SOURCE: Inventergy Global, Inc.

Inventergy Global, Inc.

April 04, 2016 16:15 ET

Inventergy Reports 580% Year-Over-Year Revenue Growth for Full Year 2015

Company Executes on Key Initiatives in 2015, Enhancing Opportunities and Results

Shareholder Update Conference Call to Be Held Monday, April 4th at 4:30pm ET

CAMPBELL, CA--(Marketwired - Apr 4, 2016) -  Inventergy Global, Inc. (NASDAQ: INVT) ("Inventergy"), today reported highlights from its financial results for the full year 2015 as well as operational highlights and achievements in 2015.

Highlights from the full year 2015 include:

  • Revenue of $4,888,302 for the twelve months ended December 31, 2015, up 580% compared to the same period in the prior year. The increase was due to the Company's successful sale of two patent families for $4 million, patent licensing and litigation settlement contracts which totaled $603,571 and access control security product/service lines acquired in the merger of $284,731.

  • Gross profit of $3,743,311 for the twelve months ended December 31, 2015, compared to negative gross profit of $(12,946) for the same period in the prior year. Gross profit margin was 77% for the full year 2015 as compared to a negative gross margin of -2% for full year 2014.

  • General and administrative expenses for the twelve months ended December 31, 2015 were $7,532,240, a 36% decrease compared to $11,728,973 for the same period in the prior year. The decrease was primarily a result of cost containment and prudent oversight of operational expenses such as patent costs and consulting fees, legal fees, business travel, and other general expense savings.

  • A 42% decrease in net loss to $11,733,549 for the twelve months ended December 31, 2015 compared to a net loss of $20,084,554 for the same period in the prior year.

  • An 81% decrease in net cash used in operating activities to $1,603,693 for the twelve months ended December 31, 2015 compared to net cash used in operating activities of $8,371,167 for the same period in the prior year.

  • Cash and cash equivalents of $554,556 as of December 31, 2015. The Company raised gross proceeds of $2,500,000 on January 26, 2016 for the sale of Series C Convertible Preferred Stock and warrants.

  • The Company owns approximately 742 currently active patents and patent applications as of December 31, 2015.

  • During Q1 of 2015, the Company entered into its first license agreement for a $2 million, 5-year license to its Huawei and Nokia Internet Multimedia Systems (IMS) patent portfolios. The license was granted to a mid-tier IMS telecommunications equipment supplier, at essentially the same effective royalty rate being offered in discussions with other IMS-related supplier companies.

  • In Q2 of 2015, Inventergy completed a $4 million transaction for the sale of two patent families from its Panasonic mobility portfolio.

  • In Q3 of 2015, Inventergy settled the litigation against Genband, a mid-tier IMS telecommunications equipment supplier, for an undisclosed amount.

  • In October 2015, the Company was granted ten newly issued patents in the US, Europe and Asia, which strengthened its presence in the global telecommunications industry.

  • In October 2015, the Company converted the Series A-1, A-2 and B Preferred Stock to common eliminating all of the redemption, anti-dilution, right of first refusal and similar rights from the original investments that were part of the formation of the Company.

  • In December 2015, the Company completed a 1 for 10 reverse stock split and regained Nasdaq compliance for the minimum $1 stock price requirement.

Inventergy's Chief Executive Officer Joe Beyers commented, "2015 was an intense year for us as we executed on our corporate strategy and started to monetize our IP portfolio and successfully closed three transactions worth over $6 million. More recently we secured $2.5 million through the sale of our Series C Convertible Preferred Stock and warrants which is intended to help propel our corporate trajectory towards what we view as a strong pipeline of potential revenue. We also reached an agreement with one of our patent partners to amend the parties' patent purchase agreement resulting in a reduction in our liabilities of $17.3 million, including the elimination of $1.0 million of accrued interest expense, thereby significantly strengthening our balance sheet. Lastly, we obtained significant flexibility from our debt holder, Fortress, who agreed to defer certain debt amortization payments until July 1, 2016 which were previously scheduled to begin October 1, 2015. We remain committed to focusing our efforts on our robust pipeline of additional value-creation opportunities and to pursuing our efforts to drive significant larger revenue opportunities in 2016."

Conference call information:

Date: Monday, April 4, 2016
Time: 4:30 P.M. Eastern Time (ET)
Dial in Number for U.S. & Canadian Callers: (877) 407-8289
Dial in Number for International Callers (Outside of the U.S. & Canada): (201) 689-8341

The conference call will be hosted by Inventergy's Chief Executive Officer Joe Beyers and Chief Financial Officer John Niedermaier, who will provide a financial and operational summary of the fourth quarter and full year 2015. To join the live conference call, please dial into one of the above referenced telephone numbers ten minutes prior to the scheduled conference call time.

If you are unable to participate in the call at this time, a replay will be available for 14 days starting on April 4, 2016 at approximately 10:30 P.M. ET. To access the replay, please dial 877-660-6853 in the U.S. and 201-612-7415 for international callers. The conference ID# is 13633735.

About Inventergy Global, Inc.
Inventergy Global, Inc. (NASDAQ: INVT) is a Silicon Valley-based intellectual property company dedicated to identifying, acquiring and licensing the patented technologies of market-significant technology leaders. Led by IP industry pioneer and veteran Joe Beyers, the Company leverages decades of corporate experience, market and technology expertise, and industry connections to assist Fortune 500 companies in leveraging the value of their innovations to achieve greater returns. For more information about Inventergy Global, visit www.inventergy.com.

Cautionary Statement Regarding Forward-Looking Statements
This press release includes "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These statements include statements about our plans, strategies, financial performance, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. These statements may be identified by the use of words like "anticipate", "believe", "estimate", "expect", "intend", "may", "plan", "will", "should", "seek" and similar expressions and include any projections or estimates set forth herein. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by Inventergy and our management team, are inherently uncertain. A more complete description of these risks and uncertainties can be found in our filings with the U.S. Securities and Exchange Commission. We caution you not to place undue reliance on any forward-looking statements, which are made as of the date of this press release. We undertake no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

   
   
INVENTERGY GLOBAL, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF OPERATIONS  
             
    Twelve Months Ended  
    December 31,  
    2015     2014  
                 
Revenues   $ 4,888,302     $ 719,267  
                 
Operating Expenses:                
  Cost of revenues     1,144,991       732,213  
  Patent amortization expense     1,530,110       1,400,540  
  General and administrative     7,532,240       11,728,973  
    Total operating expenses     10,207,341       13,861,726  
                 
Loss from operations     (5,319,039 )     (13,142,459 )
                 
Other income (expense):                
  Loss on extinguishment of notes payable     (2,268,373 )     (5,643,607 )
  Impairment of acquired contract     -       (686,350 )
  Decrease in fair value of derivative liabilities     67,439       783,129  
  Other income     2,137       242  
  Interest expense, net     (4,229,754 )     (1,393,109 )
    Total other income (expense), net     (6,428,551 )     (6,939,695 )
                 
Loss before provision for income taxes     (11,747,590 )     (20,082,154 )
                 
Provision for income taxes     (14,041 )     2,400  
                 
Net loss     (11,733,549 )     (20,084,554 )
                 
Deemed dividend on preferred stock     -       436,916  
                 
Net loss available to common shareholders   $ (11,733,549 )   $ (20,521,470 )
                 
Basic and diluted loss per share   $ (3.41 )   $ (11.52 )
                 
Weighted average shares outstanding, basic and diluted     3,443,369       1,781,308  
   
   
   
INVENTERGY GLOBAL, INC. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEETS  
             
    December 31,     December 31,  
    2015     2014  
ASSETS            
Current assets                
  Cash and cash equivalents   $ 554,556     $ 1,443,349  
  Accounts receivable, net     31,941       259,049  
  Inventories     -       302,739  
  Prepaid expenses and other current assets     211,088       212,280  
  Deferred expenses, current     78,292       3,000,000  
        Total current assets     875,877       5,217,417  
Property and equipment, net     25,263       42,267  
Deferred expenses, patents     -       12,094,420  
Patents, net     8,669,921       10,415,404  
Intangible assets, net     386,083       499,083  
Goodwill     8,858,504       8,858,504  
Debt issuance costs     516,767       729,498  
Deposits and other assets     18,993       18,993  
      Total assets   $ 19,351,408     $ 37,875,586  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                
Current liabilities                
  Accounts payable   $ 1,846,903     $ 1,501,938  
  Accrued expenses and other current liabilities     12,726       301,132  
  Short-term notes payable, related party     100,000       300,000  
  Guaranteed payments, current     2,076,767       3,807,084  
  Fortress notes payable, current     5,894,049       1,421,196  
  Deferred revenue     550,000       -  
      Total current liabilities     10,480,445       7,331,350  
Deferred revenue, non-current     346,429       -  
Guaranteed payments     -       13,105,857  
Derivative liabilities     4,145       30,278  
Fortress notes payable, net of discount     2,628,153       6,259,321  
Fortress revenue share, net of discount     6,034,278       2,478,057  
      Total liabilities     19,493,450       29,204,863  
Stockholders' equity                
  Preferred stock, $0.001 par value, 10,000,000 shares authorized                
    Series A convertible preferred stock: 6,176,748 shares designated, -0- and 2,709,690 shares issued and outstanding at December 31, 2015 and December 31, 2014 (aggregate liquidation preference of $0 at December 31, 2015 and $2,915,122 at December 31, 2014)    

-
     

2,710
 
    Series B convertible preferred stock: 2,750 shares designated, -0- and 1,102 shares issued and outstanding at December 31, 2015 and December 31, 2014 (aggregate liquidation preference of $0 and $1,102,000 at December 31, 2015 and December 31, 2014    

-
     

1
 
  Common stock, $0.001 par value; 100,000,000 shares authorized, 4,223,124 and 2,799,713 shares issued and outstanding at December 31, 2015 and December 31, 2014    
4,223
     
2,800
 
  Additional paid-in capital     54,660,497       51,738,425  
  Accumulated deficit     (54,806,762 )     (43,073,213 )
      Total stockholders' equity (deficit)     (142,042 )     8,670,723  
      Total liabilities and stockholders' equity (deficit)   $ 19,351,408     $ 37,875,586  
                 
   
   
   
INVENTERGY GLOBAL, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
   
             
    Twelve Months Ended December 31,  
    2015     2014  
Cash flows from operating activities                
  Net loss   $ (11,733,549 )   $ (20,084,554 )
    Adjustments to reconcile net loss to net cash used in operating activities                
      Depreciation expense     17,004       9,919  
      Loss on extinguishment of notes payable     2,268,373       5,643,607  
      Decrease in fair value of derivative liabilities     (67,439 )     (783,129 )
      Amortization of discount on notes payable     3,242,080       883,125  
      Accrued interest on patent purchase     258,246       -  
      Impairment of acquired contracts     -       686,350  
      Amortization of patents and acquired contracts     1,643,110       1,557,108  
      Net cost of patents sold     215,373       -  
      Stock-based compensation     1,147,374       2,873,396  
      Issuance of new stock in conjunction with the restricted stock granted     -       225,001  
      Changes in operating assets and liabilities                
        Accounts receivable     227,108       (259,049 )
        Inventories     302,739       12,207  
        Prepaid expenses and other current assets     1,192       (113,282 )
        Deferred expenses     (78,292 )     -  
        Deposits and other assets     -       1,406  
        Accounts payable     344,965       906,835  
        Accrued expenses and other current liabilities     (288,406 )     114,971  
        Accrued interest on notes payable     -       (6,935 )
        Deferred revenue     896,429       -  
        Warranty reserve     -       (38,143 )
Net cash used in operating activities     (1,603,693 )     (8,371,167 )
                 
Cash flows from investing activities                
  Purchases of property and equipment     -       (52,186 )
  Issuance of short-term note receivable, related party     -       (3,000,000 )
  Cash and other assets received in acquisition     -       790,172  
Net cash used in investing activities     -       (2,262,014 )
                 
Cash flows from financing activities                
  Proceeds from issuance of common stock, net of issuance costs     1,835,000       6,021,144  
  Proceeds from issuance of convertible notes payable, net of issuance costs     -       3,371,834  
  Proceeds from issuance of notes payable     1,126,900       9,964,868  
  Proceeds from related party note payable     -       300,000  
  Payments on short-term notes payable, related party     (100,000 )     (100,000 )
  Payments on convertible notes     -       (8,000,000 )
  Payments on Fortress notes payable     (2,147,000 )     -  
  Payments on guaranteed payment liability     -       (1,000,000 )
Net cash provided by financing activities     714,900       10,557,846  
                 
Net decrease in cash and cash equivalents     (888,793 )     (75,335 )
                 
Cash and cash equivalents, beginning of period     1,443,349       1,518,684  
                 
Cash and cash equivalents, end of period   $ 554,556     $ 1,443,349  
                 
Supplemental disclosures of cash flow information                
Cash paid for interest   $ 841,784     $ 516,919  
Cash paid for income taxes   $ -     $ -  
                 
Supplemental disclosures of non-cash investing and financing activities                
  Accrued guaranteed payments and deferred expenses associated with purchased patent assets   $ (16,258,540 )   $ 1,749,230  
  Conversion of portion of short-term note payable, related party, to purchase common stock   $ 100,000     $ -  
  Conversion of preferred stock to common stock   $ 2,711     $ -  
  Offset of short-term related party notes payable and receivable   $ -     $ 3,000,000  
  Transfer of Series A redeemable convertible preferred stock to preferred stock   $ -     $ 3,392,950