SoMedia Networks Files Financial Results for Q1 2015 and Announces Non-Brokered Financing

SoMedia Networks (TSX-V:VID), the pioneer of globally scalable video production solutions, today announced it has filed financial results for the three month period ended March 31, 2015.

The Company posted quarterly sales of $384,503, a record for the Company with sales 15% higher than the previous best month. These results compare to sales of $173,764 up 121% over the previous over the year ago quarter and 37% over the previous quarter. Sales backlog also increased to a record $1,235,713 up 25% over the previous quarter while revenue grew by more than 37% over the prior year revenue achieving a record of $124,816 up 47% over Q4 of 2014.

Highlights:

• Record sales posted in Q1 2015 with an increase of 121% over the previous year totaling $384,503
• Revenue exceeds historical records up 46% over Q4 2014 and 37% year ago quarter
• Sales backlog exceeds $1.2 million up 25% over the previous quarter
• Growth in initial sales grew by 96% over the year ago quarter reaching $112,843
• Average order value grew to $5,013 an increase of 73% over the year ago quarter, building on the year-over-year growth of 351% achieved in the prior quarter.
• Re-developed and launched an integrated news and branded content platform
• Completed integrations with more than 20 major SaaS marketing platforms including Marketo (NASDAQ:MKTO), Oracle-Eloqua (NASDAQ:ORCL), Salesforce-ExactTarget (NASDAQ:CRM)
• Appointed Derek Sather as Consulting Chief Revenue Officer

Definitions

Sales: The dollar value of videos sold during the period. A video is considered sold when a client makes an order and provides a deposit. Revenue is not recognized until the video is completed and approved by the client.

Average Order Value - Repeat Sales: The total of all orders received from repeat clients in the quarter, divided by the number of unique orders made by these clients.

Average Order Value - New Sales: The total orders received from new clients in the quarter, divided by the number of unique orders made by these clients.

Backlog – the value of videos sold to date but still to be completed.

Note: the foregoing is a summary of certain financial information relating to the Company and should be read in conjunction with the Company’s audited annual Financial Statements for the financial years ended December 31, 2014, 2013 and 2012 including the notes thereto.

Management Changes

The Company also announces that Ben Pickering has resigned as President, co-CEO and a director effective immediately. Mr. George Fleming, the Company’s founder will take over the role of President and CEO of the Company. As well Colin Osing has resigned as Vice President of Marketing effective immediately.

In addition, Mr. Derek Sather has joined the Company as consulting Chief Revenue Officer and will assist the Company in the development of content marketing and demand generation programs plus the implementation of advanced CRM and sales management systems and processes. Mr. Sather has over 15 years of senior sales leadership experience. Most recently he was the Chief Revenue Officer at Mobify, an enterprise SaaS platform that provides Internet Retailers with mobile shopping solutions. While at Mobify he provided global leadership of the sales and marketing teams and architected an advanced content marketing, demand generation and sales automation program. Prior to that he was Chief Revenue Officer at Recombo, a SaaS platform that provides rapid customer on boarding.

Financing

In addition, the Company is pleased to announce a non-brokered private placement of 1,577,000 special warrants (the “Special Warrants”) at a price of C$0.26 per Special Warrant, representing aggregate gross proceeds of $410,000 (the “Offering”). Each Special Warrant entitles the holder thereof to acquire at any time after the closing date of the Offering (the “Closing Date”), for no additional consideration, one unit of the Company (a “Unit”), with each Unit comprised of one common share of SoMedia (a “Common Share”) and one-half of one common share purchase warrant of SoMedia (each whole common share purchase warrant, a “Warrant”). Each Warrant will entitle the holder thereof to purchase one Common Share at an exercise price of C$0.35 per Common Share for a period of 24 months following the Closing Date. The Offering is fully subscribed and will close upon receipt of TSX Venture Exchange approval.

All unexercised Special Warrants will be deemed to be exercised, without payment of additional consideration or further action, on the earlier of: (i) the third business day following the day upon which SoMedia obtains a receipt for a final prospectus (the “Final Prospectus”) qualifying the underlying Common Shares, the underlying Warrants, and the common shares of the Company underlying the Warrants (collectively the “Underlying Securities”) from the securities regulatory authority in each jurisdiction where the Final Prospectus is filed; and (ii) the date that is four months and one day following the Closing Date. It is intended that the Final Prospectus will be filed in Ontario, Alberta, British Columbia (the “Qualifying Jurisdiction”) and such other jurisdictions as SoMedia may decide.

The Company may pay finder's fees in connection with the Offering, subject to compliance with the policies of the regulatory authorities. SoMedia plans to use the net proceeds from the Offering for working capital and general corporate purposes.

From the date of issue, subject to obtaining a receipt for the Final Prospectus in the Qualifying Jurisdictions, the Underlying Securities will be subject to a four-month and one day hold period as required by Canadian securities laws.

About SoMedia Networks

SoMedia Networks, the creator of Scalable Video, has reengineered how businesses access video content creation, production and deployment. The cloud-based SoMedia Platform allows businesses, brands and media to easily order the production of custom video content at scale and volume, anywhere, on demand, with rapid turnaround, and at a fraction of current costs.

SoMedia provides Scalable Video as an integrated solution to corporate partners, as a resale solution through thousands of web marketing firms and directly to digital agencies and millions of SMBs across North America. To learn more, visit: www.somedia.net.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release does not constitute an offer to sell or a solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Certain information contained in this document may include "forward-looking information". Without limiting the foregoing, the information and any forward-looking information may include statements regarding the closing of the Offering, the filing of a preliminary and final prospectus and the use of proceeds of the Offering. In this document, words such as "may", "would", "could", "will", "likely", "believe", "expect", "anticipate", "intend", "plan", "estimate" and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. Forward-looking statements and information are based on information available at the time and/or the Company management's good-faith beliefs with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company's control. For additional information with respect to these and other factors and assumptions underlying the forward-looking statements made in this press release, see the section entitled "Risks and Uncertainties" in the Management's Discussion and Analysis of the Company for its most recent interim financial statements filed with the Canadian securities commissions. The forward-looking information set forth herein reflects the Company’s expectations as at the date of this press release and is subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, other than as required by law.

The measures described in the Key Performance Indicators table above are not intended to be measures that should be regarded as an alternative to other financial operating performance measures prepared in accordance with IFRS. Those measures do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. They are provided to assist investors in determining the Company’s ability to generate profitability from its operations and to evaluate its financial performance. For further descriptions of these terms, please refer to either the Company’s Management’s Discussion and Analysis for the period or to the ‘Definition of Key Performance Indicators’ section at the conclusion of this document.

The Company does not intend, nor does it undertake, any obligation to update or revise any forward-looking information or statements contained in this document to reflect subsequent information, events or circumstances or otherwise, except as required by applicable laws.

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