Market Newsdesk

DENVER, Nov. 12, 2020 (GLOBE NEWSWIRE) — NewAge, Inc. (Nasdaq: NBEV), the Colorado-based social selling and distribution company, today announced that it will present and meet with investors at the Virtual Fall Investor Summit. The conference is being held November 16-18, 2020, virtually.

The Company is scheduled to present on Tuesday, November 17, 2020 at 7:30 a.m. MT/9:30 a.m. ET. A webcast of the live presentation will be available on the Investors section of the Company’s website at www.newage.com or at https://www.webcaster4.com/Webcast/Page/2038/38387. The webcast will be archived for approximately 30 days.

The presentation to be referenced at the conference will also be available on the Investors section of the Company’s website at www.newage.com.

About


NewAge, Inc.


(NASDAQ:


NBEV


)


NewAge is a Colorado-based organic and healthy products company dedicated to inspiring and educating consumers to “Live Healthy.” The Company is an omni-channel distribution company with access to traditional retail, e-commerce, direct-to-consumer, and medical channels across more than 75 countries worldwide when combined with ARIIX. NewAge markets a portfolio of differentiated healthy functional brands in three category platforms including Health & Wellness, Healthy Appearance, and Nutritional Performance. The Company operates the websites newage.com, noninewage.com, and a number of other individual brand websites.

NewAge has announced a transaction with ARIIX LLC. Once the ARIIX transaction is completed, we will be the only omni-channel company with access to traditional retail, e-commerce, direct-to-consumer, and other channels across more than 75 countries worldwide, with a network of over 400,000 exclusive independent product consultants, representatives, and affiliates around the globe. After the transaction closes, NewAge will market a portfolio of better-for-you products along with the companies, ARIIX, ZENNOA, Shannen, MaVie, and Limu in healthy hydration and wellness, healthy appearance, and nutritional performance platforms. The Company announced NewAge’s entry into a definitive agreement to acquire ARIIX and four other e-commerce/direct selling companies on July 20, 2020. The Company entered into an amended and restated definitive agreement on September 30, 2020. This transaction is anticipated to close by the end of November 2020.

For investor inquiries about NewAge please contact:

NewAge Investor Relations:

Riley Timmer
Vice President, Investor Relations
Tel: 1-801-870-8685
[email protected]

Investor Relations Counsel:

John Mills/Scott Van Winkle
ICR – Strategic Communications and Advisory
Tel: 1-646-277-1254/1-617-956-6736
[email protected]

NewAge, Inc.
:

Gregory A. Gould
Chief Financial Officer
Tel: 1-303-566-3030
[email protected]

COS COB, Conn., Nov. 12, 2020 (GLOBE NEWSWIRE) — Chicken Soup for the Soul Entertainment Inc. (Nasdaq: CSSE), one of the largest operators of streaming advertising-supported video-on-demand (AVOD) networks, today announced the 30-day extension of a key deadline related to Sony Pictures Television’s (SPT) Crackle Plus ownership option.

Pursuant to the Crackle acquisition agreement in May of 2019, Sony Pictures Television was required to decide by November 14, 2020 whether to convert its current ownership of Chicken Soup for the Soul Entertainment’s Crackle Plus subsidiary into 49% of the common ownership of Crackle Plus or into $40 million of Chicken Soup for the Soul Entertainment’s preferred shares. SPT and the company have mutually agreed to an extension to consider these options and potential alternatives, and SPT will now be required to make a decision by December 14, 2020.

“We have always seen a path to an expanded relationship with Sony and we are looking forward to taking this additional time to evaluate opportunities to strengthen our partnership,” said William J. Rouhana Jr, Chairman & CEO of Chicken Soup for the Soul Entertainment.

ABOUT CHICKEN SOUP FOR THE SOUL ENTERTAINMENT
Chicken Soup for the Soul Entertainment, Inc. (Nasdaq: CSSE) operates streaming video-on-demand networks (VOD). The company owns a majority stake in Crackle Plus, a company formed with Sony Pictures Television, which owns and operates a variety of ad-supported and subscription-based VOD networks including Crackle, Popcornflix, Popcornflix Kids, Truli, Pivotshare, Españolflix and FrightPix. The company also acquires and distributes video content through its Screen Media subsidiary and produces original long and short-form content through Landmark Studio Group, its Chicken Soup for the Soul Originals division and APlus.com. Chicken Soup for the Soul Entertainment is a subsidiary of Chicken Soup for the Soul, LLC, which publishes the famous book series and produces super-premium pet food under the Chicken Soup for the Soul brand name.

FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements that involve risks and uncertainties. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to risks (including those set forth in the Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 30, 2020) and uncertainties which could cause actual results to differ from the forward-looking statements. The company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Investors should realize that if our underlying assumptions for the projections contained herein prove inaccurate or that known or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections.

INVESTOR RELATIONS

Taylor Krafchik
Ellipsis
[email protected]
(646) 776-0886

MEDIA CONTACT

Kate Barrette
RooneyPartners LLC
[email protected]
(212) 223-0561

DetermaRx
™
receives final CMS pricing and
records
first
full
quarter
with Medicare
revenues
;
more than doubles second quarter volumes
with
adoption at NCCN and NCI designated cancer centers

DetermaIO
™
selected
for use in
checkpoint inhibitor clinical trial
;
will
generat
e
near term pharmaceutical services revenue
and solidifies use in
triple negative breast cancer
research

TheraSure

^TM

-CNI MONITOR l
icensing and
collaboration agreement
with Chronix
will add
a fourth engine
of
potential
revenue growth
in blood
–
based therapy monitoring
and
provide
access to
EU
lab network
for
DetermaRx

Conference
C
all
T
oday,
November 12
,
at
4
:30
P
M
E
D
T

IRVINE, Calif., Nov. 12, 2020 (GLOBE NEWSWIRE) — Oncocyte Corporation (NYSE American: OCX), a molecular diagnostics company with a mission to provide actionable answers at critical decision points across the cancer care continuum, today reported financial results for the third quarter and nine months ended September 30, 2020, and provided a corporate update.

“I am very proud of our progress over the past year as we have established four growth engines to drive revenue that will help us reduce our cash burn as we progress in our vision to become a leader in molecular diagnostics for oncology and immunotherapy,” said Ron Andrews, Chief Executive Officer of Oncocyte. “This has been a quarter of growth and milestone achievements, solidifying our position as an innovator in the advancement of molecular diagnostics for early stage lung cancer. We have successfully repositioned the company over the past year by refining and expanding our suite of offerings and establishing multiple independent revenue growth engines: DetermaRx™, DetermaIO™, immunotherapy response monitoring, and Pharma Services, all with the potential to support our long-term growth and value creation. DetermaRx and pharma services are already generating revenue, and with our first agreement to utilize DetermaIO as a predictive biomarker in a clinical trial, DetermaIO is poised to become revenue generating before year end. The third quarter was a terrific period for DetermaRx as we received our final pricing from CMS, allowing us to bill and collect our first Medicare revenues. We continue to build upon our strong scientific foundation with collaborators publishing prospective data that further demonstrate that treatment decisions informed by DetermaRx significantly improve lung cancer patient survival. DetermaRx’s adoption at leading cancer centers and its rapid growth, with test volume more than doubling from the second quarter, reflects stakeholders’ recognition of the test’s significant clinical utility.”

Mr. Andrews added, “We also continue to expand our reach in the large and rapidly growing immunotherapy space with our second growth engine, DetermaIO™, our gene expression test currently available for research use only, which identifies patients most likely to respond to therapy. Our recent presentation at the Society for Immunotherapy of Cancer Annual Meeting demonstrates the power of DetermaIO to identify patients who are not likely to respond to checkpoint inhibitors and may require alternative or combinatorial therapy, which significantly expands the utility of the DetermaIO test. We believe that DetermaIO’s inclusion as a predictive biomarker in an international investigator-sponsored triple negative breast cancer clinical trial has increased our visibility among academic and pharma trial groups over the last few months, and we remain on pace to achieve our goal of a U.S. clinical launch in the second half of 2021. In addition, studies such as this generate immediate revenue through our Pharma Services business which will continue to grow as we secure additional contracts with pharmaceutical and molecular diagnostic platform companies. Our newly announced immunotherapy response monitoring opportunity, anticipated to be available in our Pharma Services arsenal in the first half of 2021, launches Oncocyte’s differentiated and comprehensive offering for immune therapy diagnostics. Finally, we have solid momentum in our Pharma Services business and expect to exit 2020 ahead of our $2 million of committed projects goal for the year and expect the business to generate positive operating margin in 2021. Overall, we are on track across all our major milestones despite the continued headwind of the ongoing pandemic which is a testimony to the dedication of the Oncocyte team.”  

Recent
Corporate
Highlights

DetermaRx

• Medicare coverage policy established for DetermaRx, a new class of predictive tests, based on compelling clinical evidence that positions DetermaRx as the first and only test of its kind for early-stage non-small cell lung cancer (NSCLC)
• Received final pricing decision from Centers for Medicare and Medicaid Services (CMS) with pricing in line with comparable high-value molecular tests for oncology indications
• Continued rapid commercial growth and adoption through Q3:
  —  Testing volume more than doubled, from 64 billable samples in Q2, to 175 in Q3
  —  Maintained physician re-order rate of approximately 60 percent
  —  Increased onboarded hospitals from 36 in Q2 to 67 in Q3, including prestigious National Comprehensive Cancer Network (NCCN) and National Cancer Institute (NCI) designated cancer centers
  —  Increased adoption at major healthcare systems including HCA Healthcare, Cancer Treatment Centers of America (CTCA), Florida Cancer Specialists (FCS), Scripps Health, and Providence Cancer Institute
  —  Test added to “standard of care menu” at an NCI cancer center and at FCS
• International expansion continued with Mexico, Columbia, Brazil, and Germany being added to our current network of distribution and commercial partners in Israel, India, the Middle East and Africa
• Presented new prospective survival data at the IASLC 2020 North America Conference on Lung Cancer demonstrating DetermaRx informed treatment significantly improves lung cancer patient survival
• Presented data demonstrating that combining DetermaRx with EGFR mutation status may help inform optimal treatment strategies for NSCLC patients who are EGFR-mutation-positive.   Oncocyte is now offering EGFR mutation testing and DetermaRx from a single patient sample to provide an integrated solution for patients and physicians
• Continued successful physician engagement with our webinar series with over 250 healthcare professional participants in online physician education programs in Q3 featuring renowned lung cancer experts Dr. David Gandara, Dr. Johannes Kratz, and Dr. Gavitt Woodard

DetermaIO

• DetermaIO selected as a predictive biomarker in the NeoTRIPaPDL1 international investigator-sponsored trial for an immune-checkpoint inhibitor (ICI)
  —  Trial will evaluate DetermaIO as biomarker for a neoadjuvant (pre-surgical) ICI indication in patients with triple negative breast cancer (TNBC)
  —  Collaboration expected to generate near-term pharma services revenue, with a path to U.S. clinical launch in 2021

TheraSure™
-CNI MONITOR
Blood
–
based
Imm
une Therapy
monitoring
test

• Announced agreement to license TheraSure^TM-CNI MONITOR clinical assay from Chronix Biomedical. The blood-based assay uses copy number instability (CNI) to monitor patients’ response to immunotherapy treatments, potentially across a range of cancers  
• License agreement will expand Oncocyte’s suite of immunotherapy products to include response monitoring. Coordinating response monitoring with DetermaIO’s response prediction capability could create the first integrated solution for immunotherapy treatment selection and monitoring. Tech transfer to begin in Q1 2021  

Pharma Services

• Announced strategic alliance with the Guardian Research Network® (GRN) to establish an integrated platform for precision medicine clinical trials, combining Oncocyte’s proprietary molecular tests and fully certified pharma services lab with GRN’s nationwide consortium of 150 hospitals, clinical trial networks and real-world evidence data technology
  —  Initial immune-oncology focus will leverage Oncocyte’s DetermaIO test for patient selection in immunotherapy clinical trials across the network
• Continued growth of pharma services offering with a full suite of molecular analyses including tissue and blood-based technologies, proprietary platforms such as DetermaIO and TNBCType Assay, as well as custom next-generation sequencing and PCR services including whole exome sequencing, RNA-seq and targeted mutation panels

Corporate

• Appointed Jennifer Carter, M.D., MPH, MBA, to Board of Directors, bringing deep expertise and experience in precision oncology to the Board   

Third Quarter 2020
Financial Highlights

At September 30, 2020, Oncocyte had cash, cash equivalents and marketable securities of $10.7 million.

Prior to January 1, 2020, Oncocyte had no revenues. Oncocyte currently derives its revenues from pharma services generated by its wholly owned subsidiary, Insight Genetics, which was acquired on January 31, 2020, and from the sale of its lung cancer test, DetermaRx, which was commercially launched in early 2020. In light of the recent CMS and Noridian final pricing decision for the DetermaRx test, which became effective in September, Oncocyte is able to recognize revenues for Medicare covered tests on an accrual basis, rather than on a cash basis, when the tests are performed.

Under U.S. accounting principles, for all payers other than Medicare, Oncocyte will be able to recognize revenues for DetermaRx on an accrual basis of accounting once it has contracts for reimbursement from third-party payers or a history of experience of cash collections for the tests performed, or both. Until that time, for all payers other than Medicare, Oncocyte expects to recognize revenue for DetermaRx tests performed on a cash basis. Accordingly, Oncocyte will incur and accrue cost of revenues and other operating expenses related to its pharma services and diagnostic tests, including DetermaRx.

Beginning on January 31, 2020, Oncocyte’s consolidated financial statements and results also include the results from its wholly owned subsidiary, Insight Genetics, which Oncocyte acquired on that date.

For the third quarter ended September 30, 2020, Oncocyte reported a net loss of $6.8 million, or ($0.10) per share, as compared to $5.2 million, or ($0.10) per share, for the third quarter ended September 30, 2019.

Operating losses, as reported, for the third quarter of 2020 were $6.2 million, an increase of $0.9 million from $5.3 million as compared to the third quarter of 2019; and operating losses, on an adjusted basis, were $6.1 million, an increase of $2.0 million from $4.1 million as compared to the third quarter of 2019.

Oncocyte has provided a reconciliation between GAAP and non-GAAP operating losses in the financial tables, included with this earnings release, which it believes is helpful in understanding its ongoing operations.

Revenues for the three and nine months ended September 30, 2020 were $0.6 million and $0.7 million respectively, generated from pharma services and DetermaRx tests that are covered by Medicare on an accrual basis since Oncocyte received a final pricing from CMS in September.

Cost of revenues for the three and nine months ended September 30, 2020 were $0.6 million and $1.1 million, respectively, incurred from performing the DetermaRx tests and pharma services.

Research and development expenses for third quarter of 2020 were $2.6 million as compared to $1.6 million for the same period in 2019, an increase of $1.0 million primarily attributable to personnel and related expenses, including a noncash stock-based compensation expense increase of $0.3 million. Personnel and related expenses for the current quarter also include a $0.4 million severance charge and $0.2 million in accelerated stock-based compensation expense recorded as part of the partial reduction in force plan and salary reduction agreements instituted in September 2020.

General and administrative expenses for the third quarter of 2020 were $5.0 million, as compared to $3.0 million for the same period in 2019, an increase of $2.0 million primarily attributable to personnel and related expenses, including a noncash stock-based compensation expense. Personnel and related expenses for the current quarter also include a $0.9 million severance charge and $0.5 million in accelerated stock-based compensation expense recorded as part of the partial reduction in force plan and salary reduction agreements instituted in September 2020.

Sales and marketing expenses for the three months ended September 30, 2020, were $1.6 million, as compared to $0.6 million for the same period in 2019, an increase of approximately $1.0 million. The increase was primarily due to personnel and related expenses for ramp up in sales and marketing activities for the commercialization effort of DetermaRx.

Change in fair value of contingent consideration liability – The change in fair value of contingent consideration is based on Oncocyte’s reassessment of the key assumptions underlying the determination of this liability as changes in circumstances and conditions occur from the Insight acquisition date to the reporting period being presented, with the subsequent change in fair value recorded as part of Oncocyte’s consolidated loss from operations for that period. Accordingly, for the three and nine months ended September 30, 2020, Oncocyte recorded an unrealized gain of approximately $3.0 million related to the decrease in the fair value of contingent consideration liability primarily attributable to a revised estimate of the timing of the possible future payouts.

Cash used in operations was $6.0 million for the third quarter of 2020, which included about $0.9 million in transactional and other business development related expenses.

Conference Call

The Company will host a conference call today, November 12, 2020, at 4:30 pm EDT / 1:30 pm PDT to discuss the results along with recent corporate developments.

The dial-in number in the U.S./Canada is 877-407-9716; for international participants, the number is 201-493-6779. For all callers, please refer to Conference ID 13709425, To access the live webcast, go to the investor relations section on the Company’s website, or by clicking here: http://public.viavid.com/index.php?id=141419.  The webcast replay will be available on the Oncocyte website for 90 days following the completion of the call.

About Onco
c
yte Corporation

Oncocyte is a molecular diagnostics company whose mission is to provide actionable answers at critical decision points across the cancer care continuum, with the goal of improving patient outcomes by accelerating and optimizing diagnosis and treatment. The Company recently launched DetermaRx™, a treatment stratification test that enables the identification of early-stage lung cancer patients at high risk for recurrence post-resection, allowing them to be treated when their cancer may be more responsive to adjuvant chemotherapy. Oncocyte is also developing DetermaIO™, a gene expression test that identifies patients more likely to respond to checkpoint immunotherapies.

DetermaRx and DetermaIO are trademarks of Oncocyte Corporation. TheraSure is a trademark of Chronix Biomedical, Inc.

Oncocyte Forward Looking Statements

Oncocyte cautions you that this press release contains forward-looking statements. Any statements that are not historical fact (including, but not limited to statements that contain words such as “will,” “believes,” “plans,” “anticipates,” “expects,” “estimates,” “may,” and similar expressions) are forward-looking statements. These statements include those pertaining to the commercial launch of DetermaRx, development of DetermaIO, unexpected expenditures or assumed liabilities or other unanticipated difficulties resulting from acquisitions, implementation and results of research, development, clinical trials and studies, commercialization plans, future financial and/or operating results, and future opportunities for Oncocyte, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management. Forward-looking statements involve risks and uncertainties, including, without limitation, the potential impact of COVID-19 on our financial and operational results, risks inherent in the development and/or commercialization of potential diagnostic tests or products, uncertainty in the results of clinical trials or regulatory approvals, the capacity of our third-party supplied blood sample analytic system to provide consistent and precise analytic results on a commercial scale, potential interruptions to our supply chain, the need and ability to obtain future capital, maintenance of intellectual property rights, and the need to obtain third party reimbursement for patients’ use of any diagnostic tests we commercialize, and risks inherent in acquisitions such as failure to realize anticipated benefits, unexpected expenditures or assumed liabilities, unanticipated difficulties in conforming business practices including accounting policies, procedures and internal controls, greater than estimated allocations of resources to develop and commercialize technologies, or failure to maintain any laboratory accreditation or certification. Actual results may differ materially from the results anticipated in these forward-looking statements and accordingly such statements should be evaluated together with the many uncertainties that affect the business of Oncocyte, particularly those mentioned in the “Risk Factors” and other cautionary statements found in Oncocyte’s Securities and Exchange Commission filings, which are available from the SEC’s website. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they were made. Oncocyte undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.

Investor Contact

Bob Yedid
LifeSci Advisors, LLC
646-597-6989
[email protected]

Media Contact

Cait Williamson, Ph.D.
LifeSci Communications, LLC
646-751-4366
[email protected]

 

ONCOCYTE COPORATION
CONSOLIDATED BALANCE SHEETS
($ in thousands)
		September 30,			December 31,
		2020			2019
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		10,292			22,072
Accounts receivable		366			–
Marketable equity securities		361			379
Prepaid expenses and other current assets		953			505
Total current assets		11,972			22,956
CURRENT ASSETS
Right-of use-assets, machinery and equipment, net and construction in progress		5,657			3,728
Equity method investment in Razor		13,852			10,964
Goodwill		9,187			–
Intangibles, net		15,031			–
Deposits and other non current assets		2,077			2,211
TOTAL ASSETS		57,776			39,859
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Amount due to Lineage and affiliates		–			6
Accounts payable		1,264			469
Accrued expenses and other current liabilities		5,115			2,610
Loan payable, current		2,061			1,125
Right-of-use and financing lease liabilities, current		456			230
Total current liabilities		8,896			4,440
NONCURRENT LIABILITIES
Right-of-use and financing lease liabilities, noncurrent		3,868			2,676
Loan payable, net of deferred financing costs, noncurrent		2,065			1,905
Contingent consideration liabilities		8,150			–
Other noncurrent liabilities		158			–
TOTAL LIABILITIES		23,137			9,021
SHAREHOLDERS’ EQUITY
Preferred stock, no par value, 5,000 shares authorized; none issued and outstanding		–			–
Common stock, no par value, 150,000 shares authorized; 67,251 and 57,032 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		152,007			124,583
Accumulated other comprehensive loss		–			–
Accumulated deficit		(117,368	)		(93,745	)
Total shareholders’ equity		34,639			30,838
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		57,776			39,859

ONCOCYTE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2020				2019				2020				2019
		unaudited				unaudited				unaudited				unaudited
REVENUE
Total revenue		$	555			$	–			$	713			$	–
TOTAL COSTS AND OPERATING EXPENSES
Cost of revenue		$	601			$	–			$	1139			$	–
Research and development			2,615				1,625				8,000				4,476
General and administrative			4,995				3,002				13,378				9,087
Sales and marketing			1,568				630				4,620				1,153
Change in fair value of contingent consideration			(2,980	)			–				(2,980	)			–
Total operating expenses			6,799				5,257				24,157				14,716
Loss from operations			(6,244	)			(5,257	)			(23,444	)			(14,716	)
OTHER INCOME (EXPENSES), NET
Interest income (expense), net			(78	)			135				(175	)			282
Unrealized gain (loss) on marketable equity securities			20				(103	)			(18	)			(13	)
Pro rata loss from equity method investment in Razor			(482	)			–				(1,112	)			–
Other income (expense), net			1				–				31				(25	)
Total other income (expenses), net			(539	)			32				(1,274	)			244
LOSS BEFORE INCOME TAXES			(6,783	)			(5,225	)			(24,718	)			(14,472	)
Income tax benefit			–				–				1,095				–
NET LOSS		$	(6,783	)		$	(5,225	)		$	(23,623	)		$	(14,472	)
Net loss per share; basic and diluted		$	(0.10	)		$	(0.10	)		$	(0.36	)		$	(0.29	)
Weighted average shares outstanding; basic and diluted			67,247				51,973				64,843				50,217

ONCOCYTE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
	Nine Months Ended
	September 30,
	2020				2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(23,623	)		$	(14,472	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		529				278
Amortization of intangible assets		59				–
Amortization of right-of-use assets and liabilities		959				–
Impairment charge for long-lived assets		88				–
Pro rata loss from equity method investment in Razor		1,112				–
Amortization of prepaid maintenance		52				28
Stock-based compensation		4,081				2,209
Unrealized loss on marketable equity securities		18				13
Amortization of debt issuance costs		80				30
Warrants issued for advisory services		–				234
Change in fair value of contingent consideration		(2,980	)			–
Deferred income tax benefit		(1,095	)			–
Other		–				25
Changes in operating assets and liabilities:
Accounts receivable		(372	)			–
Amount due to Lineage and affiliates		(6	)			(2,100	)
Prepaid expenses and other assets		(575	)			(238	)
Accounts payable and accrued liabilities		1,843				(416	)
Net cash used in operating activities		(19,830	)			(14,409	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Insight Genetics, net of cash acquired		(6,189	)			–
Equity method investment in Razor		(4,000	)			(11,245	)
Purchase of equipment		(1,061	)			(18	)
Security deposit and other		(6	)			64
Net cash used in investing activities		(11,256	)			(11,199	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options		72				943
Proceeds from sale of common shares		18,343				40,250
Financing costs to issue common shares		(58	)			(3,252	)
Common shares received and retired for employee taxes paid		(14	)			–
Repayment of loan payable		(125	)			(600	)
Repayment of financing lease obligations		(53	)			(323	)
Proceeds from PPP loan		1,141				–
Net cash provided by financing activities		19,306				37,018
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(11,780	)			11,410
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
At beginning of the period		23,772				8,034
At end of the period	$	11,992			$	19,444

Non-GAAP Financial Measures
This earnings release includes loss from operations prepared in accordance with accounting principles generally accepted in the United States (GAAP) and includes certain historical non-GAAP adjustments to operating expenses. In particular, Oncocyte has provided non-GAAP total loss from operations, adjusted to exclude noncash stock-based compensation, depreciation and amortization expenses, an impairment charge for certain long-lived assets, an unrealized gain for change in fair value of contingent consideration and a severance charge. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable financial measures prepared in accordance with GAAP. However, Oncocyte believes the presentation of non-GAAP total loss from operations, when viewed in conjunction with our GAAP total loss from operations, is helpful in understanding Oncocyte’s ongoing operations and its programs.
Furthermore, management uses these non-GAAP financial measures in the aggregate to establish budgets and operational goals, to manage Oncocyte’s business and to evaluate its performance and its programs.
Oncocyte Corporation
Reconciliation of Non-GAAP Financial Measure
Adjusted Loss from Operations
	Amounts In Thousands							Amounts In Thousands
	For the Three Months Ended							For the Nine Months Ended
	September 30,							September 30,
	2020			2019				2020				2019
	(unaudited)			(unaudited)				(unaudited)				(unaudited)
GAAP loss from operations – as reported	$	(6,244	)	$	(5,257	)	$		(23,444	)	$		(14,716	)
Stock-based compensation expense		1,784			821				4,081				2,209
Impairment charge for long-lived assets		–			–				422				–
Noncash warrant expense		–			234				–				234
Depreciation and amortization expense		91			93				321				306
Change in fair value of contingent consideration		(2,980	)		–				(2,980	)			–
Severance charge		1,260			–				1,260				–
Non-GAAP loss from operations, as adjusted	$	(6,089	)	$	(4,109	)	$		(20,340	)	$		(11,967	)

BEIJING, China, Nov. 12, 2020 (GLOBE NEWSWIRE) — ATA Creativity Global (“ACG” or the “Company”, Nasdaq: AACG), an international educational services company focused on providing quality learning experiences that cultivate and enhance students’ creativity, today announced preliminary unaudited financial results for the quarter and nine months ended September 30, 2020 (“Third Quarter 2020” and “Nine Months 2020”, respectively).

Third Quarter 2020 Highlights

• During Third Quarter 2020, student enrollment was 1,225, of which 666 were enrolled in ACG’s portfolio training programs. Approximately 44,203 credit hours (i.e., the standard unit measuring educational credit for the portfolio training program; each credit hour equates to roughly one hour of time committed) were delivered during Third Quarter 2020.
• Third Quarter 2020 net revenues of RMB42.2 million (US$6.2 million), primarily driven by revenues from portfolio training services
• Student enrollments and net revenues, particularly those related to the educational travel services business, continued to be impacted by the coronavirus disease (“COVID-19”) during Third Quarter 2020.
• Third Quarter 2020 net income attributable to ACG of RMB19.3 million (US$2.8 million), compared to net loss attributable to ACG of RMB25.2 million in the prior-year period
• Nine Months 2020 net revenues of RMB101.3 million (US$14.9 million)
• Nine Months 2020 net loss from continuing operations attributable to ACG of RMB33.3 million (US$4.9 million), compared to RMB56.3 million in the prior-year period
• RMB111.9 million (US$16.5 million) in cash and cash equivalents as of September 30, 2020

Management Commentary

Mr. Kevin Ma, Chairman and CEO of ACG, stated, “During the third quarter of 2020, enrollment levels within our portfolio training program increased by 50% with credit hours delivered increasing by over 58% from the prior sequential quarter, which we feel is an incredible achievement considering many students continued to pursue their studies via online delivery when most would likely prefer to do so in-person. The public health situation in China continues to improve, and we are pleased that nearly all of our training centers have been able to resume traditional in-person delivery of coursework. ACG’s acquisition of Beijing Huanqiuyimeng Education Consultation Corp. (‘Huanqiuyimeng’) took place at an opportune time as the two companies had substantially assimilated by early 2020 when the pandemic hit, and it played a key role in our successful transitioning of coursework to the online platform. We worked to develop technology systems that would support Huanqiuyimeng’s daily operations and leveraged our leadership in finance, management and analysis, all of which were crucial elements contributing to our successful navigation of challenges created by the pandemic. The unique circumstances of the pandemic necessitated a transition to an online education model, which has proven advantageous for students who require the increased flexibility remote learning provides and for institutions that can now serve a much wider student population thanks to technology. We believe there remains a great deal of runway for growth, and we are optimistic for our future as we head into 2021.”

Outlook/Impact of COVID-19

Mr. Jun Zhang, President of ACG, stated, “We were pleased to see continued strong enrollment in Third Quarter 2020 as traditional in-person delivery of coursework became increasingly available and many students continued their educations online during the period. The fourth quarter tends to be our busiest time of the year as students are working in earnest to complete their portfolios ahead of year-end application deadlines for entry in the fall of 2021. Given the effects of the pandemic, we anticipate fourth quarter enrollments in our Portfolio Training Program will remain steady. While our educational travel business will continue to be impacted through the remainder of the year, the fall and winter tend to be lighter travel seasons, and we plan to continue offering alternatives to our traditional travel programs, mitigating the overall impact on our business. While the pandemic has undoubtedly overturned the economy and countless lives have been devastated by this disease, our students have shown a great deal of resilience, and we are proud that ACG as an institution has risen to the challenge of continuing to provide the educational opportunities our students seek. We believe we will emerge from the pandemic stronger than before and look forward to supporting our students with additional offerings and improved infrastructure well into the future.”

Operating Review

Enrollment Update

ACG student enrollment for Third Quarter 2020 was 1,225, of which 666 were enrolled in its portfolio training programs, which consist of time-based programs and project-based programs.

A total of 44,203 credit hours were delivered for portfolio training programs during Third Quarter 2020, of which 26,117 credit hours were delivered for time-based programs and 18,086 credit hours were delivered for project-based programs. These courses were delivered either in person through ACG’s nationwide training center network or via online platform.

The following is a summary of the credit hours delivered for ACG’s portfolio training programs, for the period beginning July 1, 2020, to September 30, 2020, compared to those for the prior-year period:

	July 1 – Sept. 30, 2020		July 1 – Sept. 30, 2019		% Change
	No. of Credit Hours		No. of Credit Hours
Time-based Program	26,117		36,363		(28.2%)
Project-based Program	18,086		18,868		(4.1%)
Total	44,203		55,231		( 20.0 %)

During Third Quarter 2020, 559 students were enrolled in ACG’s other programs, which consists of overseas study counseling and foreign language training services enrollments as well as enrollments for other educational services such as some short-term online bootcamp programs and other recently launched background enhancement programs, such as internships in fields like fashion and architectural design.

GAAP Results

Note: Impact of Huanqiuyimeng Acquisition on and Certain Adjustments to the Company’s Financial Statements

Following the completion of the Huanqiuyimeng business acquisition whereby Huanqiuyimeng became a wholly owned subsidiary of the Company in 2019, the financial results presented in this press release incorporate financial contributions from Huanqiuyimeng for Third Quarter 2020 and Nine Months 2020. Please note that the prior-year period comparisons in the below financial reviews include approximately two months of contributions from the Huanqiuyimeng business as control of Huanqiuyimeng transitioned to ACG on August 6, 2019. In addition, the Company has applied acquisition accounting and made purchase price allocation (“PPA”) adjustments to various assets acquired and liabilities assumed from the Huanqiuyimeng business acquisition.

Third Quarter 2020 Financial Review

ACG’s total net revenues for Third Quarter 2020 were RMB42.2 million (US$6.2 million), compared to RMB40.6 million in the prior-year period. Net revenues for this quarter include a negative adjustment of RMB6.0 million resulting from amortization of the difference between the carrying value of deferred revenues in Huanqiuyimeng’s book and the fair value of deferred revenues assessed from the PPA process applied to the Huanqiuyimeng business acquisition (“PPA Adjustment to Net Revenues”). Revenues from portfolio training programs were RMB34.2 million, or 81.0% of total net revenues, during the period. Revenues from overseas study counselling services, other educational services and the K-12 business were RMB8.0 million, or 19.0% of total net revenues during the period.

Gross profit for Third Quarter 2020 was RMB15.8 million (US$2.3 million), compared to RMB14.6 million in the prior-year period. Gross margin was 37.4% during the period, compared 35.9% in the prior-year period. Excluding the PPA Adjustment to Net Revenues stated above, gross margin for Third Quarter 2020 would have been 45.2%.

Total operating expenses for Third Quarter 2020 were RMB32.4 million (US$4.8 million), compared to RMB40.8 million in the prior-year period. This decrease was primarily driven by a value-added tax exemption stipulated by the State Authority of Taxation in response to the impact of COVID-19 on the specific industry in which Huanqiuyimeng operates in China in 2020, as well as lower general and administrative costs as a result of reductions in headcount and office space made as part of a general expense savings plan launched in response to COVID-19.

Loss from operations for Third Quarter 2020 was RMB16.5 million (US$2.4 million), compared to RMB26.1 million in the prior-year period.

Net income attributable to ACG for Third Quarter 2020 was RMB19.3 million (US$2.8 million), compared to a net loss of RMB25.2 million in the prior-year period.

For Third Quarter 2020, basic and diluted earnings per common share attributable to ACG were both RMB0.28 (US$0.04), compared to basic and diluted losses per common share attributable to ACG of RMB0.51 for the prior-year period. Basic and diluted earnings per ADS attributable to ACG were both RMB0.56 (US$0.08), compared to basic and diluted losses per ADS attributable to ACG of RMB1.02 in the prior-year period.

Nine Months 2020 Financial Review

ACG’s total net revenues for Nine Months 2020 were RMB101.3 million (US$14.9 million), compared to RMB43.6 million in the prior-year period. Net revenues for the period include a negative adjustment of RMB18.0 million resulting from the PPA Adjustment to Net Revenues, as noted above. Revenues from portfolio training programs were RMB72.4 million, or 71.4% of total net revenues, during the period. Revenues from other education services and the K-12 business were RMB28.9 million, or 28.6% of total net revenues during the period.

Gross profit for Nine Months 2020 was RMB34.1 million (US$5.0 million), compared to RMB15.0 million in the prior-year period. Gross margin was 33.7% during the period, compared to 34.3% in the prior-year period. Excluding the PPA Adjustment to Net Revenues stated above, gross margin for Nine Months 2020 would have been 43.7%.

Total operating expenses for Nine Months 2020 were RMB116.1 million (US$17.1 million), compared to RMB77.3 million in the prior-year period, which included only two months of expenses related to Huanqiuyimeng operations as control transitioned to ACG on August 6, 2019.

Loss from continuing operations for Nine Months 2020 was RMB81.5 million (US$12.0 million), compared to RMB61.7 million in the prior-year period as a result of the increased operating expenses, which were partially offset by the increase in gross profit mentioned above.

Net loss from continuing operations attributable to ACG for Nine Months 2020 was RMB33.3 million (US$4.9 million), compared to RMB56.3 million in the prior-year period.

For Nine Months 2020, basic and diluted losses from continuing operations per common share attributable to ACG were both RMB 0.60 (US$0.09), compared to RMB1.24 for the prior-year period. Basic and diluted losses from continuing operations per ADS attributable to ACG were both RMB 1.20 (US$0.18), compared to RMB2.48 in the prior-year period.

Non-GAAP Measures

Adjusted net income attributable to ACG for Third Quarter 2020, which excludes share-based compensation expense and foreign currency exchange loss (non-GAAP), was RMB19.7 million (US$2.9 million), compared to adjusted net loss of RMB23.3 million in the prior-year period.

Basic and diluted earnings per common share attributable to ACG excluding share-based compensation expense and foreign currency exchange loss (non-GAAP) for Third Quarter 2020, were RMB0.29 (US$0.04). Basic and diluted earnings per ADS attributable to ACG excluding share-based compensation expense and foreign currency exchange loss (non-GAAP) for Third Quarter 2020 were RMB0.58 (US$0.08).

Please see the note about non-GAAP measures and the reconciliation table at the end of this press release.

Other Data

The number of weighted average ADSs used to calculate both basic and diluted earnings per ADS for Third Quarter 2020 was 32.1 million. Each ADS represents two common shares.

Balance Sheet Highlights

As of September 30, 2020, ACG’s cash and cash equivalents were RMB111.9 million (US$16.5 million), working capital deficit was RMB134.9 million (US$19.9 million), and total shareholders’ equity was RMB259.8 million (US$38.3 million); compared to cash and cash equivalents of RMB154.2 million, working capital deficit of RMB81.3 million, and total shareholders’ equity of RMB305.6 million, respectively, as of December 31, 2019.

Update on Share Repurchase Program

In May 2020, ACG’s Board of Directors approved a share repurchase plan authorizing the Company to repurchase up to US$1.0 million of its issued and outstanding ADSs on the open market and through privately negotiated transactions. By November 1, 2020, the Company had repurchased 450,337 ADSs at an average stock price of US$1.2631. This share repurchase plan continues through December 31, 2020. The Board may suspend or discontinue the repurchase program at any time. This repurchase program does not obligate ACG to make additional repurchases at any specific time or in any specific situation.

Conference Call and Webcast Information (With Accompanying Presentation)

ACG will host a conference call at 8 p.m. Eastern Time on Thursday, November 12, 2020 (9 a.m. Beijing time on Friday, November 13, 2020), during which management will discuss the results of the quarter and nine months ended September 30, 2020. Investors are welcome to send any questions in advance of the conference call either through the webcast portal or via email to the Company’s contacts listed below.

To participate in the conference call, please use the following dial-in numbers about 10 minutes prior to the scheduled conference call time:

U.S. & Canada (Toll-Free):	+1 (877) 737-7051
International (Toll):	+1 (201) 689-8878

	Local Access
China:	(400) 120 2840
Hong Kong:	(800) 965561

A live webcast of the conference call can be accessed at the investor relations section of ACG’s website at www.atai.net.cn or by clicking the following link: https://78449.themediaframe.com/dataconf/productusers/atac/mediaframe/41783/indexl.html.

An accompanying slide presentation in PDF format will also be made available 30 minutes prior to the conference call on the same investor relations section of ACG’s website. To listen to the webcast, please visit ACG’s website a few minutes prior to the start of the call to register, download, and install any necessary audio software.

A replay will be available shortly after the call on the investor relations section of ACG’s website and will remain available for 90 days.

About ATA Creativity Global

ATA Creativity Global is an international educational services company focused on providing quality learning experiences that cultivate and enhance students’ creativity. ATA Creativity Global offers a wide range of education services consisting primarily of portfolio training, educational travel, overseas study counseling and other educational services through its training center network. For more information, please visit ACG’s website at www.atai.net.cn.

Cautionary Note Regarding Forward-looking Statements

This announcement 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 as defined in the Private Securities Litigation Reform Act of 1995.

These forward-looking statements can be identified by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “future,” “intend,” “look forward to,” “outlook,” “plan,” “should,” “will,” and similar terms and include, among other things, statements regarding ACG’s future growth and results of operations; ACG’s strategy of becoming a leading international education service provider; ACG’s plans for mergers and acquisitions generally; the benefits of the Huanqiuyimeng Acquisition; ACG’s ability to operate efficiently and maintain continued financial strength under unusual circumstances; ACG’s growth strategy, anticipated growth prospects and subsequent business activities; market demand for ACG’s portfolio training programs and other education services; the impact of the COVID-19 outbreak on ACG and its operations; ACG’s plan and anticipated benefits of the measures implemented in response to the COVID-19 outbreak; and the implementation, suspension or termination of the share repurchase program.

The factors that could cause the Company’s actual financial and operating results to differ from what the Company currently anticipates may include its ability to develop and create content that could accommodate needs of potential students, its ability to provide effective creative related international education services and control sales and marketing expenses, its recognition in the marketplace for services it delivered and branding it established, its ability to integrate the acquired business, its ability to maintain market share amid increasing competition, its ability to identify and execute on M&A opportunities within the education sector, the economy of China, uncertainties with respect to China’s legal and regulatory environments, the impact of the COVID-19 outbreak and other factors stated in the Company’s filings with the U.S. Securities and Exchange Commission (“SEC”).

The financial information contained in this release should be read in conjunction with the consolidated financial statements and related notes included in the Company’s annual report on Form 20-F for its fiscal year ended December 31, 2019, and other filings that ACG has made with the SEC. The filings are available on the SEC’s website at www.sec.gov and at ACG’s website at www.atai.net.cn. For additional information on the risk factors that could adversely affect the Company’s business, financial conditions, results of operations, and prospects, please see the “Risk Factors” section of the Company’s Form 20-F for the fiscal year ended December 31, 2019.

The forward-looking statements in this release involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates, and projections about ACG and the markets in which it operates. The Company undertakes no obligation to update forward-looking statements, which speak only as of the date of this release, to reflect subsequent events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that its expectations and assumptions expressed in these forward-looking statements are reasonable, the Company cannot assure you that its expectations and assumptions will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.

Currency Convenience Translation

The Company’s financial information is stated in Renminbi (“RMB”), the currency of the People’s Republic of China. The translations of RMB amounts for the quarter and nine months ended September 30, 2020, into U.S. dollars are included solely for the convenience of readers and have been made at the rate of RMB6.7896 to US$1.00, the noon buying rate as of September 30, 2020, in New York for cable transfers in RMB per U.S. dollar as set forth in the H.10 weekly statistical release of the Federal Reserve Board. Such translations should not be construed as representations that RMB amounts could be converted into U.S. dollars at that rate or any other rate, or to be the amounts that would have been reported under U.S. generally accepted accounting principles (“GAAP”).

About Non-GAAP Financial Measures

To supplement ACG’s consolidated financial information presented in accordance with U.S. GAAP, ACG uses the following non-GAAP financial measures: net income (loss) excluding share-based compensation expense and foreign currency exchange gain or loss, and basic and diluted earnings (losses) per common share and ADS excluding share-based compensation expense and foreign currency exchange gain or loss.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. ACG believes these non-GAAP financial measures provide meaningful supplemental information about its performance by excluding share- based compensation expense and foreign currency exchange gain or loss, which may not be indicative of its operating performance.

ACG believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to ACG’s historical performance. ACG computes its non-GAAP financial measures using a consistent method from period to period. ACG believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP net income (loss) excluding share-based compensation expense and foreign currency exchange gain or loss and basic and diluted earnings (losses) per common share and per ADS excluding share-based compensation expense and foreign currency exchange gain or loss is that share-based compensation charges and foreign currency exchange gain or loss have been, and are expected to continue to be for the foreseeable future, a significant recurring expense in ACG’s business.

Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The table captioned “Reconciliations of Non-GAAP Measures to the Most Comparable GAAP Measures” shown at the end of this news release has more details on the reconciliations between GAAP financial measures that are most directly comparable to the non-GAAP financial measures used by ACG.

For more information on our company, please contact the following individuals:

At the Company		Investor Relations
ATA Creativity Global		The Equity Group Inc.
Amy Tung, CFO		Carolyne Y. Sohn, Vice President
+86 10 6518 1133 x 5518		415-568-2255
[email protected]		[email protected]
		Adam Prior, Senior Vice President
		212-836-9606
		[email protected]

ATA CREATIVITY GLOBAL AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
	December 31 ,			September 30,			September 30,
	2019			2020			2020
	RMB			RMB			USD
ASSETS
Current assets:
Cash and cash equivalents	154,197,758			111,864,329			16,475,835
Accounts receivable, net	214,591			752,314			110,804
Subscription receivable	8,530,931			—			—
Prepaid expenses and other current assets	16,490,369			15,839,853			2,332,958
Loan receivable, net	4,126,502			4,028,251			593,297
Total current assets	183,560,151			132,484,747			19,512,894
Long-term investments	45,726,391			76,217,149			11,225,573
Goodwill	200,478,795			194,754,963			28,684,306
Property and equipment, net	42,070,794			39,320,610			5,791,300
Intangible assets, net	135,599,770			119,144,330			17,548,063
Right-of-use assets	40,786,291			34,878,923			5,137,110
Deferred income tax assets	11,464,891			1,159,562			170,785
Other non-current assets	16,402,750			21,718,104			3,198,731
Total assets	676,089,833			619,678,388			91,268,762
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accrued expenses and other payables	47,747,054			41,366,621			6,092,644
Short-term loan	4,991,000			3,500,000			515,494
Payable for business acquisition	19,642,082			4,642,082			683,705
Lease liabilities-current	20,556,017			15,853,671			2,334,993
Deferred revenues	171,880,131			201,988,560			29,749,700
Total current liabilities	264,816,284			267,350,934			39,376,536
Other non-current liabilities	12,500,120			17,892,422			2,635,269
Deferred income tax liabilities	48,241,809			27,112,309			3,993,212
Total liabilities	325,558,213			312,355,665			46,005,017
Mezzanine equity-redeemable non-controlling interests	44,896,428			47,566,642			7,005,809
Shareholders’ equity:
Common shares	4,692,312			4,716,675			694,691
Treasury shares	(27,737,073	)		(31,740,603	)		(4,674,886	)
Additional paid-in capital	560,814,066			561,009,660			82,627,793
Accumulated other comprehensive loss	(37,478,167	)		(38,838,635	)		(5,720,313	)
Retained earnings (accumulated deficit)	(200,151,065	)		(237,694,169	)		(35,008,567	)
Total shareholders’ equity attributable to ACG	300,140,073			257,452,928			37,918,718
Non-redeemable non-controlling interests	5,495,119			2,303,153			339,218
Total shareholders’ equity	305,635,192			259,756,081			38,257,936
Commitments and contingencies
Total liabilities, mezzanine equity and shareholders’ equity	676,089,833			619,678,388			91,268,762

ATA CREATIVITY GLOBAL AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
	Three-month Period Ended
	September 30,			September 30,			September 30,
	2019			20 20			20 20
	RMB			RMB			USD
Net revenues	40,648,907			42,220,208			6,218,365
Cost of revenues	26,075,637			26,440,055			3,894,199
Gross profit	14,573,270			15,780,153			2,324,166
Operating expenses:
Research and development	2,993,184			1,968,166			289,880
Sales and marketing	13,866,071			14,426,538			2,124,799
General and administrative	23,967,626			16,023,050			2,359,940
Total operating expenses	40,826,881			32,417,754			4,774,619
Other operating income, net	105,184			125,020			18,413
Loss from operations	(26,148,427	)		(16,512,581	)		(2,432,040	)
Other income (expense):
Investments loss	(7,850	)		(655,016	)		(96,473	)
Impairment loss from investment	(5,919,198	)		(1,576,391	)		(232,177	)
Change in fair value of long-term investment	—			34,131,246			5,026,989
Interest income, net of interest expenses	504,175			233,578			34,402
Foreign currency exchange gain (loss), net	(35,926	)		(65,748	)		(9,684	)
Income (loss) before income taxes	(31,607,226	)		15,555,088			2,291,017
Income tax benefit	(3,395,225	)		(2,559,069	)		(376,910	)
Net income (loss)	(28,212,001	)		18,114,157			2,667,927
Net loss attributable to redeemable non-controlling interests	(832,023	)		(467,589	)		(68,868	)
Net loss attributable to non-redeemable non-controlling interests	(2,146,674	)		(697,873	)		(102,786	)
Net income (loss) attributable to ACG	(25,233,304	)		19,279,619			2,839,581
Other comprehensive loss:
Foreign currency translation adjustment, net of nil income taxes	1,767,000			(2,933,928	)		(432,121	)
Comprehensive income ( loss ) attributable to ACG	(23,466,304	)		16,345,691			2,407,460
Basic and diluted earnings (losses) per common share attributable to ACG	(0.51	)		0.28			0.04
Basic and diluted earnings (losses) per ADS attributable to ACG	(1.02	)		0.56			0.08

ATA CREATIVITY GLOBAL AND SUBSIDIARIES UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
	Nine -month Period Ended
	September30,			September 30,			September30,
	201 9			20 20			20 20
	RMB			RMB			USD
Net revenues	43,631,500			101,319,831			14,922,798
Cost of revenues	28,674,651			67,184,166			9,895,158
Gross profit	14,956,849			34,135,665			5,027,640
Operating expenses:
Research and development	9,354,973			6,374,836			938,912
Sales and marketing	17,045,082			35,872,541			5,283,454
General and administrative	50,856,838			73,842,659			10,875,848
Total operating expenses	77,256,893			116,090,036			17,098,214
Other operating income, net	562,085			471,955			69,511
Loss from continuing operations	(61,737,959	)		(81,482,416	)		(12,001,063	)
Other income (expense):
Investments loss	(7,850	)		(1,779,478	)		(262,089	)
Impairment loss of long-term investments	(5,919,198	)		(1,576,391	)		(232,177	)
Change in fair value of long-term investment	—			34,131,246			5,026,989
Interest income, net of interest expenses	2,604,306			884,670			130,298
Foreign currency exchange gain (loss), net	(21,174	)		(126,772	)		(18,671	)
Loss from continuing operations before income taxes	(65,081,875	)		(49,949,141	)		(7,356,713	)
Income tax benefit	(3,395,225	)		(10,732,321	)		(1,580,700	)
Loss from continuing operations, net of income taxes	(61,686,650	)		(39,216,820	)		(5,776,013	)
Discontinued operations:
Income from discontinued operations, net of income taxes	4,894,198			—			—
Net loss	(56,792,452	)		(39,216,820	)		(5,776,013	)
Net loss attributable to redeemable non-controlling interests from continuing operations	(1,928,862	)		(1,615,454	)		(237,931	)
Net loss attributable to non-redeemable non-controlling interests from continuing operations	(3,462,882	)		(4,343,933	)		(639,792	)
Net loss attributable to ACG	(51,400,708	)		(33,257,433	)		(4,898,290	)
Net loss from continuing operations attributable to ACG	(56,294,906	)		(33,257,433	)		(4,898,290	)
Net income from discontinued operations attributable to ACG	4,894,198			—			—
Other comprehensive loss:
Foreign currency translation adjustment, net of nil income taxes	1,897,146			(1,360,468	)		(200,375	)
Comprehensive loss attributable to ACG	(49,503,562	)		(34,617,901	)		(5,098,665	)
Basic and diluted losses per common share attributable to ACG	(1.14	)		(0.60	)		(0.09	)
Basic and diluted losses per ADS attributable to ACG	(2.28	)		(1.20	)		(0.18	)
Basic and diluted losses from continuing operations per common share attributable to ACG	(1.24	)		(0.60	)		(0.09	)
Basic and diluted earnings from discontinued operations per common share attributable to ACG	0.10			—			—
Basic and diluted losses from continuing operations per ADS attributable to ACG	(2.48	)		(1.20	)		(0.18	)
Basic and diluted earnings from discontinued operations per ADS attributable to ACG	0.20			—			—

RECONCILIATIONS OF NON-GAAP MEASURES
TO THE MOST COMPARABLE GAAP MEASURES
	Three-month Period Ended					N ine-month Period Ended
	September 30,			September 30,		September 30,			September 30,
	201 9			20 20		201 9			20 20
	RMB			RMB		RMB			RMB
GAAP net income (loss) attributable to ACG	(25,233,304	)		19,279,619		(51,400,708	)		(33,257,433	)
Share-based compensation expenses	1,880,228			388,208		4,782,335			1,384,300
Foreign currency exchange loss, net	35,926			65,748		21,174			126,772
Non-GAAP net income (loss) attributable to ACG	(23,317,150	)		19,733,575		(46,597,199	)		(31,746,361	)
GAAP earnings (losses) per common share attributable to ACG
Basic and diluted	(0.51	)		0.28		(1.14	)		(0.60	)
Non-GAAP earnings (losses) per common share attributable to ACG
Basic and diluted	(0.47	)		0.29		(1.04	)		(0.58	)

 

Over 4,000 total units sold in the quarter

Achieved $3.7 million in Gross Profit and grew Adjusted Gross Profit 156% Year-over-Year to $3.9 million

SAN FRANCISCO, Nov. 12, 2020 (GLOBE NEWSWIRE) — Shift (Nasdaq: SFT), a leading end-to-end ecommerce platform for buying and selling used cars, today reported third quarter financial results for the period ended September 30, 2020. Management’s commentary on third quarter 2020 financial results and fourth quarter 2020 outlook can be found by accessing the Company’s shareholder letter on investors.shift.com, or by listening to today’s conference call. A live audio webcast will also be available on Shift’s Investor Relations website.

As previously announced, on October 13, 2020, Shift and Insurance Acquisition Corp. (“INSU”) completed their merger (the “Merger”). As a result of the Merger, Shift became a direct wholly-owned subsidiary of INSU. Immediately following the Merger, INSU changed its name to Shift Technologies, Inc. and its common stock and warrants began trading on the Nasdaq Capital Market under the new symbols SFT and SFTTW, respectively.

“This has been a transformative year for Shift and we are embarking on our life as a public company with exciting momentum. In the third quarter, we grew total revenue 31%, Adjusted GPU 89% and total unit sales 34%, year over year, and sold nearly 1,000 ecommerce units per month,” said Shift’s Co-CEO Toby Russell. “We are investing in market expansion, an innovative branding and marketing strategy, technology-enabled tools to drive efficiency and a world-class leadership team. I couldn’t be more excited for the future of Shift.”

“Our third quarter – and year to date – results demonstrate that there is a clear demand for our offerings and consumers are embracing Shift more than ever before. We now expect Q4 revenue to be another record, in the range of $72 million to $75 million, representing 163% – 174% year over year growth, the strongest revenue growth in the Company’s recent history,” added Shift’s Co-CEO George Arison. “Looking ahead, we are focused on several strategic priorities that we believe will drive long term growth. In the near-term, our strategy is to deepen penetration in our existing markets and expand into new markets, improve attachment rates of high-quality ancillary products, drive reconditioning efficiencies and increase our brand recognition.”

Q3 2020 Key Results

All comparisons for the quarter are year-over-year unless otherwise specified.

• Total revenue grew 31% year-over-year and 85% from Q2 2020, reaching a record $59.9 million.
• Total units sold were 4,046, up 34%. Total ecommerce units sold were 2,946 and total wholesale units sold were 1,100, an increase of 35% and 31%, respectively.
• Gross profit grew to $3.7 million or 6.2% of total revenue, up from $(0.9) million. Non-GAAP Adjusted gross profit grew 156% to $3.9 million or 6.5% of total revenue.
• Gross profit per unit was $1,265 compared to negative gross profit per unit of $391.
• Adjusted gross profit per unit (“Adjusted GPU”) was $1,319, compared to $697, an 89% increase. Adjusted GPU is reduced by non-repair labor costs of $152 per unit in Q3 2020.
• SG&A was $24 million, or 40% of revenue, up from 35%. The increase in SG&A was primarily driven by increased marketing spend and an increase in expenses associated with becoming a public company.
• Net loss was $(23.3) million, as compared to net loss of $(19.0) million, and basic and diluted net loss per share was $(0.64), based on 36.5 million weighted average shares outstanding during Q3 2020 for Shift as a standalone entity, prior to the Merger close on October 13, 2020.
• Adjusted EBITDA loss for the period was $(19.4) million or (32.4)% of total revenue, as compared to (30.5)% of revenue in the prior year period.
• Cash and cash equivalents totaled $18.4 million as of September 30, 2020. The Merger which closed subsequent to Q3, delivered approximately $302 million, net of deal-related expenses, to support growth and working capital. Subsequent to the close of the Merger, the Company paid down the $6.1 million balance of its PPP loan and $25.0 million balance on its delayed draw term loan.
• As of October 13, 2020, and immediately following the Merger, Shift had approximately 82.1 million shares outstanding, inclusive of approximately 6 million shares which are subject to the earnout provisions of the agreement governing the Merger. We expect basic and diluted weighted average shares outstanding to be approximately 82.7 million in Q4.

Recent Company Highlights

In the last quarter, Shift:

• Introduced its newest buyer market in the greater Seattle region, marking a complete span of the U.S. West Coast footprint for the company.
• Launched its first acquisition market in Texas, acquiring select vehicles directly from consumers in the Austin area.
• Unveiled its new brand strategy, including an ad campaign, new look and feel, and TV ads featuring a new spokesperson. The overarching theme of the new Shift brand is embracing and celebrating used cars. Shift proudly celebrates and champions used cars, and the savvy consumers who buy them.
• Expanded its leadership team with the addition of multi-decade veteran of the auto retail industry, Mark McCollum, as Chief Revenue Officer, and 20-year public company accounting leader, Blima Tuller, as Controller & SVP of Accounting.
• Added three Directors to its board, with expertise in marketing, automotive finance, and technology.

Conference Call Information

Shift senior management will host a conference call today to discuss the Company’s Q3 2020 financial results and fourth quarter outlook. This call is scheduled to begin at 2:00 pm PT / 5:00 pm ET and can be accessed by dialing (833) 614-1395 or (914) 987-7116. To listen to a live audio webcast, please visit Shift’s Investor Relations website at investors.shift.com. A replay of the audio webcast will be available on the same website following the call. A telephonic replay will be available through November 19, 2020 by dialing (855) 859-2056 or (404) 537-3406 and entering passcode 9878278#.

About Shift

Shift is a leading end-to-end auto ecommerce platform transforming the used car industry with a technology-driven, hassle-free customer experience. Shift’s mission is to make car purchase and ownership simple — to make buying or selling a used car fun, fair, and accessible to everyone. Shift provides comprehensive, digital solutions throughout the car ownership lifecycle: finding the right car, having a test drive brought to you before buying the car, a seamless digitally-driven purchase transaction including financing and vehicle protection products, an efficient, digital trade-in/sale transaction, and a vision to provide high-value support services during car ownership. For more information, visit www.shift.com.

Forward-Looking Statements

This document includes “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward looking statements include estimated financial information. Such forward looking statements with respect to revenues, earnings, performance, strategies, prospects and other aspects of Shift’s business are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward looking statements. These factors include, but are not limited to: (1) the ability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition, Shift’s ability to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; (2) costs related to the business combination; (3) changes in applicable laws or regulations; (4) the possibility that Shift may be adversely affected by other economic, business, and/or competitive factors; (5) the operational and financial outlook of Shift; (6) the ability for Shift to execute its growth strategy; and (7) other risks and uncertainties indicated from time to time in other documents filed or to be filed with the SEC by Shift. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Shift undertakes 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.

Non-GAAP Financial Measures

In addition to our GAAP results, we review certain non-GAAP financial measures to help us evaluate our business, measure our performance, identify trends affecting our business, establish budgets, measure the effectiveness of investments in our technology and sales and marketing, and assess our operational efficiencies. These non-GAAP measures include Adjusted Gross Profit, Adjusted gross profit per unit (“Adjusted GPU”), and Adjusted EBITDA, each of which is discussed below.

These non-GAAP financial measures are not intended to be considered in isolation from, as substitutes for, or as superior to, the corresponding financial measures prepared in accordance with GAAP. You are encouraged to evaluate these adjustments, and review the reconciliation of these non-GAAP financial measures to their most comparable GAAP measures, and the reasons we consider them appropriate. It is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies. See “Reconciliation of gross profit to Adjusted Gross Profit,” “Reconciliation of gross profit per unit to Adjusted gross profit per unit” and “Reconciliation of net loss to Adjusted EBITDA” included as part of this press release.

Adjusted Gross Profit

Management evaluates our business based on an adjusted gross profit calculation that removes the financial impact associated with milestones achieved under our Lithia warrant arrangement, which resulted in reductions in gross profit in our consolidated financial statements as applicable to the periods presented. This is a non-cash adjustment, and we do not expect any material future non-cash gross profit adjustments related to the Lithia warrant agreement. We examine adjusted gross profit in aggregate as well as for each of our revenue streams: ecommerce, other, and wholesale.

Adjusted Gross Profit per Unit

We define adjusted gross profit per unit (“Adjusted GPU”) as the adjusted gross profit for ecommerce, other and wholesale, each of which divided by the total number of ecommerce units sold in the period. Adjusted GPU is driven by ecommerce vehicle revenue, which generates additional revenue through attachment of our financing and protection products, and gross profit generated from wholesale vehicle sales. We present Adjusted GPU from our three revenues streams, as Ecommerce Adjusted GPU, Wholesale Adjusted GPU and Other Adjusted GPU. We believe Adjusted GPU is a key measure of our growth and long-term profitability.
  
Adjusted EBITDA:

We define Adjusted EBITDA as net loss adjusted to exclude stock-based compensation expense, depreciation and amortization, net interest income or expense, impact of warrant remeasurement, warrant milestone impact, and other cash and non-cash based income or expenses that we do not consider indicative of our core operating performance, including, but not limited to acquisition and related items. We believe Adjusted EBITDA is useful to investors in evaluating our performance for the following reasons:

• Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s performance without regard to items such as those we exclude in calculating this measure, which can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired.
• Our management uses Adjusted EBITDA in conjunction with GAAP financial measures for planning purposes, including the preparation of our annual operating budget, as a measure of performance and the effectiveness of our business strategies, and in communications with our board of directors concerning our performance.
• Adjusted EBITDA provides a measure of consistency and comparability with our past performance that many investors find useful, facilitates period-to-period comparisons of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Although Adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results of operations as reported under GAAP. These limitations include:

• Stock-based compensation is a non-cash charge and will remain an element of our long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period.
• Depreciation and amortization are non-cash charges, and the assets being depreciated or amortized will often have to be replaced in the future, but Adjusted EBITDA does not reflect any cash requirements for these replacements.
• Adjusted EBITDA does not reflect changes in our working capital needs, capital expenditures, or contractual commitments.
• Adjusted EBITDA does not reflect cash requirements for income taxes and the cash impact of other income or expense.
• Other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Our Adjusted EBITDA is influenced by fluctuations in our revenue and the timing and amounts of our investments in our operations. Adjusted EBITDA should not be considered as an alternative to net income (loss), income (loss) from operations, or any other measure of financial performance calculated and presented in accordance with GAAP.

Investor Relations Contact:

Jennifer Jarman, The Blueshirt Group
[email protected] 

Media Contact:

Jeff Fox, The Blueshirt Group
[email protected] 

Source: Shift Technologies, Inc.

SHIFT TECHNOLOGIES INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets


(in thousands, except share and per share amounts)



(unaudited)

		As of September 30, 2020				As of December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents		$	18,366			$	42,976
Accounts receivable, net			7,924				1,839
Inventory			33,485				18,198
Prepaid expenses and other current assets			2,161				1,899
Total current assets			61,936				64,912
Property and equipment, net			1,802				2,120
Capitalized website and internal use software costs, net			6,376				5,679
Restricted cash, noncurrent			1,605				1,600
Deferred borrowing costs			2,908				5,184
Other noncurrent assets			2,850				3,274
Total assets		$	77,477			$	82,769
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable		$	9,482			$	1,967
Accrued expenses and other current liabilities			14,413				5,954
Flooring line of credit			20,556				16,245
Total current liabilities			44,451				24,166
Related party long term note, net, noncurrent			22,004				8,505
Warrants liability			11,021				4,810
Other noncurrent liabilities			8,284				1,954
Total liabilities			85,760				39,435
Commitment and contingencies (Note 8)
Convertible preferred stock – par value $0.0001 per share; 259,455,633 shares authorized at September 30, 2020, and December 31, 2019; 255,237,101 shares issued and outstanding at September 30, 2020, and December 31, 2019; (liquidation preference of $175,265 at September 30, 2020, and December 31, 2019)			223,631				223,631
Stockholders’ deficit:
Common stock – par value $0.0001 per share; 435,000,000 shares authorized at September 30, 2020, and December 31, 2019, respectively; 44,389,137 and 37,432,555 shares issued and outstanding at September 30, 2020, and December 31, 2019, respectively;			4				3
Additional paid-in capital			38,023				34,997
Accumulated deficit			(269,941	)			(215,297	)
Total stockholders’ deficit			(231,914	)			(180,297	)
Total liabilities, convertible preferred stock and stockholders’ deficit		$	77,477			$	82,769

SHIFT TECHNOLOGIES INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Loss


(in thousands, except share and per share amounts)



(unaudited)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
Revenue
Ecommerce revenue, net		$	48,486			$	36,914			$	97,870			$	112,645
Other revenue			2,036				954				3,933				2,627
Wholesale vehicle revenue			9,392				7,989				20,504				23,612
Total revenue			59,914				45,857				122,307				138,884
Cost of sales			56,188				46,710				111,666				139,932
Gross profit			3,726				(852	)			10,641				(1,048	)
Operating expenses:
Selling, general and administrative expenses			24,030				16,204				52,109				54,236
Depreciation and amortization			1,181				888				3,258				2,184
Total operating expenses			25,211				17,092				55,367				56,420
Loss from operations			(21,485	)			(17,944	)			(44,726	)			(57,468	)
Interest expense			(1,256	)			(1,463	)			(3,901	)			(4,136	)
Interest income and other income (expense)			(579	)			427				(6,017	)			1,642
Net loss and comprehensive loss attributable to common stockholders		$	(23,320	)		$	(18,980	)		$	(54,644	)		$	(59,962	)
Net loss and comprehensive loss per share attributable to common stockholders, basic and diluted		$	(0.64	)		$	(0.55	)		$	(1.57	)		$	(1.71	)
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted			36,457,891				34,333,276				34,851,966				35,063,135

SHIFT TECHNOLOGIES INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows


(in thousands)



(unaudited)

		Nine Months Ended September 30,
		2020				2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(54,644	)		$	(59,962	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			3,258				2,184
Stock-based compensation expense, including warrant remeasurement			7,666				930
Non-cash expense upon milestone achievement			—				2,894
Contra-revenue associated with milestones			478				7,277
Amortization of debt discount			3,275				3,108
Compensation expense from exchange of common stock			—				4,824
Changes in operating assets and liabilities:
Accounts receivable			(6,085	)			408
Inventory			(15,287	)			20,673
Prepaid expenses and other current assets			7				309
Other noncurrent assets			(54	)			(879	)
Accounts payable			7,515				(2,259	)
Accrued expenses and other current liabilities			7,983				1,220
Other noncurrent liabilities			(52	)			413
Net cash used in operating activities			(45,940	)			(18,860	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment			(407	)			(1,085	)
Capitalized website internal-use software costs			(2,857	)			(3,714	)
Net cash used in investing activities			(3,264	)			(4,799	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from delayed draw term loans			12,500				—
Proceeds from flooring line of credit facility			67,413				92,613
Repayment of flooring line of credit facility			(63,102	)			(99,801	)
Proceeds from SBA PPP loans			6,055				—
Proceeds from issuance of convertible preferred stock			—				5,800
Issuance costs related to convertible preferred stock			—				(121	)
Proceeds from stock option exercises, including from early exercised options			1,740				72
Repurchase of shares related to early exercised options			(7	)			(3	)
Net cash provided by (used in) financing activities			24,599				(1,440	)
Net decrease in cash, cash equivalents and restricted cash			(24,605	)			(25,099	)
Cash, cash equivalents and restricted cash, beginning of period			44,576				72,092
Cash, cash equivalents and restricted cash, end of period		$	19,971			$	46,993
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest		$	650			$	1,024
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Vesting of exercised options		$	605			$	173
Stock-based compensation capitalized to internal-use software		$	182			$	243
Reclassification of warrants previously classified as liabilities		$	—			$	3,915
Exercised options with cash not yet received		$	269			$	—

SHIFT TECHNOLOGIES INC. AND SUBSIDIARIES

Reconciliation of Gross Profit to Adjusted Gross Profit

(In thousands)

(unaudited)

		Three Months Ended Sept 30,								Nine Months Ended Sept 30,
		2020				2019				2020				2019
		($ in thousands)								($ in thousands)
Total gross profit:
GAAP total gross profit		$	3,726			$	(852	)		$	10,641			$	(1,048	)
Warrant impact adjustment (1)			159				2,372				478				7,277
Adjusted total gross profit		$	3,885			$	1,520			$	11,119			$	6,229
Ecommerce gross profit:
GAAP ecommerce gross profit		$	1,606			$	785			$	4,518			$	3,590
Warrant impact adjustment (1)			–				–				–				–
Adjusted ecommerce gross profit		$	1,606			$	785			$	4,518			$	3,590
Other gross profit:
GAAP other gross profit		$	2,036			$	954			$	3,933			$	2,627
Warrant impact adjustment (1)			159				142				478				519
Adjusted other gross profit		$	2,195			$	1,096			$	4,411			$	3,146
Wholesale gross profit:
GAAP wholesale gross profit		$	84			$	(2,591	)		$	2,190			$	(7,265	)
Warrant impact adjustment (1)			–				2,230				–				6,757
Adjusted wholesale gross profit		$	84			$	(361	)		$	2,190			$	(508	)

(1

)

Warrant impact adjustment refers to a commercial agreement with Lithia Motors, Inc. and a reclassification of revenue generated through certain consumer promotions to selling, general and administrative expenses. In the referenced commercial agreement, Lithia was granted stock warrants through the achievement of various milestones. In accordance with ASC 606, due to the nature of the agreement in place with Lithia, Shift must burden gross profit by the amount of the fair market value expense of the warrants issued to Lithia upon achievement of certain milestones.

SHIFT TECHNOLOGIES INC. AND SUBSIDIARIES

Reconciliation of Gross Profit Per Unit
To
Adjusted Gross Profit Per Unit

(unaudited)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
		($ per ecommerce unit)								($ per ecommerce unit)
Total gross profit per unit:
GAAP total gross profit per unit		$	1,265			$	(391	)		$	1,719			$	(153	)
Warrant impact adjustment per unit			54				1,088				77				1,063
Adjusted total gross profit per unit		$	1,319			$	697			$	1,797			$	910
Ecommerce gross profit per unit:
GAAP ecommerce gross profit per unit		$	545			$	360			$	730			$	524
Warrant impact adjustment per unit			–				–				–				–
Adjusted ecommerce gross profit per unit		$	545			$	360			$	730			$	524
Other gross profit per unit:
GAAP other gross profit per unit		$	691			$	437			$	635			$	384
Warrant impact adjustment per unit			54				65				77				76
Adjusted other gross profit per unit		$	745			$	502			$	713			$	460
Wholesale gross profit per unit:
GAAP wholesale gross profit per unit		$	29			$	(1,188	)		$	354			$	(1,061	)
Warrant impact adjustment per unit			–				1,023				–				987
Adjusted wholesale gross profit per unit		$	29			$	(165	)		$	354			$	(74	)

SHIFT TECHNOLOGIES INC. AND SUBSIDIARIES

Reconciliation of Net Loss to Adjusted EBITDA

(In thousands)

(unaudited)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
		($ in thousands)								($ in thousands)
Adjusted EBITDA Reconciliation
Net Loss		$	(23,320	)		$	(18,980	)		$	(54,644	)		$	(59,962	)
(+) Interest expense, net   (1)			1,256				1,180				3,707			$	2,638
(+) Stock-Based Compensation, including warrant remeasurement (2)			1,334				574				7,666			$	930
(+) Depreciation & Amortization			1,181				888				3,258			$	2,184
(+) Warrant Impact Adjustment			159				2,372				478			$	7,277
Adjusted EBITDA		$	(19,390	)		$	(13,966	)		$	(39,535	)		$	(46,933	)
EBITDA Margin (%)			(32.4	)%			(30.5	)%			(32.2	)%			(33.8	)%

(1	)	Interest expense, net includes Interest expense and Interest Income and other income (expense) less warrant remeasurement amounts
(2	)	Stock Based Compensation, including warrant remeasurement includes stock based compensation of $0.8 million and $0.7 million, for the three months ended September 30, 2020 and September 30, 2019, respectively, and $1.5 million and $1.1 million for the nine months ended September 30, 2020 and September 30, 2019, respectively, recorded within Selling General and Administrative expenses and warrant remeasurements of $0.6 million and $(0.1) million, for the three months ended September 30, 2020 and September 30, 2019, respectively, and $6.2 million and $(0.l) million for the nine months ended September 30, 2020 and September 30, 2019, respectively, recorded within Interest Income and other income (expense) on the statement of operations and comprehensive loss.

PORTLAND, Maine, Nov. 12, 2020 (GLOBE NEWSWIRE) — ImmuCell Corporation (Nasdaq: ICCC) (“ImmuCell” or the “Company”), a growing animal health company that develops, manufactures and markets scientifically-proven and practical products that improve the health and productivity of dairy and beef calves, today announced unaudited financial results for the quarter ended September 30, 2020.

Product Sales Results:

• Total product sales increased by 25%, or $752,000, to $3.7 million during the three-month period ended September 30, 2020 versus the comparable period during 2019.
• The backlog of orders was reduced to approximately $130,000 as of September 30, 2020 from approximately $945,000 as of June 30, 2020.
• During the nine-month period ended September 30, 2020, total product sales increased by 15%, or $1.5 million, to $11.6 million versus the comparable period during 2019.
• Total product sales increased by 17%, or $2.2 million, to $15.2 million during the trailing twelve-month period ended September 30, 2020 versus the trailing twelve-month period ended September 30, 2019.

Management


’s


Discussion:


“As indicated by the top line growth, our sales team continues to be productive and healthy despite COVID-19’s impact on the economy,” commented Michael F. Brigham, President and CEO. “We are making measurable progress in expanding our First Defense^® business. We reduced the backlog of orders and expect to fully realize the benefits of our expanded production capacity beginning in the second quarter of 2021.”

“Our first production priority is Tri-Shield First Defense^® because our growth is being driven primarily by this product format, which contributes the higher gross margin dollar but at a lower gross margin percentage of sales,” added Mr. Brigham. “As we increase colostrum collection from new cows that have not been immunized previously with our proprietary vaccines, our production yields tend to decline, but we expect that to improve over time. Tri-Shield^® provides antibodies without vaccination so every calf receives a measured dose of Immediate Immunity™ against all three of the primary scour-causing pathogens, E. coli, coronavirus, and rotavirus.”

“Most of our product development expenses were related to the Re-Tain™ product development and commercial scale-up initiative,” concluded Mr. Brigham. “We are proceeding on plan to make our second-phased submission of the CMC Technical Section by the end of the year, which will be subject to at least one six-month review by the FDA.”

Other


Financial Results:

• Gross margin earned was 46% and 49% of total product sales during the quarters ended September 30, 2020 and 2019, respectively.
• Gross margin earned was 45% and 49% of total product sales during the nine-month periods ended September 30, 2020 and 2019, respectively.
• Product development expenses were $1.1 million and $985,000 during the quarters ended September 30, 2020 and 2019, respectively.
• Product development expenses were $3.2 million and $2.7 million during the nine-month periods ended September 30, 2020 and 2019, respectively.
• Net loss was $323,000, or $0.04 per share, during the quarter ended September 30, 2020 in comparison to net loss of $503,000, or $0.07 per share, during the quarter ended September 30, 2019.
• Net loss was $1.2 million, or $0.17 per share, during the nine-month period ended September 30, 2020 in comparison to net loss of $985,000, or $0.15 per share, during the nine-month period ended September 30, 2019.
• The $937,700 loan received under the Paycheck Protection Program was recorded as a liability as of September 30, 2020. Subsequent to then, we received notice from our bank that this loan has been fully forgiven by the federal government. The full amount is expected to be recognized as other income during the fourth quarter of 2020.
• EBITDA (a non-GAAP financial measure defined on page 4 of this press release) was $354,000 and $179,000 during the quarters ended September 30, 2020 and 2019, respectively.
• EBITDA was $1,008,000 and $1,085,000 during the nine-month periods ended September 30, 2020 and 2019, respectively.

B


alance Sheet Data as of


September


30


, 20


20


:

• Cash, cash equivalents, short-term investments and restricted cash decreased to $7.3 million as of September 30, 2020 from $8.8 million as of December 31, 2019.
• Net working capital decreased to $8.1 million as of September 30, 2020 from $10.7 million as of December 31, 2019.
• Total assets increased to $40 million as of September 30, 2020 from $38.7 million as of December 31, 2019.
• Stockholders’ equity decreased to $28 million as of September 30, 2020 from $29 million as of December 31, 2019.

C
ondensed Statements of Operations (Unaudited)

	During the Three-Month Periods Ended September 30 ,						During the Nine -Month Periods Ended September 30,
(In thousands, except per share amounts)	20 20			201 9			2020			2019
Product sales	$3,723			$2,970			$11,599			$10,091
Costs of goods sold	2,001			1,519			6,357			5,189
Gross margin	1,722			1,451			5,242			4,902
Sales, marketing and administrative expenses	851			896			2,804			2,898
Product development expenses	1,123			985			3,184			2,715
Operating expenses	1,974			1,881			5,988			5,613
NET OPERATING LOSS	(252	)		(430	)		(746	)		(711	)
Other expenses, net	71			65			480			242
LOSS BEFORE INCOME TAXES	(323	)		(495	)		(1,226	)		(953	)
Income tax expense (benefit)	–			8			(15	)		32
NET LOSS	($323	)		($503	)		($1,211	)		($985	)
Basic weighted average common shares outstanding	7,213			7,210			7,213			6,687
Basic net loss per share	($0.04	)		($0.07	)		($0.17	)		($0.15	)
Diluted weighted average common shares outstanding	7,213			7,210			7,213			6,687
Diluted net loss per share	($0.04	)		($0.07	)		($0.17	)		($0.15	)

Selected Balance Sheet Data (In thousands) (Unaudited)

	As of September 30 , 20 20		As of December 31, 201 9
Cash, cash equivalents, short-term investments and restricted cash	$7,313		$8,774
Net working capital	8,135		10,694
Total assets	39,987		38,692
Stockholders’ equity	$28,021		$28,991

Non-GAAP Measures:


Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP measures included in this press release should be considered in addition to, and not as a substitute for or superior to, the comparable measure prepared in accordance with GAAP. A reader should review our Statements of Cash Flows for a detailed understanding of our sources and uses of cash. We start with our reported loss before income taxes because presently we are not paying cash for income taxes and do not anticipate paying significant cash for income taxes in the near-term future. We believe that considering the non-GAAP income before income taxes and before certain non-cash expenses assists management and investors by looking at our performance across reporting periods on a consistent basis excluding these certain charges that are not uses of cash from our reported loss before income taxes. We calculate non-GAAP income before income taxes and certain non-cash expenses as indicated in the table below:

	During the Three-Month Periods Ended September 3 0 ,						During the Nine -Month Periods Ended September 30,
(In thousands)	20 20			201 9			20 20			201 9
Loss before income taxes	($323	)		($495	)		($1,226	)		($953	)
Depreciation, amortization and stock-based compensation	665			640			2,032			1,939
Income before income taxes and certain non-cash expenses	$342			$145			$806			$986

The figures we have calculated and reported above do not include cash used to repay bank debt in the amounts of $143,000 and $215,000 during the three-month periods ended September 30, 2020 and 2019, respectively, and $488,000 (exclusive of the $8.3 million used to repay our refinanced bank debt) and $644,000 during the nine-month periods ended September 30, 2020 and 2019, respectively. The figures calculated above differ from the calculation of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in two significant ways. First, we have not added back interest expense because we do pay cash for interest. Interest expense was $76,000 and $107,000 during the quarters ended September 30, 2020 and 2019, respectively, and $500,000 and $333,000 during the nine-month periods ended September 30, 2020 and 2019, respectively. During the nine-month period ended September 30, 2020, interest expense included payments of $165,000 to terminate our interest rate swap agreements and $95,000 to write-off debt issuance costs, both made in connection with the refinancing of our bank debt during the first quarter of 2020. Second, we have added back stock-based compensation expense because this is a non-cash expense, but it is not added back to the calculation of EBITDA. EBITDA was $354,000 and $179,000 during the quarters ended September 30, 2020 and 2019, respectively, and $1,008,000 and $1,085,000 during the nine-month periods ended September 30, 2020 and 2019, respectively.

Conference Call:


Interested parties can access the conference call scheduled by the Company to review the full third quarter 2020 financial results by dialing (844) 855-9502 (toll free) or (412) 317-5499 (international) at 9:00 AM ET on Friday, November 13, 2020. A teleconference replay of the call will be available for seven days at (877) 344-7529 (toll free) or (412) 317-0088 (international), utilizing confirmation #10148680.

Investors are encouraged to review the Company’s Quarterly Report on Form 10-Q for the three-month period ended September 30, 2020 that was filed with the SEC on Thursday, November 12, 2020 and its updated Corporate Presentation slide deck that provides an overview of the Company’s business and is available under the “Investors” tab of the Company’s website at www.immucell.com, or by request to the Company.

About


ImmuCell


:


ImmuCell Corporation’s (Nasdaq: ICCC) purpose is to create scientifically-proven and practical products that improve the health and productivity of dairy and beef calves. ImmuCell manufactures and markets First Defense^®, providing Immediate Immunity™ to newborn dairy and beef calves, and is in the late stages of developing Re-Tain™, a novel treatment for subclinical mastitis without a milk discard requirement that provides an alternative to traditional antibiotics. Press releases and other information about the Company are available at: http://www.immucell.com.

Contacts:	Michael F. Brigham, President and CEO
	ImmuCell Corporation
	(207) 878-2770
	Joe Diaz, Robert Blum and Joe Dorame
	Lytham Partners, LLC
	(602) 889-9700
	[email protected]

Cautionary Note Regarding Forward-Looking Statements (Safe


Harbor


Statement):

This Press Release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include, but are not limited to, any statements relating to: our plans and strategies for our business; projections of future financial or operational performance; the timing and outcome of pending or anticipated applications for regulatory approvals; factors that may affect the dairy and beef industries and future demand for our products; the extent, nature and duration of the COVID-19 pandemic and its consequences, and their direct and indirect impacts on the Company’s production activities, operating results and financial condition and on the customers and markets the Company serves; the scope and timing of ongoing and future product development work and commercialization of our products; future costs of product development efforts; the estimated prevalence rate of subclinical mastitis and producers’ level of interest in treating subclinical mastitis given the current economic and market conditions; the expected efficacy of new products; estimates about the market size for our products; future market share of and revenue generated by current products and products still in development; our ability to increase production output and reduce costs of goods sold associated with our new product, Tri-Shield First Defense®; the future adequacy of our own manufacturing facilities or those of third parties with which we have contractual relationships to meet demand for our products on a timely basis; the anticipated costs of (or time to complete) planned expansions of our manufacturing facilities and the adequacy of our funds available for these projects; the continuing availability to us on reasonable terms of third-party providers of critical products or services; the robustness of our manufacturing processes and related technical issues; estimates about our production capacity, efficiency and yield, which are highly subject to biological variability and the product format mix of our sales; the future adequacy of our working capital and the availability and cost of third-party financing; our ability to gain access to all or a substantial portion of the cash escrow funds presently held by our bank lender; future regulatory requirements relating to our products; future expense ratios and margins; future compliance with bank debt covenants; costs associated with sustaining compliance with current Good Manufacturing Practice (cGMP) regulations in our current operations and attaining such compliance for the facility to produce the Nisin Drug Substance; implementation of international trade tariffs that could reduce the export of dairy products, which could in turn weaken the price received by our customers for their products; our effectiveness in competing against competitors within both our existing and our anticipated product markets; the cost-effectiveness of additional sales and marketing expenditures and resources; anticipated changes in our manufacturing capabilities and efficiencies; the value of our net deferred tax assets; projections about depreciation expense and its impact on income for book and tax return purposes; anticipated market conditions; and any other statements that are not historical facts. Forward-looking statements can be identified by the use of words such as “expects”, “may”, “anticipates”, “aims”, “intends”, “would”, “could”, “should”, “will”, “plans”, “believes”, “estimates”, “targets”, “projects”, “forecasts”, “seeks” and similar words and expressions. In addition, there can be no assurance that future developments affecting us will be those that we anticipate. Such statements involve risks and uncertainties, including, but not limited to, those risks and uncertainties relating to difficulties or delays in development, testing, regulatory approval, production and marketing of our products (including the First Defense® product line and Re-Tain™), competition within our anticipated product markets, customer acceptance of our new and existing products, product performance, alignment between our manufacturing resources and product demand, our reliance upon third parties for financial support, products and services, changes in laws and regulations, decision making and delays by regulatory authorities, currency values and fluctuations and other risks detailed from time to time in filings we make with the SEC, including our Quarterly Reports on Form 10-Q, our Annual Reports on Form 10-K and our Current Reports on Form 8-K. Such statements involve risks and uncertainties and are based on our current expectations, but actual results may differ materially due to various factors, including the risk factors summarized above.

• Q
  3
  total
  revenue gr
  ew
  29
  % year-over-year to $
  70
  .
  4
  million
• R
  ecurring revenue gr
  ew
  4
  0
  % year-over-year to $
  65.8
  million
• ARR g
  rew
  3
  7
  % year-over-year to $
  2
  6
  1.5
  million
  

MINNEAPOLIS, Nov. 12, 2020 (GLOBE NEWSWIRE) — Jamf (NASDAQ: JAMF), the standard in Apple Enterprise Management, today announced financial results for its third quarter ended September 30, 2020.

Financial Highlights for the


Third


Quarter 2020:

• ARR: ARR increased 37% year-over-year to $261.5 million as of September 30, 2020.
• Revenue: Total revenue was $70.4 million, an increase of 29% year-over-year. Recurring revenue was $65.8 million, an increase of 40% year-over-year.
• Gross Profit: GAAP gross profit was $55.2 million, or 78% of total revenue, compared to $40.5 million, or 74% of total revenue, in the third quarter of 2019. Non-GAAP Gross Profit was $58.2 million, or 83% of total revenue, compared to $43.2 million, or 79% of total revenue, in the third quarter of 2019.
• Operating Loss/Income: GAAP operating loss was $376 thousand, compared to GAAP operating income of $205 thousand in the third quarter of 2019. Non-GAAP Operating Income was $12.0 million, or 17% of total revenue, compared to $9.6 million, or 18% of total revenue in the third quarter of 2019.
• Cash Flow: Cash flow provided by operations was $23.6 million, compared to $15.1 million in the third quarter of 2019. Unlevered free cash flow was $28.2 million, or 40% of total revenue, compared to $17.9 million, or 33% of total revenue in the third quarter of 2019.

A reconciliation between historical GAAP and non-GAAP information is contained in the tables below and the section titled “Non-GAAP Financial Measures” below contains reconciliations of these non-GAAP financial measures.

“We delivered strong third quarter results as the tailwinds of telehealth, distance learning, and remote work offset economic headwinds and drove robust Jamf sales, growth, and customer acquisition,” said Dean Hager, CEO of Jamf. “We are dedicated to our customers’ success and continue to roll out new features and enhancements to optimize the Jamf Apple Enterprise Management platform. We showcased many of these platform enhancements at our annual Jamf Nation User Conference (JNUC), which drew ten times our normal conference attendance this year as a virtual event. We are well positioned for continued growth in a large and expanding market, and we look forward to continuing to improve the overall management, security and experience for organizations using Apple, so they can empower their end users with the native Apple experience.”

Recent Business Highlights:

• Expanded education offering with several new capabilities, including one-click Remote Class and Raise Hand features, as well as the new Jamf Assessment app to administer proctored exams in a virtual world.
• Grew the total number of Apple devices running Jamf to 18.6 million at the end of the third quarter.
• Hosted approximately 20,000 attendees at the virtual JNUC, ten times the normal attendance of our annual, in-person event. Jamf showcased platform enhancements that are powering the learn, care and work anywhere trends, along with customer and partner stories on how they were able to succeed during this time using Apple and Jamf.
• Announced same-day compatibility and key feature support across its product portfolio for Apple’s fall releases, including macOS Big Sur and support for the new Mac built with the new Apple M1 chip, which were released this week.
• Extended collaboration with Microsoft Enterprise Mobility + Security by launching iOS Device Compliance, empowering organizations to choose Jamf for all Apple device management while also sharing important device information, like compliance status, with Microsoft Endpoint Manager.
• Announced the acquisition of Mondada, the creator of Kinobi and Kinobi Pro, leading solutions in patch management for the Apple platform. Mondada’s solutions integrate with Jamf Pro, allowing organizations to extend Jamf Pro’s built-in patch management functionality to include all Mac applications within an environment.

Financial Outlook:

For the fourth quarter of 2020, the company currently expects:

• Total revenue of $70 to $71 million
• Non-GAAP Operating Income of $1 to $2 million

For the full year 2020, the company is increasing its outlook and currently expects:

• Total revenue of $263 to $264 million
• Non-GAAP Operating Income of $28.5 to $29.5 million

Conference Call Information:

Jamf will host a conference call and live webcast for analysts and investors at 3:30 p.m. Central Time (4:30 p.m. Eastern Time) on November 12, 2020. The news release with the financial results will be accessible from the company’s website prior to the conference call. Parties in the United States and Canada can access the call by dialing +1 (833) 519-1319, and international parties can access the call by dialing +1 (914) 800-3885.

The webcast will be accessible on Jamf’s investor relations website at https://ir.jamf.com. A telephonic replay of the conference call will be available through Thursday, November 19, 2020. To access the replay, parties should dial (855) 859-2056, or (404) 537-3406 and enter the passcode 8684837#.

Non-GAAP Financial Measures:

In addition to our results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), we believe the non-GAAP measures of Non-GAAP Operating Expenses, Non-GAAP Gross Profit, Non-GAAP Gross Profit Margin, Non-GAAP Operating Income, Non-GAAP Operating Income Margin, Unlevered Free Cash Flow and Unlevered Free Cash Flow Margin are useful in evaluating our operating performance. Certain of these non-GAAP measures exclude stock-based compensation, depreciation and amortization expense, acquisition-related expenses, acquisition-related earnout, foreign currency transaction loss and discrete tax items. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables at the end of this release.

Jamf is not providing a quantitative reconciliation of forward-looking guidance of Non-GAAP Operating Income to GAAP operating income (loss) because certain items are out of Jamf’s control or cannot be reasonably predicted. Historically, these items have included, but are not limited to, acquisition-related expenses and acquisition-related earnout, amortization and stock-based compensation. Accordingly, a reconciliation for forward-looking Non-GAAP Operating Income is not available without unreasonable effort. However, for the fourth quarter of 2020 and full year 2020 amortization is expected to be $8.3 million and $33.3 million, respectively. In addition, for the fourth quarter of 2020 and full year 2020 stock-based compensation is expected to be $2.9 million and $6.8 million, respectively. These items are uncertain, depend on various factors, and could result in projected GAAP operating income (loss) being materially less than is indicated by currently estimated Non-GAAP Operating Income.

Forward-Looking Statements:

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook and market positioning. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including: the impact on our operations and financial condition from the effects of the current COVID-19 pandemic; the potential impact of customer dissatisfaction with Apple or other negative events affecting Apple services and devices, and failure of enterprises to adopt Apple products; the potentially adverse impact of changes in features and functionality by Apple on our engineering focus or product development efforts; changes in our continued relationship with Apple; the fact that we are not party to any exclusive agreements or arrangements with Apple; our reliance, in part, on channel partners for the sale and distribution of our products; risks associated with cyber-security events; the impact of reputational harm if users perceive our products as the cause of device failure; our ability to successfully develop new products or materially enhance current products through our research and development efforts; our ability to continue to attract new customers; our ability to retain our current customers; our ability to sell additional functionality to our current customers; our ability to meet service-level commitments under our subscription agreements; our ability to correctly estimate market opportunity and forecast market growth; risks associated with failing to continue our recent growth rates; our dependence on one of our products for a substantial portion of our revenue; our ability to scale our business and manage our expenses; our ability to change our pricing models, if necessary to compete successfully; the impact of delays or outages of our cloud services from any disruptions, capacity limitations or interferences of third-party data centers that host our cloud services, including AWS; our ability to maintain, enhance and protect our brand; our ability to maintain our corporate culture; the ability of Jamf Nation to thrive and grow as we expand our business; the potential impact of inaccurate, incomplete or misleading content that is posted on Jamf Nation; our ability to offer high-quality support; risks and uncertainties associated with potential acquisitions and divestitures, including, but not limited to, disruptions to ongoing operations; diversions of management from day-to-day responsibilities; adverse impacts on our financial condition; failure of an acquired business to further our strategy; uncertainty of synergies; personnel issues; resulting lawsuits and issues unidentified in diligence processes; our ability to predict and respond to rapidly evolving technological trends and our customers’ changing needs; our ability to compete with existing and new companies; the impact of adverse general and industry-specific economic and market conditions; the impact of reductions in IT spending; the impact of real or perceived errors, failures or bugs in our products; the impact of interruptions or performance problems associated with our technology or infrastructure; our ability to attract and retain highly qualified personnel; risks associated with competitive challenges faced by our customers; the impact of statutory and regulatory determinations on our offerings to governmental entities; risks associated with stringent and changing privacy laws, regulations and standards, and information security policies and contractual obligations related to data privacy and security; the impact of any catastrophic events; and, risks associated with our financial results or difficulty in predicting our financial results due to our revenue recognition. Given these factors, as well as other variables that may affect Jamf’s operating results, you should not rely on forward-looking statements, assume that past financial performance will be a reliable indicator of future performance, or use historical trends to anticipate results or trends in future periods. The forward-looking statements included in this press release and on the related teleconference call relate only to events as of the date hereof. Jamf undertakes no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

About


Jamf

Jamf, the standard in Apple Enterprise Management, extends the legendary Apple experience people love to businesses, schools and government organizations through its software and the world’s largest online community of IT admins focused exclusively on Apple, Jamf Nation. To learn more, visit: www.jamf.com.

Investor Contact:

Jennifer Gaumond
[email protected]

Media Contact:

Rachel Nauen
[email protected]

Jamf Holding Corp.
Consolidated Balance Sheets
(In thousands)
					September 30,				December 31,
						2020				2019
Assets					(unaudited)
Current assets:
	Cash and cash equivalents				$	177,457			$	32,433
	Trade accounts receivable, net of allowances of $513 and $200					64,151				46,513
	Income taxes receivable					672				14
	Deferred contract costs					8,528				5,553
	Prepaid expenses					16,565				10,935
	Other current assets					764				3,133
		Total current assets				268,137				98,581
Equipment and leasehold improvements, net						10,934				12,477
Goodwill						539,818				539,818
Other intangible assets, net						210,120				235,099
Deferred contract costs						23,433				16,234
Other assets						2,842				2,599
		Total assets			$	1,055,284			$	904,808
Liabilities and stockholders’ equity
Current liabilities:
	Accounts payable				$	6,672			$	3,684
	Accrued liabilities					21,521				26,927
	Income taxes payable					1,294				819
	Deferred revenues					151,532				120,089
		Total current liabilities				181,019				151,519
Deferred revenues, noncurrent						36,706				20,621
Deferred tax liability						12,774				18,133
Debt						–				201,319
Other liabilities						9,399				9,338
		Total liabilities				239,898				400,930
Commitments and contingencies
Stockholders’ equity:
	Preferred stock					–				–
	Common stock					117				103
	Additional paid-in capital					894,056				568,756
	Accumulated deficit					(78,787	)			(64,981	)
		Total stockholders’ equity				815,386				503,878
		Total liabilities and stockholders’ equity			$	1,055,284			$	904,808

 

Jamf Holding Corp.
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(unaudited)
				Three Months Ended September 30,								Nine Months Ended September 30,
					2020				2019				2020				2019
Revenue:
	Subscription			$	57,933			$	41,916			$	160,989			$	112,872
	Services				3,605				5,234				10,066				14,529
	License				8,866				7,418				21,970				19,605
		Total revenue			70,404				54,568				193,025				147,006
Cost of revenue:
	Cost of subscription(1) (exclusive of amortization shown below)				10,117				8,045				28,127				22,425
	Cost of services(1) (exclusive of amortization shown below)				2,443				3,397				7,736				10,589
	Amortization expense				2,679				2,634				8,034				7,588
		Total cost of revenue			15,239				14,076				43,897				40,602
		Gross profit			55,165				40,492				149,128				106,404
Operating expenses:
	Sales and marketing(1)				23,251				16,962				65,735				48,850
	Research and development(1)				12,736				10,919				37,282				29,453
	General and administrative(1)				13,921				6,779				31,813				21,576
	Amortization expense				5,633				5,627				16,941				16,886
		Total operating expenses			55,541				40,287				151,771				116,765
		Income (loss) from operations			(376	)			205				(2,643	)			(10,361	)
Interest expense, net					(1,207	)			(5,473	)			(10,675	)			(16,425	)
Loss on extinguishment of debt					(5,213	)			–				(5,213	)			–
Foreign currency transaction loss					(154	)			(861	)			(471	)			(1,311	)
Other income, net					–				55				91				165
		Loss before income tax benefit			(6,950	)			(6,074	)			(18,911	)			(27,932	)
Income tax benefit					1,857				1,404				5,105				6,581
		Net loss		$	(5,093	)		$	(4,670	)		$	(13,806	)		$	(21,351	)
Net loss per share, basic and diluted				$	(0.04	)		$	(0.05	)		$	(0.13	)		$	(0.21	)
Weighted-average shares used to compute net loss per share, basic and diluted					113,203,074				102,791,023				106,333,836				102,727,198
(1) Includes stock-based compensation as follows:
				Three Months Ended September 30,								Nine Months Ended September 30,
					2020				2019				2020				2019
Cost of revenue:
Subscription				$	314			$	38			$	390			$	156
Services					62				–				62				–
Sales and marketing					675				112				897				348
Research and development					523				99				821				284
General and administrative					754				349				1,733				1,028
				$	2,328			$	598			$	3,903			$	1,816

Jamf Holding Corp.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
							Nine Months Ended September 30,
								2020				2019
Cash flows from operating activities
	Net loss						$	(13,806	)		$	(21,351	)
	Adjustments to reconcile net loss to cash
	provided by (used in) operating activities:
		Depreciation and amortization expense						28,378				27,437
		Amortization of deferred contract costs						6,705				4,463
		Amortization of debt issuance costs						700				843
		Provision for bad debt expense and returns						894				–
		Loss (gain) on disposal of equipment and leasehold
			improvements					(23	)			(11	)
		Loss on extinguishment of debt						5,213				–
		Share-based compensation						3,903				1,816
		Deferred taxes						(5,357	)			(6,867	)
		Adjustment to contingent consideration						(3,100	)			–
		Changes in operating assets and liabilities:
			Trade accounts receivable					(18,332	)			(13,046	)
			Income tax receivable/payable					(183	)			(246	)
			Prepaid expenses and other assets					(4,699	)			(4,888	)
			Deferred contract costs					(16,879	)			(12,684	)
			Accounts payable					3,145				(836	)
			Accrued liabilities					(4,207	)			1,151
			Deferred revenue					47,528				29,597
			Other liabilities					3,161				(11	)
				Net cash provided by operating activities				33,041				5,367
Cash flows from investing activities
	Acquisition, net of cash acquired							–				(40,173	)
	Purchases of equipment and leasehold improvements							(1,836	)			(6,164	)
				Net cash used in investing activities				(1,836	)			(46,337	)
Cash flows from financing activities
	Proceeds from debt							–				40,000
	Debt issuance costs							(1,264	)			(1,550	)
	Payment of debt							(205,000	)			(4,750	)
	Payment of debt extinguishment costs							(2,050	)			–
	Proceeds from initial public offering, net of underwriting discounts and commissions							326,316				–
	Cash paid for offering costs							(6,601	)			–
	Proceeds from private placement							2,233				–
	Proceeds from the exercise of stock options							185				820
				Net cash provided by financing activities				113,819				34,520
				Net increase (decrease) in cash				145,024				(6,450	)
Cash, beginning of period								32,433				39,240
Cash, end of period							$	177,457			$	32,790

  

Jamf Holding Corp.
Supplemental Financial Information
Disaggregated Revenues
(In thousands)
(unaudited)
		Three Months Ended September 30,						Nine Months Ended September 30,
			2020			2019			2020			2019
SaaS subscription and support and maintenance		$	57,933		$	41,916		$	160,989		$	112,872
On-premise subscription			7,849			5,135			18,159			12,224
Recurring revenue			65,782			47,051			179,148			125,096
Perpetual licenses			1,017			2,283			3,811			7,381
Professional services			3,605			5,234			10,066			14,529
Non-recurring revenue			4,622			7,517			13,877			21,910
Total revenue		$	70,404		$	54,568		$	193,025		$	147,006

 

Jamf Holding Corp.
Supplemental Financial Information
Reconciliation of GAAP to non-GAAP Financial Data
(In thousands, except share and per share amounts)
(unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
Operating expenses	$	55,541			$	40,287			$	151,771			$	116,765
Amortization expense		(5,633	)			(5,627	)			(16,941	)			(16,886	)
Stock-based compensation		(1,952	)			(560	)			(3,451	)			(1,660	)
Acquisition-related expense		(1,092	)			(488	)			(4,328	)			(1,392	)
Acquisition-related earnout		(600	)			–				3,100				–
Non-GAAP Operating Expenses	$	46,264			$	33,612			$	130,151			$	96,827
	Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
Gross profit	$	55,165			$	40,492			$	149,128			$	106,404
Amortization expense		2,679				2,634				8,034				7,588
Stock-based compensation		376				38				452				156
Non-GAAP Gross Profit	$	58,220			$	43,164			$	157,614			$	114,148
Non-GAAP Gross Profit Margin		83	%			79	%			82	%			78	%
	Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
Operating income (loss)	$	(376	)		$	205			$	(2,643	)		$	(10,361	)
Stock-based compensation		2,328				598				3,903				1,816
Acquisition-related expense		1,092				488				4,328				1,392
Amortization expense		8,312				8,261				24,975				24,474
Acquisition-related earnout		600				–				(3,100	)			–
Non-GAAP Operating Income	$	11,956			$	9,552			$	27,463			$	17,321
Non-GAAP Operating Income Margin		17	%			18	%			14	%			12	%
	Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
Net loss	$	(5,093	)		$	(4,670	)		$	(13,806	)		$	(21,351	)
Stock-based compensation		2,328				598				3,903				1,816
Acquisition-related expense		1,092				488				4,328				1,392
Amortization expense		8,312				8,261				24,975				24,474
Acquisition-related earnout		600				–				(3,100	)			–
Loss on extinguishment of debt		5,213				–				5,213				–
Foreign currency transaction loss		154				861				471				1,311
Discrete tax items		(1,389	)			42				(1,599	)			66
Benefit for income taxes (1)		(3,050	)			(2,494	)			(7,470	)			(7,083	)
Non-GAAP Net Income	$	8,167			$	3,086			$	12,915			$	625
Net loss per share:
Basic	$	(0.04	)		$	(0.05	)		$	(0.13	)		$	(0.21	)
Diluted	$	(0.04	)		$	(0.05	)		$	(0.13	)		$	(0.21	)
Weighted-average shares used in computing net loss per share:
Basic		113,203,074				102,791,023				106,333,836				102,727,198
Diluted		113,203,074				102,791,023				106,333,836				102,727,198
Non-GAAP Net Income per Share:
Basic	$	0.07			$	0.03			$	0.12			$	0.01
Diluted	$	0.07			$	0.03			$	0.12			$	0.01
Weighted-average shares used in computing Non-GAAP Net Income per Share:
Basic		113,203,074				102,791,023				106,333,836				102,727,198
Diluted		116,688,193				104,600,602				109,188,051				103,701,743
(1) The related tax effects of the adjustments to Non-GAAP Net Income were calculated using the respective statutory tax rates for applicable jurisdictions, which is not materially different from our annual effective tax rate of approximately 25%.
	Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
Net cash provided by operating activities	$	23,608			$	15,086			$	33,041			$	5,367
Add:
Cash paid for interest		3,385				5,217				12,647				15,785
Cash paid for acquisition-related expense		1,700				488				3,300				1,392
Less:
Purchases of equipment and leasehold improvements		(494	)			(2,845	)			(1,836	)			(6,164	)
Unlevered free cash flow	$	28,199			$	17,946			$	47,152			$	16,380
Unlevered free cash flow margin		40	%			33	%			24	%			11	%