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LOS ANGELES, CA--(Marketwired - Mar 30, 2016) - Spiral Toys, Inc.(
"2015 was a significant year in the development of Spiral Toys," commented Spiral Toys' CEO Mark Meyers. "The successful launch of our first commercial product, CloudPets, validates our technology platform and business model, which resulted in our annual revenue falling within our guidance range."
"For CloudPets, we manufactured and sold only the technological components of the product, which followed our licensing model. For our 2016 products, we will own the entire physical product, which we expect to increase our top line on a per unit basis, as well as expand our gross profit per product by up to five times. Further, this gives us more control of the marketing and distribution of our products.
"Launching products in today's market requires heavy analytics and multiple channels to efficiently reach our targeted customers. We believe Spiral is not only a technology company in terms of our products but also in how we approach the market, targeting potential customers with the latest and best technology.
"In fact, we will be initiating the digital marketing campaign for Wiggy with Google and Indri in April, which will launch on Google, Facebook, YouTube, and other digital advertising platforms. TubeFriends will also be launched using Spiral's savvy sales and marketing approach.
"Overall, we now expect to bring a total of four new products to market in 2016, including the April launch of Wiggy and TubeFriends' launch later in the second quarter. With our expanded product portfolio, improved marketing approach and aggressive sales strategy our goal is to be cash flow break even by the end of the third quarter of 2016."
2015 Financial Overview
Revenue for 2015 totaled $5.96 million, which is up from $269,000 in 2014. The increases were driven by the production launch of our CloudPets line during the second quarter of 2015 and continued shipments throughout the remainder of the year.
Gross margin was 16.9% for 2015, generating gross profit of $1.0 million. During 2014 the company did not sell physical products and therefore a gross margin or gross profit comparison is not applicable. Going forward, gross margins related to its product sales are expected to be higher than 2015 as Spiral anticipates owning more of processes involved in the production and sale of their toys including advertising, manufacturing and distribution.
Total operating expenses for 2015 totaled $3.4 million, which compares to $3.7 million for 2014. The decrease was driven by a non-cash charge impairment of goodwill recognized in 2014, which was offset by an increase in development and media costs, legal and professional fees and salaries related to our increased headcount during 2015.
Net loss from continuing operations for 2015 totaled $2.4 million or $(0.05) per basic and diluted share, which compares to a loss of $3.4 million or $(0.12) per basic and diluted share for 2014.
As of December 31, 2015, working capital totaled $187,000, which compared to $913,000 at September 30, 2015. The company is currently in process of addressing its working capital in order to execute on its growth strategy for 2016.
Spiral Toys, Inc. (
Spiral sells its products worldwide, and is developing additional applications based on its platform technology for several different verticals within the entertainment industry. Spiral collects revenue on both the physical purchase of goods and the sale of digital content through Apple's App Store and the Google Marketplace. The company also acts as co-developer with major entertainment studios. For more information, visit www.spiraltoys.com.
All statements in this press release that are not based on historical fact are "forward-looking statements." The terms "expects", "would", "will", "believes", and similar terms are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by Spiral Toys in light of its experience and its perception of current conditions and expected future developments, as well as other factors that Spiral Toys believes are appropriate in the circumstances. Many factors could cause Spiral Toys' actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. These risk factors and others relating to Spiral Toys that may cause actual results to differ are set forth in Spiral Toys' periodic filings with the U.S. Securities and Exchange Commission (copies of which filings may be obtained at www.sec.gov). These factors should be considered carefully, and readers should not place undue reliance on Spiral Toys' forward-looking statements. Spiral Toys has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
|SPIRAL TOYS, INC.|
|Consolidated Balance Sheets|
|For the Years Ended|
|Accounts receivable, net of allowance of $48,191||1,539,392||-|
|Total Current Assets||1,744,030||245,091|
|Goodwill (Note 7)||-||-|
|Total Other Assets||6,800||-|
|LIABILITIES AND STOCKHOLDERS' DEFICIT|
|Accounts payable and accrued expenses||$||1,557,488||$||115,049|
|Convertible short term notes||-||42,000|
|Current maturities of notes payable - related parties||-||115,738|
|Total Current Liabilities||1,557,488||293,866|
|Preferred stock: par value $0.001, 1,000,000 shares authorized; zero shares issued and outstanding||-||-|
|Common stock: par value $0.001, 74,000,000 shares authorized; 48,833,919 and 41,336,667 shares issued and outstanding, respectively||48,833||41,337|
|Additional paid-in capital||6,838,283||4,208,516|
|Accumulated other comprehensive loss||(2,304||)||-|
|TOTAL STOCKHOLDERS' (DEFICIT)||193,342||(48,775||)|
|TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)||$||1,750,830||$||245,091|
|SPIRAL TOYS, INC.|
|Consolidated Statements of Operations|
|For the Year Ended|
|Product sales, net||$||5,684,717||$||194,321|
|Consulting- product development||20,572||74,978|
|COST OF GOODS SOLD||4,946,397||-|
|Product development costs||854,414||82,368|
|Legal and professional expenses||1,069,771||243,702|
|Salaries and wages and consulting||1,120,810||350,391|
|General and administrative||278,338||73,577|
|Bad debt expense||48,191|
|Impairment of goodwill||-||2,840,203|
|Total Operating Expenses||3,371,524||3,651,689|
|LOSS FROM OPERATIONS||(2,361,953||)||(3,382,390||)|
|Loss on conversion||(45,360||)||-|
|Gain on forgiveness of debt||21,000||-|
|Gain on settlement of notes payable||45,992||-|
|Total Other Expense||(30,889||)||(54,065||)|
|LOSS BEFORE INCOME TAX PROVISION||(2,392,842||)||(3,436,455||)|
|Income tax provision||-||-|
|NET LOSS FROM CONTINUING OPERATIONS||(2,392,842||)||(3,436,455||)|
|Net loss attributable to Discontinued operations||-||(23,752||)|
|NET INCOME (LOSS)||$||(2,392,842||)||$||(3,460,207||)|
|OTHER COMPREHENSIVE LOSS|
|Foreign currency translation loss||2,304||-|
|NET INCOME (LOSS) PER COMMON SHARE|
|BASIC AND DILUTED|
|Weighted average common shares outstanding|
|BASIC AND DILUTED||45,844,498||29,413,197|