GameSquare Esports Inc. (CSE: GSQ; FRA: 29Q1) (“GameSquare” or the “Company”), a Canadian gaming and esports company, is pleased to provide additional details on the proposed combination of GameSquare and Reciprocity Corp. (“Reciprocity”), a privately held gaming and esports company headquartered in Toronto, Canada (the “Transaction”). Reciprocity is an established gaming and esports brand with assets in the United States of America, Asia and Latin America, three of the largest and fastest growing global markets. The Transaction, if completed, is anticipated to provide expanded access to important gaming and esports markets by complementing GameSquare’s operations in Europe through the Company’s subsidiary, Code Red Inc. (“Code Red”), The Authentic Esports Agency, with the Gaming Community Network (“GCN”), based in Los Angeles. As further described in a press release dated November 25, 2020, the combination of GameSquare and Reciprocity is expected to significantly increase the revenue profile of the combined entity and to result in a high growth company that generates positive EBITDA in the twelve months following closing. Please see the Company’s press release dated January 4, 2021 for more information about the arrangement agreement that was entered into in connection with the Transaction, which is available on the Company’s profiles at and

The closing of the Transaction is subject to the satisfaction of customary conditions precedent, including, inter alia, applicable shareholder and regulatory approvals, including a final court order of the Ontario Superior Court of Justice (Commercial List), and other closing conditions customarily found in business combinations similar to the Transaction. Closing is expected to occur in March 2021.

“I look forward to bringing Reciprocity and its outstanding gaming and esports assets under the GameSquare umbrella,” said Kevin Wright, CEO of GameSquare. “The team in Los Angeles is experienced, hungry, and motivated to grow GCN as a full-service marketing and media group. GCN has shown that it can bridge the gap between gaming communities and global brands seeking to reach the lucrative esports demographic. We strongly believe that businesses authentically connecting global brands to gaming and esports enthusiasts are well positioned for meaningful growth as the industry sees increasing marketing spend diverted towards this important new form of entertainment. GCN and Reciprocity’s teams in Asia and Latin America are great additions to our platform as we build a leading international gaming and esports organization.”

“GameSquare and Reciprocity makes strategic sense for a number of reasons, including an immediate gain in scale and expansion of the organization’s footprint to the largest and most important gaming and esports markets,” added David Fawcett, CEO of Reciprocity. “I believe that we have an opportunity to accelerate organic growth while achieving positive EBITDA, which is unique within the gaming and esports industry. The sales pipeline at GCN is robust and gives me a high degree of confidence that Reciprocity can achieve each of the earn-out targets and grow into a business with meaningful market share in a multi-billion dollar industry. Further, I believe that the combination of the two businesses will further enhance the Company’s profile and help to attract top tier clients and talent to GCN, Code Red and to GameSquare.”

The Transaction rationale includes:

• High revenue growth. Code Red and Reciprocity have shown strong revenue growth as esports engagement and viewership has increased. Based on current performance and its strong sales pipeline, Reciprocity management expects to receive the full earn out payment.

• Positive EBITDA generation. Management at GameSquare and Reciprocity are focused on generating positive EBITDA while rapidly growing sales. Management believes that this is a unique and differentiated strategy within the esports industry which can contribute to generating significant shareholder value.

• Achieving meaningful scale. The Company is working to achieve meaningful financial growth in the near term and long term. Reciprocity management expects to receive its full earn out payment which positions the Company favourably from a financial perspective. Management of both companies believe that scale, rapid sales growth, and profitability supplemented by growth through acquisitions are necessary for long-term success in the esports industry.
• Access to the largest and fastest growing gaming and esports markets. GCN is headquartered in Los Angeles, providing access to the highly lucrative US market. Reciprocity and GCN have built relationships with household brands and Fortune 500 companies. Entry to the US market is expected to represent a positive milestone for GameSquare. Further, Reciprocity’s ownership in esports organizations based in Asia and Latin America is anticipated to provide the Company with a foothold in two of the largest and fastest growing gaming and esports markets.
• Revenue synergies through cross-selling. Following completion of the proposed Transaction, GameSquare will seek to strengthen relationships with global brands through its subsidiaries based in the US and UK. It is expected that Code Red and GCN will benefit from cross selling opportunities across the network. Customer overlap between the two companies is estimated at less than 5%, presenting a significant opportunity for synergistic revenue growth.

• Outstanding platform for organic growth and future acquisitions. The combination of GameSquare and Reciprocity positions the Company to rapidly grow sales organically and to become a leading acquirer of choice within esports. The improved financial profile and enhanced public profile is helping to expand the sales and acquisition pipeline and is attracting attention from leading esports professionals. The Company believes that its assets form an outstanding platform for organic growth and for accretive M&A as management targets high growth and profitability which is unique within gaming and esports.
• Experienced management and alignment with shareholders. Reciprocity has a strong leadership team throughout its organization. GCN is led by experienced professionals with senior management experience at leading companies including Time Inc, Red Bull, Amazon / Twitch, Fox Sports, UFC, and Learfield Sports. Following completion of the proposed Transaction, Reciprocity shareholders will be well aligned with ownership of approximately 40% of GameSquare on a fully diluted pro-forma basis. Management of Reciprocity, through the earn out provisions and compensation based upon financial performance, will be aligned with shareholders of GameSquare.