65% Year-Over-Year Revenue Growth
TORONTO, Aug. 17,
2023 /CNW/ - 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 second quarter results for the three-and-six-month
period ended June 30,
2023. Unless otherwise specified, all amounts are in Canadian
dollars ($).
Second Quarter 2023 Achievements
- Total revenues grew by 65% to $3.9
million, a $1.5 million
improvement relative to the prior year period, primarily driven by
league revenue share and an increase in team performance-related
revenue.
- Adjusted EBITDA1 loss of $2.5
million, a $1.3 million
improvement relative to the prior year period.
- At June 30, 2023, the Company had
cash and cash equivalents of over $9.3
million.
- On June 5, 2023, OverActive
announced a deal with the Overwatch League, including signing a
sponsorship for Toronto Defiant and eliminating outstanding entry
fees. This agreement, which includes early payment of league
revenue share, is valued at $10.8
million.
- MAD Lions, OverActive's League of Legends "LEC" team, won the
LEC 2023 Spring Championship on April 23,
2023, hitting peak viewership of over 570,000, the highest
viewership across all teams to date.
- MAD Lions has the highest peak viewership across the LEC and
the LCS and placed in the top five matches in terms of viewership
at MSI 2023 in London, peaking at
over 1 million concurrent viewers on May 10,
20232.
- OverActive hosted the Call of Duty League's Major V at Mattamy
Athletic Centre in Toronto on
May 25 to 28, 2023. The event saw
over 9,000 fans and sold-out attendance across Saturday and
Sunday.
- The Call of Duty League Championships were held June 15 to 19, 2023, in Las Vegas, NV. OverActive's Toronto Ultra
qualified for the Grand Finals, finishing in second place.
Significant Announcements Subsequent to Quarter End
- Post quarter end, Activision Blizzard disclosed that up to a
further US$6 million ($7.9 million) payment may be made to each
participating Overwatch League team, including Toronto Defiant,
subject to certain conditions.
- The Company renewed its sponsorship agreement with Red Bull for two additional years as its
Official Energy Drink.
- OverActive announced that, in collaboration with the Overwatch
League, it will host the 2023 Overwatch League Grand Finals in
Toronto, Canada, from September 28 to October 1, 2023.
- Year to date, OverActive's professional esports teams have
reached more than 42 million hours watched across all tournament
matches.3
- Toronto Ultra, OverActive's Call of Duty League team, signed
Call of Duty Champion and All-Star team member Dylan "Envoy" Hannon
to its 2024 season roster.
- MAD Lions finished top two in the regular season, qualifying
for the LEC 2023 Season Finals.
"I am thrilled to report that our company experienced tremendous
revenue growth during the second quarter - a 65% year-over-year
increase," said Adam Adamou,
Co-Founder and Interim CEO. "We are determined to drive towards a
near breakeven Adjusted EBITDA over the year's second half."
Mr. Adamou continued, "Our leadership role in discussions
between leagues and publishers regarding a sustainable esports
ecosystem was highlighted when we struck an agreement with the
Overwatch League in June valued at $10.8
million, most of which will be recorded in the second half
of 2023. Since then, Activision Blizzard has further disclosed that
an additional $7.9 million
(US$6 million) may be payable to each
team participating in the league, including OverActive. We expect
the teams to determine by year-end whether to accept this
offer."
The Company's consolidated unaudited financial statements, notes
to financial statements, and Management's Discussion and Analysis
for the three and six-month periods ended June 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 June 30, 2023 and 2022:
|
|
|
Three months
ended
|
|
June 30,
2023
|
June 30,
2022
|
(In thousands of
Canadian dollars)
|
$
|
$
|
Net loss for the
period
|
(3,438)
|
(2,343)
|
Income tax
recovery
|
-
|
(17)
|
Depreciation
|
447
|
305
|
Amortization
|
51
|
203
|
Decrease in net present
value of franchise obligations
|
-
|
(4,778)
|
Finance
income
|
(62)
|
-
|
Finance cost
|
1,282
|
1,210
|
Foreign exchange (gain)
loss
|
(501)
|
774
|
Share-based
compensation
|
(528)
|
671
|
Restructuring and
business development costs
|
205
|
110
|
Adjusted
EBITDA
|
(2,544)
|
(3,865)
|
Conference Call
The Company will conduct a conference
call tomorrow, Friday, August 18,
2023 at 9:00 a.m. (Eastern
Time) to review the second 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/44FOeQ6 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 960728#.
The replay will expire on Friday, August 25,
2023.
A live conference call webcast can be accessed on OverActive's
website at www.overactivemedia.com or directly via
https://app.webinar.net/zgw4AwVjNDp. 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://twitter.com/esportscharts/status/1660563649352663041
|
3
https://escharts.com/
|
OVERACTIVE MEDIA Corp.
Consolidated Statements of
Financial Position
(expressed in thousands of Canadian dollars)
As at June 30, 2023 and December 31, 2022
|
|
|
|
June 30,
|
December 31,
|
|
2023
|
2022
|
Assets
|
|
|
Current
assets:
|
|
|
Cash and
cash equivalents
|
$
9,316
|
$
13,557
|
Trade and other
receivables
|
5,889
|
6,589
|
Prepaid expenses and
other current assets
|
2,561
|
2,086
|
Total current
assets
|
17,766
|
22,232
|
Non-current
assets:
|
|
|
Property and
equipment
|
2,362
|
2,531
|
Right-of-use
assets
|
1,014
|
1,297
|
Intangible
assets
|
55,307
|
55,624
|
Goodwill
|
5,839
|
5,958
|
Total non-current
assets
|
64,522
|
65,410
|
|
|
|
Total
assets
|
$
82,288
|
$
87,642
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
Current
liabilities:
|
|
|
Trade payables
and accrued liabilities
|
$
3,287
|
$
4,256
|
Provisions
|
686
|
686
|
Notes
payable
|
63
|
63
|
Current portion of
lease liabilities
|
1,065
|
1,074
|
Current portion of
contract liability
|
3,815
|
820
|
Current portion of
payable related to franchise assets
|
1,701
|
1,581
|
Current portion of
long-term debt
|
173
|
163
|
Current portion of
deferred grant income
|
35
|
35
|
Total current
liabilities
|
10,825
|
8,678
|
|
|
|
Non-current
liabilities:
|
|
|
Deferred tax
liability
|
8,026
|
8,160
|
Long-term portion of
lease liabilities
|
47
|
349
|
Long-term portion of
contract liability
|
878
|
-
|
Long-term payable
related to franchise assets
|
24,399
|
22,638
|
Long-term
debt
|
136
|
228
|
Long-term deferred
grant income
|
28
|
46
|
Other long-term
liabilities
|
84
|
84
|
Total non-current
liabilities
|
33,598
|
31,505
|
|
|
|
Total
liabilities
|
44,423
|
40,183
|
|
|
|
Shareholders'
equity:
|
|
|
Share
capital
|
133,638
|
133,638
|
Warrants
reserve
|
621
|
621
|
Contributed
surplus
|
8,737
|
8,914
|
Accumulated other
comprehensive loss
|
(4,487)
|
(4,247)
|
Deficit
|
(100,644)
|
(91,467)
|
Total shareholders'
equity
|
37,865
|
47,459
|
|
|
|
Total liabilities
and shareholders' equity
|
$
82,288
|
$
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 six months ended June
30, 2023 and 2022
|
|
|
|
|
For the three months
ended
|
|
For the six months
ended
|
|
June 30,
|
June 30,
|
|
June 30,
|
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
Revenue
|
$
3,860
|
$
2,340
|
|
$
5,477
|
$
4,439
|
|
|
|
|
|
|
Operating
costs
|
6,520
|
6,364
|
|
11,885
|
12,459
|
Loss before the
undernoted
|
(2,660)
|
(4,024)
|
|
(6,408)
|
(8,020)
|
|
|
|
|
|
|
Under noted expenses
(income):
|
|
|
|
|
|
Depreciation
|
447
|
305
|
|
878
|
616
|
Amortization of
intangible assets
|
51
|
203
|
|
108
|
283
|
Foreign exchange (gain)
loss
|
(501)
|
774
|
|
(491)
|
507
|
Decrease in net present
value of
|
|
|
|
|
|
franchise
obligations
|
-
|
(4,778)
|
|
-
|
(4,778)
|
Finance
income
|
(62)
|
-
|
|
(138)
|
-
|
Finance
costs
|
1,282
|
1,210
|
|
2,511
|
2,647
|
Share-based
compensation
|
(528)
|
671
|
|
(177)
|
1,664
|
Other loss
(income)
|
89
|
(49)
|
|
82
|
(1,972)
|
Loss before income
taxes
|
(3,438)
|
(2,360)
|
|
(9,181)
|
(6,987)
|
|
|
|
|
|
|
Income tax
recovery
|
-
|
(17)
|
|
(4)
|
(6)
|
Net loss for the
period
|
(3,438)
|
(2,343)
|
|
(9,177)
|
(6,981)
|
|
|
|
|
|
|
Other comprehensive
loss:
|
|
|
|
|
|
Foreign currency
translation
|
(700)
|
(632)
|
|
(240)
|
(1,586)
|
|
|
|
|
|
|
Comprehensive loss for
the period
|
$
(4,138)
|
$
(2,975)
|
|
$
(9,417)
|
$ (8,567)
|
|
|
|
|
|
|
Loss per
share:
|
|
|
|
|
|
Basic and
Diluted
|
$
(0.04)
|
$
(0.03)
|
|
$
(0.11)
|
$
(0.09)
|
|
|
|
|
|
|
OVERACTIVE MEDIA CORP.
Consolidated Statements of Cash
Flows
(expressed in thousands of Canadian dollars)
For the six months ended June 30,
2023 and 2022
|
|
|
|
For the six months
ended
|
|
June 30,
|
June 30,
|
|
2023
|
2022
|
|
|
|
Cash provided by (used
in) :
|
|
|
Operating
activities:
|
|
|
|
Net loss for the
period
|
$
(9,177)
|
$
(6,981)
|
Adjustments
for:
|
|
|
Depreciation
|
878
|
616
|
Amortization of
intangible assets
|
108
|
283
|
Foreign exchange
(gain) loss
|
(491)
|
507
|
Share-based
compensation
|
(177)
|
1,664
|
Finance
cost
|
2,511
|
2,647
|
Decrease in net
present value
of franchise
obligations
|
-
|
(4,778)
|
Income tax
recovery
|
(4)
|
(6)
|
Other
|
(17)
|
(15)
|
Change in non-cash
operating working capital:
|
|
|
Decrease (increase) in
trade and other receivables
|
700
|
1,807
|
Increase in prepaid
expenses and other current assets
|
(558)
|
(723)
|
(Decrease) increase in
trade payable and accrued liabilities
|
(969)
|
(255)
|
Increase (decrease) in
contract liabilities
|
3,873
|
(421)
|
|
(3,323)
|
(5,655)
|
|
|
|
Financing
activities:
|
|
|
Repayment of long-term
debt
|
(93)
|
(90)
|
Principal payment of
lease liability
|
(622)
|
(431)
|
Payment of interest
portion of lease liability
|
(66)
|
(79)
|
|
(781)
|
(600)
|
|
|
|
Investing
activities:
|
|
|
Purchase of property
and equipment
|
(20)
|
(428)
|
Purchase of player
contracts
|
-
|
(700)
|
Intangibles
acquired
|
(8)
|
(5)
|
|
(28)
|
(1,133)
|
|
|
|
Decrease in cash and
cash equivalents
|
(4,132)
|
(7,388)
|
Cash and cash
equivalents, beginning of period
|
13,557
|
29,577
|
Effect of exchange rate
changes on cash and cash equivalents
|
(109)
|
(198)
|
|
|
|
Cash and cash
equivalents, end of period
|
$
9,316
|
$
21,991
|
|
|
|
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.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 six-month periods ended June 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