ESE Entertainment Reports Second Quarter 2022 Results

• Record quarterly revenue of $15.0 million, year-over-year increase of 1,994%
  
• Record gross profit of $3.8 million, year-over-year increase of 2,748%
• Record adjusted EBITDA1 of $884,751
  

VANCOUVER, British Columbia, June 16, 2022 (GLOBE NEWSWIRE) -- ESE Entertainment Inc. (“ESE” or the “Company”) (TSXV: ESE) (OTCQB: ENTEF), a gaming and esports company that provides a range of services to leading video game developers and publishers, is pleased to announce that is has filed its unaudited condensed interim consolidated financial statements (the “Financial Statements”) and related management’s discussion and analysis (the “MD&A”) for the three months ended April 30, 2022 (“Q2 2022”) the highlights of which are presented in this news release. The Financial Statements and MD&A are available on www.sedar.com and on the Company’s website.

Second Quarter 2022 Financial and Operating Highlights:

• Revenue of $15.00 million for Q2 2022, representing a 1,994% increase from revenue for the three months ended April 30, 2021 of $0.72 million.
• Gross profit of $3.82 million for Q2 2022, representing a 2,748% increase from gross profit in Q2 2021 of $0.13 million.
• Adjusted EBITDA1 of $884,751 in Q2 2022, compared to adjusted EBITDA loss of ($832,195) in Q2 2021.
• Total assets as at April 30, 2022 of $38.06 million, compared to total assets as at April 30, 2021 of $15.94 million.

“We are excited to share our Q2 2022 financial performance with shareholders, which is our seventh straight quarter in a row of record growth. This was the first quarter that included the financial performance of our most recent acquisition, Gameaddik. The combined operations have proven to deliver record revenue growth, improve margins, and reach a critical milestone of achieving positive adjusted EBITDA for the first time in company history. This performance is a testament to our entire team, which continues to execute at the highest level and deliver on our business plan and growth strategy. As we start to unlock synergies of the combined operations, we are setting our sights on continued organic growth,” stated Konrad Wasiela, CEO of ESE.

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1 Adjusted EBITDA is a non-IFRS measure. Refer to “Non-IFRS Measures” at the end of this press release.

Q2 2022 Operational Highlights:

• Announced a partnership agreement with Opera, one of the world’s major browser developers and a leading internet consumer brand. The agreement focuses on providing advertising services in connection with the promotion of Opera GX, Opera’s gamer-oriented browser
• Completed the acquisition of 9327-7358 Quebec Inc. DBA Gameaddik, adding new technology to ESE’s global 360 esports business
• Appointed the Founder and CEO of Gameaddik, Eric Jodoin, as the Chief Operating Officer (COO) of ESE Entertainment
• Announced that the Company’s subsidiary, Digital Motorsports signed a reseller agreement with Corsair Gaming – a leading global developer and manufacturer of high-performance gaming gear
• Announced that its media division, Frenzy, is launching a new broadcast studio in Warsaw, Poland. The first project produced from the new studio will be VRL East: Surge, a competition in the game VALORANT carried out in 20 countries
• Announced that it has started a new division of its business focused on expanding its existing business products and services to internet gambling companies
• Signed a Partnership Agreement with Waveform Entertainment Inc., a highly regarded esports entertainment company with clients that include ESL Gaming (recently merged and sold as ESL Faceit Group to Savvy Gaming Group), DreamHack, Ubisoft, Redbull, and more
• Announced a Partnership Agreement with Cowana GmbH (“Cowana”), a highly regarded European esports entertainment company with clients that include Bethesda Softworks, Capcom, NVIDIA, BENQ, and more

The following table presents a reconciliation of Net income (loss) to Adjusted EBITDA for the three months ended April 30, 2022, and the three months ended April 30, 2021:

1 Adjusted EBITDA is a non-IFRS measure. Refer to “Non-IFRS Measures” at the end of this press release.

The financial and operating results included in this news release are based on the Financial Statements and the MD&A, which were released on June 16, 2022. It is only in the context of the fulsome information and disclosures contained in the Financial Statements and MD&A that an investor can properly analyze this information. The Financial Statements and MD&A will be published under the Company’s profile on SEDAR at www.sedar.com.

All amounts are in Canadian dollars.

ESE Entertainment Inc.

Konrad Wasiela
Chief Executive Officer and Director

About ESE Entertainment Inc.
ESE is a Europe based entertainment and technology company focused on gaming and esports. The Company provides a range of services to leading video game developers, publishers, and brands by providing technology, infrastructure, and fan engagement services internationally. ESE also operates its own ecommerce channels, esports teams, and gaming leagues. In addition to the Company’s organic growth opportunities, the Company is considering selective acquisitions that align with its objective of becoming a dominant global player in esports technology and infrastructure. | www.esegaming.com

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

This news release contains certain statements that may constitute forward-looking information under applicable securities laws. All statements, other than those of historical fact, which address activities, events, outcomes, results, developments, performance or achievements that ESE anticipates or expects may or will occur in the future (in whole or in part) should be considered forward-looking information. Such information may involve, but is not limited to, statements with respect to the Company’s ability to unlock and benefit from synergies from its acquisitions and the Company’s continued growth. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results "may", "could", "would", "might" or "will" (or other variations of the forgoing) be taken, occur, be achieved, or come to pass. Forward-looking information is based on currently available competitive, financial and economic data and operating plans, strategies or beliefs as of the date of this news release, but involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of ESE to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors may be based on information currently available to ESE, including information obtained from third-party industry analysts and other third-party sources, and are based on management's current expectations or beliefs regarding future growth, results of operations, future capital (including the amount, nature and sources of funding thereof) and expenditures. Any and all forward-looking information contained in this press release is expressly qualified by this cautionary statement. Trading in the securities of ESE should be considered highly speculative.

This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about ESE’s prospective results of operations, revenues and margins and components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraph. FOFI contained in this document was approved by management as of the date of this document and was provided for the purpose of providing further information about ESE’s future business operations. ESE disclaims any intention or obligation to update or revise any FOFI contained in this document, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein.

NON-IFRS MEASURES

This press release includes references to adjusted EBITDA. Adjusted EBITDA is a non-IFRS financial measure and is defined by the Company as net income or loss before income taxes, depreciation, commissions, finder's fees and stamp duty for acquisitions, share-based payments, interest, impairment of assets, accretion, and foreign exchange gain or loss. We believe that adjusted EBITDA is a useful measure of financial performance because it provides an indication of the Company’s ability to capitalize on growth opportunities in a cost-effective manner, finance its ongoing operations and service its financial obligations.

This non-IFRS financial measure is not an earnings or cash flow measure recognized by IFRS and does not have a standardized meaning prescribed by IFRS. Our method of calculating such a financial measure may differ from the methods used by other issuers and, accordingly, our definition of this non-IFRS financial measure may not be comparable to similar measures presented by other issuers. Investors are cautioned that non-IFRS financial measures should not be construed as an alternative to net income determined in accordance with IFRS as indicators of our performance or to cash flows from operating activities as measures of liquidity and cash flows.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE ESE Entertainment Inc.

For further information about ESE, please contact:
Apollo Shareholder Relations
investors@esegaming.com
+1 604-259-7540

ESE ENTERTAINMENT INC.
Condensed Interim Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)
(Unaudited - Prepared by Management)

ESE ENTERTAINMENT INC.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
For the three and six months ended April 30, 2022 and 2021
(Expressed in Canadian Dollars)
(Unaudited - Prepared by Management)

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