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Novus Therapeutics Reports Third Quarter 2020 Financial Results

Novus Therapeutics Reports Third Quarter 2020 Financial Results

Company to host conference call and webcast at 4:30pm ET today

IRVINE, Calif.–(BUSINESS WIRE)–
Novus Therapeutics, Inc. (“Novus”) (NASDAQ: NVUS), a clinical stage biopharmaceutical company focused on developing life-changing, targeted medicines for patients undergoing organ or cellular transplantation, as well as those living with immunological diseases, today reported its financial results for the quarter ended September 30, 2020, and operational highlights.

Recent Business Highlights

  • Completed the acquisition of Anelixis Therapeutics, Inc., a privately held clinical stage biotechnology company developing a next generation anti-CD40 Ligand (CD40L) antibody
  • Completed a private placement financing expected to result in gross proceeds to Novus of approximately $108 million before deducting placement agent and other offering expenses
  • Commenced enrollment in a phase 2 clinical trial of AT-1501 in adults with amyotrophic lateral sclerosis (ALS) in October 2020

“During the quarter, we accomplished three key transformational objectives focused on increasing shareholder value,” said David-Alexandre C. Gros, M.D., Chief Executive Officer of Novus Therapeutics, Inc. “First, we acquired a potential best in class asset, Anelixis’ AT-1501 anti-CD40L antibody, a well-validated target with broad therapeutic possibilities. Second, we financed Novus to have sufficient capital to execute up to four Phase 2 clinical trials with AT-1501 in different high-need indications. Third, we integrated the companies without losing momentum and were able to launch AT-1501’s Phase 2 trial in adults with ALS as planned. We now have the scientific, organizational and financial resources to rapidly advance this asset in multiple other indications over the coming quarters, setting the stage for a catalyst-rich 2021.”

Financial Results for the Three and Nine Months Ended September 30, 2020

The company reported a net loss of $6.1 million, or $5.51 per share, for the three months ended September 30, 2020, compared to a net loss of $2.9 million, or $4.01 per share, for the same period in 2019. The company reported a net loss of $16.9 million, or $16.81 per share, for the nine months ended September 30, 2020, compared to a net loss of $11.9 million, or $18.74 per share, for the same period in 2019.

R&D expenses were $615,000 for the three months ended September 30, 2020, compared to $1.5 million for the same period in 2019. The decrease in R&D expenses of $894,000 was primarily due to decreases in clinical costs, formulation development costs, personnel costs, consulting services, and travel and meetings expenses. The decreases were partially offset by an increase in stock-based compensation expense. These decreases were made following the completion of our Phase 2a study of our legacy lead program in acute otitis media and the subsequent suspension of development activities as we assessed strategic options. We expect our research and development costs to increase in future periods as we proceed with the development of AT-1501.

G&A expenses were $3.7 million for the three months ended September 30, 2020, compared to $1.4 million for the same period in 2019. The increase in G&A expenses of $2.3 million was primarily due to increases in merger related costs incurred in the third quarter, stock-based compensation, and general operating costs. The increases were partially offset by decreases in litigation costs, personnel costs, costs associated with operating a publicly traded company, and travel and meetings expenses due to the ongoing pandemic. Following the completion of Anelixis acquisition, we expect our general and administrative expenses to increase in future periods, as we have a larger headcount and incur expenses relating to the development of a larger product pipeline.

R&D expenses were $3.1 million for the nine months ended September 30, 2020, compared to $6.8 million for the same period in 2019. The decrease in R&D expenses of $3.7 million was primarily due to decreases in clinical costs, formulation development costs, personnel costs, consulting services, travel and meetings expenses and other development costs. The decreases were partially offset by an increase in stock-based compensation expense. These decreases were made following the completion of our Phase 2a study of our legacy lead program in acute otitis media and the subsequent suspension of development activities as we assess strategic options. We expect our research and development costs to increase in future periods as we proceed with the development of AT-1501.

G&A expenses were $6.7 million for the nine months ended September 30, 2020, compared to $5.1 million for the same period in 2019. The increase in G&A expenses of $1.6 million was primarily due to increases in merger related costs, stock-based compensation, and general operating costs. The increases were partially offset by decreases in litigation costs, costs associated with operating a publicly traded company, personnel costs, and travel and meetings expenses due to the ongoing pandemic. Following the completion of Anelixis acquisition, we expect our general and administrative expenses to increase in future periods, as we have a larger headcount and incur expenses relating to the development of a larger product pipeline.

During the period, the company recognized $2.3 million in restructuring expenses.

The company had $114.5 million in cash and cash equivalents as of September 30, 2020, compared to $8.8 million as of December 31, 2019.

Conference Call & Webcast

4:30 PM Eastern Time / 1:30 PM Pacific Time

Toll Free:

 

877-407-3982

International:

 

201-493-6780

Conference ID:

 

13713171

Webcast:

 

http://public.viavid.com/index.php?id=142451

About AT-1501

AT-1501 is a humanized IgG1 anti-CD40L antibody with high affinity for CD40L, a well-validated target with broad therapeutic potential. The CD40/CD40L pathway plays a central role in generating pro-inflammatory responses in autoimmune disease, allograft transplant rejection, and neuroinflammation. In a Phase 1 safety study of healthy volunteers and adults with ALS, AT-1501 was well tolerated at all doses tested. AT-1501 previously received orphan drug designation from the U.S. Food and Drug Administration for the treatment of ALS.

About Novus Therapeutics

Novus Therapeutics, Inc. is a clinical stage biotechnology company using its expertise in targeting the CD40L pathway to develop potential treatments for people requiring an organ or cell-based transplant, and for people with living with immunological diseases. Novus is headquartered in Irvine, Calif. For more information, please visit the company’s website at www.novustherapeutics.com.

Follow Novus Therapeutics on social media: @Novus_Thera and LinkedIn.

Forward-Looking Statements

This press release contains forward-looking statements that involves substantial risks and uncertainties. Any statements about the company’s future expectations, plans and prospects, including statements about its strategy, future operations, development of its product candidates, and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” “estimates,” “intends,” “predicts,” “projects,” “targets,” “looks forward,” “could,” “may,” and similar expressions, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, although not all forward-looking statements include such identifying words. Forward-looking statements include, but are not limited to statements regarding: risks related to market conditions; expectations regarding the timing for the commencement of future clinical trials; expectations regarding the success of clinical trials; the rate and degree of market acceptance and clinical utility of the company’s products; the company’s estimates regarding expenses and cash runway; and the impact of the ongoing coronavirus pandemic. Actual results may differ materially from those indicated by such forward-looking statements as a result of various factors. These risks and uncertainties, as well as other risks and uncertainties that could cause the company’s actual results to differ significantly from the forward-looking statements contained herein, are discussed in our quarterly 10-Q, annual 10-K, and other filings with the SEC, which can be found at www.sec.gov. Any forward-looking statements contained in this press release speak only as of the date hereof and not of any future date, and the company expressly disclaims any intent to update any forward-looking statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com:

NOVUS THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)
 

 

 

September 30,

2020

 

 

December 31,

2019

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

114,464

 

 

$

8,791

 

Prepaid expenses and other current assets

 

 

637

 

 

 

1,180

 

Total current assets

 

 

115,101

 

 

 

9,971

 

Property and equipment, net

 

 

—

 

 

 

5

 

Operating lease asset, net

 

 

183

 

 

 

316

 

Goodwill

 

 

44,466

 

 

 

—

 

In-process research and development

 

 

32,386

 

 

 

—

 

Other assets

 

 

449

 

 

 

639

 

Total assets

 

$

192,585

 

 

$

10,931

 

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

758

 

 

$

329

 

Current operating lease liability

 

 

191

 

 

 

180

 

Accrued severance

 

 

803

 

 

 

—

 

Accrued expenses and other liabilities

 

 

4,378

 

 

 

813

 

Total current liabilities

 

 

6,130

 

 

 

1,322

 

Non-current operating lease liability

 

 

—

 

 

 

144

 

Total liabilities

 

 

6,130

 

 

 

1,466

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

 

 

Series X1 non-voting convertible preferred stock, $0.001 par value, 515,000 shares authorized;

339,138 and no shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

 

 

164,949

 

 

 

—

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Series X preferred stock, $0.001 par value, 10,000 shares authorized;

511 and no shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

 

 

—

 

 

 

—

 

Common stock, $0.001 par value, 200,000,000 shares authorized at September 30, 2020 and December 31, 2019;

1,274,631 and 720,408 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

95,994

 

 

 

67,046

 

Accumulated deficit

 

 

(74,489

)

 

 

(57,582

)

Total stockholders’ equity

 

 

21,506

 

 

 

9,465

 

Total liabilities, convertible preferred stock and stockholders’ equity

 

$

192,585

 

 

$

10,931

 

NOVUS THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

(Unaudited)
 

 

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

615

 

 

$

1,509

 

 

$

3,095

 

 

$

6,795

 

General and administrative

 

 

3,731

 

 

 

1,411

 

 

 

6,730

 

 

 

5,089

 

Restructuring expense

 

 

1,802

 

 

 

—

 

 

 

2,292

 

 

 

—

 

Total operating expenses

 

 

6,148

 

 

 

2,920

 

 

 

12,117

 

 

 

11,884

 

Loss from operations

 

 

(6,148

)

 

 

(2,920

)

 

 

(12,117

)

 

 

(11,884

)

Other income, net

 

 

4

 

 

 

27

 

 

 

39

 

 

 

17

 

Warrant inducement expense

 

 

—

 

 

 

—

 

 

 

(4,829

)

 

 

—

 

Net loss and comprehensive loss

 

$

(6,144

)

 

$

(2,893

)

 

$

(16,907

)

 

$

(11,867

)

Net loss per share, basic and diluted

 

$

(5.51

)

 

$

(4.01

)

 

$

(16.81

)

 

$

(18.74

)

Weighted-average common shares outstanding, basic and diluted

 

 

1,114,133

 

 

 

720,829

 

 

 

1,006,008

 

 

 

633,187

 

 

Media:

Amanda Sellers

[email protected]

301.332.5574

Investors:

Bruce Mackle

LifeSci Advisors, LLC

[email protected]

929.469.3859

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Health Stem Cells Genetics General Health Clinical Trials Pharmaceutical Biotechnology

MEDIA:

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GAN Reports Third Quarter 2020 Financial Results

GAN Reports Third Quarter 2020 Financial Results

New Customer Wins and Readiness for Michigan Launch Drives 86% Year-over-Year Increase in Quarterly Revenue

Coolbet acquisition to bring additional scale and provides near-turnkey capabilities in Online Sports Betting to enhance GAN’s Business-to-Business platform offerings

IRVINE, Calif.–(BUSINESS WIRE)–
GAN Limited (the “Company” or “GAN”) (NASDAQ: GAN), a leading business-to-business supplier of internet gaming software-as-a-service solutions primarily to the U.S. land-based casino industry, today reported its unaudited financial results for third quarter ended September 30, 2020.

Third Quarter Highlights Compared to Prior Year Quarter

  • Quarterly revenue of $10.3 million, up 86% from $5.5 million
  • Real money Internet gaming (“RMiG”) revenue of $7.7 million, up from $4.1 million
  • Simulated gaming revenue of $2.6 million, up from $1.4 million
  • Gross profit of $6.4 million, up from $2.4 million
  • Net loss attributable to equity holders was $4.1 million, or $0.14 basic and diluted per share, compared to net loss attributable to equity holders of $1.8 million, or $0.09 basic and diluted per share
  • Gross Operator Revenue(1) increased 76% to $142.3 million
  • Active Player-Days(2) and Average Revenue per Daily Active User(3) (“ARPDAU”) increased 38% and 27%, respectively
  • Adjusted EBITDA(4) was $(0.1) million, up from $(0.4) million
  • Pending acquisition of Vincent Group p.l.c.(“Coolbet”) for €149.1 million, a best-in-class RMiG platform with both Online Sports Betting (“OSB”) and iGaming offerings, and a diversified revenue stream across Northern Europe, Latin America and Canada

Dermot Smurfit, CEO of GAN stated:

“We built strong momentum in the third quarter and our results were in-line with our expectations. We added multiple new RMiG and Simulated Gaming customers over the last several months, demonstrating the unique and highly differentiated capabilities of our SaaS platform for integrated iGaming and Online Sports Betting. GAN continues to prove it’s the leading partner of choice for land-based casinos through an expanding solution offering, that allows our customers to quickly and efficiently expand their reach across the online gaming space. Our new customer pipeline in the U.S. remains strong and we’re building exciting relationships that we believe have the ability to scale across our customers’ casino portfolios as more states come online in the future. Our business remains strongly positioned to leverage the momentum of online sports betting and iGaming, which is clearly accelerating across the globe.”

“I am also excited to announce the strategic acquisition of Coolbet, as we continue developing and investing in our capabilities. Coolbet is a best-in-class RMiG provider, with both Online Sports Betting and iGaming offerings. The acquisition will allow GAN to provide near-turnkey capabilities in Online Sports Betting, rounding out our B2B platform offering in the U.S. We view this acquisition as the next strategic move in our growth strategy as we look to diversify our business model and geographic exposure. Enhancing our B2B platform with Coolbet’s solutions will allow us to leverage their proprietary OSB technology, engineering and know-how. We look forward to welcoming the Coolbet team to GAN and have already started to work diligently around our integration plans as we look to finalize the transaction over the next few months.”

Third Quarter 2020 Compared to Third Quarter 2019

Key Financial Highlights (Unaudited)

Three Months Ended September 30, 2020 and 2019

(in thousands of US$)
 

 

Three months ended

September 30,

 

 

2020

 

2019

Revenue

 

 

 

 

RMiG Revenue

 

7,689

 

 

4,127

 

Simulated Gaming Revenue

 

2,577

 

 

1,389

 

Total Revenue

 

10,266

 

 

5,516

 

 

 

 

 

 

Profitability Measures

 

 

 

 

RMiG gross profit margin

 

73

%

 

64

%

Simulated Gaming gross profit margin

 

58

%

 

57

%

Net loss attributable to equity holders

 

(4,078

)

 

(1,834

)

Adjusted EBITDA(4)

 

(114

)

 

(372

)

 

 

 

 

 

Key Performance Indicators

 

 

 

 

Gross Operator Revenue(1) (US$ millions)

 

142.3

 

 

80.8

 

Active Player-Days(2) (in millions)

 

7.5

 

 

5.4

 

ARPDAU(3) (US$)

 

18.93

 

 

14.89

 

Gross Profit – Gross Profit for the third quarter of 2020 was $6.4 million or 62% compared to $2.4 million or 44% for the third quarter of 2019. RMiG gross profit increased by $3.0 million which was primarily attributable to new customer launches and organic growth, partially offset by the impact of lower margin hardware equipment sales in the third quarter of 2020. Simulated Gaming gross profit increased by $0.7 million, which was attributable to organic growth. The Company’s depreciation and amortization included in cost of revenue was $0.8 million, a decrease of $0.3 million from the third quarter of 2019 due to certain development assets becoming fully amortized prior to third quarter of 2020.

Administrative Expenses – Administrative expenses for the third quarter of 2020 were $10.4 million compared to $4.1 million for the third quarter of 2019. The increase in administrative expenses was primarily attributable to (i) personnel and related costs of increasing from approximately 141 employees to 215 employees, (ii) share-based compensation for directors and key personnel, and (iii) increased professional services related to capital markets advisory, consulting, accounting advisory, tax advisory and legal expenses incurred in connection with corporate infrastructure and expansion projects, and additional compliance requirements as a result of becoming a public company in the United States in May 2020.

Additionally, the Company incurred $0.9 million of charges related to estimated tax provisions. These estimated tax provisions are the result of tax advisory services and internal audits pertaining to VAT, as well as potential application of the South Dakota v. Wayfair Supreme Court decision on June 21, 2018 as it related to U.S. sales and use taxes.

Net Loss Attributable to Equity Holders – Net loss attributable to equity holders was $4.1 million, or $0.14 per diluted share, compared to net loss attributable to equity holders of $1.8 million, or $0.09 per diluted share for the third quarter of the prior year.

Adjusted EBITDA – Adjusted EBITDA for the third quarter of 2020 was $(0.1) million, compared to $(0.4) million for the third quarter of 2019. The increase was primarily driven by growth partially offset by higher administrative expenses.

Cash and Cash Equivalents – Cash and cash equivalents were $57.5 million at September 30, 2020, compared to $10.1 million at December 31, 2019. Increased cash and cash equivalents primarily reflect the net proceeds received from the Company’s initial public offering residing in an interest-bearing account.

Coolbet Share Exchange Agreement

GAN announced today that it entered into a Share Exchange Agreement to acquire the Vincent Group p.l.c., and its flagship Coolbet brand for total consideration of €149.1 million (subject to adjustment as provided in the Share Exchange Agreement). The acquisition is expected to close in the first quarter of 2021, subject to regulatory review and the satisfaction of certain closing conditions. GAN expects to fund the acquisition with €80 million in cash and the remainder through an exchange of the Company’s ordinary shares. Please see GAN’s release on the announcement of the acquisition that was issued today for more details.

Outlook

Dermot Smurfit, CEO of GAN concluded:

“We look forward to the potential launch of multiple customers in Michigan, which are anticipated to go live in December. We are reiterating our previous outlook of $37 to $39 million in revenue this year, which includes IP licensing related deals subject to timing variability. Our pipeline remains robust, and we expect to see gross operator revenue accelerate as we progress through 2021. We also look forward to finalizing the acquisition of Coolbet in early 2021 and believe it will bring advantageous scale, geographic diversity and opportunity, as well as near-turnkey capabilities in Online Sports Betting that will help us further differentiate and enhance our U.S. platform. We remain confident that our unique position, differentiated solutions, strong management team, and solid financial position will enable us to continue to grow throughout 2021 and beyond.”

Conference Call Details
 

Date/Time:

 

Monday, November 16, 2020, at 4:30 PM EST

Webcast:

 

https://www.webcast-eqs.com/ganlimited20201116/en

U.S. Toll-Free Dial In:

 

(877) 407-0989

International Dial In:

 

(201) 389-0921

To access the call, please dial in approximately ten minutes before the start of the call. An accompanying slide presentation will be available in PDF format on the, “Results and Presentations” page of the Company’s website (http://gan.com/investors/results-and-presentations) after issuance of the earnings release.

About GAN Limited

GAN is a leading business-to-business supplier of internet gambling software-as-a-service solutions predominantly to the U.S. land-based casino industry. GAN has developed a proprietary internet gambling enterprise software system, GameSTACK™, which it licenses to land-based casino operators as a turnkey technology solution for regulated real-money internet gambling, encompassing internet gaming, internet sports gaming and virtual Simulated Gaming.

Non-GAAP Financial Measures

(1) The Company defines Gross Operator Revenue as the sum of its corporate customers’ gross revenue from Simulated Gaming, gross gaming revenue from real money regulated iGaming, and gross sports win from real money regulated sports betting. Gross Operator Revenue, which is not comparable to financial information presented in conformity with GAAP, gives management and users an indication of the extent of transactions processed through the Company’s corporate customers’ platforms and allows management to understand the extent of activity that the Company’s platform is processing.

(2) The Company defines Active Player-Days as unique individuals who log on and wager each day (either wagering with real money or playing with virtual credits used in Simulated Gaming), aggregated during the calendar year period. By way of illustrative example: one (1) unique individual logging in and wagering each day in a single calendar year would, in aggregate, represent 365 Active Player-Days. Active Player-Days provides an indicator of consistent and daily interaction that individuals have with the Company’s platforms. Active Player-Days allows management and users to understand not only total users who interact with the platform but gives an idea of the frequency to which users are interacting with the platform, as someone who logs on and wagers multiple days are weighted heavier during the period than the user who only logs on and wagers one day.

(3) The Company defines Average Revenue per Daily Active User (“ARPDAU”) as Gross Operator Revenue divided by the identified number of Active Player-Days. ARPDAU allows management to measure the value per daily user and track user interaction with the platforms, which helps both management and users of financial statements to understand the value per user that is driven by marketing efforts and data analysis obtained from the Company’s platforms.

(4)Adjusted EBITDA is a non-GAAP financial measure that is provided as supplemental disclosure which is defined as net income (loss) attributable to equity holders before finance costs, income taxes, depreciation and amortization, share-based payment expense and related expense, initial public offering related costs and other items which our Board of Directors considers to be infrequent or unusual in nature. The infrequent or unusual items related to accruals for resolution of outstanding VAT taxes and outstanding U.S. sales and use taxes for the three and nine months ended September 30, 2020.

Management uses the non-GAAP measure Adjusted EBITDA to measure its financial performance. Specifically, it uses Adjusted EBITDA (1) as a measure to compare its operating performance from period to period, as it removes the effect of items not directly resulting from core operations and (2) as a means of assessing its core business performance against others in the industry, because it eliminates some of the effects that are generated by differences in capital structure, depreciation, tax effects and unusual and infrequent events. The presentation of Adjusted EBITDA is not intended to be used in isolation or as a substitute for any measure prepared in accordance with GAAP. Adjusted EBITDA, as defined, may not be comparable to similarly titled measures used by other companies in the industry, and Adjusted EBITDA may exclude financial information that some investors may consider important in evaluating the Company’s performance. Adjusted EBITDA, as calculated by the Company, along with a reconciliation to net income (loss) attributable to equity holders, the comparable GAAP equivalent measure, is included below.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the pending acquisition of Coolbet and the anticipated benefits to the Company related thereto, the timing of closing the Coolbet acquisition, the Company’s 2020 revenue guidance, the strength of the Company’s customer pipeline and ability to scale as more states legalize real money iGaming, the Company’s competitive position with respect to iGaming and online sports betting, anticipated trends in revenues (including new customer launches), operating expenses and gross operator revenue, and management’s expectation of continued growth throughout 2021 and beyond, as well as statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “forecast,” “estimate,” “may,” “should,” “anticipate” and similar statements of a future or forward-looking nature. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update or revise any forward-looking statements for any reason, except as required by law.

No Offer of Securities

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended (“Securities Act”).

GAN Limited
Interim Condensed Consolidated Statement of Operations (Unaudited)
Three and Nine Months Ended September 30, 2020 and 2019
(in thousands of US$, except share data)
 

 

 

Three months ended

September 30,

 

Nine months ended

September 30,

 

 

2020

 

2019

 

2020

 

2019

Revenue

 

10,266

 

 

5,516

 

 

26,259

 

 

19,280

 

Cost of revenue

 

3,894

 

 

3,099

 

 

9,338

 

 

10,177

 

Gross profit

 

6,372

 

 

2,417

 

 

16,921

 

 

9,103

 

Administrative expenses

 

10,430

 

 

4,079

 

 

28,540

 

 

10,146

 

Operating loss

 

(4,058

)

 

(1,662

)

 

(11,619

)

 

(1,043

)

Net finance costs

 

25

 

 

31

 

 

454

 

 

93

 

Loss before income taxes

 

(4,083

)

 

(1,693

)

 

(12,073

)

 

(1,136

)

Income tax (benefit) expense

 

(5

)

 

141

 

 

312

 

 

409

 

Net loss attributable to equity holders of the Parent

 

(4,078

)

 

(1,834

)

 

(12,385

)

 

(1,545

)

 

 

 

 

 

 

 

 

 

Loss per share attributable to ordinary shareholders, basic and diluted

 

(0.14

)

 

(0.09

)

 

(0.48

)

 

(0.07

)

Weighted average shares outstanding, basic and diluted

 

29,571,905

 

 

21,362,133

 

 

25,782,776

 

 

21,349,572

 

GAN Limited
Interim Condensed Consolidated Statement of Financial Position (Unaudited)
(in thousands of US$)
 

 

 

September 30, 2020

 

December 31, 2019

ASSETS

 

 

 

 

Non-current assets

 

 

 

 

Intangible assets

 

6,008

 

5,164

Property, plant and equipment

 

655

 

190

Right-of-use assets

 

782

 

1,334

Lease deposits

 

68

 

115

Contract costs

 

291

 

57

Total non-current assets

 

7,804

 

6,860

Current assets

 

 

 

 

Cash and cash equivalents

 

57,489

 

10,098

Trade and other receivables

 

9,079

 

5,974

R&D tax credit receivable

 

–

 

1,127

Inventory

 

416

 

883

Prepayments

 

3,099

 

1,061

Lease deposits

 

77

 

80

Contract costs

 

55

 

29

Total current assets

 

70,215

 

19,252

Total assets

 

78,019

 

26,112

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

13,358

 

6,760

Contract liabilities

 

1,561

 

3,023

Current portion of lease liabilities

 

299

 

692

Total current liabilities

 

15,218

 

10,475

Non-current liabilities

 

 

 

 

Lease liabilities

 

355

 

535

Total liabilities

 

15,573

 

11,010

Equity

 

62,446

 

15,102

Total liabilities and equity

 

78,019

 

26,112
GAN Limited
Interim Condensed Consolidated Statement of Cash Flows (Unaudited)
(in thousands of US$)
 

 

 

Nine months ended

September 30,

 

 

2020

 

2019

Cash flows from operating activities

 

 

 

 

Net loss attributable to equity holders

 

(12,385

)

 

(1,545

)

Adjustments to reconcile net loss to cash (used in) provided by operating activities

 

8,960

 

 

4,207

 

Changes in working capital accounts

 

848

 

 

1,709

 

Net cash (used in) provided by operating activities

 

(2,577

)

 

4,371

 

Cash flows from investing activities

 

 

 

 

Interest received

 

4

 

 

10

 

Purchase of intangible assets

 

(3,110

)

 

(2,279

)

Purchase of property, plant and equipment

 

(560

)

 

(380

)

Net cash used in investing activities

 

(3,666

)

 

(2,649

)

Cash flows from financing activities

 

 

 

 

Proceeds from issuance of shares in initial public offering, net

 

57,445

 

 

–

 

Payment of deferred offering costs

 

(1,678

)

 

–

 

Payment to previous shareholders

 

(2,525

)

 

–

 

Proceeds from exercise of share options

 

2,279

 

 

79

 

Payment of finance costs

 

(385

)

 

–

 

Capital element of lease liabilities payments

 

(609

)

 

(524

)

Interest paid on lease liabilities

 

(66

)

 

(105

)

Net cash provided by (used in) financing activities

 

54,461

 

 

(550

)

Effect of exchange rate on cash and cash equivalents

 

(827

)

 

442

 

Increase in cash and cash equivalents

 

47,391

 

 

1,614

 

Cash and cash equivalents, beginning of period

 

10,098

 

 

6,967

 

Cash and cash equivalents, end of period

 

57,489

 

 

8,581

 

GAN Limited
Segment Revenue and Gross Profit (Unaudited)
Three and Nine Months Ended September 30, 2020 and 2019
(in thousands of US$)
 

 

 

Three months ended

September 30,

 

Nine months ended

September 30,

 

 

2020

 

2019

 

2020

 

2019

RMiG

 

 

 

 

 

 

 

 

SaaS Revenue

 

4,803

 

 

2,868

 

 

13,706

 

 

7,235

 

Service Revenue

 

1,413

 

 

1,259

 

 

4,453

 

 

2,798

 

Other

 

1,473

 

 

–

 

 

1,473

 

 

4,904

 

RMiG Revenue

 

7,689

 

 

4,127

 

 

19,632

 

 

14,937

 

 

 

 

 

 

 

 

 

 

Simulated Gaming

 

 

 

 

 

 

 

 

SaaS Revenue

 

2,111

 

 

1,084

 

 

5,563

 

 

3,467

 

Service Revenue

 

466

 

 

305

 

 

1,064

 

 

876

 

Simulated Gaming Revenue

 

2,577

 

 

1,389

 

 

6,627

 

 

4,343

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

10,266

 

 

5,516

 

 

26,259

 

 

19,280

 

 

 

 

 

 

 

 

 

 

RMiG

 

 

 

 

 

 

 

 

Revenue

 

7,689

 

 

4,127

 

 

19,632

 

 

14,937

 

Cost of sales (excl. depreciation and amortization)

 

2,062

 

 

1,484

 

 

4,322

 

 

4,988

 

RMiG Segment Gross Profit

 

5,627

 

 

2,643

 

 

15,310

 

 

9,949

 

Segment gross profit margin %

 

73

%

 

64

%

 

78

%

 

67

%

 

 

 

 

 

 

 

 

 

Simulated Gaming

 

 

 

 

 

 

 

 

Revenue

 

2,577

 

 

1,389

 

 

6,627

 

 

4,343

 

Cost of sales (excl. depreciation and amortization)

 

1,074

 

 

598

 

 

2,727

 

 

1,744

 

Simulated Gaming Segment Gross Profit

 

1,503

 

 

791

 

 

3,900

 

 

2,599

 

Segment gross profit margin %

 

58

%

 

57

%

 

59

%

 

60

%

 

 

 

 

 

 

 

 

 

Cost of sales, depreciation and amortization

 

758

 

 

1,017

 

 

2,289

 

 

3,445

 

Total Gross Profit

 

6,372

 

 

2,417

 

 

16,921

 

 

9,103

 

Gross profit margin %

 

62

%

 

44

%

 

64

%

 

47

%
GAN Limited
Revenue by Geography (Unaudited)
Three and Nine Months Ended September 30, 2020 and 2019
(in thousands of US$)
 

 

Three months ended

September 30,

Nine months ended

September 30,

 

 

2020

 

2019

 

2020

 

2019

Revenue by Geography*

 

United States

8,662

4,455

21,957

 

15,887

Italy

1,279

1,047

3,714

 

3,315

U.K. and Channel Islands

10

1

253

 

4

Rest of the world

315

13

335

 

74

Total

10,266

5,516

26,259

 

19,280
 

* Revenue is segmented based upon the location of the legal entity of the Company’s customer

 

(in thousands of US$)

Three months ended

September 30,

Nine months ended

September 30,

 

 

2020

 

2019

 

2020

 

2019

Net loss attributable to equity holders

(4,078

)

(1,834

)

(12,385 )

(1,545

)

Income tax (benefit) expense

(5

)

141

 

312

409

 

Loss before income taxes

(4,083

)

(1,693

)

(12,073 )

(1,136

)

Non-operating expense

 

 

 

Net finance costs

25

 

31

 

454

93

 

Depreciation expense

269

 

195

 

610

627

 

Amortization expense

716

 

961

 

2,166

3,264

 

 

1,010

 

1,187

 

3,230

3,984

 

EBITDA

(3,073

)

(506

)

(8,843

 )

2,848

 

Share-based payment and related expense

2,020

 

134

 

9,503

392

 

Initial public offering transaction related

–

 

–

 

2,831

–

 

Tax related provisions

939

 

–

 

939

–

 

Adjusted EBITDA

(114

)

(372

)

4,430

3,240

 

Adjusted EBITDA margin %

(1

)%

(7

)%

 17 %

17

%

 

Investor Contacts:

GAN

Jack Wielebinski

Head of Investor Relations

(214) 799-4660

[email protected]

Alpha IR Group

Sofia Byrne or Chris Hodges

(312) 445-2870

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Entertainment Technology Online Mobile Entertainment Software Casino/Gaming

MEDIA:

Posted on

Capstone Companies Reports Third Quarter 2020

Capstone Companies Reports Third Quarter 2020

DEERFIELD BEACH, Fla.–(BUSINESS WIRE)–
Capstone Companies, Inc. (OTC: CAPC) (“Capstone” or the “Company”), a designer, manufacturer and marketer of consumer inspired products that bridge technological innovations with today’s lifestyle reported its financial results for the first quarter 2020.

Gerry McClinton, Capstone’s CFO, commented, “While the Company continues to navigate its way through the COVID-19 pandemic, management remains focused on its year-end and 2021 strategic initiatives. Management will continue to react to the ongoing changes, but our long-term strategies will remain intact.”

Mr. Wallach added, “we are patiently awaiting retail markets to re-open to full capacity. Our primary focus has been on the re-launch of the Capstone Connected Smart Mirror campaign. We believe we are well positioned to make an impact on the Smart Home Market through this introduction as we approach 2021.”

About Capstone Companies, Inc.

Capstone Companies, Inc. is a public holding company that engages, through its wholly-owned subsidiaries, Capstone Industries, Inc., Capstone Lighting Technologies, LLC, and Capstone International HK, Limited, in the development, manufacturing and marketing of consumer product to retail channels throughout North America and international markets.

Visit www.capstonecompaniesinc.com for more information about the Company and www.capstoneindustries.com for information on our current product offerings.

FORWARD-LOOKING STATEMENTS:

This news release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995, as amended. Such statements consist of words like “anticipate,” “expect,” “project,” “continue” and similar words. These statements are based on the Company’s and its subsidiaries’ current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include consumer acceptance of the Company’s products, its ability to deliver new products, the success of its strategy to broaden market channels and the relationships it has with retailers and distributors. Prior success in operations does not necessarily mean success in future operations. The ability of the Company to adequately and affordably fund operations and any growth will be critical to achieving and sustaining any expansion of markets and revenue. The introduction of new products or the expanded availability of products does not mean that the Company will enjoy better financial or business performance. The risks associated with any investment in Capstone Companies, Inc., which is a small business concern and a “penny-stock Company” and, as such, a highly risky investment suitable for only those who can afford to lose such investment, should be evaluated together with the risks and uncertainties more fully described in the Company’s Annual and Quarterly Reports filed with the Securities and Exchange Commission. Capstone Companies, Inc. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Contents of referenced URLs are not incorporated into this press release.

Company:

Aimee Brown

Corporate Secretary

(954) 252-3440, ext. 313

FINANCIAL TABLES FOLLOW. THE FOLLOWING SUMMARY FINANCIAL STATEMENT SHOULD BE READ ALONG WITH THE FORM 10-K FINANCIAL STATEMENT FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Important Message Regarding COVID – 19

As the COVID-19 pandemic continues to spread around the world, Capstone is considering all recommended and required steps to ensure its employees’ health and safety in its workplaces.

We are following closely the recommendations of the Center for Disease Control and Prevention, Department of Homeland Security, State Department and local government guidelines and recommendations and the World Health Organization guidelines as applicable to our overseas’ offices.

We are committed to maintaining business reporting; however, we may need to modify the norm in doing so due to employees working remotely.

 

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 

September 30,

 

December 31,

 

2020

 

 

 

2019

 

Assets:

(Unaudited)

 

 

Current Assets:
Cash

$

1,314,508

 

$

3,131,249

 

Accounts receivable, net

 

211,509

 

 

13,459

 

Inventories

 

13,426

 

 

24,818

 

Prepaid expenses

 

113,636

 

 

182,782

 

Income tax refundable

 

794,838

 

 

220,207

 

Total Current Assets

 

2,447,917

 

 

3,572,515

 

 
Property and equipment, net

 

63,166

 

 

65,649

 

Operating lease- right of use asset

 

172,796

 

 

214,202

 

Deposit

 

11,148

 

 

46,021

 

Goodwill

 

1,445,254

 

 

1,936,020

 

Total Assets

$

4,140,281

 

$

5,834,407

 

 
Liabilities and Stockholders’ Equity:
Current Liabilities:
Accounts payable and accrued liabilities

$

632,750

 

$

635,593

 

Paycheck protection program loan-current portion

 

49,971

 

 

–

 

Operating lease- current portion

 

61,675

 

 

51,174

 

Total Current Liabilities

 

744,396

 

 

686,767

 

 
Long-Term Liabilities:
Paycheck protection program loan-long term portion

 

39,988

 

 

–

 

Operating lease- long-term portion

 

124,207

 

 

170,998

 

Total Long-Term Liabilities

 

164,195

 

 

170,998

 

Total Liabilities

 

908,591

 

 

857,765

 

 
Commitments and Contingencies
 
Stockholders’ Equity:
Preferred Stock, Series A, par value $.001 per share, authorized 6,666,667 shares, issued -0- shares

 

–

 

 

–

 

Preferred Stock, Series B-1, par value $.0001 per share, authorized 3,333,333 shares, issued -0- shares

 

–

 

 

–

 

Preferred Stock, Series C, par value $1.00 per share, authorized 67 shares, issued -0- shares

 

–

 

 

–

 

Common Stock, par value $.0001 per share, authorized 56,666,667 shares, issued 46,296,364 shares at September 30, 2020 and 46,579,747 shares at December 31, 2019

 

4,630

 

 

4,658

 

Additional paid-in capital

 

7,049,128

 

 

7,061,565

 

Accumulated deficit

 

(3,822,068

)

 

(2,089,581

)

Total Stockholders’ Equity

 

3,231,690

 

 

4,976,642

 

Total Liabilities and Stockholders’ Equity

$

4,140,281

 

$

5,834,407

 

 
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
 

For the Three Months Ended

 

For the Nine Months Ended

September 30,

 

September 30,

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

 

Revenues, net

$

709,654

 

$

5,354,190

 

$

1,765,189

 

 

$

11,740,814

 

Cost of sales

 

(535,270

)

 

(4,139,214

)

 

(1,521,628

)

 

 

(9,165,140

)

Gross Profit

 

174,384

 

 

1,214,976

 

 

243,561

 

 

 

2,575,674

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

Sales and marketing

 

22,337

 

 

102,193

 

 

277,264

 

 

 

329,463

 

Compensation

 

362,706

 

 

381,795

 

 

1,139,107

 

 

 

1,138,960

 

Professional fees

 

99,579

 

 

112,687

 

 

339,816

 

 

 

353,293

 

Product development

 

75,948

 

 

81,060

 

 

169,133

 

 

 

260,823

 

Other general and administrative

 

113,026

 

 

169,572

 

 

364,941

 

 

 

490,835

 

Goodwill impairment charge

 

–

 

 

–

 

 

490,766

 

 

 

–

 

Total Operating Expenses

 

673,596

 

 

847,307

 

 

2,781,027

 

 

 

2,573,374

 

 

 

 

 

 

Operating Income (Loss)

 

(499,212

)

 

367,669

 

 

(2,537,466

)

 

 

2,300

 

 

 

 

 

 

Other Income (Expenses):

 

 

 

 

 

Interest Expense

 

(47

)

 

(3,206

)

 

(181

)

 

 

(3,206

)

Other Income (Expense), Net

 

–

 

 

2,610

 

 

–

 

 

 

135

 

Total Other Income (Expenses)

 

(47

)

 

(596

)

 

(181

)

 

 

(3,071

)

 

 

 

 

 

Income (Loss) Before Tax Benefit

 

(499,259

)

 

367,073

 

 

(2,537,647

)

 

 

(771

)

 

 

 

 

 

Benefit for Income Tax

 

(21,222

)

 

–

 

 

(805,160

)

 

 

(12,000

)

 

 

 

 

 

Net Income (Loss)

$

(478,037

)

$

367,073

 

$

(1,732,487

)

 

$

11,229

 

 

 

 

 

 

Net Income (Loss) per Common Share

 

 

 

 

 

Basic and Diluted

$

(0.01

)

$

0.01

 

$

(0.04

)

 

$

0.00

 

 

 

 

 

 

Weighted Average Shares Outstanding

 

 

 

 

 

Basic and Diluted

 

46,296,364

 

 

46,882,538

 

 

46,350,909

 

 

 

46,874,256

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

 

 

 

 

 

 

 

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND SEPTEMBER 30, 2019

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

Preferred Stock

 

Preferred Stock

 

 

 

Additional

 

 

 

 

Series A

 

Series B

 

Series C

 

Common Stock

 

Paid-In

 

Accumulated

 

Total

Shares

 

Par Value

 

Shares

 

Par Value

 

Shares

 

Par Value

 

Shares

 

Par Value

 

Capital

 

Deficit

 

Equity
 
Balance at December 31, 2019

–

$

–

–

$

–

–

$

–

46,579,747

 

$

4,658

 

$

7,061,565

 

$

(2,089,581

)

$

4,976,642

 

 
Stock options for compensation

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

8,925

 

 

–

 

 

8,925

 

Repurchase of shares

–

 

–

–

 

–

–

 

–

(283,383

)

 

(28

)

 

(36,305

)

 

–

 

 

(36,333

)

Net Loss

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

–

 

 

(597,376

)

 

(597,376

)

Balance at March, 31, 2020

–

 

–

–

 

–

–

 

–

46,296,364

 

 

4,630

 

 

7,034,185

 

 

(2,686,957

)

 

4,351,858

 

 
 
Stock options for compensation

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

8,925

 

 

–

 

 

8,925

 

Net Loss

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

–

 

 

(657,074

)

 

(657,074

)

Balance at June 30, 2020

–

 

–

–

 

–

–

 

–

46,296,364

 

 

4,630

 

$

7,043,110

 

$

(3,344,031

)

$

3,703,709

 

 
Stock options for compensation

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

6,018

 

 

–

 

 

6,018

 

Net Loss

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

–

 

 

(478,037

)

 

(478,037

)

Balance at September 30, 2020

–

$

–

–

$

–

–

$

–

46,296,364

 

$

4,630

 

$

7,049,128

 

$

(3,822,068

)

$

3,231,690

 

 
 
Balance at December 31, 2018

–

$

–

–

$

–

–

$

–

47,046,364

 

$

4,704

 

$

7,092,219

 

$

(1,197,912

)

$

5,899,011

 

Stock options for compensation

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

11,025

 

 

–

 

 

11,025

 

Repurchase of shares

–

 

–

–

 

–

–

 

–

(45,470

)

 

(3

)

 

(8,612

)

 

–

 

 

(8,615

)

Net Loss

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

–

 

 

(345,340

)

 

(345,340

)

Balance at March 31, 2019

–

 

–

–

 

–

–

 

–

47,000,894

 

 

4,701

 

 

7,094,632

 

 

(1,543,252

)

 

5,556,081

 

 
 
Stock options for compensation

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

11,025

 

 

–

 

 

11,025

 

Repurchase of shares

–

 

–

–

 

–

–

 

–

(168,530

)

 

(17

)

 

(27,246

)

 

–

 

 

(27,263

)

Net Loss

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

–

 

 

(10,504

)

 

(10,504

)

Balance at June 30, 2019

–

 

–

–

 

–

–

 

–

46,832,364

 

 

4,684

 

 

7,078,411

 

 

(1,553,756

)

 

5,529,339

 

 
Stock options for compensation

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

9,732

 

 

–

 

 

9,732

 

Repurchase of shares

–

 

–

–

 

–

–

 

–

(79,945

)

 

(7

)

 

(11,630

)

 

–

 

 

(11,637

)

Net Loss

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

–

 

 

367,073

 

 

367,073

 

Balance at September 30, 2019

–

$

–

–

$

–

–

$

–

46,752,419

 

$

4,677

 

$

7,076,513

 

$

(1,186,683

)

$

5,894,507

 

 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Unaudited)

 

 

For the Nine Months Ended

September 30,

 

2020

 

 

 

2019

 

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income (Loss)

$

(1,732,487

)

$

11,229

 

Adjustments to reconcile net income (loss) to net cash used in

operating activities:

 

 

Depreciation and amortization

 

18,222

 

 

33,072

 

Stock based compensation expense

 

23,868

 

 

31,782

 

Noncash lease expense

 

41,406

 

 

–

 

Unpaid accrued interest on paycheck protection program loan

 

359

 

 

–

 

Goodwill impairment charge

 

490,766

 

 

–

 

Benefit for deferred income tax

 

–

 

 

(12,000

)

Increase in accounts receivable, net

 

(198,050

)

 

(2,087,830

)

Decrease in inventories

 

11,392

 

 

27,497

 

Decrease in prepaid expense

 

69,146

 

 

107,359

 

Decrease in deposits

 

34,873

 

 

75,912

 

Increase (decrease) in accounts payable and accrued liabilities

 

(2,843

)

 

454,004

 

Decrease in deferred rent incentive

 

 

–

 

 

 

(75,315

)

Increase in income tax refundable

 

(574,631

)

 

–

 

Decrease in operating lease liabilities

 

 

(36,290

)

 

 

–

 

Net cash used in operating activities

 

(1,854,269

)

 

(1,434,290

)

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

Purchase of property and equipment

 

(15,739

)

 

(34,123

)

Net cash used in investing activities

 

(15,739

)

 

(34,123

)

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

Proceeds from loan under paycheck protection program

 

89,600

 

 

–

 

Repurchase of Shares

 

(36,333

)

 

(47,515

)

Net cash provided by (used in) financing activities

 

53,267

 

 

(47,515

)

 

 

Net Decrease in Cash

 

(1,816,741

)

 

(1,515,928

)

Cash at Beginning of Period

 

3,131,249

 

 

3,822,359

 

Cash at End of Period

$

1,314,508

 

$

2,306,431

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the period for:

Interest

$

–

$

3,206

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

Aimee C. Brown

Corporate Secretary

(954) 252-3440, ext. 313

KEYWORDS: Florida United States North America

INDUSTRY KEYWORDS: Marketing Retail Consumer Electronics Communications Technology Home Goods

MEDIA:

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Posted on

GAN Limited Announced Agreement to Acquire Coolbet

GAN Limited Announced Agreement to Acquire Coolbet

Acquisition of Coolbet’s best-in-class international sportsbook engine provides GAN with a full-service solution to real money gaming in U.S.

Combination brings additional scale, geographical reach and offers new market opportunities for GAN’s B2B technology and a new vertical through B2C

IRVINE, Calif.–(BUSINESS WIRE)–
GAN Limited (the “Company” or “GAN”) (NASDAQ: GAN), a leading business-to-business supplier of internet gaming software-as-a-service solutions primarily to the U.S. land-based casino industry, today announced that it has signed a definitive purchase agreement to acquire Vincent Group p.l.c. (“Coolbet”) for a total consideration of approximately €149 million (subject to adjustment as provided in the Share Exchange Agreement). The acquisition is expected to close in the first quarter of 2021, subject to regulatory review and the satisfaction of certain closing conditions. GAN expects to fund the acquisition with new capital. Coolbet is an award-winning, Business-to-Consumer (“B2C”) iGaming operator, with a footprint in Northern Europe, Canada, and Latin America in real money iGaming and online sports betting.

Acquisition Highlights:

  • Vincent Group p.l.c. brings Coolbet, a sports focused brand to GAN, which was founded by the industry veteran Jan Svendsen and is supported by proprietary software with one of the most experienced engineering and trading teams in the industry.
  • Coolbet achieved trailing-twelve-month revenue of €26 million and a 46% revenue CAGR from 2018 to 2020, making it one of the fastest growing European B2C iGaming operators today.
  • The acquisition will leverage Coolbet’s industry-leading, proprietary sports betting technology, which is anticipated to be integrated into GAN’s turnkey technology solutions for launch in the U.S. RMiG market by second half of 2021.
  • Provides additional opportunity to leverage GAN’s business-to-business (“B2B”) experience and proprietary technology into Coolbet’s core markets and across its existing relationships with casino operators around the globe.
  • GAN to welcome over 175 new global employees and engineering talent, over 84,000 active customers in the third quarter of 2020, and an industry leading retention rate of 85% Quarter-on-Quarter in 2020.
  • Transaction is expected to close in the first quarter of 2021 and will be immediately accretive.

Dermot Smurfit Commented:

“From the onset of our IPO we have continued to enhance and perfect our internet gaming software-as-a-service solutions for the U.S. market. As a part of that growth strategy, we have been clear that we needed to add a best-in-class sportsbook engine to round out our real money iGaming platform, and we believe Coolbet is the perfect fit for both GAN and our customers. Coolbet launched in early 2016 in a hypercompetitive online market in Northern Europe and subsequently expanded into Latin America and Canada over the last two years. Since its launch, Coolbet has proven that its sportsbook offering is one of the best in the market today. Coolbet’s award winning user interface and proprietary technical platform will enable us to quickly introduce the sportsbook offering to our land-based casino customers across the U.S., who need a flexible and customizable solution to online gaming. Coolbet brings one of the most experienced teams of engineers in the industry and their technology is built on a similar architectural design as our own, which is anticipated to make the integration process fairly seamless. The timing of the acquisition ideally positions GAN to leverage its growing customer base, as well as the momentum that sports legislation has seen with the election results in Maryland, Louisiana, South Dakota, and Tennessee.”

“Additionally, Coolbet is more than just the best sportsbook platform we vetted during our process. Coolbet has a well-established global business, a strong and loyal B2C customer base, and a diversified revenue stream. They are expert marketers and have grown their top-line over 46% in highly competitive and established markets in Northern Europe, Latin American and Canada. We will not only achieve scale and diversity across our revenue streams through this combination, but we also see a strong opportunity to leverage Coolbet’s expertise and relationships in other markets where our industry-leading B2B SaaS platform can be deployed.”

“In summary, this union brings two of the best-in class, high-growth offerings in the iGaming space together, and makes a powerful combination. We expect to achieve significant revenue synergies across both platforms over the long-term and have structured the deal to be immediately accretive. We are excited to welcome the Coolbet team to GAN and look forward to building one of the most complete solutions in our industry. We view this acquisition as part of our unwavering commitment to shareholder value and our long-term growth strategy.”

Coolbet Background

Vincent Group p.l.c. is a Malta public limited company that operates an online gaming platform under the flagship brand, Coolbet. Coolbet’s proprietary platform was uniquely developed in-house, and offers online real-money gaming in sports, casino, poker and virtual e-sports. Coolbet currently has approximately 175 full-time equivalents, primarily based in Tallinn, Estonia, and a management team with extensive experience in the RMiG industry. Currently, the Company has gambling licenses in Estonia, Sweden and Malta.

Coolbet was awarded start-up of the year in 2017 by International Gaming Awards, World’s Best Bookmaker in 2018 and 2019 by TIPS magazine, and mobile sports product of the year in 2019 and 2020 by the International Gaming Awards.

Revenue for the first nine months of 2020 was €18.6 million, split approximately 50% in sports betting and 50% in casino and other. Coolbet has customers in Norway, Sweden, Finland, Iceland, Estonia, Chile and recently expanded into Canada and Peru. Despite the impact of COVID-19 on its markets in the second quarter of 2020, the Company has achieved an EBITDA of €0.5M for the nine months ended September 30, 2020 and break-even Net Operating Income. Coolbet has previously raised €35 million in equity through private placements and currently has no debt.

Transaction Summary

GAN is acquiring Vincent Group p.l.c in an exchange offer for €149.1 million, on a cash-free, debt-free basis, through a combination of cash and stock. The transaction, which has been unanimously approved by GAN Limited’s board of directors, is expected to close in the first quarter of 2021. It is subject to customary closing conditions, including regulatory approvals.

B. Riley Securities provided a fairness opinion to the GAN board of directors with respect to the acquisition, and Sheppard, Mullin, Richter & Hampton LLP, is acting as GAN’s legal counsel.

About GAN Limited

GAN is a leading business-to-business supplier of internet gambling software-as-a-service solutions predominantly to the U.S. land-based casino industry. GAN has developed a proprietary internet gambling enterprise software system, GameSTACK™, which it licenses to land-based casino operators as a turnkey technology solution for regulated real-money internet gambling, encompassing internet gaming, internet sports gaming and virtual Simulated Gaming.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the pending acquisition of Coolbet and the anticipated benefits to the Company related thereto (including the Company’s expectation that the acquisition will be immediately accretive with significant revenue synergies), the timing of closing the Coolbet acquisition, the momentum of U.S. states legalizing online sports betting, and the ability to grow Coolbet’s B2C business and revenue, as well as statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “forecast,” “estimate,” “may,” “should,” “anticipate” and similar statements of a future or forward-looking nature. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update or revise any forward-looking statements for any reason, except as required by law.

SMRH:4814-1456-8146.2

Investor Contacts:

GAN

Jack Wielebinski

Head of Investor Relations

(214) 799-4660

[email protected]

Alpha IR Group

Sofia Byrne or Chris Hodges

(312) 445-2870

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Electronic Games Technology Casino/Gaming Other Sports Sports Entertainment Software General Entertainment Internet

MEDIA:

Posted on

Nass Valley Gateway LTD Announces Its Full Line of Products are Now Available on Alibaba.com, the Global B2B E-Commerce Leader

Vancouver, BC, Nov. 16, 2020 (GLOBE NEWSWIRE) — via NewMediaWire — Nass Valley Gateway LTD., (NVG), (CSE: NVG.CN); (OTC Pink: NSVGF) (Frankfurt: “3NVN”) a distributor of top quality non-GMO health and wellness CBD consumables, is pleased to announce that the Company has been accepted as an approved seller by Alibaba.com and its full line of Nass Valley Gardens CBD human and pet products are now available on Alibaba.com.

Alibaba.com hosts the leading global B2B e-commerce platform in the world and as Nass Valley’s Director of E-Commerce, Brandon Gil, stated, “Alibaba.com’s B2B platform is clearly where Nass Valley needs to have a presence considering the design and flexibility of our supply chain for both large and small B2B customers. We too recognize Alibaba.com’s e-commerce leadership and look forward to working with them to grow our brand not only in North America, but globally. We will utilize the strength and reach of Alibaba.com to help customers access Nass Valley Gardens’ health and wellness products.”


ABOUT NASS VALLEY GATEWAY LTD.

Nass Valley Gateway LTD (NVG) is a publicly traded company on the CSE in the Life Sciences category. In late 2018, Nass Valley Gateway agreed to merge with Advanced Bioceuticals Limited, a New Jersey LLC focused on the cultivation, extraction, and sales of organic, non-GMO health and wellness products. These products are sold under the “Nass Valley Gardens” brand via retail, wholesale, direct response, and digital sales channels.

Neither the CSE nor its Regulation Services Provider has reviewed or accepts responsibility for the adequacy or accuracy of the contents of this news release.

Company: Nass Valley Gateway Ltd.

422 Richards Street, Suite 170

V6B 2Z4 Vancouver

Canada

Corporate: www.nassvalleygateway.com

Product : www.nassvalleyproducts.com

Investor Relations:

Michael Semler

+1 (609)651-0032

[email protected]

Listed: Regulated Unofficial Market in Berlin, Frankfurt, Hamburg,

Stuttgart; Toronto

EQS News ID: 818503

Source: Nass Valley Gateway Ltd



Posted on

Verizon to speak at Morgan Stanley European TMT Conference November 18

BASKING RIDGE, N.J., Nov. 16, 2020 (GLOBE NEWSWIRE) — Ronan Dunne, executive vice president for Verizon (NYSE, Nasdaq: VZ), and group CEO for Verizon Consumer, is scheduled to speak at the virtual Morgan Stanley European Technology, Media and Telecom Conference on Wednesday, November 18, at 9:30 a.m. ET. His remarks will be webcast, with access instructions available on Verizon’s Investor Relations website, www.verizon.com/about/investors/.

Verizon Communications Inc. (NYSE, Nasdaq: VZ) was formed on June 30, 2000 and is celebrating its 20th year as one of the world’s leading providers of technology, communications, information and entertainment products and services. Headquartered in New York City and with a presence around the world, Verizon generated revenues of $131.9 billion in 2019. The company offers data, video and voice services and solutions on its award-winning networks and platforms, delivering on customers’ demand for mobility, reliable network connectivity, security and control.

VERIZON’S ONLINE MEDIA CENTER: News releases, stories, media contacts and other resources are available at https://www.verizon.com/about/media-center. News releases are also available through an RSS feed. To subscribe, visit www.verizon.com/about/rss-feeds/.

Media contact:

Kim Ancin
[email protected]
908.559.3227

Eric Wilkens
[email protected]
201.572.9317



Posted on

TSS, Inc. Reports Third Quarter 2020 Results

ROUND ROCK, Texas, Nov. 16, 2020 (GLOBE NEWSWIRE) — TSS, Inc. (Other OTC: TSSI), a data center facilities and technology services company, reported results for its third quarter ended September 30, 2020.


Third


Quarter Highlights:

  • Third quarter 2020 revenue of $20.8 million compared with $4.2 million in the third quarter of 2019 and $6.5 million in the second quarter of 2020.
  • Gross margin of 13% in the third quarter of 2020 compared with 36% in the third quarter of 2019 and 12% in the second quarter of 2020.
  • Operating income of $966,000 in the third quarter of 2020 compared with operating loss of $12,000 in the third quarter of 2019.
  • Net income of $852,000 or $0.05 per share in the third quarter of 2020 compared to net loss of $95,000 or $(0.01) per share in the third quarter of 2019.
  • Adjusted EBITDA income of $1,142,000 compared with Adjusted EBITDA income of $157,000 in the third quarter of 2019.

“Our third quarter results produced strong revenue and profit as we adapted to the impacts of the COVID-19 pandemic. We were able to offset the financial impact it had on our second quarter and recover programs and deployments that were delayed in the second quarter.” said Anthony Angelini, President and Chief Executive Officer of TSS. “While there are still challenges relating to safety protocols and travel restrictions, we have been able to adapt while delivering and deploying our services for our customers. We expect that revenues will begin to normalize on a quarterly basis, allowing us to deliver more consistent results while continuing to grow year over year.”

Quarterly Conference Call Details

The Company has scheduled a conference call to discuss the third quarter 2020 financial results for Monday, November 16, 2020 at 4:30 PM Eastern. To participate on the conference call, please dial 877-691-2551 toll free from the U.S., or 630-691-2747 for international callers. The conference code is 50006509#. Investors may also access a live audio web cast of this conference call under the “events” tab on the investor relations section of the Company’s website at www.tssiusa.com.

An audio replay of the conference call will be available approximately one hour after the conclusion of the call and will be made available until December 16, 2020. The audio replay can be accessed at the following url:

https://onlinexperiences.com/Launch/QReg/ShowUUID=1D48C33C-8A80-4421-BDEF-AA68A99BDEBE&LangLocaleID=1033

The passcode to access the digital playback is 50006509. Additionally, a replay of the webcast will be available on the Company’s website approximately two hours after the conclusion of the call and will remain available for 30 calendar days.

About Non-GAAP Financial Measures

Adjusted EBITDA is a supplemental financial measure not defined under Generally Accepted Accounting Principles (GAAP). We define Adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation and amortization, impairment loss on goodwill and other intangibles, stock-based compensation, and provision for bad debts. We present Adjusted EBITDA because we believe this supplemental measure of operating performance is helpful in comparing our operating results across reporting periods on a consistent basis by excluding non-cash items that may, or could, have a disproportionate positive or negative impact on our results of operations in any particular period. We also use Adjusted EBITDA as a factor in evaluating the performance of certain management personnel when determining incentive compensation.

Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA, while providing useful information, should not be considered in isolation or as an alternative to net income or cash flows as determined under GAAP. Consistent with Regulation G under the U.S. federal securities laws, Adjusted EBITDA has been reconciled to the nearest GAAP measure, and this reconciliation is located under the heading “Adjusted EBITDA Reconciliation” following the Consolidated Statements of Operations included in this press release.

About TSS, Inc.

TSS is a trusted single source provider of mission-critical planning, design, system integration, deployment, maintenance and evolution of data centers facilities and information infrastructure. TSS specializes in customizable end to end solutions powered by industry experts and innovative services that include technology consulting, engineering, design, construction, operations, facilities management, technology system installation and integration, as well as maintenance for traditional and modular data centers. For more information, visit www.tssiusa.com or call 888-321-4877.

Forward Looking Statements

This press release may contain “forward-looking statements” — that is, statements related to future — not past — events, plans, and prospects. In this context, forward-looking statements may address matters such as our expected future business and financial performance, and often contain words such as “guidance,” “prospects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “should,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could adversely or positively affect the Company’s future results include: we may not have sufficient resources to fund our business and may need to issue debt or equity to obtain additional funding; our reliance on a significant portion of our revenues from a limited number of customers; risks relating to operating in a highly competitive industry; risks relating to the failure to maintain effective internal control over financial reporting; risks relating to rapid technological, structural, and competitive changes affecting the industries we serve; risks involved in properly managing complex projects; risks relating to the possible cancellation of customer contracts on short notice; risks relating to our ability to continue to implement our strategy, including having sufficient financial resources to carry out that strategy; risks relating to our ability to meet all of the terms and conditions of our debt obligations; uncertainty related to current economic conditions including the impact of the COVID-19 pandemic and the related impact on demand for our services; and other risks and uncertainties disclosed in our filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2019. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

Company Contact:

TSS, Inc.
John Penver, CFO
Phone: (512) 310-1000


TSS, Inc.

Consolidated Balance Sheets

(
I
n thousands except par values)

        September 30,       December 31,  
        2020       2019  
                   
Assets                
Current Assets                
  Cash and cash equivalents   $        9,455     $ 8,678  
  Contract and other receivables, net             1,258       3,865  
  Costs and estimated earnings in excess of billings on uncompleted contracts     341                                181  
  Inventories, net                  207       1,353  
  Prepaid expenses and other current assets                 237                       108  
  Total current assets     11,498                  14,185  
Property and equipment, net     764       705  
Lease right-of-use asset     1,034       1,481  
Goodwill     780       780  
Intangible assets, net               239                    307  
Other assets                    230                       109  
  Total assets   $ 14,545     $ 17,567  
Liabilities and Stockholders’ Equity                
Current Liabilities                
  Bank note payable   $         373     $         –  
  Lease liabilities                  721             645  
  Accounts payable and accrued expenses          2,888       8,851  
  Deferred revenues     4,959       2,104  
  Total current liabilities     8,941                  11,600  
Convertible notes, less current portion, net                  2,183       2,028  
Lease liabilities, less current portion     404       956  
Bank note payable, less current portion     520       –  
Deferred revenues – noncurrent portion     117       114  
  Total liabilities            12,165       14,968  
Stockholders’ Equity                
  Preferred stock- $.0001 par value; 1,000 shares authorized at September 30, 2020 and December 31, 2019; none issued     –        –   
  Common stock- $.0001 par value, 49,000 shares authorized at September 30, 2020 and December 31, 2019: 18,945 and 18,524 shares issued at September 30, 2020 and December 31, 2019, respectively                               
2		       2  
  Additional paid-in capital             69,902                  69,661  
  Treasury stock 1094 and 962 shares at cost at September 30, 2020 and December 31, 2019, respectively     (1,872 )     (1,700 )
  Accumulated deficit     (65,652 )     (65,094 )
  Total stockholders’ equity     2,380       2,869  
  Total liabilities and stockholders’ equity   $      14,545     $ 17,567  





TSS, Inc.

Condensed Consolidated Statements of Operations

(In thousands except per-share values, unaudited)

    Three Months Ended
 September 30,		     Nine Months Ended
 September 30,		  
    2020     2019     2020     2019  
Results of Operations:                        
Revenue   $ 20,763     $ 4,176     $ 37,814     $ 12,375  
Cost of revenue, excluding depreciation and amortization   17,9907     2,679     32,673     7,790  
Gross profit, excluding depreciation and amortization   2,773     1,497     5,141     4,585  
Operating expenses:                        
Selling, general and administrative   1,668     1,425     5,011     4,301  
Depreciation and amortization   139     84     390     244  
Total operating costs   1,807     1,509     5,401     4,545  
Operating income (loss)   996     (12 )   (260 )   40  
Interest income (expense), net   (117 )   (106 )   (311 )   (330 )
Other income (expense), net   12     28     40     92  
Income (loss) before income taxes   861     (90 )   (531 )   (198 )
Income tax expense   9     5     27     22  
Net income (loss)   $ 852     $ (95 )   $ (558 )   $ (220 )
                         
Basic net income (loss) per Share:   $ 0.05     $ (0.01 )   $ (0.03 )   $ (0.01 )

TSS, Inc.

Adjusted EBITDA Reconciliation

(In thousands, unaudited)

    Three Months Ended Sept 30,     Nine Months Ended Sept 30,
    2020     2019       2020       2019  
                             
Net income (loss) $ 852   $ (95 )   $ (558 )   $ (220 )
                             
Interest expense (income), net   105     78       271       238  
Depreciation and amortization   139     84       390       244  
Income tax expense   9     5       27       22  
EBITDA profit (loss) $ 1,105   $ 72     $ 130     $ 284  

Stock based compensation		   37     85       239       244  
Provision for bad debts   –     –       –       –  
Adjusted EBITDA profit (loss) $ 1,142   $ 157     $ 369     $ 528  

 



Posted on

Quest Resource Holding Reports Third Quarter 2020 Financial Results

THE COLONY, Texas, Nov. 16, 2020 (GLOBE NEWSWIRE) — Quest Resource Holding Corporation (NASDAQ: QRHC) (“Quest”), a national leader in environmental waste and recycling services, today announced financial results for the third quarter ended September 30, 2020.


Third


Quarter 20


20


Highlights

  • Revenue was $23.7 million, a 0.9% decrease compared with the third quarter of 2019.
  • Gross profit was $4.6 million, a 4.5% decrease compared with the third quarter of 2019.
  • Gross margin was 19.2% of revenue, compared with 19.9% for the third quarter of 2019.
  • Operating expenses decreased 2.4% to $4.4 million and included $355,000 ($0.02 per share) of professional fee expenses related to M&A related activities.
  • Net (loss) income per share attributable to common stockholders was $(0.02) compared with $0.00 during the third quarter of 2019. Included within the net loss per share for the third quarter was a non-cash deemed dividend adjustment of $(205,000), or $(0.01) per share, attributable to a change in warrants issued in a March 2016 public offering of common stock.
  • Adjusted EBITDA increased 15.0% to $989,000, compared with $860,000 during the third quarter of 2019.


Year-to-Date 2020 Highlights (


September


30, 2020)

  • Revenue was $71.0 million, a 6.6% decrease compared with the same period of 2019.
  • Gross profit was $13.5 million, a 4.2% decrease compared with the same period of 2019.
  • Gross margin was 19.0% of revenue, a 50 basis point improvement compared with 18.5% for the same period of 2019.
  • Other income of $1.4 million, or $0.09 per share, represented the use of PPP Loan proceeds to fund eligible expenses under the CARES Act.
  • Net income (loss) per share attributable to common shareholders improved to $0.04, compared with $(0.01) during the same period of 2019. Included within the net loss per share for the third quarter was a non-cash deemed dividend adjustment of $(205,000), or $(0.01) per share, attributable to anti-dilution provisions of warrants issued in a March 2016 public offering of common stock.
  • Year-to-date Adjusted EBITDA was $2.7 million, a 7.4% increase compared to the same period of 2019.

“We delivered 15% growth in Adjusted EBITDA during the third quarter, reflecting stability in our customer base, our flexible cost structure, and a tight control over costs. While customer activity levels in those end markets that were most severely impacted by COVID-19 are still below last year, volumes have improved sequentially and are stabilizing. Partially offsetting the headwind in these markets, we continue to see strength in other areas, such as grocery and specialty retail, which make up a large portion of our overall mix,” said S. Ray Hatch, President and Chief Executive Officer. “While there is still near-term uncertainty regarding the direction and pace of an economic recovery, we are encouraged that since the end of the quarter, we have seen pockets of growth from the expansion of programs with existing customers and the movement of new opportunities in our sales pipeline.

In addition, we completed our first acquisition as part of our broader M&A strategy, further leveraging the scale and scope of our national service platform. The acquisition of Green Remedies Waste & Recycling brings the potential for additional growth in an attractive end market, as well as significant EBITDA contribution. We expect that continued support of our customers, organic growth opportunities in our pipeline, and contributions from acquisitions like Green Remedies provide diversified revenue mix, ongoing revenue and gross profit growth, increased profitability through operating leverage, and attractive shareholder returns.”


Thir


d


Quarter 20


20


Earnings Conference Call and Webcast

Quest will conduct a conference call today, November 16, 2020, at 5:00 PM ET, to review the financial results for the third quarter ended September 30, 2020. Investors interested in participating on the live call can dial 1-866-548-4713 within the U.S. or 1-323-794-2093 from abroad, referencing conference ID: 2631839. The conference call, which may include forward-looking statements, is also being webcast and is available via the investor relations section of Quest’s website at http://investors.qrhc.com/. A replay of the webcast will be archived on Quest’s investor relations website for 90 days.


Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

In this press release, a non-GAAP financial measure, “Adjusted EBITDA,” is presented. From time-to-time, Quest considers and uses this supplemental measure of operating performance in order to provide an improved understanding of underlying performance trends. Quest believes it is useful to review, as applicable, both (1) GAAP measures that include (i) depreciation and amortization, (ii) interest expense, (iii) stock-based compensation expense, (iv) income tax expense, and (v) certain other adjustments, and (2) non-GAAP measures that exclude such items. Quest presents this non-GAAP measure because it considers it an important supplemental measure of Quest’s performance. Quest’s definition of this adjusted financial measure may differ from similarly named measures used by others. Quest believes this measure facilitates operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. This non-GAAP measure has limitations as an analytical tool and should not be considered in isolation or as a substitute for the Company’s GAAP measures. (See attached table “Reconciliation of Net Income (Loss) to Adjusted EBITDA.”)


About Quest Resource Holding Corporation

Quest is a national provider of waste and recycling services to customers from across multiple industry sectors that are typically larger, multi-location businesses. In addition, Quest’s programs and services enable customers to address their environmental and sustainability goals and responsibilities. Quest provides information that tracks and reports the environmental results of Quest’s services, provides actionable data to improve business operations, and enables customers to address their environmental and sustainability goals and responsibilities. For more information, visit www.qrhc.com.


Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which provides a “safe harbor” for such statements in certain circumstances. The forward-looking statements include, but are not limited to, our belief we have operations in place to sustainably support profitability while consistently providing excellent customer service; our belief that our outlook for growth from our existing customer base remains solid and our pipeline of new business is growing; our belief that our acquisition of Green Remedies brings the potential for additional growth and significant EBITDA contribution; our expectation that continued support of our customers, organic growth opportunities in our pipeline, and contributions from acquisitions like Green Remedies provide diversified revenue mix, ongoing revenue and gross profit growth, increased profitability through operating leverage, and attractive shareholder returns; and our belief that the financial measures contained in this press release facilitate operating performance comparisons from period to period. These statements are based on our current expectations, estimates, projections, beliefs, and assumptions. Such statements involve significant risks and uncertainties. You are cautioned not to place undue reliance on such statements and to consult our SEC filings for additional risks and uncertainties that may apply to our business and the ownership of our securities. Our forward-looking statements are presented as of the date made, and we disclaim any duty to update such statements unless required by law to do so.

Investor Relations Contact:

Three Part Advisors, LLC
Joe Noyons
817.778.8424


Quest Resource Holding Corporation and Subsidiaries

STATEMENTS OF OPERATIONS

(Unaudited)
(In thousands, except per share amounts)

    Three Months Ended


 		  Nine
Months Ended
    September
30,


 		    September
30,
  
    20
20


 		   2019
     2020


 		   201
9


 		 
Revenue   $ 23,701     $ 23,926     $ 71,002     $ 76,020  
Cost of revenue     19,144       19,154       57,527       61,956  
Gross profit     4,557       4,772       13,475       14,064  
Selling, general, and administrative     4,291       4,221       12,678       12,663  
Depreciation and amortization     150       330       818       982  
Total operating expenses     4,441       4,551       13,496       13,645  
Operating income (loss)     116       221       (21 )     419  
Other income     150       —       1,408       —  
Interest expense     (73 )      (119 )     (244 )     (344 )
Loss on extinguishment of debt     (168 )     —       (168 )     —  
Income before taxes     25       102       975       75  
Income tax expense     92       55       64       165  
Net income (loss)   $ (67 )    $ 47     $ 911     $ (90 )

Deemed dividend for warrant down round feature

     (205 )     

—

       (205 )     —  
Net income (loss) applicable to common stockholders   $ (272 )    $ 47     $ 706     $ (90 )
Net income (loss) per common share:                              
Basic   $ (0.02 )   $ 0.00     $ 0.04     $ (0.01 )
Diluted   $ (0.02 )   $ 0.00     $ 0.04     $ (0.01 )
                                     
Weighted average number of common shares outstanding:                                    
Basic     17,290       15,350       16,055        15,340  
Diluted     17,290       15,399       16,070        15,340  

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(Unaudited)
(In thousands)

    Three Months Ended    Nine Months Ended
  
    September
30,


 		     September 30, 
   
    20
20


 		     2019      2020
      2019
  
Net income (loss)   $ (67 )   $ 47     $ 911     $ (90 )
Depreciation and amortization     176       354       872       1,056  
Interest expense     73       119       244                       344  
Stock-based compensation expense     324       285       1,101       758  
Other adjustments     391       —       (528 )     248  
Income tax expense     92       55       64       165  
Adjusted EBITDA   $ 989     $ 860     $ 2,664     $ 2,481  

BALANCE SHEETS

(In thousands, except per share amounts)

    September
30, 		    December 31,
    2020     2019
     (Unaudited)        
ASSETS              
Current assets:              
Cash and cash equivalents   $ 6,427     $ 3,411  
Accounts receivable, less allowance for doubtful accounts of $873 and $767 as of September 30, 2020 and December 31, 2019, respectively     15,151       13,900  
Prepaid expenses and other current assets     1,343       1,110  
Total current assets     22,921       18,421  
               
Goodwill     58,208       58,208  
Intangible assets, net     915       1,591  
Property and equipment, net, and other assets     2,545       2,436  
Total assets   $ 84,589     $ 80,656  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY              
Current liabilities:              
Accounts payable and accrued liabilities   $ 13,011     $ 13,317  
Deferred revenue and other current liabilities     22       19  
Total current liabilities     13,033       13,336  
               
Revolving credit facility, net     4,163       4,535  
Other long-term liabilities     659       1,141  
Total liabilities     17,855       19,012  
               
Commitments and contingencies              
               
Stockholders’ equity:              
Preferred stock, $0.001 par value, 10,000 shares authorized, no shares issued or outstanding as of September 30, 2020 and December 31, 2019     —       —  
Common stock, $0.001 par value, 200,000 shares authorized, 18,381 and 15,373 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively     18       15  
Additional paid-in capital     165,239       160,858  
Accumulated deficit     (98,523 )     (99,229 )
Total stockholders’ equity     66,734       61,644  
Total liabilities and stockholders’ equity   $ 84,589     $ 80,656  



Posted on

Esports Entertainment Group Reports Fiscal First Quarter 2021 Financial Results

NEWARK, N.J., Nov. 16, 2020 (GLOBE NEWSWIRE) — Esports Entertainment Group, Inc. (NasdaqCM: GMBL, GMBLW) (or the “Company”), an esports and online gambling company, today announced its financial results for the fiscal first quarter ended September 30, 2020, as well as an update on several key business initiatives.

Business Highlights

  • Signed agreement to acquire Helix eSports and ggCircuit in deal valued at $43 Million
  • Acquired Argyll Entertainment and its SportNation brand, adding Tier 1 gambling license covering UK and Ireland; Malta gaming license secured in May 2020
  • Acquired assets of FLIP Sports, providing ownership and control of tech stack
  • Acquired Esports Gaming League, with a history of partnerships that include Microsoft, Red Bull Arsenal FC, and Activision; subsequent to acquisition EGL announced first-of-their kind deals with LA Kings, LA Galaxy, and Philadelphia Union to be official esports tournament provider
  • Partnered with Allied Esports as title sponsor of the VIE.gg CS:GO Legend Series tournament; the two-week competition drew 1.7 million unique viewers and generated 1 million hours watched, making it the most-watched Legend Series event since tournament was created in 2017
  • Expanded partnership with Dignitas, an esports asset of Harris Blitzer Sports and Entertainment, securing naming rights to famed CS:GO team; partnership includes strategic digital and physical activations in New Jersey marketplace as core focus
  • Partnered with Twin Rivers Gaming to launch VIE.gg wagering platform in New Jersey in calendar Q1 2021
  • Working with the New Jersey Gaming Commission to launch pilot skill-based player-to-player wagering platform, LANduel
  • Opened corporate office at Prudential Center in Newark, NJ

“We have achieved many significant milestones since uplisting to the NASDAQ in April,” commented Grant Johnson, CEO of Esports Entertainment Group. “The COVID-19 pandemic has absolutely accelerated the rapid growth of esports leading to mainstream broadcasts to national TV audiences on ESPN and Fox. These trends helped us set new record audience viewing stats with our partner Allied Esports for the globally recognized Legend Series, just one of many accomplishments during the quarter. We believe the successes achieved this year provide an extremely strong foundation for long-term growth while offering investors a true pure play opportunity in the burgeoning world of global esports.”

Johnson continued, “We have structured our business to deliver a diversified esports and online gambling company via three key business pillars and believe this multi-tiered approach provides investors broad exposure to two major trends, the rise of competitive gaming and the legalization of online gambling in the US.”

“As we look ahead, we believe the acquisitions we have made as well as those we plan to make, combined with a growing list of world-class partnerships, Esports Entertainment is in a great position to accelerate the monetization of our robust three pillar strategy,” concluded Johnson.

F1Q21
Financial Results

Revenue for the three months ended September 30, 2020 totaled $222,392, an increase of $222,392 over the $0 recorded for the three months ended September 30, 2019 (this includes only 2 months of contribution from Argyll because the deal closed on August 4th). The increase was primarily attributable to the acquisition of Argyll Entertainment as we are now revenue a generating company.

Post F1Q21, October has seen a significant uptick, with levels of turnover, Gross Gaming Revenue and Net Revenue returning to pre-COVID levels. Total handle was above $16 mil for the month of October and revenues for the month were above $600K.

Total operating expenses for the three months ended September 30, 2020 totaled $3.7 million, an increase from the $0.7m recorded for the three months ended September 30, 2019. The increase was primarily attributable to the increased payroll, stock compensation, marketing, legal and professional services fees related to increased business activity.

Total net loss for the three months ended September 30, 2020 was $1.8 million, driven principally by reduced revenues related to the measures taken post the regular UK Gambling Commission audit of Argyll Entertainment, partially offset by a change in fair market value of warrant liability of $2.1m.

As of September 30, 2020, the Company had total current assets of $10.4 million and total current liabilities of $8.2 million, resulting in working capital of $2.3 million. Cash and cash equivalents totaled $8.9 million and shareholders’ equity was $16.8 million at September 30, 2020.

Guidance

The Company reaffirms its guidance of $13 million in revenue in fiscal 2021 and $25 million in revenue in fiscal 2022 from its core Argyll and VIE platforms. On a proforma basis, including the acquisitions of Helix Esports and ggCircuit, the Company expects to report $42 million in revenue in fiscal 2022 with positive EBITDA of $2 million.

Fiscal First Quarter 2021
Conference Call

The Company will host a conference call today at 4:30 p.m. Eastern Time to discuss its F1Q21 financial results. Participants may join the conference call by dialing 1-855-327-6837 (U.S. Toll-Free) or 1-631-891-4304 (International). A live webcast of the conference call will also be available at http://public.viavid.com/index.php?id=142485.

For those unable to participate in the conference call, a telephonic replay of the call will also be available shortly after the completion of the call, until 11:59 pm ET on Monday, November 30, 2020, by dialing 1-844-512-2921 (United States) or 1-412-317-6671 (International) and entering the replay pin number: 10011948.

About
Esports Entertainment Group

Esports Entertainment Group, Inc. is a licensed online gambling company with a specific focus on esports wagering and 18+ gaming. Esports Entertainment offers fixed odds wagering, fantasy and pools on various esports events in a licensed, regulated and secure platform at vie.gg and owns and operates online sports book, SportNation.bet. In addition, Esports Entertainment intends to offer users from around the world the ability to participate in multiplayer mobile and PC video game tournaments for cash prizes. Esports Entertainment is led by a team of industry professionals and technical experts from the online gambling and the video game industries, and esports. The Company holds a license to conduct online gambling and 18+ gaming on a global basis in the UK, Ireland, Malta and Curacao. The Company maintains offices in New Jersey, the UK and Malta. For more information visit www.esportsentertainmentgroup.com.

Forward Looking Statements

The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

Contact:

U.S. Investor Relations

RedChip Companies, Inc.
Dave Gentry
407-491-4498
[email protected]

Media & Investor Relations Inquiries

[email protected]



Posted on

SBA Proposes Small Business Size Standard Revisions in Three Industrial Sectors; Change Targeted at Increasing Eligibility for Contracting and Loan Programs

Public Comments Due January 12

Washington, Nov. 16, 2020 (GLOBE NEWSWIRE) — The U.S. Small Business Administration is seeking public comments on a proposed rule that would revise the small business size standards for businesses in three North American Industrial Classification System (NAICS) sectors to increase small business eligibility for SBA’s loan and contracting programs. 

Comments may be submitted on this proposed rule on or before Jan. 12, 2021 at www.regulations.gov, using the following RIN number: RIN 3245-AG91. You may also comment by mail to Khem R. Sharma, Chief, Size Standards Division, 409 3rd Street SW, Mail Code 6530, Washington, D.C., 20416. 

The NAICS sectors reviewed in the proposed rule are: Professional, Scientific and Technical Services; Management of Companies and Enterprises; and Administrative and Support and Waste Management and Remediation Services.  SBA proposes to increase size standards for 46 industries in those sectors. The following table includes the number of industries reviewed and the number of industries with proposed increases in size standards by NAICS sector.

NAICS Sector Sector Name No. of Industries Reviewed No. of Industries with Increases
54 Professional, Scientific and Technical Services 48 27
55 Management of Companies and Enterprises 2 2
56 Administrative and Support and Waste Management and Remediation Services 44 17
Total   94 46

SBA estimates that about 2,600 additional firms in these three sectors will become eligible for SBA’s programs under the revised size standards, if adopted.

The proposed rule is part of a five-year comprehensive review of small business size standards, as required under the Small Business Jobs Act of 2010.  The proposed revisions reflect changes in the industry and federal marketplace conditions and SBA’s policy position under the current economic situation due to the COVID-19 pandemic.  In response to the pandemic, SBA is retaining current size standards where data suggests that size standards should be lowered.

As part of the ongoing review of all size standards, SBA considers the structural characteristics of individual industries, including average firm size, the degree of competition, and federal government contracting trends. This ensures that small business size standards reflect current economic conditions in those industries. The proposed revisions to the size standards in these sectors will enable more small businesses to retain their small business status, provide federal agencies a larger pool of small businesses to choose from for small business procurement opportunities, and help eligible small businesses benefit from SBA’s loan programs.

An SBA-issued White Paper entitled, “SBA’S Size Standards Methodology,” which explains how SBA establishes, reviews and modifies its receipts-based and employee-based small business size standards, can be viewed at http://www.sba.gov/size.

For more information about SBA’s revisions to its small business size standards, visit “announcements about updating size standards” at http://www.sba.gov/size.

### 

About the U.S. Small Business Administration

The U.S. Small Business Administration makes the American dream of business ownership a reality. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit https://www.sba.gov.



Tiffani Clements
United States Small Business Administration
[email protected]