Super League Enterprise, Inc. (NASDAQ:SLE) Q1 2024 Earnings Call Transcript May 15, 2024 5:00 PM ET Company Participants Ann Hand - CEO Conference Call Participants Jack Codera - Maxim Group Howard Halpern - Taglich Brothers Scott Buck - H.C. Wainwright Operator Greetings and welcome to the Super League First Quarter 2024 Conference Call. Please note this conference is being recorded. Before we begin, I'd like to caution listeners that comments made by management during this call may include forward-looking ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 SUPER LEAGUE ENTERPRISE, INC. (Exact name of small business issuer as specified in its charter) Delaware 47-1990734 (IRS Employer Identification No.) (State or other jurisdiction of incorp ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-38819 SUPER LEAGUE ENTERPRISE, INC. (Exact name of registrant as specified in its charter) Delaware 47-1990734 (State or other ...

Super League Enterprise, Inc. (NASDAQ:SLE) Q4 2023 Earnings Conference Call March 28, 2024 5:00 PM ET Company Participants Ann Hand - Chief Executive Officer, President, Chair of the Board Clayton Haynes - Chief Financial Officer Conference Call Participants Scott Buck - H.C. Wainwright & Co. Howard Halpern - Taglich Brothers Jack Vander Aarde - Maxim Group Operator Greetings, and welcome to the Super League Fourth Quarter and Full-Year 2023 Conference Call. Please note, this conference is being recorded. B ...

[Form 8-K Current Report](index=1&type=section&id=Form%208-K%20Current%20Report) This Form 8-K reports preliminary financial results, a non-reliance on prior statements due to an accounting error, and a key officer's departure [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) Super League Enterprise, Inc. released preliminary financial results for Q4 and FY 2023, accompanied by a press release and a CEO letter to shareholders - The company issued its **preliminary financial results** for the quarter and year ended December 31, 2023, on March 27, 2024[7](index=7&type=chunk) - The announcement was accompanied by a **Press Release (Exhibit 99.1)** and a **Letter to Shareholders (Exhibit 99.2)**[7](index=7&type=chunk) - The information and exhibits furnished under this item are **not considered "filed"** for Section 18 of the Securities Exchange Act of 1934 purposes[8](index=8&type=chunk) [Item 4.02 Non-Reliance on Previously Issued Financial Statements](index=2&type=section&id=Item%204.02%20Non-Reliance%20on%20Previously%20Issued%20Financial%20Statements) The Audit Committee determined the Q3 2023 Form 10-Q is unreliable due to a noncash accounting error related to preferred stock valuation, constituting a material weakness [Determination of Non-Reliance](index=2&type=section&id=4.02.1%20Determination%20of%20Non-Reliance) The Audit Committee concluded on March 26, 2024, that the Q3 2023 Form 10-Q should no longer be relied upon - On March 26, 2024, the Audit Committee determined the **Quarterly Report on Form 10-Q for Q3 2023** should no longer be relied upon[9](index=9&type=chunk) [Description of Accounting Error](index=2&type=section&id=4.02.2%20Description%20of%20Accounting%20Error) The accounting error resulted from excluding the noncash value of a down round feature on Series AA Convertible Preferred Stock, impacting EPS calculation - The error stemmed from excluding the calculated **noncash value of a "down round feature"** triggered in August 2023 on the Company's Series AA Convertible Preferred Stock[10](index=10&type=chunk) - According to ASC 260, this value should have been recorded as a **noncash charge to accumulated deficit** and a **reduction to income available to common stockholders** for EPS computation[10](index=10&type=chunk)[11](index=11&type=chunk) [Impact on Financial Statements and Internal Controls](index=2&type=section&id=4.02.3%20Impact%20on%20Financial%20Statements%20and%20Internal%20Controls) The error affects additional paid-in capital, accumulated deficit, and loss per share, and is identified as a material weakness in internal controls - The error affects **additional paid-in capital, accumulated deficit, and loss per share computation**, but has no impact on total assets, liabilities, equity, revenues, or net loss[12](index=12&type=chunk)[13](index=13&type=chunk) - The company will provide **footnote disclosures** in its upcoming 2023 Annual Report on Form 10-K for corrections, instead of amending the Q3 10-Q[14](index=14&type=chunk) - Management concluded this error constitutes a **material weakness in internal control over financial reporting**[15](index=15&type=chunk) [Item 5.02 Departure of Directors or Certain Officers](index=3&type=section&id=Item%205.02%20Departure%20of%20Directors%20or%20Certain%20Officers) Co-founder David Steigelfest will depart as an officer and director effective April 1, 2024, an amicable separation unrelated to company disagreements - On March 22, 2024, co-founder **David Steigelfest** agreed to conclude his tenure as an officer and director, effective **April 1, 2024**[18](index=18&type=chunk) - Mr. Steigelfest's departure is **not due to any disagreements** with the company on its operations, policies, or practices[18](index=18&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=3&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits accompanying the Form 8-K, including the press release and shareholder letter for Q4 and FY 2023 financial results Exhibits Filed with Form 8-K | Exhibit No. | Description | | :--- | :--- | | 99.1 | Press Release issued by Super League Enterprise, Inc., dated March 27, 2024 | | 99.2 | Letter to Shareholders, dated March 27, 2024 | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

Super League Enterprise, Inc. (NASDAQ:SLE) Q3 2023 Earnings Conference Call November 14, 2023 5:00 PM ET Company Participants Ann Hand - CEO Clayton Haynes - CFO Conference Call Participants Howard Halpern - Taglich Brothers Operator Hello, and welcome to the Super League Third Quarter 2023 Conference Call. Please note, this conference is being recorded. Before we begin, I'd like to caution listeners that comments made by management during this call may include forward-looking statements within the meaning ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the company's unaudited interim financial statements, management's discussion and analysis, market risk disclosures, and internal controls [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited interim financial statements for Super League Enterprise, Inc. as of September 30, 2023, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with accompanying notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 (Unaudited) | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $1,140 | $2,482 | | Accounts receivable | $7,831 | $6,134 | | Total current assets | $10,360 | $9,997 | | Intangible assets, net | $14,929 | $20,066 | | Goodwill | $1,864 | $0 | | **Total assets** | **$27,242** | **$30,210** | | **Liabilities & Equity** | | | | Accounts payable | $8,360 | $6,697 | | Total current liabilities | $10,197 | $10,693 | | Total liabilities | $10,627 | $11,006 | | Total stockholders' equity | $16,615 | $19,204 | | **Total liabilities and stockholders' equity** | **$27,242** | **$30,210** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, costs, and net loss over specific three and nine-month periods Condensed Consolidated Statements of Operations (Unaudited, in thousands) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$7,195** | **$4,508** | **$15,569** | **$12,555** | | Cost of Revenue | $4,655 | $2,719 | $9,512 | $7,086 | | **Gross Profit** | **$2,540** | **$1,789** | **$6,057** | **$5,469** | | Total operating expense | $7,036 | $53,870 | $25,959 | $74,254 | | **Net Operating Loss** | **($4,496)** | **($52,081)** | **($19,902)** | **($68,785)** | | **Net Loss** | **($2,984)** | **($52,602)** | **($17,056)** | **($69,238)** | | Basic and diluted net loss per common share | ($1.01) | ($28.14) | ($7.44) | ($37.37) | - Operating expenses for the three and nine months ended September 30, 2022, included a significant non-cash goodwill impairment charge of **$42.0 million**, which was not present in the 2023 periods[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities for the reported periods Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($14,090) | ($16,036) | | Net cash used in investing activities | ($658) | ($1,514) | | Net cash provided by financing activities | $13,406 | $4,160 | | **Net (Decrease) in Cash** | **($1,342)** | **($13,390)** | | Cash at beginning of period | $2,482 | $14,533 | | **Cash at end of period** | **$1,140** | **$1,143** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide critical context to the financial statements, including a 'Going Concern' warning, details on the Melon, Inc. acquisition, equity and debt financing, and a reverse stock split - The company's financial statements have been prepared on a going concern basis, but recurring net losses (**$17.1 million** for the nine months ended Sep 30, 2023) and net cash used in operations (**$14.1 million**) raise **substantial doubt** about its ability to continue as a going concern[25](index=25&type=chunk)[26](index=26&type=chunk) - On May 4, 2023, the company acquired substantially all assets of **Melon, Inc.**, a development studio, for total consideration of **$2.22 million**, which included **$150,000** in cash, **$722,000** in stock, and **$1.35 million** in fair value of contingent consideration, resulting in **$1.86 million** of goodwill[91](index=91&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) - In June 2023, the company disposed of intangible assets originally from the 2021 Bannerfy acquisition, resulting in a write-off of **$2.28 million**, recorded as 'Loss on intangible asset disposal'[89](index=89&type=chunk) - The company completed several series of convertible preferred stock offerings (Series A and Series AA) in late 2022 and 2023, raising gross proceeds of **$12.6 million** and **$11.8 million**, respectively, to fund operations and repay debt[126](index=126&type=chunk)[140](index=140&type=chunk) - Effective September 11, 2023, the company executed a **1-for-20 reverse stock split** of its common stock and changed its name to **Super League Enterprise, Inc.**, with all share and per-share data retroactively adjusted[18](index=18&type=chunk)[117](index=117&type=chunk)[119](index=119&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 60% year-over-year revenue increase for Q3 2023, driven by a 124% surge in Publishing and Content Studio revenue, alongside significant operating expense reductions and strategic progress [Results of Operations](index=45&type=section&id=Results%20of%20Operations) For Q3 2023, total revenue grew 60% year-over-year to $7.2 million, primarily due to a 124% increase in Publishing and Content Studio revenue, while operating expenses significantly decreased Revenue by Category (in thousands) | Revenue Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | % Change | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Media and advertising | $2,886 | $2,321 | 24% | $6,904 | $7,162 | (4)% | | Publishing and content studio | $3,960 | $1,768 | 124% | $7,547 | $3,994 | 89% | | Direct to consumer | $349 | $419 | (17)% | $1,118 | $1,399 | (20)% | | **Total Revenue** | **$7,195** | **$4,508** | **60%** | **$15,569** | **$12,555** | **24%** | - The **124% increase** in Q3 Publishing and Content Studio revenue was driven by a **$2.3 million (184%) increase** in custom game development and immersive experience revenues for clients like Kraft Lunchables, Hamilton, and Universal Pictures[191](index=191&type=chunk) - Cost of revenue for Q3 2023 increased **71%**, outpacing the **60%** revenue growth, attributed to a significant custom integration and platform media contract with a higher average direct cost profile[190](index=190&type=chunk) - Engineering, technology, and development costs for Q3 2023 decreased by **$1.8 million (46%)** year-over-year, driven by an **$840,000 reduction** in cloud services costs and a **$686,000 decrease** in personnel costs from optimization activities[201](index=201&type=chunk) - General and administrative expenses for Q3 2023 decreased by **$978,000 (30%)** year-over-year, primarily due to lower non-cash stock compensation and reduced depreciation and amortization[202](index=202&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2023, the company's cash position decreased to $1.1 million, with net cash used in operating activities at $14.1 million, raising going concern doubts and necessitating reliance on recent equity financings - The company's cash position decreased from **$2.5 million** at the end of 2022 to **$1.1 million** as of September 30, 2023[214](index=214&type=chunk) - Management acknowledges that recurring losses and cash usage raise **substantial doubt** about the company's ability to continue as a going concern, and future operations depend on raising additional capital through equity or debt financing[216](index=216&type=chunk)[218](index=218&type=chunk) Cash Flows from Financing Activities (in thousands) | Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Proceeds from issuance of preferred stock, net | $12,060 | $0 | | Proceeds from issuance of common stock, net | $1,885 | $320 | | Proceeds from convertible notes, net | $0 | $4,000 | | Payments on convertible notes | ($539) | ($160) | | **Net cash provided by financing activities** | **$13,406** | **$4,160** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no significant exposure to market risks from changes in interest rates, foreign currency exchange rates, or derivative transactions in the ordinary course of business - The company does not currently have exposure to market risks from changes in interest rates, foreign currency exchange rates, or derivatives[266](index=266&type=chunk) [Item 4. Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2023, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are **effective** to provide reasonable assurance that required information is recorded, processed, and reported in a timely manner[267](index=267&type=chunk) - **No changes** in internal control over financial reporting were identified during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[268](index=268&type=chunk) [PART II. OTHER INFORMATION](index=66&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers other required disclosures, including legal proceedings, updated risk factors, unregistered sales of equity securities, and a list of exhibits [Item 1. Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that there are no legal proceedings to disclose for the period - The company has **no legal proceedings** to report for the period[271](index=271&type=chunk) [Item 1A. Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) This section highlights new risks associated with the acquisition of Melon, Inc., including potential integration difficulties and challenges in realizing anticipated benefits - **New risk factors** have been introduced related to the acquisition of **Melon, Inc.**[272](index=272&type=chunk) - The success of the Melon acquisition depends on the company's ability to **efficiently integrate its operations**, which could be a lengthy process and result in the loss of key employees or disruption of ongoing business[273](index=273&type=chunk) - The integration process presents **challenges in coordinating geographically dispersed organizations**, addressing **different corporate cultures**, and may **distract management** from day-to-day operations[274](index=274&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company states that no unregistered securities were issued during the three months ended September 30, 2023, that had not been previously reported - There were **no unregistered sales** of equity securities during the quarter that were not previously reported[276](index=276&type=chunk) [Item 5. Other Information](index=67&type=section&id=Item%205.%20Other%20Information) The company reports that there is no other information to disclose for this period - The company has **no information** to report under this item[279](index=279&type=chunk) [Item 6. Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Underwriting Agreement, Certificate of Amendment for name change and reverse stock split, and officer certifications - Key exhibits filed include the **Underwriting Agreement** for the August 2023 public offering, the **Certificate of Amendment** for the reverse stock split and name change, and **Sarbanes-Oxley certifications**[281](index=281&type=chunk)

Super League Gaming, Inc. (SLGG) Q2 2023 Earnings Conference Call August 14, 2023 5:00 PM ET Company Participants Ann Hand - CEO Conference Call Participants Howard Halpern - Taglich Brothers Scott Buck - H.C. Wainwright & Co. Operator Greetings, and welcome to the Super League Second Quarter 2023 Conference Call. Please note, this conference is being recorded. Before we begin, I'd like to caution listeners that comments made by management during this call may include forward-looking statements within the m ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 From the transition period from _________ to _________ Table of Contents Commission File Number 001-38819 SUPER LEAGUE GAMING, INC. (Exact name of small business issuer as specified in its charter) Delaware ...

Financial Data and Key Metrics Changes - In Q1 2023, the company recorded revenues of $3.3 million, which is down compared to the previous year but up 17% on a normalized basis due to prior year adjustments [32][34] - The company successfully completed a $23.8 million capital raise, which included $9.9 million after the end of Q1, allowing for debt extinguishment and M&A earn-out payments [5][58] - The gross margin goal is projected to be in the high 50s to low 60s, supported by the acquisition of Melon and the introduction of innovative products [67] Business Line Data and Key Metrics Changes - The reseller or global sales network contributed close to 15% of total annual revenue in 2022, with $3 million of the $20 million revenue coming from these partners [2][10] - The company has a strong pipeline with 42 six-figure deals, including 17 deals over $500,000 and six over $1 million, indicating a robust sales environment [61] Market Data and Key Metrics Changes - The company serves over 100 brands, with seven customers spending more than $1 million through its platform in 2022 [14] - Gen Z spends over seven hours a week in immersive spaces, surpassing five hours on social media, highlighting a shift in digital interaction preferences [60] Company Strategy and Development Direction - The company is focused on building a premier publishing and monetization engine for the immersive web, moving beyond traditional gaming platforms [38][67] - The acquisition of Melon is seen as a strategic move to enhance the company's capabilities in immersive experiences and improve margins [4][41] - The company aims to diversify revenue streams, moving towards high-margin direct-to-consumer models and reducing dependency on traditional advertising [20][67] Management's Comments on Operating Environment and Future Outlook - Management noted that Q1 was softer than expected due to market headwinds, but Q2 shows strong signs of recovery with advertisers returning [58][12] - The company is optimistic about achieving its $100 million revenue target in three years, supported by a strong pipeline and improved sales force effectiveness [36][67] - Management emphasized the importance of adapting to the changing digital landscape, where immersive experiences are becoming essential for brand marketing [31][60] Other Important Information - The company has cut approximately 35% of its operating expenses on an annualized run rate while continuing to invest in high-growth revenue areas [42] - The company is actively recruiting to expand its sales team, with a focus on optimizing the performance of new hires [22][43] Q&A Session Summary Question: What to expect for the second quarter directionally? - Management expressed confidence in Q2 performance, citing a strong pipeline of deals and a shift in advertiser interest towards immersive experiences [23][24] Question: How does the company measure its pipeline and deal visibility? - The pipeline is measured based on deal size and probability, with larger deals providing visibility further out, especially with annual contracts [25][51] Question: What is the current status of the sales team and their performance? - The company currently has seven direct sellers, with top performers generating significant revenue, and plans to optimize and expand this team [68][69]