Exhibit 99.1
SUPER LEAGUE GAMING REPORTS THIRD QUARTER 2019 RESULTS
Santa Monica, Calif. - (November 13, 2019) - Super League Gaming
(Super League or the Company) (NASDAQ:
SLGG), a leader in bringing live and digital esports entertainment
and experiences directly to everyday gamers around the world,
reported recent operational developments and financial results for
the third quarter ended September 30, 2019.
Recent Operational Developments
●
Expanded
our partnership with ggCircuit, a B2B software provider for over
600 gaming centers around the world, to roll out new programming
and launch Super League Prime, a monthly subscription service
initially offered to ggCircuit’s global customer base of
1.6MM registered players and 200,000 monthly active
users.
●
Launched
a series of global competitive Fortnite tournaments at
ggCircuit-powered gaming centers with a total sponsored prize pool
of $130,000. This is the first program stemming from Super
League’s expanded partnership with ggCircuit.
●
Announced a partnership with Tencent to
bring PUBG
MOBILE content and experiences
to gamers across the U.S. PUBG MOBILE
is one of the top mobile games in the
world with more than 400 million downloads and 50 million daily
users.
●
Celebrated
the first Super League player to earn a full-time contract with a
professional team as 17-year old Blaze Elmore was signed by Team
Dignitas.
Management Commentary
“In the third quarter,
Super League continued to gain momentum in our evolution as a
lifestyle and media company focusing on capturing, generating,
aggregating and distributing gaming content across the genre of all
things esports,” said Ann Hand, CEO of Super League.
“Our third quarter revenues more than doubled, as we have
broadened the base of revenue sources by significantly expanding
the size of our audience.
“We continue to be on track to meet or exceed our full-year
targets for all of the key performance indicators we outlined at
the start of the year. Through October, we have already achieved
our full-year target for number of game titles and pushed more than
12 million hours of gameplay through our platform which is more
than six times that of 2018. As of today, our venue network has
grown to over 500 venues which is a 10x improvement over prior year
and most notably, with 900,000 registered users and 96 million
views year to date, we are gaining critical mass and seeing the
beginnings of a network effect.
“Super League remains at the epicenter of esports, connecting
fans, game publishers, retail venue partners, sponsors,
professional teams, advertisers and social media companies. As we
grow the number of ways that fans of competitive gaming can enjoy
physical and digital experiences, as well as broaden the audiences
for our social content and elite amateur esports broadcasts, we are
confident that we can drive significant revenue and shareholder
value.”
Third Quarter 2019 Financial Results
Revenues in the third quarter of 2019 increased 129% to $350,000
compared to $153,000 in the comparable prior year quarter. The
increase was primarily driven by an increase in the Company’s
platform-as-a-service and brand & media sponsorship
revenues.
Third quarter 2019 cost of revenue increased 174%
to $192,000 compared to $70,000 in the comparable prior year
quarter due primarily to the increase in related revenues. However,
on a year to date basis, cost of revenues remained relatively flat
compared to the 28% increase in related revenues due to operational
efficiencies resulting in lower direct costs for Super
League’s physical and digital experiences during
2019.
Total operating expenses in the third quarter of 2019 increased to
$4.6 million compared to $3.6 million in the comparable prior year
quarter. The increase was
primarily due to a net increase in engineering headcount to support
the Company’s technology platform development, and an
increase in technology platform infrastructure costs, insurance and
other corporate expenses.
On a GAAP-basis, net loss in the third quarter of 2019 was $4.4
million or $(0.52) per share, compared to a net loss of $5.0
million or $(1.09) per share in the comparable prior year quarter.
Non-cash charges in the third quarter of 2019 included $0.74
million in stock-based compensation expenses.
Proforma net loss for the third quarter of 2019 was $3.7 million
compared to $2.6 million in the comparable prior year quarter. As
noted above, the change was primarily due to an increase in
headcount, and technology platform and corporate insurance
expenses.
At September 30, 2019, the Company’s cash position totaled
$12.6 million with no debt outstanding as of September 30,
2019.
Conference Call
The Company will hold a conference call today at 5:00 p.m. Eastern
time to discuss its third quarter 2019 results and provide a
business update.
Date: Wednesday, November 13, 2019
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in number: (866) 987-6716
International dial-in number: (630) 652-5945
Conference ID: 1769442
Please call the conference telephone number 5-10 minutes prior to
the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Gateway Investor Relations at (949)
574-3860.
The conference call will be broadcast live and available for
replay here
and via the investor relations section
of the Company’s website at www.SuperLeague.com.
A replay of the conference call will be available after 8:00 p.m.
Eastern time on the same day through November 20,
2019.
Toll-free replay number: (855) 859-2056
International replay number: (404) 537-3406
Replay ID: 1769442
About Super League Gaming
Super League Gaming, Inc. (Nasdaq CM: SLGG) is a
leader in bringing live and
digital esports entertainment and experiences to the more than two
billion everyday gamers around the world. The company specializes
in delivering thousands of live competitive and social gaming
events annually, including national city-vs-city amateur esports
leagues featuring multiple top-tier game titles. Events take place
in high-profile venues such as Topgolf, Cinemark Theaters and
popular independent fast-casual restaurants, as well as within more
than 600 gaming centers around the world where Super League also is
the primary consumer-facing brand on player PCs. Complementing and
supporting its live experiences, Super League produces live
streaming and video-on-demand content on superleague.com and major
distribution platforms including YouTube, Twitch and Instagram,
collectively reaching millions of unique players every month.
Highlighted by an avid community of Minecraft players
on Minehut, a
mainstream audience of engaged gamers on Framerate’s social
channels, and an always-on grassroots presence in gaming centers,
Super League is building one of the industry’s most unique
physical-to-digital communities, unified through the positivity of
gaming and the love of play.
Forward-Looking Statements
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995. Statements in this press release that are not
strictly historical are “forward-looking” statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements involve substantial risks, uncertainties
and assumptions that could cause actual results to differ
materially from those expressed or implied by such statements.
Forward-looking statements in this communication include, among
other things, statements about our possible or assumed business
strategies, potential growth opportunities, new products and
potential market opportunities. Risks and uncertainties include,
among other things, our ability to implement our plans, forecasts
and other expectations with respect our business; our ability to
realize the anticipated benefits of events that took place during
the quarter ended September 30, 2019, including the possibility
that the expected benefits will not be realized or will not be
realized within the expected time period; unknown liabilities;
attracting new customers and maintaining and expanding our existing
customer base; our ability to scale and update our platform to
respond to customers’ needs and rapid technological change;
increased competition on our market and our ability to compete
effectively, and expansion of our operations and increased adoption
of our platform internationally. Additional risks and uncertainties
that could affect our financial results are included in the section
titled “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” in our prospectus dated February 25, 2019, our
Quarterly Report on Form 10-Q for the quarter ended September 30,
2019 and other filings that we make from time to time with the
Securities and Exchange Commission which are available on the
SEC’s website at www.sec.gov. In addition, any
forward-looking statements contained in this communication are
based on assumptions that we believe to be reasonable as of this
date. Except as required by law, we assume no obligation to update
these forward-looking statements, or to update the reasons if
actual results differ materially from those anticipated in the
forward-looking statements.
Information About Non-GAAP Financial Measures
As used herein, “GAAP” refers to accounting principles
generally accepted in the United States of America. To supplement
our condensed financial statements included in our Quarterly Report
on Form 10-Q for the period ended September 30, 2019, which
financial statements were prepared and presented in accordance with
GAAP, this earnings release includes proforma net loss, a financial
measure that is considered a non-GAAP financial measure as defined
in Rule 101 of Regulation G promulgated by the Securities and
Exchange Commission. Generally, a non-GAAP financial measure is a
numerical measure of a company’s historical or future
performance, financial position, or cash flows that either excludes
or includes amounts that are not normally excluded or included in
the most directly comparable measure calculated and presented in
accordance with GAAP. The presentation of this non-GAAP financial
information is not intended to be considered in isolation or as a
substitute for, or superior to, the financial information prepared
and presented in accordance with GAAP.
We use proforma net loss, proforma earnings per share (EPS) and
other non-GAAP financial measures for internal financial and
operational decision-making purposes and to evaluate
period-to-period comparisons of the performance and results of
operations of our business. Our management believes these non-GAAP
financial measures provide meaningful supplemental information
regarding the performance of our business by excluding non-cash
stock compensation charges, non-cash interest charges on
convertible debt, and non-cash prepaid in-kind advertising charges
that may not be indicative of our recurring core business operating
results. These non-GAAP financial measures also facilitate
management’s internal planning and comparisons to our
historical performance and liquidity. We believe these non-GAAP
financial measures are useful to investors as they allow for
greater transparency with respect to key metrics used by management
in its financial and operational decision making and are used by
our institutional investors and the analyst community to help them
analyze the performance and operational results of our core
business.
Proforma Net Loss and EPS. We define Proforma Net Loss as net loss
calculated in accordance with GAAP, but excluding non-cash stock
compensation charges, non-cash interest charges on convertible debt
(including accrued periodic interest, periodic or accelerated
amortization of debt discount charges and charges related to
convertible debt related beneficial conversion features), and
non-cash prepaid in-kind advertising charges. Proforma EPS is
defined as Proforma net income divided by the weighted average
outstanding shares, on a fully diluted basis, calculated in
accordance with GAAP, for the respective reporting
period.
Due to the inherent volatility in stock prices, the use of
estimates and assumptions in connection with the valuation and
expensing of share-based awards and the variety of award types that
companies can issue under FASB ASC Topic 718, management believes
that providing a non-GAAP financial measure that excludes non-cash
stock compensation allows investors to make meaningful comparisons
between our recurring core business operating results and those of
other companies period to period, as well as providing our
management with a critical tool for financial and operational
decision making and for evaluating our own period-to-period
recurring core business operating results.
Non-cash interest charges related to convertible debt outstanding,
if any, including accrued periodic interest, periodic or
accelerated amortization of debt discount charges and charges
related to convertible debt related beneficial conversion features,
primarily reflects the attribution of value to common stock
purchase warrants and the beneficial conversion feature embedded in
the convertible debt instruments, and the expensing of these
amounts on a straight-line basis over the term of the convertible
debt as additional interest cost related to the debt. These
non-cash amounts are reflected in other expense and are not
expenses associated with our core business operations. Management
believes that providing a non-GAAP financial measure that excludes
non-cash interest charges allows investors to make meaningful
comparisons between our recurring core business operating results
and those of other companies period to period, as well as providing
our management with a critical tool for financial and operational
decision making and for evaluating our own period-to-period
recurring core business operating results.
There are several limitations related to the use of proforma net
loss and EPS versus net loss EPS calculated in accordance with
GAAP. For example, non-GAAP net loss excludes the impact of
significant non-cash stock compensation and debt related interest
charges that are or may be recurring, and that may or will continue
to be recurring for the foreseeable future. In addition, non-cash
stock compensation is a critical component of our employee
compensation and retention programs and the cost associated with
common stock purchase warrants and beneficial conversion features
embedded in convertible debt outstanding is a critical component of
the cost of debt financings. Management compensates for these
limitations by providing specific information regarding the GAAP
amounts excluded from non-GAAP net loss and evaluating non-GAAP net
loss in conjunction with net loss and EPS calculated in accordance
with GAAP.
The accompanying table below titled “Reconciliation of GAAP
to Non-GAAP Financial Information” provides a reconciliation of the non-GAAP
financial measures presented to the most directly comparable
financial measures prepared in accordance with
GAAP.
Investor Relations:
Sean McGowan and Cody Slach
Gateway Investor Relations
(949) 574-3860
SLG@GatewayIR.com
Media Contact:
Ann Kaiser
(212) 918-2029
ann@high10media.com
SUPER LEAGUE GAMING, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
SUPER LEAGUE GAMING, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
SUPER LEAGUE GAMING, INC.
Reconciliation of GAAP to Non-GAAP Financial
Information
(Unaudited)
SUPER LEAGUE GAMING, INC.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
