Q4 2021 Phunware Inc Earnings Call

Good afternoon, ladies and gentlemen, welcome to Sun, whereas fourth quarter and full year 2021 Investor Conference call.

Good afternoon, ladies and gentlemen. Welcome to FundWare's fourth quarter and full year 2021 investor conference call. Currently,

Currently all participants are in a listen only mode.

Joining me today are Alan S Makowsky, President Chief Executive Officer, and co founder Randall Crowder, Chief operating officer.

<unk> Chief Financial Officer.

The format today will include prepared remarks by Alan, Matt, and Randall, followed by a question and answer session. As a reminder, today's discussion will include forward-looking statements.

The format today will include prepared remarks by Alan and Randall followed by a question and answer session.

As a reminder, today's discussion will include forward looking statements. These forward looking statements, including any such statements referring to the potential effects or impact of the COVID-19 pandemic reflect current views as of today and are based on various assumptions that are subject to risks and uncertainties disclosed in there.

Our risk factors section of our SEC filings actual results may differ materially and undue reliance should not be placed on them.

Actual results may differ materially and undue reliance should not be placed on them. Additionally, the matters being.

Additionally, the matters being discussed today may include non-GAAP financial measures.

Reconciliation of GAAP to non-GAAP financial information is set forth in the Earnings

A reconciliation of GAAP to non-GAAP financial information is set forth in the earnings press release, which is available on the Investor Relations section of <unk> website at investors Dot fun, where dot com.

is available on the Investor Relations section of Funware's website at investors.funware.com.

I further encourage you to visit investors thoughts on where dotcom to access not only the earnings press release, but also the current investor presentation, and SEC filings and additional collateral on footwear at this time I would like to turn things over to <unk>, President CEO and co founder Island.

We further encourage you to visit investors.funware.com to access not only the earnings press release, but also the current investor presentation, SEC filings, and additional collateral on FunWare.

Muskie Sir please proceed.

Thank you very much and welcome to our fourth quarter 2021, and full year 2021 Investor Conference call.

Speaker Change: Thank you very much, and welcome to our fourth quarter 2021 and full year 2021 investor conference call. As a reminder, Fundware is a 13-year-old technology company focused on the intersection of mobile, cloud, big data, and blockchain.

As a reminder, hardware as a 13 year old technology company focused on the intersection of mobile cloud Big data and blockchain with business to business business to government and business to consumer customers worldwide.

Speaker Change: with business-to-business, business-to-government, and business-to-consumer customers worldwide.

Speaker Change: Our core mission is to create a Fundware ID for every human being on Earth that has a device touching a network that is connected to their favorite brands, applications, and venues that just happen to run Fundware software or intersect with our cloud-based infrastructure.

Our core mission is to create a fund where I D for every human being on or that Hasnt device touching a network that is connected to their favorite brands applications in venues, but just happened to run firmware software or intersect with our cloud based infrastructure.

On one side, we provide our b to b and BTG customers with everything they need to succeed on mobile, including the product solutions data and services for their digital transformation needs on Apple iOS, and Google Android devices and applications.

Speaker Change: On one side, we provide our B2B and B2G customers with everything they need to succeed on mobile, including the products, solutions, data, and services for their digital transformation needs on Apple iOS and Google Android devices and applications.

Speaker Change: On the other side, we provide our B2C customers with the hardware systems, software, and cryptocurrency services needed for their engagement and incentivized participation in high-performance gaming, streaming, trading, cryptocurrency mining, and personal productivity computing.

On the other side, we provide our b to C customers with a hardware systems software and crypto currency services needed for their engagement and incentivize participation and high performance gaming streaming trading crypto currency mining and personal productivity computing.

Central to these efforts our enterprise cloud platform for mobile called mass or multi screen as a service, which is available for licensing under a SaaS business model over one to five year contract periods worldwide, and our fund token and fun coin loyalty and rewards crypto currency ecosystem, which has facilitated transaction.

Speaker Change: Central to these efforts are our enterprise cloud platform for mobile, called Mass, or Multi-Screen as a Service, which is available for licensing under a SaaS business model over one-to-five-year contract periods worldwide. And our Fund Token and Fund Coin loyalty and rewards cryptocurrency ecosystem.

Speaker Change: which is facilitated transactionally with our FunWallet mobile applications for the Ethereum blockchain.

With our funnel wallet mobile applications for the theory and blockchain.

Speaker Change: The completion of Q4 in full year 2021 constituted continued operational momentum for our business.

The completion of Q4 and full year 2021 constituted continued operational momentum for our business as we further accelerated our mass platform vision and adoption across a number of key fronts, including new product introduction indirect channel expansion and more than a 150% sequential gain in.

Speaker Change: As we further accelerated our mass platform vision and adoption across a number of key fronts.

Speaker Change: including new product introduction, indirect channel expansion, and more than 150% sequential gain in quarter-over-quarter revenue growth with our customers.

Quarter over quarter revenue growth with our customers in.

Speaker Change: In parallel, the conclusion of Q4 in full year 2021 subsequently provided even more immediate scale and growth to our business.

In parallel the conclusion of Q4 and full year 2021 subsequently provided even more immediate scale and growth to our business as we operationally integrated and scaled our acquisition of light technology and dramatically improved our balance sheet, including a year end close of more than $23 million in cash.

Speaker Change: as we operationally integrated and scaled our acquisition of light technology and dramatically improved our balance sheet, including a year-round close of more than $23 million in cash and a current digital currency balance of more than 641 Bitcoin and 1,217 ETH, valued at approximately $31 million at today's trading price.

In a current digital currency balance of more than 641, Bitcoin and 1217 E valued at approximately $31 million at todays trading prices.

Speaker Change: Importantly, and in tandem, we are providing forward revenue guidance for Q1 and Q2 2022 of up more than 250% year over year.

Importantly, and in tandem we are providing forward revenue guidance for Q1 and Q2 2022.

<unk> up more than 250% year over year, our CFO , Tony will break down these details and forecast further in his section of the earnings broadcast.

Speaker Change: Our CFO , Matt Owney, will break down these details and forecasts further in his section of the earnings broadcast.

In terms of our current operating environment, our core <unk> and BTG customers still have not consistently returned to their offices and facilities and remain at a hybrid transition with regard to their employees and contracts safely returning back to where we.

Matt Owney: In terms of our current operating environment, our core B2B and B2G customers still have not consistently returned to their offices and facilities and remain in a hybrid transition with regard to their employees and contracts safely returning back to work.

We expect that cities states and countries will continue opening on a broader basis throughout the balance of 2022, while also understanding that this process remains an ongoing and unpredictable journey that won't happen overnight.

Matt Owney: We expect that cities, states, and countries will continue opening on a broader basis throughout the balance of 2022, while also understanding that this process remains an ongoing and unpredictable journey that will happen overnight.

Matt Owney: In parallel, our B2C customers are both active and fully engaged, demonstrating strong demand for hardware and cryptocurrency alike.

In parallel our BDC customers are both active and fully engaged demonstrating strong demand for our hardware and crypto currency alike.

We independent of what we'd see with the private and public sectors.

Matt Owney: completely independent of what we see with the private and public sector.

You had suggested previously in past quarters and reiterated again here, we are both excited and comforted by the dramatic increase in activity across all aspects of our product and solution offerings for mobile big data crypto currency high performance computing in the cloud.

Matt Owney: As suggested previously in past quarters, and reiterated again here, we are both excited and comforted by the dramatic increase in activity across all aspects of our product and solution offerings for mobile, big data, cryptocurrency, high-performance computing, and the cloud.

Matt Owney: Importantly, this activity encompasses all of our core growth engines rolling forward, including our mass cloud, our data-driven loyalty marketplace, our secure blockchain-enabled token, coin, and wallet capabilities, and our high-performance computing systems for gaming, streaming, trading, cryptocurrency mining, and personal productivity.

Importantly, this activity encompasses all of our core growth engines rolling forward, including our mass cloud or data driven loyalty marketplace are secure blockchain enabled token coin and wallet capabilities at our high performance computing systems for gaming streaming trading cryptocurrency mining.

And personal productivity.

Matt Owney: 2021 was the genesis of a powerful transition in our company's history, as we shifted from a non-recurring, low-margin transaction.

2021 was the Genesis of the powerful transaction in our company's history as we shifted from a nonrecurring low margin transaction business to a far stickier more scalable recurring and high margin SaaS licensing business for our mass platform.

Matt Owney: to a far stickier, more scalable, recurring, and high margin SaaS licensing business for our mass platform.

Matt Owney: In addition to continued enterprise and government interest in our mass digital front door solution for health.

In addition to continued enterprise and government interest in our mass digital front door solution for health care, our mass smart workplace solution for corporations, and our mass Smart city solution for cities, we accelerated conversations with customers from sectors that were hit hard by the pandemic, including the hospitality real estate and health.

Matt Owney: our mass smart workplace solution for corporations and our mass smart city solution for cities, we accelerated conversations with customers from sectors that were hit hard by the pandemic, including the hospitality, real estate and health care vertical.

Care verticals.

Matt Owney: These activities resulted in many new customer wins for our team, including Atlantis Bahamas.

These activities resulted in many new customer wins for our team, including Atlantis, Bahamas reagent Square Phoenix Children's Hospital Inner markets, Virginia Hospital Center, and dignity Health Yavapai Regional Medical center amongst many others.

Matt Owney: Regent Square, Phoenix Children's Hospital, Inner Markets, Virginia Hospital Center, and Dignity Health Yavapai Regional Medical Center amongst many others.

Matt Owney: in conjunction with growing our portfolio of direct customers like these.

In conjunction with growing our portfolio of direct customers like these.

Matt Owney: We also further expanded our global footprint by amplifying our go-to-market strategy with indirect sales and channel partners, including Amazon AWS, Carrier Global Corporation, Cox Communications, H3N1.

We also further expanded our global footprint by amplifying our go to market strategy with indirect sales channel partners, including Amazon AWS Carrier Global Corporation Cox communication.

<unk> global IBM premise vizio.

Matt Owney: Vizia Technologies, and Cooper Lighting Solutions.

Vizio technologies and Cooper lighting solutions.

Matt Owney: In parallel, we remain extremely excited about the post-launch scaling of FunWallet and our blockchain ecosystem powered by FunCoin and FunToken.

In parallel we remain extremely excited about the post launch scaling of front of wallet and our blockchain ecosystem powered by fund Cohen and fund token.

Matt Owney: We are continuing to aggressively scale and monetize this part of our business and look forward to the accelerated global adoption of the blockchain enabled mass customer data platform and mass mobile loyalty ecosystem as we commence trading a fun coin next month in April and fun token later this month before closing March.

We are continuing to aggressively scale and monetize this part of our business and look forward to the accelerated global adoption of the blockchain enabled mass customer data platform and mass mobile loyalty ecosystem as we commence trading of fund Cohen next month in April and fund token later this month before closing March.

Matt Owney: As stated above, we are extremely excited to announce today more than 100% sequential revenue growth quarter over quarter as promised previously for Q3 to Q4 2021 and also the guide to more than 250% revenue growth year over year for both Q1 and Q2 2022 respective

As stated above we are extremely excited to announce today more than 100% sequential revenue growth quarter over quarter as promised previously for Q3 to Q4 2021 and also the guide to more than 250% revenue growth year over year for both Q1, and Q2 2022, respectively. We.

Matt Owney: We finished 2021 extremely strong with over half of our 2021 annual revenues achieved in Q4 alone. As always, we will continue our core go-to-market strategy centered on direct and indirect agreements and contracts with Fortune 500 customers.

We finished 2021 extremely strong with over half of our 2021 annual revenues achieved in Q4 alone.

As always we will continue our core go to market strategy centered on direct and indirect agreements and contracts with fortune 500 customers, especially in the fortune 100 size range and governments ranging from local and county.

Matt Owney: especially in the Fortune 100 size range, and governments ranging from local and county to state and federal.

State and federal.

Matt Owney: In parallel, we will also dramatically expand our direct-to-consumer channel for B2C engagements across both our high-performance computing and cryptocurrency offerings to consumers.

In parallel we will also dramatically expand our direct to consumer channel for BDC engagements across both our high performance computing and crypto currency offerings to consumers.

We are extremely excited by a number of developments that have occurred over the past quarter and even more excited by what we see coming in the quarters ahead.

Matt Owney: We are extremely excited by a number of developments that have occurred over the past quarter, and even more excited by what we see coming in the quarters ahead.

First we added to our mass bookings backlog and deferred revenues for future revenue recognition over what the five year contract periods that will ultimately provide SaaS revenue recognition over the coming 12 to 16 months rolling forward.

Matt Owney: We added to our mass bookings backlog and deferred revenues for future revenue recognition over a one to five-year contract period that will ultimately provide SAS revenue recognition over the coming 12 to 16 months rolling forward.

Matt Owney: While these efforts do not provide instant or near-term gratification on revenue recognition for our P&L, they importantly demonstrate the ongoing health and expansion of our business and will be broken down in further detail by our CFO in his section of the earnings broadcast.

While these efforts do not provide instant or near term gratification on revenue recognition for our P&L. They importantly demonstrate the ongoing health and expansion of our business and will be broken down in further detail by our CFO in his section of the earnings broadcast.

Matt Owney: As a reminder, and with our mass sales cycles typically representing 2 to 4 months on average,

As a reminder, and with our mass sales cycles, typically representing two to four months on average.

Matt Owney: Recent and pending customer wins will start appearing on our P&L in the coming reporting periods ahead.

And pending customer wins will start appearing on our P&L in the coming reporting periods ahead.

Matt Owney: Second, we continue to expand our install base of Fundware IDs en masse to more than 15 billion devices worldwide, including mass platform scalability, capable of supporting up to 5 billion transactions per day.

Second we continue to expand our installed base of fund, where Ids on mass to more than 15 billion devices worldwide, including mass platform scalability capable of supporting up to 5 billion transactions per day.

500000 transactions per second and 1 billion unique devices per month.

Matt Owney: 500,000 transactions per second, and 1 billion unique devices per month.

Matt Owney: With more than 1 petabyte of data, typically growing at more than 5 terabytes per day when operating at scale, RMS platform now provides a robust customer data platform inclusive of both a detailed data ontology and a comprehensive knowledge graph for one-to-one interactions and engagement.

With more than one petabyte of data typically growing at more than five terabytes per day when operating at scale.

RMS platform now provides a robust customer data platform inclusive of both a detailed data oncology and a comprehensive knowledge graph for one to one interactions and engagement.

Matt Owney: And third, we commercially launched and started scaling our front-wallet mobile applications on Apple iOS and Google Android in conjunction with our mass blockchain ecosystem, all powered by our FunCoin and FunToken cryptocurrency.

And third we commercially launched and started scaling our funnel wallet mobile applications on Apple iOS and Google Android in conjunction with our mass blockchain ecosystem all powered by our fund Cohen and fund token crypto currencies.

Matt Owney: While Fund Coin security tokens will only appear on our balance sheet due to their status as a regulated security, Fund Token utility tokens will actually flow transactionally through our P&L as net new and virtually 100% gross margin revenue.

While fund Cohen security tokens will only appear on our balance sheet due to their status as a regulated security.

Im token utility tokens will actually flow transactions through our P&L as net new and virtually 100% gross margin revenue.

Matt Owney: At this time, our CFO , Matt Owney, will go deeper into our fourth quarter and full year 2021 financial performance as reported, including our strong sequential revenue growth, our dramatic balance sheet improvement,

At this time, our CFO , Matt Olney will go deeper into our fourth quarter and full year 2021 financial performance as reported including our strong sequential revenue growth our dramatic balance sheet improvements at our 250% plus year over year revenue growth guidance that we <unk>.

Matt Owney: and our 250% plus year-over-year revenue growth guidance that we expect for the first two quarters of 2022 operation. Matt, please go ahead.

For the first two quarters of 2022 operation.

Matt. Please go ahead.

Thanks, Alan and good afternoon, everyone.

I'd like to thank you all for joining us today for a review of our full year 2021 financial performance and our progress on key strategic initiatives.

Matt Owney: I'd like to thank you all for joining us today for a view of our full year 2021 financial performance and our progress on key strategic initiatives.

Matt Owney: For clarity, I'll be discussing GAAP financial measures unless otherwise specifically noted.

For clarity I'll be discussing GAAP financial measures unless otherwise specifically noted.

Matt Owney: Our press release, 8K, and website provide a reconciliation about GAAP to non-GAAP financial results.

Our press release 8-K and website provide a reconciliation of both GAAP to non-GAAP financial results.

Net revenues for the full year 2021 totaled $10 6 million, which represents 6% growth year over year.

Matt Owney: Net revenues for the full year 2021 totaled $10.6 million, which represents 6% growth year-over-year.

Matt Owney: Our mass platform subscriptions and services customers revenue was 5.3 million or 50% of net revenue.

Our mass platform subscriptions and services customers revenue was $5 3 million or 50% of net revenues.

With the acquisition of life technologies that closed in mid October we were able to ship $3 1 million in computer hardware revenues were 29% of net revenues.

Matt Owney: With the acquisition of Light Technologies that closed in mid-October, we were able to ship $3.1 million in computer hardware revenues, or 29% of net revenue.

Matt Owney: This was a great achievement for the light team with less than a full quarter with Funwood.

This was a great achievement for the light team with less than a full quarter with fun way.

Matt Owney: Gross margin was 33.9% compared to 66.4% last year.

Gross margin was 33, 9% compared to 66, 4% last year on a non-GAAP adjusted basis gross margin was 43, 9% compared to 69, 4% in the previous year.

Matt Owney: On a non-GAAP-adjusted basis, gross margin was 43.9% compared to 69.4% in the previous year.

Matt Owney: The drop in gross margin can be attributed to two things, including first, a mismatch of cost of goods sold and the revenues it is associated with.

A drop in gross margin can be attributed to two things, including first a mismatch of cost of goods sold and the revenues it is associated with it.

Our fulfillment team is diligently working on a few large projects that shifted out to 2022.

Matt Owney: Our fulfillment team was diligently working on a few large projects that shifted out to 2022 after originally being scheduled for delivery in Q4 21.

The originally being scheduled for delivery in Q4 'twenty one.

Matt Owney: As we have discussed in the past, this situation does occur from time to time, but we expect to mitigate these scenarios in the future as we continue to grow our software business.

As we have discussed in the past the situation does occur from time to time, but.

We expect to mitigate these scenarios in the future as we continue to grow our software business.

The timing shift has negatively affected our margins in Q4, as we recognized the costs associated with the projects.

Matt Owney: The timing shift has negatively affected our margins in Q4 as we recognize the costs associated with the projects but have yet to recognize the revenue.

You have to recognize the revenue.

Matt Owney: We did our part on time, but we aren't always the only dependency, which is both a blessing and a curse.

We did our part on time, but we aren't always the only dependency which is both a blessing and a curse.

Matt Owney: Multiple dependencies means that we are sticky and built a lot of consensus to be implemented. But sometimes it means we have to wait on folks who aren't as operationally efficient as we have become. While I do expect our margins

Dependencies means that we are sticky and built a lot of consensus to be implemented but sometimes it means we have to wait on folks who aren't as operationally efficient as we have become.

Well I do expect our margins to fluctuate from time to time.

Matt Owney: A lower margin quarter generally means our bookings are strong and we are working to deliver on our backlog.

The lower margin quarter generally means our bookings are strong and we are working to deliver on our backlog.

I'd like to reiterate we continue to have the long term goal of 75% plus gross margins for our mass revenue.

Matt Owney: I'd like to reiterate, we continue to have the long-term goal of 75% plus gross margins for our mass revenue. Secondly, our new business line, Light by Funware, has a different

Secondly, our new business line life by Sun wear.

A different gross margin profile than we've had in the past.

Matt Owney: We have been moving quickly to fully integrate light into firmware and are pleased with the top line revenue achieved for Q4.

We have been moving quickly to fully integrate life into phone Ware and are pleased with the topline revenue achieved for Q4.

Matt Owney: As with any acquisition, we experienced increased costs above and below the line during our integration phase, which impacted our gross margin.

With any acquisition, we experienced increased costs above and below the line during our integration phase, which impacted our gross margins.

Matt Owney: We fully expect that gross margins will pick back up as we continue to integrate and grow in 2022.

We fully expect that gross margins will pick back up as we continue to integrate and grow in 2022.

Total operating expense was $20 5 million slightly up from last year, excluding the $4 5 million dollar charge for legal settlements. We took in Q3 of 2020.

Matt Owney: Total operating expense was $20.5 million, slightly up from last year, excluding the $4.5 million charge for legal settlement we took in Q3 of 2020.

Other noncash operating expense items were stock based compensation and amortization of intangibles, making up a combined $4 1 million this year compared to $4 3 million in the prior year.

Matt Owney: Other non-cash operating expense items were stock-based compensation and amortization of intangibles, making up a combined $4.1 million this year compared to $4.3 million in the prior year.

Matt Owney: By excluding these one-time and non-cast charges, along with the charge for legal settlement, adjusted operating expense was $16.3 million compared to $15.3 million last year.

Excluding these onetime and noncash charges along with a charge for legal settlement adjusted operating expense was $16 3 million compared to $15 3 million last year.

Matt Owney: We have continued to invest in our sales and marketing teams year over year and plan to further invest in those areas to fuel our future growth.

We have continued to invest in our sales and marketing teams year over year and.

We plan to further invest in those areas to fuel our future growth.

non-GAAP adjusted EBITDA loss was $11 7 million compared to $8 4 million last year.

Matt Owney: non-GAAP adjusted EBITDA loss was $11.7 million compared to $8.4 million last year.

Matt Owney: Net loss was $53.5 million, or $0.71 per share, compared to $22.2 million net loss, or $0.50 per share loss last year.

Net loss was $53 5 million or <unk> 71 per share compared to $22 2 million net loss or <unk> 50 per share loss last year.

Matt Owney: The main factors driving the change were a few accounting treatments that we are required to take, although they have minimal to no cash implications to operations.

The main factors driving the change where a few accounting treatments that we are required to take although they have minimal to no cash implications. The operations. These factors include noncash charges for the fair value adjustment for warrant liabilities of $18 1 million.

Matt Owney: These factors include non-cast charges or the fair value adjustment for warrant liabilities of $18.1 million.

Matt Owney: and impairment of digital currency for $9.4 million, in addition to a one-time charge of just under $8 million for loss on extinguishment of debt related to the payoff of our 2020 senior convertible notes in the first half of 2021.

An impairment of digital currency for $9 4 million. In addition to a one time charge of just under $8 million for loss on extinguishment of debt related to the payoff of our 2020 senior convertible notes in the first half of 2021.

non-GAAP EPS adjusting for these items, along with stock based compensation and amortization of intangibles was 21 cents per share loss for 2021.

Matt Owney: non-GAAP EPS adjusting for these items, along with stock-based compensation and amortization of intangibles was 21 cents per share loss for 2021 compared to 27 cents per share loss in 2020.

Compared to 27 cents per share loss in 2020.

Backlog and deferred revenue at the end of the year totaled $8 6 million down slightly from $9 1 million at the end of last year.

Matt Owney: Backlog inferred revenue at the end of the year totaled $8.6 million, down slightly from $9.1 million at the end of last year.

Moving to the balance sheet, we closed the year with $23 1 million in cash and $4 9 million in debt. We also currently hold just over 641 big coin and 1217 theory them with an aggregate value of approximately 31 million based on today's prices.

Matt Owney: Moving to the balance sheet, we close the year with $23.1 million in cash and $4.9 million in debt. We also currently hold just over 641 Bitcoin and 1,217 Ethereum with an aggregate value of approximately $31 million based on today's price.

In closing we are thrilled with our 2021 results, but are even more excited about the opportunities going forward in 2022 and beyond.

Matt Owney: In closing, we are thrilled with our 2021 results, but are even more excited about the opportunities going forward in 2022 and beyond.

Matt Owney: In short, we're just getting started and now finally have the ability to go on the offensive. We have a strong balance sheet with very little debt and also have access to $200 million of additional capital as needed via our shelf offering.

In short, we're just getting started and now finally have the ability to go on the offensive we have a strong balance sheet with very little debt.

So I have access to $200 million of additional capital as needed via our shelf offering.

Matt Owney: Importantly, we are committed to continuing to build revenue and market share in all business lines through both organic and inorganic opportunities.

Importantly, we are committed to continuing to build revenue and market share in all business lines through both organic and inorganic opportunities.

Matt Owney: As Alan previously mentioned, we are positioned to start the year off strong and expect to post for the first time as a public company, full quarterly revenue of more than $6 million here in Q1 2022.

Allan previously mentioned, we are positioned to start the year off strong and expect to post for the first time as a public company full quarterly revenue of more than $6 million here in Q1 2022.

We will remain active with both financial conferences, and investor meetings, and our efforts to tell our story and further strengthen our corporate profile and the capital markets. We were happy to see our institutional ownership based double year over year led by the Vanguard group and Blackrock and are extremely appreciative of our strong and growing retail investor base.

Matt Owney: We will remain active with both financial conferences and investor meetings in our efforts to tell our story and further strengthen our corporate profile in the capital market.

Matt Owney: We were happy to see our institutional ownership base double year over year, led by the Vanguard Group and BlackRock, and are extremely appreciative of our strong and growing retail investor base.

The next major financial conference, we will be attending the C. H C. Wainwright Global investment conference on May 23rd through May 25th in South Florida.

Matt Owney: The next major financial conference we will be attending is the H.G. Wainwright Global Investment Conference on May 23rd through May 25th in South Florida.

We will look to augment the number of one on one conversations and meetings with high class.

Matt Owney: We will look to augment the number of one-on-one conversations and meetings with high class.

Matt Owney: institutional investors at each event as opportunities present themselves. With that, I would like to turn

Institutional investors at each event as opportunities present themselves.

With that I would like to turn the call over to Randall.

Thanks, Matt.

Speaker Change: Thanks, Matt. FundWare is a materially different operating company than it was when we reported the third quarter last year. What we were able to achieve in the fourth quarter has positioned us well for 2022.

Whereas a materially different operating company than it was when we reported the third quarter last year, what we were able to achieve in the fourth quarter has positioned us well for 2022.

Now before I cover each of our unique business units I wanted to take a moment to share our current Michigan envision statements, which we recently refined and ratified by our board.

Speaker Change: Now, before I cover each of our unique business units, I wanted to take a moment to share our current mission and vision statements, which we recently refined and ratified by our board.

Button Wars mission.

Speaker Change: Our dedicated team of pioneers deploys cutting-edge technology at the intersection of mobile, cloud, big data, and blockchain in order to help any brand in any industry better engage, manage, and monetize their global audiences and communities.

Our dedicated team of Pioneer's deploys cutting edge technology at the intersection of mobile cloud Big data and blockchain in order to help any brand in any industry better engage manage and monetize their global audiences and communities are multi screen as a service enterprise cloud platform facilitates one to one.

Speaker Change: Our multi-screen as a service enterprise cloud platform facilitates one-to-one engagement and interactions between brands and individuals with a focus on engaging the right person at the right time, in the right place, on the right screen, in the right context in order to drive profitable behaviors and delight audiences worldwide, whether they are consumers, channel partners, employees, or advocates.

Engagement and interaction between brands and individuals with a focus on engaging the right person at the right time and the right place on the right screen in the right context in order to drive profitable behaviors and delight audiences worldwide what are their consumers channel partners employees or.

That's.

Fun words vision.

Speaker Change: We will create a Fundware ID for every human being on Earth that has a device touching a network through their favorite brands, venues, and applications that interface or intersect with Fundware mass software solutions or infrastructure.

We will create a fun, where I D for every human being on Earth that has a device touching and network through their favorite brands venues and applications that interface or intersect with fun wearing masks software solutions, our infrastructure. Our core vision is to transform the digital human experience world.

Speaker Change: Our core vision is to transform the digital human experience worldwide by leveraging personal, corporate, and government data to better inform, facilitate, and improve interactions and engagements between brands and individuals in the real world and virtual world alike.

Wide by leveraging personal corporate and government data to better inform facilitate and improve interactions and engagements between brands and individuals in the real world and the virtual world alike now to achieve this we have organized the company around four key business units software subscriptions and services.

Speaker Change: Now to achieve this, we have organized the company around four key business units.

Speaker Change: software subscriptions and services, application transactions, blockchain, and Lite by Fundware. As we further scale and commercialize each business unit, we will point back to these as we think about reporting unit-specific key performance indicators in the future and providing further guidance to the market.

Application transactions blockchain and liked by fund where as we further scale and commercialize each business unit will point back to these as we think about reporting unit specific key performance indicators in the future and providing further guidance to the market.

Software subscriptions and services.

Speaker Change: Although we see positive signs that point towards recovery, the pandemic continues to influence buying decisions and extend the sales cycles for many of our key software subscriptions and the services vertical.

Although we see positive signs that point towards a recovery. The pandemic continues to influence buying decisions and extend the sales cycles for many of our key software subscriptions and services verticals.

Speaker Change: However, the deals that did close were more indicative of the larger, multi-year contracts that will generate higher margin recurring revenue. Our average target total contract value for the deals we're focusing on today continues to trend up closer to $1 million with three to five year staff license terms.

Are the deals that did close were more indicative of the larger multi year contracts that will generate higher margin recurring revenue our average target total contract value for the deals we're focusing on today continues to trend up closer to $1 million with three to five years SaaS license terms.

Speaker Change: Quarter over quarter, we saw the most activity and interest in these four verticals, mass digital front door for healthcare, mass smart workplace for corporations, mass smart city for local officials and chambers of commerce, mass advocacy for politicians.

Over quarter, we saw the most activity and interest in these four verticals mass digital front door for health care.

Smart workplace for corporations mass smart city for local officials and chambers of Commerce.

Mass advocacy for politicians.

Speaker Change: We also recently announced a new strategic partnership with Campaign Nucleus and are thrilled to work closely with Brad Parscale again on ensuring politicians have the best possible solutions to not only better engage voters, but also ensure their message is heard.

We also recently announced a new strategic partnership with campaign nucleus and are thrilled to work closely with Brad par scale again on ensuring politicians have the best possible solutions to not only better engage voters, but also ensure their message is heard.

Speaker Change: It has also become evident that hospitality will be a key area of growth for us as we are engaged in significant discussions with multiple well-known brands to support their digital transformation initiatives. As Alan mentioned, we recently launched our Smart Hospitality Solution at Atlantis in the Bahamas, which is highlighted in a promotional video that was recently released.

It has also become evident that hospitality will be a key area of growth for us as we are engaged in significant discussions with multiple well known brands to support their digital transformation initiatives as Alan mentioned, we recently launched our smart hospitality solution and Atlantis and the Bahamas, which is highlighted in our promotional video that was recently released.

Speaker Change: This comprehensive mobile solution has already begun generating additional revenue for Atlantis by tech-enabling the guest experience across Paradise Island, which is over 140 acres and includes five distinct resorts.

This comprehensive mobile solution have already begun generating additional revenue for Atlanta by tech, enabling the guest experience across Paradise Island, which is over 140 acres and includes five distinct resorts. We are also thrilled to announce that we successfully deployed our smart workplace solution for Norfolk, Southern which has set a new standard for tech enabled.

Speaker Change: We're also thrilled to announce that we successfully deployed our smart workplace solution for Norfolk Southern, which has set a new standard for tech enabling the employee experience at their new headquarters in Atlanta, Georgia. With over 25 integrations, employees can easily manage onsite operations, such as lighting, room booking, and parking reservations from one unified mobile experience.

The employee experience at their new headquarters in Atlanta, Georgia with over 25 integrations employees can easily manage onsite operations, such as lighting room booking and parking reservations from one unified mobile experience.

Speaker Change: In addition to our industry-leading location-based services software, this ability to integrate with well over 100 third-party software platforms is a key competitive advantage for us. You can review a complete list of all the integrations we offer on funware.com under Partners.

In addition to our industry, leading location based services software this ability to integrate with well over 103rd Party software platforms is a key competitive advantage for US you can review a complete list of all the integrations, we offer on <unk> dot com under partners.

Application transactions.

With regards our application transactions business, we are seeing strong growth as we have expanded our focus to include working directly with brands rather than mostly their agencies. Many companies are struggling to keep up with the new advertising rules on popular platforms like Facebook and are equally concerned about managing consumer concern when it comes to data enriching there.

Speaker Change: With regards to our application transactions business, we are seeing strong growth as we have expanded our focus to include working directly with brands rather than mostly through agencies.

Speaker Change: Many companies are struggling to keep up with the new advertising rules on popular platforms like Facebook, and are equally concerned about managing consumer consent when it comes to data enriching their media. Our customer data platform helps brands get more out of their marketing spend by ensuring they can identify and target the right consumers with engaging media on mobile. We also added four new sales reps to the team in the fourth quarter to help us capitalize on the momentum we built heading into 2022.

Our media our customer data platform helps brands get more out of their marketing spend by ensuring they can identify and target the right consumers with engaging media on mobile. We also added four new sales reps to the team in the fourth quarter to help us capitalize on the momentum we've built heading into 2022.

Blockchain.

Speaker Change: Many people now understand how our mass platform can help brands contextually engage their customers, but blockchain technology offers us the ability to not only authenticate that engagement, but also incentivize it.

Many people now understand how our mass platform can help brands contextually engage their customers, but blockchain technology offers us the ability to not only authenticate that engagement, but also incentivize it.

Since fun coin as a regulated security token that we are developing to blockchain to enable our data exchange. It's critical that we take the appropriate steps to ensure trading occurs in a compliant manner in the fourth quarter, we have been able to set up trading accounts for most of the people who previously invested and fun coin. This has taken longer than expected, but we plan to be live on the <unk>.

Speaker Change: Since FundCoin is a regulated security token that we are developing to blockchain enable our data exchange, it's critical that we take the appropriate steps to ensure trading occurs in a compliant manner. In the fourth quarter, we have been able to set up trading accounts for most of the people who previously invested in FundCoin. This has taken longer than expected, but we plan to be live on a securitized platform by the end of the second quarter in 2022.

<unk> platform by the end of the second quarter and 2022.

Securitized markets, there's an FCC and friendly registered broker dealer and operate securitized markets a T S and alternative trading system.

Speaker Change: Securitize Markets is an SEC and FDMA registered broker-dealer and operates Securitize Markets ATS, an alternative trading system. We are also working with our attorneys to prepare a Regulation A offering to support additional investments in and distributions of fund coins.

We are also working with our attorneys to prepare a regulation a offering to support additional investments then and distributions are fun coin.

Speaker Change: In parallel, we anticipate decentralized exchanges like Uniswap to begin trading Fund Token by the end of the first quarter. In fact, we recently launched a whitelisting program to support the effort to further decentralize this unique utility token designed to promote loyalty, while ensuring participants complete the appropriate KYC and AML procedures. We will also be publishing a new website for Fund Token by the end of this month to better educate and engage our growing community.

In parallel we anticipate decentralized exchanges like any swap to begin trading fund token by the end of the first quarter. In fact, we recently launched the white listing program to support the effort to further decentralized. This unique utility token designed to promote loyalty, while ensuring participants complete that appropriate ky see in AML procedures.

We will also be publishing a new website for fun token by the end of this month to better educate and engage our growing community.

Speaker Change: To help consumers and brands manage their activities within our blockchain-enabled data exchange or mobile loyalty ecosystem, FunWallet is available for Apple iOS and Google Android and is receiving great feedback.

To help consumers and brands and manage the activities within our blockchain enabled data exchange or mobile loyalty ecosystem Cornwall. It is available for Apple iOS, and Google Android and receiving great feedback either an extension of our mass platform. We were working on a regular product updates, but larger roadmap milestones in 2022 include creating a COO.

Speaker Change: As an extension of our mass platform, we are working on regular product updates, but larger roadmap milestones in 2022 include creating a comprehensive user registration and profile experience to make it easier for users to register, as well as recover existing accounts across new devices.

Comprehensive user registration and profile experience to make it easier for users to register as well as recover existing accounts across new devices enhancing the profile experience to give users more control over the information they choose to share the ability to update and access to this information and then an auditable account of their engagement activity.

Speaker Change: Enhancing the profile experience to give users more control over the information they choose to share, the ability to update and access this information, and an auditable account of their engagement activity.

Speaker Change: new support functionality to allow users to refer friends, family, and colleagues while being rewarded for the networks they build, and location-based marketing that will enable consumers to interact with brands in the real world and be seamlessly rewarded with fun tokens.

New support functionality to allow users to refer friends family and colleagues, while being rewarded for the networks. They build and location based marketing that will enable consumers to interact with brands in a real world and be seamlessly reward with funds Hogan.

Light by fund where.

Speaker Change: As Matt and Alan already touched on, Light had a record fourth quarter as we initiated work to integrate them into Fundware following our acquisition.

As Matt and Alan already touched on light had a record fourth quarter as we initiated work to integrate them into fund. We're following our acquisition. Fortunately, we were able to secure two important strategic supplier relationships in order to help us mitigate the supply chain constraints that many of our competitors continue to face.

Speaker Change: Fortunately, we were able to secure two important strategic supplier relationships in order to help us mitigate the supply chain constraints that many of our competitors continue to face. These relationships are critical to support the increased demand we are seeing and will support our international expansion.

These relationships are critical to support the increased demand, we're seeing and will support our international expansion.

Speaker Change: We are also excited to announce that we executed a new commercial lease on a warehouse just outside of Austin where we will be moving light operations.

We were also excited to announce that we executed a new commercial lease on a warehouse just outside of Boston, where we'd be moving like operations.

Speaker Change: At double the size of Light's old warehouse in Illinois, we will have plenty of room to expand, and a more efficient layout will better support the revenue growth targets Allen has set for the team.

Double the size of life old warehouse in Illinois, we will have plenty of room to expand in a more efficient layout will better support the revenue growth targets out except for the team.

Speaker Change: As of the end of the year, we have grown to 118 employees with the addition of 41 light employees who will primarily operate out of Illinois until our new warehouse is up and running. Since the majority of our other employees are in Texas and California, we are assessing new office space in Austin and Newport Beach to support our efforts to return to the office.

As of the end of the year, we have grown to 118 employees with the addition of 41 light employees, who will be primarily operate Illinois until our new warehouse is up and running.

The majority of our other employees are in Texas, and California, We're assessing new office space in Austin in Newport Beach to support our efforts to return to the office and clothing and a more personal note since I'm engaged to marry someone who was born and raised in Ukraine I couldn't be more proud of our team for organizing supplies that recently arrived at the Ukrainian border to help refugees in need now.

Speaker Change: In closing, on a more personal note, since I'm engaged to marry someone who was born and raised in Ukraine, I couldn't be more proud of our team for organizing supplies that recently arrived at the Ukrainian border to help refugees in need. Now I'd like to turn things back over to Alan for final remarks.

I'd like to turn things back over to Alan for final remarks.

Thanks, Randall as highlighted throughout today's call. We are all extremely excited by the ongoing scaling of our mass blockchain ecosystem and the high performance computing systems that we can now ship directly to consumers because of our light technology acquisition.

Alan: Thanks, Randall. As highlighted throughout today's call, we are all extremely excited by the ongoing scaling of our mass blockchain ecosystem.

Alan: and the high-performance computing systems that we can now ship directly to consumers because of our light technology acquisition.

Alan: What it means to me is that our decade-plus of mass platform building across mobile, cloud, and big data, accompanied by our years of community engagement in blockchain and cryptocurrency.

What it means to me is that our decade plus of mass platform building across mobile cloud and big data are accompanied by our years of community engagement and blockchain and crypto currencies have resulted in the combination and convergence of massive global addressable markets and trends that can now act as strong wind at our backs to further accelerate our recent growth.

Alan: have resulted in the culmination and convergence of massive global addressable markets and trends that can now act as strong wind at our backs to further accelerate our recent growth.

We expect this ecosystem to complement and supplement our core mass offerings as we offer our enterprise customers additional capabilities to identify engage and incent their target audiences.

Alan: We expect this ecosystem to complement and supplement our core mass offerings as we offer our enterprise customers additional capabilities to identify, engage, and incent their target audience.

Alan: While many corporations and individuals are newly familiar with blockchain and cryptocurrency,

While many corporations and individuals are newly familiar with blockchain and crypto currencies, both footwear and our executives have a long and distinguished history within the global digital asset community.

Alan: Both Fundware and our executives have a long and distinguished history within the global digital asset community.

As such we expect to be a trusted bridge for fortune 500 corporations and governments looking to leverage blockchain.

Alan: As such, we expect to be a trusted bridge for Fortune 500 corporations and governments looking to leverage blockchain.

Alan: Please look for additional announcements in the coming weeks and months ahead, as we enable consumers to not only regain control of their data with fun

Please look for additional announcements in the coming weeks and months ahead, as we enable consumers to not only regain control of their data with fun coin, but also to reward them for their engagement with fund token, which can be purchased online with U S dollars bitcoin and ethereum.

Alan: but also to reward them for their engagement with FundToken, which can be purchased online with U.S. dollars, Bitcoin, and Ethereum at buy.fundtoken.com.

By Dot fund token dot com.

In parallel.

Alan: And as we would again reiterate here, we intend to complement and supplement our core organic growth activities through direct and indirect channels worldwide with opportunistic inorganic mergers and acquisitions.

And as we would again reiterate here, we intend to complement or supplement our core organic growth activities through direct and indirect channels worldwide with opportunistic inorganic mergers and acquisitions importantly, and as we did late last year with light technology, we expect to focus our merger and acquisition activity.

Alan: Importantly, and as we did late last year with light technology, we expect to focus our merger and acquisition activity rolling forward on targets that are operating profitably and would represent accretive deals in areas that will provide more customer.

Going forward on targets that are operating profitably and would represent accretive deals in areas that will provide more customers more partnerships and more distribution for our mass platform and crypto currency ecosystem, especially in international markets, including Europe .

Alan: more partnerships, and more distribution for our mass platform and cryptocurrency ecosystem.

Alan: especially in international markets including Europe , Asia, and South America.

In South America.

Finally, and importantly, rolling forward, we expect to maintain a laser focus on our core operating and financial model, which includes a rather breathtaking topline revenue growth of 250% or more year over year, all while consistently working towards cash neutrality from operations at scale and pair.

Alan: Finally, and importantly, rolling forward, we expect to maintain a laser focus on our core operating and financial...

Alan: which includes a rather breathtaking top-line revenue growth of 250% or more year-over-year, all while consistently working towards cash neutrality from operations at scale.

Alan: In parallel, we also expect to leverage our newfound balance sheet strength to transition our corporate treasury activities into a strategic asset for the company.

Hello, We also expect to leverage our newfound balance sheet strength to transition our corporate treasury activities into a strategic asset for the company.

Alan: Not only can you expect to see more purchases of Bitcoin as we go for storing value and protecting ourselves from rampant inflation.

Not only can you expect to see more purchases a bitcoin as we go for storing value and protecting ourselves from rapid inflation.

Alan: But you can also expect to see an efficient and strategic use of stable coins and decentralized finance or defi.

But you can also expect to see an efficient and strategic use of stable coins and decentralized finance or define to generate meaningful financial returns for our overall operations and results with that and in conjunction with a sincere. Thank you for your ongoing interest and support in all that we do on behalf of the entire <unk> family.

Alan: to generate meaningful financial returns for our overall operations and results.

Alan: With that, and in conjunction with a sincere thank you for your ongoing interest and support in all that we do on behalf of the entire Fundware family worldwide, I would like to now open up the call for questions to the operator. Operator? Operator? Operator? Operator? Operator? Operator? Operator? Operator? Operator? Operator? Operator? Operator? Operator? Operator? Operator? Operator?

I would like to now open up the call for questions through the operator, operator go ahead. Please.

Certainly ladies and gentlemen, the floor is now open for questions. If you have any questions or comments. Please press star one on your phone now.

Speaker Change: Certainly. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press Star 1 on your phone now.

Speaker Change: We ask that while posing your question, you please pick up your handset if listening on the speakerphone to provide optimum sound quality.

We ask that while posing your question. Please pickup your handset if a speaker phone to provide optimal sound quality. Once again, if you have any questions or comments. Please press star one on your phone now please hold them moment, while we poll for questions.

Speaker Change: Once again, if you have any questions or comments, please press star 1 on your phone now. Please hold a moment while we poll for questions.

Speaker Change: Your first question is coming from Darren Aftahee with Roth Capital Partners.

Your first question is coming from Darren <unk> with Roth capital partners.

Your line is live.

Hey, guys. Thanks for taking my questions.

Darren Aftahee: Hey, guys, thanks for taking my questions. Sue, if I may, first, can you speak to the mass revenue push out on 4Q and actually quantify how big that is?

If I may 1st can you speak to the mass revenue push out on <unk> and actually quantify how big that is.

Yeah, well, let that actually walk through the delay, but have you been saying it really goes through we had in Q2 and again in Q4, where you end up having just timing issues when we finish launches and the way. The revenue recognition actually works is that we have to wait for them to do the launch in order for us to recognize revenue.

Sue: Yeah, we'll let Matt actually walk through the delay. But as he was saying, it really goes through, we have in Q2 and again in Q4, where you end up having those timing issues when we finish launches. And the way the revenue recognition actually works is that we have to wait for them to do the launch in order for us to recognize the revenue. So Matt, do you want to actually quantify that in terms of the Norfolk Southern piece, which is predominantly that new service?

So Matt do you want to actually quantify that in terms of.

Southern piece, which is predominantly that piece of it.

Yeah, Hey, thanks Darren.

Matt Owney: Yeah, hey, thanks, Aaron. Yeah, so it's a similar situation that we talked about back in Q2 in terms of

Yes.

Similar situation there.

Talking about back in.

Q2 in terms of a push out and it just so happens that its tied mostly to one customer here and.

Matt Owney: push out and it just so happens that it's tied mostly to one customer here. And, you know, as we've talked about in the past, it's a good thing in that, you know, this is basically furthering the engagement even more and building that up. So.

As we've talked about in the past, it's a good thing and that you know this is bill.

As we further engagement, even it's even more in building that up so I know in terms of the amount I believe it's somewhere in the neighborhood of quarter million of half a million tied to tied to that project.

Matt Owney: I, uh, you know, in terms of the, the amount, I believe it's somewhere in the neighborhood of quarter million, a half a million tied to tied to that project.

Matt Owney: There's some other stuff that we've got to go through in terms of another customer it's related to as well, but we're probably talking somewhere like.

There's some other stuff that we've got to go through in terms of.

The other customer it's related to as well, but we're probably talking somewhere like.

Matt Owney: $250,000, $300,000 that's kind of related to that project.

250, 300000, that's kind of related to that project.

Great. That's helpful and then can you.

Speaker Change: Great. That's helpful. And then can you speak to your indirect channel partners you signed and kind of how that's progressing and when we actually see kind of yield on those relationships in 2022?

Speak to your indirect channel partners, you signed and kind of how that's progressing and when we could actually see kind of yield on those relationships in 2022.

Yeah, I'll take the first part and then I'm going to hand over to Randall.

Speaker Change: Yeah, I'll take the first part and then I'm going to hand over to Randall for the second piece. So, we spent most of COVID, especially 2021, working through activating our partner portal, inclusive of documentation, training, and certification activities across each of the names that we mentioned in my section of the earnings call.

So.

We spent much of the Covid, especially 2021 working through activating our partner portal inclusive of documentation training and certification activities across each of the names that we mentioned in my section of the earnings call.

Randall: What we've been doing is using that period to actually work through their processes in order to go live. Depending on which group it is, they on average think about 6 to 12 months is as they phrase the proverbial cog in the wheel to get moving for them to have all of their sales folks trained, their marketing groups, and a lot of the packaging that they do in pricing manuals specific to marketing packages on GoToMarket. As we've been going through this, what we've seen

We've been doing is using that period actually work through their processes in order to go live.

Pending on which group. It is they on average think about six to 12 months is as they phrase.

The proverbial cog in the wheel to get moving for them to have all of their sales folks trained their marketing grades and a lot of the packaging that they do in pricing Emmanuel specific to marketing packages on go to market.

As we've been going through this what we found is the biggest gating item to them scaling out has predominantly been their timing of being back on the office and doing the in person meeting to make their own customers. So we only uniquely fee that's in the software side, both direct and indirect.

Randall: The biggest gating item to them scaling out has predominantly been their timing of being back on the office and doing the in-person meetings.

Randall: to meet their own customers. So we only uniquely see this in the software side, both direct and indirect. As we found the average price of a lot of these deals used to be more like a half million. They seem to be closer to 1.5 million. What used to be two to four months tends to be three to six. The budgets are bigger because they were unspent last year, but they're a little bit more deliberate because they're timing when they actually get back.

As we found the average price of a lot of these deals that needs to be more like a half million dollars. They seem to be closer to $1 5 million what used to be two to four months tends to be three to six the budgets are bigger because they were unspent last year, but there are a little bit more deliberate because their timing when they actually get back.

Norfolk Southern piece, Matt mentioned actually was a direct deal.

Randall: The Norfolk Southern piece Matt mentioned actually was a direct deal, but that actually was to the timing of their new headquarters in Atlanta. They were going to have everyone in in Q4. They pushed it to Q1, which is where we had the COGS and revenue go. But, Randall, why don't you provide some additional flavor and context on the various indirect channels and some of the differences you're seeing between hardware versus service provider and consultant.

But that actually was to the timing of their new headquarters in Atlanta, They were going to have every one and in Q4. They pushed into Q1, which is where we had the cogs in revenue go up at random why don't you provide some additional flavor in contact on the variance indirect channel and some of the differences you're seeing between hardware versus service.

<unk> consultants.

Randall: Yeah, thanks, Alan. I think you've covered it pretty well. I mean, we've spent a lot of the second half of the year just kind of getting all the dill wrench portals set up, getting all the collateral set up, and then it takes a while to kind of train them. And then in a situation like Carrier, you know, we're also working through training, you know, their VARs because they do a lot of selling through VARs. And so,

Yeah. Thanks Alan.

Covered it pretty well I mean, we spend a lot of the second half of the year, just kind of getting on with bill rents portal setup getting all the collateral set up and then it takes a while to kind of train them in an exaggeration of my carrier. We're also working through training you know their vars, because I do a lot of selling for Vars and so you know I think that that's going to still be a little bit of an unknown for US you know how long it takes them bear teams.

Randall: You know, I think that's going to still be a little bit of an unknown for us, you know, how long it takes their teams to activate. You know, our goal is to sign up as many as possible, get as many as possible trained.

Activate you know our goal is to sign up as many as possible to get as many as possible train.

Randall: And really, I think probably the biggest difference, you know, kind of going into this year is seeing a lot more on the software side. There's a lot of engineering groups.

I think that probably the biggest difference you know kind of going into this year thing a lot more on the software side. There's a lot of engineering groups and folks who are doing a lot of large kind of fortune 500 work, we don't want to start from scratch and we kind of always felt would be competitors, but actually kind.

Randall: and folks who are doing a lot of large kind of fortune 500 work who don't want to start from scratch, who we kind of always felt would be competitors, but actually kind of work

Kind of work.

Randall: in concert with us, because they don't really focus on mobile. And so a lot of those have been reaching out and looking at, you know, probably applying, you know, our mobile platform to a much larger project. So I think it's going to be, you know, still probably second half of 2022 before we start seeing meaningful growth.

In concert with us because they don't really focus on mobile and so a lot of those have been reaching out and looking at you know probably applying our mobile platform to a much larger project. So I think it's going to be you know still probably second half of 2022 before we start seeing meaningful growth out of the existing indirect channels that we have and I think most of them.

Randall: out of the existing indirect channels that we have.

Randall: And I think most of that is going to be, you know, hardware and system integrators still. But I'd like to see a lot of these software vendors come online as well who could probably execute a little faster because they're working on these, you know, larger projects.

There's going to be you know hardware and <unk>.

System integrators, Phil, but I'd like to see a lot of these software vendors come online as well, who could probably execute a little faster because they're working on these larger projects.

Randall: They have an immediate need now, but again, I know it's a slow process and we've been saying this for a while, but these are multi-billion dollar companies, they don't move fast. We were just at HIMSS again with Cox.

And you know they they have an immediate need now, but again, it's still I know, it's a slow process.

We've been famous for a while but you know these are multibillion dollar companies. They don't move fast we were just at him again with Cox.

Randall: As you may recall, Cox is licensing our health care solution. We announced last year that HID was licensing our smart workplace solution. These are multi-billion dollar companies, and so this takes a while, but this is no different than Microsoft trying to get Microsoft Office on every phone and every computer rather than selling direct to every single person with a phone or a computer.

I recall, you know Cox is licensing our health care solution, we announced five HIV with licensing our smart workplace solution or even a multibillion dollar company and so the thing is if this takes a while but this is no different than Microsoft trying to get Microsoft office on every phone and every computer.

Rather than selling.

Direct to every single person with a phone or a computer. So again I think it will still be probably second half of the year before we see meaningful growth in revenue from the indirect channels.

Randall: So again, I think it'll still be probably second half of the year before we see meaningful growth and revenue from those indirect channels.

Thanks, maybe you could squeeze the last two into one so I'm just kind of curious the risk.

Speaker Change: Thanks. Maybe I could squeeze the last two into one. So I'm just kind of curious the

Speaker Change: reception you've had from brands in terms of wanting to use Fun Token as kind of a white label with customers. And then secondarily, since you announced the partnership with Campaign Nucleus, what kind of traction have you seen in terms of pipeline interest on the political space? Thanks.

The reception you've had some brands in terms of wanting to use fun token is kind of a white label with customers and then secondarily asset.

Announced.

Partnership with campaign nucleus, what kind of traction have you seen in terms of like pipeline interests on the political space. Thanks.

Okay first of all I know Mary Allen I'll take the second one yeah, let's say on the crypto effect, it's actually pretty exciting you know theres a couple of different flavors and how brands think about you know our crypto ecosystem I think that most of them are starting with kind of the value proposition of fund token and so this idea of Hey, I've got I've got certain things that I want my customers to do more of.

Speaker Change: I'll take the first one and maybe Alan can take the second one. Yeah, I was just going to say, on the crypto side, it's actually pretty exciting. You know, there's a couple of different flavors in how brands think about, you know, our crypto ecosystem. I think most of them are starting with kind of the value proposition of fun tokens.

Alan: And so this idea of, hey, I've got certain things that I want my customers to do more of. We call it driving profitable behavior. But I don't want to necessarily take on the headache of launching my own cryptocurrency, launching a team that can manage customer support, wallet addresses, all of the compliance that would be required of any meaningful company, especially a public company. And so I think that's what we offer, that ability to kind of have compliant utility token as a service.

We call it driving profitable behavior, and so but I don't want to necessarily take on the headache of launching my own crypto currency launching a team that can manage customer support wallet addresses all of the compliance that would be required of any meaningful company, especially the public company.

That's what we offer that ability to kind of have compliant utilities OCA as a service and so we're seeing you know initially a lot of folks kind of in the engagement space. They're trying to modeling you know rewards. So you know think like fantasy Sports thing you know things, where you know there's a lot of gamification involved those are kind of the initial ones that we.

Alan: And so we're seeing, you know, initially a lot of, you know, folks kind of in the engagement space, they're kind of modeling, you know, rewards. So, you know, think like fantasy sports, think, you know, things where, you know, there's a lot of gamification involved. Those are kind of the initial ones that we're talking to today.

We're talking to today are and so I think I'm really excited about that a lot of people are saying it because that's how the first conversation I asked them. It's like you know do you want to have your own token ecosystem and kind of uniformly they're like absolutely not I just don't want to deal with it I want to focus on what we do well.

Alan: And so I think I'm really excited about that. A lot of people are saying, and that's kind of the first conversation I ask them is like, you know, do you want to have your own token ecosystem and, you know, kind of uniformly they're like, absolutely not. I just don't want to deal with it. I want to focus on what we do well and all we want is really the benefit of it without having to deal with the headache. So that's great for us because we get to kind of book that as revenue, you know, we're basically.

And all we want is really the benefit of it.

Having to deal with a headache, so that's great for us because we get the kind of book that as revenue basically software to us really great gross margin software for US and then they get the benefit of not having to keep any of these reward points of a liability on their books.

Alan: software to us, really great gross margin software for us.

Alan: And then, you know, they get the benefit of not having to keep, you know, any of these reward points as a liability on their books.

Alan: and not have to deal with any of the headaches of, you know, minting their own token, dealing with, you know, exchanges and, you know, dealing with, you know, all the headaches of what happens when you have a cryptocurrency, which, you know, quite frankly, it's still a new industry. You're dealing with a lot with fraud, you're dealing a lot with bot attacks.

I have to deal with any of the headaches of mentoring their own toga in dealing with you know exchanges and dealing with you know all the headaches of what happens when you have a crypto currency, which quite frankly is still a new industry youre dealing with a lot with fraud, you're dealing a lot with a bot attacks.

Alan: and you're dealing a lot of complexity of exactly how these ecosystems develop. And so we've had to end up kind of working on our own things just because the industry didn't have the right ecosystem to meet our needs like self-sovereign identity and then also kind of how we address layer two scaling. So that's going to be the future of crypto in terms of how it kind of crosses the chasm into mainstream.

A lot of complexity of exactly you know how these ecosystems develop and so we've had to end up kind of working on our own things just because the industry didn't have the right ecosystem to meet our needs like self sovereign identity.

And then also kind of how we address layer two scaling so that's gonna be the future of crypto in terms of how it kind of crossing the chasm into mainstream youre going to have to have you know centralized companies deploying decentralized ecosystems. So that they can handle things like fraud and in scaling appropriately, but getting a good.

Alan: you're going to have to have, you know, centralized companies.

Alan: Deploying decentralized ecosystems so that they can handle things like fraud and scaling appropriately But getting a good response so far and all you know in a lot of different conversations with brands Who would use that as kind of a crypto?

The response, so far and are you now and in a lot of different conversations with brands, who would use that as kind of a crypto as a service if you will.

Speaker Change: Yeah, and I'll take the part on the question about campaign nucleus and our work with Brad Parscale. Obviously we have a

Yeah, and I'll take the part on the question campaign, new plants and our work with bad parts scale, obviously, we have a <unk>.

Speaker Change: long-standing history of working with Brad that dates back to the work on American-Made Media Consultants during the Trump-Pence 2020 election. We're super proud of all the work that we did on iOS and Android. It was the most advanced application portfolio for advocates and constituents ever done.

A long standing history of <unk>.

Looking with Brad that dates back to the work on American made me it consultants during the Trump in 2020 election.

We're super proud of all the work that we did on iOS and Android.

The most advanced application portfolio for advocates and constituents ever done.

Speaker Change: in politics anywhere in the world and we held up at scale, none of our systems were hacked.

And politics anywhere in the world and we held up at scale, none of our systems were hacked.

Speaker Change: and we really proved ourselves under mass scale in very difficult circumstances.

And we really proved ourself under mass scale.

Difficult circumstances.

Speaker Change: Things like the Olympic Games helped us, the World Cup helped us, but when we apply this to politics...

Things like the Olympic games helped us the World Cup helped us, but when we apply this to politics.

Speaker Change: You know, we're a software company and a cloud platform and infrastructure company at the end of the day, but it was fascinating to see, you know, the level of reactions that happened. You know, I don't see a lot of reactions when Apple or Dell, you know, licensed their products.

We're a software company and a cloud platform and infrastructure company at the end of the day.

But it was fascinating to see the level of reactions that happen I don't see a lot of reactions when apple or Dell license.

Speaker Change: iPhones or computers to Republican Party, but boy, did we get a lot of grief from all over the place because we did it for software. What Brad and our team have been focused on, and Brad's running Campaign Nucleus, he's really working to aggressively create a dedicated CRM that would be like Salesforce, for lack of a better comparable, but specifically and only for center-right politics globally.

Phones or computers to Republican Party.

But boy did we get a lot of grief from all over the place because we did it for software.

And our team has been focused on in brad's running campaigns new plants.

He is really working to aggressively create a dedicated CRM that would be like salesforce for lack of a better comparable but specifically and only for center right politics globally.

Speaker Change: What we do is everything Brad and Campaign Nucleus doesn't.

What we do is everything Brad and campaign nucleus doesn't so we handle the platform in the cloud we have all the components that help engage manage and monetize audiences. We have a specialty in mobile are proven reliability and security at scale.

Speaker Change: So we handle the platform in the cloud. We have all the components that help engage, manage, and monetize audiences. We have a specialty in mobile, proven reliability and security at scale. And so we're a great partner. And to that end.

And so we're a great partner and to that end.

Speaker Change: We're currently working on development and this will be really important and something that will be done by the end of Q2.

Currently working on development.

This will be really important and something that will be done by the end of Q2.

Speaker Change: But we're actually putting a whole series of solutions that are dedicated.

But we're actually putting a whole series of solutions that are dedicated for the political vertical and for advocacy predominantly on a center right basis. It doesn't just include local elections that are tied to cities and counties.

Speaker Change: for the political vertical and for advocacy, predominantly on a center-right basis.

Speaker Change: This doesn't just include, you know, local elections that are tied to cities and counties.

Speaker Change: But this gets into state and federal elections, including international opportunities, as you know, around the world and all democratic

But this gets into the state and federal elections, including international opportunities.

As you know around the world and all of them a product.

Speaker Change: uh... organizations uh... they're having president elections and their own version of congress

Organizations are there having president elections in their own version of Congress.

Speaker Change: for their version of the Senate, the House, and so forth. So we're real excited that we're literally jointly partnered and jointly developing all of that. We have all the applications that are based on what we built for President Trump in the last election. We're trying to make those available. So whether you're running for mayor, city council, state representative.

So their version of the Senate and the house and so forth.

So we're real excited that were literally jointly partnered and jointly developing all of that we have all the applications that are based on what we built for president Trump.

The last election, we're trying to make those available. So whether you are running for Mayor City Council State representative.

Speaker Change: Whether you're running for the U.S. Senate, the U.S. House of Representatives, or literally anything in between up to the president of the United States or the president or Congress of another country, we fully intend to provide solutions from local to national and international for everyone.

Whether you're running for the U S Senate U S house of representatives or literally anything in between up to the president of the United States or the president or Congress in another country.

We fully intend to provide solutions from local to national and international for everyone.

Speaker Change: Recently, as some of you may have seen, which is probably important to highlight, there's always a lot of activity and noise around Congress on January 6th. And you probably saw a lot of press where there was some subpoena activity that went out towards Salesforce to get access to all of the data.

Recently as some of you may have seen which is probably important to highlight.

There's always a lot of activity and noise around Congress in January six and you.

So a lot of press, where there was some activity that went out toward salesforce to get access to all of the data.

For the Republican National Committee and the GOP.

Speaker Change: for the Republican National Committee and the GOP. And fundamentally what just happened, we're not a part of any of that, but when Salesforce is going to try to turn over all that data.

And fundamentally what just happened.

A part of any of that.

But when our sales force is going to try to turn over all that data.

Speaker Change: I think the Republican groups are trying to block that because that's literally all of the information around all the people that they interact with for their own constituencies.

I think the Republican groups are trying to block that because that's literally.

All of the information around all the people that they interact with for their own constituencies.

Speaker Change: And I don't know how that plays out, but I will say that that probably was a shot across the bow. And what that just did for us is it opened up, you know, half of the United States.

And I don't know how that plays out, but I will say that that probably was a shot across the bow and what that just yet for us since it opened up half of the United States. We're absolutely nobody who is dealing with the GOP, the RNC or ever again going to be licensing from salesforce.

Speaker Change: where absolutely nobody who's dealing with the GOP, the RNC are ever again going to be licensing from Salesforce.

Speaker Change: for any reason, because all of their data tied to their relationships, they believe are theirs. Much like when we do work for our customers, our customers' data are their own.

For any reason because all of their data tied to their relationships are they.

They believer there is much like when we do work for our customers our customers data or their own.

Speaker Change: any individual using an application of Funware, it's their identity, they own it, they're in charge of it, they decide what happens.

Any individual using an application a fund where it's their identity they own it they are in charge of it they decide what happens where.

Our platform and so we honor that personal data sovereignty at the individual app user level and for every customer that we have in every channel partner, we have and while we have no involvement and all of that public activity that's been going around.

Speaker Change: And so we honor that personal data sovereignty at the individual app user level and for every customer that we have and every channel partner we have. And while we have, you know, no involvement in all of that public, you know, activity that's been going around just in the last few weeks.

Just in the last few weeks.

Speaker Change: I can assure you that that's going to dramatically open up opportunities and a shift in spending because nobody is going to ship to anyone who is going to hand over, you know, their customer data or information. And, you know, I fully understand that. And we're very proud that we've complied with privacy data, things like GDPR, COPA, and all these other rules long before this was even a fashionable topic.

I can assure you that that's going to dramatically open up opportunities and a shift in spending because nobody is going to shift to anyone who is going to handover.

Their customer data or information and.

I fully understand that and we're very proud that we've complied with privacy data things like GDP are Copa and all these other rule long before this was even a fashionable topic. So we're excited that we're gonna have these joint solutions, we have in all of our expertise from what we built in the past.

Speaker Change: So we're excited that we're gonna have these joint solutions. We have all of our expertise from what we built in the past. We're gonna amplify that, we're gonna go to market. We know the big prize is all the cycles leading into 2024. But obviously here in November , there's gonna be midterms. And we've been having communication with folks from coast to coast and different kind of potential election races. And are excited wherever we can deploy our solutions to help have an easier and more direct conduit between candidates.

We're going to amplify that we're going to go to market. We know the big prize the all the cycles leading into 2024.

But obviously here in November theres going to be mid terms and we've been having communication with folks from coast to coast and different kind of a potential election races and are excited wherever we can deploy our solutions to help have an easier and more direct conduit between candidates.

Speaker Change: and their constituents so that the people can make smarter decisions on who they want to vote for and why.

And their constituents so that people can make smarter decisions on who they want to vote for and why.

Thanks, guys.

Thanks for your question.

Speaker Change: Your next question is coming from Scott Buck with H.C. Wainwright. Your line is live.

Our next question is coming from Scott Buck with H C. Wainwright.

Your line is live.

Hi, good afternoon guys.

Hey, Scott.

Yeah.

Good good I just have a couple of questions first I know, it's early but can you give us a little color on where you are in terms of kind of cross selling with a light.

Scott Buck: Good, good. I just have a couple of questions. First, I know it's early, but can you give us a little color on where you are in terms of kind of cross-selling with Light? You know, I know you've done some advertising of their products on your site over the holiday season. I'm just kind of curious where that stands and what early feedback has been.

You know I know you had done some advertising.

Of their product on your sites over the holiday season, I'm, just kind of curious where that stands and what early feedback has been.

Speaker Change: Yeah, let me start with the high level and then I'm going to have Rambo finish this off since it's a lot of, you know, operational things. So again, we have our kind of four areas of business.

Yeah, Let me start with the high level and then I'm Gonna have random finished the Thompson with a lot of operational things. So again, we have our kind of four areas of business.

Rambo: We have the software part of the business, we have the application transaction part of the business, we have the cryptocurrency piece of the business, and then we have the Litebuy Fundware hardware part of the business. As you might expect, what we've been trying to do is, first thing last quarter, we focused on acquisition integration for Lite, optimizing the supply chain, working through demand gen.

We have the.

Software part of the business, we have the application transaction part of the business. We have the crypto currency piece of the business and then we have the light by some of our hardware part of the business.

As you might expect we've been trying to do is first thing last quarter, we focused on acquisition integration for life optimizing the supply chain working through demand Gen scaling getting our new production facility up and a whole bunch of operational logistics at all that you know Randall and kind of get in there.

Rambo: scaling, getting our new production facility up, and a whole bunch of operational logistics that I'll let Randall kind of get into. But what we've been focusing on is we look at every one of these as conduits for distribution of fundware software.

But what we've been focusing on is we look at every one of these as conduits for distribution a fund where software.

Randall: And so, when we sell our software directly to corporations and governments, obviously our software development kits, application program interfaces, or our vertical solutions get adopted and included and then go to market with their audiences. And that's great for expansion of our firmware IDs.

And so when we sell our software directly to corporations and governments, obviously, our software development kits application program interfaces.

Or our vertical solutions get adopted and included and then go to market with their audiences and that's great for an expansion of our friend where ideas.

Randall: In parallel, right now with Light by Funware, we're focused on the operational logistics to scale the standalone computing delivery.

In parallel right now with light by fund, where we're focused on the operational logistics to scale. The standalone computing delivery and it's really going to be starting in third and fourth quarter, where it will start adding more components, probably initially things like fund wallet and then we will slowly start expanding where we.

Randall: and it's really going to be starting in third and fourth quarter.

Randall: where we'll start adding more components, probably initially things like FunWallet, and then we'll slowly start expanding where we can take the capabilities of our crypto ecosystem.

You can take the capabilities of our crypto ecosystem, and our rewards ecosystem and start making that available through each of these decentralized nodes as we sell those pieces of hardware and ideally, we'll even have systems that will help people get an ROI on their computer both when they are actively engaging like on trade.

Randall: and our rewards ecosystem and start making that available for each of these decentralized nodes as we sell those pieces of hardware. And ideally, we'll even have systems that will help people get an ROI on their computer, both when they're actively engaging, like

Randall: play to game or play to engage with advertising or surveys. And on the flip side of that, there'll be passive opportunities where you can do mining and other things to also pay down the cost of it.

Game.

Or play to engage with advertising or surveys and on the flip side of that there'll be passive opportunities, where you can do mining and other things.

To also pay down the cost of that hardware. So think of light is the first half of the year is all about direct operational integration and scale supply chain.

Randall: So think of light is the first half of the year is all about direct operational integration and scale supply chain demand Jen we've recently added a new country we just started selling in Canada to go along with what was exclusively in the past just the United States, so we expect to open more markets as we go to help scale faster and bigger.

And Jen we've recently added a new country. We just started selling in Canada to go along with what was exclusively in the past just the United States. So we expect to open more markets as we go to help scale faster and bigger.

Randall: And then we think on the application transaction piece.

And then we think on the application transaction piece.

Randall: We've been seeing growth. We're bigger than we were before COVID. We've added about five new media, senior media sales, and we're scaling that business. And they're chomping at the bit for us to be able to start pitching.

We've been seeing growth were bigger than we were before Covid. We've added about five new media senior media sales and we're scaling that business and they're chomping at the bit for us to be able to start pitching.

Randall: you know, everything that's going on within our data ecosystem to expose customer segments.

Everything that's going on within our data ecosystem to expose customers segments.

Randall: and demographic information for people to engage with.

And demographic information for people to engage with.

Randall: And so as a high level, that's what it looks like. And then what I want Randall to do is he can walk you through the flywheel of how adding audience leads to.

And so as a high level, that's what it looks like and then what I want to do as he can walk you through the <unk>.

Flywheel.

How adding audience leads to data.

Randall: leads to more segments, which leads to the brand interaction, and how we focus on using cash.

Leads to more segments, which leads to the brand interaction and how we focus on using cash for them to purchase and then the fun token is an operational thing within the ecosystem. So we don't have to retrain anybody you can think about like how do I buy crypto, we don't want them to do that but Randall can you highlight that flywheel and kind of walk.

Randall: for them to purchase. And then the fund token is an operational thing within the ecosystem, so we don't have to retrain anybody to think about like, how do I buy crypto? We don't want them to do that. But Randall, can you highlight that flywheel and kind of walk through the details of how that cross-selling works?

Through the details of how that.

Cross selling works.

Yeah honestly I think you hit it so I think we probably have I know, we're running light on time. So they probably have more you know abuse. The last 10 minutes for some more questions. Because you know that I mean, I think that's a very good answer.

Randall: Yeah, honestly, I think you hit it. So, I mean, I think we probably have, I know we're running light on time, so we probably have more, you know, use the last 10 minutes for some more questions because, you know, you nailed it. I mean, I think that was a very good answer.

Speaker Change: All right, guys, I appreciate the color there. Second one for me, could you kind of update us on path to profitability and generally how you're thinking about the kind of push-pull between, you know, generating positive EBITDA versus reinvesting in growth in the business?

Alright, guys.

The color there second one from me.

Could you kind of update us on path to profitability and generally how you're thinking about that kind of push pull between generating positive EBITDA versus reinvesting in growth in the business.

Yeah, I'll start and then I'll give it to Matt.

Speaker Change: Yeah, I'll start and then I'll give it to Matt. We're focused on scaling revenue right now and we wanna drive ourselves where, you know, as we're going along that we're driving the cash neutrality. Obviously COVID was kind of an 18 to 24 month.

We're focused on scaling revenue right now and we want to drive ourselves where.

As we're going along that were driving the cash neutrality.

Obviously COVID-19 was kind of an 18 to 24 months.

Speaker Change: You know, delay of that process. Obviously, we added light to buy. But right now, honestly, we focus on how do we be like Amazon when it was growing? How do we be like Salesforce when it was growing? And our goal is to take any and all profitability, you know, within cryptocurrency within our PC hardware business.

Delay of that process, obviously, we added light to buy.

But right now honestly, we focus on how do we be like Amazon when it was growing how do we be like Salesforce. When it was growing and our goal is to take any and all profitability.

Within crypto currency within our PC hardware business.

Speaker Change: within the media side of our business and plow all that back in to keep building out our platform, building out the software, direct and indirect, adding more sales, adding more marketing.

Within the media side of our business and plough all that back in to keep building out our platform building out the software of direct and indirect adding more sales, adding more marketing.

Speaker Change: Because based on our size, we understand that people want to see revenue growth.

Because based on our size, we understand that people want to see revenue growth.

Speaker Change: The idea of profitability, you know, it's important and interesting, but we're going to focus like Salesforce and Amazon. We don't see that as a this year event. And Max will give you a little more context about how he rightly manages that and keeps Randall and I under control about being very measured.

Idea of profitability, it's important and interesting, but we're gonna focused like Salesforce and Amazon.

Don't see that as a this year event and Matt can give you a little more context about how he rightly manages that and keeps Randall and I under control about being very measured.

Okay.

Yes.

Max: Yeah, and I'll answer quickly, because Alan, you said a lot of it there as well. I think, you know, in terms of profitability, you know, we're

I'll answer quickly because you said a lot of it there as well I think you know in terms of profitability.

Sure.

We're going that direction, but we're not there yet I certainly think that second half of the year Theres, an opportunity to get closer to kind of a breakeven cash neutrality position.

Max: We're going that direction, but we're not there yet. I certainly think that the second half of the year, there's an opportunity to get closer to kind of a breakeven cash neutrality position. You know, in terms of kind of.

In terms of kind of <unk>.

Max: Gross margins, that's really what we're focusing on now, is kind of optimizing gross margins between all the business lines, and certainly light as the...

Gross margin, that's really what we're focusing on now it is kind of optimizing gross margins between all the business lines and certainly light as the.

Max: as a new business for us. There's a little bit of a learning curve in getting them integrated and really focused on the margins there. So my focus is really on building the gross margin. And then whatever's dropping to the bottom line is really going back into the business right now. And then we'll evaluate throughout the year, kind of see where we are and see what makes sense. If we've got things to invest in, then we'll put it back in the company. If not, then we'll get closer to that cash neutral position. Great.

As the new business for us.

There's a little bit of a learning curve and getting them integrated and really focused on the margins. There. So my focus is really on building. The gross margin and then you know what.

Dropping to the bottom line is really going back into the business right now and then we'll evaluate throughout the year kind of see where we are and see what makes sense, because we've got things to invest in and we'll put it back in the company. If not then it will get closer to that a cash neutral position.

Great.

The time guys.

Thank you Scott.

Speaker Change: Thank you.

Speaker Change: Your next question is coming from Howard Halpern with Taglic Brothers. Your line is live.

Your next question is coming from Howard Halpern with <unk> brothers.

Your line is live.

Hi, guys.

So.

Howard Halpern: quick question I guess on how you plan on I guess

Quick question I guess on how you plan on I guess.

Howard Halpern: marketing with the marketing dollars you expect to.

Marketing with our marketing dollars do you expect to see.

Howard Halpern: deploy for the for light and and even for the I guess what Randall talked about crypto is a service to basically brand yourself in the air.

To deploy for the light ends and even for the I guess, what Randall talked about crypto as a service Ted Ted basically brand yourself in the area.

Yeah I'll start yeah. So the good thing about a lot of what we're doing I mean, I think it's no surprise that we've got a lot of attention on funnel, where you know the whole.

Speaker Change: Yeah, I'll start. So the good thing about a lot of what we're doing, I think it's no surprise that we've got a lot of attention on Funware as a whole. And all of that through our IR efforts.

And all of that you know through our IR efforts.

Speaker Change: you know, actually happens to be the exact same customers that we would target with a lot of kind of, you know, for example, you know, the crypto ecosystem. So

Actually happens to be the exact same customers that we would target with a lot of kind of for example, the crypto ecosystem. So you know Robyn traders you know people who are following you know stocks like us.

Speaker Change: You know, Robinhood traders, you know, people who are following, you know, stocks like us, you know, I reserve the right to not call ourselves, you know, a meme stock, you know, but a lot of people did.

I reserve the right to not a call ourselves you know I mean stocking out but a lot of people did.

Speaker Change: come with that excitement, but stayed for the company and have begun learning about the company. Besides a lot of the stuff we're doing in IR, to kind of get the word out more around fun, a lot of people will tell you we're very active in different channels, different social channels, which I think is new for a lot of public companies.

Come with that excitement.

But stayed for the company and kind of bring them have begun learning about the company and so you know we've been able to you know.

A lot of the stuff, we're doing and I are to kind of get the word out more around fun. You know a lot of people will tell you were very active in different channels different social channels, which I think is new for a lot of public companies you know they they haven't done that they don't have the wherewithal around that how do you. Just you have to just be doing it every single day that constant.

Speaker Change: done that, they don't have the wherewithal around that, how do you just...

Speaker Change: You have to just be doing it every single day, that constant flow of new content, new messaging, new community building. And I think we're doing that exceedingly well, which I think helps us trade better. But a lot of those people are also the exact kind of people that we would target.

So a new content, new messaging, new community building and I think we're doing that exceedingly well, which I think helps US you know trade better but a lot of those people are also the exact kind of people that we would target.

Speaker Change: for Fun Token today, and then Fun Coin in the future, and then also tied to both of those, the Fun Wallet downloads. So we're able to kind of double, triple dip a lot of these and get people excited. And then where we see a lot of kind of common goals around approach is in our app transactions business. So just like we want to sell data-enriched media to a lot of big brands and have them kind of –

For fun token today and fun coin in the future and then also you know tied to both of those are fun wallet download. So we're able to kind of you know double or triple dip a lot of these and get people excited and then where are we.

We see a lot of kind of common goals around approach isn't our app transactions business. So just like we want to sell data and rich media to a lot of big brands and have them, you know kind of be able to better target one to one engagement with consumers. Those exact same people are thinking about our engagement you know through a war.

Speaker Change: be able to better target one-to-one engagements with consumers.

Speaker Change: Those exact same people are thinking about engagement through awards program as well. So it's a lot of the same kind of.

The program as well so there's a lot of the same kind of methodology to market to them just marketing different opportunities and so that's not that much different than what we started out with a lot of US you know as you. All may recall, you know a lot of this ecosystem got caught out with our current board member you know tap.

Speaker Change: methodology to market to them, just marketing different opportunities. And so that's not that much different than what we started at with a lot of this. You know, as you all may recall, you know, a lot of this ecosystem got thought out with our current board member, you know, Kathy Mayer, who is the former CDO and CMO of Carnival.

Mayor, who is the former CEO and CMO of Carnival and as you might you know as I think I've used it a couple of different examples our software as a whole could put infomercial like capability into their apps in order to showcase certain things they might want their customers to do taking that one step further.

Speaker Change: And as I think I've used in a couple of different examples, our software as a whole could put infomercial like capability into their app in order to showcase certain things they might want their customers to do.

Speaker Change: taking that one step further, they might want to incentivize the ability to watch that infomercial so they could actually leverage Fund Token for that. So a lot of what we're doing kind of nests within itself or the natural extension of what we have. It's not like a pivot or we have to think of some new marketing scheme in order to reach those same customers. It's a lot of the same approach and the same, you know, workflow. It depends on what the brand's trying to achieve.

They might want to incentivize the ability to watch that infomercial. So they could actually leveraged fund token for that so a lot of what we're doing kind of nests within itself or is it a natural extension of what we have it's not like a pivot or we have to think of some new marketing scheme in order to reach those same customers. It's a lot of the same approach in the same workflow.

It just depends on what the brand is trying to achieve.

Speaker Change: Okay and for the light for the light segment are you gonna put some more dollars in tomorrow?

Okay.

Right.

Our life segment are you going to.

Some are more dollars into marketing.

Or is it more going to be like the social networking that you talked about no. No. We we are certainly I mean, that's why we had such a you know we had a record Q4, you know they would have never been able to accomplish that if it wasn't for the phone where acquisition and so yeah. We we understand kind of you know how to market you know where to spend dollars, but also.

Speaker Change: No, no, we are certainly. I mean, that's why we had such a, you know, we had a record, you know, Q4, you know, they would have never been able to accomplish that if it wasn't for, you know, the Funware acquisition. And so, you know, we, we understand kind of

Speaker Change: how to market, where to spend dollars, but also where to get a little bit more growth in our dollars. So it's not kind of a one-to-one. We're not running Super Bowl ads that are going to be crazy expensive, not if we can reach out to amazing Twitch influencers or amazing YouTube influencers who have a million subscribers all talking about the gaming ecosystem.

There to get you know a little bit more growth in our dollar. So it's not kind of a one to one but we're not running Super Bowl ads you know that are going to be you know crazy expensive not if we can reach out to you know amazing switch Influencers are amazing Youtube Influencers, who have you know a million subscribers all talking about you know.

The gaming ecosystem and Oh by the way those people are usually also either mining you know big pharma theory them or really rabid kind of community builders around crypto currency. So it actually becomes the same target audience and so you reach those same target audience is the same way.

Speaker Change: And oh, by the way, those people are usually also either mining, you know, Bitcoin, Ethereum or really rabid kind of community builders around cryptocurrency. So it actually becomes the same target audience. And so you reach those same target audiences the same way.

Speaker Change: So the days of old school running commercials and flyers and all of that, those days are gone for a lot of industries. And so I think we've got a pretty good handle on how to reach people where they are today. So we are going to keep focusing on that both for Lite, for FundToken, and for overall stockholder awareness and shareholder awareness when it comes to funds. Okay, well thanks.

So the days of old school running commercials in you know Flyers and all of that those days are gone for a lot of industries and so I think we've got a pretty good handle on how to reach people where they are today.

So we're going to keep focusing on that both for light for fun token and for overall, no stockholder awareness and shareholder awareness when it comes to fun.

Okay, Okay, well, thanks keep up the great work guys.

Thanks Al.

Your next question is coming from Ed Woo with <unk> capital.

Speaker Change: Your next question is coming from Ed Wu with Ascendant Capital.

Your line is now record.

Ed Wu: Yeah, congratulations on the quarter. My question is on your M&A strategy now that you guys are almost done integrating light.

Yeah. Congratulations on the quarter. My question is on your M&A strategy now that you guys are almost done integrating light.

Yeah, I would be happy to answer that so we always say jokingly that we have to kiss a lot of fraud, so to speak that fine to get set up right.

Speaker Change: Yeah, I would be happy to answer that. So we always say jokingly that we have to kiss a lot of frogs, so to speak, to find a good fit. Right now we've been actively looking internationally and in some ways I kind of equate it to trying to like buy a home right now.

Right now we've been actively looking internationally.

In some ways I kind of equate it trying to like buy a home right now.

Speaker Change: There are a lot of people that are out there with money and assets looking to, you know, add other assets.

There are a lot of people that are out there with money and assets looking to add other assets.

Speaker Change: People trying to buy homes are struggling to find inventory. If they do, they're trying to find something that works for their family and on and on. So in the M&A part, we're actually very aggressive and very active in having lots of conversations on a regular basis.

Trying to buy homes are struggling to find inventory if they do they're trying to find something that works for their family and on and on.

On the M&A part were actually there.

Very aggressive and very active in having lots of conversations on a regular basis, we review opportunities.

Speaker Change: We review opportunities. Typically we find, you know, some companies that are trading in other public markets elsewhere in the world, they may not have a lot of volume or liquidity, they may not have a lot of trading, but often it's a little bit messier to get a consensus around approvals on the kind of deals we might like to do. So we've seen management teams that wanna do a deal with boards or shareholders that don't. That's been the case in both public settings and private settings.

Typically we find some companies that are trading in other public markets elsewhere in the world. It may not have a lot of volume or liquidity. They may not have a lot of trading.

But often it's a little bit and that's here to get a consensus around approvals on the kind of deals we might like to do so.

So we've seen management teams that want to do a deal with forwards our shareholders that Don that's been the case in both public settings, and private setting and then in the private you see so many people chasing deals whether other angel investors family offices venture capitalists.

Speaker Change: And then in the private, you see so many people chasing deals, whether they're angel investors, family offices, venture capitalists.

Speaker Change: Private equity firms between private and public companies that they're looking to deploy a little bit of equity, but mostly get and then, you know, aggregate, you're just seeing a lot of competition for deals. And so you have to be disciplined. And I applaud Matt and his team's effort with Randall, there's kind of a strategic and operational interest of what we want to do to add in these four, you know, areas of business.

Private equity firms between private and public companies that they're looking to deploy.

A little bit of equity, but mostly get and then aggregate it.

Seeing a lot of competition for deals and so you have to be disciplined and I applaud, Matt and his team's effort with Randall.

There's kind of a strategic and operational interest that what we want to do to add in these four areas of business and that includes domestically and abroad. But then you have to be financially disciplined because some of the multiples people want a relatively insane. We only are looking at accretive add ons and then we're typically looking at things in it.

Speaker Change: and that includes domestically and abroad, but then you have to be financially disciplined because

Speaker Change: Some of the multiples people want are relatively insane. We only are looking at accretive add-ons.

Speaker Change: And then we're typically looking at things of at least $10 million in size or more, just because the accounting, the audit, the legal.

$10 million in size or more just because the accounting the audit illegal.

Speaker Change: the deal documents, the due diligence, all those costs get relatively fixed on big deals, small deals.

The deal documents that due diligence all those costs get relatively fixed on big deals small deals and so I think what it's going to keep doing that we want to enter international markets through a small accretive acquisition that we can then pull out our model through.

Speaker Change: And so I think we're just going to keep doing that. We want to enter international markets through a small accretive acquisition that we can then blow out our model through. And then in other cases like light, we don't really have to necessarily buy companies to make that happen. We just have to launch new markets. So I would say you're less likely to see M&A in the light technology hardware business.

And then in other cases like light, we don't really have to necessarily buy a company to make that happen. We just have to launch new markets. So I would say you are less likely to see M&A in the light technology hardware business, you're less likely to see.

Speaker Change: you're less likely to see acquisitions, you know, in the cryptocurrency things that we're launching, you know, in the short term. Where most of the things are is can we bulk up our application transaction business, inclusive of app users and data, to service our new crypto ecosystem? And then can we find additional ways to get, you know, more capability in our software platform and our solutions and products that we offer?

Visions, you know in that crypto currency things that we're launching in the short term where most of the things art can we bulk up our application transaction business inclusive of App users, who can cater to service our new crypto ecosystem and then can we find additional ways to get more capability in our software platform.

And our solutions and products that we offer.

Yeah.

Great well, thanks for answering my questions and I wish you guys. Good luck. Thank you.

Speaker Change: Great. Well, thanks for answering my questions and I wish you guys good luck. Thank you.

Thanks, Ed.

We have no further questions from the lines at this time I would now like to turn the floor back to island makowski for closing remarks.

Speaker Change: We have no further questions from the lines at this time. I would now like to turn the floor back to Alan Nikowski for closing remarks.

Sure in closing I'd, just like to say, we really value and appreciate all the investors that have been helpful and supportive of fund where.

Alan Nikowski: Sure, in closing, I'd just like to say we really value and appreciate all the investors that have been helpful and supportive of Funware. While we do get a chance to go out to financial conferences like Matt and I just did at the Roth Capital Conference and got a chance to meet face-to-face with some institutional investors.

While we do get a chance to go out the financial conferences like that and I just yet at the Roth Capital Conference and I got a chance to meet face to face with some institutional investors.

Alan Nikowski: We really value our retail investors around the world. You know, in our crypto world, we see huge interest and activity in South Korea, over in Germany, over in Greece, and here in the United States, amongst other countries.

We really value our retail investors around the world and our crypto World, we see huge interest and activity in South Korea over in Germany over in Greece, and here in the United States amongst other countries.

Alan Nikowski: Uh, and we have very active folks, you know, we have telegram channels with people talking all the time Randall and I and matt and team are trying to be very available. Uh, not just the institution but to retail investors

And we have very active folks when they have telegram channels with people talking all the time, Randall and I and Matt and team are trying to be very available not just institution bunch of retail investors.

Alan Nikowski: We value and appreciate all of you more than you could possibly imagine.

We value and appreciate all of you more than you can possibly imagine and we really are excited by the opportunities that we have we gotten a chance to start getting out to institutional investors again, who are now starting to get together in person and meet and we expect that to accelerate throughout the balance of the year.

Alan Nikowski: And we really are excited by the opportunities that we have. We've gotten a chance to start getting out to institutional investors again, who are now starting to get together in person and meet. And we expect that to accelerate throughout the balance of the year. But we'll be scheduling some more things to talk to retail as we always do. And retail has been there the whole time. You know, pandemic, no pandemic. We're having lots of interactions and communications.

But we will be scheduling some more things to talk to retail as we always do and retail has been there the whole time.

Pandemic no pandemic, we're having lots of interactions in communications.

Alan Nikowski: And we look at that as a strategic advantage for our shareholders, our cap table, and the future of what we're going to be able to accomplish through our direct consumer.

And we look at that as a strategic advantage for our shareholders our cap table and the future of what we're gonna be able to accomplish through our direct to consumer channel.

Alan Nikowski: So in conclusion, I'd just like to say there's obviously a lot of crazy things going on in the world domestically and abroad.

So in conclusion I, just like to say, there's obviously a lot of crazy things going on in the world.

Domestically and abroad.

Alan Nikowski: We're very excited by the opportunity that we have coming out of the pandemic.

We're very excited by the opportunity that we have coming out of the pandemic.

Alan Nikowski: We hope that calmer heads prevail globally and we can get back to living life, conducting business.

Hope that calmer heads prevail globally, and we can get back to living life conducting business.

Alan Nikowski: and just really flourishing as a species around the world. Some of the craziness at times.

It just really flourishing as a species around the world.

Some of the craziness at times it.

Alan Nikowski: It does good things to remind us how sacred life is and how sacred our relationships are and how important it is to do the things we do at home and to really have some exciting things to change society for the better in our work.

It does good things to remind us how sacred life is and how sacred our relationships are and how important it is to do the things we do at home and to really have some exciting things change society for the better in our work.

Alan Nikowski: And we couldn't do it without all of you and we very much appreciate you being part of our Sunwear family.

And we couldn't do it without all of you and we very much appreciate you being part of our some of our family.

Alan Nikowski: So with that, thank you very much. We're getting ready to close Q1. We'll look forward in mid-May to talking again. And in the interim, we plan to kick some <expletive> , and we're looking forward to doing that in conjunction with all of you. So thank you very much.

That thank you very much we're getting ready to close Q1, we'll look forward in mid may to talking again.

In the near term, we plan to kick some math and we're looking forward to doing that.

In conjunction with all of you. So thank you very much.

Thank you ladies and gentlemen. This concludes today's event you may disconnect at this time and have a wonderful day. Thank you for your participation.

Speaker Change: Thank you ladies and gentlemen. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.