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	(75,12)	(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, Decembe31 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)	---
Accounts receivable	(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