Financial Performance - Revenue for Q3 2024 totaled $4.4 million, a decrease of $2.8 million or 38% compared to $7.2 million in Q3 2023[252]. - Cost of revenue for Q3 2024 decreased by $1.9 million or 42% to $2.7 million, reflecting the 38% decrease in quarterly revenues[253]. - Gross profit margin for Q3 2024 was 39%, up from 35% in the prior year comparable quarter[254]. - Total operating expenses for Q3 2024 decreased by $1.9 million or 26% to $5.2 million compared to $7.0 million in Q3 2023[255]. - Net loss for Q3 2024 was $3.6 million or $(0.54) per share, compared to a net loss of $3.0 million or $(3.19) per share in Q3 2023[255]. - Revenue for the nine months ended September 30, 2024 totaled $12.8 million, down from $15.6 million in the comparable prior year period[256]. - Cost of revenue for the nine months ended September 30, 2024 decreased by $1.9 million or 20% to $7.7 million compared to $9.5 million in the prior year[257]. - Total operating expense for the nine months ended September 30, 2024 decreased by $8.7 million, or 34%, to $17.3 million compared to $26.0 million in the prior year period[258]. - Net loss for the nine months ended September 30, 2024 was $11.3 million, or $(2.00) per share, compared to a net loss of $17.1 million, or $(10.25) per share, in the prior year period[258]. Revenue Breakdown - Media and advertising revenue for the nine months decreased by $2.3 million, or 33%, to $4.6 million compared to $6.9 million in the prior year, primarily due to a $2.4 million decrease in on-platform related media sales revenue[267]. - Direct to consumer revenue decreased by $387,000, or 35%, to $731,000 compared to $1.1 million in the prior year, reflecting the impact of the sale of Minehut Assets[272]. - The decrease in influencer marketing revenue for the nine months was $730,000, partially offset by a $541,000 increase in off-platform related media sales revenue[267]. - The company experienced a $1.3 million, or 33%, decrease in publishing and content studio revenue for the three months ended September 30, 2024, compared to the prior year[267]. - The company reported a $102,000, or 29%, decrease in direct to consumer revenue for the three months ended September 30, 2024, compared to the prior year[267]. Acquisitions and Partnerships - The company entered into a binding term sheet with Infinite Reality to acquire various assets, including a cash amount of up to $20 million and a credit facility of $30 million[239]. - The company acquired Melon, Inc. for a total consideration of $900,000, with potential contingent consideration of up to $2.35 million based on revenue milestones[248][250]. - The partnership with GSTV aims to integrate physical and digital retail engagement, bringing Super League's gaming news segment to millions of viewers at fuel and convenience retailers[262]. - The strategic partnership with Meta-Stadiums focuses on creating immersive experiences in the metaverse for music artists and sports teams[260]. - The initiative with Common Sense Networks targets age-appropriate content for kids, connecting brands with young audiences across major platforms[261]. - The partnership with Chartis enhances capabilities for brands in Fortnite Creative, tapping into a network with nearly one billion monthly impressions[263]. Expenses and Cost Management - Noncash stock compensation expense for the nine months ended September 30, 2024, decreased by $1.2 million, or 55%, to $986,000 compared to $2.175 million in the prior year[271]. - Selling, marketing, and advertising expenses decreased by $764,000, or 24%, for the three months ended September 30, 2024, primarily due to a $335,000, or 63%, reduction in amortization expense related to intangible assets[277]. - Engineering, technology, and development costs decreased by $1.2 million, or 56%, for the three months ended September 30, 2024, compared to the same period in 2023[280]. - General and administrative expenses decreased by $336,000, or 15%, for the three months ended September 30, 2024, totaling $1,935,000[280]. - Personnel costs in general and administrative expenses decreased by $164,000, or 30%, for the three months ended September 30, 2024[280]. Cash Flow and Financing - As of September 30, 2024, the company had cash and cash equivalents totaling $0.3 million, down from $7.6 million as of December 31, 2023[308]. - The company incurred a net loss with an accumulated deficit of $263.7 million as of September 30, 2024, and net cash used in operating activities for the nine months ended September 30, 2024 totaled $8.2 million[309]. - The Company raised approximately $1.0 million through a registered direct offering of 1,136,364 shares at a price of $0.88 per share[312]. - The Company entered into a loan agreement for $1.85 million with an interest payment of approximately $0.78 million, requiring 28 equal payments of $93,821.43[313]. - The Company reported net cash provided by financing activities of $1.297 million for the nine months ended September 30, 2024, compared to $13.406 million in 2023[322]. Strategic Outlook - The Company is exploring strategic partnerships and acquisitions to raise capital for growth, which may involve additional equity or debt financing[314]. - The Company continues to face substantial doubt about its ability to continue as a going concern due to adverse global economic conditions[310]. - The company elected to report as an "emerging growth company," allowing it to take advantage of certain reporting exemptions[349]. - The company will remain an "emerging growth company" for up to five years unless the market value of its common stock held by non-affiliates exceeds $700 million[351]. - The company is not currently exposed to market risks from changes in interest rates or foreign currency exchange rates[352].
SUPER LEAGUE GAM(SLGG) - 2024 Q3 - Quarterly Report