Motorsport Games(US:MSGM)2022-05-17 02:30Financial Data and Key Metrics Changes - Q1 2022 revenues were $3.3 million, a 34% increase from $2.5 million in Q1 2021, driven by additional gaming sales and esports revenue [17] - Q1 2022 net loss was $16 million, compared to a net loss of $14.1 million in Q1 2021, primarily due to a decrease in general and administrative expenses offset by write-downs for goodwill and intangible assets [17] - Adjusted EBITDA loss for Q1 2022 was $5.6 million, an increase from a loss of $2.8 million in Q1 2021, attributed to a reduction in EBITDA and add-backs related to the IPO [18] Business Line Data and Key Metrics Changes - rFactor 2 contributed 16% of total Q1 2022 revenue, with esports revenue accounting for 11% of total revenues, primarily from the 24-hour Le Mans event [17] - The company is focusing on diversifying revenue streams, which is beginning to show in financial performance [17] Market Data and Key Metrics Changes - The company reported approximately $9 million in available cash on hand, reflecting ongoing liquidity concerns [12][14] - The company is exploring various funding options to resolve liquidity issues, including raising debt or equity [14] Company Strategy and Development Direction - The company is committed to improving the quality of its games and experiences, with a focus on long-term licenses and partnerships with NASCAR, INDYCAR, BTCC, and Le Mans [8][9] - A new NASCAR title is expected to be released in mid-2023, with plans to align future releases closer to the actual racing season [22] - The company is also planning to introduce a brand new NASCAR title for the Nintendo Switch platform in fall 2022 [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that gaming could be a preferred entertainment option during economic downturns, potentially benefiting the business [30] - The company is actively hiring to expand development resources and improve game quality, despite ongoing geopolitical challenges [27] Other Important Information - The company is currently debt-free and is exploring options to ensure sufficient capital for product development [14] - The company is focusing on its core console products while planning to allocate more resources to mobile game production in the future [11] Q&A Session Summary Question: When can we expect the release of NASCAR 2023? - The company is targeting a mid-2023 release for the NASCAR 2023 title, aiming to align releases with the actual race season [22] Question: Can you elaborate on liquidity options and expense reduction? - The company is considering raising debt or equity and may slow the expansion of development resources, which could delay future title releases [24] Question: Are you adding personnel or shifting resources? - The company is expanding its internal resources and hiring more talent across all departments, with no material interruptions in development operations in Russia [27] Question: What is the expected burn rate going forward? - The burn rate has been consistent, and the company aims to maintain or reduce it as they move forward [29] Question: How might an economic downturn affect the gaming industry? - Management believes that during economic downturns, people may turn to gaming as an affordable entertainment option, which could be beneficial for the business [30]