|
Delaware
|
86-0879433
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
100 Union Square Drive
|
|
New Hope, Pennsylvania
|
18938
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer ☐
|
Accelerated filer ☒
|
|
|
Non-accelerated filer ☐ (Do not check if a smaller reporting company)
|
Smaller reporting company ☐
|
|
|
|
Emerging growth company ☐
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for comply with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
|
☐
|
Class
|
|
Outstanding as of July 30, 2018
|
||
Common Stock, $0.001 par value per share
|
|
73,143,845
|
|
shares
|
|
||
|
||
|
||
|
||
|
||
|
||
Item 4
.
|
||
CERTIFICATIONS
|
||
INDEX TO EXHIBITS
|
|
(Unaudited)
|
|
|
||||
|
June 30,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
20,922,457
|
|
|
$
|
24,158,444
|
|
Accounts receivable, net of allowance of $637,802 and $527,958 at June 30, 2018 and December 31, 2017, respectively
|
23,866,941
|
|
|
26,443,675
|
|
||
Prepaid expenses and other current assets
|
5,253,503
|
|
|
3,245,174
|
|
||
Total current assets
|
50,042,901
|
|
|
53,847,293
|
|
||
Restricted cash
|
500,000
|
|
|
894,551
|
|
||
Goodwill
|
149,227,248
|
|
|
150,694,135
|
|
||
Property and equipment, net
|
3,632,350
|
|
|
4,524,118
|
|
||
Intangible assets, net
|
42,342,822
|
|
|
48,719,428
|
|
||
Deferred taxes
|
16,115,201
|
|
|
15,521,214
|
|
||
Other assets
|
1,878,851
|
|
|
1,144,032
|
|
||
Total assets
|
$
|
263,739,373
|
|
|
$
|
275,344,771
|
|
LIABILITIES AND STOCKHOLDERS
’
EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Accounts payable
|
$
|
5,325,941
|
|
|
$
|
6,277,846
|
|
Accrued liabilities
|
17,812,588
|
|
|
19,866,438
|
|
||
Current portion of long-term debt
|
15,000,000
|
|
|
15,000,000
|
|
||
Current portion of capital lease obligations
|
187,606
|
|
|
254,399
|
|
||
Deferred revenue
|
5,006,501
|
|
|
4,433,450
|
|
||
Total current liabilities
|
43,332,636
|
|
|
45,832,133
|
|
||
Long-term capital lease obligations, less current portion, net
|
110,056
|
|
|
192,137
|
|
||
Long-term debt, less current portion, net
|
33,301,419
|
|
|
40,637,106
|
|
||
Long-term derivative liability
|
2,126,536
|
|
|
2,995,657
|
|
||
Other liabilities
|
114,340
|
|
|
147,178
|
|
||
Total liabilities
|
78,984,987
|
|
|
89,804,211
|
|
||
Commitments and contingencies (see Note 7)
|
—
|
|
|
—
|
|
||
STOCKHOLDERS
’
EQUITY:
|
|
|
|
||||
Preferred stock, $.001 par value; authorized - 5,000,000 shares; 0 shares issued and outstanding at June 30, 2018 and December 31, 2017
|
—
|
|
|
—
|
|
||
Common stock, $.001 par value; authorized - 100,000,000 shares; 73,121,962 and 71,915,018 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
|
73,118
|
|
|
71,918
|
|
||
Additional paid-in capital
|
412,213,959
|
|
|
408,029,068
|
|
||
Accumulated deficit
|
(225,867,346
|
)
|
|
(221,435,888
|
)
|
||
Accumulated other comprehensive loss
|
(1,665,345
|
)
|
|
(1,124,538
|
)
|
||
Total stockholders
’
equity
|
184,754,386
|
|
|
185,540,560
|
|
||
Total liabilities and stockholders
’
equity
|
$
|
263,739,373
|
|
|
$
|
275,344,771
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
$
|
42,801,745
|
|
|
$
|
31,329,468
|
|
|
$
|
80,439,538
|
|
|
$
|
51,388,265
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
7,753,486
|
|
|
4,599,842
|
|
|
14,801,479
|
|
|
9,705,350
|
|
||||
Product development and content
|
24,411,288
|
|
|
16,526,905
|
|
|
46,512,825
|
|
|
24,984,399
|
|
||||
General and administrative
|
5,154,103
|
|
|
5,160,799
|
|
|
10,623,281
|
|
|
8,023,226
|
|
||||
Depreciation and amortization
|
3,505,180
|
|
|
2,965,175
|
|
|
7,134,783
|
|
|
4,650,014
|
|
||||
Acquisition and restructuring
|
1,036,602
|
|
|
3,769,425
|
|
|
4,386,553
|
|
|
5,269,854
|
|
||||
Total operating costs and expenses
|
41,860,659
|
|
|
33,022,146
|
|
|
83,458,921
|
|
|
52,632,843
|
|
||||
Income (loss) from operations
|
941,086
|
|
|
(1,692,678
|
)
|
|
(3,019,383
|
)
|
|
(1,244,578
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
2,742
|
|
|
1,400
|
|
|
9,950
|
|
|
3,970
|
|
||||
Interest expense
|
(671,294
|
)
|
|
(175,254
|
)
|
|
(1,278,980
|
)
|
|
(177,586
|
)
|
||||
Gain (loss) on foreign currency transactions
|
4,216
|
|
|
(9,229
|
)
|
|
107,259
|
|
|
(11,429
|
)
|
||||
Other
|
28,571
|
|
|
—
|
|
|
21,627
|
|
|
—
|
|
||||
Total other expense
|
(635,765
|
)
|
|
(183,083
|
)
|
|
(1,140,144
|
)
|
|
(185,045
|
)
|
||||
Income (loss) before income tax benefit
|
305,321
|
|
|
(1,875,761
|
)
|
|
(4,159,527
|
)
|
|
(1,429,623
|
)
|
||||
Income tax benefit (expense)
|
(540,593
|
)
|
|
2,732,356
|
|
|
(288,406
|
)
|
|
2,732,064
|
|
||||
Net income (loss)
|
$
|
(235,272
|
)
|
|
$
|
856,595
|
|
|
$
|
(4,447,933
|
)
|
|
$
|
1,302,441
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net income (loss) per common stockholder:
|
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per common stockholder
|
$
|
—
|
|
|
$
|
0.01
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.02
|
|
Diluted net income (loss) per common stockholder
|
$
|
—
|
|
|
$
|
0.01
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
72,753,487
|
|
|
70,122,234
|
|
|
72,369,619
|
|
|
65,632,962
|
|
||||
Diluted
|
72,753,487
|
|
|
74,885,903
|
|
|
72,369,619
|
|
|
70,569,243
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(235,272
|
)
|
|
$
|
856,595
|
|
|
$
|
(4,447,933
|
)
|
|
$
|
1,302,441
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Reclassification of gains on derivative financial instruments, net of tax benefit of $832,995, $—, $508,691 and $—
|
(1,831,921
|
)
|
|
—
|
|
|
(1,053,778
|
)
|
|
—
|
|
||||
Unrealized gains on derivative financial instruments, net of tax expense of $834,099, $—,
$416,203 and $— |
1,858,182
|
|
|
—
|
|
|
1,097,056
|
|
|
—
|
|
||||
Foreign currency translation adjustment
|
(952,438
|
)
|
|
—
|
|
|
(584,085
|
)
|
|
—
|
|
||||
Other comprehensive income (loss)
|
(926,177
|
)
|
|
—
|
|
|
(540,807
|
)
|
|
—
|
|
||||
Comprehensive income (loss)
|
$
|
(1,161,449
|
)
|
|
$
|
856,595
|
|
|
$
|
(4,988,740
|
)
|
|
$
|
1,302,441
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total
Stockholders
’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance-December 31, 2016
|
58,945,607
|
|
|
$
|
58,949
|
|
|
$
|
351,873,801
|
|
|
$
|
(156,844,161
|
)
|
|
$
|
—
|
|
|
$
|
195,088,589
|
|
Vesting of stock options for compensation
|
—
|
|
|
—
|
|
|
8,467,278
|
|
|
—
|
|
|
—
|
|
|
8,467,278
|
|
|||||
Exercise of stock options
|
2,080,648
|
|
|
2,081
|
|
|
2,814,654
|
|
|
—
|
|
|
—
|
|
|
2,816,735
|
|
|||||
Exercise of warrants
|
675,000
|
|
|
675
|
|
|
2,395,575
|
|
|
—
|
|
|
—
|
|
|
2,396,250
|
|
|||||
Issuance of common stock
|
9,200,000
|
|
|
9,200
|
|
|
42,986,171
|
|
|
—
|
|
|
—
|
|
|
42,995,371
|
|
|||||
Issuance of common stock for vested RSAs
|
1,013,763
|
|
|
1,013
|
|
|
(1,013
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
RSAs withheld to cover taxes
|
—
|
|
|
—
|
|
|
(507,398
|
)
|
|
—
|
|
|
—
|
|
|
(507,398
|
)
|
|||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
(1,124,538
|
)
|
|
(1,124,538
|
)
|
|||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(64,591,727
|
)
|
|
—
|
|
|
(64,591,727
|
)
|
|||||
Balance-December 31, 2017
|
71,915,018
|
|
|
$
|
71,918
|
|
|
$
|
408,029,068
|
|
|
$
|
(221,435,888
|
)
|
|
$
|
(1,124,538
|
)
|
|
$
|
185,540,560
|
|
Adoption of ASC Topic 606 (Note 1)
|
—
|
|
|
—
|
|
|
—
|
|
|
16,475
|
|
|
—
|
|
|
16,475
|
|
|||||
Vesting of stock options for compensation
|
—
|
|
|
—
|
|
|
4,259,795
|
|
|
—
|
|
|
—
|
|
|
4,259,795
|
|
|||||
Exercise of stock options
|
131,051
|
|
|
131
|
|
|
232,285
|
|
|
—
|
|
|
—
|
|
|
232,416
|
|
|||||
Issuance of common stock for vested RSAs
|
1,075,893
|
|
|
1,069
|
|
|
(1,069
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
RSAs withheld to cover taxes
|
—
|
|
|
—
|
|
|
(306,120
|
)
|
|
—
|
|
|
—
|
|
|
(306,120
|
)
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(540,807
|
)
|
|
(540,807
|
)
|
|||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,447,933
|
)
|
|
—
|
|
|
(4,447,933
|
)
|
|||||
Balance-June 30, 2018
|
73,121,962
|
|
|
$
|
73,118
|
|
|
$
|
412,213,959
|
|
|
$
|
(225,867,346
|
)
|
|
$
|
(1,665,345
|
)
|
|
$
|
184,754,386
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(4,447,933
|
)
|
|
$
|
1,302,441
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
7,134,783
|
|
|
4,650,014
|
|
||
Stock-based compensation expense
|
4,259,795
|
|
|
3,502,350
|
|
||
Deferred taxes
|
(441,417
|
)
|
|
(444,230
|
)
|
||
(Gain) loss on foreign currency transactions
|
(107,259
|
)
|
|
11,429
|
|
||
Bad debt expense
|
290,426
|
|
|
26,000
|
|
||
Amortization of loan origination costs
|
164,313
|
|
|
34,342
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
2,141,980
|
|
|
5,862,051
|
|
||
Prepaid expenses, other current assets and other assets
|
(2,426,711
|
)
|
|
1,610,514
|
|
||
Accounts payable and accrued liabilities
|
2,344,109
|
|
|
161,914
|
|
||
Deferred revenue
|
686,332
|
|
|
(54,560
|
)
|
||
Net cash provided by operating activities
|
9,598,418
|
|
|
16,662,265
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of property and equipment
|
(256,391
|
)
|
|
(595,126
|
)
|
||
Acquisition of business, net of cash and restricted cash acquired
|
—
|
|
|
(65,802,792
|
)
|
||
Net cash used in investing activities
|
(256,391
|
)
|
|
(66,397,918
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from exercise of stock options
|
232,416
|
|
|
2,778,176
|
|
||
Proceeds from issuance of common stock
|
—
|
|
|
42,995,371
|
|
||
Proceeds from exercise of warrants
|
—
|
|
|
2,396,250
|
|
||
Payments of capital leases
|
(142,043
|
)
|
|
(139,541
|
)
|
||
Proceeds from long-term debt
|
—
|
|
|
15,000,000
|
|
||
Payments for restricted stock awards withheld for taxes
|
(306,120
|
)
|
|
(507,398
|
)
|
||
Payments of contingent consideration
|
(5,000,000
|
)
|
|
—
|
|
||
Payments on long-term debt
|
(7,500,000
|
)
|
|
(1,875,000
|
)
|
||
Net cash (used in) provided by financing activities
|
(12,715,747
|
)
|
|
60,647,858
|
|
||
Change in cash, cash equivalents, and restricted cash prior to effects of foreign currency exchange rate
|
(3,373,720
|
)
|
|
10,912,205
|
|
||
Effect of foreign currency exchange rate (translation)
|
(256,818
|
)
|
|
(11,429
|
)
|
||
Net (decrease) increase in cash, cash equivalents, and restricted cash
|
(3,630,538
|
)
|
|
10,900,776
|
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
25,052,995
|
|
|
22,246,015
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
21,422,457
|
|
|
$
|
33,146,791
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
1,110,448
|
|
|
$
|
140,911
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(235,272
|
)
|
|
$
|
856,595
|
|
|
$
|
(4,447,933
|
)
|
|
$
|
1,302,441
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding— basic
|
72,753,487
|
|
|
70,122,234
|
|
|
72,369,619
|
|
|
65,632,962
|
|
||||
Effect of dilutive securities
|
—
|
|
|
4,763,669
|
|
|
—
|
|
|
4,936,281
|
|
||||
Weighted-average shares outstanding— diluted
|
72,753,487
|
|
|
74,885,903
|
|
|
72,369,619
|
|
|
70,569,243
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic income (loss) per share
|
$
|
—
|
|
|
$
|
0.01
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.02
|
|
Diluted income (loss) per share
|
$
|
—
|
|
|
$
|
0.01
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.02
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Stock options
|
5,081,890
|
|
|
4,013,425
|
|
|
5,081,890
|
|
|
3,840,813
|
|
Unvested restricted stock awards
|
3,805,547
|
|
|
—
|
|
|
3,805,547
|
|
|
—
|
|
Unvested performance stock awards
|
1,046,350
|
|
|
—
|
|
|
1,046,350
|
|
|
—
|
|
Total
|
9,933,787
|
|
|
4,013,425
|
|
|
9,933,787
|
|
|
3,840,813
|
|
|
At October 19, 2017
|
||
Cash consideration
(1)
|
$
|
65,000,000
|
|
Contingent consideration
|
5,000,000
|
|
|
Net working capital adjustment
|
16,148,750
|
|
|
Total consideration
|
$
|
86,148,750
|
|
|
At October 19, 2017
|
||
Cash and cash equivalents
|
$
|
20,717,202
|
|
Accounts receivable
|
3,677,708
|
|
|
Prepaid expenses and other current assets
|
843,930
|
|
|
Property and equipment
|
1,014,716
|
|
|
Intangible assets
|
16,970,000
|
|
|
Accounts payable
|
(1,100,837
|
)
|
|
Accrued expenses and other current liabilities
|
(4,652,757
|
)
|
|
Deferred revenue
|
(1,594,641
|
)
|
|
Deferred tax liability
|
(3,862,337
|
)
|
|
Capital leases
|
(542,112
|
)
|
|
Net assets acquired
|
$
|
31,470,872
|
|
Goodwill
|
54,677,878
|
|
|
Total consideration
|
$
|
86,148,750
|
|
|
Fair Value
|
|
Weighted Average
Amortization Period (Years) |
||
Trademark
|
$
|
12,090,000
|
|
|
10.0
|
Software
|
1,335,000
|
|
|
2.0
|
|
Customer relationships
|
3,545,000
|
|
|
8.7
|
|
Total identifiable intangible assets
|
$
|
16,970,000
|
|
|
9.1
|
|
Quoted Prices
in Active
Markets for
Identical
Items
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
June 30, 2018
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Money market
|
$
|
1,390,083
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,390,083
|
|
Restricted cash
|
500,000
|
|
|
—
|
|
|
—
|
|
|
500,000
|
|
||||
Derivative asset
|
—
|
|
|
1,097,223
|
|
|
—
|
|
|
1,097,223
|
|
||||
Total assets
|
$
|
1,890,083
|
|
|
$
|
1,097,223
|
|
|
$
|
—
|
|
|
$
|
2,987,306
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative liability
|
$
|
—
|
|
|
$
|
2,126,536
|
|
|
$
|
—
|
|
|
$
|
2,126,536
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
2,126,536
|
|
|
$
|
—
|
|
|
$
|
2,126,536
|
|
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Money market
|
$
|
1,390,714
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,390,714
|
|
Restricted cash
|
894,551
|
|
|
—
|
|
|
—
|
|
|
894,551
|
|
||||
Derivative asset
|
—
|
|
|
739,606
|
|
|
—
|
|
|
739,606
|
|
||||
Total assets
|
$
|
2,285,265
|
|
|
$
|
739,606
|
|
|
$
|
—
|
|
|
$
|
3,024,871
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,000,000
|
|
|
$
|
5,000,000
|
|
Derivative liability
|
—
|
|
|
3,067,572
|
|
|
—
|
|
|
3,067,572
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
3,067,572
|
|
|
$
|
5,000,000
|
|
|
$
|
8,067,572
|
|
|
Contingent
Consideration |
||
Balance as of December 31, 2017
|
$
|
5,000,000
|
|
Payments
|
(5,000,000
|
)
|
|
Balance as of June 30, 2018
|
$
|
—
|
|
|
June 30, 2018
|
||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
Trademarks and domain names
|
$
|
34,879,427
|
|
|
$
|
(11,246,720
|
)
|
|
$
|
23,632,707
|
|
Customer relationships
|
13,972,303
|
|
|
(5,569,574
|
)
|
|
8,402,729
|
|
|||
Software
|
18,748,921
|
|
|
(8,441,535
|
)
|
|
10,307,386
|
|
|||
Total
|
$
|
67,600,651
|
|
|
$
|
(25,257,829
|
)
|
|
$
|
42,342,822
|
|
|
December 31, 2017
|
||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
Trademarks and domain names
|
$
|
35,204,638
|
|
|
$
|
(8,952,725
|
)
|
|
$
|
26,251,913
|
|
Customer relationships
|
14,067,457
|
|
|
(3,677,895
|
)
|
|
10,389,562
|
|
|||
Software
|
18,784,755
|
|
|
(6,706,802
|
)
|
|
12,077,953
|
|
|||
Total
|
$
|
68,056,850
|
|
|
$
|
(19,337,422
|
)
|
|
$
|
48,719,428
|
|
Year ending December 31,
|
Amortization
Expense
|
||
Remaining in 2018
|
$
|
5,529,149
|
|
2019
|
9,536,157
|
|
|
2020
|
7,580,775
|
|
|
2021
|
6,565,356
|
|
|
2022
|
3,974,978
|
|
|
Thereafter
|
9,156,407
|
|
|
Total
|
$
|
42,342,822
|
|
|
June 30, 2018
|
||
Balance at December 31, 2017
|
$
|
150,694,135
|
|
Foreign currency translation adjustments
|
(1,466,887
|
)
|
|
Balance at June 30, 2018
|
$
|
149,227,248
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Servers, computer equipment and software
|
$
|
14,231,248
|
|
|
$
|
14,044,505
|
|
Office furniture and equipment
|
553,013
|
|
|
521,233
|
|
||
Leasehold improvements
|
668,315
|
|
|
663,356
|
|
||
|
15,452,576
|
|
|
15,229,094
|
|
||
Less accumulated depreciation
|
(11,820,226
|
)
|
|
(10,704,976
|
)
|
||
Property and equipment - net
|
$
|
3,632,350
|
|
|
$
|
4,524,118
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Principal
|
$
|
48,750,000
|
|
|
$
|
56,250,000
|
|
Less: Debt discount, net
|
(448,581
|
)
|
|
(612,894
|
)
|
||
Net carrying amount
|
$
|
48,301,419
|
|
|
$
|
55,637,106
|
|
Less: current portion
|
15,000,000
|
|
|
15,000,000
|
|
||
Long-term debt, net
|
$
|
33,301,419
|
|
|
$
|
40,637,106
|
|
For the Years Ending December 31,
|
|
Capital
Leases
|
|
Operating
Leases
|
|
Cloud Data Storage
|
||||||
Remaining in 2018
|
|
$
|
117,315
|
|
|
$
|
2,259,011
|
|
|
$
|
63,165
|
|
2019
|
|
148,183
|
|
|
2,451,287
|
|
|
478,506
|
|
|||
2020
|
|
39,655
|
|
|
967,326
|
|
|
682,329
|
|
|||
2021
|
|
4,904
|
|
|
612,619
|
|
|
1,014,517
|
|
|||
2022
|
|
—
|
|
|
283,302
|
|
|
1,115,969
|
|
|||
Thereafter
|
|
—
|
|
|
—
|
|
|
1,227,566
|
|
|||
Total minimum lease payments
|
|
$
|
310,057
|
|
|
$
|
6,573,545
|
|
|
$
|
4,582,052
|
|
Less: amount representing interest
|
|
12,395
|
|
|
|
|
|
|||||
Total present value of minimum payments
|
|
297,662
|
|
|
|
|
|
|||||
Less: current portion of capital lease obligations
|
|
187,606
|
|
|
|
|
|
|||||
Long-term capital lease obligations
|
|
$
|
110,056
|
|
|
|
|
|
For the Years Ending December 31,
|
|
New Term Loan Facility
(1)
|
||
Remaining in 2018
|
|
$
|
7,500,000
|
|
2019
|
|
15,000,000
|
|
|
2020
|
|
26,250,000
|
|
|
Total minimum loan payments
|
|
$
|
48,750,000
|
|
(1)
|
Interest rates on the New Term Loan Facility are variable in nature, however, the Company is party to a fixed-pay amortizing interest rate swap having a remaining notional amount of
$33.8 million
and a non-amortizing interest rate cap with a notional amount of
$15.0 million
. If interest rates were to remain at the
June 30, 2018
level, we would receive interest payments of
$0.03 million
in
2018
,
$0.04 million
in
2019
and
$0.01 million
in
2020
of net settlements on the fixed-pay amortizing interest rate swap.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Sales and marketing
|
$
|
112,222
|
|
|
$
|
101,035
|
|
|
$
|
230,769
|
|
|
$
|
202,304
|
|
Product development and content
|
1,161,863
|
|
|
1,428,743
|
|
|
2,275,930
|
|
|
1,930,043
|
|
||||
General and administrative
|
816,785
|
|
|
838,414
|
|
|
1,753,096
|
|
|
1,370,003
|
|
||||
Total stock-based compensation expense
|
$
|
2,090,870
|
|
|
$
|
2,368,192
|
|
|
$
|
4,259,795
|
|
|
$
|
3,502,350
|
|
RSAs
|
|
Number of
RSAs
|
|
Weighted-Average
Stock Price
|
|||
Outstanding at December 31, 2017
|
|
—
|
|
|
$
|
—
|
|
Granted
|
|
1,522,034
|
|
|
4.18
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited or expired
|
|
—
|
|
|
—
|
|
|
Outstanding and unvested at June 30, 2018
|
|
1,522,034
|
|
|
$
|
4.18
|
|
Options
|
|
Number of
Stock
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual Life
|
|
Aggregate
Intrinsic Value
|
|||||
Outstanding at December 31, 2017
|
|
3,724,892
|
|
|
$
|
3.07
|
|
|
|
|
|
||
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
|
(131,051
|
)
|
|
1.77
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(95,867
|
)
|
|
3.49
|
|
|
|
|
|
|||
Outstanding at June 30, 2018
|
|
3,497,974
|
|
|
$
|
3.11
|
|
|
7.3
|
|
$
|
5,301,183
|
|
Exercisable at June 30, 2018
|
|
2,695,101
|
|
|
$
|
2.75
|
|
|
6.9
|
|
$
|
4,895,933
|
|
|
Six Months Ended June 30,
|
||
|
2018
|
|
2017
|
Risk-free interest rate
|
—%
|
|
1.89%
|
Expected term (in years)
|
0
|
|
6.0
|
Expected dividend yield
|
—
|
|
—
|
Expected volatility
|
—%
|
|
83%
|
RSAs
|
|
Number of
RSAs
|
|
Weighted-Average
Stock Price
|
|||
Outstanding at December 31, 2017
|
|
2,292,308
|
|
|
$
|
3.77
|
|
Granted
|
|
449,500
|
|
|
2.17
|
|
|
Vested
|
|
(954,529
|
)
|
|
3.72
|
|
|
Forfeited or expired
|
|
(209,600
|
)
|
|
2.99
|
|
|
Outstanding and unvested at June 30, 2018
|
|
1,577,679
|
|
|
$
|
3.45
|
|
PSUs
|
|
Number of
PSUs |
|
Weighted-Average
Stock Price |
|||
Outstanding at December 31, 2017
|
|
—
|
|
|
$
|
—
|
|
Granted
|
|
615,500
|
|
|
2.94
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited or expired
|
|
—
|
|
|
—
|
|
|
Outstanding at June 30, 2018
|
|
615,500
|
|
|
$
|
2.94
|
|
Options
|
|
Number of
Stock
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted Average
Remaining
Contractual Life
|
|
Aggregate Intrinsic
Value
|
|||||
Outstanding at December 31, 2017
|
|
1,194,081
|
|
|
$
|
4.08
|
|
|
|
|
|
||
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(96,000
|
)
|
|
5.06
|
|
|
|
|
|
|||
Outstanding at June 30, 2018
|
|
1,098,081
|
|
|
$
|
3.99
|
|
|
3.3
|
|
$
|
564,307
|
|
Exercisable at June 30, 2018
|
|
1,053,902
|
|
|
$
|
4.00
|
|
|
3.4
|
|
$
|
529,848
|
|
Options
|
|
Number of
Stock
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual Life
|
|
Aggregate
Intrinsic Value
|
|||||
Outstanding at December 31, 2017
|
|
734,168
|
|
|
$
|
5.18
|
|
|
|
|
|
||
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(248,332
|
)
|
|
5.16
|
|
|
|
|
|
|||
Outstanding at June 30, 2018
|
|
485,836
|
|
|
$
|
5.19
|
|
|
8.6
|
|
$
|
—
|
|
Exercisable at June 30, 2018
|
|
272,502
|
|
|
$
|
5.27
|
|
|
8.6
|
|
$
|
—
|
|
|
Six Months Ended June 30,
|
||
|
2018
|
|
2017
|
Risk-free interest rate
|
—%
|
|
1.89%
|
Expected term (in years)
|
0
|
|
6.0
|
Expected dividend yield
|
—
|
|
—
|
Expected volatility
|
—%
|
|
84%
|
RSAs
|
|
Number of
RSAs
|
|
Weighted-Average
Stock Price
|
|||
Outstanding at December 31, 2017
|
|
1,242,250
|
|
|
$
|
4.62
|
|
Granted
|
|
—
|
|
|
—
|
|
|
Vested
|
|
(240,540
|
)
|
|
5.36
|
|
|
Forfeited or expired
|
|
(295,877
|
)
|
|
5.39
|
|
|
Outstanding and unvested at June 30, 2018
|
|
705,833
|
|
|
$
|
4.05
|
|
|
|
Number of
|
|
At Inception
|
|
At June 30, 2018
|
Interest Rate Derivative
|
|
Instruments
|
|
Notional
|
|
Notional
|
Interest rate swaps
|
|
1
|
|
$45,000,000
|
|
$33,750,000
|
Interest rate caps
|
|
1
|
|
$15,000,000
|
|
$15,000,000
|
Foreign Currency Derivative
|
|
Number of Instruments
|
|
Pay Fixed Notional
|
|
Receive Fixed Notional
|
Cross-currency interest rate swap
|
|
1
|
|
€42,000,517
|
|
$48,750,000
|
|
|
|
|
(amortizing to €39,415,870 as of June 30, 2018)
|
|
(amortizing to $45,750,000 as of June 30, 2018)
|
|
|
|
|
Fair Value of Derivative Instruments
|
||||||||||||||
|
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||
Derivatives Designated as Hedging Instruments
|
|
Balance Sheet Location
|
|
Fair Value
|
|
Fair Value
|
|
Fair Value
|
|
Fair Value
|
||||||||
Interest rate products
|
|
Prepaid expenses and other current assets/Accrued liabilities
|
|
$
|
161,659
|
|
|
$
|
243
|
|
|
$
|
—
|
|
|
$
|
(71,915
|
)
|
Interest rate products
|
|
Other assets
|
|
225,848
|
|
|
84,058
|
|
|
—
|
|
|
—
|
|
||||
Cross currency contract
|
|
Prepaid expenses and other current assets
|
|
709,716
|
|
|
655,305
|
|
|
—
|
|
|
—
|
|
||||
Cross currency contract
|
|
Long-term derivative liability
|
|
—
|
|
|
—
|
|
|
(2,126,536
|
)
|
|
(2,995,657
|
)
|
||||
Total derivatives designated as hedging instruments
|
|
|
|
$
|
1,097,223
|
|
|
$
|
739,606
|
|
|
$
|
(2,126,536
|
)
|
|
$
|
(3,067,572
|
)
|
Derivatives in Subtopic 815-20 Hedging Relationships
|
|
Amount of Gain (Loss) Recognized in OCI on Derivatives
|
||||||||||||||
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
|
|
|
|
|
||||||||
Interest rate products
|
|
$
|
95,236
|
|
|
$
|
—
|
|
|
$
|
363,785
|
|
|
$
|
—
|
|
Cross currency contract
|
|
2,597,045
|
|
|
—
|
|
|
1,149,474
|
|
|
—
|
|
||||
Total
|
|
$
|
2,692,281
|
|
|
$
|
—
|
|
|
$
|
1,513,259
|
|
|
$
|
—
|
|
Location of Gain (Loss) Reclassified from Accumulated OCI into Income
|
|
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income
|
||||||||||||||
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Interest expense
|
|
$
|
17,297
|
|
|
$
|
—
|
|
|
$
|
(20,982
|
)
|
|
$
|
—
|
|
Interest expense
|
|
218,805
|
|
|
—
|
|
|
438,305
|
|
|
—
|
|
||||
Gain (loss) on foreign currency transactions
|
|
2,428,813
|
|
|
—
|
|
|
1,145,146
|
|
|
—
|
|
||||
Total
|
|
$
|
2,664,915
|
|
|
$
|
—
|
|
|
$
|
1,562,469
|
|
|
$
|
—
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2018
|
||||||||||||
|
Interest Expense
|
|
Foreign Currency Adjustment
|
|
Interest Expense
|
|
Foreign Currency Adjustment
|
||||||||
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded
|
$
|
(671,294
|
)
|
|
$
|
4,216
|
|
|
$
|
(1,278,980
|
)
|
|
$
|
107,259
|
|
Gain (loss) on cash flow hedging relationships in Subtopic 815-20
|
|
|
|
|
|
|
|
||||||||
Interest contracts
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income
|
$
|
236,103
|
|
|
$
|
2,428,813
|
|
|
$
|
417,324
|
|
|
$
|
1,145,146
|
|
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income as a result that a forecasted transaction is no longer probable of occurring
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2017
|
||||||||||||
|
Interest Expense
|
|
Foreign Currency Adjustment
|
|
Interest Expense
|
|
Foreign Currency Adjustment
|
||||||||
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded
|
$
|
(175,254
|
)
|
|
$
|
(9,229
|
)
|
|
$
|
(177,586
|
)
|
|
$
|
(11,429
|
)
|
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20
|
|
|
|
|
|
|
|
||||||||
Interest contracts
|
|
|
|
|
|
|
|
||||||||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income as a result that a forecasted transaction is no longer probable of occurring
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
ASC 606
|
|
ASC 605
|
|
Effect of Change
|
|
ASC 606
|
|
ASC 605
|
|
Effect of Change
|
||||||||||||
Income Statement
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues
|
$
|
42,801,745
|
|
|
$
|
42,800,163
|
|
|
$
|
1,582
|
|
|
$
|
80,439,538
|
|
|
$
|
80,439,039
|
|
|
$
|
499
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2018
|
|
2017
(1)
|
|
2018
|
|
2017
(1)
|
||||||||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
User pay revenue
|
$
|
25,570,553
|
|
|
59.7
|
%
|
|
$
|
8,144,890
|
|
|
26.0
|
%
|
|
$
|
47,976,083
|
|
|
59.6
|
%
|
|
$
|
9,760,165
|
|
|
19.0
|
%
|
Advertising
|
17,231,192
|
|
|
40.3
|
%
|
|
23,184,578
|
|
|
74.0
|
%
|
|
32,463,455
|
|
|
40.4
|
%
|
|
41,628,100
|
|
|
81.0
|
%
|
||||
Total revenue
|
$
|
42,801,745
|
|
|
100.0
|
%
|
|
$
|
31,329,468
|
|
|
100.0
|
%
|
|
$
|
80,439,538
|
|
|
100.0
|
%
|
|
$
|
51,388,265
|
|
|
100.0
|
%
|
•
|
Liquidity;
|
•
|
Capital expenditures;
|
•
|
Opportunities for our business;
|
•
|
Growth of our business; and
|
•
|
Anticipations and expectations regarding mobile usage and monetization.
|
|
For the Quarter Ended
|
||||
|
June 30,
|
||||
|
2018
|
|
2017
|
||
DAU
|
4,747,788
|
|
|
3,432,355
|
|
•
|
Total revenue was
$42.8 million
for the
second quarter
of
2018
, up
36.6%
from
$31.3 million
in the
second quarter
of
2017
.
|
•
|
Net loss for the
second quarter
of
2018
was
$0.2 million
. Adjusted EBITDA was
$7.6 million
for the
second quarter
of
2018
. (See the important discussion about the presentation of non-GAAP financial measures, and reconciliation from the most directly comparable GAAP financial measures, below.)
|
•
|
Cash and cash equivalents totaled
$20.9 million
at
June 30, 2018
.
|
•
|
Number of MAUs and DAUs:
We believe our ability to grow web and mobile MAUs and DAUs affects our revenue and financial results by influencing the number of advertisements we are able to show, the value of those advertisements, and the volume of subscriptions and in-app purchases, as well as our expenses and capital expenditures.
|
•
|
User Engagement:
We believe changes in user engagement patterns affect our revenue and financial performance. Specifically, the number of visits and the amount of time spent by each MAU or DAU generates affects the number of advertisements we are able to display and therefore the rate at which we are able to monetize our active user base. In addition, the number of users that make in-app purchases and the amounts that they purchase directly impact our revenue. We continue to create new features and enhance existing features to drive additional engagement. The percent of MAU and DAU that engage with our video products and their conversion to paying users also affects the amount of in-app purchase revenue we are able to earn.
|
•
|
Advertising Rates:
We believe our revenue and financial results are materially dependent on industry trends, and any changes to the revenue we earn per thousand advertising impressions (“CPM”) could affect our revenue and financial results. In 2017, we experienced declining advertising rates, which negatively affected out revenue. We expect to continue investing in new types of advertising and new placements. Additionally, we are prioritizing initiatives that generate revenue directly from users, including new in-app purchases products and a premium subscription product, in part to reduce our dependency on advertising revenue.
|
•
|
User Geography:
The geography of our users influences our revenue and financial results because we currently monetize users in distinct geographies at varying average rates. For example, ARPU in the U.S. and Canada is significantly higher than in Latin America.
|
•
|
New User Sources:
The percentage of our new users that are acquired through inorganic, paid sources impacts our financial performance, specifically with regard to ARPU for web and mobile. Inorganically acquired users tend to have lower engagement rates, tend to generate fewer visits and ad impressions and to be less likely to make in-app purchases. When paid marketing campaigns are ongoing, our overall usage and traffic increases due to the influx of inorganically acquired users, but the rate at which we monetize the average active user overall declines as a result.
|
•
|
Ad Inventory Management:
Our revenue trends are affected by advertisement inventory management changes affecting the number, size, or prominence of advertisements we display. In general, more prominently displayed advertising units generate more revenue per impression. Our Social Theater campaign expenses are materially dependent on the percentage of Social Theater campaigns that run on MeetMe versus the percentage that run on other networks. We work to maximize the share of Social Theater campaigns that run on MeetMe and run campaigns on other networks only when necessary.
|
•
|
Google Play Store and Apple App Store:
Our mobile applications are distributed through the Google Play Store and the Apple App Store. Our business will suffer if we are unable to maintain good relationships with Google and Apple, if their terms and conditions or pricing change to our detriment, if we violate, or either company believes that we have violated, its terms and conditions, or if either of these platforms are unavailable for a prolonged period of time.
|
•
|
Increased Social Theater Competition:
A significant portion of the revenue generated by the Social Theater is derived from advertising campaigns, powered by Social Theater technology, that run on networks other than The Meet Group networks. A recent increase in competitors offering similar technology solutions, and in some cases their own cross-platform distribution networks, has made it more difficult to compete on price and win business. We expect this downward pressure on price to continue and impact our operating results in the future.
|
•
|
Seasonality:
Historically, advertising spending has traditionally been seasonal with a peak in the fourth quarter of each year. With the decline in advertising rates in 2017, we did not experience this seasonality consistent with prior years. We believe that this seasonality in advertising spending affects our quarterly results, which historically have reflected a growth in advertising revenue between the third and fourth quarters and a decline in advertising spending between the fourth and subsequent first and second quarters each year. Growth trends in web and mobile MAUs and DAUs affect our revenue and financial results by influencing the number of advertisements we are able to show, the value of those advertisements, the volume of payments transactions, as well as our expenses and capital expenditures.
|
•
|
Business Combinations:
Acquisitions have been an important part of our growth strategy. During the two years in the period ended December 31, 2017, we acquired three companies (Skout, if(we) and Lovoo), representing four significant brands for our portfolio (Skout, Tagged, Hi5 and Lovoo). Our ability to integrate these apps into our portfolio will impact our financial performance. As a consequence of the contributions of these businesses and acquisition-related expenses, our consolidated results of operations may not be comparable between periods.
|
|
Three Months Ended June 30,
|
|
Change From Prior Year
|
|||||||||||
|
2018
|
|
2017
|
|
($)
|
|
%
|
|||||||
Revenues
|
$
|
42,801,745
|
|
|
$
|
31,329,468
|
|
|
$
|
11,472,277
|
|
|
36.6
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|||||||
Sales and marketing
|
7,753,486
|
|
|
4,599,842
|
|
|
3,153,644
|
|
|
68.6
|
%
|
|||
Product development and content
|
24,411,288
|
|
|
16,526,905
|
|
|
7,884,383
|
|
|
47.7
|
%
|
|||
General and administrative
|
5,154,103
|
|
|
5,160,799
|
|
|
(6,696
|
)
|
|
(0.1
|
)%
|
|||
Depreciation and amortization
|
3,505,180
|
|
|
2,965,175
|
|
|
540,005
|
|
|
18.2
|
%
|
|||
Acquisition and restructuring costs
|
1,036,602
|
|
|
3,769,425
|
|
|
(2,732,823
|
)
|
|
(72.5
|
)%
|
|||
Total operating costs and expenses
|
41,860,659
|
|
|
33,022,146
|
|
|
8,838,513
|
|
|
26.8
|
%
|
|||
Income (loss) from operations
|
941,086
|
|
|
(1,692,678
|
)
|
|
2,633,764
|
|
|
155.6
|
%
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|||||||
Interest income
|
2,742
|
|
|
1,400
|
|
|
1,342
|
|
|
95.9
|
%
|
|||
Interest expense
|
(671,294
|
)
|
|
(175,254
|
)
|
|
(496,040
|
)
|
|
(283.0
|
)%
|
|||
Gain (loss) on foreign currency adjustment
|
4,216
|
|
|
(9,229
|
)
|
|
13,445
|
|
|
145.7
|
%
|
|||
Other
|
28,571
|
|
|
—
|
|
|
28,571
|
|
|
100.0
|
%
|
|||
Total other expense
|
(635,765
|
)
|
|
(183,083
|
)
|
|
(452,682
|
)
|
|
(247.3
|
)%
|
|||
Income (loss) before income tax benefit (expense)
|
305,321
|
|
|
(1,875,761
|
)
|
|
2,181,082
|
|
|
116.3
|
%
|
|||
Income tax benefit (expense)
|
(540,593
|
)
|
|
2,732,356
|
|
|
(3,272,949
|
)
|
|
(119.8
|
)%
|
|||
Net income (loss)
|
$
|
(235,272
|
)
|
|
$
|
856,595
|
|
|
$
|
(1,091,867
|
)
|
|
(127.5
|
)%
|
|
Three Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||||
User pay revenue
|
$
|
25,570,553
|
|
|
59.7
|
%
|
|
$
|
8,144,890
|
|
|
26.0
|
%
|
Advertising
|
17,231,192
|
|
|
40.3
|
%
|
|
23,184,578
|
|
|
74.0
|
%
|
||
Total revenue
|
$
|
42,801,745
|
|
|
100.0
|
%
|
|
$
|
31,329,468
|
|
|
100.0
|
%
|
|
Three Months Ended June 30,
|
|
Change from Prior Year
|
||||||||
|
2018
|
|
2017
|
|
($)
|
||||||
Sales and marketing
|
$
|
112,222
|
|
|
$
|
101,035
|
|
|
$
|
11,187
|
|
Product development and content
|
1,161,863
|
|
|
1,428,743
|
|
|
(266,880
|
)
|
|||
General and administrative
|
816,785
|
|
|
838,414
|
|
|
(21,629
|
)
|
|||
Total stock-based compensation expense
|
$
|
2,090,870
|
|
|
$
|
2,368,192
|
|
|
$
|
(277,322
|
)
|
|
Six Months Ended June 30,
|
|
Change From Prior Year
|
|||||||||||
|
2018
|
|
2017
|
|
($)
|
|
%
|
|||||||
Revenues
|
$
|
80,439,538
|
|
|
$
|
51,388,265
|
|
|
$
|
29,051,273
|
|
|
56.5
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|||||||
Sales and marketing
|
14,801,479
|
|
|
9,705,350
|
|
|
5,096,129
|
|
|
52.5
|
%
|
|||
Product development and content
|
46,512,825
|
|
|
24,984,399
|
|
|
21,528,426
|
|
|
86.2
|
%
|
|||
General and administrative
|
10,623,281
|
|
|
8,023,226
|
|
|
2,600,055
|
|
|
32.4
|
%
|
|||
Depreciation and amortization
|
7,134,783
|
|
|
4,650,014
|
|
|
2,484,769
|
|
|
53.4
|
%
|
|||
Acquisition and restructuring
|
4,386,553
|
|
|
5,269,854
|
|
|
(883,301
|
)
|
|
(16.8
|
)%
|
|||
Total operating costs and expenses
|
83,458,921
|
|
|
52,632,843
|
|
|
30,826,078
|
|
|
58.6
|
%
|
|||
Income (loss) from operations
|
(3,019,383
|
)
|
|
(1,244,578
|
)
|
|
(1,774,805
|
)
|
|
(142.6
|
)%
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|||||||
Interest income
|
9,950
|
|
|
3,970
|
|
|
5,980
|
|
|
150.6
|
%
|
|||
Interest expense
|
(1,278,980
|
)
|
|
(177,586
|
)
|
|
(1,101,394
|
)
|
|
(620.2
|
)%
|
|||
Gain (loss) on foreign currency transactions
|
107,259
|
|
|
(11,429
|
)
|
|
118,688
|
|
|
1,038.5
|
%
|
|||
Other
|
21,627
|
|
|
—
|
|
|
21,627
|
|
|
100.0
|
%
|
|||
Total other expense
|
(1,140,144
|
)
|
|
(185,045
|
)
|
|
(955,099
|
)
|
|
(516.1
|
)%
|
|||
Income (loss) before income tax benefit
|
(4,159,527
|
)
|
|
(1,429,623
|
)
|
|
(2,729,904
|
)
|
|
(191.0
|
)%
|
|||
Income tax benefit (expense)
|
(288,406
|
)
|
|
2,732,064
|
|
|
(3,020,470
|
)
|
|
(110.6
|
)%
|
|||
Net income (loss)
|
$
|
(4,447,933
|
)
|
|
$
|
1,302,441
|
|
|
$
|
(5,750,374
|
)
|
|
(441.5
|
)%
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
||||||
User pay revenue
|
$
|
47,976,083
|
|
|
59.6
|
%
|
|
$
|
9,760,165
|
|
|
19.0
|
%
|
Advertising
|
32,463,455
|
|
|
40.4
|
%
|
|
41,628,100
|
|
|
81.0
|
%
|
||
Total revenue
|
$
|
80,439,538
|
|
|
100.0
|
%
|
|
$
|
51,388,265
|
|
|
100.0
|
%
|
|
Six Months Ended June 30,
|
|
Change from Prior Year
|
||||||||
|
2018
|
|
2017
|
|
($)
|
||||||
Sales and marketing
|
$
|
230,769
|
|
|
$
|
202,304
|
|
|
$
|
28,465
|
|
Product development and content
|
2,275,930
|
|
|
1,930,043
|
|
|
345,887
|
|
|||
General and administrative
|
1,753,096
|
|
|
1,370,003
|
|
|
383,093
|
|
|||
Total stock-based compensation expense
|
$
|
4,259,795
|
|
|
$
|
3,502,350
|
|
|
$
|
757,445
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Net cash provided by operating activities
|
$
|
9,598,418
|
|
|
$
|
16,662,265
|
|
Net cash used in investing activities
|
(256,391
|
)
|
|
(66,397,918
|
)
|
||
Net cash (used in) provided by financing activities
|
(12,715,747
|
)
|
|
60,647,858
|
|
||
|
$
|
(3,373,720
|
)
|
|
$
|
10,912,205
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Cash and cash equivalents
|
$
|
20,922,457
|
|
|
$
|
24,158,444
|
|
Total assets
|
$
|
263,739,373
|
|
|
$
|
275,344,771
|
|
Percentage of total assets
|
7.9
|
%
|
|
8.8
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
ADJUSTED EBITDA
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss)
|
$
|
(235,272
|
)
|
|
$
|
856,595
|
|
|
$
|
(4,447,933
|
)
|
|
$
|
1,302,441
|
|
Interest expense
|
671,294
|
|
|
175,254
|
|
|
1,278,980
|
|
|
177,586
|
|
||||
Income tax (benefit) expense
|
540,593
|
|
|
(2,732,356
|
)
|
|
288,406
|
|
|
(2,732,064
|
)
|
||||
Depreciation and amortization
|
3,505,180
|
|
|
2,965,175
|
|
|
7,134,783
|
|
|
4,650,014
|
|
||||
Stock-based compensation expense
|
2,090,870
|
|
|
2,368,192
|
|
|
4,259,795
|
|
|
3,502,350
|
|
||||
Acquisition and restructuring
|
1,036,602
|
|
|
3,769,425
|
|
|
4,386,553
|
|
|
5,269,854
|
|
||||
(Gain) loss on foreign currency transactions
|
(4,216
|
)
|
|
9,229
|
|
|
(107,259
|
)
|
|
11,429
|
|
||||
ADJUSTED EBITDA
|
$
|
7,605,051
|
|
|
$
|
7,411,514
|
|
|
$
|
12,793,325
|
|
|
$
|
12,181,610
|
|
|
|
|
|
|
|
|
|
|
|
Filed or
Furnished
Herewith
|
|
|
|
|
Incorporated by Reference
|
|
|||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date
|
|
Number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Employee Performance Share Award Agreement
|
|
|
|
|
|
|
|
Filed
|
|
|
Certification of Principal Executive Officer (Section 302)
|
|
|
|
|
|
|
|
Filed
|
|
|
Certification of Principal Financial Officer (Section 302)
|
|
|
|
|
|
|
|
Filed
|
|
|
Certification of Principal Executive Officer (Section 906)
|
|
|
|
|
|
|
|
Furnished*
|
|
|
Certification of Principal Financial Officer (Section 906)
|
|
|
|
|
|
|
|
Furnished*
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
**
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
**
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
**
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
**
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
**
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
**
|
|
THE MEET GROUP, INC.
|
|
|
|
|
August 2, 2018
|
By:
|
/s/Geoffrey Cook
|
|
|
Geoffrey Cook
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
August 2, 2018
|
By:
|
/s/ James Bugden
|
|
|
James Bugden
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of The Meet Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15I and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Geoffrey Cook
|
Geoffrey Cook
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of The Meet Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ James Bugden
|
James Bugden
Chief Financial Officer
(Principal Financial Officer)
|
1.
|
The
quarterly
report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
|
2.
|
The information contained in the
quarterly
report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Geoffrey Cook
|
Geoffrey Cook
|
Chief Executive Officer
|
(Principal Executive Officer)
|
1.
|
The
quarterly
report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
|
2.
|
The information contained in the
quarterly
report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ James Bugden
|
James Bugen
|
Chief Financial Officer
|
(Principal Financial Officer)
|