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FansUnite Announces Third Quarter 2021 Results and Provides Q3 Business Highlights
November 29, 2021 7:36 PM EST | Source: FansUnite Entertainment Inc.
Vancouver, British Columbia--(Newsfile Corp. - November 29, 2021) - FansUnite Entertainment Inc. (CSE: FANS) (OTCQX: FUNFF) ("FansUnite" or the "Company"), announces it has filed its consolidated interim financial statements and associated management's discussion and analysis ("MD&A") for the three and nine months ended September 30, 2021. All amounts are stated in Canadian dollars unless otherwise indicated.
"Q3 2021 was another strong quarter for FansUnite as we saw continued growth across all business units," said Scott Burton, CEO of FansUnite. "During the quarter, we successfully closed an oversubscribed brokered financing of approximately $25 million, and despite typical seasonality in the sporting world in the summer months, we saw strong year over year revenue growth."
"After the quarter ended, we announced our largest milestone to date with the acquisition of American Affiliate. As part of our strategy to enter the U.S. betting market, we believe American Affiliate will serve as a pillar of growth for us as we look to tackle one of the largest gambling landscapes in the world."
Financial highlights for the three-months ended September 30, 2021 include:
- The Company ended the quarter with a healthy balance sheet with cash and cash equivalents of $35.2 million, an increase of $30.8 million from the same period last year.
- An increase of 22% in revenue for the three months ended September 30, 2021 compared to September 30, 2020.
- Total betting turnover of $10.6 million for the three months ended September 30, 2021 compared to $8.9 million for the three months ended September 30, 2020.
- Net comprehensive loss of $2,643,981, or $0.01 per common share, vs. $2,448,501, or $0.02 per common share for the same period in 2020.
Financial highlights for the nine-months ended September 30, 2021 include:
- An increase of 227% in revenue for the nine months ended September 30, 2021 compared to September 30, 2020.
- Total revenue of $2.6 million, which has already surpassed the 2020 yearly totals by over $1.1 million.
- Total betting turnover of $51.8 million for the nine months ended September 30, 2021 compared to $19.2 million for the nine months ended September 30, 2020.
- Net comprehensive loss of $8,007,597, or $0.04 per common share, vs. $11,193,335, or $0.15 per common share for the same period in 2020.
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 nine months ended September 30, 2021 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.
Operational highlights during the quarter include:
- FansUnite received both B2C and B2B licenses from the UK Gambling Commission, enabling the Company to operate as a technology provider and an operator in the UK online gambling market.
- Completed an oversubscribed brokered financing of approximately $25.0 million in order to expand operations and pursue M&A opportunities.
- Continued to expand the team with the appointment of industry veterans Anna Smith as Head of Compliance, and Michael Lee as VP of gaming.
- Signed multiple data provider partnerships for the Chameleon platform including Pariplay, SportsIQ, Pythia and Algosport to further enhance the platform's capabilities.
- Announced KPMG LLP ("KPMG") as the Company's auditor. KPMG is a Canadian leader in delivering Audit, Tax, and Advisory services. KPMG responds to clients' complex business challenges across the country and around the world. They have significant expertise in our sector, and also have the bench strength to support our growing business and planned expansion initiatives. We look forward to working with KPMG.
American Affiliate Transaction Highlights:
- Accelerates Entry into U.S. Gaming Market: American Affiliates' Betting Hero brand is the #1 live activation company in the U.S. sports betting and online gambling market.
- Revenue and EBITDA Growth: American Affiliate has produced trailing 12 months revenue and EBITDA of US$13.1 million and US$6.0 million respectively.
- High-Value Customer Base: American Affiliate's assets have generated over 150,000 new depositing customers for legal U.S. online betting operators.
- Partnerships with Tier-One Sportsbooks: Partnerships with leading sportsbooks and casinos including BetMGM, DraftKings, FanDuel, PointsBet, Underdog Fantasy, WynnBet, and more.
- Strong Alignment with Existing Management and Shareholders: Consideration shares to be issued at a 42% premium to market price with share restrictions over a three-year period.
- U.S. Pure Play: The only at-scale affiliate company focused primarily on the U.S. market.
- True Omni-Channel: A premier at-scale omni-channel affiliate in the U.S. market, combining marquee digital brands with a best-in-class live activation arm.
- Leading Intellectual Property Portfolio: Category-leading portfolio of proprietary technology.
- World-Class Executive Team: Tier-one executive and management team with a history of success and scale in the U.S. gaming market.
A presentation outlining the transaction can be found:
https://www.fansunite.com/press/american-affliate-acquisition
About FansUnite Entertainment Inc.
FansUnite is a global sports and entertainment company, focusing on technology related to regulated and lawful online gaming and other related products. FansUnite has produced a one-of-a-kind complete iGaming platform, with a sports and esports focus geared for the next generation of online bettors and casino players. The platform includes products for pre-match betting, in-play betting, daily fantasy, content and a certified RNG to produce casino style chance games. The platform operates multiple B2C brands and B2B software for the online gambling industry. FansUnite also looks to acquire technology platforms and assets with high growth potential in new or developing markets. The Company also provides technological solutions and services in the global gaming and entertainment industries. Its technology includes fixed/parimutuel odds, in-stream betting, live betting, casino-style games, cryptocurrency wallet and news content.
About American Affiliate
American Affiliate brings together a diverse portfolio of assets that are all dedicated to generating new depositing customers for legal sportsbooks, online casinos, online poker sites, and adjacent products in the U.S. market.
American Affiliate's vision blends an exclusive focus on the U.S. opportunity with marquee brands, a powerful omni-channel approach, a deep portfolio of proprietary technology, and a uniquely qualified management team.
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
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 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 FansUnite 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 FansUnite, 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.
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; risks associated with the regulatory environments in the jurisdictions the Company operate in; technology-related risks that could adversely effect 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.
| September 30 | December 31 | ||||||
| 2021 | 2020 | ||||||
| Assets | |||||||
| Current | |||||||
| Cash | $ | 35,239,724 | $ | 4,431,139 | |||
| Restricted cash related to customer deposits | 203,621 | - | |||||
| Short-term investment | - | 5,896 | |||||
| Receivables | 372,403 | 585,228 | |||||
| Due from related parties (note 6) | 59,112 | - | |||||
| Prepaid expenses and deposits | 683,652 | 783,739 | |||||
| Digital currencies | 85,274 | 22,453 | |||||
| Total current assets | 36,643,786 | 5,828,455 | |||||
| Non-current | |||||||
| Equipment | 15,128 | 10,538 | |||||
| Goodwill (note 3) | 9,757,668 | 9,757,668 | |||||
| Intangible assets (note 3) | 8,165,515 | 9,556,407 | |||||
| Right of use assets | 11,326 | 14,821 | |||||
| Long-term investment | 78,042 | 87,792 | |||||
| Total Assets | $ | 54,671,465 | | $ | 25,255,681 | ||
| | |||||||
| Liabilities | |||||||
| Current | |||||||
| Accounts payable and accrued liabilities | $ | 652,888 | $ | 496,588 | |||
| Due to related parties (note 6) | 29,629 | 500,350 | |||||
| Subscription receipts liability | - | 776,865 | |||||
| Lease liability | 11,815 | 27,865 | |||||
| Total current liabilities | 694,332 | 1,801,668 | |||||
| Non-current | |||||||
| Long-term debt | 48,554 | 91,517 | |||||
| Deferred tax liability | 95,432 | 469,589 | |||||
| Total liabilities | 838,318 | 2,362,774 | |||||
| | |||||||
| Shareholders' Equity | |||||||
| Share capital (note 4) | 73,522,954 | 39,690,610 | |||||
| Share-based payment reserve (note 5) | 3,021,014 | 2,500,289 | |||||
| Warrant reserve (note 4) | 5,491,367 | 896,599 | |||||
| Accumulated other comprehensive income | 77,188 | 28,462 | |||||
| Deficit | (28,279,376 | ) | (20,223,053 | ) | |||
| Total Shareholders' Equity | 53,833,147 | 22,892,907 | |||||
| Total Liabilities and Shareholders' Equity | $ | 54,671,465 | $ | 25,255,681 | |||
| For the three months ended September 30 | For the nine months ended September 30 | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Revenue (note 10, 11) | $ | 580,024 | $ | 473,562 | $ | 2,623,315 | $ | 802,446 | ||||
| Cost of sales (note 11) | 496,224 | 303,882 | 1,588,915 | 539,933 | ||||||||
| Gross Margin | 83,800 | 169,680 | 1,034,400 | 262,513 | ||||||||
| | ||||||||||||
| Expenses | ||||||||||||
| Amortization of intangible assets (note 3) | 515,705 | 378,351 | 1,399,223 | 684,185 | ||||||||
| Amortization of equipment | 13,705 | 8,309 | 39,714 | 8,815 | ||||||||
| Foreign exchange loss (gain) | 1,394 | (17,282 | ) | 2,794 | (3,244 | ) | ||||||
| General and administrative | 407,837 | 159,729 | 1,213,748 | 349,386 | ||||||||
| Professional fees | 501,411 | 430,596 | 1,628,519 | 748,909 | ||||||||
| Salaries and wages (note 6) | 772,091 | 428,386 | 2,448,396 | 798,236 | ||||||||
| Sales and marketing | 667,536 | 711,419 | 2,058,661 | 1,068,264 | ||||||||
| Share-based payments (note 5) | 243,506 | 536,840 | 735,531 | 7,710,348 | ||||||||
| Total expenses (note 11) | 3,123,185 | 2,636,348 | 9,526,586 | 11,364,899 | ||||||||
| Loss before other items | (3,039,385 | ) | (2,466,668 | ) | (8,492,186 | ) | (11,102,386 | ) | ||||
| Other items | ||||||||||||
| Interest income | (15,745 | ) | (37,800 | ) | (17,157 | ) | (78,466 | ) | ||||
| Unrealized fair value gain on digital currencies and investments | (24,245 | ) | (4,040 | ) | (57,310 | ) | (23,606 | ) | ||||
| Excess paid over identifiable assets acquired | - | 20,753 | - | 191,992 | ||||||||
| Total other items | (39,990 | ) | (21,087 | ) | (74,467 | ) | 89,920 | |||||
| Net loss before taxes | (2,999,395 | ) | (2,445,581 | ) | (8,417,719 | ) | (11,192,306 | ) | ||||
| Income tax expense (recovery): | ||||||||||||
| Current | 13,604 | - | 13,604 | - | ||||||||
| Deferred, net | (375,000 | ) | - | (375,000 | ) | - | ||||||
| (361,396 | ) | - | (361,396 | ) | - | |||||||
| Net loss for the period | (2,637,999 | ) | (2,445,581 | ) | (8,056,323 | ) | (11,192,306 | ) | ||||
| | ||||||||||||
| Other comprehensive loss (income) | ||||||||||||
| Currency translation adjustment | 5,982 | 2,920 | (48,726 | ) | 1,049 | |||||||
| Total comprehensive loss | $ | (2,643,981 | ) | $ | (2,448,501 | ) | $ | (8,007,597 | ) | $ | (11,193,335 | ) |
| | ||||||||||||
| Loss per share - basic and diluted | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.15 | ) |
| Weighted average number of common shares outstanding - basic and diluted | 210,853,220 | 116,656,596 | 187,159,508 | 74,397,986 | ||||||||
| Nine months ended September 30 | |||||||
| 2021 | 2020 | ||||||
| Operating activities: | |||||||
| Net loss for the period | $ | (8,056,323 | ) | $ | (11,192,306 | ) | |
| Advances from related parties (note 6) | 29,731 | - | |||||
| Restricted cash related to customer deposits | (203,621 | ) | - | ||||
| Adjustments for non-cash items: | |||||||
| Amortization of equipment | 39,714 | 8,815 | |||||
| Amortization of intangible assets (note 3) | 1,399,223 | 684,185 | |||||
| Conversion of subscription receipt liability (note 4(a)) | (776,865 | ) | - | ||||
| Marketing expenses paid with digital currencies | 4,239 | - | |||||
| Unrealized fair value gain on digital currencies and investments | (57,310 | ) | (23,606 | ) | |||
| Share-based payments (note 5) | 735,531 | 7,710,348 | |||||
| Income tax recovery | (375,000 | ) | - | ||||
| Changes in non-cash working capital items: | |||||||
| Receivables | 212,825 | 310,837 | |||||
| Prepaid expenses and deposits | 100,087 | (1,149,066 | ) | ||||
| Accounts payable | 156,300 | (556,122 | ) | ||||
| Net cash flows used in operating activities | (6,791,469 | ) | (4,206,915 | ) | |||
| Investing activities | |||||||
| Proceeds from sale of investments | - | 55,100 | |||||
| Purchase of equipment | (4,946 | ) | (1,927 | ) | |||
| Net cash flows (used in) provided by investing activities | (4,946 | ) | 53,173 | ||||
| Financing activities | |||||||
| Net proceeds from private placements | - | 7,078,244 | |||||
| Proceeds from amalgamation with HIC | - | 316,530 | |||||
| Funds used in acquisition of McBookie | - | (365,508 | ) | ||||
| Proceeds from the acquisition of Askott Entertainment Inc. | - | 638,292 | |||||
| Proceeds from V2G Loan | - | 238,257 | |||||
| Repayment of lease liability | (46,533 | ) | (4,903 | ) | |||
| Net proceeds from brokered financings (note 4(a) and (b)) | 35,003,551 | - | |||||
| Proceeds from warrant/option exercise (note 4© and (d)) | 3,208,755 | 6,216 | |||||
| Proceeds from government loan | - | 40,000 | |||||
| Repayment of note payable (note 6) | (500,350 | ) | - | ||||
| Payment to related parties (note 6) | (59,112 | ) | - | ||||
| Repayment of loan | (42,963 | ) | - | ||||
| Net cash flows provided by financing activities | 37,563,348 | 7,947,128 | |||||
| Effect of foreign exchange | 41,652 | (394 | ) | ||||
| Change in cash | 30,808,585 | 3,792,992 | |||||
| Cash, beginning of the period | 4,431,139 | 84,058 | |||||
| Cash, end of the period | $ | 35,239,724 | $ | 3,877,050 | |||
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/105754