LuxeYard Provides Quarterly Update To Shareholders Two Acquisitions Completed, Three New Verticals Launched, Capital Raised to Fund Further Business Expansion

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 | jguerrero@luxeyard.com
(323) 488-3574

PondelWilkinson
Rob Whetstone | RWhetstone@pondel.com
(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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