/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION
TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
VANCOUVER, BC, Feb. 18, 2022 /CNW/ - TGS Esports Inc.
("TGS" or the "Company") (TSXV: TGS) is pleased
to announce that it has entered into a non-binding letter of intent
dated February 16, 2022 with respect
to a potential business combination (the "Transaction") with
certain subsidiaries (the "Media Subsidiaries") of an
arm's length entertainment, travel and media company
(the "MediaCo") which would result in a reverse
takeover of the Company by the shareholders of MediaCo. The
final structure and terms of the Transaction have not yet been
finalized, and remain subject to conditions including due diligence
of the parties and receipt by the parties of tax, corporate, and
securities law advice.
The issuer resulting from the Transaction is expected to remain
a diversified media company with esports and gaming, travel and
media divisions, and to carry on the current business of TGS and
the Media Subsidiaries. MediaCo is a digital business
ecosystem company that brings digital advertisers, consumers, video
gamers and travelers together and provides avenues for in-game and
in-video advertising and monetization. The Media Subsidiaries
represent the travel division and interactive TV and media
divisions of MediaCo and are expected to have synergies with the
business of TGS. The Transaction with the Media Subsidiaries
is intended to provide the Company with an opportunity to
internalize a travel platform for its live events and have travel
integration in Pepper's social gaming-platform, and to provide
access to more end users for TGS' esports content, tournaments and
events through an internalized media division with significant
reach. Additional information regarding the business and
financial condition of the Media Subsidiaries will be provided when
available.
The Company also announces that two arms' length lenders have
agreed to advance an aggregate of $1,000,000 to the Company as an unsecured loan
(the "Loan") payable in tranches at the request of the
Company. The Loan will be unsecured, will not bear interest,
is not convertible and will mature on the date that is six months
from the date of issuance of each tranche, as applicable. The
proceeds of the Loan are expected to be used by the Company to fund
its working capital commitments, including equipment purchases,
salaries, and payment of outstanding obligations, and to fund the
Company's expenses in connection with the evaluation and completion
of the Transaction.
In connection with the Transaction, the Company seeks to
complete a private placement (the "Concurrent
Financing") to raise minimum gross proceeds of $3,000,000. The terms of the Concurrent
Financing have not been finalized. The proceeds from the
Concurrent Financing are expected to be used to fund the initial
working capital requirements of the issuer resulting from the
Transaction with respect to its operations and business plans, and
to fund the working capital requirements for the current business
of the Company and the Media Subsidiaries.
The completion of the Transaction (the "Closing") and
Concurrent Financing remain subject to a number of conditions
including satisfactory due diligence, the receipt of structuring
advice by the parties, approval of the board of directors of each
of the parties, entry into a binding agreement, approval of the TSX
Venture Exchange (the "Exchange") and other conditions
customary to transactions of this nature. Further updates and
particulars of the Transaction will be provided upon the Company
and MediaCo entering into a binding agreement for the
Transaction. Trading in the Company's stock is expected to
remain halted until completion of the Transaction.
On Closing, subject to Exchange acceptance and the Exchange
limitations on finder's fees, the Company is expected to pay a
finder's fee to two arms' length parties which fees shall be equal
to 3% and 2.5%, respectively, of the purchase price paid by the
Company for the Media Subsidiaries pursuant to a binding agreement
in respect of the Transaction. Subject to Exchange acceptance,
the finder's fees will be paid by the issuance of common shares of
the Company at a deemed price per share equal to the issue price of
securities issued pursuant to the Concurrent Financing, and such
shares will be subject to a hold period expiring four months and
one day after the date of issuance. The finders are arm's length
parties with respect to the Company, MediaCo and the Media
Subsidiaries.
Completion of the transaction is subject to a number of
conditions, including but not limited to, Exchange acceptance and
if applicable, disinterested shareholder approval. Where
applicable, the transaction cannot close until the required
shareholder approval is obtained. There can be no assurance that
the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the
management information circular or filing statement to be prepared
in connection with the transaction, any information released or
received with respect to the transaction may not be accurate or
complete and should not be relied upon. Trading in the securities
of TGS Esports Inc. should be considered highly
speculative.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed transaction and has neither approved nor
disapproved the contents of this news release.
None of the securities to be issued in connection with the
Transaction or the Concurrent Financing will be or have been
registered under the United States
Securities Act of 1933, as amended (the "1933 Act"),
and none may be offered or sold in the
United States absent registration or an applicable exemption
from the registration requirements of the 1933 Act. This press
release is being issued pursuant to Rule 135c of the 1933 Act and
shall not constitute an offer to sell or a solicitation of an offer
to buy, nor shall there be any sale of the securities, in any state
where such offer, solicitation or sale would be unlawful.
About TGS Esports Inc.
TGS Esports builds gaming strategies for brands looking to
connect with any gaming community. This includes planning and
executing live and digital tournaments, live broadcasting,
influencer campaigns, and scholastic integration. Tournaments are
held on TGS' proprietary social gaming platform Pepper allowing
communities to interact and engage in one space. The combination of
TGS esports event expertise and next generation software creates an
unparalleled esports experience that allows brands to reach their
desired gaming demographic.
On behalf of the Board of Directors
Spiro Khouri, CEO
TGS Esports Inc.
Disclaimer for Forward-Looking Information
This news release contains "forward-looking statements."
Statements in this news release that are not purely historical are
forward-looking statements and include any statements regarding
beliefs, plans, expectations or intentions regarding the future.
Such forward-looking statements include, among other things
statements regarding the Transaction, Loan and Concurrent Financing
and business of the issuer resulting from the Transaction. There
can be no assurance that such statements will prove to be accurate
and actual results and future events could differ materially from
those anticipated in such statements. The reader is cautioned that
assumptions used in the preparation of any forward-looking
statements may prove to be incorrect. Events or circumstances may
cause actual results to differ materially from those predicted, as
a result of numerous known and unknown risks, uncertainties, and
other factors, many of which are beyond the control of the Company,
including that the Loan may not be advanced by the lenders on the
terms agreed upon or at all, that a binding agreement may not be
entered into with respect to the Transaction, that even if a
binding agreement is entered into that the Transaction may not be
completed, that the Concurrent Financing may not be completed at
all or on terms favorable to the Company, and that the Company may
need to spend the funds advanced pursuant to the Loan and/or
Concurrent Financing on items not disclosed herein for sound
business reasons, and that the Company may not identify or complete
on any strategic transactions, or that if they do complete such
transactions that those transactions will be beneficial for the
business of the Company. The reader is cautioned not to place
undue reliance on any forward-looking statement. Such information,
although considered reasonable by management at the time of
preparation, may prove to be incorrect and actual results may
differ materially from those anticipated. Forward-looking
statements contained in this news release are expressly qualified
by this cautionary statement. Risks and uncertainties about
the Company's business are more fully discussed in the Company's
disclosure materials which can be obtained from www.sedar.com. The
forward-looking statements contained in this news release are made
as of the date of this news release and the Company assumes no
obligation to update any forward-looking statement or to update the
reasons why actual results could differ from such statements except
to the extent required by law.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE TGS Esports Inc