SeeThruEquity Initiates Coverage on Spiral Toys, Inc. (OTCQB: STOY) with a Price Target of $1.35

NEW YORK, NY / ACCESSWIRE / March 8, 2016 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced it has initiated coverage on Spiral Toys, Inc.
(OTCQB: STOY) with a price target of $1.35.

The report is available here: STOY Initiation Report. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack’s. The report will be available on these platforms. The firm also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.

Spiral Toys was founded in 2011 by Mark Meyers, an experienced executive of Disney, Sony and Midway Games, with the goal of developing a unique technology platform capable of addressing the large opportunity to merge unique entertainment with interactive technology. Following extensive development honing its technology and concept, Spiral Toys became a public company in July 2014 via a merger transaction with Lexi-Luu Designs. Shortly thereafter, the Los Angeles-based company bolstered its management team and completed development of its initial flagship product, CloudPets. In its first year of commercialization, CloudPets generated approximately $6mn in revenue for Spiral Toys. We see potential for CloudPets initial success to be just the beginning for Meyers and the Spiral Toys team, with several possible catalysts ahead for the company heading into 2016.

“In our view 2015 was a transformational year for Spiral Toys evolving from an intriguing concept company into a fast-growing commercial enterprise. Their flagship product, CloudPets are a popular interactive plush toys that let you exchange voice messages, stories, games, and more with anyone, anywhere, using an embedded mobile-connected technology component developed by Spiral Toys. Approximately 1.3mn components were shipped to distributors generating $6mn in revenue as well as recognizing royalties on 540,000 CloudPets shipped into retail stores including Walmart, Target and Toys”R”Us. CloudPets also succeeded in driving mobile engagement for Spiral Toys as the business builds a new interactive consumer brand,” commented Ajay Tandon, CEO of SeeThruEquity. “The biggest near term catalyst we see is on the product front, where, having established its presence in the interactive toys market, Spiral Toys is planning to aggressively add complementary digital and physical products that leverage its interactive mobile technology platform. Management expects to commercialize four new products this year – including one in connection with a licensing deal with technology-based language education leader, Rosetta Stone (NYSE: RST). We are intrigued by what we have seen so far and are initiating coverage with a 12-month price target of $1.35 per share.”

Additional highlights from the report are as follows:

Intriguing new product lineup to follow on success of CloudPets

We were impressed by the initial sales of the CloudPets product line. We estimate Spiral Toys generated approximately $6mn in revenue derived from CloudPets in 2015, with approximately 1.3mn components shipped to distribution partners at year-end. Considering this success, and also the impressive retail distribution put in place by Spiral Toys – which includes Walmart, Target and Toys”R”Us – we are expecting strong organic growth for the company in 2016. Having established its presence in the interactive toys market, Spiral Toys is planning to add complementary digital and physical products that leverage its interactive mobile technology platform. Management expects to add four new products this year – including one as part of a licensing deal with technology-based learning leader Rosetta Stone (NYSE:RST). We expect the company to complete 2016 product announcements by the end of 2Q16, giving the company time to sell into retail prior to the year-end holidays. So far we have been intrigued by the span of the new products, which include Wiggy, a novel internet-connected piggy bank for next-generation savers, and TubeFriends, an ultrasonic-enabled toy offering a new way to experience YouTube, and Vinyl, which combines the “fun of stickers with the brains of digital communications.” In combination with a fresh iteration of CloudPets and Spiral Toys’ strong retail network, the company appears poised for nice growth in 2016.

Expanded management team as STOY readies for potential uplisting

We are impressed by the strong management team that has been assembled by Spiral Toys, which includes talent with leadership and technology experience at top entertainment, video game and technology companies such as Disney Interactive, Electronic Arts (EA), and Amazon, among others. With a strong management team expecting growth in FY16, we believe Spiral Toys is seeking to uplist to a major national exchange, such as the NASDAQ or NYSE MKT. This is a process that would likely include a capital raise – perhaps as part of an acquisition to add scale and new products/technology – which would include growth capital and also ensure the company meets shareholder’s equity requirements. If accomplished, this would be a major milestone for Spiral Toys, and a possible catalyst for shares given greater liquidity and access to institutional investors.

Please review important disclosures at www.seethruequity.com.

About Spiral Toys, Inc.

Spiral Toys (OTCQB: STOY) is a California-based company with a business, founded by a former senior executive of Disney and Sony, focused on developing and marketing products and mobile applications in the mobile-connected space. Spiral’s mobile-connected entertainment platform connects physical items to today’s top mobile devices through wireless technologies, creating a new kind of interactive user experience.

Spiral sells its products worldwide, and is developing additional applications based on its platform technology for several different verticals within the entertainment industry. Spiral collects revenue on both the physical purchase of goods and the sale of digital content through Apple’s App Store and the Google Marketplace. The company also acts as co-developer with major entertainment studios. For more information, visit www.spiraltoys.com

About SeeThruEquity

SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. The company does not conduct any investment banking or commission based business. SeeThruEquity is approved to contribute its research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks, and distribute its research to its database of opt-in investors. The company also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.

For more information visit www.seethruequity.com.

Contact:

Ajay Tandon
SeeThruEquity
info@seethruequity.com

SOURCE: SeeThruEquity

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