Thunderbird Entertainment Group Inc.

Thank you for joining us. We are here to provide a corporate update and report on Thunderbird Entertainment's group fiscal 2023 Q1 results, which ended September 30th, 2022. Speaking on today's call is our Ms. Jennifer Twyner McCarron, Thunderbird's CEO, and Ms. Barb Harwood, Thunderbird's CFO. Ms. Twyner McCarron will provide a strategic overview of Thunderbird's entertainment group and Ms. Harwood will review the company's Q1 2023 financials. Following the corporate update and financial review, the call will open for questions and answer sessions. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. Alternatively, if you have any questions, you can call 1-604-683-3555 or email investors at thunderbird.tv and the company will follow up directly after the call. At this time, all lines have been placed on mute to prevent any background noise. I like to remind everyone that certain statements made on today's call will be forward looking and constitute forward looking statements or forward looking information under applicable securities law. Following Forward-looking statements and information discussed on the conference call include, but are not limited to, statements with respect to the success of certain productions, the robustness of the production development slate, the ability of the company to maintain the infrastructure, and people to capitalize and exploit future IP opportunities. The future potential of the current production, the company's objectives, goals, or future plans, the likelihood that the company will continue to get bigger and better, and the business and operations of the company. Forward-looking statements are necessarily based on the number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risk, uncertainties, and other factors which may cause actual results and future events that 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. And those additional risks set out in the company's management discussion and analytics. For the years ended June 30th, 2022 and 2021, filed October 19th, 2022, and other public documents filed on CDARS at www.cidar.com. Although the company believes that the assumptions and factors used in preparing these forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply at the date of this presentation, and no assurance can be given that such events will occur in the disclosed timeframes or at all. Except where required by law, the company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For your convenience, the MD&A and unaudited financial statements for Q1 2023, which ended on September 30th, 2022, and related news released are filed on SADAR and are available online under the investor section of our website. We do not expect to update forward-looking statements continually as conditions change. This conference call is being webcast live and the archives will be available on the company's website at www.thunderbird.tv following today's call. Please note that Thunderbird reports in Canadian dollars on less otherwise stated. Ms. Twyner Cannon will now provide the corporate update.

Hi, thank you so much. My name is Jennifer Twyner McCarron, and I'm the CEO of Thunderbird Entertainment Group. On behalf of the company, I'd like to thank you for joining today's call to discuss our Q1 2023 results, which ended September 30th, 2022. Thunderbird CFO Barb Harwood is with me, and we appreciate you joining us. Once Barb and I are finished, we'll be more than happy to answer your questions. Please note that we will limit questions today, and while we are prepared to answer any questions about the quarter and our outlook, we will not answer any questions about the proxy contest. As you know, we have postponed our annual general meeting, which was to have taken place on December 6, 2022, for everyone to properly consider the announcement by VOSS around its nomination of a competing slate of directors for election to Thunderbirds board. The idea is that this will allow time for all shareholders to have all of the information required to allow them to assess the merits and qualifications of all board director nominees before going to vote. As Barb will discuss shortly, our revenue grew substantially in the first quarter from a year earlier. This is on top of a solid 34% increase in the fiscal year ending June 30th, 2022 from a year earlier. With regards to the year, overall Q3 and Q4 of this fiscal year are forecasted to be our strongest quarters. When Barb is finished with the financial update, I will share updates that continue to build on the company's established track record of successful programming. As the company's CEO, I truly consider it a privilege and also my responsibility to work with and for all of Thunderbird stakeholders, employees, leadership, all clients, all partners, and our shareholders. While the company has entered into a public proxy fight, unfortunately, I do want to emphasize that I remain so committed to leading Thunderbird's growing team of 1,400 employees across four cities with the same enthusiasm in our efforts to create meaningful content that informs, inspires, educates, and provides, hopefully, a happy escape for people, now that's needed more than ever. We are continuing to focus on running a very healthy, growing company, and demand for Thunderbird's A-plus, high-quality content remains higher than ever. Over to you, Barb.

Good morning and afternoon, everyone, depending on where you are, and thanks for joining us today. Here are the highlights of Thunderbirds Q1 2023. As Jen mentioned, the company recognized revenue of $43.7 million in the three-month end of September 30, 2022, an increase of 25%, or $8.6 million, over the comparative quarter. Both the number of episodes of IP projects delivered and recognized and the number and magnitude of production services projects increased quarter over quarter 45 total half hours of ip deliveries in the current quarter compared to 32 total half hours in the prior year's first quarter production services revenue for q1 2023 increased by 19 or 4.7 million over the comparative quarter due to an increase in the number and size of contracts This revenue consists primarily of animation production services, which experience continued growth. Projects with significant revenues during the quarter include Princess Power and Marvel Spidey and His Amazing Friends. Licensing and distribution revenue, which is our owned IP, increased by 47%, 4.2 million, for Q1 23 over Q1 22. mainly due to the delivery of six episodes of the scripted series, Reginald the Vampire, seven episodes of the scripted series, Strays, season two, and 13 episodes of three unscripted series, Gut Job, Dead Man's Curse, both in their first season and Highway Through Hell, season 11, in the current quarter. In the comparative quarter, 10 episodes of season one of Strays and 11 episodes of Highway Through Hell, season 10, were delivered. Library sales, which are both sales of Thunderbird's owned IP after the initial window, and third-party distribution, remained consistent for the three months ended September 30, 2022, compared to the comparative quarter. Gross margin, which represents total revenue less total direct operating costs, was $9.5 million for Q1, 2023, compared to $10.2 million for the comparative quarter, a $700,000 decrease. Gross margin percentages for Q123 was 26.6% compared to 29.2% for the comparative quarter. The decrease in gross margin and gross margin percentage is attributable to the different genres of IP series recognized in the quarter, which vary in their gross margin profiles, as well as timing of production service scheduling and the jurisdiction where the service work is being undertaken. Typically, the margins on production service work are less at the beginning and end of a series cycle when there is less labor-driven tax credits to accrue against the production costs. Adjusted EBITDA decreased 35% from $6.3 million to $4.1 million quarter over quarter. The decrease is attributable to the recognition timing of IP series mentioned before and production service scheduling mentioned with respect to gross margin. Additionally, With talent at a premium, the company continues to invest in retention and hiring of key employees and software and technology upgrades to deliver industry-leading quality programming that will further facilitate long-term growth. And now Jen will take you through some corporate updates.