Thank you, and welcome to Motorsport Games' fourth quarter and full year 2023 earnings conference call and webcast. On today's call is Motorsport Games’ Chief Executive Officer, Stephen Hood; and Interim Chief Financial Officer, Stanley Beckley. By now, everyone should have access to the company's fourth quarter and full year 2023 earnings press release filed today after market close. This is available on the Investor Relations section of Motorsport Games' website. During the course of this call, management may make forward-looking statements within the meaning of U.S. federal securities laws. These statements are based on management’s current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Except as required by law, the company undertakes no obligation to update any forward-looking statements made on this call or to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. Please refer to today's press release and the company's filings with the SEC, including its most recent annual report for a detailed discussion of certain risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. In today's conference call, we will refer to certain non-GAAP financial measures such as adjusted EBITDA as we discuss the fourth quarter and full year 2023 financial results. You will find a reconciliation of these non-GAAP measures to their most directly comparable GAAP measures as well as other related disclosures in the press release issued earlier today. And now, I'd like to turn over the call to Stephen Hood, Chief Executive Officer of Motorsport Games.

Thank you everyone for joining this conference call today. Throughout Q4 2023, we continued to reduce spending and improve efficiencies across the business, carefully monitoring expenses and working diligently towards our Q1 2024 game release, Le Mans Ultimate. This will be only our second internally developed title and something we aimed to correct as a matter of urgency. The folding of other projects and efforts was designed to focus our efforts around the kind of game experience we believe will set us on the right path, releasing innovative games designed to foster a large player base of engaged users we can call the community. As we focused on the development of Le Mans Ultimate, we came to the understanding that this form of racing suited our vision for the future of racing and driving games. Motorsport Games is all about player participation and not simply the traditional racing games, where only one player can be crowned the winner and where friends become enemies. We believe in building an accessible, highly polished ecosystem that puts community and, most importantly, teams at the heart of the experience. Look at many of the wildly popular games in the market today; you will see they center their experiences around team play. This is starkly absent in almost all racing games. In Le Mans Ultimate, teams comprise three drivers taking turns to drive in an endurance race. This title is our springboard for a vision we have been working towards for the last several months, which we believe signifies a turning point in the recent history of our company. We are finally seeing the results of decisions set in motion many months prior, and they are delivering better than expected results, particularly with the recent release of our new game, Le Mans Ultimate. This has been especially pleasing given the challenges encountered by the business and the tough decisions we've made to try and turn the ship around. The first real signs of positivity have been encouraging, but we recognize that we have some way to go to deliver on what we believe the business is capable of. The positive reception to our recent release has given us a real sense of satisfaction and provides us with a valuable stepping stone, it seems to resonate with our customers. Within the first 36 hours of release on February 20th, it's the early access I might add, Le Mans Ultimate sold as many units as we projected for the opening ten days. It has gone on to continually set above expectations, and we have revised internal forecasted sales numbers to account for this higher-than-expected uptake. We had anticipated selling 18,000 copies in the opening ten days. In reality, the reception was so strong that we sold more than 55,000 copies. Our development team continues to push out fixes and updates to continuously improve the product, which has resonated well with our audience. These green shoots are the result of enormous effort throughout and prior to Q4 2023. We're now pushing ahead on continued development of the title throughout the remainder of this year. We plan to bring exciting new content and features to the Le Mans Ultimate experience, as well as complementary services, which we anticipate will provide additional revenue streams. RaceControl, our online service providing multiplayer functionality to our rFactor 2 and now Le Mans Ultimate games, launched five months ago. It continues to play an important role in the ecosystem we are building around our product and has now surpassed 100,000 account registrations. RaceControl drives regular activity within our games and is vital to our future strategy around community and complementary services. Enabling compensation around our game experiences, even when a user is not playing the game, is important, and to this end, RaceControl is expected to soon have a more user-friendly interface, making it accessible from any web browser. With RaceControl, users will be able to learn more about the games, tips and tricks to get the most from the experiences, and become better virtual drivers. Over time, our plan is to enable users to manage their accounts and experiences from this site using any mainstream connected device, whether it's a phone, desktop, laptop, tablet, and so on. Bringing those parts that made rFactor 2 so successful into the Le Mans project has proven instrumental in landing the core gameplay experience. The update to this technology now forms the basis for an engine we own and expect to leverage for existing opportunities as well as entirely new titles. Our licensing agreement with Kindred Concepts to power their F1 Arcade experience using our game technology is one such area of further opportunity. We are proactively exploring new ideas that may benefit multiple games. The F1 Arcade rolls out to the U.S. site in Boston later this month of April, and we have been supporting this expansion to ensure our technology is experienced in the most positive way. The focus for the year ahead is to continue building the positive momentum around our recent game release with new updates, additional services through RaceControl, downloadable content, and to tap into the valuable marketing opportunities. For example, the actual 24 hours of Le Mans race takes place in June. We believe this will be another opportunity for increased visibility and sales for our Le Mans Ultimate game, as well as the perfect launchpad for our anticipated reveal around the future of the Le Mans virtual series, one of the world's most watched racing esports events of the last few years. Now, I would like to invite Stanley Beckley, our Interim Chief Financial Officer, to talk about the financial results for the fourth quarter and full year 2023.

Thank you, Stephen, and good evening, everyone. As with previous earnings calls, I won't be offering any forward-looking guidance today. Instead, I will focus on providing an update on our financial results and highlights from the fourth quarter and full year 2023. Revenues for the quarter were $1.7 million, down by $2.1 million or 53.7% when compared to the same period in the prior year. Lower digital and retail game sales were the primary drivers for the decrease as a result of no NASCAR games being released in fiscal year 2023. This decrease was partially offset by decreases to sales allowances due to lower game sales and increases to downloadable content, specifically related to the NASCAR Heat 5, Next Gen Car Update DLC that released in June 2023. Net income for the quarter was $2.7 million, an increase of $7.5 million when compared to the same period in the prior year. The increase in net income was primarily driven by lower costs of revenues and operating expenses required to develop and release additional new games, as well as a $3 million gain from the sale of the NASCAR license to iRacing in October 2023. Consequently, EPS for this quarter was $1.35 compared to negative $4.17 for the same period in the prior year. The reduction in overhead spending was in part driven by actions taken under the Company's 2022 restructuring program, which has helped us lower our overhead costs by approximately $6.7 million on an annualized basis as of December 31, 2023, exceeding our target of $4 million in annualized savings by that time. These savings were achieved through changes in global headcount, reducing certain overhead expenditures and improving our internal processes. In addition to the 2022 restructuring program, on October 29, 2023, the company announced a further restructuring of its business due to ongoing liquidity constraints. The announcement confirmed the closure of the company's Australian development studio and resulted in a reduction of the workforce by approximately 40 employees, the majority of whom were based in Australia and the United Kingdom, representing about 40% of the company's global workforce. The company recorded a restructuring expense of approximately $0.5 million related to the workforce reduction, primarily consisting of severance and redundancy costs in the fourth quarter of fiscal year 2023. We are reporting an adjusted EBITDA gain of $0.5 million for the fourth quarter of 2023, compared to an adjusted EBITDA loss of $3.2 million for the same period in the prior year. The improvements in adjusted EBITDA gain reflect the same factors driving the change in net income for the period. Full year 2023 revenues were $6.9 million, down $3.4 million when compared to the prior year period, primarily due to lower digital, mobile, and retail game sales, driven by lower volumes of sales as a result of no NASCAR games being released in fiscal year 2023. The net loss was $14.3 million for 2023 compared to $36.8 million for 2022. Adjusted EBITDA loss was $8.9 million for 2023, an improvement from the $21.2 million loss for 2022. Non-cash asset impairment losses of $4 million and $9.6 million for 2023 and 2022 respectively accounted for a significant portion of the difference between net loss and adjusted EBITDA for the expected periods as well as the $3 million gain on sale of the NASCAR license in October 2023. EPS loss for 2023 was $5.06 compared to an EPS loss of $30.73 for 2022. As it relates to liquidity, this continues to be a key area of focus for the company. Net cash used in operations for the 12 months ended December 31, 2023, was approximately $12.9 million, representing an average monthly net cash burn from operations of $1.1 million, down $0.5 million compared to the average monthly cash burn of $1.6 million for the year ended December 31, 2023. As of December 31, 2023, the company had cash and cash equivalents of $1.7 million, which decreased to $1.3 million as of March 29, 2024. We believe this is insufficient to fund operations over the next year and that additional funding will be required in order to continue operations. To address this liquidity shortfall, we are actively exploring several options, including but not limited to additional funding in the form of potential equity and/or debt financing arrangements, strategic alternatives for our business, including but not limited to the sale or licensing of our assets, in addition to the recent sale of our NASCAR license, and further cost reductions and restructuring initiatives. Thank you for your time. I will now turn the call back to Stephen for closing remarks.

Thank you, Stanley, and thank you to those joining us today. If there is anything to take away from what I've said today, I'd like you to know that we feel like a games company again. With the recent release of Le Mans Ultimate to a very receptive market, we are doing what we know best. I look forward to discussing this further in our next quarter to discuss Q1 2024 results.

Great. Thanks for taking the question and congrats on the strong momentum surrounding the Le Mans game release. One thing I'm curious about is if you could talk a little about how you marketed the game, what channels performed really well and helped to sort of demand outpace expectations? And you mentioned the upcoming race in June and how you plan to sort of build awareness around that. Maybe if there's anything else you can share around those plans as well, that'd be greatly appreciated. Thanks.

Hi, Jason. It's Stephen here. Thank you for the question. It's a good question. We were very interested to see what the reception would be like for a Le Mans title, considering there hadn't been a Le Mans game for many years. I think it's about 20 years now. We are treading new ground. Throughout the development of the project in 2023, we sensed that there was very positive uptake regarding the news around Le Mans Ultimate without spending much on marketing. We knew that the raw understanding and willingness from the community existed for this title. Moreover, we believe this coincided particularly well with new manufacturers entering the World Endurance Championship, which revolves around Le Mans. We've ridden that wave. Teams like Ferrari have been performing excellently, with Lamborghini returning to the space and battling it out with Porsche and BMW. All the world's major manufacturers are now engaging in this new Hypercar class, leading to a significant upswell in interest in this championship. We achieved this without substantial spend; we adopted a direct approach to engage with the community to change the perception of our multiple gains, which historically, through 2022 and most of '23, weren't particularly strong. Instead of pushing the marketing message outward, we were open and transparent with the community, and that resonated well. We haven't utilized typical marketing channels; rather, we've engaged directly with consumers on social platforms like Discord, X, and Facebook. This direct communication has rebuilt trust in Motorsport Games among consumers.

One follow-up just regarding liquidity position and where everything stands today. I know you outlined some of the potential options in the prepared remarks. But just wondering, with the release of the game behind you and some additional revenue from that, whether it has changed the strategy around your cash position moving forward?

Yes. Hi, Jason. I can handle that. In the grand scheme of things, it hasn't eliminated our need for more funding. It helped a bit, but the game has been out for just under a month and a half now, and while we have some short-term relief, I don't believe this has completely turned around our fortunes. As previously referenced in our 10-K, we still have a need for more funding. Our cash position has dipped slightly, but we continue to manage expenses tightly. As we disclosed in our 10-K, we had $1.7 million in cash at the end of December and as of Friday, we dropped to approximately $1.3 million. The cash position indicates we remain under liquidity pressure, but the initial reception of the release of the game does present some promising opportunities.

Jason, if I can add to that as well. Regarding the marketing effort around the Le Mans title and the upcoming race in June, it's true that we see various peaks throughout the year related to the World Endurance Championship calendar, especially Le Mans in June. We expect to do particularly well regarding visibility and additional sales during those times. With Le Mans, we have a joint venture with the ACO, the group behind Le Mans. This partnership supports our goals to raise awareness of the game. With immediate uptake for the product exceeding our expectations, the ACO and Le Mans have offered additional advertising support at the track, allowing us to establish a strong presence there. These benefits from the joint venture will significantly enhance our marketing and visibility efforts, which we plan to capitalize on.

Thank you. Thanks for taking my questions. I was wondering if you could give me an update on the significant reduction of headcount and the closures of some offices. What is the current structure, and where are the offices located?

Hi, Michael, it's Stephen. Good question. Throughout '23, we were trying to refocus and reposition the business, concentrating our efforts around the Le Mans title, which we believe is a springboard for the kind of products and experiences we plan to launch in the future. This concept of racing games built around communities and team play, rather than individuals simply racing against each other, has been pivotal. Our focus was centered entirely around Studio 397, our internally-owned development team. We brought them closer together while scaling back or removing operations building on unsuccessfully the INDYCAR project from our Australian studio. We also closed our Russian office to consolidate our resources and concentrate on delivering a high-quality product. For us, focusing on what quality means for our games was paramount, and Le Mans Ultimate is a successful demonstration of that strategy.

Are all the employees now based in the UK, or is that the main office now?

It's largely the UK and Europe now. Following the recent split, we refer to ourselves as being based in Europe and the UK. We still have some supporting staff in the U.S., so we're effectively a round-the-clock company. However, most of our development and marketing efforts are now centered in the UK and Europe.

In terms of taking Le Mans to the next level, I know that tournament play and the esports element are important. What are your plans to focus on tournament play and really bring the game to the next level in developing that community?

Great question, Michael. While many believe that the route to success for us is to create more titles, we see it differently. We're focused on building community activity around our racing games and driving experiences. This has to go hand-in-hand with creating engaging games. You'll often hear me talk about building an ecosystem because players today expect events, tournaments, competitions, daily activities, and reasons to engage online— no longer is it merely about individual driving experiences. With the RaceControl platform we've established, we're successfully funneling players into a collaborative gaming community. RaceControl currently boasts over 100,000 subscribers and enables players to be part of teams and participate in events. We are at an exciting phase with Le Mans Ultimate still in early access, meaning we have a long way to go, yet it's in a strong place due to the technology we've adapted from rFactor 2. We have powerful tools at our disposal now, and one potential springboard lies in the return of the Le Mans virtual series, one of the most significant esports events globally. It’s crucial that we focus on engaging the 99% of the player base, those who seek community involvement rather than just competitive racing, allowing them to indulge in the fantasy of being a racing driver.

If you were fully funded, what benchmarks and roadmap should investors expect from the company to deliver profitability and initiate growth?

There are many parts to consider, and we need to be flexible according to our current situation. We're exploring multiple paths forward and have received increased inquiries about opportunities since we launched a project that has been well-received. Following a difficult restructuring period in '23, which I think will set us on the right path, we need to ensure we capitalize on the positive momentum of Le Mans Ultimate. There should be no letup on delivering product quality. Many potential customers are still deciding whether to invest now or later, so we must ensure they're excited about our offerings. We have opportunities to incorporate various contents and potentially subscription models linked to the RaceControl service. Furthermore, we have ambitions to utilize the technology from Le Mans Ultimate in new driving experiences. However, we prioritize securing our immediate opportunities before diving deeper. We are learning from past mistakes, and I believe there are plenty of ideas on the horizon that could yield success.

Alright, Stephen. Thank you. That's all I have. Good luck.

I thought Steve was going to close this out, but thank you all for joining. We appreciate your time. Operator, I think we can close this out now.

Thank you. That concludes our conference for today. Thank you all for participating. You may all disconnect.