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
Third Quarter 2023 Achievements
Significant Announcements Subsequent to Quarter End
"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 | - | (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. |
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
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