10-K: VNUE Inc. Reports Full Year 2023 Results, Cites Ongoing Challenges and Strategic Growth Initiatives

VNUE, Inc. reported its full year 2023 financial results, highlighting increased revenue but also ongoing losses and concerns about its ability to continue as a going concern.

Summary

• VNUE, Inc., a music technology company, released its financial results for the year ended December 31, 2023.
• The company reported a net loss of $1,136,776 for 2023, compared to a net loss of $22,762,622 in 2022.
• Revenue increased to $529,439 in 2023 from $359,147 in 2022, primarily due to income from the Matchbox Twenty tour.
• Operating expenses decreased significantly to $1,593,757 in 2023 from $21,849,979 in 2022, mainly due to a large non-cash charge in 2022.
• The company's auditors have expressed substantial doubt about its ability to continue as a going concern.
• As of December 31, 2023, VNUE had cash on hand of $25,430 and a stockholders deficit of $38,233,792.
• The company is dependent on raising additional capital to fund its operations and implement its business plan.
• VNUE is actively pursuing the rollout of its Soundstr technology and expanding its Stage It platform.

Sentiment

Score: 3

Explanation: The document presents a mixed picture with some positive developments like increased revenue and reduced losses, but the significant concerns about the company's ability to continue as a going concern and material weaknesses in internal controls weigh heavily on the overall sentiment.

Positives

• Revenue increased year-over-year, primarily due to the Matchbox Twenty tour.
• Operating expenses decreased significantly, mainly due to the absence of a large non-cash charge from the previous year.
• The net loss was substantially reduced compared to the previous year.
• Other income improved due to abandoned notes and reduced interest expense.
• The company is actively rolling out its Soundstr technology and expanding its Stage It platform.
• VNUE has formed strategic partnerships to further its technology and market reach.

Negatives

• The company continues to operate at a loss.
• Auditors have expressed substantial doubt about the company's ability to continue as a going concern.
• The company has a significant accumulated deficit and negative working capital.
• VNUE is heavily reliant on external financing to continue operations.
• The company has identified material weaknesses in its internal controls over financial reporting.
• The company is involved in ongoing legal proceedings.

Risks

• The company's ability to achieve and maintain profitability is uncertain.
• VNUE is dependent on outside financing for the continuation of its operations.
• The company has a limited operating history and may not be able to sustain profitability.
• There is a risk of intellectual property infringement claims.
• The company may fail to keep up with industry trends or technological developments.
• The company's business depends on continued access to the internet.
• The company may fail to successfully integrate the acquisition of Stage It.
• The company is dependent on key personnel and may not be able to attract and retain qualified staff.
• The company's stock is traded on the OTC Pink Market, which may not provide an active, liquid trading market.
• The company's stock price is likely to be volatile and could result in substantial losses to investors.
• The company is subject to penny stock rules, which may make shares more difficult to sell.
• The company's existing stockholders will experience significant dilution from outstanding convertible notes and the exercise of warrants.
• The company may not be able to accurately report its financial results or prevent fraud due to weaknesses in internal controls.

Future Outlook

The company expects revenues to increase as the impact of COVID-19 decreases, and it plans to continue the rollout of its Soundstr technology and expand its Stage It platform. The company also intends to leverage technical development efforts to streamline its platforms and explore further branding and expansion of services. However, the company's ability to continue as a going concern is dependent on raising additional funds.

Management Comments

• Management is currently evaluating remediation plans for the material weaknesses in internal controls.
• Management believes that the vaccination efforts throughout the world are having a positive impact on the population that may enable more live music events to be held in the future, which would be beneficial to our business.

Industry Context

The live music and entertainment industry is constantly searching for new monetization outlets, and VNUE believes it has developed solutions that create new revenue streams. The company's focus on live music recordings, streaming, and rights management aligns with current industry trends. The company is also addressing the challenges faced by artists in the digital age, where streaming revenues often do not replace traditional income sources.

Comparison to Industry Standards

• The document does not provide specific comparable companies or projects to benchmark against.
• However, the document does mention that the average payment to an artist is $0.0011 net per stream, and VNUE's Set.fm app provides artists with 30% or more of the net revenue generated from their music, which is a more robust opportunity for artists to monetize their live shows.
• The document also notes that artists receive approximately 73% of ticket sales on StageIt.com, which is a higher percentage than traditional ticket services.

Corporate Governance

Legal Proceedings

• The company was involved in a legal action with Power Up Lending Group, Ltd., which was settled confidentially.
• The company is involved in an ongoing legal action with Golock Capital, LLC and DBW Investments, LLC, where the District Court ruled against the company, and the company has appealed the decision.
• The company is involved in an ongoing legal action with LG Capital, LLC, where the Magistrate Judge recommended that the LG Defendants motion to dismiss be denied.

Related Party Transactions

• The company has a licensing agreement with DiscLive Network, which is controlled by the company's CEO.
• The company's CEO has waived the right to receive license fees from DiscLive.
• The company has received advances from officers/stockholders for working capital purposes.

Stakeholder Impact

• Shareholders face the risk of significant dilution and potential loss of investment due to the company's financial challenges and need for additional capital.
• Employees may be impacted by the company's financial instability and potential restructuring.
• Artists using the company's platforms may be affected by the company's ability to pay them and provide services.
• Customers may be impacted by the company's ability to provide reliable services and products.
• Creditors face the risk of non-payment due to the company's financial difficulties.

Next Steps

• The company plans to continue the rollout of its Soundstr technology.
• The company plans to expand its Stage It platform.
• The company intends to leverage technical development efforts to streamline its platforms.
• The company will explore further branding and expansion of platform services.
• The company plans to address Stage It debt to artists and other vendors.
• The company will continue to seek additional funding to support its operations and growth plans.

Key Dates

Keywords

music technology, live concerts, streaming, Soundstr, Stage It, music licensing, intellectual property, financial results, revenue, profitability, convertible notes, equity financing, going concern, internal controls