CrowdGather, Inc. Announces Record Bookings from Social Gaming, New Forum Features and Corporate Update

  • Company announces approximately $700,000 in social gaming and forum bookings
  • Company on track to replace revenues from recent asset sales

WOODLAND HILLS, Calif.--()--Specialty social media and gaming network, CrowdGather, Inc. (OTCQB:CRWG), today announced a corporate update and results for the second quarter ended October 31, 2014.

“Earlier this year, when we were confronted with the challenges of growing our forum advertising business without sufficient capital, we embarked on a process of transforming our company into the higher growth social gaming segment through our merger with Plaor, creators of the Mega Fame Casino,” said Sanjay Sabnani, CrowdGather’s Chairman and CEO. “I am pleased to announce that we believe we are already seeing positive results from our decision to sell off a portion of our forum assets in order to fund this merger. Record bookings for this past fiscal quarter ended October 31st and the continued momentum we are enjoying in this current fiscal quarter should result in a substantial replacement of the revenues we lost as a result of the asset sale by next quarter. Additionally based upon the success of our Mega Fame Casino growth, we expect to close this fiscal year at a record revenue run rate thereby confirming our decision to enter into the social gaming sector. Our stockholder’s equity has also increased in the process while combined net burn has reduced significantly from pre-merger levels.”

Sabnani continued, “We are also excited to report that we entered into an exchange agreement with each of our Series B shareholders, whereby they agreed to exchange their series B Preferred Stock which was convertible into 20 million common shares and the 10 million warrants exercisable at $0.08 per share into $1.1 million of principal of secured debt and warrants to purchase 5.5 million shares of common stock exercisable at 110% of the closing price of our shares on the date of issuance. Additionally, in support of the company, our largest common stockholder and largest former Series B shareholder have joined other investors in lending an additional $450,000 in working capital under the same terms as the debt and warrants issued in Series B exchange. As a result, CrowdGather has a total of $1,550,000 in senior secured debt and a total of 7,750,000 warrants inclusive of those issued for the Series B exchange. The company now no longer maintains any preferred class of shares.

“We realized revenues of $800,324 for the six months ended October 31, 2014, as compared to revenues of $837,039 for the six months ended October 31, 2013. The variance between comparable periods is primarily due to an increase of approximately $415,000 of social gaming revenue relating to the merger with Plaor for the period from the acquisition date of May 19, 2014 to October 31, 2014. Offsetting this increase was reduced forum advertising revenue of approximately $452,000 primarily due to the sale of certain forum properties during the 4th quarter of fiscal 2014 and 1st quarter of fiscal 2015.

“Our cost of revenue for the six months ended October 31, 2014 was $254,914, as compared to cost of revenue of $2,622 for the six months ended October 31, 2013. The increase of approximately $252,000 is directly attributable to the platform fees relating to our social games and hosting and data center costs related to operating our online games, royalty fees and expenses for hosting celebrity events, primarily appearance and facility fees.

“Our gross profit for the six months ended October 31, 2014 was $545,410 as compared to gross profit of $834,417 for the six months ended October 31, 2013.

“For the fiscal second quarter ended October 31, 2014, we realized revenues of $393,734 for the three months ended October 31, 2014, as compared to revenues of $425,348 for the three months ended October 31, 2013. The variance between comparable periods is primarily due to an increase of approximately $217,000 of social gaming revenue relating to the merger with Plaor. Offsetting this increase was reduced forum advertising revenue of approximately $248,000 primarily due to the sale of certain forum properties during the 4th quarter of fiscal 2014 and 1st quarter of fiscal 2015.”

The Company generated approximately $700,000 in total bookings during the quarter, of which approximately $522,000 were from social gaming. Bookings is a non-GAAP financial measure the Company uses in evaluating its business health and performance. It should be considered supplemental in nature and is not meant as a substitute for revenue recognized in accordance with US GAAP.

The Company also reported additional non-GAAP performance metrics on its social gaming segment including a ABPU (“Average Bookings per User”) of $.24 up 26% from last quarter’s $.19 ABPU. Average daily bookings reported as $5,740 with an average DAU (“Daily Active Users”) of 24,154, up 25% and 2% from $4,605 and 23,783 respectively. The Company believes these results are a strong sign the focus on quality slot content with established content partners is working.

“We are very excited to see our focus on quality content and the user experience result in such strong growth of our ABPU and average daily bookings,” said Richard Corredera, CrowdGather’s COO. “With our strategy showing clear signs of success we are looking forward to expanding our content pipeline and continue the growth we have already realized in Mega Fame Casino further into the coming quarters.”

The Company also reaffirmed it has secured additional slot machine content for Mega Fame Casino, extending its schedule of committed slot content released to August 2015. “The positive and enthusiastic support we have received from our slot partners has been incredible,” said Plaor EVP of Business Development Sidney Oster. “With additional partners and exciting new games anticipated through the summer, our casino players have a treasure trove of games to look forward to in the upcoming year.”

The Company also announced today the BETA launch of its new Search and Discover feature set on the Yuku platform. This feature set includes a redesigned landing page for the site and enhanced search features to help users more quickly find content within its large network of forum content. In addition to better search features in a new user interface the Search and Discover features keep users more informed about new posted content with dynamic content streams surfacing newly updated content specifically selected for a user. Rollout of the new feature set started today to certain users will full rollout planned in our current fiscal quarter. “Now that the fruits of our merger with Plaor are coming together, we are looking forward to innovating exciting new features and user experience options to our forum users,” said Richard Corredera.

About CrowdGather, Inc.

With its growing portfolio of special interest forums and enthusiast message board communities, CrowdGather ( has created a centralized network to benefit forum members, forum owners, and forum advertisers. CrowdGather provides a highly interactive and informational social network for members, a management and revenue-sharing resource for third-party forum owners, and a largely untapped advertising network for marketers worldwide.

CrowdGather subsidiary, Plaor, a company that specializes in developing highly scalable multi-platform games, is located in the heart of Boston's fast growing Innovation District. Plaor produces Mega Fame Casino, an innovative and highly rated social casino available on iOS, Android & desktop. With over 20 employees, the Plaor team is a mix of rising-star newcomers and widely-recognized game development veterans from companies including Rockstar Games, Turbine, Harmonix, Irrational Games, Nanigans, Sony Online Entertainment, ThoughtWorks, THQ, and Caesars Interactive Entertainment.

This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company’s growth and business strategy. Words such as “expects,” “will,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations on such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in the Company’s business; general economic, industry and market sector conditions; the ability to generate increased revenues from the Company’s forums and Plaor’s social casino; the ability to obtain additional financing; the ability to manage the Company's growth; the ability to develop and market new technologies to respond to rapid technological changes; competitive factors in the market(s) in which the Company operates; and other events, factors and risks disclosed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

      October 31, 2014       April 30, 2014
Current assets
Cash $ 239,203 $ 546,158
Accounts receivable 289,890 130,709
Investments 21,480 21,480
Inventory 31,800 31,913
Prepaid expenses and deposits   89,151   48,652
Total current assets 671,524 778,912
Property and equipment, net of accumulated

depreciation of $565,537 and $493,887, respectively

100,705 130,518
Intangible assets, net of accumulated amortization of

$388,753 and $0, respectively

8,539,443 7,336,771
Goodwill   1,817,400 -

Total assets







Current liabilities              
Accounts payable $ 190,392 $ 8,000
Line of credit 262,684 -
Deferred revenue 566,638 -
Accrued vacation 97,910 44,078
Other accrued liabilities 449,998 154,746
Convertible note payable, net of discount 74,642 -
Derivative liability   77,409     -  
Total current liabilities 1,719,673 206,824
Stockholders’ equity

Convertible Preferred Series B stock, $0.001 par value, 1,000,000
shares authorized, 1,000,000 shares issued and outstanding


1,000,000 1,000,000
Common stock, $0.001 par value, 975,000,000 shares

authorized, 116,733,508 and 61,657,708 issued and

outstanding, respectively

116,733 61,658
Additional paid-in capital 35,951,223 29,748,961
Accumulated deficit (27,630,037 ) (22,742,722 )
Accumulated other comprehensive loss   (28,520 )   (28,520 )
Total stockholders’ equity   9,409,399     8,039,377  
Total liabilities and stockholders’ equity $ 11,129,072   $ 8,246,201  
      Three Months Ended October 31,       Six Months Ended October 31,
2014         2013   2014         2013





425,348 $ 800,324 $ 837,039
Cost of revenue   147,445     1,868     254,914     2,622  
Gross profit 246,289 423,480 545,410 834,417

Operating expenses

Payroll and related expenses 573,641 322,874 1,246,683 671,164
Stock based compensation 100,000 320,600 199,000 430,600
General and administrative 1,162,210 429,117 2,395,914 803,534
Loss on disposal of assets - - 1,529,262 -
Legal settlements, net 50,000 - 50,000 -
Impairment of intangible assets   -     140,026     -     140,026  
Total operating expenses   1,885,851     1,212,617     5,420,859     2,045,324  

Loss from operations





(4,875,449 ) (1,210,907 )
Other income (expense)
Interest expense, net (13,749 ) (841 ) (13,508 ) (4,025 )
Change in fair value of derivative liability 2,442 - 2,442 -
Total other income (expense) (11,307 ) (841 ) (11,066 ) (4,025 )
Net loss before provision for income taxes (1,650,869 ) (789,978 ) (4,886,515 ) (1,214,932 )
Provision for income taxes   0     0     800     800  

Net loss


(1,650,869 )


(789,978 ) $ (4,887,315 ) $ (1,215,732 )


Weighted average shares outstanding- basic and diluted







    111,046,333     58,881,850  

Net loss per share – basic and diluted







$ (0.04 ) $ (0.02 )


Investor Contact:
CrowdGather, Inc.
Sanjay Sabnani, 818-435-2472 x 101


Investor Contact:
CrowdGather, Inc.
Sanjay Sabnani, 818-435-2472 x 101