Good afternoon and welcome to the Fourth Quarter 2019 and First Quarter 2020 Financial Results Conference Call from VERB Technology Company, Inc. At this time, all participants are in a listen-only mode. Please be advised, this call is being recorded at the company's request. On our call today are Rory J. Cutaia, CEO; and Jeff Clayborne, 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 involve risks and uncertainties that can cause actual results to differ materially. Forward-looking statements speak only as of the date they are made, except as required by law as the underlying facts and circumstances may change.VERB 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. The company also notes that in addition to these results under Generally Accepted Accounting Principles or GAAP discussed on this call, the company will also present two non-GAAP measures as supplemental measures of its performance: quarterly recurring subscription revenue or QRR; and annual recurring revenue or ARR. Although QRR and ARR are [commonly not] used by companies in the SaaS space, neither is a recognized measurement under GAAP and should not be considered as an alternative to the company's net income, income from operations or any other performance measure derived in accordance with GAAP or as an alternative to cash flow from the company’s activities as a measure of liquidity.I would now like to turn the call over to Rory J. Cutaia, CEO. Rory, you may begin.

Thank you and I thank everyone for joining us today for our fourth quarter 2019 and first quarter 2020 financial results conference call. On today's call, we will bring everyone up-to-date on our progress over the past six months, a time in which the entire world as we know has changed. I'll discuss our response to the COVID-19 crisis, including the plans we implemented to remain productive and effective and the new work-from-home environment we have all found ourselves in seemingly overnight and the steps we took and continue to take to ensure the safety of our teams in California and in Utah. I'll also discuss how the pandemic affected our business and the steps we took to ensure our financial viability beyond the end of the year, when we all hope to emerge from the uncertainty that currently surrounds the world's response to the virus and its devastating effects on the economy.I'll provide some data points and associated insights and perspective into our business and operations during the past two quarters. And Jeff Clayborne, our CFO, will provide a more detailed review of our financial results for these periods. And because we're now halfway through the second quarter of 2020, I'll provide some insight into how this quarter is shaping up. At the end of the earnings call, we'll hold a Q&A session.So for those new to our company, we are a software-as-a-service or SaaS applications platform developer. Our platform is comprised of a suite of sales enablement business software products marketed on a subscription basis. Our applications available in both mobile and desktop versions are offered as a fully integrated suite as well as on a standalone basis and include verbCRM, our Customer Relationship Management application; verbLEARN, our Learning Management System application; and verbLIVE our Live Broadcast Video…

Thank you Rory and good afternoon everyone. I'd like to review our financial performance as reported in our Form-10 K filed on Thursday May 14th for the annual period ending December 31, 2019 and our Form 10-Q filed on May 15th for the quarterly period ending March 31, 2020.I'd like to begin providing the highlights from our annual filing. The following period-over-period comparisons present the company's pro forma results of operations after giving effect to the acquisition of Sound Concepts based on historical financial statements of the company and Sound Concepts. The unaudited pro forma results give effect to the acquisition as if it had occurred on January 1, 2018.Total revenue for 2019 totaled $13.1 million an increase of 3% from $12.8 million report in 2018. Total digital revenue for 2019 totaled $5.3 million, an increase of 42% from $3.7 million reported in 2018. Total SaaS revenue for 2019 totaled $3.6 million an increase of 9% from $3.3 million reported in 2018. Total cost of revenue totaled $7.1 million virtually flat versus $7.2 million reported in 2018, while gross profit for 2019 totaled $6 million an increase of 7% and the $5.6 million reported in 2018.Research and development for 2019 totaled $5 million an increase of 58% from $3.2 million reported in 2018. The increase in research and development is attributed to additional product development and testing to support the integration and combination of the verbCRM platform, the development of verbLIVE, plus enhancements to our core platform to facilitate native integrations with Salesforce, Microsoft, Adobe, and other channel partners.General and administrative expenses for 2019 totaled $15.8 million an increase of 61% from the $9.8 million reported in 2018. The increase to general and administrative expenses is attributed to an increase in labor to support growth, an increase in professional services…

Thank you. At this time we will be conducting a question-and-answer session. [Operator Instructions]. Our first question comes from the line of Brian Kinstlinger with Alliance Global Partners. Please proceed with your question.

Hi guys, thanks so much. And thanks for all the details. The user growth has been super, so like you said 67% since you last spoke I think in November and well more than 100% year-over-year. Can you highlight why digital revenue more or so, actually QRR is growing at a much slower pace? And then talk about when and how you will better monetize that user base and grow somewhat closer to the growth in users that you've got? Thanks.

Thanks, Brian. So look, we -- as we've discussed in prior calls, have implemented a number of new features and functionality designed to increase penetration into our existing clients’ sales reps. Now, that's gone incredibly well for us, as you can see from so many more users that we have now on the platform, but here's how that works. And with respect to why is revenue behind the growth of users. So I know I discussed this in prior calls, when we acquired the business, there were existing client contracts in place, now we've since changed how we charge for the service. But back then, the way it worked is there was a flat fee that corporate paid for the use of the application by their sales reps, and it was kept, so they can have a very large number of their reps on the platform. And as that number of reps grew, the revenue we derived from it was capped.Now, as I said, we've since changed those, although there's still a number of the legacy contracts in place and when they renew, we'll change that. So what's happened when we introduced these new features, the penetration rate into their existing sales reps went up dramatically, but still didn't hit the cap. So you were still getting -- at least from those clients, we're still getting the same revenue, but we have so many more of their reps now using the application.So on the one hand yes, we'd love to see more revenue being generated as a result of so many more users coming on. But here's what's really positive about that. Because now that the user base has grown as dramatically as it has, and I think we're over 1.4 million downloads, that really feeds into one of our…

That leads me into my next question about in-app purchasing. Can you talk about where we are on in-app purchasing? What I mean by that is, can only users access app purchasing -- in-app purchasing or do we need some time before everyone can access it? And then can you provide some early discussions on how it's impacted ARPU for those that can't access it?

So, we've just begun rolling out this program and because each application for each of our large enterprise users is a white labeled application, it’s customized for them. When we roll out these kind of features, we need to do it each client at a time. So, we've got a handful of them now implemented along with some other really cool features like Magic Link and some of the things that we've talked about that enhance penetration. But we have to do that one client at a time. So, we've got a handful of them now. And by -- I would say by third quarter, we should probably have all of them now on the same -- and that -- with the same in-app purchase capability and that store rolled out. So, that's the current schedule.Now, I will tell you this. Behind the scenes, we are building an entirely new platform from the ground up and that will mean several things. First, people that want to have a customized white labeled application won't need to use our services to go ahead and customize it for them. They'll be able to do it themselves online, choosing what features and functionality they like, uploading their logos, completely self service model. That will accelerate revenue generation for us because more people will be interested in doing that, and it will also accelerate revenue recognition for us. Right now, as I mentioned, it could be as much as three months from the time we sign a contract before we can actually recognize that revenue. So, that's going to really make a big difference there. And the other benefit, which goes to your question is, when we roll out a new feature, such as the in-app purchase capability, it will impact every app, every user, all of our clients all at the same time. So, there we won't have that gradual rollout process that we currently have right now. So, that's changed dramatically.

In terms of verbLIVE, we've seen huge demand for Zoom and Microsoft meet. And I guess I think about your balance sheets, yes, you raise money, it's still limited and you don't want to increase losses too quickly. How do you market that -- how do you weigh marketing that and using dollars for that to this piece of technology you have that is highly differentiated and has valuable functions that Zoom and Microsoft meet maybe don't have. So, you're trying -- just how do you market -- how do you weigh in marketing that product with your capital?

Okay, great question. And look, if we just develop that product and that was the first thing we'll go in the market with, yes, it would be tough. You'd have to have a serious cache of money to go and try and market that. But think about what I just talked about with respect to our new in-app purchase capability. We have an existing user base now. These are people that have this -- the device in their hands of now over 1.4 million of these people. Those are the first people that we're going to go to. We've already got 15 of our existing enterprise clients that have signed on for it. So, as soon as we release it commercially, we'll have all of those people, but then all of those individuals verbLIVE will be behind the payroll for all of those people, so that they could put their own credit cards up, if their company hasn't subscribed for it yet for them, they put their own credit cards up and immediately subscribe for it. And marketing to those people is simple. We don't have to spend zillions of dollars with TV commercials to reach those people. It takes us about five minutes to send a notification right to their device notifying them hey check this out, cool new feature, combination of Zoom and Shopify. Think about what that means for your business, people can click right in your live video and buy your products. Yes, a big, big, big differentiator for us is the fact that we already have such a large user base that we can market to.

That's helpful. And then talking about QRR, what's your goal for QRR as you exit the year. As we look at 4Q ‘20 which gives us a picture obviously of what your exit year ARR is, where do you think that can be with all of these changes going on in your business?

Look, I can't give full 2020 guidance just yet and I don't want to imply that that's a bad thing because I think that with the catalysts that I've spoken about in this call and how we've seen Q2 start off, I personally have great expectations about what 2020 is going to look like. But until the products are out there, until we see penetration rates go in the directions that they seem to be going and we have more empirical data upon which we can extrapolate, I'm not yet ready to give you a full 2020 guidance, but just look at the current growth rate. I have every reason to expect worst case scenario that that's going to continue. So that by itself would mean a pretty good year for 2020. But when you add in all the other catalysts that we've spoken about, the in-app purchase capability, the new ecosystem and an App Store capability, Japan, Korea, and verbLIVE and some of those other integrations all happening this year, I feel really, really good why about what this means for our share holders this year.

Two more. The first, your classic COVID question. Can you talk about business development and customer additions in April and early May? How has that trended compared to maybe the first quarter and months before?

Well -- and as we went into January, we had a pretty good pipeline of deals that we expected to -- that would be signed in January and February. And a really great looking pipeline and we know what our success rate is when we submit proposals and get contracts out for signature. But we saw that drop off of it because -- and people were pretty honest with us. That was a time, if you recall, where there was so much fear and uncertainty about what was going to happen. And I remember back then Governor of California was talking about 25 million deaths just in California. So it was a scary time. And people said, look, we really like this, we want to do this, but we're just not prepared to execute the contract right now because we just need to see how things pan out. Okay.So that was then. Look we still signed 11 new accounts in that period of time, which is pretty impressive. But now as we got into -- it's the second quarter in the period of time that you just referenced, boy, I'll tell you everything turned around very, very rapidly. That fear dissipated as I referred to in my talk a little a little bit ago. And now we're off and running because now people have a better sense of what they're facing in terms of their business. And what's even more interesting and obviously rewarding for us is the fact that these people are now recognizing that they need us more than ever in this environment, this whole work-from-home, work remotely. They're not going to the big conferences and conventions that they usually do, where they grow their business. They need this tool. They recognize that on their own.And through a period -- that -- a period that you just mentioned as we got past March and April when a lot of businesses really have suffered and believe me we were very sympathetic about that, we’ve done amazing. And I think that is going to continue as more and more companies, and more and more people begin to realize that this is a tool that will absolutely help them through what is obviously a very difficult period of time for everyone.

Great. And just so Jeff gets a chance to talk a little bit. A couple of things if you could comment on. First how much do you expect the company is going to save on a quarterly basis based on the cuts of salary and other cuts you've made? Is that all on SG&A? And then I didn't write down the share count that you talked about currently because so much has happened. Can you talk about what the share count would be today coupled with the increased shares and when you plan to get them out to your team that will increase I think another 0.5 million or so that you said?

Yes. We mentioned during the earnings release, we expect cost savings to be north of $600,000 related to these cost savings initiatives that we've rolled out. And that's the preliminary phase one is. As far as shares, yes, there's an additional 0.5 million. We have roughly 29 million outstanding. So this will put us over 30 million -- so, we have 29.9 million. So, this will put us probably around 30,400,000-ish, Brian.

Brian, one thing that you didn't ask that I think is important and I didn't allude to it in the prior chat about this stuff. Between fourth quarter and first quarter, we added 26 new enterprise clients and this is a really interesting footnote here. Of the 26 new clients that we added, half of them were not in the direct sales space. So, last year when I talked about we're going to diversify, we are going to expand beyond the direct sales space, we are absolutely doing that. I think the mix of direct sales to non-direct sales clients in fourth quarter, I think it was somewhere around 45% were non-direct sales and I think in first quarter about 55% were non-direct sales type clients. So, obviously that's a massive market and I just want to -- it shows we're going after it, we're on it. So it’s happening.

Actually it brings me to one other question, which we haven't talked about in a while. And I'm not sure given you have so much runway with so many other things and obviously limited resources, what your plans are but maybe talk about your collaboration with some of the big software providers, Salesforce, Microsoft, some of the others? Is that is that kind of secondary now behind the scenes and where it goes, it goes and it would be craved in -- we shouldn't expect much near term or is there any development to speak of on those relationships?

Well, look there's been quite a bit of development on that and I did allude to it in the call earlier, and I've talked about it in the prior calls. Look, there came a point when we needed to determine where are we going to get the biggest bank for our buck in the near-term. Look I view our mission here to create shareholder value and knowing that we are valued on a multiple of revenue, what's going to bring more revenue more rapidly. And certainly verbLIVE was at the top of the list. And look that was a bet that we placed and I think that, that bet has now paid off, I think is going to pay off in a pretty meaningful way. Because at the time, we couldn't predict that everything was going to shift to this big work-from-home and social distancing environment, but it has. So that ended up being a really good thing for us to shift resources to that.Among other things the App Store having third parties to create applications for our platform as opposed to us trying to create ours and put us in others, I think that those will generate far more revenue for us in the near-term than what might be and we just don't know, a slower ramp and adoption of our application as its integrated into those other platforms. Now, look I still think and that I think that those integrations will be very valuable for the company, there's no question about it. But as you said, we've got limited resources, we have to make the choices, which -- where are we going to get the biggest bank for our buck. So, I did put some of those initiatives on the back burner to focus on some of these other things and I think that -- as now we've moved into this phase of the economy, I think that those decisions were absolutely the correct ones. We will do those. I mean we're very far along in some of them and they will happen. But I'm really reluctant to put another date on it and people say you didn't at the day. Yes, we didn’t at the day. It's not because we made a mistake. It was because it was an intentional decision to grow revenue faster.

Our final question comes online of Theodore O'Neill with Litchfield Hills. Please proceed with your question.

Rory, can you give us a little color on what else it needs to be done or what accomplishments you need to hurdle in order to get verbLIVE into production?

There are no -- there aren’t any more hurdles. We are -- it's actually in limited production now. For example, one of the hardest categories hit by this -- by the economic crisis is small business owners, a lot of them are facing bankruptcy and obviously most of them, if not all of them are closed. So what we've begun doing is providing verbLIVE to some of these and they are hosting, verbLIVE webinars where they are -- they provided their -- people from their customer lists that used to come into their stores to go ahead and watch these webinars and purchase product. And I can tell you that we've had more than one call from shop owners crying happy tears about how this has saved their livelihood and their business and what a difference it's made for them. And so we've been doing quite a bit of that. And yes, of course we want to help these people. I'm sure we all want to help anybody we can, right? So that's gone incredibly well, I believe and also it serves as a terrific beta test environment for us where we can identify things that we can improve and features that we should add or maybe features we didn't need after all. So we're refining that literally as we speak and preparing for the much broader global release and commercialization of it, including changes that we need to update the website to create the ability for people to easily go ahead and sign up. So all of those things are happening as we speak. And so it's not that there's -- it's not that it's not ready. Otherwise, it's the onboarding process and those kinds of things and the website updates, which are all coming. I think you're probably starting to see some of that now. So that's about it.

So it's running a beta right now?

Well, it's -- we call it beta testing, but I don't know that I would call it a beta product.

This concludes our question-and-answer portion of today's call. And now I would like to turn the call back over to Rory for any closing remarks.

Well thank you all very much for taking the time to hear us talk about our business. Something that we're incredibly passionate about obviously, and I think our own employees and staff and even our consultants that work with us at VERB have demonstrated now to the world their own passion and commitment for the business with some of them taking even 75% pay cuts in order to help the company preserve cash and take stock in its place. As I think back over the past several quarters and decisions that we've made, they were tough decisions at the time because there's a lot of competing interest, there's a lot of competing thoughts. We try to stay in with our stockholders and speak with them often and we elicit ideas from them as to things that we might do with our existing products and potentially new products, new verticals. So we do our best. But at the end of the day, it comes down to senior leadership between myself and the Board making decisions as to where we're going to go. Sometimes that's not easy and at the time you make them people don't see the merit in those decisions. And sometimes it takes hindsight to appreciate that. And I'm hopeful now that as we've now progressed, we now have four consecutive quarters of growth in our core business, our subscription based business, heading into five consecutive quarters and some of the products that we're releasing as a result of decisions made six, nine or 10 months ago.I'm really proud of what we've done and I really want to acknowledge the support that we’ve received from a lot of our longstanding shareholders. And look, as I've said many times, we're all in this together, we truly are now more than ever, especially through this pandemic. And we never lose sight of the fact that we're here for you and because of you. You've enabled us. And we appreciate the trust that you've placed in us. And we come to work every day, never forgetting that. So thank you all. I look forward to speaking with you again.

This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation and have a wonderful day.