RNS Number:7323T
HipCricket, Inc.
06 May 2008
6th May 2008
HipCricket Inc.
("HipCricket" or the "Company",)
Maiden Preliminary Results to 31st December 2007
HipCricket (AIM: HIP), a pioneering mobile marketing company, announces its
maiden financial results since floating on AIM for the year ended 31 December
2007.
Financial Highlights Remain on Target:
* Revenues up 41% to $2.1 million (2006: $1.5m)
* Net loss of $6.9 million (including non-cash charges of $2.48m) (2006:
$0.9m loss)
* EDITDA loss of $4.6 million (net of warrant adjustments and stock
option charges) (2006: $0.6m loss)
* Net assets of $18.7 million, including cash of $17.6 million (2006:
$0.8m)
Operational Highlights:
* Successful AIM IPO in November 2007 raising $17.1 million (before
expenses)
* First-ever comprehensive Hispanic Mobile Marketing Network, bringing
the total station count to more than 300
* 177 broadcast stations at 31 December 2007, an increase of 354% over
2006
* Prominent client wins include St. Patrick's Day campaign for Jameson's
and Wiley Publishing's "For Dummies" series
* Strengthening of the Board with the appointment of Non-Executive
Director Michael Mogelgaard, former executive creative director of
EvansGroup, which was purchased by Publicis.
* Adding depth and experience to the management team through strategic
hires, including President/Chief Operating Officer, Chief Financial
Officer, Chief Marketing Officer, and Vice President of Brand
Solutions
Chief Executive Officer, Ivan Braiker commented:
"We continue to build on our leadership position. As planned, we grew revenue
in 2007 and continued to invest in our business model. Last month's launch of
our Hispanic Mobile Marketing Network was well received and has produced
meaningful interest from broadcasters and brands. As we survey the possibilities
of growing our product lines and leveraging our experience in the verticals we
currently serve, we believe there are opportunities to increase investment and
thus growth in these additional product areas and verticals such as print,
entertainment, and outdoor media. Our position of leadership, coupled with our
strong and experienced team, positions us well to expand into a rapidly emerging
market with the opportunity to create tremendous value."
For further information contact:
HipCricket, Inc. Jeff Hasen + 1 425 202-0835
Collins Stewart Europe Limited Tim Mickley +44 (0)20 7523 8000
John Peat
Parkgreen Communications Justine Howarth +44 (0)20 7851 7480
justine.howarth@parkgreenmedia.com
Lucy Lake 07894 263 046
lucy.lake@parkgreenmedia.com
CEO's Statement
In our first financial report since our Admission to AIM in November 2007, we
are pleased to announce our financial results for the year ended 31 December
2007 and to comment on our business highlights. Significant investment and
progress has been made in the ongoing development of our products and in the
expansion of our marketing channels.
* At 31 December 2007, HipCricket had 177 broadcast stations and is
anticipating continued strong growth in its station count and further
penetration in the top markets. Over time HipCricket expects that this
footprint can be leveraged by brand marketers to target listeners with campaigns
across the USA, similar to the Hispanic Mobile Marketing Network.
* HipCricket now has more than 300 stations signed to its broad service
offerings, which includes the first-ever comprehensive Hispanic Mobile Marketing
Network. As announced in April 2008, the network comprises a family of Hispanic
media outlets that can be leveraged by brand marketers. This will deliver
highly targeted and interactive mobile marketing programs directly to the
handsets of opted-in, engaged mobile users who are part of the $860 billion U.S.
Hispanic consumer market.
* Growth in our brand business included a recent St. Patrick's Day
campaign for Jameson's and an extensive program for Wiley Publishing's "For
Dummies" series that included text messaging, mobile advertising and WAP (mobile
web sites). The company has expanded its sales and client development team for
Brands and has opened a New York office.
* Recognition by CTIA - the preeminent wireless association - that
HipCricket is a mobile marketing pioneer and demonstrated outstanding growth in
2007
* Additions that bring HipCricket's staff total to more than 60.
HipCricket is expanding its capabilities in client development, including
experienced bilingual broadcast account managers, adding to its sales team, and
expanding its product development team.
* HipCricket added depth and experience to the management team in 2007
with the addition of President and COO Eric Harber, Chief Marketing Officer Jeff
Hasen, Chief Financial Officer Tom Virgin and VP Brand Solutions Steve Siegel.
These additions greatly expand the company's ability to keenly focus on timely
and effective execution of its strategy.
* HipCricket strengthened the board of directors with the addition of
Non-Executive Director Michael Mogelgaard, former executive creative director of
EvansGroup, which was purchased by Publicis
* HipCricket is increasing its offerings within the broadcast and brand
market segments, and is leveraging experience in these areas to potentially
expand into additional markets such as print, entertainment, and outdoor media.
Results
Revenue
Revenue for 2007 was $2.1 million, primarily from Broadcast and Brand clients.
HipCricket charges monthly fees to Broadcast clients for licensed access to the
Company's software, training, technical support 24 hours a day and 7 days a
week, and creative marketing and campaign support. Brand clients are generally
engaged on a campaign basis and receive access to the software as well as
creative marketing and campaign support. Fees for Brand customers are
customarily charged based on the scope and duration of the campaign.
For the period ended December 2007 the Company produced a net loss of $6.9
million, including a non-cash charge for fair value adjustment related to
warrants of $1.6 million a non-cash charge for the value of employee stock
options of $244k and a non-cash charge for stock issued for services of $582k.
EDITDA showed a loss of $4.6 million net of these charges.
Cost of Revenues
For 2007 the costs of revenues were $1.0 million, of which hosting fees were
$97k with the balance related to short code expense and client setup. The gross
margin was 51%.
Research & Development
HipCricket's service offering is based around a custom built, proprietary
software platform. The platform is a web-based system that allows users to send
and receive mobile and web based communications' including text messages, and
provides tools such as data analytics to enable the analysis and interpretation
of the results of individual marketing campaigns. The software has been designed
to be user-friendly so that even non-technical users can easily manage and
control their marketing campaigns. Research and development spending for 2007
was $306k of which $276k was salaries and benefits.
Sales & Marketing
HipCricket is able to generate sales leads by leveraging the extensive network
of client contacts held by the experienced management team, and by advertising,
speaking engagements, conferences, tradeshows, and general marketing. An
extensive marketing campaign was launched in the second half of 2007 and
included banner advertising on broadcast and brand industry websites. Other
marketing avenues used are public relations efforts and industry events. Sales
and Marketing spending in 2007 was $3.2 million, of which $2.1 million was
compensation and travel and $1.1 million was for marketing activities, including
advertising and public relations.
General & Administrative
General and Administrative expense for 2007 was $3.0 million, including $1.4
million in compensation and travel, $582k non-cash charges for warrant valuation
expenses classified as professional fees, and $244k for non-cash charges for
stock options.
Net Assets
The Company recorded net assets of $18.7 million at 31 December 2007, including
cash of $17.6 million and accounts receivable of $350k.
Current liabilities of $1.1 million include $139k in deferred revenues.
Strategy and Outlook
HipCricket endeavors to establish itself as the leading provider of mobile
marketing software and services to broadcasters and brands. The HipCricket
System and team help broadcasters drive revenue, audience loyalty and measurable
results. HipCricket is leveraging its strengths in the radio and brand market,
extending into the television market, and emerging as a strong partner for
brands. HipCricket intends to build on its broadcast business, increase its
effort with brands, and expand and augment its offerings with co-marketing and
seminars, mobile marketing networks and other potential strategic initiatives.
The Company is also in the process of building databases of specific
demographics and has begun establishing a mobile marketing network serving the
Hispanic community in 2008.
Broadcast
HipCricket is working to increase its market share by increasing its penetration
in top 50 broadcast markets and by pursuing and signing large client clusters.
HipCricket is also working with clients on creative and compelling mobile
marketing campaigns and interactions, thereby increasing our client's value to
their listeners and advertisers. We look for the effects of our new co-marketing
seminars business to increase through the year as we schedule and execute more
seminars for our broadcast clients.
Brand
We are increasing the investment in our Brand business to expand our reach and
offering. In early 2008 we established an office in New York and also plan to
hire additional sales and support staff.
Hispanic Mobile Marketing Network
One of the most rapidly growing US demographics, Hispanics are heavy users of
mobile technology and text messaging. In a recent Mobile Marketing Association
study, 32% of Hispanic consumers indicated that they were moderately or highly
receptive to mobile marketing messages. And they're already equipped to receive
those messages. 75% of all U.S. Hispanic households have multiple mobile phones
and use them more than any other form of personal or handheld technologies on
the market today - and more than half regularly use text messaging.
Important for broadcasters and marketers seeking to reach this demographic is
the number of Hispanics responding to text message advertisements, which has
increased by 20% in the past year. Overall, the rate of text message usage is
growing dramatically among Hispanics, increasing by 39% in the last 12 months,
according to a recent M:Metrics study.
As the company's focus will be on accelerating the impact of this development,
additional capital will be invested in building this exciting business
opportunity. Once the implementation of this program is completed, the network
will inevitably contribute to HipCricket's revenue streams going forward.
Summary
As we survey the possibilities of leveraging our experience in the vertical
markets we serve, we believe there are opportunities to increase investment and
resulting growth in additional verticals such as print, entertainment, and
outdoor media.
Overall, we believe we are building on our position as a leader in mobile
marketing. This position of leadership coupled with our strong and experienced
team, positions us well to expand into a rapidly emerging market with the
opportunity to create excellent value for our clients, our stakeholders, and our
Company.
Sincerely,
Ivan Braiker
Chief Executive Officer
HipCricket is a mobile marketing business whose technology enables clients to
interact directly and in real time with consumers via mobile telephone wireless
data services. The Company currently operates in the USA where its core clients
are broadcasters - primarily radio and television stations - as well as
companies with recognized brands. In addition to providing the technical tools
to allow marketing to mobile phones, and the interpretation of the results of
these marketing campaigns, HipCricket offers its clients creative marketing
ideas, development, support and training, drawing on the Company's experience of
over 17,000 mobile marketing campaigns.
Audited FS & notes (All $ amounts in US dollars)
BALANCE SHEET
ASSETS
2007 2006
US$ US$
CURRENT ASSETS
Cash and cash equivalents 17,621,369 408,789
Accounts receivable, net of allowance of $19,000 and zero, 350,237 269,613
respectively
Prepaid expenses and other current assets 447,443 68,413
Total current assets 18,419,049 746,815
PROPERTY AND EQUIPMENT, net 189,937 26,964
OTHER ASSETS 63,565 -
18,672,551 773,779
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 420,308 235,834
Accrued liabilities 520,340 82,182
Current portion of notes payable - 550,000
Current portion of capital leases 8,189 -
Deferred revenues 139,287 23,625
Total current liabilities 1,088,124 891,641
LONG-TERM LIABILITIES
Preferred stock warrants - 150,897
Notes payable, net of current portion - 100,000
Capital Leases, net of current portion 35,599 -
35,599 250,897
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Convertible preferred stock - par value $0.01 per share; zero and
6,000,000 shares authorized, respectively; zero and 4,842,107
shares
issued and outstanding, respectively; liquidation preference of - 1,496,254
$1,694,737
Common stock - par value $0.01 per share; 43,000,000 and 23,000,000
shares authorized, respectively; 28,729,213 and 10,160,001 shares
issued and outstanding, respectively 287,292 101,600
Additional paid in capital 26,780,322 690,083
Accumulated deficit (9,518,786) (2,656,696)
Total stockholders' equity (deficit) 17,548,828 (368,759)
18,672,551 773,779
PROFIT AND LOSS
2007 2006
US$ US$
REVENUES 2,133,265 1,508,796
DIRECT COST OF REVENUES 1,037,070 396,232
GROSS PROFIT 1,096,195 1,112,564
OPERATING EXPENSES
Research and development 306,217 91,466
Sales and marketing 3,180,625 1,023,738
General and administrative 2,986,193 632,186
Depreciation 34,293 7,668
Total operating expenses 6,507,328 1,755,058
Loss from operations (5,411,133) (642,494)
OTHER INCOME (EXPENSE)
Interest expense (19,215) (230,118)
Interest income and other 189,742 (1,500)
Warrant fair value adjustment (1,621,484) -
Total other income (expense) (1,450,957) (231,618)
NET LOSS (6,862,090) (874,112)
STATEMENT OF CASH FLOWS
2007 2006
US$ US$
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (6,862,090) (874,112)
Adjustments to reconcile net loss to net cash
used in operating activities
Depreciation 34,293 7,668
Issuance of equity instruments for services 582,400 48,755
Stock based compensation 243,782 31,675
Warrant fair value adjustment 1,621,484 -
Non cash interest expense - 57,950
Non cash conversion of costs to equity - 14,432
Loss on disposal of assets 6,166 1,500
Changes in assets and liabilities
Accounts receivable (80,624) (212,944)
Prepaid expenses and other current assets (379,030) (44,555)
Other assets (63,565) -
Accounts payable 184,474 75,152
Accrued liabilities 438,158 70
Deferred revenues 115,662 (36,958)
(4,158,890) (831,367)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of equipment - 1,464
Purchases of property and equipment (159,644) (25,920)
(159,644) (24,456)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible notes - 50,000
Proceeds from issuance of notes payable - 560,000
Payments on notes payable (650,000) (50,000)
Debt issuance costs - (4,000)
Proceeds from exercise of warrants 694,802 -
Proceeds from issuance of preferred stock, net of issuance costs 6,995,565 681,216
Proceeds from issuance of common stock, net of issuance costs 14,490,747 -
21,531,114 1,237,216
NET INCREASE IN CASH AND CASH EQUIVALENTS 17,212,580 381,393
CASH AND CASH EQUIVALENTS, beginning of year 408,789 27,396
CASH AND CASH EQUIVALENTS, end of year 17,621,369 408,789
NON-CASH FINANCING AND INVESTING ACTIVITIES
Equipment purchased under capital leases 43,788 -
Conversion of notes payable to Series A preferred stock - 803,948
Conversion of accrued expenses to note payable - 90,000
Series A preferred stock warrants included as issuance costs - 57,000
Conversion of preferred stock to common stock 9,450,116 -
Conversion of warrant liability to equity upon exercise 1,903,447 -
SUPPLEMENTAL INFORMATION
Cash paid for interest 18,892 2,667
Note 1 - Description of Operations and Summary of Significant Accounting
Policies
Description of Business - HipCricket, Inc. ("HipCricket" or "the Company"), a
Delaware corporation, is a mobile marketing Company that creates measurable,
real-time, one-to-one relationships between advertisers and their consumers and
prospects using text messaging and mobile content. The Company markets its
services through a direct sales force as well as through other service
providers.
The mobile marketing system operates in part using short codes for each unique
customer or program. HipCricket obtains short codes through third parties which
are normally readily available, however a change in the availability of short
codes, an increase in the cost of obtaining short codes, or regulatory change
may have an adverse impact on the Company's business or operating results.
HipCricket was founded in July 2004 as HipCricket LLC, a Connecticut limited
liability company headquartered in Essex, Connecticut. In July 2005, HipCricket
LLC merged into HipCricket, Inc. The financial statements include the operations
of HipCricket LLC prior to the merger in 2005. The Company is headquartered in
Kirkland, Washington. In November, 2007 the company registered on the London
Stock Exchange's AIM market. The initial offering sold 3,162,037 shares raising
$17,100,525. In connection with the offering, all outstanding preferred shares
totaling 13,892,175 were converted to common stock.
The Company has experienced operating losses since inception resulting in an
accumulated deficit of approximately $9.5 million at December 31, 2007. These
losses have been funded by sales of stock and various financing arrangements.
Currently, cash flows from operations do not support ongoing operations.
Management plans to sustain operations with current cash on hand and additional
financing from outside parties. The Company may be required to raise additional
capital through the sale of stock, debt financing from third parties, or other
financing arrangements with financial institutions which may or may not be
available under reasonable terms.
Accounting Principles - The financial statements and accompanying notes are
prepared in accordance with accounting principles generally accepted in the
United States of America.
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues, and expenses during the reporting
periods. Estimates are used for revenue recognition, customer life cycles, loss
contingencies, reserves for doubtful accounts, and valuation allowance on
deferred tax assets. Actual results and outcomes may differ from management's
estimates.
Note 1 - Description of Operations and Summary of Significant Accounting
Policies
(Continued)
Cash and Cash Equivalents - The Company considers all highly liquid investments
with an original maturity of three months or less at the date of purchase to be
cash equivalents. The Company maintains its cash accounts with financial
institutions where, at times, deposits exceed federal insurance limits. The
Company has not experienced any losses on its cash and cash equivalents.
Concentration of Credit Risk - The Company extends credits to customers and
therefore is subject to credit risk. The Company performs ongoing evaluations of
its significant customers' financial position, and generally extends credit on
account, without collateral. Significant customers represented 5.4% and 8.1% of
total revenues for the years ended December 31, 2007 and 2006, respectively, and
represented 12.4% and 21.2% of accounts receivable at December 31, 2007 and
2006, respectively.
Accounts Receivable - The Company reports accounts receivable at net realizable
value. The Company's terms of sale provide the basis for when accounts become
delinquent or past due. The Company provides an allowance for doubtful accounts
equal to the estimated uncollectible amounts. The Company determines the
estimate based on historical collection experience and a review of the current
status of the receivables. During the years ended December 31, 2007 and 2006,
$7,000 and $76,800, respectively, were written off as uncollectible.
Financial Instruments - The carrying amount of the Company's cash equivalents,
accounts receivable, prepaid expenses, other assets, accounts payable, and
accrued liabilities approximates their estimated fair values due to the
short-term nature of those financial instruments.
Property and Equipment - Property and equipment is stated at cost and
depreciated using the straight-line method over the estimated life of the
assets, ranging from one to seven years. Leasehold improvements are amortized
over the lesser of the lease term or the estimated useful life of the
improvements. The cost of normal maintenance and repairs is charged to expense
as incurred and expenditures for major improvements are capitalized at cost.
Gains or losses on the disposition of assets are reflected in the income
statement at the time of disposal.
Internally Developed Software - Statement of Position (SOP) No. 98-1, Accounting
for the Costs of Computer Software Developed or Obtained for Internal Use,
requires all costs related to the development of internal-use software other
than those incurred during the application development stage to be expensed as
incurred. Costs incurred during the application development stage are
capitalized and amortized over the estimated useful life of the software.
Internally developed software costs are amortized on a straight-line basis over
the estimated useful life of the software. No costs were capitalized during the
year ended December 31, 2007.
Note 1 - Description of Operations and Summary of Significant Accounting
Policies
(Continued)
Other Assets - Other assets consisted of long-term lease deposit on the
Bellevue, Washington headquarters. Subsequent to year-end, the lease was
cancelled and the deposit was refunded to the Company.
Revenue Recognition - The Company generates revenue from implementing customers
on the HipCricket system and providing monthly support and service to those
customers. The Company's revenue transactions include sales of mobile marketing
services primarily to broadcasters and brand companies. The Company recognizes
revenue when persuasive evidence of an arrangement exists, performance has
occurred, the fee is fixed or determinable, and collectibility is probable.
The Company recognizes revenue in accordance with Emerging Issues Task Force
(EITF) Issue No. 00-3, Application of AICPA Statement of Position No. 97-2,
Software Revenue Recognition, to Arrangements That Include the Right to Use
Software Stored on Another Entity's Hardware, and Staff Accounting Bulletin No.
104, Revenue Recognition in the Financial Statements. EITF Issue No. 00-3 states
that a software element covered by SOP 97-2 is only present in a hosting
arrangement if the customer has the contractual right to take possession of the
software at any time during the hosting period without significant penalty and
it is feasible for the customer to either run the software on its own hardware
or contract with another party unrelated to the vendor to host the software. The
Company's hosting arrangements do not allow the customer the contractual right
to take possession of the software during the hosting period; accordingly, the
hosting arrangements are considered service contracts. Revenues are recognized
as the services are performed. Implementation services provided to customers on
hosting arrangements and initial setup fees are deferred and amortized ratably
over the life of the contracts, generally twelve months, when all other revenue
recognition criteria are met.
The Company's arrangements may involve multiple elements including consulting,
implementation, training, and maintenance. HipCricket recognizes revenue for
arrangements with multiple elements in accordance with Emerging Issues Task
Force Issue No. 00-21, "Revenue Arrangements with Multiple Deliverables."
Consulting services and training revenues are accounted for separately from
other elements when these services have value to the customer on a standalone
basis and there is objective and reliable evidence of fair value of each
deliverable. When accounted for separately, revenues are recognized as the
services are rendered. The majority of consulting service contracts are on a
fixed fee basis. Training revenues are recognized after the services are
performed. For revenue arrangements with multiple deliverables, the Company
allocates the total customer arrangement to the separate units of accounting
based on their relative fair values, as determined by the price of the
undelivered items when sold separately.
Note 1 - Description of Operations and Summary of Significant Accounting
Policies
(Continued)
The Company enters into non-monetary arrangements with a subset of its clients
to be compensated in the form of airtime minutes. These minutes are in turn sold
by a third party to customers. Revenue is recognized in the amount at which the
airtime minutes are sold by the third party less applicable fees as it
represents a more readily determinable fair value of the marketing services
provided. Revenue recognized as a result of these non-monetary arrangements and
the related sale of the airtime minutes amounted to $123,129 and $112,051 for
the years ended December 31, 2007 and 2006, respectively.
Research and Development - Research and development expenses include payroll,
employee benefits, and other headcount-related costs associated with product
development. The Company has determined that technological feasibility for its
software product is reached shortly before the product is released to customers.
Costs incurred after technological feasibility is established are minimal and
are included within the statement of operations as research and development
costs when incurred.
Sales and Marketing - Sales and marketing expenses include payroll, employee
benefits, and other headcount-related costs associated with sales and marketing
personnel, and advertising, promotions, tradeshows, seminars, and other
marketing-related programs. Advertising costs are expensed as incurred.
Advertising expense was $904,628 and $10,265 for the years ended December 31,
2007 and 2006, respectively.
Income Taxes - In accordance with SFAS No. 109, "Accounting for Income Taxes,"
income taxes are accounted for using the assets and liabilities approach.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities, and their respective tax
basis. Deferred tax assets and liabilities are measured using enacted tax rates
expected to be applied to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that all or some portion of the deferred tax assets will not be
recoverable.
Stock Based Compensation - Effective January 1, 2006, the Company adopted the
fair value recognition provisions of Statement of Financial Accounting Standards
No. 123 (Revised 2004) ("SFAS No. 123(R)"), Share-Based Payments, using the
prospective transition method. For share-based compensation granted subsequent
to January 1, 2006, compensation expense based upon the estimated fair value on
the date of grant is recognized on a straight-line basis over the vesting
period.
Note 1 - Description of Operations and Summary of Significant Accounting
Policies
(Continued)
Prior to January 1, 2006, the Company accounted for share based compensation
using the intrinsic value method set forth in Accounting Principles Board
Opinion No. 25 ("APB No. 25"), Accounting for Stock Issued to Employees, and
related interpretations, as permitted by Statement of Financial Accounting
Standard No. 123 ("SFAS No. 123"), Accounting for Stock-Based Compensation
valued using the minimum value method and is not included in the stock-based
compensation expense under the prospective method. No stock-based employee
compensation cost was recognized in the Statement of Operations prior to January
2006 as all options granted under the plan had an exercise price approximately
equal to the estimated fair value of the Company's common stock at the grant
date.
Recent Accounting Pronouncements
In June 2006, the FASB issued FIN No. 48, "Accounting for Uncertainty in Income
Taxes" ("FIN 48"). FIN 48 clarifies the application of SFAS No. 109 by providing
detailed guidance for the financial statement recognition, measurement, and
disclosure of uncertain tax positions recognized in an enterprise's financial
statements. Tax positions must meet a more-likely-than-not recognition threshold
at the effective date to be recognized upon the adoption of FIN 48 and in
subsequent periods. In November 2007, the FASB deferred FIN 48 to be effective
for fiscal years beginning after December 15, 2007. The Company is currently
evaluating the potential effects, if any, of FIN 48 on its financial statements.
In September 2006, the FASB issued Statement No. 157, "Fair Value Measurements"
("SFAS 157"). SFAS 157 defines fair value, establishes a framework and gives
guidance regarding the methods used for measuring fair value, and expands
disclosures about fair value measurements. SFAS 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. HipCricket is required to adopt SFAS
No. 157 in the first quarter of 2008. The Company is currently evaluating the
impact of adopting SFAS 157 on its financial statements.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities" ("SFAS 159"). SFAS 159 permits
entities to choose, at specified election dates, to measure eligible items at
fair value ("fair value option") and to report in earnings unrealized gains and
losses on those items for which the fair value option has been elected. SFAS 159
also requires entities to display the fair value of those assets and liabilities
on the face of the balance sheet. SFAS 159 is effective as of the beginning of
an entity's first fiscal year beginning after November 15, 2007. Early adoption
is permitted as of the beginning of the previous fiscal year provided that the
entity makes that choice in the first 120 days of that fiscal year and also
elects to apply the provisions of SFAS 157. The Company is currently assessing
the potential impact, if any, of implementing this standard.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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