Exhibit 99.1

 

 

Intellinetics, Inc. Reports First Quarter Results

 

Revenue and Channel Growth Accelerating

 

COLUMBUS, OH – (May 16, 2016) – Intellinetics, Inc. (OTCQB: INLX), an Enterprise Content Management (ECM) software company focused on cloud-based document solutions for the Small to Medium Business (SMB) market, announced financial results for the first quarter ended March 31, 2016.

 

First Quarter Highlights

1.Late in the quarter we expanded our channel sales team from one to three members and focused on in-field sales training and sales support to grow revenue.
2.Launched an automatic training portal for our channel partners for a Q2 go-live which includes:
a.Intellicloud™ sales rep certification
b.Mobile sales and marketing tools
c.Reporting and best practice feed to reps
3.Entered into a material agreement with a leading office supply company to become a reseller with a phased rollout expected to begin in Q3 after appropriate training. An experienced executive was hired to oversee that key initiative.
4.Raised $559,285 through the sale of common stock and warrants and converted $170,038 of principal and interest of convertible promissory notes into equity. We utilized the proceeds to reduce other debt by $261,500 and current payables by $181,707. The reduction in debt will reduce debt interest costs in the future periods.

 

Matthew L. Chretien, President and CEO of Intellinetics, noted that, “The Q1 numbers do not yet reflect the progress we have made and the foundation that was laid during the quarter to position the Company for accelerated growth during the balance of the year.”

 

Summary - First Quarter Results

Revenues for the three months ended March 31, 2016 were $603,391 as compared with $583,775 for the same period in 2015. The increase is primarily attributed to a significant increase in revenues from the sale of software as a service, software maintenance services, professional services, and third-party services offset by a planned reduction in our legacy software sales. Net income loss was ($535,765) for the March 31, 2016 quarter compared with ($208,857) for last years’ March quarter. Adjusted EBITDA was virtually flat at ($112,875). Net loss per share for the first quarter 2016 was ($0.03) when compared with the first quarter 2015 loss per share of ($0.03).

 

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, income taxes, depreciation and amortization expense, and other non-cash expenses such as share-based compensation, note conversion warrant expense and other financing related transaction costs.

 

-Continued-

 

 

 

 

Reconciliation of Net Loss to Adjusted EBITDA    
   For the Three Months Ended March 31, 
   2016   2015 
Net Loss - GAAP  $(535,765)  $(208,857)
Interest expense, net   138,668    95,900 
Depreciation and Amortization   2,956    3,378 
Share-based compensation   129,693    - 
Note conversion warrant expense   137,970    - 
Note conversion underwriting expense   13,603    - 
Adjusted EBITDA  $(112,875)  $(109,579)

 

IntelliCloudTM – Powered by the Intel® NUC

The Intellinetics’ IntelliCloud Program provides turnkey document workflow solutions for SMB’s through a growing network of partners who already serve them. Our partners simply attach IntelliCloud to the software, hardware, and/or services they already sell to existing customers and deliver more value to the customer and create new / recurring revenue streams for themselves…and us, all without the sales or technical complexity of other less effective options in the market.

 

Targeted Channel Strategy

Intellinetics’ is focused on IntelliCloud Program growth within three specific partner profiles:

·Office Equipment Dealers (OED) - Copier dealers who also provide value added software, service and technology services
·ECM Value Added Reseller (VAR) - Expert ECM software, hardware and service providers
·Software Solution Providers - Enterprise Resource Planning (ERP) or other software applications with proprietary IntelliCloud Integration.

 

About Intellinetics, Inc.

Intellinetics, Inc. is a Columbus, Ohio-based ECM software company. Intellinetics partnered with Intel to create the IntelliCloud Channel Program that makes it easy to add turnkey document workflow solutions to the copiers, productivity software and services they already provide. IntelliCloud provides dealers a “deploy once, use many” innovation where one IntelliCloud customer sale/activation creates endless possibilities to add other software applications that deliver more value and increase revenue. For additional information, please visit: www.intellinetics.com.

 

Cautionary Statement

Statements in this press release which are not purely historical, including statements regarding Intellinetics’ intentions, beliefs, expectations, representations, projections, plans or strategies regarding the future 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, trends in the products markets, variations in the company’s cash flow or adequacy of capital resources, market acceptance risks, technical development risks, and other risk factors. The company 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 and its Affiliates on its website or at www.intellinetics.com or at www.sec.gov.

 

CONTACT:

Terri MacInnis, VP of Investor Relations

Bibicoff + MacInnis, Inc.

818.379.8500 terri@bibimac.com

 

-Continued-

 

 

 

 

INTELLINETICS, INC. and SUBSIDIARY

Consolidated Statements of Operations

(Unaudited)

  

   For the Three Months Ended March 31, 
   2016   2015 
         
Revenues:          
Sale of software  $90,874   $190,037 
Software as a service   110,156    56,539 
Software maintenance services   246,596    228,671 
Professional services   98,176    82,238 
Third Party services   57,589    26,290 
           
Total revenues   603,391    583,775 
           
Cost of revenues:          
Sale of software   19,518    47,522 
Software as a service   24,587    10,910 
Software maintenance services   46,558    31,008 
Professional services   31,355    20,518 
Third Party services   27,442    3,579 
           
Total cost of revenues   149,460    113,537 
           
Gross profit   453,931    470,238 
           
Operating expenses:          
General and administrative   660,564    365,840 
Sales and marketing   187,508    213,977 
Depreciation   2,956    3,378 
           
Total operating expenses   851,028    583,195 
           
Loss from operations   (397,097)   (112,957)
           
Other income (expense)          
Interest expense, net   (138,668)   (95,900)
           
Total other income (expense)   (138,668)   (95,900)
           
Net loss  $(535,765)  $(208,857)

 

-Continued-

 

 

 

 

 

INTELLINETICS, INC. and SUBSIDIARY

Condensed Consolidated Balance Sheets

 

   (Unaudited)     
   March 31,   December 31, 
   2016   2015 
ASSETS          
           
Current assets:          
Cash  $1,004,441   $1,117,118 
Accounts receivable, net   271,324    217,028 
Prepaid expenses and other current assets   76,100    46,521 
           
Total current assets   1,351,865    1,380,667 
           
Property and equipment, net   19,647    22,603 
Other assets   10,285    10,285 
           
Total assets  $1,381,797   $1,413,555 
           
LIABILITIES AND STOCKHOLDERS' DEFICIT          
           
Current liabilities:          
Accounts payable and accrued expenses  $723,337   $826,864 
Deferred revenues   510,687    638,193 
Deferred compensation   215,012    215,012 
Notes payable - current   294,543    401,573 
Notes payable - related party - current   35,552    92,805 
Total current liabilities   1,779,131    2,174,447 
           
Long-term liabilities:          
Notes payable - net of current portion   694,944    782,206 
Notes payable - related party   118,161    127,409 
Deferred interest expense   144,276    136,078 
Other long-term liabilities - related parties   -    12,852 
           
Total long-term liabilities   957,381    1,058,545 
           
Total liabilities   2,736,512    3,232,992 
           
Stockholders' deficit:          
Common stock, $0.001 par value, 50,000,000 shares authorized; 16,794,992 and 14,908,712 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively   26,795    21,909 
Additional paid-in capital   12,532,694    11,537,093 
Accumulated deficit   (13,914,204)   (13,378,439)
Total stockholders' deficit   (1,354,715)   (1,819,437)
Total liabilities and stockholders' deficit  $1,381,797   $1,413,555