Datametrex AI Limited's (DTMXF) CEO Marshall Gunter on Q4 2021 Results - Earnings Call Transcript

Datametrex AI Limited (OTCQB:DTMXF) Q4 2021 Earnings Conference Call May 3, 2022 1:00 PM ET

Company Participants

Kristina Colpitts - Director, Marketing & Communications

Marshall Gunter - CEO

Conference Call Participants

Kristina Colpitts

Hi, everyone. Thank you for joining the Datametrex Investor Webinar. We will be getting started in a couple of minutes. We're just waiting for everyone to join on.

I can give a brief introduction of myself before I kick things over to Marshall Gunter, our CEO.

So my name is Kristina, for those who haven't already spoken with me or familiar with what I do. I am the Director of Marketing and Communications here at Datametrex. I also handle Investor Relations for the company.

I will kick things off to Marshall to take it from here. But actually, first I will go over our forward-looking statement, which the lawyers have asked me to do. So all statements included in this webinar that address activities, events, or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. These forward looking statements involve numerous assumptions made by the company based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.

In addition, these statements involve substantial known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections, and other forward-looking statements will provide inaccurate, certain of which are beyond the company's control. Readers should not place undue reliance on forward-looking statements. Except as required by law, the company does not undertake to revise or update these forward-looking statements after the date hereof reflect the occurrence of future unanticipated events.

With all of that being said, I will shift things over to Marshall to take it from here.

Marshall Gunter

All right. Hello, everybody. Welcome back. Glad everybody can be here. This is the Datametrex's 2021 recap webinar. I am Marshall Gunter. I am the CEO of Datametrex AI Limited.

So today we're going to be on here for between 20 and 30 minutes. Try to keep it short to the point and answer as many questions as possible. The agenda today, first, we're going to start with a company overview and then we're going to move on to our financial highlight that we're just announced yesterday. So we'll go over those with everyone. And then a quick look back of what we've done over the last couple of years, and then we'll go into the company outlook. And after that for the time remaining, we'll take up some questions and answers from the field and we'll answer as many as we can. If there's stuff we don't get to then we'll endeavor to answer those in the future through different outlets.

So now that we've gone over that, if we could please, let's give it one more minute it looks like there's still, I'm being told there's still people coming in, so just hang tight one minute. We're going to let everybody get in and then we will get started. So hang tight for a second, everyone just, we're going to give it about 90 more seconds.

Hope everyone's doing well today. We really appreciate you being here. You saw everyone met Kristina earlier. She's new to the team over the past few months, and I hope that everybody is being enjoying her participation in our communications.

All right. One more minute and then we're going to go, because there's still more attendees coming in.

Okay. Well, there are still people coming in, but we're five minutes past starting time.

So let's get started. Let's move on to the company overview. So please advance the slide. Thank you. So we are Datametrex AI Limited. We've been around for about seven years. We are primarily a cybersecurity company that works in artificial intelligence. We have also recently branched out into the Telehealth area through our wholly-owned subsidiary in app Medi-Call. Our cybersecurity business is primarily ran through our wholly-owned subsidiary Nexalogy. You can find those at Medi-Call.c on the web and Nexalogy at nexalogy.com.

Now we have clientele all over the world. Our primary clientele, we work with governments from Canada to the United States. We've been working with the Government of Canada through the DRDC various other programs for five or six years now to build our cybersecurity solution, which is known as NexaSMART. NexaSMART has been deployed in the field for five or six years now, like I said, both with United States military, various different government divisions in the U.S., the DRDC, which is Defence Research here in Canada. We've deployed with NATO and we continue to work with them on various contracts and working groups through NATO and the various government entities we work with.

On the private sector side, we do a lot of work with Samsung. We do a lot of work with Lotte Corporation out of Korea. We've worked with other companies, still do like Ford Motors, et cetera. Our extensive client list can be found on the website, please take a look, datametrex.com.

As far as the diversification in where we are, we are mostly in Canada. We have offices through Montreal, Toronto, and Vancouver. We also have offices in and work in Seoul and Berlin. That is the high thousand kilometer view of Datametrex AI Limited.

So can we please to move on to the next slide? And here we are, 2021, it's been a record year. We're all very happy to be here from last year. So this has been Datametrex best year ever. I would like to congratulate everybody here, congratulations go out to all our stockholders, all our shareholders, the board, the staff everybody that stuck with us we're very happy to show everybody this. We're very happy to report this, and we're superexcited about the results. And I'm just happy to be here, sharing it with you. It's been a long ride and we're successfully ridden this for the last couple years. And well, here we are.

2021 financial highlights. So our revenues up is close to $50 million, all of these are available in the press release that went out yesterday with our financials. Please see datametrex.com if you would like to pull down the entire document. So that's almost 300%. The adjusted EBITDA is up to about $15 million. That's up about 1800% and our earnings last year, about $9 million up about almost 300%. And for the first time we're profitable. So we have a positive cash flow and that is amazing.

So as you can see on the right, it's been a good few years, back in 2019, we had -- we were just starting up, we've moved through 2020 and 2021 and things continue to grow. So we're superexcited about these. We're superexcited to share them with you. Again, if you want the full results, please see datametrex.com and you can download the full results there.

Next slide, please. If we can -- thank you. So this is just a -- one of the -- just a brief look back. So here's where we were. So just a couple years ago, I mean, we were massively in the red. So as you can see here, about 2018, 2019 we refocused the business on our AI, in Nexalogy and that has produced tremendous results. We cut a lot of the fat. We reduced a lot of our spend and we really focused in on what we were doing, right, with Nexalogy, with the artificial intelligence, et cetera. It was a bit of a rebuilding project through 2019 through 2020 and into last year with 2020.

When we focused on the AI, one of the things we did was eliminate all the other distractions. When we did that, we were able to obtain some key contracts in there, with the government entities. Again, with some of the private sector clients, we're talking about Samsung and Lotte, et cetera. And then once we established ourselves in those fields, we were able to build that into positive cash flow and up to the close to $50 million in revenue that we see today in 2021. And as you can see on all these metrics, the revenue is up, the EBITDA is up, our earnings are up and our cash flow is up. So everything's looking good right there.

You'll see a small dip in the net earnings in 2020 we were cleaning up the books some stuff we had to get rid of. But that's all -- it's all done. And so everything looks really rosy, pretty peachy right now. We're excited to share this. Our total assets have gone up by $40 million or so. So this is looking really good. We like it. That's where we came from. Now I think we should move on a little bit, show everybody where we're going.

So here's the company outlook. Where we are and what we're going to do. So one of the things we stated back in 2018/2019 was we were going to take a lot of those profits that we were making and refocus them into the core business. Now, let me explain that. So we have a separate set of business over here with COVID that everybody who's been around Datametrex is pretty familiar with. One of the things, we were asked to do is take our relationships in South Korea and help obtain COVID supplies, et cetera, for Canada and the world. And we've done that. And we've built that into an entirely separate business with our partner company ScreenPro and have successfully serviced many television and film production companies, mining companies, worldwide COVID supplies, et cetera. Now, what we did do is take that money and we're reinvesting it into the AI. And this is what we're doing with it. So we wanted to show everybody that.

Number one, we're diversifying the revenue. We talked about earlier. We doubled down on what we could do that we was working and what we could do that was correct. At this stage, we don't want all our eggs in one basket. We do want to stay focused on the AI. That said, we saw potential in Medi-Call and we saw potential in using some of that and leveraging some of our experience in healthcare and moving into that.

So here's what we're going to do. Number one, we're going to continue the growth in the public sector. We just finished if you're following our releases, our first milestone in a very large contract with the Canadian Government that we're currently working on. That's going to continue. We are looking to expand those contracts and if you've been following, we've expanded those contracts from a few hundred thousands of dollars up into the millions, and we're going to continue to do that. We're going to continue to work with DRDC, the Canadian government entities, the U.S. government entities, NATO, Europe, et cetera and continue that growth, continue the expansion into those and continue taking on those RFPs and contracts that are coming in.

Now, in addition to that, we want to continue the growth and that we have experienced both in the AI market and in the Korean market. Now, one of the nice things about being in the Korean market is it allows us a lot of access to many diverse companies that you may not see over here. So through our efforts over there, we've been able to become a preferred vendor to say Lotte Corporation, which is a multi-billion dollar corporation with many subsidiaries. We use the land and expand strategy there to get our footing. That strategy continues. And we're now in with multiple subsidiaries. We're going to continue that. We're going to continue working with them and continue our expansion in that particular market.

Medi-Call, that's an immediate one. So Medi-Call has been opened up. We have taken some orders. We haven't fully opened the flood gates as we're just working out exactly how we're going to do that. But in the next couple of weeks, keep your ears peeled, because there's going to be a lot of news coming out about Medi-Call. We're going to be expanding, we're moving to new -- we're going to be expanding our geography, we're going to be expanding our coverage et cetera. So there'll be tons of news coming out there.

And additionally, one of the big things that we've got some news coming about, out about, excuse me, is our AI market expansion. And one of the things that we've been alluding to for a while, and we've talked about is corporate acquisitions. We definitively think that in certain cases we can make two plus two equal five. Now we are in the process of looking through several of these. We're making sure that they're good fits and that we can help diversify our revenue model help add to the company's bottom line, generate tons of value for our shareholders and the company. So keep your ears out. There's going to be news coming in about different acquisitions and different things that we are looking at there to continue our AI market expansion.

And the last thing I want to mention about revenue diversification. Some of you guys have probably seen that we took a small contract in the EV market, to see, what we could do. Could we apply some of our AI techniques that have been successfully used by the military or by large corporations, like we said in both here and in foreign markets, what could we do in that space? Well, I'm glad to say that that has been successful and we are going to further explore this market. So this is underway right now. There's nothing material to report at this webinar. There will be. So we are definitively looking at this market very hard. So our initial forays look good, keep your ears peeled. But diversification of revenue is what we want to do and to build those things.

Now, in order to support this, we've done a few things to build the company over the past few months. Some things I want to point out. We're working at Tier 1 status on the TSXV. So that's underway. And we've also reported that we are underway of trying to move to the TSX board. So those, look at our press releases, all those are available on the website. The last thing with those was we had to get these financials out, they're out as of yesterday, and we will be letting you know how these things progress.

As of right now though, to back all this up, we have a super strong client portfolio. And we have a super strong cash position. So we are in really good shape in both of those to continue diversifying the revenue, moving into new markets and continuing these great results. So can we move to the next slide, please?

So Cybersecurity and Nexalogy. So we've got a couple extra minutes left. So I'll just go into a few things in a little bit more detail. We'll go over these just to be very quickly. So I want to show people who are still on, what do these things do for our new investors, here's some things that you may see moving forward, so Cybersecurity, Nexalogy, here we are.

What is it? So next slide please. So Nexalogy, they are a wholly-owned subsidiary that specializes in AI research. We do social media discovery, but we also work in traditional media, anything else that has text, like we work on emails, we work on text messages, so if there's text, we can operate on it. This technology has been deployed by NATO, the DRDC, Canadian Government, and U.S. government for many years, so at least six or seven years now. It's been developed in conjunction with those entities. So this is literally military grade technology. This is the AI that powers everything we do. And what it really allows you to do, we can take the data that most people view as noise and we can refine it. And then you can use that to make decisions faster and easier. And when I say faster, we lower decision making time from eight hours to about 30 seconds. So it's superpowerful.

Moving forward with Nexalogy, please next slide. Now what we're doing there, just to put it, put this in terms of both Nexalogy and Medi-Call not just revenue growth, but in there, we completed our first phase, Canadian government contract. What we're going to be doing over the next six months to a year? As I said, we're going to continue to expand that. But we're not just looking with Canadian contracts and American contracts, we're looking overseas now, we're working with NATO, and we're working with our different partner allies in there to move this forward and continue the growth inside this sector.

The RFPs that we've landed and the contracts that we've landed are great vehicles for doing this. So we're going to build upon that. Our success with Milestone 1 and the overwhelming support we've received from it from the government also helps with this.

And additionally, I mentioned on this, Korea is an excellent market for us. And we're going to continue building on those commercial sales and building strategies there. Next thing for a little more in depth, and then we'll take some questions. We have a few minutes for questions.

So let's go to please next slide, go to Medi-Call for a bit of an overview. So Medi-Call are Telehealth app just everybody that's here. We took this because of our experience in the healthcare sector and our experience in the AI sector, and we kind of combined the two.

And so that's why we are here. We did some initial experiments in this field. And we feel that this is excellent field for us to be in, with our, like I said, the last two years of experience in the COVID field, the health field, and also in the field of Artificial Intelligence in which we have many years, we combine these two, we get Medi-Call. What is it? It's Telehealth and it's in-home health. Okay. So you'll be able to pull it, you can pull it up; you can get access to a doctor almost immediately. And if we have to come out and see you, we're going to be rolling that out in the next couple of weeks. So right now it's still out, it will -- we will definitively be sending people out within the next few weeks in the next stage.

So what does that mean for Medi-Call, please go to the next slide. Well, this is what we're doing. And this is we're not measuring this in days or months and years. This is measured in days and weeks. First things we're doing, we're going to grow our client base and the physician network. This is critical. So we've already started this. And then the next is we will be expanding geographic coverage. So that's the next thing that we're going to be doing.

Yes, so as healthcare is province-to-province, so expect that that's how these expansions will roll up. That's the most likely scenario. As we come into compliance with various jurisdictions, we will roll those out. We will be announcing and incorporating additional features into the app and things that can help move this forward and make it the best Telehealth app. That's out on the market today.

Now, so that's the recap. We've got about seven minutes left on this; I think that's a good time. We're going to go into some Q&A. So I've already got a bunch of a lot of questions up here. So let me pull some of these up. We're going to go through them for the next five to seven minutes. And then I think that's -- we'll do as many as we can.

Question-and-Answer Session

A - Marshall Gunter

So all right. So are there plans for reverse splits, or buybacks at this moment?

The board has spoken about these. They're always a tool in our tool chest. And I know at previous webinars and previous AGMs we have -- we've spoken about that. What we -- we're not, that's not going to happen in the next week or two or something like that. It is something we are considering. If there is, if one of those things comes to fruition shortly, then, you're -- the investors will know post-days. But there is -- it is under consideration. The Board is considering it, no decisions at this moment, okay.

Q1 people are asking about Q1. Q1 will be addressed shortly, like next month or so four to six weeks, something like that. As soon as it's ready, we will do another webinar, most likely. And we'll go through the Q1 results. But right now, I can't announce anything regarding Q1 here. So just numbers aren't out yet. When the numbers are out, there'll be out for everybody to see.

So what's the current headcount, FTE and contractors you said?

I don't have the exact headcount right in front of me. One thing that we can say we've expanded quite a bit in the past six months or so. So the headcount has gone up a lot, as we're moving into these new fields, and as we're taking on larger and larger contracts, in order to be able to service those and produce the results we're producing. We definitely had to add people. We're actually looking; we may add some more right now. So the headcount is going up. For relative size functions, we're much -- we're -- we're still taking the same approach that we took at the beginning. We hire to come up -- to continue with growth. We're not hiring in anticipation of it. Burn rates are good, we're profitable, it's working. But we are definitely expanding.

Next [indiscernible] okay, I already went through Q1. Okay, so let me just recap this. I think there's a few questions coming in about the EV and everything. For the EV market there's nothing material to announce on this webinar, there will be shortly. So look for that, in the next month or two. We will be rolling out news about the EV market in those timeframes. So just hang tight, as soon as we're allowed to release it and it becomes material, we will do that. Q1 results should be in at the end of May.

Shares, shares are to get price right now. I encourage everybody to do their due diligence take advantage of that if you so feel and I'm pretty sure that a whole bunch of us will be. So that's where it is. Yes.

Kristina Colpitts

I just wanted to clarify a quick point if I may. Q1 is actually due end of May. And just --

Marshall Gunter

Yes, so that's what I said, we'll be speaking to that. And as soon as those come out, look at it for the next four to six weeks, somewhere in there. And then that's when we will -- I'll be back on here talking about that.

Okay, so I think that's about all the time we have right here. My clock says 1:29. All right. So I'll answer one more.

And this is one, I always get asked everyone, but I just want to say, what are you most excited about?

Right now, I'm superexcited to be delivering on the things we said we were going to deliver. As we shared earlier this last couple of years, wasn't easy. And but now we've built the company into a position that we can actually do the things that we were talking about. We can expand the AI, we can move into these fields, such as the Telehealth field, we can look at new verticals such as EV, we have the basis to do it, we have the ongoing income to do it. We've proven ourselves in the private sector and in the public sector, at this point, and the results are shown. So that's what's most exciting to me. I love to see the expansion of the company and I love to see the value more generally.

Marshall Gunter

So all right, thank you very much. I believe that's going to do it. Kristina, if you want to wrap things up. I appreciate everybody being here. Have a great week, and thanks for being here with Datametrex. We look forward to your continuing participation.

Kristina Colpitts

Just a big thank you to everyone who joined this webinar. Thank you for your support. We value our shareholders and look forward to communicating with you in the future. Have a great day.

Comments

[SufferinSucotash]

Over three months and nobody is talking about this here? Must be nothing to talk about.