TGS Esports Signs Letter Of Intent For Reverse Takeover And Agreement For $1M Loan

TGS Esports Inc. announced that it has entered into a non-binding letter of intent dated February 16th, 2022 with respect to a potential business combination with certain subsidiaries of an arm’s length entertainment, travel, and media company which would result in a reverse takeover of the company by the shareholders of MediaCo. The final structure and terms of the transaction have not yet been finalized, and remain subject to conditions including due diligence of the parties and receipt by the parties of tax, corporate, and securities law advice.  

The issuer resulting from the transaction is expected to remain a diversified media company with esports and gaming, travel, and media divisions, and to carry on the current business of TGS and the media subsidiaries. The media subsidiaries represent the travel division and interactive TV and media divisions of MediaCo and are expected to have synergies with the business of TGS. The transaction with the media subsidiaries is intended to provide the company with an opportunity to internalize a travel platform for its live events and have travel integration in Pepper’s social gaming platform, and to provide access to more end-users for TGS’ esports content, tournaments, and events through an internalized media division with significant reach. Additional information regarding the business and financial condition of the media subsidiaries will be provided when available.

In connection with the transaction, TGS is seeking to complete a private placement (the concurrent financing) to raise minimum gross proceeds of $3 million. The terms of the concurrent financing have not been finalized. The proceeds from the concurrent financing are expected to be used to fund the initial working capital requirements of the issuer resulting from the transaction with respect to its operations and business plans, and to fund the working capital requirements for the current business of the company and the media subsidiaries.

The completion of the transaction and concurrent financing remain subject to a number of conditions including satisfactory due diligence, the receipt of structuring advice by the parties, approval of the board of directors of each of the parties, entry into a binding agreement, approval of the TSX Venture Exchange and other conditions customary to transactions of this nature. Further updates and particulars of the transaction will be provided upon the company and MediaCo entering into a binding agreement for the transaction. Trading in the company’s stock is expected to remain halted until the completion of the transaction.

(All information was provided by Cision)

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