UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
SCHEDULE 14A
 
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
 
Filed by the Registrant [X]
Filed by a Party other than the Registrant [  ]
 
Check the appropriate box:
 
[  ]
 
Preliminary Proxy Statement
[  ]
 
Confidential, for Use of the SEC Only (as permitted by Rule 14a-6(e)(2))
[X]
 
Definitive Proxy Statement
[  ]
 
Definitive Additional Materials
[  ]
 
Soliciting Material Pursuant to 14a-12
 
SUPER LEAGUE GAMING, INC.
(Name of Registrant as Specified in Its Charter)
 
_________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
[X]      No fee required.
[  ]      Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
 
1.
 
Title of each class of securities to which transaction applies:
2.
 
Aggregate number of securities to which transaction applies:
3.
 
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
4.
 
Proposed maximum aggregate value of transaction:
5.
 
Total fee paid:
 
[  ]      Fee paid previously with preliminary materials.
[  ]     Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
1.
 
Amount Previously Paid:
2.
 
Form, Schedule or Registration Statement No.:
3.
 
Filing Party:
4.
 
Date Filed:
  
 

 


 
 
 
 
Super League Gaming, Inc.
  2912 Colorado Ave., Suite #203
Santa Monica, California 90404
(802) 294-2754 
 
  April 30, 2021
 
Dear Fellow Stockholder:
 
On behalf of our management team and Board of Directors, I hope that you and your loved ones are healthy and safe as the world continues to operate amidst the uncertainty caused by the COVID-19 pandemic.
 
You are cordially invited to attend the 2021 annual meeting of stockholders (the “Annual Meeting” or the “Meeting”) of Super League Gaming, Inc. (the “Company”) to be held at 10:00 a.m., Pacific Time, on May 27, 2021. In addition to certain routine matters, including electing two Class I directors to our Board of Directors and ratifying the appointment of Baker Tilly US, LLP, our registered public accounting firm, we are asking our stockholders to approve of the issuance of a total of 12,582,204 shares of our common stock in exchange for all issued and outstanding securities of Mobcrush Streaming, Inc. (“Mobcrush”) pursuant to the Agreement and Plan of Merger executed on March 9, 2021 (the “Merger”) (the “Mobcrush Issuance Proposal”). We believe the Merger with Mobcrush will provide significant value to the Company and our stockholders, as we expect the addition of Mobcrush provide the Company with additional revenue, synergistic product offerings that provide breadth to our overall product portfolio, and additional key personnel with expertise in our sector. Please note, we are asking stockholders to approve of the Mobcrush Issuance Proposal in order to comply with Listing Rule 5635 of the Nasdaq Stock Market, and we are not asking our stockholders to approve of the Merger.
 
In addition, we are asking stockholders to approve of an amendment to our Amended and Restated 2014 Stock Option and Incentive Plan (the “2014 Plan”) to increase the number of shares of common stock available for issuable under the 2014 Plan (the “2014 Plan Amendment”). If approve, the 2014 Plan Amendment not only enable us to continue to utilize the 2014 Plan as equity compensation as a way to align the interests of our employees, consultants and directors with those of our stockholders, but the increase to the number of shares authorized under the 2014 Plan will provide a sufficient number of shares to allow for the issuance of options to Mobcrush employees following completion of the Merger (the “2014 Plan Proposal”). Details of the Mobcrush Issuance Proposal, the 2014 Plan Proposal and all other matters to be considered at the Meeting are included in the accompanying proxy statement.
 
Due to concerns about the COVID-19 pandemic and the related protocols implemented by federal, state and local governments, the Annual Meeting will be held via the internet and will be a completely virtual meeting. You may attend and submit questions during the Annual Meeting on the Internet at  https://agm.issuerdirect.com/slgg.
 
  Prior to the Meeting, and during the Meeting until polls are closed, you may vote by logging into https://www.iproxydirect.com/SLGG using your shareholder information provided on the proxy card accompanying this proxy statement.
 
Your vote is important, regardless of the number of shares you hold. We will begin mailing this proxy statement, copies of our Annual Report on Form 10-K for the year ended December 31, 2020 (the “Annual Report”) and all other related materials on or about May 3, 2021. Even if you do not plan to attend the Annual Meeting, please read the enclosed proxy statement and vote your shares as promptly as possible by the internet, telephone or mail. Voting promptly will save the Company additional expense in soliciting proxies and will ensure that your shares are represented at the Meeting.
   
We look forward to your participation in the Annual Meeting by attending virtually or by submitting your proxy.
 
 
Sincerely,
 
 
/s/ Ann Hand
 
Ann Hand
 
Chief Executive Officer, President and Chair
   

 

-2-
 
 
Super League Gaming, Inc.
2912 Colorado Avenue, Suite #203
Santa Monica, California 90404
(802) 294-2754  
 
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 27, 2021
 
Dear Stockholders of Super League Gaming, Inc.:
 
              We are pleased to invite you to attend the 2021 annual meeting of stockholders (the “Annual Meeting” or the “Meeting”) of Super League Gaming, Inc., a Delaware corporation (the “Company”), which takes place on May 27, 2021 at 10:00 a.m., Pacific Time. The Annual Meeting will be a virtual meeting, held on the Internet at  https://agm.issuerdirect.com/slgg, for the following purposes:
 
1.
to re-elect two of our current directors to serve as Class I directors until our 2024 annual meeting of stockholders, or until their respective successor is duly elected and qualified;
 
2.
to approve of an amendment to our Amended and Restated 2014 Stock Option and Incentive Plan (the “2014 Plan Amendment”) to increase the number of shares of common stock available for issuance thereunder to a total of 5.0 million shares (the “2014 Plan Proposal”);
 
3.
to ratify the appointment of Baker Tilly US, LLP as our independent auditors for the year ending December 31, 2021;
 
4.
to authorize, for purposes of complying with Nasdaq Listing Rule 5635, the issuance of 12,582,204 shares of our common stock, pursuant to the terms of the Agreement and Plan of Merger, dated March 9, 2021, by and among the Company, Mobcrush Streaming, Inc. (“Mobcrush”), and the other parties thereto, which amount is in excess of 20% of our common stock currently issued and outstanding and will result in certain Mobcrush stockholders becoming holders of 20% or more of our outstanding common stock following completion of the Merger (the “Mobcrush Issuance Proposal”);
 
5.
to approve a proposal to grant discretionary authority to adjourn the Meeting, if necessary, to solicit additional proxies (the “Adjournment Proposal”); and
 
6.
to vote upon such other matters as may properly come before the Annual Meeting and any adjournment or postponement thereof.
 
These matters are more fully discussed in the attached proxy statement.
 
Beginning on or about May 3, 2021, we mailed copies of this proxy statement, our Annual Report on Form 10-K for the year ended December 31, 2020 (the “Annual Report”) and other related materials to stockholders entitled to receive notice of and to vote at the Meeting. Please refer to these materials for instructions regarding virtual attendance at the Annual Meeting and how to submit your vote for the proposals described in this proxy statement. This proxy statement and the Annual Report both are available online at: https://www.iproxydirect.com/SLGG
 
 
 

-3-
 
 
The close of business on March 30, 2021 (the “Record Date”) has been fixed as the Record Date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting or any adjournments or postponements thereof. Only holders of record of our common stock at the close of business on the Record Date are entitled to notice of, and to vote at, the Annual Meeting. A complete list of stockholders entitled to vote at the Annual Meeting will be available for examination by any of our stockholders for purposes pertaining to the Annual Meeting at our corporate offices, located at 2912 Colorado Avenue, Suite #203, Santa Monica, California 90404, during normal business hours for a period of ten days prior to the Annual Meeting, and at the Annual Meeting.
    
Whether or not you expect to virtually attend the Meeting, we urge you to vote your shares as promptly as possible by Internet or telephone so that your shares may be represented and voted at the Annual Meeting. If your shares are held in the name of a bank, broker or other fiduciary, please follow the instructions on the voting instruction card furnished by the record holder.
 
Our Board of Directors recommends that you vote “FOR” each of the Class I director nominees identified in Proposal No. 1 and “FOR” Proposals No. 2, 3, 4 and 5. Each of these Proposals are described in detail in the accompanying Proxy Statement.
 
 
COPIES OF
THE ANNUAL REPORT AND PROXY STATEMENT ARE AVAILABLE ONLINE AT:
https://www.iproxydirect.com/SLGG
 
 
By Order of the Board of Directors,
 
 
/s/ David Steigelfest
 
David Steigelfest
 
Chief Technology Officer, Corporate Secretary and Director
Santa Monica, California
April 30, 2021
 
 

-4-
 
Super League Gaming, Inc.
2912 Colorado Avenue, Suite #203
Santa Monica, California 90404
Tel. (802) 294-2754
 
PROXY STATEMENT
 
The enclosed proxy is solicited on behalf of the Board of Directors (“Board”) of Super League Gaming, Inc., a Delaware corporation (the “Company”), for use at the Company’s 2021 annual meeting of stockholders (the “Annual Meeting” or the “Meeting”). Due to concerns surrounding the ongoing COVID-19 pandemic and to assist in protecting the health and well-being of our stockholders and employees, the Meeting will take place exclusively in a virtual meeting format on May 27, 2021, at 10:00 a.m., Pacific Time, and will be held via the Internet at: https://agm.issuerdirect.com/slgg.
 
Beginning on or about May 3, 2021, we mailed copies of this proxy statement, our Annual Report on Form 10-K for the year ended December 31, 2020 (the “Annual Report”) and other related materials. Please refer to these materials for instructions regarding virtual attendance at the Annual Meeting and how to submit your vote for the proposals described in this proxy statement.
 
This proxy statement and the Annual Report can also be accessed free of charge online as of May 3, 2021 at: https://www.iproxydirect.com/SLGG
 
Voting
 
The specific proposals to be considered and acted upon at our Annual Meeting are each described in this proxy statement. Only holders of our common stock, par value $0.001 per share, as of the close of business on March 30, 2021 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting. On the Record Date, there were 24,976,491 shares of common stock issued and outstanding. Each holder of common stock is entitled to one vote for each share held as of the Record Date.
 
Quorum
 
In order for any business to be conducted at the Annual Meeting, a quorum must be present. The presence at the Annual Meeting, either by virtual attendance or by proxy, of holders of our common stock entitled to vote and representing at least a majority of our outstanding voting power will constitute a quorum for the transaction of business. If you submit a properly executed proxy, regardless of whether you abstain from voting on one or more matters, your shares will be counted as present at the Annual Meeting for the purpose of establishing a quorum. Shares that constitute broker non-votes will also be counted as present at the Annual Meeting for the purpose of establishing a quorum. If a quorum is not present at the scheduled time of the Annual Meeting, the stockholders who are present may adjourn the Annual Meeting until a quorum is present. The time and place of the adjourned Annual Meeting will be announced at the time the adjournment is taken, and no other notice will be given. An adjournment will have no effect on the business that may be conducted at the Annual Meeting. 
 
Attendance at the Virtual Special Meeting
 
We will host the virtual Meeting live online, via Internet webcast. You may attend the Meeting virtually by visiting https://agm.issuerdirect.com/slgg. The Internet webcast will start at 10:00 a.m., Pacific Time, on May 27, 2021.
 
 
 
-5-
 
 
To access the virtual Meeting, please go to https://agm.issuerdirect.com/slgg. You will have the option to log in to the virtual Meeting as a “Stockholder” with a control number or as a “Guest.” If you are a stockholder of record as of the Record Date, you may log in as a “Stockholder” using the control number and password for the Meeting, both of which can be found on your proxy card. If you are not a stockholder of record, but hold shares through an intermediary, such as a bank or broker, trustee or nominee (sometimes referred to as holding in “street name”), you may attend the Meeting as “Guest” by entering your name and email address. As a “Guest”, you will have access to the Meeting materials and will be able to ask questions during the Meeting, but you will not be able to vote during the Meeting.
 
If you hold your shares through an intermediary, such as a bank or broker, and you desire to vote during the Meeting, you must register in advance to attend the Meeting as a “Stockholder”. To register to attend the virtual Meeting as a “Stockholder”, you must provide proof of beneficial ownership as of the Record Date, such as an account statement, legal proxy from your broker, or similar evidence of ownership along with your name and email address to Issuer Direct.
 
Whether you attend the Meeting as a “Stockholder” or as a “Guest”, please allow yourself ample time for the online check-in procedures.
 
Questions at the Special Meeting
 
By accessing https://agm.issuerdirect.com/slgg on the Internet, our stockholders will be able to submit questions in writing in advance of or during the Meeting, vote, view the Meeting procedures, and obtain copies of proxy materials. Stockholders will need their unique control number which appears on the proxy card accompanying this Proxy Statement and the instructions that accompanied the proxy materials.
 
Voting
 
If you are a stockholder of record as of the Record Date, there are four ways you can vote:
 
(1)
By the Internet: If you are a stockholder as of the Record Date, you may vote over the Internet by following the instructions provided on your proxy card.
 
(2)
By Telephone: You may vote by telephone by following the instructions on your proxy card.
 
(3)
By Postal Mail: If you requested printed copies of proxy materials and are a stockholder as of the Record Date, you may vote by mailing your proxy as described in the proxy materials.
 
(4)
During the Meeting: You will have the ability to attend the virtual Meeting and vote online via the Internet during the Meeting. The Meeting will be a virtual only meeting and can be accessed on the Internet at https://agm.issuerdirect.com/slgg. Submitting a proxy will not prevent a stockholder from attending the Meeting virtually, revoking an earlier-submitted proxy in accordance with the process outlined below and voting online during the Meeting.
  
In order to be counted, proxies submitted electronically by telephone or the Internet must be received by 11:59 p.m., Eastern Standard Time, on May 26, 2021. Proxies submitted by postal mail must be received before the start of the virtual Meeting.
 
If you hold your shares through a bank or broker, please follow their instructions.
 
  
 
-6-
 
 
Required Vote for Approval
 
The vote required for each proposal and the treatment and effect of abstentions and broker non-votes with respect to each proposal is as follows:
 
No.
 
Proposal  
 
Vote Required
1.
 
Election of the two Class I director nominees named in this proxy statement, each for a term of three years.
 
For each director, the number of votes cast for the director’s election must exceed the number of votes withheld or cast against the director’s election.
 
2
 
Approval of an amendment to our Amended and Restated 2014 Stock Option and Incentive Plan (the “2014 Plan Amendment”) to increase the number of shares of common stock available for issuance thereunder to a total of 5.0 million shares (the “2014 Plan Proposal”).
 
 
Affirmative vote of a majority of the votes cast.
3
 
Ratification of the appointment of Baker Tilly US, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2021.
 
 
Affirmative vote of a majority of the votes cast.
4
 
For purposes of complying with Nasdaq Listing Rule 5635, approval of the issuance of 12,582,204 shares of our common stock, pursuant to the terms of the Agreement and Plan of Merger, dated March 9, 2021, by and among the Company, Mobcrush Streaming, Inc. (“Mobcrush”), and the other parties thereto, which amount is in excess of 20% of our common stock currently issued and outstanding and will result in certain Mobcrush stockholders becoming holders of 20% or more of our outstanding common stock following completion of the Merger (the “Mobcrush Issuance Proposal”).
 
 
Affirmative vote of a majority of the votes cast.
5
 
Approval of a proposal to grant discretionary authority to adjourn the Meeting, if necessary, to solicit additional proxies (the “Adjournment Proposal”).
 
Affirmative vote of a majority of the votes cast.
 
Broker Non-Votes
 
A “broker non-vote” occurs when a nominee (typically a broker or bank) holding shares for a beneficial owner (typically referred to as shares being held in “street name”) submits a proxy for the Annual Meeting, but does not vote on a particular proposal because the nominee has not received voting instructions from the beneficial owner and does not have discretionary authority to vote the shares with respect to that proposal.
 
Brokers and other nominees may vote on “routine” proposals on behalf of beneficial owners who have not furnished voting instructions, subject to the rules applicable to broker nominees concerning transmission of proxy materials to beneficial owners, and subject to any proxy voting policies and procedures of those firms. The ratification of the independent registered public accountants, for example, is a routine proposal. Brokers and other nominees may not vote on “non-routine” proposals, unless they have received voting instructions from the beneficial owner. The election of directors is considered a “non-routine” proposal. This means that brokers and other firms must obtain voting instructions from the beneficial owner to vote on these matters; otherwise they will not be able to cast a vote for such “non-routine” proposal. If your shares are held in the name of a broker, bank or other nominee, please follow their voting instructions so you can instruct your broker on how to vote your shares.
 
 
 
-7-
 
 
Voting and Revocation of Proxies
 
If your proxy is properly returned to the Company, the shares represented thereby will be voted at the Annual Meeting in accordance with the instructions specified thereon. If you return your proxy without specifying how the shares represented thereby are to be voted, the proxy will be voted (i) FOR the election of the two Class I director nominees identified in this proxy statement, (ii) FOR approval of the 2014 Plan Proposal, (iii) FOR ratification of the appointment of Baker Tilly US, LLP as our independent auditors for the current fiscal year, (iv) FOR approval of the Mobcrush Issuance Proposal, (v) FOR approval of the Adjournment Proposal and (vi) in the discretion of the proxy holders on any other matter that may properly come before the Annual Meeting or any adjournment or postponement thereof.
 
You may revoke or change your proxy at any time before the Annual Meeting by filing, with our Corporate Secretary at our principal executive offices, located at 2912 Colorado Avenue, Suite #203, Santa Monica, California 90404, a notice of revocation or another signed proxy with a later date. You may also revoke your proxy by attending the Annual Meeting and voting in person. Attendance at the Annual Meeting alone will not revoke your proxy. If you are a stockholder whose shares are not registered in your own name, you will need additional documentation from your broker or record holder to vote personally at the Annual Meeting.
 
No Appraisal Rights
 
The stockholders of the Company have no dissenter’s or appraisal rights in connection with any of the proposals described herein.
 
Solicitation
 
We will bear the entire cost of solicitation, including the preparation, printing and mailing of this Proxy Statement, the proxy card and any other solicitation materials or services we may use in connection with the virtual Meeting or any adjournment thereof, as well as the preparation and posting of all proxy materials furnished to the stockholders in connection with the Meeting or any adjournment thereof. We have retained Alliance Advisors to assist in the solicitation of proxies for the Meeting. We expect that the remuneration to Alliance Advisors for its services will be approximately $15,000, plus reimbursement for out-of-pocket expenses.
 
Copies of any solicitation materials will be furnished to brokerage houses, fiduciaries and custodians holding shares in their names that are beneficially owned by others so that they may forward the solicitation materials to such beneficial owners. In addition, we may reimburse such persons for their costs in forwarding the solicitation materials to such beneficial owners. The original solicitation of proxies may be supplemented by a solicitation, by telephone, email or other means, by our directors, officers or employees. No additional compensation will be paid to these individuals for any such services.
 
 
 
 
 
-8-
 
 
TABLE OF CONTENTS
 
 
Page
 
10
15
16
26
28
36
37
42
43
45
48
61
63
65
66
66
78
79
80
81
82
82
83
83
 
 
A-1
B-1
C-1
D-1
E-1
F-1
 

-9-
 
 
 
 
SUMMARY
 
This summary highlights selected information from this proxy statement. It may not contain all of the information that is important to you. You are urged to read carefully the entire proxy statement and the other documents attached to or referred to in this proxy statement in order to fully understand each proposal to be presented to stockholders for approval at the Meeting, including the Mobcrush Issuance Proposal. See “Where You Can Find More Information” beginning on page 70 of this proxy statement. Each item in this summary refers to the page of this proxy statement on which the more detailed discussion of that subject begins.
 
In this proxy statement, we frequently use the terms “Super League,” “the Company,” “we,” “our” and “us” to refer to Super League Gaming, Inc., and its subsidiaries. We use the term “Merger Sub” to refer to our wholly owned subsidiary, SLG Merger Sub II, Inc., a Delaware corporation.
 
The Companies
 
Mobcrush Streaming, Inc.
 
Mobcrush Streaming, Inc. is a company incorporated under the laws of the state of Delaware in May 2020, and a successor company to Mobcrush, Inc., a company incorporated under the laws of the state of Delaware on July 17, 2014. On May 4, 2020, Mobcrush, Inc. completed an assignment for the benefit of creditors pursuant to a formal asset purchase agreement, whereby Mobcrush, Inc. transferred to Mobcrush ownership in and to certain assets of Mobcrush, Inc. Please see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Mobcrush” on page 61 of this proxy statement for additional historical information about Mobcrush and Mobcrush, Inc. Mobcrush is headquartered in Santa Monica, California.
 
Mobcrush is a leading gaming technology platform that empowers gamers and influencers to reach all of their fans simultaneously across live streaming and social media platforms. Mobcrush has been downloaded by more than 600,000 creators who generate almost two million hours of original content annually and have accumulated more than 4.5 billion fans and subscribers. Along with free multi-streaming distribution, Mobcrush’s proprietary technology, Replay Engine, gives gamers the ability to capture and share amazing highlight moments in real time via artificial intelligence with a single tap. Mobcrush powers full-service live streaming, influencer activations, and esports content creation and distribution at scale. Mobcrush’s Sponsored Live Breaks and other advertising solutions create authentic connections for brands with creators and their fans across a broad spectrum of video game entertainment. Mobcrush also owns and operates InPVP’s Mineville, one of six official Microsoft Minecraft partner servers, enjoyed by more than 22 million unique players annually. Through its longstanding commitment to advancing the intersection of gameplay, live streaming, and content creation, Mobcrush continues to be a leading platform helping players and creators pursue their passion and make a living while doing so.
 
Mobcrush's main office is located at 100 Wilshire Blvd., Suite 1200, Santa Monica, California, 90401, and its telephone number is (424) 291-2103. Mobcrush's website address is www.mobcrush.com.
 
Super League Gaming, Inc.
 
We are 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.

 
 
-10-
 
  
 
Our common stock is listed on the Nasdaq Capital Market under the symbol "SLGG". We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, as such, we file and furnish reports and other information with the SEC from time to time. See the section of this proxy statement entitled "Where You Can Find Additional Information." For additional information with respect to the Company, please see our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC on March 19, 2021, and which is incorporated by reference herein and a copy of which accompanies this proxy statement.
 
Super League is a Delaware corporation. The Company's principal executive offices are located at 2912 Colorado Avenue, Suite 203, Santa Monica, California, 90404, and its telephone number is (802) 294-2754. Our website address is www.superleague.com. The contents of the Company’s Internet site are not incorporated by reference herein and are not deemed to be part of this proxy statement.
 
The Merger and the Merger Agreement (see pages 49 and 56)
 
We have entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which it is contemplated that Mobcrush will merge with and into our wholly owned subsidiary, Merger Sub, and, if consummated, will result in Mobcrush becoming a wholly owned subsidiary of Super League (the “Merger”).
 
Pursuant to the terms of the Merger Agreement, we will issue approximately 12,582,204 shares of our common stock to Mobcrush stockholders in consideration for the acquisition by Merger Sub of all issued and outstanding securities of Mobcrush, which will represent approximately 35% of our outstanding common stock following the issuance, based on our issued and outstanding common stock as of the Record Date.
 
The shares of common stock being issued to the Mobcrush shareholders pursuant to the Merger Agreement are referred to in this proxy statement as the “Merger Consideration”. For a further discussion of the Merger Agreement, see “The Merger Agreement” beginning on page 56. A copy of the Merger Agreement is attached to this proxy statement as Annex A.
 
Our Reasons for the Merger (see pages 52-54)
 
We believe the combination of Super League and Mobcrush brings together industry-leading technology platforms and strengthens Super League's position as a leading gaming community and content platform, creating significantly enhanced scale and reach across multiple platforms and user-bases. Mobcrush's services are complementary to the Company's own offerings, strengthening the Company's position within the industry. The combined company will be a provider of video gaming and esports entertainment across multiple platforms, offering greater access and broader availability of service offerings to a combined user base of more than 3.0 million per month, or 400,000 users per day. For a further discussion of the reasons why we believe the Merger is in the best interest of the Company and our stockholders, see “Reasons for the Merger” beginning on page 52.
 
Voting Agreements
 
Pursuant to the Merger Agreement, certain stockholders of Mobcrush and the Company (collectively, the “Voting Stockholders”) will enter into voting agreements (collectively, the “Voting Agreements”) pursuant to which the Voting Stockholders will agree, among other things, to (i) vote in favor of the Merger Agreement and the transactions contemplated thereby and (ii) be bound by certain other covenants and agreements related to the Merger. A form of the Voting Agreement is included as an exhibit to the Merger Agreement, which is attached to this proxy statement as Annex B.
 

 
 
-11-
 
 
 
 
Registration Rights Agreement
 
At the closing of the Merger, the Company, Mike Wann, and certain other holders of Mobcrush Preferred Stock (Mike Wann and such holders of Mobcrush Preferred stock are collectively, the "Rights Parties") will enter into a registration rights agreement (the “Registration Rights Agreement”) pursuant to which, among other matters, the Rights Parties will be granted certain customary registration rights with respect to the shares acquired pursuant to the Merger. A form of the Registration Rights Agreement is included as an exhibit to the Merger Agreement, which is attached to this proxy statement as Annex C.
 
Treatment of Mobcrush Options (see page 55)
 
Immediately prior to the closing of the Merger, we expect there will be approximately 1,629,000 vested options and 1,687,000 unvested options to acquire Mobcrush common stock outstanding. Immediately prior to the effective time of the Merger, each vested option to acquire shares of Mobcrush common stock will be exercised so that, at the effective time of the Merger, shares of Mobcrush common stock issued upon exercise of these vested options will receive shares of Super League common stock issuable as Merger Consideration.
 
Unvested options to acquire shares of Mobcrush common stock that are outstanding immediately prior to the effective time shall be terminated, and a number of options to purchase shares of Super League common stock will be issued to replace the cancelled options in a manner consistent with options currently granted by Super League under the 2014 Plan (the “Replacement Options”). Currently, we expect to issue an aggregate total of approximately 500,000 Replacement Options upon closing of the Merger.
 
Conditions to Completion of the Merger (see page 45)
 
Several conditions must be satisfied or waived before the Company and Mobcrush complete the Merger, including, but not limited to:
 
(i)
approval of the issuance of the Merger Consideration at the Meeting, which is being presented to our stockholders in Proposal No. 4, the Mobcrush Issuance Proposal, beginning on page 46 of this proxy statement;
(ii)
approval of the Merger and Merger Agreement by holders of a majority of Mobcrush’s outstanding voting securities at an annual or special meeting of Mobcrush stockholders, or by written consent;
(iii)
the execution and delivery of the Voting Agreements by the Voting Stockholders;
(iv)
the execution and delivery of the Registration Rights Agreement by all parties;
(v)
receipt of any required regulatory approvals, including approval of the listing of the shares of common stock issuable as Merger Consideration by the Nasdaq Stock Market;
(vi)
the execution and delivery of receipt by each party of the waivers, permits, consents, approvals or other authorizations required to complete the Merger, as specified in the Merger Agreement; and
(vii)
certain other customary conditions.
 
Conduct of the Company’s Business and Mobcrush’s Business Prior to Closing (see page 56)
 
In the Merger Agreement, the Company and Mobcrush have agreed that, between the date of the Merger Agreement and the closing of the proposed Merger, each respective party will continue to carry on their respective businesses in the ordinary course and will work to preserve the attendant goodwill and assets of their respective businesses.
 
 
 
 
-12-
 
 
 
Completion of the Merger
 
It is currently anticipated that the Merger will close as soon as possible after all requisite approvals are obtained and all conditions have been satisfied, or where not prohibited by applicable law, waived.
 
The Company’s Board of Directors reserves the right to cancel or defer the timing of the Merger, even if the Company’s stockholders vote to approve the Merger Consideration Proposal and the other conditions to completion of the Merger are satisfied or waived, if the Board of Directors determines that the Merger is no longer advisable and in the best interests of the Company and its stockholders.
 
Risk Factors (see page 58)
 
Before voting on any of the proposals described in this proxy statement, you should carefully consider all of the information contained in this proxy statement, as well as the specific risk factors under the heading “Risk Factors” in this proxy statement and the accompanying Annual Report on Form 10-K for the fiscal-year ended December 31, 2020, filed with the SEC on March 19, 2021.
 
Opinion of the Financial Advisor for the Company (see page 54)
 
 In considering whether to recommend approval of the issuance of the Merger Consideration, the Board received an opinion of Economic Partners on April 21, 2021, that the shares of the Company’s common stock issuable as Merger Consideration was fair, from a financial point of view, to the Company, as of the date of the opinion.
 
The full text of the written opinion of Economic Partners is attached to this proxy statement at Annex D. You are encouraged to read the opinion carefully and in its entirety for a description of the assumptions made, procedures followed, matters considered and limitations on the review undertaken. The opinion of Economic Partners was delivered to the Board and addresses only the fairness, from a financial point of view, to the Company of the shares of the Company’s common stock issuable as Merger Consideration . The opinion does not address any other aspect of the Merger, nor does it constitute a recommendation to any stockholder as to how such stockholder should vote or act with respect to any matters related to the Merger or the Merger Agreement. You should carefully consider the discussion of the analysis provided by Economic Partners under the heading “Information About the Merger and Mobcrush — Opinion of Economic Partners” beginning on page 54.
 
Vote Required to Approve the Issuance of the Shares (see page 46)
 
The Company’s Common Stock is listed on the Nasdaq Capital Market (“Nasdaq”) and, as a result, the Company is subject to Nasdaq’s Listing Rules, including Nasdaq Listing Rules 5635(a) and 5635(b). Such rules require stockholder approval for certain issuances of securities.
 
Termination of the Merger Agreement (see page 56)
 
The Merger Agreement contains certain customary termination rights by either the Company or Mobcrush, including if the Merger is not consummated by June 30, 2021.
 
 
 
 
-13-
 
 
 
Effect of the Merger on the Company’s Stockholders (see page 46)
 
Upon the closing of the Merger, the Company’s stockholders would own approximately 65% of the voting power of the Company, with the previous Mobcrush stockholders owning the remaining 35% of the voting power of the Company.
 
Composition of the Company’s Board of Directors
 
At the closing of the Merger, the Board will consist of eight directors and will be comprised of six members designated by Super League and two members designated by Mobcrush as follows: (i) Mike Wann and (ii) one additional member to be mutually agreed upon by Mike Wann and the other members of Super League’s Board of Directors, for which such director must meet the requirements of an "independent director" pursuant to Nasdaq rules and regulations.
 
Litigation Relating to the Merger
 
As of April 30, 2021, no complaints had been filed by purported Super League stockholders challenging the Merger, and no complaints had been filed by purported Mobcrush stockholders challenging the Merger.
 
Financial Statements of Super League
 
For the historical audited financial statements of the Company for its fiscal years ended December 31, 2020 and 2019, please see Super League’s Annual Report on Form 10-K for the year ended December 31, 2020, which is incorporated by reference herein, and is included as a part of the proxy materials made available to stockholders for purposes of the Meeting.

Financial Statements of Mobcrush (see page E-1)
 
For the audited financial statements of Mobcrush for its fiscal years ended December 31, 2020 and 2019, see “Index to Mobcrush's Consolidated Financial Statements” as Annex E.
 
Pro Forma Financial Statements of the Combined Company (See Annex F)
 
For the pro forma financial statements of the combined company in connection with the Merger, see “Unaudited Pro Forma Condensed Combined Financial Statements” as Annex F.
 
Other Matters to be Presented to Stockholders at the Meeting (see page 72)
 
In addition to the Mobcrush Issuance Proposal, holders of Super League common stock as of the Record Date will be asked to consider and vote on the following proposals:
 
to elect two Class I director nominees to the Company’s Board, each for three-year terms;
to approve the 2014 Plan Amendment, as further described in the 2014 Plan Proposal;
to ratify the appointment of Baker Tilly US, LLP as the Company’s registered public accounting firm for the year ending December 31, 2021; and
to approve the Adjournment Proposal.
 
Approval of the Mobcrush Issuance Proposal is required for completion of the Merger.
 
Recommendation of the Company Board of Directors
 
The Company’s Board of Directors has unanimously determined that issuance of the Merger Consideration in connection with the completion of the Merger is in the best interests of the Company and its stockholders and has approved the Merger, the Merger Agreement, and the Mobcrush Issuance Proposal set forth in this proxy statement. The Board of Directors recommends that the Company stockholders vote “FOR” the Mobcrush Issuance Proposal and the other proposals set forth in this proxy statement.
 
Stockholders Entitled to Vote (see page 5)
 
The Board of Directors has fixed the close of business on March 30, 2021 as the record date for the determination of stockholders entitled to receive notice of, and to vote at, the Annual Meeting.
 
 
 

 
 
-14-
 
 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
We make forward-looking statements in this Proxy Statement within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business. These statements may be preceded by, followed by or include the words “may,” “might,” “will,” “will likely result,” “should,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “continue,” “target” or similar expressions.
 
These forward-looking statements are based on information available to us as of the date they were made, and involve a number of risks and uncertainties which may cause them to turn out to be wrong. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:
 
overall strength and stability of general economic conditions and of the electronic video game sports (“esports”) industry in the United States and globally;
the impact of the recent coronavirus (COVID-19) pandemic and our response to it;
failure to consummate or realize the expected benefits of the acquisition of Mobcrush Streaming, Inc.;
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;
competition and the ability of our business to grow and manage growth profitably;
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;
our ability to consummate accretive acquisitions of third parties; and 
other risks and uncertainties described in the "Risk Factors" section of this proxy statement, as well as our Annual Report on Form 10-K for the year ended December 31, 2020, which is incorporated herein by reference.
 
 
 
 
-15-
 
 
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
 
PROPOSAL NO. 1
 
ELECTION OF TWO CLASS I DIRECTOR NOMINEES
 
General
 
Our Amended and Restated Bylaws (“Bylaws”) provide that the number of directors that constitute the entire Board of Directors (the “Board”) shall be fixed from time to time by resolution adopted by a majority of the entire Board, but that in no event shall the number be less than one. Our Board currently consists of the following six persons:
 
Ann Hand
Chief Executive Officer, President and Chair
Jeff Gehl
Independent Director
Kristin Patrick*
Independent Director
Mark Jung
Independent Director
David Steigelfest*
Chief Product Officer, Corporate Secretary and Director
Michael Keller
Independent Director
 
 ____________________
*
Director Nominees at the Annual Meeting
 
At our 2020 annual meeting of stockholders, our stockholders approved, and we effected an amendment to our Amended and Restated Certificate of Incorporation (our “Charter”) to classify our Board of Directors into three classes with staggered three-year terms (with the exception of the expiration of the initial Class I and Class II directors). Pursuant to this amendment to our Charter, our Board is now classified into three classes with staggered three-year terms (with the exception of the initial Class I and Class II directors), designated as follows:
 
Class I, comprised of two directors, Kristin Patrick and David Steigelfest, whose terms expire at the Annual Meeting and each of whom have been nominated by our Nominating and Governance Committee for re-election as the Class I directors at the Annual Meeting;
 
Class II, comprised of two directors, Jeff Gehl and Michael Keller (with their initial terms expiring at our 2022 annual meeting of stockholders); and
 
Class III, comprised of two directors, Ann Hand and Mark Jung (with their initial terms expiring at our 2023 annual meeting of stockholders).
 
Kristin Patrick and David Steigelfest, each of whom are currently serving terms which expire at our Annual Meeting, have been nominated by our Nominating and Governance Committee for election as the Class I directors at the Annual Meeting. If any of the director nominees is unable or unwilling to serve as a nominee for the office of director at the date of the Annual Meeting or any postponement or adjournment thereof, the proxies may be voted for a substitute nominee, designated by the proxy holders or by the present Board to fill such vacancy, or for the balance of those nominees named without nomination of a substitute, and the Board may be reduced accordingly. The Board has no reason to believe that any of such nominees will be unwilling or unable to serve if elected as a director.  
 
Required Vote and Recommendation
 
At the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated Kirstin Patrick and David Steigelfest for re-election as Class I directors, each for a three-year term.
 
Ms. Patrick and Mr. Steigelfest have each consented to being named as a director nominee in this proxy statement and agreed to serve if re-elected. Set forth below is information about the two director nominees, including each such individual’s principal occupation, business experience and qualifications that led the Company’s Board of Directors to conclude that each such director nominee should serve on the Board of Directors.
 

 

  The Board of Directors unanimously recommends that you vote FOR Ms. Patrick and Mr. Steigelfest.
 

 
-16-
 
 
Director Biographies 
 
The following section sets forth certain information regarding the nominees for election as directors and the standing directors of the Company.
 
Director Nominees with Terms Expiring at the Annual Meeting
 
Kristin Patrick
Independent Director
 
Ms. Patrick has served as a director on our Board since November 2018, and currently serves as President and Chief Marketing Officer of Eros Innovations, a position she has held since January 2019. Previously, Ms. Patrick served as Global Chief Marketing Officer of Soda Brand at Pepsico, Inc., a position she has held from June 2013 to January 2019. 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.
 
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.
 
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.
 

 
-17-
 
 
Continuing Directors
 
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. 
 
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.
 
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.
 
 
 
-18-
 
 
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.
 
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 a Bachelor 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.
 
 
 
-19-
 
 
Board Composition and Election of Directors
 
Board Composition
 
Our Board currently consists of the following six members:
 
Name
Age
Positions
Class
Director Since
Committee Memberships
 
A
CP
NCG
Ann Hand
52
Chief Executive Officer, President, Chair
Class III
2015
 
 
 
Jeff Gehl
52
Independent Director
Class II
2015
C

M
Mark Jung
58
Independent Director
Class III
2019
M
C
 
Michael Keller
50
Independent Director
Class II
2018
M
M
C
Kristin Patrick*
50
Independent Director Nominee
Class I
2018
 
M
M
David Steigelfest*
53
Chief Product Officer, Corporate Secretary and Director Nominee
Class I
2014



____________________
* – Director Nominee

A – Audit Committee
C – Committee Chair
CP – Compensation Committee
NCG – Nominating and Corporate Governance Committee
M – Committee Member
 
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 the following four of our six directors qualify as independent directors, as determined in accordance with the Listing Rule 5605 of the Nasdaq Stock Market: Messrs. Gehl, Keller and Jung, and Mr. Patrick. Nasdaq Listing Rule 5605 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 listing 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.
 


 
-20-
 
 
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, copies of which are available under the Corporate Governance section of our website at http://ir.superleague.com.
 
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. The Audit Committee met four times during the year ended December 31, 2020. 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;
 
 
 
-21-
 
 
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;
 
reviewing any earnings announcements and other public announcements regarding our results of operations;
 
preparing the report that the SEC requires in our annual proxy statement, upon becoming subject to the Exchange Act;
 
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);
 
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. The compensation committee met five times during the year ended December 31, 2020. 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;
 
 
 
-22-
 
 
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;
 
retaining, reviewing and assessing the independence of compensation advisers;
 
monitoring issues associated with CEO succession and management development;
 
overseeing and administering our equity incentive plans;
 
reviewing and making recommendations to our Board with respect to compensation of our executive officers and senior management;
 
reviewing and making recommendations to our Board with respect to director compensation;
 
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
 
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. The Nominating and Governance Committee met three times during the year ended December 31, 2020. 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;
 
leading the Board in its annual review of the Board’s performance;
 
recommending to the Board nominees for each Board committee and each committee chair;
 
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;
 
overseeing the process of succession planning of our CEO and other executive officers; and
 
developing and recommending to the Board corporate governance guidelines, including our Code of Business Conduct, applicable to the Company.
  
 
 
-23-
 
 
Board Diversity
 
Our nominating and governance committee is 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;
 
strong finance experience;
 
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 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.
 
Our Board’s Leadership Structure
 
Our Board has discretion to determine whether to separate or combine the roles of Chair and Chief Executive Officer. Ms. Hand, has served in both roles since 2015, and our Board continues to believe that her combined role is most advantageous to the Company and its stockholders. Ms. Hand possesses in-depth knowledge of the issues, opportunities and risks facing us, as well as our business and our industry and is best positioned to fulfill the Chair’s responsibility to develop meeting agendas that focus the Board’s time and attention on critical matters and to facilitate constructive dialogue among Board members on strategic issues.
 
In addition to Ms. Hand’s leadership, the Board maintains effective independent oversight through a number of governance practices, including, open and direct communication with management, input on meeting agendas, and regular executive sessions.
 
 
 
-24-
 
 
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 http://ir.superleague.com. 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 Delaware General Corporation Law (“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.
 
Stockholder Communications
 
If you wish to communicate with the Board of Directors, you may send your communication in writing to:
 
Super League Gaming, Inc.
2912 Colorado Avenue, Suite #203
Santa Monica, California 90404
Attn: Corporate Secretary
 
You must include your name and address in the written communication and indicate whether you are a stockholder of the Company. Our Corporate Secretary will review any communication received from a stockholder, and all material and appropriate communications from stockholders will be forwarded to the appropriate director or directors or committee of the Board of Directors based on the subject matter.
 
Section 16(a) Beneficial Ownership Reporting Compliances
 
Section 16(a) of the Exchange Act requires our officers, directors, and persons who beneficially own more than 10% of our common stock to file reports of ownership and changes in ownership with the SEC. Officers, directors, and greater-than-ten-percent shareholders are also required by the SEC to furnish us with copies of all Section 16(a) forms that they file.
 
Based solely on a review of copies of such reports furnished to our Company and representation that no other reports were required during the fiscal year ended December 31, 2020, we believe that all persons subject to the reporting requirements pursuant to Section 16(a) filed the required reports on a timely basis with the Securities and Exchange Commission.
 
 
 
-25-
 
 
NON-EXECUTIVE 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
 
 
Cash (1)
 
 
 
Equity (2)
 
Annual Retainer
 $25,000(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; providedhowever, 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 RSUs 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.

 
 
-26-
 
 
2020 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, 2020:
 
Name
 
 Fees Earned
or Paid
in Cash ($)
 
 
 
Stock
Awards($)(1)
 
 
 
Other
Compensation ($)
 
 
 
Total ($)
 
Current Directors
 
 
 
 
 
 
 
 
 
 
 
 
Jeff Gehl(2)
 $40,000 
 $86,000 
 $ 
 $126,000 
Mark Jung(3)(4)
 $40,000 
 $72,000 
 $90,000 
 $202,000 
Michael Keller(5)
 $38,000 
 $86,000 
 $ 
 $124,000 
Kristian Patrick(6)
 $28,000 
 $86,000 
 $ 
 $114,000 
Former Directors
    
    
    
    
Robert Stewart(7)
 $7,000 
 $ 
 $ 
 $7,000 
 
(1)
The following table presents: (a) the aggregate number of restricted stock units (“RSUs”) granted during the year ended December 31, 2020, the grant date fair values of which are reflected in the table above; (b) the aggregate number of outstanding unvested RSUs at December 31, 2020; and (c) the aggregate number of outstanding options (both vested and unvested) at December 31, 2020. All RSUs granted during the year ended December 31, 2020 vest in equal monthly installments over a 48-month period beginning on the grant date.
 
The grant date fair value is 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, 2020 and 2019, included in our Annual Report on Form 10-K for the year ended December 31, 2020, which is incorporated by reference into this prospectus. These amounts do not represent the actual value, if any, that may be realized by the individuals listed in the table.
 
 
   
 
    Restricted Stock Awards Listed in the Table Above 
 
 
Aggregate Awards as of
December 31, 2020
 
  Name
 
Number of
Unvested Shares of Restricted Stock
 
 
Number of Vested Shares of Restricted Stock
 
 
Aggregate Number of Unvested Restricted Stock Awards Outstanding
 
 
Aggregate Number of Options Outstanding
 
Current Directors
 
 
 
 
 
 
 
 
 
 
 
 
Gehl
  36,344 
  - 
  36,344 
  25,001 
Jung
  30,112 
  - 
  30,112 
  - 
Keller
  36,344 
  - 
  36,344 
  - 
Patrick
  36,344 
  - 
  36,344 
  - 
Former Directors
    
    
    
    
Stewart
  - 
  - 
  - 
  - 
 
(2)
Amounts paid to Mr. Gehl consist of his annual retainer and Audit Committee chair fees, as described above.
 
(3)
Amounts paid to Mr. Jung consist of his annual retainer, Compensation Committee chair fees, and Audit Committee member fees, as described above.
 
 
(4)
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, was extended through June 30, 2020, and continues on a month-to-month basis in 2021, upon mutual agreement of Mr. Jung and the Company.
 
(5)
Amounts paid to Mr. Keller consist of his annual retainer, Nominating and Governance Committee chair fees, Compensation Committee member fees and Audit Committee member fees, as described above. Mr. Keller was appointed to the Compensation Committee in April 2020.
 
(6)
Amounts paid to Ms. Patrick consist of her annual retainer and Compensation Committee member fees, as described above.
 
(7)
Mr. Stewart served as a director during the year ended December 31, 2020 until his resignation from the Board on March 31, 2020.
 
 
 
 
-27-
 
 
EXECUTIVE OFFICERS AND EXECUTIVE COMPENSATION
 
Executive Officers
 
Our executive officers are appointed by the Board and serve at the discretion of the Board, subject to the terms of any employment agreements they may have with the Company. The following is a brief description of the present and past business experience of each of the Company’s current executive officers.
 
Name
Age
Positions
Ann Hand
52
Chief Executive Officer and President
Clayton Haynes
51
Chief Financial Officer
Matt Edelman
51
Chief Commercial Officer
David Steigelfest
53
Chief Product Officer and Corporate Secretary
 
Ann Hand
Chief Executive Officer, President, Chair of the Board
 
Please see Ms. Hand’s biography in the preceding section under the heading “Director Biographies – Continuing Directors” on page 18.
 
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.
 

 
-28-
 
 
David Steigelfest
Chief Product Officer, Corporate Secretary and Director Nominee
 
Please see Mr. Steigelfest’s biography in the preceding section under the heading “Director Biographies – Director Nominees with Terms Expiring at the Annual Meeting” on page 17.
 
Summary Compensation Table
 
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, 2020, 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, 2020. Our Named Executive Officers for our fiscal year ending December 31, 2021 is subject to change, as we may hire or appoint new executive officers.
 
For the fiscal years ended December 31, 2020 and 2019, compensation for our Named Executive Officers was as follows:
Name and principal position
 
Year
 
 
Salary ($)
 
 
 
Bonus ($)
 
 
 
 
 
 
Option
Awards ($)(1)
 
 
 
Total ($)
 
Ann Hand
2020
 $400,000 
 $184,000 
  (2)(6)
  437,000(3)
 $1,021,000 
Chief Executive Officer, President
2019
 $400,000 
 $350,000 
  (2)
 $- 
 $750,000 
 
    
    
    
    
    
David Steigelfest
2020
 $300,000 
 $80,000 
  (6) 
  183,000(4)
 $563,000 
Chief Product Officer and Corporate Secretary
2019
 $300,000 
 $105,000 
    
 $- 
 $405,000 
 
    
    
    
    
    
Matt Edelman
2020
 $300,000 
 $80,000 
   (6)
  218,000(5)
 $598,000 
Chief Commercial Officer
2019
 $300,000 
 $- 
    
 $- 
 $300,000 
 
(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, 2020 and 2019, included in our Annual Report on Form 10-K for the year ended December 31, 2020, 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. For Ms. Hand, the bonus amount earned pursuant to her existing employment agreement (as described at Employment Agreements and Potential Payments upon Termination or Change of Control”) for fiscal year 2020 totaled $50,000.
 
(3)
On February 11, 2020, Ms. Hand canceled 150,000 stock options with original grant dates of June 16, 2017 and October 31, 2018 and exercise prices of $9.00 and $10.80, respectively, in exchange for67,500 restricted stock units, pursuant to a Board approved exchange. The 2020 equity award information above excludes the restricted stock units issued in the exchange and the reissuance of48,667 options on February 11, 2020, with the same terms of the original stock option granted, representing the reissuance of the balance of the original stock option not included in the exchange. The restricted stock units issued in the exchange vest over two years commencing on the grant date, with 50% of the restricted stock units vesting at the end of the first year, and 50% vesting at the end of the second year. The fair value of the stock options canceled in the exchange did not exceed the fair value of the restricted stock units issued in the exchange, therefore no additional stock compensation expense was recognized under ASC718.
 
 
-29-
 
  
(4)
On February 11, 2020, Mr. Steigelfest canceled 70,000 stock options with original grant dates of June 16, 2017 and October 31, 2018 and exercise prices of $9.00 and $10.80, respectively, in exchange for31,500 RSUs, pursuant to a Board approved exchange. The 2020 equity award information above excludes the RSUs issued in the exchange and the reissuance of 96,667 options on February 11, 2020, with the same terms of the original stock options granted, representing the reissuance of the balance of the original stock options not included in the exchange. RSUs issued in the exchange vest over two years commencing on the grant date, with 50% of the RSUs vesting at the end of the first year, and 50% vesting at the end of the second year. The fair value of the stock options canceled in the exchange did not exceed the fair value of the RSUs issued in the exchange,therefore no additional stock compensation expense was recognized under ASC 718.
 
(5)
On February 11, 2020, Mr. Edelman canceled 100,000 stock options with original grant dates of July 24, 2017, June 29, 2018 and October 31, 2018 and an exercise price of $10.80, in exchange for 45,000 RSUs, pursuant to a Board approved exchange. The 2020 equity award information above excludes the RSUs issued in the exchange and the reissuance of 7,107 options on February 11, 2020, with the same terms of the original stock options granted, representing the reissuance of the balance of the original stock options not included in the exchange. The RSUs issued in the exchange vest over two years commencing on the grant date, with 50% of the RSUs vesting at the end of the first year, and 50% vesting at the end of the second year. The fair value of the stock options canceled in the exchange did not exceed the fair value of the RSUs issued in the exchange, therefore no additional stock compensation expense was recognized under ASC 718.
 
(6)
Includes executive bonus amounts earned in connection with the 2020 Executive Bonus program approved in the discretion of the Board.
 
 
Elements of Compensation
 
Our executive compensation program consisted of the following components of compensation during the years ended December 31, 2020 and 2019:
 
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.
 
Executive Bonus
 
The Compensation Committee assesses the level of the executive officer’s achievement of meeting individual goals, as well as that executive officer’s contribution towards our business objectives. Bonus amounts depend on the level of achievement of individual performance goals, with a target bonus generally set as a percentage of base salary and based on the achievement of pre-determined milestones.  For the year ended December 31, 2020, each of our Named Executive Officers was awarded a bonus by the Compensation Committee in the amount set forth in the Summary Compensation Table above. At the time of this proxy statement, the Compensation Committee has not determined or awarded a bonus to any Named Executive Officer for the fiscal year ended December 31, 2021. Payment of a bonus to any of our Named Executive Officers for fiscal 2021, if any, is at the discretion of the Compensation Committee which may consider factors other than attainment of individual or corporate goals in its determination of bonus amounts to be granted.
 
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. All equity awards issued to our Named Executive Officers during the years ended December 31, 2020 and 2019 were issued under our 2014 Plan.
 
 
 
-30-
 
 
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.
 
 
 
-31-
 
 
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 former 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.
 
 
 
-32-
 
 
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, 2020:
 
 
 
 
Option/Warrant Awards
 
 
Stock Awards
 
Name
 
Grant Date
 
 
Number of securities underlying unexercised options/ warrants (#) Exercisable
 

 
 
Number of securities underlying unexercised options/ warrants (#) Unexercisable 
 

 
 
Option/ warrant
exercise price ($)
 
 
 
Option/ warrant expiration date
 
 
Number of shares or units of stock that have not vested (#)
 
 
 
Market value of shares or units of stock that have not vested(#)
 
 
 
 
 
 

 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
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
  100,000 

  - 

 $10.80 
 
6/6/27
 
 

 

 

 

10/31/18
  250,000 

  - 

 $10.80 
 
10/31/28
 
 

 

 

 

2/11/20
  48,667
(6)
  - 

 $10.80 
 
10/30/28
 
 

 

 

 

2/11/20
  - 

  - 

  - 
  - 
  67,5000 
(6)
 $191,025 

8/5/20
  16,667 

  183,333 
(1)
 $2.88 
 
8/3/30
 
    

    

 
    

    

    
    
    

    
David Steigelfest
10/16/14
  116,667 

  - 

 $0.30 
 
10/15/24
 
    

    

12/21/15
  833 

  - 

 $9.00 
 
12/21/25
 
    

    

2/11/20
  25,833
(7)(2)
  - 

 $9.00 
 
6/15/27
 
    

    

2/11/20
  21,465
(7)
  49,369 
(3)
 $10.80 
 
10/31/28
 
    

    

2/11/20
  - 

  - 

  - 
  - 
  31,500 
 (7)
 $89,145 

8/5/20
  7,000 

  77,000 
(4)
 $2.88 
 
8/3/30
 
    

    

 
    

    

    
    
    

    
Matt Edelman
2/11/20
  2,451 
(8)
  4,656
(5)
 $10.80 
 
6/29/28
 
    

    

2/11/20
  - 

  - 

  - 
  - 
  45,000 
 (8)
 $127,350 

8/5/20
  8,333 

  91,667 
(9)
 $2.88 
 
8/3/30
 
    

    
 

 
-33-
 
 
(1)
Represents an option to purchase shares of our common stock, which option vests in equal monthly installments over a 48-month period beginning on the grant date of August 5, 2020.
    
(2)
Represents an option to purchase shares of our common stock. 8,834 shares of the original option were returned to the Issuer on February 11, 2020.

(3)
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, becoming fully vested on October 30, 2022. 29,166 shares of the original option were returned to the Issuer on February 11, 2020.
 
(4)
Represents an option to purchase shares of our common stock, which option vests in equal monthly installments over a 48-month period beginning on the grant date of August 5, 2020.
 
(5)
Represents an option to purchase shares of our common stock, which option vested with respect to 4,167 shares on October 31, 2019, and then at a rate of 348 shares per month thereafter. 9,560 shares of the original option were returned to the Issuer on February 11, 2020.
 
(6)
On February 11, 2020, Ms. Hand canceled 150,000 stock options with original grant dates of June 16, 2017and October 31, 2018 and exercise prices of $9.00 and $10.80,respectively, in exchange for 67,500 RSUs, pursuant to a Board approved exchange. The outstanding equity award table above includes the RSUs issued in the exchange and reflects the reissuance of 48,667 options on February 11, 2020, with the same terms of the original stock option granted, representing the reissuance of the balance of the original stock option grants not included in the exchange. The RSUs issued in the exchange vest over two years commencing on the grant date, with 50% of the RSUs vesting at the end of the first year, and 50% vesting at the end of the second year.
 
(7)
On February 11, 2020, Mr. Steigelfest canceled 70,000 stock options with original grant dates of June 16,2017 and October 31, 2018 and exercise prices of $9.00 and $10.80,respectively, in exchange for 31,500 RSUs, pursuant to a Board approved exchange. The outstanding equity award table above includes the RSUs issued in the exchange and reflects the reissuance of 96,667 options on February 11, 2020, with the same terms of the original stock options granted, representing the reissuance of the balance of the original stock option grants not included in the exchange. The RSUs issued in the exchange vest over two years commencing on the grant date, with 50% of the RSUs vesting at the end of the first year, and 50% vesting at the end of the second year.
 
(8)
On February 11, 2020, Mr. Edelman canceled 100,000 stock options with original grant dates of July 24, 2017, June 29, 2018 and October 31, 2018 and an exercise price of $10.80, in exchange for 45,000 RSUs, pursuant to a Board approved exchange. The outstanding equity award table above includes the RSUs issued in the exchange and reflects the reissuance of 7,107 options on February 11, 2020, with the same terms of the original stock options granted, representing the reissuance of the balance of the original stock option grants not included in the exchange. The RSUs issued in the exchange vest over two years commencing on the grant date, with 50% of the RSUs vesting at the end of the first year, and 50% vesting at the end of the second year.
 
(9)
Represents an option to purchase shares of our common stock, which option vests in equal monthly installments over a 48-month period beginning on the grant date of August 5, 2020.
 
 
 
-34-
 
 
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, 2020.
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))
 
 
 
  (a)(1)
 
 
  (b)
 
 
  (c)
 
Equity compensation plans approved by security holders
 
 
 
 
 
 
 
 
 
      2014 Plan
  1,535,000 
 $5.62 
  588,000 
Equity compensation plans not approved by security holders
    
    
    
Total
  103,000 
 $5.20 
  - 
_______________
(1)
Excludes 382,144 shares of common stock issuable upon the vesting of RSUs as of December 31, 2020.
 
Stock Option and Incentive Plan
 
Amended and Restated 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, October 2018 and May 2020. The maximum number of shares of common stock issuable under the 2014 Plan is currently 2,583,333 shares, subject to adjustments for stock splits, stock dividends or other similar changes in our common stock or our capital structure.
 
On April 29, 2021, our Board approved of an amendment to the 2014 Plan (the “2014 Plan Amendment”), subject to approval by our stockholders at the Annual Meeting. A summary of the terms of 2014 Plan is available under Proposal No. 2, Approval of an Amendment to the Amended and Restated Super League Gaming, Inc. 2014 Stock Option and Incentive Plan, beginning on page 38 below.
 
 
 
 
-35-
 
 
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 had an initial term that continued until December 31, 2019, and was extended through December 31, 2020 upon mutual agreement of Mr. Jung and the Company, and continues on a month-to-month basis during 2021.
 
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.
 
 
 
-36-
 
 
PROPOSAL NO. 2
 
APPROVAL OF AN AMENDED AND RESTATED SUPER LEAGUE GAMING, INC.
2014 STOCK OPTION AND INCENTIVE PLAN
 
Background of the 2014 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, October 2018 and May 2020. The maximum number of shares of common stock issuable under the 2014 Plan is currently 2,583,333 shares, subject to adjustments for stock splits, stock dividends or other similar changes in our common stock or our capital structure.
 
The 2014 Plan provides for the grant of (i) 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; (ii) Non-Qualified Options (together with Incentive Stock Options, “Options”); (iii) stock awards; and (iv) performance shares to any individual who is (a) an Employee, (b) a member of our Board, or (c) an independent contractor who provides services for the Company.
 
Reasons for the 2014 Plan Amendment
 
On April 29, 2021, our Board unanimously approved, subject to stockholder approval at the Annual Meeting, of an amendment to the 2014 Plan (the “2014 Plan Amendment”) in order to increase the number of shares of common stock available for issuance under the 2014 Plan to a total of 5.0 million shares, subject to adjustment to take account of stock dividends, stock splits, recapitalizations and similar corporate events
 
As of April 30, 2021 there were 1,914,263 shares of common stock issued or reserved for issuance under the terms of the 2014 Plan. As a result, we currently have a limited number of shares available for issuance as new awards under the 2014 Plan.
 
As a part of our negations to complete the Merger with Mobcrush, we have agreed to issue to holders of unvested Mobcrush options at the effective time of the Merger (the “Mobcrush Options”), which Mobcrush Options will be cancelled immediately prior to the effective time, and a number of options to purchase shares of Super League common stock (the "Replacement Options") will be issued to replace the cancelled options in a manner consistent with options currently granted by Super League. The Replacement Options will have an exercise price of not less than 85% of the closing price of our common stock on the date of issuance, will have a term of ten years, and will be subject to our traditional four-year vesting schedule with vesting beginning on the one-year anniversary of the closing of the Merger. In total, we expect to issue approximately 500,000 Replacement Options.
 
In addition to having a sufficient number of shares of common stock available under the 2014 Plan to issue the Replacement Options, our Board believes it is important to have reserved a sufficient number of shares to support stock option grants and awards for the foreseeable future. The 2014 Plan Amendment will provide an important mechanism by which stock options and other stock awards may be granted to directors, employees and consultants as an incentive and to tie their interests closer to those of our stockholders.
 
If stockholders do not approve of the 2014 Plan Amendment at the Meeting, we will be unable to issue the Replacement Options following the closing of the Merger, nor will we have a sufficient number of shares available to issue new awards to our Employees, including employees new to the Company as a result of the Merger, as equity compensation.
 
 
 
 
-37-
 
 
Below is a summary of the terms and conditions of the 2014 Plan following the effectiveness of the 2014 Plan Amendment. Unless otherwise indicated, all capitalized terms shall have the same meaning as defined in the 2014 Plan. This summary does not purport to be complete, and is qualified, in its entirety, by the specific language of the 2014 Plan, which is incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2020, a copy of which accompanies this proxy statement.
 
Summary of the 2014 Plan
 
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.
 
 
 
 
 
-38-
 
 
 
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. 
 
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.
 
Amendment and Termination
 
The Board or Compensation Committee may amend, alter or discontinue the 2014 Plan, but no amendment, alteration or discontinuation may be made that would materially impair the rights of the participant with respect to a previously granted award, except such an amendment made to comply with applicable law, the listing standards of the applicable exchange or accounting rules. In addition, no amendment may be made without the approval of stockholders to the extent such approval is required by applicable law or the listing standards of the applicable stock exchange.
 
The 2014 Plan will expire on July 1, 2027.
 
 
 
 
 
-39-
 
 
U.S. Federal Income Tax Consequences
 
The 2014 Plan is, in part, is a qualified plan for federal income tax purposes. As such, the Company is entitled to (i) withhold and deduct from future wages of any award recipient, or make other arrangements for the collection of, all legally required amounts necessary to satisfy any and all federal, state and local withholding and employment-related tax requirements attributable to an award, including, without limitation, the grant, exercise or vesting of, or payment of dividends with respect to, an award or a disqualifying disposition of stock received upon exercise of an award, or (ii) require the award recipient promptly to remit the amount of such withholding to the Company before taking any action, including issuing any shares of common stock, with respect to an award.
 
Plan Benefits
 
Participation in the 2014 Plan is entirely within the discretion of the Committee. Because we cannot predict the rate at which the Committee will issue new awards or the terms of awards granted under the 2014 Plan, if it is approved by our stockholders at the Annual Meeting, it is not possible to determine the number of shares that will be purchased or the value of benefits that may be obtained by executive officers and other employees under the 2014 Plan in the future.
 
Instead, the following table sets forth information with respect to issuances under the 2014 Plan during the year ended December 31, 2020 to each of our current executive officers, outside directors and employees:
 
Name and Position
 
Dollar Value($)(1)
 
 
Number of Awards(4)
 
Ann Hand
 $576,000 
  200,000 
President, Chief Executive Officer and Chair
    
    
David Steigelfest
 $242,000 
  84,000 
Chief Technology Officer and Director
    
    
Matt Edelman
 $288,000 
  100,000 
Chief Commercial Officer
    
    
Clayton Haynes
 $259,000 
  90,000 
Chief Financial Officer
    
    
Executive Officer Group
 $1,365,000 
  474,000 
Non-Employee Director Group (2)
 $330,000 
  139,000 
Non-Executive Officer Employee Group (3)
 $1,022,000 
  341,000 
 
(1)
Amounts shown in the Dollar Value column represent an aggregate of the number of stock options granted multiplied by the exercise price of such options or the grant date fair value of RSUs issued during the year ended December 31, 2020 and outstanding as of December 31, 2020.
 
(2)
Represents an aggregate total of 139,000 RSUs issued to our non-employee directors during the year ended December 31, 2020 and outstanding as of that date.
 
(3)
Represents an aggregate total of 340,000 stock options granted to employees who were not executive officers on December 31, 2020 under the 2014 Plan.
 
(4)
In February 2020, the Board of Directors approved the cancellation of 540,000 stock options in exchange for 243,000 RSUs (the “Stock Swap”) for five employees included in the Executive Officer group and two employees included in the Non-Executive Officer Employee group. The stock options canceled were originally granted in 2018 and prior, had a weighted average exercise price of $10.16, and a weighted average grant date fair value of $8.33. The RSUs issued had weighted average grant date fair value of $2.60 and vest over two years. The 2020 equity award information above excludes the RSUs issued in the Stock Swap and the reissuance of 225,444 options on February 11, 2020, with the same terms of the original stock options granted, representing the reissuance of the balance of the original stock option grants not included in the Stock Swap. The RSUs issued in the exchange vest over two years commencing on the grant date, with 50% of the RSUs vesting at the end of the first year, and 50% vesting at the end of the second year.
 
 

 
-40-
 
 
 
Effectiveness of the 2014 Plan Amendment
 
If approved by stockholders at the Meeting, the 2014 Plan Amendment will become effective on the date of the Annual Meeting. By approving the 2014 Plan Amendment, the Company’s stockholders will also satisfy Nasdaq Stock Market requirements for stockholder approval of equity compensation plans.
 
Vote Required and Recommendation
 
The affirmative “FOR” vote of a majority of the shares present in person or by proxy and entitled to vote is necessary for approval of the 2014 Plan Amendment. Unless otherwise instructed on the proxy or unless authority to vote is withheld, shares represented by executed proxies will be voted “FOR” approval of the 2014 Plan Amendment, as presented in this Proposal No. 2.
 
 
 
 
 
The Board of Directors recommends that stockholders vote “FOR” Proposal No. 2 to approve of an amendment to Amended and Restated Super League Gaming, Inc. 2014 Stock Option and Incentive Plan.
 
   
 
-41-
 
 
PROPOSAL NO. 3
   
RATIFICATION OF THE APPOINTMENT OF
BAKER TILLY US, LLP TO SERVE AS OUR
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE CURRENT FISCAL YEAR
 
Upon recommendation of the Audit Committee of the Board of Directors, the Board appointed Baker Tilly US, LLP (formerly Squar Milner LLP) (“Baker Tilly”) as our independent registered public accounting firm for the year ending December 31, 2021, and hereby recommends that the stockholders ratify such appointment.
 
The Board may terminate the appointment of Baker Tilly as the Company’s independent registered public accounting firm without the approval of the Company’s stockholders whenever the Board deems such termination necessary or appropriate.
 
Representatives of Baker Tilly will be present at the Annual Meeting or available by telephone and will have an opportunity to make a statement if they so desire and to respond to appropriate questions from stockholders.
 
Audit Fees
 
The following table presents fees billed by Baker Tilly LLP for professional services rendered for the fiscal years ended December 31, 2020 and 2019:
 
 
 
2020
 
 
2019
 
Audit fees (1)
 $113,000 
 $161,700 
Audit related fees(2)
  52,700 
  38,200 
Tax fees (3)
  7,700 
  39,700 
All other fees (4)
  - 
  - 
Total
 $173,400 
 $239,600 
 
(1)
Audit Fees include fees and expenses for professional services rendered in connection with the audit of our financial statements for those years, reviews of the interim financial statements that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements.
 
(2)
Audit Related Fees consist of fees billed for assurance related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.” Included in Audit Related Fees are fees and expenses related to reviews of registration statements and SEC filings other than annual reports on Form 10-K and quarterly reports on Form 10-Q.
 
(3)
Tax Fees include the aggregate fees billed during the fiscal year indicated for professional services for tax compliance, tax advice and tax planning. No such fees were billed by Baker Tilly for 2020 or 2019.
 
(4)
All Other Fees consist of fees for products and services other than the services reported above. No such fees were billed by Baker Tilly for 2020 or 2019.
 
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 
There have been no changes in or disagreements with accountants on accounting and financial disclosure. 
 
Auditor Independence
 
Our Audit Committee and our full Board of Directors considered that the work done for us in the years ended December 31, 2020 and 2019, respectively, by Baker Tilly was compatible with maintaining Baker Tilly independence.
 
 
 
-42-
 
 
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
 
Date: March 19, 2021
 
The Audit Committee has reviewed and discussed with management and Baker Tilly US, LLP, our independent registered public accounting firm, the audited consolidated financial statements in the Super League Gaming, Inc. Annual Report on Form 10-K for the year ended December 31, 2020.
 
Baker Tilly US, LLP also provided the Audit Committee with the written disclosures and the letter required by the applicable requirements of the PCAOB regarding the independent auditor’s communication with the Audit Committee concerning independence. The Audit Committee has discussed with the registered public accounting firm their independence from our Company.
   
Based on its discussions with management and the registered public accounting firm, and its review of the representations and information provided by management and the registered public accounting firm, including as set forth above, the Audit Committee recommended to our Board that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2020.
 
 
Respectfully Submitted,
 
Jeff Gehl
Michael Keller
Mark Jung
 
The information contained above under the caption “Report of the Audit Committee of the Board of Directors” shall not be deemed to be soliciting material or to be filed with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate it by reference into such filing.
 
 
 
-43-
 
 
 
Required Vote and Recommendation
 
Ratification of the selection of Baker Tilly as the Company’s independent auditors for the fiscal year ending December 31, 2021 requires the affirmative vote of a majority of the shares present or represented by proxy and entitled to vote at the Annual Meeting. Unless otherwise instructed on the proxy or unless authority to vote is withheld, shares represented by executed proxies will be voted “FOR” the ratification of Baker Tilly as the Company’s independent auditors for the fiscal year ending December 31, 2021.
 
 
The Board recommends that stockholders vote “FOR” the ratification of the selection of Baker Tilly US, LLP as our independent auditors for the fiscal year ending December 31, 2021.
 
 
 
 
 
 
 
 
-44-
 
 
PROPOSAL NO. 4
   
APPROVAL OF THE ISSUANCE OF OUR COMMON STOCK AS MERGER CONSIDERATION PURSUANT TO NASDAQ LISTING RULE 5635
 
Background
 
Our Board is proposing for approval by our stockholders, for purposes of complying with Nasdaq Listing Rule 5635, the issuance of an aggregate of 12,582,204 shares of common stock to existing stockholder of Mobcrush as the Merger Consideration in connection with the closing of the Merger, an amount that is in excess of 20% of our outstanding common stock as of the Record Date. The key terms of the Merger Agreement are summarized below, and a copy of the Merger Agreement is attached to this proxy statement as Annex A and is incorporated herein by reference.
 
The following summaries do not purport to be complete and are each subject to, and are qualified in their entirety by, the full text of such agreements. Copies of the Merger Agreement, Voting Agreements and the Registration Rights Agreement have been filed as Exhibits 2.1, 10.1, and 10.2, respectively, to our Current Report on Form 8-K filed with the SEC on March 11, 2021, which Current Report on Form 8-K is incorporated herein by reference. You are encouraged to review the full text of the Current Report on Form 8-K filed on March 11, 2021, as well as each agreement related to the Merger.
 
Nasdaq Listing Rules
 
Our common stock is listed on the Nasdaq Capital Market and we are subject to the Listing Rules of the Nasdaq Stock Market. Although we are not required to obtain stockholder approval of the Merger Agreement or the Merger itself, we are required under Nasdaq Listing Rules 5635(a) and 5635(b) to seek stockholder approval of the proposed issuance of the Merger Consideration, as such issuance is in an amount in excess of 20% of our issued and outstanding shares of common stock as of the Record Date, and, following the issuance of the Merger Consideration, certain of Mobcrush’s existing stockholders will become the beneficial owner of more than 20% of our issued and outstanding securities.
 
Nasdaq Listing Rule 5635(a) requires stockholder approval prior to the issuance of securities “in connection with” the acquisition of the stock or assets of another company, where due to the present or potential issuance of common stock (or securities convertible into or exercisable for common stock), other than a public offering for cash, the common stock to be issued (a) constitutes voting power in excess of 20% of the outstanding voting power prior to the issuance or (b) is or will be in excess of 20% of the outstanding common stock prior to the issuance. We anticipate that if this Proposal No. 4 is approved, we will issue shares of common stock in an amount equal to approximately 54% of our issued and outstanding securities as of the Record Date, or approximately 35% of our capital stock, on a fully-diluted basis.
 
Nasdaq Listing Rule 5635(b) requires stockholder approval prior to the issuance of securities when the issuance or potential issuance will result in a change of control, which is Nasdaq considers to occur when, as a result of the issuance, an investor or a group would own, or have the right to acquire, 20% or more of the outstanding shares of common stock or voting power and such ownership or voting power would be the largest ownership position. In the event this Proposal No. 4 is approved, we expect the following person to become holders of more than 20% of our issued and outstanding common stock:
 
Investor
 
Mobcrush Shares Owned
 
 
% Ownership
 
 
Conversion Ratio
 
 
Post Merger Ownership - Super League Shares
 
 
% Ownership Combined Company (1)
 
Evolution Media MC Holdings, LLC
  17,796,186 
  75%
  52.8%
  9,393,925 
  25%
Sony Corporation of America
  1,815,835 
  8%
  52.8%
  958,510 
  3%
Knollwood Investment Fund LLC
  907,935 
  4%
  52.8%
  479,264 
  1%
Option Plan
  3,316,220 
  14%
  52.8%
  1,750,505 
  5%
 
  23,836,176 
  100%
    
  12,582,204 
  34%
 
    
    
    
    
    
 
(1)
Percentage ownership based on 24,976,491 shares of our common stock outstanding, as of March 30, 2021, and 12,582,204 shares of our common stock to be issued as Merger Consideration.
 
 
 
-45-
 
 
Value of the Merger Consideration
 
As further described below in the section titled “Information about the Merger Agreement,” at the time of closing of the Merger, 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 our common stock. Subject to certain adjustments and other terms and conditions more specifically set forth in the Merger Agreement, we expect to issue 12,582,204 shares of our common stock as the Merger Consideration.
 
As we have agreed to issue a fixed number of shares of our common stock as Merger Consideration at the closing of the Merger, the fair market value of Merger Consideration will fluctuate at the same rate as the trading price of our common stock. The following table presents the varying value of the Merger Consideration based on the closing prices of our common stock on January 29, 2021, March 9, 2021, March 11, 2021, March 30, 2021, and April 30, 2021, the dates of the execution of the term sheet, execution of the Merger Agreement, public announcement of the Merger, the Record Date, and the date of filing of this Definitive Proxy Statement, respectively, each as reported on the Nasdaq Capital Market.
 
Date
 
Closing Price ($)
 
 
Aggregate Value of Merger Consideration ($)
 
January 29, 2021
  3.07 
 $38,627,366 
March 9, 2021
 $5.08 
 $63,917,596 
March 11, 2021
 6.87 
 $86,439,741 
March 30, 2021
 $7.62 
 $95,876,394 
April 30, 2021
 $5.38
 $67,692,258 
 
Reasons for Seeking Stockholder Approval
 
We are required under Nasdaq Listing Rules 5635(a) and 5635(b) to seek stockholder approval of the proposed issuance of the Merger Consideration.
 
It is important to understand that we are not required to, nor are we seeking, stockholder approval of the Merger, the Merger Agreement, the Registration Rights Agreement, or the Voting Agreements. Rather, we are seeking stockholder approval for the purposes of complying with the Nasdaq Listing Rules relating to the issuance of shares of common stock as the Merger Consideration in connection with the completion of the Merger.
 
Potential Effects of the Proposal
 
If this Proposal No. 4 is approved, our existing stockholders will experience substantial dilution in voting rights upon the issuance of the Merger Consideration. As described above, if approved, the Merger Consideration issued to existing Mobcrush stockholders will total 12,582,204 shares of our common stock, which would amount to approximately 35% of the outstanding shares of our common stock following the closing of the Merger.
 
Your approval of this Proposal No. 4 will assist us in meeting our obligations under the Merger Agreement. If this Proposal No. 4 is not approved, we will be unable to complete the Merger under the current terms of the Merger Agreement, and Mobcrush will remain a separate legal entity.
 
Interests of Directors and Executive Officers
 
Our directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this Proposal No. 4 except to the extent of: (i) their ownership of shares of our common stock, and (ii) that each officer and director are expected to be employed by and will continue to serve on the our Board following the Merger (assuming, in the case of Ms. Patrick and Mr. Steigelfest, that each are re-elected pursuant to Proposal No. 1), for which they each receive cash and equity compensation.
 
 
 
-46-
 
 
Voting Agreements
 
Following the execution of the Merger Agreement, certain stockholders of the Company, owning an aggregate of approximately 2.9% of the outstanding shares of our common stock, entered into Voting Agreements, pursuant to which each stockholder will agree to vote all of their shares of common stock held in favor of this Proposal No. 4 and/or any proposal that would reasonably be expected to further implement or carry into effect the purposes and intent of the transactions contemplated by the Merger Agreement. Therefore, we expect approximately 734,797 shares of our common stock to vote in favor of this Proposal No. 4 pursuant to the Voting Agreements.
 
Vote Required and Recommendation
 
Approval of this Proposal No. 4 requires the affirmative vote (in person or by proxy) of holders of a majority of the shares present or represented by proxy and entitled to vote at the Annual Meeting. Unless otherwise instructed on the proxy or unless authority to vote is withheld, shares represented by executed proxies will be voted “FOR” the issuance of 12,582,204 shares of common stock as Merger Consideration in connection with the completion of the Merger.
 
 
The Board recommends that stockholders vote “FOR” the issuance of 12,582,204 shares of common stock as Merger Consideration in connection with the completion of the Merger.
 
 
 
-47-
 
 
INFORMATION ABOUT THE MERGER AND MOBCRUSH
 
Background of the Merger
 
The terms of the Merger Agreement are the result of arm’s-length negotiations between representatives of the Company and Mobcrush. The following is a brief discussion of the background of these negotiations, the Merger Agreement and the Merger.
 
As part of Super League’s ongoing consideration and evaluation of its long-term prospects and strategies, Super League’s board and management regularly review strategic opportunities involving potential acquisition opportunities. In addition, Super League’s management regularly participates in industry conferences and roundtables and keeps abreast of best practices and technological developments in the industry. In this regard, Ann Hand, Super League’s Chief Executive Officer, and Mike Wann, the Chief Executive Officer of Mobcrush, spoke on multiple occasions beginning in August of 2019 about the dynamics in both companies' industry, development of symbiotic technology platforms, and the possible benefits of mutually beneficial commercial arrangements or the combination of the two companies.
 
In connection with such discussions between Ms. Hand and Mr. Wann, Super League entered into a Non-Disclosure Agreement (the "Needham NDA") with Mobcrush, Inc.'s banking representative, Needham & Company ("Needham") in October 2019. Notwithstanding the execution of the Needham NDA and the exchange of a limited amount of information, the discussions between Super League and Mobcrush did not lead to a definitive agreement and were terminated in May, 2020 due to Mobcrush, Inc. entering into an assignment for the benefit of creditors (the "ABC"), whereby Mobcrush became the successor to Mobcrush, Inc.
 
In early September 2020, over several phone conversations, Ms. Hand and Mr. Wann, along with certain members of the management teams of both companies, again discussed the mutual benefit to Super League’s and Mobcrush’s customers, viewers, competitors, and investors of a strategic combination or other commercial arrangement between the two companies. These conversations included an overview of the business models and strategies of both Super League and Mobcrush, and a discussion ensued regarding the further exchange of operating data between the two companies and their respective Boards of Directors to consider the opportunity to combine companies. Pursuant to these discussions, on September 9, 2020, Matt Edelman, Chief Operating Officer of Super League, and Mr. Wann executed a Mutual Non-Disclosure Agreement (the "NDA") on behalf of Super League and Mobcrush, respectively.
 
From September 11, 2020 through December 20, 2020, Super League and Mobcrush exchanged financial and operating data, and Ms. Hand and Mr. Wann began to discuss the preliminary valuation of Mobcrush and potential business terms of the combination. In connection with these discussions, Ms. Hand, along with other members of Super League's management team, also spoke with a representative of Mobcrush’s significant investors regarding acceptable terms of a possible business combination, and Mr. Ann, along with other members of Super League's management team, attended meetings with Mr. Wann and senior management of Mobcrush and members of Mobcrush’s Board of Directors.
 
On September 15, 2020, Ms. Hand, Mr. Edelman, and Clayton Haynes, Chief Financial Officer of the Company, held a conference call with Jeff Hopkins of Halo Finance, LLC, in order to review the financial model and results disclosed in Mobcrush's data room in order to determine if an alliance or transaction with Mobcrush would be financially beneficial to the Company.
 
On October 5, 2020, Super League management prepared and reviewed a combined financial model for Super League and Mobcrush. After this review, Super League's management requested additional due diligence materials from Mobcrush, including a demonstration of Mobcrush's AI-highlight generation technology and the Mobcrush financials through September 2020.
 
On October 6, 2020, Super League's management team discusses moving forward with a potential business combination with Mobcrush, including additional due diligence necessary to determine valuation and business synergy, potential deal terms for a combination, capital requirements, and capital raising activities that may be associated with such a combination.
 
 
 
-48-
 
 
On October 14, 2020, an investment brief prepared by Ms. Hand is circulated to Super League's management team and board of directors, setting forth the potential of a combined Super League/Mobcrush entity, the synergies of customers, offers, technologies, and scales. In mid-October 2020, Super League proposed to engage in additional valuation work and due diligence to explore the potential value of a merger between Super League and Mobcrush.
 
On October 23, 2020, Mobcrush's representatives provided Super League's management with Mobcrush's financials for the quarter and year ended September 30, 2020.
 
On November 5, 2020, the Board of Directors of Super League held a special meeting to discuss strategic opportunities, including the status of discussions with Mobcrush. At this meeting, management reviewed the strategic rationale of a business combination transaction with Mobcrush and management presented draft financial analysis and valuation modeling, preliminary synergies and value creation for Super League shareholders.
 
On November 11, 2020, Super League's senior management inform Disclosure Law Group, a Professional Corporation ("DLG"), Super League's outside counsel, of the potential Mobcrush acquisition and requesting DLG provide an initial draft of a term sheet for the acquisition of Mobcrush. From November 11, 2020, to November 20, 2020, senior management and DLG discuss the proposed terms and conditions of the potential acquisition of Mobcrush by Super League.
 
On November 20, 2020, DLG circulated, for discussion purposes, a draft term sheet for the merger with Mobcrush containing indicative terms of a potential business combination between Super League and Mobcrush. Ms. Hand discusses the draft term sheet and potential combination of Super League and Mobcrush with certain members of Super League's Board of Directors, and calls a special meeting of the Board of Directors of Super League to be held on November 23, 2020.
 
The term sheet contemplated customary representations, warranties and covenants, with Mobcrush subject to indemnification for certain representations and warranties, covenant breaches, and certain other items, including matters uncovered in diligence or excluded from coverage under a representation and warranties insurance policy contemplated to be obtained. The term sheet also set forth certain proposed closing conditions, and customary termination provisions.
 
On November 23, 2020, Ms. Hand submitted the draft term sheet to the Board of Directors of Super League for review. On November 24, 2020, the Board of Directors of Super League held a special telephonic board meeting to discuss strategic opportunities, including the status of discussions with Mobcrush. At this meeting, management reviewed the strategic rationale of a business combination transaction with Mobcrush and Ms. Hand presented her report regarding preliminary synergies and value creation for Super League shareholders.
 
On November 25, 2020, Ms. Hand delivered the draft term sheet to Mr. Wan for discussion purposes. On December 2, 2020, Ms. Hand held a telephonic conference with certain directors of Mobcrush to discuss the draft term sheet.
Beginning on December 2, 2020, to December 23, 2020, Ms. Hand and Mr. Wann, along with senior members of the respective companies’ management teams, held several conversations by way of teleconference regarding the terms set forth in the draft term sheet.
 
On December 18, 2020, the Board of Directors held a special meeting via telephonic conference in regard to the potential acquisition of Mobcrush, reviewed the financial analysis of a business combination transaction with Mobcrush, and received an update on the status of the negotiation and the transaction documents from Super League’s senior management.
 
 
 
-49-
 
 
On December 21, 2020, Mr. Wann provides Super League's management with Mobcrush's financials through November 30, 2020. Based upon the Mobcrush financials as of November 30, 2020, on December 28, 2020, Clayton Haynes, Chief Financial Officer of Super League, prepares and circulates an updated combined company financial forecast and the cash requirements for the proposed combination of Super League and Mobcrush.
 
On December 30, 2020, the full Board of Directors for both Mobcrush and Super League held an introductory telephonic conference call, during which call the respective boards discussed the potential combination of Super League and Mobcrush, including the terms as set forth in the draft term sheet.
 
On December 31, 2020, the Board of Directors of Super League hold a special meeting via telephonic conference to discuss revisions to the draft term sheet, including the number of shares of common stock issuable as merger consideration and the amount of the collective funding that would occur concurrent with the closing of the Merger.
 
On January 2, 2021, Ms. Hand provides a draft of the term sheet to members of Mobcrush's Board of Directors.
 
Throughout January 2021, Super League's senior management team continued due diligence on Mobcrush's financial statements, technology engineering and architecture, and key performance indicators.
 
From January 4, 2021, to January 12, 2021, Ms. Hand, Mr. Wann, and senior management from both Mobcrush and Super League, along with Cooley and DLG, held several telephonic discussions regarding the current terms set forth in the draft term sheet, potential revisions, and an overview of how the transaction will be structured.
 
On January 13, 2021, Mr. Wann provides Ms. Hand with a counter-draft of the term sheet. The revised term sheet further contemplated that material shareholders of Super League would enter into a voting agreement to support and vote in favor of the proposal under Nasdaq’s Listing Rules to issue Super League common stock contemplated to be issued at closing. Mobcrush’s term sheet further proposed an increase of the Super League board by two members to be designated by Mobcrush shareholders. Additionally, the revised term sheet contemplated that the transaction would be a “public-style” merger with the Mobcrush shareholders retaining no post-closing indemnification obligations, and no termination fee in the event of a termination of the definitive agreement for a breach by Super League. In addition, the revised term sheet contemplated the removal of the “earn-out” and “holdback” of shares of common stock following the close of the Merger.
 
On January 16, 2021, after discussion and review with members of Super League's Board of Directors and senior management, Ms. Hand sent a counter-draft to Mobcrush's draft of the term sheet. The revised term sheet proposed, among other things, changes to net working capital adjustments, a proposed timeline for term sheet completion and due diligence, reinsertion of the “holdback” provision, modification to the “earn-out” provision, increase in the number of issued and outstanding shares of common stock of Super League resulting from its $8.0 million registered offering, insertion of a bridge financing provision relating to Mobcrush and requirement that the financial statements of Mobcrush be audited by Baker Tilly at the expense of Super League, and removal of the break-up fee. 
 
On January 19, 2021 and January 20, 2021, senior management from both Mobcrush and Super League held telephonic conferences discussing the most current draft of the revised term sheet. After these discussions, on January 20, 2021, Mobcrush's senior management delivered a counter-draft to the revised term sheet to Ms. Hand. Mobcrush's counter-draft included the removal of net working capital adjustment requirement, update of exclusivity period through April 30th, and contemplated the option of bridge financing from both parties prior to closing, the removal of the “earn-out”, and the removal of the break-up fee.
 
On January 21, 2021, senior management from both Super League and Mobcrush held a telephonic conference to discuss the revised term sheet provided by Mobcrush's senior management.
 
On January 24, 2021, senior management of Super League holds an internal conference to discuss the financials, deal status, and the drafting of a final term sheet to present to Mobcrush's Board of Directors.
 
On January 25, 2021, members of Super League's senior management team have a due diligence call with Mr. Wann to inquire into Mobcrush's employee roster, key employees, and integration of Mobcrush employees into Super League. Later, on January 25, 2021, senior management of both Super League and Mobcrush hold another telephonic conference to discuss the current status of the term sheet, and final revisions that will be made thereto.
 
On January 26, 2021, Super League submitted its revised and final term sheet to Mobcrush's Board of Directors for review. The term sheet proposed Mobcrush cancellation of existing stock option plans and adoption of Super League’s 2014 Plan, expansion of board for two additional members, and a lockup terms for Mobcrush shareholders, specifics on the bridge financing impact on the shares of Super League common stock issuable to Mobcrush shareholders, and an exclusivity period.
 
 
-50-
 
 
On January 27, 2021 to January 28, 2021, senior management of both Super League and Mobcrush hold telephonic conferences to discuss treatment of options to purchase the common stock of Mobcrush, and how such options will be treated in the merger.
 
On January 29, 2021, the Board of Directors of Super League held a special meeting via teleconference, during which time the Board of Directors reviewed and approved the term sheet as proposed by Ms. Hand. Also on January 29, 2021, Mobcrush approved the term sheet, and Ms. Hand and Mr. Wann, on behalf of Super League and Mobcrush, respectively, executed the term sheet.
 
On January 30, 2021, Mobcrush's representatives send Super League's senior management the unaudited 2021 financial statements for Mobcrush for Super League to update its forecasts and analysis of a combination between Mobcrush and Super League.
 
Throughout February 2021, Super League continues its due diligence investigation into Mobcrush's technology, financials, employees, potential liabilities, and exploration of synergies between the companies.
 
On February 5, 2021, senior management and counsel for Super League held a due diligence call with Sherwood Partners, representatives of Mobcrush, to ascertain any liabilities or issues associated with the assignment for the benefit of creditors that may be assumed by Merger Sub upon the closing of the merger between Merger Sub and Mobcrush.
 
On February 18, 2021, DLG provides Mobcrush and its counsel with the initial draft of an Agreement and Plan of Merger (the "Merger Agreement"). The draft Merger Agreement included, among other things, customary representations and warranties, customary closing conditions, the payment of expenses if the Merger Agreement were terminated in certain circumstances, and a to-be-determined fixed exchange ratio of Mobcrush common and preferred stock for Super League Common Stock.
 
From February 19, 2021, to February 24, 2021, senior management of Super League scheduled calls with key employees of Mobcrush in order to further the due diligence on Mobcrush employee integration, roles of key employees, technology platforms, and sales processes.
 
On February 26, 2021, Ropes & Gray, LLP ("Ropes & Gray"), legal counsel to Mobcrush, sent to DLG a revised draft of the merger agreement. During the period between February 26, 2021 and March 7, 2021, DLG, on the one hand, and Ropes and Gray, on the other hand, at the direction and with the guidance and input of their respective clients, exchanged several drafts of the merger agreement and related agreements and documents and engaged in negotiations regarding the terms and conditions of the Merger Agreement. During such period, members of senior management of Super League, on the one hand, and Mobcrush, on the other hand, also engaged in negotiations regarding the terms and conditions of the Merger Agreement, including treatment of options to purchase Mobcrush common stock, no-shop provisions, and termination upon certain events and the payment of transaction expenses in the event of such termination.
 
On March 1, 2021, the Board of Directors of Super League hold a special meeting in which they discuss the current status of the Merger Agreement, the proposed terms as currently set forth in the draft Merger Agreement, and the status of the discussions and negotiations between the management and outside advisors of Mobcrush and Super League.
 
Over the course of the afternoon of March 8 and through the evening of March 9, 2021, representatives of each of DLG and Ropes & Gray continued to negotiate the draft Merger Agreement, including the parties’ confidential disclosure schedules to the Merger Agreement.
 
On March 9, 2021, the Board of Directors of Super League reviewed the final Merger Agreement, and unanimously approved the Merger Agreement and the Acquisition by written consent.
 
On March 10, 2021, Super League, Mobcrush, and Merger Sub, executed and delivered the Merger Agreement, providing for the acquisition of all of the equity interests in Mobcrush for an aggregate of 12,582,204 shares of Super League Common Stock.
 
On March 11, 2021, the transaction was announced before the market open in New York.
 
On April 20, 2021, the parties came to an agreement on the treatment of outstanding stock options previously issued by Mobcrush following the closing of the Merger. As a result, on April 20, 2021 the parties entered into an amendment to the Merger Agreement to include the treatment of the outstanding Mobcrush options within the terms of the Merger Agreement, and to extend the termination date for the Merger Agreement to June 30, 2021.
 
 
-51-
 
 
Overview of Mobcrush
 
Mobcrush Streaming, Inc. is a company incorporated under the laws of the state of Delaware in May 2020, and a successor company to Mobcrush, Inc., a company incorporated under the laws of the state of Delaware on July 17, 2014. On May 4, 2020, Mobcrush, Inc. completed an assignment for the benefit of creditors pursuant to a formal asset purchase agreement, whereby Mobcrush, Inc. transferred to Mobcrush ownership in and to certain assets of Mobcrush, Inc. Mobcrush is headquartered in Santa Monica, California.
 
Mobcrush is a leading gaming technology platform that empowers gamers and influencers to reach all of their fans simultaneously across live streaming and social media platforms. Mobcrush has been downloaded by more than 600,000 creators who generate almost two million hours of original content annually and have accumulated more than 4.5 billion fans and subscribers. Along with free multi-streaming distribution, Mobcrush’s proprietary technology ReplayEngine gives gamers the ability to capture and share amazing highlight moments in real time via artificial intelligence with a single tap. Mobcrush powers full-service live streaming, influencer activations, and esports content creation and distribution at scale. The company’s Sponsored Live Breaks and other advertising solutions create authentic connections for brands with creators and their fans across a broad spectrum of video game entertainment. The company also owns and operates InPVP’s Mineville, one of six official Microsoft Minecraft partner servers, enjoyed by more than 22 million unique players annually. Through its longstanding commitment to advancing the intersection of gameplay, live streaming, and content creation, Mobcrush continues to be a leading platform helping players and creators pursue their passion and make a living while doing so.
 
Mobcrush's main office is located at 100 Wilshire Blvd., Ste. 1200, Santa Monica, California, 90401, and its telephone number is +1 (424) 291-2103. Mobcrush's website address is www.mobcrush.com.
 
Reasons for the Merger
 
We believe the Merger is in the best interests of the Company and its stockholders because we believe that the combination of Mobcrush and Super League brings together industry-leading technology platforms and strengthens Super League’s position as a leading provider of e-gaming content and related services, creating significantly enhanced scale and geographic reach across the United States.
 
Our focus has always been to provide competitive video gaming and esports entertainment for everyday players of all ages, and, over the 12 months we have gained an increasing appreciation for the value of putting tools into the hands of the players themselves to create and share their own gameplay and relevant content with others. This mission speaks to the overall democratization of content creation, the Gen Z and Millennial thirst to create and share, and their desire to spend more and more of their day connecting and communicating in a virtual space and time and in a highly engaging and creative way. We believe gaming is only an entry point, and the opportunity is larger than just gaming, and in fact, Super League is a social, media, and entertainment platform, and, when combined with Mobcrush, we expect to substantially increase this reach.
 
Currently, we engage with large audiences of gamers and extend beyond just gameplay, generating three primary sources of value as follows:
 
First, we create a powerful marketing channel for advertisers and brands to reach the elusive, Gen Z, Millennial, gamer and creator audience.
 
Second, our digital marketplace launch that we seeded in the second half of 2020 empowers the players and creators themselves to create a diverse breadth of digital goods that speak to precisely what our community wants and participate in the economy.
 
Third, the significant amount of derivative content produced on our technology platform that, in itself, provides a significant source of future monetization opportunities.
 
 
 
-52-
 
 
Key macro trends that speak to how Gen Z and Millennials want to create, share, and participate in their own content creation have established a powerful business model for Super League. We believe the acquisition of Mobcrush represents the most material shift in Super League’s overall trajectory, providing a step-function increase in our scale and forward revenue generating opportunities.
 
Mobcrush is a live streaming platform used by hundreds of thousands of gaming influencers who generate and distribute almost two million hours of original content annually to their own social audiences aggregating more than 4.5 billion fans and subscribers across the most popular live streaming and social media platforms, including Twitch, YouTube, Facebook, Instagram, Twitter, and more. Mobcrush also owns Mineville, one of six exclusive, official Minecraft server partners enjoyed by more than 22 million unique players annually.
 
We believe that our two companies are aligned and are complementary in the most critical aspects of our business- our customers and offerings, monetization, key performance indicators and other revenue opportunities, each as further described below.
 
Customers and Offers
 
Super League has consistently focused on individuals considered to be ‘mid-tier gamer’. These individuals are not considered full-time gamers, but are highly competitive and engaged, enjoy sharing their gameplay and entertainment content more widely. Our offers such as Framerate, Super League Arena and Super League TV align with that segment. And uniquely inside of this tier, we have a growing foothold on the younger engaged gamer mainly through our owned and operated digital property, Minehut – one of the world’s largest, expanding online communities of Minecraft players with over 1 million unique monthly players. Players enjoy ‘freemium’ or limited free-to-play, private server hosting along with social, gameplay and entertainment experiences.
 
We believe Mobcrush focuses on the same segments. Mobcrush’s free live streaming toolkit is offered to up-and-coming mid-tier streamers as a way to build and monetize their own livestream content. Their mission is to provide these streamers with an opportunity to turn their passion into their livelihood. This demographic aligns with Super League’s 16- to 34-year-old target demographic. In addition, Mobcrush’s Mineville product is highly complementary to Super League’s Minehut audience, which is squarely focused on young, avid Minecraft players.
 
Monetization
 
We believe there is significant alignment with respect to the monetization of Super League and Mobcrush. First both companies have focused on audience development to support their primary revenue stream to-date – a premium advertising model. We believe media is all about scale – and while both companies have reached a degree of critical mass organically and individually – we believe Super League and Mobcrush combined will make us a leading provider of content-driven advertising solutions to brands, advertisers, and other consumer facing businesses with substantial audience reach across channels in video gaming, including advertising at competitive events, social media and live streaming content, and in-game experiences.
 
 
 
-53-
 
 
In addition, with the acquisition of Mobcrush, we believe we are building a formidable, highly scalable gaming-centric media and advertising platform that reaches one of the largest addressable audiences of gamers in the U.S. We believe that Super League’s premium owned and operated in-game and video inventory, coupled with Mobcrush’s television-equivalent and ad-blocker-proof in-stream sponsor inventory, has the potential to create a sought-after solution for advertisers targeting gamers. Further, we believe both companies also share revenue potential by way of direct gamer monetization through Super League’s and Mobcrush’s Minehut and Mineville Minecraft properties, respectively. Minehut’s early-stage marketplace offering players and creators both subscription and one-time digital offerings that allow our customers to purchase expanded server capability, purchase cosmetic goods, and over time, purchase access to new games. Similarly, in Mineville, players can purchase digital goods in Minecraft’s marketplace – such as game entry fees and cosmetic skins. We believe that there are significant opportunities to amplify both of these businesses through the cross-marketing of our communities and the cross-fertilization of our offers.
 
Moreover, we believe each company has an additional emerging leg of revenue, focused on both the value of our derivative content and our proprietary technology to create and distribute content. During 2020, Super league reported a significant increase in revenues generated from syndicating our derivative content to others like Snapchat and Cox Media, and we now have partnerships in place or pending to syndicate our content through multiple over-the-top services. Similarly, Mobcrush’s live streaming technology platform and proprietary AI-driven gameplay highlights software amasses a large amount of derivative content that we believe, when coupled with our gamer generated content, can create a compelling library of competitive gameplay and entertainment content for future monetization.
 
Key Performance Indicators
 
From a key performance indicator and metrics standpoint, we believe the combination of Super League and Mobcrush has the potential to represent a new, higher level of increased scale and reach, including the following:
 
The combined companies have the potential to reach more than 25 million players per year, three million players per month, with over 400,000 players per day.
 
In addition, the combination of Super League and Mobcrush has the potential for a U.S. monthly viewing audience of 85 million, which would create for a top 50 U.S. media property according to measurements used by Nielsen.
 
Annually, Super League and Mobcrush combined have the potential to generate 7.7 billion annual U.S video views across live streaming platforms, two billion views on social media platforms, and enable 60 million hours of gameplay on owned and operated platforms.
 
Collectively, we believe the combined companies could generate and distribute over 200,000 gameplay highlights across streaming and social channels per month.
 
Established Revenue Stream
 
We expect Mobcrush to bring two established revenue streams to Super League as a result of the Merger. First, Mobcrush has an established sales and business development team, driving branded media activations in gaming, social media, and packaging and bringing branded sponsorships underwriting the free AI-clipping service ReplayEngine for streamers to enhance their content and generate incremental revenue during their live streams. Second, Mineville, Mobcrush’s Minecraft Bedrock edition server, is one of six server partners for Microsoft available across consoles, PCs, and mobile devices.  Mineville is a free to play Minecraft server that monetizes based on sales of game modes, ranks, pets, and cosmetic items players purchase in the free to play server environment.
 

 
 
-54-
 

 
Opinion of Super League’s Financial Advisor
 
Super League has retained Economics Partners, LLC, which we refer to as Economics Partners, to act as Super League’s financial advisor in connection with the Merger.

On April 21, 2021, Economics Partners rendered its oral opinion to the Super League board (which was subsequently confirmed in writing by delivery of Economics Partners’ written opinion dated the same date) that, as of April 21, 2021, the shares of Super League common stock issuable as Merger Consideration (the “Per Shar Merger Consideration to be paid by Super League pursuant to the Merger Agreement was fair, from a financial point of view, to Super League.
 
Economics Partners’ opinion was directed to the Super League board, and only addressed the fairness, from a financial point of view, to Super League of the Per Shar Merger Consideration to be paid Super League in the Merger and did not address any other aspect or implication of the Merger. The summary of Economics Partners’ opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is included as Annex D this proxy statement and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Economics Partners in connection with the preparation of its opinion. However, neither Economics Partners’ written opinion nor the summary of its opinion and the related analyses set forth in this proxy statement is intended to be, and they do not constitute, advice or a recommendation to any securityholder as to how such securityholder should vote or act with respect to any matter relating to the Merger.
 
In arriving at its opinion, Economics Partners:
 
reviewed the Merger Agreement and other documents related to the proposed transaction; Economics Partners notes that after discussions with Super League, it is our understanding that the material terms of the agreement were agreed to on the date the term sheet for the Merger (the “Term Sheet”) was signed – January 29th, 2021;
reviewed certain publicly available business and financial information relating to Super League;
reviewed certain other information relating to Mobcrush and Super League, including financial forecasts relating to Mobcrush for the calendar years ending December 31, 2021 through December 31, 2022 prepared by the management of Mobcrush and revised and provided to us by the management of Super League;
met with the managements of Mobcrush and Super League and certain of their respective representatives to discuss the businesses and prospects of Mobcrush and Super League;
reviewed estimates prepared and provided to Economics Partners by the management of Super League with respect to the cost savings and revenue synergies, net of costs necessary to achieve such cost savings and revenue synergies, anticipated by such management to result from the Merger, which we refer to as the synergies estimates;
considered certain financial data of Mobcrush and Super League and certain stock market data of Super League, in each case through January 29, 2021, and compared that data with similar data for the period through January 29, 2021, for companies with other publicly traded equity securities in businesses Economics Partners deemed similar to those of Mobcrush;
considered, to the extent publicly available on or prior to January 29, 2021, the financial terms of certain other business combinations and other transactions which had been completed or announced and which Economic Partners deemed relevant; and
considered such other information, financial studies, analyses and investigations and financial, economic and market criteria that Economics Partners deemed relevant.
 
 
 
-55-
 
 
 
In connection with its review, Economics Partners did not independently verify any of the foregoing information, and, with the consent of the Super League board, Economics Partners assumed and relied upon such information being complete and accurate in all respects material to its analyses and opinion. With respect to the Mobcrush financial projections that Economics Partners relied upon for purposes of its analyses, Economics Partners was advised by the managements of Mobcrush and Super League, and Economics Partners assumed with Super League’s consent, that such forecasts and estimates had been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of the managements of each of Mobcrush and Super League as to the future financial performance of Mobcrush. With respect to the synergies estimates that Economics Partners relied upon for purposes of its analyses, Economics Partners has been advised by the management of Super League, and Economics Partners assumed with Super League’s consent, that such estimates have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of the management of Super League as to the cost savings and revenue synergies, net of costs necessary to achieve such cost savings and revenue synergies, anticipated by such management to result from the Merger, and will be realized in the amounts and the times indicated thereby. At Super League’s direction, Economics Partners assumed that the projections for Mobcrush and the synergies estimates are a reasonable basis upon which to evaluate Mobcrush and the Merger and, at Super League’s direction, Economics Partners relied upon the projections for Mobcrush and the synergies estimates for purposes of its analyses and opinion. Economics Partners expressed no view or opinion with respect to the Super League projections for Mobcrush, or the synergies estimates, or the assumptions and methodologies upon which they are based.
 
For purposes of its analyses and opinion, Economics Partners had been advised and Economics Partners assumed, the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. With the consent of the Super League board, Economics Partners assumed that, in the course of obtaining any regulatory or third party consents, approvals or agreements in connection with the Merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on Mobcrush, Super League or the contemplated benefits of the Merger, and that the Merger would be consummated in compliance with all applicable laws and regulations and in accordance with the terms of the Merger agreement, without waiver, modification or amendment of any term, condition or agreement thereof that was material to Economics Partners’ analyses or opinion. In addition, Economics Partners was not requested to make, and did not make, an independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of Mobcrush or Super League, nor was Economics Partners furnished with any such evaluations or appraisals.
 
Economics Partners’ opinion addressed only the fairness, from a financial point of view, to Super League of the Per Share Merger Consideration to be paid by Super League pursuant to the Merger Agreement and did not address any other aspect or implication of the Merger or any other agreement, arrangement or understanding entered into in connection therewith or otherwise, including, without limitation, the form or structure of the Merger or the Per Share Merger Consideration and the fairness of the amount or nature of, or any other aspect relating to, any compensation, if any, or consideration to be received by or otherwise payable to any officers, directors, employees, securityholders or affiliates of any party to the merger, or class of such persons, relative to the Per Share Merger Consideration or otherwise. Furthermore, Economics Partners did not express any advice or opinion regarding matters that require legal, regulatory, accounting, insurance, tax, environmental, intellectual property, executive compensation or other similar professional advice. Economics Partners assumed that Super League had or would obtain such advice or opinions from the appropriate professional sources. The issuance of Economics Partners’ opinion was approved by Economics Partners’ authorized internal committee.
 
Economics Partners’ opinion was necessarily based upon information made available to Economics Partners as of the date of its opinion and financial, economic, market and other conditions as they existed and could be evaluated on the date of its opinion. Economics Partners did not undertake, and is under no obligation, to update, revise, reaffirm or withdraw its opinion, or otherwise comment on or consider events occurring or coming to Economics Partners’ attention after the date of its opinion. Economics Partners did not express any opinion as to what the value of Super League common stock actually will be when issued to the holders of Mobcrush common and preferred stock pursuant to the Merger Agreement or the prices or ranges of prices at which Mobcrush common and preferred stock or Super League common stock may be purchased or sold at any time. Economics Partners assumed that Super League common stock to be issued in the Merger will be listed on the Nasdaq Stock Markets as of the consummation of the Merger. Economics Partners’ opinion did not address the relative merits of the Merger as compared to alternative transactions or strategies that might have been available to Super League, nor did it address the underlying business decision of the Super League board or Super League to proceed with or effect the Merger.
 
 
-56-
 
 
 
Economics Partners’ opinion was for the information of the Super League board and does not constitute a recommendation to any securityholder of Super League or Mobcrush as to how such securityholder should vote or act on any matter relating to the proposed Merger.
 
In preparing its opinion to the Super League board, Economics Partners performed a variety of analyses, including those described below. The summary of Economics Partners’ financial analyses is not a complete description of the analyses underlying Economics Partners’ opinion. The preparation of such an opinion is a complex process involving various quantitative and qualitative judgments and determinations with respect to the financial, comparative and other analytic methods employed and the adaptation and application of those methods to the unique facts and circumstances presented. As a consequence, neither Economics Partners’ opinion nor the analyses underlying its opinion are readily susceptible to partial analysis or summary description. Economics Partners arrived at its opinion based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with regard to any individual analysis, analytic method or factor. Accordingly, Economics Partners believes that its analyses must be considered as a whole and that selecting portions of its analyses, analytic methods and factors, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying its analyses and opinion.
 
In performing its analyses, Economics Partners considered business, economic, industry and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of, the date of its opinion. No company, business or transaction used in Economics Partners’ analyses for comparative purposes is identical to Mobcrush, Super League or the Merger. While the results of each analysis were taken into account in reaching its overall conclusion with respect to fairness, Economics Partners did not make separate or quantifiable judgments regarding individual analyses. The implied valuation reference ranges indicated by Economics Partners’ analyses are illustrative and not necessarily indicative of actual values nor predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. In addition, any analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold, which may depend on a variety of factors, many of which are beyond the control of Super League, Mobcrush and Economics Partners. Much of the information used in, and accordingly the results of, Economics Partners’ analyses are inherently subject to substantial uncertainty.
 
Neither Economics Partners’ opinion nor its analyses were determinative of the Per Share Merger Consideration or of the views of the Super League board with respect to the Merger.
 
Financial Analyses
 
The following is a summary of the material financial analyses performed in connection with the preparation of Economics Partners’ opinion rendered to the Super League board on April 21, 2021. The analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies underlying, and the assumptions, qualifications and limitations affecting, each analysis, could create a misleading or incomplete view of Economics Partners’ analyses.
 
Based on the Per Share Merger Consideration to be received by holders of Mobcrush common and preferred stock in the Merger of 12,582,204 shares of Super League common stock, Economics Partners noted that the implied value of the Per Share Merger Consideration was $38.63 million (based on the closing price for Super League common stock on January 29, 2021 of $3.07, as reported on the Nasdaq Capital Market).
 
For purposes of its analyses, Economics Partners reviewed a number of financial metrics, including:
 
Enterprise Value —generally the value as of a specified date of the relevant company’s outstanding equity securities (taking into account its options and other outstanding dilutive securities) plus the value as of such date of its net debt (the value of its outstanding indebtedness, preferred stock and capital lease obligations less the amount of cash and cash equivalents on its balance sheet) and non-controlling interests (as applicable).
Trailing Twelve Month (“TTM”) Revenue —generally the amount of the relevant company’s revenues in the four most recent fiscal quarters available as filed as of the date of the opinion.
Estimated 2021 Revenue —generally the amount of the relevant company’s revenues projected for the fiscal year ended December 31, 2021.
 
 
-57-
 
 
 
Selected Companies Analysis Regarding Mobcrush
 
Economics Partners considered certain financial data for Mobcrush and selected companies with publicly traded equity securities that Economics Partners deemed relevant. The selected companies were selected because they were deemed to be similar to Mobcrush in one or more respects. Stock prices for the selected companies used in the selected companies analysis described below were as of January 29, 2021. The estimates of Mobcrush’s future financial performance for the fiscal years ending December 31, 2021 and December 31, 2022 used in the selected companies analysis described below were based on the Company’ projections. Estimates of the future financial performance of the selected companies listed below for the calendar years ending December 31, 2021 and December 31, 2022 were based on publicly available research analyst estimates for those companies that were publicly available on or prior to January 29, 2021. The implied valuation metrics for Mobcrush set forth below did not include expected synergies.
 
The financial data reviewed included:
 
Enterprise Value as a multiple of TTM Revenue
Enterprise Value as a multiple of estimated Revenue for calendar year ended December 31, 2021, which we refer to as 2021E Revenue
 
The companies selected by Economics Partners and the multiples considered by Economics Partners in its analysis were as follows:
 
 
Taking into account the results of the selected companies analysis, Economics Partners applied multiple ranges (in each case selected based upon its professional judgment of (i) 3.0x to 4.5x to Mobcrush’s estimates of its TTM Revenue as of December 31, 2020 and (ii) 2.5x to 4.0x to Super Leagues’ estimates of the Company’s expected revenue for the fiscal year ending December 31, 2021. The selected companies analysis indicated the following approximate implied enterprise value reference ranges for Mobcrush, as compared to the implied value of the Per Share Merger Consideration (based on the closing price for Super League common stock on January 29, 2021 of $3.07):
 
Implied Enterprise Value Reference Range - TTM
 
Per Share Merger Consideration
$19.60 million to $29.40 million
 
$38.63 million
 
Implied Enterprise Value Reference Range – 2021E
 
Per Share MergerConsideration
$44.40 million to $71.00 million
 
$38.63 million
 
 
  -58-
 
 
 
Selected Transactions Analysis Regarding Mobcrush
 
Economics Partners also considered the financial terms of certain business combinations and other transactions announced or completed since 2018 and on or prior to January 29, 2021 that Economics Partners deemed relevant. The selected transactions were selected because the target companies were deemed to be similar to Mobcrush in one or more respects. Financial data for the selected transactions were based on public filings, publicly available research analysts’ estimates, and other publicly available information. Financial data for Mobcrush were based on information provided by Mobcrush and Super League.
 
The financial data for the selected transactions reviewed by Economics Partners included:
 
Enterprise Value implied by the consideration proposed or paid in each selected transaction, as a multiple of the target company’s TTM Revenue as of the transaction announcement date, which we refer to as “Trailing Revenue”.
Enterprise Value implied by the consideration proposed or paid in each selected transaction, as a multiple of the target company’s estimated next twelve months Revenue, which we refer to as “NTM Revenue”.
 
The transactions selected by Economics Partners and the multiples considered by Economics Partners in its analysis were as follows:
 
 
Taking into account the results of the selected transactions analysis, Economics Partners applied a multiple range of (i) 3.25x to 4.50x to Mobcrush’s TTM Revenue as of December 31, 2020 and (ii) 2.00x to 3.00x to Mobcrush’s NTM Revenue as of December 31, 2020. The selected transactions analysis indicated the following approximate implied enterprise value reference range for Mobcrush, as compared to the implied value of the Per Share Merger Consideration (based on the closing price for Super League common stock on January 29, 2021 of $3.07):
 
Implied Enterprise Value Reference Range – TTM
 
Per Share MergerConsideration
$21.20 million to $29.40 million
 
$38.63 million
 
Implied Enterprise Value Reference Range – NTM
 
Per Share MergerConsideration
$35.50 million to $53.3 million
 
$38.63 million
 
Base Discounted Cash Flow Analysis Regarding Mobcrush
 
Economics Partners also performed a discounted cash flow analysis with respect to Mobcrush by calculating the estimated net present value of the projected after-tax, unlevered free cash flows of Mobcrush based on the Company’s projections. Economics Partners applied a range of terminal value multiples of 2.75x to 3.25x to Super Leagues’ estimate of Mobcrush’s fiscal year ending December 31, 2022 revenue and discount rates ranging from 30.0% to 40.0%. The discounted cash flow analysis indicated the following approximate implied equity value reference range for Mobcrush, as compared to the implied value of the Per Share Merger Consideration (based on the closing price for Super League common stock on January 29, 2021 of $3.07):
 
Implied Enterprise Value Reference Range
 
Per Share MergerConsideration
$51.50 million to $68.50 million
 
$38.63 million
 
 
  -59-
 
 
 
Synergy Discounted Cash Flow Analysis Regarding Mobcrush
 
Economics Partners also performed a discounted cash flow analysis with respect to Mobcrush by calculating the estimated net present value of the projected after-tax, unlevered free cash flows of Mobcrush based on the Company’s projections. Economics Partners also included in this analysis the net benefit of synergies as projected by Super League. Economics Partners applied a range of terminal value multiples of 2.75x to 3.25x to Super Leagues’ estimate of Mobcrush’s fiscal year ending December 31, 2022 revenue and discount rates ranging from 30.0% to 40.0%. The discounted cash flow analysis indicated the following approximate implied enterprise value reference range for Mobcrush, as compared to the implied value of the Per Share Merger Consideration (based on the closing price for Super League common stock on January 29, 2021 of $3.07):
 
Implied Enterprise Value Reference Range
 
Per Share Merger Consideration
$52.90 million to $70.00 million
 
$38.63 million
 
Other Matters
 
Super League retained Economics Partners as its financial advisor in connection with the proposed Merger based on Economics Partners’ qualifications, experience and reputation as an internationally recognized management consulting and financial advisory firm and Economics Partners’ experience in transactions similar to the Merger and familiarity with Mobcrush and its business. Economics Partners will become entitled to receive a transaction fee of $85,000 which became payable upon the delivery of Economics Partners’ opinion. In addition, Super League has agreed to reimburse Economics Partners for certain of its expenses and indemnify Economics Partners and certain related parties for certain liabilities and other items arising out of or related to its engagement.
 
Economics Partners and its affiliates in the past provided valuation services to Mobcrush for which services Economics Partners and its affiliates have received compensation, including, during the past two years, providing 409a valuation services. In addition, Economics Partners and its affiliates may in the future provide management consulting and other financial advice and services to Mobcrush, Super League and their respective affiliates for which advice and services Economics Partners and its affiliates would expect to receive compensation. Economics Partners is a management consulting and financial services firm. In the ordinary course of business, Economics Partners and its affiliates may provide services to Mobcrush, Super League, or its customers or associates.
 
 
 
-60-
 
 
INFORMATION ABOUT THE MERGER AGREEMENT
 
The following is a summary of the material provisions of the Merger Agreement, but does not purport to describe all of the terms thereof and may not contain all of the information about the Merger Agreement that is important to you. The following summary is qualified in its entirety by reference to the complete text of the Merger Agreement, which is attached as Annex A to this proxy statement. You should refer to the full text of the Merger Agreement for details about the transaction and the terms and conditions of the Merger Agreement.
 
On March 9, 2021, the Company, Merger Sub, and Mobcrush, entered into the Merger Agreement, pursuant to which the Company agreed to acquire Mobcrush through the merger of Merger Sub with and into Mobcrush, with Mobcrush continuing as the surviving corporation of such merger, subject to the satisfaction or waiver of certain conditions, as further described below. For U.S. federal income Tax purposes, it is intended that the Merger qualify as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code, and the regulations promulgated thereunder, that this Agreement will constitute a "plan of reorganization" for purposes of Sections 354 and 361 of the Code.
 
As disclosed above, the agreed upon purchase price for the Merger is 12,582,204 in shares of our common stock, subject to certain adjustments for amounts owed by Mobcrush pursuant to certain outstanding convertible promissory notes. In addition, we expect approximately 2,087,000 unvested option to acquire shares of Mobcrush common stock outstanding immediately prior to the effective time will be terminated, and options to purchase shares of Super League common stock will be issued to replace the cancelled options (the “Replacement Options”) in an amount and under terms and conditions as is customary for Super League and as determined by Super League's Board of Directors. The Replacement Options will have an exercise price of not less than 85% of the closing price of our common stock on the date of the Merger Agreement, have a term of ten years, and will be subject to Super League’s traditional four-year vesting schedule, with vesting beginning on the one-year anniversary of the closing of the Merger. We expect to issue an aggregate total of approximately 500,000 Replacement Options upon closing of the Merger.
 
Pursuant to the Merger Agreement, certain stockholders of Mobcrush and the Company (collectively, the “Voting Stockholders”) will enter into voting agreements (collectively, the “Voting Agreements”) pursuant to which the Voting Stockholders will agree, among other things, to (i) vote in favor of the Merger Agreement and the transactions contemplated thereby and (ii) be bound by certain other covenants and agreements related to the Merger. A form of the Voting Agreement is included as an exhibit to the Merger Agreement, which is attached to this proxy statement as Annex B.
 
Pursuant to the Merger Agreement, the Company agreed to increase the size of its board of directors by two members in order to elect to the board of directors, promptly following and in any event within five business days following the Closing Date, Mike Wann as a director (and as the initial appointee of the previous Mobcrush equityholders as described below) and the remaining member to be mutually agreed upon by Mike Wann and the other members of Parent's Board of Directors, for which such director must meet the requirements of an "independent director" pursuant to the rules and regulations of the Nasdaq Stock Market.
 
At the closing of the Merger, among other things contemplated in the Merger Agreement: (i) the directors and officers of Merger Sub, as appointed and elected by Super League's Board of Directors, shall be the directors and officers of Mobcrush; (ii) the holders of Mobcrush securities will receive a fraction of a share of Super League equal to 52.8% (the "Exchange Ratio"), for an aggregate number of 12,582,204 shares of Super League Common Stock to be issued to the Mobcrush equity holders; (iii) the previous Mobcrush equityholders will receive cash in lieu of fractional shares of Super League Common Stock; and (iv) the Company, Mike Wann, and certain other holders of Mobcrush Preferred Stock (Mike Wann and such holders of Mobcrush Preferred stock are collectively, the "Rights Parties") will enter into a registration rights agreement (the “Registration Rights Agreement”) pursuant to which, among other matters, the Rights Parties will be granted certain customary registration rights with respect to the shares of Super League acquired pursuant to the Merger. A form of the Registration Rights Agreement is included as an exhibit to the Merger Agreement, which is attached to this proxy statement as Annex A.
   
 
-61-
 
 
The obligations of Super League and Mobcrush to consummate the transactions contemplated by the Merger Agreement are subject to the satisfaction or waiver of, among other closing conditions, (i) the accuracy of the representations and warranties in the Merger Agreement, (ii) the compliance by the parties with the covenants in the Merger Agreement, (iii) the absence of any legal order barring the Merger, (iv) Mobcrush receiving written notice from Microsoft Corporation consenting to the transactions contemplated by the Merger Agreement, and waiving its right to terminate, that certain Minecraft Online Channel Agreement, dated April 24, 2017 (the "Channel Agreement"), with such notice to further provide confirmation that the Channel Agreement shall remain in full force and effect after the closing of the Merger Agreement, and (v) the receipt of any pertinent regulatory approvals. The obligation of the Company to effect the closing is also subject to the satisfaction or waiver of the condition that no more than 2% of the shares of common stock and preferred stock of Mobcrush issued and outstanding as of immediately prior to the closing have properly demanded appraisal for such shares pursuant to Section 262 of the General Corporation Law of the State of Delaware.
 
The Merger Agreement contains customary representations and warranties given by Mobcrush, the Company, and Merger Sub, in each case generally subject to customary materiality qualifiers. The Company and Mobcrush have also each made customary covenants in the Merger Agreement, including covenants by each of the parties relating to conduct of their respective businesses prior to the closing of the Merger. The Merger Agreement also contains a covenant by Mobcrush and the Company not to, and to cause its affiliates, subsidiaries, officers, directors, employees and representatives not to, solicit, initiate or encourage the initiation of, participate in any discussions or negotiations regarding, or agree to any acquisition proposal by a third party.
 
Pursuant to the Merger Agreement, the parties are provided with customary termination rights, including the right of either party to terminate the Merger Agreement if the consummation of the Merger has not occurred on or prior to April 30, 2021 ("Outside Date") unless the party electing to terminate the Merger Agreement is in breach of its representations or obligations under the Merger Agreement and such breach caused the failure of a condition to closing or was the primary cause of the failure to consummate the closing prior to the Outside Date. If the Merger Agreement is terminated for a breach pursuant to the terms of the Merger Agreement, either by the Company or Mobcrush, the breaching party is responsible to the non-breaching party for expenses incurred in relation to the Merger and the drafting and negotiation of the Merger Agreement. The Merger is expected to close in the second quarter of 2021 subject to the satisfaction of the closing conditions as described above.
 
The representations, warranties and pre-closing covenants of Mobcrush under the Merger Agreement do not survive the closing of the Merger, and the Company disclaims any remedies for any such matters following the closing.
 
On April 20, 2021, the Company and Mobcrush entered into Amendment No. 1 to Agreement and Plan of Merger (the “Amendment”), amending the Merger Agreement. Pursuant to the Amendment, the Merger Agreement was modified as follows: (i) the termination date was extended to June 30, 2021, and (ii) all vested options of Mobcrush common stock will be exercised prior to the consummation of the Merger, and all unvested options will be cancelled. We expect there will be approximately 1,230,000 vested options and 2,087,000 unvested options to acquire Mobcrush common stock outstanding immediately prior to the closing of the Merger. The vested options exercised prior to the closing of the Merger will not increase the 12,582,204 shares of the Company’s common stock expected to be issued as Merger Consideration under the terms of the Merger Agreement, as amended by the Amendment.
 
 
-62-
 
  
RISK FACTORS RELATED TO THE MERGER AND MERGER AGREEMENT
 
Investment in our securities involves a high degree of risk. You should consider carefully the following risks and the risks and uncertainties described under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as updated by our subsequent Quarterly Reports on Form 10-Q, and our other filings with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, which are incorporated herein by reference, before you decide whether to purchase any of our securities. These risks could materially adversely affect our business, financial condition, results of operations and cash flows, and you may lose part or all of your investment. For more information, see “Where You Can Find More Information.”
 
We may experience difficulties in integrating the operations of Mobcrush into our business and in realizing the expected benefits of the Merger.
 
The success of the Merger will depend in part on our ability to realize the anticipated business opportunities from combining the operations of Mobcrush with our business in an efficient and effective manner. The integration process could take longer than anticipated and could result in the loss of key employees, the disruption of each company’s ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures and policies, any of which could adversely affect our ability to maintain relationships with customers, employees or other third parties, or our ability to achieve the anticipated benefits of the Merger, and could harm our financial performance. If we are unable to successfully or timely integrate the operations of Mobcrush with our business, we may incur unanticipated liabilities and be unable to realize the revenue growth, synergies and other anticipated benefits resulting from the Merger, and our business, results of operations and financial condition could be materially and adversely affected.
 
We have incurred significant costs in connection with the Merger. The substantial majority of these costs are non-recurring expenses related to the Merger. These non-recurring costs and expenses are not reflected in the unaudited pro forma condensed combined financial information incorporated by reference in this proxy statement. We may incur additional costs in the integration of Mobcrush’s business, and may not achieve cost synergies and other benefits sufficient to offset the incremental costs of the Merger.
 
The Merger is subject to conditions to closing that could result in the Merger being delayed or not consummated and can be terminated in certain circumstances, each of which could negatively impact our stock price and future business and operations.
 
The Merger is subject to conditions to closing as set forth in the Merger Agreement. In addition, each of the Company and Mobcrush has the right, in certain circumstances, to terminate the Merger Agreement. If the Merger Agreement is terminated or any of the conditions to the Merger are not satisfied and, where permissible, not waived, the Merger will not be consummated. Failure to consummate the Merger or any delay in the consummation of the Merger or any uncertainty about the consummation of the Merger may adversely affect the Company’s stock price or have an adverse impact on the Company’s future business operations.
 
If the Merger is not completed, the Company’s ongoing business may be adversely affected and, without realizing any of the benefits of having completed the Merger, it would be subject to a number of risks, including the following:
 
negative reactions from the financial markets and from persons who have or may be considering business dealings with the Company;
financial difficulties that the Company may experience;
the Company will be required to pay certain costs relating to the Merger, whether or not the Merger is completed; and
the Company has agreed to pay Mobcrush's expenses if the Merger Agreement is terminated in certain circumstances.
 
In addition, the Company could be subject to litigation related to any failure to complete the Merger or related to any proceeding commenced against the Company seeking to require the Company to perform its obligations under the Merger Agreement.
 
 
 
-63-
 
 
The Merger will present challenges associated with integrating operations, personnel, and other aspects of the companies and assumption of liabilities that may exist at Mobcrush and which may be known or unknown by the Company.
 
The results of the combined company following the Merger will depend in part upon the Company’s ability to integrate Mobcrush’s business with the Company’s business in an efficient and effective manner. The Company’s attempt to integrate two companies that have previously operated independently may result in significant challenges, and the Company may be unable to accomplish the integration smoothly or successfully. In particular, the necessity of coordinating geographically dispersed organizations and addressing possible differences in corporate cultures and management philosophies may increase the difficulties of integration. The integration may require the dedication of significant management resources, which may temporarily distract management’s attention from the day-to-day operations of the businesses of the combined company. In addition, the combined company may adjust the way in which Mobcrush or the Company has conducted its operations and utilized its assets, which may require retraining and development of new procedures and methodologies. The process of integrating operations and making such adjustments after the Merger could cause an interruption of, or loss of momentum in, the activities of one or more of the combined company’s businesses and the loss of key personnel. Employee uncertainty, lack of focus, or turnover during the integration process may also disrupt the businesses of the combined company. Any inability of management to integrate the operations of the Company and Mobcrush successfully could have a material adverse effect on the business and financial condition of the combined company.
 
In addition, the Merger will subject the Company to contractual or other obligations and liabilities of Mobcrush, some of which may be unknown. Although the Company and its legal and financial advisors have conducted due diligence on Mobcrush and its business, there can be no assurance that the Company is aware of all obligations and liabilities of Mobcrush. These liabilities, and any additional risks and uncertainties related to Mobcrush’s business and to the Merger not currently known to the Company or that the Company may currently be aware of, but that prove to be more significant than assessed or estimated by the Company, could negatively impact the business, financial condition, and results of operations of the combined company following consummation of the Merger.
 
The pro forma financial statements are presented for illustrative purposes only and might not be an indication of the combined company’s financial condition or results of operations following the Merger.
 
The pro forma financial statements contained in this proxy statement are presented for illustrative purposes only and might not be an indication of the combined company’s financial condition or results of operations following the Merger for several reasons. For example, the pro forma financial statements have been derived from the historical financial statements of the Company and Mobcrush and certain adjustments and assumptions have been made regarding the combined company after giving effect to the Merger. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with complete accuracy. Moreover, the pro forma financial statements do not reflect all costs that are expected to be incurred by the combined company in connection with the Merger. For example, the impact of any incremental costs incurred in integrating the Company and Mobcrush is not reflected in the pro forma financial statements. In addition, the assumptions used in preparing the pro forma financial information might not prove to be accurate, and other factors may affect the combined company’s financial condition or results of operations following the Merger. The Company’s stock price may be adversely affected if the actual results of the combined company fall short of the pro forma financial statements contained in this proxy statement. See the Unaudited Pro Forma Condensed Combined Financial Statements attached as Annex F to this proxy statement.
 
Completion of the Merger would result in the issuance of a significant number of additional shares of the Company’s Common Stock, which would reduce the voting power of the Company’s current stockholders and may depress the trading price of our common stock.
 
Completion of the Merger would result in the issuance of a significant number of shares of the Company’s common stock. As a result, the Company’s existing stockholders will not exert the same degree of voting power with respect to the combined company that they did before the consummation of the Merger. Further, the issuance of such a significant amount of common stock, and its potential sale in the public market from time to time, could depress the trading price of our common stock and you may lose all or a part of your investment.
 
 
 
-64-
 
 
The Company has incurred and will continue to incur significant transaction, combination-related and restructuring costs in connection with the Merger.
 
The Company has incurred and will continue to incur transaction fees and other expenses related to the Merger, including filing fees, legal and accounting fees, soliciting fees, regulatory fees, and printing and mailing costs. The Company also expects to incur significant costs associated with combining the operations of the two companies. It is difficult to predict the amount of these costs before we begin the integration process. The combined company may incur additional unanticipated costs as a consequence of difficulties arising from efforts to integrate the operations of the two companies. Although we expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, can offset incremental transaction, combination-related, and restructuring costs over time, we may not be able to achieve this net benefit in the near term, or at all. If the Merger is not completed, the Company would have to recognize these expenses without realizing the expected benefits of the Merger.
 
RISKS RELATED TO MOBCRUSH'S BUSINESS
 
Many of Mobcrush’s products rely on patent, copyright and/or other intellectual property protection and the combined company’s success will depend in part on obtaining and maintaining effective patent and other intellectual property protection for the proprietary technology and service offerings.
 
As with the Company’s current products and service offerings, the products and service offerings in Mobcrush's portfolio rely on patent and intellectual property exclusivity. The intellectual property rights protecting the Mobcrush services and products might not afford the combined company with meaningful protection from third parties infringing on the proprietary rights of Mobcrush. Competitors could also design around any of Mobcrush’s intellectual property or otherwise design competitive products that do not infringe Mobcrush’s intellectual property. If a product is approved for commercial sale and competitors are successful in such designs, it could have an adverse impact on the combined company’s revenue or results of operations.
 
If Mobcrush or the combined company fails to comply with obligations under any license, collaboration or other agreements, the combined company could lose intellectual property rights that are necessary for developing and commercializing product candidates.
 
Mobcrush’s intellectual property relating to the Minecraft Online Channel Agreement licensed from Microsoft corporation intellectual property relating to InPVP’s Mineville, one of six official Microsoft Minecraft partner servers. Mobcrush’s license agreements with Microsoft impose, and any future licenses or collaboration agreements the combined company might enter into are likely to impose, various development, maintenance, funding, milestone, royalty, diligence, sublicensing, copyright prosecution and enforcement and other obligations]. These type of agreements and related obligations are complex and subject to contractual disputes. If Mobcrush (and the combined company following the closing of the Merger) breaches any of these imposed obligations, or use the intellectual property licensed to Mobcrush in an unauthorized manner, Mobcrush (and the combined company following the closing of the Merger) might be required to pay damages or the licensor might have the right to terminate the license, which could result in the loss of the intellectual property rights and Mobcrush (and the combined company following the closing of the Merger) being unable to develop, manufacture and sell drugs that are covered by the licensed technology.
 
 
 
-65-
 
 
FINANCIAL INFORMATION ABOUT MOBCRUSH
 
For information about Mobcrush’s operations and financial condition, see (i) the unaudited consolidated financial statements of Mobcrush Streaming, Inc. as of March 31, 2021 and 2020 and for the quarter then ended and the related notes thereto, which are attached hereto as Annex E, and (ii) the unaudited pro forma condensed combined financial information, and the related notes thereto, of Super League Gaming, Inc. as of and for the quarter ended March 31, 2021, which are attached hereto as Annex F.
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF MOBCRUSH STREAMING, INC.
 
The following table sets forth the consolidated results of operations of Mobcrush. Mobcrush’s results of operations distinguish between a predecessor period (Predecessor) relating to Mobcrush, Inc. for the quarter ended March 31, 2020 and the successor period (Successor) relating to Mobcrush Streaming, Inc. for the quarter ended March 31, 2021. The information for the period ended March 31, 2021 is unaudited and does not comply with accounting principles generally accepted in the United States (U.S. GAAP).
 
 
 
   Three Months Ended March 31,  
 
 
 
 
 
 
 
2021
 
 
2020
 
 
 $ Change
 
 
 % Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Revenues
  2,377,000 
  1,659,000 
  718,000 
  43%
 
    
    
    
    
 Cost of sales
  1,581,000 
  1,034,000 
  547,000 
  53%
 
    
    
    
    
 Gross Profit
  796,000 
  625,000 
  171,000 
  27%
 
    
    
    
    
 Operating Expenses
    
    
    
    
 Selling and marketing expenses
  455,000 
  757,000 
  (302,000)
  (40)%
 Research and development expenses
  793,000 
  1,093,000 
  (300,000)
  (27)%
 General and administrative expenses
  771,000 
  704,000 
  67,000 
  10%
 Total operating expenses
  2,019,000 
  2,554,000 
  (535,000)
  (21)%
 
    
    
    
    
 Loss from Operations
  (1,223,000)
  (1,929,000)
  706,000 
  (37)%
 
    
    
    
    
 Other Income (Expense)
    
    
    
    
 Interest income
  - 
  9,000 
  (9,000)
  (100)%
 Interest expense
  (6,000)
  (39,000)
  33,000 
  (85)%
 Other income (expense)
  (2,000)
  (1,000)
  (1,000)
  100%
 
    
    
    
    
 Total Other Income (Expense)
  (8,000)
  (31,000)
  23,000 
  (74)%
 
    
    
    
    
 
    
    
    
    
 Net Loss
 $(1,231,000)
 $(1,960,000)
  729,000 
  (37)%
 
Comparison of the Results of Operations for the Three Months Ended March 31, 2021 and 2020
 
Revenue
 
 
 
 Three Months End March 31,
 
 
 
 
 
 
 
 
 
2021
 
 
2020
 
 
$ Change
 
 
 % Change
 
 Platform-as-a-service
  744,000 
 $493,000 
 $251,000 
  51%
 Advertising and content sales
  1,633,000 
  1,166,000 
 $467,000 
  40%
    Total revenue
 $2,377,000 
 $1,659,000 
 $718,000 
  43%
 
Revenues for the three months ended March 31, 2021 increased $718,000, or approximately 43%, compared to the three months ended March 31, 2020. 
 
 
-66-
 
 
The increase in revenues primarily reflects significant increases in advertising across the Mobcrush creator network and sponsorship revenues, compared to the first quarter of 2020, reflecting Mobcrush’s continued focus on the monetization of its increasing access to creator inventory and AI-driven content sponsorship. The increase was partially offset by a decrease of seasonal first quarter advertising market trends.
 
Advertising and sponsorship revenues for the three months ended March 31, 2021 increased by $467,000, or 40%, and composition of advertisers increased quarter over quarter by 10 campaigns, or 77%.
 
Mobcrush generates in-game Platform sales revenues via digital goods sold within the platform, including cosmetic items, durable goods, player ranks and game modes, leveraging the flexibility of the Microsoft Minecraft Bedrock platform, and powered by the InPvP cloud architecture technology platform. Revenue is generated when transactions are facilitated between Microsoft and the end user, either via in-game currency or cash.
 
Total Platform sales revenues for three months ended March 31, 2021 increased $251,000, or 51%, compared to the first quarter of 2020.
 
In the first three months of 2021, product composition of sales of durables and cosmetics were 18%/82%, respectively. In the first three months of 2020, product composition of sales of durables and cosmetics were 27%/73%, respectively, as platform focus on server transactional revenues as a strategy became realized. Revenues generated via durables for the first three months of 2021 decreased by 4% compared to the first three months of 2020. Revenues generated via in-server digital goods for the first three months of 2021 increased by 67% compared to the first three months of 2020.
 
Cost of Sales
 
 
 
 Three Months Ended March 31,
 
 
 
 
 
 
 
 
 
2021
 
 
2020
 
 
$ Change
 
 
 % Change
 
Cost of sales
 $1,581,000 
 $1,034,000 
 $547,000 
  53%
 
Cost of sales for the three months ended March 31, 2021 increased $547,000, or 53% compared to the three months ended March 31, 2020, as compared to the 43% increase in related revenues for the same periods. The greater than proportionate increase in cost of sales was driven by a relative increase in creator costs in the first quarter of 2021.
 
Cost of sales fluctuate period to period based on the specific campaigns and revenue streams contributing to revenue each period and the related cost profile of Mobcrush’s advertising and in-game sales activities occurring each period.
  
Operating Expenses
 
 
 
 Three Months Ended March 31,
 
 
 
 
 
 
 
 
 
2021
 
 
2020
 
 
$ Change
 
 
 % Change
 
 Selling and marketing
 $455,000 
 $757,000 
 $(302,000)
  (40)%
 Technology platform & infrastructure
  793,000 
 $1,093,000 
  (300,000)
  (27)%
 General and administrative
  771,000 
 $704,000 
  67,000 
  10%
    Total revenue
 $2,019,000 
 $2,554,000 
 $(535,000)
  (21)%
 
Noncash stock-based compensation expense for the periods presented was included in general and administrative expenses.
 
 
-67-
 
 
Selling, Marketing and Advertising. The decrease in selling, marketing and advertising expense for the first three months of 2021 was primarily due to a reduction in personnel costs associated with the decrease in Mobcrush’s in-house direct sales force.
 
Technology Platform and Infrastructure. Technology platform and infrastructure costs include (i) allocated personnel costs, including salaries, taxes and benefits related to Mobcrush’s internal software developers and engineers, employed by Mobcrush, engaged in the operation, maintenance, management, administration, testing, development and enhancement of its proprietary gaming and technology platform, (ii) third-party contract software development and engineering resources engaged in developing and enhancing its proprietary gaming and technology platform, and (iii) technology platform related cloud services, broadband and other technology platform costs.  The decrease in technology platform and infrastructure costs for the first three months of 2021 primarily reflects a reduction in technology platform costs and third-party consultant services.
 
General and Administrative. General and administrative expense for the periods presented was comprised of the following:
 
 
 
 Three Months Ended March 31,
 
 
 
 
 
 
 
 
 
2021
 
 
2020
 
 
$ Change
 
 
 % Change
 
 Personnel costs
 $274,000 
 <