Ton Strategy Co (TONX) 2022 Q4 法說會逐字稿

Good afternoon, and welcome to the full year and fourth quarter 2022 financial results conference call for Verb Technology Company Incorporated. At this time, all participants are in a listen-only mode. Please be advised that this call is being recorded at the company's request.

下午好，歡迎參加 Verb Technology Company Incorporated 的 2022 年全年和第四季度財務業績電話會議。此時，所有參與者都處於只聽模式。請注意，本次通話是應公司要求進行錄音的。

On our call today are Rory J. Cutaia, CEO; and Salman Khan, CFO. Before we begin, I would 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 could cause actual results to differ materially. Forward-looking statements speak only as of the date they are made.

今天參加我們電話會議的有首席執行官 Rory J. Cutaia；和首席財務官薩爾曼·汗。在開始之前，我想提醒大家，本次電話會議中的陳述將包括1995 年《私人證券訴訟改革法案》安全港條款下的前瞻性陳述，其中涉及風險和不確定性，可能導致實際結果有所不同重大。前瞻性陳述僅代表其作出之日的情況。

Except as required by law as the underlined facts and circumstances may change, Verb 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.

除非法律要求，因為所強調的事實和情況可能發生變化，Verb Technology Company 不承擔更新這些前瞻性陳述以及公司當前和隨後向 SEC 提交的文件中包含的陳述的義務。

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

我現在想將電話轉給首席執行官 Rory J. Cutaia。羅里？

Thank you, moderator. And thanks to everyone for joining us today for our fourth quarter and full year 2022 financial results and business update conference call. At this moment, we have a number of ongoing initiatives that we're not ready to report on. These include the Board's review and consideration of certain strategic opportunities presented by Alantra, the M&A advisory firm we engaged last fall among other matters.

謝謝主持人。感謝大家今天參加我們的 2022 年第四季度和全年財務業績和業務更新電話會議。目前，我們有許多正在進行的舉措，尚未準備好進行報告。其中包括董事會對 Alantra（我們去年秋天聘請的併購諮詢公司）提出的某些戰略機會的審查和考慮。

I'm advised that to ensure the accuracy of any forward-looking statements, it is best to refrain from any comments at this time.

我建議，為了確保任何前瞻性陳述的準確性，此時最好不要發表任何評論。

As you know, we have another earnings call coming up in about four weeks to discuss the Q1, 2023 results. And it's my hope and expectation that we will be in a position to provide details around some of these activities at that time and respond to questions. Accordingly, I'm going to limit this call to a succinct review of the salient points contained in the Form 10-K filed today.

如您所知，我們將在大約 4 週後召開另一場財報電話會議，討論 2023 年第一季度的業績。我希望並期望我們屆時能夠提供有關其中一些活動的詳細信息並回答問題。因此，我將把這次電話會議限制為對今天提交的表格 10-K 中包含的要點進行簡要審查。

While we are very optimistic that the outlook for 2023, 2022 was a challenging environment for many businesses to operate in. Among our top priorities for 2022, was a drive to profitability. We continue to focus on creating new efficiencies throughout the entire organization, allowing us to implement significant additional cost reductions. These included the elimination of non-essential and high-cost staff, as well as the reduction in cash compensation of our highest paid executives and board members, including myself, and the elimination of 2022 bonuses.

雖然我們對 2023 年的前景非常樂觀，但 2022 年對於許多企業來說都是一個充滿挑戰的運營環境。我們 2022 年的首要任務之一是推動盈利。我們繼續專注於在整個組織中創造新的效率，使我們能夠實現顯著的額外成本削減。其中包括取消非必要和高成本的員工，以及減少包括我在內的最高薪高管和董事會成員的現金薪酬，以及取消 2022 年的獎金。

We slashed research and development expenses by 58% to $5.2 million, as compared to $12.3 million for the year ended December 31, 2021. As our remaining product development work moves rapidly from the research and development stage to deployment stage, we expect our research and development cost reductions to continue through 2023 and beyond.

我們將研發費用削減了58%，至520 萬美元，而截至2021 年12 月31 日的年度為1,230 萬美元。隨著我們剩餘的產品開發工作迅速從研發階段轉向部署階段，我們預計我們的研究和開發費用將持續增長。開發成本的降低將持續到 2023 年及以後。

We've reduced general and administrative expenses associated with our SaaS business by $2.4 million, representing an improvement of 9% year-over-year. We've limited general and administrative expenses for our MARKET.live business to just under $2 million. We've reduced our Utah office expense by more than 60% from approximately $372,000 to approximately $144,000, saving more than $200,000 per annum.

我們將與 SaaS 業務相關的一般和管理費用減少了 240 萬美元，同比增長 9%。我們將 MARKET.live 業務的一般和管理費用限制在不到 200 萬美元。我們將猶他州辦事處費用減少了 60% 以上，從約 372,000 美元減少到約 144,000 美元，每年節省超過 200,000 美元。

With regard to our SaaS business, our primary focus has been on the growth of our recurring subscription revenue. Over the past several years, we have continued to exit and wind down our digital services business based on our determination that we can generate a better ROI by outsourcing the non-digital services business -- that's the printing fulfillment and shipping as it is a low-margin business and costly to scale.

就我們的 SaaS 業務而言，我們的主要關注點是經常性訂閱收入的增長。在過去的幾年裡，我們不斷退出並縮減我們的數字服務業務，因為我們決心通過外包非數字服務業務（即印刷履行和運輸）來產生更好的投資回報率，因為它的成本較低。 - 利潤業務和規模化成本高昂。

For the year ended December 31, 2022, our SaaS recurring subscription revenue was $7.7 million, a 12% increase of $832,000 over the $6.8 million for the year ended December 31, 2021. The increase was driven primarily from the SaaS recurring subscription-based revenue associated with our verbCRM, verbLIVE, verbLEARN and verbPULSE suite of applications and our verbTEAMS platform.

截至2022年12月31日止年度，我們的SaaS經常性訂閱收入為770萬美元，比截至2021年12月31日止年度的680萬美元增長12%，增加832,000美元。這一增長主要來自基於SaaS的經常性訂閱收入與我們的 verbCRM、verbLIVE、verbLEARN 和 verbPULSE 應用程序套件以及 verbTEAMS 平台相關聯。

For the year ended December 31, 2022, non-digital revenue was $1.2 million, representing a planned decrease from the $2.3 million for the year ended December 31, 2021. SaaS recurring revenue as a percentage of total revenue for the year ended December 31, 2022, was 81% up from 65% for the year ended December 31, 2021. Total digital revenue for the year ended December 31, 2022, increased to 88% of total revenue, up from 78% for the year ended December 31, 2021.

截至2022年12月31日止年度，非數字收入為120萬美元，較截至2021年12月31日止年度的230萬美元計劃減少。SaaS經常性收入佔截至12月31日止年度總收入的百分比，截至2022年12月31日止年度的數字收入佔總收入的比例從截至2021年12月31日止年度的65%增加到81%。截至2022年12月31日止年度的數字總收入佔總收入的比例從截至2021年12月31日止年度的78%增加至88% 。

Total cost of revenue for the year ended December 31, 2022, was $3.3 million, representing almost a 27% improvement, compared to the $4.5 million for the year ended December 31, 2021. The improved cost of revenue is attributed primarily to our planned reduction in low margin non-digital services, partially offset by a slight increase in digital cost to support additional enterprise customers on the platform and increased users within our existing customer base.

截至2022年12月31日止年度的總收入成本為330萬美元，與截至2021年12月31日止年度的450萬美元相比，提高了近27%。收入成本的改善主要歸因於我們計劃的削減在低利潤的非數字服務中，部分被數字成本的小幅增加所抵消，以支持平台上的更多企業客戶以及我們現有客戶群中用戶的增加。

We increased our gross margin to 65% at $6.1 million for the year ended December 31, 2022, over the 57% for the year ended December 31, 2021. Our statement of operations for the year ended December 31, 2022, reflects a loss from operations of $38.8 million. However, this sum includes $19 million of non-cash expenses. These non-cash items include $2.5 million in depreciation and amortization expenses, $4.5 million in stock-based compensation, and $12 million in goodwill and intangibles impairment.

我們將截至2022 年12 月31 日止年度的毛利率提高至65%，達到610 萬美元，高於截至2021 年12 月31 日止年度的57%。我們截至2022 年12 月31 日止年度的運營報表反映了營業額為 3880 萬美元。然而，這筆金額包括 1900 萬美元的非現金支出。這些非現金項目包括 250 萬美元的折舊和攤銷費用、450 萬美元的股票薪酬以及 1200 萬美元的商譽和無形資產減值。

The $12 million non-cash impairment loss represents an impairment primarily to the goodwill reflected previously on our balance sheet following the 2019 acquisition of Sound Concepts. This non-cash impairment charge of $12 million was due to the results of the annual impairment testing of goodwill, intangible assets, and other long-lived assets.

1200 萬美元的非現金減值損失主要是 2019 年收購 Sound Concepts 後資產負債表上反映的商譽減值。 1200 萬美元的非現金減值費用是由於商譽、無形資產和其他長期資產的年度減值測試結果造成的。

We ended the year with approximately $2.4 million in cash plus just over $1.6 million in receivables and prepaid expenses. And we added another $6.6 million in cash in January, representing net proceeds of an equity offering of straight common shares with no warrants.

截至年底，我們擁有約 240 萬美元的現金，加上剛剛超過 160 萬美元的應收賬款和預付費用。我們在一月份又增加了 660 萬美元現金，這是不帶認股權證的直接普通股股票發行的淨收益。

With regard to our MARKET.live stream shopping platform, there are certain ongoing initiatives I've referred to earlier that also apply to MARKET.live. So I'm going to defer further discussion around MARKET.live until next month, when we report on Q1, 2023.

關於我們的 MARKET.live 流媒體購物平台，我之前提到的某些正在進行的舉措也適用於 MARKET.live。因此，我將把有關 MARKET.live 的進一步討論推遲到下個月，屆時我們將報告 2023 年第一季度。

Okay. With that, I'll turn it over to Salman.

好的。有了這個，我會把它交給薩爾曼。

Thank you, Rory. And good afternoon, everyone. I'd like to review our financial performance as reported in our Form 10-K filed today, April 17, 2023, for the year ended December 31, 2022. I may provide more color around some of the data points Rory shared with you. The following compares the company's results of operations for fiscal year 2022 with the previous year.

謝謝你，羅里。大家下午好。我想回顧一下我們今天（2023 年4 月17 日）提交的10-K 表格中截至2022 年12 月31 日止年度的財務業績。我可能會圍繞Rory 與您分享的一些數據點提供更多說明。以下是該公司2022財年的經營業績與上一年的比較。

Total SaaS recurring revenue, a component of total digital revenue, was $7.7 million for fiscal year 2022, up 12% or the previous year, and the highest amount of SaaS recurring revenue generated any year in the history of the company. Total digital revenue of approximately $8.3 million up just modestly over the previous year. SaaS recurring revenue as a percentage of total digital revenue was 93% compared with 84% for the previous year.

2022 財年，作為數字總收入組成部分的 SaaS 經常性收入總額為 770 萬美元，比上一年增長 12%，是該公司歷史上任何一年產生的 SaaS 經常性收入最高的一年。數字總收入約為 830 萬美元，比上一年略有增長。 SaaS 經常性收入佔數字總收入的百分比為 93%，而上一年為 84%。

Until we completely phase out 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 is growing, and our non-digital business which we are exiting.

在我們完全淘汰傳統的非數字業務之前，我們的總收入將不會成為我們業績的可靠指標，因為它包括我們正在增長的數字業務和我們正在退出的非數字業務產生的收入。

For example, the non-digital business now represents only 12% of total revenue compared with 22% last year.

例如，非數字業務目前僅佔總收入的 12%，而去年為 22%。

As Rory discussed, we have reduced operational costs dramatically. In establishing our strategy to accelerate profitability and reduce reliance on outside capital, we have implemented a series of specific cost reductions. We cut research and development expenses by 58% to $5.2 million as compared to $12.3 million for the year ended December 31, 2021. We expect our R&D cost reductions to continue through Q2, 2023 and beyond.

正如羅里所討論的，我們極大地降低了運營成本。在製定加速盈利能力和減少對外部資本依賴的戰略時，我們實施了一系列具體的成本削減措施。我們將研發費用削減了 58%，至 520 萬美元，而截至 2021 年 12 月 31 日的年度為 1,230 萬美元。我們預計研發成本的削減將持續到 2023 年第二季度及以後。

We also reduced general and administrative expenses associated with our SaaS business by $2.4 million, representing an improvement of 9% year-over-year. G&A for MARKET.live business were less than $2 million. During the year, we recorded a non-cash impairment charge of $12 million. This loss relates to the goodwill intangibles and long-lived assets from Sound Concepts and SoloFire acquisitions reflected previously on our balance sheets. This non-cash impairment charge of $12 million was due to the results of the annual impairment testing that we conducted during Q4.

我們還減少了與 SaaS 業務相關的一般和管理費用 240 萬美元，同比增長 9%。 MARKET.live 業務的一般管理費用不到 200 萬美元。年內，我們記錄了 1200 萬美元的非現金減值費用。這一損失與之前反映在我們資產負債表上的商譽無形資產以及來自 Sound Concepts 和 SoloFire 收購的長期資產有關。 1200 萬美元的非現金減值費用是由於我們在第四季度進行的年度減值測試的結果造成的。

At December 31, 2022, we have capitalized software development costs of $7.1 million attributed to the development of MARKET.live, which we expect to amortize over a three-year period. During the year, we amortized $0.9 million and had a remaining balance of $6.2 million at December 31, 2022. We are fortunate to be able to access the capital markets and attract high quality institutional investors on better terms than many companies our size, which speaks to the quality of our business plan, execution and our management team.

截至 2022 年 12 月 31 日，我們已將 MARKET.live 開發所產生的 710 萬美元軟件開發成本資本化，預計將在三年內攤銷。年內，我們攤銷了90 萬美元，截至2022 年12 月31 日，餘額為620 萬美元。我們很幸運能夠以比我們規模的許多公司更好的條件進入資本市場並吸引高質量的機構投資者，這說明我們的業務計劃、執行和管理團隊的質量。

Among the financing activities we undertook in 2022 were an $11 million gross proceeds registered direct offering of common shares on April 28, 2022, a $4 million gross proceeds registered direct offering of common shares on October 25, 2022, a $5 million gross proceeds non-convertible promissory note on November 7, 2022, and subsequently, and $7.2 million gross proceeds registered direct offering of common shares on January 24, 2023.

我們在2022 年進行的融資活動包括：2022 年4 月28 日登記直接發行普通股收益1100 萬美元、2022 年10 月25 日登記直接發行普通股收益400 萬美元、非非註冊直接發行收益500 萬美元。於 2022 年 11 月 7 日發行可轉換本票，隨後於 2023 年 1 月 24 日直接發行普通股，募集資金總額為 720 萬美元。

On January 12, 2022, we entered into a $6.3 million above-the-market convertible debt financing with three institutional investors at favorable terms, as well as a supplemental equity line of credit facility for the sale and issuance of up to $50 million inclusive of fees and shares over three years. The HELOC agreement was with Tumim Stone Capital, whose manager and general partner 3i LP had been a long term investor in Verb. On January 26, 2023, the company repaid in full, all outstanding obligations under the January 12, 2022 Note offering and discontinued that HELOC agreement with Tumim Stone Capital.

2022 年 1 月 12 日，我們以優惠條件與三位機構投資者進行了 630 萬美元的高於市場可轉換債務融資，以及用於銷售和發行高達 5000 萬美元的補充股權信貸額度，其中包括三年內的費用和股份。 HELOC 協議是與 Tumim Stone Capital 簽訂的，其經理兼普通合夥人 3i LP 是 Verb 的長期投資者。 2023年1月26日，該公司全額償還了2022年1月12日票據發行項下的所有未償債務，並終止了與Tumim Stone Capital的HELOC協議。

The following compares the company's results of operations for three months ended December 31, 2022, with the three months ended December 31, 2021.

以下是該公司截至2022年12月31日止三個月與截至2021年12月31日止三個月的經營業績比較。

Total sales recurring revenue for the fourth quarter 2022 was just over $1.8 million, which was just slightly under the record breaking fourth quarter of 2021 in what is historically the slowest quarter in direct sales. Total digital revenue was $1.9 million, a decrease of 12% from the same quarter last year. Total non-digital revenue was $0.2 million, down 57% from the same period last year, reflecting the company's strategic decision to continue to wind down its low margin, non-digital services.

2022 年第四季度的總銷售經常性收入略高於 180 萬美元，略低於 2021 年第四季度破紀錄的紀錄，而 2021 年第四季度是歷史上直接銷售最慢的季度。數字總收入為 190 萬美元，比去年同期下降 12%。非數字收入總額為 20 萬美元，比去年同期下降 57%，反映出該公司繼續縮減低利潤非數字服務的戰略決策。

Cost of revenue was $0.8 million, down 29% from the same period last year, reflecting planned cost reductions and improved operational efficiencies.

收入成本為 80 萬美元，比去年同期下降 29%，反映出計劃中的成本削減和運營效率的提高。

R&D expenses were $0.9 million compared with $2.7 million for the same period last year, reflecting a 69% reduction in costs. General and administrative expenses were $4.7 million, a decrease of 18% from the same period last year, and down 33% from the previous quarter.

研發費用為 90 萬美元，而去年同期為 270 萬美元，成本下降了 69%。一般及行政費用為 470 萬美元，較去年同期下降 18%，較上季度下降 33%。

In the MD&A section of our Form 10-K filed today, we provide modified EBITDA as a supplemental measure of our performance. We define modified EBITDA as net income or loss, plus depreciation and amortization expense, share-based compensation expense, impairment loss, interest expense, change in fair value of derivative liability, other income or expense, net debt, extinguishment costs, MARKET.live startup costs, and other non-recurring charges.

在今天提交的 10-K 表格的 MD&A 部分中，我們提供了修改後的 EBITDA 作為我們業績的補充衡量標準。我們將修改後的EBITDA 定義為淨收入或虧損，加上折舊和攤銷費用、股票補償費用、減值損失、利息費用、衍生負債公允價值變動、其他收入或費用、淨債務、清償成本、MARKET .live啟動成本和其他非經常性費用。

However, I am required to note that modified EBITDA is not a recognized measurement under GAAP, and should not be considered as an alternative to net income, income from operations, or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of liquidity.

然而，我需要指出的是，修改後的EBITDA 不是GAAP 認可的衡量標準，並且不應被視為淨收入、運營收入或根據GAAP 得出的​​任何其他績效衡量標準的替代方案，也不應被視為替代經營活動產生的現金流量作為流動性的衡量標準。

In evaluating modified EBITDA, you should be aware that in the future, we may incur expenses that are similar to or different from adjustments in this presentation. Our presentation of modified EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, while many companies calculate and track modified EBITDA, you should be aware that other companies may calculate modified EBITDA in a manner that differs from our calculation.

在評估修改後的 EBITDA 時，您應該意識到，將來我們可能會產生與本演示文稿中的調整類似或不同的費用。我們對修改後的 EBITDA 的表述不應被解釋為我們未來業績將不受異常或非經常性項目影響的推斷。此外，雖然許多公司計算和跟踪修改後的 EBITDA，但您應該意識到其他公司計算修改後 EBITDA 的方式可能與我們的計算方式不同。

Our calculation of modified EBITDA results in modified EBITDA of negative $18.9 million for fiscal year 2022, which represents quite a significant improvement in modified EBITDA of approximately 28% year-over-year. Please refer to the modified EBITDA reconciliation provided in the earnings release, and also in our Form 10-K filed today.

我們對修正後 EBITDA 的計算結果顯示，2022 財年修正後 EBITDA 為負 1,890 萬美元，這意味著修正後 EBITDA 較上年同期有了約 28% 的顯著改善。請參閱收益發布中以及我們今天提交的 10-K 表格中提供的修改後的 EBITDA 調節表。

This concludes the management's presentation. Thank you all. I'd now like to turn the call back to the operator. Operator?

管理層的介紹到此結束。謝謝你們。我現在想將電話轉回給接線員。操作員？

Thank you. This concludes today's call. You may now disconnect. And thank you for your participation.

謝謝。今天的電話會議到此結束。您現在可以斷開連接。並感謝您的參與。