Good afternoon, welcome to the Kubient, Inc. and Adomni Inc. conference call announcing that the two companies have entered into a definitive merger agreement. Joining us for today's call are Kubient's Founder, Chairman, Chief Executive Officer, Paul Roberts, and Adomni's Chief Executive Officer, Jonathan Gudai. Before we get started, it is important to note that this call is factual in nature, contains forward-looking information, both as defined in Rule 168 under the Securities Act of 1933 as amended, and does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor solicitation of any vote or approval with respect to the proposed transaction or otherwise.
No offer of securities shall be made except by the means of a prospectus meeting of the requirements of Section 10 of the Securities Act of 1933 as amended and otherwise in accordance with applicable law. I also need to alert you of our safe harbor statements under the Securities Litigation Reform Act of 1995. During this call, we'll be making forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, included but not limited to, express or implied statements regarding the structure, timing, and completion of the proposed merger described further in the definitive merger agreement and the combined company's listing on the Nasdaq Capital Market after closing of the proposed merger.
Expectations regarding the ownership structure of the combined company, the expected executive officers and directors of the combined company, each company's and the combined company's expected cash position at the closing of the proposed merger and cash runway of the combined company, the future operations of the combined company, the nature, strategy and focus of the combined company, the location of the combined company's corporate headquarters, and other statements that are not historical fact. All statements other than statements of historical fact made during this call are forward-looking statements. These forward-looking statements are made as of the date they were first issued and were based on the then current expectations, estimates, forecasts, and projections, as well as the beliefs and assumptions of management. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Kubient's control.
Kubient's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors included but not limited to the risk that the conditions to the closing of the proposed merger are not satisfied, including the failure to timely obtain shareholder approval for the transaction, if at all. Uncertainties as to the timing of the consummation of the proposed merger and the ability of each Kubient and Adomni to consummate the proposed merger. Risks related to Kubient's ability to manage its operating expenses and its expenses associated with proposed merger pending closing. Risks related to the failure or delay in obtaining required approvals from any governmental or quasi-governmental entity necessary to consummate the proposed merger.
The risks that, as a result of adjustments to the exchange ratio, Kubient shareholders and Adomni stockholders could own more or less of the combined company than is currently anticipated. Risks related to the market price of Kubient's stock relative to the exchange ratio. Unexpected costs, charges or expenses resulting from the transaction. Potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed merger. The uncertainties associated with Adomni's platform and technologies. Risks related to the inability to the combined company to obtain sufficient additional capital to continue the advance Adomni's platform and technologies, and risks associated with the possible failure to realize certain anticipated benefits of the proposed merger, including with respect to future financial and operating results, among others.
Actual results of the timing and events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties. These and other risks and uncertainties are more forcefully described in Kubient's periodic filings with the SEC, including the factors described in the section titled Risk Factors in Kubient's registration statement on Form S-1 filed with the SEC on December 21st, 2020, and in other filings that Kubient makes that would make the SEC in connection with the proposed merger, including the relevant materials that Kubient will file with the United States Securities and Exchange Commission, the SEC, in connection with the proposed merger, including a registration statement on Form S-4 that will contain a proxy statement and prospectus.
This call is not a substitute for the Form S-4, the proxy statement, or for any other document that Kubient may file with the SEC and/or send to Kubient stockholders in connection with the proposed merger transaction. Furthermore, listeners should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties, and other factors which are in some cases beyond our control and which could and likely will materially affect actual results, levels of activities, performance or achievements. Any forward-looking statement reflects our current views with respect to the future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth, strategy, and liquidity. These statements are subject to known and unknown risks, uncertainties and assumptions that could cause actual results to differ materially from those projected or implied during the call.
We qualify all of our forward-looking statements by these cautionary statements. Also note that the forward-looking statements on this call are based on information available to us as of today's date. Except as required by law, we assume no obligation to publicly update or revise these forward-looking statements for any reason or to update the reason actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. I would now like to turn the call over to Paul Roberts. Sir, please proceed.
Thanks operator, and thanks to everyone who has joined us today. What began in Q1 of 2022 was a project for Kubient to not only aggressively pursue opportunities in the M&A market, but also to strategically position the company in a technological and financial position to capitalize on what we perceived as increasingly favorable acquisition-related market conditions. During this time, Kubient successfully maintained existing business operations, added and grew existing technological capabilities, achieved patent protection on our KAI solution, and maintained stability in the face of daunting macroeconomic headwinds, including that of a temporarily stuck ad spend environment. Vital corporate initiatives such as decreasing quarter-over-quarter cash burn, protecting existing assets, decreasing exposure to certain international markets, pulling back on non-essential positions, maintaining existing partnerships, and winning new partnerships has allowed Kubient to remain flexible and open to opportunities for inorganic growth.
The fruits of our labor are before us, and I'm excited to announce our entrance into a definitive merger agreement with Adomni Inc. In the process of finding Adomni, our board of directors and management had clear ideals and criteria for any future union with a third party organization. These included, but were not limited to, a company parallel or adjacent to our efforts of improving the ad tech market, a company with the capability and willingness to continue unlocking our Audience Cloud and KAI technologies, and a quality management team with a clear vision for the future market capture. Our search included vetting companies larger and smaller than Kubient, and we came across a number of unique opportunities that we ultimately felt did not properly fit the bill like Adomni.
We were unwavering in our initiatives to ensure that our current and future shareholders would be better off as a result of our efforts. We're pleased to bring this new offering to market. Without stealing too much thunder from Adomni's Co-founder and CEO, Jonathan Gudai, from who you'll hear in a minute, I'll provide a very high-level overview of Adomni to introduce the company. Adomni is a programmatic digital out-of-home global enterprise that hosts a proprietary platform that easily connects brands with on-the-go customers via real-world digital screens. With a slate of tier one customers and partners, they work directly with advertisers and audience owners to deliver results with ROI-centric KPIs on both the demand and supply side of the advertising equation. The merging of these two organizations has a myriad of complementary business features.
Throughout the call, we'll cover company synergies, future roles for existing officers and employees, as well as go-forward strategies with Adomni as part of a public company. We want to remain transparent throughout this process and hope this call is both wholly informative and celebratory. With that, I'm happy and excited to hand this call over to Jonathan, who will provide additional color on Adomni and their interest in pursuing a transaction with Kubient. Jonathan?
Thanks, Paul. Good afternoon, everyone. Thank you for joining our call. I couldn't be more thrilled to present to you today and dive into the impending acquisition of Adomni by Kubient. Our entire team is very excited about this deal as we see significant value creation as a result of Kubient's technology and highly skilled management team. To provide a little background information on us, Adomni stands for Advertise Everywhere. We started in 2015 with the vision to provide an online marketplace for brand marketers and ad agency media specialists to easily and quickly launch high-impact digital advertising campaigns in the real world. Today, Adomni's inventory reaches a monthly audience of over 1 billion people across 37 digital screen types in over 40 countries.
Our digital screen types range from outdoor placements such as digital billboards, urban panels, and vehicle tops, as well as to indoor placements in high-traffic locations such as airports, bars, and restaurants, gas stations, gyms, and shopping malls. Adomni's ad planning and buying platform enables media planners and buyers to view inventory availability, transparently view pricing, target their ideal audience using its proprietary Audience IQ technology, and measure the performance impact of the ad campaign on the brand's business goals by custom reports. The simplicity and ease of Adomni's platform enables campaigns to be planned and launched in just minutes. Performance marketers have the ability to view reports that show the impact of the ad campaign on their business goals, such as website traffic and conversion, mobile app KPIs, foot traffic to retail stores, brand awareness lists, return on ad spend at retail locations, and more.
As a real-world example, a brand may want to debut a new and exciting product to the market. In today's world, where attention is highly fragmented and privacy lockdowns from Google and Apple have reduced targeting capabilities, delivering a high-impact ad campaign can be challenging. We believe we have solved for that. Using the Adomni programmatic planning and buying platform, the brand's digital marketing team can choose their ideal audience segments, such as demographics or past visitation affinities, their geographical targets, such as city or state, or even geofence specific points of interest, such as retailers, and select the types of screens that are of interest. In seconds, the Adomni search engine will comb through hundreds of thousands of digital out-of-home advertising locations and millions of mobile data points to present the optimal set of advertising inventory.
Once a budget has been entered and ad content uploaded, the campaign can be launched. What used to take weeks now takes minutes, and the outcome is a smart advertising campaign that ultimately nets great results. Transparency and flexibility are at the heart of our product offering. Marketers can pull real-time campaign metrics such as impressions delivered, CPM, and ad spend, while always having access to lower funnel KPI reports for their campaigns, which allows for immediate optimization.
Our client list spans multiple markets as hundreds of brands and agencies have chosen Adomni as their dedicated partner to reach their ideal consumer. These include Hewlett-Packard, Live Nation, Hershey's, Williams Sonoma, Pepsi and FanDuel, just to name a few. We are also active members of several trade organizations, including the OAAA, Geopath, the World Out of Home Organization, COM, and we have a seat on the board of directors for the DPAA.
Adomni's executive team has an average of over 20+ years of experience in technology and advertising, with a proven track record of success. Whenever we are asked what makes Adomni tick, we say that it starts and ends with great people. We're powered by service and are passionate about continuously enhancing and transforming the experience through positive business outcomes for digital marketers. The combination of Adomni and Kubient speaks to this mission. We're focused on further cultivating a high-growth, diversified advertising technology platform to connect brands with their ideal audiences everywhere in the home and outside the home. How are we gonna do it? First, we bring what we believe is a best-in-class platform and expertise for digital out-of-home advertising. This is a side of the advertising ecosystem that we believe is growing rapidly and has significant global growth expectations well into the future.
Adomni's existing business is scaling, we have unique proprietary technology that we bring to the table that is coupled with our highly qualified team members who know how to squeeze the most results out of the myriad ways to build a campaign. When you pair our capabilities with Kubient's leadership team, knowledge, and technology, particularly in the realms of online digital advertising, connected television, and fraud prevention, we now have the ability to truly deliver on the audience first brand safe omnichannel experience. Kubient's focus is on the sell side of digital advertising channels, while we're focused more on the buy side with our DSP. With this merger, we're expanding the tech stack, notably with KAI, to enhance audience targeting and prevent fraud. Kubient also brings a creative audience reach and frequency with their current partnerships.
Due to the nature of Kubient's KAI technology and the expansive capabilities of artificial intelligence is rapidly evolving, we're seeing a number of opportunities for KAI to strengthen our digital out-of-home platform. These include enhanced accuracy of fraud prevention via AI-powered algorithms, real-time data monitoring and analysis of incoming data, advanced pattern recognition within the data, brand protection from fraudulent media, and more. Suffice it to say, bringing these elements together is not only complementary, but also highly drives up a more profitable business model. This is achieved by delivering a higher quality marketing campaign where fraud and waste are mitigated. Adomni also owns and operates a consumer-facing platform called Shoutable. Shoutable specializes in putting user-generated content on digital billboards as the first direct-to-consumer marketplace that bridges social media with the physical world.
In just minutes, anyone can choose a template, add their photo and text, and make a credit card purchase for small amounts of space on digital billboards and other digital home screens. Brands are also able to sponsor Shoutable campaigns by providing custom templates for consumers to add their personal content and place a free order which is subsidized by the brand. It's a fun and innovative side of our business with incredible profit margins. Switching gears to the market opportunity that we see, we are highly motivated by the opportunity to capture a greater share of the digital marketers' wallets. We're truly excited to deliver on our growth plans and unlock product scale and financial scale as a public vehicle.
In terms of timing and a decision by Adomni's board and team to step into the public market, I like to say that there's never a bad time to do a good deal. We see the market as ripe for growth on our side, and we see Kubient's people and capabilities as a catalyst to our growth. We see a huge market opportunity in digital advertising and video advertising. There's a lot of white space. Through this merger, we are excited to more vigorously pursue the many growth initiatives that we have in the pipeline, many of which have been waiting to be unlocked by new capital and the flexible structure that a public vehicle provides.
When evaluating our needs through the lens of the macroeconomic climate we're in today, this transaction is a solution to our future capital needs for either strategic M&A or organic initiatives to drive healthy, profitable growth. As I alluded to earlier, we deeply care about our employees here at Adomni. The idea of great talent operating in the right positions is something that we think about a lot. From a personnel perspective, one of the things that really attracted us about this transaction was the Kubient executive team, and we fully intend to leverage their expertise to build on the Kubient public infrastructure that exists today and tap their expertise to navigate the public market.
I'm delighted to share that Kubient CEO, Paul Roberts, will be staying on in a new role of chief strategy officer, where he will work hand in hand with me to guide the strategic growth and profitability of Adomni through organic and M&A opportunities. There are many others that will continue to carry the torch from the Kubient side. We look forward to preserving the culture of innovation and technology excellence. Lastly, I'd like to take a moment to extend a heartfelt gratitude and appreciation to Adomni's extraordinary employees, whose hard work and dedication have brought Adomni where we are today. I want to thank my co-founders, Jonathan Fine, Bob Stockham, and Chris Weiss, for their support and counsel throughout this process. There are so many other names for me to rattle off. I can go on and on.
I just want to reiterate that our success starts and ends with great people. That is what we are most proud of. Thank you, Kubient management and staff, for their past, current and future efforts. We could not be more excited about this transformative merger. With that, I will now turn the call back over to Paul. Paul?
Thanks, Jonathan. This is an incredibly exciting moment for both teams at Kubient and Adomni. Since there are a great deal of moving parts in a transaction such as this, I'd like to try and cover as many bases as possible to provide clarity for the market regarding the next steps in this journey. The merger's chief intent is to empower Adomni to strengthen and diversify its advertising technology platform while expanding its scope to address a larger, growing digital ad market. KAI will be harnessed to deliver better advertising campaigns via Adomni's platforms and will provide the necessary technological edge that artificial intelligence has to offer Adomni's expanding capabilities and use cases. Regarding our current partnerships, clients, and technology, the existing plan is to fully integrate those components into Adomni's solution stack and to continue service of legacy clients.
Additionally, the combined platforms will allow for a greater utility for advertisers and publishers to fully take advantage of a true omnichannel advertising approach with the added benefit of KAI-powered fraud prevention and brand safety. Personally, my role as chief strategy officer excites me as it will entail both a focus on integration, corporate development, and strategic consultancy on navigating the Adomni's executive team through their public markets journey. I look forward to continue serving our customers, shareholders, and fellow employees. In terms of the deal structure, pending approval of the transaction by Kubient stockholders and Adomni stockholders and subject to customary closing conditions, Kubient will acquire 100% of the outstanding equity interest in Adomni by means of a reverse triangular merger of a wholly owned subsidiary of Kubient with and into Adomni, with Adomni surviving as a wholly owned subsidiary of Kubient.
In connection with the closing of the merger, Kubient is expected to change its name to Adomni Inc. Immediately following the closing of the merger, the equity holders of Adomni are expected to own approximately 74% of the outstanding common stock of the combined company, and the equity holders of Kubient are expected to own approximately 26% of the outstanding common stock of the combined company. The merger agreement also provides that the equity holders of Adomni may receive additional shares of Kubient equal to 1%, 2%, or 5% of the outstanding shares of Kubient on a fully diluted basis following the filing of Kubient's annual report on Form 10-K for the 2023 fiscal year, upon the achievement of certain audited net revenue thresholds of Kubient for the 2023 fiscal year.
The merger has been unanimously approved by the board of directors of each company and is expected to close in the second half of 2023. On a closing note, we stand here today humbled and grateful to our steadfast group of investors, advisors, board, and remarkable team members. Through turbulent times, the mentioned collection has exhibited immense support and belief in our shared vision. As we embark on this new chapter, we're filled with excitement for the future of our combined companies. With the combined forces of our enterprise and technologies, we believe we're primed to capture greater success and leave an outsized impact on the ad tech industry. I'll turn it over to the operator for Q&A.
Certainly. At this time, we'll be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Please hold while we poll for questions. Thank you. Your first question is coming from Jack Vander Aarde from Maxim Group. Your line is live.
Okay. Okay, great. I appreciate the update. Clearly a lot to absorb here. I'll say hello to Jonathan as well. Okay, so, hi, Jonathan.
Hey, Jack.
Paul, You know, I'll jump into some questions here, and cover as much as I can based on what I've absorbed. I guess just in general, I believe I heard there will be an S4 filing, if or other filings with some more details. Can you just please clarify that quick? I'm gonna ask about the deal terms in a little more detail, or whatever's available. Thanks.
Sure. Yeah. There will be an S4 filed, that'll include greater detail, it's gonna be filed upon the completion of their audits. We do have a little bit of work here, Jack. I think we're gonna get started tomorrow and obviously assist any way we can and, you know, give them support. We would expect that, you know, to be about two months out.
Okay. That's helpful. Two months out or so. Got you. In terms of the proposed deal terms, I guess, is there any more details you can provide on the dollar amounts of the total proposed structure?
Sure. What we're looking at right now, you know, based upon, you know, the PR that we put out, Jack, as you know, we're gonna stay pretty close to that. Sorry, I just had a blip there on my phone. Apologies, Jack. What we're going with here is obviously the merger agreement is now public, and we're looking at them, you know, the Adomni team, they're going to, you know, have approximately 74% of the outstanding common stock. You know, we'll see obviously where everything settles tomorrow with the share price, and we can give you a ring back with obviously more information.
Got you. Okay, that's helpful. Yeah, I don't, I don't want to probe for anything that's not available. It's just the announcement was so quick, and I just wanna make sure I cover the basics. Then how about in terms of the Adomni business? Maybe just help me better understand some of the existing financials and run rates, just on how the combined company might look, you know, from an analyst kind of perspective on basic metrics, maybe like revenue run rates. I know Adomni and maybe Jonathan can speak to this as well, but, in terms of the existing install base, it looks like a 725,000 connected screens at the big number. Just anything that's around the existing business would be helpful.
Hey, Jack, it's Joshua Huppal as well. I'm just gonna, I guess, answer part of your question, and then I'll ask Jonathan to talk more about the business. In terms of the first part of your question, you know, we're not really giving any specific guidance about the company's financials at this point in time. I do want Jonathan to talk more broadly about the business and what this opportunity presents for us.
Sure.
Okay. Thanks, Josh.
Yes, as you mentioned earlier, Jack, you know, we have a very large supply of connected digital out-of-home screens, and our platform has enabled advertisers to access those screens through an easy online programmatic buying process. Today, we work with, you know, ad agencies that focus on digital marketing as well as others like social media marketing as well, and brands directly. From an actual client perspective and from a business perspective, we've been delivering double or triple-digit % annual growth year-over-year, pretty much since, you know, for the last five, six years. I mean, since we really got into the revenue side of the business. We do characterize ourselves as a high growth company. We're excited because the market is very, very large.
You know, when you think about the programmatic or the digital advertising ecosystem, it's around $500 billion a year of spend. That's really the market that we're addressing.
Got you. Okay. That's, that's helpful. I appreciate that. Maybe in terms of how, I suppose both Paul and Jonathan could speak to this, but in terms of the vision with, you know, the KAI technology and how that's gonna be incorporated, I suppose a value add enhancement to what you guys already have, from the Adomni side, could you speak more to the strategic fit and synergies as a result?
Sure. Sure. Yeah, happy to. Our buying platform and our planning platform is continuously being improved. When we learned of the KAI technology and the artificial intelligence around optimizing for, you know, data integrity, anti-fraud, and then also as we think going forward about even things like generative AI. We're really excited to be able to enhance the planning platform and the buying platform that would deliver just better campaigns and better results. There's one side which is our existing product mix, which is really focused on the digital out-of-home side. The other is that we're excited about expanding our scope of offerings beyond digital out-of-home to include connected television and mobile advertising as complementary pieces to the screens that we have in the real world.
Okay, excellent. I appreciate that color. Is there anything you can add about maybe the, you covered some of it in your prepared remarks, obviously, but just the scale of the Adomni operation from maybe a headcount perspective and then split between kind of R&D and sales and marketing, and whatever else you can break out, that'd be helpful?
From, you know, from a people perspective, we're predominantly U.S.-based, although we have some employees outside of the U.S. as well. Today we have 55 people and growing. We've built Adomni's platform in-house with our own software engineers and are excited to be able to, you know, team up with Kubient who also has really, really strong tech leadership and data science people and bring those things together.
Okay, great. Excellent. Okay, exciting news, guys. I appreciate the update. I look forward to getting more details. Thanks a lot.
Thank you.
Thanks, Jack.
Thank you. Once again, everyone, if you have any questions or comments, please press star then one on your phone. Please hold while we poll for questions. Thank you for joining us today for Kubient and Adomni's conference call. You may now disconnect.