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Cyteir Therapeutics Reports Second Quarter 2021 Financial Results and Provides Business Highlights

– IPO raised an aggregate of approximately $149.1 million in gross proceeds

– Strong cash position of $198.6 million to be used to deliver expected key value-creating milestones and fund operations through 2023

– Lead program, CYT-0851, advancing in Phase 1 dose escalation trial with Phase 2 expansion expected to begin by year-end

LEXINGTON, Mass.–(BUSINESS WIRE)–
Cyteir Therapeutics, Inc. (“Cyteir”) (Nasdaq: CYT), a company focused on the discovery and development of next-generation synthetically lethal therapies for cancer, today reported financial results for the second quarter ended June 30, 2021 and provided an update on recent business highlights.

“The successful completion of our IPO in June gives us the capital to advance our drug candidates through mid-stage clinical development and places us in a strong position to advance our lead drug CYT-0851 and develop our DNA damage response (DDR) platform. We continue to enroll patients through the dose escalation portion of the Phase 1/2 trial for CYT-0851 and we plan to begin the Phase 2 expansion trial by year-end,” said Markus Renschler, MD, President and Chief Executive Officer of Cyteir. “As we continue advancing our lead program and our DDR platform, we look forward to nominating new candidates in 2022 and beyond. I’d like to thank the entire Cyteir team for their dedication and excellent execution as we develop the next generation of synthetic lethal therapies to treat cancer.”

Second Quarter Business Review and Operational Updates

CYT-0851

• At the 2021 American Society of Clinical Oncology (ASCO) Annual Meeting, Ryan Lynch, MD of the Fred Hutchinson Cancer Center, presented an interim analysis of the Phase 1 portion of a first-in-human Phase 1/2 trial of CYT-0851. The presentation was given at an oral session at the conference.
• The Phase 1 dose escalation trial portion of the Phase 1/2 trial continues to enroll patients. The 600 mg once daily cohort was recently cleared for safety and the 800 mg once daily cohort is now open for enrollment. Initiation of the Phase 2 expansion trial and Phase 1 combinations with chemotherapy are both expected by year-end.

Pipeline

• Investigational New Drug (IND)-enabling studies with CYT-1853 are ongoing and an IND application is expected to be submitted in 2022. Cyteir is also advancing preclinical studies on additional targets to nominate the next target from the DDR platform.

Second Quarter Financial Results

Cash and cash equivalents: Cash and cash equivalents for the quarter ended June 30, 2021, were $198.6 million. The cash and cash equivalents total for the second quarter does not include the $15.9 million in gross proceeds raised from the exercise by the underwriters of the option to purchase additional shares of common stock.

Research and development (R&D) expenses: R&D expenses were $8.9 million for the second quarter of 2021 versus $3.6 million for the same period in 2020. The year-over-year increase in R&D spending in the comparative periods was due primarily to increased R&D and clinical activity and increased headcount.

General and administrative (G&A) expenses: G&A expenses were $2.4 million for the second quarter of 2021 compared to $0.9 million for the same period in 2020. The year-over-year increase in G&A expenses was primarily due to increased headcount.

Net loss: Net loss was $11.3 million, or $4.83 per share in the second quarter of 2021 compared to $4.5 million, or $3.18 per share in the second quarter of 2020.

About Cyteir Therapeutics, Inc.

Cyteir is a clinical-stage oncology company that is focused on the discovery and development of next-generation synthetically lethal therapies to treat cancer. The company is using its expertise in DNA damage response biology to advance a pipeline of novel drug candidates that selectively target key cancer vulnerabilities. Cyteir’s wholly owned lead compound, CYT-0851, is a potent and selective, oral investigational drug that was designed to inhibit RAD51-mediated homologous recombination and the repair of double-strand DNA breaks.

Forward-Looking Statements

This press release contains “forward-looking statements” regarding Cyteir’s results of operations and expected developments related to clinical trials. Forward-looking statements include statements identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects” and similar references to future periods. Forward-looking statements are based on our current expectations and assumptions regarding capital market conditions, our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: our limited operating history and that we have no products approved for commercial sale, which may make it difficult for you to evaluate our current business and predict our future success and viability; that we have incurred significant losses since inception and expect to incur losses for the foreseeable future and may never achieve or maintain profitability; our need substantial additional funding; that we have never successfully completed any clinical trials, and we may be unable to do so for any drug candidates we develop; that our clinical trials may fail to demonstrate adequately the safety and efficacy of any of our drug candidates, which would delay or prevent further clinical development of those candidates, or prevent marketing approval from FDA or similar regulatory authorities; our intention to develop CYT-0851, and potentially future drug candidates, for use in combination with other therapies, which exposes us to additional risks; if we are unable to successfully develop and commercialize companion diagnostic tests for our drug candidates, or experience significant delays in doing so, we may not realize the full commercial potential of our drug candidates; synthetic lethality represents an emerging class of precision medicine targets, and negative perceptions of the efficacy, safety or tolerability of this class of targets, including any that we develop, could adversely affect our ability to conduct our business, advance our drug candidates or obtain regulatory approvals; if we are unable to adequately protect and enforce our intellectual property or obtain and maintain patent protection for our technology and products or if the scope of the patent protection obtained is not sufficiently broad, our competitors or other third parties could develop and commercialize technology and products similar or identical to ours, and our ability to successfully develop and commercialize our technology and products may be impaired, the continuing outbreak of COVID-19 in the United States and other countries may adversely affect our business and the market price of our common stock; and other factors set forth under the heading “Risk Factors” in Cyteir’s final prospectus dated June 17, 2021 related to our initial public offering, which is available on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov. Additional information will be made available by our quarterly reports on Form 10-Q and other filings that we make from time to time with the SEC. Any forward-looking statement made in this press release speaks only as of the date on which it is made. The company does not undertake any obligation to update any such statement or to publicly announce the results of any revisions to any such statements to reflect future events or developments, except as required by law.

For further information, please reference the company’s reports and documents filed with the SEC. You may get these documents by visiting EDGAR on the SEC website at www.sec.gov.

CYTEIR THERAPEUTICS, INC
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited, in thousands, except share and per share amounts)
		Three Months Ended June 30,								Six Months Ended June 30,
			2021				2020				2021				2020
Operating expenses:
Research and development		$	8,886			$	3,633			$	14,499			$	8,634
General and administrative			2,422				875				4,146				1,884
Total operating expenses			11,308				4,508				18,645				10,518
Loss from operations			(11,308	)			(4,508	)			(18,645	)			(10,518	)
Other income (expense):
Other income (expense)			13				10				38				91
Total other income (expense)			13				10				38				91
Net loss		$	(11,295	)		$	(4,498	)		$	(18,607	)		$	(10,427	)
Net loss per share—basic and diluted		$	(4.83	)		$	(3.18	)		$	(8.29	)		$	(7.38	)
Weighted-average common stock outstanding—basic and diluted			2,337,947				1,414,009				2,245,243				1,413,554

CYTEIR THERAPEUTICS, INC
CONDENSED BALANCE SHEETS
(Unaudited, in thousands, except share and per share amounts)
		June 30, 2021				December 31, 2020
Assets
Current assets:
Cash and cash equivalents		$	198,637			$	10,938
Prepaid expenses and other current assets			1,668				1,193
Total current assets		$	200,305			$	12,131
Property and equipment, net			1,492				1,287
Other assets			256				317
Total assets		$	202,053			$	13,735
Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)
Current liabilities:
Accounts payable		$	3,512			$	1,689
Accrued expenses and other current liabilities			3,932				1,448
Total current liabilities		$	7,444			$	3,137
Deferred rent, net of current portion			334				452
Other long term liabilities			420				766
Total liabilities		$	8,198			$	4,355
Commitments and contingencies (Note 11)
Series A redeemable convertible preferred stock, 0 and 5,817,996 shares authorized, issued, and outstanding as of June 30, 2021 and December 31, 2020, respectively			—				5,696
Series B redeemable convertible preferred stock, 0 and 71,199,999 shares authorized as of June 30, 2021 and December 31, 2020, respectively; 0 and 55,200,000 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively			—				51,715
Series C redeemable convertible preferred stock, 0 shares authorized, issued, and outstanding as of June 30, 2021 and December 31, 2020, respectively			—				—
Stockholders’ equity (deficit):
Preferred stock, $0.001 par value: 40,000,000 and 77,017,995 shares authorized as of June 30, 2021 and December 31, 2020, respectively; no shares issued and outstanding as of June 30, 2021 and December 31, 2020			—				—
Common stock, $0.001 par value: 320,000,000 and 100,000,000 shares authorized as of June 30, 2021 and December 31, 2020, respectively; 34,474,323 and 2,719,721 shares issued as of June 30, 2021 and December 31, 2020, respectively; 34,104,882 and 2,044,284 shares outstanding as of June 30, 2021 and December 31, 2020, respectively			34				2
Additional paid-in capital			262,355				1,894
Accumulated deficit			(68,534	)			(49,927	)
Total stockholders’ equity (deficit)			193,855				(48,031	)
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)		$	202,053			$	13,735

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210809005745/en/

INVESTORS:

Lisa Hayes

Vice President, Investor Relations and Corporate Communications

908-868-8926

[email protected]

MEDIA:

Michele Parisi

925-429-1850

[email protected]

KEYWORDS: United States North America Massachusetts

INDUSTRY KEYWORDS: Science Health Oncology Research

MEDIA:

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Senseonics Holdings, Inc. Reports Second Quarter 2021 Financial Results

GERMANTOWN, Md.–(BUSINESS WIRE)–
Senseonics Holdings, Inc. (NYSE American: SENS), a medical technology company focused on the development and commercialization of long-term, implantable continuous glucose monitoring (CGM) systems for people with diabetes, today reported financial results for the quarter ended June 30, 2021.

Recent Highlights & Accomplishments:

• Generated second quarter 2021 revenue of $3.3 million.
• Ascensia Diabetes Care launched both a U.S. patient assistance program, reducing out-of-pocket costs to support all diabetes patients including the 200 million covered lives, and a direct-to-consumer digital advertising campaign, to raise patient awareness of Eversense and generate new patient leads.
• “The PROMISE Study: An Evaluation of the Safety and Accuracy of the Next Generation 180-Day Long-term Implantable Eversense CGM System” demonstrating sensor accuracy MARD of 8.5-9.1% was presented in June at the ATTD and ADA conferences along with the submission of the manuscript to a major diabetes journal.
• FDA active review continues for the Eversense® 180-day PMA supplement application.
• Raised $50 million in gross proceeds through completion of At-the-Market equity offering program. The use of proceeds is intended primarily for debt service.

“In the second quarter we made progress driving increased patient and provider awareness of Eversense through a targeted direct-to-consumer digital advertising campaign and presentations of the PROMISE Study, an evaluation of our 180-day sensor, at the ADA and ATTD conferences,” said Tim Goodnow, PhD, President and Chief Executive Officer of Senseonics. “As announced when we submitted this data to the FDA, we are pleased with the strength of the data from the PROMISE Study which we believe represents a top tier CGM safety and accuracy profile. Along with our commercial partner Ascensia Diabetes Care we are excited about the opportunity to offer more patients the longest lasting CGM systems.”

Second Quarter 2021 Results:

Total revenue for the quarter was $3.29 million compared to $0.26 million for the second quarter of 2020. U.S. revenue was $0.98 million and revenue outside the U.S. was $2.31 million.

Second quarter 2021 gross profit increased by $1.54 million year-over-year, to $0.39 million. The positive gross margin in the quarter was primarily due to the fulfillment of orders utilizing existing written off inventory as a result of the COVID-19 pandemic.

Second quarter 2021 sales and marketing expenses decreased by $1.50 million year-over-year, to $1.64 million. The decrease was primarily due to the strategic changes in our go-to-market strategy with the Ascensia global collaboration.

Second quarter 2021 research and development expenses increased by $3.31 million year-over-year, to $7.11 million. The increase was primarily driven by clinical study costs and primarily non-cash, stock-based compensation and other personnel related expenses.

Second quarter 2021 general and administrative expenses increased by $3.09 million year-over-year, to $7.53 million. The increase was primarily due to primarily non-cash, stock-based compensation and other personnel related costs.

Net loss was $180.32 million, or $0.42 per share, in the second quarter of 2021, compared to $7.52 million, or $0.03 per share, in the second quarter of 2020. Net loss increased by $172.81 million due to a $169.43 million increase in other expenses primarily related to non-cash accounting charges resulting from the accounting for embedded derivatives related to certain of the company financings, as well as a $3.36 million increase in loss from operations.

As of June 30, 2021, cash, cash equivalents, short and long-term investments were $215.0 million and outstanding indebtedness was $109.9 million.

2021 Financial Outlook

The company continues to expect that global net revenue to Senseonics for the full year 2021 will be in the range of $12.0 million to $15.0 million.

Conference Call and Webcast Information:

Company management will host a conference call at 4:30 pm (Eastern Time) today, August 9, 2021, to discuss these financial results and recent business developments. This conference call can be accessed live by telephone or through Senseonics’ website.

Live Teleconference Information: Dial in number: 888-317-6003 Entry Number: 4998185 International dial in: 412-317-6061

Live Webcast Information: Visit http://www.senseonics.com and select the “Investor Relations” section

A replay of the call can be accessed on Senseonics’ website http://www.senseonics.com under “Investor Relations.”

About Senseonics

Senseonics Holdings, Inc. is a medical technology company focused on the design, development and commercialization of transformational glucose monitoring products designed to help people with diabetes confidently live their lives with ease. Senseonics’ CGM systems, Eversense® and Eversense® XL, include a small sensor inserted completely under the skin that communicates with a smart transmitter worn over the sensor. The glucose data are automatically sent every 5 minutes to a mobile app on the user’s smartphone.

Forward Looking Statements

Any statements in this press release about future expectations, plans and prospects for Senseonics, including the revenue projections under “2021 Financial Outlook,” statements about the potential benefits of the Ascensia commercialization and collaboration agreement, including the ability of Ascensia to grow the market for Eversense, the future increase in patient and provider awareness of Eversense, reductions in patient costs and expansion of access to Eversense, and other statements containing the words “believe,” “expect,” “intend,” “may,” “projects,” “will,” “planned,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: uncertainties in the development and regulatory approval processes for the 180-day Eversense product, uncertainties inherent in the commercial launch and commercial expansion of the product, uncertainties inherent in the transition of commercialization responsibilities to Ascensia, uncertainties in insurer, regulatory and administrative processes and decisions, uncertainties in the duration and severity of the COVID-19 pandemic, and such other factors as are set forth in the risk factors detailed in Senseonics’ Annual Report on Form 10-K for the year ended December 31, 2020, Senseonics’ Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 and Senseonics’ other filings with the SEC under the heading “Risk Factors.” In addition, the forward-looking statements included in this press release represent Senseonics’ views as of the date hereof. Senseonics anticipates that subsequent events and developments will cause Senseonics’ views to change. However, while Senseonics may elect to update these forward-looking statements at some point in the future, Senseonics specifically disclaims any obligation to do so except as required by law. These forward-looking statements should not be relied upon as representing Senseonics’ views as of any date subsequent to the date hereof.

Senseonics Holdings, Inc. Consolidated Balance Sheets (in thousands, except for share and per share data)
		June 30,				December 31,
		2021				2020
			(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	69,754			$	18,005
Restricted cash			—				200
Short term investments, net			93,337				—
Accounts receivable, net			207				565
Accounts receivable – related parties			2,584				2,421
Inventory, net			8,816				5,281
Prepaid expenses and other current assets			4,533				3,774
Total current assets			179,231				30,246
Option			723				1,886
Deposits and other assets			1,861				2,229
Long term investments, net			51,919				—
Property and equipment, net			1,391				1,557
Total assets		$	235,125			$	35,918
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable		$	3,032			$	1,762
Accrued expenses and other current liabilities			11,225				11,674
Term Loans, net			5,763				3,202
Total current liabilities			20,020				16,638
Long-term debt and notes payables, net			54,664				57,216
Derivative liabilities			367,379				62,119
Option			104,653				39,734
Other liabilities			1,049				1,483
Total liabilities			547,765				177,190
Preferred stock and additional paid-in-capital, subject to possible redemption: $0.001 par value per share; 0 shares issued and outstanding as of June 30, 2021 and 3,000 shares issued and outstanding as of December 31, 2020			—				2,811
Total temporary equity			—				2,811
Commitments and contingencies
Stockholders’ deficit:
Common stock, $0.001 par value per share; 900,000,000 shares authorized; 445,124,690 and 265,582,688 shares issued and outstanding as of June 30, 2021 and December 31, 2020			445				266
Additional paid-in capital			765,262				504,162
Accumulated other comprehensive loss, net of tax			(16	)			—
Accumulated deficit			(1,078,331	)			(648,511	)
Total stockholders’ deficit			(312,640	)			(144,083	)
Total liabilities and stockholders’ deficit		$	235,125			$	35,918

Senseonics Holdings, Inc. Consolidated Statements of Operations and Comprehensive Loss (in thousands, except for share and per share data)
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2021				2020				2021				2020
Revenue, net		$	433			$	216			$	920			$	247
Revenue, net – related parties			2,856				45				5,215				50
Total revenue			3,289				261				6,135				297
Cost of sales			2,897				1,404				5,217				21,074
Gross profit (loss)			392				(1,143	)			918				(20,777	)
Expenses:
Sales and marketing expenses			1,644				3,142				3,257				14,287
Research and development expenses			7,107				3,796				12,362				11,159
General and administrative expenses			7,531				4,445				12,505				10,134
Operating loss			(15,890	)			(12,526	)			(27,206	)			(56,357	)
Other (expense) income, net:
Interest income			247				8				256				217
Loss on fair value adjustment of option			(35,730	)			—				(88,405	)			—
Gain (Loss) on extinguishment of debt and option			—				(6,385	)			330				(10,931	)
Interest expense			(4,034	)			(3,555	)			(8,092	)			(7,928	)
Gain (Loss) on change in fair value of derivatives			(124,361	)			15,238				(305,260	)			25,549
Impairment cost			(381	)			—				(1,163	)			—
Other expense			(157	)			(295	)			(280	)			(658	)
Total other (expense) income, net			(164,416	)			5,011				(402,614	)			6,249
Net loss			(180,306	)			(7,515	)			(429,820	)			(50,108	)
Other comprehensive loss, net of tax
Unrealized loss on marketable securities			(16	)			—				(16	)			—
Total other comprehensive loss, net of tax			(16	)			—				(16	)			—
Total comprehensive loss		$	(180,322	)		$	(7,515	)		$	(429,836	)		$	(50,108	)
Basic and diluted net loss per common share		$	(0.42	)		$	(0.03	)		$	(1.08	)		$	(0.24	)
Basic and diluted weighted-average shares outstanding			431,840,854				220,305,606				398,244,296				212,025,792

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210809005738/en/

Investor Contact

Lynn Lewis or Philip Taylor

Investor Relations

415-937-5406

[email protected]

Senseonics Media Contact:

Mirasol Panlilio

301-556-1631

KEYWORDS: United States North America Maryland

INDUSTRY KEYWORDS: Health Medical Devices Diabetes Technology Mobile/Wireless Software Biotechnology

MEDIA:

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Oak Street Health Reports Second Quarter 2021 Financial Results

CHICAGO–(BUSINESS WIRE)–
Oak Street Health, Inc. (NYSE: OSH, or the “Company”), a network of value-based primary care centers for adults on Medicare, today reported financial results for its quarter ended June 30, 2021.

“We were pleased with another quarter of strong growth in light of continued uncertainty navigating the COVID-19 pandemic. We remain committed to our patients and communities, as we have throughout the pandemic, and are particularly proud of the more than 180,000 vaccine doses we have administered this year to predominantly older adults in underserved communities,” said Mike Pykosz, Chief Executive Officer of Oak Street Health. “In the second quarter, we generated at-risk patient growth of 54% and total revenue growth of 65% and continued our national expansion, opening 9 new centers in four new markets. On August 5^th, we opened our 100th center compared to just 54 when the pandemic began in March 2020. We did encounter medical cost headwinds during the quarter related to COVID-19 hospitalizations, a significant increase in non-acute utilization, and historically high medical costs for new patients, resulting in an Adjusted EBITDA loss of $53.5 million compared to the low end of our prior guidance of $40.0 million. However, based on the strong performance across the majority of the drivers of business performance, our belief that the increase in medical costs will be temporary, and the expectation that we will receive an increase in per patient revenue in 2022 based on the increasing disease burden of our patient population, we are confident in the economics of our business in 2022 and beyond. Because of this confidence, we are increasing our new center guidance from 38-42 to 46-48 new centers for full year 2021.”

Tim Cook, Chief Financial Officer of Oak Street Health added, “We recognized revenue and incurred medical claims expense of approximately $14.5 million and $19.0 million, respectively, in the second quarter related to prior periods. In light of our strong growth, we are increasing our revenue guidance for the full year to $1.37 billion to $1.40 billion, representing an increase of 5% at the midpoint compared to our prior full year guidance, but we are increasing our Adjusted EBITDA loss for the year to a range of $240 million to $220 million given the medical cost trends we experienced in the first half of the year and the assumed continuation of those costs for the remainder of the year as well as the increase in the number of new centers in the second half of 2021.”

Second Quarter 2021 Financial Highlights

• Total revenue was $353.1 million, up 65% year over year
• Capitated revenue totaled $346.7 million, up 67% year over year
• The Company cared for approximately 88,500 risk-based patients, representing approximately 73% of its total patients
• Net loss was ($100.3) ¹ million, compared to ($26.8) million in the second quarter of 2020
• Adjusted EBITDA² was ($53.5) million, compared to ($17.5) million in the second quarter of 2020
• As of June 30, 2021, the Company operated 95 centers, compared to 54 centers as of June 30, 2020

__________________

(1)	Includes stock based and unit based compensation of $40.9 million and $4.2 million as of the second quarter of 2021 and 2020, respectively. The majority of the increase is due to the modification of vesting terms related to the equity converted as part of the IPO and not incremental grants of equity.
(2)	Adjusted EBITDA is a non GAAP financial measure that is presented as supplemental disclosure and is reconciled to net loss as the most directly comparable GAAP measure as set forth in the accompanying “Adjusted EBITDA Reconciliation” section. We define Adjusted EBITDA as net loss, excluding other income (expense), taxes, depreciation and amortization, stock based and unit based compensation and transaction/ offering related costs.

Outlook for Third Quarter and Fiscal Year 2021

	Three Months Ending				Twelve Months Ending
	September 30, 2021				December 31, 2021
	Low		High		Low		High
	(dollars in millions)
Centers	109		110		125		127
At risk patients	98,500		100,000		109,000		113,000
Revenue	$355		$360		$1,370		$1,400
Adjusted EBITDA	($70)		($65)		($240)		($220)

We have not reconciled guidance for Adjusted EBITDA to net loss, the most directly comparable GAAP measure, and have not provided forward-looking guidance for net loss, because of the uncertainty around certain items that may impact net loss, including stock- based and unit-based compensation, that are not within our control or cannot be reasonably predicted. However, for fiscal year 2021, depreciation and amortization is expected to be $15.0 million.

Webcast and Conference Call

The Company will conduct a conference call Tuesday, August 10, 2021 at 8:00 AM Eastern Time to discuss these results and management’s outlook for future financial and operational performance. The conference call can be accessed by webcast or by dialing (833) 529-0224 for U.S. participants, or +1 (236) 389-2153 for international participants, and referencing participant code 6484589. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call at https://investors.oakstreethealth.com.

About Oak Street Health

Founded in 2012, Oak Street Health is a network of value-based primary care centers for adults on Medicare. With a mission of rebuilding healthcare as it should be, the company operates an innovative healthcare model focused on quality of care over volume of services and assumes the full financial risk of its patients. Oak Street Health currently operates 100 centers across 15 states. To learn more about Oak Street Health’s proven approach to care, visit oakstreethealth.com.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding our future growth and our financial outlook for the third quarter and fiscal year 2021. Forward-looking statements are subject to risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance.

Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) changes in laws and regulations applicable to our business model; (ii) changes in market or industry conditions, regulatory environment and receptivity to our technology and services; (iii) results of litigation or a security incident; (iv) the loss of one or more key customers or partners; (v) the impact of COVID-19 on our business and results of operation; and (vi) changes to our abilities to recruit and retain qualified team members. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to the final Registration Statement filed with the SEC on August 5, 2020 and the Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 10, 2021. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update or revise this information unless required by law.

 

Condensed Consolidated Balance Sheets
(in millions, unaudited)
		As of June 30, 2021 (unaudited)			As of December 31, 2020
Assets
Current assets:
Cash	$	409.9		$	409.3
Restricted cash		15.9			10.4
Other patient receivables, net		0.5			7.6
Capitated accounts receivable		383.7			248.9
Marketable debt securities		669.2			–
Prepaid expenses		3.7			6.8
Other current assets		7.3			4.2
Total current assets		1,490.2			687.2
Long-term assets:
Property and equipment, net		91.8			78.8
Security deposits		1.5			1.3
Operating lease right-of-use assets		127.4			–
Goodwill		11.4			9.6
Intangible assets, net		2.8			3.0
Other long-term assets		0.9			1.1
Total assets	$	1,726.0		$	781.0
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	15.2		$	8.8
Accrued compensation and benefits		39.9			32.0
Liability for unpaid claims		357.4			262.1
Other liabilities		25.5			12.6
Total current liabilities		438.0			315.5
Long-term liabilities:
Long-term operating lease liabilities		135.4			–
Deferred rent expense		–			13.5
Other long-term liabilities		32.6			28.8
Long-term debt, net of current portion		899.2			–
Total liabilities		1,505.2			357.8
Stockholders’ equity:
Common stock		0.2			0.2
Additional paid-in capital		935.0			971.8
Accumulated other comprehensive income		(0.3)			–
Accumulated deficit		(717.2)			(555.8)
Total stockholders’ equity allocated to the Company		217.7			416.2
Noncontrolling interests		3.1			7.0
Total stockholders’ equity		220.8			423.2
Total liabilities and stockholders’ equity	$	1,726.0		$	781.0

 

Condensed Consolidated Statements of Operations
(Unaudited)
(in millions, except per share data)
		Three-Months Ended								Six-Months Ended
		June 30, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Revenues:
Capitated revenue	$		346.7		$		208.0		$		637.9		$		404.6
Other patient service revenue			6.4				6.4				11.9				11.6
Total revenues			353.1				214.4				649.8				416.2
Operating expenses:
Medical claims expense			281.4				155.4				481.1				287.7
Cost of care, excluding depreciation and amortization			67.0				39.5				127.3				83.3
Sales and marketing			25.9				10.1				50.0				22.0
Corporate, general and administrative expenses			74.2				31.1				147.3				55.4
Depreciation and amortization			3.9				2.7				7.2				5.2
Total operating expenses			452.4				238.8				812.9				453.6
Loss from operations			(99.3	)			(24.4	)			(163.1	)			(37.4	)
Other (expense)/income:
Interest expense, net			(1.0	)			(2.4	)			(1.2	)			(4.9	)
Other			–				–				–				0.1
Total other (expense)			(1.0	)			(2.4	)			(1.2	)			(4.8	)
Net loss			(100.3	)			(26.8	)			(164.3	)			(42.2	)
Net loss attributable to non-controlling interests			2.3				0.1				2.9				0.4
Net loss attributable to Oak Street Health, Inc.	$		(98.0	)	$		(26.7	)	$		(161.4	)	$		(41.8	)
Undeclared and deemed dividends	$		–		$		(12.2	)	$		–		$		(21.8	)
Net loss attributable to common stock/unitholders			(98.0	)			(38.9	)			(161.4	)			(63.6	)
Weighted average common stock outstanding – basic and diluted1			221,168,630			N/A					221,595,670			N/A
Net loss per share – basic and diluted	$		(0.44	)		N/A			$		(0.73	)		N/A

 

Condensed Consolidated Statements of Cash Flows
(in millions, unaudited)
		Six-Months Ended
		June 30, 2021				June 30, 2020
Cash flows from operating activities:
Net loss	$		(164.3	)	$		(42.2	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of discount on debt and related issuance costs			1.3				0.8
Accretion of discounts and amortization of premiums on short-term marketable securities, net			0.4				–
Depreciation and amortization			7.2				5.2
Non-cash operating lease costs			7.3				–
Stock and unit-based compensation, net of forfeitures			83.2				5.2
Change in fair value of bifurcated derivative			–				0.3
Change in fair value of marketable debt securities			–				–
Change in operating assets and liabilities, net of impact of acquisitions:
Accounts receivable			(127.7	)			(75.9	)
Prepaid expenses and other current assets			(0.9	)			1.9
Security deposits and other long-term assets			–				0.1
Accounts payable			4.3				(6.9	)
Accrued compensation and benefits			7.9				(6.0	)
Liability for unpaid claims			95.4				65.2
Operating lease liabilities			(6.6	)			–
Other current liabilities			1.6				6.1
Other long-term liabilities			8.9				2.9
Other			–				0.1
Net cash used in operating activities			(82.0	)			(43.2	)
Cash flows from investing activities:
Proceeds from sales of marketable debt securities			2.2				–
Purchases of marketable debt securities			(672.0	)			–
Purchase of business			(1.0	)			–
Purchases of property and equipment			(18.0	)			(8.0	)
Net cash used in investing activities			(688.8	)			(8.0	)
Cash flows from financing activities:
Proceeds from borrowings on convertible senior notes, net			897.9				–
Purchase of capped calls			(123.6	)			–
Proceeds from issuance of redeemable investor units			–				224.4
Capital contributions from non-controlling interests			0.1				–
Capital distributions to non-controlling interests			(1.1	)			–
Tender Offer – common units			–				(19.4	)
Proceeds from exercise of options			3.6				–
Net cash provided by financing activities			776.9				205.0
Net change in cash, cash equivalents and restricted cash			6.1				153.8
Cash, cash equivalents and restricted cash, beginning of period			419.7				42.2
Cash, cash equivalents and restricted cash, end of period	$		425.8		$		196.0

Non-GAAP Financial Measures

Certain of these financial measures are considered “non-GAAP” financial measures within the meaning of Item 10 of Regulation S-K promulgated by the SEC. We believe that non-GAAP financial measures provide an additional way of viewing aspects of our operations that, when viewed with the GAAP results, provide a more complete understanding of our results of operations and the factors and trends affecting our business. These non-GAAP financial measures are also used by our management to evaluate financial results and to plan and forecast future periods. However, non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Non-GAAP financial measures used by us may differ from the non-GAAP measures used by other companies, including our competitors. To supplement our consolidated financial statements presented on a GAAP basis, we disclose the following Non-GAAP measures: patient contribution, platform contribution and Adjusted EBITDA as these are performance measures that our management uses to assess our operating performance. Because patient contribution, platform contribution and Adjusted EBITDA facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes and in evaluating acquisition opportunities.

Patient Contribution Reconciliation

Patient Contribution is a non-GAAP financial measure that we define as capitated revenue less medical claims expense. The following is a reconciliation of our loss from operations, the most directly comparable GAAP financial measure, to Patient Contribution, for the three and six months ended June 30, 2021 and 2020.

		For the Three-Months Ended								For the Six-Months Ended
(dollars in millions)		June 30, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Loss from operations	$		(99.3	)	$		(24.4	)	$		(163.1	)	$		(37.4	)
Other patient service revenue			(6.4	)			(6.4	)			(11.9	)			(11.6	)
Cost of care, excluding depreciation and amortization			67.0				39.5				127.3				83.3
Sales and marketing			25.9				10.1				50.0				22.0
Corporate, general and administrative expenses			74.2				31.1				147.3				55.4
Depreciation and amortization			3.9				2.7				7.2				5.2
Patient contribution	$		65.3		$		52.6		$		156.8		$		116.9

Platform Contribution Reconciliation

Platform Contribution is a non-GAAP financial measure that we define as total revenues less the sum of medical claims expense and cost of care, excluding depreciation and amortization. The following is a reconciliation of our loss from operations, the most directly comparable GAAP financial measure, to Platform Contribution, for the three and six months ended June 30, 2021 and 2020.

		For the Three-Months Ended								For the Six-Months Ended
(dollars in millions)		June 30, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Loss from operations	$		(99.3	)	$		(24.4	)	$		(163.1	)	$		(37.4	)
Depreciation and amortization			3.9				2.7				7.2				5.2
Corporate, general and administrative			74.2				31.1				147.3				55.4
Sales and marketing			25.9				10.1				50.0				22.0
Platform contribution	$		4.7		$		19.5		$		41.4		$		45.2

Adjusted EBITDA Reconciliation

Adjusted EBITDA is a non-GAAP financial measure that we calculate as net loss adjusted to exclude (i) stock and unit-based compensation expense, (ii) depreciation and amortization, (iii) other income, net and (iv) transaction and offering costs. Our management team uses Adjusted EBITDA as a performance measure in order to assess our operating performance. Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes and in evaluating acquisition opportunities. The following is a reconciliation of our net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA, for the three and six months ended June 30, 2021 and 2020.

		For the Three- Months Ended								For the Six-Months Ended
(dollars in millions)		June 30, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Net loss	$		(100.3	)	$		(26.8	)	$		(164.3	)	$		(42.2	)
Interest expense and other income			1.0				2.4				1.2				4.8
Depreciation and amortization			3.9				2.7				7.2				5.2
Stock and unit-based compensation			40.9				4.2				83.2				6.0
Transaction/offering related costs			1.0				–				1.8				–
Adjusted EBITDA	$		(53.5)		$		(17.5)		$		(70.9)		$		(26.2)

---

1. Basic and diluted earnings per share of common stock is applicable only for periods after the Company’s IPO that was completed on August 10, 2020.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210809005734/en/

Media:

Erica Frank

Vice President of Public Relations

(330) 990-5026

[email protected]

Investors:

Kevin Ellich

(443) 450-4186

[email protected]

KEYWORDS: United States North America Illinois

INDUSTRY KEYWORDS: Managed Care Hospitals Health Other Health

MEDIA:

Posted on August 9, 2021 6:50 pm

HireQuest Reports Financial Results for the Second Quarter 2021

HireQuest Reports Financial Results for the Second Quarter 2021

Q2 2021 EPS of $0.20 per Diluted Share, Net Income of $2.7 million, and Adjusted EBITDA of $4.4 million

GOOSE CREEK, S.C.–(BUSINESS WIRE)–
HireQuest, Inc. (Nasdaq: HQI), a national franchisor of on-demand, temporary, and commercial staffing services, today reported financial results for the second quarter ended June 30, 2021.

Second Quarter 2021 Summary

• Franchise royalties of $5.5 million compared to $2.6 million in the prior year period, an increase of 106.5%. The branches acquired from LINK and Snelling in the first quarter of 2021 comprised approximately $1.7 million of the revenue.
• Services revenue, including interest paid on aging accounts receivable, of $256,000 compared to $262,000 in the prior year period, a decrease of 2.3%.
• Total revenue of $5.7 million compared to $2.9 million in the prior year period, an increase of 96.7%.
• Net Income, inclusive of miscellaneous income and acquisition-related expenses was $2.7 million, or $0.20 per diluted share, compared to net income of $1.2 million, or $0.09 per share last year.
• Adjusted EBITDA of $4.4 million compared to $1.8 million in the prior year period.
• HireQuest launched DriverQuest, a franchise offering focused on providing staffing services to the transportation and logistics industries. DriverQuest is a natural extension to the company’s existing on-demand and commercial staffing offerings providing another avenue of growth for existing and new franchisees. To date over 35 existing franchisees have adopted the offering.
• HireQuest closed a $63.2 million credit facility comprised of a $60.0 million Revolving Credit Facility and a $3.2 million Term Loan with its existing lender, Truist (formerly BB&T). The new facility replaced the Company’s prior $30 million revolving credit facility.

Subsequent to Quarter End

• Board of Directors declared a quarterly cash dividend of $0.06 per share of common stock to be paid on September 15, 2021 to shareholders of record as of September 1, 2021.

System-wide sales (a key performance indicator) for the second quarter of 2021 were $88.7 million compared to $44.1 million for the same period in 2020. The increase was due to recovering organic sales from our HireQuest Direct and HireQuest franchisees as well as new sales from the acquired Snelling and Link franchisees. Organic system-wide sales, excluding the acquired Snelling and Link locations, increased 29.5% in the period over the comparable period in 2020.

“Our results this past quarter begin to demonstrate the magnitude of the operating leverage our franchisor structure can generate,” commented Rick Hermanns, HireQuest’s President and Chief Executive Officer. “This is the result of a combination of rebounding performance by our HireQuest Direct and HireQuest franchisees and the addition of our new Snelling and Link franchisees. Our franchisees have done a tremendous job adapting and executing in an incredibly difficult economic environment over the past 12 to 18 months, but they still have a little room to reach their Q2 2019, pre-pandemic, levels. As the economy around the country continues to strengthen with state and local governments easing and ending pandemic-related restrictions and subsidies, our franchisees should benefit.”

“Despite the challenges of the last year our existing franchisees have opened 9 new offices so far in 2021 in addition to the locations acquired as part of the Snelling and Link transactions,” added Mr. Hermanns. “We continue to see opportunities to expand our service offerings as demonstrated by our recently announced launch of DriverQuest, a transportation industry focused staffing offering. Over 35 franchisees have adopted the DriverQuest offering, and we are all excited about the opportunities it opens up for them to service a new, in-demand, industry vertical, significantly expanding our addressable market, especially as businesses seek to accelerate efforts with minimal up-front costs. Strategic expansion beyond our historical core in on-demand and traditional staffing is a key component of HireQuest’s long-term growth strategy. DriverQuest fits nicely into that.”

Second Quarter 2021 Financial Results

The company’s total revenue is calculated by aggregating its revenue derived from franchise royalties and service revenue. Franchise royalties are the royalties earned from franchisees primarily on the basis of their sales to their customers. Service revenue consists of interest charged to franchisees on overdue accounts, license fees and other fees for optional services we provide our franchisees.

Franchise royalties in the second quarter of 2021 were $5.5 million compared to $2.6 million in the year-ago quarter. Organically, excluding the contribution from recently acquired Snelling and LINK branches, franchise royalties increased 40.4%. Service revenue was $256,000 compared to $262,000 in the prior-year quarter, a decrease of 2.3%. Total revenue in the second quarter of 2021 was $5.7 million compared to $2.9 million in the year-ago quarter, an increase of 96.7%.

Selling, general and administrative (“SG&A”) expenses in the second quarter of 2021 were $2.0 million compared to $1.9 million for the second quarter last year. The second quarter of 2021 includes a total of $168,000 in non-recurring fees and expenses related to recent acquisitions.

Net Income in the second quarter of 2021 was $2.7 million, or $0.20 per diluted share, compared to net income of $1.2 million, or $0.09 per diluted share, in the second quarter last year.

Adjusted EBITDA in the second quarter of 2021 was $4.4 million compared to $1.2 million in the second quarter last year.

Balance Sheet and Capital Structure

Cash was $2.2 million as of June 30, 2021, compared to $13.7 million as of December 31, 2020. The decrease reflects the purchase price for Link and Snelling and the subsequent increase in working capital.

Total assets were $69.7 million as of June 30, 2021. Total liabilities were $27.8 million.

On June 15, 2021, the company paid a quarterly cash dividend of $0.06 per share of common stock to shareholders of record as of June 1, 2021. The company intends to pay a $0.06 cash dividend on a quarterly basis, based on its business results and financial position.

Conference Call

HireQuest will hold a conference call to discuss its financial results.

Date:		Monday, August 9, 2021
Time:		4:30 p.m. Eastern time
Toll-free dial-in number:		1-844-602-0380
International dial-in number:		1-862-298-0970

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.

The conference call will be broadcast live and available for replay at https://www.webcaster4.com/Webcast/Page/2359/42421 and via the investor relations section of HireQuest’s website at www.hirequest.com.

A replay of the conference call will be available through August 23, 2021.

Toll Free:		877-481-4010
International:		919-882-2331
Replay Passcode:		42421

About HireQuest

HireQuest, Inc. is a nationwide franchisor that provides on-demand labor and commercial staffing solutions in the light industrial, blue-collar, and commercial segments of the staffing industry for HireQuest Direct, HireQuest, Snelling, and LINK franchised offices across the United States. Through its national network of over 200 franchisee-owned offices in more than 35 states and the District of Columbia, HireQuest provides employment for approximately 60,000 individuals annually that work for thousands of customers in numerous industries including construction, light industrial, manufacturing, hospitality, clerical, medical, travel, and event services. For more information, visit www.hirequest.com.

Important Cautions Regarding Forward-Looking Statements

This news release includes, and the company’s officers and other representatives may sometimes make or provide certain estimates and other forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act, including, among others, statements with respect to future economic conditions, future revenue or sales and the growth thereof; operating results; anticipated benefits of the acquisition of Snelling and/or LINK, or the status of integration of those entities. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and similar references to future periods.

While the company believes these statements are accurate, forward-looking statements are not historical facts and are inherently uncertain. They are based only on the company’s current beliefs, expectations, and assumptions regarding the future of its business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. The company cannot assure you that these expectations will occur, and its actual results may be significantly different. Therefore, you should not place undue reliance on these forward-looking statements. Important factors that may cause actual results to differ materially from those contemplated in any forward-looking statements made by the company include the following: the level of demand and financial performance of the temporary staffing industry; the financial performance of the company’s franchisees; changes in customer demand; the effects of any global pandemic including the impact of COVID-19; the relative success or failure of acquisitions and new franchised offerings; the extent to which the company is successful in gaining new long-term relationships with customers or retaining existing ones, and the level of service failures that could lead customers to use competitors’ services; significant investigative or legal proceedings including, without limitation, those brought about by the existing regulatory environment or changes in the regulations governing the temporary staffing industry and those arising from the action or inaction of the company’s franchisees and temporary employees; strategic actions, including acquisitions and dispositions and the company’s success in integrating acquired businesses including, without limitation, successful integration following the acquisitions of Snelling and LINK; disruptions to the company’s technology network including computer systems and software; natural events such as severe weather, fires, floods, and earthquakes, or man-made or other disruptions of the company’s operating systems; and the factors discussed in the “Risk Factors” section and elsewhere in the company’s most recent Annual Report on Form 10-K.

Any forward-looking statement made by the company or its management in this news release is based only on information currently available to the company and speaks only as of the date on which it is made. The company and its management disclaim any obligation to update or revise any forward-looking statement, whether written or oral, that may be made from time to time, based on the occurrence of future events, the receipt of new information, or otherwise, except as required by law.

HireQuest, Inc.
Consolidated Balance Sheets
	June 30, 2021				December 31, 2020
	(unaudited)
ASSETS
Current assets
Cash	$	2,204,648			$	13,667,434
Accounts receivable, net of allowance for doubtful accounts		35,055,831				21,344,499
Notes receivable		1,519,939				2,178,299
Prepaid expenses, deposits, and other assets		952,620				344,091
Prepaid workers’ compensation		1,417,098				1,434,583
Total current assets		41,150,136				38,968,906
Property and equipment, net		3,837,037				3,193,379
Workers compensation claim payment deposit		935,215				623,452
Deferred tax asset		–				79,379
Franchise agreements, net		19,511,471				–
Other intangible assets, net		667,948				342,697
Other assets		381,807
Notes receivable, net of current portion and reserve		3,235,465				5,887,229
Total assets	$	69,719,079			$	49,095,042
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	1,393,011			$	457,490
Term note payable		97,809				–
Other current liabilities		748,303				1,322,764
Accrued benefits and payroll taxes		3,720,775				743,431
Due to affiliates		89,584				67,398
Due to franchisees		5,396,470				3,228,777
Risk management incentive program liability		1,551,437				858,482
Workers’ compensation claims liability		6,663,971				2,777,734
Total current liabilities		19,661,360				9,456,076
Workers’ compensation claims liability, net of current portion		2,220,373				1,806,334
Deferred tax liability		954,600				–
Term note payable, net of current portion		3,055,691				–
Franchisee deposits		1,928,918				1,468,359
Total liabilities		27,820,942				12,730,769
Commitments and contingencies (Note 8)
Stockholders’ equity
Preferred stock – $0.001 par value, 1,000,000 shares authorized; none issued		–				–
Common stock – $0.001 par value, 30,000,000 shares authorized; 13,673,166 and 13,628,675 shares issued, respectively		13,673				13,629
Additional paid-in capital		29,380,206				28,811,389
Treasury stock, at cost – 33,092 shares		(146,465	)			(146,465	)
Retained earnings		12,650,723				7,685,720
Total stockholders’ equity		41,898,137				36,364,273
Total liabilities and stockholders’ equity	$	69,719,079			$	49,095,042

HireQuest, Inc.
Consolidated Statements of Income
(unaudited)
	Three months ended
	June 30, 2021				June 30, 2020
Franchise royalties	$	5,450,506			$	2,639,287
Service revenue		255,822				261,703
Total revenue		5,706,328				2,900,990
Selling, general and administrative expenses		2,040,621				1,931,076
Depreciation and amortization		365,995				32,402
Income from operations		3,299,712				937,512
Other miscellaneous income		126,300				288,837
Interest and other financing expense		(20,317	)			(17,850	)
Net income before income taxes		3,405,695				1,208,499
Provision for income taxes		685,884				51,497
Net income	$	2,719,811			$	1,157,002
Earnings per share
Basic	$	0.20			$	0.09
Diluted	$	0.20			$	0.09
Weighted average shares outstanding
Basic		13,611,207				13,547,950
Diluted		13,863,924				13,549,727

HireQuest, Inc.
Reconciliation of Net Income to Adjusted EBITDA
(unaudited)
	Three months ended
	June 30, 2021			June 30, 2020
Net income	$	2,719,811		$	1,157,001
Interest expense		20,317			17,850
Provision for income taxes		685,884			51,497
Depreciation and amortization		365,995			32,402
Non-cash compensation		300,781			242,362
WOTC related costs		146,345			103,096
Non-recurring acquisition related charges, net		167,844			–
Non-recurring charge to notes receivable		–			151,333
Adjusted EBITDA	$	4,406,977		$	1,755,541

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210809005733/en/

Company Contact:

HireQuest, Inc.

Cory Smith, CFO

(800) 835-6755

Email: [email protected]

Investor Relations Contact:

Hayden IR

Brett Maas

(646) 536-7331

Email: [email protected]

KEYWORDS: United States North America South Carolina

INDUSTRY KEYWORDS: Other Professional Services Professional Services Human Resources

MEDIA:

Posted on August 9, 2021 6:50 pm

Fulgent Genetics Reports Second Quarter Financial Results

Fulgent Genetics Reports Second Quarter Financial Results

• Revenue grows 790% year over year to $153.6 million
• Core Revenue grows 296% year over year to $25.7 million
• Announces acquisition of CSI Laboratories
• Announces commercial agreement with Helio Health through strategic investment
• Announces incremental controlling investment in Chinese Joint Venture entity, FF Gene Biotech

TEMPLE CITY, Calif.–(BUSINESS WIRE)–
Fulgent Genetics, Inc. (NASDAQ: FLGT) (“Fulgent” or the “company”), a technology-based genetic testing company focused on transforming patient care in oncology, infectious and rare diseases, and reproductive health, today announced financial results for its second quarter ended June 30, 2021.

Second Quarter 2021 Results:

• Revenue of $153.6 million, growing 790% year-over-year
• Billable tests delivered approximately 1.6 million, or 9 times the volume of second quarter of 2020
• Gross Margin improved approximately 21 percentage points year-over-year
• Core Revenue¹ grew 296% year-over-year to $25.7 million
• GAAP income of $79.8 million, or $2.59 per share
• Non-GAAP income of $78.7 million, or $2.55 per share
• Adjusted EBITDA of $105.0 million
• Cash from operations of $76.1 million; Cash and investments of $777.0 million as of June 30, 2021

⁽¹⁾ Core Revenue was previously defined as “NGS revenue”

Non-GAAP income (loss) and adjusted EBITDA are described below under “Note Regarding Non-GAAP Financial Measures” and are reconciled to the most directly comparable GAAP financial measure, GAAP income (loss), in the accompanying tables.

Ming Hsieh, Chairman and Chief Executive Officer, said, “The exciting announcements we have made today demonstrate our ability to execute on our strategic initiatives to expand our platform capabilities and reach in a post pandemic world. With the acquisition of CSI Laboratories and commercial agreement with Helio Health, we believe we are now well positioned to grow our presence in the molecular diagnostics and oncologic testing markets. In addition, through the incremental controlling investment in FF Gene Biotech in China we seek to further solidify our foothold in one of the fastest growing genetic testing markets in the world. While we are early in the process of integrating and ramping these investments, we are very excited to be able to offer an expanded menu of genomic testing solutions to our customers with the same precision, service and efficiency that Fulgent is known for. We believe the future is extremely bright for Fulgent as we build out additional ways to capitalize on the growing market for genetic testing across oncology, infectious and rare diseases, and reproductive health.”

Paul Kim, Chief Financial Officer, said, “We demonstrated strong growth in the second quarter with accelerating momentum in our Core NGS business, which grew 296% year over year. Although we fully anticipated a widespread slowdown in RT-PCR testing for COVID-19, vaccine administration materially decreased demand for testing in the second quarter faster than we expected. While we view rapid vaccine administration as a net positive for our country’s health and path to recovery, we are closely monitoring the proliferation of the delta variant and expect that ongoing testing will be an important part of fighting this surge. At the same time, we remain focused on opportunities beyond COVID testing as we leverage our strong cash position to make strategic investments in areas that enhance our core genomic testing capabilities, demonstrated this quarter by our acquisition of CSI Laboratories and investment in Helio Health. In addition, we believe the incremental investment in FF Gene Biotech strengthens our direct access to the Chinese genetic testing market, which will be additive to our revenue growth in the second half of the year. We are excited about the opportunities ahead and will be providing a formal update during our investment community conference call to shortly follow the issuance of this press release.”

Outlook:

For the third quarter of 2021, Fulgent expects:

• Total Revenue in the range of $125 to $150 million, representing growth of 35% year over year at the midpoint
• Core Revenue¹ of approximately $32 million, representing growth of 213% year over year

For the full year 2021, Fulgent expects:

• Total Revenue of approximately $800 million, representing growth of 90% year over year
• Core Revenue¹ of approximately $110 million versus previous guidance of $100 million, representing growth of 201% year over year
• GAAP income of approximately $12.00 per share
• Non-GAAP income of approximately $12.50 per share

⁽¹⁾ Core Revenue was previously defined as “NGS revenue”

Incremental Investment in Chinese Joint Venture entity, FF Gene Biotech

Fulgent Genetics also announces that it has made an incremental controlling investment in FF Gene Biotech, the Chinese entity formed in 2017 through a Joint Venture (“JV”) between Fulgent Genetics, Xi Long Scientific and Fuzhou Jinqiang Investment Partnership (FJIP). Fulgent has purchased an incremental stake in the entity for approximately $19.0 million, giving Fulgent primary economic and operational ownership of FF Gene Biotech.

FF Gene Biotech was founded to bring Fulgent Genetics’ NGS capabilities to the Chinese genetic testing market. The JV has enabled Fulgent to have an operational presence on the ground in China and capitalize on the large and growing genetic testing opportunity in the country.

Acquisition of CSI Laboratories

In a separate press release today, Fulgent Genetics announced it has completed the acquisition of CSI Laboratories, a leading cancer testing laboratory, to expand its presence in somatic molecular diagnostics and cancer testing. CSI was founded to provide a client- and patient-focused model of cancer diagnostic testing for pathologists, community hospitals, and their patients. CSI offers more than 400 unique tests with a focus on oncology and capabilities across flow cytometry, cytogenetic analysis, fluorescence in-situ hybridization (“FISH”), immunohistochemistry, and molecular genetics. CSI’s philosophy of providing expert diagnostic testing with speed, precision, and care, is highly complementary with Fulgent’s core value proposition of offering a broad menu of actionable diagnostic tests with quality results and rapid turnaround times. CSI is based in Alpharetta, GA and expands Fulgent’s presence in the southeastern United States.

Strategic Partnership with Helio Health

In a separate press release today, Fulgent Genetics and Helio Health (“Helio”), an AI-biotechnology company developing blood-based early cancer detection tests, today announced the companies have entered into a strategic partnership to commercialize Helio’s blood-based early cancer detection tests. In conjunction with the commercial strategic partnership whereby the company has secured exclusive commercial rights for laboratory develop tests (“LDTs”) in the U.S. and Canada, Fulgent has made a strategic investment in Helio. Under this partnership, the companies will initially commercialize and co-brand HelioLiver, a cell-free DNA (cfDNA) methylation blood test that incorporates protein markers and demographics for the detection of hepatocellular carcinoma (HCC) – or liver cancer. Helio is headquartered in Irvine, CA, with facilities in West Lafayette, IN, Guangzhou and Beijing.

Conference Call Information

Fulgent Genetics will host a conference call for the investment community today at 4:30 PM ET (1:30 PM PT) to discuss its second quarter 2021 results. Press and industry analysts are invited to attend in listen-only mode.

The call can be accessed through a live audio webcast in the Investors section of the company’s website, http://ir.fulgentgenetics.com, and through a live conference call by dialing (800) 353-6461 using the confirmation code 9490797. An audio replay will be available in the Investors section of the company’s website.

Note Regarding Non-GAAP Financial Measures

Certain of the information set forth in this press release, including non-GAAP income (loss), non-GAAP income (loss) per share and adjusted EBITDA, are non-GAAP financial measures. Fulgent Genetics believes this information is useful to investors because it provides a basis for measuring the performance of the company’s business excluding certain income or expense items that management believes are not directly attributable to the company’s core operating results. Fulgent Genetics defines non-GAAP income (loss) as income (loss) calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”), plus equity-based compensation expenses, plus or minus the non-GAAP tax effect, plus or minus equity (loss) earnings in investee, and plus or minus other charges or gains, as identified, that management believes are not representative of the company’s core operations. The non-GAAP tax effect is calculated by applying statutory corporate tax rate on equity-based compensation expenses. Fulgent Genetics defines adjusted EBITDA as GAAP income (loss) plus or minus interest (expense) income, plus or minus provisions (benefits) for income taxes, plus depreciation and amortization, plus equity-based compensation expenses, plus or minus equity (loss) earnings in investee, and plus or minus other charges or gains, as identified, that management believes are not representative of the company’s core operations.

Fulgent Genetics may continue to incur expenses similar to the items added to or subtracted from GAAP income (loss) to calculate non-GAAP income (loss) and adjusted EBITDA; accordingly, the exclusion of these items in the presentation of these non-GAAP financial measures should not be construed as an implication that these items are unusual, infrequent or non-recurring. Management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measure of income (loss) in evaluating the company’s operating performance. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in conformity with GAAP, and non-GAAP financial measures as reported by Fulgent Genetics may not be comparable to similarly titled metrics reported by other companies.

About Fulgent Genetics

Fulgent Genetics’ proprietary technology platform has created a broad, flexible test menu and the ability to continually expand and improve its proprietary genetic reference library while maintaining accessible pricing, high accuracy and competitive turnaround times. Combining NGS with its technology platform, the company performs full-gene sequencing with deletion/duplication analysis in an array of panels that can be tailored to meet specific customer needs. In 2019, the company launched its first patient-initiated product, Picture Genetics, a new line of at-home screening tests that combines the company’s advanced NGS solutions with actionable results and genetic counseling options for individuals. Since March 2020, the company has commercially launched several tests for the detection of SARS-CoV-2, the virus that causes the novel coronavirus (“COVID-19”), including NGS and reverse transcription polymerase chain reaction (“RT-PCR”) – based tests. The Company has received Emergency Use Authorization (“EUA”) from the U.S. Food and Drug Administration (“FDA”) for the RT-PCR-based tests for the detection of SARS-CoV-2 using upper respiratory specimens (nasal, nasopharyngeal, and oropharyngeal swabs) and for the at-home testing service through Picture Genetics. A cornerstone of the company’s business is its ability to provide expansive options and flexibility for all clients’ unique testing needs through a comprehensive technology offering including cloud computing, pipeline services, record management, web portal services, clinical workflow, sequencing as a service and automated laboratory services.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements in this press release include statements about, among other things: expected future revenues, sources of revenue, growth, margins, GAAP and non-GAAP income and company performance, including the company’s and its technology platform’s ability to scale; evaluations and judgments regarding market position, acquisitions and acquired businesses (including CSI Laboratories and FF Gene Biotech), investments and partnerships (including Helio Health), relationships and the company’s testing services and technology; the timing, commercial success and impact on the company’s results of new product launches and other initiatives; the company’s identification and evaluation of opportunities and its ability to capitalize on opportunities, capture market share or to expand its presence in certain markets; and the company’s ability to continue to grow its business.

Forward-looking statements are statements other than historical facts and relate to future events or circumstances or the company’s future performance, and they are based on management’s current assumptions, expectations and beliefs concerning future developments and their potential effect on the company’s business. These forward-looking statements are subject to a number of risks and uncertainties, which may cause the forward-looking events and circumstances described in this press release to not occur, and actual results to differ materially and adversely from those described in or implied by the forward-looking statements. These risks and uncertainties include, among others: the ongoing impacts of the COVID-19 pandemic, including the preventive public health measures that may continue to impact demand for its tests and the pandemic’s effects on the global supply chain; the market potential for, and the rate and degree of market adoption of, the company’s tests, including its newly-developed tests for COVID-19 and genetic testing generally; the company’s ability to capture a sizable share of the developing market for genetic and COVID-19 testing and to compete successfully in these markets, including its ability to continue to develop new tests that are attractive to its various customer markets, its ability to maintain turnaround times and otherwise keep pace with rapidly changing technology; the company’s ability to maintain the low internal costs of its business model, particularly as the company makes investments across its business; the company’s ability to maintain an acceptable margin on sales of its tests, particularly in light of increasing competitive pressures and other factors that may continue to reduce the company’s sale prices for and margins on its tests; risks related to volatility in the company’s results, which can fluctuate significantly from period to period; risks associated with the composition of the company’s customer base, which can fluctuate from period to period and can be comprised of a small number of customers that account for a significant portion of the company’s revenue; the company’s ability to grow and diversify its customer base and increase demand from existing and new customers; the company’s investments in its infrastructure, including its sales organization and operational capabilities, and the extent to which these investments impact the company’s business and performance and enable it to manage any growth it may experience in future periods; the company’s level of success in obtaining coverage and adequate reimbursement and collectability levels from third-party payors for its tests; the company’s level of success in establishing and obtaining the intended benefits from partnerships, strategic investments, joint ventures, acquisitions or other relationships; the company’s compliance with the various evolving and complex laws and regulations applicable to its business and its industry; risks associated with the company’s international operations; the company’s ability to protect its proprietary technology platform; and general industry, economic, political and market conditions. As a result of these risks and uncertainties, forward-looking statements should not be relied on or viewed as predictions of future events.

The forward-looking statements made in this press release speak only as of the date of this press release, and the company assumes no obligation to update publicly any such forward-looking statements to reflect actual results or to changes in expectations, except as otherwise required by law.

The company’s reports filed with the U.S. Securities and Exchange Commission (“SEC”), including its annual report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 8, 2021 and the other reports it files from time to time, including subsequently filed quarterly and current reports, are made available on the company’s website upon their filing with the SEC. These reports contain more information about the company, its business and the risks affecting its business, as well as its results of operations for the periods covered by the financial results included in this press release.

FULGENT GENETICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
June 30, 2021 and December 31, 2020
(in thousands)
	June 30,			December 31,
ASSETS:	2021			2020
Cash and cash equivalents	$	100,461		$	87,426
Investments in marketable securities		676,578			344,443
Accounts receivable, net		148,576			183,857
Property and equipment, net		51,086			40,199
Other assets		73,154			44,536
Total assets	$	1,049,855		$	700,461
LIABILITIES & EQUITY:
Accounts payable, accrued liabilities and other liabilities	$	129,130		$	131,074
Total stockholders’ equity		920,725			569,387
Total liabilities & equity	$	1,049,855		$	700,461

FULGENT GENETICS, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS DATA
Three and Six Months Ended June 30, 2021 and 2020
(in thousands, except per share data)
(unaudited)
	Three Months Ended							Six Months Ended
	June 30,							June 30,
	2021			2020				2021			2020
Revenue	$	153,616		$	17,265			$	513,045		$	25,018
Cost of revenue (1)		35,858			7,717				109,933			11,774
Gross profit		117,758			9,548				403,112			13,244
Operating expenses:
Research and development (1)		5,312			1,849				10,734			3,827
Selling and marketing (1)		5,219			3,260				10,227			4,857
General and administrative (1)		8,329			1,799				16,331			3,834
Total operating expenses		18,860			6,908				37,292			12,518
Operating income		98,898			2,640				365,820			726
Interest and other income, net		604			275				886			516
Income before income taxes, gain on equity method investment and equity loss in investee		99,502			2,915				366,706			1,242
Provisions for (benefit from) income taxes		23,589			(599	)			90,102			(565	)
Income before gain on equity method investment and equity loss in investee		75,913			3,514				276,604			1,807
Gain on equity method investment		3,734			—				3,734			—
Equity loss in investee		—			(193	)			—			(442	)
Net income from consolidated operations		79,647			3,321				280,338			1,365
Net loss attributable to noncontrolling interests		165			—				165			—
Net income attributable to Fulgent	$	79,812		$	3,321			$	280,503		$	1,365
Net income per common share attributable to Fulgent:
Basic	$	2.74		$	0.15			$	9.68		$	0.06
Diluted	$	2.59		$	0.14			$	9.10		$	0.06
Weighted average common shares:
Basic		29,150			21,747				28,991			21,656
Diluted		30,830			22,920				30,809			22,824
(1) Equity-based compensation expense was allocated as follows:
Cost of revenue	$	692		$	270			$	1,366		$	501
Research and development		1,481			364				2,704			676
Selling and marketing		620			222				1,046			393
General and administrative		733			224				1,372			434
Total equity-based compensation expense	$	3,526		$	1,080			$	6,488		$	2,004

FULGENT GENETICS, INC.
Non-GAAP Income Reconciliation
Three and Six Months Ended June 30, 2021 and 2020
(in thousands, except per share data)
	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2021				2020				2021				2020
Net income attributable to Fulgent	$	79,812			$	3,321			$	280,503			$	1,365
Equity-based compensation expense		3,526				1,080				6,488				2,004
Non-GAAP tax effect (1)		(952	)			(248	)			(1,752	)			(461	)
Gain on equity method investment		(3,734	)			—				(3,734	)			—
Equity loss in investee		—				193				—				442
Non-GAAP income attributable to Fulgent	$	78,652			$	4,346			$	281,505			$	3,350
Net income per common share attributable to Fulgent:
Basic	$	2.74			$	0.15			$	9.68			$	0.06
Diluted	$	2.59			$	0.14			$	9.10			$	0.06
Non-GAAP income per common share attributable to Fulgent:
Basic	$	2.70			$	0.20			$	9.71			$	0.15
Diluted	$	2.55			$	0.19			$	9.14			$	0.15
Weighted average common shares:
Basic		29,150				21,747				28,991				21,656
Diluted		30,830				22,920				30,809				22,824
(1) Tax rates as follows:
Corporate tax rate of 27% for the three and six months ended June 30, 2021.
Corporate tax rate of 23% for the three and six months ended June 30, 2020.

FULGENT GENETICS, INC.
Non-GAAP Adjusted EBITDA Reconciliation
Three and Six Months Ended June 30, 2021 and 2020
(in thousands)
	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2021				2020				2021				2020
Net income attributable to Fulgent	$	79,812			$	3,321			$	280,503			$	1,365
Interest income, net		(566	)			(249	)			(796	)			(575	)
Provisions for (benefit from) income taxes		23,589				(599	)			90,102				(565	)
Equity-based compensation expense		3,526				1,080				6,488				2,004
Depreciation and amortization		2,418				549				4,340				1,118
Gain on equity method investment		(3,734	)			—				(3,734	)			—
Equity loss in investee		—				193				—				442
Adjusted EBITDA	$	105,045			$	4,295			$	376,903			$	3,789

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210809005716/en/

Investor Relations Contact:

The Blueshirt Group

Nicole Borsje, 415-217-2633, [email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Oncology Health Infectious Diseases Genetics Pharmaceutical Biotechnology

MEDIA:

Posted on August 9, 2021 6:50 pm

Cellebrite Announces Effectiveness Of Registration Statement In Connection With Its Proposed Business Combination With TWC Tech Holdings II Corp.

– Special meeting of stockholders of TWC Tech Holdings II Corp. to approve the business combination scheduled for August 27, 2021 at 1:00 pm Eastern Time

– Cellebrite DI Ltd. has applied to be listed on Nasdaq under the new ticker symbol “CLBT” subject to the closing of the business combination

PR Newswire

PETAH TIKVA, Israel, Aug. 9, 2021 /PRNewswire/ — Cellebrite DI Ltd. (“Cellebrite”), the global leader in Digital Intelligence solutions for the public and private sectors, today announced its Registration Statement on Form F-4 in connection with the previously announced business combination (the “Business Combination”) with TWC Tech Holdings II Corp. (“TWC”) (Nasdaq: TWCT), a publicly-listed special purpose acquisition company, has been declared effective by the Securities and Exchange Commission (the “SEC”). TWC has set a record date of August 5, 2021 (the “Record Date”) and a meeting date of August 27, 2021 for its special meeting for TWC stockholders to approve the previously announced Business Combination (the “Special Meeting”).

The Special Meeting will be held virtually via live webcast on August 27, 2021 at https://web.lumiagm.com/272139865. The proxy statement/prospectus contains important information about Cellebrite, TWC and the Business Combination, and is available on: https://sec.report/CIK/0001854587. TWC stockholders of record as of August 5, 2021 will be mailed the proxy materials in connection with the Business Combination and will be entitled to vote at the special meeting.

If the proposals at the Special Meeting are approved, the Business Combination is expected to close promptly thereafter and Cellebrite ordinary shares and warrants will be listed on Nasdaq under the new ticker symbols “CLBT” and “CLBTW,” respectively, subject to the satisfaction of customary closing conditions. 

Each TWC stockholder’s voting control number is found on its Voting Instruction Form. If a TWC stockholder held shares as of the August 5, 2021 Record Date and did not receive or misplaced its Voting Instruction Form, such TWC stockholder should contact its bank, broker or other nominee for a replacement or to obtain its control number in order to vote. A bank, broker or other nominee is a person or firm that acts as an intermediary between an investor and the stock exchange, who can help a TWC stockholder vote its shares.

If a TWC stockholder needs assistance with voting its shares, please contact Morrow Sodali LLC (“Morrow”), TWC’s proxy solicitor, for help, by calling toll-free at +1 (800) 662-5200 (banks and brokers can call collect at +1 (203) 658-9400), or by email at [email protected].  

About Cellebrite
Cellebrite’s mission is to enable its customers to protect and save lives, accelerate justice and preserve privacy in communities around the world. Cellebrite is the global leader in Digital Intelligence solutions for the public and private sectors, empowering organizations in mastering the complexities of legally sanctioned digital investigations by streamlining intelligence processes. Trusted by thousands of leading agencies and companies in more than 140 countries, Cellebrite’s Digital Intelligence platform and solutions transform how customers collect, review, analyze and manage data in legally sanctioned investigations. To learn more visit us at www.cellebrite.com and https://www.cellebrite.com/en/investors/.  

About TWC Tech Holdings
 II Corp.
TWC Tech Holdings II Corp. is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination. TWC Tech Holdings II Corp. raised $600 million in its initial public offering in September 2020. TWC Tech Holdings II Corp.’s securities are listed on the Nasdaq Capital Market under the ticker symbols “TWCT,” “TWCTU” and “TWCTW.” 

Additional Information

This communication is being made in respect of the proposed transaction involving Cellebrite and TWC. In connection with the proposed transaction, Cellebrite has filed with the SEC a registration statement on Form F-4 that includes a proxy statement of TWC in connection with TWC’s solicitation of proxies for the vote by TWC’s shareholders with respect to the proposed transaction and other matters as may be described in the registration statement. The registration statement on Form F-4 was declared effective on August 6, 2021. Cellebrite and TWC also plan to file other documents with the SEC regarding the proposed transaction and a proxy statement/prospectus is also being mailed to TWC’s stockholders, seeking any required stockholder approvals. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITYHOLDERS OF TWC ARE URGED TO READ THE FORM F-4 AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS, INCLUDING AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement/prospectus, as well as other filings containing information about Cellebrite and TWC will be available without charge at the SEC’s Internet site (http://www.sec.gov). Copies of the proxy statement/prospectus can also be obtained, when available, without charge, from Cellebrite’s website at www.cellebrite.com, or by directing a request to: TWC Tech Holdings II Corp., Four Embarcadero Center, Suite 2100, San Francisco, CA 94111. 

Participants in the Solicitations

Cellebrite, TWC and certain of their respective directors, executive officers and other members of management and employees may, under SEC rules, be deemed to be participants in the solicitation of proxies from TWC’s shareholders in connection with the proposed transaction. You can find more information about the directors and officers of Cellebrite and TWC Tech Holdings at Cellebrite’s website at www.cellebrite.com, or in the proxy statement/prospectus on Form F-4 filed by Cellebrite with the SEC. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests are included in the proxy statement/prospectus. Shareholders, potential investors and other interested persons should read the proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from the sources indicated above.

Caution About Forward-Looking Statements

This communication includes forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 including, but not limited to, Cellebrite’s and TWC’s expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. These factors are difficult to predict accurately and may be beyond Cellebrite’s and TWC’s control. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, including financial projections, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or similar expressions. Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements.

Certain of these risks are identified and discussed in the section of Cellebrite’s proxy statement/prospectus on Form F-4 titled “Risk Factors”, which will be important to consider in determining future results and should be reviewed in their entirety. These forward-looking statements include, without limitation, expectations with respect to approval by TWC’s stockholders of the business combination and satisfaction of other closing conditions. Forward-looking statements are based on Cellebrite’s or TWC’s management’s current expectations and beliefs, as well as a number of assumptions concerning future events. However, there can be no assurance that the events, results or trends identified in these forward-looking statements will occur or be achieved. Forward-looking statements in this communication or elsewhere speak only as of the date made. New uncertainties and risks arise from time to time, and it is impossible for Cellebrite or TWC to predict these events or how they may affect Cellebrite or TWC. Except as required by law, neither Cellebrite nor TWC has any duty to, and does not intend to, update or revise the forward-looking statements in this communication or elsewhere after the date this communication is issued. In light of these risks and uncertainties, investors should keep in mind that results, events or developments discussed in any forward-looking statement made in this communication may not occur. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. TWC and Cellebrite undertake no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. 

In addition to the factors previously disclosed in Cellebrite’s reports filed with the SEC and those identified elsewhere in this press release, the following factors, among others, could cause results to differ materially from the forward-looking statements in this release or historical performance: (1) risks and uncertainties related to the inability of the parties to successfully or timely consummate the Business Combination, including the risk that any required regulatory approvals or stockholder approvals of TWC are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined company or the expected benefits of the business combination is not obtained; (2) the number of redemption requests made by TWC’s public stockholders; (3) the ability to meet Nasdaq’s listing standards (or the standards of any other securities exchange on which securities of the public entity are listed) following the consummation of the Business Combination; the inability to complete the private placement of ordinary shares of Cellebrite to certain institutional accredited investors; (4) the risk that the proposed transaction disrupts current plans and operations of Cellebrite as a result of the announcement and consummation of the transactions described herein; (5) the ability to recognize the anticipated benefits of the proposed Business Combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; the duration and global impact of COVID-19; (6) costs related to the proposed business combination; the outcome of any legal proceedings that may be instituted against Cellebrite, TWC, or any of their respective directors or officers, regarding the proposed transaction; (7) the ability of Cellebrite or the combined company to issue equity or equity-linked securities in connection with the proposed business combination or in the future; the failure to realize anticipated pro forma results and underlying assumptions, including with respect to estimated stockholder redemptions and purchase price and other adjustments; (8) changes in applicable laws or regulations; (9) the possibility that Cellebrite may be adversely affected by other economic, business, and/or competitive factors; and (10) other risks and uncertainties that could cause actual results to differ materially from those expressed or implied in forward-looking statements indicated from time to time in other documents filed or to be filed with the SEC by TWC and in the registration statement on Form F-4 relating to the business combination filed by Cellebrite on May 17, 2021, as amended.

This communication is not intended to be all-inclusive or to contain all the information that a person may desire in considering an investment in Cellebrite [,TWC or the combined company] and is not intended to form the basis of an investment decision in Cellebrite [,TWC or the combined company]. All subsequent written and oral forward-looking statements concerning Cellebrite and TWC, the proposed transaction or other matters and attributable to Cellebrite and TWC or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.

Contacts:

For Cellebrite
Investors 
Anat Earon-Heilborn
VP Investor Relations | Cellebrite DI Ltd.
+972 73 394 8440
[email protected]

Media
Adam Jaffe
VP of Global Communications
+1 973 206 7643
[email protected]  

For TWC Tech Holdings II Corp.:

Jonathan Gasthalter/Nathaniel Garnick
Gasthalter & Co.
+1 (212) 257-4170
[email protected]

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Posted on August 9, 2021 6:49 pm

Pulse Biosciences Reports Second Quarter 2021 Financial Results

Pulse Biosciences Reports Second Quarter 2021 Financial Results

HAYWARD, Calif.–(BUSINESS WIRE)–
Pulse Biosciences, Inc. (Nasdaq: PLSE), a novel bioelectric medicine company commercializing the CellFX® System powered by Nano-Pulse Stimulation™ (NPS™) technology, today announced financial results for the second quarter of 2021.

Recent Highlights

• CellFX System Controlled Launch Program participants totaled 49 at the end of the second quarter, including 34 onboarded during the second quarter across the U.S., Europe and Canada, on track to complete program onboarding of the Key Opinion Leader (KOL) sites by the end of the third quarter
• Initiated the transition of clinics from the Controlled Launch Program to commercial use as clinics opt to acquire the CellFX System
• Achieved Health Canada Approval for the CellFX System and expanded the Controlled Launch into Canada with the onboarding of the first clinic and completion of the first procedures
• Completed enrollment of 127 of the expected 150 patients in an FDA IDE approved pivotal comparison study to assess the treatment of cutaneous non-genital warts using the CellFX System, enrollment is on track to be completed by the end of the third quarter
• Enrolled 18 of 30 patients as part of a study to assess the treatment of basal cell carcinoma using the CellFX System, enrollment is on track to be completed by the end of the third quarter
• Four podium presentations of clinical studies highlighting NPS technology were delivered by leading dermatologic researchers at the American Society for Laser Medicine and Surgery (ASLMS) Virtual Annual Meeting in May
• Completed $50 million common stock private placement with the Company’s Chairman Robert W. Duggan, including the extinguishment of the principal balance and accrued and unpaid interest of the March 11, 2021 term-loan and the investment of $8.4 million of new capital

“We are pleased with the progress across the business in the second quarter. We onboarded a significant number of controlled launch participant clinics, including in Canada following the achievement of Health Canada approval for the CellFX System and continued to make progress on our clinical initiatives intended to broaden the CellFX System’s applications in aesthetic dermatology and beyond,” said Darrin Uecker, President and CEO of Pulse Biosciences. “With this progress and anticipated ongoing commercial conversions of controlled launch participants, we are well positioned to drive growth through increased adoption of CellFX procedures. We look forward to a broader commercial launch late in the year and toward delivering the benefits of NPS technology to more patients and clinicians.”

Second Quarter 2021 Results

Cash, cash equivalents and investments totaled $47.4 million as of June 30, 2021 compared to $59.9 million as of March 31, 2021. The cash balance as of June 30, 2021 excludes approximately $8.4 million of private placement proceeds received in July 2021. Cash used in the second quarter of 2021 totaled $15.0 million excluding net proceeds received under the Company’s ATM program. Cash used in the second quarter of 2021 included the payment of $2.5 million to Mr. Duggan in accordance with the with terms of the May 2020 Letter Agreement whereby Mr. Duggan provided indemnity coverage on substantially the same terms as the Company’s prior director and officer liability insurance program. This compares with $7.9 million used in the same period in the prior year and $10.7 million used in the first quarter of 2021.

GAAP operating expenses for the three months ended June 30, 2021 were $14.8 million, compared to $11.4 million for the prior year period. Non-GAAP operating expenses for the second quarter were $12.1 million, compared to $8.7 million for the same period in the prior year. The year-over-year increase in operating expenses was primarily driven by the expansion of commercial and operational infrastructure, including increased headcount, to support commercialization activities.

GAAP net loss for the three months ended June 30, 2021, was ($15.3) million compared to ($11.3) million for the three months ended June 30, 2020. Non-GAAP net loss for the three months ended June 30, 2021, was ($12.6) million compared to ($8.6) million for the three months ended June 30, 2020.

Reconciliations of GAAP to non-GAAP operating expenses and net loss have been provided in the tables following the financial statements in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Impact of COVID-19

The COVID-19 pandemic had minimal impact on the Company’s operations in the second quarter of 2021. Product development, execution of clinical trials, regulatory timelines and Controlled Launch have not been materially affected at this time. However, due to the uncertain scope and duration of the pandemic, future impact to the Company’s operations and financial results, if any, cannot be reasonably estimated.

Webcast and Conference Call Information

Pulse Biosciences’ management will host a conference call today, August 9, 2021 beginning at 1:30pm PT. Investors interested in listening to the conference call may do so by dialing 1-877-705-6003 for domestic callers or 1-201-493-6725 for international callers. A live and recorded webcast of the event will be available at http://investors.pulsebiosciences.com/.

About Pulse Biosciences®

Pulse Biosciences is a novel bioelectric medicine company committed to health innovation that has the potential to improve the quality of life for patients. The Company’s proprietary Nano-Pulse Stimulation technology delivers nano-second pulses of electrical energy to non-thermally clear cells while sparing adjacent non-cellular tissue. The CellFX® System is the first commercial product to harness the distinctive advantages of NPS technology to treat a variety of applications for which an optimal solution remains unfulfilled. The initial commercial use of the CellFX System is to address a range of dermatologic conditions that share high demand among patients and practitioners for improved dermatologic outcomes. Designed as a multi-application platform, the CellFX System offers customer value with a utilization-based revenue model. Visit pulsebiosciences.com to learn more.

To stay informed about the CellFX System, please visit CellFX.com and sign-up for updates.

Pulse Biosciences, CellFX, Nano-Pulse Stimulation, NPS and the stylized logos are among the trademarks and/or registered trademarks of Pulse Biosciences, Inc. in the United States and other countries.

Non-GAAP Financial Measures

In this press release, in order to supplement the Company’s condensed consolidated financial statements presented in accordance with Generally Accepted Accounting Principles, or GAAP, management has disclosed certain non-GAAP financial measures for the statement of operations. The Company believes that an evaluation of its ongoing operations (and comparisons of its current operations with historical and future operations) would be difficult if the disclosure of its financial results were limited to financial measures prepared in accordance with GAAP. As a result, the Company is disclosing certain non-GAAP results in order to supplement investors’ and other readers’ understanding and assessment of the Company’s financial performance. Company management uses these measurements as aids in monitoring the Company’s ongoing financial performance from quarter to quarter, and year to year, on a regular basis and for financial and operational decision-making. Non-GAAP adjustments include stock-based compensation, depreciation and amortization. From time to time in the future, there may be other items that the Company may exclude if the Company believes that doing so is consistent with the goal of providing useful information to management and investors. The Company has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. Investors are cautioned that there are a number of limitations associated with the use of non-GAAP financial measures as analytical tools. Investors are encouraged to review these reconciliations, and not to rely on any single financial measure to evaluate the Company’s business.

Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies, which could reduce the usefulness of the Company’s non-GAAP financial measures as tools for comparison. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most directly comparable GAAP measures set forth below and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP. Non-GAAP financial measures in this earnings release exclude the following:

Non-cash expenses for stock-based compensation. The Company has excluded the effect of stock-based compensation expenses in calculating the Company’s non-GAAP operating expenses and net loss measures. Although stock-based compensation is a key incentive offered to employees, the Company continues to evaluate its business performance excluding stock-based compensation expenses. The Company records stock-based compensation expense related to grants of performance and time-based options. Depending upon the size, timing and terms of the grants, as well as the probability of achievement of performance-based awards, this expense may vary significantly but will recur in future periods. The Company believes that excluding stock-based compensation better allows for comparisons from period to period.

Depreciation and amortization. The Company has excluded depreciation and amortization expense in calculating its non-GAAP operating expenses and net loss measures. Depreciation and amortization are non-cash charges to current operations.

Forward-Looking Statements

All statements in this press release that are not historical are forward-looking statements, including, among other things, statements relating to Pulse Biosciences’ expectations regarding the benefits of the Company’s Controlled Launch program and commercialization of the CellFX System to drive growth, including the timing for onboarding KOLs, broader commercial launch and future regulatory clearances, statements relating to the effectiveness of the Company’s NPS technology and the CellFX System to improve patient outcomes, statements relating to the Company’s current and planned future clinical studies, the timing for completion of such studies, and the ability of the Company to execute such studies, as well as the anticipated results of any such studies, statements relating to the Company’s pipeline of product candidates, market opportunities and commercial launch plans, including the market for aesthetic dermatologic procedures, and statements relating to the impact of COVID-19 and other future events. These statements are not historical facts but rather are based on Pulse Biosciences’ current expectations, estimates, and projections regarding Pulse Biosciences’ business, operations and other similar or related factors. Words such as “may,” “will,” “could,” “would,” “should,” “anticipate,” “predict,” “potential,” “continue,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” and other similar or related expressions are used to identify these forward-looking statements, although not all forward-looking statements contain these words. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and assumptions that are difficult or impossible to predict and, in some cases, beyond Pulse Biosciences’ control. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in Pulse Biosciences’ filings with the Securities and Exchange Commission. Pulse Biosciences undertakes no obligation to revise or update information in this release to reflect events or circumstances in the future, even if new information becomes available.

PULSE BIOSCIENCES, INC.
Condensed Consolidated Balance Sheets
(In thousands, except par value)
(Unaudited)
		June 30,				December 31,
		2021				2020
ASSETS
Current assets:
Cash and cash equivalents		$	47,426			$	12,463
Investments			—				8,012
Inventory			2,691				—
Related party other receivable			8,371				—
Prepaid expenses and other current assets			3,267				1,864
Total current assets			61,755				22,339
Property and equipment, net			2,460				2,478
Intangible assets, net			3,549				3,882
Goodwill			2,791				2,791
Right-of-use assets			9,119				9,438
Other assets			365				365
Total assets		$	80,039			$	41,293
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	2,823			$	1,717
Accrued expenses			4,572				5,326
Lease liability, current			719				542
Note payable, current			1,730				—
Total current liabilities			9,844				7,585
Lease liability, less current			10,445				10,814
Total liabilities			20,289				18,399
Stockholders’ equity:
Preferred stock, $0.001 par value; authorized – 50,000 shares; no shares issued and outstanding			—				—
Common stock, $0.001 par value: authorized – 500,000 shares; issued and outstanding – 29,606 shares and 25,550 shares at June 30, 2021 and December 31, 2020, respectively			29				25
Additional paid-in capital			266,223				195,410
Accumulated other comprehensive income (loss)			—				(1	)
Accumulated deficit			(206,502	)			(172,540	)
Total stockholders’ equity			59,750				22,894
Total liabilities and stockholders’ equity		$	80,039			$	41,293

PULSE BIOSCIENCES, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except per share data)
(Unaudited)
		Three-Month Periods Ended								Six-Month Periods Ended
		June 30,								June 30,
		2021				2020*				2021				2020*
Revenue		$	—			$	—			$	—			$	—
Operating expenses:
Research and development			7,459				5,870				16,522				12,051
Sales and marketing			3,147				1,485				7,293				3,180
General and administrative			4,200				3,999				9,516				8,073
Total operating expenses			14,806				11,354				33,331				23,304
Other income (expense):
Interest income (expense), net			(517	)			21				(631	)			99
Total other income (expense)			(517	)			21				(631	)			99
Net loss			(15,323	)			(11,333	)			(33,962	)			(23,205	)
Other comprehensive loss:
Unrealized gain (loss) on available-for-sale securities			—				(17	)			1				(4	)
Comprehensive loss		$	(15,323	)		$	(11,350	)		$	(33,961	)		$	(23,209	)
Net loss per share:
Basic and diluted net loss per share		$	(0.58	)		$	(0.53	)		$	(1.29	)		$	(1.10	)
Weighted average shares used to compute net loss per common share — basic and diluted			26,477				21,528				26,276				21,183
*Certain 2020 amounts have been reclassified to conform to the current period presentation. Sales and marketing expenses have been reclassified out of general and administrative and presented as a separate line item. Amortization of intangible assets are reclassified to general and administrative expenses.
		Three-Month Periods Ended								Six-Month Periods Ended
		June 30,								June 30,
Stock Based Compensation Expense:		2021				2020*				2021				2020*
Research and development		$	1,002			$	897			$	4,168			$	1,774
Sales and marketing			500				280				2,261				590
General and administrative			946				1,235				2,984				2,674
Total stock-based compensation expense		$	2,448			$	2,412			$	9,413			$	5,038

Reconciliation of GAAP to Non-GAAP Financial Measures
The following table presents the reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures:
(In thousands)
(Unaudited)
	Three Months Ended								Six Months Ended
		June 30,								June 30,
		2021				2020				2021				2020
Reconciliation of GAAP to non-GAAP Research and development:
GAAP Research and development	$	7,459			$	5,870			$	16,522			$	12,051
Less: Stock-based compensation expense		(1,002	)			(897	)			(4,168	)			(1,774	)
Less: Depreciation and amortization		(41	)			(41	)			(80	)			(82	)
Non-GAAP Research and development	$	6,416			$	4,932			$	12,274			$	10,195
Reconciliation of GAAP to non-GAAP Sales and marketing:
GAAP Sales and Marketing	$	3,147			$	1,485			$	7,293			$	3,180
Less: Stock-based compensation expense		(500	)			(280	)			(2,261	)			(590	)
Non-GAAP Sales and marketing	$	2,647			$	1,205			$	5,032			$	2,590
Reconciliation of GAAP to non-GAAP General and administrative:
GAAP General and administrative	$	4,200			$	3,999			$	9,516			$	8,073
Less: Stock-based compensation expense		(946	)			(1,234	)			(2,984	)			(2,673	)
Less: Depreciation and amortization		(241	)			(234	)			(481	)			(463	)
Non-GAAP General and administrative	$	3,013			$	2,531			$	6,051			$	4,937
Reconciliation of GAAP to non-GAAP Operating expenses:
GAAP Operating expenses	$	14,806			$	11,354			$	33,331			$	23,304
Less: Stock-based compensation expense		(2,448	)			(2,411	)			(9,413	)			(5,037	)
Less: Depreciation and amortization		(282	)			(275	)			(561	)			(545	)
Non-GAAP Operating expenses	$	12,076			$	8,668			$	23,357			$	17,722
Reconciliation of GAAP to non-GAAP Net loss:
GAAP Net loss	$	(15,323	)		$	(11,333	)		$	(33,962	)		$	(23,205	)
Add: Stock-based compensation expense		2,448				2,411				9,413				5,037
Add: Depreciation and amortization		282				275				561				545
Non-GAAP Net loss	$	(12,593	)		$	(8,647	)		$	(23,988	)		$	(17,623	)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210809005709/en/

Investors:

Pulse Biosciences

Sandra Gardiner, EVP and CFO

510.241.1077

[email protected]

or

Gilmartin Group

Philip Trip Taylor

415.937.5406

[email protected]

Media:

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Nadine D. Tosk

504.453.8344

[email protected] or

[email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Biotechnology General Health Health Medical Devices

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