Poynt Corporation

Poynt Corporation

August 24, 2011 16:05 ET

Poynt Corporation Reports Record Second Quarter 2011 Results

Global Expansion and Preload Agreements Drive User and Revenue Growth

CALGARY, ALBERTA--(Marketwire - Aug. 24, 2011) - Poynt Corporation (TSX VENTURE:PYN) (the "Company" or "Poynt Corp."), a leading provider of mobile local search services with its award-winning Poynt mobile local search app ("Poynt" or the "App"), reported results for its second quarter ended June 30, 2011. All figures below are in Canadian dollars.

Q2 2011 Operational Highlights

  • Users of Poynt surpassed more than 8.5 million by the end of the quarter, up 165% year-over-year and driving record revenue

  • Signed preload agreement with Sprint Nationwide Network for two of their pre-paid brands --Virgin Mobile USA and Boost Mobile

  • Engaged Gladios IP, a subsidiary of Wi-LAN Inc., to monetize and protect Poynt Corp.'s patent portfolio (see "Patent Portfolio Protection and Monetization," below)

  • Granted a fourth patent (No. 7,941,430) allowing for the delivery of location-based, contextual and relevant data, sorted by proximity to users

  • Launched Poynt on Nokia Qt devices in Germany, France, Italy and Spain, building upon increasing adoption in Canada, the United States, the United Kingdom and Australia

  • Launched Poynt on the BlackBerry Playbook tablet

  • Missing Children Society of Canada partnered with Poynt Corp. to push geo-relevant and timely child search alerts to Poynt users worldwide

  • Signed a multi-year agreement with Mocean Mobile, a leading mobile advertising platform, allowing advertisers to streamline and maximize revenue opportunities through a single interface

  • Partnered with SEAT Pagine Gialle, the leading online yellow pages directory in Italy, to access SEAT's directory of four million listings for Poynt users

Q2 2011 Financial Results

Revenues increased 167% to a record $573,399 from $214,734 in the same quarter a year ago. The improvement was primarily due to the continued increase in Poynt user adoption. Revenues in the second quarter of 2011 were comprised of $419,000 in advertising revenues and $125,000 in fixed licensing fees.

Net loss was $3.7 million or $(0.01) per basic share, compared to a net loss of $2.2 million or $(0.01) per basic share in the same year-ago quarter. The larger loss was primarily due to an increased investment in human capital in the areas of engineering, business development and marketing to address growth opportunities in geographies, features, and display and platform advertising.

Net loss for the second quarter of 2011 included $1,024,000 of non-cash items, comprised of $794,000 of amortization and depreciation, $229,000 of stock based compensation and $1,000 of loss on the disposition of fixed assets. After adjusting for these non-cash items, Q2 2011 net cash loss was approximately $2.6 million.

At June 30, 2011, cash and cash equivalents totaled $11.5 million, as compared to $1.9 million at December 31, 2010. The increase was due to a $15.5 million private placement completed in April 2011.

Poynt User Stats for 12-Months Ended June 2010 and 2011

  • New users per day averaged 23,880, an increase of 190% from 8,224 average new users per day in the same period in 2010

  • Total unique users increased 25% to 8.5 million from 6.8 million at the end of the previous quarter, and increased 166% from 3.2 million in the same year-ago period

  • Year-over-year user growth was driven by greater awareness of the Poynt brand through marketing efforts, preloads, and the expansion of the Poynt offering across mobile platforms, geographies as well as application features

Total Unique Users at End of Period Avg. Query / Active User Total Queries
(Month of June)
Total Interactions
June 2011 (millions) 8.5 million 30 74 million 1.58 billion
June 2010 (millions) 3.2 million 21 24 million 413 million
Year/Year Increase 165.6% 42.8% 208.3% 283%
  • In July, 2011, the average number of queries per active user increased to 33. As of August 23, 2011, the total unique user base had increased to 9.5 million.

Poynt Corp.'s revenue model includes user queries, page views, advertising and transactions within the App, with user growth a key metric that drives the Company's revenue forward globally. More Poynt users equate to increased queries, page views and transactions. Poynt provides highly contextual and relevant advertising to its user base when they perform queries. Large user numbers attract advertising customers and facilitate mobile commerce, such as daily deals and mobile couponing.

Management Commentary

"The continued top-line growth during the second quarter was the result of increased user adoption of the Poynt App across multiple platforms, as well as adding new revenue streams, like online transactions," said Andrew Osis, president and CEO of Poynt Corp. "The increasing adoption reflects our focus on expanding Poynt's feature set with user-relevant content and capabilities that promote daily use.

"Preload agreements with mobile operators have been significant drivers for increasing Poynt's user base for it to become one of the most widely-adopted mobile applications worldwide. In fact, existing preloads contributed more than 300,000 of the 700,000 new users in June. We estimate that for each Poynt App preloaded on a Smartphone device, around 34% become active users who generate more than 35 queries per month. Our average queries-per-month by active users has also increased more than 130% year-over-year.

"As preloads continue to be an important driver for our growth, we are working on signing several new preload agreements with carriers in the U.S., Western Europe, and Asia, which has the potential to add more than 50 million new Poynt users. We anticipate increased user acquisition and retention will broaden revenue streams over time, augmented by the monetization of our IP portfolio.

"We expect the expansion of our sales team to support our goal of increasing inventory fill rates over the next two quarters. In fact, we are well positioned to leverage the holiday season as the catalyst for major advertising spend and anticipate being included in many Q4 media buys. Combined with global expansion and the continued climb in our user numbers, we expect a strong finish to the year."

Patent Portfolio Protection and Monetization

At the beginning of June 2011, Poynt Corp. engaged Gladios IP, a subsidiary of WiLAN Inc., to assist in the licensing of Poynt Corp.'s portfolio of patents related to Internet advertising. Gladios IP will have day-to-day responsibility for developing programs aimed at licensing Poynt Corp.'s patent portfolio. Over the last several years, Wi-LAN has licensed intellectual property worth hundreds of millions of dollars from more than 250 companies around the world.

During the quarter, Poynt Corp. was issued an important U.S. patent, No. 7,941,430. This patent marks an important protective feature and barrier to entry for competitors of Poynt Corp.'s location-based search (LBS) model, allowing for the delivery of location-based, contextual and relevant data, sorted by proximity to users. Poynt's technology couples user-stated intention with relevant, local information, which are the key drivers in providing transactional capabilities within any pre-defined geographic area.

Restatement of Acquisition of Assets of Unomobi Inc.

Further to the press release issued by the Company on June 30, 2011, Poynt Corp. is continuing to prepare its 2010 restated financial statements commencing with the quarter ended March 31, 2010 and the restated financial statements will be filed on SEDAR as soon as possible. After discussions with its auditors, Poynt Corp. is restating its 2010 financial statements to reflect higher values assigned to the two patents and Email to SMS patent pending technology acquired in acquisition of Unomobi, Inc. 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 19 in the Company's June 30, 2011 unaudited interim consolidated financial statements and management's discussion and analysis which can be found on the Company's SEDAR profile at www.sedar.com.

Conference Call

Poynt Corp. will hold a conference call later today (August 24, 2011) at 4:30 p.m. Eastern time (2:30 p.m. Mountain time) to discuss results for the second quarter ended June 30, 2011.

The Company's president and CEO, Andrew Osis, will host the presentation followed by a question and answer period.

Date: Wednesday, August 24, 2011

Time: 4:30 p.m. Eastern time (2:30 p.m. Mountain time)

Dial-In Number: 1-877-941-1427

International: 1-480-629-9664

Conference ID#: 4467532

Participants should call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization and ask you to wait until the call begins. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

To listen to the live webcast please go to http://viavid.net/dce.aspx?sid=00008C1F. A replay of the webcast will be available following the conclusion of the call via Poynt's website at http://about.poynt.com.

A replay of the call will be available after 7:30 p.m. Eastern time (5:30 p.m. Mountain time) today and until September 24, 2011.

Toll-free replay number: 1-877-870-5176

International replay number: 1-858-384-5517

Replay pin #: 4467532

About Poynt Corporation

Poynt Corp. (about.poynt.com) is a global leader in the mobile local advertising space. Its Location Based Search (LBS) application, Poynt (www.poynt.com), enhances a user's 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 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.

Important Cautions Regarding Forward-looking Statements

This news release contains forward-looking statements relating to: the Company's focus on expanding Poynt's feature set; estimated number of active users as a result of pre-load agreements; expectations regarding additional preload agreements; growth in number of new users and continued user growth; estimated number of active users as a result of preloads; effect of increased user acquisition and retention on broadening revenue streams; expectations regarding inventory fill rates in Q3 and Q4; expectations regarding the App's inclusion in Q4 media buy budgets; 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 App; continued growth in number of active users of the App; 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; failure of counterparties to perform on contracts; failure to successfully negotiate contracts; failure to successfully negotiate additional preload agreements; risk that the App may not be included in Q4 media buy budgets; 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.

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. Nokia is a registered trademark of Nokia Corporation.

Poynt Corporation

Consolidated Balance Sheets

June 30, 2011
December 31, 2010
Current Assets
Cash and cash equivalents 11,468,182 1,930,048
Accounts receivable 463,813 188,381
Goods and services taxes recoverable 134,067 31,474
Prepaid expenses and deposits 951,659 154,869
13,017,721 2,304,772
Non-current Assets
Prepaid expenses and deposits 54,358 66,158
Property and equipment 898,449 297,063
Intangible assets 16,341,644 18,565,071
17,294,451 18,928,292
Total Assets 30,312,172 21,233,064
Current Liabilities
Accounts payable 1,417,449 828,444
Deferred revenue - 250,000
Provision 99,024 36,850
Current portion of obligation under finance lease 99,443 69,606
1,615,916 1,184,900
Non-current Liabilities
Provision 63,206 14,454
Obligation under finance lease 125,158 96,853
188,364 111,307
Shareholders' Equity
Share capital 64,195,844 49,295,125
Warrants 1,237,380 1,271,280
Compensation options and warrants 3,195,722 2,510,479
Contributed surplus 3,237,525 2,804,138
Retained deficit (43,358,579) (35,944,165)
28,507,892 19,936,857
Total Liabilities and Shareholders' Equity 30,312,172 21,233,064

Poynt Corporation

Consolidated Statements of Operations

For the three months ended
June 30,
For the six months ended
June 30,
(note 2)
(note 2)
Sales 543,645 196,214 1,059,090 370,168
Rental income 19,299 18,099 38,598 36,198
Interest income 10,455 421 11,427 818
573,399 214,734 1,109,115 407,184
Salary and consulting fees (2,035,423) (1,089,118) (3,313,964) (1,966,404)
Administration, occupancy and insurance (490,147) (313,058) (965,505) (606,357)
Stock based compensation (228,742) (96,887) (469,708) (221,267)
Advertising and marketing (319,943) (302,152) (502,692) (608,963)
Professional fees (355,300) (31,109) (426,797) (100,223)
Depreciation of property and equipment (48,949) (36,850) (82,347) (63,933)
Amortization of intangible assets (745,006) (571,035) (1,419,969) (862,218)
Operating loss (3,650,111) (2,225,475) (6,071,867) (4,022,181)
Impairment of intangible assets - - (1,338,854) (7,155,981)
Loss on disposition of assets (910) - (910) -
Finance costs (1,313) - (2,783) -
Total comprehensive loss for the period attributable to shareholders of the Company (3,652,334) (2,225,475) (7,414,414) (11,178,162)
Loss per share
Basic and diluted (0.01) (0.01) (0.02) (0.05)

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

  • Poynt Corporation
    Andrew Osis
    President & CEO

    FortyThree PR, Inc.
    Evie Carter
    Public Relations Contact

    Liolios Group, Inc.
    Scott Liolios or Matt Glover
    Investor Relations