UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 16, 2015
IDI, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or Other Jurisdiction
of Incorporation)
| 333-158336 | 77-0688094 | |
| (Commission File Number) |
(I.R.S. Employer Identification No.) | |
| 2650 North Military Trail, Suite 300, Boca Raton, Florida |
33431 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
561-757-4000
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, If Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c)) |
| Item 2.02 | Results of Operations and Financial Condition. |
Item 2.02 Results of Operations and Financial Condition.
On November 16, 2015, IDI, Inc., a Delaware corporation (the “Company”), issued a press release announcing financial results for the quarter ended September 30, 2015. A copy of the press release is attached hereto as Exhibit 99.1.
The information included herein and in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial Statements and Exhibits. |
Item 9.01 Financial Statements and Exhibits.
99.1 Press Release, dated November 16, 2015
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| IDI, INC. | ||||||
| Date: November 19, 2015 | By: | /s/ Derek Dubner | ||||
| Derek Dubner | ||||||
| Co-Chief Executive Officer | ||||||
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EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Press Release of IDI, Inc., dated November 16, 2015. | |
4
Exhibit 99.1
IDI, Inc. Reports Third Quarter 2015 Results
BOCA RATON, Fla.—November 16, 2015—IDI, Inc. (NYSE MKT: IDI), an information solutions provider, today announced its financial and operating results for the third quarter ended September 30, 2015. The Company reported revenue of $1.0 million and $3.3 million from data fusion operations for the three and nine months ended September 30, 2015, respectively. The Company reported a net loss of $4.4 million (including $1.5 million of non-cash share-based compensation expenses) from data fusion operations and $0.4 million from discontinued China operations for the three months ended September 30, 2015. Cash and cash equivalents as of September 30, 2015 were $9.1 million, as compared to $6.0 million as of December 31, 2014.
Key highlights for the third quarter of 2015 include:
| • | Successful internal alpha testing of next generation data fusion technology, with expected release of the first phase of idiCORE™ in Q4 2015. |
| • | Deployment of secure, production ready cloud infrastructure to support product offerings and minimize server related Capex. |
| • | Continued acquisition of massive data sets to further fuel current and new offerings. |
| • | Rapid customer onboarding continues in anticipation of idiCORE release. |
Mr. Derek Dubner, Co-CEO of IDI, Inc. stated, “Great strides continue to be made in the development of our data fusion system. We believe this extremely sophisticated and complex data analytics platform represents next generation technology and will be instrumental in continuing IDI’s transformation into a leading information solutions provider across many industries. We expect the Company’s focus on development during 2016 strongly positions our product offerings and facilitates rapid customer acquisition and revenue growth for years to come.”
IDI is currently developing its full investigative system, idiCORE™, which is expected to begin a phased launch in Q4 2015.
About IDI, Inc.
IDI, Inc. is an information solutions provider focused on the multi-billion dollar data fusion market. IDI delivers otherwise unattainable insight into the ever-expanding universe of consumer- and business-centric data. Through proprietary linking technology, advanced systems architecture, and a massive data repository, IDI will address the rapidly growing need for actionable intelligence to support the entirety of the risk management industry, for purposes including due diligence, risk assessment, fraud detection and prevention, authentication and verification, and more. Additionally, IDI’s cross-functional core systems and processes are designed to deliver products and solutions to the marketing industry and to enable the public and private sectors to layer our solutions over their unique data sets, providing otherwise unattainable insight.
RELATED LINKS http://ididata.com/
FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 (PSLRA), which statements may be identified by words such as “expects,” “plans,” “projects,” “will,” “may,” “anticipate,” “believes,” “should,” “intends,” “estimates,” and other words of similar meaning. Such forward looking statements include statements about whether our data fusion system will be instrumental in continuing IDI’s transformation into a leading information solutions provider and whether our focus on development during 2016 will position our product offerings and facilitates rapid customer acquisition and revenue growth for years to come and whether idiCORE™ will begin a phased launched in the 2015 fourth quarter, as well as other non-historical statements about our expectations, beliefs or intentions regarding our business, technologies and products, financial condition, strategies or prospects. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on our expectations as of the date of this press release and speak only as of the date of this press release and are advised to consider the factors listed above together with the additional factors under the heading “Forward-Looking Statements” and “Risk Factors” in the Company’s Annual Report on Form 10-K, as may be supplemented or amended by the Company’s Quarterly Reports on Form 10-Q and other SEC filings. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Media and Investor Relations Contact:
David Zazoff
MDM Worldwide
Tel: (212) 643-0417
IDI@mdmworldwide.com
IDI, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
(unaudited)
| September 30, 2015 | December 31, 2014 | |||||||
| ASSETS |
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| CURRENT ASSETS |
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| Cash and cash equivalents |
$ | 9,078 | $ | 5,996 | ||||
| Accounts receivable, net |
610 | 295 | ||||||
| Prepaid expenses and other current assets |
1,193 | 190 | ||||||
| Deferred tax assets, current |
— | 95 | ||||||
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| Total current assets |
10,881 | 6,576 | ||||||
| NON-CURRENT ASSETS |
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| Property and equipment, net |
834 | 301 | ||||||
| Intangible assets, net |
3,077 | 796 | ||||||
| Goodwill |
5,227 | 5,227 | ||||||
| Other assets |
38 | 38 | ||||||
| Deferred tax assets, non-current |
— | 275 | ||||||
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| Total non-current assets |
9,176 | 6,637 | ||||||
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| Total assets |
$ | 20,057 | $ | 13,213 | ||||
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| LIABILITIES AND SHAREHOLDERS’ EQUITY |
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| CURRENT LIABILITIES |
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| Accounts payable and accrued expenses |
$ | 1,741 | $ | 890 | ||||
| Amounts due to related parties |
20 | 52 | ||||||
| Deferred revenue |
150 | 164 | ||||||
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| Total current liabilities |
1,911 | 1,106 | ||||||
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| Total liabilities |
1,911 | 1,106 | ||||||
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| SHAREHOLDERS’ EQUITY |
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| Preferred Shares—$0.0001 par value 10,000,000 shares authorized, 4,965,302 shares issued and outstanding on September 30, 2015 and December 31, 2014 |
— | — | ||||||
| Common Shares—$0.0005 par value 200,000,000 shares authorized, 15,603,286 and 6,597,155 shares issued and outstanding on September 30, 2015 and December 31, 2014, respectively |
8 | 3 | ||||||
| Additional paid-in capital |
70,644 | 12,714 | ||||||
| Accumulated deficit |
(52,506 | ) | (610 | ) | ||||
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| Total shareholders’ equity |
18,146 | 12,107 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 20,057 | $ | 13,213 | ||||
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IDI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Amounts in thousands, except share and per share data)
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2015 | 2014 (1) | 2015 | 2014 (1) | |||||||||||||
| Revenue from data fusion operations |
$ | 1,002 | $ | — | $ | 3,254 | $ | — | ||||||||
| Cost of revenues |
766 | — | 1,744 | — | ||||||||||||
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| Gross profit |
236 | — | 1,510 | — | ||||||||||||
| Operating expenses |
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| Sales and marketing expenses |
524 | — | 1,529 | — | ||||||||||||
| General and administrative expenses |
4,235 | 16 | 9,783 | 16 | ||||||||||||
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| Loss from operations |
(4,523 | ) | (16 | ) | (9,802 | ) | (16 | ) | ||||||||
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| Other income/(expense) |
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| Interest expense, net |
(3 | ) | — | (3 | ) | — | ||||||||||
| Other expense, net |
— | (32 | ) | — | (32 | ) | ||||||||||
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| Total other expense |
(3 | ) | (32 | ) | (3 | ) | (32 | ) | ||||||||
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| Loss from continuing operations before income taxes |
(4,526 | ) | (48 | ) | (9,805 | ) | (48 | ) | ||||||||
| Income taxes |
(124 | ) | (16 | ) | 141 | (16 | ) | |||||||||
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| Net loss from continuing operations |
(4,402 | ) | (32 | ) | (9,946 | ) | (32 | ) | ||||||||
| Discontinued operations |
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| Pretax income/(loss) from operations of discontinued operations |
26 | — | (1,236 | ) | — | |||||||||||
| Pretax gain/(loss) on disposal of discontinued operations |
376 | — | (41,095 | ) | — | |||||||||||
| Income taxes |
— | — | (127 | ) | — | |||||||||||
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| Net income/(loss) from discontinued operations |
402 | — | (42,458 | ) | — | |||||||||||
| Less: Non-controlling interests |
789 | — | (508 | ) | — | |||||||||||
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| Net loss from discontinued operations attributable to IDI, Inc. |
(387 | ) | — | (41,950 | ) | — | ||||||||||
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| Net loss |
$ | (4,789 | ) | $ | (32 | ) | $ | (51,896 | ) | $ | (32 | ) | ||||
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| Loss per share |
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| Basic and diluted |
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| Continuing operations |
$ | (0.29 | ) | $ | — | $ | (0.82 | ) | $ | — | ||||||
| Discontinued operations |
(0.03 | ) | — | (3.45 | ) | — | ||||||||||
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| $ | (0.32 | ) | $ | — | $ | (4.27 | ) | $ | — | |||||||
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| Weighted average number of shares outstanding - |
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| Basic and diluted |
15,034,224 | 6,597,155 | 12,167,469 | 6,597,155 | ||||||||||||
| Comprehensive loss: |
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| Net loss |
$ | (4,789 | ) | $ | (32 | ) | $ | (51,896 | ) | $ | (32 | ) | ||||
| Foreign currency translation adjustment |
130 | — | — | — | ||||||||||||
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| Net comprehensive loss |
$ | (4,659 | ) | $ | (32 | ) | $ | (51,896 | ) | $ | (32 | ) | ||||
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| (1) | As IDI Holdings, LLC, the accounting acquirer of the merger consummated effective as of March 21, 2015, was incorporated on September 22, 2014, the comparative figures for the corresponding periods in 2014 were from the date of inception through September 30, 2014. |
IDI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands, except share data)
(unaudited)
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2015 | 2014 (1) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
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| Net loss |
$ | (51,896 | ) | $ | (32 | ) | ||
| Less: Loss from discontinued operations, net of tax |
(41,950 | ) | — | |||||
| Adjustments to reconcile net loss to net cash used in operating activities: |
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| Depreciation and amortization |
133 | — | ||||||
| Share-based compensation |
3,424 | — | ||||||
| Change in allowance for doubtful accounts |
(37 | ) | — | |||||
| Deferred income tax expenses |
370 | — | ||||||
| Changes in assets and liabilities of continuing operations, net of the effects of acquisition: |
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| Accounts receivable |
(278 | ) | — | |||||
| Prepaid expenses and other current assets |
(601 | ) | (16 | ) | ||||
| Accounts payable and accrued expenses |
274 | 48 | ||||||
| Amounts due to related parties |
(46 | ) | — | |||||
| Deferred revenue |
(14 | ) | — | |||||
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| Cash used in operating activities from continuing operations |
(6,721 | ) | — | |||||
| Cash used in operating activities from discontinued operations |
(337 | ) | — | |||||
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| Net cash used in operating activities |
(7,058 | ) | — | |||||
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| CASH FLOWS FROM INVESTING ACTIVITIES |
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| Purchase of property and equipment |
(626 | ) | — | |||||
| Capitalized costs of intangible assets |
(2,082 | ) | — | |||||
| Proceeds from acquisition |
3,569 | — | ||||||
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| Cash provided by investing activities from continuing operations |
861 | — | ||||||
| Cash used in investing activities from discontinued operations |
(121 | ) | — | |||||
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| Net cash provided by investing activities |
740 | — | ||||||
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| CASH FLOWS FROM FINANCING ACTIVITIES |
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| Proceeds from capital contribution |
9,400 | 2,238 | ||||||
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| Net cash provided by financing activities |
9,400 | 2,238 | ||||||
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| Net increase in cash and cash equivalents |
$ | 3,082 | $ | 2,238 | ||||
| Cash and cash equivalents at beginning of period |
5,996 | — | ||||||
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| Cash and cash equivalents at end of period |
$ | 9,078 | $ | 2,238 | ||||
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| SUPPLEMENTAL DISCLOSURE INFORMATION |
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| Cash paid for interest |
$ | (3 | ) | $ | — | |||
| Cash paid for income taxes |
$ | — | $ | — | ||||
| Share-based compensation expenses capitalized as intangible assets |
$ | 239 | $ | — | ||||
| Stock issuance for acquisition |
$ | 44,112 | $ | — | ||||
| (1) | As IDI Holdings, LLC, the accounting acquirer of the merger consummated effective as of March 21, 2015, was incorporated on September 22, 2014, the comparative figures for the corresponding period in 2014 were from the date of inception through September 30, 2014. |