GlobeNewswire Inc | Nov 8, 2021 04:05PM EST

November 08, 2021

Corporate Rebrand, Nasdaq Uplist and Verified Launch Set Stage For Growth

Management to Host Conference Call Today at 5:00 p.m. EDT

DENVER, Nov. 08, 2021 (GLOBE NEWSWIRE) -- authID.ai (www.authid.ai) [Nasdaq:AUID] (formerly Ipsidy) a leading provider of secure, mobile, biometric identity authentication, today reported financial and operational results for the third quarter ended September 30, 2021.

The Company made substantial progress during the quarter and year to date on its multi-pronged strategy to rebrand itself under the name authID.ai, and drive key product development, sales and marketing initiatives.

Our vision is to help every organization Recognise their Customers and eliminate the friction, loss of privacy and customer abandonment that comes with legacy password structures, said Tom Thimot, CEO of authID.ai. We know that businesses must defend against ever-growing cyber threats, but one-time passwords and challenge questions are vulnerable to hackers and often frustrate customers and can lead to lost business. Verified by authIDwhich captures a selfie seamlessly in a web-browser and verifies identity to a secure, cloud-biometricoffers a superior, frictionless, authentication solution.

Importantly, our successful launch of Verified as a replacement for one-time passwords (OTP) at Money 20/20 at the end of October validated our view of the meaningful market demand for authID.ais cloud-biometrics. We look forward to continuing the momentum we created at this event in conjunction with our expanded sales efforts and compelling new marketing campaigns, added Thimot.

Financial Results for the Three Months and Nine Months Ended September 30, 2021

-- Total revenue for the three and nine-month periods in 2021 was $0.5 million and $1.7 million respectively, compared with $0.5 million and $1.6 million, respectively for same periods in 2020. -- Net loss for the three and nine-month periods was $5.2 million and $10.7 million respectively, compared with a net loss before taxes for the same periods in 2020 of $1.9 million and $9.2 million, respectively. -- Basic and diluted net loss per share was $0.24 and $0.52 for the three and nine-month periods ended September 30, 2021, respectively, compared to basic and diluted net loss per share of $0.11 and $0.52 in the same periods in 2020, respectively. -- Adjusted EBITDA loss for the three and nine-month periods ended September 30, 2021 was $2.8 million and $5.4 million, respectively compared to $1.3 million and $4.1 million in the same periods in 2020, respectively. The increased adjusted EBITDA loss reflects increased investment in product management, sales and marketing and technology during the period. -- Closed a public offering of approximately $11.5 million from existing and new investors in August 2021. Cash and cash equivalents at September 30, 2021 was $9.2 million.

Please refer to Table 1 for reconciliation of net income to Adjusted EBITDA (a non-GAAP measure).

Highlights And Accomplishments For The Quarter And Subsequent Weeks

-- Rebranded the Company as authID.ai and uplisted to NASDAQ under the new ticker symbol of AUID. -- Launched Verified at Money 20/20 USA by emphasizing the importance of replacing OTPs and knowledge-based authentication (KBA) with biometric identity authentication in the cloud, and offering competitive pricing and introductory trial periods. -- Built out the senior leadership team with the addition of Peter Curtis as Chief Marketing Officer, Jeremiah Mason as Senior Vice President Product and Steven Fazio as Senior Vice President Sales. Each of these professionals bring deep industry experience and a track record of success spearheading significant growth at market-leading technology companies. -- Launched services with Hamilton Reserve Bank, a global bank on the Temenos Infinity platform, to provide the banks international clientele with a secure frictionless onboarding and passwordless banking experience. The full complement of authIDs biometric identity verification and authentication solutions are now easily available to institutions using Temenos core banking systems around the world. -- Announced that CU NextGen, a leading provider of next generation technology solutions and platforms to US-based credit unions deployed authIDs biometric identity verification solution to transform the way its credit union clients recognize their membersboth digitally and in person. CU NextGen launched its first credit union in the quarter, and plans to roll out authIDs services to additional clients across the United States. -- Continued development of innovative improvements to the authID.ai Identity as a Service (IDaaS) platform and products, with the goal of working toward a true self-service model for Verified customers.

Todays Conference Call and Webcast

Chief Executive Officer Tom Thimot, President & CTO Tripp Smith and Chief Financial Officer Stuart Stoller will host a webcast and conference call at 5.00 p.m. EST today to discuss the financial results and provide a corporate update, including discussion of authIDs recent market and product launch.

Webcast link https://edge.media-server.com/mmc/p/g7isrt3x. The slides can also be accessed via authID.ais Investor Relations web pageof the authid.ai website. Live conference call: (844) 281-3631 for U.S. and Canada and (225) 239-4724 for international callers. Conference ID: 7489358.

A replay of the conference call will be available for seven days, through November 15, at 5:00 p.m. EST, and can be accessed by dialing: (855) 859-2056 or (404) 537-3406 and using Conference ID: 7489358.

About authID.ai:

authID.ai (Nasdaq: AUID), formerly Ipsidy, provides secure, mobile, biometric identity verification software products through an easy-to-integrate Identity as a Service (IDaaS) platform. authID.ais suite of self-service biometricidentity proofingandauthentication solutions frictionlessly eliminate all usernames and passwords through a consent-based facial matching system. Powered by the most sophisticated biometric and artificial intelligence technologies, authID ultimately aims to re-establish security and trust between businesses and their customers by helping to protect sensitive personal data. For more information, go to: www.authID.ai

Forward Looking Statements

Information contained in this announcement may include forward-looking statements. All statements other than statements of historical facts included herein, including, without limitation, those regarding the financial position, business strategy, plans and objectives of management for future operations of both Ipsidy Inc. dba authID.ai and its business partners, future service launches with customers, the outcome of pilots and new initiatives and customer pipeline are forward-looking statements. Such forward-looking statements are based on a number of assumptions regarding authID.ais present and future business strategies, and the environment in which authID.ai expects to operate in the future, which assumptions may or may not be fulfilled in practice. Implementation of some or all of the new services referred to is subject to regulatory or other third party approvals. 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 risk that implementation, adoption and offering of the service by customers, consumers and others may take longer than anticipated, or may not occur at all; changes in laws, regulations and practices; changes in domestic and international economic and political conditions, the as yet uncertain impact of the Covid-19 pandemic and others. Additional risks may arise with respect to commencing operations in new countries and regions, of which AuthID.ai is not fully aware at this time. See the Companys Annual Report on Form 10-K for the Fiscal Year ended December 31, 2020 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 announcement and cannot be relied upon as a guide to future performance. authID.ai expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in its expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

Investor Relations Contacts: Grace DeFriesIna McGuinness authID.ai SVP, MarketingThe Bliss Group Communications &(805) 427-1372 Investor Relations investor-relations@authID.ai

Non-GAAP Financial Information.

The Company provides certain non-GAAP financial measures in this statement. Management believes that Adjusted EBITDA, when viewed with our results under GAAP and the accompanying reconciliations, provides 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. We also rely on Adjusted EBITDA as a primary measure to review and assess the operating performance of our company and our management team in connection with our executive compensation. These non-GAAP key business indicators, which include Adjusted EBITDA, 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) provision for income taxes, (4) depreciation and amortization, (5) stock-based compensation expense (stock options and restricted stock) and (6) certain other items management believes affect the comparability of operating results. Please see Table 1 below for a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP.

TABLE 1

Reconciliation of Net Loss to Adjusted EBITDA (A Non-GAAP Measure) (Unaudited)

For the Quarter Ended For the Nine Months Ended September30, September30, September30, September30, 2021 2020 2021 2020 Net loss $ (5,198,905 ) $ (1,918,239 ) $ (10,746,514 ) $ (9,217,108 )Add Back: Interest 25,780 212,658 579,768 701,861 ExpenseDebtextinguishment (485,762 ) - (971,522 ) 985,842 ? loss/(gain)Warrantexercise - - - 366,795 inducementexpenseSeverance cost - - - 426,175 Other expense/ (6,736 ) (16,779 ) (14,394 ) (51,445 )(income)Depreciationand 319,017 276,232 943,436 923,563 amortizationTaxes 2,974 11,074 12,516 23,540 Impairment - - - 1,035,629 lossStock 2,533,943 112,125 4,795,069 741,668 compensation AdjustedEBITDA $ (2,809,689 ) $ (1,322,929 ) $ (5,401,641 ) $ (4,063,480 )(Non-GAAP)

IPSIDY INC. AND SUBSIDIARIES

- CONDENSED CONSOLIDATED BALANCE SHEETS

September30, December31, 2021 2020 (Unaudited) ASSETS Current Assets: Cash $ 9,233,399 $ 3,765,277 Accounts receivable, net 170,291 72,986 Current portion of net investment in 78,731 72,682 direct financing leaseInventory 214,289 254,951 Other current assets 929,692 237,769 Total current assets 10,626,402 4,403,665 Property and Equipment, net 127,705 97,829 Other Assets 73,243 240,223 Intangible Assets, net 3,657,569 4,527,476 Goodwill 4,183,232 4,183,232 Net investment in direct financing lease, 362,185 422,021 net of current portionTotal assets $ 19,030,336 $ 13,874,446 LIABILITIES AND STOCKHOLDERS? EQUITY Current Liabilities: Accounts payable and accrued expenses $ 2,122,257 $ 2,665,132 Notes payable obligation, currentportion 3,126 5,947 Capital lease obligation, current portion 20,813 39,232 Convertible debt 662,000 - Deferred revenue 369,708 237,690 Total current liabilities 3,177,904 2,948,001 Capital lease obligation, net of current - 10,562 portionNotes payable, net of discounts and - 487,339 current portionConvertible debt - 5,800,976 Other liabilities - 47,809 Total liabilities 3,177,904 9,294,687 Stockholders? Equity: Common stock, $0.0001 par value,1,000,000,000 shares authorized;23,198,419 and 19,642,401 shares issued 2,319 1,964 and outstanding as of September 30, 2021and December 31, 2020, respectivelyAdditional paid in capital 124,609,145 102,651,304 Accumulated deficit (108,980,665 ) (98,234,151 )Accumulated comprehensive income 221,633 160,642 Total stockholders? equity 15,852,432 4,579,759 Total liabilities and stockholders? equity $ 19,030,336 $ 13,874,446

See notes to condensed consolidated financial statements.

IPSIDY INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Revenues: Products and $ 516,218 $ 501,700 $ 1,657,296 $ 1,587,330 servicesLease income 12,131 13,992 37,833 43,270 Total revenues, 528,349 515,692 1,695,129 1,630,600 net Operating Expenses:Cost of Sales 121,509 114,985 494,558 532,506 General and 5,331,159 1,527,723 10,308,785 5,400,639 administrativeResearch and 419,313 308,038 1,088,496 928,778 developmentImpairment loss - - - 1,035,629 Depreciationand 319,017 276,232 943,436 923,563 amortizationTotal operating 6,190,998 2,226,978 12,835,275 8,821,115 expenses Loss from (5,662,649 ) (1,711,286 ) (11,140,146 ) (7,190,515 )operations Other Expense: Warrantinducement - - - (366,795 )expenseExtinguishmentof debt - gain 485,762 - 971,522 (985,842 )(loss)Other income 6,736 16,779 14,394 51,445 Interest (25,780 ) (212,658 ) (579,768 ) (701,861 )expense,netOther income 466,718 (195,879 ) 406,148 (2,003,053 )(expense), net Loss before (5,195,931 ) (1,907,165 ) (10,733,998 ) (9,193,568 )income taxes Income Tax (2,974 ) (11,074 ) (12,516 ) (23,540 )Expense Net loss $ (5,198,905 ) $ (1,918,239 ) $ (10,746,514 ) $ (9,217,108 ) Net Loss PerShare - Basic $ (0.24 ) $ (0.11 ) $ (0.52 ) $ (0.52 )and Diluted WeightedAverage SharesOutstanding - 22,088,865 18,237,647 20,703,970 17,664,446 Basic andDiluted

See notes to condensed consolidated financial statements.

Note: Following the reverse stock split in June 2021, all per share and weighted average shares outstanding were adjusted to reflect the lower number of common stock outstanding in all periods.