TGS Esports signs non-binding letter of intent for reverse takeover and agreement for $1,000,000 loan



VANCOUVER, BC, February 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 independent entertainment, travel and media company (the “MediaCo“) which would result in a reverse takeover of the Company by the shareholders of MediaCo. The definitive structure and terms of the Transaction have not yet been finalized, and remain subject to conditions whose due diligence of the parties and the parties’ receipt of , corporate and securities law.

The resulting issuer of the transaction is expected to remain a diversified media company with esports and gaming, travel and media divisions, and continue the current businesses of TGS and media subsidiaries. MediaCo is a digital commerce ecosystem company that brings together digital advertisers, consumers, video gamers and travelers and provides in-game and in-video advertising and monetization opportunities. The media subsidiaries represent the travel division and the interactive television and media divisions of MediaCo and should have synergies with the activities of TGS. The Media Subsidiary Transaction is intended to provide the Company with the opportunity to in-house a travel platform for its live events and have travel integration into Pepper’s social gaming platform, and to provide access to more end users for TGS esports content, tournaments and events through an in-house media division with significant reach. Additional information regarding the activity and financial situation of the Media Subsidiaries will be provided as it becomes available.

The Company also announces that two arm’s length lenders have agreed to advance a total of $1,000,000 to the Company in the form of an unsecured loan (the “To lend“) payable in installments at the request of the Company. The Loan will be unsecured, non-interest bearing, non-convertible and will mature on the date which is six months after the date of issue of each installment, according to The proceeds of the loan are expected to be used by the Company to fund its working capital commitments, including equipment purchases, salaries and the payment of outstanding obligations, and to fund Company expenses related to valuation and completion of the transaction.

As part of the Transaction, the Company is seeking to complete a private placement (the “Simultaneous funding“) to raise a minimum gross proceeds of $3,000,000. The terms of concurrent funding have not been finalized. Proceeds from the concurrent financing are expected to be used to fund the issuer’s initial working capital requirements resulting from the transaction with respect to its operations and business plans, and to fund working capital requirements for day-to-day activities of the Company and the Media Subsidiaries.

Completion of the Transaction (the “Closing“) and the concurrent financing remain subject to a number of conditions, including satisfactory due diligence, receipt of notices of structuring by the parties, approval by each party’s board of directors, completion of a binding agreement, the approval of the TSX Venture Exchange (the “To exchange“) and other terms customary for transactions of this nature. Further updates and details of the Transaction will be provided when the Company and MediaCo enter into a binding agreement for the Transaction. Trading in the shares of the Company is expected to remain suspended until the completion of the Transaction.

At Closing, subject to Exchange Acceptance and Exchange Limits on Finder’s Fees, the Company is expected to pay a finder’s fee to two arm’s length parties, which fee will 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 relating to the Transaction. Subject to acceptance by the Exchange, finder’s fees will be paid by issuing common shares of the Company at a price per share deemed equal to the issue price of the securities issued under the concurrent financing, and such shares will be subject to a hold period expiring four months and one day after the date of issue. Finders are arm’s length parties to the Company, MediaCo and Media Affiliates.

Completion of the transaction is subject to a number of conditions, including, but not limited to, stock exchange acceptance and, if applicable, disinterested shareholder approval. If so, the transaction cannot be completed until the required shareholder approval has been obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, unless otherwise specified in the management information circular or filing statement to be prepared in connection with the transaction, any information published or received regarding the transaction may not be accurate or complete and should not not be invoked. Trading in the securities of TGS Esports Inc. should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed on the merits of the proposed transaction and has neither approved nor disapproved of the contents of this press release.

None of the securities to be issued under the Transaction or the Concurrent Financing will be or have been registered under United States Securities Act of 1933as amended (the “1933 Act“), and none may be offered or sold in United States lack of registration or an applicable exemption from the registration requirements of the 1933 Act. This press release is issued pursuant to Rule 135c of the 1933 Act and does not constitute an offer to sell or a solicitation of an offer of purchase, and there will be no 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 streaming, influencer campaigns and school integration. Tournaments are hosted on TGS’ proprietary social gaming platform, Pepper, allowing communities to interact and engage in a single space. The combination of TGS’s esports event expertise and next-gen software creates an unparalleled esports experience that enables brands to reach their desired gaming demographics.

On behalf of the Board of Directors
Spiro KhouriCEO
TGS Esports Inc.

Disclaimer for forward-looking information

This press release contains “forward-looking statements”. Statements in this press release that are not purely historical are forward-looking statements and include all statements regarding beliefs, plans, expectations or intentions regarding the future. These forward-looking statements include, among other things, statements regarding the transaction, the concurrent lending and financing and the businesses 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. Readers are 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 anticipated due to numerous known and unknown risks, uncertainties and other factors, many of which are beyond the Company’s control, including the the fact that the loan may not be advanced by the lenders on the agreed terms or at all, that a binding agreement cannot be entered into in respect of the Transaction, that even if a binding agreement is entered into that the Transaction may not may not be consummated, that the Competing Financing may not be completed or on terms favorable to the Company, and that the Company may need to spend funds advanced under the Loan and/or Competing Financing on items not disclosed to present for valid business reasons, and that the Company may not identify or complete on strategic transactions, or that if they carry out these transactions, these transactions will be beneficial to the business of the Company. Readers are cautioned not to place undue reliance on forward-looking statements. Such information, although considered reasonable by management when prepared, may prove to be incorrect and actual results may differ materially from those anticipated. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The risks and uncertainties relating to the Company’s business are more fully discussed in the Company’s disclosure documents which can be obtained at The forward-looking statements contained in this press release are made as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement or to update the reason why actual results could differ from these statements, except to the extent required by law.

Neither the 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

For more information: Spiro Khouri, TGS, [email protected]604 562-0606


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