Update on VNUE by CEO Zach Bair

October 14, 2020

Dear VNUE Shareholders,

After we announced the Beta testing of our Soundstr technology, a huge milestone for the company, there have been quite a few questions about how things are going, etc., and maybe a little chance for you to get to know me better.  I believe we picked up a few new shareholders too, so thank you for that. 

Here are a few of the questions we have received, and my answers and a bit of dialogue for you.

How are the beta tests going thus far?

The beta tests are doing great.  Data is being produced as expected, and music is being identified 99% of the time or above.  The main reason for these tests (other than to make sure we can identify music) is to make sure the install process is as seamless as possible, and we are working with our beta testers to get this process down to an art form.

How many Units and stations are involved in the beta test?

We have approximately a dozen in total so far, with more being added.  This number is being kept deliberately low for now, so that we have time to interface with each of the beta testers and get feedback.  We do expect these beta testers to turn into commercial clients, however, and one of the testers actually consults for a couple hundred radio stations, many of whom are anxious for the technology.

Will additional funding be needed to move to the next phase?

Yes.  As we have stated publicly, we are raising a $3mm round of funding for the next phase.  This will be accretive to the value of the company, most likely a strategic partner or a preferred offering of some kind, either an equity or a debt instrument, based upon how the participants want to structure the investment, or possibly through a commercial agreement with a potential client (or clients).  The good news here is that we already have 400+ units in our warehouse that will be ready to go to their new homes, so we will be able to scale relatively quickly.  To be clear, we are mainly focusing on radio first, although we are also testing in a few physical locations too.

When is the expected completion date of the beta test and the expect month of the full launch?

We expect to start our launch sometime in the 4th quarter, as I’ve mentioned previously.  This is somewhat dependent upon our funding, and also to a small degree, dependent upon our third-party partners.  But, that said, I believe we are in good shape.

Are there plans for a share buy-back in the future?

As many of you know, I believe (as does my team) that we are extremely undervalued.  We do in fact hope to be able to do some kind of a buy-back and reduce some of the shares on the market once we have our funding round closed, which will be a step toward correction.  As I have also stated publicly, we had to take a few convertible notes at a time when no other funding was available to us, and therefore took dilution that no one wanted.  The plan was to have our preferred round in sooner, so that we could simply pay off these notes that have since converted, but unfortunately, as we all know, the COVID hit.

Do you intend for the share structure to remain the same?

At this time there are no immediate plans for any corporate actions to change the share structure.  I’ve always said that my goal with VNUE is to build value through execution, and that this venture is a marathon, not a sprint.  I will repeat that often.  That said, I have publicly stated numerous times that we want to eventually uplist, for example, to NASDAQ, where value can truly be built, and in order to do that we may have to look at some capital changes at that time, or when we are able to close a major funding round ahead of that.  But for the time being, our plan is to continue slogging away. 

Can we get more frequent updates?  Do you have news?

As I’ve said before, we put out news when there is really something to talk about, and I cannot talk about anything to you individually that has not already been made public.  Technology cycles can be long and difficult in some cases, and in our case, we are trying to change the world (so to speak), so that does take some time.  Rest assured that even when there isn’t news to report, that there is important work going on in the background toward our goals.  We do not put out fluff.  I am however going to try and provide more frequent updates and commentary.  We are a very small team, pulled in many directions, but I will do my best to provide more communication, through press releases, and/or my blog on the VNUE website.

I have seen news about your music.  How does that impact VNUE?

Well the good news here is that everything I do is about music, and everything I do has a positive impact on VNUE by design.  It is all connected.  What many of you may not know about me is that I am a serial multitasker, including being a musician, like many of my colleagues in VNUE.  Some people call me a “renaissance man.”  Maybe I had ADHD as a kid, I don’t know (back in those days they simply called it “ADD” ha).   I’ve probably had about 20+ interviews in the last several weeks about my efforts in suicide awareness, a super important cause for me, and my single, “Ordinary Girl.”  In almost every one of these interviews – some of them with high-profile bloggers, or on radio or TV, I am asked about Soundstr and how in VNUE we are trying to get artists and songwriters paid.  This has been a topic of very high interest.  The response has been incredible and has helped raise VNUE’s profile substantially.  I will take every opportunity provided to me to talk about what we are doing, and how we want to change this industry.  I’ve seen a number of you follow me on my artist Youtube channel as well as the VNUE channel (where I repost many of these interviews), so thank you for that, and again, thank you for your belief in what we are doing with VNUE.

To view press clips and some of my interviews, see below.  Going forward, each time I am interviewed I will also try and included this in a VNUE alert.

I’ve also heard about another project you are working on?  Any impact there?

Correct.  I have recently partnered with the former president of Hard Rock Café International and my advisor Jock Weaver to roll out my restaurant/venue/bar concept, RockHouse Live, internationally.  I started RockHouse many years ago and have a couple of locations that have basically been prototype locations.  It was my direct experience with RockHouse that provided me the passion to take on the very broken royalty system status quo, and to eventually facilitate the acquisition of the Soundstr technology and put us on the trajectory that we are on now.  Jock took Hard Rock from a small $750k business to a $200mm enterprise valuation.  Of course, as you can see, this also ties directly into VNUE, which has always been my plan (remember – everything I do is music related).  Importantly, each location will feature VNUE’s Soundstr technology, as well as our set.fm “instant live” recording functionality, so that patrons can go home with a copy of what they just heard, and so that songwriters and artists whose work is played in the venues will actually get paid.  This is a very tech driven concept, and VNUE plays a large role in it.

What is your philosophy when it comes to VNUE?

I love this company, I love this team, and I love what we are doing as a business.  I do not believe in artificial value-building through corporate actions or through other means typically leveraged in micro-cap companies.  Some “companies” (and I say that term loosely) create a churn, a cycle, where the principles pound out convertible notes, reverse the stock, and do it all over again.  This is not VNUE, and not my philosophy.  VNUE is a real company, with valuable IP, and honestly the best executive team I have ever worked with.

When I took the position as CEO of VNUE four years ago – when it barely had a pulse, with no actionable technology, no funding, and lagging two years behind in its SEC filings, I knew this was going to be a big challenge.  But I also knew that I could bring my past experience, relationships, and technology knowledge to bear, and eventually build real and sustainable value.   Remember – “marathon, not a sprint.”

VNUE is not a “shell game,” as I call it, to me or my team, or our supporters.  We ferociously believe in this company, all of whom are currently taking small or no salary.  We want to change the way an industry has been done for a hundred years.  We want to get artists and songwriters paid.  We want businesses treated fairly when it comes to what they are charged for music licensing. We want to fix a broken and unfair system.  This is what drives me more than anything.  Disruption.  Positive change.

I believe that the company should appreciate in value organically, through our continued execution.  And if you look at the history of the company since I have been CEO, we have accomplished nothing short of what I would call miracles on a razor-thin budget.  And, if you look at the executive team as a whole, we have all run big, major organizations and many of us in the entrepreneurial space have had successful exits.  That comes through hard work and focus, not shortcuts.

So – and this is my opinion of course – if you are in this for a short-term profit, which no doubt some of you are, then that’s all well and good and you might make a couple of bucks.  However, if you are in this for the long haul, and you believe in the company, there will be ups and downs along the way, but at the end of the day we have a huge market opportunity, the IP, and the team to deliver it, and I personally believe that together we can build incredible value.

It takes me back to the days when Apple’s share price was basically nothing.  I was always an Apple believer.  Steve Jobs, whether he knew it or not, launched my career.  His ethic was a role model for me.  His innovation was my inspiration.  And still, to this day, I am surrounded by Apple equipment.  But if I had bought some Apple shares back in the day… well, you know.

I’m not saying we are Apple.  But I am saying we have something pretty special here, and I hope you take the ride with me and my team.  Because, to me, this is where the real fun starts.

What do you do for hobbies?

Great question.  What’s a hobby (ha)?   Well, I don’t really have hobbies.  My work and music pretty much consume me.  I guess that is what you would call my “hobby,” although it can more appropriately be called my passion.  More than once I have been told that I am the most tenacious person someone can meet.  I love changing and disrupting (making better), and I love trying to change the world.  Every startup I have had – from my first, Voyence, to Immediatek, my first public company, to VNUE – has been about changing the way things have been done to improve the life of others and to make them happy.  To improving life through automation and innovation.  And I genuinely love that.  Before I got involved in startups, I was often told that I was trying to “automate myself out of a job.”  So, I am up at 6:30 every day and generally until 10:30 or 11 (later if I am working a VNUE client show or my own show).   And that day for the great majority is devoted to VNUE.  I also have fur babies (dogs), which I love, and try to walk them daily so I am not glued to a computer screen to the point of it being unhealthy.  I like to cook, and of course, play guitar, sing, and write music, and I go to the gym a few times a week (which is not really something I enjoy, but I know I must do).

In Closing

I hope that the above commentary and answers to some of your questions give you a little more insight into VNUE, our goals, and our ethic; and I hope this also gives you a little more insight into my personality and what drives me as well as my team.  For those of you who have invested with the company, thank you so much for your belief.  I want to assure you that each and every day we are working toward making your investment valuable, and I appreciate you being along for the ride.  For those of you considering an investment – I can’t tell you to do one thing or another, but what I can say is that we have an incredible opportunity, and we will be doing everything we can for VNUE’s success, so I hope you will join us in this adventure to make history.  But please remember this is a marathon, not a sprint, and there are no shortcuts.  There will be ups and downs, but together, we will get there.  And as I have quoted Steve Jobs before, “Stay Hungry.  Stay foolish.”  Because that is how we affect real change.

All the best,

Zach Bair

CEO

SELECT LINKS:

Noise11 Australia with Paul Cashmere – http://www.noise11.com/news/businessman-by-day-musician-by-night-zach-bair-channels-song-into-suicide-awareness-20200917

Rock Talk with Mitch Lafon – https://www.youtube.com/watch?v=PObrh7X3kM0

Bladtcast with Christian Bladt – https://www.youtube.com/watch?v=Gu3YjcdXY68

Dr. Music (Scott Itter) – http://drmusic.org/Zach_Bair_rev_intvw.html

Zach Martin – https://www.youtube.com/watch?v=nPPGt2887Hk

News 12 NYC/NJ (suicide awareness) – http://newjersey.news12.com/story/42588948/musician-donates-portion-of-proceeds-of-new-single-to-nj-suicide-prevention-organization

Food & Bev (music, tech, pandemic) – https://www.fb101.com/2020/08/zach-bair-rises-up-to-meet-the-moment-fueled-by-the-pandemic-longtime-music-entrepreneur-tech-guru-releases-new-rock-single-and-ep/

WESH NBC2 – Orlando (suicide prevention) – https://www.wesh.com/article/song-donation-for-suicide-prevention-how-you-can-help/34273396

WMC NBC5 – Memphis (suicide prevention) – https://www.wmcactionnews5.com/2020/10/08/stepping-up-memphis-music-artist-hosting-benefit-concert-suicide-prevention-awareness/

Safe Harbor Statement

This press release may contain forward-looking statements which are based on current expectations, forecasts, and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially from those anticipated or expected, including statements related to the amount and timing of expected revenues and any payment of dividends on our common stock, statements related to our financial performance, expected income, distributions, and future growth for upcoming quarterly and annual periods and the other risks set forth in Company’s filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q as filed from time to time. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors. We have incurred and will continue to incur significant expenses in the expansion of our existing and new service lines, noting there is no assurance that we will generate enough revenues to offset those costs in both the near and long term. All forward-looking statements speak only as of the date of this press release. We undertake no obligation to update any forward-looking statements or other information contained herein. Stockholders and potential investors should not place undue reliance on these forward-looking statements.

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