Precipio Announces Third Quarter 2017 Financial Results and Provides Corporate Update

NEW HAVEN, Conn., Nov. 20, 2017 (GLOBE NEWSWIRE) — Precipio, Inc. (NASDAQ:PRPO), today announced financial results for the third quarter ended September 30, 2017 and provided an update on corporate developments.

Third Quarter 2017 Business Highlights and Recent Developments

July 2017

  • Precipio announced commencement of a multi-party study to demonstrate the impact of academic pathology expertise on diagnostic accuracy.
  • Precipio rang the Nasdaq Stock Market Opening Bell.
  • Precipio announced agreement with Clearbridge Health for liquid biopsy and diagnostic services in Asia.

August 2017

  • Precipio, Inc. announced closing of $6,000,000 public offering.

September 2017

  • Precipio elected Jeffrey Cossman, MD, and Douglas Fisher, MD to its Board of Directors.

October 2017

  • Precipio re-launched all CLIA Lab and Pharmacological Research Projects at its New Haven, CT facility.
  • Precipio launched its first re-designed ICE-COLD PCRTM Targeted Enrichment Kit to Identify mutations in lung cancer using liquid (blood) biopsies.
  • Precipio’s ICE-COLD PCRTM technology selected by the University of Kentucky for Liquid Biopsy Study.
  • Precipio delivered first ICE-COLD PCRTM order to new Brazilian distributor.
  • Precipio received first ICE-COLD PCRTM Kit order from Clearbridge Health.

November 2017:

  • Precipio’s ICE-COLD PCR(TM) technology selected by Methodist Healthcare System as their Liquid Biopsy Platform.
  • Precipio announced completion of substantial balance sheet restructuring.
  • Precipio announced the closing of a $2,748,000 Registered Direct Offering.
  • Precipio appointed Samuel D. Riccitelli as Chairman of the Board of Directors and elected David Cohen as Director.

“At the start of Q3-2017, our company faced significant financial, operational, product development, and sales challenges. I am delighted to report that we have overcome these challenges and have delivered on our stated objectives,” said Ilan Danieli, President and CEO. “We now have the appropriate resources, products and services mix, financial foundation and infrastructure to build upon last quarter’s successes and drive growth. We have succeeded in recapitalizing the company, restructuring our debt to manage cash flow and relocating lab operations, which has provided the Company runway to accelerate R&D development, transfer those developments into production tests and to build our sales force for market expansion. While much work remains, I have never been more excited about the future of Precipio,” Mr. Danieli concluded.

Third Quarter Ended September 30, 2017 Financial Results

Net sales decreased by $0.1 million, or 26%, during the three months ended September 30, 2017 as compared to the same period in 2016. The decrease is entirely due to the decrease in cases processed during the three months ended September 30, 2017 as compared to the same period in 2016.  We processed 207 cases during the three months ended September 30, 2017 as compared to 269 cases during the same period in 2016, or a 23% decrease in cases. The decrease in volume is the result of turnover of key sales personnel.

Cost of Diagnostic Services increased by $0.1 million, or 46%, for the three months ended September 30, 2017 as compared to the same period in 2016. The increase is due to increased professional fees involved with the processing of patient tests in the three months ended September 30, 2017.

Gross Margin was a negative (29%) of total net sales, during the third quarter of 2017, compared to 35% of total net sales during the same quarter in 2016. The gross profit decreased by $0.2 million during the three months ended September 30, 2017 as compared to the same period in 2016 due to decreased revenues and associated fixed costs to operate our laboratories.

Operating expenses increased by $3.1 million to $3.6 million during the three months ended September 30, 2017 as compared to the same period in 2016. The increase in operating expenses reflects the increase in professional fees attributed to legal expenses related to the Merger and increased compensation and other costs associated with restructuring the organization resulting from the Merger. Additional increases in our general and administrative expenses resulted from increased amortization related to acquired intangibles from the Merger and expenses related to operating as a public company. The increase during the three months ended September 30, 2017 also included a $1.0 million impairment of goodwill charge resulting from interim impairment testing of goodwill during the current quarter. The interim impairment testing was triggered by the significant reduction in our market capitalization during the three months ended September 30, 2017

Other expense for the three months ended September 30, 2017 and 2016 includes interest expense of approximately $1.9 million and $0.2 million, respectively. The increase in interest expense is due to $1.8 million of debt discounts and debt issuance costs that were amortized to interest expense during the third quarter of 2017 as a result of the payment and conversion of all of our convertible bridge notes during the quarter.

Net loss for the quarter ended September 30, 2017 was ($6.3m) compared to ($0.5m) in the same period in 2016. Merger and recapitalization expenses represent approximately $5.0m of the $5.8m increase in net loss, and are mostly one-time, non-recurring expenses.

Conference Call to be Held Tuesday, November 21, 2017 at 9:00am

Management will host a conference call on Tuesday, November 21, 2017 at 9:00am to review financial results and provide a corporate update. Following management’s formal remarks, there will be a question and answer session.

To listen to the call by phone, interested parties within the U.S. should call 1-877-317-6789 and International callers should call 1-412-317-6789. All callers should ask for the Precipio Inc., conference call.

A replay of the call will be available approximately 24 hours after the call and may be accessed via Precipio’s website.

About Precipio
Precipio has built a platform designed to eradicate the problem of misdiagnosis by harnessing the intellect, expertise and technology developed within academic institutions and delivering quality diagnostic information to physicians and their patients worldwide. Through its collaborations with world-class academic institutions specializing in cancer research, diagnostics and treatment, initially the Yale School of Medicine, Precipio offers a new standard of diagnostic accuracy enabling the highest level of patient care. For more information, please visit www.precipiodx.com.

Forward-Looking Statements
Certain statements in this press release constitute “forward-looking statements,” within the meaning of federal securities laws, including statements related to plans and prospects for Precipio and other statements containing the words “anticipate,” “intend,” “may,” “plan,” “predict,” “will,” “would,” “could,” “should,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. Factors that could cause future results to materially differ from the recent results or those projected in forward-looking statements include the known risks, uncertainties and other factors described in the Company’s definitive proxy statement filed on May 12, 2017, the Company’s Quarterly Report on Form 10-Q filed on August 22, 2017, the Company’s prior filings and from time to time in the Company’s subsequent filings with the Securities and Exchange Commission. Any change in such factors, risks and uncertainties may cause the actual results, events and performance to differ materially from those referred to in such statements. All information in this press release is as of the date of the release and the Company does not undertake any duty to update this information, including any forward-looking statements, unless required by law.

Contacts:

Precipio Investor Relations:
John Marco
Managing Director
Core IR
377 Oak Street
Garden City, NY 11530
516 222 2560
johnm@coreir.com
www.coreir.com 

PRECIPIO, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)

       
  September 30,
2017 
(unaudited)
 
December 31,
2016
ASSETS      
CURRENT ASSETS:      
Cash and cash equivalents $ 381     $ 51  
Accounts receivable, net 505     388  
Inventories 99     100  
Other current assets 127     13  
Total current assets 1,112     552  
       
PROPERTY AND EQUIPMENT, NET 255     280  
       
OTHER ASSETS:      
Goodwill 12,817      
Intangibles, net 20,779      
Other assets 14     10  
  $ 34,977     $ 842  
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)      
CURRENT LIABILITIES:      
Current maturities of long-term debt $ 42     $ 395  
Convertible bridge notes, less debt discounts and debt issuance costs     695  
Accounts payable 10,034     1,084  
Current maturities of capital leases 49     46  
Accrued expenses 1,872     700  
Deferred revenue 210     92  
Other current liabilities 1,528      
Total current liabilities 13,735     3,012  
LONG TERM LIABILITIES:      
Long-term debt, less current maturities and discounts     4,127  
Common stock warrant liability 618      
Capital leases, less current maturities 126     163  
Other long-term liabilities 92      
Total liabilities 14,571     7,302  
STOCKHOLDERS’ EQUITY (DEFICIT):      
Preferred stock – $0.01 par value, 15,000,000 and 1,294,434 shares authorized at September 30, 2017 and December 31, 2016, respectively, 3,641 and 780,105 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively     8  
Common stock, $0.01 par value, 150,000,000 and 1,806,850 shares authorized at September 30, 2017 and December 31, 2016, respectively, 9,446,878 and 449,175 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively 94     4  
Additional paid-in capital 41,879     4,376  
Accumulated deficit (21,567 )   (10,848 )
Total stockholders’ equity (deficit) 20,406     (6,460 )
  $ 34,977     $ 842  
               

PRECIPIO, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)

       
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2017   2016   2017   2016
SALES              
Patient service revenue, net $ 327     $ 445     $ 946     $ 1,716  
Less provision for bad debts (57 )   (80 )   (168 )   (309 )
Net sales 270     365     778     1,407  
COST OF DIAGNOSTIC SERVICES 347     231     813     710  
Gross profit (loss) (77 )   134     (35 )   697  
OPERATING EXPENSES:              
Operating expenses 2,541     497     3,981     1,573  
Impairment of goodwill 1,015         1,015      
TOTAL OPERATING EXPENSES 3,556     497     4,996     1,573  
OPERATING LOSS (3,633 )   (363 )   (5,031 )   (876 )
OTHER INCOME (EXPENSE):              
Interest expense, net (1,883 )   (136 )   (2,265 )   (378 )
Warrant revaluation         (3 )    
Loss on extinguishment of debt and induced conversion of convertible bridge notes (1,338 )       (1,391 )    
Gain on settlement of liability 647         647      
Merger advisory fees (73 )       (2,676 )    
Other, net             3  
  (2,647 )   (136 )   (5,688 )   (375 )
LOSS BEFORE INCOME TAXES (6,280 )   (499 )   (10,719 )   (1,251 )
INCOME TAX EXPENSE              
NET LOSS (6,280 )   (499 )   (10,719 )   (1,251 )
               
DEEMED DIVIDENDS ON ISSUANCE OR EXCHANGE OF PREFERRED UNITS (3,764 )       (9,012 )   (1,422 )
PREFERRED DIVIDENDS (84 )       (84 )   (433 )
TOTAL DIVIDENDS (3,848 )       (9,096 )   (1,855 )
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (10,128 )   $ (499 )   $ (19,815 )   $ (3,106 )
               
BASIC AND DILUTED LOSS PER COMMON SHARE $ (1.36 )   $ (1.15 )   $ (6.96 )   $ (7.23 )
BASIC AND DILUTED WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING 7,430,741     435,060     2,846,221     429,851  
                       

PRECIPIO, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)

  Nine Months Ended
 September 30,
  2017   2016
CASH FLOWS USED IN OPERATING ACTIVITIES:      
Net loss $ (10,719 )   $ (1,251 )
       
Adjustments to reconcile net loss to net cash flows used in operating activities:      
Depreciation and amortization 395     99  
Amortization of deferred financing costs and debt discount 1,898     31  
Loss on extinguishment of debt and induced conversion of convertible bridge notes 1,391      
Gain on settlement of liability (647 )    
Stock-based compensation and change in liability of stock appreciation rights 33     9  
Merger advisory fees 2,676      
Impairment of goodwill 1,015      
Provision for losses on doubtful accounts 168     309  
Capitalized PIK interest on convertible bridge notes     85  
Warrant revaluation 3      
Changes in operating assets and liabilities:      
Accounts receivable (129 )   (314 )
Inventories 15     (12 )
Other assets 30     (27 )
Accounts payable 484     58  
Accrued expenses and other liabilities (1,094 )   371  
Net cash used in operating activities (4,481 )   (642 )
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:      
Cash acquired in business combination 101      
Net cash provided by investing activities 101      
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:      
Principal payments on capital lease obligations (34 )   (29 )
Issuance of preferred stock 5,380      
Payment of deferred financing costs (25 )   (10 )
Proceeds from exercise of warrants 25      
Proceeds from long-term debt 315     175  
Proceeds from convertible bridge notes 1,365     455  
Principal payments on convertible bridge notes (1,500 )    
Principal payments on long-term debt (816 )   (116 )
Net cash flows provided by financing activities 4,710     475  
NET CHANGE IN CASH AND CASH EQUIVALENTS 330     (167 )
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 51     235  
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 381     $ 68  
SUPPLEMENTAL CASH FLOW INFORMATION      
Cash paid during the period for interest $ 65     $ 48  
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION      
Purchases of equipment financed through capital lease     49  
Preferred unit dividend financed through exchange agreement     433  
Convertible bridge notes exchanged for long-term debt     680  
Series A and B preferred exchanged for long-term debt     1,715  
Conversion of bridges loans plus interest into common stock 1,787      
Conversion of senior and junior notes plus interest into preferred stock and common stock 4,771      
Deferred debt issuance cost 64      
Beneficial conversion feature on issuance of bridge notes 1,856      
Accrued merger cost 10      
Issuance of warrants in conjunction with issuance of side agreement 487      
Purchases of equipment financed through accounts payable 20      
           

Raven Industries Reports Strong Third Quarter Fiscal 2018 Results

SIOUX FALLS, S.D., Nov. 20, 2017 (GLOBE NEWSWIRE) — Raven Industries, Inc. (NASDAQ:RAVN) today reported financial results for the third quarter that ended October 31, 2017.

Noteworthy Items:

  • Consolidated net sales and earnings per share increased approximately 40 percent and 106 percent year-over-year, respectively;
  • Closed on the acquisition of Colorado Lining International, Inc. (CLI), further strengthening Engineered Film’s presence in the geomembrane market;
  • Engineered Films modified its production schedules to assist in hurricane recovery efforts, generating $8.4 million in recovery film sales during the third quarter;
  • Applied Technology was issued a patent by the U.S. Patent Office for its Hawkeye® Nozzle Control System;
  • Aerostar was awarded a $6.8 million aerostat contract through the Department of Defense;
  • Aerostar’s stratospheric balloons achieved a new duration record of 197 days;
  • Launched Project Atlas, a strategic investment to replace the Company’s existing enterprise resource planning platforms to enhance the Company’s execution of its long-term growth strategy;
  • The Company repurchased approximately 350 thousand shares at an average price of $28.71 for a total of $10.0 million.

Third Quarter Results:    
Net sales for the third quarter of fiscal 2018 were $101.3 million, up 39.7 percent versus the third quarter of fiscal 2017. Engineered Films and Aerostar both achieved significant growth year-over-year in the third quarter, increasing sales 68.9 percent and 23.3 percent, respectively. Applied Technology sales were up slightly versus the prior year. In this year’s third quarter, sales related to the acquisition of CLI were $5.2 million. CLI was acquired on September 1, 2017. As a result, CLI was only part of the Company for two months of the third quarter. In addition, sales of hurricane recovery film during the third quarter of this year were $8.4 million. It has been several years since the Company received a substantial increase in demand for hurricane recovery film. Sales of such film are generally less than $2.0 million on an annual basis.

Operating income for the third quarter of fiscal 2018 was $17.8 million versus operating income of $7.4 million in the third quarter of fiscal 2017, increasing 141.3 percent year-over-year. Operating margin increased 740 basis points year-over-year, from 10.2 percent of net sales to 17.6 percent of net sales. The significant improvement in profitability was principally driven by strong operating leverage on higher sales volume within Engineered Films and improved financial performance of Aerostar.

Net income for the third quarter of fiscal 2018 was $12.0 million, or $0.33 per diluted share, versus net income of $5.7 million, or $0.16 per diluted share, in last year’s third quarter. The increase in earnings per share was driven primarily by the improved operating performance in both Engineered Films and Aerostar. The impact of the CLI acquisition was neutral to earnings per share in this year’s third quarter.

Project Atlas Launched:
During the third quarter, the Company launched a company-wide initiative called Project Atlas. This is a strategic long-term investment to replace the Company’s existing enterprise resource planning platforms. Project Atlas is expected to take approximately three years to complete and cost between $8 and $10 million. This investment will drive efficiencies across the enterprise, enable faster integration of future acquisitions, automate a significant portion of internal controls, and enhance the enterprise’s execution of its long-term growth strategy. All of the costs associated with this project will be reported within corporate expenses. During the third quarter of this year, Project Atlas costs were approximately $300 thousand. Project Atlas costs are expected to be approximately $1 million per quarter in fiscal year 2019.

Balance Sheet and Cash Flow:
At the end of the third quarter of fiscal 2018, cash and cash equivalents totaled $36.9 million, down $18.3 million versus the prior quarter. The decrease was primarily driven by the acquisition of CLI and share repurchase activity, partially offset by strong operating cash flows.

Net working capital as a percentage of annualized net sales1 improved 60 basis points year-over-year, from 25.2 percent in the third quarter of last year to 24.6 percent in this year’s third quarter. The decrease in net working capital percentage1 was the result of higher payables, as well as managing inventory and receivables efficiently with the substantial increase in sales versus the prior year.

During the third quarter of fiscal 2018, the Company repurchased approximately 350 thousand shares at an average price of $28.71 per share for a total of $10.0 million.

Applied Technology Division:
Net sales for Applied Technology in the third quarter of fiscal 2018 were $25.3 million, up slightly versus the third quarter of fiscal 2017. Weaker end market conditions, coupled with challenging year-over-year comparisons for new products, led to the expected slowdown in growth for the division during the third quarter. Although Agriculture market conditions deteriorated in the third quarter of this year for Applied Technology, the Company believes that overall the division is holding market share across product lines.

Division operating income was $5.4 million, down 16.5 percent versus the third quarter of fiscal 2017. The decline in profitability was driven primarily by additional investments to enhance our customer experience as well as higher legal expenses. Combined, these items reduced division operating income by approximately $1.0 million during the third quarter of this year. The incremental investments, concentrated in research and development and selling and marketing, are strategic investments which are expected to generate new sales and market share gains in future quarters.

Engineered Films Division:
Net sales for Engineered Films were $65.1 million, up 68.9 percent year-over-year. Volume, measured in pounds sold, increased 53 percent versus the prior year. All markets contributed to the division’s higher sales versus the prior year. Sales of recovery film to support hurricane relief efforts and the recent acquisition of CLI contributed $8.4 million and $5.2 million, respectively. Excluding CLI and hurricane recovery film, net sales for Engineered Films were $51.5 million, up 33.6 percent year-over-year.

Operating income in the third quarter of fiscal 2018 was $17.1 million, up $10.0 million or 140.1 percent versus the third quarter of fiscal 2017. The year-over-year increase in operating income was principally driven by strong operating leverage on higher sales volume. Division operating margin increased 780 basis points year-over-year, from 18.5 percent to 26.3 percent, driven by improved capacity utilization, ongoing pricing discipline and favorable product mix.

Aerostar Division:
Net sales for Aerostar during the third quarter of fiscal 2018 were $11.1 million, up $2.1 million or 23.3 percent versus the third quarter of fiscal 2017. The year-over-year increase in sales was primarily driven by growth in the stratospheric balloon platform.

Operating income in the third quarter of fiscal 2018 was $1.4 million, versus an operating loss of $1.4 million in the previous year’s third quarter. Last year’s third quarter results include a pre-tax inventory write-down adjustment of $2.3 million related to certain radar inventory. This year’s third quarter results include pre-tax charges of approximately $0.9 million related primarily to a strategic decision to narrow aerostat offerings and thereby further enhance the division’s focus on its stratospheric balloon platform.

Fiscal 2018 Outlook:
“We are very pleased with the performance achieved by all three operating divisions throughout the first nine months of the year,” said Dan Rykhus, President and CEO. “Each division has worked to optimize performance given their specific end market conditions and each has achieved success.

“Applied Technology has faced a more challenging agriculture market than we expected at the beginning of the year, and we don’t foresee anything changing in the next twelve months to improve market conditions. At the same time, we have made the strategic decision to fund several long-term investments for growth, knowing this dampens short-term profits. We believe strongly in the long-term margin potential for ATD and we expect improved margins over time with these investments, even if end-market conditions remain challenging.

“Engineered Films’ integration of CLI is going very well. Similar cultures and strong leadership are greatly benefiting the integration efforts. We expect performance for CLI to be slightly accretive to earnings this fiscal year and contribute approximately 5 cents per share in fiscal 2019. The sale of recovery film to support hurricane relief efforts was unexpected and favorably impacted the division’s operating leverage in the third quarter. We expect sales of such films to be approximately $8 to $9 million in the fourth quarter. 

“Aerostar is achieving both improved financial performance and consistency in results on a sequential basis. During the third quarter, the division continued to improve the performance of its stratospheric balloon technology, achieving a record duration of 197 days aloft. Its partnership with Google on Project Loon remains very strong, and the division continues to advance its technology offering with new customers. Furthermore, during the third quarter, Aerostar was awarded a $6.8 million aerostat contract with the U.S. Department of Defense. We expect the majority of the revenue from this contract to be realized in fiscal year 2019.

“Overall, we are very pleased with our third quarter and year-to-date financial performance, and we are very proud of our team members’ resolve and determination to drive improved results.”

Regulation G:
The information presented in this earnings release regarding earnings before interest, taxes, depreciation, and amortization (EBITDA) do not conform to generally accepted accounting principles (GAAP) and should not be construed as an alternative to the reported results determined in accordance with GAAP. Management has included this non-GAAP information to assist in understanding the operating performance of the Company and its operating segments as well as the comparability of results. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information is reconciled with reported GAAP results in the tables below.

Conference Call Information:
The Company will host an investor conference call to discuss third quarter fiscal 2018 results tomorrow, Tuesday, November 21, 2017, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time). The conference call audio will be available to all interested parties via a simultaneous webcast that can be accessed through the Investor Relations section of the Company’s website at http://investors.ravenind.com. Analysts and investors are invited to join the conference call by dialing: +1 (866) 393-0676. The event is scheduled to last one hour. For those unable to listen live, an audio replay of the event will be archived on the Company’s website.

About Raven Industries, Inc.:
Raven Industries (NASDAQ:RAVN) is dedicated to providing innovative, high-value products and solutions that solve great challenges throughout the world. Raven is a leader in precision agriculture, high-performance specialty films, and lighter-than-air technologies. Since 1956, Raven has designed, produced, and delivered exceptional solutions, earning the company a reputation for innovation, product quality, high performance, and unmatched service. For more information, visit http://ravenind.com.

Forward-Looking Statements:
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the expectations, beliefs, intentions or strategies regarding the future. The Company intends that all forward-looking statements be subject to the safe harbor provisions of the Private Securities Litigation Reform Act.

Generally, forward-looking statements can be identified by words such as “may,” “will,” “plan,” “believe,” “expect,” “intend,” “anticipate,” “potential,” “should,” “estimate,” “predict,” “project,” “would,” and similar expressions, which are generally not historical in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future – including statements relating to our future operating or financial performance or events, our strategy, goals, plans and projections regarding our financial position, our liquidity and capital resources, and our product development – are forward-looking statements.

Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements, because such statements speak only as of the date when made. Our Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain known risks, as described in the Company’s 10K under Item 1A, and unknown risks and uncertainties that may cause actual results to differ materially from our Company’s historical experience and our present expectations or projections.

Contact Information:       
Bo Larsen             
Investor Relations Director              
Raven Industries, Inc.        
+1(605)-336-2750        

 
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars and shares in thousands, except earnings per share) (Unaudited)
 
  Three Months Ended October 31,   Nine Months Ended October 31,
  2017   2016   Fav (Un)
Change
  2017   2016   Fav (Un)
Change
Net sales $ 101,349     $ 72,522     39.7 %   $ 281,494     $ 208,480     35.0 %
Cost of goods sold 68,016     52,683         189,692     149,609      
Gross profit 33,333     19,839     68.0 %   91,802     58,871     55.9 %
Gross profit percentage 32.9 %   27.4 %       32.6 %   28.2 %    
                       
Research and development expenses 4,083     4,151         12,319     12,475      
Selling, general and administrative expenses 11,421     8,212         31,476     24,174      
Long-lived asset impairment loss     87         259     87      
Operating income 17,829     7,389     141.3 %   47,748     22,135     115.7 %
Operating income percentage 17.6 %   10.2 %       17.0 %   10.6 %    
                       
Other income (expense), net (34 )   (273 )       (327 )   (579 )    
Income before income taxes 17,795     7,116     150.1 %   47,421     21,556     120.0 %
                       
Income tax expense 5,798     1,375         14,842     5,802      
Net income 11,997     5,741     109.0 %   32,579     15,754     106.8 %
                       
Net income attributable to noncontrolling interest (1 )           (2 )   1      
Net income attributable to Raven Industries $ 11,998     $ 5,741     109.0 %   $ 32,581     $ 15,753     106.8 %
                       
Net income per common share:                      
– basic $ 0.33     $ 0.16     106.3 %   $ 0.90     $ 0.43     109.3 %
– diluted $ 0.33     $ 0.16     106.3 %   $ 0.89     $ 0.43     107.0 %
                       
Weighted average common shares:                      
– basic 35,939     36,174         36,108     36,265      
– diluted 36,320     36,296         36,477     36,335      
                       

 
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) (Unaudited)
 
  October 31   January 31   October 31
  2017   2017   2016
ASSETS          
Cash and cash equivalents $ 36,873     $ 50,648     $ 46,313  
Accounts receivable, net 59,573     43,143     39,554  
Inventories 53,481     42,336     42,813  
Other current assets 3,910     2,689     2,747  
Total current assets 153,837     138,816     131,427  
           
Property, plant and equipment, net 105,651     106,324     108,948  
Goodwill and amortizable intangibles, net 58,127     52,697     53,214  
Other assets, net 2,926     3,672     3,746  
Total Assets $ 320,541     $ 301,509     $ 297,335  
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Accounts payable $ 13,383     $ 8,467     $ 9,377  
Accrued and other liabilities 22,553     19,915     15,862  
Total current liabilities 35,936     28,382     25,239  
           
Other liabilities 13,456     13,696     12,134  
Shareholders’ equity 271,149     259,431     259,962  
Total Liabilities and Shareholders’ Equity $ 320,541     $ 301,509     $ 297,335  

Net Working Capital and Net Working Capital Percentage1
Accounts receivable, net $ 59,573     $ 43,143     $ 39,554  
Plus:  Inventories 53,481     42,336     42,813  
Less: Accounts payable 13,383     8,467     9,377  
Net working capital1 $ 99,671     $ 77,012     $ 72,990  
           
Net working capital percentage1 24.6 %   27.9 %   25.2 %
                 

 
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands) (Unaudited)
 
  Nine Months Ended October 31,
  2017   2016
Cash flows from operating activities:      
Net income $ 32,579     $ 15,754  
Adjustments to reconcile net income to net cash provided by operating  activities:      
Depreciation and amortization 10,985     11,526  
Long-lived asset impairment loss 259     87  
Other operating activities, net (12,989 )   11,318  
Net cash provided by operating activities 30,834     38,685  
       
Cash flows from investing activities:      
Capital expenditures (7,003 )   (3,901 )
Payments related to business acquisitions (12,700 )    
Proceeds from sale or maturity of investments 250     250  
Purchases of investments (255 )   (750 )
(Disbursements) proceeds from settlement of liabilities, sale of assets (333 )   1,145  
Other investing activities, net (36 )   (498 )
Net cash used in investing activities (20,077 )   (3,754 )
       
Cash flows from financing activities:      
Dividends paid (14,032 )   (14,148 )
Payments for common shares repurchased (10,000 )   (7,702 )
Payment of acquisition-related contingent liabilities (364 )   (318 )
Other financing activities, net (308 )   (256 )
Net cash used in financing activities (24,704 )   (22,424 )
       
Effect of exchange rate changes on cash 172     24  
       
Net increase (decrease) in cash and cash equivalents (13,775 )   12,531  
Cash and cash equivalents at beginning of period 50,648     33,782  
Cash and cash equivalents at end of period $ 36,873     $ 46,313  
               

 
RAVEN INDUSTRIES, INC.
SALES AND OPERATING INCOME BY SEGMENT
(Dollars in thousands) (Unaudited)
 
    Three Months Ended October 31,   Nine Months Ended October 31,
    2017   2016   Fav (Un)
Change
  2017   2016   Fav (Un)
Change
Net sales                        
Applied Technology   $ 25,319     $ 25,203     0.5 %   $ 94,233     $ 79,327     18.8 %
Engineered Films   65,108     38,551     68.9 %   157,691     104,307     51.2 %
Aerostar   11,103     9,003     23.3 %   30,078     25,313     18.8 %
Intersegment eliminations   (181 )   (235 )       (508 )   (467 )    
Total Company   $ 101,349     $ 72,522     39.7 %   $ 281,494     $ 208,480     35.0 %
                         
Operating income (loss)                        
Applied Technology   $ 5,357     $ 6,415     (16.5 )%   $ 25,447     $ 20,280     25.5 %
Engineered Films   17,115     7,129     140.1 %   35,386     17,666     100.3 %
Aerostar   1,359     (1,375 )   198.8 %   4,165     (1,804 )   330.9 %
Intersegment eliminations   (12 )   (16 )       (3 )   (21 )    
Total segment income   $ 23,819     $ 12,153     96.0 %   $ 64,995     $ 36,121     79.9 %
Corporate expenses   (5,990 )   (4,764 )   (25.7 )%   (17,247 )   (13,986 )   (23.3 )%
Total Company   $ 17,829     $ 7,389     141.3 %   $ 47,748     $ 22,135     115.7 %
                         
Operating income (loss) percentages                        
Applied Technology   21.2 %   25.5 %   (430)bps   27.0 %   25.6 %   140bps
Engineered Films   26.3 %   18.5 %   780bps   22.4 %   16.9 %   550bps
Aerostar   12.2 %   (15.3 )%   2,750bps   13.8 %   (7.1 )%   2,090bps
Total Company   17.6 %   10.2 %   740bps   17.0 %   10.6 %   640bps
                         

 
RAVEN INDUSTRIES, INC.
EBITDA REGULATION G RECONCILIATION2
(Dollars in thousands) (Unaudited)
 
  Three Months Ended October 31,   Nine Months Ended October 31,
          Fav (Un)           Fav (Un)
Segments 2017   2016   Change   2017   2016   Change
Applied Technology                      
Reported operating income $ 5,357     $ 6,415     (16.5 )%   $ 25,447     $ 20,280     25.5 %
Plus: Depreciation and amortization 872     949     (8.1 )%   2,524     2,857     (11.7 )%
ATD EBITDA $ 6,229     $ 7,364     (15.4 )%   $ 27,971     $ 23,137     20.9 %
ATD EBITDA % of Net Sales 24.6 %   29.2 %       29.7 %   29.2 %    
                       
Engineered Films                      
Reported operating income $ 17,115     $ 7,129     140.1 %   $ 35,386     $ 17,666     100.3 %
Plus: Depreciation and amortization 2,259     2,201     2.6 %   6,424     6,431     (0.1 )%
EFD EBITDA $ 19,374     $ 9,330     107.7 %   $ 41,810     $ 24,097     73.5 %
EFD EBITDA % of Net Sales 29.8 %   24.2 %       26.5 %   23.1 %    
                       
Aerostar                      
Reported operating income (loss) $ 1,359     $ (1,375 )   198.8 %   $ 4,165     $ (1,804 )   330.9 %
Plus: Depreciation and amortization 351     421     (16.6 )%   1,112     1,258     (11.6 )%
Aerostar EBITDA $ 1,710     $ (954 )   279.2 %   $ 5,277     $ (546 )   1,066.5 %
Aerostar EBITDA % of Net Sales 15.4 %   (10.6 )%       17.5 %   (2.2 )%    
                       
Consolidated Raven                      
Net Income $ 11,998     $ 5,741     109.0 %   $ 32,581     $ 15,753     106.8 %
Interest expense (income), net 24     77         139     225      
Income tax expense 5,798     1,375         14,842     5,802      
Depreciation and amortization 3,801     3,893         10,985     11,526      
EBITDA $ 21,621     $ 11,086     95.0 %   $ 58,547     $ 33,306     75.8 %
EBITDA % of Net Sales 21.3 %   15.3 %       20.8 %   16.0 %    

____________________________

1 Net working capital is a defined as accounts receivable (net) plus inventories less accounts payable. Net working capital percentage is defined as net working capital divided by four times quarterly sales for each respective period.
EBITDA is a non-GAAP financial measure defined on a consolidated basis as net income/(loss) attributable to Raven Industries, Inc., plus income taxes, plus depreciation and amortization expense, plus interest expense (net). On a segment basis, it is defined as operating income plus depreciation expense and amortization expense. EBITDA margin is defined as EBITDA divided by net sales.

ICTV Brands Reports 3Q17 Financial Results

Conference Call Begins November 21, 2017 at 10:00am EDT

WAYNE, Pa., Nov. 20, 2017 (GLOBE NEWSWIRE) — ICTV Brands, Inc. (OTCQX:ICTV), (CSE:ITV), a digitally focused direct response marketing and international branding company focused on the health, wellness and beauty sector, today reported financial results for the three months ended September 30, 2017.

Third Quarter 2017 Highlights:

  • Delivered revenue of approximately $7.56 million, up 80% compared to the prior year quarter.
  • Achieved positive Adjusted EBITDA of $256,000, up 299% compared to prior year quarter.
  • Total assets increased to approximately $17.2 million from approximately $4.5 million at December 31, 2016, which includes approximately $7.5 million in inventory and approximately $960,000 in cash and equivalents.

Management Commentary:
Richard Ransom, President, stated, “During the third quarter ICTV’s two flagship brands were placed in several new brick and mortar retail stores, including Shopper’s Drug Mart and expansion to over 300 additional Bed Bath & Beyond locations. This positions ICTV to maximize our sales during the prime retail season between Thanksgiving and New Year’s Day.  In addition to retail initiatives in North America, our team has been focused on expanding the international distribution platform in both South America and Asia.   We believe that the work our team has done over the last several months positions ICTV well for substantial growth in 2018 and the year to come.”

Reported Financial Results:
Third Quarter 2017 Compared to Third Quarter 2016:
Revenues for the three months ended September 30, 2017 were approximately $7.56 million, compared to approximately $4.2 million for the three months ended September 30, 2016.  For the three months ended September 30, 2017, we generated approximately $4.5 million in gross profit, compared to approximately $3.0 million during the three months ended September 30, 2016 as a result of the addition of the no!no!TM, KyrobakTM and Cleartouch TM products acquired in January 2017. Gross profit margin was 60% in the third quarter 2017 compared to 72% in the prior year quarter. Total operating expenses increased to approximately $6.6 million from approximately $3.3 million during the third quarter of 2016, primarily related to the acquisition of the no!no! brand and other assets from PhotoMedex. The largest factor is an increase in internet marketing expenditures.  Internet marketing expenses increased to approximately $1.2 million for the three months ended September 30, 2017 from approximately $299,000 during the three months ended September 30, 2016.  Media expenditures were approximately $1.3 million and $1.4 million for the three months ended September 30, 2017 and 2016, respectively.  In addition, payroll expenses increased to $565,000 during the three months ended September 30, 2017 from $367,000 during the three months ended September 30, 2016, as a result of additional employees from the PhotoMedex acquisition.

Net loss for the third quarter was approximately $387,000, compared to a net loss of approximately $262,000 in the prior year quarter. The resulting EPS is ($0.01), as compared to ($0.01) in the comparable quarter a year earlier.  Adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) was approximately $256,000 as compared to approximately ($128,000).

Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016
Revenues for the nine months ended September 30, 2017 were $23.2 million, increasing from $12.5 million in the prior year period as a result of the addition of the no!no!TM, KyrobakTM and Cleartouch TM products acquired in January 2017. For the nine months ended September 30, 2017, we generated $15.2 million in gross margin, compared to approximately $8.8 million during the nine months ended September 30, 2016 as a result of the addition of the no!no!TM, KyrobakTM and Cleartouch TM products acquired in January 2017. Gross margin percentage was approximately 65% and 70% for the nine months ended September 30, 2017 and 2016. Total operating expenses increased to approximately $19.0 million from approximately $9.7 million during the third quarter of 2016.  This increase in operating expenses relates primarily to the PhotoMedex acquisition. The biggest increase was internet marketing expenditures. Internet marketing expenses increased to approximately $3.3 million for the nine months ended September 30, 2017 from approximately $899,000 during the nine months ended September 30, 2016.   Media expenditures was approximately $4.2 million for the nine months ended September 30, 2017 compared to $4.0 million for the nine months ended September 30, 2016.   In addition, payroll expenses increased to $2.0 million during the nine months ended September 30, 2017 from $1.1 million during the nine months ended September 30, 2016, as a result of additional employees from the PhotoMedex acquisition.  Net loss was ($2.2 million), compared to ($951,000). EPS was ($0.04), as compared to ($0.03), and Adjusted EBITDA was approximately ($415,000) as compared to approximately ($458,000).

Balance Sheet as of September 30, 2017
As of September 30, 2017, the Company had approximately $.96 million in cash and cash equivalents and approximately $6.1 million in working capital compared to approximately $1.4 million and approximately $1.3 million as of December 31, 2016, respectively. The Company believes that our current cash will be sufficient to meet the anticipated cash needs for working capital for at least the next twelve months.

Conference Call
ICTV will hold a conference call to discuss the Company’s third quarter 2017 results and answer questions on November 21, 2017, beginning at 10:00am EDT.  The call will be open to the public and will have a corporate update presented by ICTV’s Chairman and Chief Executive Officer, Kelvin Claney, President, Richard Ransom and Chief Financial Officer, Ernest P. Kollias, Jr., followed by a question and answer period. The live conference call can be accessed by dialing (866) 831-8713 or (203) 518-9713.  Participants are recommended to dial-in approximately 10 minutes prior to the start of the event. A replay of the call will be available approximately two hours after completion through December 5, 2017. To listen to the replay, dial (800) 934-7776 (domestic) or (402) 220-6983 (international).  The conference call transcript will be posted to the Company’s corporate website (http://www.ictvbrands.com) for those who are unable to attend the live call.

ICTV Brands, Inc.
ICTV Brands, Inc. sells primarily health, beauty and wellness products as well as various consumer products through a multi-channel distribution strategy. ICTV utilizes a distinctive marketing strategy and multi-channel distribution model to develop, market and sell products through, including direct response television, or DRTV, digital marketing campaigns, live home shopping, traditional retail and e-commerce market places, and our international third party distributor network. Its products are sold in the North America and are available in over 65 countries. Its products include DermaWand, a skin care device that reduces the appearance of fine lines and wrinkles, and helps improve skin tone and texture, DermaVital, a professional quality skin care line that effects superior hydration, the CoralActives brand of acne treatment and skin cleansing products, and Derma Brilliance, a sonic exfoliation skin care system which helps reduce visible signs of aging, Jidue, a facial massager device which helps alleviate stress, and Good Planet Super Solution, a multi-use cleaning agent. On January 23, 2017, we acquired several new brands, through the PhotoMedex and Ermis Labs acquisitions and have begun (or, will shortly begin) marketing and selling the following new products; no!no!® Hair, a home use hair removal device; no!no!® Skin, a home use device that uses light and heat to calm inflammation and kill bacteria in pores to treat acne; no!no!® Face Trainer, a home use mask that supports a series of facial exercises; no!no!® Glow, a home use device that uses light and heat energy to treat skin; Made Ya Look, a heated eyelash curler; no!no!® Smooth Skin Care, an array of skin care products developed to work with the devices to improve the treated skin; Kyrobak, a home use device for the treatment of non-specific lower back pain; ClearTouch ®, a home use device for the safe and efficient treatment of nail fungus; and Ermis Labs acne treatment cleansing bars. ICTV Brands, Inc. was founded in 1998 and is headquartered in Wayne, Pennsylvania.  For more information on our current initiatives, please visit www.ictvbrands.com.

Non-GAAP Financial Information
Adjusted EBITDA is defined as income from continuing operations before depreciation, amortization, interest expense, interest income, and stock-based compensation.  Adjusted EBITDA is not intended to replace operating income, net income, cash flow or other measures of financial performance reported in accordance with generally accepted accounting principles.  Rather, Adjusted EBITDA is an important measure used by management to assess the operating performance of the Company.  Adjusted EBITDA as defined here may not be comparable to similarly titled measures reported by other companies due to differences in accounting policies.       

         
    (Unaudited)   (Unaudited)
    For the three
months ended
  For the nine
 months end
    September 30, 2017   September 30, 2016   September 30, 2017   September 30, 2016
                 
Net loss, as reported $ (386,858 ) $ (261,597 ) $ (2,195,156 ) $ (951,448 )
Share based compensation expense   64,287     55,242     223,345     259,328  
Depreciation and amortization   300,964     74,631     820,792     223,850  
Interest Expense   164,915     3,274     218,032     10,511  
Issuance of stock for compensation           336,000       –  
Taxes   112,277         182,277       –  
Adjusted EBITDA $ 255,586   $ (128,450 ) $ (414,710 ) $   (457,759 )
                 

Forward-Looking Statements

Forward-Looking Statements. This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Statements preceded by, followed by or that otherwise include the words “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project,” “prospects,” “outlook,” and similar words or expressions, or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could” are generally forward-looking in nature and not historical facts. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance or achievements to be materially different from any anticipated results, performance or achievements. The Company disclaims any intention to, and undertakes no obligation to, revise any forward-looking statements, whether as a result of new information, a future event, or otherwise. For additional risks and uncertainties that could impact the Company’s forward-looking statements, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, including but not limited to the discussion under “Risk Factors” therein, which the Company has filed with the SEC and which may be viewed at http://www.sec.gov.

— Financial Statement Schedules follow —

 
ICTV BRANDS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF
 
    September 30, 2017   December 31, 2016
ASSETS     (Unaudited)      
CURRENT ASSETS:            
Cash and cash equivalents   $ 961,024     $ 1,390,641  
Accounts receivable, net of $428,533 and $123,109, respectively     3,753,803       506,337  
Inventories, net     7,479,842       1,499,270  
Prepaid expenses and other current assets     352,678       254,303  
Total current assets     12,547,347       3,650,551  
             
Property and equipment     1,111,900       74,098  
Less accumulated depreciation     (183,048 )     (58,099 )
Property and equipment, net     928,852       15,999  
             
Intangibles assets, net     3,733,979       872,864  
             
Total assets   $ 17,210,178     $ 4,539,414  
             
     LIABILITIES AND SHAREHOLDERS’ EQUITY            
CURRENT LIABILITIES:            
Accounts payable and accrued liabilities   $ 5,047,357     $ 1,644,899  
Current portion of long-term debt to related party     641,399       -0-  
Deferred revenue     258,189       377,445  
Deferred consideration     160,417        
Other liabilities     369,563       288,525  
Total current liabilities     6,476,925       2,310,869  
             
Deferred revenue – long-term     215,077       274,374  
Deferred consideration – long-term     1,026,097        
Other liabilities – long-term     514,826       665,713  
Long term debt to related party, net of current portion     1,298,863        
Total long-term liabilities     2,983,193       940,087  
             
COMMITMENTS AND CONTINGENCIES            
SHAREHOLDERS’ EQUITY:            
Preferred stock 20,000,000 shares authorized, no shares issued and outstanding            
 

Common stock, $0.001 par value, 100,000,000 shares authorized, 52,324,032 and 28,343,007 shares issued and outstanding as of  September 30, 2017 and December 31,2016, respectively

    42,113       18,132  
Additional paid-in-capital     19,970,657       11,546,804  
Accumulated other comprehensive loss     208,924        
Accumulated deficit     (12,471,634 )     (10,276,487 )
             
Total shareholders’ equity     7,750,060       1,288,458  
             
Total liabilities and shareholders’ equity   $ 17,201,178     $ 4,539,414  
                 

See accompanying notes to the condensed consolidated financial statements as filed on www.sec.gov.

   
ICTV BRANDS INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHENSIVE LOSS  
(Unaudited)  
   
    For the three months ended     For the six months ended  
    September 30, 2017   September  30, 2016     September 30, 2017     September 30, 2016  
                       
NET SALES   $ 7,559,754   $ 4,203,530      $ 23,156,949      $ 12,471,266   
                               
COST OF SALES     3,049,989     1,158,998        7,995,170        3,698,764   
                               
GROSS PROFIT     4,509,765     3,044,532        15,161,779        8,772,502   
                               
OPERATING EXPENSES:                              
General and administrative     2,448,376     1,035,752        7,643,917        3,076,489   
Selling and marketing     4,102,346     2,267,103        11,346,321        6,636,950   
Total operating expenses     6,590,722     3,302,855        18,990,238        9,713,439   
                               
OPERATING LOSS     (2,080,957 )   (258,323     (3,828,459     (940,937 )
                               
INTEREST EXPENSE, NET     (164,377 )   (3,274 )     (215,147     (10,511 )
                               
GAIN ON SETTLEMENT     1,969,245     –        1,969,245        –   
                               
MISCELLANEOUS INCOME (LOSS)     (130 )   –        59,974        –   
                               
LOSS BEFORE PROVISION FOR INCOME TAX     (274,581 )   (261,597     (2,012,879     (951,448 )
                               
PROVISION FOR INCOME TAXES     112,277     –        182,277        –   
                               
NET LOSS   $ (386,858 ) $ (261,597   $ (2,195,156   $ (951,448
                               
OTHER COMPREHENSIVE INCOME:                              
Foreign currency translation adjustment     112,223     –        208,924        –   
                                 
COMPREHENSIVE LOSS   $ (274,635 )   $ (261,597 $ (1,986,232   $ (951,448
                                 
NET LOSS PER SHARE                              
BASIC   $ (0.01 ) $ (0.01 $ (0.04   $ (0.03
DILUTED   $ (0.01 ) $ (0.01 ) $  (0.04   $ (0.03
                               
WEIGHTED AVERAGE NUMBER OF COMMON SHARES                              
BASIC AND DILUTED     52,321,826     28,202,739        49,518,478        28,184,584   
                                     

See accompanying notes to the condensed consolidated financial statements as filed on www.sec.gov.

   
ICTV BRANDS INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016  
(Unaudited)  
   
                 
    2017     2016  
             
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net loss   $ (2,195,156 )     $ (951,448 )  
Adjustments to reconcile net loss to net decrease in cash provided by (used in) operating activities:                
Depreciation     128,835         5,637    
Amortization of intangible assets     691,957         218,213    
Bad debt expense     903,710         693,607    
Share based compensation     223,345         259,328    
Issuance of stock for compensation     336,000            
Change in fair value of contingent consideration     (48,035          
Loss on disposal of property and equipment     6,197            
Noncash interest     105,459         11,933    
Gain on settlement of contingent consideration     (1,969,245 )          
Change in assets and liabilities:                
  Accounts receivable     (4,113,466       (900,774 )  
  Other receivable     (577,533          
  Inventories     922,503         751,369    
  Prepaid expenses and other current assets       114,171         52,158    
  Accounts payable and accrued liabilities     3,603,242         (72,073 )  
Severance payable             (45,995 )  
  Deferred revenue     (178,553 )       82,304    
Net cash provided by (used in) operating activities     (2,046,569 )       104,259    
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
  Acquisition of property and equipment     (171,196 )       (1,290 )  
Cash paid for acquisition of PhotoMedex, Inc.     (5,000,000          
Net cash used in investing activities     (5,171,196 )       (1,290 )  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from issuance of common stock, net of costs     6,982,930            
Proceeds from exercise of options     55,559            
Payments of deferred consideration for acquisition       ( 14,583 )          
Payments of DermaWand asset purchase agreement     (150,000         (225,000 )  
Repayments of long-term debt to related party     (87,441 )          
Net cash provided by (used in) financing activities     6,786,465         (225,000 )  
                 
Effect of exchange rates on cash and cash equivalents     1,683            
                 
NET DECREASE IN CASH AND CASH EQUIVALENTS     (429,617 )       (122,031 )  
                 
CASH AND CASH EQUIVALENTS, beginning of the period     1,390,641         1,334,302    
                 
CASH AND CASH EQUIVALENTS, end of the period   $ 961,024       $ 1,212,271    
                 
                 
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY:                
  Cashless exercise of options   $ 43       $    
Payments of DermaWand asset purchase agreement   $       $ 1,200,000    
                 
Acquisition of PhotoMedex on January 23, 2017                
   Fair value of assets acquired   $ 9,198,043       $    
Fair value of deferred consideration     (4,198,043 )          
Cash paid for acquisition   $ 5,000,000       $    
                 
Asset Acquisition of Ermis Labs on January 23, 2017                
  Cost of assets acquired   $ 1,981,822       $    
Present value of deferred consideration     (1,131,822 )          
Issuance of common stock for asset purchase     (850,000 )          
Cash paid for acquisition   $       $    
                     
Settlement of contingent consideration to PhotoMedex  on July 12, 2017                    
Contingent consideration owed to PhotoMedex   $ 3,579,760       $    
Other receivables amount forgiven     (837,708            
Payables extinguished     1,017,193              
Settlement amount in proceeds from long-term debt     (2,000,000          
Assignment of deposit amount     210,000            
Gain on settlement of contingent consideration   $ 1,969,245       $    
                     

See accompanying notes to the condensed consolidated financial statements as filed on www.sec.gov.

Contact Information:
Rich Ransom
ransom@ictvbrands.com 
484-598-2313

Ernest P. Kollias, Jr.
kollias@ictvbrands.com 
484-598-2300