Intellicheck, Inc. (Nasdaq: IDN), an industry leader in
identification authentication solutions, today announced its
financial results for the second quarter ended June 30, 2020. Total
revenue for the second quarter ended June 30, 2020 grew 18% to
$1,842,000 versus $1,558,000 in the prior year comparable period.
Quarter over quarter SaaS revenue for the second quarter grew 49%
and totaled $1,671,000 versus $1,121,000 in the prior year
comparable period.
Speaking to the Company’s performance during the quarter, CEO
Bryan Lewis said, “I am very pleased with the strides we have made
during a quarter marked by unprecedented circumstances brought on
by the COVID-19 pandemic. Our ability to continue to grow our
client base, advance the adoption of our technology solution
solutions with current clients and maintain forward momentum with a
robust implementation pipeline underscores the steps we have taken
to position the company to be nimble and responsive to market
developments.”
Commenting on the shifting landscape, Lewis noted the explosion
of fraud in digital channels has reverberated across market
verticals creating a real understanding of the importance of the
Company’s person-not-present authentication tools, “What
differentiates us from the growing field of competitors in facial
recognition is the continuing value of our technology solutions.
Many of our competitors also talk about facial recognition, but as
our clients are realizing, facial recognition only has value when
it includes the critical first step – determining if the government
identification document is real. Without knowing with near
certainty that it is authentic, facial recognition is useless. We
believe that our solutions provide that near certainty. This
reflects how we as a company continue to meet real-time needs with
industry leading technology solutions that protect businesses and
the customers they serve.”
Gross profit as a percentage of revenues was 88.6% for the three
months ended June 30, 2020 versus 85.9% in the prior year
comparable period. The increase in gross margin was driven by the
continued growth of our SaaS revenue.
Net loss for the three months ended June 30, 2020 was ($760,000)
or ($0.05) per diluted share versus a net loss of ($874,000) or
($0.06) per diluted share for the comparable prior year period.
Adjusted EBITDA (earnings before interest, taxes, depreciation,
amortization, stock-based compensation expense and certain
non-recurring charges) was ($619,000) for the second quarter of
2020 as compared to a loss of ($785,000) in the prior year
comparable period. A reconciliation of adjusted EBITDA to net loss
is provided elsewhere in this release.
Cash at June 30, 2020 totaled $14.6 million and stockholders’
equity totaled $22.1 million at the end of the period.
The financial results reported today do not take into account
any adjustments that may be required in connection with the
completion of the Company’s review process and should be considered
preliminary until Intellicheck files its Form 10-Q for the second
quarter ended June 30, 2020.
Conference Call Information
The Company will hold an earnings conference call today, August
11, at 4:30 p.m. ET/1:30 p.m. PT to discuss operating results. To
listen to the earnings conference call, please dial 877-407-8037.
For callers outside the U.S., please dial 201-689-8037.
A replay of the conference call will be available shortly after
completion of the live event. To listen to the replay, please dial
877-660-6853 and use conference identification number 13707648. For
callers outside the U.S., please dial 201-612-7415 and use
conference identification number 13707648. The replay will be
available beginning approximately two hours after the completion of
the live event and will remain available until August 25, 2020.
INTELLICHECK, INC.
BALANCE SHEETS
ASSETS
June 30,
December 31,
2020
2019
(Unaudited)
CURRENT ASSETS:
Cash
$
14,589,615
$
3,350,853
Accounts receivable, net of allowance of
$42,055
at June 30, 2020 and December 31, 2019,
respectively
1,444,609
1,674,894
Other current assets
492,447
354,349
Total current assets
16,526,671
5,380,096
PROPERTY AND EQUIPMENT, net
172,244
181,731
GOODWILL
8,101,661
8,101,661
INTANGIBLE ASSETS, net
535,081
174,237
OPERATING LEASE RIGHT-OF-USE ASSET
92,187
151,668
OTHER ASSETS
-
7,778
Total assets
$
25,427,844
$
13,997,171
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
139,892
$
95,388
Accrued expenses
1,482,986
1,408,086
Notes payable
1,106,100
-
Operating lease liability, current
portion
96,651
125,851
Deferred revenue, current portion
527,287
572,391
Total current liabilities
3,352,916
2,201,716
OTHER LIABILITIES:
Deferred revenue, long-term portion
10,486
13,322
Operating lease liability, long-term
portion
-
32,620
Total liabilities
3,363,402
2,247,658
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common stock - $.001 par value; 40,000,000
shares authorized;
18,028,282 and 16,041,650 shares issued
and outstanding at
June 30, 2020 and December 31, 2019,
respectively
18,028
16,042
Additional paid-in capital
139,715,197
128,668,583
Accumulated deficit
(117,668,783)
(116,935,112)
Total stockholders' equity
22,064,442
11,749,513
Total liabilities and stockholders'
equity
$
25,427,844
$
13,997,171
INTELLICHECK, INC.
STATEMENTS OF OPERATIONS
Three
months ended June 30,
Six months
ended June 30,
2020
2019
2020
2019
REVENUES
$
1,842,195
$
1,557,991
$
4,957,467
$
2,836,985
COST OF REVENUES
(209,945)
(218,988)
(902,829)
(411,285)
Gross profit
1,632,250
1,339,003
4,054,638
2,425,700
OPERATING EXPENSES
Selling, general and administrative
1,415,336
1,379,368
2,869,891
2,873,078
Research and development
986,312
879,377
1,929,611
1,691,374
Total operating expenses
2,401,648
2,258,745
4,799,502
4,564,452
Loss from operations
(769,398)
(919,742)
(744,864)
(2,138,752)
OTHER INCOME
Interest and other income
9,125
46,065
11,193
52,084
Net loss
$
(760,273)
$
(873,677)
$
(733,671)
$
(2,086,668)
PER SHARE INFORMATION
Loss per common share -
Basic/Diluted
$
(0.05)
$
(0.06)
$
(0.05)
$
(0.13)
Weighted average common shares used
in computing per share amounts -
Basic/Diluted
16,377,539
15,742,692
16,265,544
15,691,016
INTELLICHECK, INC.
STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
Three months ended June 30,
2020
Additional
Total
Common
Stock
Paid-in
Accumulated
Stockholders’
Shares
Amount
Capital
Deficit
Equity
BALANCE, March 31, 2020
16,209,627
$
16,210
$
128,989,744
$
(116,908,510)
$
12,097,444
Stock-based compensation expense
-
-
103,710
-
103,710
Issuance of common stock, net of costs
1,769,230
1,769
10,567,698
-
10,569,467
Exercise of stock options, net of cashless
exercise of 8,958 shares
31,650
32
13,939
-
13,971
Issuance of shares for restricted stock
grants
10,325
10
(10)
-
-
Settlement of executive bonuses with
issuance of restricted stock units
9,462
9
53,451
-
53,460
Shares forfeited in exchange for
withholding taxes
(2,012)
(2)
(13,335)
(13,337)
Net loss
-
-
-
(760,273)
(760,273)
BALANCE, June 30, 2020
18,028,282
$
18,028
$
139,715,197
$
(117,668,783)
$
22,064,442
Three months ended June 30,
2019
Additional
Total
Common
Stock
Paid-in
Accumulated
Stockholders’
Shares
Amount
Capital
Deficit
Equity
BALANCE, March 31, 2019
15,638,765
$
15,639
$
127,660,206
$
(115,599,392)
$
12,076,453
Stock-based compensation expense
-
-
73,042
-
73,042
Exercise of stock options, net of cashless
exercise of 21,864 shares
58,008
58
63,192
-
63,250
Exercise of stock options
-
-
-
-
-
Exercise of warrants
92,856
93
204,190
-
204,283
Issuance of shares for restricted stock
grants
2,000
2
(2)
-
-
Net loss
-
-
-
(873,677)
(873,677)
BALANCE, June 30, 2019
15,791,629
$
15,792
$
128,000,628
$
(116,473,069)
$
11,543,351
INTELLICHECK, INC.
STATEMENT OF STOCKHOLDERS’
EQUITY
(Unaudited)
Six months ended June 30,
2020
Additional
Total
Common
Stock
Paid-in
Accumulated
Stockholders’
Shares
Amount
Capital
Deficit
Equity
BALANCE, December 31, 2019
16,041,650
$
16,042
$
128,668,583
$
(116,935,112)
$
11,749,513
Stock-based compensation expense
-
-
189,752
-
189,752
Issuance of common stock, net of costs
1,769,230
1,769
10,567,698
-
10,569,467
Exercise of stock options, net of cashless
exercise of 11,409 shares
146,957
147
139,111
-
139,258
Exercise of warrants
50,000
50
109,950
-
110,000
Issuance of shares for restricted stock
grants
12,995
13
(13)
-
-
Settlement of executive bonuses with
issuance of restricted stock units
9,462
9
53,451
-
53,460
Shares forfeited in exchange for
withholding taxes
(2,012)
(2)
(13,335)
-
(13,337)
Net loss
-
-
-
(733,671)
(733,671)
BALANCE, June 30, 2020
18,028,282
$
18,028
$
139,715,197
$
(117,668,783)
$
22,064,442
Six months ended June 30,
2019
Additional
Total
Common
Stock
Paid-in
Accumulated
Stockholders’
Shares
Amount
Capital
Deficit
Equity
BALANCE, December 31, 2018
15,638,765
$
15,639
$
127,290,467
$
(114,386,401)
$
12,919,705
Stock-based compensation expense
-
-
442,781
-
442,781
Exercise of stock options, net of cashless
exercise of 21,864 shares
58,008
58
63,192
-
63,250
Exercise of warrants
92,856
93
204,190
-
204,283
Issuance of shares for restricted stock
grants
2,000
2
(2)
-
-
Net loss
-
-
-
(2,086,668)
(2,086,668)
BALANCE, June 30, 2019
15,791,629
$
15,792
$
128,000,628
$
(116,473,069)
$
11,543,351
INTELLICHECK, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months
ended June 30,
2020
2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(733,671)
$
(2,086,668)
Adjustments to reconcile net loss to net
cash used in
operating activities:
Depreciation and amortization
80,756
123,492
Stock-based compensation expense
189,752
442,781
Changes in assets and liabilities:
Decrease (increase) in accounts
receivable
230,285
(170,282)
(Increase) in other current assets
(159,797)
(49,833)
Decrease in other assets
7,778
1,964
Increase in accounts payable and accrued
expenses
170,524
149,634
(Decrease) in deferred revenue
(47,940)
(7,918)
Net cash used in operating activities
(262,313)
(1,596,830)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of software license
(100,000)
-
Capital expenditures
(32,114)
(6,529)
Collection of note receivable
21,699
20,850
Net cash (used in) provided by investing
activities
(110,415)
14,321
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common
stock
10,569,467
-
Loan proceeds on unsecured promissory
note
806,100
-
Net proceeds from issuance of common stock
from exercise
of stock options
139,258
63,250
Net proceeds from issuance of common stock
from exercise
of warrants
110,000
204,283
Withholding taxes paid on vesting of
restricted stock units
(13,335)
-
Net cash provided by financing
activities
11,611,490
267,533
Net increase (decrease) in cash
11,238,762
(1,314,976)
CASH, beginning of period
3,350,853
4,376,017
CASH, end of period
$
14,589,615
$
3,061,041
Supplemental disclosure of noncash
investing and financing activities:
Note payable for software license
$
300,000
$
-
Settlement of executive bonuses with
restricted stock units
$
53,460
$
-
Adjusted EBITDA
We use Adjusted EBITDA as a non-GAAP financial performance
measurement. Adjusted EBITDA is calculated by adding back to net
loss, interest and other income, income taxes, impairments of
long-lived assets and goodwill, depreciation, amortization and
stock-based compensation expense. Adjusted EBITDA is provided to
investors to supplement the results of operations reported in
accordance with GAAP. Management believes that Adjusted EBITDA
provides an additional tool for investors to use in comparing our
financial results with other companies that also use Adjusted
EBITDA in their communications to investors. By excluding non-cash
charges such as impairments of long-lived assets and goodwill,
amortization, depreciation and stock-based compensation, as well as
non-operating charges for interest and income taxes, investors can
evaluate our operations and can compare the results on a more
consistent basis to the results of other companies. In addition,
Adjusted EBITDA is one of the primary measures management uses to
monitor and evaluate financial and operating results.
We consider Adjusted EBITDA to be an important indicator of our
operational strength and performance of our business and a useful
measure of our historical operating trends. However, there are
significant limitations to the use of Adjusted EBITDA since it
excludes interest and other income, impairments of long-lived
assets and goodwill, stock-based compensation expense, all of which
impact our profitability, as well as depreciation and amortization
related to the use of long-term assets which benefit multiple
periods. We believe that these limitations are compensated by
providing Adjusted EBITDA only with GAAP net loss and clearly
identifying the difference between the two measures. Consequently,
Adjusted EBITDA should not be considered in isolation or as a
substitute for net loss presented in accordance with GAAP. Adjusted
EBITDA as defined by us may not be comparable with similarly named
measures provided by other entities.
A reconciliation of GAAP net loss to Non-GAAP Adjusted EBITDA
follows:
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Net loss
$
(760,273)
$
(873,677)
$
(733,671)
$
(2,086,668)
Reconciling items:
Interest and other income
(9,125)
(46,065)
(11,193)
(52,084)
Depreciation and amortization
46,961
61,382
80,756
123,492
Stock-based compensation expense
103,710
73,042
189,752
442,781
Adjusted EBITDA
$
(618,727)
$
(785,318)
$
(474,356)
$
(1,572,479)
About Intellicheck Nasdaq: IDN
Intellicheck (Nasdaq: IDN) is a trusted industry leader in
technology solutions that stop identity theft and fraud with
real-time identification authentication and age verification. We
make it possible for our clients to increase revenues, improve
customer service, and increase operational efficiencies. The
company is focused on partnering with banks, credit card issuers
and retailers to prevent fraud. Intellicheck also serves law
enforcement agencies, national defense clients and diverse state
and federal government agencies. For more information on
Intellicheck, visit us on the web and follow us on LinkedIn,
Twitter, Facebook, and YouTube.
Safe Harbor Statement
Statements in this news release about Intellicheck’s future
expectations, including: the advantages of our products, future
demand for Intellicheck’s existing and future products, whether
revenue and other financial metrics will improve in future periods,
whether Intellicheck will be able to execute its turn-around plan
or whether successful execution of the plan will result in
increased revenues, whether sales of our products will continue at
historic levels or increase, whether brand value and market
awareness will grow, whether the Company can leverage existing
partnerships or enter into new ones, whether there will be any
impact on sales and revenues due to an epidemic, pandemic or other
public health issue and all other statements in this release, other
than historical facts, are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995
(PSLRA). These statements, which express management’s current views
concerning future events, trends, contingencies or results, appear
at various places in this release and use words like “anticipate,”
“assume,” “believe,” “continue,” “estimate,” “expect,” “forecast,”
“future,” “intend,” “plan,” “potential,” “predict,” “project,”
“sense”, “strategy,” “target” and similar terms, and future or
conditional tense verbs like “could,” “may,” “might,” “should,”
“will” and “would” are forward-looking statements within the
meaning of the PSLRA. This statement is included for the express
purpose of availing Intellicheck, Inc. of the protections of the
safe harbor provisions of the PSLRA. It is important to note that
actual results and ultimate corporate actions could differ
materially from those in such forward-looking statements based on
such factors as: market acceptance of our products and the
presently anticipated growth in the commercial adoption of our
products and services; our ability to successfully transition pilot
programs into formal commercial scale programs; continued adoption
of our SaaS product offerings; changing levels of demand for our
current and future products; our ability to reduce or maintain
expenses while increasing sales; our ability to successfully expand
the sales of our products and services into new areas including
health care and auto dealerships; customer results achieved using
our products in both the short and long term; success of future
research and development activities; uncertainties around the
duration and severity of the COVID-19 outbreak and its ultimate
impact on our business and results of operations; our ability to
successfully market and sell our products, any delays or
difficulties in our supply chain coupled with the typically long
sales and implementation cycle for our products; our ability to
enforce our intellectual property rights; changes in laws and
regulations applicable to the our products; our continued ability
to access government-provided data; the risks inherent in doing
business with the government including audits and contract
cancellations; liability resulting from any security breaches or
product failure, together with other risks detailed from time to
time in our reports filed with the SEC. We do not assume any
obligation to update the forward-looking information.
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version on businesswire.com: https://www.businesswire.com/news/home/20200811005081/en/
Investor Relations: Gar Jackson (949) 873-2789 Media and Public
Relations: Sharon Schultz (302) 539-3747
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