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 May 7, 2015.
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Issuer Direct Corporation
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Date: May 7, 2015
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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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Exhibit No.
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Description
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Press Release issued by the Company on May 7, 2015.
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●
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Revenues were $3.0 million, compared to $3.5 million in the same period of the prior year
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Gross margins remained at 70%
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The Company achieved EBITDA margins of 19%, consistent with the prior year
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The Company generated cash flows from operations of $1.1 million compared to $21,631 in the same period of the prior year
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Cash was $2.8 million at March 31, 2015, compared to $1.7 million at December 31, 2014
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The Company’s GAAP earnings per share was $0.10 in the first quarter of 2015, compared to a loss of $0.02 per share in the same period of 2014
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Non-GAAP net income was $417,653 or $0.18 per diluted share, compared to $409,425 or $0.20 in the same period of the prior year
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Excluding Accesswire clients, we performed work for approximately 950 clients in the first quarter of 2015, with average revenue per user (“ARPU”) just under $3,000 per client
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Direct Accesswire clients grew to 1,266 in the first quarter 2015, compared to 507 in the same period of the prior year.
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Three Months ended March 31,
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2015
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2014
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Amount
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Amount
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|||||||
Net income (loss):
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$ | 236,665 | $ | (36,942 | ) | |||
Adjustments:
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||||||||
Depreciation and amortization
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268,341 | 281,866 | ||||||
Interest expense, net
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244,850 | 362,055 | ||||||
Income tax expense (benefit)
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(163,421 | ) | 50,010 | |||||
Non-GAAP net income:
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$ | 586,435 | $ | 656,989 |
Three Months ended March 31,
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2015
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2014
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Amount
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Per diluted
share
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Amount
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Per diluted
share
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Net income (loss):
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$ | 236,665 | $ | 0.10 | $ | (36,942 | ) | $ | (0.02 | ) | ||||||
Adjustments:
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Amortization of intangible assets (1)
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246,043 | 0.10 | 230,108 | 0.11 | ||||||||||||
Stock based compensation (2)
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131,844 | 0.06 | 110,766 | 0.06 | ||||||||||||
Integration and acquisition costs (3)
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45,000 | 0.02 | 66,572 | 0.03 | ||||||||||||
Non-cash interest expense (4)
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208,335 | 0.09 | 312,500 | 0.15 | ||||||||||||
Tax impact of adjustments (5)
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(239,864 | ) | (0.10 | ) | (273,579 | ) | (0.13 | ) | ||||||||
Portion of tax benefit related to change in valuation allowance (6)
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(210,370 | ) | (0.09 | ) | - | - | ||||||||||
Non-GAAP net income:
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$ | 417,653 | $ | 0.18 | $ | 409,425 | $ | 0.20 |
(1) |
The adjustments represent the amortization of intangible assets related to acquired assets and companies.
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(2) |
The adjustments represent stock-based compensation expense recognized related to awards of stock options or common stock in exchange for services.
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(3) |
The adjustments represent legal fees, consulting fees, integration costs, and other non-recurring cost incurred in connection with the acquisitions of PrecisionIR Group, Inc. and Accesswire.
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(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.
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(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.
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(6) |
The adjustment eliminates the income tax benefit recorded in the first quarter of 2015 that was related to a partial reversal of the valuation allowance established for deferred tax assets associated with net operating losses for PrecisionIR Group, Inc. at the date of acquisition.
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March 31,
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December 31,
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2015
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2014
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(unaudited)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 2,775,258 | $ | 1,721,343 | ||||
Accounts receivable, (net of allowance for doubtful accounts of $518,223 and $460,564, respectively)
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1,638,172 | 2,013,464 | ||||||
Deferred income tax asset – current
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91,118 | 7,290 | ||||||
Other current assets
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380,314 | 311,666 | ||||||
Total current assets
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4,884,862 | 4,053,763 | ||||||
Furniture, equipment and improvements, net
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145,431 | 145,384 | ||||||
Goodwill
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2,241,872 | 2,241,872 | ||||||
Intangible assets (net of accumulated amortization of $1,763,100 and $1,517,366, respectively)
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3,487,900 | 3,733,634 | ||||||
Other noncurrent assets
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27,997 | 28,286 | ||||||
Total assets
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$ | 10,788,062 | $ | 10,202,939 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$ | 383,980 | $ | 255,615 | ||||
Accrued expenses
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1,193,973 | 1,105,122 | ||||||
Income Tax Payable
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133,023 | 135,533 | ||||||
Note payable – related party (net of debt discount of $327,062 and $535,397, respectively)
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1,339,611 | 1,131,276 | ||||||
Deferred revenue
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795,012 | 877,120 | ||||||
Total current liabilities
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3,845,599 | 3,504,666 | ||||||
Deferred tax liability
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508,330 | 633,778 | ||||||
Other long term liabilities
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49,585 | 56,733 | ||||||
Total liabilities
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4,403,514 | 4,195,177 | ||||||
Stockholders' equity:
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Preferred stock, $0.001 par value, 30,000,000 shares authorized, no shares issued and outstanding as of March 31, 2015 and December 31, 2014.
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- | - | ||||||
Common stock $0.001 par value, 100,000,000 shares authorized,
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2,318,243 and 2,316,743 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively.
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2,318 | 2,317 | ||||||
Additional paid-in capital
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5,857,312 | 5,725,470 | ||||||
Accumulated other comprehensive loss
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(39,005 | ) | (47,283 | ) | ||||
Retained earnings
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563,923 | 327,258 | ||||||
Total stockholders' equity
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6,384,548 | 6,007,762 | ||||||
Total liabilities and stockholders’ equity
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$ | 10,788,062 | $ | 10,202,939 |
For the Three Months Ended
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March 31,
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March 31,
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2015
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2014
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Revenues
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$ | 3,043,782 | $ | 3,494,356 | ||||
Cost of services
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912,877 | 1,027,591 | ||||||
Gross profit
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2,130,905 | 2,466,765 | ||||||
Operating costs and expenses:
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General and administrative
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879,782 | 1,286,253 | ||||||
Sales and marketing expenses
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566,056 | 445,612 | ||||||
Product development
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98,632 | 77,911 | ||||||
Depreciation and amortization
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268,341 | 281,866 | ||||||
Total operating costs and expenses
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1,812,811 | 2,091,642 | ||||||
Operating income
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318,094 | 375,123 | ||||||
Net interest expense
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(244,850 | ) | (362,055 | ) | ||||
Net income before income taxes
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73,244 | 13,068 | ||||||
Income tax benefit (expense)
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163,421 | (50,010 | ) | |||||
Net income (loss)
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$ | 236,665 | $ | (36,942 | ) | |||
Income (loss) per share – basic
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$ | 0.10 | $ | (0.02 | ) | |||
Income (loss) per share – fully diluted
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$ | 0.10 | $ | (0.02 | ) | |||
Weighted average number of common shares outstanding – basic
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2,317,110 | 2,016,240 | ||||||
Weighted average number of common shares outstanding – fully diluted
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2,360,540 | 2,016,240 |
Three months ended
March 31,
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2015
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2014
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Cash flows from operating activities:
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Net income (loss)
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$ | 236,665 | $ | (36,942 | ) | |||
Adjustments to reconcile net income (loss) to net cash
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provided by operating activities:
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Depreciation and amortization
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268,341 | 281,866 | ||||||
Bad debt expense
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76,937 | 104,980 | ||||||
Deferred income taxes
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(209,777 | ) | (165 | ) | ||||
Stock-based expense
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131,844 | 191,201 | ||||||
Non-cash interest expense
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208,335 | 312,500 | ||||||
Changes in operating assets and liabilities:
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Decrease (increase) in accounts receivable
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292,362 | (326,813 | ) | |||||
Decrease (increase) in deposits and prepaid assets
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(68,747 | ) | (279,751 | ) | ||||
Increase (decrease) in accounts payable
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130,102 | 26,656 | ||||||
Increase (decrease) in accrued expenses
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87,081 | (169,070 | ) | |||||
Increase (decrease) in deferred revenue
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(74,111 | ) | (82,831 | ) | ||||
Net cash provided by operating activities
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1,079,032 | 21,631 | ||||||
Cash flows from investing activities:
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Purchase of property and equipment
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(22,344 | ) | (8,134 | ) | ||||
Net cash used in investing activities
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(22,344 | ) | (8,134 | ) | ||||
Cash flows from financing activities:
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Proceeds from exercise of stock options
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- | 97,816 | ||||||
Net cash provided by financing activities
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- | 97,816 | ||||||
Net change in cash
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1,056,688 | 111,313 | ||||||
Cash – beginning
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1,721,343 | 1,713,479 | ||||||
Currency translation adjustment
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(2,773 | ) | (3,808 | ) | ||||
Cash – ending
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$ | 2,775,258 | $ | 1,820,984 | ||||
Supplemental disclosure for non-cash investing and financing activities:
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Cash paid for interest
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$ | 19,906 | $ | 50,000 | ||||
Cash paid for income taxes
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$ | 34,500 | $ | 331,000 |