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
Directors.
"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.
Contacts:
Ipsidy Inc.
Philip Beck, Chairman &
CEO
philipbeck@ipsidy.com
Stuart Stoller, CFO
stuartstoller@ipsidy.com
+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
(Unaudited)
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)
IPSIDY INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30,
December 31,
2019 2018
(unaudited)
ASSETS
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
LIABILITIES AND STOCKHOLDERS' EQUITY
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.
IPSIDY INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months ended
Nine Months Ended
September 30,
September 30,
2019 2018 2019 2018
Revenues:
Products and services $537,097 $684,640 $
1,889,943 $
3,014,374
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
Diluted
See notes to condensed consolidated financial statements.
IPSIDY INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
June 30,
2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
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)
CASH FLOWS FROM INVESTING ACTIVITIES:
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)
CASH FLOWS FROM FINANCING ACTIVITIES:
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
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-third-quarter-ended-september-30-2019-300957895.html
SOURCE Ipsidy Inc.
