ESE Announces Letter of Intent for Accretive Sale of Digital Motorsports and Frenzy for $41M CAD

VANCOUVER, BC / ACCESSWIRE / March 29, 2023 / ESE Entertainment Inc. (TSXV:ESE)(OTCQX:ENTEF) ("ESE" or the "Company"), a gaming and esports company that provides a range of services to leading video game developers and publishers, is pleased to announce that it has entered into a non-binding letter of intent (the "LOI"), dated March 28, 2023, with a U.S. special purpose acquisition company (SPAC) (the "Purchaser") and a gaming media company ("GamingMediaCo") with key operations in Latin America, contemplating the acquisition (the "Transaction") of ESE's wholly-owned subsidiaries, Auto Simulation Limited dba Digital Motorsports ("DMS") and Frenzy sp. z.o.o. ("Frenzy") alongside Purchaser's acquisition of GamingMediaCo. The Purchaser is a NASDAQ listed company with over CAD $130 million in cash and cash equivalents in its treasury and in trust as of its most recent filings.

The LOI contemplates the Transaction being completed by way of an amalgamation, merger, or other business combination among the Purchaser, ESE, GamingMediaCo, DMS and Frenzy, although the final structure of the Transaction has not yet been finalized and remains subject to the receipt of structuring advice by the parties. The issuer resulting from the Transaction (the "Resulting Issuer") is expected to trade on the NASDAQ and will continue the operation of the existing businesses of DMS and Frenzy. The consideration for the acquisition of DMS and Frenzy is currently anticipated to be paid in common shares of the Resulting Issuer valued at CAD$41 million. Further, ESE would be entitled to additional common shares of the Resulting Issuer upon the Resulting Issuer achieving certain milestones related to the Resulting Issuer's share performance on the NASDAQ.

The completion of the Transaction remains subject to a number of conditions including satisfactory due diligence, the receipt of structuring advice by the parties, approval of the board of directors of each of the parties, entry into a binding agreement, the receipt of all necessary regulatory approvals, including approval of the TSX Venture Exchange and the NASDAQ, and other conditions customary to transactions of this nature. The Transaction is at arm's length and, as currently contemplated, no finder's fees will be paid thereon. There can be no assurance that the Transaction will be completed as proposed or at all.