Esports Entertainment Group Inc (GMBL) 2022 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Esports Entertainment Group fiscal 2022 Q2 earnings conference call. Today's conference is being recorded.

Before we begin, I'm going to read some brief Safe Harbor statement language. Statements made during this call, that are not statements of historical fact, constitute forward-looking statements that are subject to risks and uncertainties and other factors that could cause our actual results to differ materially from historical results from our forecast. We assume no responsibility for updating forward-looking statements. For more information, please refer to the risk and uncertainties and other factors discussed in our SEC filings.

Now at this time, I'd like to turn the conference over to Mr. Grant Johnson, CEO. Please go ahead.

Thank you, operator. Thanks to everyone for joining us on our 2022 fiscal second-quarter earnings call. Revenues for the quarter came in at $14.5 million, which is up over $12 million from $2.3 million in the same period a year ago and down 11% from fiscal 2022 first quarter.

The biggest takeaway from the fiscal second quarter is that, despite the impact of several challenges that were largely beyond our control, the thesis and strategic value behind putting together our portfolio of brands and assets remains as relevant today as it was when we began this journey with our uplisting in April 2020.

While we saw our first sequential revenue decline in more than a year, the long-term opportunity for Esports business continues to expand, while our iGaming business in Europe remains a healthy growing engine for long-term financial performance. One of the challenges we faced in the quarter was a significant change in the Netherlands regulatory environment, which led us to make a strategic decision to pull our Bethard platform from the country's iGaming online sports betting market.

Still recently, the Netherlands market was unregulated, and we, along with our peers, were operating on a gray basis. As a group, operators in Netherlands had expected the Dutch regulators to allow the existing market structure to operate while rolling out a fully regulated environment. Unfortunately, the regulators unexpectedly decided it's quite late in the process to institute fines for a gray market operation as soon as a regulated site's launched. This unfortunate decision forced our hand to cease operations, resulting in a roughly seven-figure impact on our quarterly revenues. While we are now working to participate in the market with a regulated site, our re-entry will take some more time.

Second challenge we faced was something seen across Europe and even the United States by most sports betting operators: historically low hold in October and December. Historically low hold drove a material decline in our sportsbook revenue during the quarter, which we estimate to be several million dollars.

Unfortunately, hold can be quite volatile and is a natural element of writing sports bets. We expect a return to historical norms going forward. And to that end, we've experienced record iGaming and sportsbook revenues -- sportsbook results in the recent weeks, including our best ever month in the past January.

We were also significantly impacted by the ongoing global pandemic and the rise of the Omicron variant, particularly in December. The increase in COVID cases resulted in the cancellation and delay of many in-person events, including the planned LANDuel launch, which had actually been scheduled this past January 22, 23 at the Hard Rock in Atlantic City, as well as many publisher-sponsored esports competitions.

As a reminder, LANDuel is our new peer-to-peer wagering platform for esports tournaments. The pandemic also forced us to delay the opening of our Helix eSports Center in California.

The combined impact of these two delays, along with the ongoing effects of COVID, have impacted our live events, our Helix centers, the expansion of our LAN centers, the delayed launch of VIE.gg in New Jersey, and they all had a collective impact of several million dollars in the quarter. That said, we still have a strong Esports quarter, which we expect to build on going forward.

While these outside factors had a noticeable impact on our financial performance in the most recent quarter, we are confident they're transitory in nature, and that we have positioned ourselves to grow going forward as the operating backdrop normalizes and we continue to strategically focus our resources on the main drivers of our business: iGaming volumes, e-sports events, increasing the -- our expansion of sports wagering and iGaming into the United States.

As we look into 2022, we expect to benefit from the recent debut of our VIE.gg in New Jersey, as we are now the first operator to offer esports wagering in the United States.

While it's very early days, we are working actively to expand the number of events on the platform to respond to demand from our players and the need for publishers to further monetize their tournaments and matches. We believe the esports wagering opportunity is significant.

Just to offer some perspective, esports events attracted global viewer base of more than 550 million in 2021. That's generally young, digitally native, and affluent. Furthermore, it's estimated there are more than 225 million US video game players, which represents one of the largest entertainment audiences in the country.

During the fiscal second quarter, we also debuted our OMEGA system, provided an all new turnkey B2B solution under the ggCircuit brand that enables businesses, such as movie theaters, shopping malls, family entertainment centers, to offer esports and other gaming options and arcade model.

We estimate the potential installed base could be in the thousands of locations over time, making this initiative a top priority. Operators of all types are actively evaluating the solution, and we expect momentum for OMEGA to build as we move through the second half of the fiscal year.

We also completed the migration of our SportNation.com and VIE.bet iGaming sites for proprietary Idefix platform, further consolidating our tech stack and giving us additional control over our own destiny.

As a reminder, Idefix is a full iGaming sportsbook technology platform we built through our various iGaming acquisitions, which allows us to consolidate payment solutions alongside player account management and regulatory functions.

Finally, we expect to debut LANDuel with a rescheduled event at the Hard Rock Casino in Atlantic City in March 19 to 20 this year. This event will serve as the proof of concept for LANDuel. We expect it to drive, significantly, visibility and interest in this revolutionary solution.

Before turning the call over to Dan, I want to briefly reiterate the thesis that drove our decision to acquire the brands which comprise our current portfolio. Esports Entertainment Group clearly combines the best of esports and iGaming through a diverse array of brands. This combination allows our company to provide avid fans across both esports and iGaming with a comprehensive entertainment offering. It allows our businesses to target two verticals with fast-growing global audience that often overlap.

Our esports segment, EEG Games, the one-stop shop that provides esports enthusiasts with a broad product offering, including in-person experiences, online tournaments, player versus player wagering.

EEG Games is made up of the following components. Esports Gaming League, or EGL, is our Esports tournament organization that offers technology support services for third parties looking to launch online and in-person. EGL allows us to partner with organizations looking to engage the difficult-to-reach fan base and alliances with partners who have significant marketing reach and physical event locations. Our current partners include 10 professional sports franchises and the National Indian Gaming (technical difficulty).

Helix, our esports center that host esports events and tournaments, and attracts as many as 10,000 participants and fan each months.

We currently operate two Helix centers. (technical difficulty) ggCircuit, our B2B provider that offer software support services to third party locations, including sports stadiums, casinos, movie theaters, LAN centers, and our Helix centers. ggCircuit is the provider that created our new OMEGA solution. Today, ggCircuit operates across nearly 1,000 venues and hosts nearly 2 million unique gamers every year.

(technical difficulty) is our proprietary data and analytics software, and, of course, LANDuel, our peer-to-peer competition and wagering platform that debuts this March. It allows skill-based wagering across our network of esports events by facilitating player-to-player wagering and managing prize money. Importantly, we will collect a rake against the wagers placed.

Our iGaming segment, [iGaming], is focused on leveraging its Tier 1 licenses to deliver casino sportsbook and esports [gambling] solutions. Our EEG iGaming currently generates substantially both revenue and financial performance in Europe. The recent launch of the esports wagering in New Jersey represents our first foray into the growing US iGaming market.

EEG iGaming is made up of the following components and brands: Argyll Entertainment, which was our first sports betting and iGaming operator in Europe; Lucky Dino gaming, an online casino brand in Europe with over 25,000 monthly users, and a focus on markets in Scandinavia; Bethard, another sportsbook focused brand based in Sweden; and of course, VIE.gg, our wagering [brand operator], solely focused on esports wagering and powering our recent esports wagering launch in New Jersey.

We believe our collection of assets provides our company with exceedingly bright future. The recent elevation of Stuart Tilly to the role of Chief Operations Officer will also allow us to take full advantage of our future growth opportunities and implement further operating discipline across the business as we look to drive efficiencies given the scope and scale of our brands.

Furthermore, our two targeted entertainment verticals, iGame and esports, remain extremely healthy. We believe we are well positioned to realize tremendous growth potential of our business while achieving the operating leverage inherent in our portfolio of unique and powerful brands.

With that, I'd like to turn it over to Dan. Can you please take us through the numbers?

Thanks, Grant, and good afternoon and good evening, everyone, and thanks again for joining us. We generated $14.5 million of net revenue for the quarter, up $12.2 million compared to the second quarter of fiscal '21, but down $1.9 million, or 11%, versus the first quarter of fiscal 2022 revenue of $16.4 million. Gross profit for the quarter was $8 million, up $7.2 million compared to the second quarter of fiscal '21, and a 19.5% decline from the $10 million gross profit in the first quarter of fiscal '22.

Gross margin of 55.2% in the quarter declined from 60.7% in the first quarter of '22, largely driven by the quarter-over-quarter decline in revenue, which meant the monthly minimums owed to certain supplies accounted for a higher proportion of our cost of sales than historically is the case. It is expected that gross margin will return to the high 50s in future periods.

Sales and marketing expenses were $6.9 million, down from $7.4 million in the first fiscal quarter of '22. Whilst general and administrative costs were $13.2 million compared to $11.2 million in the first quarter of fiscal '22. This rise in G&A reflected an increase in headcount, together with an increase in share-based compensation charges during the period.

Adjusted EBITDA for the quarter was negative $6.8 million compared to negative $4.3 million in the first quarter of fiscal '22. Total net loss for the period was $34.5 million versus a net loss of $7.3 million in the second quarter of fiscal '21 and a net loss of $0.6 million in the first quarter of '22. Included in this $34.5 million net loss figure, though, was a onetime noncash charge related to our senior convertible notes totaling approximately $30 million.

Just to provide a bit more detail on this material charge, $7.5 million of this noncash charge during the quarter related to the conversion of $7.5 million of principal under the senior convertible notes to common stock. This included $6 million related to the conversion of principal, with an additional $1.5 million recorded due to a favorable pricing on conversion by the holder compared to the market price on the conversion date.

We also agreed with the holder of the senior convertible note to restructure the terms of the debt, which had resulted in a noncash charge related to the acceleration of our debt discount of $28.5 million. This is presented as loss on extinguishment on our income statement, as we have agreed to enter into a new debt facility in the next quarter under more favorable terms.

The two combined charges were offset by a benefit of $8.7 million related to the warrants established in connection with the notes that have since declined in value.

Moving on to the balance sheet, we ended the quarter with $1 million of total cash and cash equivalents. During the quarter, we raised 1.6 million in gross proceeds through our ATM equity offering program, which has continued to give us flexibility and access to capital.

As it relates to our liquidity position, we ended the quarter in violation of the covenants under the terms of our senior convertible notes. Since that time however, we have been in active dialogue with the noteholder, and have signed an exchange agreement and proposed termsheet which would lead to a modification of the notes in the near term.

Importantly, pursuant to the updated terms with the noteholder, we are expecting to pay a flat monthly repayment amount over the next five quarters to fully satisfy the loan with no prepayment penalties. Final terms will be agreed and signed before the end of this quarter as part of finalizing the definitive agreement.

While this accounting requirement had a significant impact to our GAAP reported results, we believe the outcome of our discussions with the noteholder is a long-term positive for our company, as the fixed monthly payments bring certainty with respect to the convertible notes, and will allow us to retire the note in the coming quarters while moving forward to invest in and grow our business.

Looking to our guidance for fiscal '22, as Grant laid out in his prepared remarks, there are a number of factors which have served to significantly impact our performance in the quarter, and which have led us to reset our full-year revenue expectations to a range of $70 million to $75 million. We did not take this decision lightly, and believe this range gives us a foundation upon which to build [growth] going forward.

The company remains extremely bullish about its ability to reach annualized revenue of $100 million from our current portfolio of offerings. The factors which drove the quarter-over-quarter revenue decline, and the decision to reset fiscal '22 guidance, are transitory in nature and only serve to delay our business's growth by a couple of quarters.

While we are not establishing guidance currently beyond fiscal '22, we expect that the $100 million revenue figure on an annualized basis is not far off given a few key factors.

First, as Grant mentioned, in January, we received our transactional waiver in New Jersey, allowing us to launch VIE.gg on a soft play basis. Very shortly, we will complete the soft play evaluation period and launch the full VIE.gg platform, making us the first and only company to accept real money esports wagers in the US.

Second, we have the upcoming debut of LANDuel at the Hard Rock Hotel in Atlantic City on March 18 to 20. While the need to delay the events due to COVID was no doubt a disappointment, the excitement for LANDuel remains and we believe it will open Esports Entertainment Group to a significant and untapped market across many US jurisdictions.

Peer-to-peer wagering is and in our view, will always be welcomed in far more jurisdictions across the US, greatly outweighing the revenue opportunity made possible by the VIE.gg wagering platform.

Third, we have seen considerable interest for our OMEGA esports gaming platform since it debuted in the second quarter of fiscal '22. The potential user base for this platform is extremely broad, and exposes us to customers such as arcades, casinos, family entertainment centers, and any other location looking to connect with highly sought-after avid esports enthusiasts. We are very confident that OMEGA will become an important contributor to our top line results, and look forward to announcing deals with named operators in the coming months.

Finally, as Grant mentioned, January was a record month for the EEG iGaming segment of the business. Our iGaming segment continues to build momentum across its unique brands, as it takes advantage of a very strong market for iGaming and sports wagering in Europe. With the potential to expand our brands into new markets in Europe, LatAm, and further afield, together with the recent launch of VIE.gg in New Jersey, we expect to see continued growth in this part of business.

In summary, we remain excited by these significant opportunities for our business, and are committed to taking full advantage of the promise they represent. We believe the future is bright, and expect the full force of our unique product portfolio to deliver strong financial performance going forward. We look forward to updating the market further throughout the year as we execute our plans.

With that, I'll turn the call back to the operator for the Q&A session.

Thank you. (Operator Instructions) Scott Buck, H.C. Wainwright.

Hey, good afternoon, guys. My first question is on the guidance. I understand the kind of headwinds you faced during the quarter. But if I look at where Street estimates are for the third and fourth fiscal quarter, it looks like there's still $20 million between the two quarters that needs to come out, and that's clearly more than the Netherlands is. So I was hoping that maybe you could kind of help step function us through that.

Sure. It wasn't just -- as I tried to outline, it wasn't just the Netherlands. Yes, that was a seven-figure factor. The sports handle was another huge factor. And we had, I guess dealing with the same thing that everybody who has live events.

Our EGL brand in Europe, which is a live in-person event company (technical difficulty) obviously was unable to host those events. Helix centers were dramatically down. Events that would expand our footprint, ggCircuit, additionally, were down. Now that we're coming out the other side, we are seeing a pickup not only across all those areas, as Dan just mentioned, and I think, in mind, January is our best iGaming month ever as a company.

And we have a strong consecutive string of weeks together that are all seven figures in our iGaming business. Along with the launch of LANDuel, [VIE], we see a building of momentum as we head towards the end of the fiscal year.

So the resetting of the guidance, albeit is obviously not a decision we took lightly internally. We felt, given strong headwinds we faced last quarter, a better set of expectations at this point in time, and as we build momentum through the quarter here in the second half of the year, back to --

Okay, great. Have you guys adjusted your internal modeling around sportsbook hold for the remainder of the year? And on the events side, should we think of that as lost revenue, or are there kind of make-up dates set further throughout the remainder of the year?

I'll let Dan comment on the sports hold. But on the events, it's really been across the globe that it's more in a holding pattern. We do expect those clients to come back. We expect them -- we're starting to see the bookings coming back in.

So it's still -- certainly, as Dan mentioned, it's a reset really where it's at a six month period of time that we're obviously not going to get back this year. But we (multiple speakers) there.

On the sports hold, Dan, did you want to offer any more insight on that?

Yes. We're certainly not adjusting our model as we had -- as many of our peers. I have also communicated, the back end of last year, sports margins were down across the industry, and we felt the brunt of that.

We had a good January, margins have recovered significantly, and we expect them to return to industry norms across the remainder of the year. So it's certainly not an expectation that margins will be deflated going forward after all.

Okay. That's helpful, Dan. And then I know it's only been a few weeks on the VIE.gg in New Jersey. Just wondering what the initial feedback has been within the state and versus your expectations? And maybe when we can think about seeing it add two additional states.

Well, on the first part of the question, we do expect it's imminent that we'll hear that we're able to exit soft play. As you can appreciate, we haven't been able to execute our marketing because we didn't want to drive too much traffic at a site that had limited hourly activity on a day-to-day basis and limited number of bodies that can sign up.

So we've taken advantage of this time to make sure we add additional events to the site. If you're in a jurisdiction or a region, you can see those. You can see it's substantially more events now than there was when we started into the soft play. So the exit from soft play is imminent.

To the second question, we are in discussion with at least two other jurisdictions in the North American market, retaking gambling to those jurisdictions. I would like to draw attention: the LANDuel product is not a gambling product; it's a betting product. We have currently received about 29 legal opinions that we will be able to take that product into various states.

So I expect that we will -- once launched in New Jersey, we will roll that product out more rapidly than we'll be able to roll out the VIE.gg to other jurisdictions.

Okay, great, Grant. That's great color. And then last one for me. Just an update on the timeline for UCLA, Helix, and what do you guys think about adding additional centers through the remainder of the year?

With UCLA, we got to go back to opening the school up in March, which will then start as being able to move again, getting the center open as the school opens. We have -- as you're probably aware, it's been announced, we have a letter of intent in place for the Hall of Fame Villages in Canton, and we have multiple other universities like UCLA that have reached out to us.

So we are in multiple discussions to expand that business. I can't speak specifically to them yet, as you can appreciate right now, but at least UCLA and Hall of Fame Villages are the next two on our list.

Okay. Great. Appreciate the time, guys. Thank you very much.

Edward Engel, ROTH Capital.

Hi. Thank you for taking my question. Can we please just get a quick update on your monthly cash burn? I think you -- on prior calls, you talked about $3 million. I guess that's $1 million per month, $3 million per quarter. Has that changed at all? And then I think before, you're targeting EBITDA positive by the end of this calendar year. Is that still possible with the new guidance?

Yes, I think we're slightly above $1 million a month now. We're near the $1.3 million a month in cash burn. The performance in the second quarter has probably pushed us out to get to breakeven into the first calendar quarter of next year. And so that's kind of where we are in terms of timelines. It really is the reset that's pushed us out an extra quarter.

Okay, great. That's super helpful. And then could we just get an update, I guess, on how much cash you currently have? I know it's in the quarterly Q. And I guess just on that, I mean, just across the industry, I think it's pretty evident about -- sometimes it does take a bit of an investment to drive new user growth, especially in the US.

So I was just wondering, I guess, does a tighter cash balance impact your ability to really fully ramp your customer acquisition efforts, not just in the US, but in Europe as well?

I'll take the first part of that, and then let Dan take the second part. It's clear when you're a growth company that you depend on -- I mean, the reason we're public is we depend on the public markets.

Clearly, we are not in what we would call a bull market. It's been a very difficult market. And of course, the ongoing concerns of not just the pandemic, but more recently in the Ukraine. That restricts our access to capital, and it restricts some of the interest in the sector which is down overall across all operators.

So yes, the short answer-- well, I've given you a bit of a narrative there -- is that restricted access to capital does slow down our marketing efforts. However, thankfully, several of our assets are positive cash flow producing and are somewhat self-perpetuating.

Dan, did you want to add anything to that?

No, I think you're right. And we have been accessing the ATM that's available to us to drawdown money on it on a prudent basis as and when it's needed, which has provided us that flexibility. We are in several conversations about a longer-term strategic net financing at the same time.

So there's plenty of options that are available to us. And as Grant said, being public on the public markets gives us that -- it gives us the access to funds from the public market. So that's what I would add on that from what Grant mentioned.

Great. Thank you for that color. Much appreciated.

(Operator Instructions) Michael Kupinski, Noble Capital Markets.

Thank you. Couple of questions here. Can you address whether or not there are other markets that you operate in, whether they be an unregulated market like the Netherlands, that you are at risk in terms of maybe the country's changing regulations? I mean, similar to the Netherlands?

Well, the gaming market is constantly changing. I mean, you've experienced it first hand in the United States, right? Before 2018, it was absolutely not allowed, and here we are a few short years later, and I believe there's 30 states that now are actively pursuing having a regulated market.

So yes, as more jurisdictions look to regulate and tax, we will have to continue to adjust, just like every operator in the online gambling business. We have addressed that partially through acquisition, which is why we have a fairly solid footprint in the European markets with Ireland, UK, Sweden, Malta, Spain, et cetera, and we're looking to expand that further.

Obviously, the first move into the states was in the state of New Jersey, and we will continue to do so. In jurisdictions right now that we're operating in, there's nothing that's imminent that we can see. That does not necessarily mean that, over the next 6, 12, 2 years, that there won't be additional jurisdictions that will become regulated. [Well, that].

But to answer your question, is there anything that we're aware of currently? No, there's no other jurisdictions. Netherlands just happen to be a substantial one where the Bethard asset, which we acquired, that had a substantial part of their operations there. That's why it impacted us.

--Great. Grant, any particular countries that you think that we should look for or watch in terms of regulations that might be impactful to you that maybe we should have on our radar so that we might watch this in the future to see if there is an impact on your numbers?

In terms of negative impact on our numbers?

Yeah. In terms of negative impact.

Well, we're -- as you can imagine, as you can appreciate, we have several experts in the gambling sector, and we have several attorneys that work with us and give us advice as to which jurisdictions. I would say that we're probably going to see regulatory controls coming in into the Canadian marketplace.

So we will probably not expand our footprint into the Canadian market without going through the application process. There's currently nothing that we see in the markets where we're seeing our greatest growth in the South American and Latin American markets.

So to answer your question, no, we don't see one that we're concerned about where we're having substantial traction. And we are trying to stay in front of these things. That said, it is a constantly changing environment. Sometimes the change is positive, sometimes, like in the Netherlands, it is not.

And in terms of slowing your expansion in certain markets like Canada, how does that affect your outlook for the growth rate in generating revenue? I mean, do we have an impact in terms of your decision not to go into certain markets or expand in for certain markets affect the revenue outlook?

Well, the revenue looks that we're having now, no. Keep in mind that some of the products we have, like LANDuel, which is a newly launched product, and our OMEGA product, these -- we haven't taken the potential revenue from these products into that guidance yet.

Those products -- we both -- we expect them to move quite rapidly. The LANDuel product after its inaugural launch coming up next month. We have, I believe, 20 casino properties coming in -- flying in from Europe, the Caribbean, coast to coast to North America, flying in to see that event at the Hard Rock, and we do expect to have a better feel for how fast that will roll out after that point in time.

It doesn't have to be in the casino. We have 29 jurisdictions in the States alone that we can move that product into. And as far as Omega, we expect to be announcing, in the near future, some very substantial movement on that product.

So those two products don't require the regulatory environment, and most of our North American strategy is not dependent on the regulatory environment. Internationally, I believe we feel quite comfortable and confident with our marketing plan and the numbers that we have in our forecast.

I want to go back to a liquidity question. So you indicated your burn rate, $1.3 million. And you also add -- and correct me if I'm wrong -- highlighted the prospect that you are going to do some sort of refinancing. Can you talk a little bit about your thought on preferred ways to refinance at this point? What are you -- what are the options that you're looking at outside of European?

Yes. Well, the ATM, obviously, is one of the tools that we have. We obviously have a shelf in place for private placements from investments, funds, et cetera. As it comes down to the note, the specific terms are still being finalized, but we're looking to, after the proxy vote, obviously, a lot of the conversion opportunities came off the table.

And so we're working amicably with the fund, to the best interest of the fund, as well as our shareholders. Those -- it's been quite positive, actually. They obviously did not call any issues of incidents in default and are working with us to come to a stable monthly payback plan with open opportunity for bringing other investors.

We have been -- have ongoing discussions. I mean, we're a public company. Of course, we're talking to potential sources of capital at all times. And as mentioned, the ATM and the shelf are just two of the tools in our toolbox.

Can you give me the number of shares outstanding at the end of the quarter? I know that you have the average shares outstanding, but what were the average -- what was the shares outstanding at the end of the quarter?

Dan, do you have that number handy?

Just looking in the queue now. Might come back to you, [Edward].

Okay. All right. That's all I have for now. Thank you.

Thank you.

(Operator Instructions) Lisa Springer, Singular Research.

Good afternoon. I wanted to ask you a couple of questions about the OMEGA product. I'm curious if you could provide a little bit more color around the pipeline and where the product is being marketed and how it's being marketed? And whether you think it could make a minimal -- meaningful contribution in 2022?

I'll start with your last question first. The answer to that is absolutely. We believe, quite strongly, it will make a substantial meaningful impact to our revenue in the fiscal. The product was rolled out at the IAAPA Event conference in Orlando last November. We have a full pipeline, interested parties, brand name, big box stores, retailers, casino properties, bowling alleys, the list goes on and on.

I can't get into specifics. I would say we have roughly 12 substantial contracts under negotiation at various stages. So you'll start to see some of the activity.

We replaced several units in malls already. The product is effectively self-contained. We can bring in one of the arrays as a 12 -- 6-station or a 12station pod, [hold it] to the floor. All the equipment is attached, chairs, headset, et cetera, credit card swipe. Somebody sits down, swipes their credit card, and effectively starts engaging in gaming tournaments. And it's all managed remotely.

So if it's a movie theatre or bowling alley, they don't have to worry about bringing on the staff. We install it, we manage it. And when the units -- and this is important for this call. When the units are not being gamed upon, the units will be mining cryptocurrency. So they're never dormant. So we're very excited about that product.

Okay. Is it primarily a rollout in the US?

No. In fact, we've been marketing it and had lots of interest out in the European markets, Canada. And obviously, the US is the biggest market that we're talking about, and that's the home turf for the ggCircuit team. But the orders have been coming in from overseas as well as north of the border.

Okay. I think you mentioned that you did not have that included in your guidance for 2022 right now?

Correct.

Okay, great. Thank you.

(Operator Instructions) We have no further questions at this time. I would like to turn the conference back to your presenters for any additional or closing remarks.

Okay. Thank you. Thank you all for coming. And of course, we remain very excited about the progress we've made as a company since going effective on the NASDAQ April 14, 2020, just a very short period of time ago. Since that time, we've pulled together over seven brands over that 18 -- almost two years.

We have an incredible portfolio of brands, and a proven team committed to delivering continued growth and innovation that will result in increased shareholder value over the balance of the 2022, the years ahead. Not the least of which is our cryptocurrency LANDuel and VIE, these are all new products, OMEGA. This is the type of innovation we'll come up with.

I'd like to thank everybody for joining us on our call today. We appreciate your interest and continued support, and look forward to updating you on our progress during our fiscal third-quarter call.

In the interim, should you have any questions, or wish to speak with us, please contact our Investor Relations firm at JCIR at 212-835-8500. Thank you.

Ladies and gentlemen, this concludes today's conference. We appreciate your participation. You may now disconnect.