the other shareholders
 of the Company other than the DRT Members and the Noteholders, shall be adjusted from such
 current 20% number.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) All
 of the Membership Interests shall be exchanged, collectively, for a number of shares of Company
 Common Stock which equals 75% of the issued and outstanding shares of Company Common Stock
 as of the Closing, and including for such purposes the shares of Company Common Stock as
 issued in the Note Exchange Transactions and the Offering, and otherwise outstanding prior
 to the Offering (the "Exchange Shares"), which Exchange Shares shall be apportioned
 between the DRT Members pro rata based on the percentage of the Membership Interests held
 by the DRT Member as set forth on the Capitalization Table (as defined below). The Exchange
 Shares shall be issued in book entry form and shall not be certificated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) By
 way of example, and not limitation, in the event that, assuming the consummation of the Offering,
 the investors in the Offering and the other shareholders of the Company held 2,000,000 shares
 and there are no adjustments to the number of shares of Company Common Stock to be issued
 to the Noteholders, then: (1) The DRT Members would be issued a total of 7,500,000 shares
 of Company Common Stock at the Closing; and (2) the Noteholders would be issued, collectively,
 500,000 shares of Common Stock at the closing of the Note Exchange Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;3. Other
 than as amended herein, the Original Agreement shall remain in full force and effect. Following
 the Amendment Date, any reference in the Original Agreement to the "Agreement"
 shall be deemed a reference to the Original Agreement as amended by this Amendment.

&nbsp;&nbsp;&nbsp;&nbsp;4. This
 Amendment shall be governed by, enforced, and construed under and in accordance with the
 Laws of the State of Delaware, without giving effect to the principles of conflicts of law
 thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;5. This
 Amendment may be executed in multiple counterparts, each of which shall be deemed an original
 and all of which taken together shall be but a single instrument. Counterparts may be delivered
 via facsimile, electronic mail (including pdf or any electronic signature complying with
 the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method
 and any counterpart so delivered shall be deemed to have been duly and validly delivered
 and be valid and effective for all purposes.

*[Signatures Appear on Following Pages]*

 

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the Amendment Date.

---

| | |
|:---|:---|
| Simplicity Esports and Gaming Company | Simplicity Esports and Gaming Company |
| By: | */s/ Roman Franklin* |
| Name: | Roman Franklin |
| Title: | Chief Executive Officer |
| Diverted River Technology, LLC | Diverted River Technology, LLC |
| By: | */s/ Zachary Johnson* |
| Name: | Zachary Johnson |
| Title: | Managing Member |
| Zachary Johnson | Zachary Johnson |
| By: | */s/ Zachary Johnson* |
| Name: | Zachary Johnson |

---

## Exhibit 10.4

**Simplicity Esports and Gaming Company**

**Exhibit 10.4**

March 21, 2023

Simplicity Esports And Gaming Company

7000 W. Palmetto Park Road – Suite 505

Boca Raton, FL 33433

Re: <u>Agreement to Convert Convertible Promissory Notes</u>

Reference is made to the convertible promissory notes issued by Simplicity Esports And Gaming Company ("WINR" or the "Company") and enumerated on **<u>Schedule A</u>** attached hereto (collectively, the "Notes"). Capitalized terms used but not defined herein shall have the same meanings set forth in the form of Transaction Documents (as defined below) enumerated on **<u>Exhibit A</u>**. In consideration of the promises and other good and valuable consideration specified herein, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the holders of such Notes and party hereto (each, a "Holder" and collectively, the "Holders") agree that:

&nbsp;&nbsp;&nbsp;&nbsp;1. As
 of the closing of the acquisition by the Company of 100% of the membership interests in Diverted
 River Technology, LLC, an Indiana limited liability company ("DRT"), pursuant
 to that certain exchange agreement, dated as of September 29, 2022 by and among the Company,
 DRT, Diamond Dogs Investments, LLC, Zachary Johnson and any other parties to such agreement
 as a result of becoming a member of DRT following the execution thereof (the "Transaction"),
 the Holders agree to convert their Notes into a number of shares of common stock, par value
 $0.0001 per share, of the Company (the "Common Stock") equal to 5% of the outstanding
 shares of Common Stock on the date hereof (the "Equity Percentage Shares"). Each
 Holder shall convert its respective Note(s) into the Equity Percentage based on the ratio
 which the principal amount of such Holder's Note [outstanding as of the date hereof]
 bears to the aggregate principal amount [outstanding as of the date hereof] of all Holders
 enumerated on  **<u>Schedule A</u>** attached hereto. For the avoidance of doubt, this
 Paragraph 1 shall not apply to certain convertible promissory bridge notes issued by WINR
 in favor of Ionic Ventures, LLC, FirstFire Global Opportunities Fund, and Jefferson Street
 Capital enumerated on  **<u>Schedule B</u>** attached hereto.

&nbsp;&nbsp;&nbsp;&nbsp;2. Notwithstanding
 the agreement of the Holders to convert their respective Notes in accordance with the terms
 set forth in Paragraph 1, the Holders will be entitled to continue conversions from the date
 hereof until the closing of the Transaction. Any conversions which occur in accordance with
 this letter agreement (the "Agreement") will reduce the number of shares of Common
 Stock that would be issued to each Holder upon conversion of each of its respective Notes
 equal to the Ratio multiplied by the Equity Percentage Shares.

&nbsp;&nbsp;&nbsp;&nbsp;3. Except
 as expressly modified as contemplated hereby, each of the Notes and each of the other applicable
 Transaction Documents (as such term is defined in the applicable Purchase Agreement enumerated
 on  **<u>Exhibit A</u>** attached hereto) entered into or provided in connection with
 the issuance of each of the Notes, as currently in effect, is hereby confirmed to be in full
 force and effect in accordance with its respective terms and is hereby reaffirmed, ratified
 and confirmed. In furtherance thereof, the Company hereby affirms the continued effectiveness
 of all provisions and terms in such Transaction Documents applicable to and provided by the
 Company, its subsidiaries and any other affiliates, as applicable, pursuant to the Transaction
 Documents, until the Notes have been repaid in full, converted pursuant to their original
 terms and provisions, or converted in accordance with the terms of this Agreement and the
 Company hereby acknowledges and agrees that the Company has no claim or offsets against,
 or defenses or counterclaims to, the Holders with respect to the Notes.

**Simplicity Esports and Gaming Company**

&nbsp;&nbsp;&nbsp;&nbsp;4. The
 execution, delivery and effectiveness of this Agreement shall not, except as expressly provided
 herein, (a) does not operate as a waiver or forbearance, either express or implied, of any
 right, power or remedy with respect to any terms contained in the applicable Transaction
 Documents, including, without limitation, the Notes or the right by any Holder to exercise
 all rights and remedies in the event of a default by the Company under the Notes or (b) commit
 or otherwise obligate the Holders to enter into or consider entering into any such waiver
 or forbearance, or any other modification of any Transaction Document.

&nbsp;&nbsp;&nbsp;&nbsp;5. This
 Agreement shall be deemed to be a Transaction Document, and for the avoidance of doubt, except
 as otherwise expressly provided herein, nothing contained in this Agreement shall constitute
 an amendment, modification or waiver of any of the provisions of the Transaction Documents
 or any other document issued contemporaneously with the Transaction Documents. In the event
 and to the extent that any provision of this Agreement shall be held invalid or unenforceable,
 such invalidity or unenforceability shall not affect the validity or enforceability of any
 other provisions of this Agreement, all of which shall remain fully enforceable as set forth
 herein. All requirements as to notice and all questions concerning the construction, validity,
 enforcement and interpretation of this Agreement shall be determined pursuant to the provisions
 contained in the applicable Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;6. In
 the event that the closing of the Transaction does not occur by July 14, 2023, this Agreement
 and all provisions and undertakings hereunder shall automatically terminate as of such date
 without any further action by any party hereto and shall be of no further force and effect.

Kindly confirm your agreement with the above by signing in the space indicated below and by PDFing a partially executed copy of this letter to the undersigned, and which may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement.

***[Signature page follows]***

 ****

**Simplicity Esports and Gaming Company**

---

| | |
|:---|:---|
| **Very truly yours,** | **Very truly yours,** |
| **SIMPLICITY ESPORTS AND GAMING COMPANY** | **SIMPLICITY ESPORTS AND GAMING COMPANY** |
| By: | */s/ Roman Franklin* |
| Name: | Roman Franklin |
| Title: | Chief Executive Officer |

---

---

| | | |
|:---|:---|:---|
| **Agreed and Accepted:** | **Agreed and Accepted:** |  |
| **Ionic Ventures, LLC** | **Ionic Ventures, LLC** |  |
| By: | */s/ Brendan O'Neil* | |
| Name: | Brendan O'Neil |  |
| Title: |  |  |
| **FirstFire Global Opportunities Fund** | **FirstFire Global Opportunities Fund** |  |
| By: | */s/ Eli Fireman* | |
| Name: | Eli Fireman |  |
| Title: |  |  |
| **Jefferson Street Capital** | **Jefferson Street Capital** |  |
| By: | */s/ Brian Goldberg* | |
| Name: | Brian Goldberg |  |
| Title: | Managing Member |  |
| **Labrys Fund** | **Labrys Fund** | **Labrys Fund** |
| By: | */s/ Thomas Silverman* | |
| Name: | Thomas Silverman |  |
| Title: | Managing Partner |  |

---

**Simplicity Esports and Gaming Company**

---

| | | |
|:---|:---|:---|
| **GS Capital Partners** | **GS Capital Partners** |  |
| By: | */s/ Gabe Sayegh* | |
| Name: | Gabe Sayegh |  |
| Title: |  |  |
| **Lucas Ventures & LGH Investments** | **Lucas Ventures & LGH Investments** |  |
| By: | */s/ Lucas Hoppel* | |
| Name: | Lucas Hoppel |  |
| Title: |  |  |

---

**Simplicity Esports and Gaming Company**

**Schedule A**

Notes

---

| | | |
|:---|:---|:---|
| **Noteholder** | **Origination** | **P&I Balance** |
| FirstFire | 3/21/22 | $120819 |
| FirstFire | 7/14/22 | $29196 |
| FirstFire | 6/10/21 | $1364167 |
| FirstFire | 3/10/21 | $528847 |
| GS Capital | 3/21/22 | $90614 |
| GS Capital | 7/14/22 | $29196 |
| GS Capital | 6/10/21 | $299678 |
| GS Capital | 9/13/22 | $11440 |
| Ionic | 3/21/22 | $120819 |
| Ionic | 7/14/22 | $29196 |
| Ionic | 9/29/21 | $1526014 |
| Jefferson | 4/1/22 | $90162 |
| Jefferson | 8/24/21 | $327529 |
| Jefferson | 7/14/22 | $29196 |
| Labrys | 2/19/21 | $1021697 |
| LGH | 9/2/21 | $248000 |
| Lucas | 9/2/21 | $248000 |

---

**Simplicity Esports and Gaming Company**

**Schedule B**

Excluded Notes

---

| | | |
|:---|:---|:---|
| **Noteholder** | **Origination** | **P&I Balance** |
| FirstFire | 9/8/22 | $68640 |
| FirstFire | 1/30/23 | $35200 |
| FirstFire | 3/8/23 | $16500 |
| Ionic | 9/8/22 | $68640 |
| Ionic | 1/30/23 | $35200 |
| Ionic | 3/8/23 | $16500 |
| Jefferson | 9/8/22 | $28600 |
| Jefferson | 1/30/23 | $35200 |

---

## Exhibit 99.1

**Exhibit 99.1**

![Logo.jpg](ex99-1_001.jpg)

**Simplicity Esports** **Signs Agreement to Convert Promissory Notes into 5% Common Stock Ownership and Extension to Exchange Agreement with Software Company Diverted River Technology, LLC** 

*The agreement converts over $6.1 million in debt into 5% common stock ownership in the combined companies at closing of the Diverted River Technology, LLC ("Diverted River") exchange agreement.*

**Boca Raton, Florida — March 31, 2023 (GLOBE NEWSWIRE)** — Simplicity Esports and Gaming Company (<u>OTCQB:WINR</u>) ("Simplicity Esports") entered into an exchange agreement with all of its convertible promissory note holders to convert certain of their notes into common stock that totals 5% of the issued and outstanding shares after the closing of the Diverted River exchange agreement.

Simplicity Esports also entered into an extension of the previously signed exchange agreement with Diverted River. Pursuant to the terms of the exchange agreement, as amended, Simplicity Esports agreed to acquire 100% of the membership interests of Diverted River in exchange for 75% of the issued and outstanding shares of Simplicity Esports' common stock. The parties agreed to close the transaction by July 14, 2023.

Roman Franklin, CEO of Simplicity Esports, stated, "I am delighted that we have secured an exchange agreement with our convertible noteholders to swap certain of their notes into 5% equity. I see tremendous potential with the Diverted River business and I think the 5% agreement with noteholders is a testament to their expectation of future value in the company. Diverted River's founders have laid a solid foundation upon which to grow Diverted River into a powerhouse public company servicing the technology needs of the broader $35 billion family entertainment center industry in the U.S. and abroad."

Following the closing, it is expected that Simplicity Esports' name will be changed to Diverted River Technology, Inc., and the business of Simplicity Esports will become that of Diverted River, an Entertainment Technology Organization (ETO) focused on a sustainable, high margin, recurring revenue business model that requires limited capital expenditures. It is also expected that Zack Johnson, Diverted River's CEO, will become CEO of the public company following the closing.

Mr. Johnson, CEO of Diverted River, added, "The noteholders agreeing to exchange over $6.1 million in debt into a 5% stake in our combined businesses is a major step toward closing our exchange agreement with Simplicity Esports. I look forward to working closely with Mr. Franklin and the Simplicity Esports Board of Directors to complete the remaining closing conditions and finalizing our transaction as quickly as possible."

The transaction is subject to standard closing conditions, including the repayment of certain debts and achieving a minimum amount of working capital.

**About Simplicity Esports and Gaming Company:**

Simplicity Esports and Gaming Company (WINR) is the franchisor for 12 esports gaming centers that give the public an opportunity to experience gaming and esports in competitive and casual social settings, regardless of skill or experience.

**About Diverted River Technology, LLC:**

Diverted River is an ETO for the location-based entertainment ("LBE") industry. Diverted River provides integration through their proprietary cloud-based user platform called Takoha into a multitude of entertainment, business, data and management systems to help managers and owners of LBEs provide a seamless experience for their customers while compiling all of their customers' data in one analytics system. Diverted River was started by the founders of ggCircuit. ggCircuit was sold to NASDAQ listed Esports Entertainment Group for $26,000,000 in 2021.

**Forward-Looking Statements:**

This press release contains statements that constitute "forward-looking statements." Forward-looking statements are subject to numerous conditions, many of which are beyond Simplicity Esports' control, including those set forth in the Risk Factors section of Simplicity Esports' Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on September 27, 2022 and our subsequent SEC filings, as amended or updated from time to time. Copies of Simplicity Esports' filings with the SEC are available on the SEC's website at <u>www.sec.gov</u>. Simplicity Esports undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Simplicity Esports Contact:

<br> Roman Franklin<br> Chief Executive Officer<br> <u>Roman@SimplicityEsports.com</u><br> 855-345-9467