Motorsport Games Inc. (NASDAQ:MSGM) Q3 2022 Earnings Call Transcript

Dmitry Kozko: We have one more product release. We actually have seen our NASCAR franchise fans are still playing our 2020 title, the NASCAR Heat 5 title. Quite a few players are still in there enjoying themselves. So, we thought why not give them 2022 content update. So, we’re still working on couple of final polishes to deliver that content pack to them. So, they will be an interesting one, because I don’t think our company in its history has provided this type of update to a product that’s essentially two years old. But we recognize that’s what our players are enjoying. So, we’d like to give them some additional content that would further increase enjoyment.

Michael Kupinski: And is there marketing spend around that particular product, or is this just something that you are planning just to offer to the existing fan base and hope that — I don’t know how much you would, how much marketing muscle you would put out behind an update like that?

Dmitry Kozko: We continue to spend our budgeted marketing cost until the end of the year. We have made some optimizations to such, taking some of those spends more towards the track experiences. So, we get a chance to not only promote our products, but also gather on field feedback from the actual users. Just like I mentioned before, those are things that I enjoy also participating in and seeing those things firsthand together with the great team. That’s how we optimized it. But we are getting into holiday sales very soon. So, we do not want to reduce any of our marketing abilities or sort of muscle that we already planned for to not decrease kind of the opportunity size that we could seize from the holiday season. So, as far as I’m concerned, we are focused as an entire company on product of development, but we are not ignoring the upcoming holiday season. And our budgeted marketing spend towards that holiday season are staying in intact.

Michael Kupinski: And Dmitry, you may not be able to answer this question, but I thought I’d ask it anyway. In terms of the cash burn then, can you give us your thoughts in terms of the cash burn for the upcoming quarter and what the shortfall might be?

Dmitry Kozko: So, as you know, Michael, we don’t give sort of guidance numbers at this moment. But I think it’s fair to assume, as we go into this, as we are in this Q4 and we just published our Rivals game, which does have cost attached to it when it comes to physical game cards that we had to manufacture, produce and distribute et cetera, so our normal monthly burn rate is still around that $1.5 million or so range, like we previously stated. So, I think it’s fair to assume that, plus what we would potentially lay out or actually have for creation of those game cards could move that needle somewhere between $1.5 million to $2 million on the monthly burn rate.

Michael Kupinski: Got you. Thanks for the color Dmitry and good luck.

Dmitry Kozko: Thank you, Michael.

Operator: Our next question comes from the line of Mike Hickey with Benchmark. Please proceed with your question.

Mike Hickey: Hey, Dmitry, Ken, good afternoon, guys. Thanks for taking my questions. Dmitry, you had some — you had some turnover on your executive team and your Board. Can you just give us some context in terms of why that occurred and how you are thinking about refilling some of those positions? Obviously, you can only wear so many hats. Funding is probably your number one priority. But as you sort of think about getting that funding and moving into €˜23 and building your next game, how do you rebuild your routine here?