Frankly Inc. Reports Earnings Results for the Third Quarter and Nine Months Ended September 30, 2018; Reports Impairment Expense for the Third Quarter Ended September 30, 2018; Provides Earnings Guidance for the Full Year of 2019
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).