Mr. Scott Burton reports

FANSUNITE REPORTS SECOND QUARTER 2023 FINANCIAL RESULTS

Fansunite Entertainment Inc. has filed its condensed consolidated interim financial statements and associated management's discussion and analysis (MD&A) for the three- and six-month periods ended June 30, 2023. All amounts are stated in Canadian dollars unless otherwise indicated (as is always the case on Stockwatch unless otherwise stated).

Q2 fiscal 2023 earnings call details

Day:  Tuesday, Aug. 15, 2023

Time:  10 a.m. ET/7 a.m. PT

Topic:  Fansunite's Q2 fiscal 2023 financial results and growth outlook for the remainder of 2023

"We are excited to announce a significant increase in revenue and gross margins during the second quarter of fiscal 2023," said Scott Burton, chief executive officer of Fansunite. "During the quarter, we saw a 14-per-cent increase in revenues year over year while our overall gross margins exceeded 60 per cent due to our focus on higher margin operations. This renewed focus allowed us to record an EBITDA of $4.3-million during the quarter which was up from a loss of $11.1-million during the same quarter last year."

Mr. Burton added: "Following the sale of McBookie and the Chameleon i-gaming platform, we will focus more on growing business segments that produce significant cash flow. We intend to achieve this goal by scaling our affiliate business segment, led by Betting Hero, which has generated substantial revenue and high gross margins as well as identifying more opportunities to improve our operational and financial efficiency."

Second quarter fiscal 2023 financial highlights:

• Total revenue of $5.3-million in Q2 fiscal 2023, an increase of approximately 14 per cent over the same period in fiscal 2022.
• Gross margin of $3.3-million (62 per cent) in Q2 fiscal 2023, an increase of 70 per cent as compared with $2.0-million (41 per cent) in Q2 fiscal 2022.
• EBITDA (earnings before interest, taxes, depreciation and amortization) of $4.3-million in Q2 fiscal 2023, an increase of $15.3-million as compared with ($11.1)-million in Q2 fiscal 2022.
• Net loss of $500,000 in Q2 fiscal 2023, as compared with a net loss of $15.9-million in Q2 fiscal 2022.
• Unrestricted cash increased to $3.5-million as of June 30, 2023, as compared with $2.9-million as of Dec. 31, 2022
• Net working capital of $6.1-million as of June 30, 2023, as compared with ($4.2)-million as of Dec. 31, 2022.

Second quarter fiscal 2023 operational highlights:

• On May 2, 2023, the company announced the signing of a definitive agreement dated May 1, 2023, pursuant to which the company has sold to an arm's-length third party all of the shares in its wholly owned subsidiary, McBookie Ltd., a Scottish private limited company. Fansunite sold McBookie for $5.5-million in cash, a sale price which equates to 7.0 times its 2022 EBITDA. The transaction resulted in a gain on sale of $4.4-million.
• On May 9, 2023, the company announced the signing of a definitive asset purchase agreement dated May 8, 2023, pursuant to which the company has sold the source code related to the company's Chameleon gaming platform to Betr Holdings Inc. for total consideration of $10-million. The sale of the Chameleon i-gaming platform led to a gain on sale of $3.1-million being recognized.
• On June 16, 2023, the company announced it had received approval from the Toronto Stock Exchange to renew its normal course issuer bid for a 12-month period.

Growth outlook

The company has shifted its strategic focus to growing the more profitable affiliate segment by scaling its Betting Hero and Props.com operations and entering new North American markets once legislation is in place to regulate sports betting and i-gaming in those markets. In addition, the company plans to grow Betting Hero's additional revenue streams, namely Betting Hero Hotline and Betting Hero Research.

Fansunite also intends to allocate more resources on its high-margin business segments and achieve additional cost savings by realizing operational and financial efficiencies without disrupting its growth.

About Fansunite Entertainment Inc.

Fansunite is a global sports entertainment and gaming company, focused on the regulated and lawful sports betting affiliate market which includes customer acquisition, retention, support and reactivation. Fansunite has established itself as a leader in the North American affiliate market through its subsidiary American Affiliate Co LLC (AmAff). AmAff is a North American omnichannel customer acquisition company, covering both retail and digital customer activation for sportsbooks, casinos, poker and fantasy sports platforms.

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