Filed Pursuant to Rule 424(b)(5)
Registration No. 333-237626
PROSPECTUS SUPPLEMENT
(To Prospectus dated April 20,
2020)
SUPER LEAGUE GAMING, INC.
1,512,499 Shares of Common
Stock
We are
offering 1,512,499 shares of
our common stock, par value $0.001 per share, to certain institutional and accredited
investors pursuant to this prospectus supplement and the
accompanying prospectus and a securities purchase agreement
with such investors at a price
of $9.00 per
share.
Our
common stock is listed on The Nasdaq Capital Market under the
symbol “SLGG”. On March 19, 2021, the last reported
sale price of our common stock on The Nasdaq Capital Market was
$10.14 per share.
Investing in our securities involves a high degree of risk. See
“Risk Factors”
beginning on page S-8 of this
prospectus supplement for a discussion of information that should
be considered in connection with an investment in our
securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
Delivery
of the shares of common stock will be made on or about March 23, 2021, subject to the satisfaction
of certain closing conditions.
The date of this prospectus supplement is March 19,
2021.
SUPER LEAGUE GAMING, INC.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
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PAGE
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About
This Prospectus Supplement
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S-1
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Prospectus
Supplement Summary
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S-2
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The
Offering
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S-7
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Risk
Factors
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S-8
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Cautionary
Notes Regarding Forward-Looking Statements
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S-12
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Use of
Proceeds
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S-14
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Dividend
Policy
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S-15
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Capitalization
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S-16
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Dilution
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S-17
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Description
of Securities We Are Offering
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S-18
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Plan of
Distribution
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S-19
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Legal
Matters
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S-19
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Experts
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S-19
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Where
You Can Find More Information
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S-19
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Incorporation
of Certain Information by Reference
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S-20
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PROSPECTUS
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About
This Prospectus
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1
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Company
Overview
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2
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Risk
Factors
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6
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Cautionary
Notes Regarding Forward-Looking Statements
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7
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Use of
Proceeds
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9
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Description
of our Capital Stock
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10
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Description
of our Warrants
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12
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Description
of our Units
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15
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Description
of Certain Provisions of Delaware Law and Our Certificate of
Incorporation and Bylaws
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16
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Plan
of Distribution
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17
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Management
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19
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Executive
Compensation
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28
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Certain
Relationships and Related Party Transactions
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36
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Security
Ownership of Management and Certain
Securityholders
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37
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Legal
Matters
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38
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Experts
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38
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Where
You Can Find More Information
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38
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Incorporation
of Certain Information by Reference
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39
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ABOUT THIS PROSPECTUS
SUPPLEMENT
This
document is in two parts. The first part is this prospectus
supplement, which describes the specific terms of this offering and
also adds to and updates information contained in the accompanying
prospectus and the documents incorporated by reference herein. The
second part, the accompanying prospectus, provides more general
information. Generally, when we refer to this prospectus, we are
referring to both parts of this document combined. To the extent
there is a conflict between the information contained in this
prospectus supplement and the information contained in the
accompanying prospectus or any document incorporated by reference
therein filed prior to the date of this prospectus supplement, you
should rely on the information in this prospectus supplement;
provided that if any statement in one of these documents is
inconsistent with a statement in another document having a later
date—for example, a document incorporated by reference in the
accompanying prospectus—the statement in the document having
the later date modifies or supersedes the earlier
statement.
We
further note that the representations, warranties and covenants
made by us in any agreement that is filed as an exhibit to any
document that is incorporated by reference herein were made solely
for the benefit of the parties to such agreement, including, in
some cases, for the purpose of allocating risk among the parties to
such agreements, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations,
warranties or covenants were accurate only as of the date when
made. Accordingly, such representations, warranties and covenants
should not be relied on as accurately representing the current
state of our affairs.
You should rely only on the information contained in this
prospectus supplement or the accompanying prospectus, or
incorporated by reference herein. We have not authorized anyone to
provide you with information that is different. The information
contained in this prospectus supplement or the accompanying
prospectus, or incorporated by reference herein, is accurate only
as of the respective dates thereof, regardless of the time of
delivery of this prospectus supplement and the accompanying
prospectus or of any sale of our securities. It is important for
you to read and consider all information contained in this
prospectus supplement and the accompanying prospectus, including
the documents incorporated by reference herein, in making your
investment decision. You should also read and consider the
information in the documents to which we have referred you in the
sections entitled “Where You
Can Find More Information” and “Incorporation of Certain Information by
Reference” in this prospectus supplement and in the
accompanying prospectus.
We are offering to sell, and seeking offers to buy, our securities
only in jurisdictions where offers and sales are permitted. The
distribution of this prospectus supplement and the accompanying
prospectus and the offering of our securities in certain
jurisdictions may be restricted by law. Persons outside the United
States who come into possession of this prospectus supplement and
the accompanying prospectus must inform themselves about, and
observe any restrictions relating to, the offering of our
securities and the distribution of this prospectus supplement and
the accompanying prospectus outside the United States. This
prospectus supplement and the accompanying prospectus do not
constitute, and may not be used in connection with, an offer to
sell, or a solicitation of an offer to buy, any securities offered
by this prospectus supplement and the accompanying prospectus by
any person in any jurisdiction in which it is unlawful for such
person to make such an offer or solicitation.
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PROSPECTUS SUPPLEMENT SUMMARY
This summary does not contain all of the information that you
should consider before investing in our securities. You should read
this entire prospectus supplement and the accompanying prospectus
carefully, including the financial statements and other information
incorporated by reference in this prospectus supplement and the
accompanying prospectus, before making an investment decision. In
addition, please read the “Risk Factors” section of
this prospectus supplement beginning on page S-8 and the risk
factors contained in our Annual Report.
Unless the context requires otherwise, the words "we," "us," "our,"
the "Company," and "Super League" refer collectively to Super
League Gaming, Inc., a Delaware corporation, and its
subsidiaries.
Company Overview
Super League
Gaming is a leading gaming community and content platform that
gives everyday gamers and creators multiple ways to connect and
engage with others while enjoying the video games they love.
Powered by patented, proprietary technology systems, Super League
offers players the ability to create gameplay-driven experiences
they can share with friends, the opportunity to watch live
streaming broadcasts and gameplay highlights across digital and
social channels, and the chance to compete in events and challenges
designed to celebrate victories and achievements across multiple
skill levels. With gameplay and content offerings featuring more
than a dozen of the top video game titles in the world, Super
League is building a broadly inclusive, global brand at the
intersection of gaming, experiences and entertainment. Whether to
access its expanding direct audience of young gamers, creators and
esports players, or to leverage the company’s remote video
production division, Virtualis Studios, third parties ranging from
consumer brands, video game publishers, professional esports teams,
traditional sports organizations, video content producers, and
more, are turning to Super League to provide integrated solutions
that drive business growth.
We believe Super
League is on the leading edge of the rapidly growing competitive
video gaming industry, which has become an established and vital
part of the entertainment landscape. We believe there is a
significant opportunity for the world of mainstream competitive
players and creators who want their own esports and entertainment
experience. These players and creators enjoy the competition, the
social interaction and community, and the entertainment value
associated with playing, creating and watching others
play.
Super
League is a critically important component in providing the
infrastructure for mainstream competitive video gaming content and
gameplay, that is synergistic and accretive to the greater esports
ecosystem. Over the past five years, we believe we have become the
preeminent brand for gamers by providing a proprietary software
platform that allows them to create, compete, socialize and
spectate gameplay and entertainment, both physically and digitally
online. Our creator and player platform generates a significant
amount of derivative gameplay content for further syndication
beyond our own digital channels.
The
fundamental driver of our business model and monetization strategy
is creating deep community engagement through our highly
personalized experiences that, when coupled with the critical mass
of our large digital audiences, provides the depth and volume for
premium content and offer monetization differentiated from a more
traditional, commoditized advertising model. The combination of our
physical venue network and digital programming channels, with Super
League’s cloud-based, digital products platform technology at
the hub, creates the opportunity for not just a share of the
player’s wallet, but also the advertiser’s wallet. We
do this by offering brand sponsors and advertisers a premium
marketing channel to reach elusive Generation Z and Millennial
gamers and creators and offering players ways to access exclusive
tournaments and programming.
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During fiscal year
2020, management continued to focus on monetization with respect to
our three primary revenue streams: (1) advertising revenues, (2)
content revenues, and (3) direct to consumer revenues. In addition
to the significant strong KPI performance described below, we: (i)
continued our focus on our premium advertising model for future
monetization of our rapidly growing premium advertising inventory,
invested in the expansion of our in-house direct sales team to
facilitate delivery, and increased revenues generated from
programmatic display and video advertising units; (ii) focused on
our swift pivot to accelerate the monetization of our original and
user generated content library and remote production and broadcast
capabilities, which emerged as a significant component of revenue
in 2020; (iii) continued to focus on monetization of the gamer and
creator through direct-to-consumer offers, including increases in
sales of digital goods, primarily with our Minehut digital
property, and the launch of the early stages of a micro-transaction
marketplace; and, (iv) began to unlock new ways that our content
production technology can extend beyond esports into traditional
sports and other entertainment formats representing revenue growth
opportunities in future periods. We expect to continue to grow our
adverting pipeline across various verticals with the capability to
provide brands and advertisers with targeted, high quality
integrations that warrant premium costs per impressions
(“CPM”)
advertising rates.
Super League Gaming
experienced its strongest period of audience growth during the
challenging time of the COVID-19 pandemic, marked by the reaching
of a key 2020 milestone in July 2020; reaching one billion
video views and impressions. This key milestone at the time,
represented more than a 700% increase over the full
fiscal year of 2019, during which we achieved a total of 120
million views. More importantly, as of the end of 2020 we generated
a total of 2.0 billion views and impressions.
The ability to
generate over one billion views year to date in July 2020, on our
way to over two billion views for fiscal 2020, was a key proof
point of not only the compelling attractiveness of our content, but
also to the variety we are able to offer. We have established
ourselves as a leading publisher of user generated gaming
highlights on Snapchat and within our Framerate social video
network. During 2020, we expanded to
nine gameplay highlights channels across Instagram and Tik Tok,
produced three original series on InstagramTV, and produced seven
original shows on Snapchat that, all together, delivered on average
more than 169.0 million video views per month.
During the fiscal
year 2020, we experienced a significant increase in registered
users, gamer and creator engagement, and gameplay hours across all
of our platforms. We believe a driver of the increase was, to a
certain extent, the general period of social distancing and
mandatory shelter in place orders stemming from the COVID-19
pandemic, during which passionate video gamers and creators around
the world sought a competitive outlet, seeking to connect with
others around the games they love and turned to esports and
entertainment and other online gaming communities to fill the void.
We also believe that a driver of the increase is the fact that
esports and entertainment is mainstream, which was the case prior
to COVID-19, and we expect this trend to continue subsequent to the
COVID-19 pandemic. These increases are accelerating our growth
plans, and are increasing our opportunities for
monetization.
Our video content
business is also accelerating on an additional path through the
advancement of our proprietary, cloud-based, live content capture
and broadcast system, which includes patented technology and fully
remote, innovative workflows operated by SuperLeagueTV, our
completely virtual studio. Endemic and non-endemic brands and
partners have sought out Super League to provide premium,
TV-quality production services across a multitude of live streamed
events. During 2020, within gaming alone, broadcasts have spanned
an impressive mix of game titles including Minecraft, APEX Legends,
NBA2K, PUBG Mobile, the World Golf Tour and more.
In connection with
the advancement of our content capture and broadcast system, in
December 2020 we announced the launch of Virtualis Studios,
our fully virtual production studio providing proprietary,
state-of-the-art, scalable solutions for video, television, and
branded content. We believe that production companies in need of
experienced teams with a deep understanding of remote production
technologies and systems can rely on Virtualis Studios’
expertise, developed through years of broadcasting multi-location
esports events. Whether for the creation and broadcast of premium
content, or for monitoring productions from remote locations,
Virtualis Studios supports a broad spectrum of critical needs in
today’s production environment. Born from cloud-based esports
broadcast solutions designed to enable thousands of simultaneous
gameplay and player cam feeds to be live streamed across dozens of
endpoints, Virtualis Studios specializes in integrating multiple
technology solutions to ensure any given project can be produced
and monitored successfully on a partially or fully-remote basis.
The proprietary infrastructure already supports multiple,
concurrent virtual control rooms that are fully operational at any
given time, with limitless scalability compared to what is possible
within a physical studio and on-site control room.
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In response to the
COVID-19 pandemic and the related uncertainty, advertisers and
sponsors across the board inevitably paused to reset their
marketing strategies, and as a result, all companies with business
models that include sponsorship and advertising revenues felt the
impact of the pause in advertising spend industry-wide. In
addition, as a result of COVID-19, we also felt the impact of the
deferral of some of the programs in our pipeline and related
revenues to future periods. We did not experience any cancellations
of existing programs. The majority of our gameplay hours and other
engagement occurs digitally, online, so while our “in real
life” gaming is a premium and important aspect of our brand,
the shift away from retail locations is not expected to have a
significant impact on our overall business model over time, which
is largely digitally focused.
Although
we were impacted by the general deferral in advertising spending by
brands and sponsors resulting from the COVID-19 pandemic for a
significant portion of fiscal year 2020, we reported significant
quarter over quarter growth in revenues in the second half of
fiscal 2020 and we expect to continue to expand our advertising
revenue and revenue from the sale of our proprietary and
third-party user generated content in future periods, as we
continue to expand our advertising inventory, viewership and
related sales activities.
Key Performance
Indicators.
The KPIs driving
our business model are related to scalable offers across our
digital and physical footprint of gaming-centric offers and
entertainment. We focus and report on three key performance
indicators (“KPIs”), as outlined below, to
assess our progress and drive revenue growth, which is also a key
performance indicator. As December 31,
2020, we continued to see strong growth in our leading key
performance indicators, as follows:
●
Views and Impressions: We generated 2.0
billion views and impressions during fiscal year 2020, compared to
our full-year 2019 views of 120.0 million, representing an
approximately 17 times, or approximately 1600% increase over full
year 2019 views. This continued growth in views results in the
exponential growth of our total and monetizable advertising
inventory, which can increase the number of brands and advertisers
attracted to our audience and platform.
●
Registered Users: During fiscal year
2020, we increased our registered users by approximately three
times, or 200%, to 2.9 million registered users. We ended fiscal
2019 with approximately 980,000 registered users. We believe that
continuing our trend of significant year over year increases in
registered users introduces more gamers and creators into our
customer funnel, from whom we can gather higher volumes of quality
user generated content and convert into subscribers and/or upsell
into other paid offers.
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Engagement Hours: During fiscal year
2020, including our live gaming experiences and our expanding
digital gameplay channels, we generated approximately 72.2 million
hours of gameplay and other engagement, as compared to
approximately 15.0 million full year 2019 gameplay and other
engagement hours, an increase of approximately 5 times, or 381%. We
continue to focus on ways we can repackage and distribute this
significant derivative content library for further
monetization.
Impact of COVID-19 Pandemic
Actions taken
around the world to help mitigate the spread of the coronavirus
include restrictions on travel, and quarantines in certain areas,
and forced closures for certain types of public places and
businesses. The novel coronavirus and actions taken to mitigate the
spread of it have had and are expected to continue to have an
adverse impact on the economies and financial markets of many
countries, including the geographical areas in which the Company
operates. On March 27, 2020, the Coronavirus Aid, Relief, and
Economic Security Act (“CARES Act”) was enacted to
amongst other provisions, provide emergency assistance for
individuals, families and businesses affected by the coronavirus
pandemic. It is unknown how long the adverse conditions
associated with the coronavirus will last and what the complete
financial effect will be to the Company.
Notwithstanding the
growth in revenues and in user engagement metrics discussed herein,
the broader impact of the ongoing
COVID-19 pandemic on our results of operations and
overall financial performance remains
uncertain. The COVID-19 pandemic may continue
to impact our revenue and revenue growth in future periods, and is
likely to continue to adversely impact certain aspects of our
business and our partners, including advertising demand,
retail expansion plans and our in-person esports
experiences. See “Risk
Factors” for further discussion of
the adverse impacts of the COVID-19 pandemic on our
business.
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Selected Risks
Related to our Business
Our business is subject to numerous risks,
including risks that may prevent us from achieving our business
objectives or may adversely affect our business, financial
condition, results of operations, cash flows and prospects that you
should consider before making an investment decision. Some of the
more significant risks and uncertainties relating to an investment
in our company are listed below. These
risks are more fully described in the section titled
"Risk
Factors" in this prospectus and
in Item 1A of our Annual Report on Form 10-K for the year
ended December 31, 2020, which is incorporated by reference into
this prospectus.
Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also impair our business
operations. You should be able to bear a complete loss of your
investment.
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overall strength and stability of general economic conditions and
of the electronic video game sports (“esports”) industry in the United
States and globally;
●
changes in consumer demand for, and acceptance of, our services and
the games that we license for our tournaments and other
experiences, as well as online gaming in general;
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changes in the competitive environment, including adoption of
technologies, services and products that compete with our
own;
●
our
ability to generate consistent revenue;
●
our
ability to effectively execute our business plan;
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changes in the price of streaming services, licensing fees, and
network infrastructure, hosting and maintenance;
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changes
in laws or regulations governing our business and
operations;
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our ability to maintain adequate liquidity and financing sources
and an appropriate level of debt on terms favorable to
us;
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our
ability to effectively market our services;
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costs
and risks associated with litigation;
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our ability to obtain and protect our existing intellectual
property protections, including patents, trademarks and
copyrights;
●
our
ability to obtain and enter into new licensing agreements with game
publishers and owners;
●
changes in accounting principles, or their application or
interpretation, and our ability to make estimates and the
assumptions underlying the estimates, which could have an effect on
earnings;
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interest
rates and the credit markets; and
●
other
risks described from time to time in periodic and current reports
that we file with the SEC.
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Implications of Being an Emerging Growth Company
As a
company with less than $1.07 billion in revenue during our most
recently completed fiscal year, we qualify as an “emerging
growth company” as defined in the Jumpstart Our Business
Startups Act of 2012 (the “JOBS Act”). An emerging growth
company may take advantage of specified reduced reporting and other
burdens that are otherwise applicable generally to public
companies. These provisions include:
●
A requirement to
have only two years of audited financial statements and only two
years of related Management’s Discussion and Analysis of
Financial Condition and Results of Operations;
●
An exemption from
the auditor attestation requirement on the effectiveness of our
internal control over financial reporting under Section 404(b) of
the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley
Act”);
●
An extended
transition period for complying with new or revised accounting
standards;
●
Reduced disclosure
about our executive compensation arrangements; and
●
No non-binding
advisory votes on executive compensation or golden parachute
arrangements.
Certain of these reduced reporting requirements and exemptions are
also available to us due to the fact that we also qualify as a
“smaller reporting company” under the SEC’s
rules. For instance, smaller reporting companies are not required
to obtain an auditor attestation and report regarding
management’s assessment of internal control over financial
reporting; are not required to provide a compensation discussion
and analysis; are not required to provide a pay-for-performance
graph or CEO pay ratio disclosure; and may present only two years
of audited financial statements and related MD&A
disclosure.
We may take advantage of these provisions from the JOBS Act until
the end of the fiscal year in which the fifth anniversary of our
initial public offering, or such earlier time when we no longer
qualify as an emerging growth company. We would cease to be an
emerging growth company on the earlier of (i) the last day of the
fiscal year (a) in which we have more than $1.07 billion in annual
revenue or (b) in which we have more than $700 million in market
value of our capital stock held by non-affiliates, or (ii) the date
on which we issue more than $1.0 billion of non-convertible debt
over a three-year period. We may choose to take advantage of some
but not all of these reduced burdens under the JOBS Act. We have
taken advantage of other reduced reporting requirements in this
prospectus, and we may choose to do so in future filings. To the
extent we do, the information that we provide stockholders may be
different than you might get from other public companies in which
you hold equity interests.
Reverse Stock Split
On
February 8, 2019, prior to the completion of the Company’s
initial public offering, the Company filed an amendment to the
Company’s amended and restated certificate of incorporation
to effect a reverse split of shares of the Company’s common
stock on a one-for-three basis (the “Reverse Stock Split”). All
references to common stock, warrants to purchase common stock,
options to purchase common stock, early exercised options,
restricted stock, share data, per share data and related
information contained in the financial statements incorporated by
reference herein have been retrospectively adjusted to reflect the
effect of the Reverse Stock Split for all periods
presented.
Recent Developments
On January 11, 2021, we entered into securities
purchase agreements with a limited number of institutional
investors for the registered direct offering of an
aggregate of 3,076,924 shares of our common stock, at a purchase
price of $2.60 per share (the “January Registered
Direct Offering”). The January Registered Direct
Offering closed on January 13, 2021, and resulted in gross proceeds
to us of $8.0 million.
On
February 8, 2021, we entered into securities purchase agreements with a limited
number of institutional investors for the registered
direct offering of an aggregate of 2,926,830 shares of our
common stock, at a purchase
price of $4.10 per Share (the “February Registered
Direct Offering”). The February Registered Direct
Offering closed on February 11, 2021, and resulted in gross
proceeds to the Company of $12.0
million.
On March 9, 2021,we entered into an Agreement and Plan of Merger (the
“Merger
Agreement”) by and among
Mobcrush Streaming, Inc. (“Mobcrush”), the Company, and SLG Merger Sub II,
Inc., a wholly-owned subsidiary of the Company
(“Merger Co”). The Merger Agreement provides for the
acquisition of Mobcrush by Super League pursuant to the merger of
Merger Co with and into Mobcrush, with Mobcrush as the surviving
corporation (the “Merger”). Upon completion of the Merger, Mobcrush
will be a wholly-owned subsidiary of the
Company. The
proposed merger is subject to certain customary closing conditions,
including obtaining approval from a majority of the Company’s
shareholders at a special meeting that the Company expects to be
hold before the end of April 2021.
In accordance with the terms and subject to the
conditions of the Merger Agreement, each outstanding share of
Mobcrush common stock, par value $0.001 per share
("Mobcrush
Common Stock"), and Mobcrush
preferred stock, par value $0.001 ("Mobcrush Preferred
Stock", and with the Mobcrush
Common Stock, the "Mobcrush
Stock") (other than dissenting
shares) will be canceled and converted into the right to receive
0.528 shares of the Super League’s common stock (the
“Merger
Consideration”). Subject
to certain adjustments and other terms and conditions more
specifically set forth in the Merger Agreement, we expect to issue
approximately 12,582,204 shares of our common stock as the Merger
Consideration.
Corporate Information
Super
League Gaming, Inc. was incorporated under the laws of the State of
Delaware on October 1, 2014 as Nth Games, Inc. On June 15, 2015, we
changed our corporate name from Nth Games, Inc. to Super League
Gaming, Inc. Our principal executive offices are located at 2912
Colorado Avenue, Suite #203, Santa Monica, California 90404, and
our Company telephone number is (802)
294-2754, and our investor relations contact number is (949)
574-3860.
Our
corporate website address is www.superleague.com. Information contained in, or
accessible through, our website is not a part of this prospectus,
and the inclusion of our website address in this prospectus is an
inactive textual reference only.
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THE
OFFERING
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Common stock offered by us
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1,512,499 shares.
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Common stock to be outstanding immediately after this
offering
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23,120,643 shares.
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Offering price per share
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$9.00 per share of
common stock.
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Use of proceeds
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We
intend to use the net proceeds of this offering for working capital
and general corporate purposes, including sales and marketing
activities, product development and capital expenditures. See
"Use of Proceeds" beginning
on page S-14 of this prospectus supplement for additional
detail.
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Risk factors
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Investing
in our securities is highly speculative and involves a high degree
of risk. You should carefully consider the information set forth in
the “Risk
Factors” section beginning on page S-8 this prospectus supplement, beginning on
page 6 of the accompanying
prospectus and in the documents incorporated herein and therein by
reference.
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Trading symbol
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Our
common stock is listed on The Nasdaq Capital Market under the
symbol "SLGG.”
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The number of shares
of common stock to be outstanding immediately after this offering
is based on 21,608,144 shares
of common stock outstanding as of March 19, 2021, and excludes as of that
date:
●
2,449,485 shares of
common stock issuable upon exercise of common stock purchase
warrants, with a weighted average exercise price of $9.64 per
share;
●
1,675,019 shares of
common stock issuable upon exercise of options outstanding, with a
weighted average exercise price of $5.32 per share; and 600,208
shares of common stock reserved for issuance pursuant to our
Amended and Restated 2014 Stock Option and Incentive Plan (the
“2014 Plan”);
and
●
249,394 shares of
common stock issuable upon vesting of non-vested restricted stock
units outstanding.
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Investing in our securities involves a
high degree of risk. Before deciding whether to purchase any of our
securities, you should carefully consider the risks and
uncertainties described under “Risk Factors” in our
Annual Report on Form 10-K for the fiscal year ended
December 31, 2020, and in other documents that we subsequently
file with the SEC that update, supersede or supplement such
information, which are incorporated by reference into this
prospectus supplement and the accompanying prospectus, and in any
free writing prospectus that we have authorized for use in
connection with this offering. If any
of these risks actually occur, our business, financial condition
and results of operations could be materially and adversely
affected and we may not be able to achieve our goals, the value of
our securities could decline and you could lose some or all of your
investment. Additional risks not presently known to us or that we
currently deem immaterial may also impair our business operations.
If any of these risks occur, the trading price of our common stock
could decline materially and you could lose all or part of your
investment.
Risks Related to the Ongoing COVID-19 Pandemic
Actual or threatened epidemics, pandemics, outbreaks, or other
public health crises may adversely affect certain aspects of our
business.
Our business could be materially and adversely affected by the
risks, or the public perception of the risks, related to an
epidemic, pandemic, outbreak, or other public health crisis, such
as the recent outbreak of novel coronavirus (COVID-19). The risk,
or public perception of the risk, of a pandemic or media coverage
of infectious diseases could cause a decrease to the attendance of
our in person gaming experiences, or cause certain of our partners,
such as Wanda Theaters in China, to avoid holding in person events.
Moreover, an epidemic, pandemic, outbreak or other public health
crisis, such as COVID-19, could cause members of our Action Squad,
in whom we rely to manage the logistics of our in person
experiences, or on-site employees of partners to avoid any
involvement with our in person experiences or other events, which
would adversely affect our ability to hold such events. The
ultimate extent of the impact of any epidemic, pandemic or other
health crisis on our business, financial condition and results of
operations will depend on future developments, which are highly
uncertain and cannot be predicted, including new information that
may emerge concerning the severity of such epidemic, pandemic or
other health crisis and actions taken to contain or prevent their
further spread, among others. These and other potential impacts of
an epidemic, pandemic or other health crisis, such as COVID-19,
could therefore adversely affect our business, financial condition
and results of operations.
The increase in our direct-to-consumer offerings resulting from
social distancing measures and shelter-in-place orders implemented
as a result of the ongoing COVID-19 pandemic may not be sustainable
and, ultimately, prove unsuccessful.
During
the fiscal year 2020, we experienced a significant increase in
registered users, gamer and creator engagement, and gameplay hours
across all of our platforms. We believe a driver of the increase
was, to a certain extent, the general period of social distancing
and mandatory shelter in place orders stemming from the COVID-19
pandemic, during which passionate video gamers and creators around
the world sought a competitive outlet, seeking to connect with
others around the games they love and turned to esports and
entertainment and other online gaming communities to fill the void.
We also believe that a driver of the increase is the fact that
esports and entertainment is mainstream, which was the case prior
to COVID-19, and we expect this trend to continue subsequent to the
COVID-19 pandemic. These increases are accelerating our growth
plans, and are increasing our opportunities for
monetization.
Risks Related to our Common Stock and this Offering
If you purchase securities in this offering, you will suffer
immediate dilution of your investment.
The
public offering price of our common stock in this offering is
substantially higher than the net tangible book value per share of
our common stock. Therefore, if you purchase securities in this
offering, you will pay an effective price per share of common stock
that substantially exceeds our net tangible book value per share
after giving effect to this offering. Based on a public offering
price of $9.00 per share of common stock, if you purchase
securities in this offering, you will experience immediate dilution
of $7.26 per share, representing the difference between the
public offering price of the securities and our pro forma net
tangible book value per share as of December 31, 2020, after giving
effect to the net proceeds to us from this offering. Furthermore,
if any of our outstanding options or warrants are exercised at
prices below the public offering price, we grant additional options
or other awards under our equity incentive plans or issue
additional warrants, you may experience further dilution of your
investment. See the section entitled “Dilution” below for a more
detailed illustration of the dilution you would incur if you
participate in this offering.
We will have broad discretion as to the use of the proceeds from
this offering, and we may not use the proceeds
effectively.
We
intend to use the net proceeds from this offering for working capital and general corporate
purposes, including sales
and marketing activities, product development and capital
expenditures. See “Use of Proceeds” on page
S-14. We will have broad discretion as to the
application of the net proceeds and could use them for purposes
other than those contemplated at the time of this offering. Our
stockholders may not agree with the manner in which our management
chooses to allocate and spend the net proceeds. Moreover, our
management could use the net proceeds for corporate purposes that
may not necessarily increase our market value or improve our
results of operations.
Although our common stock is listed on the Nasdaq Capital Market,
our shares are likely to be thinly traded for some time and an
active market may never develop.
Although our common stock is listed on the Nasdaq Capital
Market, there is currently
a very limited trading market for our common stock, and we cannot
ensure that a robust trading market will ever develop or be
sustained. Our shares of common stock may be thinly traded, and the
price, if traded, may not reflect our actual or perceived value.
There can be no assurance that there will be an active market for
our shares of common stock in the future. The market liquidity will
be dependent on the perception of our operating business,
competitive forces, state of the esports gaming industry, growth
rate and becoming cash flow profitable on a sustainable basis,
among other things. We may, in the future, take certain steps,
including utilizing investor awareness campaigns, press releases,
road shows, and conferences to increase awareness of our business
and any steps that we might take to bring us to the awareness of
investors may require we compensate financial public relations
firms with cash and/or stock. There can be no assurance that there
will be any awareness generated or the results of any efforts will
result in any impact on our trading volume. Consequently, investors
may not be able to liquidate their investment or liquidate it at a
price that reflects the value of the business and trading may be at
an inflated price relative to the performance of our company due
to, among other things, availability of sellers of our shares. If a
market should develop, the price may be highly volatile. Because
there may be a low price for our shares of common stock, many
brokerage firms or clearing firms may not be willing to effect
transactions in the securities or accept our shares for deposit in
an account. Even if an investor finds a broker willing to effect a
transaction in the shares of our common stock, the combination of
brokerage commissions, transfer fees, taxes, if any, and any other
selling costs may exceed the selling price. Further, many lending
institutions will not permit the use of low-priced shares of common
stock as collateral for any loans.
Our stock price may be volatile, and you could lose all or part of
your investment.
The trading price of our common stock following this offering may
fluctuate substantially and may be higher or lower than the public
offering price. This may be especially true for companies with a
small public float such as ours. The trading price of our common
stock following this offering will depend on several factors,
including those described in this “Risk
Factors” section, many of
which are beyond our control and may not be related to our
operating performance. These fluctuations could cause you to lose
all or part of your investment in our common stock since you might
be unable to sell your shares at or above the price you paid in
this offering. Factors that could cause fluctuations in the trading
price of our common stock include:
●
changes
to our industry, including demand and regulations;
●
we
may not be able to compete successfully against current and future
competitors;
●
competitive
pricing pressures;
●
our
ability to obtain working capital financing as
required;
●
additions
or departures of key personnel;
●
sales
of our common stock;
●
our
ability to execute our business plan;
●
operating
results that fall below expectations;
●
loss
of any strategic relationship, sponsor or licensor;
●
any
major change in our management;
●
changes
in accounting standards, procedures, guidelines, interpretations or
principals; and
●
economic,
geo-political and other external factors.
In addition, the stock market in general, and the market for
technology companies in particular, has experienced extreme price
and volume fluctuations that have often been unrelated or
disproportionate to the operating performance of those companies.
Broad market and industry factors, as well as general economic,
political and market conditions such as recessions or interest rate
changes, may seriously affect the market price of our common stock,
regardless of our actual operating performance. These fluctuations
may be even more pronounced in the trading market for our stock
shortly following this offering. If the market price of our common
stock after this offering does not exceed the initial public
offering price, you may not realize any return on your investment
in us and may lose some or all of your investment.
In addition, in the past, following periods of volatility in the
overall market and the market prices of particular companies’
securities, securities class action litigations have often been
instituted against these companies. Litigation of this type, if
instituted against us, could result in substantial costs and a
diversion of our management’s attention and resources. Any
adverse determination in any such litigation or any amounts paid to
settle any such actual or threatened litigation could require that
we make significant payments.
We may not be able to satisfy listing requirements of Nasdaq or
maintain a listing of our common stock on Nasdaq.
Because our common stock is listed on Nasdaq, we must meet certain
financial and liquidity criteria to maintain such listing. If we
violate Nasdaq listing requirements, our common stock may be
delisted. If we fail to meet any of Nasdaq’s listing
standards, our common stock may be delisted. In addition, our board
of directors may determine that the cost of maintaining our listing
on a national securities exchange outweighs the benefits of such
listing. A delisting of our common stock from Nasdaq may materially
impair our stockholders’ ability to buy and sell our common
stock and could have an adverse effect on the market price of, and
the efficiency of the trading market for, our common stock. The
delisting of our common stock could significantly impair our
ability to raise capital and the value of your
investment.
If securities industry analysts do not publish research reports on
us, or publish unfavorable reports on us, then the market price and
market trading volume of our common stock could be negatively
affected.
Any trading market for our common stock will be influenced in part
by any research reports that securities industry analysts publish
about us. We may not obtain any future research coverage by
securities industry analysts. In the event we are covered by
research analysts, and one or more of such analysts downgrade our
securities, or otherwise reports on us unfavorably, or discontinues
coverage of us, the market price and market trading volume of our
common stock could be negatively affected.
We have not paid cash dividends in the
past and do not expect to pay dividends in the future. Any return
on investment will likely be limited to the value of our common
stock.
We
have never paid cash dividends on our common stock and do not
anticipate doing so in the foreseeable future. The payment of
dividends on our common stock will depend on earnings, financial
condition and other business and economic factors affecting us at
such time as our board of directors may consider relevant. If we do
not pay dividends, our common stock may be less valuable because a
return on your investment will only occur if our stock price
appreciates.
Because we do not expect to pay dividends in the foreseeable future
after this offering, you must rely on price appreciation of our
common stock for return on your investment.
We currently intend to retain most, if not all, of our available
funds and any future earnings after this offering to fund the
development and growth of our business. As a result, we do not
expect to pay any cash dividends in the foreseeable future.
Therefore, you should not rely on an investment in our common stock
as a source for any future dividend income.
Our board of directors has complete discretion as to whether to
distribute dividends, subject to certain requirements of Delaware
General Corporation Law. Even if our board of directors decides to
declare and pay dividends, the timing, amount and form of future
dividends, if any, will depend on, among other things, our future
results of operations and cash flow, our capital requirements and
surplus, the amount of distributions, if any, received by us from
our subsidiaries, our financial condition, contractual restrictions
and other factors deemed relevant by our board of directors.
Accordingly, the return on your investment in our common stock will
likely depend entirely upon any future price appreciation of our
common stock. There is no guarantee that our common stock will
appreciate in value after this offering or even maintain the price
at which you purchased the common stock. You may not realize a
return on your investment in our common stock and you may even lose
your entire investment in our common stock.
CAUTIONARY
NOTES REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus
and the documents incorporated by
reference herein contain forward-looking statements that
involve substantial risks and uncertainties. The forward-looking
statements are contained principally in the sections of this
prospectus titled “Prospectus Summary” and
“Risk Factors,”
in sections of our Annual Report on Form 10-K for the year ended
December 31, 2020 titled “Risk Factors,”
“Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” and “Business,” but are also contained
elsewhere in this prospectus. In some cases, you can identify
forward-looking statements by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “predict,” “project,” “potential,” “should,” “will,” or “would,” or the negative of these
terms, or other comparable terminology intended to identify
statements about the future. Although we believe that we have a
reasonable basis for each forward-looking statement contained in
this prospectus, we caution you that these statements are based on
a combination of facts and factors currently known by us and our
expectations of the future, about which we cannot be certain. These
statements involve known and unknown risks, uncertainties and other
factors that may cause our actual results, levels of activity,
performance or achievements to be materially different from the
information expressed or implied by these forward-looking
statements. Factors that could cause such difference,
include:
●
overall strength
and stability of general economic conditions and of the electronic
video game sports (“esports”) industry in the United
States and globally;
●
changes in consumer
demand for, and acceptance of, our services and the games that we
license for our tournaments and other experiences, as well as
online gaming in general;
●
changes in the
competitive environment, including adoption of technologies,
services and products that compete with our own;
●
our ability to
generate consistent revenue;
●
our ability to
effectively execute our business plan;
●
changes in the
price of streaming services, licensing fees, and network
infrastructure, hosting and maintenance;
●
changes in laws or
regulations governing our business and operations;
●
our ability to
maintain adequate liquidity and financing sources and an
appropriate level of debt on terms favorable to us;
●
our ability to
effectively market our services;
●
costs and risks
associated with litigation;
●
our ability to
obtain and protect our existing intellectual property protections,
including patents, trademarks and copyrights;
●
our ability to
obtain and enter into new licensing agreements with game publishers
and owners;
●
changes in
accounting principles, or their application or interpretation, and
our ability to make estimates and the assumptions underlying the
estimates, which could have an effect on earnings;
●
interest rates and
the credit markets; and
●
our ability to
consummate accretive acquisitions of third parties;
and
●
other risks and uncertainties described in the
"Risk
Factors" section of our Annual
Report on Form 10-K for the year ended December 31, 2020,
which are incorporated herein by reference.
This
list of factors that may affect future performance and the accuracy
of forward-looking statements is illustrative, but not exhaustive.
New risk factors and uncertainties not described here or elsewhere
in this prospectus, including in the sections entitled
“Risk Factors,”
may emerge from time to time. Moreover, because we operate in a
competitive and rapidly changing environment, it is not possible
for our management to predict all risk factors and uncertainties,
nor can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements we may make. The forward-looking
statements are also subject to the risks and uncertainties specific
to our Company, including but not limited to the fact that we have
only a limited operating history as a public company. In light of
these risks, uncertainties and assumptions, the future events and
trends discussed in this prospectus may not occur, and actual
results could differ materially and adversely from those
anticipated or implied in the forward-looking
statements.
You
should not rely upon forward-looking statements as predictions of
future events. Although we believe the expectations reflected in
the forward-looking statements are reasonable, we cannot guarantee
that the future results, levels of activity, performance and events
and circumstances reflected in the forward-looking statements will
be achieved or occur. Moreover, neither we nor any other person
assume responsibility for the accuracy and completeness of the
forward-looking statements. Except as
required by applicable law, including the securities laws of the
United States, we do not intend to update any of the
forward-looking statements to conform these statements to actual
results.
You
should read this prospectus, the documents incorporated herein and
those documents filed as exhibits to the registration statement, of
which this prospectus is a part, with the understanding that our
actual future results, levels of activity, performance and
achievements may be materially different from what we
expect.
USE OF PROCEEDS
We
estimate that the net proceeds from the sale of the shares of
common stock that we are offering will be approximately $13.6
million, after deducting estimated offering expenses payable by
us.
We currently intend to use the net proceeds we receive from this
offering for working capital and general corporate purposes,
including sales and marketing
activities, product development and capital expenditures. We may
also use a portion of the net proceeds for the acquisition of, or
investment in, technologies, solutions or businesses. Pending these
uses, we may invest the net proceeds from this offering in
short-term, investment-grade interest-bearing securities such as
money market accounts, certificates of deposit, commercial paper
and guaranteed obligations of the U.S.
government.
The intended use of net proceeds from this offering represents our
expectations based upon our present plans and business conditions.
We cannot predict with certainty all of the particular uses for the
proceeds of this offering or the amounts that we will actually
spend on the uses described in this prospectus. Accordingly, our
management will have significant flexibility in applying the net
proceeds of this offering. The timing and amount of our actual
expenditures will be based on many factors, including cash flows
from operations and the anticipated growth of our business. Pending
their use, we intend to invest the net proceeds of this offering in
a variety of capital-preservation investments, including short- and
intermediate-term, interest-bearing, investment-grade
securities.
We have never declared or paid any dividends on our capital stock.
We currently intend to retain all available funds and any future
earnings for the operation and expansion of our business and,
therefore, we do not anticipate declaring or paying cash dividends
in the foreseeable future. The payment of dividends will be at the
discretion of our Board of Directors and will depend on our results
of operations, capital requirements, financial condition,
prospects, contractual arrangements, any limitations on payment of
dividends present in our current and future debt agreements, and
other factors that our board of directors may deem
relevant.
The following table sets forth our cash and capitalization as of
December 31, 2020:
●
on a pro forma basis giving effect to the issuance of shares of
common stock and the receipt of proceeds, each as applicable, in
connection with the January Registered Direct Offering and the
February Registered Direct Offering; and
●
on a pro forma, as adjusted basis giving effect to the sale by us
of 1,512,499 shares of common stock in this offering, at a public
offering price of $9.00 per share, after deducting the underwriting
discount and commissions, and estimated offering expenses payable
by us.
This table should be read with “Use of
Proceeds” in this
prospectus, as well as “Management’s Discussion
and Analysis of Financial Condition and Results of
Operations” and our
financial statements and related notes included in our Annual
Report on Form 10-K for the year ended December 31, 2020,
which is incorporated by reference into this
prospectus.
|
|
|
|
|
|
|
|
|
|
Cash
|
$7,942
|
$27,837
|
$41,379
|
Long-term note
payable
|
1,208
|
1,208
|
1,208
|
|
|
|
|
Common stock, par
value $0.001 per share, 100,000,000 shares authorized, 15,483,010 shares issued and outstanding,
actual;21,486,764 shares issued
and outstanding, as adjusted;22,999,263 shares issued and
outstanding, pro forma, as adjusted
|
25
|
31
|
33
|
Additional paid-in
capital
|
115,459
|
135,348
|
148,889
|
Accumulated
deficit
|
(104,544)
|
(104,544)
|
(104,544)
|
Total
stockholders’ equity
|
10,940
|
30,835
|
44,377
|
Total
capitalization
|
$12,148
|
$32,043
|
$45,585
|
_______________
The number of shares of common stock that will be outstanding after
this offering is based on 15,483,010 shares of common stock
outstanding as of December 31, 2020, and excludes as of such
date:
●
2,449,485 shares of common
stock issuable upon exercise of common stock purchase warrants,
with a weighted average exercise price of $9.61 per share;
●
1,637,929
shares of common stock issuable upon
exercise of options outstanding, with a weighted average exercise
price of $5.59 per share; and 588,423 shares
of common stock reserved for issuance pursuant to our 2014 Plan;
and
●
382,144 shares of common stock issuable upon the vesting
of non-vested restricted stock units
outstanding.
If you
invest in our common stock, your ownership interest will be diluted
to the extent the public offering price per share of our common
stock exceeds the tangible book value per share of our common stock
immediately following this offering. As of December 31, 2020, the
tangible book value of our common stock was approximately
$6.5 million, or $0.42 per share of common stock based on
15,483,010 shares of our common
stock issued and outstanding. Tangible book value per share
represents common equity less intangible assets and goodwill,
divided by the number of shares of our common stock
outstanding.
Pro forma net tangible book value per share represents our total
tangible assets less our total liabilities, divided by the number
of shares of common stock outstanding as of December 31, 2020,
after giving effect to the receipt of net proceeds received from
the issuance of shares of our common stock in connection with the
January Registered Direct Offering and the February Registered
Direct Offering. After giving effect to the proceeds
received from the January Registered Direct Offering and the
February Registered Direct Offering, the pro forma tangible book
value of our common stock was approximately $26.4 million, or $1.23 per share of common stock based on
21,486,764 shares of our common
stock issued and outstanding.
After
giving further effect to (i) the pro
forma adjustments described above, and (ii) the sale of
shares of our common stock in this offering at a public offering
price of $9.00 per share, after deducting the estimated offering
expenses payable by us, our pro
forma, as adjusted net tangible book value as of December
31, 2020 would have been approximately $39.9 million. This
represents an immediate increase in the pro forma net tangible book
value of $0.51 per share to existing stockholders and an immediate
dilution of $7.26 per share to new investors purchasing shares of
our common stock in this offering at the public offering
price.
The following table illustrates the dilution in net tangible book
value per share to new investors:
Public offering
price per Share
|
|
$9.00
|
|
|
Net tangible book
value per share as of December 31, 2020
|
$0.42
|
|
Pro
forma increase in net tangible book value per share attributable to
the January Registered Direct Offering, February Registered Direct
Offering and the expected issuance of shares of common stock as
Merger Consideration
|
0.81
|
|
Pro
forma net tangible book value per share as of December 31,
2020
|
1.23
|
|
Increase in pro
forma, as adjusted net tangible book value per share after giving
effect to this offering
|
$0.51
|
|
|
|
|
Pro forma, as
adjusted net tangible book value per share as of December 31,
2020
|
|
$1.74
|
|
|
|
Dilution in pro
forma, as adjusted net tangible book value per share to new
investors in this offering
|
|
$7.26
|
The
foregoing discussion and table do not take into account further
dilution to new investors that could occur upon the vesting of
outstanding restricted stock units or the exercise of outstanding
stock options or warrants having a per-share exercise price less
than the per share offering price to the public in this offering.
In addition, we may choose to raise additional capital due to
market conditions or strategic considerations even if we believe we
have sufficient funds for our current or future operating plans. To
the extent that additional capital is raised through the sale of
equity or equity-linked securities, the issuance of these
securities could result in further dilution to our
stockholders.
The number of shares of common stock that will be outstanding after
this offering is based on 15,483,010 shares of common stock
outstanding as of December 31,
2020, and excludes as of such date:
●
2,449,485 shares of common
stock issuable upon exercise of common stock purchase warrants,
with a weighted average exercise price of $9.64 per share;
●
1,637,929
shares of common stock issuable upon
exercise of options outstanding, with a weighted average exercise
price of $5.59 per share; and 588,423 shares
of common stock reserved for issuance pursuant to our 2014 Plan;
and
●
382,144 shares of common stock issuable upon the vesting
of non-vested restricted stock units
outstanding.
To the
extent that any of the foregoing are exercised, investors
participating in the offering will experience further
dilution.
DESCRIPTION OF
SECURITIES WE ARE OFFERING
Our
authorized capital stock consists of 100,000,000 shares of common
stock, $0.001 par value per share, and 10,000,000 shares of
preferred stock, $0.001 par value per share. Our board of directors
may establish the rights and preferences of the preferred stock
from time to time. As of March 19, 2021, there were 21,608,144 shares of our common stock
issued and outstanding and no shares of preferred stock issued and
outstanding.
Our
common stock is traded on the Nasdaq Capital Market under the
symbol "SLGG". On March 19, 2021, the last reported sale price of
our common stock on The Nasdaq Capital Market was
$10.14 per share
The
material terms of our common stock are described under the heading
"Description of Capital
Stock" in the accompanying prospectus beginning on page
10.
We are
offering 1,512,499 shares of
common stock pursuant to this prospectus supplement and the
accompanying prospectus at an offering price of $9.00 per
share. The securities are being offered directly to accredited
investors participating in this offering, without a placement
agent, underwriter, broker or dealer.
The
transfer agent for our common stock is Issuer Direct, 1981 E. Murray Holladay Rd #100, Salt Lake City,
Utah 84117. The transfer agent’s telephone number is
(801) 272-9294.
LEGAL MATTERS
Certain legal matters in connection with this offering will be
passed upon for us by Disclosure Law Group, a Professional
Corporation, of San Diego, California.
The
financial statements of Super League Gaming, Inc. as of
December 31, 2020 and 2019 and for each of the years in the
two-year period ended December 31, 2020, incorporated in this
Prospectus by reference from the Super League Gaming, Inc. Annual
Report on Form 10-K for the year ended December 31, 2020 have been
audited by Baker Tilly US, LLP, an independent registered public
accounting firm, as stated in their reports thereon (which report
expresses an unqualified opinion and includes an explanatory
paragraph relating to the Company’s ability to continue as a
going concern), have been incorporated in this Prospectus and
Registration Statement in reliance upon such reports and upon the
authority of such firm as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
Our
common stock is registered with the SEC under Section 12 of the
Exchange Act and, accordingly, we are subject to the information
and periodic reporting requirements of the Exchange Act, and we
file periodic reports, proxy statements and other information with
the SEC. These periodic reports, proxy statements and other
information are available at the website of the SEC referred to
above. We maintain a website at http://www.superleague.com. You may
access our annual reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K and amendments to those reports,
proxy statements and other information filed or furnished pursuant
to Section 13(a) or 15(d) of the Exchange Act with the SEC free of
charge at our website as soon as reasonably practicable after such
material is electronically filed with, or furnished to, the SEC.
The information contained in, or that can be accessed through, our
website is not part of this prospectus.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by us with the SEC are incorporated
by reference in this prospectus:
●
our Annual Report on Form 10-K for the year ended December 31,
2020, filed on March 19, 2021;
●
our
Current Report on Form 8-K, filed on January 14, 2021;
●
our
Current Report on Form 8-K, filed on February 12,
2021;
●
our Current Report on Form 8-K, filed on March 11, 2021;
and
●
the description of our common stock which is registered under
Section 12 of the Exchange Act, in our registration statement
on Form 8-A, filed on February
21, 2019, including any
amendment or reports filed for the purposes of updating this
description.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this registration statement to the
extent that a statement contained herein or in any other
subsequently filed document which also is or deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this registration statement.
We will provide upon request to each person, including any
beneficial owner, to whom a prospectus is delivered, a copy of any
or all of the information that has been incorporated by reference
in the prospectus but not delivered with the prospectus. You may
request a copy of these filings, excluding the exhibits to such
filings which we have not specifically incorporated by reference in
such filings, at no cost, by writing to or calling us
at:
Super League Gaming, Inc.
2912 Colorado Ave., Suite #203
Santa Monica, California 90404
(802) 294-2754
This prospectus is part of a registration statement we filed with
the SEC. You should only rely on the information or representations
contained in this prospectus supplement and the accompanying
prospectus. We have not authorized anyone to provide information
other than that provided in this prospectus. We are not making an
offer of the securities in any state where the offer is not
permitted. You should not assume that the information in this
prospectus supplement and the accompanying prospectus is accurate
as of any date other than the date on the front of the
document.
BASE PROSPECTUS
$40,000,000
COMMON STOCK
PREFERRED STOCK
WARRANTS
UNITS
From time to time, we may offer and sell, in one or more offerings,
up to $40,000,000 of any combination of the securities described in
this prospectus. We may also offer securities as may be issuable
upon conversion, repurchase, exchange or exercise of any securities
registered hereunder, including any applicable anti-dilution
provisions.
This prospectus provides a general description of the securities we
may offer from time to time. Each time we offer securities, we will
provide specific terms of the securities offered in a supplement to
this prospectus. We may also authorize one or more free writing
prospectuses to be provided to you in connection with an offering.
The prospectus supplement and any related free writing prospectus
may also add, update or change information contained in this
prospectus. You should carefully read this prospectus, the
applicable prospectus supplement and any related free writing
prospectus, as well as any documents incorporated by reference,
before you invest in any of the securities being
offered.
Our common stock is listed on the Nasdaq Capital Market under the
ticker symbol “SLGG.” On April 15, 2020, the last
reported sale price per share of our common stock was $3.30 per
share.
We may offer and sell our securities to or through one or more
agents, underwriters, dealers or other third parties or directly to
one or more purchasers on a continuous or delayed basis. If agents,
underwriters or dealers are used to sell our securities, we will
name them and describe their compensation in a prospectus
supplement. The price to the public of our securities and the net
proceeds we expect to receive from the sale of such securities will
also be set forth in a prospectus supplement. For additional
information on the methods of sale, you should refer to the section
entitled “Plan of
Distribution” in this
prospectus.
As of April 15, 2020, the aggregate market value of our outstanding
common stock held by non-affiliates was approximately $28,339,165,
which was calculated in accordance with General Instruction I.B.6
of Form S-3, based on 7,915,968 shares of outstanding common stock
held by non-affiliates, at a price per share of $3.58, the closing
sale price of our common stock reported on the Nasdaq Capital
Market on February 26, 2020.
Pursuant to General Instruction I.B.6 of Form S-3, in no event will
we sell the securities described in this prospectus in a public
primary offering with a value exceeding more than one-third (1/3)
of the aggregate market value of our common stock held by
non-affiliates in any twelve (12)-month period, so long as the
aggregate market value of our outstanding common stock held by
non-affiliates remains below $75.0 million. During the twelve (12)
calendar months prior to and including the date of this prospectus,
we have not offered and sold any securities pursuant to General
Instruction I.B.6 of Form S-3. As a result, we are currently
eligible to offer and sell up to an aggregate of approximately
$9.44 million of our securities pursuant to General Instruction
I.B.6. of Form S-3.
Our business and investing in our
securities involve significant risks. You should review carefully
the risks and uncertainties referenced under the heading
“Risk
Factors” on page 6 of
this prospectus, as well as those contained in the applicable
prospectus supplement and any related free writing prospectus, and
in the other documents that are incorporated by reference into this
prospectus or the applicable prospectus
supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is April 20, 2020
SUPER LEAGUE GAMING, INC.
TABLE OF CONTENTS
This prospectus is part of a registration statement filed with the
Securities and Exchange Commission
(the “SEC”), using a “shelf” registration
process. Under this shelf registration process, we may sell
the securities described in this prospectus in one or more
offerings. This prospectus provides you with a general
description of the securities which may be offered. Each time
we offer securities for sale, we will provide a prospectus
supplement that contains information about the specific terms of
that offering. Any prospectus supplement may also add or update
information contained in this prospectus. You should read both
this prospectus and any prospectus supplement together with
additional information described below under
“Where You Can Find More
Information” and
“Incorporation of Certain
Information by Reference.”
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES
UNLESS IT IS ACCOMPANIED BY A PROSPECTUS
SUPPLEMENT.
You should rely only on the information contained or incorporated
by reference in this prospectus, and in any prospectus
supplement. We have not authorized any other person to provide
you with different information. If anyone provides you with
different or inconsistent information, you should not rely on
it. We are not making offers to sell or solicitations to buy
the securities described in this prospectus in any jurisdiction in
which an offer or solicitation is not authorized, or in which the
person making that offer or solicitation is not qualified to do so
or to anyone to whom it is unlawful to make an offer or
solicitation. You should not assume that the information in
this prospectus or any prospectus supplement, as well as the
information we file or previously filed with the SEC that we
incorporate by reference in this prospectus or any prospectus
supplement, is accurate as of any date other than its respective
date. Our business, financial condition, results of operations
and prospects may have changed since those dates.
This prospectus contains summaries of certain provisions contained
in some of the documents described herein, but reference is made to
the actual documents for complete information. All of the summaries
are qualified in their entirety by the actual documents. Copies of
some of the documents referred to herein have been filed, will be
filed or will be incorporated by reference as exhibits to the
registration statement of which this prospectus is a part, and you
may obtain copies of those documents as described below under the
heading “Where You Can Find More
Information.”
This summary highlights information contained elsewhere in this
prospectus and does not contain all of the information you should
consider before investing in our common stock. You should read this
entire prospectus carefully, including the section entitled
“Risk Factors” and our financial statements and the
related notes thereto included elsewhere in this prospectus, before
making an investment decision.
Super
League Gaming, Inc. (“Super League,” the
“Company,”
“we” or
“our”) is a global
leader in the mission to bring live and digital esports
entertainment and experiences directly to everyday competitive
gamers around the world. Utilizing our proprietary technology
platform, Super League operates physical and digital experiences in
partnership with publishers of top-tier game titles and
owners/operators of a distributed footprint of venues, a network of
digital social and viewing channels, and an
association/organization of city-based amateur gaming clubs and
teams. In addition to providing premium experiences by operating
city-vs-city amateur esports leagues and producing thousands of
social gaming experiences across North America and our
ever-expanding international footprint, the Super League
Network features multiple forms of content celebrating the
love of play via social media, live streaming and video-on-demand,
along with continuous gameplay and leaderboards. Inside our network
is Framerate, a large independent social video esports network
powered by user-generated highlight reels, and our exclusive
proprietary platform Minehut, providing a social and gameplay
forum for the avid Minecraft community. Through our partnerships
with high-profile venue owners such as Wanda Theatres in China, and
Topgolf and Cinemark Theatres in North America, along with
ggCircuit, an esports services company that provides
gaming center management software solutions and access to a global
network of gaming centers, Super League is committed to
supporting the development of local, grassroots player communities,
while providing a global, scalable infrastructure for esports
competition and engagement. We address not only a wide range of
gamers across game titles, ages and skill levels, but also a wide
range of content-capture beyond just gameplay. This positions Super
League as more than a tournament operator; we are a lifestyle and
media company focused on capturing, generating, aggregating and
distributing content across the genre of all things
esports.
Executive Summary
We
believe Super League is on the leading edge of the rapidly growing
competitive video gaming industry, which has become an established
and vital part of the entertainment landscape. According to
Reuters Plus, 2018, gaming is now the world’s favorite form
of entertainment, as the gaming industry generated more revenue in
2017 than television, movies and music. At the professional
level, thousands of professional players on hundreds of teams
compete in dozens of high stakes competitions that draw significant
audiences, both in person and online. In addition, the value of
brand sponsorships, media rights and prize money continue to rise,
as are professional team valuations and the purchase price for
securing franchises in professional leagues.
With
NewZoo reporting 2.6 billion gamers globally, we believe there is a
larger opportunity for the world of mainstream competitive players
who want their own esports experience. These amateur gamers are
players who enjoy the competition, the social interaction and
community, and the entertainment value associated with playing and
watching others play. According to Nielsen Esports Playbook, 2017,
competitive amateur gamers take part in over eight hours of
gameplay and watch up to nine hours of esports-related content each
week. We believe this is an under-served market that seeks their
own opportunities for team-based play on real playing
fields.
Super
League is a critically important component in providing the
infrastructure for mainstream esports that is synergistic and
accretive to the greater esports ecosystem. Over the past five
years, we believe we have become the preeminent brand for amateur
esports by providing a proprietary software platform that allows
our gamers to compete, socialize and spectate premium amateur
esports gameplay and entertainment, both physically and digitally.
We celebrate everyday competitive gamers and provide a
differentiated way for players and spectators to unite around their
city clubs and hometown venues for a better, more inclusive social
experience not previously available. Not only do we offer premium
amateur esports leagues and community, but we are able to leverage
our derivative gameplay content to become a comprehensive amateur
esports content network. As we expand our city clubs, partner venue
network, breadth of game titles and reach into the home, we bring
new players into our customer funnel to drive audience growth, and
ultimately, consumer and content monetization.
In
fiscal year 2019, management focused on the acceleration of
development of the building blocks in place for our two primary
revenue sources: (1) sponsorships and advertising revenues, the
monetization of our content, and (2) direct to consumer revenues,
or gamer monetization. Further, as detailed below, we further
de-risked the business, achieving game title fluidity, venue
diversity, and an enhanced and more scalable
technology platform. We also established a premium advertising
model for future monetization and expanded our sales team to
facilitate delivery, launched our first effort at meaningful
consumer monetization, and expanded globally, both digitally and
physically.
We
offer a variety of ways gamers can engage digitally across our
Super League content network and our network of hometown venues
serving as the playing fields for recreational esports. In the
first quarter of 2020, we expanded our city-based gaming club and
league system from 16 to 24 cities across North America, including
Canada and Mexico, and we expect further expansion beyond North
America in the future.
The
fundamental drivers of our business model and monetization strategy
are creating deep community engagement through our highly
contextualized, local experiences that, when coupled with the
critical mass of our large digital audiences, provides the depth
and volume for premium content and offer monetization
differentiated from a more traditional, commoditized advertising
model. The combination of our physical venue network and digital
programming channels, with Super League’s technology platform
at the hub, creates the opportunity for not just a share of the
player’s wallet, but also the advertiser’s wallet. We
do this by offering brand sponsors and advertisers a premium
marketing channel to reach elusive Generation Z and Millennial
gamers and offering players ways to access exclusive tournaments,
rewards and programming through our Super League consumer
subscription offer and other consumer offerings.
Sponsorships and advertising revenues, the monetization of our
content. Traditionally, we have created our own
gameplay experiences to generate audience and content and attracted
brand and sponsorship dollars to those offers. This continues to be
a core source of revenue.
Our
potential partners also include game publishers, retailers and
brands across various categories who engage us to develop their own
customized branded gameplay experiences, powered by our flexible
gaming and content technology platform for their own
customers.
|
Additionally,
we can monetize our content commercially through advertising
revenues on our own digital channels and by selling our content to
third-parties.
|
Direct to Consumer - Gamer monetization. The second way
we monetize content is through direct-to-consumer pay walls for
access to premium digital and physical experiences and viewing
content. We have historically offered a freemium model where
consumers can join Super League for free-to-play, casual
competitive experiences and charged for access to premium gameplay
experiences. We intend to expand our breadth of consumer digital
offers in 2020.
To
date, our revenues have been weighted towards experience
monetization, however we expect to see content monetization begin
to emerge as a revenue opportunity.
Key Performance Indicators. We focus on five key
performance indicators (“KPIs”), as outlined below, to
assess our progress and drive revenue growth. The number of game
titles and number of retail partner venues drive audience,
introducing more players and spectators to Super League’s
gaming and content platform. Growth in physical and digital
experiences across a wider portfolio can increase the number of
registered users, including subscribers, and number of gameplay
hours which will have a significant impact on our content library.
This focus on audience and content generation ultimately impacts
our viewership, which has an amplification effect on potential
revenue streams and customer acquisition.
We
significantly outperformed the KPI goals we established at the
beginning of 2019, setting us up for fiscal 2020 with a focus on
accelerated revenue growth. During 2019, we achieved the following
KPI related results:
●
|
Game titles: We ended fiscal 2018 with four game titles in
our portfolio and as of the end of fiscal 2019, had over 20 game
titles, including the addition of Capcom's Street Fighter® V:
Arcade Edition during the second quarter of 2019 and Tencent
America's Player Unknown's Battlegrounds Mobile
(“PUBG
Mobile”), during the third quarter of 2019. The
increase in game titles reflects the flexibility of our technology
platform and our platform’s ability to rapidly ingest game
titles across a wide spectrum of game genres. Further, our digital
content network, which features user-generated content submitted to
us from any gamer, anywhere, has a limitless library of featured
titles. The diversity of our portfolio differentiates us as a truly
game-agnostic platform speaking to a wide spectrum of players and
viewers.
|
●
|
Retail Partner Venues: While we are just seeding the build
out and monetization of our retail footprint, our national-level
announcements with Top golf and ggCircuit LAN centers, as well as
our expanded agreement with ggCircuit, which allows us to expand
internationally, provides us with access to hundreds of physical
venue locations. We ended fiscal 2018 with 46 active venues and
grew to over 500 total active venues as of December 31, 2019. Our
domestic and global footprint establishes us as a leader in
aggregating local esports fields for everyday competitive
gamers.
|
●
|
Registered Users: We ended fiscal 2018 with approximately
300,000 registered users. During the year ended December 31, 2019,
we increased our registered users by approximately 227%, to 980,000
registered users. This increase in registered users represents more
gamers from whom we can gather user generated content and convert
into subscribers and/or upsell into other paid offers.
|
●
|
Gameplay Hours: As of December 31, 2019, including our
live gaming experiences and our expanding digital gameplay
channels, we generated approximately 15.0 million hours of gameplay
experiences, as compared to approximately 1.8 million full year
2018 gameplay hours. We are just beginning to explore the ways we
can repackage and distribute this significant derivative content
library for further monetization.
|
●
|
Viewership: Proving that we can attract viewers to our
platform and leverage the audiences our brand partners provide, we
generated 120.0 million views during fiscal year 2019, compared to
our full-year 2018 views of 925,000, leveraging our own programming
and experiences and the significant expansion of our audience reach
in connection with the acquisition of Framerate. The increase in
views resulted in the exponential growth of our monetizable
advertising inventory. Additionally, our increase in views was
achieved largely via user generated content submitted to us by our
community, significantly limiting the production cost and overall
investment required to achieve the growth in viewership in
2019.
|
Risk Factors
Our business is subject to substantial risk. Please carefully
consider the section titled “Risk
Factors” on page 6 of
this prospectus for a discussion of the factors you should
carefully consider before deciding to purchase securities that may
be offered by this prospectus.
Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also impair our business
operations. You should be able to bear a complete loss of your
investment.
Selected Risks Related to our Business
Our
business is subject to numerous risks, including risks that may
prevent us from achieving our business objectives or may adversely
affect our business, financial condition, results of operations,
cash flows and prospects, that you should consider before making an
investment decision. Some of the more significant risks and
uncertainties relating to an investment in our company are listed
below. These risks are more fully described in the
“Risk Factors”
section of this prospectus immediately following this prospectus
summary:
●
overall strength
and stability of general economic conditions, and of the esports
industry, both in the United States and globally;
●
changes in
consumer demand for, and acceptance of, the game titles that we
offer for our tournaments and activities, as well as online
multiplayer competitive amateur gaming in general;
●
changes in the
competitive environment, including new entrants in the market for
online amateur competitive gaming, tournaments and competitions
that compete with our own;
●
competition
from new entrants in the amateur esports space, and if we are
unable to compete effectively, we may not be able to achieve or
maintain significant market penetration or improve our results of
operations;
●
our ability
to generate consistent revenue;
●
our ability to
effectively execute our business plan;
●
changes in
the licensing fees charged by the publishers of the most popular
online video games;
●
changes in laws or
regulations governing our business and operations;
●
our ability to
maintain adequate liquidity and financing sources and an
appropriate level of debt on terms favorable to us;
●
our ability to
effectively market our amateur city leagues, tournaments and
competitions;
●
our ability to
obtain and protect our existing intellectual property protections,
including patents, trademarks and copyrights; and
●
other risks
described from time to time in periodic and current reports that we
file with the Securities and Exchange Commission (the
“SEC
”).
Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also impair our business
operations. You should be able to bear a complete loss of your
investment.
Implications of Being an Emerging Growth Company
As a
company with less than $1.07 billion in revenue during our most
recently completed fiscal year, we qualify as an “emerging
growth company” as defined in the Jumpstart Our Business
Startups Act of 2012 (the “JOBS Act”). An emerging growth
company may take advantage of specified reduced reporting and other
burdens that are otherwise applicable generally to public
companies. These provisions include:
●
A requirement to
have only two years of audited financial statements and only two
years of related Management’s Discussion and Analysis of
Financial Condition and Results of Operations;
●
An exemption from
the auditor attestation requirement on the effectiveness of our
internal control over financial reporting under Section 404(b) of
the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley
Act”);
●
An extended
transition period for complying with new or revised accounting
standards;
●
Reduced disclosure
about our executive compensation arrangements; and
●
No non-binding
advisory votes on executive compensation or golden parachute
arrangements.
We may take advantage of these provisions from the JOBS Act until
the end of the fiscal year in which the fifth anniversary of our
initial public offering, or such earlier time when we no longer
qualify as an emerging growth company. We would cease to be an
emerging growth company on the earlier of (i) the last day of the
fiscal year (a) in which we have more than $1.07 billion in annual
revenue or (b) in which we have more than $700 million in market
value of our capital stock held by non-affiliates, or (ii) the date
on which we issue more than $1.0 billion of non-convertible debt
over a three-year period. We may choose to take advantage of some
but not all of these reduced burdens under the JOBS Act. We have
irrevocably taken advantage of other reduced reporting requirements
in this prospectus, and we may choose to do so in future filings.
To the extent we do, the information that we provide stockholders
may be different than you might get from other public companies in
which you hold equity interests.
Corporate Information
Super
League Gaming, Inc. was incorporated under the laws of the State of
Delaware on October 1, 2014 as Nth Games, Inc. On July 13, 2015, we
changed our corporate name from Nth Games, Inc. to Super League
Gaming, Inc. Our principal executive offices are located at 2906
Colorado Avenue, Santa Monica, California 90404, and our Company
telephone number is (802) 294-2754,
and our investor relations contact number is (949)
574-3860.
Our
corporate website address is www.superleague.com. Information contained in, or
accessible through, our website is not a part of this prospectus,
and the inclusion of our website address in this prospectus is an
inactive textual reference only.
Investing in our securities involves a high degree of risk. Before
deciding whether to purchase any of our securities, you should
carefully consider the risks and uncertainties described under
“Risk
Factors” in our Annual
Report on Form 10-K for the fiscal year ended
December 31, 2019, any subsequent Quarterly Report on
Form 10-Q and our other filings with the SEC, all of which are
incorporated by reference herein. If any of these risks actually
occur, our business, financial condition and results of operations
could be materially and adversely affected and we may not be able
to achieve our goals, the value of our securities could decline and
you could lose some or all of your investment. Additional risks not
presently known to us or that we currently deem immaterial may also
impair our business operations. If any of these risks occur, the
trading price of our common stock could decline materially and you
could lose all or part of your investment.
CAUTIONARY NOTES REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference herein
contain forward-looking statements that involve substantial risks
and uncertainties. All statements, other than statements of
historical facts, contained in this
prospectus and the documents incorporated by reference herein,
including statements regarding our strategy, future operations, future
financial position, future revenue, projected costs, prospects,
plans, objectives of management and expected market growth, are
forward-looking statements. These statements involve known and
unknown risks, uncertainties and other important factors that may
cause our actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements.
The words “anticipate,” “believe,”
“estimate,” “expect,” “intend,”
“may,” “plan,” “predict,”
“project,” “target,”
“potential,” “will,” “would,”
“could,” “should,” “continue,”
and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. These forward-looking statements include,
among other things, statements about:
●
overall
strength and stability of general economic conditions and of the
electronic video game sports (“esports”) industry in the United
States and globally;
●
changes
in consumer demand for, and acceptance of, our services and the
games that we license for our tournaments and other experiences, as
well as online gaming in general;
●
changes
in the competitive environment, including adoption of technologies,
services and products that compete with our own;
●
our
ability to generate consistent revenue;
●
our
ability to effectively execute our business plan;
●
changes
in the price of streaming services, licensing fees, and network
infrastructure, hosting and maintenance;
●
changes
in laws or regulations governing our business and
operations;
●
our
ability to maintain adequate liquidity and financing sources and an
appropriate level of debt on terms favorable to us;
●
our
ability to effectively market our services;
●
costs
and risks associated with litigation;
●
our
ability to obtain and protect our existing intellectual property
protections, including patents, trademarks and
copyrights;
●
our
ability to obtain and enter into new licensing agreements with game
publishers and owners;
●
changes
in accounting principles, or their application or interpretation,
and our ability to make estimates and the assumptions underlying
the estimates, which could have an effect on earnings;
●
interest
rates and the credit markets; and
●
other
risks described from time to time in periodic and current reports
that we file with the SEC.
This
list of factors that may affect future performance and the accuracy
of forward-looking statements is illustrative, but not exhaustive.
New risk factors and uncertainties not described here or elsewhere
in this prospectus, including in the sections entitled “Risk
Factors,” may emerge from time to time. Moreover, because we
operate in a competitive and rapidly changing environment, it is
not possible for our management to predict all risk factors and
uncertainties, nor can we assess the impact of all factors on our
business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statements we may make. The
forward-looking statements are also subject to the risks and
uncertainties specific to our Company, including but not limited to
the fact that we have no operating history as a public company. In
light of these risks, uncertainties and assumptions, the future
events and trends discussed in this prospectus may not occur, and
actual results could differ materially and adversely from those
anticipated or implied in the forward-looking
statements.
You
should not rely upon forward-looking statements as predictions of
future events. Although we believe the expectations reflected in
the forward-looking statements are reasonable, we cannot guarantee
that the future results, levels of activity, performance and events
and circumstances reflected in the forward-looking statements will
be achieved or occur. Moreover, neither we nor any other person
assume responsibility for the accuracy and completeness of the
forward-looking statements. Except as
required by applicable law, including the securities laws of the
United States, we do not intend to update any of the
forward-looking statements to conform these statements to actual
results.
You
should read this prospectus, the documents referenced herein and
those documents filed as exhibits to the registration statement, of
which this prospectus is a part, with the understanding that our
actual future results, levels of activity, performance and
achievements may be materially different from what we
expect.
Unless otherwise provided in the applicable prospectus supplement,
we intend to use the net proceeds from the sale of
the securities under this prospectus primarily for working capital and general
corporate purposes, including sales and marketing
activities, product development and capital expenditures. We may
also use a portion of the net proceeds for the acquisition of, or
investment in, technologies, solutions or businesses. However, we
have no present commitments or agreements to enter into any
acquisitions or investments. Pending these uses, we may invest the
net proceeds from this offering in short-term, investment-grade
interest-bearing securities such as money market accounts,
certificates of deposit, commercial paper and guaranteed
obligations of the U.S. government. We cannot predict whether the
proceeds invested will yield a favorable return. Our management
will have broad discretion in the use of the net proceeds from this
offering, and investors will be relying on the judgment of our
management regarding the application of the net
proceeds
DESCRIPTION OF OUR
CAPITAL STOCK
General
Our Amended and Restated certificate of incorporation (our
“Charter”) authorizes the issuance of up to
100,000,000 shares of common stock, par value $0.001 per share, and
10,000,000 shares of preferred stock, par value $0.001 per
share.
Summary of Securities
The
following description summarizes certain terms of our capital
stock, including the number of shares of common stock that are
authorized for issuance under our Charter, and the authorization of
shares of preferred stock. Because the foregoing is only a summary,
it does not contain all the information that may be important to
you. For a complete description of the matters set forth in this
section you should refer to our Charter and Amended and Restated
Bylaws (our “Bylaws”), which are included as
exhibits to this prospectus,
and to the applicable provisions of Delaware law.
Common Stock
Our Amended and Restated Charter currently authorizes 100.0 million
shares of common stock for issuance. As of April 9, 2020, there
were 8,573,922 shares of our common stock issued and outstanding,
which were held by approximately 160 stockholders of record,
approximately 2,516,152 shares of common stock issuable upon
exercise of warrants to purchase our common stock, 985,596 shares
of common stock issuable upon exercise of options held, 286,671
shares of our common stock issuable upon the vesting of restricted
stock units held and 560,234 shares of common stock authorized and
available for issuance pursuant to our 2014 Plan. Each holder of
common stock is entitled to one vote for each share of common stock
held on all matters submitted to a vote of the stockholders,
including the election of directors. Neither our Charter or Bylaws
do not and will not provide for cumulative voting
rights.
Holders of our common stock have no preemptive, conversion or
subscription rights, and there are no redemption or sinking fund
provisions applicable to the common stock. The rights, preferences
and privileges of the holders of common stock are subject to, and
may be adversely affected by, the rights of the holders of shares
of any series of our preferred stock that we may designate and
issue in the future.
Preferred Stock
Under our Amended and Restated Charter, our Board of Directors has
the authority, without further action by our stockholders, to issue
up to 10.0 million shares of preferred stock in one or more series
and to fix the voting powers, designations, preferences and the
relative participating, optional or other special rights and
qualifications, limitations and restrictions of each series,
including, without limitation, dividend rights, dividend rates,
conversion rights, voting rights, terms of redemption, liquidation
preferences and the number of shares constituting any
series.
As of April 9, 2020, no shares of our authorized preferred stock
are outstanding. Because our Board of Directors has the power to
establish the preferences and rights of the shares of any
additional series of preferred stock, it may afford holders of any
preferred stock preferences, powers and rights, including voting
and dividend rights, senior to the rights of holders of our common
stock, which could adversely affect the holders of the common stock
and could delay, discourage or prevent a takeover of us even if a
change of control of our company would be beneficial to the
interests of our stockholders.
Anti-Takeover Matters
Charter and Bylaw Provisions
The
provisions of Delaware law, our Charter, and our Bylaws include a
number of provisions that may have the effect of delaying,
deferring, or discouraging another person from acquiring control of
our company and discouraging takeover bids. These provisions may
also have the effect of encouraging persons considering unsolicited
tender offers or other unilateral takeover proposals to negotiate
with our Board rather than pursue non-negotiated takeover attempts.
These provisions include the items described below.
Board Composition and Filling Vacancies
Our
Bylaws provide that any vacancy on our Board may only be filled by
the affirmative vote of a majority of our directors then in office,
even if less than a quorum. Further, any directorship vacancy
resulting from an increase in the size of our Board of Directors,
may be filled by election of the Board of Directors, but only for a
term continuing until the next election of directors by our
stockholders.
No Cumulative Voting
The
Delaware General Corporation Law (the “DGCL”) provides that stockholders
are not entitled to the right to cumulate votes in the election of
directors unless certificate of incorporation of the Company in
which they own stock provides otherwise. Neither our Charter nor
our Bylaws provide that our stockholders shall be entitled to
cumulative voting.
Delaware Anti-Takeover Statute
We are
subject to the provisions of Section 203 of the DGCL. In general,
Section 203 prohibits persons deemed
to be “interested stockholders” from engaging in a
“business combination” with a publicly held Delaware
corporation for three years following the date these persons become
interested stockholders unless the business combination is, or the
transaction in which the person became an interested stockholder
was, approved in a prescribed manner or another prescribed
exception applies. Generally, an “interested
stockholder” is a person who, together with affiliates and
associates, owns, or within three years prior to the determination
of interested stockholder status did own, 15% or more of a
corporation’s voting stock. Generally, a “business
combination” includes a merger, asset or stock sale, or other
transaction resulting in a financial benefit to the interested
stockholder. The existence of this provision may have an
anti-takeover effect with respect to transactions not approved in
advance by the Board. A Delaware corporation may “opt
out” of these provisions with an express provision in its
original certificate of incorporation or an express provision in
its certificate of incorporation or bylaws resulting from an
amendment approved by at least a majority of the outstanding voting
shares. We have not opted out of these provisions. As a result,
mergers or other takeover or change in control attempts of us may
be discouraged or prevented.
Choice of Forum
Our
Bylaws provide that Delaware will be the exclusive forum for any
derivative action or proceeding brought on our behalf; any action
asserting a breach of fiduciary duty; any action asserting a claim
against us arising pursuant to the DGCL, our Charter or our Bylaws;
or any action asserting a claim against us that is governed by the
internal affairs doctrine. The enforceability of similar choice of
forum provisions in other companies’ certificates of
incorporation has been challenged in legal proceedings, and it is
possible that a court could find these types of provisions to be
inapplicable or unenforceable.
Because the applicability of the exclusive forum provision is
limited to the extent permitted by law, we believe that the
exclusive forum provision would not apply to suits brought to
enforce any duty or liability created by the Securities Exchange
Act of 1934, as amended (the “Exchange
Act”), the
Securities Act of 1933, as amended (the “Securities
Act”), any other
claim for which the federal courts have exclusive jurisdiction
or concurrent
jurisdiction over all suits
brought to enforce any duty or liability created by the Securities
Act. We note that there is uncertainty as to whether a court would
enforce the provision and that investors cannot waive compliance
with the federal securities laws and the rules and regulations
thereunder. Although we believe this provision benefits us by
providing increased consistency in the application of Delaware law
in the types of lawsuits to which it applies, the provision may
have the effect of discouraging lawsuits against our directors and
officers.
Listing
Our common stock is listed on the Nasdaq Capital Market under the
symbol “SLGG.”
Transfer Agent and Registrar
Our transfer agent is Issuer Direct whose address is 1981 E. Murray Holladay Rd
#100, Salt Lake City, Utah 84117 and its telephone number is (801)
272-9294.
The following description, together with the additional information
we include in any applicable prospectus supplements or free writing
prospectus, summarizes the material terms and provisions of the
warrants that we may offer under this prospectus. Warrants may be
offered independently or together with common stock or preferred
stock offered by any prospectus supplement or free writing
prospectus, and may be attached to or separate from those
securities. While the terms we have summarized below will generally
apply to any future warrants we may offer under this prospectus, we
will describe the particular terms of any warrants that we may
offer in more detail in the applicable prospectus supplement or
free writing prospectus. The terms of any warrants we offer under a
prospectus supplement or free writing prospectus may differ from
the terms we describe below.
In the event that we issue warrants, we will issue the warrants
under a warrant agreement, which we will enter into with a warrant
agent to be selected by us. Forms of these warrant agreements and
forms of the warrant certificates representing the warrants, and
the complete warrant agreements and forms of warrant certificates
containing the terms of the warrants being offered, will be filed
as exhibits to the registration statement of which this prospectus
is a part or will be incorporated by reference from reports that we
file with the SEC. We use the term “warrant agreement”
to refer to any of these warrant agreements. We use the term
“warrant agent” to refer to the warrant agent under any
of these warrant agreements. The warrant agent will act solely as
an agent of ours in connection with the warrants and will not act
as an agent for the holders or beneficial owners of the
warrants.
The following summaries of material provisions of the warrants and
the warrant agreements are subject to, and qualified in their
entirety by reference to, all the provisions of the warrant
agreement applicable to a particular series of warrants. We urge
you to read the applicable prospectus supplements or free writing
prospectus related to the warrants that we sell under this
prospectus, as well as the complete warrant agreements that contain
the terms of the warrants.
General
We will describe in the applicable prospectus supplement or free
writing prospectus the terms relating to a series of warrants. If
warrants for the purchase of common stock or preferred stock are
offered, the prospectus supplement or free writing prospectus will
describe the following terms, to the extent
applicable:
●
the
offering price and the aggregate number of warrants
offered;
●
the
total number of shares that can be purchased if a holder of the
warrants exercises them and, in the case of warrants for preferred
stock, the designation, total number and terms of the series of
preferred stock that can be purchased upon exercise;
●
the
designation and terms of any series of preferred stock with which
the warrants are being offered and the number of warrants being
offered with each share of common stock or preferred
stock;
●
the
date on and after which the holder of the warrants can transfer
them separately from the related common stock;
●
the
number of shares of common stock or preferred stock that can be
purchased if a holder exercises the warrant and the price at which
such common stock or preferred stock may be purchased upon
exercise, including, if applicable, any provisions for changes to
or adjustments in the exercise price and in the securities or other
property receivable upon exercise;
●
the
terms of any rights to redeem or call, or accelerate the expiration
of, the warrants;
●
the
date on which the right to exercise the warrants begins and the
date on which that right expires;
●
federal
income tax consequences of holding or exercising the warrants;
and
●
any
other specific terms, preferences, rights or limitations of, or
restrictions on, the warrants.
Exercise of Warrants
Each holder of a warrant is entitled to purchase the number of
shares of common stock or preferred stock, as the case may be, at
the exercise price described in the applicable prospectus
supplement or free writing prospectus. After the close of business
on the day when the right to exercise terminates (or a later date
if we extend the time for exercise), unexercised warrants will
become void.
A holder of warrants may exercise them by following the general
procedure outlined below:
●
delivering
to the warrant agent the payment required by the applicable
prospectus supplement or free writing prospectus to purchase the
underlying security;
●
properly
completing and signing the reverse side of the warrant certificate
representing the warrants; and
●
delivering
the warrant certificate representing the warrants to the warrant
agent within five business days of the warrant agent receiving
payment of the exercise price.
If you comply with the procedures described above, your warrants
will be considered to have been exercised when the warrant agent
receives payment of the exercise price, subject to the transfer
books for the securities issuable upon exercise of the warrant not
being closed on such date. After you have completed those
procedures and subject to the foregoing, we will, as soon as
practicable, issue and deliver to you the shares of common stock or
preferred stock that you purchased upon exercise. If you exercise
fewer than all of the warrants represented by a warrant
certificate, a new warrant certificate will be issued to you for
the unexercised amount of warrants. Holders of warrants will be
required to pay any tax or governmental charge that may be imposed
in connection with transferring the underlying securities in
connection with the exercise of the warrants.
Amendments and Supplements to the Warrant Agreements
We may amend or supplement a warrant agreement without the consent
of the holders of the applicable warrants to cure ambiguities in
the warrant agreement, to cure or correct a defective provision in
the warrant agreement, or to provide for other matters under the
warrant agreement that we and the warrant agent deem necessary or
desirable, so long as, in each case, such amendments or supplements
do not materially adversely affect the interests of the holders of
the warrants.
Warrant Adjustments
Unless the applicable prospectus supplement or free writing
prospectus states otherwise, the exercise price of, and the number
of securities covered by, a common stock or a preferred stock
warrant will be adjusted proportionately if we subdivide or combine
our common stock or preferred stock, as applicable. In addition,
unless the prospectus supplement or free writing prospectus states
otherwise, if we, without receiving payment:
●
issue
capital stock or other securities convertible into or exchangeable
for common stock or preferred stock, or any rights to subscribe
for, purchase or otherwise acquire any of the foregoing, as a
dividend or distribution to holders of our common stock or
preferred stock;
●
pay
any cash to holders of our common stock or preferred stock other
than a cash dividend paid out of our current or retained earnings
or other than in accordance with the terms of the preferred
stock;
●
issue
any evidence of our indebtedness or rights to subscribe for or
purchase our indebtedness to holders of our common stock or
preferred stock; or
●
issue
common stock or preferred stock or additional stock or other
securities or property to holders of our common stock or preferred
stock by way of spinoff, split-up, reclassification, combination of
shares or similar corporate rearrangement,
then the holders of common stock or preferred stock warrants will
be entitled to receive upon exercise of the warrants, in addition
to the securities otherwise receivable upon exercise of the
warrants and without paying any additional consideration, the
amount of stock and other securities and property such holders
would have been entitled to receive had they held the common stock
or preferred stock, as applicable, issuable under the warrants on
the dates on which holders of those securities received or became
entitled to receive such additional stock and other securities and
property.
Except as stated above or as otherwise set forth in the applicable
prospectus supplement or free writing prospectus, the exercise
price and number of securities covered by a common stock or
preferred stock warrant, and the amounts of other securities or
property to be received, if any, upon exercise of such warrant,
will not be adjusted or provided for if we issue those securities
or any securities convertible into or exchangeable for those
securities, or securities carrying the right to purchase those
securities or securities convertible into or exchangeable for those
securities.
Holders of common stock and preferred stock warrants may have
additional rights under the following circumstances:
●
certain
reclassifications, capital reorganizations or changes of the common
stock or preferred stock, as applicable;
●
certain
share exchanges, mergers, or similar transactions involving us and
which result in changes of the common stock or preferred stock, as
applicable; or
●
certain
sales or dispositions to another entity of all or substantially all
of our property and assets.
If one of the above transactions occurs and holders of our common
stock or preferred stock are entitled to receive stock, securities
or other property with respect to or in exchange for their
securities, the holders of the common stock warrants and preferred
stock warrants then outstanding, as applicable, will be entitled to
receive, upon exercise of their warrants, the kind and amount of
shares of stock and other securities or property that they would
have received upon the applicable transaction if they had exercised
their warrants immediately before the transaction.
This section outlines some of the provisions of the units and the
unit agreements. This information may not be complete in all
respects and is qualified entirely by reference to the unit
agreement with respect to the units of any particular series. The
specific terms of any series of units will be described in the
applicable prospectus supplement or free writing prospectus. If so
described in a particular prospectus supplement or free writing
prospectus, the specific terms of any series of units may differ
from the general description of terms presented below.
As specified in the applicable prospectus supplement, we may issue
units consisting of one or more shares of common stock, shares of
our preferred stock, warrants or any combination of such
securities.
The applicable prospectus supplement will specify the following
terms of any units in respect of which this prospectus is being
delivered:
●
the
terms of the units and of any of the shares of common stock, shares
of preferred stock, or warrants comprising the units, including
whether and under what circumstances the securities comprising the
units may be traded separately;
●
a
description of the terms of any unit agreement governing the
units;
●
if
appropriate, a discussion of material U.S. federal income tax
considerations; and
●
a
description of the provisions for the payment, settlement, transfer
or exchange of the units.
DESCRIPTION OF CERTAIN PROVISIONS OF DELAWARE LAW
AND
OUR CERTIFICATE OF INCORPORATION AND BYLAWS
Certain provisions of Delaware law, our Charter and Bylaws
discussed below may have the effect of making more difficult or
discouraging a tender offer, proxy contest or other takeover
attempt. These provisions are expected to encourage persons seeking
to acquire control of our company to first negotiate with our Board
of Directors. We believe that the benefits of increasing our
ability to negotiate with the proponent of an unfriendly or
unsolicited proposal to acquire or restructure our company outweigh
the disadvantages of discouraging these proposals because
negotiation of these proposals could result in an improvement of
their terms.
Delaware Anti-Takeover Law.
We are subject to Section 203 of the Delaware General
Corporation Law. Section 203 generally prohibits a public
Delaware corporation from engaging in a “business
combination” with an “interested stockholder” for
a period of three years after the date of the transaction in which
the person became an interested stockholder, unless:
●
prior
to the date of the transaction, the Board of Directors of the
corporation approved either the business combination or the
transaction which resulted in the stockholder becoming an
interested stockholder;
●
upon
consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding
specified shares; or
●
at
or subsequent to the date of the transaction, the business
combination is approved by the Board of Directors and authorized at
an annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 66 2/3% of the
outstanding voting stock which is not owned by the interested
stockholder.
Section 203 defines a “business combination” to
include:
●
any
merger or consolidation involving the corporation and the
interested stockholder;
●
any
sale, lease, exchange, mortgage, pledge, transfer or other
disposition of 10% or more of the assets of the corporation to or
with the interested stockholder;
●
subject
to exceptions, any transaction that results in the issuance or
transfer by the corporation of any stock of the corporation to the
interested stockholder;
●
subject
to exceptions, any transaction involving the corporation that has
the effect of increasing the proportionate share of the stock of
any class or series of the corporation beneficially owned by the
interested stockholder; or
●
the
receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided
by or through the corporation.
In general, Section 203 defines an “interested
stockholder” as any person that is:
●
the
owner of 15% or more of the outstanding voting stock of the
corporation;
●
an
affiliate or associate of the corporation who was the owner of 15%
or more of the outstanding voting stock of the corporation at any
time within three years immediately prior to the relevant date;
or
●
the
affiliates and associates of the above.
Under specific circumstances, Section 203 makes it more
difficult for an “interested stockholder” to effect
various business combinations with a corporation for a three-year
period, although the stockholders may, by adopting an amendment to
the corporation’s certificate of incorporation or bylaws,
elect not to be governed by this section, effective 12 months after
adoption.
Our Charter and Bylaws do not exclude us from the restrictions of
Section 203. We anticipate that the provisions of
Section 203 might encourage companies interested in acquiring
us to negotiate in advance with our Board of Directors since the
stockholder approval requirement would be avoided if a majority of
the directors then in office approve either the business
combination or the transaction that resulted in the stockholder
becoming an interested stockholder.
Charter and Bylaws.
Provisions of our Charter and Bylaws may delay or discourage
transactions involving an actual or potential change of control or
change in our management, including transactions in which
stockholders might otherwise receive a premium for their shares, or
transactions that our stockholders might otherwise deem to be in
their best interests. Therefore, these provisions could adversely
affect the price of our common stock.
We may sell the securities described in this prospectus to or
through underwriters or dealers, through agents, or directly to one
or more purchasers. A prospectus supplement or supplements (and any
related free writing prospectus that we may authorize to be
provided to you) will describe the terms of the offering of the
securities, including, to the extent applicable:
●
the
name or names of any underwriters or agents, if
applicable;
●
the
purchase price of the securities and the proceeds we will receive
from the sale;
●
any
over-allotment options under which underwriters may purchase
additional securities from us;
●
any
agency fees or underwriting discounts and other items constituting
agents’ or underwriters’ compensation;
●
any
public offering price;
●
any
discounts or concessions allowed or reallowed or paid to dealers;
and
●
any
securities exchange or market on which the securities may be
listed.
We may also sell equity securities covered by this registration
statement in an “at the market offering” as defined in
Rule 415 under the Securities Act. Such offering may be made into
an existing trading market for such securities in transactions at
other than a fixed price, either:
●
On
or through the facilities of the Nasdaq Capital Market or any other
securities exchange or quotation or trading service on which such
securities may be listed, quoted or traded at the time of sale;
and/or
●
to
or through a market maker otherwise than on the Nasdaq Capital
Market or such other securities exchanges or quotation or trading
services.
Such at-the-market offerings, if any, may be conducted by
underwriters acting as principal or agent.
Only underwriters named in a prospectus supplement are underwriters
of the securities offered by the prospectus
supplement.
If underwriters are used in the sale, they will acquire the
securities for their own account and may resell the securities from
time to time in one or more transactions at a fixed public offering
price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase the securities will be
subject to the conditions set forth in the applicable underwriting
agreement. We may offer the securities to the public through
underwriting syndicates represented by managing underwriters or by
underwriters without a syndicate. Subject to certain conditions,
the underwriters will be obligated to purchase all of the
securities offered by the prospectus supplement. Any public
offering price and any discounts or concessions allowed or
reallowed or paid to dealers may change from time to time. We may
use underwriters with whom we have a material relationship. We will
describe in the prospectus supplement that names the underwriter,
the nature of any such relationship.
We may sell securities directly or through agents we designate from
time to time. We will name any agent involved in the offering and
sale of securities, and we will describe any commissions we will
pay the agent in the prospectus supplement. Unless the prospectus
supplement states otherwise, our agent will act on a best-efforts
basis for the period of its appointment.
We may authorize agents or underwriters to solicit offers by
certain types of institutional investors to purchase securities
from us at the public offering price set forth in the prospectus
supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. We will
describe the conditions to these contracts and the commissions we
must pay for solicitation of these contracts in the prospectus
supplement.
We may provide agents and underwriters with indemnification against
civil liabilities related to this offering, including liabilities
under the Securities Act, or contribution with respect to payments
that the agents or underwriters may make with respect to these
liabilities. Agents and underwriters may engage in transactions
with, or perform services for, us in the ordinary course of
business.
Any underwriter may engage in overallotment, stabilizing
transactions, short covering transactions and penalty bids in
accordance with Regulation M under the Securities Exchange Act of
1934, as amended (the “Exchange
Act”). Overallotment
involves sales in excess of the offering size, which create a short
position. Stabilizing transactions permit bids to purchase the
underlying security so long as the stabilizing bids do not exceed a
specified maximum. Short covering transactions involve purchases of
the securities in the open market after the distribution is
completed to cover short positions. Penalty bids permit the
underwriters to reclaim a selling concession from a dealer when the
securities originally sold by the dealer are purchased in a
covering transaction to cover short positions. Those activities may
cause the price of the securities to be higher than it would
otherwise be. If commenced, the underwriters may discontinue any of
the activities at any time.
Any underwriters who are qualified market makers on the Nasdaq
Capital Market may engage in passive market making transactions in
accordance with Rule 103 of Regulation M during the business day
prior to the pricing of the offering, before the commencement of
offers or sales of the securities. Passive market makers must
comply with applicable volume and price limitations and must be
identified as passive market makers. In general, a passive market
maker must display its bid at a price not in excess of the highest
independent bid for such security; if all independent bids are
lowered below the passive market maker’s bid, however, the
passive market maker’s bid must then be lowered when certain
purchase limits are exceeded.
Executive Officers and Directors
The following table sets forth the names, ages, and positions of
our executive officers, directors and significant employees as of
the date of this prospectus.
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
|
|
Executive Officers and Directors:
|
|
|
|
|
|
|
|
|
Ann
Hand
|
|
51
|
|
Chief
Executive Officer, President, Chair of the Board
|
|
David
Steigelfest
|
|
52
|
|
Chief
Product Officer, Director
|
|
Clayton
Haynes
|
|
50
|
|
Chief
Financial Officer
|
|
Matt
Edelman
|
|
50
|
|
Chief
Commercial Officer
|
|
Samir
Ahmed
|
|
42
|
|
Chief
Technology Officer
|
|
Jeff
Gehl
|
|
51
|
|
Director
|
|
Kristin
Patrick
|
|
49
|
|
Director
|
|
Michael
Keller
|
|
49
|
|
Director
|
|
Mark
Jung
|
|
57
|
|
Director
|
|
|
|
|
|
|
|
Significant Employees:
|
|
|
|
|
|
|
|
|
|
|
|
Andy
Babb
|
|
51
|
|
Executive
Vice President of Game Partnerships
|
|
Anne
Gailliot
|
|
44
|
|
Chief
of Staff, Vice President of Special Projects
|
|
There are no arrangements or understandings between our Company and
any other person pursuant to which he or she was or is to be
selected as a director, executive officer or nominee. Ms. Hand, our
President and Chief Executive Officer, is a first cousin of Mr.
Gehl, a member of our Board. There are no other family
relationships among any of our directors or executive officers. To
the best of our knowledge, none of our directors or executive
officers have, during the past ten years, been involved in any
legal proceedings described in Item 401(f) of Regulation
S-K.
Executive Officers
Ann Hand
Chief Executive Officer, President, Chair of the Board
Ms.
Hand has served as our Chief Executive Officer, President and Chair
of our Board since June 2015. Over the past 20 years, Ms. Hand has
served as a market-facing executive with a track record in brand
creation and turn- around with notable delivery at the intersection
of social impact with consumer trends and technology to create bold
offers, drive consumer preference and deliver bottom line results.
Prior to joining the Company, from 2009 to 2015, Ms. Hand served as
Chief Executive Officer and as a director of Project Frog, a
venture-backed firm with a mission to democratize healthy, inspired
buildings that are better, faster, greener, and more affordable
than traditional construction. From 1998 through 2008, Ms. Hand
served in various senior executive positions with BP plc, including
Senior Vice President, Global Brand Marketing & Innovation from
2005 to 2008, during which time she led many award-winning
integrated marketing campaigns and oversaw the entire brand
portfolio of B2C and B2B brands, including BP, Castrol, Arco, am/pm
and Aral. Additionally, she served as Chief Executive, Global
Liquefied Gas Business Unit with full P&L accountability across
15 countries and 3,000 staff, covering operations, logistics, sales
and marketing with over $3 billion in annual revenue. Ms. Hand was
recognized by Goldman Sachs - “100 Most Intriguing
Entrepreneurs” in 2014, by Fortune - “Top 10 Most
Powerful Women Entrepreneurs” in 2013, and Fast Company
– “100 Most Creative People” in 2011. Ms. Hand
earned a Bachelor of Arts in Economics from DePauw University, an
MBA from Northwestern’s Kellogg School of Management, and
completed executive education at Cambridge, Harvard and Stanford
Universities.
David Steigelfest
Chief Product Officer, Director
Mr.
Steigelfest co-founded the Company in 2014 and has served as a
director on our Board since that time. In addition, Mr. Steigelfest
served has our Chief Product Officer since May 2018. An attorney by
education, David has served as an executive and entrepreneur in the
digital and technology space for more than 20 years. Prior to
co-founding the Company in 2014, Mr. Steigelfest founded rbidr LLC,
a media and technology startup and a pioneer in yield management
and price optimization software, where he served as Chief Executive
Officer from 2008 to 2013. From 2013 to 2014, Mr. Steigelfest
worked for Cosi Consulting, where he provided management consulting
services ranging from complex project management, PMO, software
design, 3rd party software integration and migration, enterprise
content management, data management and system-based regulatory
compliance to various Fortune 500 companies. From 2001 to 2008, Mr.
Steigelfest worked on Wall Street at Deutsche Bank, where he
oversaw various multi-million-dollar change management projects. In
addition, Mr. Steigelfest previously served as Vice President of
eCommerce at Starguide Digital Networks, where he had
responsibility over the streaming media portal, CoolCast. CoolCast
utilized satellite technology to distribute high quality streaming
content into multi-cast enabled networks bypassing Internet
bottlenecks. Prior to Starguide, Mr. Steigelfest served as the
Director of Product Management at Gateway Computers, where he
oversaw Gateway.com and Gateway’s business-to-business
extranet system, eSource. In addition, Mr. Steigelfest has
consulted for companies of all sizes throughout his career
addressing a wide variety of IT and business challenges, including
complex business process change, software implementation and
e-commerce. Mr. Steigelfest received a Bachelor of Arts in
International Relations and Psychology from Syracuse University,
and a JD with an emphasis in business transactions and business law
from Widener University School of Law.
Clayton Haynes
Chief Financial Officer
Mr. Haynes was appointed as our Chief Financial Officer in August
2018. From 2001 to August 2018, Mr. Haynes served as Chief
Financial Officer, Senior Vice President of Finance and Treasurer
of Acacia Research Corporation (NASDAQ: ACTG), an industry-leading intellectual
property licensing and enforcement and technology investment
company. From 1992 to March 2001, Mr. Haynes was employed by
PricewaterhouseCoopers LLP, ultimately serving as a Manager in the
Audit and Business Advisory Services practice, where he provided
and managed full scope financial statement audit and business
advisory services for public and private company clients with
annual revenues up to $1 billion in a variety of sectors, including
manufacturing, distribution, oil and gas, engineering, aerospace
and retail. Mr. Haynes received a Bachelor of Arts in
Economics and Business/Accounting from the University of California
at Los Angeles, an MBA from the University of California at Irvine
Paul Merage School of Business and is a Certified Public Accountant
(Inactive).
Matt Edelman
Chief Commercial Officer
Mr.
Edelman oversees the Company’s revenue, marketing, content,
creative services and business development activities, and has
served as our Chief Commercial Officer since July 2017. Mr. Edelman
is the owner of PickTheBrain, a leading digital self-improvement
business, a board member and marketing committee member of the
Epilepsy Foundation of Greater Los Angeles and has over 20 years of
experience working in the digital and traditional media and
entertainment industries. Since 2001, he has served as an advisor
and consultant to numerous digital and media companies, including,
amongst others, Nike, Marvel, MTV, Sony Pictures, 20th Century Fox
and TV Guide. Prior to joining the Company, from 2014 to 2017, Mr.
Edelman served as the Head of Digital Operations and Marketing
Solutions at WME-IMG (now Endeavor), where he was responsible for
several areas, including digital audience and revenue growth
through content, social media and paid customer acquisition across
the company’s global live events business within sports,
fashion culinary and entertainment verticals; digital marketing
services for consumer brands, college athletics programs and
talent; and management of direct-to-consumer digital content
businesses, including both eSports and Fashion OTT properties. From
2010 to 2013, Mr. Edelman served as the Chief Executive Officer of
Glossi (previously ThisNext), an authoring platform enabling
individuals to create their own digital magazines. Previously, Mr.
Edelman also founded and/or served in executive positions at
multiple early stage digital media companies. Mr. Edelman earned a
Bachelor of Arts in Politics from Princeton
University.
Samir Ahmed
Chief Technology Officer
Mr. Ahmed was appointed as Chief Technology Officer in July 2019.
Mr. Ahmed served as Head of Consumer Technology from
February 2018 to July 2019 for IMDb, an Amazon company that is an
authoritative website about movies, television and celebrities. In
addition, from February 2016 to February 2018, Mr. Ahmed served as
Chief Architect and Vice President of Technology at Fandango, where
he led the acquisition transition and rebranding of M-GO to
FandangoNOW, and from August 2014 to February 2016, he served as
Chief Technology Officer of M-GO prior to its acquisition by
Fandango. Mr. Ahmed holds a master’s degree in computer
science applied to business services from the University of Rennes
1.
Board of Directors
Ann Hand
Chief Executive Officer, President, Chair of the Board
Please
see Ms. Hand’s biography in the preceding section under the
heading “Executive
Officers.”
Ms. Hand’s extensive background in corporate leadership and
her practical experience in brand creation and turn- around
directly align with the Company’s focus, and ideally position
her to make substantial contributions to the Board, both as Chair
of the Board and as the leader of the Company’s executive
team.
David Steigelfest
Chief Product Officer, Director
Please
see Mr. Steigelfest’s biography in the preceding section
under the heading “Executive
Officers.”
As a co-founder of the Company and a lead developer of the
Company’s platform, Mr. Steigelfest provides the Board with
critical insight into the technological aspects of the
Company’s operations and the ongoing development of the
platform, attributes that make Mr. Steigelfest a particularly
valued member of the Board.
Jeff Gehl
Independent Director
Mr.
Gehl has served as a director on our Board since 2015. Mr. Gehl is
a Co-Owner at VLOC LLC. Since 2001, Mr. Gehl has been a Managing
Partner of RCP Advisors. Mr. Gehl is responsible for leading RCP's
client relations function and covering private equity fund managers
in the Western United States. He is a General Partner of BKM
Capital Partners, L.P. Previously, Mr. Gehl was an Advisor at
Troy Capital Partners until 2018. In addition, Mr. Gehl founded and
served as Chairman and Chief Executive Officer of MMI, a technical
staffing company, and acquired Big Ballot, Inc., a sports marketing
firm. He currently serves as a Director of P10 Industries, Inc., a
Director of Veritone, Inc. (NASDAQ: VERI) and an Advisory Board
member of several of RCP’s underlying funds, as well as
Accel-KKR and Seidler Equity Partners. Mr. Gehl was the Manager of
VLOC. Mr. Gehl received the 1989 “Entrepreneur of the
Year” award from University of Southern California’s
Entrepreneur Program. He obtained a Bachelor of Science in Business
Administration from the University of Southern California's
Entrepreneur Program.
Mr. Gehl’s wide range of experience in
financing,
developing and managing high-growth technology companies, as well
as his entrepreneurial experience, has considerably broadened the Board’s
perspective, particularly as the Company engaged in capital raising
activities to fund the early stages of its development. Mr. Gehl
also serves as our Board-designated “audit committee
financial expert,” as the Chair of the Board’s Audit
Committee and as a member of the Nominating and Corporate
Governance Committee.
Kristin Patrick
Independent Director
Ms.
Patrick has served as a director on our Board since November 2018,
and currently serves as Global Chief Marketing Officer of Soda
Brand at Pepsico, Inc., a position she has held since June 2013.
Prior to her time with Pepsico, Inc., Ms. Patrick served as Chief
Marketing Officer of Playboy Enterprises, Inc. from November 2011
to June 2013, and as Executive Vice President of Marketing Strategy
for William Morris Endeavor from January 2010 to November 2011. Ms.
Patrick has also held senior marketing positions at Liz
Claiborne's Lucky Brand, Walt Disney Company, Calvin Klein, Revlon
and NBC Universal and Gap, Inc. A Brandweek "Next Gen Marketer" and
Reggie Award recipient, Ms. Patrick received her Bachelor of Arts
from Emerson College and J.D. from Southwestern
University.
As we
continue to expand the visibility of our Brand, we believe Ms.
Patrick will provide instrumental input on our marketing efforts,
and will assist the Board and management with initiating marketing
programs to enable us to meet our short-term and long-term growth
objectives. Ms. Patrick also serves as a member of the
Board’s Compensation Committee and the Nominating and
Corporate Governance Committee.
Michael Keller
Independent Director
Mr.
Keller has served as a director on our Board since November 2018.
From July 2014 to February 2018, Mr. Keller served as an advisor
and board member for Cake Entertainment, an independent
entertainment company specializing in the production, distribution,
development, financing and brand development of kids’ and
family properties, as managing director of Tiedemann Wealth
Management from March 2008 to December 2013, as co-founder and
principal of Natrica USA, LLC from August 2006 to March 2008 and as
Senior Vice President of Brown Brothers Harriman Financial Services
from July 1996 to June 2006. Mr. Keller earned his Bachelors of
Arts in History from Colby College.
With
over 15 years of experience in asset and portfolio management, and
experience in helping companies gain exposure for their products
and services, including in the entertainment industry, we believe
Mr. Keller provides our Board with useful insight that will help us
as we allocate resources to expand the utility of our platform and
other technologies. Mr. Keller also serves as Chair of the
Board’s Nominating and Corporate Governance Committee and as
a member of the Audit Committee and the Compensation
Committee.
Mark Jung
Independent Director
Mr. Jung has served as a director on our Board since July
2019. Mr. Jung currently serves as an
independent consultant to multiple media and technology companies.
Previously, Mr. Jung served on the board of directors of Accela, a
leading provider of cloud-based productivity and civic engagement
solutions for government, from March 2016 to April 2019. During his
tenure on the board of Accel, Mr. Jung also held executive
management positions for Accela, including as Chairman and interim
Chief Executive Officer from August 2016 to March 2017 and from
April 2018 to October 2018, as well as serving as Executive
Chairman from March 2017 to April 2018. Prior to Accela, Mr. Jung
served as Executive Chairman of OL2, a leading cloud solutions
provider for gaming and graphics-rich applications, from May 2013
to March 2015. Currently, Mr. Jung serves as a member of the
board of directors of Millennium Trust Company, a leading financial
services company offering niche alternative custody solutions to
institutions, advisors and individuals; lnMar, a provider of
intelligent commerce network solutions; Samba Safety, a provider of
driver risk management solutions; and ReadyUp, a provider of an
esports platform for player networking and team management.
Mr. Jung graduated with a BS in engineering from Princeton
University and received his MBA from Stanford University Graduate
School of Business.
With over three decades of experience serving as a C-suite
executive at several prominent companies within the digital
entertainment and video game industries, and extensive public and
private board member experience, we believe Mr. Jung provides our
Board with invaluable knowledge and insight regarding key
strategies and best practices for building gaming communities and
creating a demand for gaming-related content in the market that can
accelerate our audience development and content monetization
strategies, and will also share key learnings with Super League
gained from his experience navigating the transition of companies
from private to public. Mr.
Jung also serves as Chair of the Board’s Compensation
Committee and as a member of the Audit
Committee.
Significant Employees
Andy Babb
Executive Vice President of Game Partnerships
Mr.
Babb overseas the Company’s game strategy and publisher and
developer relationships and has served as our Executive Vice
President of Game Partnerships since September 2015. Prior to
joining the Company, from 2007 to 2015, Mr. Babb served as
President of Brandissimo, Inc., the company that created and
developed NFL RUSH, including NFL RUSH Zone, a multiplayer online
virtual game world, and over 100 NFL video games and apps. From
2006 to 2007, Mr. Babb served as the President of Infusio-NA, a
French mobile video game publisher, and for ten years prior to
that, he managed business development for Take Two Interactive, 2K
Games and SegaSoft. Throughout his career, Mr. Babb has published
over 200 video games across console, handheld, PC, online and
mobile platforms. He earned a Bachelor of Arts in Communications
Studies from the University of California Los Angeles and an MBA
from Stanford University.
Anne Gailliot
Chief of Staff, Vice President of Special Projects
Ms.
Gailliot has served as our Chief of Staff since July 2015, as well
as our Vice President of Special Projects since 2016. She provides
oversight to strategic programs and partnerships, ranging from
theatre relationships, the development of a national contracted
workforce, our after-school programs, and end-to-end live event
execution. Prior to joining the Company, Ms. Gailliot served as
Chief of Staff of Project Frog from 2007 to 2015, where she led
strategic and financial planning and supported supply chain
optimization. Before pursuing a graduate degree, Anne spent several
years at the National Trust for Historic Preservation managing
grant programs, community advocacy efforts, and local leadership
development initiatives for the western region. Ms. Gailliot earned
a Bachelor of Arts in Art History from Princeton University and an
MBA from University of Pennsylvania – the Wharton
School.
Board Composition and Election of Directors
Board Composition
Our
Board currently consists of six members. Each of our continuing
directors will serve until our next annual meeting of stockholders
or until his or her successor is elected and duly qualified. Our
Board is authorized to appoint persons to the offices of Chair of
the Board of Directors, Vice Chair of the Board of Directors, Chief
Executive Officer, President, one or more Vice Presidents, Chief
Financial Officer, Treasurer, one or more Assistant Treasurers,
Secretary, one or more Assistant Secretaries, and such other
officers as may be determined by the Board. The Board may also
empower the Chief Executive Officer, or in absence of a Chief
Executive Officer, the President, to appoint such other officers
and agents as our business may require. Any number of offices can
be held by the same person.
Director Independence
Our
Board has determined that four of its directors qualify as
independent directors, as determined in accordance with the rules
of the Nasdaq Stock Market, consisting of Ms. Patrick and Messrs.
Gehl, Keller and Jung. Under the applicable listing requirements of
the Nasdaq Capital Market, we are permitted to phase in our
compliance with the majority independent board requirement of the
Nasdaq Stock Market rules within one year of our listing on Nasdaq.
The director independence definition under the Nasdaq Stock Market
rule includes a series of objective tests, including that the
director is not, and has not been for at least three years, one of
our employees and that neither the director nor any of his family
members has engaged in various types of business dealings with us.
In addition, as required by Nasdaq Stock Market rules, our Board
has made a subjective determination as to each independent director
that no relationships exist, which, in the opinion of our Board,
would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director. In making these
determinations, our Board reviewed and discussed information
provided by the directors and us with regard to each
director’s business and personal activities and relationships
as they may relate to us and our management.
Ms. Hand, our President and Chief Executive Officer, is a first
cousin of Mr. Gehl, a member of our Board. There are no other
family relationships among any of our directors or executive
officers.
Role of Board in Risk Oversight Process
Our
Board has responsibility for the oversight of the Company’s
risk management processes and, either as a whole or through its
committees, regularly discusses with management our major risk
exposures, their potential impact on our business, and the steps we
take to manage them. The risk oversight process includes receiving
regular reports from Board committees and members of senior
management to enable our Board to understand our risk
identification, risk management and risk mitigation strategies with
respect to areas of potential material risk, including operations,
finance, legal, regulatory, strategic and reputational risk.
Cybersecurity risk is a key consideration in our operational risk
management capabilities. We are in the process of instituting a
formal information security management program, which will be
subject to oversight by, and reporting to, our Board. Given the
nature of our operations and business, cybersecurity risk may
manifest itself through various business activities and channels
and is thus considered an enterprise-wide risk which is subject to
control and monitoring at various levels of management throughout
the business. Our Board will oversee and review reports on
significant matters of corporate security, including cybersecurity.
In addition, we maintain specific cyber insurance through our
corporate insurance program, the adequacy of which is subject to
review and oversight by our Board.
Our
audit committee reviews information regarding liquidity and
operations and oversees our management of financial risks.
Periodically, our audit committee reviews our policies with respect
to risk assessment, risk management, loss prevention and regulatory
compliance. Oversight by the audit committee includes direct
communication with our external auditors, and discussions with
management regarding significant risk exposures and the actions
management has taken to limit, monitor or control such exposures.
Our compensation committee is responsible for assessing whether any
of our compensation policies or programs has the potential to
encourage excessive risk-taking. Matters of significant strategic
risk are considered by our Board as a whole.
Board Committees and Independence
Our
Board has established the following three standing committees:
audit committee, compensation committee, and nominating and
governance committee. Our Board has adopted written charters for
each of these committees. Upon completion of this offering, we
intend to make each committee’s charter available under the
Corporate Governance section of our website at
www.superleague.com/corporategovernance. The reference to our
website address does not constitute incorporation by reference of
the information contained at or available through our website, and
you should not consider it to be a part of this
prospectus.
Audit Committee
Our
audit committee is currently comprised of Jeff Gehl, who serves as
the committee chair, Michael Keller and Mark Jung, each of whom are
independent directors as determined in accordance with the rules of
the Nasdaq Stock Market. The audit committee’s main function
is to oversee our accounting and financial reporting processes and
the audits of our financial statements. Pursuant to its charter,
the audit committee’s responsibilities include, among other
things:
●
|
appointing, compensating, retaining, evaluating, terminating, and
overseeing our independent registered public accounting firm
;
|
●
|
reviewing with our independent registered public accounting firm
the scope and results of their audit;
|
●
|
approving
the audit and non-audit services to be performed by our independent
registered public accounting firm;
|
●
|
evaluating
the qualifications, independence and performance of our independent
registered public accounting firm;
|
●
|
reviewing
the design, implementation, adequacy and effectiveness of our
internal accounting controls and our critical accounting
policies;
|
●
|
reviewing
and discussing our annual audited financial statements and
quarterly financial statements with management and the independent
auditor, including our disclosures under “Management’s Discussion and Analysis of
Financial Condition and Results of Operations ,” prior
to the release of such information;
|
●
|
reviewing
and reassessing the adequacy of the audit committee’s
charter, at least annually;
|
●
|
reviewing,
overseeing and monitoring the integrity of our financial statements
and our compliance with legal and regulatory requirements as they
relate to financial statements or accounting matters;
|
●
|
reviewing
on a periodic basis, or as appropriate, our policies with respect
to risk assessment and management, and our plan to monitor, control
and minimize such risks and exposures, with the independent public
accountants, internal auditors, and management;
|
●
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reviewing
any earnings announcements and other public announcements regarding
our results of operations;
|
●
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preparing
the report that the SEC requires in our annual proxy statement,
upon becoming subject to the Exchange Act;
|
●
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complying
with all preapproval requirements of Section 10A(i) of the Exchange
Act and all SEC rules relating to the administration by the audit
committee of the auditor engagement to the extent necessary to
maintain the independence of the auditor as set forth in 17 CFR
Part 210.2-01(c)(7);
|
●
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administering
the policies and procedures for the review, approval and/or
ratification of related party transactions involving the Company or
any of its subsidiaries; and
|
●
|
making
such other recommendations to the Board on such matters, within the
scope of its function, as may come to its attention and which in
its discretion warrant consideration by the Board.
|
Our
Board has affirmatively determined that all members of our audit
committee meet the requirements for independence and financial
literacy under the applicable rules and regulations of the SEC and
the Nasdaq Stock Market. Our Board has determined that Mr. Gehl
qualifies as an “audit committee financial expert” as
defined by applicable SEC rules and has the requisite financial
sophistication as defined under the applicable Nasdaq Stock Market
rules and regulations. The audit committee operates under a written
charter that satisfies the applicable standards of the SEC and the
Nasdaq Stock Market.
Compensation Committee
Our compensation committee is currently comprised of Mark Jung, who
serves as the committee chair, Kristin Patrick and Michael
Keller, each of whom are independent
directors as determined in accordance with the rules of the Nasdaq
Stock Market. The compensation committee’s main
function is to assist our Board in the discharge of its
responsibilities related to the compensation of our executive
officers. Pursuant to its charter, the
compensation committee is primarily responsible for, among other
things:
●
|
reviewing our compensation programs and arrangements applicable to
our executive officers, including all employment-related agreements
or arrangements under which compensatory benefits are awarded or
paid to, or earned or received by, our executive officers, and
advising management and the Board regarding such programs and
arrangements;
|
●
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reviewing and recommending to the Board the goals and objectives
relevant to CEO compensation, evaluating CEO performance in light
of such goals and objectives, and determining CEO compensation
based on the evaluation ;
|
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retaining,
reviewing and assessing the independence of compensation
advisers;
|
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monitoring
issues associated with CEO succession and management
development;
|
●
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overseeing
and administering our equity incentive plans;
|
●
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reviewing
and making recommendations to our Board with respect to
compensation of our executive officers and senior
management;
|
●
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reviewing
and making recommendations to our Board with respect to director
compensation;
|
●
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endeavoring to ensure that our executive compensation programs are
reasonable and appropriate, meet their stated purpose (which, among
other things, includes rewarding and creating incentives for
individuals and Company performance), and effectively serve the
interests of the Company and our stockholders;
and
|
●
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upon
becoming subject to the Exchange Act, preparing and approving an
annual report on executive compensation and such other statements
to stockholders which are required by the SEC and other
governmental bodies.
|
Nominating and Governance Committee
Our nominating and governance committee is currently comprised
of Michael Keller, who serves as the committee chair, Kristin
Patrick and Jeff Gehl, each of
whom are independent directors as determined in accordance with the
rules of the Nasdaq Stock Market. Pursuant to its charter, the nominating and
governance committee is primarily responsible for, among other
things:
●
|
assisting
the Board in identifying qualified candidates to become directors,
and recommending to our Board nominees for election at the next
annual meeting of stockholders;
|
●
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leading
the Board in its annual review of the Board’s
performance;
|
●
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recommending
to the Board nominees for each Board committee and each committee
chair;
|
●
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reviewing
and overseeing matters related to the independence of Board and
committee members, in light of independence requirement of the
Nasdaq Stock Market and the rules and regulations of the
SEC;
|
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overseeing
the process of succession planning of our CEO and other executive
officers; and
|
●
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developing
and recommending to the Board corporate governance guidelines,
including our Code of Business Conduct, applicable to the
Company.
|
Board Diversity
Upon the closing of this offering, our nominating and governance
committee will be responsible for reviewing with the Board, on an
annual basis, the appropriate characteristics, skills and
experience required for the Board as a whole and its individual
members. In evaluating the suitability of individual candidates
(both new candidates and current members), the nominating and
governance committee, in recommending candidates for election, and
the Board, in approving (and, in the case of vacancies, appointing)
such candidates, will take into account many factors, including the
following:
●
|
personal
and professional integrity, ethics and values;
|
●
|
experience
in corporate management, such as serving as an officer or former
officer of a publicly-held company;
|
●
|
experience
as a board member or executive officer of another publicly-held
company;
|
●
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strong
finance experience;
|
●
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diversity
of expertise and experience in substantive matters pertaining to
our business relative to other board members;
|
●
|
diversity
of background and perspective, including, but not limited to, with
respect to age, gender, race, place of residence and specialized
experience;
|
●
|
experience
relevant to our business industry and with relevant social policy
concerns; and
|
●
|
relevant
academic expertise or other proficiency in an area of our business
operations.
|
Currently, our Board evaluates, and following the closing of this
offering will evaluate, each individual in the context of the Board
as a whole, with the objective of assembling a group that can best
maximize the success of the business and represent stockholder
interests through the exercise of sound judgment using its
diversity of experience in these various areas.
Compensation Committee Interlocks and Insider
Participation
None of
the members of our compensation committee, at any time, have been
one of our officers or employees. None of our executive officers
currently serves, or in the past year has served, as a member of
the board of directors or compensation committee of any other
entity that has one or more executive officers on our Board of
Directors or compensation committee.
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics applicable to
our employees, officers and directors. We provide
our Code of Business Conduct and
Ethics under the Corporate Governance section of our website
at www.superleague.com/corporategovernance/. The
reference to our website address does not constitute incorporation
by reference of the information contained at or available through
our website, and you should not consider it to be a part of this
prospectus. We intend to
disclose any future amendments to certain provisions of our Code of
Business Conduct and Ethics, or waivers of these provisions, on our
website or in our filings with the SEC under the Exchange
Act.
Limitation of Liability and Indemnification
Our Charter and our Bylaws provide the indemnification of
our directors and officers to the fullest extent permitted under
the DGCL. In addition, the Charter provides that our directors
shall not be personally liable to us or our shareholders for
monetary damages for breach of fiduciary duty as a director and
that if the DGCL is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then
the liability of our directors shall be eliminated or limited to
the fullest extent permitted by the DGCL, as so
amended.
As
permitted by the DGCL, we have entered into or plan to enter into
separate indemnification agreements with each of our directors and
certain of our officers that require us, among other things, to
indemnify them against certain liabilities which may arise by
reason of their status as directors, officers or certain other
employees. We expect to obtain and maintain insurance policies
under which our directors and officers are insured, within the
limits and subject to the limitations of those policies, against
certain expenses in connection with the defense of, and certain
liabilities that might be imposed as a result of, actions, suits or
proceedings to which they are parties by reason of being or having
been directors or officers. The coverage provided by these policies
may apply whether or not we would have the power to indemnify such
person against such liability under the provisions of the
DGCL.
We
believe that these provisions and agreements are necessary to
attract and retain qualified persons as our officers and directors.
At present, there is no pending litigation or proceeding involving
our directors or officers for whom indemnification is required or
permitted, and we are not aware of any threatened litigation or
proceeding that may result in a claim for
indemnification.
We are
an emerging growth company for purposes of the SEC’s
executive compensation disclosure rules. In accordance with such
rules, we are required to provide a Summary Compensation Table and
an Outstanding Equity Awards at Fiscal Year End Table, as well as
limited narrative disclosures regarding executive compensation for
our last two completed fiscal years. Further, our reporting
obligations extend only to our “named executive
officers,” who are those individuals serving as our principal
executive officer and our two other most highly compensated
executive officers who were serving as executive officers at
December 31, 2019, the end of the last completed fiscal year (the
“Named Executive
Officers”).
We have
identified Ann Hand, David Steigelfest and Matt Edelman as our
Named Executive Officers for the year ended December 31, 2019. Our
Named Executive Officers for our fiscal year ending December 31,
2020 could change, as we may hire or appoint new executive
officers.
For the
fiscal years ended December 31, 2019 and 2018, compensation for our Named Executive Officers was
as follows:
Name
and principal position
|
|
|
|
|
|
All
Other Compensation ($)
|
|
Ann
Hand
|
2019
|
$ 400,000
|
$ 350,000(2)
|
-
|
$ -
|
|
$ 750,000
|
Chief Executive Officer, President
|
2018
|
$ 400,000
|
$ 100,000(2)
|
-
|
$ 3,526,000
|
-
|
$ 4,026,000
|
David
Steigelfest
|
2019
|
$ 300,000
|
$ 105,000
|
|
$ -
|
|
$ 405,000
|
Chief Product Officer
|
2018
|
$ 300,000
|
-
|
-
|
$ 833,000
|
-
|
$ 1,133,000
|
Matt
Edelman
|
2019
|
$ 300,000
|
$ -
|
|
$ -
|
|
$ 300,000
|
Chief Commercial Officer
|
2018
|
$ 300,000
|
$ -
|
-
|
$ 378,000
|
-
|
$ 678,000
|
(1)
|
This column represents the grant date fair value calculated in
accordance with the FASB’s Accounting Standards Codification
Topic 718, Compensation – Stock Compensation
(“ASC 718”).
The methodology used to calculate the estimated value of the equity
awards granted is set forth under Note 2 and Note 8 to the audited
Financial Statements as of and for the years ended December 31,
2019 and 2018, included in our Annual Report on Form 10-K for the
year ended December 31, 2019, which is incorporated by reference
into this prospectus. These amounts do not represent the actual
value, if any, that may be realized by the Named Executive
Officers.
|
(2)
|
Refer to “Employment
Agreements and Potential Payments upon Termination or Change of
Control” below for additional
information.
|
Elements of Compensation
Our
executive compensation program consisted of the following
components of compensation during the years ended December 31, 2019
and 2018:
Base Salary
Each of
our executive officers receives a base salary for the expertise,
skills, knowledge and experience he or she offers to our management
team. The base salary of each of our executive officers is
re-evaluated annually, and may be adjusted to reflect:
●
|
the
nature, responsibilities, and duties of the officer’s
position;
|
●
|
the
officer’s expertise, demonstrated leadership ability, and
prior performance;
|
●
|
the
officer’s salary history and total compensation, including
annual equity incentive awards; and
|
●
|
the
competitiveness of the officer’s base salary.
|
Equity Incentive Awards
We believe that to attract and retain management, key employees and
non-management directors, the compensation paid to these persons
should include, in addition to base salary, annual equity
incentives. Our compensation committee determines the amount
and terms of equity-based compensation granted to each individual.
In determining whether to grant certain equity awards to our
executive officers, the compensation committee assesses the level
of the executive officer’s achievement of meeting individual
goals, as well as the executive officer’s contribution
towards goals of the Company. Whenever possible, equity incentive
awards are granted under our stock option plan. However, due to a
prior lack of shares available for issuances under the 2014 Plan,
we have granted certain awards in the form of warrants to key
executive officers in the past.
Employment Agreements and Potential Payments upon Termination or
Change of Control
Ann Hand
On June
16, 2017, we entered into an employment agreement with Ms. Hand to
serve as our Chief Executive Officer, President and Chair of the
Board. The initial term of the agreement is three years (the
“Hand Initial
Term”), and provided that neither party provides 30
days’ notice prior to the expiration of the Hand Initial Term
or a Renewal Term (defined below) of their intent to allow the
agreement to expire and thereby terminate, the agreement shall
continue in effect for successive periods of one year (each, a
“Hand Renewal
Term”). The employment agreement with Ms. Hand
provides for a base annual salary of $400,000, which amount may be increased annually, at the
sole discretion of the Board. Additionally, Ms. Hand shall be
entitled to (i) an annual cash bonus, the amount of which shall be
determined by our compensation committee, (ii) health insurance for
herself and her dependents, for which the Company shall pay 90% of
the premiums, (iii) reimbursement for all reasonable business
expenses, and (iv) participate in the Company’s 401(k) Plan
upon the Board electing to institute it. As additional
compensation, Ms. Hand was issued a warrant to purchase 100,000
shares of Company Common Stock at an exercise price of $10.80 per
share (the “Hand
Warrant”). The warrant has a ten-year term and shall
vest at a rate of 1/36th per month, subject to the acceleration of
all unvested shares upon a Change of Control, as defined in the
employment agreement.
Ms.
Hand’s employment agreement is terminable by either party at
any time. In the event of termination by us without Cause or by Ms.
Hand for Good Reason, as those terms are defined in the agreement,
she shall receive a severance package consisting of the following:
(i) all accrued obligations as of the termination date; (ii) a cash
payment equal to the greater of (A) her base annual salary for 18
months, payable 50% upon termination, 25% 90 days after the
termination date and 25% 180 days after the termination date, or
(B) the remaining payments due for the term of the agreement; and
(iii) an additional 18 months’ vesting on the Hand Warrant.
In the event of termination by us with Cause or by Ms. Hand without
Good Reason, Ms. Hand shall be entitled to all salary and benefits
accrued prior to the termination date, and nothing else;
provided, however, that Ms.
Hand shall be entitled to exercise that portion of the Hand Warrant
that has vested as of the effective date of the termination until
the Hand Warrant’s expiration.
Ms.
Hand’s employment agreement was amended and restated on
November 15, 2018, pursuant to which the Hand Initial Term of the
agreement was extended through December 31, 2021, with the terms of
the Hand Renewal Term remaining the same. In addition, under the
terms of the amended and restated employment agreement, Ms. Hand
shall be entitled to the following compensation: (i) a base annual
salary of $400,000, which amount may
be increased annually, at the sole discretion of the Board; (ii)
cash bonuses as follows: (a) $100,000 upon the close of a fully
subscribed $10.0 million private placement of 9.00% secured
convertible promissory notes, (b) $250,000 upon the consummation of
the Company’s IPO or a private financing of not less than
$15.0 million (a “Qualified
Financing”), (c)
$150,000, payable in three increments of $50,000 upon achievement
of certain milestones, as determined by the compensation committee;
(iii) health insurance for herself and her dependents, for which
the Company shall pay 90% of the premiums; (iv) reimbursement for
all reasonable business expenses; and (v) participate in the
Company’s 401(k) Plan upon the Board electing to institute
it. As additional compensation, Ms. Hand was also granted (i) a
ten-year common stock purchase warrant to purchase up to 250,000
shares of the Company’s common stock, exercisable at $10.80
per share, which vested as follows: (a) 25% immediately upon
issuance, (b) 50% upon the consummation of the Company’s IPO
or a Qualified Financing, and (c) 25% on the one-year anniversary
of the IPO or a Qualified Financing; and (ii) ten-year stock
options to purchase 166,667 shares of Common Stock, exercisable at
$10.80 per share, which vested as follows: (a) 50% upon
consummation of the Company’s IPO or a Qualified Financing,
(b) 25% upon achievement of 300,000 registered users, and (c) 25%
upon achievement of 400,000 registered users. Further, pursuant to
the terms of the amended and restated employment agreement, in the
event that Ms. Hand is terminated other than for Cause, Ms. Hand
shall be entitled to receive all of her severance benefits on the
effective date of termination.
David Steigelfest
Effective
October 31, 2016, we entered into an employment agreement with Mr.
Steigelfest to serve as our Chief Technology Officer. The initial
term of the agreement is two years (the “Steigelfest Initial Term”), and
provided that neither party provides 30 days' notice prior to the
expiration of the Steigelfest Initial Term or a Steigelfest Renewal
Term of their intent to allow the agreement to expire and thereby
terminate, the agreement shall continue in effect for successive
periods of one year (each, a “Steigelfest Renewal Term”). The
employment agreement with Mr. Steigelfest provides for a base
annual salary of $270,000, which
amount may be increased annually, at the sole discretion of the
Board and was increased to $300,000 by the Board in the fourth
quarter of 2017. Additionally, Mr. Steigelfest
shall be entitled to (i) health
insurance for himself and his dependents, for which the Company
shall pay 50% of the premiums, (ii) reimbursement for all
reasonable business expenses, and (iv) participate in the
Company’s 401(k) Plan upon the Board electing to institute
it.
Mr.
Steigelfest’s employment agreement is terminable by either
party at any time. In the event of termination by us without Cause,
as defined in the agreement, he shall be entitled to all salary and
benefits accrued prior to the date of termination, as well as six
months of accelerated vesting of the Option from the date of
termination. In the event of termination by us with Cause, Mr.
Steigelfest shall be entitled to all salary accrued prior to the
termination date, and nothing else; provided, however, that Mr. Steigelfest
shall be entitled to exercise any stock options that have vested
prior to the date of termination.
Mr.
Steigelfest’s employment agreement was amended and restated
on November 1, 2018, pursuant to which the Steigelfest Initial Term
of the agreement was extended to two years from November 1, 2018
and Mr. Steigelfest shall serve as both the Company’s Chief
Technology Officer and Chief Product Officer. Effective July 22,
2019, in connection with the hiring of Samir Ahmed, the
Company’s current Chief Technology Officer, Mr. Steigelfest
now serves as the Company’s Chief Product Officer. In
addition, under the terms of the amended and restated employment
agreement, Mr. Steigelfest shall be entitled to the following
compensation: (i) a base annual salary of $300,000, which amount may be increased annually, at the
sole discretion of the Board; (ii) cash bonuses as follows: (a)
$50,000 upon the consummation of the Company’s IPO or a
Qualified Financing, (b) $75,000, payable in five separate
increments of $15,000 upon achievement of certain milestones, as
determined by the compensation committee, and (c) $100,000, payable
in four separate increments of $25,000 upon achievement of certain
milestones on or before June 30, 2019; (iii) health insurance for
himself and his dependents, for which the Company shall pay 90% of
the premiums; (iv) reimbursement for all reasonable business
expenses; and (v) participate in the Company’s 401(k) Plan
upon the Board electing to institute it. As additional
compensation, Mr. Steigelfest was also granted ten-year stock
options to purchase 100,000 shares of Common Stock, exercisable at
the same price per share of the Company’s IPO, which shall
vest in accordance with the Company’s traditional vesting
schedule. Further, pursuant to the terms of the amended and
restated employment agreement, in the event that Mr. Steigelfest is
terminated other than for Cause, Mr. Steigelfest shall be entitled
to receive cash equal to his annual base salary for one year on the
effective date of termination.
Matt Edelman
Effective
November 1, 2018, we entered into an employment agreement with Mr.
Edelman to serve as our Chief Commercial Officer. The initial term
of Mr. Edelman’s employment agreement is two years (the
“Edelman Initial
Term”), and provided that neither party provides 30
days’ notice prior to the expiration of the Edelman Initial
Term or an Edelman Renewal Term (defined below) of their intent to
allow the agreement to expire and thereby terminate, the agreement
shall continue in effect for successive periods of one year (each,
an “Edelman Renewal
Term”). The employment agreement with Mr. Edelman
provides for a base annual salary of $300,000, which amount may be increased annually, at the
sole discretion of the Board. Additionally, Mr. Edelman
shall be entitled to (i) health
insurance for himself and his dependents, for which the Company
shall pay 90% of the premiums, (ii) reimbursement for all
reasonable business expenses, and (iii) participate in the
Company’s 401(k) Plan upon the Board electing to institute
it.
Mr.
Edelman’s employment agreement is terminable by either party
at any time. In the event of termination by us without Cause, as
defined in the agreement, he shall be entitled to the following
severance payment based upon his length of employment with the
Company and his existing annual salary, which he shall receive 30
days after the final day of his employment: (i) from six to nine
months of employment, one month of severance pay; (ii) from nine
months to one year of employment, two months of severance pay;
(iii) from one year to two years of employment, three months of
severance pay; and (iv) for each additional year of employment
beyond one year, one additional month of severance pay;
provided, however, that in
the event of a change of control transaction involving the Company,
Mr. Edelman shall be entitled to six months of severance pay. In
the event of such termination, and in order to receive the
foregoing severance benefits, Mr. Edelman shall be required to
execute a mutually agreed upon Mutual Release agreement. In the
event of termination by us with Cause, Mr. Edelman shall be
entitled to all salary accrued prior to the termination date, and
nothing else; provided,
however, that Mr. Edelman shall be entitled to exercise any
stock options that have vested prior to the date of
termination.
Outstanding Equity Awards at Fiscal Year-End
The following table discloses outstanding stock option awards held
by each of the Named Executive Officers as of December 31,
2019:
|
|
|
Name
|
|
Number of securities underlying unexercised
options/ warrants (#)
Exercisable
|
Number of securities underlying unexercised
options/ warrants (#)
Unexercisable
|
Option/ warrant exercise price ($)
|
Option/ warrant expiration date
|
|
|
|
|
|
|
Ann
Hand
|
6/5/15
|
166,667
|
-
|
$ 9.00
|
6/5/25
|
|
6/16/17
|
51,334
|
-
|
$ 9.00
|
6/15/27
|
|
6/16/17
|
32,000
|
-
|
$ 10.80
|
6/15/27
|
|
6/16/17
|
91,667
|
8,333(1)
|
$ 10.80
|
6/6/27
|
|
10/31/18
|
166,667
|
-(2)
|
$ 10.80
|
10/31/28
|
|
10/31/18
|
187,500
|
62,500(3)
|
$ 10.80
|
10/31/28
|
David
Steigelfest
|
10/16/14
|
116,667
|
-
|
$ 0.30
|
10/15/24
|
|
12/21/15
|
833
|
-
|
$ 9.00
|
12/21/25
|
|
6/16/17
|
34,669
|
|
$ 9.00
|
6/15/27
|
|
6/16/17
|
32,000
|
|
$ 10.80
|
6/15/27
|
|
10/31/18
|
29,166
|
70,834(4)
|
$ 10.80
|
10/31/28
|
Matt
Edelman
|
7/24/17
|
39,536
|
25,904(5)
|
$ 10.80
|
7/24/27
|
|
6/29/18
|
6,250
|
10,417(6)
|
$ 10.80
|
6/29/28
|
|
10/31/18
|
25,000
|
-
|
$ 10.80
|
10/31/28
|
(1)
|
Represents a warrant to purchase shares of our common stock, which
warrant vests 2,778 shares per month, and becomes fully vested on
June 6, 2020. The warrant was issued in lieu of options due to the
lack of sufficient available shares authorized for issuance under
the 2014 Plan.
|
(2)
|
Represents an option to purchase shares of our common stock which
50% vested upon consummation of the Company’s IPO, 25%, on
April 30, 2019 upon achievement of target registered users, and
25%, on June 30, 2019, upon achievement of target registered
users.
|
(3)
|
Represents a warrant to purchase shares of our common stock, which
warrant vested 25% immediately upon issuance and 50% upon the
consummation of the Company’s IPO, and the remaining 25%
vests on the one-year anniversary of the IPO or a Qualified
Financing.
|
(4)
|
Represents an option to purchase shares of our common stock, which
option vested with respect to 25,000 shares on October 31, 2019,
and the remainder vesting at a rate of 2,084 shares per month, and
becomes fully vested on October 30, 2022.
|
(5)
|
Represents an option to purchase shares of our common stock, which
option vested with respect to 16,360 shares on July 24, 2018, and
then at a rate of 1,364 shares per month, and becomes fully vested
on July 24, 2021.
|
(6)
|
Represents an option to purchase shares of our common stock, which
option shall vest with respect to 4,167 shares on October 31, 2019,
and then at a rate of 348 shares per month, and becomes fully
vested on October 30, 2022.
|
Securities Authorized for Issuance under Equity Compensation
Plans
The following table provides a summary of the securities authorized
for issuance under our equity compensation plans as of December 31,
2019.
Plan
category
|
Number
of securities to be issued upon exercise of outstanding options,
warrants and rights
|
Weighted-average
exercise price of outstanding options, warrants and
rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|
|
|
|
Equity compensation
plans approved by security holders
|
|
|
|
2014
Plan
|
1,486,689
|
$ 8.94
|
308,479
|
Equity compensation
plans not approved by security holders
|
93,000
|
7.74
|
N/A
|
Total
|
1,579,689
|
$ 8.86
|
308,479
|
Stock Option and Incentive Plan
2014 Stock Option and Incentive Plan
Our Board unanimously approved the 2014 Plan on October 13, 2014. The 2014 Plan was
subsequently amended in May 2015, May 2016, July 2017 and October
2018. The maximum number of shares of common stock issuable under
the 2014 Plan is currently 1,833,334 shares, subject to adjustments
for stock splits, stock dividends or other similar changes in our
common stock or our capital structure.
Our 2014 Plan provides for the grant of (a) Incentive Stock Options
(within the meaning of Section 422 of the Code) to our
full-time employees (“Employees”), subject to the
requirements of Section 422(c)(6) where an Employee owns 10% or
more of our voting stock outstanding; (b) Non-Qualified Options
(together with Incentive Stock Options, “Options”); (c)
stock awards; and (d) performance shares to any individual who is
(i) an Employee, (ii) a member of our Board, or (iii) an
independent contractor who provides services for the
Company.
Plan Administration
Pursuant to the 2014 Plan, our Board has delegated the authority to
administer the 2014 Plan to the Board’s compensation
committee (the “Committee”). Subject to the provisions of our 2014
Plan, the Committee has the power to determine the terms of the
awards, including the exercise price, the number of shares subject
to each award, the exercisability of the awards, and the form of
consideration, if any, payable upon exercise. The Committee also
has the authority to amend, modify, extend renew or terminate
outstanding Options, or may accept the cancellation of outstanding
Options, whether or not granted under the 2014 Plan, in return for
the grant of new Options at the same or a different price.
Additionally, the Committee may shorten the vesting period, extend
the exercise period, remove any or all restrictions or convert an
Incentive Option to a Non-Qualified Option, if, at its sole
discretion, it determines that such action is in the best interest
of the Company; provided, however,
that any modification made to
outstanding Options requires the prior consent of the holder(s) of
such Options, unless the Committee determines that the action would
not materially and adversely affect such
holder(s).
Incentive Stock Options
The exercise price of Incentive Stock Options granted under our
2014 Plan must at least be equal to 100% of the fair market value
of our common stock on the date of grant. The term of an Incentive
Stock Option may not exceed ten years, except that with respect to
any participant who owns more than 10% of the voting power of all
classes of our outstanding stock, the term must not exceed five
years and the exercise price must equal at least 110% of the fair
market value on the grant date.
Non-Qualified Stock Options
The exercise price of Non-Qualified Options granted under our 2014
Plan must at least be equal to 85% of the fair market value of our
common stock on the date of grant. The term of a Non-Qualified
Stock Option may not exceed ten years.
Stock Awards or Sales
Eligible individuals may be issued shares of common stock directly,
upon the attainment of performance milestones or the completion of
a specified period of service or as a bonus for past services. The
purchase price for the shares shall not be less than 100% of the
fair market value of the shares on the date of issuance, and
payment may be in the form of cash or past services rendered.
Eligible individuals shall have no stockholder rights with respect
to any unvested restricted shares or restricted share units issued
to them under the stock award or sales program, however, eligible
individuals shall have the right to receive any regular cash
dividends paid on such shares.
Termination of Relationship
Except as the Committee may otherwise determine with respect to a
Non-Qualified Stock Option, if the holder of an Option ceases to
have a Relationship (as defined in the 2014 Plan) with the Company
for any reason other than death or permanent disability, any
Options granted to him shall terminate 90 days from the date on
which such Relationship terminates; provided,
however, that no Option may be
exercised or claimed by the holder of an Option following the
termination of his Relationship for Cause (as defined in the 2014
Plan). In the event that the Relationship terminates as a result of
the death or permanent disability of the Option holder, any Options
granted to him shall terminate one year from the date of his death
or termination due to permanent disability. In no event may an
option be exercised later than the expiration of its
term.
Certain Adjustments
In the event of certain changes in our capitalization, to prevent
diminution or enlargement of the benefits or potential benefits
available under the 2014 Plan, the administrator will adjust the
number and class of shares available for future grants under the
2014 Plan, the exercise price of outstanding Options, the number of
shares covered by each outstanding award, or the purchase price of
each outstanding award. In connection with the
one-for-three Reverse Stock Split (defined below) of our common
stock that was affected on February 8, 2019, the terms of certain
awards granted under our 2014 Plan were equitably adjusted in
accordance with the provisions thereof.
Reorganization
In the event we are a party to a merger or other corporate
reorganization, all outstanding Options shall be subject to the
agreement of merger or reorganization. Such agreement may provide
for the assumption of the outstanding Options by the surviving
corporation or its parent or for their continuation by the Company
(if the Company is a surviving corporation); provided,
however, that if the assumption
or continuation is not provided by such agreement, then the
Committee, in its sole discretion, shall have the option of
offering the payment of a cash settlement equal to the difference
between the amount to be paid for one share under the agreement and
the exercise price.
Change of Control
Under the 2014 Plan, a Change of Control is generally defined as:
(i) the sale of all or substantially all of the assets of the
Company, or (ii) any merger, consolidation or acquisition of the
Company with, by or into another corporation, entity or third
party, the result of which is a change in the ownership of more
than 50% of the voting capital stock of the Company.
In the event of a Change of Control, all restrictions on all awards
or sales of shares will accelerate and vesting on all unexercised
and unvested Options will occur on the Change of Control
date.
Director Compensation
On
January 31, 2019, and as amended on August 13, 2019, effective July
1, 2019, our Board adopted a director compensation plan for our
non-employee directors, the details of which are presented in the
table below. We do not provide deferred compensation or
retirement plans for non-employee directors.
Schedule of Director Fees
Compensation
Element
|
|
|
|
|
|
Annual
Retainer
|
$ 60,000(3)
|
$ 60,000(4)
|
Audit Committee
Chair
|
$ 15,000
|
$ -
|
Compensation
Committee Chair
|
$ 10,000
|
$ -
|
Nominating and
Governance Committee Chair
|
$ 5,000
|
$ -
|
Audit and
Nominating and Governance Committee Member
|
$ 5,000
|
$ -
|
Compensation
Committee Member
|
$ 3,500
|
$ -
|
(1)
|
Cash
compensation is payable in equal installments on a quarterly basis;
provided, however, that no monthly cash retainer
will be paid after any termination of service.
|
(2)
|
Equity
awards will be issuable in the form of restricted stock units
(“RSUs”). On
the date of the Company’s annual meeting of stockholders,
each director will receive RSUs at a per share price equal to the
closing price of the Company’s common stock on the grant
date, which RSU will become fully vested on the one-year
anniversary of the initial grant date.
|
(3)
|
Any new
non-employee director appointed to the Board will receive cash
compensation equal to a prorated portion of the annual retainer
amount.
|
(4)
|
Any new
non-employee director appointed to the Board will receive a RSU
having a grant date value equal to a prorated portion of annual RSU
award amount, which RSUs will become fully vested on the earlier of
(i) the one year anniversary of the initial grant date or (ii) the
next annual meeting of the Company’s
stockholders.
|
2019 Summary Table of Director Compensation
The following table sets forth the compensation awarded to, earned
by, or paid to each person who served as a non-employee director
during the fiscal year ended December 31, 2019:
Name
|
Fees Earned
or Paid
in Cash ($)
|
|
|
|
|
|
|
|
|
Jeff
Gehl(1)
|
$ 28,571
|
$ 60,000
|
-
|
$ 88,571
|
Robert
Stewart(2)(3)
|
$ 22,821
|
$ 60,000
|
-
|
$ 82,821
|
Kristian
Patrick(4)
|
$ 22,824
|
$ 60,000
|
-
|
$ 82,821
|
Michael
Keller(5)
|
$ 26,071
|
$ 60,000
|
-
|
$ 86,071
|
Mark
Jung(6)(7)
|
$ 22,630
|
$ 60,000
|
$ 60,000
|
$ 142,630
|
(1)
|
Reflects
prorated 2019 annual retainer and Audit Committee chair fees, as
described above.
|
(2)
|
Reflects
prorated 2019 annual retainer and Compensation Committee member
fees, as described above.
|
|
|
(3)
|
Mr.
Stewart, who served as a director during the year ended December
31, 2019, resigned from the Board on March 31, 2020.
|
(4)
|
Reflects
prorated 2019 annual retainer and Compensation Committee member
fees, as described above.
|
(5)
|
Reflects
prorated 2019 annual retainer, Nominating and Governance Committee
chair fees and Audit Committee member fees, as described
above.
|
(6)
|
Reflects
prorated 2019 annual retainer, Compensation Committee chair fees,
and Audit Committee member fees, as described above.
|
(7)
|
In
connection with Mr. Jung’s appointment as a director on our
Board, the Company and Mr. Jung entered into the Consulting
Agreement (defined below), pursuant to which Mr. Jung will provide
the Company with strategic advice and planning services for which
Mr. Jung receives a cash payment of $7,500 per month from the
Company. The Consulting Agreement had an initial term that extended
to December 31, 2019, but may be extended upon mutual agreement of
Mr. Jung and the Company.
|
CERTAIN RELATIONSHIPS AND
RELATED PARTY TRANSACTIONS
In
connection with Mr. Jung’s appointment as a director on our
Board, the Company and Mr. Jung entered into a consulting agreement
(the “Consulting
Agreement”), pursuant to which Mr. Jung will provide
the Company with strategic advice and planning services for which
Mr. Jung will receive a cash payment of $7,500 per month from the
Company. The Consulting Agreement has an initial term that runs
until December 31, 2019, but may be extended upon mutual agreement
of Mr. Jung and the Company.
John
Miller, one of our co-founders and former members of our Board, is
also the founder and serves on the board of directors of
CaliBurger. Although Mr. Miller resigned from the Board immediately
prior to the consummation of our IPO, he was an active member of
our Board at the time of each of the transactions with CaliBurger
described below:
On
August 3, 2018, CaliBurger entered into a Note Purchase Agreement
for the purchase of a 2018 Note in the principal amount of $1.0
million, as well as corresponding 2018 Warrants. Subsequent to
August 3, 2018, $200,000 of the 2018 Notes and related 2018
Warrants were transferred to unrelated third parties.
On
February 21, 2018, the Company issued a 9.00% Senior Secured
Convertible Promissory Note with common stock purchase warrants in
the original principal amount of $1.0 million, which note was
converted (including all original principal and accrued interest)
on May 28, 2018 into a new 9.00% Senior Secured Convertible
Promissory Note with common stock purchase warrants. Subsequently,
on August 2, 2018, CaliBurger purchased an additional 9.00% Senior
Secured Convertible Promissory Note in the original principal
amount of $1,000,000 with common stock purchase
warrants.
Related Party Transaction Policy
Our
Board recognizes the fact that transactions with related persons
present a heightened risk of conflicts of interests and/or improper
valuation (or the perception thereof). Accordingly, our Board has
adopted a written policy addressing the approval of transactions
with related persons, in conformity with the requirements for
issuers having publicly held common stock listed on the Nasdaq
Capital Market. Pursuant to our Related Persons Transactions Policy
(the “Policy”),
any related-person transaction, and any material amendment or
modification of a related-person transaction, is required to be
reviewed and approved or ratified by the Board’s audit
committee, which shall be composed solely of independent directors
who are disinterested, or in the event that a member of the audit
committee is a Related Person, as defined below, then by the
disinterested members of the audit committee; provided, however, that in the event
that management determines that it is impractical or undesirable to
delay the consummation of a related person transaction until a
meeting of the audit committee, then the Chair of the audit
committee may approve such transaction in accordance with this
policy; such approval must be reported to the audit committee at
its next regularly scheduled meeting. In determining whether to
approve or ratify any related person transaction, the audit
committee must consider all of the relevant facts and circumstances
and shall approve only those transactions that are deemed to be in
the best interests of the Company.
Pursuant to our Policy and SEC rules, a “related person
transaction” includes any transaction, arrangement or
relationship which: (i) the Company is a participant; (ii) the
amount involved exceeds $120,000; and (iii) an executive officer,
director or director nominee, or any person who is known to be the
beneficial owner of more than 5% of our common stock, or any person
who is an immediate family member of an executive officer, director
or director nominee or beneficial owner of more than 5% of our
common stock, had or will have a direct or indirect material
interest (each a “Related
Person”).
In
connection with the review and approval or ratification of a
related person transaction:
●
|
Management
shall be responsible for determining whether a transaction
constitutes a related person transaction subject to the Policy,
including whether the Related Person has a material interest in the
transaction, based on a review of all of the facts and
circumstances; and
|
●
|
Should
management determine that a transaction is a related person
transaction subject to the Policy, it must disclose to the audit
committee all material facts concerning the transaction and the
Related Person’s interest in the transaction.
|
SECURITY OWNERSHIP
OF MANAGEMENT AND CERTAIN SECURITYHOLDERS
The
following table sets forth certain information known to us
regarding beneficial ownership of our common stock as of
April 10, 2020 for (i)
each of our executive officers and directors individually, (ii) all
of our executive officers and directors as a group, and (iii) each
person, or group of affiliated persons, known by us to be the
beneficial owner of more than 5% of our capital stock. A person is
also deemed to be a beneficial owner of any securities of which
that person has a right to acquire beneficial ownership within 60
days. The percentage of beneficial ownership in the table below is
based on 8,573,922 shares
of common stock deemed to be outstanding as of April 10, 2020.
Name,
address and title of beneficial owner (1)
|
|
Total
Number of Shares Subject to Exercisable Options and
Warrants
|
Total
Number of Shares Beneficially Owned
|
Percentage
of Voting Common Stock Outstanding (2)
|
Officers and Directors
|
|
|
|
|
Ann
Hand
Chief Executive Officer, President and Chair
|
76,374
|
613,890
|
690,264
|
8.1%
|
David
Steigelfest
Chief Products and Technology Officer
|
50,000
|
149,773
|
199,773
|
2.3%
|
Clayton
Haynes
Chief Financial Officer
|
2,000
|
16,667
|
18,667
|
*
|
Matt
Edelman
Chief Commercial Officer
|
2,500
|
735
|
3,235
|
*
|
Jeff Gehl (3)
Director
|
127,205
|
112,100
|
239,305
|
2.8%
|
Kristin
Patrick
Director
|
5,455
|
-
|
5,455
|
*
|
Michael Keller (4)
Director
|
106,009
|
100,839
|
206,848
|
2.4%
|
Mark
Jung
Director
|
50,610
|
-
|
50,610
|
*%
|
Executive Officers and Directors as a
Group (8 persons)
|
420,153
|
994,004
|
1,414,157
|
16.5%
|
|
|
|
|
|
Greater than 5%
Stockholders
|
|
|
|
|
Pu
Luo Chung VC Private Limited (5)
37 Jalan
Pemimpin
#
06-12
Singapore
577177
|
471,128
|
-
|
471,128
|
|
______________________
* Less than 1.0%
(1)
|
Unless
otherwise indicated, the business address for each of the executive
officers and directors is c/o Super League Gaming, Inc., 2906
Colorado Ave., Santa Monica, CA 90404.
|
(2)
|
Beneficial
ownership is determined in accordance with the rules of the SEC. In
computing the number of shares beneficially owned by a person and
the percentage of ownership by that person, shares of voting common
stock subject to outstanding rights to acquire shares of voting
common stock held by that person that are currently exercisable or
exercisable within 60 days are deemed outstanding. Such shares are
not deemed outstanding for the purpose of computing the percentage
of ownership by any other person.
|
(3)
|
Includes
(i) 22,121 shares of common stock, 25,000 shares of common stock
issuable upon exercise of stock options and 40,802 shares issuable
upon conversion of warrants held by Mr. Gehl, (ii) 80,553 shares of
common stock held by BigBoy Investment Partnership, LLC, and (iii)
24,532 shares of common stock and 46,297 shares issuable upon
conversion of warrants held by BigBoy, LLC.
Mr.
Gehl is the Managing Member of BigBoy Investment Partnership and
BigBoy, LLC, and, therefore, may be deemed to beneficially own
these shares. The business address for BigBoy Investment
Partnership and BigBoy, LLC is 111 Bayside Dr., Suite 270, Newport
Beach, CA 92625.
|
(4)
|
Includes
(i) 100,301 shares of common stock and 95,491 shares of common
stock issuable upon conversion of warrants held by the Michael R.
Keller Trust, (ii) 2,854 shares of common stock and 2,674 shares of
common stock issuable upon conversion of warrants held by the
Keller 2004 IRR Trust FBO William, and (iii) 2,854 shares of common
stock and 2,674 shares of common stock issuable upon conversion of
warrants held by the Keller 2004 IRR Trust FBO
Charles.
|
(5)
|
Stuart
Hills, partner of Pu Luo Chung VC Private Limited has sole voting
and dispositive power over these shares and may be deemed to
beneficially own these securities.
|
Certain legal matters in connection with this offering will be
passed upon for us by Disclosure Law Group, a Professional
Corporation, of San Diego, California.
EXPERTS
Squar
Milner LLP, our independent registered
public accounting firm, has audited our financial statements
included in our Annual Report on Form 10-K for the years ended
December 31, 2019 and 2018, as set forth in their report
(which includes an explanatory paragraph relating to the
Company’s ability to continue as a going concern), which is
incorporated by reference in this prospectus. Our financial
statements are incorporated by reference in reliance on
Squar Milner LLP’s report, given
on their authority as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are a public company and file annual, quarterly and special
reports, proxy statements and other information with the SEC. Our
SEC filings are available, at no charge, to the public at the
SEC’s website at http://www.sec.gov.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by us with the SEC are incorporated
by reference in this prospectus:
●
our Annual Report on Form 10-K for the year ended December 31,
2019, filed on March 23, 2020;
●
our Current Report on Form 8-K, filed on April 3, 2020;
and
●
the description of our common stock which is registered under
Section 12 of the Exchange Act, in our registration statement
on Form 8-A, filed on
February 21, 2019, including
any amendment or reports filed for the purposes of updating this
description.
We also incorporate by reference all documents we file pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (other than
any portions of filings that are furnished rather than filed
pursuant to Items 2.02 and 7.01 of a Current Report on Form 8-K)
after the date of the initial registration statement of which this
prospectus is a part and prior to effectiveness of such
registration statement. All documents we file in the future
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this prospectus and prior to the termination of
the offering are also incorporated by reference and are an
important part of this prospectus.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this registration statement to the
extent that a statement contained herein or in any other
subsequently filed document which also is or deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this registration statement.
We will provide to each person, including any beneficial owner, to
whom a prospectus is delivered, a copy of any or all of the
information that has been incorporated by reference in the
prospectus but not delivered with the prospectus. You may request a
copy of these filings, excluding the exhibits to such filings which
we have not specifically incorporated by reference in such filings,
at no cost, by writing to or calling us at:
Super League Gaming, Inc.
2906 Colorado Ave.
Santa Monica, California 90404
(802) 294-2754
This prospectus is part of a registration statement we filed with
the SEC. You should only rely on the information or representations
contained in this prospectus and any accompanying prospectus
supplement. We have not authorized anyone to provide information
other than that provided in this prospectus and any accompanying
prospectus supplement. We are not making an offer of the securities
in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any accompanying
prospectus supplement is accurate as of any date other than the
date on the front of the document.
1,512,499 Shares of Common Stock
____________________________
PROSPECTUS SUPPLEMENT
____________________________
March 19,
2021
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