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A great deal has changed throughout the company since my return in April of last year, and I’m incredibly proud of the energy and determination of everyone within the business putting together to deliver and continue expansion of this great game. We have proven we have what it takes to bring a quality product to market and to great reception. Much of this is down to a deep understanding of the technology employed to deliver Le Mans Ultimate, technology we own as well as the vibrancy and determination across the organization to do what we are laser focused on, delivering innovative entertainment. This was an important milestone for our business and sets us up for the future. Le Mans Ultimate is based on a licensed series featuring desirable racing pedigree sports cars.

The series undergoing a timely renaissance with incredible manufacturer entries into the real-world sport. Automotive giants such as Ferrari, Porsche, and Cadillac all competing at the top end of the sports, all of whom have been incredibly supportive during the creation of this game. It is our belief that this game now offers a potential springboard from which to launch future downloadable content or DLC as well as development of a console port with the right partner to address what we know to be a much larger gaming audience for the title. With the right focus and ongoing development, we believe we could have a valuable gaming franchise ahead of us, one that leverages the technology, the services and know how we have within our business. Development of Le Mans Ultimate continues apace.

We’re crafting a game into a unique and exciting proposition to a wide range of players. In June this year, the month of the fabled 24 hours of Le Mans race, we anticipate a unique marketing window will be further amplified by the visibility the ACO are expected to provide. With racing fans around the world watching the greatest endurance event, we expect our game will feature throughout the weeklong festival of racing. At the same time, we plan to update the game with a free update that blurs the line between solo and online play. In a world of near infinite choice and countless apps, games and entertainment services vying for consumer attention, we intend to update Le Mans Ultimate with a cooperative feature not typically found within racing games.

Our co-op feature is designed to enable up to three friends, as many drivers as there are per team in the real life Le Mans, to play through chapters of a race, taking turns to drive the car in an ever-evolving story against AI teams. We believe this feature will enable a wider section of racing games to enjoy the unique entertainment of endurance racing without the burden of being online at the same time as their friends. We all have busy lives and Le Mans Ultimate will fit into that so that you can play when you want and still be part of the conversation with friends. Additionally, we’re investigating and developing a number of concepts to enhance our ecosystem through the use of AI or artificial intelligence. While the technology sector is awash with stories of cost saving opportunities through the use of AI, we already run an efficient operation.

And as such, we have been exploring how AI might benefit both storytelling and representation of the people within the sport we recreate. Today, the games industry uses basic AI parameters and decision making to drive cars around a track and avoid obstacles. But we are working on bringing the virtual drivers up to a whole new level of realism. AI drivers complete the skills and dynamic decision-making abilities that will bring players closer to real life than ever before. Players will find themselves more immersed in the story that runs deep through motorsport, and they will find themselves subject to virtual media attention curated and reported on by AI reporters and commentators. All of this will be enhanced by our ecosystem, which puts as much focus on the pre- and post-race as the race itself.

Much of our future development of complementary services and entertainment is built around our vision for accessible yet highly realistic racing experiences. Experiences that can be enjoyed with friends where players feel part of the racing story. We also plan to introduce new content to begin where the current game contains the tracks and cars from the prior season, the centenary of Le Mans last year. We know from our player base; they want to see the game updated to include the changes for this season. We plan on releasing a steady flow of content through the second part of this year. The initial piece of this new content will be free as will other select items as a thank you to the community that has given us great support to purchase our game during early access.

We expect premium paid content will then be made available shortly thereafter, which we believe will offset the cost of ongoing development and broaden the appeal and uniqueness of our officially licensed title. Furthermore, we are bringing subscription service to both rFactor 2 and the Le Mans Ultimate products, leveraging our race control platform, which has over 100,000 registered users all playing within our ecosystem. A gradual ramp of subscription is expected as we build the value proposition for players looking to get even more entertainment out of this exciting experience. Although we believe the free component of the online race control offering will continue, it is up to us to convince players of the value presented by a subscription service.

With the games, technologies, online service and our plans for Le Mans virtual, one of the biggest racing Esports events in the world, we believe we finally have the pieces in place to soon derive greater revenues from complementary services built around our core game. Aside from the success of our recent game release, we continue to make progress towards business efficiently and an improvement of our balance sheet. We recently announced the settlement of the previous license dispute and liability with BARC, TOCA Limited, the exclusive promoter of the BTCC, which is the British Touring Car Championship, for a significantly reduced figure. We also entered into a new licensing deal with them, which we expect will lead to further releases of official BTCC downloadable content for rFactor 2.

A computer technician working on a video game console with a gaming headset.

This deal is beneficial to both parties and we are grateful to our partners of British Touring Car Championship whom we are pleased to be working with again. This was a positive step, one of many undertaken over the last several months. Additionally, last week, we sold the assets relating to traction, our previous motorsport and racing games community content platform to a third party for $250,000 in total consideration. I previously announced we had closed this outlet in Q3 2023, and the sale of this asset brings yet more focus for the company on creating high quality racing games along with additional working capital. We retain the rights to use the channels for future Le Mans virtual eSports events to ensure that they receive the reach they deserve when the award-winning competition returns.

In the past, I’ve made a number of references to what we believe to be a somewhat fragmented team racing landscape, where established game developers bring products to market, which are then kept current and made more accessible by smaller oftentimes and teams with additional content and services from new cars to tracks, learning aids, news and discussion platforms, promoting a sense of community and even car setups. The latter enabling players to focus on driving and less so on the engineering element of motorsport. We are now gearing up to provide access to our ecosystem and games through official partnerships, integrating suppliers of services and content we ourselves do not intend to divert resources to building. This should provide a cleaner, more accessible environment for customers and bring additional revenue into reach.

But perhaps more importantly, it will enable us to elevate the experience across our games. Just recently, we signed casted up specialist Coach Dave Academy as a preferred supplier of alternative setups for Le Mans Ultimate offered directly from within the game. We expect other service providers to come on board once this partnership is fully rolled out in the summer. These partnerships could provide another source of revenue for the business and elevate our ecosystem to be best in class. Where innovators within our space join forces in Motorsport Games and Studio 397 to make sim racing stronger tomorrow. In time, we would expect to bring online a marketplace for new content and services that are considered non-competitive rather additive to our own business objectives.

In the year since I returned to the company to a business which at times struggled with identity and purpose, we have made tremendous progress. We have strategically repositioned the company around chosen IT and our best development team, enhanced focus, eradicated unnecessary spending and put in place cost control measures all whilst resolving certain outstanding liabilities relating to our prior licenses. We have launched the successful game, a partnership with F1 Arcade and Kindred Concepts that results in recurring license revenue for our technology and expertise and believe we have several potential near term revenue opportunities that are additive to our core focus, which we anticipate coming online over the course of 2024. It has not been easy, but it has been rewarding for us all and we feel there is more to come.

Our goal is to be a developer and publisher of highly innovative experiences, all connected to and enhanced by our ecosystem, at the heart of which is the rapidly growing risk control service. Now I would like to invite Stanley Beckley, our interim Chief Financial Officer to talk about the financial results for the first quarter of 2024.

Stanley Beckley: Thank you, Stephen, and good evening, everyone. As with the previous earnings calls, I wouldn’t be offering any forward-looking guidance today. Instead, I will focus on providing an update on our financial results and highlights from the Q1 of 2024. Revenues for the quarter were $3 million up by $1.3 million or 75.2% when compared to the same period in the prior year. Higher digital game sales were primary drivers for this increase, primarily as a result of the release of Le Mans Ultimate Game PC in February 2024. This was further driven by an increase in revenues earned through the development of simulation platforms for third parties. Net loss for the quarter was $1.7 million an improvement of $3.6 million when compared to the same period in the prior year.

The decrease in net loss was primarily driven by high gross profit and lower operating expenses required to develop and release additional new games. Consequently, EPS for the quarter was negative $0.60 dollars compared to negative $2.33 for the same period in the prior year. We are reporting an adjusted EBITDA loss of $0.4 million for the first quarter of 2024 compared to an adjusted EBITDA loss of $4.3 million for the same period in the prior year. The improvement in adjusted EBITDA loss are the same as those discussed in respect of the change in net income for the period and comparative quarter as well as a decrease in stock-based compensation compared to the prior year period. As it relates to liquidity, this continues to be a key area of focus for the company.

Net cash used in operations for the three months ended March 31, 2024, was approximately $0.8 million representing an average monthly net cash burn from operations of $0.3 million down $1.6 million when compared to the average monthly cash burn of $1.9 million for the three months ended March 31, 2023. As of March 31, 2024, the company had cash and cash equivalents of $1.3 million which we believe is insufficient to fund our operations over the next year and that additional funding will be required in order to continue operations. In order to address this increased 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 of similar transactions, strategic alternatives for our business, including but not limited to the sale or licensing of our assets in addition to the recent sales of our NASSCA license in traction and further cost reduction and restructuring initiatives.

Thank you all for your time. And now I will turn the call back to Stephen for closing remarks.

Stephen Hood: Thank you, Stanley, and thank you to those joining us today. We’ve worked hard over the last 12 months and the result is an upturn in our Q1 results. We still have some way to go, but I would hope you’d agree we’ve turned the page and have positive momentum. We’re excited about the remainder of this year and in particular the upcoming Le Mans event in June. Thank you.

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