Q4 2024 Verb Technology Co Inc Earnings Call
Operator: Verve 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.
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 FCC.
Rory J. Gutierrez: I would now like to turn the call over to Rory J. Gutierrez, CEO. Thank you, moderator, and thanks to everyone for joining us today for our fourth quarter and full year 2024 financial results and business update conference call.
Rory J: I would now like to turn the call over to Rory J code type C.
Oh.
Rory.
Speaker Change: Thank you moderator and thanks to everyone for joining us today for our fourth quarter and full year 'twenty 'twenty four financial results and business update conference call.
Rory J. Gutierrez: Well, it sure feels good being back before you speaking directly to you about our company, our business, our performance, and sharing our direct, transparent, honest thoughts and strategies for how we intend to drive shareholder value in this business now and into the future. So I'd like to begin with a brief discussion about our history and challenging market conditions that influenced the formulation of the strategies that we undertook to insulate ourselves from those conditions. And I'm referring to insulating ourselves from those market conditions that became impediments to value creation in our former direct sales software as a service line of business, as well as those market conditions, particularly capital markets conditions that affected and are affecting many, many small and microcap exchange listed companies even today.
Speaker Change: Well it sure feels good being back before you speaking directly to you about our company business outperformance and sharing our direct transparent honest stopped and strategies for how we intend to drive shareholder value in this business now and into the future.
Speaker Change: So I'd like to begin with a brief discussion about our history.
Speaker Change: Challenging market conditions that influenced the formulation of the strategies that we undertook to insulate ourselves from those conditions and I'm, referring to insulate ourselves from those market conditions that became an ultimate value creation in our former direct sales software as a service line a bit.
As well as those market conditions, particularly capital markets conditions that affected and are backing many many small and micro cap exchange listed companies even today.
Rory J. Gutierrez: And then, I'd like to discuss the strategies that we employed and the changes we've made that underlie the impressive results we're now seeing in the business. I'll also touch on the strategies we employed that resulted in what I'm proud to state is a well cash-infused, extremely healthy debt-free balance sheet and a super clean cap table, the combination of which provide the all-important foundation for the impressive revenue growth we're now enjoying. All right. Let's jump in.
Speaker Change: And then I'd like to discuss the strategies that we employed and the changes we've made that underlie the impressive results. We're now seeing in the business.
Speaker Change: I'll also touch on the strategies, we employ that resulted in what I'm proud to state is a well ash infused extremely healthy debt free balance sheet and a super clean cap table.
Speaker Change: Combination of which provide the all important foundation for the impressive revenue growth we are now enjoying.
Speaker Change: Alright, alright, let's let's jump in.
Rory J. Gutierrez: Historically, we were an R&D-driven technology business built around a SaaS platform with a customer base that was comprised of, for the most part, direct sales companies or, as they are sometimes referred to, multi-level marketing companies. Well, when we entered the market with our interactive video-based sales software, we set out to become the dominant player in the and we did. What we saw at that time was the opportunity to address a market that included the large-scale sales teams, including tens of thousands of independent sales reps that these companies managed, all of whom needed a simple and effective mobile-based sales tool.
Speaker Change: Historically, we were an R&D driven technology business built around a SaaS platform with a customer base that was comprised of for the most part direct sales companies or as they are sometimes referred to multi level marketing companies well when we entered them.
Speaker Change: Market with our interactive video based sales software, we set out to become the dominant player in the sector and we did what.
Speaker Change: What we saw at that time was the opportunity to address a market that included the large scale sales teams, including tens of thousands of independent sales reps that these companies managed all of whom needed a simple and effective mobile based sales tool.
Rory J. Gutierrez: Over time, we learned some valuable lessons. First, while we onboarded large numbers of new sales reps every The attrition rate among sales reps at these companies was extraordinarily high, making it difficult and costly to generate meaningful revenue growth. In addition, while we developed what we believe were extremely effective sales tools to help sales reps, even inexperienced sales. Generate and convert sales leads. outdated internal communications policies that these companies prohibited us from communicating these tools and how to use them directly to the fields of sales reps, which may have curtailed much of the sales rep attrition, as the companies that managed these reps were often ineffective at doing so themselves.
Speaker Change: With time.
Speaker Change: We learned some valuable lessons first while we on boarded large numbers of new sales reps every month.
Speaker Change: Tuition rate amongst sales reps at these companies was extraordinarily high making it difficult and costly to generate meaningful revenue growth. In addition, while we developed what we believe were extremely effective sales tools to help sales reps, even inexperienced sales reps generate and.
Speaker Change: Convert sales leads.
Speaker Change: David Internal communications policies that these companies prohibit us from communicating these tools and how to use them directly to the fields of sales reps, which may have curtailed much of the sales Rep Christian.
Speaker Change: As the companies that manage these reps were often.
Speaker Change: And effective at doing sell themselves.
Rory J. Gutierrez: Finally, the ever-changing nature of the customer base we served, as well as the give-it-away-below-cost pricing models adopted by competitors who found themselves marginalized by our superior product offering, required continued costly R&D expenditures and continued returns to the capital markets.
Speaker Change: Finally.
Speaker Change: The ever changing nature of the customer base, we serve as well as the <unk>.
Speaker Change: Different way below cost pricing models adopted by competitors, who found themselves modularized by our superior product offering we.
Speaker Change: Acquired continued all asleep R&D expenditures and continued returns to the capital markets. These factors coupled with what we perceive to be declining market multiples for SaaS business is generally draw.
Rory J. Gutierrez: These factors, coupled with what we perceive to be declining market multiples for SaaS businesses generally, drove our decision to sell that business unit and focus instead on our new, though not yet, revenue generating Market.Live livestream shopping business. A bold move indeed, but one that has certainly proven now to have been in the best interest of our shareholders. So this was the first prong of our multi-pronged strategy to restructure, reconstitute, and reinvent VRB. The next prong of our strategy was to insulate ourselves from the predatory financing terms imposed universally on companies like ours who relied on access to the capital markets to fund continued R&D and other growth capital requirements.
Speaker Change: Drove our decision to sell that business unit and focus instead on our new though not yet revenue generating market Dot live livestream shopping business.
Speaker Change: We'll move and D. But one that has certainly proven now to have been in the best interest of our shareholders. So this was the first well of a multi pronged strategy to restructure reconstitute and reinvent via the.
Speaker Change: The next prong of our strategy was to insulate ourselves from the credit Tory financing terms imposed universally on companies like ours, who relied on access to the capital markets to fund continued R&D and other growth capital requirements.
Rory J. Gutierrez: Almost every finance initiative we undertook was fraught with last-minute retrading of material deal terms, ridiculous warrant coverage terms and conditions, post-deal financing, exclusivity arrangements, tying the company to bad financings into the future when additional capital was needed, all of which made us and so many other companies in the same situation perfect targets for short-selling and for companies with any kind of trading volume, greed-driven, illegal, naked short-selling. It wasn't hard to target companies that announced an upcoming financing, as short sellers could be confident that deal terms and corresponding share prices would be below whatever the then current trading price was.
Speaker Change: Almost every finance initiative, we undertook was fraught with last minute retraining a material deal terms ridiculous warrant coverage terms and conditions post deal financing exclusivity arrangements aligning the company to bad financings into the future when additional.
Speaker Change: <unk> capital was needed.
Speaker Change: All of which made us and so many other companies in the same situation.
Speaker Change: Perfect.
Speaker Change: A short seller and for companies with any kind of trading volume greed, driven illegal naked short selling it wasn't hard to target companies that announced an upcoming financing a short shallow can be confident that deal terms and corresponding share prices would be below whatever the then current trading price was.
Rory J. Gutierrez: This capital markets environment eroded share prices across the board, resulting in reverse splits required to maintain exchange listing requirements, and destroyed cap tables and balance sheets, causing an unprecedented level of exchange delisting. Ultimately, it was the individual retail investors left without sufficiently aggressive regulatory intervention. who bore the brunt of this market activity and still do. To avoid this awful outcome, we developed a unique strategy to utilize Reg A to structure our capital raise initiatives and avoid the predatory hedge fund investors, allowing us to issue straight common shares priced at the market with no warrant coverage and no investment banking fees.
Speaker Change: This capital markets environment eroded share prices across the board, resulting in reverse splits required to maintain exchange listing requirements and destroyed cap tables and balance sheets, causing an unprecedented level of exchange de listings.
Speaker Change: Italy. It was the individual retail investors left without sufficiently aggressive regulatory intervention.
Speaker Change: Bore the brunt of this market activity and still do to avoid this awful outcome. We developed a unique strategy to utilize reggae to structure, our capital raising initiatives and avoid the predatory hedge fund investors, allowing us to issue straight common shares priced at the market with no.
Speaker Change: Warrant coverage and no investment banking fees.
Rory J. Gutierrez: This financing vehicle, unique for publicly traded companies among other financing strategies that we utilized, allowed us to pay off all of our debt, redeem all of the previously issued preferred shares, completely restructure our balance sheet, adding it with cash, taking shareholder equity from almost $2 million negative in June, 2023 to more than $16 million positive in December, 2024. And giving us a cash runway, conservatively, assuming zero revenue growth, well into 2028 and beyond. The shareholder approved reverse split we did last year resulted in an extremely tight less than one million share float and essentially eliminate all of the warrant overhang from the years ago predatory finance.
Speaker Change: This financing vehicle unique for publicly traded companies among other financing strategies that we utilized allowed us to pay off all of our debt redeem all of the previously issued preferred shares comfortable waiting and restructure our balance sheet, having it with cash taking shareholder equity from almost $2 million net.
Speaker Change: In June 2023 to more than $16 million positive in December 2024, and giving us a cash runway.
Speaker Change: Conservatively, assuming zero revenue growth well into 2028 and beyond.
Speaker Change: The shareholder approval of a reverse split we did last year resulted in an extremely tight less than 1 million share float and essentially eliminate.
Speaker Change: All of the warrant overhang from the years ago predatory finance.
Rory J. Gutierrez: We are very proud of how well that series of initiatives was executed, completing that important second prong of our multi-pronged strategy to restructure, reconstitute and reinvent Burb.
Speaker Change: We are very proud of how well that series of initiatives was executed completing that important second prong of our multi pronged strategy to restructure we constitute and reinvent barred the next prong of our strategy was to diversify our revenue streams to insulate ourselves from changes in the Mark.
Rory J. Gutierrez: The next prong of our strategy was to diversify our revenue streams, to insulate ourselves from changes in the market, including economic and regulatory changes, as well as changes within our own customer base and demand for our products and services. So the challenge was to identify and develop independent yet complementary revenue-producing business units that could leverage the cost savings produced by a unified internal finance, sales, marketing, and technology department structure utilized by and across all the business units, while recognizing that the core of our business was our interactive social video commerce technology and know-how. Our strategy was to exploit those capabilities by entering the exploding telehealth industry, leading to the development and launch of Vanity Prescribed, followed by Good Girl Rx in partnership with TV and social media celebrity Savannah Chrisley, and then the development and launch of GoFundYourself, our very exciting, fast-growing crowdfunding marketing.
Speaker Change: Including economic and regulatory changes as well as changes within our own customer base and demand for our products and services.
Speaker Change: So the challenge was to identify and develop independent yet complementary revenue producing business units that could leverage the cost savings produced by a unified internal finance sales marketing and technology department structure utilized by <unk>.
Speaker Change: Across all the business units, while recognizing that the core of our business was our interactive social video Commerce technology and Knowhow, our strategy was to exploit those capabilities by entering the exploding telehealth industry, leading to the development and launch of Vanity prescribed.
Speaker Change: Followed by good girl Rx in partnership with television and social media celebrities Savannah, Chrysalid, and then the development and launch of Gulf bonds yourself.
Speaker Change: Very exciting fast growing crowd funding marketing platform, so to give a sense of the revenue potential for Gulf Fund yourself, we launched it in Q3 with little to no marketing and we recognized $25000 in revenue, Okay and then in Q4, we recognized.
Rory J. Gutierrez: So to give a sense of the revenue potential for GoFundYourself, we launched it in Q3 with little to no markup. And we recognized $25,000 in revenue. OK, and then in Q4, we recognized $233,000 in revenue. And if any of the more recent developments come to fruition for the show, 2025 may be an extraordinary year for GoFundYourself and VRB stockholders. Vanity Prescribed was in development during Q3 and Q4, identifying suppliers, onboarding suppliers, then replacing suppliers, developing our online patient screening and prescription approval process, customer service and support, and shoring up our supply chain and anticipation of participating in the extraordinary growth of the telehealth space following the introduction and rapid adoption of the new GLP-1 weight loss.
Speaker Change: $133000 in revenue and if any of the more recent developments come to fruition for the show 2025 may be an extraordinary year for Gulf found yourself and Barb stockholders that any prescribed was in development during Q3 and Q4.
Speaker Change: Identifying suppliers Onboarding suppliers, then replacing suppliers developing our online patient screening and prescription approval process customer service and support and shoring up our supply chain and anticipation.
Speaker Change: Participating in the extraordinary growth of the telehealth space following the introduction and rapid adoption of the new G. L. P. One weight loss drugs.
Rory J. Gutierrez: Revenue, though now growing, was modest through that period, and we're excited for a broad-based launch and marketing campaign that is about to get underway.
Speaker Change: Revenue, though now growing was modest through that period and we're excited for a broad based launch and marketing campaign that is about to get underway.
Rory J. Gutierrez: As to Market.Live, at the end of Q3, we changed our focus in product offering by providing what we believe is an industry-leading, end-to-end solution for brands, seeking to adopt a social commerce strategy that they cannot manage in-house on a cost-effective basis. That strategy has proven to be enormously successful, producing exponential revenue growth. As reflected in our 2024 Form 10-K file today, in Q1, we generated revenue of just $7,000. In Q2, we generated revenue of $37,000. In Q3, we generated revenue of $103,000. And in Q4, we generated revenue of $490,000, an impressive and most welcomed trend by anyone's standards.
Speaker Change: As the market dot locks at.
Speaker Change: At the end of Q3, we changed our focus and product offering by providing what we believe is an industry leading end to end solution for brands seeking to adopt a social commerce strategy that they cannot manage in house on a cost effective basis that strategy has proven to be.
Speaker Change: Enormously successful producing exponential revenue growth.
Speaker Change: Reflected in our 2024 Form 10-K filed today and.
Speaker Change: In Q1, we generated revenue of just $7000 in Q2, we generated revenue of $37000. In Q3, we generated revenue of $103000 and in Q4, we generated revenue of 490.
Speaker Change: Hours and dollars and impressive and most welcome trend by anyone's standards.
Rory J. Gutierrez: Combined 2024 revenue was $895,000, an increase of $832,000 over 2023, representing revenue growth of 1,321% over that period. This performance is the greatest amount of revenue generated since the strategic sale of the company's direct-sale SaaS business unit in June 2023. Okay, looking at Q4 alone, we generated $723,000, an increase of $694,000 over the same period last year, representing revenue growth of almost 2,400% over that period. And as compared to Q3 2024, revenue in Q4 increased by $595,000, representing growth of almost 465% quarter-over-quarter.
Speaker Change: By 2024 revenue was $895000 an increase of $832000 over 2023, representing revenue growth of <unk>.
Speaker Change: <unk> hundred 21% over that period.
Speaker Change: This performance is the greatest amount of revenue generated since the strategic sale of the company's direct sales SaaS business unit and June 2023, Okay.
Speaker Change: Looking at Q4 alone we generated $723000 an increase of $694000 over the same periods last year, representing revenue growth of almost 24% over that period and as compared to Q3 2024.
Speaker Change: Revenue in Q4 increased by $595000 representing growth of almost 465% quarter over quarter.
Rory J. Gutierrez: Okay, so while we historically don't provide going forward guidance, we are very comfortable sharing our expectation that Q1 2025 will surpass Q4 2020-24. Finally, as to the last prong of a multi-pronged strategy to restructure, reconstitute, and reinvent verbs, Wee-wacky. that any business that fails to identify and develop an artificial intelligence strategy will be marginalized. And with that in mind, we explored a number of different strategies, including developing our own AI capabilities in-house, which we smartly rejected. And instead, we scoured the market for a company with a developed, tested, proprietary AI solution, uniquely tailored to video-based social commerce.
Speaker Change: Okay. So while we historically don't provide going forward guidance, we are very comfortable sharing our expectation that Q1 2025, well surpassed Q4 2000 2024 finally after the last prong of our multi pronged strategy to restructure we call.
Speaker Change: Institute and reinvent bird.
Speaker Change: We recognized that any business that fails to identify and develop an artificial intelligence strategy.
Speaker Change: Will be marginalized and with that in mind, we explored a number of different strategies, including developing our own AI capabilities in house, which we smartly rejected and instead, we scoured the market for a company with a developed tested proprietary AI solution unique.
Speaker Change: We've tailored.
Speaker Change: Video based social commerce upon testing, the AI and social commerce capabilities of life.
Rory J. Gutierrez: Upon testing the AI and social commerce capabilities of live, a bleeding-edge, video-based social commerce startup. or we entered into a licensing agreement to incorporate that technology into our Market.Live platform. Well, to our great surprise, we found that the integration of Livecom Tech resulted in a massive operational cost reduction. In fact, we anticipate a direct operational cost reduction of approximately $1 million per year. However, perhaps more importantly, we also recognized that the addition of LiveCom's technology created an entirely new, updated platform, feature-rich, with capabilities far beyond our then-current platform, and certainly beyond that of many other social commerce platforms. So, rather than simply license the technology and risk that LiveCom would be acquired by a competitor, limiting our access to the technology and future iterations we decided to acquire it ourselves.
Speaker Change: Leading edge video based social commerce startup.
Speaker Change: While we entered into a licensing agreement to incorporate that technology into a market that life platform.
Speaker Change: Well.
So a great surprise, we found at the integration of life comps back resulted in a massive operational cost reduction in fact, we anticipate a direct operational cost reduction of approximately $1 million per year.
Speaker Change: However.
Speaker Change: Perhaps more importantly, we also recognized that the addition of live comps technology created an entirely new.
David: David platform feature rich with capabilities far beyond our then current platform.
David: Certainly beyond that of many other social commerce platforms itself.
David: Other than simply license the technology and risk that life com will be acquired by a competitor <unk>.
David: Eliminating our access to the technology and future iterations of it we decided to acquire it ourselves.
Rory J. Gutierrez: And it is our expectation that the acquisition will be highly accretive and produce meaningful value for Verbstock. With the closing of the live comm acquisition, which remains on track and is expected to occur in the coming week.
David: And it is our expectation that the acquisition will be highly accretive and produce meaningful value from barb stockholders.
With the closing of the live Com acquisition, which.
David: Which remains on track and is expected to occur in the coming weeks.
Rory J. Gutierrez: We will have effectively completed the transition of VIRB from an unprofitable, cash-hungry business in a challenging market. to an extremely well-capitalized, well-diversified business with proven, strong, fast-growing revenue generation capabilities, AI-ready with a tight float, clean cap table, and debt-free balance sheet poised for meaningful continued growth.
David: We will have effectively completed the transition of bird from an unprofitable cash hungry business in a challenging market.
David: It's still an extremely well capitalized well diversified business with strong fast growing revenue generation capabilities ready with a tight float clean cap table and debt free balance sheet poised for meaningful.
Speaker Change: Can you grow.
Rory J. Gutierrez: In closing, I refer you to our 10k file today for greater details concerning our 2024 financial results, as well as the press release we distributed today, summarizing those results for additional information I've not covered in my conference call today, because I've chosen instead to use this time to provide context for those results and share our strategies and ongoing initiatives for continued growth and value creation for VIRB stockholders. And finally, And as anyone who could read a balance sheet could see. With under 1 million shares issued and outstanding as of December 31, 2024, and debt free with more than 13 million in cash and highly liquid securities and assuming zero value given for our three revenue generating business .
Speaker Change: In closing I refer you to our 10-K filed today for greater details concerning 2024 financial results as well as the press release, we distributed today summarizing those results for additional information I have not covered in my conference call Tonight, because I've chosen instead to use this time to provide comp.
Speaker Change: But those results and share our strategies and ongoing initiatives for continued growth and value creation from Barb stockholders.
Speaker Change: And finally.
Speaker Change: And does anyone who could meet our balance sheet could see.
Speaker Change: With under 1 million shares issued and outstanding as of December 31, 2024.
Speaker Change: Debt free with more than $13 million in cash and highly liquid securities and assuming zero value given for our three revenue generating business units.
Rory J. Gutierrez: I would be remiss if I didn't point out that our net cash value per common share is at least $13.50. It's Weebly. represents a very compelling opportunity. Very compelling, indeed.
Speaker Change: I would be remiss, if I didn't point out that our net cash value per common share is at least $13.50.
Speaker Change: Which we believe.
Speaker Change: Represents a very compelling opportunity.
Speaker Change: Very compelling indeed.
Rory J. Gutierrez: I thank you for allowing me to address you all today and share with you our excitement and optimism for VIRB shareholders now and into the future.
Speaker Change: Hi, Thank you for allowing me to address you all today and share with you our excitement and optimism for verb shareholders now and into the future.
Speaker Change: That does conclude today's teleconference. Thank you for your participation.
Speaker Change: Connect your lines at this time.
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