The transaction will strengthen stability sheet, broaden the shareholder base, and help a refocused working technique
VANCOUVER, BC, Might 21, 2026 /CNW/ – East Aspect Video games Group (TSX: EAGR) (OTC: EAGRF) (the “Firm” or “ESGG“), Canada’s main free-to-play cellular recreation group, is happy to announce the closing of its beforehand introduced non-brokered personal placement of items of the Firm (the “Items“) for combination gross proceeds of $2.95 million (the “Providing“).
The Firm issued an combination of 26,896,816 Items at a value of $0.11 per Unit. Every Unit consists of 1 frequent share of the Firm and one frequent share buy warrant. Every warrant is exercisable to amass one frequent share of the Firm at a value of $0.14 per share till Might 12, 2029, topic to straightforward anti-dilution changes. The securities issued beneath the Providing are topic to a statutory maintain interval expiring on September 13, 2026, in accordance with relevant Canadian securities legal guidelines.
The Providing included participation from a bunch of recent strategic buyers alongside significant participation from present insiders, together with Derek Lew, a director of the Firm, who subscribed for $1.0 million, representing 9,090,909 Items, and Russell Ovans, a director of the Firm, who subscribed for $22,000, representing 200,000 Items.
The Firm intends to make use of the online proceeds of the Providing to repay indebtedness, fund working bills, and supply further common working capital. The transaction strengthens the Firm’s stability sheet, broadens its shareholder base, and supplies the monetary flexibility required to execute the strategic plan outlined within the Firm’s March 31, 2026 company replace. In reference to the closing of the Providing, the Firm is reaffirming its beforehand issued 2026 outlook of $50–$56 million in income and 15–18% A-EBITDA margins.
Jason Bailey, Govt Chairman and Chief Govt Officer of the Firm, commented:
“We’re excited to pursue the following chapter of East Aspect Video games Group with a brand new capital markets technique, a renewed stability sheet, further visionary shareholders, and a give attention to our worthwhile core portfolio. We need to thank our new and present shareholder base for his or her religion in us and our means to refocus, right-size and steer this firm right into a worthwhile 2026 and past. With our stability sheet repaired, our price construction right-sized, and our workforce targeted on our highest-margin franchises, we’re reaffirming our 2026 outlook and are assured in our means to ship on it.”
Strategic Rationale and Renewed Path Ahead
The Board of Administrators and administration have accomplished a complete evaluation of the Firm’s capital construction, working efficiency, and strategic route, constructing on the operational reset initiated in December 2025 and the 2026 outlook issued on March 31, 2026. The conclusions of that evaluation, along with the closing of the Providing, type the muse for the following chapter of ESGG. Early progress was mirrored within the Firm’s Q1 2026 outcomes, reported on Might 14, 2026, which demonstrated the deliberate trade-off of top-line progress for profitability and money self-discipline, with income of $12.5 million accompanied by A-EBITDA of $1.74 million, up $1.44 million from This fall 2025
The Firm’s share value efficiency has not mirrored the long-term potential of its idle IP franchises and proprietary GameKit® platform. Contributing components have included an over-leveraged stability sheet relative to trailing EBITDA, an over-extended improvement slate, and restricted engagement with the broader funding neighborhood.
The Providing, along with the strategic, operational, and capital markets initiatives described beneath, is meant to immediately deal with these points and reposition ESGG as a targeted, cash-generative, free-to-play cellular video games firm. The renewed Firm might be anchored by a confirmed portfolio of long-lived idle IP titles, supplemented by capital-light publishing partnerships, and underpinned by the monetary flexibility to pay down debt, return to optimistic A-EBITDA, and ship significant shareholder returns by way of 2026 and past.
Pillars of the Renewed Technique:
- Strengthened Stability Sheet: A portion of the online proceeds of the Providing is meant to be utilized to repay excellent indebtedness, materially lowering monetary danger, decreasing curiosity expense, and restoring covenant headroom. Along with the headcount and capital expenditure reductions accomplished in early 2026, that are anticipated to ship roughly $4 million in annualized working financial savings, the Firm enters the second half of 2026 with an improved monetary profile and a transparent path to additional debt discount.
- Execution of the Working Technique Introduced in March 2026: With the Providing closed, the Firm is healthier positioned to execute the working technique outlined in its March 31, 2026 company replace, together with (i) a refocused live-ops effort on the Firm’s highest-engagement idle IP franchises, together with The Workplace: By some means We Handle, RuPaul’s Drag Race Famous person (lately transitioned to the Firm’s inner Reside Ops workforce), and the newly launched Trailer Park Boys Match, (ii) a 30-day return-on-ad-spend self-discipline in consumer acquisition, (iii) the pivot to paid publishing partnerships and work-for-hire preparations that leverage the Firm’s proprietary GameKit® platform, and (iv) margin tailwinds from off-platform funds and Google’s revised platform price construction. Reflecting early progress on this technique, the Firm decreased consumer acquisition spend to $2.3 million in Q1 2026, down from $5.9 million in This fall 2025, whereas direct-to-consumer income grew to 11% of complete income, up from 8% in This fall 2025.
- Enhanced Capital Markets Engagement: With a refreshed shareholder base that now consists of new strategic buyers alongside significant insider participation, the Firm intends to increase its investor engagement program by way of extra common communication with present and potential shareholders, refreshed disclosure practices, broader participation in gaming and small-cap investor conferences, and renewed engagement with the analyst and broader funding neighborhood.
Additional Particulars of the Providing
The Providing, together with the participation by insiders, was reviewed and authorised by the impartial members of the Board of Administrators. Any director taking part within the Providing recused himself from the Board’s consideration and approval of issues referring to his participation.
In reference to the Providing, the Firm paid finder’s charges consisting of 1,360,000 frequent shares and 1,250,000 dealer warrants to Haywood Securities Inc. Every dealer warrant entitles the holder to amass one frequent share of the Firm at a value of $0.14 per share till Might 8, 2029.
Resignation of Director
The Firm additionally declares that Jeremy Pierce has stepped down from the Board of Administrators, efficient Might 19, 2026, for private causes. The Firm thanks him for his valued contributions and repair to ESGG and its shareholders. As a part of the Firm’s renewed strategic route, the Board is endeavor a refresh of its composition to align Board expertise and expertise with the following chapter of the Firm, and expects to announce further appointments sooner or later.
ABOUT EAST SIDE GAMES GROUP
ESGG is a frontrunner in free-to-play cellular gaming, thrilling gamers with unforgettable experiences that spark lifelong fandom. Fueled by an entrepreneurial spirit, we’re pushed by creativity, flawless execution, and a laser-focused technique. We develop and publish each unique and licensed IP titles, license our cutting-edge GameKit(s) platforms, and strategically purchase studios or video games to increase our household.
Headquartered in Vancouver with round 100 talent-dense workforce members, we function over a dozen titles beneath East Aspect Video games (“ESG“) and LDRLY (Applied sciences) Inc. (“LDRLY“). Collectively, we’re crafting, launching, and publishing cellular video games throughout our personal studios and an prolonged Sport Equipment accomplice network-reaching gamers on iOS and Android worldwide.
We energy our success by way of in-app purchases (“IAP“) — providing unique, game-enhancing digital objects — and in-game promoting. To continue to grow, we give attention to fascinating audiences, retaining them engaged, and unlocking thrilling new methods to monetize. We’ll drive this momentum by launching daring new titles, enriching our present lineup, innovating discovery, increasing into recent markets, and exploring new distribution platforms.
Further details about the Firm continues to be accessible beneath its authorized identify, East Aspect Video games Group Inc., at www.sedarplus.ca.
Cautionary Assertion Concerning Ahead-Wanting Data
This information launch incorporates forward-looking data and forward-looking statements throughout the which means of relevant Canadian securities legal guidelines. Ahead-looking data on this information launch consists of, however shouldn’t be restricted to, statements concerning the meant use of proceeds of the Providing, the reimbursement of indebtedness, the Firm’s strategic plan, the anticipated advantages of the Providing, the Firm’s capital allocation framework, proposed governance adjustments, investor relations initiatives, administration incentive alignment, the analysis of strategic alternate options, and the Firm’s expectations concerning future progress, profitability, monetary flexibility, and shareholder worth creation.
Ahead-looking data is predicated on the Firm’s present expectations, estimates, projections and assumptions as of the date of this information launch. Ahead-looking data is topic to identified and unknown dangers, uncertainties and different components which will trigger precise outcomes, efficiency or achievements to vary materially from these expressed or implied by such forward-looking data. These dangers and uncertainties embody, amongst others, dangers associated to the Firm’s means to execute its strategic plan, repay or restructure indebtedness, enhance working efficiency, full governance adjustments, understand the anticipated advantages of the Providing, preserve satisfactory working capital, and adjust to relevant regulatory and inventory change necessities.
Readers are cautioned to not place undue reliance on forward-looking data. Besides as required by relevant regulation, the Firm undertakes no obligation to replace or revise any forward-looking data, whether or not because of new data, future occasions or in any other case.
This information launch refers to “Adjusted EBITDA” or “A-EBITDA,” which is a non-IFRS monetary measure that doesn’t have any standardized which means prescribed by Worldwide Monetary Reporting Requirements (“IFRS“) and might not be corresponding to comparable measures offered by different issuers. A-EBITDA is outlined as internet earnings or loss earlier than curiosity, taxes, depreciation, and amortization, adjusted to exclude share-based compensation, overseas change good points and losses, restructuring and severance prices, impairment prices, good points and losses on disposal of belongings, transaction prices, and different objects that administration doesn’t take into account reflective of the Firm’s underlying working efficiency.
Administration makes use of A-EBITDA as a supplemental measure to judge the Firm’s working efficiency and believes it supplies helpful data to buyers as a result of it excludes objects that aren’t reflective of the Firm’s ongoing working outcomes. A-EBITDA shouldn’t be thought-about in isolation or as an alternative choice to measures of efficiency ready in accordance with IFRS, and needs to be learn together with the Firm’s consolidated monetary statements and administration’s dialogue and evaluation accessible on SEDAR+ at www.sedarplus.ca.
U.S. Securities Regulation Issues
This information launch doesn’t represent a proposal to promote or a solicitation of a proposal to purchase any securities in america. The securities described herein haven’t been and won’t be registered beneath america Securities Act of 1933, as amended, or any state securities legal guidelines, and might not be provided or offered inside america or to, or for the account or good thing about, U.S. individuals except registered beneath the U.S. Securities Act and relevant state securities legal guidelines or an exemption from such registration necessities is out there.
SOURCE East Aspect Video games Group Inc.
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