Press Releases
DAG Media, Inc. Reports Fiscal Year 2006 Consolidated Financial Statements
NEW YORK, -- DAG Media Inc -- Dag Media, Inc. announced today that basic and diluted net loss per common share was $(0.05) in fiscal year 2006 versus net loss per common share of $(0.16) in fiscal year 2005.
Net sales from continuing operations for the year ending on December 31, 2006 were $232,000 versus net sales of $0 for the year ending on December 31, 2005. The increase in net sales is due to $212,000 in sales made through Shopila's market places since Shopila's acquisition on October 11, 2006. $10,000 of the net sales are attributable to subscription revenues at nextyellow.com.
Loss from operations for the year ending on December 31, 2006 was $1,107,000 compared to a loss of $651,000 for the year ended December 31, 2005, an increase of $456,000, or 70.0%. Of this increase $138,000 is due to nextyellow.com web development expenses and $105,000 represents marketing expenses associated with the operation of www.nextyellow.com and www.shopila.com. $173,000 represents an increase in compensation expenses due to the adoption of SFAS 123R effective January 1, 2006.
For the year ended December 31, 2006, consolidated loss from continuing operation was $867,000 or $(0.27) per basic and diluted share (based on 3.178 million shares), compared to a loss of $138,000 or $(0.04) per basic and diluted share (based on 3.118 million shares), in fiscal year 2005. The increase in loss of $729,000 resulted mainly from the increase in operating costs due to the operations of Next Yellow and the acquisition of www.shopila.com in October 11, 2006 and an increase in non-cash compensation expenses relating to the adoption of SFAS 123(R) effective January 1, 2006. The decrease in other income of $286,000 is primarily attributable to realized losses on marketable securities in 2006 compared to realized gains on marketable securities in 2005.
Assaf Ran, Chairman of the board and CEO stated," During 2006 we have accomplished several more steps in our plan to establish a new operation that will be more suitable for a publicly traded company. On April 20, 2006 we sold our Jewish directories business. On June 2006 we launched www.nextyellow.com our patent pending online yellow pages solution technology and on October 11, 2006 we completed the acquisition of www.shopila.com. As we continue to build our new operations we make efforts to curb our expenses and to operate an efficient and lean team."
"We are committed to continue to strive to enhance shareholders value." added Mr. Ran.
We at DAG Media, through our subsidiaries, provide solutions to the online yellow pages industry by providing a local search and lead generation mechanism. We operate an e-commerce web site as well as several other web sites that complement our directories at http://www.nextyellow.com; http://www.shopila.com; http://www.dagmedia.com
This release contains forward-looking statements within the meaning Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the words "believe", "expect", "intend", "estimate" and similar expressions. Those statements appear in a number of places in this release and include statements regarding our intent, belief or current expectations or those of our directors or officers with respect to, among other things, trends affecting our financial conditions and results of operations and our business and growth strategies. These forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those projected, expressed or implied in the forward-looking statements as a result of various factors (such factors are referred to herein as "Cautionary Statements"), including but not limited to the following: (i) the successful integration of new businesses that we have acquired or may acquire; (ii) the successful consummation of the sale of our directories business; (iii) the success of our new business strategy; (iv) our limited operating history; (v) potential fluctuations in our quarterly operating results; (vi) challenges facing us relating to our growth; and (vii) our dependence on a limited number of suppliers. These forward-looking statements speak only as of the date of this release, and we caution potential investors not to place undue reliance on such statements. You should review all of our reports filed with the Securities and Exchange Commission along with this press release. We undertake no obligation to update or revise any forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Cautionary Statements.
DAG MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2006
Assets |
|
Current assets: |
|
Cash and cash equivalents |
$ 3,630,937 |
Marketable securities |
2,267,134 |
Short term investment – insurance annuity contract – at fair value |
1,116,350 |
Total cash and cash equivalents, marketable securities and short term investments |
7,014,421 |
Trade accounts receivable |
6,122 |
Due from purchasers- current portion |
368,104 |
Other current assets |
38,590 |
Total current assets |
7,427,237 |
|
|
Property and equipment, net |
16,483 |
Goodwill and other intangible assets, net |
454, 470 |
Capitalized web development costs, net |
123,359 |
Due from purchasers- non current portion |
97,222 |
Other assets |
142,515 |
Total assets |
$ 8,261,286 |
Liabilities and Shareholders’ Equity
Current liabilities: |
|
Accounts payable and accrued expenses |
$ 228,979 |
Promissory note |
50,000 |
Income taxes payable |
341,681 |
Deferred gain from the sale of Jewish Directories- current portion |
243,057 |
Current liabilities of discontinued operations |
35,000 |
Total current liabilities |
898,717 |
Long term liabilities: |
|
Line of credit |
54,506 |
Deferred tax liability |
67,600 |
Deferred gain from the sale of Jewish Directories- non current portion |
97,222 |
Total Liabilities |
1,118,045 |
Commitments and contingencies (Note 11) |
|
|
|
Minority Interest |
66,724 |
|
|
Shareholders’ equity: |
|
Preferred shares - $.01 par value; 5,000,000 shares authorized; no shares issued |
-- |
Common shares - $.001 par value; 25,000,000 authorized; 3,305,190 issued and 3,236,460 outstanding |
3,305 |
Additional paid-in capital |
9,023,309 |
Treasury stock, at cost- 68,730 shares |
(231,113) |
Accumulated other comprehensive loss |
(127,595) |
Accumulated deficit |
(1,591,389) |
Total shareholders’ equity |
7,076,517 |
Total liabilities and shareholders’ equity |
$8,261,286 |
DAG MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
2006 | 2005 | |
Net Sales |
$ 232,192 |
$ --- |
Cost of goods sold |
189,290 |
--- |
Gross profit |
42,902 |
--- |
Operating costs and expenses: |
|
|
Selling expenses |
21,035 |
--- |
Web development expenses |
137,666 |
--- |
Marketing expenses |
105,101 |
--- |
General and administrative expenses |
885,688 |
651,448 |
Total operating costs and expenses |
1,149,490 |
651,448 |
|
|
|
Loss from operations |
(1,106,588) |
(651,448) |
Interest income |
258,268 |
224,977 |
Realized (loss) gain on marketable securities |
(45,611) |
288,008 |
Other income |
14,232 |
--- |
Total other income |
226,889 |
512,985 |
(Loss) from continuing operations before provision for income taxes and minority interest |
(897,699) |
(138,463) |
Tax benefit |
--- |
--- |
(Loss) from continuing operations before minority interest |
(897,699) |
(138,463) |
|
|
|
Minority interest |
12,776 |
--- |
(Loss) from continuing operations |
(866,923) |
(138,463) |
|
|
|
Discontinued Operations: |
|
|
Gain (loss) on the sale of discontinued operations (net of tax effect of 0 in 2006 and 2005) |
767,939 |
(55,000) |
Loss from discontinued operations |
(75,12) |
(317,590) |
(Loss) income from discontinued operations |
692,810 |
(372,590) |
Net (loss) |
$ (174,113) |
$ (511,053) |
Basic and diluted net income (loss) per common share outstanding |
|
|
Continuing operations |
$(0.27) |
$(0.04) |
Discontinued operations |
$0.22 |
$(0.12) |
Net (loss) per common share |
$(0.05) |
$(0.16) |
|
|
|
Weighted average number of common shares outstanding Outstanding |
|
|
- Basic and diluted |
3,177,765 |
3,118,381 |
DAG MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
Common Stocks |
Additional Paid-in Capital |
Treasury Shares | Stock Subscription Receivable | Deferred Compensation | Accumulated other comprehensive income (loss) | Retained Earning (Accumulated Deficit) | Totals | |||
Shares | Amount | Shares | Cost | |||||||
Balance, Decembe31 2004 |
3,170,190 | $3,170 | $8,497,034 | 68,730 | $(231,113) | --- | $(53,920) | $17,312 | $343,963 | $8,576,446 |
Issuance of common stock from exercise of options | 21,000 | 21 | 34,399 | 34,420 | ||||||
Issuance of common stock to related party for services not yet performed | 20,000 | 20 | 47,380 | (47,400) | --- | |||||
Non cash compensation | 11,361 | 27,079 | 38,440 | |||||||
Dividend declared to be paid at 1/5/2006 ($0.10 per share) | (1,250,186) | (1,250,186) | ||||||||
Unrealized loss on preferred stocks and other marketable securities | (420,824) | (420,824) | ||||||||
Net loss for the year ended December 31, 2005 | (511,053) | (511,053) | ||||||||
Total comprehensive loss | (931,877) | |||||||||
Balance, December 31, 2005 | 3,211,190 | 3,211 | 8,590,174 | 68,730 | (231,113) | (47,400) | (26,841) | (403,512) | (1,417,276) | 6,467,243 |
Issuance of common stock from exercise of options | 4,000 | 4 | 5,516 | 5,520 | ||||||
Services performed for shares issued previous year | 47,400 | 47,400 | ||||||||
Non cash compensation | 183,012 | 11,592 | 194,604 | |||||||
Non cash compensation to related party for service performed | 108,846 | 108,846 | ||||||||
Issuance of common stock to related parties | 40,000 | 40 | 80,560 | 80,600 | ||||||
Issuance of common stock to Guy Mushkat for Shopila acquisition | 50,000 | 50 | 70,450 | 70,500 | ||||||
Options forfeited | (15,249) | 15,249 | --- | |||||||
Unrealized gain on preferred stocks and other marketable securities | 275,917 | 275,917 | ||||||||
Net loss for the year ended December 31, 2006 | (174,113) | (174,113) | ||||||||
Total comprehensive lncome | 101,804 | |||||||||
Balance, December 31, 2006 | 3,305,190 | $3,305 | $9,023,309 | 68,730 | $(231,113) | --- | --- | $(127,595) | $(1,591,389) | $7,076,517 |
DAG MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
2006 | 2005 | |
Cash flows from operating activities: Net (loss) |
$ (174,113) |
$ (511,053) |
Adjustment to reconcile net (loss) income to net cash used in operating activities - |
|
|
Gain on sale of Jewish Directories |
(481,468) |
--- |
Depreciation and amortization |
44,150 |
14,856 |
Non cash compensation expense |
305,848 |
38,439 |
Minority interest |
(12,776) |
--- |
Realized loss (gain) on sale of marketable securities |
45,611 |
(288,008) |
Gain on the sale of fixed assets |
(14,232) |
--- |
Changes in operating assets and liabilities net of effects of disposition - |
|
|
Accounts receivable |
(6,122) |
--- |
Accounts receivable |
(9,638) |
1,483 |
Accounts payable and accrued expenses |
147,206 |
5,811 |
Due from purchasers |
(125,047) |
|
Income taxes payable |
(25,652) |
--- |
Assets and liabilities from discontinued operations |
(146,900) |
62,323 |
Net cash used in operating activities |
(453,133) |
(676,149) |
|
|
|
Cash flows from investing activities: |
|
|
Investment in preferred stocks, other marketable securities and annuity contract |
(2,591,432) |
(14,497,087) |
Proceeds from sale of marketable securities |
2,628,275 |
17,610,799 |
Investment in convertible loan |
(25,000) |
--- |
Acquisition of Shopila |
(107,500 |
--- |
Purchase of fixed assets |
(18,729) |
--- |
Proceeds from sale of fixed assets |
9,213 |
--- |
Capitalized web development costs |
(22,429) |
--- |
Cash received on sale of Jewish Directories, net of expenses |
309,971 |
|
Assets of discontinued operations |
--- |
(6,072) |
Net cash provided by investing activities |
182,369 |
3,107,640 |
Cash flows from financing activities: |
|
|
Proceeds from exercise of options |
5,520 |
34,421 |
Dividends paid |
(314,246) |
(1,803,227) |
Net cash used in financing activities |
(308,726) |
(1,768,806) |
|
|
|
Net (decrease) increase in cash and cash equivalents |
(579,490) |
662,685 |
Cash and cash equivalents, beginning of year |
4,210,427 |
3,547,742 |
|
|
|
Cash and cash equivalents, end of year |
$ 3,630,937 |
$ 4,210,427 |
|
|
|
Supplemental Cash Flow Information: |
|
|
Taxes paid during the year |
$ 25,535 |
$ 176,414 |
Common stock issued to Ocean 7 and in regards to Shopila acquisition |
151,100 |
--- |
Capitalized software acquired through issuance of stock and grant of options |
$ 47,400 |
$ 47,400 |
Acquisition of company : |
|
|
Liabilities assumed |
(140,000 |
|
Goodwill and other intangibles |
465,100 |
|
Deferred tax liability |
(67,600) |
|
Minority interest |
(79,500) |
|
Less – Stock issued |
(70,500) |
|
Net cash paid |
$ 107,500 |
|