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PeerStream (OTC:PEER) reports Q3 results

Tony Zerucha

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PeerStream (OTC:PEER), a global blockchain-based has announced financial and operational results for the third quarter  ending Sept. 30.

Financial highlights:

  • Total revenue of $6.7 million increased 12.8% as compared to the same period last year due to new Business Solutions offerings and recognition of revenue from the technology services agreement with ProximaX;
  • Business Solutions contract prepayments of approximately $4.8 million have been booked as deferred technology service revenue on the balance sheet at Sept. 30 and will be recognized over the remaining term of the contract with ProximaX;
  • Net loss was approximately $570,000, a $1.4 million improvement when compared to a net loss of approximately $2.0 million for 3Q17. Net loss in the third quarter of 2018 was driven by a $576,000 impairment loss on digital tokens received in connection with the ProximaX technology services agreement;
  • Adjusted EBITDA, a non-GAAP measure, was approximately $884,000, a $2.0 million increase compared to an adjusted EBITDA loss of approximately $1.2 million in the comparable period last year; and
  • Cash balances totaled $7.2 million with zero debt on the balance sheet.

A focus for the quarter was building infrastructure for PeerStream Business Solutions through the addition of internal business development resources, the initialization of marketing tactics and the augmentation of execution capabilities. PeerStream Business Solutions provides consulting, services and support related to blockchain technology adoption for corporate clients.

Development continued on PeerStream Protocol (PSP), an open source, multimedia delivery protocol built on blockchain technology and designed to increase privacy, security, scalability, and cost efficiency for real-time communication applications in such areas as video conferencing, messaging and workforce collaboration. PSP is available for license and is designed for third party developers and corporate clients. Already under license by ProximaX, PSP is currently on target for initial launch in Q1 of 2019.

Work continued toward the Q4 2018 launch of a private beta version of Backchannel, a video messaging service leveraging enhanced privacy benefits based on a decentralized blockchain-based architecture.

PeerStream also signed a master services agreement with Chateaux Software, an enterprise blockchain solution development organization, to expand the breadth of PeerStream’s service capabilities and client reach.

“During the third quarter, we continued to build out the infrastructure and operations of our Business Solutions practice to ensure our service offerings are seamless as we follow up on a growing list of client leads and build a pipeline of project,” CEO Alex Harrington said. “Subsequent to the quarter end, we signed an MSA with Chateaux, one of the leading enterprise blockchain solution development organizations and a partner with IBM Blockchain, Microsoft, and others.”

Near-term business objectives:

For the near term, PeerStream said its business objectives include:

  • Advancing development of PSP, our multimedia delivery protocol that integrates with blockchain technology;
  • Enhancing the PeerStream Business Solutions team and developing its resources and customer pipeline;
  • Launching a private beta version of Backchannel, a blockchain-based video messaging service;
  • Growing the live video streaming entertainment business by increasing the content creator base and monetization for Camfrog Live, and extending this service to users of the Paltalk application;
  • Seeking additional partnerships with blockchain-based companies to enhance the breadth of the technology platform and capabilities;
  • Exploring strategic opportunities such as business partnerships and merger and acquisition opportunities, and strategic alternatives with respect to non-core assets;
  • Continuing to take steps towards listing our common stock on a national securities exchange; and
  • Intellectual property defense.

“We believe that Camfrog’s industry-leading group video chat service has stimulated new user interest through the addition of live streaming entertainment, which we added late last year,” chairman, president and COO Jason Katz said. “We expect to extend this technology enhancement to offer a similar one-to-many live streaming video capability within our other major video chat application, Paltalk, by the end of 2018. We are also testing other live streaming formats, including a proprietary live trivia game called ‘Majority Rules’, as we work to add new applications to our product portfolio.”

Liquidity and capital resources

  • As of September 30, 2018, PeerStream’s cash balances totaled $7.2 million;
  • PeerStream continues to be long-term debt free; and
  • Management said it believes they have sufficient working capital to fund operations, research and development, and organic growth initiatives for at least the next 12 months.

Tony Zerucha

Tony Zerucha is an alternative finance journalist with more than seven years experience in the space. The author of more than 1,000 articles, Tony was named LendIt's 2018 Journalist of the Year.

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