Ipsidy Announces Results for Year Ended December 31, 2018
LONG BEACH, New York, March 11, 2019 /PRNewswire/ -- Ipsidy Inc. (www.ipsidy.com) (OTCQX: IDTY) which operates an Identity as a Service (IDaaS) platform that delivers a suite of secure, mobile, biometric identity solutions, available to any vertical, anywhere, today announced its results for the year ended December 31, 2018.
Financial Highlights for the Year Ended December 31, 2018
-- Total revenue for the year ended December 31, 2018 was $3.8 million
compared to $2.3 million for the year ended December 31, 2017.
-- Net loss for the year ended December 31, 2018 was $10.0 million compared
to a net loss of $17.5 million for the year ended December 31, 2017. In
2017, there was a negative impact of $4.1 million from the elimination
of debt and modification of warrants. The loss from operations was $9.3
million in 2018 compared to $12.0 million in 2017.
-- Basic and fully diluted net loss per share for the year ended December
31, 2018 was $0.02 cents compared to $0.05 cents for the year ended
December 31, 2017.
-- Adjusted EBITDA loss for the year ended December 31, 2018 was $6.0
million compared to an Adjusted EBITDA loss of $5.7 million for the year
ended December 31, 2017, as the Company invested in the technical and
operational resources required to support on-going and future
operations.
-- Secured approximately $9.6 million of additional equity investment and
prepaid $1.2 million of debt and interest.
-- Total liabilities reduced to $3.6 million as of December 31, 2018,
compared to liabilities of $4.1 million as of December 31, 2017, and
stockholders' equity increased to $14.6 million as of December 31, 2018,
compared to stockholders' equity of $12.9 million as of December 31,
2017.
The combination of the above events resulted in the substantial improvement in the Company's balance sheet and provided near-term working capital.
Refer to Table 1 for reconciliation of net income to Adjusted EBITDA (a non-GAAP measure).
During 2018, we continued to strengthen our bench and our management team. We have developed a clear strategy for taking advantage of the tremendous opportunity in the Identity as a Service vertical and are hard at work executing our business plan. We have a suite of exciting services and solutions, operating on a state-of-the-art platform that we have built, tested and piloted over the past 18 months. Ipsidy's platform is flexible, scalable, can be accessed by our customers in different markets and verticals and will support a growing, repeatable and recurring revenue stream.
We are focused on selling the following solutions:
-- Proof(TM) - a remote identity proofing solution that uses
government-issued credentials combined with real-time biometrics, the
launch of which we announced last week.
-- Verified(TM) - comprises solutions for authenticating both account
access requests as well as business transactions using biometric
technology on mobile devices we use every day.
-- Access(TM) - provides biometric certainty to knowing the identities of
people moving in and- out of any building, campus or defined area.
-- Transact(TM) - a digital issuance, mobile payment and customer loyalty
platform that supports networks of trusted agents, merchants and
consumers who can accept and perform transactions using closed-loop
payment cards online, in-store, and in-app.
Innovation and nimbleness are critical to our success and our delivery of Proof is a good example of our ability to react quickly to changing circumstances. In response to customer feedback across various markets, Ipsidy scoped requirements in late 2018 and launched Proof in the first quarter of 2019. Datapro is our first partner to integrate Proof into their platform.
"We have made tremendous strides over the course of 2018. We are firmly on the road towards achieving our strategic objectives," said Philip Beck, Chairman and CEO of Ipsidy. "Everything starts with trusted identity. Our identity platform offers a suite of mobile biometric services that our customers can use across multiple use cases to seamlessly create trusted transactions, with a common user experience when delivered through the Ipsidy mobile identity application. We look forward to more customers and users and to growing our platform revenue over the coming quarters."
Operational Highlights
The Company continued to make progress in executing our strategy, building the team, enhancing our identity transaction platform and establishing sales channels to support the launch of our new identity solutions across several vertical and international markets, including the following activities:
-- Added to our engineering, QA and operations teams and recruited
experienced new management. These new resources are experienced in
building and operating scalable platforms in the mobile world and manage
both internal and external development and QA teams, which are building
and maintaining our systems.
-- First implementation of Verified(TM) in Panama with Datapro and Unibank.
Our biometric multi-factor authentication solution, as well as our new
identity proofing solution were integrated into Datapro's e-IBS core
banking solution and therefore become available to their 160 plus
financial institutions with millions of account holders in 31 countries.
-- Launch of Access(TM), our out-of-the-box solution for physical access
management. Using just a tablet and a Bluetooth beacon and requiring no
integration or expensive hardware, Access delivers a highly secure, yet
low-cost, biometric access solution to protect a perimeter and create a
trusted environment.
-- Signed an agreement with Ayonix Face Technologies to enhance our Access
solution, using IP cameras with their high-speed 3D facial recognition
technology to offer a frictionless access solution.
-- We have bolstered the sales and marketing team with new management. Our
agreements with Safetrade Africa and New Image Building Services to
resell our services and solutions in Sub-Saharan Africa and Latin
America, highlight our focus on reseller channels to market our
products. Last week we were pleased to announce the first Safetrade
customer implementation.
-- We have recently signed additional resellers for Access and Verified in
the United States, the Caribbean and Peru, further details of which will
be provided shortly.
Additional analysis of the Company's performance can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Quarterly Report on Form 10-K for the year ended December 31, 2018 filed at www.sec.gov and posted on the Company's investor relations website.
Get the Ipsidy mobile app at: App Store or GooglePlay. Visit the Ipsidy website today at https://www.ipsidy.com/developers where you can create a demo account and run test authentications using the Ipsidy mobile app.
About Ipsidy:
Ipsidy Inc. (OTCQX: IDTY) www.ipsidy.com operates an Identity as a Service (IDaaS) platform that delivers a suite of secure, mobile, biometric identity solutions, available to any vertical, anywhere. In a world that is increasingly digital and mobile, our mission is to help our customers know with biometric certainty the identity of the people with whom they are engaging. We provide solutions to everyday problems: Who is applying for a loan? Who is accessing the computer system? Who is at the door? Identity creates trusted transactions. Ipsidy's solutions embed authenticated identity and event details with a digital signature and participants use their own mobile device to approve everyday transactions. Our platform delivers identity solutions that work great on their own but even better together.
Ipsidy is headquartered in New York and has operating subsidiaries: MultiPay in Colombia, www.multipay.com.co; Cards Plus in South Africa, www.cardsplus.co.za; and Ipsidy Enterprises in the U.K. Further information on Ipsidy can be found at www.ipsidy.com or contact us at sales@ipsidy.com.
Notice Regarding Forward-Looking Statements.
Information contained in this announcement may include "forward-looking statements." All statements other than statements of historical facts included herein, including, without limitation, those regarding the financial position, business strategy, plans and objectives of management for future operations of both Ipsidy and its business partners, future service launches with customers, the outcome of pilots and new initiatives and customer pipeline are forward-looking statements. Such forward-looking statements are based on a number of assumptions regarding Ipsidy present and future business strategies, and the environment in which Ipsidy expects to operate in the future, which assumptions may or may not be fulfilled in practice. Implementation of some or all of the new services referred to is subject to regulatory or other third party approvals. Actual results may vary materially from the results anticipated by these forward-looking statements as a result of a variety of risk factors, including the risk that implementation, adoption and offering of the service by customers, consumers and others may take longer than anticipated, or may not occur at all; changes in laws, regulations and practices; changes in domestic and international economic and political conditions and others. Additional risks may arise with respect to commencing operations in new countries and regions, of which Ipsidy is not fully aware at this time. See the Company's Annual Report Form 10-K for the Fiscal Year ended December 31, 2018 filed at www.sec.gov for other risk factors which investors should consider. These forward-looking statements speak only as to the date of this announcement and cannot be relied upon as a guide to future performance. Ipsidy expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in its expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.
Non-GAAP Financial Information.
The Company provides certain non-GAAP financial measures in this statement. Management believes that Adjusted EBITDA, when viewed with our results under GAAP and the accompanying reconciliations, provides useful information about our period-over-period results. Adjusted EBITDA is presented because management believes it provides additional information with respect to the performance of our fundamental business activities and is also frequently used by securities analysts, investors and other interested parties in the evaluation of comparable companies. We also rely on Adjusted EBITDA as a primary measure to review and assess the operating performance of our company and our management team in connection with our executive compensation. These non-GAAP key business indicators, which include Adjusted EBITDA, should not be considered replacements for and should be read in conjunction with the GAAP financial measures.
We define Adjusted EBITDA as GAAP net loss adjusted to exclude: (1) interest expense, (2) interest income, (3) provision for income taxes, (4) depreciation and amortization, (5) stock-based compensation expense (stock options and restricted stock) and (6) certain other items management believes affect the comparability of operating results. Please see Table 1 below for a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP.
TABLE 1
Reconciliation of Net Loss to Adjusted EBITDA
(Unaudited)
For the Year Ended
December 31, 2018
December 31, 2017
Net loss $(10,027,613) $(17,481,629)
Add Back:
Interest Expense 757,801 1,337,081
Conversion of debt, derivative
liability, and modifications/
other (83,649) 4,106,652
Depreciation and amortization 493,697 475,211
Taxes 30,242 28,781
Write-off of asset 148,627 212,862
Stock compensation 2,675,852 5,650,072
Adjusted EBITDA (Non-GAAP) $(6,005,043) $(5,670,970)
IPSIDY INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
2018 2017
---
Revenues:
Products
and
services $3,759,635 $2,228,910
Lease
income 69,358 74,696
---
Total
revenues,
net 3,828,993 2,303,606
---
Operating Expenses:
Cost of
Sales 1,256,853 589,254
General
and
administrative 11,193,351 13,026,188
Research
and
development 208,311 222,068
Depreciation
and
amortization 493,697 475,211
---
Total
operating
expenses 13,152,212 14,312,721
---
Loss from
operations (9,323,219) (12,009,115)
---
Other Income (Expense):
Loss on
derivative
liability (452,146)
Gain on
extinguishment
of note
payable 2,802,234
Loss on
modification
of
derivatives (319,770)
Loss on
modification
of
warrants (158,327)
Loss on
settlement
of notes
payable (5,978,643)
Interest
expense,
net (757,801) (1,337,081)
Other
income,
net 83,649
---
Other
expense,
net (674,152) (5,443,733)
---
Loss
before
income
taxes (9,997,371) (17,452,848)
---
Income
Taxes (30,242) (28,781)
---
Net loss $(10,027,613) $(17,481,629)
Net loss
per
share -
Basic $(0.02) $(0.05)
Net loss
per
share -
Diluted $(0.02) $(0.05)
Weighted
Average
Shares
Outstanding
-Basic 429,852,594 338,485,301
===
Weighted
Average
Shares
Outstanding
-
Diluted 429,852,594 338,485,301
===
IPSIDY INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
December 31,
2018 2017
ASSETS
Current Assets:
Cash $4,972,331 $4,413,822
Accounts receivable, net 130,875 165,929
Current portion of net
investment in direct
financing lease 58,727 52,790
Inventory, net 133,541 492,030
Other current assets 471,834 218,537
Total current assets 5,767,308 5,343,108
Property and equipment,
net 204,000 209,719
Other Assets 1,566,177 1,243,531
Intangible Assets, net 3,310,184 2,878,080
Goodwill 6,736,043 6,736,043
Net investment in direct
financing lease, net of
current portion 560,036 618,763
Total assets $18,143,748 $17,029,244
===
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and
accrued expenses $1,347,226 $1,447,185
Capital lease obligation,
current portion 30,898 27,420
Deferred revenue 236,270 122,511
Total current liabilities 1,614,394 1,597,116
Long-term liabilities:
Notes payable, net 1,853,648 2,375,720
Capital lease obligation,
net of current portion 84,610 115,509
Total liabilities 3,552,652 4,088,345
Stockholders' Equity:
Common stock, $0.0001 par value, 1,000,000,000 shares
authorized; 478,950,996 and 403,311,988 shares issued
and outstanding as of
December 31, 2018 and
2017, respectively 47,895 40,331
Additional paid in capital 90,770,682 79,053,339
Accumulated deficit (76,435,235) (66,407,622)
Accumulated comprehensive
income 207,754 254,851
Total stockholders' equity 14,591,096 12,940,899
Total liabilities and
stockholders' equity $18,143,748 $17,029,244
===
IPSIDY INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended
December 31,
2018 2017
---
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(10,027,613) $(17,481,629)
Adjustments to reconcile net loss with cash used in operations:
Depreciation and
amortization expense 493,697 475,211
Stock-based
compensation 2,429,959 5,650,072
Stock issued for
services 343,019 140,151
Inventory reserve 348,302 358,300
Amortization of debt
discount and debt
issuance costs, net 477,928 937,133
Loss on derivative
liability 452,146
Gain on settlement of
notes payable (2,802,234)
Loss on modification of
derivatives 319,770
Loss on modification of
warrants 158,327
Loss on conversion of
debt 5,978,643
Write off of assets 148,627 212,862
Changes in operating assets and liabilities:
Accounts receivable 20,762 (36,963)
Net investment in
direct financing lease 52,790 47,452
Other current assets (265,624) (52,058)
Inventory (1,519) (712,527)
Accounts payable and
accrued expenses (84,512) 90,353
Deferred revenue 113,759 (276,169)
---
Net cash flows from
operating activities (5,950,425) (6,541,160)
---
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property
and equipment (59,091) (13,246)
Investment in other
assets including work
in process (1,319,932) (894,435)
---
Net cash flows from
investing activities (1,379,023) (907,681)
---
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance
of notes payable and
common stock 3,000,000
Proceeds from the sale
of common stock, net 9,610,793 9,002,290
Proceeds from exercise of common stock warrants 26,400
Payment of debt and
equity issuance costs (658,864) (750,975)
Principal payments on
capital lease
obligations (27,421) (30,842)
Principal payments on
notes payable (1,000,000) (59,819)
---
Net cash flows from
financing activities 7,924,508 11,187,054
---
Effect of foreign
currencies exchange on
cash (36,551) (13,496)
---
Net change in Cash 558,509 3,724,717
Cash, Beginning of
Period 4,413,822 689,105
---
Cash, End of Period $4,972,331 $4,413,822
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $173,426 $11,021
Cash paid for income
taxes $17,304 $6,957
Non-cash Investing and Financing Activities:
Issuance of common
stock for conversion
of debt and related
interest
$ - $21,609,673
Issuance of common
stock for debt
issuance costs
$ - $224,460
Reclassification of
derivatives upon
removal of price
protection in warrants
$ - $7,614,974
Reclassification of
software development
costs to intangible
assets $679,882
$ -
Acquisition of
equipment due to a
capital lease
$ - $163,407
Further information on Ipsidy can be found at www.ipsidy.com or contact us at sales@ipsidy.com.
Contacts:
Ipsidy Inc.
Philip Beck, Chairman &
CEO
philipbeck@ipsidy.com
Stuart Stoller, CFO
stuartstoller@ipsidy.com
+1 (516) 274-8700.
View original content:http://www.prnewswire.com/news-releases/ipsidy-announces-results-for-year-ended-december-31-2018-300809676.html
SOURCE Ipsidy Inc.
