TON Strategy Co Q4 FY2022 earnings call

• Drive to profitability in 2022 included eliminating non-essential and high-cost staff, reducing executive compensation and bonuses, slashing R&D expenses by 58% to $5.2 million, reducing G&A associated with SaaS by $2.4 million (9% improvement year-over-year), limiting MARKET.live G&A to under $2 million, and reducing Utah office expense by over 60%.
• Focus on growing SaaS recurring subscription revenue, with the suite of applications like verbCRM, verbLIVE, etc., contributing to the increase. Also, exiting non-digital services due to low margins.
• Recorded a non-cash impairment charge of $12 million related to the goodwill from the 2019 acquisition of Sound Concepts.
• Undertaked financing activities in 2022 including $11 million, $4 million, and $7.2 million equity offerings, a $5 million promissory note, and repaid all outstanding obligations under the January 12, 2022 convertible debt in January 2023.

For the year ended December 31, 2022, SaaS recurring subscription revenue was $7.7 million, a 12% increase from $6.8 million in 2021. This represented 81% of total revenue, up from 65% in 2021. Non-digital revenue was $1.2 million in 2022, down from $2.3 million in 2021, accounting for 12% of total revenue (compared to 22% in 2021). Total digital revenue in 2022 was approximately $8.3 million, slightly up from the previous year, with SaaS recurring revenue making up 93% of total digital revenue in 2022 (compared to 84% in 2021). For the fourth quarter ended December 31, 2022, total SaaS recurring revenue was just over $1.8 million, total digital revenue was $1.9 million, and total non-digital revenue was $0.2 million, down 57% from the same period in 2021.

• Expect R&D cost reductions to continue through 2023 and beyond.
• Will provide details around ongoing initiatives at the upcoming Q1, 2023 earnings call.