Redacted Industries, Inc.

What they do

VNUE records live concerts and makes the audio immediately available for purchase via its Set.fm website and iOS app, as well as through physical collectible products like CDs and USB drives sold on-site through its partner DiscLive Network. It also operates Stage It, a livestreaming platform where fans purchase access to virtual performances. Soundstr, a music rights management platform, is in development but not yet generating revenue.

Revenue drivers

• Set.fm / DiscLive Network — Generates revenue by recording live concert audio and selling it instantly through the Set.fm app and website, as well as physical products like CDs sold at shows and online via DiscLive. This is the only platform currently generating revenue for the company.
• Stage It — Acquired platform that sells tickets to livestreamed concerts and events, as well as 'notes' that fans redeem to virtually attend performances. Adds a livestreaming revenue stream to the company's live music offerings.
• Soundstr — A music identification and rights management cloud platform under development, intended to track public performances for royalty payments. Not yet generating revenue but being commercially deployed to early adopters.

Recent performance

For the nine months ended September 30, 2024, revenue declined sequentially each quarter: $106,177 in Q1, $87,950 in Q2, and $57,670 in Q3. The most recent quarter's revenue was down 43% from Q1. As of September 30, 2024, the company had total assets of $3,416, total liabilities of $7.7 million, and negative shareholder equity of $7.7 million. Operating cash flow has been negative for years, including -$1.1 million in 2023. Annual revenue grew from $100,476 in 2021 to $529,439 in 2023, but net income has been volatile, with a $22.8 million loss in 2022 and a $1.1 million loss in 2023.

Strategy

VNUE's strategy centers on expanding its live music technology platforms, particularly through the acquisition of Stage It to add livestreaming capabilities. The company aims to grow Set.fm and DiscLive by partnering with artists and labels to record and sell concert content. It continues to develop Soundstr as a potential future revenue stream for music rights management. Management has stated that it needs to raise additional working capital to continue operations and has acknowledged substantial doubt about its ability to continue as a going concern.

Risks

• Going Concern — The company's auditor has expressed substantial doubt about its ability to continue as a going concern due to recurring losses and negative cash flows.
• Revenue Concentration — Substantially all revenue comes from Set.fm and DiscLive, making the company highly dependent on the live music industry and its partnerships with artists.
• Liquidity Crisis — As of September 30, 2024, the company had only $3,416 in cash and total liabilities of $7.7 million, with negative shareholder equity of $7.7 million.
• COVID-19 Impact — The pandemic materially adversely affected the live recording business by halting public gatherings, and future resurgences could similarly disrupt operations.

Outlook

Management does not provide specific financial guidance. The company's future depends on its ability to raise capital and successfully commercialize its platforms, particularly Stage It and Soundstr. However, the 10-K states that there can be no assurances on the timing of a return to normal live music events or whether the company will achieve profitability.