ID Watchdog Announces Results for Second Quarter 2013

DENVER, Aug. 29, 2013 /PRNewswire/ -- 

  • $67,513 of free cash flow generated in the second quarter of 2013
  • Revenues increased 12.3%
  • Gross profit increased 99.2%

ID Watchdog, Inc. (TSX VENTURE: IDW) (PINKSHEETS: IDWAF) ("ID Watchdog" or the "Company"), provider of consumer-facing identity theft protection and resolution services, today announced its results for the 2nd quarter ended June 30, 2013. All amounts are in U.S. dollars.

(Logo: http://photos.prnewswire.com/prnh/20130829/NY71341LOGO

2st Quarter 2013 Highlights:

  • Revenue: Revenue totaled $528,196 for the second quarter of 2013, an increase of $57,876, or 12.3%, from the second quarter of 2012.  During the second quarter of 2013, revenue from our Employee Benefits, Tech Support and Anti-virus channels, contributed $88,562 to the total increase in revenues and revenues from the iSekurity customers, which we purchased in May 2013, contributed $24,864 to the total increase in revenues.  These increases were partially offset by a $55,550 decrease in revenues from our Consumer Marketing Channel.
  • Gross Profit: Gross profit increased by $169,281, or 99.2%, from $170,601 during the second quarter of 2012 to $339,882 during the second quarter of 2013.  The gross margin rate for the second quarter of 2013 and 2012 was 64.3% and 36.3%, respectively. In the fourth quarter of 2012, we entered into a new data agreement which substantially decreased our cost of revenue beginning in January 2013.
  • General and Administrative Expense: General and administrative expense decreased by $62,415, or 14.6%, from the second quarter of 2012.
  • Balance Sheet: Cash and cash equivalents as of June 30, 2013 was $529,496.

ID Watchdog CEO, Michael Greene, commented, "We experienced solid revenue growth from our employee benefits and our tech support channels during the second quarter of 2013.  We will continue to aggressively expand these distribution channels for the balance of 2013 and we anticipate that our efforts in during 2013 will drive accelerated revenue growth in 2014." Mr. Greene continued, "In May 2013, we closed on the purchase of approximately 1,800 customers from iSekurity, Inc., which will further add to our revenue growth."

 

ID Watchdog, Inc.

Consolidated Interim Condensed Statements of Operations

(Unaudited)

 




Three months ended June 30,


Six months ended June 30,



2013


2012


2013


2012










Revenue


$ 528,196


$ 470,320


$ 1,082,684


$ 914,377

Cost of revenue


188,314


299,719


336,567


585,729

Gross profit


339,882


170,601


746,117


328,648










Operating expense:









General and administrative expense


365,326


427,741


748,230


854,013

Sales and Marketing expense


115,794


121,102


243,172


213,179

Stock – based compensation expense


43,655


110,838


101,055


342,171

Depreciation and amortization expense


22,778


22,965


44,582


46,899



547,553


682,646


1,137,039


 

1,456,262

Operating loss


(207,671)


(512,045)


(390,922)


 

(1,127,614)










Other income (expense):









Interest expense


(198,432)


(184,327)


(384,729)


 

(371,219)

Interest income


6


1,172


10


 

4,611

Gain (loss) on warrant liability


20,819


195,316


(99,829)


 

380,519



(177,607)


12,161


(484,548)


 

13,911










Net loss and comprehensive loss

applicable to ordinary shares


$ (385,278)


$ ( 499,884)


$ (875,470)


 

$ (1,113,703)

Basic and diluted net loss per share

applicable to ordinary shares


$ (0.00)


$ ( 0.00)


$ (0.01)


 

$ (0.01)

Weighted average number of shares

outstanding - basic and diluted


120,417,415


118,494,338


119,912,345


 

118,386,535

















 


Consolidated Condensed Balance Sheets





June 30,
2013



December 31,
2012





(Unaudited)



(Unaudited)



ASSETS










Cash and cash equivalents


$

529,496



$

319,073



Accounts receivable



204,797




144,561



Prepaid expenses and other



94,934




73,466




Total current assets



829,227




537,100



Customer agreements, net



32,534






Property and equipment, net



110,126




153,735




Total Assets


$

971,887



$

690,835



LIABILITIES










Accounts payable, accrued liabilities and other


$

595,781



$

534,708



Deferred Revenue



543,580




267,056




Total current liabilities



1,139,361




801,764



Deferred Rent



87,884




89,923



Finance lease obligations, net of current portion



38,060




44,875



Credit Facility



209,268






Series C Preferred mandatorily redeemable

preferred shares, net of discount and conversion

feature



3,249,658




2,892,031



Warrants liability



199,659




99,830




Total Liabilities



4,923,890




3,928,423




Total Shareholders' Deficit



(3,952,003)




(3,237,588)



TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT


$

971,887



$

690,835



































Financial information contained in this press release should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent quarterly reports and our annual report. These documents are available online at www.sedar.com and in the "Company Overview" section of our website at www.IDWatchdog.com.

About ID Watchdog, Inc.

ID Watchdog was founded in 2005 and is headquartered in Denver, Colorado. The Company provides three-tiered comprehensive monitoring, detection and resolution for identity theft. ID Watchdog proactively detects identity theft problems at their source and provides immediate resolution services to ensure complete peace of mind for individuals. All the Company's services have been developed with input from industry experts; national consumer advocacy groups; federal, state, and local law enforcement agencies; consumer protection agencies; and adhere to guidelines published by the Consumer Federation of America. For more information, please visit www.IDWatchdog.com.

Forward-Looking Statement

This news release includes certain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 which address future events and conditions which are subject to various risks and uncertainties. The actual results could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company's control. Although the Company believes that its expectations reflected in these forward-looking statements are reasonable, no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements are disclosed in the company's filings with Canadian regulators at www.sedar.com. ID Watchdog assumes no obligation to update the forward-looking statements of management beliefs, opinions, projections, or other factors should they change.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Company Contact:
ID Watchdog, Inc.
Jay B. Lewis
Chief Financial Officer
303-339-8099
InvestorRelations@idwatchdog.com
www.idwatchdog.com

SOURCE ID Watchdog, Inc.



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