TGS Esports : Quarterly Financials

TGS Esports Inc. (formerly Brockton Ventures Inc.) Unaudited Interim Condensed Consolidated Financial Statements For the three and six months ended December 31, 2021 and 2020

(Expressed in Canadian dollars)

In accordance with National Instrument 51-102, the Company discloses that its auditors have not reviewed these unaudited condensed consolidated interim financial statements.

Interim Condensed Consolidated Statements of Financial Position Expressed in Canadian dollars

As AtAssets Current assets

Cash and cash equivalents Trade and other receivables Prepaids

Deposits Inventories

Total current assets

Non-current assets

Long-term investments Property and equipment Intangible asset

Total non-current assets Total assets

Liabilities and shareholders' deficit Current liabilities

Accounts payable and accrued liabilities Deferred revenue

Sales tax payable Lease liability Loans payable Promissory note

Convertible promissory notes

Total current liabilities

Non-current liabilities

Lease liability

Loans payable

Total current liabilities Total liabilities

Shareholders' Deficit

Share capital Reserve

Obligation to issue shares Accumulated deficit

Total shareholders' deficit

Total liabilities and shareholders' deficit

Nature and continuance of operation (Note 1)

Commitments (Note 9)

Subsequent events (Note 20)

Notes

December 31, 2021

(Unaudited)

5 6

$

92,303 $ 851,376

165,042 199,072

67,553 58,268

2,365 2,365

13,417 13,417

340,680

8 11 12

68,000 68,000

215,803 302,118

777,837 777,837

1,061,640

$

1,402,320

13

$

993,399 $ 788,283

92,899 46,575

10 14 7,16 15

11,845 208,532 2,052

6,000 15,000

478,941 478,941

1,793,668

860,593 877,932

60,742 56,653

921,335 2,715,003

16

18,078,940 17,841,277

2,073,669 2,058,416

61,300 (21,526,593) (1,312,684)

$

1,402,320

Approved and authorized for issuance by the board of directors on March 1, 2022: /s/ "Spiro Khouri

$

$

/s/ "Bryan Loree"

June 30, 2021

1,124,498

1,147,955

2,272,453

1,609,880

934,585 2,544,465

61,300 (20,233,005)

(272,012)

2,272,453

Director

Director

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

- 281,080 -

2

Interim Condensed Consolidated Statements of Loss and Comprehensive Loss - Unaudited Expressed in Canadian dollars, except number of common shares

Revenue

Tournament income

Sponsorship income

Cost of sales

Tournament expenses

Gross margin

Operating expenses

Advertising and promotion

Amortization

Bad debts

Bank charges

Consulting fees

Insurance

Interest expense

Licenses and subscriptions

Office and miscellaneous

Professional fees

Rent expense

Salaries and wages

Shipping, freight, and delivery

Software development

Stock-based compensation

Telephone and internet

Transfer agent and filing fees

Travel expense

Total expenses

Three Months

Ended December 31,NotesThree Months

Ended December 31,

2021

Six Months

Ended December 31,

2020

Ended December 31,

2021

$

• 20,523 $

• 20,176 $

122,156 $ 20,108

110,347 130,870

130,700 150,876

307,420 139,616

429,576

142,560

(11,690)

28,804 122,072

231,121 198,455

23,142

44,349 -

2,742

38,088 -

17

104,425

38,173 -

1,238

105,729

2,314

43,010 -

17,110

77,840

5,425

557,147

63 -

15,253

214 -

1,038

62,132 224,294

86,598 74,715

- 1,302

7,377 62,808

112,022 108,403

- 71,823

75,520 -

15,181

176,633

3,657

258,392

274 -

886,113 - -

2,263

87,004 80,593

517 39,327

39,753 144,465

189,527 176,897

12,625 11,132

1,274,399 258,623

1,476

37,990

15,253

214

3,957

1,038

825,421

1,669,912

1,931,882

Other items

Extraordinary gain

Income from government grant

Interest income

Transaction expense

Loss and comprehensive loss

18

-

- (318,744)

- -

(192,996) - (192,996)

(73,484)

(439,839) (93,194)

(60) - (1,760)

-

-$

(518,367)

$

(1,281,300)

$

(1,293,588)

$

Loss per share - basic and diluted Weighted average shares outstanding

$

-

$

(0.02)

$

(0.01)

$

138,027,624

74,686,138

137,504,572

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Six Months

2020

159,724

46,800 112,924

696 - 1,610,081 - - 2,263 2,867,062

805,343

(3,271,531)

(0.05)

66,080,552

3

TGS Esports Inc. (formerly Brockton Ventures Inc.)

Interim Condensed Consolidated Statements of Changes in Shareholders' Deficiency Expressed in Canadian dollars, expect number of common shares

Balance, June 30, 2020

Share exchange ratio pursuant to amalgamation

Brockton common shares exchanged on amalgamation

Fair value of Brockton options and warrants outstanding

Shares issued pursuant to private placement

Share issuance cost

Fair value of warrants issued

Fair value of stock options granted

Shares issued on warrant exercise

Shares issued for services

Common shares exchanged on acquisition of Pepper

Shares issued for obligation settlement

Shares issued on acquisition of Volcanic

Fair value of Pepper stock options

Fair value of Pepper warrants

Loss for the period

Balance, December 31, 2020

Shares IssuedShare Capital

42,803,792 4,649,039 4,550,000 -

15,830,325 - - -

$

2,993,961 - 455,000 - 1,583,033

(141,113)

- -2,120,000 314,500

831,309 90,567

43,385,664 6,073,993

142,857 20,000

179,937 40,000

- - -

114,492,923

- - -

Reserve

$

45,776 - - 48,621 - 58,973 317,771 723,968 - - - - - 539,898 346,215 -

$

$

11,429,941

$

2,081,222

$

Balance, June 30, 2021

Shares issued for services

Fair value of stock options granted

Loss for the year

Balance, December 31, 2021

• 136,475,402 $

1,861,669

- -138,337,071

17,841,277

237,663 - -

$

2,058,416

$

- 15,253 -

$

18,078,940

$

2,073,669

$

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Obligation to issue sharesDeficit

- - - - - - - - - - - - 200,000 - - -

$

(5,835,219)

- - - - - - - - - - - - - -

(3,271,531)

200,000

$

(9,106,750)

61,300 - - -

$

(20,233,005)

- -

(1,293,588)

61,300

$

(21,526,593)

Total

$

(2,795,482)

- 455,000 48,621 1,583,033

(82,140)

317,771 723,968 314,500 90,567 6,073,993

20,000 240,000 539,898 346,215

(3,271,531)

$

4,604,413

$

(272,012)

237,663 15,253

(1,293,588)

$

(1,312,684)

4

TGS Esports Inc. (formerly Brockton Ventures Inc.)

Interim Condensed Consolidated Statements of Cash Flows Expressed in Canadian dollars

For the three months endedCash flows from operating activities

Loss for the year

Non-cash items

Amortization Interest expense

Income from government grant Obligation to issue share for acquisitions Shares issued for services

Stock-based compensation Transaction expenseChange in working capital accounts:

Trade and other receivables Inventory

Prepaids

Accounts payable and accrued liabilities Deferred revenue

Sales tax payable

Total cash outflows from operating activitiesCash flows from investing activities

Long-term investments

Property, plant, and equipment Intangible assets

Total cash outflows from investing activitiesCash flows from financing activities

Changes in right of use asset Changes in lease obligation Changes in promissory notes Changes in loans payable Proceeds from share issuance

Change in reserve

Total cash inflows provided by financing activities

Three Months

Ended December 31, 2021

Three Months

Ended December 31, 2020

Six Months

Ended December 31, 2021

$

• (518,367) $

44,349 162

- - 103,888 15,253 -254,289 -

1

61,081 -

(52)

(1,281,300)

$

(1,293,588)

$

55,568 65,803

86,598 74,715

30,911 102,908

(73,484)

-200,000 - 200,000

110,567 886,113 -

(73,186)

14

71,234

(256,306)

- -207,775 110,567

15,253 -34,030 -

(9,285)

205,116

46,324

11,845

$

(39,396)

$

(294,977)

$

(665,021)

$

- (444)

-(37,000) (51,739) (53,534)

- (37,000)

(1,306) (51,739)

-$

(444)

$

(142,273)

$

(1,306)

$

- (45,781)

- 4,127 -

-(11,719)

68,372

64,226

31,074

314,500

-

-(89,887) 110,191

(9,000) 64,391

6,141 -

-$

(41,654)

$

466,453

$

(92,746)

$

Total change in cash

(81,494)

29,203

(759,073) 172,835

Cash and cash equivalent, beginning

173,797

197,362

851,376 53,730

Cash and cash equivalent, endingNon-cash transactions:

Equity portion of convertible promissory note Property and equipment purchase in accounts payable

$

92,303

$

226,565

$

92,303

$ $

$

-

(862)

$ $

45,776 5,320

$ $

- $ 45,776

(862) $ 5,320

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Six Months

Ended December 31, 2020

(3,271,531)

(93,194)

1,610,081 805,343

(142,496)

374

(25,172)

(1,012,910)

(19,710)

-(1,661,025)

401,466

312,727

(11,719)

(18,172) 1,756,420

(379,978)

1,521,133

226,565

5