SOURCE: uSell.com, Inc.

usell.com, Inc.

May 14, 2015 09:00 ET

uSell.com Announces First Quarter 2015 Results

Year-Over-Year Increase of 39% in Orders Completed; Processed $19.5 Million in Gross Merchandise Value Over Last 12 Months

NEW YORK, NY--(Marketwired - May 14, 2015) -  uSell.com (OTCQB: USEL), the leading US-based reCommerce marketplace that instantly finds cash offers for used smartphones and electronics, announced today results for the first quarter ended March 31, 2015.

Highlights:

  • Facilitated over 500,000 transactions to-date
  • Increased Orders Completed by 39%, year-over-year, to 46,700 devices while decreasing sales and marketing expenditures by 7%
  • Processed $19.5 million in Gross Merchandize Value over last 12 months, since tracking this metric
  • Implemented $2.4 million in annualized savings in marketing spend and marketing staff; effects beginning in April

The cost cutting measures were implemented in response to shifting industry dynamics, wherein carrier trade-in programs have begun to advertise heavily and collect large volumes of used consumer smartphones. In response to this shift, uSell made the strategic decision to pursue a wholesale device acquisition strategy rather than relying solely on direct to consumer marketing.

Nik Raman, Chief Executive Officer, stated, "Given the increasing importance of the carrier trade in programs, uSell has decided to shift the bulk of its investment from consumer marketing to technology. uSell is uniquely positioned to utilize its marketplace technology to enable large wholesalers and processors that purchase from the carriers to sell to our ever growing network of buyers. Growth through such wholesale channels will enable us to expand our marketplace in a far more efficient manner."

Financial Results:

First Quarter Ended March 31, 2015 Compared to First Quarter Ended March 31, 2014

For the first quarter ended March 31, 2015, revenues were $2.1 million, a 113% increase from $1.0 million for the quarter ended March 31, 2014. Net loss for the quarter ended March 31, 2015 decreased by $1.3 million, from a loss of $2.8 million for the quarter ended March 31, 2014 to a loss of $1.5 million. The resulting EPS is ($0.20), as compared to ($0.55) in the year-ago quarter. 

For the quarter ended March 31, 2015, there was $0.4 million of non-cash expenses, resulting from stock-based compensation and depreciation and amortization. For the quarter ended March 31, 2014, there was $2.0 million of non-cash expenses, which mainly resulted from the amortization of the remaining debt discount into interest expense upon the conversion of certain convertible notes in February 2014, the change in the market value of the derivative liability on the convertible notes through the date of conversion, stock-based compensation expense and depreciation and amortization. As of March 31, 2015, the Company had $1.1 million in cash.

About uSell.com, Inc.
uSell.com is a reCommerce marketplace that helps individuals turn unused items into cash. uSell ensures that customers get the highest payouts with the least amount of hassle by facilitating risk-free transactions with professional buyers. For uSell's buyers, uSell offers a scalable technology, marketing, logistics, and analytics solution that provides a high volume of inventory at a low acquisition cost. Visit www.uSell.com

   
   
uSell.com, Inc. and Subsidiaries  
Consolidated Balance Sheets  
   
    March 31,     December 31,  
    2015     2014  
    (unaudited)        
Assets                
Current Assets:                
Cash and cash equivalents   $ 1,129,830     $ 2,414,757  
Accounts receivable, net     142,662       141,327  
Inventory     158,200       -  
Prepaid expenses and other current assets     81,451       99,529  
Total Current Assets     1,512,143       2,655,613  
                 
Property and equipment, net     5,535       6,928  
Intangible assets, net     861,193       852,093  
Other assets     25,875       25,875  
                 
Total Assets   $ 2,404,746     $ 3,540,509  
                 
Liabilities and Stockholders' Equity                
Current Liabilities:                
Accounts payable   $ 258,525     $ 539,566  
Accrued expenses     520,845       168,093  
Deferred revenue     289,818       263,739  
Total Liabilities     1,069,188       971,398  
                 
Stockholders' Equity:                
Convertible Series A preferred stock; $0.0001 par value; 325,000 shares authorized; 100,000 shares issued and outstanding. Liquidation preference $300,000     10       10  
Convertible Series B preferred stock; $0.0001 value per share; 4,000,000 shares authorized; 951,250 shares issued and outstanding. Liquidation preference $951,250     95       95  
Convertible Series C preferred stock; $0.0001 value per share; 146,667 shares authorized; 146,667 shares issued and outstanding.     15       15  
Convertible Series E preferred stock; $0.0001 value per share; 103,232 shares authorized; 103,232 shares issued and outstanding     10       10  
Common stock; $0.0001 par value; 43,333,333 shares authorized; 7,572,703 shares issued and 7,539,373 and 7,533,817 shares outstanding, respectively     754       753  
Additional paid in capital     54,847,216       54,610,843  
Accumulated deficit     (53,512,542 )     (52,042,615 )
Total Stockholders' Equity     1,335,558       2,569,111  
                 
Total Liabilities and Stockholders' Equity   $ 2,404,746     $ 3,540,509  
                 
                 
                 
uSell.com, Inc. and Subsidiaries  
Consolidated Statements of Operations  
(Unaudited)  
   
    Three Months Ended March 31,  
    2015     2014  
Revenue   $ 2,142,983     $ 1,005,999  
                 
Costs and Expenses                
  Cost of revenue     1,442,519       143,126  
  Sales and marketing expenses     1,006,023       1,085,439  
  General and administrative expenses     1,164,083       1,060,717  
    Total operating expenses     3,612,625       2,289,282  
Loss from Operations     (1,469,642 )     (1,283,283 )
                 
Other (Expense) Income:                
  Interest income     532       274  
  Interest expense     (817 )     (891,279 )
  Gain on settlements of accounts payable     -       9,038  
  Change in fair value of derivative liability - convertible notes payable     -       (681,122 )
Total Other (Expense) Income, Net     (285 )     (1,563,089 )
Net Loss   $ (1,469,927 )   $ (2,846,372 )
                 
Basic and Diluted Loss per Common Share:                
Net loss per common share - basic and diluted   $ (0.20 )   $ (0.55 )
                 
Weighted average number of common shares outstanding during the period - basic and diluted     7,533,817       5,219,842  
                 
                 
                 
uSell.com, Inc. and Subsidiaries  
Consolidated Statements of Cash Flows  
(Unaudited)  
   
    Three Months Ended March 31,  
    2015     2014  
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net loss   $ (1,469,927 )   $ (2,846,372 )
  Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:                
    Depreciation and amortization     163,035       122,554  
    Provision for bad debt     -       8,835  
    Stock based compensation expense     246,541       316,947  
    Amortization of debt issue costs into interest expense     -       8,645  
    Amortization of debt discount into interest expense     -       873,872  
    Gain on settlement of accounts payable     -       (9,038 )
    Change in fair value of derivative liability - convertible notes payable     -       681,122  
Changes in operating assets and liabilities:                
    Accounts receivable     (1,335 )     67,330  
    Other receivables     -       20,422  
    Inventory     (158,200 )     -  
    Prepaid and other current assets     7,911       (33,552 )
    Accounts payable     (281,041 )     (5,189 )
    Accrued expenses     352,752       40,516  
    Deferred revenues     26,079       5,041  
      Net Cash and Cash Equivalents Used In Operating Activities     (1,114,185 )     (748,867 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Website development costs     (170,742 )     (143,018 )
      Net Cash and Cash Equivalents Used In Investing Activities     (170,742 )     (143,018 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from sale of common stock     -       1,774,999  
Proceeds from sale of convertible Series A preferred stock     -       300,000  
Cash paid for direct offering costs     -       (90,766 )
      Net Cash and Cash Equivalents Provided By Financing Activities     -       1,984,233  
                 
Net (Decrease) Increase in Cash and Cash Equivalents     (1,284,927 )     1,092,348  
Cash and Cash Equivalents - Beginning of Period     2,414,757       489,166  
                 
Cash and Cash Equivalents - End of Period   $ 1,129,830     $ 1,581,514  
                 
SUPPLEMENTARY CASH FLOW INFORMATION:                
Cash Paid During the Period for:                
    Interest   $ -     $ -  
    Taxes   $ -     $ -  
                 
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:                
Derivative liability reclassified to Additional Paid in Capital upon conversion of Convertible Notes Payable   $ -     $ 1,682,507  
Conversion of Convertible Notes Payable and accrued interest to common stock   $ -     $ 841,294  
                 
Conversion of Convertible Notes Payable and accrued interest to Series E preferred stock   $ -     $ 309,698  
Common stock issued for services   $ -     $ 21,195  
Issuance of Series C preferred stock in exchange for warrants   $ -     $ 15  
Conversion of Series B preferred stock into common stock   $ -     $ 3  
                 

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