Enthusiast Gaming Holdings Inc. (“Enthusiast
Gaming” or the “Company”) (NASDAQ:EGLX; TSX:EGLX), an integrated
gaming entertainment company, today announced the sale of certain
video game editorial websites (the “Website Assets”) for a purchase
price of approximately C$6.8 million, representing a multiple of
approximately 4.5x associated revenue.
Between the sale and the Company’s expanded
credit facility announced on September 19, 2022, the Company has
bolstered its balance sheet with over C$16.8 million of
non-dilutive capital in recent weeks while reducing operating costs
in the business.
“The future of gaming content is video,
streaming and interactive content with cross-platform viewership
capabilities. These high-growth, high-margin segments have been the
core drivers in our reaching over 40 billion views annually and
expanding our gross margins to over 30%,” commented Adrian
Montgomery, Chief Executive Officer of Enthusiast Gaming.
“The sale of these legacy assets will allow us to focus our
resources on these core business capabilities as we continue to
develop proprietary, product-based media and entertainment
offerings that address these markets, such as our Addicting Games
platform, EV.IO, Gamers Greatest Talent, Luminosity Gaming, our
U.GG desktop app with now over a million downloads, and our
first-of-its-kind collaboration with the NFL in NFL Tuesday Night
Gaming. Moreover, by securing this sale at strong multiples, we
have further strengthened our balance sheet while simultaneously
reducing operational costs, giving us ample runway to get to
profitability, which we remain on pace for in the near-term.”
“As our gaming communities have evolved in terms
of their preferred mediums for gaming content, our advertising
partners have taken notice,” added Bill
Karamouzis, President of Enthusiast Gaming. “Video,
streaming and interactive content routinely drive our highest CPM
yields and margin growth as advertisers look to take advantage of
our proprietary communities, platforms and applications and their
data-rich capabilities to drive engagement with our audiences. By
focusing our asset portfolio on these core segments, we are
well-positioned to use the resources gained from this sale to give
both our audiences and our advertising partners more of what they
want.”
Among the Website Assets included as part of the
sale are Destructoid.com, Siliconera.com, Upcomer.com,
PCInvasion.com, Operationsports.com and EscapistMagazine.com,
together with their respective social media handles and the
Company’s rights to certain legacy domains and related content such
as NintendoEnthusiast.com.
About Enthusiast Gaming
Enthusiast Gaming is an integrated gaming
entertainment company, building the largest media and content
platform for video game and esports fans to connect and engage
worldwide. Combining the elements of its four core pillars:
Communities, Content, Creators, and Experiences, Enthusiast Gaming
provides a unique opportunity and integrated approach to reach and
connect with its coveted GenZ and Millennial audience. Through its
proprietary mix of digital media and entertainment assets,
Enthusiast Gaming has built a vast network of like-minded
communities to deliver the ultimate fan experience.
Contacts
Enthusiast Gaming Investor Relations:Eric Bernofsky, Chief
Corporate Officerinvestor@enthusiastgaming.com
Forward-Looking Statements
This news release contains certain statements
that may constitute forward-looking information under applicable
securities laws. All statements, other than those of historical
fact, which address activities, events, outcomes, results,
developments, performance or achievements that Enthusiast Gaming
anticipates or expects may or will occur in the future (in whole or
in part) should be considered forward-looking information. Often,
but not always, forward-looking information can be identified by
the use of words such as “plans”, “expects”, “is expected”,
“budget”, “scheduled”, “estimates”, “forecasts”, “intends”,
“anticipates”, or “believes” or variations (including negative
variations) of such words and phrases, or statements formed in the
future tense or indicating that certain actions, events or results
“may”, “could”, “would”, “might” or “will” (or other variations of
the forgoing) be taken, occur, be achieved, or come to pass.
Forward-looking statements in this news release include, but are
not limited to, statements regarding future gaming content
consumption patterns, the impact and potential use of the proceeds
from the sale of the Website Assets, and the Company’s future
financial performance and strategic objectives.
Forward-looking statements are based on
assumptions and analyses made by the Company in light of its
experience and its perception of historical trends, current
conditions and expected future developments, including, but not
limited to, expectations and assumptions concerning: interest and
foreign exchange rates; capital efficiencies, cost saving and
synergies; growth and growth rates; the success in the esports and
gaming media industry; the Company’s growth plan, and judgment
applied in the application of the Company’s accounting policies and
in the preparation of financial statements in accordance with
applicable financial reporting standards. While Enthusiast Gaming
considers these assumptions to be reasonable, based on information
currently available, they may prove to be incorrect. Readers are
cautioned not to place undue reliance on forward-looking
statements. In addition, forward-looking statements necessarily
involve known and unknown risks, including, without limitation,
risks associated with general economic conditions; adverse industry
events; and future legislative, tax and regulatory developments.
Readers are cautioned that the foregoing list is not exhaustive.
For more information on the risks, uncertainties and assumptions
that could cause anticipated opportunities and actual results to
differ materially, please refer to the public filings of Enthusiast
Gaming which are available on SEDAR at www.sedar.com. Readers are
further cautioned not to place undue reliance on forward-looking
statements as there can be no assurance that the plans, intentions
or expectations upon which they are placed will occur. Such
information, although considered reasonable by management at the
time of preparation, may prove to be incorrect and actual results
may differ materially from those anticipated. Forward-looking
statements contained in this news release are expressly qualified
by this cautionary statement and reflect our expectations as of the
date hereof, and thus are subject to change thereafter. Enthusiast
Gaming disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
applicable law.
Neither the Toronto Stock Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the exchange)
accepts responsibility for the adequacy or accuracy of this
release.
Enthusiast Gaming (NASDAQ:EGLX)
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