- Q3 FY 2014 net loss significantly
lower, demonstrates success of corporate restructuring
- Company to sell some non-core assets to
pursue strategic alternatives and high growth opportunities in the
mobile technology space
One of the leading networks of forum communities on the
Internet, CrowdGather, Inc. (OTCQB:CRWG), today announced financial
results for the third quarter ended January 31, 2014.
The Company reported revenues of $446,201 for the three months
ended January 31 of fiscal 2014, resulting in $1,283,240 in total
revenue for the nine months ended January 31 of fiscal 2014,
compared to $508,689 and $1,523,623, respectively, for the same
periods in the prior fiscal year. Revenues for the third quarter of
fiscal 2014 were 12% lower than the third quarter of fiscal 2013,
due primarily to advertising campaigns and ad partners that were
non-recurring in the third quarter of fiscal 2014 when compared to
the same period in fiscal 2013. The Company consistently attempts
to diversify and grow revenues in an attempt to mitigate the
volatility of advertising payouts and non-recurring ad
campaigns.
“During fiscal 2014, we continued to conduct additional
corporate restructuring to reduce costs, and have entered into an
agreement to sell some non-core assets to enable our ability to
aggressively pursue high growth strategic alternatives that better
leverage our users, especially the mobile ones,” said Sanjay
Sabnani, CrowdGather’s Chairman and CEO. “The capital raised from
the asset sale will enable us to aggressively seek merger or
acquisition candidates in the rapidly growing mobile app and social
gaming technology sector. Subsequent to the asset sale, we will be
retaining more than 90% of our monthly revenue, our monthly page
views and our monthly unique users. Additionally, while we pursue
strategic alternatives, we will continue to monetize and improve
the user experience on our remaining online communities.”
Gross profit was $445,498 and $1,279,915 respectively, for the
three months and nine months ended January 31 of fiscal 2014,
compared to $482,937 and $1,478,655 for the same periods in the
prior fiscal year. On a quarterly basis, gross profit declined by
8%.
Net loss was $338,597 or $.01 per share, and $1,554,329, or $.03
per share, for the third quarter and nine months ended January 31
of fiscal 2014, compared to $682,193, or $.01 per share, and
$2,152,619 or $.04 per share, for the same periods of fiscal 2013.
Net loss was significantly lower during Q3 fiscal 2014 when
compared to the same period in the prior fiscal year primarily due
to the effect of the successful corporate restructuring and cost
reductions made by the Company.
CrowdGather ended the third quarter of fiscal 2014 with
approximately $0.2 million of cash and $14.1 million of
shareholders’ equity.
During January 2014, the Company reached over 120 million
monthly page views across all properties, and had over 12 million
monthly unique visitors according to Google Analytics. The Company
continues to prune non-monetizable content and does not anticipate
any impact to revenue.
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; general economic,
industry and market sector conditions; the ability to generate
increased revenues from the Company’s forums; the ability to obtain
additional financing to implement the Company's long-term growth
strategy; 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.
CROWDGATHER, INC. CONSOLIDATED CONDENSED BALANCE
SHEETS January 31, 2014
(UNAUDITED)
April 30, 2013
ASSETS Current assets Cash $ 202,211 $ 375,512
Accounts receivable 228,558 214,931 Investments 28,570 28,570
Inventory 31,982 33,168 Prepaid expenses and deposits 44,984
50,561 Total current assets 536,305
702,742
Property and equipment, net of accumulated
depreciation of $462,745 and $363,746, respectively
149,948 225,980
Intangible assets, net of accumulated
amortization of $0 and $45,224, respectively
9,223,327 9,368,103 Goodwill 4,360,176
4,360,176
Total assets
$
14,269,756
$
14,657,001
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities Accounts payable $ 8,000 $ 8,000 Accrued
vacation 54,922 63,838 Other accrued liabilities 80,097 69,138
Capital lease obligation, current portion 27,629
115,921 Total current liabilities 170,648
256,897 Capital lease obligation, net of current portion -
9,267 Stockholders’ equity
Preferred Series B stock, $0.001 par
value, 1,000,000 shares authorized, 1,000,000 and 300,000 shares
issued and outstanding, respectively
1,000,000 300,000
Common stock, $0.001 par value,
975,000,000 shares authorized, 61,382,708 and 58,372,708 issued and
outstanding, respectively
61,513 58,503 Additional paid-in capital 29,630,306 29,070,716
Accumulated deficit (16,571,281 ) (15,016,952 ) Accumulated other
comprehensive loss (21,430 ) (21,430 ) Total
stockholders’ equity 14,099,108 14,390,837
Total liabilities and stockholders’ equity $
14,269,756 $ 14,657,001
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE
MONTHS ENDED JANUARY 31, 2014 AND 2013 (UNAUDITED)
Three Months Ended January 31, Nine
Months Ended January 31, 2014
2013 2014
2013
Revenue
$
446,201
$
508,689
$ 1,283,240 $ 1,523,623 Cost of revenue 703
25,752 3,325 44,968
Gross profit 445,498 482,937 1,279,915 1,478,655
Operating expenses
Payroll and related expenses 269,118 482,172 940,282 1,399,369
Stock based compensation 132,000 140,000 562,600 456,000 General
and administrative 382,134 540,075 1,185,668 1,767,381 Impairment
of intangible assets - - 140,026
- Total operating expenses 783,252
1,162,247 2,828,576
3,622,750
Loss from operations
(337,754
)
(679,310
)
(1,548,661 ) (2,144,095 ) Other income (expense), net
(843 ) (2,883 ) (4,868 ) (7,724 ) Net
loss before provision for income taxes (338,597 ) (682,193 )
(1,553,529 ) (2,151,819 ) Provision for income taxes
0 0 800 800
Net loss
$
(338,597
)
$
(682,193
)
$ (1,554,329 ) $ (2,152,619 )
Weighted average shares outstanding -
basic and diluted
61,101,632
58,343,360
59,621,777
58,308,544
Net loss per share – basic and diluted
$
(0.01
)
$
(0.01
)
$ (0.03 ) $ (0.04 )
CrowdGather, Inc.Investor Contact:Sanjay Sabnani,
818-435-2472 x 101sanjay@crowdgather.com
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