- 113% year-over-year growth in TotalSocial revenue
- Growth based on increase in number of clients to 20 (up
from 9) and expansion of sectors served to 11 (up from 6)
- Total company revenue growth of 15% year-over-year
- Gross profit increased by 25% for 2018, and gross margin
improved from 42% to 46% for 2018
MONTREAL, May 2, 2019 /CNW/ -- Engagement Labs Inc. (TSXV:
EL) (OTCQB: ELBSF) released results for its fiscal year ended
December 31, 2018. Audited
consolidated Financial Statements and Management Report are
available on SEDAR's website at www.sedar.com.
Fiscal Year 2018 Audited Results Released
- TotalSocial® revenue increased by 113% from year ended
December 31, 2017 to year ended
December 31, 2018.
- The number of brands using TotalSocial® increased to 20 during
2018, up from 9, and the number of industry sectors increased from
6 to 11. New sectors include Sports, Retail/Apparel, Beverage,
Agency and Travel, to go along with Media, Beauty, Telecom,
Software, Food and Financial.
- Total revenue, including both TotalSocial® and the Company's
legacy products, was $3,973,704 for
the year ended December 31, 2018, an
increase of 15% compared to $3,469,767 for the year ended December 31, 2017. In the US,
year-over-year growth was 26%, while the UK saw a decline for the
year.
- Gross profit increased by 25%, from $1,457,485 for the year ended December 31, 2017 to $1,818,527 for the year ended December 31, 2018. As a percentage of revenue,
the gross margin increased by 4%, from 42% for the year ended
December 31, 2017 to 46% for the year
ended December 31, 2018.
- Non-GAAP Adjusted EBITDA loss increased by 20%, from
-$2,684,152 for the year ended
December 31, 2017 to -$3,228,681 for the year ended December 31, 2018. Operating expenses before
extraordinary items increased by 18%, from $5,514,535 for the year ended December 31, 2017 to $6,533,005 for the year ended December 31, 2018.
- The net loss before income taxes for the year ended
December 31, 2018 increased to
-$5,628,884, up 26% or -$1,170,877 from -$4,458,007 for the year ended December 31, 2017. Basic and diluted loss per
share was -$0.03 for the year ended
December 31, 2018, compared to
-$0.05 for the year ended
December 31, 2017.
Fourth Quarter Financial Highlights
- TotalSocial® Revenue of $1,109,923 for Q4 2018 represents a 137% increase
vs Q4 2017 of $467,908, and a 34%
increase vs Q3 2018 of $829,739.
- Total revenue, including both TotalSocial® and the Company's
legacy products was $1,139,156 for Q4
2018, an increase of 29% from $883,342 in Q3 2018, and an increased of 15%,
from $989,553 for Q4 2017.
- Gross margin increased to 54% in Q4 2018, from 40% in Q3 2018
and from 39% in Q4 2017.
- Operating expenses, before extraordinary items, have increased
to $1,774,244 in Q4 2018, up 21% or
$301,912 from $1,472,332 in Q3 2018, and up 5% or $83,644 from $1,690,600 in Q4 2017. The increase from 2017
reflects management's commitment to invest in sales and marketing
to drive TotalSocial® technology sales growth, including the hiring
of a Chief Revenue Officer in late December
2017.
- Excluding extraordinary items and future income taxes, the net
loss has increased to -$1,411,297 in
Q4 2018, up 5% or -$61,745 from
-$1,349,552 in Q3 2018, and down 9%
or -$138,746 from -$1,550,043 in Q4 2017.
- EBITDA loss of -$1,012,039 for Q4
2018, representing an increase of $30,190, from -$981,849 for Q3 2018, and an increase of
-$465,427, from -$546,612 for Q4 2017.
- Non-GAAP Adjusted EBITDA loss of -$735,594 for Q4 2018, representing an improvement
of $11,838, from -$747,432 for Q3 2018, and an improvement of
$313,613, from -$1,049,207 for Q4 2017.
- Operating expenses increased 17% or $212,074 from Q3 2017. The increase from 2017
reflects management's commitment to invest in sales and marketing
to drive TotalSocial® technology sales growth, including the hiring
of a Chief Revenue Officer in late December.
- Basic and diluted income per share was -$0.01 for Q4 2018 compared to -$0.01 for Q4 2017 and Q3 2018.
- As at December 31, 2018, the
Company had cash (excluding restricted cash) of $906,455, compared to $2,677,049 as of December
31, 2017.
"I said a year ago that 2018 is shaping up to be a
transformative year for Engagement Labs as TotalSocial is now
resonating with clients and prospects," said Ed Keller, CEO. "Our year end results show
the amount of progress we have made. We grew our number of
clients and our range of sectors served."
Corporate Restructuring
Proposed Share Consolidation and Amendment to Terms of
Outstanding Debentures
Engagement Labs has mailed a
Notice of Special Meeting of Shareholders providing for the
proposed consolidation of the common shares of the Company on a
two-for-one basis effective on or about May
27, 2019. The Meeting Materials also contemplate the
approval of the issue of approximately 6,000,000 common shares on a
post-consolidation basis at a price of $0.06 per share for fees owing to directors for
14 months of services for the period ended December 31, 2018. The payment in shares is
to conserve cash of Engagement Labs and is subject to approval of
the TSX Venture Exchange.
Engagement Labs has mailed a Notice of Meeting and Management
Information Circulars ("Meeting Materials") to holders of the 1%
Debentures, and separate Meeting Materials to 2% Debentures, both
of which series are due September 28,
2020. Engagement Labs is proposing to holders of 1%
Debentures, of which there are approximately $4.23 million outstanding, and holders of 2%
Debentures, of which there are approximately $1.6 million outstanding, to amend the terms of
their debentures, subject to approval of 90% of the debentures
outstanding of each series of debentures at a meeting or in
writing, providing for the conversion of all of their outstanding
debentures at a price of $0.11 per
share for the 1% Debentures and $0.06
per share for the 2% Debentures, effective on or about May 27, 2019. These amendments, if approved,
would cause all outstanding debentures to be cancelled and would
substantially improve the Company's financial position. The
pricing of the conversion of the debentures is subject to final
approval of the TSX Venture Exchange.
Prospectus Offering
The Company has entered into an
agreement with Gravitas Securities Inc. (the "Agent"), pursuant to
which the Agent has agreed to sell on a commercially
reasonable efforts basis by short form prospectus, up to 30,000,000
units of the Company (the "Units") at a price of $0.06 per Unit for aggregate gross proceeds to
the Company of up to $1,800,000. Each
Unit will be comprised of one common share of the Company, one-half
of one common share purchase warrant (each such whole common share
purchase warrant, a "$0.10 Warrant")
and a second one-half of one common share purchase warrant (each
such whole common share purchase warrant, a "$0.12 Warrant"). Each $0.10 Warrant will be exercisable into one common
share at an exercise price of $0.10
per share for a period of 6 months after the Closing Date (as
defined herein). Each $0.12 Warrant
will be exercisable into one common share at an exercise price of
$0.12 per share for a period of 2
years after the Closing Date. The offering is subject to a minimum
offering amount of $1,500,000.
The Company has also agreed to grant the Agent an over-allotment
option to purchase up to an additional 4,500,000 Units at the
offering price, exercisable in whole or in part, for a period
ending 30 days from and including the Closing Date. In the event
the over-allotment option is exercised in full, the aggregate gross
proceeds of the offering will be $2,070,000.
The Units will be offered in each of the provinces of
British Columbia, Alberta, Manitoba and Ontario by short form prospectus.
The offering is expected to close on or about May 27, 2019 (the "Closing Date") and is subject
to certain conditions including, but not limited to, the receipt of
all necessary approvals including the approval of the TSX Venture
Exchange, the consolidation of the common shares of the Company on
a two-for-one basis having occurred, the conversion of certain
outstanding debentures of the Company in accordance with their
terms and the issuance of a receipt for a final short form
prospectus.
The Company intends to use the net proceeds from the offering
for working capital and general corporate purposes.
NOT FOR DISTRIBUTION TO UNITED
STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities of Engagement
Labs Inc. in the United States,
nor shall there be any sale of the securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful. The
securities offered have not been and will not be registered under
the United States Securities Act of 1933, as amended, or any U.S.
state securities laws and may not be offered or sold within
the United States or to, or for
the account or benefit of, U.S. Persons unless registered under the
United States Securities Act of 1933, as amended, and applicable
state securities laws or unless an exemption from such registration
is available.
About Engagement Labs
Engagement Labs (TSXV: EL)
(OTCQB: ELBSF) is an industry-leading data and analytics firm that
provides social intelligence for Fortune 500 brands and companies.
The Company's TotalSocial® platform focuses on the entire social
ecosystem by combining powerful online (social media) and offline
(word of mouth) data with predictive analytics. Engagement Labs has
a proprietary ten-year database of unique brand, industry and
competitive intelligence, matched with its cutting-edge predictive
analytics that use machine learning and artificial intelligence to
reveal the social metrics that increase marketing ROI and top line
revenue for its diverse group of clients.
To learn more
visit www.engagementlabs.com / www.totalsocial.com.
About TotalSocial®
TotalSocial®
is a premier data and analytics platform that provides brands with
unique insights, improved marketing ROI and strategies to grow
revenue. Fueled by actionable online and offline data, TotalSocial
is the only platform that encompasses and listens to the entire
social ecosystem. TotalSocial offers unique, proprietary data about
brands, its industry and competitors. With cutting-edge
diagnostics, patent-pending predictive analytics and machine
learning, TotalSocial identifies business opportunities and
provides recommendations and a roadmap to grow revenue and achieve
business and marketing goals.
About Gravitas Securities Inc.
Gravitas Securities
Inc. is a leading and prominent capital markets and wealth
management firm comprised of tactical individuals known for their
sophisticated sector expertise, commitment to excellence, and a
global platform committed to integration and innovation. Gravitas
provides a wide range of investment services for retail and
corporate clients globally with offices in Toronto and Vancouver, and is represented in the United States through its FINRA
representative, Gravitas Capital International, in New York. Gravitas Securities Inc. is a member
of IIROC and CIPF.
Disclaimer in regard to Forward-looking
Statements
Certain statements included herein constitute
"forward-looking statements" within the meaning of applicable
securities laws. Such forward-looking statements include, without
limitation, the completion of the Offering, the timing of the
Closing Date, the gross proceeds of the Offering, regulatory
approval of the Offering, the use of the net proceeds, if any, of
the Offering, completion of the proposed share consolidation and
the amendment to the terms of the outstanding debentures.
Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by
management at this time, are inherently subject to significant
business, economic and competitive uncertainties and contingencies.
Investors are cautioned not to put undue reliance on
forward-looking statements. Additional risks and uncertainties
regarding Engagement Labs are described in its publicly-available
disclosure documents, filed by Engagement Labs on SEDAR
(www.sedar.com) except as updated herein. The forward-looking
statements contained in this news release represent the Company's
expectations as of the date of this news release, or as of the date
they are otherwise stated to be made, and subsequent events may
cause these expectations to change. Except as required by law,
Engagement Labs does not intend, and undertakes no obligation, to
update any forward-looking statements to reflect, in particular,
new information or future events.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
For media inquiries please contact:
Vanessa Lontoc, Marketing Director /
Ed Keller, CEO
Engagement Labs
732-846-6800
vanessa.lontoc@engagementlabs.com /
ed.keller@engagementlabs.com
SOURCE Engagement Labs