Verb Technology Company, Inc.

Good afternoon and welcome to the full year fourth quarter 2024 financial results conference call for VIRB Technology Company Incorporated. At this time, all participants are in a listen-only mode. Please be advised, the call is being recorded at the company's request. On our call today is Rory J. Kutaya, VIRB's founder, chairman, and CEO. Before we begin, I'd like to remind everyone that statements made during this conference call will include forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involves risk and uncertainties that can cause actual results to differ materially. Forward-looking statements speak only as of the date they are made, except as required by law, as the underlying facts and circumstances may change. Verb technology company disclaims any obligations to update these forward-looking statements, as well as those contained in the company's current and subsequent filings with the SEC. I would now like to turn the call over to Rory J. Kutaya, CEO. Rory?

Thank you, moderator, and thanks to everyone for joining us today for our fourth quarter and full year 2024 financial results and business update conference call. Well, it sure feels good being back before you speaking directly to you about our company, our business, our performance, and sharing our direct, transparent, honest thoughts and strategies for how we intend to drive shareholder value in this business now and into the future. So I'd like to begin with a brief discussion about our history and challenging market conditions that influenced the formulation of the strategies that we undertook to insulate ourselves from those conditions. And I'm referring to insulating ourselves from those market conditions that became impediments to value creation in our former direct sales software as a service line of business, as well as those market conditions, particularly capital markets conditions that affected and are affecting our many, many small and micro cap exchange listed companies even today. And then I'd like to discuss the strategies that we employed and the changes we've made that underlie the impressive results we're now seeing in the business. I'll also touch on the strategies we employed that resulted in what I'm proud to state is a wealth, cash-infused, extremely healthy debt-free balance sheet and a super clean tap table. The combination of which provide the all important foundation for the impressive revenue growth we're now enjoying. All right, let's jump in. Historically, we were an R&D driven technology business built around a SaaS platform with a customer base That was comprised of, for the most part, direct sales companies, or as they are sometimes referred to, multi-level marketing companies. Well, when we entered the market with our interactive video-based sales software, we set out to become the dominant player in the sector, and we did. What we saw at that time was the opportunity to address a market that included the large-scale sales teams, including tens of thousands of independent sales reps that these companies managed, all of whom needed a simple and effective mobile-based sales tool. Over time, we learned some valuable lessons. First, while we onboarded large numbers of new sales reps every month, The attrition rate among sales reps at these companies was extraordinarily high, making it difficult and costly to generate meaningful revenue growth. In addition, while we developed what we believe were extremely effective sales tools to help sales reps, even inexperienced sales reps, generate and convert sales leads to outdated internal communications policies at these companies prohibited us from communicating these tools and how to use them directly to the fields of sales reps, which may have curtailed much of the sales rep attrition, as the companies that manage these reps were often ineffective at doing so themselves. Finally, the ever-changing nature of the customer base we served, as well as the Give it away below cost pricing models adopted by competitors who found themselves marginalized by our superior product offering required continued costly R and D expenditures and continued returns to the capital markets. These factors coupled with what we perceive to be declining market multiples for SAS businesses generally drove our decision to sell that business unit and focus instead on our new, though not yet revenue generating, Market.Live livestream shopping business. A bold move indeed, but one that has certainly proven now to have been in the best interest of our shareholders. So this was the first prong of our multi-pronged strategy to restructure, reconstitute, and reinvent VIRB. The next prong of our strategy was to insulate ourselves from the predatory financing terms imposed universally on companies like ours who relied on access to the capital markets to fund continued R&D and other growth capital requirements. Almost every finance initiative we undertook was fraught with last minute retraining of material deal terms, ridiculous warrant coverage terms and conditions, post-deal financing exclusivity arrangements tying the company to bad financings into the future when additional capital was needed, all of which made us and so many other companies in the same situation perfect targets for short selling and for companies with any kind of trading volume, greed-driven, illegal, naked short selling. It wasn't hard to target companies that announced an upcoming financing as short sellers could be confident that deal terms and corresponding share prices would be below whatever the then current trading price was. This capital markets environment eroded share prices across the board, resulting in reverse splits required to maintain exchange listing requirements and destroyed cap tables and balance sheets, causing an unprecedented level of exchange deal listings. Ultimately, it was the individual retail investors left without sufficiently aggressive regulatory intervention who bore the brunt of this market activity and still do. To avoid this awful outcome, we developed a unique strategy to utilize Reg A to structure our capital raise initiatives and avoid the predatory hedge fund investors. allowing us to issue straight common shares priced at the market with no warrant coverage and no investment banking fees. This financing vehicle, unique for publicly traded companies, among other financing strategies that we utilized, allowed us to pay off all of our debt, redeem all of the previously issued preferred shares, completely restructure our balance sheet, adding it with cash, taking shareholder equity from almost $2 million negative in June 2023 to more than $16 million positive in December 2024, and giving us a cash runway conservatively, assuming zero revenue growth well into 2028 and beyond. The shareholder-approved reverse split we did last year resulted in an extremely tight less than one million share float and essentially eliminate all of the warrant overhang from the years ago predatory financing. We are very proud of how well that series of initiatives was executed, completing that important second prong of our multi-pronged strategy to restructure, reconstitute, and reinvent BIRB. The next prong of our strategy was to diversify our revenue streams to insulate ourselves from changes in the market, including economic and regulatory changes, as well as changes within our own customer base and demand for our products and services. So the challenge was to identify and develop independent yet complementary revenue-producing business units that could leverage the cost savings produced by a unified internal finance, sales, marketing, and technology department structure utilized by and across all the business units. We're recognizing that the core of our business was our interactive social video commerce technology and know-how. Our strategy was to exploit those capabilities by entering the exploding telehealth industry, leading to the development and launch of Vanity Prescribed, followed by Good Girl Rx in partnership with TV and social media celebrity Savannah Chrisley. And then the development and launch of GoFundYourself. our very exciting, fast-growing, crowdfunding marketing platform. So to give a sense of the revenue potential for GoFundYourself, we launched it in Q3 with little to no marketing. And we recognized $25,000 in revenue. Okay, and then in Q4, we recognized $233,000 in revenue. And if any of the more recent developments come to fruition for the show, 2025 may be an extraordinary year for GoFundYourself and VIRB stockholders. Vanity Prescribed was in development during Q3 and Q4, identifying suppliers, onboarding suppliers, then replacing suppliers, developing our online patient screening and prescription approval process, customer service and support, and shoring up our supply chain and anticipation of participating in the extraordinary growth of the telehealth space following the introduction and rapid adoption of the new GLP-1 weight loss drugs. Revenue, though now growing, was modest through that period, and we're excited for a broad-based launch and marketing campaign that is about to get underway. As to Market.Live, at the end of Q3, we changed our focus in product offering by providing what we believe is an industry-leading end-to-end solution for brands, seeking to adopt a social commerce strategy that they cannot manage in-house on a cost-effective basis. That strategy has proven to be enormously successful producing exponential revenue growth. As reflected in our 2024 Form 10-K file today, in Q1, we generated revenue of just $7,000. In Q2, we generated revenue of $37,000. In Q3, we generated revenue of $103,000. And in Q4... we generated revenue of $490,000, an impressive and most welcomed trend by anyone's standards. Combined 2024 revenue was $895,000, an increase of $832,000 over 2023, representing revenue growth of 1,321% over that period. This performance is the greatest amount of revenue generated since the strategic sale of the company's direct sales SaaS business unit in June, 2023. Okay, looking at Q4 alone, we generated $723,000, an increase of $694,000 over the same period last year, representing revenue growth of almost 2400% over that period. And as compared to Q3 2024, revenue in Q4 increased by $595,000, representing growth of almost 465% quarter over quarter. Okay, so while we historically don't provide going forward guidance, we are very comfortable sharing our expectations that Q1 2025 will surpass Q4 2020-24. Finally, as to the last prong of our multi-pronged strategy to restructure, reconstitute, and reinvent VERB, we recognized that any business that fails to identify and develop an artificial intelligence strategy will be marginalized. And with that in mind, we explored a number of different strategies, including developing our own AI capabilities in-house, which we smartly rejected. And instead, we scoured the market for a company with a developed, tested, proprietary AI solution uniquely tailored to video-based social commerce. Upon testing the AI and social commerce capabilities of live commerce, a leading-edge video-based social commerce startup. Well, we entered into a licensing agreement to incorporate that technology into our Market.Live platform. Well, to our great surprise, we found that the integration of Live.com's resulted in a massive operational cost reduction. In fact, we anticipate a direct operational cost reduction of approximately $1 million per year. However, perhaps more importantly, we also recognized that the addition of live comms technology created an entirely new stated platforms, feature rich with capabilities far beyond our then current platform and certainly beyond that of many other social commerce platforms. So rather than simply license the technology and risk that livecom would be acquired by a competitor, limiting our access to the technology and future iterations of it, we decided to acquire it ourselves. And it is our expectation that the acquisition will be highly accretive and produce meaningful value for VIRB stockholders. With the closing of the livecom acquisition, which remains on track and is expected to occur in the coming weeks, we will have effectively completed the transition of VIRB from an unprofitable, cash-hungry business in a challenging market to an extremely well-capitalized, well-diversified business with proven, strong, fast-growing revenue generation capabilities, AI-ready, with a tight float, clean cap table, and debt-free balance sheet poised for meaningful, continued growth. In closing, I refer you to our 10K file today for greater details concerning our 2024 financial results, as well as the press release we distributed today, summarizing those results for additional information I've not covered in my conference call today, because I've chosen instead to use this time to provide context for those results and share our strategies and ongoing initiatives for continued growth and value creation for VIRB stockholders. And finally, and as anyone who could read a balance sheet could see, with under 1 million shares issued in outstanding as of December 31, 2024, and debt-free with more than $13 million in cash and highly liquid securities and assuming zero value given for our three revenue-generating business units, I would be remiss if I didn't point out that our net cash value per common share is at least $13.50, which we believe represents a very compelling opportunity. Very compelling indeed. I thank you for allowing me to address you all today and share with you our excitement and optimism for VIRB shareholders now and into the future.

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