Verb Exchange Inc.

Verb Exchange Inc.

November 21, 2008 18:53 ET

Verb Exchange Inc. Announces Third Quarter Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 21, 2008) - Verb Exchange Inc. (TSX VENTURE:VEI) -

Announcement highlights:

- Revenue increases 18% quarter over quarter

- Successful commercial launch of Tabrio™ service

- New carrier services customer growth exceeding expectations

Verb Exchange Inc. ("the Company" or "Verb Exchange"), a leader in digital media, announces that it has released and filed its interim financial statements for the third quarter ended September 30, 2008.

Overall, revenue for the third quarter of 2008 increased compared to 2007, bringing nine month revenues to $17,659,025. As well, the $187,423 gross profit for the third quarter of 2008 is higher by $127,699 when compared to the gross profit of $59,724 for 2007. Year-to-date gross margins have increased by $389,853 to $591,535 from $201,682 for the same period of the previous year. As a percentage of sales, year-to-date gross margins also increased to 3% as compared to 1% for 2007.

As the Company concentrates its efforts on its new digital media service offering Tabrio™, and on expansion of sales in its carrier services division, Eurotel, Verb Exchange overall revenue and gross margins continue to increase without increasing general and administrative expenses at the same rate. Revenue of $7,109,392 for the quarter represents an 18% increase over Q2 2008 revenues of $6,054,000. Further detail is included in the quarterly results section of the current MD&A.

Comparative figures for interim and annual revenues, net loss and loss per share are as follows (all figures in Canadian dollars and Canadian GAAP):

3 months 3 months 9 months 9 months year
ended ended ended ended ended
Sept 30, Sept 30, Sept 30, Sept 30, Dec 31,
2008 2007 2008 2007 2007
(unaudited) (unaudited) (unaudited) (unaudited) (audited)
$(000) $(000) $(000) $(000) $(000)
Revenue $7,109 $6,165 $17,659 $17,014 $23,462
Cost of Sales $6,922 $6,105 $17,067 $16,812 $23,175
Gross Margin $ 187 $ 60 $ 592 $ 202 $ 287
Expenses $1,286 $ 362 $ 2,641 $ 1,146 $ 1,828
Other Income - - 6 - -
Net Income (loss) ($1,097) ($ 302) ($ 2,043) ($ 945) ($ 1,541)
Total Assets $2,048 $1,831 $ 2,048 $ 1,831 $ 2,069
Total Liabilities $ 425 $ 411 $ 425 $ 411 $ 450
Weighted Average
Shares Outstanding 63,064 32,820 60,285 31,590 37,549

Net Income (loss)
per share ($ 0.02) ($ 0.01) ($ 0.03) ($ 0.03) ($ 0.04)

Outlook Statement:

With our new retail subscriber service offering, Tabrio™, now being commercially available, we are continuing with ongoing developments to further refine its ease of use and utility to our end users. During the quarter we initiated several marketing campaigns in order to determine the most effective and cost efficient distribution method for Tabrio™. Based on the results obtained through Tabrio's proprietary analytics, we are now refining our channels for not only cost effectiveness, but also for targeting the higher yield users. We are focusing on areas where Tabrio™ has 'grown virally'; where the rates of uptake continue to climb without further marketing efforts, thereby reducing our cost of acquisition and building loyalty.

We continue to grow both revenues and margins in our Eurotel subsidiary. With the hiring of a new VP for carrier services, we have acquired contracts with several new customers in both new and existing markets and are in the process of connecting and testing circuits with them. These efforts are already yielding results in the current quarter, with further positive results expected in the coming year.

In light of the current economic turmoil we are emphasizing the fact that Tabrio™ is a cost saving service for both consumers and businesses. As a high quality communications application that provides users with significant cost savings, we anticipate that advertisers will recognize the value of sponsoring a useful and fun service. We expect 2009 to be a period of continual growth in subscribers, revenue, and partnerships.

Verb CEO, Craig Goldenberger, commented, "We have built a sustainable business and are well positioned for further growth and the execution of our business model. The successful financing of the Company in October provides us with adequate capital to support this growth in the coming year, but with the difficult economic climate, we are taking measures to streamline our operating costs and preserve capital. In addition to changes in our marketing and development departments, Donald Cameron is no longer providing Chief Financial Officer services under our Accounting Services arrangement, where existing staff is well qualified to fulfill our requirements."


Mobile media is among the fastest growing sectors in the digital media space today. Unlike any other service of its kind, Tabrio™ allows users to voice call and text globally from anywhere they choose. Tabrio™ does it all at steeply discounted prices. With crystal-clear quality for international calling and global text messaging, our contact management allows users to easily access contacts from any computer or mobile phone anywhere on the planet.

For advertisers, proprietary analytics technologies precisely target users with relevant ads based on detailed geographic, demographic and psychographic profiles. For more information please visit:


Verb Exchange Inc. (TSX VENTURE:VEI) is redefining mobile and online digital media communications. Global users can use our low-cost high-quality communications platforms on their desktop, web and/or mobile phones. In 2007, Verb Exchange was recognized as Canada's #1 technology company by Backbone Magazine, and by Business In Vancouver as first on its list of the 'Top 100 Fastest Growing Companies in BC'. For more information, see:

Statements included in this announcement, including statements concerning our plans, intentions and expectations, which are not historical in nature are intended to be, and are hereby identified as, "forward-looking statements" for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words including "anticipates", "believes", "intends", "estimates", "expects" and similar expressions. The company cautions readers that forward-looking statements, including without limitation those relating to the Company's future operations and business prospects, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.

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