VANCOUVER, BC, Oct. 7, 2020 /CNW/ - TGS Esports Inc.
("TGS" or the "Company") (TSXV: TGS) is pleased
to announce that it has taken the next step in its growth strategy
by executing a letter of intent dated October 1, 2020 (the "LOI") to acquire
Volcanic Media Inc. ("Volcanic"), a leader in scholastic and
grassroots Canadian esports (the "Acquisition").
Volcanic was founded in 2018 and is the creator of the National
Esports Scholastic League, a first of its kind initiative that
works directly with school districts and educators to create
various esports initiatives. To date Volcanic has worked with over
1000 high school students in 13 different cities spanning 6 school
districts.
Volcanic has been at the forefront of scholastic esports
including awarding high school esports scholarships and creating
inter-district high school esports leagues, both firsts of their
kind in Canada. Volcanic have also
started work on indigenous esports efforts, previously working with
Binche Keyoh First Nations for pilot esports programs.
Following the closing of the Acquisition (the "Closing"),
TGS is also proud to announce that, as part of this new
partnership, all high schools looking to utilize Volcanic will be
able to do so absolutely free with no fees paid by schools or
students. Interested schools can reach out to Shawn Caldera: shawn@volcanic.gg.
Acquisition Highlights
- The Acquisition is expected to drive over 200,000 new users to
TGS through scholastic leagues, tournaments, and in-class
programs.
- The new users will feed into TGS' online platform, Pepper
Esports, which adds to TGS' overall strategy of having one central
ecosystem that creates an unparalleled esports experience.
- The Acquisition has the potential to put TGS at the forefront
of High School esports in Canada
and offer TGS an all new scholastic division led by Shawn Caldera and JP Perez of Volcanic.
"We have been working with Shawn and his team for some time now
and it made perfect sense to bring Volcanic into the fold," said
Spiro Khouri, CEO of TGS. "Thirty
percent of all gamers are under the age of 181 and that
number is growing. By introducing that demographic to TGS it allows
them to interact with us early and stay a part of our ecosystem
beyond High School."
"Volcanic was created to provide high quality esports events in
the scholastic space. In this regard, the agreement with TGS will
allow us to take Volcanic to the next level and work with students
not only in High School but beyond," said Shawn Caldera, President of Volcanic.
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1 Victor Yanev, "Video Game
Demographics – Who Plays Games in 2020", TechJury (July 25,
2020), online:
<https://techjury.net/blog/video-game-demographics/#gref>.
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Summary of Acquisition
The LOI sets out the principal terms on which the parties have
agreed to complete the Acquisition. The parties have agreed to
negotiate in good faith to formalize a definitive agreement (the
"Definitive Agreement") on or before October 30, 2020, and to consummate the
Acquisition on or before November 30,
2020.
On Closing, the Company will acquire all of the issued and
outstanding common shares of Volcanic (the "Volcanic
Shares") in exchange for a purchase price of $240,000 (the "Purchase Price"). The
Purchase Price will be payable by the issuance of such number of
common shares of TGS (each, a "TGS Share") that is
equal to the relevant payment (collectively, the "Consideration
Shares"), which Consideration Shares will be subject to certain
mutually agreed upon terms of escrow.
The Consideration Shares will be distributed upon each of the
following milestones being achieved: 40,000 on the Closing;
$10,000 on the date that 10,000 new
users are registered on Pepper Esports Inc.'s ("Pepper")
esports platform or any other TGS platform as a result of contracts
entered into by Volcanic; $30,000 on
the date that 40,000 total new users are registered on Pepper's
esports platform or any other TGS platform as a result of contracts
entered into by Volcanic; $30,000 on
the date that 70,000 total new users are registered on Pepper's
esports platform or any other TGS platform as a result of contracts
entered into by Volcanic; $30,000 on
the date that 100,000 total new users are registered on Pepper's
esports platform or any other TGS platform as a result of contracts
entered into by Volcanic; $50,000 on
the date that 150,000 total new users are registered on Pepper's
esports platform or any other TGS platform as a result of contracts
entered into by Volcanic; and $50,000
on the date that 200,000 total new users are registered on Pepper's
esports platform or any other TGS platform as a result of contracts
entered into by Volcanic.
Subject to the approval of the TSX Venture Exchange
("TSXV"), the Consideration Shares will be issued at a
deemed price equal to the Discounted Market Price (as defined in
the policies of the TSXV) of the TGS Shares on the date of issuance
of the Consideration Shares based on the Volume Weighted Average
Price of TSXV's share price in the ten (10) trading days prior to
the relevant payment date. The discount applicable to the
Consideration Shares shall be the lesser of 25% and the maximum
discount applicable under the policies of the TSXV on the date of
issuance of the Consideration Shares.
On Closing, it is anticipated that each of Shawn Caldera and JP Perez will enter into
consulting agreements with TGS pursuant to which they will serve
the Company as Scholastic Esports Director and Scholastic Esports
Manager respectively.
The Acquisition is expected to constitute a "Reviewable
Transaction" as defined in TSXV Policy 5.3 – Acquisitions and
Dispositions of Non-Cash Assets and is therefore subject to the
prior approval of the TSXV. No finder's fees are payable in
connection with the Acquisition. Following the Closing, Volcanic
will become a wholly-owned subsidiary of the Company.
Completion of the Acquisition remains subject to a number of
conditions, including: (i) the approval of the Acquisition by the
shareholders of Volcanic, (ii) the completion of satisfactory due
diligence, (iii) the approval of the boards of directors of the
Company and Volcanic, (iv) the execution of the Definitive
Agreement, (v) obtaining all required consents, waivers and
approvals, including the approval of the TSXV, and (vi) other
closing conditions customary for transactions of this nature.
About Volcanic Esports Inc.
Volcanic Media Inc. is a private British Columbia esports and digital media
startup. Volcanic is a leader in esports growth in Canada, running the National Esports
Scholastic League, where students compete for post-secondary
scholarship funding. Volcanic also acts as a gateway for digital
creators, gamers and media enthusiasts for their future careers.
Volcanic works with tech accelerators, tech businesses and
educators to help foster grassroots community engagement through
Volcanic's ATLAS platform; a powerful esports engagement platform
helping to ensure no esports enthusiast is left behind.
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: Shawn
Caldera and JP Perez joining the TGS team, that the
Acquisition will increase the number of TGS users and, in turn,
feed into TGS' online platform, that the Acquisition will allow the
Company to keep players within its ecosystem, that the Acquisition
has the potential to put TGS at the forefront of High School
esports in Canada, the execution
of the Definitive Agreement and the terms of such Definitive
Agreement, the completion of the Acquisition and the acceptance of
the Acquisition and terms thereof by the TSXV. 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