MEET Meet Group Inc

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): July 22, 2014

 

MeetMe, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-33105		86-0879433
(State or other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

100 Union Square Drive New Hope, Pennsylvania		18938
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (215) 862-1162

 

Not Applicable

(Former name or former address if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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Item 2.02 Results of Operations and Financial Condition

 

On July 22, 2014, MeetMe, Inc. (the “Company”) issued a press release announcing its expected results for the second fiscal quarter ended June 30, 2014. A copy of the press release is furnished as Exhibit 99.1 to this Current Report.

 

Presented below is preliminary estimated financial information for the Company’s second fiscal quarter, ended June 30, 2014, based on currently available information. The Company has not finalized its financial results for its second fiscal quarter and McGladrey LLP, the Company’s independent registered public accounting firm, has not performed any procedures with respect to the preliminary estimated financial information contained below, nor has it expressed any opinion or other form of assurance on such preliminary estimated financial information or its achievability. These preliminary estimates should not be regarded as a representation by the Company or its management as to the Company’s actual financial results for its second fiscal quarter. The preliminary estimated financial information presented below is subject to change, and the Company’s actual financial results may differ from such preliminary estimates and such differences could be material.

 

The following are preliminary estimates of financial results for the Company’s second fiscal quarter, ended June 30, 2014:

 

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Revenue is estimated to be $10.7 million, an increase of 12% as compared to $9.5 million for the Company’s second fiscal quarter ended June 30, 2013. The estimated increase in revenue compared to the corresponding period in 2013 was primarily due to increased mobile revenue.

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Mobile revenue is estimated to be $5.6 million, an increase of 114% as compared to $2.6 million for the Company’s second fiscal quarter ended June 30, 2013. The estimated increase in mobile revenue compared to the corresponding period in 2013 was primarily due to higher advertising revenue.

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Adjusted EBITDA is expected to be approximately $740,400, an increase of 93% as compared to $384,000 for the second fiscal quarter ended June 30, 2013.

 

Adjusted EBITDA is a financial measure that is not calculated in accordance with GAAP. The following table presents a reconciliation of net loss from continuing operations, the most directly comparable GAAP financial measure, to Adjusted EBITDA for the second quarters ended June 30, 2014 and June 30, 2013.

 

		Three months ended June 30,
		2014				2013
		(unaudited, in thousands)
Net loss from continuing operations allocable to common shareholders		$	(1,437.8	)		$	(2,099.0	)
Interest expense			241.6				141.7
Depreciation and amortization			1,079.9				1,089.0
Amortization of stock based compensation			1,038.1				605.8
Acquisition related restructuring costs			—				646.5
Change in warrant liability			(181.4	)			—
Adjusted EBITDA		$	740.4			$	384.0

  

 

One operating metric that the Company uses to measure activity on its sites is in terms of daily active users (“DAUs”), and the Company defines a mobile DAU as a user who accessed the Company’s sites by one of the Company’s mobile applications or by the mobile-optimized version of the Company’s website, whether on a mobile phone or tablet, such as the iPad, during the day of measurement. The following is the Company’s preliminary estimate of average mobile DAU as of June 30, 2014:

 

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Average mobile DAU for the month ended June 30, 2014 is expected to be 863,781, an increase of 12% as compared to average mobile DAU of 772,203 for the quarter ended March 31, 2014.

 

The information furnished pursuant to Item 2.02 of this Current Report, including Exhibit 99.1 hereto, shall not be considered “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall it be incorporated by reference into future filings by the Company under the Securities Act of 1933, as amended, or under the Exchange Act, unless the Company expressly sets forth in such future filing that such information is to be considered “filed” or incorporated by reference therein.

 

Note on presentation of Non-GAAP financial measures

 

The Company uses financial measures which are not calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”) in evaluating its financial and operational decision making and as a means to evaluate period-to period comparison. The Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company presents these non-GAAP financial measures because it believes them to be an important supplemental measure of performance that is commonly used by securities analysts, investors and other interested parties in the evaluation of companies in the Company’s industry.

 

The Company defines Adjusted EBITDA as earnings (or loss) from continuing operations before interest expense, income taxes, depreciation and amortization, and amortization of non-cash stock-based compensation, non-recurring acquisition and restructuring expenses and the goodwill impairment charges. The Company excludes stock-based compensation because it is non-cash in nature.

 

Non-GAAP financial measures should not be considered as an alternative to net income, operating income, cash flow from operating activities, as a measure of liquidity or any other financial measure. They may not be indicative of the Company’s historical operating results nor is it intended to be predictive of potential future results. Investors should not consider non-GAAP financial measures in isolation or as a substitute for performance measures calculated in accordance with GAAP.

 

Item 9.01. Financial Statements and Exhibits

 

(d)      Exhibits

 

Exhibit No.	Description
10.1 #	Amendment No. 2 to Advertising Agreement, dated May 20, 2014, effective May 13, 2014, by and between MeetMe, Inc. and Pinsight Media+, Inc.
99.1 **	MeetMe, Inc. press release, dated July 22, 2014.

 

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Confidential treatment requested under 17 C.P.R. §§200.80(b)(4) and 240.24b-2. The confidential portions of this exhibit have been omitted and are marked accordingly. The confidential portions will be filed separately with the Securities and Exchange Commission.

 

**

This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

  

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

	MEETME, INC.
Date: July 22, 2014	By: /s/ David Clark
	Name: David Clark
	Title: Chief Financial Officer

 

 

EXHIBIT INDEX

 

 

Exhibit No.	Description
10.1	Amendment No. 2 to Advertising Agreement, dated May 20, 2014, effective May 13, 2014, by and between MeetMe, Inc. and Pinsight Media+, Inc.
99.1	MeetMe, Inc. press release, dated July 22, 2014.

 

 

Exhibit 10.1

 

Confidential treatment requested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2. The confidential portions of this exhibit have been omitted and are marked accordingly. The confidential portions will be filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request.

 

AMENDMENT NO. 2 TO ADVERTISING AGREEMENT

 

This Amendment No. 2 (the “Amendment No. 2”) effective as of May 13, 2014 (the “Effective Date”) is to that certain Advertising Agreement (“Agreement”) dated October 31, 2013, by and between and Pinsight Media+, Inc. (“Pinsight”) and MeetMe, Inc. (“Publisher”) and amended on January 29, 2014. Except as otherwise indicated, defined terms in this Amendment No. 2 have the same meaning as in the Agreement.

 

I.     Background.

 

Pinsight and Publisher are amending the Agreement so that Publisher may add new mobile advertising placements within select areas of the App under the placement and revenue sharing terms set forth below.

 

II.     Terms

 

The parties agree as follows:

 

A.     The Agreement is amended by adding the following to Exhibit A:

 

1. As of the Effective Date Publisher may begin running interstitially placed advertisements (“Interstitials”) and Pinsight will deliver impressions therefor and pay Publisher the higher of (i) $[**], and (ii) [**] of Pinsight’s net revenue for each impression. Pinsight will not be required to deliver impressions at a rate lower than $[**], and Pinsight will pay only for Interstitial impressions that it actually delivers (and not for all ad calls relating to Interstitials), provided that Pinsight will make reasonable efforts to optimize fill. Publisher reserves the right to fill all Interstitial ad requests that Pinsight does not fill in accordance with the foregoing.

 

Publisher will amend the current weekly directional report to include Interstitial ad requests. Pinsight will then return the weekly directional report with interstitial requests and impressions to publisher.

 

2. As of the Effective Date, Publisher may add new ad units to specific placement sections and Pinsight will deliver them at the existing rates in the Agreement ($[**] for [**] and [**], and $[**] for [**]).

 

This may include a new native ad unit ([**]) which will be included, on a [**] trial in the following locations:

 

Profile and Friends:  A ([**]) native ad ([**]) in [**] of the feed.  This ad will scroll with the feed.  No other ads will appear in this feed (other than the banner ad at the bottom).

 

Chat:  Inboxes with less than [**], [**] native ad ([**]) at [**] of the list.

 

Chat:  Inboxes with more than [**], [**] native ad ([**]) at [**] of the feed.  This ad will scroll with the feed.  ([**]) other ads will appear in this feed (other than the banner ad at the bottom).

 

 

** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

 

With respect to these native ad units ([**]), Pinsight will pay Publisher $[**]. Payment shall be based on the greater of the total number of impressions and [**] of the total number of ad requests, as reported weekly by Pinsight Media.  Revenue above this amount ($[**]) will be handled in the same way as with all other placements as defined in Section 7(b) of Amendment 1.

 

This may also include a new placement for [**] ads ([**]) in the Photos section. As a user swipes through photos in a logic that Publisher will determine, with a minimum of [**] after each ad.  Publisher may cache [**] before that ad is to be displayed. Pinsight will pay Publisher $[**].  Revenue above this amount ($[**]) will be handled in the same way as with all other placements as defined in Section 7(d) of Amendment 1. 

 

This may include [**] fixed footer banner placement ([**]) on the Profile, Photos, Friends and Chat screens (some of which were added prior to the Effective Date). Pinsight will deliver them at the existing rates in the Agreement ($[**]).

 

III.     General

 

A.     Other than as set forth above, the Agreement remains unchanged and in full force and effect.

 

B.     If there is a conflict between the terms of the Agreement, any previous Amendment(s) and this Amendment No. 2, this Amendment No. 2 will control unless otherwise stated in this Amendment No. 2.

 

This Amendment No. 2 executed by authorized representatives of Pinsight and Publisher incorporates the terms and conditions of the Agreement.

 

 

 

PINSIGHT MEDIA +, INC.

 

By:_/s/ Brian Smith______________

 

Name:_Brian Smith______________

 

Title:_Director – 3rd Party_________

 

Date:_5/20/14___________________

 

 

 

MEETME, INC.

 

By:__/s/ Geoff Cook______________

 

Name:_Geoff Cook_______________

 

Title:_CEO______________________

 

Date:__5/20/14___________________

 

 

** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

2

 

Exhibit 99.1

 

 

Investor contact:

Joe Hassett

Senior Vice President

Gregory FCA

JoeH@GregoryFCA.com 

 

MeetMe Announces Expected Second Quarter 2014 Results

 

NEW HOPE, Pa.—July 22, 2014—MeetMe, Inc. (NASDAQ: MEET), the public market leader for social discovery, today announced that its second quarter revenue is estimated to be $10.7 million, an increase of 12% as compared to $9.5 million for its second fiscal quarter ended June 30, 2013. The estimated increase in revenue compared to the corresponding period in 2013 is primarily due to increased mobile revenue. Mobile revenue is estimated to be $5.6 million, an increase of 114% as compared to $2.6 million for its second fiscal quarter ended June 30, 2013. The estimated increase in mobile revenue compared to the corresponding period in 2013 is primarily due to higher advertising revenue.

 

Average mobile daily active users (DAU) for the month ended June 30, 2014 is expected to be 863,781, an increase of 12% as compared to average mobile DAU of 772,203 for the quarter ended March 31, 2014.

 

MeetMe expects to announce full second quarter 2014 results in early August at which point it will also furnish all additional revenue and profitability related metrics.

  

 

About MeetMe, Inc.

MeetMe® is the leading social network for meeting new people in the US and the public market leader for social discovery (NASDAQ: MEET). MeetMe makes meeting new people fun through social games and apps, monetized by both advertising and virtual currency. With 75 percent of traffic coming from mobile, MeetMe is fast becoming the social gathering place for the mobile generation. The Company operates MeetMe.com and MeetMe apps on iPhone, iPad, and Android in multiple languages including English, Spanish, Portuguese, French, Italian, German, Chinese (Traditional and Simplified), Russian, Japanese, Dutch, Turkish and Korean. For more information, please visit www.meetmecorp.com.

 

Cautionary Note Concerning Forward-Looking Statements
 

Certain statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including statements regarding expected revenue, including expected mobile and advertising revenue, and expected daily active users (DAU). All statements other than statements of historical facts contained herein, including statements regarding the continued growth in our core platform, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual results to differ include the success of our advertising initiatives and mobile strategy, the impact of our new initiatives on revenue growth, and the size and engagement of our user base, and unforeseen technical or other problems or issues that could affect the performance of our products or our business.  Further information on our risk factors is contained in our filings with the SEC, including the Form 10-K for the year ended December 31, 2013.  Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

 

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