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CORRECTING and REPLACING Loop Media Reports Fiscal Second Quarter 2023 Financial Results

FQ2 Revenue up 11% YoY to $5.4 Million; Quarterly Active Units up 22% QoQ

Subhead of release should begin with FQ2 (instead of Q1). In the Conference Call section, the first sentence should end with March 31, 2023 (instead of March 31, 2022).

The updated release reads:

LOOP MEDIA REPORTS FISCAL SECOND QUARTER 2023 FINANCIAL RESULTS

FQ2 Revenue up 11% YoY to $5.4 Million; Quarterly Active Units up 22% QoQ

Loop Media, Inc. (“Loop Media” or “Loop” or the “Company”) (NYSE American: LPTV), a leading multichannel streaming platform that provides curated music video and branded entertainment channels for businesses, is reporting financial and operating results for its fiscal second quarter ended March 31, 2023.

Fiscal Q2 2023 vs. Fiscal Q2 2022 Highlights (unless otherwise noted)

  • Revenue increased approximately 11% to $5.4 million.
  • Gross profit increased to $1.6 million, with gross margin of 29.4%.
  • Net loss was $9.8 million or $(0.17) per share, compared to a loss of $5.0 million or $(0.11) per share.
  • Adjusted EBITDA (a non-GAAP financial measure defined below) was $(5.6) million compared to $(3.0) million.
  • As of March 31, 2023, the Company had 32,734 quarterly active units (QAUs) operating on its platform, an increase of 22% compared to FQ1 2023.

Management Commentary

“While we did achieve quarterly growth year-on-year, the sequential high level revenue growth we have seen over the past four quarters pulled back during this second quarter due to the challenging macroeconomic environment coupled with the toughest advertising quarter of the year due to seasonality. To counteract that, our various advertising and marketing initiatives resulted in a 22% sequential increase in quarterly active units in Fiscal 2023 Q2 over Q1, as we continue to perform well in the distribution of players and increase our platform footprint, which we believe will bode well when the market recovers and ad dollars return more robustly,” said Jon Niermann, CEO of Loop Media. “Our ability to scale distribution and continue to convert those dollars into meaningful growth of our Loop Player footprint is a testament to our execution, while we navigate a continued challenging macroeconomic environment in the industry.”

“In addition, we are being extra diligent to scrutinize costs, reduce spending and create efficiencies where we can to strengthen the bottom line. We’ve already pinpointed significant cost reductions by the end of Q3 that we believe will help achieve this goal while also building our margins. We believe this can happen without jeopardizing future growth while we work our way aggressively towards becoming positive cashflow,” Niermann added.

“We’re now ready and able to deploy our direct sales initiative designed to accelerate Loop’s ad revenue growth directly from marketers and their agencies. This is expected to apply positive pressure to Loop’s inventory, increasing sell-through while growing CPMs. We believe a healthy mix of direct + programmatic ad revenue is coming at the right time given Loop’s size and leadership position in the CTV for Business and DOOH marketplace,” said Bob Gruters, CRO of Loop.

Fiscal Second Quarter 2023 Financial Results

In the fiscal second quarter, revenue increased approximately 11% to $5.4 million compared to $4.9 million in the year-ago period. The increase was primarily driven by significantly more Loop Players deployed into the market and the benefit from Loop’s Partner Platform business launched in May 2022.

Gross profit in the fiscal second quarter of 2023 increased slightly to $1.6 million compared to $1.4 million for the same period in fiscal 2022. Gross margin was 29.4% compared to 28.0% in the prior period. The slight increase was primarily driven by new contracts with reduced average content costs. When compared to the prior quarter, fiscal Q2, gross margin decreased primarily due to lower revenue and recurring content costs.

Total sales, general, and administrative (“SG&A”) expenses (excluding stock-based compensation and depreciation and amortization) in the fiscal second quarter of 2023 were $7.8 million compared to $4.7 million for the same period in fiscal 2022. The increase in SG&A was primarily due to greater marketing, customer acquisition and increased headcount.

Net loss in the fiscal second quarter of 2023 was $9.8 million or $(0.17 per share, compared to a loss of $5.0 million or $(0.11) per share for the same period in fiscal 2022.

Adjusted EBITDA in the fiscal second quarter of 2023 was $(5.6) million compared to $(3.0 million for the same period in fiscal 2022.

On March 31, 2023, cash and cash equivalents were $4.7 million compared to $7.8 million on December 31, 2022. The decrease was primarily driven by marketing spend and non-recurring expenses related to licensed content. As of March 31, 2023, the Company had total debt of $9.1 million compared to $9.2 million at December 31, 2022.

Conference Call

The Company will conduct a conference call today, May 11, 2023, at 5:00 p.m. Eastern Daylight Time to discuss financial and operating results for its second quarter ended March 31, 2023.

Loop’s management will host the conference call, followed by a question and answer period.

Date: May 11, 2023

Time: 5:00 p.m. Eastern Standard Time

Participant registration link: here

The conference call will also be available for replay on the investor relations section of the Company’s website at www.loop.tv/investors.

About Loop Media, Inc.

Loop Media, Inc. (“Loop Media”) (NYSE American: LPTV) is a leading digital out of home (DOOH) TV and digital signage platform optimized for businesses, streaming more than 200 free music video, news, sports and entertainment channels through its Loop TV service. Loop Media is the leading company in the U.S. licensed to stream music videos to businesses through its proprietary Loop Player.

Loop Media’s digital video content reaches millions of viewers in DOOH locations including bars/restaurants, office buildings, retail businesses, college campuses, airports and on free ad-supported TV platforms like Roku and at local gas stations on GSTV terminals in the United States.

Loop is fueled by one of the largest and most important video libraries that includes music videos, movie trailers and live performances. Loop Media’s non-music channels cover a multitude of genres and moods and include movie trailers, sports highlights, lifestyle and travel videos, viral videos and more. Loop Media’s streaming services generate revenue from advertising, sponsorships, integrated marketing and branded content and from subscriptions.

To learn more about Loop Media products and applications, please visit us online at Loop.tv

Follow us on social:

Instagram: @loopforbusiness

Twitter: @loopforbusiness

LinkedIn: https://www.linkedin.com/company/looptv/

Safe Harbor Statement and Disclaimer

This news release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, Loop Media’s expected 2023 results, ability to compete in the highly competitive markets in which it operates, statements regarding Loop Media’s ability to develop talent and attract future talent, the success of strategic actions Loop Media is taking, and the impact of strategic transactions. Forward-looking statements give our current expectations, opinion, belief or forecasts of future events and performance. A statement identified by the use of forward-looking words including "will," "may," "expects," "projects," "anticipates," "plans," "believes," "estimate," "should," and certain of the other foregoing statements may be deemed forward-looking statements. Although Loop Media believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this news release. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected. The forward-looking statements in this press release are made as of the date hereof. Loop Media takes no obligation to update or correct its own forward-looking statements, except as required by law, or those prepared by third parties that are not paid for by Loop Media. Loop Media’s SEC filings are available at www.sec.gov.

Non-GAAP Measures

Loop Media uses non-GAAP financial measures, including adjusted EBITDA and quarterly active units or QAUs, as supplemental measures of the performance of the Company’s business. Use of these financial measures has limitations, and you should not consider them in isolation or use them as substitutes for analysis of Loop Media’s financial results under generally accepted accounting principles in the United States of America (“U.S. GAAP”). The tables below provide a reconciliation of adjusted EBITDA to the most nearly comparable measure under U.S. GAAP.

The Company defines an “active unit” as (i) an ad-supported Loop Player (or DOOH location using our ad-supported service through our “Loop for Business” application or using a DOOH venue-owned computer screening our content) that is online, playing content, and has checked into the Loop analytics system at least once in the 90-day period or (ii) a DOOH location customer using our paid subscription service at any time during the 90-day period. The Company uses “QAU” to refer to the number of such active units during such period.

LOOP MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
 
Three months ended March 31, Six months ended March 31,

2023

 

2022

 

2023

 

2022

 
Revenue $

5,393,231

$

4,879,839

$

20,219,062

$

7,875,873

Cost of revenue
Cost of revenue - Advertising and Legacy and other revenue

3,177,607

3,169,059

11,635,240

4,302,981

Cost of revenue - depreciation and amortization

630,543

346,158

1,312,710

657,213

Total cost of revenue

3,808,150

3,515,217

12,947,950

4,960,194

Gross profit

1,585,081

1,364,622

7,271,112

2,915,679

Gross margin %

29.4%

28.0%

36.0%

37.0%

 
Operating expenses
Sales, general and administrative

7,769,314

4,686,326

15,727,448

9,014,197

Stock-based compensation

2,475,807

1,173,106

4,266,614

2,722,512

Depreciation and amortization

235,009

32,399

422,725

64,802

Total operating expenses

10,480,130

5,891,831

20,416,787

11,801,511

 
Loss from operations

(8,895,049)

(4,527,209)

(13,145,675)

(8,885,832)

 
Other income (expense)
Interest income

200

Interest expense

(919,444)

(494,389)

(1,927,027)

(998,506)

Gain (Loss) on extinguishment of debt, net

490,051

Change in fair value of derivatives

47,568

146,313

Other income

(2,624)

(2,624)

Total other income (expense)

(922,068)

(446,821)

(1,929,651)

(361,942)

Loss before income taxes

(9,817,117)

(4,974,030)

(15,075,326)

(9,247,774)

Income tax (expense)/benefit

(800)

(1,230)

(1,051)

Net loss $

(9,817,117)

$

(4,974,830)

$

(15,076,556)

$

(9,248,825)

 
Basic and diluted net loss per common share $

(0.17)

$

(0.11)

$

(0.27)

$

(0.21)

 
Weighted average number of basic and diluted common shares outstanding

56,381,209

45,531,995

56,381,209

45,005,276

LOOP MEDIA, INC.
EBITDA RECONCILIATION
(UNAUDITED)
 
 
Three months ended March 31, Six months ended March 31,

2023

 

2022

 

2023

 

2022

GAAP net loss $

(9,817,117)

$

(4,974,830)

$

(15,076,556)

$

(9,248,825)

Adjustments to reconcile to EBITDA:
Interest expense

919,444

494,389

1,927,027

998,506

Interest income

(200)

Depreciation and amortization expense*

865,552

378,557

1,735,435

722,015

Income tax expense (benefit)

800

1,230

1,051

 
EBITDA $

(8,032,121)

$

(4,101,084)

$

(11,412,864)

$

(7,527,453)

 
 
* Includes amortization of content assets and for cost of revenue and operating expenses.
LOOP MEDIA, INC.
ADJUSTED EBITDA RECONCILIATION
(UNAUDITED)
 
 
Three months ended March 31, Six months ended March 31,

2023

 

2022

 

2023

 

2022

GAAP net loss $

(9,817,117)

$

(4,974,830)

$

(15,076,556)

$

(9,248,825)

Adjustments to reconcile to Adjusted EBITDA:
Interest expense

919,444

494,389

1,927,027

998,506

Interest income

(200)

Depreciation and amortization expense*

865,552

378,557

1,735,435

722,015

Income tax expense (benefit)

800

1,230

1,051

Stock-based compensation**

2,475,807

1,173,106

4,266,614

2,722,512

Gain on extinguishment of debt

(490,051)

Change in fair value of derivative

(47,568)

(146,313)

 
Adjusted EBITDA $

(5,556,314)

$

(2,975,546)

$

(7,146,250)

$

(5,441,305)

 
 
* Includes amortization of content assets and for cost of revenue and operating expenses.
** Includes options, Restricted Stock Units ("RSUs") and warrants.

LOOP MEDIA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 
 
March 31, 2023 September 30, 2022
ASSETS (UNAUDITED)
Current assets
Cash $

4,650,763

$

14,071,914

Accounts receivable, net

5,694,321

12,590,970

Prepaid expenses and other current assets

918,175

1,496,566

Deferred offering costs

232,845

Content assets - current

2,700,232

745,633

Total current assets

14,196,336

28,905,083

Non-current assets
Deposits

64,090

63,889

Content assets - non current

1,111,580

678,659

Property and equipment, net

2,701,130

1,633,169

Operating lease right-of-use assets

17,185

76,696

Intangible assets, net

534,111

590,333

Total non-current assets

4,428,096

3,042,746

Total assets $

18,624,432

$

31,947,829

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable $

6,883,215

$

7,453,801

Accrued liabilities

3,413,038

5,620,873

Accrued royalties and revenue share

3,184,604

4,559,088

Payable on acquisition

250,125

License content liabilities - current

1,282,655

1,092,819

Deferred Income

140,764

Lease liability - current

18,483

75,529

Non-revolving line of credit

1,809,594

Total current liabilities

16,591,589

19,192,999

Non-current liabilities
Non-revolving line of credit

1,494,469

Non-revolving line of credit, related party

3,088,753

2,575,753

Revolving line of credit

4,185,069

3,030,516

Total non-current liabilities

7,273,822

7,100,738

Total liabilities

23,865,411

26,293,737

 
Commitments and contingencies

 
Stockholders’ equity
Common Stock, $0.0001 par value, 105,555,556 shares authorized, 56,381,209 and 56,381,209 shares issued and outstanding as of March 31, 2023, and September 30, 2022, respectively

5,638

5,638

Additional paid in capital

106,151,803

101,970,318

Accumulated deficit

(111,398,420)

(96,321,864)

Total stockholders' equity

(5,240,979)

5,654,092

Total liabilities and stockholders' equity $

18,624,432

$

31,947,829

LOOP MEDIA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
Six months ended March 31,

2023

 

2022

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $

(15,076,556)

$

(9,248,825)

Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount

1,244,329

713,197

Depreciation and amortization expense

422,725

64,802

Amortization of content assets

1,312,710

657,213

Amortization of right-of-use assets

59,511

78,114

Bad debt expense

20,000

Gain on extinguishment of debt, net

(490,051)

Change in fair value of derivative

(146,313)

Stock-based compensation

4,266,614

2,722,512

Payment in kind for interest stock issuance

88,500

Change in operating assets and liabilities:
Accounts receivable

6,896,649

(3,075,632)

Prepaid income tax

(1,842)

Inventory

10,252

160,965

Prepaid expenses

568,138

(11,720)

Deposit

(201)

(29,590)

Accounts payable

(1,181,952)

871,866

Accrued liabilities

(2,207,835)

1,033,139

Accrued royalties and revenue share

(1,374,484)

1,964,214

Licensed content liability

(3,457,477)

(853,500)

Operating lease liabilities

(57,046)

(80,877)

Deferred income

(140,764)

(34,392)

NET CASH USED IN OPERATING ACTIVITIES

(8,715,387)

(5,598,220)

 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment

(1,046,876)

NET CASH USED IN INVESTING ACTIVITIES

(1,046,876)

 
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock

1,250,000

Proceeds from credit facility

1,500,000

Proceeds from line of credit

28,087,249

Payments from line of credit

(27,326,600)

Debt issuance costs

(22,300)

Issuance costs for stock uplist

(86,330)

Deferred offering costs

(61,983)

(123,498)

Payment of acquisition related consideration

(250,125)

Repayment of stockholder loans

(552,832)

Short swing profit recovery

1,201

NET CASH PROVIDED BY FINANCING ACTIVITIES

341,112

2,073,670

 
Change in cash and cash equivalents

(9,421,151)

(3,524,550)

Cash, beginning of period

14,071,914

4,162,548

Cash, end of period $

4,650,763

$

637,998

 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW STATEMENTS
Cash paid for interest $

665,309

$

101,186

Cash paid for income taxes $

1,230

$

1,051

 
SUPPLEMENTAL DISCLOSURES OF NON CASH INVESTING AND FINANCING ACTIVITIES
Payment in kind common stock payment $

$

88,496

Conversion of Preferred Class B stock to common stock $

$

1,980

Unpaid deferred offering costs $

170,862

$

247,023

Unpaid additions to property and equipment $

387,588

$

Investment in licensed content and internally developed content $

52,916

$

 

Contacts

Loop Media Investor Contact

James Cerna, Head of Capital Markets

ir@loop.tv



Loop Media Press Contact

Samara Cooperberg, Associate Vice President

looptv@5wpr.com

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