WOODLAND HILLS, Calif., Jul 28, 2011 (BUSINESS WIRE) —
–Strategic Acquisitions of Forums Boost Audience and Revenue
–Total Network Pageviews and Monthly Unique Visitors Double from July 2010
–Pipeline of New Opportunities Drives Positive Outlook for FY2012
–Annual Conference Call to Discuss Results at 2 PM PT Today
One of the leading networks of forum communities on the Internet,
CrowdGather
/quotes/zigman/509143 CRWG
+10.59%
, today announced financial results for the
fourth quarter and fiscal year ended April 30, 2011.
The Company reported revenues of $407,741 for the fourth quarter of
fiscal 2011, an increase of 252% from the $115,630 reported for the
fourth quarter of fiscal 2010. For the fiscal year ended April 30, 2011,
the Company reported revenues of $1,580,957, an increase of 410% from
the $309,781 reported for fiscal 2010. Gross profit for the fiscal year
ended April 30, 2011 was $805,443 an increase of 160% from the $309,781
reported for fiscal 2010.
“2011 was a watershed year for us,” said Sanjay Sabnani, CrowdGather’s
Chairman and CEO. “During our fiscal year, we rapidly transitioned from
being a fledging underfunded technology company into a significant
publisher network comprised entirely of forums.”
Net loss for the 2011 fiscal year decreased to $2,812,228 or $.06 per
share, versus a net loss of $3,429,694 or $.08 for the fiscal year ended
April 30, 2010.
The improved fiscal 2011 financial results are the result of higher
fiscal 2011 revenue and gross profit along with lower interest and other
expenses, offset by higher operating expenses. The increase in revenue
and gross profit was primarily attributable to increasing advertising
revenue from the Company’s branded and hosted forum properties plus
revenue generated from Adisn’s display and per-action advertising
campaigns. Acquired in June 2010, Adisn did not impact the Company’s
fiscal 2010 results, but contributed significantly during fiscal 2011.
The decline in interest and other expenses for fiscal 2011 is the result
of the conversion of approximately $2.0 million of debt and interest
into equity during the fourth quarter of fiscal 2010. The conversion
resulted in a fiscal 2011 year-over-year decline in interest expense and
debt amortization of $869,182. Additionally, fiscal 2010 results
included a loss on the settlement of the debt of $563,571 versus a gain
on the settlement of the debt of $73,628 for fiscal 2011.
A $1,286,962 year-over-year increase in general and administrative
expenses for fiscal 2011 mostly offset the higher gross profit and
improved other expense results. CrowdGather expects GA to remain stable
during fiscal 2012.
In an effort to continue expanding the Company’s reach and prominence as
a leading network for forum members, owners and advertisers, CrowdGather
completed a number of acquisitions during the fiscal year ended April
30, 2011. Management is constantly evaluating new opportunities that
could immediately contribute to revenue and help the Company reach
profitability. During the past fiscal year and since April 30, 2011,
CrowdGather has completed the following acquisitions:
June 2010: Adisn, Inc. - provided both an advertising platform and ad server
technology that we anticipate leveraging to optimize vertical
delivery of ads throughout all of our forum properties.
July 2010: Lefora Websites - remotely hosted forum platform that allows users
to create a modern looking forum for free.
March 2011: DigiShopTalk.com - one of the largest (non-store / product sales
related) digital scrapbooking sites on the internet.
April 2011: Forumer.com - free forum hosting company which serves 35 million
monthly page views across 200,000 active forums.
April 2011: Pocketables.net - community provides relevant news, reviews and
commentary about ultra mobile computers, internet devices and
other handheld technology.
May 2011: PbNation.com - one of the world's largest online paintball
communities.
June 2011: Writers.net - acquired the domain name, website and other assets
related to this community, a directory of writers, editors,
publishers and literary agents.
The acquisition of Adisn was significant as its ad server technology
should enable the efficient delivery of vertically targeted ads to all
of the Company’s forum properties. This technology will help generate
key analytics and tracking measures, and will enhance ad revenue by
enabling higher value advertising campaigns. This technology is expected
to go live by the end of January, 2012.
“In 2011, we subsidized our working capital deficit through a few
non-core revenue opportunities. Part of these non-core revenue streams
were opportunistic such as performing services for hire, or Adisn’s
pay-per-action campaigns where we purchased advertising inventory
speculatively in the hopes of generating a sufficient volume of actions
in order to generate positive margin,” Sabnani continued. “We have
learned a great deal from this experience, and subsequent to our
financing round in February, we have streamlined our efforts into
pursuing revenue primarily from our forum network and Adisn’s display ad
server technology. As a result of this transition, we may experience a
flatter revenue ramp in the near-term, but expect a much higher margin
to contribute to overhead and work towards break-even. We currently have
adequate cash available for additional acquisitions and day-to-day
operations. We continue to source and identify acquisition opportunities
that the Company believes can immediately contribute to revenue and
gross profit.”
In March 2011, the Company raised over $7.85 million as part of its
strategy to continue expanding its forum footprint by acquiring valuable
properties, while also maintaining the appropriate resources to conduct
operations. Management believes it has sufficient working capital to
maintain operations and conduct further acquisitions to reach break-even
without additional financing. CrowdGather ended fiscal 2011 with
approximately $6.7 million of cash and as of July 28, 2011 had a cash
balance of approximately $4.5 million, net of recent acquisitions.
During April 2011, the Company reached over 140 million monthly page
views across all properties compared to 78 million monthly page views
during April 2010, and had 15 million monthly unique visitors compared
to 7 million monthly uniques a year earlier. As of April 30, 2011,
approximately 15.5 million users have registered on Company network
sites, with 24.8 million total discussions and over 262 million
individual replies. Based upon current statistics from Google analytics,
CrowdGather’s network of forums is currently generating approximately
150 to 155 million monthly page views and 15 to 17 million monthly
unique visitors. Additionally, approximately 16 million users have
registered on CrowdGather Network sites to date with 28 million total
discussions comprising over 350 million individual replies.
As of today, the Company anticipates generating baseline fiscal 2012
advertising revenue of at least $1.9 million driven by current monthly
page views and unique visitors. Although the Company believes it has a
strong pipeline of potential acquisition candidates for fiscal 2012,
revenue guidance is exclusive of any potential acquisition contribution.
The Company anticipates using the majority of its current cash reserves
for acquisitions and anticipates additional leverage of approximately $2
to $3 million in equity to allocate towards acquisitions depending on
the share price at the time a transaction is consummated. Based upon the
anticipated timing for these acquisitions, the Company believes that
their contribution could drive a steeper increase in revenues towards
the third and fourth fiscal quarters of 2012. Additional factors that
could contribute to better than anticipated revenue include the
successful integration of the Adisn ad server with the Company’s hosted
forums or the successful social media launch of a product in partnership
with Human Pheromone Sciences.
For an additional overview of the Company and other details, please join
us for our financial results conference call on Thursday, July 28, 2011
at 2:00 PT. The live call-in information is: 1-877-941-4775, passcode
4460195 and the replay, which will be available until 11:59pm on August
4, 2011, can be reached by dialing 1-800-406-7325, passcode 4460195#.
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.
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; competitive factors in the
market(s) in which the Company operates; risks associated with
operations outside the United States; and other factors listed 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.
CROWDGATHER, INC.
CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------------------
April 30, 2011 April 30, 2010
------------------ ------------------
ASSETS
Current assets
Cash $ 6,667,901 $ 589,408
Accounts receivable 243,917 -
Advance to employee - 25,615
Prepaid expenses and deposits 49,729 17,224
---------- ----------
Total current assets 6,961,547 632,247
Property and equipment, net of accumulated 172,751 82,721
depreciation of $140,804 and $62,849, respectively
Intangible assets, net of accumulated amortization of 5,811,707 1,980,663
$30,940 and $0, respectively
Goodwill 4,360,176 -
---------- ----------
$ 17,306,181 $ 2,695,631
Total assets
==== ========== ==== ==== ========== ====
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 82,805 $ 103,193
Accrued vacation 13,111 40,633
Other accrued liabilities 64,035 63,871
---------- ----------
Total current liabilities 159,951 207,697
Stockholders' equity
Preferred Series A stock, $0.001 par value, 25,000,000 - -
shares authorized,-0- shares issued and
outstanding
Common stock, $0.001 par value, 975,000,000 shares 57,089 39,823
authorized, 57,089,408 and 39,822,748 issued and
outstanding, respectively
Common stock obligation 3,784,322 -
Additional paid-in capital 22,432,597 8,763,661
Accumulated deficit (9,127,778) (6,315,550)
---------- ---- ---------- ----
Total stockholders' equity 17,146,230 2,487,934
---------- ----------
Total liabilities and stockholders' equity $ 17,306,181 $ 2,695,631
==== ========== ==== ==========
CROWDGATHER, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED APRIL 30, 2011 AND 2010
--------------------------------------------------------------------------------------
2011 2010
------------------- -------------------
Revenue $ 1,580,957 $ 309,781
Cost of revenue 775,514 -
---------- ----------
Gross profit 805,443 309,781
Operating expenses
Payroll and related expenses 881,857 783,636
General and administrative 2,806,827 1,519,865
---------- ----------
Total operating expenses 3,688,684 2,303,501
Loss from operations (2,883,241) (1,993,720)
Other income (expense):
Interest income 2,590 1,984
Interest expense (4,405) (146,230)
- (727,357)
Interest expense, debt discount amortization
Gain (loss) on extinguishment of debt 73,628 (563,571)
---------- ---------- ---
Other income (expense), net 71,813 (1,435,174)
---------- ---------- ---
Net loss before provision for income taxes (2,811,428) (3,428,894)
Provision for income taxes 800 800
---------- ----------
Net loss $ (2,812,228) $ (3,429,694)
--- ---------- --- --- ---------- ---
Weighted average shares outstanding- basic and diluted 44,904,994 41,190,817
=== ========== === === ========== ===
Net loss per share - basic and diluted $ (0.06) $ (0.08)
=== ========== === === ========== ===
SOURCE: CrowdGather, Inc.
CrowdGather, Inc.
Investor Contact:
Sanjay Sabnani, 818-435-2472 x 101
sanjay@crowdgather.com
or
Media Contact:
Stacy Dimakakos, 917-981-5501
stacy@publicworldwide.com
Copyright Business Wire 2011
/quotes/zigman/509143
