Rivalry Corp. (the “
Company” or
“
Rivalry”) (TSXV: RVLY)(OTCQX: RVLCF) (FSE: 9VK),
an internationally regulated sports betting and media company,
today announced its financial results for the three-month period
ended March 31, 2023, and closing of the second tranche of its
previously announced strategic financing. All dollar figures are
quoted in Canadian dollars.
“Our position at the intersection of esports and
entertainment continues to create operating leverage in the
business and drive organic growth as seen in our most impressive
quarterly results to date,” said Steven Salz, Co-Founder and CEO of
Rivalry. “Rivalry’s content and brand strategy is setting the
industry precedent for betting entertainment, allowing us to
acquire customers profitably and engage them through authentic
touchpoints without having to consistently deploy additional
marketing and promotional spend for growth. And it is this approach
that is generating breakthrough industry economics, user
engagement, and charting a path to profitability for the Company
that we are very bullish on.”
First Quarter 2023
Highlights
- Betting handle
for the three-month period ended March 31, 2023 was $120.2 million,
representing an all-time high in any quarter for the Company.
Betting handle increased year-over year by $80.0 million or 199%
from $40.2 million in Q1 2022, and sequentially by $36.2 million or
43% from the previous quarterly record of $83.9 million in Q4
2022.
- Revenue for Q1
2023 was $12.0 million, the Company’s highest-ever revenue in any
quarter. Revenue increased by $7.2 million or 151% from $4.8
million in Q1 2022, and by $2.5 million or 27% over Q4 2022 revenue
of $9.4 million.
- Gross profit was
$5.4 million in Q1 2023, a record high for the Company representing
an increase of $4.8 million from $0.7 million of gross profit in Q1
2022, and up $0.4 million or 9% from Q4 2022 gross profit of $5.0
million.
- Net loss was
$3.3 million for Q1 2023, a 50% reduction from the net loss of $6.6
million in Q1 2022, and the fifth consecutive sequential decrease
in net loss, highlighting a continued focus on operational
efficiency.
- Material Key
Performance Indicators growth was achieved despite a 5%
year-over-year reduction in marketing expenses, demonstrating the
effectiveness of the Company's brand strategy and its ability to
convert users profitably and drive growth independent of marketing
spend.
- User
registrations reached 1.5 million at the end of Q1, up 114%
year-over-year, with Millennial and Gen Z consumers representing
97% of active users.
- Product and tech
innovation efforts across casino and sportsbook continue to
distinguish Rivalry in competitive market and drive user activity
through original, engaging, and interactive online betting
experience.
- Rivalry’s
creator partners and owned media properties reached a total of 85
million followers, deepening organic acquisition strategy among
core target audience and ability to activate customers during
tentpole esports events through authentic touchpoints.
- The Company had
$13.1 million of cash and no debt as at March 31, 2023.2 Subsequent
to the end of the quarter, the Company raised a total of
approximately $7.3 million through a non-brokered private placement
announced on April 26, 2023 (the “Private
Placement”).
“Building innovative products, which add to an
overall unique and interactive betting experience on Rivalry, will
remain a strategic focus in 2023,” Salz added. “The competitive
advantage of engaging and fun products is increased user activity
and satisfaction, and when combined with a profitable acquisition
strategy, creates a flywheel effect in the business generating
consistent organic momentum and enhancing our operational
efficiency.”
Previously Announced Strategic
Financing
Subsequent to the end of the first quarter,
Rivalry announced a strategic financing that will enable the
Company to accelerate its operational objectives and pursue
strategic growth opportunities. Led by sports betting, technology,
and payments stakeholders, the financing represents a validation of
the Company’s unique market strategy and success among the Gen Z
and Millennial demographic.
On May 5, 2023, the Company closed a first
tranche of the private placement for gross proceeds of
$6,916,519.50 through the issuance of 4,611,013 subordinate voting
shares in the capital of the Company (“Subordinate Voting
Shares”) at a price of $1.50 per Subordinate Voting Share.
On May 23, 2023, the Company closed a second tranche of the Private
Placement for aggregate gross proceeds of $382,498.50 through the
issuance of 254,999 Subordinate Voting Shares. The Company paid
finder’s fees in the amount of $19,775 in connection with the
closing of the second tranche of the Private Placement. In
connection with the Private Placement, the Company has issued an
aggregate of 4,866,012 Subordinate Voting Shares for gross proceeds
of $7,299,018. The Company expects to close an additional tranche
of the Private Placement no later than June 23, 2023. All of the
Subordinate Voting Shares issued in connection with the Private
Placement are subject to a four-month and one day statutory hold
period from the date of issuance. The Company expects to use the
proceeds from the Private Placement to accelerate operational
objectives and pursue strategic growth opportunities.
The Subordinate Voting Shares have not been, and
will not be, registered under the U.S. Securities Act of 1933, as
amended (the "U.S. Securities Act") or any U.S.
state securities laws and may not be offered or sold in the United
States absent registration or an available exemption from the
registration requirements of the U.S. Securities Act and applicable
U.S. state securities laws. This press release shall not constitute
an offer to sell or the solicitation of an offer to buy, nor shall
there be any sale of the securities referenced in this press
release, in any jurisdiction in which such offer, solicitation or
sale would be unlawful.
A director of the Company subscribed for 33,333
Subordinate Voting Shares in the Private Placement and such
subscription constitutes a related party transaction within the
meaning of applicable Canadian securities laws. This subscription
was exempt from the formal valuation and minority approval
requirements applicable to related party transactions on the basis
that the value of the transaction was less than 25% of the
Company's market capitalization. A material change report in
respect of the related party transaction could not be filed earlier
than 21 days prior to the closing of the Private Placement due to
the limited time between the commitment by the director to purchase
the subject Subordinate Voting Shares and the closing of the
Private Placement.
Investor Conference Call
Management will host a conference call at 10:00
a.m. EDT on Wednesday, May 24, 2023 to discuss the Company’s first
quarter 2023 financial results.
Dial-in: |
888-886-7786 (toll free) or (+1) 416-764-8658 (local or
international calls) |
Webcast: |
A live
webcast can be accessed from the Events section of the Company’s
website at www.rivalrycorp.com or at this link. |
A replay of the webcast will be archived on the
Company’s website for one year.
Rivalry’s financial statements and management
discussion and analysis for the three months ended March 31, 2023
are available on SEDAR at www.sedar.com, and on the Company’s
website at www.rivalrycorp.com.
About Rivalry
Rivalry Corp. wholly owns and operates Rivalry
Limited, a leading sport betting and media company offering fully
regulated online wagering on esports, traditional sports, and
casino for the next generation of bettors. Based in Toronto,
Rivalry operates a global team in more than 20 countries and
growing. Rivalry Limited has held an Isle of Man license since
2018, considered one of the premier online gambling jurisdictions.
Rivalry holds a sports bookmaker license in Australia and an
internet gaming registration in Ontario and is currently in the
process of obtaining additional country licenses. The Company also
has a variety of originally developed products, including Quest, an
on-site engagement experience, a first-party casino game called
Rushlane, and a proprietary casino platform that houses third-party
games, Casino.exe.
Investor Contact:Oakstrom
AdvisorsJeff Codispodiinvestors@rivalry.com
Rivalry Contact: Cody Luongo,
PR & Communicationscody@rivalry.com203-947-1936
Cautionary Note Regarding
Forward-Looking Information and Statements
This news release contains certain
forward-looking information within the meaning of applicable
Canadian securities laws (“forward-looking statements”). All
statements other than statements of present or historical fact are
forward-looking statements. Forward-looking statements are often,
but not always, identified by the use of words such as
“anticipate”, “achieve”, “could”, “believe”, “plan”, “intend”,
“objective”, “continuous”, “ongoing”, “estimate”, “outlook”,
“expect”, “project” and similar words, including negatives thereof,
suggesting future outcomes or that certain events or conditions
“may” or “will” occur. These statements are only predictions.
Forward-looking statements are based on the
opinions and estimates of management of the Company at the date the
statements are made based on information then available to the
Company. Various factors and assumptions are applied in drawing
conclusions or making the forecasts or projections set out in
forward-looking statements. Forward-looking statements are subject
to and involve a number of known and unknown, variables, risks and
uncertainties, many of which are beyond the control of the Company,
which may cause the Company’s actual performance and results to
differ materially from any projections of future performance or
results expressed or implied by such forward-looking statements.
Such factors, among other things, include regulatory or political
change such as changes in applicable laws and regulations; the
ability to obtain and maintain required licenses; the esports and
sports betting industry being a heavily regulated industry; the
complex and evolving regulatory environment for the online gaming
and online gambling industry; the success of esports and other
betting products are not guaranteed; changes in public perception
of the esports and online gambling industry; failure to retain or
add customers; the Company having a limited operating history;
negative cash flow from operations; operational risks;
cybersecurity risks; the impact of the COVID-19 pandemic; reliance
on management; reliance on third parties and third-party networks;
exchange rate risks; risks related to cryptocurrency transactions;
risk of intellectual property infringement or invalid claims; the
effect of capital market conditions and other factors on capital
availability; competition, including from more established or
better financed competitors; and general economic, market and
business conditions. For additional risks, please see the Company’s
annual information form for the year ended December 31, 2022 and
other disclosure documents available on the Company’s SEDAR profile
at www.sedar.com.
No assurance can be given that the expectations
reflected in forward-looking statements will prove to be correct.
Although the forward-looking statements contained in this news
release are based upon what management of the Company believes, or
believed at the time, to be reasonable assumptions, the Company
cannot assure shareholders that actual results will be consistent
with such forward-looking statements, as there may be other factors
that cause results not to be as anticipated, estimated or intended.
Readers should not place undue reliance on the forward-looking
statements and information contained in this news release. The
forward-looking information and forward-looking statements
contained in this press release are made as of the date of this
press release, and the Company does not undertake to update any
forward-looking information and/or forward-looking statements that
are contained or referenced herein, except in accordance with
applicable securities laws.
No stock exchange, securities commission or
other regulatory authority has approved or disapproved the
information contained herein. Neither the TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this press release.
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED
STATES OR FOR DISSEMINATION TO U.S. NEWS WIRE SERVICES.
Source: Rivalry Corp.
1 The Company defines “Betting Handle” or “Handle” as the total
dollar value accepted in wagers, adjusted for cancellations and
corrections. 2 Includes cash and cash equivalents of $8.5 million
and restricted cash of $4.5 million.
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