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

 

Press Releases

Contact:
Assaf Ran, CEO
Inbar Evron-Yogev, CFO
(212) 489-6800
SOURCE: DAG Media, Inc.

DAG Media, Inc. Reports Fiscal Year 2007 Consolidated Financial Statements

NEW YORK, March 17, 2008/PRNewswire/ -- DAG Media Inc. (Nasdaq: DAGM - news)

      Dag Media, Inc., announced that net income per common share for the fourth quarter of 2007 was $319,317 or $0.10 per basic and diluted share (based on 3.236 million shares). This income includes an income tax benefit of approximately $183,000, which reflects a change in estimate resulting from changes in prior years’ tax positions.

     Total revenue for the year ended December 31, 2007 were $221,000 compared to $10,000 for the year ended December 31, 2006, of which $210,000 represents interest income on short term loans made through DAG Funding.

     Loss from continuing operations for the year ended December 31, 2007 was $39,000 compared to a loss of $812,000 for the year ended December 31, 2006.  The decrease in loss of $773,000, resulted mainly from interest income from short term notes generated through DAG Funding, a decrease of $68,000 in general and administrative expense, an increase of $143,000 in other income, and an income tax benefit of approximately $183,000 in the fourth quarter of 2007 to reflect a change in estimate resulting from changes in prior years’ tax positions.

    For the year ended December 31, 2007 net loss per common share was $(0.01), versus net loss per common share of $(0.05) for the year ended December 31, 2006. The decrease in net loss is mainly attributed to the decrease in net loss from continued operations.
   
    Assaf Ran, Chairman of the Board and CEO stated, “Our significant efforts to pull the company out of losses are turning fruitful. We eliminated operations of all cash draining businesses and are totally focused on building the profitable business of DAG Funding. The turmoil in the financial industry creates opportunities. We work diligently to screen the best ones in order to enhance DAG Funding’s profits while staying away from unnecessary risks.”

  “As for Next Yellow, we have completed a business plan and started to contact potential investors in order to raise money on the subsidiary level so we can revive operations of our subsidiary DAG Interactive, Inc.” added Mr. Ran.

    

   DAG Media, Inc. through our subsidiaries provides short term, secured, non–banking, commercial loans, to small businesses. In addition we developed innovative software and a related web site that allows retail businesses and other service providers to reach prospective customers and clients for their goods and services in a more effective way than traditional on-line and print yellow pages search . We operate several web sites: http://www.dagfundingsolutions.com, http://www.nextyellow.com, and http://www.dagmedia.com.

This report contains forward-looking statements within the meaning section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  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 report 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 may acquire; (ii) the success of new operations which we have commenced and of our new business strategy; (iii) our limited operating history in our new business; (iv) potential fluctuations in our quarterly operating results; and (v) challenges facing us relating to our growth.  The accompanying information contained in this report, including the information set forth under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, identifies important factors that could cause such differences.  These forward-looking statements speak only as of the date of this report, and we caution potential investors not to place undue reliance on such statements.  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, 2007


Assets

 

Current assets:

   

Cash and cash equivalents     

$ 621,724

Marketable securities

802,811

Short term investment – insurance annuity contract – at fair value

931,555

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

2,356,090

 

 

Short term commercial notes

4,313,211

          Interest receivable on short term commercial notes

41,184

Due from purchaser

156,103

Other current assets

17,083

            Total current assets

6,883,671

 

 

Property and equipment, net

14,261

         Capitalized web development costs, net

74,015

Security deposit

17,515

Investment in privately held company, at cost

100,000

                     
            Total assets

 

$ 7,089,462

Liabilities and Shareholders’ Equity


Current liabilities:

 

Accounts payable and accrued expenses

$ 123,886

Deferred gain from the sale of Jewish Directories

72,917

Deferred origination fee

4,597

        Total current liabilities

201,400

             
Commitments and contingencies (Note 11)

 

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

9,180,235

Treasury stock, at cost- 68,730 shares

(231,113)

Accumulated other comprehensive loss

(441,272)

Accumulated deficit

(1,623,093)

            Total shareholders’ equity

6,888,062

                 
 Total liabilities and shareholders’ equity

 

$ 7,089,462


  DAG MEDIA, INC. AND SUBSIDIARIES
   CONSOLIDATED STATEMENTS OF OPERATIONS
    FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

 

 2007

 

2006

Interest income from short term commercial notes

$ 209,898

 

$ ---

Origination fees

6,913

 

---

Subscription revenues, net

4,351

 

9,885

Total Revenue

221,162

 

9,885

 

Operating costs and expenses:

 

 

 

Web development expenses

49,344

 

137,666

Marketing expenses

8,788

 

87,955

General and administrative expenses

756,753

 

824,963

            Total operating costs and expenses

814,885

 

1,050,584

 

 

 

 

Loss from operations

(593,723)

 

(1,040,699)

 

Interest and dividend income

          
249,053

 

          
260,394

Realized gain (loss) on marketable securities

           148,777

 

           (45,611)

Write-off of investment in convertible loan

(25,000)

 

---

Other (loss) income

            (400)

 

            14,232

             Total other income

372,430

 

229,015

Loss from continuing operations before income tax benefit

                    
(221,293)                               

 

                   
(811,684)                               

Income tax benefit

182,469

 

                      ---

Loss from continuing operations

                 (38,824)

 

            (811,684)

 

 

 

 

Discontinued Operations:

 

 

 

Gain on the sale of the Jewish Directories (net of tax effect of 0 in 2007 and 2006)

 

267,360

 

 

767,939

Loss from operations of Jewish Directories 

---

 

(75,129)

Loss from operations of Shopila (net of tax effect of 0 in 2007 and 2006)

 

(260,240)

 

 

(55,239)

Income from discontinued operations

7,120

 

637,571

Net loss

    $   (31,704)

 

    $   (174,113)

 

Basic and diluted net income (loss) per
common share

 outstanding

 

 

 

 

 

 

 

 

 

Continuing operations

$(0.01)

 

$(0.25)

Discontinued operations

*

 

$0.20

 Net loss per common share

$(0.01)

 

$(0.05)

 

 

 

 

Weighted average number of common shares outstanding

 

Outstanding

 

 

 

- Basic and diluted

3,236,460

 

3,177,765

                                  
* Less than $0.01 per share


DAG MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

 

 

             Common Stock              Additional Paid-in   Capital

           Treasury Stock

Stock Subscription Receivable

Deferred Compensation

Accumulated other comprehensive income (loss)

 Accumulated Deficit

Totals

 

 

 

 

 

 

 

 

 

 

Shares

Amount

 

Shares

Cost

 

 

 

 

 

Balance, January 1, 2006

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 income

 

 

 

 

 

 

 

 

 

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

Non cash compensation

 

 

156,926

 

 

 

 

 

 

156,926

Unrealized loss on preferred stocks and other marketable securities

 

 

 

 

 

 

 

(313,677)

 

(313,677)

Net loss  for the year ended December 31, 2007

 

 

 

 

 

 

 

 

(31,704)

(31,704)

Total comprehensive loss

 

 

 

 

 

 

 

 

 

(345,381)

Balance, December 31, 2007

3,305,190

$3,305

$9,180,235

68,730

$(231,113)

---

---

$(441,272)

$(1,623,093)

$6,888,062


DAG MEDIA, INC.  AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
                                          FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

 

2007

 

2006

Cash flows from operating activities:
    Net loss

 

$ (31,704)

 

 

$ (174,113)

    Adjustments to reconcile net loss to net cash used in operating activities -

 

 

 

      Gain on sale of Jewish Directories

(267,360)

 

(481,468)

      Loss from discontinued operations of Shopila

260,240

 

55,239

      Depreciation and amortization

53,881

 

33,520

      Non cash compensation expense

156,926

 

305,848

      Write-off of investment in convertible loan

25,000

 

---

      Realized (gain) loss on sale of marketable securities

(148,777)

 

45,611

      Loss (gain) on the sale of fixed assets

400

 

(14,232)

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

 

 

 

       Interest receivable on short term commercial notes

(41,184)

 

---

       Other current and non current assets

21,507

 

(9,638)

       Accounts payable and accrued expenses

(65,818)

 

108,424

       Deferred origination fees

4,597

 

---

       Due from purchasers

---

 

(125,047)

       Income taxes payable

(341,681)

 

(25,652)

       Assets and liabilities from discontinued operations

(112,755)

 

(171,625)

              Net cash used in operating activities

(486,728)

 

(453,133)

 

 

 

 

Cash flows from investing activities:

 

 

 

       Investment in marketable securities and annuity contract

(1,544,637)

 

(2,591,432)

       Partial redemption of insurance annuity contract

214,360

 

---

       Proceeds from sale of marketable securities

2,814,495

 

2,628,275

      Short term commercial notes made

(4,927,250)

 

---

       Collection received from short term commercial notes

614,039

 

---

       Investment in convertible loan

---

 

(25,000)

       Acquisition of Shopila

---

 

(107,500)

       Purchase of fixed assets

(3,215)

 

(18,729)

       Proceeds  from sale of fixed assets

500

 

9,213

       Capitalized web development costs

---

 

(22,429)

       Cash received on sale of Jewish Directories, net of expenses

309,223

 

309,971

              Net cash (used in) provided by investing activities

(2,522,485)

 

182,369

 

Cash flows from financing activities:

 

 

 

       Proceeds from exercise of options

---

 

5,520

       Dividends paid

---

 

(314,246)

             Net cash used in financing activities

---

 

(308,726)

 

 

 

 

Net decrease in cash and cash equivalents

(3,009,213)

 

(579,490)

 

 

 

 

Cash and cash equivalents, beginning of year

3,630,937

 

4,210,427

 

 

 

 

Cash and cash equivalents, end of year

$ 621,724

 

$ 3,630,937

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

Taxes paid during the year

          $ 212,430

 

          $   25,535

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

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