Motorsport Games Inc.

Thank you for standing by and welcome to Motorsport Games Inc's fourth quarter and full year 2023 earnings call. At this time, online turn a lesson only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require needed assistance, please press star zero for the operator. As a reminder, today's conference is being recorded. I would now like to turn the conference over to Ben Rossiter-Turner from Motorsport Games. Please go ahead.

Thank you and welcome to Motorsport Games' fourth quarter and full year 2023 earnings conference call and webcast. On today's call is Motorsport Games Chief Executive Officer Stephen Hood and Interim Chief Financial Officer Stanley Beckley. By now, everyone should have access to the company's fourth quarter and fall year 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 statement 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 to the company's filings with the SEC, including its most recent annual report on Form 10-K for the year ended December 31, 2023, for a detailed discussion of certain 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 fourth quarter and full year 2023 financial results. You will find a reconciliation of these non-GAAP measures to their most directly comparable GAAP measures, as well as other related disclosures in the press release issued further today. And now I'd like to turn over the call to Stephen Hood, Chief Executive Officer of Motorsport Games. Stephen?

Thank you, everyone, for joining this conference call today. Throughout Q4 2023, we continue to reduce spend and improve efficiencies across the business, carefully monitoring expenses and working diligently towards our Q1 2024 game release, Lomom Ultimate. This would be only our second internally developed title and something we intended to correct as a matter of urgency. The folding of other projects and efforts was designed to focus our effort around the kind of game experience we believe will set us on the right path, releasing innovative games designed to foster a large player base of engaged users we can call a community. As we focused on the development of Le Mans Ultimate, we came to the understanding that this form of racing suited our vision for the future racing and driving landscape. Motorsport games is all about player participation and not simply the dog-eat-dog world of traditional racing games, where only one player can be crowned the winner and where friends become enemies. We believe in building an accessible, highly polished ecosystem, which puts community and, most importantly, teams at the heart of the experience. Look at many of the wildly popular games on the market today, and you will see they center their experience around team play. This is starkly absent in almost all racing experiences. In Le Mans Ultimate, Teams comprise three drivers taking turns to drive their part of an endurance race. This title is our springboard for a vision we have been working towards for the last several months, which we believe signifies a turning point in the recent history of our company. We are finally seeing the results of decisions set in motion many months prior, and they are delivering better than expected results, not least with the recent release of our new game, Le Mans Ultimates. This has been especially pleasing given the challenges encountered by the business and the tough decisions we've made to try and turn the ship around. The first real signs of positivity have been encouraging, but we recognize that we have some way to go to deliver on what we believe the business to be capable of. The positive reception to our recent release has given us a real sense of satisfaction and provides us with a valuable stepping stone. And it seems to be resonating with our customers Within the first 36 hours of release on February 20, into the early access, I might add, Le Mans Ultimate sold as many units as we had projected for the opening 10 days. It has gone on to continually sell above expectations, and we have revised internal forecasted sales numbers to account for this higher than expected update. We had anticipated, with a strong tailwind, selling 18,000 copies in the opening 10 days. In reality, the reception was so strong that we sold more than 55,000 copies. Our development team continues to push out fixes and updates to continually improve the product, which has resonated well with our audience. These green shoots are the result of an enormous effort throughout and prior to Q4 2023. We're now pushing ahead on continual development of the title throughout the remainder of this year. We plan to bring exciting new content and features to the Le Mans Ultimate Experience, as well as complementary services, which we anticipate will, in due course, provide additional revenue streams. Race Control, our online service providing multiplayer functionality to our R Factor 2 and now Le Mans Ultimate game, launched five months ago. It continues to play an important role in the ecosystem we are building around our product, and has now broken through more than 100,000 account registrations, up from 15,000 the last time I reported on its growth. Race control drives regular activity within our games and is vital to our future strategy around community and complementary services. Enabling conversation around our game experiences, even when a user is not playing the game, is important, and to this end, race control is expected to soon have a more friendly interface, making it accessible from any web browser. With race control, users will be able to learn more about the games, tips and tricks to get the most from the experiences, become a better virtual driver, and more. In time, our plan is to have users to be able to manage their account and experience from this site using any mainstream connected device, phone, desktop, laptop, tablet, and so on. Bringing those parts that made R Factor 2 so successful across and into the Lamont project has proven instrumental in landing the core gameplay experience. The update to this technology now forms the basis for an engine we own and expected leverage for existing and any new licensing opportunities, as well as entire new titles. Our licensing agreement with Kindred Concepts to power their F1 Arcade experience using our game technology is one such area of further opportunity. We are proactively exploring new ideas that may be of benefit to motorsport games. F1 Arcade rolls out to the US site of Boston later this month of April, and we have been supporting this expansion to ensure our technology is experienced in the most positive way. The focus for the year ahead is to continue building the positive momentum around our recent game release with new updates, additional services through race control, downloadable content, and to tap into the highly valuable marketing opportunities. For example, the actual 24 hours of Le Mans race takes place in June. We believe this will be another opportunity for increased visibility and sales for our Le Mans Ultimate game. as well as the perfect launch pad for our anticipated reveal around the future of Le Mans Virtual Series, one of the world's most watched racing esports events of the last few years. Now, I would like to invite Stanley Beckley, our interim chief financial officer, to talk about the financial results for the fourth quarter and full year 2023.