MGO Global Inc. Q1 2023 Earnings Call

F.

Vincent Annamonelli, and the company's Chief Marketing Officer, Matt Harwood.

Before I turn the floor over to them, I remind you that during today's call, statements that are not historical facts, including any projections, statements regarding future events or future financial performance or statements of intent or belief, are forward-looking statements and are covered by the Safe Harbor disclaimers.

contained in the company's public filing with the SEC. Actual outcomes and results may differ materially from what is expressed in or implied by these forward-looking statements.

With that said, I'd now like to introduce Max. Max, the floor is yours.

Thank you, Cass. I also like to thank you all who have joined our webcast this afternoon. As the operator mentioned, I will be joined on today's call by Vincent D'Omanelli, who will begin with a review of our first quarter results.

I'll then resume the floor and share some highlights on the business before asking our CMO Matt Howard to provide you with some insights into our new AI-enabled marketing platform and the important role it will be playing in our future growth.

So with that, Vinnie, can you please dive into the numbers?

Sure, Max. And hello to all of you listening in on today's webcast. We appreciate your taking the time to learn more about MGO's progress, which was indeed notable in the first quarter of 2023.

Yesterday afternoon, the market closed. We filed our first quarter report on Form 10Q with the SEC. If you have not had the chance to review it, you may access it on sec.gov or via MGO's investor relations section on our website under SEC filings.

I encourage everyone to read our 10-Q s and other filings with the SEC to ensure you have a full understanding of our business, financial results, and other important information disclosed.

For the purpose of today's call, I'll hone in on the key highlights of our results, beginning with our revenue performance.

So for the first quarter of 2023, revenues increased 238%, rising to $334,701.

Up from $99,077 reported for the first three months of 2022.

This is an appreciable improvement, particularly in view of the fact that our sales for the first three months of this year was just $2,000 less than what we booked for the first nine months of 2022.

So you can see the lift from our January IPO and becoming properly capitalized is having a meaningful impact on our overall sales performance.

Now drilling down into our sales results, revenues contributed from the messy store represented 87% of our total sales for the first three months of 2023.

climbing to $289,554 as compared to $99,077 for the same three months in 2022.

The additional $45,147 in revenues came from sales of our new line of flagpoles and flagpole-related products stemming from the exclusive worldwide licensing deal we signed with StandCo in early March.

Later on this call, Max will be sharing some additional perspective on recent developments related to our flagpole business.

Moving down our income statement, we reported a 211% increase in our total operating expenses.

which increased to $1,403,045 for the three months ended March 31, 2023.

as compared to $639,577 reported for the first quarter of 2022. The increase was largely due to higher general and administrative costs.

associated with our workforce expansion, and an initiative made possible by our IPO.

In addition to higher sales and marketing expenses,

and investment in a new enterprise resource planning system.

which we are in the process of implementing.

and higher costs related to our becoming a publicly traded company on NASDAQ.

Also, royalty payments made to Leo Messi management totaled $307,883.

in the first quarter of this year.

which was down from $343,997 paid to MESSI in the first quarter of 2022.

The decrease in royalty payments is due to the accounting for foreign currency conversions from Euros to the US dollars.

After factoring the net loss attributable to non-controlling interests of $62,069 for the three months ended March 31, 2023,

Our net loss increased to 258% to $1,158,56, or $0.09 loss per share, which compared to a net loss of $511,071, or $0.05 loss per share, after factoring the net loss for non-controlling interests.

of $65,655.

Now looking at our balance sheet. Our cash position

has greatly improved due to the completion of our IPO. As of March 31, 2023, cash was $5,397,340.

up over 4,500% from $113,952 as of the end of December of 2022.

Our working capital position as of the end of March this year was $5,750,403.

net proceeds in our IPO, which closed on January 18th of 2023.

totals $7,239,855.

after factoring offering expenses of $1,385,145.

The IPO was also responsible for the improvement in our total stockholders equity, which increased to $5,907,668 from a total stockholders deficit of $1,194,561.

as of December 31, 2022.

So that concludes the overview of the financial highlights.

And now I'll turn the callback to Max.

Max?

Thank you, Vinnie.

Despite the prevailing challenges facing the general macroeconomic environment, I'm pleased with the progress we're making and can affirm that we remain on pace to achieve the objectives we have set for NGO in the year ahead.

All priorities remain.

strategically expanding our portfolio of digital native brands offering high quality products directly to consumers through digital commerce.

leveraging and optimizing our AI-enabled sales and marketing initiatives to gain deep consumer insights capable of driving conversions, brand loyalty, and revenue growth.

and improving operational excellence to fuel bottom line health and strategic investments.

With these objectives top of mind, I'm hopeful that as we move through 2023, you will come to the UP1 as a truly transitional quarter for MGO.

While the economic environment and capital markets remain turbulent, there are many reasons to be optimistic about our company's promising growth potential.

Our team of talented professionals is doing a superb job of systematically scaling our business, and as a result, we're gaining momentum on several key fronts.

In particular, our new residential flagpole business, created by the license deal we signed with Stenco in early March, the electoral formation of Americana Liberty.

a wholly owned subsidiary through which we will operate the flagpole business.

As Vincent mentioned, Disney Business contributes 13% of our overall Q1 revenue, which is notable in light of the fact that we signed the original license deal on March 13th.

Given that the original license agreement would stand was set to expire on the earlier of May 12th, but on the date we signed a definitive agreement to acquire Stan's assets, last week on May 11th, we extended the royalty free license to December 31st, 2023.

In addition, we signed a consulting agreement with the owner of Stemco, who will be working with us to run this business providing subject matter and product level expertise.

product sourcing and distribution council and other meaningful guidance.

Looking ahead to coming quarters, we expect that our Americana Liberty business will have material impact on our future quarterly financial results.

I look forward to providing much more meaningful details on our exciting brand building and expansion plans for Americana Liberty in the months ahead.

To help accelerate awareness of our brand and drive sales growth of our products, Matt Howard, MGO's Chief Marketing Officer, has been leading the development of a tech-powered marketing engine and a critical new component of our brand building platform. As announced last month, we have christened this new engine

Sasha, which stands for Smart Analytics and Cells Hypothesis Accelerator.

To tell you more about this powerful technology and the role it is playing in our overall sales and marketing efforts, I asked Matt to show you today's call.

more about this powerful technology and the role it is playing in our overall sales and marketing efforts, I ask Matt to join today's call. Hi, Matt. Over to you.

Thanks, Max. I'm excited to be here today to talk about our advancements in AI-assisted marketing technology.

Today, I want to share with you the potential of AI and machine learning in the direct-to-consumer digital commerce sector, particularly how we're utilizing these tools to stimulate growth and foster innovation at MGO.

First, I think some context is appropriate. E-commerce is not just changing, it's transforming. We're witnessing a shift from traditional brand trust to person-to-person trust facilitated by influencers. This evolution is powered by data-driven technology with algorithms determining reach and distribution.

And now AI is amplifying this ecosystem, enabling a pace and a scale of creative iteration that was previously unimaginable.

In this new era where platforms and algorithms are redefining social interaction and advertising, AI is opening the door to an entirely new realm of brand development possibilities. At NGO, we're seizing this opportunity, viewing AI not as a replacement for human creativity, but as a tool that enhances, amplifies, and accelerates it.

This is an opportunity we believe is the beginning of a major inflection point in digital commerce.

Sasha, our proprietary AI assistant that Max mentioned, epitomizes this approach. It supports our teams by expanding our creative boundaries.

accelerating our ability to experiment and execute across a large diverse continent landscape.

Sasha doesn't merely make us faster, it's a force multiplier. It allows us to operate on a scale beyond human capacity. It's about the ability to ideate, explore, and develop and deliver a comprehensive, personalized customer journey at scale. Sasha's real strength lies in discovery.

It identifies untapped market opportunities, provides valuable insights to enhance our product lines, and even aids in the creation of entirely new brands. This perfectly aligns with our mission at MGO to be where powerhouse brands are made. Sauce is a catalyst enabling us to brainstorm, incubate, and rapidly grow these brands.

Sasha also plays a key role in shaping and refining our existing brands. By leveraging AI, we gain a deep understanding of our customers, allowing us to craft personalized narratives that truly resonate.

This fusion of technology and customer insight nurtures authentic engagement and fuels brand growth. The proof is in the numbers. Our Q1 campaigns this year, assisted by Sasha, led to a significant boost in engagement for the messy store. Traffic grew by 118%, and overall conversion rates scored by 367% compared to the same period last year.

and creativity forms the core of our growth strategy, aiding us in building and scaling high-affinity brands that form a deep connection with our audiences.

With Saashi on our team, we're not merely keeping pace with the rapid evolution of digital commerce, we are actively shaping it. As we continue to leverage AI, we're confident in our abilities to provide ongoing value to our partners, our customers, and our investors. With that, I'll pass it back to Matt. Thank you.

not merely keeping pace with the rapid evolution of digital commerce, we are actively shaping it. As we continue to leverage AI, we're confident in our ability to provide ongoing value to our partners, our customers, and our investors. With that, I'll pass it back to Matt. Thank you. Thank you, Matt.

As Matt noted, we believe we are developing a very powerful tool with Sasha, which is providing MGO with ample insights into a customer's behavior and patterns.

We are leveraging this insight to refine and drive our merchandise and promotional strategies in the right direction. Moreover, we are also leveraging this insight to refine and drive our merchandise and promotional strategies

We view Sasha's capabilities when coupled with the expertise of Matt and the brother MGO marketing team as key competitive differentiators to our company that are allowing us to scale ourselves to a much faster rate than other e-commerce companies reliant on more conventional marketing strategies. We now look at allpublib.com to earn an able to interact with our companies. Be sure to subscribe to the channel.

The first three months of 2023 was a banner quarter for MGO, during which we completed our IPO and commentating our common stock on NASDAQ. The capital raise in our IPO is the fuel we have needed to move our company from relatively startup phase to what becoming a serious world-class DTC digital commerce company with a portfolio of lifestyle brands.

that speak to and resonate with today's digital savvy consumers.

We started the second quarter of 2023 being invited to ring the opening bell at NASDAQ market site in Times Square in New York City on April 4th.

We were also very pleased to be focused on a feature story in Forbes Argentina in their online and print editions last month.

As a native Argentinian, I took great pride in having MGO recognized at a luncheon recently host in our honor by Council General Ambassador Santiago Villalba and the head of the Commercial Economic Section of the General Consulate and Promotion Center of Argentina in New York, Council, Nelson Martin.

We believe that these opportunities to showcase MGO on the public stage will go a long way to shining a light on our company promising the future and the dynamic growth we are committed to achieve in the years ahead of us. It is still very early days in the evolution of MGO.

but give us time and pay close attention to our progress. As 2023 continues to unfold, we're confident that our results will properly reflect all of our hard work and our waiting commitment to success. I am really looking forward to speaking with you again, following the release of our second quarter results.

Before we close today's call, for those of you who would like to listen to today's webcast again, a replay of this call will be available later today on our website, found at www.mgoglobalink.com. With that said, I'd like to wish everyone a good afternoon. Kat, back to you.

Thank you. This does conclude our conference. We thank you for your participation. You may disconnect your lines at this time and have a wonderful day.