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 CallThe 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-20232
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-major4 https://escharts.com/tournaments/cod5 https://twitter.com/esportscharts/status/16605636493526630416 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) 924-2614lgaucher@oam.gg
Babak Pedram, Investor Relations, Virtus Advisory Group
Inc.(416) 955-8651bpedram@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.
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