MGAM · Mobile Global Esports Inc.

Mobile Global Esports Inc. entered into a Securities Purchase Agreement dated May 1, 2026, issuing a 6% convertible redeemable promissory note with $130,000 face principal for $117,000 cash proceeds due to a $13,000 original issue discount. This financing provides immediate liquidity but introduces significant dilution risk as the note converts into common stock at a 35% discount to market price after six months, using the lowest trading price over the prior 15 trading days. The steep discount and lookback period incentivize conversion during price weakness, potentially pressuring the stock. Prepayment terms escalate from 110% in the first 30 days to 140% by days 150-180, limiting refinancing flexibility and increasing costs if repaid early. The transaction relies on Regulation D exemption, with the buyer as an accredited investor, and includes standard transfer restrictions requiring opinions of counsel. Events of default cover payment failures, breaches, insolvency, and judgments over $250,000, underscoring execution risks for a microcap esports firm. Investors should monitor for dilutive conversions and compliance with ownership limits.