ProPhase Labs Announces Financial Results for the Three Months Ended September 30, 2024
ProPhase Labs (NASDAQ: PRPH) reported financial results for Q3 2024, showing net revenue of $3.1 million compared to $8.4 million in Q3 2023. The company reported a net loss of $6.6 million, or $(0.35) per share. Key highlights include Pharmaloz Manufacturing projecting $15+ million in revenues and $5+ million in pre-tax earnings over the next 12 months, potential elimination of $6 million in annual overhead expenses in 2025, and strategic initiatives across multiple subsidiaries. The company maintains $3.1 million in cash and cash equivalents as of November 12, 2024. Notable developments include BE-Smart Esophageal Cancer Test partnerships, DNA Complete and DNA Expand launch, and upcoming Equivir clinical study results.
ProPhase Labs (NASDAQ: PRPH) ha riportato i risultati finanziari per il terzo trimestre del 2024, mostrando un fatturato netto di 3,1 milioni di dollari rispetto agli 8,4 milioni di dollari del terzo trimestre del 2023. L'azienda ha registrato una perdita netta di 6,6 milioni di dollari, ovvero $(0,35) per azione. I principali highlights includono Pharmaloz Manufacturing che prevede ricavi superiori a 15 milioni di dollari e utili ante imposte superiori a 5 milioni di dollari nei prossimi 12 mesi, la potenziale eliminazione di 6 milioni di dollari in spese generali annuali nel 2025 e iniziative strategiche attraverso molteplici sussidiarie. L'azienda detiene 3,1 milioni di dollari in contante e disponibilità liquide al 12 novembre 2024. Sviluppi notevoli includono le partnership per il test del cancro esofageo BE-Smart, il lancio di DNA Complete e DNA Expand, e i risultati dello studio clinico Equivir in arrivo.
ProPhase Labs (NASDAQ: PRPH) informó sobre los resultados financieros del tercer trimestre de 2024, mostrando ingresos netos de 3.1 millones de dólares en comparación con 8.4 millones de dólares en el tercer trimestre de 2023. La empresa reportó una pérdida neta de 6.6 millones de dólares, o $(0.35) por acción. Los aspectos destacados incluyen Pharmaloz Manufacturing, que proyecta ingresos superiores a 15 millones de dólares y ganancias antes de impuestos superiores a 5 millones de dólares durante los próximos 12 meses, la posible eliminación de 6 millones de dólares en gastos generales anuales en 2025, y las iniciativas estratégicas a través de múltiples filiales. La empresa mantiene 3.1 millones de dólares en efectivo y equivalentes de efectivo a partir del 12 de noviembre de 2024. Entre los desarrollos notables se encuentran las asociaciones para la prueba de cáncer esofágico BE-Smart, el lanzamiento de DNA Complete y DNA Expand, y los resultados del estudio clínico Equivir que se aproximan.
ProPhase Labs (NASDAQ: PRPH)는 2024년 3분기 재무 결과를 발표하며, 2023년 3분기의 840만 달러와 비교해 310만 달러의 순 수익을 기록했습니다. 회사는 660만 달러의 순손실을 보고했으며, 주당 $(0.35)의 손실을 기록했습니다. 주요 하이라이트로는 Pharmaloz Manufacturing이 향후 12개월 동안 1500만 달러 이상의 수익과 500만 달러 이상의 세전 수익을 예상하고 있으며, 2025년까지 연간 600만 달러의 간접비용 절감 가능성과 여러 자회사를 통한 전략적 이니셔티브가 포함됩니다. 회사는 2024년 11월 12일 기준으로 310만 달러의 현금 및 현금성 자산을 보유하고 있습니다. 주목할 만한 개발 사항으로는 BE-Smart 식도암 검사 파트너십, DNA Complete 및 DNA Expand 출시, 다가오는 Equivir 임상 연구 결과가 있습니다.
ProPhase Labs (NASDAQ: PRPH) a annoncé ses résultats financiers pour le troisième trimestre 2024, affichant un chiffre d'affaires net de 3,1 millions de dollars par rapport à 8,4 millions de dollars au troisième trimestre 2023. L'entreprise a enregistré une perte nette de 6,6 millions de dollars, soit $(0,35) par action. Les points forts comprennent Pharmaloz Manufacturing qui prévoit plus de 15 millions de dollars de revenus et plus de 5 millions de dollars de bénéfices avant impôts au cours des 12 prochains mois, une élimination potentielle de 6 millions de dollars de frais généraux annuels en 2025, ainsi que des initiatives stratégiques à travers plusieurs filiales. L'entreprise conserve 3,1 millions de dollars en liquidités et équivalents de liquidités au 12 novembre 2024. Parmi les développements notables, on trouve des partenariats pour le test du cancer de l'œsophage BE-Smart, le lancement de DNA Complete et DNA Expand, et les résultats de l'étude clinique Equivir à venir.
ProPhase Labs (NASDAQ: PRPH) hat die finanziellen Ergebnisse für das dritte Quartal 2024 bekannt gegeben und einen Nettoumsatz von 3,1 Millionen US-Dollar im Vergleich zu 8,4 Millionen US-Dollar im dritten Quartal 2023 gezeigt. Das Unternehmen berichtete von einem Nettoverlust von 6,6 Millionen US-Dollar oder $(0,35) pro Aktie. Zu den wichtigsten Highlights gehören Pharmaloz Manufacturing, das über 15 Millionen US-Dollar Umsatz und über 5 Millionen US-Dollar EBIT für die nächsten 12 Monate prognostiziert, die potenzielle Eliminierung von 6 Millionen US-Dollar jährlicher Gemeinkosten im Jahr 2025 sowie strategische Initiativen über mehrere Tochtergesellschaften hinweg. Das Unternehmen hält am 12. November 2024 3,1 Millionen US-Dollar in Bar und Barmitteln. Zu den bemerkenswerten Entwicklungen gehören Partnerschaften für den BE-Smart Speiseröhrenkrebs-Test, der Launch von DNA Complete und DNA Expand sowie bevorstehende Ergebnisse der klinischen Studie Equivir.
- Pharmaloz Manufacturing projects $15+ million in revenues and $5+ million pre-tax earnings over next 12 months
- Potential $20-25 million additional revenue from planned second lozenge manufacturing line
- Planned elimination of $6 million in annual overhead expenses in 2025
- Signed two top-tier lozenge brands expected to add $5 million in annualized revenues
- Net revenue decreased to $3.1 million from $8.4 million in Q3 2023
- Net loss increased to $6.6 million from $5.1 million in Q3 2023
- Gross margin declined to -5.2% from 27.8% in Q3 2023
- Cash and cash equivalents decreased to $1.1 million from $2.1 million at end of 2023
- Working capital decreased to $13.5 million from $26.7 million at end of 2023
Insights
The Q3 2024 results reveal concerning financial metrics with
- Pharmaloz Manufacturing projects
$15+ million in revenues and$5+ million pre-tax earnings over next 12 months, with additional$20-25 million potential from a second manufacturing line - Planned
$6 million reduction in annual overhead costs - Cash position is tight at
$1.1 million , but working capital remains positive at$13.5 million - Multiple revenue streams launching including DNA Complete, DNA Expand and Equivir
The company's transformation from COVID testing to diversified biotech appears challenging but shows promise through manufacturing growth and new product launches.
The strategic pivot toward high-potential biotech initiatives presents interesting opportunities:
- The BE-Smart Esophageal Cancer Test partnership discussions with major diagnostic companies could be transformative
- Equivir's clinical trial completion and anticipated year-end launch leverages the company's previous success with Cold-EEZE
- DNA Complete and DNA Expand's subscription model introduces recurring revenue potential with higher margins
While current financials show strain, the diversification into multiple biotech verticals with near-term catalysts could create significant value. The collaboration with Mayo Clinic for additional BE-Smart data analysis adds credibility to their diagnostic development efforts.
Highlights Q4 2024 and Q1 2025 with multiple potential liquidity events, growth in multiple subsidiaries as well as potentially significant reduction in overhead and expenses
Company to hold a virtual conference call Wednesday, November 13, 2024, at 11:00 AM ET
GARDEN CITY, NY, Nov. 13, 2024 (GLOBE NEWSWIRE) -- ProPhase Labs, Inc. (NASDAQ: PRPH) (“ProPhase” or the “Company”), a next-generation biotech, genomics, and diagnostics company, today reported its financial and operational results for the three months ended September 30, 2024. The Company also highlighted substantial progress in its ongoing strategic initiatives, which are expected to drive significant revenue growth and potentially significant liquidity events in the upcoming quarters.
Key Highlights:
Pharmaloz Manufacturing projects
Developing a potential strategy before year-end to eliminate approximately
Company Initiates BE-Smart Esophageal Cancer Test Strategic Partnership Discussions
DNA Complete and DNA Expand successfully launch; Anticipates Strong Holiday Gift Giving Season
Equivir major clinical study results due shortly with anticipated launch around year-end.
Pharmaloz Manufacturing:
- Hired ThinkEquity investment bank to explore strategic alternatives including a potential sale of Pharmaloz Manufacturing.
- The Company estimates
$15 million + in revenues over the next 12 months starting in Q4 2024. This does not include any contribution from the planned second lozenge manufacturing line. - In late-stage discussions with a major lozenge brand to enter a long-term contract to take over the entire capacity of the planned second lozenge manufacturing line. The Company estimates that this long term contract would add an additional
$20 -$25 million of revenues in its first full year of production and have the potential to grow further over time. - Signed two top-tier lozenge brands, which we expect to add approximately
$5million in annualized revenues with strong profit margins. - Also, in discussions to add several additional lozenge brands.
- Starting in January 2025, a large new customer is expected to start production of a non-seasonal lozenge, improving off-season business.
- Lozenge manufacturing line #2 is built and is ready to be delivered.
- Lozenge line #3 planned for H2 2025, which would increase capacity significantly.
- The new lines are highly automated, include key dry feed systems, require less labor and are therefore expected to deliver both increased revenues and improved margins.
BE-Smart Esophageal Cancer Test:
- The Company has initiated strategic partnership discussions with two multi-billion-dollar cancer diagnostic testing companies in collaboration with Forward Healthcare Consultants (FHC).
- Also working with FHC to secure market access, insurance reimbursement and engage physician networks.
- Received additional samples from Mayo Clinic for expanded data analysis.
- Pursuing validation through additional studies and peer-reviewed publications.
DNA Complete and DNA Expand:
- Launched with a comprehensive marketing campaign led by industry experts.
- Offers advanced genetic analysis, competitive pricing, and faster turnaround times.
- Introduced subscription services, enhancing customer engagement and creating opportunities to generate high-margin revenue.
- Prioritizes data security with world-class cybersecurity measures.
Equivir Clinical Trial:
- Trial completed; final statistical analysis expected by end of November.
- Preliminary review of final data is encouraging, supporting key claims for future sales.
- Preparing a peer-reviewed paper detailing trial results, expected by end of Q4.
- Positioned as a pioneering, sugar-free supplement with clinical evidence supporting efficacy as both a therapeutic (shortening both duration and severity of symptoms) and as a prophylactic enhancing immunity against upper respiratory infections.
- Anticipating strong retail interest, leveraging the extensive marketing platforms of DNA Complete.
Financial Outlook:
ProPhase anticipates significant sequential improvement in revenues and EBITDA in Q4 2024, and beyond, driven by strategic advancements across its subsidiaries. The company remains financially strong, with
CEO Commentary:
Ted Karkus, ProPhase Labs' Chief Executive Officer, commented:
"Q3 2024 showcased the significant potential of our subsidiaries. Pharmaloz has a tremendous short-term and long-term outlook for growth and potential sale. BE-Smart has the potential to one day achieve a
Our strategic moves position us well for substantial growth in Q4 2024 and beyond. Given the new growth and profitability at Pharmaloz, the recent launch of DNA Complete and DNA Expand, and the soon to launch Equivir, when combined with potential and significant reductions in overhead and expenses before year-end, our outlook for 2025 is exciting to say the least. As always, we remain focused on maximizing shareholder value through disciplined execution and strategic expansion."
Third Quarter 2024 Financial Results
Three Months Ended September 30, 2024 as Compared to the Three Months Ended September 30, 2023
For the three months ended September 30, 2024, net revenue was
Cost of revenues for the three months ended September 30, 2024 were
We realized a gross margin loss of
Diagnostic services costs for the three months ended September 30, 2024 were zero compared to
General and administration expenses for the three months ended September 30, 2024 were
Research and development costs for the three months ended September 30, 2024 were
As a result of the effects described above, net loss for the three months ended September 30, 2024 was
Our aggregate cash and cash equivalents as of September 30, 2024 were
Conference Call Details:
To participate in the virtual conference call on November 13, 2024, at 11:00 AM ET, please register at:
About ProPhase Labs
ProPhase Labs, Inc. (Nasdaq: PRPH) is a next-generation biotech, genomics and diagnostics company. Our goal is to create a healthier world with bold action and the power of insight. We believe we are revolutionizing healthcare with industry-leading Whole Genome Sequencing solutions, while developing potential game changer diagnostics and therapeutics in the fight against cancer. This includes a potentially life-saving cancer test focused on early detection of esophageal cancer and potential breakthrough cancer therapeutics with novel mechanisms of action. Our world-class CLIA labs and cutting-edge diagnostic technology provide wellness solutions for healthcare providers and consumers. We develop, manufacture, and commercialize health and wellness solutions to enable people to live their best lives. We are committed to executional excellence, smart diversification, and a synergistic, omni-channel approach. ProPhase Labs' subsidiaries and their strategic synergies highlight our potential for long-term value.
For more information, visit www.ProPhaseLabs.com
Forward Looking Statements
This press release contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “plan” or the negative of these terms and similar expressions intended to identify forward-looking statements. These statements include statements related to our strategy, plans, objectives and initiatives, including our expectations regarding the future revenue growth potential of each of our subsidiaries, the projected value of a sale of PMI, our expectations relating to PMI’s existing and new contracts, production, revenue, and earnings, the anticipated timing for the installation of additional lozenge lines and their ability to increase capacity and revenue, our expectation of potential and significant reductions in overhead and expenses before year-end, our expectations regarding outcomes of strategic discussions with healthcare consultants, advisors, and partners for BE-Smart, the success of the commercialization plan for BE-Smart, our expectations of revenue and earnings from a partnership for BE-Smart, our ability to enter into new domestic and international long-term contracts for our DNA Complete business and the financial impact of any such contracts, our anticipated expenses, ability to obtain funding for our operations and the sufficiency of our cash resources, and the expected timeline for completion of final statistical analysis of our Equivir clinical trial. The Company cautions readers that forward-looking statements are based on management’s expectations and assumptions as of the date of this release and are subject to certain risks and uncertainties that could cause actual results to differ materially, including, but not limited to, risks related to prevailing market conditions, the impact of general economic, industry or political conditions in the United States, and the Company’s ability to satisfy customary closing conditions associated with the offering. Management believes that these forward-looking statements are reasonable as and when made. The Company undertakes no obligation to update forward-looking statements except as required by applicable securities laws.
Media Relations and Institutional Investor Contact:
ProPhase Labs, Inc.
267-880-1111
investorrelations@prophaselabs.com
Retail Investor Relations Contact:
Renmark Financial Communications
John Boidman
212-812-7680
Jboidman@renmarkfinancial.com
ProPhase Labs, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
| September 30, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 501 | $ | 1,609 | ||||
| Restricted cash | 593 | 540 | ||||||
| Marketable securities, available for sale | 2 | 3,127 | ||||||
| Accounts receivable, net | 31,638 | 36,313 | ||||||
| Inventory, net | 3,966 | 3,841 | ||||||
| Prepaid expenses and other current assets | 5,535 | 2,155 | ||||||
| Total current assets | 42,235 | 47,585 | ||||||
| Property, plant and equipment, net | 13,851 | 12,898 | ||||||
| Prepaid expenses, net of current portion | 431 | 832 | ||||||
| Operating lease right-of-use asset, net | 4,234 | 4,572 | ||||||
| Intangible assets, net | 10,396 | 12,333 | ||||||
| Goodwill | 5,231 | 5,231 | ||||||
| Deferred tax asset | 14,576 | 7,313 | ||||||
| Other assets | 854 | 1,163 | ||||||
| TOTAL ASSETS | $ | 91,808 | $ | 91,927 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 15,459 | $ | 9,383 | ||||
| Accrued diagnostic services | 38 | 314 | ||||||
| Accrued advertising and other allowances | 122 | 24 | ||||||
| Finance lease liabilities | 3,897 | 1,840 | ||||||
| Operating lease liabilities | 971 | 953 | ||||||
| Short-term loan payable, net of discount of | 2,670 | — | ||||||
| Deferred revenue | 1,647 | 2,382 | ||||||
| Income tax payable | 2,274 | 3,278 | ||||||
| Other current liabilities | 1,620 | 2,683 | ||||||
| Total current liabilities | 28,698 | 20,857 | ||||||
| Non-current liabilities: | ||||||||
| Secured long-term debt, net of discount of | 2,925 | 2,924 | ||||||
| Unsecured promissory notes, net of discount of | 9,858 | 7,334 | ||||||
| Due to sellers (see Note 3) | 2,000 | 2,000 | ||||||
| Deferred revenue, net of current portion | 928 | 1,100 | ||||||
| Operating lease liabilities, net of current portion | 3,663 | 4,237 | ||||||
| Finance lease liabilities, net of current portion | 3,885 | 4,092 | ||||||
| Total non-current liabilities | 24,984 | 21,687 | ||||||
| Total liabilities | 53,682 | 42,544 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock authorized 1,000,000, | — | — | ||||||
| Common stock authorized 50,000,000, | 18 | 18 | ||||||
| Additional paid-in capital | 126,339 | 118,694 | ||||||
| Accumulated deficit | (24,034 | ) | (5,029 | ) | ||||
| Treasury stock, at cost, 18,940,967 and 18,940,967 shares, respectively | (64,000 | ) | (64,000 | ) | ||||
| Accumulated other comprehensive loss | (197 | ) | (300 | ) | ||||
| Total stockholders’ equity | 38,126 | 49,383 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 91,808 | $ | 91,927 | ||||
ProPhase Labs, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Other Comprehensive Loss
(in thousands, except per share amounts)
(unaudited)
| For the three months ended | For the nine months ended | |||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||
| Revenues, net | $ | 3,146 | $ | 8,365 | $ | 9,254 | $ | 40,885 | ||||||||
| Cost of revenues | 3,311 | 6,038 | 10,328 | 21,590 | ||||||||||||
| Gross (loss) profit | (165 | ) | 2,327 | (1,074 | ) | 19,295 | ||||||||||
| Operating expenses: | ||||||||||||||||
| Diagnostic expenses | — | 132 | — | 1,932 | ||||||||||||
| General and administration | 7,650 | 8,245 | 22,455 | 26,480 | ||||||||||||
| Research and development | 122 | 428 | 533 | 1,144 | ||||||||||||
| Total operating expenses | 7,772 | 8,805 | 22,988 | 29,556 | ||||||||||||
| Loss from operations | (7,937 | ) | (6,478 | ) | (24,062 | ) | (10,261 | ) | ||||||||
| Interest income, net | — | 1 | — | 39 | ||||||||||||
| Interest expense | (1,158 | ) | (275 | ) | (2,316 | ) | (781 | ) | ||||||||
| Other (expense) income | — | (33 | ) | 12 | (132 | ) | ||||||||||
| Loss from operations before income taxes | (9,095 | ) | (6,785 | ) | (26,366 | ) | (11,135 | ) | ||||||||
| Income tax benefit | 2,508 | 1,644 | 7,361 | 3,104 | ||||||||||||
| Loss from operations after income taxes | (6,587 | ) | (5,141 | ) | (19,005 | ) | (8,031 | ) | ||||||||
| Net loss | $ | (6,587 | ) | $ | (5,141 | ) | $ | (19,005 | ) | $ | (8,031 | ) | ||||
| Other comprehensive income (loss): | ||||||||||||||||
| Unrealized gain (loss) on marketable securities | 1 | (2,032 | ) | 103 | (2,201 | ) | ||||||||||
| Total comprehensive loss | $ | (6,586 | ) | $ | (7,173 | ) | $ | (18,902 | ) | $ | (10,232 | ) | ||||
| Loss per share: | ||||||||||||||||
| Basic | $ | (0.35 | ) | $ | (0.30 | ) | $ | (1.02 | ) | $ | (0.47 | ) | ||||
| Diluted | $ | (0.35 | ) | $ | (0.30 | ) | $ | (1.02 | ) | $ | (0.47 | ) | ||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 19,079 | 17,175 | 18,672 | 16,924 | ||||||||||||
| Diluted | 19,079 | 17,175 | 18,672 | 16,924 | ||||||||||||
ProPhase Labs, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| For the nine months ended | ||||||||
| September 30, 2024 | September 30, 2023 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (19,005 | ) | $ | (8,031 | ) | ||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
| Realized loss on marketable debt securities | 18 | (3 | ) | |||||
| Depreciation and amortization | 5,693 | 4,435 | ||||||
| Amortization of debt discount | 1,000 | 97 | ||||||
| Amortization on operating lease right-of-use assets | 338 | 325 | ||||||
| Stock-based compensation expense | 3,021 | 2,860 | ||||||
| Accounts receivable allowances | — | 718 | ||||||
| Credit loss expense, direct write-off | — | 74 | ||||||
| Inventory reserve | 21 | — | ||||||
| Gain from disposal of fixed assets | (91 | ) | — | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 4,675 | (2,380 | ) | |||||
| Inventory | (146 | ) | (1,078 | ) | ||||
| Prepaid expenses and other current assets | (4,218 | ) | (938 | ) | ||||
| Deferred tax asset | (7,427 | ) | (4,350 | ) | ||||
| Other assets | 853 | — | ||||||
| Accounts payable and accrued expenses | 6,069 | (438 | ) | |||||
| Accrued diagnostic services | (276 | ) | (768 | ) | ||||
| Accrued advertising and other allowances | 98 | 14 | ||||||
| Deferred revenue | (907 | ) | (315 | ) | ||||
| Deferred tax liability | — | (307 | ) | |||||
| Operating lease liabilities | (1,710 | ) | (139 | ) | ||||
| Income tax payable | (1,004 | ) | (881 | ) | ||||
| Other liabilities | (969 | ) | (30 | ) | ||||
| Net cash used in operating activities | (13,967 | ) | (11,135 | ) | ||||
| Cash flows from investing activities | ||||||||
| Business acquisitions, escrow received | — | 478 | ||||||
| Asset acquisitions, net of cash acquired | — | (2,904 | ) | |||||
| Purchase of marketable securities | — | (3,819 | ) | |||||
| Proceeds from maturities of marketable securities | — | 4,168 | ||||||
| Proceeds from sales of marketable securities | 3,374 | 3,817 | ||||||
| Proceeds from sales of fixed assets | 229 | — | ||||||
| Capital expenditures | (1,141 | ) | (1,845 | ) | ||||
| Net cash provided by (used in) investing activities | 2,462 | (105 | ) | |||||
| Cash flows from financing activities | ||||||||
| Proceeds from issuance of note payable, net | 8,334 | 7,600 | ||||||
| Proceeds from issuance of common shares, net | 4,624 | — | ||||||
| Repurchases of common shares | — | (588 | ) | |||||
| Repurchase of common stock for payment of statutory taxes due on cashless exercise of stock option | — | (5,379 | ) | |||||
| Repayment of note payable | (2,508 | ) | — | |||||
| Net cash provided by financing activities | 10,450 | 2,833 | ||||||
| Decrease in cash, cash equivalents and restricted cash | (1,055 | ) | (8,407 | ) | ||||
| Cash, cash equivalents and restricted cash at the beginning of the period | 2,149 | 9,109 | ||||||
| Cash, cash equivalents and restricted cash at the end of the period | $ | 1,094 | $ | 702 | ||||
| Supplemental disclosures: | ||||||||
| Cash paid for income taxes | $ | 860 | $ | 3,000 | ||||
| Interest payment on the promissory notes | $ | 2,126 | $ | 740 | ||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Stock-based compensation included in the prepaid expense | $ | — | $ | 1,138 | ||||
| Net unrealized loss, investments in marketable debt securities | $ | 267 | $ | 2,083 | ||||
| Assets obtained in exchange for new finance lease obligations | $ | 3,699 | $ | 6,201 | ||||
| Reclassification between prepaid expenses and other assets | $ | 544 | $ | — | ||||
| Accrued offering cost | $ | 22 | $ | — | ||||
| Issuance of warrants with unsecured promissory note | $ | — | $ | 398 | ||||
| Common stock issued in asset acquisition | $ | — | $ | 1,000 | ||||
Non-GAAP Financial Measures and Reconciliation
In an effort to provide investors with additional information regarding our results of operations as determined by accounting principles generally accepted in the United States of America (“GAAP”), we disclose certain non-GAAP financial measures. The primary non-GAAP financial measures we disclose are EBITDA and Adjusted EBITDA.
We define "EBITDA" as net income (loss) before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding acquisition costs, other non-cash items, and other unusual or non-recurring charges (as described in the table below).
Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same names and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. We compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year. We may consider whether other significant items that arise in the future should be excluded from the non-GAAP financial measures.
We use EBITDA and Adjusted EBITDA internally to evaluate and manage the Company’s operations because we believe they provide useful supplemental information regarding the Company’s ongoing economic performance. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our operating results primarily because they exclude amounts that are not considered part of ongoing operating results when planning and forecasting and when assessing the performance of the organization. In addition, we believe that non-GAAP financial information is used by analysts and others in the investment community to analyze our historical results and in providing estimates of future performance and that failure to report these non-GAAP measures could result in confusion among analysts and others and create a misplaced perception that our results have underperformed or exceeded expectations.
The following table sets forth the reconciliations of EBITDA and Adjusted EBITDA excluding other costs to the most comparable GAAP financial measures (in thousands):
| For the three months ended | For the nine months ended | ||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||
| GAAP net income (1) | $ | (6,587 | ) | $ | (5,141 | ) | $ | (19,005 | ) | $ | (5,141) | ||||
| Interest, net | 1,158 | 274 | 2,316 | 274 | |||||||||||
| Income tax benefit | (2,508 | ) | (1,644 | ) | (7,361 | ) | (1,644) | ||||||||
| Depreciation and amortization | 2,390 | 3,143 | 5,693 | 3,143 | |||||||||||
| EBITDA | (5,547 | ) | (3,368 | ) | (18,357 | ) | (3,368) | ||||||||
| Share-based compensation expense | 636 | 744 | 3,021 | 744 | |||||||||||
| Non-cash rent expense (2) | 471 | 99 | 236 | 99 | |||||||||||
| Credit loss expense | — | — | — | — | |||||||||||
| Adjusted EBITDA | $ | (4,440 | ) | $ | (2,525 | ) | $ | (15,100 | ) | $ | (2,525) | ||||
(1) We believe that net income (loss) is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to EBITDA and Adjusted EBITDA. EBITDA and Adjusted EBITDA measure the Company’s operating performance without regard to certain expenses. EBITDA and Adjusted EBITDA are not presentations made in accordance with GAAP and the Company’s computation of EBITDA and Adjusted EBITDA may vary from others in the industry. EBITDA and Adjusted EBITDA have important limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of the Company’s results as reported under GAAP.
(2) The non-cash portion of rent, which reflects the extent to which our GAAP rent expense recognized exceeds (or is less than) our cash rent payments. For newer leases, our rent expense recognized typically exceeds our cash rent payments, while for more mature leases, rent expense recognized is typically less than our cash rent payments.
FAQ
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