Growth driven by Mega Fame Social Casino
Specialty social media and gaming network, CrowdGather, Inc.
(OTCQB:CRWG), today announced financial results for the third
quarter and nine months ended January 31, 2015.
The Company reported revenues of $690,507 for the three months
ended January 31 of fiscal 2015, resulting in $1,490,831 in total
revenue for the nine months ended January 31 of fiscal 2015,
compared to $446,201 and $1,283,240, respectively, for the same
periods in the prior fiscal year.
“We are pleased to report a record revenue quarter,” said Sanjay
Sabnani, CrowdGather’s founder and CEO. “Our pivot into the gaming
space was a focused attempt to regain sales momentum and leverage.
We are excited to share results that we believe show our strategy
is working. While we still face challenges when it comes to
procuring additional financing, we believe that having growth in
sales and gross profit should help. While our transition into
gaming through the merger with Plaor has changed the composition of
our cost structure, with a higher cost of revenue for platform fees
as well as increased payroll and advertising expenses as compared
to our forum business, we believe that continued growth in revenues
from gaming will offset and leverage these higher expenses as we
achieve scale.”
Gross profit was $516,943 and $1,062,353 respectively, for the
three months and nine months ended January 31 of fiscal 2015,
compared to $445,498 and $1,279,915 for the same periods in the
prior fiscal year.
Net loss was $1,639,866 or $.01 per share, and $6,527,181, or
$.06 per share, for the third quarter and nine months ended January
31 of fiscal 2015, compared to a net loss of $338,597, or $.01 per
share, and $1,554,329 or $.03 per share, for the same periods of
fiscal 2014.
The increased loss for the quarter and nine months ended January
31, 2015 primarily relate to higher payroll and advertising costs
relating to the merger with Plaor in May 2014, as well as non-cash
charges relating to our amortization expense included in our
general and administrative expenses and the loss on the fair value
adjustment to our derivative liabilities.
CrowdGather ended the third quarter of fiscal 2015 with
approximately $250,000 of cash and $7.3 million of shareholders’
equity.
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.
CrowdGather subsidiary, Plaor, a company that specializes in
developing highly scalable multi-platform games, is located in the
heart of Boston's fast growing Innovation District. Plaor produces
Mega Fame Casino, an innovative and highly rated social casino
available on iOS, Android & desktop. With over 20 employees,
the Plaor team is a mix of rising-star newcomers and
widely-recognized game development veterans from companies
including Rockstar Games, Turbine, Harmonix, Irrational Games,
Nanigans, Sony Online Entertainment, ThoughtWorks, THQ, and Caesars
Interactive Entertainment.
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 and Plaor’s social
casino; the ability to obtain additional financing; 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, 2015
(UNAUDITED)
April 30, 2014
ASSETS Current assets Cash $ 249,903 $ 546,158
Accounts receivable 264,199 130,709 Investments 21,480 21,480
Inventory 31,770 31,913 Prepaid expenses and deposits 63,995
48,652 Total current assets 631,347 778,912
Property and equipment, net of accumulated
depreciation of $589,483 and $493,887, respectively
76,759 130,518
Intangible and other assets, net of
accumulated amortization of $600,800 and $-0-, respectively
8,327,396 7,336,771 Goodwill 1,817,400 -
Total assets $
10,852,902
$ 8,246,201
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities Accounts payable $ 201,637 $ 8,000 Line of
Credit 339,852 - Deferred revenue 568,606 - Accrued vacation 96,429
44,078 Other accrued liabilities 488,543 154,746 Convertible note
payable, net of discount 168,834 - Derivative liabilities 788,649 -
Notes payable, net of discount 900,517 - Total
current liabilities 3,553,067 206,824 Stockholders’
equity
Preferred Series B stock, $0.001 par
value, 1,000,000 shares authorized, 0 and 1,000,000 shares issued
and outstanding, respectively
- 1,000,000
Common stock, $0.001 par value,
975,000,000 shares authorized, 117,033,509 and 61,657,708 issued
and outstanding, respectively
117,033 61,658 Additional paid-in capital 36,481,223 29,748,961
Accumulated deficit
(29,269,901)
(22,742,722)
Accumulated other comprehensive loss
(28,520)
(28,520)
Total stockholders’ equity 7,299,835 8,039,377
Total liabilities and stockholders’ equity $ 10,852,902 $
8,246,201
CONSOLIDATED CONDENSED STATEMENTS OF
OPERATIONSFOR THE THREE AND NINE MONTHS ENDED JANUARY 31,
2015 AND 2014(UNAUDITED)
Three Months Ended January 31, Nine Months Ended
January 31, 2015 2014 2015
2014
Revenue
$
690,507
$
446,201 $ 1,490,831 $ 1,283,240 Cost of revenue
173,564 703 428,478 3,325 Gross profit
516,943 445,498 1,062,353 1,279,915
Operating expenses
Payroll and related expenses 518,615 269,118 1,765,298 940,282
Stock based compensation 118,000 132,000 317,000 562,600 General
and administrative 980,936 382,134 3,376,850 1,185,668 Loss on
disposal of assets - - 1,529,262 - Legal settlements, net - -
50,000 - Impairment of intangible assets - - -
140,026 Total operating expenses 1,617,551
783,252 7,038,410 2,828,576
Loss from operations
(1,100,608)
(337,754)
(5,976,057) (1,548,661) Other income (expense) Interest
expense, net (34,009) (843) (47,517) (4,868) Change in fair value
of derivative liabilities (505,249) -
(502,807) - Total other income (expense) (539,258)
(843) (550,324) (4,868) Net loss before
provision for income taxes (1,639,866) (338,597) (6,526,381)
(1,553,529) Provision for income taxes 0 0
800 800
Net loss
$
(1,639,866)
$
(338,597) $ (6,527,181) $ (1,554,329)
Weighted average shares outstanding- basic
and diluted
116,842,747
61,101,632
113,014,884
59,621,777
Net loss per share – basic and diluted
$
(0.01)
$
(0.01)
$ (0.06) $ (0.03)
Investors:CrowdGather, Inc.Sanjay Sabnani, 818-435-2472 x
101sanjay@crowdgather.com
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