Greetings, and welcome to the Super League Gaming First Quarter 2023 Conference Call. Please note this conference call 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 of applicable securities laws. These statements involve material risks and uncertainties and actual results could differ from those projected in any forward-looking statements due to numerous factors. For a description of these risks and uncertainties, please see Super League's financial statements and MD&A for the first quarter of 2023 ended March 31, 2022, available on SEDAR and EDGAR. Important qualifications regarding forward-looking statements are also contained in Super League's earnings release distributed earlier this afternoon and also available on SEDAR and EDGAR. Furthermore, the contents of this conference call contains time-sensitive information accurate only as of today, May 15, 2023. Super League undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances after the date of this call. I'd now like to turn the conference over to Ann Hand, Chief Executive Officer. Please go ahead.

Thank you very much and Thank you all for joining us today for our first quarter 2023 financial results webinar. The video we just showed was from our IAB PlayFronts conference this March, where we present the power of Super League to top advertisers and agencies. And it really drives home how highly impactful and engaging our products can be. End-to-end immersive marketing programs for brands that deliver off-the-charts ROI, enabling them to meet young audiences right where they are their next generation gaming that is really much more about socialization and creation, and anything they enjoy in their real life, while younger audiences also crave that virtual twin as well. Never did I imagined when I thought about my career that I would have the opportunity to lead a company with a vision to play a role in the forever-changing way the younger generations will gather, collaborate, shop, learn and play. So, let's kick off with some of our first quarter more recent highlights and detail some of the great strides we've made. First, in terms of first quarter revenues, there are a couple of factors at play here to consider. One we were coming off historical peak seasonality spend, as advertisers put the bulk of their money to work as we know in Q4 that holiday spend time, hence our record breaking $7.5 million quarter in Q4. However, Q1 this year was lighter than expected and exacerbated by the continued market headwinds. These are similar results you have seen reflected in countless company's quarterly filings. We were not singled out the continued uncertainty related to the federal interest rate policy, potential recession continuing to loom cause large corporations to delay finalizing 2023 advertising budgets. So, two spent one was like across the board. In terms of Q1 revenues,…

Thank you, Ann. We'll now begin the question-and-answer session with questions from Super League's covering analysts. [Operator Instructions] We did have a question come in from Jack Vander Aarde from Maxim Group. Jack, your line is live.

Okay. Great. I appreciate the update. And great to hear you, you're still on track to that $100 million revenue target, and it sounds like you've had quite a bit of a good action since we last spoke last quarter. So maybe start on the direct seller side, Ann. I think I heard you have seven direct sellers and top sellers can generate over $3.5 million per year when they're optimized. Can you give us some general context, maybe how many direct sellers you had entering last year or even last quarter? And then just kind of what your future targets are for those direct sellers?

Yes. It's a great question, Jack. So right now, we still have a few additional open positions that we're recruiting against. So really, in many ways, we have so much available inventory and opportunity, and we're really one of really the only companies out there that can deliver these end-to-end solutions. So, we're willing to continue to spin up and bring on more resources. We have three open positions right now. Two of those positions of the seven we have right now are newer hires, but there are people who've already been selling in the kind of immersive media experience space. And so, we really like the fact that they can jump up that learning curve faster. And also, frankly, they've already got the pipelines they've established and built in those brand relationships. They can just port right over to us. Two of our top performers last year were hitting that kind of $3 million, $3.5 million mark. So, we know that, that is achievable, especially when you look at the fact that our catalog of what we can do for brands has just grown exponentially. And so, we feel like that's a very reasonable target. And so that tells us that if we have 10 sellers up and running fully optimized, they should be able to deliver $30 million, $35 million, $40 million in revenue. And that's before, again, we get into the indirect resellers. And indirect resellers, just to add to that, they did about $3 million of our $20 million last year was coming through those resale partners, that global sales network. If that's what they can achieve in a year where they are just getting onboarded, and you're again talking about sales teams that have never sold these kinds of products before. This is very different from what they sell usually in their day job. There's nothing to say that we couldn't expect another 6, 8, 10 more from them this year as well. And so those are the kinds of chunky building blocks that give us a lot of confidence, even with Q1 being a bit soft, which again, we weren't singled out there, but it doesn't change our view that we're going to have another step change revenue year.

Okay. Fantastic color there. I appreciate that. And then I'll maybe ask one more and then I'll hop back in the queue. You mentioned the first quarter base seasonally slower than normal, and seen that across some other companies in the ad space. But you did say 2Q advertisers are back, and you continue to work towards that $100 million revenue target. So, can you just give us an idea of maybe what to expect for the second quarter directionally? And just what kind of gives you confidence? You touched on that pipeline of 42 six-figure deals I'm sure that's part of it. And then your direct seller comment as well. But just what gives you confidence that advertisers are back and why are they looking at Super League with those ad budgets?

Yes. I mean, look, in general, there's probably going to be most companies out there that have a heavy digital advertising dependency that aren't going to say advertisers are back. Why do I feel like they're back? They're back because we've always known that our products stand out. They stand out from a performance point of view, but it is actually where the audience is. I think we spoke about this maybe, Jack, on the last call, or maybe it was afterwards when we were catching up. But I have right now, big global companies sitting on hundreds of millions of dollars of media. And those global heads of media have said things to me about the fact that traditional digital advertising that YouTube video, the Facebook ad campaign, the Google ad campaign, it's not performing anymore. They're not getting the performance results, but it's also it's not where their audience is as kind of evidence with some of my remarks where I talked about the shift, kids are now in these immersive spaces more than they're even on social media as we know it. I would just call this the next generation of social media. But I think the reason that we're feeling it is because we know that we're kind of a little bit at the top of the stack. We're not kind of some of the throwaway digital marketing that's not doing well. We are the stuff that the CMOs really want to put their dollars into and they're excited by it and the innovation. And again, the fact that they can reach that elusive audience. So, what we've seen and this is just our best measure is we have a weekly revenue call. And our top sales leaders are there, and they're telling us about what came in the pipe that week, the size of the deals, and you can feel that the tempo has shifted over the last, call it, 45 days. And so that's why we feel comfortable that we're still going to have another step change revenue year, while we haven't given formal guidance and that it's going to be a good 2Q. So, what I like advertisers to be back like with lighter fluid on their advertising dollars, that would be wonderful. But we, right now, are not feeling any caution about our Q2 performance. Again, we don't formally give that guidance, but we're at a stage where we've already kind of got more than a good kind of $5 million underpinned. So, if we're only kind of halfway through, we're feeling good.

Okay. Great. And I said that was my last question. Maybe just one quick follow-up. The deals in the pipeline, the 42 6-figure deals, do you just have a sense, can you just remind us how you measure the pipeline and kind of what the duration of the pipeline is or how much visibility you have into those campaigns being executed? Are those near term? Is that a near-term number? Or is that a general what you've had verbally committed?

Yes. That's the current pipeline of deals we're chasing. Now what does make them more forward or forecastable in many ways. And obviously, we weight that pipeline and measure those deals and probability-wise, as they advance. So, as we're down to maybe there's only one other competitor or we've been given a verbal, we move it to a higher probability in the pipeline. But inevitably, because they're bigger, it often means that they are more about 2Q, 3Q, 4Q spend. So, when you're traditionally in a digital media business, a lot of campaigns are real short term. "Hey, I've got a new movie release coming out next week. Let me throw 50k at you." And look, we'll take those deals too and we do. But when people are asking us to run programs that have an immersive experience attached, no different than what we did for Mattel with Barbie DreamHouse, recreating a gameplay experience and they bought our media products. Those things have a little bit longer lead times and they're big and chunky. They're kind of like tent poles for Mattel. And so that means we're getting a line of sight much further out. And so just by the size of deals alone and the fact that they are a combination of experiential and media means that we're able to see kind of a good two quarters out, if not more. Now once we start running things that are annual like programs like what we're doing for Yas Island and others, again, those are annual contracts. So that even gives us more of that ability to look forward.

Okay. Really great color there, Ann. I appreciate the time and will hop back in the queue. Thanks.

Thank you. And it looks like we've reached the end of our question-and-answer session. I would like to turn the floor back over to Ann for any further comments.

Well, I just want to say thank you so much for hanging out with us today. It's always a pleasure to have these touch points and to get to connect with some of our analysts. Be on the lookout for us at upcoming investor conferences and as well, you'll see more and more of Super League getting out there at key marketing conferences and thought leadership in this space because, again, we're super excited about the leading position that we're building. And just stay tuned for more good news. Like I've said from the beginning of this call, our strategy is working. Thank you.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. Thank you for your participation.