GEGS.P GEGS Capital Corporation

Gegs Capital Corp. ("Gegs" or the "Corporation") (TSXV: GEGS.P) is pleased to announce that it has entered into an arrangement agreement dated May 29, 2019 (the "Agreement") with UMG Media Corp. ("UMG") pursuant to which the parties have agreed to complete a business combination (the "Proposed Transaction") by way of statutory plan of arrangement (the "Arrangement") that will have the effect of Gegs acquiring all of the issued and outstanding common shares of UMG (the "UMG Shares"). The Proposed Transaction is expected to constitute Gegs' Qualifying Transaction under Policy 2.4 – Capital Pool Companies ("Policy 2.4") of the TSX Venture Exchange (the "TSXV"), subject to TSXV approval. It is expected that the Resulting Issuer (as defined below) will be involved in the TSXV's "Technology" industry segment. A copy of the Agreement will be made available on Gegs' SEDAR profile at www.sedar.com. 

Gegs is also pleased to announce that it has received conditional approval from the TSXV for the Proposed Transaction and will file its filing statement dated May 30, 2019 (the "Filing Statement") with respect to the Proposed Transaction on its SEDAR profile at www.sedar.com. 

About UMG

UMG, a BC incorporated company, is a premier eSports company in North America, offering ‎gaming entertainment, live events and online play. UMG entered the eSports industry in 2016 with ‎the acquisition of UMG Events LLC which was founded in 2012 and is actively ‎involved in many aspects of the eSports industry. UMG is deeply ingrained in the gaming ‎community and very well-established within the competitive gaming sector with approximately 2.1 ‎million registered users and over 18 million matches played live and online through its platform. ‎ UMG is a diversified eSports company that has operations involved in live tournaments, online contests, casino eSports operations, creation and distribution of original content and eSports tournament operations through its proprietary tournament management app. Readers can learn more about UMG and its eSports offerings at www.umggaming.com.‎

Please refer to Gegs' press release dated March 13, 2019 for the selected annual financial and operating information with respect to UMG.

Private Placement

Concurrent with or immediately prior to the closing of the Proposed Transaction, UMG expects to complete a brokered private placement for aggregate gross proceeds of a minimum of $1,000,000 (the "Private Placement"). The Private Placement is expected to be comprised of 625,000 units of UMG ("Units") at a price of $1.60 per Unit, each Unit comprised of one common shares of UMG ("UMG Share") and one-half of one UMG Share purchase warrant ("UMG Warrant").  Each whole UMG Warrant will entitle the holder thereof to acquire one UMG Share at an exercise price of $2.00 for a period of 24 months from the closing date of the Private Placement. It is intended that the proceeds of the Private Placement will be used to fund marketing events and related personnel, with the balance expected to be used for general and administrative expenses.

Beacon Securities Limited (the "Agent") has been engaged to act as lead agent for the Private Placement.‎  A commission of 8.0% of the aggregate gross proceeds under the Private Placement is payable to the Agent by UMG. In addition, UMG will issue broker warrants to the Agent in an amount equal to 8.0% of the UMG Units sold in the Private Placement, with each broker warrant entitling the Agent to acquire one UMG Share at an exercise price of $2.00 for a period of 24 months from the closing date of the Private Placement.

The Proposed Transaction

Gegs and UMG have entered into the Agreement pursuant to which Gegs (which will be the "Resulting Issuer", as defined under the policies of the TSXV) will issue common shares of Gegs ("Gegs Shares") to the former UMG shareholders (including the Private Placement subscribers), on the basis of 9.0801 Gegs Shares for each common share of UMG ("UMG Share") pursuant to the Arrangement. Following the completion of the Arrangement, Gegs will consolidate the issued and outstanding Gegs Shares (including the Gegs Shares issued to former holders of UMG Shares) on the basis of 1 post-consolidation share for every 4 pre-consolidation shares (the "Consolidation").  Upon completion of the Proposed Transaction, UMG will be a wholly-owned subsidiary of the Resulting Issuer.

In accordance with the terms of the certificates representing the outstanding UMG stock options ("UMG Options") and UMG Warrants (including the UMG Warrants issued to the Private Placement subscribers), following the Arrangement, all outstanding UMG Options and UMG Warrants to purchase UMG Shares will be exercisable for that number of common shares of the Resulting Issuer ("Resulting Issuer Shares") that the holder would have been entitled to receive if the holder was a holder of the UMG Shares issuable on such exercise immediately prior to the effective time of the Arrangement.

As part of the Proposed Transaction, Gegs intends to change its name to "UMG Media Ltd.", effective as of the closing of the Proposed Transaction and to adopt a new stock option plan for the Resulting Issuer following closing of the Proposed Transaction. The shareholders of Gegs approved the Consolidation, the name change and the new stock option plan at the Gegs' shareholder meeting held on May 1, 2019.

The purchase price for the UMG Shares will be satisfied by the issuance of approximately 151,206,011 pre-Consolidation Gegs Shares (exclusive of the Private Placement) at a deemed price of $0.09 per Gegs Share, resulting in an aggregate purchase price of approximately $13,608,540.  Following the completion of the Proposed Transaction, the Consolidation and a Private Placement of $1,000,000, it is anticipated that, immediately thereafter, the Resulting Issuer will have ‎‎‎‎‎42,868,269‎‎ Resulting Issuer Shares issued and outstanding with: (a) former UMG shareholders (not including subscribers under the Private Placement) holding an aggregate of ‎‎37,801,503‎ ‎Resulting Issuer Shares, representing approximately 88.2% of the outstanding Resulting Issuer Shares, (b) former Gegs shareholders holding an aggregate of ‎3,648,000 ‎Resulting Issuer Shares, representing approximately 8.5% of the outstanding Resulting Issuer Shares, and (c) subscribers under the Private Placement holding an aggregate of ‎‎1,418,766 ‎Resulting Issuer Shares, representing approximately 3.3% of the outstanding Resulting Issuer Shares.

Following the completion of the Proposed Transaction pursuant to the ‎terms of the Agreement, the board of directors and ‎management of Gegs will resign and the following individuals will ‎hold the following positions with the Resulting Issuer:‎

David M. Antony – Chief Executive Officer and DirectorMartin Brown – Chief Operating Officer and DirectorRaymond Antony – DirectorHector Rodriguez – DirectorW. Scott McGregor – DirectorCharidy Lazorko – Chief Financial OfficerTrevor Wong-Chor – Corporate Secretary

Completion of the Proposed Transaction is subject to a number of conditions including, but not limited to, third-party and board approvals and consents, satisfaction or waiver of all conditions set forth in the Agreement (including completion of the Private Placement and UMG shareholder and court approval of the Arrangement) and TSXV acceptance of the Proposed Transaction.  It is anticipated that the closing of the Proposed Transaction will occur on or before July 5, 2019.

For further details with respect to the Proposed Transaction, please see the Filing Statement which is ‎available under Gegs' profile on SEDAR at www.sedar.com.‎

Arm's Length Transaction, Sponsorship & Regulatory Matters

The Proposed Transaction will take place at arm's length and will not be a "Non-Arm's Length Qualifying Transaction" for ‎purposes of the policies of the TSXV.  As a result, in accordance with ‎applicable polices of the TSXV, Gegs will not be obtaining approval of the Gegs shareholders for the Proposed Transaction. ‎

Gegs intends to apply to the TSXV for an exemption from sponsorship requirements.  There is no assurance that a ‎sponsorship exemption will be granted by the TSXV.  Should this sponsorship exemption application be denied, ‎sponsorship will be required.  ‎

Trading of the Gegs Shares on the TSXV is currently halted and will remain halted pending closing of the Proposed Transaction.

For further information, please contact:‎

UMG Media Corp. David Antony, CEO dantony@umggaming.com

Gegs Capital Corp. W. Scott McGregor, CEOwscottmcgregor@shaw.ca

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and, if applicable pursuant to the Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed 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 Proposed Transaction may not be accurate or complete and should not be relied upon.  Trading in the securities of a capital pool company 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 press release.

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 press release.

Forward-Looking Information

When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. Although the Corporation believes, in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in these forward-looking statements and information in this press release are reasonable, undue reliance should not be placed on them because the Corporation can give no assurance that they will prove to be correct. The forward-looking statements and information in this press release include information relating to the business plans of Gegs and UMG, the Proposed Transaction (including TSXV approval, satisfaction of the conditions set forth in the Agreement, and the closing of the Proposed Transaction), the Private Placement and the officers and directors of the Resulting Issuer upon completion of the Proposed Transaction. Such statements and information reflect the current view of Gegs and/or UMG, respectively. Risks and uncertainties may cause actual results to differ materially from those contemplated in these forward-looking statements and information.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Gegs' actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: (i) there is no assurance that Gegs and UMG will obtain all requisite approvals for the Proposed Transaction, including the approval of the TSXV for the Proposed Transaction (which may be conditional upon amendments to the terms of the Proposed Transaction); there is no certainty that the Private Placement will be completed or that it will be completed on the terms contemplated herein; (ii) following completion of the Proposed Transaction, the Resulting Issuer may require additional financing from time to time in order to continue its operations and financing may not be available when needed or on terms and conditions acceptable to the Resulting Issuer; (iii) new laws or regulations could adversely affect the Resulting Issuer's business and results of operations; and (iv) the stock markets have experienced volatility that often has been unrelated to the performance of companies. These fluctuations may adversely affect the price of the Resulting Issuer's securities, regardless of its operating performance. There are a number of important factors that could cause Gegs' and UMG's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others: currency fluctuations; limited business history of Gegs; disruptions or changes in the credit or security markets; results of operations, activities and development of projects; project cost overruns or unanticipated costs and expenses; and general market and industry conditions. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Corporation, UMG, their respective securities, or their respective financial or operating results (as applicable).

Gegs cautions that the foregoing list of material factors is not exhaustive. When relying on Gegs' forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Gegs has assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. The forward-looking information contained in this press release represents the expectations of Gegs as of the date of this press release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Gegs does not undertake to update this information at any particular time except as required in accordance with applicable laws.

This press release is not an offer of the securities for sale in the United States.  The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.