Market Newsdesk

November 12, 2020 4:08 pm

HL Acquisitions Corp Announces Date of Annual General Meeting of Shareholders to Vote on Business Combination with Fusion Fuel Green plc

NEW YORK, NY, Nov. 12, 2020 (GLOBE NEWSWIRE) — HL Acquisitions Corp. (Nasdaq: HCCH) (“HL” or the “Company”) announced today that it has scheduled its annual general meeting of its shareholders (the “Meeting”) to vote on the proposed business combination with Fusion Fuel Green plc (“Fusion Fuel”), for 10:00 a.m., Eastern Time, on December 4, 2020. In connection with the Meeting, HL filed its definitive proxy statement for the Meeting with the Securities and Exchange Commission and has commenced mailing proxy materials to its shareholders of record as of November 4, 2020, the record date for the Meeting.

Jeffrey Schwarz, CEO of HL, commented: “We are very pleased to finally be able to schedule the shareholder meeting to vote on the proposed business combination with Fusion Fuel. I want to thank our shareholders for their support and patience through this process, and also to remind them that their vote is important no matter how many shares they own. We look forward to closing the proposed business combination as soon as practicable following the Meeting.”

You are encouraged to submit your vote as soon as possible to ensure it is represented at the Meeting. If you hold your shares in an account at a brokerage firm, bank or other similar agent, you may vote prior to the Meeting by using your voting control number and instructions provided by your brokerage firm, bank or other similar agent. If you are a shareholder of record, you may also vote prior to the Meeting by signing, dating and mailing your proxy card in the return envelope provided with your proxy material.

If you have any questions relating to the Meeting, voting your shares, or need to request additional proxy materials, you may call our proxy solicitor Advantage Proxy toll-free at 1-877-870-8565 or collect at 1-206-870-8565 or by email to [email protected].

Additional Information and Where to Find It

HL and Fusion Fuel each filed a definitive proxy statement/prospectus with the SEC on November 10, 2020, and other relevant documents with the SEC. HL has commenced mailing the definitive proxy statement/prospectus to HL shareholders of record as of November 4, 2020. INVESTORS AND SECURITY HOLDERS OF HL ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS THAT HAVE BEEN FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain free copies of the proxy statement/prospectus and other documents containing important information about HL, Fusion Fuel and Fusion Welcome – Fuel, S.A., through the website maintained by the SEC at http://www.sec.gov.

No Offer or Solicitation

This communication shall neither constitute an offer to sell nor the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

Forward looking statements

Certain statements made in this release are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside HL’s or Fusion Fuel’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statement, including, among other things, the number of HL shareholders voting against the business combination proposals and/or seeking conversion, the occurrence of any event, change or other circumstances that could give rise to the termination of that certain Amended and Restated Business Combination Agreement, dated as of August 25, 2020, by and between HL, Fusion Fuel, Fusion Welcome – Fuel, S.A. and the other parties thereto, the ability to maintain the listing of Fusion Fuel’s securities on Nasdaq or another national securities exchange following the business combination, changes adversely affecting the businesses in which Fusion Fuel is engaged, management of growth, general economic conditions, including changes in the credit, debit, securities, financial or capital markets, the impact of COVID-19 or other adverse public health developments on Fusion Fuel’s business and operations, and the other risks and uncertainties set forth in the definitive proxy statement/prospectus filed by each of HL and Fusion Fuel on November 10, 2020. You are cautioned not to place undue reliance on these forward-looking statement, which speak only as of the date of this press release.

Contact:
Jeffrey E. Schwarz
Chief Executive Officer
HL Acquisitions Corp.
(212) 486-8100

November 12, 2020 4:08 pm

Athira Pharma Reports Third Quarter 2020 Financial Results and Provides Business Highlights

– LIFT-AD clinical trial evaluating ATH-1017, a once-daily investigational drug for the treatment of mild-to-moderate Alzheimer’s disease, actively enrolling

– Strong cash, cash equivalents and investments balance of $259.9 million as of September 30, 2020

SEATTLE, Nov. 12, 2020 (GLOBE NEWSWIRE) — Athira Pharma, Inc. (NASDAQ: ATHA), a late clinical-stage biopharmaceutical company focused on developing small molecules to restore neuronal health and stop neurodegeneration, today reported financial results for the third quarter ended September 30, 2020 and provided recent business highlights.

“At Athira, we are continuing to execute on our mission to restore neuronal health for those suffering from neurological diseases, including Alzheimer’s, and we have successfully begun enrollment in our Phase 2/3 clinical study, LIFT-AD, evaluating our lead product candidate ATH-1017 in individuals with mild-to-moderate Alzheimer’s disease,” said Leen Kawas, Ph.D., President and Chief Executive Officer at Athira. “Supported by a strong cash position from our Series B financing in June and our initial public offering in September, we remain focused on advancing the development of ATH-1017 and our other pipeline programs.”

Recent Business Highlights and Updates

Pipeline

Initiated patient dosing for the LIFT-AD study. In September 2020, Athira initiated patient dosing in a randomized, double-blind, placebo-controlled Phase 2/3 clinical trial evaluating the safety, efficacy and tolerability of two dose levels of ATH-1017 in individuals with mild-to-moderate Alzheimer’s disease. Clinical efficacy will be measured by improvement in cognition and global/functional assessments comparing treatment arms to placebo. Up to approximately 300 patients will be randomized across two dose groups and one placebo group on a 1:1:1 basis to receive a daily subcutaneous injection of ATH-1017 or placebo over a treatment course of 26 weeks.

Corporate

Completed initial public offering (IPO). In September 2020, Athira Pharma completed its IPO of 12,000,000 shares of common stock at a public offering price of $17.00 per share, generating gross proceeds of $204.0 million before deducting underwriting discounts and commissions and estimated offering expenses. In October 2020, Athira sold an additional 1,397,712 shares of common stock to the underwriters of the IPO upon partial exercise of the underwriters’ option to purchase additional shares at the initial public offering price, resulting in gross proceeds of approximately $23.8 million before deducting underwriting discounts and commissions and estimated offering expenses.

Third Quarter 2020 Financial Results

Liquidity Position. Cash, cash equivalents and investments were $259.9 million as of September 30, 2020, as compared to $85.2 million as of June 30, 2020.
Research and Development (R&D) Expenses. R&D expenses were $5.8 million for the quarter ended September 30, 2020, as compared to $1.0 million for the same period in 2019. The increase was driven primarily by start-up activities by our clinical research organization and clinical drug supply manufacturers for Phase 2 Alzheimer’s clinical trials of ATH-1017.
General and Administrative (G&A) Expenses. G&A expenses were $1.6 million for the quarter ended September 30, 2020, as compared to $0.5 million for the same period in 2019. The increase was primarily due to legal, accounting, technical and consulting services and personnel-related costs to support the increase in clinical activities.
Net Loss. Net loss was $8.5 million, or $1.12 loss per share, for the quarter ended September 30, 2020, as compared to $1.5 million or $0.43 loss per share, for the same period in 2019.

About Athira Pharma, Inc.

Athira, headquartered in Seattle, is a late clinical-stage biopharmaceutical company focused on developing small molecules to restore neuronal health and stop neurodegeneration. We aim to provide rapid cognitive improvement and alter the course of neurological diseases with our novel mechanism of action. Athira is currently advancing its lead therapeutic candidate, ATH-1017, a novel small molecule for Alzheimer’s and Parkinson’s dementia. For more information, visit www.athira.com. You can also follow Athira on Facebook, LinkedIn and @athirapharma on Twitter and Instagram.

Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not based on historical fact and include statements regarding ATH-1017 as a potential treatment for Alzheimer’s and other dementias; Athira’s platform technology and potential therapies; future development plans; clinical and regulatory objectives and the timing thereof; anticipated design of planned clinical trials; expectations regarding the potential efficacy and commercial potential of Athira’s product candidates, including ATH-1017; the anticipated presentation of data; the results of Athira’s research and development efforts and Athira’s ability to advance its product candidates into later stages of development. Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “may,” “will,” “should,” “would,” “expect,” “plan,” “believe,” “intend,” “pursue,” and other similar expressions among others. Any forward-looking statements are based on management’s current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the preliminary data for Athira’s ATH-1017 product candidate from the Phase 1a/b trials will not continue or persist; cessation or delay of any of the ongoing clinical trials and/or Athira’s development of ATH-1017 may occur; future potential regulatory milestones of ATH-1017, including those related to current and planned clinical studies may be insufficient to support regulatory submissions or approval; the impact of the COVID-19 pandemic on Athira’s business, research and clinical development plans and timelines and results of operations, including impact on our clinical trial sites and contractors who act for or on our behalf, may be more severe and more prolonged than currently anticipated; clinical trials may not demonstrate safety and efficacy of any of Athira’s product candidates; Athira’s assumptions regarding its planned expenditures and sufficiency of its cash, cash equivalents and investments to fund operations may be incorrect; Athira’s research and development efforts and its ability to advance product candidates into later stages of development may fail; any one or more of Athira’s product candidates may not be successfully developed, approved or commercialized; adverse conditions in the general domestic and global economic markets; political and regulatory uncertainty following the results of the U.S. election in November 2020; regulatory agencies may be delayed in reviewing, commenting on or approving any of Athira’s clinical development plans as a result of the COVID-19 pandemic, which could further delay development timelines; the impact of competition; the impact of expanded product development and clinical activities on operating expenses; impact of new or changing laws and regulations; as well as the other risks detailed in Athira’s filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof and Athira undertakes no obligation to update forward-looking statements. Athira may not actually achieve the plans, intentions, or expectations disclosed in its forward-looking statements, and you should not place undue reliance on the forward-looking statements.

“Athira,” “Athira Pharma” and the Athira logo are registered trademarks or trademarks of Athira Pharma, Inc. in various jurisdictions. All other trademarks belong to their respective owner.

Investor & Media Contact:
Julie Rathbun
Athira Pharma
[email protected]
206-769-9219

Athira Pharma, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)
(Amounts in thousands)

	September 30,		December 31,
	2020		2019
Assets
Cash and cash equivalents	$	165,725	$	2,056
Short-term investments		60,547		0
Other short-term assets		5,994		104
Long-term investments		33,656		0
Other long-term assets		2,017		29
Total assets	$	267,939	$	2,189

Liabilities, Convertible preferred stock and stockholders’ equity (deficit)
Current liabilities	$	7,554	$	1,273
Long-term liabilities		915		3,588
Total liabilities		8,469		4,861
Convertible preferred stock		—		17,051
Stockholders’ equity (deficit)		259,470		(19,723	)
Total liabilities and stockholders’ equity (deficit)	$	267,939	$	2,189

Athira Pharma, Inc.

Condensed Consolidated Statements of Comprehensive Loss

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

	Three Months Ended September 30,
	2020			2019
Operating expenses:
Research and development	$	5,830		$	1,026
General and administrative		1,567			509
Total operating expenses		7,397			1,535
Loss from operations		(7,397	)		(1,535	)
Other income (expense), net		(1,059	)		5
Net loss	$	(8,456	)	$	(1,530	)
Unrealized (loss)/gain on available-for-sale securities		7			—
Comprehensive loss attributable to common shareholders	$	(8,449	)	$	(1,530	)
Net loss per share attributable to common stockholders, basic and diluted	$	(1.12	)	$	(0.43	)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted		7,564,538			3,554,345

November 12, 2020 4:08 pm

Turning Point Therapeutics Reports Third-Quarter Financial Results, Provides Operational Updates

Early Interim Data for TRIDENT-1 Phase 2 Study of

Repotrectinib and Second Drug Candidate

,

TPX-0022

,

Recently

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Phase 2 TRIDENT-1 Registrational Study Full Site Activation and Timeline Update

Anticipated

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Four Clinical Studies of Three Drug Candidates Ongoing; Three Additional Clinical Studies Planned in 2021
Cash

,

Cash Equivalents

, and

Marketable

Securities

of

$

7

1

1

M

illion

and

Net

Proceeds of

Approximately

$4

3

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Expected to

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4

SAN DIEGO, Nov. 12, 2020 (GLOBE NEWSWIRE) — Turning Point Therapeutics, Inc. (NASDAQ: TPTX), a precision oncology company developing next-generation therapies that target genetic drivers of cancer, today reported financial results and operational updates for the third quarter ended Sept. 30.

“We made substantial progress in our repotrectinib and TPX-0022 programs since our last quarterly update — reporting early interim data from both the Phase 2 TRIDENT-1 registrational study of repotrectinib and the Phase 1 SHIELD-1 study of TPX-0022 – and raised net proceeds of approximately $434 million through our October stock offering to fund current operations into 2024,” said Athena Countouriotis, M.D., president and chief executive officer. “In addition, we continued to build a strong team to advance our pipeline of four drug candidates, with three new clinical trials planned for 2021, and importantly, to invest in earlier stage discovery. We look forward to completing our site activations in TRIDENT-1 and submitting our fourth IND in early 2021.”

Third
quarter and recent highlights include
:

Progress in the Phase 2 TRIDENT-1 registrational study of repotrectinib, where the company reported early interim data in August. Utilizing a July 10, 2020 data cutoff, the preliminary efficacy and safety in the first 39 treated patients across multiple Phase 2 cohorts demonstrated confirmed objective response rates (ORR) of 86 percent in TKI-naïve ROS1-positive non-small cell lung cancer (NSCLC) patients (EXP-1: n=7); 40 percent in ROS1-positive NSCLC patients previously treated with a TKI and prior platinum-based chemotherapy (EXP2: n=5); 67 percent in ROS1-positive NSCLC patients previously treated with a TKI and no prior chemotherapy (EXP-4: n=6); and 50 percent in NTRK-positive TKI-pretreated patients (EXP-6: n=6), all by physician assessment. Repotrectinib was generally well tolerated, with the majority of treatment emergent adverse events reported as Grade 1 or 2.
Turning Point has been granted three Fast Track designations by the Food and Drug Administration (FDA), in ROS1-positive advanced NSCLC patients who are TKI naïve, ROS1-positive advanced NSCLC patients who have been previously treated with one prior line of platinum-based chemotherapy and one prior ROS1 TKI, and NTRK-positive patients with advanced solid tumors who have progressed following treatment with at least one prior line of chemotherapy and one or two prior TRK TKIs.

The company’s goal is to complete global activation of sites in the TRIDENT-1 study in early 2021, after which it plans to provide an update on the overall study timeline. Turning Point’s regional partner, Zai Lab, will continue to activate sites in 2021.

Progress in the Phase 1 SHIELD-1 study of TPX-0022, Turning Point’s MET, SRC and CSF1R inhibitor, where initial data reported in a late-breaker oral presentation at the EORTC-NCI-AACR symposium highlighted preliminary clinical activity, including objective responses across multiple tumor types and a generally tolerable safety profile.
The company anticipates initiating Phase 1 dose expansion after determining the recommended Phase 2 dose. The company also plans to discuss the ongoing Phase 1 SHIELD-1 study with the FDA to potentially modify the trial into a registrational Phase 1/2 design with the goal to initiate the Phase 2 portion of the study in the second half of 2021, pending FDA feedback.

Two additional trials ongoing, including the Phase 1/2 open-label study to assess repotrectinib in pediatric patients with ALK-, NTRK- or ROS1-positive advanced solid tumors; and the Phase 1/2 study of RET-inhibitor TPX-0046.
Presenting preclinical data in a KRAS G12C NSCLC tumor xenograft model demonstrating repotrectinib significantly enhanced the efficacy of AMG-510 and showed a marked survival benefit when compared to AMG-510 alone. Repotrectinib has previously demonstrated synergy in preclinical models with AMG-510 and a MEK inhibitor. Based on these preclinical data, Turning Point plans to initiate a clinical combination study in KRAS mutant NSCLC in mid-2021.
Completing a follow-on public stock offering generating net proceeds to Turning Point of approximately $434 million.

Third
Quarter Financial Update

Revenue of $25 million recorded in the quarter was the result of an upfront payment from Zai Lab under the company’s license agreement for repotrectinib in Greater China. Operating expenses for the third quarter totaled $43.5 million compared to $22.1 million in the third quarter of 2019. Primary drivers of the year-over-year increase were investments made to develop repotrectinib, TPX-0022, TPX-0046 and personnel expenses.

Excluding a one-time non-cash stock-based compensation charge in the first quarter, non-GAAP operating expenses for the first nine months totaled $107.5 million compared to $54.7 million in the prior-year period. Year-to-date net cash used in operating activities was $49.4 million.

Cash, cash equivalents and marketable securities at Sept. 30 totaled $711.4 million, an increase of $1 million from June 30 driven by the upfront payment from Zai Lab, partially offset by cash used in operating activities for the quarter. In addition, Turning Point completed a follow-on public stock offering in October that generated net proceeds of $433.6 million. Turning Point Therapeutics projects its cash position funds current operations into 2024.

Upcoming Milestones

Key milestones anticipated into 2021 include:

TRIDENT-1 data presentation in a mini-oral session at the World Conference on Lung Cancer in January 2021.
Achievement of full TRIDENT-1 global site activation in early 2021, excluding sites within China managed by the company’s partner Zai Lab, and an update on the overall study timeline in early 2021.
Submitting an investigational new drug application to the FDA for ALK-inhibitor TPX-0131 in early 2021.
Reporting early interim data from initial patients in the Phase 1 study of RET-inhibitor TPX-0046 in the first half of 2021.
Initiation of TRIDENT-2, a planned Phase 2 combination study of repotrectinib in patients with KRAS mutant NSCLC in mid-2021.
Initiation of the planned Phase 2 portion of the SHIELD-1 study of TPX-0022 in the second half of 2021, pending FDA feedback.
Initiation of SHIELD-2, a planned Phase 2 study of TPX-0022 in combination with an inhibitor of epidermal growth factor receptor (EGFR), in the second half of 2021.

About Turning Point Therapeutics Inc.

Turning Point Therapeutics is a clinical-stage precision oncology company with a pipeline of internally discovered investigational drugs designed to address key limitations of existing cancer therapies. The company’s lead drug candidate, repotrectinib, is a next-generation kinase inhibitor targeting the ROS1 and TRK oncogenic drivers of non-small cell lung cancer and advanced solid tumors. Repotrectinib, which is being studied in a registrational Phase 2 study called TRIDENT-1 in adults and a Phase 1/2 study in pediatric patients, has shown antitumor activity and durable responses among kinase inhibitor treatment-naïve and pre-treated patients. The company’s pipeline of drug candidates also includes TPX-0022, targeting MET, CSF1R and SRC, which is in a Phase 1 study called SHIELD-1 in patients with advanced or metastatic solid tumors harboring genetic alterations in MET; RET-inhibitor TPX-0046, which is in a Phase 1/2 study of patients with advanced or metastatic solid tumors harboring genetic alterations in RET; and ALK-inhibitor TPX-0131, which is in IND-enabling studies. Turning Point’s next-generation kinase inhibitors are designed to bind to their targets with greater precision and affinity than existing therapies, with a novel, compact structure that has demonstrated an ability to potentially overcome treatment resistance common with other kinase inhibitors. The company is driven to develop therapies that mark a turning point for patients in their cancer treatment. For more information, visit www.tptherapeutics.com.

Non-GAAP Financial Measures

In addition to the financial results that are provided in accordance with accounting principles generally accepted in the United States (GAAP), this press release also contains a non-GAAP financial measure. When preparing our supplemental non-GAAP financial results, the Company excluded certain GAAP items that management does not consider to be normal. In particular, the non-GAAP measure excludes non-cash stock-based compensation expense relating to a one-time charge of $31.4 million associated with previously disclosed modifications to the vesting of existing stock options, pursuant to the transition agreement with the company’s scientific founder. This non-GAAP measure is provided as a complement to results provided in accordance with GAAP as management believes this non-GAAP financial measure is important in comparing current results with prior-period results. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached financial information.

Forward Looking Statements

Statements contained in this press release regarding matters that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include statements regarding, among other things, the efficacy, safety and therapeutic potential of Turning Point Therapeutics’ drug candidates, repotrectinib, TPX-0022, TPX-0046 and TPX-0131, the results, conduct, progress and timing of Turning Point Therapeutics’ development programs and clinical trials including the Phase 2 TRIDENT-1 clinical study, the Phase 1/2 pediatric clinical study of repotrectinib, the Phase 1 SHIELD-1 clinical study of TPX-0022 and the Phase 1/2 clinical study of TPX-0046, plans regarding future clinical trials and regulatory submissions, the regulatory approval path for repotrectinib, the potential to receive milestone and royalty payments from Zai Lab, the strength of Turning Point Therapeutics’ balance sheet and the adequacy of cash on hand. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Words such as “plans”, “will”, “believes,” “anticipates,” “expects,” “intends,” “goal,” “potential” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon Turning Point Therapeutics’ current expectations and involve assumptions that may never materialize or may prove to be incorrect. Actual results could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties, which include, without limitation, risks and uncertainties associated with Turning Point Therapeutics’ business in general, risks and uncertainties related to the impact of the COVID-19 pandemic to Turning Point’s business and the other risks described in Turning Point Therapeutics’ filings with the SEC. All forward-looking statements contained in this press release speak only as of the date on which they were made. Turning Point Therapeutics undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

TURNING POINT THERAPEUTICS, INC.

Balance Sheet Data
(In thousands)
(unaudited)

	September 30,			December 31,
	2020			2019
Balance Sheet Data:
Cash, cash equivalents, and marketable securities	$	711,388		$	409,151
Working capital		697,907			400,915
Total assets		724,633			422,202
Accumulated deficit		(232,800	)		(122,884	)
Total stockholders’ equity		701,588			404,351

TURNING POINT THERAPEUTICS, INC.

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	$	25,000			–		$	25,000		$	–
Operating expenses:
Research and development		32,213			16,640			79,136			40,802
General and administrative		11,326			5,500			59,761			13,857
Total operating expenses		43,539			22,140			138,897			54,659
Loss from operations		(18,539	)		(22,140	)		(113,897	)		(54,659	)
Other income, net		834			1,657			3,981			3,487
Net loss		(17,705	)		(20,483	)		(109,916	)		(51,172	)
Unrealized gain / (loss) on marketable securities, net of tax		(606	)		(24	)		141			322
Comprehensive loss	$	(18,311	)	$	(20,507	)	$	(109,775	)	$	(50,850	)
Net loss per share, basic and diluted	$	(0.42	)	$	(0.63	)	$	(2.82	)	$	(2.54	)
Weighted-average common shares outstanding, basic and diluted		42,185,824			32,312,814			38,914,789			20,178,979

TURNING POINT THERAPEUTICS, INC.
Reconciliation of GAAP to Non-GAAP Financial Results
(In thousands)
(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
GAAP Operating Expenses	$	(43,539	)	$	(22,140	)	$	(138,897	)	$	(54,659	)
Adjustments:
Share-based compensation expense (1)		–			–			31,405			–
Non-GAAP Operating Expenses	$	(43,539	)	$	(22,140	)	$	(107,492	)	$	(54,659	)

(1) During the first quarter of 2020, the Company recognized in non-cash stock-based compensation expense a one-time charge of $31.4 million associated with previously disclosed modifications to the vesting of existing stock options, pursuant to the transition agreement with the company’s scientific founder.

Contact:
Jim Mazzola
[email protected]
858-342-8272

November 12, 2020 4:08 pm

Verrica Pharmaceuticals Announces Participation in the Jefferies Virtual London Healthcare Conference

WEST CHESTER, Pa., Nov. 12, 2020 (GLOBE NEWSWIRE) — Verrica Pharmaceuticals Inc. (“Verrica”) (Nasdaq: VRCA), a dermatology therapeutics company developing medications for skin diseases requiring medical interventions, today announced that Ted White, Verrica President and CEO, will present a business overview at the Jefferies Virtual London Healthcare Conference on Tuesday, November 17, 2020, at 2:55 p.m. ET. A live webcast of the event can be accessed in the Investors/Presentations & Events section of the Verrica website at http://www.verrica.com. The webcast replay will be available shortly after conclusion of the event for 30 days.

About Verrica Pharmaceuticals
Inc.

Verrica is a dermatology therapeutics company developing medications for skin diseases requiring medical interventions. The Company’s late-stage product candidate, VP-102, is a potential first-in-class drug-device combination product containing a topical therapy for the treatment of molluscum contagiosum. Verrica submitted an NDA for VP-102 for the treatment of molluscum in September 2019. A Complete Response Letter was received from the FDA regarding the NDA for VP-102 on July 13, 2020. In October 2020, Verrica participated in a Type A meeting with the FDA. Verrica expects to resubmit its New Drug Application for VP-102 for the treatment of molluscum in the first quarter of 2021. If approved, VP-102 will be marketed in the United States under the conditionally accepted brand name YCANTH™. In addition, Verrica has successfully completed a Phase 2 study of VP-102 for the treatment of common warts and a Phase 2 study of VP-102 for the treatment of external genital warts. The Company is also developing VP-103, its third cantharidin-based product candidate, for the treatment of plantar warts. For more information, visit www.verrica.com.

FOR MORE INFORMATION, PLEASE CONTACT:

Investors:

A. Brian Davis

Chief Financial Officer
484.453.3300 ext. 103
[email protected]

William Windham

Solebury Trout
646.378.2946
[email protected]

Media:

Zara Lockshin

Solebury Trout
646.378.2960
[email protected]

November 12, 2020 4:08 pm

Ideal Power Reports Third Quarter 2020 Financial Results

AUSTIN, Texas, Nov. 12, 2020 (GLOBE NEWSWIRE) — Ideal Power Inc. (Nasdaq: IPWR), pioneering the development and commercialization of highly efficient and broadly patented B-TRAN™ bi-directional power switches, reported results for its third quarter ended September 30, 2020.

“During the third quarter, we maintained our momentum toward our commercialization goals,” stated Dan Brdar, President and Chief Executive Officer of Ideal Power. “Recently, we completed our first milestone with United States Naval Sea Systems Command (NAVSEA) under our partnership with Diversified Technologies, Inc. (DTI) finishing the first wafer fabrication run with Teledyne. Devices are being packaged and will be tested and characterized under the NAVSEA program. We now have both initial driver and packaging designs through our collaboration with The University of Texas at Austin’s Microelectronics Research Center. Overall, we continue to make progress toward commercialization, and are excited about our prospects for B-TRAN™ as a differentiated technology that addresses a large and growing market.”

Key Recent
Operational Highlights

Completed first major milestone under NAVSEA program in partnership with DTI to demonstrate B-TRAN™ enabled high efficiency direct current circuit breakers; received B-TRAN™ wafers from Teledyne’s first fabrication run under the program, which are being tested for selection and packaging into B-TRAN™ devices.
In collaboration with The University of Texas at Austin’s Microelectronics Research Center:
- Completed design and fabrication of initial version of our new B-TRAN™ driver
- Under the NAVSEA program, completed the initial design of new B-TRAN™ device packaging
Developed a new high power test rig to enable testing of packaged devices at high voltage and high current conditions as part of the device characterization required under the NAVSEA program and for the generation of a data sheet for the engineering sample program.
B-TRAN™ Patent Estate: Currently have 57 issued B-TRAN™ patents with 21 of those issued outside of the United States and 25 pending B-TRAN™ patents. Current geographic coverage now includes North America, China, Japan and Europe, with potential to expand coverage into South Korea and India.
As of September 30, 2020, and inclusive of the previously announced early warrant exercise transaction, we have raised $3 million in 2020 from warrant exercises.

Third

Quarter 2020 Financial Results

Research and development expenses in the third quarter of 2020 were $0.5 million compared to $0.3 million in the third quarter of 2019. The increase was due to higher expenses related to B-TRAN wafer fabrication and driver development.
General and administrative expenses in the third quarter of 2020 were $0.7 million compared to $0.5 million in the third quarter of 2019.
In connection with the early warrant exercise transaction, we recorded a non-cash warrant inducement expense of $3.7 million within other expenses representing the estimated fair value of the new warrants issued in the transaction.
Net loss in the third quarter of 2020 was $4.9 million, inclusive of the $3.7 million non-cash warrant inducement expense, compared to $0.8 million in the third quarter of 2019. The third quarter of 2019 included a $0.1 million loss from discontinued operations related to our PPSA operations which we sold in September 2019.
Cash used in operating activities for the first nine months of 2020 was $2.3 million compared to $2.4 million in the first nine months of 2019.
Cash and cash equivalents totaled $3.8 million at September 30, 2020. In August 2020, the Company raised net cash proceeds of $2.5 million from the early warrant exercise transaction.
Long-term debt outstanding at September 30, 2020 was $0.1 million relating to a Payroll Protection Program loan received in the second quarter of 2020 to temporarily subsidize payroll and facilities costs in a business landscape impacted by the COVID-19 pandemic. We currently expect this loan to be forgiven.

Third

Quarter 2020

Conference Call Details

Ideal Power CEO and President Dan Brdar and CFO Tim Burns will host the conference call, followed by a question and answer period.

To access the call, please use the following information:

Date:		Thursday, November 12, 2020
Time:		4:30 p.m. EST, 1:30 p.m. PST
Toll-free dial-in number:		1-866-248-8441
International dial-in number:		1-323-289-6576
Conference ID:		8075834

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact LHA Investor Relations at 1-212-838-3777.

The conference call will be broadcast live and available for replay at http://public.viavid.com/index.php?id=142114 and via the investor relations section of the Company’s website at www.IdealPower.com.

A replay of the conference call will be available after 7:30 p.m. Eastern time on November 12, 2020 through December 12, 2020.

Toll Free Replay Number:		1-844-512-2921
International Replay Number:		1-412-317-6671
Replay ID:		8075834

About Ideal Power Inc.
Ideal Power (Nasdaq: IPWR) is pioneering the development of its broadly patented bi-directional power switches, creating highly efficient and ecofriendly energy control solutions for industrial, alternative energy, military and automotive applications. The Company is focused on its patented Bi-directional, Bi-polar Junction Transistor (B-TRAN™) semiconductor technology. B-TRAN™ is a unique double-sided bi-directional AC switch able to deliver substantial performance improvements over today’s conventional power semiconductors. Ideal Power believes B-TRAN™ modules will reduce conduction and switching losses, complexity of thermal management and operating cost in medium voltage AC power switching and control circuitry. For more information, visit www.IdealPower.com.

Safe Harbor Statement
All statements in this release that are not based on historical fact are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While Ideal Power’s management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of our control that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not limited to, the impact of COVID-19 on our business, financial condition and results of operations, the success of our B-TRAN™ technology, including the success of our contract with DTI, whether the patents for our technology provide adequate protection and whether we can be successful in maintaining, enforcing and defending our patents and our inability to predict with precision or certainty the pace of development and commercialization of our B-TRAN™ technology, our ability to secure additional financing on commercially reasonable terms, or at all, especially in light of the market volatility uncertainty as a result of the COVID-19 pandemic and uncertainties set forth in our quarterly, annual and other reports filed with the Securities and Exchange Commission. Furthermore, we operate in a highly competitive and rapidly changing environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. We disclaim any intention to, and undertake no obligation to, update or revise forward-looking statements.

Ideal Power Investor Relations Contact:
LHA Investor Relations
Carolyn Capaccio, CFA; Keith Fetter
T: 212-838-3777
[email protected]

IDEAL POWER INC.
Balance Sheets

	September 30, 2020			December 31, 2019
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	3,769,225		$	3,057,682
Accounts receivable, net		28,623			–
Prepayments and other current assets		138,436			248,148
Total current assets		3,936,284			3,305,830

Property and equipment, net		41,797			47,302
Intangible assets, net		1,583,523			1,634,378
Right of use asset		126,257			260,310
Other assets		–			17,920
Total assets	$	5,687,861		$	5,265,740

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	66,710		$	182,956
Accrued expenses		383,374			319,135
Current portion of lease liability		129,995			183,119
Total current liabilities		580,079			685,210

Long-term debt		91,407			–
Long-term lease liability		–			82,055
Other long-term liabilities		607,974			609,242
Total liabilities		1,279,460			1,376,507

Commitments and contingencies

Stockholders’ equity:
Common stock, $0.001 par value; 50,000,000 shares authorized; 2,976,709 shares issued and 2,975,388 shares outstanding at September 30, 2020, and 2,101,272 shares issued and 2,099,951 shares outstanding at December 31, 2019, respectively		2,977			2,101
Additional paid-in capital		78,419,046			71,242,256
Treasury stock, at cost, 1,321 shares at September 30, 2020 and December 31, 2019		(13,210	)		(13,210	)
Accumulated deficit		(74,000,412	)		(67,341,914	)
Total stockholders’ equity		4,408,401			3,889,233
Total liabilities and stockholders’ equity	$	5,687,861		$	5,265,740

IDEAL POWER INC.

Statements of Operations

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Grant revenue	$	147,787		$	–		$	154,302		$	–
Cost of grant revenue		147,787			–			154,302			–
Gross profit		–			–			–			–

Operating expenses:
Research and development		494,548			250,773			1,161,537			804,741
General and administrative		677,967			471,272			1,773,615			1,520,325
Total operating expenses		1,172,515			722,045			2,935,152			2,325,066

Loss from continuing operations before interest		(1,172,515	)		(722,045	)		(2,935,152	)		(2,325,066	)

Other expenses:
Interest expense, net		1,358			2,763			2,480			3,072
Warrant inducement expense		3,720,866			–			3,720,866			–
Total other expenses		3,722,224			2,763			3,723,346			3,072

Loss from continuing operations		(4,894,739	)		(724,808	)		(6,658,498	)		(2,328,138	)
Loss from discontinued operations		–			(78,796	)		–			(768,047	)
Loss on sale of discontinued operations		–			(9,107	)		–			(9,107	)
Net loss	$	(4,894,739	)	$	(812,711	)	$	(6,658,498	)	$	(3,105,292	)

Loss from continuing operations per share – basic and fully diluted	$	(1.28	)	$	(0.49	)	$	(2.04	)	$	(1.60	)
Loss from discontinued operations per share – basic and fully diluted		–			(0.06	)		–			(0.53	)
Net loss per share – basic and fully diluted	$	(1.28	)	$	(0.55	)	$	(2.04	)	$	(2.13	)

Weighted average number of shares outstanding – basic and fully diluted		3,821,717			1,474,001			3,264,860			1,460,507

IDEAL POWER INC.

Statements of Cash Flows

(unaudited)

	Nine Months Ended September 30,
	2020			2019
Cash flows from operating activities:
Loss from continuing operations	$	(6,658,498	)	$	(2,328,138	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		86,368			82,913
Write-off of capitalized patents		18,235			–
Stock-based compensation		434,782			156,882
Stock issued for services		50,000			–
Warrant inducement expense		3,720,866			–
Decrease in operating assets:
Accounts receivable		(28,623	)		–
Prepayments and other current assets		127,632			204,530
Increase (decrease) in operating liabilities:
Accounts payable		(116,246	)		1,337
Accrued expenses		61,845			6,336
Net cash used in operating activities		(2,303,639	)		(1,876,140	)
Net cash used in operating activities – discontinued operations		–			(557,096	)

Cash flows from investing activities:
Purchase of property and equipment		(12,407	)		(4,253	)
Acquisition of intangible assets		(35,836	)		(74,342	)
Net cash used in investing activities		(48,243	)		(78,595	)
Net cash provided by investing activities – discontinued operations		–			23,587

Cash flows from financing activities:
Proceeds from loans		91,407			–
Proceeds from the exercise of warrants		2,972,018			–
Net cash provided by financing activities		3,063,425			–

Net increase (decrease) in cash and cash equivalents – continuing operations		711,543			(1,954,735	)
Net decrease in cash and cash equivalents – discontinued operations		–			(533,509	)
Cash and cash equivalents at beginning of period		3,057,682			3,258,077
Cash and cash equivalents at end of period	$	3,769,225		$	769,833

IDEAL POWER INC.
Statement of Stockholders’ Equity
For the Three-Month Periods during the Nine Months Ended September 30, 2020 and 2019
(unaudited)

	Common Stock				Preferred Stock						Additional Paid-In Capital			Treasury Stock					Accumulated Deficit			Total Stockholders’ Equity
	Shares		Amount		Shares			Amount						Shares		Amount
Balances at December 31, 2018		1,404,479	$	1,404		1,518,430		$	1,518		$	68,022,484			1,321	$	(13,210	)	$	(63,414,252	)	$	4,597,944
Conversion of preferred stock to common stock		70,843		71		(708,430	)		(708	)		637			—		—			—			—
Stock-based compensation		—		—		—			—			(25,814	)		—		—			—			(25,814	)
Net loss for the three months ended March 31, 2019		—		—		—			—			—			—		—			(1,040,899	)		(1,040,899	)
Balances at March 31, 2019		1,475,322		1,475		810,000			810			67,997,307			1,321		(13,210	)		(64,455,151	)		3,531,231
Stock-based compensation		—		—		—			—			101,843			—		—			—			101,843
Net loss for the three months ended June 30, 2019		—		—		—			—			—			—		—			(1,251,682	)		(1,251,682	)
Balances at June 30, 2019		1,475,322	$	1,475		810,000		$	810		$	68,099,150			1,321	$	(13,210	)	$	(65,706,833	)	$	2,381,392
Stock-based compensation		—		—		—			—			16,692			—		—			—			16,692
Net loss for the three months ended September 30, 2019		—		—		—			—			—			—		—			(812,711	)		(812,711	)
Balances at September 30, 2019		1,475,322	$	1,475		810,000		$	810		$	68,115,842			1,321	$	(13,210	)	$	(66,519,544	)	$	1,585,373

Balances at December 31, 2019		2,101,272	$	2,101		—		$	—		$	71,242,256			1,321	$	(13,210	)	$	(67,341,914	)	$	3,889,233
Stock-based compensation		—		—		—			—			116,497			—		—			—			116,497
Net loss for the three months ended March 31, 2020		—		—		—			—			—			—		—			(930,501	)		(930,501	)
Balances at March 31, 2020		2,101,272		2,101		—			—			71,358,753			1,321		(13,210	)		(68,272,415	)		3,075,229
Stock-based compensation		—		—		—			—			109,671			—		—			—			109,671
Stock issued for services		26,316		26		—			—			49,974			—		—			—			50,000
Exercise of warrants		225,718		226		—			—			175,590			—		—			—			175,816
Net loss for the three months ended June 30, 2020		—		—		—			—			—			—		—			(833,258	)		(833,258	)
Balances at June 30, 2020		2,353,306	$	2,353		—		$	—		$	71,693,988			1,321	$	(13,210	)	$	(69,105,673	)	$	2,577,458
Stock-based compensation		—		—		—			—			208,614			—		—			—			208,614
Exercise of warrants		250,566		251		—			—			248,365			—		—			—			248,616
Early warrant exercise transaction		372,837		373		—			—			2,547,213			—		—			—			2,547,586
Warrant inducement expense		—		—		—			—			3,720,866			—		—			—			3,720,866
Net loss for the three months ended September 30, 2020		—		—		—			—			—			—		—			(4,894,739	)		(4,894,739	)
Balances at September 30, 2020		2,976,709	$	2,977		—		$	—		$	78,419,046			1,321	$	(13,210	)	$	(74,000,412	)	$	4,408,401

November 12, 2020 4:08 pm

Chase Corporation Announces Fiscal Fourth Quarter and Full Year 2020 Results

Chase Corporation Announces Fiscal Fourth Quarter and Full Year 2020 Results

Revenue of $261.2 Million, Earnings Per Diluted Share of $3.59 for the Full Year

Prudent Cost Control Supported Record Cash Balance of $99.1 Million

Declares Dividend of $0.80 Per Share

WESTWOOD, Mass.–(BUSINESS WIRE)–
Chase Corporation (NYSE American: CCF), a global specialty chemicals company that is a leading manufacturer of protective materials for high-reliability applications across diverse market sectors, today announced financial results for the fiscal year and fourth quarter ended August 31, 2020. The Company also announced a cash dividend of $0.80 per share to shareholders of record on November 27, 2020 payable on December 7, 2020.

Full Year 2020 Financial & Recent Operational Highlights

Total Revenue of $261.2 million, compared to $281.4 million in the prior year
Gross Margin of 38%, compared to 36% in the prior year
Net Income of $34.2 million, compared to $32.7 million in the prior year
Adjusted EBITDA of $60.2 million, compared to $65.2 million in the prior year
Free Cash Flow of $54.4 million, compared to $47.0 million in the prior year
Ended fiscal year 2020 with a cash balance of $99.1 million
Completed the sale of two properties in Massachusetts and Rhode Island
Acquired ABchimie for $21.4 million using cash on hand on September 1, 2020 (fiscal 2021)

“Our disciplined focus on margins and cash flow drove solid results for both the quarter and fiscal year despite revenue headwinds resulting from the COVID-19 pandemic. Thanks to the efforts of our dedicated employees, we were safely able to continue meeting the needs of our customers during this challenging time,” said Adam P. Chase, President and Chief Executive Officer of Chase Corporation.

Mr. Chase continued, “Progress was made on all of our core strategic drivers. The ABchimie acquisition demonstrated our commitment to inorganic growth initiatives. This acquisition broadens our electronics coatings product portfolio within the Adhesives, Sealants and Additives reporting segment with high performance, environmentally-friendly technologies that are complementary to our product offerings. ABchimie’s UV LED coating technology provides an exciting low-energy curing solution for this emerging industry trend. The transaction is expected to be immediately accretive to our results but does not represent a significant business combination.”

Added Mr. Chase, “We continue to benefit from our strategic diversification, strength in 5G related demand and an increase in sales of products for electronics applications including new electric vehicle qualifications. This was offset by weakness in oil & gas related products given reduced market activity in this sector. Our product mix was more favorable in the second half of the year and in combination with productivity improvements resulted in a boost to relative gross margins in both the fourth quarter and full fiscal year. Additionally, we were successful in selling our Randolph, MA property in the fourth quarter following last quarter’s Pawtucket, RI facility sale transaction, fully completing these site consolidation initiatives.”

Fiscal Fourth Quarter Financial Highlights

Total Revenue fell 9% to $63.9 million, compared to Q4 FY19
Gross Margin of 38%, compared to 37% in Q4 FY19, due in part to operational efficiencies and sales mix
Selling, General and Administrative expenses increased 2% to $12.3 million from the year-ago period
Income Tax expense of $2.9 million, compared to $2.6 million in the year-ago period
Other Expense totaled $579,000, compared to other income of $113,000 in the year-ago period
Net Income for the fiscal fourth quarter of 2020 was $9.0 million, or $0.95 per diluted share, compared to a Net Income of $10.1 million, or $1.07 per diluted share, for the fiscal fourth quarter of 2019. Adjusted EPS for the quarter was $0.83 per diluted share
Adjusted EBITDA for the fiscal fourth quarter of 2020 was $14.5 million, compared to Adjusted EBITDA of $17.5 million in the prior-year quarter. The reconciliation of Net Income to Adjusted EBITDA is included at the end of this news release
Free Cash Flow in the fiscal fourth quarter of 2020 was $12.7 million, compared to Free Cash Flow of $18.6 million in the prior-year quarter

“We continue to focus on our controllable expenses to mitigate the impact from declining revenue. I am pleased with our financial discipline and ability to drive higher margins and generate cash in this environment,” said Christian J. Talma, Treasurer and Chief Financial Officer of Chase Corporation. “We remain free of debt with a record cash balance of $99.1 million and fully available $150 million credit facility which provide capital for opportunistic investments to bring value to Chase Corporation. This was demonstrated most recently with our all-cash purchase of ABchimie. Our announced dividend of $0.80 per share, which will be paid this coming December, is consistent with that distributed for the prior year.”

Adhesives, Sealants and Additives


	For the Three Months Ended August 31,				For the Year Ended August 31,
	2020		2019		2020		2019
Revenue	$	23,024	$	25,983	$	96,208	$	104,796
Cost of products and services sold		14,071		15,006		55,902		60,345
Gross Margin	$	8,953	$	10,977	$	40,306	$	44,451
Gross Margin %		39%		42%		42%		42%

Adhesives, Sealants and Additives segment revenue decreased $8.6 million or 8% to $96.2 million for the year ended August 31, 2020 compared to $104.8 million in fiscal 2019. The year-over-year decline was primarily due to the electronic and industrial coatings product line’s sales volume decrease. Contributing factors to this decline included North American, European, and Asian automotive and industrial weakness which was exacerbated by COVID-19. The market downturn also affected the royalty received from our licensed manufacturer in Asia. Revenue attributable to the segment’s North American-focused specialty chemical intermediates product line was also down in fiscal 2020.

Industrial Tapes


	For the Three Months Ended August 31,				For the Year Ended August 31,
	2020		2019		2020		2019
Revenue	$	27,029	$	31,520	$	118,960	$	129,845
Cost of products and services sold		17,711		21,956		80,351		93,299
Gross Margin	$	9,318	$	9,564	$	38,609	$	36,546
Gross Margin %		34%		30%		32%		28%

Revenue in the Industrial Tapes segment decreased $10.9 million or 8% to $119.0 million for the year ended August 31, 2020 compared to $129.8 million in fiscal 2019. The decline in revenue was primarily due to lower volume from the North American-focused cable materials product line and the Company’s decision to end an arrangement in which it provided low-margin transitional toll manufacturing services. The decline was partially offset by a volume-driven sales increase in electronic materials into the Asian market, and increased sales of pulling and detection tapes primarily into the North American telecommunication and utility industries.

Corrosion Protection and Waterproofing


	For the Three Months Ended August 31,				For the Year Ended August 31,
	2020		2019		2020		2019
Revenue	$	13,854	$	12,602	$	45,994	$	46,710
Cost of products and services sold		7,695		7,007		25,362		26,519
Gross Margin	$	6,159	$	5,595	$	20,632	$	20,191
Gross Margin %		44%		44%		45%		43%

Sales from the Corrosion Protection and Waterproofing segment decreased $0.7 million or 2% to $46.0 million for the year ended August 31, 2020 compared to $46.7 million for fiscal 2019. This year-over-year reduction was driven by lower sales of the Company’s building envelope products. Partially offsetting the revenue decline were volume and price driven increases in the coating and lining systems product line, and increased sales in both the bridge and highway and pipeline coatings product lines, including sales of our Rye U.K.-produced pipeline products.

More information on COVID-19 updates can be found at the Company website: www.chasecorp.com

About Chase Corporation

Chase Corporation, a global specialty chemicals company that was founded in 1946, is a leading manufacturer of protective materials for high-reliability applications throughout the world. More information can be found on our website https://chasecorp.com/

Use of Non-GAAP Financial Measures

The Company has used non-GAAP financial measures in this press release. Adjusted net income, Adjusted diluted EPS, EBITDA, Adjusted EBITDA and Free cash flow are non-GAAP financial measures. The Company believes that Adjusted net income, Adjusted diluted EPS, EBITDA, Adjusted EBITDA and Free cash flow are useful performance measures as they are used by its executive management team to measure operating performance, to allocate resources to enhance the financial performance of its business, to evaluate the effectiveness of its business strategies and to communicate with its board of directors and investors concerning its financial performance. The Company believes Adjusted net income, Adjusted diluted EPS, EBITDA, Adjusted EBITDA and Free cash flow are commonly used by financial analysts and others in the industries in which the Company operates, and thus provide useful information to investors. However, Chase’s calculation of Adjusted net income, Adjusted diluted EPS, EBITDA, Adjusted EBITDA and Free cash flow may not be comparable to similarly-titled measures published by others. Non-GAAP financial measures should be considered in addition to, and not as an alternative to, the Company’s reported results prepared in accordance with GAAP. This press release provides reconciliations from the most directly comparable financial measure presented in accordance with U.S. GAAP to each non-GAAP financial measure.

Cautionary Note Concerning Forward-Looking Statements

Certain statements in this press release are forward-looking. These may be identified by the use of forward-looking words or phrases such as “believe”; “expect”; “anticipate”; “should”; “planned”; “estimated” and “potential”, among others. These forward-looking statements are based on Chase Corporation’s current expectations. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for such forward-looking statements. To comply with the terms of the safe harbor, the Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance and that a variety of factors could cause the Company’s actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company’s forward-looking statements. The risks and uncertainties which may affect the operations, performance, development and results of the Company’s business include, but are not limited to, the following: uncertainties relating to economic conditions; uncertainties relating to customer plans and commitments; the pricing and availability of equipment, materials and inventories; technological developments; performance issues with suppliers and subcontractors; economic growth; delays in testing of new products; the Company’s ability to successfully integrate acquired operations; the effectiveness of cost-reduction plans; rapid technology changes; the highly competitive environment in which the Company operates; as well as expected impact of the coronavirus disease (COVID-19) pandemic on the Company’s businesses. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

The following table summarizes the Company’s unaudited financial results for the three months and years ended August 31, 2020 and 2019.


	For the Three Months Ended August 31,				For the Year Ended August 31,
*All figures in thousands, except per share figures*	2020		2019		2020		2019
Revenue	$	63,907	$	70,105	$	261,162	$	281,351
Costs and Expenses
Cost of products and services sold		39,477		43,969		161,615		180,163
Selling, general and administrative expenses		12,338		12,091		49,364		48,707
Research and product development costs		963		938		4,007		4,021
Operations optimization costs		(170)		533		807		986
Acquisition-related costs		121		—		274		—
Gain on sale of real estate		(1,791)		—		(2,551)		—
Write-down on certain assets under construction		405		—		405		—
Loss on impairment of goodwill		—		—		—		2,410
Operating income		12,564		12,574		47,241		45,064
Interest expense		(68)		(62)		(246)		(519)
Other income (expense)		(579)		113		(1,675)		(992)
Income before income taxes		11,917		12,625		45,320		43,553
Income taxes		2,909		2,551		11,163		10,842
Net income	$	9,008	$	10,074	$	34,157	$	32,711
Net income per diluted share	$	0.95	$	1.07	$	3.59	$	3.46
Weighted average diluted shares outstanding		9,451		9,384		9,440		9,379
Reconciliation of net income to EBITDA and adjusted EBITDA
Net income	$	9,008	$	10,074	$	34,157	$	32,711
Interest expense		68		62		246		519
Income taxes		2,909		2,551		11,163		10,842
Depreciation expense		1,026		1,128		4,015		4,762
Amortization expense		2,852		3,106		11,576		12,445
EBITDA	$	15,863	$	16,921	$	61,157	$	61,279
Operations optimization costs		(170)		533		807		986
Acquisition-related costs		121		—		274		—
Gain on sale of real estate		(1,791)		—		(2,551)		—
Write-down of certain assets under construction		405		—		405		—
Loss on impairment of goodwill		—		—		—		2,410
Pension settlement costs		80		27		155		511
Adjusted EBITDA	$	14,508	$	17,481	$	60,247	$	65,186


	For the Three Months Ended August 31,				For the Year Ended August 31,
	2020		2019		2020		2019
Reconciliation of net income to adjusted net income
Net income	$	9,008	$	10,074	$	34,157	$	32,711
Transitional impact of the Tax Cuts and Jobs Act, net		—		—		—		(140)
Excess tax benefit related to ASU No. 2016-09		(1)		(157)		(149)		(157)
Operations optimization costs		(170)		533		807		986
Acquisition-related costs		121		—		274		—
Gain on sale of real estate		(1,791)		—		(2,551)		—
Write-down of certain assets under construction		405		—		405		—
Loss on impairment of goodwill		—		—		—		2,410
Pension settlement costs		80		27		155		511
Income taxes ^*		285		(118)		191		(821)
Adjusted net income	$	7,937	$	10,359	$	33,289	$	35,500
Adjusted net income per diluted share (Adjusted diluted EPS)	$	0.83	$	1.10	$	3.50	$	3.76

* For the years ended August 31, 2020 and 2019 represents the aggregate tax effect assuming a 21% tax rate for the items impacting pre-tax income, which is our effective U.S. statutory Federal tax rate for fiscal 2020 and 2019.


	For the Three Months Ended August 31,				For the Year Ended August 31,
	2020		2019		2020		2019
Reconciliation of cash provided by operations to free cash flow
Net cash provided by operating activities	$	13,069	$	19,260	$	55,734	$	49,535
Purchases of property, plant and equipment		(327)		(647)		(1,371)		(2,488)
Free cash flow	$	12,742	$	18,613	$	54,363	$	47,047

View source version on businesswire.com: https://www.businesswire.com/news/home/20201112006078/en/

Investor & Media Contact:

Michael Cummings or Jackie Marcus

Alpha IR Group

Phone: (617) 982-0475

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KEYWORDS: United States North America Massachusetts

INDUSTRY KEYWORDS: Electronic Design Automation Semiconductor Chemicals/Plastics Technology Manufacturing Other Manufacturing Hardware

MEDIA:

November 12, 2020 4:08 pm

Palantir Reports Revenue Growth of 52% in the Third Quarter, Raises Full-Year 2020 Guidance

Palantir Reports Revenue Growth of 52% in the Third Quarter, Raises Full-Year 2020 Guidance

New Contracts with U.S. Army and National Institutes of Health;

$300 Million Renewal with Aerospace Customer Announced

DENVER–(BUSINESS WIRE)–
Palantir Technologies Inc. (NYSE: PLTR) reported its financial results today for the third quarter of 2020.

Summary

$289.4 million in revenue in the third quarter, up 52% year-over-year

Full-year 2020 revenue guidance raised to a range of $1.070 billion to $1.072 billion, up 44% year-over-year

New contracts in third quarter include U.S. Army ($91 million), National Institutes of Health ($36 million), and $300 million renewal with aerospace customer

Management Commentary

Overview

Our growth and momentum across the business have continued.

We generated $289.4 million in revenue in the third quarter of 2020, representing an increase of 52% from the third quarter of 2019, when we generated $190.5 million in revenue.

The demand for our software has increased steadily over the past year in the face of significant economic and geopolitical uncertainty in the United States and abroad.

We are increasing our guidance for our full-year revenue in 2020 to a range of $1.070 billion to $1.072 billion, which would represent a growth rate of 44% over the prior year, when we generated $743 million in revenue.

Financial Results

Our operating results have continued to show significant improvement.

In the third quarter of 2020, we generated revenue of $289.4 million, up 52% year-over-year, which is approximately $9 million above the high end of our prior guidance range.

We incurred a loss from operations of $847.8 million, which includes $847.0 million in stock-based compensation following our recent direct listing.

Our income from operations was $73.1 million when adjusting for $847.0 million in stock-based compensation, $20.2 million in related employer payroll taxes, and $53.7 million in expenses related to the listing.

The demand for our software from customers in both the commercial and government sectors has continued to increase this year.

In the three months ended September 30, 2020, we closed fifteen deals with new and existing customers, each worth $5 million or more in total contract value, including contracts with the U.S. Army and National Institutes of Health, as well as a contract renewal with one of the world’s largest aerospace companies worth $300 million in total contract value over five years.

The average revenue generated per customer through the first nine months of 2020 was $5.8 million, up from $4.2 million per customer, or 38%, from the same period the year before.

Our customer concentration is decreasing. In the nine months ended September 30, 2020, revenue from our top twenty customers constituted 61% of our total revenue for the period, down from 68% in the first nine months of 2019.

We continue to have significant cash reserves. As of September 30, 2020, we had a total of cash and cash equivalents of $1.8 billion.

Government

The U.S. government sector remains a primary area of focus for our business.

Our work with healthcare organizations across the federal government has accelerated this year, and we continue to expand our reach with the nation’s defense and intelligence agencies, including the U.S. Army, Navy, and Air Force.

In September 2020, we were selected among 999 bids for a two-year, $91 million contract with the U.S. Army Research Laboratory to provide artificial intelligence and machine learning capabilities for military planning and defense operations.

Our work with partners across the U.S. federal government in responding to the coronavirus pandemic has increased significantly in recent months.

We were selected in September 2020 by the National Center for Advancing Translational Sciences (NCATS), a federal research organization based in Bethesda, Maryland, and operating under the U.S. National Institutes of Health (NIH), for a $36 million contract to provide our software to the agency for cancer and coronavirus research.

Our software is now being used for coronavirus response and research efforts by the National COVID Cohort Collaborative (N3C), a program run under the NIH that maintains the largest clinical data asset in the world regarding the development of the coronavirus. As part of the research effort, our software was used to integrate clinical data from more than one million patients in the United States in a matter of weeks.

The company’s efforts to assist foreign governments in their response to the coronavirus continues in countries around the world.

In the United Kingdom, for example, our software has been used by the National Health Service to allocate and distribute more than 2.7 billion items of personal protective equipment across the country.

Commercial

We are continuing to see significant momentum in our business across the commercial sector this year, both in the United States and abroad.

In September 2020, we closed a five-year contract renewal with a customer in the aerospace industry that is worth $300 million in total contract value, representing our largest ever contract in the commercial sector.

The lead time for customers to begin using our software has fallen sharply this year, and organizations continue to expand access to our platforms to users across their operations.

An oil and gas customer, one of the largest energy companies in the world, identified a new opportunity to use our software to save costs in connection with oil exploration activities and generated $57 million in cash savings within weeks of starting to use our platform.

The energy company identified an additional $315 million in cost savings opportunities using our software, and the company’s management is currently targeting $1 billion in total savings in the coming year through the use of our platform.

Our software has also been used widely by customers across industries, including the automotive, manufacturing, aviation, healthcare, and banking sectors, to adjust their operations in response to the coronavirus pandemic.

A major consumer goods company in the United States recently turned to Palantir after an investment of more than one hundred million dollars in another enterprise software platform failed to produce results.

The customer began using our software within days to help address disruptions to its supply chain as a result of the pandemic. The company has since expanded its use of the platform to identify cost savings in raw material purchases across its business.

International Expansion

Our expansion in a number of markets abroad continues, including in Japan.

In June 2020, we selected Sompo Holdings, Inc., the Tokyo-based insurance company and Japan’s leading nursing care provider, as our strategic partner. The company is currently one of our most significant shareholders, following its approximately $500 million investment in Palantir this year.

“Sompo’s work is vital to Japan’s welfare and security, and Kengo Sakurada, the company’s group chief executive officer, has been a critical and trusted partner as we work with Sompo to expand our reach in Asia,” said Alexander C. Karp, co-founder and chief executive officer of Palantir Technologies Inc.

We believe that our market opportunity in Japan and the broader region will be significant over the long term.

Our expansion in Asia builds on our already significant presence outside North America, including in Europe, the Middle East, and increasingly South America.

Financial Outlook

We are increasing our revenue guidance for this year and now expect the business to generate a total of $1.070 billion to $1.072 billion in annual revenue in 2020, up 44% year-over-year.

Our annual adjusted operating income in 2020 is expected to be $130 million to $136 million, which excludes stock-based compensation, related employer payroll taxes, and expenses primarily related to our direct listing.

In the fourth quarter of 2020, we expect revenue of $299 million to $301 million, up 30% to 31% from last year, when we generated $229 million in revenue.

Our adjusted operating income for the fourth quarter of 2020 is expected to be $44 million to $50 million, which excludes stock-based compensation and related employer payroll taxes.

We continue to expect that year-over-year revenue growth in 2021 will be greater than 30%.

Non-GAAP Financial Measures

This press release and the accompanying tables contain the non-GAAP financial measure income (loss) from operations, excluding stock-based compensation, related employer payroll taxes, and expenses primarily related to the direct listing.

We believe this non-GAAP financial measure helps us evaluate our business, identify trends affecting Palantir’s business, formulate business plans and financial projections, and make strategic decisions. We exclude stock-based compensation, which is a non-cash expense, from this non-GAAP financial measure because we believe that excluding this item provides meaningful supplemental information regarding operational performance and provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team. Additionally, we exclude expenses primarily related to the direct listing, as they are a one-time nonrecurring charge and employer payroll taxes related to stock-based compensation as it is difficult to predict and outside of the control of the Company. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish this or similar metrics. Further, this metric has certain limitations, as it does not include the impact of certain expenses that are reflected in our consolidated statement of operations. Thus, our non-GAAP financial measure income (loss) from operations, excluding stock-based compensation, related employer payroll taxes, and expenses primarily related to the direct listing should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.

We compensate for these limitations by providing a reconciliation of this non-GAAP measure to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in its entirety, not to rely on any single financial measure, and to view this non-GAAP measure in conjunction with the most directly comparable GAAP financial measure.

A reconciliation table of the most comparable GAAP financial measure to the non-GAAP financial measure used in this press release are included with the financial tables at the end of this release. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, reconciling items that may be incurred in the future such as stock-based compensation, and related employer payroll taxes, the effect of which may be significant.

Additional Definitions

For the purpose of this press release, total contract value includes contractual obligations over the applicable term, including any obligations that are subject to termination for convenience provisions, and any contractual options available to the customer.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook, product development, business strategy and plans, market trends and market size, opportunities, and positioning. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Words such as “guidance,” “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “plan,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall,” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to risks detailed in our filings with the Securities and Exchange Commission (the “SEC”), including in our prospectus filed with the SEC pursuant to Rule 424(b), dated September 22, 2020 (the “Prospectus”), our quarterly report on Form 10-Q for the quarter ended September 30, 2020, and other filings and reports that we may file from time to time with the SEC. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: our ability to successfully execute our business and growth strategy; the sufficiency of our cash and cash equivalents to meet our liquidity needs; the demand for our platforms in general; our ability to increase our number of new customers and revenue generated from customers; our ability to realize some or all of the total contract value of customer contracts as revenue, including any contractual options available to customers or contractual periods that are subject to termination for convenience provisions; our long and unpredictable sales cycle; our ability to retain and expand our customer base; the fluctuation of our results of operations and our key business measures on a quarterly basis in future periods; the seasonality of our business; the complexity and lengthy implementation process for our platforms; our ability to successfully develop and deploy new technologies to address the needs of our customers; our ability to make our platforms easier to install and consume, our ability to maintain and enhance our brand and reputation; news or social media coverage about us, including but not limited to coverage that presents, or relies on, inaccurate, misleading, incomplete, or otherwise damaging information; and any breach or access to customer or third-party data.

The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. Past performance is not necessarily indicative of future results.

For additional information on other potential risks and uncertainties that could cause actual results to differ from the results predicted, please see our Prospectus, our quarterly report on Form 10-Q for the quarter ended September 30, 2020, and other filings and reports that we may file from time to time with the SEC.

Earnings Webcast

A public webcast will be held at 3:00 p.m. MT / 5:00 p.m. ET today to discuss the results for our third quarter ended September 30, 2020 and financial outlook. The live public call can be accessed by registering online at https://event.on24.com/wcc/r/2807592/C75D1314E9AB57402C2D1DB77536ECE5. Following the call, a recorded replay of the webcast will be available via phone at (800) 585-8367 or (416) 621-4642, until midnight (ET) on Thursday, November 19, 2020.

A slide presentation including supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures will be available through Palantir’s Investor Relations website at https://investors.palantir.com.

Available Information

Palantir uses its Investor Relations website at https://investors.palantir.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Palantir’s Investor Relations website, in addition to following press releases, SEC filings, public conference calls, and webcasts.

About Palantir

Palantir Technologies Inc. (NYSE: PLTR) is a software company that builds enterprise data platforms for use by organizations with complex and sensitive data environments. From building safer cars and planes, to discovering new drugs and combating terrorism, Palantir helps customers across the public and private sectors transform the way they use their data. The company is based in Denver, Colorado. Additional information is available at www.palantir.com.

Condensed Consolidated Statements of Operations (in thousands, except share and per share amounts) (unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Revenue	$	289,366		$	190,541		$	770,582		$	513,197
Cost of revenue⁽¹⁾	149,340			65,073			282,044			166,471
Gross profit	140,026			125,468			488,538			346,726
Operating expenses:
Sales and marketing⁽¹⁾	334,911			119,666			536,082			337,255
Research and development⁽¹⁾	313,915			75,880			466,530			229,728
General and administrative⁽¹⁾	338,977			74,062			503,033			208,736
Total operating expenses	987,803			269,608			1,505,645			775,719
Loss from operations	(847,777		)	(144,140		)	(1,017,107		)	(428,993		)
Interest income	494			3,390			4,312			12,953
Interest expense	(2,085		)	(173		)	(12,325		)	(395		)
Change in fair value of warrants	(9,201		)	784			811			2,743
Other income (expense), net	(3,293		)	2,305			1,218			1,858
Loss before provision for income taxes	(861,862		)	(137,834		)	(1,023,091		)	(411,834		)
Provision (benefit) for income taxes	(8,543		)	2,026			(5,043		)	8,485
Net loss	$	(853,319	)	$	(139,860	)	$	(1,018,048	)	$	(420,319	)
Net loss per share attributable to common stockholders, basic	$	(0.94	)	$	(0.24	)	$	(1.43	)	$	(0.73	)
Net loss per share attributable to common stockholders, diluted	$	(0.94	)	$	(0.24	)	$	(1.43	)	$	(0.73	)
Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders, basic	905,462,010			580,104,846			713,879,104			574,342,061
Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders, diluted	905,462,010			580,104,846			716,027,459			574,342,061

__________

⁽¹⁾ Includes stock-based compensation expense as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cost of revenue	$	94,385	$	7,183	$	120,285	$	16,520
Sales and marketing	263,958		15,898		322,353		56,242
Research and development	256,769		15,031		309,698		49,137
General and administrative	231,847		13,651		276,578		42,751
Total stock-based compensation expense ⁽ⁱ⁾	$	846,959	$	51,763	$	1,028,914	$	164,650

__________
⁽ⁱ⁾	On September 30, 2020, in connection with the Direct Listing, we incurred $769.5 million and $8.4 million of stock-based compensation using the accelerated attribution method related to the satisfaction of the performance-based vesting condition for RSUs and growth units, respectively, that had satisfied the service-based vesting condition as of such date.

Condensed Consolidated Balance Sheets (in thousands, except share and per share amounts) (unaudited)

	As of September 30,		As of December 31,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	1,800,190	$	1,079,154
Restricted cash	43,800		52,099
Accounts receivable	162,269		50,315
Prepaid expenses and other current assets	388,165		32,585
Total current assets	2,394,424		1,214,153
Property and equipment, net	29,369		31,589
Restricted cash, noncurrent	86,343		270,709
Other assets	93,576		77,574
Total assets	$	2,603,712	$	1,594,025
Liabilities, Redeemable Convertible and Convertible Preferred Stock, and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	22,221	$	51,735
Accrued liabilities	466,999		126,620
Deferred revenue	172,066		186,105
Customer deposits	280,901		364,138
Total current liabilities	942,187		728,598
Deferred revenue, noncurrent	67,064		77,030
Customer deposits, noncurrent	102,231		167,538
Debt, noncurrent, net	197,753		396,065
Other noncurrent liabilities	42,724		78,205
Total liabilities	1,351,959		1,447,436
Commitments and Contingencies
Redeemable convertible preferred stock	—		33,569
Convertible preferred stock	—		2,093,662
Stockholders’ equity (deficit):
Common stock	1,727		588
Additional paid-in capital	6,065,869		1,857,331
Treasury stock	—		(38,895)
Accumulated other comprehensive income (loss)	1,168		(703)
Accumulated deficit	(4,817,011)		(3,798,963)
Total stockholders’ equity (deficit)	1,251,753		(1,980,642)
Total liabilities, redeemable convertible and convertible preferred stock, and stockholders’ equity (deficit)	$	2,603,712	$	1,594,025

Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)

	Nine Months Ended September 30,
	2020			2019
Operating activities
Net loss	$	(1,018,048	)	$	(420,319	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	10,308			9,450
Stock-based compensation	1,028,914			164,650
Amortization of debt issuance costs	2,319			87
Change in fair value of warrants	(811		)	(2,743		)
Loss from equity method investments	1,439			—
Impairment of assets	674			—
Changes in operating assets and liabilities:
Accounts receivable	(112,723		)	(96,142		)
Prepaid expenses and other current assets	(16,434		)	(8,045		)
Other assets	(14,192		)	(6,393		)
Accounts payable	(29,372		)	(21,133		)
Accrued liabilities	33,634			12,105
Deferred revenue, current and noncurrent	(30,937		)	(226,829		)
Customer deposits, current and noncurrent	(140,162		)	102,100
Other noncurrent liabilities	7,071			(6,836		)
Net cash used in operating activities	(278,320		)	(500,048		)
Investing activities
Purchases of property and equipment	(7,475		)	(10,947		)
Purchase of equity method investment	(2,500		)	—
Net cash used in investing activities	(9,975		)	(10,947		)
Financing activities
Proceeds from the issuance of common stock, net of issuance costs	942,529			100,000
Proceeds from issuance of debt, net of issuance costs	199,369			—
Principal payments on borrowings	(400,000		)	—
Proceeds from the exercise of common stock options	79,473			9,337
Repurchase of common stock	(3,777		)	(7,073		)
Proceeds from the sale of redeemable convertible preferred stock	—			7,500
Redemption of redeemable convertible preferred stock	—			(168,000		)
Other financing activities	(250		)	(1,198		)
Net cash provided by (used in) financing activities	817,344			(59,434		)
Effect of foreign exchange on cash, cash equivalents, and restricted cash	(678		)	(2,992		)
Net increase (decrease) in cash, cash equivalents, and restricted cash	528,371			(573,421		)
Cash, cash equivalents, and restricted cash – beginning of period	1,401,962			1,266,835
Cash, cash equivalents, and restricted cash – end of period	$	1,930,333		$	693,414

Non-GAAP Reconciliation

*Income (Loss) from Operations, Excluding Stock-Based Compensation, Related Employer Payroll Taxes, and Non-Recurring Direct Listing Charges ⁽¹⁾*

	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019
Loss from operations	$(847,777)	$(144,140)	$(1,017,107)	$(428,993)
Add: stock-based compensation	846,959	51,763	1,028,914	164,650
Add: employer payroll taxes related to stock-based compensation	20,172	—	20,172	—
Add: non-recurring direct listing charges	53,737	—	53,737	—
Income (loss) from operations, excluding stock-based compensation, related employer payroll taxes, and non-recurring direct listing charges	$73,091	$(92,377)	$85,716	$(264,343)

__________

⁽¹⁾ Related employer payroll taxes and non-recurring direct listing charges were immaterial and as such were not excluded in periods prior to Q3 2020.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201112006077/en/

Investor Relations

Rodney Nelson

[email protected]

Media

Lisa Gordon

[email protected]

Palantir Technologies Inc.

1555 Blake Street, Suite 250

Denver, Colorado 80202

www.palantir.com

KEYWORDS: Colorado United States North America

INDUSTRY KEYWORDS: Software Technology Data Management

MEDIA:

Logo

November 12, 2020 4:08 pm

Salem Media Group, Inc. Announces Third Quarter 2020 Total Revenue of $60.6 Million

CAMARILLO, Calif.–(BUSINESS WIRE)–
Salem Media Group, Inc. (Nasdaq: SALM) released its results for the three and nine months ended September 30, 2020.

Third Quarter 2020 Highlights

Net broadcast revenue increased 15.0% compared to the second quarter of 2020 and declined 4.8% compared to the third quarter of 2019
Total broadcast advertising/spot revenue increased 26.4% compared to the second quarter of 2020 and declined 21.7% compared to the third quarter of 2019
Station Operating Income (“SOI”) (1) increased 74.2% compared to the second quarter of 2020 and increased 7.1% compared to the third quarter of 2019
Digital media revenue increased 3.9% compared to the second quarter of 2020 and 7.2% compared to the third quarter of 2019
Adjusted EBITDA increased 243.4% compared to the second quarter of 2020 and 6.9% compared to the third quarter of 2019
$19.3 million in cash at September 30, 2020

Third Quarter 2020 Results

For the quarter ended September 30, 2020 compared to the quarter ended September 30, 2019:

Consolidated

Total revenue decreased 5.4% to $60.6 million from $64.1 million;
Total operating expenses decreased 28.9% to $55.9 million from $78.6 million;
Operating expenses, excluding gains or losses on the disposition of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense (1) decreased 7.4% to $51.0 million from $55.1 million;
The company had operating income of $4.8 million compared to an operating loss of $14.5 million;
The company’s net income increased $20.3 million to $0.3 million, or $0.01 net income per diluted share compared to a net loss of $20.0 million, or $0.75 net loss per share;
EBITDA (1) was $8.2 million compared to negative EBITDA of $10.6 million;
Adjusted EBITDA (1) increased 6.9% to $9.6 million from $9.0 million; and
Net cash provided by operating activities decreased 37.7% to $4.2 million from $6.7 million.

Broadcast

Net broadcast revenue decreased 4.8% to $45.4 million from $47.7 million;
SOI(1) increased 7.1% to $11.1 million from $10.4 million;
Same Station (1) net broadcast revenue decreased 2.4% to $44.6 million from $45.7 million; and
Same Station SOI (1) increased 2.7% to $11.1 million from $10.8 million.

Digital Media

Digital media revenue increased 7.2% to $9.8 million from $9.1 million; and
Digital Media Operating Income (1) increased 42.7% to $2.7 million from $1.9 million.

Publishing

Publishing revenue decreased 25.3% to $5.4 million from $7.3 million; and
Publishing Operating Income (Loss) (1) decreased to an operating loss of $0.4 million from operating income of $0.8 million.

Included in the results for the quarter ended September 30, 2020 are:

A $1.4 million ($1.0 million, net of tax, or $0.04 per share) net loss on the disposition of assets which includes a $1.4 million estimated pre-tax loss for the write-off of Miami assets as a result of the company’s plan to exit the market and reflects various fixed asset disposals; and
A $0.1 million non-cash compensation charge related to the expensing of stock options.

Included in the results for the quarter ended September 30, 2019 are:

A $17.5 million ($13.0 million, net of tax, or $0.49 per share) net loss on the disposition of assets which includes a $9.9 million estimated pre-tax loss for the pending sale of radio stations WAFS-AM in Atlanta, Georgia, WWDJ-AM in Boston, Massachusetts, WHKZ-AM in Cleveland, Ohio, KEXB-AM (formerly KTNO-AM) in Dallas, Texas, KDMT-AM in Denver, Colorado, KTEK-AM in Houston, Texas, KRDY-AM in San Antonio, Texas and KXFN-AM and WSDZ-AM in St. Louis, Missouri, a $4.7 million pre-tax loss from the sale of radio stations WWMI-AM and WLCC-AM in Tampa, Florida and WZAB-AM and WOCN-AM (formerly WKAT-AM) in Miami, Florida, a $1.6 million pre-tax loss from the sale of radio station WDYZ-AM (formerly WORL-AM) in Orlando, Florida and a $1.3 million pre-tax loss on the exchange of radio station KKOL-AM in Seattle, Washington for KPAM-AM in Portland, Oregon;
A $1.9 million impairment charge ($1.4 million, net of tax, and $0.05 per share) associated with the company’s broadcast licenses. Broadcast licenses were deemed to be impaired in four of the seven markets tested. Impairments were recorded in its Louisville, Philadelphia, Portland and San Francisco markets; and
A $0.2 million non-cash compensation charge ($0.1 million, net of tax) related to the expensing of stock options primarily consisting of:
- $0.1 million non-cash compensation charge included in corporate expenses; and
- $0.1 million non-cash compensation charge included in broadcast, digital media and publishing operating expenses.

Per share numbers are calculated based on 26,791,353 diluted weighted average shares for the quarter ended September 30, 2020, and 26,616,696 diluted weighted average shares for the quarter ended September 30, 2019.

Year to Date 2020 Results

For the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019:

Consolidated

Total revenue decreased 9.2% to $171.8 million from $189.3 million;
Total operating expenses decreased 6.6% to $185.9 million from $199.1 million;
Operating expenses, excluding gains or losses on the disposition of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense decreased 4.2% to $155.9 million from $162.7 million;
The company’s net operating loss increased 43.3% to $14.1 million from $9.9 million;
The company’s net loss increased to $57.4 million, or $2.15 net loss per share from $23.3 million, or $0.88 net loss per share;
EBITDA (1) was a negative $3.5 million as compared to $2.7 million;
Adjusted EBITDA (1) decreased 40.8% to $15.9 million from $26.8 million; and
Net cash provided by operating activities increased 59.9% to $23.1 million from $14.5 million.

Broadcast

Net broadcast revenue decreased 9.0% to $130.0 million from $142.9 million;
SOI (1) decreased 19.3% to $25.3 million from $31.4 million;
Same station (1) net broadcast revenue decreased 6.6% to $127.6 million from $136.6 million; and
Same station SOI (1) decreased 20.6% to $25.7 million from $32.3 million.

Digital media

Digital media revenue decreased 3.4% to $28.4 million from $29.3 million; and
Digital media operating income (1) decreased 17.7% to $5.2 million from $6.4 million.

Publishing

Publishing revenue decreased 21.7% to $13.4 million from $17.1 million; and
Publishing Operating Loss (1) increased to $3.1 million from $0.1 million.

Included in the results for the nine months ended September 30, 2020 are:

A $1.5 million ($1.1 million, net of tax, or $0.04 per share) net loss on the disposition of assets which includes a $1.4 million estimated pre-tax loss for the write-off of Miami assets as a result of the company’s plan to exit the market and reflects various fixed asset disposals;
A $17.3 million impairment charge ($12.8 million, net of tax, or $0.48 per share), of which $0.3 million related to impairment of mastheads, and the remainder to broadcast licenses due to the financial impact of the COVID-19 pandemic;
A $0.3 million impairment charge ($0.2 million, net of tax, or $0.01 per share) related to the company’s goodwill; and
A $0.3 million non-cash compensation charge ($0.2 million, net of tax, or $0.01 per share) related to the expensing of stock options primarily consisting of:
- $0.1 million non-cash compensation charge included in corporate expenses; and
- $0.1 million non-cash compensation charge included in broadcast operating expenses; and
- the remaining $0.1 million non-cash compensation charge included in digital media and publishing operating expenses.

Included in the results for the nine months ended September 30, 2019 are:

A $21.2 million ($15.7 million, net of tax, or $0.59 per share) net loss on the disposition of assets which includes a $9.9 million estimated pre-tax loss for the pending sale of radio stations WAFS-AM in Atlanta, Georgia, WWDJ-AM in Boston, Massachusetts, WHKZ-AM in Cleveland, Ohio, KEXB-AM (formerly KTNO-AM) in Dallas, Texas, KDMT-AM in Denver, Colorado, KTEK-AM in Houston, Texas, KRDY-AM in San Antonio, Texas and KXFN-AM and WSDZ-AM in St. Louis, Missouri, the $4.7 million pre-tax loss from the sale of radio stations WWMI-AM and WLCC-AM in Tampa, Florida and WZAB-AM and WOCN-AM (formerly WKAT-AM) in Miami, Florida, a $3.8 million pre-tax loss on the sale of radio station WSPZ-AM in Washington, D.C., a $1.6 million pre-tax loss from the sale of radio station WDYZ-AM (formerly WORL-AM) in Orlando, Florida, a $1.3 million pre-tax loss on the exchange of radio station KKOL-AM in Seattle, Washington for KPAM-AM in Portland, Oregon, a $0.2 million pre-tax loss on the sale Mike Turner’s line of investment products and a $0.2 million pre-tax loss on the sale of HumanEvents.com offset by a $0.4 million pre-tax gain on the sale of a portion of land on the company’s transmitter site in Miami, Florida and a $0.1 million pre-tax gain on the sale of Newport Natural Health;
A $1.9 million impairment charge ($1.4 million, net of tax, and $0.05 per share) associated with the company’s broadcast licenses. Broadcast licenses were deemed to be impaired in four of the seven markets tested. Impairments were recorded in its Louisville, Philadelphia, Portland and San Francisco markets;
A $0.4 million gain ($0.3 million, net of tax, or $0.01 per diluted share) on early redemption of long-term debt due to the repurchase of the company’s 6.75% senior secured notes due 2024;
A $0.2 million one-time expense associated with the adoption of ASC 842 ($0.1 million, net of tax) and
A $1.3 million non-cash compensation charge ($1.0 million, net of tax, or $0.04 per share) related to the expensing of stock options and restricted stock primarily consisting of:
- $0.7 million non-cash compensation charge included in corporate expenses; and
- $0.5 million non-cash compensation charge included in broadcast operating expenses; and
- the remaining $0.1 million non-cash compensation charge included in digital media and publishing operating expenses.

Per share numbers are calculated based on 26,683,363 diluted weighted average shares for the nine months ended September 30, 2020, and 26,442,791 diluted weighted average shares for the nine months ended September 30, 2019.

Balance Sheet

As of September 30, 2020, the company had $216.3 million outstanding on the 6.75% senior secured notes due 2024 (the “Notes”) and $16.6 million outstanding on the Asset Based Revolving Credit Facility (“ABL Facility”).

Acquisitions and Divestitures

The following transactions were completed since July 1, 2020:

On September 15, 2020, the company acquired the Hyper Pixels Media website and related assets for $1.1 million in cash. The company paid $0.4 million in cash upon closing with deferred payments of $0.4 million due January 31, 2021 and $0.3 million due September 15, 2021. The company recorded goodwill of approximately $0.1 million associated with the expected synergies to be realized upon combining the operations of Journeyboxmedia.com into the company’s digital media platform within Salem Web Network and from brand loyalty from its existing subscriber base that is not a separately identifiable intangible asset.

Pending transactions:

On September 10, 2020, the company entered an Asset Purchase Agreement (“APA”) to sell radio station WKAT-AM and an FM translator in Miami, Florida, for $3.5 million in cash. The company will exit the Miami market upon the close of this transaction. The company entered a Local Marketing Agreement under which the buyer will being programming the station in November 2020. The company recognized an estimated pre-tax loss of approximately $1.4 million during the quarter ending September 30, 2020, which reflects the sale price as compared to the carrying value of the assets sold, the estimated closing costs, and the write-off of the remaining Miami assets as a result of exiting this market. This transaction is subject to the approval of the FCC and is expected to close in the fourth quarter of 2021.
On February 5, 2020, we entered an APA with Word Broadcasting to sell radio stations WFIA-AM, WFIA-FM and WGTK-AM in Louisville, Kentucky for $4.0 million with a $250,000 credit applied to the sale price if closing occurs before March 31, 2020. Additionally, Word Broadcasting would receive a credit toward the purchase price of a sum equal to the monthly fees paid under the Time Brokerage Agreement (“TBA”) that began in January 2017 for months 4-29 of the TBA and a sum equal to $2,000 per month for each monthly fee payment for months 30 and thereafter of the TBA; and a credit of the $450,000 option payment. We estimated the loss on sale to be approximately $0.5 million net of tax if the sale closed by March 31, 2020 and $0.3 million net of tax if the sale closes later. Due to changes in debt markets, the transaction was not funded and it is uncertain when or if the transaction will close.

Conference Call Information

Salem will host a teleconference to discuss its results on November 12, 2020 at 2:00 p.m. Pacific Time. To access the teleconference, please dial (877) 524-8416, and then ask to be joined into the Salem Media Group Third Quarter 2020 call or listen via the investor relations portion of the company’s website, located at investor.salemmedia.com. A replay of the teleconference will be available through November 26, 2020 and can be heard by dialing (877) 660-6853, passcode 13708311 or on the investor relations portion of the company’s website, located at investor.salemmedia.com.

A reconciliation of non-GAAP operating expenses, excluding gains or losses on the disposition of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense to the most directly comparable GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the potential high variability, complexity and low visibility with respect to the charges excluded from this non-GAAP financial measure, in particular, the change in the estimated fair value of earn-out consideration, impairments and gains or losses from the disposition of fixed assets. The company expects the variability of the above charges may have a significant, and potentially unpredictable, impact on its future GAAP financial results.

About Salem Media Group, Inc.

Salem Media Group is America’s leading multimedia company specializing in Christian and conservative content, with media properties comprising radio, digital media and book and newsletter publishing. Each day Salem serves a loyal and dedicated audience of listeners and readers numbering in the millions nationally. With its unique programming focus, Salem provides compelling content, fresh commentary and relevant information from some of the most respected figures across the Christian and conservative media landscape. Learn more about Salem Media Group, Inc., at www.salemmedia.com, Facebook and Twitter (@SalemMediaGrp).

Forward-Looking Statements

Statements used in this press release that relate to future plans, events, financial results, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated as a result of certain risks and uncertainties, including but not limited to the ability of Salem to close and integrate announced transactions, market acceptance of Salem’s radio station formats, competition from new technologies, adverse economic conditions, and other risks and uncertainties detailed from time to time in Salem’s reports on Forms 10-K, 10-Q, 8-K and other filings filed with or furnished to the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Salem undertakes no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances or unanticipated events.

(1)		Regulation G

		Management uses certain non-GAAP financial measures defined below in communications with investors, analysts, rating agencies, banks and others to assist such parties in understanding the impact of various items on its financial statements. The company uses these non-GAAP financial measures to evaluate financial results, develop budgets, manage expenditures and as a measure of performance under compensation programs.

		The company’s presentation of these non-GAAP financial measures should not be considered as a substitute for or superior to the most directly comparable financial measures as reported in accordance with GAAP.

		Regulation G defines and prescribes the conditions under which certain non-GAAP financial information may be presented in this earnings release. The company closely monitors EBITDA, Adjusted EBITDA, Station Operating Income (“SOI”), Same Station net broadcast revenue, Same Station broadcast operating expenses, Same Station Operating Income, Digital Media Operating Income, Publishing Operating Income (Loss), and operating expenses excluding gains or losses on the disposition of assets, stock-based compensation, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation and amortization, all of which are non-GAAP financial measures. The company believes that these non-GAAP financial measures provide useful information about its core operating results, and thus, are appropriate to enhance the overall understanding of its financial performance. These non-GAAP financial measures are intended to provide management and investors a more complete understanding of its underlying operational results, trends and performance.

		The company defines Station Operating Income (“SOI”) as net broadcast revenue minus broadcast operating expenses. The company defines Digital Media Operating Income as net Digital Media Revenue minus Digital Media Operating Expenses. The company defines Publishing Operating Income (Loss) as net Publishing Revenue minus Publishing Operating Expenses. The company defines EBITDA as net income before interest, taxes, depreciation, and amortization. The company defines Adjusted EBITDA as EBITDA before gains or losses on the disposition of assets, before changes in the estimated fair value of contingent earn-out consideration, before impairments, before net miscellaneous income and expenses, before gain on bargain purchase, before (gain) loss on early retirement of long-term debt and before non-cash compensation expense. SOI, Digital Media Operating Income, Publishing Operating Income (Loss), EBITDA and Adjusted EBITDA are commonly used by the broadcast and media industry as important measures of performance and are used by investors and analysts who report on the industry to provide meaningful comparisons between broadcasters. SOI, Digital Media Operating Income, Publishing Operating Income (Loss), EBITDA and Adjusted EBITDA are not measures of liquidity or of performance in accordance with GAAP and should be viewed as a supplement to and not a substitute for or superior to its results of operations and financial condition presented in accordance with GAAP. The company’s definitions of SOI, Digital Media Operating Income, Publishing Operating Income (Loss), EBITDA and Adjusted EBITDA are not necessarily comparable to similarly titled measures reported by other companies.

		The company defines Adjusted Free Cash Flow as Adjusted EBITDA less cash paid for capital expenditures, less cash paid for income taxes, and less cash paid for interest. The company considers Adjusted Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by its operations after cash paid for capital expenditures, cash paid for income taxes and cash paid for interest. A limitation of Adjusted Free Cash Flow as a measure of liquidity is that it does not represent the total increase or decrease in its cash balance for the period. The company uses Adjusted Free Cash Flow, a non-GAAP liquidity measure, both in presenting its results to stockholders and the investment community, and in its internal evaluation and management of the business. The company’s presentation of Adjusted Free Cash Flow is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The company’s definition of Adjusted Free Cash Flow is not necessarily comparable to similarly titled measures reported by other companies.

		The company defines Same Station net broadcast revenue as broadcast revenue from its radio stations and networks that the company owns or operates in the same format on the first and last day of each quarter, as well as the corresponding quarter of the prior year. The company defines Same Station broadcast operating expenses as broadcast operating expenses from its radio stations and networks that the company owns or operates in the same format on the first and last day of each quarter, as well as the corresponding quarter of the prior year. The company defines Same Station SOI as Same Station net broadcast revenue less Same Station broadcast operating expenses. Same Station operating results include those stations that the company owns or operates in the same format on the first and last day of each quarter, as well as the corresponding quarter of the prior year. Same Station operating results for a full calendar year are calculated as the sum of the Same Station-results for each of the four quarters of that year. The company uses Same Station operating results, a non-GAAP financial measure, both in presenting its results to stockholders and the investment community, and in its internal evaluations and management of the business. The company believes that Same Station operating results provide a meaningful comparison of period over period performance of its core broadcast operations as this measure excludes the impact of new stations, the impact of stations the company no longer owns or operates, and the impact of stations operating under a new programming format. The company’s presentation of Same Station operating results is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The company’s definition of Same Station operating results is not necessarily comparable to similarly titled measures reported by other companies.

		For all non-GAAP financial measures, investors should consider the limitations associated with these metrics, including the potential lack of comparability of these measures from one company to another.

		The Supplemental Information tables that follow the condensed consolidated financial statements provide reconciliations of the non-GAAP financial measures that the company uses in this earnings release to the most directly comparable measures calculated in accordance with GAAP. The company uses non-GAAP financial measures to evaluate financial performance, develop budgets, manage expenditures, and determine employee compensation. The company’s presentation of this additional information is not to be considered as a substitute for or superior to the directly comparable measures as reported in accordance with GAAP.

Salem Media Group, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
	(Unaudited)
Net broadcast revenue	$	47,679	$	45,391	$	142,854	$	130,041
Net digital media revenue		9,149		9,808		29,349		28,355
Net publishing revenue		7,288		5,442		17,062		13,366
Total revenue		64,116		60,641		189,265		171,762
Operating expenses:
Broadcast operating expenses		37,310		34,283		111,466		104,704
Digital media operating expenses		7,282		7,144		22,988		23,123
Publishing operating expenses		6,517		5,814		17,112		16,443
Unallocated corporate expenses		4,183		3,849		12,386		11,909
Change in the estimated fair value of contingent earn-out consideration		(40)		(10)		(40)		(12)
Impairment of indefinite-lived long-term assets other than goodwill		1,915		—		1,915		17,254
Impairment of goodwill		—		—		—		307
Depreciation and amortization		3,891		3,428		12,096		10,686
Net (gain) loss on the disposition of assets		17,545		1,381		21,212		1,494
Total operating expenses		78,603		55,889		199,135		185,908
Operating income (loss)		(14,487)		4,752		(9,870)		(14,146)
Other income (expense):
Interest income		—		1		1		1
Interest expense		(4,410)		(4,024)		(13,206)		(12,069)
Gain on early retirement of long-term debt		—		—		426		49
Net miscellaneous income and (expenses)		—		1		19		(45)
Net income (loss) before income taxes		(18,897)		730		(22,630)		(26,210)
Provision for income taxes		1,108		401		697		31,180
Net income (loss)	$	(20,005)	$	329	$	(23,327)	$	(57,390)

Basic income (loss) per share Class A and Class B common stock	$	(0.75)	$	0.01	$	(0.88)	$	(2.15)
Diluted income (loss) per share Class A and Class B common stock	$	(0.75)	$	0.01	$	(0.88)	$	(2.15)

Basic weighted average Class A and Class B common stock shares outstanding		26,616,696		26,683,363		26,442,791		26,683,363
Diluted weighted average Class A and Class B common stock shares outstanding		26,616,696		26,791,353		26,442,791		26,683,363

Salem Media Group, Inc.
Condensed Consolidated Balance Sheets
(in thousands)

		December 31, 2019		September 30, 2020
				(Unaudited)
Assets
Cash	$	6	$	19,298
Trade accounts receivable, net		30,824		24,223
Other current assets		10,893		15,188
Property and equipment, net		87,673		80,723
Operating and financing lease right-of-use assets		54,730		49,128
Intangible assets, net		369,216		348,249
Deferred financing costs		224		226
Other assets		4,864		3,582
Total assets	$	558,430	$	540,617

Liabilities and Stockholders’ Equity
Current liabilities	$	53,134	$	67,816
Long-term debt		216,468		213,580
Operating and financing lease liabilities, less current portion		54,174		49,138
Deferred income taxes		38,778		69,732
Other liabilities		6,213		8,472
Stockholders’ Equity		189,663		131,879
Total liabilities and stockholders’ equity	$	558,430	$	540,617

SALEM MEDIA GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Dollars in thousands, except share and per share data)

	Class A				Class B
	Common Stock				Common Stock				Additional
									Paid-In		Accumulated		Treasury
	Shares		Amount		Shares		Amount		Capital		Earnings (Deficit)		Stock		Total
Stockholders’ equity, December 31, 2019		23,447,317	$	227		5,553,696	$	56	$	246,680	$	(23,294)	$	(34,006)	$	189,663
Stock-based compensation		—		—		—		—		103		—		—		103
Cash distributions		—		—		—		—		—		(667)		—		(667)
Net loss		—		—		—		—		—		(55,204)		—		(55,204)
Stockholders’ equity, March 31, 2020		23,447,317	$	227		5,553,696	$	56	$	246,783	$	(79,165)	$	(34,006)	$	133,895
Distributions per share	$	0.025			$	0.025
Stock-based compensation		—		—		—		—		96		—		—		96
Net loss		—		—		—		—		—		(2,515)		—		(2,515)
Stockholders’ equity, June 30, 2020		23,447,317	$	227		5,553,696	$	56	$	246,879	$	(81,680)	$	(34,006)	$	131,476
Stock-based compensation		—		—		—		—		74		—		—		74
Net income		—		—		—		—		—		329		—		329
Stockholders’ equity, September 30, 2020		23,447,317	$	227		5,553,696	$	56	$	246,953	$	(81,351)	$	(34,006)	$	131,879

	Class A				Class B
	Common Stock				Common Stock				Additional
									Paid-In		Accumulated		Treasury
	Shares		Amount		Shares		Amount		Capital		Earnings		Stock		Total
Stockholders’ equity, December 31, 2018		22,950,066	$	227		5,553,696	$	56	$	245,220	$	10,372	$	(34,006)	$	221,869
Stock-based compensation		—		—		—		—		176		—		—		176
Cash distributions		—		—		—		—		—		(1,702)		—		(1,702)
Net income		—		—		—		—		—		322		—		322
Stockholders’ equity, March 31, 2019		22,950,066	$	227		5,553,696	$	56	$	245,396	$	8,992	$	(34,006)	$	220,665
Distributions per share	$	0.065			$	0.065

Stock-based compensation		—		—		—		—		936		—		—		936
Options exercised		200		—		—		—		—		—		—		—
Lapse of restricted shares		389,061		—		—		—		—		—		—		—
Cash distributions		—		—		—		—		—		(1,728)		—		(1,728)
Net loss		—		—		—		—		—		(3,644)		—		(3,644)
Stockholders’ equity, June 30, 2019		23,339,327	$	227		5,553,696	$	56	$	246,332	$	3,620	$	(34,006)	$	216,229
Distributions per share	$	0.065			$	0.065
Stock-based compensation		—		—		—		—		177		—		—		177
Options exercised		—		—		—		—		—		—		—		—
Lapse of restricted shares		41,323		—		—		—		—		—		—		—
Cash distributions		—		—		—		—		—		(1,730)		—		(1,730)
Net loss		—		—		—		—		—		(20,005)		—		(20,005)
Stockholders’ equity, September 30, 2019		23,380,650	$	227		5,553,696	$	56	$	246,509	$	(18,115)	$	(34,006)	$	194,671
Distributions per share	$	0.065			$	0.065

SALEM MEDIA GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
		Three Months Ended September 30,			Nine Months Ended September 30,
		2019		2020	2019		2020
OPERATING ACTIVITIES
Net income (loss)	$	(20,005)	$	329	$	(23,327)	$	(57,390)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Non-cash stock-based compensation		177		74		1,289		273
Depreciation and amortization		3,891		3,428		12,096		10,686
Amortization of deferred financing costs		253		214		766		675
Non-cash lease expense		2,287		2,281		6,735		6,745
Accretion of acquisition-related deferred payments and contingent consideration		—		—		2		—
Provision for bad debts		670		501		1,407		4,122
Deferred income taxes		1,033		325		487		30,954
Impairment of indefinite-lived long-term assets other than goodwill		1,915		—		1,915		17,254
Impairment of goodwill		—		—		—		307
Change in the estimated fair value of contingent earn-out consideration		(40)		(10)		(40)		(12)
Net (gain) loss on the disposition of assets		17,545		1,381		21,212		1,494
Gain on early retirement of long-term debt		—		—		(426)		(49)
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue		(2,366)		(2,965)		(2,363)		2,565
Inventories		(19)		89		(372)		99
Prepaid expenses and other current assets		(740)		(1,440)		338		(1,343)
Accounts payable and accrued expenses		4,963		4,151		4,504		5,871
Operating lease liabilities		(2,218)		(2,993)		(7,983)		(6,396)
Contract liabilities		(629)		(1,993)		(1,710)		5,274
Deferred rent income		(46)		(117)		(130)		(268)
Other liabilities		(16)		1,050		(16)		2,254
Income taxes payable		55		(125)		87		30
Net cash provided by operating activities	$	6,710	$	4,180	$	14,471	$	23,145
INVESTING ACTIVITIES
Cash paid for capital expenditures net of tenant improvement allowances		(1,367)		(1,040)		(6,064)		(3,565)
Capital expenditures reimbursable under tenant improvement allowances and trade agreements		(3)		(46)		(3)		(140)
Purchases of broadcast assets and radio stations		(35)		—		(35)		—
Purchases of digital media businesses and assets		(600)		(400)		(1,250)		(400)
Proceeds from sale of assets		1,330		—		4,202		188
Other		3		31		(725)		2,010
Net cash used in investing activities	$	(672)	$	(1,455)	$	(3,875)	$	(1,907)
FINANCING ACTIVITIES
Payments to repurchase 6.75% Senior Secured Notes		—		—		(6,123)		(3,392)
Proceeds from borrowings under ABL Facility		32,072		277		86,367		38,626
Payments on ABL Facility		(36,423)		(2,677)		(87,962)		(34,452)
Refund (payments) of debt issuance costs		(13)		(58)		(43)		(124)
Payments on financing lease liabilities		(22)		(17)		(65)		(52)
Payment of cash distribution on common stock		(1,730)		—		(5,160)		(667)
Book overdraft		76		—		2,280		(1,885)
Net cash used in financing activities	$	(6,040)	$	(2,475)	$	(10,706)	$	(1,946)
Net increase (decrease) in cash and cash equivalents	$	(2)	$	250	$	(110)	$	19,292
Cash and cash equivalents at beginning of year		9		19,048		117		6
Cash and cash equivalents at end of period	$	7	$	19,298	$	7	$	19,298

Salem Media Group, Inc.
Supplemental Information
(in thousands)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
	(Unaudited)
Reconciliation of Total Operating Expenses to Operating Expenses excluding Gains or Losses on the Disposition of Assets, Stock-based Compensation Expense, Changes in the Estimated Fair Value of Contingent Earn-out Consideration, Impairments and Depreciation and Amortization Expense (Recurring Operating Expenses)
Operating Expenses	$	78,603	$	55,889	$	199,135	$	185,908
Less depreciation and amortization expense		(3,891)		(3,428)		(12,096)		(10,686)
Less change in estimated fair value of contingent earn-out consideration		40		10		40		12
Less impairment of indefinite-lived long-term assets other than goodwill		(1,915)		—		(1,915)		(17,254)
Less impairment of goodwill		—		—		—		(307)
Less net gain (loss) on the disposition of assets		(17,545)		(1,381)		(21,212)		(1,494)
Less stock-based compensation expense		(177)		(74)		(1,289)		(273)
Total Recurring Operating Expenses	$	55,115	$	51,016	$	162,663	$	155,906

Reconciliation of Net Broadcast Revenue to Same Station Net Broadcast Revenue
Net broadcast revenue	$	47,679	$	45,391	$	142,854	$	130,041
Net broadcast revenue – acquisitions		—		—		—		—
Net broadcast revenue – dispositions		(1,328)		(24)		(4,342)		(72)
Net broadcast revenue – format change		(661)		(766)		(1,874)		(2,328)
Same Station net broadcast revenue	$	45,690	$	44,601	$	136,638	$	127,641

Reconciliation of Broadcast Operating Expenses to Same Station Broadcast Operating Expenses
Broadcast operating expenses	$	37,310	$	34,283	$	111,466	$	104,704
Broadcast operating expenses – acquisitions		—		—		—		(2)
Broadcast operating expenses – dispositions		(1,748)		—		(5,161)		(110)
Broadcast operating expenses – format change		(698)		(796)		(2,014)		(2,620)
Same Station broadcast operating expenses	$	34,864	$	33,487	$	104,291	$	101,972

Reconciliation of SOI to Same Station SOI
Station Operating Income	$	10,369	$	11,108	$	31,388	$	25,337
Station operating loss – acquisitions		—		—		—		2
Station operating (income) loss – dispositions		420		(24)		819		38
Station operating loss – format change		37		30		140		292
Same Station – Station Operating Income	$	10,826	$	11,114	$	32,347	$	25,669

Salem Media Group, Inc.
Supplemental Information
(in thousands)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
	(Unaudited)
Calculation of Station Operating Income, Digital Media Operating Income and Publishing Operating Income (Loss)
Net broadcast revenue	$	47,679	$	45,391	$	142,854	$	130,041
Less broadcast operating expenses		(37,310)		(34,283)		(111,466)		(104,704)
Station Operating Income	$	10,369	$	11,108	$	31,388	$	25,337

Net digital media revenue	$	9,149	$	9,808	$	29,349	$	28,355
Less digital media operating expenses		(7,282)		(7,144)		(22,988)		(23,123)
Digital Media Operating Income	$	1,867	$	2,664	$	6,361	$	5,232

Net publishing revenue	$	7,288	$	5,442	$	17,062	$	13,366
Less publishing operating expenses		(6,517)		(5,814)		(17,112)		(16,443)
Publishing Operating Income (Loss)	$	771	$	(372)	$	(50)	$	(3,077)

The company defines EBITDA (1) as net income (loss) before interest, taxes, depreciation, and amortization. The table below presents a reconciliation of EBITDA (1) to Net Income (Loss), the most directly comparable GAAP measure. EBITDA (1) is a non-GAAP financial performance measure that is not to be considered a substitute for or superior to the directly comparable measures reported in accordance with GAAP.

Salem Media Group, Inc.
Supplemental Information
(in thousands)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
	(Unaudited)
Net income (loss)	$	(20,005)	$	329	$	(23,327)	$	(57,390)
Plus interest expense, net of capitalized interest		4,410		4,024		13,206		12,069
Plus provision for income taxes		1,108		401		697		31,180
Plus depreciation and amortization		3,891		3,428		12,096		10,686
Less interest income		—		(1)		(1)		(1)
EBITDA	$	(10,596)	$	8,181	$	2,671	$	(3,456)

The company defines Adjusted EBITDA (1) as EBITDA (1) before gains or losses on the disposition of assets, before changes in the estimated fair value of contingent earn-out consideration, before impairments, before net miscellaneous income and expenses, before (gain) loss on early retirement of long-term debt and before non-cash compensation expense. The table below presents a reconciliation of Adjusted EBITDA (1) to Net Income (Loss), the most directly comparable GAAP measure. Adjusted EBITDA (1) is a non-GAAP financial performance measure that is not to be considered a substitute for or superior to the directly comparable measures reported in accordance with GAAP.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2020		2019		2020
	(Unaudited)
Net income (loss)	$	(20,005)	$	329	$	(23,327)	$	(57,390)
Plus interest expense, net of capitalized interest		4,410		4,024		13,206		12,069
Plus provision for income taxes		1,108		401		697		31,180
Plus depreciation and amortization		3,891		3,428		12,096		10,686
Less interest income		—		(1)		(1)		(1)
EBITDA	$	(10,596)	$	8,181	$	2,671	$	(3,456)
Less net (gain) loss on the disposition of assets		17,545		1,381		21,212		1,494
Less change in the estimated fair value of contingent earn-out consideration		(40)		(10)		(40)		(12)
Plus impairment of indefinite-lived long-term assets other than goodwill		1,915		—		1,915		17,254
Plus impairment of goodwill		—		—		—		307
Plus gain on early retirement of long-term debt		—		—		(426)		(49)
Plus net miscellaneous (income) and expenses		—		(1)		(19)		45
Plus non-cash stock-based compensation		177		74		1,289		273
Plus ASC 842 lease adoption		—		—		171		—
Adjusted EBITDA	$	9,001	$	9,625	$	26,773	$	15,856

The company defines Adjusted Free Cash Flow (1) as Adjusted EBITDA (1) less cash paid for capital expenditures, less cash paid for income taxes, and less cash paid for interest. The company considers Adjusted Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by its operations after cash paid for capital expenditures, cash paid for income taxes and cash paid for interest. A limitation of Adjusted Free Cash Flow as a measure of liquidity is that it does not represent the total increase or decrease in its cash balance for the period. The company uses Adjusted Free Cash Flow, a non-GAAP liquidity measure, both in presenting its results to stockholders and the investment community, and in its internal evaluation and management of the business. The company’s presentation of Adjusted Free Cash Flow is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The company’s definition of Adjusted Free Cash Flow is not necessarily comparable to similarly titled measures reported by other companies.

The table below presents a reconciliation of Adjusted Free Cash Flow to net cash provided by operating activities, the most directly comparable GAAP measure. Adjusted Free Cash Flow is a non-GAAP liquidity measure that is not to be considered a substitute for or superior to the directly comparable measures reported in accordance with GAAP.

Salem Media Group, Inc.
Supplemental Information
(in thousands)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2020		2019		2020
	(Unaudited)
Net cash provided by operating activities	$	6,710	$	4,180	$	14,471	$	23,145
Non-cash stock-based compensation		(177)		(74)		(1,289)		(273)
Depreciation and amortization		(3,891)		(3,428)		(12,096)		(10,686)
Amortization of deferred financing costs		(253)		(214)		(766)		(675)
Non-cash lease expense		(2,287)		(2,281)		(6,735)		(6,745)
Accretion of acquisition-related deferred payments and contingent earn-out consideration		—		—		(2)		—
Provision for bad debts		(670)		(501)		(1,407)		(4,122)
Deferred income taxes		(1,033)		(325)		(487)		(30,954)
Change in the estimated fair value of contingent earn-out consideration		40		10		40		12
Impairment of indefinite-lived long-term assets other than goodwill		(1,915)		—		(1,915)		(17,254)
Impairment of goodwill		—		—		—		(307)
Net gain (loss) on the disposition of assets		(17,545)		(1,381)		(21,212)		(1,494)
Gain on early retirement of long-term debt		—		—		426		49
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue		2,366		2,965		2,363		(2,565)
Inventories		19		(89)		372		(99)
Prepaid expenses and other current assets		740		1,440		(338)		1,343
Accounts payable and accrued expenses		(4,963)		(4,151)		(4,504)		(5,871)
Contract liabilities		629		1,993		1,710		(5,274)
Operating lease liabilities (deferred rent)		2,218		2,993		7,983		6,396
Deferred rent revenue		46		117		130		268
Other liabilities		16		(1,050)		16		(2,254)
Income taxes payable		(55)		125		(87)		(30)
Net income (loss)	$	(20,005)	$	329	$	(23,327)	$	(57,390)
Plus interest expense, net of capitalized interest		4,410		4,024		13,206		12,069
Plus provision for income taxes		1,108		401		697		31,180
Plus depreciation and amortization		3,891		3,428		12,096		10,686
Less interest income		—		(1)		(1)		(1)
EBITDA	$	(10,596)	$	8,181	$	2,671	$	(3,456)
Plus net (gain) loss on the disposition of assets		17,545		1,381		21,212		1,494
Plus change in the estimated fair value of contingent earn-out consideration		(40)		(10)		(40)		(12)
Plus impairment of indefinite-lived long-term assets other than goodwill		1,915		—		1,915		17,254
Plus impairment of goodwill		—		—		—		307
Plus (gain) on the early retirement of long-term debt		—		—		(426)		(49)
Plus net miscellaneous (income) and expenses		—		(1)		(19)		45
Plus non-cash stock-based compensation		177		74		1,289		273
Plus ASC 842 lease adoption		—		—		171		—
Adjusted EBITDA	$	9,001	$	9,625	$	26,773	$	15,856
Less net cash paid for capital expenditures (1)		(1,367)		(1,040)		(6,064)		(3,565)
Less cash paid for taxes		(19)		(201)		(122)		(196)
Less cash paid for interest, net of capitalized interest		(258)		(133)		(8,575)		(7,737)
Adjusted Free Cash Flow	$	7,357	$	8,251	$	12,012	$	4,358

(1) Net cash paid for capital expenditures reflects actual cash payments net of cash reimbursements under tenant improvement allowances and net of property and equipment acquired in trade transactions.

Selected Debt Data		Outstanding at September 30, 2020	Applicable Interest Rate
Senior Secured Notes due 2024 (1)	$	216,341,000	6.75%
Asset-based revolving credit facility (2)		16,600,000	2.50%
(1) $216.3 million notes with semi-annual interest payments at an annual rate of 6.75%.
(2) Outstanding borrowings under the ABL Facility, with interest payments due at LIBOR plus 1.5% to 2.0% per annum with a LIBOR floor of $0.5% or prime rate plus 0.5% to 1.0% per annum.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201112006076/en/

Evan D. Masyr

Executive Vice President and Chief

Financial Officer

(805) 384-4512

[email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Entertainment Communications Consumer TV and Radio Religion Publishing

MEDIA:

Logo

November 12, 2020 4:08 pm

Amwell® Announces Results for Third Quarter 2020

Amwell® Announces Results for Third Quarter 2020

Total active providers of approximately 62,000 at the end of the third quarter increased 930% compared to a year ago
Total visits of 1,414,000 in the third quarter increased 450% compared to a year ago
Revenue of $62.6 million in the third quarter increased 80% compared to a year ago
Announced new products: Amwell Now, Touchpoint Tablet software, and C500 telemedicine cart
Provides initial 2020 guidance

BOSTON–(BUSINESS WIRE)–Amwell®, (NYSE: AMWL) (the “Company”) a national telehealth leader, today announced financial results for the third quarter ended September 30, 2020.

“We are pleased to announce that third quarter results reflect our business’ momentum and ongoing role in responding to the continued, widespread demand for telehealth infrastructure. Our platform’s unique ability to simplify high-quality, virtual care delivery that supports existing patient-physician relationships differentiates us in the growing market,” said Ido Schoenberg, Chairman and Co-CEO.

Dr. Schoenberg continued, “During the quarter, we expanded the number of entry points to our ecosystem connectivity platform in order to simplify access to telehealth and enhance our partners’ user experience. We now look to end the year with accelerated momentum as our story evolves in the public markets.”

Third quarter 2020 Financial Highlights:

All comparisons, unless otherwise noted, are to the three months ended September 30, 2019.

Total active providers were ~62,000, compared to ~6,000
450% visit growth driven by provider clients accelerated adoption of our platform
Total visits were ~1,414,000, compared to 255,000
- Amwell Medical Group™ (AMG) visits were ~378,000 or 27% of total visits, compared to ~159,000 or 62% of total visits
Total Revenue was $62.6 million, compared to $34.7 million
- Subscription revenue was $25.8 million, compared to $22.0 million
- Visit revenue was $28.5 million, compared to $7.2 million
Gross margin was 32.7%, compared to 45.1% impacted by low margin AMG visit growth during COVID
Net loss was $(64.6) million, compared to $(24.1) million
Adjusted EBITDA was $(26.2) million, compared to $(20.3) million
Cash and Short-term securities as of quarter-end were $1.1 billion

Financial Outlook

For 2020, the company expects:

Revenue between $235 and $239 million
Adjusted EBITDA between ($110) million and ($105) million

Quarterly Conference Call Details

The company will host a conference call to review the results today, Thursday, November 12, 2020 at 5:00 p.m. E.T. to discuss its financial results. The call can be accessed via a line audio webcast at https://investors.amwell.com or by dialing 1-883-979-2840 for U.S. participants, or 1-263-384-2051 for international participants, referencing conference ID #4495737. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.

About Amwell

Amwell is a leading telehealth platform in the United States and globally, connecting and enabling providers, insurers, patients, and innovators to deliver greater access to more affordable, higher quality care. Amwell believes that digital care delivery will transform healthcare. The Company offers a single, comprehensive platform to support all telehealth needs from urgent to acute and post-acute care, as well as chronic care management and healthy living. With over a decade of experience, Amwell powers telehealth solutions for over 2,000 hospitals and 55 health plan partners with over 36,000 employers, covering over 80 million lives. For more information please visit https://business.amwell.com/.

American Well, Amwell, and Amwell Medical Group are registered trademarks or trademarks of American Well Corporation in the United States and other countries. All other trademarks used herein are the property of their respective owners.

Forward-Looking Statements

This press release contains forward-looking statements about us and our industry that involve substantial risks and uncertainties and are based on our beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations, financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” or “would,” or the negative of these words or other similar terms or expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent our beliefs and assumptions only as of the date of this release. These statements, and related risks, uncertainties, factors and assumptions, include, but are not limited to: weak growth and increased volatility in the telehealth market; inability to adapt to rapid technological changes; increased competition from existing and potential new participants in the healthcare industry; changes in healthcare laws, regulations or trends and our ability to operate in the heavily regulated healthcare industry; our ability to comply with federal and state privacy regulations; the significant liability that could result from a cybersecurity breach; and other factors described under ‘Risk Factors’ in the prospectus for our IPO filed with the SEC. These risks are not exhaustive. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Further information on factors that could cause actual results to differ materially from the results anticipated by our forward-looking statements is included in the reports we have filed or will file with the Securities and Exchange Commission. These filings, when available, are available on the investor relations section of our website at investors.amwell.com and on the SEC’s website at www.sec.gov.

CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) (unaudited)

	September 30, 2020			December 31, 2019
Current assets:
Cash and cash equivalents	$	956,417		$	137,673
Investments		129,914			39,953
Restricted cash		300			—
Accounts receivable ($1,408 and $2,601 from related parties and net of allowances of $1,333 and $686, respectively)		39,962			32,730
Inventories		7,775			3,104
Deferred contract acquisition costs		865			1,130
Prepaid expenses and other current assets		8,408			8,937

Total current assets		1,143,641			223,527
Restricted cash		795			1,143
Property and equipment, net		4,352			2,664
Goodwill		193,877			193,877
Intangible assets, net		57,718			63,535
Operating lease right-of-use asset		8,201			11,944
Deferred contract acquisition costs, net of current portion		2,627			1,639
Other assets		1,126			1,552
Investment in minority owned joint venture		1,690			—

Total assets	$	1,414,027		$	499,881

Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	7,670		$	6,504
Accrued expenses and other current liabilities		38,301			27,351
Operating lease liability, current		6,321			6,232
Deferred revenue ($6,325 and $12,912 from related parties, respectively)		54,324			66,490

Total current liabilities		106,616			106,577
Other long-term liabilities		115			309
Operating lease liability, net of current portion		3,056			7,164
Deferred revenue, net of current portion ($275 and $1,385 from related parties, respectively)		7,480			10,896

Total liabilities		117,267			124,946

Commitments and contingencies (Note 12)
Convertible preferred stock, $0.01 par value; no shares authorized, issued or outstanding as of September 30, 2020, and 17,744,445 shares authorized 14,061,508 shares issued and 14,012,935 shares outstanding as of December 31, 2019; aggregate liquidation preference of $0 and $608,449, respectively		—			655,799
Stockholders’ equity (deficit):
Preferred stock, $0.01 par value; 100,000,000 shares authorized, no shares issued or outstanding as of September 30, 2020, and no shares authorized, issued or outstanding as of December 31, 2019		—			—
Common stock, $0.01 par value; 1,000,000,000 Class A shares authorized, 200,131,318 shares issued and 199,647,646 shares outstanding, 100,000,000 Class B shares authorized, 29,950,326 shares issued and 29,032,042 shares outstanding, 200,000,000 Class C shares authorized 5,555,555 issued and outstanding as of September 30, 2020; and 220,000,000 common stock shares authorized, 42,338,679 shares issued and 42,302,845 shares outstanding as of December 31, 2019		2,343			423
Treasury stock, 1,401,956 shares and 35,834 shares as of September 30, 2020 and as of December 31, 2019, respectively		(24,320	)		(158	)
Additional paid-in capital		1,828,395			50,289
Accumulated other comprehensive income		50			250
Accumulated deficit		(532,047	)		(357,927	)

Total American Well Corporation stockholders’ equity (deficit)		1,274,421			(307,123	)
Non-controlling interest		22,339			26,259

Total stockholders’ equity (deficit)		1,296,760			(280,864	)

Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	1,414,027		$	499,881

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
($14,868, $8,253, $44,028 and $24,404 from related parties, respectively)	$	62,551		$	34,744		$	184,833		$	103,825
Costs and operating expenses:
Costs of revenue, excluding depreciation and amortization of intangible assets		42,116			19,060			118,969			55,060
Research and development		25,275			13,602			57,848			39,169
Sales and marketing		13,758			11,309			39,978			33,951
General and administrative		43,113			14,654			138,537			40,189
Depreciation and amortization expense		2,576			1,868			7,371			5,668

Total costs and operating expenses		126,838			60,493			362,703			174,037

Loss from operations		(64,287	)		(25,749	)		(177,870	)		(70,212	)
Interest income and other income (expense), net		255			1,286			1,410			4,547

Loss before benefit (expense) from income taxes and loss from equity method investment		(64,032	)		(24,463	)		(176,460	)		(65,665	)
Benefit (expense) from income taxes		(78	)		392			(330	)		22
Loss from equity method investment		(486	)		—			(1,250	)		—

Net loss		(64,596	)		(24,071	)		(178,040	)		(65,643	)
Net loss attributable to non-controlling interest		(1,515	)		(56	)		(3,920	)		(884	)

Net loss attributable to American Well Corporation	$	(63,081	)	$	(24,015	)	$	(174,120	)	$	(64,759	)

Net loss per share attributable to common stockholders, basic and diluted	$	(0.92	)	$	(0.57	)	$	(3.38	)	$	(1.55	)
Weighted-average common shares outstanding, basic and diluted		68,499,106			41,933,597			51,492,988			41,805,929

Net loss	$	(64,596	)	$	(24,071	)	$	(178,040	)	$	(65,643	)
Other comprehensive loss, net of tax:
Unrealized loss on available-for-sale investments		(135	)		(226	)		(415	)		(938	)
Foreign currency translation		37			(59	)		215			(188	)

Comprehensive loss		(64,694	)		(24,356	)		(178,240	)		(66,769	)
Less: Comprehensive loss attributable to non-controlling interest		(1,515	)		(56	)		(3,920	)		(884	)

Comprehensive loss attributable to American Well Corporation	$	(63,179	)	$	(24,300	)	$	(174,320	)	$	(65,885	)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, except share and per share amounts) (unaudited)

	Nine Months Ended September 30,
		2020			2019
Net loss	$	(178,040	)	$	(65,643	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		7,371			5,668
Provisions for doubtful accounts		1,236			621
Amortization of deferred contract acquisition costs		852			797
Amortization of deferred contract fulfillment costs		510			531
Stock-based compensation expense		106,516			8,675
Loss on equity method investment		1,250			—
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable		(8,468	)		11,878
Inventories		(4,671	)		(500	)
Deferred contract acquisition costs		(1,575	)		(1,115	)
Prepaid expenses and other current assets		(1	)		(797	)
Other assets		426			(846	)
Accounts payable		(135	)		13
Accrued expenses and other current liabilities		2,353			553
Other long-term liabilities		(194	)		(902	)
Deferred revenue		(15,364	)		(25,548	)

Net cash used in operating activities		(87,934	)		(66,615	)

Cash flows from investing activities:
Purchases of property and equipment		(3,261	)		(1,098	)
Investment in minority owned joint venture		(2,940	)		—
Purchases of investments		(159,608	)		(78,946	)
Proceeds from sales and maturities of investments		69,132			226,509

Net cash (used in) provided by investing activities		(96,677	)		146,465

Cash flows from financing activities:
Proceeds from issuance of Series C convertible preferred stock, net of issuance costs		146,014			—
Proceeds from exercise of common stock options		4,235			610
Payments for the purchase of treasury stock		(18,417	)		(158	)
Proceeds from issuance of common stock in initial public offering, net of underwriting costs and commissions		772,931			—
Proceeds from issuance of common stock to Google		100,000			—
Payment of deferred offering costs		(1,456	)		—

Net cash provided by financing activities		1,003,307			452

Net increase in cash, cash equivalents, and restricted cash		818,696			80,302
Cash, cash equivalents, and restricted cash at beginning of period		138,816			54,070

Cash, cash equivalents, and restricted cash at end of period	$	957,512		$	134,372

Cash, cash equivalents, and restricted cash at end of period:
Cash and cash equivalents		956,417			133,277
Restricted cash		1,095			1,095

Total cash, cash equivalents, and restricted cash at end of period	$	957,512		$	134,372

Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	138		$	—
Supplemental disclosure of non-cash investing and financing activities:
Additions to property and equipment included in accrued expenses and accounts payable	$	19		$	—
Initial public offering and Google common stock offering costs in accrued expenses	$	3,838		$	—
Treasury stock costs in accrued expenses	$	5,903		$	—

Non-GAAP Financial Measures:

To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, of US GAAP, we use adjusted EBITDA, which is a non-U.S GAAP financial measure to clarify and enhance an understanding of past performance. We believe that the presentation of adjusted EBITDA enhances an investor’s understanding of our financial performance. We further believe that adjusted EBITDA is a useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business. We use certain financial measures for business planning purposes and in measuring our performance relative to that of our competitors. We utilize adjusted EBITDA as the primary measure of our performance.

We calculate adjusted EBITDA as net loss adjusted to exclude (i) interest income and other income, net, (ii) tax benefit and expense, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) initial public offering expenses, (vi) acquisition-related expenses and (vii) other items affecting our results that we do not view as representative of our ongoing operations, including direct and incremental expenses associated with the COVID-19 pandemic.

We believe adjusted EBITDA is a commonly used by investors to evaluate our performance and that of our competitors. However, our use of the term adjusted EBITDA may vary from that of others in our industry. Adjusted EBITDA should not be considered as an alternative to net loss before taxes, net loss, loss per share or any other performance measures derived in accordance with U.S. GAAP as measures of performance.

Adjusted EBITDA has important limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of the limitations of adjusted EBITDA include (i) adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and adjusted EBITDA does not reflect these capital expenditures. Our IPO and acquisition-related expenses, including legal, accounting and other professional expenses, reflect cash expenditures and we expect such expenditures for acquisitions to recur from time to time. Our adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate adjusted EBITDA in the same manner as we calculate the measure, limiting its usefulness as a comparative measure.

In evaluating adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. Adjusted EBITDA should not be considered as an alternative to loss before benefit from income taxes, net loss, earnings per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted EBITDA alongside other financial performance measures, including our net loss and other GAAP results.

Other than with respect to GAAP Revenue, the Company only provides guidance on a non-GAAP basis. The Company does not provide a reconciliation of forward-looking Adjusted EBITDA (non-GAAP) to GAAP net income (loss), due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation because other deductions (such as COVID expenses and acquisition related expenses) used to calculate projected net income (loss) vary dramatically based on actual events, the Company is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income (loss) at this time. The amount of these deductions may be material and, therefore, could result in projected GAAP net income (loss) being materially less than projected Adjusted EBITDA (non-GAAP).

The following table presents a reconciliation of adjusted EBITDA from the most comparable GAAP measure, net loss, for the three and the nine months ended September 30, 2019 and 2020:

Reconciliation of Adjusted EBITDA to Net Loss (unaudited)


	Three months ended September 30,						Nine months ended September 30,
(in thousands)		2020			2019			2020			2019
Net loss	$	(64,596	)	$	(24,071	)	$	(178,040	)	$	(65,643	)
Add:
Depreciation and amortization		2,576			1,868			7,371			5,668
Interest and other income, net		(255	)		(1,286	)		(1,410	)		(4,547	)
Expense (Benefit) from income taxes		78			(392	)		330			(22	)
Stock-based compensation		34,420			3,604			106,516			8,675
Initial public offering expenses		1,362			—			2,039			6
Acquisition-related expenses		—			—			(48	)		95
COVID-19-related expenses⁽¹⁾		191			—			5,933			—

Adjusted EBITDA	$	(26,224	)	$	(20,277	)	$	(57,309	)	$	(55,768	)

(1) COVID-19-related expenses include non-recurring provider bonus payments, emergency hosting licensing fees and non-medical provider temporary labor costs related to on-boarding non-AMG providers incurred in response to the initial outbreak of the COVID-19 virus as Amwell attempted to scale quickly to meet unusually high patient and non-AMG provider demand.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201112006074/en/

Media:

Holly Spring

[email protected]

781.888.8219

Investors:

[email protected]

KEYWORDS: United States North America Massachusetts

INDUSTRY KEYWORDS: Technology Hospitals Other Technology Practice Management Other Health Managed Care Health General Health Data Management

MEDIA:

November 12, 2020 4:08 pm

PhaseBio Reports Recent Business Highlights and Third-Quarter 2020 Financial Results

PhaseBio Reports Recent Business Highlights and Third-Quarter 2020 Financial Results

Expanded pivotal Phase 3 REVERSE-IT trial of product candidate bentracimab (PB2452) for reversal of antiplatelet effects of ticagrelor into Canada and dosed first patients outside the United States

Resuming enrollment in ongoing Phase 2b trial of pemziviptadil (PB1046) in pulmonary arterial hypertension

MALVERN, Pa. & SAN DIEGO–(BUSINESS WIRE)–PhaseBio Pharmaceuticals, Inc. (Nasdaq: PHAS), a clinical-stage biopharmaceutical company focused on the development and commercialization of novel therapies for cardiovascular and cardiopulmonary diseases, today provided an update on corporate activities and reported third-quarter 2020 financial results.

“In the third quarter, PhaseBio continued to make progress and build momentum on our mission to develop novel treatments for serious cardiovascular diseases, primarily through the growth of our global clinical trial footprint for our lead product candidate bentracimab,” said Jonathan P. Mow, Chief Executive Officer of PhaseBio Pharmaceuticals. “In October, we expanded enrollment of our pivotal Phase 3 REVERSE-IT Trial for bentracimab into Canada where we dosed the first patients outside the United States. With continued widespread use of antiplatelet therapies for patients with acute coronary syndrome, both in the United States and globally, there continues to be a significant unmet need for a novel therapy like bentracimab that has the potential to immediately and sustainably reverse the antiplatelet effects of ticagrelor in patients requiring urgent surgeries or experiencing major bleeding events.”

Mow continued, “We’re also pleased to be resuming enrollment for VIP, our Phase 2b trial of pemziviptadil for patients with pulmonary arterial hypertension (PAH). Looking ahead, we remain focused on delivering on our key clinical development milestones for bentracimab and pemziviptadil in 2021 and will be working in the near term on the preparation of our regulatory filings and commercialization efforts for bentracimab.”

Recent Pipeline and Business Highlights

Expanded Pivotal Phase 3 REVERSE-IT Trial for Lead Product Candidate Bentracimab into Canada and Dosed First Patients: In October 2020, PhaseBio announced that it had expanded its Phase 3 REVERSE-IT trial for its lead product candidate bentracimab (PB2452) into Canada, where the first patients outside of the United States have now been enrolled and dosed. Bentracimab is a novel, human monoclonal antibody fragment that in earlier trials has shown immediate and sustained reversal of the antiplatelet effects of Brilinta® (ticagrelor). Cardiovascular disease remains a leading cause of mortality in the United States, Canada and globally. The lack of reversal agents for patients taking antiplatelet therapies who require urgent surgery or experience a major bleeding event remains a critical unmet need. The ongoing global Phase 3 trial of bentracimab has been named REVERSE-IT (Rapid and SustainEd ReVERSal of TicagrElor – Intervention Trial).

Resuming Enrollment in Ongoing Phase 2b Trial of Pemziviptadil (PB1046) in PAH: In October 2020, PhaseBio announced that the ongoing Phase 2b trial of pemziviptadil in patients with PAH, named the VIP trial (Vasoactive Intestinal Peptide in adult patients with pulmonary arterial hypertension), is resuming enrollment after a pause related to the impacts of the COVID-19 pandemic and re-prioritization of drug supply to the VANGARD trial. To date, approximately one-third of the patients targeted for enrollment have completed the initial 16 week protocol, with approximately 90% of these patients electing to enroll in VIP EXTEND (Vasoactive Intestinal Peptide extension trial in adult patients with pulmonary arterial hypertension), the open label extension of the Phase 2b trial. Results from the VIP trial are expected to be reported in the second half of 2021.

Discontinued VANGARD Clinical Trial to Evaluate Pemziviptadil in Hospitalized COVID-19 Patients: In October 2020, PhaseBio announced that after a strategic review of the VANGARD Phase 2 clinical trial, which included an assessment of the rapidly evolving COVID-19 treatment landscape, feedback from the U.S. Food and Drug Administration (FDA) and an interim analysis of the VANGARD trial data, the company elected to discontinue the VANGARD trial and refocus resources on its core pipeline programs. Importantly, pemziviptadil was generally well tolerated, and there was no adverse safety signal reported in the VANGARD trial. In addition, an independent data safety monitoring board did not identify any safety concerns related to pemziviptadil.

SFJ Financing and Co-Development Agreement Update: From execution of the Co-Development Agreement through September 30, 2020, SFJ Pharmaceuticals has funded or reimbursed $31.7 million of clinical trial costs and other expenses of the initial $90 million commitment under the agreement towards the development of bentracimab, leaving $58.3 million of funding remaining available to support the bentracimab Phase 3 program through the end of 2021. PhaseBio is eligible to receive up to an additional $30 million of funding if specific, pre-defined clinical development milestones for bentracimab are met.

Third-Quarter 2020 Financial Results

Cash and cash equivalents at September 30, 2020 were $39.4 million, compared to $74.0 million at December 31, 2019. The decrease reflects cash used in operating activities.

Net loss for the quarter was $25.1 million, compared to a net loss of $11.4 million for the prior-year period.

Research and development expense increased to $17.4 million, as compared to $9.0 million for the same period in 2019, driven by an increase in manufacturing, clinical and nonclinical development activities related to bentracimab and pemziviptadil.

General and administrative expense increased to $3.1 million, compared to $2.8 million for prior-year period, primarily due to increases in professional services, personnel, and insurance-related expenses.

About PhaseBio

PhaseBio Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company focused on the development and commercialization of novel therapies for cardiovascular and cardiopulmonary diseases. The company’s pipeline includes: bentracimab (PB2452), a novel reversal agent for the antiplatelet therapy ticagrelor; pemziviptadil (PB1046), a once-weekly vasoactive intestinal peptide receptor agonist for the treatment of pulmonary arterial hypertension; and PB6440, an oral agent for the treatment of resistant hypertension. PhaseBio’s proprietary elastin-like polypeptide technology platform enables the development of therapies with potential for less-frequent dosing and improved pharmacokinetics, including pemziviptadil, and drives both internal and partnership drug-development opportunities.

PhaseBio is located in Malvern, PA, and San Diego, CA. For more information, please visit www.phasebio.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “anticipates,” “believes,” “expects,” “intends,” “projects,” and “future” or similar expressions are intended to identify forward-looking statements.

Forward-looking statements include statements concerning or implying the conduct or timing of our clinical trials and our research, development and regulatory plans for our product candidates, the potential for these product candidates to receive regulatory approval from the FDA or equivalent foreign regulatory agencies, whether, if approved, these product candidates will be successfully distributed and marketed and the success of our collaboration with SFJ, including whether we will receive all of the contemplated funding under the co-development agreement. Forward-looking statements are based on management’s current expectations and are subject to various risks and uncertainties that could cause actual results to differ materially and adversely from those expressed or implied by such forward-looking statements. Accordingly, these forward-looking statements do not constitute guarantees of future performance, and you are cautioned not to place undue reliance on these forward-looking statements.

Risks regarding our business are described in detail in our Securities and Exchange Commission (“SEC”) filings, including in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, which we intend to file shortly hereafter. These forward-looking statements speak only as of the date hereof, and PhaseBio Pharmaceuticals, Inc. disclaims any obligation to update these statements except as may be required by law.

PhaseBio Pharmaceuticals, Inc.
Condensed Balance Sheets
(in thousands)
(unaudited)

	September 30, 2020	December 31, 2019
Assets:
Cash and cash equivalents	$ 39,353	$ 74,025
Other receivables, prepaid expenses and other current assets	10,595	4,798
Property and equipment, net	6,164	1,924
Operating lease right-of-use assets	2,038	1,715
Other non-current assets	57	32
Total assets	$ 58,207	$ 82,494

Liabilities and stockholders’ equity:
Current portion of long-term debt	$ 5,341	$ 2,378
Accounts payable, accrued expenses and other current liabilities	6,029	6,101
Long-term debt, net	8,117	12,326
Operating lease liabilities, net	1,667	1,508
Development derivative liability	32,224	—
Other long-term liabilities	477	203
Stockholders’ equity	4,352	59,978
Total liabilities and stockholders’ equity	$ 58,207	$ 82,494

PhaseBio Pharmaceuticals, Inc.
Condensed Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

Revenue:
Grant revenue	$ —		$ 241		$ 320		$ 1,097
Revenue under collaborative agreement	—		—		—		500
Total revenue	—		241		320		1,597
Operating expenses:
Research and development	17,416		9,028		49,721		22,530
General and administrative	3,076		2,803		9,477		7,523
Total operating expenses	20,492		11,831		59,198		30,053
Loss from operations	(20,492	)	(11,590	)	(58,878	)	(28,456	)
Other (expense) income	(4,651	)	199		(9,312	)	540
Net loss	$ (25,143	)	$ (11,391	)	$ (68,190	)	$ (27,916	)

Net loss per common share, basic and diluted	$ (0.86	)	$ (0.40	)	$ (2.36	)	$ (1.03	)

Weighted average common shares outstanding, basic and diluted	29,243,181		28,719,932		28,941,669		27,065,774

View source version on businesswire.com: https://www.businesswire.com/news/home/20201112006073/en/

Investor Contact:

John Sharp

PhaseBio Pharmaceuticals, Inc.

Chief Financial Officer

(610) 981-6506

[email protected]

Media Contact:

Will Zasadny

Canale Communications, Inc.

[email protected]

619-961-8848

KEYWORDS: California Pennsylvania United States North America

INDUSTRY KEYWORDS: Biotechnology FDA Health Pharmaceutical Clinical Trials

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