Q3 2022 Verb Technology Company Inc Earnings Call
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Good afternoon, and welcome to the third quarter 2022 financial results Conference call for verb Technology Company, Inc.
At this time all participants are in a listen only mode.
Please be advised the call is being recorded at the company's request.
On our call today are read Jay gets higher.
E L.
And Salman 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 involves 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.
The underlying facts and circumstances may change.
Our technology company disclaims any obligation to update these forward looking statements as well as those contained in the company's current and subsequent filings with the SEC.
I would now like to turn the call over to Rory Cutaia CEO Rory. Please go ahead.
Thank you moderator and thanks to everyone for joining us today for our Q3 2022 financial results and business update conference call.
So last last year at this time, we were really all looking forward with a certain sense of optimism that we might finally be emerging from the devastating effects of the pandemic on our lives.
And certainly on many businesses.
And then began 2022 and with at the beginning of a an economic.
And Amit meltdown that by many accounts has has yet to find a bottom I'm honestly not sure it's possible to overstate the challenges small public companies like us face this year and continue to face.
One need not being economist to recognize that as the year progressed the economy rapidly worsened inflation drove a series of fed rate increases with no near term ended site. The capital markets closed share prices dropped market caps were crushed and business plans operating Budd.
It's an execution strategies needed to be revamped and revised quickly.
It was during this environment that we launched several new SaaS products, and then parlay, new and very promising line of business you all know as market Dot live so today I'd like to discuss our financial results. During this period, but first.
First I'd like to address head on what I believe to be the most important questions are shareholders have had and continued to have about our business and particularly those that likely have had the greatest impact on our share price. So in no particular order as I believe they're all equally.
To our shareholders. The top three questions are number one NASDAQ share price compliance number two our ongoing capital needs and three our operating costs.
With respect to NASDAQ share compliance as most of you know.
We've continued to trade below the one dollar threshold for 180 days.
The 180 day period expired last week on November eight.
And for the period, leading up to that.
Great speculation that the company would either be delisted by NASDAQ, we would undertake a reverse split.
Order to regain compliance.
So with respect to that.
We recently received formal written confirmation from NASDAQ that we have met the criteria for an additional 180 day period to regain share price compliance.
Accordingly.
There's no immediate concern of delisting or a reverse split.
And while I felt very confident we would meet nasdaq's criteria for granting the additional 180 day period to regain compliance.
I needed to wait until the expiration of the first 180 day period.
Afford NASDAQ would consider our application for an extension.
So.
But those that question why I didn't make any public announcements about our plans our expectations prior to the exploration of that period.
It was that I was prohibited from doing so I needed to wait for Nasdaq's formal review consideration in response to do otherwise.
To put our application for an extension in jeopardy.
Alright, let's talk next about our capital requirements.
Over the past two years during the extended period of investment in research and development for the suite of new products, We recently released including market Dot live.
We averaged negative cash flow from operations of approximately $2 $3 million per month.
As we completed various elements of development testing on these products, we were able to begin reducing that investment.
And as we began this year, we were able to accelerate that reduction in spending but not eliminated entirely that meant we needed to raise additional capital to support our operations.
But as I said at the outset of this call.
The capital markets were closed and have remained closed investors have been waiting on the sidelines for the markets to stabilize.
And that stability has remained elusive as the markets have experienced excessive volatility and downward pressure.
A year ago as the investment community was excited about our technology and its market potential I could raise capital in a couple of phone calls.
Well that time has passed for companies like ours this time around.
I literally spent months working together with our board exploring and analyzing one bad proposal after another.
Making it that much more challenging than almost impossible was our declining share price, making even a small equity raise highly dilutive.
Through this process I recognize that I needed to craft a plan that would keep us out of the capital markets for an extended period of time.
Based on the amount I thought I could raise while minimizing to the extent possible the enormous dilution any large equity raise would produce.
I developed my plan.
The plan required two components additional capital.
And massive rapid cost reductions across every area of the business.
Due to the share price and dilution issues I touched on a moment ago I wanted to limit any equity raise to $4 million and while I knew there was simply no deal that was going to get done without warrants.
Given our share price I wanted to avoid doing any equity deal at a steep discount to market.
The only deals getting done we're pricing at a 25% to 30% discount to market and double warrants.
That we couldnt and and I just wouldn't do.
Ultimately, we were able to close on the $4 million of gross proceeds in a deal priced at the market and yes with warrants.
While dilutive because of our share price it was the best deal available anywhere.
We closed that last month.
But that was only the first part of my capital raise plants.
Last week, we closed on an additional $5 million in gross proceeds structured as straight unsecured debt nonconvertible non variable, 9% interest and 18 month term.
And no payments of any kind for six months.
I personally consider that a major CRO.
Simultaneously I was working through the implementation of my cost reduction plan, which was completed last week the plan.
Which went into effect immediately included massive cuts in spending across every area of the business, we eliminated vendors contractors.
Office space in Utah, marketing spend and extensive cuts in personnel, which was.
Very very difficult because I had to lay off some really really good and talented people.
And then in a further effort to reduce expenses and preserve cash.
I also cut the monthly cash component of salaries by 25% for every one that earns $150000 or more a year.
Adding myself and including each member of our board of directors.
These savings will have a material impact in the last part of this quarter and certainly into 2023.
It reduced our normalized operating expenses dramatically, bringing our operational cash burn down to approximately $1 million a month, giving us a fair amount of runway into next year by which time, we expect to see significant revenue contributions from our market Dot live platform before we need to consider any.
<unk> capital raises.
So I hope this addresses those three questions directly NASDAQ compliance capital needs and operating expenses and.
In addition.
During this time.
We had some strategic opportunities present themselves that that I am and our board thought were sufficiently interesting that we ran a months long process to select a strategic advisory firm to assist us in Nevada and evaluating them.
And after a fair amount of mutual due diligence following presentations to our board. We recently selected an engaged elantra.
A prominent international M&A and strategic advisory firm to work with us on these opportunities.
So as you might imagine it's been a very busy several months executing the launch of market.
As well as all of the other plans and initiatives I just discussed.
Yeah.
Well I strive.
To remain to remain open and transparent and I really do about our companys plans and initiatives.
Hope that many of you understand why we're going through these processes and certainly in the weeks leading up to an earnings call.
It becomes really difficult to communicate and respond to questions that come into our investor Relations inbox because.
A premature direct and honest answer to the vast majority of these questions would run afoul of the SEC selective disclosure rules.
I think that it's.
I think it's also important to mention that following the additional $9 million of gross proceeds from the recent financings coupled with the fairly massive across the board cost cutting we've now completed.
I'm highly confident in our ability to navigate the current economic environment. However.
I don't want to give anyone the impression that this is going to be a walk in the park.
There remain many challenges ahead, both known and unknown, but we're going into it with our eyes wide open and as prepared as we can possibly be.
Right now I'm going to turn to market Dot lives are industry, leading livestream shopping platform and what we believe will be the biggest growth area of our business in 2023.
Market was launched at the end of July and given the progress. We've made it's actually hard to believe that it's only been live for.
Just to just over 100 days now so let me begin by sharing some performance statistics.
During the first 90 days, we acquired 76000 shoppers on market with continuous growth month over month.
The number of shoppers does not include viewers, who watch our livestream shopping events when we multi cast through other social media channels, such as Facebook, Instagram Youtube and others, which brings the total viewership up exponentially.
The average returning registered sharp rate is 49%, which has grown sequentially month over month.
For the first week in November the returning registered shopper rate was already at 38, 5% with three weeks yet to go so November looks like it'll be a nice jump in that metric.
The average order value as continued decline month over month week over week and.
And now it's approximately $98.
The conversion rate for shoppers completing checkout after adding items to their carts has also risen month over month month end and it's now at just over 24%.
So the 10 10 shopping festival, we did for core site research.
Last month, the conversion rate was more than 37%.
A major selling point for retailers, who come on the platform.
Is the dramatically lower rate of returns they experienced through livestream shopping over traditional e-commerce sites.
The industry average return rates for e-commerce or approximately 30%.
Remarkably we had no returns at all for the 10 10 Festival and overall return rate for all products purchased on market is less than 5% over the past 90 days since launch.
There are more than 350 shopper bolt recordings of previous livestream events on market that have had almost 20000 views over the past 90 days.
Almost 50% of those views with videos and the accessories and clothing categories 20.
20% in health and beauty and 19% in food and food prep.
Approximately 50% of registered shoppers watch on mobile devices, and approximately 48% watch on desktop devices.
Which continues actually to be a surprising stat as I think most people expect shoppers would be would be viewing on mobile.
In October foresight research the respected retail consulting firm selected market don't live as one of the platforms for their third annual livestream shopping event that they called 10 10 held on October 10.
The event was watched in multiple countries around the world and drew thousands of registered attendees. Among the highly attended livestreams, where hello, fresh halston, 100% pure Spice allergy and fifth and Sherry Hello, Fresh had almost 900 attendees with ally stream sessions.
It was an important milestone for market as the other platform selected was an established livestream shopping application that works as a plug into a retailer's existing website.
The feedback we received was that the retailers, even even some of the major retailers.
But far and away.
Market was was the preferred site the the ecosystem of sellers and shoppers was was much preferred over a standalone plug into to your own website. It much as a as a retail store would prefer to be located in the shopping mall.
This feedback was reflected in the engagement levels, which were noticeably higher for the streams of market.
The growth of new vendors coming onto the platform remains quite strong with our sales teams still reporting close rates after a demo of greater than 96%.
And I got to tell you that that's higher than anything I've ever seen in our sales business.
And while we continue to build out the ecosystem of buyers and sellers of market.
We've begun to be more selective choosing sellers that have proven sales on other platforms interesting products and a robust online following.
Through the first 90 days, we have approximately 500 approved sellers in various stages of Onboarding on the platform and approximately half of those now I think.
Now have opened stores.
Obviously the number of.
Inbound interested parties and interested sellers to beyond the platforms is much greater than that but not every seller is the right fit right now the market for example.
We get a fairly large number of companies every week that sell CBD based products among other things.
We are precluded from selling on market due to regulatory issues and restrictions under the terms of our credit card processing agreements, but.
Over time, I expect those regulations and restrictions to change.
And we will see at least we could see an explosion of new stores and products.
For those products and some from from famous celebrities.
Involved in those kinds of our products that that want to be on market.
So for the reasons I discussed earlier.
We have curtailed our marketing spend for the time being and have begun allocating more of our remaining marketing budget.
To attracting more shoppers to the site.
Just over three weeks ago, we began marketing our creators on market program.
As I said in the prior announcement.
I really expect this will be the greatest source of growth on market in 2023 and beyond through this program.
Youtube and other social media content creators and Influencers and choose their favorite products from a catalog of over 12 million products from literally hundreds of popular brands and then sell them to their fans and followers to the videos that they were already created.
They can live stream on market, while simultaneously streaming over their existing social media channels in order to engage their existing fans and followers.
Participation in the program is initially being offered to creators that complete an application and.
That meet certain criteria, including the size of the social media following.
Look if if if you believe you may qualify. Please go to the calling creators tab on market Dot live and go through the application process because once accepted.
You'll have access to see really the extraordinary user friendly experience of selecting products from the expansive catalog that can get you up and running and selling in no time.
This combination of access to the inventories of these major retailers together with the backend technology that produces a seamless fun experience for these creators to select products that can be sold in their videos is unique to market and has already attracted an impressive list of creators and influencers that have been.
Selected to participate in the program.
We expect to add as many as 200 additional retail brands to market that are participating in the creative programming in the coming weeks and months and as many as an additional 1000 active creators and sellers through 2023.
The number of live stream shows is increasing week after week and we currently have approximately 250 lives shopping chose already scheduled through the holiday season and into January with many more expected.
These include events that begin on Black Friday, and run all day Friday Saturday and through cyber Monday, among many other themed shows.
Our giving Tuesday show is rapidly building an audience and we're seeing many more of the world's top brands deciding to participate in that show, providing some extraordinary products offer that really just incredible discounts.
Recent shows featured jewelry from baccarat at unheard of discounts. Please check this show out.
This month also marks the beginning of many of the new creator shows, including one by a a very popular producer writer creator with more than 100000 active social followers, who also happens to be a former sports illustrated swimsuit model.
And also we will see the premier of some of the original shopping entertainment content produced specifically for market that I've spoken about previously that we expect to add at the end of this month.
I'm really very proud of the market Dot live team for the extraordinary progress we've made in just the past 9100 plus days since launch.
Net revenue for market is growing but as we've just had three months of operation. It's still just a nominal component of our total revenue. So we won't begin breaking out market revenue in reporting it separately just yet.
Okay. So let me turn to our SaaS business report.
As Ive discussed in our previous earnings call.
We are and.
We remain I believe the leading provider of sales enablement applications for the direct sales industry displacing previous market leaders and would be competitors just as we said we would when we entered the space in 2019.
Beginning at the end of the second quarter of this year, we expanded our suite of sales enablement tools with the release of the new innovative sales applications. I told you that we had in development in prior conference calls.
These products, including verb live 2.0, and pulse will not only enhance our leadership position in the direct sales space, but put us that much further ahead of the handful of would be competitors.
I'm also happy to announce that we are beginning to get traction among our existing direct sales clients, who seek to adopt market dot life as a corporate events communication tool for recruitment and lead generation.
As well as for an extension of their marketing and distribution strategies.
Consistent with the guidance. We previously provided we began to see the increased recurring SaaS revenue from these new products in the third quarter. However.
It was offset by some of the contraction we experienced in the second quarter like most business sectors experienced this year. Our data showed that the direct sales industry had a downturn in the number of active sales reps between the first quarter and the third.
And since we bill our direct sales enterprise clients based on the number of active reps they have in any given billing period.
When they experienced a downturn it's reflected in our revenue accordingly.
Despite adding more new clients in Q3 than we did in Q2.
Our SaaS revenue came in virtually flat.
In order to address this problem we.
We began moving all of our affected clients to a flat rate pricing model based on their average monthly billings over the course of the year.
This has proven to be a win win for our clients and for us.
They now have predictable monthly SaaS expense and.
We've now removed the volatility from our SaaS revenue and established a stable recurring revenue stream based upon which we can build as we add new clients every single month.
I expect we will see the results of the new pricing model in the fourth quarter of this year and continuing throughout 2023.
Fortunately, we now expect to see the trend reversing with more reps joining direct sales companies no doubt driven in part by current economic conditions.
Before I turn it over to our CFO Salman Khan for more detailed review of our third quarter financial results.
Let me briefly touch on our new professional sports unit vertical.
In Q4, 2021, we launched our professional sports unit built on a 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 platform and built an impressive sales pipeline a professional sports teams both in the U S and other countries.
In addition to the Pittsburgh Penguins, we announced the Florida Panthers the Phoenix SUNS.
And the Detroit Pistons and last week, we announced the addition of the Pittsburgh Pirates, Our first major League baseball team.
Now this win was particularly valuable because following the extremely successful pirates Pirates test launch of the platform earlier this year.
They were able to obtain approval from major League baseball advanced media or league wide use of the platform opening the door for our sales team to sign many more major league baseball teams.
It remains might continuing expectation that some of these teams will adopt market dot live as part of their fan engagement strategies.
Now I'll turn it over to our CFO Solomon Con for more detail around our reported financial performance Soma.
Thank you Laurie and good afternoon, everyone.
I'd like to review our financial performance as reported in our Form 10-Q filed today November 14 for the third quarter ended September 32022.
I may reiterate or provide more color around some of the data points, where we shared with you.
The following compares the Companys results of operations for the third quarter of 2022 with the third quarter of 2021.
SaaS recurring subscription revenue a component of total digital revenue was approximately $1 9 million, a modest increase which as reset.
Virtually flat or the same period last year.
Non SaaS digital revenue was <unk> 2 million versus <unk> 5 million for the same period last year.
It was a record quarter for <unk>.
Non SaaS digital revenue.
Total digital revenue was 2 million versus $2 4 million for the same period last year.
Merely due to the record non SaaS digital revenue, we experienced in that quarter as I just discussed.
That's recurring subscription revenue as a percentage of total revenue was 85% compared with 64% for the same period last year and up from 82% for last quarter.
Total digital revenue as a percentage of total revenue was 92% compared with 81% for the same period last year.
Up from 90% in the second quarter of 2022.
Total revenue was $2 2 million versus $2 9 million for the same period last year, primarily due to decrease in the low margin non digital revenue business, we continued to exit.
Cost of revenue across all products was <unk> 7 million, an improvement of 32% or the same period last year and an improvement of 12% over Q2 2022.
Reflecting planned cost reductions and a continuing shift towards the company's digital business.
From the lower margin non digital business.
Given the cost reductions very referenced earlier in his comments, we expect to report.
Further improvements in our SaaS cost of revenue for Q4 and beyond.
Gross margin across all products was 66% an improvement over the 63% for the same period last year and over the 65% for Q2 2022.
Research and development expenses were $1 4 million as compared to $3 5 million for the same period last year, reflecting an improvement of 61% due to planned cost reductions and continued improvement of 30% over last quarter for our SaaS business offset by <unk>.
New expenditures attributable solely to market.
General and administrative expenses were $7 million as compared to $6 1 million for the same period last year, reflecting a modest 6% increased over Q2 of 2022 and are beautiful for the most two one time expenses incurred in connection with shop first and the launch of market that life.
Modified EBITDA improved by $1 7 million or 25% when compared with the same period last year.
Modified EBITDA is a non-GAAP measure and I refer you to our press release distributed today.
More information and greater specificity around our modified EBITDA analysis.
Now, let me share the financial results for the nine months ended September 32022 in comparison with the same period in 2021.
Recurring subscription revenue was $5 8 million, an increase of 19% or the same period last year total digital revenue was $6 3 million an increase of 6% from the same period last year.
Total revenue was $7 3 million a decrease of 7% or the same period last year attributable in large part to our decision to exit the low margin non digital business discussed previously.
Cost of revenue was $2 5 million, an improvement of 26% or the same period last year, reflecting the impact of planned cost reductions and a shift towards the company's digital business and away from the lower margin non digital business.
Research and development expenses were $4 3 million as compared to $9 6 million for the same period last year, reflecting an improvement of 55% attributable to the planned cost reductions previously discussed general and administrative expenses were $20 6 million, which actually represents.
Improvement of 1.1 million offset for the most part by the one time costs incurred in connection with shop first and the launch of market as discussed previously.
Modified EBITDA improved by $4 9 million or 24% when compared with the same period last year.
Once again modified EBITDA is a non-GAAP measurement and I refer you to our press release distributed today for more information and greater specificity.
And our modified EBITDA analysis.
Cash totaled <unk> 9 million as of September 32020 to essentially the same as December 31, 2021. However, the company added approximately $9 million of gross proceeds in cash through a registered direct offering with institutional investors, which resulted in gross proceeds of $4 million.
On October 25, 2022, and through an unsecured nonconvertible, 9% fixed interest rate promissory note, which resulted in gross proceeds of $5 million on November seven 2022.
I refer you to our Form 10-Q filed today for complete details around these financings I'd now like to turn the call back or to the operator for Q&A.
Thank you Sir.
Ladies and gentlemen, we will now begin the question and answer session.
If you would like to ask a question. Please press star followed by the number one on your telephone keypad.
If your question has been answered and you would like to withdraw it. Please press star followed by the number too.
If you are using a speaker phone please lift the handset before entering any keys.
Your first question will come from Bryan Kipp Slinger of Alliance Global. Please go ahead.
Hi, guys good evening and thanks for all the details.
With the cost cutting you've discussed.
Any impact in your ability to run market festivals.
And what's the schedule for such events and lastly, with the lower marketing budget. You described how does it impact the market if it's not running market festivals.
It will not impact at all running the market festivals.
And as I I think I alluded to in my comments, a few moments ago.
We already have 250.
Livestream events that have been confirmed and scheduled for the.
The balance of this year through the holiday season.
And.
No we don't anticipate any.
Any impact on our ability to do that and continue to do that.
So so you don't see an impact which is okay. I'm just curious there is no impact to the cost cuts impact.
Okay.
In any way shape or form core market business is how you see it now.
Alright.
I don't anticipate.
A major impact, though I will say this we did cut back on marketing budget.
And some of that budget had previously been allocated to bringing in vendors onto market that lives.
We've launched now to create a program, where we believe we'll probably get the most.
New vendors and and hopefully there'll be bringing in.
A lot of the the shoppers and buyers from their respective followings.
The cut our marketing budget won't have any impact on that at all but I will say in the spirit of complete transparency.
As I've mentioned previously this is a numbers game.
And if we had greater money to expand on marketing to bring in more vendors and to bring in more shoppers, we would anticipate greater performance.
No question about that but I think at the current levels I think it would be just fine.
Okay.
I realize.
So you've only block was about 100 days.
It's super early.
First I thought the brands, we're going to do a lot of the markman solids in that.
But I'm wondering.
I realize youre building ecosystem been demonstrating your kpis so more.
More vendors com.
When should investors expect this is going to start to scale in terms of revenue I realize today, its pretty small $5 million a quarter of $1 million a quarter and what are the leading indicators that we would see that we expect that would be around the corner.
I think as we get into.
The second quarter of next year, which is actually not that far off.
One of the indicators that we'll be sharing is the gmg the gross merchandise value sold on the platform.
Of which a percentage goes directly to our our revenue.
Actually our bottom line there since our cost are relatively low.
So that's.
That is one of them I think will begin to.
To see some of the kinds of information that in.
In addition to obviously, what I've already shared that investigate investors would be interested in.
Okay.
And then switching gears to the SaaS business first can you just discuss.
Discuss client churn not necessary, the type where a customer loses sales reps, but instead the business relationship maybe decides not to use your technology and then.
If you can maybe give an enterprise customer count if it's relevant in your SaaS business, maybe versus a year ago.
So with respect to churn.
There's two ways I think you might look at that the first is the churn within our customers' owned business among their sales reps and in the direct sales industry.
That churn is pretty meaningful is probably somewhat greater than most sales based organizations.
And that does impact us.
As I mentioned.
Just a little bit ago.
And that's with regard to those specific.
Contracts that we have.
Where we are being paid not just the base rate from the from the enterprise itself, but also a percentage of the number of reps.
On the on the platform so as they lose reps and don't replenish them.
That does have an impact on us and we've seen that happen.
As I mentioned, a little bit ago, what we've done to address it is recently implemented flat rate pricing, so that and thats based upon the average monthly spend that that we get that our customers make with us so that it was easy for them to adopt <unk>.
And that seems to have gone over really well because as I said there.
They're able to.
Have a more reliable.
Sense of what their SaaS, the SaaS business is going to cost them.
And for US as I said it's.
It takes the volatility out of it so as they may be down for a few months with with fewer reps.
It doesn't impact us because we're going to stay at that flat rate number so as we add.
New customers.
Each month.
We'll be adding on top of a.
A pretty good firm base and I think that removing that volatility is going to make a really big difference for us.
Now talking about the other element of churn which is.
How many customers do we lose.
Luiz in any particular period of time I will tell you that.
Our churn rate historically is.
Is.
Less than eight.
8%, so where our retention rates are like 92% and above which is I think pretty good.
I hope that answers your question.
The last question I have is again back to the cost cutting.
Which I think is.
It should.
It will be well received.
How do we think though that impacts customer acquisition on the SaaS business.
Our pipeline is.
Is pretty strong and it's not going to impact anything that we're seeing at least out over the next several months.
And look.
We'd like to be able to spend a ton more on marketing because we see a direct correlation to the amount that we spend in an edge on on lead generation.
Look we have to live in the real world the reality is.
The markets are bad the economy is bad access to capital is incredibly restricted and restrained.
We have to cut back on everything and give ourselves the wrong way so that we're not back in the capital markets again.
So.
To say that it's going to have zero impact it would be disingenuous and.
But I believe that.
It's not something material that anyone's going to notice here in India in the near term.
Great. Thank you.
Sure. Thank you Brian .
Yeah.
Your next question comes from Ed Woo of <unk> capital. Please go ahead.
Yeah, as you add more and more sports team congratulations on that or the economics to you guys getting better with each new team.
I think we've now hit that breakpoint, Ed where initially what we were doing is is <unk>.
Trading services.
For these teams to allow them to adopt and use the platform in and confirm for themselves that it indeed creates enormous value for them. So now we're past that I think we've got five or six of these teams are now and with the most recent one where we now have entre into major League baseball.
And our application is now approved for use by all of those teams now I think we turned out we turned up the economics on that are really really excited about that because.
For those of you who really.
Don't know how this process works with major League baseball, they really have a very tight control on the kinds of things in terms of advertising and marketing that they or their sports teams are permitted to do so.
Cracking that and and now being approved.
I've got great expectations for it.
Great and what about our international opportunities for International Sports team have you guys are.
Are you guys going to be pursuing that at scale.
We have been in discussions with with sports teams.
Throughout Europe .
And.
It's.
It's slow.
<unk>.
The sales cycle on that is slow we've actually had some of our sales reps.
And a bit of time in Europe meeting with teams directly so looks promising trying to negotiate the best terms and when we've got something to announce around that you can count on us sharing that news.
Yeah.
Thanks for answering my question and I wish you guys. Good luck.
Thank you very much.
Ladies and gentlemen, once again, if you would like to ask a question. Please press star one at this time.
Sure.
Your next question will come from Martin Saltzman of AFM investments. Please go ahead.
Hey, guys and congratulations on all the great developments you guys are doing.
Prophetic Rory to the comments you made about the economy, because thats where were on your call Amazon just announced that they're laying off 10000 people, so that does scary, but especially going into the holidays.
Hmm.
So a couple of thoughts I had in questions and I have a lot of people that follow me and I've had a lot of emails and people call me and ask me questions. One question was how better can you get market out there as a household word.
And.
How can you get it out there faster one of my clients brought this up he says Oh I see verb on Facebook. He says they have a minimal amount of likes he says, but if people were to comment.
Al go rhythms would change and more and more people would probably take note of it how do we get that going and are you in agreement with that.
Well I think it's hard to disagree with anything that you say Martin.
So.
But with respect to how the algorithms.
I don't think that should be an expert on that.
But I believe what you stated is correct and we do that.
Every day.
We have.
A team in and analyze that and make the.
Analyze the how these other items are constantly changing and how to get around that to create the greatest level of exposure, but I think to answer the first part of your question somewhat with directly.
I think that it's inevitable that market's out life becomes a household name.
Look forward I really don't see any reason that that would have happened live streaming and livestream shopping in particular.
Just over the past six months has become really top of mind.
In so many different places and so many different news outlets.
At a far greater.
And I honestly would have expected at this point.
I mean, it was only a few weeks ago, where good morning America.
Uh huh.
All places.
Featured a whole segment selling their viewers that they should seek out livestream shopping platforms for the holiday shopping so it's happening and as people begin to look the livestream shopping platform is really not that many of them out there. Yes. There is a resilient online e-commerce platforms and sites.
But there really aren't that many livestream shopping platform and certainly in eastern my opinion, none that come close to the kind of value proposition that market represents not only for shoppers, but will also fall for sellers. So again I think it's inevitable that we get there and I'm going to do everything I can to accelerate that.
I appreciate that and I like your enthusiasm with that now I have been getting calls.
Nausea, and I don't know why people want to concentrate on it so much but I am getting people asking me on the SaaS side of your business back when maybe the first quarter you might have talked about Google and how they might integrate just like how Microsoft outlook did.
Can you comment at all on that.
Yes.
When we did.
<unk> developed.
The integration with Microsoft outlook.
We're pretty optimistic about it and.
And based upon that level of optimism and a lot of the development work that we've already done which still usable.
For Gmail.
We have put plans in motion in fact.
<unk> already begun a fair amount of development work.
The integration into <unk>.
But as we move forward, we realized that the adoption rates that we thought we would get would not really as great.
In terms of materializing as we as we thought they could be and we realized in order to make that happen and we're going to need to spend quite a bit more money in marketing and promotion now.
It was a great application and I think it had great implications, but this is around the time that we were getting ready to really pull the trigger and accelerate our development on market and get it out into commercial use.
And to be perfectly honest.
We have limited resources.
We want to not get into the capital markets and just keep taking money we want to be very judicious about what we're going to spend money on and I needed to make a choice should I spend more money in promoting and marketing outlook and then presumably gmail after that or should I cut back on that and <unk>.
<unk> on what I believed and certainly what our board and the rest of our team here believes that market would be a far greater value proposition for greater value creation opportunity than both outlook and Google. So we had to cut back on that and focus accordingly.
I hope that answers your question, yes, no. It does and I respect that look google's a sexy name when you start saying your embedded with Google.
Does mean, a lot, but obviously you are spending the money the way you feel it needs to be spent I have to ask two more things. One here has to do with Influencers and creators okay.
Guess, what I'm trying to figure out as creators of the people who make these products and they have their followings are there any influencers that are youre courting or that are trying and looking to court you have.
How did they heard about market.
Of course, absolutely.
And you'll see those beginning this month.
And then as they are getting ready to launch and do their shows will be promoting that.
Of course, we are we are relying pretty extensively on the influencers and creators themselves promote in it after all we're choosing them among all of those that come in and want to be honest, we're choosing them based upon the size of their following and their commitment by the way, which is part of the agreement.
Andrew into with us their commitment that they're going to promote it a certain number of times a week to their to their following and that's really kind of a big deal and I think that's something that I think Brian <unk> from from AGP.
Sort of alluded to in some of his questions before yes, we are counting very very heavily on the creators and influencers and certainly the retailers to promote this.
And thereby reduce the need for our own marketing budget to promote the growth of market. It's a really good point I'm glad you gave me an opportunity to to distress debt no. Thank you and and this is one that you know.
Sort of is a newer thing now you have here on your bullet points on your on your release about this.
Advisory Group Elantra and I, just started thinking myself assist you in evaluating strategic opportunity. So I just had a thought and you could tell me if I'm off base or you can't answer it what have you.
Are you at all thinking about partnerships throughout the World for instance.
Let's say you partner with somebody to market market.
In Europe .
Our Africa.
Or the middle East.
In other words, just develop strategic partnerships, because maybe its too hard to do it all yourself conquer the world yourself, maybe there's a way to do it partnerships.
Yeah.
Martin.
Not sure that I could answer that.
Without running a sale of the <unk>.
Rules here and any event it would be premature so.
I'm, sorry, I can't really provide more information than that but I will tell you that.
We have historically received all kinds of.
Inbound inquiries for partnerships and other kinds of strategic.
Strategic.
Relationships and some of them.
No.
Right out of the gate.
Don't make any sense and theyre easy to just dismiss and others require further thought analysis comps.
Consultation with the board and sometimes outside experts.
And.
More recently there have been.
Theres been reason too to take some of these things much more seriously and.
And in so doing bring in people that are.
Our experts far beyond my own expertise and that of our board members or even ask.
And enhancement to our respective expertise in these areas and so we held what what is called a beauty contest, where you have a number of different.
Bankers come to you and and present.
There their services and.
And we did that and.
The presentations were made to the board and the board selected Alondra.
And we've engaged with them and they are at work I can't.
Fortunately share anything more than that right now, but you know that as soon as I can I absolutely will.
Right I understand.
Yeah, certainly you don't want to compromise you or anybody else.
I don't think I have any other questions for today I noticed on your market.
Site. Your platform you have the seller list back up there, which is I think very important for people to see.
Who is the vendor I appreciate that so thank you for doing that and I wish you all the best in the holiday shopping season.
Thank you Martin I do want to just respond to that last point you made about the sales thing because.
We took that off.
Because we had made some updates to the site and then Youre able to go to a different area of the navigation bar and see all of that information.
Wasn't that you couldnt see it just I think we put it where it belongs.
On other kinds of e-commerce sites typical.
However.
We did get a fair amount of feedback about that and.
I want to credit our team here that.
What you people say.
Comments criticisms of come in matters to us we pay attention to it and we went.
And put it back because it seem too.
It make people more comfortable and happy and we do that and.
And that's really what we're about here, but but thank you again for the good wishes and same to you and yours and.
I think that.
Do we have anymore.
No no Sir there are no other questions.
Okay.
I wish everyone.
Well that's.
Through through the holiday season, obviously, we're all experiencing some some difficulties through the this crazy Crazy World.
And.
But I feel pretty optimistic that we're all going to come through just fine and.
All of our expectations.
Certainly and our hard work and your patience will be rewarded I really appreciate everyone hanging in there with us. Thank you.
Ladies and gentlemen, this does conclude your conference call for this afternoon.
We would like to thank you all for participating and ask you to please disconnect your lines.
Yes.
Okay.