React Gaming Announces Closing of First Tranche of $5,000,000 Private Placement of Units of the Corp

Montreal, Quebec, Canada, October 24, 2022 React Gaming Group Inc. (“React Gaming” or the “Corporation”) (TSXV: RGG, OTCQB: ITMZF) is pleased to announce that it has closed the first tranche of a non-brokered private placement (the “Private Placement”) of units of the Corporation (the “Units”) at a price of $0.10 per Unit, for gross proceeds of up to $5,000,000. Under the first tranche, the Corporation sold 6,350,000 Units for gross proceeds of $635,000.


Each Unit consists of one common share in the capital of the Corporation (each, a “Share”) and one common share purchase warrant (each, a “Warrant”). Each Warrant entitles the holder thereof to purchase one additional Share (each, a “Warrant Share”) for a period of 48 months from the date of issue of the Warrants, subject to the occurrence of an Acceleration Event (as defined below), at an exercise price of $0.12 per Warrant Share. If the daily volume weighted average trading price of the Shares on the TSX Venture Exchange, (the “TSXV”) (or such other Canadian stock exchange on which the Shares are listed for trading) for 10 consecutive trading days equals or exceeds $0.30, and as adjusted in accordance with the terms of the Warrant (an “Acceleration Event”), the Corporation may accelerate the expiry date of the Warrants by issuing a press release announcing the Acceleration Event and the new expiry date which will be the 30th calendar day after the date of such press release. Pursuant to the terms of the Private Placement, the Corporation intends to issue up to 50,000,000 Shares and 50,000,000 Warrants. The Corporation issued 6,350,000 Shares and 6,350,000 Warrants under the first tranche of the Private Placement.


The Corporation shall pay eligible arm’s length parties (each a “Finder”): (i) a cash fee of 6% of the aggregate value of Units sold pursuant to the Private Placement in respect of Units referred to the Corporation or directly sourced by the Finder and issued on the closing of the first tranche of the Private Placement; and (ii) a number of Finders warrants (each a “Finder Warrant”) equal to 8% of the Units sold that were referred to or directly sourced by the Finder to the Corporation. The Finder Warrants will be issued on the same terms as the Warrants.


The Corporation will complete multiple closings of the Private Placement as the Corporation receives subscriptions. Each closing is subject to a number of conditions, including, without limitation, approval of the TSXV, and receipt of all necessary corporate and regulatory approvals.


The securities issued under the Private Placement are being offered by way of private placement in such provinces and/or territories of Canada as may be determined by the Corporation, to certain subscribers in the United States and outside the United States, in each case, pursuant to applicable exemptions from the prospectus requirements under applicable securities laws. All securities issued under the Private Placement will be subject to a hold period that will expire four months and one day from the date of the applicable closing of the Private Placement. The hold period applicable to the securities issued under the first tranche of the Private Placement will expire on February 22, 2023.


The Corporation intends to use the proceeds from the Private Placement for administrative and other general working capital purposes.


Share Consolidation

The Corporation proposes to consolidate its issued and outstanding share capital on the basis of 4 pre-consolidation Shares for 1 post-consolidation Share (the “Share Consolidation”). At the annual and special meeting of the holders of Shares (the “Shareholders”) to be held on November 17, 2022, the Shareholders will be asked to consider and, if deemed appropriate, to pass, with or without variation, a special resolution approving the Share Consolidation. The Corporation shall: (i) issue a subsequent news release containing further information with respect to the Share Consolidation; and (ii) provide to the Shareholders an information circular pertaining to such matters in due course. The Share Consolidation is also subject to approval of the TSXV.


“These last few months as CEO have allowed me to evaluate our assets and their market potential. We believe we can expand our esports and iGaming activities on a global scale, but it will require additional funds that we can only obtain by reorganizing our share structure. This first closing is a strong vote of confidence in our team, the growth potential of our assets and our long-term strategy. Although we will focus on growth, we will also look at how we can best operate our subsidiaries to make them more efficient and potentially EBITDA-positive, which is crucial if we are to succeed in any business model. Even though a lot of money has been invested in the esports sector, we need to remind investors that this is a young industry, with the potential to evolve into something much larger that holds a profitable future for React Gaming,” said Leigh Hughes, CEO of React Gaming.


About React Gaming Group

React Gaming Group (TSXV: RGG) (OTCQB: ITMZF) is a publicly traded holding company that stands at the forefront of the esports and iGaming industry. By investing in innovative technologies that enhance tournaments, teams, and wagering, we provide our users with gaming platforms that produce non-stop action, exciting outcomes, and unparalleled enjoyment. Through the use of intelligent data, we also connect our sponsors to robust communities within the rapidly evolving industry, ensuring maximum engagement and substantial reward. For more information, please visit us at reactgaming.ca and follow us on LinkedIn, Twitter, Instagram and YouTube.


Forward-Looking Statements

This news release may contain “forward-looking statements” within the meaning of applicable Canadian securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. These statements generally can be identified by the use of forward-looking words such as “may”, “should”, “will”, “could”, “intend”, “estimate”, “plan”, “anticipate”, “expect”, “believe” or “continue”, or the negative thereof or similar variations, and include but are not limited to the statements regarding the completion of the Private Placement, payment of a finder’s fee in connection with the Private Placement, the securities to be issued under the Private Placement, closing the Private Placement in tranches, the offering jurisdictions of the Private Placement, effecting the Share Consolidation, mailing of the information circular, and receipt of approval from the TSXV with respect to the Private Placement and Share Consolidation. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause future results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. The Corporation’s statements expressed or implied by these forward-looking statements are subject to a number of risks, uncertainties, and conditions, many of which are outside of the Corporation’s control, and undue reliance should not be placed on such statements. Forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding the Corporation’s activities, including: that the Corporation’s assumptions in making forward-looking statements may prove to be incorrect; general adverse market conditions and competition; the inability to finance operations and/or obtain any future strategic investment necessary to implement new technologies; the inability to build a sustainable, conscientious company with a stronger presence online through new products in esports and gaming; the inability to obtain, or maintain, gaming license(s); and that market conditions related to the COVID-19 pandemic may negatively affect the outcome of the business or operations of the Corporation, including its results and financial condition. Except as required by securities law, the Corporation does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise.


Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.