Ipsidy Announces Results for 1st Quarter Ended March 31, 2019
LONG BEACH, New York, May 7, 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 first quarter ended March 31, 2019.
Financial Highlights for the Three Months Ended March 31, 2019
-- Total revenue for the three-month period ended March 31, 2019 increased
by 41% to $0.7 million compared to $0.5 million for the three months
ended March 31, 2018.
-- Net loss before taxes for the three months ended March 31, 2019
decreased by 18% to $2.2 million compared to a net loss for the three
months ended March 31, 2018 of $2.7 million.
-- Basic and diluted net loss per share for the three-month period ended
March 31, 2019 was $0.00 cents compared to basic and diluted net loss
per share of $0.01 cents in the three-month period March 31, 2018.
-- Adjusted EBITDA loss for the three months ended March 31, 2019 improved
4% to $1.6 million compared to $1.7 million in 2018.
Refer to Table 1 for reconciliation of net income to Adjusted EBITDA (a non-GAAP measure).
"Everything starts with trusted identity. We started 2019 by enhancing our suite of mobile biometric solutions to include Proof, our new identity verification solution, and to make Proof and Verified easily accessible through the Ipsidy Identity Portal without any integration," said Philip Beck, Chairman and CEO of Ipsidy. "Our identity platform offers mobile biometric services that work great on their own and even better together. We look forward to more customers and users and to growing our platform revenue over the year as we focus in on our active sales pipeline."
Operational Highlights
Ipisdy continued to make progress in executing our strategy, building our team, enhancing our identity transaction platform, establishing sales channels and launching our new identity solutions across several vertical and international markets, including the following activities:
-- Continued to develop our frictionless IP Camera solution to enhance our
Access(TM) solution by leveraging our Ayonix license and allowing for
edge processing of facial biometric extraction, tracking and matching.
-- Launched Verified(TM) Portal with Safetrade's Xpressa Payment Solutions
in South Africa, to quickly identify merchant customers of its online
payment gateway and to authorize account profile changes. Verified
helped Xpressa enhance its security, increase productivity and improve
customer service.
-- Launched Proof(TM), our new identity proofing solution, available
through Ipsidy's new Identity Portal and via integration. Our partner,
Datapro, has modified its e-IBS core banking solution and digital
onboarding module to include Proof, which is available to Datapro's 160
plus financial institutions with millions of account holders in 31
countries.
-- Signed agreement with REMCAP to roll out Access(TM), our out-of-the-box
solution for physical access management, to their customers across the
United States, including religious institutions, schools and other
non-profit organizations.
-- Working with RemoteLok to produce a combined solution comprising
RemoteLok's EdgeState platform and Ipsidy's Access(TM), to enable
biometrically authenticated, authorized users to open door locks, with a
blink and a smile.
-- Added Noftek to the Ipsidy Partner Network in order to offer Proof and
Verified as part of its suite of data protection and IT security
solutions in the Caribbean market.
-- Announced agreement with Mobile Solutions Peru to launch Ipsidy
solutions in Peru and Chile, with the first customer, Boxer Security,
adopting our Access solution and its mobile facial biometric application
to verify employee location and attendance for their thousands of
security personnel working at hundreds of client facilities around Peru.
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-Q for the three months ended March 31, 2019 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 on 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
IPSIDY INC AND SUBSIDIARIES
Reconciliation of Net Loss to Adjusted EBITDA
Three Months Ended
March 31, 2019 March 31, 2018
Net loss $(2,262,739) $(2,752,925)
Add Back:
Interest
Expense 86,890 239,169
Depreciation
and
amortization 160,788 110,676
Other (6,226)
Taxes 13,701 4,561
Stock
compensation 415,379 738,212
Adjusted
EBITDA
(Non-
GAAP) $(1,592,207) $(1,660,307)
IPSIDY INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATION
(Unaudited)
Three months ended
March 31,
2019 2018
Revenues:
Products and
services 723,941 507,927
Lease income 16,437 17,862
Total
revenues, net 740,378 525,789
Operating
Expenses:
Cost of Sales 176,463 120,248
General and
administrative 2,567,135 2,798,699
Research and
development 4,366 5,361
Depreciation
and
amortization 160,788 110,676
Total
operating
expenses 2,908,752 3,034,984
Loss from
operations (2,168,374) (2,509,195)
Other Income
(Expense):
Interest
expense (86,890) (239,169)
Other income 6,226
Other income
(expense),
net (80,664) (239,169)
(Loss) income
loss before
income taxes (2,249,038) (2,748,364)
Income Taxes (13,701) (4,561)
Net (loss)
income $(2,262,739) $(2,752,925)
Net (loss)
income per
share -Basic
and Diluted $(0.00) $(0.01)
Weighted
Average
Shares
Outstanding -
Basic and
Diluted 478,950,996 404,254,263
IPSIDY INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31,
December 31,
2019 2018
(Unaudited)
ASSETS
Current Assets:
Cash $2,920,895 $4,972,331
Accounts receivable, net 677,826 130,875
Current portion of net investment in direct financing lease 60,313 58,727
Inventory 165,352 133,541
Other current assets 524,217 471,834
Total current assets 4,348,603 5,767,308
Property and equipment, net 216,780 204,000
Other Assets 2,127,999 1,566,177
Intangible Assets, net 3,169,734 3,310,184
Goodwill 6,736,043 6,736,043
Net investment in direct financing lease, net of current portion 544,350 560,036
Total assets $17,143,509 $18,143,748
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $1,562,928 $1,302,226
Finance lease obligation, current portion 31,834 30,898
Notes payable, current portion 4,926
Deferred revenue 551,894 236,270
Total current liabilities 2,151,582 1,569,394
Long-term liabilities:
Notes payable, net of discounts and current portion 1,892,673 1,853,648
Finance lease obligation, net of current portion 76,292 84,610
Other liabilities 254,998 45,000
Total liabilities 4,375,545 3,552,652
Commitments and Contingencies
Stockholders' Equity:
Common stock, $0.0001 par value, 1,000,000,000 shares authorized;
478,950,996 shares issued and outstanding 47,895 47,895
Additional paid in capital 91,186,061 90,770,682
Accumulated deficit (78,697,974) (76,435,235)
Accumulated comprehensive income 231,982 207,754
Total stockholders' equity 12,767,964 14,591,096
Total liabilities and stockholders' equity $17,143,509 $18,143,748
IPSIDY INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,262,739) $(2,752,925)
Adjustments to reconcile net loss with cash used in operations:
Depreciation and amortization expense 160,788 110,676
Stock-based compensation 415,379 738,212
Amortization of debt discount and debt issuance costs, net 27,441 144,065
Changes in operating assets and liabilities:
Accounts receivable (557,737) (514,722)
Net investment in direct financing lease 14,100 12,675
Other current assets 213,842 (169,973)
Inventory (42,424) (196,655)
Accounts payable and accrued expenses (28,964) 380,899
Deferred revenue 315,624 416,301
Net cash flows from operating activities (1,744,690) (1,831,447)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (14,900) (10,474)
Investment in other assets including work in process (315,282) (182,140)
Net cash flows from investing activities (330,182) (192,614)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on finance lease obligations (7,381) (6,551)
Net cash flows from financing activities (7,381) (6,551)
Effect of foreign currencies exchange on cash 30,817 29,153
Net change in cash (2,051,436) (2,001,459)
Cash, Beginning of period 4,972,331 4,413,822
Cash, End of period $2,920,895 $2,412,363
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $3,392 $4,223
Cash paid for income taxes $13,701 $4,561
Non-Cash investing Investing and Financing Activities:
Purchase of vehicle with note payable $16,510
$ -
Recognition of lease right to use assets and related liability $514,473
$ -
Ipsidy Inc.
Philip Beck, Chairman &
CEO
philipbeck@ipsidy.com
Stuart Stoller, CFO
stuartstoller@ipsidy.com
+1 (516) 274-8700
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SOURCE Ipsidy Inc.
