Subjects: ERN, OTC
Jerrick Media Holdings, Inc. Reports Second Quarter and First Half 2017 Financial Results
NEW YORK, August 14, 2017 /PRNewswire/ --
Jerrick Media Holdings, Inc., (OTCQB: JMDA) (the "Company" or "Jerrick"), a technology company, today reported financial results for the three and six-month periods ended June 30, 2017.
Key Second Quarter 2017 Financial Results Summary / Business Highlights:
- Dashboard statistics:
March 31, April 30, May 31, June 30, July 31,
2017 2017 2017 2017 2017
Verticals (Web Communities) 12 12 12 12 18
Unique Visitors per Month 1.07mm 1.38mm 1.88mm 2.26mm 2.35mmm
Page Views per Month 1.77mm 1.89mm 2.37mm 3.03mm 3.40mm
Total Bloggers Signed Up 3,031 4,310 5,348 11,507 20,040
Average # of Submissions/Day 25 31 35 83 148
Average # of Published Articles /Day 20 23 30 62 72
CURRENT BUSINESS METRICS
76% Mobile / 18%
User Device: Desktop
Traffic 55% Search / 25%
Source: Social
Geographic: 53% U.S. / 28% Europe
- Completed the full rollout of platform upgrade to Vocal 2.0. The initial upgrade began on May 15, 2017 with a significant enhancement to the user interface and concluded August 14, 2017 having encompassed numerous front-end and back-end components including several revenue sources: micropayments, premium digital downloads (including Kindle, Vimeo, and print-to-order), and affiliate network sales;
- Monthly cash used in operating activities for the second quarter 2017 averaged approximately $155,000 compared to the average monthly cash used in operating activities during first quarter 2017 average of approximately $307,000;
- Operating expenses totaled approximately $1,000,000 in the second quarter of 2017, a decrease of approximately $72,000 (7%) from the second quarter of 2016, and a decrease of $70,000 (7%) from first quarter 2017;
- Operating loss for the second quarter of 2017 totaled $(948,000), compared to an operating loss in the second quarter of 2016 of $(1,016,000) and an operating loss of $(1,028,000) for the first quarter 2017;
- Updated provisional Patents (filed April 25, 2017) concurrent with technology advancements - System and Method for Creating, Editing, Managing and Serving Web-Based Content (application number 62404735). Increased the number of trademarks and the size of its content library;
- Capital, net of debt issuance costs, raised during second quarter 2017 totaled approximately $316,000, primarily through convertible notes and promissory notes. Subsequent to June 30, 2017, the Company raised an additional $519,000 in principal value of short term notes and a $100,000 one-year note; and,
- Subsequent to the second quarter (July 19, 2017), the Company launched six new social publishing verticals (01, Families, Gamers, Petlife, Poets, Wheel), bringing its total community websites to 18. As part of its SaaS business plans, Jerrick plans to add another 50+ community sites over the next six months. The Company has successfully proven it is able to fully launch, populate, and integrate multiple new websites with separate domain authorities across its Vocal network within hours.
"Since the launch of the Vocal platform on November 30, 2016, Jerrick's strategy of applying mathematical models to create dynamic algorithms has not only attracted engaged content creators, but also has served to incubate growing niche communities within our network. We have accomplished this ahead of our internal expectations without a significant marketing effort, attesting to the efficacy of our proprietary analyses, which are based on objective analytics that constantly adjust to viewers' interests and content providers' skills to maximize their experience," commented Jeremy Frommer, CEO and co-founder of Jerrick. "With the successful rollout of the Vocal 2.0 platform enhancements, Jerrick is now positioned to execute on its monetization strategy in partnership with its creators, thus creating a best-in-class user experience. As of today, we have begun to shift much of our internal resources towards executing on our monetization roll-out strategies that have been teed-up for the second half of this year."
Vocal 2.0 improvements include significant enhancements to Jerrick's user interface, expedited niche-community website creation, accelerated search engine optimization, automated content editing to boost scalability, and beta-tested micropayments in support of Jerrick's first core revenue module.
Mr. Frommer continued, "We have simultaneously increased our server capacity and internal protocols to handle the accelerated growth in traffic, while at the same time lowering costs with a number of important technology service providers. With the release of several revenue modules over the next several weeks, we believe we have developed a compelling proposition to advertisers and brands. We offer a way for content creators and brands to efficiently target-market the most appropriate audience for their goods and services within our growing list of niche-communities on the Vocal network. The Vocal platform is receiving a steady level of early interest from advertisers, brands, creators and external sites currently using other service platforms looking to join our communities. The business of Jerrick continues to reinforce our expectations that revenues will begin to scale during the second half of 2017, and we anticipate the crossover into profitable growth in 2018."
Jerrick reported net revenues for the three months ended June 30, 2017 of approximately $52,000 compared to $64,000 for the same period of the previous year and $42,000 in the first quarter of 2017. Heretofore, the low revenue levels reflect efforts by the Company to partly support working capital during its start-up phase through commercialization via the sale of a small sampling of its Company owned Guccione memorabilia, a library of more than 250,000 items. Revenue generated during the Company's first and second quarters of 2017 reflect sales of the Guccione library property through a professional auction house. During the second quarter 2017, the average price received per digital image was approximately $75. Jerrick intends to progressively monetize this extensive library with the most valuable of its properties to be sold in the final years.
Since the introduction of the Vocal platform, Jerrick's resources have been directed towards curating creative content providers, increasing published content and building page views within its network of monthly visitors. With the first platform upgrade to Vocal 2.0 completed during the second week of August 2017 and the launch of Jerrick's first core revenue module, the Company's internal resources have shifted towards revenue growth. The Company plans to significantly increase revenue creation in the second half of 2017 as it initiates several revenue streams, including gifting, affiliate and native advertising, branded content (in-house produced videos and articles), data mining, film development and e-commerce.
During the three-month period ended June 30, 2017, the Company incurred a loss from operations of $(948,000). This compares to a loss from operations of $(1,016,000) during the same period of the prior year and a loss from operations of $(1,028,000) during the first quarter 2016. The Company reported a net loss of approximately $(1,295,000) or $(0.03) per basic share for the three months ended June 30, 2017, compared to the previous year's second quarter net loss of approximately $(5,397,000) or $(0.17) per basic share, which included a non-cash accrual for liquidated damages associated with a late registration filing, and a net loss of $(1,557,000) or $(0.04 per basic share) for the first quarter 2017.
Operating expenses for the three months ended June 30, 2017 totaled approximately $1,000,000 which included a non-cash charge of $441,000 for options granted to management and employees during the quarter. Excluding this charge, operating expenses were $558,000 a decrease of $512,000 from the prior year second quarter and a decrease of approximately $512,000 compared to first quarter 2017. The decline in operating expenses was due to effect of company's transition to the next phase of its business model, during which development costs were minimal. The company expects operating expenses to return to normal levels as it continues progress with the rollout of its revenue models. As Jerrick includes additional functionalities to further automate the Vocal platform, it plans to gradually increase its systems and personnel to support significant scalability. Accordingly, the Company anticipates research and development costs to total approximately $230,000 for the remainder of the year.
The Company incurred other expenses of $348,000 in the second quarter 2017 compared to $4.4 million in the second quarter 2016, which included a $4.3 million non-cash charge for registration rights penalty provisions, and other expenses of $530,000 in the first quarter 2017. The decrease in the second quarter other expenses was due to lower derivative and vendor settlement related charges ($502,000) partially offset by an increase in the debt discount and issuance costs ($290,000) and an increase in interest expense ($30,000).
For the six months ended June 30, 2017, the Company reported revenues of approximately $94,000 compared to revenues of approximately $185,000 for the same period in 2016. Heretofore, revenue has been generated through sale of the Company's Guccione memorabilia. The Company expects to report revenue generated from its core business beginning in the third quarter 2017, which will be supplemented by auctions of its Guccione assets.
Operating expenses for the six months ended June 30, 2017 totaled $2.1 million, including the non-cash charge for Company executive and employee options grants of $440,000. Excluding the charge for option grants, operating expense decreased $147,000 from the prior year six-month period.
Interest expense during the first half of 2017 totaled $145,000 compared to $51,000 during the same period of 2016 due to the increase in debt. Jerrick reported a net loss for the six months ended June 30, 2017 of $(2,900,000) or $(0.08 per basic share) compared to a net loss of $(6,000,000) or $(0.20 per basic share), inclusive of the $4,300,000 non-cash charge for registration rights penalty provisions, for the same period in 2016.
At June 30, 2017, the Company reported total assets of $181,000, which assesses no value for Jerrick's extensive library. At June 30, 2017, the Company had current liabilities of $5,500,000 of which, $945,000 accounts for a non-cash derivative liability. Jerrick's short term debt totals approximately $3,500,000 compared to year-end 2016 short term debt of $2,100,000. The Company holds no long-term debt. Subsequent to the second quarter-end 2017, the Company raised approximately additional capital of $520,000 which is detailed in Company's 10-Q filing under Subsequent Events through the sale of additional promissory notes.
On June 30, 2017, Jerrick had approximately 38.4 million shares of Common Stock outstanding, an increase of approximately 700,000 shares due to the conversion of preferred shares into common stock by the shareholder during the second quarter. On a fully diluted basis, Jerrick had convertible preferred stock (24.5 million equivalent common shares), stock options, warrants, convertible notes (4.9 million equivalent common shares), and additional Common Stock reserved for issuance of 400,000 shares that would result in the issuance of an additional 72.4 million, shares of Common Stock, generating approximately $4.6 million in additional capital for the Company. As of June 30, 2017, the Company had federal and state tax loss carry forwards of approximately $9.0 million, which expire through the fiscal year ending December 31, 2035.
About Jerrick
Jerrick is a technology company focused on the development of digital communities, marketing branded digital content, and e-commerce opportunities. Core to Jerrick's unique capabilities is Vocal, a proprietary technology and content distribution platform, programmed to deliver a robust long-form, digital publishing platform organized into highly engaged niche-communities capable of hosting all forms of rich media content. Vocal maximizes scalability, speed, simplicity, and adaptability to create an unparalleled user experience - algorithmically designed to bridge media-rich long-form creative content with effective monetization. Each niche-community site is overseen by a dedicated team and culture, whose primary focus is on revenue conversion of all published material via digital arbitrage. All content is meant to challenge, inspire, and enlighten. For more information please visit https://jerrick.media and https://vocal.media/.
Forward-Looking Statements
Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings.
Financial Statements Follow
Jerrick Media Holdings, Inc.
Condensed Consolidated Balance Sheet
June 30, 2017 December 31, 2016
(unaudited)
Assets
Current Assets
Cash $ 5,277 $ 174,494
Prepaid expenses - 10,000
Total Current Assets 5,277 184,494
Property and equipment, net 53,125 71,829
Security deposits 38,445 38,445
Minority investment in business 83,333 83,333
Total Assets $ 180,180 $ 378,101
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities
Accounts payable and accrued liabilities $ 1,099,470 $ 1,387,068
Accrued dividends 360,555 259,170
Demand loan 10,366 10,366
Convertible Notes - related party,
net of debt discount 48,904 -
Convertible Notes, net of debt
discount and Issuance costs 453,028 268,823
Current portion of capital lease payable 4,732 3,524
Note payable, related party,
net of debt discount 1,522,467 1,350,325
Note payable, net of debt discount 738,405 30,579
Derivative liability 945,403 -
Line of credit - related party 130,000 -
Line of credit 204,943 235,141
Total Current Liabilities 5,518,274 3,544,996
Non-current Liabilities:
Capital lease payables - 1,208
Total Non-current Liabilities - 1, 208
Total Liabilities 5,518,274 3,546,204
Commitments and contingencies
Stockholders' Equity (Deficit)
Series A Preferred stock, $0.001 par value,
32,166 and 33,314 shares issued and outstanding
respectively 32 33
Series B Preferred stock, $0.001 par value,
8,063 and 7,000 shares and
outstanding, respectively 8 8
Series D Preferred stock, $0.001, 914
and 0 shares issued and outstanding respectively 1 1
Common stock, $0.001 par value:
300,000,000 authorized shares;
38,401,322 and 33,894,592 shares
issued and outstanding at
March 31, 2017 and 2016 respectively 38,402 33,895
Additional paid-in capital 10,855,781 10,075,941
Accumulated deficit (16,232,318) (13,277,981)
Total Stockholders' Equity (Deficit) (5,338,094) (3,168,103)
Total Liabilities and
Stockholders' Equity (Deficit) $ 180,180 $ 378,101
Jerrick Media Holdings, Inc.
Condensed Consolidated Statements of Operations
Three Months ended Six Months ended
June 30 June 30
2017 2016 2017 2016
Net revenues $ 52,259 $ 63,932 $ 94,101 $ 184,640
Cost of revenues - 8,923 - 43,321
Gross profit 52,259 55,009 94,101 141,319
Operating expenses
Compensation 709,296 327,548 1,091,407 713,439
Consulting fees 37,565 405,889 177,570 515,007
General and administrative 253,017 338,020 635,816 547,857
Total operating expenses 999,878 1,071,457 2,069,731 1,776,303
Loss from operations (947,619) (1,016,448) (1,975,630) (1,634,984)
Other income (expenses)
Interest expense (87,318) (4,364,460) (144,705) (4,397,614)
Accretion of debt discount
and issuance cost (620,586) (15,974) - (15,974)
Derivative expense - - - -
Change in derivative
liability 360,244 - 584,011 -
Settlement of vendor
liabilities - - (110,674) -
Other income (expenses),
net (347,660) (4,380,434) (877,322) (4,413,588)
Loss before income tax
provision (1,295,279) (5,396,882) (2,852,952) (6,048,572)
Income tax provision - - - -
Net loss $(1,295,279) $(5,396,882) $(2,852,952) $(6,048,572)
Per-share data
Basic and diluted loss per
share $ (0.03) $ (0.17) $ (0.08) $ (0.20)
Weighted average number of
common shares outstanding 38,014,509 31,682,537 37,247,125 29,879,099
Company Contact:
Jeremy Frommer, CEO
Jerrick Media Holdings, Inc.
+1-201-258-3770
[email protected]
Investor Relations:
Natasha Sydor
Jerrick Media
+1-201-258-3770
[email protected]
SOURCE Jerrick Media Holdings, Inc.
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