Super League Enterprise, Inc. (SLE) Earnings Call Transcript & Summary

Is there a second to this motion?

I second the motion.

It has been moved and seconded that the amendment to the company's amended and restated 2014 stock option and incentive plan to increase the number of shares of common stock available for issuance by 750,000 shares for a total of approximately 2.58 million shares be approved. The motion will now be put to a vote. Again, any registered stockholder who wishes to vote by online ballot may do so now by accessing the voting link previously discussed. Any stockholder whose shares are held in street name through a bank or broker should vote as instructed on the proxy card previously received by e-mail or mail. The next item on the agenda is the proposal to ratify the appointment of Squar Milner LLP to serve as the company's independent certified public accountant for the fiscal year ending December 31, 2020. It is important to note that the Audit Committee or the Board of Directors may terminate the appointment of Squar Milner LLP without the approval of the company's stockholders whenever the Audit Committee or the Board of Directors deems it to be necessary or appropriate. Are there any questions from our shareholders pertinent to this item of business? There does not appear to be any questions with respect to this item of business. I will now ask for a motion from the floor to ratify the appointment of Squar Milner LLP as indicated.

I move that the appointment of Squar Milner LLP as the company's independent certified public accountants for the current fiscal year ending December 31, 2020, be ratified.

Is there a second to this motion?

I second the motion.

It has been moved and seconded that the appointment of Squar Milner LLP as our independent certified public accountants for the current fiscal year be ratified. This motion will now be put to a vote. As a reminder, any registered stockholder who wishes to vote by online ballot may do so now by accessing the voting link previously discussed. Any stockholder whose shares are held in street name through a bank or broker should vote as instructed on the proxy card previously received by e-mail or mail. At this time, I will pause to allow anyone who wishes to vote to do so. [Voting]

Okay. There being no other items on the agenda, I will ask the inspector of election to tally the votes. The polls are now closed.

Clayton, I can confirm I've received all votes and will be providing you with a report momentarily.

Great. thank you, Jessica. I have received a preliminary report of the votes cast and approved by the inspector of election. The preliminary report of the inspector of election shows that each of the director nominees have received the necessary number of votes for election as directors of the company. As such, these individuals are hereby declared elected to serve as directors of the company for at least a 1-year term or until a successor is duly elected and qualified. According to the inspector's preliminary report, item 2, approval of the amendment to the company's amended and restated Certificate of Incorporation to classify the Board of Directors into 3 classes with staggered 3-year terms; item 3, approval of the amendment to the company's amended and restated 2014 stock option and incentive plan to increase the number of shares of common stock available for issuance by 750,000 shares for a total of approximately 2.58 million shares; and item 4, ratification of Squar Milner LLP as the company's independent certified public accountants for the current fiscal year, received in excess of a majority of the shares represented in person, by proxy at this meeting. As a result, items 2, 3 and 4 are hereby approved. The results of the final tabulation of the inspector of election shall be reported on a Form 8-K to be filed with the Securities and Exchange Commission within 4 business days of the adjournment of this meeting. There being no more items on the agenda and no further business before this meeting, this meeting is now adjourned. I would like to extend my sincere appreciation to the stockholders who are in virtual attendance today as well as those who submitted their proxies but were unable to attend. This concludes the formal portion of the Super League Gaming 2020 Annual Shareholders Meeting. Ann and I look forward to joining you all in approximately 3 weeks' time for our second quarter 2020 earnings conference call, where we will update you on Super League's activities and progress through the second quarter of 2020. We would like to close today's meeting, though, with a brief review of some of the business highlights we saw in the first half of fiscal 2020. There were many achievements for the company during the first half of the year through our last earnings call, but 2 of those achievements stand out: one, is the significant surge in engagement that we saw in the first half of the year, and two, is the highlighting of the strength and flexibility of our content production platform technology. From a surge and engagement standpoint, during the first portion of 2020, we saw a dramatic increase in the level of consumer engagement across all of the elements of our platform as measured by the number of registered users, gameplay hours and total views and impressions. This wasn't just in spite of COVID-19. We believe it was, to a certain extent, driven by COVID-19 and the shift to the new normal that we all have found ourselves in. Specifically, through April 2020, we reached 1.6 million registered users, up from 1 million registered users at the end of 2019. We communicated to the stockholders at the beginning of fiscal 2020 that we would be thrilled to get to 2 million registered users for all of 2020. Now reaching 1.6 million registered users, we are beyond thrilled through April 2020. The next metric that we have seen significant growth in is gameplay hours, our key measure of user engagement. For comparison purposes, for all of 2019, we had a total of 15 million gameplay hours. At the start of 2020, we communicated to shareholders that we would be pleased to get to 30 million gameplay hours for fiscal year 2020. Through April, we had reached 16 million gameplay hours, well ahead of the 2020 pace we set for ourselves. The increase in views and impressions has been even more dramatic. In 2019, we had 120 million views and impressions for the entire year. We set an ambitious target for 2020 of tripling that number to 360 million views and impressions. Through April of this year, we have reached 225 million views and impressions. In fact, in April 2020 alone, we had more views and impressions than the full calendar year of 2019. As we have discussed over the past several quarters, increases in views and impressions lead to an increase in valuable advertising inventory. Through April 2020, our ever-expanding advertising inventory was 4 to 5x larger compared to late 2019 when we began to build out our ad inventory. As all companies have seen, advertisers have paused, to a certain extent, in the midst of the pandemic and economic slowdown. But through the first part of this year, we hadn't seen any of our existing programs canceled. Some are just deferred to future periods. Through April, our sales pipeline was larger and healthier with larger average deal sizes than pre-COVID-19, and our pipeline of potential advertising deals was up over 50%. Starting late last year into the first quarter of 2020, we did the work of building out our direct sales team to accelerate the monetization of that growing ad inventory and believe that we can monetize our inventory at premium CPMs, which had been our hallmark. As we discussed earlier this year, we were fortunate that our activities were already approximately 80% digital and 20% in-person. And as a result, in response to the shelter-in-place aspects of COVID-19, it was easy for us to move our existing in-person programs with our partners to digital and online. And since one of the unique features of our 100% remote technology platform is that it is location-agnostic, when retail comes back, we will be ready to take advantage of the related monetization opportunities at that time. As an example and proof point of the flexibility and 100% remote capabilities of our virtual production booth technology for esports applications in the face of the COVID-19 pandemic was with our partner, Topgolf. Specifically, Topgolf wanted to stay connected to their retail members while their locations were closed, and they own the popular video golf game called World Golf Tour. Thanks to the 100% remote feature and flexibility of our technology platform and the flexibility of our partner, we ran amateur virtual tournaments for Topgolf with their World Golf Tour game title. It wasn't just about the players that participated. It was about the large audience of viewers that Topgolf was able to reach on their own digital channels to keep critical engagement with their customers during these times. This brings us to one of the most exciting new growth avenues to emerge for us in recent months, which is our virtual production booth technology, which has powered our opportunities within esports over the years and is proving to have significant applications and opportunities for Super League beyond esports. Our platform is a set of cloud-based automated tools that can accept hundreds of simultaneous remote streams from players and talent while adding in commentators and allowing for directors, producers and audio engineers to join, but everyone is remote. The system can handle all of those feeds plus our live statistics database, along with a bit of artificial intelligence that intelligently curates those speeds, all while overlaying real-time sound and graphics. The results are live streams that are recorded simultaneously through our cloud-based infrastructure that are made available for distribution to multiple broadcast endpoints in realtime, offering a high-quality, engaging broadcast for all, whether for viewing on audience platforms such as Twitch, YouTube and Facebook or for viewing by production staff and talent while producing a show to be aired on a future date. We are excited to announce -- we were excited to announce earlier this year that we were issued a U.S. patent for various components of our technology platform. We believe our virtual production booth technology provides us with new opportunities to generate new revenue streams through content production and distribution deals. Utilizing mostly user-generated content, we have proven that our content can generate material viewership on our own digital channels and that large content libraries are of interest to others to fill their content channels as well. With the power of our virtual production booth technology, it's about more than the esports tournament and live broadcast. It's about the delivery of engaging content to millions for viewing and engagement. This technology, that can make a retail venue come to life with our amateur esports experience, is the same technology we use for all of our digital content production and has significant and exciting applications beyond esports. From a company standpoint, it's not only this content production that is fully remote now. Over the course of late March, Super League and our employees became a 100% remote everywhere company, meaning every single role, including our few Super League content studio staff, are now working from home and can remain that way. We are leaner and nimbler and can flex for whatever the world throws at us. Super League is positioned as more than an amateur esport tournament operator. We are a lifestyle and media company focused on capturing, generating, aggregating and distributing content across the genre of all things esports with significant opportunities beyond esports with our proprietary entertainment broadcast technology platform. As I mentioned, our second quarter results will be reported on or around August 11, 2020. And we welcome all of you to listen to our conference call that afternoon for additional updates on our progress through June 30, 2020, and join the customary Q&A session after the earnings call. I would like to thank each of you for attending this meeting today, and thank you for your interest in and support for Super League. This concludes today's virtual annual meeting. Thank you.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.