Positive Third Quarter Adjusted EBITDA of
$0.8 Million
Adam Adamou Promoted to CEO
TORONTO, Nov. 21,
2023 /CNW/ - OverActive Media ("OverActive" or
the "Company") (TSXV: OAM), a premier gaming, esports, and
entertainment company for today's generation of fans, today
released its third quarter results for the three-and-nine-month
period ended September 30, 2023.
Unless otherwise specified, all amounts are in Canadian dollars
($).
Third Quarter 2023 Financial Highlights
- Total revenues grew by 3.5% to $6.0
million, a $0.2 million
improvement relative to the prior year period, driven by an
increase in event revenues.
- Adjusted EBITDA1 grew to $0.8
million, a $1.2 million
improvement relative to the prior year quarter.
- Operating Expenses decreased by 19.2% or $1.3 million relative to the prior year quarter,
primarily due to reduced corporate payroll expenses and team
operating costs.
- At September 30, 2023, the
Company had cash and cash equivalents of $9.7 million.
Third Quarter 2023 Achievements
- MAD Lions launched its fan loyalty program, 'The Pride',
powered by blockchain partner Zilliqa on September 25, 2023.
- In collaboration with the Overwatch League, OverActive hosted
the 2023 Overwatch League Grand Finals in Toronto, Canada, from September 28 to October 1, 2023. The first
championship event of its kind in Canada closed the season in front of a
sold-out crowd.
- OverActive unveiled its Content Creator Academy, a roster of 20
diverse influencers with a combined reach of over 15 million
representing the Toronto Ultra, Toronto Defiant and MAD Lions
brands.
Significant Announcements Subsequent to Quarter End
- OverActive confirmed all outstanding Overwatch League entry
fees, valued at $8.1 million
(US$6 million), have been waived and
will be reflected in the Company's fourth quarter 2023 financial
results.
- OverActive terminated its Team Participation Agreement in the
Overwatch League. Under the terms of the agreement, the Company
will receive a termination payment of approximately $8.2 million (US$6
million) from Activision Blizzard. This payment will be
received net of approximately $0.9
million for an expected net payment receipt of approximately
$7.3 million.
- Year to date, OverActive's professional esports teams have
reached more than 50 million hours watched across all tournament
matches.2
- OverActive announced that it will host the Call of Duty League
Major III tournament in Toronto,
Canada, from May 16 to 19,
2024.
- MAD Lions competed in the LEC 2023 Season Finals, reaching a
peak match viewership of 1.3 million3. Additionally, the
team qualified for the World Championships for the fifth
consecutive year, reaching a peak match viewership of 1.3
million4.
"Our Q3 results demonstrate the continued resilience and
relevance of our business, including achieving operating
profitability for the first time as a public company," said
Adam Adamou, CEO, OverActive Media.
"The positive momentum is a direct result of our focused approach
to ensuring greater operating efficiencies in our business. In
addition, with our successful efforts to eliminate $8.1 million in fees payable to our league
partners and the imminent receipt of $7.3
million from the Overwatch League, the Company is in a
strong financial position. Our improved balance sheet and proven
operational rigor should allow us to capitalize on the many growth
opportunities in the esports ecosystem."
The Company is also pleased to announce the promotion of
Adam Adamou to CEO. Mr. Adamou's
promotion comes after a pivotal interim tenure, setting a robust
course with a strategy expected to lead to sustainable growth and
innovation. Bringing three decades of industry expertise as a
venture capitalist and M&A specialist, Mr. Adamou has honed his
leadership in various executive roles, including Director, CEO, and
Executive Chairman within the technology sector and other dynamic,
rapidly expanding markets.
"Adam has been instrumental not only in founding OverActive but
also in guiding us through a transformative period as interim CEO,"
said Sheldon Pollack, Chair,
OverActive Media. "His leadership has been paramount in our recent
restructuring and strategic pivot. The board's overwhelming support
of his promotion to CEO is a testament to our faith in his vision
and strategic plan for the company."
The Company's consolidated unaudited financial statements, notes
to financial statements, and Management's Discussion and Analysis
for the three and nine-month periods ended September 30, 2023, are available on the
Company's website at www.overactivemedia.com and under the
Company's profile on SEDAR at www.sedarplus.ca.
The following table presents a reconciliation of net loss to
adjusted EBITDA for the three months ended September 30, 2023 and 2022:
|
Three months ended
|
|
September 30,
2023
|
September 30,
2022
|
(In thousands of
Canadian dollars)
|
$
|
$
|
Net (loss) income for
the period
|
(1,993)
|
456
|
Income tax
expense
|
152
|
462
|
Depreciation
|
435
|
300
|
Amortization
|
51
|
199
|
Decrease in net present
value of franchise
obligations
|
-
|
(3,931)
|
Finance
income
|
(44)
|
-
|
Finance cost
|
1,332
|
1,473
|
Foreign exchange
loss
|
610
|
1,560
|
Share-based
compensation
|
122
|
337
|
Restructuring and
business development costs
|
112
|
104
|
Reversal of
provision
|
-
|
(1,384)
|
Adjusted
EBITDA
|
777
|
(424)
|
Conference Call
The Company will conduct a conference call tomorrow,
Wednesday, November 22, 2023 at
9:00 a.m. (Eastern Time) to review
the third 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/3QlI1V5 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 828164#.
The replay will expire on Wednesday,
November 29, 2023.
A live conference call webcast can be accessed on OverActive's
website at www.overactivemedia.com or directly via
https://app.webinar.net/GAraDJnDXZw. An online webcast archive will
be available via the same link for 90 days following the call.
_________________________________
|
1 Adjusted EBITDA is a non-IFRS
measure. Refer to "Non-IFRS Measures" at the end of this press
release.
|
2 https://escharts.com/
|
3 https://escharts.com/
|
4 https://escharts.com/
|
OVERACTIVE MEDIA Corp.
Consolidated Statements of Financial Position
(expressed in thousands of Canadian dollars)
As at September 30, 2023 and
December 31, 2022
|
|
|
|
September
30,
|
December 31,
|
|
2023
|
2022
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$
9,695
|
$
13,557
|
Trade and other
receivables
|
3,787
|
6,589
|
Prepaid expenses and
other current assets
|
2,676
|
2,086
|
Total current
assets
|
16,158
|
22,232
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
Property and
equipment
|
2,273
|
2,531
|
Right-of-use
assets
|
743
|
1,297
|
Intangible
assets
|
55,215
|
55,624
|
Goodwill
|
5,964
|
5,958
|
Total non-current
assets
|
64,195
|
65,410
|
|
|
|
Total
assets
|
$
80,353
|
$
87,642
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
Trade payables and
accrued liabilities
|
$
3,028
|
$
4,256
|
Provisions
|
686
|
686
|
|
|
|
Notes
payable
|
63
|
63
|
Current portion of
lease liabilities
|
808
|
1,074
|
Current portion of
contract liability
|
2,489
|
820
|
Current portion of
payable related to franchise assets
|
13,138
|
1,581
|
Current portion of
long-term debt
|
171
|
163
|
Current portion of
deferred grant income
|
35
|
35
|
Total current
liabilities
|
20,418
|
8,678
|
|
|
|
Non-current
liabilities:
|
|
|
Deferred tax
liability
|
8,168
|
8,160
|
Long-term portion of
lease liabilities
|
12
|
349
|
Long-term portion of
contract liability
|
768
|
-
|
Long-term payable
related to franchise assets
|
14,856
|
22,638
|
Long-term
debt
|
96
|
228
|
Long-term deferred
grant income
|
18
|
46
|
Other long-term
liabilities
|
84
|
84
|
Total non-current
liabilities
|
24,002
|
31,505
|
|
|
|
Total
liabilities
|
44,420
|
40,183
|
|
|
|
Shareholders'
equity:
|
|
|
Share
capital
|
133,638
|
133,638
|
Warrants
reserve
|
-
|
621
|
Contributed
surplus
|
9,480
|
8,914
|
Accumulated other
comprehensive loss
|
(4,548)
|
(4,247)
|
Deficit
|
(102,637)
|
(91,467)
|
Total shareholders'
equity
|
35,933
|
47,459
|
|
|
|
Total liabilities
and shareholders' equity
|
$
80,353
|
$
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 and nine months ended September 30, 2023 and 2022
|
For the three months
ended
|
|
For the nine months
ended
|
|
September
30,
|
September
30,
|
|
September
30,
|
September
30,
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
Revenue
|
$
6,015
|
$
5,809
|
|
$ 11,492
|
$
10,248
|
|
|
|
|
|
|
Operating
costs
|
5,374
|
6,654
|
|
17,259
|
19,113
|
Income (loss) before
the undernoted
|
641
|
(845)
|
|
(5,767)
|
(8,865)
|
|
|
|
|
|
|
Under noted expenses
(income):
|
|
|
|
|
|
Depreciation
|
435
|
300
|
|
1,313
|
916
|
Amortization of
intangible assets
|
51
|
199
|
|
159
|
482
|
Foreign exchange
loss
|
610
|
1,560
|
|
119
|
2,067
|
Decrease in net present
value of
|
|
|
|
|
|
franchise
obligations
|
-
|
(3,931)
|
|
-
|
(8,709)
|
Finance
income
|
(44)
|
-
|
|
(182)
|
-
|
Finance
costs
|
1,332
|
1,473
|
|
3,843
|
4,120
|
Share-based
compensation
|
122
|
337
|
|
(55)
|
2,001
|
Other (income)
loss
|
(24)
|
(1,701)
|
|
58
|
(3,673)
|
(Loss) Income before
income taxes
|
(1,841)
|
918
|
|
(11,022)
|
(6,069)
|
|
|
|
|
|
|
Income tax
expense
|
152
|
462
|
|
148
|
456
|
Net (loss) income for
the period
|
(1,993)
|
456
|
|
(11,170)
|
(6,525)
|
|
|
|
|
|
|
Other comprehensive
(loss) income:
|
|
|
|
|
|
Foreign currency
translation
|
(61)
|
189
|
|
(301)
|
(1,397)
|
|
|
|
|
|
|
Comprehensive loss for
the period
|
$
(2,054)
|
$
645
|
|
$
(11,471)
|
$
(7,922)
|
|
|
|
|
|
|
Loss per
share:
|
|
|
|
|
|
Basic and
Diluted
|
$
(0.02)
|
$
0.01
|
|
$
(0.14)
|
$
(0.08)
|
OVERACTIVE MEDIA CORP.
Consolidated Statements of Cash Flows
(expressed in thousands of Canadian dollars)
For the nine months ended September 30,
2023 and 2022
|
For the nine months
ended
|
|
September
30,
|
September
30,
|
|
2023
|
2022
|
|
|
|
Cash used
in:
|
|
|
|
|
|
Operating
activities:
|
|
|
|
Net loss for the
period
|
$
(11,170)
|
$
(6,525)
|
Adjustments
for:
|
|
|
Depreciation
|
1,313
|
916
|
Amortization of
intangible assets
|
159
|
482
|
Foreign exchange
loss
|
119
|
2,067
|
Share-based
compensation
|
(55)
|
2,001
|
Finance
cost
|
3,843
|
4,120
|
Decrease in net
present value
of franchise
obligations
|
-
|
(8,709)
|
Income tax
expense
|
148
|
456
|
Other
|
(171)
|
(23)
|
Change in non-cash
operating working capital:
|
|
|
Decrease (increase) in
trade and other receivables
|
2,802
|
(1,821)
|
Increase in prepaid
expenses and other current assets
|
(682)
|
(634)
|
(Decrease) increase in
trade payable and accrued liabilities
|
(1,231)
|
84
|
Increase (decrease) in
contract liabilities
|
2,437
|
(610)
|
Decrease in
provisions
|
-
|
(1,301)
|
|
(2,488)
|
(9,497)
|
|
|
|
Financing
activities:
|
|
|
Repayment of long-term
debt
|
(139)
|
(134)
|
Principal payment of
lease liability
|
(953)
|
(652)
|
Payment of interest
portion of lease liability
|
(91)
|
(113)
|
|
|
|
|
(1,183)
|
(899)
|
|
|
|
Investing
activities:
|
|
|
Purchase of property
and equipment
|
(43)
|
(599)
|
Purchase of player
contracts
|
-
|
(700)
|
Intangibles
acquired
|
(8)
|
(8)
|
|
|
|
|
(51)
|
(1,307)
|
|
|
|
Decrease in cash and
cash equivalents
|
(3,722)
|
(11,703)
|
Cash and cash
equivalents, beginning of period
|
13,557
|
29,577
|
Effect of exchange rate
changes on cash and cash equivalents
|
(140)
|
(189)
|
|
|
|
Cash and cash
equivalents, end of period
|
$
9,695
|
$
17,685
|
About OverActive Media
OverActive Media (TSXV: OAM) 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 Call of Duty League,
operating as the Toronto Ultra, and (ii) 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, 2022 and its
other filings with Canadian securities regulators, copies of which
may be found under OverActive's profile at www.sedarplus.ca. 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 and business development
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 nine-month periods ended September
30, 2023.
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.
SOURCE OverActive Media