Delaware
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1-10185
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26-1331503
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||
(State or other jurisdiction
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(Commission
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(I.R.S. Employer
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||
of incorporation)
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File Number)
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Identification No.)
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Exhibit No.
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Description
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|
Press Release issued by the Company on August 7, 2014
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Issuer Direct Corporation
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|||
Date: August 7, 2014
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By:
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/s/ Brian R. Balbirnie
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|
Brian R. Balbirnie
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|||
Chief Executive Officer
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|||
● | Revenues increased 111% year-over-year reaching $3.6 million; |
● | Gross profit increased 112% year-over-year reaching $2.6 million; |
● | Non-GAAP earnings per share increased to $0.24 compared to $0.21 in the same period of 2013; |
● | Cash increased to $2.2 million at June 30, 2014 compared to $1.7 million at the end of 2013; the ninth consecutive quarter of positive cash flows from operations. |
Six Months ended June 30, 2014 Financial Highlights Include: | |
● | Revenues increased 128% year-over-year, reaching $7.1 million; |
● | Gross profit increased 126% year-over-year reaching $5.0 million; |
● | Non-GAAP earnings per share increased to $0.43 compared to $0.34 in the same period of 2013. |
Three Months ended June 30,
|
||||||||
2014
|
2013
|
|||||||
Amount
|
Amount
|
|||||||
Net income:
|
$
|
68,023
|
$
|
364,681
|
||||
Adjustments:
|
||||||||
Depreciation and amortization
|
280,767
|
32,588
|
||||||
Interest expense (income)
|
360,676
|
(2,545
|
)
|
|||||
Income tax expense (benefit)
|
(49,631
|
)
|
251,000
|
|||||
EBITDA:
|
$
|
659,835
|
$
|
645,724
|
Six Months ended June 30,
|
||||||||
2014
|
2013
|
|||||||
Amount
|
Amount
|
|||||||
Net income:
|
$
|
31,081
|
$
|
580,219
|
||||
Adjustments:
|
||||||||
Depreciation and amortization
|
562,633
|
67,523
|
||||||
Interest expense (income)
|
722,731
|
(2,299
|
)
|
|||||
Income tax expense
|
379
|
403,000
|
||||||
EBITDA:
|
$
|
1,316,824
|
$
|
1,048,443
|
Three Months ended June 30,
|
||||||||||||||||
2014
|
2013
|
|||||||||||||||
Amount
|
Per diluted share
|
Amount
|
Per diluted share
|
|||||||||||||
Net income (loss):
|
$
|
68,023
|
$
|
0.03
|
$
|
364,681
|
$
|
0.18
|
||||||||
Adjustments:
|
||||||||||||||||
Amortization of intangible assets (1)
|
230,018
|
0.11
|
24,333
|
0.01
|
||||||||||||
Stock based compensation (2)
|
110,552
|
0.05
|
89,824
|
0.04
|
||||||||||||
Integration and acquisition costs (3)
|
45,225
|
0.02
|
-
|
-
|
||||||||||||
Non-cash interest expense (4)
|
312,500
|
0.15
|
-
|
-
|
||||||||||||
Tax impact of adjustments (5)
|
(265,352
|
)
|
(0.12
|
)
|
(43,379
|
)
|
(0.02
|
)
|
||||||||
Non-GAAP net income:
|
$
|
500,966
|
$
|
0.24
|
$
|
435,459
|
$
|
0.21
|
||||||||
Six Months ended June 30,
|
||||||||||||||||
2014
|
2013
|
|||||||||||||||
Amount
|
Per diluted share
|
Amount
|
Per diluted share
|
|||||||||||||
Net income (loss):
|
$
|
31,081
|
$
|
0.02
|
$
|
580,219
|
$
|
0.28
|
||||||||
Adjustments:
|
||||||||||||||||
Amortization of intangible assets (1)
|
460,126
|
0.22
|
51,167
|
0.03
|
||||||||||||
Stock based compensation (2)
|
210,183
|
0.10
|
156,093
|
0.08
|
||||||||||||
Integration and acquisition costs (3)
|
111,797
|
0.05
|
-
|
-
|
||||||||||||
Non-cash interest expense (4)
|
625,000
|
0.30
|
-
|
-
|
||||||||||||
Tax impact of adjustments (5)
|
(534,700
|
)
|
(0.26
|
)
|
(78,759
|
)
|
(0.05
|
)
|
||||||||
Non-GAAP net income:
|
$
|
903,487
|
$
|
0.43
|
$
|
708,720
|
$
|
0.34
|
||||||||
(1) The adjustments represent the amortization of intangible assets related to acquired assets and companies.
|
||||||||||||||||
(2) The adjustments represent stock-based compensation expense recognized related to awards of stock options or common stock in exchange for services.
|
||||||||||||||||
(3) The adjustments represent legal fees, consulting fees, integration costs, and other non-recurring cost incurred in connection with the acquisition of PrecisionIR Group, Inc.
|
||||||||||||||||
(4) The adjustment represents the amortization of debt-discount that was created as a result of a beneficial conversion feature that was embedded in a note payable that the Company issued in order to finance the acquisition of PrecisionIR Group, Inc. The amortization of the debt discount is recorded as non-cash interest expense and has no impact on the cash flows or operations of the Company.
|
||||||||||||||||
(5) This adjustment gives effect to the tax impact of all non-GAAP adjustments at a rate of 38%, which approximates the Company's state and federal tax rates.
|
June 30,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 2,160,993 | $ | 1,713,479 | ||||
Accounts receivable, (net of allowance for doubtful accounts of $477,088 and $429,509, respectively)
|
2,627,879 | 1,970,531 | ||||||
Deferred income tax asset – current
|
25,843 | 25,843 | ||||||
Other current assets
|
243,185 | 160,756 | ||||||
Total current assets
|
5,057,900 | 3,870,609 | ||||||
Furniture, equipment and improvements, net
|
242,098 | 297,577 | ||||||
Goodwill
|
1,056,873 | 1,056,873 | ||||||
Intangible assets (net of accumulated amortization of $1,043,400 and $582,871, respectively)
|
3,552,601 | 4,013,129 | ||||||
Other noncurrent assets
|
46,022 | 22,351 | ||||||
Total assets
|
$ | 9,955,494 | $ | 9,260,539 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 409,371 | $ | 267,637 | ||||
Accrued expenses
|
694,393 | 1,553,334 | ||||||
Deferred revenue
|
1,332,289 | 1,053,401 | ||||||
Total current liabilities
|
2,436,053 | 2,874,372 | ||||||
Note payable (net of debt discount of $1,428,092 and $2,053,091, respectively)
|
1,071,908 | 446,909 | ||||||
Deferred tax liability
|
1,649,692 | 1,650,460 | ||||||
Other long term liabilities
|
132,493 | 83,063 | ||||||
Total liabilities
|
5,290,146 | 5,054,804 | ||||||
Stockholders' equity:
|
||||||||
Preferred stock, $0.001 par value, 30,000,000 shares authorized, no shares issued and outstanding as of June 30, 2014 and December 31, 2013.
|
- | - | ||||||
Common stock $0.001 par value, 100,000,000 shares authorized,
|
2,056 | 2,007 | ||||||
2,056,939 and 2,006,689 shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively.
|
||||||||
Additional paid-in capital
|
4,416,564 | 3,977,661 | ||||||
Other accumulated comprehensive loss
|
-69,485 | -59,065 | ||||||
Retained earnings
|
316,213 | 285,132 | ||||||
Total stockholders' equity
|
4,665,348 | 4,205,735 | ||||||
Total liabilities and stockholders’ equity
|
$ | 9,955,494 | $ | 9,260,539 |
For the Three Months Ended
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For the Six Months Ended
|
|||||||||||||||
June 30,
2014
|
June 30,
2013 |
June 30,
2014
|
June 30,
2013 |
|||||||||||||
Revenues
|
$ | 3,638,269 | $ | 1,723,785 | $ | 7,132,625 | $ | 3,135,013 | ||||||||
Cost of services
|
1,069,405 | 512,822 | 2,096,996 | 911,712 | ||||||||||||
Gross profit
|
2,568,864 | 1,210,963 | 5,035,629 | 2,223,301 | ||||||||||||
Operating costs and expenses:
|
||||||||||||||||
General and administrative
|
1,003,611 | 386,666 | 2,289,864 | 795,268 | ||||||||||||
Sales and marketing
|
905,418 | 178,573 | 1,428,941 | 379,590 | ||||||||||||
Depreciation and amortization
|
280,767 | 32,588 | 562,633 | 67,523 | ||||||||||||
Total operating costs and expenses
|
2,189,796 | 597,827 | 4,281,438 | 1,242,381 | ||||||||||||
Net operating income
|
379,068 | 613,136 | 754,191 | 980,920 | ||||||||||||
Other income (expense):
|
||||||||||||||||
Interest income (expense), net
|
(360,676 | ) | 2,545 | (722,731 | ) | 2,299 | ||||||||||
Total other income (expense)
|
(360,676 | ) | 2,545 | (722,731 | ) | 2,299 | ||||||||||
Net income before taxes
|
18,392 | 615,681 | 31,460 | 983,219 | ||||||||||||
Income tax benefit (expense)
|
49,631 | (251,000 | ) | (379 | ) | (403,000 | ) | |||||||||
Net income
|
$ | 68,023 | $ | 364,681 | $ | 31,081 | $ | 580,219 | ||||||||
Income per share - basic
|
$ | 0.03 | $ | 0.19 | $ | 0.02 | $ | 0.30 | ||||||||
Income per share - fully diluted
|
$ | 0.03 | $ | 0.18 | $ | 0.02 | $ | 0.28 | ||||||||
Weighted average number of common shares outstanding - basic
|
2,042,494 | 1,950,092 | 2,039,771 | 1,946,367 | ||||||||||||
Weighted average number of common shares outstanding - fully diluted
|
2,106,837 | 2,061,718 | 2,111,699 | 2,043,926 |
For the Three Months Ended
|
For the Six Months Ended
|
|||||||||||||||
June 30,
2014
|
June 30,
2013
|
June 30,
2014
|
June 30,
2013
|
|||||||||||||
Net income
|
$ | 68,023 | $ | 364,681 | $ | 31,081 | $ | 580,219 | ||||||||
Foreign currency translation adjustment
|
(3,886 | ) | - | (10,420 | ) | - | ||||||||||
Comprehensive income
|
$ | 64,137 | $ | 364,681 | $ | 20,661 | $ | 580,219 |
ISSUER DIRECT CORPORATION
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(UNAUDITED)
|
||||||||
Six months ended
June 30,
|
||||||||
2014
|
2013
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
31,081
|
$
|
580,219
|
||||
Adjustments to reconcile net income to net cash
|
||||||||
provided by operating activities:
|
||||||||
Depreciation and amortization
|
563,036
|
|
67,523
|
|||||
Bad debt expense
|
104,929
|
81,755
|
||||||
Deferred income taxes
|
(768
|
)
|
-
|
|||||
Stock-based compensation expense
|
210,183
|
156,093
|
||||||
Non-cash interest expense
|
625,000
|
-
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Decrease (increase) in accounts receivable
|
(752,861
|
) |
(370,806
|
)
|
||||
Decrease (increase) in deposits and other current assets
|
(106,158
|
)
|
(24,594
|
)
|
||||
Increase (decrease) in accounts payable
|
137,505
|
33,088
|
||||||
Increase (decrease) in accrued expenses
|
(817,067
|
)
|
13,022
|
|||||
Increase (decrease) in deferred revenue
|
272,192
|
(48,506
|
)
|
|||||
Net cash provided by operating activities
|
267,072
|
487,794
|
||||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(47,029
|
)
|
(29,928
|
)
|
||||
Net cash used in investing activities
|
(47,029
|
)
|
(29,928
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds from exercise of stock options
|
119,015
|
64
|
||||||
Payment of dividend
|
-
|
(58,418
|
)
|
|||||
Tax benefit on stock-based compensation awards
|
109,755
|
-
|
||||||
Repayment of line of credit
|
-
|
(150,000
|
)
|
|||||
Net cash provided by (used in) financing activities
|
228,770
|
(208,354
|
)
|
|||||
Net change in cash
|
448,813
|
249,512
|
||||||
Cash - beginning
|
1,713,479
|
1,250,643
|
||||||
Currency translation adjustment
|
(1,299
|
)
|
-
|
|||||
Cash - ending
|
$
|
2,160,993
|
$
|
1,500,155
|
||||
Supplemental disclosure for non-cash investing and financing activities
|
$
|
100,000
|
$
|
2,364
|
||||
Cash paid for interest
|
$
|
556,600
|
$
|
382,314
|
||||
Cash paid for income taxes
|