Tapinator Inc (TAPM)

[misanthrope]

Tapinator, Inc. (OTC: TAPM), an emerging growth company within the mobile gaming industry, today announced financial results and the filing of its quarterly report for the three months ended June 30, 2016. The quarterly report and unaudited financial statements may be found at http://www.otcmarkets.com/stock/TAPM/filings.

"Tapinator continued to show rapid business expansion in the second quarter of 2016," stated Tapinator CEO, Ilya Nikolayev. Driven by more than 18 million average monthly active users, our second quarter revenues grew 73% year-over-year to approximately $1,062,000, representing our eighth consecutive quarter of at least double-digit year-over-year revenue growth. Our revenue expansion in the quarter can be primarily attributed to the continued broadening of our Rapid-Launch Games portfolio, as well as to the highly successful launch of our Video Poker Classic title within our Full-Featured Games division. In addition to our strong revenue growth, Tapinator is also pleased to announce adjusted EBITDA (a non-GAAP earnings measure) of approximately $242,000 in the second quarter of 2016, an increase of 62% year-over-year, and our ninth consecutive quarter of positive adjusted EBITDA.

We are very pleased with our second quarter results as we saw significant year-over-year player and revenue growth rates combined with increased diversification of our revenue base. Player engagement accelerated toward the end of quarter and thus we believe the Company is well positioned to continue to deliver strong revenue and EBITDA growth during the second half of this year."

Financial Highlights
-- Quarterly revenues of $1,062,474; up 73% year-over-year

-- Six-month year-to-date revenues of $1,911,086; up 86% year-over-year

-- Quarterly adjusted EBITDA* (a non-GAAP measure) of $242,111; up 62%
year-over-year

-- Six-month year-to date adjusted EBITDA* (a non-GAAP measure) of $462,620;
up 55% year-over-year

-- $834,736 in cash and cash equivalents as of June 30, 2016

* A table has been included later in this press release with non-GAAP adjustments to the Company's net loss, resulting in positive adjusted EBITDA for the relevant periods.

Product Highlights

The Company ended Q2 with 244 active games, of which 31 were released in the quarter. As of June 30, 2016, Tapinator had 66 titles in its portfolio that had each achieved at least one million downloads, up from 51 games that had reached this milestone at the end of Q1 2016. Within our Rapid-Launch Games business, Crocodile Attack 2016, Multi-Storey Car Parking 3D, and Extreme Car Stunts 3D performed especially well, with over 9.5 million downloads and 180,000 daily active unique (DAU) players in Q2. These three titles illustrate the diversity of the Company's portfolio as they encompass three genres: Parking, Stunts, and Animal Simulation.

The Company continues to invest significant resources into its Full-Featured Games business. Specifically, we are selectively developing and/or publishing a small number of full-featured games each year that we believe have 'evergreen' characteristics and/or major 'hit' potential. Specific highlights from these efforts include the following:

In early Q2, the Company released its second video poker game, Video Poker Classic. In just four months since Video Poker Classic's launch, the title has quickly risen to become the #1 Video Poker game on iPad and a top 5 Video Poker game on iPhone, Google Play and Amazon Kindle. According to AppAnnie, the game is a Top 200 grossing Casino property on both iOS and Google Play and we expect the game, which has 'evergreen' characteristics, to contribute meaningfully to the Company's revenues for 2016.

In late Q2, the Company launched Combo Quest 2, the freemium sequel to our original paid game, Combo Quest. The sequel, which was featured as a 'Best New Game' on iOS and has generated in excess of 500,000 installs to date, was well received by players who have given the game a 4.5 (out of 5.0) average review score. Unfortunately, the monetization of the game did not meet internal expectations and we are working on additional improvements to the game prior to its upcoming Google Play launch.

In Q3, we will be launching Big Sport Fishing 2017 in partnership with RocketMind. Given the recent success of the Pokémon Go mobile game from Nintendo and Niantic, we are enthused by the market's embrace of augmented reality. In Big Sport Fishing 2017, we believe players will enjoy using their phone as a virtual fishing rod to tackle gorgeous global fishing environments around the world, 24/7, and from their own home or office.

Finally, during Q4, the Company will be releasing its ROCKY ([) (TM) (]) game. The title, built in partnership with MGM, is based on the legendary movie franchise. The game will feature multiplayer functionality, collectible fighter cards, and time-tap mechanics. The Company believes that these systems will equip the ROCKY ([) (TM) (]) game with best-in-class in-app purchase monetization and player engagement.

Player & Game Metrics
-- Average DAUs - 1.1 million; up 127% year-over-year
-- Average MAUs - 18.3 million; up 136% year-over-year

-- Average New Daily Downloads - 629,000; up 78% year-over-year
-- Cumulative Downloads - 267 million as of June 30, 2016; up 175%
year-over-year, and up 27% sequentially
-- Game Library - 244 active titles as of June 30, 2016; up from 128
year-over-year, and up from 214 sequentially
-- Game Diversification - No single game accounted for more than 8% of total
revenues during the six-month period ended June 30, 2016