VANCOUVER, BC, Nov. 2, 2020 /CNW/ - TGS Esports Inc.
("TGS" or the "Company") (TSXV: TGS) is pleased
to announce that, further to its news release of September 1, 2020 it has entered into an
amalgamation agreement (the "Amalgamation Agreement") with
Pepper Esports Inc. ("Pepper"), a next generation
competitive esports platform, and 1271801
B.C. Ltd. ("Subco"), a wholly-owned subsidiary of the
Company, pursuant to which the Company will acquire all of the
issued and outstanding shares of Pepper by way of a
"three-cornered" amalgamation (the "Acquisition"). As
part of the Acquisition, the Pepper executive team, Guy
Halford-Thompson, Jackson Warren and Ben Hoffman,
who have a decade of combined experience in growing
early-stage companies in the public markets, will join the TGS
executive team.
The Pepper platform offers an advanced suite of tools for league
operators, tournament operators, and venue owners to effortlessly
set up and manage esports communities and run world-class events.
These include key innovations, such as automatic game scoring
technology, that uses Pepper's patent pending AI engine and saves
event organizers hundreds of hours of setup time, live leaderboards
which vastly improve player and spectator experiences, a universal
ranking system that ranks players across all competitive games, and
more.
Transaction Highlights
- Develop New Revenue Streams - the Acquisition is
expected to provide TGS with diverse new online revenue streams
that include data monetization, payment processing and recurring
subscription revenue.
- Expanded Consumer and Business Base - the combined
company will have the ability to acquire users from all over the
globe through tournaments of any kind.
- Highly Accomplished and Experienced Team - the
completion of the Acquisition will add a team with over a decade of
combined experience in growing early-stage companies in the public
markets.
- Technology Platform - The Acquisition adds a technology
platform to TGS, which is scalable, global, and with defensible
IP.
"The online gaming market has exploded in 2020, with recent
stats showing an estimated 2.7 billion gamers across the globe
(https://www.statista.com/statistics/293304/number-video-gamers/).
The combination of TGS' event expertise and Pepper's leading
platform allows us to reach all gamers, regardless of location."
said Spiro Khouri, CEO of TGS. "With
this acquisition, we are in a unique position to offer an all
encompassing esports experience to any tournament organizer, gamer,
or company looking to market to this growing demographic."
"Working closely with the TGS team, we are already seeing
accelerated interest in the Pepper platform. Being able to offer a
full suite of services from integrated streaming to full event
management sets us apart from other platforms." said Guy Halford-Thompson, CEO of Pepper. "Now the
definitive agreement is in place we can start to execute our plans
to scale and grow our platform."
Summary of Acquisition
Pursuant to the Amalgamation Agreement, on closing of the
Acquisition ("Closing"), the Company will issue to each
holder (each, a "Pepper Shareholder") of common shares of
Pepper (each a "Pepper Share") three (3) common shares of
TGS (each a "TGS Share", and such TGS Shares issued as
consideration for the Acquisition, the "Consideration
Shares") for each one (1) Pepper Share (the "Exchange
Ratio") held by such Pepper Shareholder at a deemed price
of $0.14 per Consideration Share for aggregate deemed
consideration of approximately $6,073,993. The Consideration
Shares will be subject to a contractual lock-up, with 20% of the
Consideration Shares being released on Closing and a further 20%
being released every six months thereafter. The Consideration
Shares may be subject to an additional escrow period as required by
the TSX Venture Exchange (the "TSXV").
Each outstanding security of Pepper that is convertible or
exchangeable for Pepper Shares will be exchanged for corresponding
securities that are convertible or exchangeable for TGS Shares on
substantially the same economic conditions.
The Acquisition is subject certain conditions including: (i) the
receipt of all necessary approvals from the respective shareholders
and boards of directors of each of Pepper, the Company and Subco,
(ii) the approval of the TSXV) (iii) Pepper shall not have received
notices of dissent to the Acquisition from Shareholders holdings
more than 5% of the issued and outstanding Pepper Shares, (iv) the
employment agreements of Guy
Halford-Thompson, Dallas Benjamin
Hoffman and Jackson Warren
shall have been assumed by the Company (v) there having been no
material adverse effect occurring with respect to Pepper or the
Company; (vi) Pepper shall have received the consent from the
holders of options or warrants to purchase Pepper Shares to the
exchange of such securities for equivalent securities to purchase
TGS Shares, and (vii) other closing conditions customary for
transactions of this nature.
The Acquisition is not a Non Arm's Length Party transaction. A
finder's fee is expected to be payable in connection with the
Acquisition, subject to the approval of the TSXV, and further
details will be provided once available.
Directors and Officers
On Closing, it is expected that Guy
Halford-Thompson will be appointed as President and a
director of the Company, and Dallas
Benjamin Hoffman and Jackson
Warren will be appointed as Chief Technology Officer and
Chief Product Officer, respectively.
Guy and Jackson have worked together since 2016,
during which they have had five successful exits, three via
acquisition (QuickBitcoin, Bitcoiniacs and Xapcash) and two via
public listings (TSXV:BTL, TSXV:DASH). Guy is also a founder and
board member of Eli Technologies and Minehub, both of which are due
to list in late 2020.
Over the last 4 years, Guy and Jackson have
raised over $35m in funding and
delivered $500m in investor returns.
BTL was founded by Guy, Jackson and Guy's brother in 2015 and was
joined by Ben in early 2017. It delivered early investors
significant returns by the time Guy and Jackson exited the company
in 2018.
Guy, Jackson and Ben have a strong track record
of delivering investor value, and believe they have discovered a
truly unique and rare opportunity with Pepper.
Haywood Securities Inc. has acted as a financial advisor to
Pepper in connection with the Acquisition. The Company and Pepper
deal at arm's length with each other, and the Acquisition is not
expected to result in a change of control of the Company. A
finder's fee in an amount to be determined at a later time may be
payable in connection with the Acquisition, subject to compliance
with applicable securities laws and the approval of the TSXV.
About Pepper Esports Inc.
Pepper is a leading esports platform provider that offers an
advanced platform to create and manage communities of players,
organizers, spectators and sponsors, all in one place. By
working closely with event organizers and live venue operators over
the last two years, Pepper has developed a suite of advanced tools
to manage esports communities, run world class esports and operate
physical gaming venues.
Pepper's key technologies include its patent pending AI engine,
which automatically captures game data to create a tournament
experience that extends beyond live gameplay and includes highly
demanded features such as global leaderboards, player profiles and
statistics, new tournament discovery and digital wallets.
About TGS Esports Inc.
TGS Esports Inc. is an esports organization focused on providing
an unparalleled esports experience through its expertise in online
and in-person event management, broadcast production, and Pepper
Esports tournament software. TGS is the owner of Canada's first dedicated esports arena, The
Gaming Stadium, located in Richmond,
British Columbia, which opened in June 2019. The Gaming Stadium hosts regular
online tournaments as well as provides high quality broadcast
production for any event. For more information, visit
www.thegamingstadium.com.
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.
On behalf of the Board of Directors
"Spiro Khouri"
Spiro Khouri, CEO
TGS Esports Inc.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking
statements, which reflect the expectations of management regarding
the Company. Forward-looking statements consist of statements that
are not purely historical, including any statements regarding
beliefs, plans, expectations or intentions regarding the future,
including with respect to: the completion of the Acquisition and
the acceptance of the Acquisition and terms thereof by the TSXV,
the expected directors and officers of the Company following
Closing, the expected benefits of the Acquisition to the Company.
Such statements are subject to risks and uncertainties that may
cause actual results, performance or developments to differ
materially from those contained in the statements, including risks
related to factors beyond the control of the Company. The risks
include the following: the unknown magnitude and duration of the
effects of the COVID-19 pandemic and other risks that are customary
to transactions of this nature. No assurance can be given that any
of the events anticipated by the forward-looking statements will
occur or, if they do occur, what benefits the Company will obtain
from them.
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.
SOURCE TGS Esports Inc