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OmniComm Systems, Inc. Reports Financial Results for the Year Ending December 31, 2018

FORT LAUDERDALE, Fla., March 28, 2019 (GLOBE NEWSWIRE) -- OmniComm Systems, Inc. (OmniComm) (OMCM), a global leading provider of clinical data management technology, today announced financial results for the year ending December 31, 2018.

For the year ending December 31, 2018, OmniComm reported revenue of $27.10 million, as compared to revenue of $26.98 million for the year ending December 31, 2017. Gross margin improved by $0.50 million to $22.20 million. Operating expenses increased by $1.50 million to $19.67 million. Operating income for the year ending December 31, 2018 was $2.53 million, as compared to operating income of $3.53 million for the year ending December 31, 2017. EBITDA, a non-GAAP financial measure that OmniComm uses as an additional financial measure, was $3.27 million for the year ending December 31, 2018, as compared to EBITDA of $3.89 million for the year ending December 31, 2017.

“These results do not tell the entire story because 2018 was a year of transition for OmniComm,” said Stephen Johnson, president and CEO of OmniComm. “At first glance, it seems obvious that our financial results for 2018 were not up to our typical growth standards from the previous 10 years. That’s because we made a conscious decision to move away from perpetual licenses to a more predictable and reliable subscription license model, and that transition has had a significant short-term impact on both revenue and EBITDA. It generally takes one to two years to fully realize the benefits of this switch. Also, we invested heavily in research and product development in 2018, so that we could release three new product lines: a coding solution, a randomization and supply-tracking solution, and a comprehensive analytics platform. We believe those expenditures will be a good investment for our clients and the long-term growth of OmniComm.”

For the year ending December 31, 2018, OmniComm achieved record bookings of $37.3 million, as compared to bookings of $31.9 million for the year ending December 31, 2017. Subscription business increased by $13.8 million to $21.9 million, a 170% increase, whereas perpetual business was all but phased out, comprising only $2.9 million in 2018, as compared to $16.2 million in 2017. Perpetual licenses generally offer a much better short-term revenue benefit since they typically include a large one-time upfront license payment that allows for revenue recognition in the first year of an agreement, but with a negative long-term effect on future revenue due to much smaller annual maintenance fees which are typically only 20% of the initial license fees.

“Despite record bookings, the impact of this transition away from perpetual licenses has had an impact on our top and bottom lines,” said Kuno van der Post, Ph.D., chief commercial officer at OmniComm. “But it was the right thing to do for the long-term health of our business. We have a lot to look forward to; we’ve just had major releases in our core product lines: TrialMaster® and TrialOne®, and added three new products: IRTMaster™, AutoEncoder™ and Acuity Analytics™; we’ve opened up a new support office in Bengaluru, India, doubled the size of our team in AsiaPac, expanded our inside and external sales teams, and recently made significant enhancements to TrialMaster to better support late phase and virtual trials.”

OmniComm provides EBITDA, a non-GAAP financial measure as additional information to its financial results. Non-GAAP EBITDA excludes the impact of depreciation and amortization expenses that are included in operating income. Non-GAAP EBITDA is not an alternative or substitute for the financial measure prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) of operating income. The non-GAAP EBITDA financial measure presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define this non-GAAP financial measure in the same way. OmniComm’s management uses non-GAAP EBITDA as a measure of operational efficiency and as a goal for incentive compensation. Management believes non-GAAP EBITDA is a useful measure investors may use as an additional factor in their analysis of OmniComm’s performance. Please review the below reconciliation of the non-GAAP financial measure EBITDA to the GAAP financial measure operating income, as well as OmniComm’s financial statements as filed with the Securities and Exchange Commission.

OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES

Reconciliation of GAAP operating income to non-GAAP EBITDA

For the year ended

December 31,

2018

2017

Operating income/(loss) (GAAP)

$

2,534,177

$

3,534,150

Depreciation expense

398,654

336,102

Amortization expense

337,704

22,048

EBITDA (non-GAAP)

$

3,270,535

$

3,892,300

Forward-Looking Statements

Statements contained in this press release that are not historical facts are "forward-looking statements." These statements can often be identified by the use of forward-looking terminology such as "estimate," "project," "believe," "expect," "may," "will," "should," "intends," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. We wish to caution the reader that these forward-looking statements regarding matters that are not historical facts are only predictions and are based on information available at the time and/or management's good faith belief with respect to future events. No assurance can be given that plans for the future will be consummated or that the future results indicated, whether expressed or implied, will be achieved. While sometimes presented with numerical specificity, these plans and projections and other forward-looking statements are based upon a variety of assumptions, which we consider reasonable, but which nevertheless may not be realized. Because of the number and range of the assumptions underlying our projections and forward-looking statements, many of which are subject to significant uncertainties and contingencies that are beyond our reasonable control, some of the assumptions inevitably will not materialize, and unanticipated events and circumstances may occur subsequent to the date of this press release. Therefore, our actual experience and results achieved during the period covered by any particular projections or forward-looking statements may differ substantially from those projected. Consequently, the inclusion of projections and other forward-looking statements should not be regarded as a representation by us or any other person that these plans will be consummated or that estimates and projections will be realized, and actual results may vary materially. There can be no assurance that any of these expectations will be realized or that any of the forward-looking statements contained herein will prove to be accurate. Forward-looking statements speak only as of the date the statement was made. OmniComm does not undertake any obligation to update or revise any forward-looking statement made by it or on its behalf, whether as a result of new information, future events or otherwise.

OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the year ended

December 31,

2018

2017

Revenues

$

26,129,229

$

26,067,933

Reimbursable revenues

975,251

911,725

Total revenues

27,104,480

26,979,658

Cost of goods sold

4,284,588

4,394,918

Reimbursable expenses-cost of goods sold

617,509

885,972

Total cost of goods sold

4,902,097

5,280,890

Gross margin

22,202,383

21,698,768

Operating expenses

Salaries, benefits and related taxes

14,094,550

13,200,837

Rent and occupancy expenses

1,254,087

1,125,147

Consulting services

298,097

321,472

Legal and professional fees

477,102

533,221

Travel

856,187

986,092

Telephone and internet

153,540

152,926

Selling, general and administrative

1,676,869

1,356,427

Bad debt expense

41,782

130,346

Intangible asset impairment

79,634

-0-

Depreciation expense

398,654

336,102

Amortization expense

337,704

22,048

Total operating expenses

19,668,206

18,164,618

Operating income/(loss)

2,534,177

3,534,150

Other income/(expense)

Interest expense, related parties

(935,839)

(947,688)

Interest expense

(406,145)

(419,432)

Interest income

21

593

Change in derivative liabilities

3,111,760

795,779

Transaction gain/(loss)

(125,794)

5,010

Income/(loss) before income taxes

4,178,180

2,968,412

Income tax (expense)

(490,215)

(1,194)

Net income/(loss) attributable to common stockholders

$

3,687,965

$

2,967,218

Net income/(loss) per share

Basic

$

0.02

$

0.02

Diluted

$

0.02

$

0.02

Weighted average number of shares outstanding

Basic

150,832,451

147,865,246

Diluted

164,618,868

148,177,984


OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2018

December 31, 2017

ASSETS

CURRENT ASSETS

Cash

$

1,440,524

$

1,176,551

Accounts receivable, net of allowance for doubtful accounts of $176,220 and $149,980, respectively

6,175,277

7,492,597

Prepaid expenses

384,212

297,131

Other current assets

5,204

11,463

Total current assets

8,005,217

8,977,742

Property and equipment, net

1,360,315

552,538

Other assets

Intangible assets, net

730,835

97,925

Other assets

131,847

46,714

TOTAL ASSETS

$

10,228,214

$

9,674,919

LIABILITIES AND SHAREHOLDERS' (DEFICIT)

CURRENT LIABILITIES

Accounts payable and accrued expenses

$

2,070,158

$

2,586,045

Convertible notes payable, current portion

-0-

50,000

Deferred revenue, current portion

6,457,319

7,564,587

Capital lease liability, current portion

115,761

-0-

Patent settlement liability, current portion

-0-

112,500

Conversion feature liability, related parties

670,634

1,604,723

Conversion feature liability

35,705

81,224

Warrant liability, related parties

601,781

2,196,570

Warrant liability

687,118

1,244,229

Total current liabilities

10,638,476

15,439,878

LONG TERM LIABILITIES

Line of credit, long term

2,900,000

2,650,000

Notes payable, related parties, long term, net of current portion, net of discount of $-0- and $117,365, respectively

-0-

282,635

Notes payable, long term, net of current portion, net of discount of $123,184 and $279,402, respectively

434,316

423,098

Convertible notes payable, related parties, long term, net of current portion

5,770,000

5,770,000

Convertible notes payable, long term, net of current portion

200,000

350,000

Deferred revenue, long term, net of current portion

1,794,237

1,952,366

Capital lease liability, long term, net of current portion

175,089

-0-

TOTAL LIABILITIES

21,912,118

26,867,977

COMMITMENTS AND CONTINGENCIES (See Note 10)

SHAREHOLDERS' (DEFICIT)

Preferred stock, $0.001 par value, 10,000,000 shares authorized, 3,772,500 shares undesignated

Series A convertible preferred stock, 5,000,000 shares authorized, -0- and -0- issued and outstanding, respectively, at $0.001

par value; liquidation preference $-0- and $-0-, respectively

-0-

-0-

Series B convertible preferred stock, 230,000 shares authorized, -0- and -0- issued and outstanding, respectively, at $0.001 par value;

liquidation preference $-0- and $-0-, respectively

-0-

-0-

Series C convertible preferred stock, 747,500 shares authorized, -0- and -0- issued and outstanding, respectively, at $0.001 par value;

liquidation preference $-0- and $-0-, respectively

-0-

-0-

Series D preferred stock, 250,000 shares authorized, 250,000 and 250,000 issued and outstanding, respectively, at $0.001 par value

250

250

Common stock, 500,000,000 shares authorized, 155,368,647 and 148,542,805 issued and outstanding, respectively, at $0.001 par value

155,370

148,544

Additional paid in capital - preferred

999,750

999,750

Additional paid in capital - common

56,233,085

54,379,454

Accumulated other comprehensive (loss)

(436,505)

(397,237)

Accumulated (deficit)

(68,635,854)

(72,323,819)

TOTAL SHAREHOLDERS' (DEFICIT)

(11,683,904)

(17,193,058)

TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT)

$

10,228,214

$

9,674,919


OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the year ended

December 31,

2018

2017

CASH FLOWS FROM OPERATING ACTIVITIES

Net income/(loss)

$

3,687,965

$

2,967,218

Adjustment to reconcile net income/(loss) to net cash provided by/(used in) operating activities

Change in derivative liabilities

(3,111,760)

(795,779)

Intangible asset impairment

79,634

-0-

Interest expense from derivative instruments

273,582

296,182

Employee stock compensation

295,709

568,522

Provision for doubtful accounts

41,782

130,346

Depreciation and amortization

736,358

358,150

Changes in operating assets and liabilities

Accounts receivable

1,275,538

(2,167,733)

Prepaid expenses

(87,081)

(101,216)

Other current assets

6,259

23,592

Other assets

(85,133)

4,607

Accounts payable and accrued expenses

(515,887)

462,972

Patent settlement liability

(112,500)

(858,702)

Deferred revenue

(1,265,397)

(22,277)

Net cash provided by/(used in) operating activities

1,219,069

865,882

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment

(849,344)

(242,384)

Purchase of Acuity software

(552,403)

-0-

Net cash (used in) investing activities

(1,401,747)

(242,384)

CASH FLOWS FROM FINANCING ACTIVITIES

Repayments of notes payable

(345,000)

(915,000)

Repayments of notes payable, related parties

-0-

(105,000)

Proceeds/(repayments) from revolving line of credit

250,000

(50,000)

Proceeds from exercise of stock options

45,000

35,250

Proceeds from exercise of warrants

600,000

155,000

Principal repayment of capital lease obligation

(67,817)

-0-

Net cash provided by/(used in) financing activities

482,183

(879,750)

Effect of exchange rate changes on fixed and intangible assets

3,736

(19,797)

Effect of exchange rate changes on cash and cash equivalents

(39,268)

13,268

Net increase/(decrease) in cash and cash equivalents

263,973

(262,781)

Cash and cash equivalents at beginning of year

1,176,551

1,439,332

Cash and cash equivalents at end of year

$

1,440,524

$

1,176,551

Supplemental disclosures of cash flow information:

Cash paid during the year for:

Income taxes

$

327,319

$

1,194

Interest

$

1,144,586

$

1,051,909

Non-cash transactions:

Notes payable issued in exchange for existing notes payable

$

-0-

$

350,000

Restricted stock issuance/(forfeiture)

$

94,147

$

(2,834)

Common stock issued for the purchase of Acuity software

$

500,000

$

-0-

Capital expenditures funded by capital lease borrowing

$

359,603

$

-0-

Reclassification of conversion feature liability associated with convertible debt

$

10,500

$

402,567

Reclassification of warrant feature liability associated with warrant exercise

$

9,248

$

-0-

Exercise of warrants as repayment of notes payable, related parties

$

400,000

$

-0-


About OmniComm Systems, Inc

OmniComm Systems, Inc. is a leading strategic software solutions provider to the life sciences industry. OmniComm is dedicated to helping the world’s pharmaceutical, biotechnology, contract research organizations, diagnostic and device firms, and academic medical centers maximize the value of their clinical research investments. Through the use of innovative and progressive technologies, these organizations drive efficiency in clinical development, better manage their risks, ensure regulatory compliance and manage their clinical operations performance. With an extensive global experience from more than 6,000 clinical trials, OmniComm provides comprehensive solutions for clinical research. Please visit www.omnicomm.com for more information.

Trademarks
OmniComm, TrialMaster, TrialOne, IRTMaster and Promasys are registered trademarks of OmniComm Systems, Inc. Other names may be trademarks of their respective owners.

Contact Info
Investor Relations
OmniComm Systems, Inc.
+1.954.473.1254
invrel@omnicomm.com