SOURCE: Spiral Toys, Inc.

Spiral Toys, Inc.

June 30, 2016 06:00 ET

Spiral Toys Provides Product Update and 2016 Outlook

LOS ANGELES, CA--(Marketwired - Jun 30, 2016) - Spiral Toys, Inc. (OTCQB: STOY), a leading provider of mobile-connected, wireless entertainment technology, offering complete developmental solutions in the Internet of Things space ("IoT"). The team at Spiral Toys, Inc ("Spiral") has developed two new mobile-connected consumer products launching into the marketplace just in time for the holiday season.

With Spiral's success with CloudPets in 2015, Spiral has been approached by large media, game and toy companies to develop products using its proprietary software. Mobile connected IoT is continuing to grow and Spiral is well positioned to be a market leader. Spiral expects to make announcements in the coming months on some new lines of business it has been developing. 

Product Updates:

CloudPets -- Last month, Spiral launched its new CloudPets app monetization strategy by releasing a new premium mobile app for iOS at $2.99 which includes all of its current content fully unlocked and freely available for its users. The content includes stories, games and lullabies that were previously available as in-app purchases. The change from in-app purchases to the premium app has yielded an increase in software revenue with a 30% conversion rate from free to the premium. Spiral expects to see a significant increase in premium app revenue, as approximately 500,000 new units should be hitting the retail shelves in the next few months. This, along with continued optimization of the new app over the next several quarters, will achieve the highest possible revenue per install. Along with the paid app, an ad supported free version is still available for users who only desire to use the messaging features with the CloudPets toy. The ad revenue from the free app continues to grow as we fine tune the experience. An Android version of the premium app is being planned for release in July.

A second premium CloudPets StoryTime app is being planned for next quarter leveraging Spiral's partnership with Rosetta Stone. 

In addition, Spiral is in discussions with several digital story publishers to launch a line of new story-time toys leveraging our proprietary Bluetooth low-energy streaming technology. This technology will enable digital publishers to acquire customers through physical toys and create a new revenue stream. 

Wiggy -- Spiral has received a positive response from customers thus far. The need to start teaching financial responsibility at a young age is an important issue with today's family. In April, Wiggy was released in a pre-sale campaign and has continued to gain traction. The reason Spiral runs pre-sale campaigns is not to sell product but to learn valuable data from its potential customers. During the campaign there were over 100,000 visits to the website. Spiral has received feedback from parents on what is important to them and will use this data to put the final tweaks into the product and get prepared for a nationwide launch.

Spiral has expanded the current feature set to include parent approved ecommerce transactions by potentially partnering with large online retailers such as Amazon and Walmart through their affiliate programs. This affiliate program will become an additional revenue stream for Spiral. In addition, Spiral is developing a debit card program with a leading nationwide debit card provider. Doing so will allow parents to set-up a debit card for their children from their Wiggy account. This program will also become a reoccurring monthly revenue stream for Spiral. Spiral has found multiple avenues for maximizing the revenue opportunity with Wiggy by developing these revenue streams. 

The Spiral team has been busy preparing for Wiggy production. The product will enter a full production run later this month and expects products to be land in the US by September 1st of this year. 

Spiral has a sales team working with several credit union and banking institutions to build a great banking product using Wiggy. In parallel, Spiral is also finalizing the retail program by partnering with Leisure Time Inc, a leading retail sales representation group, for this holiday season. Spiral signed an agreement with Leisure Time this month to handle sales with Walmart, Target, TRU, Costco, and Sams. Spiral anticipates launching Wiggy on Amazon to maximize sales. Spiral expects to have a sales update in early Q3. 

Rosetta Stone -- Spiral is currently in the process of finalizing the physical Rosetta Stone toy and application to launch in the 2nd half of 2016. Spirals partnership with Rosetta Stone has proven to be extremely smooth and Spiral looks forward to bringing it to market later this year. Rosetta Stone has won several awards with their software and Spiral expects similar results with the new product later this year. 

New Products - Spiral's YouTube technology products have given way to several new concepts. In addition to TubeFriends, which will be tested next quarter, the new product lines promise to take the YouTube and Facebook video platforms to new heights. Based on proprietary technology that Spiral developed in partnership with Taiwanese IC manufacture Sonix, it allows YouTube influencers to interact with real products from short form video. Spiral estimates digital video marketing spend for this year alone will exceed $9.8 Billion with an estimated $22 Billion untapped revenue that can be monetized from video consumption. Spiral's strategy is to create new experiences that can capture a portion of the untapped market.

"Over the last 2 years Spiral has continued to develop new technology and experiences. We have built manufacturing capabilities and the ability to reach our customers through different marketing channels. We also have a long list of products that we plan to launch over the next 12 months leveraging our technology platforms," commented Spiral CEO Mark Meyers. "Launching several products into this holiday season, our focus for the second half of 2016 is to continue to build partnerships and distribution. We are also focused on leveraging brands, such as Rosetta Stone, to create new experience around existing properties. We will have a diversified strategy so that we can maximize our opportunity on every product we create and grow as a company." 

About Spiral Toys Spiral Toys (OTCQB: STOY) is a California-based company with a business, founded by a former senior executive of Disney and Sony, focused on developing and marketing products and mobile applications in the mobile-connected space. Spiral's mobile-connected entertainment platform connects physical items to today's top mobile devices through wireless technologies, creating a new kind of interactive user experience.

Spiral sells its products worldwide, and is developing additional applications based on its platform technology for several different verticals within the entertainment industry. Spiral collects revenue on both the physical purchase of goods and the sale of digital content through Apple's App Store and the Google Marketplace. The company also acts as co-developer with major entertainment studios. For more information, visit www.spiraltoys.com.

Forward-Looking Statements All statements in this press release that are not based on historical fact are "forward-looking statements." The terms "expects", "would", "will", "believes", and similar terms are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by Spiral Toys in light of its experience and its perception of current conditions and expected future developments, as well as other factors that Spiral Toys believes are appropriate in the circumstances. Many factors could cause Spiral Toys' actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. These risk factors and others relating to Spiral Toys that may cause actual results to differ are set forth in Spiral Toys' periodic filings with the U.S. Securities and Exchange Commission (copies of which filings may be obtained at www.sec.gov). These factors should be considered carefully, and readers should not place undue reliance on Spiral Toys' forward-looking statements. Spiral Toys has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.