NEW YORK, March 17, 2008 (PRIME NEWSWIRE) -- Dag Media, Inc. (Nasdaq:DAGM) 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 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
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
- 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
---------------------------------------------------------------------
Additional
----------
Paid-in
-------
Common Stock Capital Treasury Stock
------------ ---------- ---------------
---------------------------------------------------------------------
Shares Amount Shares Cost
------ ------ ------ ----
---------------------------------------------------------------------
Balance,
January 1,
2006 3,211,190 $3,211 $8,590,174 68,730 $(231,113)
---------------------------------------------------------------------
Issuance of
common
stock
from
exercise
of options 4,000 4 5,516
---------------------------------------------------------------------
Services
performed
for shares
issued
previous
year
---------------------------------------------------------------------
Non cash
compensation 183,012
---------------------------------------------------------------------
Non cash
compensation
to related
party for
service
performed 108,846
---------------------------------------------------------------------
Issuance of
common
stock to
related
parties 40,000 40 80,560
---------------------------------------------------------------------
Issuance of
common
stock to
Guy Mushkat
for Shopila
acquisition 50,000 50 70,450
---------------------------------------------------------------------
Options
forfeited (15,249)
---------------------------------------------------------------------
Unrealized
gain on
preferred
stocks and
other
marketable
securities
---------------------------------------------------------------------
Net loss
for the
year ended
December
31, 2006
---------------------------------------------------------------------
Total
comprehensive
income
---------------------------------------------------------------------
Balance,
December
31, 2006 3,305,190 3,305 9,023,309 68,730 (231,113)
---------------------------------------------------------------------
Non cash
compensation 156,926
---------------------------------------------------------------------
Unrealized
loss on
preferred
stocks and
other
marketable
securities
---------------------------------------------------------------------
Net loss
for the
year ended
December
31, 2007
---------------------------------------------------------------------
Total
comprehensive
loss
---------------------------------------------------------------------
Balance,
December
31, 2007 3,305,190 $3,305 $9,180,235 68,730 $(231,113)
--------- ------ ---------- ------ ---------
---------------------------------------------------------------------
---------------------------------------------------------------------
Accumulated
Stock other
Subscrip- comprehen-
tion Deferred sive
Receiv- Compen- income Accumulated
able sation (loss) Deficit Totals
-------- --------- ---------- ------------ -------
---------------------------------------------------------------------
---------------------------------------------------------------------
Balance,
January 1,
2006 $(47,400) $(26,841) $(403,512) $(1,417,276) $6,467,243
---------------------------------------------------------------------
Issuance of
common
stock
from
exercise
of options 5,520
---------------------------------------------------------------------
Services
performed
for shares
issued
previous
year 47,400 47,400
---------------------------------------------------------------------
Non cash
compensation 11,592 194,604
---------------------------------------------------------------------
Non cash
compensation
to related
party for
service
performed 108,846
---------------------------------------------------------------------
Issuance of
common
stock to
related
parties 80,600
---------------------------------------------------------------------
Issuance of
common
stock to
Guy Mushkat
for Shopila
acquisition 70,500
---------------------------------------------------------------------
Options
forfeited 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
comprehen-
sive
income 101,804
=======
---------------------------------------------------------------------
Balance,
December
31, 2006 -- -- (127,595) (1,591,389) 7,076,517
---------------------------------------------------------------------
Non cash
compen-
sation 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
comprehen-
sive
loss (345,381)
=======
---------------------------------------------------------------------
Balance,
December
31, 2007 -- -- $(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
=========== ============