Allied Esports Entertainment, Inc.

Thank you for standing by. This is the conference operator. Welcome to the Allied Esports Entertainment first quarter 2021 earnings conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Lester Grayson, Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon, and welcome to the Allied Esports Entertainment 2021 First Quarter Results Conference Call. Speaking on the call today is Allied Esports Entertainment's Chief Executive Officer, Frank Ng, and Chief Financial Officer, Tony Hung. The company's President and longtime World Poker Tour CEO, Adam Pliska, and Judd Hannigan, who's leading the allied esports operations, are also available for the question and answer session. Before I turn the call over to management, please remember that our prepared remarks and responses to questions may contain forward-looking statements. Words such as may, will, expect, intend, plan, believe, seek, could, estimate, judgment, targeting, should, anticipate, goal, and variations of these words and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from those implied by such forward-looking statements due to a variety of factors discussed in the company's public filing, including the risk factors discussed in documents filed with the Securities and Exchange Commission. Although the company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurances that the expectations will be attained. The company undertakes no obligation to update any forelooking statement, whether as a result of new information, future events, or otherwise. In addition, certain of the financial information presented in this call represents non-GAAP financial measures. The company's earnings release, which was issued this afternoon and is available on the company's website, presents definitions of such non-GAAP financial measures reconciliations to the appropriate gap measure, and an explanation of why the company believes such non-gap financial measures are useful to investors. With that, it's now my pleasure to turn the call over to Allied Esports Entertainment's CEO, Frank Ng. Frank.

Thank you, Lafayette, and thank you, everyone, for joining us this afternoon. My remarks today will focus on an overview of the key highlights from this past quarter in our ongoing efforts to grow the business and this the current COVID-19 pandemic. Tony Hung, our Chief Financial Officer, will follow with additional details on our first quarter financial performance. Similar to last quarter, the financials we are reporting today pertain to our continuing operations, which includes our Ally Esports business and the corporate top code AESC expenses. World Poker Tour, or WPT, is in the process of being sold to Element Partners under our existing stock purchase agreement, subject to our stockholders' approval. Therefore, WPT's results continue to be presented as discontinued operations for the first quarter and the comparable period for the prior year. I will provide an update on the pending WPT sale transaction in more detail shortly, and Tony will go through WPT's financial results and operational highlights in his remarks. And finally, since it has been just seven weeks since our last earnings call, I intend to keep my prepared remarks free today and just focus on the primary highlights. With that, let's move on to an overview of our results for the first quarter of 2021. Overall, I am pleased with the first quarter performance of our e-force business despite the headwinds and operational constraints we continue to face within the in-person pillar of our business as we slowly emerge from the COVID-19 pandemic. While in-person events were the primary growth drivers of our esports revenue prior to the pandemic, I have been impressed with our team's ability to pivot towards remote content creation and online events and adapt to the challenges posed by the pandemic. In doing so, We have made good progress over the last several quarters building out capabilities for the multi-platform content pillar of our esports business, which has culminated in recent announcements this month of a new nine-month esports tournament program with Tencent's streaming platform, Trovo, as well as our first distribution partnership with MUX IP, which will result in the airing of hundreds of hours of our content library on OTT platforms. In addition, As Tony will discuss further in his remarks, we further reduced our debt burden by paying off our convertible debt balance and, in turn, significantly enhanced our capital structure while improving our financial flexibility and liquidity position. As we look ahead, we believe that the strategic pivot we make accelerates our ability to further monetize aspects of the esports ecosystem and take advantage of significant growth opportunities as the economy continues to improve and the environment normalizes. Now, let's turn to our first quarter operational highlights for our esports business. We were very pleased to announce the renewal of our naming rights partnership with HyperX, for our global flagship property at the Luxor Hotel and Casino in Las Vegas. As part of the renewal agreement, HyperX will continue to receive prominent branding and signage inside and outside of the venue, as well as across all arena promotions, content, and social media platforms. HyperX and Ally Esports will continue to partner on a variety of co-branded experiences and events at our flagship arena focus on growing our respective gaming and esports communities. The Sports Business Journal has referred to HyperX Esports Arena Las Vegas as the most prominent physical asset in all of esports, and we are thrilled to continue to have our flagship property associate with the leading peripherals brand in gaming. In the first quarter, Ally Esports produced 36 events, including 33 proprietary events and three third-party productions across our North American and European business units. Despite COVID-19 social distancing and capacity restrictions during the period, we continued to experience strong demand for our tournament offerings with more than 1,700 players competing in Ally Esports tournaments in arena online, and on our truck. Although the company's mall expansion plans with Simon Properties and Brookfield Property Partners continue to remain on hold during the pandemic, the Ally Esports Truck made its 2021 debut in March. We took our weekly Saturday night Speedway Tournament featuring Mario Kart on the road to Brookfield Property's first Colony Mall in Sugar Land, Texas. The three-day event was very well received and served as an attraction for more goers and esports enthusiasts in the Houston metropolitan area. The champion of that event received a trip to compete at HyperX Esports Arena for the 100th edition of Ally Esports Saturday Night Speedway, which was held last week. The outdoor tournament and broadcast was the truck's first event outside of Nevada and California since the onset of the pandemic. Taking Saturday Night Speedway on the road and bringing esports events to the public environment as we emerge from the pandemic has sparked increased interest in the role online esports can play in creating live experiences again for our partners. We also announced our next edition of the Legends Series, which was held in early April and was the first esports tournament production featuring live animated commentators in partnership with motion capture technology leader XSENSE. The event deployed a three-day, 14-winner-take-all format, which included wagering opportunities for batters. Third-party events in a quarter were led by FACETS, and its use of HyperX Esports Arena Las Vegas as a COVID-19 safe bubble environment for its production of the Rainbow Six Siege North America League. FACEIT's use of our facilities for this purpose began in Q4 2020 and has continued for consecutive seasons of the R6 North America League into Q2. I am very encouraged that with the widespread distribution of vaccinations, we began to see an increase in foot traffic in Las Vegas and believe the COVID-19 pandemic recovery is well underway. Importantly, restrictions are also easing in Nevada where on May 1st, Clark County decreased social distancing requirements to three feet from six feet and increased permitted indoor capacity to 80%. The county has stated that these restrictions will be completely lifted once 60% of the county's population has received at least one dose of a COVID-19 vaccine. These efforts and those around the world are creating a foundation for the resurgence of live events. This bodes well for our in-person POA, and we are starting to see an uptick in event bookings, and calendar holds in the second half of the year. As we continue to adjust to and wait for the ongoing headwinds for in-person events to pass, our efforts are focused on expediting the monetization of the multi-platform content pillar of our esports business model. In the first quarter, our 24-hour content strategy generated 4.7 million live views on live streaming platforms, an increase of 59% compared to the fourth quarter of 2020. In addition, we increased followers by 21% across our Twitch and YouTube channels. At the end of the first quarter, Ally Esports ranked in the top 0.03% of all Twitch English channels, according to twitchtracker.com, which ranks channels based on average viewers, followers, views, and stream time during the most recent 30-day period. We believe the steps taken to execute our 24-hour content channel strategy, along with the increased viewership it has garnered, has positioned us for additional distribution opportunities. Last week, we announced a distribution agreement with Muck IP to distribute our esports content to OTP streaming platforms around the world, including Switch TV, River TV, Plax, Zot, and Sports Tribal. We believe this is the beginning of additional distribution opportunities for our content library, and we'll see over 250 hours of our esports tournament content air on these platforms. I'll believe is the return of a normalized world and the resurgence of live events is at its early stages. But we are seeing positive market indicators for strong recovery in the second half of this year. We are optimistic that we will soon be operating in an environment where the company's foundational strides made on the multi-platform content pillar of our business will come together alongside with the resurgence of live events and the return of maximum capacity at our various properties. Before turning it over to Tony to discuss our first quarter financials in more detail, I would like to provide a quick update on our pending transaction to sell our Whirlpool Couture business to Element Partners, LLC. After multiple competing bids for WPT between Element Partners and Barley's corporations throughout much of the first quarter, on March 30, 2021, we announced that Element agreed to purchase for $105 million the World Poker Tour, and the parties amended their existing purchase agreement to reflect the updated terms. To date, Barley's has not countered the latest offer and we are proceeding with the sale of WPT to Element. To this end, a preliminary proxy statement detailing the transaction and seeking the approval of the transaction by our stockholders was filed with the FCC on May 14th. Our board of directors will evaluate any additional proposal in due course in compliance with the terms of the stock purchase agreement with Element partners. At this time, we believe subject to customary closing conditions that we will close the transaction in late second quarter or early third quarter of 2021. With that, I would like to turn the call over to Tony Hung, our CFO, for an update on our first quarter financial results. Tony.