Kubient, Inc.

Good afternoon and welcome to Kubian's third quarter 2021 conference call. Joining us for today's call are Kubian's founder, chairman, chief strategy officer, and chief executive officer, Paul Roberts, and chief financial officer, Josh Weiss. Following the remarks, we will open it up for questions. Before we get started, I need to alert you to our safe harbor statements under the Securities Litigation Reform Act of 1995. During this conference, we will be making forward-looking statements, including statements related to future events or to our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, level of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, and achievements expressed or implied by these forward-looking statements. Listeners should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties, and other factors which are, in some cases, beyond our control and which could and likely will materially affect actual results, level of activity, performance, and achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions related to our operations. results of operations, growth strategy, and liquidity. These statements are subject to known and unknown risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected and implied during the call. Furthermore, listeners are referred to the document filed by QBN Incorporated with the SEC, including our annual report on Form 10-K filed with the SEC on March 30th. 2021, our quarterly report on Form 10-Q for the first quarter of 2021, filed with the SEC on May 14, 2021, and our quarterly report on Form 10-Q for the second quarter of 2021, filed with the SEC on August 16, 2021, with the understanding that our actual future results may be materially different from what we expect, which include these and other important risk factors. We qualify all of our forward-looking statements by these cautionary statements. Please note that the forward-looking statements on this call are based on information available to us as of today's date. Except as required by law, we assume no obligation to publicly update or revise these forward-looking statements for any reason or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Please refer to QBN's SEC filings, specifically its registration statement on form S-1 initially filed on December 12th, 2020, for a more detailed description of risk factors that may affect the company's results. During the call today, management will discuss adjusted EBITDA, a non-GAAP financial measure. In the company's press release and filings with the SEC, both of which are posted on the company's website, You will find additional disclosures regarding this non-GAAP measure, including a reconciliation of this measure with its comparable GAAP measure. Non-GAAP financial measures are not intended to be considered in isolation from a substitute for or superior to GAAP results. The company encourages you to consider all measures when analyzing its performance. Now, I will turn the call over to Paul Roberts. Sir, please proceed.

Thanks, Operator, and thanks to everyone who has joined us today. The third quarter marked a period of steady growth for Coobian as we continue to move forward full steam ahead. Our net revenues for Q3 were $677,000, which represents a 141% increase year-over-year from the same period and a 36% increase from the prior quarter. We continue to believe we are just starting to scratch the surface, although at times we were limited by the speed at which our partners, customers, and stakeholders were able to operate. Nevertheless, a common underlying theme we have unveiled both internally and to our shareholders is that our customers and partners continue to be very interested in our technology, and are keen on digging deeper into how our solution can play a key role in their ad tech ecosystem. In early 2020, due to the impact of COVID-19, nearly every brand hit the pause button to really evaluate their advertising strategy. Some companies completely paused all advertising spend, while some took the opportunity to take a deeper dive into the ROI of each ad dollar they spent. It is with companies that took the latter approach who have decided to explore potential opportunities with Cougat, as they've recognized that we can help boost up that ROI figure for them. We have also recently benefited from some news reports outlining that Google takes a cut of 22% to 42% of U.S. ad spending that goes through its systems. This figure does not include the additional fees charged by agencies, additional DSPs, SSPs, and ad exchanges. This is prompting more brands, both large and small, to reconsider the walled garden of Google and forcing them to take a look at more agile and nimble partners that can help solve the efficiency and fraud issues plaguing the industry. With that said, the conversations and feedback we have been receiving in and of itself is quite encouraging. as it proves that prospective users of technology see the value that we provide as it solves real problems and boosts efficiency. The one variable that we don't have control over, though, is time. We have noticed that lead times can be later than we would like them to be, but the fact of the matter is that it requires time to get large corporations to fully buy into a new process and transition away from their legacy ones. regardless of how powerful the data we show them may be. Despite this, our growing team remains laser-focused in controlling all variables within our... Anonymous, just left the conference. What's also been encouraging is that from a macro view of the advertising industry, we are seeing a lot of traditional areas, especially CCTV and mobile advertising, come out of a large COVID-induced slump. As a result, we're beginning to witness early signs of the pent-up demand come to fruition here in the midst of the fourth quarter. Digital advertising is more important than ever to deliver success for businesses, and every brand in the world is looking to their advertising leaders to find value and efficiency to add to their bottom line. We are cautiously optimistic that we will be able to ride the tailwind of this trend and are hopeful This will prove to benefit us on our constant quest to win deals with strategic and accretive partners. Shifting gears to our growing team, we continue to onboard new hires and expand our workforce. This past quarter, we hired a total of six employees, and year to date, we have onboarded a total of 20 new employees. Although we've been expanding, similar to what I mentioned on the previous call, we are still seeing the effects of the macroeconomic job market trend of supply far exceeding demand. In conjunction with the limited demand and analogous to our M&A strategy, which I'll touch on later in the call, we're being very selective with the employees that we hire because they truly are the lifeblood of Kubian. An exciting update since the last earning calls, is that our employees have begun returning back to the office, which has turned out to be a huge benefit as it increased the quality of collaboration between the different segments and obviously allowed for face-to-face interactions. Although our employees were able to maintain consistent levels of productivity prior to reentrance to the office, the overall morale of our workplace and the cohesiveness certainly was positively affected by the return. With that said, before I discuss further updates on our core business for the quarter, I'll be passing the mic over to Josh for an update on the financial front. Josh?

Thanks, Paul, and good afternoon, everyone. Thanks for joining our call. Now to our financial results for the third quarter ended September 30, 2021. As Paul mentioned at the start of the call, net revenues increased to approximately $677,000 compared to approximately $280,000 in the same period last year. This represents a 141% increase year over year from the same period and a 36% increase from the prior quarter. As previously mentioned in our Q2 earnings call, revenue is not generated nor realized immediately after a customer signs up to use the audience cloud. After contract execution, our engineering team will typically integrate our technology into a customer's infrastructure, followed by a testing period, which altogether ranges from a four to 10-week turnaround time, depending strictly on the complexity of our partners' technology. I am proud to share that in the third quarter, we were able to successfully integrate 15 supply-side and five demand-side partners into our audience cloud, which compares to two supply-side and three demand-side partners in the previous quarter. As you can tell, we have seen these integration times reduce quarter over quarter and remain committed to maximizing the number of integrations going forward to increase efficiency and have a faster path towards revenue recognition. Turning to our expenses, technology expenses increased to approximately $777,000 from approximately $546,000 in the same period last year. The year-over-year increase was the result of increases in salary expense arising from a surge in technology personnel headcount as well as an increased consulting fees, cloud hosting costs, and non-cash expenses of stock-based compensation and amortization of software. General and administrative expenses increased to approximately 1.5 million compared to approximately 1 million in the same period last year. The year-over-year increase was primarily due to increases in salary expense, primarily arising from an increase in general and administrative headcount, as well as increased stock-based compensation insurance expense, office-related expenses, and taxes. GAAP net loss was approximately $2.3 million or $0.16 loss per share compared to a net loss of approximately $4.2 million or $1.03 loss per share in the same period last year. The year-over-year decrease in net loss was due to increased revenues and a decrease in other expenses. Adjusted EBITDA, a non-GAAP measure, decreased to approximately 1.9 million EBITDA loss compared to an adjusted EBITDA loss of 1.5 million in the same period last year. As of September 30th, 2021, the company had a cash balance of $28.7 million. That concludes my financial summary. For a more detailed analysis, please reference our Form 10-Q, which we plan to file this week. I will now turn the call back over to Paul, who will discuss some of our major operational updates and provide a general outlook of our business. Paul?