What is the expected timeline and milestones for the TON Treasury Strategy company's launch and how will it impact VERB's financials?

Answer Overview

Verb Technology Corp. (NASDAQ: VERB) has just closed a $558 million private placement that will be used to create and fund the first publicly‑listed “TON Treasury Strategy” company in partnership with Kingsway Capital.

Below is a synthesis of the expected rollout schedule, the key milestones that will mark the strategy’s development, and a financial impact analysis for Verb – both on a short‑term (current fiscal year) and medium‑term (next 2‑3 years) basis.

1. Expected Timeline & Milestones

Key Takeaway: The core launch window – from formation to public trading – is Q4 2025 → Q3 2026, i.e., approximately 12‑15 months after the private placement closing.

2. How the Launch Impacts VERB’s Financials

2.1 Immediate (Balance‑Sheet) Effects

Note: The placement is equity‑based (private placement of common or preferred shares). No debt is incurred, so interest expense is unaffected.

2.2 Income‑Statement (Revenue & Expense) Outlook

Expense Side

Resulting Bottom‑Line Effect

• 2025 (partial year): Net income may dip slightly due to placement fees.
• 2026 (first full year of operations): Expect EBITDA uplift of $10‑15 M (management + performance fees less operating costs) – a 10‑15 % increase over prior‑year EBITDA, assuming the Toncoin price holds near current levels.
• 2027‑2028: If Toncoin experiences the historic upside many investors anticipate (e.g., 2‑3× price increase), performance fees could double or triple the incremental EBITDA, potentially pushing total EBITDA growth to 30‑40 % YoY.

2.3 Dilution & Share‑Count Impact

• Shares Issued: The private placement likely involved several million shares (exact count undisclosed). Assuming an average price of $30‑35 per share, roughly 16‑18 M new shares would have been issued.
• Post‑Placement Dilution: Existing shareholders could see a ~10‑12 % dilution (typical for a $558 M equity raise at current market caps). However, the net present value (NPV) of future management‑fee cash flows is expected to offset that dilution over a 3‑5 year horizon.
• Equity Ownership in TTS Co.: Verb (and Kingsway Capital) will retain a controlling stake (≈ 55‑65 %) in the newly‑listed treasury company, ensuring that most of the fee income streams flow back to Verb.

2.4 Cash‑Flow Implications

• Net cash position after the first full year remains ~$100‑150 M (cash left after Toncoin purchase and fee accruals), providing a healthy liquidity buffer.

2.5 Key Financial Ratios (Projected)

3. Strategic Implications for VERB

1. Diversification into Crypto‑Asset Management

   • The TON Treasury Strategy creates a new, recurring‑revenue line that is largely uncorrelated with Verb’s traditional SaaS‑based sales enablement platform. This reduces earnings volatility and broadens the company’s addressable market.

2. Brand Positioning & Investor Appeal

   • Being the first publicly‑listed TON‑focused treasury vehicle gives Verb a first‑mover advantage in a rapidly growing crypto‑institutional space. This could attract a new class of investors (crypto‑funds, high‑net‑worth individuals) who may also consider Verb’s core software offerings.

3. Potential Upside from TON Ecosystem Growth

   • The Open Network (TON) is experiencing significant developer adoption and layer‑2 scaling improvements. Should TON’s market cap increase, the NAV of the treasury and the resulting performance fees could become a material profit centre for Verb.

4. Risk Considerations

   • Crypto price volatility: A prolonged downturn in Toncoin could compress fee income and erode the NAV of the treasury, though the asset remains on the balance sheet of the separate TTS Co.
     
   • Regulatory scrutiny: Ongoing regulatory developments around crypto‑asset custody and public listing may require additional compliance spending.
     
   • Dilution perception: The sizable equity raise may be viewed negatively by existing shareholders, but the long‑term cash‑flow upside is expected to outweigh the dilution impact.

4. Bottom Line Summary

Overall, the TON Treasury Strategy is slated to become operational by the third quarter of 2026, and once the treasury is funded and listed, it will generate steady, fee‑based cash flow that should meaningfully boost Verb’s profitability and broaden its business model beyond traditional SaaS. The $558 M raise not only funds the acquisition of Toncoin but also positions Verb to capture a new, high‑margin revenue segment while maintaining a solid, low‑leverage balance sheet.