Game Your Game (GYGY) secures $8M second closing in $40M preferred deal
Rhea-AI Filing Summary
Game Your Game, Inc. reported completing the second closing under its Securities Purchase Agreement with Streeterville Capital, LLC in connection with its Nasdaq direct listing. The company issued and sold 8,000 shares of Series A convertible preferred stock for an aggregate purchase price of $8,000,000, as part of Streeterville’s commitment to purchase up to $40,000,000 of this preferred stock.
Each Series A preferred share has a stated value of $1,111.11, is initially convertible into common stock at a $8.00 fixed price (with a $4.00 floor after certain events), and is subject to a 9.99% beneficial ownership limitation. The preferred stock carries a 10% annual preferred return, increasing to 15% after an Event of Default, payable in cash or additional preferred shares. The company must register the resale of conversion shares within 20 days of the direct listing, or pay Streeterville incremental 1% cash fees of the preferred share outstanding balance for registration delays, and the preferred is senior to the common stock with covenants restricting certain company actions without Required Holder consent.
Positive
- None.
Negative
- Senior preferred stock ahead of common was issued, with covenants restricting certain corporate actions without Required Holder consent, which can reduce flexibility and subordinate common stockholders’ rights.
- The Series A preferred carries a 10% annual return, rising to 15% after an Event of Default, plus variable-price conversion, creating potentially significant economic burden and dilution for common stockholders.
- If resale registration is delayed, the company must pay 1% cash fees of the preferred share outstanding balance for each missed deadline segment, adding contingent cash outflow risk.
Insights
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8-K Event Classification
3 items: 3.02, 3.03, 9.01
3 items
Item 3.02
Unregistered Sales of Equity Securities
Securities
The company sold equity securities in a private placement or other unregistered transaction.
Item 3.03
Material Modification to Rights of Security Holders
Securities
A change was made that materially affects the rights of existing shareholders (e.g., dividend rights, voting rights).
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Second closing proceeds: $8,000,000
Total commitment: $40,000,000
Shares issued: 8,000 shares
+5 more
8 metrics
Second closing proceeds
$8,000,000
Aggregate purchase price for 8,000 Series A preferred shares at second closing
Total commitment
$40,000,000
Maximum aggregate amount Streeterville committed to purchase in Series A preferred stock
Shares issued
8,000 shares
Series A convertible preferred stock issued at the second closing
Stated value per share
$1,111.11
Stated value of each Series A convertible preferred share
Initial conversion price
$8.00
Initial fixed price for converting Series A preferred into common stock
Conversion floor price
$4.00
Minimum conversion price after a Trigger Event or Event of Default
Preferred return rate
10% per annum
Annual preferred return on Series A preferred, increasing to 15% after Event of Default
Registration delay fee
1% of Preferred Share Outstanding Balance
Cash fee if resale registration not effective within 60 days of the direct listing, plus 1% each additional 30 days
Key Terms
Series A convertible preferred stock, Direct Listing, beneficial ownership limitation, Event of Default, +2 more
6 terms
Series A convertible preferred stock financial
"purchase up to $40,000,000 in shares of the Company’s Series A convertible preferred stock"
Series A convertible preferred stock is a class of shares sold in an early funding round that gives investors a mix of protection and upside: it pays a priority claim over common shares if the company is sold or closes, but can be converted into ordinary shares to share in future growth. Think of it like a hybrid between a safer stake and a ticket to ownership; it matters to investors because it affects who controls the company, how future gains are split, and how much their investment is protected from downside.
Direct Listing financial
"relating to the listing (the “Direct Listing”) of the shares of common stock"
A direct listing is a way for a company to become publicly available for trading without issuing new shares or raising additional money beforehand. Instead, existing shares are simply made available for purchase on the stock market, allowing current investors and employees to sell their holdings. This process can offer a simpler and faster way for a company to go public, giving investors quicker access to buy and sell shares.
beneficial ownership limitation financial
"Conversions are subject to a 9.99% beneficial ownership limitation."
A beneficial ownership limitation is a rule that caps the percentage of a company’s shares an investor can be treated as owning or controlling for voting, regulatory or tax purposes. It matters to investors because it can restrict how many shares a person or group can buy or vote, affect takeover chances, and influence share liquidity and value — like a speed limit that prevents any single driver from taking over the whole road.
Event of Default financial
"15% per annum following an Event of Default (each as defined in the Certificate of Designation)"
An event of default is a specific breach of a loan or bond agreement—such as missed payments or breaking agreed rules—that gives lenders the legal right to act, for example by demanding immediate repayment, seizing collateral, or accelerating other obligations. For investors, it’s a red flag because it can sharply reduce a company’s ability to operate or raise money, like a car lender repossessing a vehicle after missed payments, and often leads to falling share or bond prices.
Market Price financial
"it will be equal to the lesser of the Fixed Price and the Market Price"
Market price is the current amount buyers are willing to pay and sellers are willing to accept for a share or other security at a given moment, like the tag on an item in a busy shop that changes with demand. It matters to investors because it determines what you would receive when selling or what you must pay to buy now, reflecting supply, demand and recent news that affect perceived value.
Certificate of Designation regulatory
"upon the terms and subject to the limitations and conditions set forth in the Certificate of Designation"
A certificate of designation is a formal document that spells out the specific rights and rules attached to a particular class or series of stock, usually preferred shares. Think of it as a rulebook or menu that lists dividend terms, liquidation priority, conversion or redemption rights and any special voting protections; investors use it to judge how much income, control or downside protection those shares will provide compared with other securities.
FAQ
What financing did Game Your Game (GYGY) complete with Streeterville Capital?
Game Your Game completed a second closing with Streeterville Capital, issuing 8,000 Series A preferred shares for $8,000,000. This forms part of Streeterville’s total commitment of up to $40,000,000 in Series A convertible preferred stock.
What are the key economic terms of GYGY’s Series A convertible preferred stock?
Each Series A preferred share has a $1,111.11 stated value, a 10% annual preferred return (rising to 15% after an Event of Default), and converts initially at $8.00 per share, subject to a $4.00 floor and a 9.99% ownership cap.
What is the maximum investment Streeterville can make in GYGY’s Series A preferred?
Under the Securities Purchase Agreement, Streeterville committed to purchase up to $40,000,000 in Series A convertible preferred stock from time to time, subject to specified limitations and conditions, including stockholder approval for issuances above the Nasdaq exchange cap.
Does GYGY’s Series A preferred have limits on Streeterville’s ownership percentage?
Yes. Conversions of Series A preferred into common stock are subject to a 9.99% beneficial ownership limitation, preventing Streeterville from converting if it would own more than that percentage afterward.
AI-generated analysis. How Rhea-AI works. Not financial advice.
