DOOH-Focused AI Computer Vision Start-up Alfi Adds CMS Partner Amidst Legal Issues
February 14, 2022 by Dave Haynes
I’d put this in the category of rabbit-holes one can sometimes end up down when looking into something – in this case an AI computer vision startup serving DOOH companies that has found itself in a post-IPO class-action lawsuit.
I was doing a never-heard-of-them look into a company called Alfi because a press release out late last week listed a partnership with well-established digital signage CMS 22 Miles. Partnership announcements are near-daily in the space, so I don’t tend to cover them – unless one of the partners is unfamiliar and/or new to the business.
In this case, it’s a Miami firm started in 2018, doing the well-established work of using AI/machine learning for real-time audience analytics: using computer vision to anonymously characterize viewers and tuning the messaging to that audience. There are numerous companies – notably Quividi, AdMobilize, VSBLTY and SightCorp – doing versions of this, some going back more than a decade.
From its website:
Alfi, Inc. engages in creating interactive digital out-of-home advertising experiences. Alfi utilizes artificial intelligence and computer vision to better serve ads to people. Alfi’s proprietary Ai algorithm understands small facial cues and perceptual details that make potential customers a good candidate for a particular product.
A little Googling got me quickly to press releases from law firms rounding up participants for a class action lawsuit that has been filed on behalf of investors who purchased or otherwise acquired shares in Alfi in its IPO last year. The lawsuit (stating the obvious here that a lawsuit involves allegations, not findings) complains that executives now on leave “made materially false and misleading statements regarding the Company’s business, operations, and prospects.”
On or about May 4, 2021, Alfi conducted its IPO, selling approximately 3.7 million shares of common stock and 3.7 million warrants at $4.15 per both share and warrant.
On October 28, 2021, Alfi revealed that its Board of Directors had placed the Company’s President and Chief Executive Officer, its Chief Financial Officer and Treasurer, and its Chief Technology Officer “on administrative leave [pending] an independent internal investigation regarding certain corporate transactions and other matters.” It also stated that on October 28, 2021, Alfi terminated the CTO’s employment.
On this news, Alfi’s stock price fell $1.18, or 22%, to close at $4.42 per share on October 29, 2021, thereby injuring investors.
On November 1, 2021, Alfi disclosed that the Chair of its Audit Committee resigned. The Company also stated that its internal investigation was into “the Company’s purchase of a condominium for a purchase price of approximately $1.1 million” and the “Company’s commitment to sponsor a sports tournament in the amount of $640,000,” both of which “were undertaken by the Company’s management without sufficient and appropriate consultation with or approval by the Board.”
On November 15, 2021, Alfi stated that it “received a letter from the staff of the [SEC] indicating that the Company, its affiliates and agents may possess documents and data relevant to an ongoing investigation being conducted by the staff of the SEC.”
On November 16, 2021, Alfi stated that it could not timely file its quarterly report on Form 10-Q for the period ended September 30, 2021.
On this news, the Company’s stock price fell $0.24, or 5%, to close at $4.37 per share on November 16, 2021.
The complaint filed alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that:
- (i) Alfi maintained deficient disclosure controls and procedures and internal control over financial reporting;
- (ii) as a result, the Company and its employees could and did engage in corporate transactions and other matters without sufficient and appropriate consultation with or approval by the Company’s Board of Directors;
- (iii) all the foregoing increased the risk of internal and regulatory investigations into the Company and its employees;
- (iv) all the foregoing, once revealed, was likely to have a material negative impact on the Company’s reputation, financial condition, and ability to timely file periodic reports with the SEC;
- and (v) as a result, the Company’s public statements were materially false and misleading at all relevant times.
That noted, the company is being run by an interim CEO and doing the keep-calm-and-carry-on thing. It has engaged an independent auditor to look at the financials, and has been doing announcements, like adding DOOH ad totems at Baltimore’s busy airport, and working with 22 Miles.
Says the 22 Miles PR:
The collaboration will marry 22Miles’ content management system (CMS), PublisherPro.AioT, with Alfi’s SaaS technology, to provide brands and location owners audience data-driven experiences, audience matching, insights, and analytics in a privacy-compliant manner.
Alfi’s cutting-edge computer vision with machine learning technology now enables 22Miles to precisely match the content displayed on their kiosks to thousands, if not millions, of consumers that need guidance and understanding of large physical environments, such as airports, transportation hubs, casinos, shopping centers or office spaces. The coupling of Alfi and 22 Miles’ technology results in an enhanced user experience that provides relevant content and a state-of-the-art wayfinding solution.
“22Miles is known for its comprehensive all-in-one digital signage solution in popular locations that deliver information to consumers at key decision points, creating the perfect opportunity to integrate with Alfi to ensure clients effectively connect, inform and impress consumers with the most relevant information,” says Peter Bordes, Interim CEO and Board Member at ALFI.
With the increasing interest in Digital Out-of-Home (DOOH) metrics from ad executives and the success more than 2,300 global clients have seen with 22Miles’ award-winning platform, brands and location owners will now be able to create, import, manage, and customize immersive and engaging content through the likes of interactive video walls, 3D wayfinding, and mobile solutions.