WOODLAND HILLS, Calif.--(BUSINESS WIRE)--Specialty social media and gaming network, CrowdGather, Inc. (OTCQB:CRWG), today announced financial results for the third quarter and nine months ended January 31, 2015.
The Company reported revenues of $690,507 for the three months ended January 31 of fiscal 2015, resulting in $1,490,831 in total revenue for the nine months ended January 31 of fiscal 2015, compared to $446,201 and $1,283,240, respectively, for the same periods in the prior fiscal year.
“We are pleased to report a record revenue quarter,” said Sanjay Sabnani, CrowdGather’s founder and CEO. “Our pivot into the gaming space was a focused attempt to regain sales momentum and leverage. We are excited to share results that we believe show our strategy is working. While we still face challenges when it comes to procuring additional financing, we believe that having growth in sales and gross profit should help. While our transition into gaming through the merger with Plaor has changed the composition of our cost structure, with a higher cost of revenue for platform fees as well as increased payroll and advertising expenses as compared to our forum business, we believe that continued growth in revenues from gaming will offset and leverage these higher expenses as we achieve scale.”
Gross profit was $516,943 and $1,062,353 respectively, for the three months and nine months ended January 31 of fiscal 2015, compared to $445,498 and $1,279,915 for the same periods in the prior fiscal year.
Net loss was $1,639,866 or $.01 per share, and $6,527,181, or $.06 per share, for the third quarter and nine months ended January 31 of fiscal 2015, compared to a net loss of $338,597, or $.01 per share, and $1,554,329 or $.03 per share, for the same periods of fiscal 2014.
The increased loss for the quarter and nine months ended January 31, 2015 primarily relate to higher payroll and advertising costs relating to the merger with Plaor in May 2014, as well as non-cash charges relating to our amortization expense included in our general and administrative expenses and the loss on the fair value adjustment to our derivative liabilities.
CrowdGather ended the third quarter of fiscal 2015 with approximately $250,000 of cash and $7.3 million of shareholders’ equity.
About CrowdGather, Inc.
With its growing portfolio of special interest forums and enthusiast message board communities, CrowdGather (www.crowdgather.com) has created a centralized network to benefit forum members, forum owners, and forum advertisers. CrowdGather provides a highly interactive and informational social network for members, a management and revenue-sharing resource for third-party forum owners, and a largely untapped advertising network for marketers worldwide.
CrowdGather subsidiary, Plaor, a company that specializes in developing highly scalable multi-platform games, is located in the heart of Boston's fast growing Innovation District. Plaor produces Mega Fame Casino, an innovative and highly rated social casino available on iOS, Android & desktop. With over 20 employees, the Plaor team is a mix of rising-star newcomers and widely-recognized game development veterans from companies including Rockstar Games, Turbine, Harmonix, Irrational Games, Nanigans, Sony Online Entertainment, ThoughtWorks, THQ, and Caesars Interactive Entertainment.
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company’s growth and business strategy. Words such as “expects,”“will,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations on such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in the Company’s business; general economic, industry and market sector conditions; the ability to generate increased revenues from the Company’s forums and Plaor’s social casino; the ability to obtain additional financing; the ability to manage the Company's growth; the ability to develop and market new technologies to respond to rapid technological changes; competitive factors in the market(s) in which the Company operates; and other events, factors and risks disclosed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
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CROWDGATHER, INC. |
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January 31, 2015 |
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| (UNAUDITED) |
April 30, 2014 |
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| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 249,903 | $ | 546,158 | ||||
| Accounts receivable | 264,199 | 130,709 | ||||||
| Investments | 21,480 | 21,480 | ||||||
| Inventory | 31,770 | 31,913 | ||||||
| Prepaid expenses and deposits | 63,995 | 48,652 | ||||||
| Total current assets | 631,347 | 778,912 | ||||||
|
Property and equipment, net of accumulated depreciation of $589,483 and $493,887, respectively |
76,759 | 130,518 | ||||||
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Intangible and other assets, net of accumulated amortization of $600,800 and $-0-, respectively |
8,327,396 | 7,336,771 | ||||||
| Goodwill | 1,817,400 | - | ||||||
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| Total assets | $ |
10,852,902 |
$ | 8,246,201 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 201,637 | $ | 8,000 | ||||
| Line of Credit | 339,852 | - | ||||||
| Deferred revenue | 568,606 | - | ||||||
| Accrued vacation | 96,429 | 44,078 | ||||||
| Other accrued liabilities | 488,543 | 154,746 | ||||||
| Convertible note payable, net of discount | 168,834 | - | ||||||
| Derivative liabilities | 788,649 | - | ||||||
| Notes payable, net of discount | 900,517 | - | ||||||
| Total current liabilities | 3,553,067 | 206,824 | ||||||
| Stockholders’ equity | ||||||||
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Preferred Series B stock, $0.001 par value, 1,000,000 shares authorized, 0 and 1,000,000 shares issued and outstanding, respectively |
- | 1,000,000 | ||||||
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Common stock, $0.001 par value, 975,000,000 shares authorized, 117,033,509 and 61,657,708 issued and outstanding, respectively |
117,033 | 61,658 | ||||||
| Additional paid-in capital | 36,481,223 | 29,748,961 | ||||||
| Accumulated deficit |
(29,269,901) |
(22,742,722) |
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| Accumulated other comprehensive loss |
(28,520) |
(28,520) |
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| Total stockholders’ equity | 7,299,835 | 8,039,377 | ||||||
| Total liabilities and stockholders’ equity | $ | 10,852,902 | $ | 8,246,201 | ||||
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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS |
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| Three Months Ended January 31, | Nine Months Ended January 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
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Revenue |
$ |
690,507 |
$ |
446,201 | $ | 1,490,831 | $ | 1,283,240 | ||||||||
| Cost of revenue | 173,564 | 703 | 428,478 | 3,325 | ||||||||||||
| Gross profit | 516,943 | 445,498 | 1,062,353 | 1,279,915 | ||||||||||||
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Operating expenses |
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| Payroll and related expenses | 518,615 | 269,118 | 1,765,298 | 940,282 | ||||||||||||
| Stock based compensation | 118,000 | 132,000 | 317,000 | 562,600 | ||||||||||||
| General and administrative | 980,936 | 382,134 | 3,376,850 | 1,185,668 | ||||||||||||
| Loss on disposal of assets | - | - | 1,529,262 | - | ||||||||||||
| Legal settlements, net | - | - | 50,000 | - | ||||||||||||
| Impairment of intangible assets | - | - | - | 140,026 | ||||||||||||
| Total operating expenses | 1,617,551 | 783,252 | 7,038,410 | 2,828,576 | ||||||||||||
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Loss from operations |
(1,100,608) |
(337,754) |
(5,976,057) | (1,548,661) | ||||||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense, net | (34,009) | (843) | (47,517) | (4,868) | ||||||||||||
| Change in fair value of derivative liabilities | (505,249) | - | (502,807) | - | ||||||||||||
| Total other income (expense) | (539,258) | (843) | (550,324) | (4,868) | ||||||||||||
| Net loss before provision for income taxes | (1,639,866) | (338,597) | (6,526,381) | (1,553,529) | ||||||||||||
| Provision for income taxes | 0 | 0 | 800 | 800 | ||||||||||||
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Net loss |
$ |
(1,639,866) |
$ |
(338,597) | $ | (6,527,181) | $ | (1,554,329) | ||||||||
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Weighted average shares outstanding- basic and diluted |
116,842,747 |
61,101,632 |
113,014,884 |
59,621,777 |
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Net loss per share – basic and diluted |
$ |
(0.01) |
$ |
(0.01) |
$ | (0.06) | $ | (0.03) | ||||||||