Exhibit 99.1

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WaveDancer Releases First Quarter 2022 Results

 

Investments in Transformation Continue Expected to Begin Driving

Revenue Growth in 2Q 2022

 

FAIRFAX, VA, April 12, 2022 – WaveDancer (NASDAQ: WAVD), today reported its results for the first quarter ended March 31, 2022, which was characterized by continued investment in the WaveDancer’s software development and sales team. This included new hires, board appointments, partnerships, and a definitive acquisition agreement as WaveDancer strives to become a leader in the zero trust, blockchain, and secure supply chain market.

 

WaveDancer CEO Jamie Benoit commented, “Our first quarter 2022 saw the company continue to prioritize investments in key operational areas. In addition to the recent additions, we have made at the board and senior leadership levels, we have also added three new blockchain sales professionals as well as six engineers and developers.”

 

Mr. Benoit continued, “Our lower revenue over first quarter 2021 is a result of our continued effort in the Tellenger business to move away from low margin distribution and reselling and towards higher margin professional services opportunities.”

 

First Quarter 2022 Financial Highlights (all comparisons to prior year period unless otherwise noted)

 

 

Total revenues decreased 12.4% to $3.0 million, compared with $3.4 million.

 

Professional fees decreased 15.3% to $2.1 million down from $2.4 million.

 

Gross profit decreased to $0.4 million, compared with $1.0 million.

 

Gross margin expanded to 12.6%; higher-margin professional fees accounted for 69.0% of revenues.

 

Net loss of $(2.1) million, compared with net income of $0.3 million.

 

Adjusted EBITDA1 of ($1.7) million, compared with $0.4 million.

 


1 Please see non-GAAP reconciliation below

 

 

 

About WaveDancer

 

WaveDancer (www.wavedancer.com), headquartered in Fairfax, Virginia, is a provider of zero trust software solutions, specializing in secure blockchain supply chain management (SCM), asset tracking and security. Our technologies are deployed and being used to help organizations manage very complex supply chain challenges. Initially developed to secure a complex international supply chain for a global U.S. Government (USG) national security organization, the technology has matured to address multiple operational capabilities. Customers are using the WaveDancer platform to gain unprecedented levels of accountability, auditability, and predictability from their data, while giving insights to their partners and suppliers through a controlled, distributed ledger that is immutable and can be trusted by all parties. The sophisticated blockchain technology is now available to the entirety of the USG through GovCloud.

 

Additional information for investors

This release may contain forward-looking statements regarding the Company's business, customer prospects, or other factors that may affect future earnings or financial results. Such statements involve risks and uncertainties which could cause actual results to vary materially from those expressed in the forward-looking statements. Investors should read and understand the risk factors detailed in the Company's 10-K for the fiscal year ended December 31, 2021 and in other filings with the Securities and Exchange Commission.

 

For additional information contact:

Jeremy Hellman, CFA

Vice President

The Equity Group

(212) 836-9626

jhellman@equityny.com

 

 

 

WAVEDANCER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

 

   

Three Months Ended March 31,

 
   

2022

   

2021

 

Revenues

               

Professional fees

  $ 2,066,690     $ 2,439,259  

Software sales

    928,822       980,321  

Total revenues

    2,995,512       3,419,580  
                 

Cost of revenues

               

Cost of professional fees

    1,712,015       1,467,699  

Cost of software sales

    907,432       932,231  

Total cost of revenues

    2,619,447       2,399,930  
                 

Gross profit

    376,065       1,019,650  
                 

Selling, general and administrative expenses

    2,714,342       680,250  

Acquisition costs

    434,702       70,530  
                 

(Loss) income from operations

    (2,772,979

)

    268,870  
                 

Other income (expense):

               

Interest expense

    (19,319

)

    (1,459

)

Other income (expense), net

    (12,015

)

    3,404  
                 

(Loss) income before provision for income taxes

    (2,804,313

)

    270,815  
                 

Income tax benefit

    (726,006

)

    -  
                 

Net (loss) income

  $ (2,078,307

)

  $ 270,815  
                 

Comprehensive (loss) income

  $ (2,078,307

)

  $ 270,815  
                 

Basic (loss)/earnings per share

  $ (0.12

)

  $ 0.02  

Diluted (loss)/earnings per share

  $ (0.12

)

  $ 0.02  
                 

Weighted average common shares outstanding

               

Basic

    17,294,808       11,282,671  

Diluted

    17,294,808       12,286,216  

 

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WAVEDANCER, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

   

March 31, 2022

   

December 31, 2021

 

ASSETS

               

Current assets

               

Cash and cash equivalents

  $ 2,999,201     $ 4,931,302  

Accounts receivable

    1,672,072       1,664,862  

Prepaid expenses and other current assets

    458,719       276,990  

Total current assets

    5,129,992       6,873,154  
                 

Intangible assets, net of accumulated amortization of $201,032 and $0

    7,699,075       8,048,968  

Goodwill

    7,585,269       7,585,269  

Right-of-use operating lease asset

    627,977       672,896  

Property and equipment, net of accumulated depreciation and amortization of $347,886 and $312,320

    103,577       105,256  

Other assets

    77,100       77,100  

Total assets

  $ 21,222,990     $ 23,362,643  
                 

LIABILITIES AND STOCKHOLDERS' EQUITY

               

Current liabilities

               

Accounts payable

  $ 302,323     $ 650,499  

Accrued payroll and related liabilities

    611,497       524,055  

Commissions payable

    250,043       224,250  

Other accrued liabilities

    816,536       204,080  

Contract liabilities

    149,692       186,835  

Operating lease liability- current

    192,128       192,128  

Total current liabilities

    2,322,219       1,981,847  
                 

Operating lease liability - non-current

    460,505       507,120  

Deferred income taxes

    441,498       1,167,504  

Other liabilities

    2,296,928       2,265,000  

Total liabilities

    5,521,150       5,921,471  
                 

Stockholders' equity

               

Common stock at $0.001 and $0.01 par value; 100,000,000 and 30,000,000 shares authorized, 18,882,313 and 12,904,376 shares issued, 17,239,697 and 11,261,760 shares outstanding, as of December 31, 2021 and 2020, respectively

    18,987       18,882  

Additional paid-in capital

    32,128,334       31,789,464  

Accumulated deficit

    (15,515,270

)

    (13,436,963

)

Treasury stock, 1,642,616 shares at cost

    (930,211

)

    (930,211

)

Total stockholders' equity

    15,701,840       17,441,172  

Total liabilities and stockholders' equity

  $ 21,222,990     $ 23,362,643  

 

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Non-GAAP Financial Measures

In assessing the performance of our business, management utilizes a variety of financial and performance measures. The key measure is Adjusted EBITDA, a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss) plus depreciation and amortization expense, net interest expense (income), and taxes, as further adjusted to eliminate the impact of, when applicable, expenses that are unusual or non-recurring that we believe do not reflect our core operating results. and non-cash stock-based compensation. We believe that Adjusted EBITDA is meaningful to our investors to enhance their understanding of our financial performance for the current period and our ability to generate cash flows from operations that are available for taxes, capital expenditures and debt service. We understand that Adjusted EBITDA is frequently used by securities analysts, investors and other interested parties as a measure of financial performance and to compare our performance with the performance of other companies that report Adjusted EBITDA. Our calculation of Adjusted EBITDA, however, may not be comparable to similarly titled measures reported by other companies. When assessing our operating performance, investors and others should not consider this data in isolation or as a substitute for net income (loss) calculated in accordance with GAAP. Further, the results presented by Adjusted EBITDA cannot be achieved without incurring the costs that the measure excludes. A reconciliation of net income (loss) to Adjusted EBITDA, the most comparable GAAP measure, is provided below.

 

 

 

Reconciliation of Net (loss) income to Adjusted EBITDA

               
                 

(in thousands)

 

Three Months Ended

March 31,

 
   

2022

   

2021

 

Net (loss) income

  $ (2,078 )   $ 271  

Adjustments:

               

Interest expense (income), net

    19       (2 )

Tax (benefit) expense

    (726 )     -  

Depreciation

    13       5  

Amortization

    350       -  

EBITDA

    (2,422 )     274  

Non-cash stock-based compensation

    312       28  

Acquisition Costs

    435       71  

Post-employment agreement

    -       36  
                 

Adjusted EBITDA

  $ (1,675 )   $ 408  

 

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