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Conversion Labs Q3 2020 Revenue up 252% to Record $11.0 Million

NEW YORK, Nov. 16, 2020 (GLOBE NEWSWIRE) — Conversion Labs, Inc. (OTCQB: CVLB) (OTCQB: CVLBD), a direct-to-consumer telemedicine and wellness company, reported results for the third quarter and first nine months ended September 30, 2020. All quarterly and first nine-month comparisons are to the same year-ago periods unless otherwise noted. The company will hold a conference call at 4:30 p.m. Eastern time today to discuss the results (see dial-in information, below.)

Q3 2020 Financial Highlights

  • Revenue totaled a record $11.0 million, up 252%.
  • Gross profit increased 238% to $8.3 million or 75.1% of revenue.
  • Annual recurring revenue (ARR) from subscriptions to products and services in September 2020 increased 458% to $19.3 million compared to September 2019 (see definition of ARR, below).

9M 2020 Financial Highlights

  • Revenue increased 186% to a record $24.4 million.
  • Gross profit increased 172% to $17.7 million or 72.6% of revenue.

Q3 Operational Highlights

  • Customers on subscription across all brands increased 30% over previous quarter.
  • Launched two new Shapiro MD over-the-counter products for women, including a leave-in hair conditioner and a thyroid heath support supplement.
  • Advanced the development of the company’s new cloud-based telemedicine platform, Veritas MD with third-party verification of the platform’s new e-prescription functionality. Veritas MD is designed to support the rapid growth and market expansion of the company’s telehealth brands. The official launch of the platform is planned before the end of the year.
  • Holistic health and preventative care expert, Dr. Jeff Toll, joined Conversion Labs’ medical advisory board to help guide the development and expand awareness of the company’s growing portfolio of telemedicine brands.
  • Completed $3.5 million equity financing with strategic investors in preparation for Nasdaq Capital Market uplist.

Q3 2020 Financial Summary

Revenue in the third quarter of 2020 increased 252% to a record $11.0 million from $3.1 million in the same year-ago quarter. The company’s PDFSimpli subsidiary, a software as a service (SaaS) that allows users to convert, edit, sign and share PDF documents, contributed net sales of $1.6 million, up 136% from the year-ago quarter.

Gross profit in the third quarter of 2020 increased 238% to $8.3 million, compared to $2.4 million in the same year-ago quarter. Gross profit as a percentage of revenue in the third quarter of 2020 decreased to 75.1% from 78.2% in the same year-ago quarter. The decrease was due primarily to product mix.

Operating expense in the third quarter of 2020 was $28.8 million, up from $3.4 million in the same year-ago quarter. The increase was primarily due to increases of $8.5 million in selling and marketing expenses, as well as $16.7 million in general and administrative expenses, $120,000 in other operating expenses, $90,000 in customer service and $57,000 in development costs.

General and administrative expenses for the three months ended September 30, 2020 included stock-based compensation of $16.3 million, with the majority related to a restricted share issuance liability attributable to the attainment of a performance threshold specifically in the third quarter of 2020.

Net loss attributable to common stockholders for the third quarter of 2020 was $24.2 million or $(1.65) per share, as compared to a net loss attributable to common stockholders of $944,000 or $(0.09) per share in the third quarter of 2019. In addition to the stock-based compensation expense, net loss for the third quarter of 2020 included other non-cash or financing-related charges, such as interest expense of $291,000 and combined amortization expenses of $630,000.

Adjusted EBITDA, a non-GAAP term, totaled negative $3.4 million in the third quarter of 2020, compared to negative $248,000 in the same year-ago quarter (see definition of this non-GAAP term and reconciliation to GAAP, below.)

Cash totaled $917,000 at September 30, 2020, as compared to $336,000 at June 30, 2020. Subsequent to the end of the third quarter, the company completed a private placement equity offering with institutional investors that generated net proceeds of $13.2 million. As of November 16, 2020, the company’s cash balance totaled approximately $11.7 million.

First Nine Months 2020 Financial Summary

Revenue in the first nine months of 2020 increased 186% to a record $24.4 million from $8.5 million in the same year-ago period. The company’s PDFSimpli subsidiary, a software as a service (SaaS) that allows users to convert, edit, sign and share PDF documents, contributed net sales of $4.1 million, up 241% from the year-ago period.

Gross profit in the first nine months of 2020 increased 172% to $17.7 million, compared to $6.5 million in the same year-ago period. Gross profit as a percentage of revenue in the first nine months of 2020 decreased to 72.6% from 76.4% in the same year-ago period. The decrease was due to higher product costs, resulting from the impact of COVID-19 related disruptions to the company’s product supply chain, causing increased costs to procure production inputs. The company expects this to be resolved over time, with an anticipated return to its historically higher margin.

Operating expense in the first nine months of 2020 was $43.2 million, up from $8.9 million in the same year-ago period. The increase was primarily due to increases of $16.1 million of selling and marketing expenses, as well as $18.1 million in general and administrative expenses, $80,000 in customer service and $131,000 in development costs. The increase was partially offset by a decrease of $36,000 in other operating expenses.

General and administrative expenses for the nine months ended September 30, 2020 included stock-based compensation of $16.9 million, with the majority related to a restricted share issuance liability attributable to the attainment of a performance threshold specifically in the third quarter of 2020.

Net loss attributable to common stockholders for the first nine months of 2020 was $31.3 million or $(2.49) per share, as compared to a net loss attributable to common stockholders of $2.4 million or $(0.25) per share in the first nine months of 2019. The net loss for the first nine months of 2020 also included certain non-cash or financing-related charges, such as interest expense of $1.3 million, amortization expenses of $93,000, financing transactions expense of $62,000, acceleration of debt discount of $500,000, inventory valuation adjustment of $769,000, non-cash deemed distributions to common and preferred shareholders of $4.9 million, and stock-based compensation expense of $16.9 million.

Adjusted EBITDA, a non-GAAP term, totaled negative $5.3 million in the first nine months of 2020, compared to negative $787,000 in the same year-ago period (see definition of this non-GAAP terms and reconciliation to GAAP, below.)

Management Commentary

“Q3 was another quarter of outperformance across our key financial and operational metrics, as 2020 continued to be a transformational year for Conversion Labs,” commented company CEO, Justin Schreiber. “Most of our growth is due to the launch of our direct-to-consumer telemedicine platform and the overall performance of our entire brand portfolio. This has generated strong organic growth and an increasing amount of subscription revenue.

“As we all have witnessed, the ongoing COVID-19 pandemic has accelerated everything e-Commerce, but this has been especially true for telemedicine. The many benefits and advantages of telemedicine, and particularly telepharmacy, have now been more revealed by the rapidly increasing consumer adoption.

“The tailwinds created by this paradigm shift has clearly helped strengthen the demand for our brands, and especially in the third quarter, resulting in record revenue of $11 million. This was up 21% from just the previous quarter and up 252% compared to the same year-ago quarter.

“This acceleration has continued into the fourth quarter, with October continuing to set new records. Net sales came in at $4.1 million, up more than 245% over October of last year. In fact, we did more this October than for the whole fourth quarter of last year. Given this acceleration in October, and combined with November as typically being our strongest month, we remain confident we will achieve our upwardly revised guidance of $40 million in revenues for 2020.

“Looking at October and the first couple weeks of November, we have actually achieved an overall annualized revenue run-rate of nearly $50 million. This compares to $12.5 million for all of last year — a solid four-fold increase. This run-rate is also up by more than $2.1 million from September, showing a continued rapid acceleration in the overall growth of the business.

“Another key metric to watch is our annual recurring revenue (ARR) from subscriptions to our products and services. In the last month of the third quarter, that is September, it increased by 458% to $19.3 million compared to September of last year. In October, this jumped by $2.8 million or 14% to $22.1 million, and was up 514% versus October of last year. So, our fourth quarter is well on track to be another record quarter in terms of topline revenue and ARR from subscriptions.

“Given the consistent trends since the beginning of the year, while amazing, these results are very much in line with what we planned for and expected. It also continues to validate the expertise of our team, our technology platform and telehealth provider network, and the incredible growth opportunity ahead. We see this as only the first inning for Conversion Labs, as we continue to build out the foundation for an industry leading telehealth business.

“As an early mover in telehealth, we believe the coming quarters will be pivotal in establishing our reputation and status as a leader in this rapidly growing marketplace. While we are seeing strong growth across the business, it is important to recognize that we are making big investments in our people and infrastructure that are essential to support the exponential growth that lies ahead. This includes big investments in our telehealth technology platform, our provider network, and on medical, financial, operations and compliance personnel that are critical as we scale the business.

“To support these investments in our growth, we recently completed a $15 million financing led by a select group of institutional investors who believe in our long-term outlook. Our balance sheet is now stronger than it has ever been before, and this will enable us to scale many of our planned campaigns where we have proven and very attractive unit economics. It also gives us the ability to test and scale new traffic sources, both online and offline.

“The funding also enables us to continue the buildout of our telehealth platform and our planned uplist to the Nasdaq capital market. We believe a Nasdaq listing can be transformational for all shareholders. It will open the doors wider to institutional investors and especially for retail, where we have a very relatable and compelling investment story for the individual investor.

“Also, in preparation for Nasdaq, we recently appointed two fairly impressive members to our board of directors, Roberto Simon and Dr. Connie Mariano. Roberto currently serves as the CFO of WEX, a $6+ billion fintech services provider traded on the NYSE. He previously served as the CFO of Revlon, overseeing its global finance and IT operations as it grew to nearly $2 billion in annual sales.

“Dr. Mariano has served our country as a U.S. Navy Rear Admiral and as the White House Physician for three sitting presidents. Needless to say, she has been a major pioneer in breaking barriers and has an incredible presence as a leader in healthcare.

“We will also soon formally launch the expansion of Rex MD with new medical indications. We expect this to cement our presence as a leader in men’s health. Rex MD’s new capabilities will be delivered by our new proprietary telehealth technology platform, Veritas MD, which is also nearing its official launch.

“We are in late-stage discussions with certain key female influencers that we believe will be a major catalyst for growth in our Shapiro MD telemedicine offering. This will dovetail with the licensing arrangement we attained for Restoresea’s leading medical grade skincare technology platform.

“We’re very excited to leverage their platform for the upcoming launch of our new teledermatology brand, Nava MD, that we announced last month. Restorsea’s IP and clinical results were the culmination of over $50 million in R&D investment that produced 35 patents, and broad industry and medical acclaim. Nava MD will be positioned as an online skincare telehealth brand that offers prescription-grade teledermatology products to patients in all 50 states. 

“Looking ahead, we see our Conversion Labs telemedicine platform continuing to drive growth and opportunities, as we continue to build shareholder value over the months and years to come.”

Conference Call

Conversion Labs management will host a conference call followed by a question and answer period to discuss the company’s financial results and outlook.

Date: Monday, November 16, 2020
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 1-800-430-8332
International dial-in number: 1-720-452-9103
Conference ID: 9683420

The conference call will be webcast live and available for replay here as well as via a link in the Investors section of the company’s website at ir.conversionlabs.com.

Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact CMA at 1-949-432-7566.

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

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 9683420

About Conversion Labs

Conversion Labs, Inc. is a telemedicine company with a portfolio of online direct-to-consumer brands. The company’s brands combine virtual medical treatment with prescription medications and unique over-the-counter products. Its network of licensed physicians offers telemedicine services and direct-to-consumer pharmacy to consumers across the U.S. To learn more, visit Conversionlabs.com.

Annual Recurring Revenue (ARR)

Conversion Labs calculates annual recurring revenue (ARR) by multiplying by 12 the monthly sum of revenue attributed exclusively to automatic subscription sales from customers that are engaged in the company’s rebill structure for the brands of Shapiro MD, Rex MD and PDFSimpli. In the company’s calculation of ARR, it does not consider sales from customers that repurchase its products themselves in the company’s checkout pages, Amazon Marketplace or through assistance of the company’s customer service representatives, since those sales have a marginal advertising/marketing expense associated with the respective sale. The company also does not consider the revenue attributed to the initial purchase upon acquisition of the respective customer.

About the Use of Non-GAAP Financial Measures

The management of Conversion Labs believes that the use the non-GAAP measure, adjusted EBITDA, is helpful for an investor to assess the performance of the company. The company defines adjusted EBITDA as income (loss) attributable to common shareholders before interest, taxes, depreciation, amortization, financing expense, acceleration of debt discount, inventory valuation adjustment, and stock-based compensation expense.

Adjusted EBITDA is not a measurement of financial performance under generally accepted accounting principles in the United States, or GAAP. Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company’s non-cash operating expenses, management believes that providing a non-GAAP financial measure that excludes non-cash and non-recurring expenses allows for meaningful comparisons between the company’s core business operating results and those of other companies, as well as providing the company with an important tool for financial and operational decision making and for evaluating its own core business operating results over different periods of time.

The company’s adjusted EBITDA measure may not provide information that is directly comparable to that provided by other companies in its industry, as other companies in its industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. The company’s adjusted EBITDA is not a measurement of financial performance under GAAP, and should not be considered as an alternative to operating income (loss) or as an indication of operating performance or any other measure of performance derived in accordance with GAAP. Conversion Labs management does not consider adjusted EBITDA to be a substitute for, or superior to, the information provided by GAAP financial results.

The following table sets-forth non-GAAP adjusted EBITDA reconciled to its nearest comparable GAAP equivalent:

                   
    Three months ended
September 30,		   Nine months ended
September 30,		  
      2020       2019       2020       2019    
Net loss attributable to common shareholders   $ (24,196,006 )   $ (943,804 )   $ (31,306,259 )   $ (2,425,656 )  
                   
Interest expense, net     291,096       130,936       1,313,010       430,956    
                   
Amortization expense     92,846       83,903       287,710       251,709    
                   
Amortization of debt discount     536,866       106,585       1,276,190       192,853    
                   
Financing transactions expense     –       –       62,012       –    
                   
Acceleration of debt discount     –       4,536       500,145       4,536    
                   
Inventory valuation adjustment     –       –       769,378       –    
                   
Deemed distribution to holders of common and Series B Preferred stock     3,573,636       –       4,910,045       –    
                   
Stock-based compensation expense     16,331,558       369,415       16,901,233       758,475    
Adjusted EBITDA   $ (3,370,004 )   $ (248,429 )   $ (5,286,536 )   $ (787,127 )  
                   

Important Cautions Regarding Forward-Looking Statements

This news release includes 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, as amended, regarding, among other things our plans, strategies and prospects — both business and financial. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Many of the forward-looking statements contained in this news release may be identified by the use of forward-looking words such as “believe,” “expect,” “anticipate,” “should,” “planned,” “will,” “may,” “intend,” “estimated,” and “potential,” among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this news release include market conditions and those set forth in reports or documents that we file from time to time with the United States Securities and Exchange Commission. All forward-looking statements attributable to Conversion Labs, Inc. or a person acting on its behalf are expressly qualified in their entirety by this cautionary language.

Trademarks are the property of their respective owners.

Company Contact

Conversion Labs
Juan Manuel Piñeiro Dagnery
CFO
Email Contact

Media and Investor Relations Contact

Ron Both or Grant Stude
CMA Investor Relations
Tel (949) 432-7566
Email Contact

 
 
CONVERSION LABS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
       
  September 30, 2020   December 31, 2019
       
ASSETS
       
Current Assets      
Cash $ 916,637     $ 1,106,624  
Accounts receivable, net   414,342       97,448  
Product deposit   1,093,388       150,000  
Inventory, net   1,858,545       950,059  
Other current assets   370,078       442,971  
Total Current Assets   4,652,990       2,747,102  
       
Non-current assets      
Right of use asset, net   18,173       23,625  
Capitalized Software, net   334,585       –  
Intangible assets, net   423,743       675,452  
Total non-current assets   776,501       699,077  
       
Total Assets $ 5,429,491     $ 3,446,179  
       
LIABILITIES AND STOCKHOLDERS’ DEFICIT      
       
Current Liabilities      
Accounts payable and accrued expenses $ 7,269,145     $ 3,051,156  
Notes payable, net   1,754,143       814,734  
Contract liabilities   412,616       109,552  
Total Current Liabilities   9,435,904       3,975,442  
       
Long-term Liabilities      
Lease Liability   28,241       29,978  
Contingent consideration on purchase of LegalSimpli   100,000       500,000  
Liability to issue common stock   218,848       –  
Series B Preferred Stock – put liability   3,541,137       –  
Deferred tax liability   70,000       70,000  
Total Liabilities   13,394,130       4,575,420  
       
Commitments and contingencies       
       
Stockholders’ Deficit      
Preferred Stock, $0.0001 per value; 4,996,500 and 5,000,000 shares authorized      
       
Series B Preferred Stock, $0.0001 per value; 5,000 and 0 shares authorized, 3,500 and 0 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively   –       –  
       
Common stock, $0.01 par value; 100,000,000 shares authorized, 15,634,962 and 10,680,730 shares issued, 15,531,922 and 10,577,690 outstanding as of September 30, 2020 and December 31, 2019, respectively   156,349       106,807  
       
Additional paid-in capital   40,614,348       15,663,626  
Accumulated deficit   (47,901,176 )     (16,594,917 )
    (7,130,479 )     (824,484 )
Treasury stock, 103,040 and 103,040 shares, at cost   (163,701 )     (163,701 )
Total Conversion Labs, Inc. Stockholders’ Deficit   (7,294,180 )     (988,185 )
       
Non-controlling interest   (670,459 )     (141,056 )
       
Total Stockholders’ Deficit   (7,964,639 )     (1,129,241 )
       
Total Liabilities and Stockholders’ Deficit $ 5,429,491     $ 3,446,179  
       

CONVERSION LABS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                       
  Three Months Ended
September 30, 		  Nine Months Ended
September 30,
  2020     2019     2020     2019  
                       
Product revenues, net $ 9,433,136     $ 2,461,765     $ 20,258,750     $ 7,309,524  
Software revenues, net   1,567,627       664,962       4,136,608       1,214,600  
Service revenues, net   5,000       –       5,000       –  
Total Revenues, net   11,005,763       3,126,727       24,400,358       8,524,124  
                       
Cost of product revenue   2,338,831       612,072       5,800,992       1,811,938  
Cost of software revenue   396,105       68,009       883,791       201,327  
Cost of revenues   2,734,936       680,081       6,684,783       2,013,265  
                       
Gross Profit   8,270,827       2,446,646       17,715,575       6,510,859  
                       
Expenses                      
Selling & marketing expenses   10,528,833       2,073,016       21,669,046       5,580,276  
General and administrative expenses   17,589,366       929,471       20,096,893       2,034,067  
Operating expenses   336,001       216,065       663,752       700,225  
Customer service expenses   230,788       140,579       488,455       408,795  
Development Costs   118,346       61,221       288,813       157,736  
Total expenses   28,803,334       3,420,352       43,206,959       8,881,099  
                       
Operating Loss   (20,532,507 )     (973,706 )     (25,491,384 )     (2,370,240 )
                       
Interest expense, net   (291,096 )     (130,936 )     (1,313,010 )     (430,956 )
                       
Loss from operations before provision for income taxes   (20,823,603 )     (1,104,642 )     (26,804,394 )     (2,801,196 )
                       
Provision for income taxes   –       –       –       –  
                       
Net Loss   (20,823,603 )     (1,104,642 )     (26,804,394 )   – (2,801,196 )
                       
Net (loss) attributable to noncontrolling interests   (201,233 )     (160,838 )     (408,180 )     (375,540 )
                       
Net loss attributable to Conversion Labs, Inc. $ (20,622,370 )   $ (943,804 )   $ (26,396,214 )   $ (2,425,656 )
                       
Deemed distribution to holders of common and Series B Preferred stock   (3,573,636 )     –       (4,910,045 )     –  
                       
Net loss attributable to Conversion Labs, Inc. common stockholders $ (24,196,006 )   $ (943,804 )   $ (31,306,259 )   $ (2,425,656 )
                       
Basic loss per share attributable to Conversion Labs, Inc. common stockholders $ (1.65 )   $ (0.09 )   $ (2.49 )   $ (0.25 )
Diluted loss per share attributable to Conversion Labs, Inc. common stockholders $ (1.65 )   $ (0.09 )   $ (2.49 )   $ (0.25 )
                       
Weighted Average number of common shares outstanding:                      
Basic   14,674,693       10,134,968       12,581,401       9,627,093  
Diluted   14,674,693       10,134,968       12,581,401       9,627,093  
                       



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Atara Biotherapeutics to Participate at Two Upcoming Investor Conferences

Atara Biotherapeutics to Participate at Two Upcoming Investor Conferences

SOUTH SAN FRANCISCO, Calif.–(BUSINESS WIRE)–Atara Biotherapeutics, Inc. (Nasdaq: ATRA), a pioneer in T-cell immunotherapy, leveraging its novel allogeneic EBV T-cell platform to develop transformative therapies for patients with serious diseases including solid tumors, hematologic cancers and autoimmune disease, today announced that Company management will participate at two upcoming virtual conferences.

Stifel 2020 Virtual Healthcare Conference

Wednesday, November 18, 2020 at 4:40 p.m. EST

Fireside Chat with Pascal Touchon, President and Chief Executive Officer

Evercore ISI 3rd Annual Virtual HealthCONx Conference

Wednesday, December 2, 2020 at 8:50 a.m. EST

Fireside Chat with Pascal Touchon and Jakob Dupont, Global Head of Research and Development

Live video webcasts of both presentations will be available by visiting the Investor Events and Presentations section of atarabio.com. Archived replays will be available on the Company’s website for approximately 14 days following the live webcasts.

About Atara Biotherapeutics, Inc.

Atara Biotherapeutics, Inc.(@Atarabio) is a pioneer in T-cell immunotherapy leveraging its novel allogeneic EBV T-cell platform to develop transformative therapies for patients with serious diseases including solid tumors, hematologic cancers and autoimmune disease. With our lead program in Phase 3 clinical development, Atara is the most advanced allogeneic T-cell immunotherapy company and intends to rapidly deliver off-the-shelf treatments to patients with high unmet medical need. Our platform leverages the unique biology of EBV T cells and has the capability to treat a wide range of EBV-associated diseases, or other serious diseases through incorporation of engineered CARs (chimeric antigen receptors) or TCRs (T-cell receptors). Atara is applying this one platform to create a robust pipeline including: tab-cel® (tabelecleucel) in Phase 3 development for Epstein-Barr virus-driven post-transplant lymphoproliferative disease (EBV+ PTLD); ATA188, a T-cell immunotherapy targeting EBV antigens as a potential treatment for multiple sclerosis; and multiple next-generation chimeric antigen receptor T-cell (CAR-T) immunotherapies for both solid tumors and hematologic malignancies. Improving patients’ lives is our mission and we will never stop working to bring transformative therapies to those in need. Atara is headquartered in South San Francisco and our leading-edge research, development and manufacturing facility is based in Thousand Oaks, California. For additional information about the company, please visit atarabio.com and follow us on Twitter and LinkedIn.

Investors

Eric Hyllengren

Vice President, Investor Relations & Finance

Atara Biotherapeutics

805-395-9669

[email protected]

Media

Kerry Beth Daly

Head, Corporate Communications

Atara Biotherapeutics

516-982-9328

[email protected]

KEYWORDS: California United States North America

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

MEDIA:

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Plymouth Industrial REIT to Expand its Scale in Ohio with Agreement to Purchase Industrial Portfolio for $94 Million

Plymouth Industrial REIT to Expand its Scale in Ohio with Agreement to Purchase Industrial Portfolio for $94 Million

BOSTON–(BUSINESS WIRE)–
Plymouth Industrial REIT, Inc. (NYSE: PLYM) announced it has signed a definitive agreement to acquire a portfolio of industrial buildings in Akron and Canton, Ohio totaling 2.1 million square feet for approximately $94 million. The acquisition is expected to close by November 30, 2020, subject to customary closing conditions, and is projected to provide an annual current yield of approximately 7.5%.

The portfolio is comprised of 10 Class B industrial buildings that are 98.7% leased to 16 tenants from a variety of industries, including transportation and logistics, healthcare, industrial manufacturing and food and beverage. The acquisition is expected to bring Plymouth’s scale in the Cleveland metropolitan area to over 3.5 million square feet and increase the size of its Ohio portfolio to over 7 million square feet.

Pendleton White, Jr., President and Chief Investment Officer, noted, “We are experiencing strong performance from our properties in Cincinnati, Columbus and Cleveland as industrial tenants are tied closely to the labor available in these markets. This portfolio’s location in greater Cleveland, which continues to have positive net absorption and low vacancy, will provide us immediate scale in two of the tightest markets – Akron and Canton.”

About Plymouth

Plymouth Industrial REIT, Inc. is a vertically integrated and self-managed real estate investment trust focused on the acquisition and operation of single and multi-tenant industrial properties located in secondary and select primary markets across the United States. The Company seeks to acquire properties that provide income and growth that enable the Company to leverage its real estate operating expertise to enhance shareholder value through active asset management, prudent property re-positioning and disciplined capital deployment.

Forward-Looking Statements

This press release includes “forward-looking statements” that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this release do not constitute guarantees of future performance. Investors are cautioned that statements in this press release, which are not strictly historical statements, including, without limitation, statements regarding management’s plans, objectives and strategies, constitute forward-looking statements. Such forward-looking statements are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statement, many of which may be beyond our control. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Tripp Sullivan

SCR Partners

(615) 942-7077

[email protected]

KEYWORDS: United States North America Massachusetts

INDUSTRY KEYWORDS: Construction & Property REIT

MEDIA:

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HAGENS BERMAN, NATIONAL TRIAL ATTORNEYS, Alerts Interface, Inc. (TILE) Investors: Securities Fraud Case Filed Over Accounting Improprieties, Investors with Losses Should Contact Its Attorneys Now

SAN FRANCISCO, Nov. 16, 2020 (GLOBE NEWSWIRE) — Hagens Berman urges Interface, Inc. (NASDAQ: TILE) investors with significant losses to submit your losses now. A securities fraud class action has been filed and certain investors may have valuable claims.

Class
Period: Mar. 2, 2018 – Sept. 28, 2020
Lead Plaintiff Deadline: Jan. 11, 2021
Visit:www.hbsslaw.com/investor-fraud/TILE
Contact An Attorney Now:[email protected]
                                          844-916–0895

Interface, Inc.
(
TILE
)
Securities Class Action
:

The lawsuit centers on Interface’s disclosures of its financial results, including its accounting for certain expenses such as management bonus accruals, independent consultant fees and stock-based compensation.

According to the complaint, Interface and senior management repeatedly pleased investors when it reported income and earnings per share growth, consistently meeting or exceeding analysts’ estimates and assured them that the Company’s internal controls over financial reporting were effective.

Investors began to learn the truth, according to the complaint, on Apr. 24, 2019 when Interface announced that the SEC had served three separate subpoenas on the Company probing its earnings per share calculations from 2014 – 2017. The Company also announced that it had placed its Chief Accounting Officer Gregory Bauer on administrative leave when it learned Bauer added notes to materials produced to the SEC. Yet, the Company and senior management maintained they had cooperated with the SEC investigation since its inception.

Then, on Sept. 28, 2020, the SEC filed a settled action against the Company for securities law violations, finding that (1) during Q2 2015 through Q2 2016 Interface made unsupported manual accounting adjustments to certain expenses to meet EPS estimates, (2) Bauer, and former Chief Financial Officer (Patrick Lynch) directed the unsupported entries, and (3) Interface impeded the SEC’s investigation.

These disclosures drove the price of Interface shares down sharply.

“We’re focused on investors’ losses and proving Interface and senior management intentionally misled investors through illegal earnings smoothing,” said Reed Kathrein, the Hagens Berman partner leading the investigation.

If you are an Interface investor and have significant losses, or have knowledge that may assist the firm’s investigation, click here to discuss your legal rights with Hagens Berman.

Whistleblowers: Persons with non-public information regarding Interface should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844–916–0895 or email [email protected].


About Hagens Berman


Hagens Berman is a national law firm with nine offices in eight cities around the country and eighty attorneys. The firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the firm and its successes is located at hbsslaw.com. For the latest news visit our newsroom or follow us on Twitter at @classactionlaw.

Contact:
Reed Kathrein, 844-916-0895



Posted on

Nielsen To Present At Virtual J.P. Morgan Ultimate Services Investor Conference

PR Newswire

NEW YORK, Nov. 16, 2020 /PRNewswire/ — Nielsen Holdings plc (NYSE: NLSN), today announced that the Company will be presenting at the Virtual J.P. Morgan Ultimate Services Investor Conference on Thursday, November 19.

On Thursday, November 19, 2020, Karthik Rao, Chief Operating Officer and Sara Gubins, SVP, Head of Investor Relations and Treasury, will participate in a fireside chat at 1:25pm Eastern Time. 

Interested parties are invited to listen to the event live on Nielsen’s Investor Relations website at http://nielsen.com/investors under Events & Presentations. A replay of the presentations will be available on http://nielsen.com/investors following the respective event. 


About Nielsen


Nielsen Holdings plc (NYSE: NLSN) is a global measurement and data analytics company that provides the most complete and trusted view available of consumers and markets worldwide. Nielsen is divided into two business units. Nielsen Global Media provides media and advertising industries with unbiased and reliable metrics that create a shared understanding of the industry required for markets to function. Nielsen Global Connect provides consumer packaged goods manufacturers and retailers with accurate, actionable information and insights and a complete picture of the complex and changing marketplace that companies need to innovate and grow.

Our approach marries proprietary Nielsen data with other data sources to help clients around the world understand what’s happening now, what’s happening next, and how to best act on this knowledge.  An S&P 500 company, Nielsen has operations in over 90 countries, covering more than 90% of the world’s population. For more information, visit www.nielsen.com.

Cision View original content:http://www.prnewswire.com/news-releases/nielsen-to-present-at-virtual-jp-morgan-ultimate-services-investor-conference-301173888.html

SOURCE Nielsen Holdings plc

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CP recognized for leadership in sustainability, named to 2020 Dow Jones Sustainability Index North America

PR Newswire

CALGARY, AB, Nov. 16, 2020 /PRNewswire/ – Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) is proud to announce that it has been added to the 2020 Dow Jones Sustainability Index (DJSI) North America.

The index measures corporate sustainability leaders’ performance through a comprehensive assessment of economic, environmental and social criteria. The top companies were selected this year from a record number of participants in the 2020 Corporate Sustainability Assessment.

“CP is always working to develop innovative, impactful ways to enhance the communities we serve and protect the environment,” said Keith Creel, CP President and Chief Executive Officer. “We have been a part of the North American landscape since 1881, and our commitment to people, the planet, safety and ethics is unwavering. I am proud that the DJSI has recognized the hard work and commitment of the entire CP family.”

In July 2020, CP released its first public statement on climate change. The statement acknowledges the effects of rising global temperatures and lays out CP’s commitment to ongoing efforts to mitigate the impacts.

The statement supports the goals of the Paris Agreement and the Pan-Canadian Framework on Clean Growth and Climate Change, which seek to limit global temperature rise to well below 2°C above pre-industrial levels.

“We congratulate CP for being included in the DJSI North America,” said Manjit Jus, Global Head of ESG Research and Data, S&P Global. “A DJSI distinction is a reflection of being a sustainability leader in your industry.”

CP has long focused on energy-saving initiatives as a core component of its sustainability practices. Since 1990, CP has improved its locomotive fuel efficiency by more than 40 percent through many different initiatives and programs designed to improve fuel economy and reduce air emissions. The application of leading practices, emerging tools and relationship building across the value chain and industrial sector will remain critical as CP addresses climate change challenges.

For more information about CP’s sustainability practices and initiatives, visit sustainability.cpr.ca.

About Canadian Pacific
Canadian Pacific is a transcontinental railway in Canada and the United States with direct links to major ports on the west and east coasts. CP provides North American customers a competitive rail service with access to key markets in every corner of the globe. CP is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpr.ca to see the rail advantages of CP. CP-IR

Cision View original content:http://www.prnewswire.com/news-releases/cp-recognized-for-leadership-in-sustainability-named-to-2020-dow-jones-sustainability-index-north-america-301173938.html

SOURCE Canadian Pacific

Posted on

KE Holdings Inc. Announces Third Quarter 2020 Unaudited Financial Results

KE Holdings Inc. Announces Third Quarter 2020 Unaudited Financial Results

BEIJING–(BUSINESS WIRE)–
KE Holdings Inc. (“Beike” or the “Company”) (NYSE: BEKE), a leading integrated online and offline platform for housing transactions and services, today announced its unaudited financial results for the third quarter ended September 30, 2020.

Business Highlights for the Third Quarter of 2020

  • Gross transaction value (GTV)1wasRMB1,050.0 billion (US$154.6 billion), an increase of 87.2% year-over-year. GTV of existing home transactions was RMB576.1 billion (US$84.8 billion), an increase of 71.8% year-over-year. GTV of new home transactions was RMB420.7 billion (US$62.0 billion), an increase of 105.7% year-over-year. GTV of emerging and other services was RMB53.2 billion (US$7.8 billion), an increase of 151.5% year-over-year.
  • Net revenues were RMB20.5 billion (US$3.0 billion), an increase of 70.9% year-over-year.
  • Net income was RMB75 million (US$11 million). Adjusted net income2was RMB1,858 million (US$274 million), an increase of 210.6% year-over-year.
  • Number of stores was 44,883 as of September 30, 2020, a 41.7% increase year-over-year.
  • Number of agents was 477,810 as of September 30, 2020, a 50.7% increase year-over-year.
  • Mobile monthly active users (MAU)3averaged47.9 million, an increase of 82.1% year-over-year.

Mr. Stanley Yongdong Peng, Co-founder and Chief Executive Officer of Beike, commented, “We are pleased to deliver strong results for our first quarter as a public company. In the third quarter, we continued to strengthen our infrastructure, including the Agent Cooperation Network, by scaling up our network of community centric stores and agents, as well as expanding our online presence at a rapid pace. With improved customer experience on our platform, we achieved an 87.2% increase in GTV and a 70.9% increase in net revenues year-over-year. For existing home transaction services, with strong demand for quality housing transaction services from both home sellers and buyers, we further grew our GTV by 71.8% year-over-year. For example, facilitated by our big data technology, the Premium Package for Home Sellers was tailor-made for home sellers for more effective housing transactions. For new home transaction services, with increasing demand from real estate developers for professional brokerage services and our enhanced capability to achieve effective sell-through, our GTV of new home transaction services increased by 105.7% year-over-year. We partnered with real estate developers to adopt the 3-Day Free Return policy, while performing extensive risk assessment to ensure strong management of receivables. Leveraging our world-class database for residential housing and A.I. technology, we continued to standardize and digitalize the industry by adopting innovative applications, such as our Online Mortgage Processing Service, Xiaobei AI-assistant 2.0 and VR Lite. As we further execute our strategic initiatives centered on taking care of our customers and supporting service providers, we remain enthusiastic about our future path and are confident to deliver sustainable value to our housing customers, agents and other platform participants over the long-term.”

Mr. Tao Xu, Chief Financial Officer of Beike, further commented, “We achieved robust financial and operational growths in the third quarter. Our net revenues increased by 70.9% year-over-year to RMB20.5 billion, driven by solid growth of GTV of both existing home and new home transaction services, along with increased productivity and continuously improved service quality on our platform. Additionally, we achieved strong improvement in profitability in the third quarter as a result of greater operating leverage. Adjusted net income increased by 210.6% to RMB1,858 million (US$274 million) from RMB598 million for the same period in 2019. Looking ahead, drawing upon our infrastructure that we endeavor to iterate, amplifying our extensive industry experience in reconstructing and streamlining the complex housing transactions, we will continue to grow in all fronts, diversify our business offerings across housing related products and services. We remain strongly committed to our mission of admirable service and joyful living, and reshaping the industry while capturing the tremendous opportunities along with all our platform participants.”

Third Quarter 2020 Financial Results

Net Revenues

Net revenues increased by 70.9% to RMB20.5 billion (US$3.0 billion) in the third quarter of 2020 from RMB12.0 billion in the same period of 2019, primarily attributable to the increase in GTV of both existing home transaction services and new home transaction services.

  • Net revenues from existing home transaction services increased by 46.2% to RMB8.8 billion (US$1.3 billion) in the third quarter of 2020 from RMB6.1 billion in the same period of 2019, primarily attributable to a 71.8% increase in GTV of existing home transactions to RMB576.1 billion (US$84.8 billion) in the third quarter of 2020 from RMB335.4 billion in the same period of 2019. Among that, (i) the revenue derived from platform service, franchise service and other value-added services, which are mostly charged to connected agents on the Company’s platform increased by 95.7% to RMB0.9 billion (US$0.1 billion) in the third quarter of 2020 from RMB0.5 billion in the same period of 2019, as the GTV of existing home transactions served by connected agents on the Company’s platform increased by 110.7% to RMB290.4 billion (US$42.8 billion) in the third quarter of 2020 from RMB137.8 billion in the same period of 2019; (ii) commission revenue increased by 42.0% to RMB7.9 billion (US$1.2 billion) in the third quarter of 2020 from RMB5.6 billion in the same period of 2019, driven by the GTV of existing home transactions served by the Company’s Lianjia brand increased by 44.6% to RMB285.7 billion (US$42.1 billion) in the third quarter of 2020 from RMB197.6 billion in the same period of 2019.
  • Net revenues from new home transaction services increased by 95.0% to RMB11.1 billion (US$1.6 billion) in the third quarter of 2020 from RMB5.7 billion in the same period of 2019, primarily attributable to an increase in the GTV of new home transactions to RMB420.7 billion (US$62.0 billion) in the third quarter of 2020 from RMB204.5 billion in the same period of 2019, among which, RMB82.8 billion (US$12.2 billion) and RMB49.3 billion, respectively, were served by Lianjia brand.
  • Net revenues from emerging and other services increased by 116.6% to RMB0.6 billion (US$0.1 billion) in the third quarter of 2020 from RMB0.3 billion in the same period of 2019. The increase was primarily due to the increase of penetration level of the Company’s financial services around the housing transaction services.

Cost of Revenues

Cost of revenues increased by 78.0% to RMB16.2 billion (US$2.4 billion) in the third quarter of 2020 from RMB9.1 billion in the same period of 2019, primarily attributable to the increase in split commission to connected agents and other sales channels and the increase in internal commission and compensation.

  • Commission – split. The Company’s cost of revenues for commissions to connected agents and other sales channels increased by 143.8% to RMB7.7 billion (US$1.1 billion) in the third quarter of 2020 from RMB3.2 billion in the same period of 2019. The increase was primarily attributable to the incremental increase in the number of new home transactions completed through connected agents and other sales channels, which in turn was driven by the increasing number of connected agents and other sales channels joining our platform, as well as the promotional measures related to new home transaction services to incentivize the connected agents and other sales channels on our platform in the third quarter of 2020.
  • Commission and compensation – internal. The Company’s cost of revenues for internal commission and compensation increased by 36.2% to RMB6.6 billion (US$1.0 billion) in the third quarter of 2020 from RMB4.9 billion in the same period of 2019. The increase was primarily attributable to the increase in the number of new and existing home transactions completed through Lianjia brand.
  • Cost related to stores. The Company’s cost related to stores remained relatively stable at RMB0.8 billion (US$0.1 billion) in the third quarter of 2020 as compared to the same period of 2019, mainly attributable to the Company’s efforts to optimize the Company’s store network and store size and improve the efficiency of each store.

Gross Profit

Gross profit increased by 49.1% to RMB4.4 billion (US$0.6 billion) in the third quarter of 2020 from RMB2.9 billion in the same period of 2019. Gross margin was 21.3% in the third quarter of 2020, compared to 24.4% in the same period of 2019. The decrease in gross margin was mainly attributable to the increase of share-based compensation expenses and structural change that more new home transactions were facilitated by connected stores and agents and other sales channels.

Income (Loss) from Operations

Operating expenses increased by 75.8% to RMB4.5 billion (US$0.7 billion) in the third quarter of 2020 from RMB2.5 billion in the same period of 2019. General and administrative expenses were RMB2,649 million (US$390 million) in the third quarter of 2020, compared to RMB1,367 million in the same period of 2019, mainly due to the increase of share-based compensation expenses and number of supporting staff in city-level. Sales and marketing expenses were RMB1,026 million (US$151 million) in the third quarter of 2020, compared to RMB737 million in the same period of 2019, mainly due to the increase of the brand advertising and promotional marketing activities and share-based compensation expenses. Research and development expenses were RMB789 million (US$116 million) in the third quarter of 2020, compared to RMB436 million in the same period of 2019, mainly due to the increase of share-based compensation expenses.

Loss from operations was RMB81 million (US$12 million) in the third quarter of 2020, compared to income from operations of RMB400 million in the same period of 2019. Operating margin was negative 0.4% in the third quarter of 2020, compared to 3.3% in the same period of 2019, primarily due to the increase of share-based compensation expenses.

Adjusted income from operations4 increased by 185.1% to RMB1,740 million (US$256 million) in the third quarter of 2020 from RMB610 million in the same period of 2019. Adjusted operating margin increased to 8.5% in the third quarter of 2020 from 5.1% in the same period of 2019. Adjusted EBITDA5 increased by 122.3% to RMB2,248 million (US$331 million) in the third quarter of 2020 from RMB1,011 million in the same period of 2019.

Net Income (loss)

Net income was RMB75 million (US$11 million) in the third quarter of 2020, compared to RMB384 million in the same period of 2019.

Adjusted net incomeincreased by 210.6% to RMB1,858 million (US$274 million) in the third quarter of 2020 from RMB598 million in the same period of 2019.

Net Income (loss) attributable to KE Holdings Inc.’s ordinary shareholders

Net loss attributable to KE Holdings Inc.’s ordinary shareholders was RMB271 million (US$40 million) in the third quarter of 2020, compared to RMB77 million in the same period of 2019.

Adjusted net income attributable to KE Holdings Inc.6increased by 212.3% to RMB1,857 million (US$274 million) in the third quarter of 2020 from RMB595 million in the same period of 2019.

Net Income (loss) per ADS

Diluted net loss per ADS attributable to KE Holdings Inc.’s ordinary shareholders7 was RMB0.33 (US$0.05) in the third quarter of 2020, compared to RMB0.17 in the same period of 2019.

Adjusted diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders8 increased by 762.5% to RMB1.38 (US$0.20) in the third quarter of 2020 from RMB0.16 in the same period of 2019.

Cash, Cash Equivalents, Restricted Cash and Short-Term Investments

As of September 30, 2020, the combined balance of the Company’s cash, cash equivalents, restricted cash and short-term investments amounted to RMB59.2 billion (US$8.7 billion).

Business Outlook

For the fourth quarter of 2020, the Company expects total net revenues to be between RMB19.2 billion (US$2.8 billion) and RMB20.2 billion (US$3.0 billion), representing an increase of approximately 33.5% to 40.5% from the same quarter of 2019. This business outlook reflects the Company’s current and preliminary view on the business situation and market condition, which is subject to change.

Conference Call Information

The Company will hold a conference call on 8:00 PM U.S. Eastern Time on Monday, November 16, 2020 (9:00 AM Beijing/Hong Kong Time on Tuesday, November 17, 2020) to discuss the financial results. Details for the conference call are as follows:

Event Title: KE Holdings Inc. Third Quarter 2020 Earnings Conference Call

Conference ID: 1175472

All participants must use the link provided below to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers, the Direct Event passcode, and a unique registrant ID by email.

PRE-REGISTER LINK: http://apac.directeventreg.com/registration/event/1175472

A live and archived webcast of the conference call will also be available at the Company’s investor relations website at http://investors.ke.com/.

The replay will be accessible through November 24, 2020, by dialing the following numbers:

United States Toll Free:

+1-855-452-5696

Mainland, China:

400-602-2065

Hong Kong, China:

+852-3051-2780

International:

+61-2-8199-0299

Conference ID:

1175472

Exchange Rate

This announcement contains translations of certain RMB amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB6.7896 to US$1.00, the noon buying rate in effect on September 30, 2020, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release.

Non-GAAP Financial Measures

The Company uses adjusted income (loss) from operations, adjusted net income (loss), adjusted net income (loss) attributable to KE Holdings Inc., adjusted operating margin, adjusted EBITDA and adjusted net income (loss) per ADS attributable to KE Holdings Inc.’s ordinary shareholders, each a non-GAAP financial measure, in evaluating its operating results and for financial and operational decision-making purposes. Beike believes that these non-GAAP financial measures help identify underlying trends in the Company’s business that could otherwise be distorted by the effect of certain expenses that the Company includes in its net income (loss). Beike also believes that these non-GAAP financial measures provide useful information about its results of operations, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making. A limitation of using these non-GAAP financial measures is that these non-GAAP financial measures exclude share-based compensation expenses that have been, and will continue to be for the foreseeable future, a significant recurring expense in the Company’s business.

The presentation of these non-GAAP financial measures should not be considered in isolation or construed as an alternative to gross profit, net income or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review these non-GAAP financial measures and the reconciliation to the most directly comparable GAAP measures. The non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data. Beike encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. Adjusted income (loss) from operations is defined as income (loss) from operations, excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, and (iii) changes in fair value of financial assets recognized as deemed marketing expenses. Adjusted operating margin is defined as adjusted income (loss) from operations as a percentage of net revenues. Adjusted net income (loss) is defined as net income (loss), excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration, and (iv) tax effects of the above non-GAAP adjustments. Adjusted net income (loss) attributable to KE Holdings Inc. is defined as net income (loss) attributable to KE Holdings Inc., excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration, (iv) tax effects of the above non-GAAP adjustments, and (v) effects of non-GAAP adjustments on net income (loss) attributable to non-controlling interests shareholders. Adjusted EBITDA is defined as net income (loss), excluding (i) interest income, net, (ii) income tax expense (benefit), (iii) depreciation of property and equipment, (iv) amortization of intangible assets, (v) share-based compensation expenses, and (vi) changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration. Adjusted net income (loss) per ADS attributable to KE Holdings Inc.’s ordinary shareholders is defined as adjusted net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders divided by weighted average number of ADS outstanding during the periods used in calculating adjusted net income (loss) per ADS, basic and diluted.

Please see the Unaudited reconciliation of GAAP and non-GAAP results included in this press release for a full reconciliation of each non-GAAP measure to its respective comparable GAAP measure.

About KE Holdings Inc.

KE Holdings Inc. is a leading integrated online and offline platform for housing transactions and services. The Company is a pioneer in building the industry infrastructure and standards in China to reinvent how service providers and housing customers efficiently navigate and consummate housing transactions, ranging from existing and new home sales, home rentals, to home renovation, real estate financial solutions, and other services. The Company owns and operates Lianjia, China’s leading real estate brokerage brand and an integral part of its Beike platform. With more than 19 years of operating experience through Lianjia since its inception in 2001, the Company believes the success and proven track record of Lianjia pave the way for it to build the industry infrastructure and standards and drive the rapid and sustainable growth of Beike.

Safe Harbor Statement

This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “likely to,” and similar statements. Among other things, the business outlook and quotations from management in this press release, as well as Beike’s strategic and operational plans, contain forward-looking statements. Beike may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about KE Holdings Inc.’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Beike’s goals and strategies; Beike’s future business development, financial condition and results of operations; expected changes in the Company’s revenues, costs or expenditures; Beike’s ability to empower services and facilitate transactions on Beike’s platform; competition in our industry; relevant government policies and regulations relating to our industry; Beike’s ability to protect the Company’s systems and infrastructures from cyber-attacks; Beike’s dependence on the integrity of brokerage brands, stores and agents on the Company’s platform; general economic and business conditions in China and globally; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in KE Holdings Inc.’s filings with the SEC. All information provided in this press release is as of the date of this press release, and KE Holdings Inc. does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

KE Holdings Inc.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except for share, per share data)
 

 

 

As of

December 31,

 

As of

September 30,

 

 

2019

 

2020

 

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

24,319,332

 

38,046,404

 

5,603,630

Restricted cash

 

7,380,341

 

8,009,714

 

1,179,703

Short-term investments

 

1,844,595

 

13,156,851

 

1,937,795

Short-term financing receivables, net of allowance for credit losses

 

2,125,621

 

1,561,288

 

229,953

Accounts receivable, net of allowance for credit losses

 

8,093,219

 

10,840,817

 

1,596,680

Amounts due from and prepayments to related parties

 

927,306

 

462,733

 

68,153

Loan receivables from related parties

 

1,929,076

 

45,792

 

6,744

Prepayments, receivables and other assets

 

5,292,996

 

3,573,101

 

526,261

Total current assets

 

51,912,486

 

75,696,700

 

11,148,919

Non-current assets

 

 

 

 

 

 

Property and equipment, net

 

1,134,228

 

1,258,326

 

185,331

Right-of-use assets

 

5,625,015

 

6,131,448

 

903,065

Long-term financing receivables, net of allowance for credit losses

 

265,868

 

266,902

 

39,310

Long-term investments, net

 

2,333,745

 

2,461,657

 

362,563

Intangible assets, net

 

2,560,442

 

2,062,294

 

303,743

Goodwill

 

2,477,075

 

2,490,155

 

366,761

Non-current restricted cash

 

230,903

 

59,282

 

8,731

Other non-current assets

 

725,550

 

547,431

 

80,628

Total non-current assets

 

15,352,826

 

15,277,495

 

2,250,132

TOTAL ASSETS

 

67,265,312

 

90,974,195

 

13,399,051

KE Holdings Inc.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(All amounts in thousands, except for share, per share data)
 

 

 

As of

December 31,

 

As of

September 30,

 

 

2019

 

2020

 

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

4,212,705

 

6,302,947

 

928,324

Amounts due to related parties

 

263,659

 

196,799

 

28,985

Employee compensation and welfare payable

 

9,113,011

 

9,825,634

 

1,447,161

Customer deposits payable

 

4,382,803

 

6,439,696

 

948,465

Income taxes payable

 

994,815

 

289,824

 

42,686

Short-term borrowings

 

720,000

 

570,000

 

83,952

Lease liabilities current portion

 

2,222,745

 

2,437,774

 

359,045

Short-term funding debt

 

2,291,723

 

2,411,361

 

355,155

Contract liabilities

 

593,373

 

721,370

 

106,246

Accrued expenses and other current liabilities

 

3,002,841

 

2,531,795

 

372,893

Total current liabilities

 

27,797,675

 

31,727,200

 

4,672,912

Non-current liabilities

 

 

 

 

 

 

Deferred tax liabilities

 

22,446

 

22,446

 

3,306

Lease liabilities non-current portion

 

2,914,240

 

3,299,658

 

485,987

Long-term borrowings

 

4,890,030

 

4,698,996

 

692,087

Long-term funding debt

 

7,500

 

15,000

 

2,209

Other non-current liabilities

 

97,829

 

79,879

 

11,765

Total non-current liabilities

 

7,932,045

 

8,115,979

 

1,195,354

TOTAL LIABILITIES

 

35,729,720

 

39,843,179

 

5,868,266

KE Holdings Inc.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(All amounts in thousands, except for share, per share data)
 

 

 

As of

December 31,

 

As of

September 30,

 

 

2019

 

2020

 

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

MEZZANINE EQUITY

 

 

 

 

 

 

Series B convertible redeemable preferred shares (US$0.00002 par value; 750,000,000 shares authorized, 298,483,760 issued and outstanding with redemption value of 6,406,056 as of December 31, 2019; nil authorized, issued and outstanding as of September 30, 2020)

 

6,406,056

 

–

 

–

Series C convertible redeemable preferred shares (US$0.00002 par value; 750,000,000 shares authorized, 470,568,175 issued and outstanding with redemption value of 12,118,251 as of December 31, 2019; nil authorized, issued and outstanding as of September 30, 2020)

 

12,118,251

 

–

 

–

Series D convertible redeemable preferred shares (US$0.00002 par value; 1,000,000,000 shares authorized,430,835,530 issued and outstanding with redemption value of 11,831,223 as of December 31, 2019; nil authorized, issued and outstanding as of September 30, 2020)

 

11,831,223

 

–

 

–

Series D+ convertible redeemable preferred shares (US$0.00002 par value; 750,000,000 shares authorized, 310,879,155 issued and outstanding with redemption value of 10,017,365 as of December 31, 2019; nil authorized, issued and outstanding as of September 30, 2020)

 

10,017,365

 

–

 

–

TOTAL MEZZANINE EQUITY

 

40,372,895

 

–

 

–

 

 

 

KE Holdings Inc.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(All amounts in thousands, except for share, per share data)
 

 

 

As of

December 31,

 

As of

September 30,

 

 

2019

 

2020

 

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

KE Holdings Inc. shareholders’ equity (deficit)

 

 

 

 

 

 

Ordinary Shares (US$0.00002 par value; 25,000,000,000 ordinary shares authorized, comprising of 23,614,698,720 Class A ordinary shares, 885,301,280 Class B ordinary shares and 500,000,000 shares each of such classes to be designated, 584,865,410 and 2,544,836,855 Class A ordinary shares issued and outstanding as of December 31, 2019 and September 30, 2020; 885,301,280 Class B ordinary shares issued and outstanding as of December 31, 2019 and September 30, 2020)

 

202

 

466

 

69

Additional paid-in capital

 

2,533,889

 

61,565,221

 

9,067,577

Statutory reserves

 

253,732

 

253,791

 

37,379

Accumulated other comprehensive income (loss)

 

63,308

 

(531,354)

 

(78,260)

Accumulated deficit

 

(11,775,637)

 

(10,183,598)

 

(1,499,882)

Total KE Holdings Inc. shareholders’ equity (deficit)

 

(8,924,506)

 

51,104,526

 

7,526,883

Non-controlling interests

 

87,203

 

26,490

 

3,902

TOTAL SHAREHOLDERS’ EQUITY (DEFICIT)

 

(8,837,303)

 

51,131,016

 

7,530,785

TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY (DEFICIT)

67,265,312

 

90,974,195

 

13,399,051

 

 

 

KE Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All amounts in thousands, except for share, per share data, ADS and per ADS data)
 

 

Three months ended

 

Nine months ended

 

September 30,

2019

 

September 30,

2020

 

September 30,

2020

 

September 30,

2019

 

September 30,

2020

 

September 30,

2020

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

 

 

 

 

 

 

 

 

 

 

Existing home transaction services

6,054,779

 

8,849,706

 

1,303,421

 

18,699,359

 

21,404,907

 

3,152,602

New home transaction services

5,679,371

 

11,074,424

 

1,631,086

 

12,156,223

 

25,051,136

 

3,689,634

Emerging and other services

288,509

 

624,785

 

92,021

 

777,782

 

1,354,290

 

199,465

Total net revenues

12,022,659

 

20,548,915

 

3,026,528

 

31,633,364

 

47,810,333

 

7,041,701

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

Commission-split

(3,173,874)

 

(7,736,904)

 

(1,139,523)

 

(5,669,481)

 

(16,115,155)

 

(2,373,506)

Commission and compensation-internal

(4,862,917)

 

(6,624,055)

 

(975,618)

 

(14,545,589)

 

(16,534,075)

 

(2,435,206)

Cost related to stores

(799,071)

 

(832,719)

 

(122,646)

 

(2,283,714)

 

(2,260,339)

 

(332,912)

Others

(247,328)

 

(972,007)

 

(143,161)

 

(614,297)

 

(1,465,127)

 

(215,790)

Total cost of revenues(1)

(9,083,190)

 

(16,165,685)

 

(2,380,948)

 

(23,113,081)

 

(36,374,696)

 

(5,357,414)

Gross profit

2,939,469

 

4,383,230

 

645,580

 

8,520,283

 

11,435,637

 

1,684,287

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing expenses(1)

(736,579)

 

(1,026,479)

 

(151,184)

 

(2,274,976)

 

(2,391,909)

 

(352,290)

General and administrative expenses(1)

(1,367,166)

 

(2,648,678)

 

(390,108)

 

(3,814,881)

 

(5,705,203)

 

(840,286)

Research and development expenses(1)

(436,056)

 

(789,089)

 

(116,220)

 

(1,093,089)

 

(1,763,520)

 

(259,738)

Total operating expenses

(2,539,801)

 

(4,464,246)

 

(657,512)

 

(7,182,946)

 

(9,860,632)

 

(1,452,314)

Income/(loss) from operations

399,668

 

(81,016)

 

(11,932)

 

1,337,337

 

1,575,005

 

231,973

Interest income, net

64,835

 

22,231

 

3,274

 

168,378

 

158,926

 

23,407

Share of results of equity investees

4,803

 

7,138

 

1,051

 

14,431

 

4,812

 

709

Fair value changes in investments, net

(9,548)

 

76,277

 

11,234

 

11,825

 

55,968

 

8,243

Foreign currency exchange loss

(13,753)

 

(8,096)

 

(1,192)

 

(20,853)

 

(684)

 

(101)

Other income, net

255,376

 

317,798

 

46,807

 

329,659

 

780,585

 

114,968

Income before income tax expense

701,381

 

334,332

 

49,242

 

1,840,777

 

2,574,612

 

379,199

Income tax expense

(317,120)

 

(258,991)

 

(38,145)

 

(899,504)

 

(891,845)

 

(131,355)

Net income

384,261

 

75,341

 

11,097

 

941,273

 

1,682,767

 

247,844

Less: net income attributable to non-controlling interests shareholders

2,907

 

644

 

95

 

3,488

 

152

 

22

Net income attributable to KE Holdings Inc.

381,354

 

74,697

 

11,002

 

937,785

 

1,682,615

 

247,822

Accretion on convertible redeemable preferred shares to redemption value

(457,938)

 

(346,143)

 

(50,981)

 

(1,288,686)

 

(1,755,228)

 

(258,517)

Net loss attributable to KE Holdings Inc.’s ordinary shareholders

(76,584)

 

(271,446)

 

(39,979)

 

(350,901)

 

(72,613)

 

(10,695)

 

 

 

 

 

 

 

 

 

 

 

 

Net income

384,261

 

75,341

 

11,097

 

941,273

 

1,682,767

 

247,844

Currency translation adjustments

189,642

 

(745,045)

 

(109,733)

 

216,591

 

(594,662)

 

(87,584)

Total comprehensive income/(loss)

573,903

 

(669,704)

 

(98,636)

 

1,157,864

 

1,088,105

 

160,260

Less: comprehensive income attributable to non-controlling interests shareholders

2,907

 

644

 

95

 

3,488

 

152

 

22

Comprehensive income/(loss) attributable to KE Holdings Inc.

570,996

 

(670,348)

 

(98,731)

 

1,154,376

 

1,087,953

 

160,238

Accretion on convertible redeemable preferred shares to redemption value

(457,938)

 

(346,143)

 

(50,981)

 

(1,288,686)

 

(1,755,228)

 

(258,517)

Comprehensive income/(loss) attributable to KE Holdings Inc.’s ordinary shareholders

113,058

 

(1,016,491)

 

(149,712)

 

(134,310)

 

(667,275)

 

(98,279)

KE Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)

(All amounts in thousands, except for share, per share data, ADS and per ADS data)
 

Three months ended

Nine months ended

September 30,

2019

September 30,

2020

September 30,

2020

September 30,

2019

September 30,

2020

September 30,

2020

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

Weighted average number of ordinary shares used in computing net loss per share, basic and diluted

 

 

 

 

 

 

 

 

 

 

 

—Basic

1,368,472,536

 

2,470,138,350

 

2,470,138,350

 

1,375,633,568

 

1,812,367,756

 

1,812,367,756

—Diluted

1,368,472,536

 

2,470,138,350

 

2,470,138,350

 

1,375,633,568

 

1,812,367,756

 

1,812,367,756

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ADS used in computing net loss per ADS, basic and diluted

 

 

 

 

 

 

 

 

 

 

 

—Basic

456,157,512

 

823,379,450

 

823,379,450

 

458,544,523

 

604,122,585

 

604,122,585

—Diluted

456,157,512

 

823,379,450

 

823,379,450

 

458,544,523

 

604,122,585

 

604,122,585

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to KE Holdings Inc.’s ordinary shareholders

 

 

 

 

 

 

 

 

 

 

 

—Basic

(0.06)

 

(0.11)

 

(0.02)

 

(0.26)

 

(0.04)

 

(0.01)

—Diluted

(0.06)

 

(0.11)

 

(0.02)

 

(0.26)

 

(0.04)

 

(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per ADS attributable to KE Holdings Inc.’s ordinary shareholders

 

 

 

 

 

 

 

 

 

 

 

—Basic

(0.17)

 

(0.33)

 

(0.05)

 

(0.77)

 

(0.12)

 

(0.02)

—Diluted

(0.17)

 

(0.33)

 

(0.05)

 

(0.77)

 

(0.12)

 

(0.02)

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes share-based compensation expenses as follows:

 

 

 

 

 

 

 

 

Cost of revenues

–

 

435,021

 

64,072

 

–

 

435,021

 

64,072

Sales and marketing expenses

–

 

47,362

 

6,976

 

–

 

47,362

 

6,976

General and administrative expenses

63,238

 

901,692

 

132,805

 

109,286

 

901,692

 

132,805

Research and development expenses

–

 

284,120

 

41,846

 

–

 

284,120

 

41,846

KE Holdings Inc.

UNAUDITED RECONCILIATION of GAAP AND NON-GAAP RESULTS

(All amounts in thousands, except for share, per share data, ADS and per ADS data)
 

 

Three months ended

 

Nine months ended

 

September 30,

2019

 

September 30,

2020

 

September 30,

2020

 

September 30,

2019

 

September 30,

2020

 

September 30,

2020

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

Income/(loss) from operations

399,668

 

(81,016)

 

(11,932)

 

1,337,337

 

1,575,005

 

231,973

Share-based compensation expenses

63,238

 

1,668,195

 

245,699

 

109,286

 

1,668,195

 

245,699

Amortization of intangible assets resulting from acquisitions and business cooperation agreement

147,361

 

152,685

 

22,488

 

297,027

 

461,286

 

67,940

Changes in fair value of financial assets recognized as deemed marketing expenses

–

 

–

 

–

 

274,772

 

–

 

–

Adjusted income from operations

610,267

 

1,739,864

 

256,255

 

2,018,422

 

3,704,486

 

545,612

 

 

 

 

 

 

 

 

 

 

 

 

Net income

384,261

 

75,341

 

11,097

 

941,273

 

1,682,767

 

247,844

Share-based compensation expenses

63,238

 

1,668,195

 

245,699

 

109,286

 

1,668,195

 

245,699

Amortization of intangible assets resulting from acquisitions and business cooperation agreement

147,361

 

152,685

 

22,488

 

297,027

 

461,286

 

67,940

Changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration

3,037

 

(36,499)

 

(5,376)

 

262,908

 

(91,030)

 

(13,407)

Tax effects on non-GAAP adjustments

430

 

(1,510)

 

(222)

 

1,290

 

(2,325)

 

(342)

Adjusted net income

598,327

 

1,858,212

 

273,686

 

1,611,784

 

3,718,893

 

547,734

 

 

 

 

 

 

 

 

 

 

 

 

Net income

384,261

 

75,341

 

11,097

 

941,273

 

1,682,767

 

247,844

Income tax expense

317,120

 

258,991

 

38,145

 

899,504

 

891,845

 

131,355

Share-based compensation expenses

63,238

 

1,668,195

 

245,699

 

109,286

 

1,668,195

 

245,699

Amortization of intangible assets

153,437

 

155,728

 

22,936

 

310,973

 

475,796

 

70,077

Depreciation of property and equipment

154,599

 

148,061

 

21,807

 

434,814

 

372,022

 

54,793

Interest income, net

(64,835)

 

(22,231)

 

(3,274)

 

(168,378)

 

(158,926)

 

(23,407)

Changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration

3,037

 

(36,499)

 

(5,376)

 

262,908

 

(91,030)

 

(13,407)

Adjusted EBITDA

1,010,857

 

2,247,586

 

331,034

 

2,790,380

 

4,840,669

 

712,954

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to KE Holdings Inc.

381,354

 

74,697

 

11,002

 

937,785

 

1,682,615

 

247,822

Share-based compensation expenses

63,238

 

1,668,195

 

245,699

 

109,286

 

1,668,195

 

245,699

Amortization of intangible assets resulting from acquisitions and business cooperation agreement

147,361

 

152,685

 

22,488

 

297,027

 

461,286

 

67,940

Changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration

3,037

 

(36,499)

 

(5,376)

 

262,908

 

(91,030)

 

(13,407)

Tax effects on non-GAAP adjustments

430

 

(1,510)

 

(222)

 

1,290

 

(2,325)

 

(342)

Effects of non-GAAP adjustments on net income attributable to non-controlling interests shareholders

(597)

 

(90)

 

(13)

 

(597)

 

(1,593)

 

(235)

Adjusted Net income attributable to KE Holdings Inc.

594,823

 

1,857,478

 

273,578

 

1,607,699

 

3,717,148

 

547,477

Accretion on convertible redeemable preferred shares to redemption value

(457,938)

 

(346,143)

 

(50,981)

 

(1,288,686)

 

(1,755,228)

 

(258,517)

Adjusted net income allocated to participating preferred shares

(60,656)

 

(342,033)

 

(50,376)

 

(138,180)

 

(799,341)

 

(117,730)

Adjusted net income attributable to KE Holdings Inc.’s ordinary shareholders

76,229

 

1,169,302

 

172,221

 

180,833

 

1,162,579

 

171,230

KE Holdings Inc.

UNAUDITED RECONCILIATION of GAAP AND NON-GAAP RESULTS (Continued)

(All amounts in thousands, except for share, per share data, ADS and per ADS data)
 

 

Three months ended

 

Nine months ended

 

September 30,

2019

 

September 30,

2020

 

September 30,

2020

 

September 30,

2019

 

September 30,

2020

 

September 30,

2020

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ADS used in computing net loss per ADS, basic and diluted

 

 

 

 

 

 

 

 

 

 

 

—Basic

456,157,512

 

823,379,450

 

823,379,450

 

458,544,523

 

604,122,585

 

604,122,585

—Diluted

456,157,512

 

823,379,450

 

823,379,450

 

458,544,523

 

604,122,585

 

604,122,585

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ADS used in calculating adjusted net income per ADS, basic and diluted

 

 

 

 

 

 

 

 

 

 

 

—Basic

456,157,512

 

823,379,450

 

823,379,450

 

458,544,523

 

604,122,585

 

604,122,585

—Diluted

462,625,667

 

844,473,061

 

844,473,061

 

460,700,574

 

617,202,590

 

617,202,590

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per ADS attributable to KE Holdings Inc.’s ordinary shareholders

 

 

 

 

 

 

 

 

 

 

 

—Basic

(0.17)

 

(0.33)

 

(0.05)

 

(0.77)

 

(0.12)

 

(0.02)

—Diluted

(0.17)

 

(0.33)

 

(0.05)

 

(0.77)

 

(0.12)

 

(0.02)

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments to net loss per ADS attributable to KE Holdings Inc.’s ordinary shareholders

 

 

 

 

 

 

 

 

 

 

 

—Basic

0.34

 

1.75

 

0.26

 

1.16

 

2.04

 

0.30

—Diluted

0.33

 

1.71

 

0.25

 

1.16

 

2.00

 

0.30

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders

 

 

 

 

 

 

 

 

 

 

 

—Basic

0.17

 

1.42

 

0.21

 

0.39

 

1.92

 

0.28

—Diluted

0.16

 

1.38

 

0.20

 

0.39

 

1.88

 

0.28

 

 

 

 

 

 

 

 

 

 

 

 

KE Holdings Inc.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands)
 

 

Three months ended

 

Nine months ended

 

September 30,

2019

 

September 30,

2020

 

September 30,

2020

 

September 30,

2019

 

September 30,

2020

 

September 30,

2020

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

1,257,660

 

3,213,000

 

473,224

 

739,534

 

8,257,465

 

1,216,194

Net cash provided by/(used in) investing activities

132,616

 

(6,945,255)

 

(1,022,926)

 

(1,505,524)

 

(9,369,789)

 

(1,380,021)

Net cash provided by/(used in) financing activities

(2,222,516)

 

16,565,408

 

2,439,821

 

3,832,144

 

15,996,088

 

2,355,968

Effect of exchange rate change on cash, cash equivalents and restricted cash

109,779

 

(815,884)

 

(120,167)

 

133,779

 

(698,940)

 

(102,942)

Net increase/(decrease) in cash and cash equivalents and restricted cash

(722,461)

 

12,017,269

 

1,769,952

 

3,199,933

 

14,184,824

 

2,089,199

Cash, cash equivalents and restricted cash at the beginning of the period

16,682,592

 

34,098,131

 

5,022,112

 

12,760,198

 

31,930,576

 

4,702,865

Cash, cash equivalents and restricted cash at the end of the period

15,960,131

 

46,115,400

 

6,792,064

 

15,960,131

 

46,115,400

 

6,792,064

KE Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CONTRIBUTION

(All amounts in thousands)
 

 

 

Three months ended

 

Nine months ended

 

 

September 30,

2019

 

September 30,

2020

 

September 30,

2020

 

September 30,

2019

 

September 30,

2020

 

September 30,

2020

 

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

 

Existing home transaction services

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

6,054,779

 

8,849,706

 

1,303,421

 

18,699,359

 

21,404,907

 

3,152,602

Less: Commission and compensation

 

(3,704,803)

 

(5,133,485)

 

(756,081)

 

(11,327,588)

 

(12,842,121)

 

(1,891,440)

Contribution

 

2,349,976

 

3,716,221

 

547,340

 

7,371,771

 

8,562,786

 

1,261,162

 

 

 

 

 

 

 

 

 

 

 

 

 

New home transaction services

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

5,679,371

 

11,074,424

 

1,631,086

 

12,156,223

 

25,051,136

 

3,689,634

Less: Commission and compensation

 

(4,278,281)

 

(9,128,976)

 

(1,344,553)

 

(8,742,069)

 

(19,602,097)

 

(2,887,077)

Contribution

 

1,401,090

 

1,945,448

 

286,533

 

3,414,154

 

5,449,039

 

802,557

 

 

 

 

 

 

 

 

 

 

 

 

 

Emerging and other services

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

288,509

 

624,785

 

92,021

 

777,782

 

1,354,290

 

199,465

Less: Commission and compensation

 

(53,707)

 

(98,498)

 

(14,507)

 

(145,413)

 

(205,012)

 

(30,195)

Contribution

 

234,802

 

526,287

 

77,514

 

632,369

 

1,149,278

 

169,270

_____________________________________

1 GTV for a given period is calculated as the total value of all transactions which the Company facilitated on the Company’s platform and evidenced by signed contracts as of the end of the period, including the value of the existing home transactions, new home transactions and emerging and other services, and including transactions that are contracted but pending closing at the end of period.

2 Adjusted net income (loss) is a non-GAAP financial measure, which is defined as net income (loss), excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration, and (iv) tax effects of the above non-GAAP adjustments. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details.

3 Average mobile MAU for any period is calculated by dividing (i) the sum of the Company’s mobile active users (including Beike or Lianjia mobile app, and Weixin Mini Programs) for each month of such period, by (ii) the number of months in such period.

4 Adjusted income (loss) from operations is a non-GAAP financial measure, which is defined as income (loss) from operations, excluding (i) share-based compensation expenses, and (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, and (iii) changes in fair value of financial assets recognized as deemed marketing expenses. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details.

5 Adjusted EBITDA is a non-GAAP financial measure, which is defined as net income (loss), excluding (i) interest income, net, (ii) income tax expense (benefit), (iii) depreciation of property and equipment, (iv) amortization of intangible assets, (v) share-based compensation expenses, and (vi) changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details.

6 Adjusted net income (loss) attributable to KE Holdings Inc. is a non-GAAP financial measure and represents adjusted income (loss) attributable to KE Holdings Inc’s ordinary shareholders and preferred shareholders, and all preferred shares of KE Holdings Inc. had been automatically converted to ordinary shares upon initial public offering of KE Holdings Inc. on a one-for-one basis. Adjusted net income (loss) attributable to KE Holdings Inc. is defined as net income (loss) attributable to KE Holdings Inc., excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration, (iv) tax effects of the above non-GAAP adjustments, and (v) effects of non-GAAP adjustments on net income (loss) attributable to non-controlling interests shareholders. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details.

7 ADS is American Depositary Share. Each ADS represents three Class A ordinary shares of the Company. Diluted net income (loss) per ADS attributable to KE Holdings Inc.’s ordinary shareholders is net income (loss) attributable to ordinary shareholders divided by weighted average number of diluted ADS.

8 Adjusted net income (loss) per ADS attributable to KE Holdings Inc.’s ordinary shareholders is a non-GAAP financial measure, which is defined as adjusted net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders divided by weighted average number of ADS outstanding during the periods used in calculating adjusted net income (loss) per ADS, basic and diluted. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details.

 

For investor and media inquiries, please contact:

In China:

KE Holdings Inc.

Investor Relations

Matthew Zhao

Siting Li

E-mail: [email protected]

The Piacente Group, Inc.

Ross Warner

Tel: +86-10-6508-0677

E-mail: [email protected]

In the United States:

The Piacente Group, Inc.

Brandi Piacente

Tel: +1-212-481-2050

E-mail: [email protected]

KEYWORDS: China Asia Pacific

INDUSTRY KEYWORDS: Networks Internet Professional Services Other Professional Services Technology

MEDIA:

Posted on

Novus Therapeutics Reports Third Quarter 2020 Financial Results

Novus Therapeutics Reports Third Quarter 2020 Financial Results

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

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

Recent Business Highlights

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

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

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

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

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

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

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

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

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

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

Conference Call & Webcast

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

Toll Free:

 

877-407-3982

International:

 

201-493-6780

Conference ID:

 

13713171

Webcast:

 

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

About AT-1501

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

About Novus Therapeutics

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

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

Forward-Looking Statements

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

View source version on businesswire.com:

NOVUS THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)
 

 

 

September 30,

2020

 

 

December 31,

2019

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

114,464

 

 

$

8,791

 

Prepaid expenses and other current assets

 

 

637

 

 

 

1,180

 

Total current assets

 

 

115,101

 

 

 

9,971

 

Property and equipment, net

 

 

—

 

 

 

5

 

Operating lease asset, net

 

 

183

 

 

 

316

 

Goodwill

 

 

44,466

 

 

 

—

 

In-process research and development

 

 

32,386

 

 

 

—

 

Other assets

 

 

449

 

 

 

639

 

Total assets

 

$

192,585

 

 

$

10,931

 

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

758

 

 

$

329

 

Current operating lease liability

 

 

191

 

 

 

180

 

Accrued severance

 

 

803

 

 

 

—

 

Accrued expenses and other liabilities

 

 

4,378

 

 

 

813

 

Total current liabilities

 

 

6,130

 

 

 

1,322

 

Non-current operating lease liability

 

 

—

 

 

 

144

 

Total liabilities

 

 

6,130

 

 

 

1,466

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

 

 

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

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

 

 

164,949

 

 

 

—

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

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

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

 

 

—

 

 

 

—

 

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

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

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

95,994

 

 

 

67,046

 

Accumulated deficit

 

 

(74,489

)

 

 

(57,582

)

Total stockholders’ equity

 

 

21,506

 

 

 

9,465

 

Total liabilities, convertible preferred stock and stockholders’ equity

 

$

192,585

 

 

$

10,931

 

NOVUS THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

(Unaudited)
 

 

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

615

 

 

$

1,509

 

 

$

3,095

 

 

$

6,795

 

General and administrative

 

 

3,731

 

 

 

1,411

 

 

 

6,730

 

 

 

5,089

 

Restructuring expense

 

 

1,802

 

 

 

—

 

 

 

2,292

 

 

 

—

 

Total operating expenses

 

 

6,148

 

 

 

2,920

 

 

 

12,117

 

 

 

11,884

 

Loss from operations

 

 

(6,148

)

 

 

(2,920

)

 

 

(12,117

)

 

 

(11,884

)

Other income, net

 

 

4

 

 

 

27

 

 

 

39

 

 

 

17

 

Warrant inducement expense

 

 

—

 

 

 

—

 

 

 

(4,829

)

 

 

—

 

Net loss and comprehensive loss

 

$

(6,144

)

 

$

(2,893

)

 

$

(16,907

)

 

$

(11,867

)

Net loss per share, basic and diluted

 

$

(5.51

)

 

$

(4.01

)

 

$

(16.81

)

 

$

(18.74

)

Weighted-average common shares outstanding, basic and diluted

 

 

1,114,133

 

 

 

720,829

 

 

 

1,006,008

 

 

 

633,187

 

 

Media:

Amanda Sellers

[email protected]

301.332.5574

Investors:

Bruce Mackle

LifeSci Advisors, LLC

[email protected]

929.469.3859

KEYWORDS: United States North America California

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

MEDIA:

Logo
Logo
Posted on

GAN Reports Third Quarter 2020 Financial Results

GAN Reports Third Quarter 2020 Financial Results

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

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

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

Third Quarter Highlights Compared to Prior Year Quarter

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

Dermot Smurfit, CEO of GAN stated:

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

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

Third Quarter 2020 Compared to Third Quarter 2019

Key Financial Highlights (Unaudited)

Three Months Ended September 30, 2020 and 2019

(in thousands of US$)
 

 

Three months ended

September 30,

 

 

2020

 

2019

Revenue

 

 

 

 

RMiG Revenue

 

7,689

 

 

4,127

 

Simulated Gaming Revenue

 

2,577

 

 

1,389

 

Total Revenue

 

10,266

 

 

5,516

 

 

 

 

 

 

Profitability Measures

 

 

 

 

RMiG gross profit margin

 

73

%

 

64

%

Simulated Gaming gross profit margin

 

58

%

 

57

%

Net loss attributable to equity holders

 

(4,078

)

 

(1,834

)

Adjusted EBITDA(4)

 

(114

)

 

(372

)

 

 

 

 

 

Key Performance Indicators

 

 

 

 

Gross Operator Revenue(1) (US$ millions)

 

142.3

 

 

80.8

 

Active Player-Days(2) (in millions)

 

7.5

 

 

5.4

 

ARPDAU(3) (US$)

 

18.93

 

 

14.89

 

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

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

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

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

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

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

Coolbet Share Exchange Agreement

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

Outlook

Dermot Smurfit, CEO of GAN concluded:

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

Conference Call Details
 

Date/Time:

 

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

Webcast:

 

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

U.S. Toll-Free Dial In:

 

(877) 407-0989

International Dial In:

 

(201) 389-0921

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

About GAN Limited

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

Non-GAAP Financial Measures

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

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

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

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

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

Forward-Looking Statements

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

No Offer of Securities

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

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

 

 

Three months ended

September 30,

 

Nine months ended

September 30,

 

 

2020

 

2019

 

2020

 

2019

Revenue

 

10,266

 

 

5,516

 

 

26,259

 

 

19,280

 

Cost of revenue

 

3,894

 

 

3,099

 

 

9,338

 

 

10,177

 

Gross profit

 

6,372

 

 

2,417

 

 

16,921

 

 

9,103

 

Administrative expenses

 

10,430

 

 

4,079

 

 

28,540

 

 

10,146

 

Operating loss

 

(4,058

)

 

(1,662

)

 

(11,619

)

 

(1,043

)

Net finance costs

 

25

 

 

31

 

 

454

 

 

93

 

Loss before income taxes

 

(4,083

)

 

(1,693

)

 

(12,073

)

 

(1,136

)

Income tax (benefit) expense

 

(5

)

 

141

 

 

312

 

 

409

 

Net loss attributable to equity holders of the Parent

 

(4,078

)

 

(1,834

)

 

(12,385

)

 

(1,545

)

 

 

 

 

 

 

 

 

 

Loss per share attributable to ordinary shareholders, basic and diluted

 

(0.14

)

 

(0.09

)

 

(0.48

)

 

(0.07

)

Weighted average shares outstanding, basic and diluted

 

29,571,905

 

 

21,362,133

 

 

25,782,776

 

 

21,349,572

 

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

 

 

September 30, 2020

 

December 31, 2019

ASSETS

 

 

 

 

Non-current assets

 

 

 

 

Intangible assets

 

6,008

 

5,164

Property, plant and equipment

 

655

 

190

Right-of-use assets

 

782

 

1,334

Lease deposits

 

68

 

115

Contract costs

 

291

 

57

Total non-current assets

 

7,804

 

6,860

Current assets

 

 

 

 

Cash and cash equivalents

 

57,489

 

10,098

Trade and other receivables

 

9,079

 

5,974

R&D tax credit receivable

 

–

 

1,127

Inventory

 

416

 

883

Prepayments

 

3,099

 

1,061

Lease deposits

 

77

 

80

Contract costs

 

55

 

29

Total current assets

 

70,215

 

19,252

Total assets

 

78,019

 

26,112

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

13,358

 

6,760

Contract liabilities

 

1,561

 

3,023

Current portion of lease liabilities

 

299

 

692

Total current liabilities

 

15,218

 

10,475

Non-current liabilities

 

 

 

 

Lease liabilities

 

355

 

535

Total liabilities

 

15,573

 

11,010

Equity

 

62,446

 

15,102

Total liabilities and equity

 

78,019

 

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

 

 

Nine months ended

September 30,

 

 

2020

 

2019

Cash flows from operating activities

 

 

 

 

Net loss attributable to equity holders

 

(12,385

)

 

(1,545

)

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

 

8,960

 

 

4,207

 

Changes in working capital accounts

 

848

 

 

1,709

 

Net cash (used in) provided by operating activities

 

(2,577

)

 

4,371

 

Cash flows from investing activities

 

 

 

 

Interest received

 

4

 

 

10

 

Purchase of intangible assets

 

(3,110

)

 

(2,279

)

Purchase of property, plant and equipment

 

(560

)

 

(380

)

Net cash used in investing activities

 

(3,666

)

 

(2,649

)

Cash flows from financing activities

 

 

 

 

Proceeds from issuance of shares in initial public offering, net

 

57,445

 

 

–

 

Payment of deferred offering costs

 

(1,678

)

 

–

 

Payment to previous shareholders

 

(2,525

)

 

–

 

Proceeds from exercise of share options

 

2,279

 

 

79

 

Payment of finance costs

 

(385

)

 

–

 

Capital element of lease liabilities payments

 

(609

)

 

(524

)

Interest paid on lease liabilities

 

(66

)

 

(105

)

Net cash provided by (used in) financing activities

 

54,461

 

 

(550

)

Effect of exchange rate on cash and cash equivalents

 

(827

)

 

442

 

Increase in cash and cash equivalents

 

47,391

 

 

1,614

 

Cash and cash equivalents, beginning of period

 

10,098

 

 

6,967

 

Cash and cash equivalents, end of period

 

57,489

 

 

8,581

 

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

 

 

Three months ended

September 30,

 

Nine months ended

September 30,

 

 

2020

 

2019

 

2020

 

2019

RMiG

 

 

 

 

 

 

 

 

SaaS Revenue

 

4,803

 

 

2,868

 

 

13,706

 

 

7,235

 

Service Revenue

 

1,413

 

 

1,259

 

 

4,453

 

 

2,798

 

Other

 

1,473

 

 

–

 

 

1,473

 

 

4,904

 

RMiG Revenue

 

7,689

 

 

4,127

 

 

19,632

 

 

14,937

 

 

 

 

 

 

 

 

 

 

Simulated Gaming

 

 

 

 

 

 

 

 

SaaS Revenue

 

2,111

 

 

1,084

 

 

5,563

 

 

3,467

 

Service Revenue

 

466

 

 

305

 

 

1,064

 

 

876

 

Simulated Gaming Revenue

 

2,577

 

 

1,389

 

 

6,627

 

 

4,343

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

10,266

 

 

5,516

 

 

26,259

 

 

19,280

 

 

 

 

 

 

 

 

 

 

RMiG

 

 

 

 

 

 

 

 

Revenue

 

7,689

 

 

4,127

 

 

19,632

 

 

14,937

 

Cost of sales (excl. depreciation and amortization)

 

2,062

 

 

1,484

 

 

4,322

 

 

4,988

 

RMiG Segment Gross Profit

 

5,627

 

 

2,643

 

 

15,310

 

 

9,949

 

Segment gross profit margin %

 

73

%

 

64

%

 

78

%

 

67

%

 

 

 

 

 

 

 

 

 

Simulated Gaming

 

 

 

 

 

 

 

 

Revenue

 

2,577

 

 

1,389

 

 

6,627

 

 

4,343

 

Cost of sales (excl. depreciation and amortization)

 

1,074

 

 

598

 

 

2,727

 

 

1,744

 

Simulated Gaming Segment Gross Profit

 

1,503

 

 

791

 

 

3,900

 

 

2,599

 

Segment gross profit margin %

 

58

%

 

57

%

 

59

%

 

60

%

 

 

 

 

 

 

 

 

 

Cost of sales, depreciation and amortization

 

758

 

 

1,017

 

 

2,289

 

 

3,445

 

Total Gross Profit

 

6,372

 

 

2,417

 

 

16,921

 

 

9,103

 

Gross profit margin %

 

62

%

 

44

%

 

64

%

 

47

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

 

Three months ended

September 30,

Nine months ended

September 30,

 

 

2020

 

2019

 

2020

 

2019

Revenue by Geography*

 

United States

8,662

4,455

21,957

 

15,887

Italy

1,279

1,047

3,714

 

3,315

U.K. and Channel Islands

10

1

253

 

4

Rest of the world

315

13

335

 

74

Total

10,266

5,516

26,259

 

19,280
 

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

 

(in thousands of US$)

Three months ended

September 30,

Nine months ended

September 30,

 

 

2020

 

2019

 

2020

 

2019

Net loss attributable to equity holders

(4,078

)

(1,834

)

(12,385 )

(1,545

)

Income tax (benefit) expense

(5

)

141

 

312

409

 

Loss before income taxes

(4,083

)

(1,693

)

(12,073 )

(1,136

)

Non-operating expense

 

 

 

Net finance costs

25

 

31

 

454

93

 

Depreciation expense

269

 

195

 

610

627

 

Amortization expense

716

 

961

 

2,166

3,264

 

 

1,010

 

1,187

 

3,230

3,984

 

EBITDA

(3,073

)

(506

)

(8,843

 )

2,848

 

Share-based payment and related expense

2,020

 

134

 

9,503

392

 

Initial public offering transaction related

–

 

–

 

2,831

–

 

Tax related provisions

939

 

–

 

939

–

 

Adjusted EBITDA

(114

)

(372

)

4,430

3,240

 

Adjusted EBITDA margin %

(1

)%

(7

)%

 17 %

17

%

 

Investor Contacts:

GAN

Jack Wielebinski

Head of Investor Relations

(214) 799-4660

[email protected]

Alpha IR Group

Sofia Byrne or Chris Hodges

(312) 445-2870

[email protected]

KEYWORDS: California United States North America

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

MEDIA:

Posted on

Capstone Companies Reports Third Quarter 2020

Capstone Companies Reports Third Quarter 2020

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

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

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

About Capstone Companies, Inc.

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

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

FORWARD-LOOKING STATEMENTS:

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

Company:

Aimee Brown

Corporate Secretary

(954) 252-3440, ext. 313

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

Important Message Regarding COVID – 19

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

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

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

 

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 

September 30,

 

December 31,

 

2020

 

 

 

2019

 

Assets:

(Unaudited)

 

 

Current Assets:
Cash

$

1,314,508

 

$

3,131,249

 

Accounts receivable, net

 

211,509

 

 

13,459

 

Inventories

 

13,426

 

 

24,818

 

Prepaid expenses

 

113,636

 

 

182,782

 

Income tax refundable

 

794,838

 

 

220,207

 

Total Current Assets

 

2,447,917

 

 

3,572,515

 

 
Property and equipment, net

 

63,166

 

 

65,649

 

Operating lease- right of use asset

 

172,796

 

 

214,202

 

Deposit

 

11,148

 

 

46,021

 

Goodwill

 

1,445,254

 

 

1,936,020

 

Total Assets

$

4,140,281

 

$

5,834,407

 

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

$

632,750

 

$

635,593

 

Paycheck protection program loan-current portion

 

49,971

 

 

–

 

Operating lease- current portion

 

61,675

 

 

51,174

 

Total Current Liabilities

 

744,396

 

 

686,767

 

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

 

39,988

 

 

–

 

Operating lease- long-term portion

 

124,207

 

 

170,998

 

Total Long-Term Liabilities

 

164,195

 

 

170,998

 

Total Liabilities

 

908,591

 

 

857,765

 

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

 

–

 

 

–

 

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

 

–

 

 

–

 

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

 

–

 

 

–

 

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

 

4,630

 

 

4,658

 

Additional paid-in capital

 

7,049,128

 

 

7,061,565

 

Accumulated deficit

 

(3,822,068

)

 

(2,089,581

)

Total Stockholders’ Equity

 

3,231,690

 

 

4,976,642

 

Total Liabilities and Stockholders’ Equity

$

4,140,281

 

$

5,834,407

 

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

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
 

For the Three Months Ended

 

For the Nine Months Ended

September 30,

 

September 30,

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

 

Revenues, net

$

709,654

 

$

5,354,190

 

$

1,765,189

 

 

$

11,740,814

 

Cost of sales

 

(535,270

)

 

(4,139,214

)

 

(1,521,628

)

 

 

(9,165,140

)

Gross Profit

 

174,384

 

 

1,214,976

 

 

243,561

 

 

 

2,575,674

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

Sales and marketing

 

22,337

 

 

102,193

 

 

277,264

 

 

 

329,463

 

Compensation

 

362,706

 

 

381,795

 

 

1,139,107

 

 

 

1,138,960

 

Professional fees

 

99,579

 

 

112,687

 

 

339,816

 

 

 

353,293

 

Product development

 

75,948

 

 

81,060

 

 

169,133

 

 

 

260,823

 

Other general and administrative

 

113,026

 

 

169,572

 

 

364,941

 

 

 

490,835

 

Goodwill impairment charge

 

–

 

 

–

 

 

490,766

 

 

 

–

 

Total Operating Expenses

 

673,596

 

 

847,307

 

 

2,781,027

 

 

 

2,573,374

 

 

 

 

 

 

Operating Income (Loss)

 

(499,212

)

 

367,669

 

 

(2,537,466

)

 

 

2,300

 

 

 

 

 

 

Other Income (Expenses):

 

 

 

 

 

Interest Expense

 

(47

)

 

(3,206

)

 

(181

)

 

 

(3,206

)

Other Income (Expense), Net

 

–

 

 

2,610

 

 

–

 

 

 

135

 

Total Other Income (Expenses)

 

(47

)

 

(596

)

 

(181

)

 

 

(3,071

)

 

 

 

 

 

Income (Loss) Before Tax Benefit

 

(499,259

)

 

367,073

 

 

(2,537,647

)

 

 

(771

)

 

 

 

 

 

Benefit for Income Tax

 

(21,222

)

 

–

 

 

(805,160

)

 

 

(12,000

)

 

 

 

 

 

Net Income (Loss)

$

(478,037

)

$

367,073

 

$

(1,732,487

)

 

$

11,229

 

 

 

 

 

 

Net Income (Loss) per Common Share

 

 

 

 

 

Basic and Diluted

$

(0.01

)

$

0.01

 

$

(0.04

)

 

$

0.00

 

 

 

 

 

 

Weighted Average Shares Outstanding

 

 

 

 

 

Basic and Diluted

 

46,296,364

 

 

46,882,538

 

 

46,350,909

 

 

 

46,874,256

 

 

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

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

Preferred Stock

 

Preferred Stock

 

 

 

Additional

 

 

 

 

Series A

 

Series B

 

Series C

 

Common Stock

 

Paid-In

 

Accumulated

 

Total

Shares

 

Par Value

 

Shares

 

Par Value

 

Shares

 

Par Value

 

Shares

 

Par Value

 

Capital

 

Deficit

 

Equity
 
Balance at December 31, 2019

–

$

–

–

$

–

–

$

–

46,579,747

 

$

4,658

 

$

7,061,565

 

$

(2,089,581

)

$

4,976,642

 

 
Stock options for compensation

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

8,925

 

 

–

 

 

8,925

 

Repurchase of shares

–

 

–

–

 

–

–

 

–

(283,383

)

 

(28

)

 

(36,305

)

 

–

 

 

(36,333

)

Net Loss

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

–

 

 

(597,376

)

 

(597,376

)

Balance at March, 31, 2020

–

 

–

–

 

–

–

 

–

46,296,364

 

 

4,630

 

 

7,034,185

 

 

(2,686,957

)

 

4,351,858

 

 
 
Stock options for compensation

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

8,925

 

 

–

 

 

8,925

 

Net Loss

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

–

 

 

(657,074

)

 

(657,074

)

Balance at June 30, 2020

–

 

–

–

 

–

–

 

–

46,296,364

 

 

4,630

 

$

7,043,110

 

$

(3,344,031

)

$

3,703,709

 

 
Stock options for compensation

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

6,018

 

 

–

 

 

6,018

 

Net Loss

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

–

 

 

(478,037

)

 

(478,037

)

Balance at September 30, 2020

–

$

–

–

$

–

–

$

–

46,296,364

 

$

4,630

 

$

7,049,128

 

$

(3,822,068

)

$

3,231,690

 

 
 
Balance at December 31, 2018

–

$

–

–

$

–

–

$

–

47,046,364

 

$

4,704

 

$

7,092,219

 

$

(1,197,912

)

$

5,899,011

 

Stock options for compensation

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

11,025

 

 

–

 

 

11,025

 

Repurchase of shares

–

 

–

–

 

–

–

 

–

(45,470

)

 

(3

)

 

(8,612

)

 

–

 

 

(8,615

)

Net Loss

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

–

 

 

(345,340

)

 

(345,340

)

Balance at March 31, 2019

–

 

–

–

 

–

–

 

–

47,000,894

 

 

4,701

 

 

7,094,632

 

 

(1,543,252

)

 

5,556,081

 

 
 
Stock options for compensation

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

11,025

 

 

–

 

 

11,025

 

Repurchase of shares

–

 

–

–

 

–

–

 

–

(168,530

)

 

(17

)

 

(27,246

)

 

–

 

 

(27,263

)

Net Loss

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

–

 

 

(10,504

)

 

(10,504

)

Balance at June 30, 2019

–

 

–

–

 

–

–

 

–

46,832,364

 

 

4,684

 

 

7,078,411

 

 

(1,553,756

)

 

5,529,339

 

 
Stock options for compensation

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

9,732

 

 

–

 

 

9,732

 

Repurchase of shares

–

 

–

–

 

–

–

 

–

(79,945

)

 

(7

)

 

(11,630

)

 

–

 

 

(11,637

)

Net Loss

–

 

–

–

 

–

–

 

–

–

 

 

–

 

 

–

 

 

367,073

 

 

367,073

 

Balance at September 30, 2019

–

$

–

–

$

–

–

$

–

46,752,419

 

$

4,677

 

$

7,076,513

 

$

(1,186,683

)

$

5,894,507

 

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

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Unaudited)

 

 

For the Nine Months Ended

September 30,

 

2020

 

 

 

2019

 

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income (Loss)

$

(1,732,487

)

$

11,229

 

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

operating activities:

 

 

Depreciation and amortization

 

18,222

 

 

33,072

 

Stock based compensation expense

 

23,868

 

 

31,782

 

Noncash lease expense

 

41,406

 

 

–

 

Unpaid accrued interest on paycheck protection program loan

 

359

 

 

–

 

Goodwill impairment charge

 

490,766

 

 

–

 

Benefit for deferred income tax

 

–

 

 

(12,000

)

Increase in accounts receivable, net

 

(198,050

)

 

(2,087,830

)

Decrease in inventories

 

11,392

 

 

27,497

 

Decrease in prepaid expense

 

69,146

 

 

107,359

 

Decrease in deposits

 

34,873

 

 

75,912

 

Increase (decrease) in accounts payable and accrued liabilities

 

(2,843

)

 

454,004

 

Decrease in deferred rent incentive

 

 

–

 

 

 

(75,315

)

Increase in income tax refundable

 

(574,631

)

 

–

 

Decrease in operating lease liabilities

 

 

(36,290

)

 

 

–

 

Net cash used in operating activities

 

(1,854,269

)

 

(1,434,290

)

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

Purchase of property and equipment

 

(15,739

)

 

(34,123

)

Net cash used in investing activities

 

(15,739

)

 

(34,123

)

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

Proceeds from loan under paycheck protection program

 

89,600

 

 

–

 

Repurchase of Shares

 

(36,333

)

 

(47,515

)

Net cash provided by (used in) financing activities

 

53,267

 

 

(47,515

)

 

 

Net Decrease in Cash

 

(1,816,741

)

 

(1,515,928

)

Cash at Beginning of Period

 

3,131,249

 

 

3,822,359

 

Cash at End of Period

$

1,314,508

 

$

2,306,431

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the period for:

Interest

$

–

$

3,206

 

 

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

 

 

Aimee C. Brown

Corporate Secretary

(954) 252-3440, ext. 313

KEYWORDS: Florida United States North America

INDUSTRY KEYWORDS: Marketing Retail Consumer Electronics Communications Technology Home Goods

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