Q3 revenue increased to $792,164 from $32,918 in Q3 2021
Recent corporate and operational highlights:
Leigh Hughes appointed as permanent CEO
Parabellum Esports partners with XP League
React Gaming signs definitive B2B agreement with HHR Philippines Inc.
Parabellum Esports partners with Viral Nation
React Gaming completes first $643,000 tranche of $5 million financing
Montréal, Québec, Canada, November 30, 2022 — React Gaming Group Inc. (“React Gaming” or the “Corporation”) (TSXV: RGG, OTCQB: ITMZF) is pleased to announce its results for the third quarter ended September 30, 2022. All amounts are in Canadian dollars unless otherwise indicated.
“Over the last few months, the React Gaming team has continued to gather momentum towards its objectives of increasing revenues and achieving long-term profitability,” said Leigh Hughes, CEO of React Gaming. “We have taken significant steps to reduce costs across all subsidiaries and also at the corporate level since I started and we are heading into 2023 with a very lean expenditure model. We have also held our first strategic planning session with the entire team to ensure that we start 2023 with a clear vision for achieving our goal of profitability across our entire ecosystem.”
“Our operations also remained very active,” he added. “We recently made major progress in the B2B model for our LOOT.BET platform by signing the definitive agreement with HHR Philippines, which has the potential to generate additional recurring revenues. Parabellum’s recent signings with Viral Nation and XP League will help build and market our esports professional teams business from the ground up. For its part, Compete.gg has just launched a new feature called Honor Dispute, which allows its esports tournament platform to integrate with almost any game title, and as a result has added more game titles to its library, including FIFA, Rocket League and Multiversus.”
“These initiatives are part of our ongoing efforts to improve our esports ecosystem value proposition and our financial performance, and we expect them to start having a positive impact on our financial results in 2023,” concluded Mr. Hughes.
Third quarter revenue increased to $792,164 in 2022 from $32,918 a year ago. The increase was mainly driven by Livestream and its operating entity LOOT.BET. Revenue for the nine-month period increased to $1,971,668 from $95,925 a year ago.
Gross profit for the third quarter totaled $389,091 (49.1% of total revenue), compared to $23,682 in 2021. For the nine-month period, gross profit increased to $954,408 (48.4% of total revenue) from $58,193 a year ago.
Operating loss for the third quarter totaled $1,635,418 compared to $1,496,874 in 2021. The increase was mainly due to LOOT.BET’s operating costs for Livestream’s ongoing operations relative to revenues generated. The operating loss for the nine-month period stood at $7,830,525 in 2022 versus $2,840,613 in 2021.
The EBITDA1 loss decreased to $981,462 in the third quarter of 2022 from $1,278,952 in the same quarter a year ago, mainly due to an increase in goodwill impairment in Q3 2022. For the nine-month period, EBITDA1 loss stood at $5,604,834 versus $2,281,543 a year ago.
For the third quarter ended September 30, 2022, the Company recorded a net loss of $2,095,032, or $0.013 per basic and diluted share, compared to $1,518,826, or $0.013 per basic and diluted share for the corresponding period of 2021. For the nine-month period, the net loss was $7,004,383 or $0.043 per basic and diluted share, compared to $2,885,344, or $0.026 per basic and diluted share a year ago.
The term EBITDA (earnings before interest, taxes, depreciation and amortization) does not have a standardized meaning prescribed by IFRS. Therefore, EBITDA may not be comparable to similar measures presented in other financial statements of other companies. The Company defines EBITDA as income from continuing operations before amortization of tangible and intangible assets, provision for impairment of goodwill and other intangible assets, interest, gains or losses on disposal of assets, gains on debt settlement, gains or losses on foreign exchange and income taxes.
Reconciliation of net loss to EBITDA
About React Gaming Group
React Gaming Group (TSXV: RGG) (OTCQB: ITMZF) is a publicly traded holding company that stands at the forefront of the esports and iGaming industry. By investing in innovative technologies that enhance tournaments, teams, and wagering, we provide our users with gaming platforms that produce non-stop action, exciting outcomes, and unparalleled enjoyment. Through the use of intelligent data, we also connect our sponsors to robust communities within the rapidly evolving industry, ensuring maximum engagement and substantial reward. For more information, please visit us at reactgaming.ca and follow us on LinkedIn, Twitter, Instagram and YouTube.
This news release may contain “forward-looking statements” within the meaning of applicable Canadian securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. These statements generally can be identified by the use of forward-looking words such as “may”, “should”, “will”, “could”, “intend”, “estimate”, “plan”, “anticipate”, “expect”, “believe” or “continue”, or the negative thereof or similar variations, and include but are not limited to the statements regarding the completion of the Private Placement, payment of a finder’s fee in connection with the Private Placement, the securities to be issued under the Private Placement, closing the Private Placement in tranches, the offering jurisdictions of the Private Placement, effecting the Share Consolidation, mailing of the information circular, and receipt of approval from the TSXV with respect to the Private Placement and Share Consolidation. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause future results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. The Corporation’s statements expressed or implied by these forward-looking statements are subject to a number of risks, uncertainties, and conditions, many of which are outside of the Corporation’s control, and undue reliance should not be placed on such statements. Forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding the Corporation’s activities, including: that the Corporation’s assumptions in making forward-looking statements may prove to be incorrect; general adverse market conditions and competition; the inability to finance operations and/or obtain any future strategic investment necessary to implement new technologies; the inability to build a sustainable, conscientious company with a stronger presence online through new products in esports and gaming; the inability to obtain, or maintain, gaming license(s); and that market conditions related to the COVID-19 pandemic may negatively affect the outcome of the business or operations of the Corporation, including its results and financial condition. Except as required by securities law, the Corporation does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.