Good afternoon. And welcome to the Third Quarter 2021 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 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 provision 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 as the underlying 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. I would now like to turn the call over to Rory J. Cutaia, CEO. Rory?

Thank you and thanks to everyone for joining us today for our third quarter 2021 financial results and business update conference call. So let me begin by welcoming so many new shareholders, individuals, institutions and family offices that have recently become our shareholders. And of course, a special welcome to our long-term shareholders, so many of whom have been with us for years and with whom we’ve shared this amazing journey from a scrappy pre-revenue startup with a big dream and vision for the future of Verb Technology to where we are today, a well respected, NASDAQ listed, socially conscious company at the forefront of the technology driving the biggest shift in consumer buying behavior since Amazon began selling more than books, and yeah, we’re still scrappy. We fondly refer to all of you as the longs. And for all of you longs, I am about to share some information with you, that’s going to make your day. But for those of you who’ve taken a short sighted approach to Verb investing, well, you might want to tune out now as your day is about to take a turn for the worse. So let me start with the headline. We’ve had a record breaking quarter and our digital revenue is up 30% this quarter over last. In fact, it’s been an amazing quarter for us across several metrics, which Jeff will cover later in the call. And with the upcoming launch of Marketplace and verbTV, among other things, which I will talk about today. We believe 2022 and beyond will drive revenue two levels beyond that which even the most optimistic among you project, representing a value creation opportunity every heart beat. Anyone who has followed me or our company over the past several years knows that we have been…

Thank you, Rory, and good afternoon, everyone. I’d like to review our financial performance as reported in our Form 10-Q filed today, November 15th, the quarterly period ending September 30, 2021. I may reiterate and/or provide more color on some of the data points, Rory, shared with you. The following represents a company’s results of operations for Q3 2021, as contrasted with Q3 2020 and Q2 2021, respectively. Total digital revenue of approximately $2.4 million was up 20% over the same period last year and up over 30% we reported in Q2 2021. Total SaaS recurring revenue, a component of total digital revenue was $1.8 million, up 25% over the same period last year and 15% over Q2 2021. Total other digital revenue, a component of total digital revenue was $510,000, up 42% over the same period last year and 144% over Q2 2021. SaaS recurring revenue as a percentage of total digital revenue was 78%, compared with 80% for the same period last year and down over the 88% we reported in Q2 2021. The decrease in our SaaS digital mix this quarter is actually an extremely welcomed development, as it is attributed to a record breaking sales quarter in which we executed 16 new client contracts, representing an aggregate of $1.1 million in minimum contract value, a new record for our company. New SaaS contracts typically also produce an increase of non-SaaS digital revenue, such as digital design fees that we are committed to recommend, as the work is completed quickly after the execution of new client contracts during the quarter. As such, the digital design work associated with all new Q3 contracts generated increased our non-SaaS digital revenue, which produced an increase in net revenue as a percentage of total digital revenue. As I just mentioned, we…

Our first question is from Brian Kinstlinger of Alliance Global Partners. Please go ahead.

Hi, guys. Thanks for taking my questions. I got a -- get a handful.

Sure.

And just -- hey, Rory. And going into the details around the Marketplace, maybe you can share with us, really from a high level range of royalty rates from partner sales, maybe how many brands are signed up and how will customers or consumers become aware of the site?

As I mentioned in the -- in my prepared comments a few moments ago, some of the things we’ve got planned revolve around these, what I call it mega events. And mega events are some events that we’re trying to get as many done before the end of the year as possible, we’ve had to shift sort of at the last minute because of these ridiculous supply chain issues where we have retailers who were in and then they were afraid they couldn’t keep up with the sales, they thought that would be generated through these kinds of events and because they just didn’t have enough inventory to accommodate it, and especially now as we’re going into the holiday season. So we’ve now shifted to, as I said, sort of digital products. NFT is a big focus among some other things. And we will announce that as we get closer to actually doing it and making sure that there’s sufficient inventory of whatever it is to accommodate. Those mega events could generate fairly meaningful revenue for us. In fact, even from a couple of those, we could -- based on our modeling, we could be looking at more revenue from those events than we did the entire quarter. So we’re pretty excited about that. And as a result of what that means for Marketplace as we move forward, I can give you some of the information that we’re looking at based upon feedback that we’re seeing from some of the vendors that we’re working with. As it relates to the SaaS component, certain vendors will pay a recurring fee to have premium placement to on a particular time slot in a particular location and that kind of thing. And then as it relates to the revenue we would derive from…

Yes. It does. You only have six, six or so weeks left in the quarter, it sounds like you’re going to try to run a few mega event this year, will you press lease those to all of the shareholders and we can become consumers on that and get to watch it live?

Oh!. Yes. Oh! Absolutely. Are you kidding, this is the whole purpose of doing it. We want as many people to see this, because I think when they do. Look, I think people are going to be blown away. I mean extremely smart knowledgeable people in the industry that we’ve showed it to, it was job dropping from, which makes us feel good, huge validation and don’t forget, this is not something that we just cooked up. We’ve been working on this for years. And we had a sort of a beta version of it that was running for now going on nine months, maybe 10 months, where we had somewhere north of 40 retailers actively on it. We kept that very quiet because it was a feedback loop, a learning loop for our developers and the teams on it, product people. So, yes, we’re really, really excited about it, and I don’t want to leave out verbTV, which is its own thing, that also has enormous opportunity for us in value creation. So anyway, I hope that answers your question.

Yes. If I just -- I mean, you mentioned the contribution next year could contribute beyond even the most bullish estimates. So maybe as we look to 2022, is that assume -- should I -- should we think about this being the top revenue contributor of all your products, maybe just put some of that into context because that’s a pretty wide open statement?

Yes. I know it is. And I can tell you this, it is absolutely our intention that it is substantially greater than everything else that we’ve done up to this date. Now as you see, we’ve had nice growth in our existing business, really nice growth, and we anticipate that we’re going to continue to grow our other verticals. And what I think this places us in a completely different realm, and I think realm is really the only way to describe it. This is -- this is a big, big play, and we know that, and we take it super seriously, and I think we’ve got the right people involved, who as excited about it as we are to make it happen.

Great. Moving to verbLIVE, can you quantify -- there’s a lot of numbers, I am not sure I’ve heard it, how many enterprises, as well as monthly active paying users you have at the end of September? How does this compare to June? And then in addition, what are those numbers in terms of enterprises signed up yet not part of installation or part of what we saw in the third quarter revenue for verbLIVE?

So we’ve got a ton of enterprises that have signed on looking for to get verbLIVE launched. And I will tell you, we’ve got several hundred thousand users, and that’s on a global basis for verbLIVE and what we did which is something that we didn’t do as well in the past. But as it relates to verbLIVE and certainly on the things that we’re doing going forward, we have created really an amazing very comprehensive detailed user feedback loop to really understand exactly what people are doing with the application, what they’re not doing, what they want, and what’s come out of that is a couple of features that I call the new baseline features that people want. As an example, they want the ability to record their live sessions, the current platform doesn’t accommodate that. So that’s in motion will -- and hopefully will be delivered soon. They also wanted the ability to have not just one host, not just one presenter, they wanted the ability to have dual presenters. So that was also not something that we built into the original version. And some of the -- and there’s a handful of others, and many of these are really unique to the direct sales space, which right now still represents our largest revenue stream, and we want to make sure that we’re paying very close attention to those people because there’s so many users out there that provides us with extraordinary data and information that allows us to improve the product. So we’re moving as rapidly as we can, obviously, on parallel tracks with a number of different initiatives to get those things done because a lot of them are waiting for those features to go live before they launch. So that’s all coming.

Okay. And in terms of when you win an enterprise or are you getting an enterprise to move forward and not necessarily every user is required or paid for, what’s the adoption rate by employees or sales folks in an enterprise where they have to opt in?

More recently, what we see is corporate, really, really now embracing this livestream shopping model, and obviously, the pandemic has had a lot to do with that. So many of them, and I am going to even say perhaps most of them are now making it a requirement where all of the -- all of the sales field gets verbLIVE. So it’s a little different than how it was a originated recently , and obviously, a fantastic development for us.

Great. Lastly, touching on Microsoft and the mail option, how many freemium users have signed up? What’s going on with the Microsoft Sell program? And then lastly, how do you plan to market the premium version of this e-mail tool, especially if get into the Microsoft Sell program?

Okay. So let me start with the latter part of your question as it relates to the premium version and which -- for Outlook and we will also see a similar version coming out for Google’s Gmail. And I still think this cost just happens before the end of the year, I feel pretty confident about it. The enterprise version, the premium version, what we’ve done is we’ve built already an internal sales group dedicated to the enterprise sale. So -- and believe it or not, that is not all that difficult to sale because the market already exists. And when I say the market already exists, what I am talking about is, is the massively high percentage of large enterprise that are subscribers to Microsoft’s products, and in particular, Office 365. So the marketing strategy for this new group, and these are real pros is simple. They’re going out to companies that they know only have a Microsoft subscription and offering for an additional monthly fee, the ability to introduce a really killer sales tool and communication tool to their monthly package. So we think that’s a pretty solid and easy sale based upon some preliminary marketing initiatives around that. So, and of course, that product has the kind of features that we believe people will be willing to pay for. So we’ve developed not just the -- an internal sales group around it, but we’ve brought on a number of outside and affiliates that will be moving on that and developed its own pretty substantial marketing budget to accommodate that. So we really -- we feel really good about what kind of adoption we will see. Also, as I sort of touched on briefly in my comments, I think that as we’re bringing a lot of vendors on…

Actually, I am going to squeeze one last one in, it goes back to the Marketplace, on royalties, I know the margin profile of subscription in general, but what’s the margin profile of royalty dollars, is there any costs, is it all incremental, how do we think about every dollar of royalty from sales on your Marketplace that you will get?

Yes. I am not -- we -- I am not calling it royalty, I don’t know, maybe royalty is the right term. We’re looking at that...

Right. Right.

Yes. It’s a revenue share, Brian, and so we will be taking the percentage of the gross sales, and as I said before, it will range from 5% up to 15% depending upon the product and the margin associated with it.

No. Right. I am asking what’s the -- what’s the margin, if you recognize $1 of revenue or $100 of revenue, what’s your gross profit on the revenue...

Oh! My growth. Oh! Our growth. Oh! Okay. Understood. Yes. Well, look, that’s -- once the platform is built and launched, it’s -- that’s basically a sum cost, margins are extremely high on that for us. I would say there is high or higher than our existing margins, which as you know are 80% thereabout. So that’s going to be -- that’s going to be a great business for us.

Great. Thanks for taking all of my questions.

Always, of course. Thank you.

The next question is from Ed Woo of Ascendiant Capital. Please go ahead.

Yes. Thank you for taking my questions and congratulations. My question is on the Marketplace when you launch, will it be initially focused on the U.S. or is it focused globally as well?

We’re contemplating that it will be global.

Great. And then the other question I have is you mentioned because of the inventory shortages, you’re going to move to more digital products. Is that something that’s a lot more difficult to do or is it really just plug and play, does it matter what type of product you sell, whether it’s physical or digital or do you still have to do a lot of tweaks to the platform?

No. No. I think maybe I wasn’t as clear as I would like to have been on that issue. So the vendors coming on to the platform, they are gearing up their own inventory needs, getting ready for launch and taking into consideration, of course, whatever the then existing supply chain issues might be. What I was referring to before is that in order to promote and create awareness and sort of kick off Marketplace, we at Verb, we’re going to use the platform to host what I refer to as mega events and I am -- I will share this now. We were intending to launch a giant event with a giant influencer in a very big market, selling specific category of products on Black Friday, and we’re really so excited about it and anticipated a fairly meaningful piece of revenue to put on our P&L of the fourth quarter. And just recently, they -- the supplier of the products had to pull out because they realized that they’re not going to be able to get the product to support it that they’re still trying to make sure they can meet the needs of the retail stores that they’re selling into during the holiday season. So that caused us to step back and reevaluate the kind of events that we want to do, again, for promoting the platform, and we decided we would shift to digital products for these mega promotion events, so that we’re not going to find ourselves in the same position where a vendor or a supplier can’t meet the demand, which would be -- which would obviously be horrible. It’s not the experience we want to provide. So that’s where the focus on NFTs came from, and the platform supports all of that very, very easily already.

Great. Well, thanks for answering my questions. Very excited about it, and I am looking forward to the launch. Thank you.

Thank you. Appreciate it.

The next question is from Martin Saltzman of AFM Investments Inc. Please go ahead.

Hi, Rory. Great job on the quarter, as usual, you guys are knocking it out of the park, great job.

Thank you. Thank you very much.

I wanted to know if you could just reflect a little bit on why the U.S. markets were so slow compared to the Chinese in developing this interactive shopping experience, why were they so far ahead, what did they see that we didn’t see?

I am not sure that I can answer that with any kind of certainty around it. I have my own theories around it. I think that the Chinese market had begun just moving in that direction before we did. Look, we’ve been on the front-lines of this movement towards video first being, as I referred to it in my comments, table stakes in any sales and marketing initiative. And then the add on the corollary to that was, okay, well, let’s make that video clickable and shoppable, and we did that. And we were out there promoting that kind of technology years ago and having a hard time getting traction, people just didn’t get it, they didn’t understand it, we were a bit early. And I will tell you, I feel good about what we’ve done as a company because others might have just said okay, the market is not ready for it, let’s go do something else and sell ice cream. But what we did is we stuck to it and tried our best to project out what would come next. And what we saw was that, yes, eventually, interactive video will be adopted. First, video in sales and marketing would be adopted. And soon after that, we saw all social media sites finally adopt video. So that took some time. It was only a couple of years ago, we didn’t have any video on social media sites. If you think about it, and then it was interactive video, of course, we were at the forefront of it. And then what we envisioned as we continue to try to look forward is what’s next and that was taking that same interactive video capability that clickable buy capability and putting that, developing that into live broadcast, and hence all the…

Got it. Thank you for that explanation. I wanted to ask you, do you feel that you have enough manpower when you launch Marketplace to be able to handle the demands that will be on your company?

Yes. Yes. We do. Yes. I feel very confident saying that. I did allude to in my prepared comments earlier that I expect to be able to announce an acquisition in the coming weeks, and while I unfortunately can’t provide a lot of details around that now, when I do announce that, you will understand why I feel so confident in giving you that answer.

Say no more, I think I understand. Marketplace as a name just sounds extremely generic. Is there a move of foot to try to come up with a name that might be or might have more cache, are you doing branding or working with a branding group or are you just going to retain the name Marketplace?

We’ve been working with branding groups and doing all of the things that you do when you’re trying to come up with the appropriate name for it. And at some point, when we have some time to have some fun and sit back, we will kick around some of the names that have come up because some of them are historical. But, I mean, crazy. But Marketplace just seems to be right. So that doesn’t mean it’s not going to change before we complete this thing because obviously, we’ve got to put the name on everything now as we come into these next last weeks. But I think that it’s something everyone can relate to it because it’s a global Marketplace with different products, different languages, different cultures, there’s so many other things they’re are going to be part of this. It will truly be a global community tying people together from all over the world and it just seems right to me. But again, we are super open-minded, and if something better comes up, you will hear about it.

So last question I have is pertaining to the users like Microsoft, and as you said Gmail is around the corner, are there other providers of e-mail services that are sniffing around and looking at having this ability to use your verbLIVE and that in their services?

Well, Martin, as you know, I am really not at liberty to share the sniffs, you know what I mean, I just -- I can’t do that. And so I hope to reveal the sniffs in the -- in coming weeks and months, but I can’t reveal the sniffs right now. Sorry about that.

Yes. It just totally feel -- it just strikes me -- just strikes me odd that if Microsoft Outlook finds it good enough to use and now Google Gmail seems like they’re on the cusp, you would think the two of the bigger ones out there, you would have the other ones also wanting to get in the game. So I am hoping for that. But I want to just thank you for the queue, and I am really looking forward to the upcoming fourth quarter completion, especially December because we’re not that far away and it’s very exciting times.

Thank you very much for your questions. I appreciate it. Thanks for your interest and happy to have you as a shareholder. Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Rory Cutaia for closing remarks.

Well, first, thank you to all of our shareholders. Thank you to the longs. Thank you for your confidence and your trust in us. We take that very, very seriously. And as I mentioned in my earlier remarks, what’s happening now is truly the culmination of everything that we work so hard on, everything that we’ve learned. And now seeing how the market has changed and our vision for a truly global marketplace that’s video based, seeing all of that being validated is extremely, extremely rewarding for us. I do want to just take a moment and acknowledge my team because I couldn’t even get out of bed. It wasn’t from my team. They are just an extraordinary group of talented people. And given the scope and scale of this new opportunity and road forward, we’re fortunate that we’re attracting some amazing talent, amazing talent that will make sure that we’ve got the horsepower to drive this really big, big play that we feel really, really good and confident about. So thank you all for today. Appreciate the questions and know that we are here on it and not stopping. We make it happen. Appreciate it.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.