Exhibit 99.1

 

 

 

Kubient Reports Second Quarter 2020 Results

 

NEW YORK – September 23, 2020 – Kubient, Inc. (NasdaqCM: KBNT, KBNTW) (“Kubient” or the “Company”), a cloud-based software platform for digital advertising, today reported financial results for the second quarter and six months ended June 30, 2020.

 

Second Quarter 2020 and Recent Operational Highlights

·Officially launched Kubient Artificial Intelligence (KAI), the industry’s first AI-powered ad fraud detection and prevention platform that helps advertisers combat the $40 billion annual ad fraud problem in the 300 millisecond window.

 

·Closed an initial public offering (IPO) of 2,500,000 units, resulting in gross proceeds of approximately $12.5 million, before deducting underwriting discounts and commissions and other offering expenses.

 

·At quarter end, publisher inventory that Kubient can monetize, or ad impression opportunities, for the Audience Cloud, Kubient’s flexible open marketplace for advertisers and publishers to reach, monetize and connect their audiences, increased 213% compared to the first quarter of 2020.

 

·At quarter end, Kubient’s platform had verified and fingerprinted over 994 million unique internet devices, an increase of 74% from 570 million at the end of the first quarter of 2020.

 

·Partnered with Zoox Smart Data to create a direct marketplace that enables real-time bidding programmatic access for demand platforms, brands and agencies, to reach unique audiences in hotels, airports and the MTA New York City Transit system. The strategic partnership will grow an existing audience of over 100 million Wi-Fi users a year, to almost to a billion users in the next 18 months.

 

·Joined the DPAA, the leading global trade marketing association connecting out-of-home (OOH) media with the advertising community while moving OOH to digital.

 

Management Commentary

“Our operational and financial performance in the first half of 2020 was encouraging despite the challenges we encountered due to the ongoing global pandemic,” said Kubient CEO Peter Bordes. “Most notably, we generated $1.3 million of net revenue from successful beta tests with two large enterprise clients for our high-margin, SaaS-based KAI ad fraud detection platform. The testing provided critical validation and future reference points for our platform’s ability to ingest vast amounts of data and then analyze it using our proprietary machine learning technology.


“Similar to many companies in the tech industry and beyond, Kubient’s operations were impacted by COVID-19 in Q2 as several of our customers and prospects temporarily decreased their advertising budgets. On a positive note, we have seen a steady increase in advertising budgets in the current quarter compared to Q2, which reinforces our belief that companies are adapting their businesses and marketing strategies to the current environment. In fact, at the end of June ad opportunities for Audience Cloud increased approximately 213% compared to just the end of March, which is a testament to our technology and growing base of publishers. With the proceeds from our IPO, we are expanding our sales and marketing team to both accelerate the number of ad opportunities and stimulate greater demand from advertisers. We believe that facilitating a greater pool of opportunities for publishers and advertisers will not only create more liquidity for our clients, but also help us better realize the full benefits of our scalable technology and robust business model.

 

 

 

 

 

 

“In the past few months, we believe we’ve generated clear operating momentum and, as a result of our recent IPO, have a solidified balance sheet to better capitalize on the potential expansive opportunities on the horizon. Our continued focus and successful execution in the near-term should position Kubient to realize its long-term mission, which is to transform the multi-billion-dollar, global advertising industry by enabling a highly efficient and liquid marketplace for advertisers and publishers.”

 

Second Quarter 2020 Financial Results

Net revenues increased to $92,000 from $49,000 in the same period last year. The increase in net revenues was primarily from one customer, partially offset by a decrease from another customer during the period.

 

Total operating expenses increased 16% to $1.2 million from $1.0 million in the same period last year. The increase in operating expense was primarily due to higher technology expenses, offset by a decrease in general and administrative expenses.

 

Net loss was $1.5 million, or $(0.42) per share, compared to $1.1 million, or $(0.32) per share, in the same year-ago period.

 

As of June 30, 2020, the Company had cash and cash equivalents of $45,000. As of August 14, 2020, after giving effect to the sale of units in the Company’s IPO and the gross proceeds of approximately $12.5 million and net proceeds of approximately $10.7 million received therefrom, the Company had $11.0 million in cash and cash equivalents, $435,000 of debt and 7.6 million common shares outstanding.

 

Six Month 2020 Financial Results

Net revenues increased to $1.5 million from $106,000 in the same period last year. The increase was primarily due to $1.3 million of revenue from two customers beta testing KAI in the first quarter of 2020.

 

Total operating expenses increased 52% to $2.4 million from $1.5 million in the same period last year. The increase in total operating expenses was primarily due to higher technology expenses and general and administrative expenses.

 

Net loss was $1.6 million, or $(0.43) per share, compared to $1.6 million, or $(0.44) per share, in the same year-ago period.

 

Conference Call

Kubient will hold a conference call today (September 23, 2020) at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss these results.

 

Kubient management will host the conference call, followed by a question and answer period.

 

U.S. dial-in: 1-877-407-9208

International dial-in: 1-201-493-6784

 

Please call the conference telephone number 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 949-574-3860.

 

 

 

 

 

The conference call will be broadcast live and available for replay here and via the Investor Relations section of Kubient’s website.

 

A telephonic replay of the conference call will be available after 8:00 p.m. Eastern time through September 30, 2020.

 

Toll-free replay number: 1-844-512-2921

International replay number: 1-412-317-6671

Replay ID: 13710171

 

About Kubient

Kubient is a technology company with a mission to transform the digital advertising industry to audience-based marketing. Kubient’s next generation cloud-based infrastructure enables efficient marketplace liquidity for buyers and sellers of digital advertising. The Kubient Audience Cloud is a flexible open marketplace for advertisers and publishers to reach, monetize and connect their audiences. The Company’s platform provides a transparent programmatic environment with proprietary artificial intelligence-powered pre-bid ad fraud prevention, and proprietary real-time bidding (RTB) marketplace automation for the digital out of home industry. The Audience Cloud is the solution for brands and publishers that demand transparency and the ability to reach audiences across all channels and ad formats. For additional information, please visit https://kubient.com/.

 

Forward-Looking Statements

The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

 

Kubient Investor Relations

Gateway Investor Relations

Matt Glover and Tom Colton

T: 1-949-574-3860

Kubient@gatewayir.com

 

 

 

 

Kubient, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

 

   For the Three Months Ended   For the Six Months Ended 
   June 30,   June 30, 
   2020   2019   2020   2019 
                 
Net Revenues  $91,537   $49,150   $1,473,450   $105,956 
                     
Operating Expenses:                    
Technology   551,157    381,786    1,031,558    754,737 
General and administrative   658,080    658,764    1,322,006    791,371 
                     
Total Operating Expenses   1,209,237    1,040,550    2,353,564    1,546,108 
                     
Loss From Operations   (1,117,700)   (991,400)   (880,114)   (1,440,152)
                     
Other (Expense) Income:                    
Interest expense   (296,483)   (143,663)   (729,295)   (160,099)
Interest expense - related parties   (101,637)   (115)   (202,551)   (115)
Gain on forgiveness of accounts payable - supplier   -    -    236,248    - 
Other income   10,500    -    12,294    244 
                     
Total Other Expense   (387,620)   (143,778)   (683,304)   (159,970)
                     
Net Loss  $(1,505,320)  $(1,135,178)  $(1,563,418)  $(1,600,122)
                     
Net Loss Per Share - Basic and Diluted  $(0.42)  $(0.32)  $(0.43)  $(0.44)
                     
Weighted Average Common Shares Outstanding -                    
Basic and Diluted   3,601,838    3,599,300    3,601,680    3,599,300 

 

 

 

 

 

 

Kubient, Inc.

Condensed Consolidated Balance Sheets

 

    June 30,     December 31,  
    2020     2019  
    (unaudited)        
Assets                
                 
Current Assets:                
Cash   $ 45,115     $ 33,785  
Accounts receivable, net     572,651       38,704  
Prepaid expenses and other current assets     29,389       28,072  
                 
Total Current Assets     647,155       100,561  
Intangible assets, net     1,445,226       83,333  
Property and equipment, net     5,827       4,549  
Deferred offering costs     433,898       285,196  
                 
Total Assets   $ 2,532,106     $ 473,639  
                 
Liabilities and Stockholders' Deficiency                
                 
Current Liabilities:                
Accounts payable - suppliers   $ 540,933     $ 785,180  
Accounts payable - trade     2,206,827       867,554  
Accrued expenses and other current liabilities     1,037,047       478,674  
Accrued interest     251,653       117,912  
Accrued interest - related parties     41,559       4,204  
Due to related party     29,000       29,000  
Notes payable, current portion     271,960       113,967  
Convertible notes payable, current portion, net of discount of $0 and $630,994 as of June 30, 2020 and December 31, 2019, respectively     -       2,569,006  
Convertible notes payable - related parties, current portion, net of discount of $0 and $281,701 as of June 30, 2020 and December 31, 2019, respectively     -       548,799  
Total Current Liabilities     4,378,979       5,514,296  
Convertible notes payable, non-current portion, net of discount of $330,585 and $0 as of June 30, 2020 and December 31, 2019, respectively     3,154,415       -  
Convertible notes payable - related parties, non-current portion, net of discount of $183,965 and $0 as of June 30, 2020 and December 31, 2019, respectively     722,035       -  
Notes payable, non-current portion     248,197       -  
Notes payable - related parties, non-current portion     585,000       -  
Total Liabilities     9,088,626       5,514,296  
                 
Commitments and contingencies (Note 8)                
                 
Stockholders' Deficiency:                
Preferred stock, $0.00001 par value; 5,000,000 shares authorized; No shares issued and outstanding  as of June 30, 2020 and December 31, 2019     -       -  
Common stock, $0.00001 par value; 95,000,000 shares authorized; 3,602,633 and 3,601,521 shares issued and outstanding  as of June 30, 2020 and December 31, 2019     36       36  
Additional paid-in capital     3,410,279       3,362,724  
Accumulated deficit     (9,966,835 )     (8,403,417 )
                 
Total Stockholders' Deficiency     (6,556,520 )     (5,040,657 )
                 
Total Liabilities and Stockholders' Deficiency   $ 2,532,106     $ 473,639  

  

 

 

 

 

 

Kubient, Inc.

Condensed Consolidated Statement of Cash Flows

(unaudited)

 

   For the Six Months Ended 
   June 30, 
   2020   2019 
         
Cash Flows From Operating Activities:          
Net loss  $(1,563,418)  $(1,600,122)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   139,145    - 
Bad debt expense   3,734    1,684 
Gain on forgiveness of accounts payable - supplier   (236,248)   - 
Allowance for other asset   -    200,000 
Stock-based compensation:          
Stock options   10,817    10,760 
Common stock   73,125    6,000 
Amortization of debt discount and debt issuance costs   585,409    125,683 
Amortization of debt discount and debt issuance costs - related parties   173,236    70 
Changes in operating assets and liabilities:          
Accounts receivable   (537,681)   (38,808)
Prepaid expenses and other current assets   (1,317)   (35,621)
Other asset   -    (270,000)
Accounts payable - suppliers   (7,999)   82,773 
Accounts payable - trade   209,292    55,596 
Accrued expenses and other current liabilities   373,284    (37,164)
Accrued interest   133,741    26,127 
Accrued interest - related parties   37,355    34 
           
Net Cash Used In Operating Activities   (607,525)   (1,472,988)
           
Cash Flows From Investing Activities:          
Purchase of intangible assets   (355,019)   - 
Purchase of property and equipment   (2,316)   - 
Advances to related party   -    (25,000)
           
Net Cash Used In Investing Activities   (357,335)   (25,000)
           
Cash Flows From Financing Activities:          
Advances from related party   -    250 
Repayment of advance from related party   -    (45,000)
Proceeds from issuance of convertible notes payable and          
investor warrants [1]   -    2,127,401 
Proceeds from issuance of notes payable   406,190    - 
Proceeds from issuance of notes payable - related parties   585,000    - 
Repayment of notes payable   -    (82,369)
Payment of deferred offering costs   (15,000)   - 
           
Net Cash Provided By Financing Activities   976,190    2,000,282 
           
Net Increase In Cash   11,330    502,294 
           
Cash - Beginning of the Period   33,785    7,518 
           
Cash - End of the Period  $45,115   $509,812 

                         

[1] The amount for the six months ended June 30, 2019 includes gross proceeds of $2,500,000, less issuance costs of $372,599 deducted directly from the offering proceeds.

  

Supplemental Disclosures of Cash Flow Information:        
Cash paid during the period for:          
Interest  $-   $8,331 
Income taxes  $-   $- 
           
Non-cash investing and financing activities:          
Original issue discount in connection with convertible notes payable  $285,000   $235,000 
Original issue discount in connection with convertible notes          
payable - related party  $75,500   $15,000 
Issuance of investor and placement agent warrants in connection with          
issuance of convertible notes payable  $-   $437,901 
Accrual of intangible assets  $1,144,981   $- 
Accrual of deferred offering costs  $148,702   $6,712 
Forgiveness of related party liability  $33,738   $- 
Equity issuance costs - placement agent warrants  $-   $16,667