Press Releases

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

Download PDF

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) -- 04/04/16 -- 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

Source: Inventergy Global, Inc.