Sign Up For Email Alerts
Be the first to receive company news
Current Investor Presentation
Conference Call:
On
The call will also be webcast live from https://edge.media-server.com/m6/p/hmbnnrhw. Following completion of the call, a recorded replay of the webcast will be available on the www.netelement.com/en/ir website.
2017 Full Year Results:
- Total transactions dollars processed globally in 2017 exceeded
$2.8 billion , an increase of 14% compared to$2.45 billion in 2016 - Total transactions dollars processed geographically in
North America in 2017 were$2.3 billion , an increase of 18% compared to$1.9 billion in 2016 - Total transactions dollars processed in international markets in 2017 were
$530 million , no change as compared to$530 million in 2016 - Total transactions processed for 2017 exceeded 154 million compared to 187 million in 2016, a decline of 21% during 2017 due to reorganization and consolidation of the mobile solutions business, as well as an increased average transaction size at the point of sale in
the United States during 2017 - Revenues increased to
$60.1 million , an increase of 11% compared to$54.3 million in 2016
- North American Transaction Solutions segment: Continued organic growth
of small and medium-sized business ("SMB") merchants with emphasis on value-added offerings. Revenues for this segment were
$51.1 million , an increase of 21% over the prior year - International Transaction Solutions segment: As a result of the consolidation of Online Solutions and Mobile Solutions segments during 2017, revenues for the International Transaction Solutions segment were
$8.9 million , a decrease of 27% over the prior year
"We are very pleased with our 2017 progress and the strong balance sheet position as of
2017 Significant Achievements:
- Received a
$7.55 million institutional investment to support continued organic growth and blockchain-focused developments - Ensured continued compliance with NASDAQ listing requirements
- Ranked as one of the fastest growing companies in
North America on Deloitte's 2017 Technology Fast 500™ - Supported Florida SMB merchants affected by Hurricane Irma with free mobile point-of-sale credit card readers
Recent Partnerships:
- Joined the Enterprise Ethereum Alliance ("EEA"), the world's largest open-source blockchain initiative with over 250-member companies. Membership to the alliance is complementary to the Company's recently announced decentralized blockchain technology solution, Netevia, that will enable a vast number of value-added services ("VAS") and support the adoption of Ethereum in the enterprise
- Partnered with Elo to provide a modern best-in-class point of sale solution. Combined Aptito POS software with Elo's all-in-one touchscreen device delivering stylish and reliable POS solution
- Partnered with Payvision in Europe, extended access to global currencies. Expanded payment acceptance to 120+ currencies globally
- Partnered with Planet Payment for multi-currency pricing solution in the
United States . Introduced multi-currency payment acceptance to online merchants inthe United States
Recent Product Launches and Updates:
-
Launched multi-channel payments platform, Netevia. Connecting and simplifying payments across sales channels through a single integration point, Netevia delivers end-to-end payment processing through easy-to-use APIs. This model complements
Net Element's ability to perform in a multi-channel environment, including POS, e-commerce, mobile devices and will enable the company to perform in blockchain technology solutions when fully developed - Launched web-based, integrated same-day ACH and eCheck payment processing solution in the
United States - Launched Zero-Fee processing program for SMB merchants in the
United States - Launched loyalty program for international online merchants utilizing a PayOnline platform
- Launched PayOnline's support for electronic commerce in the
United States - Launched Apple Pay support in Russia
- Launched payment acceptance module for Telegram, Viber, Facebook and VK instant messenger apps
- Expanded payments module to include Prominent InSales platform. InSales platform provides access to over 4,000 merchants
- Launched comprehensive point-of-sale program during Unified Payments' "2017 Launch Series" at Northeast Acquirers Association event
- Launched ISO incubator program for certified resellers of Unified Payments to help them grow their business, compete and achieve success in today's evolving marketplace
- Launched fully integrated payment acceptance for V-Tell, international mobile network operator
- Launched fully integrated payment acceptance for Azimuth Airlines
- Added support for iDEAL payment system, the most popular payment system in Netherlands
Outlook
Our strategy is to ensure that our business remains successful in a rapidly changing market, creating sustainable value for all our stakeholders, including our clients, distribution partners and shareholders. We aim to achieve superior results for our clients by having a deep understanding of their payment acceptance needs, extensive market reach, strong product development and technology enablement.
Planned for 2018:
We will continue to focus on understanding our clients and addressing their payment acceptance needs in core market segments.
- Continue growth in all key segments
- Drive client retention
- Expand our client base in selected markets
- Deliver value-added products to our clients to increase efficiencies and payment acceptance
- Continue to develop Netvia, our next generation payments platform, enabling intelligent routing of payments for the application development community
- Launch new tools to reach our clients, such as digital channels, and deepening partner relations
The global payments industry continued to deliver healthy growth during 2017, with underlying transaction volumes demonstrating even greater strength. We believe that new and disruptive technologies will provide us the opportunity to differentiate ourselves from our competition and continue developing and delivering innovative payment solutions in 2018 and beyond.
- Continue to scale and enhance new product launches that will add value to our clients
- Extend our capabilities in next-generation POS hardware and software, and deepening our partner proposition
- Commence trials of advanced technologies around business intelligence and mobile based payments acceptance
- Target further developments in blockchain technologies, payments enablement for Internet of Things and biometrics payment acceptance
- Continue investment in future emerging payment technologies
Realize the full potential of our business model
- Deliver stronger organic growth
- Develop additional payment network relationships to integrate with our technologies
- Seek acquisition or investment opportunities to deepen our technological and distribution capabilities
Results of Operations for the Year Ended
We reported a net loss attributable to
Eliminating the effects of non-cash compensation and the 2016 PayOnline stock value guarantee payment, we reported an adjusted non-GAAP, net loss attributable to
The following table sets forth our sources of revenues, cost of revenues and gross margins for the years ended
| Gross Margin Analysis | ||||||||||||||||||
| Twelve | Twelve | |||||||||||||||||
| Months Ended | Months Ended | Increase / | ||||||||||||||||
| Source of Revenues | Mix | Mix | (Decrease) | |||||||||||||||
| North American Transaction Solutions | $ | 51,138,327 | 85.1 | % | $ | 42,130,902 | 77.6 | % | $ | 9,007,425 | ||||||||
| International Transaction Solutions | 8,926,497 | 14.9 | % | 12,155,957 | 22.4 | % | (3,229,460 | ) | ||||||||||
| Total | $ | 60,064,824 | 100.0 | % | $ | 54,286,859 | 100.0 | % | $ | 5,777,965 |
| Twelve | Twelve | |||||||||||||||||
| Months Ended | % of | Months Ended | % of | Increase | ||||||||||||||
| Cost of Revenues | revenues | revenues | (Decrease) | |||||||||||||||
| North American Transaction Solutions | $ | 44,265,264 | 86.6 | % | $ | 36,342,465 | 86.3 | % | $ | 7,922,799 | ||||||||
| International Transaction Solutions | 6,971,948 | 78.1 | % | 9,365,776 | 77.0 | % | (2,393,828 | ) | ||||||||||
| Total | $ | 51,237,212 | 85.3 | % | $ | 45,708,241 | 84.2 | % | $ | 5,528,971 | ||||||||
| Twelve | Twelve | |||||||||||||||||
| Months Ended | % of | Months Ended | % of | Increase | ||||||||||||||
| Gross Margin | revenues | revenues | (Decrease) | |||||||||||||||
| North American Transaction Solutions | $ | 6,873,063 | 13.4 | % | $ | 5,788,437 | 13.7 | % | $ | 1,084,626 | ||||||||
| International Transaction Solutions | 1,954,549 | 21.9 | % | 2,790,181 | 23.0 | % | (835,632 | ) | ||||||||||
| Total | $ | 8,827,612 | 14.7 | % | $ | 8,578,618 | 15.8 | % | $ | 248,994 | ||||||||
Net revenues consist primarily of service fees from transaction processing. Net revenues were
Cost of revenues represents direct costs of generating revenues, including commissions, mobile operator fees, purchases of short numbers, interchange expense and processing fees. Cost of revenues for the year ended
Gross Margin for the year ended
Total operating expenses were
General and administrative expenses for the years ended
| Twelve months ended | ||||||||||||||||
| Category | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | ||||||||||||
| Salaries, benefits, taxes and contractor payments | $ | 1,970,860 | $ | 1,696,245 | $ | 2,082,294 | $ | 5,749,399 | ||||||||
| Professional fees | 505,383 | 819,184 | 1,312,271 | 2,636,838 | ||||||||||||
| Rent | - | 245,539 | 245,186 | 490,725 | ||||||||||||
| Business development | 53,011 | 32,072 | 3,569 | 88,652 | ||||||||||||
| Travel expense | 331,299 | 32,397 | 130,198 | 493,894 | ||||||||||||
| Filing fees | - | - | 72,035 | 72,035 | ||||||||||||
| Transaction (gains) losses | 742 | (41,200 | ) | 1,642 | (38,816 | ) | ||||||||||
| Office expenses | 303,586 | 98,961 | 120,103 | 522,650 | ||||||||||||
| Communications expenses | 47,878 | 130,046 | 79,288 | 257,212 | ||||||||||||
| Insurance expense | - | 5,401 | 135,386 | 140,787 | ||||||||||||
| Other expenses | 38,788 | 14,716 | 162,893 | 216,397 | ||||||||||||
| Total | $ | 3,251,547 | $ | 3,033,361 | $ | 4,344,865 | $ | 10,629,773 |
| Twelve months ended | ||||||||||||||||
| Category | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | ||||||||||||
| Salaries, benefits, taxes and contractor payments | $ | 1,650,043 | $ | 1,593,390 | $ | 1,506,752 | $ | 4,750,185 | ||||||||
| Professional fees | 422,681 | 901,861 | 1,390,297 | 2,714,839 | ||||||||||||
| Rent | - | 282,099 | 284,234 | 566,333 | ||||||||||||
| Business development | 36,923 | 129,525 | 11,841 | 178,289 | ||||||||||||
| Travel expense | 191,848 | 43,436 | 111,510 | 346,794 | ||||||||||||
| Filing fees | - | - | 82,560 | 82,560 | ||||||||||||
| Transaction (gains) losses | 49 | (327,122 | ) | (413,470 | ) | (740,543 | ) | |||||||||
| Office expenses | 103,616 | 110,897 | 107,237 | 321,750 | ||||||||||||
| Communications expenses | 77,897 | 93,152 | 73,104 | 244,153 | ||||||||||||
| Insurance expense | - | 9,855 | 163,506 | 173,361 | ||||||||||||
| Other expenses | 270 | (68,976 | ) | 228,868 | 160,162 | |||||||||||
| Total | $ | 2,483,327 | $ | 2,768,117 | $ | 3,546,439 | $ | 8,797,883 |
| Variance | ||||||||||||||||
| Category | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | ||||||||||||
| Salaries, benefits, taxes and contractor payments | $ | 320,817 | $ | 102,855 | $ | 575,542 | $ | 999,214 | ||||||||
| Professional fees | 82,702 | (82,677 | ) | (78,026 | ) | (78,001 | ) | |||||||||
| Rent | - | (36,560 | ) | (39,048 | ) | (75,608 | ) | |||||||||
| Business development | 16,088 | (97,453 | ) | (8,272 | ) | (89,637 | ) | |||||||||
| Travel expense | 139,451 | (11,039 | ) | 18,688 | 147,100 | |||||||||||
| Filing fees | - | - | (10,525 | ) | (10,525 | ) | ||||||||||
| Transaction (gains) losses | 693 | 285,922 | 415,112 | 701,727 | ||||||||||||
| Office expenses | 199,970 | (11,936 | ) | 12,866 | 200,900 | |||||||||||
| Communications expenses | (30,019 | ) | 36,894 | 6,184 | 13,059 | |||||||||||
| Insurance expense | - | (4,454 | ) | (28,120 | ) | (32,574 | ) | |||||||||
| Other expenses | 38,518 | 83,692 | (65,975 | ) | 56,235 | |||||||||||
| Total | $ | 768,220 | $ | 265,244 | $ | 798,426 | $ | 1,831,890 | ||||||||
Salaries, benefits, taxes and contractor payments were
Professional fees were
| Twelve months ended | ||||||||||||||||
| Professional Fees | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | ||||||||||||
| General Legal | $ | 33,480 | $ | 38,386 | $ | 80,724 | $ | 152,590 | ||||||||
| SEC Compliance Legal Fees | - | - | 275,112 | 275,112 | ||||||||||||
| Accounting and Auditing | - | 15,433 | 412,943 | 428,376 | ||||||||||||
| Tax Compliance and Planning | - | - | 55,400 | 55,400 | ||||||||||||
| Consulting | 471,903 | 765,365 | 488,092 | 1,725,360 | ||||||||||||
| Total | $ | 505,383 | $ | 819,184 | $ | 1,312,271 | $ | 2,636,838 |
| Twelve months ended | ||||||||||||||||
| Professional Fees | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | ||||||||||||
| General Legal | $ | 43,257 | $ | 5,539 | $ | 193,952 | $ | 242,748 | ||||||||
| SEC Compliance Legal Fees | - | - | 175,000 | 175,000 | ||||||||||||
| Accounting and Auditing | - | 578 | 420,686 | 421,264 | ||||||||||||
| Tax Compliance and Planning | - | - | 44,200 | 44,200 | ||||||||||||
| Consulting | 379,424 | 895,744 | 556,459 | 1,831,627 | ||||||||||||
| Total | $ | 422,681 | $ | 901,861 | $ | 1,390,297 | $ | 2,714,839 |
| Variance | ||||||||||||||||
| Professional Fees | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | ||||||||||||
| General Legal | $ | (9,777 | ) | $ | 32,847 | $ | (113,228 | ) | $ | (90,158 | ) | |||||
| SEC Compliance Legal Fees | - | - | 100,112 | 100,112 | ||||||||||||
| Accounting and Auditing | - | 14,855 | (7,743 | ) | 7,112 | |||||||||||
| Tax Compliance and Planning | - | - | 11,200 | 11,200 | ||||||||||||
| Consulting | 92,479 | (130,379 | ) | (68,367 | ) | (106,267 | ) | |||||||||
| Total | $ | 82,702 | $ | (82,677 | ) | $ | (78,026 | ) | $ | (78,001 | ) | |||||
Professional fees decreased by
Transaction gains and losses represent changes in exchange rates between our
functional currency and the foreign currency in which the transaction is denominated. During the years ended
Other general and administrative expenses were
Non-cash compensation expense was
| 2017 Non-Cash Compensation Activity | ||||||||||||
| $ Amount | # of Shares Issued | # of Options Issued | ||||||||||
| Board of Directors & Employee stock and Options | $ | 2,827,200 | 242,324 | 45,106 | ||||||||
| Stock issued for consulting | 7,258 | 896 | - | |||||||||
| Stock issued for acquisitions | 105,966 | 13,082 | - | |||||||||
| Total for 2017 | $ | 2,940,424 | 256,302 | 45,106 |
| 2016 Non-Cash Compensation Activity | ||||||||||||
| $ Amount | # of Shares Issued | # of Options Issued | ||||||||||
| Board of Directors & Employee stock and Options | $ | 3,184,608 | 1,166,610 | 182,408 | ||||||||
| Stock issued for consulting | 78,827 | - | 466,428 | |||||||||
| Stock issued for acquisitions | 200,000 | 95,694 | - | |||||||||
| Total for 2017 | $ | 3,463,435 | 1,262,304 | 648,836 | ||||||||
We recorded a provision for bad debt in the amount of
During the years ended
Depreciation and amortization expense consists primarily of the amortization of merchant portfolios plus depreciation expense on fixed assets, client acquisition costs, capitalized software expenses, trademarks, domain names and employee non-compete agreements. Depreciation and amortization expense was
Interest expense was
| Funding Source | Twelve Months Ended | Twelve Months Ended | Increase / (Decrease) | |||||||||
| MBF Notes | $ | 76,591 | 61,325 | 15,266 | ||||||||
| RBL Notes | 772,777 | 1,282,439 | (509,662 | ) | ||||||||
| Priority Payments Notes | 168,233 | - | 168,233 | |||||||||
| Other | 172,021 | 120,069 | 51,952 | |||||||||
| Total | $ | 1,189,622 | 1,463,833 | (274,211 | ) | |||||||
Other interest expense for the year ended
Other expenses for the year ended
The net income attributable to non-controlling interests amounted to
Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure
To supplement its consolidated financial statements presented in accordance with
This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the
| GAAP | Share-based Compensation | Loss from Stock Value Guarantee | Adjusted Non-GAAP | |||||||
| Twelve Months Ended | ||||||||||
| Net (loss) income attributable to | $ | (9,913,485 | ) | $ | 2,940,424 | $ | - | $ | (6,973,061 | ) |
| Basic and diluted earnings per share | $ | (5.04 | ) | $ | 1.49 | $ | - | $ | (3.54 | ) |
| Basic and diluted shares used in computing earnings per share | 1,967,676 | 1,967,676 | ||||||||
| GAAP | Share-based Compensation | Loss from Stock Value Guarantee |
Adjusted Non-GAAP | |||||||
| Twelve Months Ended | ||||||||||
| Net (loss) income attributable to | $ | (13,487,537 | ) | $ | 3,463,435 | $ | 2,162,861 | $ | (7,861,241 | ) |
| Basic and diluted earnings per share | $ | (10.33 | ) | $ | 2.65 | $ | 1.66 | $ | (6.02 | ) |
| Basic and diluted shares used in computing earnings per share | 1,305,801 | 1,305,801 | ||||||||
Additional information regarding Net Element's results for its year ended
About
Forward-Looking Statements
Securities Exchange Act of 1934, as amended. Any statements contained in this press release that are not statements of historical fact may be deemed forward-looking statements. Words such as "continue," "will," "may," "could," "should," "expect," "expected," "plans," "intend," "anticipate," "believe," "estimate," "predict," "potential," and similar expressions are intended to identify such forward-looking statements. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking
statements, many of which are generally outside the control of
CONSOLIDATED BALANCE SHEETS | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 11,285,669 | $ | 621,635 | ||||
| Accounts receivable, net | 5,472,856 | 7,126,429 | ||||||
| Prepaid expenses and other assets | 2,282,614 | 1,467,897 | ||||||
| Total current assets, net | 19,041,139 | 9,215,961 | ||||||
| Fixed assets, net | 58,268 | 117,295 | ||||||
| Intangible assets, net | 3,127,760 | 3,589,850 | ||||||
| 9,643,752 | 9,643,752 | |||||||
| Other long term assets | 460,511 | 603,209 | ||||||
| Total assets | $ | 32,331,430 | $ | 23,170,067 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 6,785,459 | $ | 7,510,113 | ||||
| Accrued expenses | 3,674,430 | 5,518,823 | ||||||
| Deferred revenue | 1,712,591 | 1,355,972 | ||||||
| Notes payable (current portion) | 2,493,973 | 808,976 | ||||||
| Due to related parties | - | 299,004 | ||||||
| Total current liabilities | 14,666,453 | 15,492,888 | ||||||
| Notes payable (net of current portion) | 4,521,449 | 3,615,782 | ||||||
| Total liabilities | 19,187,902 | 19,108,670 | ||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Series A Convertible Preferred stock ( | - | - | ||||||
| Common
stock ( | 385 | 154 | ||||||
| Additional paid in capital | 183,119,222 | 163,920,066 | ||||||
| Accumulated other comprehensive loss | (2,530,238 | ) | (2,486,616 | ) | ||||
| Accumulated deficit | (167,356,070 | ) | (157,442,585 | ) | ||||
| Stock subscriptions receivable | (50,585 | ) | - | |||||
| Noncontrolling interest | (39,186 | ) | 70,378 | |||||
| Total stockholders' equity | 13,143,528 | 4,061,397 | ||||||
| Total liabilities and stockholders' equity | $ | 32,331,430 | $ | 23,170,067 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||
| Twelve Months Ended | ||||||||
| 2017 | 2016 | |||||||
| Net revenues | ||||||||
| Service fees | $ | 58,723,928 | $ | 48,784,855 | ||||
| Branded content | 1,340,896 | 5,502,004 | ||||||
| Total Revenues | 60,064,824 | 54,286,859 | ||||||
| Costs and expenses: | ||||||||
| Cost of service fees | 49,934,371 | 40,521,236 | ||||||
| Cost of branded content | 1,302,841 | 5,187,005 | ||||||
| General and administrative | 10,629,773 | 8,797,883 | ||||||
| Non-cash compensation | 2,940,424 | 3,463,435 | ||||||
| Bad debt expense | 1,320,848 | 1,688,237 | ||||||
| Depreciation and amortization | 2,533,985 | 3,466,511 | ||||||
| Total costs and operating expenses | 68,662,242 | 63,124,307 | ||||||
| Loss from operations | (8,597,418 | ) | (8,837,448 | ) | ||||
| Interest expense, net | (1,189,622 | ) | (1,463,833 | ) | ||||
| Loss from stock value guarantee | - | (3,722,142 | ) | |||||
| Other income (expense) | (236,009 | ) | 407,347 | |||||
| Net loss before income taxes | (10,023,049 | ) | (13,616,076 | ) | ||||
| Income taxes | - | - | ||||||
| Net loss | (10,023,049 | ) | (13,616,076 | ) | ||||
| Net loss attributable to the noncontrolling interest | 109,564 | 128,539 | ||||||
| Net loss attributable to | (9,913,485 | ) | (13,487,537 | ) | ||||
| Foreign currency translation | (43,623 | ) | (920,794 | ) | ||||
| Comprehensive loss attributable to common stockholders | $ | (9,957,108 | ) | $ | (14,408,331 | ) | ||
| Loss per share - basic and diluted | $ | (5.04 | ) | $ | (10.33 | ) | ||
| Weighted average number of common shares outstanding - basic and diluted | 1,967,676 | 1,305,801 | ||||||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid in | Stock | Comprehensive | Non-controlling | Accumulated | Equity (Deficiency) | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Subscription | Income | interest | Deficit | in Assets | |||||||||||||||||||||||||||||||
| Balance | - | - | 1,126,376 | $ | 113 | $ | 154,362,707 | $ | (1,565,822 | ) | $ | 198,917 | $ | (143,955,048 | ) | $ | 9,040,867 | |||||||||||||||||||||||
| Share based compensation | - | - | 121,442 | 12 | 4,427,105 | - | - | - | - | 4,427,117 | ||||||||||||||||||||||||||||||
| Shares issued and issuable for acquisitions | - | - | 6,543 | 1 | 134,094 | - | - | 134,095 | ||||||||||||||||||||||||||||||||
| Shares issued for insider financing | - | - | 46,643 | 5 | 988,823 | - | - | - | - | 988,828 | ||||||||||||||||||||||||||||||
| Shares issued in connection with debt restructuring | - | - | 166,340 | 16 | 3,288,820 | - | - | - | - | 3,288,836 | ||||||||||||||||||||||||||||||
| Shares issued under ESOUSA agreement | - | - | 68,006 | 7 | 718,517 | - | - | - | - | 718,524 | ||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | (128,539 | ) | (13,487,537 | ) | (13,616,076 | ) | |||||||||||||||||||||||||||
| Comprehensive loss - foreign currency translation | - | - | - | - | - | - | (920,794 | ) | - | - | (920,794 | ) | ||||||||||||||||||||||||||||
| Balance | - | - | 1,535,350 | $ | 154 | $ | 163,920,066 | $ | - | $ | (2,486,616 | ) | $ | 70,378 | $ | (157,442,585 | ) | $ | 4,061,397 | |||||||||||||||||||||
| Shares issued in connection with reverse stock split | - | - | 3,117 | 0 | 1 | - | - | - | - | 1 | ||||||||||||||||||||||||||||||
| Share based compensation | - | - | 242,324 | 24 | 2,850,155 | - | - | - | - | 2,850,179 | ||||||||||||||||||||||||||||||
| Shares issued for acquisitions | - | - | 13,082 | 1 | 105,965 | - | - | - | - | 105,966 | ||||||||||||||||||||||||||||||
| Shares issued to settle merchant liabilities | - | - | 30,759 | 3 | 252,220 | - | - | - | - | 252,223 | ||||||||||||||||||||||||||||||
| Shares issued for consulting services | - | - | 19,896 | 2 | 228,416 | (50,585 | ) | - | - | - | 177,833 | |||||||||||||||||||||||||||||
| Shares issued in connection with debt restructuring | - | - | 127,406 | 13 | 758,181 | - | - | - | - | 758,194 | ||||||||||||||||||||||||||||||
| Shares issued under ESOUSA/Cobblestone agreements | - | - | 1,881,165 | 188 | 15,004,217 | - | - | - | - | 15,004,405 | ||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | (109,564 | ) | (9,913,485 | ) | (10,023,049 | ) | |||||||||||||||||||||||||||
| Comprehensive loss - foreign currency translation | - | - | - | - | - | - | (43,622 | ) | - | - | (43,622 | ) | ||||||||||||||||||||||||||||
| Balance | - | - | 3,853,100 | $ | 385 | $ | 183,119,222 | $ | (50,585 | ) | $ | (2,530,238 | ) | $ | (39,186 | ) | $ | (167,356,070 | ) | $ | 13,143,528 | |||||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| Twelve Months Ended
| ||||||||
| 2017 | 2016 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss attributable to | $ | (9,913,485 | ) | $ | (13,487,537 | ) | ||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities | - | |||||||
| Non controlling interest | (109,564 | ) | (128,539 | ) | ||||
| Share based compensation | 2,940,424 | 3,463,435 | ||||||
| Provision for bad debts | - | 500,000 | ||||||
| Amortization of prepaid costs | 967,313 | |||||||
| Depreciation and amortization | 2,533,985 | 3,466,510 | ||||||
| Non cash interest | 114,802 | 852,408 | ||||||
| Changes in assets and liabilities | ||||||||
| Accounts receivable | 3,002,425 | (2,751,144 | ) | |||||
| Deferred revenue | 356,619 | 612,062 | ||||||
| Prepaid expenses and other assets | (1,022,985 | ) | (570,582 | ) | ||||
| Accounts payable and accrued expenses | (2,943,154 | ) | 3,797,753 | |||||
| Net cash used in operating activities | (5,040,933 | ) | (3,278,321 | ) | ||||
| Cash flows from investing activities | ||||||||
| Client acquisition costs | (1,885,098 | ) | (1,319,820 | ) | ||||
| Receipt of excess deposits | 149,826 | |||||||
| Purchase of fixed and other assets | (103,341 | ) | (187,089 | ) | ||||
| Net cash used in investing activities | (1,838,613 | ) | (1,506,909 | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from common stock | 14,884,435 | - | ||||||
| Proceeds from indebtedness | 3,678,824 | 3,170,540 | ||||||
| Cash received for issuance of warrants | 300,000 | |||||||
| Repayment of indebtedness | (998,780 | ) | (71,700 | ) | ||||
| Related party advances | - | 1,027,874 | ||||||
| Net cash provided by financing activities | 17,564,479 | 4,426,714 | ||||||
| Effect of exchange rate changes on cash | (20,899 | ) | (45,596 | ) | ||||
| Net increase (decrease) in cash | 10,664,034 | (404,112 | ) | |||||
| Cash at beginning of period | 621,635 | 1,025,747 | ||||||
| Cash at end of period | $ | 11,285,669 | $ | 621,635 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | 1,074,820 | $ | 611,625 | ||||
| Taxes | $ | 86,942 | $ | 94,718 | ||||
| Share issuance for settlement of unpaid compensation | $ | - | $ | 1,042,509 | ||||
| Shares issued for redemption of indebtedness | $ | 379,874 | $ | 2,499,481 | ||||
| Shares issued in settlement of advances from board member | $ | - | $ | 909,285 | ||||
| Shares issued in settlement of related party debt | $ | 378,253 | $ | - | ||||
Contact:
Media@NetElement.com
+1 (786) 923-0502
Corporate Communications Contact:
NetworkNewsWire (NNW)
www.NetworkNewsWire.com
Editor@NetworkNewsWire.com
+1 (212) 418-1217
News Provided by Acquire Media
