Item 1.01 Entry into a Material Definitive Agreement
As previously reported, Gaming Technologies, Inc. (the "Company") entered into a
securities purchase agreement dated December 1, 2020 (the "2020 Purchase
Agreement") and a securities purchase agreement dated as of February 3, 3021
(the "2021 Purchase Agreement" and together with the 2020 Purchase Agreement,
the "Purchase Agreements") with an accredited investor for the sale of the
Company's common stock at a price of $2.50 per share. On April 7, 2022, the
Company and the investor entered into an amendment to the Purchase Agreements
(the "Amendment"), and the Company issued to the investor a subordinated 10%
Original Issue Discount Promissory Note in the principal amount of $277,777.78
(the "Subordinated Note") and received gross proceeds of $250,000.
Pursuant to the Amendment, the provisions in the Purchase Agreements for an
adjustment due to price based dilution, which had expired by their terms, were
extended, such that if, at any time until the earlier of (a) October 6, 2022, or
(b) the day after the date on which the Company issues or sells shares of common
stock or common stock equivalents, except for certain exempt issuances as
described in the Purchase Agreements, at a price below $2.50 per share (as
adjusted for stock splits), then the Company will deliver to the investor that
number of restricted shares of common stock equal to the difference between the
number of shares purchased by the investor pursuant to such Purchase Agreement
and the number of shares of common stock the investor would have received for
the investor's original subscription amount (an aggregate of $2,000,000) at the
dilutive issuance price.
The Subordinated Note. The principal amount of the Subordinated Note is
$277,777.78, and the Company received gross proceeds of $250,000 after giving
effect to the original issue discount of 10%. The Subordinated Note is
unsecured, bears interest at a rate of 10% per year (the "Interest Rate"), and
matures on the earlier of (i) 12 months from issuance or (ii) the closing of a
Qualified Offering, subject to earlier pre-payment as provided in the
Subordinated Note. "Qualified Offering" is an equity or equity-linked financing
for the account of the Company or any of its subsidiaries or debt financing that
results in cumulative aggregate proceeds to the Company of at least $8,000,000.
Subject to the Intercreditor Agreement described below, the Company will have
the right at any time to prepay in cash all or a portion of the Subordinated
Note of the principal amount thereof plus any unpaid accrued interest to the
date of repayment. Upon an Event of Default (as defined therein) interest shall
accrue at the Interest Rate plus 2% and the principal and interest through
maturity shall be due and payable.
Intercreditor Agreement. In connection with issuing the Subordinated Note, the
Company, the Subordinated Note holder and the holder of the Company's
$1,666,666.67 10% Original Discount Senior Secured Convertible Note issued in
November 2021 (the "Senior Note") entered into a Intercreditor Agreement (the
"Intercreditor Agreement"), pursuant to which the Subordinated Note holder
agreed to fully subordinate its rights under the Subordinated Note to the Senior
Note and related agreements, as described more fully in the Intercreditor
Agreement.
The descriptions above of the Amendment, the Subordinated Note and Intercreditor
Agreement do not purport to be complete and are qualified in their entirety by
reference to the complete texts of the Amendment, the Junior Note and the
Intercreditor Agreement, each of which is filed as Exhibit 10.1, Exhibit 10.2
and Exhibit 10.3, respectively, to this current report on Form 8-K.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
Information concerning the Company's issuance of the Subordinated Note as set
forth in Item 1.01 above is incorporated herein to this Item 2.03 by this
reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Form of Amendment to Securities Purchase Agreements
10.2 Form of Subordinated Note
10.3 Form of Intercreditor Agreement
104 Cover Page Interactive Data File (formatted in iXBRL)
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