iotaComm™ Provides Overview of Financial Results and Business Update Following First Quarter Report
NEW HOPE, PA / ACCESSWIRE / October 15, 2019 / Iota Communications, Inc. (OTCQB:IOTC), a wireless network carrier and software service company that provides Internet of Things solutions that optimize energy efficiency, sustainability and operations for commercial facilities, today announced its financial results for the fiscal 2020 first quarter ended August 31, 2019.
Year over Year
Revenue for the first quarter of fiscal year 2020 was $871,774, a significant increase compared to revenue of $49,796 in the first quarter of fiscal 2019, while gross profit increased to $47,828 from $16,819 year over year, an increase of 184%. The increase in revenue and gross profit reflect growth in our services business from the Solbright merger in September 2018.
Net cash used in operating activities was $3,246,992 for the three months ended August 31, 2019, versus $12,477,242 for the same period in fiscal 2019, a year over year decrease of 74%.
Quarter over Quarter
The Company posted a loss from operations of $6,769,403 in the period versus a loss from operations $15,796,945 in the fourth quarter of fiscal year 2019, a quarter over quarter decrease in losses of $9,027,542.
First Quarter 2020 Summary:
- Launch of Iota Spectrum Partners: On April 24, 2019 we launched Iota Spectrum Partners, LP with the purpose of owning the FCC spectrum licenses that we currently lease as well as to hold the Company's spectrum licenses. As lessors exchange their licenses for LP units, the result is a reduction in the revenue-based notes obligation. This exchange process began in mid-August and we are extremely pleased with our progress, expecting to close out the exchange offering in November 2019.
- Operations Restructuring: Following the appointment of several key members to our management team in May 2019, we were able to find areas of efficiency to reduce monthly operating costs by approximately one-third in the first quarter.
- Additional Balance Sheet Improvement: Beginning in May 2019, we began an aggressive balance sheet enhancement initiative with an ambitious goal of removing $100 million of debt in this fiscal year. As of today's date, we have received executed exchange agreements to remove the majority of the revenue-based note liability, restructured the notes with our senior lender to remove the conversion feature and extend the maturity date to 2021, and we have also paid or otherwise settled certain accounts payable.
- Sales and Marketing: Following a disappointing fiscal year in 2019, we are very encouraged by the growth in our revenues in the first quarter as well as the growth in our pipeline and believe we will continue the upward momentum throughout the remainder of this fiscal year and beyond. While our business is still largely project-based and is susceptible to choppiness quarter over quarter, we are optimistic in our expectations of growing revenue and remain focused on prioritizing sales of our recurring, high margin software application revenues.
- Spectrum License Application Status: In July 2019, we submitted 637 applications for 800 MHz FCC licensed spectrum on behalf of the Company and our spectrum partners and to date, 375 licenses have been granted in connection with those applications. We expect the remaining licenses to be granted over the coming months, which will move us substantially closer to achieving full US population spectrum coverage.
"We made significant progress on many of our strategic and operational goals during first quarter of fiscal year 2020," stated Terrence DeFranco, President & CEO of iotaComm. "Firstly, we are excited with our progress on the exchange and the addition of valuable spectrum assets into Iota Spectrum Partners during the quarter. The new applications and granted licenses during the quarter have greatly expanded our network coverage capabilities creating significant value for our stakeholders. These valuable spectrum assets, our crown jewel, are the key differentiator from our competition enabling reliable, secure, and ubiquitous connectivity for commercial and industrial IoT applications. This is our network platform's unique selling proposition in the exploding Internet of Things market. Secondly, we are very pleased with the balance sheet enhancement initiatives, having made substantial progress toward our goal of reducing debt by $100 million this fiscal year, as well as our operations restructuring, both moving us closer to our objective of an exchange uplisting. Lastly, our growing sales pipeline and focus on software-based revenues through Iota Commercial Solutions is poised to drive higher margin recurring revenues while demonstrating the value of our network for third party applications. Overall, we achieved significant milestones this quarter and we expect to continue to make significant progress towards our goals throughout fiscal 2020."
The company's Quarterly Report on Form 10-Q for the period ended August 31, 2019 is on file with Securities and Exchange Commission and can also be found on the company's website https://www.iotacommunications.com/sec-filings/.
About Iota Communications, Inc.:
iotaComm is a wireless network carrier system and software applications platform dedicated to the Internet of Things. iotaComm sells recurring-revenue solutions that optimize energy usage, sustainability and operations for commercial and industrial facilities both directly and via third-party relationships. iotaComm also offers important ancillary products and services which facilitate the adoption of its subscription-based services, including solar energy, LED lighting, and HVAC implementation services.
This press release may contain "forward-looking statement" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include, but are not limited to, any statements relating to our growth strategy and product development programs and any other statements that are not historical facts. Forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition and stock price. Factors that could cause actual results to differ materially from those currently anticipated include, but are not limited to,: risks related to the acquisition and integration of the assets we acquired from Solbright Group, Inc., risks related to our growth strategy; risks relating to the results of research and development activities; our ability to obtain, perform under and maintain financing and strategic agreements and relationships; our dependence on third-party suppliers; our ability to attract, integrate, and retain key personnel; the early stage of products under development; our need for substantial additional funds; government regulation; patent and intellectual property matters; competition; as well as other risks described in our SEC filings. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as required by law.
Iota Communications, Inc.
540 Union Square
New Hope, PA 18938
Attn: Investor Relations
Public Relations Contact:
Greg Lutowsky, SVP, Corporate Communications
SOURCE: Iota Communications, Inc.
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