GameSquare Esports Inc., an international esports company, is pleased to announce that it has agreed with Canaccord Genuity Corp., on behalf of a syndicate of underwriters (collectively, the “Underwriter”), to increase the previously announced bought deal financing.
The Underwriters have agreed to purchase on a bought deal private placement basis, 16,700,000 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$7,014,000 (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.
As consideration for their services with respect to the Offering, the Underwriters shall be entitled to (i) a cash commission of 7% of the gross proceeds raised under the Offering, and (ii) 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.
SOURCE GameSquare Esports Inc.