RNS Number : 5029E
HipCricket, Inc.
29 September 2008
HipCricket Inc.
("HipCricket" or the "Company", AIM: HIP)
Interim Results for the six months ended 30 June 2008
HipCricket, a pioneering mobile marketing company, announces its unaudited financial results for the six months ended 30 June 2008.
Financial Highlights:
* Revenues up 121% to $1.89 million (2007: $0.86 million).
* Net loss of $4.7 million (2007: $2.4 million net loss). * Net assets of $14.3 million including cash of $12.8 million.
Operational Highlights:
* Launch of the first comprehensive Hispanic Mobile Marketing Network.
* 315 Broadcast stations at period end, a 178% increase over 31 December 2007 (177 stations).
* Honoured with Frost & Sullivan's 2008 Market Penetration Leadership Award and described by Frost & Sullivan as having "taken an early
lead in the US mobile marketing space." * Named a pioneer for the second consecutive year by CTIA, the preeminent global wireless
association. * Added depth and experience to Board and management. * Renewed agreement with Katz Media Group, the only US full
service media sales and marketing firm.
Chief Executive, Ivan Braiker, commented:
"We have done well in the first half of the year despite a difficult economic environment and lower spending in mobile than forecast. We
have made significant progress in building a footprint of broadcast stations and leading brands. This is resulting in the creation of a
strong foundation for the accelerated spending in mobile that is to come.
The strides that we have made to acquire station count has been in line with expectations and the Hispanic sector penetration will reap
rewards to our revenue model once the preparatory work to incorporate this network is completed.
The business we are building has allowed us to establish ourselves as the market leader in this sector. We are confident that we are on
the right track for building significant shareholder value."
For further information contact:
HipCricket, Inc. Jeff Hasen + 1 425 202 0835
Collins Stewart Europe Limited Hugh Field +44 (0)20 7523 8000
John Peat
Parkgreen Communications Paul McManus +44 (0)20 7933 8787/ 07980 541
Lucy Lake 893
+44 (0)20 7933 8789/ 07894 263
046
Paul.mcmanus@parkgreenmedia.
com
Lucy.lake@parkgreenmedia.com
CEO's Statement
In 2008, we have continued to build on our leadership position. Frost & Sullivan, one of the leading international industry
consultancies, says "HipCricket has taken an early lead in the US mobile marketing space."
As planned, we expanded our unmatched share of mobile marketing business with broadcast stations. We added 138 stations in the first
half of the year, extending our reach to more than 300 stations and to more than 40 of the top 50 US markets including New York, Los
Angeles, Chicago, Miami and Dallas. HipCricket has since added one of the major US companies to its stable of blue-chip broadcast groups.
In April, we launched America's first comprehensive Hispanic Mobile Marketing Network. The network consists of a family of more than 90
Hispanic media properties that brand managers and agencies can leverage with a single buy for targeted, interactive mobile campaigns to
Hispanic consumers in leading US markets that include Los Angeles, Miami, Chicago and New York. HipCricket's Hispanic reach extends to 14 of
the top 15 Hispanic markets and to more than nine million listeners and viewers. HipCricket is positioning this network to help its clients
take advantage of consumer purchasing by US Hispanics which is projected to be $1.2 trillion by 2010, according to the University of Georgia
(Selig School).
Additionally, the Company's Brand unit grew significantly:
* HipCricket won business from Macy's, one of the nation's premier retailers
* Nestle reengaged HipCricket for mobile marketing programs
* Jameson's hired HipCricket to create and execute a successful campaign around St. Patrick's Day
* Wiley Publishing, which produces the popular "For Dummies" series of books, worked with HipCricket on an integrated campaign that
drove impressive results
To date in 2008, HipCricket has received the following awards for excellence, innovation and growth:
* Frost & Sullivan's 2008 Market Penetration Leadership Award
* The second consecutive pioneering honour from CTIA - The Wireless Association, and NeuStar for innovation in mobile marketing and
for leading the industry with more than 350 common short codes
* An Eastside Business Award from the Bellevue (Washington) Chamber of Commerce; Bellevue was recently named the number one place to
live and launch a business by Fortune magazine
* A Summit Marketing Effectiveness Award for the Company's efforts in assisting Wiley Publishing with realizing its mobile marketing
objectives
Also, during 2008, HipCricket has continued to enhance its senior management team with the hires of:
* Greg York (Vice President of Engineering): Greg is a former vice president of engineering at VoiceBox, a leader in voice-led
mobile search; he led the technology efforts for GiftCertificates and Ontain where he created solutions for companies including Boston
Market, Starbucks and Subway;
* Dennis McCormick (Vice President of Sales & Client Development); Dennis has an impressive track record of revenue growth for radio
and television affiliates over the last three decades; extensive agency experience with leading brands, managing accounts including
McDonalds, Pepsi and 7-Up; and
* David Jones (General Manager, Hispanic Mobile Marketing Network): David is a former CEO and founder of full-service multi-media
company serving the US Hispanic community; extensive Hispanic experience with leading brands, including Volvo Cars of North America,
Southwest Airlines, Colgate Palmolive, L'Oreal, American Express, Nissan, All State, General Motors, Exxon, Mobil, and Wal-Mart.
Additionally, HipCricket has introduced more broadcast experience to its Board with the appointment of Kraig Kitchin as a Non-Executive
Director. As one of radio's most influential and accomplished figures in the US, Kraig Kitchin previously served as president and COO of
Premiere Radio Networks, the number one radio network in the US, for 20 years until he left to found an entertainment industry consulting
firm earlier this year. Radio Ink magazine named him one of the most powerful men in radio in 1999, and he remained on that prestigious
list through 2007.
Summary
We have made significant progress in 2008 in building our footprint of broadcast stations and leading brands despite the very difficult
economic environment which has led to lower spending in mobile than forecast. This is resulting in the creation of a very strong foundation
for the accelerated spending in mobile.
HipCricket's reach is now over 20 million listeners and viewers. The effort that we have made to acquire station count has paid off and
the sign up of broadcast stations has been in line with expectations. We anticipate that our penetration into the Hispanic sector will
generate revenue toward the end of the year, after the preparatory work to incorporate this network is completed.
The Company is anticipating further investment to build and expand its network strategy. This will give HipCricket the ability to create
valuable and scalable databases which can be monetized via mobile marketing and remarketing.
Investment in our business model and focusing on the fundamental asset building strategy which are required to underpin the success of
HipCricket going forward, combined with delays in the approvals by mobile operators of the short codes we require (a factor which is beyond
our control), may have a short term impact on the timing of revenue generation; however the business we are building has allowed us to
establish ourselves as the market leader in this exciting and growing sector.
We are confident that we have built great shareholder value with more to come as these various programs gain market recognition and
revenue.
Ivan Braiker
Chief Executive Officer
HipCricket, Inc. 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 recognised 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 24,000 mobile marketing campaigns.
Amounts in USD
Statement of Operations
(unaudited) (audited)
6 Months 6 Months
ended ended
30 June 2008 30 June 2007
US$ US$
REVENUES $ 1,891,437 $ 855,294
COST OF REVENUES 1,133,500 347,013
GROSS PROFIT 757,937 508,281
OPERATING EXPENSES
Research and development 489,108 80,898
Sales and marketing 2,755,545 1,170,518
General and administrative 2,474,085 1,093,254
Depreciation 38,126 13,352
Total operating expenses 5,756,864 2,358,022
Loss from operations (4,998,927) (1,849,741)
OTHER INCOME (EXPENSE)
Interest expense (1,838) (17,988)
Interest income and other, net 265,847 42,433
Warrant fair value adjustment - (567,133)
264,010 (542,688)
NET LOSS $ (4,734,917) $ (2,392,429)
Balance Sheet
(unaudited) (audited)
As of As of
30 June 2008 31 December 2008
US$ US$
CURRENT ASSETS
Cash and cash equivalents $ 12,808,074 $ 17,621,369
Accounts receivable, net 528,401 350,237
Prepaid expenses and other current assets 635,264 447,443
Total current assets 13,971,740 18,419,049
PROPERTY AND EQUIPMENT, net 236,851 189,937
OTHER ASSETS 82,119 63,565
14,290,710 18,672,551
CURRENT LIABILITIES
Accounts payable 268,187 420,308
Accrued expenses 592,491 520,340
Current portion capital lease obligation 8,566 8,189
Deferred revenue 141,426 139,287
Total current liabilities 1,010,669 1,088,124
LONG TERM LIABILITIES
Capital lease obligations, net of current portion 31,221 35,599
STOCKHOLDERS' EQUITY
Common stock 287,292 287,292
Paid in capital 27,215,231 26,780,322
Accumulated deficit (14,253,703) (9,518,786)
Total stockholders' equity 13,248,820 17,548,828
$ 14,290,710 $ 18,672,551
STATEMENT OF CASH FLOWS
(unaudited) (audited)
6 Months 6 Months
ended ended
30 June 2008 30 June 2007
US$ US$
Cash Flows from Operating Activities
Net loss $ (4,734,917) $ (2,392,428)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation 38,126 13,352
Issuance of preferred stock for services - 559,900
Stock based compensation 434,909 85,544
Warrant fair value adjustment - 567,133
Loss on disposal of assets 540 -
Changes in assets and liabilities
Accounts receivable, net (178,164) (2,452)
Prepaid expenses and other assets (206,375) (218,980)
Deferred financing costs - (55,953)
Accounts payable (152,121) 59,715
Accrued liabilities 72,151 82,005
Deferred revenue 2,138 71,396
(4,723,713) (1,230,768)
Cash Flows from Investing Activities
Purchases of property and equipment (85,580) (58,373)
Payments on capital lease obligations (4,002) (571)
(89,582) (58,944)
Cash Flows from Financing Activities
Payments on notes payable - (300,000)
Proceeds from warrant exercise - 326,350
Proceeds from issuance of preferred stock, net - 6,930,032
- 6,956,382
Net Change in Cash and Equivalents (4,813,295) 5,666,670
Cash and Cash Equivalents, beginning of year 17,621,369 408,789
Cash and Cash Equivalents, end of year $ 12,808,074 $ 6,075,459
Notes to the Interim Financial Statements for the six months ended 30 June 2008
1. Basis of Presentation
The interim results have been prepared on the basis of accounting principles generally accepted in the United States of America (US
GAAP).
The accounting policies applied in preparing the interim financial statements are consistent with those set out in the statutory
accounts for the year ended 31 December 2007.
The financial information for the six months to 30 June 2008 has not been audited.
2. Stockholders' Equity
For the six month period ended 30 June 2008, there were no equity transactions except for stock compensation expense.
3. Related Parties
During the six months ended 30 June 2008, there were no reportable related party transactions.
4. Subsequent Events
Subsequent to 30 June 2008 through the date of this report, there have been no events or activities, not previously disclosed, for which
disclosure is required.
This information is provided by RNS
The company news service from the London Stock Exchange
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