Washington, D.C. 20549

Form 8-K


Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): November 3, 2020  

Intelligent Systems Corporation
(Exact Name of Registrant as Specified in Charter)

Georgia 001-09330 581964787
(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification Number)


4355 Shackleford Road, Norcross, Georgia 30093
(Address of Principal Executive Offices) (Zip Code)

(770) 381-2900
(Registrant's telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

  [   ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  [   ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  [   ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
  [   ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [   ]


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]


Securities registered pursuant to Section 12(b) of the Act:


Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, $0.01 par value for the class INS NYSE American



Item 2.02. Results of Operations and Financial Condition.

On November 3, 2020, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1. Press release dated November 3, 2020


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

  Intelligent Systems Corporation
Date: November 3, 2020 By:  /s/ Matthew A. White        
    Matthew A. White


Intelligent Systems Reports Third Quarter 2020 Results

NORCROSS, Ga., Nov. 03, 2020 (GLOBE NEWSWIRE) -- Intelligent Systems Corporation [NYSE American: INS], the leading provider of innovative credit technology solutions and processing services to the financial technology and services market, announced today its financial results for the quarter ended September 30, 2020.

“Third-quarter results were a little better than we expected, specifically for license revenue, and demonstrated the continued resilience of our business, our strong financial position, and our unique product offering,” said Leland Strange, CEO of Intelligent Systems. “We recorded revenues of $10.3 million, representing an 8% increase over the prior-year period. While professional services and processing and maintenance primarily drove the year-over-year revenue increase, we also received additional license revenue in the quarter due to customers achieving a new tier.

“During the quarter we substantially completed the anticipated investments in our infrastructure needed to ensure CoreCard exceeds current and future customer needs. These investments will place near-term pressure on margins but are needed to achieve our long-term strategic vision. As we stated earlier in the year, we anticipate these investments will translate to incremental revenue opportunities and drive growth for fiscal 2021 and beyond.”

Mr. Strange continued, “The momentum we built upon in the third quarter reaffirms our optimism for growth in 2021. Given the third quarter 2020 license revenue, we are not anticipating any additional license revenue for the remainder of 2020. As we look into next year, we now expect to receive license revenues in both the first and the second half of the next fiscal year. As we have commented before, it is difficult to project quarter by quarter license revenues. We do believe that the second half license revenue will be much larger than what we report in the first 6 months. I am confident that our unique position, strong management team, and solid financial position will enable us to continue with growth in fiscal 2021 despite the challenges of the COVID-19 pandemic.”

Financial Highlights for the three months ended September 30, 2020

Total revenues – Total revenue in the three-month period ended September 30, 2020 was $10,304,000, which represents an increase of 8 percent compared to the comparable period in 2019.

In the following table, revenue is disaggregated by type of revenue for the three months ended September 30, 2020:

Three months ended September 30, (in thousands)                2020   2019
License $ 1,600   $ 2,225  
Professional services       5,392     4,579  
Processing and maintenance       2,950     2,235  
Third party          362     483  
Total $ 10,304   $ 9,522  

Income from operations was $3,481,000 for the third quarter compared to income from operations of $4,200,000 in the comparable prior year quarter.

Net income was $2,795,000 for the third quarter compared to net income of $3,092,000 in the comparable prior year quarter.

Earnings per diluted share was $0.31 for the third quarter compared to $0.34 in the comparable prior year quarter.

Liquidity and Capital Resources
Cash balance as of September 30, 2020 was $34,391,000 compared to $26,415,000 at December 31, 2019. For the nine months ended September 30, 2020, cash provided by operations was $15,184,000 compared to cash provided by operations of $7,679,000 for the comparable prior year period.

Investor Conference Call Today

The company is holding an investor conference call today, November 3, 2020, at 11 A.M. Eastern Standard Time. Interested investors are invited to attend the conference call by dialing (855) 766-6518 and entering conference ID 6013159. As part of the conference call Intelligent Systems will be conducting a question and answer session where participants are invited to email their questions to fax@intelsys.com prior to the call. A transcript of the call will be posted on the company’s website at www.intelsys.com as soon as available after the call.

The company will file its Form 10-Q for the period ended September 30, 2020 with the Securities and Exchange Commission today. For additional information about reported results, investors will be able to access the Form 10-Q on the company’s website at www.intelsys.com or on the SEC website, www.sec.gov.

About Intelligent Systems Corporation
For over thirty-five years, Intelligent Systems Corporation [NYSE American: INS] has identified, created, operated and grown technology companies. The company’s principal operations are CoreCard Software, Inc. (www.corecard.com) and its affiliate companies. CoreCard provides prepaid and credit card processing services using its proprietary software solutions that it also licenses to others. CoreCard has designed and developed a comprehensive suite of software solutions that corporations, financial institutions, retailers and processors use to manage credit and debit cards, prepaid cards, private label cards, fleet cards, loyalty programs, and accounts receivable and small loan transactions. CoreCard's flexible and proven processing platform is being utilized in many countries in addition to the United States including Australia, Canada, China, the United Arab Emirates, France, Italy, Mexico, New Zealand, Singapore, South Africa and the United Kingdom. Further information is available on the company’s website at www.intelsys.com or by calling the company at 770-381-2900.

In addition to historical information, this news release may contain forward-looking statements relating to Intelligent Systems Corporation and its subsidiary and affiliated companies. These statements include all statements that are not statements of historical fact regarding the intent, belief or expectations of Intelligent Systems Corporation and its management with respect to, among other things, results of operations, product plans, and financial condition. The words "may," "will," "anticipate," "believe," "intend," "expect," "estimate," "plan," "strategy" and similar expressions are intended to identify forward-looking statements. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those contemplated by such forward-looking statements. The company does not undertake to update or revise any forward-looking statements whether as a result of new developments or otherwise, except as required by law. Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are instability in the financial markets, delays in product development, undetected software errors, competitive pressures, changes in customers’ requirements or financial condition, market acceptance of products and services, the impact of new or changes in current laws, regulations or other industry standards, risks relating to unauthorized access to confidential information due to criminal conduct, attacks by hackers, employee or insider malfeasance and/or human error and declines in general economic and financial market conditions, particularly those that cause businesses to delay or cancel purchase decisions.

For further information, call
Matt White, 770-564-5504 or
email to matt@intelsys.com

Intelligent Systems Corporation
(unaudited, in thousands, except share and per share amounts)
  Three Months Ended
September 30,
Nine Months Ended
September 30,
  2020   2019   2020   2019  
Services $ 8,704   $ 7,297   $ 24,650   $ 20,275  
Products 1,600   2,225   1,600   3,725  
Total net revenue 10,304   9,522   26,250   24,000  
Cost of revenue        
Services 4,217   3,012   11,418   8,445  
Total cost of revenue 4,217   3,012   11,418   8,445  
Marketing 31   35   94   124  
General and administrative 936   700   2,698   2,394  
Research and development 1,639   1,575   3,477   3,634  
Income from operations 3,481   4,200   8,563   9,403  
Investment (loss) income (92 ) (109 ) (1,237 ) (105 )
Other income (loss) 59   104   312   353  
Income before Income taxes 3,448   4,195   7,638   9,651  
Income taxes 653   1,103   1,596   2,379  
Net income $ 2,795   $ 3,092   $ 6,042   $ 7,272  
Earnings per share attributable to Intelligent Systems Corporation:          
Basic $ 0.31   $ 0.35   $ 0.68   $ 0.82  
Diluted $ 0.31   $ 0.34   $ 0.67   $ 0.81  
Basic weighted average common shares outstanding 8,927,908   8,886,321   8,925,961   8,859,544  
Diluted weighted average common shares outstanding 9,022,996   9,013,459   9,021,314   8,977,501  

Intelligent Systems Corporation
(in thousands, except share and per share amounts)
As of September 30,
  December 31,
ASSETS (unaudited)   (audited)  
Current assets:    
Cash $ 34,391   $ 26,415  
Accounts receivable, net 4,045   8,759  
Other current assets 1,217   905  
Total current assets   39,653   36,079  
Investments 2,063   3,081  
Notes and interest receivable 2,643   1,795  
Property and equipment, at cost less accumulated depreciation 6,890   2,177  
Other long-term assets 3,304   1,108  
Total assets $ 54,553   $ 44,240  
Current liabilities:    
Accounts payable $ 465   $ 403  
Deferred revenue, current portion 3,475   689  
Accrued payroll 2,016   2,503  
Accrued expenses 107   153  
Income tax payable 792   1,100  
Other current liabilities 1,582   1,345  
Total current liabilities 8,437   6,193  
Noncurrent liabilities:    
Deferred revenue, net of current portion 3   23  
Deferred tax liability   279   275  
Long-term lease obligation 2,208   460  
Total noncurrent liabilities         2,490   758  
Intelligent Systems Corporation stockholders’ equity:    
Common stock, $0.01 par value, 20,000,000 shares authorized, 8,929,368 and 8,924,988 issued and outstanding at September 30, 2020 and December 31, 2019,

Additional paid-in capital 15,780   15,450  
Accumulated other comprehensive loss (129 ) (94 )
Accumulated income 27,886   21,844  
Total Intelligent Systems Corporation stockholders’ equity 43,626   37,289  
Total liabilities and stockholders’ equity $ 54,553   $ 44,240