FUNFF - FansUnite Entertainment Inc. (FUNFF) Q2 2023 Earnings Call Transcript
2023-08-15 17:02:08 ET
FansUnite Entertainment Inc. (FUNFF)
Q2 2023 Results Conference Call
August 15, 2023 10:00 AM ET
Company Participants
Prit Singh - Investor Relations
Scott Burton - Chief Executive Officer
Graeme Moore - Chief Financial Officer
Presentation
Prit Singh
Hello, everyone. Welcome to FansUnite's Q2 fiscal 2023 Earnings Call. For those who are unfamiliar with FansUnite, FansUnite is a global sports entertainment and gaming company, focused on the regulated and lawful sports betting affiliate market, which includes customer acquisition, retention, support and reactivation. FansUnite trade on the TSX, under the ticker FANS, F-A-N-S and on the OTCQB, under the ticker FUNFF, that is F-U-N-F-F.
My name is Prit Singh and I will be the moderator for today's call. Before we begin, I would like to go over to legal disclaimers. I will pause here for a minute, so our viewers can read it. On today's call, we will be covering FansUnite’s Q2 fiscal 2023 financial and operational highlights as well as its growth outlook for the remainder of 2023.
At the end of the call, we will be hosting a Q&A session for our viewers. If you have any questions during the webinar, feel free to send them in using the zoom Q&A function at the bottom of your screen. If you are calling in to listen to the webinar today, please e-mail your questions directly to ir@fansunite.com, again, that is ir@fansunite.com. We will address these questions at the end of the presentation during Q&A session.
Our presenters today will be the CEO of FansUnite, Scott Burton and CFO of FansUnite Graeme Moore.
I will now turn the conference over to Graeme Moore, CFO of FansUnite to discuss the Company's Q2 2023 financial results.
Graeme Moore
Thanks, Prit. Just everyone knows how this will be structured similar to prior quarters. I'm first going to speak to the statement of profit and loss of the three months ended June 30, 2023, or as often refer to it Q2, 2023 and then we will move to the six-months ended June 30 th , sometimes I will that just year-to-date. After that, I will then move to the balance sheet, which does look a little bit different this quarter, given some of the things that happened in Q2, but we will get there when we get there.
So for the three-months ended, June 30 2023, revenue increased by approximately 14% to $5.3 million when compared to $4.7 million over the same period in the prior year. MF affiliate revenue makes up most of the revenue activity during the quarter at $5.1 million as compared to $4.7 million over the same period in the prior year.
The increase is largely as a result of new state openings, increased revenue from our digital affiliates, and optimization of the affiliate business by our betting Hero management team. During the three-months ended, June 30 th , 2023, the company had a cost of revenue of $2.0 million, which compares to $2.8 million, same period in prior year.
This led to an increase in gross margin up to 62% as compared to 41% over the same period in prior year. The move away from non-performing assets such as RNG Games, Wagers, and BetPrep led to improved margins as the focus of the company has shifted really intensely into the live activation and research segments.
I just want to take a minute here and make sure we are glossing over those improvements in gross margin. When we talk about the steps we have taken recently to focus on improved profitability and the company being in the best position we have ever been in. This is what we are talking about.
An improvement in gross margins from 41% to 62% is a huge improvement. For this to happen during Q2, which is one of our slower quarters due to the lack of sporting events in the U.S. sports calendar, it is evidence that, the steps we have taken to focus the company in the last 12 to 18-months are working.
Our net loss for the three-months ended June 30 th was $474,000, which compares to $15.9 million over the same period in the prior year. The improvements here are a direct result of the margin improvements as noted above, as well as $7.4 million in gains from the sale in May of the Chameleon source code and McBookie.
Efficiencies were also seen in selling, general and administrative expenses, which were down to $10.9 million as compared to $15.1 million in 2022, a decrease of $4.2 million. Finally, improvements were achieved in other expenses as a direct result of the earnout restructure in Q3 fiscal 2022.
To go into a couple of those a little more detail, general and administrative expenses decreased to $973,000 for the three month period compared to $1.1 million in the prior year. The primary cause of our decrease here is due to the positive RNG gains, which did lead to significant cost savings. Professional fees decreased to $863,000 for the three-months ended, as compared to $1.03 million over the same period in prior year.
Again, this mainly relates to the halting of development of the RNG portfolio, consequently leading to the cancellation of services from certain RNG contractors, but was offset by legal expenses incurred in the sale of Chameleon source code and McBookie.
Salaries and wages decreased to $3.2 billion in the three-months ended June 30 th , as compared to $3.5 million in the same period of the prior year. Our average headcount decreased from a 107 to 92 a direct result of developers leading to better as part of the chameleon sale.
The transaction did occur partway through the quarter. So just to remind everyone, that transaction closed on May 8 th of this quarter. So that mitigated the full benefits of these cost savings, when the company -- which the company does expect to realize in future quarters.
Sales and marketing decreased to a $153,000 in Q2 compared to $455,000 for the same period in 2022. During 2022, there was a marketing spend related to the full launch of the iGaming platform and the accompanying RNG games, whereas in 2023, there is the elimination of marketing expenses related to the iGaming product and obviously the RNG games were on pause.
In summary of the three month results, we saw a decrease in the cost of sales, a decrease in G&A, a decrease in professional fees, a decrease in salary and wages, a decrease in sales and marketing, but an increase in revenue. We are finally starting to see the benefits of all of our efforts to focus this company on profitability.
When we take a look at the six-month period ended June 30 th , revenue stayed relatively consistent at $13 million when compared to $13.2 million in prior year. Affiliate revenue was $12.4 million for the six-months ended June 30, 2023 compared to $13.1 million in prior year comparable period. This change is primarily as a result of unusually high activity in Q1 of 2022 as New York legalized sports betting.
As we have mentioned in past quarters, a large influx of sportsbooks using affiliates in an attempt to capture an early market share lead, led to increased revenue from our affiliate revenue segment. As previously mentioned, affiliate revenue was up in the three-months ended June 30 th , which has helped bolster our year-to-date revenues.
Management's confident in the strategic direction of the company post those May transactions that we have mentioned a few times, are looking forward to a strong end of the year as we enter football season in the U.S. For the six-months ended June 30, 2023, FansUnite had a cost of revenue of $4.8 million, which was down from $5.9 million in the prior year.
Our gross margin for six-months was 63%, which compared to 55% over the same period in prior year. The improved overall gross margin percentage, primarily rates to continue gain inefficiencies related to AMF, as the company has increased its focus on the Betting Hero business lines, specifically live activation and research.
Overall, margins are expected to trend upwards in the future as affiliate revenue becomes the dominant segment for FansUnite. Our affiliate margin, if you look at that is just a standalone business, was 65% for the six-months ended June 30 th which compared to 55% over the same period in prior year.
When we pivot to net loss, our net loss for this period was $6.6 million, which compared to $25.1 million in the prior year. This is due to a decrease in foreign exchange, share-based payments, non-cash expenses, and was aided by the aforementioned gains from asset and subsidiary sales, the Chameleon and McBookie specifically.
The sale of Chameleon and McBookie resulted in a gain of $7.4 million for the six-months ended June 30, 2023. There was a decrease in share based payments to $1.2 million which compared to $3.1 million over the same period in the prior year. This is really an accounting exercise.
If you look at the difference there, just without getting into too much account and speak, how we account for our share-based payments has changed. We haven't fundamentally changed anything there.
Our non-cash expenses totaled $12.4 million, as compared to $19.7 million over the same period in the prior year. For the six-months, our professional fees stayed relatively consistent at $1.5 million compared to $1.6 million over the same period in 2022.
During our current period, there were legal servicers rendered in relation to the sale of the BetPrep, the McBookie and the Chameleon platform source code sales, as well as our Q1 equity raise. This increase in legal fees was offset by the elimination of RNG professional fees, specifically one significant vendor, whose contract was ended at the end of Q2 2022.
Salaries and wages increased marginally to $6.8 million for the six-months ended June 30, 23, and compared to $6.7 million over the same period in prior year. Although the company did reduced employee counts as part of the Chameleon sale, our average head count of 94 was the same number in prior year.
As previously mentioned, we do expect to realize salary savings in Q3 with a much more significant savings coming in Q4. And again, we are looking at the six-months ended June here, and so for five of those - 4.5 of those six-months, we had all of those employees from the Better Sale. So as we finish the year, we will really start to see those savings hit our financial statements.
Our sales and marketing expenses decreased to $309,000 for the six-months ended June 30 th , and compared to $726,000 over the same period prior year. As I mentioned in the three-months section, sales of Wagers and BetPrep contributed significantly to this reduction.
During the prior year, we were really pushing the iGaming platform, and then once we sold that and had the RNG games on pause, we were able to significantly reduce our marketing spend. As the company focuses on the affiliate business, we do not anticipate a significant marketing extend, going forward as that is business is really working well. Our total assets decreased to $65.8 million at June 30 th compared to $77.5 million as of year-end.
During Q2 2023 McBookie was sold, which resulted in the elimination of $1.2 million of total assets. Similarly, our Chameleon iGaming platform was sold resulting in the removal $3.9 million in intangible assets from the balance sheet.
Intangible assets were reduced further by amortization of $10.1 million year-to-date. This was offset by increases in investments of $2 million related to the share purchase warrants in Better and an increase of $2 million in receivables related to the milestone payment, both as a result of the sale of Chameleon.
Our total liabilities decreased to $26.1 million as of June 30 th , compared to $34.5 million at year-end. The primary driver of the decrease in liabilities was the result of a repayment of $5.5 million of our long-term debt balance.
Our deferred and contingent consideration decreased to $19.3 million when compared to $20.8 million at year-end. This was due to the scheduled deferred payments associated with the acquisition of American Affiliate.
As of June 30, 2023, our company's cash position had increased by $549,000 to $3.5 million when compared to year-end. The increase in cash for the period is largely due to the receipt of a non-brokered private placement of $3 million net of issuance costs, a cash receipt of $3 million for the sale of Chameleon and cash of $5.2 million for the sale of McBookie.
This was offset by $5.5 million payment of long-term debt, and $588,000 of routine and early repayment interest paid, as well as $1.9 million in earn out consideration paid during the six-month period.
As at June 30 th , the company had net working capital of $6.1 million, which compares very favorably to negative $4.2 million that we had year-end. The one new point on our balance sheet that I want to highlight this quarter is contingent assets.
So as at quarter end, $2 million is included in our receivables, related to milestone payments that we have determined, the timing and collection is virtually certain over 12-months. The remaining $3 million, that we have owing from Better is not recorded on our balance sheet, as we cannot conclude on the exact timing or amount of collection.
And as such, it is considered a contingent asset. We are continuing to assess the conditions surrounding these milestone payments, and we will recognize a receivable when certainty exists. We have a really great relationship with the team at Better.
And while we, as a management team, see no reason to doubt the complete execution of their stated goals, our accounting standards have laid out rules for when we can record assets, and we unfortunately can't do that at this moment. We do anticipate collection of the full $5 million from Better, and we will provide updates to our shareholders as we progress towards that. That is all for the financial update.
I will now turn over the call to Scott Burton, our CEO.
Scott Burton
Thank you, Graham. I will talk about the operational highlights, and then at the end, we will jump into the Q&A. So I think Chris mentioned if you have any to please email IR at FansUnite while we are talking.
So as mentioned, we went through quite a large strategic review last year, with the market conditions on, on where we needed the business to go. And the decision was made that we had to move towards you know, the higher revenue, higher margin business units, and divest some of those business units that were not core anymore and really not part of the affiliate strategy.
In May 2023, we sold McBookie for $5.5 million in cash, that was a price that equated to seven times their 2022 EBITDA, which in this environment is a very solid multiple. That resulted in the gain on the sale of $4.4 million. They finished 2022 with the highest revenue in history, and that was partly because it was a World Cup year and Soccer, English football being their biggest market.
So the timing was really good to go out and get a good multiple on that business. We had acquired them in March 2020 for $2.2 million total consideration, $1 million of that was being cash. And as we looked ahead, this was a cash flowing business.
But the regulatory environment in the UK is changing quite rapidly. It is going to be tougher to be an operator in that market, with some of the new marketing rules, the player protection rules coming into place. All of those things are going to, I think, squeeze the margins for the businesses going forward. And it made sense to take that out of our portfolio at this time. And then we have got a great deal on that site.
And it was also in May, so we were very busy getting up to this month, May when we sold the source code related to the Chameleon iGaming platform to Better Holdings. That was for $10 million in cash warrants and deferred compensation.
That also resulted in a gain of $3.1 million on the sale. Critical motivation there was that part of the business was the one that was the highest cost center for the company, had good future potential, but it was going to take time to still get their additional cash required, most likely. And we were also aware that Better's plans were to build or acquire their own player account management system.
As we were providing the PAM in the first few states that they were going to be in, it made sense for us to explore selling the Chameleon code at this time while we were in contract with them and knew what they are in sending to do by the end of the contract.
So both of those divestitures have moved us closer to being cash flow positive with a much stronger balance sheet, and eliminates the need for additional financings. To talk to the better purchase specifically, McBookie was straightforward, it was a straight cash sale.
The purchase price of the Chameleon code was comprised of $5 million at closing, that was broken down into $3 million in cash and $2 million in warrants to purchase the Series A2 Preferred Shares are better at a price of $0.01 per preferred share.
And then on top of that, we have the $5 million in milestone payments, which would be up to $3 million in cash and another $2 million in warrants. The milestone payments are payable over 12-months following the closing of the transaction. And Graeme talked about why, maybe not everything is currently shown on the balance sheet, on the asset line.
So to cap off a very busy quarter, we want to highlight that we can continue to receive recognition for the products we had and the operational excellence, especially the Batting Hero team.
So the company was nominated for six awards at the EGR Awards, recognizing the leading online gaming companies in North America. Better here received three awards in 2023 that included the Employer of the Year, Acquisition and Retention Partner of the Year, and Customer Onboarding Partner of the Year.
We would like to highlight if people don't follow those awards, they are the premier awards in our space. And when betting here wins those awards, they were competing with the biggest names, very large companies in the space and they continue to outperform and win awards against groups like Genius Sports, Sportradar, Scientific Games, Better Collective and PointsBet.
So congratulations to that team and we look forward to watching them continue to execute, as we go into the busy part of this year with NFL about to kick off. In terms of their operations in Betting Hero, they continue to expand their U.S. footprint by participating the launch of the regulated wagering in Ohio and Massachusetts.
So strong operational results have led them cementing their status as the premier live activation affiliate brand in North America. As Graeme talked about the affiliate business contributed significant revenue of $5.1 million, and $12.4 million for the three and six-months ended June 30 th , respectively, they continue to prove its ability to be an efficient market participant by providing 67% and 66% gross margins for three and six-months ended June.
So moving through results and continued execution from the Betting Hero team confirmed that the strategic moves we made at the end of 2022 and throughout the first half of 2023 will result in the cash flow positive business this year, that we were aiming for, and we have talked about the last few earnings calls.
We have a clear path there now, as we look to the efficiencies and the cost savings we have, and there is still more to come. Additionally, to Betting Hero, we put some focus into the digital side of the business, which didn't get a lot of attention previously.
And while we were working through some of the restructuring, but we have a marquee digital domain props.com, and they have generated significant traction during this quarter. A couple of key stats is a five times increase in traffic, in the quarter Q2 2023 versus Q2 2022, and a 9x increase in revenue in Q2 2023 as compared to Q2 2022.
One highlight too, this is during the slow part. So with NFL season approaching, we are looking forward to props being a cash contributor as we go forward, and as we could figure out how to really monetize that site.
Another thing we haven't talked much about with the props product is, it sits on our own proprietary affiliate platform, which also supports bettinghero.com. So this platform can support an unlimited number of affiliate sites. We have over 15 additional domains right now that we believe offer high value and we can be deploying in the next six, 12-months.
Really what our strategy was to focus on props kind of get that dialed in on the platform, get it monetizing, and then we can begin to launch additional sites at a pretty low marginal cost. So these sites scale well, have good margins. And as I said, the cost of launching them now is quite minimal.
Going along the line of diversifying revenue streams, with what we have. So leveraging the Betting Hero business a Betting Hero team, we are in a very unique position to offer extra services to our existing partners. This will help to smooth out the seasonality that we have with North American sports.
So Betting Hero continue to grow the lines of business outside of live activations. The research segment has grown in the fiscal year, including contract signed with major U.S. sportsbooks. The continued diversification will contribute to mitigating seasonal effects some Betting Hero's revenues. And then we also expect to, see some contribution from the digital side of the business.
So as sports betting and iGaming gets legalized in more North American states, we will continue our aggressive expansion into new markets, in partnerships with our existing affiliate customers, but we are also continue to bring on new partners in states as they open up.
And then consistent with our plan to profitability, we continue to conduct strategic reviews on certain business segments to continue to operate or identify opportunities for operational and financial efficiency.
It is obviously led to the sales of our Malta business, gaming license, the B2B license we had in Malta, the betting analytics brand, BetPrep, McBookie and Chameleon, and we will continue to look at assets that we consider either non-core or we don't see them contributing in a positive way and keep pushing towards higher margins, higher revenue and profitability, as we go through the busiest parts of the year, which is Q4 and then leading into Q1.
So it is the end of the formal speak. I will now turn the call to Prit, who is going to moderate the Q&A for us. Thanks.
Question-And-Answer Session
Q - Prit Singh
Thanks, Scott. Thanks, Graeme. As mentioned at the top of the call, if you do have any questions, can you please submit them to the Q&A function at the bottom of your Zoom screen? Alternatively, if you are calling in today, you can email us at irfangenite.com, again, that is irfangenite.com.
It is first question here. When will FansUnite become profitable?
Scott Burton
I can take that one. So I think Scott alluded to it, and I certainly did as well, but that has been our focus for a long time now. And I think with our recent cost cutting, streamlining of assets, renewed focus on live activation and research, we anticipate being cash flow positive in Q4. I think that is the exact same messaging we gave last quarter, and it is absolutely true.
I'm even more confident than when we sat here last quarter, as we have realized all of our promised savings in Q2. Everything we said we were going to achieve, we have achieved since our last call in the middle of May.
We did all of those cost savings, while increasing revenue. Q4 is the only quarter of the year with three full months of college and NFL football. And our Betting Hero team has really been putting in some incredible work in what we call the off season here, the past five months to really capitalize on football season, which is the beating heart of that business.
Prit Singh
Okay. Thank you. Can you give us an update on Betting Hero's additional revenue segments and expand on what you mean by live auction and research?
Scott Burton
Sure. So live activation is the core of the Betting Hero business. So that is where we get people to sign up for sportsbooks. Betting Hero's tagline is, we help people enjoy betting on sports. And so what we do there is, we are boots on the ground. We are helping people. We are able to turn when somebody on a digital site has a intent to sign up for a sports book. They have about a 50% success rate.
When we meet with somebody in person, whether that is on a casino for through our bar network or out of venue, we have an over 90% success rate of getting that person to successfully register, deposit and place a bet. And so that is really a huge differentiator for us and a huge value proposition for the operators, is, it is one thing to get someone to want to bet on your site.
It is the other thing to get them to be able to bet. And so for us to be able to add that, that is our real secret sauce from the live activation side. And that is where you see a lot of our revenue. A large part of our revenue is live activation, and that is what we do really well. What we are branching into and what is a really interesting and growing and high margin segment of the business is, the Research segment.
So that has really started to gain. We offer a monthly subscription product that people are able to get. We do -- we publish research reports monthly on different states and the number of subscribers for that has gone up. We are also working more closely with some of our major partners on some recurring research engagements.
So what I mean by that is three plus month engagements to look at all parts of their offering, improve performance, customer experience, everything like that. In Q3, we have actually already signed up 1 major operator and are looking to bring more on board in the fall.
Prit Singh
Okay. As a follow-up to that, how do you get compensated by sportsbooks and how for the affiliate marketing division?
Scott Burton
Sure. So the live activation, I think is kind of what you mean by that side, more than the research. And we get paid every time somebody successfully registers, deposits and bets. And so without going into the Ts and Is of a contract, essentially, when we engage with somebody, let's call it on a casino floor, we say, hey, would you like to place a bet on Monday Night football today?
As soon as that person has signed up for the account through our unique link, they have deposited some money in their account and they placed a bet, usually, it is a little more than a $1 bet, but let's call it a $10 bet, at least, that is when we get paid a flat fee by the operator, because successfully signing someone up to their app.
Prit Singh
Okay. Thank you. Can you remind our viewers again, about the rationale behind selling McBookie and Chameleon iGaming platform?
Scott Burton
Yes. I can take that one. I have talked a bit about it in the presentation. But, we really wanted to focus on streamlining the business, making the business simpler, and having to focus on the higher revenue, higher margin, high growth pieces of the business.
So part of our strategy was to look at divesting those. It is obviously challenging time in this market to do things and get good prices and good deals. But, we did. So on McBookie side, one, we decided, we weren't going to be a B2C operator going forward. There is a lot of challenges on that on the regulatory front and it is always changing.
And especially in the UK, they are coming out with some really tough player protection rules, limits, all sorts, which adds some marketing rules. So we think it is going to get a bit harder there going forward.
So the timing was right to divest that off the back of a very strong year. And we found a great buyer and someone who we think can operate that brand with Paul and Damien well. So that was the reason we wanted to exit both B2C, but especially the UK market at the time.
And on the Chameleon, when we looked last year and this determined that the best path for the company right now is to get to a cash flow positive position, as quickly as possible, how are we going to do that?
We had to look at the part of the business that was costing the most to run. We still think it had a lot of upside potential, but that was not near enough term. And this environment not wanting to -- not raise money, trying to avoid that at all costs right now. So we put ourselves in position where we don't need to go raise money.
But we had to decide what we were going to do with that part of the business even just shuddering. It was one option. So we went out to look for a sale of it, in a code sale. So retaining the right to the code, which we have. So we still have the ability to use and resell the code, Better made the most sense.
So I think, again, in tough times and when it is a tough economic market for selling assets, finding a strategic is one of the best chances of getting a good number. So Better made a lot of sense. They have been working with us for months. We knew that, by the end of our initial contract, their goal was to either have built their own platform by that time or had one acquired.
So, we had a limited shelf like with them, and it made sense. We wanted also a good place for the team members. They are a great group to work with. The 28 people who went over were quite excited to do so and are happy there.
So that is why we did that, and that is why we are in the position right now where we are keeping our revenue or growing revenue, but cutting costs significantly, increasing margins significantly. And we now have a clear line of sight to when we will be cash flow positive and profitable.
Prit Singh
Okay. Thank you. Just to follow-up to that, how has FansUnite used the proceeds from the sale of McBookie and Chameleon? I know you touched on this a bit, Graeme.
Graeme Moore
For sure. So, when we got the data September 2022, we had an agreement with our lender, where if we did do a significant asset sale, we would use the proceeds to pay down our debt early, which is great for us, because it saves us on recurring interest expense, and it is great for them, because they get a good return on their capital.
So the net proceeds were used to pay down our debt, and you see that as it went from $8.2 million to $2.7 million. Any additional funds outside of that $5.5 million that went to debt went to either early interest repayments or closing accounting legal fees. So really those sales operationally allowed us to reduce our burn and improve our few your liabilities, but also our current liabilities in significantly reducing the amount of debt we had on our balance sheet.
Prit Singh
Thank you. Next question. Does the company intend to sell any additional business assets?
Scott Burton
Right now, Prit, we got through the major ones that we identified. So that included parking the games, the RNG games, moving on BetPrep, Wagers, Chameleon and McBookie. So the real big ones we have now taken care of, the focus now is just on growing the affiliate businesses that we have.
So we will continue to look at, what we have in our portfolio and what we have sitting as assets that don't directly contribute to the goal of being profitable, contributing in the near-term, and we may identify some that we want to move.
But, I think done the heavy lifting and now the pure folks, especially going into this football season is just focusing on the revenue generating assets right now. So that is really all we are looking at.
Prit Singh
Okay. Okay. Thank you. A question on Better. When do you anticipate Better going public? And when do you expect to capitalize on your share ownership?
Scott Burton
No idea, to be honest. On their public plans, I think they know probably that there is two potential paths to liquidity, which would be going public or an acquisition. Obviously, we would recognize the benefit of that if either of those happen.
I think they are very much in execution and growth mode right now. There is always secondary markets for private company stock, especially if they are an exciting and growing business. We have right now, no comments on what their plans are around being public.
Prit Singh
Okay. Great. So for our viewers, if you have any questions, you can submit them to your Q&A at the bottom of your screen. Again, if you were calling in today, and you don't have access to Zoom, you can email us at ir.fangtunite.com, that is ir.fansunite.com. Next question. Can you provide an update on FansUnite current NCIB program?
Scott Burton
I can take that one, Scott. So we have renewed our plan the NCIB, normal course issuer bid plan, with TSX in June of this year. Year-to-date, we have purchased 398,000 shares at an average price of $0.06. So that is it. I mean, if you are just looking for a straight what's happened so far, that would be the update.
If we are looking forward for it, once we achieve our goal of cash flow positivity in Q4, that is a huge milestone for us. We don't want to spend cash until we are certain of it coming in. But once we achieve that in Q4, we will look to really accelerate this program, if we still haven't seen any movement in our share price.
Prit Singh
Okay. Thank you. Next question, for Scott and Graeme. What are some catalysts investors can expect in the next six to 12-months?
Scott Burton
six to 12-months, big catalyst for us is coming right around the corner for the business, which is the start of the football season NFL College. We will, as we have in the past, put out some indications and numbers on how that is going. But that is the biggest time of the year for our business a major catalyst.
And we will show that we can hit that cash flow positive in the fourth quarter. We want to also highlight what Betting Hero is doing outside of the live activations. So we talked a lot about the research and their Hotline businesses. So seeing growth in those and being able to report some of those achievements, I think, will be catalyst.
Those are new lines of business, takes out some seasonality, and they are also high margin. Growing on the digital side, so seeing the results of props now that it is fully on the platform that we have developed. It is starting to get traction, getting it into an NFL season, and then seeing how that scales up, and then the ability to add additional digital domains onto that platform.
So watching how we can grow the digital side, and then the major one that we talk about is when we show profitability. As we have said, we have got a clear line of sight to that. We have never been in a better position to say that, we will be a profitable business in the near-term so that will happen at the end of this year.
And some people wait to see it, but we now know where the cost base is now, and where it is going and looking forward. So I think that is going to be the biggest catalyst is when we show and report profitability
Anything to add on that Graeme?
Graeme Moore
No. I think as far as catalysts, that is kind of the best way to put it. If we are looking first time and putting some numbers to it, like, we have already realized, I think one of the things that we hear a lot is, it is one thing to promise flow positivity, but show me, right. And I understand these are quarterly financial statements.
So it is hard to look at too much minutiae, and that is okay. I understand when we people say that. But just to give a little bit of context of savings we have already realized to date. So with the sale of the Chameleon source code to Better, we have already realized savings of over $250,000 per month related to our Canadian salaries. So that is something that has hit us.
Obviously, when you look at these financials, that was only really June as far as kind of the one out of three months or one out of six-month. So it is hard to look through these statements, and see that direct impact. But going forward, Q3, you will see that. Q4 once we have some even more savings, as we shut down, we look to shut down our -- entity.
We look to, further headcount reductions, fewer overseas operations, some shared services and overhead savings that we are going to have, you will see that more in Q3 and then really accelerated in Q4. And so we on the management side have already seen a lot of these savings per month already hit, excuse me, hit our bottom-line.
And so I want to kind of hammer that home that this is intake. We hope in Q4, are already seeing significant progress towards that milestone. And that is why I think Scott and I can sit here today with even more confidence than when we sat here three-months ago that we will hit that.
Prit Singh
Okay. Excellent. For our viewers, if there are any additional questions, please do submit them at this moment to your Q&A function at the bottom of your screen. Again, alternatively, if you are calling in today, please email us at irfansunite.com. Again, that is irfansunite.com. Just wait one moment.
Just one part of your question. When do you expect to see analyst coverage or are you currently working with any analysts?
Scott Burton
Yes. We in discussions with analysts. I was hopeful that we will see some in the summer. We have been talking through Zoom lots for many, many months. And I think what we were told is execute on this strategy that we laid out, and get the business to the point where, we have this affiliate focus, it is a simpler business, easier to understand, easier to compare.
So we have a clear set of comps so we have done that, and then show a quarter or two, that what we said would happen is happening. So I think we are really approaching that now where we can put numbers down in front of the analyst. We have been telling them what we are going to do. We can now show them what we have done and, expect that we will start to get some coverage off the back of that.
Prit Singh
Okay. Excellent. As put that out of the way, we can end the Q&A session. If you do have any additional questions, please email us, at ir.fansunite.com it is ir.fansunite.com.
Scott and Graham, thank you. As a reminder to everyone, thank you for joining us today. FansUnite, if you are unfamiliar with the company, trades on the TSX under the ticker FANS, F-A-N-S, and on the OTC QB under the ticker, FUNFF, F-U-N-F-F. Scott and Graham. Thank you again.
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FansUnite Entertainment Inc. (FUNFF) Q2 2023 Earnings Call Transcript