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Share Name | Share Symbol | Market | Type |
---|---|---|---|
authID Inc | NASDAQ:AUID | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 7.85 | 7.00 | 12.56 | 0 | 14:06:43 |
“In the second quarter, the authID team executed a successful fund raise, debt capitalization, and cost-savings plan that helped improve our balance sheet, allowing us to focus on our mission to eliminate authentication fraud and deliver 100% Zero Trust Identity Protection,” said CEO Rhon Daguro.
“We also secured new contracts with several customers including ABM, a Fortune 500 company with over 100,000 employees. These customer wins validate strong market demand and fit for our identity verification and authentication products and represent the highest total gross BARR in sales that authID has achieved in a single quarter to date,” continued Daguro. “The authID team continues to be laser focused on achieving strong market momentum by delivering the faster, frictionless, and accurate user identity solutions on which highly secure enterprises and digital commerce will be built.”
Financial Results for the Second Quarter Ended June 30, 2023
The following highlights comprise results from continuing operations.
Please refer to Table 1 for reconciliation of net loss to Adjusted EBITDA (a non-GAAP measure).
Operational Highlights for the Second Quarter of 2023
About authID Inc.
At authID (Nasdaq: AUID), We Are Digital Identity®. authID provides secure identity verification and authentication through Verified™, an easy-to-integrate strong authentication platform. Verified combines document-based identity verification with strong FIDO2 passwordless device authentication and cloud facial biometrics to deliver identity-first cybersecurity for both workforce and consumer applications. Powered by sophisticated biometric and artificial intelligence technologies, authID establishes trusted digital identities, binds an identity to provisioned devices, and eliminates the risks of passwords to deliver the faster, frictionless, and accurate user identity solutions demanded by today’s digital ecosystem. For more information, go to www.authID.ai.
authID Media ContactGraham N. AradGeneral CounselInvestorRelations@authid.ai
Forward-Looking StatementsThis 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, 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 war in Ukraine, 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.
Non-GAAP Financial Information.
The Company provides certain non-GAAP financial measures in this statement. Please note that certain definitions of these non-GAAP financial measures have changed as compared to the non-GAAP financial measures reported in previous periods. Management believes that Adjusted EBITDA, when viewed with our results under GAAP and the accompanying reconciliations, as well as BARR and ARR provide 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. BARR and ARR are presented because management believes they provide additional information with respect to the trends in the performance of our fundamental business activities. We also rely on Adjusted EBITDA as a primary measure to review and assess the operating performance of our company and our management. 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.
We define Adjusted EBITDA as GAAP net loss adjusted to exclude: (1) interest expense, (2) interest income, (3) income tax expense, (4) depreciation and amortization, (5) stock-based compensation expense and (6) loss on debt extinguishment, 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 Three Months Ended | For theSix Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Loss from continuing operations | $ | (10,900,320 | ) | $ | (6,366,520 | ) | $ | (16,120,559 | ) | $ | (11,466,525 | ) | ||||
Addback: | ||||||||||||||||
Interest expense, net | 282,109 | 459,262 | 1,082,182 | 493,904 | ||||||||||||
Other income | (1,160 | ) | - | (1,160 | ) | (3,240 | ) | |||||||||
Loss on debt extinguishment | 380,741 | - | 380,741 | - | ||||||||||||
Conversion expense | 7,476,000 | - | 7,476,000 | - | ||||||||||||
Severance cost | - | - | 811,041 | 150,000 | ||||||||||||
Depreciation and amortization | 76,019 | 244,448 | 152,036 | 460,833 | ||||||||||||
Taxes | 3,255 | 7,316 | 3,255 | 8,100 | ||||||||||||
Non-cash recruiting fees | (54,000 | ) | - | 438,000 | - | |||||||||||
Stock compensation | 1,055,690 | 2,632,118 | 1,895,711 | 4,499,107 | ||||||||||||
Adjusted EBITDA continuing operations (Non-GAAP) | $ | (1,681,666 | ) | $ | (3,023,376 | ) | $ | (3,882,753 | ) | $ | (5,857,821 | ) | ||||
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 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 from contracts signed in the second quarter of 2023 was $239,000 and the net amount of BARR was $221,000 (after attrition), compared to $32,000 signed in the second 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 (in this case the three months ended June 2023) as determined in accordance with GAAP, multiplied by 4. The amount of ARR as of June 30, 2023 is approximately $144,000, compared to approximately $118,000 as of June 30, 2022.
BARR may be distinguished from ARR, as BARR does not take into account the time to implement any contract for Verified, nor for any ramp in adoption, or seasonality of usage of the Verified products. 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:
authID INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Verified software license | $ | 36,122 | $ | 51,409 | $ | 71,900 | $ | 86,902 | ||||||||
Legacy authentication services | 1,020 | 15,000 | 3,098 | 144,559 | ||||||||||||
Total revenues, net | 37,142 | 66,409 | 74,998 | 231,461 | ||||||||||||
Operating Expenses: | ||||||||||||||||
General and administrative | 1,924,203 | 4,026,382 | 5,200,394 | 7,669,366 | ||||||||||||
Research and development | 796,295 | 1,695,521 | 1,902,109 | 3,069,023 | ||||||||||||
Depreciation and amortization | 76,019 | 244,448 | 152,036 | 460,833 | ||||||||||||
Total operating expenses | 2,796,517 | 5,966,351 | 7,254,539 | 11,199,222 | ||||||||||||
Loss from continuing operations | (2,759,375 | ) | (5,899,942 | ) | (7,179,541 | ) | (10,967,761 | ) | ||||||||
Other Expense: | ||||||||||||||||
Other income | 1,160 | - | 1,160 | 3,240 | ||||||||||||
Interest expense, net | (282,109 | ) | (459,262 | ) | (1,082,182 | ) | (493,904 | ) | ||||||||
Loss on debt extinguishment | (380,741 | ) | - | (380,741 | ) | - | ||||||||||
Conversion expense | (7,476,000 | ) | - | (7,476,000 | ) | - | ||||||||||
Other expense, net | (8,137,690 | ) | (459,262 | ) | (8,937,763 | ) | (490,664 | ) | ||||||||
Loss from continuing operations before income taxes | (10,897,065 | ) | (6,359,204 | ) | (16,117,304 | ) | (11,458,425 | ) | ||||||||
Income tax expense | (3,255 | ) | (7,316 | ) | (3,255 | ) | (8,100 | ) | ||||||||
Loss from continuing operations | (10,900,320 | ) | (6,366,520 | ) | (16,120,559 | ) | (11,466,525 | ) | ||||||||
Gain (loss) from discontinued operations | 5,694 | (206,307 | ) | 3,439 | (407,030 | ) | ||||||||||
Gain on sale of discontinued operations | 216,069 | - | 216,069 | - | ||||||||||||
Total gain (loss) from discontinued operations | 221,763 | (206,307 | ) | 219,508 | (407,030 | ) | ||||||||||
Net loss | $ | (10,678,557 | ) | $ | (6,572,827 | ) | $ | (15,901,051 | ) | $ | (11,873,555 | ) | ||||
Net Income (Loss) Per Share – Basic and Diluted | ||||||||||||||||
Continuing operations | $ | (2.15 | ) | $ | (2.06 | ) | $ | (3.91 | ) | $ | (3.80 | ) | ||||
Discontinued operations | $ | 0.04 | $ | (0.07 | ) | $ | 0.05 | $ | (0.14 | ) | ||||||
Weighted Average Shares Outstanding – Basic and Diluted: | 5,065,556 | 3,084,226 | 4,120,849 | 3,014,854 | ||||||||||||
authID INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, | December 31, | |||||||
2023 | 2022 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash | $ | 5,981,774 | $ | 3,237,106 | ||||
Accounts receivable, net | 42,125 | 261,809 | ||||||
Other current assets | 772,943 | 729,342 | ||||||
Current assets held for sale | - | 118,459 | ||||||
Total current assets | 6,796,842 | 4,346,716 | ||||||
Other Assets | - | 250,383 | ||||||
Intangible Assets, net | 414,223 | 566,259 | ||||||
Goodwill | 4,183,232 | 4,183,232 | ||||||
Non-current assets held for sale | - | 27,595 | ||||||
Total assets | $ | 11,394,297 | $ | 9,374,185 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 1,230,707 | $ | 1,154,072 | ||||
Deferred revenue | 59,107 | 81,318 | ||||||
Current liabilities held for sale | - | 13,759 | ||||||
Total current liabilities | 1,289,814 | 1,249,149 | ||||||
Non-current Liabilities: | ||||||||
Convertible debt | 216,194 | 7,841,500 | ||||||
Accrued severance liability | 325,000 | - | ||||||
Total liabilities | 1,831,008 | 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 June 30, 2023 and December 31, 2022, respectively | 786 | 318 | ||||||
Additional paid in capital | 165,593,921 | 140,257,448 | ||||||
Accumulated deficit | (156,031,210 | ) | (140,130,159 | ) | ||||
Accumulated comprehensive (loss) income | (208 | ) | 155,929 | |||||
Total stockholders’ equity | 9,563,289 | 283,536 | ||||||
Total liabilities and stockholders’ equity | $ | 11,394,297 | $ | 9,374,185 | ||||
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