New York, NY / ACCESSWIRE / November 20, 2014 / SeeThruEquity, a leading New York City based independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced that it has issued a quarterly update on Righstcorp, Inc. (RIHT) for fiscal Q3 2014.
The report is available at: RIHT Quarterly Update Report. SeeThruEquity is an approved equity research contributor on Thomson First Call, CapitalIQ, FactSet, and Zack’s.
Highlights of the quarter are as follows:
- 3Q14 reported revenues were $248,387, up 282% y-o-y driven by growth in ingested copyrights to ~160,000.
- As the company continues to invest in its technology and business expansion, operating expenses came in at $944,974 during 3Q14, up 97% y-o-y. RIHT reported operating loss of $820,781 as compared to loss of $446,279 in 3Q13.
- The company booked a loss on derivative liability of $238,401 and reported a gain on settlement of $169,950.
- The company raised $2.65mn through a private equity financing led by institutional investors.
- During the quarter, RIHT reported a net loss of ($894,241) or ($0.01) per share as compared to net loss of ($518,798) or ($0.01) per share in 3Q13.
In addition, we note the following highlights:
Robust Business Expansion; Copyrights ingested exceeds capacity
During the quarter, the company expanded its copyright representation into the music market and signed agreements with the Bicycle Music Company. Active copyrights ingested into the company’s automated search system increased to around 160,000 as compared to 100,000 in the previous quarter. RIHT closed 130,000 cases of copyright infringements as compared to 75,000 during the second quarter. Management attributed the sequential dip in revenues (as compared to 2Q14) to excess demand on their network bandwidth as the ingested copyrights exceeded the network capacity. The company reported having 30 pending patents across the world.
Continued equity financing to fund business growth
During the quarter, the company raised $2.98 million by issuance of 1,192.8 units to certain accredited investors, with each unit consisting of 10,000 shares of common stock and warrants to purchase 15,000 shares of common stock. The current cash reserves of $2.65 million are in excess of the $2.2 million which management believes will be required to fund business growth over the next 12 months. Moreover, as the business continues to scale at a rapid pace, we expect RIHT will turn operationally profitable during 2015 and expects the need for additional financing to reduce materially.
Maintain Price Target of $0.89
The addressable market for settlement of online P2P copyrights infringement and the scalable business model adopted by RIHT provides a platform for exponential revenue growth. RIHT exhibited strong operational performance in the quarter and has current adequate cash reserves. With expected operational breakeven during 2015, we believe additional financing requirements will decrease substantially, lowering the risk of further equity dilution. Moreover, management estimates current liquidity will be sufficient to support growth for more than 12 months. We maintain our price target of $0.89 per share.
Please review important disclosures on our website at www.seethruequity.com.
About Righstcorp, Inc.
Rightscorp (RIHT) is a leading provider of monetization services for artists and holders of copyrighted Intellectual Property (IP). The Company's patent pending digital loss prevention technology focuses on the infringement of digital content such as music, movies, software, books and games and ensures that owners and creators are rightfully paid for their IP. Rightscorp implements existing laws to solve copyright infringements by collecting payments from illegal file sharing activities via notifications sent through Internet Service Providers (ISPs). The Company's technology identifies copyright infringers, who are offered a reasonable settlement option when compared to the legal liability defined in the Digital Millennium Copyrights Act (DMCA). Based on the fact that 22% of all Internet traffic is used to distribute copyrighted content without permission or compensation to the creators, Rightscorp is pursuing an estimated $2.3 billion opportunity and has monetized major media titles through relationships with industry leaders. http://www.rightscorp.com/
SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. We do not conduct any investment banking or commission based business. We are approved to contribute our research to Thomson Reuters One (First Call), Capital IQ, FactSet, Zacks and distribute our research to our database of opt-in investors. We also contribute our estimates to Thomson Estimates, the leading estimates platform on Wall Street.
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