Cricket Media 2014 Fourth Quarter Results

WASHINGTON, DC, April 28, 2015 /CNW/ - Cricket Media Group Ltd. (TSXV:CKT) ("Cricket Media" or the "Company") an education media company and global social learning network, today released its operating results for the fourth quarter and year ended December 31, 2014.  Results were prepared by management in accordance with International Financial Reporting Standards ("IFRS"). All figures are in U.S. dollars unless otherwise stated.

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Fourth Quarter Highlights

  • Total revenue of $4.2 million
  • New digital product platform launched; 43% of Q4 media subscriptions sold were digital or hybrid (digital plus print)
  • Licensing revenue up 74% over Q4 2013
  • Operating expenses net of impairment down 6% compared to last year
  • 2014 streamlining and cost reductions position for improved 2015 performance

In the fourth quarter, Cricket launched, in partnership with Fingerprint, a custom platform that enables family members and other parent-approved users of Cricket Media's portfolio of digital magazine apps to communicate and collaborate around engaging, educational experiences. Customers increasingly adopted digital products, such as these digital apps and the Company's Storybug app launched in Q3 2014, as the Company increased reach through its network and provided subscribers the ability to access its products via the platform of their choice – IOS, Android, or the web. 43% of new customers selected a digital option in Q4 2014, compared to 30% in Q4 2013.

In conjunction with the growth in the number of digital subscriptions, the Company continues to actively work on increasing user engagement through seeking strong channel partners and expanding the breadth and features of its digital products which are increasingly collaborative.  In December, Cricket announced a partnership with Residence Inn by Marriott to provide hotel guests with Storybug, a collaborative reading app that allows kids and their loved ones to read stories together even if they aren't physically in the same location.

The Company is increasingly monetizing its content through consumer products, apps and content licensing - which grew 74% in the fourth quarter compared to Q4 2013.  More than 50 licensing partners have begun using the Company's content over the last 18 months. During 2014 Cricket Media signed new "umbrella" agreements that allow purchasers to purchase multiple sets of content under a single contract. In addition the Company launched an improved digital asset management system ("DAM') to streamline licensing by allowing clients to more easily search and license from a library of content that has already been cleared from a rights and permissions standpoint.

In 2014 the Company continued to undertake expense control and cost reduction initiatives to reduce non-revenue generating costs. Departmental restructurings and increased product focus have enabled the Company to eliminate a number of senior positions and in general substantially reduce fixed costs. At December 31, 2014 the Company had reduced overall headcount by approximately 25% from Q4 2013 levels. Due to a combination of these efforts, the Company estimates that it has eliminated approximately $2.5 million in annualized costs.

During the fourth quarter, the Company determined its Nexify advertising business and Open Court commerce business no longer fit the Company's overall strategy. As a result, the Company began marketing these businesses for sale with the expectation that these businesses would be sold during 2015. As such, the Company has classified the assets and liabilities associated with these businesses as held for sale and the operations as discontinued operations.

"In our efforts to reposition and focus the Company over the past 12 months we increased resources on the areas of the business expected to generate more near-term growth and revenue. Coinciding with this we identified non-core business segments that are to be sold which we expect to further improve the overall operating model," said Cricket Media CEO, Katya Andresen. "The streamlining of the business in 2014 and the resulting cost reductions during the year have positioned the Company for more efficient execution of its growth strategies going into 2015."

In China, the Company extended its agreement with its China media partner, Neumedias, to add 8 more titles to the current 4 brands of bilingual digital media apps for smartphones and tablets in China. In addition an agreement was recently made whereby Neumedias, a digital publishing company owned by Neusoft Holdings, will act as the Company's agent to engage with print publishers in China for distribution deals for Cricket Media content in both Chinese and English across China.  Neusoft Corp. is Cricket's joint venture partner in China and one of the largest information services and systems companies in the country.

Q4 Financial Review

Total revenue for the three months ended December 31, 2014 and the three months ended December 31, 2013 was $4.2 million. Subscription revenues for the year ended December 31, 2014 decreased $0.1 million, or 5%, compared to the prior year period and commerce revenue decreased by $0.2 million, or 13%, during the three months ended December 31, 2014 compared to the prior year period.  The primary factor in both cases was decreased holiday direct mail catalog sales.  The Company is phasing out the catalog going forward and shifting its focus to a greater emphasis on digital marketing including paid search, email and internet agents, which are less expensive and have been shown to be more efficient and effective in driving sales.  Licensing revenues increased by $0.3 million, or 74%, during the three months ended December 31, 2014 compared to the prior year period primarily due to increased revenues generated from the use of the Company's content in standardized testing.

Operating expenses for the fourth quarter of 2014 were $9.5 million, an increase of $0.2 million, or 2%, compared to the prior year period. Operating expenses for the fourth quarter of 2014 include approximately $0.8 million of impairment losses related to a write down of artistic related intangibles and owned permissions associated with our media business and goodwill associated with a previously acquired Spanish magazine business. Excluding the impairment losses during 2014, operating expenses decreased $0.6 million, or 6%, primarily due to the Company's expense reduction initiatives which included focusing on near term revenue opportunities, streamlining senior management and identifying and leveraging outsourcing opportunities. The decrease was reflected in lower operation and support costs, technology, research and development costs, and stock based compensation, partially offset by increased marketing and promotion costs.

Operating expenses by category for the three months ended December 31, 2014 compared to the prior year period are as follows:








Three months ended

December 31, 

Increase
(Decrease)




Operating Expense Detail


2014


2013



%


(dollars in thousands)










Cost of sales


$    3,019


$    2,823


$         196


7%


Technology, research and development


906


1,143


(237)


-21%


Operations and support


627


1,276


(649)


-51%


General and administrative


1,485


1,291


194


15%


Marketing and promotion expenses


2,427


1,947


480


25%


Stock-based compensation


66


255


(189)


-74%


Depreciation & amortization


243


252


(9)


-4%


Change in estimated fair value of acquisition share
consideration


(45)


279


(324)


-116%


Impairment of goodwill and intangible assets


754


-


754


N/A


Loss on investment in NeuPals


44


83


(39)


-47%


Total operating expenses


$    9,526


$    9,349


$         177


2%


 

Core operating expenses, which include cost of sales, technology, research and development, operations and support, general and administrative and marketing and promotion expenses, were relatively flat in the aggregate during the fourth quarter of 2014 compared to the prior year period due to the following drivers:

  • Operation and support expenses decreased approximately $0.6 million during the fourth quarter of 2014 as a result of reduced expenses relating to employees and consultants primarily related to the de-emphasis of various areas within the business and management implemented cost reduction initiatives to better align the Company's activities and resource allocation with its overall strategy.
  • Technology, research and development decreased approximately $0.2 million during the fourth quarter of 2014 due primarily to a reduction in headcount and lower expenses related to development resulting from the outsourcing of these services.
  • Marketing and promotion expenses increased approximately $0.5 million during the fourth quarter of 2014 due primarily to an increase in distribution costs associated with the Company's current year direct mail catalog, which is being phased out in favor of digital marketing efforts in the future.

Aside from the aforementioned changes in core operating expenses, stock-based compensation decreased approximately $189,000 for the three months ended December 31, 2014 compared to the prior year period due primarily to a reduction in number and fair value of awards vested.

The net loss for the fourth quarter of 2014 was $5.2 million, or ($0.20) per share, compared to a net loss of $5.5 million, or ($0.56) per share for the fourth quarter of 2013. This consists of a loss from continuing operations of $4.8 million, or ($0.19) per share, and a loss from discontinued operations of $0.3 million, or ($0.01) per share, for the fourth quarter of 2014 compared to a loss from continuing operations of $5.6 million, or ($0.56) per share, and nominal income from discontinued operations of $24,000 for the fourth quarter of 2013. Discontinued operations consists of operating results associated with the Company's Nexify advertising business and Open Court Publishing business. The increase in the loss from discontinued operations during 2014 compared to 2013 is primarily due to an impairment charge of approximately $0.2 million related to Nexify technology intangibles, declines in our advertising business resulting from the removal of our widget from major publications and a decrease in income generated from the sale of books through Open Court. Decreased interest expense and increased foreign currency exchange gains in 2014 contributed to the overall reduction of the net loss.

2014 Financial Review

For the year ended December 31, 2014, total revenue was $14.6 million, essentially flat year-over-year. Subscription revenues for the year ended December 31, 2014 decreased $0.1 million, or 1%, compared to the prior year and commerce revenue decreased by approximately $0.2 million, or 10%, during the year ended December 31, 2014 compared to the prior year. The primary factor in both cases was decreased holiday direct mail catalog sales.  The Company is phasing out the catalog going forward and shifting its focus to a greater emphasis on digital marketing including paid search, email and internet agents, which are less expensive and have been shown to be more efficient and effective in driving sales. Licensing revenue increased $0.1 million, or 6% compared to the prior year driven by increased revenues generated from the use of the Company's content in standardized testing, and partially offset by a decline in legacy enterprise licensing revenue as a result of a shift in strategy. 

Operating expenses for the year ended December 31, 2014 were $35.0 million, a decrease of $2.4 million, or 7%, from the prior year. Operating expenses for 2014 include approximately $3.7 million of impairment losses related to the "ePals" brand name, goodwill associated with our legacy platform business, a write down of artistic related intangibles and owned permissions related to our media business and goodwill associated with a previously acquired Spanish magazine business. Excluding the impairment losses during 2014, operating expenses decreased $6.2 million, or 16%, as a result of the Company's expense reduction initiatives. The decrease was reflected in lower operation and support costs, marketing and promotion expenses, stock based compensation and technology, research and development costs.

Operating expenses by category for the year ended December 31, 2014 compared to the prior year are as follows:








Year ended December 31, 

Increase
(Decrease)




Operating Expense Detail


2014


2013



%


(dollars in thousands)










Cost of sales


$    9,230


$    9,353


$        (123)


-1%


Technology, research and development


4,347


5,350


(1,003)


-19%


Operations and support


3,001


4,903


(1,902)


-39%


General and administrative


6,282


6,253


29


0%


Marketing and promotion expenses


7,000


8,443


(1,443)


-17%


Stock-based compensation


357


1,491


(1,134)


-76%


Depreciation & amortization


968


1,008


(40)


-4%


Change in estimated fair value of acquisition share
consideration


(181)


279


(460)


-165%


Impairment of goodwill and intangible assets


3,717


-


3,717


N/A


Loss on investment in NeuPals


272


353


(81)


-23%


Total operating expenses


$  34,993


$  37,433


$      (2,440)


-7%


 

Core operating expenses, which include cost of sales, technology, research and development, operations and support, general and administrative and marketing and promotion expenses, decreased 13% during 2014 compared to the prior year due to the following drivers:

  • Operation and support expenses decreased approximately $1.9 million as a result of reduced expenses relating to employees, consultants and other contractors primarily related to the de-emphasis of various areas within the business and management implemented cost reduction initiatives to better align the Company's activities and resource allocation with its overall strategy.
  • Marketing and promotion expenses decreased approximately $1.4 million due to a reduction in headcount resulting from the Company's cost containment initiatives, including employees and consultants and a decrease in event related expenses resulting from the elimination of trade shows that previously supported the Company's legacy enterprise licensing initiatives, partially offset by an increase in distribution costs associated with the Company's current year direct marketing catalogcampaign.
  • Technology, research and development decreased approximately $1.0 million due primarily to a reduction in headcount and lower expenses related to the outsourcing of these services. These expense reductions are mainly due to cost reduction initiatives implemented by management.

Aside from the aforementioned decreases in core operating expenses, stock-based compensation decreased approximately $1.1 million primarily due to a reduction in number and fair value of awards vested. Offsetting these decreases was an approximately $3.7 million impairment charge recognized during 2014, which was impacted by the Company's recent changes in overall business strategy.

The net loss for the year ended December 31, 2014 was $22.4 million, or ($1.24) per share, compared to a net loss of $22.5 million, or ($3.01) per share for the year ended December 31, 2013. This consists of a loss from continuing operations of $22.1 million, or ($1.22) per share, and a loss from discontinued operations of $0.3 million, or ($0.02) per share, for 2014 compared to a loss from continuing operations of $22.4 million, or ($3.00) per share, and a loss from discontinued operations of $0.1 million, or ($0.01) per share, for 2013. Discontinued operations consists of operating results associated with the Company's Nexify advertising business and Open Court Publishing business. The increase in the loss from discontinued operations during 2014 compared to 2013 is primarily due to an impairment charge of approximately $0.2 million related to Nexify technology intangibles, declines in our advertising business resulting from the removal of our widget from major publications and a decrease in income generated from the sale of books through Open Court. A reduction in gains associated with the fair value of the Company's derivatives and increased interest expense during 2014 related to debentures issued throughout 2013 contributed to the overall net loss. The items were partially offset by increased foreign currency exchange gains in 2014.

At December 31, 2014 Cricket Media had $912,565 in cash and cash equivalents.  During 2014, the Company closed multiple tranches of a non-brokered private placement and issued approximately five million units of the Company ("Units") at prices ranging from CAD$0.65 to CAD$1.88 per Unit for proceeds of approximately $4.6 million. Each Unit consisted of one common share of the Company and one-third of one common share purchase warrant ("Warrant"). In addition, the Company borrowed approximately $9.7 million during 2014 under the credit facility with ZG (defined below) and repaid approximately $10.1 million in outstanding balances throughout 2014 through the issuance of restricted voting common shares.

As of April 15, 2015, Cricket Media had a total of 30,947,806 common shares outstanding, of which 7,837,105 are voting common shares and 23,110,701 are restricted voting common shares. 

Important factors, including those discussed in Cricket Media's regulatory filings (www.sedar.com), could cause actual results to differ from Cricket Media's expectations and those differences may be material.  Cricket Media's financial statements for the three months and year ended December 31, 2014, together with the related management's discussion & analysis, will be filed at www.sedar.com on April 28, 2015.

Debt Restructuring

The Company has been working to restructure its debt and improve its balance sheet. As outlined in its press release dated April 6th, 2015 and further discussed below, the Company is pursuing several transactions which, when fully implemented, will have the effect of reducing the Company's total debt obligations. In the event that all transactions are fully implemented, including a minimum $10 million of new capital  pursuant to a financing and the bridge loan, long term debt will be reduced from approximately $22 million to $11 million. The overall reduction is expected to be realized in stages as different aspects of the overall restructuring are completed.

In March 2015, ZG Ventures, LLC ("ZG") forgave an aggregate of $1.0 million of indebtedness owing by Cricket Media, Inc., a wholly-owned subsidiary of the Company, to ZG under a loan facility pursuant to which Cricket Media, Inc. is entitled to borrow up to a maximum of $2.5 million on a revolving basis.

In April 2015, the Company reached an agreement to restructure its ePals Foundation bank line-of-credit. The Company is expected to restructure the line-of-credit to carry a 5.0% interest rate with repayment due five years from the date the agreement is reached. The Company expects to formally execute the contract for this restructuring during the second quarter of 2015.

On April 6, 2015, the Company announced that it had entered into a binding memorandum of understanding with certain holders of the Company's 6.5% secured convertible debentures in the aggregate principal amount of CAD$12 million (the "Junior Indebtedness") issued pursuant to a trust indenture dated October 19, 2012 and certain holders of the Company's 10% secured convertible debentures in the aggregate principal amount of CAD$10 million (the "Senior Indebtedness") issued pursuant to a trust indenture dated March 20, 2013, pursuant to which the Junior Indebtedness and the Senior Indebtedness will be restructured as more fully described in the Company's press release dated April 6th, 2015 (the "Debt Restructuring"). 

The Debt Restructuring requires the approval of holders of 66 2/3% of the aggregate principal amount of Junior Indebtedness and holders of 66 2/3% of the aggregate principal amount of Senior Indebtedness.  The Company is proceeding with the definitive documents necessary to fully effect the Debt Restructuring.  Implementation of the Debt Restructuring is subject to the acceptance by the TSX Venture Exchange ("TSXV"). 

Additionally, in April 2015 the Company amended the terms of its loan facility with ZG to increase the maximum borrowing amount to $3,500,000 and extend the repayment date to April 30, 2015.

About Cricket Media

Cricket Media (TSXV: CKT) is an education media company that provides award-winning content on a safe and secure learning network for children, families and teachers across the world. Cricket Media's -popular media brands for toddlers to teens include Babybug, Ladybug, Cricket® and Cobblestone® with multiple language editions and apps in English, Spanish and Chinese. The Company's innovative web-based K12 tools for school and home include the ePals® community and virtual classroom for global collaboration as well as In2Books®, a Common Core eMentoring program that builds reading, writing and critical thinking skills. Cricket Media serves approximately one million classrooms and millions of teachers, students and parents in over 200 countries and territories through its products and services. Cricket Media also licenses its content and platform to top publishing and educational companies worldwide. For more information, please visit www.Cricketmag.com, www.ePals.com and www.In2Books.com.

Cautionary Statement Regarding Forward-Looking Information
Certain statements contained in this press release constitute forward-looking information within the meaning of applicable securities laws, including statements with respect to customers, ventures; partnerships; contributions and/or prospects of one or more of the Company's business lines; the Company's strategy, prospects and success in pursuing domestic or international markets; and the Company's anticipated plans to increase its subscriptions, revenue and sales. These statements relate to future events or future performance. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results "may", "could", "would", "might" or "will" (or other variations of the forgoing) be taken, occur, be achieved, or come to pass. Forward-looking information is necessarily based upon a number of assumptions and factors that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Those assumptions and factors are based on information currently available to the Company. Such material factors and assumptions include, but are not limited to: the Company's ability to execute on its business plan; the acceptance of the Company's products and services by customers globally; that the Company's affiliated entities will be able to secure distribution partners for sale of the Company's products and services; the Company's subjective assessment of the likelihood of success of a sales lead or opportunity; that sales will be completed at or above  estimated margins; that the demand for secure email communication as well as education media related products domestically, in Europe and in China will continue to grow; that the demand for the Company's products and services globally will develop and grow; the receipt of all requisite regulatory approvals throughout venture territories for the sale of the Company's products and services; the availability of additional financing, if and when required and market conditions generally. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. The forward-looking information contained in this press release is made as of the date hereof and the Company is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release

 

 

Cricket Media Group Ltd.
(formerly ePals Corporation)

Consolidated Statements of Financial Position

December 31, 2014 and 2013

 




December 31,

2014


December 31,

2013

Assets

Current assets







Cash & cash equivalents


$

912,565

$

3,641,985


Accounts receivable, net of allowance for doubtful accounts



968,678


672,191


Inventory



448,770


337,626


Other current assets



915,231


952,754


Current assets held for sale



676,399


980,881



Total current assets



3,921,643


6,585,437







Property and equipment, net



261,824


449,208

Investment in NeuPals



540,266


811,929

Goodwill



13,519,899


14,419,953

Other intangible assets, net



4,375,055


7,392,152

Restricted cash



76,277


75,966

Other assets



63,231


62,227

Long-term assets held for sale



1,275


485,465









Total assets


$

22,759,470

$

30,282,337


Liabilities and Stockholders' Equity (Deficit)


Current liabilities





Accounts payable and accrued expenses


$

5,785,970

$

5,420,122


Accrued interest



1,010,689


712,591


Acquisition consideration liabilities



-


584,178


Deferred revenue, current



6,267,928


6,422,165


Bank line-of-credit



1,470,000


1,500,000


Notes payable to related parties



1,050,118


1,500,000


Finance lease obligations, current



46,554


65,716


Other current liabilities



168,992


90,795


Current liabilities held for sale



565,127


796,853



Total current liabilities



16,365,378


17,092,420







Secured convertible debentures



18,710,994


18,399,596

Deferred revenue, less current portion



689,875


851,854

Finance lease obligations, less current portion



70,953


117,507

Other liabilities



11,440


11,440




Total liabilities



35,848,640


36,472,817







Commitments and contingencies












Stockholders' equity (deficit)





Share capital



115,057,827


104,912,731


Additional paid-in capital



12,744,057


7,352,232


Accumulated deficit



(139,259,881)


(116,809,681)


Unvested voting common stock



-


(1,876)


Accumulated other comprehensive loss



(139,125)


(151,838)


Less: Treasury stock (28,800 shares)



(1,492,048)


(1,492,048)








Total stockholders' equity (deficit)



(13,089,170)


(6,190,480)








Total liabilities and stockholders' equity (deficit)


$

22,759,470

$

30,282,337

 

 

Cricket Media Group Ltd.
(formerly ePals Corporation)

Consolidated Statements of Comprehensive Loss

Years Ended December 31, 2014 and 2013








Year Ended December 31,








2014


2013







Revenue 


$      14,596,684


$   14,661,869







Operating expenses:





Cost of sales

9,229,608


9,353,463


Technology, research & development costs

4,347,276


5,350,347


Operations and support expenses

3,001,607


4,903,345


General and administrative expenses

6,281,655


6,253,392


Marketing and promotion expenses

7,000,359


8,442,427


Stock-based compensation 

356,881


1,490,826


Depreciation & amortization

968,263


1,007,982


Loss on investment in NeuPals

271,663


352,594







Change in estimated fair value of acquisition share consideration

(181,042)


278,877







Impairment of goodwill and intangible assets

3,716,858


-

Total operating expenses

34,993,128


37,433,253







Loss from operations

(20,396,444)


(22,771,384)







Other income (expense):





Gain from change in fair value of derivatives

63,750


3,130,000


Interest expense, net

(3,662,847)


(3,444,090)


Other income

52,571


6,400


Net foreign currency exchange gains

1,831,254


664,750







Loss from continuing operations 

(22,111,716)


(22,414,324)







Loss from discontinued operations 

(338,484)


(99,714)







Net Loss 

(22,450,200)


(22,514,038)







Other comprehensive income (loss):





Items that may be subsequently reclassfied into net income/loss






Foreign currency translation

12,713


(2,612)







Total comprehensive loss

$     (22,437,487)


$  (22,516,650)













Net loss per common share - basic and diluted:





Continuing operations

(1.22)


(3.00)


Discontinued operations

(0.02)


(0.01)

Net loss per share - basic and diluted

$               (1.24)


$           (3.01)







Weighted average number of common shares:




Basic and diluted

18,130,478


7,474,776

 

 

Cricket Media Group Ltd.
(formerly ePals Corporation)

Consolidated Statements of Cash Flows

Years Ended December 31, 2014 and 2013

 







Year Ended December 31,







2014


2013

Cash flows from operating activities:






Net loss from continuing operations

$

(22,111,716)

$

(22,414,324)


Adjustments to reconcile net loss to net cash used in operating activities:







Gain from change in fair value of derivatives


(63,750)


(3,130,000)



Depreciation and amortization


968,263


1,007,982



Stock-based compensation


356,881


1,490,826



Bad debt recovery, net


(101,124)


11,018



Loss on investment in NeuPals 


271,663


352,594



Amortization of financing costs from debentures 


2,019,285


1,949,160



Write-off of abandoned patents


196,270


-



Net foreign currency exchange gains


(1,831,254)


(664,750)



Restricted share vesting


1,876


1,876



Change in estimated fair value of acquisition consideration


(181,042)


278,877



Increase in restricted cash


311


303



Impairment of goodwill and intangible assets 


3,716,858


-



Income tax provision 


21,389


-



Changes in operating assets and liabilities:








Accounts receivable


(271,897)


655,133




Inventory


(111,144)


(91,703)




Other current assets


37,523


(362,048)




Accounts payable and accrued expenses


663,946


(203,511)




Deferred revenue


(316,216)


170,511




Other


279,158


952





Total adjustments


5,656,996


1,467,220














Net cash used in continuing operations


(16,454,720)


(20,947,104)





Net cash provided by discontinued operations


221,223


323,577





Net cash used in operating activities


(16,233,497)


(20,623,527)










Cash flows from investing activities:






Cash paid for acquisitions


(301,362)


-


Purchases of equipment


(51,277)


(383,952)


Cash paid for patents and owned permissions


(682,808)


(696,058)














Net cash used in investing activities


(1,035,447)


(1,080,010)










Cash flows from financing activities:






Proceeds from secured convertible debentures, net of expenses


-


9,282,672


Proceeds from related party line of credit


9,700,118


6,500,000


Proceeds from private placement, net of expenses


4,640,712


7,536,729


Repayments on related party line of credit


(100,000)


(2,000,000)


Repayments on bank line of credit


(30,000)


-


Payments on finance lease obligations


(65,716)


(78,342)


Proceeds from finance lease obligations


-


163,742


Proceeds from exercise of stock warrants


399,882


-














Net cash provided by financing activities


14,544,996


21,404,801











Decrease in cash and equivalents


(2,723,948)


(298,736)








Effect of exchange rates on cash


(5,472)


(7,778)








Cash & cash equivalents at the beginning of the period


3,641,985


3,948,499


Cash & cash equivalents at the end of the period

$

912,565

$

3,641,985

 

SOURCE Cricket Media Inc.

For further information: Chief Financial Officer, Aric Holsinger, Cricket Media, Phone: (703) 885-3400, aholsinger@cricketmedia.com; Investor Relations, Cory Pala, E.vestor, Phone: (416) 657-2400, cpala@cricketmedia.com

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