Item 1.01 Entry into a Material Definitive Agreement.
On September 20, 2022, Mobile Global Esports Inc.
(the “Company”) entered into a Securities Purchase Agreement (the “SPA”) with an institutional and accredited
investor (the “Investor”) providing for the issuance and sale by the Company to the Investor in a private placement of an
aggregate of (i) 1,886,793 shares (the “Shares”) of the Company’s common stock (“Common Stock”), and (ii)
warrants (the “Warrants”) to purchase an aggregate of 1,886,793 shares (the “Warrant Shares”) of Common Stock,
at a combined purchase price of $2.65 per Share and related Warrant (the “Private Placement”). The closing occurred on September
23, 2022. The aggregate gross proceeds to the Company were approximately $5.0 million, before deducting the placement agent’s fees
and expenses and other offering expenses payable by the Company. The Company intends to use the net proceeds to develop championship esports
events in India and its game platform.
The Warrants (i) have an exercise price of $2.90
per share, (ii) are exercisable immediately, (iii) are exercisable for five years from the effective date of the registration statement
described below, and (iv) have a provision preventing the exercise thereof if, as a result of such exercise, the holder, together with
its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the holder, would be deemed to
beneficially own more than 4.99% of the Common Stock (the “Ownership Limitation”) immediately after giving effect to such
exercise. The holder, upon notice to the Company, may increase or decrease the Ownership Limitation; provided that (a) the Ownership Limitation
may be increased only to a maximum of 9.99% of the Common Stock; and (b) any increase in the Ownership Limitation will not become effective
until the 61st day after delivery of such notice. The exercise price of the Warrants and number of shares of the Common Stock
into which the Warrants are exercisable are subject to adjustment, including for stock subdivisions or combinations.
On September 20, 2022, the Company also entered
into a registration rights agreement with the Investor (the “Registration Rights Agreement”), under which the Company will
be obligated, subject to certain conditions, to file with the Securities and Exchange Commission (the “SEC”) within 30 days
after September 20, 2022 one or more registration statements (any such registration statement, a “Resale Registration Statement”)
to register the Shares and the Warrant Shares for resale under the Securities Act of 1933, as amended (the “Securities Act”).
The Company’s failure to satisfy certain filing and effectiveness deadlines with respect to a Resale Registration Statement and
certain other requirements in the Registration Rights Agreement may subject the Company to payment of monetary penalties.
Pursuant to an engagement agreement (the “Engagement
Agreement”) dated September 20, 2022 between the Company and WestPark Capital, Inc. (the “Placement Agent”), the Company
agreed to (i) pay the Placement Agent a cash fee equal to 9.0% of the aggregate capital raised by the Company in the Private Placement,
(ii) reimburse the Placement Agent for $75,000 of its legal expenses, and (iii) issue the Placement Agent (or its designees) a warrant
to purchase 339,623 shares of common stock (the “Placement Agent Warrant”) with an exercise price of $2.915 per share. The
Placement Agent Warrant was issued in connection with the closing of the Private Placement and has the same terms as the Warrants, except
its exercise price. The Engagement Agreement includes indemnity and other customary provisions for engagements of this nature.
The SPA contains certain restrictions on the Company’s
ability to conduct sales of its equity securities. In particular, subject to certain customary exemptions, from September 20, 2022 until
90 days after the date the initial Resale Registration Statement is declared effective by the SEC (such date, the “Effective Date”),
the Company shall not (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common
Stock or securities convertible, exercisable or exchangeable for Common Stock or (ii) file any registration statement other than as contemplated
by the Registration Rights Agreement. The SPA also prohibits the Company from (a) entering into or effecting a Variable Rate Transaction
(as defined in the SPA) until the one year anniversary of the Effective Date, and (b) undertaking a reverse or forward stock split or
reclassification of the Common Stock without the prior written consent of the Investor until the 180 day anniversary of the Effective
Date.
The issuance and sale of the Shares, Warrants
and Warrant Shares (collectively, the “Securities”) was not, and were not upon issuance, registered under the Securities Act.
The Securities were issued and sold in reliance upon an exemption from registration afforded by Section 4(a)(2) of the Securities Act
and Rule 506(b) promulgated under Securities Act. This report is not and shall not be deemed to be an offer to sell or the solicitation
of an offer to buy any of the Securities.
In connection with the Private Placement, the
Company’s directors, officers and 10% stockholders entered into a lock-up agreement pursuant to which such parties, among other
things, agreed not to offer or sell any shares of Common Stock or securities convertible, exercisable or exchangeable for Common Stock
until 90 days after the Effective Date.
The foregoing summary of the SPA, the Warrants,
the Registration Rights Agreement, the Engagement Agreement and the Placement Agent Warrant does not purport to be complete and is qualified
in its entirety by reference to the copies of such documents, which are filed as exhibits to this report and are incorporated herein by
reference.