Successful full-year 2023 fuels revenue growth by 128%
- Fourth quarter revenue increased 193% to
$15.1 million compared to the fourth quarter of 2022. - Fourth quarter gross margin increased 71% to
$4.1 million compared to the fourth quarter of 2022. - 2023 revenue increased 128% to
$44.5 million , compared to the full-year of 2022. - Gross margin increased 41% to
$12.8 million , compared to the full-year of 2022.
Financial Results for the Three Months Ended
- Revenue was
$15.1 million , an increase of$10.0 million , or 193%, compared to$5.2 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 customers due to inflationary concerns, which has led to lower than normal rates and lower earnings.
Advertising technology revenue was approximately
- Cost of revenue was
$11 .1 million, an increase of$8 .3 million, or 299%, compared to$2 .8 million for the same period in 2022. The increase is a result of new costs associated with our new revenue offerings from the Big Village Acquisition, inclusive of direct salary and labor cost of approximately$2 .2 million for employees that work directly on customer projects, and direct project costs of approximately$4 .2 million for payments made to third-parties that are directly attributable to completion of projects to allow for revenue recognition,$2 .4 million for non-direct project cost and legacy publisher cost of$2 .2 million which increased by 17%. - General and administrative expense was
$6.3 million , an increase of 75%, compared to$3.6 million in the same period of 2022. - Gross margin was
$4.1 million , an increase of 71%, compared to$2.4 million in the same period of 2022. - Net loss was
$5.9 million , an increase of 156%, compared to a$2.3 million net loss in the same period of 2022. - Adjusted EBITDA loss was
$616,000 compared to Adjusted EBITDA loss of$694,000 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.
Financial Results for the Year Ended
- Revenue was
$44.5 million , an increase of$25.0 million , or 128%, compared to$19.6 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 customers due to inflationary concerns, which has led to lower than normal rates and lower earnings. The new offerings we acquired as part of the Big Village Acquisition were consumer insights, creative services, and media services.
Advertising technology revenue was approximately
- Cost of revenue was
$31 .8 million, an increase of$21 .3 million, or 203%, compared to$10 .5 million for the same period in 2022. The increase is a result of new costs associated with our new revenue offerings from the Big Village Acquisition, inclusive of direct salary and labor cost of approximately$7.4 million for employees that work directly on customer projects, and direct project costs of approximately$10.2 million for payments made to third-parties that are directly attributable to completion of projects to allow for revenue recognition,$6.4 million for non-direct project cost and legacy publisher cost of$5.9 million which decreased by 2% . - General and administrative expense was
$22.5 million , an increase of 59%, compared to$14.2 million in the same period of 2022. - The Company performed an assessment of its goodwill and intangible assets for the Ad Network, Owned & Operated, and Insights reporting units. The assessment indicated that the carrying value was in excess of its implied fair value for the Ad Network and Owned & Operated reporting units, resulting in an impairment charge of
$14.1 million and$2.9 million for goodwill and intangibles, respectively. There was no such charge for the same period in 2022. - Gross margin was
$12.8 million , an increase of 41%, compared to$9.1 million in the same period of 2022. - Net loss was
$35.6 million , an increase of 338%, compared to a$8.1 million net loss in the same period of 2022. - Adjusted EBITDA loss was
$3.9 million compared to Adjusted EBITDA loss of$2.5 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 data)
Three Months Ended | Year Ended | |||||||||||||||
Revenue | $ | 15,143 | $ | 5,160 | $ | 44,546 | $ | 19,580 | ||||||||
Cost of revenue | 11,053 | 2,767 | 31,766 | 10,493 | ||||||||||||
Gross margin | 4,090 | 2,393 | 12,780 | 9,087 | ||||||||||||
General and administrative expenses | 6,252 | 3,574 | 22,522 | 14,155 | ||||||||||||
Impairment of goodwill and intangibles | 812 | — | 17,070 | — | ||||||||||||
Loss from operations | (2,974 | ) | (1,181 | ) | (26,812 | ) | (5,068 | ) | ||||||||
Financing (expense) income | ||||||||||||||||
Gain on forgiveness of PPP loan | — | — | — | 1,137 | ||||||||||||
Other income | 22 | 46 | 437 | 69 | ||||||||||||
Interest expense - | (2,967 | ) | (1,178 | ) | (9,142 | ) | (4,227 | ) | ||||||||
Interest expense - Convertible Promissory notes - related party | (4 | ) | (6 | ) | (20 | ) | (22 | ) | ||||||||
Other interest expense | (8 | ) | (3 | ) | (27 | ) | (14 | ) | ||||||||
Total financing (expense) | (2,957 | ) | (1,141 | ) | (8,752 | ) | (3,057 | ) | ||||||||
Net loss before income tax | (5,931 | ) | (2,322 | ) | (35,564 | ) | (8,125 | ) | ||||||||
Income tax provision | — | — | — | — | ||||||||||||
Net loss | (5,931 | ) | (2,322 | ) | (35,564 | ) | (8,125 | ) | ||||||||
Dividends | ||||||||||||||||
Preferred stock dividends | — | (1 | ) | — | (5 | ) | ||||||||||
Net loss attributable to common stockholders | $ | (5,931 | ) | $ | (2,323 | ) | $ | (35,564 | ) | $ | (8,130 | ) | ||||
Foreign currency translation | (45 | ) | 51 | 145 | 105 | |||||||||||
Comprehensive loss | $ | (5,976 | ) | $ | (2,272 | ) | $ | (35,419 | ) | $ | (8,025 | ) | ||||
Net loss per common share: | ||||||||||||||||
Basic and diluted | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.22 | ) | $ | (0.04 | ) | ||||
Weighted average shares outstanding | ||||||||||||||||
Basic and diluted | 171,301,201 | 149,317,722 | 164,845,671 | 149,191,057 |
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 4,001 | $ | 316 | ||||
Accounts receivable, net | 14,679 | 3,585 | ||||||
Prepaid expenses and other current assets | 1,057 | 600 | ||||||
Total Current Assets | 19,737 | 4,501 | ||||||
Property and equipment, net | 199 | 40 | ||||||
Intangible assets, net | 15,234 | 4,510 | ||||||
7,785 | 19,645 | |||||||
Operating lease right-of-use asset | 306 | 367 | ||||||
Other assets, non-current | 156 | 137 | ||||||
Total Assets | $ | 43,417 | $ | 29,200 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued expenses | $ | 17,497 | $ | 10,317 | ||||
Other current liabilities | 3,025 | 1,344 | ||||||
Interest payable – 10% Convertible Promissory Notes – related party | 39 | 31 | ||||||
Deferred revenue | 4,569 | 737 | ||||||
Note payable – 10% Convertible Promissory Notes, net of discount – related party | 80 | 68 | ||||||
Note payable – | 5,592 | 4,860 | ||||||
Total Current Liabilities | 30,802 | 17,357 | ||||||
Other liabilities, non-current | 325 | 494 | ||||||
Note payable – | 58,674 | 25,101 | ||||||
Finance lease obligations, non-current | 42 | — | ||||||
Operating lease liabilities, non-current | 239 | 319 | ||||||
Total Liabilities | 90,082 | 43,271 | ||||||
Stockholders’ Deficit | ||||||||
Convertible preferred stock, par value | — | — | ||||||
Common stock, par value | 1,721 | 1,504 | ||||||
(220 | ) | (220 | ) | |||||
Additional paid-in-capital | 101,405 | 98,797 | ||||||
Accumulated deficit | (149,833 | ) | (114,269 | ) | ||||
Accumulated other comprehensive income | 262 | 117 | ||||||
Total stockholders’ deficit | (46,665 | ) | (14,071 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 43,417 | $ | 29,200 |
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 and for use within management's discussion and analysis based on
All of the items included in the reconciliation from net loss before taxes 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 | Year Ended | |||||||||||||||
($ in thousands) | ||||||||||||||||
Net loss before tax plus: | $ | (5,931 | ) | $ | (2,321 | ) | $ | (35,564 | ) | $ | (8,125 | ) | ||||
Depreciation expense | 41 | 14 | 125 | 38 | ||||||||||||
Amortization of intangibles | 547 | 386 | 2,490 | 1,558 | ||||||||||||
Impairment of goodwill and intangibles | 812 | — | 17,070 | — | ||||||||||||
Amortization of debt discount | 636 | 276 | 2,074 | 1,199 | ||||||||||||
Other interest expense | 8 | 3 | 27 | 14 | ||||||||||||
Interest expense – | 2,334 | 908 | 7,088 | 3,050 | ||||||||||||
EBITDA | (1,553 | ) | (734 | ) | (6,690 | ) | (2,266 | ) | ||||||||
Stock compensation expense | 74 | 18 | 196 | 233 | ||||||||||||
Nonrecurring professional fees | 483 | — | 1,462 | 657 | ||||||||||||
Nonrecurring legal fees | 313 | — | 711 | — | ||||||||||||
Gain on forgiveness of PPP loan | — | — | — | (1,137 | ) | |||||||||||
Non-restructuring severance expense | 67 | 22 | 389 | 50 | ||||||||||||
Adjusted EBITDA | $ | (616 | ) | $ | (694 | ) | $ | (3,932 | ) | $ | (2,463 | ) |
Source:
2024 GlobeNewswire, Inc., source