Filing summary: IDI, Inc. (formerly Tiger Media, Inc.) — Q1 2015
Entity note: The supplied filing is IDI, Inc.’s Form 10-Q, not a filing identified as Fluent, Inc. It covers the quarter ended March 31, 2015. Unless otherwise indicated, financial amounts below are in USD thousands.
Business context and reporting period
IDI operated data-fusion services for the accounts-receivable-management and broader risk-management markets, alongside out-of-home advertising. On March 21, 2015, Tiger Media merged with TBO; for accounting purposes, IDI Holdings was the acquirer. Consequently, Q1 results primarily reflect IDI Holdings, with Tiger Media included only from March 22–31. The company changed its name to IDI, Inc. on April 30, 2015. No Q1 2014 comparative results are presented, so year-over-year comparisons are unavailable.
Key financial metrics
| Metric | Q1 2015 / March 31, 2015 |
|---|---|
| Revenue | $1,268 |
| Cost of revenue; gross profit | $618; $650 (51.3% gross margin) |
| Sales and marketing; general and administrative expense | $561; $1,748 |
| Operating loss; net loss | $(1,659); $(1,654) |
| Net loss attributable to IDI shareholders; loss per share | $(1,637); $(0.22) basic and diluted |
| Operating cash flow; investing cash flow; financing cash flow | $(2,129); $3,426; $0 |
| Cash and cash equivalents | $7,296, versus $5,996 at December 31, 2014 |
| Total assets; total liabilities; total shareholders’ equity | $59,005; $3,904; $55,101 |
| Current assets; current liabilities | $10,512; $3,904 |
| Debt | No debt is listed on the balance sheet; liabilities shown are current liabilities. |
Data fusion generated $1,258 of revenue and an operating loss of $1,435. Advertising services generated $10 of revenue and an operating loss of $86; these advertising results cover only March 22–31. The filing’s unaudited pro forma presentation, assuming the merger occurred at the start of the quarter, shows revenue of $1,729 and net loss of $3,447.
Material changes and notable transactions
- The merger substantially changed the reporting entity and its asset and equity base. The acquisition-date consideration was $44,112, including $35,472 of goodwill attributed to the acquisition of Tiger Media. Total goodwill was $40,698 at quarter-end.
- Compared with December 31, 2014, cash increased by $1,300; accounts receivable rose to $2,251; and total assets increased to $59,005, largely reflecting the merger and acquired advertising assets and intangibles. These balance-sheet comparisons span a major transaction and are not like-for-like operating comparisons.
- Common shares outstanding were 13,888,454 at March 31, following the merger and a 1-for-5 reverse split. The filing reports 13,888,954 shares outstanding as of May 1.
Outlook, liquidity, risks, and contingencies
- Management expected available resources to fund working capital and capital expenditures for the following 12 months, citing cost-saving actions and anticipated data-fusion growth. It also cautioned that additional debt or equity financing might be needed; financing could be unfavorable or dilute shareholders, and insufficient cash generation or financing could impair execution of the business plan or continued operations.
- Management expected revenue to grow through salesforce expansion, entry into additional markets, and new product and technology releases. It anticipated higher sales, executive, administrative, and infrastructure costs as headcount expanded. This was forward-looking commentary, not quantified guidance.
- Operating cash use was $2,129. The company had $3,777 of future minimum operating lease payments and $662 of material capital commitments under data-licensing and advertising-equipment contracts.
- Legal proceedings brought by TransUnion Risk and Alternative Data Solutions over ownership of purchased intellectual property and alleged noncompetition-agreement violations were ongoing. The filing warned that adverse rulings could affect financial position, results, and liquidity. A separate advertising-location landlord dispute was disclosed after quarter-end; management said it had secured a replacement location.
- Revenue concentration was notable: one customer represented 32% of quarterly revenue; four customers represented 29%, 18%, 16%, and 13% of receivables. Three data suppliers represented 37%, 17%, and 10% of purchases.
- The company reported no impairment for the quarter and no material adverse legal contingency provision. Management concluded disclosure controls were effective at a reasonable-assurance level.
Important facts for investors to verify
- Confirm the issuer and security being analyzed: this filing is for IDI, Inc., formerly Tiger Media, rather than Fluent, Inc.
- Review the merger accounting and pro forma results; reported Q1 figures do not include a full quarter of Tiger Media operations and have no Q1 2014 comparative.
- Assess cash burn, the assumptions behind management’s 12-month liquidity outlook, and the availability and potential dilution of future financing.
- Track outcomes of the TransUnion litigation, the landlord dispute, and the $3,777 lease and $662 capital commitments.
- Reconcile share counts, merger earn-outs, assumed restricted stock units, warrants, and the post-quarter-end stock incentive plan, including the difference between March 31 and May 1 reported common shares.