|By Marketwired .||
|December 31, 2012 06:30 AM EST||
COSTA MESA, CA -- (Marketwire) -- 12/31/12 -- ISC8® Inc. (OTCBB: ISCI) ("ISC8" or the "Company"), a provider of intelligent cybersecurity solutions, today reported audited operating results for its fiscal 2012 year ended September 30, 2012.
"With 2012 behind us, we believe we have completed the majority of our transformation work and are now in an execution phase," said Bill Joll, President and CEO of ISC8, Inc. "Our Cyber adAPT product has received a very positive response from almost a dozen marquee names requesting trials, and our global business pipeline continues to build for NetFalcon and NetControl, along with our other existing products. With our strategic move to commercialization and broader suite of product offerings, we believe we are well positioned to have a more predictable recurring revenue business model and reduce our exposure to the uncertainties of Government R&D funding cycles."
Recent Business Highlights:
- 2012 was a year of further transformation for ISC8:
- Completed sale of Thermal Imaging Group
- Completed acquisition of key assets of Bivio Networks. The acquisition provided ISC8 with advanced products and technologies for Security Intelligence, Incident Response, Content Control and mitigation of Advanced Persistent Threats (APTs) in enterprise, service provider and government networks.
- ISC8 purchased the NetFalcon and Network Content Control System business units of Bivio Networks, including all related intellectual property, sales, engineering, managerial, and other operational resources.
- In addition, ISC8 acquired an installed base of nine customers, including leading Tier 1 service providers, enterprises and government agencies worldwide.
- The acquisition is expected to accelerate the growth of ISC8's cybersecurity business by adding these existing customer accounts, Bivio's significant sales pipeline, a receivables backlog, an installed base and a global sales force.
- ISC8 now has three Cybersecurity products:
- Cyber adAPT capable of detecting targeted attacks such as APTs (with beta trials beginning in January 2013)
- Cyber NetFalcon capable of identifying perpetrators (currently available), and
- Cyber NetControl capable of providing more user control and security to service operators, such as Mobile Carriers (currently available).
- The acquisition expanded ISC8's reach globally with the addition of employees in Europe, Middle East and Asia.
- ISC8 announced earlier this month that a Middle Eastern service provider selected its Cyber NetControl (formerly known as Bivio's Network Content Control System - NCCS), a carrier grade, policy-based content control and traffic enforcement solution to provide advanced parental control functionality to their subscribers. Cyber NetControl is one of the newest offerings from the Company's cybersecurity division since its acquisition of several products from Bivio Networks.
- The company's business pipeline continues to grow, although the business climate continues to be challenging with respect to the Government sector, as many agencies have pending projects on hold until there is more clarity with respect to pending US fiscal policy changes.
- The Company expects 2013 to be a year of execution, having essentially completed its transformation to commercialization, and is planning an aggressive marketing rollout of all 3 Cybersecurity products throughout 2013.
Total revenues for fiscal 2012 were $4,196,400, an approximate 19% decrease over total revenues of $5,178,300 for fiscal 2011. Net loss in fiscal 2012 was $19,668,400, as compared to a net loss of $15,762,800 in the prior fiscal year. The increase in net loss in Fiscal 2012 as compared to Fiscal 2011 was substantially attributable to lower revenue and higher total operating expense primarily driven by higher research and development costs associated with the Company's our cybersecurity products.
Excluding non-cash charges for changes in fair value of derivative liability, non-cash interest expense, stock-based compensation, depreciation and amortization and net earnings from discontinued operations, non-GAAP net loss was approximately $13.9 million in fiscal 2012, compared to non-GAAP net loss of approximately $10.4 million in fiscal 2011. See "Use of Non-GAAP Financial Information" below for important information regarding the Company's use of non-GAAP financial measures.
Use of Non-GAAP Financial Information - ISC8 reports net loss in accordance with accounting principles generally accepted in the United States ("GAAP") and also on a non-GAAP basis. The Company's presentation of non-GAAP net loss in this press release excludes the impact of changes in fair value of derivative liability, non-cash interest expense, stock-based compensation, depreciation and amortization expense and net earnings from discontinued operations. Stock-based compensation expense primarily includes the impact of stock options issued by the Company and stock contributions to the employees' retirement plan. A reconciliation of these GAAP and non-GAAP financial measures for all periods presented is found in the attached "Unaudited Reconciliation of Non-GAAP Adjustments."
ISC8 believes that the presentation of non-GAAP net loss provides useful supplemental information to management and investors regarding financial and business trends related to the Company's financial condition and results of operations. The Company also believes that examination of non-GAAP net loss can facilitate consistency and comparability among and between prior periods, as well as comparison with other companies that present similar non-GAAP financial measures. However, the Company's presentation of non-GAAP information is not necessarily equivalent to non-GAAP measures presented by other reporting companies and should be considered in that context. The Company's management generally uses non-GAAP loss to evaluate the Company's operating performance because management believes that the exclusion of the non-cash items described above provides insight into the Company's core ongoing operating results, particularly from a cash generation or use perspective, and underlying business trends affecting the Company's performance. ISC8 has chosen to provide this non-GAAP information to investors to enable them to perform additional analyses of past, present and future operating performance and as a supplemental means to evaluate the Company's ongoing core operations. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
For more information on ISC8 and its products, visit www.ISC8.com.
ISC8 is actively engaged in the development and sale of intelligent cybersecurity solutions for commercial and government environments worldwide. ISC8's Cyber products are aimed at detecting next-generation malware and Advanced Persistent Threats (APTs). ISC8 provides hardware, software and service offerings for Malware Threat Detection leveraging its history in anti-tamper, secure memories, high-speed processors, and miniaturized sensors - all technologies it has developed. ISC8 was founded in 1974 and is headquartered in Costa Mesa, California. For more information about ISC8 visit www.isc8.com
ISC8 Inc. Consolidated Statements of Operations (Audited) Fiscal Years Ended ---------------------------- September 30, October 2, 2012 2011 ------------- ------------- Revenues Product sales $ 241,600 $ 686,900 Contract research and development revenue 3,954,800 4,491,400 ------------- ------------- Total revenues 4,196,400 5,178,300 ------------- ------------- Cost of revenues Cost of product sales 765,400 234,300 Cost of contract research and development revenue 2,383,600 4,537,400 ------------- ------------- Total cost of revenues 3,149,000 4,771,700 ------------- ------------- Gross margin 1,047,400 406,600 Operating expenses General and administrative expense 8,708,800 7,874,600 Research and development expense 7,875,600 3,171,600 ------------- ------------- Total operating expenses 16,584,400 11,046,200 ------------- ------------- Loss from operations (15,537,000) (10,639,600) Interest expense (6,581,100) (7,544,700) Change in fair value of derivative liability (4,822,100) 1,512,700 Other income (expense) 15,200 (3,400) ------------- ------------- Loss from continuing operations before provision for income taxes (26,925,000) (16,675,000) Benefit (provision) for income taxes (3,200) 37,400 ------------- ------------- Net loss from continuing operations (26,928,200) (16,637,600) Net earnings from discontinued operations 7,259,800 874,800 ------------- ------------- Net loss (19,668,400) (15,762,800) Less net loss attributable to noncontrolling interests in subsidiary -- -- ------------- ------------- Net loss $ (19,668,400) $ (15,762,800) ============= ============= Basic and diluted net loss per common share Loss from continuing operations $ (0.22) $ (0.18) ------------- ------------- Net earnings from discontinued operations $ 0.06 $ 0.01 ------------- ------------- Net loss per common share $ (0.16) $ (0.17) ============= ============= Basic and diluted weighted average number of common shares outstanding 123,624,400 90,728,100 ISC8 Inc. UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
The following non-GAAP adjustments are based upon the Company's audited consolidated statements of operations for the periods shown. These adjustments are not in accordance with or an alternative for GAAP. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. ISC8 intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance, and may change its reporting of such non-GAAP results in the future as a result of such assessment.
Fiscal Years Ended ---------------------------- September 30, October 2, 2012 2011 ------------- ------------- GAAP net loss attributable to ISC8 $ (19,668,400) $ (15,762,800) Plus: Change in fair value of derivative instrument 4,822,100 (1,512,700) Non-cash interest expense 5,877,000 4,593,000 Stock-based compensation, including employee retirement plan contributions 1,618,600 2,019,300 Depreciation and amortization 723,700 1,112,900 Net earnings from discontinued operations (7,259,800) (874,800) ------------- ------------- Non-GAAP net loss attributable to ISC8 $ (13,886,800) $ (10,425,100) ============= ============= ISC8 Inc. Consolidated Balance Sheets (Audited) September 30, October 2, 2012 2011 -------------- -------------- Assets Current assets: Cash and cash equivalents $ 1,738,400 $ 2,734,600 Accounts receivable, net of allowance for doubtful accounts of $51,300 and $13,800, respectively 445,300 562,700 Due from Vectronix, Inc. 1,200,100 - Unbilled revenues on uncompleted contracts 549,200 526,500 Prepaid expenses and other current assets 111,900 165,400 Current assets of discontinued operations - 2,786,200 -------------- -------------- Total current assets 4,044,900 6,775,400 Property and equipment, net 952,400 1,237,900 Deferred financing costs, net 963,200 1,052,300 Other assets 180,200 207,000 Non-current assets of discontinued operations - 1,312,200 -------------- -------------- Total assets $ 6,140,700 $ 10,584,800 ============== ============== Liabilities and Stockholders' Deficit Current liabilities: Accounts payable $ 814,600 $ 677,500 Accrued expenses 2,513,900 1,075,200 Advance billings on uncompleted contracts 296,700 397,200 Senior secured revolving credit facility, net of discount 4,566,800 - Senior subordinated secured convertible promissory notes, net of discount 1,119,000 - Secured promissory note - 2,097,200 Senior subordinated secured promissory notes 4,790,400 4,257,600 Settlement agreements obligations, current portion 17,200 632,200 Capital lease obligations, current portion 17,100 13,800 Current liabilities from discontinued operations - 1,744,500 -------------- -------------- Total current liabilities 14,135,700 10,895,200 Subordinated secured convertible promissory notes, net of discounts 6,470,300 3,944,800 Settlement agreement obligations, less current portion 1,400 18,700 Derivative liability 19,925,400 13,352,800 Executive salary continuation plan liability 975,000 1,005,400 Other liabilities 62,700 79,400 -------------- -------------- Total liabilities 41,570,500 29,296,300 -------------- -------------- Commitments and contingencies (Note 11) Stockholders' deficit: Convertible preferred stock, $0.01 par value, 1,000,000 shares authorized; - - Series B - 900 and 1,800 shares issued and outstanding, respectively (1); liquidation preference of $926,300 and $1,785,600, respectively Common stock, $0.01 par value, 800,000,000 and 500,000,000 shares authorized, respectively; 131,558,800 and 113,695,800 shares issued and outstanding, respectively (1) 1,315,600 1,137,000 Common stock held by Rabbi Trust (1,020,700) (1,020,700) Deferred compensation liability 1,020,700 1,020,700 Paid-in capital 174,156,800 171,385,300 Accumulated deficit (211,226,600) (191,558,200) -------------- -------------- ISC8 stockholders' deficit (35,754,200) (19,035,900) Noncontrolling interest 324,400 324,400 -------------- -------------- Total stockholders' deficit (35,429,800) (18,711,500) -------------- -------------- Total liabilities and stockholders' deficit $ 6,140,700 $ 10,584,800 ============== ==============
(1) The number of shares of preferred stock and common stock issued and outstanding have been rounded to the nearest one hundred (100)
While many app developers are comfortable building apps for the smartphone, there is a whole new world out there. In his session at @ThingsExpo, Narayan Sainaney, Co-founder and CTO of Mojio, will discuss how the business case for connected car apps is growing and, with open platform companies having already done the heavy lifting, there really is no barrier to entry.
Aug. 29, 2015 10:30 AM EDT
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
Aug. 29, 2015 10:15 AM EDT Reads: 407
SYS-CON Events announced today that G2G3 will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based on a collective appreciation for user experience, design, and technology, G2G3 is uniquely qualified and motivated to redefine how organizations and people engage in an increasingly digital world.
Aug. 29, 2015 09:30 AM EDT Reads: 426
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Aug. 29, 2015 09:30 AM EDT Reads: 836
SYS-CON Events announced today the Containers & Microservices Bootcamp, being held November 3-4, 2015, in conjunction with 17th Cloud Expo, @ThingsExpo, and @DevOpsSummit at the Santa Clara Convention Center in Santa Clara, CA. This is your chance to get started with the latest technology in the industry. Combined with real-world scenarios and use cases, the Containers and Microservices Bootcamp, led by Janakiram MSV, a Microsoft Regional Director, will include presentations as well as hands-on...
Aug. 29, 2015 09:15 AM EDT Reads: 151
Through WebRTC, audio and video communications are being embedded more easily than ever into applications, helping carriers, enterprises and independent software vendors deliver greater functionality to their end users. With today’s business world increasingly focused on outcomes, users’ growing calls for ease of use, and businesses craving smarter, tighter integration, what’s the next step in delivering a richer, more immersive experience? That richer, more fully integrated experience comes ab...
Aug. 29, 2015 08:45 AM EDT Reads: 569
SYS-CON Events announced today that Micron Technology, Inc., a global leader in advanced semiconductor systems, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Micron’s broad portfolio of high-performance memory technologies – including DRAM, NAND and NOR Flash – is the basis for solid state drives, modules, multichip packages and other system solutions. Backed by more than 35 years of tech...
Aug. 29, 2015 08:45 AM EDT Reads: 164
Everyone talks about continuous integration and continuous delivery but those are just two ends of the pipeline. In the middle of DevOps is continuous testing (CT), and many organizations are struggling to implement continuous testing effectively. After all, without continuous testing there is no delivery. And Lab-As-A-Service (LaaS) enhances the CT with dynamic on-demand self-serve test topologies. CT together with LAAS make a powerful combination that perfectly serves complex software developm...
Aug. 29, 2015 08:00 AM EDT Reads: 128
In today's digital world, change is the one constant. Disruptive innovations like cloud, mobility, social media, and the Internet of Things have reshaped the market and set new standards in customer expectations. To remain competitive, businesses must tap the potential of emerging technologies and markets through the rapid release of new products and services. However, the rigid and siloed structures of traditional IT platforms and processes are slowing them down – resulting in lengthy delivery ...
Aug. 29, 2015 07:45 AM EDT Reads: 549
As more intelligent IoT applications shift into gear, they’re merging into the ever-increasing traffic flow of the Internet. It won’t be long before we experience bottlenecks, as IoT traffic peaks during rush hours. Organizations that are unprepared will find themselves by the side of the road unable to cross back into the fast lane. As billions of new devices begin to communicate and exchange data – will your infrastructure be scalable enough to handle this new interconnected world?
Aug. 29, 2015 07:45 AM EDT Reads: 117
Skeuomorphism usually means retaining existing design cues in something new that doesn’t actually need them. However, the concept of skeuomorphism can be thought of as relating more broadly to applying existing patterns to new technologies that, in fact, cry out for new approaches. In his session at DevOps Summit, Gordon Haff, Senior Cloud Strategy Marketing and Evangelism Manager at Red Hat, discussed why containers should be paired with new architectural practices such as microservices rathe...
Aug. 29, 2015 06:00 AM EDT Reads: 370
U.S. companies are desperately trying to recruit and hire skilled software engineers and developers, but there is simply not enough quality talent to go around. Tiempo Development is a nearshore software development company. Our headquarters are in AZ, but we are a pioneer and leader in outsourcing to Mexico, based on our three software development centers there. We have a proven process and we are experts at providing our customers with powerful solutions. We transform ideas into reality.
Aug. 29, 2015 05:45 AM EDT Reads: 503
Any Ops team trying to support a company in today’s cloud-connected world knows that a new way of thinking is required – one just as dramatic than the shift from Ops to DevOps. The diversity of modern operations requires teams to focus their impact on breadth vs. depth. In his session at DevOps Summit, Adam Serediuk, Director of Operations at xMatters, Inc., will discuss the strategic requirements of evolving from Ops to DevOps, and why modern Operations has begun leveraging the “NoOps” approa...
Aug. 29, 2015 05:30 AM EDT Reads: 342
Organizations from small to large are increasingly adopting cloud solutions to deliver essential business services at a much lower cost. According to cyber security experts, the frequency and severity of cyber-attacks are on the rise, causing alarm to businesses and customers across a variety of industries. To defend against exploits like these, a company must adopt a comprehensive security defense strategy that is designed for their business. In 2015, organizations such as United Airlines, Sony...
Aug. 29, 2015 05:00 AM EDT Reads: 405
Puppet Labs has announced the next major update to its flagship product: Puppet Enterprise 2015.2. This release includes new features providing DevOps teams with clarity, simplicity and additional management capabilities, including an all-new user interface, an interactive graph for visualizing infrastructure code, a new unified agent and broader infrastructure support.
Aug. 29, 2015 03:00 AM EDT Reads: 473