Simplicity Esports enters exchange agreement with note holders

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