Sharplink, Inc.

Good morning, everyone, and thank you for participating on ShopLink's webcast. Joining us from Sharplink Gaming today is Rob Fithian, co-founder and CEO, Bob DeLucia, Sharplink CFO, and Dodie Handy, Director of Communications. Before I turn the floor over to them, I remind you that during 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 filings with the SEC, actual outcomes, and results may differ materially from what is expressed in or implied by these forward-looking statements. With that said, I'd now like to introduce Jody Handy. Jody, the floor is yours.

Thank you, Kat, and hello, everyone, and welcome to SharpLink Gaming's first quarter 2023 earnings call. Before we begin, I'd like to thank all of the shareholders who kindly submitted questions to us in advance of today's call. We greatly appreciate your active engagement in helping us to ensure that we cover the topics of most relevant interest to you. We're going to be kicking off today's call with Bob De La Chia, first reviewing the financial results for the three months ended March 31st, 2023. after which Rob will endeavor to address the questions we've received. So with that, Bob, I'm going to turn it over to you.

Thanks, Jody. In my remarks today, I'll discuss our quarter one financial performance. All the financial metrics will be discussed on a gap basis, and all comparisons will be discussed on a comparable quarter-over-quarter basis. Yesterday afternoon, after the market closed, we filed our first quarter reports on Form 10-Q with the SEC. If you've not had a chance to review it, you may access it on SEC.gov or via the Sharplinks Investor Relations section on our website under SEC Filings. I encourage everyone to read our 10-Qs and other SEC Filings to ensure you have a full understanding of our business, the financial results, and important information disclosed. In quarter one, 2023, our revenue growth was notable, rising 79% to $3.39 million from $1.9 million for the first quarter of 2022. The increase is largely attributable to the new revenue contribution from our Sports Hub Gaming Network, which we acquired in late December, 2022. However, we saw revenue growth across each of our business segments. Specifically, the newly merged Sports Hub Fantasy Sports Group contributed $1.4 million for the three months ended March 31st, 2023, which compared to zero in the prior year. Revenue generated by our sports gaming industry client services group rose 17% to $1.05 million from $911,000 on a comparable quarter-over-quarter basis. Our affiliate marketing international business group contributed $1.01 million to total Q1 2023 revenues, which was up 9% when compared to the $924,000 reported for the same three-month period in 2022. And finally, our affiliate marketing U.S. business segment saw revenues climb 355% to $280,000 from $62,000 for the three months ended March 2023 and 22, respectively. Our gross profit increased 114% to $1.34 million in Q1 of this year, which compares to a gross profit of $627,000 in the previous year's first quarter period. Further, our gross profit margin also improved thanks to our expanding mix of higher margin products and services to 40% from 33%. Moving down to P&L, SharpLink succeeded in reducing our quarterly operating expenses by 51%, which declined to $3.6 million for the three months ended March 31, 2023, compared to $7.55 million in the first quarter of 2022. After factoring the net loss discontinued operations of Sharpling's legacy MTS business of $145,000 for the first three months of 2023, and a net loss from discontinued operation business of $108,000 for the same three-month period last year, our net loss declined 60% to $2.82 million, or a dollar per basic and dilutive share from a net loss of $7.04 million, or $2.99 loss per basic and dilutive share, respectively, representing a significant improvement. Now, moving over to the balance sheet, as of March 31, 2023, we had $28.83 million in cash and $10.97 million in restricted cash. This compares to cash of $39.33 million and $11.13 million in restricted cash as of December 31st, 2022. The decrease in cash and restricted cash was primarily attributable to the payouts for the fantasy sports prizes following the end of the 2022 season. 2023 NFL season that occurred in January. This was offset by payments received for the beginning of the 2023 Major League Baseball season, as well as our normal working capital spent. During the first quarter of 2023, our financing activities resulted in $4 million raised via a senior convertible to venture with one of our largest institutional investors. In addition, we also secured $7 million line of credit from our primary lender, Platinum Bank. But there can be no guarantees. We believe the cash on hand in connection with the cash generated from our revenues will be sufficient to fund the next 12 months of operations from March 31st, 2023. Notwithstanding, any extraordinary acquisition opportunities or unanticipated challenges that we may encounter as the year unfolds. That now concludes my review of the Q1 financial results, so I turn the floor back to you, Dodie.