CST: 26/10/2016 04:15:21   

Spiral Toys Reports 2015 Results

209 Days ago

LOS ANGELES, CA--(Marketwired - Mar 30, 2016) - Spiral Toys, Inc.(OTCQB: STOY), a leading provider of mobile-connected, wireless entertainment technology, reported results for the full year ended December 31, 2015.

2015 Highlights

  • Revenue totaled $5.96 million compared to $269,000 for 2014, an increase of over 20 times.
  • Spiral's flagship product, CloudPets, sold at national retailers including Walmart, Target, Toys"R"Us and Bed Bath & Beyond.
  • Manufactured and shipped 1.3 million CloudPet components to third-party contractors.
  • Generated $251,000 of royalty fees based on shipments of CloudPets from Spiral Toy's distributors to retailers.

Management Commentary
"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.

About Spiral
Spiral Toys, Inc. (OTCQB: STOY) is a California-based company with a business, founded by a former senior executive of Disney and Sony, focused on developing and marketing products and mobile applications in the mobile-connected space. Spiral's mobile-connected entertainment platform connects physical items to today's top mobile devices through wireless technologies, creating a new kind of interactive user experience.

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.

Forward-Looking Statements
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.

Consolidated Balance Sheets
    For the Years Ended  
    December 31,  
    2015     2014  
CURRENT ASSETS                
  Cash   $ 180,743     $ 245,091  
  Accounts receivable, net of allowance of $48,191     1,539,392       -  
  Prepaid Expense     23,895       -  
    Total Current Assets     1,744,030       245,091  
OTHER ASSETS                
  Security deposit     6,800          
  Goodwill (Note 7)     -       -  
    Total Other Assets     6,800       -  
    TOTAL ASSETS   $ 1,750,830     $ 245,091  
  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  
  Deferred revenue     -       -  
  Interest payable     -       21,079  
    Total Current Liabilities     1,557,488       293,866  
    TOTAL 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 )     -  
  Accumulated deficit     (6,691,470 )     (4,298,628 )
    TOTAL STOCKHOLDERS' (DEFICIT)     193,342       (48,775 )
    TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)   $ 1,750,830     $ 245,091  
Consolidated Statements of Operations  
    For the Year Ended  
    December 31,  
    2015     2014  
  Product sales, net   $ 5,684,717     $ 194,321  
  Royalty income     250,679       -  
  Consulting- product development     20,572       74,978  
    Total Sales     5,955,968       269,299  
COST OF GOODS SOLD     4,946,397       -  
GROSS MARGIN     1,009,571       269,299  
OPERATING EXPENSES                
  Media costs     -       61,448  
  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 )
OTHER EXPENSE                
  Interest expense     (52,521 )     (54,065 )
  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 )
  Foreign currency translation loss     2,304       -  
COMPREHENSIVE LOSS   $ (2,390,538 )   $ (3,460,207 )
  BASIC AND DILUTED                
    Continuing operations   $ (0.05 )   $ (0.12 )
    Discontinued operations   $ (0.00 )   $ (0.00 )
      Total   $ (0.05 )   $ (0.12 )
Weighted average common shares outstanding                
  BASIC AND DILUTED     45,844,498       29,413,197  

Company Contact:
Akio Ariura
Spiral Toys, Inc.
Tel (800) 598-6845
Email Contact

Investor Relations:
Michael Koehler
Liolios Group, Inc.
Tel (949) 574-3860
Email Contact