TON Strategy Co Q4 FY2021 earnings call

• SaaS business growth: Recurring revenue has grown double digits annually since launch, with SaaS recurring revenue at 84% of total digital revenue in 2021. Low-margin non-digital business reduced by 32% in 2021.
• Product developments: VerbLIVE 2.0 in development for direct sales, expected commercial release summer 2022; life sciences vertical seeing increased opportunities with verbMAIL Pro; professional sports unit launched with announcements of sports teams.
• Operational efficiencies: Plan to reduce annualized operating costs by up to $8.5 million. Embracing work-from-home policy and downsizing offices.
• Market platform: Soft launch ongoing, onboarding vendors, training them, building host team; aiming for mid-summer festivals; focusing on verifying and qualifying sellers.
• ESG initiatives: Recognized by NASDAQ as a leader among small and micro-cap companies in ESG implementation.

SaaS business: SaaS recurring revenue was $6.8 million in 2021, up 34% over 2020. Total digital revenue was $8.2 million, up 26% over 2020. SaaS recurring revenue represented 84% of total digital revenue in 2021, up from 79% in 2020. Total revenue in 2021 was $10.5 million, up 6% over 2020. Fourth quarter 2021: Total digital revenue up 45% over 2020, SaaS recurring revenue up 47% over 2020, with SaaS recurring revenue in Q4 exceeding $1.9 million, a new record.

• Anticipate meaningful revenue growth outside of Market from direct sales vertical, life sciences, and sports vertical.
• VerbLIVE 2.0 expected to drive increased recurring revenue.
• Market is expected to be a major value creator for shareholders.
• Planned acquisition still on track; other business opportunities and new talent to be disclosed.

• Market launch timing concerns from investors leading to share price volatility.
• Supply chain issues affecting vendor inventory for Market events.
• Uncertain market conditions impacting capital markets and share price.

Q: Previously, on the launch of Verb Marketplace, you mentioned there were some supply chain issues with some of your retailers. Has that improved at all since the last quarter?

A: Yes. We are now qualifying vendors closely, verifying inventory to ensure they can meet requirements, and scheduling events far enough out to guarantee inventory availability.

Q: Martin Saltzman asked about Market opening timing and new hires. Is it possible that you could have Market open prior to mid-summer on a smaller scale? And are there other new hires being considered?

A: It's possible to have smaller events before mid-summer festivals if they can be executed thoughtfully. We have identified a bunch of new hires and will make announcements regarding them.