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 =========== ============