Verb Technology Company Inc (VERB)

[tedpeele]

Truth for newbies, here on IHUB:

The good:

*Creative software that is 'first to market' in the CRM, CRM, EDU, and MED areas as well as for working on major social media platforms, with 2 main claims to fame: low cost interactive video capability, low cost video analytics capability

*digital marketing via video is a growing field

*Possible acquisition of a company with $12m in revenues and a new CRM-like application that is growing via usage by MLM companies

*Some employees, BOD, and advisors with strong backgrounds

*Apparent interest shown by Marketo and Odoo in the features offered.


The bad:

*After being commercially available for 2 years and despite apparent interest by Marketo since April, the interactive videos have generated almost zero sales through Sep 2018, far below initial projections fo $48m for 2017 and $143m for 2018.

*The market cap at 40 cents is about $70 million, far ahead of fundamentals.

*Cash flow alone or with the combined companies is negative, and the most recent funding which is going in large part toward operations has toxic terms.

*A reverse split (filed for and approved) is likely to be needed for the acquisition. Not always bad, but generally not desired.


The unknown:

*The degree to which any of the other large clients are truly interested in either the interactivity or the analytical features, and therefore their committment to selling the product.

*The technical superiority. Despite the '10 million lines' claim, it appears that similar interactive features as well as analytical features are fairly easily duplicated using open source javascript. This threatens the advantage of being first to market. The man hours normally required for 10 million lines far exceeds the known resources NFUSZ has put into the company in the last couple of years, so it is possibly an 'amplified' number

*The amount of the Sound Concepts revenue attributable to the CRM-like app. Few details are known, but it appears that at present only a small minority of their $12m in revs is software that deserves a higher valuation. This may well explain why the company was valued at only $25 million. The upcoming S1-A should help clarify.

IMO