NEW YORK, Nov. 10, 2021 /PRNewswire/ -- Tapinator, Inc. (OTC:TAPM) ("Tapinator," the "Company," "we," "our" or "us"), a developer and publisher of category leading games for mobile platforms and, through our Revolution Blockchain LLC subsidiary, a collector and publisher of art NFTs and related mobile applications, today announced unaudited financial results for the three and nine months ended September 30, 2021, and the filing of its quarterly report for the period ended September 30, 2021.

The quarterly report and financial statements have been published on OTC Markets and may be found at http://www.otcmarkets.com/stock/TAPM/disclosure. The results provided below replace, in their entirety, any guidance or projections previously issued by the Company.

For the three months ended September 30, 2021, Tapinator achieved record revenue of approximately $1.5 million, record bookings^* of approximately $1.8 million, record net income of approximately $528,000 and record adjusted EBITDA^* of approximately $461,000. The Company's quarterly revenue, bookings^*, net income and adjusted EBITDA^* represent year-over-year improvements of 32%, 60%, 630% and 65%, respectively. The Company also announced basic and fully diluted net income per share of $0.94 and $0.89 per share, respectively.

For the nine months ended September 30, 2021, Tapinator achieved record revenue of approximately $4.2 million, record bookings^* of approximately $4.5 million, record net income of approximately $1.0 million and record adjusted EBITDA^* of approximately $1.0 million. The Company's quarterly revenue, bookings^*and adjusted EBITDA^* represent year-over-year improvements of 28%, 35% and 52%, respectively. The Company also announced record basic and fully diluted net income per share of $1.76 and $1.70 per share, respectively.

^*A table has been included in this press release with non-GAAP adjustments to the Company's revenue resulting in bookings (a non-GAAP measure) and non-GAAP adjustments to the Company's net loss, resulting in adjusted EBITDA (a non-GAAP measure) for the relevant periods.

Financial Highlights

	Three Months Ended			Nine Months Ended
	September 30			September 30
	2021	2020	*% Ch.*	2021	2020	*% Ch.*
GAAP Results:
Revenue	$1,524,983	$1,156,210	32%	$4,161,325	$3,244,430	28%
Operating Income (Loss)	$343,599	$73,557	367%	$707,699	($99,680)	NM⁽¹⁾
Net Income (Loss)	$528,342	$72,410	630%	$981,788	($131,087)	NM⁽¹⁾
Net Income (Loss) margin %	35%	6%		24%	-4%

Net Income (Loss) Per Share - Basic	$0.94	$0.13	623%	$1.76	($0.24)	NM⁽¹⁾
Net Income (Loss) Per Share - Diluted	$0.89	$0.13	585%	$1.70	($0.24)	NM⁽¹⁾

Weighted avg. common shares outstanding - basic	563,564	551,005		557,669	550,971
Weighted avg. common shares outstanding - diluted	591,617	559,755		576,455	550,971

Non-GAAP Results:
Bookings:
Category Leading Games	$1,147,843	$875,827	31%	$3,518,177	$2,576,913	37%
Rapid-Launch Games	$158,975	$220,964	-28%	$544,101	$755,119	-28%
NFT Publishing	$450,612	$0	N/A	$450,612	$0	N/A
Total Bookings	$1,757,430	$1,096,791	60%	$4,512,891	$3,332,032	35%

Adjusted EBITDA	$461,410	$279,215	65%	$1,035,699	$682,591	52%
Adjusted EBITDA Margin %	30%	24%		25%	21%

⁽¹⁾ Percentage change not meaningful.

Ilya Nikolayev, CEO of Tapinator commented, "We are extremely happy with our record performance in Q3. These results are based on our continuing to execute on our mobile gaming business as well as early traction within our NFT Publishing business.

On the mobile gaming side, our products continue to perform as expected and we continue to release updates for our key games. At the same time, as we indicated previously, we are currently in development on a new social casino product that leverages the extensive foundation, including monetization and live operations systems, that we have built out for Video Poker Classic. We expect to launch this social casino game in Q1 2022.

With respect to our NFT business, we are focused on two directions:

1) NFT500 is our NFT art collection platform and corresponding mobile application, with casting capabilities. The product targets a mass market audience - those individuals interested in NFTs but who are not crypto natives. We believe that this represents a significant opportunity.

To date, we have acquired approximately 300 NFTs from more than 125 prominent NFT artists such as Tyler Hobbs, Bored Ape Yacht Club, XCOPY, Helena Sarin, Pindar Van Arman, Monica Rizzolli, Refik Anadol, Kevin Abosch, Nick Kuder and Damien Hirst.

We are currently focused on continuing to expand our collection, adding features to our application, and growing our userbase. In the future, we plan to introduce collaborations with artists and direct drops combined with in-app NFT ownership. We are also exploring metaverse extensions of our NFT500 museum as we believe that our extensive collection is an ideal fit for metaverse opportunities.

2) Our NFT Publishing business focuses on partnering with artists who have existing bodies of work and helping them enter the NFT space. There is a multitude of talented artists, including digital creatives and photographers, who would be a great fit for NFTs, yet lack the technical and marketing expertise to succeed. The experience that we have acquired as collectors and operators within this area has put us in a position where we are able to assist.

We entered the NFT Publishing business earlier this year and have successfully sold out several collection releases. We believe that we have only scratched the surface here and are currently working on several new artist partnerships."

Andrew Merkatz, President of Tapinator, also commented on the Company's results, "We are especially proud of the following operating accomplishments in the third quarter of 2021:

We achieved record revenue and bookings of approximately $1.5mm and $1.8mm, respectively, representing growth of 32% and 60% year-over-year, respectively. Our revenue growth was driven by our entry into the NFT publishing business during the quarter, while our bookings growth was driven through a combination of NFT publishing and strong year-over-year growth from our category leading mobile games.
Through a combination of strong top-line performance and tight cost management, we delivered net income of approximately $528k in the quarter, representing growth of approximately 630% year-over-year.
Our net income margin was 35% during the quarter, up significantly from 6% in Q3, 2021, and indicative of the strong operating leverage that we have long communicated is inherent in our business.
We reported record basic and fully diluted EPS of $0.94 and $0.89, respectively, up 623% and 585%, respectively from basic and fully diluted earnings per share of $0.13 in Q3 2020.
We reported adjusted EBITDA^* of approximately $461k, representing growth of 65% year-over-year.
Our adjusted EBITDA^* margin was 30% during the quarter, up from 24% in Q3, 2020.
We completed development of the NFT500 mobile app and casting platform which launched globally on October 15th.
Within our NFT500 collection, we acquired 141 NFT artworks from more than 80 prominent artists whose works we believe, in general, are well positioned to yield significant long term capital appreciation. We also sold seven artworks resulting in realized gains of approximately $128,000 during the quarter.
We initiated our NFT Publishing activities and successfully sold out several NFT collection releases during the quarter. We also began actively developing a pipeline of select additional artist partnerships.
We made substantial progress on a new social casino title slated to launch in Q1 of 2022."

Current Outlook

We continue to have strong conviction regarding our mobile games business, and specifically our Category Leading Games. Our investments within our Revolution Blockchain subsidiary are more speculative, but we believe there are substantial long-term opportunities for the Company within the nascent Web 3.0 markets representing the intersection of NFTs, digital art, mobile gaming and the metaverse. Our early conviction regarding this market opportunity, which dates to 2018, is now being proven out; according to market research firm DappRadar, global NFT Sales expanded from $28 million in Q3 2020 to $11 Billion in Q3 2021. While we are not providing specific financial guidance currently, we do expect to deliver revenue for 2021 of at least $5.7 million, representing annual growth of at least 30%, along with adjusted EBITDA margins of at least 25% in 2021.

Non-GAAP Financial Measures*

We have provided in this release the non-GAAP financial measures of Bookings, adjusted EBITDA and Estimated Market Valuation of Digital Assets, as a supplement to the measures of Revenue, Operating Income and Investments in Digital Assets, which are prepared in accordance with United States generally accepted accounting principles ("GAAP"). Management uses Bookings, adjusted EBITDA and Estimated Market Valuation of Digital Assets internally in analyzing our financial results to assess operational performance and liquidity. The presentation of Bookings, adjusted EBITDA and Estimated Market Valuation of Digital Assets is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. We believe that both management and investors benefit from referring to Bookings, adjusted EBITDA and Estimated Market Valuation of Digital Assets in assessing our performance and when planning, forecasting and analyzing future periods. We believe Bookings, adjusted EBITDA and Estimated Market Valuation of Digital Assets are useful to investors because it allows for greater transparency with respect to key financial metrics we use in making operating decisions and because our investors and analysts use them to help assess the health of our business. Below, we have provided reconciliations between our historical Bookings, adjusted EBITDA and Estimated Market Valuation of Digital Assets to the most directly comparable GAAP financial measures below. Some limitations of Bookings, adjusted EBITDA and Estimated Market Valuation of Digital Assets are as follows:

Bookings do not reflect that we defer and recognize online game revenue over the estimated life of durable virtual goods;
Adjusted EBITDA does not include the impact of stock-based expense, impairment of previously capitalized software or intangible assets previously acquired, acquisition-related transaction expenses, one-time financing expenses, contingent consideration fair value adjustments, share settlement expense, and restructuring expense;
Adjusted EBITDA does not reflect income tax expense;
Adjusted EBITDA does not include other income or expense, which includes foreign exchange gains and losses, interest income or expense, and gain on extinguishment of debt;
Adjusted EBITDA excludes depreciation and amortization of intangible assets and impairment of capitalized software. Although depreciation and amortization and impairment of capitalized software are non-cash charges, the assets being depreciated and amortized or impaired may have to be replaced in the future;
Other companies, including companies in our industry, may calculate adjusted EBITDA differently or not at all, which will reduce their usefulness as a comparative measure; and
The value of digital assets and digital currencies has been and will continue to be subject to extreme volatility. As such, our Estimated Market Valuation of Digital Assets may fluctuate significantly from quarter to quarter in accordance with market sentiments and movements in the broader digital assets and digital currency economy which may materially impact our financial results for a given period. As a result, period-to-period comparisons of our Estimated Market Valuation of Digital Assets may not be meaningful, and should not relied upon them as an indication of future performance.

Because of these limitations, you should consider Bookings, adjusted EBITDA and Estimated Market Valuation of Digital Assets along with other financial performance measures, including Revenue, Net Income (Loss), Basic and Diluted Net Income (Loss) Per Share, Cash Flow from Operations, Operating Income (Loss), Investments in Digital Assets and our other financial results presented in accordance with GAAP.

NFT500 Supplemental Information Digital Asset Summary Metrics

	Q1 2021	Q2 2021	Q3 2021	Q1-Q3 2021	10/1/2021- 11/3/2021	Totals as of 11/03/2021*
# of NFTs Collected	13	104	141	258	33	291
Cost of Collected NFTs (USD)	$ 13,247	$ 76,019	$ 393,074	$ 482,340	$ 264,481	$ 746,821
# of NFTs Sold	0	1	7	8	1	9
Proceeds Received From NFTs Sold (USD)	$ -	$ 2,842	$ 140,677	$ 143,519	$ 36,537	$ 180,056
Cost of Collected NFTs, Net of Sales Proceeds	$ 13,247	$ 73,177	$ 252,397	$ 338,821	$ 227,944	$ 566,765

Estimated Market Valuation of Digital Assets as of 11/03/2021*						$ 1,889,174

Reconciliation of GAAP to Non-GAAP Results

	Three Months Ended		Nine Months Ended
	September 30		September 30
	2021	2020	2021	2020
Reconciliation of Revenue to Bookings:
Revenue	$1,524,983	$1,156,210	$4,161,325	$3,244,430
Change in deferred revenue	$232,447	($59,420)	$351,566	$87,602
Bookings	$1,757,430	$1,096,790	$4,512,891	$3,332,032

Reconciliation of Net Income (Loss) to Adjusted EBITDA:
Net income (loss)	$528,342	$72,410	$981,788	($131,087)
Interest expense, net	$303	$1,147	$2,554	$31,407
Income tax benefit	($57,080)	$0	($131,560)	$0
Amortization of capitalized software development	$96,302	$126,048	$264,156	$365,856
Stand-still agreement, non-recurring	$0	$0	$93,555	$0
Depreciation and amortization of other assets	$1,224	$752	$2,989	$2,556
Realized gains on sale of digital assets, net	($127,966)	$0	($129,407)	$0
One-time financing costs	$0	$0	$0	$112,963
Stock-based expense	$20,285	$78,858	$60,855	$300,897
Gain on extinguishment of debt	$0	$0	($109,231)	$0
Adjusted EBITDA	$461,410	$279,215	$1,035,699	$682,591

	November 3, 2021
Reconciliation of Investments in Digital Assets to Estimated Market Valuation of Digital Assets:
Investments in Digital Assets as of September 30, 2021, net	$468,344
Change in Digital Assets from September 30, 2021 thru November 3, 2021, net	$261,642
Estimated Unrealized Change in Market Valuation of NFT Art Collection	$1,159,888
Estimated Market Valuation of Digital Assets	$1,889,874

About Tapinator

Tapinator Inc. (OTC:TAPM) develops and publishes category leading games for mobile platforms. Tapinator's library includes more than 300 titles that, collectively, have achieved over 500 million mobile downloads, including notable properties such as Video Poker Classic and Crypto Trillionaire. Through our NFT500 platform, we have amassed a significant collection of what we believe are "blue-chip" art NFT's, and we have developed and launched a mobile application that extends the utility of these digital asset investments. We generate revenues from our mobile games via consumer transactions, including in-app purchases and subscriptions, and through the sale of branded advertisements. We also generate revenue from publishing and selling NFTs in partnership with select artists. Founded in 2013, we are headquartered in New York, with product development, design and marketing teams located in North America and Europe.

Forward Looking Statements

To the extent that statements contained in this press release are not descriptions of historical facts regarding Tapinator, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "goal," "seek," "plan," "feel," "opinion," "may," "will," "expect," "anticipate," "estimate," "intend," "target," and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements include, among other things, our expectation that we will launch a new social casino game in Q1 2022 that leverages the extensive foundation (including monetization and live operations systems) that we have built out for Video Poker Classic, our targeting a mass market audience (those individuals interested in NFTs but who are not crypto natives) for our NFT500 art collection platform and corresponding mobile application, our belief that such a mass market audience represents a significant opportunity, our plan to introduce collaborations with NFT artists and direct drops combined with in-app NFT ownership, our belief that our extensive NFT500 museum collection is an ideal fit for metaverse opportunities, our belief that we have only scratched the surface of the NFT Publishing business, our belief there are substantial long-term opportunities for us within the nascent Web 3.0 markets representing the intersection of NFTs, digital art, mobile gaming and the metaverse and our expectation we will deliver revenue for 2021 of at least $5.7 million (representing annual growth of at least 30%, along with adjusted EBITDA margins of at least 25% in 2021). Forward-looking statements are subject to risks and uncertainties that could cause our future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Except as required by law, Tapinator undertakes no obligation to update or revise any forward-looking statements. The quoting and trading of the Company's common stock on the OTC Marketplace is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with the Company's operations or business prospects. As a result, there may be volatility in the market price of the shares of the Company's common stock for reasons unrelated to operating performance. Moreover, the OTC Marketplace is not a stock exchange, and trading of securities on it is often more sporadic than trading of securities listed on a national securities exchange. Accordingly, stockholders may have difficulty reselling any of their shares. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the Company, please see the Company's Supplemental Information Report as filed with the OTC Markets on October 20, 2021 and as updated from time to time.

CONTACT:

Tapinator Investor Relations

investor.relations@tapinator.com

914.930.6232

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SOURCE Tapinator, Inc.

(*) Valuation includes all assets collected through the valuation date.

Valuation for assets held in MetaMask wallet (212 assets) provided by WGMI.io and based on publicly listed floor prices as of valuation date.

Valuation for works held in Nifty Gateway wallet (34 assets) based on most recent sale price as of valuation date.

Valuation excludes works held on Tezos blockchain (90 assets), Palm Blockchain (2 assets), Flow Blockchain (3 assets), and Bitmark Blockchain (1 asset).

Total number of assets valued may not match # of works collected due to methodology differences between internal and 3rd party asset classification.

Tapinator Announces Record Q3 2021 Financial Results