Thunderbird Entertainment Group Inc.

Thank you for joining Thunderbird Entertainment Group's fiscal 2023 Q2 results call. Glenn Axelrod from Bristol Capital will read the forward-looking statements.

Thank you for joining us, everybody. We are here to provide a corporate update and report on Thunderbird Entertainment Group's fiscal 2023 Q2 results, which ended December 31, 2022. Speaking on today's call are Ms. Jennifer Twyner McCarran, Thunderbird CEO, and Ms. Barb Harwood, Thunderbird CFO. Ms. McCarran will provide a strategic overview of Thunderbird Entertainment Group, and Ms. Harwood will review the company's Q2 2023 financials. Following the corporate update and financial review, the call will open for a question and answer session. If you'd like to ask a question during this time, simply press star, then number one on your telephone keypad. Alternatively, if you'd like to 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'd 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 the applicable securities laws. Forward-looking statements and information discussed on this conference call include, but are not limited to, statements with respect to commencing a strategic analysis, the success of certain productions, anticipated adjustments to EBITDA, the robustness of the production development, slate projections regarding adding 143 million new subscriptions this year, timing for announcing a broadcast partner for the Tokidoki series, the future potential of the current productions, the company's objectives, goals, or future plans, the likelihood the company will continue to get bigger and better, 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. And those additional risks set out in the company's management discussion and analysis for the years ended June 30th, 2022 and 2021, filed October 19th, 2022, and other public documents filed in CDAR at www.cdar.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 as of 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-linked statements, whether as a result of new information, future events, or otherwise. For your convenience, the MD&A, the unaudited financial statements for Q2 2023, which ended December 31st, 2022, and the related news release are filed on CDAR, 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 archive will be available on the company's website at www.thunderbird.tv. Following today's call, please note that Thunderbird reports in Canadian dollars unless otherwise stated. Ms. McCarran will now provide the corporate update.

Thank you so much, Glenn. My name is Jennifer Twiner McCarron, and I am the CEO and chair of Thunderbird Entertainment Group. On behalf of the company, I'd like to thank you for joining today's call to discuss our Q2 2023 results, which ended December 31st, 2022. Thunderbird CFO Barb Harwood is with me, and we appreciate you joining us. Once Barb and I are finished, we will be happy to answer all questions. I'll start today by welcoming new directors Asha Danier and Mark Trachok to our board. I am beyond excited to work with them and look forward to their input, along with previous valued board members, Azeem Jamal, Jerome Levy, and Linda Michelson. As previously announced, we are moving forward with a formal exploration of strategic alternatives for Thunderbird that will both capitalize on the significant value of our premium quality content and identify key opportunities for delivering sustainable long-term growth. As we embark upon this process, the Board is committed to working closely together alongside our outside advisors to conduct a comprehensive evaluation of opportunities while maintaining a focus on maximizing value to Thunderbird shareholders. I am confident that this important strategic review will position Thunderbird on the best possible trajectory to achieving our goal of becoming the next major global content studio. We are pleased that the proxy contest is behind us and to be moving forward as an independent board working for all stakeholders. Today, I will talk about Thunderbird's bright future and share high-level visibility into the remainder of the year, as well as into fiscal 24 and 25. I will also provide the Q2 corporate update. From my vantage point, there continues to be many exciting productions and announcements on the horizon. For example, we're making huge strides forward with our IP strategy and recently started production on the first 26 half-hour episodes of the season of the children's series Murmacorno, which is inspired by Tokidoki's hit toy brand of the same name. This company is IP and we are working in partnership with Tokidoki. We look forward to sharing our broadcast partners for the series and more details about this amazing production in the coming months. We also have many forthcoming announcements that we are equally excited to share with merchandise and consumer products opportunities. Add to this that our teams attended RealScreen and KidsScreen just recently and many new pieces of IP were pitched and met with great excitement. Honestly, we've had more movement with our IP success in the last six months than at any other time in our company history. The future of Thunderbird is so bright. However, our short-term numbers will reflect business uncertainty stemming from the proxy contest as well as associated expenses. This is coupled specifically with overall shifts within the industry as major players, many of whom are our clients and buyers, work to balance their businesses in the new era of streaming. As a result, timeframes for several of our productions have shifted from fiscal year 23 to fiscal year 24 and 25. While all of this work remains with Thunderbird and we have not lost any planned work, the second half of fiscal year 23 is no longer expected to be our strongest. We are currently anticipating adjusted EBITDA to be down for fiscal year 23 compared to fiscal year 22. This is not the outcome we had initially anticipated. However, it is important to note that our pipeline remains extremely strong with a range of diverse content and Thunderbird is incredibly well positioned for the future. Booked growth in 24 and 25 is incredibly robust, and we anticipate sizable double-digit growth in adjusted EBITDA, which includes several owned IP reductions with adjacent merchandise opportunities coming to fruition. Gross margin also improves in fiscal year 24 and 25, with impacts both positive and negative, including but not limited to overall economic recovery, timing factors from reversals of production delays of fiscal 23, payoffs from fiscal 22-23 build year initiatives, and IP timing of production and delivery. Barbin will discuss the numbers in more detail in a moment, and during the Q&A, we're happy to answer all of your questions. For those following the industry closely, 2023 is being described as a year of industry-wide cooling. Uncertainty is impacting many areas of the industry. And after experiencing unprecedented rates of growth during the pandemic, streaming growth has slowed. While this is true, it's also important to note that subscriptions are still increasing and the industry is still experiencing growth. Almeda is projecting the addition of 143 million new subscriptions this year in the U.S. alone, which is a mature SVOD market. and there will almost be 40 million new SVOD subscriptions worldwide. And if we take a deeper dive by region and streamer, we see incredible growth taking place overseas, with Europe, Middle East, and Africa becoming Netflix's biggest regions, with 76.7 million subscribers, overtopping U.S. and Canada. This is an incredible opportunity for our company. To retain and grow subscriptions, even at an adjusted pace, the major streaming companies require quality content. So the need for quality content hasn't changed and the demand for premium work remains extremely strong. That's where Thunderbird comes in with the company's trusted relationships and stellar reputation for delivering A++ content. Buyers are looking for premium projects across the board. Take Disney, for example. Disney's cutting costs and restructuring. CEO Bob Iger says, stated these decisions were made to return creativity to the center of the company, increase accountability, improve results, and ensure the quality of content and experiences. Iger underscored the importance of streaming to Disney's future and further highlighted that Disney's focus will be more on family and children's entertainment, pulling back from generic general audience programming. Disney's business decisions create more opportunity for Thunderbirds. They will be producing less work internally and will be partnering more with companies like ours to handle everything from start to finish, which fits nicely with our partner-managed pipeline. Add to this that working in Canada provides great tax credits, making high-end productions more affordable. Streaming is here to stay, and the shifts in the industry offer more opportunity for Thunderbird to shine and do what we do best by keeping our focus on quality as our North Star, Thunderbird will remain in great steed. And I can confidently share our talented teams are more dedicated than ever and doubling down to produce the quality content we are renowned for so we can continue to be the studio of choice. And our quality content is being recognized on many levels and in different ways. Reginald the Vampire, a fully-owned scripted series, Best star Spider-Man's Jacob Batalan was recently renewed for season two by Syfy. Dead Man's Curse, an unscripted global production following four explorers as they search for gold, ranked as one of the top ten of Canadian original series across specialty television this fall. Pinecone and Pony, which is based on the best-selling author Kate Beaton's children's book, was recently nominated for a 2023 GLAAD Media Award in the Outstanding Children's Programming category. And Princess Power, an animated series inspired by Savannah Guthrie and Ali Oppenheim's New York Times bestselling children's book, launched on Netflix worldwide, receiving significant media coverage. In the days following its premiere, it ranked number eight on the Netflix Kids chart in the U.S. Thunderbird has also received nine nominations from the Canadian Screen Awards. From Dr. Savannah, Wild Rose Vet for Best Lifestyle Program or Series to Pinecone and Pony for Best Direction, Animation to Styled for Best Host Lifestyle, Nicole Babb and Caffrey Van Horn. And our company also continues to turn heads. Business in Vancouver recently recognized Atomic with a BC Export Award in the Digital and Media Entertainment category. Our COO, Sarah Nathanson, is a nominee for the YWCA Women of Distinction Award for her commitment to identifying new initiatives to strategically support Thunderbird's growth, including a robust environment, social, and governance action plan. And Thunderbird was listed this week as one of 2023 TSXV Top 50 Performing Companies. This is just a snapshot of the team's six successes. I could not be more proud of every single employee. Every project that is renewed, every partnership that is solidified, every award that we receive, all of these reaffirm our belief that Thunderbird is the best at what we do. I'm excited to share more updates after Barb has presented the financial update. Thank you so much, and over to you, Barb.