Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 23, 2022, Laila Cavalcanti Loss submitted her resignation as a member of
the Board of Directors (the "Board") of Simplicity Esports and Gaming Company
(the "Company"). On June 30, 2022, Frank Leavy submitted his resignation as a
member of the Board, and Beatrice Tarka submitted her resignation as Chairperson
of the Board and as a member of the Board. The resignations of Ms. Loss, Mr.
Leavy, and Ms. Tarka were not because of a disagreement with the Company on any
matter relating to the Company's operations, policies or practices.
On June 28, 2022, Nancy Hennessey submitted her resignation as the Company's
Chief Financial Officer, effective June 30, 2022. Ms. Hennessey's resignation is
not the result of any disagreement with the Company on any matter relating to
the Company's operations, policies or practices.
The Company has commenced a search for Ms. Hennessey's replacement. Until a
replacement Chief Financial Officer is appointed, Roman Franklin, the Company's
Chief Executive Officer, a member of the Board and a greater than 5% stockholder
of the Company, will act as the Company's principal financial officer and
principal accounting officer.
Mr. Franklin, age 38, has been a member of the Company's Board of Directors
since August 16, 2017 and the Company's Chief Executive Officer since March 29,
2021. From December 31, 2018 until March 31, 2021, Mr. Franklin served as the
Company's President. Mr. Franklin was Chief Investment Officer of SMC Global USA
from March 2016 until December 31, 2016, and prior, President of Franklin
Financial Planning from 2005 to 2016. Mr. Franklin is a 16-year veteran of the
financial services industry. By the age of 22, he held FINRA Series 7, Series
66, and Life, Health, and Variable Insurance Licenses. In 2005, he founded a
fee-only registered investment advisory firm. In 2008, he was one of the
youngest recipients to ever receive the National Association of Financial
Advisors ("NAPFA") Registered Financial Advisor (RFA) designation. In 2015, he
was elected as a Board Member of the NAPFA, South Region Board of Directors,
overseeing more than a dozen states from Texas, to Florida, to North Carolina.
Mr. Franklin has experience in domestic and international investment, and has
been involved in multiple business transactions tied to India. Mr. Franklin
holds a Bachelor of Science degree in Management from Barry University and an
M.B.A. in Finance from the Graduate School of Business at Stetson University.
His civic organization roles include School Advisory Council for Volusia County
Schools, City of DeLand Economic Development Committee, and the Boys' and Girls'
Clubs of Central Florida.
The Company believes Mr. Franklin's strong expertise in finance and business
transactions qualifies him to serve on the Company's Board of Directors.
Item 8.01. Other Events.
In an effort to focus on business operations that are currently profitable, the
Company sold its League of Legends franchise asset, and exited business
operations in Brazil. Funding the Brazilian business operations created a
monthly cash burn of approximately $45,000. The Company has sold the franchise
asset to Brazilian esports organization Los Grandes for total consideration of
1,920,000 Brazilian Reais (approximately $362,000) to be paid in five equal
quarterly installments.
The Company also closed 10 of its 17 corporate owned esports gaming center
locations. The Company continues to operate seven corporate owned locations and
12 franchisee owned locations. Management is exploring strategic alternatives,
including merger and acquisition opportunities, and is focused on high margin,
lower capital expenditure business strategies in the esports gaming industry,
with a goal of being cash flow positive in the next 12 to 24 months.
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