Intellicheck Announces Second Quarter Fiscal 2020 Financial Results | Financial Buzz

Intellicheck Announces Second Quarter Fiscal 2020 Financial Results

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.

Contacts

Investor Relations: Gar Jackson (949) 873-2789

Media and Public Relations: Sharon Schultz (302) 539-3747