Carson City, NV & Hong Kong, Aug. 21, 2018 (GLOBE NEWSWIRE) -- 12 ReTech Corporation (OTCQB: RETC), announced further efforts in the implementation of market, customer, technology and related strategies to generate sales and profits long term, while releasing its Second Quarter financial results.
Management believes that in the end analysis, Q2:FY2018 should be considered as a pre-season practice period (perhaps akin to the National Football League preseason schedule) as the Company prepares itself for a successful entry into the markets that the business plan is designed for. In the future, substantial revenue increases may occur when we are able to deliver the 12 Technology Suite products that have been in development to update them for the multiple languages required for the U.S. and European markets. We are also working to increase the operations of our consumer products platform and expect to see better results over the second half of the year from those operations. Our progress on closing several acquisition transactions has been slow, but we are still convinced of the viability of our acquisition strategy in both consumer products and technology.
Management believes that the Company’s activities in Q2:FY2018 were designed to prepare us for our future growth in both our technology business and our consumer products business. We plan to continue to invest in Research and Development and Brand Marketing for both technology and consumer products.
Angelo Ponzetta, 12 ReTech's CEO commented, "Our Company is making progress on the execution of our business plan in a number of areas. We plan to invest in technology demonstration showrooms in all of our market geographies. Having the ability to demonstrate our technology to luxury goods brands and retailers throughout the globe is important because the mantra of our potential merchant clients is “seeing is believing”. We are convinced that we have technology that can deliver shoppers back to our clients and can lower their operating costs. Our ability to effectively demonstrate this value proposition is the key to getting merchants to implement our 12 Technology Suite. We have already announced the first demonstration showroom which will be based in Zurich, Switzerland. Our demonstration showrooms and partners are being carefully chosen based on each partner’s abilities to bring retail management and consumer brands into their facilities. We hope to soon be able to announce additional developments about future showrooms and partnerships within the USA and Asia.”
CEO Ponzetta, continued, “On the consumer products side of our business, we are investing in a women’s apparel business platform which will feature multiple effective sales channels with a world-class supply chain utilizing our own 12 Online tools. Emotion Fashion is getting a good start, but they will only be part of the consumer products platform that we are building.”
CEO Ponzetta, continued, “We continue to add valuable partners whose technology complements our own 12 Technology Suite. I am pleased with the progress that we are making on all of our various business activities. I believe that each separate business activity will provide us with a foundation to produce revenues and earnings for our shareholders in the future, and we believe that each segment will complement the other for the benefit of our shareholders.”
For the second quarter (“Q2:FY2018”) ended June 30, 2018, the Company posted revenues of $16,682 an increase of $7,740 over the first quarter of the year and a GAAP Net Loss of $1,714,346 compared to $870,230 for the first quarter of 2018.
While our published SEC Form 10-Q will provide a comparison for Q2:FY2018 against the prior year’s comparable period, Management believes that a better analysis can be had compared against the prior sequential period (“Q1:FY2018”) as the Company incurred public entity expenses in both periods.
Excluding the non-cash finance expenses of Amortization of Debt Discount and Beneficial Conversion Feature (“BCF”) which emanate from our convertible debt and convertible preferred shares which represents a change in accounting treatment, the Company experienced an Adjusted Net Loss of $924,463 for the just reported period versus an Adjusted Net Loss of $747,111 in the first quarter of the year. This represents a $177,352 increase in Adjusted Net Loss, when compared period over period.
The larger Adjusted Net Loss of $924,463 in the second quarter is mainly due to the $448,754 worth of stock compensation expenses and to a lesser extent to the $38,647 of operating expenses incurred by the newly acquired Emotion Fashion Brands. Excluding these two expenses, the second quarter Cash Adjusted Net Loss was $437,062 which represents a decrease of $310,049 or a 41% improvement over the first quarter. Therefore, Q2:FY2018 was a much-improved quarter as measured by cash flow compared to the first quarter of the year.
In Q2:FY2018, the Company saw an increase in revenues over the prior sequential period due to the successful start of operations at Emotion Fashion Brands, our consumer products operation. The total Q2:FY2018 revenues of $16,682 include a $7,255 revenue contribution from Emotion and $9,390 from the 12 Japan’s (Itoya) operations. The revenue increase of $7,740 quarter over quarter represents an 86% improvement. The 12 Japan contribution of $9,390 in Q2:FY2018 was $448 or 5% larger than the $8,942 12 Japan contribution of the first quarter of the year.
CEO Ponzetta finished, “We have some nice developments in our pipeline. We are close to finalizing agreements with technology partners who will enhance our offerings and value proposition to the retailer merchant. More to come on this front later.”
The figures referenced above are not audited, readers are advised to consider these figures along with footnotes and any other accompanying information that is contained in the Company’s Form 10-Q as well as all of the filings that the Company has previously filed with the U.S. Securities and Exchange Commission.
About 12 ReTech Corporation:
At our core, we are a software company whose technology allows retailers to combat the dual threats of Walmart and Amazon — both online and in physical stores. Our microbrand rollup acquisition strategy allows us to demonstrate the effectiveness of our software, devise and test new products, while providing shareholder value through immediate revenue and earnings growth. The Company operates through our subsidiaries on three continents: 12 Hong Kong, Ltd., 12 Japan, Ltd., 12 Europe A.G., 12 Retail Corporation (and its subsidiaries in North America, including Emotion Fashion Group, Inc.). For more information please visit our website at www.12ReTech.com.
12 ReTech Corporation is publicly listed on the OTCQB Markets under the symbol RETC.
Safe Harbor: This document contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the ability of the Company to successfully implement its turnaround strategy, changes in costs of raw materials, labor, and employee benefits, as well as general market conditions, competition and pricing. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this letter will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as representation by the Company or any other person that the objectives and plans of the Company will be achieved. In assessing forward-looking statements included herein, readers are urged to carefully read those statements. When used in the Annual Report on Form 10-K, the words "estimate," "anticipate," "expect," "believe," and similar expressions are intended to be forward-looking statements.