Stingray Group Inc. — Interim / Quarterly Report 2021

Nov 10, 2021

==> picture [366 x 792] intentionally omitted <==

==> picture [21 x 25] intentionally omitted <==

==> picture [18 x 23] intentionally omitted <==

==> picture [167 x 239] intentionally omitted <==

----- Start of picture text -----

Fiscal 2022 For the six-month period ended September 30, 2021
SECOND QUARTERREPORT
----- End of picture text -----

TABLE OF CONTENTS

Overview	3	Financial results for the periods ended
		September 30, 2021 and 2020	7
Key performance indicators	3
		Business segment performance	10
Financial and business highlights	3
		Liquidity for the periods
Selected consolidated financial information	5	ended September 30, 2021 and 2020	15
Supplemental information on		Unaudited interim consolidated
Non-IFRS measures	6	financial statements	21

BASIS OF PREPARATION AND FORWARD-LOOKING STATEMENTS

The following is the quarterly financial report and Management’s Discussion and Analysis (“MD&A”) of the results of operations and financial position of Stingray Group Inc., (“Stingray” or “the Corporation”), and should be read in conjunction with the Corporation’s unaudited interim consolidated financial statements and accompanying notes for three-month and six-month periods ended September 30, 2021 and 2020, and with the most recent audited consolidated financial statements and MD&A for the year ended March 31, 2021. This MD&A reflects information available to the Corporation as at November 9, 2021. Additional information relating to the Corporation is also available on SEDAR at www.sedar.com. The auditors of the Corporation have not performed a review of the interim financial report for the three-month and six-month periods ended September 30, 2021 and 2020.

This MD&A contains forward-looking information within the meaning of applicable Canadian securities laws. This forward-looking information includes, but is not limited to, statements with respect to management’s expectations regarding the future growth, results of operations, performance and business prospects of the Corporation. This forward-looking information relates to, among other things, our objectives and the strategies to achieve these objectives, as well as information with respect to our beliefs, plans, expectations, anticipations, estimations and intentions, and may also include other statements that are predictive in nature, or that depend upon or refer to future events or conditions. Statements with the words “could”, “expect”, “may”, “will”, “anticipate”, “assume”, “intend”, “plan”, “believes”, “estimates”, “guidance”, “foresee”, “continue” and similar expressions are intended to identify statements containing forward-looking information, although not all forward-looking statements included such words. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events.

Although management believes the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are based on the opinions, assumptions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include but are not limited to the risk factors disclosed in the Annual Information Form for the year ended March 31, 2021 available on SEDAR.

In addition, if any of the assumptions or estimates made by management prove to be incorrect, actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A. Such assumptions include, but are not limited to, the following: our ability to generate sufficient revenue while controlling our costs and expenses; our ability to manage our growth effectively; the absence of material adverse changes in our industry or the global economy; trends in our industry and markets; the absence of any changes in law, administrative policy or regulatory requirements applicable to our business, including any change to our licences with the CRTC; minimal changes to the distribution of the pay audio services by Pay-TV providers in light of recent CRTC policy decisions; our ability to manage risks related to international expansion; our ability to maintain good business relationships with our clients, agents and partners; our ability to expand our sales and distribution infrastructure and our marketing; our ability to develop products and technologies that keep pace with the continuing changes in technology, evolving industry standards, new product introductions by competitors and changing client preferences and requirements; our ability to protect our technology and intellectual property rights; our ability to manage and integrate acquisitions; our ability to retain key personnel; and our ability to raise sufficient debt or equity financing to support our business growth. Accordingly, prospective purchasers are cautioned not to place undue reliance on such statements. All of the forward-looking information in this MD&A is qualified by these cautionary statements. Statements containing forward-looking information contained herein are made only as of the date of this MD&A. The Corporation expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumption underlying them, whether as a result of new information, future events or otherwise, except as required by law.

SUPPLEMENTAL INFORMATION ON NON-IFRS MEASURES

The Corporation believes that Adjusted EBITDA and Adjusted EBITDA margin are important measures when analyzing its operating profitability without being influenced by financing decisions, non-cash items and income taxes strategies. Comparison with peers is also easier as companies rarely have the same capital and financing structure. The Corporation believes that Adjusted Net income and Adjusted Net income per share are important measures as it shows stable results from its operations which allows users of the financial statements to better assess the trend in the profitability of the business. The Corporation believes that Adjusted free cash flow and Adjusted free cash flow per share are important measures when assessing the amount of cash generated after accounting for capital expenditures and non-core charges. It demonstrates cash available to make business acquisitions, pay dividends and reduce debt. The Corporation believes that Net debt and Net debt to Pro Forma Adjusted EBITDA are important to analyse the company's debt repayment capacity on an annualized basis, taking into consideration the annualized adjusted EBITDA of acquisitions made during the last twelve months. Each of these non-IFRS financial measures is not an earnings or cash flow measure recognized by International Financial Reporting Standards (IFRS) and does not have a standardized meaning prescribed by IFRS. Our method of calculating such financial measures may differ from the methods used by other issuers and, accordingly, our definition of these non-IFRS financial measures 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.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

2

OVERVIEW

Montreal-based Stingray Group Inc. (TSX: RAY.A; RAY.B) is a leading music, media, and technology company with over 1,000 employees worldwide. Stingray is a premium provider of curated direct-to-consumer and B2B services, including audio television channels, more than 100 radio stations, SVOD content, 4K UHD television channels, FAST channels, karaoke products, digital signage, in-store music, and music apps, which have been downloaded over 160 million times. Stingray reaches 400 million subscribers (or users) in 160 countries.

KEY PERFORMANCE INDICATORS[(1) ]

For the three-month period ended September 30, 2021 (“Q2 2022”):

$71.4 M $12.1 M $20.4 M ▲ 11.1% from Q2 2021 Or $0.17 per share ▼ 19.6% from Q2 2021 Revenues Net income Cash flow from operating activities Or $0.28 per share

$25.6 M $16.3 M $15.4 M ▼ 17.9% from Q2 2021 Or $0.23 per share ▼ 32.8% from Q2 2021 Adjusted EBITDA Adjusted Net income Adjusted free cash flow Or $0.21 per share

FINANCIAL AND BUSINESS HIGHLIGHTS

Highlights of the second quarter ended September 30, 2021:

Compared to the quarter ended September 30, 2020 (“Q2 2021”):

• Revenues increased 11.1% to $71.4 million from $64.3 million;

• Adjusted EBITDA[(1)] decreased 17.9% to $25.6 million from $31.2 million. Adjusted EBITDA[(1)] by segment was $14.5 million or 37.2% of revenues for Broadcasting and Commercial Music, $12.5 million or 38.8% of revenues for Radio and $(1.5) million for Corporate;

• Net income was $12.1 million ($0.17 per share) compared with $11.9 million ($0.16 per share);

• Adjusted Net income[(1)] of $16.3 million ($0.23 per share) compared with $16.3 million ($0.22 per share);

• Cash flow from operating activities decreased 19.6% to $20.4 million ($0.28 per share) compared to $25.4 million ($0.34 per share);

• Adjusted free cash flow[(1)] decreased 32.8% to $15.4 million ($0.21 per share) compared to $22.9 million ($0.31 per share);

• Net debt to Pro Forma Adjusted EBITDA[(1)] ratio of 3.02x, and;

• 455,000 shares repurchased and cancelled for a total of $3.4 million.

Note:

(1) Refer to “Supplemental information on Non-IFRS measures” on page 2 and 6.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

3

Business Highlights:

• On November 9, 2021, the Corporation declared a dividend of $0.075 per subordinate voting share, variable subordinate voting share and multiple voting share. The dividend will be payable on or around December 15, 2021, to shareholders on record as of November 30, 2021.

• On October 19, 2021, the Corporation announced that it had successfully completed the increase and extension of its existing credit facilities, providing additional liquidity for operations and M&A activities. The $442.5 million credit facilities consist of a $375.0 million revolving credit facility and a $67.5 million term loan, both maturing in October 2026. The renewed terms include incremental commitments up to $100.0 million upon request, subject to predetermined conditions. The pre-existing sub debt of $32.0 million maturing in October 2023 combined with the credit facilities described above accounts for total flexibility of up to $574.5 million.

• On September 21, 2021, the Corporation announced that the Toronto Stock Exchange had approved the renewal of its normal course issuer bid, authorizing Stingray to repurchase up to an aggregate 3,222,901 subordinate voting shares and variable subordinate voting shares (collectively, “Subordinate Shares”), representing approximately 10% of the public float of Subordinate Shares as at September 13, 2021. During Q2 2022, the Corporation has repurchased and cancelled 455,000 shares for a total of $3.4 million.

• On August 17, 2021, the Corporation announced its global expansion and launched its first bundle with Amazon’s Prime Video Channels Canada, Mexico and Brazil. Starting today, Prime members now have access to the Stingray All Good Vibes subscription which includes Qello Concerts by Stingray, Stingray Karaoke, Stingray Classica, Stingray DJAZZ, and Stingray Naturescape. The launch showcases the quality and diversity of Stingray's growing product portfolio and its strength in reaching new audiences.

• On August 11, 2021, the Corporation announced that it had acquired a minority interest in its long-standing business partner, The Singing Machine Company, Inc., widely recognized as the worldwide leader in consumer karaoke products. With the consummation of this transaction, Stingray emerges as the dominant provider of karaoke solutions.

• On August 3, 2021, the Corporation declared a dividend of $0.075 per subordinate voting share, variable subordinate voting share and multiple voting share. The dividend has been paid on September 15, 2021 to shareholders on record as of August 31, 2021.

• On July 5, 2021, the Corporation announced that it had acquired Calm Radio, the world’s largest online music streaming service focused on the wellness and relaxation markets. With this acquisition, Stingray grows its portfolio of curated music content, significantly increases its subscriber base and dives into the health and wellness industry.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

4

SELECTED CONSOLIDATED FINANCIAL INFORMATION

(in thousands of Canadian dollars, except per share amounts)	3 months Sept. 30, 2021 Q2 2022 Sept. 30, 2020 Q2 2021	6 months
		Sept. 30, 2021 YTD 2022 Sept. 30, 2020 YTD 2021
	$ % of revenues $ % of revenues	$ % of revenues $ % of revenues
Revenues Operating expenses Depreciation, amortization and write-off Net finance expense (income)(1) Change in fair value of investments Acquisition, legal, restructuring and other expenses(income)	71,429 100.0 % 64,294 100.0 % 47,338 66.3 % 34,669 54.0 % 8,671 12.1 % 9,577 14.9 % (364) (0.5) % 2,774 4.3 % (13) 0.0 % 461 0.7 % 848 1.2 % 271 0.4 %	136,237 100.0 % 116,587 100.0 % 90,245 66.2 % 62,963 54.0 % 18,118 13.3 % 19,100 16.4 % 4,889 5.0 % 7,375 6.3 % (13) 0.0 % 1,353 1.2 % 2,016 1.5 % (126) (0.1) %
Income before income taxes Income taxes	14,949 20.9 % 16,542 25.7 % 2,874 4.0 % 4,654 7.2 %	20,982 15.4 % 25,922 22.2 % 4,707 3.4 % 7,013 6.0 %
Net income	12,075 16.9 % 11,888 18.5 %	16,275 11.9 % 18,909 16.2 %
Adjusted EBITDA(2) 25,587 35.8 % 31,156 48.5 % Adjusted Net income(2) 16,323 22.9 % 16,311 25.4 % Cash flow from operating activities 20,437 28.6 % 25,406 39.5 % Adjusted free cash flow(2) 15,362 21.5 % 22,861 35.6 % Net debt(2) 336,488 – 328,145 – Net debt to Pro Forma Adjusted EBITDA(2)(3) 3.02x – 2.77x – Net income per share basic and diluted 0.17 – 0.16 – Adjusted Net income per share basic(2) 0.23 – 0.22 – Adjusted Net income per share diluted(2) 0.23 – 0.22 – Cash flow from operating activities per share basic 0.29 – 0.35 – Cash flow from operating activities per share diluted 0.28 – 0.34 – Adjusted free cashflow per share basic(2) 0.22 – 0.31 – Adjusted free cashflow per share diluted(2) 0.21 – 0.31 – Revenues by segment Broadcasting and Commercial Music 39,118 54.8 % 39,169 60.9 % Radio 32,311 45.2 % 25,125 39.1 %		49,742 36.5 % 56,637 48.6 % 27,561 20.2 % 29,820 25.6 % 36,774 27.0 % 63,399 54.4 % 30,369 22.3 % 40,906 35.1 % 336,488 – 328,145 – 3.02x – 2.77x – 0.23 – 0.26 – 0.38 – 0.41 – 0.38 0.40 – 0.51 – 0.86 – 0.51 – 0.86 – 0.42 – 0.56 – 0.42 – 0.55 – 74,696 54.8 % 75,116 64.4 % 61,541 45.2 % 41,471 35.6 %
Revenues 71,429 100.0 % 64,294 100.0 %		136,237 100.0 % 116,587 100.0 %
Revenues by geography Canada 46,700 65.4 % 39,710 61.8 % United States 11,485 16.1 % 10,091 15.7 % Other Countries 13,244 18.5 % 14,493 22.5 %		88,076 64.6 % 67,767 58.1 % 21,763 16.0 % 20,393 17.5 % 26,398 19.4 % 28,427 24.4 %
Revenues 71,429 100.0 % 64,294 100.0 %		136,237 100.0 % 116,587 100.0 %

Notes:

(1) Interest paid during the Q2 2022 was $3.2 million (Q2 2021; $2.9 million). Interest paid for YTD Q2 2022 was $7.1 million (YTD Q2 2021; $6.6 million).

(2) Refer to “Forward-looking statements” and “Supplemental information on Non-IFRS measures” on page 2 and for reconciliations to the most directly comparable IFRS financial measure, refer to “Supplemental information on Non-IFRS measures” on page 6.

(3) Refer to page 17 for a reconciliation of Pro Forma Adjusted EBITDA to the most directly comparable IFRS financial measure. Refer to “Forward-looking statements” and “Supplemental information on Non-IFRS measures” on page 2 and for reconciliations of Adjusted EBITDA to the most directly comparable IFRS financial measure, refer to “Supplemental information on Non-IFRS measures” on page 6.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

5

SUPPLEMENTAL INFORMATION ON NON-IFRS MEASURES

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net income, Adjusted Net income per share, Adjusted free cash flow, Adjusted free cash flow per share, Net debt and Net debt to Proforma Adjusted EBITDA are non-IFRS measures that the Corporation uses to assess its operating performance. See “Supplemental information on Non-IFRS Measures” on page 2.

The following tables show the reconciliation of Net income to Adjusted EBITDA and to Adjusted Net income: 3 months 6 months (in thousands of Canadian dollars) Sept. 30, 2021 Q2 2022 Sept. 30, 2020 Q2 2021 Sept. 30, 2021 YTD 2022 Sept. 30, 2020 YTD 2021	The following tables show the reconciliation of Net income to Adjusted EBITDA and to Adjusted Net income: 3 months 6 months (in thousands of Canadian dollars) Sept. 30, 2021 Q2 2022 Sept. 30, 2020 Q2 2021 Sept. 30, 2021 YTD 2022 Sept. 30, 2020 YTD 2021	The following tables show the reconciliation of Net income to Adjusted EBITDA and to Adjusted Net income: 3 months 6 months (in thousands of Canadian dollars) Sept. 30, 2021 Q2 2022 Sept. 30, 2020 Q2 2021 Sept. 30, 2021 YTD 2022 Sept. 30, 2020 YTD 2021
		Sept. 30, 2021 YTD 2022 Sept. 30, 2020 YTD 2021
Net income Net finance expense (income) Change in fair value of investments Income taxes Depreciation and write-off of property and equipment Depreciation of right-of-use assets Amortization of intangible assets Share-based compensation Performance and deferred share unit expense Acquisition,legal,restructuringand other expenses (income)	12,075 11,888 (364) 2,774 (13) 461 2,874 4,654 2,446 2,976 1,298 1,413 4,927 5,188 196 219 1,300 1,312 848 271	16,275 18,909 4,889 7,375 (13) 1,353 4,707 7,013 4,970 5,677 2,594 2,825 10,554 10,598 360 385 3,390 2,628 2,016 (126)
Adjusted EBITDA	25,587 31,156	49,742 56,637
Net finance expense (income), excluding mark-to-market losses (gains) on derivative financial instruments Income taxes Depreciation of property and equipment and write-off Depreciation of right-of-use assets Income taxes related to change in fair value of investments, share-based compensation, performance and deferred share unit expense, amortization of intangible assets, mark-to-market losses (gains) on derivative financial instruments and acquisition, legal, restructuring and other expenses(income)	(1,153) (4,340) (2,874) (4,654) (2,446) (2,976) (1,298) (1,413) (1,493) (1,462)	(5,888) (7,678) (4,707) (7,013) (4,970) (5,677) (2,594) (2,825) (4,022) (3,624)
Adjusted Net income	16,323 16,311	27,561 29,820

The following table shows the reconciliation of Cash flow from operating activities to Adjusted free cash flow:

(in thousands of Canadian dollars)	3 months Sept. 30, 2021 Q2 2022 Sept. 30, 2020 Q2 2021	6 months
		Sept. 30, 2021 YTD 2022 Sept. 30, 2020 YTD 2021
Cash flow from operating activities Add / Less : Acquisition of property and equipment Acquisition of intangible assets other than internally developed intangible assets Addition to internally developed intangible assets Interest paid Repayment of lease liabilities Net change in non-cash operating working capital items Unrealized loss on foreign exchange Acquisition,legal,restructuringand other expenses(income)	20,437 25,406 (2,360) (1,209) (305) (212) (2,050) (1,671) (3,234) (2,912) (1,526) (1,443) 2,323 6,530 1,229 (1,899) 848 271	36,774 63,399 (4,437) (1,912) (503) (470) (4,203) (3,223) (7,125) (6,599) (2,611) (2,657) 9,128 (4,882) 1,330 (2,624) 2,016 (126)
Adjusted free cash flow	15,362 22,861	30,369 40,906

The following table shows the calculation of Net debt:

	September 30,	March 31,	September 30,
(in thousands of Canadian dollars)	2021	2021	2020
Credit facilities	313,172	303,704	299,361
Subordinated debt	31,791	31,741	39,690
Cash and cash equivalents	(8,475)	(9,040)	(10,906)
Net debt	336,488	326,405	328,145

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

6

FINANCIAL RESULTS FOR THE PERIODS ENDED SEPTEMBER 30, 2021 AND 2020

CONSOLIDATED PERFORMANCE

Revenues

Revenues are detailed as follows:

(in thousands of Canadian dollars)	3 months Q2 2022 Q2 2021 % Change	6 months
		YTD 2022 YTD 2021 % Change
Revenues by geography Canada United States Other Countries	46,700 39,710 17.6 11,485 10,091 13.8 13,244 14,493 (8.6)	88,076 67,767 30.0 21,763 20,393 6.7 26,398 28,427 (7.1)
Revenues	71,429 64,294 11.1	136,237 116,587 16.9

Global

Revenues in Q2 2022 increased $7.1 million or 11.1% to $71.4 million, from $64.3 million for Q2 2021. Cumulative revenues for Fiscal 2022 increased $19.6 million or 16.9% to $136.2 million, from $116.6 million for cumulative Fiscal 2021. Both increases were primarily due to the gradual easing of COVID-19 restrictions and the return to normal commercial operations and to an increase in advertising revenues in the Broadcast and Commercial Music segment, partially offset by a negative foreign exchange rate impact.

Canada

Revenues in Canada in Q2 2022 increased $7.0 million or 17.6% to $46.7 million, from $39.7 million for Q2 2021. Cumulative revenues in Canada for Fiscal 2022 increased $20.2 million or 30.0% to $88.0 million, from $67.8 million for cumulative Fiscal 2021. Both increases were primarily due to the gradual easing of COVID-19 restrictions and the return to normal commercial operations.

United States

Revenues in the United States in Q2 2022 increased $1.4 million or 13.8% to $11.5 million, from $10.1 million for Q2 2021. Cumulative revenues in the United States for Fiscal 2022 increased $1.4 million or 6.7% to $21.8 million, from $20.4 million for cumulative Fiscal 2021. Both increases were primarily due to organic growth in advertising revenues in the Broadcast and Commercial Music segment and to an increase in subscription revenues, partially offset by a negative foreign exchange rate impact.

Other Countries

Revenues in Other countries in Q2 2022 decreased $1.3 million or 8.6% to $13.2 million, from $14.5 million for Q2 2021. The decrease was mainly due to a decrease in subscription revenues.

Cumulative revenues in Other countries for Fiscal 2022 decreased $2.0 million or 7.1% to $26.4 million, from $28.4 million for cumulative Fiscal 2021. The decrease was primarily due to a decrease in subscription revenues and to a negative foreign exchange rate impact.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

7

Operating expenses

Operating expenses in Q2 2022 increased $12.6 million or 36.5% to $47.3 million, from $34.7 million for Q2 2021. Cumulative operating expenses for Fiscal 2022 increased $27.2 million or 43.3% to $90.2 million, from $63.0 million for cumulative Fiscal 2021. Both increases are due to lower Canadian Emergency Wage Subsidy (CEWS), higher operating costs and increased variable expenses, caused by the gradual easing of COVID-19 restrictions and the return to normal commercial operations.

Adjusted EBITDA[(1)]

Adjusted EBITDA in Q2 2022 decreased $5.6 million or 17.9% to $25.6 million from $31.2 million for Q2 2021. Adjusted EBITDA margin was 35.8% compared to 48.5% for Q2 2021. Cumulative Adjusted EBITDA for Fiscal 2022 decreased $6.9 million or 12.2% to $49.7 million from $56.6 million for cumulative Fiscal 2021. Adjusted EBITDA margin was 36.5% compared to 48.6% for cumulative Fiscal 2021. Both decreases are due to lower CEWS and higher operating costs, partially offset by higher revenues, caused by the gradual easing of COVID-19 restrictions and the return to normal commercial operations.

Depreciation, amortization and write off

Depreciation, amortization and write off in Q2 2022 decreased $0.9 million or 9.5% to $8.7 million, from $9.6 million for Q2 2021. Cumulative depreciation, amortization and write off for Fiscal 2022 decreased $1.0 million or 5.1% to $18.1 million, from $19.1 million for cumulative Fiscal 2021. Both decreases were primarily due to less intangible assets to amortize compared to the prior period.

Net finance expense (income)

Net finance expense (income) in Q2 2022 varied to a $0.4 million income, from a $2.8 million expense for Q2 2021. Cumulative Net finance expense for Fiscal 2022 decreased $2.5 million or 33.7% to $4.9 million, from $7.4 million for cumulative Fiscal 2021. Both variances were mainly related to a decrease in the fair value of contingent consideration, partially offset by a foreign exchange loss.

Change in fair value of investments

In Q2 2022 and for cumulative Fiscal 2022, there was no gain or loss on fair value of investments as the securities held in AppDirect Inc. were sold in Q3 2021. A loss of $0.5 million for Q2 2021 and $1.4 million for cumulative Fiscal 2021 were recorded, both related to the translation of an investment denominated in U.S. dollars to Canadian dollars.

Acquisition, legal, restructuring and other expenses (income)

(in thousands of Canadian dollars)	3 months Q2 2022 Q2 2021 % Change	6 months
		YTD 2022 YTD 2021 % Change
Acquisition Legal Restructuringand other	199 248 (19.8) 85 244 (65.2) 564 (221) (355.2)	213 530 (59.8) 1,076 (536) (300.7) 727 (120) (705.8)
Acquisition, legal, restructuring and other expenses(income)	848 271 212.9	2,016 (126) (1700.0)

In Q2 2021 and in cumulative Fiscal 2021, a gain on restructuring and other expenses was recorded due to the reversal of a provision for severances due to a change in estimates in the quarter.

In cumulative Fiscal 2021, a gain on legal expenses was recorded due to the reversal of a provision for professional fees due to a change in estimates in the quarter.

Note:

(1) Refer to “Supplemental information on Non-IFRS measures” on page 2 and 6.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

8

Income taxes

The income taxes expense recognized in comprehensive income was $2.9 million for Q2 2022 compared to $4.7 million for Q2 2021. The effective tax rate for Q2 2022 was 19.2% compared to 28.1% for Q2 2021. The income taxes expense recognized in comprehensive income was $4.7 million for cumulative Fiscal 2022 compared to $7.0 million for cumulative Fiscal 2021. The effective tax rate for cumulative Fiscal 2022 was 22.4% compared to 27.1% for cumulative Fiscal 2021. Both variances in the effective tax rate are mainly due to the variance in permanent differences, mainly related to the non-taxable gain on the reduction in the fair value of contingent consideration.

Net income and Net income per share

Net income in Q2 2022 was $12.1 million ($0.17 per share) compared to $11.9 million ($0.16 per share) for Q2 2021. The increase was mainly related to a decrease in the fair value of contingent consideration and lower income taxes expense, partially offset by lower operating results.

Cumulative Net income for Fiscal 2022 was $16.3 million ($0.23 per share) compared to $18.9 million ($0.26 per share) for cumulative Fiscal 2021. The decrease was mainly related to lower operating results and to a foreign exchange loss, partially offset by a decrease in the fair value of contingent consideration and lower income taxes expense.

Adjusted Net income[(1)] and Adjusted Net income per share[(1)]

Adjusted Net income in Q2 2022 was $16.3 million ($0.23 per share), compared to $16.3 million ($0.22 per share) for Q2 2021. The nil variance was primarily due to a decrease in the fair value of contingent consideration and lower income taxes expense, largely offset by lower operating results.

Cumulative Adjusted Net income for Fiscal 2022 was $27.6 million ($0.38 per share), compared to $29.8 million ($0.40 per share) for cumulative Fiscal 2021. The decrease was mainly related to lower operating results and a foreign exchange loss, partially offset by a decrease in the fair value of contingent consideration and lower income taxes expense.

Note:

(1) Refer to “Supplemental information on Non-IFRS measures” on page 2 and 6.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

9

BUSINESS SEGMENT PERFORMANCE

BROADCASTING AND COMMERCIAL MUSIC

(in thousands of Canadian dollars)	3 months Q2 2022 Q2 2021 % Change	6 months
		YTD 2022 YTD 2021 % Change
Revenues Operatingexpenses	39,118 39,169 (0.1) 24,585 20,273 21.3	74,696 75,116 (0.6) 45,501 35,853 26.9
Adjusted EBITDA(1)	14,533 18,896 (23.1)	29,195 39,263 (25.6)
Adjusted EBITDA margin(1)	37.2% 48.2% (23.0)	39.1% 52.3% (25.2)

Revenues

In Q2 2022, Broadcasting and Commercial Music revenues decreased $0.1 million or 0.1% to $39.1 million, from $39.2 million for Q2 2021. Cumulative Broadcasting and Commercial Music revenues for Fiscal 2022 decreased $0.4 million or 0.6% to $74.7 million from $75.1 million for cumulative Fiscal 2021. Both decreases were primarily due to a negative foreign exchange rate impact, largely offset by an increase in advertising revenues.

Adjusted EBITDA[(1)]

In Q2 2022, Broadcasting and Commercial Music Adjusted EBITDA decreased $4.4 million or 23.1% to $14.5 million from $18.9 million for Q2 2021. Cumulative Broadcasting and Commercial Music Adjusted EBITDA for Fiscal 2022 decreased $10.0 million or 25.6% to $29.2 million from $39.2 million for cumulative Fiscal 2021. Both decreases were primarily due to reduced CEWS and higher operating costs, caused by the gradual easing of COVID-19 restrictions and the return to normal commercial operations and by a decrease in gross margin related to a change in product mix.

RADIO

(in thousands of Canadian dollars)	3 months Q2 2022 Q2 2021 % Change	6 months
		YTD 2022 YTD 2021 % Change
Revenues Operatingexpenses	32,311 25,125 28.6 19,778 12,005 64.7	61,541 41,471 48.4 38,183 22,590 69.0
Adjusted EBITDA(1)	12,533 13,120 (4.5)	23,358 18,881 23.7
Adjusted EBITDA margin(1)	38.8% 52.2% (25.7)	38.0% 45.5% (16.6)

Revenues

Radio revenues are derived from the sale of advertising airtime, which is subject to the seasonal fluctuations of the Canadian radio industry. Accordingly, the first and third quarter results tend to be the strongest and the second and fourth quarter results tend to be the weakest in a fiscal year. However, for Fiscal 2021, Radio revenues did not follow historical patterns due to the ongoing impact of the COVID-19 pandemic.

In Q2 2022, Radio revenues increased $7.2 million or 28.6% to $32.3 million from $25.1 million for Q2 2021. Cumulative Radio revenues for Fiscal 2022 increased $20.0 million or 48.4% to $61.5 million from $41.5 million for cumulative Fiscal 2021. Both increases were largely due to the gradual easing of COVID-19 restrictions and the return to normal commercial operations.

Adjusted EBITDA[(1)]

In Q2 2022, Radio Adjusted EBITDA decreased $0.6 million or 4.5% to $12.5 million from $13.1 million for Q2 2021. The decrease in Adjusted EBITDA is due to lower CEWS and higher operating costs, largely offset by higher revenues, all caused by the gradual easing of COVID-19 restrictions and the return to normal commercial operations.

Cumulative Radio Adjusted EBITDA for Fiscal 2022 increased $4.4 million or 23.7% to $23.3 million from $18.9 million for cumulative Fiscal 2021. The increase in Adjusted EBITDA is due to higher revenues, partially offset by lower CEWS and higher operating costs, all caused by the gradual easing of COVID-19 restrictions and the return to normal commercial operations.

Note:

(1) Refer to “Supplemental information on Non-IFRS measures” on page 2 and 6.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

10

CORPORATE

(in thousands of Canadian dollars)	3 months Q2 2022 Q2 2021 % Change	6 months
		YTD 2022 YTD 2021 % Change
Operating expenses Adjust: Share-based compensation Performance and deferred share unit expense	2,975 2,391 24.4 (196) (219) (10.5) (1,300) (1,312) (0.9)	6,561 4,520 45.2 (360) (385) (6.5) (3,390) (2,628) 29.0
Adjusted EBITDA(1)	(1,479) (860) 72.0	(2,811) (1,507) 86.5

Adjusted EBITDA[(1)]

Corporate Adjusted EBITDA represents the head office operating expenses less the share-based compensation and performance and deferred share unit expense. The increase in operating expenses is related to increased operating costs caused by the gradual easing of COVID-19 restrictions and the return to normal commercial operations.

Note:

(1) Refer to “Supplemental information on Non-IFRS measures” on page 2 and 6.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

11

Quarterly results

Revenues fluctuated over the last eight quarters from $81.3 million in Q3 2020 to $71.4 million in the Q2 2022. The decrease in Q4 2020 and Q1 2021 were due to the impact of the COVID-19 pandemic. The increases in Q2 2021 and Q3 2021 were due to progressive improvements in Radio advertising bookings as provinces began lifting restrictions on social and economic activity and to normal business seasonality. The decrease in Q4 2021 was due to normal business seasonality. The increase in Q1 2022 was due to the gradual easing of COVID-19 restrictions. The increase in Q2 2022 was due to the gradual easing of COVID-19 restrictions, to increased equipment and installation sales related to digital signage and to the acquisition of Calm Radio.

Adjusted EBITDA[(1)] fluctuated over the last eight quarters from $31.0 million in Q3 2020 to $25.6 million in Q2 2022. The decreases in Q4 2020 and Q1 2021 were mainly due to the impact of the COVID-19 pandemic on Radio revenues, which was partially offset by the CEWS and reduced operating costs in Q1 2021. The increase in Q2 2021 was due to progressive improvements in Radio advertising bookings as provinces begin lifting restrictions on social and economic activity, partially offset by higher operating costs and lower CEWS. The increase in Q3 2021 was due to continuing improvements in Radio advertising bookings and normal business seasonality and to a settlement with SOCAN (refer to page 18), partially offset by a special bonus to employees, lower CEWS and higher operating costs. The decrease in Q4 2021 was due to normal business seasonality and to a settlement with SOCAN in Q3 2021, partially offset by a special bonus to employees in Q3 2021. The increase in Q1 2022 was due to normal business seasonality and change in product mix, partially offset by higher operating costs. The increase in Q2 2022 is due to higher operating results, partially offset by reduced CEWS.

Net income (loss) fluctuated over the last eight quarters from $8.1 million in Q3 2020 to $12.1 million in Q2 2022. In Q4 2020, the decrease was due to mark-to-market losses on derivative financial instruments, foreign exchange loss, lower positive change in fair value of investments and lower operating results, partially offset by lower income taxes expense. In Q1 2021, the increase was due to lower mark-to-market losses on derivative financial instruments and a foreign exchange gain, partially offset by the impact of the COVID-19 pandemic on revenues, higher income taxes expense and negative change in fair value of investments. In Q2 2021, the increase was due to higher operating results and positive change in mark-to-market on derivative financial instruments, partially offset by higher income taxes and legal expenses. In Q3 2021, the increase was due to higher operating results, positive change in the fair value of contingent consideration, and higher gain in mark-to-market on derivative financial instruments, partially offset by a negative change in fair value of investments related to the sale of securities held in AppDirect Inc. In Q4 2021, the decrease was due to lower operating results, partially offset by higher gains in mark-tomarket on derivative financial instruments. In Q1 2022, the decrease was due to a negative change in fair value of mark-tomarket on derivative financial instruments and a lower foreign exchange gain, partially offset by lower income taxes expense, and lower acquisition and restructuring costs. In Q2 2022, the increase was due a positive change in the fair value of contingent consideration, a positive change in fair value of derivative financial instruments and higher operating results, partially offset by a foreign exchange loss.

Note:

(1) Refer to “Supplemental information on Non-IFRS measures” on page 2 and 6.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

12

Summary of Consolidated Quarterly Results

(in thousands of Canadian dollars, exceptper share amounts)	3 months
	Sept. 30, 2021 June 30, 2021 March 31, 2021 Dec. 31, 2020 Sept. 30, 2020 June 30, 2020 March 31, 2020 Dec. 31, 2019
	FY2022 FY2022 FY2021 FY2021 FY2021 FY2021 FY2020 FY2020
Revenues by segment Broadcasting and Commercial Music Radio	39,118 35,578 36,356 40,186 39,169 35,947 38,483 39,894 32,311 29,230 23,960 32,379 25,125 16,346 29,915 41,419
Total revenues Revenues by geography Canada United States Other countries	71,429 64,808 60,316 72,565 64,294 52,293 68,398 81,313 46,700 41,376 35,594 47,368 39,710 28,057 43,498 57,515 11,485 10,278 10,942 10,693 10,091 10,302 10,236 9,575 13,244 13,154 13,780 14,504 14,493 13,934 14,664 14,223
Total revenues Adjusted EBITDA(1) LTM Adjusted EBITDA(1) Net income (loss) Net income (loss) per share basic and diluted Adjusted Net income(1) Adjusted Net income per share basic(1) Adjusted Net income per share diluted(1) Cash flow from operations Adjusted free Cash Flow(1)	71,429 64,808 60,316 72,565 64,294 52,293 68,398 81,313 25,587 24,155 23,638 33,993 31,156 25,481 28,217 31,033 107,373 112,942 114,268 118,847 115,887 112,402 118,086 112,276 12,075 4,200 12,077 14,118 11,888 7,021 (8,486) 8,089 0.17 0.06 0.17 0.19 0.16 0.10 (0.11) 0.11 16,323 11,238 11,981 21,054 16,311 13,509 10,095 16,710 0.23 0.16 0.17 0.29 0.22 0.18 0.13 0.22 0.23 0.16 0.16 0.29 0.22 0.18 0.13 0.22 20,437 16,337 24,514 16,333 25,406 37,993 14,062 28,833 15,362 15,007 13,808 19,645 22,861 18,045 17,974 21,033
Quarterly dividend	0.075 0.075 0.075 0.075 0.075 0.075 0.075 0.075

Note:

(1) Refer to “Supplemental information on Non-IFRS measures” on page 2 and 6. Last twelve months (LTM) Adjusted EBITDA represents the Adjusted EBITDA of the referenced period, plus the Adjusted EBITDA of the three quarters immediately preceding the referenced period.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

13

Reconciliation of Quarterly Non-IFRS Measures

(in thousands of Canadian dollars)	3 months
	Sept. 30, 2021 June 30, 2021 March 31, 2021 Dec. 31, 2020 Sept. 30, 2020 June 30, 2020 March 31, 2020 Dec. 31, 2019
	Fiscal 2022 Fiscal 2022 Fiscal 2021 Fiscal 2021 Fiscal 2021 Fiscal 2021 Fiscal 2020 Fiscal 2020
Net income (loss) Net finance expense (income) Change in fair value of investments Income taxes Depreciation and write-off of property and equipment Depreciation of right-of-use assets Amortization of intangible assets Share-based compensation Performance and deferred share unit expense (income) Acquisition, legal, restructuring and other expenses(income)	12,075 4,200 12,077 14,118 11,888 7,021 (8,486) 8,089 (364) 5,253 (7,284) (1,290) 2,774 4,601 33,463 (4,383) (13) – – 2,434 461 892 (1,914) (4,781) 2,874 1,833 4,047 4,900 4,654 2,359 (4,165) 1,897 2,446 2,524 3,082 2,894 2,976 2,701 2,790 2,876 1,298 1,296 1,436 1,399 1,413 1,412 1,426 1,402 4,927 5,627 5,303 5,478 5,188 5,410 5,659 5,494 196 164 235 231 219 166 258 238 1,300 2,090 2,028 1,780 1,312 1,316 (1,507) 677 848 1,168 2,714 2,049 271 (397) 693 19,524
Adjusted EBITDA	25,587 24,155 23,638 33,993 31,156 25,481 28,217 31,033
Net finance expense (income), excluding mark-to-market losses (gains) on derivative financial instruments Income taxes Depreciation and write-off of property and equipment Depreciation of right-of-use assets Income taxes related to change in fair value of investments, share- based compensation, performance and deferred share unit expense, amortization of intangible assets, mark-to- market losses (gains) on derivative financial instruments and acquisition, legal, restructuring and other expenses(income)	(1,153) (4,735) (3,214) (1,727) (4,340) (3,338) (10,976) (4,184) (2,874) (1,833) (4,047) (4,900) (4,654) (2,359) 4,165 (1,897) (2,446) (2,524) (3,082) (2,894) (2,976) (2,701) (2,790) (2,876) (1,298) (1,296) (1,436) (1,399) (1,413) (1,412) (1,426) (1,402) (1,493) (2,529) 122 (2,019) (1,462) (2,162) (7,095) (3,964)
Adjusted Net income	16,323 11,238 11,981 21,054 16,311 13,509 10,095 16,710
(in thousands of Canadian dollars)	3 months
	Sept. 30, 2021 June 30, 2021 March 31, 2021 Dec. 31, 2020 Sept. 30, 2020 June 30, 2020 March 31, 2020 Dec. 31, 2019
	Fiscal 2022 Fiscal 2022 Fiscal 2021 Fiscal 2021 Fiscal 2021 Fiscal 2021 Fiscal 2020 Fiscal 2020
Cash flow from operating activities Acquisition of property and equipment Acquisition of intangible assets other than internally developed intangible assets Addition to internally developed intangible assets Interest paid Repayment of lease liabilities Net change in non-cash operating working capital items Unrealized loss (gain) on foreign exchange Acquisition, legal, restructuring and other expenses(income)	20,437 16,337 24,514 16,333 25,406 37,993 14,062 28,833 (2,360) (2,077) (1,929) (1,849) (1,209) (703) (2,153) (1,479) (305) (198) (194) (649) (212) (258) (463) (495) (2,050) (2,153) (1,367) (1,838) (1,671) (1,552) (1,534) (1,286) (3,234) (3,891) (5,142) (6,312) (2,912) (3,687) (3,819) (4,150) (1,526) (1,085) (1,099) (1,255) (1,443) (1,214) (1,180) (1,295) 2,323 6,805 (344) 15,858 6,530 (11,412) 7,262 (17,702) 1,229 101 (3,345) (2,692) (1,899) (725) 5,106 (917) 848 1,168 2,714 2,049 271 (397) 693 19,524
Adjusted free cash flow	15,362 15,007 13,808 19,645 22,861 18,045 17,974 21,033

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

14

LIQUIDITY AND CAPITAL RESOURCES FOR THE PERIODS ENDED SEPTEMBER 30, 2021 AND 2020

(in thousands of Canadian dollars)	3 months 6 months
	Q2 2022 Q2 2021 YTD 2022 YTD 2021
Operating activities Financing activities Investingactivities	20,437 25,406 36,774 63,399 (10,905) (17,801) (25,442) (49,400) (7,473) (3,092) (11,897) (5,605)
Net change in cash Cash – beginningofperiod	2,059 4,513 (595) 8,394 6,416 6,393 9,040 2,512
Cash – end ofperiod	8,475 10,906 8,475 10,906
Adjusted free cash flow(1)	15,362 22,861 30,369 40,906

Operating activities

Cash flow generated from operating activities amounted to $20.4 million for Q2 2022 compared to $25.4 million for Q2 2021. The decrease was mainly due to lower operating results and to a foreign exchange loss, partially offset by a lower negative change in non-cash operating items.

Cash flow generated from operating activities amounted to $36.8 million for cumulative Fiscal 2022 compared to $63.4 million for cumulative Fiscal 2021. The decrease was mainly due to a negative change in non-cash operating items, to lower operating results and to a foreign exchange loss.

Financing Activities

Net cash flow used in financing activities amounted to $10.9 million for Q2 2022 compared to $17.8 million for Q2 2021. Net cash flow used in financing activities amounted to $25.4 million for cumulative Fiscal 2022 compared to $49.4 million for cumulative Fiscal 2021. Both decreases were mainly related to lower repayment of credit facilities, partially offset by more share repurchased and by the repayment of the balance payable on the business acquisition of Calm Radio.

Investing Activities

Net cash flow used in investing activities amounted to $7.5 million for Q2 2022 compared to $3.1 million for Q2 2021. Net cash flow used in investing activities amounted to $11.9 million for cumulative Fiscal 2022 compared to $5.6 million for cumulative Fiscal 2021. Both increases were primarily due to the acquisition of a minority interest in The Singing Machine and to higher acquisition of property and equipment.

Adjusted free cash flow[(1)]

Adjusted free cash flow generated in Q2 2022 amounted to $15.4 million compared to $22.9 million for Q2 2021. Adjusted free cash flow generated in cumulative Fiscal 2022 amounted to $30.4 million compared to $40.9 million for cumulative Fiscal 2021. Both decreases were related to lower operating results and to higher capital expenditures.

Note:

(1) Refer to “Supplemental information on Non-IFRS measures” on page 2 and 6.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

15

CONSOLIDATED FINANCIAL POSITION AND CAPITAL RESOURCES

The following table shows the main variances that have occurred in the consolidated financial position of the Corporation for the six-month period ending September 30, 2021:

	Sept. 30,	March 31,
(in thousands of Canadian dollars)	2021	2021	Variance		Significant contributions
Trade and other receivables	64,583	61,114	3,469	▲	Timing ofpayments by clients
					Additions through business
Intangible assets	49,809	41,884	7,925	▲	acquisition of Calm Radio, partially offset by amortization of intangible
					assets
Goodwill	337,948	337,897	51	▲	AcquisitionofCalm Radio
Accounts payables and accrued liabilities	55,277	53,146	2,131	▲	Timing of payments to suppliers
					Payment of performance share
					units, decrease in the fair value of
					contingent consideration and
					repayment of contingent
Other liabilities	55,992	60,027	(4,035)	▼	consideration for the acquisition of
					Marketing Sensorial México,
					partially offset by a contingent
					consideration on business
					acquisitionofCalm Radio
Creditfacilities	313,172	303,704	9,468	▲	Referto the graphon next page
Subordinated debt	31,791	31,741	50	▲	Amortization of deferred financing fees

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

16

Capital Resources

Our principal sources of liquidity are our net cash provided by operating activities and borrowings available under our revolving facility. Our principal uses of cash are to repay our debt, finance our acquisitions and capital expenditures, pay dividends, repurchase shares and provide for working capital. We expect that cash generated from operations and borrowings available under our current credit facilities will be sufficient to meet our liquidity needs in the foreseeable future.

The credit facilities consist of a $325.0 million revolving credit facility and a $67.5 million term loan, both maturing in October 2023. On May 28, 2021, the Corporation fully repaid, on maturity, its $20.0 million term loan.

The Corporation is required to make consecutive quarterly capital repayments of 2.50% of the initial drawdown of the $67.5 million term loan. The remaining capital balance will be payable on maturity date, on October 25, 2023.

The credit facilities bear interest at either (a) the bank’s prime rate plus an applicable margin based on a financial covenant or (b) the banker’s acceptance rate plus an applicable margin based on a financial covenant. In addition, the Corporation incurs standby fees, varying between 0.40% and 0.63% based on a financial covenant.

As of September 30, 2021, the Corporation had cash and cash equivalents of $8.5 million, a subordinated debt of $31.8 million and credit facilities of $313.2 million, of which approximately $78.2 million was available.

The following table summarizes the impact on the Net debt that occurred in the six-month period ended September 30, 2021, including related ratios:

Movement in Net debt[(1)(2)]

	$326.4 $5.9 $7.1 $8.1 $10.7 $(21.7) $336.5 As at March 31, 2021 Business acquisitions outlays, balance payable and contingent consideration payments Interests payment Share repurchases Dividend payment Remaining net change of revolving facility and cash As at September 30, 2021
(in thousands of Canadian dollars) September 30, 2021 March 31, 2021
LTM Adjusted EBITDA(2) 107,373 114,268 Synergies and Adjusted EBITDA(2) for the months prior to the business acquisitions and to investments in associates which are not already reflected in the results 1,428 190 COVID-19 mandated store closures required anticipated rollouts and deployments to be deferred 2,492 1,825
Pro Forma Adjusted EBITDA(2) 111,293 116,283
Net debt to Pro Forma Adjusted EBITDA(2) 3.02 2.81

Notes:

(1) In millions of Canadian dollars.

(2) Refer to “Supplemental information on Non-IFRS measures” on page 2 and 6.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

17

SOCAN and Re:Sound legal proceedings

In May 2017, the Corporation, together with its Canadian Broadcast Distribution Undertaking customers (together, the “Objectors”), presented an affirmative case before the Copyright Board of Canada to seek a reduction in the prescribed rates and terms for the Pay Audio Services Tariff for the 2007-2016 period. SOCAN and Re:Sound (together, the “Collectives”) opposed that case, but in the opinion of the Objectors failed to offer compelling alternatives other than a request to maintain the status quo.

As of December 2020, the Objectors and SOCAN entered into a binding MOU that will result in a partial refund to the Objectors of past royalties paid and a meaningfully reduced tariff burden for the present and future. On May 28, 2021, the Copyright Board of Canada released a final decision relating to the Pay Audio Services Tariff. The decision and certified tariff were in line with the Objectors expectations.

Contractual Obligations

The Corporation is committed under the terms of contractual obligations with various expiration dates, primarily the rental of office space, financial obligations under its credit agreement, broadcast licence and commitments for copyright royalties. There have been no material changes to these obligations since March 31, 2021.

Transactions Between Related Parties

The key management personnel of the Corporation are the Chief Executive Officer, Chief Financial Officer and certain other key employees of the Corporation. There have been no material changes to the nature or importance of the transactions between related parties since March 31, 2021.

Off-Balance Sheet Arrangements

The Corporation therefore has no off-balance sheet arrangements, except for the operating leases with terms of twelve months or less, leases of low-value assets or leases that are not in scope of IFRS 16, that have, or are reasonably likely to have, a current or future material effect on its consolidated financial position, financial performance, liquidity, capital expenditures or capital resources.

Disclosure of Outstanding Share Data

Issued and outstanding shares and outstanding stock options consisted of:

	November 5,2021	September 30,2021
Issued and outstanding shares:
Subordinate voting shares	52,260,617	52,765,422
Subordinate voting shares held in trust through employee share
purchase plan	(26,354)	(25,889)
Variable subordinate voting shares	384,685	373,780
Multiple votingshares	17,941,498	17,941,498
	70,560,446	71,054,811
Outstanding stock options:
Stock options	3,471,085	3,471,085

The Corporation has a stock option plan to attract and retain employees, directors, officers and consultants. The plan provides for the granting of options to purchase subordinate voting shares. Under this plan, 10% of all multiple voting shares, subordinate voting shares and variable subordinate voting shares issued and outstanding on a non-diluted basis is reserved for issuance. During the first six months of Fiscal 2022, 60,000 options were exercised and 367,831 options were granted to eligible employees, subject to service vesting periods of 4 years.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

18

Financial Risk Factors

The Corporation is exposed to a variety of financial risks: credit risk, liquidity risk and market risk (including currency risk and interest risk). The interim consolidated financial statements and management discussion and analysis do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the annual financial statements as at March 31, 2021. The Corporation is not aware of any significant changes to the from those disclosed at that time.

Risk Factors

For a detailed description of risk factors associated with the Corporation, please refer to the “Risk Factors” section of the Corporation’s Annual Information Form dated June 2, 2021. The Corporation is not aware of any significant changes to the Corporation’s risk factors from those disclosed at that time.

Future Accounting Changes

For information on future accounting changes, please refer to the unaudited interim consolidated financial statements.

Evaluation of Disclosure Controls and Procedures

Internal control over financial reporting ("ICFR") is a process designed to provide reasonable, but not absolute, assurance regarding the reliability of financial reporting and of the preparation of financial statements for external purposes in accordance with IFRS. The President and Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), together with Management, are responsible for establishing and maintaining adequate disclosure controls and procedures ("DC&P") and ICFR, as defined in National Instrument 52-109. The Corporation’s internal control framework is based on the criteria published in the updated version released in May 2013 of the report Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“2013 COSO Framework”).

The Corporation’s management, under the supervision of the CEO and CFO, designed ICFR to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS and based on 2013 COSO Framework. The DC&P have been designed to provide reasonable assurance that material information relating to the Corporation is made known to the CEO and CFO by others, and that information required to be disclosed by the Corporation in its annual filings, interim filings or other reports filed or submitted by the Corporation under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation.

During the second quarter ended September 30, 2021, there have been no changes in the Corporation’s internal control over financial reporting that have materially affected, or are likely to materially affect, the Corporation’s ICFR.

Management’s assessment of and conclusion on the design and the effectiveness of the Corporation’s ICFR as at August 3, 2021, did not include the controls or procedures of the operations of Calm Radio. The Corporation has accordingly availed itself of provision 3.3(1)(b) of Regulation 52-109 which permits exclusion of these acquisitions in the design and operating effectiveness assessment of its ICFR for a maximum period of 365 days from the date of acquisition.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

19

Subsequent Events

Dividend

On November 9, 2021, the Corporation declared a dividend of $0.075 per subordinate voting share, variable subordinate voting share and multiple voting share. The dividend will be payable on or around December 15, 2021, to shareholders on record as of November 30, 2021.

Subordinated debt

On October 26, 2021, the Corporation made voluntary capital repayments under its prepayment option of $6.4 million. The remaining capital balance of $25.6 million will be payable on maturity date.

Credit Facilities

On October 15, 2021, the Corporation successfully completed the increase and extension of its existing credit facilities, providing additional liquidity for operations and M&A activities. The $442.5 million credit facilities consist of a $375.0 million revolving credit facility and a $67.5 million term loan, both maturing in October 2026. The renewed terms include incremental commitments up to $100.0 million upon request, subject to predetermined conditions. The pre-existing sub debt of $32.0 million maturing in October 2023 combined with the credit facilities described above accounts for total flexibility of up to $574.5 million.

Additional Information

Additional information about the Corporation is available on our website at www.stingray.com and on the SEDAR website at www.sedar.com.

Second Quarter Report 2022 | Stingray Group Inc. | Management’s Discussion and Analysis

20

Consolidated Statements of Comprehensive Income

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, except per share amounts) (Unaudited) Note	3 months 6 months
	September 30, September 30, September 30, September 30, 2021 2020 2021 2020
Revenues 5 Operating expenses Depreciation, amortization and write-off Net finance expense (income) 6 Change in fair value of investments 14 Acquisition, legal, restructuring and other expenses (income) 7	$ 71,429 $ 64,294 $ 136,237 $ 116,587 47,338 34,669 90,245 62,963 8,671 9,577 18,118 19,100 (364) 2,774 4,889 7,375 (13) 461 (13) 1,353 848 271 2,016 (126)
Income before income taxes Income taxes	14,949 16,542 20,982 25,922 2,874 4,654 4,707 7,013
Net income	$ 12,075 $ 11,888 $ 16,275 $ 18,909
Net income per share — Basic and Diluted	$ 0.17 $ 0.16 $ 0.23 $ 0.26
Weighted average number of shares — Basic Weighted average number of shares — Diluted	71,381,098 73,593,039 71,597,266 73,584,077 71,978,422 73,773,113 72,169,212 73,791,135
Comprehensive income Net income Other comprehensive income (loss) Items that may be reclassified to profit and loss Exchange differences on translation of foreign operations	$ 12,075 $ 11,888 $ 16,275 $ 18,909 2,094 (72) 1,231 (780)
Total other comprehensive gain (loss)	2,094 (72) 1,231 (780)
Total comprehensive income	$ 14,169 $ 11,816 $ 17,506 $ 18,129

Net income is entirely attributable to Shareholders.

The accompanying notes are an integral part of these interim consolidated financial statements.

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

21

Consolidated Statements of Financial Position

September 30, 2021 and March 31, 2021

Consolidated Statements of Financial Position September 30, 2021 and March 31, 2021
(In thousands of Canadian dollars) (Unaudited) Note	September 30, 2021 March 31, 2021
Assets Current assets Cash and cash equivalents $ Trade and other receivables Income taxes receivable Inventories Other current assets	8,475 $ 9,040 64,583 61,114 3,761 3,801 5,348 3,215 14,154 13,439
Non-current assets Property and equipment 8 Right-of-use assets on leases 8 Intangible assets, excluding broadcast licences 8 Broadcast licences 8 Goodwill 8 Investments Other non-current assets Deferred tax assets	96,321 90,609 40,588 42,228 25,782 28,184 49,809 41,884 272,988 272,988 337,948 337,897 6,075 3,046 1,271 1,335 3,907 4,666
Total assets $	834,689 $ 822,837
Liabilities and Equity Current liabilities Credit facilities 9 $ Accounts payable and accrued liabilities Dividend payable Deferred revenues Current portion of lease liabilities 10 Current portion of other liabilities 11 Income taxes payable	7,500 $ 27,462 55,277 53,146 — 5,409 6,043 4,970 3,810 4,479 17,446 15,812 12,624 9,211
Non-current liabilities Credit facilities 9 Subordinated debt Deferred revenues Lease liabilities 10 Other liabilities 11 Deferred tax liabilities	102,700 120,489 305,672 276,242 31,791 31,741 1,128 — 24,069 25,733 38,546 44,215 51,427 49,725
Total liabilities Shareholders’ equity Share capital 12 Contributed surplus Deficit Accumulated other comprehensive income (loss)	555,333 548,145 307,856 313,951 5,589 5,180 (31,053) (40,172) (3,036) (4,267)
Total equity Subsequent events(note 15)	279,356 274,692
Total liabilities and equity $	834,689 $ 822,837

The accompanying notes are an integral part of these interim consolidated financial statements.

Approved by the Board of Directors,

(Signed) Eric Boyko, Director

(Signed) Pascal Tremblay, Director

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

22

Consolidated Statements of Changes in Equity

Six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, except number of share capital) (Unaudited)	Share Capital Accumulated other comprehensive income (loss) Number Amount Contributed surplus Deficit Cumulative Translation Account Defined BenefitPlans Total shareholders’ equity
Balance at March 31, 2020 Issuance of shares upon exercise of options Dividends Repurchase and cancellation of shares Share-based compensation Employee share purchase plan Net income Other comprehensive loss	73,549,454 $ 322,366 $ 4,620 $ (56,407) $ 3,891 $ (574) $ 273,896 14,035 55 (23) — — — 32 — — — (11,036) — — (11,036) (20,000) (114) — 3 — — (111) — — 325 — — — 325 (26,293) (152) 154 — — — 2 — — — 18,909 — — 18,909 — — — — (780) — (780)
Balance at September 30, 2020	73,517,196 $ 322,155 $ 5,076 $ (48,531) $ 3,111 $ (574) $ 281,237
Balance at March 31, 2021 72,111,588 $ 313,951 $ 5,180 $ (40,172) $ (3,775) $ (492) $ 274,692 Issuance of shares upon exercise of options (note 12) 60,000 321 (43) — — — 278 Dividends — — — (5,316) — — (5,316) Repurchase and cancellation of shares (note 12) (1,098,000) (6,241) — (1,840) — — (8,081) Share-based compensation — — 277 — — — 277 Employee share purchase plan (note 12) (18,777) (175) 175 — — — — Net income — — — 16,275 — — 16,275 Other comprehensive income — — — — 1,231 — 1,231
Balance at September 30, 2021 71,054,811 $ 307,856 $ 5,589 $ (31,053) $ (2,544) $ (492) $ 279,356

The accompanying notes are an integral part of these interim consolidated financial statements.

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

23

Consolidated Statements of Cash Flows

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars) (Unaudited) Note	3months 6months
	September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Operating activities: Net income $ 12,075 $ 11,888 $ 16,275 $ 18,909 Adjustments for: Depreciation, amortization and write-off 8,671 9,577 18,118 19,100 Share-based compensation, PSU and DSU expenses 1,496 1,531 3,750 3,013 Interest expense and standby fees 6 3,236 3,868 6,698 7,507 Mark-to-market gains on derivative financial instruments 6 (1,517) (1,566) (999) (303) Change in fair value of investments (13) 461 (13) 1,353 Share of results of joint venture 7 (15) 65 (25) Equity loss on associates 30 — 30 — Change in fair value of contingent consideration 6 (4,147) 1,098 (3,561) 582 Depreciation, amortization and accretion of other liabilities 6 115 816 625 1,609 Interest expense on lease liabilities 6,10 412 403 829 792 Income tax expense 2,874 4,654 4,707 7,013 Income taxes paid (479) (779) (622) (1,033)
22,760 31,936 45,902 58,517 Net changein non-cashoperatingitems 13 (2,323) (6,530) (9,128) 4,882
20,437 25,406 36,774 63,399 Financing activities: Increase (decrease) of credit facilities 7,113 (4,493) 8,870 (25,408) Payment of dividends (5,348) (5,518) (10,725) (11,036) Share repurchases 12 (3,396) (111) (8,081) (111) Proceeds from the exercise of stock options — — 278 32 Shares purchased under the employee share purchase plan (102) (71) (175) (152) Interest paid (3,234) (2,912) (7,125) (6,599) Repayment of lease liabilities (1,526) (1,443) (2,611) (2,657) Repayment ofother liabilities (4,412) (3,253) (5,873) (3,469)
(10,905) (17,801) (25,442) (49,400) Investing activities: Business acquisition, net of cash acquired — — 314 — Acquisition of investments (250) — (560) — Acquisition of an investment in associates (2,508) — (2,508) — Acquisition of property and equipment (2,360) (1,209) (4,437) (1,912) Acquisition of intangible assets other than internally developed intangible assets (305) (212) (503) (470) Addition to internally developed intangible assets (2,050) (1,671) (4,203) (3,223)
(7,473) (3,092) (11,897) (5,605)
Increase (decrease) in cash and cash equivalents 2,059 4,513 (565) 8,394 Cashand cashequivalents, beginning ofperiod 6,416 6,393 9,040 2,512
Cash and cash equivalents,end ofperiod $ 8,475 $ 10,906 $ 8,475 $ 10,906

The accompanying notes are an integral part of these interim consolidated financial statements.

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

24

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated) (Unaudited)

1. BUSINESS DESCRIPTION AND BASIS OF CONSOLIDATION

Stingray Group Inc. (the “Corporation”) is incorporated under the Canada Business Corporations Act. The Corporation is domiciled in Canada and its registered office is located at 730 Wellington, Montréal, Québec, H3C 1T4. The Corporation is a provider of multi-platform music services. It broadcasts high quality music and video content on a number of platforms including radio stations, premium television channels, digital TV, satellite TV, IPTV, the Internet, mobile devices and game consoles. A portion of the Corporation’s revenue is derived from the sale of advertising airtime, which is subject to the seasonal fluctuations of the Canadian radio industry. Accordingly, the first and third quarter results tend to be the strongest and the second and fourth quarter results tend to be the weakest in a fiscal year. However, for Fiscal, 2021, Radio revenues did not follow historical patterns due to the ongoing impact of the coronavirus (“COVID-19”) pandemic.

These interim consolidated financial statements include the accounts of the Corporation and its wholly-owned subsidiaries, Stingray Music USA Inc., 2144286 Ontario Inc., 4445694 Canada Inc., Pay Audio Services Limited Partnership, Music Choice Europe Limited, Stingray Digital International Ltd., Stingray Europe B.V., Transmedia Communications SA, SBA Music PTY Ltd., Stingray Music, S.A. de C.V., DJ Matic NV, Stingray Radio Inc. and Calm Radio Corp. and all these entities’ wholly owned subsidiaries.

The auditors of the Corporation have not performed a review of the interim financial report for the three-month and six-month periods ended September 30, 2021.

2. SIGNIFICANT CHANGES AND HIGHLIGHTS

The interim consolidated financial position and performance of the Corporation was particularly affected by the following events and transactions during the three-month and six-month periods ended September 30, 2021:

• On September 21, 2021, the Corporation announced that the Toronto Stock Exchange had approved its normal course issuer bid, authorizing the Corporation to repurchase up to an aggregate 3,222,901 subordinate voting shares and variable subordinate voting shares (collectively, “Subordinate Shares”), representing approximately 10% of the public float of Subordinate Shares as at September 13, 2021. Refer to note 12 for more information.

• On August 11, 2021, the Corporation announced that it has acquired a minority interest of 20% in The Singing Machine Company Inc., for a cash consideration of US$2,000 ($2,508).

• On June 30, 2021, the Corporation signed an agreement to acquire all of the outstanding shares of Calm Radio Corp. (“Calm Radio”), a provider of online music focused on the wellness and relaxation markets, for total consideration of $8,171. It resulted in the recognition of goodwill (note 8), intangible assets (note 8) and contingent consideration (note 11).

• On May 28, 2021, the Corporation fully repaid, on maturity, its $20,000 term loan.

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

25

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated) (Unaudited)

3. BUSINESS ACQUISITIONS

FISCAL 2022

Calm Radio Corp.

On June 30, 2021, the Corporation purchased all of the outstanding shares of Calm Radio, an online music streaming service focused on the wellness and relaxation markets, for total consideration of $8,171. As a result of the acquisition, goodwill of $39 was recognized related to the operating synergies expected to be achieved from integrating the acquired business into the Corporation’s existing business. The goodwill will not be deductible for tax purposes.

The fair value of acquired trade receivables was $149, which represented the gross contractual amount. The contingent consideration arrangement requires the Corporation to pay, in cash, to the former owners, an amount not exceeding $8,000 over the next three years ending in August 2024, based on recurring monthly revenues targets. The fair value of the contingent consideration was determined using an income approach based on the estimated amount and timing of projected cash flows.

The results of the business acquisition of Calm Radio for the period ended September 30, 2021 are included in results since the date of the acquisition. Revenues recorded from the acquisition date to September 30, 2021 were $901 and net income was $41. Had the acquisition occurred at the beginning of the fiscal year, revenues related to this acquired business would have been approximately $1,836 and net income would have been $92.

		Preliminary
Assets acquired:
Cash and cash equivalents	$	314
Trade and other receivables		149
Other current assets		104
Property and equipment		83
Intangible assets		12,728
Goodwill		39
Deferred taxassets		142
		13,559
Liabilities assumed:
Accounts payable and accrued liabilities		208
Deferred revenues		1,872
Deferred tax liabilities		3,308
		5,388
Net assets acquired at fair value	$	8,171
Consideration given:
Balance payable on business acquisition	$	4,000
Contingent consideration		3,912
Working capital payable		259
	$	8,171

As of the reporting date, the Corporation has not completed the purchase price allocation over the identifiable net assets and goodwill as information to confirm the fair value of certain assets and liabilities remains to be obtained.

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

26

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated) (Unaudited)

FISCAL 2021

Marketing Sensorial México

On May 6, 2020, the Corporation purchased all of the assets of Marketing Sensorial México (“MSM”) for total consideration of MXN 127,759 ($7,433). MSM is a Mexican leader in point-of-sale marketing solutions. As a result of the acquisition, goodwill of $2,947 was recognized related to the operating synergies expected to be achieved from integrating the acquired business into the Corporation’s existing business. The intangible assets and goodwill will be deductible for tax purposes.

The Corporation finalized the assessment of the fair values of the assets acquired and liabilities assumed related to this acquisition and no adjustment to the preliminary assessment have been recorded in the consolidated statements of financial position.

		Final
Assets acquired:
Property and equipment	$	1,765
Intangible assets		2,721
Goodwill		2,947
Net assets acquired at fair value	$	7,433
Consideration given:
Balance payable on business acquisition	$	5,236
Contingent consideration		2,197
	$	7,433

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

27

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated) (Unaudited)

4. SEGMENT INFORMATION

OPERATING SEGMENTS

The Corporation’s operating segments are aggregated in two segments: Broadcasting and commercial music and Radio . The operating segments reflect how the Corporation manages its operations, resources and assets and how it measures its performance. Both operating segments’ financial results are reviewed by the Chief operating decision maker (“CDOM”) to make decisions about resources to be allocated to the segment and asses its performance based on adjusted earnings before interest, taxes, depreciation and amortization (thereafter “Adjusted EBITDA”), and for which distinct financial information is available. Adjusted EBITDA excludes from income before income taxes the following expenses: share-based compensation, performance and deferred share unit expense, depreciation, amortization and write-off, net finance expense (income), change in fair value of investments and acquisition, legal, restructuring and other expenses (income). There are no inter-segment revenues for the periods.

The Broadcasting and commercial music segment specializes in the broadcast of music and videos on multiple platforms and digital signage experiences and generates revenues from subscriptions or contracts.

The Radio segment operates several radio stations across Canada and generates revenues from advertising.

Corporate and eliminations is a non-operating segment comprising corporate and administrative functions that provide support and governance to the Corporation’s operating business units.

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

28

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated) (Unaudited)

The following tables present financial information by segment for the three-month and six-month periods ended September 30, 2021 and 2020.

	Broadcasting and commercial music Radio Corporate and eliminations Consolidated
	Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021
Three-month periods Revenues Operating expenses (excluding Share-based compensation and PSU and DSU expenses)	$ 39,118 $ 39,169 $ 32,311 $ 25,125 $ — $ —$ 71,429 $ 64,294 24,585 20,273 19,778 12,005 1,479 860 45,842 33,138
Adjusted EBITDA Share-based compensation PSU and DSU expenses Depreciation, amortization and write-off Net finance expense (income) Change in fair value of investments Acquisition, legal, restructuring and other expenses (income)	$ 14,533 $ 18,896 $ 12,533 $ 13,120 (1,479) (860) 25,587 31,156 196 219 196 219 1,300 1,312 1,300 1,312 8,671 9,577 8,671 9,577 (364) 2,774 (364) 2,774 (13) 461 (13) 461 $ 848 $ 271 848 271
Income before income taxes Income taxes	14,949 16,542 2,874 **4,654 **
Net income	$ 12,075$ 11,888
	Broadcasting and commercial music Radio Corporate and eliminations Consolidated
	Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021
Six-month periods Revenues Operating expenses (excluding Share-based compensation and PSU and DSU expenses)	$ 74,696 $ 75,116 $ 61,541 $ 41,471 $ — $ —$ 136,237 $ 116,587 45,501 35,853 38,183 22,590 2,811 1,507 86,495 59,950
Adjusted EBITDA Share-based compensation PSU and DSU expenses Depreciation, amortization and write-off Net finance expense (income) Change in fair value of investments Acquisition, legal, restructuring and other expenses (income)	$ 29,195 $ 39,263 $ 23,358 $ 18,881 (2,811) (1,507) 49,742 56,637 360 385 360 385 3,390 2,628 3,390 2,628 18,118 19,100 18,118 19,100 4,889 7,375 4,889 7,375 (13) 1,353 (13) 1,353 $ 2,016 $ (126) 2,016 (126)
Income before income taxes Income taxes	20,982 25,922 4,707 7,013
Net income	$ 16,275$ 18,909

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

29

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated) (Unaudited)

In Fiscal 2021, the Corporation applied and qualified for the Canada Emergency Wage Subsidy (“CEWS”), a Canadian federal government program created in response to the negative economic impact of the COVID 19 pandemic and designed to provide financial assistance to businesses who experienced a certain level of decrease in revenues to help them retain their employees. The Corporation recognized, as a reduction of operating expenses, the subsidies claimed under the CEWS and other programs.

The Corporation also received tax credits related to its research and development and multimedia activities and was recorded as a reduction of operating expenses.

	3months 6months
	September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
CEWS Research and development and multimedia tax credits	$ 1,163 $ 8,112 $ 4,039 $ 18,009 723 611 1,271 892
	$ 1,886 $ 8,723 $ 5,310 $ 18,901
Broadcasting and commercial music	Radio Corporate and eliminations(1) Consolidated
September 30,2021 March 31, 2021	September 30,2021 March 31, 2021 September 30,2021 March 31, 2021 September 30,2021 March 31, 2021
Total assets $ 227,215 $ 217,256 Total liabilities $ 88,614 $ 85,194	$ 607,474 $ 605,581 $ — $ —$ 834,689 $ 822,837 $ 117,540 $ 116,727 $ 349,179 $ 346,224$ 555,333 $ 548,145

(1) Total liabilities include operating liabilities, the Credit facilities and the Subordinated debt

		Broadcasting and	Broadcasting and
		commercial music				Radio			Consolidated
Three-month periods		Q2 2022	Q2	2021		Q2 2022	Q2 2021		Q2 2022		Q2 2021
Acquisition of property
and equipment	$	1,100	$	1,030	$	1,241 $	252	$	2,341	$	1,282
Addition to
right-of-use assets on
leases	$	477	$	—	$	226 $	1,393	$	703	$	1,393
Acquisition of intangible
assets	$	2,251	$	2,258	$	— $	—	$	2,251	$	2,258
Acquisition of broadcast
licences	$	—	$	—	$	— $	78	$	—	$	78

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

30

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian	dollars,	unless otherwise stated)	unless otherwise stated)	unless otherwise stated)
(Unaudited)
		Broadcasting and
		commercial music				Radio			Consolidated
Six-month periods		Q2 2022	Q2	2021		Q2 2022	Q2 2021		Q2 2022		Q2 2021
Acquisition of property
and equipment	$	2,437	$	4,112	$	1,575 $	397	$	4,012	$	4,509
Addition to
right-of-use assets on
leases	$	526	$	394	$	354 $	1,405	$	880	$	1,799
Acquisition of intangible
assets	$	17,577	$	6,690	$	— $	—	$	17,577	$	6,690
Acquisition of broadcast
licences	$	—	$	—	$	— $	78	$	—	$	78
Goodwill recorded on
business acquisitions	$	39	$	2,947	$	— $	—	$	39	$	2,947

Acquisition of property and equipment, intangible assets, broadcast licences and goodwill, includes those acquired through business acquisitions, whether they were paid or not, and none are related to the Corporate segment.

Approximately 80% of the Corporation’s non-current assets are located in Canada.

5. REVENUES

DISAGGREGATION OF REVENUES

The following table presents the Corporation’s revenues disaggregated by reportable segment, primary geographical market and product.

	Reportable segments(3)
Three-month periods	Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021
	Broadcasting and commercial music Radio Total revenues $ 14,389 $ 14,585 $ 32,311 $ 25,125 $ 46,700 $ 39,710 11,485 10,091 — — 11,485 10,091 13,244 14,493 — — 13,244 14,493
Geography Canada United States Other countries
	39,118 39,169 32,311 25,125 71,429 64,294
Products Subscriptions(1) Equipment and labor(2) Advertising(2)	33,385 33,921 — — 33,385 33,921 3,727 4,107 — — 3,727 4,107 2,006 1,141 32,311 25,125 34,317 26,266
	$ 39,118 $ 39,169 $ 32,311 $ 25,125 $ 71,429 $ 64,294

(1) Generally recognized over time

(2) Generally recognized at a point in time

(3) No revenues are generated from the Corporate Segment

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

31

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated) (Unaudited)

	Reportable segments(3)
Six-month periods	Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021
	Broadcasting and commercial music Radio Total revenues $ 26,535 $ 26,296 $ 61,541 $ 41,471 $ 88,076 $ 67,767 21,763 20,393 — — 21,763 20,393 26,398 28,427 — — 26,398 28,427
Geography Canada United States Other countries
	74,696 75,116 61,541 41,471 136,237 116,587
Products Subscriptions(1) Equipment and labor(2) Advertising(2)	64,990 66,814 — — 64,990 66,814 5,896 6,336 — — 5,896 6,336 3,810 1,966 61,541 41,471 65,351 43,437
	$ 74,696 $ 75,116 $ 61,541 $ 41,471 $ 136,237 $ 116,587

(1) Generally recognized over time

(2) Generally recognized at a point in time

(3) No revenues are generated from the Corporate Segment

6. NET FINANCE EXPENSE (INCOME)

NET FINANCE EXPENSE(INCOME)
	3months 6months
	September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Interest expense and standby fees Mark-to-market gains on derivative financial instruments Change in fair value of contingent consideration Depreciation, amortization and accretion of other liabilities Interest expense on lease liabilities (note 10) Foreign exchange loss(gain)	$ 3,236 $ 3,868 $ 6,698 $ 7,507 (1,517) (1,566) (999) (303) (4,147) 1,098 (3,561) 582 115 816 625 1,609 412 403 829 792 1,537 (1,845) 1,297 (2,812)
	$ (364) $ 2,774 $ 4,889 $ 7,375

7. ACQUISITION, LEGAL, RESTRUCTURING AND OTHER EXPENSES (INCOME)

	3months 6months
	September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Acquisition Legal Restructuringand other	$ 199 $ 248 $ 213 $ 530 85 244 1,076 (536) 564 (221) 727 (120)
	$ 848 $ 271 $ 2,016 $ (126)

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

32

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated)

(Unaudited)

8. PROPERTY AND EQUIPMENT, RIGHT-OF-USE-ASSETS ON LEASES, INTANGIBLE ASSETS, BROADCAST LICENCES AND GOODWILL

		Property	Right-of-use	Right-of-use
		and		assets on	Intangible	Broadcast
	equipment			leases	assets	licences	Goodwill
Year ended March 31, 2021
Net book amount as at March 31, 2020	$	45,732	$	29,460 $	54,490 $	272,910 $	337,824
Additions		6,493		4,697	8,933	78	—
Additions through business acquisition		1,765		—	2,721	—	2,947
Disposals and write-off		(1,058)		(372)	(2,457)	—	—
Depreciation of property and equipment		(10,907)		—	—	—	—
Depreciation of right-of-use assets on leases		—		(5,614)	—	—	—
Amortization of intangible assets		—		—	(21,379)	—	—
Foreignexchange differences		203		13	(424)	—	(2,874)
Net book amount as at March 31, 2021	$	42,228	$	28,184$	41,884$	272,988$	337,897
Six-month period ended
September 30, 2021
Net book amount as at March 31, 2021	$	42,228	$	28,184 $	41,884 $	272,988 $	337,897
Additions		3,929		880	4,849	—	—
Additions through business acquisition		83		—	12,728	—	39
Disposals and write-off		(346)		(682)	—	—	—
Depreciation of property and equipment		(4,624)		—	—	—	—
Depreciation of right-of-use assets on leases		—		(2,594)	—	—	—
Amortization of intangible assets		—		—	(10,554)	—	—
Foreignexchange differences		(682)		(6)	902	—	12
Net book amount as at September 30, 2021	$	40,588	$	25,782 $	49,809 $	272,988 $	337,948

9. CREDIT FACILITIES

The total credit facilities consist of a $325,000 revolving credit facility and a remaining $67,500 term loan, both maturing in October 2023. On May 28, 2021, the Corporation fully repaid, on maturity, its $20,000 term loan. The credit facilities were amended after September 30, 2021 to increase the authorized amount of the revolving credit facility to $375,000 (note 15).

The credit facilities bear interest at either (a) the bank’s prime rate plus an applicable margin based on a financial covenant or (b) the banker’s acceptance rate plus an applicable margin based on a financial covenant. In addition, the Corporation incurs standby fees, varying between 0.40% and 0.63% based on a financial covenant.

The table below is a summary of the Credit facilities:

September 30, 2021	Total	available		Drawn	Letterofcredit	Letterofcredit		Net available
Committed credit facilities
Revolving facility	$	325,000	$	246,054	$	750	$	78,196
Term facility		67,500		67,500		—		—
Total committed credit facilities	$	392,500	$	313,554	$	750	$	78,196
Less: unamortized deferred financing fees				(382)
Balance, end of period				313,172
Current portion			$	7,500
Non-currentportion			$	305,672

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

33

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated)	(In thousands of Canadian dollars, unless otherwise stated)
(Unaudited)
March 31, 2021	Totalavailable			Drawn	Letterofcredit			Net available
Committed credit facilities
Revolving facility	$	325,000	$	213,434	$	750	$	110,816
Term facilities		91,250		91,250		—		—
Total committed credit facilities	$	416,250	$	304,684	$	750	$	110,816
Less:unamortized deferredfinancingfees				(980)
Balance, end of period				303,704
Current portion			$	27,462
Non-currentportion			$	276,242
As at September 30, 2021 and March 31, 2021,	letters of credit amounting to $750 reduced the availability							on the revolvin
facility.
The Corporation is required to make consecutive quarterly capital repayments of 2.50% of the initial drawdown amount
the term facility. The remaining capital balance	will be payable on maturity date, on October 25, 2023.
						Capital repayments of
							the term facility
2022							$	7,500
2023								60,000
							$	67,500

As at September 30, 2021 and March 31, 2021, letters of credit amounting to $750 reduced the availability on the revolving facility.

The Corporation is required to make consecutive quarterly capital repayments of 2.50% of the initial drawdown amount of the term facility. The remaining capital balance will be payable on maturity date, on October 25, 2023.

10. LEASE LIABILITIES

The following table presents a summary of the activity related to the lease liabilities of the Corporation for the three-month and six-month periods ended September 30, 2021:

	3months 6months
	September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Lease liabilities, beginning of period Additions Payment of lease liabilities, including related interest Reassessment of the lease term Interest expense on lease liabilities (note 7) Foreignexchange differences	$ 28,993 $ 29,820 $ 30,212 $ 30,853 703 1,393 880 1,799 (1,938) (1,846) (3,440) (3,449) (294) (8) (594) (256) 412 403 829 792 3 22 (8) 45
Lease liabilities, end of period	$ 27,879 $ 29,784 $ 27,879 $ 29,784
Lease liabilities included in the Consolidated statements of financial position Current portion Non-current portion	September 30, 2021 March 31, 2021 $ 3,810 $ 4,479 $ 24,069 $ 25,733
	$ 27,879 $ 30,212

The following table presents the maturity analysis of contractual undiscounted cashflows related to the lease liabilities of the Corporation as of September 30, 2021:

he Corporation as of September 30, 2021:
Less than one year	$	6,142
One to five years		17,161
More than five years		16,268
Total undiscounted lease liabilities as at September 30, 2021	$	39,571

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

34

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated) (Unaudited)

11. OTHER LIABILITIES

OTHER LIABILITIES
		September 30,			March 31,
	Note		2021		2021
CRTC tangible benefits		$	27,562	$	27,970
Contingent consideration			13,346		14,456
Balance payable on business acquisitions			25		100
Accrued pension benefit liability			5,813		6,112
Derivative financial instruments	14		4,371		5,370
Performance share unit payable			3,364		4,478
Other			1,511		1,541
			55,992		60,027
Current portion			(17,446)		(15,812)
		$	38,546	$	44,215

12. SHARE CAPITAL

Authorized:

Unlimited number of subordinate voting shares, participating, without par value

Unlimited number of variable subordinate voting shares, participating, without par value

Unlimited number of multiple voting shares (10 votes per share), participating, without par value

Unlimited number of special shares, participating, without par value

Unlimited number of preferred shares issuable in one or more series, non-participating, without par value

Issued and outstanding:

The movements in share capital were as follows:

	Number of		Carrying
	shares		amount
Year ended March 31, 2021
Subordinate voting shares and variable subordinate voting shares
As at March 31, 2020	55,607,956	$	304,140
Exercise of stock options	80,732		269
Repurchased and cancelled	(1,530,180)		(8,700)
Purchased andheldintrust throughemployee share purchase plan	11,582		16
As at March 31, 2021	54,170,090	$	295,725
Multiple voting shares
As atMarch31,2020 and2021	17,941,498		18,226
	72,111,588	$	313,951

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

35

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated)
(Unaudited)
Six-month period ended September 30, 2021
Subordinate voting shares and variable subordinate voting shares
As at March 31, 2021	54,170,090	$	295,725
Exercise of stock options	60,000		321
Repurchased through share repurchase program and cancelled	(1,098,000)		(6,241)
Purchased andheldintrust throughemployee share purchase plan	(18,777)		(175)
As at September 30, 2021	53,113,313	$	289,630
Multiple voting shares
As atMarch31,2021and September30,2021	17,941,498		18,226
	71,054,811	$	307,856

Transactions for the six-month period ended September 30, 2021

During the period, 60,000 stock options were exercised and consequently, the Corporation issued 60,000 subordinate voting shares. The proceeds amounted to $278. An amount of $43 of contributed surplus related to those stock options was transferred to the subordinate voting shares’ account balance.

On August 3, 2021, the Corporation declared a dividend of $0.075 per subordinate voting share, variable subordinate voting share and multiple voting share. The dividend of $5,348 was paid on September 15, 2021.

On March 24, 2021, the Corporation declared a dividend of $0.075 per subordinate voting share, variable subordinate voting share, multiple voting share and subscription receipts. A dividend payable of $5,409 was accrued in the consolidated statement of financial position as at March 31, 2021. The dividend paid on June 15, 2021 was $5,377, which resulted in an adjustment of $32 in the consolidated statement of changes in equity for the three-month period ended June 30, 2021.

Share repurchase program

On September 21, 2021, the Toronto Stock Exchange (the "TSX") approved the implementation of a share repurchase program, which took effect on September 27, 2021. This program allows the Corporation to repurchase up to an aggregate 3,222,901 subordinate voting shares and variable subordinate voting shares (collectively, the "Subordinate Shares"), representing approximately 10% of the Subordinate Shares issued and outstanding as at September 13, 2021. In accordance with TSX requirements, the Corporation is entitled to purchase, on any trading day, up to a total of 12,130 Subordinate Shares, representing 25% of the net average daily trading volume of the Subordinate Shares. When making such repurchases, the number of Subordinate Shares in circulation is reduced and the proportionate interest of all remaining shareholders in the Corporation's share capital is increased on a pro rata basis. All shares repurchased under the share repurchase program will be cancelled upon repurchase. The share repurchase period will end no later than September 26, 2022.

The following table summarizes the Corporation's share repurchase activities during the three-month and six-month periods ended September 30, 2021:

eriods ended September 30, 2021:
		3months		6months
Subordinate voting shares repurchased for
cancellation_(unit)_		450,000		1,098,500
Average price per share	$	7.4649	$	7.3598
Total repurchase cost	$	3,396	$	8,081
Repurchase resulting in a reduction of:
Share capital	$	2,586	$	6,241
Deficit(1)	$	810	$	1,840

(1) The excess of net repurchase price over the average book value of the Subordinate voting shares.

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

36

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated) (Unaudited)

13. SUPPLEMENTAL CASH FLOW INFORMATION

	3months 6months
	September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Trade and other receivables Inventories Other current assets Other non-current assets Accounts payable and accrued liabilities Deferred revenues Income taxes payable Other liabilities	$ (2,421) $ 378 $ (3,044) $ 9,087 (2,135) 497 (2,092) (302) 1,927 (484) (523) 1,134 7 59 21 141 482 (4,416) (1,073) (2,173) (11) 76 379 190 (885) (2,224) (1,305) (2,006) 713 (416) (1,491) (1,189)
	$ (2,323) $ (6,530) $ (9,128) $ 4,882

The following table summarizes the Corporation's additions not affecting cash and cash equivalents for the three-month and six-month periods ended September 30, 2021 and 2020:

	3months 6months
	September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Additions to property and equipment Additions to intangible assets, excluding broadcast licences and intangible assets acquired through business acquisitions	$ (19) $ 73 $ (425) $ 2,597 (104) 375 143 276
	$ (123) $ 448 $ (282) $ 2,873

14. FINANCIAL INSTRUMENTS

FINANCIAL RISK FACTORS

The Corporation is exposed to a variety of financial risks: credit risk, liquidity risk and market risk (including currency risk and interest risk). The interim consolidated financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the annual financial statements as at March 31, 2021. The Corporation is not aware of any significant changes to the Corporation’s risk factors from those disclosed at that time.

FAIR VALUES

The Corporation has determined that the carrying amount of cash and cash equivalents, trade and other receivables, accounts payable and accrued liabilities and current portion of other liabilities excluding the contingent consideration is a reasonable approximation of their fair value due to the short-term maturity of those instruments. As such, information on their fair values is not presented below. The fair value of the credit facilities approximates its carrying value as it bears interest at prime or banker’s acceptance rates plus a credit spread, which approximate current rates that could be obtained for debts with similar terms and credit risk. The fair value of derivative financial instruments is determined using an evaluation of the estimated market value, adjusted for the credit quality of the counterparty. The carrying amount of CRTC tangible benefits and balance payable on business acquisitions is a reasonable approximation of their fair value as they are discounted using the effective interest rate, which approximate current rates that could be obtained with similar terms and credit risk.

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

37

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated) (Unaudited)

The carrying and fair value of financial assets and liabilities, including their level in the fair value hierarchy, consist of the following:

As at September 30, 2021	Carrying value	Carrying value		Fair value		Level 1		Level 2		Level 3
Financial assets measured at amortized cost
Cash and cash equivalents	$	8,475
Trade and other receivables		61,164
Financial assets measured at fair value
Investments	$	1,473	$	1,473	$	—	$	—	$	1,473
Financial liabilities measured at
amortized cost
Credit facilities	$	313,172
Subordinated debt		31,791
Accounts payable and accrued liabilities		52,444
CRTC tangible benefits		27,562
Accrued pension benefit liability		5,813
Performance share unit payable		3,364
Balance payable on business acquisitions		25
Financial liabilities measured at fair value
Contingent consideration	$	13,346	$	13,346	$	—	$	—	$	13,346
Derivative financial instruments		4,371		4,371		—		4,371		—
As at March 31, 2021	Carrying value			Fair value		Level 1		Level 2		Level 3
Financial assets measured at amortized cost
Cash and cash equivalents	$	9,040
Trade and other receivables		57,891
Financial assets measured at fair value
Investments	$	900	$	900	$	—	$	—	$	900
Financial liabilities measured at
amortized cost
Credit facilities	$	303,704
Subordinated debt		31,741
Accounts payable and accrued liabilities		49,398
CRTC tangible benefits		27,970
Accrued pension benefit liability		6,112
Performance share unit payable		4,478
Balance payable on business acquisitions		100
Financial liabilities measured at fair value
Contingent consideration	$	14,456	$	14,456	$	—	$	—	$	14,456
Derivative financial instruments		5,370		5,370		—		5,370		—

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

38

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated) (Unaudited)

Fair value measurement (Level 3):

				Contingent
		Investments		consideration
Six-month period ended September 30, 2020
Opening amount as at March 31, 2020	$	23,548	$	17,831
Additions through business acquisition		—		2,197
Change in fair value		(1,353)		582
Settlements		—		(3,300)
Balance at September 30, 2020	$	22,195	$	17,310
Three-month period ended September 30, 2021
Opening amount as at March 31, 2021	$	900	$	14,456
Additions		560		—
Additions through business acquisition (note 2)		—		3,912
Change in fair value		13		(3,561)
Settlements		—		(1,461)
Balance at September 30, 2021	$	1,473	$	13,346

There were no changes in the valuation techniques for the contingent consideration, investments and investments in associates during the six-month periods ended September 30, 2021 and 2020.

INVESTMENTS

The Corporation has equity instruments in private entities that were estimated using a market comparison technique. The valuation model is based on market multiples derived from quoted price of companies comparable to the investments and the expected EBITDA on the investments.

All equity instruments in private entities are classified as financial assets at fair value through profit and loss.

The table below is a summary of the investments:

The table below is a summary of the investments:
	September 30,			March 31,
		2021		2021
Spotlight Media Ltd.	$	255	$	—
Space Factory Media Inc.		318		—
Nextologies		900		900
	$	1,473	$	900

AppDirect

During the year ended March 31, 2021, the Corporation disposed of its investment in AppDirect. The fair value of the investment as at September 30, 2020 was $21,295.

For the three-month and six-month periods ended September 30, 2020, the fair value was measured by using the equity price from the latest external significant equity financing transaction, minus a liquidity discount of 15%. The liquidity discount was used to reflect the marketability of the asset. In measuring fair value, management used the best information available in the circumstances and also an approach that it believes market participants would use. There was no change in the fair value of this instrument during this three-month period as there were no external equity financing transactions or no other indicators of significant changes that could affect the fair value of the investment.

The equity instrument in a private entity was classified as a financial asset at fair value through profit and loss.

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

39

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated) (Unaudited)

CONTINGENT CONSIDERATION

The contingent consideration related to business combinations is payable based on the achievement of targets for growth in revenues for a period from the date of the acquisition and upon renewal of client contracts. The fair value measurement of the contingent consideration is determined using unobservable (Level 3) inputs. These inputs include (i) the estimated amount and timing of projected cash flows; and (ii) the risk-adjusted discount rate used to present value the cash flows, which is based on the risk associated with the revenue targets being met. The contingent consideration is classified as a financial liability and is included in other liabilities (Note 11). The change in fair value is recognized in net finance expense (income) (Note 6).

DERIVATIVE FINANCIAL INSTRUMENTS

The Corporation use derivative financial instruments to manage its interest rate risk on its Credit facilities. These include interest rate swaps and swaptions.

The table below summarize the interest rate contracts effective as at September 30, 2021 and March 31, 2021:

					Mark-to-market	Mark-to-market		Mark-to-market
		Fixed interest			liabilities as at			liabilities as at
		rate (when	Initial	nominal	September 30,			March 31,
Maturity	Currency	applicable)		value		2021		2021
Swaps
October 25, 2024	CAD	0.81%	$	50,000	$	726	$	945
October 25, 2024	CAD	1.33%		50,000		113		403
October 25, 2021	CAD	2.19%		50,000		63		494
October 25,2024	CAD	2.29%		50,000		1,254		1,938
				200,000		2,156		3,780
Swaptions
October 25, 2024	CAD	—		100,000		921		642
October 25,2024	CAD	—		100,000		1,294		948
			$	200,000	$	2,215	$	1,590
			$	400,000	$	4,371	$	5,370

15. SUBSEQUENT EVENTS

Dividend

On November 9, 2021, the Corporation declared a dividend of $0.075 per subordinate voting share, variable subordinate voting share and multiple voting share. The dividend will be payable on or around December 15, 2021 to shareholders on record as of November 30, 2021.

Subordinated debt

On October 26, 2021, the Corporation made a voluntary capital repayment under its prepayment option of $6,400. The remaining capital balance of $25,600 will be payable on maturity date.

Credit facilities

On October 15, 2021, the Corporation amended its existing $392,500 credit facilities by increasing the authorized amount up to $442,500 and extending the maturity to October 15, 2026. The credit facilities consist of a revolving credit facility for an authorized amount up to $375,000 and a non-revolving term facility of $67,500.

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

40

Notes to Interim Consolidated Financial Statements

Three-month and six-month periods ended September 30, 2021 and 2020

(In thousands of Canadian dollars, unless otherwise stated) (Unaudited)

16. BASIS OF PREPARATION

a) Statement of compliance:

These interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) on a basis consistent with those accounting policies followed by the Corporation in the most recent audited consolidated annual financial statements. These interim consolidated financial statements have been prepared on a form in accordance with IAS 34 “Interim Financial Reporting”. Accordingly, certain information, in particular the accompanying notes, normally included in the consolidated annual financial statements prepared in accordance with IFRS, has been omitted or condensed. Income taxes in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss. These interim consolidated financial statements should be read in conjunction with the consolidated annual financial statements and the note thereto for the year ended March 31, 2021.

The interim consolidated financial statements were authorized for issue by the Board of Directors on November 9, 2021.

b) Use of estimates and judgements:

The preparation of consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these interim consolidated financial statements, the significant judgments made by management in applying the Corporation’s accounting policies and the key sources of information were the same as the ones applied to the audited consolidated financial statements for the year ended March 31, 2021.

c) Functional and presentation currency:

These interim consolidated financial statements are presented in Canadian dollars, which is the Corporation’s functional currency. All financial information presented in Canadian dollars has been rounded to the nearest thousand.

Second Quarter Report 2022 | Stingray Group Inc. | Interim Consolidated Financial Statements

41

stingray.com    