News Release

Enthusiast Gaming Inc. Announces Closing of Oversubscribed Subscription Receipt Financing

Toronto, Ontario–(Newsfile Corp. – June 19, 2018) – Further to the press releases dated January 3, 2018 and June 11, 2018, Enthusiast Gaming Inc. (“Enthusiast” or the “Company“) and Tova Ventures II Inc. (TSXV: TOVA.P) (“Tova“) are pleased to announce that Enthusiast has completed its private placement offering of subscription receipts (“Subscription Receipts“) co-led by Haywood Securities Inc. and Canaccord Genuity Corp. (the “Lead Agents“) and including Interward Asset Management Ltd. and PowerOne Capital Markets Limited (collectively, with the Lead Agents, the “Agents“) for gross proceeds of $7,736,625 (the “Brokered Financing“). Concurrently with the Brokered Financing, Enthusiast completed a non-brokered offering of Subscription Receipts for gross proceeds of $762,500 (the “Non-Brokered Financing” and together with the Brokered Financing, the “Offering“) resulting in the aggregate gross proceeds of the Offering being $8,499,125. The Offering was completed in connection with the proposed business combination (the “Transaction“) between Enthusiast and Tova previously announced in press releases of Tova dated January 3, 2018 and June 11, 2018, which transaction is intended to constitute Tova’s “Qualifying Transaction” pursuant to Policy 2.4 of the TSX Venture Exchange (the “Exchange“).

The Offering

Under the terms of the Brokered Financing and pursuant to an agency agreement dated the date hereof between Tova, Enthusiast and the Agents, Enthusiast issued 6,799,300 Subscription Receipts at a price of $1.25 per Subscription Receipt (the “Offering Price“) for gross proceeds of $7,736,625. Concurrently, Enthusiast completed the Non-Brokered Financing of Subscription Receipts on the same terms as the Brokered Financing by issuing 610,000 Subscription Receipts at the Offering Price for gross proceeds of $762,500.

The proceeds of the Brokered Financing, together with funds raised in the Non-Brokered Financing, will be used for general corporate and working capital purposes and to fund acquisitions of online digital properties similar to those already in Enthusiast’s portfolio. The Offering is a condition precedent to the Transaction.

Each Subscription Receipt entitles the holder thereof to receive, upon satisfaction of the Escrow Release Conditions (as hereinafter defined) on or before the Escrow Release Deadline (as hereinafter defined), and without payment of additional consideration, one unit of Enthusiast (each, a “Unit“). Each Unit will consist of one common share (each, an “Underlying Share“) and one-half of one common share purchase warrant (each whole common share purchase warrant, an “Underlying Warrant“) of Enthusiast, with each Underlying Warrant being exercisable into one common share in the capital of Enthusiast at a price of $1.60 for a period of 24 months from the date of the satisfaction of the Escrow Release Conditions (as hereinafter defined). Pursuant to the Transaction, each Underlying Share and Underlying Warrant will be exchanged on an equivalent basis, without further consideration, for common shares and warrants in the capital of Tova.

The gross proceeds of the Offering, less (i) 50% of the Agents’ Fee (as defined below), and the whole of the Corporate Finance Fee (as defined below), each of which were paid to the Agents, (ii) the expenses of the Agents incurred in connection with the Brokered Financing, which were paid to the Agents; and (iii) 50% of the gross proceeds, which shall be paid to the Company (collectively, the “Escrowed Proceeds“) were delivered to and held by TSX Trust Company (the “Escrow Agent“). The Escrowed Proceeds, together with all interest and other income earned thereon, are referred to herein as the “Escrowed Funds“.

The remaining 50% of the Agents’ Fee will be released from escrow to the Agents from the Escrowed Funds and the balance of the Escrowed Funds will be release from escrow to the Company upon satisfaction of customary escrow release conditions (the “Escrow Release Conditions“) on or before 5:00 pm (Toronto time) on the date that is 120 days from the date hereof (the “EscrowRelease Deadline“).

In the event that (i) the Escrow Release Conditions are not satisfied on or before the Escrow Release Deadline, or (ii) if prior to such time, the Company advises the Agents or announces to the public that it does not intend to satisfy the Escrow Release Conditions, the Escrow Agent will return to holders of Subscription Receipts an amount equal to the aggregate Offering Price of the Subscription Receipts held by them and their pro rata portion of any interest earned thereon. The Company will be responsible and liable to the holders of Subscription Receipts for any shortfall between the aggregate Offering Price and the Escrowed Funds.

The Agents will receive a cash commission equal to 5.0% of the aggregate gross proceeds from the Brokered Financing (the “Agents’ Fee“). Enthusiast will also issue to the Agents that number of compensation options (the “Compensation Options“) equal to 5.0% of the aggregate number of Subscription Receipts sold pursuant to the Brokered Financing. Each Compensation Option will entitle the holder thereof to acquire one common share of the resulting issuer (the “Resulting issuer“) at an exercise price of $1.25 for a period of 24 months following the date the Resulting Issuer common shares are listed on the Exchange. In addition, the Company paid the Agents a corporate finance fee of $35,000 and issued 30,000 compensation options (on the same terms as the Compensation Options) (the “Corporate Finance Fee“).

About Enthusiast

Enthusiast was incorporated in 2014 under the laws of the Province of Ontario. Enthusiast owns and operates an online network of websites devoted to video gaming and Canada’s largest video-gaming expo. Between its online digital media properties, its network of partner websites, and video-gaming gaming expo, Enthusiast engages millions of video gaming enthusiasts worldwide.

Further Information

For more information please contact:

Gavin Cooper
Chief Executive Officer
Tova Ventures II Inc.

Eric Bernofsky
Chief Financial Officer
Enthusiast Gaming Inc.

Reader Advisory

Completion of the proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance, the completion of the Escrow Release Conditions to the satisfaction of the parties, shareholder approval of Enthusiast for the Transaction, and shareholder approval of Tova for those related matters in connection with the Transaction. There can be no assurance that the proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the proposed Transaction, any information released or received with respect to the proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

Neither the Exchange nor its Regulation Services Provider (as the term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this press release. Neither of the foregoing entities has in any way passed upon the merits of the Transaction and associated transactions or has in any way approved or disapproved the contents of this press release.

The securities of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. 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 jurisdiction in which such offer, solicitation or sale would be unlawful.

Forward-Looking Information Advisory

This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the proposed Transaction; the use of funds; and the business and operations of Enthusiast, Tova or the Resulting Issuer following the completion of the proposed Transaction. 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; and delay or failure to receive board, shareholder or regulatory approvals. 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 forward-looking statements. Tova disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Tova’s views regarding possible events, conditions or financial performance may change. However, Tova does not intend to update the forward-looking information in this press release, except as required by applicable securities legislation.