VANCOUVER, BRITISH COLUMBIA / ACCESWWIRE / April 29, 2014 / Gener8 Media Corp. (CSE: GNR) ("Gener8" or the "Company") is pleased to announce the release of the Company's audited financial results for the fiscal year ended December 31, 2013. All figures are in Canadian dollars.
"Last year we continued to invest in our company by developing software and teams to fast track us into leadership positions in highly dynamic and disruptive technology markets," says Rory Armes, CEO. "Entering 2014, we are stronger than we have ever been. We have three thriving businesses better capitalized to take advantage of the industry opportunities in each of their respective sectors."
-Revenue for the year was $8,888,032, a 245% increase from 2012 revenue of $2,567,143.
-Net loss for the year was $10,473,529. Excluding the listing costs related to the reverse takeover ("RTO"), patent settlement and loss on disposal, the net loss would have been equal to approximately $6.6 million--comparable to the net loss of $6,599,633 the previous year ended December 31, 2012.
-The net loss included $1,425,483 incurred on research and development relating to further development of the Company's Cumul8, Reelhouse and 3D conversion technologies.
-The Company continued to improve its operating efficiencies, evident by the 13% improvement in the Company's operating cash flow excluding non-cash working capital.
-The Company's third quarter of 2013 ("Q32013") resulted in an operating profit of $213,060.
-Gener8 moved to a state of the art studio in the south Main Street area of Vancouver, BC.
-The Company listed for public trading on the Canadian Securities Exchange ("CSE"), via the RTO with Delon Resources Inc.
-Gener8 was awarded $450,000 in funding by the National Research Council of Canada's Industrial Research Assistance Program to perform R&D relating to 3D conversion.
-The Company completed the 3D conversion for the entire Warner Bros. film, 300: Rise of an Empire, released in theatres March 2014 and critically acclaimed for its best-in-class 3D.
-Gener8 signed several 3D conversion contracts with Hollywood studios for 2014 theatrical releases.
-The Company acquired the license to a suite of international 3D stereoscopic conversion patents from Intellectual Discovery Co., Ltd.
-The Company signed a Letter of Intent with Tianjin Fu Feng Da Movie & Television Technology Investment and Development Co. Ltd. ("FFD") for a Canadian wholly-owned subsidiary of FFD ("Newco") to acquire 100% of the net assets related to the Company's 3D conversion business for $15 million cash consideration plus a 40% equity interest; the net proceeds will be used by the Company to fund continued development of the Company's Cumul8 and Reelhouse technologies.
-While the Company's Q32013 was profitable, the Company invested in hiring a significant number of employees in Q42013 in anticipation of several 3D conversion contracts to be undertaken in 2014.
-Upon completion of the FFD transaction, the Company will be renamed as Eight Solutions Inc. ("Eight") and Newco will be renamed as Gener8 Digital Media Corp. Eight will retain a 40% equity interest in the 3D business, a 100% equity interest in Cumul8, and a 70% equity interest Reelhouse. Eight will be the publicly traded technology company focused on managing all three of these businesses.
2015Net proceeds from the FFD transaction, approximating $12 million, will be used to fund continued development and aggressive growth of the Company's Cumul8 and Reelhouse technologies.
2016While the Company will retain a 40% interest in the 3D business, which will be accounted for on an equity basis, FFD will fund up to $3 million of any initial working capital requirements following the completion of the FFD transaction. Further, the FFD transaction does not result in any tax obligation to the Company based on available tax losses within the Company.
"Going forward, we have reported the highest revenues to date in our 3D conversion business. With our slate of 2014 film conversion commitments, we anticipate the 3D business will continue to experience further growth in 2014 and beyond," Says Rory Armes, CEO. He goes onto say, "The monetization of our investment in 3D positions the business for continued growth in the post production sector and is a testament of our ability to develop an industry leading technology in a reasonably short timeframe. We can now focus on Cumul8 and Reelhouse, both of which we believe offer broader and bigger opportunities than 3D. Despite the difficulties and losses experienced to date, we are truly excited to be in the place we are in today and look very forward to publishing our Q12014 results within the month."
Financial Summary for the fiscal year ended December 31, 2013
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Gener8 Media Corp. is a media technology company led by a team of gaming industry veterans. At the forefront of postproduction, the Company earned its stripes by developing a proprietary 3D conversion technology, garnering high-profile credits including "300: Rise of a Empire," "The Amazing Spider-Man," "Prometheus" and "Harry Potter." Gener8 has since expanded into offering visual effects services and a cloud-based data management and analytics solution called Cumul8. With its focus on developing disruptive solutions that combine design and technology, Gener8 funded and then acquired a majority interest in Reelhouse Media Ltd., an online entertainment distribution start-up. Gener8's head office is located in Vancouver, British Columbia and currently has over 200 employees. Visit the company website at www.gener8.com.
ON BEHALF OF THE BOARD OF THE COMPANY
Chief Executive Officer and Director
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Vice President of Corporate Affairs
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Forward Looking Statements
Except for statements of historical fact, this news release contains certain forward-looking statements within the meaning of applicable securities law. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" occur. In particular, forward-looking statements in this press release. Although Gener8 believes that the expectations reflected in the forward-looking statements are reasonable; there can be no assurance that such expectations will prove to be correct. Such forward-looking statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements including, without limitation, risks with respect to: closing the definitive agreements respecting the transaction with FFD, obtaining all regulatory and third party consents, meeting our contractual timelines and milestones on our 3D film conversion contracts; general economic conditions in Canada and globally; film industry conditions; competition for, among other things, capital and skilled personnel; changes in economic and market conditions that could lead to reduced spending on 3D film conversion; potential delays or changes in plans with respect to deployment of services or capital expenditures; our ability to hire and retain qualified employees and key management personnel; possibility that government policies or laws may change; amount and timing of operating costs and capital expenditures; the success of certain business combinations engaged in by the Company or by its competitors; possible disruptive effects of organizational or personnel changes; technological change, new products and standards; risks related to acquisitions and international expansion; reliance on large customers; reliance on a limited number of suppliers; risks related to the Company's competition; the Company's failure to adequately protect its intellectual property; interruption or failure of information technology systems; the risk that the transaction may not be completed as planned, or at all; and business, legal and/or regulatory risks relating to Gener8's business, financings and strategic acquisitions. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new information, future events or otherwise.