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November 30, 2018

Thunderbird Entertainment Announces Financial Results for the 1st Quarter ended September 30, 2018


November 29, 2018

Vancouver, Canada — Thunderbird Entertainment Group Inc. (TSXV:TBRD) (“Thunderbird” or the “Company”), a global, multiplatform entertainment company with offices in Los Angeles, London, Vancouver, Ottawa and Toronto, is pleased to announce the financial results of its wholly-owned subsidiary Thunderbird Entertainment Inc. (“TEI”) for the quarter ended September 30, 2018. During the quarter, the Company (formerly “Golden Secret Ventures Ltd”) and TEI initiated a reverse take over transaction which was completed subsequent to quarter end. Accordingly, the results announced today reflect the operations of TEI only as the reverse take over bid acquirer for securities law purposes. The financial results of the business of Golden Secret Ventures Ltd. for the interim period ended September 30, 2018, prior to the completion of the transaction, have been filed separately. TEI’s unaudited interim financial statements along with its Management’s Discussion and Analysis for Q1 2019 are available on the Company’s website at https://thunderbird.tv and under the Company’s profile at www.sedar.com.

Q1 2019 Financial Highlights

Revenue: $14.36 million
Net Income: $1.46 million
Adjusted EBITDA(1) $4.2 million

“The first quarter of this fiscal year was an exciting period of transition for Thunderbird, as we began to execute our plan to raise new equity and list our shares for trading on the TSX Venture Exchange,” said Jennifer Twiner McCarron, Chief Executive Officer and Director. “We are delighted that our team was able to complete these major milestones, while also continuing to execute on our core business plan”.

Financial and Operational Highlights for the Three Months Ended September 30, 2018

During the period, the Company took a number of steps to strengthen its balance sheet in conjunction with a public listing of its shares. As an initial step, TEI drew down a $6 million three year Non-Revolving Term Loan in order to repurchase common shares of certain shareholders of the Company on an accretive basis. The Term Loan was part of an overall credit facility negotiated with the Royal Bank during the quarter, that also included an increased production line and an acquisition facility.

In July 2018, TEI signed a letter of intent with TSX Venture Exchange listed Golden Secret Ventures Ltd. (“Golden Secret”), pursuant to which Golden Secret agreed to acquire 100% of the shares of the Company via a reverse take-over (the “RTO Transaction”). The RTO Transaction was completed October 30, 2018 and the shares of the Company commenced trading on the TSX Venture Exchange on November 2, 2018. On closing of the RTO Transaction Golden Secret had working capital of approximately $2.5 million.

In September 2018 TEI completed a brokered private placement financing of 5,125,000 subscription receipts at a price of $2.00 per subscription receipt for aggregate gross proceeds of $10,250,000. Each subscription receipt was exchangeable for one post-Consolidation common share of the Resulting Issuer. TEI also raised an additional $2,250,000 by issuing 8% debentures, convertible at $2.00 per share. The subscription receipts and convertible debentures were all converted into common shares of the Company on the closing of the RTO transaction

Thunderbird Kids

The Company continued to expand its customer base and its geographic base as Thunderbird’s Kids division, Atomic Cartoons, announced the opening of a studio in Ottawa. It is expected that with the opening of the Ottawa studio, the Company will have a combined staff in Ottawa, Los Angeles and Vancouver of approximately 550.

During the quarter, Thunderbird was in various stages of production on 12 animated television series reflecting a blend of both service based and proprietary series.

Thunderbird continued to advance its kids development strategy, including announcing it had optioned the #1 New York Times best-selling book Princesses Wear Pants in order to develop an animated TV series based on the book. Thunderbird also began development on the spooky children’s anthology television series Eerie, based on the successful book series Eerie Elementary written by Max Brallier under the pen name Jack Chabert.

Thunderbird Factual

During the period, Thunderbird’s factual division, Great Pacific Media, premiered Season 7 of its Highway Thru Hell television series on Discovery Canada, with 12 of the 17 episodes being delivered in the quarter. The Company also commenced production of second seasons of its two lifestyle series “Worst to First” and “Save My Reno” for HGTV Canada, and continued principal photography of the premier season of Arctic Haulers, scheduled to air on CBC in 2019.

Thunderbird Scripted

Thunderbird’s scripted division (Thunderbird Productions) completed production of the 3rd season of its award-winning comedy series Kim’s Convenience during the quarter. Kim’s Convenience airs on CBC in Canada and is available on Netflix world wide.

This year Thunderbird decided to not renew its multi season service agreement to produce the big budget live action television series Man in the High Castle for Amazon Prime. This decision will allow the Company to re-direct valuable corporate resources to the creation of owned IP programming and other core operations. This resulted in a reduction of revenues for the quarter of $32 million, with negligible impact on EBITDA. Thunderbird intends to continue to seek out unique and compelling intellectual property for exploitation and to expand its production capacity to meet building demand. At the same time, the Company will continue to assess strategic M&A opportunities.

Investor Relations Contract

Thunderbird advises that it has entered into an investor relations agreement (the “IR Agreement”) with LF Consulting Corp. (“LFC”) and its principals Lucas Cahill and Frederic Leigh, a British Columbia based consulting company with offices at 3123 – 595 Burrard Street, Vancouver BC V7X 1J1. The initial term of the IR Agreement is to provide investor relations services with the general objective of expanding interest and awareness of existing and potential investors and the financial community for one year and provides for cash compensation of $8,000 per month. In connection with the IR Agreement, the Company has granted an aggregate of 90,000 stock options pursuant to the Company’s stock option plan, with an exercise price of $2.00 per share, exercisable for a period of five years from the date of grant, vesting as follows: 25% three months after the date of grant; 25% six months after the date of grant; 25% nine months after the date of grant; and 25% twelve months after the date of grant. The IR agreement is subject to the approval of the TSX Venture Exchange.

(1) Adjusted EBITDA is EBITDA excluding certain items to better analyze trends in performance and after non-controlling interests. These adjustments result in a truer economic representation on a comparative basis. Adjusted EBITDA includes the add-backs made to calculate the Adjusted Net Income and additionally add-backs for interest expense, net of interest income, depreciation and any non-cash amortization (to the extent not added in to Adjusted Net Income). See “Non-IFRS Measures” and “Forward-Looking Statements” below in this press release.

About Thunderbird Entertainment Group Inc.
Thunderbird Entertainment Group is a Vancouver-based, global multiplatform entertainment company with offices in Vancouver, Los Angeles, Toronto, Ottawa and London. Thunderbird creates award-winning scripted, unscripted and animated programming for the world’s leading digital platforms, as well as Canadian and International broadcasters. Thunderbird’s vision is to produce high quality, socially responsible content that makes the world a better place.

On Behalf of Thunderbird Entertainment Group Inc.

“Jennifer Twiner McCarron ”
Chief Executive Officer

For information on Thunderbird and to subscribe to the Company’s investor list for news updates, go to www.thunderbird.tv. For further information, please contact:

The TSX-V has in no way passed upon the merits of the Arrangement and has neither approved nor disapproved the contents of this press release. Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility of the adequacy or accuracy of this release.

Cautionary Statement Regarding Forward-Looking Information

This news release includes certain “forward-looking statements” under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, statements with respect to the Company’s objectives, goals or future plans and the business and operations of the Company. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic and social uncertainties; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; those additional risks set out in the Company’s Filing Statement and other public documents filed on SEDAR at www.sedar.com; and other matters discussed in this news release. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, the Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Non-IFRS Measures

This news release contains references to certain measures that do not have a standardized meaning under International Financial Reporting Standards (“IFRS”) as prescribed by the International Accounting Standards Board and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing a further understanding of operations from management’s perspective. Accordingly, non IFRS measures should not be considered in isolation nor as a substitute for analysis of financial information reported under IFRS. The Company believes that non-IFRS measures, specifically EBITDA and Adjusted EBITDA, are frequently used by securities analysts, investors and other interested parties as measures of financial performance and to provide supplemental measures of operating performance and thus highlight trends that may not otherwise be apparent when relying solely on IFRS financial measures.