Verb Technology Company Inc (VERB)

[tedpeele]

I have received permission to share a recent excellent correspondence with our CEO with IHUB shareholders:

Hi Ted,

Thank you for your interest in bBooth. This type of investor feedback is very much appreciated as we need to be aware of the ‘pulse’ of the market and of our investors in particular at all times. As I’m sure you can appreciate, we strive to remain well within the bounds of SEC rules and regulations, including the selective disclosure rules, and that makes communicating in this manner somewhat restrictive. However, within those parameters I will do my best to respond to each of your questions below. Please understand that those questions for which I have not provided a direct response, potentially require a response that could run afoul of the selective disclosure rules. Hopefully, as we continue to release news, the answers to those questions will become clear.



1. While I was not familiar with “Virtual Girl”, I am familiar with other companies utilizing “green screen’ rendered images to produce an effect that is similar in appearance to our “walk-out” style videos. But that’s where the similarity ends. What we’ve done is to take that “effect” and build it into a scalable SAAS platform, allowing subscribers to not just view the images, like ‘Virtual Girl’, but also to send them. In addition, our technology is interactive, allowing recipients to click on the image, or other images placed within the video, to produce not only a much more engaging experience, but much greater utility as well. The Admin console component of our platform gives our clients the ability to actually add the interactive elements themselves – not only to the walk-out style videos – but to ANY video. Yes – the platform allows clients to send ANY type of file to the screens of their recipients and create interactive elements in them – i.e., audio files, photos, graphics, documents, traditional videos, and our “walk-out style videos. Examples of the interactive capabilities include the onscreen person collecting information from the recipient/viewer such as medical history, buying preferences, surveys, among other things. For example, a high school teacher could utilize the technology to interact with students, providing extra-help or testing; or a physician asking for current patient information done in a secure, HIPAA compliant manner.

On Amazon, just as an example, PRIME members could receive walk-out style videos providing a more in-depth look at a product the viewer was looking at on Amazon and then allow the viewer to click on it for more information or to make an impulse buy. In another example, imagine a music streaming service that could provide its subscribers with a walk-out onto their screen of the artist they were just listening to who could offer the listener a sneak peek at their upcoming music video drop, or the new line of sneakers they are introducing, or tickets to their upcoming concert in the listener’s hometown (with built-in geo-tracking capability). In addition, the on-screen person could suggest that you look at something on a particular webpage and then without the viewer having to do anything, the on-screen person could actually open your browser and take you to the page they want you to see and remain there to explain what they want to show you there or to encourage you to make a purchase. One of the truly remarkable features is our ability to PUSH content directly to the screens of subscribers, without that subscriber having to open an application, or open a browser – literally – without them having to do anything. And if they are not on their computer when the walk-out is sent, a notice is provided on the system tray icon indicating that a walk-out message is waiting – which will play on a click. All of this capability is provided to our clients to manage themselves. So rather just being able to ‘view’ a video as in the ‘Virtual Girl’ example, you could interact with it and also SEND those types of videos to others. I’m really only providing you with a small percentage of the capabilities of the platform, which is available on desktop (MAC and Windows), mobile (IOS and Android), as well as web based apps. As you can see just from these examples, we believe bNotifi is several generations ahead of anything else in its category. There are also numerous features and functionality coming that I am unable to share yet that are incredible. One last, but very important point is that we are NOT simply developing an app and crossing our fingers and hoping we get people to download it. Rather, we’re deploying our technology INSIDE other platforms with huge existing subscriber and/or user bases. Think about (as an example only) companies like FACEBOOK adopting the technology, which is then installed automatically on every Facebook users’ computer and mobile device next time they install the latest update to the Facebook app. Think about the lucrative interactive and PUSH capabilities Facebook and its advertisers would have.



2-5. The Matrix Group falls into our Network Marketing Co/Direct Sales Co bus dev silo. The network marketing silo represents a compelling business opportunity for us for a number of reasons. First, because our platform solves some of the biggest problems faced by network marketers (attrition, recruitment, compliance), it represents a real value for them. Moreover, the pricing model is FREE for the companies themselves. Instead, each independent distributor/representative/sales person or whatever they call themselves, pays a modest fee of between $4 - $19 per month charged directly to their individual credit cards. These are people, for the most part, who have committed to buying and selling an amount the network marketing company’s product each month - that could be anywhere from $50 to $250 per month. An additional $5 per month is an easy number for these people to absorb for a sales tool that allows them to send interactive walk-out style videos (provided by the company and approved by compliance) to customers, prospects, and potential new recruits for their own downline. I have not seen a more powerful tool for lead generation and I’ve see many. How much Salesforce.com charge per user?

Many of the network marketing companies have active distributors that number in the hundreds of thousands to millions. You can do the math. $5 a month of high margin RECURRING revenue from these distributors produces enormous value. The projections we provided represents a percentage of the network marketing companies’ distributors that we already have in our sales pipeline today – heavily discounted. Those numbers do not include what we expect to add to our pipeline the remainder of this year through 2019 and beyond. Nor does it adequately take into consideration the results expected from our other bus dev silos which I have not discussed here. The reason – the numbers already looked so large, we were concerned about putting out larger numbers. Frankly, I didn’t want to put out ANY numbers and just let our performance speak for itself. However, our IR firm insisted that we provide some guidance so we did so.

The Matrix Group and their affiliated independent representatives are part of a much larger, well-known network marketing company, whose name we were not able to mention in our press release. And on that particular deal, the representatives are not required to use our platform, but are encouraged to do so. Other companies that we’re working with will require every distributor to use the platform. As to Matrix, we expect a high percentage to adopt it, especially as the ease of use and effectiveness is communicated internally. We also expect that as more and more reps adopt the platform, the parent company will adopt it. In other cases, we’re working directly with the parent company.

As to the decision to release the news on Friday, there are 2 schools of thought and we decided to experiment as we’ve got much more news coming out and this will help us determine the best days to release it. Friday’s in the summer are dead. But after Labor Day, people are working on Fridays and less news is released – so we thought ours might stand out more. Whether our news has had that effect remains to be determined. What I do know is that the universe of people paying attention to bBooth news - no matter how widely distributed - is still small. We recognize that the challenge for IR is not to simply distribute our news – but to do so in innovative ways – reaching investors who have a demonstrated interest in companies like ours. I believe that the IR firm we recently retained has a methodology that once launched, will be effective for us. That launch is still at least 2 weeks away as it takes time to do a proper job. Again, whether it is effective remains to be determined, but if it doesn’t generate the interest we expect, we’ll try something else. There are a number of IR firms that want to represent us.

Volume has picked up, in fact I think it has doubled in recent months, but it remains thin. There’s only 18M shares in the float and most large holders are not sellers as they see the value creation potential of our technology and they, like me, believe that the value of the company is not reflected in the current price of the stock. As our IR initiatives are executed, and many more buyers come into the market for us, we expect to see that change in a positive way.

As to your reference to “OTC world” and “OTC market” companies, I have never viewed bBooth as an “OTC” company and still don’t. Rather, I see this as the first rung in a ladder we’ve just begun to climb aggressively leading to the type of shareholder value creation and recognition this company and its shareholders deserve. And my team and I show up committed to that result every day.

Again Ted, I thank you for your interest, completely aligned with my own. Feel free to reach out anytime.

Best,

Rory



Rory J. Cutaia | Founder, Chairman & CEO




From: (Ted) xxxxx
To: investors <[e-mail]>
Subject: investor concern



Hi,


I"m a shareholder and I have several concerns/comments:



1. Someone on the IHUB stock board asked about 'virtual girl' - saying it looks like the same or similar technology and has been around already for years. I have to agree. Can you clarify how your technology differs? Here's a link: https://www.youtube.com/watch?v=hJ6pnUUPpDY


2. The market reaction to the MatrixGroup announcement was ok, but not very good overall, so far. This was, I believe, for the following reasons:



A. First and foremost, the release gave no indication as to how many of the 890,000 distributors have signed up or are expected to sign up. 'Potential' signups doesn't impress the market as we have little guidance on actual expected revenues from this agreement. Does BBooth have something solid re that?



B. Despite having 890,000 distributors, their Twitter account has only 76 followers, and their FB about 6,000 with fairly infrequent postings. This is unusual and I would think unexpected of a marketing firm, and therefore makes the 890,000 number suspicious. I've never heard of this group. Plus their website has a number of items that seem like they should be clickable but nothing happens when clicked. Can you address the credibility of this company and the number of claimed distributors in a way that is reassuring?



C. The release was done on a Friday. It is well known in the OTC world that Friday is a 'slow' day and not the day in which news gets much notice.



3. The recent projections stated in the 8k are truly phenomenal. However, the OTC market is used to seeing 'crazy big' projections that are by fraudulent companies, so it takes credibility and verification to sometimes create confidence within this end of the market. Assuming - as I do from my research - that the company is confident they can reach the large projections, I then would assume that the reason the company is confident is because there are solid agreements that place a very high likelihood on the number of signups/affiliate commissions, etc.. in order to makes such projections. As such, it strikes me as odd that the first PR discussing potential revenues left the question as being so ambiguous. I would have expected a more 'solid' PR that would help create the confidence needed in this end of the market.



4. The IR group recently hired has not had very good success with other penny stocks. Was this considered in the hiring process and if so why should investors not consider their history with penny stock promotion as a reliable indicator of how well they will promote BBTH?



5. There seems to be persistent selling, even though volume is not very large. Some of my concerns about this are mentioned in the next paragraph.



I am looking forward to a big IR push soon in conjunction with announcements that strongly support the recent projections. The stock can move many multiples higher if/when that takes place. But at the same time, this end of the market is subject to a lot of manipulation and negativity by people that may be shorting the stock for profit, or wanting to buy in at a lower price. It can sometimes greatly hurt the stock price. Sometimes (I believe) market makers are behind such efforts so they - having greater visibility on trading action - often succeed in the face of uncertainty. This is part of the reason I am writing to you - these kinds of issues mentioned above can affect the price.



I wish nothing but success for Bbooth, and hope you can shed some light on some of these issues that concern me and other shareholders.