Current Report Filing (8-k)
April 30 2020 - 4:31PM
Edgar (US Regulatory)
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): April 24, 2020
ALLIED
ESPORTS ENTERTAINMENT, INC.
(Exact
Name of Registrant as Specified in Charter)
Delaware
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001-38226
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82-1659427
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
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17877
Von Karman Avenue, Suite 300
Irvine,
California, 92614
(Address
of Principal Executive Offices) (Zip Code)
(949)
225-2600
(Registrant’s
Telephone Number, Including Area Code)
Not
Applicable
(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 (see General Instruction A.2. below):
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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Common
Stock
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AESE
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The
NASDAQ Stock Market LLC
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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
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Entry
into a Material Definitive Agreement.
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Secured
Convertible Note Modification and Conversion Agreement between Knighted Pastures LLC (“Knighted”) and Allied Esports
Entertainment, Inc. (the “Company”)
On
April 29, 2020, the Company and Knighted, the holder of a $5,000,000 convertible promissory note issued by the Company (the “Note”),
entered into a Secured Convertible Note Modification and Conversion Agreement (the “Note Amendment”). Pursuant to
the Note Amendment, Knighted agreed to convert $2,000,000 of the principal amount of the Note (the “Conversion Amount”)
into shares of the Company’s common stock at a reduced conversion price of $1.60 per share, and the Company issued to Knighted
1,250,000 shares of common stock. The remaining principal amount of the Note ($3,000,000) remains convertible at a conversion
price of $8.50 per share, and the remaining provisions of the Note remain in effect. Interest on the Conversion Amount will continue
to accrue, and all accrued and unpaid interest under the Note (including interest accrued on the Conversion Amount) will be paid
on the maturity date of August 23, 2020.
The
Company previously registered for resale an aggregate of 588,236 shares of common stock upon conversion of the Note at $8.50 per
share and the Company is obligated to file a registration statement by May 5, 2020 to register for resale an additional 1,014,705
shares of common stock (the “Unregistered Shares”), so that all shares issuable to Knighted as a result of its conversion
of the Note, including the shares issued pursuant to the Note Amendment, are registered for resale.
The
foregoing description of the Note Amendment 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.
Item
3.02
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Unregistered
Sales of Equity Securities.
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The
disclosure in Item 1.01 is incorporated herein by reference. The shares issued 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 common stock did not involve a public offering.
Item
5.02
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
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Assignment
and Assumption Agreement among Ourgame International Holdings Limited (“Ourgame”), Trisara Ventures, LLC (“Trisara”),
Adam Pliska and the Company
On
April 24, 2020, the Company, Ourgame, Trisara, and Adam Pliska entered into an Assignment and Assumption Agreement (the “Pliska
Assignment”). Mr. Pliska is the Company’s President, and pursuant to the Pliska Assignment, the Company assumed Ourgame’s
obligations under that certain Engagement Agreement dated as of January 24, 2018, by and among Ourgame, Trisara and Mr. Pliska
(as amended by that certain Amendment 1 dated June 2018, the “Pliska Employment Agreement”). Among other things, the
Pliska Assignment provides that (i) the Company’s payment obligation to Mr. Pliska for up to $1,500,000 based upon the profitability
of the Company has been satisfied, and (ii) effective as of May 1, 2020, Mr. Pliska’s annual salary will be reduced by 10%
to approximately $377,000 for a six-month period.
The
foregoing description of the Pliska Assignment is qualified in its entirety by reference thereto, which is filed as Exhibit 10.2
to this Current Report, and is incorporated herein by reference.
Amendment
to Employment Agreement dated April 24, 2020 between Frank Ng and the Company
On
April 24, 2020, the Company and its Chief Executive Officer, Frank Ng, entered into an Amendment to Employment Agreement (the
“Ng Amendment”). Pursuant to the Ng Amendment, the parties agreed that effective May 1, 2020, Mr. Ng’s annual
salary will be reduced by 80% to $60,000 for a six-month period.
The
foregoing description of the Ng Amendment is qualified in its entirety by reference thereto, which is filed as Exhibit 10.3 to
this Current Report, and is incorporated herein by reference.
Compensation of Tony
Hung
Tony Hung, the Company’s
Chief Financial Officer, reduced his compensation by 10% for a six-month period starting May 1, 2020, to $256,500.
Item 9.01
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Financial
Statements and Exhibits.
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(d)
Exhibits.
SIGNATURE
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.
Dated:
April 30, 2020
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ALLIED
ESPORTS ENTERTAINMENT, INC.
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By:
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/s/
Anthony Hung
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Anthony
Hung
Chief Financial Officer
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3
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