ESE Announces Closing of Private Placement of Convertible Note Units

VANCOUVER, British Columbia, February 16, 2022 – ESE Entertainment Inc. (“ESE” or the “Company”) (TSXV: ESE) (OTCQB: ENTEF) is pleased to announce that it has closed (the “Closing”) a private placement offering (the “Offering”) of convertible note units of the Company (each, a “Unit”) for gross proceeds of $1,575,000 through the issuance of 1,575 Units at a price of $1,000 per Unit.

Pursuant to the Offering, each Unit is comprised of $1,000 in principal amount of an unsecured convertible note (each, a “Note“) and 250 common share purchase warrants of the Company (each, a “Warrant“). The Notes will mature on the date that is 24 months from the date of issuance (the “Maturity Date“) and shall bear interest at a simple rate of 10% per annum. Interest will be payable quarterly on the last business day of each quarter, commencing on March 31, 2022. The entire principal amount of the Notes may be converted at the election of the holder thereof into common shares in the capital of the Company (each, a “Common Share“) at a conversion price of $1.60 per Common Share (the “Conversion Price“) at any time prior to the Maturity Date. Subject to prior approval of the TSX Venture Exchange (the “Exchange”), the accrued but unpaid interest may also be converted into Common Shares at a conversion price equal to the greater of (i) $1.60 and (ii) the Market Price (as defined in the policies of the Exchange) as of the date of conversion.

Each Warrant will entitle the holder thereof to acquire one Common Share at a price of $1.60 per Common Share for a period of 24 months from the Closing, subject to the Company’s acceleration right. The Company will have the right to accelerate the expiry date of the Warrants to a date which is 30 days after the date on which a written notice is provided to the holders of Warrants if the daily volume weighted average trading price of the Common Shares is greater than $2.25 for any 15 consecutive trading days on the Exchange, subject to receipt of any required approvals from the Exchange.

In connection with the Private Placement, the Company paid Leede Jones Gable Inc. and Echelon Wealth Partners Inc. (the “Finders”) cash finders’ fees in aggregate of $37,560 and issued a total of 23,100 finder warrants to the Finders (the “Finder Warrants”). Each Finder Warrant is exercisable at $1.60 for a period of twenty-four (24) months from the date of issuance.

The Company intends to use the net proceeds from the Offering to fund acquisitions, business development, and for general working capital purposes.

Konrad Wasiela, CEO of ESE, commented, “We are pleased to execute this strategic financing, which is anticipated to provide extra strength in the months ahead. With the recent acquisitions completed, ESE business units are anticipating strong revenue and the ability to service debt. With shareholders in mind, we believe holding a strategic component of debt will minimize dilution and optimize our capital structure.”

The Units, Notes, Warrants, Finder Warrants, and any securities issuable upon conversion or exercise thereof, will be subject to a statutory hold period of four months and one day from the date of issuance of the Units. The Offering is subject to final approval by the Exchange.

The Units were offered and sold by private placement in Canada pursuant to exemptions from the prospectus requirements under National Instrument 45-106 – Prospectus Exemptions, and in certain other jurisdictions on a basis which does not require the qualification or registration of the Units, Notes, Warrants, or any underlying securities.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the U.S. Securities Act of 1933 (the “U.S. Securities Act“) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About ESE

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. |

Forward-Looking Statements

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 intended use of proceeds from the Offering; and the Company’s expectation of strong revenues. 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.

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:

Daniel Mogil, Investor Relations


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