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Jerrick Media Holdings, Inc. Reports Third Quarter and Nine Month Periods Ended September 30, 2017 Financial ResultsNEW YORK, Nov. 20, 2017 /PRNewswire/ -- Jerrick Media Holdings, Inc., (OTCQB: JMDA) (the "Company" or "Jerrick"), a technology company, today reported financial results for the three and nine-month periods ended September 30, 2017. Key Third Quarter 2017 Financial Results Summary / Business Highlights:
Since release of Jerrick's long-form social platform Vocal on November 30, 2016, Jerrick has dedicated significant resources to expand its digital communities, cultivate its content creator base, increase published content, increase time on site, and grow pageviews within its expanding network. Jerrick has successfully grown its niche-communities from a launch of 6 to 28 currently and its active content creators from a beta group of 50 to approximately 85,000 (as of November 14, 2017), submitting on average 285 articles daily and generating over 5 million page views per month. The average Vocal user spends over 3.5 minutes and visits nearly 3 pages daily. The accomplishment of these milestones was met with the completion of the Company's first platform upgrade that includes Jerrick's first core revenue producing features released in beta the last few days of the quarter; platform processing fees, branded content, sponsored in-house produced content, and affiliate advertising. In the very brief time one of Vocal's revenue features, sponsored content campaign models, was activated in beta during the third quarter 2017, net revenues of $11,000 were generated. The Company believes future revenues will grow exponentially as the platform continues to reach a broader audience after the completion of the beta period. During the three-month period ended September 30, 2017, the Company incurred a loss from operations of $(1,407,000). This compares to a loss from operations of $(933,000) during the same period of the prior year and a loss of $(948,000) during the second quarter 2017. The Company reported a net loss of approximately $(2,910,000) or $(0.07) per basic share for the three months ended September 30, 2017, compared to the previous year's second quarter net loss of approximately $(1,039,000) or $(0.03) per basic share and a net loss of $(1,295,000) or $(0.03 per basic share) for the second quarter 2017. The increase in the current quarter loss reflects the impact of non-cash amortization for derivatives, debt issuance and debt discount; increased interest expense and increased operational costs. Operating expenses for the three months ended September 30, 2017 totaled approximately $1,418,000, an increase of approximately of $469,000 from the prior year third quarter and an increase of approximately $419,000 compared to second quarter 2017. The increase in operating expenses primarily reflects increased consulting and professional fees related to the development, rollout and launch of Vocal 2.0 and the cost associated with being a publicly traded company. The Company incurred other (non-operational) expenses of $1,502,000 in the third quarter 2017 compared to $107,000 in the third quarter 2016 and other expenses of $348,000 in the second quarter 2017. The increase in the current third quarter other expenses was due to an increase in non-cash charges for amortization of debt discount and issuance costs and non-cash charges related to its debt financings, as well as increase interest expense. For the nine months ended September 30, 2017, the Company reported revenues of approximately $105,000 compared to revenues of approximately $201,000 for the same period in 2016. Heretofore, revenue has been generated predominantly through sale and licensing of the Company's IP and image library. While these legacy businesses are expected to increase in revenue contribution in the upcoming fiscal year, current operational resources are focused on the recurring revenue features in the Company's long form social publishing platform, Vocal. Jerrick anticipates platform processing fees, branded content, sponsored in-house agency produced content, affiliate advertising, and other future revenue producing features on the platform to represent the majority of its revenues going forward. Operating expenses for the nine months ended September 30, 2017 totaled $3,488,000 as compared to $2,725,000 for the nine-month period ended September 30, 2016. The increase in operating expenses includes $561,000 of non-cash charges related to employee and board option grants, $268,000 increase in expenses related to the development and launch of its Vocal platform, and $63,000 increase in consulting and professional fees related to becoming a publicly traded company. Interest expense during the nine months of 2017 totaled $373,000 compared to $113,000 during the same period of 2016. Jerrick reported a net loss for the nine months ended September 30, 2017 of $(5,762,000) or $(0.15) per basic share compared to a net loss of $(7,088,000) or $(0.23) per basic share for the same period in 2016, which included a $4,300,000 non-cash charge for registration rights penalty provisions accounted for in second quarter 2016. At September 30, 2017, the Company reported total assets of $260,000, inclusive of Jerrick's trademarks, IP, and image library, which is carried at zero value on the Company's books. The Company reported current liabilities of $6,050,000 which includes $1,544,000 in debt discount and issuance amortization and $2,510,000 in short term notes. Shortly after September 30, $660,000 of the short term notes converted into the Company's two-year, 15% Notes Offering, and the Company raised additional capital of $1,085,000 through the 15% Note Offering. The Company had approximately $1,991,000 in long term debt at September 30, 2017, which, shortly after the third quarter end, increased to approximately $3,736,000. On September 30, 2017, Jerrick had approximately 39.5 million shares of Common Stock outstanding, an increase of approximately 1.1 million shares during the third quarter due to the conversion of preferred shares into common stock by shareholders. On a fully diluted basis, Jerrick had convertible preferred stock (235,000 equivalent common shares), stock options (17.7 million common shares equivalent with average exercise price of $0.42), warrants (34.4 million common shares equivalent with an average exercise price of $0.27), convertible notes (13.7 million equivalent common shares), and additional Common Stock reserved for issuance that collectively would result in the issuance of an additional 66.5 million shares of Common Stock. As of September 30, 2017, the Company had federal and state tax loss carry forwards of approximately $14.8 million, which expire through the fiscal year ending December 31, 2035. "Vocal was launched nearly one year ago. We have reached a significant inflection point in our business model. Vocal's viewership is accelerating rapidly, above our expectations. The platform has secured its position as one of the premier, long form, social publishing platforms. With the funds we have recently secured, not only has the Company materially strengthened its balance sheet by either repaying or transitioning a significant majority of its short-term obligations to long-term, two-year convertible debt, but we have also allocated working capital to advance our technology and platform to provide virtually unlimited scalability," commented Jeremy Frommer, co-founder and CEO of Jerrick. "To experience the excitement of Jerrick's Vocal platform and witness our accelerated growth momentum first hand, I invite you to keep current on our progress via the Company's website http://jerrick.media and my social media presence at https://twitter.com/JeremyFrommerand https://www.linkedin.com/in/jeremyfrommer/." About Jerrick Jerrick is a technology company focused on the development of digital genre specific communities, targeted marketing of branded content, affiliated sales, in-house agency production, and platform processing fees. Core to Jerrick's unique capabilities is Vocal, a proprietary long-form, digital publishing and content distribution platform, capable of hosting all forms of rich media content. Vocal uses a proprietary algorithm which intelligently bridges media-rich long-form creative content with targeted branding and ecommerce monetization opportunities in each niche-community. Each community is also managed by a dedicated team, whose primary focus is on revenue conversion of the published material via digital arbitrage. For news and more information please visit:https://jerrick.media/news. For daily updates, please visit: https://twitter.com/JeremyFrommerand https://www.linkedin.com/in/jeremyfrommer/ Forward-Looking Statements Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings.
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