ID Watchdog Announces Results for Third Quarter 2013

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Nov 20, 2013, 06:05 ET

DENVER, Nov. 20, 2013 /PRNewswire/ --

Revenues from core distribution channels increased 42.0%
Total revenues increased 37.5%
Gross profit increased 139.7%

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 3rd quarter ended September 30, 2013. All amounts are in U.S. dollars.

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3rd Quarter 2013 Highlights:

Revenue: Revenue totaled $596,680 for the third quarter of 2013, an increase of $162,628, or 37.5%, from the third quarter of 2012. During the third quarter of 2013, revenue from our Employee Benefits, Tech Support and Anti-virus channels, contributed $116,504 to the total increase in revenues and revenues from the iSekurity customers, which we purchased in May 2013, contributed $97,884 to the total increase in revenues. These increases were partially offset by a $51,760 decrease in revenues from our Consumer Marketing Channel.
Gross Profit: Gross profit increased by $240,969, or 139.7%, from $172,469 during the third quarter of 2012 to $413,438 during the third quarter of 2013. The gross margin rate for the third quarter of 2013 and 2012 was 69.3% and 39.7%, 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.
Total Operating Expense: Total Operating Expense decreased by $88,759, or 13.9%, from the third quarter of 2012.
Balance Sheet: Cash and cash equivalents as of September 30, 2013 was $493,925.

ID Watchdog CEO, Michael Greene, commented, "We are pleased to report strong top line growth in the third quarter as we continue to expand the distribution of our employee benefit and our tech support channels and improve our operating and financial performance."

ID Watchdog, Inc. Consolidated Interim Condensed Statements of Operations (Unaudited)

	Three months ended September 30,		Nine months ended September 30,
	2013	2012	2013	2012

Revenue	$ 596,680	$ 434,052	$ 1,679,364	$ 1,348,429
Cost of revenue	183,242	261,583	519,809	847,312
Gross profit	413,438	172,469	1,159,555	501,117

Operating expense:
General and administrative expense	333,207	277,087	1,081,437	1,131,101
Sales and Marketing expense	163,985	235,847	407,157	449,026
Stock – based compensation expense	29,166	103,725	130,221	445,896
Depreciation and amortization expense	23,479	21,937	68,061	68,835
	549,837	638,596	1,686,876	2,094,858
Operating loss	(136,399)	(466,127)	(527,321)	(1,593,741)

Other income (expense):
Interest expense	(203,797)	(184,902)	(588,526)	(556,121)
Interest income	87	400	97	5,011
Gain (loss) on warrant liability	19,966	3,639	(79,863)	384,158
	(183,744)	(180,863)	(668,292)	(166,952)

Net loss and comprehensive loss applicable to ordinary shares	$ (320,143)	$ (646,990)	$ (1,195,613)	$ (1,760,693)
Basic and diluted net loss per share applicable to ordinary shares	$ (0.00)	$ ( 0.01)	$ (0.01)	$ (0.01)
Weighted average number of shares outstanding - basic and diluted	121,498,040	118,834,997	120,446,719	118,537,114

Consolidated Condensed Balance Sheets
			September 30, 2013		December 31, 2012
			(Unaudited)		(Unaudited)
ASSETS
Cash and cash equivalents			$	493,925	$	319,073
Accounts receivable				216,289		144,561
Prepaid expenses and other				133,868		73,466
	Total current assets			844,082		537,100
Customer agreements, net				30,859		—
Property and equipment, net				95,610		153,735
		Total Assets	$	970,551	$	690,835
LIABILITIES
Accounts payable, accrued liabilities and other			$	448,298	$	534,708
Deferred Revenue				567,741		267,056
	Total current liabilities			1,016,039		801,764
Deferred Rent				86,864		89,923
Finance lease obligations, net of current portion				34,490		44,875
Credit Facility, net				445,008		—
Series C Preferred mandatorily redeemable preferred shares, net of discount and conversion feature				3,431,437		2,892,031
Warrants liability				179,693		99,830
		Total Liabilities		5,193,531		3,928,423
		Total Shareholders' Deficit		(4,222,980)		(3,237,588)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT			$	970,551	$	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
[email protected]
www.idwatchdog.com

SOURCE ID Watchdog, Inc.