Revenue increased 192% to
Third Quarter 2023 Highlights
- Revenue increased 192% to
$15.3 million compared to$5.3 million in the prior year period - Gross margin increased 57% to
$3.4 million compared to$2.1 million in the prior year period
Financial Results for the Three Months Ended
- Revenue was
$15.3 million , an increase of$10.0 million or 192% compared to$5.3 million for the same period of 2022, which was driven by the Big Village Acquisition, and was partially offset by macroeconomics factors, coupled with an overall reduction in spending by some partners due to inflationary concerns, which has led to lower than normal rates and lower earnings.
Advertising technology revenue was approximately
- Cost of revenue increased to
$11.9 million as a result of new cost associated with our new revenue offerings from the Big Village Acquisition, inclusive of direct salary and labor cost of approximately$2.7 million for employees that work directly on customer projects, and direct project costs of approximately$3.5 million for payments made to third-parties that are directly attributable to completion of projects to allow for revenue recognition and$2.9 million for non-direct project cost. - General and administrative expense was
$4.1 million , an increase of 24%, compared to$3.3 million in the same period of 2022. - Impairment of goodwill and intangibles increased approximately
$16.3 million , or 100% compared to the same period of 2022. The Company performed an assessment of its goodwill and intangible assets, the assessment indicated that the carrying value was in excess of its implied fair value, resulting in an impairment charge. - Gross margin was
$3.4 million , an increase of 57%, compared to$2.1 million in the same period of 2022. - Net loss was
$19.8 million , an increase of 786%, compared to a$2.2 million net loss in the same period of 2022.
Adjusted EBITDA profit was
Financial Results for the Nine Months ended
- Revenue was
$29.4 million , an increase of$15.0 million or 104% compared to$14.4 million for the same period of 2022.
Advertising technology revenue was approximately
- Cost of revenue increased to
$22.1 million and includes direct salary and labor cost of approximately$5.2 million , direct project costs of approximately$6.1 million and non-direct project cost. of approximately$5.3 million . - General and administrative expense was
$14.9 million , an increase of 41%, compared to$10.6 million in the same period of 2022. - Gross margin was
$7.3 million , an increase of 10%, compared to$6.7 million in the same period of 2022. - Net loss was
$29.6 million , an increase of 411%, compared to a$5.8 million net loss in the same period of 2022. - Adjusted EBITDA loss was
$3.6 million compared to Adjusted EBITDA loss of$1.8 million in the same period of 2022. See the below section on Non-GAAP Financial Measure for a reconciliation of net loss to EBITDA and Adjusted EBITDA.
About
Forward-Looking Statements for
This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties. Such forward-looking statements can be identified by the use of words such as “should,” “may,” “intends,” “anticipates,” “believes,” “estimates,” “projects,” “forecasts,” “expects,” “plans,” and “proposes,” and similar words. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including, without limitation, statements made with respect to expectations of our ability to successfully integrate acquisitions, and the realization of any expected benefits from such acquisitions. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading “Risk Factors” in
Contact / Investor Relations:
Email:corp@otcprgroup.com
Tel: (561) 807-6350
https://otcprgroup.com
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share figures)
Three Months Ended | Nine Months Ended | |||||||||||||||
Revenue | $ | 15,289 | $ | 5,244 | $ | 29,403 | $ | 14,420 | ||||||||
Cost of revenue | 11,927 | 3,098 | 22,059 | 7,726 | ||||||||||||
Gross margin | 3,362 | 2,146 | 7,344 | 6,694 | ||||||||||||
General and administrative expenses | 4,121 | 3,323 | 14,923 | 10,616 | ||||||||||||
Impairment of goodwill and intangibles | 16,259 | — | 16,259 | — | ||||||||||||
Loss from operations | (17,018 | ) | (1,177 | ) | (23,838 | ) | (3,922 | ) | ||||||||
Financing (expense) income | ||||||||||||||||
Gain on forgiveness of PPP loan | — | — | — | 1,137 | ||||||||||||
Other income | 34 | 18 | 415 | 58 | ||||||||||||
Interest expense - | (2,769 | ) | (1,050 | ) | (6,176 | ) | (3,050 | ) | ||||||||
Interest expense - Convertible Promissory Notes - related party | (6 | ) | (6 | ) | (17 | ) | (17 | ) | ||||||||
Other interest expense | (8 | ) | (15 | ) | (18 | ) | (10 | ) | ||||||||
Total financing (expense) | (2,749 | ) | (1,053 | ) | (5,796 | ) | (1,882 | ) | ||||||||
Net loss before income tax | (19,767 | ) | (2,230 | ) | (29,634 | ) | (5,804 | ) | ||||||||
Income tax provision | — | — | — | — | ||||||||||||
Net loss | (19,767 | ) | (2,230 | ) | (29,634 | ) | (5,804 | ) | ||||||||
Dividends | ||||||||||||||||
Preferred stock dividends | — | (1 | ) | — | (3 | ) | ||||||||||
Net loss attributable to common shareholders | $ | (19,767 | ) | $ | (2,231 | ) | $ | (29,634 | ) | $ | (5,807 | ) | ||||
Foreign currency translation | 57 | 37 | 190 | 54 | ||||||||||||
Comprehensive loss | $ | (19,710 | ) | $ | (2,194 | ) | $ | (29,444 | ) | $ | (5,753 | ) | ||||
Net loss per common share | ||||||||||||||||
Basic and diluted | $ | (0.12 | ) | $ | (0.01 | ) | $ | (0.18 | ) | $ | (0.04 | ) | ||||
Weighted-average common shares outstanding | ||||||||||||||||
Basic and diluted | 171,285,150 | 149,159,461 | 162,670,182 | 149,140,312 |
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share figures)
2023 | 2022* | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 2,780 | $ | 316 | ||||
Accounts receivable, net | 16,161 | 3,585 | ||||||
Prepaid expenses and other current assets | 813 | 600 | ||||||
Total Current Assets | 19,754 | 4,501 | ||||||
Property and equipment, net | 176 | 40 | ||||||
Intangible assets, net | 16,189 | 4,510 | ||||||
8,349 | 19,645 | |||||||
Operating lease right-of-use asset, non-current | 321 | 367 | ||||||
Other assets, non-current | 187 | 137 | ||||||
Total Assets | $ | 44,976 | $ | 29,200 | ||||
LIABILITIES AND SHAREHOLDERS' (DEFICIT) | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued expenses | $ | 14,375 | $ | 10,317 | ||||
Other current liabilities | 4,697 | 1,344 | ||||||
Interest payable – 10% Convertible Promissory Notes - related party | 37 | 31 | ||||||
Deferred revenue | 4,489 | 737 | ||||||
Note payable – 10% Convertible Promissory Notes, net of discount – related party | 78 | 68 | ||||||
Note payable – | 4,716 | 4,860 | ||||||
Total Current Liabilities | 28,392 | 17,357 | ||||||
Other liabilities, non-current | 364 | 494 | ||||||
Note payable – | 56,723 | 25,101 | ||||||
Operating lease liability, non-current | 269 | 319 | ||||||
Total Liabilities | 85,748 | 43,271 | ||||||
Shareholders' Deficit | ||||||||
Convertible preferred stock, par value | ||||||||
Common stock, par value 0.01, 324,000,000 shares authorized, 172,126,629 and 150,444,636 issued and 171,301,454 and 149,619,461 outstanding at | 1,721 | 1,504 | ||||||
(220 | ) | (220 | ) | |||||
Additional paid-in capital | 101,323 | 98,797 | ||||||
Accumulated deficit | (143,903 | ) | (114,269 | ) | ||||
Accumulated other comprehensive income | 307 | 117 | ||||||
Total shareholders’ deficit | (40,772 | ) | (14,071 | ) | ||||
Total liabilities and shareholders' deficit | $ | 44,976 | $ | 29,200 |
*Derived from audited consolidated financial statements.
RECONCILIATION OF NET LOSS TO NON-GAAP EBITDA AND ADJUSTED EBITDA
(in thousands)
Non-GAAP Financial Measure
Non-GAAP results are presented only as a supplement to the financial statements based on
All of the items included in the reconciliation from net loss to EBITDA and from EBITDA to Adjusted EBITDA are either (i) non-cash items (e.g., depreciation, amortization of purchased intangibles, stock-based compensation, etc.) or (ii) items that management does not consider to be useful in assessing the Company's ongoing operating performance (e.g., M&A costs, income taxes, gain on sale of investments, loss on disposal of assets, etc.). In the case of the non-cash items, management believes that investors can better assess the Company's operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect the Company's ability to generate free cash flow or invest in its business.
We use, and we believe investors benefit from the presentation of, EBITDA and Adjusted EBITDA in evaluating our operating performance because it provides us and our investors with an additional tool to compare our operating performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations. We believe that EBITDA is useful to investors and other external users of our financial statements in evaluating our operating performance because EBITDA is widely used by investors to measure a company's operating performance without regard to items such as interest expense, taxes, and depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired.
Because not all companies use identical calculations, the Company's presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. However, these measures can still be useful in evaluating the Company's performance against its peer companies because management believes the measures provide users with valuable insight into key components of GAAP financial disclosures.
A reconciliation of net loss to EBITDA and Adjusted EBITDA is as follows:
Three Months Ended | Nine Months ended | |||||||||||||||
Net loss before tax plus: | $ | (19,767 | ) | $ | (2,230 | ) | $ | (29,634 | ) | $ | (5,804 | ) | ||||
Depreciation expense | 38 | 12 | 84 | 24 | ||||||||||||
Amortization of intangibles | 829 | 387 | 1,943 | 1,173 | ||||||||||||
Impairment of goodwill and intangibles | 16,259 | — | 16,259 | — | ||||||||||||
Amortization of debt discount | 594 | 309 | 1,438 | 923 | ||||||||||||
Other interest expense | 8 | 14 | 18 | 10 | ||||||||||||
Interest expense – | 2,181 | 747 | 4,754 | 2,144 | ||||||||||||
EBITDA profit (loss) | 142 | (761 | ) | (5,138 | ) | (1,530 | ) | |||||||||
Stock compensation expense | 56 | 38 | 114 | 214 | ||||||||||||
Gain on forgiveness of PPP loan | — | — | — | (1,137 | ) | |||||||||||
Non-restructuring severance expense | 85 | — | 322 | 30 | ||||||||||||
Non-recurring professional fees | — | 350 | 685 | 657 | ||||||||||||
Non-recurring legal fees | — | — | 384 | — | ||||||||||||
Adjusted EBITDA profit (loss) | $ | 283 | $ | (373 | ) | $ | (3,633 | ) | $ | (1,766 | ) |
Source:
2023 GlobeNewswire, Inc., source