Simplicity Esports Acquires the Assets of Its Franchisee Owned Gaming Center in Washington State and Agrees to a New Lease With Landlord

Rhea-AI Summary

Simplicity Esports and Gaming Company (OTCQB:WINR) announced the acquisition of all assets from a former franchisee's esports gaming center in Kennewick, WA. The agreement is valued at 23,915 shares of restricted stock. This move allows Simplicity to consolidate full revenues from the center, which previously only reported franchise royalty fees. The company aims to grow its customer base while retaining existing staff. The lease has been renegotiated to a percentage of gross sales, enhancing operational flexibility.

Positive

• Acquisition allows consolidation of full revenues from the gaming center, enhancing financial reporting.
• Retention of existing staff contributes to operational stability.
• Renegotiated lease terms provide financial flexibility with rent based on a percentage of gross sales.

Negative

• None.

Boca Raton, Florida, Sept. 30, 2020 (GLOBE NEWSWIRE) -- Simplicity Esports and Gaming Company (OTCQB:WINR) (“Simplicity Esports”) announced today it signed a definitive agreement with one of its former franchisees to acquire all of the assets of its esports gaming center including furniture, fixtures, equipment, inventory, and customer list. The franchisee owned gaming center in Kennewick, Washington was first opened under the PLAYlive Nation brand on November 1, 2015. The full consideration for the acquisition is 23,915 shares of restricted Simplicity Esports common stock.

Roman Franklin, President of Simplicity Esports, commented, “We previously announced the signing of four non-binding letters of intent to acquire franchisee owned locations, and expect to continue executing our strategy of acquiring franchisee owned locations while simultaneously signing leases with significantly improved terms. Our renegotiated lease agreement with this landlord requires us to pay rent as a percentage of gross, sales along with a small fixed payment for taxes and maintenance.”

“Our former franchisee at this location did a great job of engaging the Tri-Cities metro community of over 250,000 residence for nearly 5 years. The current staff will remain in their roles as we strive to grow Simplicity Esports’ customer base in the area.”

Simplicity Esports’ acquisition of franchisee owned esports gaming centers allows Simplicity Esports to report the full revenues generated by the gaming centers on a conslidated basis. Previously, Simplicity Esports only reported the franchise royalty fee, calculated as 6% of gross sales, paid by franchisees.

About Simplicity Esports and Gaming Company:

Simplicity Esports and Gaming Company (WINR) is an established brand within the esports industry, competing and streaming in popular games across different genres, including Apex Legends^®, PUBG Mobile^®, Overwatch^®, League of Legends^®, and various EA Sports^® titles. Simplicity Esports also organizes and hosts various online play from home tournaments in the U.S. and Brazil. Simplicity Esports also operates as a franchisor of Esports Gaming Centers that provide the public an opportunity to experience and enjoy gaming and esports in a social setting, regardless of skill or experience. Additionally, Simplicity Esports is an organizer and host of paid entry, online, play from home tournaments.

Apex Legends^®, PUBG Mobile^®, Overwatch^®, League of Legends^®, Fortnite^®, EA Sports^® and Free Fire^® are registered trademarks of their respective owners.

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 August 31, 2020 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 www.sec.gov. 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:

Roman Franklin
President
Roman@SimplicityEsports.com
561-819-8586

FAQ

What assets did Simplicity Esports acquire?

Simplicity Esports acquired furniture, fixtures, equipment, inventory, and customer lists from a former franchisee's gaming center.

How many shares did Simplicity Esports issue for the acquisition?

The acquisition was valued at 23,915 shares of restricted common stock.

What is the strategic importance of this acquisition?

The acquisition allows Simplicity Esports to report consolidated revenues instead of just franchise royalties.

What changes were made to the lease agreement?

The lease was renegotiated to require rent as a percentage of gross sales along with a small fixed payment for taxes and maintenance.