Intellinetics, Inc. Reports First Quarter Results

Record Quarterly Software as a Service;

Continued Strong Cash Flow

COLUMBUS, OH, May 16, 2022 (GLOBE NEWSWIRE) -- Intellinetics, Inc. (OTCQB: INLX), a digital transformation solutions provider, announced financial results for the three months ended March 31, 2022.

2022 First Quarter Financial Highlights

  • Total Revenue increased 3% from the same period in 2021.
  • Software as a Service Revenue increased 33% from the same period in 2021.
  • Net Loss of $20,126, compared to Net Income of $842,772 from the same period in 2021.
    • Q1 2021 included other income of $845,083 for forgiveness of the PPP loan and interest.
    • Q1 2022 included $70,051 of transaction costs.
  • Adjusted EBITDA increased 18% to $421,300, compared to $356,165 from the same period in 2021.

Summary – 2022 First Quarter Results
Revenues for the three months ended March 31, 2022 were $2,703,512 as compared with $2,635,219 for the same period in 2021. The increase in our software and software-as-a-service revenues more than offset a decrease in professional services, primarily COVID driven, and a decrease in storage and retrieval revenues, due to unfavorable comparisons to one-time shredding projects in 2021. Intellinetics reported a net loss of $20,126 for the three months ended March 31, 2022 compared to a net income of $842,772 for the same period in 2021. The net loss was the result of transaction costs of $70,051 in 2022 (none in 2021), expended in support of our acquisition on April 1, 2022. In addition, the difference in first quarter year-over-year results was primarily because of the gain on extinguishment of debt of $845,083 from the full forgiveness of our PPP loan during the three months ended March 31, 2021. Correspondingly, net loss per basic and diluted share were both $0.01 for the three months ended March 31, 2022, compared to $0.30 and $0.27, respectively, for the three months ended March 31, 2021.

2022 Other Highlights

  • On April 1, 2022 we completed the acquisition of Yellow Folder, LLC. This acquisition more than doubles our SAAS revenues, adds positive cash flow, and approximately doubles our customer count in the K-12 education market.
  • Simultaneously, we completed $8.7 million in equity and debt financing.

James F. DeSocio, President & CEO of Intellinetics, stated, “We achieved our goal of improved revenue numbers from Q1 of 2021 to Q1 of 2022, despite the renewed COVID headwinds we faced in the fourth quarter of 2021 and first quarter of 2022. For the first quarter of 2022 we beat our software as a service goal. For the ninth straight quarter we showed positive Adjusted EBITDA and have surpassed $300,000 of positive Adjusted EBITDA for the seventh straight quarter. This has been a very good quarter for Intellinetics despite the many challenges we have faced with COVID, hiring employees and the onset of inflationary pressures.

“Our teams continue to perform at a high level. Year-to-date, our sales team and partner program have delivered record order entry levels. We have built the largest backlog in future contract value in company history. At the time of this press release, we have signed 154 new contracts since the beginning of the year, with an estimated Total Contract Value of approximately $3.9 million, recognizable in revenue over one year or less. Twenty-six percent of these contracts were new customer logos. Last year at this time we had closed 131 contracts with an estimated Total Contract Value of approximately $2.6 million. Our success validates both our go-to-market strategy and our M&A strategy.

“After our acquisition of Yellow Folder, we now have a very strong position in the K-12 education market with over 500 customers using our Enterprise Content Management solutions. I’m excited for all our other target markets as well. Further, we’ve already begun cross-selling initiatives, where we’ve secured a document conversion scanning project from a Yellow Folder hosted customer. We are positioned for 2022 better than ever in our history. Given our recent acquisition and our strong order entry year to date, we expect to continue to grow our revenues and Adjusted EBITDA.

Conference Call
Intellinetics is holding a conference call to discuss these results on Monday, May 16, 2022, at 4:30 p.m. Eastern Time. The conference call can be accessed by dialing +1 929 205 6099 and providing passcode 84709835261#. If you are unable to participate during the live call, a replay of the conference call will be available approximately two hours after the completion of the call through May 31, 2022. To listen to the replay, the call will be archived on the company's website at

About Intellinetics, Inc.
Intellinetics, Inc., located in Columbus, Ohio, empowers organizations to manage, store and protect their important documents and data. The company offers its IntelliCloudTM content management platform, in addition to business process outsourcing (BPO), document and micrographics scanning services, and records storage. Intellinetics guides companies through the digital transformation process to reduce risk, strengthen compliance and enable anytime, anywhere access to mission critical forms and documents. From highly regulated industries like Healthcare/Human Service Providers, K-12, Public Safety, and State and Local Governments, to businesses looking to move away from paper-based processes, Intellinetics is the all-in-one, compliant, document management solution. For additional information, please visit

Cautionary Statement
Statements in this press release which are not purely historical, including statements regarding future business and growth, future revenues, future contract values, including 2022 revenues and future revenue streams from new and existing customers, 2022 Adjusted EBITDA, future cash flow, cross-selling efforts and other synergies associated with our recent acquisition of Yellow Folder and the success of our integration efforts; revenue consistency, growth and long-term value, including trends in revenue growth and mix; growth of software as a service, professional services, and maintenance revenue; market penetration; execution of Intellinetics’ business plan, strategy, direction and focus; and other intentions, beliefs, expectations, representations, projections, plans or strategies regarding future growth, financial results, and other future events are forward-looking statements. The forward-looking statements involve risks and uncertainties including, but not limited to, the risks associated with the effect of changing economic conditions including inflationary pressures, the impact of COVID-19 and related governmental actions and orders on customers, suppliers, employees and the economy and our industry, Intellinetics’ ability to execute on its business plan and strategy, customary risks attendant to acquisitions, trends in the products markets, variations in Intellinetics’ cash flow or adequacy of capital resources, market acceptance risks, the success of Intellinetics’ solutions providers, including human services, health care, and education, technical development risks, and other risks, uncertainties and other factors discussed from time to time in its reports filed with or furnished to the Securities and Exchange Commission, including in Intellinetics’ most recent annual report on Form 10-K as well as subsequently filed reports on Form 8-K. Intellinetics cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Intellinetics disclaims any obligation and does not undertake to update or revise any forward-looking statements in this press release. Expanded and historical information is made available to the public by Intellinetics on its website at or at

Joe Spain, CFO
Intellinetics, Inc.

Non-GAAP Financial Measures

Intellinetics uses non-GAAP Adjusted EBITDA and Total Contract Value as supplemental measures of our performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States (GAAP). A non-GAAP financial measure is a numerical measure of a company's financial performance that excludes or includes amounts so as to be different from the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows of a company. 

Adjusted EBITDA: Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to net income, operating income, or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities or a measure of our liquidity. Intellinetics urges investors to review the reconciliation of non-GAAP Adjusted EBITDA to the comparable GAAP Net Loss, which is included in this press release, and not to rely on any single financial measure to evaluate Intellinetics’ financial performance.

We believe that Adjusted EBITDA is a useful performance measure and is used by us to facilitate a comparison of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under GAAP can provide alone. We define “Adjusted EBITDA” as earnings before interest expense, any income taxes, depreciation and amortization expense, stock-based compensation, note conversion and note or equity offer warrant or stock expense, gain or loss on debt extinguishment, change in fair value of contingent consideration, and transaction costs.

Reconciliation of Net Loss to Adjusted EBITDA

    For the Three Months Ended March 31,  
    2022     2021  
Net (loss) income - GAAP   $ (20,126 )   $ 842,772  
Interest expense, net     112,601       113,044  
Depreciation and amortization     114,110       94,884  
Stock-based compensation     80,460       80,598  
Transaction costs     70,051       -  
Change in fair value of earnout liabilities     64,204       69,950  
Gain on extinguishment of debt     -       (845,083 )
Adjusted EBITDA   $ 421,300     $ 356,165  

Total Contract Value: Total Contract Value is a performance measure that the Company believes provides useful information to its management and investors as it allows the Company to better track the Company’s current sales performance, without any adjustment to exclude revenues that will not be earned, received, or recognized until future periods. Total Contract Value is not a substitute for total revenue. There is no GAAP measure that is comparable to Total Contract Value, so the Company has not reconciled the Total Contract Value to any GAAP measure.

We define Total Contract Value as the estimated total future revenues from contracts signed during the period. This refers to deals that have been awarded by our government and commercial customers. It presumes the future provision of all software, subscription services, and/or professional services without any termination of the contracts by either party. There can be no guarantee that all work will be completed, during any fiscal period, or that the contracts will not be terminated before all the estimated future revenues are earned, received, and/or recognized.

Condensed Consolidated Statements of Operations

    For the Three Months Ended March 31,  
    2022     2021  
Sale of software   $ 64,491     $ 9,594  
Software as a service     431,221       323,726  
Software maintenance services     336,602       340,446  
Professional services     1,587,948       1,652,463  
Storage and retrieval services     283,250       308,990  
Total revenues     2,703,512       2,635,219  
Cost of revenues:                
Sale of software     26,193       4,237  
Software as a service     91,249       76,340  
Software maintenance services     18,300       24,388  
Professional services     848,167       834,238  
Storage and retrieval services     87,766       91,112  
Total cost of revenues     1,071,675       1,030,315  
Gross profit     1,631,837       1,604,904  
Operating expenses:                
General and administrative     938,883       1,039,026  
Change in fair value of earnout liabilities     64,204       69,950  
Transaction costs     70,051       -  
Sales and marketing     352,114       290,311  
Depreciation and amortization     114,110       94,884  
Total operating expenses     1,539,362       1,494,171  
Income from operations     92,475       110,733  
Other income (expense)                
Gain on extinguishment of debt     -       845,083  
Interest expense, net     (112,601 )     (113,044 )
Total other (expense) income     (112,601 )     732,039  
(Loss) income before income taxes     (20,126 )     842,772  
Income tax benefit     -       -  
Net (loss) income   $ (20,126 )   $ 842,772  
Basic net (loss) income per share:   $ (0.01 )   $ 0.30  
Diluted net (loss) income per share:   $ (0.01 )   $ 0.27  
Weighted average number of common shares outstanding - basic     2,830,899       2,822,665  
Weighted average number of common shares outstanding - diluted     2,830,899       3,106,885  

Unaudited Condensed Consolidated Balance Sheets

    March 31,     December 31,  
    2022     2021  
Current assets:                
Cash   $ 2,172,758     $ 1,752,630  
Accounts receivable, net     898,399       1,176,059  
Accounts receivable, unbilled     473,986       444,782  
Parts and supplies, net     65,713       76,691  
Other contract assets     86,603       78,556  
Prepaid expenses and other current assets     211,087       155,550  
Total current assets     3,908,546       3,684,268  
Property and equipment, net     1,087,832       1,091,780  
Right of use assets     3,687,107       3,841,612  
Intangible assets, net     914,377       968,496  
Goodwill     2,322,887       2,322,887  
Other assets     79,293       53,089  
Total assets   $ 12,000,042     $ 11,962,132  
Current liabilities:                
Accounts payable   $ 330,270     $ 181,521  
Accrued compensation     287,044       343,576  
Accrued expenses, other     155,384       161,862  
Lease liabilities - current     635,423       616,070  
Deferred revenues     1,136,066       1,194,649  
Deferred compensation     80,662       100,828  
Earnout liabilities - current     994,527       958,818  
Notes payable - current     1,807,128       -  
Total current liabilities     5,426,504       3,557,324  
Long-term liabilities:                
Notes payable - net of current portion     -       1,754,527  
Lease liabilities - net of current portion     3,151,110       3,316,682  
Earnout liabilities - net of current portion     700,358       671,863  
Total long-term liabilities     3,851,468       5,743,072  
Total liabilities     9,277,972       9,300,396  
Stockholders’ equity:                
Common stock, $0.001 par value, 25,000,000 shares authorized; 2,831,169 and 2,823,072 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively     2,831       2,823  
Additional paid-in capital     24,377,681       24,297,229  
Accumulated deficit     (21,658,442 )     (21,638,316 )
Total stockholders’ equity     2,722,070       2,661,736  
Total liabilities and stockholders’ equity   $ 12,000,042     $ 11,962,132  

Condensed Consolidated Statements of Cash Flows

    For the Three Months Ended December 31,  
    2022     2021  
Cash flows from operating activities:                
Net (income) income   $ (20,126 )   $ 842,772  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:                
Depreciation and amortization     114,110       94,884  
Bad debt (recovery) expense     (2,097 )     (2,634 )
Parts and supplies reserve change     -       4,500  
Amortization of deferred financing costs     25,935       25,935  
Amortization of debt discount     26,666       26,666  
Amortization of right of use asset     154,505       129,560  
Stock issued for services     57,500       57,500  
Stock options compensation     22,960       23,098  
Gain on extinguishment of debt     -       (845,083 )
Change in fair value of earnout liabilities     64,204       69,950  
Changes in operating assets and liabilities:                
Accounts receivable     279,757       (260,009 )
Accounts receivable, unbilled     (29,204 )     177,371  
Parts and supplies     10,978       (593 )
Prepaid expenses and other current assets     (89,788 )     (65,309 )
Accounts payable and accrued expenses     85,739       227,897  
Lease liabilities, current and long-term     (146,219 )     (129,759 )
Deferred compensation     (20,166 )     -  
Accrued interest, current and long-term     -       442  
Deferred revenues     (58,583 )     (50,319 )
Total adjustments     496,297       (515,903 )
Net cash provided by operating activities     476,171       326,869  
Cash flows from investing activities:                
Purchases of property and equipment     (56,043 )     (231,699 )
Net cash used in investing activities     (56,043 )     (231,699 )
Net increase in cash     420,128       95,170  
Cash - beginning of period     1,752,630       1,907,882  
Cash - end of period   $ 2,172,758     $ 2,003,052  
Supplemental disclosure of cash flow information:                
Cash paid during the period for interest   $ 60,000     $ 60,000  
Cash paid during the period for income taxes   $ 1,303     $ 913  

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Source: Intellinetics, Inc.