ProntoForms Reports Q3 2018 Financial Results

Continues Momentum with 6% Sequential Growth in Recurring Revenue

OTTAWA, Nov. 08, 2018 (GLOBE NEWSWIRE) — ProntoForms Corporation (TSXV: PFM), the global leader in smart mobile forms for enterprise, today announced its third quarter (Q3) financial results for the three and nine months ended September 30, 2018.

NOTE THE COMPANY COMMENCED REPORTING IN US DOLLARS JANUARY 1, 2018.

“In the 3rd quarter, we recorded 24% year over year growth in recurring revenue and 6% over Q2.  Our rebounding growth in recurring revenue is a result of strong sales results combined with reduced overall churn and allowed us to make continued progress in reducing our operating loss,” said Alvaro Pombo, CEO of ProntoForms. “We also had higher revenue and margins in our professional services practice, as we worked on new enterprise deployments of ProntoForms.”

“The need for our platform continues to grow in large enterprises. IT and the business process owners want low-code solutions that gives them the agility to mobilize field processes with true enterprise grade management, scalability, security, and cloud integrations. Our strategy continues to be focused at engaging larger enterprise accounts, which typically provide longer committed contracts and future expansion opportunities. Our Annual Recurring Revenue (“ARR”) base now includes 14 customers that contribute more than $100,000 of ARR each, representing 24% of the base, up significantly from last year. In addition, we are driving new business with key channel partners that are bringing enterprise opportunities.”    

Financial Highlights – 2018 Third Quarter – Presented in US dollars

  • Recurring revenue in Q3 2018 increased by 24% to $2,780,814, compared to $2,246,331 in Q3 2017, and increased by 6% compared to $2,624,680 in Q2 2018
  • Recurring revenue consisted of non-operator channel recurring revenue of $2,085,501 (40% growth vs. Q3 2017 and 10% growth vs. Q2 2018) and operator channel recurring revenue of $695,313 (9% decrease vs. Q3 2017 and a 5% decrease vs Q2 2018)
  • Total revenue for Q3 2018 increased by 30% to $3,177,846 compared to $2,437,727 in Q3 2017, and increased by 9% compared to $2,906,166, in Q2 2018
  • Gross margin for Q3 2018 was 81% of total revenue compared to 81% in Q3 2017 and 83% in Q2 2018. Gross margin on recurring revenue was 88% for Q3 2018 compared to 90% for Q3 2017 and 88% in Q2 2018
  • Operating loss for Q3 2018 was $510,975, down from a loss of $820,856 in Q3 2017, and down from a loss of $627,069 in Q2 2018
  • Net loss for Q3 2018 was $642,066, down from a net loss of $1,038,421 in Q3 2017, and down from a net loss of $673,814 in Q2 2018
  • Comprehensive loss for Q3 2018 was $620,996, down from a comprehensive loss of $903,340 in Q3 2017, and $707,809 in Q2 2018
  • As at September 30, 2018, the Company’s cash and net working capital balances were $3,854,543 and $2,666,192 respectively

Recent Operational Highlights

– Q3 key enterprise customer progress includes:

  • Global airline committed to deploy ProntoForms to improve operations
  • Global 500 manufacturer expands ProntoForms deployment into Europe
  • Multi-national medical device company surpasses $400k of purchased professional services in 2018
  • $1B+ oil & gas exploration company adds ProntoForms to improve operations and safety

– ProntoForms named Market Leader in Field Service Management Software by Featured Customers:
https://www.featuredcustomers.com/customer_success_report/fall-2018-field-service

About ProntoForms Corporation
ProntoForms is a leading provider of smart mobile forms for enterprise. The Company’s solution is used to collect and analyze field data with smartphones and tablets – either as a standalone solution or as a mobile front-end to corporate systems of record.

The Company’s 100,000+ subscribers harness the intuitive, secure, and scalable solution to increase productivity, improve quality of service, and mitigate risks. The Company is based in Ottawa, Canada, and trades on the TSXV under the symbol PFM. ProntoForms is the registered trademark of ProntoForms Inc., a wholly owned subsidiary of ProntoForms Corporation.

For additional information, please contact:

Alvaro Pombo
Chief Executive Officer
ProntoForms Corporation
613.599.8288 ext. 1111
[email protected]
Babak Pedram
Investor Relations
Virtus Advisory Group Inc.
416-644-5081
[email protected]

Certain information in this press release may constitute forward-looking information. For example, statements about the Company’s future growth or value, the lead flow the Company may receive from its partnering strategy and anticipated market trends are forward-looking information. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Company’s business and value may not grow as anticipated or at all, its partnering strategy may not generate increasing lead flow or maintain current lead flow levels and anticipated market trends may not occur or continue.  Historical growth levels and results may not be indicative of future growth levels or results.  The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Company. There are a number of risk factors that could cause future results to differ materially from those described herein.  Please see “Risk Factors Affecting Future Results” in the Company’s annual management discussion and analysis dated March 16, 2018 found at www.sedar.com for a discussion of such factors.  Please also refer to the Company’s management discussion and analysis for the quarter ended September 30, 2018 for a description of how the Company determines and uses ARR.  ARR is a key performance indicator used by the Company and is not meant as an indication such amounts will necessarily be included in revenues in any given fiscal year.  

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.



PRONTOFORMS CORPORATION
Condensed Interim Consolidated Statements of Comprehensive Loss
For the three and nine months ended September 30, 2018 and 2017
(Unaudited in US dollars)
  Three Months Ended September 30,
  Nine Months Ended September 30,
  2018   2017   2018   2017
  $   $   $   $
Revenue              
Recurring revenue 2,780,814   2,246,331   7,900,562   6,614,954
Professional and other services 397,032   191,396   931,997   583,887
  3,177,846   2,437,727   8,832,559   7,198,841
               
Cost of Revenue              
Recurring revenue 338,029   232,881   909,865   635,283
Professional and other services 261,886   225,835   683,005   652,540
  599,915   458,716   1,592,870   1,287,823
               
Gross Margin 2,577,931   1,979,011   7,239,689   5,911,018
               
Expenses              
Research and development 1,046,828   967,915   3,130,861   2,788,619
Selling and marketing 1,415,250   1,269,579   4,228,203   3,717,076
General and administrative 626,828   562,373   1,795,370   1,698,950
  3,088,906   2,799,867   9,154,434   8,204,645
               
Loss from operations (510,975)   (820,856)   (1,914,745)   (2,293,627)
               
Foreign exchange gain (loss) (57,427)   (75,901)   78,889   (148,488)
Interest and accretion (87,558)   (119,499)   (253,973)   (288,441)
Change in fair value of derivative liability 13,894   (22,165)   (1,214)   (73,830)
Net loss   (642,066)   (1,038,421)     (2,091,043)   (2,804,386)
               
Other Comprehensive loss              
Foreign currency translation adjustment 21,070   135,081     (60,585)   215,464
Total comprehensive loss   (620,996)   (903,340)     (2,151,628)   (2,588,922)
               
Net loss per common share              
basic and diluted (0.01)   (0.01)   (0.02)   (0.03)
               
Weighted average number of common shares              
basic and diluted   107,766,859   107,418,744     107,766,859   97,009,666
               
Share-based compensation included in accounts:              
Cost of revenue 8,894   7,728   27,345   23,065
Research and development 15,699   16,053   50,458   54,182
Selling and marketing 23,644   38,334   81,177   124,242
General and administrative 39,505   69,898   118,201   209,978
    87,742   132,013     277,181   411,467
               

ProntoForms Corporation 
Condensed Interim Consolidated Statements of Financial Position
as at September 30, 2018, December 31, 2017, and January 1, 2017
(Unaudited in US dollars) 
       
  September 30, December 31, January 1,
  2018 2017 2017
  $ $ $
       
Assets      
Current assets      
Cash and cash equivalents   3,854,543 5,074,489 2,875,715
Accounts receivable   1,144,060 1,030,803 787,394
Investment tax credits receivable   167,027 239,130 96,952
Unbilled receivables   202,856 111,017 63,911
Related party loan receivable   83,006 85,649 80,030
Prepaid expenses and other receivables   507,106 491,584 347,631
    5,958,598 7,032,672 4,251,633
       
Property, plant and equipment   310,147 314,920 333,664
Intangible assets   –  7,419 43,689
    6,268,745 7,355,011 4,628,986
       
Liabilities      
Current liabilities      
Accounts payable and accrued liabilities   1,704,283 1,596,036 1,136,314
Deferred revenue   1,588,123 998,117 480,866
Long-term debt – current portion   —   — 651,409
Derivative liability – current portion   —   — 614,948
    3,292,406 2,594,153 2,883,537
       
Long-term debt   2,515,615 2,484,574 1,228,338
Derivative liability   249,800 275,361 114,863
    6,057,821 5,354,088 4,226,738
       
Shareholders’ equity      
Share capital   20,864,593 20,721,783 16,972,146
Contributed Surplus   976,957 738,395   —
Share-based payment reserve   3,315,487 3,096,669 2,562,362
Warrant reserve   1,088,268 1,326,830 1,081,667
Deficit   (26,246,066) (24,155,023) (20,293,094)
Accumulated other comprehensive income (loss)   211,685 272,270 79,167
    210,924 2,000,923 402,248
    6,268,745 7,355,011 4,628,986

ProntoForms Corporation 
Condensed Interim Consolidated Statements of Cash Flows
For the nine months ended September 30, 2018 and 2017
(Unaudited in US dollars) 
  2018 2017
  $ $
     
Net inflow (outflow) of cash related to the following activities:    
     
Cash flow from operating activities    
Net loss (2,091,043) (2,804,386)
Items not affecting cash    
Share-based compensation   277,181 411,467
Accretion on long-term debt   107,238 120,787
Change in fair value of derivative liability   1,214 73,830
Amortization of property, plant and equipment   95,948 86,571
Amortization of intangible asset   7,416 32,367
Changes in non-cash operating working capital items   542,762 151,935
  (1,059,284) (1,927,429)
     
Cash flow from financing activities    
Proceeds from long-term debt   – 751,300
Issuance costs related to long-term debt   – (549)
Proceeds from private placement units   – 4,343,406
Payment of costs related to issuing of units   – (318,038)
Scheduled payments of 2012 derivative liability   – (486,967)
Proceeds from the exercise of warrants   – 86,609
Proceeds from the exercise of options   84,447 183,689
    84,447 4,559,451
     
Cash flow from investing activities    
Purchase of property, plant and equipment   (100,093) (62,287)
  (100,093) (62,287)
     
Effect of Exchange Rate Changes on Cash   (145,016) 433,863
     
Net cash inflow (outflow)   (1,219,946) 3,003,598
Cash and cash equivalents, beginning of year   5,074,489 2,875,715
Cash and cash equivalents, end of period   3,854,543 5,879,313