Q2 FY2021 Highlights
- GameSquare reported revenue of
$1.1 million as Code Red’s influencer vertical had another strong quarter, and was up nearly 60% from Q1 FY2021, while talent management revenue grew by 15% versus Q1 FY2021; - Ended the quarter with
$4.3 million of cash on hand; - Closed an upsized
$7.0 million bought deal private placement in March; - Closed the acquisition of Reciprocity, which includes earn outs for performance of up to
US$7 million of revenue andUS$1.4 million of EBITDA in the 12 months following the closing of the transaction; - Announced select customer wins including production of the largest
NCAA esports tournament with Van Wagner,The Drew League , and Dexerto; - Named
Tony Hawk andJordan Belfort as advisors to the Company; - Announced the passing of board member,
Maurice J. Colson ; and - Appointed
Paul LeBreux to the Board of Directors.
Subsequent Events to Quarter End
- Acquired 100% of
NextGen Tech, LLC . (dba. as Complexity Gaming) (“Complexity”), a leading esports organization and one of only four esports organizations to have an exclusive partnership with Twitch; - Closed a private placement for
US$7.0 million , which was subscribed to and filled by the Jerry Jones family andGoff Capital , the former majority shareholders of Complexity; - Closed a bought deal financing of
$8.5 million led by Canaccord Genuity,Eight Capital ,Haywood Securities andEchelon Wealth Partners ; - As at
July 26, 2021 , the Company had a record cash balance of nearly$15 million ; - Completed the acquisition of
Swingman LLC (dba. Cut+Sew and Zoned) (“Cut+Sew/Zoned”), a digital lifestyle marketing agency; Appointed Paradigm Sports to GameSquare’s advisory board.
Management Comments and Outlook
“Code Red, our esports agency, had another strong quarter, with its ongoing focus on the influencer segment leading to growth of 57% over Q1 FY2021, and its talent management business growing more than15% versus the prior quarter,” said
“The acquisition of Complexity post quarter-end is transformational for GameSquare,” added
“Since going public in
Financial Review
GameSquare’s revenues were
Three months ended | Three months ended | Six months ended | Six months ended | |||||||||||
($ Canadian) | ||||||||||||||
Revenues | ||||||||||||||
Talent management service | $ | 202,571 | $ | - | $ | 378,356 | $ | - | ||||||
Influencer promotional fees | 714,808 | - | 1,170,843 | - | ||||||||||
Consulting fees | 88,520 | - | 501,955 | - | ||||||||||
Prize income and player revenue | 86,886 | - | 86,886 | - | ||||||||||
Production revenue | 14,031 | - | 14,031 | - | ||||||||||
Total Revenues | 1,106,816 | - | 2,152,071 | - | ||||||||||
Cost of sales | 835,535 | - | 1,761,770 | - | ||||||||||
Gross profit | 271,281 | - | 390,301 | - | ||||||||||
Other income | ||||||||||||||
Interest income | 536 | - | 963 | - | ||||||||||
Total other income | 536 | - | 963 | - | ||||||||||
Expenses | ||||||||||||||
Consulting and management fees | 1,319,870 | 102,419 | 1,844,082 | 186,632 | ||||||||||
Professional fees | 369,885 | 26,310 | 420,051 | 33,810 | ||||||||||
General office expenses | 392,946 | 1,294 | 466,710 | 2,258 | ||||||||||
Travel expenses | 122,582 | - | 122,843 | - | ||||||||||
Shareholder communications and filing fees | 65,228 | 8,865 | 121,899 | 10,000 | ||||||||||
Interest expense | 2,418 | 5,773 | 2,452 | 5,773 | ||||||||||
Bad debt expense | 58,151 | - | 58,151 | - | ||||||||||
Foreign exchange loss | (26,154 | ) | - | (4,740 | ) | - | ||||||||
Change in provision for reclamation deposit | - | - | (95,288 | ) | - | |||||||||
Share-based compensation | 664,961 | - | 758,310 | - | ||||||||||
Transaction costs | 9,141,820 | - | 9,141,820 | - | ||||||||||
Amortization | 724,637 | - | 848,141 | - | ||||||||||
Total expenses | 12,836,344 | 144,661 | 13,684,431 | 238,473 | ||||||||||
Loss for the period before income taxes | (12,564,527 | ) | (144,661 | ) | (13,293,167 | ) | (238,473 | ) | ||||||
Income tax (recovery) | (186,285 | ) | - | (225,329 | ) | - | ||||||||
Loss for the period | (12,378,242 | ) | (144,661 | ) | (13,067,838 | ) | (238,473 | ) | ||||||
Other comprehensive income | ||||||||||||||
Items that will subsequently be reclassified to operations: | ||||||||||||||
Foreign currency translation | (337,283 | ) | - | (220,664 | ) | - | ||||||||
Total comprehensive loss for the period | $ | (12,715,525 | ) | $ | (144,661 | ) | $ | (13,288,502 | ) | $ | (238,473 | ) | ||
(Loss) profit for the period attributable to: | ||||||||||||||
Owners of the parent | (12,383,998 | ) | (144,661 | ) | (13,073,594 | ) | (238,473 | ) | ||||||
Non-controlling interest | 5,756 | - | 5,756 | - | ||||||||||
$ | (12,378,242 | ) | $ | (144,661 | ) | $ | (13,067,838 | ) | $ | (238,473 | ) | |||
Basic and diluted net loss per share | $ | (0.12 | ) | $ | (0.01 | ) | $ | (0.16 | ) | $ | (0.01 | ) | ||
Weighted average number of common shares outstanding - basic and diluted | 106,555,112 | 20,000,000 | 79,659,921 | 20,000,000 | ||||||||||
Conference Call Details
CEO
Date:
Time:
Phone: 1-800-319-4610 (
A replay will be available until
About
Contact
For further information, please contact
Email: IR@gamesquare.com
Phone: (416) 930-2949
Forward-Looking Information
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the Company’s ability to integrate and monetize its core asset portfolio, particularly Complexity, to accelerate its business objectives of revenue growth and profitability, to capitalize on the accelerating growth of esports audiences, to be a leader in bridging the gap between global brands and esports audiences, and to continue to build a pipeline of strategic acquisition targets in esports and sports and entertainment more broadly; the content of the conference call; the business and operations of the Company; and the Company’s ability to execute its business plan. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. GameSquare assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
Neither the Canadian Securities Exchange (“CSE”) nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
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