VERB Technology Company, Inc. (NASDAQ: VERB)
(“VERB
” or the “Company”), a leader in
business-focused interactive video sales and marketing applications
and the pioneer of Augmented Sales Intelligence software, today
reported its financial results for the first quarter ended March
31, 2019. The Company is also reporting its unaudited, pro forma,
consolidated financial results for the first quarter ended March
31, 2019.
On April 11, 2019, VERB closed the acquisition of Utah-based
Sound Concepts, a leading provider of sales and marketing tools and
digital technology solutions in the direct sales and affiliate
marketing sector. Because the closing of the Sound Concepts
acquisition fell on April 11, 2019, subsequent to the end of the
quarter, and because a majority of the Company’s revenue in first
quarter 2019 is related to business units that were integrated with
Sound Concepts, management has opted to provide the additional
financial information in this release and in a separate Form 8-K/A
which the Company will file in order to provide a more complete
picture of the Company’s combined financial performance during the
quarter ended March 31, 2019. While VERB’s stand-alone financial
results can be found in the recently filed Form 10-Q, revenue
generated by the combined sales teams from VERB and Sound Concepts,
selling services on the combined platform, was only accounted for
in Sound Concepts’ unaudited profit and loss statement of
operations.
VERB and Sound Concepts Consolidated, Unaudited, Pro
Forma, Income Statement as of March 31, 2019:
- Combined revenue totaled $4 million, an increase of 44.5%, as
compared to $2.8 million for the same period of the year prior, and
a 40% increase over previous quarter.
- Combined cost of revenue totaled $2.2 million, an increase of
68.8%, as compared to $1.3 million for the same period of the year
prior.
- Combined gross profit totaled $1.8 million, an increase of
22.6%, as compared to $1.5 million for the same period of the year
prior.
- The balance sheet, on a proforma basis, as of March 31, 2019
cash totaled $2.5 million. Total assets were $30.5 million, total
liabilities were $8.9 million and total stockholders’ equity was
$21.6 million.
VERB and Sound Concepts Consolidated, Unaudited, Pro
Forma, Balance Sheet as of March 31, 2019:
- Cash of $2.5 million
- Total assets of $30.5 million
- Total liabilities of $8.9 million
- Total shareholders’ equity of $21.6 million
Subsequent to March 31, 2019, the Company closed its previously
announced underwritten public offering providing the Company gross
proceeds of approximately $20.5 million before deducting
underwriting discounts and commissions and other estimated offering
expenses payable by the Company.
On April 11, 2019, VERB closed its previously announced
acquisition of Sound Concepts for $25.0 million of value, payable
through a combination of $15.0 million in cash, and the issuance of
an aggregate of 3.2 million restricted shares of VERB common stock,
with a fair market value at closing of $10.0 million. The cash
payment was paid using a portion of the net proceeds that VERB
received in its underwritten public offering.
At the closing of VERB’s underwritten public offering, the Sound
Concepts shareholders purchased an aggregate of $4.0 million of the
public offering units at the same price and upon the same terms and
conditions as all of the other investors who purchased units in the
public offering, such that the net cash outlay by VERB in
connection with the Sound Concepts acquisition was approximately
$11.0 million not $15.0 million.
As of today, VERB has 22,309,788 shares of common stock issued
and outstanding, which includes the shares issued to the
institutional investors in the underwritten public offering, as
well as the shares issued to the former Sound Concepts principals
as part of the acquisition consideration.
Of the total number of common shares issued and outstanding,
approximately 8.2 million are owned or controlled by insiders,
which equals 37%. Of that amount, Rory J. Cutaia, VERB’s CEO, owns
approximately 3.3 million shares or 15% of the outstanding
shares.
Additionally, VERB’s new institutional investors own 4.7 million
shares or 21%. Accordingly, approximately 58% of VERB shares are
owned or controlled by insiders, including the former Sound
Concepts principals, and new institutional investors.
“2019 has thus far been the most transformative period in our
Company’s history, during which we successfully completed a $20.5
million underwritten public offering with participation from over
40 institutional investors, closed the acquisition of Sound
Concepts, and completed our NASDAQ listing,” stated Rory J. Cutaia,
VERB CEO. “And now we are pleased to report consolidated revenue
growth for the first quarter 2019 of 44.5% over first quarter 2018.
But I’m most proud of our 40% growth of digital revenue over Q4
2018, because this represents the results of our respective teams’
work to combine our platform with that of Sound Concepts while
integrating the tech, sales, and marketing teams who continued to
drive sales while we simultaneously managed a lengthy,
all-consuming public offering road show and NASDAQ listing. The
synergies, cross-client marketing opportunities and growth we
expect our newly consolidated Company to achieve is only beginning.
Today, VERB has emerged as a much larger company with over 100
employees, a stronger balance sheet, year-over-year and
quarter-over-quarter revenue growth, and after only one quarter, an
annual revenue run rate of over $16 million.”
Conference Call and Webcast InformationThe
Company will host a conference call and webcast with the investment
community on Wednesday, May 15th at 4:30 pm Eastern Time featuring
remarks by Rory Cutaia, Founder, President, CEO and Chairman of the
Board, as well as Jeff Clayborne, CFO.
Live Call: |
Toll Free:
1-877-407-4018International: 1-201-689-8471 |
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Webcast: |
http://public.viavid.com/index.php?id=134280 |
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Replay:
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Toll Free:
1-844-512-2921International: 1-412-317-6671Conference ID:
13690169(Available approximately two hours after the completion of
the live call until 11:59 pm ET on May 29, 2019) |
About VERBVERB Technology Company, Inc. is
rapidly emerging as the market leader in sales and marketing
applications utilizing its proprietary interactive video data
collection and analysis technology. Following its successful
acquisition of Utah-based Sound Concepts, the leading provider of
digital tech-based marketing and customer relationship management
applications for the direct sales, network marketing and affiliate
marketing industries, the newly combined company provides
next-generation customer relationship management (“CRM”), lead
generation, and video marketing software applications under the
brand name TAGG. The Company’s proprietary and patent-pending
technology produces real-time, measurable results with customers
reporting greater than 600% increases in conversion rates. The
Company’s software-as-a-service (SaaS) products are cloud-based,
accessible on all mobile and desktop devices, and are available by
subscription for individual and enterprise users. The Company’s
technology is integrated into popular ERP, CRM, and marketing
platforms, including Oracle NetSuite, Adobe Marketo, and
integrations into Salesforce.com, Odoo, and Microsoft, among others
are underway. To create and ‘tagg’ your own videos that you can
share and post to social, try taggLITE, available for FREE
on our website.
For more information, please visit:
www.myverb.com.
Cautionary Note on Forward-Looking
StatementsThis press release may contain “forward-looking”
information within the meaning of the Private Securities Litigation
Reform Act of 1995. In accordance with the safe harbor provisions
of this Act, statements contained herein that look forward in time
that include everything other than historical information, involve
risks and uncertainties that may affect the Company’s actual
results. There can be no assurance that such statements will prove
to be accurate and there are a number of important factors that
could cause actual results to differ materially from those
expressed in any forward-looking statements made by the Company,
including, but not limited to, plans and objectives of management
for future operations or products, the market acceptance or future
success of our products, and our future financial performance. The
Company cautions that these forward-looking statements are further
qualified by other factors including, but not limited to, those set
forth in the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2018, and other filings with the U.S.
Securities and Exchange Commission (available at www.sec.gov). The
Company undertakes no obligation to publicly update or revise any
statements in this release, whether as a result of new information,
future events, or otherwise.
Cautionary Note on Pro Forma Financial
StatementsThe unaudited summary pro forma financial
information contained in this press release gives effect to the
Company’s acquisition of Sound Concepts, Inc., using the
acquisition method of accounting for business combinations with the
Company identified as the acquirer, and is based on the respective
current and historical unaudited condensed financial statements of
the Company and Sound Concepts for the periods referenced herein.
This unaudited summary pro forma financial information is for
illustrative purposes only and is not necessarily indicative of the
operating results that would have been achieved if the acquisition
had been completed at the beginning of the periods referenced
herein, nor does it purport to project the results of operations of
the combined entities for any future period or as of any future
date. This unaudited summary pro forma financial information may
not be useful in predicting the results of operations of the
combined entities in the future. The actual results of operations
may differ significantly from the unaudited summary pro forma
financial information provided herein.
Contact Please address media inquiries to:
info@myverb.com855.250.2300, extension 7
Please address investor inquiries to:
investors@myverb.com855.250.2300, extension 2
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Verb & Sound Concepts Combined Results |
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For the Three Months
Ended |
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Change |
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March 31, 2019 |
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March 31, 2018 |
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$ |
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% |
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(Unaudited) |
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(Unaudited) |
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Net Sales |
$ |
4,001,000 |
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$ |
2,768,000 |
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1,233,000 |
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45% |
Cost of revenue |
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2,218,000 |
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1,314,000 |
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904,000 |
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69% |
Gross margin |
$ |
1,783,000 |
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$ |
1,454,000 |
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329,000 |
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23% |
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Verb & Sound Concepts Combined Results |
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For the Three Months
Ended |
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Change |
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March 31, 2019 |
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December 31, 2018 |
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$ |
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% |
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(Unaudited) |
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(Unaudited) |
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Digital Sales |
$ |
1,069,000 |
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$ |
766,000 |
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303,000 |
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40% |
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