Financial Performance - Total revenue for the nine months ended September 30, 2024, increased by 51% to $8,599,262 compared to $5,701,372 for the same period in 2023[245] - Total revenue for the three months ended September 30, 2024, increased by 39% to $2,787,999 compared to $2,004,853 for the same period in 2023[248] - Net revenues increased to $8,599,262 for the nine months ended September 30, 2024, up from $5,701,372 in the same period of 2023, representing a growth of 51%[254] Profitability - Gross profit margin was 77% for the nine months ended September 30, 2024, up from 74% in the same period of 2023, with gross profit increasing by $2,444,543[247] - Gross profit percentage for the three months ended September 30, 2024, was 70%, down from 74% in the same period of 2023, with gross profit increasing by $474,031[250] - Net loss attributable to common stockholders was $23,174,710 for the nine months ended September 30, 2024, compared to $8,306,945 in 2023, reflecting an increase of 179%[254] Expenses - Selling, general, and administrative expenses increased by 86% to $17,061,929 for the nine months ended September 30, 2024, compared to $9,189,829 in 2023[253] - Selling, general and administrative expenses rose to $17,061,929 for the nine months ended September 30, 2024, from $9,189,829 in 2023, largely due to a one-time stock-based compensation cost of $4,779,580[256] - Depreciation and amortization expenses increased by 158% to $2,320,952 for the nine months ended September 30, 2024, compared to $900,936 in 2023[253] - Depreciation and amortization expenses increased to $2,320,952 for the nine months ended September 30, 2024, compared to $900,936 in 2023, marking a rise of 157%[257] Cash Flow - Net cash used in operating activities decreased to $1,258,941 for the nine months ended September 30, 2024, from $1,761,951 in 2023, a reduction of $503,010[277] - Net cash used in investing activities was $1,901,003 for the nine months ended September 30, 2024, significantly lower than $9,989,644 in 2023, primarily due to merger-related costs in the prior year[278] - Net cash provided by financing activities was $2,152,932 for the nine months ended September 30, 2024, down from $12,012,831 in 2023, reflecting reduced net issuance of debt[279] Shareholder Matters - Preferred dividends increased to $1,565,531 for the nine months ended September 30, 2024, compared to $218,516 in 2023, an increase of 616%[261] - Change in fair value of forward purchase agreement was a net expense of $5,109,277 for the nine months ended September 30, 2024, compared to $419,407 in 2023, indicating a significant increase of 1,118%[260] Company Operations - The company continues to see organic growth in its SaaS-based products, benefiting from trends toward cloud-based offerings[251] - The company views its operations as one segment focused on providing subscription-based SaaS, Managed IT, and related professional services[246] Going Concern - The company has an accumulated deficit of $138,213,468 and a net working capital deficit of $11,670,852 as of September 30, 2024, raising concerns about its ability to continue as a going concern[275] Agreements and Future Plans - The Company executed a Registration Rights Agreement with Clearthink on August 16, 2024, agreeing to file a registration statement within 30 days for shares of common stock issuable under the Strata Agreement[283] - Clearthink is obligated to make purchases at the Company's direction, with no upper limit on the price per share under the Strata Agreement[283] - The Company expects proceeds from sales to Clearthink will be used for working capital and general corporate purposes, but the exact amount cannot be determined at this time[284] - The Company will not sell or issue shares to Clearthink exceeding 19.99% of its outstanding shares without stockholder approval[285] - Clearthink and its affiliates cannot beneficially own more than 9.99% of the Company's outstanding common stock as a result of purchases under the Strata Agreement[286] - The Company may specify purchase amounts in a Request Notice, with a maximum of $1,000,000 or 500% of the average shares traded over the previous 10 trading days[287] - The purchase price for shares will vary based on trading price, ranging from 80% to 90% of the average of the two lowest daily volume-weighted average prices[288] - The Strata Agreement will terminate automatically after 24 months or upon reaching the Commitment Amount in gross purchase price[290] - The Company issued 300,000 shares valued at $156,030 as Commitment Fee Shares to Clearthink upon execution of the Strata Agreement[291]
ienect (ICCT) - 2024 Q3 - Quarterly Report