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OmniComm Systems, Inc. Reports Financial Results for the Quarter and Year-to-Date Period Ending June 30, 2018

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FORT LAUDERDALE, Fla., Aug. 14, 2018 (GLOBE NEWSWIRE) -- OmniComm Systems, Inc. (OmniComm) (OTCQX:OMCM), a global leading provider of clinical data management technology, today announced financial results for the three- and six-month periods ending June 30, 2018.

For the six-month period ending June 30, 2018, OmniComm reported revenue of $13.49 million, as compared to revenue of $13.46 million for the six-month period ending June 30, 2017. Gross margin improved by $0.53 million to $11.18 million, a 5% increase. Operating expenses increased by $1.31 million to $10.09 million.  Year-to-date operating income is $1.09 million, as compared to operating income of $1.88 million for the six months ending June 30, 2017. EBITDA, a non-GAAP financial measure that OmniComm uses as an additional financial measure, was $1.41 million for the six months ending June 30, 2018, as compared to EBITDA of $2.05 million for the six months ending June 30, 2017.

"The financial results through the first half of the year do not tell the entire story," said Stephen Johnson, chief executive officer and president of OmniComm.  "In actuality, it's been a year of record contracts, backlog growth and major milestones, despite the fact that OmniComm has shifted its business model away from perpetual license deals and toward subscription or term license deals."

Last year through July, 52% of the contracts signed were perpetual, compared to only 1.5% through July of this year.  OmniComm also experienced significant contract growth, with $26 million in contracts through July of 2018,  compared to $31 million for all of last year.  OmniComm also increased backlog  to $50 million through July of this year, exceeded the 6,000 clinical trial mark, released two new products, (IRTMaster™ and AutoEncoder), and acquired a market-leading business intelligence platform, Acuity® for data analytics. 

"As expected, this shift in our licensing model, the increase in R&D spending and the recent Acuity acquisition have had a short-term impact on our financial results for the first half of the year," Mr. Johnson said.  "However, these events  have set us up for greater visibility and predictablity  into future revenue and profitability for the second half of this year and going forward into next year."

During the first half of this year, OmniComm significantly increased its product development and expanded its portfolio of eClinical solutions to include the new mobile-friendly version of TrialMaster® EDC, the updated release of TrialOne®, and the introduction of AutoEncoder, Acuity Analytics and IRTMaster. OmniComm has also experienced significant contract growth internationally, especially in China and Japan.

OmniComm provides EBITDA, a non-GAAP financial measure as additional information to its financial results.  Non-GAAP EBITDA excludes the impact of depreciation and amortization expenses that are included in operating income. Non-GAAP EBITDA is not an alternative or substitute for the financial measure prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") of operating income. The non-GAAP EBITDA financial measure presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define this non-GAAP financial measure in the same way. OmniComm's management uses non-GAAP EBITDA as a measure of operational efficiency and as a goal for incentive compensation.  Management believes non-GAAP EBITDA is a useful measure investors may use as an additional factor in their analysis of OmniComm's performance. Please review the below reconciliation of the non-GAAP financial measure EBITDA to the GAAP financial measure operating income, as well as OmniComm's financial statements as filed with the Securities and Exchange Commission.

 
OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES
Reconciliation of GAAP operating income to non-GAAP EBITDA
           
      For the six months ended
      June 30,
      2018   2017
           
Operating income/(loss) (GAAP) $   1,092,598   $   1,875,765
Depreciation expense   163,845     162,419
Amortization expense   157,447     10,875
EBITDA (non-GAAP) $   1,413,890   $   2,049,059
       

Forward-Looking Statements

Statements contained in this press release that are not historical facts are "forward-looking statements." These statements can often be identified by the use of forward-looking terminology such as "estimate," "project," "believe," "expect," "may," "will," "should," "intends," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. We wish to caution the reader that these forward-looking statements regarding matters that are not historical facts are only predictions and are based on information available at the time and/or management's good faith belief with respect to future events. No assurance can be given that plans for the future will be consummated or that the future results indicated, whether expressed or implied, will be achieved. While sometimes presented with numerical specificity, these plans and projections and other forward-looking statements are based upon a variety of assumptions, which we consider reasonable, but which nevertheless may not be realized. Because of the number and range of the assumptions underlying our projections and forward-looking statements, many of which are subject to significant uncertainties and contingencies that are beyond our reasonable control, some of the assumptions inevitably will not materialize, and unanticipated events and circumstances may occur subsequent to the date of this press release. Therefore, our actual experience and results achieved during the period covered by any particular projections or forward-looking statements may differ substantially from those projected. Consequently, the inclusion of projections and other forward-looking statements should not be regarded as a representation by us or any other person that these plans will be consummated or that estimates and projections will be realized, and actual results may vary materially. There can be no assurance that any of these expectations will be realized or that any of the forward-looking statements contained herein will prove to be accurate. Forward-looking statements speak only as of the date the statement was made. OmniComm does not undertake any obligation to update or revise any forward-looking statement made by it or on its behalf, whether as a result of new information, future events or otherwise.

OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
                   
      For the six months ended   For the three months ended
      June 30,   June 30,
      2018   2017   2018   2017
Revenues     $   13,177,520   $   12,930,309   $   6,137,151   $   7,272,133
Reimbursable revenues   312,605     529,578     162,502     452,224
Total revenues     13,490,125     13,459,887     6,299,653     7,724,357
                   
Cost of goods sold   2,196,429     2,186,710     1,042,804     1,106,020
Reimbursable expenses-cost of goods sold   114,749     621,010     56,873     409,206
Total cost of goods sold   2,311,178     2,807,720     1,099,677     1,515,226
                   
Gross margin      11,178,947     10,652,167     5,199,976     6,209,131
                   
Operating expenses              
Salaries, benefits and related taxes   7,211,505     6,512,378     3,552,165     3,221,795
Rent and occupancy expenses   593,148     549,049     303,814     270,097
Consulting services   164,120     120,734     38,584     61,105
Legal and professional fees   308,872     240,444     87,620     93,087
Travel       397,462     491,360     197,066     203,669
Telephone and internet   71,014     75,874     41,331     36,616
Selling, general and administrative   913,050     660,266     503,294     451,377
Bad debt expense   26,252    (46,997)     29,639     (76,363)
Intangible asset impairment   79,634   -0-     79,634   -0-
Depreciation expense   163,845     162,419     86,069     82,495
Amortization expense   157,447     10,875     93,298     5,472
Total operating expenses   10,086,349     8,776,402     5,012,514     4,349,350
                   
Operating income/(loss)   1,092,598     1,875,765     187,462     1,859,781
                   
Other income/(expense)              
Interest expense, related parties   (453,080)     (465,197)     (227,662)     (233,738)
Interest expense   (187,785)     (214,752)     (96,842)     (106,754)
Interest income   9     586     4     585
Change in derivative liabilities   1,758,413     1,536,067     1,729,997     1,142,727
Transaction gain/(loss)   (85,856)     22,110     (63,178)     16,810
Income/(loss) before income taxes   2,124,299     2,754,579     1,529,781     2,679,411
Income tax (expense)   (1,035)     (1,194)   -0-   -0-
Net income/(loss) attributable to common stockholders $   2,123,264   $   2,753,385   $   1,529,781   $   2,679,411
                   
Net income/(loss) per share              
Basic     $   0.01   $   0.02   $   0.01   $   0.02
Diluted   $   0.01   $   0.02   $   0.01   $   0.02
Weighted average number of shares outstanding              
Basic       149,966,378     147,778,391     150,275,406     147,771,240
Diluted     164,067,795     162,256,010     164,376,823     162,316,240
                 

 

OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES
CONSDENSED CONSOLIDATED BALANCE SHEETS
        June 30, 2018   December 31, 2017
        (unaudited)    
ASSETS
CURRENT ASSETS        
  Cash   $   1,117,179   $   1,176,551
  Accounts receivable, net of allowance for doubtful accounts of $176,232 and $149,980, respectively     6,648,997     7,492,597
  Prepaid expenses     217,164     297,131
  Other current assets     14,479     11,463
    Total current assets     7,997,819     8,977,742
  Property and equipment, net     1,186,189     552,538
  Other assets        
  Intangible assets, net     911,092     97,925
  Other assets     95,075     46,714
             
TOTAL ASSETS   $   10,190,175   $   9,674,919
             
LIABILITIES AND SHAREHOLDERS' (DEFICIT)
CURRENT LIABILITIES        
  Accounts payable and accrued expenses   $   1,606,241   $   2,586,045
  Notes payable, related parties, current portion, net of discount of $70,419 and  $-0-, respectively     329,581   -0-
  Convertible notes payable, current portion     50,000     50,000
  Deferred revenue, current portion     6,353,591     7,564,587
  Capital lease liability, current portion     112,227   -0-
  Patent settlement liability, current portion   -0-     112,500
  Conversion feature liability, related parties     961,222     1,604,723
  Conversion feature liability     62,099     81,224
  Warrant liability, related parties     1,388,832     2,196,570
  Warrant liability     945,680     1,244,229
    Total current liabilities     11,809,473     15,439,878
             
LONG TERM LIABILITIES        
  Line of credit, long term     4,400,000     2,650,000
  Notes payable, related parties, long term, net of current portion, net of discount of $-0- and $117,365, respectively   -0-     282,635
  Notes payable, long term, net of current portion, net of discount of $217,313 and $279,402, respectively     485,187     423,098
  Convertible notes payable, related parties, long term, net of current portion     5,770,000     5,770,000
  Convertible notes payable, long term, net of current portion     200,000     350,000
  Deferred revenue, long term, net of current portion     1,717,072     1,952,366
  Capital lease liability, long term, net of current portion     236,830   -0-
             
TOTAL LIABILITIES     24,618,562     26,867,977
             
SHAREHOLDERS' (DEFICIT)        
  Preferred stock, $0.001 par value, 10,000,000 shares authorized, 3,772,500 shares undesignated        
  Series A convertible preferred stock, 5,000,000 shares authorized, -0- and -0- issued and outstanding, respectively, at $0.001 par value; liquidation preference $-0- and $-0-, respectively   -0-   -0-
  Series B convertible preferred stock, 230,000 shares authorized, -0- and -0-  issued and outstanding, respectively, at $0.001 par value; liquidation preference $-0- and $-0-, respectively   -0-   -0-
  Series C convertible preferred stock, 747,500 shares authorized, -0- and -0-  issued and outstanding, respectively, at $0.001 par value; liquidation preference $-0- and $-0-, respectively   -0-   -0-
  Series D preferred stock, 250,000 shares authorized, 250,000 and 250,000 issued and outstanding, respectively, at $0.001 par value     250     250
  Common stock, 500,000,000 shares authorized, 150,409,472 and 148,542,805 issued and outstanding, respectively, at $0.001 par value     150,411     148,544
  Additional paid in capital - preferred     999,750     999,750
  Additional paid in capital - common     55,040,162     54,379,454
  Accumulated other comprehensive (loss)     (418,405)     (397,237)
  Accumulated (deficit)     (70,200,555)     (72,323,819)
             
TOTAL SHAREHOLDERS' (DEFICIT)     (14,428,387)     (17,193,058)
             
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT)   $   10,190,175   $   9,674,919
         


OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
        For the six months ended
        June 30,
        2018   2017
CASH FLOWS FROM OPERATING ACTIVITIES        
Net income/(loss) $ 2,123,264 2,753,385
Adjustment to reconcile net income/(loss) to net cash provided by/(used in) operating activities        
  Change in derivative liabilities     (1,758,413)     (1,536,067)
  Intangible asset impairment     79,634   -0-
  Interest expense from derivative instruments     109,035     122,858
  Employee stock compensation     107,075     261,926
  Provision for doubtful accounts     26,252     (46,997)
  Depreciation and amortization     321,292     173,294
  Changes in operating assets and liabilities        
    Accounts receivable     817,348     613,130
    Prepaid expenses     79,967     (35,182)
    Other current assets     (3,016)     20,765
    Other assets     (48,361)     5,565
    Accounts payable and accrued expenses     (979,804)     (55,041)
    Patent settlement liability     (112,500)     (343,437)
    Deferred revenue     (1,446,290)     (948,794)
Net cash provided by/(used in) operating activities     (684,517)     985,405
             
CASH FLOWS FROM INVESTING ACTIVITIES        
  Purchase of property and equipment     (438,573)     (107,348)
  Purchase of Acuity software     (552,403)   -0-
Net cash (used in) investing activities     (990,976)     (107,348)
             
CASH FLOWS FROM FINANCING ACTIVITIES        
  Repayments of notes payable     (150,000)     (100,000)
  Proceeds/(repayments) from revolving line of credit     1,750,000     (1,100,000)
  Proceeds from exercise of stock options     45,000   -0-
  Principal repayment of capital lease obligation     (10,546)   -0-
Net cash provided by/(used in) financing activities     1,634,454     (1,200,000)
             
Effect of exchange rate changes on fixed and intangible assets     2,835     (12,850)
Effect of exchange rate changes on cash and cash equivalents     (21,168)     12,076
Net increase/(decrease) in cash and cash equivalents     (59,372)     (322,717)
Cash and cash equivalents at beginning of period     1,176,551     1,439,332
             
Cash and cash equivalents at end of period $   1,117,179 $   1,116,615
             
Supplemental disclosures of cash flow information:        
  Cash paid during the period for:        
    Income taxes $   1,035 $   1,194
    Interest $   523,061  $    534,238
 
Non-cash transactions:        
  Notes payable issued in exchange for existing notes payable $ -0-  $  350,000
  Restricted stock issuance/(forfeiture) $ -0-  $   (2,834)
  Common stock issued for the purchase of Acuity software  $  500,000  $  -0-
  Capital expenditures funded by capital lease borrowing $ 359,603  $  -0-
           

About OmniComm Systems, Inc

OmniComm Systems, Inc. is a leading strategic software solutions provider to the life sciences industry. OmniComm is dedicated to helping the world's pharmaceutical, biotechnology, contract research organizations, diagnostic and device firms, and academic medical centers maximize the value of their clinical research investments. Through the use of innovative and progressive technologies, these organizations drive efficiency in clinical development, better manage their risks, ensure regulatory compliance and manage their clinical operations performance. With an extensive global experience from more than 6,000 clinical trials, OmniComm provides comprehensive solutions for clinical research. Please visit www.omnicomm.com for more information.

Trademarks
OmniComm, TrialMaster, TrialOne, IRTMaster and Promasys are registered trademarks of OmniComm Systems, Inc. Other names may be trademarks of their respective owners.

Contact Info
Investor Relations                                                                                
OmniComm Systems, Inc.
+1.954.473.1254
invrel@omnicomm.com

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