East Side Games Group Inc. — Capital/Financing Update 2021

Jan 25, 2021

==> picture [132 x 31] intentionally omitted <==

LEAF MOBILE INC.

Public Offering of Subscription Receipts (the “Offering”)

January 25, 2021

A (final) short form prospectus containing important information relating to the securities described in this document has been filed with the securities regulatory authorities in each of the provinces of Canada, other than Quebec. A copy of the prospectus is required to be delivered with this document Copies of the prospectus may be obtained from Eight Capital at ecm@viiicapital.com.

This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the final short form prospectus and any amendment, for disclosure of those facts, especially risk factors relating to the offered securities, before making an investment decision.

Issuer: LEAF Mobile Inc. (the “ Company ”) Issue: 88,888,888 subscription receipts of the Company (the “ Subscription Receipts ”), with each Subscription Receipt entitling the holder thereof to receive one common share of the Company a (“ Share ”) upon satisfaction of the Escrow Release Conditions (as defined below). Issue Price: $0.225 per Subscription Receipt (“ Issue Price ”) Issue Size: $20,000,000 Agents’ Option: The Company has granted the Agents an option to offer for sale up to an additional 15% of the Subscription Receipts (or, if exercised following the satisfaction of the Escrow Release Conditions, 15% of the Shares underlying the Subscription Receipts), at the Issue Price, exercisable in whole or in part at any time for a period of 30 days after and including the Closing Date. Use of Proceeds: The net proceeds of the Offering will be used to fund the cash component of the consideration to be paid by the Company in connection with its acquisition of Eastside Games Inc. (“ Eastside Games ”), as described in greater detail below. Acquisition: On October 31, 2020, the Company entered into a share purchase agreement to acquire all of the securities of Eastside Games (the “ Acquisition ”), in ex`change for consideration of $150,000,000 (the “ Purchase Price ”). On November 30, 2020, the Company amended payment terms to be comprised of $10,000,000 in cash, 444,444,444 Shares of the Company at a deemed price of $0.225 per share, and $40,000,000 in contingent consideration, as described in greater detail below.

The Company expects to complete the Acquisition on or about February 5, 2021.

9470075.1

Contingent Consideration:

The contingent consideration of $40,000,000 shall be payable as follows:

• a) In the twelve month period following Closing, if the Company receives gross revenue of $100,000,000 on a consolidated basis, the ESG Securityholders will receive an additional $10,000,000 in cash, and an additional $10,000,000 in cash and/or LEAF Shares as directed by Jason Bailey, as representative of the ESG Securityholders, to a maximum of 44,444,444 LEAF); and

• b) In the subsequent twelve month period, if the Company receives gross revenue of $150,000,000 on a consolidated basis, the ESG Securityholders will receive an additional $10,000,000 in cash, and an additional $10,000,000 in cash and/or LEAF Shares as directed by Jason Bailey, as representative of the ESG Securityholders, to a maximum of 44,444,444 LEAF Shares.

Escrow:

The gross proceeds of the Offering, net of 50% of the cash commission payable to the Agents and the reasonable costs and expenses of the Agents and their counsel (the “ Escrowed Funds ”), shall be deposited in escrow on the Closing Date. The Escrowed Funds will be released from escrow to the Company immediately prior to the closing of the Acquisition and the Agents’ sole satisfaction of the following conditions (the “ Escrow Release Conditions ”):

• (i) The completion or satisfaction of all conditions precedent (other than the release of the Escrowed Funds) to the Acquisition, including all necessary shareholder approvals;

• (ii) The receipt by LEAF of the conditional approval of the TSX Venture Exchange of the Acquisition and the Offering, and the conditional approval of the Toronto Stock Exchange of the listing of the LEAF Shares; and

• (iii) The delivery of a joint notice from Leaf and the Co-Lead Agents, on behalf of the Agents, to the Escrow Agent confirming that the conditions set forth in (i) and (ii) above have been met or waived.

In the event that the Escrow Release Conditions are not satisfied on or before the date that is 30 days following the Closing Date (the “ Termination Time ”), the Escrowed Funds together with accrued interest earned thereon will be returned to the holders of the Subscription Receipts and the Subscription Receipts will be cancelled. To the extent that the Escrowed Funds are insufficient to refund 100% of the purchase price of the Subscription Receipts to the holders thereof, the Company shall be responsible for any shortfall.

Form of Offering:

Form of Agency:

Marketed deal on a best efforts basis, subject to termination clauses including “due diligence” out, “material adverse change” out, “disaster” out, “breach” out and “market” out clauses commencing upon acceptance of this offer and terminating on the Closing Date.

Public offering in all provinces of Canada, other than Quebec, by way of short form prospectus.

Private placement in the United States pursuant to exemptions from the registration requirements under Regulation D of the U.S. Securities Act of 1933.

The Offering will also be made available to offshore investors pursuant to relevant prospectus or registration exemptions in accordance with applicable laws.

9470075.1

Listing:

The Company’s Shares are listed for trading on the TSX Venture Exchange. Since the announcement by the Company of the Acquisition, trading of the Shares on the Exchange has been halted and the Company expects trading to remain halted pending the completion of the Acquisition.

The Company has received conditional approval of the Toronto Stock Exchange for listing of the Shares following the closing of the Acquisition under the symbol “LEAF”.

Eligibility:

Lock-Up Arrangements:

The Subscription Receipts will be qualified investments under the Income Tax Act (Canada) for registered accounts.

In connection with the completion of the Offering, each of the proposed officers and directors of the Company following the closing of the Acquisition (the “ D&O Locked-Up Shareholders ”), along with each of the shareholders of Eastside Games (the “ ESG Locked-Up Shareholders ” and, together with the D&O Locked-Up Shareholders, the “ Locked-Up Shareholders ”) have agreed that he or she will not, directly or indirectly, without the prior written consent of Eight Capital, on behalf of the Agents, issue, offer or sell or grant any option, warrant or other right to purchase or agree to issue or sell or otherwise lend, transfer, assign or dispose of (i) in the case of the D&O Locked-Up Shareholders, any of the Company’s equity securities, or other securities convertible or exchangeable into or otherwise exercisable into the Company’s equity securities; and (ii) in the case of the ESG Locked-Up Shareholders, any of the Shares issued in connection with the Acquisition or any existing Shares, or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such equity securities, or agree or publicly announce any intention to do any of the foregoing for a period commencing on the Closing Date and ending 6 months following the Closing Date, in the case of the D&O LockedUp Shareholders, and ending 12 months following the Closing Date, in the case of the ESG Locked-Up Shareholders (the “ Lock-Up Agreements ”).

Pursuant to the terms of the ESG Lock-Up Agreements, the ESG Locked-Up Shareholders will have the right to sell, grant, secure, pledge or otherwise transfer, dispose of or monetize, in any manner contemplated above (i) up to one third of their Shares as of 12 months after the Closing Date; (ii) up to two thirds of their Shares as of 24 months after the Closing Date; and (iii) all of their Shares as of 36 months after the Closing Date.

A total of 489,854,166 Shares held by ESG Locked-Up Shareholders will be subject to the Lock-Up Agreements, and a total of 49,997,778 Shares held by the D&O Locked-Up Shareholders will be subject to the Lock-Up Agreements, for an aggregate total of 539,851,944 Shares subject to Lock-Up Agreements (the “ Locked-Up Shares ”), representing approximately 81.53% of the aggregate amount of issued and outstanding Shares, excluding those issuable to purchasers of Subscription Receipts pursuant to the Offering.

In addition to the Locked-Up Shares, 78,675,000 Shares held by non-insiders of the Resulting Issuer are subject to TSX-V escrow in connection with the Company’s Qualifying Transaction completed April 17, 2020 (the “ Escrowed Shares ”). The Escrowed Shares will be released gradually, with the next escrow release date being April 17, 2021, and the final escrow release date being April 17, 2023.

On a combined basis, the Locked-Up Shares and the Escrowed Shares will represent 93.41% of the aggregate amount of issued and outstanding Shares, excluding those issuable to purchasers of Subscription Receipts pursuant to the Offering.

Agents:

Eight Capital and Haywood Securities Inc., as co-lead agents, together with a syndicate including Paradigm Capital Inc. and Scotia Capital Inc.

9470075.1

Commission: 6% cash commission and that number of compensation warrants equal to 6% of the number of Subscription Receipts sold pursuant to the Offering. Each compensation warrant will be exercisable into one Share at the Issue Price for a period of 24 months following the Closing Date. Closing Date: On or about February 4, 2021 (the “ Closing Date ”)

9470075.1