8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

---

Pursuant to Section 13 or 15(d) of the SecuritiesExchange Act of 1934

Date of Report (Date of earliest event reported): August 5, 2021

INNODATA INC.

(Exact name of registrant as specified in its charter)

Delaware	001-35774	13-3475943
(State or other jurisdiction of	(Commission File Number)	(I.R.S. Employer
incorporation)		Identification No.)
55 Challenger Road	07660
---	---
Ridgefield Park, NJ	(Zip Code)
(Address of principal executive offices)

---

Registrant's telephone number, including area code (201) 371-8000

(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<br>Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange<br>Act (17 CFR 240.14a-12)
---	---
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under<br>the Exchange Act (17 CFR 240.14d-2(b))
---	---
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under<br>the Exchange Act (17 CFR 240.13e-4(c))
---	---

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	INOD	The Nasdaq Stock Market LLC
Preferred Stock Purchase Right	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 ¨

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 August 5, 2021, Innodata Inc. issued a press release announcing its second quarter 2021 financial results. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, 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 shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01	Financial Statements and Exhibits.

(d) Exhibits

See Exhibit Index below.

Exhibit Index

Exhibit No.	Description
99.1	Press Release dated August 5, 2021.

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 thereunto duly authorized.

	INNODATA INC.
Date:  August 5, 2021	By:	/s/ Mark A Spelker
		Mark A. Spelker
		Chief Financial Officer & Executive Vice President

Exhibit 99.1

---

InnodataReports Second Quarter 2021 Results

---

Revenue up 23 percent from the year-ago quarter

AI-based solutions and industry platforms driving growth

---

NEWYORK – August 5, 2021 – INNODATA INC. (NASDAQ: INOD) today reported results for the second quarter ended June 30, 2021.

·	Revenue for the quarter<br>ended June 30, 2021 was $17.0 million, up 23% year over year.
·	Net loss for the quarter<br>ended June 30, 2021 was $0.1 million, or $0.00 per basic and diluted share, versus a net loss of $0.5 million, or $0.02 per basic<br>and diluted share, in the year-ago quarter.
---	---
·	Revenue for the first<br>six months of 2021 was $33.0 million, up 16% from the year-ago period.
---	---
·	Net income for the first<br>six months of 2021 was $0.3 million, or $0.01 per basic and diluted share, versus a net loss of $0.8 million, or $0.03 per basic and diluted<br>share, in the year-ago period.
---	---
·	Cash and cash equivalents<br>were $22.1 million at June 30, 2021 up from $17.6 million at December 31, 2020.
---	---

Amounts in this press release have been rounded. All percentages have been calculated using unrounded amounts.

Jack Abuhoff, CEO, said, “We’re pleased to be reporting a strong growth quarter. As a result of strong first-half bookings and late-stage pipeline opportunities, we anticipate continuing to achieve 20% or more year over year growth in the remaining quarters of the year. Moreover, we expect growth to accelerate in the second half of 2021 over the first half of 2021 with continued acceleration in 2022 driven by expansions in business from new and recently-won customers and pipeline growth as our expanding salesforce becomes fully productive.

“Operationally, we are executing very well. We have reduced structural costs by $6 million since the end of 2019 and this quarter our incremental revenues provided 78% gross margin reflecting the operating leverage in our business, allowing us to aggressively invest internally generated cash flow in short payback sales and marketing as well as product enhancement initiatives that we anticipate will lead to continued growth.

“We believe we are proving to be an indispensable partner to organizations - from Silicon Valley big tech to Fortune 500s to venture-funded AI start-ups – which seek to embrace artificial intelligence to modernize or streamline processes or to deliver fundamentally new experiences. We believe that AI implementations will significantly increase over the next several years, providing us with an exciting strategic path.”

Timingof Conference Call with Q&A

Innodata will conduct an earnings conference call, including a question-and-answer period, at 11:00 AM eastern time today. You can participate in this call by dialing the following call-in numbers:

The call-in numbers for the conference call are:

1-888-394-8218	(Domestic)
1 323-701-0225	(International)
1-888-203-1112	(Domestic Replay)
1-719-457-0820	(International Replay)

Passcode on both: 3117355

It is recommended that participants dial in approximately 10 minutes prior to the start of the call.  Investors are also invited to access a live Webcast of the conference call at the Investor Relations section of www.innodata.com. Please note that the Webcast feature will be in listen-only mode.

Call-in or Webcast replay will be available for 30 days following the conference call.

AboutInnodata

Innodata (NASDAQ: INOD) is a leading data engineering company. Prestigious companies across the globe turn to Innodata for help with their biggest data challenges. By combining advanced machine learning and artificial intelligence (ML/AI) technologies, a global workforce of over 3,500 subject matter experts, and a high-security infrastructure, we’re helping usher in the promise of digital data and ubiquitous AI.

ForwardLooking Statements

This press release may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Words such as “project,” “believe,” “expect,” “can,” “continue,” “could,” “intend,” “may,” “should,” “will,” “anticipate,” “indicate,” “forecast,” “predict,” “likely,” “goals,” “estimate,” “plan,” “potential,” or the negatives thereof and other similar expressions generally identify forward-looking statements, which speak only as of the date hereof.

These forward-looking statements are based on management’s current expectations, assumptions and estimates and are subject to a number of risks and uncertainties, including without limitation, the expected or potential effects of the novel coronavirus (COVID-19) pandemic and the responses of governments, the general global population, our customers, and the Company thereto; that contracts may be terminated by clients; projected or committed volumes of work may not materialize; continuing Digital Data Solutions segment reliance on project-based work and the primarily at-will nature of such contracts and the ability of these clients to reduce, delay or cancel projects; the likelihood of continued development of the markets, particularly new and emerging markets, that our services support; continuing Digital Data Solutions segment revenue concentration in a limited number of clients; potential inability to replace projects that are completed, canceled or reduced; our dependency on content providers in our Agility segment; difficulty in integrating and deriving synergies from acquisitions, joint venture and strategic investments; potential undiscovered liabilities of companies and businesses that we may acquire; potential impairment of the carrying value of goodwill and other acquired intangible assets of companies and businesses that we acquire; changes in our business or growth strategy; a continued downturn in or depressed market conditions, whether as a result of the COVID-19 pandemic or otherwise; changes in external market factors; the ability and willingness of our clients and prospective clients to execute business plans that give rise to requirements for our services; changes in our business or growth strategy; the emergence of new or growth in existing competitors; various other competitive and technological factors; our use of and reliance on information technology systems, including potential security breaches, cyber-attacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, client, employee or Company information, or service interruptions; and other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission.

Our actual results could differ materially from the results referred to in forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, uncertainty around the COVID-19 pandemic and the effects of the global response thereto and the risks discussed in Part I, Item 1A. “Risk Factors,” Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and other parts of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 15, 2021, as updated or amended by our other filings with the Securities and Exchange Commission. In light of these risks and uncertainties, there can be no assurance that the results referred to in the forward-looking statements will occur, and you should not place undue reliance on these forward-looking statements. We undertake no obligation to update or review any guidance or other forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by the Federal securities laws.

CompanyContact

Marcia Novero

Innodata Inc.

mnovero@innodata.com

(201) 371-8015

---

INNODATAINC. AND SUBSIDIARIES

CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Inthousands, except per-share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Revenues:
Services and Solutions	$	13,883		$	11,059		$	26,665		$	22,750
SaaS Platforms		3,166			2,804			6,351			5,643
Total		17,049			13,863			33,016			28,393
Direct operating costs		10,424			9,438			20,660			19,109
Foreign exchange (gain) loss		(15	)		244			(155	)		316
		10,409			9,682			20,505			19,425
Gross Profit		6,640			4,181			12,511	****		8,968
Operating expenses:
Research and development		323			357			604			669
Selling and marketing		3,531			1,768			6,180			3,922
General and administrative		3,126			2,336			5,721			4,490
Interest expense		4			28			14			70
		6,984			4,489			12,519			9,151
Loss from operations		(344	)		(308	)		(8	)		(183	)
Gain from loan forgiveness		580			-			580			-
Income (loss) before provision for income taxes		236			(308	)		572			(183	)
Provision for income taxes		366			169			293			574
Consolidated net income (loss)		(130	)		(477	)		279			(757	)
Income (loss) attributable to non-controlling interests		(27	)		7			(16	)		18
Net income (loss) attributable to Innodata Inc. and Subsidiaries	$	(103	)	$	(484	)	$	295	****	$	(775	)
Income (loss) per share attributable to Innodata Inc. and Subsidiaries:
Basic	$	(0.00	)	$	(0.02	)	$	0.01		$	(0.03	)
Diluted	$	(0.00	)	$	(0.02	)	$	0.01		$	(0.03	)
Weighted average shares outstanding:
Basic		26,522			24,409			26,199			24,405
Diluted		26,522			24,409			29,194			24,405

---

INNODATAINC. AND SUBSIDIARIES

CONDENSEDCONSOLIDATED BALANCE SHEETS

(Unaudited)

(Inthousands)

	June 30,  2021			December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	22,059		$	17,573
Accounts receivable, net		9,686			10,048
Prepaid expenses and other current assets		3,971			4,240
Total current assets		35,716			31,861
Property and equipment, net		7,892			7,227
Right-of-use asset, net		6,146			6,610
Other assets		2,391			2,563
Deferred income taxes, net		2,358			2,187
Intangibles, net		4,247			4,656
Goodwill		2,179			2,150
Total assets	$	60,929		$	57,254
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued expenses and other	$	9,542		$	4,925
Accrued salaries, wages and related benefits		5,719			5,719
Income and other taxes		3,678			5,000
Long-term obligations – current portion		1,245			1,712
Operating lease liability - current portion		1,048			990
Total current liabilities		21,232			18,346
Deferred income taxes		129			44
Long-term obligations, net of current portion		5,773			6,282
Operating lease liability, net of current portion		5,796			6,332
Total liabilities		32,930			31,004
Non-controlling interests		(3,406	)		(3,390	)
STOCKHOLDERS' EQUITY		31,405			29,640
Total liabilities and stockholders’ equity	$	60,929		$	57,254

---

INNODATAINC. AND SUBSIDIARIES

CONDENSEDCONSOLIDATED CASH FLOW INFORMATION

(Unaudited)

(Inthousands)

	Six Months Ended<br><br>June 30,
	2021			2020
Cash flows from operating activities:
Net income (loss)	$	279		$	(757	)
Non-cash expenses:
Depreciation and amortization		1,370			1,241
Gain on loan forgiveness		(580	)		-
Stock-based compensation		614			468
Deferred income tax		(61	)		(237	)
Pension amortization		322			396
Total		1,665			1,868
Changes in assets and liabilities		3,642			2,167
Cash flows from operating activities	$	5,586		$	3,278
Cash flows from investing activities	$	(1,473	)	$	(970	)
Cash flows from financing activities	$	413		$	353

---

INNODATAINC. AND SUBSIDIARIES

CONSOLIDATEDREVENUE

(Unaudited)

(Inthousands)

---

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
DDS	$	12,997	$	9,858	$	24,760	$	20,267
Synodex		886		1,201		1,905		2,483
Agility		3,166		2,804		6,351		5,642
Total Revenue	$	17,049	$	13,863	$	33,016	$	28,393

---

---

---