Press Release: Snail, Inc. Reports Second Quarter 2026 Financial Results

Dow Jones
Aug 12

CULVER CITY, Calif., Aug. 11, 2026 (GLOBE NEWSWIRE) -- Snail, Inc. (Nasdaq: SNAL) ("Snail Games" or the "Company"), a leading global independent developer and publisher of interactive digital entertainment, today announced financial results for the second quarter ended June 30, 2026.

Second Quarter 2026 and Recent Operational Highlights

ARK Franchise Updates:

   -- ARK: Survival Evolved ("ASE"): 
 
          -- Units sold were approximately 574,000 for the second quarter of 
             2026 
 
          -- During the second quarter of 2026, average daily active users 
             ("DAU") were 105,000 and peak DAU was 131,000 
 
   -- ARK: Survival Ascended ("ASA"): 
 
          -- Units sold were approximately 1.2 million for the second quarter 
             of 2026 
 
          -- During the second quarter of 2026, average DAU was 120,000 and 
             peak DAU was over 155,000 
 
          -- Launched the ARK: Fantastic Tames Season 1 Pack 
 
          -- Launched ARK: Genesis Part 1 Ascended, ARK: Tides of Fortune, and 
             shadow-dropped the ARK: Dragontopia 
 
          -- Revealed teaser for ARK Maker, a content creation tool designed to 
             expand community-generated content opportunities within the ASA 
             ecosystem 
 
   -- ARK: Ultimate Mobile Edition ("ARK Mobile"): 
 
          -- 13.2 million downloads as of June 30, 2026 
 
          -- During the second quarter of 2026, average DAU was 129,000 
 
   -- Other ARK IPs 
 
          -- Shared new details around ARK: The Animated Series Part 2 at IGN 
             Live 
 
          -- Unveiled PixARK: Terracrypt, the largest paid DLC expansion for 
             PixARK, planned to introduce more than 200 hours of gameplay and 
             80 new creatures 

Game Portfolio and Business Updates:

   -- AAA Game Pipeline 
 
          -- Officially unveiled 9 Yin Sutra: Immortal at ChinaJoy 2026, 
             revealing a new trailer and Steam page 
 
          -- Announced attendance at Gamescon 2026, where the Company will 
             unveil a first look at an unannounced internally developed AAA 
             title, alongside ASA, For The Stars, Bellwright, and Honeycomb: 
             The World Beyond 
 
          -- Released a new developer diary for For The Stars, offering an 
             in-depth look at the game's current development progress, new 
             pre-alpha footage, and previously unreleased concept art 
 
   -- Bellwright launched on PlayStation and Xbox 
 
          -- Reached the Top 5 Paid Games list on Xbox following the console 
             launch, demonstrating positive early engagement 
 
   -- Launched Survivor Mercs 1.0 across Steam, Xbox, and PlayStation, and 
      launched Above The Snow on Steam 

Business and Operational Updates

   -- Egofold, the Company's subsidiary, publicly debuted the AI Ranch 
      initiative and Non-Human Player$(TM)$ $(NHP)$, an AI gaming companion for 
      consumers, at the Ai4 2026 conference 
 
   -- As of June 30, 2026, SaltyTV released 300+ short film dramas 

ARK Content Pipeline

 
       Title             Platforms              Type          Release Schedule 
ARK Fantastic Tames     Steam, Xbox,        DLC Creature          Q3 2026 
-- Cerberax             PlayStation 
ARK Fantastic Tames     Steam, Xbox,        DLC Creature          Q4 2026 
-- Enigmasour           PlayStation 
ARK Dragontopia         Steam, Xbox,           ASA DLC          Q3 & Q4 2026 
(content updates)       PlayStation 
ARK Maker               Steam, Xbox,         ASA Content            2026 
                        PlayStation         Creation Tool 
ARK Survival of the     Steam, Xbox,        ASA Game Mode           2026 
Fittest                 PlayStation 
PixARK: Terracrypt      Steam, Xbox,         PixARK DLC             2026 
                        PlayStation, 
                      Nintendo Switch 
PixARK Worlds           Steam, Xbox,          New Title             2027 
                        PlayStation, 
                     Nintendo Switch 2 
ARK Atlantis            Steam, Xbox,           ASA DLC              2027 
                        PlayStation 
ARK Galaxy Wars         Steam, Xbox,           ASA DLC              2027 
                        PlayStation 
ARK Legacy of           Steam, Xbox,           ASA DLC              2027 
Santiago                PlayStation 
 

Diversified Content Pipeline

 
           Title             Platforms     Type      Release Schedule 
Dead Party                     Steam    Indie Title        2026 
Honeycomb: The World Beyond    Steam    Indie Title        2026 
Veil of Madness                Steam    Indie Title        2026 
Gobby Gang                     Steam    Indie Title        2027 
For The Stars                  Steam     AAA Title         TBD 
9 Yin Sutra: Immortal          Steam     AAA Title         TBD 
9 Yin Sutra: Wushu             Steam     AAA Title         TBD 
 

Management Commentary

"Over the last several months, we have begun executing against the robust gaming pipeline we previously outlined, which has established a strong foundation for the second half of 2026," said Snail CEO Hai Shi. "During the second quarter, we launched the ARK: Fantastic Tames Season 1 Pack and brought Bellwright to Xbox and PlayStation, with the console launch providing an important contribution during an otherwise measured quarter for new game releases. Shortly after the second quarter ended, we released three ARK DLC expansion maps: Tides of Fortune, Genesis Part 1 Ascended, and Dragontopia. These launches, together with our broader slate of planned ARK content, have established a strong foundation for the rest of the year. Additionally, we continue to invest in our next generation of internally developed AAA titles, which we view as critical drivers of Snail's long-term growth profile. For The Stars and 9 Yin Sutra Immortal were showcased across select gaming events over the past several months, demonstrating meaningful development progress and growing visibility for these titles as they move through the later stages of development.

"Operationally, we have made significant progress across a new developing initiative that expands beyond traditional game development and publishing. Just last week, we announced our attendance at the Ai4 2026 conference, where we unveiled the AI Ranch initiative and our new product in development called Non-Human Player (NHP), an AI companion product for consumers designed to learn, adapt, and interact like a real human teammate. NHP is designed to deliver a personalized gaming experience tailored to each user's playstyle. We believe this technology has the potential to address key challenges casual and hardcore gamers face while creating a personalized AI companion that can help players enjoy and improve their gaming experience across multiple titles.

"The outlook for the second half of 2026 remains strong as we continue to execute across multiple gaming pipelines and business opportunities. With a strong slate of ARK content through 2027, meaningful progress across three upcoming AAA titles, and the introduction of new business initiatives, we are well-positioned to support the transformation of Snail's profile over the next several quarters."

Second Quarter 2026 Financial Highlights

Net revenues were $19.7 million compared to $22.2 million in the same period last year. The decrease was primarily due to a $4.2 million decrease in sales of ARK: Survival Ascended, a decrease of $1.8 million from ARK: Survival Evolved, a decrease of $0.4 million from ARK: Ultimate Mobile Edition, a decrease of $0.2 million from SaltyTV, and a decrease of $0.2 million from other various titles, offset by an increase in revenues related to Bellwright of $1.5 million and $2.8 million change in deferred revenues.

Total units sold were 2.0 million units compared to 2.1 million units in the same period last year, primarily driven by lower sales of ARK franchise titles of 0.2 million units, partially offset by an increase in sales of Bellwright of 0.1 million units.

Net loss improved 81.6% to $3.0 million compared to a net loss of $16.6 million in the same period last year. The increase was primarily due to a reduction of $14.0 million in the income tax provision from the prior-year quarter and an improvement in gross profit, partially offset by higher general and administrative and research and development expenses.

Bookings were $21.8 million compared to $27.1 million in the same period last year. The decrease was primarily due to lower sales of ARK: Survival Ascended and ARK: Survival Evolved, partially offset by bookings generated from Bellwright.

EBITDA was $(3.0) million compared to $(2.4) million in the same period last year. The decrease was primarily due to an improvement in net loss of $13.5 million and a decrease in depreciation expense of $0.1 million, more than offset by a decrease in the provision of income taxes of $14.0 million.

Six Months 2026 Financial Highlights

Net revenues increased 11.1% to $47.0 million compared to $42.3 million in the same period last year. The increase was primarily attributed to a $3.6 million increase in sales of Bellwright and a $5.3 million change in deferred revenues, partially offset by a decrease in ARK: Survival Evolved revenue of $2.7 million and a decrease of $1.4 million attributable to lower sales of ARK: Survival Ascended.

Total units sold increased 13.8% to 4.2 million units compared to 3.7 million units in the same period last year. The increase was primarily due to increased sales of ARK: Survival Ascended of 1.0 million units and an increase in Bellwright of 0.2 million units; partially offset by a decrease in ARK: Survival Evolved sales of 0.7 million units.

Net loss improved 95.1% to $(0.9) million compared to $(18.5) million in the same period last year. The improvement was primarily due to the absence of the $12.4 million income tax provision recorded in the prior-year period, which resulted from the valuation allowance recognized against the Company's deferred tax assets, together with a $6.5 million improvement in gross profit.

Bookings were $48.7 million compared to $49.4 million in the same period last year. The decrease was primarily due to lower sales of ARK: Survival Evolved as the title continued to mature and consumer demand shifted toward ARK: Survival Ascended and its related downloadable content, partially offset by increased sales of ARK: Survival Ascended and Bellwright, which benefited from promotional pricing during the period.

EBITDA improved 88.8% to $(0.6) million compared to $(5.8) million in the same period last year. The improvement was primarily due to an improvement in net loss of $17.6 million, partially offset by a decrease in the provision for income taxes of $12.4 million.

As of June 30, 2026, unrestricted cash was $13.3 million compared to $8.6 million as of December 31, 2025.

Use of Non-GAAP Financial Measures

In addition to the financial results determined in accordance with U.S. generally accepted accounting principles, or GAAP, Snail believes Bookings and EBITDA, as non-GAAP measures, are useful in evaluating its operating performance. Bookings and EBITDA are non-GAAP financial measures that are presented as supplemental disclosures and should not be construed as alternatives to net income (loss) or revenue as indicators of operating performance, nor as alternatives to cash flow provided by operating activities as measures of liquidity, both as determined in accordance with GAAP. Snail supplementally presents Bookings and EBITDA because they are key operating measures used by management to assess financial performance. Bookings adjusts for the impact of deferrals and, Snail believes, provides a useful indicator of sales in a given period. Management believes Bookings and EBITDA are useful to investors and analysts in highlighting trends in Snail's operating performance. At the same time, other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which Snail operates, and capital investments.

Bookings is defined as the net amount of products and services sold digitally or physically in the period. Bookings is equal to revenues, excluding the impact from deferrals. Below is a reconciliation of total net revenue to Bookings, the closest GAAP financial measure.

 
           Three Months Ended June 30,  Six Months Ended June 30, 
           ---------------------------  -------------------------- 
                2026          2025          2026          2025 
           --------------  -----------  ------------  ------------ 
                  (in millions)               (in millions) 
Total net 
 revenue       $     19.7   $     22.2    $     47.0   $      42.3 
Change in 
 deferred 
 net 
 revenue              2.1          4.9           1.7           7.1 
           -----  -------      -------  ---  -------      -------- 
Bookings       $     21.8   $     27.1    $     48.7   $      49.4 
           =====  =======      =======  ===  =======      ======== 
 

We define EBITDA as net income (loss) before (i) interest expense, (ii) interest income, (iii) provision for (benefit from) income taxes and (iv) depreciation expense. The following table provides a reconciliation from net income (loss) to EBITDA:

 
                  Three Months Ended June 
                            30,             Six Months Ended June 30, 
                 -------------------------  -------------------------- 
                   2026           2025        2026          2025 
                 ---------      ---------   --------      --------- 
                      (in millions)               (in millions) 
Net loss           $  (3.0)      $  (16.6)   $  (0.9)      $  (18.5) 
Interest income 
 and interest 
 income -- 
 related 
 parties              (0.1)            --       (0.1)          (0.1) 
Interest 
 expense               0.2            0.2        0.4            0.3 
(Benefit from) 
 provision for 
 income taxes         (0.1)          13.9         --           12.4 
Depreciation 
 expense                --            0.1         --            0.1 
                 ---  ----          -----       ----          ----- 
EBITDA             $  (3.0)      $   (2.4)   $  (0.6)      $   (5.8) 
                 ===  ====          =====       ====          ===== 
 

Webcast Details

The Company will host a webcast at 4:30 PM ET today to discuss its second quarter 2026 financial and operational results. Participants may access the live webcast and replay via the link here or on the Company's investor relations website at https://investor.snail.com/.

About Snail, Inc.

Snail, Inc. (Nasdaq: SNAL) is a leading, global independent developer and publisher of interactive digital entertainment for consumers around the world, with a premier portfolio of premium games designed for use on a variety of platforms, including consoles, PCs, and mobile devices. For more information, please visit: https://snail.com/.

Forward-Looking Statements

This press release contains statements that constitute forward-looking statements. Many of the forward-looking statements contained in this press release can be identified by the use of forward-looking words such as "anticipate," "believe," "could," "expect," "should," "plan," "intend, " "may," "predict," "continue," "estimate" and "potential," or the negative of these terms or other similar expressions. Forward-looking statements appear in a number of places in this press release and include, but are not limited to, statements regarding Snail's intent, belief or current expectations. These forward-looking statements include information about possible or assumed future results of Snail's business, financial condition, results of operations, liquidity, plans and objectives. The statements Snail makes regarding the following matters are forward-looking by their nature: recent game launches and the Company's broader slate of planned content establishing a strong foundation for the rest of the year; the Company's next generation of internally developed AAA titles serving as critical drivers of Snail's long-term growth profile; the For The Stars and 9 Yin Sutra Immortal titles demonstrating meaningful development progress and growing visibility and moving through the later stages of development; the AI Ranch initiative and the development of the Non-Human Player (NHP) product; the Company's gaming pipeline being well-positioned to support the transformation of the Company's profile ;the Non-Human Player (NHP) having the potential to address key challenges casual and hardcore gamers face while creating a personalized AI companion that can help players enjoy and improve their gaming experience across multiple titles; and the outlook for the second half of 2026 remaining strong as Snail continues to execute across multiple gaming pipelines and business opportunities.

Any forward-looking statements included herein reflect our current views, and they involve certain risks and uncertainties, including, among others, acceptance of our titles in the marketplace and the successful development, marketing or sale of our titles and our ability to retain our key employees or maintain our Nasdaq listing. These risks should not be construed as exhaustive and should be read together with the other cautionary statement included in our Annual Report on Form 10-K for the year ended December 31, 2025, subsequent Quarterly Reports on Form 10-Q and current reports on Form 8-K filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it was initially made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.

Investor Contact:

John Yi and Steven Shinmachi

Gateway Group, Inc.

949-574-3860

SNAL@gateway-grp.com

 
                       Snail, Inc. and Subsidiaries 
           Condensed Consolidated Balance Sheets as of June 30, 
                  2026 and December 31, 2025 (Unaudited) 
 
                                   June 30, 2026     December 31, 2025 
                                  ---------------   ------------------- 
 
ASSETS 
 
Current Assets: 
   Cash and cash equivalents       $   13,293,820    $        8,568,164 
   Restricted cash and cash 
    equivalents                           562,000               187,000 
   Accounts receivable, net of 
    allowances for credit losses 
    of $523,500 as of June 30, 
    2026 and December 31, 2025          9,345,753            12,528,347 
   Loan and interest receivable 
    -- related party                      108,751               107,759 
   Prepaid expenses -- related 
    party                               5,793,460             2,700,474 
   Prepaid expenses and other 
    current assets                      1,621,428             2,232,485 
   Prepaid taxes                        1,047,870             4,734,007 
                                      -----------       --------------- 
Total current assets                   31,773,082            31,058,236 
 
Restricted cash and cash 
 equivalents, net of current 
 portion                                1,748,000             1,748,000 
Prepaid expenses -- related 
 party, net of current portion          5,582,500             8,282,974 
Property and equipment, net             4,120,607             4,146,175 
Intangible assets, net                  3,898,541             3,827,927 
Intangible assets, net -- 
 related party                          4,416,667             4,916,667 
 
Other noncurrent assets, net              908,408               604,793 
Operating lease right-of-use 
 assets, net                            4,687,027             4,722,366 
                                      -----------       --------------- 
Total assets                       $   57,134,832    $       59,307,138 
                                      ===========       =============== 
 
LIABILITIES, NONCONTROLLING 
INTERESTS AND STOCKHOLDERS' 
DEFICIT 
 
Current Liabilities: 
   Accounts payable                $    3,926,768    $        5,506,332 
   Accounts payable -- related 
    parties                            18,426,220            20,067,013 
   Accrued expenses and other 
    liabilities                         3,939,436             3,364,150 
   Interest payable -- related 
    parties                               527,770               527,770 
   Convertible notes at fair 
    value                                 568,499             3,842,189 
   Current portion of long-term 
    debt                                1,353,296             1,305,880 
   Current portion of deferred 
    revenue                            28,538,494            14,799,840 
   Current portion of operating 
    lease liabilities                     472,345               393,448 
                                      -----------       --------------- 
Total current liabilities              57,752,828            49,806,622 
 
Accrued expenses                          625,354               468,106 
Revolving loan                          2,500,000             5,000,000 
Long-term debt, net of current 
 portion                                3,650,745             4,292,538 
Deferred revenue, net of current 
 portion                                5,276,523            17,282,685 
Operating lease liabilities, net 
 of current portion                     4,328,864             4,336,240 
                                      -----------       --------------- 
Total liabilities                      74,134,314            81,186,191 
                                      -----------       --------------- 
 
Commitments and contingencies 
 
Stockholders' Deficit: 
Class A common stock, $0.0001 
 par value, 500,000,000 shares 
 authorized; 3,363,834 shares 
 issued and 3,093,778 shares 
 outstanding as of June 30, 
 2026, and 2,076,467 shares 
 issued and 1,806,412 shares 
 outstanding as of December 31, 
 2025                                         336                   208 
Class B common stock, $0.0001 
 par value, 100,000,000 shares 
 authorized; 5,749,716 shares 
 issued and outstanding as of 
 June 30, 2026 and December 31, 
 2025                                         575                   575 
 
Additional paid-in capital             32,732,935            26,926,245 
Accumulated other comprehensive 
 loss                                    (295,578)             (275,049) 
Accumulated deficit                   (40,258,553)          (39,352,510) 
Treasury stock at cost (270,055 
 shares as of June 30, 2026 and 
 December 31, 2025)                    (3,671,806)           (3,671,806) 
                                      -----------       --------------- 
Total Snail, Inc. deficit             (11,492,091)          (16,372,337) 
Noncontrolling interests               (5,507,391)           (5,506,716) 
                                      -----------       --------------- 
Total stockholders' deficit           (16,999,482)          (21,879,053) 
                                      -----------       --------------- 
Total liabilities, 
 noncontrolling interests and 
 stockholders' deficit             $   57,134,832    $       59,307,138 
                                      ===========       =============== 
 
 
                         Snail, Inc. and Subsidiaries 
              Condensed Consolidated Statements of Operations and 
             Comprehensive Loss for the Three and Six Months Ended 
                      June 30, 2026 and 2025 (Unaudited) 
 
                     Three Months Ended June 
                               30,               Six Months Ended June 30, 
                    --------------------------   -------------------------- 
                       2026           2025          2026           2025 
                    -----------   ------------   -----------   ------------ 
 
Revenues, net       $19,676,448   $ 22,185,750   $46,971,102   $ 42,296,622 
Cost of revenues     11,988,665     15,231,005    27,626,878     29,494,350 
                     ----------    -----------    ----------    ----------- 
 
Gross profit          7,687,783      6,954,745    19,344,224     12,802,272 
                     ----------    -----------    ----------    ----------- 
 
Operating 
expenses: 
   General and 
    administrative    4,975,250      3,475,089     9,626,007      8,439,440 
   Research and 
    development       4,453,153      3,293,409     8,467,822      6,903,154 
   Advertising and 
    marketing           814,705      1,520,201     1,683,494      2,826,567 
   Depreciation 
    and 
    amortization         12,834         67,761        25,568        135,665 
   Impairment of 
    film assets          96,838        415,719       165,987        415,719 
                     ----------    -----------    ----------    ----------- 
   Total operating 
    expenses         10,352,780      8,772,179    19,968,878     18,720,545 
                     ----------    -----------    ----------    ----------- 
 
Loss from 
 operations          (2,664,997)    (1,817,434)     (624,654)    (5,918,273) 
                     ----------    -----------    ----------    ----------- 
 
Other income 
(expense): 
   Interest income       58,235         31,972       100,082         61,878 
   Interest income 
    -- related 
    party                   499            499           992            992 
   Interest 
    expense            (152,125)      (169,286)     (358,171)      (250,115) 
   Other (expense) 
    income             (415,082)      (707,968)      (60,031)        61,794 
   Foreign 
    currency 
    transaction 
    gain (loss)          (1,433)       (31,891)        8,259        (68,179) 
                     ----------    -----------    ----------    ----------- 
Total other 
 expense, net          (509,906)      (876,674)     (308,869)      (193,630) 
                     ----------    -----------    ----------    ----------- 
 
Loss before 
 provision for 
 income taxes        (3,174,903)    (2,694,108)     (933,523)    (6,111,903) 
 
Provision for 
 (benefit from) 
 income taxes          (133,629)    13,868,598       (26,805)    12,397,768 
                     ----------    -----------    ----------    ----------- 
 
Net loss             (3,041,274)   (16,562,706)     (906,718)   (18,509,671) 
 
Net loss 
 attributable to 
 non-controlling 
 interests                 (525)          (282)         (675)        (1,238) 
                     ----------    -----------    ----------    ----------- 
 
Net loss 
 attributable to 
 Snail, Inc.         (3,040,749)   (16,562,424)     (906,043)   (18,508,433) 
 
Comprehensive loss 
statement: 
 
Net loss             (3,041,274)   (16,562,706)     (906,718)   (18,509,671) 
 
Other 
 comprehensive 
 income (loss) 
 related to 
 foreign currency 
 translation 
 adjustments, net 
 of tax                     984         30,587       (25,839)        63,820 
Other 
 comprehensive 
 income related to 
 credit 
 adjustments, net 
 of tax                      --             --         5,310         22,023 
                     ----------    -----------    ----------    ----------- 
 
Total 
 comprehensive 
 loss               $(3,040,290)  $(16,532,119)  $  (927,247)  $(18,423,828) 
                     ==========    ===========    ==========    =========== 
 
Net loss 
attributable to 
Class A common 
stockholders: 
Basic               $  (989,812)  $ (3,775,300)  $  (258,255)  $ (4,210,496) 
                     ==========    ===========    ==========    =========== 
Diluted             $  (989,812)  $ (3,775,300)  $  (258,255)  $ (4,216,414) 
                     ==========    ===========    ==========    =========== 
 
Net loss 
attributable to 
Class B common 
stockholders: 
 
Basic               $(2,050,937)  $(12,787,124)  $  (647,788)  $(14,297,937) 
                     ==========    ===========    ==========    =========== 
Diluted             $(2,050,937)  $(12,787,124)  $  (647,788)  $(14,318,033) 
                     ==========    ===========    ==========    =========== 
 
Loss per share 
attributable to 
Class A and B 
common 
stockholders: 
Basic               $     (0.36)  $      (2.22)  $     (0.11)  $      (2.49) 
                     ==========    ===========    ==========    =========== 
Diluted             $     (0.36)  $      (2.22)  $     (0.11)  $      (2.49) 
                     ==========    ===========    ==========    =========== 
 
Weighted-average 
shares used to 
compute income 
(loss) per share 
attributable to 
Class A common 
stockholders: 
Basic                 2,774,897      1,697,559     2,292,247      1,693,192 
                     ==========    ===========    ==========    =========== 
Diluted               2,774,897      1,697,559     2,292,247      1,693,507 
                     ==========    ===========    ==========    =========== 
 
Weighted-average 
shares used to 
compute income 
(loss) per share 
attributable to 
Class B common 
stockholders: 
 
Basic                 5,749,716      5,749,716     5,749,716      5,749,716 
                     ==========    ===========    ==========    =========== 
Diluted               5,749,716      5,749,716     5,749,716      5,749,716 
                     ==========    ===========    ==========    =========== 
 
 
                     Snail, Inc. and Subsidiaries 
          Condensed Consolidated Statements of Cash Flows for 
        the Six Months Ended June 30, 2026 and 2025 (Unaudited) 
 
                                            2026           2025 
                                         -----------   ------------ 
 
Cash flows from operating activities: 
Net loss                                 $  (906,718)  $(18,509,671) 
Adjustments to reconcile net loss to 
net cash provided by (used in) 
operating activities: 
   Amortization -- intangible assets, 
    net                                      327,756         79,424 
   Amortization -- intangible assets, 
   net -- related party                      500,000             -- 
   Amortization -- film assets               231,917        645,069 
   Amortization -- loan origination 
    fees and debt discounts                    4,932        (19,504) 
   Loss on change in fair value of 
    convertible notes                        121,165         82,180 
   Gain on change in fair value of 
    warrant liabilities                      (39,243)       (91,383) 
   Depreciation -- property and 
    equipment                                 25,568        135,667 
   Impairment of film assets                 165,987        415,719 
   Gain on remeasurement of previously 
    held equity interest                          --         (7,857) 
   Gain on lease termination                  (1,799)            -- 
   Stock-based compensation expense          101,130        280,888 
   Deferred taxes, net                            --     10,808,885 
 
Changes in assets and liabilities, net 
of business acquisitions: 
   Accounts receivable                     3,182,594     (7,825,905) 
   Accounts receivable -- related party           --      3,836,866 
   Prepaid expenses -- related party        (392,512)    (1,728,666) 
   Prepaid expenses and other current 
    assets                                   611,057        537,799 
   Prepaid taxes                           3,686,137      1,161,649 
   Other noncurrent assets, net             (696,951)    (1,064,165) 
   Accounts payable                       (1,636,164)      (110,912) 
   Accounts payable -- related parties    (1,640,793)     1,040,862 
   Accrued expenses and other 
    liabilities                            1,378,317      1,009,796 
   Loan and interest receivable -- 
    related party                               (992)          (992) 
   Lease liabilities                         108,659       (163,920) 
   Deferred revenue                        1,732,492      7,075,046 
                                          ----------    ----------- 
Net cash provided by (used in) 
 operating activities                      6,862,539     (2,413,125) 
                                          ----------    ----------- 
 
Cash flows from investing activities: 
   Acquisition of software                        --       (290,000) 
   Acquisition of software licenses         (343,770)    (2,008,690) 
   Investments in software                        --       (718,236) 
   Net cash paid for acquisition of 
    Matrioshka                                    --         (9,719) 
                                          ----------    ----------- 
Net cash used in investing activities       (343,770)    (3,026,645) 
                                          ----------    ----------- 
 
Cash flows from financing activities: 
   Proceeds from at-the-market 
   offering, net of issuance costs         4,232,897             -- 
   Repayments on notes payable              (594,376)            -- 
   Repayments on convertible notes        (2,523,295)      (638,753) 
   Repayments on revolving loan           (2,500,000)       (43,018) 
   Borrowings on term loan                        --      3,500,000 
   Cash proceeds from exercise of 
    warrants                                      --        159,000 
   Proceeds from issuance of 
    convertible notes                             --      3,000,000 
   Payments of loan origination fees          (7,500)            -- 
                                          ----------    ----------- 
Net cash provided by (used in) 
 financing activities                     (1,392,274)     5,977,229 
                                          ----------    ----------- 
 
Effect of foreign currency translation 
 on cash and cash equivalents                (25,839)        64,023 
                                          ----------    ----------- 
 
Net increase in cash and cash 
 equivalents, and restricted cash and 
 cash equivalents                          5,100,656        601,482 
 
Cash and cash equivalents, and 
 restricted cash and cash equivalents 
 -- beginning of the period               10,503,164      8,238,944 
                                          ----------    ----------- 
 
Cash and cash equivalents, and 
 restricted cash and cash equivalents 
 -- end of the period                    $15,603,820   $  8,840,426 
                                          ==========    =========== 
 
Supplemental disclosures of cash flow 
information 
Cash paid during the period for: 
   Interest                              $   311,933   $    230,318 
                                          ==========    =========== 
   Income taxes                          $    82,428   $    612,007 
                                          ==========    =========== 
Noncash transactions during the period 
for: 
   Liabilities converted to equity upon 
    exercise of warrants                 $   606,541   $    323,113 
                                          ==========    =========== 
   Acquisition of film licenses in 
    accounts payable                     $     2,000   $     86,069 
                                          ==========    =========== 
   Acquisition of software and software 
    licenses in accounts payable and 
    accrued expenses                     $    54,600   $    313,282 
                                          ==========    =========== 
   Change in fair value of notes 
    recorded in accumulated other 
    comprehensive income                 $     5,310   $     22,023 
                                          ==========    =========== 
   Right-of-use assets obtained in 
    exchange for lease liability         $  (297,000)  $    (55,267) 
                                          ==========    =========== 
   Net assets acquired in a business 
    combination                          $        --   $      5,461 
                                          ==========    =========== 
   Debt converted to equity              $   866,250             -- 
                                          ==========    =========== 
 

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