SAN FRANCISCO, CALIFORNIA--(Marketwire - Nov. 19, 2012) - This document corrects and replaces the press release that was issued on November 14, 2012 at 4:05 p.m. Eastern time. Bitzio's auditors identified a technical accounting correction in the application of the complex accounting rules for the company's convertible debenture issued in the third quarter of 2012. Therefore, the accounting change decreased the company's total liabilities by $125,000, increased stockholders' equity by $375,000 and increased non-cash interest expense by $250,000 in Q3 2012. The company apologizes for any inconvenience.
The corrected release reads:
Bitzio, Inc. (BTZO), a leading mobile media and app company, reported results for the third quarter ended September 30, 2012.
Q3 2012 Operational Highlights
- Partnered with ROAR, a leading talent management company, to develop mobile apps for the world's most popular entertainment properties and talent, including actors, celebrities, musicians and athletes.
- Secured a licensing partnership with The NFL Players, a subsidiary of the National Football League Players Association (NFLPA), to jointly develop and market a football trivia app for the more than 180 million fans of the NFL.
- Bitzio's in-house software and animation studio advanced the development of "Pigskins Football Player Trivia Game," the first app to be produced from the new NFL Players partnership. The highly engaging app features the NFL's Top 50 players, along with in-app purchase options and social media features that enhance and expand game-play. The app is now set for release in December 2012, downloadable for free from Apple's App Store and the Android Marketplace.
- Strengthened the executive management team with the addition of Peter Henricsson as the company's new president and CEO. Prior to Bitzio, Henricsson was the founder, chairman and CEO of CellPoint, a European leader in location-based technologies for mobile operators. Under Henricsson's leadership, CellPoint listed on the NASDAQ Stock Market and achieved a market cap of $1 billion.
- Completed $598,000 convertible note financing to support the company's growth initiatives. An entity controlled by Henricsson contributed $300,000 to the raise.
- Divested the company's non-core Info-Products division, including the app developer training series, and thereby eliminating $667,000 in liabilities. The divestiture has allowed Bitzio to focus on developing and monetizing mobile apps for the sports and entertainment marketplace.
"During the third quarter of 2012, we greatly improved our operational platform and set course on our new business model designed to tap the tremendous opportunities for mobile apps in the sports and entertainment markets," said Peter Henricsson, president and CEO of Bitzio. "In fact, we achieved several milestones in the quarter, including divesting non-core assets, strengthening our balance sheet and executive team, and forming major strategic partnerships.
"Our new license agreement with The NFL Players demonstrated our ability to secure the media rights of large, existing fan bases, as well as establish a co-marketing and revenue-sharing partnership that requires no up-front fees. We have been working closely with The NFL Players to develop the first app, which is now set to launch next month. Given their marketing support, we are confident the trivia app will be well received and widely downloaded by the millions of NFL fans across the country.
"Our partnership with The NFL Players also serves an ideal showcase of Bitzio's capabilities, and represents a springboard toward greater opportunities across a number of verticals, including other sports communities, entertainment properties and major consumer brands. We are now well positioned to capitalize on the tremendous opportunities in delivering apps to the fan-based communities of some of world's largest sports clubs and entertainment brands. We plan to leverage our deep industry relationships and marketing partnerships to secure new licensing agreements during the coming months, and roll out a number of new and highly-engaging mobile apps."
Q3 2012 Financial Summary
During the third quarter, Bitzio divested non-core assets and operations to focus on developing and monetizing fan-based apps in the sports and entertainment markets. The company generated nominal revenues from it legacy software and mobile applications in the third quarter, totaling $154,000 compared to marginal revenues in the same year-ago quarter.
Operating expenses in the third quarter of 2012 were $1.4 million, a significant improvement from $8.1 million in the same year-ago quarter. The year-over-year improvement was primarily due to a significant decrease in stock-based compensation, as well as a $2.3 million goodwill impairment charge recognized in Q3 2011.
Net loss from continuing operations in the third quarter of 2012 totaled $1.4 million or $(0.02) per share, as compared to a net loss of $8.1 million or $(0.22) per share in the same year-ago quarter.
Q3 2012 net loss included $1.9 million in non-cash items, comprised of $61,000 of amortization and depreciation, $558,000 related to losses on assets, $185,000 of derivative liability gain, $308,000 of amortization of debt discounts and $1.1 million of stock-based compensation. This compares to $2,000 of non-cash items in Q3 2011, which were comprised of $300 of amortization and depreciation and $1,500 of stock-based compensation.
Excluding these non-cash items, net loss before discontinued operations in Q3 2012 was $102,000 compared to $257,000 in the same year-ago period.
About Bitzio, Inc.
Founded in 2011, Bitzio is a leading mobile media and app development company focused on connecting fans of large entertainment and sports properties with the players, celebrities and teams they love. Powering these apps is the Bitzio Engine, which captures valuable user data and drives increased user monetization. What makes Bitzio really different is its approach to capturing users. Most app companies build first and hope the audience will come. Bitzio licenses media rights of sports and entertainment properties with millions of existing fans. Bitzio uses these rights to create mobile apps and web experiences for these existing fan bases. For more information, visit www.bitzio.com. To learn more about Bitzio, connect on Twitter (www.twitter.com/bitzio) and Facebook (www.facebook.com/bitzioinc).
This news release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities laws, including statements relating to expectations the 2012 fiscal year; The terms and phrases "goal," "commitment," "guidance," "expects," "would," "will," "continuing," "drive," "believes," "indicate," "look forward," "grow," "outlook," "forecasts," and similar terms and phrases are intended to identify these forward-looking statements.
Forward-looking statements are based on estimates and assumptions made by Bitzio in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that Bitzio believes are appropriate in the circumstances, including but not limited to general economic conditions, Bitzio's expectations regarding its business, strategy and prospects, and Bitzio's confidence in the cash flow generation of its business. Many factors could cause Bitzio's actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation: risks related to competition; Bitzio's reliance on key personnel; Bitzio's ability to maintain and enhance its brand; and difficulties in forecasting Bitzio's financial results, particularly over longer periods given the rapid technological changes, competition and short product life cycles that characterize the mobile application industry. These risk factors and others relating to Bitzio that may cause actual results to differ are set forth Bitzio's periodic filings with the U.S. Securities and Exchange Commission (copies of which filings may be obtained at www.sedar.com or www.sec.gov). These factors should be considered carefully, and readers should not place undue reliance on Bitzio's forward-looking statements. Bitzio has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|September 30,||December 31,|
|Accounts receivable, net||138,397||92,232|
|Prepaid expenses and other current assets||138,677||337,508|
|Due from related parties||-||228,980|
|Prepaid acquisition costs||-||713,150|
|Total current assets||476,833||1,553,595|
|Property and equipment, net||63,693||-|
|Intangible assets, net||614,050||582,424|
|Total other assets||1,451,790||1,209,558|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accounts payable and accrued expenses||$||432,953||$||253,976|
|Notes payable, related parties||351,870||426,870|
|Convertible notes, net of discount||157,125||70,745|
|TOTAL CURRENT LIABILITIES||1,219,408||829,024|
|Preferred stock, $0.001 par value; 25,000,000 shares authorized; 5,343,120 and -0- shares issued and outstanding, respectively||5,343||-|
|Common stock, $0.001 par value; 250,000,000 shares authorized; 66,538,869 and 50,018,625 shares issued and outstanding, respectively||66,539||50,019|
|Stock subscriptions payable||-||186,000|
|Additional paid-in capital||19,521,586||11,800,050|
|Accumulated other comprehensive income||(1,998||)||-|
|Total stockholders' equity||709,215||1,934,129|
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY||$||1,928,623||$||2,763,153|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|For the Three Months Ended||For the Nine Months Ended|
|September 30,||September 30,|
|General and administrative||120,593||4,568,268||418,151||4,591,474|
|Impairment of goodwill||-||2,350,800||3,981,508||2,350,800|
|Total Operating Expenses||1,416,698||8,103,938||7,856,664||8,146,272|
|LOSS FROM OPERATIONS||(1,262,314||)||(8,100,834||)||(7,337,073||)||(8,143,168||)|
|Finance costs and amortization||(320,983||)||(500||)||(478,837||)||(746||)|
|Gain on derivative liability||185,118||-||185,118||-|
|Total Other Expenses||(135,865||)||(500||)||(293,719||)||(746||)|
|LOSS BEFORE INCOME TAXES||(1,398,179||)||(8,101,334||)||(7,630,792||)||(8,143,914||)|
|PROVISION FOR INCOME TAXES||-||-||-||-|
|NET LOSS FROM CONTINUING OPERATIONS||$||(1,398,179||)||$||(8,101,334||)||$||(7,630,792||)||$||(8,143,914||)|
|Loss from discontinued operations||(150,681||)||-||(591,236||)||-|
|Loss on disposal of subsidiary||(558,287||)||-||(558,287||)||-|
|Loss from Discontinued Operations, net of income taxes||(708,968||)||-||(1,149,523||)||-|
|BASIC AND DILUTED LOSS PER SHARE FROM CONTINUING OPERATIONS||$||(0.02||)||$||(0.22||)||$||(0.13||)||$||(0.24||)|
|BASIC AND DILUTED LOSS PER SHARE FROM DISCONTINUED OPERATIONS||$||(0.01||)||$||-||$||(0.02||)||$||-|
|BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING||62,441,151||37,557,473||57,152,841||34,566,071|
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