CrowdGather Inc. (OTCBB: CRWG), operator of a leading network of online forum communities, has made a lot of progress cutting costs and refocusing on cash flow. After recently closing its Series B financing, the company has reduced its operating expenses by nearly 45% with no significant impact to revenues, while focusing on achieving a positive cash flow in the near-term.
While not as popular as other social media stock like Yelp Inc. (NASDAQ: YELP) or Groupon Inc. (NASDAQ: GRPN), the company’s focus on the original social media (online forums) has yielded a strong business model that generates 90%+ gross margins via a network of 80 web properties with over 20 million combined members that generate 14 million monthly unique visitors.
Here’s the full shareholder update press release:
One of the leading networks of forum communities on the Internet, CrowdGather, Inc. (CRWG), today announced a general corporate update in advance of the Company’s anticipated July 2013 financial results announcement for the fiscal year ended April 30, 2013.
“In order to give our shareholders additional clarity, we wanted to provide a few updates we feel are indicative of our positive progress,” said Sanjay Sabnani, CrowdGather’s Chairman and CEO. “We anticipate that revenue for the fiscal year ended on April 30, 2013 will approximate or exceed the total revenue from the fiscal year ended on April 30, 2012. As previously disclosed, we have also reduced our operating expenses by nearly 45% with no significant impact to revenue to date, and are currently projecting an annualized operating expense run rate of approximately $2.2 million. Lastly, we expect that the Series B financing we recently closed will help us maintain operations and will enable us to continue improving the monetization of our forum properties. While our current restructuring will undoubtedly require us to evolve our business operations away from continuing to fuel growth through acquisitions, we believe there is organic growth potential in our existing portfolio of properties and this will be our primary focus. In parallel, we are also considering several options of a strategic nature in order to achieve our two short-term goals, which are to achieve a cash flow positive state and to enhance shareholder value. We believe that our recent dramatic cost reductions are a step in the right direction.”
CrowdGather is proud to also announce the new homepage for www.pbnation.com, one of the world’s largest paintball enthusiast forums. The new homepage serves curated, relevant thread content from the forums in a modern, dynamically tiled format. Additionally, the homepage offers new opportunities for the site’s advertisers, as they will now have an ability to run ads on the homepage skin.
Yuku.com, CrowdGather’s largest hosted platform, will soon have an updated mobile app for iOS and Android, that includes many new moderation and user features, and is a significant improvement over the current release. While the mobile app had previously been available for free to attract users and input for improvements, the Company will begin charging on a per download basis when the updated application is launched in the coming weeks. CrowdGather is also pursuing the launch of mobile app releases for some of its top branded sites, including RapMusic.com and Digishoptalk.com, and is exploring mobile monetization opportunities across all of the Company’s forum properties.
CrowdGather is also pleased to disclose a recently negotiated revenue share arrangement with Adrianne Curry, the celebrity spokesperson for Erox®, as she will continue to promote the product across various social media platforms. Erox is a unisex fragrance that contains pheromones and is clinically proven to enhance the wearer’s feelings of confidence, well-being and social warmth. Erox is available for sale at www.erox.com.
About CrowdGather, Inc.
With its growing portfolio of special interest forums and enthusiast message board communities, CrowdGather (www.crowdgather.com) 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.
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 increases revenues from the Company’s forums; the ability to obtain additional financing to implement the Company’s long-term growth strategy; 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.