Ernexa Therapeutics Inc (ERNA) 2020 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the NTN Buzztime earnings conference call. (Operator Instructions). Please be advised today's conference is being recorded. (Operator Instructions). I would now like to hand the conference over to your host for today, Kirsten Chapman with LHA. You may begin.

女士們，先生們，感謝各位的支持，歡迎參加NTN Buzztime財報電話會議。 （接線生指示）。請注意，今天的會議正在錄音。 （接線生指示）。現在，我將把會議交給今天的主持人，LHA的Kirsten Chapman。您可以開始了。

Thank you. Good afternoon, and thank you for joining us today for NTN Buzztime's First Quarter 2020 Results Conference Call and Webcast. Joining us today is CEO, Allen Wolff. Before we begin, let me remind you that during this conference call, management may make forward-looking statements about the company's plans, strategies and goals and the company's anticipated financial and other performance. Forward-looking statements, by their nature, address matters that are, to different degrees, subject to risks and uncertainties that could cause actual results to differ materially and adversely from those expressed in any forward-looking statements. Those risks and uncertainties that -- are outlined in the company's press release issued today and described in greater detail in Part 1 Item 1A, Risk factors of the company's annual report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on March 19, 2020, and described in other documents the company filed or files from time to time with the SEC thereafter, including in the company's current reports on Form 8-K filed with the SEC on March the 30, 2020, and on April 21, 2020. And the company's quarterly report on Form 10-Q for the quarter ended March 31, 2020 expected to be filed within the next day or 2. The forward-looking statements made today are as of the date of this call and based on current expectations. Except as required by law, the company undertakes no obligation to revise or update publicly any forward-looking statements for any reason. Now it is my pleasure to turn the call over to Allen Wolff. Please go ahead, Allen.

謝謝。下午好，感謝您今天參加NTN Buzztime 2020年第一季業績電話會議和網路直播。今天加入我們的是執行長艾倫沃爾夫。在開始之前，請允許我提醒您，在本次電話會議中，管理層可能會就公司的計劃、策略和目標以及公司預期的財務和其他業績做出前瞻性陳述。前瞻性陳述本質上涉及不同程度地受風險和不確定性影響的事項，這些風險和不確定性可能導致實際結果與任何前瞻性陳述中表達的結果有重大不利差異。這些風險和不確定性已在公司今天發布的新聞稿中概述，並在第 1 部分第 1A 項「公司於 2020 年 3 月 19 日向美國證券交易委員會提交的截至 2019 年 12 月 31 日財年的 10-K 表年度報告的風險因素」中進行了更詳細的描述，並在美國證券公司提交了年 3 月 30 日和 2020 年 4 月 21 日向美國證券交易委員會提交的 8-K 表當前報告。以及公司預計將在接下來的一兩天內提交的截至 2020 年 3 月 31 日季度的 10-Q 表季度報告。今天所做的前瞻性陳述截至本次電話會議之日，基於當前預期。除法律規定外，本公司不承擔因任何原因公開修改或更新任何前瞻性聲明的義務。現在，我很高興將發言權交給艾倫沃爾夫。艾倫，請講。

Thank you, Kirsten, and thank you for joining us today. I hope that everyone is safe and staying healthy during this challenging time. I would like to thank all those fighting the COVID-19 pandemic. Today, I'll share an update on our Q1 2020 results, how we are navigating through the current conditions and the impact of COVID-19 as we plan for the future. If you recall, we started 2020 focused on growing our business in an efficient manner. With the onset of COVID-19, the abrupt and substantial impact it had on the restaurant and bar industry, and therefore, on our business, we turned our focus to maintaining operations and implemented measures to further reduce costs. Today, we have 17 employees, of which, 15 have shifted to work from home and 2 gun our warehouse in the Midwest. I'd like to give a special thank you to these individuals for digging in as we navigate the challenges of 2020. I'm proud of the entire team, whose communication, commitment and execution has been fluid and seamless. First, I'll review our response to COVID-19, including prioritizing higher margin solutions and introducing out-of-venue gameplay.

謝謝你，Kirsten，也謝謝你今天加入我們。我希望大家在這個充滿挑戰的時期都平安健康。我要感謝所有與新冠疫情抗爭的人們。今天，我將分享我們2020年第一季的業績更新，以及我們如何應對當前局勢以及新冠疫情的影響，並規劃未來。如果你還記得的話，我們在2020年開始專注於高效率發展業務。隨著新冠疫情的爆發，它對餐飲和酒吧行業，以及我們的業務造成了突如其來的重大衝擊，我們將重點轉向維持運營，並採取措施進一步降低成本。目前，我們有17名員工，其中15人已轉為​​在家辦公，2人則在中西部的倉庫工作。我要特別感謝這些員工，感謝他們在我們應對2020年挑戰的過程中所付出的努力。我為整個團隊感到驕傲，他們的溝通、投入和執行都非常流暢無縫。首先，我將回顧我們對 COVID-19 的應對措施，包括優先考慮利潤更高的解決方案和引入場外遊戲玩法。

I am pleased Buzztime games continue to drive engagement and play at our open venues. However, due to government shelter in place directives across the country and orders requiring the shutdown of bars, of on-site dining at restaurants and of general retail outlets about 70% of our approximate 1,400 paid sites temporarily suspended their subscriptions to our service. Therefore, our revenue has been significantly impacted since mid-March. We believe subscription suspensions peaked in late April. We are encouraged that some states started easing and lifting restrictions on restaurant and bars in early May. And the number -- a small number of our customers have proactively reinstated their billing as Buzztime is a key part of their venue offering. In addition, for those venues in states that have eased or lifted restrictions on restaurant and bars, we are beginning to end their temporary billing suspensions.

我很高興Buzztime遊戲繼續推動我們開放場所的參與和遊戲體驗。然而，由於全國各地政府發布的居家隔離指令以及要求關閉酒吧、餐廳堂食和一般零售店的命令，我們約1400家付費場所中約有70%暫停了我們的服務訂閱。因此，自3月中旬以來，我們的收入受到了顯著影響。我們認為，訂閱暫停的情況在4月下旬達到頂峰。令我們感到鼓舞的是，一些州在5月初開始放鬆或取消對餐廳和酒吧的限制。由於Buzztime是他們場所服務的重要組成部分，我們的少數客戶已經主動恢復了帳單。此外，對於那些位於已放鬆或取消餐廳和酒吧限制的州的場所，我們正在開始解除其暫時的帳單暫停服務。

That said, we are uncertain when or if our customers will reopen or if they do, if they will continue to subscribe to our service. Thus, we are unable to forecast revenue streams with any degree of certainty because the full extent to which the COVID-19 pandemic will impact our venues and therefore, our business depends on future developments that are highly uncertain and cannot be predicted at this time. As a point of reference, we estimate if we are able to retain 70% of our venues, we could generate approximately $6 million in annualized subscription and related advertising revenue. Due to our contracted team size, we are working creatively to prioritize our development and network engagement. In development, right before COVID-19, we released an in-venue on-screen shorter game experience with Buzztime Trivia Mini Games. A 5-minute gameplay with 2.5 minutes of ad space. This version augments our longer game option. We intentionally utilized the second channel to enable segmentation for audiences attracted to the shorter engagement horizon and to explore more customization options for the future. Opportunities include additional branded experiences, competitions and pricing as well as features to inspire in-venue challenges that encourage invites and sharing.

儘管如此，我們不確定客戶何時或是否會重新開放，或者即使重新開放，他們是否會繼續訂閱我們的服務。因此，我們無法準確預測收入來源，因為新冠疫情對我們場館以及我們業務的全面影響取決於未來發展，而這些發展具有高度不確定性，目前無法預測。作為參考，我們估計，如果我們能夠保留70%的場館，每年可獲得約600萬美元的訂閱和相關廣告收入。由於我們簽約的團隊規模，我們正在創造性地開展工作，以優先考慮我們的開發和網路互動。在新冠疫情爆發前夕，我們發布了一款場館內螢幕短遊戲體驗，名為Buzztime Trivia Mini Games。這款遊戲長達5分鐘，包含2.5分鐘的廣告。此版本增強了我們更長的遊戲選項。我們特意利用了第二個管道，以便對那些喜歡短時間互動的受眾進行細分，並探索未來更多的客製化選項。機會包括額外的品牌體驗、競賽和定價以及激發場內挑戰、鼓勵邀請和分享的功能。

When the effects of the pandemic began to adversely impact our business, we also took immediate action to engage our players through expanded connectivity via our mobile app to offer out-of-venue gaming. This quick transition was fruitful. We experienced an immediate spike in daily active users. More specifically, mobile gameplay from March to April is up over 100%. With this expanded connectivity radius, our daily active user engagement has increased more than 3x. While we will continue to explore out-of-venue opportunities, as businesses reopen and restrictions are lifted or eased, our primary focus will be enabling sites to drive customers in play into venues as they open for business. Although our advertising revenue tapered off at the end of Q1, we had 2.5 months of solid performance at the beginning of the year. We met our expectation to more than double our Q4 2019 programmatic advertising revenue of $80,000 as we recorded over $160,000 in programmatic advertising revenue in Q1 2020. This is a testament to the efficacy of the ad exchange and the strategy to complement subscription revenue with programmatic digital out-of-home advertising. We anticipate bringing the ad network back online in the upcoming weeks as our venues reopen for business. With regards to our hardware business, we anticipate delivering another shipment of tablets to our correctional facility partner in the upcoming months.

當疫情開始對我們的業務造成不利影響時，我們也立即採取行動，透過擴展行動應用程式的連接，提供場外遊戲，從而吸引玩家。這項快速轉型卓有成效。我們的每日活躍用戶數量迅速飆升。更具體地說，從3月到4月，行動遊戲用戶數量增加了100%以上。隨著連線半徑的擴大，我們的每日活躍用戶參與度提升了3倍以上。隨著企業復工復產以及限制措施的解除或放寬，我們將繼續探索場外遊戲的機會，但我們的主要重點是幫助遊戲場所在場外遊戲時吸引玩家進入營業場所。儘管我們的廣告收入在第一季末有所下降，但在年初，我們連續2.5個月保持了穩健的表現。我們實現了預期，即程序化廣告收入比2019年第四季的8萬美元翻了一番以上，2020年第一季的程式化廣告收入超過16萬美元。這證明了廣告交易平台的有效性，以及透過程式化數位戶外廣告補充訂閱收入的策略。隨著場館重新開放，我們預計廣告網路將在未來幾週內恢復營運。在硬體業務方面，我們預計將在未來幾個月向我們的懲教機構合作夥伴交付另一批平板電腦。

Given the state of the economy as a result of the pandemic, the lumpiness of tablet orders and the limited bandwidth our contracted team has to focus on this business, we believe the short-term opportunity to build the hardware business is limited. For example, Spendgo, a party to which we have sold tablets in the past, anticipates orders previously planned for 2020 being pushed into 2021. Therefore, we are exploring creative ways to monetize our inventory and the assets related to the hardware business. In addition to the impact that COVID-19 had on our 2020 first quarter results, our results were also impacted by lower site count during the quarter compared to the prior year and by the sale of our live events business in January 2020. Our Q1 2020 revenues were $2.4 million, compared to $4.8 million in Q1 2019. We reduced SG&A expense to $3.1 million in Q1 2020 from $3.5 million in Q1 2019. For Q1 2020, including noncash impairments of $800,000 for capitalized software and goodwill related to our Canadian business, net loss attributable to common shareholders was $1.2 million or $0.42 per share. This compares to a net loss attributable to common shareholders of $313,000 or $0.11 per share in Q1 2019. Unrestricted cash was $2.2 million at March 31, 2020 compared to $3.2 million at December 31, 2019. Subsequent to quarter end, in April, we received a $1.6 million loan through the CARES Act Paycheck Protection Program. The goal of the program is to maintain jobs in the small business sector, and we are using our loan proceeds for the allowable related expenses.

鑑於疫情導致的經濟狀況、平板電腦訂單的波動以及我們簽約團隊專注於這項業務的有限精力，我們認為短期內拓展硬體業務的機會有限。例如，我們過去曾向 Spendgo 銷售平板電腦，該公司預計原定於 2020 年的訂單將推遲到 2021 年。因此，我們正在探索創新方法，將我們的庫存和硬體業務相關資產變現。除了 COVID-19 對我們 2020 年第一季業績的影響之外，我們的業績還受到本季度與上年相比站點數量減少以及 2020 年 1 月出售現場活動業務的影響。我們 2020 年第一季的營收為 240 萬美元，而 2019 年第一季為 480 萬美元。我們將銷售、一般及行政費用從 2019 年第一季的 350 萬美元減少到 2020 年第一季的 310 萬美元。對於 2020 年第一季度，包括與我們的加拿大業務相關的資本化軟體和商譽的 80 萬美元非現金減值，歸屬於普通股股東的淨虧損為 120 萬美元或每股 0.42 美元。相較之下，2019年第一季歸屬於普通股股東的淨虧損為31.3萬美元，即每股0.11美元。截至2020年3月31日，非限制性現金為220萬美元，而2019年12月31日為320萬美元。季度結束後，也就是4月份，我們透過《關懷法案》薪資保護計畫獲得了160萬美元的貸款。該計劃的目標是維持小型企業領域的就業，我們將使用貸款收益來支付允許的相關費用。

In our 2019 10-K, we included a statement regarding a substantial doubt about our ability to continue as a going concern through March 19, 2021. As a result of the impact of the COVID-19 pandemic on our business and taking into account our current financial condition, we believe we will have sufficient cash resources to pay forecasted cash outlays through October 2020, assuming we are able to successfully manage our working capital deficit by managing the timing of payment to our vendors, other third parties and the obligations to our lender. Additionally, we submitted our plan to regain compliance with stockholders' equity listing standard to the NYSE in late April. Finally, as we know the ability to be a stand-alone publicly traded company is extremely challenging at our size and in this environment, we are evaluating opportunities to monetize our assets and exploring all options.

在2019年的10-K報告中，我們包含一項聲明，表明我們對於能否持續經營至2021年3月19日存在重大疑慮。鑑於新冠疫情對我們業務的影響，並考慮到我們目前的財務狀況，我們相信，如果我們能夠透過管理向供應商、其他第三方付款的時間以及對貸款方的義務來成功管理營運資金缺口，我們將擁有充足的現金資源來支付到2020年10月的預測現金支出。此外，我們已於4月下旬向紐約證券交易所提交了重新遵守股東權益上市標準的計畫。最後，我們深知，以我們的規模和當前的環境，成為一家獨立的上市公司極具挑戰性，因此我們正在評估資產變現的機會，並探索所有方案。

In conclusion, 2020 will be a challenging year for many industries and businesses, including us and our venue partners in the restaurant and bar industry. In that regard, the benefits of our platform become more critical to our customers, influencing dining choice and increasing dwell time, thereby enhancing the guest experience. So we look forward to supporting our customers with Trivia experiences as they reopen for business. Thank you for joining us today. Please stay safe, and I look forward to connecting with each of you directly in the upcoming weeks.

總而言之，2020年對許多行業和企業來說都將是充滿挑戰的一年，包括我們以及我們在餐飲和酒吧行業的場地合作夥伴。因此，我們平台的優勢對顧客而言變得更加重要，它會影響顧客的用餐選擇，增加顧客的停留時間，進而提升顧客體驗。因此，我們期待在顧客重新開業後，透過Trivia體驗為他們提供支援。感謝您今天的參與。請注意安全，我期待在接下來的幾週與大家直接聯繫。

Operator, you may conclude the call.

接線員，您可以結束通話了。

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.

謝謝大家。女士們，先生們，今天的電話會議到此結束。感謝各位的參與，現在可以掛斷電話了。祝各位今天愉快。