ID Watchdog Announces Results for Third Quarter 2013

DENVER, Nov. 20, 2013 /CNW/ -

• Revenues from core distribution channels increased 42.0%
• Total revenues increased 37.5%
• Gross profit increased 139.7%

ID Watchdog, Inc. (TSX VENTURE: IDW) (PINKSHEETS: IDWAF) ("ID Watchdog" or the "Company"), provider of consumer-facing identity theft protection and resolution services, today announced its results for the 3rd quarter ended September 30, 2013. All amounts are in U.S. dollars.

(Logo: http://photos.prnewswire.com/prnh/20130829/NY71341LOGO )

3rd Quarter 2013 Highlights:

• Revenue: Revenue totaled $596,680 for the third quarter of 2013, an increase of $162,628, or 37.5%, from the third quarter of 2012. During the third quarter of 2013, revenue from our Employee Benefits, Tech Support and Anti-virus channels, contributed $116,504 to the total increase in revenues and revenues from the iSekurity customers, which we purchased in May 2013, contributed $97,884 to the total increase in revenues. These increases were partially offset by a $51,760 decrease in revenues from our Consumer Marketing Channel.
• Gross Profit: Gross profit increased by $240,969, or 139.7%, from $172,469 during the third quarter of 2012 to $413,438 during the third quarter of 2013. The gross margin rate for the third quarter of 2013 and 2012 was 69.3% and 39.7%, respectively. In the fourth quarter of 2012, we entered into a new data agreement which substantially decreased our cost of revenue beginning in January 2013.
• Total Operating Expense: Total Operating Expense decreased by $88,759, or 13.9%, from the third quarter of 2012.
• Balance Sheet: Cash and cash equivalents as of September 30, 2013 was $493,925.

ID Watchdog CEO, Michael Greene, commented, "We are pleased to report strong top line growth in the third quarter as we continue to expand the distribution of our employee benefit and our tech support channels and improve our operating and financial performance."

ID Watchdog, Inc. Consolidated Interim Condensed Statements of Operations (Unaudited)
		Three months ended September 30,				Nine months ended September 30,
		2013		2012		2013		2012
Revenue		$ 596,680		$ 434,052		$ 1,679,364		$ 1,348,429
Cost of revenue		183,242		261,583		519,809		847,312
Gross profit		413,438		172,469		1,159,555		501,117
Operating expense:
General and administrative expense		333,207		277,087		1,081,437		1,131,101
Sales and Marketing expense		163,985		235,847		407,157		449,026
Stock – based compensation expense		29,166		103,725		130,221		445,896
Depreciation and amortization expense		23,479		21,937		68,061		68,835
		549,837		638,596		1,686,876		2,094,858
Operating loss		(136,399)		(466,127)		(527,321)		(1,593,741)
Other income (expense):
Interest expense		(203,797)		(184,902)		(588,526)		(556,121)
Interest income		87		400		97		5,011
Gain (loss) on warrant liability		19,966		3,639		(79,863)		384,158
		(183,744)		(180,863)		(668,292)		(166,952)
Net loss and comprehensive loss applicable to ordinary shares		$ (320,143)		$ (646,990)		$ (1,195,613)		$ (1,760,693)
Basic and diluted net loss per share applicable to ordinary shares		$ (0.00)		$ ( 0.01)		$ (0.01)		$ (0.01)
Weighted average number of shares outstanding - basic and diluted		121,498,040		118,834,997		120,446,719		118,537,114

	Consolidated Condensed Balance Sheets
					September 30, 2013				December 31, 2012
					(Unaudited)				(Unaudited)
	ASSETS
	Cash and cash equivalents				$	493,925			$	319,073
	Accounts receivable					216,289				144,561
	Prepaid expenses and other					133,868				73,466
		Total current assets				844,082				537,100
	Customer agreements, net					30,859				—
	Property and equipment, net					95,610				153,735
			Total Assets		$	970,551			$	690,835
	LIABILITIES
	Accounts payable, accrued liabilities and other				$	448,298			$	534,708
	Deferred Revenue					567,741				267,056
		Total current liabilities				1,016,039				801,764
	Deferred Rent					86,864				89,923
	Finance lease obligations, net of current portion					34,490				44,875
	Credit Facility, net					445,008				—
	Series C Preferred mandatorily redeemable preferred shares, net of discount and conversion feature					3,431,437				2,892,031
	Warrants liability					179,693				99,830
			Total Liabilities			5,193,531				3,928,423
			Total Shareholders' Deficit			(4,222,980)				(3,237,588)
	TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT				$	970,551			$	690,835

Financial information contained in this press release should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent quarterly reports and our annual report. These documents are available online at www.sedar.com and in the "Company Overview" section of our website at www.IDWatchdog.com.

About ID Watchdog, Inc.

ID Watchdog was founded in 2005 and is headquartered in Denver, Colorado. The Company provides three-tiered comprehensive monitoring, detection and resolution for identity theft. ID Watchdog proactively detects identity theft problems at their source and provides immediate resolution services to ensure complete peace of mind for individuals. All the Company's services have been developed with input from industry experts; national consumer advocacy groups; federal, state, and local law enforcement agencies; consumer protection agencies; and adhere to guidelines published by the Consumer Federation of America. For more information, please visit www.IDWatchdog.com.

Forward-Looking Statement

This news release includes certain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 which address future events and conditions which are subject to various risks and uncertainties. The actual results could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company's control. Although the Company believes that its expectations reflected in these forward-looking statements are reasonable, no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements are disclosed in the company's filings with Canadian regulators at www.sedar.com. ID Watchdog assumes no obligation to update the forward-looking statements of management beliefs, opinions, projections, or other factors should they change.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Company Contact:
ID Watchdog, Inc.
Jay B. Lewis
Chief Financial Officer
303-339-8099
[email protected]
www.idwatchdog.com

SOURCE: ID Watchdog, Inc.

http://www.idwatchdog.com

http://photos.prnewswire.com/prnh/20130829/NY71341LOGO