Market Overview

Intellicheck Announces Second Quarter Financial Results

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Year Over Year SaaS Revenues Increased 107%

Gross Margin Increased to 91.8%

Intellicheck, Inc. (NYSE:IDN), an industry leader in
identification authentication solutions, today announced its financial
results for the second quarter ended June 30, 2018.

Revenue for the second quarter ended June 30, 2018 increased 5% to
$1,001,418 versus $951,334 in the prior year comparable period. SaaS
revenue in the second quarter grew 107% and totaled $625,000 versus
$302,000 in the quarter ending June 30, 2017. Gross profit as a
percentage of revenues improved to 91.8% for the three months ended June
30, 2018 versus 78.5% in the prior year comparable period.

Intellicheck CEO Bryan Lewis said, "The growth in SaaS based product
revenue reflects the early success of our strategic plan in refocusing
our efforts in our key markets and the importance of the steps we have
taken to build a new sales organization and initiate operational
changes."

Lewis said the path forward is well-defined, "We will continue our
concentration on growing market traction for our key products, powering
market opportunities to galvanize consistent growth."

The net loss for the three months ended June 30, 2018 was ($1,100,375)
or ($0.07) per diluted share versus ($1,098,553) or ($0.10) per diluted
share in the comparable prior year period. Adjusted EBITDA (earnings
before interest, taxes, depreciation, amortization, stock-based
compensation expense and certain non-recurring charges) was a loss of
($1,018,135) for the second quarter of 2018 versus a loss of ($902,211)
in the prior year comparable period. A reconciliation of adjusted EBITDA
to net loss is provided elsewhere in this release.

Cash at June 30, 2018 totaled $6.5 million and stockholders' equity
totaled $14.7 million at the end of 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 fiscal period ended June 30,
2018.

Conference Call Information:

The Company will hold an earnings conference call today, August 14, 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.

The conference call will also be webcast simultaneously and can be
accessed at http://www.investorcalendar.com/event/29079 by
clicking on the link to the webcast.

The webcast will be available for 14 days following the conference call.

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

 

INTELLICHECK, INC.

 
CONSOLIDATED BALANCE SHEETS
 
ASSETS
 
June 30, December 31,
2018 2017
(Unaudited)
CURRENT ASSETS:
Cash $ 6,462,631 $ 8,010,161
Accounts receivable, net of allowance of $24,375 and $18,750
at June 30, 2018 and December 31, 2017, respectively 473,704 652,627
Inventory 81,217 85,321
Other current assets 453,355 218,835
Total current assets 7,470,907 8,966,944
 
NOTE RECEIVABLE, net of current portion 50,287 71,138
PROPERTY AND EQUIPMENT, net 296,992 211,602
GOODWILL 8,101,661 8,101,661
INTANGIBLE ASSETS, net 385,075 463,578
OTHER ASSETS 9,742 67,181
 
Total assets $ 16,314,664 $ 17,882,104
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Accounts payable $ 52,762 $ 71,578
Accrued expenses 928,281 815,350
Deferred revenue, current portion 624,064 739,980
Total current liabilities 1,605,107 1,626,908
 
OTHER LIABILITIES:
Deferred revenue, long-term portion 48,751 87,736
Other long-term liabilities 7,863 158,407
 
Total liabilities 1,661,721 1,873,051
 
COMMITMENTS AND CONTINGENCIES (Note 11)
 
STOCKHOLDERS' EQUITY:
Common stock - $.001 par value; 40,000,000 shares authorized;
15,625,329 and 15,009,246 shares issued and outstanding at
June 30, 2018 and December 31, 2017, respectively 15,625 15,009
Additional paid-in capital 127,228,475 126,416,869
Accumulated deficit (112,591,157) (110,422,825)
Total stockholders' equity 14,652,943 16,009,053
 
Total liabilities and stockholders' equity $ 16,314,664 $ 17,882,104
 
   

INTELLICHECK, INC.

 
CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

Three Months Ended June 30,

Six Months Ended June 30,

2018

 

2017

2018

 

2017

 
REVENUES $ 1,001,418 $ 951,334 $ 2,063,480 $ 1,663,994
COST OF REVENUES (82,393) (204,634) (182,862) (314,070)
Gross profit 919,025 746,700 1,880,618 1,349,924
 
OPERATING EXPENSES
Selling, general and administrative 1,307,524 1,352,361 2,722,908 2,525,244
Research and development 755,097 495,048 1,383,133 865,645
Total operating expenses 2,062,621 1,847,409 4,106,041 3,390,889
 
Loss from operations (1,143,596) (1,100,709) (2,225,423) (2,040,965)
 
OTHER INCOME
Interest and other income 43,221 2,156 57,091 5,655
 
Net loss $ (1,100,375) $ (1,098,553) $ (2,168,332) $ (2,035,310)
 
PER SHARE INFORMATION
Loss per common share -
Basic/Diluted $ (0.07) $ (0.10) $ (0.14) $ (0.19)
 
Weighted average common shares used
in computing per share amounts -
Basic/Diluted 15,623,351 10,769,437 15,448,255 10,750,751
 
         
INTELLICHECK, INC.
 
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the six months ended June 30, 2018
(Unaudited)
 
Additional Total

Common Stock

Paid-in Accumulated Stockholders'

Shares

Amount

Capital

Deficit

Equity

 
BALANCE, January 1, 2018 15,009,246 $ 15,009 $ 126,416,869 $ (110,422,825) $ 16,009,053
 
Stock-based compensation expense - - 124,701 - 124,701
Exercise of stock options 593,838 594 686,927 - 687,521
Vesting of restricted stock 22,155 22 (22) - -
Net loss - - - (2,168,332) (2,168,332)
 
BALANCE, June 30, 2018 15,625,239 $ 15,625 $ 127,228,475 $ (112,591,157) $ 14,652,943
 
 
INTELLICHECK, INC.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 

Six months ended June 30,

2018

 

2017

 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,168,332) $ (2,035,310)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 120,618 208,600
Stock-based compensation expense 124,701 191,518
Provision for doubtful accounts 5,625 -
Deferred rent (6,002) (22,215)
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 173,298 (273,595)
Decrease (increase) in inventory 4,104 (11,580)
(Increase) in other current assets (233,703) (187,879)
Decrease in other assets 57,439 1,358
Increase in accounts payable and accrued expenses 107,980 93,792
(Decrease) in deferred revenue (154,901) (175,662)
(Decrease) in other long-term liabilities (158,407) -
Net cash used in operating activities (2,127,580) (2,210,973)
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (127,505) (12,794)
Collection of note receivable 20,034 19,185
Net cash (used in) provided by investing activities (107,471) 6,391
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock from exercise
of stock options 687,521 10,100
Net proceeds from issuance of common stock from exercise
of warrants - 137,500
Net cash provided by financing activities 687,521 147,600
 
Net decrease in cash (1,547,530) (2,056,982)
 
CASH, beginning of period 8,010,161 3,092,172
 
CASH, end of period $ 6,462,631 $ 1,035,190
 

A reconciliation of GAAP net loss to Non-GAAP Adjusted EBITDA follows:

 
(Unaudited)
Three Months Ended   Six Months Ended
June 30, June 30,
2018   2017 2018   2017
Net loss $ (1,100,375) $ (1,098,553) $ (2,168,332) $ (2,035,310)
Reconciling items:
Interest and other income (43,221) (2,156) (57,091) (5,655)
Depreciation and amortization 61,468 103,780 120,618 208,600
Stock-based compensation expense 63,993 94,718 124,701 191,518
Adjusted EBITDA $ (1,018,135) $ (902,211) $ (1,980,104) $ (1,640,847)
 

About Intellicheck NYSE American: IDN Intellicheck is a trusted
industry leader in technology solutions that provide real-time
identification authentication and age verification. We make it possible
for our clients to enhance safety and awareness, increase revenues,
improve customer service, and increase operational efficiencies. Founded
in 1994, Intellicheck has grown to serve dozens of Fortune 500 companies
including retail and financial industry clients, police departments,
national defense clients at agencies, major seaports, and military
bases, and diverse state and federal government agencies. For more
information on Intellicheck, visit http://www.intellicheck.com/
and follow Intellicheck on Twitter
@IntellicheckIDN,
on Facebook https://www.facebook.com/intellicheckidn/,
on Instagram @IntellicheckIDN,
on LinkedIn https://www.linkedin.com/company/intellicheck-inc-
and on YouTube https://www.youtube.com/user/ICMOBIL.

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,
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
website and use words like "anticipate," "assume," "believe,"
"continue," "estimate," "expect," "forecast," "future," "intend,"
"plan," "potential," "predict," "project," "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 Intellicheck's products and the
presently anticipated growth in the commercial adoption of the Company's
products and services; changing levels of demand for Intellicheck's
current and future products; Intellicheck's ability to reduce or
maintain expenses while increasing sales; customer results achieved
using our products in both the short and long term; success of future
research and development activities; Intellicheck's ability to
successfully market and sell its products, any delays or difficulties in
the Company's supply chain coupled with the typically long sales and
implementation cycle for its products; Intellicheck's ability to enforce
its intellectual property rights; changes in laws and regulations
applicable to the Company's products; the Company's 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 Intellicheck's
reports filed with the SEC. We do not assume any obligation to update
the forward-looking information.

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