OverActive Media Reports First Quarter 2023 Financial Results
Historic Team Viewership Exceeds 13.5 Million Hours in Q1
TORONTO, May 24, 2023 (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 released its first quarter results for the three months ended March 31, 2023. Unless otherwise specified, all amounts are in Canadian dollars ($).
First Quarter 2023 Achievements
- Toronto Ultra wins Major Championship and breaks viewership records, securing $274,540 in prize money
- MAD Lions tops viewership across North America and EMEA regions, driving 7.8 million viewership hours1
- Operating costs decreased by $0.7 million, a 12% year-over-year improvement, driven by savings across corporate payroll, selling, general, and administrative and team operations expenses
“Our esports teams are the core of what we do at OverActive, and in the first quarter, we saw historic viewership and engagement for our MAD Lions and Toronto Ultra franchises,” said Adam Adamou, Co-Founder and Interim CEO, OverActive Media. “Both teams topped their respective leagues for peak viewership. As we look ahead, investing in audience growth and engagement continues to be our priority. It’s a value driver for our business and partners, as it is our biggest opportunity to attract and convert fans. Reaching 1 million followers across our Toronto Ultra social channels is a sign of progress and momentum we are building across all our brands.”
Continued Mr. Adamou, “Our first quarter is historically our weakest. Going forward, we see lower losses with each successive quarter this year. Our focus is on achieving high-quality revenue and disciplined cost management, to deliver stronger results and a path to quarterly profitability towards the back end of the year. Management believes that the Company has sufficient cash resources, that along with a stronger second-half outlook, affords us the ability to self-fund our growth initiatives.”
First Quarter 2023 Financial Highlights
- First quarter 2023 total revenue decreased by 23% relative to the comparative prior-year period to $1.6 million. This is primarily due to macroeconomic headwinds resulting in a decline in partnership revenue for the quarter.
- Adjusted EBITDA2 of approximately $(3.7) million, compared to Adjusted EBITDA of $(2.1) million during the comparative prior-year period. This is the result of a $1.9 million gain in non-recurring other income during the same quarter in the prior year.
- Net loss of $(5.7) million, compared to $(4.6) million during the comparative prior-year period.
- As of March 31, 2023, the Company had cash and cash equivalents of $10.4 million. As of May 23, 2023, the Company had cash and cash equivalents of $11.6 million.
First Quarter 2023 Operations Highlights
OverActive Media
- OverActive Media received league franchise fee deferrals totaling almost $10.1 million, with payments pushed out between 12 to 24 months.
- OverActive announced its entry into the VALORANT esports ecosystem. On January 31, the Company locked in an NA VALORANT Challengers League spot, and on March 30, it signed its first all-female esports team, MAD Lions Laurë, to compete in VALORANT Game Changers.
Toronto Ultra / Call of Duty League
- Toronto Ultra, OverActive’s Call of Duty League franchise, won the Major III Championship on March 12. According to Esports Charts3, the record-breaking final match secured the highest peak viewership in Call of Duty League history, with more than 332,000 tuning in. The same event also saw over 5.5 million hours watched over the tournament as fans joined online and in person.4
- Toronto Ultra’s Major Championship win resulted in $274,540 in prize money.
Significant Announcements Subsequent to Quarter End
- The Company announced new sponsorship agreements with AMD and LG UltraGear™ and renewed relationships with Scuf Gaming (SCUF) and Nielsen Sports.
- MAD Lions, OverActive’s League of Legends team, won the LEC 2023 Spring Split Championship, qualifying for the Mid-Season Invitational (MSI 2023) as EMEA’s first seed. The team achieved the highest viewership of all Western teams, placing in the top five matches of the tournament.5
- To date, in 2023, OverActive’s professional esports teams have reached more than 25 million hours watched across all tournament matches.6
- The 2023 Overwatch League season launched on April 27, 2023. The team is currently competing in Spring Stage Qualifiers to determine if they qualify for Midseason Madness, which takes place in South Korea from June 16 to 18, 2023.
- Toronto Ultra, OverActive’s Call of Duty League team, secured an early spot to the season’s finale, the Grand Championships, taking place in Las Vegas, NV. The brand also recently surpassed 1 million followers across its social platforms, reinforcing the reach of the fan community.
The Company’s consolidated unaudited financial statements, notes to financial statements, and Management’s Discussion and Analysis for the three-month period ended March 31, 2023, are available on the Company’s website at www.overactivemedia.com and under the Company’s profile on SEDAR at www.sedar.com.
Conference Call
The Company will conduct a conference call tomorrow, Thursday, May 25, 2023 at 9:00 a.m. (Eastern Time) to review the first quarter results, as well as provide an overview of the Company’s recent milestones and growth strategy.
To access the conference call without operator assistance, please register and enter your phone number at https://emportal.ink/3LrhqlO to receive an instant automated callback. To dial directly to be entered into the call by an operator, please dial 1-888-390-0605, or for international callers, 416-764-8609. A replay will be available shortly after the call and can be accessed by dialling 1-888-390-0541 or, for international callers, 416-764-8677. The entry code for the replay is 588516#. The replay will expire on Thursday, June 1, 2023.
A live conference call webcast can be accessed on OverActive’s website at www.overactivemedia.com or directly via https://app.webinar.net/mLoZMNop4nO. An online webcast archive will be available via the same link for 90 days following the call.
1 https://escharts.com/tournaments/lol/lec-winter-2023
2 Adjusted EBITDA is a non-IFRS measure. Refer to “Non-IFRS Measures” at the end of this press release.
3 https://escharts.com/tournaments/cod/call-duty-league-2023-stage-3-major
4 https://escharts.com/tournaments/cod
5 https://twitter.com/esportscharts/status/1660563649352663041
6 https://escharts.com/
OVERACTIVE MEDIA CORP.
Consolidated Statements of Financial Position
(expressed in thousands of Canadian dollars)
As at March 31, 2023 and December 31, 2022
| March 31, 2023 | December 31, 2022 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 10,420 | $ | 13,557 | ||
| Trade and other receivables | 4,161 | 6,589 | ||||
| Prepaid expenses and other current assets | 2,745 | 2,086 | ||||
| Total current assets | 17,326 | 22,232 | ||||
| Non-current assets: | ||||||
| Property and equipment | 2,483 | 2,531 | ||||
| Right-of-use assets | 1,338 | 1,297 | ||||
| Intangible assets | 56,002 | 55,624 | ||||
| Goodwill | 5,964 | 5,958 | ||||
| Total non-current assets | 65,787 | 65,410 | ||||
| Total assets | $ | 83,113 | $ | 87,642 | ||
| Liabilities and Shareholders’ Equity | ||||||
| Current liabilities: | ||||||
| Trade payable and accrued liabilities | $ | 2,502 | $ | 4,256 | ||
| Provisions | 686 | 686 | ||||
| Notes payable | 63 | 63 | ||||
| Current portion of lease liabilities | 1,220 | 1,074 | ||||
| Current portion of contract liabilities | 1,782 | 820 | ||||
| Current portion of payable related to franchise assets | 1,675 | 1,581 | ||||
| Current portion of long-term debt | 169 | 163 | ||||
| Current portion of deferred grant income | 36 | 35 | ||||
| Total current liabilities | 8,133 | 8,678 | ||||
| Non-current liabilities: | ||||||
| Deferred tax liability | 8,156 | 8,160 | ||||
| Long-term portion of lease liabilities | 225 | 349 | ||||
| Long-term payable related to franchise assets | 23,757 | 22,638 | ||||
| Long-term debt | 189 | 228 | ||||
| Long-term deferred grant income | 38 | 46 | ||||
| Other long-term liabilities | 84 | 84 | ||||
| Total non-current liabilities | 32,449 | 31,505 | ||||
| Total liabilities | 40,582 | 40,183 | ||||
| Shareholders’ equity: | ||||||
| Share capital | 133,638 | 133,638 | ||||
| Warrants reserve | 621 | 621 | ||||
| Contributed surplus | 9,265 | 8,914 | ||||
| Accumulated other comprehensive loss | (3,787) | (4,247) | ||||
| Deficit | (97,206) | (91,467) | ||||
| Total shareholders’ equity | 42,531 | 47,459 | ||||
| Total liabilities and shareholders’ equity | $ | 83,113 | $ | 87,642 | ||
OVERACTIVE MEDIA CORP.
Consolidated Statements of Net Loss and Comprehensive Loss
(expressed in thousands of Canadian dollars, except per share amounts)
For the three months ended March 31, 2023 and 2022
| For the three months ended | ||||
| March 31, | March 31, | |||
| 2023 | 2022 | |||
| Revenue | $ | 1,617 | $ | 2,099 |
| Operating costs | 5,365 | 6,095 | ||
| Loss before the undernoted | (3,748) | (3,996) | ||
Undernoted expenses (income): | ||||
| Depreciation | 431 | 311 | ||
| Amortization of intangible assets | 57 | 80 | ||
| Foreign exchange loss (gain) | 10 | (267) | ||
| Finance income | (76) | – | ||
| Finance costs | 1,229 | 1,437 | ||
| Share-based compensation | 351 | 993 | ||
| Other income | (7) | (1,923) | ||
| Loss before income taxes | (5,743) | (4,627) | ||
| Income tax (recovery) expense | (4) | 11 | ||
| Net loss for the period | (5,739) | (4,638) | ||
| Other comprehensive income (loss): | ||||
| Foreign currency translation | 460 | (954) | ||
| Comprehensive loss for the period | $ | (5,279) | $ | (5,592) |
| Loss per share: | ||||
| Basic and Diluted | $ | (0.07) | $ | (0.06) |
The following table presents a reconciliation of net loss to adjusted EBITDA for the three months ended March 31, 2023 and 2022:
| Three months ended | ||
| March 31, 2023 | March 31, 2022 | |
| (In thousands of Canadian dollars) | $ | $ |
| Net loss for the period | (5,739) | (4,638) |
| Income tax (recover) expense | (4) | 11 |
| Depreciation | 431 | 311 |
| Amortization and impairment | 57 | 80 |
| Finance income | (76) | – |
| Finance cost | 1,229 | 1,437 |
| Foreign exchange loss (gain) | 10 | (267) |
| Share-based compensation | 351 | 993 |
| Adjusted EBITDA | (3,741) | (2,073) |
OVERACTIVE MEDIA CORP.
Consolidated Statements of Cash Flows
(expressed in thousands of Canadian dollars)
For the three months ended March 31, 2023 and 2022
| For the three months ended | |||||||
| March 31, | March 31, | ||||||
| 2023 | 2022 | ||||||
| Cash used in : | |||||||
| Operating activities: | |||||||
| Net loss for the period | $ | (5,739) | $ | (4,638) | |||
| Adjustments for: | |||||||
| Depreciation | 431 | 311 | |||||
| Amortization of intangible assets | 57 | 80 | |||||
| Foreign exchange loss (gain) | 10 | (267) | |||||
| Share-based compensation | 351 | 993 | |||||
| Finance cost | 1,229 | 1,437 | |||||
| Income tax (recovery) expense | (4) | 11 | |||||
| Other | (8) | (8) | |||||
| Change in non-cash operating working capital: | |||||||
| Decrease (Increase) in trade and other receivables | 2,428 | (9) | |||||
| Increase in prepaid expenses and other current assets | (734) | (504) | |||||
| Decrease in trade payable and accrued liabilities | (1,754) | (764) | |||||
| Increase in contract liabilities | 962 | 624 | |||||
| (2,771) | (2,734) | ||||||
| Financing activities: | |||||||
| Repayment of long-term debt | (48) | (45) | |||||
| Principal payment of lease liability | (305) | (213) | |||||
| Payment of interest portion of lease liability | (33) | (42) | |||||
| (386) | (300) | ||||||
| Investing activities: | |||||||
| Purchase of property and equipment | (10) | (48) | |||||
| Intangibles acquired | – | (5) | |||||
| (10) | (53) | ||||||
| Decrease in cash and cash equivalents | (3,167) | (3,087) | |||||
| Cash and cash equivalents, beginning of period | 13,557 | 29,577 | |||||
| Effect of exchange rate changes on cash and cash equivalents | 30 | (143) | |||||
| Cash and cash equivalents, end of period | $ | 10,420 | $ | 26,347 | |||
FOR FURTHER INFORMATION, PLEASE CONTACT:
Leah Gaucher, Director, Marketing & Communications, OverActive Media
(647) 924-2614
lgaucher@oam.gg
Babak Pedram, Investor Relations, Virtus Advisory Group Inc.
(416) 955-8651
bpedram@virtusadvisory.com
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 professional esports leagues including (i) the Overwatch League, operating as the Toronto Defiant, (ii) the Call of Duty League, operating as the Toronto Ultra, and (iii) the League of Legends European Championship (“LEC”), operating as the MAD Lions. OverActive also leads OAM Live, an events arm that produces both live and online events.
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; the ability of the Company to continue to execute on its existing partnerships and business strategy; the ability of the MAD Lions and Call of Duty Leagues to maintain viewership; the successful completion of the Company’s new venue; and other risk factors set out in OverActive’s annual information form for the year ended December 31, 2021 and its other filings with Canadian securities regulators, copies 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.
A reconciliation of Adjusted EBITDA to net income/loss may be found in the Company’s Management’s Discussion and Analysis for the three and twelve-month periods ended December 31, 2022.
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.
