8-K
Firefly Neuroscience, Inc. (AIFF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 21, 2022
WaveDancer, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-41092 | 54-1167364 |
|---|---|---|
| (State or other jurisdiction | (Commission | (IRS Employer |
| --- | --- | --- |
| of incorporation) | File Number) | Identification No.) |
12015 Lee Jackson Memorial Highway, Ste 210
Fairfax , VA 22033
(Address of principal executive offices, including zip code)
703 -383-3000
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br> <br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock | WAVD | The Nasdaq Stock Market, LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On November 21, 2022, WaveDancer, Inc. issued a press release announcing its financial results for the three months and nine months ended September 30, 2022. A copy of this press release is attached as Exhibit 99.1 and incorporated by reference herein.
The attached press release includes non-GAAP financial measures relating to our results of operations and reconciliations of these non-GAAP measures to GAAP measures, as well as an explanation of how management uses these non-GAAP measures and the reasons why management views these measures as providing useful information for investors. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to these results should be carefully evaluated.
The information in Item 2.02 of this Report and the press release attached hereto as Exhibit 99.1 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.
| Item 9.01 | Financial Statement and Exhibits |
|---|
Press Release dated November 21, 2022, captioned: “WaveDancer Releases Third Quarter 2022 Results – Recent Commercial Partnership for Maverix Platform Supports Potential for Future Growth.”
| Exhibit No. | Description |
|---|---|
| 99.1 | WAVD Press Release dated November 21, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WaveDancer, Inc. | ||
|---|---|---|
| Date: November 21, 2022 | By: | /s/ Timothy G. Hannon |
| Timothy G. Hannon | ||
| Chief Financial Officer |
ex_449503.htm
Exhibit 99.1
WaveDancer Releases Third Quarter 2022 Results
Recent Commercial Partnership for Maverix Platform Supports Potential for Future Growth
FAIRFAX, VA, November 21, 2022 – WaveDancer (NASDAQ: WAVD), reported its results for the third quarter ended September 30, 2022, which was characterized by an increased emphasis on professional services that generate higher gross margin for the company, as well as continued investment in the Company’s move to become a leading provider of blockchain software as it signed its first commercial customer.
WaveDancer CEO Jamie Benoit commented, “After developing a blockchain solution for a United States government supply chain, in 2022 we invested significant time and financial resources toward the development of a new and vastly improved platform suitable for deployment at scale into commercial and government environments. While sales efforts were slowed while we completed development work on our new Maverix platform, we believe that investment can pay off as we are working with our first commercial customer and are in advanced discussions with others. We remain optimistic that we have established a foundation for future growth.”
Benoit added, “In our professional services business we continued our shift toward professional services that generate higher gross margin for the company. Part of this transition is a decreased emphasis on sales of low-margin third-party software, which led to a decline in our consolidated revenue compared with the prior year period. In addition, the prior year quarter benefited from a significant amount of higher-margin overtime work as our engineers worked to meet key milestones associated with a software modernization project.”
Mr. Benoit concluded, “Our recently announced commercial agreement is an important step toward validating the potential of our Maverix platform in the marketplace. Our predecessor platform has been stress-tested in critical use cases by the US Government, providing us with an excellent technical foundation to bring a new and formidable commercial product to the market.”
Third Quarter 2022 Key Financial Items (all comparisons to prior year period unless otherwise noted)
| ● | Total revenues decreased to $2.3 million, compared with $4.3 million. |
|---|---|
| ● | Professional fees decreased to $2.1 million, down from $2.8 million. |
| --- | --- |
| ● | Gross profit decreased to $0.48 million, compared with $0.98 million. |
| --- | --- |
| ● | Gross margin declined to 20.9% from 22.8%; higher-margin professional fees accounted for 91.7% of revenues. |
| --- | --- |
| ● | Net loss of $(4.7) million, including a goodwill impairment charge of $2.3 million, compared with net loss of $(0.1) million. |
| --- | --- |
| ● | Adjusted EBITDA^1^ of $(1.5) million, compared with $0.1 million |
| --- | --- |
Nine Months 2022 Key Financial Items (all comparisons to prior year period unless otherwise noted)
| ● | Total revenues decreased to $9.6 million, compared with $12.5 million. |
|---|---|
| ● | Professional fees decreased to $7.0 million, down from $8.6 million. |
| --- | --- |
| ● | Gross margin for our Tellenger business unit improved to 25.8% compared with 23.7%; higher-margin professional fees accounted for 71.3% of revenues. |
| --- | --- |
| ● | Net loss of $(8.3) million, including a goodwill impairment charge of $2.3 million, compared with net income of $0.2 million. |
| --- | --- |
| ● | Adjusted EBITDA of $(4.6) million, compared with $0.9 million. |
| --- | --- |
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
^1^ Please see non-GAAP reconciliation on page 6
WAVEDANCER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
Unaudited
| Three Months Ended<br><br> <br>September 30, | ||||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||
| Revenues | ||||||
| Professional fees | $ | 2,114,012 | $ | 2,798,105 | ||
| Software sales | 192,367 | 1,501,820 | ||||
| Total revenues | 2,306,379 | 4,299,925 | ||||
| Cost of revenues | ||||||
| Cost of professional fees | 1,724,040 | 1,832,812 | ||||
| Cost of software sales | 100,717 | 1,488,238 | ||||
| Total cost of revenues, excluding depreciation and amortization | 1,824,757 | 3,321,050 | ||||
| Gross profit | 481,622 | 978,875 | ||||
| Selling, general and administrative expenses | 2,926,243 | 1,023,897 | ||||
| Acquisition costs | 38,617 | 39,245 | ||||
| Goodwill impairment | 2,254,624 | - | ||||
| (Loss) income from operations | (4,737,862 | ) | (84,267 | ) | ||
| Other income (expense): | ||||||
| Interest expense | (20,437 | ) | (15,055 | ) | ||
| Other income (expense), net | 3,188 | 3,795 | ||||
| (Loss) income before provision for income taxes | (4,755,111 | ) | (95,527 | ) | ||
| Income tax benefit | 54,592 | - | ||||
| Net (loss) income | $ | (4,700,519 | ) | $ | (95,527 | ) |
| Comprehensive (loss) income | $ | (4,700,519 | ) | $ | (95,527 | ) |
| Basic (loss)/earnings per share | $ | (0.26 | ) | $ | (0.01 | ) |
| Diluted (loss)/earnings per share | $ | (0.26 | ) | $ | (0.01 | ) |
| Weighted average common shares outstanding | ||||||
| Basic | 18,382,131 | 12,596,126 | ||||
| Diluted | 18,382,131 | 12,596,126 |
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WAVEDANCER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
Unaudited
| Nine Months Ended<br><br> <br>September 30, | ||||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||
| Revenues | ||||||
| Professional fees | $ | 7,025,396 | $ | 8,565,639 | ||
| Software sales | 2,593,877 | 3,885,828 | ||||
| Total revenues | 9,619,273 | 12,451,467 | ||||
| Cost of revenues | ||||||
| Cost of professional fees | 5,401,666 | 5,698,407 | ||||
| Cost of software sales | 2,430,139 | 3,798,607 | ||||
| Total cost of revenues, excluding depreciation and amortization | 7,831,805 | 9,497,014 | ||||
| Gross profit | 1,787,468 | 2,954,453 | ||||
| Selling, general and administrative expenses | 8,880,973 | 2,523,340 | ||||
| Acquisition costs | 829,478 | 192,530 | ||||
| Change in fair value of contingent consideration | (930,000 | ) | - | |||
| Goodwill Impairment | 2,254,624 | - | ||||
| (Loss) income from operations | (9,247,607 | ) | 238,583 | |||
| Other income (expense): | ||||||
| Interest expense | (59,574 | ) | (31,738 | ) | ||
| Other income (expense), net | 3,977 | 11,600 | ||||
| (Loss) income before provision for income taxes | (9,303,204 | ) | 218,445 | |||
| Income tax benefit | 998,936 | - | ||||
| Net (loss) income | $ | (8,304,268 | ) | $ | 218,445 | |
| Comprehensive (loss) income | $ | (8,304,268 | ) | $ | 218,445 | |
| Basic (loss)/earnings per share | $ | (0.47 | ) | $ | 0.02 | |
| Diluted (loss)/earnings per share | $ | (0.47 | ) | $ | 0.02 | |
| Weighted average common shares outstanding | ||||||
| Basic | 17,688,528 | 11,957,878 | ||||
| Diluted | 17,688,528 | 12,584,914 |
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WAVEDANCER, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS ****
| December 31, 2021 | |||||
|---|---|---|---|---|---|
| ASSETS | **** | **** | **** | **** | **** |
| Current assets | |||||
| Cash and cash equivalents | 1,521,651 | $ | 4,931,302 | ||
| Accounts receivable | 1,532,174 | 1,664,862 | |||
| Prepaid expenses and other current assets | 302,443 | 276,990 | |||
| Total current assets | 3,356,268 | 6,873,154 | |||
| Intangible assets, net of accumulated amortization of 1,250,711 and 201,032 | 6,999,289 | 8,048,968 | |||
| Goodwill | 5,330,645 | 7,585,269 | |||
| Right-of-use operating lease asset | 536,455 | 672,896 | |||
| Property and equipment, net of accumulated depreciation and amortization of 381,473 and 347,886 | 305,729 | 105,256 | |||
| Other assets | 79,305 | 77,100 | |||
| Total assets | 16,607,691 | $ | 23,362,643 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | **** | **** | **** | **** | **** |
| Current liabilities | |||||
| Accounts payable | 227,560 | $ | 650,499 | ||
| Accrued payroll and related liabilities | 701,652 | 524,055 | |||
| Commissions payable | 225,096 | 224,250 | |||
| Other accrued liabilities | 680,269 | 204,080 | |||
| Contract liabilities | 37,686 | 186,835 | |||
| Operating lease liability- current | 203,342 | 192,128 | |||
| Total current liabilities | 2,075,605 | 1,981,847 | |||
| Operating lease liability - non-current | 353,486 | 507,120 | |||
| Deferred income taxes | 154,252 | 1,167,504 | |||
| Other liabilities | 1,394,467 | 2,265,000 | |||
| Total liabilities | 3,977,810 | 5,921,471 | |||
| Stockholders' equity | |||||
| Common stock at 0.001 par value; 100,000,000 shares authorized, 20,808,654 and 18,882,313 shares issued, 19,135,603 and 17,239,697 shares outstanding, as of September 30,2022 and December 31, 2021, respectively | 20,809 | 18,882 | |||
| Additional paid-in capital | 35,315,514 | 31,789,464 | |||
| Accumulated deficit | (21,741,231 | ) | (13,436,963 | ) | |
| Treasury stock, 1,673,051 and 1,642,616 shares at cost, as of September 30, 2022 and December 31, 2021, respectively | (965,211 | ) | (930,211 | ) | |
| Total stockholders' equity | 12,629,881 | 17,441,172 | |||
| Total liabilities and stockholders' equity | 16,607,691 | $ | 23,362,643 |
All values are in US Dollars.
5
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 (Unaudited) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended | Nine months ended | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (in thousands) | September 30, | September 30, | |||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||
| Net (loss) income | $ | (4,701 | ) | $ | (96 | ) | $ | (8,304 | ) | $ | 218 |
| Adjustments: | |||||||||||
| Interest expense (income), net | 17 | 11 | 56 | 20 | |||||||
| Income taxes | (55 | ) | - | (999 | ) | - | |||||
| Depreciation | 7 | 11 | 34 | 23 | |||||||
| Amortization | 350 | 44 | 1,050 | 88 | |||||||
| EBITDA | **** | (4,382 | ) | **** | (30 | ) | **** | (8,163 | ) | **** | 349 |
| Goodwill impairment | 2,255 | - | 2,255 | - | |||||||
| Non-cash stock-based compensation | 614 | 81 | 1,456 | 220 | |||||||
| Acquisition Costs | 39 | 39 | 829 | 193 | |||||||
| Change in FV of earnout | - | (930 | ) | - | |||||||
| Post-employment agreement | - | 36 | - | 107 | |||||||
| Adjusted EBITDA | $ | (1,474 | ) | $ | 126 | $ | (4,553 | ) | $ | 869 |
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