Market Newsdesk

FREDERICK, Md., Nov. 12, 2020 (GLOBE NEWSWIRE) — TOMI Environmental Solutions, Inc.^® (“TOMI”) (NASDAQ:TOMZ), is a global company specializing in disinfection and decontamination utilizing its premier Binary Ionization Technology (BIT) platform through its SteraMist brand of products – a hydrogen peroxide-based mist and fog comprised of ionized Hydrogen Peroxide (iHP), announced its results for the third quarter of 2020.

TOMI Chief Executive Officer, Dr. Halden Shane stated, “We are a company that strives for SteraMist to become the gold standard in its industry, and I report another major milestone with revenues exceeding $21 million for our current calendar year. The third quarter also continued the trend of year over year revenue growth as SteraMist continues to see widespread adoption.   We have been pleasantly surprised to see that new clients in a number of the new verticals targeted by our commercial division are proving to be faster in integrating SteraMist into their protocol compared to blue-chip clients that adhere to stringent protocol and procedures. On the other hand, the TOMI Service Network and Healthcare Divisions faced persistent headwinds in the quarter as a number of potential clients elected to continue to utilize harsh chemical disinfectants and low-cost delivery systems. We anticipate these industries will increasingly see negative affects of these disinfectants and increasingly seek SteraMist to be their permanent solution, a trend that we have already seen as we begin the fourth quarter, as many of these companies are our either returning to or starting to use SteraMist. We also continued to make strides on the product development and intellectual property front with the SteraBot and SteraPack which will provide more differentiation in our product line and a competitive advantage in the marketplace. Management is adding executive sales division leaders and executing a plan for all divisions to grow consistently, both domestically and internationally, as we strive to innovate for a safer world.”

Financial Results for the Three Months Ended
September
3
0
, 20
20
compared to
September
30,
201
9

• Total net revenue was $4,292,000 compared to $1,600,000, representing an increase of $2,692,000, or 168%.
  • SteraMist^® equipment-based revenues was $2,945,000 and $669,000, respectively, representing an increase of $2,276,000 or 340%
  • SteraMist^® BIT Solution-based revenues was $732,000 and $259,000, respectively, representing an increase of $473,000 or 183%
  • Service-based revenue was $615,000 and $672,000, respectively, representing a decrease of $57,000 or 8%.
  • Domestic revenue was $3,446,000 and $1,288,000, respectively, representing an increase of $2,158,000, or 168%.
  • International revenue was approximately $846,000 and $312,000, respectively, representing an increase of $534,000 or 171%.
• Gross margins were 66.1% compared to 71.3%. The lower gross profit is attributable to the product mix in sales.
• Income from operations was $1,096,000, compared to a Loss from operations of ($188,000), representing an increase of $1,284,000.
• Net Income was $1,019,000, or $0.06 on a per share basis compared to a Net loss of ($237,000), or ($0.02) on a per share basis, representing an increase of $1,256,000.
• EBIDTA was $1,274,000 compared to an adjusted net loss of ($5,000). A table reconciling EBITDA to the appropriate GAAP measure is included with the Company’s financial information below.
• Cash provided from operations for the nine months ended September 30, 2020 and 2019 of $4,945,000, compared to cash used in operations of ($573,000), respectively.

     Balance sheet highlights as of September 30, 2020 and December 31, 2019

• Cash and cash equivalents of approximately $5,885,000 and $897,000, representing an increase of $4,988,000.  
• Working capital of $11,692,000 and ($1,266,000), representing an increase of $12,958,000.
• Shareholders’ equity of $13,251,000 and $890,000, representing an increase of $12,361,000.

Current Business Highlights To Date


Revenues

• Milestone reached in the third quarter of 2020 with total revenues exceeding $21 million in a calendar year.
• Year over year growth in overall revenue through September 30^th of $16,882,000 or 376%.
• Year over year growth SteraMist^® equipment revenue through September 30^th of $13,165,000 or 456%.
• Year over year growth SteraMist^® BIT Solution revenue through September 30^th of $2,931,000 or 509%.
• Year over year growth in service revenue through September 30^th of $786,000 or 76%.

Business Highlights

• Increased demand on solution re-orders as disinfecting and decontamination procedures have increased exponentially across the world.
• Saw an increase in Hospital-Healthcare customers purchasing multiple SteraMist units in order to deploy throughout multiple locations and/or areas within a facility.
• Broke ground on installation of permanent fogging system into our Frederick MD Facility.
• Continued development and testing of the “SteraBot” and launch of pilot program at Lithuanian University Hospital.
• Continued development of SteraPack with a tentative launch set for first quarter 2021.
• Launch of Commercial Division in response to increased demand in Federal Government facilities and agencies, the aircraft (both airplane and helicopter), manufacturing companies, automobile, naval, education, retail, housing and recreation, and of course emergency preparedness for counties and cities.
• SteraMist was featured in a United States Department of Agriculture paper “Cold plasma-activated hydrogen peroxide aerosol on populations of Salmonella Typhimurium and Listeria innocua and quality changes of apple, tomato and cantaloupe during storage – A pilot scale study” is authored by Dr. Xuetong Fan, who has previously contributed to two prior studies regarding direct produce application.
• Issuance of a first Australian patent protecting use of its iHP technology, and pursuing patent rights in diverse regions of the world, encompassing the European Union, Brazil, Mexico, Korea, China, India, and many other countries.
• SteraMist was chosen to be a disinfection solution for the 2019-2020 PGA Champions Tour.
• Increased demand of product and services has led to the hiring and onboarding of additional employees to assist in a wide variety of company operations, including but not limited to accounting, procurement, customer satisfaction, and quality control.

TOMI™ Environmental Solutions, Inc.: Innovating for a safer world®

TOMI™ Environmental Solutions, Inc. (NASDAQ:TOMZ) is a global decontamination and infection prevention company, providing environmental solutions for indoor surface disinfection through the manufacturing, sales and licensing of its premier Binary Ionization Technology® (BIT™) platform. Invented under a defense grant in association with the Defense Advanced Research Projects Agency (DARPA) of the U.S. Department of Defense, BIT™ solution utilizes a low percentage Hydrogen Peroxide as its only active ingredient to produce a fog of  ionized Hydrogen Peroxide (iHP™). Represented by the SteraMist® brand of products, iHP™ produces a germ-killing aerosol that works like a visual non-caustic gas.
TOMI products are designed to service a broad spectrum of commercial structures, including, but not limited to, hospitals and medical facilities, cruise ships, office buildings, hotel and motel rooms, schools, restaurants, meat and produce processing facilities, military barracks, police and fire departments, and athletic facilities. TOMI products and services have also been used in single-family homes and multi-unit residences.

TOMI develops training programs and application protocols for its clients and is a member in good standing with The American Biological Safety Association, The American Association of Tissue Banks, Association for Professionals in Infection Control and Epidemiology, Society for Healthcare Epidemiology of America, America Seed Trade Association, and The Restoration Industry Association.

For additional information, please visit http://www.tomimist.com/ or contact us at [email protected].

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Certain written and oral statements made by us may constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Forward-looking statements are identified by such words and phrases as “we expect,” “expected to,” “estimates,” “estimated,” “current outlook,” “we look forward to,” “would equate to,” “projects,” “projections,” “projected to be,” “anticipates,” “anticipated,” “we believe,” “could be,” and other similar phrases. All statements addressing operating performance, events, or developments that we expect or anticipate will occur in the future, including statements relating to revenue growth, earnings, earnings-per-share growth, or similar projections, are forward-looking statements within the meaning of the Reform Act. They are forward-looking, and they should be evaluated in light of important risk factors that could cause our actual results to differ materially from our anticipated results. The information provided in this document is based upon the facts and circumstances known at this time. We undertake no obligation to update these forward-looking statements after the date of this release.

Use of Non-GAAP Financial Measures

TOMI uses a non-GAAP financial measures in this release. Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure and is intended to serve as a supplement to TOMI’s results provided in accordance with GAAP. TOMI believes that such information may provide its investors a better understanding of TOMI’s underlying operational performance, business and performance trends. 

Although TOMI believes that the use of non-GAAP financial measures enhance its investors’ understanding of its business and performance, TOMI’s use of non-GAAP financial measures should not be considered an alternative to GAAP basis financial measures and should be read in conjunction with the relevant GAAP financial measures. Other companies in similar industries may define or calculate non-GAAP financial measures differently than TOMI, limiting their usefulness as a comparative measure.  Because of these limitations, the non-GAAP financial measure used in this release should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measure is available in this news release.

ASSETS
	September 30, 2020 (Unaudited)			December 31, 2019
Cash and Cash Equivalents	$	5,885,383		$	897,223
Accounts Receivable – net	3,504,284			1,494,658
Other Receivables	157,487			–
Inventories	4,374,500			2,315,214
Vendor Deposits	333,212			141,052
Prepaid Expenses	376,758			187,664
Total Current Assets	14,631,624			5,035,811
Property and Equipment – net	1,111,342			1,367,864
Other Assets:
Intangible Assets – net	658,969			939,010
Operating Lease – Right of Use Asset	642,738			674,471
Capitalized Software Development Costs – net	62,852			94,278
Other Assets	469,024			114,033
Total Other Assets	1,833,583			1,821,792
Total Assets	$	17,576,549		$	8,225,467
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts Payable	$	2,149,988		$	713,222
Accrued Expenses and Other Current Liabilities	671,381			450,112
Accrued Officers Compensation	40,050			–
Accrued Interest	–			66,667
Current Portion of Long-Term Operating Lease	78,723			71,510
Convertible Notes Payable, net of discount of $0
at December 31, 2020	–			5,000,000
Total Current Liabilities	2,940,142			6,301,511
Long-Term Liabilities:
Loan Payable	410,700
Long-Term Operating Lease, Net of Current Portion	974,311			1,034,413
Total Long-Term Liabilities	1,385,011			1,034,413
Total Liabilities	4,325,153			7,335,924
Commitments and Contingencies	–			–
Shareholders’ Equity:
Cumulative Convertible Series A Preferred Stock;
par value $0.01 per share, 1,000,000 shares authorized; 63,750 shares issued
and outstanding at September 30, 2020 and December 31, 2019	638			638
Cumulative Convertible Series B Preferred Stock; $1,000 stated value;
7.5% Cumulative dividend; 4,000 shares authorized; none issued
and outstanding at September 30, 2020 and December 31, 2019	–			–
Common stock; par value $0.01 per share, 250,000,000 shares authorized;
16,748,513 and 15,587,552 shares issued and outstanding
at September 30, 2020 and December 31, 2019, respectively.	167,485			155,875
Additional Paid-In Capital	49,287,039			44,232,274
Accumulated Deficit	(36,203,766)			(43,499,244)
Total Shareholders’ Equity	13,251,396			889,543
Total Liabilities and Shareholders’ Equity	$	17,576,549		$	8,225,467
(1) Share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was
effected September 10, 2020. Refer to Note 11—Equity for further information.

TOMI ENVIRONMENTAL SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
		For The Three Months Ended						For The Nine Months Ended
		September 30,						September 30,
		2020			2019			2020			2019
Sales, net		$	4,291,589		$	1,600,387		$	21,373,504		$	4,491,719
Cost of Sales		1,455,568			460,008			8,484,580			1,616,680
Gross Profit		2,836,021			1,140,379			12,888,924			2,875,039
Operating Expenses:
Professional Fees		227,560			82,945			418,516			297,349
Depreciation and Amortization		177,279			182,689			521,486			539,070
Selling Expenses		212,624			314,110			980,096			1,274,326
Research and Development		44,862			88,137			245,443			249,373
Equity Compensation Expense		10,621			–			307,686			87,033
Consulting Fees		75,204			31,799			226,454			87,066
General and Administrative		991,543			628,285			2,776,846			1,931,770
Total Operating Expenses		1,739,693			1,327,965			5,476,527			4,465,987
Income (loss) from Operations		1,096,328			(187,586)			7,412,397			(1,590,948)
Other Income (Expense):
Amortization of Debt Discounts		–			–			–			(17,534)
Interest Income		762			773			2,347			2,432
Interest Expense		(790)			(50,000)			(42,266)			(150,000)
Total Other Income (Expense)		(28)			(49,227)			(39,919)			(165,102)
Income (loss) before income taxes		1,096,300			(236,813)			7,372,478			(1,756,050)
Provision for Income Taxes		77,000			–			77,000			–
Net Income (loss)		$	1,019,300		($236,813)			$	7,295,478		($1,756,050)
Net income (loss) Per Common Share
Basic		$	0.06		($0.02)			$	0.44		($0.11)
Diluted		$	0.05		($0.02)			$	0.40		($0.11)
Basic Weighted Average Common Shares Outstanding		16,741,622			15,588,680			16,429,360			15,585,822
Diluted Weighted Average Common Shares Outstanding		18,593,255			15,588,680			18,280,993			15,585,822
(1) Share and per share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected
September 10, 2020. Refer to Note 11—Equity for further information.

 

	Reconciliation of Net Income to EBITDA
			For The Three Months Ended								For The Nine Months Ended
			September 30,								September 30,
				2020				2019				2020				2019
			(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Net income (loss)			$	1,019,300			$	(236,813)			$	7,295,478			$	(1,756,050)
	Interest Income			(762)				(773)				(2,347)				(2,432)
	Interest Expense			790				50,000				42,266				150,000
	Depreciation and Amortization			177,279				182,689				521,486				539,070
	Provision for Income Taxes (Note 17)			77,000								77,000
	Other			–				–				–				17,534
	EBITDA (Adjusted Loss)		$	1,273,607			$	(4,897)			$	7,933,883			$	(1,051,878)
	EBITDA Margin			30	%			0	%			37	%			-23	%

INVESTOR RELATIONS CONTACT

Harold Paul
[email protected]

• First pa
  tient
  dos
  ed in clinical trial of
  NKX101
  , investigational NK cell therapy engineered with NKG2D-targeted CAR
  ,
  in
  acute myeloid leukemia and
  myelodysplastic syndromes
  
• IND
  application
  for NKX019 expected to be filed in 1Q 2021
• Ended third quarter 2020 with
  $
  3
  30.
  2
  million of
  cash and cash equivalents,
  believed to be sufficient to fund operations
  into at least the second half of
  2023
  

SOUTH SAN FRANCISCO, Calif., Nov. 12, 2020 (GLOBE NEWSWIRE) — Nkarta, Inc. (Nasdaq: NKTX), a clinical-stage biopharmaceutical company developing engineered natural killer (NK) cell therapies to treat cancer, today reported financial results for the third quarter ended September 30, 2020, and highlighted recent corporate accomplishments.

“We’re excited by the continued progress made at Nkarta this quarter and the ability of our teams to advance Nkarta’s allogeneic, off-the-shelf cell therapy programs,” said Paul J. Hastings, President and Chief Executive Officer of Nkarta. “We have dosed the first patient in our first clinical trial of NKX101, continue to prepare our in-house clinical GMP capabilities for the production of NKX019, and remain on track to file Nkarta’s second IND in the first quarter of 2021 for NKX019. With patients always foremost in mind, we remain focused on advancing Nkarta’s NK cell platform as the next foundation in anti-cancer cell therapy.”

Recent Developments

• First patient dosed in the Phase 1 clinical trial of NKX101, a first-in-class investigational NK cell cancer immunotherapy engineered to express a chimeric antigen receptor (CAR) targeting NKG2D ligand, for the treatment of relapsed/refractory acute myeloid leukemia (AML) and higher risk myelodysplastic syndromes (MDS).
• Nadir Mahmood, Ph.D. appointed to the expanded role of Chief Financial and Business Officer, having previously served as Nkarta’s Chief Business Officer. He succeeded Matthew Plunkett, Ph.D., who stepped down as Chief Financial Officer in October 2020.
• Alicia J. Hager, J.D., Ph.D. joined Nkarta as its Chief Legal Officer.

Anticipated
Near-term Clinical
Milestone
s

• In 1Q 2021, Nkarta expects to file an Investigational New Drug (IND) Application for NKX019, an investigational NK cell therapy engineered to target tumors expressing CD19 antigen for the treatment of B-cell malignancies.

Third
Quarter 2020
Financial Highlights

• Cash and
  C
  ash E
  quivalents
  : As of September 30, 2020, Nkarta had cash, cash equivalents, restricted cash and short-term investments of $330.2 million, which includes proceeds from the Company’s July 2020 IPO of $265.1 million, net of underwriting discounts and commissions and other offering costs.

• R
  &D Expenses: Research & development expenses were $9.8 million for the third quarter of 2020, which includes $0.7 million of non-cash stock-based compensation expense.

• G&A Expenses: General and administrative expenses were $3.9 million for the third quarter of 2020, which includes $0.9 million of non-cash stock-based compensation expense.

• Net Loss. Net loss was $13.7 million, or $0.44 per basic and diluted share, for the quarter ended September 30, 2020.

Financial Guidance

• Nkarta expects its current cash and cash equivalents will be sufficient to fund its current operating plan into at least the second half of 2023. The company expects cash and cash equivalents at December 31, 2020 to be in the range of $300 million to $310 million.

About NKX101

NKX101 is an investigational, off-the-shelf cancer immunotherapy that uses natural killer (NK) cells derived from the peripheral blood of healthy donors and engineered with membrane-bound IL15 and a chimeric antigen receptor (CAR) targeting NKG2D ligands on tumor cells. NKG2D, a key activating receptor found on naturally occurring NK cells, induces a cell-killing immune response through the detection of stress ligands that are widely expressed on cancer cells. By engineering NKX101 with the proprietary NKG2D-based CAR, the ability of NK cells to recognize and kill tumor cells in pre-clinical models is increased significantly compared to non-engineered NK cells. The addition of membrane-bound IL15, a proprietary version of a cytokine for activating NK cell growth, has been shown in pre-clinical models to enhance the proliferation, persistence and sustained activity of NK cells. A multi-center Phase 1 clinical trial of NKX101 in patients with relapsed/refractory acute myeloid leukemia (AML) or higher risk myelodysplastic syndromes (MDS) is currently enrolling. Additional information about the clinical trial is available on ClinicalTrials.gov, identifier NCT04623944.

About NKX019

NKX019 is an investigational, off-the-shelf cancer immunotherapy that uses natural killer (NK) cells derived from the peripheral blood of healthy donors and engineered with a chimeric antigen receptor (CAR) targeting the CD19 antigen and membrane-bound IL15. CD19 antigen is a B-cell marker and validated target for B cell cancer therapies. NKX019 uses the CAR to target and bind to CD19, leading to an immune response that eliminates CD19-expressing cells in preclinical studies. The addition of membrane-bound IL15, a proprietary version of a cytokine for activating NK cell growth, has been shown in preclinical models to enhance the proliferation, persistence and activity of NK cells. Nkarta plans to file an IND application with the FDA in the first quarter of 2021. A Phase 1 clinical trial of NKX019 in patients with advanced relapsed/refractory B cell malignancies is planned to initiate in 2021.

About
Nkarta’s
NK
C
ell T
echnologies

Nkarta has pioneered a novel discovery and development platform for the engineering and efficient production of allogeneic, off-the-shelf natural killer (NK) cell therapy candidates. The approach harnesses the innate ability of NK cells to recognize and kill tumor cells, and builds upon the important advances in cellular immunotherapy and chimeric antigen receptor (CAR) biology. To enhance the intrinsic activity of NK cells, Nkarta genetically engineers the cells with a CAR that consists of a targeting receptor designed to recognize and bind to specific proteins on the surface of cancerous cells. This receptor is fused to co-stimulatory and signaling domains to amplify cell signaling and NK cell cytotoxicity. Upon binding the target, NK cells become activated and release cytokines that enhance the immune response and cytotoxic granules that lead to killing of the target cell. All of Nkarta’s NK cell therapy candidates are engineered with a membrane-bound IL15, a proprietary version of a cytokine known for activating NK cell growth, to enhance the persistence and activity of the NK cells.

Nkarta’s manufacturing process generates an abundant supply of NK cells that, at commercial scale, is expected to be significantly lower in cost than other current allogeneic and autologous cell therapies. Key to this efficiency is the rapid expansion of donor-derived NK cells using a proprietary NKSTIM cell line, leading to the production of hundreds of individual doses from a single manufacturing run. The platform also features the ability to freeze and store CAR NK cells for an extended period of time and is designed to enable immediate, off-the-shelf administration to patients at the point of care.

About Nkarta

Nkarta is a clinical-stage biotechnology company advancing the development of allogeneic, off the shelf natural killer (NK) cell therapies for cancer. By combining its cell expansion and cryopreservation platform with proprietary cell engineering technologies, Nkarta is building a pipeline of cell therapy candidates generated by efficient manufacturing processes, which are engineered to enhance tumor targeting and improve persistence for sustained activity in the body. For more information, please visit the company’s website at www.nkartatx.com.

Cautionary Note on Forward-Looking Statements

Statements contained in this press release regarding matters that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “potential,” “projects,” “would” and “future” or similar expressions are intended to identify forward-looking statements. Examples of these forward-looking statements include statements concerning: Nkarta’s expectations regarding its growth, strategy, progress and timing of its preclinical studies and clinical trials for NKX101 and NKX019, including its regulatory plans and the timing of the NKX019 IND and trial initiation; the mechanism of action and activity of Nkarta’s product candidates; the efficiency and cost of Nkarta’s manufacturing processes; the number of doses generated from a manufacturing run; Nkarta’s progress towards in-house clinical GMP capability; the proprietary nature of Nkarta’s technology; and Nkarta’s expected cash burn for 2020 and cash runway. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among others: Nkarta’s limited operating history and historical losses; Nkarta’s ability to raise additional funding to complete the development and any commercialization of its product candidates; Nkarta’s dependence on the success of its co-lead product candidates, NKX101 and NKX019; that Nkarta may be delayed in initiating, enrolling or completing any clinical trials; competition from third parties that are developing products for similar uses; Nkarta’s ability to obtain, maintain and protect its intellectual property; Nkarta’s dependence on third parties in connection with manufacturing, clinical trials and pre-clinical studies; and risks relating to the impact on our business of the COVID-19 pandemic or similar public health crises.

These and other risks are described more fully in Nkarta’s filings with the Securities and Exchange Commission (“SEC”), including the “Risk Factors” section of Nkarta’s final prospectus for its initial public offering, filed with the SEC on July 13, 2020, Nkarta’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020, filed with the SEC on August 20, 2020, Nkarta’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020, filed with the SEC on November 12, 2020, and our other documents subsequently filed with or furnished to the SEC. All forward-looking statements contained in this press release speak only as of the date on which they were made. Except to the extent required by law, Nkarta undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

Nkarta, Inc.

Condensed Statements of Operations

(in thousands, except share and per share data)

(Unaudited)

		Three Months Ended September 30,								Nine Months Ended September 30,
			2020				2019				2020				2019
Collaboration revenue		$	—			$	—			$	—			$	115
Operating expenses
Research and development			9,828				4,620				24,950				10,535
General and administrative			3,918				1,289				8,560				3,281
Total operating expenses			13,746				5,909				33,510				13,816
Loss from operations			(13,746	)			(5,909	)			(33,510	)			(13,701	)
Other income (expense), net:
Change in fair value of preferred stock purchase right liability			—				3,383				(40,163	)			3,383
Other income (expense), net			53				(142	)			209				(271	)
Total other income (expense), net			53				3,241				(39,954	)			3,112
Net loss		$	(13,693	)		$	(2,668	)		$	(73,464	)		$	(10,589	)
Net loss per share, basic and diluted		$	(0.44	)		$	(1.75	)		$	(6.39	)		$	(7.45	)
Weighted average shares used to compute net loss per share, basic and diluted			30,981,441				1,528,510				11,499,327				1,421,882

Nkarta, Inc.

Condensed Balance Sheets

(in thousands)

(Unaudited)

		September 30, 2020			December 31, 2019
Assets
Cash, cash equivalents, restricted cash and short-term investments		$	330,172		$	37,259
Property and equipment, net			9,180			3,080
Operating lease right-of-use assets			8,763			7,144
Other assets			4,180			929
Total assets		$	352,295		$	48,412
Liabilities and stockholders’ equity (deficit)
Preferred stock purchase right liability		$	—		$	1,478
Operating lease liabilities			9,135			7,296
Other liabilities			8,179			5,305
Total liabilities			17,314			14,079
Convertible preferred stock			—			59,815
Stockholders’ equity (deficit)			334,981			(25,482	)
Total liabilities and stockholders’ equity (deficit)		$	352,295		$	48,412

Nkarta Media/Investor Contact:
Greg Mann
Nkarta, Inc.
[email protected]

TREVOSE, Pa., Nov. 12, 2020 (GLOBE NEWSWIRE) — StoneMor Inc. (NYSE: STON) (“StoneMor” or the “Company”), a leading owner and operator of cemeteries and funeral homes, today reported operating and financial results for the third quarter and nine-month period ended September 30, 2020. Investors are encouraged to read the Company’s quarterly report on Form 10-Q when it is filed with the Securities and Exchange Commission (the “SEC”), which will contain additional details, and will be posted at www.stonemor.com.

THIRD
QUARTER
FINANCIAL PERFORMANCE

• Revenues for the third quarter were $76.9 million compared to $73.2 million in the third quarter in the prior year. Nine-month revenues were $218.8 million compared to $223.1 million in the prior year period. When adjusted to exclude revenues from properties divested since January 1, 2019, revenues for the quarter and nine months ended September 30, 2020 were $76.8 million and $217.3 million, respectively, compared to revenues of $69.2 million and $211.0 million, respectively, for the prior year periods.
• Cemetery segment operating income for the third quarter was $11.7 million compared to $4.2 million in the third quarter in the prior year, representing an increase of $7.5 million. Nine-month cemetery segment operating profit was $24.3 million compared to $11.8 million in the prior year period, representing an increase of $12.6 million.
• Funeral home segment operating income for the third quarter was $1.5 million compared to $1.1 million in the third quarter in the prior year, representing an increase of $0.4 million. Nine-month funeral home segment operating profit was $4.9 million compared to $4.4 million in the prior year period, representing an increase of $0.5 million.
• Corporate overhead expense decreased to $9.8 million in the third quarter compared to $11.6 million in the third quarter in the prior year.
• Third quarter net loss was $7.9 million compared to $42.7 million in the third quarter in the prior year. Third quarter net loss in the prior year included a loss on impairment of goodwill of $24.9 million.
• Third quarter operating income was $3.2 million, compared to an operating loss of $6.6 million in the third quarter in the prior year which included other losses of $0.1 million.

Joe Redling, StoneMor’s President and Chief Executive Officer said, “The third quarter continued the trend of growth established in the first half of 2020, particularly as it relates to our cemetery sales production¹ and expense management initiatives. We delivered record levels of cemetery sales production during the third quarter of 2020, including a 27% year-over-year increase. The upward trajectory was largely driven by 32% growth in same-store pre-need sales production and included increases in both contract volume and average pricing. This sales production growth was generated while reducing our expenses across the board and driving increased Field EBITDA² levels.”

LIQUIDITY UPDATE

As of September 30, 2020, the Company had $64.6 million of cash, including $20.6 million of restricted cash, and $328.3 million of total debt.

“StoneMor produced a third quarter that generated adjusted EBITDA of $5.5 million and operating cash flow of $2.6 million, which includes a $6.6 million cash interest payment,” said Jeff DiGiovanni, StoneMor’s Senior Vice President and Chief Financial Officer. “In addition, through the management of its Trust assets, between investment return and cash collections, net of distributions, StoneMor has increased the value of its Trust assets by $15.4 million, resulting in a further deleveraging of our balance sheet. As we look forward, we continue to focus on generating operating cash flow through effective management of our operations and related treasury functions and our corporate cost reduction initiatives.”

CONFERENCE CALL INFORMATION

StoneMor will conduct a conference call to discuss this news release today, November 12, 2020 at 4:30 p.m. Eastern Time. The conference call can be accessed by calling (800) 954-0623. No reservation number is necessary; however, due to the on-going pandemic, it is advised that interested parties access the call-in number 5 to 10 minutes prior to the scheduled start time to avoid delays. StoneMor will also host a live webcast of this conference call. Investors may access the live webcast via the Investors page of the StoneMor website www.stonemor.com under Events & Presentations.

About StoneMor Inc.

StoneMor Inc., headquartered in Trevose, Pennsylvania, is an owner and operator of cemeteries and funeral homes in the United States, with 318 cemeteries and 86 funeral homes in 27 states and Puerto Rico. StoneMor’s cemetery products and services, which are sold on both a pre-need (before death) and at-need (at death) basis, include: burial lots, lawn and mausoleum crypts, burial vaults, caskets, memorials, and all services which provide for the installation of this merchandise. For additional information about StoneMor Inc. please visit StoneMor’s website, and the investors section, at http://www.stonemor.com.

CONTACT

Investor Relations
StoneMor Inc.
(215) 826-4438

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this press release, including, but not limited to, information regarding continued implementation of the Company’s performance and cost structure improvement efforts and the anticipated financial impact thereof, are forward-looking statements. Generally, the words “believe,” “
may
,” “will,” “estimate,” “continue,” “anticipate
,” “intend,” “project,” “expect,” “predict” and similar expressions identify these forward-looking statements. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are based on management’s current expectations and estimates. These statements are neither promises nor guarantees and are made subject to certain risks and uncertainties that could cause actual results to differ materially from the results stated or implied in this press release.
StoneMor’s
major risks are related to uncertainties associated with
current business and economic disruptions resulting from the recent coronavirus pandemic, including the effect of government regulations issued in connection therewith, its ability to identify, and negotiate acceptable agreements with, purchasers of additional properties, uncertainties associated with the cash flow from pre-need and at-need sales, trusts and financings, which may impact
StoneMor’s
ability to meet its financial projections and service its debt, as well as with
StoneMor’s
ability to maintain an effective system of internal control over financial reporting and disclosure controls and procedures.

When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements set forth in
StoneMor’s
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and the other reports that StoneMor files with the Securities and Exchange Commission, from time to time. Except as required under applicable law, StoneMor assumes no obligation to update or revise any forward-looking statements made herein or any other forward-looking statements made by it, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

This release includes certain non-GAAP financial measures, including comparable location revenues, adjusted operating income and adjusted comparable location operating income, EBITDA, adjusted EBITDA and field EBITDA, and unlevered cash provided by operating activities, which are intended as supplemental measures of the Company’s performance that are not required by or presented in accordance with GAAP. All business results presented in this release are not prepared in accordance with Article 11 of Regulation S-X.

Management uses these non-GAAP measures internally to evaluate and manage the Company’s operations and to better understand its business because they facilitate a comparative assessment of the Company’s operating performance relative to its performance based on results calculated under GAAP. These non-GAAP measures also isolate the effects of some items that vary from period to period without any correlation to core operating performance and eliminate certain charges that management believes do not reflect the Company’s operations and underlying operational performance. The compensation committee of the Company’s board of directors also uses certain of these measures to evaluate management’s performance and set its compensation. The Company believes that these non-GAAP measures also provide useful information to investors regarding certain financial and business trends relating to the Company’s financial condition and operating results facilitates an evaluation of the financial performance of the Company and its operations on a consistent basis. Providing this information therefore allows investors to make independent assessments of the Company’s financial performance, results of operation and trends while viewing the information through the eyes of management.

These non-GAAP measures are subject to limitations. The non-GAAP measures presented in this release may not be comparable to similarly titled measures used by other companies because other companies may not calculate one or more in the same manner. Additionally, the non-GAAP performance measures exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements; do not reflect changes in, or cash requirements for, working capital needs; and do not reflect interest expense, or the requirements necessary to service interest or principal payments on debt. Further, our historical adjusted results are not intended to project our adjusted results of operations or financial position for any future period. To compensate for these limitations, management presents and considers these non-GAAP measures in conjunction with the Company’s GAAP results; no non-GAAP measure should be considered in isolation from or as alternatives to net income, earnings per share or any other measure determined in accordance with GAAP. Readers should review the reconciliations included below, and should not rely on any single financial measure to evaluate the Company’s business.

A reconciliation of each non-GAAP measure to the most directly comparable GAAP measure is set forth below (in thousands):

COMPARABLE LOCATION
REVENUES

		Three Months Ended September   30,								Nine Months Ended September   30,
		2020				2019				2020				2019
Total revenues		$	76,856			$	73,151			$	218,808			$	223,115
Less: Revenue associated with divested properties			77				3,922				1,538				12,116
Comparable location revenues		$	76,779			$	69,229			$	217,270			$	210,999

ADJUSTED OPERATING
INCOME (
LOSS
)
AND ADJUSTED COMPARABLE LOCATION OPERATING INCOME (LOSS)

		Three Months Ended September   30,								Nine Months Ended September   30,
		2020				2019				2020				2019
Operating income (loss)		$	3,211			$	(6,570	)		$	30,475			$	(26,121	)
Less: Gain on sale of businesses			—				—				31,120				—
Less: Other losses, net			—				(129	)			(2,169	)			(3,558	)
Adjusted operating income (loss)			3,211				(6,441	)			1,524				(22,563	)
Less: Operating income (loss) associated with divested properties			60				1,331				(255	)			3,418
Adjusted comparable location operating income (loss)		$	3,151			$	(7,772	)		$	1,779			$	(25,981	)

EBITDA
,
ADJUSTED EBITDA
AND FIELD EBITDA

		Three Months Ended September   30,								Nine Months Ended September   30,
		2020				2019				2020				2019
Net loss		$	(7,857	)		$	(42,652	)		$	(2,768	)		$	(99,584	)
Income tax benefit (expense)			(1,129	)			(1,545	)			(3,333	)			4,841
Interest expense			12,197				12,765				36,576				35,282
Depreciation and amortization			2,285				2,647				7,078				8,120
EBITDA			5,496				(28,785	)			37,553				(51,341	)
Less: Gain on sale of businesses			—				—				31,120				—
Less: Other losses, net			—				(129	)			(2,169	)			(3,558	)
Less: Loss on debt extinguishment			—				—				—				(8,478	)
Less: Loss on impairment of goodwill			—				(24,862	)			—				(24,862	)
Adjusted EBITDA			5,496				(3,794	)			8,602				(14,443	)
Less: Investment and other income			9,905				10,063				30,830				29,474
Plus: Corporate overhead			9,762				11,595				27,019				38,145
Field EBITDA		$	5,353			$	(2,262	)		$	4,791			$	(5,772	)

UNLEVERED CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

		Three Months Ended September   30,								Nine Months Ended September   30,
		2020				2019				2020				2019
Net cash provided by (used in) operating activities		$	2,584			$	4,817			$	3,785			$	(26,755	)
Cash interest payments			6,686				7,463				20,361				24,444
Unlevered cash provided by (used in) operating activities		$	9,270			$	12,280			$	24,146			$	(2,311	)

STONEMOR
INC
.

CONDENSED CONSOLIDATED B
ALANCE SHEETS (UNAUDITED)

(
in
thousands, except share and per share data)

		September   30,				December 31,
		2020				2019
Assets
Current assets:
Cash and cash equivalents, excluding restricted cash		$	44,003			$	34,867
Restricted cash			20,601				21,900
Accounts receivable, net of allowance			57,995				55,794
Prepaid expenses			4,808				4,778
Assets held for sale			32,109				23,858
Other current assets			14,756				17,142
Total current assets			174,272				158,339
Long-term accounts receivable, net of allowance			75,104				75,549
Cemetery property			302,918				320,605
Property and equipment, net of accumulated depreciation			90,234				103,400
Merchandise trusts, restricted, at fair value			484,520				517,192
Perpetual care trusts, restricted, at fair value			300,738				343,619
Deferred selling and obtaining costs			117,367				114,944
Deferred tax assets			20				81
Intangible assets			55,377				56,246
Other assets			25,862				29,393
Total assets		$	1,626,412			$	1,719,368
Liabilities and Owners’ Equity
Current liabilities:
Accounts payable and accrued liabilities		$	52,524			$	55,134
Liabilities held for sale			24,815				20,668
Accrued interest			113				125
Current portion, long-term debt			1,143				374
Total current liabilities			78,595				76,301
Long-term debt, net of deferred financing costs			327,173				367,963
Deferred revenues			929,120				949,375
Deferred tax liabilities			31,062				34,613
Perpetual care trust corpus			300,738				343,619
Other long-term liabilities			46,938				49,987
Total liabilities			1,713,626				1,821,858
Commitments and contingencies
Owners’ equity:
Common stock, par value $0.01 per share, 200,000,000 shares authorized, 117,824,266 and 94,447,356 shares issued and outstanding, respectively			1,178				944
Paid-in capital in excess of par value			(85,624	)			(103,434	)
Retained deficit			(2,768	)			—
Total owners’ equity			(87,214	)			(102,490	)
Total liabilities and owners’ equity		$	1,626,412			$	1,719,368

STONEMOR INC.

CONDENSED CONSOLIDATED STATEM
ENTS OF OPERATIONS (UNAUDITED)

(
in
thousands, except per share and per unit data)

		Three Months Ended September   30,								Nine Months Ended September   30,
		2020				2019				2020				2019
Revenues:
Cemetery:
Interments		$	21,409			$	15,605			$	54,755			$	52,544
Merchandise			16,328				18,014				46,567				51,870
Services			16,435				17,068				48,923				50,400
Investment and other			9,905				10,063				30,830				29,474
Funeral home:
Merchandise			6,590				5,572				18,767				17,920
Services			6,189				6,829				18,966				20,907
Total revenues			76,856				73,151				218,808				223,115
Costs and Expenses:
Cost of goods sold			9,977				10,677				29,464				31,263
Cemetery expense			16,703				18,362				52,458				57,245
Selling expense			13,658				14,609				39,316				44,839
General and administrative expense			10,491				11,033				30,602				33,430
Corporate overhead			9,762				11,595				27,019				38,145
Depreciation and amortization			2,285				2,647				7,078				8,120
Funeral home expenses:
Merchandise			1,755				1,896				5,069				5,227
Services			5,653				5,351				16,347				16,363
Other			3,361				3,422				9,931				11,046
Total costs and expenses			73,645				79,592				217,284				245,678
Gain on sale of businesses			—				—				31,120				—
Other losses			—				(129	)			(2,169	)			(3,558	)
Operating income (loss)			3,211				(6,570	)			30,475				(26,121	)
Interest expense			(12,197	)			(12,765	)			(36,576	)			(35,282	)
Loss on debt extinguishment			—				—				—				(8,478	)
Loss on impairment of goodwill			—				(24,862	)			—				(24,862	)
Loss from operations before income taxes			(8,986	)			(44,197	)			(6,101	)			(94,743	)
Income tax benefit (expense)			1,129				1,545				3,333				(4,841	)
Net loss		$	(7,857	)		$	(42,652	)		$	(2,768	)		$	(99,584	)
Net loss per common share (basic)(1)		$	(0.07	)		$	(1.10	)		$	(0.03	)		$	(2.59	)
Net loss per common share (diluted)(1)		$	(0.07	)		$	(1.10	)		$	(0.03	)		$	(2.59	)
Weighted average number of common shares outstanding – basic(2)			117,819				38,916				103,341				38,438
Weighted average number of common shares outstanding – diluted(2)			117,819				38,916				103,341				38,438

      (1)   For the three and nine months ended September 30, 2020, represents net loss divided by weighted average number of common shares outstanding and for the three and nine months ended September 30, 2019, represents net loss divided by weighted average number of common limited partner units outstanding.
      (2)   For the three and nine months ended September 30, 2020, represents weighted average number of common shares outstanding and for the three and nine months ended September 30, 2019, represents weighted average number of common limited partner units outstanding.

STONEMOR
INC.

CONDENSED CONSOLIDATED STATEM
ENTS OF CASH FLOWS (UNAUDITED)

(
in
thousands)

		Nine Months Ended September   30,
		2020				2019
Cash Flows From Operating Activities:
Net loss		$	(2,768	)		$	(99,584	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Cost of lots sold			4,346				5,339
Depreciation and amortization			7,078				8,120
Provision for bad debt			4,529				5,380
Non-cash compensation expense			1,080				2,814
Loss on debt extinguishment			—				8,478
Loss on impairment of goodwill			—				24,862
Non-cash interest expense			16,159				12,435
Gain on sale of businesses			(31,120	)			—
Other losses, net			2,169				3,558
Changes in assets and liabilities:
Accounts receivable, net of allowance			(16,180	)			(14,305	)
Merchandise trust fund			(12,284	)			(11,137	)
Other assets			3,799				(1,339	)
Deferred selling and obtaining costs			(4,974	)			(1,850	)
Deferred revenues			39,238				23,860
Deferred taxes, net			(3,490	)			4,620
Payables and other liabilities			(3,797	)			1,994
Net cash provided by (used in) operating activities			3,785				(26,755	)
Cash Flows From Investing Activities:
Cash paid for capital expenditures			(4,784	)			(5,743	)
Proceeds from divestitures			48,336				1,250
Net cash provided by (used in) investing activities			43,552				(4,493	)
Cash Flows From Financing Activities:
Proceeds from issuance of Series A Preferred Stock			8,800				—
Proceeds from issuance of Common Stock			8,200				—
Proceeds from issuance of redeemable convertible preferred units, net			—				57,500
Proceeds from borrowings			3,672				406,087
Repayments of debt			(54,782	)			(366,644	)
Principal payment on finance leases			(1,061	)			(1,098	)
Cost of financing activities			(4,294	)			(17,972	)
Shares repurchased related to share-based compensation			(35	)			(677	)
Net cash (used in) provided by financing activities			(39,500	)			77,196
Net increase in cash, cash equivalents and restricted cash			7,837				45,948
Cash, cash equivalents and restricted cash — Beginning of period			56,767				18,147
Cash, cash equivalents and restricted cash — End of period		$	64,604			$	64,095
Supplemental disclosure of cash flow information:
Cash paid during the period for interest		$	20,361			$	24,444
Cash paid during the period for income taxes			1,077				1,470
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		$	2,372			$	2,759
Operating cash flows from finance leases			328				370
Financing cash flows from finance leases			1,061				1,098
Non-cash investing and financing activities:
Acquisition of assets by financing		$	—			$	2,234
Net transfers within assets held for sale			81,108				—
Accrued paid-in-kind interest on Senior Secured Notes			10,572				—

---

¹ Cemetery sales production represents dollar volume associated with new contracts executed during the period.
² Field EBITDA represents Adjusted Operating Income less Investment and Other Income plus Corporate Overhead and Depreciation and Amortization.

CARLSBAD, Calif., Nov. 12, 2020 (GLOBE NEWSWIRE) — Acutus Medical (Nasdaq: AFIB) today announced the appointment of Steven Mickelsen, MD, as Chief Translational Science Officer. Dr. Mickelsen will help guide the company’s vision to deliver the most advanced electrophysiology therapeutic solutions on the market for physicians and their patients. Mickelsen’s impact will further advance the company’s commitment to innovation across its access, diagnostic and therapy product portfolio, including researching, developing and advancing gold-tip catheter technology for Pulsed Field Ablation (PFA) and Radiofrequency (RF) ablation technologies.

“Acutus is committed to creating game-changing solutions and establishing new standards of care for cardiac arrhythmia management,” said Vince Burgess, President and CEO of Acutus Medical. “Dr. Mickelsen’s clinical and technical expertise and unique history pioneering the development of breakthrough therapeutic medical devices is indispensable as we progress from research to commercialization of important technologies such as Pulsed Field Ablation.”

Dr. Mickelsen joins Acutus Medical following an esteemed career practicing as a cardiac electrophysiologist at the University of Iowa Hospitals and Clinics in Iowa City. He focuses on complex ablation procedures and serves on faculty as Assistant Professor of Cardiovascular Medicine and Internal Medicine, and will continue his tenure going forward. In 2012, Dr. Mickelsen founded Farapulse, a company devoted to the discovery of more effective treatments for atrial fibrillation through the utilization of a pulsed electric field system that he invented. He served as the company’s initial President and CEO, and later as its Chief Science Officer, before stepping down in 2016 to focus on clinical research.

“The field of arrhythmia science is evolving at a breakneck speed. Physicians want to provide the best possible care, but we’re often confined by the limitations of technology. Acutus is changing that, and this is an opportunity to play a critical role delivering advanced EP solutions to treat the entire spectrum of cardiac arrhythmias,” said Dr. Mickelsen. “Pulsed field ablation represents an exciting potential future for EP; I’m thrilled to join a team that is dedicated to creating new solutions and enhancing the possibilities for physicians and their patients.”

Dr. Mickelsen is a board-certified electrophysiologist. He received his medical degree from the University of New Mexico School of Medicine, was a Howard Hughes Research Scholar at the National Institutes of Health in Bethesda, MD, and completed his internal medicine residency and clinical research at the Mayo Clinic. He also completed fellowships in Cardiology and Cardiac Electrophysiology at the University of Iowa Hospitals and Clinics.

About Acutus Medical

Acutus Medical is an arrhythmia management company focused on improving the way cardiac arrhythmias are diagnosed and treated. Acutus is committed to advancing the field of electrophysiology with a unique array of products and technologies which will enable more physicians to treat more patients more efficiently and effectively. Through internal product development, acquisitions and global partnerships, Acutus has established a global sales presence delivering a broad portfolio of highly differentiated electrophysiology products that provide its customers with a complete solution for catheter-based treatment of cardiac arrhythmias in each of its geographic markets. Founded in 2011, Acutus is based in Carlsbad, California.

Acutus PFA Technology is not for sale in the United States

Follow Acutus Medical on:

• Twitter: @AcutusMedical
• LinkedIn: www.linkedin.com/company/acutus-medical-inc-/
• Facebook: @AcutusMedical

US Media Contacts

Levitate
(260) 408-5383
[email protected]

SOUTH SAN FRANCISCO, Calif., Nov. 12, 2020 (GLOBE NEWSWIRE) — Nkarta, Inc. (Nasdaq: NKTX), a clinical-stage biopharmaceutical company developing engineered natural killer (NK) cell therapies to treat cancer, today announced that the first patient has been treated in the first-in-human Phase 1 clinical trial of NKX101 for the treatment of relapsed/refractory acute myeloid leukemia (AML) or higher risk myelodysplastic syndromes (MDS). The multi-center clinical trial is designed to evaluate safety, pharmacokinetics, and preliminary anti-tumor activity of NKX101.

NKX101 is the first investigational NK cell cancer immunotherapy engineered to express a chimeric activating receptor (CAR) targeting NKG2D. NKG2D, a key activating receptor found on naturally occurring NK cells, induces a cell-killing immune response through the detection of stress ligands that are widely and specifically expressed on cancer cells. With NKX101, NKG2D expression is increased by 10-fold and cytotoxic activity increased by 4-fold compared to non-engineered NK cells in preclinical models. NKX101 is also designed to express membrane-bound IL-15, which in preclinical models enhances the activity and persistence of the engineered NK cells. Nkarta’s proprietary manufacturing processes enable the evaluation of cryopreserved NKX101, expanding trial access across multiple clinical centers.

“Despite recent treatment breakthroughs, AML patients who relapse after front-line therapy still have poor outcomes, underscoring the need for new treatment options for this aggressive and lethal blood cancer,” said Carlos Bachier, M.D., Director of Cellular Therapy Research, Sarah Cannon Research Institute and Program Director for Sarah Cannon Center for Blood Cancer at TriStar Centennial Medical Center in Nashville, Tennessee, where the first patient has been treated. “To date, the significant clinical benefit achieved with CAR T cell therapies in the treatment of B cell lymphomas and acute lymphocytic leukemia has not extended to AML or other myeloid malignant disorders. The investigation of NKG2D-targeting and the tumor-killing potential of an engineered innate immune cell type is a promising new approach.”

“An extensive body of academic research has already shown increased expression of NKG2D targets in AML and other cancers, and demonstrated clinical responses in relapsed/refractory AML patients who received non-engineered allogeneic NK cells in single center academic studies as treatment,” said Kanya Rajangam, M.D., Ph.D., Chief Medical Officer of Nkarta. “With its amplified NKG2D targeting and enhanced NK cell engineering, NKX101 has the potential to improve upon this earlier clinical experience with non-engineered NK cells and to activate a deep and robust immune response in AML patients.”

A poster on the design of the NKX101 clinical trial in progress has been accepted for presentation at the 2020 American Society of Hematology Annual Meeting and Exhibition, Abstract 1040, “A Phase 1 Study of NKX101, an Allogeneic CAR Natural Killer (NK) Cell Therapy, in Subjects with Relapsed/Refractory (R/R) Acute Myeloid Leukemia (AML) or Higher-Risk Myelodysplastic Syndrome (MDS),” Session 616, December 5, 2020. 

About the
Phase 1 Clinical Trial of NKX101 in Participants with Relapsed/Refractory Acute Myeloid Leukemia
(AML)
or Higher Risk Myelodysplastic Syndromes
(MDS)

This First-in-Human Phase 1 study evaluates the safety, pharmacokinetics, and preliminary anti-tumor activity of NKX101, administered in a cycle of three weekly infusions following lymphodepletion, in adult patients living with relapsed/refractory AML or higher risk MDS. This single-arm, open-label, multi-center study consists of sequential dose-finding and dose-expansion. The safety of participants will be monitored by assessment of vital signs, physical examinations and laboratory tests. The clinical trial is designed to identify a recommended Phase 2 dose, and will evaluate cellular kinetics, pharmacodynamics, and preliminary anti-tumor activity using standard response criteria. Additional information is available on ClinicalTrials.gov, identifier NCT04623944.

About AML and MDS

Acute Myeloid Leukemia (AML) is a rapidly progressing blood cancer caused by abnormalities of myeloid cells, a cell type in the bone marrow that would normally develop into different types of blood cells. AML usually worsens rapidly and can lead to death if not treated. Despite recent advancements, an unmet need for novel treatment options remains high. Only approximately one in four patients with AML survive longer than five years. Patients with AML have a high rate of disease relapse after a treatment response. Due to age and comorbidities, not all patients are eligible to receive intensive chemotherapy, leaving them with limited treatment options. Once relapsed or refractory to front-line therapy, patients have limited treatment options. The worldwide incidence of AML was estimated to be more than 119,500 cases in 2017.^* In the United States, there will be an estimated 19,940 new cases of AML in 2020, with an estimated 11,180 deaths resulting from the disease.^**

Myelodysplastic Syndromes (MDS) are a group of bone marrow disorders in which the blood-forming cells in the bone marrow do not produce enough healthy blood cells. Some patients with MDS have too many young, immature blood-making cells in the bone marrow. The median overall survival rate of higher risk MDS patients is 0.8 to 3.0 years. There is currently no curative treatment for patients who relapse after front-line therapy or do not respond to front-line therapy. MDS can progress to AML in about one-third of patients.

^*Ming Yi et al, J Hematol Oncol. 2020; 13: 72; ^**National Institutes of Health, Cancer Stat Facts, accessed 11 Nov 2020.

About NKX101

NKX101 is an investigational, off-the-shelf cancer immunotherapy that uses natural killer (NK) cells derived from the peripheral blood of healthy donors and engineered with membrane-bound IL15 and a chimeric antigen receptor (CAR) targeting NKG2D ligands on tumor cells. NKG2D, a key activating receptor found on naturally occurring NK cells, induces a cell-killing immune response through the detection of stress ligands that are widely expressed on cancer cells. By engineering NKX101 with the proprietary NKG2D-based CAR, the ability of NK cells to recognize and kill tumor cells in pre-clinical models is increased significantly compared to non-engineered NK cells. The addition of membrane-bound IL15, a proprietary version of a cytokine for activating NK cell growth, has been shown in pre-clinical models to enhance the proliferation, persistence and sustained activity of NK cells. A multi-center Phase 1 clinical trial of NKX101 in patients with relapsed/refractory acute myeloid leukemia (AML) or higher risk myelodysplastic syndromes (MDS) is currently enrolling. Additional information about the clinical trial is available on ClinicalTrials.gov, identifier NCT04623944.

About
Nkarta’s
NK Cell Technologies

Nkarta has pioneered a novel discovery and development platform for the engineering and efficient production of allogeneic, off-the-shelf natural killer (NK) cell therapy candidates. The approach harnesses the innate ability of NK cells to recognize and kill tumor cells, and builds upon the important advances in cellular immunotherapy and chimeric antigen receptor (CAR) biology. To enhance the intrinsic activity of NK cells, Nkarta genetically engineers the cells with a CAR that consists of a targeting receptor designed to recognize and bind to specific proteins on the surface of cancerous cells. This receptor is fused to co-stimulatory and signaling domains to amplify cell signaling and NK cell cytotoxicity. Upon binding the target, NK cells become activated and release cytokines that enhance the immune response and cytotoxic granules that lead to killing of the target cell. All of Nkarta’s NK cell therapy candidates are engineered with a membrane-bound IL15, a proprietary version of a cytokine known for activating NK cell growth, to enhance the persistence and activity of the NK cells.

Nkarta’s manufacturing process generates an abundant supply of NK cells that, at commercial scale, is expected to be significantly lower in cost than other current allogeneic and autologous cell therapies. Key to this efficiency is the rapid expansion of donor-derived NK cells using a proprietary NKSTIM cell line, leading to the production of hundreds of individual doses from a single manufacturing run. The platform also features the ability to freeze and store CAR NK cells for an extended period of time and is designed to enable immediate, off-the-shelf administration to patients at the point of care.

About Nkarta

Nkarta is a clinical-stage biotechnology company advancing the development of allogeneic, off the shelf natural killer (NK) cell therapies for cancer. By combining its cell expansion and cryopreservation platform with proprietary cell engineering technologies, Nkarta is building a pipeline of cell therapy candidates generated by efficient manufacturing processes, which are engineered to enhance tumor targeting and improve persistence for sustained activity in the body. For more information, please visit the company’s website at www.nkartatx.com.

Cautionary Note on Forward-Looking Statements

Statements contained in this press release regarding matters that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “potential,” “projects,” “would” and “future” or similar expressions are intended to identify forward-looking statements. Examples of these forward-looking statements include statements concerning Nkarta’s expectations regarding: Nkarta’s growth, strategy, progress and timing of its preclinical studies and clinical trials for NKX101; the mechanism of action and activity of Nkarta’s product candidates, including the activity of NKX101 in AML patients; NKX101’s potential as a treatment for AML; the size of the AML market; the efficiency and cost of Nkarta’s manufacturing processes; the number of doses generated from a manufacturing run; and the proprietary nature of Nkarta’s technology. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among others: Nkarta’s limited operating history and historical losses; Nkarta’s ability to raise additional funding to complete the development and any commercialization of its product candidates; Nkarta’s dependence on the success of its co-lead product candidates, NKX101 and NKX019; that Nkarta may be delayed in initiating, enrolling or completing any clinical trials; competition from third parties that are developing products for similar uses; Nkarta’s ability to obtain, maintain and protect its intellectual property; Nkarta’s dependence on third parties in connection with manufacturing, clinical trials and pre-clinical studies; and risks relating to the impact on our business of the COVID-19 pandemic or similar public health crises.

These and other risks are described more fully in Nkarta’s filings with the Securities and Exchange Commission (“SEC”), including the “Risk Factors” section of Nkarta’s final prospectus for its initial public offering, filed with the SEC on July 13, 2020, Nkarta’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020, filed with the SEC on August 20, 2020, and our other documents subsequently filed with or furnished to the SEC. All forward-looking statements contained in this press release speak only as of the date on which they were made. Except to the extent required by law, Nkarta undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

Nkarta Media/Investor Contact:

Greg Mann
Nkarta, Inc.
[email protected]

 

Initiated and Advanced
C
linical Trial Evaluating Lead Product Candidate in COVID-19 Patients

Announces Next Steps in Development Program for Lead Product Candidate

Ended Quarter with $21.9 million in Cash and Cash Equivalents

CHARLOTTESVILLE, Va., Nov. 12, 2020 (GLOBE NEWSWIRE) — Diffusion Pharmaceuticals Inc. (Nasdaq: DFFN) (“Diffusion” or the “Company”) today reported financial results for the three and nine months ended September 30, 2020 and provided certain updates on its development program for its lead product candidate, trans sodium crocetinate (“TSC”), which is being developed to enhance the diffusion of oxygen to tissues with low oxygen levels, also known as hypoxia, a serious complication of many of medicine’s most intractable and difficult-to-treat conditions.

Third quarter results, recent developments, and anticipated next steps in the TSC development program include:

Third Quarter Results & Recent Developments

	•	Strengthened leadership team with additions and appointments to key management positions, including pharmaceutical industry veterans Jane Hollingsworth, as director, Robert Cobuzzi, Ph.D., as president and chief executive officer, and Chris Galloway, M.D., as chief medical officer, as well as Bill Elder, J.D., as general counsel.
	•	Ended quarter with $21.9 million in cash and cash equivalents.
	•	Announced dosing of first two patients in Phase 1b clinical trial evaluating TSC in hospitalized COVID-19 patients (the “100-303 COVID Trial”) with primary endpoint of evaluating safety and tolerability of TSC administered every six hours for up to 15 days, a more frequent dosing regimen than has been used in the Company’s previous clinical studies.
	•	As of November 11, 2020, patient enrollment continues, and no dose-limiting toxicities have been observed.

Near-Term Strategy

	•	Ongoing review of existing TSC development program with plans to modify the program and accomplish two principal strategic objectives:
			•	Optimize the clinical dose and dosing frequency for TSC.
			•	Evaluate TSC in clinical models designed to establish proof of concept for improvement in oxygenation following administration of TSC.
	•	Designing and initiating additional studies in effort to accomplish strategic objectives:
			•	Evaluating possibility of expanding 100-303 COVID Trial to include additional doses administered on the same regimen, assuming successful and timely completion of currently planned doses and final regulatory approval of pending protocol amendment to effect change.
			•	Designing additional clinical studies intended to evaluate (i) the effects of TSC using short-term experimental models of oxygenation with the expected primary objective of establishing proof of concept for improvement of tissue oxygen levels and certain other clinical parameters and (ii) depending on whether or not the Company decides to implement the expansion of the 100-303 COVID Trial, additional doses of TSC on a more frequent dosing regimen.
	•	Diffusion expects to fully fund these studies with cash-on-hand.
	•	Diffusion intends to provide certain additional details regarding the design of these new studies in January 2021 and to initiate the studies during the first quarter of 2021. The Company also now expects the 100-303 COVID Trial, whether or not the Company decides to implement the expansion described above, to be completed with topline data available by the end of first quarter of 2021.

Other Events

	•	Diffusion currently intends to participate in two virtual, biopharmaceutical and biotechnology industry conferences in mid-January 2021 – Biotech Showcase and the H.C. Wainwright 2021 Bioconnect Conference – and to provide its next update regarding its development program for TSC at that time.
	•	Launched new website design at www.diffusionpharma.com.

“Hypoxia can be a serious complication of a multitude of acute and chronic disease processes in patients of all ages and represents a continued area of unmet need that spans multiple therapeutic areas. I am excited about our development plans, which we believe will clarify TSC’s mechanism of action in controlled human studies of oxygenation. We intend to use these data to inform and evaluate our further development opportunities for TSC, as well as potential patient populations and indications,” said Chris Galloway, M.D., Chief Medical Officer of Diffusion.

“Diffusion has experienced a lot of changes over the past few months. While we continue to refine our vision for the Company, we are pleased with the progress we made during the third quarter and we are excited to begin implementing our plans during the coming months,” said Robert Cobuzzi, Ph.D., Chief Executive Officer of Diffusion. “We believe our near-term strategy will significantly improve the probability of development success for TSC by providing the opportunity to optimize dosing and obtain a clear clinical signal supporting the potential value of TSC’s mechanism of action across a broad range of conditions in which hypoxia remains a significant obstacle to effective treatment.”

Third
Quarter
Financial Results

Research and development (“R&D”) expenses were $3.1 million during the third quarter of 2020, compared with $1.7 million during the third quarter of 2019. A significant portion of the increase, $1.4 million, was attributable to expenses related to the initiation of the Company’s ongoing clinical trial evaluating TSC in COVID-19 patients. In addition, R&D expenses included $0.1 million related to winding down the Company’s Phase 2 stroke trial.

General and administrative (“G&A”) expenses were $2.1 million during the third quarter of 2020, compared with $1.3 million during the third quarter of 2019. The increase was primarily due to a $0.2 million increase in professional fees and a $0.6 million increase in salaries, wages and stock-based compensation expenses, including non-recurring expenses related to the retirement, resignation and separation of the Company’s former Chief Executive Officer in September 2020.

The Company recognized income tax benefits of $0.8 million and $0.2 million during the third quarters of 2020 and 2019, respectively. In both periods, the recognized benefit reflects the Company’s utilization of indefinite deferred tax liabilities as a source of income against indefinite lived portions of its deferred tax assets.

Diffusion had cash and cash equivalents of $21.9 million as of September 30, 2020, compared with $14.2 million as of December 31, 2019, and believes its cash and cash equivalents are sufficient to fund operating expenses and capital expenditures into the fourth quarter of 2022.

About Diffusion Pharmaceuticals Inc.

Diffusion Pharmaceuticals Inc. is an innovative biopharmaceutical company developing novel therapies that enhance the body’s ability to deliver oxygen to the areas where it is needed most. The Company’s lead product candidate, TSC, is being developed to enhance the diffusion of oxygen to tissues with low oxygen levels, also known as hypoxia, a serious complication of many of medicine’s most intractable and difficult-to-treat conditions. For more information please visit us on the web at www.diffusionpharma.com.

Forward-Looking Statements

This press release includes express and implied forward-looking statements including, without limitation, statements regarding the Company’s ongoing clinical trials and development plans for its product candidates and the Company’s financial condition, liquidity, and capital resources. By their nature, forward-looking statements involve risks and uncertainties because they relate to and depend on, among other things, events, competitive dynamics, and industry change. The Company may, in some cases, use terms such as “believes,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should,” “approximately,” or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Although the Company believes that it has a reasonable basis for each forward-looking statement contained herein, as a result of certain risks and uncertainties, known and unknown, the Company’s actual results could differ materially from any intentions, beliefs, projections, outlook, analyses, or expectations expressed herein. Particular risk and uncertainties include, among other things, those related to: the Company’s ability to design, initiate, execute, and complete its ongoing and planned studies evaluating TSC; the Company’s ability to achieve its near-term strategic objectives, in the near-term or at all; the Company’s ability to obtain additional financing; the success and timing of the Company’s clinical trials and preclinical studies, including its ability to enroll subjects in such trials and studies at anticipated rates; the Company’s ability to develop and commercialize TSC or any other product candidate; the ongoing COVID-19 pandemic; general economic, political, business, industry, and market conditions, including the recent United States (“U.S.”) presidential election; and the other factors discussed under the heading “Risk Factors” in the Company’s filings with the U.S. Securities and Exchange Commission (“SEC”). Any forward-looking statements in this press release speak only as of the date hereof (or such earlier date as may be identified) and, except as required by applicable law, rule or regulation, the Company undertakes no obligation to update any such statements after the date hereof. Comparisons of current and any prior period results are not intended to express any ongoing or future trends or indications of future performance, unless explicitly expressed as such, and should only be viewed as historical data. For all forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Investor Contact:

LHA Investor Relations
Kim Sutton Golodetz
(212) 838-3777
[email protected]

Media Contact:

Jeffrey Freedman
RooneyPartners
(646) 432-0191
[email protected]

(Tables to follow)

Diffusion Pharmaceuticals Inc.
Consolidated Balance Sheet
(unaudited)
	September 30, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	21,910,183		$	14,177,349
Prepaid expenses, deposits and other current assets		766,932			472,464
Total current assets		22,677,115			14,649,813
Property and equipment, net		174,133			252,366
Intangible asset		8,639,000			8,639,000
Right of use asset		174,668			247,043
Other assets		252,057			322,301
Total assets	$	31,916,973		$	24,110,523
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,411,717		$	1,251,412
Accrued expenses and other current liabilities		1,162,278			358,532
Current operating lease liability		112,953			111,477
Total current liabilities		2,686,948			1,721,421
Deferred income taxes		443,893			2,119,274
Noncurrent operating lease liability		61,715			135,566
Total liabilities		3,192,556			3,976,261
Stockholders’ Equity:
Common stock, $0.001 par value:
1,000,000,000 shares authorized; 64,015,441 and 33,480,365 issued and outstanding at September 30, 2020 and December 31, 2019, respectively		64,016			33,481
Additional paid-in capital		130,507,728			111,824,859
Accumulated deficit		(101,847,327	)		(91,724,078	)
Total stockholders’ equity		28,724,417			20,134,262
Total liabilities and stockholders’ equity	$	31,916,973		$	24,110,523

Diffusion Pharmaceuticals Inc.
Consolidated Statement of Operations
(unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2020				2019				2020				2019
Operating expenses:
Research and development	$	3,137,553			$	1,743,494			$	6,845,203			$	4,961,720
General and administrative		2,112,375				1,290,371				4,964,440				3,559,551
Depreciation		24,192				18,178				78,233				70,840
Loss from operations		(5,274,120	)			(3,052,043	)			(11,887,876	)			(8,592,111	)
Other income:
Interest income		29,233				21,991				89,246				59,596
Loss from operations before income tax benefit		(5,244,887	)			(3,030,052	)			(11,798,630	)			(8,532,515	)
Income tax benefit		805,676				225,960				1,675,381				485,216
Net loss	$	(4,439,211	)		$	(2,804,092	)		$	(10,123,249	)		$	(8,047,299	)
Deemed dividend arising from warrant exchange		—				—				(1,950,378	)			—
Net loss attributable to common stockholders	$	(4,439,211	)		$	(2,804,092	)		$	(12,073,627	)		$	(8,047,299	)
Per share information:
Net loss per share of common stock, basic and diluted	$	(0.07	)		$	(0.60	)		$	(0.24	)		$	(2.01	)
Weighted average shares outstanding, basic and diluted		64,011,342				4,693,290				50,216,239				4,005,919