ESE Entertainment Provides Corporate Update - Seite 2

ESE aims to be capital efficient and to deliver shareholder value. The Company believes it has succeeded in this regard by delivering solid revenue growth on the approximately $5.9 million raised to date (prior to completion of the Offering). The newly injected net $7.8 million from the bought deal financing is expected to further improve capital stability, to support business growth, and to allow ESE to execute on its existing M&A pipeline.

ACQUISITIONS

To date, ESE has completed two acquisitions: K1CK in January 2021, and WPG in April 2021. The Company will continue to seek out accretive acquisitions, with a focus on identifying potential opportunities that can add revenue. ESE continued to set its sights on both organic and M&A growth with the following developments:

LOI signed to acquire Simulation Racing Company, Digital Motorsports

On May 13, 2021, ESE announced that it signed a Letter of Intent (“LOI”) to acquire Auto Simulation Ltd T/A Digital Motorsports (“Digital Motorsports” or “DMS”), an Irish company that provides infrastructure, technology, and support for esports across the globe – particularly in the simulation racing sector – working with some of the world’s most recognized brands. It also operates an ecommerce website at www.digitalmotorsports.com.

Digital Motorsports is an award-winning organization and one of the leading simulation racing companies worldwide, with demonstrated profitability and year-over-year revenue growth.

DMS is anticipated to strengthen our current digital motorsports business and expand our global footprint in the sector. We have identified several immediate synergistic growth opportunities between ESE and DMS. We are working towards completing the potential transaction and excited to work closely with DMS to execute a strategic growth strategy.

Acquisition Completion – World Performance Group

On April 12, 2021, ESE completed its acquisition of World Performance Group Ltd. (“WPG”), an esports gaming and infrastructure company. The highlights of this acquisition include the following:

• The completion of the transaction expanded ESE’s esports infrastructure services globally, bridging esports companies with their fans and customers.
• In 2020, WPG’s assets generated revenue in excess of $14,000,000.
• The transaction added WPG’s existing client base to ESE. Clients of WPG’s subsidiary, WPG Racing Solutions SRL, include one of the largest esports companies in the world, and one of the largest sports organizations.
• The acquisition is expected to deliver on core strategic priorities of increasing revenue, expanding tier-1 client base, strengthening technology stack, expanding operational geography, adding experienced executives to ESE’s management, and increasing platform scalability through WPG’s global staff.

ESE’s most recent consolidated quarterly financial results for the period ended April 30, 2021 only reflected revenues attributable to WPG from April 12 (the closing date) to April 30, 2021. WPG’s results of operations for the entire quarter ended July 31, 2021 will be reflected in ESE’s next quarterly consolidated financial statements.