ATDS 8-K
Data443 Risk Mitigation, Inc. (ATDS)
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): August 7, 2020
DATA443 RISK MITIGATION, INC.
(Exact Name of Registrant as Specified in Charter)
| Nevada | 000-30542 | 86-0914051 | ||
| (State
or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS
Employer Identification No.) |
101
J Morris Commons Lane, Suite 105
Morrisville, North Carolina 27560
(Address of Principal Executive Offices)
Registrant’s telephone number, including area code: 919-858-6542
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 |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| none | N/A | N/A |
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 [X]
If an emerging growth company, indicate by checkmark 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 Conditions.
On August 07, 2020, Data443 Risk Mitigation, Inc. (the “Company”) issued a press release reporting our financial results for the second quarter and the six (6) months ended June 30, 2020 (the “Press Release”). The Press Release is available on the Company’s website at: https://data443.com/pr-data443-reports-record-second-quarter-results-2020/. A copy of the Press Release is also furnished as Exhibit 99.1 to this Current Report on Form 8-K (the “Report”).
ITEM 7.01 Regulation FD Disclosure.
On August 12, the Company hosted a conference call to discuss its financial and operating results for the second quarter and the six (6) months ended June 30, 2020. The materials presented during the conference call are furnished as Exhibit 99.2 to this Report. A recording of the entire conference call is available through August 26, 2020 on the Company’s website at: https://data443.com/upcoming_events/.
The information set forth in this Report, including Exhibit 99.1 and Exhibit 99.2, (i) are being “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section; and, (ii) shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing, except as expressly set forth by specific reference to such filing.
The statements in this Report include statements regarding the intent, belief or current expectations of the Company and members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “strives,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements, including as a result of those factors set forth in the Risk Factors section of the Company’s most recent annual report on Form 10-K for the year ended December 31, 2019 filed on April 17, 2020 and all other filings with the Securities and Exchange Commission after that date. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, or revise forward-looking unless required by law.
ITEM 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are furnished with this report:
| Exhibit No. | Exhibit Description | ||
| 99.1 | Press Release issued by the Company on August 07, 2020. | ||
| 99.2 | Materials presented by the Company during the Company’s conference call hosted on August 12, 2020. |
| 2 |
SIGNATURE
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.
| Date: 13 August 2020 | DATA443 RISK MITIGATION, INC. | |
| By: | /S/ JASON REMILLARD | |
| Jason Remillard, | ||
| Chief Executive Officer | ||
| 3 |
Exhibit 99.1
DATA443 REPORTS RECORD SECOND QUARTER RESULTS:
● 80% INCREASE IN NET BILLINGS
●
RECORD SURGE IN NET BOOKINGS
RESEARCH TRIANGLE PARK, NC, August 7, 2020 – Data443 Risk Mitigation, Inc. (“Data443” or the “Company”) (OTCPK: ATDS), a leading data security and privacy software company, today announced record operational and financial results for its second quarter (ended June 30, 2020), and for its first half of fiscal year 2020.
Management Commentary
Jason Remillard, CEO of Data443, commented, “Today’s results for the first half of 2020 truly highlights the strength of our team, the quality of our product offerings, and the priority positioning of our industry. Even in this challenging and unprecedented time of pandemic, we have proven that we continue to serve our clients and grow our business, highlighting the urgency and value of our technology offerings. Our name brand global multinational clients, as well as our regular mom and pop clients, rely on Data443 for their most sensitive and important data privacy needs. Our performance is strong evidence of the important role we play in the security and success of our clients.”
“We have continued to execute on our business plan, building momentum on both sales and product development. We secured new contracts with the Pittsburgh Steelers and the Miami Dolphins, opening a Company initiative to expand our offerings to sports teams. We also successfully launched our Zoom Chat Privacy canner and our WordPress Privacy Badge, both of which have shown great momentum for us in the early going. We anticipate that customer growth overall will continue to improve as more data-driven demands shift from central offices to more home and remote-based work settings.”
“For the greater part of 2020, we have dedicated significant time and resources to build our internal infrastructure, including our Data Center capabilities and direct to consumer capabilities. We continue to realize the benefits of product and technology investments made in 2018 and 2019. This is reflected in our continued growth of our deferred revenues, and our continued extinguishment of short and long-term debt. Our advanced infrastructure will scale to ensure we can service our continued expanding client base.”
“I will be holding a business update conference call on Wednesday, August 12th at 4:30PM ET to provide greater detail on our plans for the rest of 2020 and going forward. I believe that Data443 is in the best positioning of its relatively short history, and we have an impressive story to tell,” concluded Mr. Remillard.
Business Highlights for the First Half of Fiscal Year 2020 and Year-to-Date
| ● | Concluded litigation settlement resulting in the cancellation of 2 billion (pre-split) shares | |
| ● | Completed all payments related to ARALOC acquisition | |
| ● | Secured shareholder-friendly forbearance agreements for outstanding convertible notes | |
| ● | Launched Global Privacy Manager™, industry’s only end-to-end privacy compliance, governance, and consumer loss-mitigation platform | |
| ● | Launched new Data Center in the Raleigh-Durham Research Triangle Region (adjacent to our headquarters) | |
| ● | Released new CCPA Framework Plugin for WordPress | |
| ● | Released Privacy Badge – an industry first, with over 500 subscribers in 2 months | |
| ● | Launched first Privacy Scanner for the world’s leading online video communication platform | |
| ● | Secured contract renewal with the Miami Dolphins for the ARALOC Secure Sports Management Platform | |
| ● | Won new contract with the Pittsburgh Steelers for the ARALOC Secure Sports Management Platform | |
| ● | Appointed Mr. Omkhar Arasaratnam to our Advisory Board |
Second Quarter 2020 Financial Results:
We had recordnet billings of $869,000 for the three months ended June 30, 2020, compared to $483,000 in the prior year period. We recognized $466,000 of revenue during the second quarter of fiscal year 2020, compared to $359,000 of revenue during the second quarter of fiscal year 2019. Deferred revenues were $1,212,000 as of June 30, 2020, an increase of $303,000 from $954,000 as of December 31, 2019.
General and administrative expenses for the second quarter of fiscal year 2020 amounted to $1,666,000 compared to $1,197,000 for the three months ended June 30, 2019, which is an increase of $469,000, or 39%. The expenses for the second quarter of fiscal year 2020 primarily consisted of management costs, costs to integrate assets we acquired and to expand sales, audit and review fees, filing fees, professional fees, and other expenses, including the re-classification of sales-related management expenses, in connection with the projected growth of the Company’s business.
Sales and marketing expense for the three months ended June 30, 2020 amounted to $27,000, as compared to $156,000 for the three months ended June 30, 2019, which is a decrease of $129,000, or 83%. The expenses for the second quarter of fiscal year 2020 primarily consisted of developing our sales operation.
The net loss for the three months ended June 30, 2020 was $2,573,000 compared to a gain of $1,194,000 for the three months ended June 30, 2019. The net loss for the three months ended June 30, 2020 was mainly derived from a loss on change in fair value of derivative liability of $773,000 associated with convertible notes payable and gross margin of $447,000, offset in part by general and administrative, and sales and marketing expenses incurred. The net gain for the three months ended June 30, 2019 was mainly derived from a gain on change in fair value of derivative liability of $2,421,000 associated with convertible notes payable and gross margins of $339,000 offset in part by general and administrative, and sales and marketing expenses incurred.
First Half 2020 Financial Results
We had net billings for the six months ended June 30, 2019 of $1,535,000, compared to $957,000 in the prior year period. We recognized $944,000 of revenue during the six months ended June 30, 2020, compared to $501,000 of revenue during the six months ended June 30, 2019.
General and administrative expenses for the six months ended June 30, 2020 amounted to $3,091,000, as compared to $1,872,000 for the six months ended June 30, 2019, an increase of $1,219,000, or 65%. The expenses for the six months ended June 30, 2020 primarily consisted of management costs, costs to integrate assets we acquired and to expand sales, audit and review fees, filing fees, professional fees, and other expenses.
Sales and marketing expense for the six months ended June 30, 2020 amounted to $148,000, compared to $382,000 for the six months ended June 30, 2019, which is a decrease of $234,000, or 61%. The expenses for the six months ended June 30, 2020 primarily consisted of developing a sales operation.
The net loss for the six months ended June 30, 2020 was $12,754,000 as compared to a gain of $7,224,000 for the six months ended June 30, 2019. The net loss for the six months ended June 30, 2020 was mainly derived from a loss on change in fair value of derivative liability of $9,278,000, associated with convertible notes payable and gross margin of $890,000, offset in part by general and administrative, and sales and marketing expenses incurred. The net gain for the six months ended June 30, 2019 was mainly derived from a gain on change in fair value of derivative liability of $9,234,000, associated with convertible notes payable and gross margin of $462,000, offset in part by general and administrative, and sales and marketing expenses incurred.
Liquidity
As of June 30, 2020, we had cash in the amount of $549,000, accounts receivable of $34,000, and other current assets of $9,000, as compared to cash of $19,000, accounts receivable of $64,000, and other current assets of $9,000 as of December 31, 2019.
Webcast and Conference Call Information
Data443 will host a business update conference call on Wednesday, August 12th at 4:30PM ET. Investors and other interested parties may submit their questions ahead of time by emailing Investor Relations at [email protected] – Online registration is available at: https://us02web.zoom.us/webinar/register/WN_WEsSfumvRuiaejOENugF1w
About Data443 Risk Mitigation, Inc.
Data443 Risk Mitigation, Inc. (OTCPK: ATDS), is the de facto industry leader in Data Privacy Solutions for All Things Data Security, providing software and services to enable secure data across local devices, network, cloud, and databases, at rest and in flight. Its suite of products and services is highlighted by: (i) ARALOC™, which is a market leading secure, cloud-based platform for the management, protection and distribution of digital content to the desktop and mobile devices, which protects an organization’s confidential content and intellectual property assets from leakage — malicious or accidental — without impacting collaboration between all stakeholders; (ii) ArcMail ™, which is a leading provider of simple, secure and cost-effective email and enterprise archiving and management solutions; (iii) ClassiDocs™, the Company’s award-winning data classification and governance technology, which supports CCPA, LGPD and GDPR compliance; (iv) ClassiDocs™ for Blockchain, which provides an active implementation for the Ripple XRP that protects blockchain transactions from inadvertent disclosure and data leaks; (v) Data443™ Global Privacy Manager, the privacy compliance and consumer loss mitigation platform which is integrated with ClassiDocs™ to do the delivery portions of GDPR and CCPA as well as process Data Privacy Access Requests – removal request – with inventory by ClassiDocs™; (vi) Data443™ Chat History Scanner, which scans chat messages for Compliance, Security, PII, PI, PCI & custom keywords; (vii) DATAEXPRESS®, the leading data transport, transformation and delivery product trusted by leading financial organizations worldwide; (viii) The CCPA Framework WordPress plugin, which enables organizations of all sizes to comply with the CCPA privacy framework; and (ix) the GDPR Framework WordPress plugin, with over 30,000 active users it enables organizations of all sizes to comply with the GDPR and other privacy frameworks. For more information, please visit http://www.data443.com
Forward-Looking Statements
The statements contained in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursuant,” “target,” “continue,” and similar expressions are intended to identify such forward-looking statements. The statements in this press release that are not historical statements, including statements regarding Data443’s plans, objectives, future opportunities for Data443’s services, future financial performance and operating results and any other statements regarding Data443’s future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts, are forward-looking statements within the meaning of the federal securities laws. These statements are not guarantees of future performance and are subject to numerous risks, uncertainties, and assumptions, many of which are beyond Data443’s control, and which could cause actual results to differ materially from the results expressed or implied by the statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict, and include, without limitation, results of litigation, settlements and investigations; actions by third parties, including governmental agencies; volatility in customer spending; global economic conditions; ability to hire and retain personnel; loss of, or reduction in business with, key customers; difficulty with growth and integration of acquisitions; product liability; cybersecurity risk; anti-takeover measures in our charter documents; and, the uncertainties created by the ongoing outbreak of a respiratory illness caused by the 2019 novel coronavirus that was recently named by the World Health Organization as COVID-19. These and other important risk factors are described more fully in our reports and other documents filed with the Securities and Exchange Commission (“the SEC”), including under (i) “Part I, Item 1A. Risk Factors”, in our Registration Statement on Form 10 filed with the SEC on January 11, 2019 and amended on April 24, 2019; (ii) “Part I, Item 1A. Risk Factors”, in our Annual Report on Form 10-K filed with the SEC on 17 April 2020; and, (iii) subsequent filings. All information provided in this release is as of July 30, 2020. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. Except as otherwise required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.
The Data443™ logo, ClassiDocs™ logo, ARALOC™ logo and DATAEXPRESS® are registered trademarks of Data443 Risk Mitigation, Inc.
All product names, trademarks and registered trademarks are property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, trademarks and brands does not imply endorsement.
All other trademarks cited herein are the property of their respective owners.
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Exhibit 99.2
