Simplicity Esports and Gaming Company has entered into an exchange agreement with Diverted River Technology, LLC, pursuant to which Simplicity Esports agreed to acquire 100% of the membership interests of Diverted River in exchange for 80% of the issued and outstanding shares of Simplicity Esports’ common stock.
“I am thrilled with the prospect of working together with Zack Johnson and his incredible team. Their previous company, ggCircuit, had software and services that dominated the esports gaming center industry space. Their experience, relationships, and reputation provide a solid foundation to grow Diverted River into a powerhouse company servicing the technology needs of the broader $35 billion-dollar family entertainment center industry,” Roman Franklin, CEO of Simplicity Esports, said.
Following the closing, it is expected that, Simplicity Esports’ name will be changed to Diverted River Technology, Inc., and the business of Simplicity Esports will become that of Diverted River, an ETO focused on a sustainable, high margin, recurring revenue business model that requires limited capital expenditures. It is also expected that Mr. Johnson, Diverted River’s CEO, will become CEO of the public company following the closing.
“We met Roman and Simplicity Esports three years ago when four different companies were bidding to buy our esports software company, ggCircuit. Simplicity Esports was a great client of ggCircuit and we are impressed with Roman and his business and financial intelligence in the public market. Now as we expand our platform experience into a 10x larger entertainment market, we are excited to join forces and launch our new platform together as Diverted River in 2023,” Zack Johnson, CEO of Diverted River, said.
“Our team now boasts just shy of 80 million hours of usage on our software platforms over the past 20 years in high profile and public spaces in retail, educational, and esports venues. The Family Entertainment Center (FEC) industry is technologically fragmented and utilizes 15-17 software tools per business to manage their backend and customer experience. They are served by slow moving software companies utilizing outdated technology stacks that hold these businesses hostage with proprietary hardware and software. We plan to flip this industry on its head and provide solutions that allow venues to have open market hardware choices, and robust integration points with synergistic software platforms,” Johnson added.
The transaction, which is expected to close prior to year end, is subject to standard closing conditions, including the repayment of certain debts and achieving a minimum amount of working capital.
