- Fiscal 2021 record revenue of $11.38 million, year-over-year increase of 2818%
- Q4 2021 record revenue of $6.24 million (unaudited), representing year-over-year increase of 3018%
- Financial results do not include recently completed acquisitions of Frenzy and GameAddik (subsequent events)
VANCOUVER, British Columbia, Feb. 23, 2022 — 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 audited annual consolidated financial statements (the “Financial Statements”) and related Management Discussion and Analysis (the “MD&A”) for the 12 months ended October 31, 2021 (“Fiscal 2021”) 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.
Financial Highlights:
- Revenue of $6.24 million for the three months ended October 31, 2021 (unaudited), representing a 3018% increase from revenue for the three months ended October 31, 2020 of $0.20 million (unaudited).
- Annual consolidated revenue in Fiscal 2021 of $11.38 million, representing a 2818% increase from annual consolidated revenue for the 12 months ended October 31, 2020 (“Fiscal 2020”) of $0.39 million.
- Annual gross profit in Fiscal 2021 of $1.15 million, representing a 195% increase from annual gross profit in Fiscal 2020 of $0.39 million.
- Adjusted EBITDA¹ loss of $3.50 million in Fiscal 2021, compared to adjusted EBITDA loss of $2.04 million in Fiscal 2020.
- Total assets as at October 31, 2021 of $15.94 million, representing a 1793% increase from total assets as at October 31, 2020 of $0.84 million.
- Cash balance as at October 31, 2021 of $4.83 million compared to $0.55 million as at October 31, 2020.
¹ Adjusted EBITDA is a non-IFRS measure. Refer to “Non-IFRS Measures” at the end of this press release.
“We are proud to publish a record year, with quadruple-digit revenue growth and financial performance that highlights the growth our company is experiencing. We are entering 2022 with momentum,” said Konrad Wasiela, CEO of ESE. “ESE generated record quarterly revenues in the fourth quarter of 2021, led by record organic growth in existing assets, our ability to acquire and integrate assets, our ability to attract and retain clients for expanded contracts, and ultimately our ability to deliver 360 esports and gaming technology and services for gaming publishers and developers. With the subsequent events of acquiring Frenzy and GameAddik, we anticipate strong continued quarterly growth.”
“Q4 2021 revenue growth was strong at 3018% year-over-year, but it is important to note these figures do not include the recently completed acquisitions of Frenzy and GameAddik. We anticipate continued growth from organic business plus these new key assets. As we move into 2022, we have an increased focus on revenue and gross profit margin expansion,” said Rob Kang, ESE’s Chief Financial Officer. “Increased revenues and higher gross margins are key to reaching our goals, and we believe our investments in operations will drive performance in the quarters ahead.”
Q4 2021 Operational Highlights:
- Completion of the acquisition of Auto Simulation Ltd. DBA Digital Motorsports, an Ireland-based provider of advanced simulation racing infrastructure, technology and support.
- Entry into a binding share purchase agreement to acquire Frenzy sp. z.o.o., a European esports media and technology company (“Frenzy”).
- Launch of a set of non-fungible tokens (NFTs) in collaboration with its esports team, K1CK esports, and Bitcoin Vault.
Subsequent Events:
- On November 12, 2021, the Company completed the acquisition of 100% of the issued and outstanding shares of Frenzy, a European esports media and technology company.
- On February 14, 2022, the Company completed the acquisition of 100% of the issued and outstanding shares of 9327-7358 Quebec Inc. DBA GameAddik (“GameAddik”), a Canadian technology company focused on gaming and esports.
The following table presents a reconciliation of Net income (loss) to Adjusted EBITDA for Fiscal 2021 and Fiscal 2020:
| Year ended October 31, 2021 | Year ended October 31, 2020 | |
| (In Canadian dollars) | $ | $ |
| Net loss for the year | (18,663,912) | (3,802,333) |
| Provision for income taxes | 614 | – |
| Depreciation | 38,974 | – |
| Commissions | 54,861 | – |
| Finder’s fees and stamp duty for acquisitions | 1,669,923 | – |
| Share-based payments | 9,630,008 | 150,651 |
| Interest | 11,459 | – |
| Impairment of K1CK assets | 207,500 | – |
| Impairment of WPG assets | 3,548,313 | – |
| Listing Cost | – | 1,600,287 |
| Foreign exchange (gain) loss | 2,142 | 14,150 |
| Adjusted EBITDA¹ | (3,500,118) | (2,037,245) |
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 audited results which were released on February 23, 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