OverActive Media Reports Record Quarterly Revenue


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 endedNine months ended
 September 30, 2021September 30, 2020September 30, 2021September 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 
Depreciation303 232 900 498 
Amortization100 211 612 614 
Decrease in net present value of franchise obligations(388)- (388)(324)
Finance cost1,355 2,083 3,688 6,308 
Foreign exchange loss (gain)452 (833)(239)2,030 
Payroll subsidies- (514)- (1,194)
Share-based compensation1,787 321 3,444 1,023 
Restructuring costs- 51 - 183 
Reverse takeover costs2,756 - 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 endedFor 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