Voyager Digital Reports Revenue of US$102.7 Million for the Quarter Ended March 31, 2022

Research, News, and Market Data on Voyager Digital

NEW YORK, May 16, 2022 /CNW/ – Voyager Digital Ltd. (“Voyager” or the “Company”) (TSX: VOYG) (OTCQX: VYGVF) (FRA: UCD2) one of the fastest-growing, publicly traded cryptocurrency platforms in the United States, today announced revenue and user metrics for the fiscal 2022 third quarter ended March 31, 2022.

“We performed strongly amidst the challenging macroeconomic and lower trading volumes seen across our industry,” said Steve Ehrlich, CEO and Co-founder of Voyager. “Despite market conditions, we continued to deliver customer account and net deposit growth, while continuing to build upon our revenue diversification strategy.”

“With the announcement of the private placement of approximately USD$60 million, the Company has over $225 million of net liquidity, comprised of over $175 million in cash, and approximately $50 million in crypto. With the recent changes to our rewards model and actively addressing our cost structure to ensure an efficient use of capital, we are working toward a goal of returning to positive operating income, after adding back stock-based compensation, in early calendar 2023.  Ehrlich continued, “Additionally, in the quarter we successfully launched our extremely popular moon mode and on-boarded customers to the beta programs for both our debit card and desktop app. The debit card is on target and expected to be deployed to the remainder of the waitlist throughout the quarter and the desktop app is set to be expanded to a wide group of customers.”

The Company announces the following for fiscal 2022 third quarter ended March 31, 2022 Financial and Operational Key Metrics:

• Revenue for the quarter is $102.7 million, up 70% compared to $60.4 million for the quarter ended March 31, 2021.
• Operating loss is $43.0 million for the quarter vs an income of $29.8 million for the quarter ended March 31, 2021. Operating loss/income includes stock-based compensation of $5.4 million for the quarter vs $5.3 million for the quarter ended March 31, 2021, respectively.
• Total verified users on the platform stand at 3.5 million, up 9% from 3.2 million at the quarter ended December 31, 2021.
• Total funded accounts reached 1,190,000 as of March 31, 2022, up 11% from 1,074,000 at the quarter ended December 31, 2021.
• Total Assets on Platform decreased to $5.8 billion from $6.0 billion at December 31, 2021.
• Our headcount increased to 318 as of March 31, 2022, from 250 at December 31, 2021.

All figures are
preliminary and unaudited and subject to final adjustment. All amounts are in
U.S. dollars, unless otherwise indicated.

The company is also pleased to announce Ashwin Prithipaul as Chief Financial Officer. He comes to Voyager with deep financial leadership experience, including as the former CFO of Galaxy Digital. In conjunction with this, Evan Psaropoulos is moving into a new role as Chief Commercial Officer to build out the Company’s revenue diversification as well as partner with the new CFO in creating cost efficiencies.

“In closing, we strongly believe we are in the early stages of global crypto adoption. Voyager remains very well capitalized to strategically grow our business and serve consumers amidst a rapidly evolving crypto landscape,” Ehrlich added.

Conference Call Details

Voyager will discuss its fiscal 2022 third quarter results today, May 16, 2022, via a conference call at 8:00 a.m. Eastern Time. To access the webcast, please register by 
clicking here. A live webcast and a replay will be available on the Investor Relations section of the Company’s website at  https://www.investvoyager.com/investorrelations/overview.  

Forward Looking Statements

Certain information in this press release, including, but not limited to, statements regarding future growth and performance of the business, momentum in the businesses, future adoption of digital assets, and the Company’s anticipated results may constitute forward looking information or forward-looking statements, (collectively referred to as “forward-looking statements”)which can be identified by the use of terms such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” (or the negatives) or other similar variations under applicable securities laws. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Voyager’s actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Forward looking statements are subject to the risk that the global economy, industry, or the Company’s businesses and investments do not perform as anticipated, that revenue or expenses estimates may not be met or may be materially less or more than those anticipated, that trading momentum does not continue or the demand for trading solutions declines, customer acquisition does not increase as planned, product and international expansion do not occur as planned, risks of compliance with laws and regulations that currently apply or become applicable to the business or the interpretation or application of laws and regulations by regulatory authorities, and those other risks contained in the Company’s public filings, including in its Management Discussion and Analysis and its Annual Information Form (AIF). Factors that could cause actual results of the Company and its businesses to differ materially from those described in such forward-looking statements include, but are not limited to, a decline in the digital asset market or general economic conditions; changes in laws or approaches to regulation, regulatory investigations, enforcement actions or other regulatory action or sanction, the failure or delay in the adoption of digital assets and the blockchain ecosystem by institutions; changes in the volatility of crypto currency, changes in demand for Bitcoin and Ethereum, changes in the status or classification of cryptocurrency assets, cybersecurity breaches, a delay or failure in developing infrastructure for the trading businesses or achieving mandates and gaining traction; failure to grow assets on platform, an adverse development with respect to an issuer or party to the transaction or failure to obtain a required regulatory approval. In connection with the forward-looking statements contained in this press release, the Company has made assumptions that no significant events occur outside of the Company’s normal course of business and that current trends in respect of digital assets continue. Readers are cautioned that the key metrics disclosed in this press release, including, without limitation, Assets on Platform and trading volumes fluctuate and may increase and decrease from time to time and that such fluctuations are beyond the Company’s control. Forward-looking statements, past and present performance and trends are not guarantees of future performance, accordingly, you should not put undue reliance on forward-looking statements, current or past performance, or current or past trends. Information identifying assumptions, risks, and uncertainties relating to the Company are contained in its filings with the Canadian securities regulators available at www.sedar.com. The forward-looking statements in this press release are applicable only as of the date of this release or as of the date specified in the relevant forward-looking statement and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events. The Company assumes no obligation to provide operational updates, except as required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements, unless required by law. Readers are cautioned that past performance is not indicative of future performance and current trends in the business and demand for digital assets may not continue and readers should not put undue reliance on past performance and current trends.  Refer to definition of certain Non-IFRS terms in Management’s Discussion and Analysis including Assets On Platform, Adjusted EBITDA and Adjusted Working Capital.  All figures are in U.S. dollars unless otherwise noted.

About Voyager Digital Ltd.

Voyager Digital Ltd.’s (TSX: 
VOYG) (OTCQX: VYGVF) (FRA: UCD2) US subsidiary, Voyager Digital, LLC, is a fast-growing cryptocurrency platform in the United States founded in 2018 to bring choice, transparency, and cost-efficiency to the marketplace. Voyager offers a secure way to trade over 100 different crypto assets using its easy-to-use mobile application. Through its subsidiary Coinify ApS, Voyager provides crypto payment solutions for both consumers and merchants around the globe. To learn more about the company, please visit https://www.investvoyager.com.

The TSX has not approved
or disapproved of the information contained herein.

Press Contacts

Voyager Digital, Ltd.
Kevin Rodriguez

Investor Relations
(212) 547-8807
krodriguez@investvoyager.com

Voyager Public Relations Team
pr@investvoyager.com

Voyager Digital Ltd.
Interim Condensed Consolidated Statements of Financial Position (Unaudited)
(USD, in thousands)

			March 31, 2022		June 30, 2021
Assets
Current assets
Cash and cash equivalents			$            99,406		$            193,933
Cash held for customers			112,413		162,852
Crypto assets held ($895.7 million and $0.0 million restricted, respectively)			3,433,142		2,286,399
Crypto assets loaned			2,022,444		393,561
Crypto assets collateral received			227,339		–
Investments			–		31,359
Other current assets			16,111		5,839
Total current assets			5,910,855		3,073,943
Goodwill and intangible assets			79,334		559
Other non-current assets			8,695		2,860
Total assets			$          5,998,884		$          3,077,362
Liabilities
Current liabilities
Crypto assets and fiat payable to customers			$          5,482,009		$          2,807,015
Crypto assets collateral payable			227,339		–
Crypto assets borrowed			–		36,832
Warrant liability			6,102		23,810
Other current liabilities			16,155		22,644
Total current liabilities			5,731,605		2,890,301
Other non-current liabilities			9,496		739
Total liabilities			5,741,101		2,891,040
Equity
Share capital			408,353		261,908
Share-based payments reserve			30,570		15,125
Warrant reserve			1,144		3,457
Other comprehensive loss			(347)		–
Accumulated deficit			(181,937)		(94,168)
Total equity			257,783		186,322
Total liabilities and equity			$          5,998,884		$          3,077,362

Voyager Digital Ltd.
Interim Condensed Consolidated Statements of Comprehensive Income/ (Loss)
(Unaudited)
(USD, in thousands except for shares data)

		Three Months Ended March 31,				Nine Months Ended March 31,
		2022		2021		2022		2021
Revenues
Transaction revenue		$         33,386		$          53,736		$       163,402		$          57,418
Fees from crypto assets loaned		31,025		6,702		80,892		8,590
Merchant services		18,347		–		48,148		–
Staking revenue		14,359		–		42,788		–
Other revenue		5,626		–		13,868		–
Total revenues		102,743		60,438		349,098		66,008
Operating expenses
Rewards paid to customers		59,321		7,409		182,014		8,949
Marketing and sales		30,367		8,935		82,082		10,288
Cost of merchant services		17,979		–		47,184		–
Share-based payments		5,386		5,271		14,506		6,650
Compensation and employee benefits		12,365		2,476		26,984		4,558
Total compensation and employee benefits		17,751		7,747		41,490		11,208
Trade expenses		2,984		726		14,145		1,069
Customer onboarding and service		3,525		2,677		9,179		2,677
Professional and consulting		6,033		1,141		20,371		2,233
General and administrative		7,743		1,957		20,703		5,327
Total operating expenses		145,703		30,592		417,168		41,751
Income/ (loss) before other income/ (loss)		(42,960)		29,846		(68,070)		24,257
Other income/ (loss)
Change in fair value of crypto assets held		(17,516)		12,953		(24,560)		18,440
Change in fair value of investments		–		18,977		6,114		29,570
Change in fair value of crypto assets borrowed		–		(30,030)		(13,584)		(36,282)
Change in fair value of warrant liability		9,981		(98,990)		16,825		(116,092)
Fees on crypto assets borrowed		–		(1,319)		(2,532)		(1,428)
Total other income/ (loss)		(7,535)		(98,409)		(17,737)		(105,792)
Net income/ (loss) before provision/ (benefit) for income tax		(50,495)		(68,563)		(85,807)		(81,535)
Provision (benefit) for income tax		10,945		–		1,962		–
Net income/ (loss)		(61,440)		(68,563)		(87,769)		(81,535)
Other comprehensive income/ (loss)
Foreign currency translation adjustment		(148)		(14)		(347)		(14)
Total comprehensive income/ (loss)		$          (61,588)		$        (68,577)		$       (88,116)		$       (81,549)
Earnings per share
Basic		$           (0.36)		$          (0.49)		$          (0.53)		$          (0.66)
Diluted		$           (0.36)		$          (0.49)		$          (0.53)		$          (0.66)

SOURCE Voyager Digital (Canada) Ltd.

Image Credit: Kent Dayton (MIT News Office)

Ultrathin Fuel Cell Uses the Body’s Own Sugar to Generate Electricity

Jennifer Chu | MIT News
Office

Glucose is the sugar we absorb from the foods we eat. It is the fuel that powers every cell in our bodies. Could glucose also power tomorrow’s medical implants?

Engineers at MIT and the Technical University of Munich think so. They have designed a new kind of glucose fuel cell that converts glucose directly into electricity. The device is smaller than other proposed glucose fuel cells, measuring just 400 nanometers thick, or about 1/100 the diameter of a human hair. The sugary power source generates about 43 microwatts per square centimeter of electricity, achieving the highest power density of any glucose fuel cell to date under ambient conditions.

The new device is also resilient, able to withstand temperatures up to 600 degrees Celsius. If incorporated into a medical implant, the fuel cell could remain stable through the high-temperature sterilization process required for all implantable devices.

The heart of the new device is made from ceramic, a material that retains its electrochemical properties even at high temperatures and miniature scales. The researchers envision the new design could be made into ultrathin films or coatings and wrapped around implants to passively power electronics, using the body’s abundant glucose supply.

“Glucose is everywhere in the body, and the idea is to harvest this readily available energy and use it to power implantable devices,” says Philipp Simons, who developed the design as part of his PhD thesis in MIT’s Department of Materials Science and Engineering (DMSE). “In our work we show a new glucose fuel cell electrochemistry.”

“Instead of using a battery, which can take up 90 percent of an implant’s volume, you could make a device with a thin film, and you’d have a power source with no volumetric footprint,” says Jennifer L.M. Rupp, Simons’ thesis supervisor and a DMSE visiting professor, who is also an associate professor of solid-state electrolyte chemistry at Technical University Munich in Germany.

 

A “Hard” Separation

The inspiration for the new fuel cell came in 2016, when Rupp, who specializes in ceramics and electrochemical devices, went to take a routine glucose test toward the end of her pregnancy.

“In the doctor’s office, I was a very bored electrochemist, thinking what you could do with sugar and electrochemistry,” Rupp recalls. “Then I realized, it would be good to have a glucose-powered solid state device. And Philipp and I met over coffee and wrote out on a napkin the first drawings.”

The team is not the first to conceive of a glucose fuel cell, which was initially introduced in the 1960s and showed potential for converting glucose’s chemical energy into electrical energy. But glucose fuel cells at the time were based on soft polymers and were quickly eclipsed by lithium-iodide batteries, which would become the standard power source for medical implants, most notably the cardiac pacemaker.

However, batteries have a limit to how small they can be made, as their design requires the physical capacity to store energy.

“Fuel cells directly convert energy rather than storing it in a device, so you don’t need all that volume that’s required to store energy in a battery,” Rupp says.

In recent years, scientists have taken another look at glucose fuel cells as potentially smaller power sources, fueled directly by the body’s abundant glucose.

A glucose fuel cell’s basic design consists of three layers: a top anode, a middle electrolyte, and a bottom cathode. The anode reacts with glucose in bodily fluids, transforming the sugar into gluconic acid. This electrochemical conversion releases a pair of protons and a pair of electrons. The middle electrolyte acts to separate the protons from the electrons, conducting the protons through the fuel cell, where they combine with air to form molecules of water — a harmless byproduct that flows away with the body’s fluid. Meanwhile, the isolated electrons flow to an external circuit, where they can be used to power an electronic device.

The team looked to improve on existing materials and designs by modifying the electrolyte layer, which is often made from polymers. But polymer properties, along with their ability to conduct protons, easily degrade at high temperatures, are difficult to retain when scaled down to the dimension of nanometers, and are hard to sterilize. The researchers wondered if a ceramic — a heat-resistant material which can naturally conduct protons — could be made into an electrolyte for glucose fuel cells.

“When you think of ceramics for such a glucose fuel cell, they have the advantage of long-term stability, small scalability, and silicon chip integration,” Rupp notes. “They’re hard and robust.”

Peak Power

The researchers designed a glucose fuel cell with an electrolyte made from ceria, a ceramic material that possesses high ion conductivity, is mechanically robust, and as such, is widely used as an electrolyte in hydrogen fuel cells. It has also been shown to be biocompatible.

“Ceria is actively studied in the cancer research community,” Simons notes. “It’s also similar to zirconia, which is used in tooth implants, and is biocompatible and safe.”

The team sandwiched the electrolyte with an anode and cathode made of platinum, a stable material that readily reacts with glucose. They fabricated 150 individual glucose fuel cells on a chip, each about 400 nanometers thin, and about 300 micrometers wide (about the width of 30 human hairs). They patterned the cells onto silicon wafers, showing that the devices can be paired with a common semiconductor material. They then measured the current produced by each cell as they flowed a solution of glucose over each wafer in a custom-fabricated test station.

 

They found many cells produced a peak voltage of about 80 millivolts. Given the tiny size of each cell, this output is the highest power density of any existing glucose fuel cell design.

“Excitingly, we are able to draw power and current that’s sufficient to power implantable devices,” Simons says.

“It is the first time that proton conduction in electroceramic materials can be used for glucose-to-power conversion, defining a new type of electrochemstry,” Rupp says. “It extends the material use-cases from hydrogen fuel cells to new, exciting glucose-conversion modes.”

The researchers “have opened a new route to miniature power sources for implanted sensors and maybe other functions,” says Truls Norby, a professor of chemistry at the University of Oslo in Norway, who did not contribute to the work. “The ceramics used are nontoxic, cheap, and not least inert both to the conditions in the body and to conditions of sterilization prior to implantation. The concept and demonstration so far are promising indeed.”

 

 

Reprinted with permission of MIT News (http://news.mit.edu/)

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Voyager Digital Rolls Out 1-1 Live Messaging Support For Customers

Research, News, and Market Data on Voyager Digital

Company continues to rapidly expand its personalized customer
support capabilities as well as multimedia information and education, building
on its “Crypto for All” initiative

NEW YORK, May 12, 2022 /CNW/ – Voyager Digital Ltd. (“Voyager” or the “Company”) (TSX: VOYG) (OTCQX: VYGVF) (FRA: UCD2), one of the fastest-growing consumer cryptocurrency platforms in the United States, today announced it is currently rolling out Live Messaging Support for Voyager customers, available through Voyager’s award-winning mobile app, from 8am – 8pm Eastern time, Monday through Friday.

“Voyager support is now as easy as a text with one of our expert team members,” said Steve Ehrlich, Voyager’s CEO and co-founder. “To keep pace with customer growth over the past 12 months, we have dramatically increased our highly-trained customer support team, adding specialists across the United States. Today, we are adding industry-leading tools and capabilities to connect this expertise with customers through a new, dynamic channel that continues our laser-focus on building a world-class, customer-first organization centered on digital assets.”

To access the new Live Messaging Support feature that provides text communication through the Voyager app with an expert support team member, customers can:

• Go to the Voyager mobile app and tap on the “Accounts” symbol on the far right of the lower navigation bar.
• Scroll to the “Help” section, then tap the “?” icon in the purple bubble in the lower right corner.

This will initiate a chat session with VAL, Voyager’s virtual assistant, that will either answer a customer’s question immediately, route directly to Live Messaging Support, or request that a ticket be submitted for more detailed analysis. Voyager’s Live Messaging Support seamlessly initiates a conversation with one of our team members, during available hours, starting a text thread that is accessible at the customer’s convenience.

Voyager plans to expand on this capability by providing live, text-based support through additional channels in the future. 

In addition to introducing Live Messaging Support, Voyager is expanding customer information and communication through a series of video conversations between Stephen Ehrlich and leading voices in the financial and crypto world, as well as high-profile Voyager customers. The company is also piloting a video component to its weekly Market Roundup. These videos can be viewed on
Voyager’s YouTube channel.

About Voyager Digital Ltd.

Voyager Digital Ltd.’s (TSX: 
VOYG) (OTCQX: VYGVF) (FRA: UCD2) US subsidiary, Voyager Digital, LLC, is a fast-growing cryptocurrency platform in the United States founded in 2018 to bring choice, transparency, and cost-efficiency to the marketplace. Voyager offers a secure way to trade over 100 different crypto assets using its easy-to-use mobile application. Through its subsidiary Coinify ApS, Voyager provides crypto payment solutions for both consumers and merchants around the globe. To learn more about the company, please visit https://www.investvoyager.com.

The TSX has not approved
or disapproved of the information contained herein.

Press Contacts

Voyager Digital, Ltd.
Voyager Public Relations Team
pr@investvoyager.com

SOURCE Voyager Digital (Canada) Ltd.

Image Credit: lyncconf.com (Flickr)

Working in the Metaverse: what Virtual Office Life Could Look Like

In the context of work, the digital divide has become less about access to devices and connectivity and more about skills and mindset. Many experienced professionals have never learned more than the rudimentary basics of email, web search and Microsoft Office. Instead, they lean hard on nearby colleagues or the IT helpdesk when things go wrong.

By contrast, young people have already demonstrated a competitive edge in the virtual workplace. They come equipped with a more intuitive grasp of digital technology and the initiative to troubleshoot problems via YouTube tutorials, social media and subreddits.

As a generation, they’re also bigger gamers. As more and more work takes place in virtual reality (VR) – and one does not have to share the somewhat eccentric vision of the metaverse Mark Zuckerberg articulated at the 2021 Connect Conference to believe that it will – being familiar with massively multiplayer online games (MMOs) like Fortnite and Roblox, not to mention the ability to manage multiple digital identities, is set to make that edge keener still.

Much of the metaverse is still to be built. VR, of course, has long been used in training for certain physical jobs, from astronauts and pilots to law enforcement, surgery and manufacturing. When it comes to specialist machinery or complex locations, the relative safety and cost advantages of training virtually are obvious. But it is in knowledge work – from software engineering to law to design – where the changes will be most profound.

VR offers up new possibilities for extracurricular team activities. naratrip

How Virtual Workplaces Can Improve Communication

For most people, remote working during the pandemic has been characterised by alt-tabbing between communications apps and videoconferencing platforms such as Slack, Teams and Miro. And there is certainly a lot of room for improvement there.

Academic studies have found that collaborative work between colleagues suffers when they work remotely. Exchanges over email or Slack increasingly replace real-time in-person conversations, hampering communication.

Google itself has claimed that informal chats at coffee machines and lunch tables in its campus were responsible for innovations such as Street View and Gmail. But, with remote working, this kind of serendipitous encounter all but disappears.

And of course there are costs to remote working, in terms of individual wellbeing too. Stanford researchers have found that so-called “Zoom fatigue” is driven by a combination of intense eye contact, lack of mobility, self-consciousness about one’s own video feed, and the cognitive demands of needing to give exaggerated feedback to signal understanding, agreement or concern.

Technological advances mean solutions to these problems related to remote working are becoming possible. Collaboration software such as Meta’s Horizon Workrooms and Microsoft Mesh, which allow colleagues to meet as avatars in VR or take part in a real-world meeting as a photo-realistic hologram, are already available.

The metaverse 1.0 will no doubt see organisations creating persistent VR workplace environments, in which employees can interact in real time as embodied avatars. VR versions of office spaces can be designed to encourage chance encounters and corridor chats.

Imagine, for example, if going from one remote meeting to another involved leaving the conference room and crossing a bustling virtual atrium. That might sound far-fetched but bear in mind that Korean PropTech company Zigbang has already opened a 30-floor VR office called Metapolis. Employees choose an avatar and navigate to their desks via elevators and corridors. When they meet a colleague’s avatar, their webcam and mic are activated so they’re able to have a conversation. The webcam and mic then turn off automatically as their avatar walks away.

Meanwhile, the ability to use and read body language and actively participate in group discussions by scribbling post-it notes or drawing on a virtual whiteboard should make remote meetings in VR more engaging and less sedentary. They require much more active use of the neck, shoulders, arms and hands than a typical hour on Zoom.

How to Work as an Avatar

It seems likely that a new set of workplace norms will emerge as the metaverse develops. Team games, including virtual bowling nights and virtual ping-pong tournaments, might supplant Zoom drinks as the default remote working social event.

When it comes to hiring, meanwhile, VR could bring distinct benefits. “Blind” auditions have been shown to significantly increase the representation of female musicians in symphony orchestras. It follows that interviewing as an avatar might diminish the effect of bias –- unconscious or otherwise –- against people on the basis of their gender, age or appearance.

Just as custom “skins” (outfits) are a feature of many MMOs, in the virtual world of work, there may well be demand for creativity in virtual fashion and accessories too, as people seek to express their personal brand within the constraints of professional dress codes for avatars. Gucci has already sold virtual hats, handbags, and sunglasses on the MMO platform Roblox.

Young people have been the worst affected by the disruption COVID has caused to the job market. While some struggled with working productively from a shared house or their parents’ homes, others were scammed into joining companies that did not even exist.

Nonetheless, the pandemic has also brought exciting glimpses of how remote working might evolve. Due to public health concerns and climate pressure, the latter is here to stay. As it develops into the metaverse, it will continue to bring capabilities that are concentrated among younger people to the fore.

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It was written by and represents the research-based opinions of Sam Gilbert, Affiliated Researcher, Bennett Institute for Public Policy, University of Cambridge.

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Wednesday, May 11, 2022

Information Services Group (III)
One for the Record Books

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

A Quarter Filled with Records. ISG had an outstanding first quarter, the Company’s best start to a year ever. ISG generated record revenues, record profitability, record recurring revenues, and record consultant utilization. A strong start to the year indeed.

Drivers. What was behind the record setting performance? Technology is crucial to improving customer and employee experiences and making organizations more agile and adaptable to dynamic market conditions. Coming through the worst of the pandemic, companies are increasing their reliance on the cloud and other digital solutions to power their businesses. There is growing demand for specialized services like cybersecurity, data analytics, application development, and technology modernization. The number of choices is staggering and making internal technology and external ecosystems work together is no easy feat. More and more companies are looking for a trusted partner like ISG to bring clarity to complexity, support continuous transformation, and help get the most out of technology investments….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Tuesday, May 10, 2022

Information Services Group (III)
An Exceeding First Quarter

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Going Past Expectations. ISG announced record revenue of $72.6 million, continuing the trend of record revenue, an increase of 12% in constant currency and exceeding our estimate of $70 million. The quarter had record net income of $4.9 million, or $0.10 fully diluted EPS, versus $3.4 million and $0.07 the previous year. Adjusted EBITDA also was a record at $10.6 million, a 23% increase year-over-year. We forecasted net income of $4.65 million, $0.09 fully diluted EPS, and adjusted EBITDA of $9 million.

Still Having Momentum. The Company is continuing to see a favorable environment with companies investing in technology to power through market headwinds. ISG experienced double digit growth in recurring revenues, especially on its subscription research and platform businesses, and management sees market momentum continuing in 2022. This momentum is continued with the expansion of the Company’s ISG GovernX platform with the Agreemint acquisition, which we believe will be additive to the segment top-line growth….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Image: Brian Armstrong, Cathie Wood (Milken Institute)

ARK’s Cathie Wood and Coinbase’s Brian Armstrong Talk About Crypto’s Outlook

ARK Invest’s founder and CEO took part in a panel discussion titled, Conversations with Crypto Pioneers. The discussion was held at the Milken Institute’s 2022 Global Conference and included Brian Armstrong who is the CEO and co-founder of Coinbase (COIN). When it comes to Bitcoin and other cryptos, both CEOs are strong advocates. What Ms. Wood and Mr. Armstrong had to share ought to be of great interest to investors whose wallets have shrunk with the recent weakness in this asset class.

According to Armstrong one billion people around the world will use cryptocurrency technology in one way or another by the end of the 2020s. Crypto has started to enter the mainstream over the past few years. Armstrong said, about 200 million people worldwide have used crypto. Institutional investors are increasingly embracing digital currencies in their portfolios, and some retirement savers may soon see Bitcoin as an option in their 401(k) plans.

Wood believes the rate of crypto adoption in the U.S. is slow because of regulatory uncertainty; she said, “I would’ve expected more clarity,” and added. “Basically we’ve come at this from a negative point of view, and I’ve seen other countries come at it from a positive point of view. If we’re not lucky, regulatory arbitrage is going to take the market away from us.”

“This is a new asset class, and you have to have a point of view,” Wood said.

Armstrong seems at odds with the official point of view of regulators and others in Washington. He’s not overly optimistic, noting a recent executive order from President Biden that calls for protections from the crypto industry’s potential innovations. And last month, the White House outlined a national policy to address the risks and benefits of digital assets and their underlying technology.

Securities and Exchange Commission (SEC) Chairman Gary Gensler has been cautious when it comes to regulating cryptos. He has said that many tokens traded on crypto exchanges are likely securities. As securities, they would require more disclosures from both the tokens as well as the platforms that are not now registered security exchanges. Coinbase is a cryptocurrency exchange.

“I think this is a very bipartisan issue,” said Armstrong, “The majority of people I met with in Congress, 50% or more, are now pro-crypto, they believe that this is a net good for society.” About one in five Americans have now used crypto or tried it in some way, Armstrong said, and the number is growing quickly. “That’s a massive voting group. It’s quickly becoming very politically unpopular to be anti-crypto,” according to Armstrong.

Both CEOs noted the application of blockchain technology in everyday life goes well beyond digital coins.

The Coinbase CEO sees use cases for the technology in social media. He was asked about his view on Elon Musk’s takeover of Twitter, to which he said the company has a huge opportunity to become a leader in decentralized social media, where users’ online identity and content aren’t owned by one particular platform, but by users themselves through a decentralized ledger. It would mean anyone could use all the information on Twitter and display it in various ways. “Essentially, it democratized access to [social-media content], and I think that’s one of the directions Twitter could go,” Armstrong said. “I imagine that there are a number of startups and other companies that will be building competing decentralized social media products if [Twitter doesn’t.]”

Both Armstrong and Wood agree crypto and blockchain technology could spur growth around the world over the next decade. The world will see a substantial portion of GDP coming from the crypto economy in 10 to 20 years, similar to e-commerce, the two agreed. “People think they might have missed the opportunity when they see Bitcoin at $70,000, but we are in fairly early days,” Wood advised.

With recent moves in financial assets, particularly crypto, those that held since last year are hurting. Bitcoin prices are down 20% year to date and 40% below their peak reached in November 2021. ARK Invest’s CEO who’s funds own crypto and crypto-related assets, was an early investor in digital assets and blockchain technology. Coinbase is the fifth-largest holding of the ARK Innovation exchange-traded fund (ARKK), the company’s flagship product.

Paul Hoffman

Managing Editor, Channelchek

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Sources

https://milkeninstitute.org/video/crypto-pioneers-conversations

https://milkeninstitute.org/events/global-conference-2022/overview

https://www.youtube.com/watch?v=vSo5r4y8Gpo

https://www.barrons.com/articles/bitcoin-crypto-adoption-global-gdp-coinbase-ark-51651619611?mod=grayscale

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Information Services Group Announces First-Quarter 2022 Results and Increases Dividend by 33%

Research, News, and Market Data on Information Services Group

• Reports
  GAAP revenues of $73 million, an all-time quarterly high, exceeding
  guidance
• Reports
  net income of $5 million, GAAP EPS of $0.10 and adjusted EPS of $0.12, all
  first-quarter records
• Reports
  record adjusted EBITDA of $11 million, exceeding guidance
• Increases
  quarterly dividend by 33%, to $0.04 per share, effective with dividend
  payable June 17 to record holders as of June 3
• Sets
  second-quarter 2022 guidance: revenues between $73 million and $75 million
  and adjusted EBITDA of between $10 million and $11 million

STAMFORD, Conn.–(BUSINESS WIRE)– Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, today announced record financial results, including its highest quarterly revenues ever, for the first quarter ended March 31, 2022.

“ISG has begun 2022 in record fashion,” said Michael P. Connors, chairman and CEO. “We delivered our highest quarterly revenues ever, at $73 million, up 12 percent in constant currency, along with record profitability. Our growth to start the year continues our outstanding financial performance since the launch of our ISG NEXT operating model in 2020, underscoring our business momentum and supporting our decision to raise our quarterly dividend by 33 percent.”

Connors noted ISG also generated double-digit growth in recurring revenues, especially from its subscription research and platform businesses.

“Our strong performance reflects demand for our data, insights and advice, as clients continue to invest in technology to enable greater efficiency and faster growth. Our solution-centric approach and ISG iFlex delivery model allows us to serve specific client needs with greater delivery flexibility,” Connors said.

Connors said ISG sees market momentum continuing in 2022. “Demand continues to be strong, despite rising enterprise costs related to global inflation, continuing supply chain disruptions, geopolitical concerns, higher energy costs and high demand for tech talent,” he said.

During the first quarter, ISG continued to expand its ISG GovernX^® platform business with the acquisition of automated contracting solution Agreemint. The AI-powered contracting platform brings important new capabilities to the market-leading GovernX vendor compliance and risk management solution and will be used by ISG to add value to future platform solutions now in development.

First-Quarter 2022 Results

Reported revenues for the first quarter were a record $72.6 million, up 9 percent versus last year and up 12 percent in constant currency. Currency translation negatively impacted reported revenues by $1.9 million versus the prior year. Reported revenues were $41.4 million in the Americas, up 9 percent versus the prior year; $23.5 million in Europe, up 3 percent versus the prior year on a reported basis and up 10 percent in constant currency, and $7.7 million in Asia Pacific, up 34 percent versus the prior year on a reported basis and up 40 percent in constant currency.

ISG reported first-quarter operating income of $7.7 million, up 54 percent from $5.0 million in the first quarter of 2021. The firm also reported record first-quarter net income and fully diluted income per share of $4.9 million and $0.10, respectively, versus net income of $3.4 million and earnings per share of $0.07 in the prior year. Net income margin (calculated by dividing net income by reported revenues) increased to 6.8 percent, from 5.1 percent in the first quarter of 2021.

Adjusted net income (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) for the first quarter was $6.4 million, or $0.12 per share on a fully diluted basis, compared with adjusted net income of $5.5 million, or $0.10 per share on a fully diluted basis, in the prior year’s first quarter.

First-quarter adjusted EBITDA (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) reached a record $10.6 million, up 23 percent from the first quarter last year. Adjusted EBITDA margin (a non-GAAP measure calculated by dividing adjusted EBITDA by reported revenues) was 15 percent, up more than 165 basis points from the prior year.

Other Financial and Operating Highlights

ISG generated $4.1 million of cash from operations in the first quarter, versus $12.1 million in the prior year. The firm’s cash balance totaled $43.7 million at March 31, 2022, down from $47.5 million at the end of the prior year. During the first quarter, ISG repurchased $5.5 million of shares and paid down $1.1 million of debt. As of March 31, 2022, ISG had $73.4 million in debt outstanding, compared with $77.7 million at the end of the first quarter last year. At 1.8 times, the firm’s gross-debt-to-adjusted-EBITDA ratio (a non-GAAP measure calculated by dividing outstanding debt by adjusted EBITDA) was at a record low at March 31, 2022.

2022 Second-Quarter Revenue and Adjusted
EBITDA Guidance

“For the second quarter, ISG is targeting revenues of between $73 million and $75 million and adjusted EBITDA of between $10 million and $11 million,” said Connors. “We will continue to monitor the macroeconomic environment, including the impact of inflation and other factors, and adjust our business plans accordingly.”

Quarterly Dividend

The ISG Board of Directors approved a 33 percent increase in the quarterly dividend, from $0.03 per share to $0.04 per share, effective with the next quarterly dividend, payable on June 17, 2022, to shareholders of record on June 3, 2022.

Conference Call

ISG has scheduled a call for 9 a.m., U.S. Eastern Time, Tuesday, May 10, 2022, to discuss the company’s first-quarter results. The call can be accessed by dialing 1-800-304-0389; or, for international callers, by dialing +1 313-209-5140. The access code is 6633167. A recording of the conference call will be accessible on ISG’s website (www.isg-one.com) for approximately four weeks following the call.

Forward-Looking Statements

This communication contains “forward-looking statements” which represent the current expectations and beliefs of management of ISG concerning future events and their potential effects. Statements contained herein including words such as “anticipate,” “believe,” “contemplate,” “plan,” “estimate,” “target,” “expect,” “intend,” “will,” “continue,” “should,” “may,” and other similar expressions, are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future results and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. Those risks relate to inherent business, economic and competitive uncertainties and contingencies relating to the businesses of ISG and its subsidiaries including without limitation: (1) failure to secure new engagements or loss of important clients; (2) ability to hire and retain enough qualified employees to support operations; (3) ability to maintain or increase billing and utilization rates; (4) management of growth; (5) success of expansion internationally; (6) competition; (7) ability to move the product mix into higher margin businesses; (8) general political and social conditions such as war, political unrest and terrorism; (9) healthcare and benefit cost management; (10) ability to protect ISG and its subsidiaries’ intellectual property or data and the intellectual property or data of others; (11) currency fluctuations and exchange rate adjustments; (12) ability to successfully consummate or integrate strategic acquisitions; (13) outbreaks of diseases, including coronavirus, or similar public health threats or fear of such an event; and (14) engagements may be terminated, delayed or reduced in scope by clients. Certain of these and other applicable risks, cautionary statements and factors that could cause actual results to differ from ISG’s forward-looking statements are included in ISG’s filings with the U.S. Securities and Exchange Commission. ISG undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.

Non-GAAP Financial Measures

ISG reports all financial information required in accordance with U.S. generally accepted accounting principles (GAAP). In this release, ISG has presented both GAAP financial results as well as non-GAAP information for the three months ended March 31, 2022, and March 31, 2021. ISG believes that evaluating its ongoing operating results will be enhanced if it discloses certain non-GAAP information. These non-GAAP financial measures exclude non-cash and certain other special charges that many investors believe may obscure the user’s overall understanding of ISG’s current financial performance and the Company’s prospects for the future. ISG believes that these non-GAAP measures provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency of key measures used to evaluate the Company’s performance.

ISG provides adjusted EBITDA (defined as net income plus interest, taxes, depreciation and amortization, foreign currency transaction gains/losses, non-cash stock compensation, interest accretion associated with contingent consideration, acquisition-related costs, and severance, integration and other expense), adjusted net income (defined as net income plus amortization of intangible assets, non-cash stock compensation, foreign currency transaction gains/losses, interest accretion associated with contingent consideration, acquisition-related costs, and severance, integration and other expense, on a tax-adjusted basis), adjusted net income per diluted share, adjusted EBITDA margin, and selected financial data on a constant currency basis which are non-GAAP measures that the Company believes provide useful information to both management and investors by excluding certain expenses and financial implications of foreign currency translations, which management believes are not indicative of ISG’s core operations. These non-GAAP measures are used by ISG to evaluate the Company’s business strategies and management’s performance.

We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP financial measure, excludes the impact of year-over-year fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, thereby facilitating period-to-period comparisons of our business performance and is consistent with how management evaluates the Company’s performance. We calculate constant currency percentages by converting our current and prior-periods local currency financial results using the same point in time exchange rates and then compare the adjusted current and prior period results. This calculation may differ from similarly titled measures used by others and, accordingly, the constant currency presentation is not meant to be a substitution for recorded amounts presented in conformity with GAAP, nor should such amounts be considered in isolation.

Management believes this information facilitates comparison of underlying results over time. Non-GAAP financial measures, when presented, are reconciled to the most closely applicable GAAP measure. Non-GAAP measures are provided as additional information and should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the forward-looking non-GAAP estimates contained herein to the corresponding GAAP measures is not being provided, due to the unreasonable efforts required to prepare it.

About ISG

ISG (Information Services Group) (Nasdaq: 
III) is a leading global technology research and advisory firm. A trusted business partner to more than 800 clients, including 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

Information Services Group, Inc.
Condensed Consolidated Statement of Income and Comprehensive Income
(unaudited)
(in thousands, except per share amounts)
								Three Months Ended March 31,
									2022				2021
Revenues								$	72,563			$	66,571
Operating expenses
Direct costs and expenses for advisors									43,955				41,156
Selling, general and administrative									19,587				19,040
Depreciation and amortization									1,289				1,360
	Operating income								7,732				5,015
Interest income									45				71
Interest expense									(563	)			(643	)
Foreign currency transaction gain (loss)									24				(11	)
	Income before taxes								7,238				4,432
Income tax provision									2,308				1,008
	Net income							$	4,930			$	3,424
Weighted average shares outstanding:
	Basic								48,526				48,504
	Diluted								51,326				52,313
Earnings per share:
	Basic							$	0.10			$	0.07
	Diluted							$	0.10			$	0.07

 

Information Services Group, Inc.
Reconciliation from GAAP to Non-GAAP
(unaudited)
(in thousands, except per share amounts)
								Three Months Ended March 31,
									2022				2021
Net income								$	4,930			$	3,424
Plus:
	Interest expense (net of interest income)								518				572
	Income taxes								2,308				1,008
	Depreciation and amortization								1,289				1,360
	Interest accretion associated with contingent consideration								–				32
	Acquisition-related costs (1)								10				(45	)
	Severance, integration and other expense								110				135
	Foreign currency transaction (gain) loss								(24	)			11
	Non-cash stock compensation								1,503				2,148
Adjusted EBITDA								$	10,644			$	8,645
Net income								$	4,930			$	3,424
Plus:
	Non-cash stock compensation								1,503				2,148
	Intangible amortization								528				714
	Interest accretion associated with contingent consideration								–				32
	Acquisition-related costs (1)								10				(45	)
	Severance, integration and other expense								110				135
	Foreign currency transaction (gain) loss								(24	)			11
	Tax effect (2)								(681	)			(958	)
Adjusted net income								$	6,376			$	5,461
Weighted average shares outstanding:
	Basic								48,526				48,504
	Diluted								51,326				52,313
Adjusted earnings per share:
	Basic							$	0.13			$	0.11
	Diluted							$	0.12			$	0.10

 

(1)		Consists of expenses from acquisition-related costs and non-cash fair value adjustments on pre-acquisition contract liabilities.
(2)		Marginal tax rate of 32%, reflecting U.S. federal income tax rate of 21% plus 11% attributable to U.S. states and foreign jurisdictions.

 

Information Services Group, Inc.
Selected Financial Data
Constant Currency Comparison
							Three Months									Three Months
	Three Months			Constant			Ended			Three Months			Constant			Ended
	Ended			currency			March 31, 2022			Ended			currency			March 31, 2021
	March 31, 2022			impact			Adjusted			March 31, 2021			impact			Adjusted
Revenue	$	72,563		$	1,237		$	73,800		$	66,571		$	(722)		$	65,849
Operating income	$	7,732		$	234		$	7,966		$	5,015		$	(272)		$	4,743
Adjusted EBITDA	$	10,644		$	242		$	10,886		$	8,645		$	(279)		$	8,366

 

Source: Information Services Group, Inc.

Thursday, May 05, 2022

Tokens.com Corp. (SMURF)
Beefing Up the P2E Segment

Tokens.com Corp is a publicly traded company that invests in Web3 assets and businesses focused on the Metaverse, NFTs, DeFi, and gaming based digital assets. Tokens.com is the majority owner of Metaverse Group, one of the world’s first virtual real estate companies. Hulk Labs, a wholly-owned Tokens.com subsidiary, focuses on investing in play-to-earn revenue generating gaming tokens and NFTs. Additionally, Tokens.com owns and stakes crypto assets to earn additional tokens. Through its growing digital assets and NFTs, Tokens.com provides public market investors with a simple and secure way to gain exposure to Web3.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Adding More Assets. Tokens.com announced that the Company subsidiary, Hulk Labs, has acquired play-to-earn gaming assets in two platforms, Arcade Land and BitBrawl. Hulk Labs acquired land parcels in Arcade Land and avatar NFTs. The amounts invested in each platform were not disclosed.

Arcade Land Overview. Arcade Land is a Metaverse land-based world that focuses on gaming and play-to-earn. The world holds 10,000 unique plots where NFT holders can build out their parcel and allow other holders to visit, hangout, and play games. These holders can also build stores, place advertising, and sell items, in additional to the land holding yield earning potential, depending on the size, similar to Decentraland….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Image Credit: MIT News

Unpacking Black-Box Models

Adam Zewe | MIT News
Office

Modern machine-learning models, such as neural networks, are often referred to as “black boxes” because they are so complex that even the researchers who design them can’t fully understand how they make predictions.

To provide some insights, researchers use explanation methods that seek to describe individual model decisions. For example, they may highlight words in a movie review that influenced the model’s decision that the review was positive.

But these explanation methods don’t do any good if humans can’t easily understand them, or even misunderstand them. So, MIT researchers created a mathematical framework to formally quantify and evaluate the understandability of explanations for machine-learning models. This can help pinpoint insights about model behavior that might be missed if the researcher is only evaluating a handful of individual explanations to try to understand the entire model.

“With this framework, we can have a very clear picture of not only what we know about the model from these local explanations, but more importantly what we don’t know about it,” says Yilun Zhou, an electrical engineering and computer science graduate student in the Computer Science and Artificial Intelligence Laboratory (CSAIL) and lead author of a paper presenting this framework.

Zhou’s co-authors include Marco Tulio Ribeiro, a senior researcher at Microsoft Research, and senior author Julie Shah, a professor of aeronautics and astronautics and the director of the Interactive Robotics Group in CSAIL. The research will be presented at the Conference of the North American Chapter of the Association for Computational Linguistics.

Understanding Local Explanations

One way to understand a machine-learning model is to find another model that mimics its predictions but uses transparent reasoning patterns. However, recent neural network models are so complex that this technique usually fails. Instead, researchers resort to using local explanations that focus on individual inputs. Often, these explanations highlight words in the text to signify their importance to one prediction made by the model.

Implicitly, people then generalize these local explanations to overall model behavior. Someone may see that a local explanation method highlighted positive words (like “memorable,” “flawless,” or “charming”) as being the most influential when the model decided a movie review had a positive sentiment. They are then likely to assume that all positive words make positive contributions to a model’s predictions, but that might not always be the case, Zhou says.

The researchers developed a framework, known as ExSum (short for explanation summary), that formalizes those types of claims into rules that can be tested using quantifiable metrics. ExSum evaluates a rule on an entire dataset, rather than just the single instance for which it is constructed.

Using a graphical user interface, an individual writes rules that can then be tweaked, tuned, and evaluated. For example, when studying a model that learns to classify movie reviews as positive or negative, one might write a rule that says “negation words have negative saliency,” which means that words like “not,” “no,” and “nothing” contribute negatively to the sentiment of movie reviews.

Using ExSum, the user can see if that rule holds up using three specific metrics: coverage, validity, and sharpness. Coverage measures how broadly applicable the rule is across the entire dataset. Validity highlights the percentage of individual examples that agree with the rule. Sharpness describes how precise the rule is; a highly valid rule could be so generic that it isn’t useful for understanding the model.

Testing Assumptions

If a researcher seeks a deeper understanding of how her model is behaving, she can use ExSum to test specific assumptions, Zhou says.

If she suspects her model is discriminative in terms of gender, she could create rules to say that male pronouns have a positive contribution and female pronouns have a negative contribution. If these rules have high validity, it means they are true overall and the model is likely biased.

ExSum can also reveal unexpected information about a model’s behavior. For example, when evaluating the movie review classifier, the researchers were surprised to find that negative words tend to have more pointed and sharper contributions to the model’s decisions than positive words. This could be due to review writers trying to be polite and less blunt when criticizing a film, Zhou explains.

“To really confirm your understanding, you need to evaluate these claims much more rigorously on a lot of instances. This kind of understanding at this fine-grained level, to the best of our knowledge, has never been uncovered in previous works,” he says.

“Going from local explanations to global understanding was a big gap in the literature. ExSum is a good first step at filling that gap,” adds Ribeiro.

Extending the Framework

In the future, Zhou hopes to build upon this work by extending the notion of understandability to other criteria and explanation forms, like counterfactual explanations (which indicate how to modify an input to change the model prediction). For now, they focused on feature attribution methods, which describe the individual features a model used to make a decision (like the words in a movie review).

In addition, he wants to further enhance the framework and user interface so people can create rules faster. Writing rules can require hours of human involvement — and some level of human involvement is crucial because humans must ultimately be able to grasp the explanations — but AI assistance could streamline the process.

As he ponders the future of ExSum, Zhou hopes their work highlights a need to shift the way researchers think about machine-learning model explanations.

“Before this work, if you have a correct local explanation, you are done. You have achieved the holy grail of explaining your model. We are proposing this additional dimension of making sure these explanations are understandable. Understandability needs to be another metric for evaluating our explanations,” says Zhou.

Reprinted with permission of MIT News” and a link to the MIT News homepage ( http://news.mit.edu/)

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Wednesday, May 04, 2022

Blackboxstocks (BLBX)
E*Trade Integration and Mobile App Launch

Blackboxstocks, Inc. is a financial technology and social media hybrid platform offering real-time proprietary analytics and news for stock and options traders of all levels. Our web-based software employs “predictive technology” enhanced by artificial intelligence to find volatility and unusual market activity that may result in the rapid change in the price of a stock or option. Blackbox continuously scans the NASDAQ, New York Stock Exchange, CBOE, and all other options markets, analyzing over 10,000 stocks and up to 1,500,000 options contracts multiple times per second. We provide our users with a fully interactive social media platform that is integrated into our dashboard, enabling our users to exchange information and ideas quickly and efficiently through a common network. We recently introduced a live audio/video feature that allows our members to broadcast on their own channels to share trade strategies and market insight within the Blackbox community. Blackbox is a SaaS company with a growing base of users that spans 42 countries; current subscription fees are $99.97 per month or $959.00 annually. For more information, go to: www.blackboxstocks.com .

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

A Busy Day. Blackboxstocks’ management recently announced the release of the Company’s native mobile app on the iOS and Android app stores, as well as the integration with E*TRADE with the Blackbox platform.

Mobile App Launch. The Company officially completed the development of the Blackbox app and released it on Apple and Android phones. Recall, the app utilizes most of the features of the desktop site (over 90% according to the Company) while also giving the user real time alerts on their device even when not actively using the app….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Tuesday, May 03, 2022

TAAL Distributed Information Technologies (TAALF)
Reports 4Q21 Results

TAAL Distributed Information Technologies Inc. delivers value-added blockchain services, providing professional-grade, highly scalable blockchain infrastructure and transactional platforms to support businesses building solutions and applications upon the BitcoinSV platform, and developing, operating, and managing distributed computing systems for enterprise users.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

4Q21 Results. TAAL had previously pre-announced 4Q revenue in the $13.75-$14.25 million (CAD) range. Actual revenue came in at $14.7 million, with income before value adjustments of $8.1 million, and net income of $832,100, or $0.02 per share. We had projected revenue of $13.55 million, income before value adjustments of $8.9 million, and net income of $2.6 million, or $0.06 per share.

New Brunswick Facility Sale. TAAL has completed the sale of the New Brunswick facility purchased in December. TAAL will receive $24 million for the facility, which it will lease back. The purchaser has agreed to invest $20 million to upgrade the facility to host hashing operations. The net proceeds from the sale provides TAAL substantial liquidity.…

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Image Credit: Richard Patterson (Flickr)

SEC Nearly Doubles Size of Enforcement’s Crypto Assets and Cyber Unit

The Securities and Exchange Commission (SEC) just announced (May 3) that an additional 20 positions will be added to the unit responsible for protecting investors in crypto markets and from cyber-related threats. The newly renamed Crypto Assets and Cyber Unit (formerly known as the Cyber Unit) in the Division of Enforcement will expand to 50 staff members dedicated to the unit.

SEC Chairman Gary Gensler, who once taught blockchain and crypto at MIT, says the crypto industry is rife with fraud and abuse. He likens it to the “Wild West.”

“The U.S. has the greatest capital markets because investors have faith in them, and as more investors access the crypto markets, it is increasingly important to dedicate more resources to protecting them,” said Chairman Gensler. “The Division of Enforcement’s Crypto Assets and Cyber Unit has successfully brought dozens of cases against those seeking to take advantage of investors in crypto markets.

By nearly doubling the size of this key unit, the SEC expects to be better equipped to police wrongdoing in the cryptocurrency markets while continuing to identify disclosure and controls issues surrounding cybersecurity.” Since its creation in 2017, the unit has brought more than 80 enforcement actions related to fraudulent and unregistered crypto-asset offerings and platforms. This has resulted in monetary relief totaling more than $2 billion.

The expanded Crypto Assets and Cyber Unit will leverage the agency’s expertise to ensure investors are protected in the crypto markets, with a focus on investigating securities law violations related to:

• Crypto asset offerings
• Crypto asset exchanges
• Crypto asset lending and staking products
• Decentralized finance (“DeFi”) platforms
• Non-fungible tokens (“NFTs”)
• Stablecoins

In addition, the unit has brought actions against SEC registrants and public companies for failing to maintain adequate cybersecurity controls and for failing to appropriately disclose cyber-related risks and incidents.

The Crypto Assets and Cyber Unit will continue to tackle cyber-related threats to U.S. markets. “Crypto markets have exploded in recent years, with retail investors bearing the brunt of abuses in this space. Meanwhile, cyber-related threats continue to pose existential risks to our financial markets and participants,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “The bolstered Crypto Assets and Cyber Unit will be at the forefront of protecting investors and ensuring fair and orderly markets in the face of these critical challenges.” The expansion by 20 additional positions into the Crypto Assets and Cyber Unit will bolster the ranks of its supervisors, investigative staff attorneys, trial counsels, and fraud analysts in the agency’s headquarters in Washington, DC, as well as several regional offices.

Paul Hoffman

Managing Editor, Channelchek

Suggested Reading

Cryptocurrencies in 2022, a View from Academics

The SEC Wants to Extend Investor Protections to Crypto Platforms

Metaverse: Is The Future Real? – Panel Presentation from NobleCon18

The World Is HOT Right Now! – Panel Presentation from NobleCon18

Source

https://www.sec.gov/news/press-release/2022-78

 

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