VANCOUVER, BC, Nov. 30, 2020 /CNW/ - LEAF Mobile
Inc. (TSXV: LEAF), a leading creator and publisher
of counter culture mobile games, today released the third
consecutive record quarter financial results for the third quarter
of 2020.
In the second quarter ended June 30,
2020, LEAF completed its qualifying transaction, which
included its acquisition of LDRLY (Technologies) Inc.
("LDRLY"). Prior to the completion of the qualifying
transaction on April 17, 2020, LEAF
(then known as "Caprice Business Development Canada Inc.") was a
"capital pool company" under TSXV policies, and did not have any
active business operations. On completing its qualifying
transaction, LDRLY became LEAF's operating entity, through which
all primary operations are conducted.
As such, though the interim financial statements reflect the
financial performance of LEAF alone for the period leading up to
April 17, 2020 and the combined
financial performance of LEAF and LDRLY thereafter, the financial
statements and corresponding MD&A both include disclosure and
analysis of LEAF and LDRLY's combined operations for the entire
nine-month period ended September 30,
2020, as does this news release.
Financial Highlights:
*All amounts in $CAD unless
otherwise noted and figures are rounded-up to one decimal
place*
- Total Revenue was $11.1M
in Q3 2020, increasing by $1.5M (+16%) compared to the previous
quarter of $9.6M.
- Nine months ending September 30,
2020. Revenues grew to $25.9M, increasing by $20.8M as compared to LDRLY's revenue results
in the same period in 2019 of $5.0M, representing a (+418%)
increase.
- Gross profit from game studio operations is $2.8M for the nine months ending September 30, 2020, increasing $2.7M (+2700%) vs LDRLY's performance
in the same period in 2019 of $0.1M, as a result of significant growth
across our game portfolio and introduction of new titles.
- Q3 gross profit from game studio operations for the three-month
period was $0.71M
(+4.4%) vs $0.68M in
the previous quarter 2020
- Q3 net loss of $0.7M vs
$0.02M net loss in the
previous quarter, driven primarily by non-recurring costs
associated with the Company's qualifying transaction and increased
investments in user acquisition on new and growth titles.
LEAF Mobile CEO Darcy Taylor
stated, "We continue to experience strong growth momentum across
our growth and new game titles, on a year-over-year and quarter vs.
quarter basis. This was our third consecutive quarter of
record revenue results, driven by continued revenue gains in our
new and growth titles. Our business performance results to date
show strong execution of our strategy of "Live Ops" excellence,
creating new long-life cycle franchises, investing in new IP with
the goal of creating highly engaging games that produce lasting
player enjoyment."
Game Operations Results
- New titles, demonstrated strong revenue momentum of
$2.6M in Q3 vs $1.5M in Q2 2020. This represents over
(+73%) growth quarter over quarter.
- Growth titles revenue of $7.9M in Q3 2020 vs. $7.2M in Q2 2020. This represents over
(+10%) growth quarter over quarter.
These gains in new and growth titles were driven by continued
investment in player acquisition and strong total monthly average
revenue per daily active users.
- Evergreen Titles, contributed $0.6M in revenue for Q3 2020, a decrease of
$0.3M (-33%) as
compared to Q2 2020. The decrease was expected with the usual
seasonality effects coupled with the normalization of the
accelerated increase in demand during the COVID-19 pandemic.
EastSide Games Acquisition
LEAF, EastSide Games Inc. ("ESG") and Jason Bailey, as representative for all of the
ESG securityholders, have also entered into an amending agreement
effective November 26, 2020 with
respect to the previously announced acquisition by LEAF of all of
the outstanding securities of ESG (the "Acquisition").
The purchase price under the Acquisition remains unvaried at
$150 million. The amendments
vary the payment terms, such that $10
million (previously $50
million) in cash will be paid to the ESG securityholders at
Closing, and the number of LEAF shares payable at Closing will now
be fixed at 444,444,444 LEAF Shares, at a deemed price of
$0.225 per share. Previously,
the number of LEAF shares issuable was based on a percentage of the
outstanding LEAF Shares after completion of the Acquisition and
LEAF's concurrent offering of Subscription Receipts (further
described below). As the cash consideration payable by LEAF
at Closing has been substantially reduced, the total holdback
amounts have been reduced accordingly from $5 million to $1.1
million.
The remainder of the purchase price will now be paid following
closing as contingent consideration. If LEAF receives
$100 million in gross revenue, on a
consolidated basis, in the 12 month period following Closing, the
ESG securityholders will receive an additional $10 million in cash, and an additional
$10 million payable in cash and/or
LEAF shares, at the direction of Jason
Bailey, as representative for the ESG securityholders.
Further, if LEAF receives $150
million in gross revenue, on a consolidated basis, in the
subsequent 12 month period, the ESG securityholders will receive a
further $10 million in cash, and an
additional $10 million payable in
cash and/or LEAF shares, at the direction of Jason Bailey, as representative for the ESG
securityholders. If directed to issue LEAF shares in payment
of such contingent consideration, such shares will be issued at
$0.225 per share, to a maximum of
88,888,888 LEAF shares (or, after implementation of the proposed
10:1 consolidation, at a price of $2.25 per share, to a maximum of 8,888,888 LEAF
shares).
As the cash consideration payable at Closing has now been
reduced, the Company has also amended the terms of its previously
announced offering of Subscription Receipts. Such Offering
will now be for up to 88,888,888 Subscription Receipts (previously
240,000,000 Subscription Receipts), for gross proceeds of up to
$20 million (previously $54 million).
All other terms of the Acquisition and the Offering remain the
same.
About the Company
LEAF Mobile Inc. (TSX.V: LEAF) is a leading creator of
counterculture mobile games. Headquartered in Vancouver, with a premier development studio,
LDRLY based in Nanaimo, BC, the
company is highly skilled in intellectual property, mobile game
development, marketing and publishing. LEAF's culture is anchored
in creativity, data insights and execution, delivering highly
engaging games that produce enduring player enjoyment. With over a
decade of experience in game development and marketing, LEAF has
consistently delivered high-grossing original and licensed IP
titles that include, Cheech & Chong Bud
Farm, Bud Farm Idle Tycoon, Bud Farm
Grass Roots and Bud Farm 420.
Our game titles are available worldwide on the App Store and Google
Play. LEAF leverages successes in platform, IP, marketing,
development and data analysis to maximize value for our global
network of constituents, from players to talent to shareholders and
beyond.
For more information and to keep current on LEAF,
visit www.leafmobile.io and join our online communities
at Linkedin, Twitter, Facebook, and Instagram
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
The preliminary monthly financial results set forth in this
release are based on information currently available to us prior to
platform partners reconciliation. While we believe these
results are meaningful, they could differ from the actual amounts
that we ultimately report in our Quarterly Report for the
quarter ended September 30, 2020. We
do not intend to update these estimates prior to filing our
Quarterly Report.
SOURCE Leaf Mobile Inc.