|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)
“The Internet of Things transforms the way organizations leverage machine data and gain insights from it,” noted Splunk’s CTO Snehal Antani, as Splunk announced accelerated momentum in Industrial Data and the IoT. The trend is driven by Splunk’s continued investment in its products and partner ecosystem as well as the creativity of customers and the flexibility to deploy Splunk IoT solutions as software, cloud services or in a hybrid environment. Customers are using Splunk® solutions to collect and correlate data from control systems, sensors, mobile devices and IT systems for a variety of Ind...
Oct. 4, 2015 04:45 PM EDT Reads: 554
As enterprises capture more and more data of all types – structured, semi-structured, and unstructured – data discovery requirements for business intelligence (BI), Big Data, and predictive analytics initiatives grow more complex. A company’s ability to become data-driven and compete on analytics depends on the speed with which it can provision their analytics applications with all relevant information. The task of finding data has traditionally resided with IT, but now organizations increasingly turn towards data source discovery tools to find the right data, in context, for business users, d...
Oct. 4, 2015 04:00 PM EDT Reads: 357
Clearly the way forward is to move to cloud be it bare metal, VMs or containers. One aspect of the current public clouds that is slowing this cloud migration is cloud lock-in. Every cloud vendor is trying to make it very difficult to move out once a customer has chosen their cloud. In his session at 17th Cloud Expo, Naveen Nimmu, CEO of Clouber, Inc., will advocate that making the inter-cloud migration as simple as changing airlines would help the entire industry to quickly adopt the cloud without worrying about any lock-in fears. In fact by having standard APIs for IaaS would help PaaS expl...
Oct. 4, 2015 02:30 PM EDT Reads: 374
Organizations already struggle with the simple collection of data resulting from the proliferation of IoT, lacking the right infrastructure to manage it. They can't only rely on the cloud to collect and utilize this data because many applications still require dedicated infrastructure for security, redundancy, performance, etc. In his session at 17th Cloud Expo, Emil Sayegh, CEO of Codero Hosting, will discuss how in order to resolve the inherent issues, companies need to combine dedicated and cloud solutions through hybrid hosting – a sustainable solution for the data required to manage I...
Oct. 4, 2015 02:00 PM EDT Reads: 390
SYS-CON Events announced today that ProfitBricks, the provider of painless cloud infrastructure, will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. ProfitBricks is the IaaS provider that offers a painless cloud experience for all IT users, with no learning curve. ProfitBricks boasts flexible cloud servers and networking, an integrated Data Center Designer tool for visual control over the cloud and the best price/performance value available. ProfitBricks was named one of the coolest Clo...
Oct. 4, 2015 01:00 PM EDT Reads: 697
SYS-CON Events announced today that IBM Cloud Data Services has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. IBM Cloud Data Services offers a portfolio of integrated, best-of-breed cloud data services for developers focused on mobile computing and analytics use cases.
Oct. 4, 2015 01:00 PM EDT Reads: 535
Learn how IoT, cloud, social networks and last but not least, humans, can be integrated into a seamless integration of cooperative organisms both cybernetic and biological. This has been enabled by recent advances in IoT device capabilities, messaging frameworks, presence and collaboration services, where devices can share information and make independent and human assisted decisions based upon social status from other entities. In his session at @ThingsExpo, Michael Heydt, founder of Seamless Thingies, will discuss and demonstrate how devices and humans can be integrated from a simple clust...
Oct. 4, 2015 12:00 PM EDT Reads: 605
As more and more data is generated from a variety of connected devices, the need to get insights from this data and predict future behavior and trends is increasingly essential for businesses. Real-time stream processing is needed in a variety of different industries such as Manufacturing, Oil and Gas, Automobile, Finance, Online Retail, Smart Grids, and Healthcare. Azure Stream Analytics is a fully managed distributed stream computation service that provides low latency, scalable processing of streaming data in the cloud with an enterprise grade SLA. It features built-in integration with Azur...
Oct. 4, 2015 11:00 AM EDT Reads: 710
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Bradley Holt, Developer Advocate at IBM Cloud Data Services, will demonstrate techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, faster user experience, both offline and online. The focus of this talk will be on IBM Cloudant, Apa...
Oct. 4, 2015 11:00 AM EDT Reads: 346
You have your devices and your data, but what about the rest of your Internet of Things story? Two popular classes of technologies that nicely handle the Big Data analytics for Internet of Things are Apache Hadoop and NoSQL. Hadoop is designed for parallelizing analytical work across many servers and is ideal for the massive data volumes you create with IoT devices. NoSQL databases such as Apache HBase are ideal for storing and retrieving IoT data as “time series data.”
Oct. 4, 2015 10:45 AM EDT Reads: 356
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.
Oct. 4, 2015 09:00 AM EDT Reads: 545
Mobile messaging has been a popular communication channel for more than 20 years. Finnish engineer Matti Makkonen invented the idea for SMS (Short Message Service) in 1984, making his vision a reality on December 3, 1992 by sending the first message ("Happy Christmas") from a PC to a cell phone. Since then, the technology has evolved immensely, from both a technology standpoint, and in our everyday uses for it. Originally used for person-to-person (P2P) communication, i.e., Sally sends a text message to Betty – mobile messaging now offers tremendous value to businesses for customer and empl...
Oct. 4, 2015 08:30 AM EDT Reads: 153
SYS-CON Events announced today that MobiDev, a software development company, will exhibit at the 17th International Cloud Expo®, which will take place November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software development company with representative offices in Atlanta (US), Sheffield (UK) and Würzburg (Germany); and development centers in Ukraine. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobile software company with over 150 developers, designers, quality assurance engineers, project manage...
Oct. 4, 2015 04:00 AM EDT Reads: 662
The broad selection of hardware, the rapid evolution of operating systems and the time-to-market for mobile apps has been so rapid that new challenges for developers and engineers arise every day. Security, testing, hosting, and other metrics have to be considered through the process. In his session at Big Data Expo, Walter Maguire, Chief Field Technologist, HP Big Data Group, at Hewlett-Packard, will discuss the challenges faced by developers and a composite Big Data applications builder, focusing on how to help solve the problems that developers are continuously battling.
Oct. 4, 2015 04:00 AM EDT Reads: 325
SYS-CON Events announced today that Cloud Raxak has been named “Media & Session Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Raxak Protect automates security compliance across private and public clouds. Using the SaaS tool or managed service, developers can deploy cloud apps quickly, cost-effectively, and without error.
Oct. 3, 2015 01:15 PM EDT Reads: 576
Who are you? How do you introduce yourself? Do you use a name, or do you greet a friend by the last four digits of his social security number? Assuming you don’t, why are we content to associate our identity with 10 random digits assigned by our phone company? Identity is an issue that affects everyone, but as individuals we don’t spend a lot of time thinking about it. In his session at @ThingsExpo, Ben Klang, Founder & President of Mojo Lingo, will discuss the impact of technology on identity. Should we federate, or not? How should identity be secured? Who owns the identity? How is identity ...
Oct. 3, 2015 11:00 AM EDT Reads: 399
SYS-CON Events announced today that Solgeniakhela will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Solgeniakhela is the global market leader in Cloud Collaboration and Cloud Infrastructure software solutions. Designed to “Bridge the Gap” between Personal and Professional Social, Mobile and Cloud user experiences, our solutions help large and medium-sized organizations dramatically improve productivity, reduce collaboration costs, and increase the overall enterprise value by bringing ...
Oct. 2, 2015 10:00 PM EDT Reads: 542
Sensors and effectors of IoT are solving problems in new ways, but small businesses have been slow to join the quantified world. They’ll need information from IoT using applications as varied as the businesses themselves. In his session at @ThingsExpo, Roger Meike, Distinguished Engineer, Director of Technology Innovation at Intuit, will show how IoT manufacturers can use open standards, public APIs and custom apps to enable the Quantified Small Business. He will use a Raspberry Pi to connect sensors to web services, and cloud integration to connect accounting and data, providing a Bluetooth...
Oct. 2, 2015 03:30 PM EDT Reads: 340
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 technology leadership, Micron's memory solutions enable the world's most innovative computing, consumer,...
Oct. 2, 2015 07:00 AM EDT Reads: 556
Nowadays, a large number of sensors and devices are connected to the network. Leading-edge IoT technologies integrate various types of sensor data to create a new value for several business decision scenarios. The transparent cloud is a model of a new IoT emergence service platform. Many service providers store and access various types of sensor data in order to create and find out new business values by integrating such data.
Oct. 1, 2015 02:30 PM EDT Reads: 398