Forward-Looking Statements
Certain statements in this Annual Report on Form 10-K constitute “forward-looking statements” made under the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 that are based on current expectations, estimates, forecasts and assumptions and are subject to risks and uncertainties. Words such as “anticipate,” “assume,” “believe,” “estimate,” “expect,” “goal,” “intend,” “objective,” “plan,” “project,” “seek,” “target,” and variations of such words and similar expressions are intended to identify such forward-looking statements. All forward-looking statements speak only as of the date on which they are made. Such forward-looking statements are subject to certain risks, uncertainties and assumptions relating to certain factors that could cause actual results to differ materially from those anticipated in such statements, including, without limitation, the following:
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our heavy reliance on the Facebook platform to run our application and Facebook’s ability to discontinue, limit or restrict access to its platform by us or our application, change its terms and conditions or other policies or features, including restricting methods of collecting payments and establish more favorable relationships with one or more of our competitors;
we derive a portion of our revenue from mobile platforms;
we rely on a small number of our total users for nearly all of our revenue;
our ability to establish and maintain brand recognition;
the intense competition in the online dating marketplace;
our reliance on email campaigns to attract subscribers;
our ability to effectively advertise our products through a variety of advertising media;
our ability to generate subscribers through advertising and marketing agreements with third party advertising and marketing providers;
our ability to effectively manage our growth, including attracting and hiring key personnel;
our ability to develop and market new technologies to respond to rapid technological changes;
our ability to anticipate and respond to changing consumer trends and preferences;
our ability to support our application for mobile platforms;
our ability to obtain additional financing to execute our business plan;
reliance on our chief executive officer and sole director;
our dependence on a single vendor to host the majority of our application traffic;
our reliance upon credit card processors and related merchant account approvals;
the increased governmental regulation of the online dating, social networking or Internet industries;
our ability to protect our intellectual property;
the potential impact of a finding that we have infringed on intellectual property rights of others;
the effect of programming errors or flaws in our products;
the effect of security breaches, computer viruses and computer hacking attacks;
our limited insurance coverage and the risk of uninsured claims;
the possibility that our users and subscribers may be harmed following interaction with other users and subscribers;
the risk that we are deemed a dating service or an Internet dating service; and
other circumstances that could disrupt the functioning of our application and website.
For a more detailed discussion of these and other factors that may affect our business, see Item 1A, “Risk Factors,” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We caution that the foregoing list of factors is not exclusive, and new factors may emerge, or changes to the foregoing factors may occur, that could impact our business. We do not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this Annual Report on Form 10-K, except to the extent required by federal securities laws.
Item 1.
In this Annual Report on Form 10-K, references to “we,” “our,” “us,” the “Company,” or “Snap Interactive” refer to Snap Interactive, Inc. and its subsidiaries on a consolidated basis.
General
We develop, own and operate a dating and social networking software application under the AreYouInterested.com brand that can be accessed on Facebook®, mobile devices such as iPhone® and Android®, as well as a stand-alone website. We primarily generate revenue from subscription fees and, as of March 22, 2012, we had approximately 145,000 active subscribers. We consider a subscriber to be “active” if he or she has pre-paid for current access to premium features and the term of the subscriber’s subscription period has not yet expired. The number of our daily and monthly active users as publicly reported by AppData®, which includes non-paying users and paying subscribers, varies greatly on a daily and monthly basis, respectively, and is much greater than the number of our active subscribers for the same measurement period.