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Rivalry token captures $3.0 million in deferred revenue; Company executes significant organizational realignment throughout the third quarter to reposition product, brand, and team for Crypto Gambling market; Delivers Substantial reduction in operational expenses; Closes second tranche of non-brokered private placement for $1.0 million

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  The Company completed its largest brand, product and marketing overhaul ever in order to support the global crypto-first strategy, maximize wallet share for high-value players (“HVPs”) and promote a global strategy based on cryptocurrency.
  
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  Since October, the launch of the first set of new features, the average net revenue per user is at all-time highs, up 51% compared with the average for the 2024 trailing period and 70% compared with the three-year trailing average.
  
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  Rivalry’s current operating costs are about 50% lower than those reported in the Q3 2024 report. The third quarter realignment of the organization has resulted in cost savings that are now almost fully realized.
  
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  The crypto-native strategy led by Rivalry Token is producing strong results. Customers with crypto wallets are generating 200% higher revenue than the baseline users, and their retention rates are 30% above average.
  
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  Rivalry has closed the second tranche in its previously announced financing, bringing its total proceeds to $3.0 Million. This strengthens its balance sheet. The Company appreciated the support of insiders, long-term investors, and family and friends. This validated its significant organizational transformation that was implemented throughout the third quarter.
  
• Bets for the third quarter of $79.9 Million
• Revenue Adjusted of $6.0 Million ²

Rivalry Corporation (the ” company ” or ” Rivalry“), the leading sportsbook operator and iGaming provider for digital-first gamers (TSXV RVLY)(OTCQX RVLCF)(FSE:9VK), today announced financial results of the nine-month period ending September 30, 2024. All dollar figures have been converted to Canadian dollars.

Steven Salz is the Co-Founder and Chief Executive Officer of Rivalry. This work was undertaken to better align ourselves with an evolving online gaming market, where cryptocurrency is the preferred payment method. We also wanted to align our product to the expectations of players who are driving the industry-wide change. The initiatives were launched in the second quarter, along with the launch of Rivalry Token. I am proud to say that we have emerged from this project as a leaner, more efficient company.

“During this time, we have rebuilt all the core elements of our product. We designed it to serve crypto-native users as well as high value players. Our previous marketing strategy has been significantly reduced, as we have undergone a rebranding and a complete rebrand. Our native crypto token is now more integrated into our VIP strategy, and we can scale this category better. We reduced our headcount 50% by two workforce rationalizations, and we adjusted our performance culture. This resulted in a more robust organization with higher output, and measurable output climbed over 200%.

The immediate financial result of this high conviction business evolution is a short-term drop in net revenue. However, we are now beginning to move back on the offensive, with a completely transformed product, brand and marketing approach as well as a smaller operating footprint to close to profitability. We are seeing a positive impact on net revenue despite this transition. In just two months, since we launched the first set of HVP and crypto-focused product releases, the average net revenue per customer has reached all-time records, up 51% compared with the year-to date average for 2024 and 70% compared with the trailing three-year-average.

Operational update

Salz said: “Earlier this year, we completed the most significant product overhaul Rivalry has ever done. This included a completely redesigned Casino offering, a completely redesigned VIP rewards program, a new crypto-first Cashier, and a revamped Registration flow, Login, Sportsbook. We’re confident that this completely rebuilt product set will help Rivalry to become a crypto-native, global operator.

The speed at which this huge amount of work was completed is testament to the Rivalry Team’s motivation. They wanted to prove that our track record of innovation and growth over a number of years is not only capable of delivering profit, but can also demonstrate market leadership. This desire to win is supported by the conviction and confidence that these initiatives will allow us to execute our strategy for growth with greater torque, underpinned on a significantly reduced cost basis.

• Sportsbook Redesign: The sportsbook has been completely redesigned. It now includes over 40 sports, live streaming, statistics, and match information. There is also a new interface and a simplified user interface.
• Casino Improvements: Improved the functionality of the casino, added a lot of new content and launched Casino Races. This interactive feature allows players to compete with each other and earn rewards based upon their wagering activities.
• Crypto Payment Integrations: Introduced an advanced crypto-first cashier to provide faster and more flexible options for depositing and withdrawing funds, improving the user experience globally and allowing Rivalry a greater share of the crypto market. Players can now wager digital currencies in addition to depositing crypto. This is a great feature that enhances the user experience.
• VIP and Rewards Program Launch: Launched the new VIP program with cashback, spins for free, and monthly, weekly and daily rewards in order to increase player retention and encourage user activity. This is especially true among high-value users. This rewards higher play asymmetrically, so Rivalry’s most loyal players will have more reasons to continue playing every day and drive HVP wallet share.
• CRM and Reactivation: Improved conversion rates and reactivated churned-out players by enhancing and rebuilding all customer relationship management flows using deeper business intelligence.
• Registration Journey Optimization: Improve the registration journey in order to reduce friction, expedite onboarding and remain compliant.
• Strategic Branding: The brand of Rivalry is being rebranded across all its marketing and product channels in order to better target digital-first players and crypto gamblers, and reinforce the product-market fit with this audience.
• Executive Salary Reduction:Rivalry Chief Technology Office Ryan White, Chief Operating Office Kevin Wimer, and Chief Executive Officer Steven Salz have all taken voluntary salary reductions of 100% in August and September.

Salz said that Rivalry’s executive leaders and founders have agreed to voluntarily reduce their compensation as part of a broader cost-saving measure and to achieve profitability. It’s crucial that the leadership team shares in the sacrifices made by our team and investors in the short-term, as we finish this top-to bottom realignment and strategic shift on which we can build.

NUTZ

Salz said, “Our native token is a key component of our HVP and crypto-first strategy. It continues to align players with us and creates a high level of alignment.” In six months, NUTZ (formerly known as Rivalry token) has proven its ability to increase our crypto marketshare, attract higher value players, improve retention, and create engagement loops that span across all of our offerings. NUTZ is now closely connected to our newly launched VIP program. Together, they provide a highly-customer-centric experience, which will continue to establish lasting player loyalty. They also increase wallet share and encourage consistent betting.

“NUTZ delivered an extra $3.0M in deferred revenues within the third quarter. We see this as a fantastic signal that the token found market-fit within our offering and amongst the target audience. We anticipate that we will generate more token sales during the fourth quarter and first quarter of next year. The launch is expected to be in early 2025. “We have a detailed roadmap that will be released shortly after launch to maximize the value of this product, attract new customers and generate revenue for rivalry.”

• NUTZ generated an additional $3,0 million ³ in Q3 2024. The business is expected to accrue additional deferred revenues throughout the rest of the fourth quarter, and into Q1 2020.
• Rivalry’s average crypto wallet player generates 200% more revenue on average than the average noncrypto player.
• Nearly a third of Rivalry’s HVPs have linked their digital wallets and are participating in our NUTZ pre-release farming program. This shows a high level of crossover between crypto offerings and VIP players.
• The retention rate for NUTZ-eligible customers is 30% higher compared to non-opted users.
• Rivalry is releasing soon a Telegram native product in order to increase user acquisition and engagement of its NUTZ token.

Highlights of the Third Quarter of 2024

• The betting handle for the third quarter of 2024 was $79.9 millions, a modest decline sequentially.
• The adjusted revenue in Q3 2020, including $3.0 millions in deferred revenue from NUTZ, was $6.0 million. In Q3 2024, Net Revenue was $3,000,000. Net Revenue for the nine-month period ended at $12.1 million. This is a decrease of 8% compared to 2023. This is due to a decrease in marketing spending and an increase of casino bets, which are more stable but have a lower margin. A portion of the marketing expenditure recorded in the third quarter was spent on agreement exit costs and not player acquisition.
• The average net revenue per user is at all-time highs, up 51% compared with the trailing period of 2024, and 70% compared with the trailing 3-year average, since the launch of the first set of new features in October.
• Rivalry’s current operating expenses run at a rate of approximately 50% less than those reported in the Q3 2024 report. This is due to its third quarter organization overhaul and cost savings that are nearing full realization. This cost structure will support reaching a profit inflection point.
• In the third quarter of 2018, casino accounted for 60% of all betting handled and 40% of net revenue, an increase of 14% and 22% respectively. The rising casino share can be attributed to the new content, exclusive gaming, and product development.
• Marketing spending was $2.0m, down 30% on the previous year. Rivalry’s marketing effort was reduced in the second and third quarterly quarters due to its new crypto strategy. It is expected that it will resume in early December along with its newly revamped products and strategic rebrand.
• The company had $2.1million in cash at September 30th, 2024. ⁴ Rivalry’s recent non-brokered placement of aggregate gross proceeds of over $3,000,000 further supports the balance sheet. It also shows that investors and insiders have endorsed strategic business realignment.
• The Company has updated its profitability guidance for H2 2024. Salz said, “Our efforts during the third quarter laid the foundation for renewed growth. While we expect near-term profit, we will temporarily step back from giving specific guidance in this transition period.”

Second non-brokered private placement closing

The Company announces also the second closing (” Second Close“) for its non-brokered, private placement of Units of the Company (the Units), previously announced on the 26th of November 2024 (the Offer). The Company sold 6,984,891 units at CDN$0.15 each, resulting in gross proceeds of $1,05 million. The Company can complete additional closings for gross proceeds totaling up to USD $3.0 Million (including the proceeds from the initial close and the Second Closing). The proceeds of the Offering will be used for corporate development as well as general working capital. According to applicable securities laws, the subordinate voting share and warrants and any securities issued upon their exercise are subjected to a four month statutory hold period. The Company paid $4,174.98 to finders fees for the Second Closing.

Staff Stock Option Reprice

The Company announces its intention to modify the exercise price for certain previously granted options (” Subject Option“) in order to purchase 1,600,828 subordinate votes shares of the company (” Subordinate Voting Shares“), pursuant to 2021 Equity Incentive Plan as amended. Exercise prices for the Subject Options range from $0.81 up to $1.10 each Subordinate Voting share. The Company intends amending the exercise price for the Subject Options from $0.81 per Subordinate Voting Share to $0.18. The Subject Options’ terms will not be changed. The TSX Venture Exchange must approve any changes to the Subject Options.

“Rivalry’s talent is the key to our success.” “With the changes we’ve made in the third quarter, it is now more important than ever to retain talent, which is directly related to Rivalry continuing its success,” Salz said. We believe that the proposed changes will maximize team alignment, motivation, and incentive.

Board of Directors change

The Company announces Kirstine Stewart’s resignation as a Director of the Company. Her resignation will take effect on December 20, 2024. The Company has identified several independent directors to fill the vacancy created by Ms. Stewart’s resignation. Additional information will be provided once it is available.

Kirstine Stewart said, “It’s been a pleasure to serve on this board for the past three years and be a member of the talented and dynamic Rivalry team.” “I am confident that they will redefine the online gaming category, and I remain a dedicated and enthusiastic shareholder.”

Salz stated, “I would like to thank Kirstine Salz for her time with us as Director.” “Her experience over the years, as we grew since our initial public offering until today, was essential.” We will use this opportunity, as we shift our strategic focus to a global crypto first approach, to expand our board to support this exciting new direction.

Investor Call

The Company will hold a conference on Friday, Nov. 29, 2024 at 10:00 am EDT to discuss its third quarter financial results.

The Company’s website, rivalrycorp.com, also contains the Q3 2024 MD&A.

Rivalry

Rivalry Corporation is a wholly owned and operated Rivalry Ltd. This company, which offers fully regulated wagering online on esports as well as traditional sports and casino, caters to the digital generation. Rivalry is based in Toronto and has a global team that operates in over 20 countries. Rivalry Limited holds an Isle of Man licence since 2018, which is considered to be one of the most prestigious online gambling jurisdictions. It also has an internet gaming registration for Ontario and it’s currently in the process of getting additional country licenses. Rivalry’s world-class creative execution, brand positioning and market leadership in digital-first users, as well as a native crypto coin, are shaping the future of internet gambling for the generation that was born online.

The information in this document has not been approved or disapproved by any stock exchange, securities commission, or other regulatory body. Neither TSX Venture Exchange, nor its Regulation Services Provider as defined by the TSX Venture Exchange policies accept responsibility for the accuracy or suitability of this press release.

Contact Company:

Steven Salz, Co-founder & CEO

[email protected]

Investor contact:

[email protected]

Media Contact :

Cody Luongo is the Head of Communications

[email protected]

203-947-1936

Measures that do not comply with IFRS

As reported in this press release, Adjusted revenue is a non IFRS financial measure used by the Company to evaluate its operating performance. Adjusted revenue is revenue plus deferred revenue generated by the native crypto token NUTZ of the Company, which the Company expects to realize as revenue at the launch. This data is provided to provide additional information. It is a non IFRS measure, and has no standardized meaning prescribed under IFRS. This non-IFRS metric is used by the Company to provide supplemental measures for its operating performance. This metric is not comparable with other similar titled measures as other companies may calculate the non-IFRS measurement differently.

Cautionary note regarding forward-looking information and statements

This press release contains forward-looking information, as defined by the applicable Canadian securities laws (forward-looking statements). Forward-looking statements are all statements that do not relate to current or historical facts. Forward-looking statement are usually, but not necessarily, identified by words like “anticipate”, ‘achieve’, ‘could”, believe, â€planâ€, â€intendâ€, â€objectiveâ€, â€continuousâ€,, “ongoingâ€,,,,,,,,,,,,,,, “continuous”, These statements are merely predictions. These statements are only predictions.

The opinions and estimations of management at the time the statements were made are based upon the information available to the Company. In order to make forecasts and projections, various factors and assumptions have been applied. The Company cannot control the risks or uncertainties that may affect the Company’s performance. These factors include, among others, regulatory or political changes such as changes to applicable laws and regulations, the ability to obtain required licenses, the complexity and evolving regulatory landscape for online gaming and gambling, the failure of esports or other betting products to be successful, changes in the public perception of esports or online gambling, negative cash flow, operational risks, cybersecurity risks, reliance upon management, reliance on third-party networks, exchange rate risks, risks related to cryptocurrency, intellectual property infringements or invalid claims, the effect of Please see the Q3 2024 MD&A, under “Risk factors”, as well as other disclosure documents on the Company’s profile at SEDAR+.

It is impossible to guarantee that expectations expressed in forward-looking statement will be realized. The forward-looking statement contained in this press release is based on what the Company’s management believes or believed to be reasonable assumptions at the time. However, the Company can not assure that the actual results will match these forward-looking claims, because there could be other factors which cause the results to differ from those anticipated, estimated, or intended. The information and forward-looking statements contained in this press release should not be relied upon by readers. This press release contains forward-looking data and statements. They are accurate as of the date this release was issued. The Company is not obligated to update the forward-looking data and/or statements, unless required by applicable securities laws.

Financial Outlook

This news release includes a financial forecast within the meaning applicable Canadian securities laws. The financial outlook was prepared by the Company’s management to give an estimate of revenue from Rivalry’s native token NUTZ that is expected to be realized at the launch of NUTZ. It may not be suitable for any other purposes. The financial outlook was prepared using a variety of assumptions, including those discussed under “Cautionary note regarding forward-looking information and statements”. Actual results for the Company will vary from these projections, and may even be material. The Company and management believe the financial outlook was prepared with a reasonable basis. This information, however, is subject to many risks and highly subjective. These risks are discussed in the section “Cautionary note regarding forward-looking information and statements”. Therefore, it shouldn’t be taken as a guarantee of future performance.

This news release is not an offer or solicitation to sell securities, nor will there be a sale in jurisdictions where such an offer, solicitation or sales would be illegal. Securities have not been registered and will not register under the United States Securities Act of 1934, as amended (“U.S. Securities Act”) or any applicable state laws. Securities Act”) or any applicable state laws. Securities Act”) or applicable state securities law. Securities Act”) or applicable state securities law. Securities Act”) or applicable state securities laws. Securities Act”) or applicable state securities laws. Securities Act”) or applicable state securities laws. Securities Act”) or applicable state securities laws. Securities act”) or applicable state securities laws. Securities Act”) or applicable state securities laws. Securities Act”) or applicable state securities laws. Securities Act”) or state securities laws. Securities Act”) or applicable state

Source: Rivalry Corporation

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