ANGUILLA, B.W.I., July 27, 2017 – Shoal Games Ltd. (TSXV: SGW) (OTCQB: SGLDF) (“the Company”), mobile software developer, publisher, and owner of Rooplay (www.rooplay.com) and the Rooplay Originals games featuring Garfield, today announced its unaudited financial results for the second quarter ended June 30, 2017. All amounts are presented in United States dollars and are in accordance with United States Generally Accepted Accounting Principles.
Total revenue, net of platform fees to Apple, Google and Amazon, for the quarter ended June 30, 2017, decreased to $22,776, from revenue of $33,259, in the first quarter of 2017 and from revenue of $77,821 for second quarter of 2016. The decrease in total revenue compared to the second quarter of fiscal 2016 and the first quarter of fiscal 2017, is due to lower marketing spend whilst the Company completed the development of Rooplay.
Sales and marketing expenses were $50,531 for the quarter ended June 30, 2017, an increase from sales and marketing expenses of $29,601 in the first quarter of 2017 and $166,758 in the second quarter of 2016. The increase in selling and marketing expenses in the quarter ended June 30, 2017, compared to the first quarter of fiscal 2017, was due to a larger marketing campaign to promote the initial launch of Rooplay. The decrease in sales and marketing expenses in the quarter ended June 30, 2017, compared to the second quarter of fiscal 2016 was due to a lower marketing spend for player acquisitions in Trophy Bingo and Garfield’s Bingo whilst the Company prepared for the launch of Rooplay. Selling and marketing expenses principally include publishing services and user acquisition costs to acquire players.
General and administrative expenses increased to $71,090 for the quarter ended June 30, 2017, from costs of $50,599 in the first quarter of 2017 and $34,410 for the second quarter of fiscal 2016. The increase in general and administrative expenses compared to the second quarter of fiscal 2016 and the first quarter of fiscal 2017, is due to the legal expenses incurred in preparing the private placement and costs incurred from the financing.
Salaries, wages, consultants and benefits increased to $116,537 for the quarter ended June 30, 2017, an increase over salaries, wages, consultants and benefits of $101,593 in the first quarter of 2017 and $105,887 in the second quarter of 2016. This increase compared to the second quarter of fiscal 2016 and the first quarter of fiscal 2017, is due to higher consultant charges incurred.
Development costs decreased to $196,816, for the quarter ended June 30, 2017, a decrease over development costs of $214,495 during the first quarter of 2017 and $251,534 during the second quarter of fiscal 2016 and amortization of $120,503 of the capitalized development costs during the second quarter of fiscal 2016. The decrease compared to the second quarter of fiscal 2016 and the first quarter 2017, is due to lower development expenses incurred in the development of the Company’s products.
The net loss for the quarter ended June 30, 2017, amounted to ($439,042), a loss of ($0.01) per share, compared to a net loss of ($383,947), a loss of ($0.01) per share and a net loss of ($620,968) or ($0.01) per share in the quarter ending June 30, 2016.
During the quarter ended June 30, 2017, we used cash of ($563,509) in operating activities compared to cash used in operating activities of ($1,477,535) in the same period in the prior year and compared to using cash of ($216,339) in the first quarter of 2016.
Net cash generated by financing activities was $785,728 in the quarter ended June 30, 2017, which compares to cash generated by financing activity of $1,513,354 in the same period in the prior year and $188,135 during the first quarter of fiscal 2017. This cash generated by financing activity is due to the cash raised from the private placement Unit offering.
We had cash of $253,995 and working capital of $214,189 at June 30, 2017. This compares to cash of $60,190 and working capital of $13,896 at December 31, 2016.