Intellinetics, Inc. Reports Fourth Quarter and Year-End Results


Record Annual Software as a Service and Overall Revenue;
Record Operating Cash Flow

COLUMBUS, OH, March 24, 2022 (GLOBE NEWSWIRE) -- Intellinetics, Inc. (OTCQB: INLX), a cloud-based document solutions provider, announced financial results for the three and twelve months ended December 31, 2021.

2021 Fourth Quarter Financial Highlights

  • Total Revenue increased 2% from the same period in 2020.
  • Software as a Service Revenue increased 31% from the same period in 2020.
  • Net Income of $26,295, compared to Net Loss of $1,427,307 from the same period in 2020.
    • Q4 2021 includes expense of $64,203 of change in fair value of earnout liabilities expense, compared to expense of $1,552,800 in 2020.
  • Adjusted EBITDA of $337,925 compared to an adjusted EBITDA of $361,188 from the same period in 2020.

2021 Twelve Month Financial Highlights

  • Total Revenue increased 39% from the same period in 2020.
  • Software as a Service Revenue increased 37% from the same period in 2020.
  • Net Income of $1,357,951, compared to Net Loss of $2,200,201 from the same period in 2020.
    • 2021 includes expense of $141,414 of change in fair value of earnout liabilities expense, compared to expense of $1,554,800 in 2020.
    • 2021 includes gain on retirement of debt of $845,083 from PPP loan forgiveness.
  • Adjusted EBITDA of $1,670,087, an improvement of $867,125 compared to adjusted EBITDA of $802,962 from the same period in 2020.

Summary – 2021 Fourth Quarter Results

Revenues for the three months ended December 31, 2021 were $2,744,038 as compared with $2,695,805 for the same period in 2020. The increase in our software as a service and storage and retrieval more than offset slight reductions in sale of software and professional services. Professional services were impacted by the COVID resurgence in November and December 2021. Intellinetics reported net income of $26,295 and a net loss $1,427,307 for the three months ended December 31, 2021 and 2020, respectively, representing an improvement of $1,453,602. The net loss in 2020 was primarily a result of a charge taken due to a change in fair value of earnout liabilities of $1,554,800 relating to our 2020 acquisitions. Basic and diluted net income per share for the three months ended December 31, 2021 was $0.01. Basic and diluted net loss per share for the three months ended December 31, 2020 was $0.51. Our adjusted EBITDA improved year over year by $867,125, which was driven by improved operations and demonstrates the value of the 2020 acquisitions.

Summary – 2021 Twelve Month Results

Revenues for the twelve months ended December 31, 2021 were $11,460,265 as compared with $8,253,391 for the same period in 2020. The increase in our professional services and storage and retrieval revenues is primarily due to the inclusion of a full twelve months of revenues from our Graphic Sciences, Inc. subsidiary acquired in 2020, compared to the same period in 2020 that only included approximately ten months of revenues from that business. The year-over-year increase is amplified by the weak second quarter of 2020, due to the stay-at-home orders and resulting curtailment of revenue in that period, as well as the continued strong growth of our software as a sales revenues. We reported a net income of $1,357,951 and a net loss of $2,200,201 for the twelve months ended December 31, 2021 and 2020, respectively, representing an improvement of $3,558,152. The improved net income was the result of improved operating results, no significant transaction costs in 2021, a gain on extinguishment of debt of $845,083 from the full forgiveness of our PPP loan, and change in fair value of earnout of $141,414 in 2021 compared to $1,554,800 in 2020.

2021 Operational Highlights

 Positive operating cash flow of $1,389,996 for the twelve months ended December 31, 2021.
 Positive net income and positive adjusted EBITDA for all four quarters of 2021.
 Integrations of acquisitions of Graphic Sciences (March 2, 2020) and CEO Imaging Systems (April 24, 2020) substantially complete despite pandemic challenges.
 Invested in new warehouse to support growth of our storage and retrieval services, which increases box storage capacity more than 120%, and completed consolidation of warehouses from four to two for more logistics efficiency.
 Expanded K-12 footprint, bringing us to over 250 school districts at the time of this release.

James F. DeSocio, President & CEO of Intellinetics, stated, “We achieved our goal of improved revenue numbers from Q4 of 2020 to Q4 of 2021, including 31% SAAS revenue growth, despite the renewed Omicron headwinds we faced in the fourth quarter of 2021. For the eighth straight quarter we showed positive Adjusted EBITDA and have surpassed $300,000 of positive Adjusted EBITDA for the sixth straight quarter. For fiscal year 2021 we not only beat our 2021 revenue goals including software as a service and all recurring revenue goals, we have also surpassed our 2020 revenue numbers by $3.2 million. This has been a great year for Intellinetics despite the many challenges we have faced with COVID and the onset of inflationary pressures.

“Our teams continue to perform at a high level. In 2021, we invested in our new records center and our sales and marketing teams. Our development team continues to deliver industry and customer requested enhancements. We closed 342 orders in 2021, 31% of which were new customer logos for close to $5.9 million in order value, most of which will be recognized over the next one to two years. Our success validates our strategy of both winning new logos and continuing to cross sell to our existing customer base.

“I’m excited for all our target markets as well. We are positioned for 2022 better than ever in our history, and expect to build on the positive Adjusted EBITDA of 2021 while we’re executing on our plan to drive revenue growth in 2022.”

Conference Call

Intellinetics is holding a conference call to discuss these results on Thursday, March 24, 2022, at 4:30 p.m. Eastern Time. The conference call can be accessed by dialing +1 929 205 6099 and providing passcode 83687945879#. If you are unable to participate during the live call, a replay of the conference call will be available approximately two hours after the completion of the call through April 30, 2022. To listen to the replay, the call will be archived on the company’s website at

About Intellinetics, Inc.

Intellinetics, Inc., located in Columbus, Ohio, empowers organizations to manage, store and protect their important documents and data. The company offers its IntelliCloudTM content management platform, in addition to business process outsourcing (BPO), document and micrographics scanning services, and records storage. Intellinetics guides companies through the digital transformation process to reduce risk, strengthen compliance and enable anytime, anywhere access to mission critical forms and documents. From highly regulated industries like Healthcare/Human Service Providers, K-12, Public Safety, and State and Local Governments, to businesses looking to move away from paper-based processes, Intellinetics is the all-in-one, compliant, document management solution. For additional information, please visit

Cautionary Statement

Statements in this press release which are not purely historical, including statements regarding future business and growth, future revenues, including 2022 revenues and future revenue streams from new and existing customers, 2022 Adjusted EBITDA, future cash flow and other synergies associated with our recent acquisitions of Graphic Sciences and CEO Imaging and the success of our integration efforts, our other and service offerings and partnerships, and in any other industry, market, initiative, service or innovation; cross-selling opportunities Intellinetics’ future revenues, revenue consistency, growth and long-term value, including trends in revenue growth; growth of software as a service, professional services, and maintenance revenue; market penetration; execution of Intellinetics’ business plan, strategy, direction and focus; and other intentions, beliefs, expectations, representations, projections, plans or strategies regarding future growth, financial results, and other future events are forward-looking statements. The forward-looking statements involve risks and uncertainties including, but not limited to, the risks associated with the effect of changing economic conditions including inflationary pressures, the impact of COVID-19 and related governmental actions and orders on customers, suppliers, employees and the economy and our industry, Intellinetics’ ability to execute on its business plan and strategy, customary risks attendant to acquisitions, trends in the products markets, variations in Intellinetics’ cash flow or adequacy of capital resources, market acceptance risks, the success of Intellinetics’ solutions providers, including human services, health care, and education, technical development risks, and other risks, uncertainties and other factors discussed from time to time in its reports filed with or furnished to the Securities and Exchange Commission, including in Intellinetics’ most recent annual report on Form 10-K as well as subsequently filed reports on Form 8-K and Form 10-Q. Intellinetics cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Intellinetics disclaims any obligation and does not undertake to update or revise any forward-looking statements in this press release. Expanded and historical information is made available to the public by Intellinetics on its website at or at


Joe Spain, CFO
Intellinetics, Inc.

Non-GAAP Financial Measure

Intellinetics uses non-GAAP Adjusted EBITDA as a supplemental measure of our performance that is not required by, or presented in accordance with, accounting principles generally accepted in the United States (GAAP).

A non-GAAP financial measure is a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different from the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows of a company. Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to net income, operating income, or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities or a measure of our liquidity. Intellinetics urges investors to review the reconciliation of non-GAAP Adjusted EBITDA to the comparable GAAP Net Income (Loss), which is included in this press release, and not to rely on any single financial measure to evaluate Intellinetics’ financial performance.

We believe that Adjusted EBITDA is a useful performance measure and is used by us to facilitate a comparison of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under GAAP can provide alone. We define “Adjusted EBITDA” as earnings before interest expense, any income taxes, depreciation and amortization expense, stock-based compensation, note conversion and note or equity offer warrant or stock expense, gain or loss on debt extinguishment, change in fair value of contingent consideration, and significant transaction costs.

Reconciliation of Net Income (Loss) to Adjusted EBITDA

  For the Three Months Ended
December 31,
  2021  2020 
Net income (loss) - GAAP $26,295  $(1,427,307)
Change in fair value of earnout liabilities  64,203   1,554,800 
Interest expense, net  112,775   114,959 
Depreciation and amortization  111,693   92,618 
Stock-based compensation  22,959   26,118 
Adjusted EBITDA $337,925  $361,188 

  For the Twelve months Ended
December 31,
  2021  2020 
Net income (loss) - GAAP $1,357,951  $(2,200,201)
Change in fair value of earnout liabilities  141,414   1,554,800 
Interest expense, net  452,120   637,683 
Significant transaction costs  -   495,440 
Stock and warrant issue expense  -   377,761 
Depreciation and amortization  413,932   296,935 
Stock-based compensation  149,753   116,270 
Income tax benefit, net  -   (188,300)
Gain on extinguishment of debt  (845,083)  (287,426)
Adjusted EBITDA $1,670,087  $802,962 

Consolidated Statements of Operations

  For the Three Months Ended December 31,  For the Twelve Months Ended December 31, 
  2021  2020  2021  2020 
Sale of software $4,479  $40,788  $78,450  $194,787 
Software as a service  389,611   298,519   1,441,683   1,055,016 
Software maintenance services  338,219   341,963   1,350,470   1,257,446 
Professional services  1,753,443   1,786,463   7,468,716   5,007,617 
Storage and retrieval services  258,286   228,072   1,120,946   738,525 
Total revenues  2,744,038   2,695,805   11,460,265   8,253,391 
Cost of revenues:                
Sale of software  4,778   16,547   14,828   56,664 
Software as a service  91,284   63,860   333,001   273,368 
Software maintenance services  16,711   31,683   81,641   159,122 
Professional services  944,107   915,745   3,709,348   2,553,053 
Storage and retrieval services  78,868   84,163   378,465   220,446 
Total cost of revenues  1,135,748   1,111,998   4,517,283   3,262,653 
Gross profit  1,608,290   1,583,807   6,942,982   4,990,738 
Operating expenses:                
General and administrative  919,277   966,394   4,044,296   3,499,440 
Change in fair value of earnout liabilities  64,203   1,554,800   141,414   1,554,800 
Significant transaction costs  -   -   -   636,440 
Sales and marketing  374,047   282,343   1,378,352   1,041,367 
Depreciation and amortization  111,693   92,618   413,932   296,935 
Total operating expenses  1,469,220   2,896,155   5,977,994   7,028,982 
Income (loss) from operations  139,070   (1,312,348)  964,988   (2,038,244)
Other income (expense)                
Gain on extinguishment of debt  -   -   845,083   287,426 
Interest expense, net  (112,775)  (114,959)  (452,120)  (637,683)
Total other income (expense)  (112,775)  (114,959)  392,963   (350,257)
Income (loss) before income taxes  26,295   (1,427,307)  1,357,951   (2,388,501)
Income tax benefit  -   -   -   188,300 
Net income (loss) $26,295  $(1,427,307) $1,357,951  $(2,200,201)
Basic net income (loss) per share: $0.01  $(0.51) $0.48  $(0.91)
Diluted net income (loss) per share: $0.01  $(0.51) $0.44  $(0.91)
Weighted average number of common shares outstanding - basic  2,823,072   2,810,865   2,822,972   2,406,830 
Weighted average number of common shares outstanding - diluted  3,103,905   2,810,865   3,104,820   2,406,830 

Consolidated Balance Sheets

  December 31,  December 31, 
  2021  2020 
Current assets:        
Cash $1,752,630  $1,907,882 
Accounts receivable, net  1,176,059   792,380 
Accounts receivable, unbilled  444,782   523,522 
Parts and supplies, net  76,691   79,784 
Other contract assets  78,556   31,283 
Prepaid expenses and other current assets  155,550   130,883 
Total current assets  3,684,268   3,465,734 
Property and equipment, net  1,091,780   698,752 
Right of use assets  3,841,612   2,641,005 
Intangible assets, net  968,496   1,184,971 
Goodwill  2,322,887   2,322,887 
Other assets  53,089   31,284 
Total assets $11,962,132  $10,344,633 
Current liabilities:        
Accounts payable $181,521  $141,823 
Accrued compensation  343,576   271,889 
Accrued expenses, other  161,862   131,685 
Lease liabilities - current  616,070   518,531 
Deferred revenues  1,194,649   996,131 
Deferred compensation  100,828   100,828 
Earnout liabilities - current  958,818   877,522 
Accrued interest payable - current  -   5,941 
Notes payable - current  -   580,638 
Total current liabilities  3,557,324   3,624,988 
Long-term liabilities:        
Notes payable - net of current portion  1,754,527   1,802,184 
Lease liabilities - net of current portion  3,316,682   2,196,951 
Earnout liabilities - net of current portion  671,863   1,566,478 
Total long-term liabilities  5,743,072   5,565,613 
Total liabilities  9,300,396   9,190,601 
Stockholders’ equity:        
Common stock, $0.001 par value, 25,000,000 shares authorized; 2,823,072 and 2,810,865 shares issued and outstanding at December 31, 2021 and 2020, respectively  2,823   2,811 
Additional paid-in capital  24,297,229   24,147,488 
Accumulated deficit  (21,638,316)  (22,996,267)
Total stockholders’ equity  2,661,736   1,154,032 
Total liabilities and stockholders’ equity $11,962,132  $10,344,633 

Consolidated Statements of Cash Flows

  For the Twelve Months Ended
December 31,
  2021  2020 
Cash flows from operating activities:        
Net income (loss) $1,357,951  $(2,200,201)
Adjustments to reconcile net income (loss) to net cash used in operating activities:        
Depreciation and amortization  413,932   296,935 
Bad debt (recovery) expense  (11,187)  54,834 
Parts and supplies reserve change  9,000   15,000 
Amortization of deferred financing costs  103,739   117,091 
Amortization of beneficial conversion option  -   11,786 
Amortization of debt discount  106,666   88,889 
Amortization of right of use asset  614,154   405,227 
Stock issued for services  57,500   57,500 
Stock options compensation  92,253   58,770 
Note conversion stock issue expense  -   141,000 
Warrant issue expense  -   236,761 
Interest on converted debt  -   176,106 
Amortization of original issue discount on notes  -   18,296 
Gain on extinguishment of debt  (845,083)  (287,426)
Change in fair value of earnout liabilities  141,414   1,554,800 
Changes in operating assets and liabilities:        
Accounts receivable  (372,492)  605,094 
Accounts receivable, unbilled  78,740   (224,128)
Parts and supplies  (5,907)  796 
Prepaid expenses and other current assets  (93,745)  6,745 
Right of use assets  -   - 
Accounts payable and accrued expenses  141,562   (645,596)
Lease liabilities, current and long-term  (597,491)  (396,292)
Deferred compensation  -   (16,338)
Accrued interest, current and long-term  442   5,940 
Deferred revenues  198,518   43,399 
Total adjustments  32,015   2,325,189 
Net cash provided by operating activities  1,389,966   124,988 
Cash flows from investing activities:        
Cash paid to acquire business, net of cash acquired  -   (4,019,098)
Purchases of property and equipment  (590,485)  (76,854)
Net cash used in investing activities  (590,485)  (4,095,952)
Cash flows from financing activities:        
Payment of earnout liabilities  (954,733)  - 
Proceeds from issuance of common stock  -   3,167,500 
Offering costs paid on issuance of common stock  -   (307,867)
Payment of deferred financing costs  -   (175,924)
Proceeds from notes payable  -   3,008,700 
Repayment of notes payable  -   (170,000)
Repayment of notes payable - related parties  -   (47,728)
Net cash (used in) provided by financing activities  (954,733)  5,474,681 
Net (decrease) increase in cash  (155,252)  1,503,717 
Cash - beginning of period  1,907,882   404,165 
Cash - end of period $1,752,630  $1,907,882 
Supplemental disclosure of cash flow information:        
Cash paid during the period for interest $242,545  $202,291 
Cash paid during the period for income taxes $4,595  $117,072 
Supplemental disclosure of non-cash financing activities:        
Accrued interest notes payable converted to equity $-  $796,074 
Accrued interest notes payable related parties converted to equity  -   238,883 
Discount on notes payable for beneficial conversion feature  -   320,000 
Discount on notes payable for warrants  -   135,292 
Notes payable converted to equity  -   3,421,063 
Notes payable converted to equity - related parties  -   1,465,515 
Right-of-use asset obtained in exchange for operating lease liability  1,814,761   - 
Supplemental disclosure of non-cash investing activities relating to business acquisitions:        
Cash $-  $17,269 
Accounts receivable  -   1,122,737 
Accounts receivable, unbilled  -   276,023 
Parts and supplies  -   91,396 
Prepaid expenses  -   73,116 
Other current assets  -   5,954 
Right of use assets  -   2,885,618 
Property and equipment  -   735,885 
Intangible assets  -   1,361,000 
Accounts payable  -   (168,749)
Accrued expenses  -   (162,426)
Lease liabilities  -   (2,947,684)
Federal and state taxes payable  -   (168,900)
Deferred revenues  -   (198,659)
Deferred tax liabilities, net  -   (149,900)
Net assets acquired in acquisition  -   2,772,680 
Total goodwill acquired in acquisition  -   2,322,887 
Total purchase price of acquisition  -   5,095,567 
Purchase price of business acquisition financed with earnout liability  -   (889,200)
Purchase price of business acquisition financed with installment payments  -   (170,000)
Cash used in business acquisition $-  $4,036,367