Esports, Gaming and Gambling Bi-Weekly Update Volume 2 - October 25, 2019

Home , Boston Uprising, Florida Mayhem, London Royal Ravens, Luminosity Gaming, Nickmercs, OverActive Media

Our Esports, Gaming and Gambling bi-weekly update report includes industry news and delves into an in-depth feature story. It also covers global industry-wide and company specific news, including our current coverage of Feature Story The Stars Group, Inc. (TSGI-TSX, Tender), Score Media and Gaming, Inc. (SCR-TSXV, $0.60, Speculative Buy, PT $0.90/shr) and Cineplex, Inc. (CGX-TSX, $22.85, Buy, PT $34/shr). Our recent esports industry white paper Tournament Economics explored the ecosystem, trends and investments in detail. (LINK) Explained

Shroud Joins Mixer: We reiterate our thesis, Twitch’s owner Amazon is well known for its competitive Understand How Esports Competitions are intensity, we see increased competition as Google (YouTube Gaming), Microsoft (Mixer) and Facebook Organized – Professional esports competitions Gaming move to gain scale. Industry contacts support moves by Twitch to lock-down top streamers on are organized in either open circuit or franchised formats. Differences in publisher control, capital its platform. We are also hearing more on Fox owned Caffeine moving to invest in its livestream games outlay, media rights/sponsorship/advertising promoting celebrities and the entertainment aspect. We note articles on the subject across CNN, The deals and player qualification exist between the Verge and TechCrunch in the past week. two formats. (JUMP TO DETAILS)

Esports: Community built-up, Shroud and partnerships remain as top headlines: ------▪ Score Media and Gaming (SCR-TSXV, $0.60 , Speculative Buy, PT $0.90/shr) Partnered with Ubisoft Trivia Time (UBI-EPA, NR) to Launch Esports Video Content for Rainbow Six Siege – See Telecom and New Media Which market will have the highest esports Analyst, Rob Goff’s recent note published after SCR released its FQ419 results earlier this week. density in 2019 (12%)? I.e. the highest share of Esports Enthusiasts in the online population. ▪ Twitch Top Streamer Shroud Joins Ninja on Mixer – Michael “Shroud” Grzesiek announced that he A. South Korea will begin streaming exclusively on Microsoft-owned Mixer with his first stream to feature the newly B. China released Call of Duty: Modern Warfare game. Shroud is currently the second most-watched C. United States (Answer on pg. 11) personality on Twitch with 60.27M hours watched this year. The move follows the former most watched Twitch streamer, Tyler “Ninja” Belvin’s move to Mixer in August. Twitch reacted to Ninja’s ------move by locking up Nick “NickMercs” Kolcheff to an exclusive contract, indicating it is willing to lock Snapshot: Market Performance

up talent. We look for further marquee streamer moves. (Esports Observer) 09/10/2019-24/10/2019 - 2 NA Europe APAC ▪ Activision Blizzard (ATVI-NASDAQ, NR) Announced Call of Duty League Format and Challengers weeks return Publisher -4.6% -3.6% 2.0% League – The league format is similar to the OWL homestand format with each of the 12 franchised Hardware 0.6% 6.1% 0.1% CDL teams hosting two weekend competitions in their respective home markets during the regular Media -4.9% -0.2% -8.8% Gambling 4.1% 6.0% -0.5% season in 2020. A second-tier Challengers league with a $1+M prize pool will be hosted online and Tournaments -12.1% 0.0% 2.6% offline, with some competitions hosted by the CDL franchised teams. (Esports Observer) Streaming 3.2% 0.0% 7.4% Investment Firms -27.4% 0.0% 0.0% Simple Average Return -1.4% 4.1% 1.2% Gambling: Regulations surrounding online betting continue to evolve: Weighted Average Return - by Market Capital 2.7% 5.9% 1.4% ▪ DraftKings (Private) Received First Daily Fantasy Sports Wagering License in Iowa – DraftKings is the S&P 500 0.0% first operator to be awarded a license by the Iowa Racing and Gaming Commission (IRGC) and plans S&P/TSX -0.4% Nasdaq Composite 0.5% to launch in the state in the coming days. (iGaming Business) ▪ Google (GOOGL-NASDAQ, NR) Expanded Gambling Ads in Legally Permitted US States and Beyond – Google has updated its gambling and gaming policy to allow betting operators in legal US states, as

well as Colombia, Kenya and Nigeria to promote their betting services. (iGaming Business)

Rob Goff, CFA | 416.933.3351 | [email protected] Gianluca Tucci | 647.794.1926 | [email protected] Pooja Sharma, MFIN, B.E. | 647.794.1922 | [email protected] Karolina Kosior | 604.647.4379 | [email protected] Page 1 of 29

Top Highlights

Non-Endemic Drink, Food, Tech, Car, and Apparel Brands Sponsorship Deals Increase 74% Y/Y for Q319 – The Esports Observer reported 75 deals with non- endemic brands for Q319, up from 43 deals in Q318. The quarters’ deals included major global brands, Bud Light, Honda, Red Bull, Adidas, Louis Vuitton, Starbucks, among more. The food and beverage category continue to see the most significant growth with a reported 30 deals in Q319. Notable mentions include:

• Beverages and food: Anheuser-Busch InBev (BUD-NYSE, NR), parent company of Bud Light, became the official beer sponsor of OWL and added NBA 2K League to its portfolio. Bud Light has also sponsored Bandai Namco’s Tekken World Tour in partnership with Twitch for a Bud Light Tekken 7 Beer League tournament series. PepsiCo (PEP-NASDAQ, NR) energy drink MTN DEW AMP GAME FUEL became official global beverage partner for ESL events through 2020. EA Spots partnered with Pizza Hut (YUM-NYSE,NR), Snickers (Private) and Starbucks (SBUX-NASDAQ, NR) for Madden NFL 20 Championship Series. Finally, Kellogg’s (K-NYSE, NR) in Q319 signed a multi-year sponsorship deal with the OWL for its Pringles and Cheez-It brands.

• Technology: OPPO (Private), Chinese smartphone maker signed a deal with Riot Games to be an international LoL competition through 2024. AT&T expanded its partnership with ESL and Dreamhack with the ESL Mobile Open in North America. Overactive Media’s (Private) OWL team signed a multi- year sponsorship with Canon Canada (7751-TYO, NR) and dating app, Bumble (Private) sponsored Gen.G (Private) Esport’s all-women Fortnite team.

• Automobiles: Honda (7267-TYO, NR) became exclusive partner of LCS in August. Toyota (7203-TYO, NR) partnered with BLAST Pro Series’ by sponsoring Sept. Moscow stop and Mercedes-Benz (DAI-DE, NR) sponsored the addition of a Dota 2 tournament to the UK ESL Premiership. Astralis Group, known for its CS:GO team, announced the formation of a Future FC FIFA team and added Audi(VOW-FWB, NR) as a sponsor in a three-year deal reportedly worth at least $1M/year.

• Apparel: Ninja partnered with Adidas (ADS-FWB, NR) to collaborate on apparel and digital content. Riot Games partnered with Louis Vuitton (MC-ENX, NR) for LoL World Championship’s “Summoner’s Cup” and in-game skins, spanning multiple years. (Esports Observer)

Hiro Capital Launched $110M Games, Esports and Digital Sports VC Fund – The British investment firm, Hiro Capital, will look to accelerate the growth of approximately 20 companies through Series A and B financing in the European Union and United Kingdom in addition to providing entrepreneurial mentorship to help companies scale. Spike Laurie, former ESL (MTG.AB-STO, NR) and Warner Bros (T-NYSE, NR) was appointed as the fund’s esports venture director. (Esports Observer)

Caffeine Signed Exclusive Streaming Partnership with American Rapper, FaZe Clan Investor, ‘Offset’ – Caffeine’s, exclusive streaming partnership with Kiari Kendrell “Offset” Cephus includes two shows to be aired on Cephus’ Caffeine channel. Caffeine an esports and entertainment streaming platform co-founded by former Apple designers Ben Keighran and Sam Roberts received $46M in two funding rounds last year and a $100M investment from 21st Century Fox. The streaming platforms strategy is to focus on creation and distribution of live, interactive content to host live entertainment, action sports and mainstream culture not just gaming. (Rolling Stone)

North American Developments Canada

Enthusiast Gaming Holdings (EGLX-TSXV, NR) ▪ Partnered with Champion to Create Luminosity Clothing Line – Enthusiast partnered with Hanesbrands Inc.’s (HBi- NYSE, NR) Champion brand for custom apparel for Enthusiast’s esports division, Luminosity Gaming, which launched at EGLX last weekend. The Luminosity-branded apparel is now available for purchase exclusively on Luminosity’s website and through its social media channels. (Enthusiast Gaming) ▪ Entered into a Sponsorship and Partnership Agreement with PartyCasino.Fun – The PartyCasino.Fun logo to appear on Luminosity Gaming jerseys, to be visible during live streams and broadcast events, as well as on the online store. In addition, PartyCasino.Fun also sponsored a 19+ gaming lounge at EGLX. (Enthusiast Gaming)

Torque Esports Corp. (previously known as Millennial Esports Corp.) (GAME-TSXV, NR) ▪ Entered into a Binding LOI to Acquire UMG Media (ESPT-TSXV, NR) – The transaction is subject to several conditions including UMG’s shareholder approval and Torque’s completion of 51% acquisition of Allinsports. UMG Media, an esports company providing online and live tournaments and original esports content, plans to raise $1.2M in a non- brokered private placement of 10M shares for $0.12/shr prior to the transaction. (Torque Esports) ▪ Entered into Definitive Agreement to Purchase Controlling Interest in Allinsports for $5.6M – Torque Esports through a share purchase agreement will acquire 51% of Allinsports for $1.9M in cash (payable in three tranches on th or prior to Nov. 30 ) and 1.9M in Torque common shares. Torque also has the option to purchase the remaining 49% of Allinsports beginning 18 months after the closing date and ending 24 months following the closing date for the lesser of 10x EBITDA for F2020 or $20M, based on certain milestones. (Newswire) ▪ Millennial Esports Corp. Changed Its Name to Torque Esports Corp. and Consolidated Its Common Shares on a 5:1 Basis – The Company recently restructured its business and leadership team, to focus exclusively on esports racing and esports data provision . (Torque Esports) Axion Ventures (AXV-TSXV, NR) Commenced Build-Out of Prototype of ‘Rising Fire Mobile’ and Announced Potential New Co-Development Partner – Rising Fire Mobile (the mobile version of the Company’s ‘Rising Fire’ PC video game expected to be available on Tencent Holdings’ (0700-HGK, NR) WeGame platform in early 2020) is currently being built at Axion’s Shanghai HQ in collaboration with Tencent for potential expansion and wider commercial success of the Rising Fire IP, according to management. The Company is also in late stage negotiations with an unnamed Asian publisher to co-develop a new mobile shooting game in which the publishing partner would cover a majority of the development cost in exchange for the global publishing licence. (Axion Ventures )

Victory Square Technologies (VST-CSE, NR), subsidiary V2 Games (Private) Announced a Private Placement of C$3M in Unsecured Convertible Debentures – Each debenture will accrue interest at 8%/annum for a term of two years from the date of issuance. The Company intends to use net proceeds for investments in royalty generating gaming projects, general working capital purposes and to prepare for an arrangement to potentially spin-out V2 Games. (Victory Square Technologies) ePlayUnited Digital States (EPY -CSE, NR) Announced Big Shot Basketball Mobile Game Available for iOS and Android – The Big Shot Basketball free-to-play game is similar to Pokemon Go for NBA fans. It features augmented reality, real-time sports data and celebrity, NBA stars and multiplayer challenges. Players can purchase “swaps” that allow them to trade and purchase 3 premium skins, t-shirts, sneakers and other digital items in the game. (ePlay Digital)

Unilever’s (UN- NYSE, NR) AXE Fragrance Brand Named as Official Men’s Grooming Partner of League of Legends Esports Global Events – The multi-year deal will include the Mid-Season Invitational, All-Star Event and World Championship. Specific activation details were not provided but AXE branding is already being broadcast and shown at the live event at Berlin’s Verti Music Hall. Financial terms were not disclosed. AXE joins global partners such as Red Bull, OPPO and Louis Vuitton. (Esports Observer)

University of Kentucky Partners with Gen.G to Build Esports Program – The program will create recruitment and classroom opportunities in esports in addition to research opportunities and programs for school alumni. The partnership will be part of the University's Smart Campus Initiative that emphasizes technology. In the coming months, the university reportedly plans to discuss a gaming-focused certificate program, hold open platforms for high school student and organize events to aid students in entering careers in gaming. (ESPN)

LG Electronics (LPL-NYSE, NR) Named Official Partner for Season 3 of the ESL Mobile Open – LG is the first phone provider for the ESL Mobile Open. Th finalists in the ESL Mobile Open will compete using LG smartphones and the new G8X ThinQ Dual Screen. The length and terms of the partnership were not disclosed. (Esports Observer)

OGN Esports Launched Creator Collective to Sponsor Streamers and Social Media Influencers – OGN, esports production company, announced a program created to seek out and support gaming streamers, content creators and social media influencers who hit set streaming and promotion benchmarks. Creator Collective members will be paid as well as given a hardware stipend, have travel expenses covered, and have access to the OGN Super Arena for content creation. (Esports Observer)

G2 Esports Announced Partnership with Blockchain Company, Hdac Technology – G2 Esports’ intends to collaborate with Hdac Technology for content and tech upgrades to G2 facilities. Hdac will also act a sponsor, with its brand logo added to G2’s CS:GO and PUBG team jerseys, in addition the companies will create content together. (Esports Observer)

Riot Games (Private) and Panasonic (6752-TYO, NR) Partner to Bring League of Legends Matches on In-Flight Entertainment Systems – Riot Games has not yet announced which airlines will feature League of Legends LCS content. Panasonic has more than 300 airline customers for its in-flight technologies, including entertainment systems, cabin systems and Wi-Fi services. (Esports Observer)

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Best and Worst Performing Stocks in NA: GameStop, the consumer electronics and gaming merchandise retailer, gained 15.7% in the last two weeks. GameStop announced it partnered with Activision Blizzard to celebrate the release of Call of Duty: Modern Warfare by hosting a series of exclusive in-store launch events. During the same time, Scientific Games Corp., a gambling products and services for casino, lottery, online gaming and sports betting company, gained 14.5%. The Company released its 3Q19 list of major shareholder in which Fine Capital, Sylebra HK and BlackRock together hold ~30% of the shares.

On the other hand, Canadian companies were among the worst performers, with YDx Innovation down 30.8% following the announcement of its new immersive art exhibition contract in Brazil and Victory Square Technologies’ down 27.5% with the announcement of its subsidiary V2 Games’ $3M private placement, in the two-week period.

European Developments

ESL (MTG.AB-STO, NR) and DreamHack (MTG.AB-STO, NR) Signed Three-Year ESL Pro Tour Media Rights Deal with TV2 Denmark – TV 2 Denmark has acquired exclusive Danish language broadcast rights for its linear TV2 Zulu channel and TV 2 Play streaming service for the ESL Pro Tour. The ESL Pro Tour for CS:GO will feature more than 20 competitions and more than $5M in prize money for 2020. The deal is an expansion from a previous agreement in 2018. Financial terms were not disclosed. (Esports Insider )

ReKTGlobal Acquired Fullcube, a Fan Engagement Platform – ReKTGlobal, parent company of LEC’s Rogue team and CDL’s London Royal Ravens, acquired Fullcube, the North Carolina-based fan engagement platform, for an undisclosed amount. ReKTGlobal and Fullcube jointly launched the Rogue Nation fan membership program earlier in the year, with plans to introduce similar fan solutions for esport teams globally, following the business combination. (Esports Observer)

Gfinity (GIN-LON, NR) Reported F2019 Results with Revenue of $10.2M (£7.9M) – Gifinity’s, the UK-based esports company, total revenue was up 84% y/y from $5.6M (£4.3M) in F2108. The Company reported gross profit of $1.3M (£1M) compared to a loss of $4.4M (£3.4M) was driven by a focus on higher-margin esports solutions for key partners. The Company stated in its investor presentation that it is on track to achieve adjusted EBITDA breakeven target in 2021 (Esports Observer)

The German Esports Federation Announced an Amateur Esport League ‘Vereninsliga’ – The league will feature 12 clubs across Germany and be run in cooperation with ESL (MTG.AB-STO, NR) and Freaks 4U Gaming (Private). Verensliga will feature separate competitions for LoL and CS:GO. The competition’s name translates to “club league” reportedly to reflect that it is the first esports league in Germany featuring clubs (a format similar to major sports leagues in Germany) rather than corporation-owned teams. (Esports Observer).

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Best and Worst Performing Stocks in Europe: Rank Group (28.4%), gambling company based in the UK, stock rose after it acquired Stride Gaming, a New Jersey based online gaming operator. Endor AG, a company that develops and markets high-end input devices for game consoles and PCs in Germany gained 20.4% over the two-week period. Ubisoft (-10.79%) was among the worst performers after the company announced that it is delaying the release of almost all the games announced and LeoVegas (-5.4%), a Swedish mobile gaming company and provider of online casino and sports betting services, saw its shares drop following a fine issued by Dutch regulators for offering online games of chance in the Netherlands.

APAC Developments

Victory Five Raised Over $14.1M in Series A Funding, Signed Strategic Partnership with Shenzhen Media Group for Venue – Shenzhen Weiwu Esports Technology, the parent company of Victory Five, raised over $14.1M (¥100M) in series A funding from undisclosed investors. Additionally, Victory Five signed a partnership deal with Shenzhen Media Group to co-build an esports home venue. Victory Five has a PUBG and Peacekeeper Elite (Chinese version of PUBG Mobile) team and recently joined China’s LPL for League of Legends. (Esports Observer)

Fnatic Acquired Indian PUBG Mobile Squad, Plans to Establish Local Facility in India – The UK-based Fnatic organization has acquired Team XSpark, which competes in PUBG Mobile. The PUBG Mobile Club Open 2019 tournament is on-going with spring/fall splits and a prize pool of $2.5M. Additionally, Fnatic announced plans to set up a gaming facility in India for fans and gamers to receive Fnatic products, experiences and content, according to Victor Bengtsson, Fnatic division director. (Esports Observer)

Super Gen Spent $17.6M for Land in Shanghai Minhang District to Develop Esports Complex – Super Gen, Edward Gaming’s (EDG) parent company, paid $17.6M (¥1.24B RMB) for 19.37 acres of land, with plans to operate multiple esports business projects in the space including esports tournaments, film, game design, esports education and esports live streaming. EDG has not yet confirmed its home venue but it is possible the Shanghai complex will serve as its home venue, according to The Esports Observer (Esport Observer)

Douya and Versus Programing Network Partner to Host First Honor of Kings Auto Battler Competition – The Honor of Kings battler mode, “Kings Simulation battle” (released by Tencent in August) tournament will feature a $42.3K (¥300K) total prize pool and reportedly the best players will be offered live streaming deals with Douya. (Esports Observer)

Gaojing, Esports Organization, Signed Numerous Partnership Deals – Shanghai Gaojing Culture Media (Gaojing) will host the 2019 World University Cyber Games (WUCG). Gaojing has partnered with Riot Games and Spanish media company Mediapro for the event. The partnership with Riot Games will connect the WUCG event with the League of Legends International College Cup 2019, a yearly tournament co-hosted by Riot Games and Hong Kong-based Cyberport. While the partnership with Mediapro will provide Gaojing with international media support including the Latin American region. Additionally, Gaojing’s recently partnered with Chinese car-sharing service Liandong Yun, to provide transport services for university players and fans who attend the WUCG 2019 event. (Esports Observer)

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Best and Worst Performing Stocks in APAC: Aiming (10%), the Japanese game developer and Bilibili (9.6%), Chinese game publisher both saw a boost after recent investor attention.

Sea Ltd. (-9.5%), an Internet service provider in Singapore down as market awaits Q319 results on Nov. 12 and COLOPL (-

8.4%), Japanese game developer which was one of the best preforming stock two week ago, were both among the lowest performers. 6

Streaming Update In the past two weeks, Mixer and Facebook Gaming announced their strategic moves to strengthen their position in the game streaming market. Per Q319 StreamElements, Facebook Gaming captured ~17.6% of the total hours watched of the major game streaming platforms and Mixer is merely at 3.0%, lead by Twitch at ~76%. We believe that Amazon’s Twitch’s dominance will be challenged with other tech giants investing heavily in their platforms.

This week, Microsoft emphasized its plan to invest in supporting its gaming community and content. The company renamed its long-standing ‘XBOX Software and Services’ operating segment to ‘XBOX Content and Services’ to communicate the shifting focus in the wake of the saturating gaming hardware market.

“In Gaming we're investing in content, community, and cloud services to expand our opportunity with 2 billion gamers worldwide. We saw record Xbox Live monthly active users, with strength both on and off console in mobile and PC and continued growth for Game Pass subscriptions. Gears 5 saw more than 3 million players in its first weekend alone. Ten years in, Minecraft is stronger than ever with record revenue and usage, and we are bringing the franchise to new audiences with Minecraft Earth. Finally, just last week we started trials of Project xCloud, so gamers can play games wherever and whenever they want on any device.” – Prepared remarks, Q120 Earnings Call, Satya Nadella (CEO and Director, Microsoft Corp.)

Mixer’s recent announcement of signing an exclusivity deal with another Twitch influencer Shroud, only three months after Ninja joined the platform is confirmation of competition that lies ahead for Twitch. The terms of the deal were not disclosed. We would like to highlight that in spite of a solid subscriber base, Ninja (14M followers) and Shroud (7.5M followers) left Twitch in favour of Mixer. Microsoft is pushing Mixer very aggressively by offering new users a free 1-month subscription. (THEVERGE)

On the other hand, Facebook Gaming is directing its investments towards improving the usability of its gaming platform to create better monetization opportunities, easy migration and seamless streaming features for gamers. Earlier this year, Facebook merged its live streams, gaming groups, videos, and Instant Games (mini- games for Facebook and Messenger) onto a dedicated tab in its social network. In Shroud (left) and Ninja (right) its most recent announcement, the Company is testing its mobile gaming app in Source: Getty Images Thailand by partnering with AIS esports to help users upgrade their mobile plan to be able to play games and watch live streaming on their mobile devices. (TechGenyz)

3-months

Twitch Trend Tracker: Viewership; Top Games

Average Viewers (Weekly Average) 2-week Change 3-month Change 1-year Change LoL Just CS:GO Fortnite WoW Apex GTA V FIFA 20 Dota 2 Destiny Chatting Legends 2 Change Change

Hours Watched (Weekly Average)

Peak Viewers (Weekly Average)

Source: Twitch Tracker, Echelon Wealth Partners

Esports Events Recent

Game September - Top Tournament (By Prize Pool; Prize Type Peak Viewers Hours Watched Duration Money >= $500K) Organizer (Online/Offline) Date Prize Money ('000) ('000) (Hours) Venue Fortnite Champion Series Season X Finals Epic Games Online 20.09.19-23.09.19 $4,079,400 102,011 1,202,997 25 NA Overwatch League 2019 Playoffs Blizzard Entertainment Offline 30.08.19-29.09.19 $3,500,000 318,019 5,844,057 53 Blizzard Arena LA & Wells Fargo Center Twitch Rivals TwitchCon Fortnite Showdown Twitch Offline 27.09.19-28.09.19 $1,350,000 214,503 937,831 11 San Diego Convention Center StarLadder Major Berlin 2019 StarLadder Offline 23.08.19-08.09.19 $1,000,000 837,748 45,166 129 Mercedes-Benz Arena, Berlin Twitch Rivals TwitchCon Apex Legends Showdown Twitch Offline 29.09.19-30.09.19 $500,000 80,731 440,654 9 San Diego Convention Center Apex Legends Preseason Invitational EA Offline 13.09.19-15.09.19 $500,000 107,082 1,876,731 36 Alvernia Planet

Ongoing

Game Ongoing - Top Tournament (By Prize Pool; Prize Type Peak Viewers Hours Watched Duration Money >= $500K) Organizer (Online/Offline) Date Prize Money ('000) ('000) (Hours) Venue EU LCS studio (Berlin)/ AccorHotels Arena (Paris)/ 2019 World Championship Riot Games Offline 02.10.19 - 10.11.19 $2,225,000 986.06 19,990 38 Palacio Vistalegre (Madrid)/ Verti Music Hall (Berlin) Upcoming

Major Tournament (Prize Money >= $500K) Organizer Type (Online/Offline) Date Prize Money Venue WCS Global Finals 2019 (StarCraft II) Blizzard Entertainment Offline 2019-10-25 $500,000 Anaheim Convention Center, California, US PUBG Global Championship 2019 PUBG Corporation Offline 2019-11-08 $2,000,000 Oakland, Los Angeles, US CS:GO Asia Championships 2019 Perfect World Offline 2019-11-21 $500,000 Shanghai, China ESL Pro League Season 10 Finals ESL Offline 2019-12-03 $600,000 Sparekassen Fyn Arena/ODINCON EXPO, Denmark ONE Esports Dota 2 World Pro Invitational Singapore ONE Esports/PGL Offline 2019-12-17 $500,000 Singapore Indoor Stadium Shadowverse World Grand Prix 2019 Cygames Esports Offline 2019-12-25 $1,000,000 Tokyo, Japan

Source: Esports Charts, Echelon Wealth Partners

Enthusiast Gaming Live Expo (EGLX) Oct. 18, 2019 – Oct. 20, 2019 We attended the EGLX industry summit and expo organized last week in the Metro Toronto Convention Center in downtown Toronto. The event attracted gaming enthusiasts, investors and sponsors to what is advertised as Canada’s biggest video game expo. Sponsors included Bell Media, Ubisoft Canada, Nintendo, CIBC, HP Omen and MSI. Enthusiast Gaming also partnered with PartyCasino.Fun for branding. Additionally, the venue hosted the finals of Rainbow Six Canada Nationals in collaboration with Ubisoft Canada.

We were impressed by both endemic and non-endemic brands that participated in the event. We believe that EGLX a was pleased with the number of Luminosity t-shirts and jerseys as the merchandising lounge was crowded and we could effortlessly spot fans sporting the brand. We estimate that there was a healthy 60-40 mix of males and females that attended the event, with most of the crowd under 35. The much-discussed ‘community building’ concept was evident in the energy. The crowd did relate to the concept of esports and gaming. Young kids actively participated in the event and were accompanied by their parents – proof that esports is a generational change and events like this will help create stronger ties between the community members.

Source: Echelon Wealth Partners

Answer to Trivia Question: “A”

South Korea

Source: Newzoo

Sports/Esports Gambling

Gambling Update FOX Bet Announced Multi-Year Deal with Major League Baseball – FOX Bet, a mobile sports betting product developed in partnership with The Stars Group (TSGI-TSX, Tender) and FOX Sports (FOX-NASDAQ, NR), will be an authorized gaming operator of MLB. FOX Bet, as part of the agreement, has the right to use MLB’s official data feed and MLB branding across its FOX Bet platform, FOX Sports Super 6, and its FOX Bet’s free-to-play game. Financial terms were not disclosed. (SportsPro Media) PA Media and PandaScore, an Esports Data Provider, Form Strategic Partnership – PA Media’s Betting division will be the exclusive data distribution partners in the UK and North Europe and represent PandaScore on a non-exclusive basis in the US market. PanadaScore uses proprietary AI technology to collect and process real time data from esports matches including LoL, CS:GO, Dota 2, Overwatch, among others. (iGaming Business)

UFC Launched Its Own Sports Betting Product ‘UFC Event Center’ App in Partnership with IMG Arena – The product and UFC’s official data feed will be licensed to sportsbooks and gaming operators including IMG Arena’s current network of more than 300 operators. UFC Event Center app will feature live betting options for every UFC fight such as live stats, immediate bet settlement, live event information, and 3D visualization of live action on a mobile design. (iGaming Business)

Iowa Sports Betting Revenue Reached $4.96M in First Full Month – Online betting was the most popular form of gambling in the sate, with operators generating $2.0M in collective revenue from internet betting in September. (iGaming Business)

New York Sports Betting Revenue up 175.3% M/M – New York’s four licensed sports betting operators generated $2.3M, for a total $3.5M in revenue since regulated sports betting launched in July. (iGaming Business)

Indiana Licensed Operators Generated $8.6M in Adjusted Gross Revenue for First Month – Licensed operators processed a total of $35.2M in sports wagering in September with American football as the most popular sport to bet on. (iGaming Business)

Recent Regulatory Update

Amendment to Legalize Sports Betting in Georgia May Not Be Required– The deputy legislative counsel, D. Stuart Morelli stated that an amendment is not required, but is preferable since it would explicitly authorize legalization of sports betting in one or more forms. (IBG)

Source: ESPN 12

FEATURE STORY: Esports Tournament Economics

Tournaments and online streaming are equally vital for the esports industry for a multitude of reasons. Our last issue (Volume 1) featured an in-depth article on how players monetize streaming on Twitch. While game publishers and developers remain at the top of the value chain, content streaming by esports influencers and players provides publishers with low-cost publicity directly to the target audience of gamers, as compared to millions of dollars spent on advertising otherwise. With thousands of games published every year only a handful reach scale. Beneath the ticket sales, advertising/sponsorship revenues and merchandise sale, publishers attempt to increase the longevity of their successful games by organizing pro-level tournaments and offering insane amount of prize money – high enough to attract mainstream media attention. In this issue, we will discuss tournament economics in detail.

Professional esports competitions are organized in either open circuit or franchised formats. The main distinction between the two structures can be simplified to the level of publisher control and initial fees that act as a financial barrier but guarantee a permanent slot throughout the tournament. The open circuit allows for third-parties to create their own events around the IP, while in the franchised model the publishers tightly control their IP. Three games currently operate in the franchise model (Overwatch, League of Legends and Call of Duty). These are also among the most viewed games on streaming platforms. We cannot emphasise enough the importance of viewership and a loyal fanbase with team franchise fees that range from between $20.0-60.0M.

For example, Riot and Blizzard which own IP for League of Legends and Overwatch, respectively, both have franchised formats and in turn organize league competitive play. On the other hand, Valve which owns IP for both Dota 2 and CS:GO operates in an open circuit, allowing ESL to organize ESL One and Intel Source: Dota2 Instagram Handle Extreme Masters, its own Dota 2 competition. Industry participants, including organizations/teams and event organizers, continue to argue for and against each format, although some top titles have moved to the franchise model.

Besides publisher control, open circuit and franchised leagues differ in capital outlay required, ease of securing media rights, sponsorship and advertising as well as how professional players qualify for competitions.

Esports Teams vs. Sports Teams vs. Technology; EV/Sales Valuation (Average) Franchise Model: The franchise model is already well-established in traditional sports leagues such as the NFL, NHL, NBA, and for that reason many sports franchise owners have purchased esports organizations. Notable examples include Robert Kraft, who owns the NFL’s New England Patriots and Francesco Aquilini, who owns the NHL’s Vancouver Canucks both with interests in franchised teams in the Overwatch league with the Boston Uprising and Vancouver Titans, respectively. Additionally, the adoption of the franchising model has helped to draw the investor community to the esports ecosystem as the franchise valuations and the pedigrees of buyers have brought significant credibility to the space.

Of note, with the spike in investment, esports organizations valuations’ have moved to premium levels reflecting growth potential relative to expectations for legacy sports franchises. Esports valuations are more comparable with technology companies rather than sports teams.

Franchise spots in Activision Blizzard’s OWL reportedly sold for $20.0-60.0M, with

Source: Forbes, Echelon Wealth Partners franchise spots in the recently formed Call of Duty league (CDL) selling for approximately $25.0M. The CDL with its 12 franchised teams generated about $300.0M for Activision Blizzard in franchise ownership fees alone. More importantly, the franchise model redistributes risk to individual team owners in building out local markets and properly managing their regional franchises. However, publishers are providing franchisees critical information, allowing teams to have a predictive model in place.

Franchise owners do not buy-in without understanding revenue shares of ticket sales, merchandise, media rights and brand sponsorship as well as having a pre-determined venue. The franchise format therefore mimics traditional sports where expenses and ROI are more certain. Moreover, esports league owners that also have sports franchises have existing infrastructure, such as venues, brand partnerships, ticket vendors, merchandise and concession vendors etc. already in place.

Even though, franchise economics are closely guarded by publishers, media rights deals are said to be distributed evenly to all teams, with an incentive pay-out for teams based on milestones such as reaching the playoffs or engaging fans via social media. The League of Legends franchise, for example, has reportedly outlined revenue share for sponsorships and media rights between leagues, players, and organizations. According to Liquipedia, the split is 35% for players, however if the league performs well and the player portion is above the players’ combined salaries, the difference is reportedly shared with the players. Teams receive 32.5% of the portion, half to be distributed equally to each organization and half divided into allocations based on competitive and engagement metrics. The final 32.5% is retained by Riot Games (game publisher and LEC/LCS/LPL league organizer) for broadcast production, live events, and operating the league.

Franchised leagues also outline provision for players’ contracts. For example, North America LCS pro players are to receive a minimum salary of $75,000, which increased from the previous minimum of $25,000. Likewise, OWL provisions include one-year guaranteed contracts with an option to extend the following year, a minimum salary for players of $50,000 per year, health insurance, and a retirement savings plan. In addition, teams are required to distribute at least 50% of performance bonuses to their players directly. For perspective, performance bonuses for the first season of the OWL were $3.5M in total, split among the 12 franchised teams, with a minimum of $1.0M awarded to the season. The OWL even outlined that teams need to provide housing and practice facilities in accordance with the professional standards set by the OWL.

Further it is reported that the franchise model allows for more stable longer-term sponsorship/advertising deals for the leagues. Although the caveat to league level sponsorship is the potential to limit brand opportunities. For instance, the OWL signed a global deal with Coca-Cola, for it to be the leagues official beverage sponsors across all non-alcoholic beverage categories. Therefore, for organizations certain partners are not allowed in conjunction with the league because of conflicts with existing brands. We view the growing competition among brands to secure partnerships with esports leagues/organizations as a positive indication of future industry growth.

For illustrative purposes, OWL organized by Major League Gaming, a subsidiary of Activision Blizzard, closely resembles traditional sports, with each of the 20 city-based team competing in regular season games and playoffs. There are 280 regular season matches that begin in February and end with the postseason in the fall. The 2019 regular season games were played live at the Blizzard Arena in LA for four days Thursday through Sunday. Each season consists of pre-season play, regular season and post-season playoffs to crown the championship team for the season. The 2020 season introduces the homestand model, the first in esports, with teams travelling overseas to play events against teams based in Europe and Asia.

The teams have been ramping up marketing and promotional activities to build-out their respective regions. Moreover, each franchise team has flexibility in marketing efforts, venue selection and ticket prices, the size and investment vary from team to team. For example, the Philadelphia Fusion team owned by Comcast Spectacor held watch parties at the Xfinity Live, in the Wells Fargo complex, while the Texas Outlaws have been hosting meet- and-greets and targeting local universities in Texas to find fans. The venues and ticket prices also differ. For instance, the Florida Mayhem will hold events at both the University of Miami and Full Sail University in Orlando while other franchises will host all events in one venue such as the Vancouver Titans at the 18,000 seat Roger Arena although only half of its lower-level seating will be used. The tickets range in price from the cheapest two-day tickets for the first homestand weekend at about $60.0/seat with the VIP package at around $265.0/seat. The VIP ticket reportedly includes lounge seating, a swag bag, 15% off merchandise, free underground parking and an after-party invitation as well as in-seat food service. For reference, tickets are substantially below what a Vancouver Canucks ticket retails for, with upper bowl seating, ranging in price based on game demand, starting from $239.0/seat for hot games. The Boston Uprising, owned by the Kraft Group, two-day OWL tickets for its first event in April range from $118 to $365 in price. Once again, NFL’s New England Patriots, owned by the Kraft Group, tickets sell in the range of $229.0 for the cheapest seats to $1,817.0 for the best seats. However, the Overwatch League cannot be compared to an established league such as the NFL or NHL with years of build-out in each leagues’ hometown fanbase, instead the ticket ranges should indicate that the tickets have possible upward potential. Regardless, many industry participants argue against the home-based system instead advocating for teams not to be anchored to a city. Riot Games’, League of Legends esports league in North America sells franchise spots but the teams are not city-based. Those against franchise formats argue that anchoring to a specific city limits fanbase growth.

Open Circuit:

In the open circuit, players and teams follow the promotion and relegation process, in which teams are ranked based on their performance for the season with the best teams promoted to the higher division the following season and the worse teams relegated to the lower divisions. In the Dota Pro Circuit, for example, a ‘Major’ and ‘Minor’ championship exist with teams awarded qualifying points with results of the tournaments listed on a public leaderboard. The top twelve teams at the end of the season earn invites to that year’s International. On the other hand, critics of the open ecosystem argue that the format encourages misalignment in stakeholders. For instance, Valve’s Dota 2 tournament ‘The International’ dwarfs many third-party organized Dota 2 events.

The open circuit model does not require an initial investment to secure a permanent spot in the league. A top Call of Duty team ‘100 Thieves’ decided not to participate in the Call of Duty League (CDL) due to high initial fees and city-based league format. 100 Thieves argued that the high initial fees and city- based league format are not a viable option, since the companies that own these teams are still in the start-up phase and would refrain from committing to a particular city thereby losing their global appeal. Although in the open circuit model, teams bear the risk of losing their spot in the premier leagues as new teams/players can qualify for each tournament. The risk of organizations not qualifying is substantial in the open-circuit model and the cost is directly borne by those organizations and their investors, with a greater portion of revenue tied to tournament success for prize money and further sponsorship/advertising deals.

However, sponsorship and advertising deals are more flexible for open circuit tournaments, with organizations able to work creatively with brands rather unrestricted by the league formats. Additionally, sponsorship/advertising deals vary in price points with brands providing differing pricing in regions such as North America, Europe, South America, Asia etc. Moreover, some brands have headquarters that are not North American based and therefore may prefer to work with organizations that do not have predominately North American franchise teams in their league.

Team Economics:

Although provisions for pro players are outlined by leagues, splits between players and organizations vary within the industry. Our industry contacts indicate that typical splits for players in prize money (excluding player salaries) is 5-10% but can go as high as 80% to 0% depending on each players skill level and personal brand value. Splits for sponsorship revenue also vary depending on which party secures the brand sponsorship. If the player secures the sponsorship, we believe the player could retain up to 80% with the organization receiving 20%, however depending on the tier of the player (personal brand value) the splits would most likely move towards/beyond 50/50. While rates have a huge range and are event specific, Esports public appearances for tier 1 players generally range from $5K for a few hours to $10-25K for a weekend, with tier 2/3 players receiving under $10K. However, we stress that the rate varies with the type of appearance, for example, meet and great with fans, meeting with media or promoting at an event. The split for appearances between players/organizations is typically 85/25. Public appearances from top influencers such as Ninja or DrDisrespect are as high as $100-500K, with Ninja reportedly earning half a million for hosting New Years Eve in Time Square. The pay-outs for top esports personalities take into account the fact that public appearances can cost streamers where the time commitment away from streaming results in a loss of subs, fan engagement and ad revenue on Twitch/Mixer /YouTube/Caffeine. Additionally, organizations sell custom merchandise with select players receiving a 50% royalty (on the higher side) of 16

the profit generated from sales. Players can market their specific named jersey with a code, which allows organizations to track each players ROI. Marquee players can also receive a small royalty on the sale all of merchandise, such as 1% on sale of all jerseys. Besides player salaries, the variability in player compensation is in line with traditional pro-athletes, where personality, mainstream popularity and personal brand value translate to larger sponsorship and advertising deals. The splits between players and organizations are likely to evolve and become more standardized as the industry matures.

The Pipeline Problem: The pipeline problem of where prospective players will be scouted from is also different between the publisher-controlled franchise model and open circuit format. Many amateur tournaments, even those with franchised professional level tournaments, follow the promotion-regulation system. For example, the path to professional Overwatch esports, first starts in the ‘Overwatch Open Division’ which is accessible by all PC players hosted by Battlefy (Private). The top Open Division teams from each region are invited to compete in the ‘Overwatch Contenders Trials’, a promotion-regulation tournament. In each of the seven regions (Korea, China, Australia, South America, North America, Europe, or the Pacific) teams assemble up-and-coming rosters to compete across multiple seasons annually in the ‘Overwatch Contenders’ in which Blizzard injected a $3M prize pool. Players that reach the Contenders level have an increased chance of being scouted to the OWL.

“The biggest problem for Contenders is that it’s a standard example of a closed ecosystem. The elite teams are rich, but below that line, there’s no incentive for anyone to invest in it besides Blizzard themselves. Let’s say you’re FaZe Clan, you don’t have a spot in Overwatch League. You want to pay salaries to people in the Contenders systems so that ... what, they can get signed by Boston Uprising? You’re not going to invest into being a farm team for an Overwatch League franchise. The viewership isn’t there, and there are relatively low incentives”, according to Michal Blicharz VP of Pro Gaming at ESL. (Polygon)

In open circuit formats, event organizers such as ESL have more incentive to take on the financial risk in hosting amateur events. Still as unorganized as open circuit may be for some industry participants and investors, downsizing is not as much as a financial burden for the open ecosystem, which can scale down budgets and prize pools when fans drift to other titles. The pipeline problem is in fact more critical for franchised league success as franchisees are looking for longevity to recoup their initial investments.

It is fully expected that league structures, formats and economics will continue to be publicly debated, will evolve and we will see missteps. However, reiterating our thesis, publishers are somewhat self-regulated by their leverage to audience growth where healthy league and team development are core factors and pipeline problems will likely be another area to see change over-time.

Esports Comps Sheet

Market Cap Enterprise Company Ticker Last Price ($M) Value ($M) Returns EV/Sales EV/EBITDA P/E 1 Month 3 Month YTD 2018 2019 2020 2018 2019 2020 2018 2019 2020 Game Publishers Activision Blizzard, Inc. ATVI-US $55.44 $42.28 $34.35 2.7% 18.3% 19.0% 4.6x 6.4x 5.9x 11.4x 18.2x 15.4x 19.8x 25.0x 21.8x Electronic Arts Inc. EA-US $95.98 $28.27 $26.65 -1.4% 6.9% 21.6% 6.5x 4.8x 4.6x 20.6x 14.6x 13.1x 36.3x 20.4x 19.4x Take-Two Interactive Software, Inc. TTWO-US $124.34 $14.13 $8.73 -0.6% 4.6% 20.8% 5.1x 4.3x 4.4x 32.5x 17.5x 16.8x 63.5x 26.0x 25.5x NetEase, Inc. Sponsored ADR NTES-US $282.88 $35.96 $25.55 7.5% 15.4% 20.2% 2.5x 3.1x 3.3x 17.1x 15.0x 12.4x 32.8x 21.4x 18.9x Nintendo Co., Ltd. 7974-JP ¥37,870.00 ¥4,836.20 ¥2,712.25 -10.6% -5.0% 29.3% 4.4x 2.8x 2.6x 22.1x 11.4x 9.7x 40.3x 20.6x 17.3x Konami Holdings Corp. 9766-JP ¥4,970.00 ¥708.89 ¥534.47 -4.2% 8.8% 3.4% 2.7x 2.1x 2.0x 11.3x 8.5x 7.5x 24.8x 19.6x 17.2x Bandai Namco Holdings Inc. 7832-JP ¥7,040.00 ¥1,556.22 ¥927.59 8.1% 21.2% 42.9% 0.9x 1.9x 1.8x 6.1x 12.2x 11.3x 14.2x 23.5x 21.6x Tencent Holdings Ltd. 700-HK $319.00 $3,024.58 $3,054.03 -4.9% -12.7% 1.6% 8.2x 7.3x 5.9x 19.6x 19.3x 16.6x 31.8x 28.3x 24.5x Ubisoft Entertainment SA UBI-FR € 56.00 € 5.66 € 9.76 -17.6% -26.3% -20.5% 5.2x 3.3x 2.5x 12.2x 7.2x 5.1x 54.4x 44.6x 16.6x Average -2.3% 3.5% 15.4% 4.5x 4.0x 3.7x 17.0x 13.8x 12.0x 35.3x 25.5x 20.3x Median -1.4% 6.9% 20.2% 4.6x 3.3x 3.3x 17.1x 14.6x 12.4x 32.8x 23.5x 19.4x Companies with Esports Exposure Amazon.com, Inc. AMZN-US $1,780.78 $865.66 $758.60 2.2% -11.0% 18.6% 3.3x 3.3x 2.8x 30.0x 22.3x 18.4x 74.6x 82.6x 62.6x Microsoft Corp. MSFT-US $139.94 $1,071.31 $991.23 1.9% -0.6% 37.8% 6.6x 7.8x 7.0x 14.6x 17.8x 15.6x 46.3x 27.8x 24.5x Alphabet Inc. Class A GOOGL-US $1,259.11 $817.08 $629.78 3.3% 10.5% 20.5% 4.6x 4.8x 4.1x 14.3x 13.2x 11.3x 23.9x 25.9x 22.7x Facebook, Inc. Class A FB-US $186.38 $452.06 $342.29 2.8% -8.9% 42.2% 6.1x 7.1x 5.8x 11.5x 13.6x 11.2x 17.3x 28.7x 19.8x Intel Corp. INTC-US $52.23 $249.48 $234.90 4.8% -1.3% 11.3% 3.3x 3.9x 3.8x 7.1x 8.5x 8.2x 10.4x 12.4x 12.2x NVIDIA Corp. NVDA-US $196.86 $124.14 $94.66 14.1% 10.2% 47.5% 15.3x 11.0x 9.4x 43.0x 38.2x 28.3x 50.5x 37.4x 28.8x Advanced Micro Devices, Inc. AMD-US $31.72 $35.49 $19.05 7.5% -7.0% 71.8% 2.9x 5.4x 4.3x 30.7x 37.5x 23.7x 55.7x 52.4x 31.2x HUYA, Inc. Sponsored ADR Class A HUYA-US $21.83 $1.40 $1.71 -17.5% -2.8% 41.0% 2.4x 3.3x 2.4x NA 67.5x 25.5x NA 67.9x 32.9x Walt Disney Company DIS-US $130.26 $236.47 $198.13 -1.3% -7.8% 18.8% 3.3x 3.0x 4.2x 10.6x 10.5x 17.6x 17.3x 19.5x 23.0x GameStop Corp. Class A GME-US $6.42 $0.57 $0.34 28.1% 57.4% -49.1% 0.2x 0.2x 0.2x 2.9x 5.1x 5.6x 47.5x 4.7x 5.9x Lions Gate Entertainment Corp. Class A LGF.A-US $8.06 $1.71 $6.85 -15.2% -37.9% -49.9% 2.3x 1.4x 1.3x 4.4x 10.5x 9.8x 11.4x NA 15.5x Sony Corp. 6758-JP ¥6,340.00 ¥8,033.09 ¥5,266.72 -1.2% 6.5% 19.0% 0.7x 0.9x 0.9x 4.1x 6.4x 6.2x 13.3x 12.5x 13.7x Modern Times Group MTG AB Class B MTG.B-SE € 73.82 € 5.02 € 23.87 -10.1% -19.0% -28.0% 1.2x 1.0x 0.9x 12.6x 20.4x 11.9x 18.9x NA NA Average 1.5% -0.9% 15.5% 4.0x 4.1x 3.6x 15.5x 20.9x 14.9x 32.2x 33.8x 24.4x Median 2.2% -2.8% 19.0% 3.3x 3.3x 3.8x 12.1x 13.6x 11.9x 21.4x 27.8x 22.9x Canadian Publicaly-listed Companies with eSports Exposure Cineplex Inc. CGX-CA $22.79 $1.45 $2.18 -10.8% -4.9% -10.4% 1.3x 2.1x 2.0x 8.5x 8.4x 7.8x 20.9x 32.1x 20.6x Enthusiast Gaming Holdings EGLX-CA $2.07 $0.12 NA -1.4% -58.6% -45.5% #N/A NA NA NA NA NA NA NA NA Axion Ventures Inc. AXV-CA $0.32 $0.08 $0.19 -27.3% -53.6% -64.4% 16.6x 9.7x 1.7x NA NA 3.4x NA NA 5.2x Millennial Esports Corp. GAME-CA $2.24 $0.00 $0.02 -17.0% -8.6% -50.2% 165.4x NA NA NA NA NA NA NA NA Victory Square Technologies Inc. VST-US $26.99 $13.31 $21.54 0.0% 25.2% 17.9% 2.1x 2.1x 2.0x 10.6x 7.4x 7.3x NA 11.4x 11.8x Average -11.3% -20.1% -30.5% NA 4.6x 1.9x 9.5x 7.9x 6.2x 20.9x 21.7x 12.5x Median -10.8% -8.6% -45.5% NA 2.1x 2.0x 9.5x 7.9x 7.3x 20.9x 21.7x 11.8x

Source: FactSet, Echelon Wealth Partners

EWP North American Gaming, Esports and Gambling Index

Source: FactSet, Echelon Wealth Partners

EWP European Gaming, Esports and Gambling Index

Source: FactSet, Echelon Wealth Partners

EWP APAC Gaming, Esports and Gambling Index

Source: FactSet, Echelon Wealth Partners

EWP North American Gaming, Esports and Gambling Index (By Category)

Source: FactSet, Echelon Wealth Partners

EWP Europe Gaming, Esports and Gambling Index (By Category)

Source: FactSet, Echelon Wealth Partners

EWP APAC Gaming, Esports and Gambling Index (By Category)

Weighted Average Return - by Weighted Average Return - by Weighted Average Return - by 1.4% 0.8% 9.3% Market Capital Market Capital Market Capital n=48 n=48 1.2% Average Return n=40 (0.4%) Average Return n=40n=40 16.1% Average Return n=40n=40

0.5% Nasdaq Composite 15.3%Nasdaq Composite 24.4% Nasdaq Composite

(0.4%) S&P/TSX 9.5% S&P/TSX 17.1% S&P/TSX

0.0% S&P 500 13.3% S&P 500 20.8% S&P 500

Investment Firms (n=1) (10.6%) Investment Firms (n=1) 64.0% Investment Firms (n=1) 7.4% 2.6% Streaming (n=3) (1.6%) Streaming (n=3) 38.2% Streaming (n=3)

(0.5%) Gambling (n=4) (4.7%) Gambling (n=4) 3.8% Gambling (n=4)

(8.8%) Media (n=2) 4.0% Media (n=2) 73.3%Media (n=2)

0.1% Hardware (n=4) 3.4% Hardware (n=4) 17.6% Hardware (n=4)

2.0% Publisher (n=26) (0.1%) Publisher (n=26) 9.0% Publisher (n=26)

Source: FactSet, Echelon Wealth Partners

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