UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
May 7, 2015
RIGHTSCORP,
INC.
(Exact name of registrant as specified in its
charter)
Nevada |
|
000-55097 |
|
33-1219445 |
(State or Other Jurisdiction
of Incorporation) |
|
(Commission
File Number) |
|
(I.R.S. Employer
Identification Number) |
3100 Donald Douglas Loop North
Santa
Monica, CA 90405
(Address of principal executive offices) (zip
code)
310-751-7510
(Registrant’s telephone
number, including area code)
Copies to:
Gregory Sichenzia, Esq.
Jeff Cahlon, Esq.
Sichenzia Ross Friedman Ference LLP
61 Broadway
New York, New York 10006
Phone: (212) 930-9700
Fax: (212) 930-9725
(Former address, if changed since last
report)
Check the appropriate box below if the Form
8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
(see General Instruction A.2. below):
[ ] Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial
Condition.
On May 7, 2015, Rightscorp, Inc. issued a press
release announcing its financial results for the period ended March 31, 2015. The press release is attached hereto as Exhibit 99.1.
In accordance with General Instruction B.2
of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed”
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject
to the liability of that section, and shall not be incorporated by reference into any registration statement or other document
filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference
in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 Press Release
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 8, 2015 |
By: |
/s/
Christopher Sabec |
|
Name: |
Christopher Sabec |
|
Title: |
Chief Executive Officer |
Rightscorp
Reports First Quarter 2015 Financial Results
Company
Delivers 63% Growth in Year-Over-Year Revenues Based on Increase in Copyrights, ISP Participation, and Settlements Closed
Santa Monica,
Calif. – May 7, 2015 – Rightscorp (OTCQB: RIHT), the leading provider of monetization services for artists and holders
of copyrighted Intellectual Property (IP), today announced financial results for the first quarter of 2015 ended March 31, 2015.
Financial
Highlights:
● |
Company
increased revenues due to growth in copyrights, ISP participation, and settlements closed; |
|
|
● |
63%
increase in revenues to $307,904 for the first quarter ended March 31, 2015, from $188,933 for the same period in 2014 due
to growth in copyrights, ingestion rates, and increase in settlements from cases closed; |
|
|
● |
27%
sequential increase in revenues from $241,928 in the fourth quarter of 2014; |
|
|
● |
Cash
and cash equivalent of $823,531 and $1,666,914 at March 31, 2015 and December 31, 2014. |
Operational
Highlights:
● |
Company
announced it increased its Internet Service Provider (ISP) participation from receiving payments on 50 ISPs in March 2014,
to over 233 ISPs in March 2015, representing a growth of over 466% in 12 months. The ISP participation includes an estimated
15% of homes in the U.S.; |
|
|
● |
On
March 4, 2015, Rightscorp reported 200,000 copyright infringement cases closed including more than 1,000 cases closed on Comcast
and Google Fiber; |
|
|
● |
Signed
two new contracts in January 2015 to represent an additional 250,000 additional copyrights; |
Robert
Steele, Rightscorp President and COO commented, “During the first quarter we demonstrated our successful execution in increasing
copyrights under representation, ingestion of our authorized copyright catalog, and the number of ISPs that help monetize our
business through settlements. We remained focused on strengthening our balance sheet and repaid a portion of our convertible notes
and notes payable. Organically our top line grew 63% which we are extremely proud to report as we believe this shows our ability
to generate consistent sustainable revenue growth.”
Rightscorp
CEO Christopher Sabec, added, “As an industry leader in combating copyright infringement in the entertainment space,
we continue to seek ways to preserve digital assets that include movies, TV, games and software and protect those who create and
own intellectual property. We have taken imperative steps to execute on such key initiatives, which include striking deals with
copyright owners to represent and collect on their digital media assets, collaborating with ISPs to support our vision and effectively
monetizing and paying our clients their fair share. We have built an impressive track record and in two short years, we have successfully
closed over 200,000 cases of copyright infringement, are working with over 233 ISPs in the United States, and represent more than
1.5 million copyrights. More and more, the entertainment press is starting to feature several front page stories related to piracy
and we have been approached to serve as experts in this subject matter. Rightscorp provides a key line of defense for intellectual
property in today’s environment of content piracy and cyber-attack and we anticipate a higher demand for our solution in
the coming months.”
First
Quarter 2015 Financial Summary
Revenues
for the first quarter ended March 31, 2015 were $307,904, up 63% from $188,933 in the same period last year. Sequentially, revenues
rose 27% from $241,928 in the fourth quarter of 2014. The growth in revenues were driven by the Company’s ability to increase
the number of copyrights under contract, active copyrights ingested into Rightscorp’s automated system growing to more than
250,000 and by the growing number of ISPs participating in the Company’s service, creating a multiplier effect.
Rightscorp
incurred operating expenses of $1,237,672 for the first quarter of 2015 compared to $829,389 for prior-year quarter. Part of the
increase in expenses was due to increased fees paid to copyright holders in the period. General and administrative expenses were
$1,052,867 for the quarter ended March 31, 2015 compared to $692,015 for the year-ago quarter, due to increased wages, professional
and investment banking fees, and legal costs.
Sales
and marketing costs were $1,497 for the first quarter of 2015, from $31,308 for the first quarter of 2014. The decrease was due
to the Company’s growing market presence and reputation with the copyright holders lowering the costs for marketing this
quarter. Depreciation and amortization expenses were $29,356 during quarter ended March 31, 2015, an increase of $17,757 compared
to $11,599 in the year-ago quarter.
For
the quarter ended March 31, 2015, the Company generated an operating loss of $(929,768) and net income of $121,991 or $0.00 per
share compared to an operating loss of $(640,456) and a net loss of $(651,042) or $(0.01) per share for same period prior year.
The
Company had cash and cash equivalents totaling $823,531 and $1,666,914 at March 31, 2015 and December 31, 2014.
Conference
call information:
Conference
call information:
Date: Thursday,
May 7, 2015
Time: 4:30
P.M. Eastern Time (ET)
Dial in
Number for U.S. & Canadian Callers: 1-888-669-0687
Dial in
Number for International Callers (Outside of the U.S. & Canada): 1-862-255-5363
Participating
on the call will be Rightscorp Chief Executive Officer Christopher Sabec and Chief Operating Officer Robert Steele, who will discuss
operational and financial highlights for the first quarter 2015.
To join
the live conference call, please dial into the above referenced telephone numbers five to ten minutes prior to the scheduled conference
call time. A live webcast and archive of the call will also be available on Rightscorp’s website at: http://rightscorp.equisolvewebcast.com/q1-2015.
A replay
will be available for 14 days starting on May 7, 2015 at approximately 8:00 P.M. (ET). To access the replay, please dial 1-888-640-7743
in the U.S. and 1-754-333-7735 for international callers. The conference ID# is 118701.
About
Rightscorp, Inc.
Rightscorp
(RIHT) is a leading provider of monetization services for artists and holders of copyrighted Intellectual Property (IP).
The Company’s patent pending digital loss prevention technology focuses on the infringement of digital content such as music,
movies, software, books and games and ensures that owners and creators are rightfully paid for their IP. Rightscorp implements
existing laws to solve copyright infringements by collecting payments from illegal file sharing activities via notifications sent
through Internet Service Providers (ISPs). The Company’s technology identifies copyright infringers, who are offered a reasonable
settlement option when compared to the legal liability defined in the Digital Millennium Copyrights Act (DMCA). Based on the fact
that 22% of all Internet traffic is used to distribute copyrighted content without permission or compensation to the creators,
Rightscorp is pursuing an estimated $2.3 billion opportunity and has monetized major media titles through relationships with industry
leaders. http://www.rightscorp.com/
Safe
Harbor Statement
This press
release may include forward-looking statements. All statements other than statements of historical fact included in this press
release, including, without limitation, statements regarding the Company’s anticipated financial position, business strategy and
plans and objectives of management of the Company for future operations, are forward-looking statements. When used in this press
release, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,”
and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking
statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available
to the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements
as a result of certain factors not limited to, general economic and business conditions, competitive factors, changes in business
strategy or development plans, the ability to attract and retain qualified personnel, and changes in legal and regulatory requirements.
Such forward-looking statements reflect the current views of the Company with respect to future events and are subject to these
and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity
of the Company. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by this paragraph.
For further
investor and media information contact:
Andrew Haag
Managing
Partner
IRTH Communications
rightscorp@irthcommunications.com
1-866-976-4784
[Financial
Tables to Follow]
Rightscorp,
Inc.
Consolidated
Statements of Operations
(Unaudited)
| |
Three Months Ended | | |
Three Months Ended | |
| |
March 31, 2015 | | |
March 31, 2014 | |
Revenue | |
$ | 307,904 | | |
$ | 188,933 | |
| |
| | | |
| | |
Operating expenses: | |
| | | |
| | |
Copyright holder fees | |
| 153,952 | | |
| 94,467 | |
General and administrative | |
| 1,052,867 | | |
| 692,015 | |
Sales and marketing | |
| 1,497 | | |
| 31,308 | |
Depreciation and amortization | |
| 29,356 | | |
| 11,599 | |
Total operating expenses | |
| 1,237,672 | | |
| 829,389 | |
| |
| | | |
| | |
Loss from operations | |
| (929,768 | ) | |
| (640,456 | ) |
| |
| | | |
| | |
Other Income (expenses): | |
| | | |
| | |
Interest expense | |
| (298 | ) | |
| (10,586 | ) |
Gain on valuation of derivative | |
| 1,052,057 | | |
| - | |
Total other income (expenses) | |
| 1,051,759 | | |
| (10,586 | ) |
| |
| | | |
| | |
Income (loss) from operations before income taxes | |
| 121,991 | | |
| (651,042 | ) |
| |
| | | |
| | |
Provision for income taxes | |
| - | | |
| - | |
| |
| | | |
| | |
Net income (loss) | |
$ | 121,991 | | |
$ | (651,042 | ) |
| |
| | | |
| | |
Net income (loss) per share – basic and diluted | |
| 0.00 | | |
| (0.01 | ) |
| |
| | | |
| | |
Weighted average common shares – basic and diluted | |
| 89,876,421 | | |
| 69,071,926 | |
Rightscorp,
Inc.
Consolidated
Balance Sheets
| |
March 31, 2015 | | |
December 31, 2014 | |
| |
(Unaudited) | | |
(Unaudited) | |
Assets | |
| | | |
| | |
Assets | |
| | | |
| | |
Cash | |
$ | 823,531 | | |
$ | 1,666,914 | |
Prepaid expenses | |
| 108,891 | | |
| 190,346 | |
Total Current Assets | |
| 932,422 | | |
| 1,857,260 | |
Other Assets | |
| | | |
| | |
Fixed assets, net | |
| 215,141 | | |
| 240,272 | |
Intangible assets, net | |
| 12,675 | | |
| 16,900 | |
Total Assets | |
$ | 1,160,238 | | |
$ | 2,114,432 | |
| |
| | | |
| | |
Liabilities and Stockholders’ Deficit | |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
Accounts payable and accrued liabilities | |
$ | 543,760 | | |
$ | 564,579 | |
Convertible notes payable, net of discount of $0 and $0 | |
| - | | |
| 10,000 | |
Notes payable | |
| 29,325 | | |
| 43,988 | |
Derivative liabilities | |
| 1,367,030 | | |
| 2,419,087 | |
Total Current Liabilities | |
| 1,940,115 | | |
| 3,037,654 | |
Total Liabilities | |
| 1,940,115 | | |
| 3,037,654 | |
| |
| | | |
| | |
Stockholders’ Deficit: | |
| | | |
| | |
Preferred stock, $.001 par value; 10,000,000 shares authorized; null shares issued and outstanding | |
| - | | |
| - | |
Common stock, $.001 par value; 250,000,000 shares authorized; 89,896,421 and 89,896,421shares issued and outstanding, respectively | |
| 89,896 | | |
| 89,896 | |
Common stock to be issued | |
| 50,000 | | |
| 50,000 | |
Additional paid in capital | |
| 6,051,613 | | |
| 6,030,259 | |
Accumulated deficit | |
| (6,971,386 | ) | |
| (7,093,377 | ) |
Total stockholders’ deficit | |
| (779,877 | ) | |
| (923,222 | ) |
Total Liabilities and Stockholders’
Deficit | |
$ | 1,160,238 | | |
$ | 2,114,432 | |
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