Ipsidy Announces Results for Third Quarter Ended September 30, 2019

LONG BEACH, New York, Nov. 13, 2019 /PRNewswire/ -- Ipsidy Inc. (https://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 third quarter ended September 30, 2019.

Financial Highlights for the Three and Nine Months Ended September 30, 2019

    --  Total revenue for the three and nine-month periods in 2019 was $0.6
        million and $1.9 million respectively compared to $0.7 million and $3.0
        million respectively for the three and nine months in 2018. The results
        for the nine-months period in 2018 reflected the one-time supply of
        Search(TM), our Automated Fingerprint Identification System to the
        Zimbabwe Electoral Commission, offset by revenue increases in 2019 from
        new products and Cards Plus.
    --  Net loss before taxes for the three and nine months ended September 30,
        2019 were $2.3 million and $6.8 Million respectively, compared to a net
        loss for the three and nine months ended September 30, 2018 of $2.1
        million and $7.4 million.
    --  Basic and diluted net loss per share for the three and nine months ended
        September 30, 2019 was $0.00 cents and 0.01 cents respectively compared
        to basic and diluted net loss per share of $0.00 cents and $0.02 cents
        respectively in the three and nine months ended September 30, 2018.
    --  Adjusted EBITDA loss for the three and nine month periods in 2019 was
        $1.8 million and $4.9 million respectively compared to $1.3 million and
        $4.4 million respectively in 2018.
    --  In June 2019, the Company closed a common equity funding round for
        aggregate gross proceeds of approximately $3.1 million, by the issuance
        of approximately 38.8 million shares of Common Stock.

Refer to Table 1 for reconciliation of net income to Adjusted EBITDA (a non-GAAP measure).

Operational Highlights

Ipsidy continued to make progress in executing our strategy, improving our platform pursuing sales and launching our new identity solutions across several vertical and international markets, including the following activities:

    --  Signed LOI with local partners to establish business and operations in
        United Arab Emirates (UAE) and commenced sales activities in UAE, in
        pursuit of a number of specific opportunities.
    --  Ipsidy Peru S.A.C, our subsidiary company in Peru signed an agreement
        with RENIEC, the National ID Registry in Peru to enhance the Proof(TM)
        solution launched in Peru and established local infrastructure to
        deliver our Identity services in the country. We believe that expected
        revenues from our implementation for BBVA Continental in Peru under an
        agreement with Hogier Gartner Y CIA will substantially improve the cash
        flow of our Multipay operations in the LATAM region.
    --  Launched our SDKs for image capture and liveness detection and developed
        enhancements based on client feedback.
    --  Launched Proof, our new identity proofing solution, available through
        Ipsidy's new Identity Portal and via integration. Working with our
        partner, Datapro, to offer Verified and Proof, to additional Datapro
        financial institutions.
    --  Continued to develop our enhanced frictionless IP Camera solution for
        facial biometric extraction, tracking and matching. This solution is
        currently being tested by an entertainment industry customer in the
        United States.
    --  Completed support for Apple's iOS13 with NFC and made available updated
        Ipsidy, Time and Concierge Apps on Apple and Android platforms with
        updated SDK's. Additional Ipsidy technology placed into service.
    --  Phillip L. Kumnick, previously SVP Global Acquirer Processing at Visa,
        an experienced industry executive, agreed to join the Board of

"Ipsidy's Identity as a Service Platform solves everyday problems with biometric certainty," said Philip Beck, Chairman and CEO of Ipsidy. "We believe that we are at an inflection point based on our engagement and discussions with business partners and potential customers. The Ipsidy team is working on closing opportunities in the EMEA and LATAM regions, that we believe will be significant. We are focused on improving our balance sheet and efficiently deploying resources to support our active sales pipeline and the efforts needed to deliver the quality solutions that customers are demanding."

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 September 30, 2019 filed at www.sec.gov and posted on the Company's investor relations website.

Get the Ipsidy mobile apps at: App Store or GooglePlay. Visit the Ipsidy website today at https://www.ipsidy.com where you can learn more about our solutions, sign up to become part of our Reseller Network, learn how to integrate to our platform or use our out-of-the box solutions Access(TM), Time and the Identity Portal.

About Ipsidy:

Ipsidy Inc. (OTCQX: IDTY) www.ipsidy.com is a provider of 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 in my lobby? 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; Ipsidy Enterprises in the U.K. and Ipsidy Perú S.A.C. in Peru. Further information on Ipsidy can be found at www.ipsidy.com or contact us at sales@ipsidy.com.


                Ipsidy Inc.

     Philip Beck, Chairman &

     Stuart Stoller, CFO     

            +1 (516) 274-8700

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.

                                                      Reconciliation of Net Loss to Adjusted EBITDA


     Three Months  Ended                                   
              Nine Months Ended

      September 30, 2019                                  
               September 30, 2018           
     September 30, 2019            
     September 30, 2018

     Net loss                                        $(2,358,236)                                                    $(2,145,098)                   $(6,796,766)                    $(7,371,073)

     Add Back:

     Interest Expense                                     110,654                                                          218,075                         290,804                          703,542

     Other                                               (11,068)                                                         (1,198)                       (23,565)                        (78,932)

     Depreciation and amortization                        202,235                                                          125,781                         529,931                          349,921

     Taxes                                                 10,902                                                            2,887                          28,867                           17,304

     Stock compensation                                   274,669                                                          536,344                       1,066,270                        1,977,368

     Adjusted EBITDA (Non-GAAP)                      $(1,770,844)                                                    $(1,263,209)                   $(4,904,459)                    $(4,401,870)



      September 30,       
     December 31,

                                                                                                                                                                      2019                    2018



     Current Assets:

       Cash                                                                                                                                                    $1,775,257              $4,972,331

       Accounts receivable, net                                                                                                                                   188,641                 130,875

       Current portion of net investment in direct financing lease                                                                                                 63,615                  58,727

       Inventory                                                                                                                                                  184,624                 133,541

       Other current assets                                                                                                                                       460,203                 471,834

       Total current assets                                                                                                                                     2,672,340               5,767,308

     Property and equipment, net                                                                                                                                  187,554                 204,000

     Other assets                                                                                                                                               1,099,687               1,566,177

     Intangible assets, net                                                                                                                                     4,893,837               3,310,184

     Goodwill                                                                                                                                                   6,736,043               6,736,043

     Net investment in direct financing lease, net of current portion                                                                                             511,695                 560,036

       Total assets                                                                                                                                           $16,101,156             $18,143,748


     Current Liabilities:

       Accounts payable and accrued expenses                                                                                                                   $1,762,996              $1,302,226

       Capital lease obligation, current portion                                                                                                                   33,793                  30,898

       Note payable, current portion                                                                                                                            1,941,169

       Deferred revenue                                                                                                                                           282,604                 236,270

       Total current liabilities                                                                                                                                4,020,562               1,569,394

     Long-term liabilities:

           Capital lease obligation, net of current portion                                                                                                        58,891                  84,610

        Notes payable, net of unamortized discounts and current portion                                                                                             8,915               1,853,648

        Other liabilities                                                                                                                                         195,150                  45,000

               Total liabilities                                                                                                                                4,283,518               3,552,652

     Commitments and Contingencies

     Stockholders' Equity:

       Common stock, $0.0001 par value, 1,000,000,000 shares

       authorized; 518,125,454 and 478,950,996 shares issued

       and outstanding as of September 30, 2019 and December 31, 2018, respectively                                                                              51,812                  47,895

       Additional paid in capital                                                                                                                              94,802,418              90,770,682

       Subscription receivable

       Accumulated deficit                                                                                                                                   (83,232,001)           (76,435,235)

       Accumulated comprehensive income                                                                                                                           195,409                 207,754

       Total stockholders' equity                                                                                                                              11,817,638              14,591,096

       Total liabilities and stockholders' equity                                                                                                             $16,101,156             $18,143,748

        See notes to condensed consolidated financial statements.




          Three Months ended                       
              Nine Months Ended

          September 30,                            
              September 30,

                                                                                                                                                 2019                                                  2018                2019                 2018


             Products and services                                                                                                       $537,097                                              $684,640    $
         1,889,943    $

             Lease income                                                                                                                   15,664                                                17,169              48,157               52,551

            Total revenues, net                                                                                                           552,761                                               701,809           1,938,100            3,066,925

           Operating Expenses:

             Cost of Sales                                                                                                                 142,992                                               240,908             508,716            1,104,865

             General and administrative                                                                                                 2,097,993                                             2,247,300           6,440,042            7,815,703

             Research and development                                                                                                     357,289                                                13,154             960,071              525,595

             Depreciation and amortization                                                                                                202,235                                               125,781             529,931              349,921

             Total operating expenses                                                                                                   2,800,509                                             2,627,143           8,438,760            9,796,084

             Loss from operations                                                                                                     (2,247,748)                                          (1,925,334)        (6,500,660)         (6,729,159)

           Other Income (Expense):

             Interest expense                                                                                                            (110,654)                                            (218,075)          (290,804)           (703,542)

             Other income, net                                                                                                              11,068                                                 1,198              23,565               78,932

            Other expense, net                                                                                                           (99,586)                                            (216,877)          (267,239)           (624,610)

            Loss before income taxes                                                                                                  (2,347,334)                                          (2,142,211)        (6,767,899)         (7,353,769)

           Income Taxes                                                                                                                   (10,902)                                              (2,887)           (28,867)            (17,304)

           Net loss                                                                                                                   $(2,358,236)                                         $(2,145,098)       $(6,796,766)        $(7,371,073)

           Net loss per share - Basic and Diluted                                                                                        $(0.00)                                              $(0.00)            $(0.01)             $(0.02)

           Weighted Average Shares Outstanding - Basic and                                                                          518,125,454                                           430,651,242         492,288,043          414,132,103

                                                           See notes to condensed consolidated financial statements.




              Nine Months Ended

              June 30,

                                                                                                                                                                     2019                           2018


       Net loss                                                                                                                                             $(6,796,766)                  $(7,371,073)

       Adjustments to reconcile net loss with cash used in operations:

      Depreciation and amortization expense                                                                                                                  527,498                        349,921

      Stock-based compensation                                                                                                                              1,066,270                      1,798,285

      Stock issued for services                                                                                                                                41,112                        227,097

      Inventory reserve                                                                                                                                                       348,308

      Amortization of debt discount and debt issuance costs, net                                                                                             82,323                        450,488

      Changes in operating assets and liabilities:

     Accounts receivable                                                                                                                                     (66,815)                      (78,166)

     Net investment in direct financing lease                                                                                                                 43,453                         39,060

     Other current assets                                                                                                                                   (110,792)                      (60,374)

     Inventory                                                                                                                                                (60,930)                         4,000

     Accounts payable and accrued expenses                                                                                                                   200,117                      (122,391)

     Deferred revenue                                                                                                                                           46,334                        315,574

     Net cash flows from operating activities                                                                                                            (5,028,196)                   (4,099,271)


       Purchase of property and equipment                                                                                                                   (32,277)                      (52,715)

       Investment in other assets including work in process                                                                                              (1,035,635)                     (745,253)

       Net cash flows from investing activities                                                                                                          (1,067,912)                     (797,968)


       Proceeds from sale of common stock, net of offering costs                                                                                          2,928,271                      8,951,929

       Principal payments on notes payable                                                                                                  (1,000,000)

       Principal payments on capital lease obligations                                                                                                      (22,824)                      (20,255)

       Net cash flows from financing activities                                                                                                            2,905,447                      7,931,674

       Effect of foreign currencies exchange on cash                                                                                                         (6,413)                      (33,852)

     Net change in Cash                                                                                                                                    (3,197,074)                     3,000,583

     Cash, Beginning of Period                                                                                                                              4,972,331                      4,413,822

     Cash, End of Period                                                                                                                     $1,775,257                     $7,414,405

     Supplemental Disclosure of Cash Flow Information:

     Cash paid for interest                                                                                                    $10,771                           $169,817

     Cash paid for income taxes                                                                                                $28,867                            $17,304

     Non-cash Investing and Financing Activities:

       Purchase of vehicle with note payable                                                                     $16,510                
     $            -

       Recognition of lease right to use assets and liabilities                                                 $514,473                
     $            -

      Reclassification of software development costs to intangible assets            $2,021,810                                $679,882


                  Ipsidy Inc.

     Philip Beck, Chairman &

     Stuart Stoller, CFO      

              +1 (516) 274-8700

View original content:http://www.prnewswire.com/news-releases/ipsidy-announces-results-for-third-quarter-ended-september-30-2019-300957895.html

SOURCE Ipsidy Inc.