EFactor Group Corp. Reports Third Quarter 2013 Results

SAN FRANCISCO, Nov. 14, 2013 /PRNewswire/ -- (OTCBB:STDR or STDRD, soon to be EFCT) EFactor Group Corp. ("EFactor Corp." or "the Company"), owner of the EFactor.com, niche social network for entrepreneurs, content aggregator and provider of resources to entrepreneurs worldwide, today announced financial results for the three and nine months ended September 30, 2013.

Third Quarter 2013 Highlights

  • Revenues increased 48% to $207,022
  • Gross margin increased from 26.2% in Q3 2012 to 70.5% in Q3 2013
  • G&A expenses dropped 56% to $690,682
  • Reduced operating loss by approximately $1.0 million compared to  Q3 2012 and approximately $600,000 year-over-year
  • Completes reverse split of Standard Drilling Shares and receives approval for name change to EFactor Group Corp.
  • Held 8 live Entrepreneur and 9 Webinar events during the quarter including a "Pitch Event" with Kevin Harrington in NYC

"This quarter was focused on a number of significant public market milestones," began Marion Freijsen, EFactor COO. "We were successful in the combination of efforts to reverse split the Standard Drilling shares, change our name to EFactor Group Corp., obtain our trading ticker, EFCT, and launch the investor relations section of our Website, efactorgroup.com.  At the same time, we continued to host a variety of events for our focused niche of entrepreneurs requiring distinct services and products to help build and run their businesses and revamped our flagship Website, EFactor.com.  Connections to relevant business partners and education on everything around running a successful company remains the #1 focus of our Company.  As such critical connections occur, our members are asking us to bundle additional services and products for them.  Adding onto our success with the acquisitions of EQmentor and MCC, we have added many services providers into our resources for our members and we are continually evaluating other companies and services to add into our portfolio of entrepreneur-focused 'Alliance Partners'. We are equally excited about the adverting opportunities on EFactor.com and the value such advertisers, like Harvard Business School, recognize in our membership."

EFactor generates revenue from four primary sources: (1) member fees; (2) sponsorships; (3) advisory services; and (4) public relations services. Management has invested in technology and personnel to grow revenues and cash flows from each business source.

Revenue for the three months ended September 30, 2013 was $207,022, an increase of 48% compared to $139,819 in the corresponding period a year ago. Advisory services and public relations accounted for $175,225 of total revenues in the third quarter of 2013 compared to $492 in the third quarter of 2012.

Cost of goods fell 41% to $61,141 in the third quarter of 2013. Gross profit and gross margin were $145,881 and 70.5% compared to $36,698 and 26.2% in the third quarter of 2012, respectively. The reason for the substantial improvement in gross profit and gross profit margin was the utilization of more of the Company's internal resources for these sundry platforms, which is more cost efficient than going to the outside.

Operating expenses for the three months ended September 30, 2013 fell 55% to $819,004. General and administrative expenses were $690,682 compared to $1,568,262 in the third quarter of 2012, a reduction of 56%. The primary reason for the year-over-year decline in general and administrative expenses was a reduction in non-cash stock-based compensation expenses. EFactor had an operating loss of $611,982 compared to a loss of $1,677,178 in the same period a year ago.

Net loss attributable to common shareholders was $1,784,773, up slightly from $1,754,733 in the third quarter of 2012. The Company recorded a $1,026,859 non-cash loss on extinguishment of debt in the third quarter of 2013. The net loss per share was $0.74 in the third quarter of 2013, an improvement from $2.30 per share in the prior year period.

Cash outflows from operations for the nine months ended September 30, 2013 was $1,177,391 compared to $1,244,179 in the first nine months of 2012. On June 7, 2013, the Company obtained a line of credit from an accredited investor that allows EFactor to borrow up to $750,000 over a 24-month period from the date of the agreement. The Company had $275,000 available under this line of credit at September 30, 2013.

The Company invested $313,820 on capital expenditures in 2013 compared to $237,609 in the same period a year ago. Total assets and shareholders' equity were $4,791,689 and $6,569 at September 30, 2013.

About EFactor Group Corp.

EFactor Group Corp. has at its core EFactor.com, a niche social network for entrepreneurs. EFactor.com provides its members with the people, tools, marketing and expertise to succeed and make real, trustworthy and lasting connections. At the core of the network lies a strong algorithm that allows members to not only connect with a lot of people, but with the right people. In addition, EFactor provides knowledge, facilitates preparing for funding and resources to reduce business costs, delivered through a mix of online social networking and offline domestic and international events. 

EFactor.com has over one million members in 222 territories across 240 industries. It is incorporated in Nevada and headquartered in San Francisco. For more information, visit http://www.efactor.com

EFactor Group Corp. also has various subsidiary service organizations including a UK communications and public relations agency and a company that delivers matching software for mentors to find the best mentees. 

The EFactor Value

EFactor is a social network designed to support you as your business grows, along every step of your journey. We'll be there to congratulate you every time you win and will coach and inspire you whenever you feel frustrated by setbacks. You can count on us to connect you with the right people for you and your company and offer you the resources and talent that will help you succeed. We are highly motivated everyday people who genuinely care about our team and customers. We cheer each other on and have each other's back. We get to see our ideas come to life every single day. We're entrepreneurs, contributing our expertise to the community.

Forward-Looking Statements

Any statements in this release that are not historical facts are forward-looking statements. Actual results may differ materially from those projected or implied in any forward-looking statements. Such statements involve risks and uncertainties, including but not limited to those discussed from time to time in our Securities and Exchange Commission filings. We undertake no obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement is made except as required by law.

Company:
Marion Freijsen – Co-Founder/COO
EFactor Corp.
Main: +1 650 380 8280
Email: marion@EFactor.com
EFactor email: http://www.EFactor.com/marion

Investor Relations Contact:
John Mattio, Sr. Vice-President
MZ North America
Main: (212)301-7130
Direct: (212) 301-7131
Email: john.mattio@mzgroup.us

 

EFACTOR GROUP CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)














September 30,


December 31,




                      ASSETS


2013


2012

CURRENT ASSETS:







Cash


$

69,048

$

46,870


Accounts receivable, net of allowance for doubtful accounts of $2,097 and $2,097 as of September 30, 2013 and December 31, 2012 respectively


157,784


20,982


Other current assets



466,833


14,469



Total current assets


693,665


82,321










Property, website and equipment, net of accumulated depreciation of $1,038,262 and $827,619 as of September 30, 2013 and December 31, 2012 respectively







458,530


341,674


Goodwill



3,639,494


2,131,516

TOTAL ASSETS


$

4,791,689

$

2,555,511



           LIABILITIES AND STOCKHOLDERS' EQUITY





CURRENT LIABILITIES:






Accounts payable


$

947,123

$

641,534


Accounts payable - related party


259,200


38,548


Accrued expenses



957,501


213,220


Operating line of credit


1,110,005


625,604


Deferred revenue



158,629


227,044


Current portion of other long-term obligation


39,668


-


Current portion of notes payable - third parties, net of discount of $17,022 and $-0- as of September 30, 2013 and December 31, 2012, respectively


217,135


101,932


Convertible notes payable - third parties, net of discount of $152,095 and $88,809 as of September 30, 2013 and December 31, 2012, respectively


669,172


276,809


Notes payable - related parties, net of discount of $6,135 and $62,101 as of September 30, 2013 and December 31, 2012, respectively


284,427


163,675



Total current liabilities


4,642,860


2,288,366










Other long-term obligation, net of current portion


127,390


-


Non-current portion of notes payable - third parties


14,870


18,544



Total non-current liabilities


142,260


18,544









TOTAL LIABILITIES



4,785,120


2,306,910









STOCKHOLDERS' EQUITY






Preferred stock, $0.001 par value, 20,000,000 shares authorized, 5,000,000 and -0- issued and outstanding as of  September 30, 2013 and December 31, 2012, respectively







5,000


5,000


Common stock, $0.001 par value, 175,000,000 shares authorized, 2,406,290 and 1,053,751 issued and outstanding at September 30, 2013 and December 31, 2012,  respectively







2,406


1,054


Accumulated other comprehensive loss


(1,928)


-


Additional paid-in capital


15,562,727


11,979,427


Accumulated deficit



(15,561,636)


(11,736,880)



Total stockholders' equity


6,569


248,601









TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

4,791,689

$

2,555,511









    

EFACTOR GROUP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)














For the three months ended September 30,











2013


2012

Net revenues



$

207,022

$

139,819









Operating expenses







Cost of revenue



61,141


103,121


Sales and marketing



39,702


53,662


General and administrative



690,682


1,568,262


Depreciation and amortization



27,479


91,952


Gain on forgiveness of  liabilities



-


-



Total operating expenses



819,004


1,816,997









Loss from operations



(611,982)


(1,677,178)

Other income (expense):







Interest expense



(145,932)


(86,413)


Loss on extinguishment of debt



(1,026,859)


-


Other income



-


8,858



Total other income (expense), net


(1,172,791)


(77,555)









Net loss



$

(1,784,773)

$

(1,754,733)









Basic and diluted net loss per common share

$

(0.74)

$

(2.30)









Weighted average common shares outstanding – basic and diluted


2,396,185


761,933

Comprehensive loss





     Net loss

$

(1,784,773)

$

(1,754,733)

     Foreign currency translation adjustment


(11,059)


-

Comprehensive loss

$

(1,795,832)

$

(1,754,733)









    

EFACTOR GROUP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)














For the nine months ended September 30,











2013


2012

Net revenues



$

623,959

$

234,495









Operating expenses







Cost of revenue



119,497


112,516


Sales and marketing



208,210


115,400


General and administrative



2,515,082


2,709,483


Depreciation and amortization



208,567


277,255


Gain on forgiveness of liabilities



(84,829)


-



Total operating expenses



2,966,527


3,214,654









Loss from operations



(2,342,568)


(2,980,159)

Other income (expense):







Interest expense, net



(455,329)


(199,478)


Loss on extinguishment of debt



(1,026,859)


-


Other income



-


8,858



Total other income (expense), net


(1,482,188)


(190,620)









Net loss



$

(3,824,756)

$

(3,170,779)









Basic and diluted net loss per common share

$

(1.74)

$

(4.46)









Weighted average common shares outstanding – basic and diluted


2,192,198


710,667

Comprehensive loss





     Net loss

$

(3,824,756)

$

$(3,170,779)

    Foreign currency translation adjustment


(1,928)


-

Comprehensive loss

$

(3,826,684)

$

(3,170,779)









    

EFACTOR GROUP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

















For the nine months ended September 30,








2013


2012

CASH FLOWS FROM OPERATING ACTIVITIES:






Net loss




$

(3,824,756)

$

(3,170,779)


Adjustments to reconcile net loss to net cash






used in operating activities:








Depreciation and amortization


208,567


277,255



Stock option expense



41,165


280,554



Amortization of debt discount and deferred financing fees


332,182


172,629



Loss on extinguishment of debt


1,026,859


-



Stock compensation expense


329,632


1,124,042



Gain on forgiveness of liabilities


(84,829)


-


Changes in operating assets and liabilities:








Accounts receivables



(87,602)


5,016




Other current assets



(4,067)


(10,295)




Accounts payable



325,927


159,179




Accounts payable - related party


242,165


5,337




Accrued expenses



385,781


(65,962)




Deferred revenue



(68,415)


(21,155)

                             Net cash used in operating activities

$

(1,177,391)

$

(1,244,179)











CASH FLOWS FROM INVESTING ACTIVITIES:







Cash acquired in reverse merger with Standard Drilling


851


-



Cash acquired in acquisition of MCC


23,593


-



Cash paid for acquisition of property, website and equipment


(313,820)


(237,609)



        Net cash used in investing activities

$

(289,376)

$

(237,609)











CASH FLOWS FROM FINANCING ACTIVITIES:







Proceeds from notes payable


138,488


745,337



Proceeds from convertible notes payable


661,585


-



Proceeds from notes payable – related party


42,110


800



Proceeds from line of credit, net


484,401


-



Proceeds from issuance of shares


167,002


802,890



Repayment of notes payable – related party


(837)


-



Repayment of notes payable


(1,876)


(3,159)



       Net cash provided by financing activities

$

1,490,873

$

1,545,868











NET EFFECT OF EXCHANGE RATES ON CASH


(1,928)


-

NET INCREASE IN CASH


22,178


64,080

CASH, BEGINNING BALANCE



46,870


11,259

CASH, ENDING BALANCE


$

69,048

$

75,339

Supplemental Disclosure of Cash Flow Information:







Cash paid for interest


$

49,770

$

1,748



Cash paid for income taxes


$

-

$

-

Non-cash Financing Activities:







Debt discount

$

326,908

$

146,540



Acquisition of MCC

$

1,333,335


-



Shares  issued as deferred financing fees

$

475,000


-



Related party payables converted into debt

$

21,513

$

-



Shares issued for conversion of debt

$

214,000

$

534,960

SOURCE EFactor Group Corp.



RELATED LINKS
http://www.efactor.com

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