Snap Interactive Announces Business and Financing Updates Following a Strong Valentine's Day
The Company Announces Its New Dating App "The Grade" Surpasses 4,000,000 Swipes; Embarks on 2015 Globalization Initiative; Secures $3 Million Financing
Feb 20, 2015
NEW YORK, Feb. 20, 2015 /PRNewswire/ -- Snap Interactive, Inc. ("SNAP" or the "Company") (OTCQB: STVI), announced new developments and milestones to its primary dating applications – The Grade and AYI. Additionally, SNAP also announced a $3 million senior secured convertible note financing provided by Sigma Opportunity Fund II, LLC, an affiliate of Sigma Capital Partners, LLC ("Sigma").
The Grade, an iPhone® app launched in November, 2014, aims to create a female-friendly experience through accountability, using a proprietary algorithm to reward bona fide daters with good grades, while expelling 'failing users' that are hostile, inarticulate, and undesirable. The Grade logged its 4 millionth swipe on February 15th, assisted by an increase in user activity around Valentine's Day. A swipe is the gesture that a user makes when browsing a profile, swiping right to signify interest, or left to move on to the next profile. Average daily swipes in February 2015 are up 55% compared to January 2015 and 126% compared to December 2014.
SNAP's Chief Executive Officer, Clifford Lerner, commented, "We have been very pleased with the market reception of The Grade. Since the week of February 6th, The Grade has been a featured app in the U.S. Social Networking category on the Apple® App StoreSM. We believe our transparent grading method holds users accountable for their behavior on The Grade, which leads to improved message quality and responsiveness. Specifically, women respond 57% of the time to messages initiated by men, while the percentage of inappropriate messages originated by men is now significantly below 1%. Responsiveness and offensive behavior are pain points in mobile dating, and we believe The Grade offers a better experience for both men and women."
The Grade is currently free and available to download here in the App Store on iTunes or by searching "The Grade Dating." More information about The Grade can be found at: http://www.thegradedating.com.
In addition, SNAP unveiled expansion plans for its multi-platform dating application, AYI.com. As a complement to its domestic growth strategy, the Company plans to localize the AYI application for large, untapped global dating markets through translation and other cultural adaptations. Presently, AYI's revenue is nearly evenly split between the U.S. and international markets, despite the fact that the application is only currently offered in English.
SNAP's Chief Operating Officer, Alex Harrington, commented, "AYI has been a global application from inception, but until now, we haven't been effective in building non-English speaking language communities abroad. We are now prepared to make a multi-year investment in local adaptations to unlock these large foreign markets. We estimate the international dating market to be more than twice as large as the U.S. market, so the long-term revenue potential is large."
Additionally, the Company announced earlier this week that it had raised gross proceeds of $3 million through the issuance of a $3 million 12% Senior Secured Convertible Note to Sigma Opportunity Fund II, LLC, with a plan to use the proceeds to fund general corporate purposes, including increased user acquisition for The Grade and AYI. Aegis Capital Corp. acted as the exclusive placement agent for the offering.
Mr. Harrington continued, "We are delighted to have found a strategic growth capital partner in Sigma, who recognizes both the Company's recent track record of cash flow generation, and also the growth potential of AYI and The Grade."
Maydan Rothblum, Managing Director, Sigma Opportunity Fund II, LLC commented, "SNAP is a veteran in the dynamic online dating industry, with a history of innovation. Our investment was primarily founded on the core AYI application and the recently streamlined business operations, which together have driven improved financial results over the past several quarters. In addition, SNAP's next generation app - The Grade - has the potential to become a leading dating application, which is an opportunity to unlock future shareholder value. We look forward to an active, value-added partnership with the Company."
Sigma Capital Partners, LLC, through its affiliate fund Sigma Opportunity Fund II, LLC, is a multi-strategy private equity firm that focuses on investing in small-to-mid-size companies operating primarily in the IT, Telecom, Technology and Business Services industries. Sigma works closely with management to unlock shareholder value and provide guidance and assistance in the areas of finance, operations, strategy, M&A and business development.
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About The Grade
The Grade is the first dating application that holds users accountable for their behavior by using a proprietary algorithm that assigns letter grades to users ranging from "A+" to "F" based on profile quality, responsiveness, and message quality. Users with a grade of "D" or "F" receive a warning and instructions on how to improve their grade, while users who maintain an "F" grade are expelled. They do have the ability to "appeal" the decision by providing compelling reasons why they should be allowed back; however, re-entry is not guaranteed. By expelling low-quality users who receive an "F" grade, The Grade aims to create a community of high-quality users who are desirable, articulate and responsive.
About Snap Interactive, Inc.
Snap Interactive, Inc. develops, owns and operates dating applications for social networking websites and mobile platforms. The Grade is a mobile dating application catering to high quality singles. SNAP's flagship brand, AYI.com is a multi-platform online dating site with over one million active users. For more information, please visit http://www.snap-interactive.com/.
The contents of our websites are not part of this press release, and you should not consider the contents of these websites in making an investment decision with respect to our common stock.
Facebook® is a registered trademark of Facebook Inc. Apple® and iPhone® are registered trademarks of Apple Inc. and App Store SM is a registered service mark of Apple Inc. Android® is a registered trademark of Google Inc. The Grade is a trademark and AYI.com® is a registered trademark of Snap Interactive, Inc.
This press release contains "forward-looking statements." Such statements may be preceded by the words "intends," "may," "will," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential" or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company's control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with general economic, industry and market sector conditions; the Company's future growth and the ability to use financing proceeds to implement the Company's growth strategy; the ability to increase revenue, decrease expenses and increase the number of active subscribers, new subscription transactions or monthly active users; the ability to adapt or modify the Company's applications for the international market and derive revenue therefrom; the ability to improve the conversion of users to paid subscribers; the ability to anticipate and respond to changing user and industry trends and preferences; the intense competition in the online dating marketplace; the ability to release new applications or derive revenue from new applications; and circumstances that could disrupt the functioning of the Company's applications. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC's web site at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.
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SOURCE Snap Interactive, Inc.