Motorsport Games Inc.

Thank you for standing by and welcome to Motorsport Games Inc's first quarter 2023 earnings call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad and to withdraw your question, please press star then two. As a reminder, today's conference is being recorded. I would like to turn the conference over to Ken Godskin from Motorsport Games. Please go ahead.

Thank you and welcome to Motorsport Games' first quarter 2023 earnings conference call and webcast. On today's call is Motorsport Games' Chief Executive Officer, Stephen Hood, and Chief Financial Officer, Jason Potter. By now, everyone should have access to the company's first quarter 2023 earnings press release, filed today after market close. This is 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 U.S. 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. Except as required by law, the company undertakes no obligation to update any forward-looking statements made on this call or to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. Please refer to today's press release and the company's filings with the SEC, including its most recent quarterly report on Form 10-Q for the quarter ended March 31, 2023 for a detailed discussion of certain 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 conference call, we will refer to certain non-GAAP financial measures such as adjusted EBITDA as we discuss the first quarter 2023 financial results. You will find a reconciliation of these non-GAAP measures to their most directly comparable gap measures, as well as other related disclosures in the press release issued earlier today. And now, I'd like to turn the call over to Stephen Hood, Chief Executive Officer of Motorsport Games. Stephen?

Thank you, everyone, for joining the call today. I'd first like to tackle head-on a question some of you are likely to have around my return to the business some 14 months after my departure. Having put a lot of energy into the formation of Motorsport Games, I've always believed in the opportunity. When I was approached about our potential return and my availability, I reviewed the opportunity and came to the realization that things could be improved and success attained. With a heavy focus on delivery of quality products, service, and entertainment features, I believe we can point the company in the right direction. In only a few weeks since my return, it has been apparent the entire team across the Motorsport Games business are energized about what we can deliver if we are united and decisive. I am firm in my belief about what can be achieved and hope to be a catalyst for the change of fortunes for the most important games business. My background is in game development. I understand the requirements, infrastructure, and innovation necessary to compete in this space. But I also understand that we first need to deliver products to market. This opening period is one of rapid review, reorganization, and tactical progress. My review of the business increased markedly on April 19th when I assumed the role of Chief Executive Officer. This position provides me with the authority necessary to leave no stone unturned when refactoring the business' short, medium, and long-term effectiveness. As a result, and with full support of my leadership team, we have made the decision to close two micro-studios in Orlando, Florida, and Billison, Georgia. This results in a minor headcount reduction, but more importantly, it allows us to architect and manage our development resources in a more effective manner. Fewer physical studios, at least while we refactor and deliver initial releases, will cut out the distractions apparent during our rapid multi-site growth period, which was somewhat forced upon our business during the COVID pandemic. Now that we're out of this period, we should double down on known talent locations, improve visibility of development, and generate a greater sense of team across the organization. Focus extends across all our activities, and as such, I am instilling a culture of togetherness and optimism from the top down. I've seen from afar how our team has been hurt by the inevitable consumer reaction to products like NASCAR Ignition. a title that does not reveal the capability of those who remain with us on this journey. Indeed, I believe we are going to turn a corner and with the right products, win over those who understandably questioned our delivery. We have been deploying resources towards well-regarded legacy platforms such as the NASCAR Heat franchise, progressively bringing it closer to season currency. In the coming days, we'll update the product for the 2022 season, compete with next-gen cars for our fans to enjoy it. We are also working on a review of plans to maintain further support for the existing franchise titles whilst progressing with development around future NASCAR games. I've seen enough since my return to understand that our primary opportunities revolve around our plans at long-tail franchise games like the British Touring Car Championship, IndyCar, innovative opportunities with Le Mans, which includes the World Endurance Championship, and service amplifiers like our evolving competition system which we intend to eventually become an important piece of our strategy in the future. Titles that are the furthest into development that have yet to be showcased by the company. Our planned IndyCar title allows us to move into single-seater racing, an area I know very well and is in development by our Australia Development Studio. This team was together after the acquisition of Carcraft in 2021. It is especially rewarding to see how this long-term play is beginning to come to fruition around the title I have personally hoped to see the light of day since I got into playing video games way back in the day. With the right design, support, and marketing, we believe IndyCar could become the home of single-seat gaming. I believe our partners at IndyCar will come away impressed at our next progress reveal. Great games are not delivered overnight, and there is still much to do on the road to our upcoming releases. but we are taking prior lessons into account for the good of our future product strategy. Of equal importance is the longer-term opportunity around development of our game platform designed to improve upon the capability and stability of our current racing-focused efforts. We believe this will provide us with the technology from which we can push on, developing additional titles. We must move on from the technology and into delivery of entertainment. Our planned Le Mans title allows us to utilize the very best components of our top tier R factor 2 simulation title and align it to an opportunity we believe exists in the racing genre. Think of any popular game these days and you will invariably find that teams of friends are working together to achieve objectives. The racing genre has for decades promoted a sense of ultra competitiveness that I feel prevents rapid growth of the segment. Le Monde, and indeed the World Endurance Championship, revolves around teamwork. It is therefore fitting that our long-planned move into team racing begins with the release of our competition system into the R Factor 2 simulation-style game, which will see a useful growth period thanks to third-party community platform support, as well as our formal quarterly content release strategy. From there, we will gather valuable consumer feedback ahead of a wider release, alongside the upcoming Le Monde Games, which in turn should provide us with valuable insight into the concept of team flow within the racing genre. Beyond our projects with NASCAR, the development of IndyCar, Le Mans, and our aforementioned competition system will provide a valuable step forward for our company. We must think differently and consider how the racing gamer of tomorrow can expect to enjoy their hobby. Our customer is a core audience, and we intend to win them back and impress. We will do that by providing wonderful experiences that do not require us to follow in the slipstream of our various competitors, but instead produce an overall entertainment ecosystem that will benefit their ability to access and enjoy more of what we know makes this genre so special. In some areas, I can say that we are further ahead than I might have imagined prior to my return. I am bringing about greater operational focus and decisiveness to ensure that these projects are given the oxygen they require to be successful. The next 12 to 18 months will be a defining period for the company, and one the team across Motorsport Games and I will relish. In order to deliver on these opportunities tomorrow, we will need to make difficult decisions today. At this time, I'd like to hand it over to Jason Potter, Motorsport Games Chief Financial Officer, to go over our Q1 2023 financial results.