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Kubient, Inc. (KBNT) SEC Filing 10-Q Quarterly Report for the period ending Thursday, March 31, 2022

SEC Filings

KBNT Quarterly Reports

Kubient, Inc.

CIK: 1729750 Ticker: KBNT

Exhibit 99.1


Kubient Reports Fourth Quarter and Full Year 2021 Results

NEW YORK – March 30, 2022 –
Kubient, Inc.
(NasdaqCM: KBNT, KBNTW) (“Kubient” or the “Company”), a cloud-based software platform for digital advertising, today reported financial results for the fourth quarter and full year ended December 31, 2021.

Fourth Quarter 2021 and Recent Operational Highlights

Acqui-hired MediaCrossing Inc., a premier digital advertising agency dedicated to bringing advertising tools, technologies and expertise to brands, to operate within Kubient's Managed Services division.
 

Appointed Mitchell Berg as the Company’s Chief Technology Officer (“CTO”), who brings more than 20 years of technology, engineering, and executive management experience to the Kubient management team.
 

Partnered with Verve Group, an omnichannel ad platform, to increase transparency and reduce fraud in the advertising supply chain. The partnership opens up premium inventory for advertisers working with Verve Group, and enables Kubient's publishers the ability to access additional premium inventory from Verve Group, ultimately creating more transparency and efficiency for brands and agencies.


Extended contract with Yahoo to become a Kubient demand side partner (“DSP”), opening up Kubient’s pipeline to every global brand that uses Yahoo to buy media.


Signed a direct partnership with MediaMath, one of the largest independent DSPs in the world. This new partnership provides access to some of the largest global brands and their digital advertising budgets.

Management Commentary
“This past year was a strong leap in the right direction, as we exceeded revenue targets, and made significant operational progress by growing our workforce, ramping up the number of publishers and advertisers plugged into Kubient’s Audience Marketplace, and executing the expansion of Kubient’s Managed Services division through the acqui-hire of MediaCrossing,” said Kubient Founder, Chairman, CEO, CSO, and President, Paul Roberts. “We are certainly proud of our accomplishments thus far, but we understand there is much more work that has to be done to fully reach the potential of Kubient. To further expedite this process, we continue to vet multiple acquisition targets on the M&A front to find companies that can add immediate accretive value, similar to MediaCrossing. With the daily increasing tailwinds helping propel our growth trajectory, I am confident in our organizations’ ability to execute this new year as we continue to move full steam ahead with an industry leading team, IP, technology, and a dual-growth strategy.”

Full Year 2021 Financial Results
Net revenues were approximately $2.7 million for 2021, compared to approximately $2.9 million in 2020.

Technology expenses increased to approximately $3.1 million from approximately $2.1 million in 2020. The increase in technology expenses was primarily due to increases in salary expense from an increase in technology personnel headcount, as well as increased stock-based compensation, consulting expenses, amortization of software and cloud hosting costs.


 
General and administrative expenses increased to approximately $6.1 million from approximately $4.2 million in 2020. The increase in general and administrative expenses was primarily due to a legal settlement and related legal fees incurred in Q4 as well as increases in recruiting fees arising from an increase in headcount, insurance expenses and state franchise taxes.

GAAP net loss attributable to common shareholders was approximately $10.3 million, or $(0.75) loss per share, and increased compared to approximately $9.6 million, or $(1.85) loss per share, in 2020.

As of December 31, 2021, the Company had a cash and cash equivalents balance of approximately $24.9 million.

Conference Call
Kubient will hold a conference call today (March 30, 2022) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results.

Kubient management will host the conference call, followed by a question and answer period.

Date: Wednesday, March 30, 2022
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
U.S. dial-in: 1-877-407-9208
International dial-in: 1-201-493-6784

Please call the conference telephone number 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 949-574-3860.

The conference call will be broadcast live and available for replay here and via the Investor Relations section of Kubient’s website.

A telephonic replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through April 6, 2022.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13726913

About Kubient
Kubient is a technology company with a mission to transform the digital advertising industry to audience-based marketing. Kubient’s next generation cloud-based infrastructure enables efficient marketplace liquidity for buyers and sellers of digital advertising. The Kubient Audience Marketplace is a flexible open marketplace for advertisers and publishers to reach, monetize and connect their audiences. The Company’s platform provides a transparent programmatic environment with proprietary artificial intelligence-powered pre-bid ad fraud prevention, and proprietary real-time bidding (RTB) marketplace automation for the digital out of home industry. The Audience Marketplace is the solution for brands and publishers that demand transparency and the ability to reach audiences across all channels and ad formats. For additional information, please visit https://kubient.com.


 
Forward-Looking Statements
The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

Non-GAAP Measures
The Company defines EBITDA as net income (loss) before interest (including non-cash interest), taxes and depreciation and amortization. The Company defines Adjusted EBITDA as EBITDA, further adjusted to eliminate the impact of certain non-recurring items and other items that we do not consider in our evaluation of our ongoing operating performance from period to period. These items will include stock-based compensation that the Company does not believe reflects the underlying business performance.

EBITDA and Adjusted EBITDA are financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management believes that because Adjusted EBITDA excludes (a) certain non-cash expenses (such as depreciation, amortization and stock-based compensation) and (b) expenses that are not reflective of the Company’s core operating results over time (such as stock based compensation expense), this measure provides investors with additional useful information to measure the Company’s financial performance, particularly with respect to changes in performance from period to period. The Company’s management uses EBITDA and Adjusted EBITDA (a) as a measure of operating performance, (b) for planning and forecasting in future periods, and (c) in communications with the Company’s board of directors concerning the Company’s financial performance. The Company’s presentation of EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation and should not be used by investors as a substitute or alternative to net income or any measure of financial performance calculated and presented in accordance with U.S. GAAP. Instead, management believes EBITDA and Adjusted EBITDA should be used to supplement the Company’s financial measures derived in accordance with U.S. GAAP to provide a more complete understanding of the trends affecting the business.


 
Although Adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, Adjusted EBITDA has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for, or more meaningful than, amounts determined in accordance with U.S. GAAP. Some of the limitations to using non-GAAP measures as an analytical tool are (a) they do not reflect the Company’s interest income and expense, or the requirements necessary to service interest or principal payments on the Company’s debt, (b) they do not reflect future requirements for capital expenditures or contractual commitments, and (c) although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and non-GAAP measures do not reflect any cash requirements for such replacements.

Kubient Investor Relations
Gateway Investor Relations
Matt Glover and John Yi
T: 1-949-574-3860
Kubient@gatewayir.com



Kubient, Inc.
Consolidated Statements of Operations
(Unaudited)

   
For the Years Ended
December 31,
 
   
2021
   
2020
 
             
Net Revenues
 
$
2,737,767
   
$
2,900,029
 
                 
Costs and Expenses:
               
Sales and marketing
   
3,032,133
     
1,117,375
 
Technology
   
3,079,752
     
2,088,538
 
General and administrative
   
6,117,601
     
4,160,854
 
Loss on legal settlement
   
880,381
     
-
 
                 
Total Costs and Expenses
   
13,109,867
     
7,366,767
 
                 
Loss From Operations
   
(10,372,100
)
   
(4,466,738
)
                 
Other (Expense) Income:
               
Interest expense
   
(8,383
)
   
(1,135,675
)
Interest expense - related parties
   
-
     
(403,372
)
Interest income
   
88,537
     
25,178
 
Amortization of beneficial conversion feature
   
-
     
(1,984,322
)
Gain on settlement of notes and other payables, net
   
-
     
124,999
 
Gain on forgiveness of accounts payable - supplier
   
-
     
236,248
 
Loss on extinguishment of convertible note payable
   
-
     
(297,272
)
Other income
   
233
     
15,294
 
                 
Total Other Income (Expense)
   
80,387
     
(3,418,922
)
                 
Net Loss
   
(10,291,713
)
   
(7,885,660
)
                 
Deemed dividend related to warrant down round adjustment
   
-
     
(1,682,000
)
                 
Net Loss Attributable to Common Shareholders
 
$
(10,291,713
)
 
$
(9,567,660
)
                 
Net Loss Per Share - Basic and Diluted
 
$
(0.75
)
 
$
(1.85
)
                 
Weighted Average Common Shares Outstanding -
               
Basic and Diluted
   
13,695,700
     
5,185,204
 



Kubient, Inc.
Consolidated Balance Sheets
(Unaudited)

   
December 31,
 
   
2021
   
2020
 
             
Assets
           
             
Current Assets:
           
Cash and cash equivalents
 
$
24,907,963
   
$
24,782,128
 
Accounts receivable, net
   
2,291,533
     
1,373,754
 
Other receivables
   
526,070
     
-
 
Prepaid expenses and other current assets
   
495,178
     
107,651
 
Total Current Assets
   
28,220,744
     
26,263,533
 
Intangible assets, net
   
2,946,610
     
1,071,850
 
Goodwill
   
463,000
     
-
 
Property and equipment, net
   
44,756
     
17,166
 
Deferred offering costs
   
10,000
     
10,000
 
Total Assets
 
$
31,685,110
   
$
27,362,549
 
                 
Liabilities and Stockholders' Equity
               
                 
Current Liabilities:
               
Accounts payable - suppliers
 
$
1,844,544
   
$
336,028
 
Accounts payable - trade
   
659,362
     
1,106,604
 
Accrued expenses and other current liabilities
   
2,493,287
     
1,017,282
 
Deferred revenue
   
395,914
     
15,000
 
Notes payable
   
151,336
     
218,461
 
                 
Total Current Liabilities
   
5,544,443
     
2,693,375
 
Contingent consideration
   
613,000
     
-
 
Notes payable, non-current portion
   
77,407
     
187,629
 
Total Liabilities
   
6,234,850
     
2,881,004
 
                 
Commitments and contingencies (Note 9)
               
                 
Stockholders' Equity:
               
Preferred stock, $0.00001 par value; 5,000,000 shares authorized;
               
No shares issued and outstanding
               
as of December 31, 2021 and 2020
   
-
     
-
 
Common stock, $0.00001 par value; 95,000,000 shares authorized;
               
14,253,948 and 11,756,109 shares issued and outstanding
               
as of December 31, 2021 and 2020, respectively
   
143
     
118
 
Additional paid-in capital
   
52,030,907
     
40,770,504
 
Accumulated deficit
   
(26,580,790
)
   
(16,289,077
)
Total Stockholders' Equity
   
25,450,260
     
24,481,545
 
                 
Total Liabilities and Stockholders' Equity
 
$
31,685,110
   
$
27,362,549
 



Kubient, Inc.
Consolidated Statements of Cash Flows
(Unaudited)

   
For the Years Ended
 
   
December 31,
 
   
2021
   
2020
 
             
Cash Flows From Operating Activities:
           
Net loss
 
$
(10,291,713
)
 
$
(7,885,660
)
Adjustments to reconcile net loss to net cash used in operating activities:
               
Depreciation and amortization
   
452,136
     
315,202
 
Bad debt expense
   
22,698
     
7,593
 
Gain on forgiveness of accounts payable - supplier
   
-
     
(236,248
)
Stock-based compensation:
               
Common stock
   
700,652
     
448,646
 
Options
   
23,390
     
19,570
 
Amortization of debt discount and debt issuance costs
   
-
     
915,994
 
Amortization of debt discount and debt issuance costs - related parties
   
-
     
357,201
 
Amortization of beneficial conversion feature
   
-
     
1,984,322
 
Loss on extinguishment of convertible note payable
   
-
     
297,272
 
Loss on settlement of other payables
   
-
     
23,601
 
Gain on settlement of notes and other payables
   
-
     
(148,600
)
Changes in operating assets and liabilities:
               
Accounts receivable
   
(940,477
)
   
(1,342,643
)
Other receivable
   
3,955
     
-
 
Prepaid expenses and other current assets
   
73,491
     
(79,579
)
Accounts payable - suppliers
   
1,508,516
     
(191,125
)
Accounts payable - trade
   
(447,242
)
   
211,922
 
Accrued expenses and other current liabilities
   
1,467,306
     
497,416
 
Deferred revenue
   
(247,504
)
   
-
 
                 
Net Cash Used In Operating Activities
   
(7,674,792
)
   
(4,805,116
)
                 
Cash Flows From Investing Activities:
               
Purchase of intangible assets
   
(1,133,072
)
   
(1,300,336
)
Purchase consideration of MediaCrossing
   
(500,000
)
   
-
 
Purchase of property and equipment
   
(39,414
)
   
(16,000
)
                 
Net Cash Used In Investing Activities
   
(1,672,486
)
   
(1,316,336
)
                 
Cash Flows From Financing Activities:
               
Proceeds from exercise of warrants [1]
   
9,787,149
     
-
 
Repayment of PPP loan
   
(177,347
)
   
-
 
Repayment of financed director and officer insurance premiums
   
(145,050
)
   
-
 
Proceeds from exercise of options
   
8,361
     
-
 
Proceeds from sale of common stock and warrants in initial
               
public offering, net [2]
   
-
     
11,503,488
 
Payment of initial public offering issuance costs
   
-
     
(841,376
)
Proceeds from sale of common stock and warrants in follow-on
               
public offering, net [3]
   
-
     
19,354,493
 
Payment of follow-on public offering issuance costs
   
-
     
(125,000
)
Proceeds from exercise of warrant
   
-
     
11,000
 
Repayment of advance from related party
   
-
     
(29,000
)
Proceeds from issuance of notes payable
   
-
     
406,190
 
Repayment of notes payable
   
-
     
(95,000
)
Proceeds from issuance of notes payable - related parties
   
-
     
835,000
 
Repayment of note payable - related party
   
-
     
(150,000
)
                 
Net Cash Provided By Financing Activities
   
9,473,113
     
30,869,795
 
                 
Net Increase In Cash and Cash Equivalents
   
125,835
     
24,748,343
 
                 
Cash and Cash Equivalents - Beginning of the Year
   
24,782,128
     
33,785
 
                 
Cash and Cash Equivalents - End of the Year
 
$
24,907,963
   
$
24,782,128
 
                 

[1] Includes gross proceeds of $10,169,027, less issuance costs of $381,878.
[2] Includes gross proceeds of $12,503,750, less underwriting discounts and commissions of $1,000,262.
[3] Includes gross proceeds of $20,699,992, less underwriting discounts and commissions of $1,470,499.

The accompanying notes are an integral part of these consolidated financial statements.


Kubient, Inc.
Reconciliation of GAAP EBITDA to Non- GAAP Adjusted EBITDA
(Unaudited)

   
For the Years Ended
December 31,
 
   
2021
   
2020
 
Net Loss Attributable to Common Shareholders
 
$
(10,291,713
)
 
$
(9,567,660
)
Interest expense
   
8,383
     
1,135,675
 
Interest expense - related parties
   
-
     
403,372
 
Interest income
   
(88,537
)
   
(25,178
)
Depreciation and amortization
   
452,136
     
315,202
 
Amortization of beneficial conversion feature
   
-
     
1,984,322
 
EBITDA
   
(9,919,731
)
   
(5,754,267
)
                 
Adjustments:
               
Deemed dividend related to warrant down round adjustment
   
-
     
1,682,000
 
Stock-based compensation expense
   
724,042
     
468,216
 
Adjusted EBITDA
 
$
(9,195,689
)
 
$
(3,604,051
)
                 
Adjusted Loss Per Share
 
$
(0.67
)
 
$
(0.70
)
Weighted Average Common Shares Outstanding -
               
Basic and Diluted
   
13,695,700
     
5,185,204
 





The following information was filed by Kubient, Inc. (KBNT) on Thursday, March 31, 2022 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Kubient, Inc.'s 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (Parenthetical)
Condensed Consolidated Statements Of Cash Flows
Condensed Consolidated Statements Of Cash Flows (Parenthetical)
Condensed Consolidated Statements Of Changes In Stockholders' Equity
Condensed Consolidated Statements Of Changes In Stockholders' Equity (Parenthetical)
Condensed Consolidated Statements Of Operations
Accrued Expenses And Other Current Liabilities
Accrued Expenses And Other Current Liabilities (Details)
Accrued Expenses And Other Current Liabilities (Tables)
Business Organization, Nature Of Operations, Risks And Uncertainties And Basis Of Presentation
Commitments And Contingencies
Commitments And Contingencies - Settlements (Details)
Concentrations
Concentrations (Tables)
Concentrations - Customer Concentrations (Details)
Concentrations - Supplier Concentrations (Details)
Fair Value Measurement
Fair Value Measurement (Details)
Fair Value Measurement (Tables)
Fair Value Measurement - Additional Information (Details)
Significant Accounting Policies
Significant Accounting Policies (Policies)
Significant Accounting Policies (Tables)
Significant Accounting Policies - Net Loss Per Common Share (Details)
Significant Accounting Policies - Performance Obligation (Details)
Significant Accounting Policies - Revenue Recognition (Details)
Stockholders' Equity
Stockholders' Equity (Details)
Stockholders' Equity (Tables)
Stockholders' Equity - Stock-Based Compensation (Details)

Material Contracts, Statements, Certifications & more

Kubient, Inc. provided additional information to their SEC Filing as exhibits

Ticker: KBNT
CIK: 1729750
Form Type: 10-Q Quarterly Report
Accession Number: 0001410578-22-001653
Submitted to the SEC: Mon May 16 2022 4:08:13 PM EST
Accepted by the SEC: Mon May 16 2022
Period: Thursday, March 31, 2022
Industry: Computer Integrated Systems Design

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