LOS ANGELES, May 15, 2012 /PRNewswire/ -- LuxeYard, Inc., (OTCQB: LUXR), the fast-growing boutique luxury flash sale site, today provided an update on recent business developments concurrent with its report of financial results for the first quarter ended March 31, 2012.
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"Since our launch in late January, we are proud to have accomplished a lot in a very short period of time," said Braden Richter, CEO of LuxeYard. "In addition to our rapid membership growth, we have seen recent improvements in member quality and sales conversions, further indicating that we are on the right track with products that not only inspire, but also are priced to elicit a purchase."
Richter said the company's plan to discount its products heavily in the first quarter to attract new customers is paying off. He noted that total membership has grown to more than 600,000 and that more than $300,000 in sales orders were placed through the first quarter. Moreover, the percentage of members transacting has increased more than 250% since the introduction of its women's fashion vertical in March.
"To further bolster member transactions, we created the first social network to empower consumers to actively participate in product sourcing decisions," continued Richter. "With Concierge Buying, the power of social networking can now be monetized, representing one of the holy grails of e-commerce. This active participation should drive increased traffic to the site and more customer engagement, which we anticipate will translate to revenue growth."
Company Highlights:
Operations
- In addition to the inaugural LuxeYard home furnishings and decor vertical, the company entered the fashion apparel business in March with the launch of women's apparel and accessories from both well-known and up-and-coming designer brands. LuxeYard also recruited several fashion Trendsetters who share their picks and opinions of the products they love, providing a fashion point of view from high profile celebrities and admired tastemakers;
- The company launched its art vertical, creating a virtual gallery of curated one-of-a-kind and limited edition pieces from collections worldwide;
- Today, LuxeYard announced its expansion into the men's apparel sector, featuring traditional designer and up-and-coming brands;
- LuxeYard has formed an acquisition team to focus on consolidation opportunities in the flash-sale industry; recent related activities include the acquisition of the assets of privately held eOpulence, a premier online luxury fashion and lifestyle retailer, and an recent agreement to acquire LeatherGroups.com; and,
- The company announced a strategic alliance with buyinvite, one of Australia's premier members-only private sale sites.
Financial
Reported results reflect the first quarter ended March 31, 2012. Comparable results to the first quarter of 2011 are not relevant as the company was a non-operating entity.
- Gross revenue was $211,559, which after promotional discounts resulted in net revenue of $155,089, reflecting the period following the launch of LuxeYard.com on January 24, 2012; Operating expenses amounted to $2.1 million, primarily due to start-up costs, increase in personnel, advertising and marketing expenses;
- The company reported a $6.29 million derivative loss from its outstanding warrants and the embedded conversion options in its convertible debentures;
- Net loss amounted to $8.5 million, equal to $0.13 per share; and,
- Pursuant to a private placement memorandum, LuxeYard closed a financing on April 24, 2012, whereby the company raised approximately $3.0 million.
Since February 13, 2012, LuxeYard's common stock has been traded on the OTC Market's OTCQB under the symbol LUXR.
Company Growth Strategies
Going forward, LuxeYard has several strategies underway to build its presence as a preeminent member-based online marketplace offering steep product discounts compared with traditional retail prices. This includes:
- Scaling its marketing campaigns to attract a high volume of quality members to LuxeYard.com, including SEO strategies, social media marketing and affiliate marketing programs;
- Improving upon the customer experience on the site to ensure high-quality browsing and purchasing sessions;
- Building relationships with a variety of merchants to increase product variety;
- Expanding into additional vertical segments, such as travel, gourmet food and beverages, consumer services, events, etc.;
- Making complementary and accretive acquisitions to build scale rapidly;
- Establishing additional domestic and international syndication partnerships to quickly broaden its customer base;
- Building momentum with Concierge Buying and Group Buy features that uniquely distinguish LuxeYard; and,
- Expanding business-to-business operations into a key market differentiator.
About LuxeYard
LuxeYard is a members-only flash sale site for luxury home furnishings, decor and fashion that offers access to unique products sourced by a seasoned team of buyers at a fraction of retail prices. LuxeYard is the pioneer of Concierge Buying, which gives members the power to determine what items will be sold on the site, and Group Buy which allows them to lower the price by sharing sale items with friends. Along with its veteran retail, e-commerce and digital marketing management team, LuxeYard partners with celebrity Trendsetters and design and fashion industry insiders to deliver a curated buying experience from a unique point of view to its members. To join the LuxeYard community, visit www.LuxeYard.com.
Investors can register to receive news releases by visiting http://www.luxeyard.com/investors/signup.php.
Forward-Looking Statements
This press release contains forward-looking statements about our financial performance, which involve risks and uncertainties, and actual results could differ materially from those discussed. Factors that could cause or contribute to such differences include, but are not limited to, the factors included under the headings "Risk Factors" and "Cautionary Note Regarding Forward Looking Statements" on Form 8-K, filed with the Securities and Exchange Commission on November 15, 2011, a copy of which may be obtained by visiting the SEC's web site at www.sec.gov. LuxeYard's actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this press release to conform these statements to actual results or to changes in our expectations.
Investor Contacts:
Jack Guerrero | [email protected]
(323) 488-3574
PondelWilkinson
Rob Whetstone | [email protected]
(310) 279-5980
LuxeYard, Inc. |
||||||
CONSOLIDATED BALANCE SHEETS |
||||||
Unaudited |
||||||
March 31, 2012 |
December 31, 2011 |
|||||
ASSETS |
||||||
Current Assets: |
||||||
Cash |
$ |
204,153 |
$ |
154,400 |
||
Restricted cash |
- |
150,000 |
||||
Accounts receivable |
- |
600 |
||||
Inventory |
49,763 |
5,466 |
||||
Prepaid expenses and other current assets |
31,410 |
16,376 |
||||
Total current assets |
285,326 |
326,842 |
||||
Property and equipment, net of accumulated depreciation of $12,650 and $695 |
||||||
as of March 31, 2012 and December 31, 2011, respectively |
177,220 |
16,869 |
||||
Deposits |
84,085 |
- |
||||
TOTAL ASSETS |
$ |
546,631 |
$ |
343,711 |
||
LIABILITIES AND STOCKHOLDERS' DEFICIT |
||||||
Current Liabilities: |
||||||
Accounts payable |
$ |
216,155 |
$ |
63,426 |
||
Accrued liabilities |
124,364 |
158,206 |
||||
Deferred revenue |
- |
9,701 |
||||
Total current liabilities |
340,519 |
231,333 |
||||
Derivative liabilities |
7,936,333 |
158,758 |
||||
Convertible debentures, net of debt discount of $1,426,682 as of March 31, 2012 |
543,318 |
- |
||||
Total liabilities |
8,820,170 |
390,091 |
||||
Commitments and contingencies |
- |
- |
||||
Stockholders' Deficit: |
||||||
Common stock, $0.0001 par value.100,000,000 authorized shares; 63,290,000 issued and outstanding shares |
6,329 |
6,329 |
||||
Additional paid in capital |
1,281,236 |
985,738 |
||||
Accumulated deficit |
(9,561,104) |
(1,038,447) |
||||
Total Stockholders' Deficit |
(8,273,539) |
(46,380) |
||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT |
$ |
546,631 |
$ |
343,711 |
||
LuxeYard, Inc. |
||
CONSOLIDATED STATEMENT OF OPERATIONS |
||
Unaudited |
||
For The Three Months Ended March 31, 2012 |
||
REVENUE |
||
Total Revenue |
$ |
155,089 |
COST OF GOODS SOLD |
||
Cost of Sales |
211,778 |
|
GROSS LOSS |
(56,689) |
|
OPERATING EXPENSES |
||
Selling, general and administrative |
1,864,563 |
|
Impairment loss |
192,753 |
|
Stock compensation expense |
35,201 |
|
Depreciation |
11,955 |
|
Total Operating Expenses |
2,104,472 |
|
Operating Loss |
(2,161,161) |
|
Other Expenses |
||
Derivative loss |
6,294,694 |
|
Interest expense |
66,802 |
|
NET LOSS |
$ |
(8,522,657) |
Basic and Diluted Loss Per Share |
$ |
(0.13) |
Weighted Average Outstanding Shares |
63,290,000 |
|
LuxeYard, Inc. |
||||
CONSOLIDATED STATEMENT OF CASH FLOWS |
||||
Unaudited |
||||
For Three Months Ended March 31, 2012 |
||||
Cash flows from operating activities |
||||
Net loss |
$ |
(8,522,657) |
||
Adjustments to reconcile net loss to net cash used in operating activities |
||||
Depreciation |
11,955 |
|||
Stock compensations expense |
35,201 |
|||
Impairment loss |
192,753 |
|||
Amortization of debt discount |
56,199 |
|||
Derivative loss |
6,294,694 |
|||
Changes in operating assets and liabilities |
||||
Accounts receivable |
600 |
|||
Inventory |
(44,297) |
|||
Prepaid expenses and other current assets |
(15,034) |
|||
Deposits |
(84,085) |
|||
Accounts payable |
152,729 |
|||
Accrued liabilities |
(33,842) |
|||
Deferred revenue |
(9,701) |
|||
Net cash used in operating activities |
(1,965,485) |
|||
Cash flows from investing activities |
||||
Restricted cash |
150,000 |
|||
Purchase of equipment and leasehold improvements |
(104,762) |
|||
Net cash provided by investing activities |
45,238 |
|||
Cash flows from financing activities |
||||
Proceeds from debt |
1,970,000 |
|||
Net cash provided by financing activities |
1,970,000 |
|||
Net increase in cash and cash equivalents |
49,753 |
|||
Cash and cash equivalents at beginning of period |
154,400 |
|||
Cash and cash equivalents at end of period |
$ |
204,153 |
||
Supplemental disclosures of cash flow information |
||||
Cash paid for interest |
$ |
- |
||
Cash paid for income taxes |
- |
|||
Non cash investing and financing activities |
||||
Debt discount on convertible debentures |
$ |
1,482,881 |
||
Acquisition of fixed assets through issuance of stock |
67,544 |
|||
SOURCE LuxeYard, Inc.
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