Frankly Inc. reported earnings results for the third quarter and nine months ended September 30, 2018. For the quarter, the company reported revenue of $6 million from $6.5 million for the same period a year ago. The year-over-year decrease was due to lower license fees, usage fees, as well as professional services fees due to less ad hoc professional services engagements in the 2018 period. Net loss was $14,102,800 million compared to $3,129,136 million for the same period a year ago the year-over-year increase in net loss of $11.0 million was primarily due to the $12.8 million impairment expense. Adjusted EBITDA was $972,214 compared to Adjusted LBITDA of $179,937 for the same period a year ago. The year-over-year increase in adjusted EBITDA of $1.2 million was primarily due to decreases in operating expenses highlighted in the net loss section above and was partially offset by a decrease in revenue.

For the nine months, the company reported revenue of $17.6 million compared to $19.4 million for the same period a year ago. Net loss was $19,371,814 million compared to $7,037,064 million a year ago. The increase in net loss was primarily due to the recognition of $12.8 million in impairment expense. Adjusted EBIDTA was $866,255 compared to adjusted LBITDA of $132,171 in the prior year period. The increase in adjusted EBITDA was primarily due to decreases in operating expenses.

The company recorded a $12.8 million impairment expense in the third quarter of 2018 as a result of full impairment of its customer relationship intangible assets and capitalized software development costs, which each had carrying values prior to impairment of $6.1 million as of September 30, 2018, as well as property and equipment impairment of $567,000.

The company is currently forecasting negative cash flows in 2019 and beyond which do not support the carrying value of the long-lived assets. In the aggregate, these terminations represent a significant percentage of the company's total revenue and are expected to have a material negative impact on the company's 2019 revenues and related income (loss).