Shaping the SaaM Model

• $89.292M Market Capitalization

VSBLTY Groupe Technologies Corp. (VSBY.C) announced today that its revenue for 2021 was USD$1.6 million, representing a 164% increase over the previous year of USD$607,000. While the Company’s latest revenues, including Q4 2021 revenue of USD$654,000, were disappointing to some, VSBLTY has set itself up for a profitable 2022. Before we get into that, let’s talk about the Company.

“In addition to our quarterly and annual revenue, it is worth noting that SaaS revenue in the form of Annual Recurring Revenue (ARR), which is the annualized SaaS revenue contracted for the rolling 12-month period, was running 211% above our full-year SaaS revenue as of year-end 2021,” said VSBLTY Co-founder & CEO Jay Hutton.

VSBLTY is the world leader in Proactive Digital Display™, which transforms retail and public spaces as well as place-based media networks with Software as a Service-based (SaaS) audience measurement and security software utilizing artificial intelligence (AI) and machine learning. If you’re unfamiliar with the AI and machine learning sector, that probably made about as much sense as ketchup on mashed potatoes, so let me clarify. Conversely, if you’d rather listen than read, check out the video below!

To summarize, VSBLTY’s Proactive Digital Displays take digital displays to the next level. By utilizing AI and machine learning, the Company’s displays can interpret who is viewing, interacting, and engaging with the brands advertised on them. In other words, with VSBLTY’s Proactive Digital Displays, you aren’t just watching an advertisement, the advertisement is watching you. Sounds terrifying, but it’s actually pretty cool, I promise.

Using VSBLTY’s proprietary facial analytics, the Company’s Proactive Digital Displays are able to determine viewer demographic profiles including age, gender, mood state, as well as interactivity, length of engagement, number of impressions, and the percentage of people viewing a sign. In addition to offering interactive signage, VSBLTY’s digital signage also aids in public safety via VSBLTY Vector™.

Put simply, VSBLTY Vector uses computer vision and machine learning to enable object and facial recognition in crowded spaces. In doing so, VSBLTY Vector is capable of detecting persons or objects of interest, such as weapons, at scale in just milliseconds. If a person of interest or weapon is detected, the proper authorities can be alerted in an instant, while necessary security protocols are initiated.

Cool Coolers & Coke

In addition to its digital signage, VSBLTY has made significant investments during 2021 into its Cooler as a Service (CaaS) program. The CaaS program uses patented technology through a strategic partnership with Onyx Glass to expand the Company’s Store as a Medium (SaaM) offering. VSBLTY’s coolers come with 55″ or 65″ screens capable of both transparent and non-transparent dynamic display, paired with interactive digital touch to promote customer engagement.

Additionally, VSBLTY’s coolers feature multi-shelf capacity enabling multiple SKUs to be hosted in a single cooler. In summary, the Company’s coolers utilize transparent display, computer vision, video, and analytics software for use in retail locations globally. Furthermore, the cooler panels can also be retrofitted in existing coolers. In VSBLTY’s latest press release, the Company noted that it had received a sizeable order from a major international brand in December 2021 for its coolers.

This brand has since been revealed to be The Coca-Cola Company (KO.NYSE), representing a significant milestone for VSBLTY’s CaaS program.  In terms of the dollar value associated with this deal, the Company expected an additional USD$400,000 in Q4 2021 revenue, however, due to shipping delays, VSBLTY has stated that it will be unable to recognize this revenue until Q2 of 2022. However, looking forward, VSBLTY expects considerably more business from Coca-Cola.

2021 Earnings Highlights

VSBLTY’s SaaS revenue, in the form of Annual Recurring Revenue (ARR), was 211% higher compared to the Company’s SaaS revenue as of year-end 2021. As for VSBLTY’s 2021 balance sheet, the Company reported a year-end cash balance of $USD4.9 million. While Mr. Hutton has stated that he will not be providing guidance for Q1 2022, he has stated that he expects VSBLTY’s revenue to double every quarter.

Quarterly Revenue (Q4 2020 to Q4 2021)

• Q4 2020 – USD$34,000
• Q1 2021 – USD$130,000
• Q2 2021 – USD$293,000
• Q3 2021 – USD$523,000
• Q4 2021 – USD$654,000

Looking at the Company’s quarterly performance, doubling revenue every quarter seems like a stretch, however, Mr. Hutton claims that this is a “conservative” estimate. With this in mind, VSBLTY must be expecting significant gains in 2022. The Company’s latest order from Coca-Cola makes me think that this ambitious goal isn’t so crazy after all. It is worth noting that, starting in Q2 2022, VSBLTY will also receive monthly recurring SaaM fees at scale from Winkel Media.

Let me explain. VSBLTY is a founding member of Winkel Media, a Latin America-based in-store technology company. To provide some background, on May 3, 2022, VSBLTY announced a monthly SaaS agreement with Winkel to begin the phase one installation of Golden Record throughout Winkel’s convenience store media network. The recent addition of the Golden Record SaaS revenue will begin to have an impact on VSBLTY’s revenue from Winkel starting in Q2 2022.

This is expected to more than double the existing SaaS revenue per store in the network and add at least 25% to the value of each store. So, what is Golden Record? According to the Company, Golden Record uses free guest WiFi in stores to improve the experience of customers and customize the messages they receive to inform, influence, and motivate individuals to make impulse purchases. Overall, VSBLTY has signed a multi-year contract with Winkel to build the SaaM program throughout South America.

Getting back to the numbers at hand, VSBLTY has provided a $USD600,000 million bridge loan to Winkel as of December 31, 2021, which the Company anticipates will be repaid by 2023. In total, VSBLTY had an accounts receivable balance of USD$1.4 million at the close of 2021. Furthermore, as a result of VSBLTY’s ongoing investments in R&D and the commercialization of its Computer Vision technology, the Company had an operating loss of USD$8.2 million.

Other Highlights

• completed most of the development effort needed to transition from Edge technology to Linux
• participated in a security program in Mexico resulting in a 40% reduction in crime in some of the most dangerous communities in Mexico City
• partnership with 911 Inform to ingrate software capable of alerting security and 911 Call Centers to lock down schools and buildings under a real-time attack by a person of interest carrying an open weapon

Putting a lid on this article, while VSBLTY’s financials may not have met the expectation of investors, the Company appears to have several revenue streams poised for growth in 2022. Referring back to VSBLTY’s multi-year contract with Winkel, when completed, VSBLTY will have a 50,000-store media network in 30 Latin American countries. Furthermore, the Company expects to realize revenues from Smart City, Homeowners Association, and other groups that are in need of security solutions.

VSBLTY’s share price opened at $0.50 today, down from a previous close of $0.51. The Company’s shares were down -8.82% and were trading at $0.465 as of 2:17 PM EST.