Reply To: Real Luck Group

Nick Hargrave

Valuation assumptions: In the 9 months to Sep-22 the company has expenses of c.C$6m, which equates to c.C$8m on an annualised basis, including some exceptional consulting and professional fees. With the company expecting to breakeven on a monthly basis in H2 23 and given its rate of top line growth, it doesn’t feel unreasonable to assume that the business can easily scale to C$2.5m EBIT or C$1.5m in a risk scenario in fairly short order. We apply multiples of 12x and 8x in the thesis and risk scenarios respectively. We of course believe that the company has the potential to greatly exceed these numbers, but even at these levels we highlight how absurd we think the current valuation is if you believe in the business model and the management team.