ePals 2013 Third Quarter Results
WASHINGTON, DC--(Marketwired - Nov 27, 2013) - ePals Corporation
(TSX-VENTURE: SLN) ("ePals"), an education media company and a
leading Global Learning Network, today released its operating
results for the third quarter and nine months ended September 30,
2013. Results were prepared by management in accordance with
International Financial Reporting Standards ("IFRS"). All figures
are in U.S. dollars unless otherwise stated.
Conference call today at 10:00 a.m. Eastern Time
To participate in the call, please dial +1-719-325-2308 or
1-888-438-5525
approximately 10 minutes prior to the conference call, and enter
passcode 2070121. A recording of the conference call will be
available through December 15, 2013 by dialing +1-719-457-0820 or
1-888-203-1112 and
entering the passcode 2070121.
Third Quarter 2013 Highlights
- Revenue increased 23% year-over-year
- Media revenue increased 26% year-over-year lead by a licensing
revenue increase of over 200%
- 20% of media subscriptions added during the quarter were
digital or hybrid (digital plus print)
- Successful China school pilot completed with thousands of
students
- Expense reduction efforts beginning to take effect
- Registered users increased 28% year-over-year to 12.4
million
In the third quarter, prioritized focus on the Company's current
revenue producing business lines grew media subscription and
content licensing revenue. Total revenue increased 23%
year-over-year to $3.7 million, led by a 25% increase in
subscription and licensing revenue from the media business. The
higher media subscription revenue was driven by a net 7% increase
in the number of media subscriptions during the period which
included a 30% improvement in retention rates year-over-year. ePals
new high quality print and digital products increased the number of
active customers 18%.
Media content licensing revenue increased over 200% in the third
quarter of 2013 compared to the prior year period due to new
licensing contracts with both new and existing customers. Media
content licensing which has low direct costs, continues to grow
significantly and will continue to be a primary point of focus for
the media business. For the nine months ended September 30, 2013,
media content licensing revenue has increased 98%, compared to the
prior year period, which is the result of utilizing existing media
related assets to generate new and improved licensing deals through
an improved sales strategy.
During the quarter, the Company committed additional resources
to improve platform product quality and to enhance and broaden the
range of distribution channels for media content, specifically
focusing on making content available through various mobile
devices. ePals conversion of digital bundles to "all access"
enabled media subscribers to obtain the publications on any
platform that is serviced by ePals Media. This has resulted in
increasing adoption of digital products, with over 20% of
subscriptions purchased in digital or hybrid (digital plus print)
formats in the third quarter of 2013, compared to 5% in the first
quarter of 2013. Additionally, the Company has made progress with
mobile applications and increased the number of content brands
available in a digital format, including the development of iPhone
and native Android apps for a number of the Company's popular
brands. As of November 11, 2013, ePals titles made up five of the
top ten highest grossing iPad apps for children's magazines.
Expense reduction initiatives have been implemented to reduce
costs not associated with driving near-term revenue opportunities.
The most significant reductions have been within the U.S.
enterprise platform sales business as the Company continues to move
away from a direct platform only sales force and expand its
existing indirect channels and related product bundles. The result
is a more variable cost structure versus the fixed cost structure
of a direct sales force. In connection with this change, ePals
reduced its investment in certain marketing costs, such as trade
shows, that were previously incurred in connection with the direct
sales force. In addition to these restructurings, the Company's
cost reduction initiatives are beginning to take hold and as a
result, the Company estimates that it will reduce fixed costs by
more than 20% by the end of 2013 from Q1 levels.
During the third quarter, ePals continued to develop its
application programming interfaces ("APIs") to further enable
third-party developers to build products on top of the ePals
platform which should enhance revenue opportunities as well as
improve product features and functionality.
ePals continued executing on its international efforts in China
and Europe with the translation of Chinese-language versions of the
Company's publications including such as Babybug®, Ladybug®,
Spider®, Click®, Appleseeds®, and Ask®. See ePals press release
dated November 27, 2013 regarding the launch of commercial
operations in China. In Europe ePals now has nine content partners
that will enable more international content in the global
community, which includes two new partners signed during Q3.
Q3 Financial Review
Refer to the attached financial statements for ePals'
consolidated financial data for the three and nine months ended
September 30, 2013 and 2012.
For the three months ended September 30, 2013, ePals had total
revenue of $3.7 million. Media revenue increased $0.8 million, or
26% year-over-year, due primarily to an increase in licensing,
subscription and advertising revenue, while platform revenue
declined due to a shift in strategy related to ePals' platform
business. For the nine months ended September 30, 2013, ePals had
total revenue of $11.7 million and media revenue increased $1.8
million, or 18% year-over-year, for the reasons discussed
above.
Operating expenses for the three months ended September 30, 2013
were $9.9 million, an increase of $2.3 million or 30% from the
prior year period. During the third quarter of 2012, there was a
non-cash gain of $2.1 million related to the change in estimated
fair value of the acquisition liabilities which reduced total
operating expenses for the period. Technology, development &
operational support costs increased by $0.9 million or 28% from the
prior period. This increase was due primarily to additional
expenditures to support expansion of international operations in
Europe and China, costs related to the development and enhancement
of ePals' digital commerce marketplace launched in July 2013 and an
increase in revenue sharing expenses created by an increase in
media advertising revenue. Comparing the three months ended
September 30, 2013 to same period in 2012, sales & marketing
expenses increased by approximately $0.7 million due to higher
agency commissions associated with the sale of subscriptions and
increased expenses related to the consumer catalog for the media
business. These increases are partially offset by a decrease in
acquisition investigation expenses related to less activity in 2013
compared to the legal work related to the negotiation of agreements
for ePals' joint venture in China and other business acquisitions
contemplated in connection with European initiatives in 2012.
Operating expenses for the nine months ended September 30, 2013
were $29.5 million, an increase of $6.3 million or 27% from the
prior year period. As discussed above, the $2.1 million non-cash
gain during 2012 reduced the total operating expenses for the
period. Technology, development & operational support costs
increased by approximately $3.2 million, while sales &
marketing expenses increased by approximately $1.8 million.
The net loss from operations for the quarter was $6.1 million
versus $4.6 million in the prior year period, and $6.4 million in
the second quarter of 2013. During the third quarter of 2012, in
addition to the $2.1 million gain previously discussed, there were
$0.8 million in acquisition investigation expenses. Without these
transactions, the net loss from operations would have been $6.0
million for the third quarter of 2012.
The net loss for the three months ended September 30, 2013 was
$7.6 million, or ($0.04) per share, compared to a net loss of $4.6
million, or ($0.03) per share for the three months ended September
30, 2012. The comparable net loss for the third quarter of 2012,
after removing the non-cash gain of $2.1 million and the $0.8
million in acquisition investigation expenses previously discussed,
is $6.0 million. The net loss for the nine months ended September
30, 2013 was $17.0 million, or ($0.10) per share, compared to a net
loss of $12.7 million, or ($0.10) per share for the nine months
ended September 30, 2012. In addition to the drivers previously
discussed, these increases in net loss year-over-year are primarily
due to increased interest expense, with an offsetting impact from
gains from the change in fair value of the Company's derivatives in
2013.
As of November 15, 2013, ePals had a total of 277,184,634 common
shares outstanding, of which 105,788,690 are voting common shares
and 171,395,944 are restricted voting common shares.
Important factors, including those discussed in ePals'
regulatory filings (www.sedar.com), could cause actual results to
differ from ePals' expectations and those differences may be
material. ePals' financial statements for the three and nine months
ended September 30, 2013, together with the related management's
discussion & analysis, is filed at www.sedar.com on November
27, 2013.
About ePals Corporation
ePals Corporation (TSX-VENTURE: SLN) is an education media
company and the leading Global Learning Network. Focused on the
K-12 market, ePals offers school administrators, teachers, students
and parents worldwide trusted content, interactive learning
experiences, and a collaborative learning community. ePals'
award-winning products include: popular children's educational
publishing brands from toddlers to teens, including Cricket® and
Cobblestone®; the ePals Global Community®; and In2Books®, a common
core eMentoring program that builds reading, writing and critical
thinking skills. ePals also offers SchoolMail365 and has recently
launched ToolsforSchool.com, a teaching resource marketplace
connecting educators to original, classroom-tested content. Also
new is a full service content-licensing, clearance and production
service for education publishers. ePals serves approximately 1
million classrooms and reaches millions of teachers, students and
parents in 222 countries and territories. Product websites include:
www.ePals.com; www.Cricketmag.com; www.In2Books.com; and
www.ToolsforSchool.com. Corporate information is available at
www.corp.ePals.com.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Cautionary Statement Regarding Forward-Looking
Information Certain statements contained in this press
release constitute forward-looking information within the meaning
of applicable securities laws, including statements with respect to
customers, ventures such as ePals China and Europe ("ePals
Ventures"); partnerships; ePals' strategy, prospects and success in
pursuing domestic or international markets for the platform or
media businesses, and the composition of its leadership teams to be
established in connection therewith; and ePals' anticipated plans
to increase its subscription base, ARPU, and media and platform
businesses. These statements relate to future events or future
performance. Often, but not always, forward-looking information can
be identified by the use of words such as "plans", "expects", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", or "believes" or variations (including
negative variations) of such words and phrases, or statements
formed in the future tense or indicating that certain actions,
events or results "may", "could", "would", "might" or "will" (or
other variations of the forgoing) be taken, occur, be achieved, or
come to pass. Forward-looking information is necessarily based upon
a number of assumptions and factors that, while considered
reasonable, are subject to known and unknown risks, uncertainties,
and other factors which may cause the actual results and future
events to differ materially from those expressed or implied by such
forward-looking information. Those assumptions and factors are
based on information currently available to ePals. Such material
factors and assumptions include, but are not limited to: ePals'
ability to execute on its business plan, including the successful
launch of ePals' Ventures; the acceptance of ePals' products and
services by customers globally; that ePals affiliated entities will
be able to secure distribution partners for sale of ePals' products
and services; ePals' subjective assessment of the likelihood of
success of a sales lead or opportunity; that sales will be
completed at or above ePals' estimated margins; that the demand for
webhosting and secure email communication, as well as education
media related products domestically, in Europe and in China will
continue to grow; that the demand for ePals' products and services
globally will develop and grow; the receipt of all requisite
regulatory approvals throughout venture territories for the sale of
ePals' products and services; the availability of additional
financing, if and when required and market conditions generally.
Although ePals has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking information, there may be
other factors that cause actions, events or results to differ from
those anticipated, estimated or intended. The forward-looking
information contained in this press release is made as of the date
hereof and ePals is not obligated to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, except as required by
applicable securities laws. Because of the risks, uncertainties and
assumptions contained herein, investors should not place undue
reliance on forward-looking information. The foregoing statements
expressly qualify any forward-looking information contained
herein.
| |
|
| |
|
| ePals Corporation |
|
| Condensed Consolidated Interim Statements of Financial
Position |
|
| September 30, 2013 and December 31, 2012 |
|
| |
|
|
|
|
|
|
| |
|
(Unaudited) |
|
|
|
|
| |
|
September 30, 2013 |
|
|
December 31, 2012 |
|
| |
|
|
|
|
|
|
|
|
| Assets |
|
| |
|
|
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
|
|
| |
Cash & cash equivalents |
|
$ |
698,818 |
|
|
$ |
3,948,499 |
|
| |
Accounts receivable, net of allowance for doubtful
accounts (see Note 4) |
|
|
1,026,006 |
|
|
|
1,581,300 |
|
| |
Inventory |
|
|
783,404 |
|
|
|
417,702 |
|
| |
Other current assets |
|
|
835,407 |
|
|
|
875,618 |
|
| |
|
Total current assets |
|
|
3,343,635 |
|
|
|
6,823,119 |
|
| |
|
|
|
|
|
|
|
|
| Property and equipment, net |
|
|
524,989 |
|
|
|
516,575 |
|
| Investment in NeuPals (see Note 5) |
|
|
894,378 |
|
|
|
1,164,523 |
|
| Goodwill |
|
|
14,419,953 |
|
|
|
14,419,953 |
|
| Other intangible assets, net |
|
|
7,960,856 |
|
|
|
8,016,615 |
|
| Restricted cash (see Note 3) |
|
|
75,663 |
|
|
|
75,663 |
|
| Other assets |
|
|
63,503 |
|
|
|
84,519 |
|
| |
|
|
|
|
|
|
|
|
| |
|
Total assets |
|
$ |
27,282,977 |
|
|
$ |
31,100,967 |
|
| |
|
|
|
|
|
|
|
|
| Liabilities and Stockholders' Equity (Deficit) |
|
| |
|
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
|
| |
Accounts payable and accrued expenses |
|
$ |
7,906,173 |
|
|
$ |
6,951,523 |
|
| |
Acquisition consideration liabilities, current (see
Note 3) |
|
|
182,390 |
|
|
|
182,390 |
|
| |
Deferred revenue, current |
|
|
3,934,131 |
|
|
|
6,185,628 |
|
| |
Bank line-of-credit (see Note 6) |
|
|
1,500,000 |
|
|
|
1,500,000 |
|
| |
Notes payable to related parties (see Note 6) |
|
|
1,900,000 |
|
|
|
- |
|
| |
Finance lease obligations, current (see Note 12) |
|
|
75,916 |
|
|
|
72,789 |
|
| |
Other current liabilities |
|
|
79,139 |
|
|
|
24,719 |
|
| |
|
Total current liabilities |
|
|
15,577,749 |
|
|
|
14,917,049 |
|
| |
|
|
|
|
|
|
|
|
| Secured convertible debentures (see Note 3 and 6) |
|
|
18,626,331 |
|
|
|
11,117,161 |
|
| Deferred revenue, less current portion |
|
|
1,400,374 |
|
|
|
917,881 |
|
| Finance lease obligations, less current portion (see
Note 12) |
|
|
133,460 |
|
|
|
32,554 |
|
| Acquisition consideration liabilities, less current
(see Note 3) |
|
|
122,911 |
|
|
|
122,911 |
|
| Other liabilities |
|
|
11,440 |
|
|
|
11,440 |
|
| |
|
|
|
|
|
|
|
|
| |
|
Total liabilities |
|
|
35,872,265 |
|
|
|
27,118,996 |
|
| |
|
|
|
|
|
|
|
|
| Commitments and contingencies (see Note 12) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Stockholders' equity (deficit) |
|
|
|
|
|
|
|
|
| Share capital (see Note 7) |
|
|
97,177,187 |
|
|
|
94,609,838 |
|
| Additional paid-in capital |
|
|
7,127,817 |
|
|
|
5,312,802 |
|
| Accumulated deficit |
|
|
(111,265,107 |
) |
|
|
(94,295,643 |
) |
| Unvested voting common stock |
|
|
(1,876 |
) |
|
|
(3,752 |
) |
| Accumulated other comprehensive loss |
|
|
(135,261 |
) |
|
|
(149,226 |
) |
| Less: Treasury stock (719,998 shares) |
|
|
(1,492,048 |
) |
|
|
(1,492,048 |
) |
| |
|
|
|
|
|
|
|
|
| |
|
Total stockholders' equity (deficit) |
|
|
(8,589,288 |
) |
|
|
3,981,971 |
|
| |
|
|
|
|
|
|
|
|
| |
|
Total liabilities and stockholders' equity (deficit) |
|
$ |
27,282,977 |
|
|
$ |
31,100,967 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
| ePals Corporation |
| Condensed Consolidated Interim Statements of
Comprehensive Loss |
| Three and Nine Months Ended September 30, 2013 and
2012 (Unaudited) |
| |
| |
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
| |
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue (Note 9) |
|
$ |
3,749,004 |
|
|
$ |
3,041,453 |
|
|
$ |
11,741,065 |
|
|
$ |
10,593,266 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Technology, development & operational support |
|
|
3,917,392 |
|
|
|
3,061,569 |
|
|
|
11,936,402 |
|
|
|
8,766,316 |
|
| |
General and administrative expenses |
|
|
1,574,680 |
|
|
|
2,165,804 |
|
|
|
5,793,060 |
|
|
|
6,131,945 |
|
| |
Sales & marketing |
|
|
3,792,948 |
|
|
|
3,103,249 |
|
|
|
9,284,352 |
|
|
|
7,453,362 |
|
| |
Stock-based compensation (see Note 8) |
|
|
126,659 |
|
|
|
244,568 |
|
|
|
1,235,782 |
|
|
|
1,167,868 |
|
| |
Depreciation & amortization |
|
|
330,372 |
|
|
|
398,200 |
|
|
|
980,122 |
|
|
|
1,168,914 |
|
| |
Loss on investment in NeuPals (see Note 5) |
|
|
135,020 |
|
|
|
- |
|
|
|
270,145 |
|
|
|
- |
|
| |
Acquisition investigation expenses |
|
|
- |
|
|
|
756,336 |
|
|
|
- |
|
|
|
1,163,755 |
|
| |
Change in estimated fair value of acquisition share
consideration (see Note 3) |
|
|
- |
|
|
|
(2,113,830 |
) |
|
|
- |
|
|
|
(2,626,070 |
) |
| Total operating expenses |
|
|
9,877,071 |
|
|
|
7,615,896 |
|
|
|
29,499,863 |
|
|
|
23,226,090 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
(6,128,067 |
) |
|
|
(4,574,443 |
) |
|
|
(17,758,798 |
) |
|
|
(12,632,824 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Gain from change in fair value of derivatives (see Note
3) |
|
|
26,000 |
|
|
|
- |
|
|
|
3,053,000 |
|
|
|
- |
|
| |
Interest expense, net |
|
|
(983,611 |
) |
|
|
(25,743 |
) |
|
|
(2,398,530 |
) |
|
|
(64,950 |
) |
| |
Net foreign currency exchange gains (losses) |
|
|
(492,930 |
) |
|
|
(332 |
) |
|
|
134,864 |
|
|
|
(9,140 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
|
(7,578,608 |
) |
|
|
(4,600,518 |
) |
|
|
(16,969,464 |
) |
|
|
(12,706,914 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Items that may be subsequently reclassfied into net
income/loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Foreign currency translation |
|
|
(12,873 |
) |
|
|
(1,699 |
) |
|
|
13,965 |
|
|
|
(5,271 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total comprehensive loss |
|
$ |
(7,591,481 |
) |
|
$ |
(4,602,217 |
) |
|
$ |
(16,955,499 |
) |
|
$ |
(12,712,185 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted |
|
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.10 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted |
|
|
173,668,223 |
|
|
|
142,139,062 |
|
|
|
165,777,306 |
|
|
|
131,258,058 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| |
|
| ePals Corporation |
|
| Consolidated Statements of Cash Flows |
|
| Nine Months Ended September 30, 2013 and 2012
(Unaudited) |
|
| |
|
| |
|
|
Nine Months Ended September 30, |
|
| |
|
|
2013 |
|
|
|
2012 |
|
| Cash flows from operating activities: |
|
|
|
|
|
|
|
|
| |
Net loss |
|
$ |
(16,969,464 |
) |
|
$ |
(12,706,914 |
) |
| |
Adjustments to reconcile net loss to net cash used in
operating activities: |
|
|
|
|
|
|
|
|
| |
|
Gain from change in fair value of derivatives (see Note
3) |
|
|
(3,053,000 |
) |
|
|
- |
|
| |
|
Depreciation and amortization |
|
|
980,122 |
|
|
|
1,168,914 |
|
| |
|
Stock-based compensation (see Note 8) |
|
|
1,235,782 |
|
|
|
1,167,868 |
|
| |
|
Bad debt expense |
|
|
(47,085 |
) |
|
|
330,865 |
|
| |
|
Loss on investment in NeuPals (see Note 5) |
|
|
270,145 |
|
|
|
- |
|
| |
|
Amortization of financing costs from debentures (see
Note 6) |
|
|
1,416,512 |
|
|
|
- |
|
| |
|
Net foreign currency exchange (gains) losses |
|
|
(134,864 |
) |
|
|
9,140 |
|
| |
|
Restricted share vesting |
|
|
1,876 |
|
|
|
3,217 |
|
| |
|
Change in estimated fair value of acquisition
consideration (see Note 3) |
|
|
- |
|
|
|
(2,626,070 |
) |
| |
|
Increase in restricted cash |
|
|
- |
|
|
|
189 |
|
| |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
| |
|
|
Accounts receivable |
|
|
859,057 |
|
|
|
172,021 |
|
| |
|
|
Inventory |
|
|
(365,702 |
) |
|
|
(273,314 |
) |
| |
|
|
Other current assets |
|
|
40,213 |
|
|
|
(382,653 |
) |
| |
|
|
Accounts payable and accrued expenses |
|
|
923,152 |
|
|
|
1,245,840 |
|
| |
|
|
Deferred revenue |
|
|
(1,769,003 |
) |
|
|
(2,473,119 |
) |
| |
|
|
Other |
|
|
(48,261 |
) |
|
|
(37,887 |
) |
| |
|
|
|
Total adjustments |
|
|
308,944 |
|
|
|
(1,694,989 |
) |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
Net cash used in operating activities |
|
|
(16,660,520 |
) |
|
|
(14,401,903 |
) |
| |
|
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
| |
Cash paid for acquisition of Carus Publishing
Company |
|
|
- |
|
|
|
(1,500,000 |
) |
| |
Purchases of equipment |
|
|
(362,062 |
) |
|
|
(192,500 |
) |
| |
Increase in other intangible assets |
|
|
(573,614 |
) |
|
|
(405,241 |
) |
| |
Decrease in other assets |
|
|
21,016 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
Net cash used in investing activities |
|
|
(914,660 |
) |
|
|
(2,097,741 |
) |
| |
|
|
|
|
|
|
|
|
| Cash flows from financing activities: |
|
|
|
|
|
|
|
|
| |
Proceeds from secured convertible debentures, net of
expenses (see Note 6) |
|
|
9,327,495 |
|
|
|
- |
|
| |
Proceeds from notes payable to related parties, net of
cash repayments (see Note 6) |
|
|
4,900,000 |
|
|
|
970,000 |
|
| |
Proceeds from private placement, net of expenses |
|
|
- |
|
|
|
9,228,798 |
|
| |
Payments on finance lease obligations |
|
|
(61,723 |
) |
|
|
(87,490 |
) |
| |
Proceeds from finance lease financing |
|
|
163,742 |
|
|
|
63,510 |
|
| |
Proceeds from exercise of stock options |
|
|
- |
|
|
|
53,213 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
Net cash provided by financing activities |
|
|
14,329,514 |
|
|
|
10,228,031 |
|
| |
|
|
|
|
|
|
|
|
| Decrease in cash & cash equivalents |
|
|
(3,245,666 |
) |
|
|
(6,271,613 |
) |
| |
|
|
|
|
|
|
|
|
| Effect of exchange rates on cash |
|
|
(4,015 |
) |
|
|
(9,860 |
) |
| |
|
|
|
|
|
|
|
|
| Cash & cash equivalents at the beginning of the
period |
|
|
3,948,499 |
|
|
|
6,895,829 |
|
| Cash & cash equivalents at the end of the
period |
|
$ |
698,818 |
|
|
$ |
614,356 |
|
| |
|
|
|
|
|
|
|
|
| Non-cash financing activities: |
|
|
|
|
|
|
|
|
| Issuance of common shares to consultants for payment of
services |
|
$ |
- |
|
|
$ |
23,500 |
|
| Issuance of common shares related to credit facility
from insider |
|
$ |
3,000,000 |
|
|
$ |
109,349 |
|
| |
|
|
|
|
|
|
|
|
| Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
| Cash paid for interest |
|
$ |
472,073 |
|
|
$ |
59,437 |
|
| Cash paid for income taxes |
|
|
34,564 |
|
|
|
20,548 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Refer to the notes of ePals Condensed Consolidated Interim
Financial Report for the three and nine months ended September 30,
2013 filed at www.sedar.com on November 27, 2013 as these notes are
an integral part of these financial statements.
FOR FURTHER INFORMATION PLEASE CONTACT: Chief Financial Officer
Aric Holsinger ePals Corporation Phone: (703) 885-3400
aholsinger@corp.epals.com Investor Relations Cory Pala E.vestor
Phone: (416) 657-2400
cpala@corp.epals.com
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