Results for the first half of 2020-2021 Paris Bourse: ATA

Results for the first half of 2020-2021
Press release – Paris, France February 15, 2021 at 9:00 p.m.

Growth in gaming activity over the period, but licensing activity impacted by Covid-19

With a very successful launch at the end of 2020, the Atari VCS will have a positive contribution in the second half of the 2020-2021 fiscal year

The Atari blockchain ecosystem starts off on solid ground

Atari anticipates a positive result for 2020-2021

The first half of the 2020-2021 fiscal year ended on September 30, 2020 and the provisional results were reviewed by the Board of Directors on February 12, 2021. The audit review of the consolidated accounts is being finalized.

Highlights of the first half of 2020-2021 (from April 1, 2020 to September 30, 2020):

• Growth in the gaming industry
• Licensing activities impacted by Covid-19
• First deliveries and expected revenues of the Atari VCS have been postponed to the second half of 2020-2021 due to the global pandemic
• April 2020: Official launch of the Atari blockchain project and first private sales of the Atari Token
• July 2020: Distribution agreements for the Atari VCS with Bluemouth, an Australian distributor, and receipt of the first orders for this territory
• August 2020: Distribution agreements for the Atari VCS with Microcenter, an American distributor, and receipt of the first orders from this customer (VCS is already distributed by Gamestop, Walmart.com and being listed at Best Buy)

Highlights of the second half of 2020-2021 (October 1, 2020 to March 30, 2021):

• Atari games: Gradual release of the Beat Legend and Atari Combat mobile games
• Atari VCS: First deliveries made in December 2020, with a gradual ramp-up over calendar year 2021. Initial customer feedback largely positive.
• Atari / Token Atari Partners: Public sale and successful listing of the Atari Token Launch of the first virtual worlds with the Sandbox, Decentral and Rapid increase in the visibility of the Atari Token First tests of the Atari Casino on the blockchain First sales of non-fungible tokens with WAX
• December 2020 : Capital increase of 5.81 million euros by private placement
• February 2021: Sale of 14,345,000 Animoca shares for approximately US $ 1.2 million. The Group is in the process of selling the remaining 9,580,000 Animoca shares in calendar year 2021.

Results for the first half of 2020-2021

IFRS, in M	2020/2021 (April Sept.)	2019/2020 (April Sept.)	Variation %
Turnover in millions of euros	7.8	10.7	-26.96%
Cost of sales	(1.5)	(1.3)
GROSS MARGIN	6.3	9.4	-32.9%
% of sales	80.6%	87.7%
Research and development costs	(4.0)	(4.6)
Marketing and sales costs	(1.5)	(2.0)
General and administrative expenses	(2.0)	(2.1)
Other operating income and expenses	0.0	–
CURRENT OPERATING INCOME	(1.2)	0.7	-264%
Other operating income and expenses	–	(0.0)
Share of net operating income of associates	0.0
OPERATING INCOME	(1.1)	0.7	-264%
Cost of financial debt	(0.1)	(0.0)
Other financial income and expenses	(0.3)	(0.5)
Income tax	(0.0)	(0.0)
NET INCOME OF CONSOLIDATED ENTITIES	(1.5)	0.1
Share attributable to the Group	(1.4)	0.1
Share attributable to minority interests	(0.1)	(0.0)

The Atari Group’s strategy is aimed at developing the game catalog with a strong specialization on mobile platforms and simulation / strategy games (Atari games) and on real money games (Atari Casino), the development of the Atari VCS (Atari VCS) and related projects, particularly in the blockchain space (Atari Partners).

For the first semester ended September 30, 2020 (April 1 to September 30, 2020), the Atari Group achieved a turnover of 7.8M against 10.7M for the same semester of the previous fiscal year. The growth in the games business was overshadowed by the decline in licensing activity and the postponement of the launch of Atari VCS to the second half of the year, both activities having faced logistical problems (sourcing and transport). ) caused by the COVID 19 crisis.

The Atari VCS did not contribute to the first half results as machine deliveries started after September 30, 2020. Following the launch in December 2020, customer feedback to date has been extremely positive.

The activity linked to the Atari Token started during this period and generated 0.3 M of turnover and 0.2 M of deferred turnover. The positive reception of the Atari Token by users, the rapid development of use cases (see atarichain.com) and the evolution of the Atari Token price on exchanges attest to the very successful start-up and growth potential of this activity.

The gross margin level was 80.6% of sales over the period compared to 87.7% for the previous period.

The main expense items are in line with the Group’s expectations and reflect the efforts made to invest in its 4 businesses. R&D costs still cover investments in Atari and RollerCoaster Tycoon franchises, with a strong specialization in mobile platforms and simulation / strategy games. Marketing and sales costs amounted to 1.5 million for the first half of the 2020-2021 fiscal year, mainly supporting the games activity over the period. General and administrative expenses amounted to 2.0 million and are stable compared to the previous period, the Group thus generated a current operating income of -1.1 million in the first half of 2020-2021, against +0.7 M in the first half of 2019 -2020.

The other financial income and expenses are mainly linked to a fair value adjustment of Animoca shares, resulting in a net result of consolidated entities of -1.5M.

Balance sheet at September 30, 2020

ASSETS (in millions of euros)	30.09.2020	03.31.2020
Intangible assets	17.0	17.8
Tangible fixed assets	0.0	0.0
Rights to use assets related to leases	2.0	2.3
Non-current financial assets	13.6	15.7
Deferred tax assets	2.0	2.1
NON-CURRENT ASSETS	34.6	38.0
Inventories	2.3	0.6
Commercial debt	4.2	2.8
Current tax assets	0.0	0.0
Other current assets	0.9	0.7
Cash and cash equivalents	1.2	1.8
Assets held for sale	1.7	–
CURRENT ASSETS	10.4	5.8
TOTAL ASSETS	45.0	43.8

EQUITY AND LIABILITIES (in millions of euros)	30.09.2020	03.31.2020
Capital city	2.7	2.7
Premium sharing	12.2	11.0
Consolidated reserves	13.3	12.5
Net income Group share	(1.4)	2.3
GROUP SHAREHOLDERS ‘EQUITY	26.9	28.5
Minority interests	(0.1)	(0.4)
EQUITY OF CONSOLIDATED ENTITIES	26.8	28.1
Provisions for non-current risks and losses	0.1	0.0
Non-current financial liabilities	–	0.9
Deferred tax liabilities	1.8	2.1
Other non-current liabilities	0.7	0.8
NON-CURRENT LIABILITIES	2.6	3.7
Provisions for current risks and losses	–	0.1
Current financial liabilities	1.2	0.6
Current rental debts	0.3	0.3
Trade debts	8.9	5.7
Current tax liabilities	–	0.0
Other current liabilities	5.2	5.2
CURRENT LIABILITIES	15.6	11.9
TOTAL EQUITY AND LIABILITIES	45.0	43.8

Non-current financial assets include 11.9 million of trade receivables at more than one year, compared to 12.1 million at March 31, 2020.

Other current liabilities include in particular 2.5 million deferred income for Atari VCS pre-orders. This amount will be recognized as revenue in the second half of the 2020-2021 fiscal year.

Outlook 2020/2021

The Group is now targeting a positive net result for fiscal year 2020-2021 (compared to an increase in profitability compared to the previous fiscal year), despite the delays in licensing and launching the VCS activities caused by the global pandemic. . Achieving this objective assumes the delivery before March 31, 2021 of the VCS units produced, as well as the finalization of license agreements in the second half of the 2020-2021 fiscal year currently under negotiation. These elements could however be postponed to the following quarter given the persistent health crisis and the risks inherent in any negotiation process.

The second semester will be marked by several important projects, in particular:

ATARI GAMES

• Free version of the Beat Legend game released and progressive global launch
• Public test of Atari Combat in various selected countries
• Continuation of licensing activities, in particular for home arcades

ATARI CASINO

Public test of Atari Casino on the blockchain

ATARI VCS

• First deliveries made in December 2020
• Acceleration of production to process orders received directly (Atari VCS online sales) or via distributors, deliveries made before March 31, 2021 contributing to sales for the year

ATARI PARTNERS

• Public sale and successful registration of the Atari Token
• Launch of Atari headquarters in Decentraland
• Continued development in the Sandbox, new test sales on WAX

Warning:
The realization of plans, their operational budget and their financing plan are inherently uncertain and failure to meet these assumptions may have an impact on their value.

About Atari:
Atari, made up of Atari SA and its subsidiaries, is a global interactive and multiplatform entertainment licensing group. A true video game innovator, founded in 1972, Atari owns and / or manages a portfolio of more than 200 games and franchises, including world famous brands such as Asteroids, Centipede, Missile Command and Pong. From this important portfolio of intellectual properties, Atari offers engaging online games for smartphones, tablets and other connected devices. Atari also develops and distributes interactive entertainment for Microsoft, Sony and Nintendo game consoles. Atari also operates its brand and franchises with licensing agreements through other media, merchandise and publications. For more information: www.atari.com and www.atari-investisseurs.fr/en/. Atari shares are listed in France on Euronext Paris (Compartment C, ISIN Code FR0010478248, Ticker ATA), in Sweden on Nasdaq First North Growth Market as Swedish certificates of deposit (ISIN Code SE0012481232, Ticker ATA SDB) and are eligible for the Nasdaq International program in the United States (OTC – Ticker PONGF).

Contacts

Atari – Philippe Mularski, CFO Calyptus – Marie Calleux
Tel +33 1 83 64 61 57 – [email protected] Phone + 33 1 53 65 68 68 [email protected]

Redeye AB (Certified Consultant) Catharina Prmhall
Phone: +46 8 121 576 90 [email protected]

This is information that Atari SA. is obliged to make public in accordance with the EU Market Abuse Regulation. The information was submitted for publication, through the above mentioned contact persons, on February 15, 2021 at 9:00 p.m. CET.

ANNEX

Net cash position at September 30, 2020

Net cash position (in millions of euros)	30.09.2020	03.31.2020
Legal Officer (IFRS 9)	–	(0.9)
Not current	–	(0.9)
2003-2020 OCEANEs	–	(0.6)
Legal Officer (IFRS 9)	(1.2)	–
Paycheque Protection Program Loan	(0.3)	–
Current	(1.5)	(0.6)
Non-cash legalistic reprocessing (1)	1.2	0.9
Gross financial debt	(0.3)	(0.6)
Cash and cash equivalents	1.2	1.8
NET CASH POSITION	0.9	1.1

(1) The gross financial debt is restated for the Legalist debt, which was recognized as a financial liability under IFRS 9 but will be permanently retained by the Group.

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