authID Inc. (Nasdaq: AUID), a leading provider of innovative
biometric identity verification and authentication solutions, today
reported financial and operating results for the third quarter and
nine months ended September 2023.
“I am extremely pleased with the strong market momentum our
newly appointed sales team achieved in the third quarter by
securing contracts valued at $1 million in aggregate bARR,
representing more than four times the highest bARR that authID had
previously reported in a single quarter,” said Rhon Daguro, CEO of
authID. “Since our May leadership refresh, we have strengthened our
financial foundation, applied proven sales discipline to our
engagements, validated strong market demand and fit for our
biometric identity products, and delivered significant customer
wins for both workforce and consumer use-cases, across financial
services, healthcare, and the digital economy. Just recently, we
were also honored when leading industry security professionals
recognized the value of our technology by presenting the CSO50
Award to our customer ABM Industries for innovation in passwordless
biometric authentication for their more than 100,000
employees.”
Daguro continued, “Relentless phishing schemes, fraud and costly
cyberattacks unfortunately continue to plague enterprise security.
authID’s pioneering identity life-cycle platform counters these
threats by unleashing the power of biometrics to ensure cyber-savvy
enterprises “Know Who’s Behind the Device” for
every customer or employee login and transaction, without
impacting user convenience. Our customers should not have to
compromise cybersecurity and identity assurance for a frictionless
user experience. authID delivers both by eliminating any assumption
of ‘who’ is behind a device and preventing cybercriminals from
infiltrating accounts and seizing assets, all in a market-leading
700 milliseconds.”
Financial Results for the Three Months and Nine Months
Ended September 30, 2023The following highlights comprise
results from continuing operations.
- Total revenue for the three months
ended September 30, 2023 was $0.04 million, compared with total
revenue of $0.03 million for the same period in 2022. For the nine
months ended September 30, 2023, total revenue was $0.12 million,
compared with total revenue for the nine months ended September 30,
2022 of $0.26 million. Verified license revenue was unchanged at
$0.1 million for both nine-month periods.
- Operating expenses for the three
months ended September 30, 2023 declined to $3.8 million, compared
with $5.7 million for the comparable period in 2022. For the
nine-month period in 2023, operating expenses declined to $7.6
million, compared with $16.9 million for the same period last year.
The reduced expenditure reflects the Company’s cost-saving measures
taken in the first half of this year, resulting in lower headcount
costs and lower third-party vendor costs.
- Loss for the three months ended
September 30, 2023 improved to $3.7 million, of which non-cash
charges were $1.8 million, compared with $6.2 million a year ago,
of which non-cash charges were $2.9 million. For the nine-month
period in 2023, loss totaled $16.4 million, of which non-cash
charges were $10.4 million. This compared with a net loss of $17.7
million, of which $8.5 million were non-cash charges, for the
comparable period in 2022.
- Net loss per share for the three
months ended September 30, 2023 was $0.47, compared with $2.00 for
the three months ended September 30, 2022. For the nine months
ended September 30, 2023, net loss per share totaled $3.05,
compared with a net loss per share of $5.80 for the comparable
period a year ago.
- Adjusted EBITDA loss for the three
months ended September 30, 2023 declined to $2.1 million, compared
with $3.3 million for the three months ended September 30, 2022.
For the nine months ended September 30, 2023, Adjusted EBITDA loss
was $6.0 million, compared with $9.1 million, for the comparable
period a year ago.
- The gross and net amount of bARR
signed in the third quarter of 2023 was $1.0 million compared to
$0.04 million of bARR signed in the third quarter of 2022. The
gross and net amount of bARR also increased quarter over quarter
from $0.2 million signed in the second quarter of 2023.
- In July the Company completed a
complete a 1-for-8 reverse stock split of its common stock. The
impact of this change in capital structure has been retroactively
applied to all periods presented herein.
Refer to Table 1 for reconciliation of net loss to Adjusted
EBITDA (a non-GAAP measure).
Highlights for the Third Quarter of
2023
- Signed new customer contracts valued
at $1 million in aggregate Booked Annual Recurring Revenue or bARR
(as defined below), representing more than four times the highest
total gross bARR that authID had previously reported in a single
quarter. Contracts signed included:
- A multi-national money remittance
and lending services company using authID’s biometric platform for
identity verification,
- A digital bank leveraging authID to
secure online account opening,
- A healthcare services provider
validating the identity of incoming patients.
- authID was also successful in
signing several renewals with existing customers, which are not
counted towards bARR.
- Appointed Ed Sellitto as CFO. Ed
brings over fifteen years of experience in revenue optimization and
financial operations roles supporting high-growth B2B, SaaS
organizations to build and optimize their go-to-market
operations.
- Appointed Greg Manship, Dale Daguro,
and Jeff Scheidel as Vice Presidents of Sales who bring deep
understanding of the identity market and impressive track records
of developing high-performing sales teams to capitalize on the
strong demand for secure and reliable biometric authentication
solutions.
- Renewed our ISO 27001:2013
Certification for Information Security Management Systems (ISMS),
providing independent validation that authID has met a rigorous
framework of security management standards for ensuring the
confidentiality, integrity, and availability of its biometric
authentication platform.
Today’s Webcast
The Company will host a webcast today at 5:30 p.m. EST to
discuss the financial results and provide a corporate update. To
join the webcast, investors must register here: authID Q3 Results
Webcast Registration.
Please note that the webcast will use the Zoom Events platform.
Participants are advised to pre-register with a validated email
address OR your existing Zoom account. Registrants will receive a
confirmation email and calendar notice to add the meeting to your
calendar. During the call, attendees will be invited to submit
questions through the Q&A option in the Zoom Meeting
portal.
A replay of the event and a copy of the presentation will also
be available for 90 days via authID’s Investor Relations news and
events web page at:
https://investors.authid.ai/news-and-events/events-and-presentations
About authID
authID (Nasdaq: AUID) ensures cyber-savvy
enterprises “Know Who’s Behind the Device” for
every customer or employee login and transaction. Through
its easy-to-integrate, patented, biometric identity platform,
authID quickly and accurately verifies a user’s identity,
eliminating any assumption of ‘who’ is behind a device and
preventing cybercriminals from taking over accounts. authID
combines digital onboarding, FIDO2 login, and biometric
authentication and account recovery, with a fast, accurate,
user-friendly experience – delivering identity verification in
700ms. Establishing a biometric root of trust for each user
that is bound to their accounts and provisioned
devices, authID stops fraud at onboarding, eliminates password
risks and costs, and provides the faster, frictionless, and
more accurate user identity experience demanded by
operators of today’s digital ecosystems. For more
information, visit authID.ai.
Forward-looking Statements
This Press Release includes “forward-looking statements.” All
statements other than statements of historical facts included
herein, including, without limitation, those regarding the future
results of operations, booked Annual Recurring Revenue (bARR),
Annual Recurring Revenue (ARR), cash flow, cash position and
financial position, business strategy, plans and objectives of
management for future operations of both authID Inc. and its
business partners, are forward-looking statements. Such
forward-looking statements are based on a number of assumptions
regarding authID’s present and future business strategies, and the
environment in which authID expects to operate in the future, which
assumptions may or may not be fulfilled in practice. Actual results
may vary materially from the results anticipated by these
forward-looking statements as a result of a variety of risk
factors, including the Company’s ability to attract and retain
customers; successful implementation of the services to be provided
under new customer contracts; the Company’s ability to compete
effectively; changes in laws, regulations and practices; changes in
domestic and international economic and political conditions, the
as yet uncertain impact of the wars in Ukraine and the Middle East,
inflationary pressures, increases in interest rates, and others.
See the Company’s Annual Report on Form 10-K for the Fiscal Year
ended December 31, 2022 filed at www.sec.gov and other documents
filed with the SEC for other risk factors which investors should
consider. These forward-looking statements speak only as to the
date of this release and cannot be relied upon as a guide to future
performance. authID expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statements contained in this release to reflect any
changes in its expectations with regard thereto or any change in
events, conditions, or circumstances on which any statement is
based.
Investor Relations Contact
Ed SellittoChief Financial
Officerinvestor-relations@authID.ai
Non-GAAP Financial Information
The Company provides certain non-GAAP financial measures in this
statement. These non-GAAP key business indicators, which include
Adjusted EBITDA, bARR and ARR should not be considered replacements
for and should be read in conjunction with the GAAP financial
measures.
Management believes that Adjusted EBITDA, when viewed with our
results under GAAP and the accompanying reconciliations, provides
useful information about our period-over-period results. Adjusted
EBITDA is presented because management believes it provides
additional information with respect to the performance of our
fundamental business activities and is also frequently used by
securities analysts, investors, and other interested parties in the
evaluation of comparable companies. We also rely on Adjusted EBITDA
as a primary measure to review and assess the operating performance
of our company and our management.
We define Adjusted EBITDA as GAAP net loss adjusted to exclude:
(1) interest expense and debt discount and debt issuance costs
amortization expense, (2) interest income, (3) provision for income
taxes, (4) depreciation and amortization, (5) stock-based
compensation expense (stock options) and (6) loss on debt
extinguishment, and conversion expense on exchange of Convertible
Notes and certain other items management believes affect the
comparability of operating results. Please see Table 1 below for a
reconciliation of Adjusted EBITDA – continuing operations to net
loss – continuing operations, the most directly comparable
financial measure calculated and presented in accordance with
GAAP.
Table 1 |
Reconciliation of Loss from continuing operations to
Adjusted EBITDA continuing operations |
|
For the |
|
|
For the |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations |
$ |
(3,715,704 |
) |
|
$ |
(6,190,347 |
) |
|
$ |
(16,397,649 |
) |
|
$ |
(17,656,872 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Addback: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
13,138 |
|
|
|
437,301 |
|
|
|
1,095,320 |
|
|
|
931,205 |
|
Other expense (income) |
|
(29,509 |
) |
|
|
42,148 |
|
|
|
(30,671 |
) |
|
|
38,908 |
|
Conversion expense |
|
- |
|
|
|
- |
|
|
|
7,476,000 |
|
|
|
- |
|
Loss on debt extinguishment |
|
- |
|
|
|
- |
|
|
|
380,741 |
|
|
|
- |
|
Severance cost |
|
22,448 |
|
|
|
- |
|
|
|
850,813 |
|
|
|
150,000 |
|
Depreciation and amortization |
|
60,416 |
|
|
|
213,049 |
|
|
|
212,450 |
|
|
|
673,882 |
|
Taxes |
|
- |
|
|
|
(7,052 |
) |
|
|
3,255 |
|
|
|
1,048 |
|
Non-cash recruiting fees |
|
- |
|
|
|
- |
|
|
|
438,000 |
|
|
|
- |
|
Stock compensation |
|
1,519,952 |
|
|
|
2,227,764 |
|
|
|
(22,949 |
) |
|
|
6,726,871 |
|
Adjusted EBITDA continuing operations (Non-GAAP) |
$ |
(2,129,259 |
) |
|
$ |
(3,277,137 |
) |
|
$ |
(5,994,690 |
) |
|
$ |
(9,134,958 |
) |
Management believes that bARR and ARR, when viewed with our
results under GAAP, provides useful information about the direction
of future growth trends of the Company’s revenues. We also rely on
bARR as one of a number of primary measures to review and assess
the sales performance of our Company and our management team in
connection with our executive compensation. The Company defines
Booked Annual Recurring Revenue or bARR, as the amount of annual
recurring revenue represented by the estimated amounts of annual
recurring revenue we believe will be earned under such contracted
orders, looking out eighteen months from the date of signing of
each customer contract. The net amount of bARR reflects the
deduction of the bARR of contracts previously included in reported
bARR, which were subject to attrition during the quarter. The gross
amount of bARR signed in the third quarter of 2023 was $1,018,000
and the net amount of bARR was $997,416 (after attrition), compared
to $40,000 of bARR signed in the third quarter of 2022.
The company defines Annual Recurring Revenue or ARR, as the
amount of recurring revenue derived from sales of our Verified
products during the last three months of the relevant period as
determined in accordance with GAAP, multiplied by four. The amount
of ARR as of September 30, 2023 was $169,476, compared to $120,092
as of September 30, 2022.
bARR may be distinguished from ARR, as bARR does not take
specifically into account the time to implement any contract for
Verified, nor for any ramp in adoption, or seasonality of usage of
the Verified products but is based on the assumption that 18 months
after signing these matters will have been generally resolved.
Furthermore, bARR is based on estimates of future revenues under
particular contracts, whereas ARR, whilst also forward looking, is
based on historical revenues recognized in accordance with GAAP
during the relevant period. bARR and ARR have limitations as
analytical tools, and you should not consider them in isolation
from, or as a substitute for, analysis of our results as reported
under GAAP. Some of these limitations are:
- bARR & ARR
should not be considered as predictors of future revenues but only
as indicators of the direction in which revenues may be trending.
Actual revenue results in the future as determined in accordance
with GAAP may be significantly different to the amounts indicated
as bARR or ARR at any time.
- bARR and ARR are to
be considered “forward looking statements” and subject to the same
risks, as other such statements (see note on “Forward Looking
Statements” below).
- bARR & ARR only
include revenues from sale of our Verified products and not other
revenues.
- bARR & ARR do
not include amounts we consider as non-recurring revenues (for
example one-off implementation fees).
AUTHID INC. AND SUBSIDIARIESCONDENSED
CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
September 30, |
|
|
September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Verified software license |
$ |
42,369 |
|
|
$ |
30,023 |
|
|
$ |
114,269 |
|
|
$ |
116,925 |
|
Legacy authentication services |
|
1,020 |
|
|
|
- |
|
|
|
4,118 |
|
|
|
144,559 |
|
Total revenues, net |
|
43,389 |
|
|
|
30,023 |
|
|
|
118,387 |
|
|
|
261,484 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
2,965,344 |
|
|
|
3,914,432 |
|
|
|
5,712,303 |
|
|
|
11,583,798 |
|
Research and development |
|
749,705 |
|
|
|
1,620,492 |
|
|
|
1,666,638 |
|
|
|
4,689,515 |
|
Depreciation and amortization |
|
60,416 |
|
|
|
213,049 |
|
|
|
212,450 |
|
|
|
673,882 |
|
Total operating expenses |
|
3,775,465 |
|
|
|
5,747,973 |
|
|
|
7,591,391 |
|
|
|
16,947,195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations |
|
(3,732,076 |
) |
|
|
(5,717,950 |
) |
|
|
(7,473,005 |
) |
|
|
(16,685,711 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
29,511 |
|
|
|
(42,148 |
) |
|
|
30,671 |
|
|
|
(38,908 |
) |
Interest expense, net |
|
(13,138 |
) |
|
|
(437,301 |
) |
|
|
(1,095,320 |
) |
|
|
(931,205 |
) |
Conversion expense |
|
- |
|
|
|
- |
|
|
|
(7,476,000 |
) |
|
|
- |
|
Loss on debt extinguishment |
|
- |
|
|
|
- |
|
|
|
(380,741 |
) |
|
|
- |
|
Other income (expense), net |
|
16,373 |
|
|
|
(479,449 |
) |
|
|
(8,921,390 |
) |
|
|
(970,113 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations before income taxes |
|
(3,715,703 |
) |
|
|
(6,197,399 |
) |
|
|
(16,394,394 |
) |
|
|
(17,655,824 |
) |
Income tax benefit (expense) |
|
- |
|
|
|
7,052 |
|
|
|
(3,255 |
) |
|
|
(1,048 |
) |
Loss from continuing
operations |
|
(3,715,703 |
) |
|
|
(6,190,347 |
) |
|
|
(16,397,649 |
) |
|
|
(17,656,872 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) from discontinued operations |
|
(1,915 |
) |
|
|
43,645 |
|
|
|
1,524 |
|
|
|
(363,385 |
) |
Gain (loss) on sale of discontinued operations |
|
- |
|
|
|
(188,247 |
) |
|
|
216,069 |
|
|
|
(188,247 |
) |
Total gain (loss) from discontinued operations |
|
(1,915 |
) |
|
|
(144,602 |
) |
|
|
217,593 |
|
|
|
(551,632 |
) |
Net loss |
$ |
(3,717,618 |
) |
|
$ |
(6,334,949 |
) |
|
$ |
(16,180,056 |
) |
|
$ |
(18,208,504 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Share - Basic and
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.47 |
) |
|
$ |
(2.00 |
) |
|
$ |
(3.05 |
) |
|
$ |
(5.80 |
) |
Discontinued operations |
$ |
(0.00 |
) |
|
$ |
(0.05 |
) |
|
$ |
0.04 |
|
|
$ |
(0.18 |
) |
Weighted Average Shares
Outstanding - Basic and Diluted: |
|
7,874,962 |
|
|
|
3,102,745 |
|
|
|
5,376,821 |
|
|
|
3,044,151 |
|
AUTHID INC. AND SUBSIDIARIESCONDENSED
CONSOLIDATED BALANCE SHEETS
|
September 30, |
|
|
December 31, |
|
|
2023 |
|
|
2022 |
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
Current Assets: |
|
|
|
|
|
Cash |
$ |
3,811,014 |
|
|
$ |
3,237,106 |
|
Accounts receivable, net |
|
48,832 |
|
|
|
261,809 |
|
Other current assets, net |
|
474,178 |
|
|
|
729,342 |
|
Deferred contract costs |
|
66,300 |
|
|
|
- |
|
Current assets held for sale |
|
- |
|
|
|
118,459 |
|
Total current assets |
|
4,400,324 |
|
|
|
4,346,716 |
|
|
|
|
|
|
|
|
|
Other Assets |
|
- |
|
|
|
250,383 |
|
Intangible Assets, net |
|
370,409 |
|
|
|
566,259 |
|
Goodwill |
|
4,183,232 |
|
|
|
4,183,232 |
|
Non-current assets held for sale |
|
- |
|
|
|
27,595 |
|
Total assets |
$ |
8,953,965 |
|
|
$ |
9,374,185 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
$ |
989,538 |
|
|
$ |
1,154,072 |
|
Deferred revenue |
|
103,052 |
|
|
|
81,318 |
|
Current liabilities held for sale |
|
- |
|
|
|
13,759 |
|
Total current liabilities |
|
1,092,590 |
|
|
|
1,249,149 |
|
Non-current Liabilities: |
|
|
|
|
|
|
|
Convertible debt |
|
220,309 |
|
|
|
7,841,500 |
|
Accrued severance liability |
|
325,000 |
|
|
|
- |
|
Total liabilities |
|
1,637,899 |
|
|
|
9,090,649 |
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (Note 10) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
Common stock, $0.0001 par value, 250,000,000 shares authorized;
7,874,962 and 3,179,789 shares issued and outstanding as of
September 30, 2023 and December 31, 2022, respectively |
|
786 |
|
|
|
318 |
|
Additional paid in capital |
|
163,613,111 |
|
|
|
140,257,448 |
|
Accumulated deficit |
|
(156,310,215 |
) |
|
|
(140,130,159 |
) |
Accumulated comprehensive income |
|
12,384 |
|
|
|
155,929 |
|
Total stockholders’ equity |
|
7,316,066 |
|
|
|
283,536 |
|
Total liabilities and stockholders’ equity |
$ |
8,953,965 |
|
|
$ |
9,374,185 |
|
Grafico Azioni authID (NASDAQ:AUID)
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Da Ago 2024 a Set 2024
Grafico Azioni authID (NASDAQ:AUID)
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Da Set 2023 a Set 2024