Mr. Darren Cox reports

MILLENNIAL ESPORTS TAKES CONTROLLING STAKE IN FERRARI-PARTNERED RACING SIMULATOR COMPANY

Millennial Esports Corp. has continued its rapid expansion into the racing e-sports market by taking a 51-per-cent stake in the market-leading motorsport simulator manufacturer, Allinsports.

Founded in 2008 by ex-Formula 1 engineer Anton Stipinovich, Allinsports not only manufactures high-end racing simulator systems used by leading race teams across the globe, but also produce the eRacer e-sports simulator rigs that will be used in Millennial Esports' upcoming World's Fastest Gamer competition.

Millennial Esports will benefit from strong repeatable revenues from simulator sales and the development of new products as the racing e-sports market expands rapidly.

South African-born Mr. Stipinovich founded Allinsports in 2008. Most of his racing years were working for three high-profile Formula 1 racing teams including Ferrari, McLaren and Red Bull Racing as head of research and development. Over a period of 20 years he has accrued multiple Formula 1 world championships and more than 80 race wins with these top-level race teams.

Allinsports has been a technical partner to Ferrari Driver Academy since its conception in 2009 which trains future racing stars and supply bespoke Ferrari simulators to very exclusive clients.

Both the professional full-size and e-sports simulators are manufactured at Allinsports Italian manufacturing and development base in Maranello, Italy -- located only 2.3 miles from the Ferrari factory.

The company also operates a concept venue in Miami that explores the future of physical e-sports racing operations. The facility includes a full-size full-motion racing simulator that is used by professional teams and drivers plus an e-sports "garage" where drivers can also train and compete in on-line events.

Regular customers at the Miami facility include two-time Formula 1 world champion and two-time Indy 500 winner Emmerson Fittipaldi; Monaco Grand Prix, two-time Indy 500 and three-time Rolex 24 at Daytona winner Juan Pablo Montoya; and 12-time Formula 1 race winner Rubens Barrichello.

"Allinsports has played a key role in the development of racing simulators for the biggest teams in the world and we're very excited about further expanding into the world of e-sports with Millennial Esports," founder Mr. Stipinovich said.

"Our simulators provide teams with the opportunity to develop their cars and drivers at a fraction of the cost and risk involved in real-world testing. In the past 12 months we've taken our experience at that level and began developing products for the e-sports racing market.

"By joining forces with Millennial we'll be able to rapidly expand our presence in this sector and help introduce more gamers to the life-like experiences of sim racing. Our experience with Ferrari in helping develop young drivers is also key for us in helping Millennial Esports find new racing stars through programs like World's Fastest Gamer."

Helping bring Allinsports' F1 experience to the e-sports world is the company's technical director, Giacomo Debbia -- a 25-year veteran of the Ferrari Formula 1 team who heads the design team for all simulators.

Launched last year, the eRacer will be the official e-sports simulator for Millennial Esports' World's Fastest Gamer competition which will provide the winner with a real-world GT race drive in 2020 valued at more than $1-million (U.S.).

The popular high-end simulator is used by some of the world's leading drivers including Formula 1 stars Kimi Raikkonen and Charles Leclerc.

The addition of Allinsports to Millennial Esports broad e-sports portfolio is part of the company's recent global restructure and resurgence. The Millennial Esports group also includes the Barcelona-based e-sports and gaming data specialist Stream Hatchet plus the developer of the popular mobile racing games, F1 Mobile and Gear.Club -- Lyon-based Eden Games.

"Bringing Allinsports into the Millennial Esports family is a perfect fit as we now cover vast and broad revenue streams of the e-sports racing market -- from mobile gaming through to simulators used by Formula 1 teams," Millennial Esports president and chief executive officer Darren Cox said.

"We're excited to work with Anton and his team to further expand Allinsports and bring these life-like simulator experiences to more and more people with a key focus on e-sports which will bring more sales and revenue to the company."

Summary of transaction terms

The parties have entered into a binding letter of intent which provides that Millennial will acquire Allinsports for $6.25-million (U.S.) comprising the following: (i) total cash consideration of $2.6-million (U.S.) to be payable in three tranches on or prior to Nov. 30, 2019; and (ii) $3.65-million (U.S.) worth of common shares priced at the higher of: (A) the 20-day volume-weighted average price of the common shares on the TSX Venture Exchange prior to the signing of the LOI, or (B) the maximum permitted discount permitted by the rules of the TSX-V.

In addition, Millennial shall have the option to purchase the remaining 49 per cent of Allinsports beginning 18 months following the closing date and ending 24 months following the closing date for the lesser of: (i) 10 times earnings before interest, taxes, depreciation and amortization for fiscal 2020; or (ii) $20-million (U.S.) based on certain milestones.

The parties intend to enter into a definitive agreement and close the transaction on or prior to Sept. 30, 2019.

The closing of the transaction remains subject to the approval of the TSX-V.

Summary of Allinsports financial information

The included table is a summary of Allinsports' unaudited financial results for the years ending Dec. 31, 2018, and 2017.

                                  Year ended              Year ended
                       Dec. 31, 2018 (euros)   Dec. 31, 2017 (euros)

Total revenue                      2,000,301               1,866,983
Cost of sales                      1,893,865               1,783,264
Net income (loss)                     38,291                   8,058
Total assets                       2,110,295               2,195,532
Total liabilities                  2,006,872               2,092,212

About Millennial Esports Corp.

Millennial recently restructured its business and leadership team. Millennial now focuses exclusively on two areas -- e-sports racing and e-sports data provision. With publishing, intellectual property, content and data expertise in its portfolio, combined with a new board and management team, Millennial is ready to lead the rush to profitability in the e-sports industry.

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