Market Newsdesk

Chicago, IL, Nov. 13, 2020 (GLOBE NEWSWIRE) — The 3^rd Annual Private Equity and Employee Share Ownership Symposium will be held Friday, November 20, 2020 at 9:00 EDT. This complimentary seminar is hosted by Rutgers School of Management and Labor Relations and their Institute for the Study of Employee Ownership and Profit Sharing. Verit Advisors® CEO, Mary Josephs will make the opening remarks for the session which will be an exciting discussion on private equity and employee ownership. Registration at this link. Other companies involved include KKR, Churchill Asset Management LLC, CIBC U.S., Blue Wolf Capital Partners, Morgan Lewis, Mosaic Capital Partners, and American Working Capital.

About Rutgers School of Management and Labor Relations 

The purpose of the Institute for the Study of Employee Ownership and Profit Sharing is to study the various models that have emerged and will emerge of employee ownership shares and profit shares in the corporation and society of the United States and around the world.

About Verit Advisors

Verit Advisors unites sophisticated investment banking capabilities with a client centric boutique, fluent in ESOPs, debt capital markets, mergers and acquisitions, and valuation services. Integrity, teamwork, service, and innovation are at the heart of the organization, as Verit strives to provide unparalleled advice and custom solutions to its clients. Mary Josephs founded Verit Advisors in 2009.  Josephs and her team are considered to be one of the foremost experts in ESOP transactions and middle market strategic alternatives. 

Pat Eichten
Verit Advisors, LLC
[email protected]

HOUSTON, Nov. 13, 2020 (GLOBE NEWSWIRE) — Targa Resources Corp. (NYSE: TRGP) (“Targa” or the “Company”) announced today that representatives from the Company will participate in investor meetings via video conference at the UBS Midstream Virtual 1×1 Mini-Conference and the RBC Midstream and Energy Infrastructure Virtual Conference on Tuesday, November 17 and Wednesday, November 18, 2020.

A copy of the slides used for the conference meetings will be available in the Investors section of the Company’s website at www.targaresources.com, or by going to https://www.targaresources.com/investors/events.

About Targa Resources Corp.

Targa Resources Corp. is a leading provider of midstream services and is one of the largest independent midstream infrastructure companies in North America. The Company owns, operates, acquires and develops a diversified portfolio of complementary midstream infrastructure assets. The Company is primarily engaged in the business of: gathering, compressing, treating, processing, transporting and purchasing and selling natural gas; transporting, storing, fractionating, treating and purchasing and selling NGLs and NGL products, including services to LPG exporters; and gathering, storing, terminaling and purchasing and selling crude oil.

For more information, please visit the Company’s website at www.targaresources.com.

Forward-Looking Statements

Certain statements in this release are “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. All statements, other than statements of historical facts, included in this release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future, are forward-looking statements. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties, factors and risks, many of which are outside the Company’s control, which could cause results to differ materially from those expected by management of the Company. Such risks and uncertainties include, but are not limited to, weather, political, economic and market conditions, including a decline in the price and market demand for natural gas, natural gas liquids and crude oil, the impact of pandemics such as COVID-19, actions by the Organization of the Petroleum Exporting Countries (“OPEC”) and non-OPEC oil producing countries, the timing and success of business development efforts, and other uncertainties. These and other applicable uncertainties, factors and risks are described more fully in the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2019, and any subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The Company does not undertake an obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Contact the Company’s investor relations department by email at
[email protected] or by phone at (713) 584-1133.

Sanjay Lad
Vice President, Finance & Investor Relations

Jennifer Kneale
Chief Financial Officer

SUWANEE, Ga., Nov. 13, 2020 (GLOBE NEWSWIRE) — Digirad Corporation (Nasdaq: DRAD; DRADP) (“Digirad” or the “Company”) reported today its financial results for the third quarter (Q3) and nine months (9M) ended September 30, 2020.

Q3 2020 Financial Highlights vs. Q3 2019*

• Total revenue increased to $30.4 million from $28.3 million
• Gross profit decreased to $4.8 million from $5.2 million
• Net loss from continuing operations was $1.8 million (or $0.37 per basic and diluted share) compared to a net loss of continuing operations $1.5 million (or $0.74 per basic and diluted share) **
• Non-GAAP adjusted EBITDA from continuing operations decreased to $1.1 million from $2.0 million
• Non-GAAP free cash outflow of $2.2 million versus inflow of $0.4 million
• Cash and cash equivalents and restricted cash of $4.4 million versus $1.7 million and net debt of $18.9 million versus $21.4 million

9M 2020 Financial Highlights vs. 9M 2019*

• Total revenue increased to $81.6 million from $78.0 million
• Gross profit decreased to $13.3 million from $14.2 million
• Net loss from continuing operations was $6.0 million (or $1.83 per basic and diluted share) compared to a net loss from continuing operations of $4.6 million (or $2.27 per basic and diluted share) **
• Non-GAAP adjusted EBITDA from continuing operations decreased to $3.4 million from $4.9 million
• Non-GAAP free cash outflow of $2.3 million versus inflow of $1.6 million

*
Since September 10, 2019, Digirad has been operating as a diversified holding company (“HoldCo”) with three divisions: Healthcare, Building & Construction, and Real Estate & Investments. Digirad’s Q3 2020 and 9M 2020 results include financial and operational data for the two newly created divisions – Building & Construction and Real Estate & Investments. Partial operational and financial data were recorded in the 2019 corresponding periods for these two divisions.

** In May 28, 2020, Digirad completed a public offering through the issuance of 2,225,000 shares of its common stock. Per share amounts for Q3 2020 and 9M 2020 periods, reflect the new share count. For the nine months ended September 30, 2020, there were 395,140 warrants exercised and converted into 197,570 shares of common stock.

Subsequent to the end of the quarter, the Company entered into a Stock Purchase Agreement (“Agreement”) with Knob Creek Acquisition Corp., to sell its DMS Health Technologies, Inc. (“DMS Health”) business unit. The initial purchase price under the Agreement is $18.75 million. The Agreement is subject to customary closing conditions and is expected to close in January 2021.

Jeff Eberwein, Chairman of Digirad, noted, “Our Q3 2020 operating and financial results continued to be impacted by the slowdown due to COVID-19. Although doctor offices and hospitals started to return to normal operations in Q3, activity levels remained below normal during the quarter, causing our Healthcare division’s revenue and gross profit to be lower than the prior year quarter. Our Diagnostic Services business has begun to rebound, but our Diagnostic Imaging business has seen a slowdown in camera sales due to purchase delays related to capital funding decisions driven by the pandemic.”

“Our Building & Construction division has significant momentum as shown by Q3 revenue increasing 70% versus the preceding quarter. KBS Builders, Inc. (“KBS”), our modular building manufacturing business focused on the Northeast, increased production at its South Paris, Maine plant in Q3 due to recently won commercial projects. In addition, KBS recently re-opened an ancillary building at its previously idle Oxford, Maine plant to manufacture wall panels for the New England market, creating a new business line for KBS. Because of the strong demand outlook for KBS, we are studying ways to increase our production capacity and are excited about the outlook for this business.”

Mr. Eberwein concluded, “We continue to execute on our HoldCo growth strategy and value enhancement initiatives to maximize stockholder value. Our HoldCo structure allows division CEOs to focus on operations and organic growth while HoldCo management focuses on corporate strategy and capital allocation. In addition to looking for attractive bolt-on acquisitions for our existing operating businesses, we are also looking to create new business divisions in the future through the disciplined acquisition of businesses complementary to our HoldCo structure. Furthermore, the sale of DMS Health, once completed, will substantially improve our balance sheet and better position us to fund high-return internal growth investments and pursue acquisitions.”

Revenue

The Company’s total Q3 2020 revenue increased by 7.1% to $30.4 million from $28.3 million in the third quarter of the prior year. 9M 2020 total revenue of $81.6 million increased by 4.5% from 9M 2019 revenue of $78.0 million.

Revenue in $ thousands	Q3 2020				Q3 2019				% change			9M 2020				9M 2019				% change
Healthcare	$	21,794			$	25,596			(14.9	)%		$	62,441			$	75,306			(17.1	)%
Building & Construction	8,542				2,729				213.0	%		19,061				2,729				598.5	%
Real Estate & Investments	175				43				307.0	%		525				43				1,120.9	%
Corporate, eliminations and other	(158		)		(35		)		351.4	%		(475		)		(35		)		1,257.1	%
Total Revenue	$	30,353			$	28,333			7.1	%		$	81,552			$	78,043			4.5	%

Revenue for the Healthcare division for Q3 2020 decreased from Q3 2019 by $3.8 million due to the slowdown related to the COVID-19 pandemic. Although many doctor offices have reopened and many hospitals have started to once again perform non-emergency procedures, activity remains below pre-COVID levels.

The increase in revenue for the Building & Construction division was due to a full quarter of operational and financial data in Q3 2020 compared to only a partial quarter in 2019 and an increase in KBS activity levels due to $2.2 million revenue recognized from recently won commercial projects. More importantly, in Q3 2020, Building & Construction division revenue increased to $8.5 million from $5.0 million Q2 2020, representing a 70% increase.

Gross Profit

Gross Profit in $ thousands	Q3 2020				Q3 2019				% change			9M 2020				9M 2019				% change
Healthcare	$	3,630			$	4,777			(24.0	)%		$	10,739			$	13,939			(23.0	)%
Building & Construction	1,253				477				162.7	%		2,709				477				467.9	%
Real Estate & Investments	110				(23		)		(578.3	)%		329				(200		)		(264.5	)%
Corporate, eliminations and other	(158		)		(35		)		351.4	%		(475		)		(35		)		1,257.1	%
Total Gross Profit	$	4,835			$	5,196			(6.9	)%		$	13,302			$	14,181			(6.2	)%

Q3 2020 gross profit for the Healthcare division decreased by 24.0% from the prior year’s quarter due to reduced revenue as a result of the COVID-19 pandemic. Additionally, some costs remained fairly constant such as employee costs, insurance, workers compensation, rents, utilities, and repairs and maintenance. Q3 2020 gross profit for Building & Construction division increased by 162.7% from the prior year’s quarter due to a full quarter in 2020 versus a partial quarter in 2019 and increased production activity due to recently won commercial projects.

Operating Expenses

Q3 2020 marketing, sales, general and administrative (MSG&A) expenses increased by 12.5% or $0.6 million from the prior year period, mainly due an increase in expenses from including a full quarter of the Building & Construction division compared to only 20 days in three months ended September 30, 2019. Similarly, our 9M 2020 MSG&A expenses increased by 13.0% or $1.9 million, compared to the same period of 2019 due to an increase of $2.7 million of expenses from the Building & Construction division and offset by a $0.8 million decrease from the Digirad Health division.

Non-GAAP Adjusted EBITDA

Q3 2020 non-GAAP adjusted EBITDA from continuing operations decreased to $1.1 million from $2.0 million in the same quarter of the prior year due to lower revenue generated from high-margin mobile scanning services because of the COVID-19 pandemic. 9M 2020 non-GAAP adjusted EBITDA from continuing operations decreased to $3.4 million, compared to $4.9 million in the prior year period, reflecting COVID-19 impact.

Net Loss

Q3 2020 net loss from continuing operations was $1.8 million, or $0.37 per basic and diluted share, compared to net loss of $1.5 million, or $0.74 per basic and diluted share, in the same period in the prior year. Q3 2020 non-GAAP adjusted net loss from continuing operations was $0.9 million, or $0.19 per basic and diluted share, compared to adjusted net income from continuing operations of $14 thousand, or $0.01 per basic and diluted share, in the prior year period.

9M 2020 net loss from continuing operations was $6.0 million, or $1.83 per basic and diluted share, compared to net loss from continuing operations of $4.6 million, or $2.27 per basic and diluted share, in the same period in the prior year. 9M 2020 non-GAAP adjusted net loss from continuing operations decreased to $2.9 million, or $0.89 per basic and diluted share, compared to adjusted net loss from continuing operations of $0.9 million, or $0.46 per basic and diluted share, in the prior year period.

Operating cash flow

Q3 2020 cash flow from operations was an outflow of $1.9 million, compared to an outflow of $1.1 million for the same period in the prior year due to increased investment in working capital to fund the revenue growth in the Building & Construction division. 9M 2020 cash flow from operations was an outflow of $1.9 million, compared to an outflow of $0.8 million for the prior year period.

Free Cash Flow

The Company calculates a non-GAAP measure of free cash flow. The Company defines free cash flow as net cash provided by (used in) operating activities, less purchases of property and equipment, plus net dispositions of property and equipment, and the acquisition-related net working capital. The Company believes this measure of free cash flow provides management and investors further useful information about cash generation (or use) in our primary operations.

Q3 2020 non-GAAP free cash flow was an outflow of $2.2 million, compared to an inflow of $0.4 million in the same quarter of the prior year period. 9M 2020 non-GAAP free cash flow was an outflow of $2.3 million, compared to an inflow of $1.6 million in the prior year period also due to increased investment in working capital to fund the revenue growth in the Building & Construction division.

Net Operating Loss Carryforward (NOL)

Digirad Corporation has approximately $91.6 million of usable net operating losses (“NOL”) in the U.S. as of year-end 2019, which the Company considers to be a very valuable asset for its stockholders. In order to protect the value of the NOL for all stockholders, the Company has a charter amendment in place limiting beneficial ownership of Digirad common stock to 4.99%. Stockholders who wish to own more than 4.99% of Digirad common stock, or who already own more than 4.99% of Digirad common stock and wish to buy more, may only acquire additional shares with the Board’s prior written approval.

Conference Call Information

A conference call is scheduled for 11:00 a.m. ET (8:00 a.m. PT) on November 13, 2020 to discuss the results and management’s outlook. The call may be accessed by dialing 1-877-407-9039 (international callers: +1-201-689-8470) five minutes prior to the scheduled start time and referencing Digirad. A simultaneous webcast of the call may be accessed online from the Events & Presentations link on the Investor Relations page at http://ir.digirad.com/events-presentations; an archived replay of the webcast will be available within 15 minutes of the end of the conference call.

If you have any questions, either prior to or after our scheduled Earnings Conference call, please e-mail [email protected] or [email protected].

Use of Non-GAAP Financial Measures by Digirad Corporation

This release presents the non-GAAP financial measures “adjusted net income (loss),” “adjusted net income (loss) per basic and diluted share,” “free cash flow”, and “adjusted EBITDA from continuing operations.” The most directly comparable measure for these non-GAAP financial measures are “net income and basic and diluted net income per share”, and “cash flows from operating activities”. The Company has included below unaudited adjusted financial information, which presents the Company’s results of operations after excluding acquired intangible asset amortization, one time transaction costs, litigation costs, restructuring costs, loss on sale of buildings, COVID-19 protection equipment, unrealized gain (loss) on available-for-sale securities, non-recurring costs related to sales and use tax and income tax adjustments. Further excluded in the measure of adjusted EBITDA are interest, taxes, depreciation, amortization, and stock-based compensation.

A discussion of the reasons why management believes that the presentation of non-GAAP financial measures provides useful information to investors regarding Digirad’s financial condition and results of operations is included as Exhibit 99.2 to Digirad’s report on Form 8-K filed with the Securities and Exchange Commission on November 13, 2020.

About Digirad Corporation

Digirad Corporation is a diversified holding company with three divisions: Healthcare, Building & Construction, and Real Estate & Investments.

Healthcare Division (Digirad Health)

Digirad Health designs, manufactures, and distributes diagnostic medical imaging products and services.  Digirad Health operates in three businesses:  Diagnostic Imaging, Diagnostic Services, and Mobile Healthcare. The Diagnostic Imaging business designs, manufactures, and sells proprietary solid-state gamma cameras.  It also services the installed base of these proprietary cameras.  The Diagnostic Services business offers imaging and monitoring services to healthcare providers as an alternative to purchasing equipment or outsourcing procedures.  The Mobile Healthcare business provides contract diagnostic imaging, including computerized tomography (“CT”), magnetic resonance imaging (“MRI”), positron emission tomography (“PET”), PET/CT, and nuclear medicine and healthcare expertise through a convenient, mobile service.

Building & Construction Division (ATRM)

ATRM Holdings, Inc. (“ATRM”) manufactures modular housing units for commercial and residential real estate projects. ATRM operates in two businesses: (i) modular building manufacturing and (ii) structural wall panel and wood foundation manufacturing, including building supply retail operations. The modular building manufacturing business is operated by KBS Builders, Inc. (“KBS”), the structural wall panel and wood foundation manufacturing segment is operated by EdgeBuilder, Inc. (“EdgeBuilder”), and the retail building supplies are sold through Glenbrook Building Supply, Inc. (“Glenbrook”).  KBS, EdgeBuilder, and Glenbrook are wholly-owned subsidiaries of ATRM, which is a wholly-owned subsidiary of Digirad.

Real Estate & Investments Division

This business division manages the Company’s real estate assets and investments.

Forward-Looking Statements

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this release that are not statements of historical fact are hereby identified as “forward-looking statements” for the purpose of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking Statements include, without limitation, statements regarding (i) the plans and objectives of management for future operations, including plans or objectives relating to acquisitions and related integration, development of commercially viable products, novel technologies, and modern applicable services, (ii) projections of income (including income/loss), EBITDA, earnings (including earnings/loss) per share, free cash flow (FCF), capital expenditures, cost reductions, capital structure or other financial items, (iii) the future financial performance of Digirad Corporation or acquisition targets and (iv) the assumptions underlying or relating to any statement described above. Moreover, forward-looking statements necessarily involve assumptions on the Company’s part.  These forward-looking statements generally are identified by the words “believe”, “expect”, “anticipate”, “estimate”, “project”, “intend”, “plan”, “should”, “may”, “will”, “would”, “will be”, “will continue” or similar expressions.  Such forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon the Company’s current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which the Company has no control over.  Actual results and the timing of certain events and circumstances may differ materially from those described above as a result of these risks and uncertainties.  Factors that may influence or contribute to the inaccuracy of forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation, the substantial amount of debt of the Company and the Company’s ability to repay or refinance it or incur additional debt in the future; the Company’s need for a significant amount of cash to service and repay the debt and to pay dividends on the Company’s preferred stock; the restrictions contained in the debt agreements that limit the discretion of management in operating the business; legal, regulatory, political and economic risks in markets and public health crises that reduce economic activity and cause restrictions on operations (including the recent coronavirus COVID-19 outbreak); the length of time associated with servicing customers; losses of significant contracts or failure to get potential contracts being discussed; disruptions in the relationship with third party vendors; accounts receivable turnover; insufficient cash flows and resulting lack of liquidity; the Company’s inability to expand the Company’s business; unfavorable changes in the extensive governmental legislation and regulations governing healthcare providers and the provision of healthcare services and the competitive impact of such changes (including unfavorable changes to reimbursement policies); high costs of regulatory compliance; the liability and compliance costs regarding environmental regulations; the underlying condition of the technology support industry; the lack of product diversification; development and introduction of new technologies and intense competition in the healthcare industry; existing or increased competition; risks to the price and volatility of the Company’s common stock and preferred stock; stock volatility and in liquidity; risks to preferred stockholders of not receiving dividends and risks to the Company’s ability to pursue growth opportunities if the Company continues to pay dividends according to the terms of the Company’s preferred stock; the Company’s ability to execute on its business strategy (including any cost reduction plans); the Company’s failure to realize expected benefits of restructuring and cost-cutting actions; the Company’s ability to preserve and monetize its net operating losses;  risks associated with the Company’s possible pursuit of acquisitions; the Company’s ability to consummate successful acquisitions and execute related integration, including to successfully integrate ATRM’s operations and realize the synergies from the acquisition of ATRM, as well as factors related to the Company’s business (including ATRM) including economic and financial market conditions generally and economic conditions in the Company’s markets; failure to keep pace with evolving technologies and difficulties integrating technologies; system failures; losses of key management personnel and the inability to attract and retain highly qualified management and personnel in the future; and the continued demand for and market acceptance of the Company’s services. For a detailed discussion of cautionary statements and risks that may affect the Company’s future results of operations and financial results, please refer to the Company’s filings with the Securities and Exchange Commission, including, but not limited to, the risk factors in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. This release reflects management’s views as of the date presented.

All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

For more information contact:
Digirad Corporation Jeffrey E. Eberwein Chairman of the Board 203-489-9501 [email protected]		The Equity Group Lena Cati The Equity Group 212-836-9611 [email protected]

(Financial tables follow)

Digirad Corporation

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

(In thousands, except for per share amounts)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
Revenues:
Healthcare		$	21,794			$	25,596			$	62,441			$	75,306
Building & Construction		8,542				2,729				19,061				2,729
Real Estate & Investments		17				8				50				8
Total revenues		30,353				28,333				81,552				78,043
Cost of revenues:
Healthcare		18,164				20,819				51,702				61,367
Building & Construction		7,289				2,252				16,352				2,252
Real Estate & Investments		65				66				196				243
Total cost of revenues		25,518				23,137				68,250				63,862
Gross profit		4,835				5,196				13,302				14,181
Operating expenses:
Marketing, sales and general and administrative expenses		5,566				4,948				16,545				14,648
Amortization of intangible assets		802				399				2,420				965
Merger and finance costs		—				1,058				—				2,058
Total operating expenses		6,368				6,405				18,965				17,671
Loss from operations		(1,533		)		(1,209		)		(5,663		)		(3,490		)
Other income (expense):
Other income (expense), net		135				3				967				(200		)
Interest expense, net		(356		)		(292		)		(1,214		)		(727		)
Loss on sale of building		—				(4		)		—				(236		)
Loss on extinguishment of debt		—				—				—				(151		)
Total other expense		(221		)		(293		)		(247		)		(1,314		)
Loss before income taxes		(1,754		)		(1,502		)		(5,910		)		(4,804		)
Income tax (expense) benefit		(6		)		(2		)		(90		)		168
Net loss from continuing operations		(1,760		)		(1,504		)		(6,000		)		(4,636		)
Net income from discontinued operations		—				—				—				266
Net loss		(1,760		)		(1,504		)		(6,000		)		(4,370		)
Deemed dividend on Series A redeemable preferred stock		(474		)		(106		)		(1,442		)		(106		)
Net loss attributable to common shareholders		$	(2,234	)		$	(1,610	)		$	(7,442	)		$	(4,476	)
Net loss per share, attributable to common shareholders — basic and diluted:		$	(0.47	)		$	(0.79	)		$	(2.27	)		$	(2.20	)
Weighted-average shares outstanding – basic and diluted		4,724				2,046				3,280				2,038
Net loss		$	(1,760	)		$	(1,504	)		$	(6,000	)		$	(4,370	)
Other comprehensive income (loss):
Reclassification of tax provision impact		—				—				—				22
Total other comprehensive income		—				—				—				22
Comprehensive loss		$	(1,760	)		$	(1,504	)		$	(6,000	)		$	(4,348	)

Digirad Corporation

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share amounts)

	September 30, 2020				December 31, 2019
Assets:
Current assets:
Cash and cash equivalents	$	4,267			$	1,821
Restricted cash	169				240
Equity securities	31				26
Accounts receivable, net	15,751				18,571
Inventories, net	9,000				7,097
Other current assets	2,360				1,794
Total current assets	31,578				29,549
Property and equipment, net	18,129				22,138
Operating lease right-of-use assets	4,631				4,827
Intangible assets, net	20,484				22,903
Goodwill	9,978				9,978
Other assets	1,155				1,165
Total assets	$	85,955			$	90,560
Liabilities, Mezzanine Equity and Stockholders’ Equity
Current liabilities:
Accounts payable	$	7,025			$	8,932
Accrued compensation	3,735				4,579
Accrued warranty	237				421
Deferred revenue	2,293				1,786
Short-term debt and current portion of long-term debt	4,260				4,036
Payable to related parties	2,155				1,920
Operating lease liabilities, current portion	1,839				1,866
Other current liabilities	3,355				4,638
Total current liabilities	24,899				28,178
Long-term debt, net of current portion	16,896				17,038
Deferred tax liabilities	90				23
Operating lease liabilities, net of current portion	2,881				3,073
Other liabilities	1,031				1,551
Total liabilities	45,797				49,863
Preferred stock, $0.0001 par value: 10,000,000 shares authorized: 10% Series A Cumulative Redeemable preferred stock, 8,000,000 shares liquidation preference ($10.00 per share), 1,915,637 shares issued or outstanding at September 30, 2020 and December 31, 2019, respectively	21,041				19,602
Stockholders’ equity:
Common stock, $0.0001 par value: 30,000,000 shares authorized; 4,750,951 and 2,050,659 shares issued and outstanding (net of treasury shares) at September 30, 2020 and December 31, 2019, respectively	—				—
Treasury stock, at cost; 258,849 shares at September 30, 2020 and December 31, 2019, respectively	(5,728		)		(5,728		)
Additional paid-in capital	149,374				145,352
Accumulated deficit	(124,529		)		(118,529		)
Total stockholders’ equity	19,117				21,095
Total liabilities, mezzanine equity and stockholders’ equity	$	85,955			$	90,560

Digirad Corporation

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

(In thousands, except per share amounts)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
Net loss from continuing operations		$	(1,760	)		$	(1,504	)		$	(6,000	)		$	(4,636	)
Acquired intangible amortization		802				399				2,420				965
Unrealized gain on equity securities (1)		(53		)		(6		)		(33		)		(29		)
Litigation costs (2)		65				—				244				—
Restructuring costs (3)		—				60				—				122
Loss on extinguishment of debt		—				—				—				151
Loss on sale of buildings		—				4				—				236
Write-off of DMS assets due to litigation (4)		7				—				142				—
Write-off of Star Real Estate Holding assets		—				—				—				143
Transaction cost (5)		—				1,059				115				2,015
Write-off of preferred stock issuance cost (6)		—				—				—				273
COVID-19 protection equipment (7)		17				—				46				—
Sales and use tax costs (8)		—				—				73				—
Income tax expense (benefit)		6				2				90				(168		)
Non-GAAP adjusted net (loss) income from continuing operations		$	(916	)		$	14			$	(2,903	)		$	(928	)
Net loss per diluted share from continuing operations		$	(0.37	)		$	(0.74	)		$	(1.83	)		$	(2.27	)
Acquired intangible amortization		0.17				0.20				0.74				0.47
Unrealized gain on equity securities (1)		(0.01		)		—				(0.01		)		(0.01		)
Litigation costs (2)		0.01				—				0.07				—
Restructuring costs (3)		—				0.03				—				0.06
Loss on extinguishment of debt		—				—				—				0.07
Loss on sale of buildings		—				—				—				0.12
Write-off of DMS assets due to litigation (4)		—				—				0.04				—
Write-off of Star Real Estate Holding assets		—				—				—				0.07
Transaction cost (5)		—				0.52				0.04				0.99
Write-off of preferred stock issuance cost (6)		—				—				—				0.13
COVID-19 Protection Equipment (7)		—				—				0.01				—
Sales and use tax costs (8)		—				—				0.02				—
Income tax expense (benefit)		—				—				0.03				(0.08		)
Non-GAAP adjusted net (loss) income per basic and diluted share from continuing operations (9)		$	(0.19	)		$	0.01			$	(0.89	)		$	(0.46	)

(1) Reflects change in fair value of investments in equity securities.

(2) Reflects one time litigation costs.

(3) Reflects severance related costs.

(4) Reflects write-off of assets related to litigation.

(5) Reflects legal and other costs related to the ATRM merger and HoldCo conversion.

(6) Reflects write-off of costs related to a potential offering of preferred stock the Company did not complete.

(7) Reflects purchases related to COVID-19 Protection Equipment.

(8) Reflects additional sales and use tax as a result of a South Dakota sales tax audit.

(9) Per share amounts are computed independently for each discrete item presented. Therefore, the sum of the quarterly per share amounts will not necessarily equal to the total for the year, and sum of individual items may not equal the total.

Digirad Corporation

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

(In thousands)

For The Three Months Ended September 30, 2020		Diagnostic Services				Diagnostic Imaging				Mobile Healthcare				Building & Construction				Real Estate & Investments				Corporate, eliminations and other				Total
Net income (loss) from continuing operations		$	1,438			$	270			$	174			$	(628	)		$	92			$	(3,106	)		$	(1,760	)
Depreciation and amortization		280				60				1,388				580				65				—				2,373
Interest expense		18				15				6				214				—				103				356
Income tax expense		—				2				—				4				—				—				6
EBITDA from continuing operations		1,736				347				1,568				170				157				(3,003		)		975
Unrealized gain on equity securities (1)		—				—				—				—				—				(53		)		(53		)
Litigation costs (2)		—				—				—				—				—				65				65
Stock-based compensation		—				—				—				—				—				122				122
Write-off of DMS assets due to litigation (4)		—				—				7				—				—				—				7
Personal Protection Equipment (7)		—				17				—				—				—				—				17
Non-GAAP adjusted EBITDA from continuing operations		$	1,736			$	364			$	1,575			$	170			$	157			$	(2,869	)		$	1,133

For The Three Months Ended September 30, 2019		Diagnostic Services				Diagnostic Imaging				Mobile Healthcare				Building & Construction				Real Estate & Investments				Corporate, eliminations and other				Total
Net income (loss) from continuing operations		$	1,319			$	828			$	299			$	(163	)		$	(66	)		$	(3,721	)		$	(1,504	)
Depreciation and amortization		333				64				1,272				124				182				—				1,975
Interest expense		22				—				11				39				—				220				292
Income tax expense		—				—				1				1				—				—				2
EBITDA from continuing operations		1,674				892				1,583				1				116				(3,501		)		765
Unrealized gain on equity securities (1)		—				—				—				—				—				(6		)		(6		)
Restructuring costs (3)		—				—				60				—				—				—				60
Stock-based compensation		—				—				—				—				—				114				114
Loss on sale of buildings		—				—				4				—				—				—				4
Transaction cost (5)		—				—				—				—				—				1,059				1,059
Non-GAAP adjusted EBITDA from continuing operations		$	1,674			$	892			$	1,647			$	1			$	116			$	(2,334	)		$	1,996

For The Nine Months Ended September 30, 2020		Diagnostic Services				Diagnostic Imaging				Mobile Healthcare				Building & Construction				Real Estate & Investments				Corporate, eliminations and other				Total
Net income (loss) from continuing operations		$	2,935			$	2,145			$	(11	)		$	(1,748	)		$	(266	)		$	(9,055	)		$	(6,000	)
Depreciation and amortization		917				189				4,130				1,723				196				—				7,155
Interest expense		56				9				23				708				—				418				1,214
Income tax expense		12				68				4				6				—				—				90
EBITDA from continuing operations		3,920				2,411				4,146				689				(70		)		(8,637		)		2,459
Unrealized gain on equity securities (1)		—				—				—				—				—				(33		)		(33		)
Litigation costs (2)		—				—				—				—				—				244				244
Stock-based compensation		—				—				—				—				—				382				382
Write-off of DMS assets due to litigation (4)		—				—				142				—				—				—				142
Transaction cost (5)		—				—				—				—				—				115				115
Personal Protection Equipment (7)		—				46				—				—				—				—				46
Sales and use Tax (8)		—				—				73				—				—				—				73
Non-GAAP adjusted EBITDA from continuing operations		$	3,920			$	2,457			$	4,361			$	689			$	(70	)		$	(7,929	)		$	3,428

For The Nine Months Ended September 30, 2019		Diagnostic Services				Diagnostic Imaging				Mobile Healthcare				Building & Construction				Real Estate & Investments				Corporate, eliminations and other				Total
Net income (loss) from continuing operations		$	4,942			$	1,919			$	(539	)		$	(128	)		$	(300	)		$	(10,530	)		$	(4,636	)
Depreciation and amortization		942				215				4,137				124				217				—				5,635
Interest expense		63				—				36				39				—				589				727
Income tax expense/(benefit)		—				(98		)		(71		)		1				—				—				(168		)
EBITDA from continuing operations		5,947				2,036				3,563				36				(83		)		(9,941		)		1,558
Unrealized gain on equity securities (1)		—				—				—				—				—				(29		)		(29		)
Restructuring costs (3)		—				—				122				—				—				—				122
Loss on extinguishment of debt		—				151				—				—				—				—				151
Stock-based compensation		—				—				—				—				—				416				416
Loss on sale of buildings		—				—				236				—				—				—				236
Write off of Star Real Estate Holding Assets		—				—				—				—				143				—				143
Transaction cost (5)		—				—				—				—				—				2,015				2,015
Write off of preferred stock issuance cost (6)		—				—				—				—				—				273				273
Non-GAAP adjusted EBITDA from continuing operations		$	5,947			$	2,187			$	3,921			$	36			$	60			$	(7,266	)		$	4,885

(1) Reflects change in fair value of investments in equity securities.

(2) Reflects one-time litigation costs.

(3) Reflects severance related costs.

(4) Reflects write-off of assets related to litigation.

(5) Reflects legal and other costs related to the ATRM merger and HoldCo conversion.

(6) Reflects write-off of costs related to a potential offering of preferred stock the Company did not complete.

(7) Reflects purchases related to COVID-19 Protection Equipment.

(8) Reflects additional sales and use tax as a result of a South Dakota sales tax audit.

Digirad Corporation

Reconciliation of Operating Cash Flow to Free Cash Flow

(Unaudited)

(In thousands)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
Net cash used in operating activities		$	(1,929	)		$	(1,133	)		$	(1,880	)		$	(765	)
Less purchases of property and equipment		(360		)		—				(646		)		(1,182		)
Gross free cash flow		(2,289		)		(1,133		)		(2,526		)		(1,947		)
Plus net dispositions		72				440				156				1,496
Plus merger related net working capital adjustment		—				1,058				115				2,058
Free cash flow		$	(2,217	)		$	365			$	(2,255	)		$	1,607

Digirad Corporation

Supplemental Debt Information

(Unaudited)

(In thousands)

A summary of the Company’s credit facilities and related party notes are as follows (in thousands):

		September 30, 2020							December 31, 2019
		Amount				Weighted-Average Interest Rate			Amount				Weighted-Average Interest Rate
Revolving Credit Facility – Gerber KBS		$	46			6.00	%		$	1,111			7.50	%
Revolving Credit Facility – Premier		—				—	%		2,925				6.25	%
Total Short-Term Revolving Credit Facilities		$	46			6.00	%		$	4,036			6.59	%
Revolving Credit Facility – SNB		$	10,849			2.65	%		$	17,038			4.26	%
Revolving Credit Facility – Gerber EBGL		1,257				6.00	%		—				—	%
Total Long-Term Revolving Credit Facilities		$	12,106			3.00	%		$	17,038			4.26	%
LSV Co-Invest I Promissory Note (“January Note”)		$	668			12.00	%		$	595			12.00	%
LSV Co-Invest I Promissory Note (“June Note”)		1,150				12.00	%		1,023				12.00	%
LSVM Note		337				12.00	%		302				12.00	%
Total Notes Payable From Related Parties		$	2,155			12.00	%		$	1,920			12.00	%
Short Term Paycheck Protection Program Notes		$	3,625			1.00	%		$	—			—	%
Long Term Paycheck Protection Program Notes		3,023				1.00	%		—				—	%
Total Paycheck Protection Program Notes		$	6,648			1.00	%		$	—			—	%

Term Loan Facilities

The following table presents the Star and Premier term loans balance net of unamortized debt issuance costs as of September 30, 2020 (in thousands):

	September 30, 2020
	Amount
Gerber – Star Term Loan	$	1,900
Premier – Term Loan	819
Total Principal	2,719
Unamortized debt issuance costs	(363		)
Total	$	2,356

Digirad Corporation

Supplemental Segment Information

(Unaudited)

(In thousands)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
Revenue by segment
Diagnostic Services		$	10,711			$	11,670			$	28,665			$	35,714
Diagnostic Imaging		2,048				3,351				7,242				8,923
Mobile Healthcare		9,035				10,575				26,534				30,669
Building & Construction		8,542				2,729				19,061				2,729
Real Estate & Investments		175				43				525				43
Corporate, eliminations and other		(158		)		(35		)		(475		)		(35		)
Consolidated revenue		$	30,353			$	28,333			$	81,552			$	78,043
Gross profit by segment:
Diagnostic Services		$	2,076			$	2,162			$	5,034			$	7,548
Diagnostic Imaging		399				1,174				2,500				3,040
Mobile Healthcare		1,155				1,441				3,205				3,351
Building & Construction		1,253				477				2,709				477
Real Estate & Investments		110				(23		)		329				(200		)
Corporate, eliminations and other		(158		)		(35		)		(475		)		(35		)
Consolidated gross profit		$	4,835			$	5,196			$	13,302			$	14,181
Income (loss) from continuing operations by segment:
Diagnostic Services		$	1,424			$	1,304			$	2,904			$	4,914
Diagnostic Imaging		138				755				1,592				1,662
Mobile Healthcare		176				310				5				(357		)
Building & Construction		(496		)		(125		)		(2,445		)		(125		)
Real Estate & Investments		93				(61		)		209				(260		)
Corporate, eliminations and other		(158		)		(35		)		(475		)		(35		)
Unallocated corporate and other expenses		(2,710		)		(2,299		)		(7,453		)		(7,231		)
Segment loss from operations		(1,533		)		(151		)		(5,663		)		(1,432		)
Merger and finance costs		—				(1,058		)		—				(2,058		)
Consolidated loss from operations		$	(1,533	)		$	(1,209	)		$	(5,663	)		$	(3,490	)
Depreciation and amortization by segment:
Diagnostic Services		$	280			$	333			$	917			$	942
Diagnostic Imaging		60				64				189				215
Mobile Healthcare		1,388				1,272				4,130				4,137
Building & Construction		580				124				1,723				124
Real Estate & Investments		65				208				196				243
Total depreciation and amortization		$	2,373			$	2,001			$	7,155			$	5,661

ANN ARBOR, Mich., Nov. 13, 2020 (GLOBE NEWSWIRE) — Zomedica Corp. (NYSE American: ZOM) (“Zomedica” or the “Company”), a veterinary health company creating point-of-care diagnostics products for dogs and cats, today announced that it expects to begin commercialization of its TRUFORMA™ point-of-care diagnostic platform on March 30, 2021.

Protected by approximately 70 issued and pending patents, the TRUFORMA platform uses Bulk Acoustic Wave (“BAW”) technology, developed by Qorvo (NASDAQ: QRVO), to provide a non-optical and fluorescence-free detection system for use at the point-of-care. BAW technology, also used in cell phones and in the world’s most advanced radar and communications systems, is an extremely reliable and precise technology. Zomedica believes that the TRUFORMA platform represents the first use of BAW technology in disorder and disease-state diagnostics.

“It certainly is a pleasure to be able to deliver such good news for our shareholders, employees, partners and, especially, the veterinarians whom we serve,” commented Robert Cohen, Interim Chief Executive Officer of Zomedica. “It is a credit to all of our employees and their laser focus on advancing TRUFORMA over the last many months that we are able to move into this final phase as we approach the commercial availability of our first product. I very much look forward to being able to report our first sale following launch.”

The diagnostics segment of the global companion animal market is expected to reach $2.8 billion by 2024 from $1.7 billion in 2019, at a 9.8% CAGR. Despite the effects of COVID-19 on the economy, veterinary practice financial data estimates show that revenue in the United States for August 2020 was up 18 percent over July 2019.

Zomedica has five initial assays under development, comprising two panels – one each to detect thyroid and adrenal disease. The Company has completed verification for canine and feline TSH, canine and feline tT4, canine fT4 and canine cortisol assays, and validation efforts are underway for all of these assays. Results of the verifications have been encouraging:

• The combined dynamic range of the canine and feline TRUFORMA TSH assay is 0.008-10.0 ng/mL compared to the Siemens IMMULITE® Canine TSH assay dynamic range of 0.03-12 ng/mL. This assay will enable quantification of samples with low levels of TSH, which is necessary to discriminate normal and hyperthyroid feline samples. Verification data comparing the canine TRUFORMA TSH assay to the Siemens IMMULITE Canine TSH assay showed high correlation (R=0.99). A feline-optimized TSH assay is not commercially available.
• The combined dynamic range of the canine and feline TRUFORMA tT4 assay is 0.45-30.0 µg/dL compared to the Siemens IMMULITE tT4 assay dynamic range of 0.5-15 µg/dL. Verification data comparing the canine and feline TRUFORMA tT4 assay to the Siemens IMMULITE Canine tT4 reference lab assay showed high correlation (R=0.94).
• The dynamic range of the canine TRUFORMA fT4 assay is 7.4-77.2 pmol/L compared to the Siemens IMMULITE Veterinary Free T4 assay dynamic range of 3.9-77.2 pmol/L. Verification data comparing the canine TRUFORMA fT4 assay to the Siemens IMMULITE Veterinary Free T4 reference lab assay showed high correlation (R=0.92). We believe that this will be the first fT4 assay available at the point-of-care.
• The dynamic range of the canine TRUFORMA cortisol assay is 0.35-24.0 µg/dL compared to the Siemens IMMULITE Cortisol assay dynamic range of 1-50 µg/dL. Verification data comparing the canine TRUFORMA cortisol assay to the Siemens IMMULITE Cortisol reference lab assay showed high correlation (R=0.97).
• The feasibility and design phases of the TRUFORMA ACTH assay have been completed, with verification expected to begin in the near future.

Stephanie Morley, President & Chief Medical Officer of Zomedica, commented: “Setting the date for the availability of TRUFORMA is the culmination of a dream for me. We set out to develop a product that could provide the accuracy of the reference lab and the convenience of point-of-care for the veterinary community. As a vet myself, I know the value of such a product to a veterinary practice. The fact that some of our assays under development not only are believed to be the first ever developed for use at the point-of-care, but also the first ever available in veterinary medicine, is expected to be an exciting contribution to the health and treatment of our pets.”

Zomedica is in the process of building its sales organization in preparation for commercial launch. As previously reported, this organization will include distributors, distributor support representatives, direct sales representatives and professional service veterinarians. The entire organization will be supported by MyZomedica, the Company’s online portal, which will streamline customer communication and digital touchpoints, giving access to the Zomedica support team and resources. As previously announced, TRUFORMA can be installed entirely remotely, which should help limit the impact of the COVID-19 pandemic on instrument installations.

About Zomedica

Based in Ann Arbor, Michigan, Zomedica (NYSE American: ZOM) is a veterinary health company creating products for dogs and cats by focusing on the unmet needs of clinical veterinarians. Zomedica’s product portfolio will include innovative diagnostics and medical devices that emphasize patient health and practice health. It is Zomedica’s mission to provide veterinarians the opportunity to increase productivity and grow revenue while better serving the animals in their care. For more information, visit www.ZOMEDICA.com.

Follow Zomedica

• Email Alerts: http://investors.zomedica.com
• LinkedIn: https://www.linkedin.com/company/zomedica
• Facebook: https://www.facebook.com/zomedica/
• Twitter: https://twitter.com/zomedica

Reader Advisory

Except for statements of historical fact, this news release contains certain “forward-looking information” or “forward-looking statements” (collectively, “forward-looking information”) within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur and include statements relating to our expectations regarding the public offering. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.

Forward-looking information is based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: uncertainty as to whether our strategies and business plans will yield the expected benefits; uncertainty as to the timing and results of development work and verification and validation studies; uncertainty as to the timing and results of commercialization efforts; uncertainty as to our ability to supply equipment and assays in response to customer demand; uncertainty as to the likelihood and timing of any required regulatory approvals, availability and cost of capital; the ability to identify and develop and achieve commercial success for new products and technologies; veterinary acceptance of our products; competition from related products; the level of expenditures necessary to maintain and improve the quality of products and services; changes in technology and changes in laws and regulations; our ability to secure and maintain strategic relationships; performance by our strategic partners of our obligations under our commercial agreements, including product manufacturing obligations; risks pertaining to permits and licensing, intellectual property infringement risks, risks relating to any required clinical trials and regulatory approvals, risks relating to the safety and efficacy of our products, the use of our products, intellectual property protection, risks related to the COVID-19 pandemic and its impact upon our business operations generally, including our ability to develop and commercialize our products, and the other risk factors disclosed in our filings with the SEC and under our profile on SEDAR at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.

Investor Relations Contact:

PCG Advisory Group
Kirin Smith, COO
[email protected]
+1 646.863.6519

– Initiated Phase 1 clinical trial for lead wholly owned CD47 checkpoint inhibitor, SL-172154 (SIRPα-Fc-CD40L), for the treatment of ovarian cancer –

–
C
ompleted initial public offering
in October 2020
raising
approximately
$232.3 million in gross proceeds and extending cash runway
through
2024 –

AUSTIN, TX and DURHAM, NC, Nov. 13, 2020 (GLOBE NEWSWIRE) — Shattuck Labs, Inc. (Shattuck) (NASDAQ: STTK), a clinical-stage biotechnology company pioneering the development of bi-functional fusion proteins as a new class of biologic medicine for the treatment of patients with cancer and autoimmune disease, today reported financial results for the third quarter ended September 30, 2020 and provided recent business highlights.

“Shattuck has pioneered the development of bi-functional fusion proteins, and it is a testament to our team to be running multiple clinical trials in just four years from our founding,” said Taylor Schreiber, M.D., Ph.D., and Chief Executive Officer of Shattuck. “This has been a transformative year for Shattuck, and our additional clinical trials and support from a base of world-class investors was enabled by the clinical progress we have made to date. Shattuck now has the balance sheet and vast pipeline to support years of continued growth and execution, to aggressively develop SL-172154 as a differentiated asset in the CD47 field and to continue delivering on our partnership with Takeda Pharmaceuticals on SL-279252.”

Recent Business Highlights

• Initiated Enrollment of
  Phase 1 Clinical Trial of SL-
  172154
  : In August 2020, Shattuck announced the initiation of a Phase 1 clinical trial for its lead wholly owned asset SL-172154, the second clinical program to advance from its proprietary Agonist Redirected Checkpoint (ARC) platform. SL-172154 is a bi-functional fusion protein that simultaneously blocks the CD47/SIRPα checkpoint and activates the tumor necrosis factor (TNF) costimulatory receptor CD40. The Phase 1 trial will initially evaluate the safety, tolerability, and anti-tumor effects of SL-172154 in patients with ovarian cancer. Initial Phase 1 dose escalation data from the trial are expected in the second half of 2021.

• Continued Enrollment of
  Phase 1 Clinical Trial of SL-279252: The Company is continuing to enroll patients in its Phase 1 clinical trial evaluating SL-279252, a bi-functional fusion protein that simultaneously inhibits the PD-1/PD-L1 interaction and stimulates the OX40 receptor pathway in immune cells. The Phase 1 trial is an open label, multi-center, dose escalation, and dose expansion study to evaluate the safety, tolerability, PK, anti-tumor activity, and pharmacodynamics effects of SL-279252 in patients with advanced solid tumors or lymphomas. SL-279252 is currently being developed in collaboration with Takeda Pharmaceuticals. Phase 1 dose escalation data from the trial are expected in the second half of 2021.

• Completed
  I
  nitial
  P
  ublic
  O
  ffering
  (IPO)
  : In October 2020, Shattuck completed an upsized IPO of common stock at $17.00 per share, raising gross proceeds of approximately $232.3 million, before deducting underwriting discounts, commissions, and estimated offering costs.

• Present
  ed
  at TIGIT Therapies Summit: In October 2020, Taylor Schreiber, M.D., Ph.D., Chief Executive Officer of Shattuck, presented at the TIGIT Therapies Summit on exploring the novel method of modulating T cell function using TIGIT inhibition and presenting initial preclinical data of SL-9258 (TIGIT-Fc-LIGHT), a bi-functional fusion protein that simultaneously blocks the TIGIT/PVR checkpoint and activates the TNF costimulatory receptor known as LIGHT.

• Advance
  d
  GADLEN Platform: The Company continues to advance its deep preclinical pipeline, including a second proprietary platform, the Gamma Delta T Cell Engager (GADLEN™) platform. In November 2020, Shattuck presented an update on the progress of the GADLEN platform at the Society for Immunotherapy of Cancer (SITC) Meeting.

• Appointed New Director: In July 2020, Helen M. Boudreau was appointed to Shattuck’s Board of Directors and currently serves as the Audit Committee chair and a member of the Compensation Committee. Ms. Boudreau brings over 30 years of corporate and financial expertise in the life sciences and healthcare industries.

Third Quarter 2020 Financial Results

• Cash
  and Investments
  : As of September 30, 2020, cash, cash equivalents, and short-term investments were $134.9 million, which does not include total net proceeds of approximately $213.5 million from the Company’s IPO completed in October 2020.

• Research and Development (
  R&D
  )
  Expenses: R&D expenses were $11.8 million for the third quarter of 2020, as compared to $7.9 million for the third quarter of 2019.

• General and Administrative (
  G&A
  )
  Expenses: G&A expenses were $2.5 million for the third quarter of 2020, as compared to $1.4 million for the third quarter of 2019.

• Net Loss: Net loss was $11.8 million for the third quarter of 2020, or $1.54 per basic and diluted share, as compared to a net loss of $7.3 million for the third quarter of 2019, or $0.96 per basic and diluted share.

Financial Guidance

The Company believes its cash, cash equivalents, and short-term investments, together with the net proceeds of its successful IPO on The Nasdaq Global Select Market will be sufficient to fund its anticipated operations through 2024, which is beyond results from its Phase 1 clinical trials of SL-172154 and SL-279252. This cash runway guidance is based on the Company’s current operational plans and excludes any additional funding that may be received or business development activities that may be undertaken.

About Shattuck Labs, Inc.

Shattuck is a clinical-stage biotechnology company pioneering the development of bi-functional fusion proteins as a new class of biologic medicine for the treatment of patients with cancer and autoimmune disease. Compounds derived from Shattuck’s proprietary Agonist Redirected Checkpoint, ARC^®, platform simultaneously inhibit checkpoint molecules and activate costimulatory molecules within a single therapeutic. The company’s lead wholly owned program, SL-172154 (SIRPα-Fc-CD40L), which is designed to block the CD47 immune checkpoint and simultaneously agonize the CD40 pathway, is being evaluated in a Phase 1 trial. A second compound, SL-279252 (PD1-Fc-OX40L), is being evaluated in a Phase 1 trial in collaboration with Takeda Pharmaceuticals. Additionally, the company is advancing a proprietary Gamma Delta T Cell Engager, GADLEN™, platform, which is designed to bridge gamma delta T cells to tumor antigens for the treatment of patients with cancer. Shattuck has offices in both Austin, Texas and Durham, North Carolina. For more information, please visit: www.ShattuckLabs.com.

Forward
–
Looking Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the federal securities laws, including, but not limited to, our expectations regarding plans for our preclinical studies, clinical trials and research and development programs, the anticipated timing of the results from those studies and trials, and expectations regarding the time period over which our capital resources will be sufficient to fund our anticipated operations. Words such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “develop,” “plan” or the negative of these terms, and similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. While we believe these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties (including, without limitation, those set forth in our filings with the U.S. Securities and Exchange Commission (the “SEC”)), many of which are beyond our control and subject to change. Actual results could be materially different. Risks and uncertainties include: the recent and ongoing COVID-19 pandemic and associated shelter-in-place orders; expectations regarding the initiation, progress, and expected results of our preclinical studies, clinical trials and research and development programs; expectations regarding the timing, completion and outcome of our Phase 1 clinical trials; the unpredictable relationship between preclinical study results and clinical study results; the timing or likelihood of regulatory filings and approvals; liquidity and capital resources; and other risks and uncertainties identified in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, to be filed on November 13, 2020 with the SEC. We claim the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We expressly disclaim any obligation to update or alter any statements whether as a result of new information, future events or otherwise, except as required by law.

Investor
Contact:

Conor Richardson
Director of Finance
Shattuck Labs, Inc.
[email protected]

Media
Contact:

Stephanie Ascher
Managing Director
Stern Investor Relations, Inc.
[email protected]

Financials

Shattuck Labs, Inc.
Condensed Balance Sheets
(Unaudited)
(In thousands, except share and per share amounts)
			September 30, 2020				December 31, 2019
Assets
Current assets:
	Cash and cash equivalents		$	128,600			$	7,013
	Short-term investments			6,339				32,074
	Prepaid expenses and other current assets			7,315				3,355
		Total current assets		142,254				42,442
Property and equipment, net				2,515				2,437
Other assets				89				90
		Total assets	$	144,858			$	44,969
Liabilities, redeemable convertible preferred stock and stockholder’ deficit
Current liabilities:
	Accounts payable		$	1,350			$	3,051
	Accrued expenses			6,518				4,039
	Deferred revenue – related party			8,613				12,894
		Total current liabilities		16,481				19,984
Deferred revenue – related party net of current portion				19,722				9,571
Deferred rent				911				898
		Total liabilities		37,114				30,453
Series A redeemable convertible preferred stock				49,064				49,064
Series B redeemable convertible preferred stock				34,427				–
Series B-1 redeemable convertible preferred stock				82,613				–
Stockholders’ deficit:
	Common stock			1				1
	Additional paid-in capital			1,730				887
	Accumulated other comprehensive income (loss)			(10	)			54
	Accumulated deficit			(60,081	)			(35,490	)
		Total stockholders’ deficit		(58,360	)			(34,548	)
		Total liabilities, redeemable convertible preferred stock and stockholders’ deficit	$	144,858			$	44,969

Shattuck Labs, Inc.
Condensed Statements of Operations
(Unaudited)
(In thousands, except share and per share amounts)
			Three Months Ended September 30,								Nine Months Ended September 30,
				2020				2019				2020				2019
Collaboration revenue – related party			$	2,435			$	1,784			$	8,592			$	7,066
Operating expenses:
	Research and development			11,804				7,945				27,696				20,447
	General and administrative			2,470				1,366				5,816				4,062
		Expense from operations		14,274				9,311				33,512				24,509
Loss from operations				(11,839	)			(7,527	)			(24,920	)			(17,443	)
Other income (expense):
	Interest income			86				279				474				902
	Other			(76	)			(31	)			(145	)			(72	)
		Total other income		10				248				329				830
Net loss			$	(11,829	)		$	(7,279	)		$	(24,591	)		$	(16,613	)
Unrealized gain (loss) on short-term investments				(28	)			10				(64	)			119
Comprehensive loss			$	(11,857	)		$	(7,269	)		$	(24,655	)		$	(16,494	)
Net loss per share – basic and diluted			$	(1.54	)		$	(0.96	)		$	(3.21	)		$	(2.20	)
Weighted-average ordinary shares used in computing net loss per share attributable to ordinary shareholders—basic and diluted				7,700,371				7,572,746				7,656,077				7,543,831

SANTA BARBARA, CA , Nov. 13, 2020 (GLOBE NEWSWIRE) — SunHydrogen, Inc. (OTC:HYSR), the developer of a breakthrough technology to produce renewable hydrogen using sunlight and water, today has announced an adjustment to the manufacturing process that will extend the lifetime of the hydrogen producing solar cell assembly by using a new combination of polymers to protect the device from photocorrosion of the solar cells. While the upgrade has caused a delay in production, the outcome has been a considerably improved product and process.   The 100 demonstration panels are now back in full manufacturing mode.

A new combination of materials and methods were identified through engineering of the manufacturing process.  Previously, in August, the company disclosed that there would be a minor design change in the housing to better accommodate the fittings for hydrogen release. The minor design change was made and the fittings suitable for thin devices were identified and ordered. Currently the solar cells are processed using a custom-built system for punching silicon solar cells without shorting them, which is one of the most difficult parts of manufacturing the demonstration devices. The application of protective coatings and catalysts then protect the solar cells from corrosion.  The improvement of the manufacturing process has been invaluable to the Company as additional investment and focus is applied to the accelerated development of its breakthrough nanotechnology hydrogen generation technology.

“We are extremely pleased with the improvements discovered as we work through production. The changes will ensure longer lifetimes for our devices,” said Dr. Joun Lee, CTO of SunHydrogen.  “This is exactly how the process is supposed to work in development.   Our technical team and the manufacturer work closely to improve the product, reduce its cost and effectively optimize the process.”

About SunHydrogen, Inc.

SunHydrogen is developing a breakthrough, low-cost technology to make renewable hydrogen using sunlight and any source of water, including seawater and wastewater. Unlike hydrocarbon fuels, such as oil, coal and natural gas, where carbon dioxide and other contaminants are released into the atmosphere when used, hydrogen fuel usage produces pure water as the only byproduct. By optimizing the science of water electrolysis at the nano-level, our low-cost nanoparticles mimic photosynthesis to efficiently use sunlight to separate hydrogen from water, to produce environmentally friendly renewable hydrogen. Using our low-cost method to produce renewable hydrogen, we intend to enable a world of distributed hydrogen production for renewable electricity and hydrogen fuel cell vehicles.  To learn more about SunHydrogen, please visit our website at www.SunHydrogen.com.

Safe Harbor Statement

Matters discussed in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words “anticipate,” “believe,” “estimate,” “may,” “intend,” “expect” and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein, and while expected, there is no guarantee that we will attain the aforementioned anticipated developmental milestones. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: our ability to successfully negotiate agreements with suppliers and manufacturers of its hydrogen generation panels, our ability to procure project financing, our ability to retain the service of a qualified engineering firm to design and build a pilot plant, our ability to secure an agreement to with a partner with us for the pilot plant, the impact of economic, competitive and other factors affecting the Company and its operations, markets, product, and distributor performance, the impact on the national and local economies resulting from terrorist actions, and U.S. actions subsequently; and other factors detailed in reports filed by the Company.

Press Contact:
[email protected]