Enthusiast Gaming Announces it Has Received a Commitment of $5.0 Million for Convertible Debenture Units

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Enthusiast Gaming Holdings Inc. (“Enthusiast” or the “Company”), a digital media company building the largest community of authentic gamers, is pleased to announce a non-brokered private placement of convertible debenture units (the “Units”) for total gross proceeds of $5 million (the “Offering”). In connection with the Offering, the Company has received a commitment for the full amount of $5 million. Canaccord Genuity Corp. (“Canaccord Genuity”) is acting as advisors to the Company with respect to the Offering. The net proceeds from the Offering are anticipated to be used for working capital purposes, general corporate purposes, and potential acquisitions.

Each Unit, at a price of $1,000 per Unit, will be comprised of one unsecured convertible debenture (each a “Debenture” and collectively, the “Debentures”), having a principal amount of $1,000 and accruing interest at 9% per annum, payable semi-annually until maturity, and 315 common share purchase warrants of the Company (each, a “Warrant” and collectively, the “Warrants”). Each Debenture is convertible into common shares of the Company (each, a “Common Share”) at a conversion price of $1.60 per Common Share (the “Conversion Price”). The Company has the right, in certain circumstances, to give notice to the holder to redeem the Debenture, in which case the holder of the Debenture will have the option to redeem or convert the Debenture. The Debentures will mature on December 31, 2021. Each Warrant will entitle the holder to acquire one Common Share at a price of $2.00 per Common Share for a period of two years following the closing of the Offering, subject to adjustment in certain events. The Company may force the exercise of the Warrants, in certain circumstances, should the Common Shares trade higher than $3.00 for a period of time.

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Menashe Kestenbaum, CEO of Enthusiast commented, “this financing is a positive milestone for the company on the heels of going public. The commitment further validates Enthusiast Gaming’s business model to grow the largest community of authentic gamers and better positions the company to capitalize on its growth strategy through acquisitions.”

Beginning on the date that is four months and one day following the closing of the Offering, the Company may force the conversion of the then outstanding principal amount of the Debentures (plus accrued and unpaid interest thereon) at the Conversion Price on not less than 30 days notice, should the daily volume weighted average trading price of the Common Shares be greater than $2.40 for seven consecutive trading days, ending five trading days prior to the applicable date.

The Debentures will rank pari passu in right of payment of principal and interest with all other Debentures issued under the Offering.

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Closing of the Offering is expected to occur on or about November 8, 2018. The Units are being offered in all provinces of Canada and may also be offered in other jurisdictions determined by the Company and Canaccord Genuity. The Offering is subject to certain conditions, including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals.

The Debentures and Warrants issued pursuant to the Offering and any Common Shares issued on conversion of the Debentures or exercise of the Warrants will be subject to a statutory hold period in Canada of four months and one day following the closing of the Offering in accordance with applicable securities laws. Additional resale restriction may be applicable under the laws of other jurisdictions, if any.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, and these securities will not be offered or sold in any jurisdiction in which their offer or sale would be unlawful. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), or any state securities laws of the United States. Accordingly, these securities will not be offered or sold to persons within the United States unless an exemption from the registration requirements of the 1933 Act and applicable state securities laws is available.

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