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Kidoz Inc
Symbol C : KIDZ
Shares Issued 131,124,989
Close 2019-05-15 C$ 0.57
Recent Sedar Documents

Kidoz loses $826,304 (U.S.) in Q1

2019-05-15 20:42 ET - News Release

Mr. Jason Williams reports

KIDOZ INC. ANNOUNCES Q1 2019 RESULTS

Kidoz Inc. (previously Shoal Games Ltd.) has released its unaudited financial results for the first quarter ended March 31, 2019. All amounts are presented in U.S. dollars and are in accordance with U.S. generally accepted accounting principles.

Recent Kidoz highlights include:

  • Revenue increase to $305,956 for the first quarter of fiscal 2019;
  • Completed the acquisition of Kidoz Ltd.;
  • Closed a private placement of $2-million (U.S.);
  • Completed company name change to Kidoz Inc.;
  • Changed TSX Venture Exchange stock ticker symbol to KIDZ;
  • Implemented the direct registration system (DRS) service for shareholders.

"The combination of Kidoz and Shoal Games has created a unique company in the kid tech market," commented Jason Williams, Kidoz co-chief executive officer. "The acquisition enables the global reach of the Kidoz content discovery network to be efficiently combined with the Rooplay subscription OTT platform and Rooplay Original games. The combined company is positioned to grow through our exclusive ownership of both content and distribution. The Kidoz network reaches tens of millions of kids each month, attracting top advertisers and allowing the insertion of our proprietary OTT subscription platform, which we intend to scale globally. Media budgets continue to shift from linear TV to digital platforms, like Kidoz, as brands seek to engage their customers, where kids spend most of their screen time. Digital media buying in the kids market is constrained by the requirement imposed on companies by regulators for the content to be COPPA (in the United States) and GDPR-K (in Europe) compliant. The Kidoz business has been focused, since inception, to meet these stringent requirements, thereby making it one of the most respected and safe kids solution providers in the market. Kidoz management believes that with the further development of both the Rooplay and Kidoz platforms, and the integration of ed tech content into our global network, we can create a unique and defensible position in the market."

First quarter financial results

Total current assets as at March 31, 2019, were $3,033,657, and total current liabilities were $789,985.

Total revenue, net of platform fees to Apple, Google and Amazon, for the quarter ended March 31, 2019, increased to $305,956, an increase from revenue of $17,342, in the fourth quarter of 2018 and an increase from revenue of $24,351 for first quarter of 2018. Ad tech advertising revenue was $230,862 for the quarter ended March 31, 2019. Content revenue increased to $75,094 for the quarter ended March 31, 2019, an increase from revenue of $17,342 in the fourth quarter of 2018 and an increase from revenue of $24,351 in the first quarter of 2018. The increase in total revenue, compared with the first and fourth quarter of fiscal 2018, is due to the acquisition of Kidoz Ltd.

Sales and marketing expenses were $86,352 for the quarter ended March 31, 2019, an increase of 99 per cent from sales and marketing expenses of $43,291 in the fourth quarter of fiscal 2018 and a decrease of 45 per cent over expenses of $157,184 in the first quarter of fiscal 2018. The increase in sales and marketing expenses compared with the fourth quarter of fiscal 2018 is due to the acquisition of Kidoz Ltd. in the quarter ended March 31, 2019. The decrease in sales and marketing expenses in the quarter ended March 31, 2019, compared with the first quarter of fiscal 2018, was due to reduced marketing campaigns in the first quarter of fiscal 2019, due to delays in launching Rooplay on additional platforms. Selling and marketing expenses principally include sales staff and the publishing services and user acquisition costs to acquire players.

General and administrative expenses consist primarily of premise costs for the company's offices, legal and professional fees, and other general corporate and office expenses. General and administrative expenses increased to $105,928 for the quarter ended March 31, 2019, an increase of 51 per cent from costs of $70,087 in the fourth quarter of 2018 and an increase of 27 per cent from costs of $83,708 for the first quarter of fiscal 2018. The increase in general and administrative expenses, compared with the first and fourth quarter of fiscal 2018, is due to the acquisition of Kidoz Ltd. and costs incurred to change the name of the company to Kidoz Inc. in the quarter ended March 31, 2019.

Salaries, wages, consultants and benefits increased to $288,663 for the quarter ended March 31, 2019, an increase of 99 per cent, over salaries, wages, consultants and benefits of $145,169 in the fourth quarter of 2018 and an increase of 79 per cent compared with salaries, wages, consultants and benefits of $161,422 in the first quarter of 2018. This increase compared with the first and fourth quarter of fiscal 2018 is due to the acquisition of Kidoz Ltd. and higher consulting charges incurred for the company.

The company does not capitalize its development costs. The company expensed $254,457 in content and software development costs during the quarter ended March 31, 2019, an increase of 24 per cent in content and software development costs of $204,787 expensed during the fourth quarter of 2018 and a decrease of 6 per cent in content and software development costs compared with content and software development costs of $270,619 expensed during the first quarter of fiscal 2018. The increase in content and software development expenses compared with the fourth quarter of fiscal 2018 is due to greater software development expenses, particularly development staff, incurred in the development of Rooplay Originals and related technology. The decrease compared with the first quarter of fiscal 2018 is due to less development staff incurred in the development of Rooplay Originals and related technology in the first quarter of fiscal 2018, which is offset by the acquisition of Kidoz Ltd. and the development of the Kidoz Ltd. technology.

The net loss after taxation for the quarter ended March 31, 2019, amounted to ($826,304), a loss of (one cent) per share, compared with a net loss of ($370,814), or (one cent) per share in the fourth quarter of fiscal 2018, compared with a net loss of ($835,368) or (one cent) per share in the quarter ended March 31, 2018. This increase in total loss for the quarter compared with the fourth quarter of fiscal 2018 includes the one-time restructuring and acquisition costs of Kidoz Ltd.

During the quarter ended March 31, 2019, the company used cash of ($608,546) in operating activities compared with using cash of ($356,011) in the fourth quarter of 2018, compared with cash used in operating activities of ($657,412) in the same period in the prior year.

Net cash generated by financing activities was $1,616,678 in the quarter ended March 31, 2019, which compares with cash used by financing activities of $734 in the fourth quarter of fiscal 2018 and cash generated by financing activity of $2,286,742 in the same period in the prior year.

The company had cash and cash equivalents of $1,831,085 and working capital of $2,278,297 at March 31, 2019. This compares with cash and cash equivalents of $641,536 and working capital of $662,573 at Dec. 31, 2018.

For full details of the company's operations and financial results, please refer to the Securities and Exchange Commission website, the Kidoz corporate website or the SEDAR website.

About Kidoz Inc.

Kidoz is the Internet of kids (IoK). Engaging more than 50 million kids a month across the leading mobile kid tech network, Kidoz provides an essential suite of services that unites kids brands, content publishers and families. Trusted by Disney, Hasbro, Nintendo, Lego and more, the Kidoz network helps the world's largest brands to safely reach and engage kids across thousands of mobile apps and sites. The Kidoz OS solution helps carriers and brands, such as Lenovo, Acer and PBS Kids, bring a kid-focused experience to their family devices, in a fully GDPR- and COPPA-compliant way.

We seek Safe Harbor.

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