Enthusiast Gaming Announces $31.7 Million of Pro Forma Revenue in Q3 2020

Completed transformational acquisition of Omnia Media on August 30, 2020

TORONTO, Nov. 16, 2020 (GLOBE NEWSWIRE) -- Enthusiast Gaming Holdings Inc. (“Enthusiast Gaming” or the “Company”) (TSX: EGLX)(OTCQB: ENGMF)(FSE: 2AV), today announced results for the third quarter ended September 30, 2020.

“The third quarter was another record quarter for us. The acquisition of Omnia in August was transformational, and Omnia’s assets and viewers are proving to be a natural fit for our ecosystem,” commented Adrian Montgomery, Chief Executive Officer of Enthusiast Gaming. “We are on a mission to prove the earnings power of our platform of 300 million gamers monthly. We are growing rapidly and look forward to continued strong performances in the fourth quarter and in 2021.”

Third Quarter 2020 Highlights:

• Reported revenue was $16.3 million, an increase of 133% compared to $7.0 million in the second quarter;

• Pro forma revenue was $31.7 million for Q3 2020, an increase of 17% compared to $27.2 million in the second quarter;

• Reported gross margin was $4.1 million, an increase of 28% compared to $3.2 million in the second quarter;

• Pro forma gross margin was $5.3 million, an increase of 18% compared to $4.5 million in the second quarter;

• Reported operating expenses were $8.2 million, an increase of 9% compared to $7.5 million in Q2;

• Pro forma operating expenses were $9.3 million, an increase of 4% compared to $8.9 million in the second quarter;

• Net loss and comprehensive loss for Q3 was $8.0 million, compared to $6.5 million in the second quarter, resulting in a net and comprehensive loss per share, basic and diluted, of $0.10 and $0.09, respectively;

• Pro forma total views across written and video content were 10.6 billion for Q3, and 32.2 billion year-to-date;

• Direct sales were approximately $1.0 million, an increase of 67% compared to the second quarter;

• Closed the acquisition of Omnia Media on August 30, 2020;

• Closed a $17.25 million bought deal public offering on August 31, 2020;

• Introduced two new paid subscription offerings, Siliconera+ and The Escapist+; and,

• Added three senior media executives to the leadership team.

The Company completed the acquisition of Omnia Media Inc. (“Omnia”) on August 30, 2020 (see press release dated August 31, 2020). The unaudited condensed consolidated interim financial statements of the Company for the three and nine months ended September 30, 2020 (the “Financial Statements”) include the financial results of Omnia from August 30 through September 30, 2020. References to “pro forma” figures herein will assume the acquisition of Omnia took place on the first day of the respective period. The Company is providing pro forma quarterly information for 2020 as a number of mergers and acquisitions closed in the second half of 2019 reduce the comparability of year-over-year figures. The Financial Statements contain comparative figures for the three and nine months ended September 30, 2019. Results are presented in Canadian dollars.

Pro Forma Metrics

Select Pro Forma Financial Metrics: Quarterly and 9 Months 2020
Pro Forma for Omnia Acquisition
(in $M except for EPS)	Q120		Q220		Q320		9 months FY20
Total Revenue	$26.2		$27.2		$31.7		$85.1
Media and Content	$ 22.5		$24.4		$ 29.0		$75.9
Subscription	$1.2		$ 1.7		$1.6		$ 4.5
Esports and Entertainment	$ 2.5		$ 1.1		$ 1.1		$ 4.7
Gross Margin	$4.7		$4.5		$5.3		$14.6
Gross Margin %	18.0	%	16.7	%	16.8	%	17.2	%
Operating Income (loss)	($4.6	)	($4.3	)	($4.0	)	($12.9	)
Operating Margin	-17.4	%	-15.9	%	-12.6	%	-15.2	%
Net Income (loss)	($6.1	)	($6.4	)	($8.0	)	($20.5	)
Earnings (loss) Per Share (basic & diluted)	($0.08	)	($0.09	)	($0.10	)	($0.27	)

Select Pro Forma Operating Metrics: Quarterly and 9 Months 2020
Pro Forma for Omnia Acquisition
	Q120	Q220	Q320	9 months FY20
Total Views (millions)	9,201	12,485	10,554	32,240
Web pageviews	2,296	3,119	2,427	7,842
Video views	6,905	9,366	8,127	24,398
Paid Subscribers (thousands - as at end of period)	92	111	112	112

Certain information provided in this news release is extracted from Financial Statements and Management’s Discussion & Analysis (“MD&A”) of the Company for the three and nine months ended September 30, 2020, and should be read in conjunction with them. It is only in the context of the fulsome information and disclosures contained in the Financial Statements and MD&A that an investor can properly analyze this information. The Financial Statements and MD&A can be found under the Company’s profile on www.sedar.com.

Earnings Announcement and Supplemental Information

Management will host a conference call and webcast on November 16, 2020, at 5:00 p.m. Eastern Time to review and discuss third quarter results.

Please call the following numbers (at least 10 minutes before the scheduled time) to participate:

North America (toll-free): 1-877-407-9039

International: +1 201-689-8470

Conference ID: 13713075

A live webcast can be heard at https://www.enthusiastgaming.com/shareholder-information/.

If you are unable to join live, a replay of the call will be accessible until November 30, 2020, as follows: North America: 1-844-512-2921; International: +1 412-317-6671. The conference ID is 13713075. A recorded version of the webcast will also be available via the Enthusiast Gaming investor relations website.

About Enthusiast Gaming

Enthusiast Gaming (TSX: EGLX) (OTCQB: ENGMF)(FSE: 2AV) is building the world’s largest social network of communities for gamers and esports fans that reaches over 300 million gaming enthusiasts on a monthly basis. Already the largest gaming platform in North America and the United Kingdom, the Company’s business is comprised of four main pillars: Esports, Content, Talent and Entertainment. Enthusiast Gaming’s esports division, Luminosity Gaming, is a leading global esports franchise that consists of 7 professional esports teams under ownership and management, including the Vancouver Titans Overwatch team and the Seattle Surge Call of Duty team. Enthusiast's gaming content division includes 2 of the top 20 gaming media and entertainment video brands with BCC Gaming and Arcade Cloud, reaching more than 50MM unique viewers a month across 9 YouTube pages, 8 Snapchat shows and related Facebook, Instagram and TikTok accounts. Its 100 gaming-related websites include The Sims Resource, Destructoid, and The Escapist. Enthusiast's talent division works with approximately 500 YouTube creators such as Pokimane, Flamingo, Anomaly, and The Sidemen. Enthusiast's entertainment business includes Canada’s largest gaming expo, EGLX (eglx.com), and the largest mobile gaming event in Europe, Pocket Gamer Connects (pgconnects.com). For more information on the Company visit enthusiastgaming.com. For more information on Luminosity Gaming visit luminosity.gg.

Forward Looking Statements
This news release contains certain statements that may constitute forward-looking information under applicable securities laws. All statements, other than those of historical fact, which address activities, events, outcomes, results, developments, performance or achievements that Enthusiast anticipates or expects may or will occur in the future (in whole or in part) should be considered forward-looking information. Such information may involve, but is not limited to, comments with respect to strategies, expectations, planned operations and future actions of the Company. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results "may", "could", "would", "might" or "will" (or other variations of the forgoing) be taken, occur, be achieved, or come to pass. Forward-looking information is based on currently available competitive, financial and economic data and operating plans, strategies or beliefs as of the date of this news release, but involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of Enthusiast to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors may be based on information currently available to Enthusiast, including information obtained from third-party industry analysts and other third-party sources, and are based on management's current expectations or beliefs regarding future growth, results of operations, future capital (including the amount, nature and sources of funding thereof) and expenditures. Any and all forward-looking information contained in this press release is expressly qualified by this cautionary statement. Trading in the securities of the Company should be considered highly speculative.

Neither the TSX Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Exchange) accepts responsibility for the adequacy or accuracy of this release.

Enthusiast Gaming Holdings Inc.
Condensed Interim Consolidated Statements of Financial Position
As at September 30, 2020 and December 31, 2019
				September 30, 2020			December 31, 2019
							(Audited)
	ASSETS
	Current
		Cash	$	8,526,400		$	13,211,722
		Investments		125,002			804,865
		Trade and other receivables		17,230,810			6,701,087
		Loans receivable		205,235			205,936
		Income tax receivable		283,065			-
		Prepaid expenses		821,029			612,386
	Total current assets			27,191,541			21,535,996
	Non-current
		Property and equipment		406,949			298,312
		Right-of-use asset - lease contract		3,178,922			733,413
		Long-term investment		2,755,340			2,480,405
		Investment in associates		1,003,687			914,295
		Long-term portion of prepaid expenses		-			104,630
		Intangible assets		82,625,437			60,017,320
		Goodwill		110,149,496			83,259,416
	Total Assets		$	227,311,372		$	169,343,787
	LIABILITIES AND SHAREHOLDERS' EQUITY
	Current
		Accounts payable and accrued liabilities	$	19,182,061		$	7,423,396
		Deferred revenue		1,260,183			1,647,594
		Income tax payable		-			2,415
		Deferred payment liability		1,332,854			1,208,413
		Current portion of lease contract liability		512,789			193,366
	Total current liabilities			22,287,887			10,475,184
	Non-current
		Long-term debt		22,310,203			19,691,220
		Long-term lease contract liability		2,703,040			548,846
		Convertible debentures		7,656,712			7,015,820
		Vendor-take-back loan		5,401,037			-
		Deferred payment liability		536,372			473,413
		Deferred tax liability		18,708,353			12,482,605
	Total liabilities		$	79,603,604		$	50,687,088
	Shareholders' Equity
		Share capital		226,212,402			176,511,857
		Shares to be returned to treasury		-			(3,858,756	)
		Warrants reserve		8,037,946			15,404,728
		Contributed surplus		9,872,621			9,439,324
		Accumulated other comprehensive income		156,117			90,078
		Deficit		(96,571,318	)		(78,930,532	)
	Total shareholders' equity			147,707,768			118,656,699
	Total liabilities and shareholders' equity		$	227,311,372		$	169,343,787

Enthusiast Gaming Holdings Inc.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
For the three and nine months ended September 30, 2020 and 2019
				For the three months ended						For the nine months ended
				September 30, 2020			September 30, 2019			September 30, 2020			September 30, 2019
	Revenue
		Revenue	$	16,328,946		$	3,007,307		$	30,287,614		$	3,007,307
		Gain on player buyout		-			-			204,764			-
	Total revenue			16,328,946			3,007,307			30,492,378			3,007,307
	Cost of sales			12,268,906			1,048,215			19,917,990			1,048,215
	Gross margin			4,060,040			1,959,092			10,574,388			1,959,092
	Operating expenses
		Professional fees		549,942			724,644			1,463,887			1,371,092
		Consulting fees		1,336,461			2,118,877			3,725,135			2,617,586
		Advertising and promotion		215,410			630,555			701,901			1,118,975
		Office and general		625,296			283,431			2,077,937			401,929
		Salaries and wages		2,304,003			591,490			5,191,402			658,516
		Technology support, web development and content		1,163,126			115,622			3,397,877			115,622
		eSports player, team and game expenses		760,844			808,063			2,244,640			808,063
		Foreign exchange (gain) loss		(23,125	)		120,347			(71,394	)		135,975
		Share-based compensation		203,963			2,156,199			873,211			2,549,819
		Amortization and depreciation		1,042,072			259,771			3,390,604			259,771
	Total operating expenses			8,177,992			7,808,999			22,995,200			10,037,348
	Other expenses (income)
		Listing expense		-			6,891,713			-			6,891,713
		Transaction cost		1,621,775			2,873,606			1,621,775			2,873,606
		Share of loss from investment in associates		808,011			-			2,080,358			-
		Interest and accretion		1,264,594			1,134,007			3,951,379			1,134,007
		Change in fair value of investment		(374,065	)		-			(211,050	)		-
		Loss on modification of long-term debt		806,879			-			806,879			-
		Interest income		(14,775	)		(590,292	)		(91,305	)		(658,515	)
	Net loss before income taxes			(8,230,371	)		(16,158,941	)		(20,578,848	)		(18,319,067	)
	Income taxes
		Current income tax expense		9,139			-			20,520			-
		Deferred income tax recovery		(143,623	)		-			(585,818	)		-
	Net loss for the period			(8,095,887	)		(16,158,941	)		(20,013,550	)		(18,319,067	)
	Other comprehensive income
	Items that may be reclassified to profit or loss
		Foreign currency translation adjustment		62,420			19,397			66,039			19,397
	Net loss and comprehensive loss for the period		$	(8,033,467	)	$	(16,139,544	)	$	(19,947,511	)	$	(18,299,670	)
	Net loss and comprehensive loss per share,
		basic and diluted	$	(0.10	)	$	(0.42	)	$	(0.26	)	$	(0.69	)
	Weighted average number of common shares
		outstanding, basic and diluted		83,147,816			38,601,234			76,651,219			26,376,710

Enthusiast Gaming Holdings Inc.
Condensed Interim Consolidated Statements of Cash Flows
For the three and nine months ended September 30, 2020 and 2019
			For the nine months ended
			September 30, 2020			September 30, 2019
	Cash flows from operating activities
	Net loss for the period	$	(20,013,550	)	$	(18,319,067	)
	Items not affecting cash:
	Amortization and depreciation		3,390,604			259,771
	Share-based compensation		873,211			2,549,819
	Interest and accretion		1,378,077			1,015,791
	Deferred income tax recovery		(585,818	)		-
	Gain on player buyout		(204,764	)		-
	Foreign exchange (gain) loss		(7,050	)		124,412
	Listing expense		-			6,891,713
	Capitalized interest and success fee		1,494,910			43,803
	Shares issued for services		138,172			355,892
	Loss on modification of long-term debt		806,879			-
	Provisions		90,366			-
	Change in fair value of investment		(211,050	)		-
	Share of loss from investment in associates		2,080,358			-
	Changes in working capital
	Changes in trade and other receivables		(1,916,067	)		(1,376,401	)
	Changes in prepaid expenses		63,250			14,868
	Changes in accounts payable and accrued liabilities		2,288,492			1,267,787
	Changes in deferred revenue		(387,411	)		-
	Changes in income tax receivable		(285,480	)		-
	Net cash used in operating activities		(11,006,871	)		(7,171,612	)
	Cash flows from investing activities
	Cash paid for acquisitions		(10,500,000	)		(1,500,000	)
	Business acquisitions, net of cash acquired		281,125			(10,727,844	)
	Proceeds from disposal of investment		680,000			-
	Deferred payment liability		-			(11,965,500	)
	Proceeds from disposal of intangible assets		204,764			-
	Investment in associate		(2,169,750	)		(1,330,690	)
	Acquisition of property and equipment		(4,871	)		(48,438	)
	Net cash used in investing activities		(11,508,732	)		(25,572,472	)
	Cash flows from financing activities
	Proceeds from the issuance of shares for the Offering, net of		15,609,257			-
	transaction cost
	Proceeds from the issuance of shares for subcription receipt		-			23,937,295
	proceeds, net of transaction cost
	Proceeds from convertible debenture, net of transaction costs		-			9,345,004
	Proceeds from long-term debt, net of tansaction costs		-			2,170,000
	Proceeds from exercise of warrants		2,354,246			345,531
	Proceeds from exercise of options		49,366			19,237
	Lease payments		(221,764	)		(22,186	)
	Net cash provided by financing activities		17,791,105			35,794,881
	Foreign exchange effect on cash		39,176			(6,491	)
	Net change in cash		(4,685,322	)		3,044,306
	Cash, beginning of period		13,211,722			4,155,054
	Cash, end of period	$	8,526,400		$	7,199,360

CONTACT: For further information: Enthusiast Gaming Contact: Alex Macdonald, CFO, 416.623.9360 Investor Relations Contact: Eric Bernofsky, Chief Corporate Officer, 416.623.9360 investor@enthusiastgaming.com Media Relations – ID Public Relations EnthusiastGaming@id-pr.com