Waste Energy Corp. (WAST) Earnings Call Transcript & Summary

Again, thanks, everyone, for joining today. My name is Scott Gallagher. I'm the President of MetaWorks Platforms. This is our first Shareholder Update Call 2024. Kind of going forward into this year, we're now in a position where we intend to communicate much more with our shareholders. So today's presentation will provide an update of our business results for 2023 and a summary of the first 4 months of 2024 and a little insight on where we plan to go throughout the year. I'll conclude the call today by answering some pre-submitted questions that I received over the last week. And as always, if anybody has any questions that aren't addressed on this call, feel free to reach out to me directly at [email protected]. So with that, to get our legal out of the way, I'd like to remind everybody that this presentation contains forward-looking information, estimates and statements. These statements and estimates are not guarantees of future performance or financial results, and undue reliance on them should not be placed. Future operating results may differ from what is being discussed on this call. The information here is designed to provide shareholders with a business update based on the knowledge and expectations of management and the company as of today, April 18. And as with any investments, please do your own research, including reviewing our website, but more importantly, our public filings that are available at sec.gov. We recently just filed our 10-K, so that's available for everybody now as well. So with that, I want to thank everybody for taking some time out today to review the company. This won't be a long call. Our goal here really is just to kind of kick off communications for 2024. The company has reached a point now where we feel that it makes a lot of sense to start communicating our model with shareholders as we move forward. So I want to start off with a little reset, our kind of overview of 2023 shortly and just kind of review some of the highlights there and then where we're coming in. I've been the President of the company for about 1.5 years. It's been interesting 1.5 years. For us, 2023 was really about kind of resetting the company. Entering 2023, we're coming out of a crypto market that was over $3 trillion in 2022. We started 2023 around $800 billion. You had the FTX collapse and then the lawsuit throughout the entire year. We had the $4 billion settlement with [indiscernible] just tons of regulatory uncertainty. So for us, the focus was cutting our expenses, resizing our business to the market, identifying those areas of the business that we could focus on that we didn't have the regulatory issues and that we felt we could grow the business based on the environment that we were in. I want to start by a couple of things that we did during the year that were relevant to the long-term value of the company. The first is we added throughout the year, just we added 3 or 4 members to our advisory board, but 2 of them I'd like to highlight today because they're very critical to the future success of the company, especially this year. The first one is the -- we added the founder of a company called MetaKeep to our Board. MetaKeep is a company that's created a wallet protocol that has a portfolio of patents around it, that essentially allows us to deliver a hardware quality wallet in the cloud. So we can create a wallet with just a simple email address, obviously name and phone number helps, but just with an email address, we can create a wallet instantly, no friction, no seed phrases. And all that is based on the protocol developed by Naga and the team over at MetaKeep. Naga has successfully written patents, he is the author of patents for Microsoft, IBM, WhatsApp and some others. His partner has a patent portfolio similar to that. And so we consider ourselves very lucky to have access to Naga. He's been very instrumental in our company on building our Web3 platform throughout 2023 that we're now really beginning to move into the monetization side. The second guy I'd like to highlight is a guy named Ken Discipio. Ken joined our advisory board last year as well. He is somebody we had worked with previously. Ken had served in high-level business development positions for more than 20 years with companies like Tavistock Group, Cushman & Wakefield, he's a speaker. He's done over $4.5 billion worth of transactions in this 20-year career. And I think as we begin to move from a technology development company into the revenue generation stage, which is where we are now, I think we'll really start seeing the benefits of someone like Ken's advice to our company as a member of the advisory board. There's a couple of others that are very important as well, but those are 2 that I wanted to highlight on this call that were added during 2023. On the project side, I think there's a couple of projects. Again, I'd like to highlight, there's a few, we just don't have time to highlight them all. But the 2 that stand out for me in 2023 that I want to talk about that I think will be relevant for this year. The first is on the ticketing side. So this -- we'll talk about this a little bit later relative to our technology that we have underlying our Web3 projects. But in May last year, we announced that we were going to create a blockchain-based ticketing platform that essentially would allow customers, which are artists and venues to completely eliminate scalpers, control the secondary markets, put guardrails on those transactions, limit the amount of money that can be charged for a ticket in a secondary market and then drive more of that revenue back to the source, whether it's the artist or the operator. We utilize blockchain NET tokenization of the tickets and digital wallets to build this platform. We're just about completed with it. We've made a lot of progress over the last year, and we will be launching on Polygon within the next month, it's like by June 1 is our target date to launch that. Now that project when we spoke about it last year, was something that we thought would get done a little bit faster. But again, kind of the way that the year has gone in technology, things worked out for us because the platform that we are going to be launching now is substantially better than where we were earlier in 2023. So that's a project that you're going to hear a lot more of in the coming months. The second one is a project called ARK. ARK is really from -- in my opinion, the best use case of Web3 technology that I've seen today that uses blockchain, wallets and tokens to really solve a significant real-world problem. The company is founded by a guy named Jamie Hartman. Jamie is a Grammy-nominated award-winning songwriter. His partner is a screenwriter, also very accomplished. And they came to us with a problem on how you can -- and this is something that Jamie experienced himself, how can you share IP, for instance, a song. How can you write a song, you want to share it with somebody in a safe environment that doesn't get stolen. And Jamie mentioned that songwriters simply will pay a significant amount of insurance to protect themselves against that scenario. What we've done is they contracted with us to create a platform in the form of an app that we could utilize blockchain to tokenize IP, utilize blockchain to provide an immutable receipt for who saw what, when they saw it and how they saw, everything is only viewed within the app and it uses digital wallets built upon the MetaKeep protocol, which are completely decentralized. So when somebody has one of these digital wallets on ARK, if for some reason, ARK is acquired or it went out of business or whatever, you still have your underlying wallet. You have all that IP, it's in your wallet and you have full access. So it's truly decentralized which is kind of the way we look at the decentralization is a little bit different, and it's really related to the wallet because the wallet gives the user total control to pull things off chain to move them around and give them total control, there's no platforms that are in the way of them and their assets. So that's a project that we're very excited about. We finished the beta test -- but we went into beta in the fourth quarter, came out of it, went into some design work with a very accomplished company called Instrument that worked with us on it. And then we are finishing up the platform right now with a schedule for a full commercial launch in June. What that means in MetaWorks is we own 7% of that company. And on a go-forward basis, we feel that between Jamie's very accomplished songwriting career and the connection that he has in that particular space, that ARK will gain traction. It's got quite a bit of funding from very significant players in the market. So that's one of the -- those are the 2 areas, but ARK in particular that we're very excited about going forward that were completed in 2023. So as we enter into 2024, again, anybody has been a shareholder of the company for a while, you'll see that the market has obviously dramatically changed but so has our business. So we entered the year on the heels of a full review that we did of the company's assets to align ourselves with our central goal for 2024. And that is how can we best use technology to solve real problems, control costs and drive revenue using these technologies. So if we just go back to the ARK example I just gave, there you've got technology that's solving a problem. There's -- it's roughly $6,000 a year of insurance. Jamie would pay to try to secure his IP, which wasn't very effective, but protected him with insurance. That goes away. As you control the cost, you solve a problem, and we drive -- you drive recurring revenue in these models, they're subscription based. So we looked at all of our projects and how do they hit those kind of 3 key features of solving problems, controlling costs and driving revenue. We came out of that review, highlighting a couple of areas that I want to talk about for the remainder of the call before I open it up to some of the questions that we took. And the first was Fogdog. You've seen anybody who wants our press in the last month, there's been a press release about us acquiring 11% stake in Fogdog and then also some exclusive rights to markets in the U.S., Florida, Oklahoma, North and South Carolina and also Ireland. Fogdog is essentially a project that we invested $1.2 million back in 2021 with the thinking that this was going to be a crypto mining project, but we invested the money into a company called Fogdog, which is run by our CFO currently, and he's an owner of Fogdog. And when the economics changed for crypto mining with the collapse of the market from $3 trillion and is around $800 billion, it just didn't make sense anymore. So the project really was shelved. When I came on to MetaWorks about 1.5 years ago, I took a look at that asset and thought let's see what that really is. We began to really kind of evaluate the potential of that technology over the last year. And it's really made some significant gains to the point that now we've decided that we've created a path that we think could really lead to the revenue generation here in the fourth quarter. So we made a determination to convert $400,000 of our investment, 11% of the company. We still have an $800,000 investment into the company. We have now the rights to -- we have the rights -- exclusive rights to build and operate projects in those 4 states in the country of Ireland. We're hoping to announce our first project shortly. And when -- again, when we took a look at what Fogdog technology that Fogdog developed is, it's essentially an energy -- it's a waste-to-energy conversion technology that's been tested thoroughly. There's a demo unit that was created with the original investment that has produced -- that has kind of -- has proved the model of mixed municipal waste converting into diesel. We live in a time right now where we -- one of the few things that I think everybody can agree on in the world is that the needs for energy are going to continue to rise, whether it's in the U.S. has moved to electronic vehicles, whether it's AI and blockchain and the massive amounts of energy that are required to fuel those technologies as they become more mainstream and then global warming in general, energy is going to be at the front and center for the foreseeable future. So we believe very strongly in this technology. Again, it's been vetted deeply. We have now a model in place and we believe that this potential initial project we have in terms of where we are today and how this can drive revenue beginning in Q4, could have the ability to dramatically transform our company by cleaning up some of the dirtiest places in the country, which are the municipal waste sites. The core differentiator for this technology is you can convert plastics in the diesel fuel, but you can also convert mixed municipal waste, which is you don't have to sort the waste, the machine converts it into fuel, into graphene and into carbon credits. Just based on our kind of conservative approach to the model, we discount everything else down to 0 other than the energy. So we think that this is something that, again, we've -- the deeper that we got into it, the more excited we were. We are about to place an order for the first machine. Again, hoping to get this first project signed to the point we can announce it shortly. We've developed a plan that this will reach our goal of driving revenue in the fourth quarter. And then we'll be communicating with the investors on a regular basis as we -- our goal would be to immediately sign other projects and scale this business up. So Fogdog will play an important role in 2024 based on monetizing that underlying technology that we invested in back in 2021. The next area that we're focusing on for 2023 is really taking what we've done to date, which is going all the way back to Kodak [indiscernible] music effects, the ability to create a marketplace with a digital wallet [indiscernible] data collection, all these functionalities kind of like e-commerce back in the dot-com era where everything that you do in the NFT marketplace with tokenization needs a place to live online on the blockchain. So the ability to create a marketplace and provide brands and businesses with this infrastructure, the marketplace, a digital wallet, minting engine, data collection payments and all that. We've been able now to take our initial platform that [indiscernible] music effects. And with our partners create -- improve that platform, to the point now where we can take what took us 6 months to build a year or 2 ago, we can build in less than a month now. We've cut the cost from $2,000 to $3,000 under $100,000. We have the ability to do that today. So that is an area that we have just recently really began to market because that's something that can not only help us drive revenue because there's a secondary markets on all these platforms. So there's transaction revenue, there's development revenue, but the ability to build them up and spin them up quickly in 1 month versus 6 months provides the brands and the businesses that are investing in these technologies a shorter path to market, which was one of the big kicks in the last couple of years where the cost was so high to build your own marketplace that by the time you did it, the companies would have $300,000 to $500,000 invested in it and the market had changed so quickly that they didn't have -- they didn't really have the opportunity to monetize. So we've eliminated all those risks. This is fully decentralized. It will run on Polygon. It's EVM compatible. It's got the wallets with the MetaKeep embedded protocol built into the platforms. And that is an area that, again, folds into our last point here, which is AI. AI allows us to massively increase engagement of these type platforms. So where in the past, you had this marketplace [indiscernible] there, the rise of AI from our view, anyway, has really changed a couple of parts. The Metaverse, these marketplaces, having this back and forth engagement and the ability to have correct answers on a 24/7 basis from any device, just dramatically increases the value of these platforms. So for us, going forward, AI will be a huge part of all of these platforms that we provide. We're not specifically targeting -- we're specifically targeting a few categories, but the core platform can be used for almost any e-commerce type platform that wants to run on the blockchain. So the ability to change a couple of markets, meaning education and say mental health are the clearest path because in education you can think of it as having an AI teacher that is always giving the correct answer, that is available to a student that's studying at home 24 hours a day, 7 days a week, any device, any time they want [indiscernible] education, which in today's market, home school is surging, public schools are dropping, the ability to get retained teachers is a huge problem. Our educational system is going through a massive change right now. And I think the collective value of these assets, the marketplaces, wallets, NAI can solve a lot of these problems. And on that note, we signed our first pilot project with a school in New Jersey, which is opening for the fall. So we're working closely with their administration to develop these programs, and we'll have more to -- again, that will really be ramping up this summer as we begin to get closer to the launch. And then again, just -- I'll end with this on the mental health side. Just imagine the mental health epidemic is again an area that's not going to go away anytime soon as this change in technology changes the way people live. That's a huge issue. The statistics are not good at all on mental health. So imagine somebody having an AI that's trained in mental health, that's available to them on their phone. There's a lot of those types of applications today. Some of the things that we're working on are at our base, a little bit more engaging to try to get a person to use them. But the ability for an AI on your phone to help somebody at that moment of need when they really need a trained expert in that space is really one of the use cases that isn't exaggerating when I say it can potentially save lives. What it's going to happen down the road, we leave that to Elon Musk and the rest of those guys to figure that out. But down on our level of the world, saving lives with AI, education and AI are 2 areas that we're really focused on that we think there's a massive opportunity. So again, kind of we're very active in the space in general for the marketplaces. We're on talks with several major brands, celebrities, more schools than the I mentioned, that are all seeking to leverage and monetize this technology as kind of the Web3 technologies mature payments are all built into the platform. So as all these things become more mainstream and kind of harkens back to the dot-com era where you're a year or 2 out, and these businesses really started to catch traction. We see that happening on the commerce side. And at the center of that is the marketplaces and the wallet. So with that, I would like to say that -- again, I just like to thank everybody for joining the call today and taking some time out to listen to us talk about MetaWorks. Thank you for your investment. And now I'm just going to switch over to a couple of the questions that we received. And again, anybody who has any questions from this call or the questions weren't answered, definitely feel free to reach out to me at [email protected].

First one was, do we expect to raise money at the share price? No is the answer. We do not expect to raise money at the share price. Never say never, but that's 100% not our goal. We feel like, again, from a company perspective, were a couple of pieces away from one of these from our view, and it's totally biased, so I'm the President. But we feel like if we can pull off this Fogdog project and get some of these other projects up and running and announced, we feel these are major revenue opportunities that should change. Anyway, the perception that we have in the public markets as we again start to communicate our story a little bit more. We do not have revenue projections. Someone asked about revenue projections and pipelines for '24, '25. I will say this much. So we do have a very robust pipeline of businesses, both in the marketplace side and brands and celebrities are trying to find ways to utilize this technology to monetize. We have a very robust pipeline there. And then on the Fogdog side, there are many opportunities there. If that thing -- once we get the first machine up, that should gain traction quickly because there's a lot of opportunity there to bring on new markets. Somebody asked if Cameron Chell is still with the company. Yes, he is. Cameron's our Founder and our Chairman, has been quiet for a while, kind of again, as we've gone through this review. And we tried to simplify the business so that we're not talking about 100 different things when really at the end of it, it's all the same technology, whether it's how the ARK app is built or how MusicFX is built or some of these new platforms we have, we utilize blockchain, we utilize tokenization and we utilize wallets. And now AI, again, I think anybody who's been around and went through the kind of Metaverse boom, you'd get into some of these rooms and you buzz around and look real cool, but you don't know what you're doing there after 10 minutes. Having AI to now drive engagement and to guide you along and to let you know to connect to the people, that's changed a lot of those environments. So we think that's going to help out dramatically on -- especially on the educational side with the engagement. The current models are -- the statistics that are not very good in the current model relative to attention spans and sitting in front of a computer and looking with static content is not working out too well. Let's see, another question was how the Fogdog -- let's see, there are conflict of interest. There's no conflict of interest. Swapan Kakumanu is our CFO. He's also the President and Founder of Fogdog. That's all disclosed. If anything, that's to our benefit because we have access to Swapan. And I think some of these partnerships, combined with Kim's resources and the strength of that technology and just what we've been able to put together, I think that is -- I think that's to the benefit of the company. I don't look at that as a negative. On the brand side, someone asked about updates on the brands, again, we're going to look at this more going forward as not really focusing on the brands unless it's something significant like ticketing is a specific kind of entire category. But really, we're looking to utilize the underlying technology and then build businesses around there. Ideally, we'll partner with someone or if it's an area that we think we can build on our own. We'll do that. But we're focusing the company more on our technology, our core technology, which is the Web3 technology I talked about on this call and then what's going on with Fogdog. Someone asked about that we haven't been very active in the public market. So that's true. We have not. Again, just because we've gone through this review really since late last year and the market's changed dramatically even in this first 4 months, the crypto market has gone from $1.3 trillion to $2.4 trillion in 4 months. So we think that we're going into a good time. Web3 has moved along at a pretty good flip and it's becoming much more mainstream. So again, I do think that, that opens up opportunities that leads to a very robust pipeline of potential business. And so yes, from our side, we think that now is the time to really begin focusing more on communicating with shareholders. Again, Fogdog is going to be the lead because we see that as a significant opportunity that's measurable. It's very unique in this respect. And I think I'll probably wrap the call up here, and then again, open up for anybody who has any questions, just shoot me an e-mail or call the number on the press releases. It's basically when you think of Fogdog, it's a business that when we place this technology, when we place a location and get up and running, you get the machine on a location, it's up and running and it's generating fuel, the negotiations we're having with these sites are that most of the time, they're either a municipality or there's some need for the underlying fuel. So we've got somebody that will buy it from day 1. So it's not a business where we're creating a technology or we're going out and starting a business. And now we've got to go drive sales or we've got to sell a product. It's not like that. So when we sign these contracts, they will drive revenue that's measurable, provided on what the outputs of the machine are once we get that up and running. So it's a very exciting time in that respect in that by the fourth quarter, provided we're successful in the short term here, we should see some significant revenue coming online. And so we look forward to going into much more detail on that. And again, we're going to be super active in the next couple of months leading up to this. Our goal is to -- in order for us to get this first project up and running and driving revenue in Q4, we've got to get it done in the next month at least signed up in the next month. So should be very active then. Also, we feel that our Web3 pipeline is very strong and hope to have some announcements then. So again, I just want to thank everybody for taking a half hour of your day to spend with us. We will be much more active on the investor side. Look forward to any of your comments that you have and I'll respond to you as quickly as I can. So thanks again for taking time with us today, and enjoy the rest of your day. Thanks.