Intellinetics, Inc. Reports Q4 and Year-End Results

Total Annual Revenue $2,381,427

Q4 Total Revenue Growth over 2017

Consistent Software as a Service Growth

 

COLUMBUS, OH – (April 1, 2019) – Intellinetics, Inc. (OTCQB: INLX), a cloud-based document solutions provider, announced financial results for the twelve months ended December 31, 2018.

 

2018 Fourth Quarter Financial Highlights

 

  Total Revenue increased 26% from Q4 2017.
  Software as a Service Revenue increased 33% from Q4 2017.
  Net Loss increase of 74% from Q4 2017.
  Adjusted EBITDA Loss of $257,490, a decrease of 45% from 2017.

 

Year-End Financial Highlights

 

  Total Revenue decreased 9% from 2017.
  Software as a Service Revenue increased 20% from 2017.
  Net Loss increase of 71% from 2017.
  Adjusted EBITDA Loss of $1,159,214, an increase of 30% from 2017.

 

Summary – 2018 Fourth Quarter Results

 

Revenues for the three months ended December 31, 2018 were $633,266 as compared with $503,770 for the same period in 2017. Intellinetics reported a net loss of $552,403 and $317,531 for the three months ended December 31, 2018 and 2017, respectively, representing an increase in net loss of $234,872. Net Loss in 2017 included a $419,090 one-time gain on retirement of debt. Net loss per share for the three months ended December 31, 2018 and 2017 was ($0.03) and ($0.02), respectively.

 

Summary – Year-End Results

 

Revenues for the twelve months ended December 31, 2018 were $2,381,427 as compared with $2,620,108 for the same period in 2017. Intellinetics reported a net loss of $2,340,280 and $1,365,364 for the twelve months ended December 31, 2018 and 2017, respectively, representing an increase of $974,916. Net Loss in 2017 included a $419,090 one-time gain on retirement of debt. Net loss per share for the twelve months ended December 31, 2018 and 2017 was ($0.13) and ($0.08), respectively.

 

2018 Highlights

 

  Our commitment to the Human Services Provider market included launching our Provider Portal in 2018, which provides a cost-effective solution that allows Independent Providers to get up and running within 24 hours. An Independent Provider is a self-employed person who provides services to people with developmental disabilities and who must provide and fund their own technology solutions.
  We launched our partnership with K-12 education partner Software Unlimited Inc. in 2018, which included completing fully integrated document management capabilities within their School Accounting System for K-12 school districts, as well as successfully implementing 11 pre-launch beta customers in December, 2018.

 

James F. DeSocio, President & CEO of Intellinetics, stated, “The groundwork for our growth is laid with our focus on a core group of customers in the Human Services Provider and K-12 education space. Our unique and differentiated product value proposition, including auditing, compliance and reporting, is compelling. Excitingly, both our cost to acquire customers and effort to implement and on-board new customers is streamlined and accelerated with our focus. This course will provide greater revenue consistency, higher growth, and deliver the best long-term value to shareholders.”

 

 
 

 

“The improved results in the fourth quarter is a good indicator that our strategy to focus in key markets such as K-12 and align ourselves with strategic solution partners is the right path. At the same time, our clients’ adoption of hosted solutions has accelerated, which impacts our total revenue with lower one-time software sales, but is exactly the conversion that needs to happen to build our recurring revenue base to give us more predictability and reliability in the future. In increasing our SaaS-based revenues we recognize that short-term revenue recognition on subscription services is generally lower than upfront premise license sales and that the new programs will take some months to bear fruit in our top line and this is exactly the track we need to be on to change and enable a breakthrough to the next level. We expect our results to be reflected in improved sales revenue overall, and growing recurring SaaS in particular, in 2019,” DeSocio concluded.

 

About Intellinetics, Inc.

 

Intellinetics, Inc., located in Columbus, Ohio, is a cloud-based document content services provider. Its flagship IntelliCloud™ platform provides easy to use, affordable, secure document management to organizations that have critical document requirements and must always be audit-ready, including health and human services, education and law enforcement. Our customers save valuable time by immediately locating any form, file, record or document, and our commitment to superior customer service ensures users can remain focused on their mission. For additional information, please visit www.intellinetics.com.

 

Cautionary Statement

 

Statements in this press release which are not purely historical, including statements regarding future business and new revenues associated with any industry, channel partner, service, or business relationship; Intellinetics’ future revenues, revenue consistency, growth and long-term value, including in 2019; growth of software as a service revenue; market penetration; execution of Intellinetics’ business plan, strategy, and focus; and other intentions, beliefs, expectations, representations, projections, plans or strategies regarding future growth, financial results, and other future events are forward-looking statements. The forward-looking statements involve risks and uncertainties including, but not limited to, the risks associated with the effect of changing economic conditions, trends in the products markets, variations in Intellinetics’ cash flow or adequacy of capital resources, market acceptance risks, the success of Intellinetics’ channel partners and distribution partners, technical development risks, and other risks and uncertainties discussed in Intellinetics’ most recent annual report on Form 10-K. Intellinetics cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Intellinetics disclaims any obligation and does not undertake to update or revise any forward-looking statements in this press release. Expanded and historical information is made available to the public by Intellinetics on its website at www.intellinetics.com or at www.sec.gov.

 

CONTACT:

Joe Spain, CFO

Intellinetics, Inc.

614.921.8170 investors@intellinetics.com

 

Continued

 

 
 

 

Non-GAAP Financial Measure

 

Intellinetics uses non-GAAP Adjusted EBITDA as a supplemental measure of our performance that is not required by, or presented in accordance with, accounting principles generally accepted in the United States (GAAP).

 

A non-GAAP financial measure is a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different from the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows of a company. Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to net income, operating income, or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities or a measure of our liquidity. Intellinetics urges investors to review the reconciliation of non-GAAP Adjusted EBITDA to the comparable GAAP Net Loss, which is included in this press release, and not to rely on any single financial measure to evaluate Intellinetics’ financial performance.

 

We believe that Adjusted EBITDA is a useful performance measure and is used by us to facilitate a comparison of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under GAAP can provide alone. We define “Adjusted EBITDA” as earnings before interest expense, any income taxes, depreciation and amortization expense, and other non-cash expenses such as share-based compensation, note conversion warrant expense and other financing related transaction costs.

 

Reconciliation of Net Loss to Adjusted EBITDA

 

   Year Ended December 31, 
   2018   2017 
Net loss - GAAP  $(2,340,280)  $(1,365,364)
Interest expense, net   865,501    609,851 
Depreciation and amortization   9,040    11,831 
Share-based compensation   306,525    219,045 
Note issue/conversion warrant expense   -    52,951 
Gain on retirement of debt   -    (419,090)
Adjusted EBITDA  $(1,159,214)  $(890,776)

 

Reconciliation of Net Loss to Adjusted EBITDA

 

   Three Months Ended December 31, 
   2018   2017 
Net loss - GAAP  $(552,403)  $(317,531)
Interest expense, net   230,523    198,090 
Depreciation and amortization   2,033    2,815 
Share-based compensation   62,357    70,482 
Note issue/conversion warrant expense   -    (1,064)
Gain on retirement of debt   -    (419,090)
Adjusted EBITDA  $(257,490)  $(466,298)

 

Continued

 

 
 

 

INTELLINETICS, INC. and SUBSIDIARY

Consolidated Statements of Operations

 

   For the Three Months Ended
December 31,
   For the Year Ended
December 31,
 
   2018   2017   2018   2017 
Revenues:                    
Sale of software  $33,553   $77,232   $173,691   $452,238 
Software as a service   221,057    166,139    748,754    622,224 
Software maintenance services   254,643    233,851    995,170    966,011 
Professional services   121,113    14,651    289,962    451,628 
Third Party services   2,900    11,897    173,850    128,007 
Total revenues   633,266    503,770    2,381,427    2,620,108 
                     
Cost of revenues:                    
Sale of software   5,464    26,384    69,754    97,899 
Software as a service   79,282    76,358    300,235    304,512 
Software maintenance services   25,810    32,959    100,205    120,422 
Professional services   61,976    15,000    120,421    198,133 
Third Party services   953    5,789    151,790    39,496 
Total cost of revenues   173,485    156,490    742,405    760,462 
                     
Gross profit   459,781    347,280    1,639,022    1,859,646 
                     
Operating expenses:                    
General and administrative   523,792    628,720    2,106,851    2,199,904 
Sales and marketing   255,836    254,276    997,910    822,514 
Depreciation   2,033    2,815    9,040    11,831 
Total operating expenses   781,661    885,811    3,113,801    3,034,249 
                     
Loss from operations   (321,880)   (538,531)   (1,474,779)   (1,174,603)
                     
Other income (expense)                    
Gain on retirement of debt   0    419,090    0    419,090 
Interest expense, net   (230,523)   (198,090)   (865,501)   (609,851)
Total other income (expense)   (230,523)   221,000    (865,501)   (190,761)
                     
Net loss  $(552,403)  $(317,531)  $(2,340,280)  $(1,365,364)
                     
Basic and diluted net loss per share:  $(0.03)  $(0.02)  $(0.13)  $(0.08)
                     
Weighted average number of common shares outstanding - basic and diluted   17,729,421    17,383,266    17,726,927    17,369,012 

 

 
 

 

INTELLINETICS, INC. and SUBSIDIARY

Consolidated Balance Sheets

 

   December 31, 2018   December 31, 2017 
ASSETS          
Current assets:          
Cash  $1,088,630   $1,125,921 
Accounts receivable, net   135,739    295,815 
Prepaid expenses and other current assets   162,495    162,450 
Total current assets   1,386,864    1,584,186 
           
Property and equipment, net   9,131    14,760 
Other assets   10,284    10,284 
Total assets  $1,406,279   $1,609,230 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
           
Current liabilities:          
Accounts payable and accrued expenses  $308,121   $405,155 
Deferred revenues   723,619    708,130 
Deferred compensation   165,166    213,166 
Notes payable - current   -    875,000 
Notes payable - related party - current   46,807    416,969 
Total current liabilities   1,243,713    2,618,420 
Long-term liabilities:          
Notes payable - net of current portion   3,144,926    1,221,384 
Notes payable - related party - net of current portion   1,045,937    312,680 
Other long-term liabilities   502,295    100,301 
           
Total long-term liabilities   4,693,158    1,634,365 
           
Total liabilities   5,936,871    4,252,785 
           
Stockholders’ deficit:          
Common stock, $0.001 par value, 75,000,000 shares authorized; 17,729,421 and 17,426,792 shares issued and outstanding at December 31, 2018 and 2017, respectively   30,733    30,431 
Additional paid-in capital   14,101,460    13,648,519 
Accumulated deficit   (18,662,785)   (16,322,505)
Total stockholders’ deficit   (4,530,592)   (2,643,555)
Total liabilities and stockholders’ deficit  $1,406,279   $1,609,230 

 

 
 

 

INTELLINETICS, INC. and SUBSIDIARY

Consolidated Statements of Cash Flows

 

   For the Twelve Months Ended
December 31,
 
   2018   2017 
Cash flows from operating activities:          
Net loss  $(2,340,280)  $(1,365,364)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   9,039    11,831 
Bad debt expense   (7,223)   4,221 
Loss on disposal of fixed assets   -    4,816 
Amortization of deferred financing costs   232,609    132,296 
Amortization of beneficial conversion option   202,220    252,623 
Stock issued for services   57,500    65,625 
Stock options compensation   249,025    153,420 
Note offer warrant expense   -    52,951 
Gain on retirement of debt   -    (419,090)
Changes in operating assets and liabilities:          
Accounts receivable   167,299    (40,539)
Prepaid expenses and other current assets   (45)   (11,829)
Accounts payable and accrued expenses   (97,034)   (95,704)
Deferred compensation   (48,000)   (1,846)
Other long-term liabilities   401,994    99,176 
Deferred interest expense   -    (3,542)
Deferred revenues   15,489    38,511 
Total adjustments   1,182,873    242,920 
Net cash used in operating activities   (1,157,407)   (1,122,444)
           
Cash flows from investing activities:          
Purchases of property and equipment   (3,410)   (12,624)
Net cash used in investing activities   (3,410)   (12,624)
           
Cash flows from financing activities:          
Payment of deferred financing costs   (130,841)   (317,527)
Proceeds from notes payable   900,000    2,320,000 
Proceeds from notes payable - related parties   400,000    390,000 
Repayment of notes payable   -    (786,461)
Repayment of notes payable - related parties   (45,633)   (34,969)
Net cash provided by financing activities   1,123,526    1,571,043 
           
Net increase (decrease) in cash   (37,291)   435,975 
Cash - beginning of period   1,125,921    689,946 
Cash - end of period  $1,088,630   $1,125,921 
           
Supplemental disclosure of cash flow information:          
Cash paid during the period for interest and taxes  $34,852   $170,889 
           
Supplemental disclosure of non-cash financing activities:          
Discount on notes payable for beneficial conversion feature  $57,661   $248,522 
Discount on notes payable - related parties for beneficial conversion feature   24,710    - 
Discount on notes payable for warrants   44,548    103,637 
Discount on notes payable - related parties for warrants   19,799    61,801 

 

 
 

 

View differences made from one to another to evaluate Intellinetics, Inc.'s financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Intellinetics, Inc..

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account