a
60 Cutter Mill Rd.
Suite 205
Great Neck, NY
11021
Tel: 516.444.3400
Fax: 516.444.3404

 

Press Releases

Press Release Source: DAG Media, Inc.

DAG Media, Inc. Reports Fiscal Year 2006 Consolidated 
Financial Statements

Monday, March 26

NEW YORK, -- DAG Media Inc -- Dag Media, Inc. announced today that basic and diluted net loss per common share was $(0.05) in fiscal year 2006 versus net loss per common share of $(0.16) in fiscal year 2005.

Net sales from continuing operations for the year ending on December 31, 2006 were $232,000 versus net sales of $0 for the year ending on December 31, 2005. The increase in net sales is due to $212,000 in sales made through Shopila's market places since Shopila's acquisition on October 11, 2006. $10,000 of the net sales are attributable to subscription revenues at nextyellow.com.

Loss from operations for the year ending on December 31, 2006 was $1,107,000 compared to a loss of $651,000 for the year ended December 31, 2005, an increase of $456,000, or 70.0%. Of this increase $138,000 is due to nextyellow.com web development expenses and $105,000 represents marketing expenses associated with the operation of www.nextyellow.com and www.shopila.com. $173,000 represents an increase in compensation expenses due to the adoption of SFAS 123R effective January 1, 2006.

For the year ended December 31, 2006, consolidated loss from continuing operation was $867,000 or $(0.27) per basic and diluted share (based on 3.178 million shares), compared to a loss of $138,000 or $(0.04) per basic and diluted share (based on 3.118 million shares), in fiscal year 2005. The increase in loss of $729,000 resulted mainly from the increase in operating costs due to the operations of Next Yellow and the acquisition of www.shopila.com in October 11, 2006 and an increase in non-cash compensation expenses relating to the adoption of SFAS 123(R) effective January 1, 2006. The decrease in other income of $286,000 is primarily attributable to realized losses on marketable securities in 2006 compared to realized gains on marketable securities in 2005.

Assaf Ran, Chairman of the board and CEO stated," During 2006 we have accomplished several more steps in our plan to establish a new operation that will be more suitable for a publicly traded company. On April 20, 2006 we sold our Jewish directories business. On June 2006 we launched www.nextyellow.com our patent pending online yellow pages solution technology and on October 11, 2006 we completed the acquisition of www.shopila.com. As we continue to build our new operations we make efforts to curb our expenses and to operate an efficient and lean team."

"We are committed to continue to strive to enhance shareholders value." added Mr. Ran.

We at DAG Media, through our subsidiaries, provide solutions to the online yellow pages industry by providing a local search and lead generation mechanism. We operate an e-commerce web site as well as several other web sites that complement our directories at http://www.nextyellow.com; http://www.shopila.com; http://www.dagmedia.com

This release contains forward-looking statements within the meaning Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the words "believe", "expect", "intend", "estimate" and similar expressions. Those statements appear in a number of places in this release and include statements regarding our intent, belief or current expectations or those of our directors or officers with respect to, among other things, trends affecting our financial conditions and results of operations and our business and growth strategies. These forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those projected, expressed or implied in the forward-looking statements as a result of various factors (such factors are referred to herein as "Cautionary Statements"), including but not limited to the following: (i) the successful integration of new businesses that we have acquired or may acquire; (ii) the successful consummation of the sale of our directories business; (iii) the success of our new business strategy; (iv) our limited operating history; (v) potential fluctuations in our quarterly operating results; (vi) challenges facing us relating to our growth; and (vii) our dependence on a limited number of suppliers. These forward-looking statements speak only as of the date of this release, and we caution potential investors not to place undue reliance on such statements. You should review all of our reports filed with the Securities and Exchange Commission along with this press release. We undertake no obligation to update or revise any forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Cautionary Statements.



  DAG MEDIA, INC. AND SUBSIDIARIES 
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2006


Assets

 

Current assets:

     

Cash and cash equivalents     

$ 3,630,937

Marketable securities

2,267,134

Short term investment – insurance annuity contract – at fair value

1,116,350

             Total cash and cash equivalents, marketable securities and short term investments

7,014,421

 

 

Trade accounts receivable

6,122

Due from purchasers- current portion

368,104

Other current assets

38,590

            Total current assets

7,427,237

 

 

Property and equipment, net

16,483

Goodwill and other intangible assets, net

454, 470

         Capitalized web development costs, net

123,359

         Due from purchasers- non current portion

97,222

Other assets

142,515

                      
            Total assets

 

$ 8,261,286




Liabilities and Shareholders’ Equity


Current liabilities:

 

Accounts payable and accrued expenses

$ 228,979

Promissory note

50,000

Income taxes payable

341,681

         Deferred gain from the sale of Jewish Directories- current      
         portion

 

243,057

         Current liabilities of discontinued operations

35,000

        Total current liabilities

898,717

Long term liabilities:

 

Line of credit

54,506

Deferred tax liability

67,600

Deferred gain from the sale of Jewish Directories- non current portion

97,222

                    Total Liabilities

1,118,045

              
Commitments and contingencies (Note 11)

 

 

 

Minority Interest

66,724

 

 

Shareholders’ equity:

 

Preferred shares - $.01 par value; 5,000,000 shares authorized; no shares issued

                                                       --

Common shares - $.001 par value; 25,000,000 authorized; 3,305,190 issued and 3,236,460 outstanding

 

                               3,305

Additional paid-in capital

9,023,309

Treasury stock, at cost- 68,730 shares

(231,113)

Accumulated other comprehensive loss

(127,595)

Accumulated deficit

(1,591,389)

            Total shareholders’ equity

7,076,517

                  
 Total liabilities and shareholders’ equity

 

$ 8,261,286




        DAG MEDIA, INC. AND SUBSIDIARIES
   CONSOLIDATED STATEMENTS OF OPERATIONS
    FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005

 

 2006

 

2005

Net Sales

$ 232,192

 

$ ---

Cost of goods sold

189,290

 

---

            Gross profit

42,902

 

---

 

Operating costs and expenses:

 

 

 

Selling expenses

21,035

 

---

Web development expenses

137,666

 

---

Marketing expenses

105,101

 

---

General and administrative expenses

885,688

 

  651,448

            Total operating costs and expenses

1,149,490

 

651,448

 

 

 

 

Loss from operations

(1,106,588)

 

(651,448)

 

Interest income

           
258,268

 

           
               224,977

Realized (loss) gain on marketable securities

           (45,611)

 

    288,008

Other income

            14,232

 

            ---

             Total other income

226,889

 

512,985

(Loss) from continuing operations before provision for income taxes and minority interest

                   

(897,699)                               

 

                    
           
(138,463)

Tax benefit

---

 

---

(Loss)  from continuing operations before minority interest

                 (897,699)

 

(138,463)

 

 

 

 

Minority interest

12,776

 

---

(Loss)  from continuing operations

(866,923)

 

(138,463)

 

 

 

 

Discontinued Operations:

 

 

 

Gain (loss) on the sale of discontinued operations (net of tax effect of 0 in 2006 and 2005)

 

767,939

 

                   (55,000)

Loss from discontinued operations

(75,129)

 

          (317,590)

(Loss) income from discontinued operations

692,810

 

(372,590)

Net (loss)

    $   (174,113)

 

    $   (511,053)

 

Basic and diluted net income (loss) per
common share

 outstanding

 

 

 

 

 

 

 

 

 

Continuing operations

$(0.27)

 

$(0.04)

Discontinued operations

$0.22

 

$(0.12)

 Net (loss) per common share

$(0.05)

 

$(0.16)

 

 

 

 

Weighted average number of common shares outstanding

 

Outstanding

 

 

 

- Basic and diluted

3,177,765

 

3,118,381




                                  

DAG MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005

 

     Common Stocks

Additional

Paid-in

   Capital

Treasury Shares

Stock Subscription Receivable

Deferred Compensation

Accumulated other comprehensive income (loss)

Retained Earning (Accumulated Deficit)

Totals

 

 

 

 

 

 

 

 

 

 

Shares

Amount

 

Shares

Cost

 

 

 

 

 

Balance, December 31, 2004

3,170,190

$3,170

$8,497,034

68,730

$(231,113)

---

$(53,920)

$17,312

$343,963

$8,576,446

Issuance of common stock from exercise of options

21,000

21

34,399

 

 

 

 

 

 

34,420

Issuance of common stock to related party for services not yet performed

20,000

20

47,380

 

 

(47,400)

 

 

 

---

Non cash compensation

 

 

11,361

 

 

 

27,079

 

 

38,440

Dividend declared to be paid at 1/5/2006 ($0.10 per share)

 

 

 

 

 

 

 

 

(1,250,186)

(1,250,186)

Unrealized loss on preferred stocks and other marketable securities

 

 

 

 

 

 

 

(420,824)

 

(420,824)

Net loss for the year ended December 31, 2005

 

 

 

 

 

 

 

 

(511,053)

(511,053)

Total comprehensive loss

 

 

 

 

 

 

 

 

 

(931,877)

Balance, December 31, 2005

3,211,190

3,211

8,590,174

68,730

 (231,113)

 (47,400)

 (26,841)

 (403,512)

 (1,417,276)

6,467,243

Issuance of common stock from exercise of options

4,000

4

5,516

 

 

 

 

 

 

5,520

Services performed for shares issued previous year

 

 

 

 

 

47,400

 

 

 

47,400

Non cash compensation

 

 

183,012

 

 

 

11,592

 

 

194,604

Non cash compensation to related party for service performed

 

 

108,846

 

 

 

 

 

 

108,846

Issuance of common stock to related parties

40,000

40

80,560

 

 

 

 

 

 

80,600

Issuance of common stock to Guy Mushkat for Shopila acquisition

50,000

50

70,450

 

 

 

 

 

 

70,500

Options forfeited

 

 

(15,249)

 

 

 

15,249

 

 

---

Unrealized gain on preferred stocks and other marketable securities

 

 

 

 

 

 

 

275,917

 

275,917

Net loss  for the year ended December 31, 2006

 

 

 

 

 

 

 

 

(174,113)

(174,113)

Total comprehensive lncome

 

 

 

 

 

 

 

 

 

101,804

Balance, December 31, 2006

3,305,190

$3,305

$9,023,309

68,730

$(231,113)

---

---

$(127,595)

$(1,591,389)

$7,076,517




 

 

   DAG MEDIA, INC.  AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005

 

2006

 

2005

Cash flows from operating activities:
    Net (loss)

 

$ (174,113)

 

 

$ (511,053)

    Adjustment to reconcile net (loss) income to net cash used in operating activities -

 

 

 

      Gain on sale of Jewish Directories

(481,468)

 

---

      Depreciation and amortization

44,150

 

14,856

      Non cash compensation expense

305,848

 

38,439

      Minority interest

(12,776)

 

---

      Realized loss (gain) on sale of marketable securities

45,611

 

(288,008)

      Gain on the sale of fixed assets

(14,232)

 

---

   Changes in operating assets and liabilities net of effects of disposition -

 

 

 

       Accounts receivable

(6,122)

 

---

       Other current and non current assets

(9,638)

 

1,483

       Accounts payable and accrued expenses

147,206

 

5,811

       Due from purchasers

(125,047)

 

 

       Income taxes payable

(25,652)

 

---

       Assets and liabilities from discontinued operations

(146,900)

 

62,323

              Net cash used in operating activities

(453,133)

 

(676,149)

 

 

 

 

Cash flows from investing activities:

 

 

 

       Investment in preferred stocks, other marketable securities and annuity contract

 

(2,591,432)

 

 

(14,497,087)

       Proceeds from sale of marketable securities

2,628,275

 

17,610,799

       Investment in convertible loan

(25,000)

 

 ---

       Acquisition of Shopila

(107,500)

 

 ---

       Purchase of fixed assets

(18,729)

 

 ---

       Proceeds  from sale of fixed assets

9,213

 

 ---

       Capitalized web development costs

(22,429)

 

 ---

       Cash received on sale of Jewish Directories, net of expenses

309,971

 

 

       Assets of discontinued operations

---

 

      (6,072)

              Net cash provided by investing activities

182,369

 

  3,107,640

 

Cash flows from financing activities:

 

 

 

       Proceeds from exercise of options

5,520

 

     34,421

       Dividends paid

(314,246)

 

(1,803,227)

             Net cash used in financing activities

(308,726)

 

(1,768,806)

 

 

 

 

Net (decrease) increase in cash and cash equivalents

(579,490)

 

662,685

 

 

 

 

Cash and cash equivalents, beginning of year

4,210,427

 

 3,547,742

 

 

 

 

Cash and cash equivalents, end of year

$ 3,630,937

 

$ 4,210,427

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

Taxes paid during the year

          $ 25,535

 

          $ 176,414

Common stock issued to Ocean 7 and in regards to Shopila acquisition

$ 151,100

 

---

Capitalized software acquired through issuance of stock and grant of options

$   47,400

 

$   47,400

Acquisition of company :

 

 

 

Liabilities assumed                                                                           

(140,000)

 

 

Goodwill and other intangibles                                                           

465,100

 

 

Deferred tax liability

(67,600)

 

 

Minority interest

(79,500)

 

 

          Less – Stock issued

(70,500)

 

 

           Net cash paid                                                                                      

$   107,500