UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ——————— FORM 10-K ——————— ☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Year Ended: December 31, 2019 ——————— ISSUER DIRECT CORPORATION (Name of small business issuer in its charter) ——————— (State or Other Jurisdiction of Delaware 1-10185 26-1331503 (Commission File Number) (I.R.S. Employer Identification No.) One Glenwood Avenue, Suite 1001, Raleigh, NC 27603 (Address of Principal Executive O ...

PART I - FINANCIAL INFORMATION Presents unaudited consolidated financial statements and management's discussion and analysis for Issuer Direct Corporation [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=Item%201.%20Financial%20Statements%2E) Presents unaudited consolidated financial statements, including balance sheets, income, equity, and cash flows, with notes on accounting policies, acquisitions, and taxes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Presents the company's financial position, detailing assets, liabilities, and equity at specific points in time **Consolidated Balance Sheet Highlights (in thousands):** | Metric | Sep 30, 2019 | Dec 31, 2018 | Change | | :-------------------------- | :----------- | :----------- | :----- | | Total Assets | $30,089 | $28,952 | +$1,137 | | Cash & Cash Equivalents | $15,807 | $17,222 | -$1,415 | | Accounts Receivable (net) | $2,054 | $1,593 | +$461 | | Goodwill | $6,051 | $5,032 | +$1,019 | | Intangible Assets (net) | $3,984 | $2,802 | +$1,182 | | Total Liabilities | $3,670 | $3,289 | +$381 | | Deferred Revenue | $1,566 | $1,249 | +$317 | | Total Stockholders' Equity | $26,419 | $25,663 | +$756 | [Unaudited Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income over specific interim periods **Consolidated Statements of Operations (in thousands, except per share amounts):** | Metric | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | YoY Change (%) | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | YoY Change (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :------------- | :-------------------------- | :-------------------------- | :------------- | | Revenues | $4,019 | $3,255 | 23.5% | $12,336 | $10,584 | 16.5% | | Gross profit | $2,797 | $2,274 | 23.0% | $8,562 | $7,552 | 13.4% | | Operating income | $180 | $119 | 51.3% | $457 | $1,029 | -55.6% | | Net income | $200 | $86 | 132.6% | $617 | $772 | -20.2% | | Basic EPS | $0.05 | $0.02 | 150.0% | $0.16 | $0.24 | -33.3% | | Diluted EPS | $0.05 | $0.02 | 150.0% | $0.16 | $0.23 | -30.4% | [Unaudited Consolidated Statements of Comprehensive Income](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Income) Reports net income and other comprehensive income items, such as foreign currency translation adjustments **Consolidated Statements of Comprehensive Income (in thousands):** | Metric | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income | $200 | $86 | $617 | $772 | | Foreign currency translation adjustment | $(7) | $(10) | $(20) | $(43) | | Comprehensive income | $193 | $76 | $597 | $729 | [Unaudited Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Outlines changes in equity components, including net income, stock-based compensation, and share repurchases - Total stockholders' equity increased by **$756,000** from December 31, 2018, to September 30, 2019, primarily due to **net income ($617,000 for nine months)** and **stock-based compensation ($396,000 for nine months)**, partially offset by a **$236,000 share repurchase**[19](index=19&type=chunk)[11](index=11&type=chunk)[21](index=21&type=chunk) **Stockholders' Equity Changes (in thousands):** | Metric | Dec 31, 2018 | Sep 30, 2019 | Change | | :-------------------------- | :----------- | :----------- | :----- | | Total Stockholders' Equity | $25,663 | $26,419 | +$756 | | Retained Earnings | $3,151 | $3,768 | +$617 | | Additional Paid-in Capital | $22,525 | $22,684 | +$159 | | Common Stock Shares Outstanding | 3,829,572 | 3,837,588 | +8,016 | [Unaudited Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities **Consolidated Statements of Cash Flows (in thousands):** | Metric | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | YoY Change | | :------------------------------------------ | :-------------------------- | :-------------------------- | :--------- | | Net cash provided by operating activities | $1,955 | $2,153 | -$198 | | Net cash used in investing activities | $(3,110) | $(1,192) | -$1,918 | | Net cash provided by (used in) financing activities | $(236) | $13,610 | -$13,846 | | Net change in cash | $(1,391) | $14,571 | -$15,962 | | Cash – ending | $15,807 | $19,444 | -$3,637 | - The significant increase in cash used in investing activities was primarily due to the **$2.788 million purchase of the VisualWebcaster Platform in 2019**, compared to the **$1.123 million acquisition of Filing Services Canada, Inc. in 2018**[21](index=21&type=chunk)[53](index=53&type=chunk)[59](index=59&type=chunk) - The shift in financing activities from a large inflow in 2018 to an outflow in 2019 was mainly due to **proceeds from a $13.323 million secondary stock offering in 2018** and a **$236,000 payment for stock repurchase and retirement in 2019**[21](index=21&type=chunk)[148](index=148&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Provides context for financial statements, detailing accounting policies, recent acquisitions, equity changes, income taxes, and lease accounting standards [Note 1. Basis of Presentation](index=9&type=section&id=Note%201.%20Basis%20of%20Presentation) Explains the preparation of interim financial statements in accordance with Form 10-Q and Regulation S-X - The unaudited interim consolidated financial statements are prepared in accordance with Form 10-Q and Article 10 of Regulation S-X, including all normal recurring adjustments necessary for fair presentation, with certain information and footnote disclosures condensed or omitted[23](index=23&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=9&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) Details the accounting principles for revenue recognition, lease accounting, and other material financial items - Revenue is primarily from cloud-based product subscriptions and compliance/other services, recognized over contract periods for subscriptions and upon event completion for per-event services[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) - The company adopted ASC Topic 842, Leases, on January 1, 2019, recognizing ROU assets and lease liabilities on the balance sheet for leases with terms longer than 12 months[50](index=50&type=chunk)[52](index=52&type=chunk) **Balance Sheet Impact of ASC 842 Adoption (Jan 1, 2019, in 000's):** | Metric | Amount | | :---------------- | :----- | | ROU asset | $102 | | Lease liability | $135 | | Deferred rent | $(33) | [Note 3: Recent Acquisitions](index=14&type=section&id=Note%203%3A%20Recent%20Acquisitions) Provides details on the acquisitions of Visual Webcaster Platform (VWP) and Filing Services Canada Inc. (FSCwire) - Acquired Visual Webcaster Platform (VWP) on January 3, 2019, for **$2.788 million cash**, adding over **120 customers** and strengthening webcasting offerings[53](index=53&type=chunk)[103](index=103&type=chunk) **VWP Acquisition Intangible Assets (in 000's):** | Asset | Value | | :-------------------------- | :----- | | Customer relationships | $1,190 | | Technology | $497 | | Non-compete agreement | $69 | | Goodwill | $1,019 | | Total | $2,775 | - Acquired Filing Services Canada Inc. (FSCwire) on July 3, 2018, for **$1.14 million cash** and **3,402 shares of restricted common stock ($62,000 fair value)**, enhancing global news distribution[59](index=59&type=chunk)[61](index=61&type=chunk) **FSCwire Acquisition Intangible Assets (in 000's):** | Asset | Value | | :-------------------------- | :----- | | Customer relationships | $311 | | Distribution partner relationships | $153 | | Goodwill | $962 | | Total | $1,426 | [Note 4: Equity](index=16&type=section&id=Note%204%3A%20Equity) Discusses changes in equity, including stock incentive plans and the share repurchase program - As of September 30, 2019, **23,500 shares** remain to be granted under the 2014 Equity Incentive Plan, with **$115,000 of unrecognized stock compensation**[64](index=64&type=chunk)[65](index=65&type=chunk) - The Company repurchased **24,980 shares for $236,000** under a **$1,000,000 share repurchase program** announced on August 7, 2019[67](index=67&type=chunk) [Note 5: Income taxes](index=17&type=section&id=Note%205%3A%20Income%20taxes) Presents the company's income tax expense and the factors influencing its effective tax rate **Income Tax Expense (in thousands):** | Period | 2019 | 2018 | | :-------------------------- | :----- | :----- | | Three Months Ended Sep 30 | $59 | $32 | | Nine Months Ended Sep 30 | $105 | $246 | - For the nine months ended September 30, 2019, the variance from the **21% U.S. statutory rate** was primarily due to a **$24,000 stock-based compensation tax benefit**, return to provision adjustment, and tax credits, offset by state income taxes[68](index=68&type=chunk) [Note 6: Leases](index=17&type=section&id=Note%206%3A%20Leases) Details the impact of ASC Topic 842 adoption on ROU assets, lease liabilities, and lease expenses - As of September 30, 2019, ROU assets totaled **$104,000** and lease liabilities totaled **$108,000**, following the adoption of Topic 842[73](index=73&type=chunk) **Lease Expense (in thousands):** | Metric | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Operating lease expense | $41 | $29 | $124 | $88 | | Variable lease expense | $41 | $29 | $120 | $96 | | Total Rent expense | $82 | $58 | $244 | $184 | - A new lease for corporate headquarters in Raleigh, NC, commencing October 2, 2019, has minimum lease payments of **$2.997 million** through December 31, 2027[75](index=75&type=chunk) [Note 7: Revenue](index=18&type=section&id=Note%207%3A%20Revenue) Disaggregates revenue by stream (Platform & Technology, Services) and geographic region **Revenue Streams (in thousands):** | Revenue Streams | 3 Months Ended Sep 30, 2019 | % of Total | 3 Months Ended Sep 30, 2018 | % of Total | 9 Months Ended Sep 30, 2019 | % of Total | 9 Months Ended Sep 30, 2018 | % of Total | | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :--------- | :-------------------------- | :--------- | :-------------------------- | :--------- | | Platform and Technology | $2,712 | 67.5% | $2,085 | 64.1% | $8,038 | 65.2% | $6,363 | 60.1% | | Services | $1,307 | 32.5% | $1,170 | 35.9% | $4,298 | 34.8% | $4,221 | 39.9% | | Total | $4,019 | 100.0% | $3,255 | 100.0% | $12,336 | 100.0% | $10,584 | 100.0% | **Geographic Revenue (in thousands):** | Geographic region | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | North America | $3,908 | $3,078 | $11,928 | $10,000 | | Europe | $111 | $177 | $408 | $584 | | Total revenues | $4,019 | $3,255 | $12,336 | $10,584 | [Note 8: Line of Credit](index=19&type=section&id=Note%208%3A%20Line%20of%20Credit) Describes the company's revolving line of credit, including its terms and current utilization - The Line of Credit was renewed on October 4, 2018, increasing available funds from **$2.5 million to $3.0 million** and reducing the interest rate from **LIBOR + 2.50% to LIBOR + 1.75%**[79](index=79&type=chunk) - As of September 30, 2019, no amounts were owed on the Line of Credit[79](index=79&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%2E) Analyzes Issuer Direct's financial performance, liquidity, capital resources, and strategic outlook, emphasizing the shift to a cloud-based subscription model [Overview](index=20&type=section&id=Overview) Introduces Issuer Direct's business model, its cloud-based platform, and strategic focus on subscription revenue - Issuer Direct provides communications and compliance technology solutions via its Platform id.™ to a diverse customer base including corporate issuers, private companies, investment banks, and professional firms[85](index=85&type=chunk)[86](index=86&type=chunk) - The company is transitioning to a cloud-based subscription business, with Platform and Technology revenue increasing to **65% of total revenue** for the first nine months of 2019, up from **60% in 2018**[89](index=89&type=chunk) - Future investments will focus on current and additional Platform id. offerings to establish an ecosystem bringing issuers and investors closer, including understanding shareholder composition[90](index=90&type=chunk) [Platform id. Modules](index=22&type=section&id=Platform%20id.%20Modules) The core cloud-based Platform id. offers integrated modules for shareholder communications and compliance needs [Communications Modules](index=22&type=section&id=Communications%20Modules) Details modules like ACCESSWIRE, Professional Conference Organizer, and webcasting for investor communications - ACCESSWIRE news business grew **67% during Q3 2019** (excluding investment commentary business), despite the industry-wide loss of investment commentary content which previously generated significant revenue[96](index=96&type=chunk)[115](index=115&type=chunk) - The new Professional Conference Organizer (PCO) Module, released in late 2018, is a cloud-based platform and mobile app for managing investor conferences, integrating with other Platform id. communication tools[97](index=97&type=chunk)[98](index=98&type=chunk) - The acquisition of VWP significantly strengthened the webcasting product, adding over **120 customers** and expanding capabilities beyond earnings events to include corporate meetings and training sessions[103](index=103&type=chunk) [Compliance Modules](index=24&type=section&id=Compliance%20Modules) Describes modules for disclosure reporting (EDGAR, SEDAR, iXBRL) and stock transfer services - The Disclosure Reporting module supports document conversion, editing, and filing to SEC EDGAR and SEDAR, including newly mandated Inline XBRL (iXBRL) and IFRS taxonomies[106](index=106&type=chunk)[107](index=107&type=chunk) - The Stock Transfer module provides real-time access to shareholder information, stock ledgers, and reporting, enabling customers to manage capitalization tables and issue new shares from a cloud-based system[109](index=109&type=chunk) [Services](index=24&type=section&id=Services) Discusses traditional service offerings and the anticipated decline due to the shift towards digital subscriptions - The company expects decreases in Services revenue due to the focus on cloud-based subscriptions and customer attrition from legacy Annual Report Service (ARS) to digital fulfillment[111](index=111&type=chunk)[112](index=112&type=chunk) - Services include SEC document conversion, XBRL tagging, telecommunications, and print/fulfillment of stock certificates, proxy materials, or annual reports[111](index=111&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Revenue increased due to acquisitions, with Platform & Technology growth; operating expenses rose, leading to a nine-month net income decline [Revenues](index=25&type=section&id=Revenues) Analyzes total revenue growth, highlighting contributions from Platform & Technology, Services, and acquisitions **Revenue Performance (in thousands):** | Revenue (in thousands) | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | YoY Change (%) | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | YoY Change (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :------------- | :-------------------------- | :-------------------------- | :------------- | | Total Revenue | $4,019 | $3,255 | 23.5% | $12,336 | $10,584 | 16.5% | | Platform & Technology | $2,712 | $2,085 | 30.1% | $8,038 | $6,363 | 26.3% | | Services | $1,307 | $1,170 | 11.7% | $4,298 | $4,221 | 1.8% | - Acquisitions of VWP and FSCwire contributed **$494,000** and **$1,477,000** to total revenue for the three and nine months ended September 30, 2019, respectively[114](index=114&type=chunk) - ACCESSWIRE revenue (excluding investment commentary business) increased **67%** and **39%** for the three and nine months ended September 30, 2019, respectively[115](index=115&type=chunk) [Revenue Backlog](index=26&type=section&id=Revenue%20Backlog) Reports on deferred revenue, new contract values, and total Platform id. subscriptions **Deferred Revenue (in thousands):** | Metric | Sep 30, 2019 | Dec 31, 2018 | Change | | :-------------------------- | :----------- | :----------- | :----- | | Deferred Revenue | $1,566 | $1,249 | +$317 | - During the nine months ended September 30, 2019, the company entered into new contracts with **114 net new or existing customers**, representing an annualized contract value of **$748,000**[118](index=118&type=chunk) - Total Platform id. subscriptions reached **219** with an annual contract value of **$1,873,000** as of September 30, 2019[118](index=118&type=chunk) [Cost of Revenues and Gross Margin](index=26&type=section&id=Cost%20of%20Revenues%20and%20Gross%20Margin) Examines changes in cost of revenues and gross margin percentages across different revenue streams **Cost of Revenues and Gross Margin Performance (in thousands):** | Metric | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | YoY Change (%) | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | YoY Change (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :------------- | :-------------------------- | :-------------------------- | :------------- | | Cost of Revenues | $1,222 | $981 | 24.6% | $3,774 | $3,032 | 24.5% | | Gross Profit | $2,797 | $2,274 | 23.0% | $8,562 | $7,552 | 13.4% | | Gross Margin % (Total) | 70% | 70% | 0 pp | 69% | 71% | -2 pp | | P&T Gross Margin % | 74% | 77% | -3 pp | 74% | 79% | -5 pp | | Services Gross Margin % | 60% | 57% | +3 pp | 61% | 60% | +1 pp | [Operating Expenses](index=26&type=section&id=Operating%20Expenses) Details trends in general and administrative, sales and marketing, product development, and depreciation expenses **Operating Expenses (in thousands):** | Operating Expenses | 3 Months Ended Sep 30, 2019 | 3 Months Ended Sep 30, 2018 | YoY Change (%) | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | YoY Change (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :------------- | :-------------------------- | :-------------------------- | :------------- | | General and administrative | $1,229 | $944 | 30.2% | $3,912 | $2,896 | 35.1% | | Sales and marketing expenses | $871 | $723 | 20.5% | $2,566 | $2,272 | 13.0% | | Product development | $288 | $333 | -13.6% | $968 | $916 | 5.7% | | Depreciation and amortization | $229 | $155 | 47.7% | $659 | $439 | 50.1% | - General and administrative expenses for the nine months ended September 30, 2019, included a **$550,000 increase in bad debt provision**, primarily for investment commentary newswire customers[122](index=122&type=chunk) - Depreciation and amortization increased significantly due to the amortization of intangible assets acquired in the VWP and FSCwire acquisitions[128](index=128&type=chunk) [Interest income (expense), net](index=27&type=section&id=Interest%20income%20(expense),%20net) Covers interest income from deposits and non-cash interest expense related to acquisitions - Net interest income (expense) includes interest income on deposits and money market accounts, partially offset by non-cash interest expense related to the Interwest acquisition[129](index=129&type=chunk) [Income tax (benefit) expense](index=27&type=section&id=Income%20tax%20(benefit)%20expense) Presents income tax expense and factors influencing the effective tax rate for the reporting periods **Income Tax Expense (in thousands):** | Period | 2019 | 2018 | | :-------------------------- | :----- | :----- | | Three Months Ended Sep 30 | $59 | $32 | | Nine Months Ended Sep 30 | $105 | $246 | - For the nine months ended September 30, 2019, the variance from the **21% U.S. statutory rate** was primarily due to a **$24,000 stock-based compensation tax benefit**, return to provision adjustment, and tax credits, offset by state income taxes[130](index=130&type=chunk) [Net Income](index=27&type=section&id=Net%20Income) Analyzes the drivers behind changes in net income for the three and nine-month periods **Net Income (in thousands):** | Period | 2019 | 2018 | YoY Change (%) | | :-------------------------- | :----- | :----- | :------------- | | Three Months Ended Sep 30 | $200 | $86 | 132.6% | | Nine Months Ended Sep 30 | $617 | $772 | -20.2% | - The nine-month net income decline was primarily due to increased operating expenses, including bad debt and acquisition-related costs, and higher depreciation and amortization, offsetting revenue and gross margin growth[132](index=132&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's cash position, working capital, and available credit facilities **Liquidity Position (in thousands, as of Sep 30, 2019):** | Metric | Amount | | :-------------------------- | :----- | | Cash and cash equivalents | $15,807 | | Net accounts receivable | $2,054 | | Total current assets | $18,171 | | Total current liabilities | $2,958 | | Working Capital | $15,213 | - The Line of Credit was renewed, increasing available borrowing to **$3.0 million** with a reduced interest rate (**LIBOR + 1.75%**), and no amounts were owed as of September 30, 2019[134](index=134&type=chunk)[135](index=135&type=chunk) [2019 Outlook](index=28&type=section&id=2019%20Outlook) Outlines strategic initiatives and expectations for continued growth and transition to subscription models - The company anticipates stable demand for its platforms, with a continued shift from traditional service-based engagements to cloud-based subscription models and digital distribution[137](index=137&type=chunk) - Key strategic initiatives for the remainder of 2019 include expanding Platform and Technology business development, pursuing strategic acquisitions, growing the customer base, migrating acquired businesses to the current platform, expanding newswire distribution, investing in technology advancements, developing the Insight and Analytics module, and generating profitable, sustainable growth and cash flows[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) [Off-Balance Sheet Arrangements](index=28&type=section&id=Off-Balance%20Sheet%20Arrangements) Confirms the absence of material off-balance sheet arrangements impacting financial condition - The company has no off-balance sheet arrangements that are material to its financial condition or results of operations[141](index=141&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk%2E) This section states that there are no quantitative and qualitative disclosures about market risk applicable to the company - This item is not applicable to the company[142](index=142&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES.](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures%2E) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2019, and there have been no material changes in internal control over financial reporting during the period - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2019[142](index=142&type=chunk) - There were no material changes in internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q[143](index=143&type=chunk) PART II – OTHER INFORMATION This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, and other relevant information [ITEM 1. LEGAL PROCEEDINGS.](index=30&type=section&id=Item%201.%20Legal%20Proceedings%2E) The company is not currently a party to any material litigation, nor is it aware of any threatened or pending litigation that could have a material adverse effect on its business - The company is not a party to any material litigation and is unaware of any threatened or pending litigation that might result in a material adverse effect to its business[146](index=146&type=chunk) [ITEM 1A. RISK FACTORS.](index=30&type=section&id=Item%201A.%20Risk%20Factors%2E) There have been no material changes to the company's risk factors as previously disclosed in its most recent Form 10-K filing - There have been no material changes to the company's risk factors as previously disclosed in its most recent Form 10-K filing[147](index=147&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%2E) Details the share repurchase program initiated in August 2019, including shares repurchased and aggregate cost **Share Repurchase Program (as of Sep 30, 2019):** | Metric | Value | | :-------------------------- | :----- | | Total Number of Shares Repurchased | 24,980 | | Average Price Paid Per Share | $9.41 | | Aggregate Cost | $236,000 | | Maximum Dollar Value Remaining | $764,000 | [ITEM 3. DEFAULTS UPON SENIOR SECURITIES.](index=30&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities%2E) The company reported no defaults upon senior securities during the period - There were no defaults upon senior securities[149](index=149&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURE.](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosure%2E) This item is not applicable to the company - This item is not applicable to the company[150](index=150&type=chunk) [ITEM 5. OTHER INFORMATION.](index=30&type=section&id=Item%205.%20Other%20Information%2E) The company has no other information to disclose under this item - There is no other information to disclose[151](index=151&type=chunk) [ITEM 6. EXHIBITS.](index=30&type=section&id=Item%206.%20Exhibits%2E) This section lists the exhibits filed with the Form 10-Q, including certifications from the CEO and CFO, and various XBRL taxonomy documents - Exhibits include certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as well as various XBRL taxonomy documents (Instance, Schema, Calculation, Label, Presentation, and Definition Linkbase Documents)[153](index=153&type=chunk) [Signatures](index=32&type=section&id=Signatures) The report is duly signed on behalf of Issuer Direct Corporation by its Chief Executive Officer, Brian R. Balbirnie, and Chief Financial Officer, Steven Knerr, as of October 31, 2019 - The report was signed by Brian R. Balbirnie, Chief Executive Officer, and Steven Knerr, Chief Financial Officer, on October 31, 2019[157](index=157&type=chunk)

Issuer Direct Corporation (NYSE:ISDR) Q2 2019 Earnings Conference Call August 1, 2019 4:30 PM ET Company Participants Brian Balbirnie - Founder and CEO Steven Knerr - CFO Conference Call Participants Operator Ladies and gentlemen, thank you for standing by, and welcome to the Issuer Direct Corporation's Second Quarter 2019 Earnings Conference Call. Today's call will be conducted by the Company's Founder and Chief Executive Officer, Brian Balbirnie; and its Chief Financial Officer, Steven Knerr. Before I tur ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ——————— FORM 10-Q ——————— ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from: _____________ to _____________ ISSUER DIRECT CORPORATION (Exact name of registrant as specified in its charter) ——————— Delaware 1-10185 26-1331503 (Sta ...

Financial Data and Key Metrics Changes - In Q1 2019, Issuer Direct achieved total revenue of $4.2 million, representing an 18% increase year-over-year and a 15% sequential increase from Q4 2018 [5][10] - The overall gross margin percentage was 69% for Q1 2019, down from 71% in the same period last year [15][17] - GAAP net income for Q1 2019 was $205,000 or $0.05 per diluted share, compared to $320,000 or $0.10 per diluted share in Q1 2018 [21] - Non-GAAP net income was $518,000 or $0.13 per diluted share for Q1 2019, compared to $458,000 or $0.15 per diluted share in Q1 2018 [22] Business Line Data and Key Metrics Changes - Platform and Technology revenue accounted for 64% of total revenues in Q1 2019, up from 58% in Q1 2018, with revenue increasing by 31% to $2.665 million [6][11] - Services revenue was $1.514 million for Q1 2019, a 1% increase compared to Q1 2018, driven by acquisitions and increased print and proxy distribution revenue [13] - The company added 20 new subscriptions for Platform id during the quarter, with an annualized contract value of $189,000 [12] Market Data and Key Metrics Changes - The number of publicly traded customers increased to 1,482 in Q1 2019 from 1,176 in the same period last year, while privately held customers rose to 764 from 606 [26] - Deferred revenue increased by 17% since year-end to $1.464 million due to additional licenses of Platform id [23] Company Strategy and Development Direction - The company aims to increase the percentage of revenue from Platform and Technology to 70% in 2019 [6][25] - Issuer Direct is focusing on new customer acquisition and expanding average revenue per user (ARPU) from current customers [25] - The integration of Visualwebcaster is a key focus, with expectations for it to drive revenue growth when combined with existing products [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about revenue growth and the successful integration of Visualwebcaster, which is expected to enhance the company's offerings [24][28] - The company is committed to refining its products and expanding its conference software management capabilities [29][31] - Management highlighted the importance of building a strong pipeline for future growth and the need for continued investment in sales and marketing personnel [32][33] Other Important Information - The company reported an increase in operating expenses of 24% in Q1 2019, primarily due to higher general and administrative expenses [18] - The gross margin for Platform and Technology decreased to 75% in Q1 2019 from 79% in the prior year, attributed to costs associated with the Visualwebcaster platform [16] Q&A Session Summary Question: How is the conference management software performing? - Management indicated that the performance is in line with expectations, with plans to double the number of events in Q2 and a strong pipeline for the rest of the year [36][37] Question: What is the status of the insights and analytics module? - The module is expected to be released at the end of June, with a 30-day trial for current customers [38][39] Question: What is the acquisition pipeline like after FSC and Visualwebcaster? - Management stated they are being careful with future acquisitions, focusing on transactions that fit their core business [44][46] Question: What specific needs are being looked for in potential acquisitions? - The focus is on enhancing communication, news distribution, and analytics capabilities, aiming for products that can improve margins [47][48] Question: Will Platform and Technology customer data be included in the 10-Q? - Management confirmed a shift to reporting public and private customer metrics, emphasizing the importance of these distinctions [50][51] Question: Can you elaborate on the increase in bad debt expense? - Management explained that the increase is due to a few larger clients with outstanding balances, but they maintain good communication with these clients [54][55] Question: What are the most exciting prospects for 2019? - Management expressed excitement about the brand visibility and ecosystem being built around their products, which is expected to drive future growth [57][58]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents unaudited financials, management's discussion, market risk, and internal controls [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited Q1 2019 financials show assets at $30.1M, revenues at $4.2M, and net income at $205K [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2019, total assets increased to $30.1 million, driven by acquisitions, while liabilities and equity also saw increases Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $14,961 | $17,222 | | Goodwill | $6,051 | $5,032 | | Intangible assets, net | $4,367 | $2,802 | | **Total Assets** | **$30,115** | **$28,952** | | **Liabilities & Equity** | | | | Total current liabilities | $3,338 | $2,600 | | Total liabilities | $4,113 | $3,289 | | Total stockholders' equity | $26,002 | $25,663 | | **Total Liabilities and Stockholders' Equity** | **$30,115** | **$28,952** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) For Q1 2019, revenues grew 18% to $4.18 million, but net income decreased 36% to $205,000 due to higher operating costs Consolidated Income Statement Summary (in thousands) | Metric | Q1 2019 | Q1 2018 | YoY Change | | :--- | :--- | :--- | :--- | | Revenues | $4,179 | $3,530 | +18.4% | | Gross Profit | $2,877 | $2,509 | +14.7% | | Operating Income | $147 | $315 | -53.3% | | Net Income | $205 | $320 | -35.9% | | Diluted EPS | $0.05 | $0.10 | -50.0% | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2019 saw stable operating cash flow but a significant increase in cash used for investing activities, primarily due to an acquisition Consolidated Cash Flow Summary (in thousands) | Cash Flow Category | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $536 | $537 | | Net cash used in investing activities | ($2,794) | ($25) | | Net cash provided by financing activities | $0 | $8 | | **Net change in cash** | **($2,258)** | **$520** | - The primary use of cash in investing activities was the **$2.788 million** purchase of the VisualWebcaster Platform[23](index=23&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail accounting policies, the January 2019 VisualWebcaster Platform acquisition, and the adoption of the new lease accounting standard - The company separates its revenue into two streams: Platform and Technology (subscriptions, press releases, webcasts) and Services (compliance, printing, distribution)[30](index=30&type=chunk) - On January 3, 2019, the company acquired the VisualWebcaster Platform (VWP) for a cash payment of **$2,788,000**. The acquisition resulted in preliminary goodwill of **$1,019,000** and intangible assets of **$1,756,000**[51](index=51&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - The company adopted the new lease accounting standard, Topic 842, on January 1, 2019, resulting in the recognition of Right-of-Use (ROU) assets and lease liabilities on the balance sheet[49](index=49&type=chunk)[50](index=50&type=chunk) Revenue by Stream (in thousands) | Revenue Stream | Q1 2019 | % of Total | Q1 2018 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Platform and Technology | $2,665 | 63.8% | $2,032 | 57.6% | | Services | $1,514 | 36.2% | $1,498 | 42.4% | | **Total** | **$4,179** | **100.0%** | **$3,530** | **100.0%** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strategic shift to cloud-based subscription model, driving 18% revenue growth, and net income decline [Overview and Business Strategy](index=18&type=section&id=Overview%20and%20Business%20Strategy) Issuer Direct is transitioning to a subscription-based, cloud-first platform model, with Platform and Technology revenue growing to 64% of total revenue - The company's core strategy is a 'platform first' engagement, transitioning customers from legacy services to its cloud-based subscription platform, Platform id[83](index=83&type=chunk) - Platform and Technology revenue has grown to represent **64% of total revenue** in Q1 2019, up from **56%** for the full year 2017, highlighting the success of the strategic shift[83](index=83&type=chunk) - The acquisition of the VisualWebcaster Platform (VWP) in January 2019 significantly strengthened the company's webcasting product and added over **120 customers**[97](index=97&type=chunk) - The company expects revenues from its legacy 'Services' business (e.g., document conversion, printing) to decrease as it focuses on the higher-margin platform business[104](index=104&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q1 2019 total revenue grew 18% to $4.2 million, driven by acquisitions, but net income decreased 36% due to rising operating expenses Revenue and Gross Margin by Stream (in thousands) | Revenue Stream | Q1 2019 Revenue | Q1 2018 Revenue | Q1 2019 Gross Margin % | Q1 2018 Gross Margin % | | :--- | :--- | :--- | :--- | :--- | | Platform and Technology | $2,665 | $2,032 | 75% | 79% | | Services | $1,514 | $1,498 | 58% | 60% | | **Total** | **$4,179** | **$3,530** | **69%** | **71%** | - Total revenue increased by **$649,000** (**18%**), with revenues from the VWP and FSCwire acquisitions accounting for **$627,000** of this growth[108](index=108&type=chunk) - General and administrative expenses increased by **36%** (**$357,000**), primarily due to a **$181,000** increase in the bad debt provision and **$112,000** in professional fees associated with recent acquisitions[117](index=117&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with $15.0 million in cash and an undrawn $3.0 million line of credit - As of March 31, 2019, the company had **$14,961,000** in cash and cash equivalents[128](index=128&type=chunk) - The company's working capital (current assets minus current liabilities) was **$14,220,000** at the end of the quarter[128](index=128&type=chunk) - The company has a **$3,000,000** line of credit, which was renewed in October 2018 with a reduced interest rate. No amounts were owed on the line of credit as of March 31, 2019[129](index=129&type=chunk) [2019 Outlook](index=26&type=section&id=2019%20Outlook) For 2019, management will focus on strategic initiatives for long-term growth, including transitioning to a subscription model - The company will continue its transition to a subscription model, which is considered key for long-term sustainable growth[132](index=132&type=chunk) - Key strategic initiatives for 2019 include: - Expanding the Platform and Technology sales team - Growing through strategic acquisitions - Expanding the customer base - Investing in technology advancements and upgrades[133](index=133&type=chunk)[134](index=134&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable to the company - The company states that this item is not applicable[136](index=136&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures are effective[136](index=136&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[137](index=137&type=chunk) [PART II – OTHER INFORMATION](index=28&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section details legal proceedings, risk factors, equity sales, and required exhibits [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to any material litigation, nor is it aware of any threatened or pending litigation - As of the filing date, the company is not involved in any material legal proceedings[139](index=139&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors as disclosed in its most recent Annual Report on Form 10-K - No material changes to risk factors have occurred since the last 10-K filing[140](index=140&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - None[141](index=141&type=chunk) [Item 6. Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including CEO and CFO certifications and XBRL data files - Exhibits filed include Sarbanes-Oxley Act certifications (302 and 906) and XBRL interactive data files[146](index=146&type=chunk)

Issuer Direct Corp (NYSE:ISDR) Q4 2018 Earnings Conference Call February 28, 2019 4:30 PM ET Company Participants Brian Balbirnie - Founder and Chief Executive Officer Steve Knerr - Chief Financial Officer Conference Call Participants Mike Grondahl - Northland Securities Todd Felte - RHK Capital Mike Schellinger - MicroCapClub Operator Ladies and gentlemen, thank you for standing by and welcome to the Issuer Direct Corporation Fourth Quarter and Year Ended December 31, 2018 Earnings Conference Call. Today’s ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ——————— FORM 10-K ——————— ☑ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Year Ended: December 31, 2018 ——————— ISSUER DIRECT CORPORATION (Name of small business issuer in its charter) ——————— (State or Other Jurisdiction of Incorporation) Delaware 1-10185 26-1331503 (Commission File Number) (I.R.S. Employer Identification No.) 500 Perimeter Park Drive, Suite D, Morrisville, NC ...