FAS ....looking like it will be tits up soon. $3.5 negative working cap and going to try and do a PP at .025 cents to cover it and raise some operating money...management run this so far off the tracks it is unrecoverable in my opinion. I was in it for very short time last fall I think it was. Glad I took the 10% haircut rather than the 100% one that's coming...
Fantasy Aces to release full 2015 operating results
2016-02-01 16:15 MT - News Release
Mr. Tom Frisina reports
FANTASY ACES DAILY FANTASY SPORTS CORP. PROVIDES CORPORATE UPDATE
Fantasy Aces Daily Fantasy Sports Corp. has released the unaudited operating results for the year ended Dec. 31, 2015. In October, 2015, the corporation completed the merger with DraftTeam Daily Fantasy Sports, and the results below include the combined operations for the year.
Financial results
During the year ended Dec. 31, 2015, Fantasy Aces earned revenue from contests completed of $1,629,000. This is an increase of 650 per cent from 2014. In addition, prize payouts totalled more than $17.9-million during the year, an increase of over 620 per cent. During the year, Fantasy Aces saw its member base increase by more than 265 per cent as compared with 2014. The corporation has a current working capital deficit of $3,475,000. These financial results are based on management's estimates and have not yet been approved by the corporation's audit committee or board of directors or reviewed by the corporation's auditor. The corporation expects to release its full financial results for the year ended Dec. 31, 2015, in the near future.
The 2015 NFL season was very successful in terms of all the important metrics for the corporation. Revenues for the fourth quarter in all sports categories combined were up over 468 per cent when compared with 2014, and prize payouts increased by 400 per cent compared with the same period in 2014. In addition, the corporation has seen its NBA-related revenues, and payouts both increase by more than 370 per cent from the start of the 2015 NBA season as compared with 2014 during the same time period.
These results were obtained in spite of the macro issues the industry has faced during the last few months. The corporation expects to continue with this impressive growth through 2016 and beyond.
Outlook for 2016
Fantasy Aces is in the process of completing a restructuring of operations, which it expects will provide significant changes in:
Reduction of operating costs: The corporation has reduced all of its general operational costs, including relating to rent and general overhead.Reduction of player acquisition costs: To date, the corporation has had to attract and retain users at a proportionally high acquisition cost. Those costs are being vividly reduced through improved promotional techniques and the strength of the company's brand, which attracts measurably higher organic user attraction than previously. In addition, the corporation has taken steps in the last two operating months of dramatically lowering overlay, while increasing operating gross margins.Marketing partnership: Fantasy Aces is pleased to announce the signing of a marketing partnership with a national media partner. This partner will provide a wide range of promotional and marketing services, attracting a wide range of new sports-minded users to the corporation's nationally recognized site. Encompassing digital and audio/radio broadcast media, the expected result will greatly enhance Fantasy Aces' footprint within the Daily Fantasy Sports space.
A notably significant part of this agreement reflects the partner's assenting to subscribe for common shares of the corporation to settle the costs of all the media programs, in conjunction with the private placement outlined below.
Private placement
Fantasy Aces has also determined that to continue with the impressive growth that was obtained in the prior year, the corporation will need to obtain additional financing. In addition to the financing, which is detailed below, the corporation has applied to the TSX Venture Exchange to settle certain of its liabilities for shares in the corporation. The corporation intends to complete a non-brokered private placement for minimum proceeds of $1-million and maximum proceeds of $1.25-million. The financing will be done at a price of 2.5 cents per share. The proceeds from this placement will be used for general working capital purposes.
Depending on demand and regulatory requirements, a portion of the offering may be made in accordance with the provisions of the existing shareholder exemption contained in Multilateral CSA Notice 45-313 and the various corresponding blanket orders and rules of participating jurisdictions (the existing shareholder exemption is not available in Ontario or Newfoundland and Labrador). In addition to conducting the offering pursuant to the existing shareholder exemption, the offering will also be conducted pursuant to the advised by investment dealer exemption and other available prospectus exemptions, including sales to accredited investors and to family and close personal friends and business associates of directors and officers of the company.
The company has set Feb. 1, 2016, as the record date for the purpose of determining existing shareholders entitled to purchase shares pursuant to the existing shareholder exemption. Subscribers purchasing units under the existing shareholder exemption will need to represent in writing that they meet certain requirements of the existing shareholder exemption, including that they were, on or before the record date, a shareholder of the company (and still are a shareholder). The aggregate acquisition cost to a subscriber under the existing shareholder exemption cannot exceed $15,000 unless that subscriber has obtained advice from a registered investment dealer regarding the suitability of the investment. There is no minimum subscription amount. If subscriptions received for the offering based on all available exemptions exceed the maximum offering amount of $500,000, units will be allocated pro rata amongst all subscribers qualifying under all available exemptions.
The securities issued in connection with the offering will be subject to a hold period expiring four months and one day from the date of issuance of such securities.
The corporation also intends to complete a private placement of debentures up to an amount of $200,000. The corporation reserves a conversion price of five cents per common shares pursuant to the debentures (or such higher price as mandated by the TSX-V).
This debenture will accrue interest at 24 per cent annually and will have a term of one year from the closing date. This debenture and accrued interest may be converted into common shares at any time by the request of the holder.
A finder's fee of cash, common shares or warrants, or a combination thereof may be paid to eligible finders with respect to any portion of the offering that is not subscribed for by existing shareholders.
Shares-for-debt settlement
In addition to the private placement, the corporation is applying to the TSX-V to settle certain liabilities of the company with the issuance of common shares. It is expected that approximately $600,000 to $1.1-million in liabilities will be settled through the issuance of common shares. It is expected that this will be done concurrently with the above-noted private placement.
It is expected that if the maximum financing is completed and the shares for debt is completed, there will be approximately 143 million shares outstanding. In addition, there are approximately 57.5 million convertible units outstanding.
There is no material fact or material change in the affairs of the company which has not been generally disclosed.
We seek Safe Harbor.
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