RTB Digital (RTB) Q2 2016 earnings summary

Executive summary

• Q2 2016 revenue rose to $714,522 from $330,000, driven by closing a larger hotel acquisition; net income fell to $4,819 from $78,957 as gross profit declined and expenses increased.

• H1 revenue was $969,522 versus $781,418, while net income was $244 versus $171,121; negative working capital and stockholders’ deficit raised substantial doubt about ongoing operations.

Financial highlights

• Q2 gross profit was $203,725 versus $244,000; operating income was $8,571 versus $114,990.

• H1 gross profit was $353,725 versus $459,418; operating loss was $5,239 versus operating income of $258,883.

• H1 G&A expense increased to $358,964 from $200,535, mainly due to higher payroll and staff expenses; consulting expense rose to $615,797 from $322,000 following a large hotel deal.

• Cash was $71,647 at June 30, 2016, versus $46,672 at Dec. 31, 2015; H1 operating cash use was $46,815.

Outlook and guidance

• Focus for the next 12 months is on real estate transactions; management expects net service revenue and continued major-shareholder note support to sustain operations for another 12 months.

• Management expects to grow real estate and financial advisory revenue, but additional debt or equity financing may be needed absent significant revenue growth; funding availability and profitability are uncertain.

• Management sees potential to build a sustainable U.S. commercial real estate revenue stream through existing clients, new client development, asset management, and a national platform.