Motorsport Games Inc.

Thank you for standing by, and welcome to the fourth quarter and full year 2020 conference call and webcast for Motorsport Games, Incorporated. I would now like to turn the call over to Ms. Ashley DeSimone, Managing Director of ICR, to begin.

Thank you. Good afternoon, and welcome to Motorsport Games' fourth quarter and full year 2020 earnings conference call and webcast. On today's call are Dimitri Kosko, Executive Chairman and Chief Executive Officer, and Jonathan New, Chief Financial Officer, and Stephen Hood, President. By now, everyone should have access to the company's fourth quarter earnings press release, filed today after market close. This is also available on the investor relations section of Motorsport Games' website at www.motorsportgames.com. During the course of this call, management may make forward-looking statements, within the meaning of the federal securities laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and the company's filings with the SEC, including the company's annual report on Form 10-K for the year ended December 30, 2020, for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. In today's call, we will refer to adjusted EBITDA, a non-GAAP financial measure, as we discuss the fourth quarter and full-year financial results. You will find a historical reconciliation of adjusted EBITDA to GAAP results included in the press release issued earlier today. And now I'd like to turn the call over to Dimitri Kosko, Chief Executive Officer of Motorsport Games. Dimitri?

Thank you, Ashley, and hello, everyone. It's a pleasure to be speaking to you on our first earnings call as a public company. We're a leading racing game developer, publisher, and an esport ecosystem provider of official motorsport racing series throughout the world. Only weeks ago, we officially began trading on NASDAQ. marking a major milestone for our company, our team, partners, customers, and fans around the world. Our mission at Motorsport Games is simple. We create and spread the joy through racing games, starting with exclusive access to approximately 55 million monthly active users that our parent company carries and beyond. We achieved this mission by developing and publishing racing games and immersive esport experiences of the world's most iconic races and brands who trust us with their valuable IP and often in a long-term partnerships like we have with NASCAR. And they are one of several iconic brands we'll work with today. So thank you for these amazing partners who trust us with their global iconic brands from NASCAR to ACO, which represents 24-Hour of Le Mans and the British Touring Car Championship. I'm joined today by Steven Hood, the president of the company, and John New, our CFO. Also, note that we posted an investor video for you on our IR portion of the website. We hope this video gives you a feel for our passion and excitement we create here at Motorsport Games. Here are some phenomenal highlights to share. We executed upon our core strategy in 2020 to expand and extend our portfolio of exclusive licenses for games and esports. And thus far, we have executed on our product roadmap, and we are on pace to deliver NASCAR Next in the third quarter of 2021, along with a number of additional products on mobile and Nintendo Switch. We expanded our team in 2020 to nearly 100 team members, almost doubling the number of team members we had at the end of 2019. giving us a robust and highly talented group of resources to further execute upon our strategy. We delivered exciting eSport experiences, which yielded approximately 55 million viewers in 2020. eSports is a growing and global phenomenon, and in 2020, nearly half a billion people around the world watch an eSport event. Our eSport event, 24-hour Le Mans virtual, was one of the largest events in virtual racing history, bringing in approximately 14 million live viewers. Compared to the NBA Finals average viewership last year, the 24-hour Le Mans virtual had almost doubled the number of viewers. The global gaming market is about $175 billion, or half as big as the global broadcasting and cable TV market. We saw gaming outgrow the television market by six times from 2014 to 2019, or a CAGR of 12% versus just two. This is a fitting example of how esport audiences are rising to compete with the audiences of traditional sporting events. We're working to capitalize on this fast-growing esport ecosystem, and it is our job to evolve and develop the latest content, games, and experiences to be in the forefront of the growing demands in competitive gaming and esport entertainment. So we couldn't be more excited about our success so far and the future opportunity in esport. Let me take you through what we've been up to so far this year. As I mentioned, we completed our initial public offering on NASDAQ, successfully raising $69 million of gross proceeds. And we have continued to deliver on important strategic initiatives like the launching of our traction platform to foster, grow, and engage more deeply our growing fan base online and across our pod. We closed our first acquisition and also began two others, which I'll discuss in context of our acquisition strategy and what we look for specifically. First, we look at how we could accelerate our product-driven growth with technology or teams that expedite our go-to-market strategy and elevate the quality standard of our entertainment so that our games are world-class. Second, we look at what we bring to the table as the acquirer, as the leader in developing, marketing, and publishing racing games. In all three of the products or technology acquisitions we announced this year, the combination of Target's product or tech with our marketing and publishing muscle is a powerful marriage. We look at what the Targets have that we do not, and think how our expertise would supercharge their current product offering right now. And of course, it relates to integration, how easily technology integrates into our existing product roadmap. And third, we seek those that share the vision of creating powerful and joyful emotions through racing games. Having a common passion of our existing team is crucial to us, This is how we challenge the boundaries of what is traditional or expected. Let me review the deals one by one. Earlier this month, we announced that we entered into a binding term sheet to acquire Studio 397 and their core product, R-Factor II. We have known R-Factor's technology and the Studio 397 team for years through a longstanding successful collaboration and licensing arrangement. In many famous racers, like Fernando Alonso's opinion, Studio 397 has the leading racing simulation technology in the world, including the most realistic car physics and tire models, just to name a few. In acquiring Studio 397, we believe we'll be securing a premier IP and development team for the future development of virtual racing games. Upon completion, we plan to integrate Studio 397's technology across our upcoming console and PC product releases. We expect that the Studio 397 brand and our factor technology will also play an integral role in our esports opportunity. We believe that acquisition will foster our capabilities to provide bespoke esports events of our choosing and importantly add a game revenue stream without having a dedicated game title yet btcc for example due to release in 2022 we could potentially have an official esports series starting this year one full year prior to product release we further believe that acquisition will allow us more readily service these type of opportunities with an increase in quality and fidelity that is not readily available in today's esports marketplace. We expect that the control of this platform will increase our capabilities and reduce both intercompany dependence and time to market within a rapidly growing esports scene. We're working to deliver on the promise and potential of esports by providing a superior and exciting gaming platform dynamic and one-of-a-kind esport events, and broadcasting these events to a large and growing audience of consumers, teams, and players. Next, we recently closed the acquisition of the assets and key products comprising the CardCraft video game. This is a token acquisition of an interesting and additive product and a strong team. They have a fun and exciting product in the world of carding, Karting has a strong following, especially with a younger demographic, and has a potential to be married with some interesting IP, including racing series and celebrity drivers. In addition, KartKraft is built on the Unreal Engine, which is synergistic and well aligned with our platform, which is also utilizing Unreal Engine. Finally, we get a fantastic team and a presence in Australia. Lastly, we have entered into a binding term sheet to acquire Digital Tails, the mobile game developer that creates official mobile games for Superbike World Championship or SBK. This acquisition will bring us IP in two-wheel bikes, additive mobile games and capabilities, and additional talent team, all of which we could leverage across the portfolio for our fans. We're in the process of negotiating a definitive acquisition document to complete the Studio 397 and Digital Tales transactions, which are subject to customary closing conditions. In summary, we're excited to accelerate our product roadmap with these highly synergistic acquisitions. Moving on to Traction, we expect Traction to eventually serve as our esport as a service platform for the fans worldwide. Fraction will enable users to customize and run their own esport competition in a simple turnkey format, allowing groups to form around specific games, consoles, or individual ability. Fraction will allow users to engage with a community of like-minded virtual racers competing against each other no matter where they are. Traction recently launched as a content and a community platform that aligns perfectly with our recent acquisitions. We believe the future of this space relies heavily on innovation, and we expect to deliver the next phase of Traction integration into our ecosystem later this year. Now, Stephen is going to say a few words about our product development. Thank you.