SOURCE: EFactor Group Corp.

EFactor Group Corp.

August 17, 2015 10:00 ET

EFactor Group Corp. Reports Second Quarter 2015 Financial Results

Second Quarter Revenues of $1.1 Million Represent a 700% Increase; All Divisions Triple or Quadruple Revenue Versus 2014

NEW YORK, NY--(Marketwired - Aug 17, 2015) -  EFactor Group Corp. (OTCQB: EFCT) ("EFactor Group" or the "Company"), the premier business network for entrepreneurs designed to provide a variety of tools and business services to help drive business success, today announced financial results for its second quarter and first half ended June 30, 2015.

Second Quarter and First Half 2015 Highlights and CEO Commentary

  • Consolidated revenues from the Company's three divisions reach a record $1.1 million, the highest quarterly revenue recorded to date
  • Social Networks revenue increases 14x to $576,000
  • Business Services revenue increases 4x to $486,000
  • First half 2015 revenues increase more than 8x to $2.1 million versus first half of 2014

"Through our strategic acquisitions, we have built three divisions with entrepreneur-specific content, services and tools that are feeding off each other's customer bases, cross-pollinating business opportunities and increasing members on our Social Networks," began Adriaan Reinders, CEO of EFactor Group. "From a financial perspective, our divisions provided us record increases in revenues year-over year and quarter-over-quarter. We are particularly proud of our ability to further monetize members in our Social Networks division, which we believe is the ultimate measurement of our business model and value to shareholders. Put simply, our track record of successfully servicing entrepreneurs with content, services and tools to help build a better business is attracting more entrepreneurs to EFactor.com and our other social networks, where they are connecting to people and buying the services our divisions offer. These services further monetize our membership and increase our group revenues. Improvements in our cash flow and EBITDA have also empowered us to enhance our services and create new service offerings for members which we will be launching the second half of this year."

In the first quarter of 2015, EFactor Group formalized its operations into the following three (3) business divisions:

1. Social Networks which includes the social networking platforms of EFactor.com, GroupCard, Member Digital and ELEQT, which connect entrepreneurs to each other.
2. Business Services which includes EQ Mentor, MCC International, HT Skills, Robson Dowry and dozens of partnership arrangements with firms like Dun&Bradstreet, American Express and GoDaddy that provide services and products to entrepreneurs.
3. Funding which includes the operations and revenues of RocketHub and specific, funding oriented education and services provided through EFactor.com's EScore™.

Second Quarter 2015 Group and Business Division Revenues

         
    For the Three Months Ended
June 30, 2015
  For the Six Months Ended
June 30, 2015
    2Q2015   1Q2014   1H2015   1H2014
Social Networks   $576,205   $40,864   $1,061,362   $63,903
Business Services   485,565   107,692   977,049   201,228
Funding   30,957   -   30,987   -
TOTALS   $ 1,065,757   $ 148,586   $ 2,069,398   $ 265,131
                 

Total consolidated revenue for EFactor Group was $1,065,757 versus $148,585 for the same period in 2014. The increase in revenues are attributed to acquisitions as well as organic sales growth in each division. 

The Social Networks division increased revenues to $576,157 versus $40,864 during the same period in 2014. The Social Networks division's 14x growth in revenues for the quarter was achieved through the Company's acquisitions of GroupCard and ELEQT in 2014 and each business' increases in membership fees, event sponsorships, advertising and sales of their respective service offerings. Sequentially, the Social Network division grew 19% versus the first quarter 2015 and added approximately 200,000 new members during the quarter. The Social Networks division hosted and monetized 30 member events in the second quarter of 2015, more than 3x the previous year. Events were held in Europe, Middle East, North America, South America and Asia. 

EFactor.com is also continuing with a series of updates to www.efactor.com to increase member interaction and gamification. The Company's work with FreedomLab is focused on four goals:

1. CONVERSION: Increase traffic and conversion of visitors to members
2. ACTIVATION: Improve the frequency and intensity of use of the network
3. ENGAGEMENT: Deploy additional content develop a content strategy;
4. MONETIZATION: Enable premium services on the site and launch EScore 2.0

EFactor Group's Business Services division recorded revenues of $458,565 versus $107,692 in the first quarter of 2014. The approximate 4x increase in the division's revenues was related to the division's ability to cross pollinate business opportunities from the Group's Social Networks division. As an example, Member Digital, a business in the Group's Business Services division, had a 250% sequential increase in new clientele resulting from marketing its services in the Group's Social Networks division. Member Digital enables entrepreneurs the ability and tools to monetize content for its clientele and visitors to clients' sites. Another business in the Business Services division, HT Skills which is a staffing agency focused on apprenticeships, also witnessed a sequential increase quarter to quarter in 2015. HT Skill's enrollment of clients sequentially increased 41% to 120 enrollments, versus 85 in the first quarter of 2015.

The Company's Funding division includes RocketHub, which the Company acquired on April 15 of this year. As a result of the acquisition date, only a portion of RocketHub revenues were included by EFactor Group in the second quarter and first half of 2015. The division recorded $30,987 in revenues for the approximate 45 days accounted in the second quarter. The division's revenues are derived from commissions from Rocket Hub's crowd funding platform. In a subsequent event, on July 9th, Rocket Hub became a center piece of A&E Networks, the "StartUp Factor", which features a series of entrepreneurs and their startup businesses, many of which are current Rocket Hub clients. 

Cash and Non-Cash Expenses

EFactor Group's total operating expenses are a combination of cash, and non-cash items. Costs of revenues and sales and marketing expenses to support the Group's three business divisions totaled $3.3 million for the quarter. The increase is mainly attributable to a direct result of increased sales for the three months ended June 30, 2015. 

General and administrative costs for the quarter were $2.7 million, versus $0.9 million in 2014. Excluding $0.8 million and zero of non-cash, stock-based compensation captured in each respective quarter, the adjusted, non-GAAP general and administrative expenses were $1.9 million for the second quarter, representing an increase of 133% mainly attributable to the added entities within the Group, new design of a marketing platform for the Company's website, and the Company's legal, accounting and investment banking fees related to public market expenses and EFactor's goals to uplist to NASDAQ.

Interest expense for the period was $466,919 versus $475,215 in 2014. Interest expenses includes non-cash amortization of $204,839 for share issuance expense to satisfy debt holder enhancements as part of the consideration for entering into these investments. The Company expects to repay or convert into common stock the majority of its outstanding notes subject to raising further capital and increasing revenues over the course of the next nine months.

Excluding the value of non-cash stock based compensation and deprecation, the Company's adjusted total expenses were $2.3 million for the quarter.

GAAP and Adjusted Earnings

Second quarter 2015 GAAP net loss increased to $5.5 million from a loss of $1.4 million for the three month period ended June 30, 2014. The increase in net loss compared to the prior year period is primarily a result of increased revenues in the Company's divisions and related operating expenses and $2.6 million of derivative related expenses. 

Excluding the non-cash components of expenses outlined earlier, adjusted net loss for the year was $2.2 million or a loss of $0.75 per share based on a weighted average of 3,004,152 shares as June 30, 2015.

EFACTOR GROUP CORP. SECOND QUARTER 2015 EARNINGS CONFERENCE CALL

The Company will host its conference call for investors and analysts on Monday, August 17, 2015 at 9:00 a.m. ET to discuss the Company's second quarter 2015 financial results.

DATE:
Monday, August 17, 2015

TIME:
U.S. 
9:00 a.m. ET
EUROPE 15:00 hrs. CET

DIAL IN:
U.S.
1-877-407-0784
INTERNATIONAL 1-201-689-8560

CONFERENCE ID:
"EFactor Group Corp. Second Quarter Conference Call"

WEBCAST:
http://public.viavid.com/index.php?id=115939

A replay of the call will be available beginning two hours after the call through midnight, August 24, 2015 by telephone at +1-877-870-5176 (US Domestic) or +1-858-384-5517 (International). The replay pin number is 13617490.

Use of Adjusted, Non-GAAP Financial Measures

To supplement the Company's condensed financial statements presented in accordance with GAAP, EFactor Group Corp. uses "adjusted" non-GAAP measures of certain components of financial performance. These non-GAAP measures include Adjusted Expense and Adjusted, Non-GAAP net income and earnings per share.

"Adjusted", or "Non-GAAP" measures are provided to enhance investors' overall understanding of the Company's current financial performance, prospects for the future and as a means to evaluate period-to-period comparisons. The Company believes that these non-GAAP measures provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of recurring core business operating results. The Company believes the non-GAAP measures that exclude such items when viewed with GAAP results and the accompanying reconciliation, enhance the comparability of results against prior periods and allow for greater transparency of financial results. The Company believes non-GAAP measures facilitate management's internal comparison of the Company's financial performance to that of prior periods as well as trend analysis for budgeting and planning purposes. The presentation of non-GAAP measures are not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

About EFactor Group Corp.

EFactor Group Corp. is the premier business network for entrepreneurs designed to provide a variety of tools and business services to help drive business success. Through its wholly owned business services subsidiaries, EFactor Group provides its growing entrepreneurial community of currently over 1.9 million members with social networking and education, entrepreneur-focused business services, and financing opportunities including crowd funding. A proprietary selection and matching algorithm to offer specific content and resources tailored to each entrepreneur's unique business needs. With members in every country in all 196 countries in the world across 240 industry groups, EFactor Group has built the only comprehensive entrepreneurial community that serves as a source of inspiration and ideas on platform that also consolidates essential services to foster business growth.

EFactor Group's operations are categorized by the following Business Divisions:

1. SOCIAL NETWORKING
2. BUSINESS SERVICES
3. FUNDING OPTIONS.

For more information about EFactor Group Corp. (EFCT) please visit: http://efactorgroup.com. Or see our company video here: http://ir.efactorgroup.com/videos/view/4/efactor-video

The EFactor.com Value - The Entrepreneurs Wingman

EFactor hosts a social network designed to support you as your business grows, along every step of your journey. We'll be there to congratulate you every time you win and will coach and inspire you whenever you feel frustrated by setbacks. You can count on us to connect you with the right people for you and your company and offer you the resources and talent that will help you succeed. We are highly motivated everyday people who genuinely care about our team and customers. We cheer each other on and have each other's back. We get to see our ideas come to life every single day. We're entrepreneurs, contributing our expertise to the community.

For more information or to become a member of EFactor, please visit: www.efactor.com

Cautionary Note on Forward-Looking Statements:

This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not statements of historical fact and often contain words such as "may," "will," "expect," "believe," "anticipate," "plan," "estimate," "seek," "could," "should," "intend," "potential," or words of similar meaning. Forward-looking statements are based on management's current expectations, beliefs, assumptions and estimates regarding our company, industry, economic conditions, government regulations, energy policies and other factors. These statements are subject to significant risks, uncertainties, and assumptions that are difficult to predict and could cause actual results to differ materially and adversely from those expressed or implied in the forward-looking statements. These risks include risk factors described from time to time in the reports and registration statements we file with the Securities and Exchange Commission, including those in our most recent Form 10-K and any updates thereto in our Forms 10-Q. There may be other risks and uncertainties that are not currently known to us or that we currently believe are not material. We make forward-looking statements based on currently available information, and we assume no obligation to, and expressly disclaim any obligation to, update or revise publicly any forward-looking statements made in this release, whether as a result of new information, future events or otherwise, except as required by law.

Contact Information