Simplicity Esports (WINR) Acquires Esports Franchise PL Gaming Texas LLC

June 29, 2020 11:10 AM EDT

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Simplicity Esports and Gaming Company (OTCQB: WINR) announced today that it formed a new, majority owned subsidiary and acquired all of the assets of PL Gaming Texas LLC, one of the most successful franchisee-owned esports gaming centers in its nationwide footprint. The consideration paid for the acquisition was a combination of cash and restricted shares of common stock. Additionally, Simplicity Esports executed a lease assignment and amendment with the landlord that does not require a specified fixed rent, but instead determines rent as a percentage of gross sales.

Roman Franklin, President of Simplicity Esports, stated, “Our franchisee has done an excellent job building, staffing, and growing this location. The gaming center consists of over 30 gaming stations, gaming related merchandise and accessories for sale, and a quality staff that will remain in place after the acquisition to continue serving the center’s thousands of existing customers. The percentage rent lease structure gives us the necessary flexibility to navigate COVID-19 related impacts on customer traffic counts by reducing fixed costs. As previously announced, we continue to use the strength of our corporate guarantee to partner with landlords on percentage rent leases. Prior to this acquisition, Simplicity Esports only reported the royalty fees collected from the franchisee in its financial statements. However, because financial reporting for majority owned gaming centers is consolidated, as a result of this acquisition, 100% of this gaming center’s revenue will now be included in Simplicity Esports’ financial statements.”

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