FansUnite Reports Second Quarter Fiscal 2022 Financial Results
Total revenue of $5.46 million in Q2 Fiscal 2022, an increase of 461% over Q2 Fiscal 2021
Total revenue for the six months ended June 30, 2022 was $15.13 million
Company signed licensing deal with Welsh bookmaker Dragon Bet to launch new sports betting portal, powered by FansUnite's Chameleon platform
Vancouver, British Columbia--(Newsfile Corp. - August 29, 2022) - FansUnite Entertainment Inc. (TSX: FANS) (OTCQX: FUNFF) ("FansUnite" or the "Company") announced that it has filed its consolidated interim financial statements and associated management's discussion and analysis ("MD&A") for the three and six months ended June 30, 2022. All amounts are stated in Canadian dollars unless otherwise indicated.
Second Quarter Fiscal 2022 Financial Highlights:
Total revenue for the three months ended June 30, 2022 was $5.46 million, an increase of approximately 461% as compared to $0.97 million over the same period in the last fiscal year
Total revenue for the six months ended June 30, 2022 was $15.13 million, an increase of approximately 640% as compared to $2.04 million over the same period in the last fiscal year
Gross margin of $2.25 million (41%) in Q2 Fiscal 2022, as compared to $0.41 million (42%) over the same period in the last fiscal year
Net loss of $15.91 million in Q2 Fiscal 2022, which includes non-cash expenses of $9.50 million, as compared to $2.93 million over the same period in the last fiscal year, which includes non-cash expenses of $0.68 million
As of June 30, 2022, the Company had net working capital of $8.8 million compared to $14.9 million at December 31, 2021
Second Quarter Fiscal 2022 Operational Highlights:
On April 19, 2022, the Company signed a Memorandum of Understanding to enter into a long-term licensing agreement with prominent Welsh bookmaking services provider Lovell Brothers Limited, owners of the Dragon Bet brand, to launch a new online sports wagering portal, www.dragonbet.co.uk, which will be powered by FansUnite's Chameleon iGaming platform
On June 9, 2022, the Company announced its intention to initiate a normal course issuer bid ("NCIB") with respect to its common shares through the facilities of the Canadian Securities Exchange. Pursuant to the NCIB, FansUnite may purchase up to 16,115,728 Shares, representing 5% of the issued and outstanding shares of that class as of June 9, 2022
On June 30, 2022, FansUnite announced that its common shares have been approved for listing on Toronto Stock Exchange ("TSX"), which will begin trading on the TSX under its existing symbol "FANS", effective at the market opening on July 5, 2022
Subsequent Events to Second Quarter Fiscal 2022:
On July 5, 2022, the Company's common shares began trading on the TSX under the symbol "FANS"
On July 13, 2022, the Company announced that it entered into a definitive three-year licensing agreement dated July 11, 2022 with Lovell Brothers Limited, owners of Dragon Bet, to launch a new online sports betting platform, www.dragonbet.co.uk, powered by FansUnite's Chameleon iGaming solution
On August 3, 2022, the Company's U.S.-based live activation brand Betting Hero entered into an agreement with Bankroll, a new luxury sports bar experience coming this fall to Philadelphia, Pennsylvania, to help build out Bankroll's sports betting-focused concierge team
On August 24, 2022 the Company entered into an agreement to license its proprietary Player Account Management software to Betr Holdings Inc. to run its new sports betting brand, betr.
"During the second quarter, we captured significant growth with revenue of $5.46 million, an increase of 461% compared to the same period last year," said Scott Burton, CEO of FansUnite. "Our B2B and B2C segments continued to deliver strong operational results, which were primarily driven by American Affiliate and McBookie. Additionally, this quarter saw us strengthening our operations to lay the groundwork for continued growth as we have entered a licensing agreement with Welsh bookmaker Dragon Bet and expanded American Affiliate's presence in the United States through its live activation arm Betting Hero."
Burton added, "Throughout the third quarter, we intend to reach new milestones in our B2B segment by signing more partnerships with global brands within the sports betting and iGaming industry and further expand all business verticals."
Certain information provided in this news release is extracted from the unaudited condensed consolidated interim financial statements (the "Financial Statements") and Management's Discussion & Analysis ("MD&A") of the Company for the three and six months ended June 30, 2022 and should be read in conjunction with them. It is only in the context of the 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 SEDAR.
About FansUnite Entertainment Inc.
FansUnite is a global sports and entertainment company, focusing on technology related to regulated and lawful online gaming. FansUnite's one-of-a-kind iGaming platform Chameleon offers operators a full suite of gaming solutions with a sports and esports focus geared for the next generation of online bettors and casino players. Along with providing B2B technology solutions, FansUnite operates multiple B2C brands, such as Scottish sportsbook McBookie and Brazilian esportsbook VamosGG, and produces casino style slot games under its Askott Games subsidiary. FansUnite is the parent company of North American-focused American Affiliate, which operates leading affiliate brands such as Betting Hero, Props.com, and BetPrep.
For further information, please contact:
Prit Singh, Investor Relations at FansUnite
ir@fansunite.com
(905) 510-7636
Scott Burton, Chief Executive Officer of FansUnite
scott@fansunite.com
Darius Eghdami, President of FansUnite
darius@fansunite.com
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATIONS SERVICES PROVIDERS HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE
DISCLAIMER REGARDING FINANCIAL INFORMATION:
The Company has also provided unaudited financial information for the second quarter of 2022, which has been prepared by management based on information currently available to the Company. Accordingly, such financial information may be subject to change based on the results of the Company's year-end audit. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation for purposes of applicable securities laws.
FORWARD-LOOKING INFORMATION:
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 FansUnite anticipates or expects may or will occur in the future (in whole or in part) should be considered forward-looking information. 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 statements in this news release include, but are not limited to, the Company's strategic objectives, goals, growth strategy and focus including growing revenue and free cash flow through improved operations, accretive acquisitions, internal expansion, integrating and innovating operations and revenue management; the Company continuing to target more B2B deals, both for its Chameleon iGaming platform and RNG casino games; the Company expanding its footprint in the domestic, international and US affiliate market; and the completion of the long-term licensing agreement with Lovell Brothers Limited, owners of Dragon Bet, to launch a new online sports betting portal, www.dragonbet.co.uk, on the Chameleon iGaming platform.
Forward-looking statements are based on assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, including, but not limited to, expectations and assumptions concerning: interest and foreign exchange rates; capital efficiencies, cost saving and synergies; growth and growth rates; the success in the online gambling and sports betting industry; the regulatory environment applicable to online gambling and sports betting; the technological infrastructure and support needed to host the Company's online gambling and sports betting platforms and applications; any cryptocurrency applications to the Company's business; and the Company's growth plan. While FansUnite considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Readers are cautioned not to place undue reliance on forward-looking statements. In addition, forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; audit-risks; risks associated with the regulatory environments in the jurisdictions the Company operates in; technology-related risks that could adversely affect the Company's ability to operate its online gambling and sports betting platforms and applications, risks related to the novel coronavirus (COVID-19) global pandemic and any effects it might have on the Company's business thereto. Readers are cautioned that the foregoing list is not exhaustive. For more information on the risk, uncertainties and assumptions that could cause anticipated opportunities and actual results to differ materially, please refer to the public filings of FansUnite which are available on SEDAR at www.sedar.com. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and thus are subject to change thereafter. FansUnite disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
FansUnite Entertainment Inc.
Condensed Consolidated Interim Statements of Financial Position
(Unaudited – Amounts Expressed in Canadian dollars)
June 30, 2022 | December 31, 2021 | |||||||
Assets | ||||||||
Current | ||||||||
Cash and cash equivalents | $ | 4,787,913 | $ | 13,973,867 | ||||
Restricted cash | 215,353 | 204,731 | ||||||
Short-term investments | 815,560 | 918,847 | ||||||
Receivables | 3 | 5,843,196 | 6,802,815 | |||||
Due from related parties | 10 | 236,031 | 77,671 | |||||
Prepaid expenses and deposits | 336,582 | 335,809 | ||||||
Total current assets | 12,234,635 | 22,313,740 | ||||||
Non-current |
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| ||||||
Equipment | 5 | 76,867 | 59,693 | |||||
Goodwill | 6 | 87,001,801 | 85,795,601 | |||||
Intangible assets | 6 | 59,892,534 | 69,360,587 | |||||
Digital currencies | 6 | 26,979 | 107,446 | |||||
Right of use assets | 5 | 432,784 | 108,719 | |||||
Deferred tax asset | 864,370 | 122,042 | ||||||
Long-term investments | 74,163 | 77,162 | ||||||
Total Assets | $ | 160,604,133 | $ | 177,944,990 | ||||
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Liabilities |
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Current |
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Accounts payable and accrued liabilities | 4 | $ | 3,131,107 | $ | 7,108,134 | |||
Due to related parties | 10 | 47,504 | 164,981 | |||||
Income taxes payable | 116,610 | 49,258 | ||||||
Deferred and contingent consideration | 9 | 19,136,465 | 22,157,999 | |||||
Lease liability | 5 | 164,799 | 71,043 | |||||
Total current liabilities | 22,596,485 | 29,551,415 | ||||||
Non-current |
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| ||||||
Deferred and contingent consideration | 9 | 63,034,269 | 65,068,849 | |||||
Lease liability | 5 | 216,694 | 39,411 | |||||
Total liabilities | 85,847,448 | 94,659,675 | ||||||
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Shareholders' Equity |
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Share capital | 7 | 121,583,155 | 110,370,147 | |||||
Share-based payment reserve | 8 | 7,484,659 | 4,486,909 | |||||
Warrant reserve | 5,491,367 | 5,491,367 | ||||||
Accumulated other comprehensive (loss) income | 2,544,125 | 209,448 | ||||||
Deficit | (62,346,621) | (37,272,556) | ||||||
Total Shareholders' Equity | 74,756,685 | 83,285,315 | ||||||
Total Liabilities and Shareholders' Equity | $ | 160,604,133 | $ | 177,944,990 | ||||
FansUnite Entertainment Inc.
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
(Unaudited - Amounts Expressed in Canadian dollars)
For the three months ended | For the six months ended | |||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||
Revenue | 15 | $ | 5,463,924 | $ | 973,723 | $ | 15,129,646 | $ | 2,043,291 | |||
Cost of revenue | (3,211,729) | (567,136) | (6,980,919) | (1,092,691) | ||||||||
Gross Margin | 2,252,195 | 406,587 | 8,148,727 | 950,600 | ||||||||
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Expenses |
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Selling, general and administrative | 14 | 15,395,181 | 3,347,797 | 27,186,643 | 6,403,401 | |||||||
Loss before other items | (13,142,986) | (2,941,210) | (19,037,916) | (5,452,801) | ||||||||
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Other items |
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Interest and other expenses (income), net | 14 | 3,139,792 | (11,087) | 6,431,181 | (34,477) | |||||||
Income tax expense (recovery): |
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|
|
| ||||||||
Current | (300,489) | - | 257,638 | - | ||||||||
Deferred, net | (72,731) | - | (652,671) | - | ||||||||
Net loss for the year | (15,909,558) | (2,930,123) | (25,074,064) | (5,418,324) | ||||||||
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Other comprehensive income |
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Revaluation loss on digital currencies | 6 | (56,033) | - | (70,756) | - | |||||||
Currency translation adjustment | 4,394,413 | (13,633) | 2,405,433 | (54,708) | ||||||||
Total comprehensive loss | $ | (11,571,178) | $ | (2,916,490) | $ | (22,739,387) | $ | (5,363,616) | ||||
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Loss per share - basic and diluted | $ | (0.04) | $ | (0.02) | $ | (0.08) | $ | (0.03) | ||||
Weighted average number of common shares outstanding - basic and diluted | 303,031,291 | 183,279,790 | 294,780,124 | 167,964,245 | ||||||||
FansUnite Entertainment Inc.
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited - Amounts Expressed in Canadian dollars)
For the six months ended June 30, | 2022 | 2021 | ||||
Operating activities: | ||||||
Net loss | $ | (25,074,065) | $ | (5,418,324) | ||
Restricted cash | (10,622) | - | ||||
Adjustments for non-cash items: |
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| ||||
Depreciation of equipment | 74,602 | 26,009 | ||||
Amortization of intangible assets | 10,352,431 | 883,518 | ||||
Accretion on liabilities | 6,312,637 | - | ||||
Conversion of subscription receipt liability | - | (776,865) | ||||
General & administrative expenses paid with common shares | 524,132 | - | ||||
Marketing expenses paid with digital currencies | 9,711 | 4,239 | ||||
Fair value gain on digital currencies | - | (44,315) | ||||
Unrealized fair value loss on investments | 119,252 | 11,250 | ||||
Share-based payments | 8 | 3,064,209 | 492,025 | |||
Non-cash interest and other income | 7,713 | - | ||||
Deferred tax recovery | (652,671) | - | ||||
Changes in non-cash working capital items: |
|
| ||||
Receivables | 3 | 960,840 | 215,042 | |||
Prepaid expenses and deposits | (773) | 390,801 | ||||
Income taxes payable | 67,352 | - | ||||
Accounts payable | 4 | (333,034) | 128,244 | |||
Net cash flows used in operating activities | (4,578,286) | (4,088,376) | ||||
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Investing activities |
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Payment of contingent consideration | 9 | (2,093,600) | - | |||
Foreign exchange on contingent consideration | 1,363,694 | - | ||||
Payment of net working capital adjustment | 4 | (3,801,993) | - | |||
Disposal (purchase) of intangibles | (13,351) | 70,597 | ||||
Proceeds (sale) of investments | (12,965) | 5,896 | ||||
Purchase of equipment | (42,081) | (3,925) | ||||
Net cash flows (used in) provided by investing activities | (4,600,296) | 72,568 | ||||
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Financing activities |
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Repayment of lease liability | 5 | (98,450) | (40,289) | |||
Proceeds from brokered financing | - | 12,144,896 | ||||
Proceeds from warrant/option exercise | 72,736 | 2,474,992 | ||||
Repurchase of shares | (26,937) | - | ||||
Repayment of notes and loans payable | - | (544,236) | ||||
Payments (to) from related parties | 10 | (287,790) | 8,793 | |||
Net cash flows (used in) provided by financing activities | (340,441) | 14,044,156 | ||||
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Effect of foreign exchange | 333,069 | 22,493 | ||||
Change in cash | (9,185,954) | 10,050,841 | ||||
Cash, beginning of the period | 13,973,867 | 4,431,139 | ||||
Cash, end of the period | $ | 4,787,913 | $ | 14,481,980 | ||
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