Enthusiast Gaming Holdings Inc. (“
Enthusiast
Gaming” or the
“Company”) (NASDAQ: EGLX)
(TSX: EGLX), a media and content platform for video game and
esports fans to connect and engage, is pleased to announce that it
has closed its previously announced USD$46 million public offering
(the “
Offering”) issuing 8,000,000 common shares
in the capital of the Company (“
Common Shares”) at
a price of USD$5.75 per Common Share.
The Offering was underwritten by a syndicate of
underwriters co-led by RBC Capital Markets and Canaccord Genuity
(the “Lead Underwriters”) as joint lead
bookrunning managers, with B. Riley Securities acting as joint
bookrunner, and including Paradigm Capital Inc., Scotia Capital
Inc., Alliance Global Partners, Colliers Securities LLC and Haywood
Securities Inc., as co-managers (together with the Lead
Underwriters, the “Underwriters”).
In addition, Enthusiast Gaming and Blue Ant
Media Inc. (“Blue Ant”), one of the Company’s
shareholders, have also granted the Underwriters an option (the
“Over-Allotment Option”), which remains
exercisable until July 15, 2021, to purchase an additional
1,200,000 Common Shares (the “Option Shares”)
representing in the aggregate up to 15% of the number of Common
Shares to be sold pursuant to the Offering, solely to cover the
Underwriters' over-allocation position, if any, and for market
stabilization purposes. The Over-Allotment Option will be
exercisable by the Underwriters for a period of 30 days following
the closing of the Offering. In the event the Over-Allotment Option
is exercised, the Company, the Underwriters and Blue Ant have
agreed that, at the option of Blue Ant (the “Tag-Along
Option”), up to 50% of the Option Shares may be comprised
of Common Shares to be sold by Blue Ant, with the remaining Option
Shares to be comprised of Common Shares to be issued and sold by
the Company (“Treasury Shares”). If the Tag-Along
Option is not exercised, the entire Over-Allotment Option will be
satisfied by the Company through the issuance of Treasury Shares.
Enthusiast Gaming will not receive any of the proceeds of any sale
of Common Shares by Blue Ant. Blue Ant will not otherwise
participate in the Offering.
The net proceeds from the Offering are expected
to be used by the Company primarily to strengthen its financial
position, inclusive of future acquisitions, working capital,
repayment of indebtedness and other general corporate purposes, as
more particularly described in the final prospectus supplement
dated June 10, 2021 (the “Prospectus Supplement”),
to the Company’s Canadian base shelf prospectus dated May 6, 2021
(“Shelf Prospectus”) filed with applicable
securities regulatory authorities, as well as in the United States
with the Securities and Exchange Commission as part of the
Company’s U.S. registration statement on Form F-10 (the
“Registration Statement”). In connection with the
Offering, the principal amount of the vendor-take-back loan
(“VTB Note”) owing to Blue Ant that was incurred
in August 2020 by Enthusiast Gaming in connection with the
acquisition of Omnia Media Inc., and due on its maturity in August
2023, will be repaid immediately together with accrued but unpaid
interest to the repayment date. A copy of the Prospectus Supplement
and the Shelf Prospectus are available on SEDAR at www.sedar.com
and a copy of the Prospectus Supplement and the Registration
Statement are available on EDGAR at www.sec.gov.
Advisors
Enthusiast Gaming is represented by Norton Rose
Fulbright Canada LLP in Canada and Norton Rose Fulbright US LLP in
the United States. The Underwriters are represented by Stikeman
Elliott LLP in Canada and Paul, Weiss, Rifkind, Wharton &
Garrison LLP in the United States.
About Enthusiast Gaming
Enthusiast Gaming is building the largest media
and content platform for video game and esports fans to connect and
engage worldwide. Combining the elements of its four core pillars;
Media, Talent, Esports and Experiences, Enthusiast Gaming provides
a unique opportunity and integrated approach to reach and connect
with its coveted GenZ and Millennial audience. Through its
proprietary mix of digital media and entertainment assets,
Enthusiast Gaming has built a vast network of like-minded
communities to deliver the ultimate fan experience.
Neither the TSX Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Exchange) accepts responsibility for the adequacy or accuracy
of this release.
This news release contains certain statements
that may constitute forward-looking information under applicable
securities laws. All statements, other than those of historical
fact, which address activities, events, outcomes, results,
developments, performance or achievements that Enthusiast Gaming
anticipates or expects may or will occur in the future (in whole or
in part) should be considered forward-looking information. Often,
but not always, forward-looking information can be identified by
the use of words such as "plans", "expects", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", or "believes" or variations (including negative
variations) of such words and phrases, or statements formed in the
future tense or indicating that certain actions, events or results
"may", "could", "would", "might" or "will" (or other variations of
the forgoing) be taken, occur, be achieved, or come to pass.
Forward-looking statements are based on
assumptions and analyses made by the Company in light of its
experience and its perception of historical trends, current
conditions and expected future developments, including, but not
limited to, expectations and assumptions concerning: interest and
foreign exchange rates; capital efficiencies, cost saving and
synergies; growth and growth rates; the success in the esports and
media industry; and the Company’s growth plan. While Enthusiast
Gaming considers these assumptions to be reasonable, based on
information currently available, they may prove to be incorrect.
Readers are cautioned not to place undue reliance on
forward-looking statements. In addition, forward-looking statements
necessarily involve known and unknown risks, including, without
limitation, risks associated with general economic conditions; the
potential offering of any securities by the Company; uncertainty
with respect to the completion of any future offering; the ability
to obtain applicable regulatory approvals for any contemplated
offerings; the ability of the Company to negotiate and complete
future funding transactions; adverse industry events; and future
legislative, tax and regulatory developments. Readers are cautioned
that the foregoing list is not exhaustive. For more information on
the risk, uncertainties and assumptions that could cause
anticipated opportunities and actual results to differ materially,
please refer to the public filings of Enthusiast Gaming which are
available on SEDAR at www.sedar.com. Readers are further cautioned
not to place undue reliance on forward-looking statements as there
can be no assurance that the plans, intentions or expectations upon
which they are placed will occur. 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
and reflect our expectations as of the date hereof, and thus are
subject to change thereafter. Enthusiast Gaming disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by applicable law.
MI 61-101 Disclosure
Blue Ant is an insider of the Company.
Accordingly, the repayment of the VTB Note is considered a “related
party transaction” for purposes of Multilateral Instrument 61- 101
– Protection of Minority Security Holders in Special Transactions
(“MI 61-101”). Pursuant to MI 61-101, the Company
will file a material change report providing disclosure in relation
to the “related party transaction” on SEDAR under the Company’s
issuer profile at www.sedar.com. The Company did not file the
material change report more than 21 days before the expected
repayment date of the VTB Note as the details of such repayment
were not settled until shortly prior to the closing of the
Offering, and the Company wished to settle the terms thereof and
close the Offering on an expedited basis for business reasons.
Contacts
Enthusiast Gaming Investor Relations: Eric Bernofsky, Chief
Corporate Officer investor@enthusiastgaming.com
Media Relations: Carmela Antolino, Provident Communications
carmela@providentcomms.com 647-287-2286
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