●	Total revenues decreased 28% to $4.0 million for the fourth quarter of 2012 compared to $5.5 million for the comparable period in 2011;

●	Bookings decreased 44% to $3.1 million for the fourth quarter of 2012 compared to $5.6 million for the comparable period in 2011;

●	Deferred revenue decreased 20% to $2.5 million at December 31, 2012 compared to $3.1 million at December 31, 2011;

●	Net loss was $0.3 million, or $0.01 per basic and diluted common share for the fourth quarter of 2012, compared with a net loss of $1.5 million, or $0.04 per basic and diluted common share, for the comparable period in 2011; and

		Three Months Ended												Year Ended
		December 31,												December 31,
GAAP Results		2012				2011				Change				2012				2011				Change
		(Unaudited)
Total revenues		$	3,956,945			$	5,500,829				(28	)%		$	19,246,736			$	19,155,543				0	%
Deferred revenue (at period end)		$	2,524,229			$	3,138,406				(20	)%		$	2,524,229			$	3,138,406				(20	)%
Net loss		$	(303,088	)		$	(1,542,845	)			(80	)%		$	(4,030,641	)		$	(1,593,173	)			153	%
Net cash used in operating activities		$	(1,147,773	)		$	(523,881	)			119	%		$	(3,401,191	)		$	(1,455,542	)			134	%
Non-GAAP Results
Bookings		$	3,114,800			$	5,592,450				(44	)%		$	18,295,893			$	19,981,859				(8	)%
Overall liquidity (at period end)		$	5,462,596			$	8,879,033				(38	)%		$	5,462,596			$	8,879,033				(38	)%

●	SNAP acquired and transitioned to the ‘AYI.com’ domain in January 2013;

●	New subscription sales increased in both January and February 2013 from December 2012;

●	AYI launched new "social" features for AreYouInterested.com that are designed to integrate a user’s interest and social graphs into the online dating experience; and

 

 

 

 

 

 

 

		December 31,				December 31,
		2012				2011
ASSETS
Current assets:
Cash and cash equivalents		$	5,357,596			$	2,397,828
Restricted cash			105,000				-
Credit card holdback receivable			287,293				441,840
Accounts receivable, net of allowances and reserves of $36,129 and $184,964, respectively			320,019				480,190
Accrued interest receivable			-				5,907
Investments			-				6,481,205
Prepaid expense and other current assets			204,824				96,815
Total current assets			6,274,732				9,903,785
Fixed assets and intangible assets, net			548,549				578,463
Notes receivable			165,716				138,803
Security deposits			-				19,520
Total assets		$	6,988,997			$	10,640,571
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	799,183			$	1,027,841
Accrued expenses and other current liabilities			240,049				864,983
Deferred revenue			2,524,229				3,138,406
Total current liabilities			3,563,461				5,031,230
Long term deferred rent			48,340				61,640
Warrant liability			1,616,325				937,000
Commitments
Total liabilities			5,228,126				6,029,870
Stockholders' equity:
Preferred Stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding			-				-
Common Stock, $0.001 par value, 100,000,000 shares authorized, 44,007,826and 38,580,261 shares issued, respectively, and 38,832,826 and 38,580,261 shares outstanding, respectively			38,833				38,580
Additional paid-in capital			9,437,422				8,256,864
Accumulated deficit			(7,715,384	)			(3,684,743	)
Total stockholders' equity			1,760,871				4,610,701
Total liabilities and stockholders' equity		$	6,988,997			$	10,640,571

 

		For the Years Ended
		December 31,
		2012				2011
Revenues:
Subscription revenue		$	18,910,070			$	18,781,368
Advertising revenue			336,666				374,175
Total revenues			19,246,736				19,155,543
Costs and expenses:
Programming, hosting and technology			4,444,550				2,587,822
Compensation			3,625,117				1,976,384
Professional fees			703,125				558,136
Advertising and marketing			9,876,097				14,626,963
General and administrative			3,953,795				3,070,178
Total costs and expenses			22,602,684				22,819,483
Loss from operations			(3,355,948	)			(3,663,940	)
Interest income, net			21,517				28,858
Mark-to-market adjustment on warrant liability			(679,325	)			2,038,000
Other income (expense)			(16,885	)			3,909
Net loss before income taxes:			(4,030,641	)			(1,593,173	)
Provision for income taxes			-				-
Net loss		$	(4,030,641	)		$	(1,593,173	)
Net loss per common share:
Basic and diluted		$	(0.10	)		$	(0.04	)
Weighted average number of common shares used in calculating net loss per common share:
Basic and diluted			38,611,758				37,619,208

		Year Ended
		December 31,
		2012				2011
Cash flows from operating activities:
Net loss		$	(4,030,641	)		$	(1,593,173	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			151,007				51,180
Amortization of investment premium			6,205				8,734
Stock-based compensation expense			1,129,960				438,395
Mark-to-market adjustment on warrant liability			679,325				(2,038,000	)
Loss on disposal of fixed assets			16,885				453
Changes in operating assets and liabilities:
Restricted cash			(105,000	)			-
Credit card holdback receivable			154,547				(202,388	)
Accounts receivable			160,171				(356,177	)
Accrued interest paid			5,907				(5,907	)
Prepaid expense and other current assets			(108,009	)			(22,554	)
Security deposit			19,520				(1,335	)
Accounts payable and accrued expenses and other current liabilities			(843,470	)			960,266
Deferred rent			(23,421	)			102,115
Deferred revenue			(614,177	)			1,200,491
Accrued interest payable - related party			-				2,358
Net cash used in operating activities			(3,401,191	)			(1,455,542	)
Cash flows from investing activities:
Purchase of fixed assets			(137,978	)			(540,591	)
Redemption (purchase) of short-term investments			6,475,000				(6,489,937	)
Repayment of notes receivable issued to employees			11,320				-
Issuance of notes receivable issued to employees and accrued interest			(38,233	)			(138,803	)
Net cash provided by (used in) investing activities			6,310,109				(7,169,331	)
Cash flows from financing activities:
Proceeds from issuance of common stock and warrants			-				7,915,700
Proceeds from exercise of common stock warrants			-				88,125
Proceeds from exercise of stock options			50,850				-
Net cash provided by financing activities			50,850				8,003,825
Net increase (decrease) in cash and cash equivalents			2,959,768				(621,048	)
Cash and cash equivalents at beginning of year			2,397,828				3,018,876
Cash and cash equivalents at end of period		$	5,357,596			$	2,397,828
Supplemental disclosure of cash flow information:
Cash paid for taxes and related interest		$	15,640			$	4,500
Supplemental disclosure of non-cash investing and financing activities:
Conversion of notes and accrued interest to common stock		$	-			$	71,959

 

 

		Three Months Ended								Year Ended
		December 31,								December 31,
		2012				2011				2012				2011
Reconciliation of Subscription Revenue to Bookings
Subscription revenue		$	3,908,361			$	5,279,888			$	18,910,070			$	18,781,368
Change in deferred revenue			(793,561)				312,562				(614,177)				1,200,491
Bookings		$	3,114,800			$	5,592,450			$	18,295,893			$	19,981,859

 

		December 31,				December 31,
		2012				2011
Reconciliation of Cash and Cash Equivalents to Overall Liquidity
Cash and cash equivalents		$	5,357,596			$	2,397,828
Restricted cash			105,000				-
Investments			-				6,481,205
Overall liquidity		$	5,462,596			$	8,879,033

●	Bookings does not reflect that we defer and recognize revenue from subscription fees and micro-transactions over the length of the subscription term;

●	Other companies, including companies in our industry, may calculate bookings and overall liquidity differently or choose not to calculate bookings and overall liquidity at all, which reduces their usefulness as comparative measures; and

●	Overall liquidity does not reflect the Company’s ability to convert restricted cash and investments into cash and cash equivalents.

 

 

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