OverActive Media Reports Record Quarterly Revenue

Rhea-AI Summary

OverActive Media reported record revenues of $5.5 million for Q3 2021, marking a 108.1% increase when adjusted for league revenue share timing and a 9.8% year-over-year growth. However, the company experienced an Adjusted EBITDA loss of $(0.3) million and a net loss of $(6.4) million, attributing these downturns mainly to higher operating expenses linked to its public listing.

Despite losses, OverActive maintains a strong cash position of $36.2 million and has secured preliminary approvals for a performance venue in Toronto, which could drive future growth.

Positive

• Record revenue of $5.5 million for Q3 2021, up 108.1% adjusted for timing differences.
• Cash balance of $36.2 million as of September 30, 2021, indicating strong financial health.
• Secured approval for planned performance venue, indicating future growth potential.

Negative

• Net loss of $(6.4) million for Q3 2021, a significant increase from $(1.1) million year-over-year.
• Adjusted EBITDA loss of $(0.3) million compared to a profit of $0.4 million in the prior year.
• High non-cash costs contributing to overall net loss.

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 ended				Nine months ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 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
Depreciation	303		232		900		498
Amortization	100		211		612		614
Decrease in net present value of franchise obligations	(388	)	-		(388	)	(324	)
Finance cost	1,355		2,083		3,688		6,308
Foreign exchange loss (gain)	452		(833	)	(239	)	2,030
Payroll subsidies	-		(514	)	-		(1,194	)
Share-based compensation	1,787		321		3,444		1,023
Restructuring costs	-		51		-		183
Reverse takeover costs	2,756		-		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 ended						For 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

FAQ

What was OverActive Media's revenue for Q3 2021?

OverActive Media reported record revenue of $5.5 million for Q3 2021.

How much cash does OverActive Media have as of September 30, 2021?

As of September 30, 2021, OverActive Media has a cash balance of $36.2 million.

What was the net loss for OverActive Media in Q3 2021?

OverActive Media reported a net loss of $(6.4) million for Q3 2021.

What percentage did OverActive Media's revenue increase year-over-year?

OverActive Media's revenue increased by 9.8% year-over-year.

What approval did OverActive Media secure recently?

OverActive Media secured approval for the concept design and lease terms for a performance venue in Toronto.