Poynt Corporation
TSX VENTURE : PYN

Poynt Corporation

June 29, 2011 21:46 ET

Poynt Corporation Reports First Quarter 2011 Results

Strong User Numbers Drive Company Growth

CALGARY, ALBERTA--(Marketwire - June 29, 2011) - Poynt Corporation ("Poynt Corp." or the "Company") (TSX VENTURE:PYN), a leading provider of mobile local search services, today reported results for its first quarter ended March 31, 2011.

Poynt Corp. provides contextual and relevant advertising to users of their Poynt app ("Poynt" or the "App") performing local queries, and its revenue model is based on user queries, page views, advertising and transactions within the App. Each user query generates several page views, which are monetized through display advertising and sponsored listings paid for by advertisers. These advertising placements generate revenues on a cost per thousand impressions (CPM) basis or on a cost per click (CPC) basis. Transactions, such as ticket sales and restaurant reservations also contribute to revenues, on a fee for service basis.

Poynt Corp. has seen a significant increase in period-over-period user stats, which demonstrates that Poynt is becoming one of the most widely adopted and used applications worldwide. The Company has focused on increasing feature sets and capabilities within the App that bring users back on a daily basis. The Company expects that increased user acquisition and retention on this scale will lead to increased revenues on a going forward basis. Improvements in user numbers are key to Poynt's expanding number of advertisers, and it strengthens the Apps mobile commerce offerings, such as 'daily deals' and mobile couponing.

The Poynt user base grew substantially in the first quarter of 2011 as compared to prior quarters as follows:

Date Poynt User Count
March 31, 2010 2,422,097
June 30, 2010 3,155,430
September 30, 2010 3,915,889
December 31, 2010 4,854,061
March 31, 2011 6,814,793

*Numbers are based on Poynt internal data

The Company saw revenue growth of over 178% in the first quarter of 2011. Revenues for the quarter ended March 31, 2011 were $535,716 as compared to $192,450 for the same period in 2010. The net loss for the quarter ended March 31, 2011 was $3,762,079 or ($0.01) per basic share, as compared to a net loss of $8,952,687, or ($0.05) per basic share in the same period of 2010. Included in the loss for the quarter ended March 31, 2011 are material non-cash items totaling $2,437,544 including impairment of intangible assets of $1,338,854, amortization of intangible assets of $674,963, depreciation on property and equipment of $33,398, stock based compensation of $240,967 and provision for a loss on an operating lease of $149,362. After adjusting for these items, the net cash operating cost was approximately $442,000 per month. This compares favorably to the average net cash operating cost of approximately $660,000 per month in the last quarter of 2010. Going forward, the Company will continue to pursue user and revenue growth strategies as it expands into new geographies, launches new platforms, invests in new services and continues to build the Poynt brand. The Company anticipates revenues in the second half of 2011 to grow to offset operating expenses.

Summary Results of Operations – For the Quarter Ended March 31
2011 2010
Total revenue 535,716 $192,450
Net loss from operations ($2,421,755 ) ($1,796,706 )
Loss per share – Basic ($0.01 ) ($0.05 )
Total assets $18,263,856 $24,975,395
Total liabilities $1,366,813 $1,143,042
Outstanding Shares – Basic 349,480,703 265,046,846
Outstanding Shares – Fully Diluted 474,563,137 296,241,826

Restatement of Acquisition of Assets of Unomobi Inc.

After discussions with its auditors, Poynt Corp. will be restating the 2010 financial statements commencing the quarter ended March 31, 2010, as soon as possible, to reflect higher values assigned to the two patents and Email to SMS patent pending technology acquired in the Unomobi asset purchase. These patents have priority to 1999 and concern the pushing of commercial offers to users of GPS-equipped portable wireless devices who provide limited profile data. The accounting rules require that the share price on the date of closing of the transaction, February 16, 2010, be used when determining the purchase price. Based on the closing price of Poynt Corp.'s common shares of $0.27 on this date, the share based consideration will be restated to a total of $25.6 million. Previously, the Company recorded the transaction using $0.065 per share based on an average closing price on the TSX-V over a reasonable period before and after the date on which the terms of purchase consideration was agreed to and announced with a total share based consideration of $6.2 million. The restatement has resulted in an increase to the purchase price allocation, net of future taxes, to the patent portfolio of $19.5 million from $7.9 million to $27.4 million. The restatement has an effect on the value of the intangible assets, the amortization of the intangible assets and future income taxes related to the amortization. For further information regarding the restatement, please refer to notes 2 and 18 in the Company's March 31, 2011 unaudited interim consolidated financial statements and management's discussion and analysis that can be found on SEDAR at www.sedar.com.

First Quarter 2011 Highlights

Activities in the first quarter of 2011 have included the launch of a Research In Motion sponsored BlackBerry® Super App television commercial airing in the United States & Canada and co-marketing opportunities with Windows Phone 7 and Nokia. To date, Poynt's unique user base has grown from 4,854,061 on January 1, 2011 to 6,814,793 on March 31, 2011. Poynt grew by an average of 30,000 new users daily during the month of February 2011 and continues to see strong growth on all platforms.

On January 11, 2011 the Company added an Events vertical to the App to provide more relevant local content for North American BlackBerry smartphone and Android device users. The new Events feature displays current and upcoming local events, as well as detailed event information, including turn-by-turn directions. With this update, Poynt users on BlackBerry smartphones and Android devices have the added benefit of quick and accessible local event listings simply by selecting the Events icon displayed on the App's home screen. Poynt provides users with up to the minute event listings and details through its content partner Eventful, the leading digital media company connecting 20 million consumers to local events. On February 15, 2011, the Company expanded this offering to Poynt users in the United Kingdom.

On January 12, 2011, The United States Patent and Trademark Office awarded Patent No. 7,941,430 to Poynt Corp. The fourth in the Company's portfolio of patents, this patent provides protection for the delivery of multi-mode location based E-directory services, enabling method, system and apparatus. The new patent marks an important protective feature and barrier to entry for competitors of the Company's location-based search (LBS) model, allowing for the delivery of location-based, contextual and relevant data, sorted by proximity to users. This granted patent allows a method of returning proximity sorted directory results to a mobile device user, based on automatic location detection on a mobile communication device and a search query. At least one E-directory query result and one web query result are compared, results are sorted based on proximity to the location detected, duplicates are deleted, and the results are delivered to the users. In some cases, additional information related to the listing, such as promotions or websites, are added to the results.

The first quarter of 2011 marked extensive global expansion of the App in Europe. On January 11, 2011 the Company also expanded platforms in the European Market adding Poynt for Android in Germany. This was followed on January 13, 2011 with the launch of online restaurant reservations, reviews and listings powered by toptable, in the App for users in the United Kingdom. Poynt for iPhone was launched in Germany on February 14, 2011. The same day the Company announced expansion to iPhone users in the Australian market.

On February 3, 2011 the Company announced the completion of the acquisition of the local advertising publishing platform assets from go2 Media, Inc. (the "Transaction"). The Transaction included the acquisition of certain key technologies and contracts to allow Poynt to publish mobile advertising to third party publishers.

Capitalizing on the power of social media, the Company furthered App depth on February 14, 2011 by integrating the ability to share Poynt local search results on Facebook and Twitter. The feature is available across all geographic regions including Canada, the United States, the United Kingdom, France, Germany, Spain, Italy and Australia.

On February 16, 2011 Poynt Corp. announced that it had joined the NAVTEQ LocationPoint Ad Network as a publisher. The deal extends the NAVTEQ LocationPoint ad network, among the fastest-growing location-aware mobile ad networks in the world, to millions of users of Poynt.

On March 11, 2011 the Company announced that over 1 billion consumer queries and resulting actions had been performed using Poynt. The data includes searches within the App's seven feature verticals: Businesses, People, Movies, Events, Gas, Restaurants and Weather as well as the behavioral data that indicates consumer intent such as clicking to call, clicking to browse and mapping directions.

On March 16, 2011 the Company announced it entered into an agreement with Versant Partners Inc. to act as lead agent on behalf of a selling group which included Roth Capital Partners in the United States for a private placement to be carried out on a commercially reasonable best efforts basis to one or more strategic investors of up to 78,947,368 special warrants ("Special Warrants") of the Company at a price of $0.19 per Special Warrant for gross proceeds of up to approximately $15 million (the "Offering"). Following the end of the quarter, on April 4, 2011 the Company announced it has closed its previously announced private placement of special warrants for gross proceeds of $15.5 million, which included the issuance of an additional 2,631,579 Special Warrants at a price of $0.19 per Special Warrant for additional gross proceeds of $500,000. The Offering was placed to certain strategic investors with Socius Capital Group ("Socius") being the lead participant with an investment of $10 million. Socius, with offices in Los Angeles and New York, has an impressive record of investing in emerging growth companies.

Research and development surrounding the delivery of Poynt to additional mobile platforms continued with the launch of Poynt for Nokia QT on March 18, 2011 in Canada, the United States, the United Kingdom and Australia. Poynt for Nokia QT launched in Germany, Italy, France and Spain on April 12, 2011. Global expansion of the Poynt application is also being furthered with the expected launch of their timesPoynt product in India during Q3-2011.

Outlook

Poynt Corp. continues to focus on two main areas of growth: user growth though the addition of new users as well as increased retention of existing users, and the growth of the advertising product. Increased usage through new users and stronger retention create additional page views, which can be monetized through the advertising platform.

In relation to those efforts, the Company is pursuing additional distribution agreements with carriers, which shortens the discovery process for consumers and increases user numbers, while the marketing team is pursuing opportunities to create consumer awareness of the App and its capabilities.

The Company is reviewing new content and functionality to further engage the user base and increase the average number of monthly queries. This in turn increases "pageviews" which translates into increased inventory for advertising opportunities.

A copy of the Company's March 31, 2011 unaudited interim consolidated financial statements and management's discussion and analysis can be found on SEDAR at www.sedar.com.

About Poynt Corporation

Poynt Corp. (about.poynt.com) is a global leader in the mobile local advertising space. Their Location Based Search application, Poynt (www.poynt.com), enhances the consumers' ability to connect with the people, businesses and events most important to them. Poynt is available on iPhone and iPod Touch, Android, Nokia QT and Windows Phone 7 devices, BlackBerry® smartphones and BlackBerry PlayBook™ Tablets in Canada, the United States, Europe and Australia. Poynt Corp. entered the mobile publishing space with the recent acquisition of an advertising publishing platform. Key contracts on both the supply and demand sides of advertising are in place to provide inventory into the platform and publishers to display the inventory. Whether through the Poynt Local Search App or the Ad Publishing Platform, Poynt Corp. simplifies connecting consumers with businesses, retailers and events. Headquartered in Calgary, AB, Canada, Poynt Corp. trades on the TSX Venture Exchange under the symbol PYN.

Forward Looking Statements

This news release contains forward-looking statements relating to, among other things: effect of increased user acquisition and retention on revenues; expected growth potential of user base; expectation regarding revenue growth in the second half of the year and its effect on offsetting operating expenses; benefits of the new Events feature; impact of new granted patent on competitors of the Company's location-based search model; expected timing of launch of timesPoynt product in India; revenue potential associated with the NAVTEQ partnership; the focus and development plans of Poynt Corp.'s business development team, marketing team and management team and the benefits to the Company therefrom; effect on the Company's position of the restatement of the financial statements; effect of increased usage on the Company and the App; and other statements that are not historical facts. Such forward-looking statements are subject to important risks, uncertainties and assumptions. The results or events predicated in these forward-looking statements may differ materially from actual results or events. As a result, you are cautioned not to place undue reliance on these forward-looking statements.

These forward-looking statements are based on certain key assumptions regarding, among other things: future technological developments; the cost of expanding product lines; the impact of increasing competition; the continuity of existing business relationships; the continued successful development, implementation and execution of the Company's Poynt application; conditions in general economic and financial markets; the ability to complete previously announced transactions; ability to obtain all necessary regulatory approvals; and our ability to obtain financing on acceptable terms. Material risk factors that could cause actual results to differ materially from the forward-looking information include, but are not limited to: the deteriorating economic and market conditions that could lead to reduced spending on information technology products; competition in our target markets; potential capital needs; management of future growth and expansion; the development, implementation and execution of the Company's strategic vision; risk of third-party claims of infringement; protection of proprietary information; customer acceptance of the Company's existing and newly introduced products; the success of the Company's brand development efforts; risks associated with strategic alliances; reliance on distribution channels; product concentration; need to develop new and enhanced products; failure to obtain necessary regulatory approvals; potential product defects; our ability to hire and retain qualified employees and key management personnel; risks associated with changes in domestic and international market conditions and the entry into and development of new markets for the Company's products and the risks described under "risk factors" in our Annual Information Form for the year ended December 31, 2010 which is available on our Sedar profile (www.sedar.com).

The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, the Company undertakes no obligation to comment on expectations of, or statements made by, third parties in respect of the forward-looking statements identified above.

*Telecom Regulatory Authority of India news release dated February 9, 2010: Telecom Subscription Data as on 31st December 2010. For more information visit: http://www.trai.gov.in/WriteReadData/trai/upload/PressReleases/798/prerdiv9feb11.pdf

The BlackBerry and RIM families of related marks, images and symbols are the exclusive properties and trademarks of Research In Motion Limited. Apple App Store and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. Windows is a registered trademark of Microsoft Corporation in the United States and other countries. Android is a registered trademark of Google Inc.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Public Relations Contact:
    Evie Carter
    FortyThree PR, Inc.
    831-401-3175
    poynt(at)43pr.com

    Poynt Corporation:
    Andrew Osis
    President & CEO
    403-313-3719
    http://about.poynt.com