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Rightscorp Reports First Quarter 2014 Financial Results

Companies mentioned in this article: Rightscorp, Inc.

SANTA MONICA, Calif., May 13, 2014 /PRNewswire/ -- Rightscorp (OTCQB: RIHT), the leading provider of monetization services for artists and holders of copyrighted Intellectual Property (IP), today announced financial results for the first quarter of 2014 ended March 31, 2014.

Financial Highlights:

    --  284% increase in revenues to $188,933 for the first quarter ended March
        14, 2014, from $49,256 for the same period in 2013 due to growth in
        copyrights, ingestion rates, and increase in settlements from cases
        closed;
    --  21.6% sequential increase in revenues from $155,381 in the fourth
        quarter of 2013;
    --  Cash on hand increased 633% to $264,667 at March 31, 2014 from $36,331
        at December 31, 2013;
    --  $783,488 of equity capital received during the three months ended March
        31, 2014, which led to a boost in ingestion rates of active copyrights
        into the Company's monetization system by 400%; and
    --  As of March 31, 2014, the Company is still set to receive a balance of
        $750,000 under the $2.0 million financing commitment obtained through
        its going public transaction.

Operational Highlights:

    --  Authorized copyright catalog increased to over 1.5 million, including
        many award-winning films, best-selling authors and over 13 tracks on the
        Billboard Hot 100;
    --  Participation from Internet Service Providers (ISP) increased-
        Rightscorp recently announced it has received payments from over 70
        ISPs, a 40% increase from year end 2013;
    --  Company reports a boost in ingestion rates by 400% as a result of equity
        investment which directly impacts the Company's growth potential;
    --  Reports more than 60,000 cases of copyright infringement closed as of
        March 31, 2014; and
    --  Expands its footprint globally into Canada with the engagement of
        Canadian Law Firm and files patents to operate in Europe, China, Israel,
        Japan, Brazil, and India.

Rightscorp CEO Christopher Sabec commented, "Our first quarter results represent a solid growth trend for Rightscorp. We continue to gather momentum on many fronts including the growth of our copyrights under representation, the ingestion of our authorized copyright catalog, and expansion in the number of ISPs that help monetize our business through settlements. We continue to make material upgrades to our technology and processes, which accelerate our ingestion rate and increase the base of participating ISPs."

Mr. Sabec continued, "As we look out over the next year, we expect to maintain our strong sequential quarterly growth. We now have more than 1.5 million authorized copyrights in our catalog. Each day we are ingesting content at an accelerating rate. At last count, we had run roughly 80,000 copyrights through our ingestion process; this leaves room for significant growth through the ingestion of this already approved copyright catalog. Existing clients, who have tested our service with a limited number of copyrights, are following-up by authorizing us to monetize much larger portfolios. We are currently in discussions with entities that own millions of additional copyrights, spanning various industries, including film, music, print, video games and software, in the U.S. and abroad."

First Quarter 2014 Financial Summary

For the first quarter of 2014 ended March 31, 2014, the Company generated total revenues of $188,933, up 284% from $49,256 in the same period in 2013. Sequentially, revenues rose 22% from $155,381 in the fourth quarter of 2013. The growth in revenues were driven by an increase in the number of copyrights under contract, an increase in active copyrights uploaded into Rightscorp's automated system and by the growing number of ISPs participating in the Company's service creating a multiplier effect.

For the first quarter of 2014, operating expenses totaled $829,389, compared to $318,954 for prior-year quarter. The increase in fees was due to increased fees paid to copyright holders in the period. General and administrative expenses were $692,015 for the quarter ended March 31, 2014 compared to $272,282 for the year-ago quarter, due to increased wages, professional and investment banking fees, and travel and other expenses related to securing financing.

Sales and marketing costs increased to $31,308 for the first quarter of 2014, from $14,635 for the first quarter of 2013, due to an increased presence at industry conferences to meet potential clients. Depreciation and amortization expenses were $11,599 during quarter ended March 31, 2014, an increase of $4,190 compared to $7,409 in the year-ago quarter.

At March 31, 2014, the Company had cash and cash equivalents totaling $264,667, up from $36,331 at December 31, 2013.

Conference call information:

Date: Tuesday, May 13, 2014
Time: 4:15 P.M. Eastern Time (ET)
Dial in Number for U.S. & Canadian Callers: 877-407-9129
Dial in Number for International Callers (Outside of the U.S. & Canada): 201-493-6753

Participating on the call will be Rightscorp Chief Executive Officer Christopher Sabec and Chief Operating Officer Robert Steele, who will discuss operational and financial highlights for the first quarter of 2014.

To join the live conference call, please dial into the above referenced telephone numbers five to ten minutes prior to the scheduled conference call time. A live webcast and archive of the call will also be available on Rightscorp's website at: http://rightscorp.equisolvewebcast.com/q1-2014.

A replay will be available for 14 days starting on May 13, 2014 at approximately 8:00 P.M. (ET). To access the replay, please dial 1-877-660-6853 in the U.S. and 1-201-612-7415 for international callers. The conference ID# is 418309.

About Rightscorp, Inc.
Rightscorp (OTCQB: RIHT) is a leading provider of monetization services for artists and holders of copyrighted Intellectual Property (IP). The Company's patent pending digital loss prevention technology focuses on the infringement of digital content such as music, movies, software, and games and ensures that owners and creators are rightfully paid for their IP. Rightscorp implements existing laws to solve copyright infringements by collecting payments from illegal file sharing activities via notifications sent through Internet Service Providers (ISPs). The Company's technology identifies copyright infringers, who are offered a reasonable settlement option when compared to the legal liability defined in the Digital Millennium Copyrights Act (DMCA). Based on the fact that 22% of all Internet traffic is used to distribute copyrighted content without permission or compensation to the creators, Rightscorp is pursuing an estimated $2.3 billion opportunity and has monetized major media titles through relationships with industry leaders. http://www.rightscorp.com/

Safe Harbor Statement
This press release may include forward-looking statements. All statements other than statements of historical fact included in this press release, including, without limitation, statements regarding the Company's anticipated financial position, business strategy and plans and objectives of management of the Company for future operations, are forward-looking statements. When used in this press release, words such as "anticipate," "believe," "estimate," "expect," "intend," and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors not limited to, general economic and business conditions, competitive factors, changes in business strategy or development plans, the ability to attract and retain qualified personnel, and changes in legal and regulatory requirements. Such forward-looking statements reflect the current views of the Company with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this paragraph.

For further investor and media information contact:
Andrew Haag
Managing Partner
IRTH Communications
rightscorp@irthcommunications.com
1-866-976-4784

[Financial Tables to Follow]


                                       Rightscorp, Inc.

                            Consolidated Statements of Operations

                                         (Unaudited)


                                     Three Months Ended           Three Months Ended

                                         March 31,                    March 31,

                                                      2014                         2013

    Revenue                                       $188,933                      $49,256
                                                  --------                      -------


    Operating expenses:

    Copyright
     holder fees                                    94,467                       24,628

    General and
     administrative                                692,015                      272,282

    Sales and
     marketing                                      31,308                       14,635

    Depreciation
     and
     amortization                                   11,599                        7,409

    Total
     operating
     expenses                                      829,389                      318,954
                                                   -------                      -------


    Loss from
     operations                                   (640,456)                    (269,698)
                                                  --------                     --------


    Other income (expenses):

    Interest
     expense                                       (10,586)                     (52,349)

    Total non-
     operating
     expenses                                      (10,586)                     (52,349)
                                                   -------                      -------


    Loss from
     operations
     before
     income
     taxes                                        (651,042)                    (322,047)


    Provision
     for income
     taxes                                               -                            -


    Net loss                                     $(651,042)                   $(322,047)
                                                 =========                    =========


    Net loss per
     share -
     basic and
     diluted                                        $(0.01)                      $(0.01)
                                                    ------                       ------


    Weighted
     average
     common
     shares -
     basic and
     diluted                                    69,071,926                   28,014,392
    ----------                                  ==========                   ==========


                                        Rightscorp, Inc.

                                   Consolidated Balance Sheets

                                           (Unaudited)


                                              March 31,         December 31,

                 Assets                                   2014                2013
                 ------

     Assets

    Cash                                              $264,667             $36,331

    Prepaid expenses                                    41,947              19,639

    Other current asset                                      -                   -


    Total Current Assets                               306,614              55,970

    Other Assets

    Fixed assets, net                                   65,425              56,453

    Intangible assets, net                              29,575              33,800

    Total Assets                                      $401,614            $146,223
                                                      ========            ========


              Liabilities and Stockholders' Deficit
                --------------------------------

    Current Liabilities:

    Accounts payable and
     accrued liabilities                              $974,545            $928,304

    Convertible notes
     payable, net of
     discount of $5,504
     and $10,891                                       204,496             202,609

    Total Current
     Liabilities                                     1,179,041           1,130,913

    Total Liabilities                                1,179,041           1,130,913
                                                     ---------           ---------


    Stockholders' Deficit:

    Preferred stock, $.001
     par value; 10,000,000
     shares authorized;
     null shares issued
     and outstanding                                         -                   -

    Common stock, $.001
     par value;
     250,000,000 shares
     authorized;
     69,804,729 and
     68,797,102 shares
     issued and
     outstanding,
     respectively                                       69,805              68,797

    Common stock to be
     issued                                            851,000             380,000

    Additional paid in
     capital                                         3,193,482           2,807,185

    Accumulated deficit                             (4,891,714)         (4,240,672)

    Total stockholders'
     deficit                                          (777,427)           (984,690)
                                                      --------            --------

    Total Liabilities and
     Stockholders' Deficit                            $401,614            $146,223
    ----------------------                            ========            ========

SOURCE Rightscorp, Inc.