OverActive Media Corp.

Good day, everyone, and welcome to Overactive Media's fourth quarter and year-end 2022 conference call. At this time, participants are in a listen-only mode. A question-and-answer session will follow management's remarks. This conference call is being recorded, and a replay of today's call will be available on the Investor Relations section of Overactive Media's website. It will remain posted there for the next 30 days. I will now hand the call over to Mr. Babak Pedram, Investor Relations for Overactive Media, for introductions and the reading of the Spave Carver Statements. Please go ahead, sir.

Thanks, Lara, and good morning, everyone. Welcome to Overactive Media's fourth quarter and year-end 2022 earnings conference call. A copy of the company's earnings press release is available on the Investor Relations section of our website at overactivemedia.com. With us on today's call are Adam Adamu, Overactive Interim Chief Executive Officer, Alison Walker, Chief Commercial Officer, and Rakesh Shah, Chief Financial Officer. Today, we'll review the highlights and financial results for the fourth quarter and year-end 2022, as well as recent developments. Please note that unless otherwise specified, all amounts mentioned on today's call are in Canadian dollars. Before we begin, I will read our cautionary notes regarding forward-looking information. Certain information to be discussed during this call contains forward-looking statements within the meaning of applicable security laws, including, among others, statements concerning the company's 2023 objectives, the company's strategy to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance, or expectations that are not historical facts. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management and are subject to several significant risks and uncertainties that could cause actual results to differ materially from those anticipated. Also, our commentary today will include adjusted financial measures, which are non-GAAP measures. These should be considered as a supplement to and not as a substitute for GAAP financial measures. Reconciliations between the two can be found in our management discussion analysis, which is available on CDAR.com and our website. At this time, it is my pleasure to introduce Adam Adamu, interim CEO of Overactive Media. Adam, please go ahead.

Thanks, Babic, and good morning, everyone. I appreciate you joining us today as we share our fourth quarter and year-end 2022 earnings report. First, I would like to thank our outgoing CEO, Chris Overholt. Chris was the first ever Overactive Media employee and a key component of our growth and success as a company. Thank you, Chris. I took on the role of interim CEO during a difficult time in the economy for small and large companies alike. My first priority is to ensure the long-term sustainability of our business. On this front, In the first 30 days of the transition, we initiated an operations review and instituted significant cost reductions. We effected a restructuring to better align our costs with our resources in an environment where access to new capital is scarce. These moves and others to come will expand our runway and provide a path to sustainability with the current capital and resources that we have on hand. This is a key focus. and we will monitor it closely and provide updates to investors quarterly. When we founded Overactive, we set out on an esports journey driven by a few fundamental beliefs. That esports is at the crux of gaming, media, and entertainment for today's generation of fans. That owning franchise league assets in partnership with the world's best game developers will deliver a growing stream of recurring revenue to our business, and that brands would support our value proposition based on the attractive demographics of our fans. These beliefs have come, or are coming, to fruition. Our fans are passionate, engaged, and sizable. Our league partners are invested, and the franchise model delivers on the promise of multi-generational leagues driving dependable and recurring revenue streams to teams. Our business operations revenue continues to hit new highs, and the return to live events has fueled the interest and passion of our fan communities. Not everything has developed according to our thesis. Our belief that, as with traditional sports, media rights paid for by broadcasters would fuel the rapid monetization of the industry is not developing as we expected. The digital world has evolved during the pandemic, and the balance between the oversized market power of the incumbent platform providers relative to those distributing content on their platforms, is skewed strongly in favor of the former. Our leagues and league partners are left to choose between media monetization connected to a significantly smaller audience reach or greater reach without media rights monetization. Neither is optimal for the ecosystem, and this challenge has yet to be figured out. Because of this uncertainty, we have decided to reduce the carrying value of some of our franchise assets. While we believe the market value of our assets is substantial, the valuation models used under our accounting standards focus primarily on a discounted cash flow model that is negatively affected by higher interest rates, economic uncertainty, and the perceived risks related to these cash flows. Let me be clear. The core of our competitive advantage is the foundational role that our relationship with the world's leading publishers and game developers has on our ability to adapt. Because of these relationships, we are uniquely positioned to revisit these assumptions and to fix what's not working. We can work directly with our publisher partners to refine the monetization model to seek new sources of revenue from within the broader gaming ecosystem and to develop a revised model that is endemic to our industry and plays to our strengths as publishers, developers, teams, players, and fans. This is only possible because we are directly partnered with the owners and publishers of the intellectual property that backs our esports leagues. We have the means and drive to ensure their esports ecosystems succeed. As I speak to you this morning, I can confidently say that we are executing our plan, that our business is strong, that our teams are successful, and that the excitement is real. As of December 31, 2022, we had $13.6 million in networking capital. a decline of just over $6 million relative to last year at this time. As of April 19, 2023, our financial resources are roughly at the same level as at the end of December, almost four months ago. This results from positive momentum in our operations, management of our working capital, and the positive impact our cost reductions have on our cash burns. We feel fortunate to have a strong balance sheet with sufficient working capital to fund our operations, allowing our senior leadership team to focus on achieving key milestones and building long-term value for our shareholders. Our sponsorships business remains strong. Our leagues are underway, and our franchise teams are progressing very nicely. With regards to our teams business, we remain focused on talent identification, player development, and a coach-led system. As an organization, our goal is to build and deliver consistently top-performing teams that compete at the highest level. So far, in 2023, our Mad Lions team in League of Legends has qualified for the championship finals twice, winning the LEC Spring Championship just two days ago. Mad Lions logged in 7.8 million hours watched by our audience of fans in just two months. With yesterday's victory... I'm convinced they are the most watched esports team in the Western world to date in 2023. Our Call of Duty team, the Toronto Ultra, won the Major 3 championship in Arlington, Texas, and will be hosting the Major 5 championship in Toronto in May in front of a sold-out crowd. With a return to a multi-platform content distribution system, the Call of Duty League viewership has doubled this season. It is now positioned to become the most prominent esports league in North America by viewership. Our Overwatch League team, the Toronto Defiant, finished in fourth place at the Pro-Am tournament in March and will launch our fifth season this week. The Overwatch League will remain on an exclusive platform in 2023, where it found success in 2022 with the highest ever viewership for a grand final. We also launched our first all-female Valorant team under the Mad Lions brand in Spain and the North American Valorant League team under the same name. I will now turn it over to Alison Walker, our Chief Commercial Officer, who will speak about our commercial and business partnerships along with some of our plans for 2023 and beyond. Alison?