Good afternoon, everyone, and thank you for participating in today's conference call to discuss Super League Gaming Financial Results for the Third Quarter Ended September 30, 2019. Joining us today are Super League’s President and CEO, Ann Hand; and CFO, Clayton Haynes. Following their remarks, we’ll open the call for your questions.

Before we go further, please take note of the Company's Safe Harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995. The statement provides important cautions regarding forward-looking statements. The Company's remarks during today's conference call will include forward-looking statements.

These statements along with other information presented that does not reflect historical fact, are subject to a number of risks and uncertainties. Actual results may differ materially from those implied by these forward-looking statements.

Please refer to the Company's recent earnings release and to the Company's reports filed with the Securities and Exchange Commission for more information about the risks and uncertainties that could cause actual results to differ.

I would like to remind everyone that this call will be available for replay through November 20, 2019, starting at 8 pm Eastern Time tonight. A webcast replay will also be available via the link provided in today's press release as well as on the Company's website at www.superleague.com.

Now, I would like to turn the call over to the President and CEO of Super League Gaming, Ann Hand.

Ann?.

Thank you and good afternoon everyone. Really appreciate you joining us for our third quarterly conference call. In many ways our company achieved significant momentum during the third quarter, which we were excited to share with you.

We feel like the flywheel effect has begin to kick in as we start to achieve some critical mass with our key performance indicators and the growing array of revenue opportunities that has started to crystallize over the past 90 days since our last call.

This afternoon, I will review the accomplishments of the quarter and Clayton will cover the financials, but what I really want to emphasize is how the pieces of the puzzle we've been talking about this year are starting to pull on to place to put Super League at the epic center of a world for competitive gamers. It's coming together.

We're on track and we're ready to share more data to help you feel more informed about how this can play out. So first, quick review of some of the top commercial highlights since our last earnings call in August; first, it's probably one of our most significant commercial advancements of the year.

We announced the partnership with ggCircuit that offers B2b software solutions for gaming centers and extend our reach overtime to more than 600 gaming centers around the world. A gaming center is like an internet cafe.

It's where competitive PC and console gamers go to use high powered equipment and connections as they complete and socialize around the games they love. While the street may not fully understand the bigger opportunity here, it is not just about a material acceleration of our retail footprint.

It is about the power of our combined B2B2C technology that can become an even greater scalable solution that can extend well beyond gaming centers and apply to all kinds of retail.

In addition, this captive audience of gamers, 200,000 unique monthly visitors and 1.6 million registered player accounts has represented by these 600 locations offers a right segment to initially introduce Super League Prime, our new monthly consumer subscription service launching in beta on November 18.

Starting in North America at a price point of $7.99 per month, players will be encouraged to sign up for Prime to get tangible valuable benefits including free game play hours, accelerated reward points and access to exclusive game play and pricing.

Also in addition to our expansion of titles, we have deepened our focus on Fortnite through a series of tournaments the ggCircuit powered gaming centers around the world, starting in October, offering a total sponsor prize pool of $135,000 for everyday gamers to have their chance to get recognized and win.

So far with just three of them completed, we have had 10,206 entrants participating. They've completed 75,537 matches and that all took plays across 460 unique venues. Additionally, we continue to expand our brand partner relationships and are introducing Tencent's PUBG Mobile title onto our platform starting in December.

These experiences will take place at Dave and Buster's locations across the United States. Also of note on the brand partner side, we joined forces with Sprint to support their national 5G launch, hosting the large scale 5G mobile gaming tournament in Los Angeles, bringing together passionate gamers, the press and Sprint executives.

And while making it to the esports professional ranks is still a highly aspirational goal for the 2.6 million gamers around the world. We were thrilled to see Blaze Elmore, a long time Super League, and one of our Clash Royale stars use the Super League platform for level up skills and garner a spotlight for talent.

The result, Blaze was signed by Team Dignitas a professional team to become a full time professional esports athletes as recently covered by the Los Angeles Times, and it's important to note the Blaze is only 17 years old. Top players seeking us out validates the unmet demand gamer tap for more competitive gaming.

The top professional team using our experiences in events for recruiting validates the need to spot and foster talent. So, this is just a sampling of the significant commercial highlights but I hope you will feel we've had a fairly steady drumbeat of progress this year. And that will continue.

As I said on the last call going public has been empowering to act more boldly and accelerate our future faster. Now shifting to revenue, let me first refresh everyone on our business model, so we're all starting at the same place.

Super League is a branded house of live and digital gamer experiences and offers with the core building blocks of our Super League powered retail network, and a variety of proprietary digital entertainment channels. Simply put, our opportunity is to monetize gamers, and the content they generate through our platform.

We speak not just to a wide range of gamers across game titles, ages and skill levels, but also a wide range of content capture well beyond just gameplay.

This positions Super League as not just a tournament operator, but a lifestyle and media company focused on capturing, generating, aggregating and distributing content across genre of all things esports. So to be more specific for an example, our Minehut digital property feels like a Facebook for Minecraft kids to socialize and connect.

It's about much more than just the gameplay and our Framerate social channels across Instagram is a brand that allows everyday gamers to submit their gameplay highlight reels.

Those user generated and submitted highlights can be for any game from any gamer anywhere, which then becomes our content to promote, repackage and monetize in a variety of ways.

The fundamental drivers are creating deep community engagement through our highly contextualize local experiences that when coupled with the critical mass of large digital audiences, provides the depth and volume for content and offer monetization way beyond the classic advertising model.

It's the powerful combination of those physical and digital nodes with Super League platform as the hub that creates real leverage for a greater share of not just the customer's wallet but also the advertisers' wallet. So back to monetizing gamers in their content, let's start with content monetization, which can be broken into fourth stream.

First classic brand sponsorships of our owned and operated properties. Similar to the deals we've done historically with Red Bull and Nickelodeon. Second brand partner programs, these are more customized gaming offers that use our platform flexibility, we also refer to this as platform as a service.

This can be a venue partner like Topgolf who wants to create a specifically for their players, a game publisher like Tencent or even a brand partner like Logitech. On our last call, I shared a case study where a digital only activation for a brand on our platform enabled us to secure $40 to $50 CPMs, which is topped here.

And when we marry up our digital properties with our live e-sports experiences for brands, we have seen CPMs in the ranges of $100 to $150 a CPM. So we have proven that top-down engagements with brands whether it is more classic sponsorship or custom programs elicits strong buy rates.

Thirdly, we now have an opportunity to deliver more traditional advertising revenue. Until recently we have not had the type of digital reach or eyeballs as they call it, but that has changed over the last quarter.

However, unlike low tier commoditized advertising models, we're still able to offer media buyers a direct channel to this attractive, somewhat elusive gamer targets offering premium engagements and commanding equally premium CPMs. So, this is valuable ad inventory we are mapping. It isn't $1 to $5 CPM buys like you usually see.

In fact, if you just look at our current inventory of 30 to 40 million monthly views across digital channels and we're still growing and apply to conservatives $15 CPM, it represents over 5 million in potential ad revenue per year in addition to our brand partner and sponsorship revenues, and that 5 million is the floor and just one dimension of content monetization.

To that end, we have brought in former media sales executives from Twitch and Amazon to help us evaluate the value of this ad inventory and build a sales team to deliver against the opportunity.

And the fourth revenue stream under content monetization is the way that we can monetize the gaming content we're generating through third party content licensing.

While we have not done much of this today, we are amassing a large and diverse library of competitive and social gaming content that we already know is of interest to many different types of distribution channels out there, whether it be linear streamed or social.

So now for the second vector, let's talk about gamer monetization or otherwise we can put it as direct to consumer offers. There are four primary ways we can monetize our community of gamers.

So first one, traditionally we have times charged tournament fees on select experiences and can elect to do that in the future when we feel that the premium and experience where it's justified.

Secondly, we have lightly just into consumer products, selling super league city and city club branded merchandise, and we believe that consumer products over time could continue to be an interesting complimentary, revenue stream for the direct to consumer space.

The third type of revenue stream for gamer modernization is really where we think the big idea has been. We've always held the point of view that a monthly subscription model was one path to material recurring revenues.

Once we had built an adequate user base with a compelling offer entry points, we stated in our road show that our intention was to introduce a subscription offering for queue and we are delivering on that promise with this month launched Super League Prime.

To reiterate, we are initially launching through ggCircuit power gaming centers and their captive audience of 200,000 monthly unique users and 1.6 million registered accounts.

So we envision Super League Prime is an offer over time that can be relevant to a large market of gamers wherever they choose to gameplay and socialize as part of our community. We think starting with this captive audience is smart. No inefficiently spent marketing dollars. Players are sitting at PC screens already engaged.

They will convert into Super League loyalty program and have direct prompts the upgrades of prime at a low to no customer acquisition cost. At a $7 and 99% per month price point as mentioned earlier, we will do a phased rollout across North America over the next 60 days and expanding globally early next year.

And like third party content licensing on the content monetization side of the house, we notice upside on the direct-to-consumer side as well. We're exploring digital goods and badging, which inside platform will offer attractive revenue and margin potential.

So, next onto our top five key performance indicators, these are the same KPIs we laid out the start of the year and are the metrics we in the board feel map the trajectory and future value of the Company in this early, the fast growing stage. January 2019, feels like a lifetime ago and our progress against these KPIs has been dramatic.

And it's changed the landscape around this and how we accelerate our growth. So let's dive-in. Two of these KPIs, the number of game titles, and the number of retail partner venues bring more gamers to Super League. As we bring more players into our physical and digital experiences.

We gained not only new registered users, but also more gameplay hours that are running through our platform and ultimately more audience right at the top of the funnel, which has an amplification effect on potential revenue and new customer acquisition.

So first game title, we ended last year with four titles, which we accumulated over four years of existence with a target of games at least six by the end of this year.

We met that goal as of our last quarterly call with the addition of Capcom Street Fighter V and Tencent PUBG Mobile, but more importantly, if you look at the programs we're running with Topgolf and ggCircuit partner venues, we are now promoting over 20 titles.

We could not have predicted this back in January, but we always knew a network effects would kick in with critical mass. And our venue expansion has directly led to gain title expansion. And beyond gameplay, you will find dozens of game titles featured on our digital channels of Super League TV and frame rates.

So Super League is now positioned as a destination for all gamers and all games. Again, game title expansion is mostly about customer acquisition, but being game title agnostic also makes us resilience and evergreen. Similarly, our venue growth has been about doing a land grab on the field space for everyday gamers to competitively game.

And now we can see how that venue growth leads to not just more gamers, but more game titles and more gameplay hours as an outcome. We ended 2018 with 46 active venues and grew to 96 total active venues through Q2 with a full year 2019 target of 200 venues as referenced as a starter and just three weeks of fortnight tournaments.

We have seen 460 unique venues participate. When combined with our Topgolf and Cinemark Theatres footprint, we have more than 500 active Super League venues year-to-date. Our third KPI is registered users.

So these are people that have registered in account in some form, and likely participate in a paid or free to play gameplay experience either physically or digitally. At the end of 2018, we had acquired 300,000 registered users cumulatively over four years, and had a goal to double that to 600,000 by year end 2019.

In our 2Q to quarterly call, I was able to report that we had 621,000 registered users through the end of July. And I'm pleased to report that we've achieved 877,000 registered users through October, and as of today, we have eclipsed 900,000 registered users, making the potential to reach 1 million registered users by year end and achievable goal.

Again, this is an indicator of critical math and the amplification effect these KPIs have on each other, which leads us to the next two metrics, gameplay hours and audience.

These are two metrics we set targets against based on the types of offerings we had in 2017 and 2018, which was geared more towards live experiences, while live experiences remain our point of differentiation that attracts top brands to us SSI and CPM, we've been able to build digital reach as well, which straps dramatically impacts these KPIs.

So first, let's tackle gameplay hours. We ended last year with 1.8 million hours and had nearly 5 million through July. This exponential rise is due to our ever expanding digital gameplay channels that provide always on gaming well beyond our live experiences.

Through October, we have pushed over 12 million hours of gameplay through our platform more than six times our 2018 number. Initially, this surge was related to our digital gaming channel nine, but the network effect of our physical retail expansion will start to be a material contributor to this gameplay hour generation going forward.

To headline here, we're facilitating a massive amount of gameplay for our platform and the content library we're creating can be repurposed and distributed in many ways for further content monetization. And this leads to our fifth KPI, which is audience.

It is also the one that we have consistently emphasized as the top of the funnel and therefore the KPIs from which all things. We launched our Super League TV channels last year with modest audience about 1 million views.

We made this small acquisition of frame rate following the IPO and have grown that asset significantly to compliment the organic growth of our homegrown Minehead audience. Our original target doesn't even matter anymore as the game has changed. On our last call, I reported we had achieved 11.9 million views through July.

And because of the ramp up and trajectory that we could see, we were willing to put out a bold goal to get to 100 million views by year end. Well, we've managed to deliver. Our audience growth as of today has reached 96 million views. So we are well on our way to beating our newly adjusted 100 million views full year target.

Earlier in this call, I spoke about the potential value of our ever growing ad inventory, and impressions and views are the key drivers of that. So to summarize, we have dozens of games, hundreds of venues, a password millions of players generating 10s of millions of content hours, with hundreds of millions of viewers.

We knew that taking the Company public would be a catalyst for bolder, faster moves and now that we have a solid foundation. We can begin to realize value to our core assets, our gamers, their content, our platform technology, and our media inventory.

With the announcement of Super League prime, we now have a direct-to-consumer offering to complement our live experiences, strange esports programming, original lifestyle programming and digital gameplay environments, so that gamers can engage with us in a variety of ways for an always on relationship with Super League.

At this point, I'll turn the call over to our CFO Clayton Haynes, who will provide an overview of third quarter financial results, after which I'll come back on with some closing remarks..

Thank you, Ann, good afternoon everyone and thank you for joining us today. As summarized in our earnings release and 8-K filed earlier today, third quarter 2019 revenues increased 129% to $350,000, compared to $163,000 for the third quarter of 2018.

As we stated on our last call, we have continued our focus in 2019 toward offering a mix of paid and free to play events and digital and physical experiences to build audience. And we continue to see the emergence of platform-as-a-service revenue, which, along with brand and media sponsorships generally come with more favorable margin profiles.

Our platform-as-a-service offering, which as Ann mentioned, refers to the more customized gaming offers that use the flexibility of our technology platform was the primary driver of our quarterly revenue growth. On a year-to-date basis, revenues are also increasing 28% over the comparable prior year-to-date periods to $822,000.

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.

Cost of revenue in the quarter increased than a higher percentage than the quarterly revenues due to the due to this specific mix of programs contributing revenues in the quarter with varying direct cost profiles.

However, on a year-to-date basis, cost of revenues remains relatively flat, despite the 28% increase in related revenues due to the realization of operational efficiencies, resulting in lower direct costs for Super League physical continual experiences during the year-to-date 2019 period.

Third quarter 2019 operating expenses were $4.6 million, compared to $3.6 million in the comparable prior year quarter.

The increase was primarily due to our continued focus on hydrating our staff rather than large headcount expansion, including a net increase in the engineering headcount to support the Company's technology platform development, and an increase in technology platforms, infrastructure costs, insurance and other corporate public company expenses.

We continue to be committed to investing in OpEx appropriately to meet the top-line and growth needs of the Company. 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 million for $1.09 per share in the comparable for your quarter.

Non-cash charges in the third quarter of 2019 included $737,000 in non-cash stock based compensation expenses. Pro forma net loss, which excludes the impact of non-cash debt related interest charges in 2018.

Non-cash stock compensation charges and other non-cash charges was $3.7 million for the third quarter of 2019 compared to $2.6 million and a comparable prior year quarter. The increase in pro forma net loss was primarily due to the same operational expense fluctuation factors cited earlier.

As described in our earnings release and 8-K filed with the SEC today. Pro forma net income or loss is a non-GAAP measure that we believe investors can use to compare and evaluate our financial results. Along with other applicable KPIs and metrics discussed by an earlier.

Please note that our earnings release contains the more detailed description of our calculation of pro forma net loss as well as a reconciliation of pro forma net loss with the most directly comparable financial measures prepared in accordance with GAAP.

From a balance sheet perspective, we ended the third quarter of 2019 with $12.6 million in cash, no debt and total shareholders' equity of $17.2 million. With that, I will turn the call back over to Ann for some additional remarks.

Ann?.

Great, thanks, Clayton. In summary, we're excited as ever about the opportunities we see in front of us to grow the business, for well positioned to be at the epicenter of esports for the widest set of competitive gamers. We are materially beating all KPIs we set out at the start of the year.

We expect that the combination of executing our plan and achieving our KPIs will result and significant shareholder value enhancements. There is one thing that I want to make sure that all of you understand about Super League and that's the fact that we are physician very differently than a lot of the other esports players out there.

We own our customers and we always have. So while you hear a lot of people talking about B2C modernization, we are very uniquely positioned as someone who already has been amassing over several years, a very deep community of gamers.

Yes, we have solid B2B partnerships as well which provide us leverage and modernization its own right, but the gamers aren't just coming to Super League to transact. They're coming to engage, to share and to belong.

As our platform continues to become more multidimensional, we can fill in more and more as a competitive gamers' interest becoming integral to their gaming life. And with that, Clayton and I will now take your questions.

Operator?.

Thank you. [Operator Instructions] Our first question comes from Mark Argento from Lake Street Capital..

Hi, Ann, hey Clayton. Just a couple questions. Wanted to drill down a little bit in regards to the new subscription offering that you launched the prime offering for, I think you said it was 799 a month.

Purely, I mean, they're a little bit and tell us, what is -- what's up for gameplayer customers, subscribers getting for the monthly fee?.

Yes. So as I mentioned, we're initially starting this at these as an offer and enhanced offer these gaming centers that I spoke about. And I do want to clarify the reason that that is extremely by intention. Even though prime is intended over time to be something that people can access and find value from at home too.

But when we've talked to some real experts in the subscription business, what they talked about is the challenge that so many companies have and launching subscriptions from zero.

And when they heard that we had an opportunity to take that captive audience of those 1.6 million registered users, that those gaming centers, those 200,000 monthly unique, they got really excited about the idea of, in a way, almost starting with a locked in customer base.

So the way that we have designed prime out of the gate is speaking directly to those people that are already coming and our loyal users of those gaming centers. So usually those people walk in, they sit down behind a PC screen and they start game and play.

Once the Super League Prime is launched in their gaming center, they'll now come in and they'll see Super League branding. They'll see their Super League account, which is their player profile, but it's also managing their loyalty points and rewards. And they'll also be prompted to upgrade that loyalty account to a prime account.

So out of the gate, they will become super league registered users. But then on top of it we will have a way to upgrade them to the paid subscription, so much like a premium model, like you see so much in the gaming industry. For $7.99 cents a month, that player will get two free gameplay hours a month at that gaming center.

Typically, gaming centers charge at a minimum $5 an hour so that's $10 of value out of the gates. They will also earn SP which is the name of our loyalty point system at a 5X acceleration. So they'll earn points faster for their gameplay.

And then there are additional other types of member benefits that really we believe when packaged together out of the gate hopefully makes it a bit of a no brainer to upgrade and see an immediate value. There is a local vault that occurs, so this is the local gaming center operator who puts free things into the vault for people to take.

That's not our liability. This is their incentive or marketing program to get more people to keep coming back to their location versus competitive gaming centers. So you might be able to get a Mountain Dew or a piece of pizza with your points.

But then super league as well has a super vault, which is where you'll see all kinds of neat items, things that we're getting from the professional teams, from a lot of our brand partners that are just added things that gamers can really save loyalty points up to earn.

So there'll be that extra access to the Super Vault as well, which we think will make the loyalty program have a lot of stickiness to it. And a big objective that we have is obviously to ensure that a lot of that vault is really free marketing for brands.

And so it's not us procuring those items for the most part, those are things that actually brands are using our vault as a way to advertise and reach our players..

That's fine. I know it's probably a little premature, but when you think about the gross margin profile, putting, you know, putting aside customer acquisition and all that kind of cost of goods looking this time prime offering.

Have you thought about what kind of gross margin that might look like if you get it ramped up?.

I mean certainly we've always felt that consumer subscription should have a very strong margin profile to it, right? So early on, we certainly are being kind of margin obsessed, right? We really want to get traction. We want to start to understand the lifetime value of our players.

We really, this approach of starting first with this captive audience of these gaming centers does mean a pretty low to no customer acquisition cost, which is great. But certainly, we're trying to make the offer attractive.

That said, we're very conscious about the unit economics of a subscription and not making sure that it is profitable out of the gate, even if it's in a small way. And then we know that we can figure out ways to further enhance and grow that margin.

But we want to invest in it out of the gate, right? We want to really get some quick adoption and take up and really use this beta launch as a way to really get smarter and smarter about how to fine tune it.

So not only is it super compelling to the gamer, but equally that it does exactly what it's intended to do, which is to be a material piece of revenues for us going forward and absolutely to flow cash back to the Company..

Last question for me. You guys done a really nice job is getting originally laid out, 2019 the year kind of trying to create scale, trying to create an increase users, let's say call that it's going to take in place. Do you pivot towards monetization, one or two things we need to really be focused on here.

Is it monetizing, the kind of the streaming day and play out of frame rate? What are the things, the lowest of low hanging fruit in terms of the ability to actually start charging for a CPI that we can look forward in the next couple quarters?.

Well, I mean certainly I've put some metrics out, right? I've given you some proof points of when we've been able with live experiences to reach $100 plus CPM, real brand integrations we've done this year that had been digital only. So therefore super low costs related to them and have been able to extract up $40 to $50 CPM.

Even when we go out to brands now with this new ad inventory that we have, there is much greater inventory that we've just developed with all that digital reach, because it's such a premium by, as I mentioned. We're not going out and saying, take this off our hands for one or two bucks. This is still -- we're pricing these deals at $15, $20, $25 CPM.

So some people, the mathematic digital audiences and then right out of the gate start commoditizing their inventory. We've been much more selective and talked down. So today we've used about 1% of available inventory with these very strategic brand partnerships. We're just moving down to that next tier.

What are relevant brands we can bring in and monetize that inventory, but it's not just about slapping your relevant logos that CPM. We don't need to do that. I think we're going to have a much better brand and strategy by maintain that premium quality lens. If there were two things I'd say, keep an eye on.

I gave you a point of view on what the floor of our advertising inventory was worth. When I said that, if I just fully, just sold it out at 15 bucks a CPM today, it was about a 5 million of value, you can see how much exponentially we've been growing that digital audience. So as that grows, that number grows.

I didn't set for you the ceiling on that inventory. And keep in mind again, that ad inventory is in addition to those brand partners, sponsorship revenue streams. The second thing is let's keep an eye on how we start to prove that we can monetize the gamers themselves..

Our next question comes from Laura Martin from Needham..

Ann, I have a brand question.

On the extended B2B partnership with ggCircuit, can you reminder me what sort of branding around Super League at those 600 gaming centers out these?.

So, we think in the world of the guy that ggCircuit, I knew that there was a pretty powerful way we could take their B2B software that has really become integral to the operations of these gaming centers.

And partner it with really what's where so much of Super League, experience capability, which is we know how to design great experiences for gamers. We have a very strong brand that has a very kind of strong point-of-view on inclusive, positive gaming.

We have the sales and marketing expertise to bring sponsor revenues and other things like that to bear, to even design what would a consumer facing subscription offer look like. And so there came a point in our relationship where we realized that their capability plus ours was like that perfect marrying of B2B, B2C.

And so what you'll see when you see the branding at the, on the screen that those physical venues is, we've made a decision to lean into the Super League brand, because that's the stronger brand, when it comes to the consumer side.

So even a player who has an upgraded to prime in those centers still going to be collecting FP, which are super points, and they're still going to have an opportunity to go into our Super Vault to engage with super leagues participate in our programs, prime is a way to accelerate and gain even greater access to Super League..

Super helpful for brand development, and then I have a question for your CFO, so I'm looking at this balance sheet and it looks to me like your classroom operations are a loss of 10 million and it was 12 million on the balance sheet.

Can you talk about that and how you think about your balance sheet from what your options are going forward to some losses?.

So yes, as you indicated, our current burn rate on a monthly basis is between 1.1 and 1.3 million per month. As Ann outlined, much -- as far as today's is concerned, we continue to make progress on many of the fronts toward growing our revenue and putting ourselves in position to improve our cash flow.

We certainly expect new revenue sources to contribute to our cash flow and that at some point we will be cash flow positive.

Now while we don't give guidance with respect to that and we're not providing a timetable regarding the timing of being cash flow positive, we remain confident in our ability to monetize the opportunities we have as Ann has laid out today.

That said, the management in the board are cognizant of our current cash positions and our cash burn rate; and certainly as a young company, young public company, the option to raise capital is always on the table, especially if additional capital in our judgments, we believe allows us to take advantage of opportunities to increase our revenues or otherwise enhance the value of our business.

At the end of the day, the board and management are consistently assessing the adequacy of our capital, and are considering several options and are currently focused on monetization and growth of the business going forward..

So, one last question just about a recession.

Do you guys think this business is recession proof for going to recession over the next number three years? Is this business that's recession proof, do you think?.

Laura, I love that you asked that question. They always say that sales of lipstick, spiked during recessions is affordable, right. So gaming is affordable and accessible. That's why gaming is has such explosive growth today. It doesn't take the same investment of traditional stick and ball sports and everybody can be a LeBron today.

You can download Fortnite for free on your phone and you can work hard to level up. And so, I think that gaming in general and what Super League is offering is not just extremely accessible, but it's also recession proof..

Is the -- how old is the averages in these average age in these ggCircuit centers do you think of your so ggCircuit player?.

Yes, that's a good question because we do have our used products in Minehut, which is a kind of 10 to 16 year old demo. We like the fact that we're getting gamers young and that we're seeing as a very family friendly, safe brand. More and most of our gaming titles, though are in that classic 16 to 30 year old sweet spot.

And inside the gaming, the ggCircuit center, it's really a classic college student. So, I'd say, 18 to 24 is kind of the sweet spot there..

Thank you. Our next question comes from Mike Latimore from Northland Capital. Please proceed..

Giving your views and the registered users grew fairly dramatically sequentially in the quarter and are certainly tracking wall or head of expectations even a quarter ago.

I guess, can you just give a little more detail on sort of what drove that? Was it Super League specific initiatives? Was it just demand for content or any more insights to what drove the outperformance there?.

Yes, so really over the last six months, we've seen a pretty consistent trend. I think on the last call, I reported that we're seeing about 1000 signups a day. And most of what was really driving that originally was Minehut. We were getting just tremendous growth and have a few hundred thousand registered users on that platform alone.

And again, that's a 24/7 gameplay and, as I mentioned kind of Facebook like social platform for kids playing Minecraft. What is the nice is that we've now started to see two new additional sources coming into registered users. One is running more of these digital or larger scale physical tournaments like the Fortnite Tournament, right.

So -- and that you're physically had to be near one of our gaming venues, but that certainly has brought in some new users into the funnel. And then the other is starting to see some conversion from viewership.

Audiences is at the top of the funnel, some more that we're building strong audiences on frame rate or Instagram channels, and through Super League TV starting to drive some conversion there. So for example, with some of our programming on Super League TV, we actually use the actual program itself to generate people to join the tournaments.

They have to register to do that. And then that's their opportunity to potentially be featured on our YouTube or Twitch channels with their gameplay. So we're kind of using the lower getting your chance to be featured in programming as a way to drive registration.

As far as viewership goes, it really comes down to again, just the power of how quickly we've been able to expand those digital channels. When we bought frame rates, it was averaging about 90 million views a month. We've been able to double that.

But more importantly, you know, we now have a dedicated frame rate got gg channel for Fortnite, we've just launched one for Call of Duty. So we're really starting instead of it just being a generic channel for all gameplay highlights, we're starting to now break it into sub channels that really speak to specific game titles..

And then you sort of highlighted a potential revenue floor for advertising and you've dedicated some, pretty experienced people to address that.

I guess, what are the next steps on kind of getting to maybe that floor level and how long do you think that might take?.

Yes, so, if you think about it, some people said, well, gosh, if you have all this, viewership Why were you monetizing it earlier? So just as a point of reference, remember that on the last call, I reported that through July, we had 11 million views for the full year, which was still beating our targets for 2019.

But now I'm reporting that through today we have 96 million. So this is a new, really good kind of problem to have.

As soon as we started to see that explosive audience growth, really we've got a great board of directors of a lot of experience on media and content monetization specifically the gaming the Mark John, he's the former CEO and founder of IGN, and also COO of Fox Digital.

That's when we started to realize okay, we need to now start looking at this very differently.

So in bringing in those two sales executives to advise us, it's really about first understanding what is all the inventory we just amassed, because actually, if you look at owning like a 24/7 gaming channel like Minehut, there are tons of places where we could be bringing brands into that that don't look like classic advertising real estate.

So the first thing we've been doing is doing that audit. The second thing we've been doing is refreshing some of our sales materials because when I'm out selling to the CEO of Logitech or the head of the gaming business about being a top down brand partner or sponsor, that's a different audience than when you sell to media sales teams.

And so, we're now using or trying to exploit this inventory with a very different type of buyer. And so we refresh those materials to speak to that audience.

And then the other powerful thing that our advisors have helped us do is not only start defining what is the sales team that needs to look like to maximize the value of this inventory, but equally they're opening up their own Rolodex of what they think are interested in reaching this type of game or targets.

So I can't define for you, when we'll start achieving that type of a floor and just classic ad sales. But we put all the things in place this year so that we're going to start 2020 strong..

And then just last, last quarter you gave the PaaS revenue for the quarter, I don't know if you want to do that every quarter, but if you have it, you have that PaaS revenue this quarter?.

Yes, from a Q3 2019 standpoint of the platform as a service revenue was 176,000..

And keep in mind too that really the difference between brand sponsorship revenue and when I called it kind of brand partner, custom programs, early on we were the first users or consumers of our platform.

And so for marketing reasons and brand development, we started running events and experiences, Super League branded and we started and at times we would bring sponsors along the way with us.

We then got to a point at the beginning of this year where we had so much flexibility in the platform that we could turn to somebody to like lodge attack and say, well what do you want it to be? Do you want it to be a see us go tournament? Do you want it to be league of legends? Do you want it to run over four weeks or four days or four hours? And so once we started to be able to create custom programs for these partners, we started to realize that we could start to have a lot more variety and bring a lot more brand partners in.

And those platform-as-a-service deal do have really strong margin profiles against them. The reason why we'll impart that brand partner is paying for a lot of the costs of revenues associated with delivering that program, but also to our platforms become more efficient in term key.

And so that's why you're seeing the trend line we like, which is revenues are improving relative to 2018 that cost of revenues are declining. That makes for better margins..

Our next question comes from Allen Klee from National Securities..

Could you expand a little or help me understand for your advertising strategies? How you can take it across all your or if you were thinking in these terms of all the kind of eyeballs you have to large amount and therefore get higher CPMs or to what degree it will be targeted for specific types of viewers or activities?.

Yes. Our experience is that it's more the higher CPMs come with the richer -- more narrow targeting. When a movie studio is about to release a new kids movie, they don't really want to blast something across all our gamer properties, they want to know that they're reaching 10 to 14 year olds.

When a company like Logitech is wanting to reach a gamers, they actually want PC gamers because they want somebody who needs to buy a new gaming mouse or keyboard, a mobile Fortnite gamer isn't as perfect of a target for them as maybe that league of legends PC gamer.

And so, we're finding that it is our ability to provide that very specific targeting that extracts that higher CPM rates. It's really no different than somebody does a banner ad on espn.com. And you don't really know if that person got up from their desk and walked over to go get some food. You don't really know.

You probably had a one in a thousand shot at hitting a gamer with that type of a banner ad placement. Those aren't the kinds of integrations we're doing. We're able to give brands that direct holds eye, but then also very immediate and measurable results..

And then could you give us maybe a hypothetical what you might think about conversion rates from your viewers or people that go to these centers of what you think might be reasonable for conversion rates to subscription plans and what that could represent?.

To be honest, I just think that given that the beta launch is November 18th, that would not be wise. I mean, we're hopeful that we have a captive audience, as I've said a few times today.

We think that we've designed an offer that they're going to like, but the whole point of the beta is to, as we do this very phased rollout person, North American and then globally, that we fine tune as we go and we improve those conversion rates.

And we're bringing in real talent who knows how to drive subscription programs and really know how to look at that funnel and really figure out those conversion strategies. So I just think it's too soon to tell, to give a point of view on that. But we were making, kind of cautiously, very optimistic that we're launching this the right way..

Thank you. Our next question comes from Brian Kinstlinger from Alliance Global Partners. Please proceed..

There was a question about the average age of someone at gg.

What I'm curious about, given the obvious a free two hours that a member would get on a paid subscription is what are the average hours and active members spends at gg per month?.

Yes, we do have some data and um we know a lot about who those current users are. How many hours they're playing, and it's, it's kind of as you'd expect, it's a bit of a bell curve. You've got this power player who's, you know, engaging in anywhere from six to eight hours a week. So this is become like a core part of their entertainment lifestyle.

Then you've got the kind of person who's popped in for one single event and hasn't returned for the month. But the bulk, I would say are averaging more in that kind of two to three hours a week. So it's one night of their entertainment. But you know, they're then doing other things and gaming at home..

You don’t get two hours free per month right now per week..

That's right. So the kind of sweet spot is someone's playing, call it anywhere from eight to 10 hours a month, that typical user, and this'll be a way to get two free hours..

Right now you mentioned you start the beta in the United States. Can you break down how many sites are in gg U.S. versus international? And I think its November 18th.

Are they all going to be turned on then or it will be a gradual process of bringing site-by-site on?.

Yes, absolutely, gradual. There's about 200 of the 600 footprint is in North America, and we are doing this rollout in waves. So we have a couple locations today already testing the technology.

And then the idea is that we take, we have kind of what we kind of call the top 25, which are just really kind of top tier locations, but also very progressive operators and they are going to be our first wave rollout in beta. And then the idea is after a couple of weeks of beta will rollouts to the remaining the U S footprints..

Last question I have is, assuming mine's from now both the U.S. and international gg beta testing goes very well.

Is your next move to find another partner that has a captive audience, a gamer center, or would it be to think about going direct to consumers at their homes?.

Yes, very much the ladder. So in direct-to-consumers at their homes, but also, I do believe that we're on the tipping point of being able to take this solution that we have for retail brick and mortar and extend the definition of what a gaming center could be in the future.

So much like most people wouldn't have thought of Cinemark Theatres or Topgolf as esports arenas and Super League technology has made that possible.

I believe that we will be able to continue to grow that retail footprint and less traditional types of retail environments and that will be another way to acquire players, acquired customers and bring them into prime and into our funnel. But absolutely the goal is Super League is something available to people wherever they gamed..

Our last question comes from Mike Crawford from B. Riley FBR. Please proceed..

I understand that net cost, value to your network that's growing exponentially.

But as you look into 2020, what KPIs maybe throwaway or become more important or additional to the five that you use now?.

It's a really great question and I can't say that together with the rest of the management and the board, we've locked in on those. We know that the KPIs we set up this year, we believe we're the right ones and really created the right rally cry but also focus in the organization.

It's interesting now that game titles kind of becomes irrelevant, because once you're sitting with 20, 30 game titles and now that we have access to all the games I was being played in these distributed venues. We have more than enough coverage. We're really getting the lion's share of competitive gamers out there with that size of a portfolio.

So I don't think Super League needs to have a hundred or a thousand titles. I think the smartest thing is like any good investor, it's about portfolio management.

How do we keep kind of moving the portfolio around so that we have the right mix of mobile titles, PC console, different ages, different skill levels, and kind of wherever the zeitgeists is going on gaming titles. I mean, certainly, audience growth, top of the funnel will still be critical.

I think retail venue growth is going to get really interesting because of the way we've been able to advance the technology this year. So we used to always talk about, our chance to be a truly scalable retail solution.

And I think the breakthrough we've had in the last few months, and to be able to report that we're now we have 500 active venues I couldn't have even imagined that back in January. And so I think that's made that KPI even more interesting, partly because of what I mentioned in the call that it's because it's the flywheel effect.

It's the way to grab players. But we also grab gameplay hours now we're grabbing more titles through it. So I'm pretty excited about that. So audience retail expansion and then I'll just keep coming back to like users and by that I mean come in premium and let's convert you into prime..

Thank you. At the time, this concludes our Q&A -- our question-and-answer session. I would now like to turn the call back over to Ms. Hand for closing remarks..

All right. Well, we'd like to thank everybody for listening today's call. We look forward to speaking with you at our upcoming conferences or when we report on our fourth quarter results. Please don't hesitate to reach out to us anytime you have any questions and we do really appreciate your time today. We know it's valuable. So thank you..

Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation..