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OverActive Media Corp. Management Reports 2025
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Management Reports
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OVERACTIVE MEDIA
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following has been prepared for the purposes of providing management's discussion and analysis ("MD&A") of the condensed consolidated interim financial position and results of OverActive Media Corp. ("OverActive Media", "we" or the "Company"). The following information should be read in conjunction with the Company's condensed consolidated interim financial statements for the three months ended March 31, 2025 and 2024 and the notes to those financial statements, which have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB"); the 2024 Annual MD&A the 2024 Annual Audited Consolidated Financial Statements and notes thereto, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the IASB.
This MD&A is dated May 28, 2025, and was prepared with information available at that date. All dollar amounts are stated in thousands of Canadian Dollars and all figures are presented in thousands unless otherwise indicated.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This MD&A contains "forward-looking information" within the meaning of applicable Canadian securities legislation ("forward-looking information"). Such forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made, and readers are advised to consider such forward-looking statements in light of the risks set forth below and as detailed under "Risks and Uncertainties" in this MD&A.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking information contained herein is given as of the date of this MD&A and the Company disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that forward-looking information 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 forward-looking information.
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
NON-IFRS FINANCIAL MEASURES
This MD&A includes references to adjusted EBITDA. Adjusted EBITDA is a non-IFRS financial measure and is defined by the Company as net income or loss before income taxes, finance costs, depreciation and amortization, decrease in net present value of franchise obligations, foreign exchange gains / loss, assistance payments from Franchise League and government assistance, restructuring and business development costs, impairment charges, and share-based compensation. We believe that adjusted EBITDA is a useful measure of financial performance because it provides an indication of the Company’s ability to capitalize on growth opportunities in a cost-effective manner, finance its ongoing operations and service its financial obligations.
This non-IFRS financial measure is not an earnings or cash flow measure recognized by IFRS and does not have a standardized meaning prescribed by IFRS. Our method of calculating such a financial measure may differ from the methods used by other issuers and, accordingly, our definition of this non-IFRS financial measure may not be comparable to similar measures presented by other issuers. Investors are cautioned that non-IFRS financial measures should not be construed as an alternative to net income determined in accordance with IFRS as indicators of our performance or to cash flows from operating activities as measures of liquidity and cash flows.
BUSINESS OVERVIEW
OverActive Media Corp. (TSXV: OAM) (OTC: OAMCF) is a premier global exports and entertainment company for today’s generation of fans headquartered in Toronto, Canada, with additional operations in Madrid, Spain, and Berlin, Germany. The company delivers premium experiences by operating top-tier competitive teams and complementary business units across media, content, and live events.
OverActive operates through two core business segments:
Team Operations
This segment captures revenues and expenses from league share payouts in the Company's various exports pro leagues, performance-based revenue, sticker sales, and tournament prize winnings.
OverActive owns and manages elite competitive teams under two brands:
- Movistar KOI
- League of Legends EMEA Championship (LEC)
- VALORANT Champions Tour EMEA (VCT EMEA)
- LVP Superliga (Spain)
- LVP Free Fire (Mexico)
- Esports World Cup Partnership Program
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
Movistar KOI is OverActive's flagship brand and is recognized for having one of the largest and most engaged fan bases in the world. The brand consistently ranks at or near the top of viewership leaderboards across its titles. In League of Legends, the world's most watched esport by peak viewership, and other competitive games, Movistar KOI matches are appointment viewing, drawing dedicated audiences and driving cultural relevance.
- Toronto Ultra
- Call of Duty League (CDL)
Business Operations
This segment includes the Company's commercial activities such as sponsorship and partnership programs, merchandising, original content, and fan experiences. OverActive also operates a digital media agency, an influencer agency, a content production studio, and a live event business. Through strategic partnerships with influencers and content providers, the Company expands the reach and impact of its brands across global digital platforms.
On March 1, 2024, OverActive completed two strategic acquisitions: the full share acquisition of Team Randomk Esports S.L. (Movistar Riders) and the asset purchase of esports properties from Goatch Global S.L. (KOI), (collectively, the "Transactions"). These Transactions significantly strengthened the Company's position across EMEA and Latin America by adding complementary titles, industry-leading talent, and highly engaged communities.
OverActive's brands compete and connect at the highest levels of performance and cultural relevance. The Company is focused on building globally recognized, fan-driven media brands that go beyond gameplay through digital storytelling, immersive experiences, and expansion into high-growth markets such as Latin America and China.
First Quarter 2025 Operations Highlights
- OverActive Media hosted Major I of the 2025 Call of Duty League season in Madrid in partnership with Movistar KOI. The event drew over 12,000 fans and peaked at 233,000 concurrent online viewers.
- OverActive's Toronto Ultra were awarded 2024 Esports Event of the Year for Major III and 2024 Esports Organization of the Year by the Canadian Game Awards.
- OverActive's Movistar KOI announced expansion into the Latin American market through entry into the Free Fire League, the official competitive circuit in Latin America with a pathway to international competitions, including the Esports World Cup.
- OverActive's Movistar KOI announced expansion into the Chinese market through China's top social media and streaming platforms, Weibo and Bilibili.
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
- OverActive’s Toronto Ultra announced that the Call of Duty League World Championships will be hosted in the Waterloo Region, marking the first time the event will be hosted outside of the United States.
Significant Announcements Subsequent to Quarter End
- OverActive Media hosted LEC Roadtrip event in Madrid Arena on April 26th and 27th. The event drew over 18,000 fans and peaked at 348,000 online viewers.
- OverActive Media’s Movistar KOI launched Fenix Club Gaming, the company’s first ever subscription based direct-to-consumer platform offering members exclusive benefits including merchandise discounts, early access to event ticket sales, exclusive giveaways, and access to dedicated channels for community engagement.
- OverActive renewed partnerships with Monster Energy for the remainder of the fiscal year.
QUARTERLY HIGHLIGHTS
- Revenue increased to $5,004 for the three-month period ended March 31, 2025, compared to $3,659 for the three-month period ended March 31, 2024.
- Gross profit decreased to $2,616 for the three-month period ended March 31, 2025, compared to $2,749 for the three-month period ended March 31, 2024.
- Net loss for the period was $3,676 for the three-month period ended March 31, 2025, compared to a net loss for the period of $4,395 for the three-month period ended March 31, 2024.
- Adjusted EBITDA loss was $2,269 for the three-month period ended March 31, 2025, compared to an Adjusted EBITDA loss of $1,822 for the three-month period ended March 31, 2024.
SELECTED QUARTERLY FINANCIAL INFORMATION
The selected financial information below was derived from the Company’s unaudited condensed consolidated interim financial statements for the three months ended March 31, 2025 and 2024.
| (In thousands of Canadian dollars, except per share amount, unaudited) | March 31, 2025 | March 31, 2024 |
|---|---|---|
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
| Revenue | $5,004 | $3,659 |
|---|---|---|
| Cost of sales | 2,388 | 910 |
| Gross profit | 2,616 | 2,749 |
| Operating costs | 4,892 | 5,332 |
| Other expenses (income): | ||
| Depreciation | 581 | 512 |
| Amortization of intangible assets | 335 | - |
| Foreign exchange loss | 40 | 436 |
| Finance income | (13) | (104) |
| Finance cost | 76 | 1,122 |
| Share-based compensation (recovery) | 386 | (56) |
| One-time gain | (162) | - |
| Other income | (6) | (147) |
| Loss before income taxes | (3,513) | (4,346) |
| Income tax expense | 163 | 49 |
| Net loss for the period | (3,676) | (4,395) |
| Other comprehensive income (loss): | ||
| Foreign currency translation | 1,680 | (83) |
| Comprehensive loss for the period | ($1,996) | ($4,478) |
| Loss per share: | ||
| Basic and diluted | ($0.03) | ($0.05) |
| Adjusted EBITDA¹ | ($2,269) | ($1,822) |
| Balance Sheet Summary: | ||
| Total assets | 72,441 | 93,891 |
¹ Adjusted EBITDA is a non-IFRS measure. Refer to “Non-IFRS Measures” and “Reconciliation of Net Loss to Adjusted EBITDA”.
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
Total liabilities 22,456 40,553
Revenue by segment:
Team Operations 1,039 1,944
Business Operations 3,965 1,715
Gross profit by segment:
Team Operations 948 1,610
Business Operations 1,668 1,139
Loss before income taxes by segment:
Team Operations (1,117) (1,619)
Business Operations (2,396) (2,727)
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
The following table presents a reconciliation of net loss to adjusted EBITDA for the three months ended March 31, 2025 and 2024:
| (In thousands of Canadian dollars) | March 31, 2025 | March 31, 2024 |
|---|---|---|
| $ | $ | |
| Net loss for the period | (3,676) | (4,395) |
| Income tax expense | 163 | 49 |
| Depreciation | 581 | 512 |
| Amortization | 335 | - |
| Finance income | (13) | (104) |
| Finance cost | 76 | 1,122 |
| Foreign exchange loss | 40 | 436 |
| Share-based compensation (recovery) | 386 | (56) |
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
| One-time gain | (162) | - |
|---|---|---|
| Other income | (6) | - |
| Restructuring and development and other costs | 7 | 614 |
| Adjusted EBITDA | (2,269) | (1,822) |
RESULTS OF OPERATIONS
Revenues
For the three months ended March 31, 2025, revenues amounted to $5,004 as compared to $3,659 for the three months ended March 31, 2024, representing an increase of $1,345.
Revenues for our Team Operations segment decreased by $905 to $1,039 for the three months ended March 31, 2025, as compared to $1,944 for the same period in 2024. The decrease is primarily attributable to OverActive Media's strategic exit from the Counter Strike ecosystem, which eliminated potential revenue from in-game Sticker sales. Further, Toronto Ultra's overall placement in the first two Majors of the year declined compared to the prior year, resulting in reduced prize earnings. Together, these factors contributed to the year-over-year decrease in Team Operations revenue.
Revenues for our Business Operations segment increased by $2,250 to $3,965 for the three months ended March 31, 2025, as compared to $1,715 for the same period in 2024. The increase is primarily driven by the acquisitions of KOI and Movistar Riders, which contributed a full quarter of revenue in the current period, whereas only one month of results (March 2024) was included in the prior year's comparative period. Additionally, the Company hosted Major 1 of the Call of Duty League during the quarter, generating significant revenue from ticket sales and league subsidies.
Gross Profit
For the three months ended March 31, 2025, the Company reported gross profit of $2,616, compared to $2,749 for the three months ended March 31, 2024, representing a decrease of $133. This decline is primarily driven by cessation of Counter-Strike related revenues, which historically carried a significantly lower cost of sales. In contrast, the first quarter of 2025 includes a full period of contributions from KOI and Movistar Riders, which are associated with comparatively higher cost of sales. The combined effect of these changes led to the year-over-year reduction in gross profit.
Operating Costs
For the three months ended March 31, 2025, operating costs amounted to $4,892 as compared to $5,332 for the three months ended March 31, 2024, representing a decrease of $440. This reduction reflects effective cost management across selling, general, and administrative expenses, as well as the absence of restructuring and acquisition-related costs in the current period. The elimination of these one-time expenses contributed to the overall year-over-year decline in operating costs and improved operational efficiency.
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
Adjusted EBITDA
For the three months ended March 31, 2025 adjusted EBITDA loss amounted to $2,269 as compared to an adjusted EBITDA loss of $1,822 for the three months ended March 31, 2024, representing an increased loss of $447. The higher loss was primarily driven by a decline in gross profit, largely attributable to the full-quarter impact of the KOI and Movistar Riders acquisitions, whose operations carry comparatively higher cost of sales.
Net Loss
For the three months ended March 31, 2025, net loss after income taxes amounted to $3,676, as compared to a net loss after income taxes of $4,395 for the three months ended March 31, 2024. The year-over-year improvement of $719 was primarily driven by increased revenues from the KOI and Movistar Riders acquisitions, which contributed for the full quarter in 2025 compared to only one month in the prior year. In addition, enhanced cost discipline and effective expense management enabled the Company to better absorb acquisition-related costs, resulting in a reduced net loss for the period.
LIQUIDITY AND CAPITAL RESOURCES
Capital management
The Company’s objective in managing its capital is to ensure sufficient liquidity to finance its operations, maximize the preservation of capital and deliver competitive returns on invested capital. To fund its activities for the next twelve months, the Company will rely on the proceeds of prior financings and current operations. The Company manages its excess cash to ensure that it has sufficient reserves to fund its operations and capital expenditures.
The Company’s liquidity and capital resources as at March 31, 2025 and 2024 were as follows:
| March 31, 2025 | March 31, 2024 | |
|---|---|---|
| (In thousands of Canadian dollars) | $ | $ |
| Cash and cash equivalents | 7,952 | 10,057 |
| Total current assets | 16,703 | 20,229 |
| Total current liabilities | 13,319 | 15,256 |
| Working capital 2 | 3,384 | 4,973 |
| Total assets | 72,441 | 93,891 |
2 Working capital is a non-IFRS measure and defined as “Current assets less current liabilities.”
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
Total liabilities 22,456 40,553
Cash flows
| (In thousands of Canadian dollars) | March 31, 2025 | March 31, 2024 |
| --- | --- | --- |
| | $ | $ |
| Cash flow from (used in) operating activities | 1,984 | (4,749) |
| Cash flow used in financing activities | (756) | (467) |
| Cash flow (used in) from investing activities | (9) | 1,534 |
| Increase (decrease) in cash and cash equivalents | 1,219 | (3,682) |
| Cash and cash equivalents, beginning of period | 6,849 | 13,933 |
| Effect of exchange rate changes on cash and cash equivalents | (116) | (194) |
| Cash and cash equivalents, end of period | 7,952 | 10,057 |
RISK MANAGEMENT
In the normal course of business, the Company is exposed to a number of risks that can affect its operating performance. These risks and the actions taken to manage them are discussed below:
Foreign currency risk:
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company does not use derivative instruments to reduce its exposure to foreign currency risk.
For the three months ended March 31, 2025, the Company recognized a foreign exchange loss of $40 (three months ended March 31, 2024 - loss of $436) primarily due to the depreciation of the Canadian dollar relative to the U.S. dollar.
The summary quantitative data about the Company's material exposure to currency risk is as follows:
| USD | March 31, 2025 | December 31, 2024 |
|---|---|---|
| Cash | $ 280 | $ 269 |
| Receivables | 5,820 | 4,586 |
| Payables | (1,330) | (981) |
| Net consolidated statement of financial position exposure | $ 4,770 | $ 3,874 |
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
| EUR | March 31, 2025 | December 31, 2024 | ||
|---|---|---|---|---|
| Cash | € | 3,420 | € | 1,961 |
| Receivables | 1,870 | 2,852 | ||
| Payables | (4,888) | (3,850) | ||
| Net consolidated statement of financial position exposure | € | 402 | € | 963 |
Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss to the Company. The Company does not provide any guarantees which would expose the Company to credit risk.
The credit risk on cash is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies. Trade receivables consist of customers spread across diverse industries. For the three months ended March 31, 2025, three major customers each representing more than 10% of consolidated revenues, in aggregate make up 54% of trade receivables as at March 31, 2025 (42% of trade receivables as at December 31, 2024). Ongoing credit evaluation is performed on the financial condition of trade receivables. The Company has not recognized an allowance for doubtful accounts in 2025 or 2024 based on its ongoing evaluation of the credit risk for uncollected receivables.
At March 31, 2025, the aging of trade receivables that were not impaired were as follows:
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| Neither past due nor impaired | $ 3,112 | $ 9,356 |
| Past due 1-30 days | 2,930 | 150 |
| Past due 31-90 days | 359 | 11 |
| Past due > 90 days | 252 | 409 |
| $ 6,653 | $ 9,926 |
Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on the credit worthiness of these customers and evaluation of customer credit risk.
Liquidity Risk
Liquidity risk refers to the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
The Company manages liquidity risk by maintaining adequate cash balances and by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The following table provides details of the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay as of March 31, 2025.
| Carrying amount | Contractual cash flows | Less than 1 year | 1 to 2 years | > 2 years | |
|---|---|---|---|---|---|
| Trade payable and accrued liabilities | $ 7,087 | $ 7,087 | $ 7,087 | $ - | $ - |
| Lease liabilities | 3,450 | 3,623 | 1,771 | 540 | 1,312 |
| Long-term debt | 681 | 771 | 422 | 165 | 184 |
| Total | $ 11,218 | $ 11,481 | $ 9,280 | $ 705 | $ 1,496 |
OFF BALANCE SHEET ARRANGEMENTS
The Company has not entered into any off-Balance Sheet arrangements.
DIVIDEND POLICY
The Company's current policy is to retain future earnings to finance its growth. Any future determination to pay dividends will be made at the discretion of the Company's Board of Directors and will depend on the Company's financial condition, results of operations, capital requirements and other such factors as the Board of Directors may deem relevant.
RELATED PARTY TRANSACTIONS
In 2024, the Company made a payment of $782 to Harlo Capital in relation to its construction in progress asset related to the arena initiative. Harlo Capital is an investment firm jointly held in part by Kimel family board members of OverActive Media Corp. As such, Harlo Capital is considered a related party to OverActive Media Corp. The transaction was conducted in the normal course of business and was recorded at book value. No such transaction was made during the three-month period ended March 31, 2025.
On March 1, 2024, the Company acquired Team Randomk Esports S.L. (operating as "Movistar Riders"). The Company inherited Movistar Riders' existing debt, which includes 3 shareholder loans with certain members of the Board totalling $163 (EUR 112) at an interest rate of 4.00%. Nil principal payments were made during the three-month period ended March 31, 2025 (March 31, 2024 - $nil).
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
SEASONALITY
The Company's financial results generally vary from quarter to quarter as a result of changes in general economic conditions and seasonal fluctuations, among other things, in each of the reportable segments. The majority of the Company's revenue in the Team Operations segment is expected to be related to league share payouts and performance-based revenue from the associated leagues, the variable portion of which is typically recognized by the Company subsequent to the completion of the season and as amounts can become reasonably estimated or communicated by the Franchise Leagues typically in the third and fourth fiscal quarters. Any guaranteed revenue from the associated leagues that can be reasonably estimated is recognized on a straight-line basis throughout the calendar year. Tournament prize winnings are less predictable, and the timing of such revenues would be related to the timing of sales and tournaments, typically from the first to third fiscal quarters. However, within the Business Operations segment, revenues related to commercial activities are more evenly earned and recognized throughout the year. Revenues related to live events business and fan experiences are earned as those events are delivered.
STOCK-BASED COMPENSATION
The purpose of the Company's Omnibus Equity Incentive Plan (the "Plan") is to assist the Company in attracting, retaining key employees, officers, directors, and consultants who will contribute to the Company's long-term success by providing them incentives that align their interests with those of the shareholders of the Company. The Plan is administered by the Board and is authorized to issue stock option units, restricted stock units ("RSU"), deferred stock units ("DSU") and performance share unit ("PSU"). The total number of common shares reserved for issuance pursuant to awards granted under the Plan and all other security-based compensation outstanding under the legacy Stock Option Plan shall not exceed 10% of the issued and outstanding common shares from time to time.
The following reconciles the number of RSUs outstanding as of March 31, 2025 and December 31, 2024:
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| Beginning balance | 4,183 | 4,342 |
| Granted | - | 2,400 |
| Exercised | (384) | (400) |
| Forfeited | - | (2,159) |
| Ending balance | 3,799 | 4,183 |
For the three months ended March 31, 2025, the Company recorded share-based compensation) of $137 (for the three months ended March 31, 2024 – recovery of $20) related to its RSUs.
The following reconciles the number of DSUs outstanding as of March 31, 2025 and December 31, 2024:
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| Beginning balance | 1,210 | 560 |
| Granted | - | 650 |
| Exercised | (80) | - |
| Forfeited | - | - |
| Ending balance | 1,130 | 1,210 |
For the three months ended March 31, 2025, the Company recorded share-based compensation of $35 (for the three months ended March 31, 2024 - $16) related to its DSUs.
The following reconciles the number of share-based awards available for grant under the Plan as of March 31, 2025 and December 31, 2024:
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| Options available for grant, beginning of the period | 5,693 | 369 |
| Granted | - | - |
| Exchanged to RSUs | 17 | 3,874 |
| Forfeited | - | 4,500 |
| 5,710 | 8,743 | |
| Other share-based awards granted during the period: | ||
| RSUs | - | (2,400) |
| DSUs | - | (650) |
| Share-based awards available for grant, end of the period | 5,710 | 5,693 |
Options generally expire ten years following the grant date.
A summary of the status of the options outstanding as at March 31, 2025 is presented below:
| March 31, 2025 | ||
|---|---|---|
| Number of options | Weighted average exercise price | |
| Beginning of period, options outstanding | 820 | $ 2.11 |
| Granted | - | - |
| Exercised | - | - |
| Exchanged to RSUs | - | - |
| Forfeited | (17) | 0.22 |
| Balance, end of period | 803 | $ 2.15 |
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
Exercisable, end of period 793 $ 2.17
For the three months ended March 31, 2025, the Company recorded share-based compensation (recovery) of $1 (three months ended March 31, 2024 – recovery of $56).
Unrecognized stock-based compensation expense as of March 31, 2025 relating to stock option plans was $652 (March 31, 2024 - $280). The unrecognized portion will be recognized to net income over the remainder of their respective vesting periods.
OUTSTANDING SHARE DATA
The Company is authorized to issue an unlimited number of common shares and preferred shares, issuable in series. As at March 31, 2025 and December 31, 2024, there were no preferred shares issued and outstanding.
A summary of the Company’s shares issued and outstanding is as follows:
| Number of common shares | Total amount net of issuance | |
|---|---|---|
| December 31, 2023 | 80,308 | $ 133,638 |
| Shares issued in acquisitions | 45,000 | 15,245 |
| Stock options exercised | 28 | – |
| RSUs vested and exercised | 400 | – |
| Shares repurchased | (200) | – |
| December 31, 2024 | 125,536 | $ 148,883 |
| RSUs vested and exercised³ | 338 | – |
| March 31, 2025 | 125,874 | $ 148,883 |
³ Represents number of common shares issued to settle 384 vested RSUs, net of common shares deducted in respect of withholding tax obligations associated with settlement.
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
CRITICAL ESTIMATES AND JUDGEMENTS
Refer to the 2024 Annual MD&A and the 2024 annual audited consolidated financial statements and notes thereto for a discussion of the accounting policies and estimates that are critical to the understanding of the business operations and result of operations.
The Company believes that it has sufficient available liquidity to meet its minimum obligations as they come due for a period of at least 12 months from the date of this MD&A. Further, the Company has assessed that there are no material uncertainties related to events or conditions that may cast significant doubt upon the Company's ability to continue as a going concern. In making this significant judgment, the Company has prepared a cash flow forecast with the most significant assumptions in the preparation of such forecast being the ability to execute strategic plans over the next 12 months.
RISKS AND UNCERTAINTIES
The Company's operations and financial performance are subject to various risks and uncertainties that may materially affect its business and future results. Many of these risks are beyond the Company's control. Readers should consider these risks alongside the Company's financial statements and public disclosures.
- Reputational and Community Risk
The Company's business is highly dependent on consumer sentiment and engagement, including that of fans, creators, and players. Reputational damage resulting from social media commentary, internal or external conflicts, or public criticism may materially affect the Company's standing in key markets. Misalignment between the Company's regional teams, public-facing talent, or strategic priorities may result in community backlash, reduced engagement, or the loss of commercial opportunities.
- Dependence on Esports Leagues and Publishers
The Company's participation in third-party leagues, including the Call of Duty League (CDL), League of Legends EMEA Championship (LEC), and VALORANT Champions Tour (VCT), is governed by the terms and conditions established by publishers. Changes in league structure, monetization models, or termination of franchise rights may adversely impact the Company's operations and asset value.
- Revenue Concentration and Commercial Renewal Risk
The Company relies on a limited number of high-value sponsorships and partnership agreements. The expiration or reduction of any such agreements, particularly in North America, may have a material
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
adverse effect on revenue and cash flow. Efforts to renew or replace these agreements may be challenged by increased competition and shifting market dynamics.
4. Performance-Driven Revenue Volatility
A portion of the Company’s revenue, such as prize money, media exposure, and influencer engagement, is directly tied to the competitive performance of its esports teams. Periods of underperformance may result in lower revenue realization, reduced platform reach, and diminished brand value.
5. Restructuring and Market Transition Risk
The Company is pursuing cost optimization strategies, including potential franchise relocation and the consolidation of support functions into lower-cost regions. These initiatives may introduce one-time transition expenses, operational disruption, or organizational inefficiencies during the adjustment period.
6. Agency and Content Operations
The Company’s creative and influencer marketing businesses are sensitive to demand variability and utilization rates. Profitability depends on a consistent volume of client projects and internal production needs. Underperformance or underutilization in this segment may negatively impact consolidated margins.
7. International Expansion Risk
The Company operates across multiple jurisdictions and is exploring early-stage opportunities in new markets, including China. Expansion into unfamiliar regulatory and cultural environments may result in compliance challenges, increased cost exposure, and operational delays.
8. Liquidity and Capital Resources
While the Company believes it has sufficient capital to meet current obligations for the next 12 months, ongoing operations, restructuring, or strategic expansion may require access to additional financing. There is no assurance that additional capital will be available on acceptable terms or at all.
9. Operational and Cybersecurity Risk
The Company’s operations rely on third-party platforms, cloud infrastructure, and internal systems for content distribution, fan engagement, and team management. A cybersecurity incident, system failure, or data breach may result in reputational harm, regulatory liability, or business interruption.
OverActive Media Corp.
Management Discussion and Analysis
For the three months ended March 31, 2025 and 2024
10. Governance and Public Company Risk
The Company faces governance and regulatory risks associated with being a public issuer, including limited analyst coverage, share liquidity constraints, and disclosure obligations. The Company does not pay dividends and may issue additional shares, which could dilute existing shareholders.
11. Government Partnership and Event Support Risk
The Company may rely on regional governments or public-private partnerships to support the viability of esports franchises and the delivery of large-scale events. The absence of such support may affect the Company’s ability to retain teams in specific markets or to execute events profitably.
12. Key Person and Influencer Risk
The Company’s engagement strategy depends in part on the participation and reputation of high-profile creators and influencers. The departure or reputational deterioration of such individuals may reduce audience engagement, content visibility, and associated revenue.
13. Digital Platform Dependency
The Company distributes content and engages with fans on third-party platforms, including Twitch, YouTube, and Discord. Platform policy changes, algorithm adjustments, or service interruptions may affect the Company’s ability to generate engagement or monetize its content.
14. North American Operational Sustainability
The Company has initiated a transition to consolidate operations in lower-cost regions. A continued decline in North American revenue or the inability to secure local economic support may lead to further downsizing, which may impact brand positioning and partner perception in that market.
15. Content Monetization Execution Risk
The Company is investing in content-driven monetization models, including loyalty programs, merchandising, and creator partnerships. These initiatives require execution across multiple functions and platforms. Failure to scale these offerings may result in lower-than-expected revenue growth.