MGO Global Inc.

Good afternoon, everyone, and thank you for participating in MGO Global's webcast. Joining us from MGO are Maximiliano Ojeda, co-founder, chairman, and CEO of MGO's Chief Financial Officer, Vincent Adamanelli. Before I turn the floor over to them, I remind you that today's call, statements that are not historical facts, including any projections, statements regarding future events or future financial performance or statements of intent or belief, are forward-looking statements and are covered by the safe harbor disclaimers contained in the company's public filing with the SEC. Actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. With that said, I would now like to introduce Max. Max, the floor is yours.

Thank you, Kat, and thank you everyone who is listening in on the webcast. On behalf of everyone at MGO Global, we sincerely appreciate your interest in our company and hope we succeed today at providing you with meaningful insights into our recently reported financial performance for the year ended December 31st, 2022, and to provide you with some perspective on what exciting things might be ahead for us as we progress through 2023. I would like to begin today's discussion beginning with having Vincent Dottomanelli providing a summary of MGO's 2022 financial results announced via press release yesterday morning and provide everyone with some additional code of the numbers. Vincent, the floor is yours.

Thanks, Max. I, too, would like to thank everyone for taking their valuable time to listen in. Everyone at MGO has been working very hard to ensure that we are a company that will continue to earn and retain your support and fidelity as we continue to build MGO into a powerhouse brand building company. I'll start by first directing your attention to our income statements for the full years ended December 31st, 2022 and 2021. For the first 12-month period ended December 31st, 2022. net revenues increased 19%, rising to $1.5 million from $880,000 from the prior year. The increase is attributable to a couple of key drivers. One, the strong consumer demand for the Messi-branded produce fueled by Leo's winning performance at the 2022 FIFA World Cup Games held in November and December 2022. coupled with end-of-year holiday shopping. We also achieved a notable increase in gross profit on revenues, which climbed 46% to $710,000 from $487,000 on a comparable year-over-year basis. And as a consequence, our gross profit margin also improved, rising to 68% from 55%. This improvement was largely due to the decrease in cost of goods sold during 22 when compared to the previous year, which declined 14% to $338,000 from $392,000. The primary reasons for the lower cost of goods were an increase on the retail pricing for many of the messy products in our offerings. coupled with strategic expansion of our network of suppliers and manufacturers outside of China with whom we've negotiated better volume production pricing for our goods. Now, moving down our income statement, the total operating expenses for the year ended December 31st, 2022 increased 138% to $3.35 million, which compared to $1.41 million for the prior year. Operating expenses were higher because of the significant increase in royalty expense paid to the Leo Messi management during 2022 year, coupled with higher professional costs associated with the lead-up and preparation for our initial public offering, which closed January 18th of 23. Total other expenses included costs associated with foreign currency conversions into U.S. dollars, and non-cash finance charges associated with accounting for imputed interests in connection with a series of interest-free personal loans made to the company by our officers. After factoring these total other expenses, which amounted to $238,000 in 2022 and $67,000 in 2021, and after accounting for the net loss attributable to non-controlling interest of $294,000, and $80,000 in 2022 and 2021, respectively, our 2022 net loss increased 192% to $2.58 million, or $0.25 loss per share for the 12 months ended December 31, 2022, compared to $906,000, or $0.09 loss per share for the prior year. Now turning to our balance sheet. As of December 31st, 2022, our cash position was $114,000 compared to $88,000 as of December 31st, 2021. However, as everyone is aware, in January of this year, we successfully completed our IPO, adding an additional $7.24 million in cash to our balance sheet. And that's after deducting operating expenses of $1.39 million. Because of the IPO, we believe that our existing working capital and future cash flows from operating activities will provide sufficient cash to enable MGO to meet our operating needs and to meet our debt requirements for the next 12 months. With that, I've concluded my overview of the financial highlights and will now invite Max to resume the floor. Max?

Thank you, Vincent. Before I launch into my remarks regarding our prevailing business operations, I'd like to use this opportunity to formally welcome Vincent to our executive team. While he served as an invaluable consultant to MGO during our pre-IPO process, he officially joined the team on the day we commenced trading on NASDAQ, which was January 13, 2023. Another new member of our management team is our chief marketing officer, Matt Harward, who joined MGO in October 2022. Matt is the mastermind behind MGO's new AI-enabled digital marketing platform, which you will be hearing more about today and in the future. In addition to Vincent and Matt, we also welcome several amazing, highly accomplished people to our board of directors as independent members. Appointments that became official the day we started trading in NASDAQ. They include Nicole Fernandez-McGovern, Bobby McKenzie, Paul Walgreen, and Salima Popatia. Rounding out our new public company board is MGO co-founder and chief design officer, Jeanne Hilfiger, Julian Groves, our chief operating officer, and myself. We feel very fortunate and privileged to have formed a board of this magnitude. If you have not yet familiarized yourself with our leadership backgrounds, I'd like to encourage you to go to our corporate website at mgoglobalinc.com and read all of the bios we have published there. I believe you will agree that MGO is led by a world-class team. and it is a team that is fully aligned and committed to building MGO into a true powerhouse of premium lifestyle brands focused largely on DTC digital commerce. In addition to succeeding at materially strengthening our balance sheet through our IPO and listing on NASDAQ, a milestone we celebrate this morning with the ringing of the opening bell at the NASDAQ market site in Times Square. MGO has also achieved other mission-critical objectives in 2022 that I believe are important to call out. These include expanding our global network of suppliers across multiple countries to ensure we have optimal flexibility and control over our supply chain, cost of goods, and inventory management initiatives. We expect that as we grow and continue to expand our portfolio of brands, so, too, will our network of suppliers and manufacturers. Another key achievement is the aforementioned addition of Matt Howard to our team. Matt is an expert in the fields of software engineering, marketing automation, and algorithm-based marketing, which leverage the power of machine learning and leading artificial intelligence tools and technology to effectively mine large amounts of data as well as speed up the discovery process. Under his leadership and guidance, MGO is actively developing what we expect will be a vital key to the ultimate success and exponential growth of all the brands in our portfolio. In the next few weeks, we will be sharing much more detailed information on our AI-powered marketing platform, Pioneer by MGO. and provide you with greater understanding of the impact it is actually having on the sales performance of the Messi Store and the role we expect it will play in market penetration, customer acquisition and retention, and revenue growth of other brands we hope to add to the MGO platform in the future. With respect to our flagship brand, the Messi Store, in 2022, who expended considerable time and effort on identifying and expanding into several new categories for our MESI branded offerings. Offerings that complement our classic collections of graphic t-shirts, hoodies, polos, pants, and outerwear created by Jeanne Hilfiger. New categories that Jeanne and our design team have developed and are now available include our MESI green collection introduced in 2022. Messy green is a line of responsible made apparel using 100% dead stock or leftover fabric that will otherwise end up in a landfill if not repurposed. Throughout our messy green line, MGO is helping to reduce or eliminate waste and we're helping to promote a more circular economy in the fashion industry. Other new expansion categories for the messy store includes messy underwear and socks. the new Messi Swim Collection introduced in early 2023, and the new Messi Car Holder Wallet, a very popular new accessory that we began selling in late 22 in association with our Messi Winning Streak Premium Collection. In 2023, we intend to continue to identify opportunities to expand the types of products offered through the Messi Store and look forward to sharing more details as new Leo Messi-inspired collections and limited capsules are introduced through the Messi Store. Before I move on, I want to emphasize how much pride we take in having Leo Messi as an MGO branch partner, as an individual, and as one of the greatest of all-time athletes on the planet. Leo personifies the same values which define what MGO is, a company with an uncompromising commitment to excellence and to winning. However, in as much as the message store is a cornerstone brand for MGO and one we are intent on growing, to be an enduring and consistent high-sell performer, MGO was not created to only hold one brand under the company. We want to be abundantly clear that MGO was founded to bring to market multiple DTC brands, which have their own unique identities and can benefit from the power and reach of digital commerce. The message store is just the first of what we hope to be many premium lifestyle and consumer product brands powered by MGO in coming years. Which brings me to Stand Flag Pulse. Several shareholders have reached out to us via phone and email expressing a great deal of confusion on why MCO has chosen to pursue the acquisition of a flagpole company, an initiative we announced last month. First, the global flagpole market is a big and growing one. According to Data Intello, an industry research firm, this market is expected to reach $3.77 billion by 2030, growing at a 4.9% compound annual growth rate over the forecast period of 2022 to 2030. Second, owning our own brands is a good business, allowing us to achieve much greater net margins than licensed brands such as Messi. While we have elected to initially license certain assets of the Tham Flagpole brand to take advantage of immediate sales opportunities it represents, our intention is to move towards signing a definitive agreement to acquire ownership of the brand, an end goal that is still subject to certain conditions being met, including, in a sense, completing a full financial audit of its business operations. If the acquisition proceeds, Then it is our intention to expand the flagpole business from being a narrow consumer product brand to a premium lifestyle brand with multiple products offerings that appeal to Stan's target audience, namely patriotic Americans. There will be much more to share with you on this opportunity in the weeks and months ahead, so please stay tuned. Other shareholder concerns include which have been brought to our attention include MGO's poor stock performance since we debuted on NASDAQ in January. Considering that Gina Hilfiger and I are the single largest shareholders, we, too, share this concern, and we have been frustrated to the heat our stock has taken. Some of you continue to suggest that we take a more promotional approach to drive stock price recovery. However, let me be clear, this is not something that we are prepared to do. While we do intend to provide the greatest possible transparency into our business and all material developments through press releases or social media channels and SEC filings, we will not be one of those companies who issues announcements just for the sake of issuing announcements in hope that our stock price reacts. We have tremendous confidence in the fact that we're building a world-class digital commerce company defined by the premium quality of our brands and the products we offer to consumers. Moreover, we believe that the fundamental value we're creating at NGO will be demonstrated by your future quarterly and annual results and through our sharing of news that we believe is materially impactful to our business. As we perform, we hope and believe so too, with our stock price. It is our great hope that MGOL will earn the right to be a stock that individuals and institutional investors alike will take great pride in holding in their investments portfolio over the long term. I started my comments talking about the highly accomplished team we're building at MGO. I will end today's presentation by using this opportunity to thank each and every one of them for being the reason MGO is what it is and what it's going to become. Because of the respective long-term track records of success in building world-class companies, virtually everyone on the MGO team has their pick of companies at which they could work, but they all have chosen MGO. There is a reason for that. MGO is special, and we look forward to proving it to you through our future operating and financial results. We also look forward to hosting this quarterly webcast in hopes of keeping you well-informed and our progress as the year unfolds. Before I say my official farewell, for those of you who would like to listen to today's webcast again, a replay of this call will be available later today on our website, found at mgoglobalink.com. With that said, I would like to wish everyone a good afternoon. Kat, the floor is yours.

Thank you. This does now conclude our call. We thank you for attending and have a wonderful day.