Q1 2022 Verb Technology Company Inc Earnings Call

Good afternoon and welcome to the first quarter 2022 financial results conference call for Verb Technology Company Inc. Should you need assistance, please sign in the conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two.

Okay.

Good afternoon, and welcome to the first quarter 'twenty 'twenty financial results Conference call for Bup Technology Company, Inc.

Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation, David will be an opportunity to ask questions to ask a question you May Press Star then one on a touchtone phone to withdraw your question. Please press Star then two.

Please be advised the call is being recorded at the company's request.

Please be advised the call is being recorded at the company's record.

On our call today are Rory J. Khatia, CEO and Salman Khan, CFO .

On our call today are Rory Cutaia, CEO and sell them on Khan CFO .

Before we begin, I'd like to remind everyone that statements made during this conference call will include forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that can cause actual results to differ materially. Forward-looking statements speak only as of the date they are made, except as required by law, as the underlying facts and circumstances may change.

Before we begin I'd like to remind everyone that statements made during this conference call will include forward looking statements under the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that can cause actual results to differ materially forward.

Statements speak only as of the date they are made except as required by law.

The underlying facts and circumstances may change.

VIRG technology company disclaims any obligations to update these forward-looking statements, as well as those contained in the company's current and subsequent filings with the SEC.

We're a technology company disclaims any obligations to update these forward looking statements as well as those contained in the company's current and subsequent filings with the U C. S E C.

I would now like to turn the call over to Rory J. Kattiah, CEO . Rory?

I would now like to turn the call over to Rory J code Dyer CEO Rory.

Thank you moderator and thanks to everyone for joining us today for our Q1 2022 financial results and business update conference call. So let's jump into it.

Thank you, moderator, and thanks to everyone for joining us today for our Q1 2022 Financial Results and Business Update Conference.

So let's jump into it. We were just named the number one software provider to the direct sales industry for the second year in a row, which is an industry that we entered just three years ago that we now dominate.

We were just named the number one software provider to the direct sales industry for the second year in a row, which is an industry that we entered just three years ago that we now dominate.

And with regard to that side of our business, I'm pleased to report that we've had another consecutive quarter of growth in our SaaS business. And I'd like to cover some of the highlights of the quarter, but first...

And with regard to that side of our business I'm pleased to report that we've had another consecutive quarter of growth in our SaaS business and I'd like to cover some of the highlights of the quarter, but first.

First, I want to talk about Market, our new live stream shopping class.

First I want to talk about market, our new livestream shopping platform.

First and foremost, I'm excited to announce the dates for the festivals. They are July 26, 27, and 28.

First and foremost I'm excited to announce the date for the festival.

July 26, 27 and 28.

As I've discussed today, the recent public facing live stream shopping events on market have resulted in an acceleration of inbound interest from brands who want to be part of the festivals, including potential sponsors, as well as headliners. We've been resh

As I've discussed today, the recent public facing livestream shopping events on market have resulted in an acceleration of inbound interest from brands, who want to be part of the festivals, including potential sponsors as well as headliners. So we've been reshuffling the lineup.

The dates times lineup sponsors hosts and other information will be released as part of the advertising and marketing campaign, that's been developed for the festivals.

The dates, times, line up, sponsors, hosts, and other information will be released as part of the advertising and marketing campaign that's been developed for the festivals. There are also plans for follow-on festivals around specific, important shopping dates this year. I will disclose more information on those in subsequent communications.

There are also plans for follow on festivals around specific important shopping days. This year I will disclose more information on those in subsequent communications.

I'd next like to share some data points about the ongoing sales and onboarding process for market and the interest we're seeing from vendors.

I'd next like to share some data points about the ongoing sales and onboarding process for market and the interest we're seeing from vendors.

For the onboarding team, they take over from sales once a vendor agrees to join market and set up a store.

The onboarding team they take over from sales once a vendor agrees to join market and set up a store.

All vendors get a store and as you'll see as we get through a little bit of this today, you'll understand why that's important.

All vendors get a store and as you'll see as we as we get through a little bit of this today, you'll understand why that's important.

So between January and March, and I think we talked about this in the last call, we added approximately a hundred vendors to the onboarding process.

So between January and March and I think we talked about this in the last call. We added approximately 100 vendors to the onboarding process, but for the 39th day.

But for the 39 day, for that period between April 1 and May 10th, we added approximately 90 vendors to the onboarding process.

For that period between April one and May 10th we added approximately 90 vendors to the onboarding process and beginning with the Alex trigger event and accelerating through and after the Wanda beauty event.

and beginning with the Alex Tregro event, and accelerating through and after the wonder beauty of...

inbound demand from really high quality vendors has increased rather dramatically. Since the Wander Beauty event, we're now onboarding 8 to 10 vendors a day.

Inbound demand from really high quality vendors has increased rather dramatically since the Wanda beauty event. We're now onboarding eight to 10 vendors a day and due to the volume of inbound interest we are prioritizing vendor acceptance and onboarding based on certain criteria and chief among them.

And due to the volume of inbound interest, we are prioritizing vendor acceptance and onboarding based on certain criteria. And chief among them is annual sales volume in excess of $5 million a year, together with a measurable online following.

His annual sales volume in excess of $5 million a year together with a measurable online following through social media. So here is some important stats on the top 100 vendors are market based on revenue and social media followers as of May 10.

through social media. So here's some important stats on the top 100 vendors of market based on revenue and social media followers as of May 10th.

combined annual e-commerce sales in the United States for the past 12 months.

Combined annual e-commerce sales in the United States for the past 12 months is approximately $4 billion of the top 100, we have two companies with sales of over $1 billion. We have five companies with sales of $100 million of more three companies with sales of 50 million.

is approximately $4 billion. Of the top 100, we have two companies with sales of over billion dollars. We have five companies with sales of 100 million and more, three companies with sales of 50 million or more. 11 companies with sales of 10 million or more, 12 companies with sales of 5 million or more, 22 companies with sales of 1 million or more, and the balance have sales under a million dollars a year.

More 11 companies with sales of $10 million of war 12 companies with sales of $5 million more 22 companies with sales of $1 million or more and the balance have sales under $1 billion a year.

total social media followers for the top 100 companies is over 80 million. In fact, the number is actually 80,690,91982.

Total social media followers for the top 100 companies is over $80 million in fact, the numbers actually 80.691 million 982 is.

There's a fair amount of diversity among the categories of products offered by the vendors to assure a really robust shopping experience for shoppers on market. The sales cycle.

Theres, a fair amount of diversity among the categories of products offered by the vendors to assure a really robust shopping experience for shoppers on market <unk>.

Sales cycle.

The sales cycle is.

quite frankly, really unlike anything I've ever seen. We have salespeople who are reporting close rates of 100% during the demo, which is often the first call with the...

Quite frankly really unlike anything I've ever seen we have salespeople, who are reporting close rates of 100% during the demo which is often the first call with the vendor and I realize that that just sounds insane and I am not suggesting.

And I realized that that just sounds insane. And I'm not suggesting that close ratio is going to be sustainable as it continues to scale. Though I'd not be surprised if it remains well above traditional sales close ratios. It appears that we've really tapped into something here, like kind of a long pent up demand from vendors across every product category looking for a new distribution.

That close ratio is going to be sustainable as it continues to scale.

Not be surprised if it remains well above traditional sales close ratios. It appears that we've really tapped into something here.

Well it kind of a long pent up demand from vendors across every product category looking for new distribution outlet. There's also a massive movement by manufacturers to adopt a direct to consumer distribution strategy, which market obviously addresses directly more recently, we've seen even traditional.

There's also a massive movement by manufacturers to adopt a direct to consumer distribution strategy, which market obviously addresses directly. More recently, we've seen even traditional retail brands looking to incorporate a more effective direct to consumer distribution strategy to lower distribution costs and increase margins. And if there is a contraction in the economy and a drop in consumer spending, video videos on YouTube, Facebook and other videos, please share with your friends if you're?rest appreciated.

<unk> retail brands looking to incorporate a more effective direct to consumer distribution strategy to lower distribution costs and increase margins and if there is a contraction in the economy and a drop in consumer spending which are the way. It's looking right now we could very well be facing that we built.

The way it's looking right now, we could very well be facing that. We believe this will drive business for market as vendors will seek ways to lower their prices and yet retain their margins.

This will drive business for market as vendors will seek ways to lower their prices and yet retain their margins.

As the vendors that are fully on board, it choose to host public facing events which we actively encourage.

As the vendors that are fully on boarded choose to host public facing events, which we actively encourage.

We anticipate the on board rate to continue to ramp up through the festivals and then accelerate even further.

We anticipate the onboard rate to continue to ramp up through the festivals and then accelerate even further.

Accordingly, we are focusing on the sales and onboarding process to identify and eliminate any bottlenecks and point to friction.

Accordingly, we are focusing on the sales and onboarding process to identify and eliminate any bottlenecks and points of friction.

As I mentioned a few moments ago, we are experiencing an extraordinarily high close rate when our sales teams demo the platform for prospects. We're working to better automate that demo process for prospects. In fact, just over the past six weeks, we've revved our user guides, our FAQs, our onboarding processes, and created best practices guides for our teams, as well as for our vendors. And these efforts have already produced measurable efficiency.

As I mentioned, a few moments ago, we are experiencing an extraordinarily high close rate when our sales teams demo the platt for prospects.

We are working to better automate that demo process for prospects in fact, just over the past six weeks, we've revamped our user guides are if they choose our onboarding processes and created best practices guides for our teams as well as for our vendors and these efforts have already produced measurable efficiencies.

Our goal is to be able to accommodate hundreds of new vendors per day. And over time, thousands per day with little intervention from any of our sales and onboarding team members. By the way, this is one of the reasons to do this off-launch the way we have. So we can learn what we didn't know. Well, we don't know. Things that are not discovered during the beta trial period that you want to address before a full hard public launch.

Our goal is to be able to accommodate hundreds of new vendors per day and over time thousands per day with little intervention from any of our sales and Onboarding team members by the way. This is one of the reasons to do the soft launched the way we have so we can learn what we didn't know what we don't know.

They're not discovered during the beta trial period that you want to address before a full hard public launch we've learned from our mistakes and what some may incorrectly perceive as a delay is actually our teams taking a very careful and thoughtful approach to the launch of market. We're in this for the long haul guys in.

We've learned from our mistakes and what some may incorrectly perceive as a delay is actually our teams taking a very careful and thoughtful approach to the launch of market. We're in this for the long-ho guys and we believe that this is an enormous opportunity to create real, real sustainable value for all of our share.

We believe that this is an enormous opportunity to create real real sustainable value for all of our shareholders. All right, let's talk about the standalone stores and what that means.

All right, let's talk about the stand-alone stores and what that means.

The process of onboarding involves setting up the vendor storefront and this includes, among other

The process of Onboarding involves setting up the vendor storefront and this includes among other things providing their banking and tax idea information confirming inventory and fulfillment capabilities uploading their logos de branding elements and content and of course loading their inventory skus in some cases vendors.

providing their banking and tax ID information, confirming inventory and fulfillment capabilities uploading their logos, their branding elements, and content, and of course, loading their inventory skews. In some cases, vendors start finishing a single day.

And finished in a single day.

In other cases, it takes much longer. Once this stores a set up, we offer training, support, how best to use and leverage the platform. Some vendors begin hosting private events while they get comfortable with the platform's features and functionality, but we actively encourage vendors that have completed onboarding and set up to begin hosting public faces. We offer training, support, how best to use and leverage the platform's features and functionality, but we offer training, support, how best to use and leverage the platform's features and functionality,

In other cases, it takes much longer once their stores are set up we offer training support and how best to use and leverage the platform. Some vendors begin hosting private events, while they get comfortable with the platform features and functionality, but we actively encourage vendors that have completed onboarding and set up to begin.

Hosting public facing events, we developed the Standalone store capability to allow those public facing events to take place without exposing the identities of certain brands that asked that we not disclose their presence on market until they either completed their setup, where they announced their presence publicly themselves or.

We developed the standalone store capability to allow those public-facing events to take place without exposing the identities of certain brands that ask that we not disclose their presence on market until they either completed their setup or they announced their presence publicly themselves or jointly with us.

Or jointly with us.

Okay, so let's now discuss the recent public-facing events. Over the past month, we've had three public-

Okay. So let's now discuss the recent public facing events over the past month, we've had three public facing events. The first one was hosted by Alex trigger a popular in influencer from but Buzzfeed tasty show.

The first one was hosted by Alex Trigger, a popular influencer from BuzzFeed's Tasty Show. The next one was a brand called Don't Call Me Mommy, a very popular fast growing brand. And the last one was Wander Beauty, a very successful cosmetics brand and one of the biggest sellers on HSN.

The next one was a brand called don't call me Mommy are very popular and fast growing brand and the last one was wander beauty a very successful cosmetics brand in one of the biggest sellers on HSN. These were all test events for these brands and intentionally not well promoted and as such we waived.

These were all test events for these brands and intentionally not well promoted. As such, we waived our normal fees. The Alex Trigger and Don't Call Me Mommy events were produced by a company whose business is to develop and execute live stream shopping monetization strategies for influencers with large social media followings and service the creator Convey.

Our normal fees, the Alex Trager and don't call me Mommy events were produced by a company, whose business is to develop and execute livestream shopping monetization strategies for Influencers with large social media followings in service of the creator economy.

This is a very savvy, experienced, connected management team that looked at virtually all competing live stream platforms and chose market to host their clients live stream shopping.

This is a very savvy experienced connected management team that looked at virtually all competing livestream platforms and chose market to host their clients' livestream shopping events.

The Wander Beauty event was produced by John Rizzo, our new SVP of content and brand partnership.

The Wanda beauty event was produced by John Rizzo, our new SVP of content and brand partnerships.

John was a producer at QVC for more than 20 years and led QVC's online initiative and grew it to more than 300 million a year in sales. Kate Ekman, our new SVP of programming talent acquisition of former QVC HSN on-air host.

John was a producer or to be see for more than 20 years and led qvc's online initiatives and grew it to more than $300 million a year in sales Kate Ackman, our new SVP of programming talent acquisition of former QVC HSN on her host she hosted the event alongside some of the Wanda beauty principles.

If you hosted the event alongside some of the Wander Beauty, principal.

As a testament to vendors experience on the platform after that test events, I'm happy to report that all three have talked openly about how much they enjoy the experience and want a beauty has already confirmed a series of events on market. And the next one is already scheduled, I think it's currently scheduled for this month May 27th at 2pm East.

As a testament to vendors experience on the platform after that test events I'm happy to report that all three have talked openly about how much they enjoy the experience and wanted to beauty as already confirmed a series of events on market in the next one is already scheduled I think it's currently scheduled for this month May 27 at two P. M.

Eastern and I hope that you get to see the real quality of this platform and what a game changer. This is I'd like to share some of the data points that came out of those three events.

And I hope that you get to see the real quality of this platform and what a game changer this is. I'd like to share some of the data points that came out of those three events.

We had a total of 492 verified attendees. So that number does not include inciters like verb employees. It does not include people who attended on YouTube and Facebook and Instagram and other social media sites. As both the Alex Trigger and the Don't Call Me Mommy events were simulcast on social media as well as on more.

We had a total of 492 verified attendees. So that number does not include insiders like verb employees. It does not include people, who attended on Youtube and Facebook and Instagram and other social media sites as both the Alex trigger and they don't call me Mommy events were signed.

Cast on social media as well as on market and.

And I don't yet have the number of attendees on the social media feeds that clicked over to watch on market to make purchases directly on market, market, which is definitely important. But the producer told us that they were very pleasantly surprised at that conversion rate.

And I don't yet have the number of attendees on the social media feeds that clicked over to watch on market to make purchases directly on module market, which is definitely an important metric, but the producer told us that they were very pleasantly surprised at that conversion rate.

At the sales data, I'm going to aggregate the information in order to be as transparent as I possibly can here, but still respect the confidential sales information of our individual vendors. So total sales for all the events during the live streams, during the live...

As to sales day data I'm going to aggregate the information in order to be as transparent as I, possibly can here, but still respect the confidential sales information of our individual vendors. So total sales for all events during the live streams. During the live streams were low four figures under $5000.

We're low for figures under $5,000.

However sales continued after the livestream events as people did in fact return to shop the stores and watch the recordings of prior events, which are all still shoppable, validating one of my premises for incorporating shoppable stores that retain a permanent presence on market, as opposed to some of the companies that do the one-off in a livestream event.

However, sales continued after the livestream events as people did in fact return to shop, the stores and watch the recordings of prior events, which are all still szabo validating one of my premises for incorporating shopper will stores that retain a permanent presence on market as opposed to some of the.

Companies that do the one off in a livestream events.

That post event sales number while preliminary seems to be approximately 20% of the sales done during the events, but those sales are still continuing and that amount.

That post-event sales number, while preliminary, seems to be approximately 20% of the sales done during the events. But those sales are still continuing. And that amount...

As time goes on and we have a much larger pool of events and post sales data, we'll be better able to determine how much the vendor storefronts contribute to the revenue stream and the rate of drop-off over time after the livestream event, which will help vendor determine when to schedule follow-on livestreams to maintain or increase sales. So, we'll be able to determine how much the vendor storefronts contribute to the revenue stream and post sales data, we'll be able to determine when to schedule follow-on livestreams to maintain or increase sales.

Obviously, it will change as time goes on and we have a much larger pool of events and post sales data will be better able to determine how much the vendor storefronts contribute to the revenue stream and the rate of drop off over time after the lifetime event, which will help better determine when to schedule follow on live streams.

To maintain or increase sales sales.

Sales are continuing in the market stores days and even weeks after the live event.

Sales are continuing in the market stores days and even weeks after the live events.

12% of live event attendees made purchases, which is well above the two and a half percent average conversion rate for non-lifetime e-commerce. The average size purchase from all events was $47.88 per purchaser. And I think if my math is right, I believe that works out to about

12% of live event attendees made purchases, which is well above the two 5% average conversion rate for non livestream ecommerce.

The average size purchase from all events was $47 $88 per per purchaser.

And I think if my math is right I believe that works out to about.

$240 in GMV gross merchandise value for every 25 people that attend a market.

$240 in a N G M V. A gross merchandise value for every 25 people that attend a market event. However market data to livestream shows indicates that the number goes up when attendees remain on for more than 12 minutes in fact I believe.

However, market data for live streams shows indicates that the number goes up when attendees remain on for more than 12 minutes. In fact, I believe it's actually as much as 50 to 100% greater if they get past that first 12 minutes.

It's actually as much as 50% to 100% greater if they get past that first 12 minutes.

Data from our events shows that 95% of attendees remain on for more than 12 minutes and 85% of attendees remained on for the entire show. Now, these are unusually high engagement rates, guys. And we don't yet know if this is sustainable in scale, but even 25% of these engagement rates would be really very impressive.

Data from our events shows that 95% of attendees remain on for more than 12 minutes and 85% of attendees. We remained on for the entire show now. These are unusually high engagement rates guys and we we don't yet know if this is sustainable at scale, but even 25.

Percent of these engagement rates would be really very impressive and while this data is only from three relatively unprovoked events. There is a lot of data. We provided today about the vendors that are already committed to market that would allow savvy investors to begin building their own revenue forecast.

And while this data is only from three relatively unpromoted events, there is a lot of data we've provided today about the vendors that are already committed to market that would allow savvy investors to begin building their own revenue forecast model to determine what market could potentially generate from the vendors already confirmed.

Model to determine what market could potentially generate from the vendors already confirmed and then plot our growth rate for additional vendors layering in over the next 12 months and beyond and I'm hopeful that this will help investors formulate their own opinion of value for market on a standalone basis.

and then plot a growth rate for additional vendors layering in over the next 12 months and beyond. And I'm hopeful that this will help investors formulate their own opinion of value for market on a standalone basis and compare that to our current market capital company, our combined company when making an informed investment decision. So the points that we've discussed, I think the words repeating are collectively the vendors

Compare that to our current market cap of the whole company all combined company win when making an informed investment decision. So the points that we that we've discussed I think they are worth repeating are collectively the vendors committed through may 10th generate approximately $4 billion a year.

committed through May 10th generate approximately $4 billion a year in U.S. e-commerce.

In U S e-commerce sales collectively they have more than 80 million social media followers to whom they can promote their events on market 12.

Collectively they have more than 80 million social media followers to whom they can promote their events on market 12% of attendees made purchases that averaged 48 dollars per attendee

12% of attendees made purchases that averaged $48 per attendee.

attendees that remain on for more than 12 minutes will likely purchase more as much as 50 to 100% more. There's an additional 20% in sales taking place in the stores after the events and at least one case, it's even more than that.

Attendees that remain on for more than 12 minutes will likely purchase more as much as 50% to 100% more and there is an additional 20% in sales taking place in the stores after the events and at least one case, it's even more than that.

And finally, our revenue is derived from several sources. The first component is a fixed percentage, which averages 10 to 20%. And in some cases, it's even more of gross sales by each and every vendor on the platform. So that's from both live events and from the store.

And finally, our revenue is derived from several sources. Several sources. The first component is a fixed percentage, which averages 10% to 20% in some cases, it's even more of gross sales by each and every vendor on the platform. So that's from both the live events and for.

The stores.

In addition to that, as the platform continues to attract a critical mass of buyers and sellers, we will impose onboarding fees, which we currently wave, as well as monthly recurring fees from vendors to maintain this store on market, which we are also waving for vendors coming on during the soft launch period.

In addition to that as the platform continues to attract a critical mass of buyers and sellers, we will impose onboarding fees, which we currently wave as well as monthly recurring fees from vendors to maintain this the one market, which we are also waiving for vendors coming on during the soft launch period.

There are additional revenue streams flowing from sponsorship fees hosting service fees production services piece among many other revenue categories, though I don't have visibility on how to quantify any of those yet so I leave them out of the model until we do.

There are additional revenue streams flowing from sponsorship fees, hosting service fees, production services fees, among many other revenue categories, though I don't have visibility on how to quantify any of those yet. So I leave them out of the model until we do.

Now I'd like to turn to our SaaS business and Q1 results after which our CFO , Salmon, Con will provide more details. So starting with our SaaS recurring subscription revenues of Q1 2022, we report just over 2 million, up 37% over the same period last year. We've now had five consecutive quarters of SaaS revenue recurring revenue growth. In fact, but for Q4 2020,

Now I'd like to turn to our SaaS business and Q1 results after which our CFO Salman Khan will provide more details so starting with our SaaS recurring subscription revenue for Q1 2022.

We report just over $2 million up 37% over the same period last year. We've now had five consecutive quarters of SaaS revenue recurring revenue growth in fact, but for Q4 2020, we would now reported eight consecutive quarters of SaaS revenue growth and the only real.

We would now have reported eight consecutive quarters of SAS revenue growth. And the only reason Q4 of 2020 wasn't part of the consecutive quarters of growth was not that it was a bad quarter. It was that Q3 of 2020 just happened to be a blockbuster quarter. You may recall that it was a record break.

Q4 of 2020 wasn't part of the consecutive quarters of growth was not that it was a bad quarter. It was that Q3 of 2020, just happened to be a blockbuster quarter. You may recall that it was a record breaker for us.

Okay, next. First quarter 2022 gross profit margin was 1.7 million, up 31% over the prior year comparable quarter, 1.3 million total digital revenue of which SaaS recurring revenue as a component was 2.2, up 19% over the same period in 2021.

Okay next first quarter 2022, gross profit margin was $1 7 million up 31% over the prior year comparable quarter 1.3 million total digital revenue of which SaaS recurring revenue as a component was 2.2 up 19% over the same period in <unk>.

2021.

And notably.

We ended the first quarter of 2022 with SaaS recurring revenue once again representing a larger and larger percentage of our total digital revenue. Now 93% up from 81% in Q1 2021. And as a percentage of total revenue, our SaaS revenue is now 74% up from 58% in Q1 2021.

We ended the first quarter of 2022 with SaaS recurring revenue once again, representing a larger and larger percentage of our total digital revenue now 93% up from 81% in Q1, 2021, and as a percentage of total revenue. Our SaaS revenue is now 70.

4% up from 58% in Q1 2021.

Total cost of revenue was $1 million and improvement of 20% compared to the prior year comparable quarter.

Total cost of revenue was $1 million, an improvement of 20% compared to the prior year comparable quarter.

But I am particularly pleased to report that the revenue growth

But I am, particularly pleased to report that the revenue growth.

We've reported today was achieved while fulfilling our commitment to reduce operating expenses.

We've reported today was achieved while fulfilling our commitment to reduce operating expenses as I indicated previously we would begin to see the results of our plans to reduce operating costs. In Q4 of 2021 in Q1 of 2022, you might recall that R&D expense, which is the <unk>.

As I indicated previously, we would begin to see the results of our plans to reduce operating costs in Q4 2021 and Q1 of 2022. You might recall that R&D expense, which is the biggest component of our operating expense, was down 22% in Q4 over Q3.

Biggest component of our operating expense was down 22% in Q4 over Q3, 2021, and we're reporting a substantially greater and additional reduction in R&D expense of 42% in Q1 over Q4 of 2021 and <unk>.

2021 and we're reporting a substantially greater and additional reduction in R&D expense of 42% in Q1 over Q4 of 2020

And that also represents a reduction in R&D expense of 45% over the prior year comparable quarter.

That also represents a reduction in R&D expense of 45% over the prior year comparable quarter.

We expect to report further plan reductions in operating expenses while revenues increase throughout the year and it's to internet as we move closer to cash flow positive. And Salman will address additional expense reductions in his comment.

We expect to report further planned reductions in operating expenses, while revenues increase throughout the year. It is into next as we move closer to cash flow positive and some on will address additional expense reductions in his comments.

In our last quarterly report, I talked about a new version of Verb Live, version 2.0, designed specifically for the direct sales industry that was under development.

In our last quarterly report I talked about a new version of verb live version 2.0 designed specifically for the direct sales industry that was under development. It includes many of the features that are already been built into the market platforms, such as dual presenter mode and recording capabilities, but bill.

It includes many of the features that were already been built into the market platform such as

dual presenter mode and recording capabilities, but built to be used as a tool for individual sales reps. And it's tightly integrated into our VRV CRM application with attribution features.

To be used as a tool for individual sales reps and it's tightly integrated into our verbs CRM application with attribution features and I'm pleased to report that development is ahead of schedule and we will have no problem meeting our delivery dates for the clients waiting for next month in June and July .

And I'm pleased to report that development is ahead of schedule and we'll have no problem meeting our delivery dates for the clients waiting for it next month in June and July . And in addition, a new ad.

And in addition, a new admin system for our Super popular pulse application, allowing us to dramatically accelerate client Onboarding will also be released ahead of schedule for delivery to clients waiting for that as well.

for our super popular pulse application, allowing us to dramatically accelerate client onboarding, will also be released ahead of schedule for delivery to clients waiting for that as well.

As I discussed in our last earnings call in 2-4 2021, we launched a new business unit for FERP, our professional sports unit, built on our FERP teams sales enablement platform.

As I discussed in our last earnings call in Q4, 2021, we launched a new business unit <unk>.

Our professional sports unit built on our verb teams sales enablement platform.

We started with the announcement of the Pittsburgh Penguins in Q4 2021 and since then, we've added many new professional sports teams to the Black Home and built an impressive sales pipeline of professional sports teams both in the US as well as in other countries.

We started with the announcement of the Pittsburgh Penguins in Q4 2021, and since then we've added many new professional sports teams to the platform and built an impressive sales pipeline a professional sports teams both in the U S as well as in other countries. So in addition to the Pittsburgh Penguins, we announced the Florida.

So in addition to the Pittsburgh Penguins, we announced the Florida Panthers, the Phoenix Suns and the Detroit Pistons, and many more announcements are expected. Some of the initial deals we've done and expect to do are done on a type of barter basis, rather than just doing a free trial, whereby we provide the teams a license to our platform in exchange for corresponding value in marketing for VR.

Panthers, the Phoenix SUNS ended Detroit Pistons, and many more announcements are expected some of the initial deals we've done and expect to do are done on a type of BARDA basis, rather than just doing a free trial, whereby we provide the teams a license to our platform in exchange for corresponding.

Value and marketing for where our strategy is that once they use the platform. They will see the benefits and be willing to pay for a subscription upon the expiration of the initial term and we have reason to believe that this strategy will prove to be an effective one as at least one team is already reported extremely impressive result.

Our strategy is that once they use the platform, they'll see the benefits and be willing to pay for a subscription upon the expiration of the initial term. And we have reason to believe that this strategy will prove to be an effective one, as at least one team has already reported extremely impressive results from their use of the platform, such as 72% click-through rates using our interactive video technology.

From their use of the platform such as 72% click through rates using our interactive video technology. In addition, when now in talks with one of the league's whose exploring the possibility of rolling our sales enablement platform out to all of the teams and their league and as I mentioned.

In addition, when Nowan talks with one of the leads who is exploring the possibility of rolling our sales enablement platform out to all of the teams and their leads.

And as I mentioned in the last call, it is my expectation that there will be market and Virg TV implications for the sports teams using our plan.

In the last call. It is my expectation that there will be market and verb T. The implications for the sports teams using our platform.

Let's talk about the acquisitions. As to one of them, I've discussed previously, the audit is virtually complete, however.

Let's talk about the acquisitions as to as to one of them I discussed previously the audit is virtually complete however.

Given the recent rather shocking and more rapid deterioration of the financial markets over the past few weeks, including the precipitous.

given the recent rather shocking and more rapid deterioration of the financial markets over the past few weeks, including the precipitous and inexplicable decline in the current price of our share.

Inexplicable decline in the current price of our shares which we intended to use as currency in connection with the consideration. We are negotiating an extension of the closing date with the sellers it.

which we intended to use as quarantine connection with the consideration. We are negotiating an extension of closing date with the sellers.

It is our hope that that market conditions will improve allowing us to complete the acquisition really soon and as we work.

It is our hope that that market conditions will improve allowing us to complete the acquisition.

Really soon and as we worked.

very closely together with these guys over the past year and developed a real mutual respect that extends beyond our business relationship and I really believe that the company should be together, the team should remain together. But given the market conditions today, we believe this is really the prudent course of action. Until we're able to complete the acquisition.

Very closely together with these guys over the past year and developed.

Real mutual respect that.

<unk> beyond our business relationship.

I really believe that we have.

The company should be together the team should should remain together, but look given the market conditions. Today. We believe this is really the prudent course of action.

Until we are able to complete the acquisition.

We'll be operating under the long-term licenses that we have in place for those components we rely on for the market platform. And we will outsource some of the ongoing platform improvement improvements and updates to their developers under previously negotiated and fully executed.

We will be operating under the long term licenses that we have in place for those components, we rely on for market for the market platform and and we will outsource some of the ongoing platform improvement improvements and updates to their developers under previously negotiated and fully executed statements of work.

So there's no interruption of any kind. All right, I'll turn it over to our CFO , Samon Khan for more detail around our reported financial performance, as well as the recent finances we secured to issue the uninterrupted execution of our plans for market among other things.

So theres no interruption of any kind are alright, I'll turn it over to Doug.

Two our CFO some on con for more detail around our reported financial performance.

As well as the recent financings, we secured to assure the uninterrupted execution of our plans the market among among other things.

So I'm on.

Thank you Rory and good afternoon, everyone I'd.

I'd like to review our financial performance as reported in our phone 10-Q file today. May 16th for the first quarter ended March 31, 2020.

I'd like to review our financial performance as reported in our Form 10-Q filed today May 16 for the first quarter ended March 31 2022.

I may reiterate and or provide more color around some of the data point

I may reiterate and I'll provide more color around some of the data points, where we shared with you.

The following compares the company's results of operations for the first quarter of 2022 with the first quarter of 2021.

The following compares the company's results of operations for the first quarter of 2022 with the first quarter of 2021.

SAS Recovery Revenue, a component of total digital revenue, was $2 million for the first quarter of 2022, up 37% for the Comparable Prior Year Quarter.

SaaS recurring revenue a component of total digital revenue was $2 million for the first quarter of 2022 up 37% over the comparable prior year quarter.

As recurring revenue as a percentage of total digital revenue was 93% compared with 81% for the comparable prior year quarter.

SaaS recurring revenue as a percentage of total digital revenue was 93% compared with 81% for the comparable prior year quarter.

SaaS recurring revenue as a percentage of total revenue was 74% compared with 58% for the comparable prior year quarter.

SAS Recurring Revenue as a percentage of total revenue was 74% compared with 58% for the comparable prior year.

As Rory mentioned, it has now been five consecutive quarters of sad? recurring revenue.

As already mentioned it has now been five consecutive quarters of SaaS recurring revenue growth.

As we discussed in our last earnings call, until we completely phase out of our legacy non-digital business.

As we discussed in our last earnings call until we complete the phase out of our legacy non digital business.

Our total revenue will not be a reliable indicator of our performance, since it includes the revenue generated from both our digital business, which, cumulatively, is growing at a record pay.

Our total revenue will not be a reliable indicator of our performance. Since it includes the revenue generated from both our digital business, which cumulatively is growing at a record pace.

and our non-digital business, which is declining as we exit that.

And our non digital business, which is declining as we exit that business.

For example, the non digital business now represents only 20% of total revenue through the first quarter of 2022, compared with 29% through the comparable period in 2021.

For example, the non-digital business now represents only 20% of total revenue through the first quarter of 2022, compared with 29% through the comparable period in 2021.

I do note, however that due to our exponential growth in SaaS business. Our total revenue for the first quarter 2022 or the prior year first quarter is up six 5%.

I do note, however, that due to our exponential growth in SaaS business, our total revenue for the first quarter 2022, or the prior year, first quarter is up 6.5%, despite the planned decline in non-visioned-

Spite the planned decline in non digital business.

As discussed in our earnings call last month, the historically made a conscious decision to ramp up our research and development investment.

As discussed in our earnings call last month, we historically made a conscious decision to ramp up our research and development investment. Among us.

Among other related expenses and.

In order to accelerate the time to market for several major revenue generating features and products.

In order to accelerate the time to market for several major revenue generating features and products.

In Q4 2021, we began the move from R&D mode to maintenance.

In Q4, 2021, we began the move from R&D mode to maintenance mode.

for many of our products, allowing us to reduce operational costs to more normalized.

For many of our products, allowing us to reduce operational costs to more normalized levels.

The plan reductions will continue throughout this year and into next with some of the biggest reductions occurring in the latter half of

The planned reductions will continue throughout this year and into next.

Some of the biggest reductions occurring in the latter half of this year.

For the three months ended March 31, 2022, we invested $1 6 million in R&D compared with $2 9 million in the same quarter of 2021.

For the three months ended March 31, 2022, we invested 1.6 million in R&D compared with 2.9 million in the same quarter of 2020.

This 45% reduction is in line with our expectations and as part of our cost reduction strategy.

This 45% reduction isn't.

It's in line with our expectations.

And as part of our cost reduction strategy.

I also note as where he said.

This also represents a 42% reduction in R&D expense from Q4 2020.

This also represents a 42% reduction in R&D expense from Q4 2021.

At March 31, 2022, we capitalized software development costs of 6.2 million attributed to the development of market, which we expect to depreciate in cost maintenance.

At March 31, 2022, we capitalized software development costs of $6 2 million attributed to the development of market.

Which we expect to depreciate in cost of revenue.

General and administrative expenses were $7 million in the first quarter of 2022. A decrease of 0.3 million from the $7.3 million in the prior year comparable period, primarily due to a decrease in share-based compensation of $1.1 million and a decrease in marketing spend of $0.4 million, both offset by plan increases in labor costs of $0.9 million. Now let's discuss the developments that would start in the next period of production.

General and administrative expenses were $7 million in the first quarter of 2022, a decrease of <unk> 3 million from the $7 3 million in the prior year comparable period, primarily due to a decrease in share based compensation of $1 1 million and a decrease in marketing spend of <unk> 4 million.

Both offset by planned increases in labor costs up $49 million.

As discussed in our previous earnings call.

We have begun implementing a top grading strict ROI approach to our marketing spend. And based on the efficiencies, we're now seeing

We have begun implementing a top grading strict ROI approach to our marketing spend and based on the efficiencies we're now seeing.

We are all set for the annualized savings of 1 million marketing spend or time.

We are all set for the annualized savings of $1 million in marketing spend or time.

We anticipate that these additional savings will help offset any marketing increases we expect to incur. As we promote the public commercial release of our new market platform and word TV among other things.

We anticipate that these additional savings will help offset any marketing increases we expect to incur as we promote the public commercial release of our new market platform and web TV among other things.

As we began the year, we continued to focus on identifying cost efficient.

As we began the year, we continued to focus on identifying cost efficiencies for.

For example, we determined that many of our Utah team members could continue to work remotely very effectively.

For example, we determined that menu of our Utah team members continuing to work are mostly very effectively.

Accordingly, in Q1 2022, we terminated our office building and warehouse leases in Utah, and entered into a new office sub-lease agreement in Lehigh, Utah for smaller space.

Accordingly in Q1, 2022, we terminated our office building and warehouse leases in Utah and entered into a new office sublease agreement in Lehigh, Utah for smaller space.

Saving us over $270,000.

Saving us over $270000 a year.

In the first quarter of 2022, we improved our modified EBITDA by 1 million, our 16% when compared for the first quarter of 2020.

In the first quarter of 2022, we improved our modified EBITDA by $1 million or 16% when compared for the first quarter of 2021.

This unlocking and modified EBITDA represents approximately 50% of our current quarter size revenues of $2 million.

This unlocking in modified EBITDA represents approximately 50% of our current quarter SaaS revenues of Tunis.

and is a testament of our employees and management team's efforts to make our company more efficient with a drive towards profitable.

And as a testament of our employees and management teams efforts to make our company more efficient with a drive towards profitability.

As a reminder, modified EBITDA is a non- GAAP financial measure.

As a reminder, modified EBITDA is a non-GAAP financial measure.

And we have provided information reconciling to the comparable GAAP financial measure in the press release for today and in our Form 10-Q.

And we have provided information reconciling to the comparable GAAP financial measure in the press release for today. And in our form, thank you.

As of March 31, 2022, total assets worth 38.1 million. Total liabilities were 22.3 million. And total stockholders equity was 15.1 million.

As of March 31, 2022, total assets, where it's $38 1 million total liabilities were $22 3 million and total stockholders' equity was $15 8 million.

On April 25, 2021, we completed a registered direct offering price at the market at 75 cents for the small group of institutional investors, which resulted in gross proceeds of 11.

On April 25, 2021, we completed a registered direct offering priced at the market at.

At 75 cents for the small group of institutional investors.

Which resulted in gross proceeds of $11 million.

It was a straight common transaction with one for one words. As of me.

It was a straight common transaction with one for one warrants.

As of May 10, 2022.

There are slightly over 101 million shares of our common stock issued and out.

There are slightly over 101 million shares of our common stock issued and outstanding.

Off the total number of common shares issued and outstanding approximately six 8 million shares or approximately six 7% are owned or controlled by management and the board members I'd now.

Of the total number of common shares issued an outstanding, approximately 6.8 million shares are approximately 6.7% are owned or controlled by management and the board members. I'd now like to turn the call back over to the operator for QA.

I'd like to turn the call back over to the operator for Q&A.

Thank you we will now begin the question and answer session.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speaker phone, please pick up your hands at before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At the same, we will pause momentarily to assemble our roster.

Ask a question you May press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the keys.

Dan Your question has been that just when you would like to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.

Our first question comes from Martin Saltzman with AFM investments Inc. Please go ahead.

Our first question comes from Martin Salzman with AFM Investments in Please Go Head.

you have guys uh... just so you're aware of there was no press release for the actual results i don't know if you're aware of it or if there was a delay in getting published i'm sure there's other people on the call looking for that but i do see your management's prepared remarks so i think congratulations on some improved numbers for sure uh... rory i just have a question pertaining

Yeah, Hi, guys.

Just so you're aware I there was no press release for the actual results. So I don't know if you're aware of it or if there was a delay in getting published I'm sure. There's other people on the call looking for that but I do see your management's prepared remarks, so anyway. Congratulations on some improved numbers for sure.

Sorry, I just have a question pertaining to market that's really the elephant in the room for me and my shareholders that I represent.

market that's really the elephant in the room for me and my shareholders that i represent and i thought i heard you say

And I thought I heard you say that.

Market will net verb 10 to 20% of sales.

Mark It will net.

Verb, 10% to 20% of sales.

Okay.

What I said is that that is true.

The average Martin some of it.

depends upon the product, depends upon the margin for that product and other circumstances that we...

It depends upon the product it depends on the margin for that product.

And other circumstances that we.

We agree to what the particular vendor can go as high as 35%. But I think for the purposes.

We agreed to with a particular vendor that can go as high as 35%, but I think for the purposes of.

Those investors that are looking to build their own model from the information that we provided today, which honestly was the reason I tried to provide as much information as I can.

Those investors that are looking to build the loan model from the information that we provided today, which which honestly was the reason I tried to provide as much information as I can so that people can create their own model for a value of market you could probably look at 15% as being.

so that people can create their own model for the value of market. You should probably look at 15% as being the average. Again, it could be higher, but I think that 15% is a good conservative number about what we generate from gross sales by all vendors generated to the platform. And just as a reminder, it's not just what they sell during the livestream events. It's also what they sell.

The average.

Then it could be higher but I think 2% is a good conservative number about what we would generate from gross sales by all vendors generated through the platform and just as a reminder, it's not just what they sell during the livestream event. Its also what they sell.

to the stores which are there. You know, you know,

Through the stores, which are there.

One 1%.

could there be a case where there's a break point for instance let's say you know accompany does five million in revenues on their event one of the big retailers that are coming in the hard launch in uh... late July there perhaps are they going to be charge less of a percentage versus somebody that might do half a million in revenues not

Could there be a case, where there was a breakpoint for instance, lets say you know a company does 5 million in revenues on their event and one of the big retailers that are coming in the hard launch in late July there.

Perhaps are they gonna be charged less of a percentage versus somebody that might do half a million in revenues.

No.

No.

We wouldn't be it wouldn't really is for us to do that.

Okay. You know, just just to finish, you know, give you complete answer on them.

Okay.

Just to finish you know give you a complete answer on that.

<unk>.

Virtually all the companies that are coming on to the platform.

Virtually all of the companies that are coming onto the platform.

have experienced, you know, alternative means of this distribution, whether it's through some of the television shows or other means, and they are used to paying.

<unk> experienced alternative means of distribution, whether it's through some of the TV shows.

Means and they are used to paying a percentage of sales to be on those various platforms. So if we use 15% as the average which which I believe it is.

a percentage of sales to be on those areas plackled.

So if we use 15% of the average, which I believe it is,

That's actually more competitive than in other places. So it's not like...

That's actually more competitive than in other places so it's not like.

We're getting any pushback from people on the on the placent as that we're charging. People are pretty happy when we tell them that that's worth.

We're getting any pushback from people on.

On the percentage that we're charging people pretty happy when we tell them that that's where it's going to land.

are some of these people who are engaging market are they people who are also manufacturers who are just trying to let's say eliminate the middleman and therefore when you tell him hey it's gonna roughly be fifteen percent they don't block it that because they're probably paying a middleman a lot more than

Are some of these people who are engaging market are they people who are also manufacturers who are just trying to let's say eliminate the middleman and therefore, what do you tell them hey, it's going to roughly be 15%. They don't book it that because they are probably paying a middleman a lot more than that.

You're exactly right, we're seeing a lot of that now and we think that's going to continue as you may have heard in my prepared remarks earlier.

You're exactly right, Mark. We're seeing a lot of that now.

And we think that's going to continue as you may have heard in my prepare the mocks earlier.

I think there's a lot of companies that are going to be looking for more efficient means of distributing their products and more efficient distribution channels.

You know I think there's a lot of companies that are going to be looking for more efficient means.

Distributing their products and more efficient distribution channels.

And yes, cutting out the middleman is one way to describe that.

And yes cutting out the middleman is one way to describe that so yeah, if they could reach consumers directly to their products and they're only paying 15 or 20%. That's a massive savings for for many many many of these companies and that's that's a big difference.

So yeah, if they could consume as directly to their products and they're only paying 15 to 20%, that's a massive savings for many, many, many of these companies and that's a-

I just want to ask you then about when you said 100 vendors, but April to May you had 90 and then you're getting 8 to 10 a day. If you could, just a guesstimate in your dream of dreams, how many vendors might you have by the July 27th, 28th, 29th launches or 26th, 17th? How many might you have total?

So I just wanted to ask you then about when you said it 100 vendors, but April through May you had 90.

And then you're getting eight to 10 a day.

If you could just the guesstimate.

In your dream of Dreams, how many vendors might you have by the July 27, 28, 29th launches, our 26th or seventh eighth how many might you have total.

Yeah.

You know, it's hard to say, Maureen, because we want to make sure that everyone gets this door set up. And look, I'm trying to get as many on there as rapidly as possible. We've had to add a lot of people to the onboarding teams to help facilitate getting people on more rapidly.

It's hard to say.

Martin because we want to make sure that everyone gets their stores set up and look I I'm trying to get as many on there as rapidly as possible we've.

We've had to add a lot of people to be onboarding teams to help facilitate getting people on more rapidly.

We've created a lot of systems and processes that will help the individual vendors get their information together much more quickly so that they can get on. And then the other thing that I want to stress a bit is that it has been...

We've created a lot of systems and processes that will help the individual vendors get their information together much more quickly.

So that they can get on and then the other thing that.

One is a stress event is that <unk> been really really lucky at the response from the market. After after people saw those last three events because before that people would just coming on because they believe in the concept and seen some.

really, really lucky at the response from the market after people saw those last three events. Because before that, people were just coming on because they believed in the concept and seeing some of the demos of it. But when they actually saw

Demos of it but.

When they actually saw.

events, you know, that that will the public facing eventually actually see how it works and the quality of it because it's hard to describe quality. When you show a demo of course, it's you know, it's a closed to close system. So it of course it's going to be beautiful. But seeing it, you know, live that way with, you know, that really made such a difference. And for us, what that meant is

Events, you know that that will the public facing eventually you will actually see how it works and the quality of it because it's hard to describe quality.

When you show a demo of course it is.

It closed to close system. So it's of course, it's going to beautiful, but seen it live that way.

That really made such a difference and for US what that meant is there a lot of companies really high quality companies doing some big big numbers and their online sales that have approached us and it's like a.

There are a lot of companies, really high quality companies doing some big, big numbers in their online sales.

that have approached us and it's like a

a wave, quite honestly, that would really do it my best to respond to. So.

A wave of quite honestly that would really doing our best to respond to so.

While there's a lot of very small, you know, mom and pop businesses that really want to get on, we're really trying to allocate, and I'm happy to have them on. And we wanna, but we wanna be able to accommodate everybody in level the playing fields where even the smallest businesses.

While there is a lot of very small.

And pop businesses that really want to get on we're really trying to allocate and I'm happy to have them on and we want to but we want to be able to accommodate everybody and level the playing field for even the smallest businesses, but as we look through to.

So the hard launch with the festivals, we really want to allocate our resources, which are limited obviously to those stores that are most of those companies those vendors as manufacturers that are doing big numbers that have big social media followings, because we're looking for them to help make sure that theres great attendance at these events.

make sure that there's greater tendons that these events. Now of course we're gonna promote them, but the greatest likelihood of people actually showing up at these events are people that already follow those companies. So that's really what our focus is, what is that number ultimately gonna be by the time we get the festivals? I'm really rather not guess, but it should be substantial more than where we are right now. But I will tell you by the time I get to as the end of the year, it's gonna be gigantic. Again, it's so, you know, cautious to put a definitive number on it.

Now of course, we're going to promote them, but the greatest likelihood of people actually showing up at these events are people that already followed those companies. So so that's really what our focus is what does that number ultimately going to be by the time, we get to festivals.

So that's really what our focus is. What is that number ultimately gonna be by the time we get the festivals? I'm really rather not guessed, but it should be substantially more than where we are right now. But I will tell you, by the time I get to as the end of the year.

Really rather not guess, but it should be substantially more than where we are right now, but I will tell you by the time, we get towards the end of the year, it's gonna be gigantic.

It's gonna be gigantic. Again, I'm so, you know, conscious to put a definitive number on it. Obviously we have our own internal models. And I don't want to be wildly off at the end of the year, even if I'm too high or too low. So that's why I gave the information that I could so that people could.

Again, I'm, so cautious to put a definitive number on it obviously, we have our own internal models and I don't Wanna be wildly off at the end of the year, even if I'm too high or too low so.

That's why I gave the information that I could so that people could.

Create their own models create their own make their own assumptions you know of the of the $4 billion make your own assumption of what percentage of that.

We will end up being done on market is at 1% is it 5% is at 10%.

Make your own assumptions of the 80 million followers out there what percentage of those do you think will actually show up to follow their those brands on market.

And I'm hopeful that that gives people the information they need again to make an important investment decision as far as the number of vendors where are where are you now on the on the number the number that you have.

As far as the number of vendors, where are you now on the number, the number that you have?

I might believe it's just under 200 but I'm guessing at this moment because it changes.

I believe it's just under 200, but I'm guessing at this moment as it changes.

Hourly.

So I think we're probably at or around that range.

That's an excess of what I thought. I actually thought you were still around one and a quarter, one-thirty, something like that. So over 200 is...

That's in excess of what I thought I actually thought you were still around one and a quarter 130, something like that so over 200 is key.

i have a just a follow-up on you know you mentioned uh... wander beauty i mean i don't buy beauty products myself i chimed in and uh... there was a slight delay from the initial time it was going to go up a point when i uh... so it was very impressive and paid at the super star she's just tremendous but i was asked a question by a couple of my clients and they they wanted to know why

Quite good I have a just a follow up on you know you mentioned a wander beauty I mean, I don't buy beauty products myself I chimed in and there was a slight delay.

From the initial time it was going to go off but boy when I saw it it was very impressive and Kate Atkins a superstar she's just tremendous but I wanted to ask a question by a couple of my clients and they they wanted to know why if you have so many vendors already committed why are you doing another wander beauty.

if you have so many vendors already committed why are you doing another wander beauty public event why not somebody else why not somebody new

A public event why not somebody else wanted somebody new.

Well, I mean, we are, as a matter of fact, we have an event this Thursday, which I guess, I think we're gonna be putting out a press release about it. We have an event this Thursday that's another company. What's it?

Well I mean, we are.

In fact, we Havent event, this Thursday, which I guess.

I think we're going to be putting out a press release about it you have an event this thursday with another company.

Okay.

Yeah.

Stay by the, yeah. So yeah, we have another one this week. We have several more events I believe this month, but the reason that I wanted to p-r the wander event and the reason that I believe it's meaningful is because when you have a company of that caliber, okay? What these guys up there, they're used. They've done massive business on QBC and HSN over the years. When you have a company like that that comes on and does a test event.

Stable yeah. So yes, we have another one this week we have several more events I believe this month, but the reason that I wanted to Peel the wander event and the reason that I believe its meaningful is because when you have a company of that caliber. Okay. What these guys up there they're huge they've done massive business.

On QVC and HSN over the years when you have a company like that that comes on and doesn't test event and then they come back and say, yes. Okay. Now we want to schedule a series of events.

And then they come back and say, yeah, okay, now we want to schedule a series of events. In fact, we want to do another one this month.

In fact, we want to do another one this month.

That sends a signal to other companies out there.

That sends a signal to other companies out there.

uh... that other companies on qvc hsn and other companies that are contemplating a live stream shopping solution it sends a signal to them that here this company did it and it obviously they love it so much that coming back again and i believe that that really will will drive uh...

That the company is on QVC and HSN and other companies that are contemplating a livestream shopping solution. It sends a signal to them that here. This company did it and it obviously they loved it so much they are coming back again, and I believe that that really will drive.

fact, it matters what it has, you know, a lot more companies coming forward to say, yeah, we want to be part of it. So that's why it was important. Yes, it's great to show a zillion different companies. Like for me, and I think for a lot of investors, the more important metric is how many came back? How many want to do it again? And that's why

In fact, the matters already has a lot more companies coming forward to say, yeah. We wanted to be part of it. So that's why it was important yes, its great to show a zillion different companies, but for me and I think for a lot of investors. The more important metric is how many came back how many want to do it again and that's why I put that out.

I appreciate that. Last question for me is you mentioned that you're sort of putting off, I guess, a closure of some of the acquisitions you were looking at. And I appreciate that, especially given your share price, kind of hard to use that at this moment. So if you could put it off, that's great. But I'm just curious what you're trying, not who you're trying to acquire, but what areas of your business you're trying to...

I appreciate that last question for me is you mentioned that you're sort of putting off I guess a closure of some of the acquisitions you were looking at and I appreciate that especially given your share price kind of hard to use that at these at this moment. So if there if you could put it off thats great but.

Mike I'm, just curious what youre trying.

Who you're trying to acquire but what areas of your business you're trying to.

assist or help or fill in the gaps. Can you say?

Our sister help or fill in the gaps.

Can you say anything about that.

I wouldn't say that we're trying to fill any gaps I think that.

I wouldn't say that we're trying to fill any gaps. I think that our needs for our business and certainly market have been met. But.

Our needs are.

For our business and certainly market have been met but.

That acquisition brings a couple of different things that are not necessarily filling gaps or needs. We have enjoyed an extraordinary

That acquisition brings a couple of different things that are not necessarily filling gaps.

Or needs.

<unk>.

We have enjoyed an extraordinarily.

wonderful relationship with those principles and they have a fantastic

Wonderful relationship with those principles and they have a fantastic.

team of developers that we really feel we could work well with effectively. And we'd like to be able to continue to do that. And certainly we can do that under a statement of work, which now we are.

Team of developers that.

We really feel we could work well with affair.

Effectively and we'd like to be able to continue to do that and certainly we can do that under.

Statement of work, which which now we are.

But in addition to that, they have an interesting

But in addition to that they have.

And interesting OTT business and for those who don't really know what that is that's.

And for those who don't really know what that is, that's on demand, video, business, on a large scale for large companies. So an example of an OTT business would be Netflix, as an example and Vimeo. Those are all OTT businesses. One they wanted for themselves and the other, they run it for other companies.

On demand video business on a large scale for large companies. So an example of an OTT business. It would be Netflix as an example in vimeo those are all OTT businesses, one they wanted for themselves and the other that you run it for other other companies and I believe.

And I believe that the client that would be looking for OTT services would also be fantastic for VRTV. So someone that's running shows on an OTT network, well, one of the offerings we could provide is that we could make their television program and shop a bowl and put them on VRTV. So there's a lot of advantages to it. Plus they have a good business and that revenue would be...

That the clients that would be looking for OTT services would also be fantastic for verb T V. So.

Someone that's running US running shows on an OTT network well you know one of the offerings. We can provide is that we could make their their television programming shopper bowl and put them onto our T. V. So theres a lot of advantages to it plus <unk> plus they have a good business and that that revenue would be.

you know, additive to our own. So there's a lot of reasons to do it. But, um...

Additive to our own so there's a lot of reasons to do it.

But and.

And I'm still very much intending to do it, but we had the stop drop.

And I'm still very much intending to do it but.

We had the stock dropped.

crazy over the past month and obviously we didn't anticipate that we actually expected to be closing the transaction this week, but with the price where it is, as much as I really want to do the deal and I intend to, I couldn't do it now at this price and create that kind of delusion for shareholders, I just can't do it.

Crazy over the past month, and obviously, we didnt anticipate that we actually expect it to be closing the transaction this week, but with the price where it is.

As much as I really want to do the deal and I intend to.

I couldn't do it now at this price and create that kind of dilution for shareholders I just I just can't do that.

And they understand. I appreciate that, Rory. Well, listen, I'm going to go back in the queue. Thank you very much and best of luck with the, uh, with market. It sounds great and exciting. Thank you.

I understand I appreciate that Rory well listen I'm going to go back in the queue. Thank you very much and best of luck with the with market It sounds great and exciting. Thank you.

Thank you very much for the questions.

Yeah.

The next question comes from Bryan Keane Slinger with Alliance Global Partners. Please go ahead.

The next question comes from Brian Kinselinger with Alliance Global Partners. Please go ahead.

Great things, thanks guys, thanks for all the information on the statistics for the events you've had so far.

Okay, great. Thanks, Thanks, guys. Thanks for all the information on.

And the statistics for you Vince you've had so far.

Selman I Wonder hopefully you can help us understand how it transaction is going to run through your P&L from market.

Salmon, I want to, hopefully you can help us understand how it turns the actions going to run through your P&L from market. Suppose you have a-

Suppose you had about $50 purchase.

In this case, a verb would generate $5 to $10 of revenue on the transaction fee if I understand correct. What's the gross margin on these types of reps?

In this case the verb would generate five to $10 of revenue on the transaction fee if I understand correct.

What's the gross margin on these types of revenues.

All right, thanks for your question. I appreciate you joining the call. This is a great question and some of the statistics that we...

Alright. Thanks for your question and I. Appreciate you joining the call. This is a great question and some of the statistics that we have disclosed and Lori talked about certainly address and checks the box in terms of the numbers that you just talked about.

the the box that in terms of the numbers that you just

So with roughly $50, we would anticipate around $10.

So with roughly $50 you would anticipate around $10.

revenue flowing in in terms of our cost. This is going to be run on similar platforms that we use for our digital business.

Revenue flowing in in terms of our cost look this is going to be run on <unk>.

Similar platform.

For our digital business, which you know our cost of revenue.

30 million compared to our traditional business.

And in the past.

So if you do the math, it's a fairly smaller portion of additional costs that we would expect.

So if you do the math, it's a it's a fairly smaller portion of additional costs that we would expect including R. R.

people who are supporting the existing business and also the market.

People, who are supporting the existing business and also the b market platform on top of that at the end of the day.

At the end of the day, as you know, this was a numbers game.

Yes.

This is a numbers game.

And the skills to determine what that unit cost.

and determine what that unit complaint

Sure.

Hopefully that helps but it sounds like you're it sounds like the incremental gross profit per.

But it sounds like it sounds like the incremental gross prop

per dollar of revenue looks almost like a software business for it's in your 90% range is it scales that right. Absolutely.

Per dollar of revenue it looks almost like a software business working or 90% range as it scales that right.

Absolutely you got it.

Okay and then.

When do you plan, Rory, on charging on boarding fees? Is it one price for all? And then in the hosting fee, is that like a monthly rent that if you're a store you're going to pay? Just take me to both of those pieces if you can share with us whatever you can.

When do you plan Rory on charging on boarding fees is at one price for all and then in the hosting fee is that like a monthly rent, but if you're a store you're going to pay you just take me through both of those pieces that you can share with us wherever you can.

Yeah. So the.

The store is, we're hopeful that that people are going to find that that to be a really great replacement for their existing website and hosting to use it there, that they're currently incurring.

The store is we're hopeful that that people are going to find that as that to be a really great replacement for their existing website and hosting fees is there that they are currently incurring.

You know, someone's website is right now is basically like a billboard in the woods. Whereas having a storefront on market, well, for times certainly as we have more people, it's like having a billboard on Las Vegas roller-broad and then on the strip.

Someone's website is right now is basically.

So like a a billboard in the woods.

Whereas having a storefront on market over time, certainly as we have more people you'll be it's like having a billboard on Las Vegas Boulevard in the middle of the strip and so we believe people will be willing to pay for that and I don't think that we really need to charge people a lot more than what they were already incurring to maintain there there were.

And so we believe people will be willing to pay for that.

And I don't think that we really need to charge people a lot more than what they're already incurring to maintain their websites and have it be extremely profitable business for us. So I think that-

Sites and have it be extremely profitable business for us So I think that.

We'll look to begin imposing those fees.

will look to begin imposing those fees. You know, it's sometime after the festivals and it'll really depend upon...

Sometime after the festivals and it'll really depend upon.

You know, the number of vendors on there and the kind of traffic that we're getting from shoppers, which we hope to build over a period of time. But look, our interest, of course, is generating as much revenue as we can as soon as we can.

The number of vendors on there and the kind of traffic that we're getting from from shoppers, which we hope to build over a period of time, but look our interest of course is generating as much revenue as we can as soon as we can and as soon as we believe it's appropriate to start doing that we will do that but yes. This.

And as soon as we believe it's appropriate to start doing that, we'll do that. But yes, this year, absolutely. And remind me what you first of all agreed. Sorry, so I'll re-ask it. So to the degree that you have fantastic volume that your vendor see, you'll have leverage to charge a little bit more on a monthly basis to host them. Is that right?

Sure absolutely and remind me what your first degree sorry, so yeah I'll re ask it so to the degree that you have fantastic volume at your vendors see you'll have leveraged you charge a little bit more on a monthly basis to host that make that right.

Oh, absolutely yes. Of course. If you agree, the numbers don't start off so strong. It'll be difficult to go to them and say, pay us a whole bunch more right now until you get going.

Oh, absolutely yes of course, there's a degree the numbers don't start off so strong it'll be difficult to go to them and say pay us a whole bunch more right now until you get those numbers up.

We would, yeah, but we wouldn't do that. I know we would.

We would yes, we would we wouldn't do that right now we would.

Yeah. There are no. And then we asked something. Go ahead, Hongle. Why would you say is there an onboarding fee, which I take it sounds like a fixed price? And then there's also a monthly kind of hosting, which is like rent. Is that how I think about it?

Yeah, Darrin and I think and then U S up.

They had onboard I was just wondering is there.

Is there an onboarding fee, which I take it sounds like a fixed price and then Theres also a monthly kind of hosting which is like right now how are you.

Goodbye.

Well, what you're referring to as like rent is really what we would charge to maintain the store on the site, which is what I just talked about. But in addition to that, there are the onboarding fees.

The.

What you are referring to is like rent is really what we would charge to maintain the store on the site, which is what I just talked about but in addition to that there are the onboarding fees.

and there are setup fees and depending upon the particular vendor and...

And there are setup fees and depending upon the particular.

Vendor and.

Degree of.

of assets that they have in the skews and all that will determine what the fees are. There's actually three packages that people can sign up for that, you know, is a monthly fee that will include a lot of this stuff. And we'll be announcing that soon. So, sure I answer is there is a recurring revenue component to this. And it will vary based upon what package people sign up for, or company sign up for, and the volume of business.

Of assets that they have in the Skus and all that will determine what the fees are there's actually three packages that people can sign up for that.

It was a monthly fee that will include a lot of this stuff and we will be announcing that soon so short answer is there is a recurring revenue component to this and it will vary based upon what package people sign up for a company sign up for and the.

So the volume of business that they do through the platform.

Now if I'm hearing right, I'm understanding the comments, you haven't charged anyone a dollar yet. So you haven't, not that you couldn't, but you haven't generated a dollar really a revenue for market yet. And if that's right.

Right now I'm hearing right I'm understanding the comments you haven't charged anyone a dollar yet so you haven't got that you've cut it but you haven't generated a dollar really a revenue for market yet and if that's right.

When Wander has its second event, or has more standalone events, will they start promoting and be when you start charging the regular fees? Will you do it before the event, the large festival or the festival the first time you're going to do it?

When wander hazard second event or has more standalone events, well, they a start promoting and b. When do you start charging the regular fees will you do it before the event the large festival or the festival. The first time you are going to do it.

To be determined, Ryan, it is certainly our desire to begin charging as soon as possible, as I said.

To be determined Ryan it is certainly our desire to begin charging as soon as possible as I said.

We want to encourage vendors to come on, especially those that are really not familiar with the platform it's due. There's not a lot of events that have already happened on it. Some of the largest clients that are associated with the platform that are on the platform have not let us yet use their name. If we could, we probably...

We want to encourage vendors to come on especially those that are really not familiar with.

The platform its do there's not a lot of events that have already happened on it.

Some of the largest.

Clients that are that are associated with the platform that are on our platform.

Let let us yet use their name if we could we'd probably.

more overwhelmed than we are now. So look, we want to be able to charge as soon as possible. We do expect to be charging that around the time of the festivals. It's.

More of a well and we are now.

So look we wanted to be able to charge as soon as possible we.

We do expect to be charging at or around the time of the festivals.

It's I.

I would say likely that will be charging for events that occur before the festivals. But I wouldn't want to talk about something on the phone here in this call that I haven't yet done.

I would say likely that we'll be charging for events that occur before the festivals.

But I wouldn't want to talk about something on the phone here on this call that I haven't yet gone up.

Some of the investments.

You mentioned one, they look like a couple million dollar firm. I've only done a quick search. Probably not right, but who knows. But you mentioned there, they've been on, you know, selling on QVC quite a bit. I take it others that you're working with have as well. Have you been able to compare the average ticket price on market versus your small sample size? Or what an average ticket price looks like on QVC?

You mentioned Wanda they looked like a couple of million dollar firm I've only done a quick search probably got right, but who knows.

But you mentioned there they've been on.

Telling on QVC quite a bit I take it others that you're working with habit as well have you been able to compare the average ticket price on market versus your small samples of your small sample size to what an average ticket price looks like on Q V C.

Yeah I'm sorry here for this is Karl on in the background going off here now where you know you can't control it.

I'm sorry here for this car alarm in the background going off here. No worries. You can't control it.

Got it.

Yeah, I think we're sort of in the same range a bit, although in some cases it's substantially greater than the $48 that we're seeing right now. So it's gonna vary, but mind you, that $48 average is

Yeah, I think where we.

We're sort of in the same range a bit.

Although in some cases it's.

It's substantially substantially greater than the $48 that we're seeing right now so it's going to vary but mind you that $48 average is.

just from three events and three really unpromoted events. And so I wanna make sure that that's clear for everyone. I actually expect it's gonna be substantially higher. And I'm told, you know, by some of the people that have joined us with UBC that we should expect to see substantially higher per unit fans on more.

Just from three events and three really on promoted events.

And so I want to make sure that that's clear for everyone right I actually expect it is going to be substantially higher and I'm told.

But some of the people that have joined us from Q V. C that we should expect to see substantially higher per unit sales by market.

Okay, two more questions sorry, I got a bunch of the first one is on advertising it seems like a very big opportunity. Although obviously your eyes on the prize of these fees are a higher margin, but it seems like in any store you walked through a smaller advertisers you're going to walk through or or Oh go through these different.

Two more questions, sorry, I got a bunch. The first one is on advertising. Seems like a very big opportunity, although obviously your eye isn't the prize of these fees, they're higher margins. But it seems like in any store you walk through a mall or there's advertisers, you can walk through or go through these different rooms as you're gonna have advertising opportunities.

Rome is youre going to have advertising opportunities.

Have you yet approached a programmatic technology that can work with that impressions? They take it giving your capital position. You're not gonna be looking to do direct sales for us at this time. So, just, will that be ready for the first event or process?

Have you yet approached a programmatic technology that can work with AD impressions I take it given your capital position, you're not going to be looking at your direct sales force at this time, so just well that will that be ready for the first event or probably not.

When you say the first event, if you're referring to the fast first festival sorry, yeah. So with regards to the festivals are yes, we are.

When you say the first event, if you're referring to the festival, sorry. Yeah, so with regards to the festivals, yes, we are, we've got some sponsors we are attending to add more, but beyond that as to the ongoing operation of the platform itself. Yeah, we've talked to a number of different companies that can provide advertising on there and create a new revenue source for us.

We've got some sponsors we are intending to add more but beyond that as to the ongoing operation of the platform itself. Yes, we've talked to a number of different companies that can provide advertising on their own and create a new revenue source for us.

What we need to do is demonstrate what the volume of eyeballs is on there. While we may not have that type of thing in place at the time of the festivals beyond the sponsorships... oh

We need to do is demonstrate what the what the volume of eyeballs is on there. So while we may not have that type of thing in place at.

At the time of the vessels festivals beyond the sponsorships.

We do believe that as we proceed through the course of the year and we're able to demonstrate...

We do believe that as we proceed through the course of the year and we were able to demonstrate.

the traffic on the site, it will become a very, very desirable place for people to want to advertise.

The traffic on the site it will become a very very desirable place for people to want to advertise.

and we've already built into the platform the capability of accommodating that. And in a non-intrusive, but yet, a very visible way for that will make it attractive for sponsors and advertisers to want to be there.

And we've already built into the platform the capability of accommodating that.

And in the non intrusive, but yet.

Visible way for that will make it attractive for sponsors and advertisers to want to be there. So yes that that is a revenue stream that I have not talked about in my.

So, yes, that is a revenue stream that I had not...

talked about in my prepare remarks as I was suggesting what people.

In my prepared remarks, as I was suggesting what people can use now to prepare their models, but that is another one that we would expect to layer in throughout the year.

Use now to prepare the models, but that is another one that we would expect to layer in throughout the year.

Great last question.

with the pending launch of the fresh.

With the pending launch of the festival.

And I know you would envision after that it's not going to stop there. How do I think about, although you talked about some...

And I know you would envision after that it's not going to stop there.

Do I think about although you talked about some cost cutting measures.

How do I think about that overhead where you've been adding S-GNA? Well, you need to do any more significant hiring, either ahead of that event or after that.

How do I think about that overhead where you've been adding SG&A will you need to do any more significant hiring either ahead of that event or after that event.

No, for investments. No, I think that we um

No more investments no I think that we.

We're really locked and loaded right now in terms of the team. I will say it's the best team I think we've ever had. And I say that not because they're really nice people, but they are, the results that King is producing now.

We're really locked and loaded right now in terms of the team.

I will say, it's the best team I think we've ever had and.

And I say that not because we had really nice people, but they are.

The results that this team is producing now.

Just.

super proud of them. And so no, we're really extremely well staffed right now for growth the market into the future.

Super proud of them and so no we were really extremely well staffed right now for growth and market into the future.

Okay. Thank you.

Thank you Bill.

The next question comes from Ed Wu with Ascendient.

Our next question comes from Andrew with Sandy and Cat.

Okay.

Yeah, congratulations on getting all these festivals up and Ronnie My questions is on the sports side of the business I think that's a great opportunity can you talk about the Onboarding process. How quickly you could get these teams up and running two actually.

Congratulations on getting all these festivals up and running. My question is on the sports side of the business. I think that's a great opportunity. Can you talk about the onboarding process? How quickly you can get these teams up and running to actually generate a meaningful revenue for them?

Generate meaningful revenue for them.

So.

So pretty quickly, actually, the longest component of it is the internal approvals, which can take months sometimes, and some of the teams, depending on what kind of sport we're talking about, have to go back to the league itself to get approval. So the sales cycle can be long.

He quickly actually the the longest component of it is is the internal approvals, which can take months, sometimes and some of the teams.

Depending on what kind of sport, we're talking about I have to go back to the league itself to get approval. So so that the sales cycle can be can be long.

But once it's approved, we can onboard them very, very quick.

But once it's once it's approved we can onboard them very very quickly.

Great and are you going to be targeting international sports teams. In addition to U S sports teams.

And are you going to be targeting international sports teams in addition to US sports?

Yes, we already have. We've got some pretty big names in the pipeline. We just had two of our top sales guys just returned from Europe a few days ago and...

Yes, we already have we've got some some pretty big names in the pipeline. We just had two of our.

Top sales guys just returned from Europe , a few days ago and.

I'll leave it there. You know, I'm looking to share a lot more information as it continues to evolve. But what we're doing is being very, very well received. Thanks for answering my question.

Oh I'll leave it there are you know there I'm looking to to share a lot more information as it continues to evolve, but what we're doing is being very very well received.

Okay.

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

Much appreciate it.

This concludes our question and answer his question I would like to turn the conference back over to Rory Cutaia for any closing remarks.

This concludes our question and answer session. I would like to tell the conference back over Dero Ritu, Kataya for any closing remarks.

Yeah.

I just like to thank everyone for being on the call and thanks for your continued interest in the company. You know, we are going through some crazy times right now with the market generally. And I know a lot of people that believe in us.

I just like to thank everyone for being on the call and thanks for your continued interest in the company.

We are going through.

Some crazy times right now with with the the market generally and I know a lot of people.

At believe in Us and.

trusted us and purchase shares in our business because of that belief and trust. We're never going to let you down. We're never going to stop and whatever obstacles we face, we're going to keep plowing through them. And what we've built with market and the results that I expect that we'll see from that as we get through this year and beyond, I think will be well worth the pain that every single

Trusted us and purchase shares in our business because of that that belief and trust.

We're never going to we never going to let you down we're never going to stop and whatever obstacles, we face we're gonna keep plowing through them and.

What we've built with market and the results that I expect that we'll see from that as we get through this year and beyond.

I think we will.

Be well worth the pain that every single one of us.

Thank you for your continued support.

Okay.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.