Third Quarter 2021 Record Revenue of $5.5 Million
Strong Cash Balance of $36.2 Million
Secured Exhibition Place Approval for Planned Performance Venue, Concept Design, and Lease Terms
TORONTO, Nov. 17, 2021 (GLOBE NEWSWIRE) -- OverActive Media (“OverActive” or the “Company”) (TSXV:OAM) (OTCQB:OAMCF), a global sports, media and entertainment company for today’s generation of fans, today reported financial results for the three and nine months ended September 30, 2021.
The Company’s condensed consolidated interim financial statements, notes to financial statements, and Management’s Discussion and Analysis for the three and nine-month periods ended September 30, 2021, are available on the Company’s website at www.overactivemedia.com and under the Company’s profile on SEDAR at www.sedar.com. Unless otherwise specified, all amounts are in Canadian dollars ($).
Third Quarter 2021 Highlights
- Third quarter 2021 total revenue was a record $5.5 million, up 108.1% when adjusted for timing differences related to league revenue share and 9.8% year-over-year increase.
- Adjusted EBITDA1 loss of $(0.3) million for the third quarter 2021, compared to Adjusted EBITDA of $0.4 million during the comparative prior-year period. Though total revenue has increased, the decrease in Adjusted EBITDA is primarily attributed to higher operating costs associated with our public listing.
- Net loss of $(6.4) million for the third quarter 2021, compared to $(1.1) million during the comparative prior-year period. Net loss for the quarter included $6.3 million in non-cash costs, compared to $1.8 million in non-cash costs in the comparative prior-year period.
- As at September 30, 2021, the Company had cash and cash equivalents of $36.2 million, compared to $5.6 million as of December 31, 2020. This reflects gross proceeds of $23.0 million to the Company from a brokered subscription receipt financing completed in the third quarter in connection with its Qualifying Transaction.
Recent Developments
- Subsequent to quarter-end, the Company secured approval from the Exhibition Place Board of Governors on the concept design and lease terms related to the Company’s building plans for a world-class performance venue in Toronto, Ontario. The Company anticipates the final review by the Toronto City Council will be held in December of this year and is optimistic it will gain the approvals sought. Upon successful approval, OAM expects to partner with a global venue operator on the construction and future management of the venue.
“We are delighted to report such strong third quarter financial performance with adjusted revenue growth of 108.1% and near break-even EBITDA,” said Chris Overholt, President and Chief Executive Officer of OverActive Media. “Significant contributors to our revenue growth included strong sponsor revenue and league revenue share, as well as increased prize money winnings. We believe this year-over-year momentum will continue in the fourth quarter, driven largely by the significant contracted recurring revenue base, and as more sponsorship partners see the value of our team franchise model and additional league share revenue.”
“Looking beyond the fourth quarter, we believe our healthy balance sheet will allow us to pursue a multi-faceted growth strategy, including potential acquisitions to enhance our reach. We are convinced that continued league revenue share growth, as well as the maturation of our sponsorship model, will drive considerable revenue growth while longer-term, the income generated from our performance venue project following its completion will drive significant value creation,” added Overholt.
The following table presents a reconciliation of Net income (loss) to Adjusted EBITDA for the periods ended:
|
Three months ended |
Nine months ended |
|
September 30, 2021 |
September 30, 2020 |
September 30, 2021 |
September 30, 2020 |
| (In thousands of Canadian dollars) |
$ |
|
$ |
|
$ |
|
$ |
|
| Net loss for the period |
(6,418 |
) |
(1,129 |
) |
(14,628 |
) |
(17,448 |
) |
| Income tax recovery |
(215 |
) |
(4 |
) |
(695 |
) |
2,050 |
|
| Depreciation |
303 |
|
232 |
|
900 |
|
498 |
|
| Amortization |
100 |
|
211 |
|
612 |
|
614 |
|
| Decrease in net present value of franchise obligations |
(388 |
) |
- |
|
(388 |
) |
(324 |
) |
| Finance cost |
1,355 |
|
2,083 |
|
3,688 |
|
6,308 |
|
| Foreign exchange loss (gain) |
452 |
|
(833 |
) |
(239 |
) |
2,030 |
|
| Payroll subsidies |
- |
|
(514 |
) |
- |
|
(1,194 |
) |
| Share-based compensation |
1,787 |
|
321 |
|
3,444 |
|
1,023 |
|
| Restructuring costs |
- |
|
51 |
|
- |
|
183 |
|
| Reverse takeover costs |
2,756 |
|
- |
|
2,756 |
|
- |
|
| Adjusted EBITDA |
(268 |
) |
418 |
|
(4,550 |
) |
(6,260 |
) |
1 Adjusted EBITDA is a non-IFRS measure. Refer to “Non-IFRS Measures” at the end of this press release.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Babak Pedram, Investor Relations, Virtus Advisory Group Inc.
(416) 955-8651
bpedram@virtusadvisory.com
Leah Gaucher, Director, PR & Communications, OverActive Media
(647) 924-2614
lgaucher@oam.gg
ABOUT OVERACTIVE MEDIA
OverActive Media (TSXV:OAM) (OTCQB:OAMCF) is headquartered in Toronto, Ontario, with operations in Madrid, Spain and Berlin, Germany. OverActive’s mandate is to build an integrated global company delivering sports, media and entertainment products for today’s generation of fans with a focus on esports, videogames, content creation and distribution, culture, and live and online events. OverActive owns team franchises in (i) the Overwatch League, operating as the Toronto Defiant, (ii) the Call of Duty League, operating as the Toronto Ultra, (iii) the League of Legends European Championship (“LEC”), operating as the MAD Lions, (iv) the Superliga, operating as the MAD Lions Madrid, and (v) Flashpoint, operating as MAD Lions Counter Strike: Global Offensive (a franchised league operated by B Site Inc., a company in which OverActive holds a minority interest), as well as other non-affiliated CS:GO tournaments and leagues. OverActive also operates both live and online events, operating as OAM Live and maintains an active social media presence with its fans and community members, operates fan clubs, and other fan related activities that increase the reach of its brands.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This press release contains statements which constitute “forward-looking statements” and “forward-looking information” within the meaning of applicable securities laws (collectively, “forward-looking statements”), including statements regarding the plans, intentions, beliefs and current expectations of OverActive with respect to future business activities and operating performance. Forward-looking statements are often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions and includes information regarding the anticipated financial and operating results of OverActive in the future.
Investors are cautioned that forward-looking statements are not based on historical facts but instead OverActive management’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although OverActive believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed thereon, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the OverActive. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements include the following: the potential impact of OverActive’s qualifying transaction on relationships, including with regulatory bodies, employees, suppliers, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws and regulations both locally and in foreign jurisdictions; compliance with extensive government regulation; the risks and uncertainties associated with foreign markets; and other risk factors set out in OverActive’s filing statement dated November 17, 2021, a copy of which may be found under OverActive’s profile at www.sedar.com. These forward-looking statements may be affected by risks and uncertainties in the business of OverActive and general market conditions, including COVID-19.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although OverActive has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended and such changes could be material. OverActive does not intend and do not assume any obligation, to update the forward-looking statements except as otherwise required by applicable law.
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, finance costs, depreciation and amortization, decrease/increase in net present value of franchise obligations, foreign exchange gains/loss, assistance payments from Franchise League and government assistance, restructuring costs, reverse takeover costs intangibles assets impairment charge and share-based compensation. 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 TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
OVERACTIVE MEDIA CORP.
Condensed Consolidated Interim Statements of Financial Position
(expressed in thousands of Canadian dollars, unaudited)
As at September 30, 2021 and December 31, 2020
|
September 30, 2021 |
|
December 31, 2020
(audited) |
|
| Assets |
|
|
| Current assets: |
|
|
| Cash and cash equivalents |
$ |
36,218 |
|
$ |
5,585 |
|
| Cash held in trust |
|
- |
|
|
1,098 |
|
| Trade and other receivables |
|
2,727 |
|
|
1,920 |
|
| Prepaid expenses and other current assets |
|
1,367 |
|
|
1,594 |
|
| Total current assets |
|
40,312 |
|
|
10,197 |
|
|
|
|
| Non-current assets: |
|
|
| Investments |
|
2,784 |
|
|
2,784 |
|
| Property and equipment |
|
3,252 |
|
|
1,749 |
|
| Right-of-use assets |
|
2,054 |
|
|
2,750 |
|
| Intangible assets |
|
90,001 |
|
|
92,093 |
|
| Goodwill |
|
5,623 |
|
|
5,714 |
|
| Total non-current assets |
|
103,714 |
|
|
105,090 |
|
|
|
|
| Total assets |
$ |
144,026 |
|
$ |
115,287 |
|
|
|
|
| Liabilities and Shareholders’ Equity |
|
|
|
|
|
| Current liabilities: |
|
|
| Trade payable and accrued liabilities |
$ |
2,612 |
|
$ |
2,616 |
|
| Provisions |
|
1,987 |
|
|
1,987 |
|
| Notes payable |
|
576 |
|
|
576 |
|
| Current portion of lease liabilities |
|
1,037 |
|
|
1,041 |
|
| Current portion of contract liability |
|
2,532 |
|
|
1,566 |
|
| Current portion of payable related to franchise assets |
|
7,049 |
|
|
3,918 |
|
| Current portion of long-term debt |
|
190 |
|
|
152 |
|
| Current portion of deferred grant income |
|
33 |
|
|
34 |
|
| Total current liabilities |
|
16,016 |
|
|
11,890 |
|
| Non-current liabilities: |
|
|
| Deferred tax liability |
|
15,302 |
|
|
16,050 |
|
| Long-term portion of lease liabilities |
|
1,138 |
|
|
1,760 |
|
| Long-term portion of contract liability |
|
- |
|
|
1,041 |
|
| Long-term payable related to franchise assets |
|
21,971 |
|
|
22,559 |
|
| Long-term debt |
|
393 |
|
|
481 |
|
| Long-term deferred grant income |
|
90 |
|
|
123 |
|
| Other long-term liabilities |
|
92 |
|
|
101 |
|
| Total non-current liabilities |
|
38,986 |
|
|
42,115 |
|
|
|
|
| Total liabilities |
|
55,002 |
|
|
54,005 |
|
|
|
|
| Shareholders’ equity: |
|
|
| Share capital |
|
133,607 |
|
|
93,479 |
|
| Warrants reserve |
|
621 |
|
|
- |
|
| Contributed surplus |
|
5,908 |
|
|
2,687 |
|
| Accumulated other comprehensive (loss) income |
|
(1,489 |
) |
|
111 |
|
| Deficit |
|
(49,623 |
) |
|
(34,995 |
) |
| Total shareholders’ equity |
|
89,024 |
|
|
61,282 |
|
|
|
|
| Total liabilities and shareholders’ equity |
$ |
144,026 |
|
$ |
115,287 |
|
OVERACTIVE MEDIA CORP.
Condensed Consolidated Interim Statement of Net Loss and Comprehensive Loss
(expressed in thousands of Canadian dollars, except per share amounts, unaudited)
|
For the three months ended |
For the nine months ended |
|
September 30, 2021 |
|
September 30, 2021 |
|
September 30, 2021 |
|
September 30, 2021 |
|
| Revenue |
$ |
5,476 |
|
$ |
4,989 |
|
$ |
8,878 |
|
$ |
7,168 |
|
| Operating costs |
|
5,852 |
|
|
4,275 |
|
|
14,367 |
|
|
12,635 |
|
| (Loss) income before the undernoted |
|
(376 |
) |
|
714 |
|
|
(5,489 |
) |
|
(5,467 |
) |
| Depreciation |
|
303 |
|
|
232 |
|
|
900 |
|
|
498 |
|
| Amortization on intangible assets |
|
100 |
|
|
211 |
|
|
612 |
|
|
614 |
|
| Foreign exchange (gain) loss |
|
452 |
|
|
(833 |
) |
|
(239 |
) |
|
2,030 |
|
| Decrease in net present value of franchise obligations |
|
(388 |
) |
|
- |
|
|
(388 |
) |
|
(324 |
) |
| Finance costs |
|
1,355 |
|
|
2,083 |
|
|
3,688 |
|
|
6,308 |
|
| Share-based compensation |
|
1,787 |
|
|
321 |
|
|
3,444 |
|
|
1,023 |
|
| Other income |
|
(108 |
) |
|
(167 |
) |
|
(939 |
) |
|
(218 |
) |
| Reverse takeover costs |
|
2,756 |
|
|
- |
|
|
2,756 |
|
|
- |
|
| Loss before income taxes |
|
(6,633 |
) |
|
(1,133 |
) |
|
(15,323 |
) |
|
(15,398 |
) |
| Income tax (recovery) expense |
|
(215 |
) |
|
(4 |
) |
|
(695 |
) |
|
2,050.00 |
|
| Net loss for the period |
|
(6,418 |
) |
|
(1,129 |
) |
|
(14,628 |
) |
|
(17,448 |
) |
| Other comprehensive income (loss): |
|
|
|
|
| Foreign currency translation |
|
(65 |
) |
|
471.00 |
|
|
(1,600 |
) |
|
323 |
|
| Comprehensive loss for the period |
$ |
(6,483 |
) |
$ |
(658 |
) |
$ |
(16,228 |
) |
$ |
(17,125 |
) |
| Loss per share: |
|
|
|
|
| Basic and Diluted |
$ |
(0.08 |
) |
$ |
(0.02 |
) |
$ |
(0.22 |
) |
$ |
(0.33 |
) |
OVERACTIVE MEDIA CORP.
Condensed Consolidated Interim Statements of Cash Flows
(expressed in thousands of Canadian dollars, unaudited)
For the nine months ended September 30, 2021 and 2020
|
For the nine months ended |
|
September 30, 2021 |
|
September 30, 2020 |
|
| Cash provided by (used in): |
|
|
|
|
|
| Operating activities: |
|
|
| Net loss for the period |
$ |
(14,628 |
) |
$ |
(17,448 |
) |
| Adjustments for: |
|
|
| Depreciation |
|
900 |
|
|
498 |
|
| Amortization of intangible assets |
|
612 |
|
|
614 |
|
| Foreign exchange (gain) loss |
|
(239 |
) |
|
2,030 |
|
| Share-based compensation |
|
3,444 |
|
|
1,023 |
|
| Finance cost |
|
3,688 |
|
|
6,308 |
|
| Income tax (recovery) expense |
|
(695 |
) |
|
2,050 |
|
| Decrease in net present value of franchise obligations |
|
(388 |
) |
|
(324 |
) |
| Reverse takeover costs |
|
2,756 |
|
|
- |
|
| Other |
|
(50 |
) |
|
(15 |
) |
| Change in non-cash operating working capital |
|
|
| (Increase) decrease in trade and other receivables |
|
(768 |
) |
|
172 |
|
| (Increase) in prepaid expenses and other current |
|
|
| assets |
|
(248 |
) |
|
(219 |
) |
| (Decrease) in trade payable and |
|
|
| accrued liabilities |
|
(971 |
) |
|
(394 |
) |
| (Decrease) increase in contract liabilities |
|
(75 |
) |
|
1,144 |
|
|
|
(6,662 |
) |
|
(4,561 |
) |
| Financing activities: |
|
|
| Repayment of notes payable for prior acquisitions |
|
– |
|
|
(711 |
) |
| Proceeds on long-term debt |
|
- |
|
|
812 |
|
| Repayment on long-term debt |
|
(77 |
) |
|
– |
|
| Net proceeds on shares issued in prior period received from cash held in trust |
|
1,098 |
|
|
4,594 |
|
| Proceeds from shares issued on private placement |
|
|
| and brokered private placement, net |
|
37,636 |
|
|
– |
|
| Principal payment of lease liability |
|
(600 |
) |
|
(204 |
) |
| Payment on interest portion of lease liability |
|
(169 |
) |
|
(58 |
) |
| Proceeds from warrants redeemed |
|
50 |
|
|
– |
|
|
|
37,938 |
|
|
4,433 |
|
| Investing activities: |
|
|
| Purchase of property and equipment |
|
(1,620 |
) |
|
(780 |
) |
| Changes in non-cash working capital related to capital expenditures |
|
1,142 |
|
|
– |
|
| Purchase of player contracts |
|
(187 |
) |
|
(341 |
) |
| Intangibles acquired |
|
(49 |
) |
|
(84 |
) |
| Investments acquired |
|
– |
|
|
(2,633 |
) |
| Cash acquired from reverse takeover |
|
532 |
|
|
– |
|
|
|
(182 |
) |
|
(3,838 |
) |
| Increase (decrease) in cash and cash equivalents |
|
31,094 |
|
|
(3,966 |
) |
| Cash and cash equivalents, beginning of period |
|
5,585 |
|
|
10,208 |
|
| Effect of exchange rate changes on cash and cash equivalents |
|
(461 |
) |
|
(26 |
) |
|
|
|
| Cash and cash equivalents, end of period |
$ |
36,218 |
|
$ |
6,216 |
|
