8-K
Vislink Technologies, Inc. (VISL)
UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM8-K
CURRENTREPORT
Pursuantto Section 13 or 15(d)
ofthe Securities Exchange Act of 1934
Dateof Report (Date of earliest event reported): August 13, 2020
VislinkTechnologies, Inc.
(Exactname of registrant as specified in its charter)
| Delaware | 001-35988 | 20-5856795 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission<br><br> <br>File Number) | (I.R.S. Employer<br><br> <br>Identification No.) |
101Bilby Road, Suite 15, Building 2
Hackettstown,NJ 07840
(Addressof principal executive offices)
Registrant’stelephone number, including area code: (941) 953-9035
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<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| [ ] | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement<br> 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 Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.00001 per share | VISL | The Nasdaq Capital Market |
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. [ ]
Item2.02. Results of Operations and Financial Conditions.
On August 13, 2020, Vislink Technologies, Inc. (the “Company” or “Vislink”) issued a press release, a copy of which is furnished herewith as Exhibit 99.1, announcing the Company’s financial results for the quarter ended June 30, 2020 (the “Press Release”).
The information contained in Item 2.02 of this Current Report on Form 8-K, including the Press Release, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. In addition, this information shall not be deemed incorporated by reference into any of the Company’s filings with the Securities and Exchange Commission, except as shall be expressly set forth by specific reference in any such filing.
CautionaryNote Regarding Forward-Looking Statements
Certain statements in this communication and the Press Release are forward-looking statements that involve substantial risks and uncertainties for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995.
The Press Release contains forward-looking statements that involve substantial risks and uncertainties for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical fact included in the Press Release, including those regarding the Company’s strategy, future operations, future financial position, projected expenses, prospects, plans, objectives of management and financial reporting abilities, maintenance of new product pipeline and technical innovation, the Company’s expected focus on financial discipline and cost reduction plans, planned adjustments to its workforce, expected market opportunities across the Company’s operating segments, the Company’s expectations as to its operational turnaround, including operational efficiencies and future capital allocation, the effects of the COVID-19 pandemic, the sufficiency of the Company’s capital resources to fund the Company’s operations and any statements regarding future results are forward-looking statements. Vislink may not actually achieve the plans, carry out the intentions or meet the expectations or projections disclosed in any forward-looking statements such as the foregoing and you should not place undue reliance on such forward-looking statements. Such statements are based on management’s current expectations and involve risks and uncertainties, including those discussed in Vislink’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on April 1, 2020 and in subsequent filings with, or submissions to, the SEC.
The statements made in this Current Report on Form 8-K and the Press Release speak only as of the date stated herein, and subsequent events and developments may cause the Company’s expectations and beliefs to change. While the Company may elect to update these forward-looking statements publicly at some point in the future, the Company specifically disclaims any obligation to do so, whether as a result of new information, future events or otherwise, except as required by law. These forward-looking statements should not be relied upon as representing the Company’s views as of any date after the date stated herein.
Item9.01 Financial Statements and Exhibits.
(d)Exhibits.
| Exhibit<br><br> <br>No. | Description of Exhibit |
|---|---|
| 99.1 | Press<br> Release dated August 13, 2020 |
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.
| VISLINK TECHNOLOGIES, INC. | ||
|---|---|---|
| Date:<br> August 14, 2020 | ||
| By: | /s/ Carleton M. Miller | |
| Name: | Carleton<br> M. Miller | |
| Title: | Chief<br> Executive Officer |
Exhibit99.1
VislinkTechnologies Reports Q2 2020 Financial Results,
CompletesFirst Phase of Turnaround
RevenuesIncreased 11% and EBITDA Improved $3.5 Million Over Q1 2020, Best Financial Performance Since Company IPO
HACKETTSTOWN,NJ — August 13, 2020 — Vislink Technologies, Inc. (“Vislink” or the “Company”) (Nasdaq: VISL) announced its results for the second quarter ended June 30, 2020. Company management will host a live webcast on Friday, August 14, 2020 at approximately 10:00 a.m. ET to review the Company’s financial and operating results and provide a general business update (see webcast details below).
FinancialHighlights
| ● | Revenues<br> for the three months ended June 30, 2020 were $6 million, compared to $5.4 million in the first quarter of 2020 and $7.4 million<br> for the three months ended June 30, 2019. |
|---|---|
| ● | EBITDA<br> (earnings before interest, taxes depreciation and amortization) was a negative $421,000 for the three months ended June 30,<br> 2020, compared to a negative $3.9 million for the three months ended March 31, 2020 and a negative $1.9 million for the three<br> months ended June 30, 2019. |
| ● | Ended<br> the second quarter 2020 with $5.1 million in cash, compared to $2.5 million at the end of the first quarter of 2020. |
| ● | Gross<br> margins were 59.6% of revenue in the second quarter of 2020, compared to 47% in the first quarter of 2020 and 52.1% in the<br> second quarter of 2019. |
| ● | Net<br> loss attributable to common shareholders was $778,000, or $(0.05) per share in the second quarter of 2020 compared to a net<br> loss of $4.4 million, or $(0.09) per share in the first quarter of 2020 and a net loss of $3.6 million, or $(10.70) per share<br> in the second quarter of 2019. |
| ● | Net<br> loss attributable to common shareholders was $5.2 million, or $(0.45) per share for the six months ended June 30, 2020 compared<br> to a net loss of $6.7 million, or $(20.44) per share for the six months ended June 30, 2019. |
SecondQuarter Business Highlights
| ● | Right-sized<br> the business through a focus on cost reduction and conservation of cash. |
|---|---|
| ● | Addressed<br> supply chain issues to improve efficiency and increase liquidity. |
| ● | Created<br> four solution areas: Live Event Production, Military/Government, Satellite Communications and Managed Services. |
| ● | Re-energized<br> the Satcom solutions vertical. |
| ● | Realigned<br> sales teams in line with target market priorities. |
| ● | Re-prioritized<br> research and development to maintain new product pipeline and technical innovation. |
| ● | Reconstituted<br> senior leadership and board of directors. |
“In the second quarter, despite a challenging business environment caused by the effects of the COVID-19 pandemic, we are pleased to report that our revenues increased by 11%, our net loss narrowed and EBITDA improved by $3.5 million compared to the first quarter of 2020,” said Carleton Miller, CEO of Vislink Technologies. “We built on the strong actions we took in the previous quarter to make significant progress in our turnaround, of which the first phase is now complete. By adhering to the cost reduction plan that we previously instituted, in addition to our ongoing focus on fiscal discipline, we were able to realize significant improvements in our operations.”
Mr. Miller continued, “We have now rightsized the organization across our four solution areas of Live Event Production, Military/Government, Satellite Communications and Managed Services, and we continue to see opportunities across these areas that will drive top line growth for us in the future. With our financial and operational foundations stabilized, we are excited to embark on the second phase of our operational turnaround, which will include increased operational efficiencies and capital allocation to growth opportunities.”
FinancialResults Webcast Details
On Friday, August 14, 2020, Vislink’s CEO, Carleton Miller, and CFO, Michael Bond, will host a webcast at approximately 10:00 a.m. ET to review the Company’s financial and operating results and provide a general business update. This webcast will be live at https://services.choruscall.com/links/visl200814.html. Investors will be able to submit questions during the webcast.
Non-GAAPFinancial Measure: EBITDA
To supplement our financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), we are presenting EBITDA in this earning release and the related earning conference call. EBITDA is a non-GAAP financial measure that is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similarly titled measures presented by other companies. We define EBITDA as our net income (loss), excluding the impact of depreciation and amortization expense and interest income/expense. We have presented EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. In particular, we believe that excluding the impact of these expenses in calculating EBITDA can provide a useful measure for period-to-period comparisons of our core operating performance.
AboutVislink Technologies, Inc.
Vislink is a global technology business specializing in the collection, delivery, and management of high quality, live video and associated data from the scene of the action to the viewing screen. For the broadcast markets, Vislink provides solutions for the collection of live news, sports, and entertainment events. Vislink also furnishes the surveillance and defense markets with real-time video intelligence solutions using a variety of tailored transmission products. The Vislink team also provides professional and technical services utilizing a staff of technology experts with decades of applied knowledge and real-world experience to the areas of a terrestrial microwave, satellite, fiber optic, surveillance, and wireless communications systems, to deliver a broad spectrum of customer solutions. Vislink’s shares of Common Stock are publicly traded on the Nasdaq Capital Market under the ticker symbol “VISL.” For more information, visit www.vislink.com.
Noteon Forward-looking Statements
Certain statements in this press release are forward-looking statements that involve substantial risks and uncertainties for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. This press release contains forward-looking statements that involve substantial risks and uncertainties for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical fact included in this press release, including those regarding the Company’s strategy, future operations, future financial position, projected expenses, prospects, plans, objectives of management and financial reporting abilities, maintenance of new product pipeline and technical innovation, the Company’s expected focus on financial discipline and cost reduction plans, planned adjustments to its workforce, expected market opportunities across the Company’s operating segments, the Company’s expectations as to its operational turnaround, including operational efficiencies and future capital allocation, the effects of the COVID-19 pandemic, the sufficiency of the Company’s capital resources to fund the Company’s operations and any statements regarding future results are forward-looking statements. Vislink may not actually achieve the plans, carry out the intentions or meet the expectations or projections disclosed in any forward-looking statements such as the foregoing and you should not place undue reliance on such forward-looking statements. Such statements are based on management’s current expectations and involve risks and uncertainties, including those discussed in Vislink’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on April 1, 2020 and in subsequent filings with, or submissions to, the SEC.
The statements made in this press release speak only as of the date stated herein, and subsequent events and developments may cause the Company’s expectations and beliefs to change. While the Company may elect to update these forward-looking statements publicly at some point in the future, the Company specifically disclaims any obligation to do so, whether as a result of new information, future events or otherwise, except as required by law. These forward-looking statements should not be relied upon as representing the Company’s views as of any date after the date stated herein.
Formore information:
investors@vislink.com
VISLINKTECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITEDCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVELOSS
(INTHOUSANDS EXCEPT NET LOSS PER SHARE DATA)
| For the Three Months Ended | For the Six Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | June 30, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Revenue | $ | 6,008 | $ | 7,352 | $ | 11,360 | $ | 15,558 | ||||
| Cost of revenue and operating expenses | ||||||||||||
| Cost of components and personnel | 2,427 | 3,516 | 5,248 | 7,643 | ||||||||
| Inventory valuation adjustments | 24 | 42 | 49 | 89 | ||||||||
| General and administrative expenses | 3,321 | 5,550 | 9,521 | 10,733 | ||||||||
| Research and development expenses | 559 | 866 | 1,215 | 1,792 | ||||||||
| Gain on lease termination | — | — | (21 | ) | — | |||||||
| Amortization and depreciation | 334 | 588 | 757 | 1,177 | ||||||||
| Total cost of revenue and operating expenses | 6,665 | 10,562 | 16,769 | 21,434 | ||||||||
| Loss from operations | (657 | ) | (3,210 | ) | (5,409 | ) | (5,876 | ) | ||||
| Other income (expense) | ||||||||||||
| Changes in fair value of derivative liabilities | (98 | ) | 747 | (81 | ) | 673 | ||||||
| Loss on conversion of debentures | — | (48 | ) | — | (48 | ) | ||||||
| Gain on settlement of related party obligations | — | — | 331 | — | ||||||||
| Interest expense, net | (23 | ) | (1,064 | ) | (49 | ) | (1,414 | ) | ||||
| Total other income (expense) | (121 | ) | (365 | ) | 201 | (789 | ) | |||||
| Net loss | $ | (778 | ) | $ | (3,575 | ) | $ | (5,208 | ) | $ | (6,665 | ) |
| Basic and diluted loss per share | $ | (0.05 | ) | $ | (10.70 | ) | $ | (0.45 | ) | $ | (20.44 | ) |
| Weighted average number of shares outstanding: | ||||||||||||
| Basic and diluted | 14,805 | 334 | 11,460 | 326 | ||||||||
| Comprehensive loss: | ||||||||||||
| Net loss | $ | (778 | ) | $ | (3,575 | ) | $ | (5,208 | ) | $ | (6,665 | ) |
| Unrealized gain (loss) on currency translation adjustment | (28 | ) | 34 | 249 | 1 | |||||||
| Comprehensive loss | $ | (806 | ) | $ | (3,541 | ) | $ | (4,959 | ) | $ | (6,664 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
VISLINKTECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSEDCONSOLIDATED BALANCE SHEETS
(INTHOUSANDS EXCEPT SHARE AND PER SHARE DATA)
| December 31, | |||||
|---|---|---|---|---|---|
| 2019 | |||||
| ASSETS | |||||
| Current assets | |||||
| Cash | 5,065 | $ | 1,737 | ||
| Accounts receivable, net | 4,479 | 6,714 | |||
| Inventories, net | 8,180 | 7,674 | |||
| Prepaid expenses and other current assets | 874 | 660 | |||
| Total current assets | 18,598 | 16,785 | |||
| Right of use assets, operating leases | 1,654 | 1,925 | |||
| Property and equipment, net | 1,846 | 1,972 | |||
| Intangible assets, net | 2,391 | 2,922 | |||
| Total assets | 24,489 | $ | 23,604 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Current liabilities | |||||
| Accounts payable | 2,789 | $ | 6,784 | ||
| Accrued expenses | 1,961 | 1,912 | |||
| Notes payable | 412 | 339 | |||
| Current portion of PPP loan | 424 | — | |||
| Operating lease obligations, current | 334 | 821 | |||
| Due to related parties | — | 505 | |||
| Customer deposits and deferred revenue | 1,323 | 2,821 | |||
| Derivative liabilities | 111 | 30 | |||
| Total current liabilities | 7,354 | 13,212 | |||
| Long-term portion of PPP loan | 744 | — | |||
| Operating lease obligations, net of current portion | 1,265 | 1,163 | |||
| Total liabilities | 9,363 | 14,375 | |||
| Commitments and contingencies (See Note 10) | |||||
| Stockholders’ equity | |||||
| Preferred stock – 0.00001 par value per share: 10,000,000 shares authorized as of June 30, 2020, and December 31, 2019; 0 shares issued and outstanding as of June 30, 2020, and December 31, 2019 | — | — | |||
| Common stock – 0.00001 par value per share, 100,000,000 shares authorized, 16,103,613 and 3,594,548 shares issued and 16,100,954 and 3,591,889 outstanding as of June 30, 2020 and December 31, 2019, respectively | — | — | |||
| Additional paid-in capital | 272,727 | 261,871 | |||
| Accumulated other comprehensive income | 456 | 207 | |||
| Treasury stock, at cost – 2,659 shares at June 30, 2020, and December 31, 2019, respectively | (277 | ) | (277 | ) | |
| Accumulated deficit | (257,780 | ) | (252,572 | ) | |
| Total stockholders’ equity | 15,126 | 9,229 | |||
| Total liabilities and stockholders’ equity | 24,489 | $ | 23,604 |
All values are in US Dollars.
The accompanying notes are an integral part of these condensed consolidated financial statements.
Reconciliationof GAAP to Non-GAAP Results
VISLINKTECHNOLOGIES, INC.
RECONCILIATIONOF GAAP to NON-GAAP RESULTSQUARTER ENDING JUNE 30, 2020(IN THOUSANDS)
| Reconciliation of net income to EBITDA | |||
|---|---|---|---|
| Net loss | $ | (778 | ) |
| interest expense | (23 | ) | |
| Amortization and depreciation | 334 | ||
| EBITDA | $ | (421 | ) |