Entertainment AI plc
("EAI", "Group" or the "Company")
Year End Trading Update
Change of Accounting Reference Date and Change of Registered Office
Entertainment AI plc (EAI: AIM), a fast-growing technology and media platform company, is pleased to announce a trading update for period ended 31 December 2019. The Group continued its strong performance during 4Q following its 30 September 2019 launch on AIM with its accompanying investment round.
EAI also announces that it will operate as a calendar year company in order to align itself with the financial years of its wholly-owned subsidiary trading companies.
The Company will also participate in the 2020 Growth and Innovation Forum on 11 February in London to communicate its technology leadership and 2020-21 plan to capture the accelerating multi-billion market for short-form video content.
Year End Operational Highlights:
· EAI operates through two wholly-owned subsidiaries: GT Channel, Inc ("GTC"), a leading multichannel network with content and creators for auto and lifestyle audiences and Tagasauris, Inc ("Tag"), a leading AI and machine learning company.
· GTC continues to grow both its global audience and net revenue strongly, in line with expectations
o 2019 GTC multichannel network YouTube audience base of enthusiasts at approximately 12.3 billion video views, up 45% (2018: 8.5 billion)
§ Acceleration of unpaid subscribers who want more content from GTC and its creator partners increased 43% during 2H to approximately 100 million (1H19: c. 70 million)
o 2019 net revenue of $10.3 million, up 59% (2018: $6.5 million)
§ Gross ad revenue from global audience of approximately $18.7 million prior to commission deducted by YouTube
o 4Q launch of GTC in Latin America, increasing total addressable market and adding to 2020 audience growth and net revenue
· Tag completed a successful pilot with global strategic partner Sumitomo Corporation deploying proprietary technology to deliver an enriched audience viewing experience for the Rugby World Cup in Japan on Sumitomo's JSports network
o Pilot demonstrated technology enhances viewer growth and interactivity through the use of "micro-moments" - real-time opportunities for e-commerce
o Validation from Rugby World Cup reinforces the Group's plan to deploy EIS/VCT to add experienced software engineers to drive products to extract additional e-commerce value for audiences, creators and global brands, such as Sumitomo, on Owned and Operated web sites
o Brand / Business Development pipeline is building for technology licensing opportunities
· EAI balance sheet strong: year-end cash position approximately $9.5 million after AIM-listing and initial technology development spend
o Working capital is sufficient to drive both the GTC network and Tag's technology products unlocking shareholder value from expected synergies
Dr. Patrick DeSouza, Chairman of Entertainment AI, stated, "We are at the beginning of an exciting journey to create significant shareholder value. Global market demand is strong and expected to only accelerate with smart mobile devices and increasing demand from audiences and brands for consuming short form video and realizing e-commerce opportunities. The disruptive competitive landscape for telecom companies and technology companies like Facebook, Google and Apple, who are fast becoming media companies, provides us with a great opening. We are attacking the market at the right time with proprietary AI and e-commerce technologies for video and a global audience base with 100 million unpaid subscribers to monetize. Armed with a strong board and management team, value-add institutional investors and global corporate partners, we are confident that we can make a difference in the market."
· Growth and Innovation Forum on Tuesday, 11 February at Business Design Centre, London
· Product release for short-form video creators demonstrated at Forum
o Value-add for GTC
o Licensing / Software as a Service brand opportunities
Todd Carter, CEO of Entertainment AI, stated, "We are excited to be presenting our suite of technology offerings to investors at the Growth and Innovation Forum. These products will differentiate us in the marketplace and enable us to unlock significant commercial value from short-form video content as this format is becoming the dominant entertainment offering worldwide. We see a significant opportunity to grow revenue and profits from our installed base of audience, unpaid subscribers, creators and partners. Some of these proprietary offerings will be made available to brands as we introduce licensing opportunities from our platform. We appreciate the support of our investors and look forward to executing our global growth plan."
Change of Accounting Reference Date
The Board has considered and approved a change in the accounting reference date to 31 December to bring the Company's financial statements in line with that of its subsidiary companies' reporting periods presented in the Company's admission document and to bring additional clarity against market forecasts for the Company.
As a result of the change of accounting reference date, the Company's reporting calendar will be as follows:
· Audited results (including both Blockchain Worldwide plc's results only pre-admission and the consolidated EAI group post-admission) for the six months to 31 December 2019 to be published before 31 May 2020;
· Interims (consolidated EAI group results) for the six months to 30 June 2020 to be published no later than the end of September 2020 pursuant to the AIM Rules for Companies; and
· Audited results that reflect the consolidated EAI group, for the 12 months to 31 December 2020 to be published before 30 June 2021 pursuant to the AIM Rules for Companies.
Change of Registered Office
The Company is moving its registered corporate office to 27/28 Eastcastle St., London W1W 8DH which will become effective on 22 January 2020.
Patrick DeSouza, Chairman
Todd Carter, CEO
Adrian Hargrave, CFO
Tel: +1 203 654 5426
+44 (0)7775 701 838
Dowgate Capital Ltd (Joint Broker and Research Coverage)
Tel: 020 3903 7715
WH Ireland (Joint Broker and Nomad)
Adrian Hadden / James Sinclair-Ford / Matthew Chan
Tel: 020 7220 1666
IFC Advisory Limited
Graham Herring / Zach Cohen
Tel: 020 3934 6630
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014