Snap Interactive Reports Fourth Quarter and Full Year 2014 Results, Business Highlight and Strategy

NEW YORK, NY--(Marketwired - Mar 6, 2015) - Snap Interactive, Inc. ("SNAP," the "Company," "we," "our" or "us") (OTCQB: STVI), a leading online dating developer and owner of AYI.com and The Grade, has filed its Annual Report on Form 10-K for the year ended December 31, 2014, which announced the following financial and operational results and highlights for 2014, as well as insights into the Company's business strategy.

Highlights:

• Achieved positive cash flow from operations of $221 thousand for the three months ended December 31, 2014, which reflected an improvement of approximately $760 thousand as compared to the comparable period in 2013;
• Increased active subscriber count by 33% from approximately 77,700 as of December 31, 2013 to approximately 103,000 as of March 2, 2015;
• New subscription transactions increased approximately 30% for the year ended December 31, 2014 as compared to the year ended December 31, 2013;
• Increased total revenues for the fourth quarter of 2014 by approximately 11.1% to $3.3 million as compared to the comparable period in 2013, and recorded an increase in total revenues of approximately 7.5% for the year ended December 31, 2014 as compared to 2013; and
• Launched "The Grade," our new mobile dating application which has been featured in top-tier media outlets such as Washington Post, USA Today, Fortune, and Vogue.

Financial Highlights

 Current period compared with same period in prior year:

		Three Months Ended											Year Ended
		December 31,											December 31,
GAAP Results		2014				2013				Change			2014				2013				Change
Total revenues		$	3,331,828			$	2,998,564			11.1	%		$	13,558,690			$	12,610,092			7.5	%
Subscription revenue		$	3,239,666			$	2,994,495			8.2	%		$	12,769,012			$	12,560,856			1.7	%
Advertising and marketing expense		$	1,369,114			$	960,954			42.5	%		$	5,244,262			$	4,170,064			25.8	%
Net loss		$	(247,553	)		$	(659,782	)		(62.5	)%		$	(1,657,877	)		$	(4,006,013	)		(58.6	)%
Net cash provided by (used in) operating activities		$	220,659			$	(539,042	)		N/A			$	(167,574	)		$	(4,289,291	)		(96.1	)%
Non-GAAP Results
Bookings		$	3,090,652			$	2,878,500			7.4	%		$	12,894,316			$	11,863,398			8.7	%
Adjusted EBITDA		$	969			$	(696,295	)		N/A			$	(521,842	)		$	(4,049,322	)		(87.1	)%

Management Commentary

During the quarter ended December 31, 2014, SNAP's management maintained the cost reductions put into effect in prior quarters while maintaining capital efficient growth. These conditions enabled the Company to deliver positive cash flow from operations for a second consecutive quarter. 

Clifford Lerner, SNAP's Chief Executive Officer, commented, "During 2014 SNAP focused on becoming a cash flow positive business that could grow revenue even in the context of constrained liquidity. Accordingly, we focused on making highly efficient marketing investments and cost controls to reduce our overhead. It was gratifying to see our financial results respond to these efforts, delivering two quarters of positive cash flow from operating activities, and three quarters of positive EBITDA. In addition, in spite of limited resources dedicated to marketing expenditures, we increased our subscriber base during 2014, and had approximately 8% revenue growth as compared to 2013."

"We are also excited to be on track with our new strategic direction for the Company," Lerner continued. "We intend for the Company to develop a portfolio of dating and social applications in the future, addressing a diversified set of end user markets and geographies. A portfolio approach leverages SNAP managerial expertise, technical infrastructure and user community across a broader range of offerings. The Grade, a mobile dating app available for iPhone®, was the first new introduction to the portfolio. We believe that mobile is a major area of growth for the industry, so a mobile-first application was the right place to start. We intend to expand our product array and geographic reach further, both to monetize our existing audience and to broaden our reach to untapped user communities."

Additionally, the Company announced in February that it had raised gross proceeds of $3 million through the issuance of a $3 million 12% Senior Secured Convertible Note to Sigma Opportunity Fund II, LLC ("Sigma"), with a plan to use the proceeds to fund general corporate purposes, including increased user acquisition. Alexander Harrington, SNAP's Chief Operating Officer, commented, "We are pleased to receive the investment, which recognized our recent positive financial results and growth potential. The additional liquidity builds a strong foundation for the business, and unlocks future growth opportunities."

About Snap Interactive, Inc.

Snap Interactive, Inc. develops, owns and operates dating applications for social networking websites and mobile platforms. SNAP's flagship brand, AYI.com is a multi-platform online dating site with over one million monthly active users. The Grade is a mobile dating application catering to high quality singles. For more information, please visit http://www.snap-interactive.com.

The contents of our websites are not part of this press release, and you should not consider the contents of these websites in making an investment decision with respect to our common stock or warrants.

Facebook® is a registered trademark of Facebook, Inc. iPhone® is a registered trademark of Apple Inc. Android® is a registered trademark of Google Inc. AYI.com® is a registered trademark of Snap Interactive, Inc.

Forward-Looking Statements
This press release contains "forward-looking statements" made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 that are based on current expectations, estimates, forecasts and assumptions and are subject to risks and uncertainties. Words such as "anticipate," "assume," "believe," "estimate," "expect," "goal," "intend," "plan," "project," "seek," "target," and variations of such words and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to certain risks, uncertainties and assumptions that may cause actual results to differ materially from those expressed by the forward-looking statements, including, but not limited to, the following: general economic, industry and market sector conditions; the Company's future growth and the ability to obtain additional financing to implement the Company's growth strategy; the ability to achieve break-even cash flow; the ability to increase or recognize revenue, decrease expenses and increase the number of active subscribers or new subscription transactions; the ability to anticipate and respond to changing user and industry trends and preferences; the ability to implement new applications in the Company's portfolio strategy or derive revenue from new applications; the intense competition in the online dating marketplace; and circumstances that could disrupt the functioning of the Company's applications and websites. In evaluating these statements, you should carefully consider these risks and uncertainties and those described under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other Securities and Exchange Commission filings.

All forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement was made, except to the extent required by applicable securities laws.

SNAP INTERACTIVE, INC.
CONSOLIDATED BALANCE SHEETS
			December 31,				December 31,
			2014				2013
Assets
Current assets:
	Cash and cash equivalents		$	1,138,385			$	927,352
	Restricted cash			-				490,315
	Credit card holdback receivable			648,759				232,264
	Accounts receivable, net of allowances and reserves of $42,533 and $37,850, respectively			221,128				385,370
	Security deposits			115,104				-
	Prepaid expense and other current assets			93,542				114,863
Total current assets				2,216,918				2,150,164
Fixed assets and intangible assets, net				563,123				522,462
Notes receivable				78,520				170,566
Long term security deposits				135,000				-
Investments				200,000				100,000
Total assets			$	3,193,561			$	2,943,192
Liabilities and stockholders' equity (deficit)
Current liabilities:
	Accounts payable			1,074,345				861,730
	Accrued expenses and other current liabilities			1,062,836				671,142
	Notes payable			400,000				-
	Deferred subscription revenue			1,952,075				1,826,771
	Deferred advertising revenue			13,427				300,000
Total current liabilities				4,502,683				3,659,643
Long term deferred rent				-				12,058
Warrant liability				23,425				140,550
Capital lease obligations				149,055				-
Total liabilities				4,675,163				3,812,251
Stockholders' equity (deficit):
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding				-				-
Common stock, $0.001 par value, 100,000,000 shares authorized, 49,507,826 and 49,987,826 shares issued, respectively, and 39,182,826 and 39,132,826 shares outstanding, respectively				39,183				39,133
Additional paid-in capital				11,858,489				10,813,205
Accumulated deficit				(13,379,274	)			(11,721,397	)
Total stockholders' equity (deficit)				(1,481,602	)			(869,059	)
Total liabilities and stockholders' equity (deficit)			$	3,193,561			$	2,943,192

SNAP INTERACTIVE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
			Three Months Ended								Twelve Months Ended
			December 31,								December 31,
			2014				2013				2014				2013
Revenues:
	Subscription revenue		$	3,239,666			$	2,994,495			$	12,769,012			$	12,560,856
	Advertising revenue			92,162				4,069				789,678				49,236
Total revenues				3,331,828				2,998,564				13,558,690				12,610,092
Costs and expenses:
	Programming, hosting and technology expense			537,607				1,041,778				2,837,375				5,035,482
	Compensation expense			819,759				1,054,407				3,274,893				4,177,568
	Professional fees			276,035				331,224				940,872				1,005,650
	Advertising and marketing expense			1,369,114				960,954				5,244,262				4,170,064
	General and administrative expense			631,378				739,781				3,005,390				3,711,885
Total costs and expenses				3,633,893				4,128,144				15,302,792				18,100,649
Loss from operations				(302,065	)			(1,129,580	)			(1,744,102	)			(5,490,557	)
Interest income (expense), net				(15,763	)			1,297				(30,900	)			5,807
Gain (loss) on change in fair value of warrants				70,275				468,500				117,125				1,475,775
Other income				-				1				-				2,962
Loss before provision for income taxes				(247,553	)			(659,782	)			(1,657,877	)			(4,006,013	)
Provision for income taxes				-				-				-				-
Net loss			$	(247,553	)		$	(659,782	)		$	(1,657,877	)		$	(4,006,013	)
Net loss per common share:
Basic and diluted			$	(0.01	)		$	(0.02	)		$	(0.04	)		$	(0.10	)
Weighted average number of common shares used in calculating net loss per common share:
Basic and diluted				39,152,713				38,974,130				39,169,196				38,937,210

SNAP INTERACTIVE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
			Twelve Months Ended
			December 31,
			2014				2013
Cash flows from operating activities:
Net loss			$	(1,657,877	)		$	(4,006,013	)
Adjustments to reconcile net loss to net cash used in operating activities:
	Depreciation and amortization			181,675				174,640
	Lease obligation interest expense			3,473				-
	Stock-based compensation expense			1,040,585				1,263,633
	Amortization of debt issuance cost			3,958				-
	Gain on change in fair value of warrants			(117,125	)			(1,475,775	)
Changes in operating assets and liabilities:
	Decrease (increase) in restricted cash			490,315				(385,315	)
	Decrease (increase) in credit card holdback receivable			(416,495	)			55,029
	Decrease (increase) in accounts receivable			164,242				(65,351	)
	Increase in security deposits			(250,104	)			-
	Decrease in prepaid expenses and other current assets			22,113				89,961
	Increase in accounts payable, accrued expenses and other current liabilities			567,579				486,532
	Decrease in deferred rent			(38,644	)			(29,174	)
	Increase (decrease) in deferred subscription revenue			125,304				(697,458	)
	Decrease in deferred advertising revenue			(286,573	)			300,000
Net cash used in operating activities				(167,574	)			(4,289,291	)
Cash flows from investing activities:
Purchase of fixed assets				(3,731	)			(48,553	)
Purchase of non-marketable equity securities				(100,000	)			(100,000	)
Repayment of notes receivable issued to employees and accrued interest				92,046				(4,850	)
Net cash used in investing activities				(11,685	)			(153,403	)
Cash flows from financing activities:
Payments of capital lease obligations				(9,708	)			-
Proceeds from exercise of stock options				-				12,450
Proceeds from issuance of promissory notes				400,000				-
Net cash provided by financing activities				390,292				12,450
Net increase (decrease) in cash and cash equivalents				211,033				(4,430,244	)
Balance of cash and cash equivalents at beginning of period				927,352				5,357,596
Balance of cash and cash equivalents at end of period			$	1,138,385			$	927,352
Supplemental disclosure of cash flow information
AYI.com domain name purchase in exchange for 100,000 shares of common stock			$	-			$	100,000
Warrants issued for debt issuance costs			$	4,750			$	-
Equipment acquired under capital lease obligations			$	218,605			$	-

SNAP INTERACTIVE, INC
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(unaudited)
			Three Months Ended								Year Ended
			December 31,				December 31,				December 31,				December 31,
			2014				2013				2014				2013
Reconciliation of Subscription Revenue to Bookings
Subscription revenue			$	3,239,666			$	2,994,495			$	12,769,012			$	12,560,856
Change in deferred subscription revenue				(149,014	)			(115,995	)			125,304				(697,458	)
Bookings			$	3,090,652			$	2,878,500			$	12,894,316			$	11,863,398
			Three Months Ended								Twelve Months Ended
			December 31,				December 31,				December 31,				December 31,
			2014				2013				2014				2013
Reconciliation of net loss to Adjusted EBITDA
Net loss			$	(247,553	)		$	(659,782	)		$	(1,657,877	)		$	(4,006,013	)
Interest expense (income), net				15,763				(1,297	)			30,900				(5,807	)
Depreciation and amortization expense				51,534				44,620				181,675				174,640
Gain on change in fair value of warrants				(70,275	)			(468,500	)			(117,125	)			(1,475,775	)
	Stock-based compensation expense			251,500				388,664				1,040,585				1,263,633
Adjusted EBITDA			$	969			$	(696,295	)		$	(521,842	)		$	(4,049,322	)

Non-GAAP Financial Measures

The Company has provided in this release certain non-GAAP financial information, including bookings and Adjusted EBITDA to supplement the consolidated financial statements, which are prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Management uses these non-GAAP financial measures internally in analyzing the Company's financial results to assess operational performance and to determine the Company's future capital requirements. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. The Company believes these non-GAAP financial measures are useful to investors and others to understand and evaluate the Company's operating results and it allows for a more meaningful comparison between the Company's performance and that of competitors.

Some limitations of bookings and Adjusted EBITDA as financial measures include that:

• Bookings does not reflect that we defer and recognize revenue from subscription fees over the length of the subscription term and micro-transactions over a two-month period;
• Adjusted EBITDA does not (i) reflect cash capital expenditure requirements for assets underlying depreciation and amortization expense that may need to be replaced or for new capital expenditures; (ii) the Company's working capital requirements; (iii) consider the potentially dilutive impact of stock-based compensation; (iv) reflect interest expense or interest payments on our outstanding indebtedness; and (v) reflect the change in fair value of warrants; and
• Other companies, including companies in our industry, may calculate bookings or Adjusted EBITDA differently or choose not to calculate bookings or Adjusted EBITDA at all, which reduces their usefulness as comparative measures.

Because of these limitations, you should consider this non-GAAP financial information along with other financial performance measures, including total revenues, subscription revenue, deferred revenue, net income (loss), cash and cash equivalents, restricted cash, net cash used in operating activities and our financial results presented in accordance with GAAP.

PR Contact:
Adam Handelsman
[e-mail]
212-518-7721

IR Contact Information:
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