Market Newsdesk

• Revenue growth reflects rebound of inpatient colonoscopy volumes in Q3 and increased demand for the Pure-Vu system from early adopter hospitals

• Q3 Pure-Vu-enabled procedures increased by more than 50% above prior quarterly average
• First major metropolitan health system collaboration intends to utilize Pure-Vu as new standard for facilitating inpatient colonoscopy.

FORT LAUDERDALE, Fla., Nov. 12, 2020 (GLOBE NEWSWIRE) — Motus GI Holdings, Inc., (NASDAQ: MOTS) (“Motus GI” or the “Company”), a medical technology company providing endoscopy solutions that improve clinical outcomes and enhance the cost-efficiency associated with the diagnosis and management of gastrointestinal conditions, today reported its financial results for the third quarter ended September 30, 2020, and provided a corporate update.

“In Q3 there was a positive turn in our commercial momentum following the headwinds we faced during the Covid-19 pandemic. I am pleased that we continue to execute our strategy of getting our Pure-Vu system into the hands of nearly two dozen of the most prominent healthcare institutions in the United States. During Q3, we saw these hospitals have ramped up inpatient colonoscopy volumes to approximately 80-90% of pre-pandemic levels. The Motus GI team has remained actively engaged with our early adopter accounts and we are resuming the trajectory we started in Q1, prior to the Covid-19 pandemic. We are seeing positive trends in utilization. Moving forward, we believe we can start to achieve sustainable procedure volumes at target accounts, and we expect to see a continuation of our progress and momentum into the fourth quarter,” stated Tim Moran, Chief Executive Officer of Motus GI.

Progress Updates

Since the first commercial placement of a Pure-Vu® System in October 2019, Motus GI has focused its U.S. sales efforts on early adopter hospitals and larger hospital networks. During this time, Motus GI has placed the Pure-Vu® System in more than 20 of these targeted hospitals. In Q3, the Company initiated new Pure-Vu evaluations at NYU Langone, Ascension – St. John Hospital, and Indiana University, while also resuming activities at several existing sites, including Northwestern Memorial Hospital, who put their new product evaluations on hold while managing the Covid-19 pandemic.

As part of the strategy to drive sustainable and growing Pure-Vu single-use sleeve volumes, the Company will collaborate with major hospitals to develop and implement protocols for inpatient colonoscopies that include the Pure-Vu® System. Last week, the Company announced its first major collaboration with NYU Langone Health on its protocol to include the Pure-Vu System for the effective management of inpatient colonoscopy. The Company believes these protocols can improve patient care and hospital economics. In addition, the Company believes these protocols will likely drive expanded adoption of the Pure-Vu® System among these hospitals over time.

The Company has successfully published several clinical hospital case studies in conjunction with Key Opinion Leaders (KOL) from hospitals currently using the Pure-Vu® System for marketing and training purposes. Motus GI has developed a series of podcasts and KOL webinars to provide broad access to these examples of the impact the Pure-Vu® System can provide as it relates to positive clinical and economic outcomes for treating patients with poorly prepped colons. The podcast series is available at the MotusGI YouTube channel under Pure-Vu Review (Click Here).

In the third quarter of 2020, the Company received notice that the China National Intellectual Property Administration (“CNIPA”) issued a patent covering the method of mounting Motus GI’s proprietary sensing technology and enhanced suction systems with the distal end of a colonoscope. This patent further protects the Company’s flagship product – the Pure-Vu® System – in this key potential market. The Company has now more than 29 granted patents and 27 pending patents protecting the Pure-Vu® System.

Financial Results for the Quarter Ended September 30, 2020

The Company reported revenue of approximately $33,000 for the third quarter of 2020, compared to approximately $3,000 for the same period last year. Revenue for the third quarter is from new account and site reorder sales of Pure-Vu single-use sleeves.

For the three months ended September 30, 2020, the Company reported a net loss of approximately $3.9 million, or a net loss per diluted share of $0.13, compared to $5.2 million, or a net loss per diluted share of $0.18, for the same period last year. During the third quarter, net cash used in operating activities and for the purchase of fixed assets was $2.7 million as compared to $4.8 million for the same period of 2019.  These decreases were primarily attributable to the Company’s cost-cutting measures that were announced on March 30, 2020. These measures reduced the Company’s quarterly cash burn by approximately 50% compared to previously forecasted rates for the second half of 2020.

The Company reported approximately $23.7 million in cash, cash equivalents and investments as of September 30, 2020, compared to $28.7 million as of December 31, 2019. In September 2020, the Company sold common stock and other equity securities which raised net proceeds of approximately $9.2 million.

Conference Call:

The Motus GI management team has scheduled a conference call for today, November 12^th, at 4:30 p.m. ET to discuss these results. To access the conference call, investors are invited to dial (877) 407-0792 (U.S. and Canada) or (201) 689-8263 (International). The conference ID number is 13711588. A live audio webcast can be accessed by visiting the investor relations section of the Company’s website, www.motusgi.com or http://public.viavid.com/index.php?id=141815. A replay of the webcast will be archived on the Motus GI website for 90 days following the event.

About Motus GI

Motus GI Holdings, Inc. is a medical technology company, with subsidiaries in the U.S. and Israel, providing endoscopy solutions that improve clinical outcomes and enhance the cost-efficiency associated with the diagnosis and management of gastrointestinal conditions.

For more information, visit www.motusgi.com and connect with the Company on Twitter, LinkedIn and Facebook.

Forward-Looking Statements

This press release contains certain forward-looking statements. Forward-looking statements are based on the Company’s current expectations and assumptions. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. These statements may be identified by the use of forward-looking expressions, including, but not limited to, “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “potential,” “predict,” “project,” “should,” “would” and similar expressions and the negatives of those terms, including without limitation, risks related to the Company’s cost reduction plan, the cost savings and the cash expenses related to the implementation of the plan, risks related to the continued impact of the COVID-19 pandemic, risks inherent in the development and commercialization of potential products, uncertainty in the timing and results of clinical trials or regulatory approvals, maintenance of intellectual property rights or other risks discussed in the Company’s Form 10-K filed on March 30, 2020, and its other filings with the Securities and Exchange Commission. Prospective investors are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

Investor Contact:


Bob Yedid
LifeSci Advisors
(646) 597-6989
[email protected] 

Motus GI Holdings, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands, except share and per share amounts)
		September 30,				December 31,
		2020				2019
		(unaudited)				(*)
ASSETS
Current assets
Cash and cash equivalents		$	23,687			$	20,528
Investments			–				8,203
Accounts receivable			39				65
Inventory			1,295				1,014
Prepaid expenses and other current assets			889				339
Related party receivable			2				18
Total current assets			25,912				30,167
Fixed assets, net			994				1,056
Right-of-use assets			816				1,021
Other non-current assets			13				13
Total assets		$	27,735			$	32,257
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses		$	1,889			$	2,999
Operating lease liabilities – current			236				321
Other current liabilities			413				270
Term debt, net of debt discount of $23 and $246, respectively			7,977				7,754
Total current liabilities			10,515				11,344
Contingent royalty obligation			1,624				1,872
Operating lease liabilities – non-current			597				713
Total liabilities			12,736				13,929
Commitments and contingent liabilities (Note 9)
Shareholders’ equity
Preferred Stock $0.0001 par value; 8,000,000 shares authorized; zero shares issued
and outstanding			–				–
Preferred Series A Stock $0.0001 par value; 2,000,000 shares authorized; zero
shares issued and outstanding			–				–
Common Stock $0.0001 par value; 115,000,000 shares authorized; 32,182,589 and
28,811,087 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively			3				3
Additional paid-in capital			114,319				102,789
Accumulated deficit			(99,323	)			(84,464	)
Total shareholders’ equity			14,999				18,328
Total liabilities and shareholders’ equity		$	27,735			$	32,257
(*)    Derived from audited consolidated financial statements

Motus GI Holdings, Inc. and Subsidiaries  Condensed Consolidated Statements of Comprehensive Loss (unaudited, in thousands, except share and per share amounts)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
Revenue		$	33			$	3			$	62			$	8
Cost of revenue			32				62				72				65
Gross profit (loss)			1				(59	)			(10	)			(57	)
Operating expenses:
Research and development			1,160				2,173				4,359				6,706
Sales and marketing			509				1,160				2,954				3,473
General and administrative			2,155				2,028				7,432				7,189
Total operating expenses			3,824				5,361				14,745				17,368
Operating loss			(3,823	)			(5,420	)			(14,755	)			(17,425	)
Gain on change in estimated fair value of contingent royalty obligation			3				127				248				68
Finance income (expense), net			(117	)			95				(348	)			214
Foreign currency gain (loss)			(1	)			3				(4	)			(6	)
Loss before income taxes			(3,938	)			(5,195	)			(14,859	)			(17,149	)
Income tax expense			–				–				–				–
Net loss		$	(3,938	)		$	(5,195	)		$	(14,859	)		$	(17,149	)
Basic and diluted loss per common share		$	(0.13	)		$	(0.18	)		$	(0.51	)		$	(0.72	)
Weighted average number of common shares outstanding, basic and diluted			30,422,265				28,716,213				29,366,154				23,896,843

DALLAS-FORT WORTH, Texas, Nov. 12, 2020 (GLOBE NEWSWIRE) — Monitronics International, Inc. and its subsidiaries (doing business as Brinks Home Security ^TM), (“Brinks Home Security” or the “Company”) (OTC: SCTY) today announced results for the three months ended September 30, 2020.

Third Quarter Key Highlights¹
:

• Net revenue of $130.9 million, up 8.3% year-over- year
• Net loss of $19.2 million, as compared to net income of $673.6 million in the prior year period, which included a one-time $702.8 million gain from restructuring
• Adjusted EBITDA of $68.5 million, up 9.6% year-over-year
• Successful integration of over 110,000 Protect America bulk buy accounts acquired in mid-June 2020
• William Niles named permanent CEO on September 30, 2020

William Niles, Chief Executive Officer of Brinks Home Security, commented, “In the third quarter, we accelerated the execution of our go-forward strategic plan, with the objective of generating profitable accounts, at scale, and retaining for life. Our strategic vision is based on delivering a superior customer experience built around the Brinks Home brand and featuring a suite of premium smart home security products in both the ‘Do It For Me’ and ‘DIY’ categories.  We intend to enhance the customer experience at every touchpoint of the customer journey and improve unit economics by building a strong foundation in data analytics that, we believe, will reduce our subscriber acquisition cost, lower cost to serve and improve retention.”

“To enable this transformation, we have made several key hires across our organization to ensure we have the right leadership to drive a culture of customer centricity and execution. We also continue to take smart actions to manage our cost structure and strengthen our balance sheet. We believe we have a compelling strategic plan that will accelerate profitable growth, generate cash, and improve margins and long-term shareholder value.”

Customer & Attrition Data

The Company has two principal sales channels including its direct-to-consumer sales channel (the “Direct to Consumer Channel” or “DTC”), which offers both Do-It-Yourself and professional installation security solutions and through its exclusive authorized dealer network (the “Dealer Channel”), which provides product and installation services, as well as support to customers.  In addition, from time to time, the Company acquires accounts through negotiated bulk account acquisitions.

Accounts Added

The Company added 17,111 customers in the third quarter of 2020, as compared to 21,228 accounts for the same period in the prior year. Both the Company’s Dealer and the DTC Channels experienced year-over-year declines in customers added. The decline in the Dealer Channel was primarily due to the Company’s election to cease purchasing accounts from two dealers in the fourth quarter of 2019 and restrictions on door-to-door selling and other impacts related to the outbreak of COVID-19. The decline in the DTC Channel production was primarily due to the Company’s election to leverage more profitable organic leads. There were no bulk account acquisitions during the third quarter of 2020 or 2019.

_____________________________
¹ Year-over-year comparisons based on the pro forma net revenue, net loss and adjusted EBITDA for September 30, 2019. Such pro forma adjustments to give effect to the combined successor and predecessor periods. Please see the appendix to this press release for more information.

Attrition

		Twelve Months Ended September 30,
		2020			2019
Beginning balance of accounts not subject to Earnout Payments		865,848			942,157
Accounts acquired		75,627			84,899
Accounts cancelled		(128,736	)		(156,047	)
Cancelled accounts guaranteed by dealer and other adjustments (a)		(5,276	)		(5,161	)
Ending balance of accounts not subject to Earnout Payments		807,463			865,848
Accounts subject to Earnout Payments		107,929			—
Ending balance of accounts		915,392			865,848
Attrition rate – Core Unit (c)		15.4	%		17.3	%
Attrition rate – Core RMR (b) (c)		17.7	%		17.6	%

(a)		Includes cancelled accounts that are contractually guaranteed to be refunded from holdback.
(b)		The RMR of cancelled accounts follows the same definition as subscriber unit attrition as noted above. RMR attrition is defined as the RMR of cancelled accounts in a given period, adjusted for the impact of price increases or decreases in that period, divided by the weighted average of RMR for that period.
(c)		Core Unit and RMR attrition rates exclude the impact of the Protect America bulk buy, where the Company is funding the purchase price through an earnout payment structure (the “Earnout Payments”).

Core Unit attrition, which excludes accounts subject to earnout payments, was down for the twelve months ended September 30, 2020 as compared to the prior twelve-month period.  The decrease in the Core Unit attrition rate includes the impact of fewer customers, as a percentage of the entire base, reaching the end of their initial contract term, continued efforts around “at-risk” extensions and customer retention and the benefit of improved credit quality in the DTC Channel.

Core RMR attrition increased year-over-year due to a combination of lower RMR for accounts generated in the Company’s DTC Channel, as a minimal equipment subsidy is offered, lower production in the Dealer Channel, which typically enjoys higher RMR, and rate reductions relating to the Company’s at-risk retention program. Further, in light of COVID-19, starting in March 2020, the Company made the decision to defer taking ordinary course rate adjustments to its base, which has continued through September 30, 2020. The Company will evaluate its rate strategy going forward as circumstances warrant.

Presentation of Predecessor and Successor Financial Results

Apart from interest and amortization expense, Brinks Home Security’s operating results and key operating performance measures on a consolidated basis were not materially impacted by the reorganization of the Company in August 2019 and its application of fresh start accounting. The Company believes that certain of our consolidated operating results for the three months ended September 30, 2020 is comparable to certain operating results from the comparable prior year period.  Accordingly, the Company believes that discussing the combined non-GAAP results of operations and cash flows of the Predecessor Company and the Successor Company for the three-month period ended September 30, 2019 is useful when analyzing certain performance measures.

Three Months Ended September 30, 2020 Financial Summary²

	Successor Company										Successor Company					Predecessor Company
	Three Months Ended September 30,					Non-GAAP Combined Three Months Ended September 30,					Period from September 1, 2019 through September 30,					Period from July 1, 2019 through August 31,
	2020					2019					2019					2019
Net revenue	$	130,852				$	120,878				$	36,289				$	84,589
Cost of services	31,383					28,962					8,976					19,986
Selling, general and administrative, including stock-based and long-term incentive compensation	31,572					32,370					11,390					20,980
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets	57,240					49,810					17,302					32,508
Interest expense	20,033					34,586					7,474					27,112
Income tax expense	717					642					204					438
Net (loss) income	(19,164		)			673,578					(10,807		)			684,385
Adjusted EBITDA	68,512					62,502					17,144					45,358

The Company reported net revenues of $130.9 million, an increase of 8.3% as compared to the prior year period.  This improvement in net revenues includes an increase in alarm monitoring revenue of $7.0 million resulting from a higher number of average subscribers relating to the Protect America bulk acquisition and a previously disclosed $5.3 million fresh start adjustment to reduce revenue in the prior year period in connection with the Company’s emergence from bankruptcy.  Also included in the year-over-year increase in net revenues is a $3.3 million increase in product, installation and service revenue largely attributable to the Company’s continued efforts around at-risk extensions. 

RMR acquired during the quarter was $841,000, as compared to $1.0 million in the prior year period.

Cost of Services was $31.4 million, an increase of 8.4% year-over-year.  The increase is attributable to the cost to serve the incremental Protect America customers. The increase was partially offset by a decline in subscriber acquisition costs in the Company’s DTC Channel.

Selling, General and Administrative costs were $31.6 million, a decline of 2.5% year-over-year.  The decrease is primarily due to reduced subscriber acquisition costs and consulting fees on integration and implementation of company initiatives. These declines were partially offset by higher salary expense and professional fees related to the post emergence operating structure of the Company.

Net loss totaled $19.2 million as compared to a net income of $673.6 million in the prior year period.  The year-over-year change is primarily attributable to prior year gains on restructuring and reorganization and current year increases in 2G and 3G radio conversion costs and amortization expense.  These decreases were partially offset by higher revenues and lower interest expense. 

Adjusted EBITDA was $68.5 million, an increase of 9.6% year-over-year.

___________________________________
²All variances are year-over-year unless otherwise noted.

Liquidity

As of September 30, 2020, excluding a minimum liquidity requirement of $25 million under the terms of the Company’s credit agreements, the Company had total short-term liquidity of $133.7 million to fund working capital and continuing operations.  This includes $12.8 million of cash and cash equivalents and $120.9 million of remaining borrowing capacity under the $145.0 million Revolving Credit Facility.

The Company’s existing long-term debt at September 30, 2020 includes an aggregate principal balance of $987.8 million under its Takeback Loan Facility, Term Loan Facility and the Revolving Credit Facility.

Quarterly Report on Form 10-Q

Brinks Home Security’s financial statements and related footnotes will be available in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, which is expected to be filed with the U.S. Securities and Exchange Commission (“SEC”) on November 13, 2020.

Conference Call

Brinks Home Security will host a conference call on Thursday, November 12, 2020 at 5:00 pm ET.  Registration for the conference call can be completed by visiting the following website prior to, or on the day of, the conference call: http://www.directeventreg.com/registration/event/7166334. Upon registering, each participant will be provided with call details and a registrant ID. Reminders will also be sent to registered participants via email. Alternatively, the conference call will be available via a live webcast. To access the live webcast or a replay, visit the Company’s investor relations website at https://ir.brinkshome.com/.

A replay of the call can also be accessed via phone through November 19, 2020 by dialing (800) 585-8367 from the U.S., or (416) 621-4642 from outside the U.S. The conference I.D. number is 7166334.

About Brinks Home Security

Brinks Home Security (OTC: SCTY) is one of the largest home security and alarm monitoring companies in North America.  Headquartered in the Dallas-Fort Worth area, Brinks Home Security secures over 900,000 residential and commercial customers through highly responsive, simple security solutions backed by expertly trained professionals. The Company has one of the nation’s largest networks of independent authorized dealers and agents – providing products and support to customers in the U.S., Canada, and Puerto Rico – as well as direct-to-consumer sales of DIY and professionally installed products.

Forward Looking Statements

This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about business strategies, market potential and expansion, the success of new products and services, the launch of Brinks Home Security’s consumer financing solution; the anticipated benefits of the Brinks Home Security’s rebranding; customer retention; account creation and related cost; anticipated account generation; future financial performance; debt refinancing; recovery of insurance proceeds and other matters that are not historical facts. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, possible changes in market acceptance of our services, technological innovations in the alarm monitoring industry, competitive issues, continued access to capital on terms acceptable to us, our ability to capitalize on acquisition opportunities, general market and economic conditions, including global economic concerns due to the COVID-19 outbreak, and changes in law and government regulations. These forward-looking statements speak only as of the date of this press release, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Please refer to the publicly filed documents of Monitronics International, Inc., including the most recent Forms 10-K and 10-Q for additional information about us and about the risks and uncertainties related to our business which may affect the statements made in this press release.

1) Adjusted EBITDA and the Non-GAAP Combined Three Months Ended September 30, 2019 financials are non-GAAP financial measures. See the Appendix of this press release for related disclosures and calculations.

Contact:

Erica Bartsch
Sloane & Company
212-446-1875
[email protected]

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets Amounts in thousands, except share amounts
	Successor Company
	September 30, 2020				December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	12,759			$	14,763
Restricted cash	133				238
Trade receivables, net of allowance for doubtful accounts of $2,759 in 2020 and $3,828 in 2019	10,854				12,083
Inventories, net	6,878				5,242
Prepaid and other current assets	20,387				19,953
Total current assets	51,011				52,279
Property and equipment, net of accumulated depreciation of $13,796 in 2020 and $3,777 in 2019	41,516				42,096
Subscriber accounts and deferred contract acquisition costs, net of accumulated amortization of $208,387 in 2020 and $61,771 in 2019	1,089,198				1,064,311
Dealer network and other intangible assets, net of accumulated amortization of $25,748 in 2020 and $7,922 in 2019	118,952				136,778
Goodwill	—				81,943
Deferred income tax asset, net	684				684
Operating lease right-of-use asset	18,345				19,277
Other assets	18,651				21,944
Total assets	$	1,338,357			$	1,419,312
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	13,369			$	16,869
Other accrued liabilities	45,806				24,954
Deferred revenue	11,065				12,008
Holdback liability	8,583				8,191
Current portion of long-term debt	8,225				8,225
Total current liabilities	87,048				70,247
Non-current liabilities:
Long-term debt	979,550				978,219
Long-term holdback liability	1,761				2,183
Operating lease liabilities	15,648				16,195
Other liabilities	66,989				6,390
Total liabilities	1,150,996				1,073,234
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value.  Authorized 5,000,000 shares; no shares issued	—				—
Common stock, $0.01 par value.  Authorized 45,000,000 shares; issued and outstanding 22,500,000 shares at both September 30, 2020 and December 31, 2019	225				225
Additional paid-in capital	379,175				379,175
Accumulated deficit	(189,779		)		(33,331		)
Accumulated other comprehensive (loss) income, net	(2,260		)		9
Total stockholders’ equity	187,361				346,078
Total liabilities and stockholders’ equity	$	1,338,357			$	1,419,312

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Amounts in thousands, except shares and per share amounts
	Successor Company									Predecessor Company
	Three Months Ended September 30,				Period from September 1, 2019 through September 30,					Period from July 1, 2019 through August 31,
	2020				2019					2019
Net revenue	$	130,852			$	36,289				$	84,589
Operating expenses:
Cost of services	31,383				8,976					19,986
Selling, general and administrative, including stock-based and long-term incentive compensation	31,572				11,390					20,980
Radio conversion costs	5,612				825					931
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets	57,240				17,302					32,508
Depreciation	3,459				925					1,073
	129,266				39,418					75,478
Operating income (loss)	1,586				(3,129		)			9,111
Other (income) expense:
Gain on restructuring and reorganization, net	—				—					(702,824		)
Interest expense	20,033				7,474					27,112
	20,033				7,474					(675,712		)
(Loss) income before income taxes	(18,447		)		(10,603		)			684,823
Income tax expense	717					204				438
Net (loss) income	(19,164		)		(10,807		)			684,385
Other comprehensive loss:
Unrealized loss on derivative contracts, net	(475		)		—					—
Total other comprehensive loss, net of tax	(475		)		—					—
Comprehensive (loss) income	$	(19,639	)		$	(10,807	)			$	684,385
Basic and diluted income per share:
Net loss	$	(0.85	)		$	(0.48	)			$	—
Weighted average Common shares – basic and diluted	22,500,000				22,500,000					—
Total issued and outstanding Common shares at period end	22,500,000				22,500,000					—

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Amounts in thousands, except shares and per share amounts
	Successor Company									Predecessor Company
	Nine Months Ended September 30,				Period from September 1, 2019 through September 30,					Period from January 1, 2019 through August 31,
	2020				2019					2019
Net revenue	$	374,235			$	36,289				$	342,286
Operating expenses:
Cost of services	87,017				8,976					75,286
Selling, general and administrative, including stock-based and long-term incentive compensation	108,566				11,390					80,365
Radio conversion costs	14,103				825					931
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets	164,889				17,302					130,791
Depreciation	10,019				925					7,348
Goodwill impairment	81,943				—					—
	466,537				39,418					294,721
Operating (loss) income	(92,302		)		(3,129		)			47,565
Other (income) expense:
Gain on restructuring and reorganization, net	—				—					(669,722		)
Interest expense	60,582				7,474					105,081
Realized and unrealized loss, net on derivative financial instruments	—				—					6,804
Refinancing expense	—				—					5,214
	60,582				7,474					(552,623		)
(Loss) income before income taxes	(152,884		)		(10,603		)			600,188
Income tax expense	1,937					204				1,775
Net (loss) income	(154,821		)		(10,807		)			598,413
Other comprehensive loss:
Unrealized loss on derivative contracts, net	(2,269		)		—					(940		)
Total other comprehensive loss, net of tax	(2,269		)		—					(940		)
Comprehensive (loss) income	$	(157,090	)		$	(10,807	)			$	597,473
Basic and diluted income per share:
Net loss	$	(6.88	)		$	(0.48	)			$	—
Weighted average Common shares – basic and diluted	22,500,000				22,500,000					—
Total issued and outstanding Common shares at period end	22,500,000				22,500,000					—

Adjusted EBITDA

We evaluate the performance of our operations based on financial measures such as revenue and “Adjusted EBITDA.” Adjusted EBITDA is a non-GAAP financial measure and is defined as net income (loss) before interest expense, interest income, income taxes, depreciation, amortization (including the amortization of subscriber accounts, dealer network and other intangible assets), restructuring charges, stock-based compensation, and other non-cash or non-recurring charges. We believe that Adjusted EBITDA is an important indicator of the operational strength and performance of our business. In addition, this measure is used by management to evaluate operating results and perform analytical comparisons and identify strategies to improve performance. Adjusted EBITDA is also a measure that is customarily used by financial analysts to evaluate the financial performance of companies in the security alarm monitoring industry and is one of the financial measures, subject to certain adjustments, by which our covenants are calculated under the agreements governing our debt obligations. Adjusted EBITDA does not represent cash flow from operations as defined by generally accepted accounting principles in the United States (“GAAP”), should not be construed as an alternative to net income or loss and is indicative neither of our results of operations nor of cash flows available to fund all of our cash needs. It is, however, a measurement that we believe is useful to investors in analyzing our operating performance. Accordingly, Adjusted EBITDA should be considered in addition to, but not as a substitute for, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP. As companies often define non-GAAP financial measures differently, Adjusted EBITDA as calculated by Monitronics should not be compared to any similarly titled measures reported by other companies.

The following table provides a reconciliation of Net (loss) income to total Adjusted EBITDA for the periods indicated (amounts in thousands):

	Successor Company										Successor Company					Predecessor Company
	Three Months Ended September 30,					Non-GAAP Combined Three Months Ended September 30,					Period from September 1, 2019 through September 30,					Period from July 1, 2019 through August 31,
	2020					2019					2019					2019
Net (loss) income	$	(19,164	)			$	673,578				$	(10,807	)			$	684,385
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets	57,240					49,810					17,302					32,508
Depreciation	3,459					1,998					925					1,073
Radio conversion costs	5,612					1,756					825					931
Stock-based compensation	—					266					—					266
Long-term incentive compensation	2					107					67					40
Severance expense (a)	47					—					—					—
Integration / implementation of company initiatives	566					2,583					1,154					1,429
Gain on restructuring and reorganization, net	—					(702,824		)			—					(702,824		)
Interest expense	20,033					34,586					7,474					27,112
Income tax expense	717					642					204					438
Adjusted EBITDA	$	68,512				$	62,502				$	17,144				$	45,358
Expensed Subscriber acquisition costs, net
Gross subscriber acquisition costs (b)	$	3,102				$	8,041				$	2,499				$	5,542
Revenue associated with subscriber acquisition costs	(1,527		)			(1,925		)			(534		)			(1,391		)
Expensed Subscriber acquisition costs, net	$	1,575				$	6,116				$	1,965				$	4,151

_____________________

(a)		Severance expense related to transitioning executive leadership in 2020.
(b)		Gross subscriber acquisition costs for the three months ended September 30, 2019 has been restated from $9,710,000 to $8,041,000 due to allocation adjustments made to align with current period presentation of expensed subscriber acquisition costs.

The following table provides a reconciliation of Net (loss) income to total Adjusted EBITDA for the periods indicated (amounts in thousands):

	Successor Company										Successor Company					Predecessor Company
	Nine Months Ended September 30,					Non-GAAP Combined Nine Months Ended September 30,					Period from September 1, 2019 through September 30,					Period from January 1, 2019 through August 31,
	2020					2019					2019					2019
Net (loss) income	$	(154,821	)			$	587,606				$	(10,807	)			$	598,413
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets	164,889					148,093					17,302					130,791
Depreciation	10,019					8,273					925					7,348
Radio conversion costs	14,103					1,756					825					931
Stock-based compensation	—					42					—					42
Long-term incentive compensation	403					657					67					590
LiveWatch acquisition contingent bonus charges	—					63					—					63
Legal settlement reserve (related insurance recovery)	(700		)			(4,800		)			—					(4,800		)
Severance expense (a)	4,289					—					—					—
Integration / implementation of company initiatives	8,710					5,997					1,154					4,843
Goodwill impairment	81,943					—					—					—
Gain on restructuring and reorganization, net	—					(669,722		)			—					(669,722		)
Interest expense	60,582					112,555					7,474					105,081
Realized and unrealized loss, net on derivative financial instruments	—					6,804					—					6,804
Refinancing expense	—					5,214					—					5,214
Income tax expense	1,937					1,979					204					1,775
Adjusted EBITDA	$	191,354				$	204,517				$	17,144				$	187,373
Expensed Subscriber acquisition costs, net
Gross subscriber acquisition costs (b)	$	14,693				$	22,818				$	2,499				$	20,319
Revenue associated with subscriber acquisition costs	(4,831		)			(6,021		)			(534		)			(5,487		)
Expensed Subscriber acquisition costs, net	$	9,862				$	16,797				$	1,965				$	14,832

_____________________

(a)		Severance expense related to transitioning executive leadership in 2020.
(b)		Gross subscriber acquisition costs for the nine months ended September 30, 2019 has been restated from $27,902,000 to $22,818,000 due to allocation adjustments made to align with current period presentation of expensed subscriber acquisition costs.

WOBURN, Mass., Nov. 12, 2020 (GLOBE NEWSWIRE) — Yield10 Bioscience, Inc. (Nasdaq:YTEN), an agricultural bioscience company, today reported financial results for the three and nine months ended September 30, 2020.

“We are very pleased with our strong progress across multiple fronts in the third quarter and beyond,” said Oliver Peoples, Ph.D., President and Chief Executive Officer of Yield10 Bioscience. “We completed harvesting for our 2020 field test program to evaluate novel yield and compositional traits in Camelina and canola conducted in the United States and Canada, and look forward to reporting data in the fourth quarter of 2020 through early 2021.  We plan to evaluate seed yield, oil content, PHA content and other metrics of the traits which will also inform our priorities for trait evaluation in 2021.”

“We are very pleased to have recently announced our collaboration with Rothamsted Research for the advancement of technology that enables the land-based, sustainable production of omega-3 (DHA + EPA) oils for use in aquaculture. There is a significant market opportunity for the development of plant-based feeding solutions for the production of fish, particularly salmon, for human consumption. The technology has demonstrated the DHA + EPA omega-3 trait in Camelina and is highly complementary to our own Camelina Platform. The key objective is to support Rothamsted’s continued research as they further optimize the DHA + EPA omega-3 trait as a drop-in replacement for southern hemisphere fish oil and conduct field tests and feeding studies.  Yield10 will develop a strategic business plan with an initial focus on South America.”

“In addition to executing our field test program and advancing our Camelina business plan, we also shored up our balance sheet in the third quarter with the closing of a public offering and concurrent private placement of common stock that raised $5.7 million in gross proceeds to Yield10. As we approach year end 2020, we remain focused on generating proof points for our traits in development and on advancing business discussions around our Camelina business plan,” Dr. Peoples concluded.

Recent Accomplishments Towards Achieving 2020 Milestones

Advance the Camelina Business Plan.  Yield10 recently signed exclusive research collaboration and commercial option agreements with Rothamsted Research to evaluate advanced technology for producing omega-3 nutritional oils in Camelina. The Rothamsted technology could enable the sustainable, plant-based production of DHA+EPA omega-3 nutritional oil that closely mimics the composition of southern hemisphere fish oil, an important ingredient in aquaculture feed for salmon and other species.

In the third quarter, Yield10 began field tests of internally developed double haploid varieties of winter Camelina as part of a program to develop Camelina as a commercial crop. Yield10 also harvested 50 acres of wild-type spring Camelina to begin building relationships with growers, developing agronomic guidelines for successfully growing Camelina, and producing Camelina oil and meal for sampling to potential customers.

Generate Proof Points for Novel Traits in Camelina and Canola. Yield10 completed the harvest of the Company’s 2020 Field Tests to evaluate a series of traits in Camelina and canola. Key studies include the evaluation of C3004 in Camelina as well as tests of traits to boost seed yield and/or oil content in Camelina and canola. These studies, for the first time, include field testing of a novel trait to produce PHA in the seed of Camelina. The purpose of this activity is to determine the suitability of these first generation PHA Camelina lines for scale-up and PHA product prototyping in 2021. Yield10 expects that data from the studies will begin to become available in the fourth quarter of 2020 and into early 2021.

Advance the Corn Development Program. Continued to execute field work to create hybrid corn lines for field testing including the start of a second growth cycle in the third quarter for corn lines deployed with Yield10 traits. Yield10 plans to seek a research license partner for corn.

Manage its Financial Profile and Strengthen the Balance Sheet. Yield10’s financial results for the nine-month period ended September 30, 2020 are on track with internal estimates. Yield10 strengthened its balance sheet in the third quarter of 2020 based on raising approximately $5.7 million in gross proceeds from the issuance of common stock in offerings completed on August 26, 2020.

COVID-19 Impact on Operations. The Company has implemented business continuity plans to address the COVID-19 pandemic and minimize disruptions to ongoing operations. To date, despite the pandemic, we have been able to move forward with the operational steps required to execute our 2020 field trials in Canada and the United States. It is possible, however, that any potential future closures of our research facilities, should they continue for an extended time period, could adversely impact our anticipated time frames for evaluating and/or reporting data from our field trials and other work we have planned to accomplish during 2020 and beyond.

THIRD QUARTER 2020 FINANCIAL OVERVIEW

Cash Position

Yield10 Bioscience is managed with an emphasis on cash flow and deploys its financial resources in a disciplined manner to achieve its key strategic objectives.

Net cash used by operating activities during the third quarter of 2020 was $2.1 million compared to $1.4 million used in the third quarter of 2019. Yield10 ended the third quarter of 2020 with $11.8 million in unrestricted cash, cash equivalents and short-term investments. The Company continues to estimate total net cash usage during the full year 2020 within a range of $8.5 – $9.0 million.

The Company’s present capital resources are expected to fund its planned operations through the end of 2021. Yield10’s ability to continue operations after its current cash resources are exhausted depends on its ability to obtain additional financing, including public or private equity financing, secured or unsecured debt financing, and receipt of additional government research grants, as well as licensing or other collaborative arrangements.

Grant revenue for both the third quarter of 2020 and 2019 was $0.2 million, respectively. Research and development expenses were $1.3 million and $1.2 million for the third quarters of 2020 and 2019, respectively. General and administrative expenses increased to $1.1 million during the third quarter of 2020 from $1.0 million during the third quarter of 2019. The quarter-over-quarter increases in operating expense are primarily a result of the Company recording pro rata estimates for 2020 employee bonuses that are expected to be paid during the first quarter of 2021. In 2019, Yield10 did not accrue for bonuses until the fourth quarter.

Yield10 reported a loss from operations of $2.2 million for the quarter ended September 30, 2020 compared to a loss from operations of $2.0 million for the same quarter of 2019. The Company reported a total net loss after income tax expense of $2.2 million, or $0.87 per share for the three months ended September 30, 2020, in comparison to a total net loss after income taxes of $2.0 million, or $6.33 per share, for the three months ended September 30, 2019.

For the nine months ending September 30, 2020, the Company reported a net operating loss after taxes of $7.6 million, or $3.69 per share compared to a net operating loss after taxes of $6.1 million, or $20.64 per share for the nine months ending September 30, 2019. Year to date grant revenue earned through September 30, 2020 and September 30, 2019 was $0.6 million and $0.7 million, respectively. Research and development expenses were $3.9 million during the nine months ended September 30, 2020, compared to $3.6 million for the nine months ended September 30, 2019, and general and administrative expenses were $3.7 million and $3.2 million during the nine months ended September 30, 2020 and September 30, 2019, respectively. During the nine months ended September 30, 2020, the Company recognized $0.3 million in loan forgiveness income related to a Paycheck Protection Program Loan (“PPP Loan”) issued to the Company under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). Yield10 utilized the entire PPP Loan amount of $0.3 million for qualifying payroll and other expenses during the second quarter of 2020 and considers it reasonably certain that its application for loan forgiveness under the CARES Act will be approved.

Reverse Stock Split

Yield10 completed a 1-for-40 reverse stock split of its common stock on January 15, 2020, in order to regain compliance with the Nasdaq Stock Market minimum bid price qualification of $1.00 per share as required by Nasdaq Listing Rule 5550(a)(2). In accordance with applicable accounting guidance, all share amounts, per share data, share prices and conversion rates set forth in the Company’s condensed consolidated financial statements for the three and nine months ending September 30, 2020 and September 30, 2019, including those presented in this earnings release, have been retroactively adjusted to reflect the reverse stock split.

Conference Call Information

Yield10 Bioscience management will host a conference call at 4:30 p.m. (ET) today to discuss the third quarter 2020 results. The Company also will provide an update on the business and answer questions from the investor community. A live webcast of the call with slides can be accessed through the Company’s website at www.yield10bio.com in the investor relations events section. To participate in the call, dial toll-free 877-709-8150 or 201-689-8354 (international).

To listen to a telephonic replay of the conference call, dial toll-free 877-660-6853 or 201-612-7415 (international) and enter pass code 13711239. The replay will be available until November 26, 2020. In addition, the webcast will be archived on the Company’s website in the investor relations events section.

About Yield10 Bioscience

Yield10 Bioscience, Inc. is an agricultural bioscience company developing crop innovations to improve crop yields and enhance sustainable global food security. The Company utilizes its proprietary “GRAIN“ (Gene Ranking Artificial Intelligence Network) gene discovery platform to identify gene targets to improve yield performance and value in major commercial food and feed crops. Yield10 uses its Camelina oilseed platform to rapidly evaluate and field test new trait leads enabling the translation of promising new traits into the major commercial crops. As a path toward commercialization, Yield10 is pursuing a partnering approach with agricultural companies to drive new traits into development in crops such as canola, soybean and corn. The Company is also developing Camelina as a platform crop for producing nutritional oils and specialty products such as PHA biomaterials for use in water treatment and bioplastic applications. Yield10 is headquartered in Woburn, MA and has an Oilseeds Center of Excellence in Saskatoon, Canada.

For more information about the company, please visit www.yield10bio.com, or follow the Company on Twitter, Facebook and LinkedIn. (YTEN-E)

Safe Harbor for Forward-Looking Statements

This press release contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements in this release do not constitute guarantees of future performance. Investors are cautioned that statements in this press release which are not strictly historical statements, including, without limitation, expectations regarding Yield10’s cash position, cash forecasts and runway, ability to obtain sufficient financing to continue operating, expectations related to research and development activities, intellectual property, the expected regulatory path for traits, reproducibility of data from field tests, the timing of completion of additional greenhouse and field test studies, the timing for reporting data from the 2020 field tests and the outcomes of those tests, the signing of research licenses and collaborations, including whether the objectives of those collaborations will be met, whether the Company will be able to generate proof points for traits in development and advance business discussions around its Camelina business plan, the potential impact on operations of the COVID-19 pandemic, and value creation as well as the overall progress of Yield10 Bioscience, Inc., constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, including the risks and uncertainties detailed in Yield10 Bioscience’s filings with the Securities and Exchange Commission. Yield10 Bioscience assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

Contacts:

Yield10 Bioscience:
Lynne H. Brum, (617) 682-4693, [email protected]

Investor Relations:
Bret Shapiro, (561) 479-8566, [email protected]
Managing Director, CORE IR

Media Inquiries:
Eric Fischgrund, [email protected]
FischTank PR

(FINANCIAL TABLES FOLLOW)

YIELD10 BIOSCIENCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED

(In thousands, except share and per share amounts)

	Three Months Ended  September 30,								Nine Months Ended  September 30,
	2020				2019				2020				2019
Revenue:
Grant revenue	$	204			$	224			$	604			$	666
Total revenue		204				224				604				666
Expenses:
Research and development		1,300				1,232				3,939				3,646
General and administrative		1,098				990				3,664				3,201
Total expenses		2,398				2,222				7,603				6,847
Loss from operations		(2,194	)			(1,998	)			(6,999	)			(6,181	)
Other income (expense):
Change in fair value of warrants		—				—				(957	)			—
Loan forgiveness income		—				—				333				—
Other income (expense), net		37				16				85				68
Total other income (expense)		37				16				(539	)			68
Net loss before income tax expense		(2,157	)			(1,982	)			(7,538	)			(6,113	)
Income tax expense		(11	)			—				(26	)			—
Net loss	$	(2,168	)		$	(1,982	)		$	(7,564	)		$	(6,113	)
Basic and diluted net loss per share	$	(0.87	)		$	(6.33	)		$	(3.69	)		$	(20.64	)
Number of shares used in per share calculations:
Basic and diluted		2,492,274				312,952				2,050,726				296,139

YIELD10 BIOSCIENCE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED

(In thousands, except share and per share amounts)

	September 30,  2020				December 31,  2019
Assets
Current Assets:
Cash and cash equivalents	$	2,995			$	5,417
Short-term investments		8,794				5,700
Accounts receivable		148				72
Unbilled receivables		56				20
Prepaid expenses and other current assets		368				475
Total current assets		12,361				11,684
Restricted cash		254				332
Property and equipment, net		935				1,243
Right-of-use assets		2,796				3,141
Other assets		300				318
Total assets	$	16,646			$	16,718
Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Current Liabilities:
Accounts payable	$	103			$	279
Accrued expenses		930				1,326
Lease liabilities		443				602
Total current liabilities		1,476				2,207
Lease liabilities, net of current portion		3,283				3,619
Warrant liability		—				14,977
Other long-term liabilities		15				—
Total liabilities		4,774				20,803
Commitments and contingencies
Series B Convertible Preferred Stock ($0.01 par value per share); 0 and 5,750 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		—				—
Stockholders’ Equity (Deficit):
Series A Convertible Preferred Stock ($0.01 par value per share); 0 shares and 796 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		—				—
Common stock ($0.01 par value per share); 60,000,000 shares authorized at September 30, 2020 and December 31, 2019; 3,330,778 and 933,423 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		33				9
Additional paid-in capital		384,465				360,926
Accumulated other comprehensive loss		(168	)			(126	)
Accumulated deficit		(372,458	)			(364,894	)
Total stockholders’ equity (deficit)		11,872				(4,085	)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	16,646			$	16,718

YIELD10 BIOSCIENCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED

(In thousands)

	Nine Months Ended  September 30,
	2020				2019
Cash flows from operating activities
Net loss	$	(7,564	)		$	(6,113	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation		137				150
Change in fair value of warrants		957				—
Loss on disposal of fixed assets		206				—
Charge for 401(k) company common stock match		95				73
Stock-based compensation		506				406
Non-cash lease expense		345				456
Deferred income tax provision		33				—
Changes in operating assets and liabilities:
Accounts receivable		(76	)			23
Unbilled receivables		(36	)			(17	)
Prepaid expenses and other assets		92				217
Accounts payable		(228	)			(66	)
Accrued expenses		(324	)			48
Lease liabilities		(495	)			(622	)
Other liabilities		15				—
Net cash used for operating activities		(6,337	)			(5,445	)
Cash flows from investing activities
Purchase of property and equipment		(42	)			(12	)
Proceeds from sale of property and equipment		10				—
Purchase of short-term investments		(6,290	)			(1,000	)
Proceeds from the sale and maturity of short-term investments		3,197				3,746
Net cash (used for) provided by investing activities		(3,125	)			2,734
Cash flows from financing activities
Proceeds from warrants exercised		1,658				—
Proceeds from public and private offerings, net of issuance costs		5,367				2,583
Taxes paid on employees’ behalf related to vesting of stock awards		(17	)			(4	)
Net cash provided by financing activities		7,008				2,579
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(46	)			(14	)
Net decrease in cash, cash equivalents and restricted cash		(2,500	)			(146	)
Cash, cash equivalents and restricted cash at beginning of period		5,749				3,355
Cash, cash equivalents and restricted cash at end of period	$	3,249			$	3,209
Supplemental disclosure of non-cash information:
Offering costs remaining in accrued expenses	$	63			$	41

 

Guardion


A


lso


Provides Corporate Update

SAN DIEGO, Nov. 12, 2020 (GLOBE NEWSWIRE) — Guardion Health Sciences, Inc. (Nasdaq: GHSI) (“Guardion” or the “Company”), a specialty health sciences company that develops clinically supported nutrition, medical foods and medical devices, with a focus in the ocular health marketplace, announced financial results for the three months and nine months ended September 30, 2020, and is also providing a corporate update.

Financial and corporate highlights for the three months and nine months ended September 30, 2020 include the following:

• Total revenue was approximately $253,000 for the three months ended September 30, 2020, as compared to approximately $161,000 for the three months ended September 30, 2019, an increase of 57%.
• Medical foods sales are up 26% for the three months ended September 30, 2020, as compared to the three months ended September 30, 2019.
• Medical devices sales are up 147% for the three months ended September 30, 2020, as compared to the three months ended September 30, 2019.
• Net loss for the three months ended September 30, 2020 was approximately ($2,143,000) or ($0.02) per share, as compared to a net loss of approximately ($2,385,000) or ($0.07) per share for the three months ended September 30, 2019.
• Cash balance at September 30, 2020 was approximately $9,800,000.
• Ho Wah Genting Berhad (“HWGB”), the Company’s distributor in Malaysia, has received product registration approval from the Malaysian National Pharmaceutical Regulatory Agency (“NPRA”) for Astramern Nutra V, an immune support dietary supplement designed and produced by Guardion; approval for Astramern Nutra H, an herb formulation that HWGB intends to market together with Astramern Nutra V, continues to be pending with the Malaysian NPRA.
• Publication of promising new data in the journal Nutrients (published   October 26, 2020), which compared the efficacy of the Company’s Lumega-Z® to the current standard of care, the AREDS-2 soft gel supplement (marketed under the PreserVision® brand by Bausch + Lomb) in patients with vision problems associated with eye disease. Lumega-Z® demonstrated statistically significant vision improvements in both eyes at six months (p < 0.001), and a positive linear trend with treatment time (p < 0.001), with benefits visible after just three months; whereas the AREDS-2 supplement gel cap formulation provided no significant change (p > 0.05).
• Initiation of investigator-initiated clinical trials designed to evaluate the impact of Lumega-Z® on the restoration of the macular pigment and its relationship to the stabilization or recovery of vision in patients with eye disease. It is believed that depletion of the macular pigment at the back of the eye is a risk factor for vision problems related to age-related macular degeneration (“AMD”), glaucoma and other serious eye diseases.
• Guardion retained the investment banking firm Corporate Finance Associates (“CFA”) to act as its exclusive financial advisor to assist management and the Board of Directors in the identification and evaluation of strategic transactions to enhance shareholder value.
• At the Company’s Annual Meeting of Shareholders held on October 29, 2020, shareholders approved all four matters presented for approval.
• Trademark for “NutriGuard” issued on October 27, 2020 by the U.S. Patent and Trademark Office under Class 5 – nutritional dietary supplements.

David Evans, Ph.D., Guardion’s interim President and Chief Executive Officer, and Chief Science Officer, commented, “As we continue to develop our investment into clinical research to build strong differentiated brand claims, we are entering the commercial phase of our business development process. Despite a challenging environment with the COVID-19 pandemic, which has slowed our progress both in terms of connecting directly with doctors and consumers, as well as conducting day-to-day business, sales continue to be up year-over-year. Over the course of this pandemic, it has become increasingly clear that there are multiple business opportunities for Guardion to explore, including enhancing our digital distribution channels and e-commerce platform and expanding our international distribution opportunities. In addition, we are working closely with CFA to identify and evaluate strategic transactions and opportunities to enhance shareholder value.”

Dr. Evans concluded, “We continue to receive third party validation of our products, including recently published studies, in the journal Nutrients, showing superior efficacy of our proprietary formulation, Lumega-Z®, in terms of both absorption level and improvement in visual function, versus PreserVision®, the industry leading AREDS-2 gel cap product formulation. These results clearly support our brand messaging and offer an evidenced-based foundation to support our evolving product development strategies. We will continue our commitment to scientific and clinical validation of our proprietary products and to report on our results to our shareholders as this information occurs.”

Results of Annual Meeting of Shareholders
and Nasdaq Delisting Issue

On October 29, 2020, the Company held its annual meeting of shareholders (the “Meeting”). At the Meeting, the Company’s shareholders approved all four proposals, including extending the discretionary authority previously granted to the Board of Directors to effect a “reverse stock split,” at a specific ratio within a range of no split and one-for-thirty (1-for-30), with the exact ratio to be determined by the Board of Directors in its sole discretion on or before October 29, 2021.

Since the Company does not intend to execute a reverse stock split prior to November 30, 2020, Guardion expects to receive a notice of delisting from The Nasdaq Capital Market (“Nasdaq”) shortly after November 30, 2020 because the trading price of the Company’s common stock does not meet the $1.00 per share minimum bid price requirement.

The Company intends to appeal any notice of delisting that Nasdaq issues after November 30, 2020 to request a further extension of time (not to exceed 180 days from the date of the notice of delisting) to regain compliance with the $1.00 minimum bid price requirement. Such temporary relief would allow the Company additional time to execute on its business initiatives to generate greater shareholder value, which the Company hopes would then be reflected by an increase in the price of the Company’s common stock. During the appeal process, the Company’s common stock will continue to be listed on Nasdaq.

A permanent delisting from Nasdaq could adversely impact the liquidity of the Company’s common stock and limit the ability of the Company to raise additional capital in the future.

Financial Results

Three Months Ended September 30, 2020

Total revenue for the three months ended September 30, 2020 increased by approximately 57% to approximately $253,000, as compared total revenue for the three months ended September 30, 2019 of approximately $161,000, primarily due to increased sales of medical foods and nutraceuticals and medical devices in the current period.

Operating expenses for the three months ended September 30, 2020 decreased by approximately 8% to approximately $2,291,000 as compared to operating expenses for the three months ended September 30, 2019 of approximately $2,503,000, primarily due to a decrease in selling and marketing expenses in the current period.

Operating loss for the three months ended September 30, 2020 decreased by approximately $260,000 to approximately ($2,152,000), as compared to the operating loss for the three months ended September 30, 2019 of approximately ($2,412,000). Net loss for the three months ended September 30, 2020 was approximately ($2,143,000), or ($0.02) per share, as compared to a net loss of approximately ($2,385,000), or ($0.07) per share, for the three months ended September 30, 2019.

Nine Months Ended September 30, 2020

Total revenue for the nine months ended September 30, 2020 increased by approximately 154% to approximately $1,690,000, as compared to total revenue for the nine months ended September 30, 2019 of approximately $665,000. This increase was primarily due to a large initial test order of a nutraceutical product placed by the Company’s Malaysian distributor of $890,000 that was recorded during the three months ended June 30, 2020 and increased sales of medical food product lines, partially offset by a decrease in medical device sales which were affected by the impact of COVID-19 closures during the nine months ended September 30, 2020.

Operating expenses for the nine months ended September 30, 2020 decreased by approximately 12% to approximately $6,018,000, as compared to operating expenses for the nine months ended September 30, 2019 of approximately $6,813,000, primarily due to a reduction of approximately $965,000 in stock-based compensation cost related to a reversal of stock-based compensation as a result of the resignation of the Company’s former President and Chief Executive Officer in June 2020.

Operating loss for the nine months ended September 30, 2020 decreased by approximately $1,214,000 to approximately ($5,196,000), as compared to the operating loss for the nine months ended September 30, 2019 of approximately ($6,410,000). Net loss for the nine months ended September 30, 2020 was approximately ($5,198,000), or ($0.06) per share, as compared to a net loss of approximately ($6,823,000), or ($0.26) per share, for the nine months ended September 30, 2019.

About
Guardion
Health Sciences

Guardion is a specialty health sciences company that develops clinically supported nutrition, medical foods and medical devices, with a focus in the ocular health marketplace. Located in San Diego, California, the Company combines targeted nutrition with innovative, evidence-based diagnostic technology. Guardion boasts impressive Scientific and Medical Advisory Boards. Information and risk factors with respect to Guardion and its business, including its ability to successfully develop and commercialize its proprietary products and technologies, may be obtained in the Company’s filings with the U. S. Securities and Exchange Commission (the “SEC”) at www.sec.gov.

Forward-Looking Statement Disclaimer

With the exception of the historical information contained in this news release, the matters described herein may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward- looking in nature and not historical facts, although not all forward-looking statements include the foregoing. These statements involve unknown risks and uncertainties that may individually or materially impact the matters discussed herein for a variety of reasons that are outside the control of the Company, including, but not limited to, the Company’s ability to raise sufficient financing to implement its business plan, the impact of the COVID-19 pandemic on the Company’s business, operations and the economy in general, and the Company’s ability to successfully develop and commercialize its proprietary products and technologies. Readers are cautioned not to place undue reliance on these forward- looking statements, as actual results could differ materially from those described in the forward-looking statements contained herein. Readers are urged to read the risk factors set forth in the Company’s filings with the SEC, which are available at the SEC’s website (www.sec.gov).
The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Relations Contact:
CORE IR
Scott Arnold
516-222-2560
[email protected] 

Media Relations Contact:
Jules Abraham
Director of Public Relations
CORE IR
917-885-7378
[email protected] 

Guardion Health Sciences, Inc.
Condensed Consolidated Balance Sheets
	September 30, 2020				December 31, 2019
	(Unaudited)
Assets
Current assets
Cash	$	9,795,441			$	11,115,502
Accounts receivable		22,849				78,337
Inventories, net		1,284,173				310,941
Prepaid expenses		231,621				362,938
Total current assets		11,334,084				11,867,718
Deposits		11,751				11,751
Property and equipment, net		305,600				374,638
Right-of-use asset, net		457,677				572,714
Intangible assets		50,000				50,000
Total assets	$	12,159,11 2			$	12,876,821
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	576,890			$	70,291
Accrued expenses		182,597				175,052
Due to former officer		230,208				–
Derivative warrant liability		7,519				13,323
Lease liability – current		159,962				151,568
Total current liabilities		1,157,176				410,234
Lease liability – long-term		313,909				434,747
Total liabilities		1,471,085				844,981
Commitments and contingencies
Stockholders’ Equity
Preferred stock, $0.001 par value; 10,000,000 shares authorized, no shares issued and outstanding		–				–
Common stock, $0.001 par value; 250,000,000 shares authorized; 88,327,312 and 74,982,562 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		88,327				74,983
Additional paid-in capital		61,308,938				57,468,528
Accumulated deficit		(50,709,238	)			(45,511,671	)
Total stockholders’ equity		10,688,02 7				12,031,840
Total liabilities and stockholders’ equity	$	12,159,11 2			$	12,876,821

Guardion Health Sciences, Inc.
Condensed Consolidated Statements of Operations
	Three Months Ended September 30,								Nine Months Ended September 30,
	2020				2019				2020				2019
	(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Revenue
Medical foods and nutraceuticals	$	142,556			$	112,957			$	1,446,584			$	317,338
Medical devices		110,632				44,705				237,136				337,531
Other		–				3,500				6,100				9,800
Total revenue		253,188				161,162				1,689,820				664,669
Cost of goods sold
Medical foods and nutraceuticals		68,956				41,655				764,245				120,608
Medical devices		45,157				27,922				101,077				136,958
Other		–				1,422				2,478				3,981
Total cost of goods sold		114,113				70,999				867,800				261,547
Gross profit		139,075				90,163				822,020				403,122
Operating expenses
Research and development		34,034				31,897				109,803				138,613
Sales and marketing		167,213				448,387				1,175,126				1,246,846
General and administrative		2,070,998				2,022,367				5,299,696				5,427,573
Costs related to resignation of former officer (including the reversal of previously recognized stock compensation expense of $965,295 during the nine months ended September 30, 2020)		–				–				(615,936	)			–
Loss on sale of equipment		18,500				–				18,500				–
Impairment loss on equipment		–				–				30,948				–
Total operating expenses		2,290,745				2,502,651				6,018,137				6,813,032
Loss from operations		(2,151,670	)			(2,412,488	)			(5,196,117	)			(6,409,910	)
Other (income) expense:
Interest expense		3,716				4,205				7,254				255,842
Finance cost upon issuance of warrants		–				–				–				415,955
Change in fair value of derivative warrants		(11,892	)			(31,322	)			(5,804	)			(259,154	)
Total other (income) expense		8,176				(27,117)				1,450				412,643
Net loss	$	(2,143,494	)		$	(2,385,371	)		$	(5,197,567	)		$	(6,822,553	)
Net loss per common share – basic and diluted	$	(0.02	)		$	(0.07	)		$	(0.06	)		$	(0.26	)
Weighted average common shares outstanding – basic and diluted		88,320,523				36,035,309				84,530,367				26,483,713

Guardion Health Sciences, Inc.
Operations by Segment (Unaudited)
	For the Three Months Ended September 30, 2020
	Corporate				Medical Foods and Nutraceuticals				Medical Devices			Total
Revenue	$	–			$	142,556			$	110,632		$	253,188
Cost of goods sold		–				68,956				45,157			114,113
Gross profit		–				73,600				65,475			139,075
Operating expenses		1,202,402				1,081,897				6,446			2,290,745
(Loss) income from operations	$	(1,202,402	)		$	(1,008,296	)		$	59,028		$	(2,151,670	)

	For the Nine Months Ended September 30, 2020
	Corporate				Medical Foods and Nutraceuticals				Medical Devices				Total
Revenue	$	6,100			$	1,446,584			$	237,136			$	1,689,820
Cost of goods sold		2,477				764,246				101,077				867,800
Gross profit		3,623				682,338				136,059				822,020
Operating expenses		2,655,107				3,146,514				216,516				6,018,137
Loss from operations	$	(2,651,484	)		$	(2,464,176	)		$	(80,457	)		$	(5,196,117	)

 

DENVER, Nov. 12, 2020 (GLOBE NEWSWIRE) — NewAge, Inc. (Nasdaq: NBEV), the Colorado-based social selling and distribution company, today announced that it will present and meet with investors at the Virtual Fall Investor Summit. The conference is being held November 16-18, 2020, virtually.

The Company is scheduled to present on Tuesday, November 17, 2020 at 7:30 a.m. MT/9:30 a.m. ET. A webcast of the live presentation will be available on the Investors section of the Company’s website at www.newage.com or at https://www.webcaster4.com/Webcast/Page/2038/38387. The webcast will be archived for approximately 30 days.

The presentation to be referenced at the conference will also be available on the Investors section of the Company’s website at www.newage.com.

About


NewAge, Inc.


(NASDAQ:


NBEV


)


NewAge is a Colorado-based organic and healthy products company dedicated to inspiring and educating consumers to “Live Healthy.” The Company is an omni-channel distribution company with access to traditional retail, e-commerce, direct-to-consumer, and medical channels across more than 75 countries worldwide when combined with ARIIX. NewAge markets a portfolio of differentiated healthy functional brands in three category platforms including Health & Wellness, Healthy Appearance, and Nutritional Performance. The Company operates the websites newage.com, noninewage.com, and a number of other individual brand websites.

NewAge has announced a transaction with ARIIX LLC. Once the ARIIX transaction is completed, we will be the only omni-channel company with access to traditional retail, e-commerce, direct-to-consumer, and other channels across more than 75 countries worldwide, with a network of over 400,000 exclusive independent product consultants, representatives, and affiliates around the globe. After the transaction closes, NewAge will market a portfolio of better-for-you products along with the companies, ARIIX, ZENNOA, Shannen, MaVie, and Limu in healthy hydration and wellness, healthy appearance, and nutritional performance platforms. The Company announced NewAge’s entry into a definitive agreement to acquire ARIIX and four other e-commerce/direct selling companies on July 20, 2020. The Company entered into an amended and restated definitive agreement on September 30, 2020. This transaction is anticipated to close by the end of November 2020.

For investor inquiries about NewAge please contact:

NewAge Investor Relations:

Riley Timmer
Vice President, Investor Relations
Tel: 1-801-870-8685
[email protected]

Investor Relations Counsel:

John Mills/Scott Van Winkle
ICR – Strategic Communications and Advisory
Tel: 1-646-277-1254/1-617-956-6736
[email protected]

NewAge, Inc.
:

Gregory A. Gould
Chief Financial Officer
Tel: 1-303-566-3030
[email protected]

COS COB, Conn., Nov. 12, 2020 (GLOBE NEWSWIRE) — Chicken Soup for the Soul Entertainment Inc. (Nasdaq: CSSE), one of the largest operators of streaming advertising-supported video-on-demand (AVOD) networks, today announced the 30-day extension of a key deadline related to Sony Pictures Television’s (SPT) Crackle Plus ownership option.

Pursuant to the Crackle acquisition agreement in May of 2019, Sony Pictures Television was required to decide by November 14, 2020 whether to convert its current ownership of Chicken Soup for the Soul Entertainment’s Crackle Plus subsidiary into 49% of the common ownership of Crackle Plus or into $40 million of Chicken Soup for the Soul Entertainment’s preferred shares. SPT and the company have mutually agreed to an extension to consider these options and potential alternatives, and SPT will now be required to make a decision by December 14, 2020.

“We have always seen a path to an expanded relationship with Sony and we are looking forward to taking this additional time to evaluate opportunities to strengthen our partnership,” said William J. Rouhana Jr, Chairman & CEO of Chicken Soup for the Soul Entertainment.

ABOUT CHICKEN SOUP FOR THE SOUL ENTERTAINMENT
Chicken Soup for the Soul Entertainment, Inc. (Nasdaq: CSSE) operates streaming video-on-demand networks (VOD). The company owns a majority stake in Crackle Plus, a company formed with Sony Pictures Television, which owns and operates a variety of ad-supported and subscription-based VOD networks including Crackle, Popcornflix, Popcornflix Kids, Truli, Pivotshare, Españolflix and FrightPix. The company also acquires and distributes video content through its Screen Media subsidiary and produces original long and short-form content through Landmark Studio Group, its Chicken Soup for the Soul Originals division and APlus.com. Chicken Soup for the Soul Entertainment is a subsidiary of Chicken Soup for the Soul, LLC, which publishes the famous book series and produces super-premium pet food under the Chicken Soup for the Soul brand name.

FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements that involve risks and uncertainties. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to risks (including those set forth in the Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 30, 2020) and uncertainties which could cause actual results to differ from the forward-looking statements. The company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Investors should realize that if our underlying assumptions for the projections contained herein prove inaccurate or that known or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections.

INVESTOR RELATIONS

Taylor Krafchik
Ellipsis
[email protected]
(646) 776-0886

MEDIA CONTACT

Kate Barrette
RooneyPartners LLC
[email protected]
(212) 223-0561

DetermaRx
™
receives final CMS pricing and
records
first
full
quarter
with Medicare
revenues
;
more than doubles second quarter volumes
with
adoption at NCCN and NCI designated cancer centers

DetermaIO
™
selected
for use in
checkpoint inhibitor clinical trial
;
will
generat
e
near term pharmaceutical services revenue
and solidifies use in
triple negative breast cancer
research

TheraSure

^TM

-CNI MONITOR l
icensing and
collaboration agreement
with Chronix
will add
a fourth engine
of
potential
revenue growth
in blood
–
based therapy monitoring
and
provide
access to
EU
lab network
for
DetermaRx

Conference
C
all
T
oday,
November 12
,
at
4
:30
P
M
E
D
T

IRVINE, Calif., Nov. 12, 2020 (GLOBE NEWSWIRE) — Oncocyte Corporation (NYSE American: OCX), a molecular diagnostics company with a mission to provide actionable answers at critical decision points across the cancer care continuum, today reported financial results for the third quarter and nine months ended September 30, 2020, and provided a corporate update.

“I am very proud of our progress over the past year as we have established four growth engines to drive revenue that will help us reduce our cash burn as we progress in our vision to become a leader in molecular diagnostics for oncology and immunotherapy,” said Ron Andrews, Chief Executive Officer of Oncocyte. “This has been a quarter of growth and milestone achievements, solidifying our position as an innovator in the advancement of molecular diagnostics for early stage lung cancer. We have successfully repositioned the company over the past year by refining and expanding our suite of offerings and establishing multiple independent revenue growth engines: DetermaRx™, DetermaIO™, immunotherapy response monitoring, and Pharma Services, all with the potential to support our long-term growth and value creation. DetermaRx and pharma services are already generating revenue, and with our first agreement to utilize DetermaIO as a predictive biomarker in a clinical trial, DetermaIO is poised to become revenue generating before year end. The third quarter was a terrific period for DetermaRx as we received our final pricing from CMS, allowing us to bill and collect our first Medicare revenues. We continue to build upon our strong scientific foundation with collaborators publishing prospective data that further demonstrate that treatment decisions informed by DetermaRx significantly improve lung cancer patient survival. DetermaRx’s adoption at leading cancer centers and its rapid growth, with test volume more than doubling from the second quarter, reflects stakeholders’ recognition of the test’s significant clinical utility.”

Mr. Andrews added, “We also continue to expand our reach in the large and rapidly growing immunotherapy space with our second growth engine, DetermaIO™, our gene expression test currently available for research use only, which identifies patients most likely to respond to therapy. Our recent presentation at the Society for Immunotherapy of Cancer Annual Meeting demonstrates the power of DetermaIO to identify patients who are not likely to respond to checkpoint inhibitors and may require alternative or combinatorial therapy, which significantly expands the utility of the DetermaIO test. We believe that DetermaIO’s inclusion as a predictive biomarker in an international investigator-sponsored triple negative breast cancer clinical trial has increased our visibility among academic and pharma trial groups over the last few months, and we remain on pace to achieve our goal of a U.S. clinical launch in the second half of 2021. In addition, studies such as this generate immediate revenue through our Pharma Services business which will continue to grow as we secure additional contracts with pharmaceutical and molecular diagnostic platform companies. Our newly announced immunotherapy response monitoring opportunity, anticipated to be available in our Pharma Services arsenal in the first half of 2021, launches Oncocyte’s differentiated and comprehensive offering for immune therapy diagnostics. Finally, we have solid momentum in our Pharma Services business and expect to exit 2020 ahead of our $2 million of committed projects goal for the year and expect the business to generate positive operating margin in 2021. Overall, we are on track across all our major milestones despite the continued headwind of the ongoing pandemic which is a testimony to the dedication of the Oncocyte team.”  

Recent
Corporate
Highlights

DetermaRx

• Medicare coverage policy established for DetermaRx, a new class of predictive tests, based on compelling clinical evidence that positions DetermaRx as the first and only test of its kind for early-stage non-small cell lung cancer (NSCLC)
• Received final pricing decision from Centers for Medicare and Medicaid Services (CMS) with pricing in line with comparable high-value molecular tests for oncology indications
• Continued rapid commercial growth and adoption through Q3:
  —  Testing volume more than doubled, from 64 billable samples in Q2, to 175 in Q3
  —  Maintained physician re-order rate of approximately 60 percent
  —  Increased onboarded hospitals from 36 in Q2 to 67 in Q3, including prestigious National Comprehensive Cancer Network (NCCN) and National Cancer Institute (NCI) designated cancer centers
  —  Increased adoption at major healthcare systems including HCA Healthcare, Cancer Treatment Centers of America (CTCA), Florida Cancer Specialists (FCS), Scripps Health, and Providence Cancer Institute
  —  Test added to “standard of care menu” at an NCI cancer center and at FCS
• International expansion continued with Mexico, Columbia, Brazil, and Germany being added to our current network of distribution and commercial partners in Israel, India, the Middle East and Africa
• Presented new prospective survival data at the IASLC 2020 North America Conference on Lung Cancer demonstrating DetermaRx informed treatment significantly improves lung cancer patient survival
• Presented data demonstrating that combining DetermaRx with EGFR mutation status may help inform optimal treatment strategies for NSCLC patients who are EGFR-mutation-positive.   Oncocyte is now offering EGFR mutation testing and DetermaRx from a single patient sample to provide an integrated solution for patients and physicians
• Continued successful physician engagement with our webinar series with over 250 healthcare professional participants in online physician education programs in Q3 featuring renowned lung cancer experts Dr. David Gandara, Dr. Johannes Kratz, and Dr. Gavitt Woodard

DetermaIO

• DetermaIO selected as a predictive biomarker in the NeoTRIPaPDL1 international investigator-sponsored trial for an immune-checkpoint inhibitor (ICI)
  —  Trial will evaluate DetermaIO as biomarker for a neoadjuvant (pre-surgical) ICI indication in patients with triple negative breast cancer (TNBC)
  —  Collaboration expected to generate near-term pharma services revenue, with a path to U.S. clinical launch in 2021

TheraSure™
-CNI MONITOR
Blood
–
based
Imm
une Therapy
monitoring
test

• Announced agreement to license TheraSure^TM-CNI MONITOR clinical assay from Chronix Biomedical. The blood-based assay uses copy number instability (CNI) to monitor patients’ response to immunotherapy treatments, potentially across a range of cancers  
• License agreement will expand Oncocyte’s suite of immunotherapy products to include response monitoring. Coordinating response monitoring with DetermaIO’s response prediction capability could create the first integrated solution for immunotherapy treatment selection and monitoring. Tech transfer to begin in Q1 2021  

Pharma Services

• Announced strategic alliance with the Guardian Research Network® (GRN) to establish an integrated platform for precision medicine clinical trials, combining Oncocyte’s proprietary molecular tests and fully certified pharma services lab with GRN’s nationwide consortium of 150 hospitals, clinical trial networks and real-world evidence data technology
  —  Initial immune-oncology focus will leverage Oncocyte’s DetermaIO test for patient selection in immunotherapy clinical trials across the network
• Continued growth of pharma services offering with a full suite of molecular analyses including tissue and blood-based technologies, proprietary platforms such as DetermaIO and TNBCType Assay, as well as custom next-generation sequencing and PCR services including whole exome sequencing, RNA-seq and targeted mutation panels

Corporate

• Appointed Jennifer Carter, M.D., MPH, MBA, to Board of Directors, bringing deep expertise and experience in precision oncology to the Board   

Third Quarter 2020
Financial Highlights

At September 30, 2020, Oncocyte had cash, cash equivalents and marketable securities of $10.7 million.

Prior to January 1, 2020, Oncocyte had no revenues. Oncocyte currently derives its revenues from pharma services generated by its wholly owned subsidiary, Insight Genetics, which was acquired on January 31, 2020, and from the sale of its lung cancer test, DetermaRx, which was commercially launched in early 2020. In light of the recent CMS and Noridian final pricing decision for the DetermaRx test, which became effective in September, Oncocyte is able to recognize revenues for Medicare covered tests on an accrual basis, rather than on a cash basis, when the tests are performed.

Under U.S. accounting principles, for all payers other than Medicare, Oncocyte will be able to recognize revenues for DetermaRx on an accrual basis of accounting once it has contracts for reimbursement from third-party payers or a history of experience of cash collections for the tests performed, or both. Until that time, for all payers other than Medicare, Oncocyte expects to recognize revenue for DetermaRx tests performed on a cash basis. Accordingly, Oncocyte will incur and accrue cost of revenues and other operating expenses related to its pharma services and diagnostic tests, including DetermaRx.

Beginning on January 31, 2020, Oncocyte’s consolidated financial statements and results also include the results from its wholly owned subsidiary, Insight Genetics, which Oncocyte acquired on that date.

For the third quarter ended September 30, 2020, Oncocyte reported a net loss of $6.8 million, or ($0.10) per share, as compared to $5.2 million, or ($0.10) per share, for the third quarter ended September 30, 2019.

Operating losses, as reported, for the third quarter of 2020 were $6.2 million, an increase of $0.9 million from $5.3 million as compared to the third quarter of 2019; and operating losses, on an adjusted basis, were $6.1 million, an increase of $2.0 million from $4.1 million as compared to the third quarter of 2019.

Oncocyte has provided a reconciliation between GAAP and non-GAAP operating losses in the financial tables, included with this earnings release, which it believes is helpful in understanding its ongoing operations.

Revenues for the three and nine months ended September 30, 2020 were $0.6 million and $0.7 million respectively, generated from pharma services and DetermaRx tests that are covered by Medicare on an accrual basis since Oncocyte received a final pricing from CMS in September.

Cost of revenues for the three and nine months ended September 30, 2020 were $0.6 million and $1.1 million, respectively, incurred from performing the DetermaRx tests and pharma services.

Research and development expenses for third quarter of 2020 were $2.6 million as compared to $1.6 million for the same period in 2019, an increase of $1.0 million primarily attributable to personnel and related expenses, including a noncash stock-based compensation expense increase of $0.3 million. Personnel and related expenses for the current quarter also include a $0.4 million severance charge and $0.2 million in accelerated stock-based compensation expense recorded as part of the partial reduction in force plan and salary reduction agreements instituted in September 2020.

General and administrative expenses for the third quarter of 2020 were $5.0 million, as compared to $3.0 million for the same period in 2019, an increase of $2.0 million primarily attributable to personnel and related expenses, including a noncash stock-based compensation expense. Personnel and related expenses for the current quarter also include a $0.9 million severance charge and $0.5 million in accelerated stock-based compensation expense recorded as part of the partial reduction in force plan and salary reduction agreements instituted in September 2020.

Sales and marketing expenses for the three months ended September 30, 2020, were $1.6 million, as compared to $0.6 million for the same period in 2019, an increase of approximately $1.0 million. The increase was primarily due to personnel and related expenses for ramp up in sales and marketing activities for the commercialization effort of DetermaRx.

Change in fair value of contingent consideration liability – The change in fair value of contingent consideration is based on Oncocyte’s reassessment of the key assumptions underlying the determination of this liability as changes in circumstances and conditions occur from the Insight acquisition date to the reporting period being presented, with the subsequent change in fair value recorded as part of Oncocyte’s consolidated loss from operations for that period. Accordingly, for the three and nine months ended September 30, 2020, Oncocyte recorded an unrealized gain of approximately $3.0 million related to the decrease in the fair value of contingent consideration liability primarily attributable to a revised estimate of the timing of the possible future payouts.

Cash used in operations was $6.0 million for the third quarter of 2020, which included about $0.9 million in transactional and other business development related expenses.

Conference Call

The Company will host a conference call today, November 12, 2020, at 4:30 pm EDT / 1:30 pm PDT to discuss the results along with recent corporate developments.

The dial-in number in the U.S./Canada is 877-407-9716; for international participants, the number is 201-493-6779. For all callers, please refer to Conference ID 13709425, To access the live webcast, go to the investor relations section on the Company’s website, or by clicking here: http://public.viavid.com/index.php?id=141419.  The webcast replay will be available on the Oncocyte website for 90 days following the completion of the call.

About Onco
c
yte Corporation

Oncocyte is a molecular diagnostics company whose mission is to provide actionable answers at critical decision points across the cancer care continuum, with the goal of improving patient outcomes by accelerating and optimizing diagnosis and treatment. The Company recently launched DetermaRx™, a treatment stratification test that enables the identification of early-stage lung cancer patients at high risk for recurrence post-resection, allowing them to be treated when their cancer may be more responsive to adjuvant chemotherapy. Oncocyte is also developing DetermaIO™, a gene expression test that identifies patients more likely to respond to checkpoint immunotherapies.

DetermaRx and DetermaIO are trademarks of Oncocyte Corporation. TheraSure is a trademark of Chronix Biomedical, Inc.

Oncocyte Forward Looking Statements

Oncocyte cautions you that this press release contains forward-looking statements. Any statements that are not historical fact (including, but not limited to statements that contain words such as “will,” “believes,” “plans,” “anticipates,” “expects,” “estimates,” “may,” and similar expressions) are forward-looking statements. These statements include those pertaining to the commercial launch of DetermaRx, development of DetermaIO, unexpected expenditures or assumed liabilities or other unanticipated difficulties resulting from acquisitions, implementation and results of research, development, clinical trials and studies, commercialization plans, future financial and/or operating results, and future opportunities for Oncocyte, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management. Forward-looking statements involve risks and uncertainties, including, without limitation, the potential impact of COVID-19 on our financial and operational results, risks inherent in the development and/or commercialization of potential diagnostic tests or products, uncertainty in the results of clinical trials or regulatory approvals, the capacity of our third-party supplied blood sample analytic system to provide consistent and precise analytic results on a commercial scale, potential interruptions to our supply chain, the need and ability to obtain future capital, maintenance of intellectual property rights, and the need to obtain third party reimbursement for patients’ use of any diagnostic tests we commercialize, and risks inherent in acquisitions such as failure to realize anticipated benefits, unexpected expenditures or assumed liabilities, unanticipated difficulties in conforming business practices including accounting policies, procedures and internal controls, greater than estimated allocations of resources to develop and commercialize technologies, or failure to maintain any laboratory accreditation or certification. Actual results may differ materially from the results anticipated in these forward-looking statements and accordingly such statements should be evaluated together with the many uncertainties that affect the business of Oncocyte, particularly those mentioned in the “Risk Factors” and other cautionary statements found in Oncocyte’s Securities and Exchange Commission filings, which are available from the SEC’s website. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they were made. Oncocyte undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.

Investor Contact

Bob Yedid
LifeSci Advisors, LLC
646-597-6989
[email protected]

Media Contact

Cait Williamson, Ph.D.
LifeSci Communications, LLC
646-751-4366
[email protected]

 

ONCOCYTE COPORATION
CONSOLIDATED BALANCE SHEETS
($ in thousands)
		September 30,			December 31,
		2020			2019
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		10,292			22,072
Accounts receivable		366			–
Marketable equity securities		361			379
Prepaid expenses and other current assets		953			505
Total current assets		11,972			22,956
CURRENT ASSETS
Right-of use-assets, machinery and equipment, net and construction in progress		5,657			3,728
Equity method investment in Razor		13,852			10,964
Goodwill		9,187			–
Intangibles, net		15,031			–
Deposits and other non current assets		2,077			2,211
TOTAL ASSETS		57,776			39,859
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Amount due to Lineage and affiliates		–			6
Accounts payable		1,264			469
Accrued expenses and other current liabilities		5,115			2,610
Loan payable, current		2,061			1,125
Right-of-use and financing lease liabilities, current		456			230
Total current liabilities		8,896			4,440
NONCURRENT LIABILITIES
Right-of-use and financing lease liabilities, noncurrent		3,868			2,676
Loan payable, net of deferred financing costs, noncurrent		2,065			1,905
Contingent consideration liabilities		8,150			–
Other noncurrent liabilities		158			–
TOTAL LIABILITIES		23,137			9,021
SHAREHOLDERS’ EQUITY
Preferred stock, no par value, 5,000 shares authorized; none issued and outstanding		–			–
Common stock, no par value, 150,000 shares authorized; 67,251 and 57,032 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		152,007			124,583
Accumulated other comprehensive loss		–			–
Accumulated deficit		(117,368	)		(93,745	)
Total shareholders’ equity		34,639			30,838
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		57,776			39,859

ONCOCYTE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2020				2019				2020				2019
		unaudited				unaudited				unaudited				unaudited
REVENUE
Total revenue		$	555			$	–			$	713			$	–
TOTAL COSTS AND OPERATING EXPENSES
Cost of revenue		$	601			$	–			$	1139			$	–
Research and development			2,615				1,625				8,000				4,476
General and administrative			4,995				3,002				13,378				9,087
Sales and marketing			1,568				630				4,620				1,153
Change in fair value of contingent consideration			(2,980	)			–				(2,980	)			–
Total operating expenses			6,799				5,257				24,157				14,716
Loss from operations			(6,244	)			(5,257	)			(23,444	)			(14,716	)
OTHER INCOME (EXPENSES), NET
Interest income (expense), net			(78	)			135				(175	)			282
Unrealized gain (loss) on marketable equity securities			20				(103	)			(18	)			(13	)
Pro rata loss from equity method investment in Razor			(482	)			–				(1,112	)			–
Other income (expense), net			1				–				31				(25	)
Total other income (expenses), net			(539	)			32				(1,274	)			244
LOSS BEFORE INCOME TAXES			(6,783	)			(5,225	)			(24,718	)			(14,472	)
Income tax benefit			–				–				1,095				–
NET LOSS		$	(6,783	)		$	(5,225	)		$	(23,623	)		$	(14,472	)
Net loss per share; basic and diluted		$	(0.10	)		$	(0.10	)		$	(0.36	)		$	(0.29	)
Weighted average shares outstanding; basic and diluted			67,247				51,973				64,843				50,217

ONCOCYTE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
	Nine Months Ended
	September 30,
	2020				2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(23,623	)		$	(14,472	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		529				278
Amortization of intangible assets		59				–
Amortization of right-of-use assets and liabilities		959				–
Impairment charge for long-lived assets		88				–
Pro rata loss from equity method investment in Razor		1,112				–
Amortization of prepaid maintenance		52				28
Stock-based compensation		4,081				2,209
Unrealized loss on marketable equity securities		18				13
Amortization of debt issuance costs		80				30
Warrants issued for advisory services		–				234
Change in fair value of contingent consideration		(2,980	)			–
Deferred income tax benefit		(1,095	)			–
Other		–				25
Changes in operating assets and liabilities:
Accounts receivable		(372	)			–
Amount due to Lineage and affiliates		(6	)			(2,100	)
Prepaid expenses and other assets		(575	)			(238	)
Accounts payable and accrued liabilities		1,843				(416	)
Net cash used in operating activities		(19,830	)			(14,409	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Insight Genetics, net of cash acquired		(6,189	)			–
Equity method investment in Razor		(4,000	)			(11,245	)
Purchase of equipment		(1,061	)			(18	)
Security deposit and other		(6	)			64
Net cash used in investing activities		(11,256	)			(11,199	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options		72				943
Proceeds from sale of common shares		18,343				40,250
Financing costs to issue common shares		(58	)			(3,252	)
Common shares received and retired for employee taxes paid		(14	)			–
Repayment of loan payable		(125	)			(600	)
Repayment of financing lease obligations		(53	)			(323	)
Proceeds from PPP loan		1,141				–
Net cash provided by financing activities		19,306				37,018
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(11,780	)			11,410
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
At beginning of the period		23,772				8,034
At end of the period	$	11,992			$	19,444

Non-GAAP Financial Measures
This earnings release includes loss from operations prepared in accordance with accounting principles generally accepted in the United States (GAAP) and includes certain historical non-GAAP adjustments to operating expenses. In particular, Oncocyte has provided non-GAAP total loss from operations, adjusted to exclude noncash stock-based compensation, depreciation and amortization expenses, an impairment charge for certain long-lived assets, an unrealized gain for change in fair value of contingent consideration and a severance charge. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable financial measures prepared in accordance with GAAP. However, Oncocyte believes the presentation of non-GAAP total loss from operations, when viewed in conjunction with our GAAP total loss from operations, is helpful in understanding Oncocyte’s ongoing operations and its programs.
Furthermore, management uses these non-GAAP financial measures in the aggregate to establish budgets and operational goals, to manage Oncocyte’s business and to evaluate its performance and its programs.
Oncocyte Corporation
Reconciliation of Non-GAAP Financial Measure
Adjusted Loss from Operations
	Amounts In Thousands							Amounts In Thousands
	For the Three Months Ended							For the Nine Months Ended
	September 30,							September 30,
	2020			2019				2020				2019
	(unaudited)			(unaudited)				(unaudited)				(unaudited)
GAAP loss from operations – as reported	$	(6,244	)	$	(5,257	)	$		(23,444	)	$		(14,716	)
Stock-based compensation expense		1,784			821				4,081				2,209
Impairment charge for long-lived assets		–			–				422				–
Noncash warrant expense		–			234				–				234
Depreciation and amortization expense		91			93				321				306
Change in fair value of contingent consideration		(2,980	)		–				(2,980	)			–
Severance charge		1,260			–				1,260				–
Non-GAAP loss from operations, as adjusted	$	(6,089	)	$	(4,109	)	$		(20,340	)	$		(11,967	)