UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): May 13, 2014
RIGHTSCORP,
INC.
(Exact
name of registrant as specified in its charter)
Nevada |
|
000-55097 |
|
33-1219445 |
(State
or Other Jurisdiction |
|
(Commission |
|
(I.R.S.
Employer |
of
Incorporation) |
|
File
Number) |
|
Identification
Number) |
3100
Donald Douglas Loop North
Santa
Monica, CA 90405
(Address
of principal executive offices) (zip code)
310-751-7510
(Registrant’s
telephone number, including area code)
Copies
to:
Gregory
Sichenzia, Esq.
Jeff
Cahlon, Esq.
Sichenzia
Ross Friedman Ference LLP
61
Broadway
New
York, New York 10006
Phone:
(212) 930-9700
Fax:
(212) 930-9725
(Former
address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
[ ] Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
2.02 - Results of Operations and Financial Condition.
On
May 13, 2014, Rightscorp, Inc. issued a press release announcing its financial results for the period ended March 31, 2014. The
press release is attached hereto as Exhibit 99.1.
In
accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1,
shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference
into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except
as shall be expressly set forth by specific reference in such filing.
Item
9.01 - Financial Statements and Exhibits
(d)
Exhibits
99.1
Press Release
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
|
RIGHTSCORP,
INC. |
|
|
|
Dated:
May 15, 2014 |
By: |
/s/
Christopher Sabec |
|
Name: |
Christopher
Sabec |
|
Title: |
Chief
Executive Officer |
Exhibit
99.1
Rightscorp
Reports First Quarter 2014 Financial Results
Company
Delivers 284% Year-Over-Year Revenue Growth Driven by Increase in Copyrights, Ingestion Rates, and ISP Participation
Santa
Monica, Calif. – May 13, 2014 – Rightscorp (OTCQB: RIHT), the leading provider of monetization services for artists
and holders of copyrighted Intellectual Property (IP), today announced financial results for the first quarter of 2014 ended March
31, 2014.
Financial
Highlights:
|
● |
284%
increase in revenues to $188,933 for the first quarter ended March 14, 2014, from $49,256 for the same period in 2013 due
to growth in copyrights, ingestion rates, and increase in settlements from cases closed; |
|
|
|
|
● |
21.6% sequential
increase in revenues from $155,381 in the fourth quarter of 2013; |
|
|
|
|
● |
Cash on hand increased
633% to $264,667 at March 31, 2014 from $36,331 at December 31, 2013; |
|
|
|
|
● |
$783,488 of equity
capital received during the three months ended March 31, 2014, which led to a boost in ingestion rates of active copyrights
into the Company’s monetization system by 400%; and |
|
|
|
|
● |
As of March 31,
2014, the Company is still set to receive a balance of $750,000 under the $2.0 million financing commitment obtained through
its going public transaction. |
Operational
Highlights:
|
● |
Authorized
copyright catalog increased to over 1.5 million, including many award-winning films, best-selling authors and over 13 tracks
on the Billboard Hot 100; |
|
|
|
|
● |
Participation
from Internet Service Providers (ISP) increased- Rightscorp recently announced it has received payments from over 70 ISPs,
a 40% increase from year end 2013; |
|
|
|
|
● |
Company
reports a boost in ingestion rates by 400% as a result of equity investment which directly impacts the Company’s growth
potential; |
|
|
|
|
● |
Reports
more than 60,000 cases of copyright infringement closed as of March 31, 2014; and |
|
|
|
|
● |
Expands
its footprint globally into Canada with the engagement of Canadian Law Firm and files patents to operate in Europe, China,
Israel, Japan, Brazil, and India. |
Rightscorp
CEO Christopher Sabec commented, “Our first quarter results represent a solid growth trend for Rightscorp. We continue
to gather momentum on many fronts including the growth of our copyrights under representation, the ingestion of our authorized
copyright catalog, and expansion in the number of ISPs that help monetize our business through settlements. We continue to make
material upgrades to our technology and processes, which accelerate our ingestion rate and increase the base of participating
ISPs.”
Mr.
Sabec continued, “As we look out over the next year, we expect to maintain our strong sequential quarterly growth. We now
have more than 1.5 million authorized copyrights in our catalog. Each day we are ingesting content at an accelerating rate. At
last count, we had run roughly 80,000 copyrights through our ingestion process; this leaves room for significant growth through
the ingestion of this already approved copyright catalog. Existing clients, who have tested our service with a limited number
of copyrights, are following-up by authorizing us to monetize much larger portfolios. We are currently in discussions with entities
that own millions of additional copyrights, spanning various industries, including film, music, print, video games and software,
in the U.S. and abroad.”
First
Quarter 2014 Financial Summary
For
the first quarter of 2014 ended March 31, 2014, the Company generated total revenues of $188,933, up 284% from $49,256 in the
same period in 2013. Sequentially, revenues rose 22% from $155,381 in the fourth quarter of 2013. The growth in revenues were
driven by an increase in the number of copyrights under contract, an increase in active copyrights uploaded into Rightscorp’s
automated system and by the growing number of ISPs participating in the Company’s service creating a multiplier effect.
For
the first quarter of 2014, operating expenses totaled $829,389, compared to $318,954 for prior-year quarter. The increase in fees
was due to increased fees paid to copyright holders in the period. General and administrative expenses were $692,015 for the quarter
ended March 31, 2014 compared to $272,282 for the year-ago quarter, due to increased wages, professional and investment banking
fees, and travel and other expenses related to securing financing.
Sales
and marketing costs increased to $31,308 for the first quarter of 2014, from $14,635 for the first quarter of 2013, due to an
increased presence at industry conferences to meet potential clients. Depreciation and amortization expenses were $11,599 during
quarter ended March 31, 2014, an increase of $4,190 compared to $7,409 in the year-ago quarter.
At
March 31, 2014, the Company had cash and cash equivalents totaling $264,667, up from $36,331 at December 31, 2013.
Conference
call information:
Date:
Tuesday, May 13, 2014
Time:
4:15 P.M. Eastern Time (ET)
Dial
in Number for U.S. & Canadian Callers: 877-407-9129
Dial
in Number for International Callers (Outside of the U.S. & Canada): 201-493-6753
Participating
on the call will be Rightscorp Chief Executive Officer Christopher Sabec and Chief Operating Officer Robert Steele, who will discuss
operational and financial highlights for the first quarter of 2014.
To
join the live conference call, please dial into the above referenced telephone numbers five to ten minutes prior to the scheduled
conference call time. A live webcast and archive of the call will also be available on Rightscorp’s website at: http://rightscorp.equisolvewebcast.com/q1-2014.
A
replay will be available for 14 days starting on May 13, 2014 at approximately 8:00 P.M. (ET). To access the replay, please dial
1-877-660-6853 in the U.S. and 1-201-612-7415 for international callers. The conference ID# is 418309.
About
Rightscorp, Inc.
Rightscorp
(OTCQB: RIHT) is a leading provider of monetization services for artists and holders of copyrighted Intellectual Property (IP).
The Company’s patent pending digital loss prevention technology focuses on the infringement of digital content such as music,
movies, software, and games and ensures that owners and creators are rightfully paid for their IP. Rightscorp implements existing
laws to solve copyright infringements by collecting payments from illegal file sharing activities via notifications sent through
Internet Service Providers (ISPs). The Company’s technology identifies copyright infringers, who are offered a reasonable
settlement option when compared to the legal liability defined in the Digital Millennium Copyrights Act (DMCA). Based on the fact
that 22% of all Internet traffic is used to distribute copyrighted content without permission or compensation to the creators,
Rightscorp is pursuing an estimated $2.3 billion opportunity and has monetized major media titles through relationships with industry
leaders. http://www.rightscorp.com/
Safe
Harbor Statement
This
press release may include forward-looking statements. All statements other than statements of historical fact included in this
press release, including, without limitation, statements regarding the Company’s anticipated financial position, business
strategy and plans and objectives of management of the Company for future operations, are forward-looking statements. When used
in this press release, words such as “anticipate,” “believe,” “estimate,” “expect,”
“intend,” and similar expressions, as they relate to the Company or its management, identify forward-looking statements.
Such forward-looking statements are based on the beliefs of the Company’s management as well as assumptions made by and
information currently available to the Company’s management. Actual results could differ materially from those contemplated
by the forward-looking statements as a result of certain factors not limited to, general economic and business conditions, competitive
factors, changes in business strategy or development plans, the ability to attract and retain qualified personnel, and changes
in legal and regulatory requirements. Such forward-looking statements reflect the current views of the Company with respect to
future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations,
growth strategy and liquidity of the Company. All subsequent written and oral forward-looking statements attributable to the Company
or persons acting on its behalf are expressly qualified in their entirety by this paragraph.
For
further investor and media information contact:
Andrew
Haag
Managing
Partner
IRTH
Communications
rightscorp@irthcommunications.com
1-866-976-4784
[Financial
Tables to Follow]
Rightscorp,
Inc.
Consolidated
Statements of Operations
(Unaudited)
| |
Three
Months Ended | | |
Three
Months Ended | |
| |
March
31, 2014 | | |
March
31, 2013 | |
Revenue | |
$ | 188,933 | | |
$ | 49,256 | |
| |
| | | |
| | |
Operating expenses: | |
| | | |
| | |
Copyright holder fees | |
| 94,467 | | |
| 24,628 | |
General and administrative | |
| 692,015 | | |
| 272,282 | |
Sales and marketing | |
| 31,308 | | |
| 14,635 | |
Depreciation and amortization | |
| 11,599 | | |
| 7,409 | |
Total operating expenses | |
| 829,389 | | |
| 318,954 | |
| |
| | | |
| | |
Loss from operations | |
| (640,456 | ) | |
| (269,698 | ) |
| |
| | | |
| | |
Other income (expenses): | |
| | | |
| | |
Interest expense | |
| (10,586 | ) | |
| (52,349 | ) |
Total non-operating expenses | |
| (10,586 | ) | |
| (52,349 | ) |
| |
| | | |
| | |
Loss from operations before income taxes | |
| (651,042 | ) | |
| (322,047 | ) |
| |
| | | |
| | |
Provision for income taxes | |
| - | | |
| - | |
| |
| | | |
| | |
Net loss | |
$ | (651,042 | ) | |
$ | (322,047 | ) |
| |
| | | |
| | |
Net loss per share – basic and diluted | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
| |
| | | |
| | |
Weighted average common shares – basic and diluted | |
| 69,071,926 | | |
| 28,014,392 | |
Rightscorp,
Inc.
Consolidated
Balance Sheets
(Unaudited)
| |
March 31, 2014 | | |
December 31, 2013 | |
Assets | |
| | |
| |
Assets | |
| | |
| |
Cash | |
$ | 264,667 | | |
$ | 36,331 | |
Prepaid expenses | |
| 41,947 | | |
| 19,639 | |
Other current asset | |
| - | | |
| - | |
Total Current Assets | |
| 306,614 | | |
| 55,970 | |
Other Assets | |
| | | |
| | |
Fixed assets, net | |
| 65,425 | | |
| 56,453 | |
Intangible assets, net | |
| 29,575 | | |
| 33,800 | |
Total Assets | |
$ | 401,614 | | |
$ | 146,223 | |
| |
| | | |
| | |
Liabilities and Stockholders’ Deficit | |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
Accounts payable and accrued liabilities | |
$ | 974,545 | | |
$ | 928,304 | |
Convertible notes payable, net of discount of $5,504 and $10,891 | |
| 204,496 | | |
| 202,609 | |
Total Current Liabilities | |
| 1,179,041 | | |
| 1,130,913 | |
Total Liabilities | |
| 1,179,041 | | |
| 1,130,913 | |
| |
| | | |
| | |
Stockholders’ Deficit: | |
| | | |
| | |
Preferred stock, $.001 par value; 10,000,000 shares authorized; null shares issued and outstanding | |
| - | | |
| - | |
Common stock, $.001 par value; 250,000,000 shares authorized; 69,804,729 and 68,797,102 shares issued and outstanding, respectively | |
| 69,805 | | |
| 68,797 | |
Common stock to be issued | |
| 851,000 | | |
| 380,000 | |
Additional paid in capital | |
| 3,193,482 | | |
| 2,807,185 | |
Accumulated deficit | |
| (4,891,714 | ) | |
| (4,240,672 | ) |
Total stockholders’ deficit | |
| (777,427 | ) | |
| (984,690 | ) |
Total Liabilities and Stockholders’ Deficit | |
$ | 401,614 | | |
$ | 146,223 | |
Rightscorp (PK) (USOTC:RIHT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Rightscorp (PK) (USOTC:RIHT)
Historical Stock Chart
From Jul 2023 to Jul 2024