IZEA Reports Q3 2020 Financial Results

ORLANDO, Fla., Nov. 12, 2020 (GLOBE NEWSWIRE) — IZEA Worldwide, Inc. (NASDAQ: IZEA), the premier provider of influencer marketing technology, data, and services for the world’s leading brands, reported its financial and operational results for the third quarter ended September 30, 2020.

Q3 2020 Financial Summary Compared to Q3 2019

  • Total revenue down 9% to $4.0 million, compared to $4.4 million.
  • Managed Services unit revenue decreased 1% to $3.5 million, compared to $3.6 million.
  • SaaS Services unit revenue decreased 39% to $522,000, compared to $853,000.
  • Total costs and expenses decreased to $5.3 million, compared to $5.6 million.
  • Net loss was $1.3 million, compared to a net loss of $1.2 million.
  • Adjusted EBITDA* improved to $(0.7) million, compared to $(1.3) million.

Q3 2020 Operational Highlights

  • Raised gross proceeds of $10.3 million from sale of securities through an at-the-market offering. In total, we have raised $25.7 million at an average price of $1.94 per share.
  • Opened pre-registration for the Shake Marketplace.
  • Announced launch of BrandGraph Pulse with Slack and Microsoft Teams Integration.
  • Formed Influence+United and onboarded multiple global influencer marketing partners.

* Adjusted EBITDA is a non-GAAP financial measure. Refer to the definition and reconciliation of this measure under “Use of Key Metrics and Non-GAAP Financial Measures”.

Management Commentary

“While revenue was down year over year in Q3, we saw a material improvement in both revenue and Adjusted EBITDA quarter over quarter. Revenue increased 29% and Adjusted EBITDA improved 43% compared to the second quarter ended in June 2020,” said Ted Murphy, IZEA’s Chairman and CEO. “Managed Services revenue in Q3 was close to flat year over year, despite the large gaps in new business we saw in March and April and the ongoing challenges associated with COVID-19 and the political environment. There was no way for IZEA to completely avoid the impacts that COVID-19 has had on the marketing budgets of some of our existing clients, but I believe our team has done a fantastic job adjusting our sales approach and finding new opportunities to bridge the gap.”

“There was a bigger impact in our SaaS Services unit, as we expected,” continued Murphy. “We were already in the midst of a change in pricing model for enterprise customers from last year which would impact 2020 revenue even without the events that have unfolded since the pandemic was declared. The acquisition of new enterprise customers has been slow since March, and many of our existing customers have reduced their marketplace spend. We expect to see challenges with enterprise SaaS until such time that the macro environment stabilizes, and marketers feel more comfort in making long term commitments.”

“Despite the decreases in overall SaaS revenue, our count of active SaaS customers is growing and hit an all-time high again this quarter,” said Murphy. “We continue to see growth with IZEAx Discovery, our $149/mo self-service offering. New customer signups for IZEAx Discovery hit an all-time high in October and were up 2.6x from October of last year. Monthly revenue for IZEAx Discovery also hit an all-time high in October and was up more than 25% from September of this year, which was the previous record. We are beginning to invest much more aggressively in our marketing efforts to broaden our customer base and drive more of this self-service growth. Early indications are that our marketing efforts are working, and we believe there are ongoing performance optimizations to make each dollar we spend more effective as we gather more data.”

“IZEA ended the quarter with $30.6 million in cash, the strongest our balance sheet has ever been,” said Murphy. “Our team has been working to prudently make strategic investments in technology, marketing, and people to best position ourselves for 2021 and beyond. Our primary focus for the year ahead is returning to revenue growth by broadening our customer base with emphasis on self-service revenue streams.”

Q3 2020 Financial Results

Total revenue in the third quarter of 2020 was down 9% to $4.0 million, compared to $4.4 million in the third quarter of 2019, with revenue from Managed Services decreasing by $44,000 or 1% to $3.5 million in the third quarter of 2020 compared to the third quarter of 2019 and revenue from SaaS Services decreasing by $331,000 or 39% in the third quarter of 2020 compared to the third quarter of 2019.

Revenue from Managed Services decreased slightly due to marketers canceling or pausing planned advertising campaigns or events in March and throughout the third quarter of 2020 as a result of uncertainty or inability to offer their products for sale as a result of business or event shutdowns due to COVID-19. Despite the delay in the execution of existing orders from our customers, we experienced a slight increase in net sales orders in the third quarter of 2020 compared to the second quarter of 2020, as marketers who were still advertising shifted more of their spend to influencer marketing campaigns.

Revenue from SaaS Services decreased primarily as a result of lower marketplace spend levels (“gross billings,” a key metric as further defined below) from our SaaS marketers and, as a result of competitive pricing efforts, our margins on those spends were reduced. Our gross billings for SaaS Services decreased 35% to $2.0 million in Q3 2020, compared to $3.1 million in Q3 2019. Our SaaS marketers decreased their spend levels as they transitioned from the TapInfluence platform to IZEAx and curtailed spending in March 2020 and throughout Q3 2020. The reduction in these gross billings resulted in the $331,000 decrease in SaaS Services Revenue in the third quarter of 2020 compared to the third quarter of 2019.

Total costs and expenses decreased 5% in the third quarter of 2020 to $5.3 million compared to $5.6 million in the corresponding quarter of 2019. This decrease was due to a $203,000 reduction in cost of revenue as a result of the lower sales, a $61,000 reduction in amortization costs as assets were fully amortized in the quarter, and cost reduction efforts affecting personnel, software subscriptions, hosting costs, rent, travel and marketing expenditures. The improvement between periods is more than $1 million after removing the effect of a $794,000 gain on the final settlement of our acquisition cost liabilities recorded in the prior year quarter. The gain resulted due to the actual closing market price of our common stock on the date of settlement being lower than the 30-day volume weighted average price used to calculate the number of shares used to pay for the acquisition liability pursuant to the terms of the purchase agreements.

Net loss in the third quarter of 2020 was $1.3 million or $(0.03) per share, as compared to a net loss of $1.2 million or $(0.04) per share in the third quarter of 2019, based on 45.8 million and 32.4 million shares outstanding, respectively.

Adjusted EBITDA (a non-GAAP measure management uses as a proxy for operating cash flow, as defined below) improved 42% or $531,000 to $(0.7) million compared to $(1.3) million in the third quarter of 2020 and 2019, respectively. Adjusted EBITDA as a percentage of revenue in the third quarter of 2020 was negative eighteen percent (18)% compared to negative twenty-eight percent (28)% in the third quarter of 2019. Despite the decline in revenue, we were able to improve Adjusted EBITDA through the steps taken to curb spending during these months of uncertainty.

We raised $10.3 million from sale of securities through our at-the-market offering (the “ATM”) in Q3 2020. To date, we have raised total gross proceeds through the ATM of $25.7 million between June and August 2020. Our cash balance as of September 30, 2020 was $30.6 million.

Conference Call

IZEA will hold a conference call to discuss its third quarter 2020 results on Thursday, November 12th at 5:00 p.m. Eastern time. Management will host the call, followed by a question and answer period.

Date: Thursday, November 12, 2020
Time: 5:00 p.m. Eastern time
Toll-free dial-in number: 1-855-327-6837
International dial-in number: 1-631-891-4304

The conference call will be webcast live and available for replay via the investors section of our website at https://izea.com/. Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. A replay of the call will be available after 8:00 p.m. Eastern time on the same day through November 19, 2020.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 10011744

About IZEA Worldwide, Inc.

IZEA Worldwide, Inc. (“IZEA”) operates online platforms that connect marketers with content creators. IZEA platforms automate influencer marketing and custom content development, allowing brands and agencies to identify social trends and scale their marketing programs. IZEA influencers include everyday creators, as well as celebrities and accredited journalists. Creators are compensated for producing unique content such as long and short form text, videos, photos, status updates and illustrations for marketers or distributing such content on behalf of marketers through their personal websites, blogs and social media channels. Marketers receive influential content and engaging, shareable stories that drive awareness. For more information about IZEA, visit https://izea.com/.

Use of Key Metrics and Non-GAAP Financial Measures

We define gross billings, a key metric, as the total dollar value of the amounts earned from our customers for the services we performed, or the amounts billed to our customers for their self-service purchase of goods and services on our platforms. Gross billings for Legacy Workflow and Marketplace Spend (which are included in SaaS Services) differs from revenue for these services reported in our consolidated statements of operations. These services are presented net of the amounts we pay to the third-party creators providing the content or sponsorship services. Gross billings for all other revenue types equal the revenue reported in our consolidated statements of operations.

We consider this metric to be an important indicator of our performance as it measures the total dollar volume of transactions generated through our marketplaces. Tracking gross billings allows us to evaluate our transaction totals on an equal basis in order for us to see our contribution margins by revenue stream so that we can better understand where we should be allocating our resources.  Additionally, because we invoice our customers on a gross basis based on our services or their transactions plus a fee, tracking gross billings is critical as it pertains to our credit risk and cash flow.

“Adjusted EBITDA” is a non-GAAP financial measure under the rules of the Securities and Exchange Commission. EBITDA is commonly defined as “earnings before interest, taxes, depreciation and amortization.” IZEA defines “Adjusted EBITDA,” also a non-GAAP financial measure, as earnings or loss before interest, taxes, depreciation and amortization, non-cash stock related compensation, gain or loss on asset disposals or impairment, changes in acquisition cost estimates, and certain other unusual or non-cash income and expense items such as gains or losses on settlement of liabilities and exchanges, and changes in the fair value of derivatives, if applicable. 

We believe that Adjusted EBITDA provides useful information to investors as it excludes transactions not related to our core cash-generating operating business activities, and it provides consistency to facilitate period-to-period comparisons. We believe that excluding these transactions allows investors to meaningfully trend and analyze the performance of our core cash-generating operations.

All companies do not calculate gross billings and Adjusted EBITDA in the same manner. These metrics as presented by IZEA may not be comparable to those presented by other companies. Moreover, these metrics have limitations as analytical tools, and you should not consider them in isolation or as a substitute for an analysis of our results of operations as reported under GAAP. A reconciliation of GAAP to non-GAAP results is included in the financial tables included in this press release.

Safe Harbor Statement

All statements in this release that are not based on historical fact are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “may,” “will,” “would,” “could,” “should,” “expects,” “anticipates,” “estimates,” “believes,” “intends,” “likely,” “projects,” “plans,” “pursue,” “strategy” or “future,” or the negative of these words or other words or expressions of similar meaning. Examples of forward-looking statements include, among others, statements we make regarding expectations regarding future results and the realization of revenue from bookings, expectations with respect to operational efficiency, and expectations concerning IZEA’s business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including, among others, the following: our ability to raise additional funding needed to fund our business operation in the future, uncertainty relating to the effects of COVID-19, competitive conditions in the content and social sponsorship segment in which IZEA operates; failure to popularize the IZEAx marketplace platform; our ability to satisfy the requirements for continued listing of our common stock on the Nasdaq Capital Market; changing economic conditions that are less favorable than expected; and other risks and uncertainties described in IZEA’s periodic reports filed with the Securities and Exchange Commission. The forward-looking statements made in this release speak only as of the date of this release, and IZEA assumes no obligation to update any such forward-looking statements to reflect actual results or changes in expectations, except as otherwise required by law.

Press Contact

Martin Smith
IZEA Worldwide, Inc.
Phone: 407-674-6911
Email: [email protected]

 
IZEA Worldwide, Inc.

Unaudited Consolidated Balance Sheets
 
  September 30, 2020   December 31, 2019
Assets      
Current assets:      
Cash and cash equivalents $ 30,617,921     $ 5,884,629  
Accounts receivable, net 3,981,132     5,596,719  
Prepaid expenses 385,128     400,181  
Other current assets 140,291     153,031  
Total current assets 35,124,472     12,034,560  
       
Property and equipment, net 260,994     309,780  
Goodwill 4,016,722     8,316,722  
Intangible assets, net 768,879     1,611,516  
Software development costs, net 1,480,288     1,519,980  
Security deposits     151,803  
Total assets $ 41,651,355     $ 23,944,361  
       
Liabilities and Stockholders’ Equity      
Current liabilities:      
Accounts payable $ 1,333,281     $ 2,252,536  
Accrued expenses 1,267,553     1,377,556  
Contract liabilities 7,028,687     6,466,766  
Current portion of notes payable 1,157,103      
Right-of-use liability     83,807  
Total current liabilities 10,786,624     10,180,665  
       
Finance obligation, less current portion 65,604     45,673  
Notes payable, less current portion 778,092      
Total liabilities 11,630,320     10,226,338  
       
Commitments and Contingencies      
       
Stockholders’ equity:      
Preferred stock; $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding      
Common stock; $.0001 par value; 200,000,000 shares authorized; 48,331,379 and 34,634,172, respectively, issued and outstanding 4,833     3,464  
Additional paid-in capital 99,610,374     74,099,328  
Accumulated deficit (69,594,172 )   (60,384,769 )
Total stockholders’ equity 30,021,035     13,718,023  
       
Total liabilities and stockholders’ equity $ 41,651,355     $ 23,944,361  

 
IZEA Worldwide, Inc.

Unaudited Consolidated Statements of Operations
 
  Three Months Ended September 30,   Nine Months Ended September 30,
  2020   2019   2020   2019
Revenue $ 4,036,120     $ 4,411,086     $ 11,934,827     $ 13,128,706  
               
Costs and expenses:              
Cost of revenue (exclusive of amortization) 1,701,770     1,904,287     5,256,536     5,821,237  
Sales and marketing 1,403,037     1,518,165     4,154,871     4,238,074  
General and administrative 1,827,267     1,752,126     6,165,597     6,596,485  
Impairment of goodwill         4,300,000      
Depreciation and amortization 372,483     433,094     1,250,859     1,317,423  
Total costs and expenses 5,304,557     5,607,672     21,127,863     17,973,219  
               
Loss from operations (1,268,437 )   (1,196,586 )   (9,193,036 )   (4,844,513 )
               
Other income (expense):              
Interest expense (16,448 )   (27,734 )   (42,542 )   (242,935 )
Other income, net 30,085     51,285     26,175     91,447  
Total other income (expense), net 13,637     23,551     (16,367 )   (151,488 )
               
Net loss $ (1,254,800 )   $ (1,173,035 )   $ (9,209,403 )   $ (4,996,001 )
               
Weighted average common shares outstanding – basic and diluted 45,772,638     32,421,043     38,879,218     22,506,929  
Basic and diluted loss per common share $ (0.03 )   $ (0.04 )   $ (0.24 )   $ (0.22 )
                               

Revenue Details:

  Three Months Ended September 30, Nine Months Ended September 30,
  2020   2019   2020   2019
Managed Services Revenue $ 3,513,806     $ 3,558,109     $ 10,129,210     $ 10,416,912  
               
Legacy Workflow Fees     44,170         135,791  
Marketplace Spend Fees 120,630     266,037     482,817     955,328  
License Fees 358,879     505,634     1,184,423     1,545,222  
Other Fees 42,805     37,136     138,377     75,453  
SaaS Services Revenue 522,314     852,977     1,805,617     2,711,794  
               
Total Revenue $ 4,036,120     $ 4,411,086     $ 11,934,827     $ 13,128,706  

 
IZEA Worldwide, Inc.

Reconciliation of GAAP Net loss to Non-GAAP Adjusted EBITDA

(Unaudited)
 
  Three Months Ended September 30,   Nine Months Ended September 30,
  2020   2019   2020   2019
Net loss $ (1,254,800 )   $ (1,173,035 )   $ (9,209,403 )   $ (4,996,001 )
Non-cash stock-based compensation   108,568       179,866       356,846       498,071  
Non-cash stock issued for payment of services   31,250       37,509       93,749       112,504  
Gain on settlement of acquisition costs payable         (793,849 )           (602,410 )
Increase in value of acquisition costs payable         889             6,222  
Interest expense   16,448       27,734       42,542       242,935  
Depreciation and amortization   372,483       433,094       1,250,859       1,317,423  
Impairment of goodwill               4,300,000        
Other non-cash items   1,283       31,998       (22,423 )     23,903  
Adjusted EBITDA $ (724,768 )   $ (1,255,794 )   $ (3,187,830 )   $ (3,397,353 )
                               
Revenue $ 4,036,120     $ 4,411,086     $ 11,934,827     $ 13,128,706  
Adjusted EBITDA as a % of Revenue   (18 )%     (28 )%     (27 )%     (26 )%

 
IZEA Worldwide, Inc.

Gross Billings

(Unaudited)
 
Gross billings by revenue type:
  Three Months Ended September 30, Nine Months Ended September 30,
  2020   2019   2020   2019
Managed Services Gross Billings $ 3,513,806     $ 3,558,109     $ 10,129,210     $ 10,416,912  
               
Legacy Workflow Fees     609,375         1,871,056  
Marketplace Spend Fees 1,605,729     1,942,995     4,702,383     7,199,141  
License Fees 358,879     505,634     1,184,423     1,545,222  
Other Fees 42,805     37,136     138,377     75,453  
SaaS Services Gross Billings 2,007,413     3,095,140     6,025,183     10,690,872  
               
Total Gross Billings $ 5,521,219     $ 6,653,249     $ 16,154,393     $ 21,107,784  

electroCore Announces Third Quarter Financial Results

R
evenue growth of
44
%
over the second quarter of 2020
and
58
% over the third quarter of 2019

R
eturn to
sequential revenue
growth across all channels

Further strengthened balance sheet

Reduced
quarterly cash burn

Company to host conference call and webcast today,
November 12
, 2020 at 4:30 pm ET

BASKING RIDGE, N.J., Nov. 12, 2020 (GLOBE NEWSWIRE) — electroCore, Inc. (Nasdaq: ECOR), a commercial-stage bioelectronic medicine company, today announced third quarter 2020 financial results and provided an operational update.

Third
Quarter 2020 and Recent Highlights

  • Generated revenue of approximately $1.1 million, representing an increase of 44% sequentially and 58% over the third quarter of 2019.
  • Net cash used was approximately $4.1 million.
  • Announced receipt of Emergency Use Authorization for the use of gammaCore Sapphire™ CV at home or in a healthcare setting to acutely treat adult patients with known or suspected COVID-19 who are experiencing exacerbation of asthma-related dyspnea and reduced airflow, and for whom approved drug therapies are not tolerated or provide insufficient symptom relief.
  • Secured a six-month extension for reimbursement of gammaCore by NHS England’s Innovation and Technology Payment Program (ITP) for adult patients suffering from cluster headache. The extension runs through March 31, 2021 and includes an option for up to an additional three years. Total contract value assuming exercise of the three-year extension option would be approximately £3.6 million based on recent exchange rates.
  • Announced that the Veterans Administration (VA) is sponsoring a clinical trial evaluating non-invasive vagal nerve stimulation (nVNS) in mild traumatic brain injury (mTBI) and Post-Traumatic Stress Disorder (PTSD).
  • Announced a publication in the journal Brain Stimulation highlighting a double-blind sham-controlled study of nineteen participants who had experienced trauma but did not have the diagnosis of PTSD and that highlights the ability of nVNS to decrease the fear associated with emotional stress.
  • Appointed business development executive and U.S. Navy veteran Commander Sylvester “Sly” Steele as Vice President of Government Channels Business Unit.

Dan Goldberger, Chief Executive Officer of electroCore, commented: “During the third quarter, we demonstrated progress in key operating metrics across all of our revenue channels, most notably the VA and U.S. Department of Defense (DOD), and the U.K., as our team continues to successfully adapt to an evolving business environment. We believe gammaCore fits well with the rapid growth in telehealth consults driven by the ongoing pandemic, and in the VA in particular, we were able to generate a 59% sequential increase in paid months of therapy by leveraging the agency’s advanced telehealth capabilities. Similarly, in COVID-19, our recently announced partnership with Upscript, LLC facilitates access to gammaCore Sapphire CV from the comfort of one’s home without having to visit a physician or pharmacy.

“With $26 million of cash and marketable securities as of September 30, our financial condition remains strong. Our net cash used in operations of $4.1million during the third quarter reflects our relentless drive to be efficient and nimble, and capable of responding quickly to emerging opportunities and challenges. I am proud of our accomplishments thus far and believe we have built a solid foundation for growth in 2021,” Mr. Goldberger concluded.

Third
Quarter 2020 Financial Results

For the quarter ended September 30, 2020, electroCore reported net sales of approximately $1.1 million compared to $683,000 in the same period of 2019, and consistent with the guidance provided in the company’s October 13, 2020 business update.

Revenue from the VA and DOD increased 56% sequentially to $646,000 during the third quarter of 2020 from $415,000 in the second quarter of 2020 and $279,000 in the third quarter of 2019. Paid months of therapy shipped to the VA and DOD increased 59% sequentially to 1,571 in the third quarter of 2020 from 988 during the second quarter of 2020 and increased 184% as compared to 553 in the third quarter of 2019.

Revenue from outside the U.S. increased sequentially to $278,000 from $247,000 in the second quarter of 2020 and $188,000 in the third quarter of 2019. Paid months of therapy shipped outside the U.S. increased 9% sequentially to 1,020 in the third quarter of 2020 from 938 in the second quarter of 2020 and increased 23% as compared to 828 in the third quarter of 2019.

Total operating expenses in the third quarter of 2020 were approximately $5.2 million, a reduction of approximately $6.0 million from $11.2 million in the third quarter of 2019.

SG&A expense declined approximately $3.5 million to $4.6 million in the third quarter of 2020 from approximately $8.1 million in the third quarter of 2019. This decrease was primarily due to the company’s reduction in sales and marketing activities, consistent with its cost reduction plan which commenced in 2019.

Research and development expense decreased by approximately $1.7 million to $0.6 million in the third quarter of 2020 from $2.3 million in the third quarter of 2019. This reduction is consistent with the company’s strategy of reducing its near-term investment in research and development.

GAAP net loss in the third quarter of 2020 was $4.5 million as compared to a GAAP net loss of $10.7 million in the third quarter of 2019.

Adjusted EBITDA net loss in the third quarter of 2020 was a loss of $3.3 million as compared to a loss of $8.7 million in the third quarter of 2019.

The company defines adjusted EBITDA net loss as GAAP net loss, excluding income tax expense/benefit, stock-compensation expense, restructuring and other severance related charges, legal fees associated with stockholders’ litigation and total other income/expense. A reconciliation of GAAP net loss to Non-GAAP adjusted EBITDA net loss has been provided in the financial statement tables included in this press release.

Net cash used in the quarter ended September 30, 2020 was approximately $4.1 million, excluding $11.2 million of proceeds received from sales of stock to Lincoln Park Capital, as compared to $5.2 million in the second quarter of 2020, which excludes the tax benefit received for the sale of New Jersey NOL’s and financing activities, and $7.6 million in the third quarter of 2019.

Cash and cash equivalents and marketable securities at September 30, 2020 totaled approximately $26.0 million, as compared to approximately $24.1 million at December 31, 2019.

Webcast and Conference Call Information

electroCore’s management team will host a conference call today November 12, 2020 beginning at 4:30 p.m. ET. Investors interested in listening to the conference call, or webcast may do so by dialing 877-407-4018 for domestic callers or 201-689-8471 for international callers, using Conference ID: 13711577, or by connecting to the Web: http://public.viavid.com/index.php?id=141806

An archived webcast of the event will be available on the “Investors” section of the company’s website at: www.electrocore.com.

About electroCore, Inc.

electroCore, Inc. is a commercial-stage bioelectronic medicine company dedicated to improving patient outcomes through its platform non-invasive vagus nerve stimulation therapy initially focused on the treatment of multiple conditions in neurology. The company’s current indications are the preventative treatment of cluster headache and migraine and acute treatment of migraine and episodic cluster headache.

For more information, visit www.electrocore.com.

About gammaCore

e

TM

gammaCoreTM (nVNS) is the first non-invasive, hand-held medical therapy applied at the neck as an adjunctive therapy to treat migraine and cluster headache through the utilization of a mild electrical stimulation to the vagus nerve that passes through the skin. Designed as a portable, easy-to-use technology, gammaCore can be self-administered by patients, as needed, without the potential side effects associated with commonly prescribed drugs. When placed on a patient’s neck over the vagus nerve, gammaCore stimulates the nerve’s afferent fibers, which may lead to a reduction of pain in patients. 

gammaCore is FDA cleared in the United States for adjunctive use for the preventive treatment of cluster headache in adult patients, the acute treatment of pain associated with episodic cluster headache in adult patients, the acute treatment of pain associated with migraine headache in adult patients, and the prevention of migraine in adult patients. gammaCore is CE-marked in the European Union for the acute and/or prophylactic treatment of primary headache (Migraine, Cluster Headache, Trigeminal Autonomic Cephalalgias and Hemicrania Continua) and Medication Overuse Headache in adults.

  Safety and efficacy of gammaCore have not been evaluated in the following patients:
      º Patients diagnosed with narrowing of the arteries (carotid atherosclerosis)
      º Patients who have had surgery to cut the vagus nerve in the neck (cervical vagotomy)
      º Pediatric patients
      º Pregnant women
      º Patients with clinically significant hypertension, hypotension, bradycardia, or tachycardia
         
  Patients should not use gammaCore if they:
      º Have an active implantable medical device, such as a pacemaker, hearing aid implant, or any implanted electronic device
      º Have a metallic device such as a stent, bone plate, or bone screw implanted at or near their neck
      º Are using another device at the same time (e.g., TENS Unit, muscle stimulator) or any portable electronic device (e.g., mobile phone)

In the US, the FDA has not cleared gammaCore for the treatment of pneumonia and/or respiratory disorders such as acute respiratory stress disorder associated with COVID-19.

Please refer to the gammaCore Instructions for Use for all of the important warnings and precautions before using or prescribing this product.

gammaCore SapphireTM CV has received Emergency Use Authorization (EUA) from the FDA for acute use at home or in a healthcare setting to treat adult patients with known or suspected COVID-19 who are experiencing exacerbation of asthma-related dyspnea and reduced airflow, and for whom approved drug therapies are not tolerated or provide insufficient symptom relief as assessed by their healthcare provider, by using non-invasive Vagus Nerve Stimulation (nVNS) on either side of the patient’s neck during the Coronavirus Disease 2019 (COVID-19) pandemic.

gammaCore Sapphire CV has neither been cleared nor approved for acute use at home or in a healthcare setting to treat adult patients with known or suspected COVID-19 who are experiencing exacerbation of asthma-related dyspnea and reduced airflow, and for whom approved drug therapies are not tolerated or provide insufficient symptom relief as assessed by their healthcare provider, by using non-invasive Vagus nerve Stimulation (nVNS) on either side of the patient’s neck during the Coronavirus Disease 2019 (COVID-19) pandemic

gammaCore Sapphire CV has been authorized only for the duration of the declaration that circumstances exist justifying the authorization of the emergency use of medical devices under section 564(b)(1) of the Act, 21 U.S.C. § 360bbb-3(b)(1), unless the authorization is terminated or revoked.

Please refer to gammaCore Sapphire CV (nVNS) Instructions for Use for Use for all of the important warnings and precautions before using or prescribing gammaCore Sapphire CV (nVNA).

Forward-Looking Statement

This press release and other written and oral statements made by representatives of electroCore may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements about electroCore’s business prospects and clinical and product development plans, its pipeline or potential markets for its technologies, the timing, outcome and impact of regulatory, clinical and commercial developments including commercialization of, and potential reimbursement for, gammaCore Sapphire CV, the business, operating or financial impact of such studies, and other statements that are not historical in nature, particularly those that utilize terminology such as “anticipates,” “will,” “expects,” “believes,” “intends,” other words of similar meaning, derivations of such words and the use of future dates. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the ability to raise the additional funding needed to continue to pursue electroCore’s business and product development plans, the inherent uncertainties associated with developing new products or technologies, the ability to commercialize gammaCore™, the potential impact and effects of COVID-19 on the business of electroCore, electroCore’s results of operations and financial performance, and any measures electroCore has and may take in response to COVID-19 and any expectations electroCore may have with respect thereto, competition in the industry in which electroCore operates and overall market conditions. Any forward-looking statements are made as of the date of this press release, and electroCore assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements, except as required by law. Investors should consult all of the information set forth herein and should also refer to the risk factor disclosure set forth in the reports and other documents electroCore files with the SEC available at www.sec.gov.

Investors:

Hans Vitzthum
LifeSci Advisors
617-430-7578
[email protected]

or
Media Contact:
Jackie Dorsky
electroCore
973-290-0097
[email protected]

electroCore, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share data)

  For the three months ended
September 30,
  For the nine months ended
September 30,
    2020       2019       2020       2019  
                               
  (in thousands)
Net sales $ 1,080.8     $ 683.0     $ 2,567.6     $ 1,715.3  
Cost of goods sold   347.5       353.9       918.6       766.2  
Gross profit   733.3       329.1       1,649.0       949.2  
Operating expenses              
Research and development   629.0       2,274.9       3,182.6       8,279.4  
Selling, general and administrative   4,592.9       8,143.4       16,427.0       28,155.6  
Restructuring and other related charges         804.6       464.6       1,997.3  
Total operating expenses   5,221.9       11,222.9       20,074.2       38,432.3  
Loss from operations   (4,488.6 )     (10,893.8 )     (18,425.3 )     (37,483.2 )
Other (income)/expense              
Interest and other income   (5.7 )     (206.1 )     (80.5 )     (850.1 )
Other expense   3.5             13.4       16.7  
Total other (income)/expense   (2.2 )     (206.1 )     (67.1 )     (833.4 )
Loss before income taxes   (4,486.4 )     (10,687.7 )     (18,358.2 )     (36,649.8 )
Benefit from income taxes               1,170.9        
Net loss $ (4,486.4 )   $ (10,687.7 )   $ (17,187.3 )   $ (36,649.8 )
               
Net loss per share of common stock – Basic and Diluted $ (0.10 )   $ (0.36 )   $ (0.47 )   $ (1.25 )
Weighted average common shares outstanding – Basic and Diluted   44,030,685       29,352,026       36,847,548       29,399,384  





electroCore, Inc.


Condensed Consolidated Balance Sheet Information

(in thousands)

  As of   As of
  September 30, 2020   December 31, 2019
  (unaudited)   (audited)
Cash and cash equivalents $ 3,832.5   $ 13,563.8
Marketable securities $ 22,135.2   $ 10,495.4
Total assets $ 37,075.3   $ 35,461.7
Current liabilities $ 5,811.6   $ 9,144.7
Total liabilities $ 8,179.3   $ 10,564.6
Total equity $ 28,896.0   $ 24,897.1



(Unaudited)
Use of Non-GAAP Financial Measure

The company is presenting adjusted EBIDTA net loss because it believes this measure is a useful indicator of its operating performance. electroCore management uses this non-GAAP measure principally as a measure of the company’s core operating performance and believes that this measure is useful to investors because it is frequently used by the financial community, investors, and other interested parties to evaluate companies in the company’s industry. The company also believes that this measure is useful to its management and investors as a measure of comparative operating performance from period to period. Additionally, the company believes its use of non-GAAP adjusted EBITDA net loss from operations facilitates management’s internal comparisons to historical operating results by factoring out potential differences caused by charges not related to its regular, ongoing business, including, without limitation, non-cash charges and certain large and unpredictable charges such as restructuring expenses.

The company has presented adjusted EBITDA net loss as a non-GAAP financial measure in this press release. The company defines adjusted EBITDA net loss as its reported GAAP net loss excluding income tax expense/benefit, depreciation and amortization, stock-based compensation, restructuring and other severance related charges, legal fees associated with stockholders litigation and total other income /expense and other income and expense.

               
  For the three months ended September 30,   For the nine months ended September 30,
    2020       2019       2020       2019  
GAAP net loss $ (4,486.4 )   $ (10,687.7 )   $ (17,187.3 )   $ (36,649.8 )
               
Depreciation/amortization $ 94.9     $ 98.6     $ 288.6     $ 152.3  
               
Stock-based compensation $ 742.9     $ 1,219.6     $ 2,490.6     $ 2,690.4  
               
Restructuring and other related charges $     $ 804.6     $ 464.6     $ 1,997.3  
               
Legal fees associated with stockholders litigation $ 371.0     $ 76.6     $ 1,104.7     $ 76.6  
               
Total other (income)/expense $ (2.2 )   $ (206.1 )   $ (67.1 )   $ (833.4 )
               
Benefit from income taxes $     $     $ (1,170.9 )   $  
               
Adjusted EBIDTA net loss from operations $ (3,279.8 )   $ (8,694.3 )   $ (14,076.8 )   $ (32,566.6 )

The company’s use of a non-GAAP measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of its results as reported under GAAP. Some of these limitations are: the non-GAAP measure does not reflect interest or tax payments that may represent a reduction in cash available; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and the non-GAAP measure does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; the non-GAAP measure does not reflect the potentially dilutive impact of equity-based compensation; and the non-GAAP measure does not reflect changes in, or cash requirements for, working capital needs; other companies, including companies in electroCore’s industry, may calculate adjusted EBITDA net loss differently, which reduces its usefulness as a comparative measure.

Because of these and other limitations, you should consider the non-GAAP measure together with other GAAP-based financial performance measures, including various cash flow metrics, net loss, and other GAAP results. A reconciliation of GAAP net loss to non-GAAP adjusted EBITDA net loss has been provided in the preceding financial statements table of this press release.

Aspira Women’s Health Reports Third Quarter 2020 Financial Results

Conference Call scheduled for today, November 12th at 4:30 p.m. ET

AUSTIN, Texas, Nov. 12, 2020 (GLOBE NEWSWIRE) — Aspira Women’s Health Inc. (“ASPIRA”) (Nasdaq: AWH), a bio-analytical based women’s health company focused on gynecologic disease, today reported its financial results for the third quarter ended September 30, 2020.

“Our test volume and revenue have rebounded in Q3 to nearly pre-pandemic levels coupled with price expansion due to the CIGNA contract starting in Q2.  We also added a key payer to help further drive adoption and price. We remain on track with our product launches and lastly we are very excited about our board and senior leadership team announcements. Aspira is now a Company majority led by women, for women, and these additions will significantly help to propel our growth.” stated Valerie Palmieri, President and CEO.

Recent Corporate Highlights 

Strengthened executive and medical advisory leadership team: Expanded the leadership team with the appointment and promotion of five new corporate executives: Kaile Zagger, Chief Operating Officer; Lesley Northrop M.D., Chief Scientific Officer; Elena Ratner, M.D., Global Chief Medical Advisor, Clinical and Translational Medicine; Gary Altwerger, M.D., BS, Global Deputy Chief Medical Advisor, Clinical and Translational Medicine; and Diane Powis, Chief Spokeswoman           

Board Expansion: Aspira announced the appointment to our Board of Dr Sandra Brooks M.D., Senior Vice President and Chief Medical Officer of Thomas Jefferson University Hospitals. The majority of our board is now female. 

Volume Recovery: Aspira ended the third quarter at 95% of pre-covid levels comparing February 2020, the last full calendar month before COVID-19 significantly impacted the United States, to September 2020. Our OVA1 test volume increased 46% sequentially from the second quarter test volume levels and was approximately at the same level as third quarter of 2019. Our average unit price of OVA1 Plus increased sequentially 15%  compared with the second quarter of 2020.  2,450 physicians ordered OVA1 with 84 percent of the customers being repeat customers. The number of ordering physicians increased 37% from the second quarter.  The number of tests ordered by practice is up 32% compared to the prior year third quarter. 

Expanded Payer Coverage: Aspira is a participating provider with Anthem BlueCross BlueShield of Georgia, for an estimated additional 3.3 million members across the state. Aspira now has approximately 72% of the covered lives in Georgia.  As of November 1, 2020, Aspira has approximately 173 million covered lives in the US.

State of Connecticut Financing: The Company previously announced a $4M loan from the State of Connecticut Department of Economic and Community Development, $2M of which we received in 2016. We expect to receive the additional $2M of funding under the DECD loan in the fourth quarter of 2020.

Publications: In October 2020, we published a paper in Current Medical Research and Opinion, titled “Low-risk Multivariate Index Assay Scores, Physician Referral and Surgical Choices in Women with Adnexal Masses”.  A total of 282 independent patient charts were reviewed of which 146 were Low Risk results. Surgery was performed on 56% patients with low risk scores. The other 44% had no surgery and were followed clinically.  There were no invasive cancers in the patients who had surgery. Clinicians were comfortable with expectant management of pelvic masses when OVA1 is low risk. These results demonstrated to us that there is an immediate need to assessing the status of a pelvic mass even though surgery is not performed. 


Third Quarter Highlights:

  • Product revenue was $1.2 million for the third quarter 2020, compared to $726,000 in the second quarter of 2020 and $1.2 million in the third quarter of 2019. Revenue increased 68% over second quarter of 2020 and was flat over the third quarter of 2019.  This reflects a strong volume and price recovery from the second quarter level as a result of the impact of COVID.
  • The number of OVA1plus tests performed was 3596 for the third quarter 2020, compared to 2,458 in the second quarter of 2020 and 3,602 in the third quarter of 2019. Volume increased 46% over the second quarter of 2020 and was relatively flat over the third quarter of 2019.  This reflects a strong volume recovery from the second quarter level as a result of the impact of COVID.
  • Revenue on a per test performed basis for OVA1 revenue was $338 in the third quarter of 2020 compared to $295 in the second quarter of 2020.   The sequential  increase was driven by realization of a full quarter of our new contract price from CIGNA as of April 1, 2020 as well as the absence of one time items recorded in the second quarter.
  • Gross profit on OVA1® product revenue was $547 thousand (a 45% profit margin) for the third quarter 2020 compared to $268 thousand for the second quarter of 2020 (a 37% profit margin).
  • Research and development expenses for the third quarter 2020 were $595 thousand an increase of $255 thousand compared to the same period in 2019. This increase was primarily due to launching clinical studies as well as bioinformatics investments.
  • Sales and marketing expenses for the third quarter 2020 were $2.1M compared to $2.4M the same period in 2019. This decrease was primarily due to reduced travel due to the COVID-19 pandemic.
  • General and administrative expenses for the third quarter 2020 were $1.9M compared to $1.4M for the same period in 2019. This increase was primarily due to an increase in headcount and personnel-related expenses as well as legal expenses.
  • The cash balance at September 30, 2020 was approximately $19 million. Cash utilization in the third quarter of 2020 was $3.1M compared to $3.3M in the second quarter and $3.6M in the prior year third quarter.  The sequential reduction in cash utilization was driven primarily by stronger revenue and gross margin while the year on year decrease was primarily reduced spending on sales and marketing.

Conference Call and Webcast

ASPIRA will host a call today at 4:30 p.m. Eastern Time to discuss results followed by a question and answer period.



Thursday, November 12th @ 4:30pmET

Investors Dial-in: 877-407-4018
International Dial-in: 201-689-8471
Conference ID: 1372253
Webcast:  http://public.viavid.com/index.php?id=142095
   

About Aspira Women’s Health Inc.

ASPIRA is transforming women’s health with the discovery, development and commercialization of innovative testing options and bio-analytical solutions that help physicians assess risk, optimize patient management and improve gynecologic health outcomes for women. OVA1®plus combines our FDA-cleared products OVA1® and OVERA® to detect risk of ovarian malignancy in women with adnexal masses. ASPiRA GenetiXSM testing offers both targeted and comprehensive genetic testing options with a gynecologic focus.  With over 10 years of expertise in ovarian cancer risk assessment ASPIRA has expertise in cutting-edge research to inform our next generation of products. Our focus is on delivering products that allow healthcare providers to stratify risk, facilitate early detection and optimize treatment plans.

Visit our website for more information about our products at www.aspirawh.com.

Forward-Looking Statements
This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995 including statements regarding expected timing and receipt of proceeds from the State of Connecticut Department of Economic Development loan. These statements involve a number of risks and uncertainties.  All statements other than statements of historical facts contained in this press release are forward-looking statements. Words such as “may,” “expects,” “intends,” “anticipates,” “believes,” “estimates,” “plans,” “seeks,” “could,” “should,” “continue,” “will,” “potential,” “projects” and similar expressions are intended to identify forward-looking statements.  These forward-looking statements speak only as of the date of this press release and are subject to a number of risks, uncertainties and assumptions, including those described in the section entitled “Risk Factors” in ASPIRA’s Annual Report on Form 10-K for the year ended December 31, 2019, as supplemented by the section entitled “Risk Factors” in ASPIRA’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and June 30, 2020. The events and circumstances reflected in ASPIRA’s forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.  ASPIRA expressly disclaims any obligation to update, amend or clarify any forward-looking statements to reflect events, new information or circumstances occurring after the date of this press release, except as required by law.


Investor Relations Contact:


Ashley R. Robinson
LifeSci Advisors, LLC
Tel 617-535-7742
[email protected]

           
  September 30,   December 31,
  2020     2019  
Assets          
Current assets:          
Cash and cash equivalents $ 18,836     $ 11,703  
Accounts receivable   848       924  
Prepaid expenses and other current assets   522       758  
Inventories   45       25  
Total current assets   20,251       13,410  
Property and equipment, net   593       353  
Right-of-use asset   421       52  
Other assets         13  
Total assets $ 21,265     $ 13,828  
           
Liabilities and Stockholders’ Equity          
Current liabilities:          
Accounts payable $ 1,315     $ 1,158  
Accrued liabilities   2,815       2,588  
Short-term debt   476       193  
Lease liability   9       39  
Total current liabilities   4,615       3,978  
Non-current liabilities:          
Long-term debt   1,678       1,099  
Lease liability   422       13  
Total liabilities   6,715       5,090  
Commitments and contingencies          
Stockholders’ equity:          
Common stock, par value $0.001 per share, 150,000,000 shares authorized at September 30, 2020 and December 31, 2019; 104,041,493 and 97,286,157 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively   104       97  
Additional paid-in capital   448,431       430,802  
Accumulated deficit   (433,985 )     (422,161 )
Total stockholders’ equity   14,550       8,738  
Total liabilities and stockholders’ equity $ 21,265     $ 13,828  

 

             
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2020     2019     2020     2019  
Revenue:                      
Product $ 1,239     $ 1,241     $ 3,192     $ 3,120  
Service         44       13       110  
Total revenue   1,239       1,285       3,205       3,230  
Cost of revenue(1):                      
Product   803       736       2,187       1,950  
Service   4       213       13       601  
Total cost of revenue   807       949       2,200       2,551  
Gross profit   432       336       1,005       679  
Operating expenses:                      
Research and development(2)   595       340       1,370       774  
Sales and marketing(3)   2,152       2,425       6,000       7,569  
General and administrative(4)   1,966       1,421       5,542       4,210  
Total operating expenses   4,713       4,186       12,912       12,553  
Loss from operations   (4,281 )     (3,850 )     (11,907 )     (11,874 )
Interest income, net   5       34       14       39  
Other income (expense), net   (11 )     (4 )     69       (15 )
Net loss $ (4,287 )   $ (3,820 )   $ (11,824 )   $ (11,850 )
Net loss per share – basic and diluted $ (0.04 )   $ (0.04 )   $ (0.12 )   $ (0.14 )
                               
Weighted average common shares used to compute basic and diluted net loss per common share   103,200,612       97,144,586       99,555,194       83,017,019  
                       
Non-cash stock-based compensation expense included in cost of revenue and operating expenses:                      
(1)  Cost of revenue $ 20     $ 20     $ 73     $ 57  
(2)  Research and development   16             17       4  
(3)  Sales and marketing   31       32       116       93  
(4)  General and administrative   343       243       915       738  

Acutus Medical Reports Third Quarter 2020 Results

CARLSBAD, Calif., Nov. 12, 2020 (GLOBE NEWSWIRE) — Acutus Medical, Inc. (“Acutus”) (Nasdaq: AFIB), an arrhythmia management company focused on improving the way cardiac arrhythmias are diagnosed and treated, today reported results for the third quarter of 2020.

Recent
Highlights:

  • Reported revenue of $3.2 million in the third quarter ended September 30, 2020, a 180% increase sequentially and a 391% increase over the same quarter last year.
  • Increased worldwide installed base of second generation AcQMap consoles to 37 as of September 30, 2020, up from 21 at the end of the prior quarter – bringing the total installed base of AcQMap consoles to 49 as of September 30, 2020.
  • Filled a key role with the addition of Dr. Steve Mickelson as our Chief Translational Science Officer. Dr. Mickelsen is a prominent figure in the emerging area of Pulsed Field Ablation.

Vince Burgess, President & CEO of Acutus, said, “In the third quarter we saw strong execution by our commercial team and made considerable progress on key development and operational fronts. Despite headwinds from COVID-19, we continued to add new customers and aggressively upgraded existing customers to our groundbreaking second-generation electrophysiology mapping system, AcQMap. Bringing on a new customer in our business requires extensive cross-functional collaboration with our customers and many members of our internal team. The growth of our installed base achieved this quarter demonstrates enthusiastic demand for our technology and terrific execution from our entire team during uniquely challenging times.   As we look to the future, we are highly confident that Acutus is well positioned for continued growth in the years ahead.”

Third
Quarter 2020 Financial Results

Revenue was $3.2 million for the third quarter of 2020, compared to $1.1 million for the prior quarter and $0.6 million in the third quarter last year. The improvement over the same quarter last year was driven by increased direct sales of Acutus disposables, sales of our AcQMap consoles, and distributor sales through our partner Biotronik as we continue to operationalize this foundational relationship.

Gross margin was negative 62% for the third quarter of 2020, compared with negative 251% in the same quarter last year. The improvement was driven by greater production volumes and efficiencies in labor and manufacturing overhead absorption when compared to the same period last year. Also affecting margins in the quarter were our first ever console sales that are paid for via long-term disposables commitment deals. These types of sales, which will be common at Acutus going forward, allocate a portion of the future disposables’ revenue stream and all of the console COGS at the time of the placement. It is typical for these transactions to result in unfavorable gross margins on the up-front placement of the console that is more than offset by a committed, predictable annuity stream of disposables sales in future quarters. We continue to make significant investments in our manufacturing infrastructure to support our aggressive launch expectations and position us to scale in-house production as our business grows. As volumes increase over time, and the benefit of console sales accrues, we expect to see continuous improvements to our margin profile.

Operating expenses were $24.3 million for the third quarter of 2020, compared with $29.5 million in the same quarter last year. The decrease was driven by a $15.0 million payment for the acquisition and in-licensing of the force sensing product line from Biotronik made during the third quarter of 2019. This decrease was partially offset by the expansion of our commercial team in conjunction with our full commercial launch, various R&D projects related to console enhancements and catheter development programs, and increased G&A costs incurred associated with our initial public offering and becoming a public company.

Net loss on a GAAP basis was $31.3 million for the third quarter of 2020 and net loss per share was $1.95 on a weighted average basic and diluted outstanding share count of 16.1 million, compared to $32.1 million and a net loss per share of $47.21 on a weighted average basic and diluted outstanding share count of 0.7 million in the same period of the prior year. Excluding non-cash stock-based compensation expense, remeasurement of our warrant liability, and changes in the fair value of contingent consideration, our non-GAAP net loss for the third quarter of 2020 was $21.1 million, or $0.91 per share, compared to $30.6 million, or $1.86 per share, after giving effect to the pro forma conversion of our convertible preferred stock for the third quarter of 2019.

Cash, cash equivalents, marketable securities and restricted cash were $167.0 million as of September 30, 2020, which includes the $166.3 million net proceeds from our IPO, which closed on August 10, 2020.

Outlook and COVID-19

Due to uncertainty surrounding the COVID-19 pandemic, Acutus Medical will not provide financial guidance for the remainder of 2020 at this time. Management will continue to evaluate its guidance policies and anticipates providing an update at the time of its fourth quarter earnings announcement, to the extent practicable, based on available information at that time.

Non-GAAP Financial Measures

This press release includes references to non-GAAP net loss and non-GAAP net loss per share, which are non-GAAP financial measures, to provide information that may assist investors in understanding the Company’s financial results and assessing its prospects for future performance. We believe these non-GAAP financial measures are important indicators of our operating performance because they exclude items that are non-cash accounting line items unrelated to, and may not be indicative of, our core operating results. These non-GAAP financial measures, as we calculate them, may not necessarily be comparable to similarly titled measures of other companies and may not be appropriate measures for comparing the performance of other companies relative to the Company. These non-GAAP financial results are not intended to represent and should not be considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP. To the extent we utilize such non-GAAP financial measures in the future, we expect to calculate them using a consistent method from period to period. A reconciliation of each of the most directly comparable GAAP financial measures to the non-GAAP financial measures has been provided under the heading “Reconciliation of GAAP results to Non-GAAP Results” in the financial statement tables attached to this press release.

Webcast and Conference Call Information

Acutus Medical will host a conference call to discuss the third quarter financial results after market close on Thursday, November 12, 2020 at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. The conference call can be accessed live over the phone (833) 570-1131 for U.S. callers or (914) 987-7078 for international callers, using conference ID: 6990208. The live webinar can be accessed at https://ir.acutusmedical.com.

About
Acutus
Medical, Inc.

Acutus Medical is an arrhythmia management company focused on improving the way cardiac arrhythmias are diagnosed and treated. Acutus is committed to advancing the field of electrophysiology with a unique array of products and technologies which will enable more physicians to treat more patients more efficiently and effectively. Through internal product development, acquisitions, and global partnerships, Acutus has established a global sales presence delivering a broad portfolio of highly differentiated electrophysiology products. Acutus Medical’s goal is to provide its customers with a complete solution for catheter-based treatment of cardiac arrhythmias in each of its geographic markets. Founded in 2011, Acutus is based in Carlsbad, California.

Caution Regarding Forward-Looking Statements

This press release includes statements that may constitute “forward-looking” statements, usually containing the words “believe,” “estimate,” “project,” “expect” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, the Company’s ability to continue to manage expenses and cash burn rate at sustainable levels, continued acceptance of the Company’s products in the marketplace, the effect of global economic conditions on the ability and willingness of customers to purchase its systems and the timing of such purchases, competitive factors, changes resulting from healthcare policy in the United States, including changes in government reimbursement of procedures, dependence upon third-party vendors and distributors, timing of regulatory approvals, the impact of the coronavirus (COVID-19) pandemic and our response to it, and other risks discussed in the Company’s periodic and other filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Investor Contact:

Caroline Corner
Westwicke ICR
D: 415-314-1725
[email protected]

Holly Windler
M: 619-929-1275
[email protected]

Acutus Medical, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

         
  September 30,   December 31,  
  2020   2019  
  (unaudited)      
ASSETS:        
Current assets:        
Cash and cash equivalents $ 58,302     $ 9,452    
Marketable securities, short-term   99,742       62,351    
Restricted cash   150       150    
Accounts receivable   1,893       263    
Inventory   10,932       8,424    
Prepaid expenses and other current assets   4,635       1,816    
Total current assets   175,654       82,456    
         
Marketable securities, long-term   8,789          
Property and equipment, net   9,940       4,427    
Right-of-use asset, net   1,838       2,341    
Intangible assets, net   3,780       4,110    
Goodwill   12,026       12,026    
Other assets   482       95    
Total assets $ 212,509     $ 105,455    
         
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)        
Current liabilities:        
Accounts payable $ 4,723     $ 3,882    
Accrued liabilities   6,500       10,076    
Contingent consideration, short-term   4,000       8,200    
Operating lease liabilities, short-term   907       833    
Common and preferred stock warrant liability         8,919    
Total current liabilities   16,130       31,910    
         
Operating lease liabilities, long-term   1,365       2,054    
Long-term debt   38,762       38,244    
Contingent consideration, long-term   3,600       5,700    
Other long-term liabilities   8          
Total liabilities   59,865       77,908    
         
Commitments and contingencies        
         
Convertible preferred stock        
         
         
Series A convertible preferred stock         3,059    
Series B convertible preferred stock         40,685    
Series C convertible preferred stock         74,575    
Series D convertible preferred stock         135,039    
         
Stockholders’ equity (deficit)        
Preferred stock            
Common stock   28       1    
Additional paid-in capital   484,162       33,252    
Accumulated deficit   (331,613 )     (259,034 )  
Accumulated other comprehensive income (loss)   67       (30 )  
Total stockholders’ equity (deficit)   152,644       (225,811 )  
Total liabilities, convertible preferred stock and stockholders’ equity (deficit) $ 212,509     $ 105,455    
         



Acutus Medical, Inc. and Subsidiaries


Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)
(Unaudited)

      Three Months Ended September 30,   Nine Months Ended September 30,  
      2020   2019   2020   2019  
  Revenue   $ 3,173     $ 646     $ 5,890     $ 2,167    
                     
  Costs and operating expenses:                  
  Cost of products sold     5,141       2,267       10,998       6,878    
  Research and development     8,343       5,865       24,492       15,489    
  Research and development – license acquired           15,000             15,000    
  Selling, general and administrative     15,833       7,978       35,193       18,998    
  Change in fair value of contingent consideration     118       700       (1,466 )     700    
  Total costs and operating expenses     29,435       31,810       69,217       57,065    
  Loss from operations     (26,262 )     (31,164 )     (63,327 )     (54,898 )  
                     
  Other income (expense):                  
  Change in fair value of warrant liability and embedded derivative     (3,683 )     (3 )     (5,555 )     (608 )  
  Loss on debt extinguishment           (49 )           (1,447 )  
  Interest income     23       525       393       733    
  Interest expense     (1,366 )     (1,394 )     (4,090 )     (20,905 )  
  Total other expense, net     (5,026 )     (921 )     (9,252 )     (22,227 )  
  Net loss   $ (31,288 )   $ (32,085 )   $ (72,579 )   $ (77,125 )  
                     
  Other comprehensive income (loss)                  
  Unrealized (loss) gain on marketable securities     (9 )     40       (50 )     47    
  Foreign currency translation adjustment     78       (45 )     147       (57 )  
  Comprehensive loss   $ (31,219 )   $ (32,090 )   $ (72,482 )   $ (77,135 )  
                     
  Net loss per common share, basic and diluted   $ (1.95 )   $ (47.21 )   $ (12.36 )   $ (115.66 )  
  Weighted average shares outstanding, basic and diluted     16,080,467       679,591       5,870,861       666,823    
                     



Acutus Medical, Inc. and Subsidiaries


Condensed Consolidated Statements of Cash Flows

(in thousands)
(Unaudited)

      Nine Months Ended September 30,  
      2020   2019  
  Cash flows from operating activities          
  Net loss   $ (72,579 )   $ (77,125 )  
  Adjustments to reconcile net loss to net cash used in operating activities:          
  Depreciation expense     1,754       1,676    
  Amortization of intangible assets     330       125    
  Stock-based compensation expense     9,272       2,174    
  Amortization of premiums/(accretion of discounts) on marketable securities, net     113       (100 )  
  Amortization of debt issuance costs     518       17,438    
  Amortization of right-of-use assets     507       470    
  Research and development – license acquired           15,000    
  Gain on disposal of property and equipment           (1 )  
  Loss on debt extinguishment           1,447    
  Change in fair value of warrant liability and embedded derivative     5,555       608    
  Change in fair value of contingent consideration     (1,466 )     700    
  Changes in operating assets and liabilities, net of effect from business combination:        
  Accounts receivable     (1,630 )     (697 )  
  Inventory     (1,865 )     (3,829 )  
  Prepaid expenses and other current assets     (2,729 )     (306 )  
  Other assets     (387 )     (8 )  
  Accounts payable     753       2,873    
  Accrued liabilities     1,423       9,268    
  Operating lease liabilities     (615 )     (536 )  
  Other long-term liabilities     8          
  Net cash used in operating activities     (61,038 )     (30,823 )  
             
  Cash flows from investing activities          
  Purchases of available-for-sale marketable securities     (108,528 )     (68,735 )  
  Sales of available-for-sale marketable securities     17,095          
  Maturities of available-for-sale marketable securities     45,000       11,550    
  Purchases of property and equipment     (7,822 )     (683 )  
  Purchase of research and development license           (10,000 )  
  Cash paid, net of cash acquired for the Rhythm Xience Acquisition           (3,000 )  
  Net cash used in investing activities     (54,255 )     (70,868 )  
             
  Cash flows from financing activities          
  Proceeds from issuance of debt and warrants           77,000    
  Repayment of debt           (15,000 )  
  Payment of issuance and extinguishment costs related to debt           (2,332 )  
  Payment of contingent consideration     (2,636 )        
  Proceeds from issuance of convertible preferred stock, net of issuance costs           66,567    
  Proceeds from issuance of common stock upon IPO, net of issuance costs     166,286          
  Proceeds from stock options exercises     350       76    
  Net cash provided by financing activities     164,000       126,311    
             
  Effect of exchange rate changes on cash, cash equivalents and restricted cash     143       (50 )  
             
  Net change in cash, cash equivalents and restricted cash     48,850       24,570    
  Cash, cash equivalents and restricted cash, at the beginning of the period     9,602       9,775    
  Cash, cash equivalents and restricted cash, at the end of the period   $ 58,452     $ 34,345    
             

 



Acutus Medical, Inc. and Subsidiaries


Reconciliation of GAAP Results to Non-GAAP Results

(in thousands, except share and per share data)
(Unaudited)

             
      Three Months Ended September 30,   Nine Months Ended September 30,  
      2020   2019   2020   2019  
  GAAP net loss   $ (31,288 )   $ (32,085 )   $ (72,579 )   $ (77,125 )  
  Stock-based compensation     6,374       812       9,272       2,174    
  Change in fair value of contingent consideration     118       700       (1,466 )     700    
  Change in fair value of warrant liability and embedded derivative     3,683       3       5,555       608    
  Non-GAAP net loss   $ (21,113 )   $ (30,569 )   $ (59,218 )   $ (73,643 )  
             
             
             
                     
  Denominator              
  Weighted average shares of common stock outstanding used in GAAP per share calculations     16,080,467       679,591       5,870,861       666,823    
  Adjustments to reflect the assumed conversion of convertible preferred stock (1)     7,205,624       15,712,489       13,373,360       11,290,142    
  Shares used in non-GAAP per share calculations     23,286,091       16,392,080       19,244,221       11,956,965    
                     
  GAAP net loss per share   $ (1.95 )   $ (47.21 )   $ (12.36 )   $ (115.66 )  
  Non-GAAP net loss per share   $ (0.91 )   $ (1.86 )   $ (3.08 )   $ (6.16 )  
                     
  (1) Assumes the conversion of outstanding shares of convertible preferred stock into shares of common stock as if such conversion had occurred at the beginning of the period or their issuance dates, if later.

Inari Medical Appoints Kevin Strange as VP of Strategy and Business Development and Angela Ahmad as General Counsel

IRVINE, Calif., Nov. 12, 2020 (GLOBE NEWSWIRE) — Inari Medical, Inc. (NASDAQ: NARI) (“Inari”), a commercial-stage medical device company focused on developing products to treat and transform the lives of patients suffering from venous diseases, today announced the appointment of Kevin Strange as VP of Strategy and Business Development, and Angela Ahmad as General Counsel. In his role, Mr. Strange will be responsible for Inari’s corporate strategy and business development initiatives. Ms. Ahmad has over 20 years of corporate and securities experience and will oversee all aspects of the Company’s legal activities in her role.

“We could not be more excited for Kevin and Angela to join us.  Kevin comes to us with deep experience not only in strategy and business development, but also in the peripheral vascular space more broadly.  He will be highly valuable as we explore opportunities to address important unmet needs in the venous space and immediate adjacencies,” said Bill Hoffman, Chairman and CEO. “Angela brings to the company deep experience advising publicly listed companies on legal matters and she will be an invaluable asset. We eagerly welcome her guidance and counsel as part of our leadership team.”

Mr. Strange joins Inari with over 15 years of medical device experience, most recently serving as the Director of Business Development for the Peripheral Interventions division of Boston Scientific where he led multiple acquisition, divestiture and venture capital transactions. Prior to joining Boston Scientific, Mr. Strange was an equity research analyst at Bank of America Merrill Lynch and Wells Fargo Securities covering the Medical Supplies & Devices sector. He began his career in the medical device field in clinical support and sales roles at Medtronic.

Prior to joining Inari, Ms. Ahmad served as Deputy General Counsel of CoreLogic, Inc., where she held various roles including overseeing the corporate governance, M&A and securities functions. Prior to CoreLogic, Ms. Ahmad served as an associate at Latham & Watkins, LLP, where she advised clients on corporate transactions, including equity and debt financings. Ms. Ahmad has significant international legal experience, having spent five years in London, England with Latham & Watkins and Fried Frank.

About Inari Medical, Inc.

Inari Medical, Inc. is a commercial-stage medical device company focused on developing products to treat and transform the lives of patients suffering from venous diseases.

Inari is focused on treating venous thromboembolism and improving the quality of life of patients suffering from this disease by safely and effectively removing blood clots. Inari has developed two minimally invasive, novel catheter-based mechanical thrombectomy devices that are designed to remove large clots from large vessels and eliminate the need for thrombolytic drugs. The ClotTriever system is 510(k)-cleared by the FDA for thrombectomy in the peripheral vessels and is used to treat patients suffering from deep vein thrombosis. The FlowTriever system is 510(k)-cleared by the FDA for the treatment of pulmonary embolism.

Forward Looking Statements

Statements in this press release contain “forward-looking statements” that are subject to substantial risks and uncertainties. Forward-looking statements contained in this press release may be identified by the use of words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements are based on Inari’s current expectations, forecasts and assumptions, are subject to inherent uncertainties, risks and assumptions that are difficult to predict and actual outcomes and results could differ materially due to a number of factors. These and other risks and uncertainties include those described more fully in the section titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and elsewhere in its Quarterly Report on Form 10-Q for the period ended June 30, 2020 and in its other reports filed with the U.S. Securities and Exchange Commission. Forward-looking statements contained in this announcement are based on information available to Inari as of the date hereof and are made only as of the date of this release. Inari undertakes no obligation to update such information except as required under applicable law. These forward-looking statements should not be relied upon as representing Inari’s views as of any date subsequent to the date of this press release. In light of the foregoing, investors are urged not to rely on any forward-looking statement in reaching any conclusion or making any investment decision about any securities of Inari.

Investor Contact:

Westwicke Partners
Caroline Corner
Phone +1-415-202-5678
[email protected]

Usio Announces Record Third Quarter 2020 Financial Results

Posts All-Time Record Quarterly Revenues

SAN ANTONIO, Nov. 12, 2020 (GLOBE NEWSWIRE) — Usio, Inc. (Nasdaq: USIO), an integrated electronic payment solutions provider, today announced financial results for the third quarter of 2020, which ended September 30, 2020.

“I am pleased to report all-time record quarterly revenues for the third quarter of 2020,” commented Louis Hoch, President and Chief Executive Officer of Usio.  “Our ability to achieve the Company’s highest quarterly revenue in this challenging economic environment is a testament to the strength of our diverse payments channel strategy — offering ACH, Prepaid and Card Processing services to the growing electronic payments market — as well as to the steadfast and unwavering commitment we have made through continued investment in our growth initiatives, PayFac and Prepaid, over the past several years.  These results put us back on the strong growth trajectory that was temporarily interrupted by COVID-19 in the second quarter.

Card Processing and Prepaid revenues were up 14% and 225%, respectively, compared to the same period of 2019, with growth accelerating sequentially from the second quarter.  We continue to penetrate these markets with innovative technology that make payments simple.  Our prepaid platform has been widely adopted by municipal, charitable and community organizations to distribute government assistance funds, and this success is creating opportunities in adjacent and new markets.  PayFac is gaining traction and the momentum is continuing to build.  In September, we set a record for new monthly merchants added on our PayFac platform.  Net new merchant additions have been growing week by week.  ACH was also up sequentially from the second quarter, although the consumer lending market remains weak.  We are continuing to grow our ACH customers, by both adding new accounts and keeping attrition at a minimum, which we believe will be a key to our continued success as our markets recover.  Record RCC and PIN Debit volumes in the quarter also continue to contribute and have experienced sequential revenue growth in every quarter of the year.  And, by keeping operating expenses relatively flat, our third quarter results reflect positive improvements (reductions) in our Adjusted EBITDA loss and Net Loss from both the prior year quarter as well as the second quarter of this year.  During the quarter we also successfully completed two equity offerings, giving us one of the strongest balance sheets and most distinguished group of institutional investors in the company’s history.  Our strategy has always encompassed a non-organic growth component, and with this fresh capital we now have the resources to not only support our working capital and general corporate needs, but to invest in our growth businesses and undertake accretive acquisitions.

Despite the many challenges encountered throughout 2020, we are on pace for year-over-year revenue and profitability growth, ending the year with one of our strongest balance sheets ever. We believe this provides a solid foundation for continued growth, both organically as well as through strategic, accretive acquisitions in the future.”

Louis Hoch continued, “as always, the health and safety of our employees as well as those around us remains a priority in everything we do.”


Third


Quarter 2020


Financial Summary

Revenues for the quarter ended September 30, 2020 increased by 15% to $8.1 million compared to the same period last year, primarily as a result of strong year over year growth in our prepaid and credit card businesses offset by softness in our consumer lending ACH business. Gross profits increased by 11% to $1.7 million versus the same period last year and gross margins declined by 70 basis points to 21.2% for the quarter ended September 30, 2020 versus 21.8% in the prior year period, primarily driven by a shift in product mix.

Other selling, general and administrative expenses were flat at $2.0 million for the quarter ended September 30, 2020 compared to the same period last year.  For the third quarter of 2020, the operating loss was $0.9 million versus a loss of $1.2 million in the prior year.

Adjusted EBITDA was a loss of $253,921 compared to a loss of $421,459 in the third quarter of 2019, a 40% improvement.  

The company reported a net loss of $0.9 million ($0.06 per share) for the quarter ended September 30, 2020, versus a net loss of $1.2 million ($0.09 per share) for the same period in the prior year.


Nine Months Ended 


September 30, 2020


 Financial Summary

Revenues for the nine months ended September 30, 2020 were $22.9 million, up 10% from $20.8 million from the same period last year. The revenue growth in 2020 is all organic and was derived primarily from our card services business that is anchored by PayFac.  Our prepaid division also contributed to the strong increase. Gross profits in the first nine months of the year were $4.9 million up 11% from $4.4 million in the comparable period of 2019.  Gross margins for the first nine months of 2020 increased by 20 basis points to 21.6% from 21.4% over the same period in 2019.

Other selling, general and administrative expenses increased by 6% to $6.0 million compared to $5.6 million for the same period last year reflecting our continued investment in our PayFac and Prepaid growth initiatives. 

Adjusted EBITDA for year to date period was a loss of $1.0 million compared to a loss of $1.2 million for the same period of 2019, a 12% improvement.

The Company reported a net loss of $3.1 million ($0.22 per share) for the nine months ended September 30, 2020, compared to a net loss of $3.6 million ($0.28 per share) for the same period in the prior year.

Usio continues to be in solid financial condition with $11.4 million in cash and cash equivalents at September 30, 2020. 


Conference Call and Webcast

Usio, Inc.’s management will host a conference call with a live webcast on Friday, November 13, 2020 at 11:00 am Eastern time to provide a business update.  To listen to the conference call, interested parties within the U.S. should call +1-844-883-3890. International callers should call +1-412-317-9246. All callers should ask for the Usio conference call. The conference call will also be available through a live webcast, which can be accessed via the company’s website at www.usio.com/invest.

A replay of the call will be available approximately one hour after the end of the call through November 27, 2020. The replay can be accessed via the Company’s website or by dialing +1-877-344-7529 (U.S.) or +1-412-317-0088 (international). The replay conference playback code is 10149713.
  
About Usio, Inc.

Usio, Inc. (USIO), a leading integrated payment solutions provider, offers a wide range of payment solutions to merchants, billers, banks, service bureaus, and card issuers. The Company operates credit, debit/prepaid, and ACH payment processing platforms to deliver convenient, world-class payment solutions and services to their clients. The strength of the Company lies in its ability to provide tailored solutions for card issuance, payment acceptance, and bill payments as well as its unique technology in the prepaid sector. Usio is headquartered in San Antonio, Texas, and has offices in Austin, Texas, and Franklin, Tennessee, just outside of Nashville. Websites: www.usio.comwww.singularpayments.comwww.payfacinabox.comwww.akimbocard.com and www.ficentive.com. Find us on Facebook® and Twitter.


About Non-GAAP Financial Measures


This press release includes non-GAAP financial measures, EBITDA and adjusted EBITDA, as defined in Regulation G of the Securities and Exchange Act of 1934, as amended. The Company reports its financial results in compliance with GAAP, but believes that also discussing non-GAAP measures provides investors with financial measures it uses in the management of its business. The Company defines EBITDA as operating income (loss), before interest, taxes, depreciation and amortization of intangibles. The Company defines adjusted EBITDA as EBITDA, as defined above, plus non-cash stock option costs and certain non-recurring items, such as acquisitions. These measures may not be comparable to similarly titled measures reported by other companies. Management uses EBITDA and adjusted EBITDA as indicators of the Company’s operating performance and ability to fund acquisitions, capital expenditures and other investments and, in the absence of refinancing options, to repay debt obligations.

Management believes EBITDA and adjusted EBITDA are helpful to investors in evaluating the Company’s operating performance because non-cash costs and other items that management believes are not indicative of its results of operations are excluded. EBITDA and adjusted EBITDA are supplemental non-GAAP measures, which have limitations as an analytical tool. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Non-GAAP financial measures do not reflect a comprehensive system of accounting, may differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. For a description of our use of EBITDA and adjusted EBITDA, and a reconciliation of EBITDA and adjusted EBITDA to operating income (loss), see the section of this press release titled “Non-GAAP Reconciliation.”

FORWARD-LOOKING STATEMENTS DISCLAIMER

Except for the historical information contained herein, the matters discussed in this release include forward-looking statements which are covered by safe harbors. Those statements include, but may not be limited to, all statements regarding management’s intent, belief and expectations, such as statements concerning our future and our operating and growth strategy. These forward-looking statements are identified by the use of words such as “believe,” “intend,” “continue,” “anticipate,” “schedule,” and “expect” among others. Forward-looking statements in this press release are subject to certain risks and uncertainties inherent in the Company’s business that could cause actual results to vary, including risks related to the COVID-19 pandemic and its effect on the economy, risks related to the realization of the anticipated opportunities from the Singular acquisition, the management of the Company’s growth, the loss of key resellers, the relationships with the Automated Clearinghouse network, bank sponsors, third-party card processing providers and merchants, the security of our software, hardware and information, the volatility of the stock price, the need to obtain additional financing, risks associated with new tax legislation, and compliance with complex federal, state and local laws and regulations, and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission including its annual report on Form 10-K for the fiscal year ended December 31, 2019. One or more of these factors have affected, and in the future, could affect the Company’s businesses and financial results in the future and could cause actual results to differ materially from plans and projections. The Company believes that the assumptions underlying the forward-looking statements included in this release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the objectives and plans will be achieved. All forward-looking statements made in this release are based on information presently available to management. The Company assumes no obligation to update any forward-looking statements, except as required by law.

Contact:

Joe Hassett, Investor Relations
[email protected]
610-228-2110

  

USIO, INC.

CONSOLIDATED BALANCE SHEETS

    September 30, 2020     December 31, 2019  
    (Unaudited)          
ASSETS                
Cash and cash equivalents   $ 11,405,119     $ 2,137,580  
Accounts receivable, net     1,219,370       1,274,001  
Settlement processing assets     24,079,975       38,906,780  
Prepaid card load assets     7,906,580       528,434  
Prepaid expenses and other     185,109       183,575  
Current assets before merchant reserves     44,796,153       43,030,370  
Merchant reserves     8,234,404       10,016,904  
Total current assets     53,030,557       53,047,274  
                 
Property and equipment, net     1,729,614       1,557,521  
                 
Other assets:                
Intangibles, net     1,926,426       2,676,427  
Deferred tax asset     1,394,000       1,394,000  
Operating lease right-of-use assets     2,308,736       2,480,902  
Other assets     422,418       404,055  
Total other assets     6,051,580       6,955,384  
                 
Total Assets   $ 60,811,751     $ 61,560,179  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable   $ 405,334     $ 419,849  
Accrued expenses     1,303,757       1,360,551  
Operating lease liabilities, current portion     236,700       356,184  
Settlement processing obligations     24,079,975       38,906,780  
Prepaid card load obligations     7,906,580       528,434  
Deferred revenues     83,824       123,529  
PPP Loan payable, current portion     342,096        
Current liabilities before merchant reserve obligations     34,358,266       41,695,327  
Merchant reserve obligations     8,234,404       10,016,904  
Total current liabilities     42,592,670       51,712,231  
                 
Non-current liabilities:                
PPP Loan payable, non-current portion     471,404        
Operating lease liabilities, current portion     2,230,639       2,279,613  
Total liabilities     45,294,713       53,991,844  
                 
Stockholders’ equity:                
Preferred stock, $0.01 par value, 10,000,000 shares authorized; -0- shares outstanding at September 30, 2020 (unaudited) and December 31, 2019, respectively            
Common stock, $0.001 par value, 200,000,000 shares authorized; 25,887,785 and 18,224,577 issued, and 24,665,486 and 17,104,998 outstanding at September 30, 2020 (unaudited) and December 31, 2019, respectively     194,318       186,656  
Additional paid-in capital     88,392,782       77,055,273  
Treasury stock, at cost; 1,222,299 and 1,119,579 shares at September 30, 2020 (unaudited) and December 31, 2019, respectively     (2,065,763 )     (1,885,452 )
Deferred compensation     (5,793,116 )     (5,636,154 )
Accumulated deficit     (65,211,183 )     (62,151,988 )
Total stockholders’ equity     15,517,038       7,568,335  
                 
Total Liabilities and Stockholders’ Equity   $ 60,811,751     $ 61,560,179  
 
 

USIO, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 (UNAUDITED)

    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
    2020     2019     2020     2019  
                                 
Revenues   $ 8,137,077     $ 7,087,732     $ 22,869,309     $ 20,833,143  
Cost of services     6,414,807       5,539,314       17,933,089       16,383,149  
Gross profit     1,722,270       1,548,418       4,936,220       4,449,994  
                                 
Selling, general and administrative:                                
Stock-based compensation     267,223       315,259       903,326       954,770  
Other SG&A expenses     1,976,191       1,969,877       5,955,221       5,602,171  
Depreciation and amortization     390,216       491,749       1,160,255       1,475,291  
Total operating expenses     2,633,630       2,776,885       8,018,802       8,032,232  
                                 
Operating (loss)     (911,360 )     (1,228,467 )     (3,082,582 )     (3,582,238 )
                                 
Other income and (expense):                                
Interest income     10,157       20,781       22,800       66,475  
Other income (expense)     186       608       912       185  
Other income and (expense), net     10,343       21,389       23,712       66,660  
                                 
(Loss) before income taxes     (901,017 )     (1,207,078 )     (3,058,870 )     (3,515,578 )
Income tax expense     35,000       31,956       325       71,956  
                                 
Net (Loss)   $ (936,017 )   $ (1,239,034 )   $ (3,059,195 )   $ (3,587,534 )
                                 
Earnings (Loss) Per Share                                
Basic earnings (loss) per common share:   $ (0.06 )   $ (0.09 )   $ (0.22 )   $ (0.28 )
Diluted earnings (loss) per common share:   $ (0.06 )   $ (0.09 )   $ (0.22 )   $ (0.28 )
Weighted average common shares outstanding                                
Basic     15,474,171       13,054,962       13,924,803       12,906,206  
Diluted     15,474,171       13,054,962       13,924,803       12,906,206  
                                 
                                 

USIO, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

    Nine Months Ended  
    September 30,
2020
    September 30,
2019
 
Operating Activities                
Net (loss)   $ (3,059,195 )   $ (3,587,534 )
Adjustments to reconcile net (loss) to net cash provided (used) by operating activities:                
Depreciation     410,254       725,291  
Amortization     750,001       750,000  
Non-cash stock-based compensation     903,326       954,770  
Amortization of warrant costs     26,958       26,955  
Changes in operating assets and liabilities:                
Accounts receivable     54,631       55,504  
Prepaid expenses and other     (1,534 )     (111,230 )
Operating lease right-of-use assets     172,166       (2,547,803 )
Other assets     (18,363 )     (26,665 )
Accounts payable and accrued expenses     (71,309 )     294,717  
Operating lease liabilities     (168,458 )     2,700,742  
Prepaid card load obligations     7,378,146       189,854  
Merchant reserves     (1,782,500 )     (2,443,899 )
Deferred revenue     (39,705 )     116,765  
Deferred rent           (79,748 )
Net cash provided (used) by operating activities     4,554,418       (2,982,281 )
                 
Investing Activities                
Purchases of property and equipment     (582,347 )     (536,405 )
Net cash (used) by investing activities     (582,347 )     (536,405 )
                 
Financing Activities                
Proceeds from PPP Loan Program     813,500        
Proceeds from public offering, net of expenses     7,257,925       1,793,905  
Proceeds from private offering     3,000,000        
Purchases of treasury stock     (180,311 )     (52,584 )
Net cash provided by financing activities     10,891,114       1,741,321  
                 
Change in cash, cash equivalents, prepaid card load assets and merchant reserves     14,863,185       (1,777,365 )
Cash, cash equivalents, prepaid card load assets and merchant reserves, beginning of year     12,682,918       15,340,980  
                 
Cash, Cash Equivalents, Prepaid Card Load Assets and Merchant Reserves, End of Period   $ 27,546,103     $ 13,563,615  
                 
Supplemental disclosures of cash flow information                
Cash paid during the period for:                
Interest   $     $  
Income taxes     93,525       82,206  
Non-cash transactions:                
Issuance of deferred stock compensation     1,559,520        
                 
                 

USIO, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)
 

    Common Stock     Additional
Paid- In
    Treasury     Deferred     Accumulated     Total
Stockholders’
 
    Shares     Amount     Capital     Stock     Compensation     Deficit     Equity  
                                                         
Balance at December 31, 2019     18,224,577     $ 186,656     $ 77,055,273     $ (1,885,452 )   $ (5,636,154 )   $ (62,151,988 )   $ 7,568,335  
                                                         
Issuance of common stock under equity incentive plan     51,000       51       59,440                         59,491  
Warrant compensation costs                 8,985                         8,985  
Deferred compensation amortization                             228,219             228,219  
Purchase of treasury stock                       (26,629 )                 (26,629 )
Net (loss) for the period                                   (835,009 )     (835,009 )
                                                         
Balance at March 31, 2020     18,275,577     $ 186,707     $ 77,123,698     $ (1,912,081 )   $ (5,407,935 )   $ (62,986,997 )   $ 7,003,392  
                                                         
Issuance of common stock under equity incentive plan     1,500,544       1,500       1,641,304             (1,559,520 )           83,284  
Warrant compensation costs                 8,988                         8,988  
Deferred compensation amortization                             267,207             267,207  
Purchase of treasury stock                       (55,819 )                 (55,819 )
Net (loss) for the period                                   (1,288,169 )     (1,288,169 )
                                                         
Balance at June 30, 2020     19,776,121     $ 188,207     $ 78,773,990     $ (1,967,900 )   $ (6,700,248 )   $ (64,275,166 )   $ 6,018,883  
                                                         
Issuance of common stock under equity incentive plan     32,323       32       149,961                         149,993  
Warrant compensation costs                 8,985                         8,985  
Cashless warrant exercise     27,051       27       (27 )                        
Reversal of deferred compensation amortization that did not vest     (450,000 )     (450 )     (791,550 )           594,900             (197,100 )
Issuance of common stock, public offering     4,705,883       4,705       7,253,220                         7,257,925  
Issuance of common stock, private offering     1,796,407       1,797       2,998,203                         3,000,000  
Deferred compensation amortization                             312,232             312,232  
Purchase of treasury stock                       (97,863 )                 (97,863 )
Net (loss) for the period                                   (936,017 )     (936,017 )
                                                         
Balance at September 30, 2020     25,887,785     $ 194,318     $ 88,392,782     $ (2,065,763 )   $ (5,793,116 )   $ (65,211,183 )   $ 15,517,038  
                                                         
Balance at December 31, 2018     17,129,680     $ 185,561     $ 74,568,627     $ (1,813,546 )   $ (6,270,675 )   $ (57,036,241 )   $ 9,633,726  
                                                         
Issuance of common stock, public offering     769,230       769       1,793,136                         1,793,905  
Issuance of common stock under equity incentive plan     62,222       62       58,551                         58,613  
Warrant compensation cost                 8,985                         8,985  
Deferred compensation amortization                             224,795             224,795  
Purchase of treasury stock                       (21,822 )                 (21,822 )
Net (loss) for the period                                   (1,072,889 )     (1,072,889 )
                                                         
Balance at March 31, 2019     17,961,132     $ 186,392     $ 76,429,299     $ (1,835,368 )   $ (6,045,880 )   $ (58,109,130 )   $ 10,625,313  
                                                         
Issuance of common stock under equity incentive plan     53,445       53       133,462                         133,515  
Warrant compensation cost                 8,985                         8,985  
Deferred compensation amortization                             222,585             222,585  
Reversal of deferred stock compensation that did not vest     (6,000 )     (6 )     (13,254 )           13,260              
Purchase of treasury stock                       (28,693 )                 (28,693 )
Net (loss) for the period                                   (1,275,611 )     (1,275,611 )
                                                         
Balance at June 30, 2019     18,008,577     $ 186,439     $ 76,558,492     $ (1,864,061 )   $ (5,810,035 )   $ (59,384,741 )   $ 9,686,094  
                                                         
Issuance of common stock under equity incentive plan     2,500       3       92,483                         92,486  
Warrant compensation cost                 8,985                         8,985  
Deferred compensation amortization                             224,464             224,464  
Reversal of deferred stock compensation that did not vest                 (1,691 )                       (1,691 )
Purchase of treasury stock                       (2,069 )                 (2,069 )
Net (loss) for the period                                   (1,239,034 )     (1,239,034 )
                                                         
Balance at September 30, 2019     18,011,077     $ 186,442     $ 76,658,269     $ (1,866,130 )   $ (5,585,571 )   $ (60,623,775 )   $ 8,769,235  
 
 

USIO, INC

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED)

    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
    2020     2019     2020     2019  
                                 
Reconciliation from Operating (Loss) to Adjusted EBITDA:                                
Operating (Loss)   $ (911,360 )   $ (1,228,467 )   $ (3,082,582 )   $ (3,582,238 )
Depreciation and amortization     390,216       491,749       1,160,255       1,475,291  
EBITDA     (521,144 )     (736,718 )     (1,922,327 )     (2,106,947 )
Non-cash stock-based compensation expense, net     267,223       315,259       903,326       954,770  
Adjusted EBITDA   $ (253,921 )   $ (421,459 )   $ (1,019,001 )   $ (1,152,177 )
                                 
                                 
Calculation of Adjusted EBITDA margins:                                
Revenues   $ 8,137,077     $ 7,087,732     $ 22,869,309     $ 20,833,143  
Adjusted EBITDA     (253,921 )     (421,459 )     (1,019,001 )     (1,152,177 )
Adjusted EBITDA margins     (3.1 )%     (5.9 )%     (4.5 )%     (5.5 )%

Capricor Therapeutics Reports Third Quarter 2020 Financial Results and Provides Corporate Update


Exosome Platform


Technology


-Announced Positive Preclinical Data
for Multivalent Exosome-mRNA Vaccine For COVID-19-


Novel
Vaccine
Induce
d
Long-Lasting Immunity to Multiple SARS-CoV-2 Proteins


-Development of Safe, Non-toxic Exosome Formulation Capable of Delivering Functional mRNA in vitro and in vivo-


Platform Expansion Underway Using Engineered Exosomes


Duchenne Muscular Dystrophy Program


-In Discussions with FDA on Next Steps in Pathway Forward-


CAP-1002 for COVID-19



P
atient
S
creening
U
nderway
in Randomized, Double-Blind, Placebo-Controlled INSPIRE Study-


To Host Conference Call and Webcast
Today
at 4:30 p.m. ET

LOS ANGELES, Nov. 12, 2020 (GLOBE NEWSWIRE) — Capricor Therapeutics, Inc. (NASDAQ: CAPR), a clinical-stage biotechnology company focused on the discovery, development and commercialization of first-in-class cell and exosome-based therapeutics for the treatment and prevention of a variety of diseases and disorders, announced today its financial results for the third quarter ending September 30, 2020 and provided a corporate update.

“The Company’s development and achievements in the third quarter have been encouraging on multiple levels. We have continued to build momentum with our exosome platform technology as well as with our CAP-1002 program. The pandemic has provided a unique opportunity for the development of a vaccine candidate but also for the use of CAP-1002 as a potential therapeutic,” said Linda Marbán, Ph.D., Capricor’s president and chief executive officer. 

“We are advancing two separate and novel vaccine programs. Our strategy has evolved from our original plan to use exosomes from our cell as drug delivery vehicles to creating exosomes from multiple cell types that are readily available to build products that can be designed to address targets where delivery has proved to be challenging. We are now leveraging thought leaders and our own expertise to direct the development of exosome-based vaccines and exosome-based therapeutics. We expect significant pipeline expansion and will be seeking partnering opportunities in the months ahead to further cement our rebranding. I have never been more excited at the possibilities for Capricor,” Dr. Marbán added.

The Company continues the development of our late-stage clinical asset, CAP-1002, for the treatment of advanced stages of DMD, and is currently in discussions with potential partners for this program. The FDA has continued to encourage us to conduct a Phase III study, however at this time, Capricor continues to work with FDA to explore alternative pathways forward.

Capricor is currently screening patients for its INSPIRE Phase II study, which is designed to assess the ability of CAP-1002 to modulate the cytokine storm and attenuate the sequelae associated with severe COVID-19. While other therapeutics are in testing for early and much later stage COVID-19, there are very few options for those with severe disease at risk for ventilation. Based on our preclinical data, as well as the data from our emergency use authorization program, CAP-1002 is poised to potentially be an important tool in the toolbox to treat severe COVID-19.

“We are pleased to deliver an update of those accomplishments today focused on our engineered exosome platform, DMD and COVID-19 programs and our anticipated milestones,” added Dr. Marbán.

Third
Quarter
Highlights and Recent Developments


Engineered


Exosome


s


Platform

  • Announced positive preclinical data for multivalent exosome-mRNA Vaccine for COVID-19
    • Development of safe, non-toxic exosome formulation capable of delivering functional mRNA in vitro and in vivo
    • Creation of a multiplexed exosome-RNA vaccine that expresses viral antigens engineered to induce cellular immunity and antibody responses to multiple proteins of SARS-CoV-2
      • Demonstrated persistent cellular immune responses to the SARS-CoV-2 N and S proteins
      • Demonstrated moderate but sustained antibody responses to the SARS-CoV-2 N and S proteins
  • Generated exosome-based VLPs (virus like particles) with 4 viral antigens expressed on the surface of SARS-CoV-2
  • Advanced exosome-based vaccine candidates into animal studies


Duchenne Muscular Dystrophy Program

  • Presented positive final 12-month results from the HOPE-2 Phase II study at the International World Muscle Society Virtual Congress 2020
  • In discussions with FDA and potential partners to determine next steps and pathway forward


CAP-1002 for


COVID-19

  • Initiated patient screening for INSPIRE study
  • FDA Acceptance of Capricor’s IND Application for Phase II INSPIRE study

Anticipated Events and
Targeted
Milestones
Into 2021

  • Plan to initiate patient enrollment of Phase II INSPIRE study in patients in severe or critical condition with COVID-19
  • Plan to meet with FDA in PRE-IND meeting to discuss next steps in exosome mRNA vaccine clinical strategy
  • Plan to publish additional preclinical data on exosomes platform
  • Plan to announce continued pipeline expansion with exosome platform
  • Plan to announce updates on INSPIRE study
  • Continue discussions with FDA on DMD program
  • Continue to pursue partnership opportunities for pipeline products
  • Continue to pursue grant funding opportunities for pipeline products

Third
Quarter Financial Results

The Company reported a net loss of approximately $3.9 million, or $0.20 per share, for the third quarter of 2020, compared to a net loss of approximately $1.6 million, or $0.43 per share, for the third quarter of 2019.

As of September 30, 2020, the Company’s cash, cash equivalents and marketable securities totaled approximately $35.3 million, compared to approximately $9.9 million on December 31, 2019. Additionally, in the third quarter of 2020, Capricor raised approximately $2.0 million in net proceeds at an average price of approximately $5.87 per share under its at-the-market offering program. 

Conference Call and Webcast Details

To participate in the conference call, please dial 877-451-6152 (Domestic/Toll-Free) or 201-389-0879 (International) and reference the conference ID: 13712434        

To participate via a webcast, please visit: http://public.viavid.com/index.php?id=142179

The webcast will be archived for approximately 30 days and will be available at:  http://capricor.com/news/events/.

About Capricor Therapeutics

Capricor Therapeutics, Inc. (NASDAQ: CAPR) is a clinical-stage biotechnology company focused on the discovery, development and commercialization of first-in-class cell and exosome-based therapeutics for the treatment and prevention of diseases. Capricor’s lead candidate, CAP-1002, is an allogeneic cell therapy that is currently in clinical development for the treatment of Duchenne muscular dystrophy and the cytokine storm associated with COVID-19. Capricor is also investigating the field of extracellular vesicles and exploring the potential of exosome-based candidates to treat or prevent a variety of disorders. We are now developing two potential vaccines for COVID-19 as part of our exosome platform. For more information, visit www.capricor.com and follow the Company on FacebookInstagram and Twitter.

Cautionary Note Regarding Forward-Looking Statements

Statements in this press release regarding the efficacy, safety, and intended utilization of Capricor’s product candidates; the initiation, conduct, size, timing and results of discovery efforts and clinical trials; the pace of enrollment of clinical trials; plans regarding regulatory filings, future research and clinical trials; regulatory developments involving products, including the ability to obtain regulatory approvals or otherwise bring products to market; plans regarding current and future collaborative activities and the ownership of commercial rights; scope, duration, validity and enforceability of intellectual property rights; future royalty streams, revenue projections; expectations with respect to the expected use of proceeds from the recently completed offerings and the anticipated effects of the offerings; and any other statements about Capricor’s management team’s future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “could,” “anticipates,” “expects,” “estimates,” “should,” “target,” “will,” “would” and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements. More information about these and other risks that may impact Capricor’s business is set forth in Capricor’s Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the Securities and Exchange Commission on March 27, 2020 and in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 as filed with the Securities and Exchange Commission on August 10, 2020. All forward-looking statements in this press release are based on information available to Capricor as of the date hereof, and Capricor assumes no obligation to update these forward-looking statements.

CAP-1002 is an Investigational New Drug and is not approved for any indications. None of Capricor’s exosome-based candidates have been approved for clinical investigation.

For more information, please contact:

Media Contact:

Caitlin Kasunich / Raquel Cona
KCSA Strategic Communications
[email protected] / [email protected] 
212.896.1241 / 212.896.1204

Investor Contact:

Joyce Allaire 
LifeSci Advisors, LLC
[email protected] 
617.435.6602

Company Contact:

AJ Bergmann, Chief Financial Officer 
[email protected] 
310.358.3200

 
 
CAPRICOR THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)    
                 
    Three months ended September 30,   Nine months ended September 30,
      2020       2019       2020       2019  
                                 
REVENUE                                
Revenue   $ 16,863     $ 142,071     $ 252,420     $ 782,928  
                                 
TOTAL REVENUE     16,863       142,071       252,420       782,928  
                                 
OPERATING EXPENSES                                
Research and development     2,629,267       857,764       5,711,896       4,313,056  
General and administrative     1,301,673       911,968       4,049,955       2,720,391  
                                 
TOTAL OPERATING EXPENSES     3,930,940       1,769,732       9,761,851       7,033,447  
                                 
   LOSS FROM OPERATIONS     (3,914,077 )     (1,627,661 )     (9,509,431 )     (6,250,519 )
                                 
OTHER INCOME (EXPENSE)                                
Investment income     3,953       21,061       30,335       80,840  
Loss on disposal of fixed asset                       (2,720 )
                                 
TOTAL OTHER INCOME (EXPENSE)     3,953       21,061       30,335       78,120  
                                 
   NET LOSS     (3,910,124 )     (1,606,600 )     (9,479,096 )     (6,172,399 )
                                 
OTHER COMPREHENSIVE INCOME (LOSS)                                
Net unrealized gain (loss) on marketable securities                 757       (12,393 )
                                 
   COMPREHENSIVE LOSS   $ (3,910,124 )   $ (1,606,600 )   $ (9,478,339 )   $ (6,184,792 )
                                 
Net loss per share, basic and diluted   $ (0.20 )   $ (0.43 )   $ (0.68 )   $ (1.76 )
Weighted average number of shares, basic and diluted     19,801,841       3,746,801       13,958,507       3,500,002  
                                 

CAPRICOR THERAPEUTICS, INC.
SUMMARY BALANCE SHEETS
 
    September 30, 2020
(unaudited)
  December 31, 2019
Cash, cash equivalents and marketable securities   $ 35,300,340   $ 9,885,378
Total assets   $ 36,187,057   $ 11,113,637
         
Total liabilities   $ 5,779,138   $ 4,274,251
         
Total stockholders’ equity – 20,211,602 and 5,227,398 common shares issued and        
outstanding at September 30, 2020 and December 31, 2019, respectively     30,407,919     6,839,386
Total liabilities and stockholders’ equity   $ 36,187,057   $ 11,113,637
         

Enservco Reports 2020 Third Quarter and Nine-Month Financial Results

  • Refinancing reduces debt by $16.0 million and adds $12.5 million to stockholders’ equity, significantly strengthening balance sheet
  • $4.0 million in cost reductions align expense structure with lower revenue environment caused by industry downturn and pandemic impact

     
  • $1.3 million of equity raised in October to support working capital needs for heating season now underway

     
  • 1-for-15 reverse stock split scheduled for November 20, 2020, expected to meet requirements to maintain NYSE American exchange listing

     
  • Third quarter revenue of $1.8 million vs. $3.8 million year over year but segment profitability improves due to cost cutting measures

     
  • Third quarter net income of $8.4 million results from $11.9 million gain on restructured debt

LONGMONT, Colo., Nov. 12, 2020 (GLOBE NEWSWIRE) — Enservco Corporation (NYSE American: ENSV), a diversified national provider of specialized well-site services to the domestic onshore conventional and unconventional oil and gas industries, today reported financial results for its third quarter and nine-month period ended September 30, 2020.

“Before addressing third quarter financial results, I want to highlight a number of important achievements we have accomplished through the first 10 months of 2020 as I believe they set the stage for an improving performance going forward,” said Rich Murphy, executive chairman.  “Early in the year, Enservco faced significant challenges around lower commodity prices and growing impact of the pandemic, burdensome debt, an oversized cost structure, the need for additional capital, and the prospect of losing our NYSE American exchange listing.  Today, I am pleased and proud to say the entire Enservco team came together to answer those challenges with actions that have better positioned the Company to take advantage of profitable growth opportunities as the energy industry recovers.  Enservco today is a leaner, more nimble organization with an expanded blue-chip customer base and a stronger balance sheet.”

Marjorie Hargrave, president and CFO, added, “During the downturn this year we have added to our customer base and optimized the location of our fleet to take advantage of any industry recovery in the near term. The Company is now entering its 2020/21 heating season – typically our most prolific period of the year in terms of revenue and profitability.  Based on customer feedback, we are anticipating an uptick in activity as the heating season progresses and we are excited about long-term prospects for growth and delivering improved shareholder value.”

Management highlighted Enservco’s year-to-date achievements as follows:

Refinancing eliminates $16.0 million in debt and adds $12.5 million to stockholders’ equity.

In September, Enservco closed a refinancing that cut its total debt by $16.0 million, increased stockholders’ equity by $12.5 million and resulted in $8.4 million in net income in the third quarter of 2020.  In return for the lender eliminating $16.0 million in debt, Enservco issued the lender eight million shares of common stock and warrants to purchase an additional 15 million shares at $0.25 per share.  The refinancing not only substantially strengthened the Company’s balance sheet, but it also improved cash flow while adding its senior secured lender as a major shareholder.  Concurrent with the bank refinancing, the investment firm Cross River Partners, which is Enservco’s largest shareholder and is managed by Enservco’s executive chairman Rich Murphy, converted $1.5 million in subordinated debt and accrued interest into Enservco restricted common stock.  The revised bank facility includes a $17.0 million term loan and a $1.0 million working capital revolving line of credit – both of which have October 15, 2021, maturity dates. The term loan is interest only with potential for principal payments in the event Enservco reaches certain profit metrics. 

Right sizing initiatives result in $4.0 million in annualized cost reductions year to date.

When lower commodity prices and the pandemic resulted in a substantial reduction in drilling and completion activity early in 2020, the oilfield services market became more competitive, which led to reduced pricing and gross margins.  Enservco responded by realigning its cost structure to fit these new realities.  The Company has cut more than $4.0 million in annualized costs out of the business, which significantly lowered Enservco’s break-even point and increased the potential to deliver positive financial results in a lower revenue environment. The cost reductions were nearly evenly distributed between costs of providing services (wages and benefits due to headcount reductions and implementation of more strategic hiring practices) and corporate level costs (mainly consolidation of physical locations, reduction of corporate staff from 17 to 9 since the first of the year, and a reduction in the size of the Company’s Board of Directors).

Annualized cost reductions (in $ millions):      
Variable operating costs 2.57  
Administrative costs    1.07  
Rent reductions   .22  
Utility reductions   .11  
Financing costs   .24   
Total reductions  $ 4.21   

Equity cash infusion supports increased activity in Q4/Q1 heating season.

Enservco recently raised $1.3 million in an equity offering to complement its revolving line of credit and support increased activity during the Company’s first- and fourth-quarter heating season, now underway, in which Enservco generates the majority of its annual revenue and profit.  The Company may seek to raise additional equity as the season progresses depending upon its cash needs and the magnitude of increased demand for its services.

Reverse stock split addresses NYSE American exchange continued listing requirement.

Enservco has set a 1-for-15 reverse stock split to be effective after the stock market closes on November 20, 2020.  The reverse split, which was approved by stockholders at the Company’s June 2020 Annual Meeting, is being done with the intent of increasing Enservco’s share price to a level that ensures continued listing on the NYSE American exchange.  Such continued listing is a valuable asset for Enservco and management believes the reverse split can also help attract new investors that may have been prohibited from purchasing Enservco shares due to certain restrictions on trading in lower priced stocks.

Third Quarter Results

Total revenue in the third quarter ended September 30, 2020, was $1.8 million versus $3.8 million in the same quarter last year.  The decline reflected lower commodity prices and the COVID-19 impact.

Production services revenue was $1.4 million compared to $3.3 million year over year and generated a segment profit of $16,000 compared to a segment loss of $17,000 in the third quarter a year ago.  The transition to profitability on significantly lower revenue in the third quarter illustrates the Company’s success in reducing costs. 

Completion services revenue declined to $401,000 from $510,000 year over year and generated a segment loss of $725,000 in the third quarter, a substantial improvement over the prior year segment loss of $1.2 million – again a reflection of cost reduction initiatives.

Sales, general and administrative expense declined to $1.0 million from $1.7 million year over year, reflecting additional cost-cutting measures at the corporate level involving personnel and Board size reductions and consolidation of physical locations.

Total operating expenses in the third quarter declined to $4.8 million from $8.2 million year over year due primarily to the aforementioned cost reductions as well as lower severance and transition costs, lower depreciation and amortization and reduced activity.  In total, the Company has taken more than $4.0 million in annualized costs out of the business since the first of the year.   With a much lower break-even point, the Company is positioned for improved profitability as the industry recovers and the impact of the pandemic subsides.

The Company reported net income of $8.4 million, or $0.14 per share, in the third quarter compared to a net loss of $5.4 million, or $0.10 per share, in the same quarter last year.  The transition to profitability was due to an $11.9 million gain on debt restructuring.
                                                                                                        
Adjusted EBITDA in the third quarter improved to a negative $1.7 million compared to a negative $2.7 million in the same quarter last year.

Nine Month Results

Total revenue for the nine-month period ended September 30, 2020, was $13.3 million versus $35.0 million in the same period a year ago.  The decline reflected lower commodity prices, COVID-19 impact and warmer than normal temperatures during the 2020 first quarter heating season.

Production services revenue declined to $5.9 million from $11.2 million year over year and had a
segment loss of $707,000 in the third quarter compared to a segment profit of $1.2 million in the prior year third quarter.

Completion services revenue through nine months declined to $7.3 million from $23.7 million in the same period last year and generated a segment loss of $270,000 versus a segment profit of $6.9 million year over year.

The segment losses were attributable to a 69% reduction in the Company’s higher margin frac water heating service due to a sharp decline in drilling and completion activity resulting from lower commodity prices and the pandemic.

Total operating expenses in the first nine months of 2020 were reduced to $22.5 million from $36.1 million in the same period last year due to lower costs of providing services combined with lower corporate overhead expense.  Sales, general and administrative expenses improved to $4.1 million from $4.8 million year over year. Depreciation and amortization expense decreased to $4.0 million from $4.2 million due to disposal of assets in the second quarter of 2020.

Net income for the nine-month period, which reflected impact of the third-quarter gain on debt restructuring, was $1.2 million, or $0.02 per diluted share, compared to a net loss of $4.3 million, or $0.04 per diluted share, in the same period a year ago.

Adjusted EBITDA through nine months was a negative $4.3 million versus a positive $3.7 million in the comparable prior year period.

Enservco used $2.3 million in cash from operations through nine months compared to $8.5 million net cash provided by operations in the same period in 2019.

Conference Call Information

Management will hold a conference call today to discuss these results.  The call will begin at 2:30 p.m. Mountain Time (4:30 p.m. Eastern) and will be accessible by dialing 833-492-0064 (973-528-0076 for international callers).  Entry code: 662655.  A telephonic replay will be available through November 19, 2020, by calling 877-481-4010 (919-882-2331 for international callers) and entering the Conference ID #38801. To listen to the webcast, participants should go to the Enservco website at www.enservco.com and link to the “Investors” page at least 15 minutes early to register and download any necessary audio software. A replay of the webcast will be available until December 12, 2020.  The webcast also is available at the following link: https://www.webcaster4.com/Webcast/Page/2228/38801

About Enservco

Through its various operating subsidiaries, Enservco provides a wide range of oilfield services, including hot oiling, acidizing, frac water heating and related services.  The Company has a broad geographic footprint covering seven major domestic oil and gas basins and serves customers in Colorado, Montana, New Mexico, North Dakota, Oklahoma, Pennsylvania, Ohio, Texas, Wyoming and West Virginia. Additional information is available at www.enservco.com

*Note on non-GAAP Financial Measures

This press release and the accompanying tables include a discussion of EBITDA and Adjusted EBITDA, which are non-GAAP financial measures provided as a complement to the results provided in accordance with generally accepted accounting principles (“GAAP”). The term “EBITDA” refers to a financial measure that we define as earnings (net income or loss) plus or minus net interest plus taxes, depreciation and amortization. Adjusted EBITDA excludes from EBITDA stock-based compensation and, when appropriate, other items that management does not utilize in assessing Enservco’s operating performance (as further described in the attached financial schedules). None of these non-GAAP financial measures are recognized terms under GAAP and do not purport to be an alternative to net income as an indicator of operating performance or any other GAAP measure. We have reconciled Adjusted EBITDA to GAAP net income in the Consolidated Statements of Operations table at the end of this release.  We intend to continue to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting.

Cautionary Note Regarding Forward-Looking Statements

This news release contains information that is “forward-looking” in that it describes events and conditions Enservco reasonably expects to occur in the future. Expectations for the future performance of Enservco are dependent upon a number of factors, and there can be no assurance that Enservco will achieve the results as contemplated herein. Certain statements contained in this release using the terms “may,” “expects to,” and other terms denoting future possibilities, are forward-looking statements. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks, which are beyond Enservco’s ability to predict, or control and which may cause actual results to differ materially from the projections or estimates contained herein. Among these risks are those set forth in Enservco’s annual report on Form 10-K for the year ended December 31, 2019, and subsequently filed documents with the SEC.  Forward looking statements in this news release that are subject to risk include the Company’s ability to comply with its bank covenants and refinance its bank debt prior to maturity; expectations for an increase in customer activity and an improved financial performance; the ability to deliver improved shareholder value; ability to raise additional capital and attract new investors; the anticipated industry recovery; and the maintenance of the Company’s stock price above exchange de-listing levels.  It is important that each person reviewing this release understand the significant risks attendant to the operations of Enservco.  Enservco disclaims any obligation to update any forward-looking statement made herein.

Contact:

Jay Pfeiffer
Pfeiffer High Investor Relations, Inc.
Phone: 303-880-9000
Email: [email protected]

Marjorie Hargrave
President and CFO
Enservco Corporation
[email protected] 

ENSERVCO CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands)
  For the Three Months Ended   For the Nine Months Ended
  September 30,   September 30,
    2020       2019       2020       2019  
               
Revenues              
Production services $ 1,363     $ 3,288     $ 5,948     $ 11,239  
Completion services   401       510       7,343       23,711  
    1,764       3,798       13,291       34,950  
               
Expenses              
Production services   1,347       3,305       6,655       9,994  
Completion services   1,126       1,710       7,613       16,829  
Sales, general and administrative expenses   1,049       1,712       4,058       4,772  
Patent litigation and defense costs                     10  
Severance and transition costs         83       139       83  
Loss (gain) on disposal of assets   21             59       (4 )
Impairment loss                     127  
Depreciation and amortization   1,271       1,404       3,977       4,246  
Total operating expenses   4,814       8,214       22,501       36,057  
               
Loss from operations   (3,050 )     (4,416 )     (9,210 )     (1,107 )
               
Other income (expense)              
Interest expense   (477 )     (695 )     (1,665 )     (2,235 )
Gain on restructuring of senior revolving credit facilty   11,916             11,916        
Other income (expense)   29       (67 )     125       1,070  
Total other income (expense)   11,468       (762 )     10,376       (1,165 )
               
Income (loss) from continuing operations before tax expense   8,418       (5,178 )     1,166       (2,272 )
Income tax expense   (6 )           (15 )     (32 )
Income (loss) from continuing operations $ 8,412     $ (5,178 )   $ 1,151     $ (2,304 )
               
(Loss) income from discontinued operations   (7 )     (226 )     60       (2,006 )
Net income (loss) $ 8,405     $ (5,404 )   $ 1,211     $ (4,310 )
               
Earnings (loss) from continuing operations per common share – basic $ 0.14     $ (0.09 )   $ 0.02     $ (0.04 )
Loss from discontinued operations per common share – basic         (0.01 )           (0.04 )
Net income (loss) per share – basic $ 0.14     $ (0.10 )   $ 0.02     $ (0.08 )
               
Earnings (loss) from continuing operations per common share – diltued $ 0.14     $ (0.09 )   $ 0.02     $ (0.04 )
Loss from discontinued operations per common share – diltued         (0.01 )           (0.04 )
Net income (loss) per share – diltued $ 0.14     $ (0.10 )   $ 0.02     $ (0.08 )
               
Basic weighted average number of common shares outstanding   58,649       55,457       56,514       54,925  
Diluted weighted average number of common shares outstanding   58,649       55,457       56,514       54,925  
               

ENSERVCO CORPORATION AND SUBSIDIARIES
Calculation of Adjusted EBITDA *
               
  For the Three Months Ended   For the Nine Months Ended
  September 30,   September 30,
    2020       2019       2020       2019  
               
EBITDA*              
Net income (loss) $ 8,405     $ (5,404 )   $ 1,211     $ (4,310 )
Add back              
Interest expense   478       695       1,667       2,235  
Provision for income tax expense   6             15       32  
Depreciation and amortization (including discontinued operations)   1,277       1,703       3,996       5,122  
EBITDA*   10,166       (3,006 )     6,889       3,079  
Add Back (Deduct)              
Stock-based compensation   16       52       377       221  
Severance and transition costs         83       139       83  
Patent litigation and defense costs                     10  
Loss (gain) on disposal of equipment (including discontinued operations)   20       (14 )     (34 )     (2 )
Gain on debt restructuring   (11,916 )           (11,916 )      
Impairment loss                     127  
One-time software expense                     25  
Other expense (income) (including discontinued operations)   1       223       282       (944 )
EBITDA related to discontinued operations         (59 )     11       1,133  
Adjusted EBITDA* $ (1,713 )   $ (2,721 )   $ (4,252 )   $ 3,732  
*Note: See below for discussion of the use of non-GAAP financial measurements.              
               
               
Use of Non-GAAP Financial Measures: Non-GAAP results are presented only as a supplement to the financial statements and for use within management’s discussion and analysis based on U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information is provided to enhance the reader’s understanding of the Company’s financial performance, but no non-GAAP measure should be considered in isolation or as a substitute for financial measures calculated in accordance with GAAP. Reconciliations of the most directly comparable GAAP measures to non-GAAP measures are provided herein.
               
EBITDA is defined as net (loss) income (earnings), before interest expense, income taxes, and depreciation and amortization. Adjusted EBITDA excludes stock-based compensation from EBITDA and, when appropriate, other items that management does not utilize in assessing the Company’s ongoing operating performance as set forth in the next paragraph. None of these non-GAAP financial measures are recognized terms under GAAP and do not purport to be an alternative to net income as an indicator of operating performance or any other GAAP measure.
               
All of the items included in the reconciliation from net income to EBITDA and from EBITDA to Adjusted EBITDA are either (i) non-cash items (e.g., depreciation, amortization of purchased intangibles, stock-based compensation, impairment losses, etc.) or (ii) items that management does not consider to be useful in assessing the Company’s ongoing operating performance (e.g., income taxes,  gain or losses on sale of equipment, severance and transition costs, gain on settlement, expenses to consolidate former Adler facilities, patent litigation and defense costs, other expense (income), EBITDA related to discontinued operations, etc.). In the case of the non-cash items, management believes that investors can better assess the company’s operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect the Company’s ability to generate free cash flow or invest in its business.
               
We use, and we believe investors benefit from the presentation of, EBITDA and Adjusted EBITDA in evaluating our operating performance because it provides us and our investors with an additional tool to compare our operating performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations. We believe that EBITDA is useful to investors and other external users of our financial statements in evaluating our operating performance because EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, and depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired. Additionally, our fixed charge coverage ratio covenant associated with our Loan and Security Agreement with East West Bank require the use of Adjusted EBITDA in specific calculations.
               
Because not all companies use identical calculations, the Company’s presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. However, these measures can still be useful in evaluating the Company’s performance against its peer companies because management believes the measures provide users with valuable insight into key components of GAAP financial disclosures.
               

ENSERVCO CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
       
  September 30,   December 31,
 
ASSETS   2020       2019  
       
Current Assets      
Cash and cash equivalents $     $ 663  
Accounts receivable, net   1,012       6,424  
Prepaid expenses and other current assets   1,609       1,016  
Inventories   310       398  
Income tax receivable, current   57       43  
Current assets of discontinued operations         187  
Total current assets   2,988       8,731  
       
Property and equipment, net   22,590       26,620  
Goodwill   546       546  
Intangible assets, net   672       828  
Income taxes receivable, noncurrent         14  
Right-of-use asset – financing, net   148       569  
Right-of-use asset – operating, net   3,124       3,793  
Other assets   349       445  
Non-current assets of discontinued operations   809       1,430  
TOTAL ASSETS $ 31,226     $ 42,976  
       
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)      
Current Liabilities      
Accounts payable and accrued liabilities $ 2,540     $ 4,470  
Senior revolving credit facility, related party (including future interest payable of $950 and $0, respectively)   950       33,994  
Subordinated debt, related party         2,381  
Lease liability – financing, current   64       207  
Lease liability – operating, current   836       848  
Current portion of long-term debt   110       147  
Current liabilities of discontinued operations   31       72  
Total current liabilities   4,531       42,119  
       
Long-Term Liabilities      
Senior revolving credit facility, related party (including future interest payable of $822 and $0, respectively)   17,931        
Subordinated debt, related party   1,168      
Long-term debt, less current portion   2,066       198  
Lease liability – Financing   72       259  
Lease liability – Operating   2,406       3,009  
Other liability   33       33  
Long-term liability of discontinued operations   15       34  
Total long-term liabilities   23,691       3,533  
Total liabilities   28,222       45,652  
       
Commitments and Contingencies      
       
Stockholders’ Equity (Deficit)      
Preferred stock, $.005 par value, 10,000,000 shares authorized, no shares issued or outstanding          
Common stock. $.005 par value, 100,000,000 shares authorized, 70,088,783 and 55,642,829 shares issued, respectively; 103,600 shares of treasury stock; and 69,985,183 and 55,539,229 shares outstanding, respectively   352       278  
Additional paid-in capital   26,461       22,066  
Accumulated deficit   (23,809 )     (25,020 )
Total stockholders’ equity (deficit)   3,004       (2,676 )
       
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $ 31,226     $ 42,976  
       
ENSERVCO CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
       
  For the Nine Months Ended
  September 30,
    2020       2019  

OPERATING ACTIVITIES
     
Net income (loss) $ 1,211     $ (4,310 )
Net income (loss) from discontinued operations   60       (2,006 )
Net income (loss) from continuing operations   1,151       (2,304 )
Adjustments to reconcile net (loss) income to net cash      
used in operating activities      
Depreciation and amortization   3,977       4,245  
Loss (gain) loss on disposal of equipment   59       (4 )
Gain on Adler settlement         (1,252 )
Impairment loss         127  
Stock-based compensation   377       221  
Amortization of debt issuance costs and discount   119       273  
Gain on restructuring of senior revolving credit facility   (11,916 )      
Lease termination expense         62  
Provision for bad debt expense   362       171  
Changes in operating assets and liabilities      
Accounts receivable   5,048       7,213  
Inventories   88       176  
Prepaid expense and other current assets   (593 )     281  
Income taxes receivable   (14 )      
Amortization of operating lease assets   635       599  
Other assets   363       239  
Accounts payable and accrued liabilities   (1,469 )     (342 )
Operating lease liabilities   (615 )     (546 )
Other liabilities         104  
Net cash (used in) provided by operating activities – continuing operations   (2,428 )     9,263  
Net cash provided by (used in) operating activities – discontinued operations   133       (775 )
Net cash (used in) provided by operating activities   (2,295 )     8,488  
       
       

INVESTING ACTIVITIES


 
     
Purchases of property and equipment   (344 )     (859 )
Proceeds from insurance claims   294       27  
Proceeds from disposal of equipment   341       219  
Net cash provided by (used in) investing activities – continuing operations   291       (613 )
Net cash provided by investing activities – discontinued operations   675       413  
Net cash provided by (used in) investing activities   966       (200 )
       
       

FINANCING ACTIVITIES
     
Gross proceeds from stock issuance   205        
Stock issuance costs and registration fees   (165 )      
Net line of credit payments   (855 )     (4,474 )
Proceeds from PPP loan   1,940        
Repayment of long-term debt   (109 )     (92 )
Payments of finance leases   (350 )     (279 )
Repayment of note         (3,700 )
Other financing activities         (1 )
Net cash provided by (used in) financing activities – continuing operations   666       (8,546 )
Net cash provided by financing activities – discontinued operations         1  
Net cash provided by (used in) financing activities   666       (8,545 )
       

Net Decrease in Cash and Cash Equivalents
  (663 )     (257 )
       

Cash and Cash Equivalents, beginning of period
  663       257  
       

Cash and Cash Equivalents, end of period
$     $  
       
       
Supplemental Cash Flow Information:      
Cash paid for interest $ 1,415     $ 1,794  
Cash paid for taxes   2       32  
Supplemental Disclosure of Non-cash Investing and Financing Activities:      
Non-cash reduction of debt in connection with restructuring of senior revolving credit facility $ 16,000     $  
Non-cash issuance of common stock and warrants in connection with restructuring of senior revolving credit facility   2,532        
Non-cash conversion of subordinated debt and accrued interest to common stock   1,515        
Non-cash conversion of accrued interest to senior revolving credit facility   219        
Non-cash proceeds from revolving credit facilities         125  

NuCana to Present at the Jefferies Virtual London Healthcare Conference

EDINBURGH, United Kingdom, Nov. 12, 2020 (GLOBE NEWSWIRE) — NuCana plc (NASDAQ: NCNA) announced today that Hugh Griffith, Chief Executive Officer, and Don Munoz, Chief Financial Officer, will present and host one-on-one meetings at the Jefferies Virtual London Healthcare Conference.

Event: Jefferies Virtual London Healthcare Conference
Presentation Date: Wednesday, November 18, 2020
Presentation Time: 11:45 AM GMT

The presentation will be webcast live and available for replay under “Events & Presentations” in the Investors section of the Company’s website at www.nucana.com.

About NuCana plc

NuCana is a clinical-stage biopharmaceutical company focused on significantly improving treatment outcomes for cancer patients by applying our ProTide technology to transform some of the most widely prescribed chemotherapy agents, nucleoside analogs, into more effective and safer medicines. While these conventional agents remain part of the standard of care for the treatment of many solid and hematological tumors, their efficacy is limited by cancer cell resistance mechanisms and they are often poorly tolerated. Utilizing our proprietary technology, we are developing new medicines, ProTides, designed to overcome key cancer resistance mechanisms and generate much higher concentrations of anti-cancer metabolites in cancer cells. NuCana’s robust pipeline includes three ProTides in clinical development. Acelarin and NUC-3373, are new chemical entities derived from the nucleoside analogs gemcitabine and 5-fluorouracil, respectively, two widely used chemotherapy agents. Acelarin is currently being evaluated in four clinical studies, including a Phase III study for patients with biliary tract cancer, a Phase Ib study for patients with biliary tract cancer, a Phase II study for patients with platinum-resistant ovarian cancer and a Phase III study for patients with metastatic pancreatic cancer for which enrollment has been suspended. NUC-3373 is currently in a Phase I study for the potential treatment of a wide range of advanced solid tumors and a Phase Ib study for patients with metastatic colorectal cancer. Our third ProTide, NUC-7738, is a transformation of a novel nucleoside analog (3’-deoxyadenosine) and is in a Phase I study for patients with advanced solid tumors.

Forward-Looking Statements

This press release may contain “forward‐looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on the beliefs and assumptions and on information currently available to management of NuCana plc (the “Company”). All statements other than statements of historical fact contained in this press release are forward-looking statements, including statements concerning the Company’s planned and ongoing clinical studies for the Company’s product candidates and the
potential advantages of those product candidates, including Acelarin, NUC-3373 and NUC-7738; the initiation, enrollment, timing, progress, release of data from and results of those planned and ongoing clinical studies;
the impact of COVID-19 on its preclinical studies, clinical
studies
, business, financial condition and results of operations
;
the Company’s goals with respect to the development and potential use, if approved, of each of its product candidates;
and the utility of prior non-clinical and clinical data in determining future clinical results. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the risks and uncertainties set forth in the “Risk Factors” section of
the Company’s Annual Report on Form 20-F for the year ended December 31,
2019 filed with the Securities and Exchange Commission (“SEC”) on March 10, 2020, and subsequent repo
rts that the Company files with the SEC. Forward-looking statements represent the Company’s beliefs and assumptions only as of the date of this press release. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, the Company assumes no obligation to publicly update any forward‐looking statements for any reason after the date of this press release to conform any of the forward-looking statements to actual results or
to changes in its expectations.

For more information, please contact:

Hugh S. Griffith
Chief Executive Officer
NuCana plc
Tel: +44 131 357 1111
[email protected]

Westwicke, an ICR Company
Chris Brinzey
Tel: +1 339-970-2843
[email protected]

RooneyPartners
Marion Janic
Tel: +1 212-223-4017
[email protected]

Vaxart Reports Third Quarter 2020 Financial Results and Provides Business Update

Enrollment
in Phase 1
for Oral COVID-19 Vaccine
Trial
Completed

Significant
viral load reduction and
strong
antibody responses in COVID-19 hamster challenge model

Restarting the Norovirus program

SOUTH SAN FRANCISCO, Calif., Nov. 12, 2020 (GLOBE NEWSWIRE) — Vaxart, Inc., a clinical-stage biotechnology company developing oral recombinant vaccines that are administered by tablet rather than by injection, today announced financial results for the third quarter of 2020 and provided a corporate update, including updates on its oral COVID-19 vaccine pre-clinical studies and clinical trials.

“To defeat the COVID-19 epidemic, we need not only effective vaccines, but effective vaccines that are easy to administer, store, and distribute. We need a practical global solution,” said Andrei Floroiu, chief executive officer of Vaxart. “The strong pre-clinical data we generated and the clinical progress we have made strengthen our belief that our oral tablet COVID-19 vaccine will emerge as a global solution against the COVID-19 pandemic.”

VXA-CoV2-1 is a single-dose COVID-19 tablet vaccine candidate that we believe can be conveniently distributed and administered without the need for cold-chain storage and distribution.

Unlike injectable vaccines, animal data indicate that VXA-CoV2-1 activates both systemic and mucosal immunity, a broader immune response that has the potential to offer superior protection against SARS-CoV-2. By leveraging over a decade’s worth of work building Vaxart’s platform technology, VXA-CoV2-1 is under investigation to assess its ability to provide durable immunity following a single dose with favorable tolerability.

Recent Business Highlights:

Pre-Clinical and Clinical Developments:

  • Completed enrollment in the Company’s Phase 1 study of VXA-CoV2-1, its oral tablet COVID-19 vaccine candidate.
  • Reported COVID-19 Hamster Challenge Study data showing protection against COVID-19 in hamsters receiving two oral doses of Vaxart’s oral vaccine. Animals were protected against systemic weight loss, lung weight gain, showed a 4-5 log reduction in lung viral load, and developed IgG titers above 10,000. Both oral and intranasal delivery of VXA-CoV2-1 (rAd-S-N) conferred similar protection against intranasal viral challenge on all these metrics.
  • Posted Preclinical studies of a recombinant adenoviral mucosal vaccine to prevent SARS-CoV-2 infection to Biorxiv, which noted immunization with the vaccine candidate induced strong IgA response in the lungs of animals, indicative of a mucosal immune response.
  • Restarted its Norovirus vaccine program with a booster study in subjects that were primed in the previously conducted Phase 1b Norovirus trial.

Manufacturing:

  • Expanded collaboration with Kindred Biosciences for the manufacturing of our COVID-19 oral vaccine. Kindred’s California plant will be responsible for scaling the COVID-19 clinical trial material into mid-size bioreactors and the Kansas plant will be responsible for manufacturing at 2000L scale in its single use bioreactors.
  • Entered into a master services agreement with Attwill Vascular Technologies, LP for processing, lyophilizing, and tableting compounds for the Company’s oral COVID-19 vaccine.

Corporate Developments:

Addition to the Board of Directors: In August, Vaxart appointed Karen J. Wilson to its Board of Directors. Ms. Wilson is a biopharmaceutical finance executive and board member with more than 30 years of industry and leadership experience in life sciences companies with relevant knowledge in finance, strategy, and risk management. She is a certified public accountant and holds a bachelor’s degree in business from the University of California, Berkeley.

Financial Results for the
Fiscal Period
Ended
September
30, 2020

  • Vaxart reported a net loss of $8.1 million for the third quarter of 2020 compared to $5.3 million for the third quarter of 2019. The increase was mainly due to an increase in operating expenses. Net loss per share for the third quarter was $0.08 in 2020 compared to $0.32 in 2019, in part due to an increase in the number of shares outstanding.
  • Vaxart ended the quarter with cash and cash equivalents of $133.4 million compared to $44.4 million as of June 30, 2020. The increase was primarily due to net proceeds of $97.0 million for the issuance of common stock, partially offset by $9.3 million of cash used in operations.
  • Revenue for the third quarter was $265,000 compared to $454,000 in the third quarter of 2019. The decrease was principally due to a reduction in revenue from our contract with Janssen, for which activities were mostly completed between July 2019 and June 2020.
  • Research and development expenses were $4.6 million for the third quarter compared to $3.7 million for the third quarter of 2019. The increase was mainly due to manufacturing expenses related to the COVID-19 vaccine candidate and higher stock-based compensation costs, partially offset by reductions in the cost of clinical trials for our norovirus vaccine candidate and in personnel costs after we ceased internal manufacturing as part of our December 2019 restructuring.
  • General and administrative expenses were $4.2 million for the third quarter compared to $1.5 million for the third quarter of 2019. The increase was mainly due to higher legal fees and an increase in headcount, with higher stock-based compensation costs.

About Vaxart

Vaxart is a clinical-stage biotechnology company focused on developing oral tablet vaccines designed to generate mucosal and systemic immune responses that protect against a wide range of infectious diseases and have the potential to provide sterilizing immunity for diseases such as COVID-19. Vaxart believes that a room temperature stable tablet is easier to distribute, store and administer than injectable vaccines and may provide a significantly faster response to a pandemic than injectable vaccines, enabling a greater portion of the population to be protected. Vaxart’s development programs include oral tablet vaccines that are designed to protect against coronavirus, norovirus, seasonal influenza and respiratory syncytial virus (RSV), as well as a therapeutic vaccine for human papillomavirus (HPV). For more information, please visit www.vaxart.com.

Note Regarding Forward-Looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding Vaxart’s strategy, prospects, plans and objectives, results from pre-clinical and clinical trials, commercialization agreements and licenses, beliefs and expectations of management are forward-looking statements. These forward-looking statements may be accompanied by such words as “should,” “believe,” “could,” “potential,” “will,” “expected,” “plan” and other words and terms of similar meaning. Examples of such statements include, but are not limited to, statements relating to Vaxart’s ability to develop and commercialize its product candidates, and preclinical and clinical results and trial data (including plans with respect to the COVID-19 vaccine product candidates); expectations relating to Vaxart’s relationship with Emergent, KindredBio and AMS including their ability to produce bulk cGMP vaccines and the timing thereof; and Vaxart’s expectations with respect to the important advantages it believes its oral vaccine platform can offer over injectable alternatives, particularly for mucosal pathogens such as norovirus, flu and RSV, as well as coronaviruses such as SARS, MERS and SARS-CoV-2. Vaxart may not actually achieve the plans, carry out the intentions or meet the expectations or projections disclosed in the forward-looking statements and you should not place undue reliance on these forward-looking statements. Actual results or events could differ materially from the plans, intentions, expectations and projections disclosed in the forward-looking statements. Various important factors could cause actual results or events to differ materially from the forward-looking statements that Vaxart makes, including uncertainties inherent in research and development, including the ability to meet anticipated clinical endpoints, commencement and/or completion dates for clinical trials, regulatory submission dates, regulatory approval dates and/or launch dates, as well as the possibility of unfavorable new clinical data and further analyses of existing clinical data; the risk that clinical trial data are subject to differing interpretations and assessments by regulatory authorities; whether regulatory authorities will be satisfied with the design of and results from the clinical studies; decisions by regulatory authorities impacting labeling, manufacturing processes, and safety that could affect the availability or commercial potential of any product candidate, including the possibility that Vaxart’s product candidates may not be approved by the FDA or non-U.S. regulatory authorities; that, even if approved by the FDA or non-U.S. regulatory authorities, Vaxart’s product candidates may not achieve broad market acceptance; that a Vaxart collaborator may not attain development and commercial milestones; that Vaxart or its partners may experience manufacturing issues and delays due to events within, or outside of, Vaxart’s or its partners control, including the recent outbreak of COVID-19; difficulties in production, particularly in scaling up initial production, including difficulties with production costs and yields, quality control, including stability of the product candidate and quality assurance testing, shortages of qualified personnel or key raw materials, and compliance with strictly enforced federal, state, and foreign regulations; that Operation Warp Speed may not result in a positive financial impact on Vaxart’s financial results that Vaxart may not be able to obtain, maintain and enforce necessary patent and other intellectual property protection; that Vaxart’s capital resources may be inadequate; Vaxart’s ability to resolve pending legal matters; Vaxart’s ability to obtain sufficient capital to fund its operations on terms acceptable to Vaxart, if at all; the impact of government healthcare proposals and policies; competitive factors; and other risks described in the “Risk Factors” sections of Vaxart’s Quarterly and Annual Reports filed with the SEC. Vaxart does not assume any obligation to update any forward-looking statements, except as required by law.

Contacts

Investor Relations

David R. Holmes
LifeSci Advisors, LLC
Tel: (646) 970-4995
[email protected]  
Media Relations

Gloria Gasaatura
LifeSci Communications
Tel: (646) 970-4688
[email protected]
   



V
axart, Inc.

Condensed Consolidated Balance Sheets

    September
30, 2020
  December 31, 2019
    (Unaudited)    
(1
)
    (in thousands)
Assets            
Cash and cash equivalents   $ 133,438   $ 13,526  
Accounts receivable     250     3,619  
Prepaid and other assets     1,975     594  
Property and equipment, net     662     210  
Right-of-use assets, net     2,591     1,990  
Intangible assets, net     15,794     17,093  
Total assets   $ 154,710   $ 37,032  
             
Liabilities and stockholders’ equity            
Accounts payable   $ 1,871   $ 852  
Accrued and other liabilities     3,724     4,583  
Liability related to sale of future royalties     14,706     16,332  
Operating lease liabilities     2,731     2,313  
Total liabilities     23,032     24,080  
Stockholders’ equity     131,678     12,952  
Total liabilities and stockholders’ equity   $ 154,710   $ 37,032  

(1) Derived from the audited consolidated financial statements of Vaxart, Inc. for the year ended December 31, 2019, included on the Form 10-K filed with the Securities and Exchange Commission on March 19, 2020.

Vaxart, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

    Three Months Ended
September
30,
    Nine
 Months Ended
September
30,
 
    2020     2019     2020     2019  
       
    (in thousands, except share and per share amounts)  
                                 
Revenue   $ 265     $ 454     $ 3,690     $ 5,946  
Operating expenses:                                
Research and development     4,616       3,713       11,272       11,249  
General and administrative     4,190       1,455       10,076       4,856  
Restructuring costs     (952 )           (849 )      
Total operating expenses     7,854       5,168       20,499       16,105  
Loss from operations     (7,589 )     (4,714 )     (16,809 )     (10,159 )
Other income and (expenses), net     (470 )     (515 )     (1,345 )     (1,783 )
Provision for income taxes     (26 )     (31 )     (205 )     (294 )
Net loss   $ (8,085 )   $ (5,260 )   $ (18,359 )   $ (12,236 )
Net loss per share, basic and diluted   $ (0.08 )   $ (0.32 )   $ (0.23 )   $ (0.96 )
Shares used in computing net loss per share, basic and diluted     107,718,578       16,249,032       81,121,045       12,748,665