Simplicity Esports And Gaming C (WINR) research, news, and more from GeoInvesting

Company description

Wed, 03 Apr 2019 15:16:53 GMT

Simplicity Esports and Gaming Company operates as a virtual reality gaming and sports entertainment company in the United States and India. It owns and operates approximately 30 family entertainment centers across India, as well as a center in the United States. It offers an interactive and fun experience to customers at its centers, blending augmented reality and virtual reality and other games, indoor sports simulation entertainment, and food and beverage options to corporate customers, families, friends, and children. The company was formerly known as Smaaash Entertainment Inc. and changed its name to Simplicity Esports and Gaming Company in January 2019. Simplicity Esports and Gaming Company was incorporated in 2017 and is based in New York, New York.

Research

Wed, 14 Aug 2019 14:56:08 GMT

Simplicity Esports And Gaming Company (OTC:WINR) ($2.30; $19.5M market cap) operates as a virtual reality gaming and sports entertainment company in the United States and India. The company recently closed the acquisition of 44 PLAYlive Nation gaming centers. Today, the Company filed an 8k with a new investor presentation. The company offers a look at its financial projections for 2020:

...as well as peer comparisons, as cited by Forbes:

Research

Wed, 31 Jul 2019 15:24:17 GMT

Simplicity Esports And Gaming Company (OTC:WINR) ($1.92; $16.3M market cap) - On Monday we highlighted a definitive agreement WINR entered into with PLAYlive Nation to acquire 44 franchised gaming centers. Today, WINR it has closed the acquisition.

“I look forward to increasing the focus of current and future PLAYlive Gaming Centers on esports, as we integrate the Simplicity Esports brand.We expect that competitive tournaments, grass roots community leagues, and special events centered around esports will attract a broadened population of gamers, from diverse backgrounds, to our Gaming Centers.Having a nationwide footprint of esports Gaming Centers gives us the opportunity to allow our fan base to meet, engage, and play against our professional players, as they tour the country and stop in for unique promotional events.”

The equity owners of PLAYlive received 750,000 shares of Simplicity Esports restricted common stock as full consideration for the acquisition, demonstrating the former PLAYlive owners’ confidence in Simplicity Esports and its management.

We are surprised that only 750,000 shares were issued, given the amount of locations acquired in the deal. Unfortunately, the Company has still not provided financials which we find a little puzzling.

Research

Mon, 29 Jul 2019 15:38:08 GMT

Simplicity Esports And Gaming Company (OTC:WINR) ($1.60; $13.5M market cap) - In our April 3, 2019 e-mail, we discussed the hype around eSports and the potential for short-term momentum traders getting involved with some of the names in the space. WINR operates as a virtual reality gaming and sports entertainment company in the United States and India.

Today, WINR announced it has entered a definitive agreement to acquire PLAYlive Nation in an all stock transaction. Founded in 2009, PLAYlive has a network of 44 franchised Gaming Centers across 11 states, serving over 150,000 unique gamers annually.

Jed Kaplan, CEO of Simplicity Esports, stated, “I am proud to announce the acquisition of PLAYlive which further demonstrates management’s commitment to reach our aforementioned goal to operate 50 Esports Gaming Centers. PLAYlive combined with existing Simplicity Esports Gaming Centers, represents the largest brick and mortar footprint of Esports Gaming Centers, affiliated with an esports organization in North America. We intend to leverage our vast footprint to further implement our brick and click approach connecting esports fans, players, gamers and influencers on a large scale, thereby representing attractive opportunities for corporate partnerships. Simplicity Esports will host competitive tournaments, grass roots community leagues, and special events connecting both professional and casual gamers with our brand.”

CEO of PLAYlive, Duncan Wood noted, “Joining forces with the first pure play publicly traded esports organization in North America is extremely exciting. The combination of our companies will create an industry leader and define the future of Esports Gaming Centers. My confidence in Simplicity Esports’ management’s ability to increase shareholder value, is reflected in my receiving restricted shares of common stock as consideration for the transaction.”

There are no financial details in the press release, however, from a quick online search, it seems that a location may average roughly $40k to $50k in annual sales.

It's also unclear how much WINR will pay to complete the all stock transaction.

The underlying warrants trade under the symbol WINRW. They currently show an exercise price of $11.50 with expiration date of November 2023. However, there is an amendment to the agreement that shows that the company may have reduced the exercise price to $4.00 from $11.50.

Research

Wed, 12 Jun 2019 15:38:21 GMT

Simplicity Esports And Gaming Company (OTC:WINR) ($1.81; $15.3M market cap) - In our April 3, 2019 e-mail, we discussed the hype around eSports and the potential for short-term momentum traders getting involved with some of the names in the space. WINR operates as a virtual reality gaming and sports entertainment company in the United States and India.

Yesterday, WINR announced the retirement of 2.6 million shares of its common stock:

“2,000,000 shares of common stock which were issued to the founder of Smaaash Entertainment Private Ltd (“Smaaash”), but held in escrow, pending an exchange of Simplicity Esports’ shares for a larger equity stake in Smaaash. Although Simplicity Esports did not increase its equity ownership in Smaaash via completion of the share exchange, Simplicity Esports still owns 294,360 shares of Smaaash. Additionally, Simplicity Esports also retired 603,343 shares from treasury that were acquired as part of a forward purchase agreement with two institutional investors from the 2017 initial public offering.”

WINR had 8.49 million shares prior to this announcement. It is unclear to us if the 2 million shares held in escrow are part of the 8.49 million shares outstanding. We have reached out to management to set up a call. We want to gain a clear understanding of the current capital structure, taking into account the share cancellations as well as the recent private placement the CEO participated in.

Research

Fri, 26 Apr 2019 16:00:48 GMT

In our April 3, 2019 e-mail, we discussed the hype around eSports and the potential for short-term momentum traders getting involved with some of the names in the space.

We highlighted SIMPLICITY ESPORTS AND GAMING Company (OTC:WINR) ($1.75; $13.8M market cap), a once NASDAQ listed stock that was delisted due to its inability to meet all the necessary requirements to remain as a listed stock. The company is an established brand in the eSports industry with an engaged fan base competing in popular games across different genres.

Two articles that we came across recently discuss the current environment surrounding the eSports industry. The first is an article from The Street called “Want to Join the eSports Action? Here’s How”.

The second is the Facebook page of WINR advertising the Company’s soft launch opening weekend for its Boca Raton location. As we stated in our last note, our co-founder Maj Soueidan lives in Fort Lauderdale, so he'll definitely be planning a site visit this weekend

Research

Wed, 03 Apr 2019 15:16:01 GMT

Esports Hype

First Bitcoin, then marijuana; now it looks like the eSports hype may begin to attract short-term momo (momentum) investors. While some may see this as a distraction from looking for undervalued quality microcaps, we will begin tracking some eSports names closely to determine which ones may be hype-only versus those of substance. The first two stocks that fit a more exploratory look are:

SIMPLICITY ESPORTS AND GAMING Company (OTC:WINR) ($1.78; $10.2M market cap) was a NASDAQ listed stock which was delisted due to the Company not meeting all the necessary requirements to remain as a listed stock. The company is an established brand in the Esports industry with an engaged fan base competing in popular games across different genres.

In an 8-K filed yesterday, management commented on the delisting as well as provided aninvestor presentation and explanation of restricted stock units awarded to several members of management. Compensation tied to RSU’s typically aligns management's efforts along with shareholders in seeing the stock move higher.

On March 29, 2019, WINR announced the commencement of franchise strategy and acceleration of Esports Center openings. The company says it has identified locations for its first five corporate-owned retail Esports Gaming Centers. The five locations are throughout Florida, with the first in Boca Raton which is expected to have its grand opening in April 2019.

Shares of WINR have risen from $0.75 to current levels of around $1.75 since the news of the franchise openings crossed the wires. As mentioned above, WINR is opening its first location in Boca Raton Florida this month. Being that our Geo co-founder Maj Soueidan lives in Fort Lauderdale, this will be right in his backyard. So, he'll definitely be paying the company a visit.