AGORACOM Small-cap Investor Relations Blog

• Both companies received overwhelming votes in favour of the merger arrangement during the Annual and Special Meeting of Enthusiast held on August 26, 2019 and during the Annual and Special Meeting pf J55 also held on August 26, 2019

TORONTO and VANCOUVER, B.C., Aug. 27, 2019 — Enthusiast Gaming Holdings Inc. (TSX-V: EGLX) (“Enthusiast“) and J55 Capital Corp. (TSX-V: FIVE.P) (“J55”) are pleased to announce that both companies received overwhelming votes in favour of the merger arrangement during the Annual and Special Meeting of Enthusiast held on August 26, 2019 (the “Enthusiast Meeting”) and during the Annual and Special Meeting pf J55 also held on August 26, 2019 (the “J55 Meeting”). 

At the Enthusiast Meeting, Enthusiast shareholders (“Enthusiast Shareholders”) voted in favour of the arrangement resolution (the “Enthusiast Arrangement Resolution“) under which J55 will acquire all of Enthusiast’s issued and outstanding common shares by way of a plan of arrangement under the Business Corporations Act (Ontario) (the “Arrangement“). The Enthusiast Arrangement Resolution required approval of at least 66 2/3% of the votes cast by the Enthusiast Shareholders at the Enthusiast Meeting.

At the J55 Meeting, the J55 shareholders represented by proxy voted unanimously in favour of the resolution approving the Arrangement (the “J55 Arrangement Resolution”) and unanimously in favour of the resolution (the “J55 QT Resolution”) approving the three cornered amalgamation among J55, its wholly-owned subsidiary and Aquilini GameCo Inc. (“GameCo”) which will result in the acquisition of all of the issued and outstanding securities of GameCo by J55 (the “Amalgamation”) and serves as J55’s Qualifying Transaction (as defined in the policies of the TSX Venture Exchange (the “TSXV”). The J55 Arrangement Resolution required approval of more than 50% of the votes cast by shareholders of J55, and the J55 QT Resolution, since it is a Related Party Transaction as defined in TSXV policies, required approval of the majority of disinterested shareholders (with shares held by interested shareholders, namely Adrian Montgomery, Francesco Aquilini and Roberto Aquilini being excluded) pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) and by a majority of the minority shareholders (with shares held by non-arm’s length parties to J55 namely Adrian Montgomery, Francesco Aquilini, Roberto Aquilini, John Veltheer and Alex Helmel being excluded) pursuant to Policy 2.4 of the TSXV.

Closing of the Amalgamation and the Arrangement (collectively, the “Transactions”) remain subject to certain conditions including: final approval of the TSXV; for the Amalgamation, the completion of the acquisition by GameCo of Luminosity Gaming Inc. and Luminosity Gaming (USA), LLC (collectively, the “Luminosity Acquisition”) and completion of the First Consolidation; and for the Arrangement, final approval of the Ontario Superior Court of Justice (the “Court”). The application for the final order from the Court is scheduled for August 29, 2019. Assuming that the conditions to closing are satisfied or waived, it is expected that the Arrangement will be completed in early September, 2019. Following completion of the Arrangement, Enthusiast will become a wholly-owned subsidiary of J55, will cease to be a reporting issuer and its shares will be delisted from the TSXV and OTCQB.

First and Second Consolidations

J55 also announces that it has consolidated the issued and outstanding common shares of J55 (each, a “J55 Share”) on the basis of 1.25 pre-consolidation J55 Shares for 1 post-consolidation J55 Share (the “First Consolidation”). The First Consolidation is effective as of August 26, 2019, and the J55 Shares will be listed on the TSXV on a post-First Consolidation basis effective at the opening of the market on August 28, 2019, although the J55 Shares will remain halted pending completion of the Transactions. Prior to the First Consolidation, there were 19,000,000 J55 Shares issued and outstanding. Accordingly, upon the First Consolidation becoming effective, there will be a total of 15,200,000 J55 Shares outstanding subject to adjustments for rounding.

Following completion of the Transactions, J55 intends to complete a second consolidation (the “Second Consolidation”, and together with the First Consolidation the “Consolidations”) of its then issued and outstanding shares on the basis of 8 post-First Consolidation Shares for 1 post-Second Consolidation J55 Share and to change its name from “J55 Capital Corp.” to “Enthusiast Gaming Holdings Inc.” (the “Name Change”).  J55 is authorized to issue an unlimited number of common shares.

Letters of transmittal will not be sent to shareholders in connection with either the First Consolidation or the Second Consolidation. Share certificates and direct registration statements, as applicable, will be sent to registered shareholders following completion of the Second Consolidation and Name Change reflecting the adjustments to their shareholdings as a result of the Consolidations, as applicable.

Further information about the Transactions and Consolidations is set forth in the joint information circular of Enthusiast and J55 dated July 23, 2019 which was mailed to the shareholders of Enthusiast and J55, and which is available under their respective profiles on SEDAR at www.sedar.com.

About Enthusiast Gaming

Founded in 2014, Enthusiast Gaming is the largest vertically integrated video game company and has the fastest-growing online community of video gamers. Through the Company’s organic and acquisition strategy, it has amassed a platform of over 150 million monthly visitors across its network of websites and YouTube channels. Enthusiast also owns and operates Canada’s largest gaming expo, Enthusiast Gaming Live Expo, EGLX, (eglx.ca) with approximately 55,000 people attending in 2018. For more information on the Company, visit www.enthusiastgaming.com.

For further information regarding J55, please contact:

John Veltheer
Chief Financial Officer, Secretary and Director
Telephone: 604-562-6915
Email: [email protected]

For further information regarding Enthusiast, please contact:

Julia Becker
Head of Investor Relations & Marketing
Telephone: (604) 785-0850
Email: [email protected]

Forward-Looking Information

This news release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of J55 or Enthusiast Gaming to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements in this news release include, but are not limited to: statements with respect to the completion of the Transactions and Consolidation and the timing for their completion; the satisfaction of closing conditions which include, without limitation, certain termination rights available to the J55 and GameCo under the Amalgamation Agreement and receipt of final approval of the TSXV; completion of the Arrangement and the timing for its completion; the satisfaction of closing conditions which include, without limitation (i) necessary court approvals in connection with the plan of arrangement, (ii) certain termination rights available to the J55 and Enthusiast under the Arrangement Agreement, (iii) J55 obtaining the necessary approvals from the TSX-V for the listing of its common shares, (iv) Enthusiast Gaming receiving approval for the delisting of its shares on the TSX-V, and (v) other closing conditions, including compliance by J55 and Enthusiast Gaming with various covenants contained in the Arrangement Agreement.  Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Readers are cautioned that the foregoing list of factors is not exhaustive. The forward-looking statements contained in this news release are made as of the date of this release and, accordingly, are subject to change after such date. J55 and Enthusiast Gaming do not assume any obligation to update or revise any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf, except as required by applicable law.

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.