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Tapinator, Inc. (OTC:TAPM) - August 21, 2015




Tapinator Releases Second Quarter 2015 Financial Report Q2 Revenues of $615,000, an Increase of 172% Year-Over-Year
 
 

NEW YORK, NY - August 21, 2015 - Tapinator, Inc. (OTC: TAPM), an emerging growth company within the mobile gaming industry, today announced financial and operating results and the filing of its quarterly report for the period ended June 30, 2015. The complete report may be found at http://www.otcmarkets.com/stock/TAPM/filings.

“Tapinator continued to show significant business expansion in the second quarter of 2015,” stated Tapinator CEO, Ilya Nikolayev. “Our quarterly revenues grew 172% year-over-year and 49% quarter-over-quarter, representing our fifth consecutive quarter of at least double-digit sequential revenue growth. Our revenue expansion can be attributed to both the continued broadening of our rapid-launch games portfolio, as well as our targeted investments into a small number of full-featured titles that we believe have significant long-term franchise potential. In addition to our very strong revenue growth, Tapinator is also pleased to announce adjusted EBITDA of $187,591 in the second quarter of 2015, an increase of 1,390% year-over-year and 68% sequentially.

We are very proud of our accomplishments in Q2 2015, in terms of our financial performance, user traction and product quality. Burn It Down was featured as a ‘Best New Game’ and became a ‘Top 50’ game on iOS and ‘Top 5’ within both the Adventure and Puzzle categories. We also released our first product within the Social Casino category, Video Poker VIP, during the quarter and we are enthused by initial player retention metrics, monetization and user feedback from the game. We view this game and category as important to our future growth strategy. Other major milestones in the quarter included:

• We received $2.0mm in growth capital from an investment fund via a financing transaction that significantly improved our liquidity. As part of this financing, we were able to eliminate all previously outstanding debt,
• We completed our first audit as a publicly-traded company for the period from Inception thru December 31, 2014, receiving a “clean” opinion on our financial statements, and
• We strengthened our executive team to facilitate our transition to becoming a fully-reporting public company, and to help lead a newly announced M&A growth strategy

Tapinator is particularly pleased to deliver these results even as we continue to make substantial investments in new game development, marketing for new game launches and core infrastructure in data and analytics."

Financial Results
• Quarterly revenue of $615,358; up 172% year-over-year and up 49% sequentially
• Quarterly adjusted EBITDA of $187,591; up 1,390% year-over-year and up 68% sequentially
• $1.85 million in cash and cash equivalents as of June 30, 2015

Product Highlights
The Company ended Q2 with 112 games, of which 19 were launched in the quarter. Tapinator has 20 titles in its portfolio that have reached at least one million downloads, up from 15 games that had reached this milestone at the end of Q1.

Within its full-featured games business, the Company had four titles that have been selected as ‘Best New Games’ on iOS as of the end of Q2. Tapinator’s first social casino title, Video Poker VIP, launched on iPad during the quarter and, the Company believes, is a ‘best-in-class’ video poker property on mobile.

Finally, the Company is optimistic about its licensed IP opportunities. In addition to the Q3 release of Deadliest Catch: Seas of Fury, based on the Discovery Channel hit TV show Deadliest Catch, Tapinator will soon announce a major game, launching in Q2 2016, based on a major hit movie franchise.
Player & Game Metrics

• Average DAUs – .47 million; up 236% year-over-year, and up 75% sequentially
• Average MAUs – 7.73 million; up 188% year-over-year, and up 68% sequentially
• Average New Daily Downloads – .35 million; up 268% year-over-year, and up 139% sequentially
• Cumulative Downloads – 96.91 million as of June 30, 2015; up 298% year-over-year, and up 50% sequentially
• Cumulative Game Library – 112 titles as of June 30, 2015; up from 40 year-over-year, and up from 93 sequentially
 

Financial Highlights (unaudited)

 

      Three Months Ended

       Six Months Ended

 

June 30, 2015

June 30, 2014

June 30, 2015

June 30, 2014

GAAP Results

 

 

 

 

Revenue

 $ 615,358

 $ 226,320

 $ 1,027,241

 $ 322,304

Operating Income (Loss)

 $ (143,319)

 $12,399

 $ (81,078)

 $ 4,291

Loss on Change in Derivative Liabilities

$ (4,694,571)

$ 0

$ (4,694,571)

$ 0

Net Income (Loss)

 $ (4,993,561)

 $12,399

 $ (4,987,720)

 $4,266

Diluted Net Income (Loss) Per Share

 $ (0.09)

 $ 0.00

 $ (0.09)

 $ 0.00

Non-GAAP Results

 

 

 

 

Adjusted EBITDA

 $ 187,591

 $ 12,589

 $ 299,266

 $ 4,672

Tapinator, Inc. recorded gross revenues of $615,358 and a net loss of $4,993,561 for the three-month period ended June 30, 2015. This compares to revenue of $226,320 and net income of $12,399 for the same period in 2014. The net loss was primarily attributable to non-cash derivative charges associated with the Company’s $2.0 million convertible debenture financing completed during the second quarter, and increased amortization of capitalized software costs.

For the three-month period ended June 30, 2015, the Company incurred an operating loss of $143,319, as compared to operating income of $12,399 for the comparable three-month period ended June 30, 2014. The reduction in operating income is primarily due to increased amortization of capitalized software costs.

For the three-month period ended June 30, 2015, the Company achieved adjusted EBITDA (a non-GAAP measure of earnings discussed below) of $187,591, as compared to adjusted EBITDA of $12,589 for the comparable three-month period ended June 30, 2014. The increase in adjusted EBITDA is primarily due to operating leverage on the higher level of revenues.

Tapinator’s cash balance grew significantly to $1.85 million as of June 30, 2015 from the prior period of December 31, 2015 when the cash balance was $121,740. The increase in cash is attributable to the $2.0 growth financing transaction that the Company completed during the quarter.

About Tapinator
Tapinator (OTC: TAPM) is a developer and publisher of mobile games on the iOS, Google Play, and Amazon platforms. The Company focuses on operating its own titles and publishing properties where it holds substantial ownership positions. Tapinator’s owned and operated portfolio includes over 110 mobile gaming titles that, collectively, have achieved over 100 million downloads. A number of these titles have risen to the top of the mobile leaderboard charts and have been featured by the Apple, Google, and Amazon App Stores. Founded in 2013, Tapinator is headquartered in New York, with product development teams located in Denmark, Pakistan, Indonesia, Canada, and Russia. For a full listing of Tapinator game titles, please go to Tapinator.com. For further financial information on the Company, please go to OTCMarkets.com/stock/TAPM. For live updates, please like us on Facebook at facebook.com/Tapinator or follow us on Twitter at twitter.com/Tapinator.

Key Operating Metrics
We manage our business by tracking several operating metrics: ‘DAUs,’ which measure daily active users of our games, ‘MAUs,’ which measure monthly active users of our games, ‘Downloads,’ which measure non-unique downloads of our games, each of which is recorded by third party systems and our internal analytics system. The numbers for these operating metrics are calculated using internal company data, based on tracking of user account activity. We believe that the numbers are reasonable estimates of our user base for the applicable period of measurement; however, factors relating to user activity and systems may impact these numbers.

Forward Looking Statements
To the extent that statements contained in this press release are not descriptions of historical facts regarding Tapinator, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will" "expect," "anticipate," "estimate," "intend," and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. Examples of forward-looking statements contained in this press release include, among others, statements regarding the quoting and trading of our common stock and our expectations regarding our development and monetization plans for our mobile games. Forward-looking statements in this release involve substantial risks and uncertainties that could cause the development and monetization of our mobile games, future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in the hits nature of the mobile gaming business. Tapinator undertakes no obligation to update or revise any forward-looking statements. The quoting and trading of the company's common stock on the OTC Market Group's OTC Link quotation system is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with the company's operations or business prospects. As a result, there may be volatility in the market price of the shares of the company's common stock for reasons unrelated to operating performance. Moreover, the OTC Market Group's OTC Link quotation system is not a stock exchange, and trading of securities on it is often more sporadic than trading of securities listed on the NASDAQ Stock market or another securities exchange. Accordingly, stockholders may have difficulty reselling any of their shares. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the company in general, see Tapinator's Risk Factors which are available at http://www.tapinator.com/disclaimers.

Non-GAAP Financial Measure
We have provided in this release the non-GAAP financial measure of adjusted EBITDA, as a supplement to the consolidated financial statements, which are prepared in accordance with United States generally accepted accounting principles ("GAAP"). Management uses adjusted EBITDA internally in analyzing our financial results to assess operational performance and liquidity. The presentation of adjusted EBITDA is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. We believe that both management and investors benefit from referring to adjusted EBITDA in assessing our performance and when planning, forecasting and analyzing future periods. We believe adjusted EBITDA is useful to investors because it allows for greater transparency with respect to key financial metrics we use in making operating decisions and because our investors and analysts use them to help assess the health of our business. We have provided reconciliations between our historical 2015 adjusted EBITDA to the most directly comparable GAAP financial measures below. Some limitations of adjusted EBITDA:

• Adjusted EBITDA does not include the impact of stock-based expense, impairment of intangible assets previously acquired, acquisition-related transaction expenses, contingent consideration fair value adjustments and restructuring expense;
• Adjusted EBITDA does not reflect income tax expense;
• Adjusted EBITDA does not include other income or expense, which includes foreign exchange gains and losses and interest income or expense;
• Adjusted EBITDA excludes depreciation and amortization of intangible assets. Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future; and
• Other companies, including companies in our industry, may calculate adjusted EBITDA differently or not at all, which will reduce their usefulness as a comparative measure.

Because of these limitations, you should consider adjusted EBITDA along with other financial performance measures, including revenue, net income (loss), diluted net income (loss) per share, cash flow from operations, GAAP operating expense, GAAP operating margin and our other financial results presented in accordance with GAAP. See the GAAP to non-GAAP reconciliations below for further details:

Reconciliation of GAAP To Non-GAAP Results (unaudited)

 

 

 

 

 

 

 

 

 

              Three Months Ended

       Six Months Ended

 

June 30, 2015

June 30, 2014

June 30, 2015

June 30, 2014

Reconciliation of Net Income (Loss) to

Adjusted EBITDA:

 

 

 


 

 Net income (loss)

($4,993,561)

$12,399

($4,987,720)

$4,266

 Loss on change in derivative liabilities

$4,694,571

$0

$4,694,571

$0

 Interest expense

$40,899

$0

$56,652

$0

 Income taxes

$626

$0

$3,772

$25

 Amortization of capitalized R&D costs

$103,648

$0

$152,601

$0

 Depreciation and amortization

$222,087

$190

$222,569

$381

 Debt discount amortization

$114,146

$0

$151,646

$0

 Stock-based expense

$5,175

$0

$5,175

$0

Adjusted EBITDA

$187,591

$12,589

$299,266

$4,672


 

 CONTACT
Tapinator Investor Relations
investor.relations@tapinator.com
(914) 930-6232

SOURCE: Tapinator, Inc.
 

 

 

 




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This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may", "future", "plan" or "planned", "will" or "should", "expected," "anticipates", "draft", "eventually" or "projected". You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company's annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and FNMG undertakes no obligation to update such statements.