Announcement • Jun 25

East Side Games Group Inc. And Truly Social Games, LLC Announces Settlement Of Litigation

East Side Games Group Inc. and Truly Social Games, LLC jointly announced that they have reached a settlement resolving all claims and counterclaims between the parties, including those arising from the Membership Interest Purchase Agreement dated June 16, 2021 and related litigation. Under the terms of the Settlement, ESGG will pay TSG a total of CAD 3,000,000 in cash, CAD 1,000,000 of which will be payable within thirty days of the Settlement date, and the remaining balance will be payable by way of four equal payments over the course of two years. As part of the Settlement, ESGG will also issue to TSG 3M warrants. Each warrant is exercisable into common shares of ESGG at a price of $0.14 per share, expiring November 24, 2028, and will contain standard adjustment provisions in the event of any changes to the ESGG's capital structure (e.g., share consolidations, share splits). The exercise price represents a premium of 55.6% to the market price of ESGG's common shares on the TSX as at May 23, 2026 (being $0.09/share), when the Settlement terms were confirmed. The warrants and the underlying shares will be subject to a statutory four month hold period. As at the date of this news release, the shares underlying the warrants are equivalent to 3.90% of the issued and outstanding common shares of ESGG. TSG does not currently hold any common shares of ESGG. As such, it is not expected that the issuance of the warrants, nor the Settlement terms as a whole, will have any material effect on the control of ESGG. As the TSX does not generally allow for the issuance of warrants on their own, Section 607 of the TSX Company Manual requires prior shareholder approval in such instances. ESGG has obtained written consent from Jason Bailey, ESGG's CEO and a director, as well as Derek Lew, a director, in support of the warrant issuance and the settlement terms. Collectively, Messrs. Bailey and Lew hold more than 50% of ESGG's outstanding common shares as at the date of this press release. ESGG anticipates that the warrants will be issued on or before June 30, 2026, subject to acceptance by the TSX. ESGG has also agreed under the Settlement to enter into a royalty agreement with TSG with respect to one of ESGG's games (the "Game"), pursuant to which ESGG will pay TSG a royalty of 8% of the gross revenues generated by the Game (subject to a cap of $15 million) and to sell its equity interests in TSG back to TSG for a nominal amount. The trial set to commence on May 25, 2026, was adjourned generally, and a consent dismissal order will be entered when all of the terms of the settlement are fulfilled.

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