GameSquare Esports Announces C$5M Bought Deal Private Placement Led by Canaccord Genuity

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TORONTO, Feb. 8, 2021 /CNW/ - GameSquare Esports Inc. (CSE: GSQ) (FRA: 29Q1) ("GameSquare", "GameSquare Esports" or the "Company"), an international esports company, is pleased to announce that that it has entered into an agreement with Canaccord Genuity Corp. ("Canaccord"), on behalf of a syndicate of underwriters (collectively the "Underwriters"), pursuant to which the Underwriters have agreed to purchase on a bought deal private placement basis, 11,905,000 subscription receipts of the Company ("Subscription Receipts") at a price of C$0.42 per Subscription Receipt (the "Issue Price"), for aggregate gross proceeds of C$5,000,100 (the "Offering").

The net proceeds of the Offering shall be held in escrow and will only be released to the Company on the date (the "Escrow Release Date") on which certain escrow release conditions relating to the Company's proposed acquisition (the "Proposed Acquisition") of Reciprocity Corp. ("Reciprocity") have been satisfied, including (i) written confirmation from each of the Company and Reciprocity that all conditions to the completion of the Proposed Acquisition have been satisfied or waived; (ii) the receipt of all regulatory, shareholder and third-party approvals, if any, required in connection with the Proposed Acquisition; and (iii) the Company not being in breach or default of any of its covenants or obligations under the agreements relating to the Offering and having satisfied all conditions set out in the underwriting agreement to be entered into with the Underwriters in connection with the Offering.

On the Escrow Release Date, each Subscription Receipt shall be automatically exercised, without payment of additional consideration on the part of the holder, into one unit of the Company (a "Unit"). If the Escrow Release Date has not occurred by the date that is 90 days following the closing date of the Offering, subject to that date being extended by mutual agreement between the Company and Canaccord, then the Subscription Receipts will be cancelled and the proceeds of the Offering, together with each subscriber's pro rata share of interest thereon, will be returned to the subscribers.

Each Unit will be comprised of one common share of the Company (a "Common Share") and one-half of one common share purchase warrant (each whole common share purchase warrant, a "Warrant"). Each whole Warrant will entitle the holder thereof to purchase one Common Share at an exercise price of C$0.60 for a period of 36 months from the closing date of the Offering, subject to a Warrant acceleration right exercisable by the Company if, at any time following the date that is four months and one day from the date of the closing of the Offering, the daily volume weighted average trading price of the Company's common shares on the Canadian Securities Exchange is greater than C$1.00 for the preceding five consecutive trading days.

The Company plans to use the net proceeds from the Offering to advance business operations in North America and Europe and for general corporate purposes. The Offering is scheduled to close on or about March 4, 2021 and is subject to certain conditions customary for transactions of this nature, including, but not limited to, the receipt of all necessary approvals, including the approval of the Canadian Securities Exchange.

The Subscription Receipts to be issued under the Offering and the securities of the Company exchanged for the Subscription Receipts upon the closing of the Transaction will be subject to a statutory hold period expiring four months and one day from the closing date of the Offering.

On the closing date of the Offering, the Company shall pay to the Underwriters a cash commission of 7% of the gross proceeds raised under the Offering.  In addition, on the closing date of the Offering, the Company shall issue to the Underwriters warrants of the Company (the "Broker Warrants"), exercisable for a period of 36 months following the closing date, to acquire in aggregate that number of Units which is equal to 7% of the number of Subscription Receipts sold under the Offering at an exercise price equal to the Issue Price.

Non-Brokered Private Placement

GameSquare also intends to complete a non-brokered private placement financing of up to 2,380,952 units (each, a "Non-Brokered Unit") at a price of $0.42 per Unit for gross proceeds of up to $1,000,000 (the "Non-Brokered Offering").  Each Non-Brokered Unit will consist of one common share of the Company and one-half of one common share purchase warrant (each whole warrant, a "Non-Brokered Warrant"). Each Non-Brokered Warrant will entitle the holder thereof to acquire one common share of the Company at a price of $0.60 for a period of 36 months following the closing date of the Non-Brokered Offering.  The Non-Brokered Offering is expected to close on or about February 16, 2021.  The Company intends to use the net proceeds of the Offering for working capital and general corporate purposes.

Finder's fees may be paid to eligible finders in accordance with the policies of the CSE consisting of a cash commission equal to up to 7% of the gross proceeds raised under the Non-Brokered Offering and finder warrants ("Finder Warrants") in an amount equal to up to 7% of the number of Non-Brokered Units sold pursuant to the Non-Brokered Offering. Each Finder Warrant will entitle the holder thereof to purchase one Common Share at a price of $0.60 per Common Share for a period of 36 months following the closing date of the Offering.

The Non-Brokered Units to be issued under the Non-Brokered Offering and the relevant underlying securities of the Company will be subject to a statutory hold period expiring four months and one day from the closing date of the Non-Brokered Offering.

About GameSquare

GameSquare is an international esports company headquartered in Toronto, Canada. The Company is seeking to acquire additional assets and entities serving the esports market and, more broadly, in sports and entertainment. GameSquare's acquisition of Code Red Ltd. ("Code Red"), an esports talent agency, provided an initial foothold in Europe through its UK operations. Code Red represents leading on-screen talent, players and influencers and works with leading global brands to develop influencer campaigns and esports marketing strategies.

Forward-Looking Information

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the Offering and the Non-Brokered Offering ; the completion of the acquisition of Reciprocity Corp., the Company's ability to execute its business plan and the business, strategy and operations of the Company. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, GameSquare assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

Neither the Canadian Securities Exchange nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.

The securities to be offered pursuant to the Offering have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

SOURCE GameSquare Esports Inc.