nature sports activities – Walk On Mountain http://walkonmountain.com/ Mon, 16 May 2022 21:08:07 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://walkonmountain.com/wp-content/uploads/2021/10/favicon-5-120x120.png nature sports activities – Walk On Mountain http://walkonmountain.com/ 32 32 ALBIREO PHARMA, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q) https://walkonmountain.com/albireo-pharma-inc-managements-discussion-and-analysis-of-financial-condition-and-results-of-operations-form-10-q/ Mon, 16 May 2022 21:08:07 +0000 https://walkonmountain.com/albireo-pharma-inc-managements-discussion-and-analysis-of-financial-condition-and-results-of-operations-form-10-q/ You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes included elsewhere in this quarterly report and our audited financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report […]]]>
You should read the following discussion and analysis of our financial condition
and results of operations together with our condensed consolidated financial
statements and the related notes included elsewhere in this quarterly report and
our audited financial statements and Management's Discussion and Analysis of
Financial Condition and Results of Operations included in our Annual Report on
Form 10-K for the year ended December 31, 2021, filed with the SEC. In addition
to historical information, the following discussion contains forward-looking
statements that involve risks, uncertainties and assumptions. Our actual
results, performance or experience could differ materially from what is
indicated by any forward-looking statement due to various important factors,
risks and uncertainties, including, but not limited to, those set forth under
"Cautionary Note Regarding Forward-Looking Statements" included elsewhere in
this quarterly report or under "Risk Factors" in Item 1A of Part I of our Annual
Report on Form 10-K for the year ended December 31, 2021, in Item 1A of Part II
of this Quarterly Report on Form 10-Q, or in other filings that we make with the
SEC.

Overview

We are a commercial-stage biopharmaceutical company focused on the development
and commercialization of novel bile acid modulators to treat orphan pediatric
liver diseases and other liver or gastrointestinal diseases and disorders. Our
product Bylvay has been approved in the United States for the treatment of
pruritis in patients with progressive familial intrahepatic cholestasis (PFIC)
ages 3 months or older, and authorized in Europe for the treatment of PFIC in
patients ages 6 months or older. In October 2021, the U.S. Food and Drug
Administration, or FDA, granted the Company orphan drug exclusivity for Bylvay
for the treatment of pruritis in patients ages 3 months or older with PFIC. In
July 2021, the European Medicines Agency, or EMA, granted the Company orphan
drug exclusivity for Bylvay for the treatment of patients 6 months or older with
PFIC. In September 2021, Bylvay was also granted marketing authorization by the
UK Medicines and Healthcare Products Regulatory Agency, or MHRA, for the
treatment of PFIC in patients 6 months or older. Bylvay is available by
prescription to patients in the U.S. and became available by prescription to
patients in Germany in September 2021. PFIC is a rare, life-threatening genetic
disorder affecting young children and Bylvay is the first approved drug
treatment in the disease.

We are also pursuing the development of Bylvay in biliary atresia and in
Alagille syndrome, or ALGS, each of which is a rare, life threatening disease
that affects the liver and for which there is no approved pharmacologic
treatment option. We initiated a pivotal clinical trial of Bylvay in biliary
atresia, the BOLD trial, in the first half of 2020. At the end of 2021, we had
enrolled over 50% of the targeted patients in the trial. We expect topline
results from the BOLD trial in 2024. We also initiated a pivotal trial of Bylvay
in ALGS, the ASSERT trial, in the fourth quarter of 2020. In March 2022, we
announced the completion of enrollment in the ASSERT trial and we expect topline
results from the trial by the end of 2022.

We are expanding development to compounds that are intended for adult liver and
viral diseases. Our lead candidate for adult liver diseases, A3907, is a
selective inhibitor of the apical sodium-dependent bile acid transporter (ASBT)
that has, based on animal studies, high predicted oral bioavailability and
systemic exposures in man. As a result, A3907 has the potential to not only
affect the bile acid pool by increased bile acid excretion in the stools but
also through other pathways, including increased urinary bile acid excretion.
This unique approach may yield greater dosing flexibility, greater efficacy and
lower rates of adverse events, such as diarrhea, associated with the
non-systemic IBAT inhibitors acting locally in the intestine. In December 2021,
we announced topline results from our Phase 1 clinical trial in healthy adult
subjects to investigate the safety, tolerability, pharmacokinetics of orally
administered A3907. In the top-line results the trial achieved both primary and
secondary objectives. A3907 demonstrated a positive safety profile and was well
tolerated in the Phase 1 clinical trial at systemic exposures that demonstrated
therapeutic benefits in preclinical models. With the potential to inhibit ileal,
renal and hepatic ASBT, we hope A3907 will provide the optimal balance of
efficacy and tolerability in patients in multiple liver diseases. A composition
of matter patent for A3907 has been granted, with expiration in 2040 without
patent term extension. We expect to initiate a Phase 2 trial for A3907 in adult
liver disease by the end of 2022.

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We also have a preclinical program in adult liver and viral diseases. Our lead
preclinical candidate for adult viral and liver diseases is A2342, a potent
small molecule inhibitor of the sodium-taurocholate co-transporting peptide
(NTCP). NTCP is a key transporter of bile acids into the liver cells and also
serves as the entry mechanism for the hepatitis B (HBV) and hepatitis D (HDV)
viruses. A2342 protects primary human hepatocytes from HBV infection in vitro.
In addition, A2342 reduces markers of infection in HBV-infected humanized mice.
A2342 has demonstrated target engagement in non-human primates with biomarker
increases comparable to increases achieved in humans by a now commercial
subcutaneous peptide NTCP inhibitor. A composition of matter patent for A2342
has been granted, with expiration in 2040 without patent term extensions, and
IND enabling studies are being completed. We expect to initiate a Phase 1 trial
for A2342 in healthy volunteers by the end of 2022. Preclinical efforts with
other bile acid modulator approaches continue. The first IBAT inhibitor
developed by Albireo is elobixibat, which was approved in Japan and Thailand for
the treatment of chronic constipation and is marketed by our partner EA Pharma
in Japan and its sublicensee in Thailand.

Bylvay – Our main product for PFIC.


Bylvay (odevixibat) was approved by the FDA on July 20, 2021 for the treatment
of pruritis in patients ages 3 months or older with PFIC, and authorized by the
EMA on July 16, 2021 for the treatment of patients 6 months or older with PFIC.
Bylvay was also granted marketing authorization by the MHRA on September 7, 2021
for the treatment of patients 6 months or older with PFIC. We also received a
rare pediatric disease priority review voucher (PRV) from the FDA in connection
with the U.S. approval of Bylvay. In September 2021, we sold the PRV for $105.0
million. Bylvay is available by prescription to patients in the U.S. and we
announced in September 2021 that Bylvay became available by prescription to
patients in Germany. In July 2021, the EMA granted the Company orphan drug
exclusivity for Bylvay for the treatment of patients 6 months or older with
PFIC. In October 2021, the FDA granted the Company orphan drug exclusivity for
Bylvay for the treatment of pruritis in PFIC patients ages 3 months or older.

The precise prevalence of PFIC is unknown, and we are not aware of any patient
registries or other method of establishing with precision the actual number of
patients with PFIC in any geography. PFIC has been estimated to affect between
one in every 75,000 children born worldwide. Based on the published incidence,
published regional populations, and estimated median life expectancies, we
estimate the prevalence of PFIC across the spectrum of the disease to be
approximately 15,000 patients worldwide, not including China and India, but we
are not able to estimate the prevalence of PFIC with precision. Apart from
rights we granted to third parties in the below agreements, we hold global
rights to Bylvay unencumbered. Our current plan is to commercialize Bylvay
ourselves in the United States and Europe. We have entered into a co promotion
agreement with Travere Therapeutics, Inc. to promote Bylvay in the United
States. The initial term of the arrangement is two years from launch of Bylvay,
terminable at will by either party after one year following launch. We have also
entered into license agreements with third parties to commercialize Bylvay in
certain other jurisdictions, subject to regulatory approval in those
jurisdictions including Medison Pharma Ltd. for Israel, Gen ?laç ve Sa?lIk
Ürünleri Sanayi ve Ticaret A.?. for Turkey, Genpharm Services for Saudi Arabia,
Bahrain, Kuwait, Oman, Qatar, and the UAE, Jadeite Medicines Inc. for Japan, and
Swixx Biopharma AG for Central and Eastern European Countries, and we are
identifying potential partners for other regions. Bylvay is currently the only
approved drug for the treatment of patients with PFIC. Ursodeoxycholic acid, or
UDCA, is approved in France only for PFIC type 3, and in the United States and
elsewhere for the treatment of primary biliary cholangitis, or PBC. However,
many PFIC patients do not respond well to UDCA, undergo partial external bile
diversion, or PEBD, surgery and often require liver transplantation. PEBD
surgery is a life-altering and undesirable procedure in which bile is drained
outside the body to a stoma bag that must be worn by the patient 24 hours a day.

Other Indications under development for Bylvay.


We are also pursuing the development of Bylvay in patients with biliary atresia,
another rare, life-threatening disease that affects the liver and for which
there is no approved pharmacologic treatment option. In December 2018, the
European Commission granted orphan designation to odevixibat for the treatment
of biliary atresia, and in January 2019, the FDA granted orphan drug designation
to odevixibat for the treatment of biliary atresia. We initiated the BOLD
clinical trial, a global pivotal trial and the largest prospective intervention
trial ever conducted in biliary atresia, in the first half of 2020. At the end
of 2021, we had enrolled over 50% of the targeted patients in the trial and
we

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expect topline results in 2024. We believe biliary atresia is one of the most
common rare pediatric liver diseases, and is the leading cause of liver
transplants in children. Our double-blind, placebo controlled pivotal trial in
biliary atresia is designed to enroll approximately 200 patients at 70 sites
globally. Patients will receive either placebo or odevixibat once daily at
120µg/kg. The primary endpoint is survival with native liver after two years of
treatment.

Biliary atresia is a partial or total blocking or absence of large bile ducts
that causes cholestasis and resulting accumulation of bile that damages the
liver. The estimated worldwide incidence of biliary atresia is between 6 and 10
for every 100,000 live births. We estimate the prevalence of biliary atresia to
be approximately 18,000 patients across the U.S. and Europe, and approximately
27,000 combined in other jurisdictions worldwide, but we are not able to
estimate the prevalence of biliary atresia with precision. There are currently
no drugs approved for the treatment of biliary atresia. The current standard of
care is a surgery known as the Kasai procedure, or hepatoportoenterostomy, in
which the obstructed bile ducts are removed and a section of the small intestine
is connected to the liver directly. However, only an estimated 25% of those
initially undergoing the Kasai procedure will survive to their twenties without
need for liver transplantation.

In addition, we initiated a pivotal trial of Bylvay in ALGS, the ASSERT trial,
in the fourth quarter of 2020. The trial is fully enrolled with 52 patients aged
0 to 17 years of age with a genetically confirmed diagnosis of ALGS across 35
sites in North America, Europe, Middle East and Asia Pacific. We expect topline
data to be available by the end of 2022. ALGS is a genetic condition associated
with liver, heart, eye, kidney and skeletal abnormalities. In particular, ALGS
patients have fewer than normal bile ducts inside the liver, which leads to
cholestasis and the accumulation of bile and causes scarring in the liver. ALGS
is estimated to affect between one in every 50,000 children born worldwide. We
estimate the prevalence of ALGS to be approximately 12,000 patients across the
U.S. and Europe, and approximately 13,000 combined in other jurisdictions
worldwide, but we are not able to estimate the prevalence of ALGS with
precision. Current treatment for ALGS is generally in line with current
treatments for PFIC as described above. In August 2012, the European Commission
granted orphan designation to odevixibat for the treatment of ALGS. In October
2018, the FDA granted orphan drug designation to odevixibat for the treatment of
ALGS.

We continue to evaluate potential clinical development in other indications,
including primary sclerosing cholangitis, which refers to swelling
(inflammation), scarring, and destruction of bile ducts inside and outside of
the liver. The first symptoms are typically fatigue, itching and jaundice, and
many patients with sclerosing cholangitis also suffer from inflammatory bowel
disease. The estimated incidence of primary sclerosing cholangitis is 9 cases
per 100,000 people. There are currently no drugs approved for the treatment of
sclerosing cholangitis. First-line treatment is typically off-label UDCA,
although UDCA has not been established to be safe and effective in patients with
sclerosing cholangitis in well controlled clinical trials.

Since inception, we have incurred significant operating losses. As of March 31,
2022, we had an accumulated deficit of $343.3 million. We expect to continue to
incur significant expenses and increasing operating losses as we continue our
development of, and seek marketing approvals for, our product candidates,
commercialize Bylvay, prepare for and begin the commercialization of any other
approved products in the future, and add infrastructure and personnel to support
our product development and commercialization efforts and operations as a public
company in the United States.

As a commercial-stage company, our revenues, expenses and results of operations
are likely to fluctuate significantly from quarter to quarter and year to year.
We believe that period-to-period comparisons of our results of operations should
not be relied upon as indicative of our future performance.

From March 31, 2022we had about $216.7 million in cash and cash equivalents.

Overview of financial operations

The following discussion presents certain components of our Consolidated Statements of Income as well as the factors affecting these elements.

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Revenue
We generate revenue primarily from the receipt of royalty revenue, upfront or
license fees and milestone payments as well as product revenue following our
commercial launch of Bylvay. License agreements with commercial partners
generally include nonrefundable upfront fees and milestone payments. We
recognize revenue on sales of Bylvay when a customer obtains control of the
product, which occurs at a point in time and upon delivery, the receipt of which
is dependent upon the achievement of specified development, regulatory or
commercial milestone events, as well as royalties on product sales of licensed
products, if and when such product sales occur, and payments for pharmaceutical
ingredient or related procurement services. For these agreements, management
applies judgment in the allocation of total agreement consideration to the
performance obligations on a reliable basis that reasonably reflects the selling
prices that might be expected to be achieved in stand-alone transactions. For
additional information about our revenue recognition, refer to Note 1 to our
condensed consolidated financial statements included in this quarterly report.

We began our commercial launch of Bylvay for the treatment of pruritus in patients with PFIC aged 3 months or older in United States in July 2021
after receiving FDA approval for Bylvay on July 20, 2021.

We sell Bylvay to a limited number of specialty pharmacies and a specialty
distributor which dispense the product directly to patients. The specialty
pharmacies and specialty distributor are referred to as our customers. We also
sell Bylvay to our customers in the European Union, which includes a limited
number of pharmacies. Bylvay was authorized by the European Medicines Agency on
July 16, 2021 for the treatment of PFIC in patients 6 months or older. Bylvay
was also granted marketing authorization by the UK Medicines and Healthcare
Products Regulatory Agency (MHRA) in September 2021 for the treatment of PFIC in
patients 6 months or older.

Product Revenue, Net
We recognize revenue on sales of Bylvay when a customer obtains control of the
product, which occurs at a point in time and upon delivery. We provide the right
of return to our customers for unopened product for a limited time before and
after its expiration date.

Under Accounting Standards Codification ("ASC") Topic 606, Revenue from
Contracts with Customers ("ASC 606"), we have written contracts with each of our
customers that have a single performance obligation - to deliver products upon
receipt of a customer order - and these obligations are satisfied when delivery
occurs and the customer receives Bylvay. We evaluate the creditworthiness of
each of our customers to determine whether collection is reasonably assured. The
wholesale acquisition cost that we charge our customers for Bylvay is adjusted
to arrive at our estimated net product revenues by deducting (i) estimated
government rebates and discounts related to Medicaid and other government
programs, (ii) estimated costs of incentives offered to certain indirect
customers including patients, (iii) trade allowances, such as invoice discounts
for prompt payment and customer fees, and (iv) allowance for sales returns.

For the three months ended March 31, 2022, we recognized net sales of Bylvay
totaling approximately $4.7 million. No revenue was recognized for the three
months ended March 31, 2021.

Royalty revenue

For agreements that include sales-based royalties, including milestone payments based on a sales level, and the license is deemed to be the predominant element to which the royalties relate, we recognize revenue no later than ( i) when the tied selling occurs, or (ii) when the performance obligation to which all or part of the royalty has been allocated has been satisfied (or partially satisfied).


For the three months ended March 31, 2022 and 2021, we recognized revenue of
$2.2 million and $2.0 million, respectively, related to our agreement with EA
Pharma. We expect that any future revenue recognized under our license agreement
with EA Pharma will fluctuate from quarter to quarter and year to year as a
result of royalties for the period from EA Pharma, as well as the uncertain
timing of future milestone payments, if any.

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In October 2021, Albireo entered into an agreement with Jadeite Medicines Inc.
to license, develop and commercialize Bylvay within Japan. For the three months
ended March 31, 2022, no revenue was recognized under the agreement. Currently,
Jadeite is commencing bridging and other clinical studies to pursue New Drug
Application (NDA) filings and obtain approval in Japan for PFIC, ALGS, and
biliary atresia indications. Future royalty revenue recognized under our license
agreement with Jadeite will not commence until after NDA approval in Japan. The
next anticipated milestone payment will be received upon NDA filings in Japan
for Bylvay and the timing of future milestone payments, if any, is uncertain.

Costs and Operating Expenses

Cost of Product Revenue

Cost of product revenue consists of manufacturing and quality headcount costs
for sales of Bylvay. All manufacturing costs, incurred prior to FDA approval
totaled approximately $1.6 million and were not capitalized, and instead were
expensed as research and development expenses from 2020 to July 2021. As a
result, these costs were excluded from cost of product revenue for sales during
the three months ended March 31, 2022.

Research and development costs


Research and development expenses consist primarily of personnel costs
(including salaries, benefits and stock-based compensation) for employees in
research and development functions, costs associated with nonclinical and
clinical development services, including clinical trials and related
manufacturing costs, third-party contract research organizations, or CROs, and
related services and other outside costs, including fees for third-party
professional services such as consultants. Our nonclinical studies and clinical
studies are performed by CROs. We expect to continue to focus our research and
development efforts on nonclinical studies and clinical trials of our product
candidates. As a result, we expect our research and development expenses to
continue to increase for the foreseeable future.

Our direct research and development expenses are tracked on a program-by-program
basis and consist primarily of external costs such as fees paid to CROs and
others in connection with our nonclinical and clinical development activities
and related manufacturing. We do not allocate employee costs or facility
expenses, including depreciation or other indirect costs, to specific product
development programs because these costs are deployed across multiple product
development programs and, as such, are not separately classified.

Successful development of our current and potential future product candidates is
highly uncertain. Completion dates and costs for our programs can vary
significantly by product candidate and are difficult to predict. As a result, we
cannot estimate with any degree of certainty the costs we will incur in
connection with development of any of our product candidates. We anticipate we
will make determinations as to which programs and product candidates to pursue
and how much funding to direct to each program and product candidate on an
ongoing basis in response to the results of ongoing and future clinical trials,
our ability to enter into licensing, collaboration and similar arrangements with
respect to current or potential future product candidates, the success of
research and development programs and our assessments of commercial potential.

Selling, general and administrative expenses

Selling, general and administrative expenses consist primarily of personnel
costs (including salaries, benefits and stock-based compensation) for our
executive, finance and other administrative employees. In addition, selling,
general and administrative expenses include fees for third-party professional
services, including consulting, information technology, legal and accounting
services. Other selling, general and administrative expenses include marketing
expenses related to the commercial launch of Bylvay, as well as corporate
expenses.

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Other Operating Expense, Net

Other operating expenses, net, primarily include foreign exchange gains or losses associated with the revaluation of intercompany loans.

Interest expense, net


Interest expense, net consists primarily of non-cash interest expense recorded
in connection with the sale of future royalties, related to sales of elobixibat
in Japan, in addition to both cash and non-cash interest expense associated with
our note payable. In addition, interest expense, net includes interest income
associated with our interest-bearing cash and cash equivalents.

Significant Accounting Policies and Estimates

Our management's discussion and analysis of financial condition and results of
operations is based on our unaudited condensed consolidated financial
statements, which have been prepared in accordance with United States generally
accepted accounting principles for interim financial information. The
preparation of these financial statements requires us to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses. We base our estimates and assumptions on historical experience and
on various assumptions that we believe are reasonable under the circumstances,
and we evaluate them on an ongoing basis. These estimates and assumptions form
the basis for making judgments about the carrying values of assets and
liabilities and the recording of revenues and expenses that are not readily
apparent from other sources. Actual results and experiences may differ
materially from these estimates and judgments. In addition, our reported
financial condition and results of operations could vary if new accounting
standards are enacted that are applicable to our business. Our critical
accounting policies and the methodologies and assumptions we apply under them
have not materially changed since March 1, 2022, the date we filed our Annual
Report on Form 10-K for the year ended December 31, 2021. Due to the
commercialization of Bylvay (odevixibat) the Company implemented accounting
policies related to revenue recognition and inventory.  See Note 1, "Summary of
significant accounting policies and basis of presentation" for more information
on revenue recognition and inventory accounting policies. For more information
on other critical accounting policies, refer to our Annual Report on Form 10-K
for the year ended December 31, 2021.

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Results of Operations

Three months completed March 31, 2022 and March 31, 2021

Result of Operations

                                        Three Months Ended March 31,        Change
                                          2022                2021             $

                                                     (in thousands)
Revenue
Product revenue, net                 $         4,656     $             -    $ 4,656
Royalty revenue                                2,176               1,966        210
Total revenue                                  6,832               1,966      4,866
Operating Expenses
Cost of product revenue                          234                   -        234
Research and development                      21,903              19,943      1,960
Selling, general and administrative           16,855              15,273   

1,582

Other operating expense, net                   7,398               6,528   

870

Total cost and operating expenses             46,390              41,744   
  4,646
Operating loss                              (39,558)            (39,778)        220
Other loss
Interest expense, net                        (2,876)             (3,955)      1,079
Net loss                             $      (42,434)     $      (43,733)    $ 1,299


Revenue

                            Three Months Ended March 31,         Change
                             2022                  2021             $

                                         (in thousands)
Product revenue, net    $         4,656       $             -    $ 4,656
Royalty revenue                   2,176                 1,966        210
Total revenue           $         6,832       $         1,966    $ 4,866

Product revenue, net was $4.7 million for the three months ended March 31, 2022
due to Bylvay product sales. Product revenue, net was $2.8 million in the United
States and $1.9 million in international markets. There was no product revenue
for the three months ended March 31, 2021.

Royalty revenue was $2.2 million for the three months ended March 31, 2022
compared with $2.0 million for the three months ended March 31, 2021, an
increase of $0.2 million. The increase relates to estimated royalty revenue to
be received from EA Pharma for elobixibat for the treatment of chronic
constipation.

Cost of product revenue

                              Three Months Ended March 31,         Change
                                 2022                  2021          $

                                           (in thousands)
Cost of product revenue    $            234          $       -    $    234


Cost of product revenue was $0.2 million for the three months ended March 31,
2022. Following Bylvay approval, certain manufacturing and quality headcount
costs are now included in cost of product revenue. There were no material costs,
as materials related to current product sold, was expensed prior to approval.
Bylvay was not approved until July 2021, therefore there was no cost of product
revenue for the three months ended March 31, 2021.

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Contents

Research and development costs

                                       Three Months Ended March 31,        Change
                                          2022                2021            $

                                                    (in thousands)

Research and development costs $21,903 $19,943 $1,960



Research and development expenses were $21.9 million for the three months ended
March 31, 2022 compared with $19.9 million for the three months ended March 31,
2021, an increase of $2.0 million. The increase in research and development
expenses for the 2022 period was principally due to clinical and preclinical
program activities, personnel expenses including stock-based compensation and
other costs as we continue to increase our headcount and program activities. The
increase in program activities related to ongoing preclinical trials as well as
the Phase 1 study for A3907, and were partially offset by a decrease in Bylvay
PFIC expenses related to the completion of the PEDFIC 1 study.

The following table summarizes our major product development programs and third-party disbursements for each clinical-stage product candidate and pre-clinical programs for the three months ended March 31, 2022 and 2021.

                                                        Three Months Ended March 31,         Change
                                                           2022                2021             $

                                                                      (in thousands)
Direct third-party project costs:
Bylvay - PFIC                                         $        4,344      $        6,197    $ (1,853)
Bylvay - biliary atresia and ALGS                              5,591       
       5,540           51
A3907                                                          2,002               1,605          397
Preclinical                                                    2,859                 813        2,046
Total                                                 $       14,796      $       14,155    $     641
Other project costs(1):
Personnel costs                                       $        6,434      $        5,660    $     774
Other costs(2)                                                   673                 128          545
Total                                                 $        7,107      $        5,788    $   1,319
Total research and development costs                  $       21,903      $

19,943 $1,960

(1) The other project costs are split between several programs.

(2) Other costs include installation, procurement, consulting and overhead costs that

support multiple programs.

Selling, general and administrative expenses


                                         Three Months Ended March 31,        Change
                                            2022                2021            $

                                                      (in thousands)

Selling, general and administrative expenses $16,855 $15,273

$1,582



Selling, general and administrative expenses were $16.9 million for the three
months ended March 31, 2022 compared with $15.3 million for the three months
ended March 31, 2021, an increase of $1.6 million. The increase is attributable
to personnel and related expenses as we continue to increase our headcount, and
commercialization activities related to Bylvay including our sales force and
support for global expansion efforts.

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Other operating expense, net

                                    Three Months Ended March 31,          Change
                                     2022                  2021             $

                                                 (in thousands)
Other operating expense, net    $         7,398       $         6,528    $    870


Other operating expense, net totaled $7.4 million for the three months ended
March 31, 2022 compared with $6.5 million for the three months ended March 31,
2021. The difference primarily relates to changes in foreign currency exchange
rates in the two periods.

Interest expense, net

                            Three Months Ended March 31,         Change
                              2022                 2021             $

                                         (in thousands)
Interest expense, net    $       (2,876)      $       (3,955)    $ 1,079

Interest expense, net totaled $2.9 million for the three months ended March 31,
2022 compared with $4.0 million for the three months ended March 31, 2021. The
difference was principally attributable to lower non-cash interest expense
recorded in connection with the sale of future royalties related to sales of
elobixibat in Japan, partially offset by interest income associated with our
interest bearing cash accounts.

Cash and capital resources

Sources of liquidity

We anticipate that we will continue to generate losses for the foreseeable
future, and we expect the losses to increase as we commercialize Bylvay and
continue the development of and seek regulatory approvals for Bylvay in other
indications and for our other product candidates. We are subject to all of the
risks applicable to the development and commercialization of new pharmaceutical
products and may encounter unforeseen expenses, difficulties, complications,
delays and other unknown factors that may harm our business. We expect that we
will need substantial additional funding to complete development of and
potentially commercialize our other product candidates.

Our operations have historically been financed primarily through issuances of
equity or convertible debt, upfront fees paid upon entering into license
agreements, payments received upon the achievement of specified milestone events
under license agreements, grants and venture debt borrowings and the HealthCare
Royalty Partners III, L.P. (HCR) royalty monetization transactions. Our primary
uses of capital are, and we expect will continue to be, personnel-related costs,
third party expenses associated with our research and development programs,
including the conduct of clinical trials, and manufacturing-related costs for
our other product candidates as well as commercialization and
pre-commercialization efforts.

From March 31, 2022our cash and cash equivalents were approximately $216.7 million.

During the first quarter of 2018, following the Japanese MHLW's approval of
elobixibat for the treatment of chronic constipation in January 2018, we
received a $44.5 million payment, net of certain transaction expenses, from HCR
under our royalty interest acquisition agreement (RIAA). Additionally, this
approval triggered a milestone payment to us from EA Pharma of $11.2 million. In
June 2020, we entered into an amendment to the RIAA with HCR pursuant to which
HCR agreed to pay us an additional $14.8 million, net of certain transaction
expenses in exchange for the elimination of the (i) $78.8 million cap amount on
HCR's rights to receive royalties on sales in Japan and sales milestones for
elobixibat in certain other territories that may become payable by EA Pharma and
(ii) $15.0 million payable to us if a specified sales milestone is achieved for
elobixibat in Japan. As of March 31, 2022, we have received approximately $59.3
million in upfront and milestone payments from EA Pharma under a license
agreement for the development and commercialization of elobixibat in specified
countries in Asia. We are eligible to

                                       30

Contents


receive additional amounts of up to $5.0 million under the amended agreement, if
a specified regulatory event is achieved for elobixibat. To the extent we
receive future Japanese royalties, sales milestones or other specified payments
from EA Pharma, we are obligated to pay those amounts as royalty interest
payments to HCR under the RIAA.

Moreover, in February 2020we completed an underwritten public offering of 2,190,750 common shares pursuant to our Universal Listing Statement for net proceeds of approximately $43.0 million.


On May 7, 2020, we filed a new universal shelf registration statement on Form
S-3, or the 2020 Form S-3, with the SEC, which was declared effective on May 18,
2020, pursuant to which we registered for sale up to $200.0 million of any
combination of our common stock, preferred stock, debt securities, warrants,
rights and/or units from time to time and at prices and on terms that we may
determine. On May 7, 2020, we also entered into a sales agreement with Cowen and
Company, LLC, or Cowen, with respect to an at-the-market offering program
providing for us to offer and sell, from time to time at our sole discretion,
shares of our common stock having an aggregate offering price of up to $50.0
million. This agreement terminated on September 9, 2020.

On September 14, 2020, we completed an underwritten public offering of 4,000,000
shares of our common stock under this registration statement. We received net
proceeds from this offering of approximately $150.4 million, after deducting
underwriting discounts and commissions, but before deducting offering expenses.
As of March 31, 2022, $40.0 million of securities remain available for issuance
under the 2020 Form S-3.

On June 8, 2020, we entered into a Loan and Security Agreement with several
banks and other financial institutions or entities from time to time parties to
the Loan and Security Agreement, as lenders, or collectively referred to as the
Lender, and Hercules Capital, Inc., in its capacity as administrative agent and
collateral agent for itself and Lender (in such capacity, the Agent or
Hercules). The Loan and Security Agreement provides for term loans in an
aggregate principal amount of up to $80.0 million to be delivered in multiple
tranches, (the Term Loans). The tranches consist of (i) a term loan advance to
us in an aggregate principal amount of up to $15.0 million, of which (A) we
agreed to borrow an aggregate principal amount of $10.0 million on the date on
which all conditions to the funding of the Term Loans by the Lender were met
(the Closing Date), but we did not request that the Lender make an additional
term loan advance to us in an aggregate principal amount of $5.0 million prior
to December 15, 2020 as permitted under the agreement, (ii) subject to the
achievement of certain initial performance milestones, or Performance Milestone
I, we had the right to request that the Lender make additional term loan
advances to us in an aggregate principal amount of up to $20.0 million from
January 1, 2021 through December 15, 2021 in minimum increments of $10.0
million, which we did not exercise, and (iii) subject to the Lender's investment
committee's sole discretion, we had the right to request that the Lender make
additional term loan advances to us in an aggregate principal amount of up to
$45.0 million through March 31, 2022 in minimum increments of $5.0 million,
which we did not exercise. As of March 31, 2022, we borrowed an aggregate
principal amount of $10.0 million and there were no term loans available to us
for advance under the Loan and Security Agreement.

Under the Loan and Security Agreement, we also agreed to issue to Hercules
warrants to purchase a number of shares of our common stock equal to 1% of the
aggregate amount of the Term Loans that are funded, as such amounts are funded.
On the Closing Date, we issued a warrant for 5,311 shares of our common stock.
The warrants will be exercisable for a period of seven years from the date of
the issuance of each warrant at a per-share exercise price equal to $18.83,
subject to certain adjustments as specified in the warrants. The shares of
common stock underlying the warrants were subsequently registered on Form S-3
with the SEC, which was declared effective on August 18, 2020.

On February 25, 2021, we filed an automatic shelf registration statement on Form
S-3 with the SEC, which became effective upon filing, pursuant to which we
registered for sale an unlimited amount of any combination of our common stock,
preferred stock, debt securities, warrants, rights and/or units from time to
time and at prices and on terms that we may determine, so long as we continued
to satisfy the requirements of a "well-known seasoned issuer" under SEC rules,
which we refer to as the 2021 Form S-3. Because we are no longer a well-known
seasoned

                                       31

  Table of Contents

issuer, the 2021 Form S-3 is no longer available for us to offer and sell
securities pursuant to the 2021 Form S-3 following the filing of our Annual
Report on Form 10-K on March 1, 2022. On February 25, 2021, we also entered into
a new sales agreement with Cowen, which we refer to as the 2021 Sales Agreement,
with respect to an at-the-market offering program under which we may offer and
sell, from time to time at our sole discretion, shares of our common stock
having an aggregate offering price of up to $100.0 million. Subsequently in July
2021, we sold 7,508 shares of our common stock for net proceeds of approximately
$0.2 million pursuant to the 2021 Sales Agreement. Since the 2021 Form S-3 is no
longer available, unless and until we register the offer and sale of securities
pursuant to the 2021 Sales Agreement in the future, we will not be able to make
any further sales of securities under the 2021 Sales Agreement.

On August 31, 2021, we entered into a definitive agreement to sell the rare
pediatric disease priority review voucher ("PRV") that we received from the FDA
in connection with the approval of the Company's product Bylvay (odevixibat),
for cash proceeds of $105.0 million. On September 28, 2021, we completed our
sale of the PRV and received net proceeds of $103.4 million, after deducting
commission costs, which was recorded as a gain from sale of priority review
voucher, net of transaction costs.

Cash flow

Three months completed March 31, 2022 and March 31, 2021

                                                            Three Months Ended March 31,
                                                              2022                2021

                                                                   (in thousands)
Net cash (used in) provided by:
Operating activities                                     $      (35,409)            (34,716)
Investing activities                                               (235)                   -
Financing activities                                               4,380                 404
Total                                                    $      (31,264)     $      (34,312)
Effect of exchange rate changes on cash and cash
equivalents                                                        (188)                 121
Net decrease in cash and cash equivalents                       (31,452)   
        (34,191)


Operating activities
Cash used in operating activities of $35.4 million during the three months ended
March 31, 2022 was primarily a result of our $42.4 million net loss from
operations and a net decrease in assets and liabilities of $6.6 million. The net
decrease in operating assets and liabilities during the three months ended March
31, 2022 was primarily driven by decreases in accrued expenses, inventory and
other current and long-term liabilities, offset by increases in prepaid expenses
and other current assets and accounts receivable, net. This decrease was offset
by non-cash items, including $7.2 million of foreign currency adjustments, $3.5
million of share-based compensation expense and $2.7 million of accretion of
liability related to sale of future royalties. Cash used in operating activities
of $34.7 million during the three months ended March 31, 2021 was primarily a
result of our $43.7 million net loss from operations and a net decrease in
assets and liabilities of $3.8 million. The net decrease in operating assets and
liabilities during the three months ended March 31, 2021 was primarily driven by
decreases in accrued expenses, other current and long-term liabilities, prepaid
expenses and other current assets, offset by increases in accounts payable. This
decrease was offset by non-cash items, including $6.5 million of foreign
currency adjustments, $3.1 million of stock-based compensation expense, and $3.1
million of accretion of liability related to sale of future royalties.

Investing activities


Cash used in investing activities of $0.2 million during the three months ended
March 31, 2022 was primarily related to purchases of property and equipment.
There were no investing activities during the three months ended March 31,
2021.

                                       32

  Table of Contents

Financing activities

Cash provided by financing activities of $4.4 million during the three months
ended March 31, 2022 was primarily related to proceeds from the exercise of
options. Cash provided by financing activities of $0.4 million during the three
months ended March 31, 2021 was primarily related to proceeds from the exercise
of options.

Funding Requirements

Cash used to fund operating expenses is affected by the timing of when we pay
expenses, as reflected in the change in our outstanding accounts payable and
accrued expenses. As a result, cash and cash equivalents are anticipated to be
sufficient to fully fund the launches of Bylvay and the next stages of the early
asset portfolio into 2024 based on current revenue and expense projections.
Bylvay 2022 sales are expected to be a minimum of $30.0 million..

Our future funding needs will depend on many factors, including the following:

 ? Future revenue from commercial sales of Bylvay for patients with PFIC;

the costs, design, duration and any potential delays of the pivotal clinical study

? the Bylvay trial in biliary atresia and the pivotal clinical trial of Bylvay in

ALGS;

the scope, number, progress, initiation, duration, cost, results and timing of

? clinical trials and non-clinical studies of our current or future product

candidates;

? whether and to what extent milestones are achieved under our license

agreement with EA Pharma or any prospective licensee or collaborator;

? the results and timing of regulatory reviews, approvals or other actions;

? our ability to obtain marketing approval for our product candidates;

our ability to establish and maintain licenses, collaborations or

? similar arrangements on favorable terms and whether and to what extent we

retain development or marketing responsibilities for any new

license, collaboration or similar agreement;

? the success of any other business, product or technology that we acquire or in

that we invest;

? our ability to maintain, expand and defend the reach of our

real estate portfolio;

? our ability to manufacture any approved product at commercially reasonable prices

terms;

? our ability to build and maintain a sales and marketing organization or

suitable third-party alternatives for any approved product;

? the number and characteristics of product candidates and programs that we

to pursue;

? current and potential impacts of the COVID-19 pandemic on our business;

? the costs of acquiring, licensing or investing in companies, products

candidates and technologies;



 ? our need and ability to hire additional management and scientific and medical
   personnel;


                                       33

  Table of Contents

operating costs as a public company in United Statesincluding the

? need to implement and maintain financial and reporting systems and other

our company’s internal systems and infrastructure;

? market acceptance of our product candidates, to the extent that they are approved for

commercial sale; and

? the effect of competing technological and commercial developments.



We cannot be certain that we will be able to successfully commercialize Bylvay
or that we will be able to establish and maintain distribution arrangements. Our
failure or the failure of our distributors to successfully commercialize Bylvay
could have a material adverse effect on our financial position or results of
operations. In addition, we cannot be certain that we will be able to
successfully complete our pre-commercialization activities or research and
development programs or establish licensing, collaboration or similar
arrangements for our product candidates. Our failure or the failure of any
current or potential future licensee to complete research and development
programs for our product candidates could have a material adverse effect on our
financial position or results of operations.

We expect to continue to incur losses. Our ability to achieve and maintain
profitability is dependent upon the successful development, regulatory approval
and commercialization of our products and product candidates and achieving a
level of revenues adequate to support our cost structure. We may never achieve
profitability.

If the conditions for raising capital are favorable, we may seek to finance
future cash needs through public or private equity or debt offerings or other
financings. Additionally, if we need to raise additional capital to fund our
operations, complete clinical trials, or potentially commercialize our product
candidates, we may likewise seek to finance future cash needs through public or
private equity or debt offerings or other financings. The necessary funding may
not be available to us on acceptable terms or at all.

We have an effective universal shelf registration statement on Form S-3 with the
SEC, pursuant to which we registered for sale up to $200.0 million of any
combination of our common stock, preferred stock, debt securities, warrants,
rights and/or units from time to time and at prices and on terms that we may
determine. As of March 31, 2022, $40.0 million of securities remain available
for issuance under the shelf registration statement, which we refer to as the
2020 Form S-3. On February 25, 2021, we filed an automatic shelf registration
statement on Form S-3 with the SEC, pursuant to which we registered for sale an
unlimited amount of any combination of our common stock, preferred stock, debt
securities, warrants, rights and/or units from time to time and at prices and on
terms that we may determine, so long as we continued to satisfy the requirements
of a "well-known seasoned issuer" under SEC rules, which we refer to as the 2021
Form S-3, including up to $100.0 million of our common stock pursuant to the
sales agreement with respect to an at-the-market offering program. As of March
31, 2022, there remained $99.7 million of our common stock available for sale
pursuant to the sales agreement. Because we are no longer a well-known seasoned
issuer, the 2021 Form S-3 is no longer be available for us to offer and sell
securities pursuant to the 2021 Form S-3 following the filing of our Annual
Report on Form 10-K on March 1, 2022. Since the 2021 Form S-3 is no longer
available, unless and until we register the offer and sale of securities
pursuant to the 2021 Sales Agreement in the future, we will not be able to make
any further sales of securities under our at-the-market offering program.

The sale of additional equity or convertible debt securities may result in
significant dilution to our stockholders, and the terms may include liquidation
or other preferences that adversely affect the rights of our stockholders. The
incurrence of additional debt financing would result in debt service obligations
and the instruments governing such debt may provide for operating and financing
covenants that would restrict our operations. We may also seek to finance future
cash needs through potential future licensing, collaboration or similar
arrangements. These arrangements may not be available on acceptable terms or at
all, and we may have to relinquish valuable rights to our technologies, future
revenue streams, research programs or product candidates or to grant licenses on
terms that may not be favorable to us. If adequate funds are not available, we
may be required to delay, reduce the scope of or eliminate our development
programs or obtain funds through third-party arrangements that may require us to
relinquish rights to certain product candidates that we might otherwise seek to
develop or commercialize independently.

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Contents

© Edgar Online, source Previews

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HealthWarehouse.com Reports First Quarter 2022 Results https://walkonmountain.com/healthwarehouse-com-reports-first-quarter-2022-results/ Thu, 12 May 2022 12:05:00 +0000 https://walkonmountain.com/healthwarehouse-com-reports-first-quarter-2022-results/ CINCINNATI–(BUSINESS WIRE)–HealthWarehouse.com, Inc. (OTC: HEWA) today announced that net sales for the first quarter of 2022 were $4,314,980, an increase of 13% over the same period in 2021, resulting from strong revenue growth from partner services and increased direct-to-consumer sales. The Company reported an operating loss of $213,988 for the quarter while generating positive cash […]]]>

CINCINNATI–(BUSINESS WIRE)–HealthWarehouse.com, Inc. (OTC: HEWA) today announced that net sales for the first quarter of 2022 were $4,314,980, an increase of 13% over the same period in 2021, resulting from strong revenue growth from partner services and increased direct-to-consumer sales. The Company reported an operating loss of $213,988 for the quarter while generating positive cash flow of $64,047 as evidenced by Adjusted EBITDA (the Company’s internal non-GAAP measure).

HealthWarehouse.com, a healthcare e-commerce technology company, sells and delivers prescription drugs in all 50 states as an approved digital pharmacy through the National Association of Boards of Pharmacy (NABP). HealthWarehouse.com provides a platform focused on improving access and reducing the cost of healthcare products for consumers nationwide. »

Joseph Peters, President and CEO, said, “We are pleased to report revenue growth for the quarter in both our partner services and our direct-to-consumer businesses. We continue to expand our healthcare partner offerings, customize our platform, develop APIs, and add resources to grow and support our partner services business. At the same time, we are developing better technological tools to attract and retain traditional customers.

“In April,” Mr. Peters continued, “we were honored when Consumer Reports named Healthwarehouse.com a leader in the direct-to-consumer online pharmacy space. We’re the only provider listed by Consumer Reports that offers a full line of prescription drugs, has licenses to ship to all 50 states, and accepts payments from health savings accounts.

HealthWarehouse.com continues to invest in proprietary technology to stay on top of new developments and offerings in the healthcare world, with a focus on customer experience, operational efficiency and scalability.

“We plan to launch a proprietary e-commerce platform and pharmacy technology in 2022 that will enhance our customer experience and, therefore, improve customer acquisition and retention in our direct-to-consumer business. . We are building an outstanding technology team and plan to expand it to accelerate progress on our company initiatives. Additionally, our new technology will facilitate and expand the services provided to our healthcare partner customers to support our growth initiatives. We are well positioned to be a technology leader in the industry, delivering seamless and affordable healthcare solutions while maintaining world-class service levels,” added Mr. Peters.

Overview of the first quarter of 2022:

Net sales: Net sales for the first quarter of 2022 increased to $4,314,980 from $3,818,285 for the first quarter of 2021, an increase of $496,695, or 13.0%. Prescription sales were $3,435,123 for the quarter ended March 31, 2022, compared to $3,163,793 for the quarter ended March 31, 2021, an increase of $271,329, or 8.6% . These increases were primarily driven by revenue growth from partner services, offset by a reduction in our direct-to-consumer (B2C) business. Net over-the-counter product sales increased 37.0% to $793,729 during the three months ended March 31, 2022 from $579,145 during the three months ended March 31, 2021, primarily due to sales of test kits and supplements related to COVID-19. 19.

Gross profit: Gross profit was $2,850,335 for the first quarter of 2022, an increase of $198,460, or 7.5%, over the first quarter of 2021. Gross margin percentage decreased from 69, 5% for the first quarter of 2021 to 66.1% for the first quarter of 2022. , mainly due to lower margins on the range of products sold in our over-the-counter and partner services businesses.

Operating Expenses : Operating expenses totaled $3,022,021 for the first quarter of 2022 compared to $2,739,576 for the first quarter of 2021, an increase of $282,445 or 10.3%. Expenses increased for salaries and related expenses, shipping and shipping supplies, stock-based compensation, advertising and marketing, software and accounting expenses. The increases were partially offset by a decrease in legal fees.

Net loss and adjusted EBITDA: The Company reported a net loss of $213,988 for the first quarter of 2022, compared to a net loss of $131,025 during the same period in 2021. Adjusted EBITDA was $64,047 in the first quarter of 2022, compared to 124 $114 in the previous quarter.

HEALTHWAREHOUSE.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
For the three months ended
March, 31st,

2022

2021

Net sales

$

4,314,980

$

3,818,285

Cost of sales

1,464,645

1,166,410

Gross profit

2,850,335

2,651,875

Operating Expenses

3,022,021

2,739,576

Net operating profit (loss)

(171,686

)

(87,701

)

Interest expense

(42,302

)

(43,324

)

Net loss

(213,988

)

(131,025

)

Preferred Stock:
Series B Convertible Contractual Dividends

(85,558

)

(85,558

)

Net loss attributable to common shareholders

$

(299,546

)

$

(216,583

)

Data per share:
Net loss – basic and diluted

$

(0.00

)

$

(0.00

)

Series B Convertible Contractual Dividends

$

(0.00

)

$

(0.00

)

Net loss attributable to common shareholders – basic
and diluted

$

(0.00

)

$

(0.00

)

Weighted Average Common Shares Outstanding – Basic and Diluted

52 150 142

51,632,399

Use of Non-GAAP Financial Measures

HealthWarehouse.com, Inc. (the “Company”) prepares its consolidated financial statements in accordance with United States generally accepted accounting principles (GAAP). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses information regarding EBITDA and Adjusted EBITDA, which are commonly used. In addition to adjusting net income or net loss to exclude interest, taxes, depreciation and amortization (“EBITDA”), Adjusted EBITDA also excludes stock-based compensation and certain one-time charges. . EBITDA and Adjusted EBITDA are not performance measures defined in accordance with GAAP. However, Adjusted EBITDA is used internally to plan and assess the Company’s performance. Accordingly, management believes that disclosure of this measure provides lenders and other investors with additional insight into the Company’s operations which, when coupled with GAAP results, provides a more complete understanding of the Company’s financial performance.

Adjusted EBITDA should not be considered an alternative to net income, net loss or net cash provided by or used in operating activities as a measure of operating results or liquidity. It may not be comparable to similarly titled measures used by other companies and excludes financial information that some may consider important in evaluating the Company’s performance.

Reconciliation of Net Loss (GAAP) to Adjusted EBITDA (Non-GAAP)

Three months completed
March, 31st,

2022

2021

Net loss

$

(213,988

)

.

$

(131,025

)

Interest expense

42,302

43,424

Depreciation and amortization

32,842

33,280

EBITDA (non-GAAP)

(138,844

)

(54,321

)

Adjustments to EBITDA:
Stock-based compensation

202 891

178,535

Adjusted EBITDA

$

64,047

$

124 214

About HealthWarehouse.com

HealthWarehouse.com, Inc. (OTCQB: HEWA), a healthcare e-commerce technology company, sells and delivers prescription drugs in all 50 states as an approved digital pharmacy through the National Association of Boards of Pharmacy (NABP). HealthWarehouse.com provides a platform focused on improving access and reducing the cost of healthcare products for consumers nationwide. Based in Florence, Kentucky, the company operates America’s leading online pharmacy and a pioneer in affordable healthcare. As one of the first digital pharmacies approved by the National Association of Boards of Pharmacy (“NABP”), HealthWarehouse.com is on a mission to provide affordable healthcare and incredible patient services to help Americans. Learn more about www.HealthWarehouse.com.

Forward-looking statements

This announcement and the information incorporated by reference herein contain “forward-looking statements” as defined in federal securities laws, including, but not limited to, Section 27A of the Securities Act of 1933, the Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, the statements of which are based on our current expectations, estimates, forecasts and projections. Statements that are not historical facts, including statements about the Company’s beliefs, expectations and future plans and strategies, are forward-looking statements. Actual results may differ materially from those expressed in forward-looking statements or management’s expectations. Important factors that could cause or contribute to actual results being materially and adversely different from those described or implied by the forward-looking statements include, among others, competitive risks, growth management, access to sufficient capital to fund our business and growth, new products, services and technologies, potential fluctuations in operating results, international expansion, results of legal proceedings and claims, distribution center optimization, seasonality, trade agreements, acquisitions and strategic transactions, exchange rates, system disruption, cyberattacks, access to sufficient inventory, government regulation and taxation, payments and fraud. Further information about factors that could affect HealthWarehouse.com’s financial results is included in HealthWarehouse.com’s audited annual reports and quarterly reports available at otcmarkets.com and in filings with the Securities and Exchange Commission. the United States.

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Women must fight for the right to abortion – at the polls https://walkonmountain.com/women-must-fight-for-the-right-to-abortion-at-the-polls/ Sun, 08 May 2022 08:30:00 +0000 https://walkonmountain.com/women-must-fight-for-the-right-to-abortion-at-the-polls/ OPINION AND COMMENT Editorials and other opinion content provide insights into issues important to our community and are independent of the work of our newsroom reporters. Hundreds of protesters marched down Salisbury Street in Raleigh on May 3, 2022, calling for the preservation of abortion rights after a leaked draft notice of a Supreme Court […]]]>

OPINION AND COMMENT

Editorials and other opinion content provide insights into issues important to our community and are independent of the work of our newsroom reporters.

Hundreds of protesters marched down Salisbury Street in Raleigh on May 3, 2022, calling for the preservation of abortion rights after a leaked draft notice of a Supreme Court ruling said the court could being about to cancel Roe against Wade.

Hundreds of protesters marched down Salisbury Street in Raleigh on May 3, 2022, calling for the preservation of abortion rights after a leaked draft notice of a Supreme Court ruling said the court could being about to cancel Roe against Wade.

rwillett@newsobserver.com

Abortion

The Supreme Court seems ready, with the stroke of a pen, to strip half of the American population of their inalienable right to freedom over their own bodies. Ladies of America, DO NOT put up with this. Run, don’t walk, to the voting booth. It is time for a political revolution.

Shannon JeffersonCharlotte

Contraception

Republicans have gone out of their way to punish women who have unwanted pregnancies. What are the consequences for the father in these cases? If the father were responsible for all of the financial costs of pregnancy as an adult, including childcare and college education or the equivalent, there might be fewer unintended pregnancies.

Larry Bennett, Matthews

What’s coming?

The Roe vs Wade reversal issue is just the beginning of what’s to come. The GOP has successfully implemented voting restrictions in many states. Their agenda also includes the erosion of LGBTQ rights and the elimination of same-sex marriage, certain forms of birth control, and other civil liberties that the majority of this country has come to accept. As a woman, I am not interested in becoming state property.

Dot Meixler, Huntersville

Well done, Betty

Regarding “’Charlottens react to potential downfall of Roe v. Wade’ (May 4):

Well done Betty Gunz! You are a brave woman to tell your story. I applaud Gunz’s bravery in speaking about his past, especially when “abortion” was a dirty word in this country. I hope she will continue her efforts to help other women who find themselves in an untenable situation.

Janis Roelker, Mooresville

Biden Propaganda

With the polling numbers for the Biden administration looking bad, we now have a Disinformation Governance Council, created by the Department of Homeland Security.

The council is led by Nina Jankowicz, a misinformation “expert” who in 2020 described Hunter Biden’s laptop as “a product of the Trump campaign.” So the Americans can count on her to tell us the truth about what is happening on the southern border. Unfortunately, the DGB will be nothing more than a propaganda office.

Craig ReutlingerCharlotte

Budd, the border

What a laugh! Here’s another giant glossy postcard from Ted Budd slamming the Biden administration on the need to “build that wall!” Yes, immigration is a mess, and what Budd and the radical right are pushing about it is a lie. It is Congress that is responsible for changing immigration laws.

As a congressman, Budd should act and stop hounding the administration that inherited the mess.

Nancy C. Bryant, Norwood

Student loans

Student loan forgiveness is a criminal act. It is a crime against bona fide lenders and a crime against all taxpayers. It is a crime to foster a culture of irresponsibility. Cancel my car payment? Probably not. This administration is selling hard-working citizens into ruin.

Larry Guli, Waxhaw

Charlotte Drivers

Here is my “Pedestrian Survival Guide to Crossing the Streets of Charlotte”:

Don’t be fooled by traffic lights that have turned red and crossing signs that are flashing. In the Myers Park, Eastover and Dilworth neighborhoods where I walk, these signals are routinely ignored by motorists who seem to regard pedestrians as obstacles to be tolerated or intimidated.

Given the lack of police presence or camera surveillance, I suggest that when crossing at intersections, pedestrians not only watch traffic lights and crossing signals, but stop for as long as five seconds . Then make direct eye contact with the nearest driver to make sure they see and hopefully offer you the right of way.

I’ve had many close calls and traffic jams from rushed drivers, but these extra precautions have kept me alive so far.

Ron KnapeCharlotte

Inflation

The current problem of deficit and inflation must be solved by Congress and the executive branch, not by the Federal Reserve. It’s about the distribution of money, not about the amount of money – too many tax cuts for the wealthy and not enough government spending on programs that increase incomes for everyone else.

When the Fed raises interest rates, it hurts those who have to borrow money, not those who can pay cash for what they want – homes, electronics, nutritious food, etc. In other words, it stops the good, not the bad, inflation.

Chuck KellyCharlotte

Budget Charlotte

On Monday, Charlotteans will have the opportunity to attend a hearing on the city’s 2023 budget. Budgets are about priorities. Building community resilience to climate change should be high on the list. But what the city is proposing does not take the climate emergency seriously.

Charlotte’s Strategic Energy Action Plan (SEAP) and Sustainable Development Goals were designed to meet this challenge. But how serious is the city when funding to achieve specific goals is not identified? Proper implementation of the SEAP may require twice as much funding as planned, while funding for the Office of Sustainability is about half of what is needed. It is time for citizens to voice their concerns about these red flags in the budget.

Karen HodgesCharlotte

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Entrepreneurs are turning to payment apps to speed up invoicing https://walkonmountain.com/entrepreneurs-are-turning-to-payment-apps-to-speed-up-invoicing/ Tue, 03 May 2022 14:08:17 +0000 https://walkonmountain.com/entrepreneurs-are-turning-to-payment-apps-to-speed-up-invoicing/ Jeff Scalisi, vice president of operations at Livermore, Calif.-based Architectural Glass and Aluminum, had no idea his company’s billing was having issues until a tech solution arrived to fix them. Jeff Scalis Image source: architectural glass and aluminum Scalisi was reluctant to hand over something he believed “needed to be checked by us” when contacted […]]]>

Jeff Scalisi, vice president of operations at Livermore, Calif.-based Architectural Glass and Aluminum, had no idea his company’s billing was having issues until a tech solution arrived to fix them.

Jeff Scalis

Image source: architectural glass and aluminum

Scalisi was reluctant to hand over something he believed “needed to be checked by us” when contacted by a representative of site linea software tool specifically designed to automate the process of invoicing contractors three years ago.

When he learned that site line could keep all of AGA’s insurance documents in one place and seamlessly perform 30, 60 and 90 day invoicing even on smaller projects, he had to try – and now he’s hooked.

“We were doing everything with spreadsheets, Word documents and files on servers,” Scalisi said. “I didn’t even realize how awkward it was.”

Siteline is one of the few financial technology, or fintech, solutions that have sprung up in recent years to handle billing and payment complexities unique to entrepreneurs. Often pioneered by entrepreneurs with family ties to the construction industry – who have seen firsthand how the flow of capital can make or break a business – these technologies track and measure everything from allocation and delivery of materials to financial projections, to compliance with risk management, to keeping projects running. time, on budget and cost effective.

Construction Payment Apps

Invoice pays vendors upfront and offers contractors 120-day payment terms.

BlueTape offers quick access to interest-free credit as well as mobile and online billing and payment.

Brick provides workflow automation and forecasting and a debit card that offers rewards.

Built streamlines the management of lien waiver and electronic payments and simplifies the management of contractors.

ECL software automates and centralizes contracts, quotes, change orders, RFIs, estimates and payroll.

Flexbase the zero rate Visa card offers credit based on future bills rather than personal credit score and tracks receipts and bills.

GCPay automates the payment request process between general contractors and subcontractors.

Level set helps contractors and suppliers manage the payment process, including material financing, electronic payment, financial risk analysis, lien rights and waiver management.

Mobilization funding provides access to capital through contractual loans and purchase order financing.

Rabbet automates and centralizes construction finance for lenders and developers using AI.

“The reality is that most fintech companies have ignored really tough industries like construction,” said Zaid Rahman, founder and CEO of Flexbase, which merges a payment platform with a zero-interest line of credit. in what Rahman hopes to transform construction payments. Stripe reshaped e-commerce and Square redesigned point-of-sale shopping.

“We’re reimagining how money flows in and out of a construction business,” said Rahman, who comes from a family of builders and architects and has heard countless stories around the dinner table about their struggles. cash. “We believe there is an opportunity to create an experience designed for builders by builders.”

Flexbase’s first product is a high-cap, zero-rate business credit card that he described as “in effect, a free float” for 60 days, allowing contractors to purchase materials without tying up their entire capital pending customer payment.

When contractors use the Flexbase card, they also connect to a system that automates the flow of payment documents, including value schedules, lien waivers, notarizations, current wages, insurance and compliance while helping subcontractors follow deadlines.

Gloria Lin and Joel Poloney

Image source: siteline

Construction invoicing has traditionally been a “notoriously complex, manual, paper-based process,” said Siteline founder Gloria Lin, whose father was a civilian contractor. “And the catch is that even though it’s a penny off, if the documents aren’t perfect, they’re sent back to the next payment cycle 30 days later. It can stretch over and over again, and it’s very taxing for trade contractors.

Risk management

Slow payments to general contractors and subcontractors cost industry $136 billion in 2021, up 36% from 2020, annual report says Construction Payments Report from Rabbet, a fintech company serving real estate developers and construction lenders. When asked what they would change in their payment process, many entrepreneurs pointed to the need for automatic, instant, or direct payments.

“Unforeseen uncertainty in the supply chain is forcing contractors, developers and lenders to take a collaborative approach to address price and schedule risks in 2021,” said Will Mitchell, CEO of Rabbet. “The pandemic has further shed light on the challenges of existing processes, and the need for transparency, automation and centralization of construction payment processes has never been greater.”

In its 2021 Construction Cash Flow and Payments Report, Levelset, which offers a suite of software that digitizes payment processing and helps contractors finance materials with extended payment terms, found that 79% construction companies that accept electronic payments get paid faster.

Levelset also helps with risk management by sending alerts when another contractor working on a project has payment issues and monitoring jobs for red flags like mechanics liens so “you can protect yourself and anticipate payments. slow,” said Andrew Dunn, vice president of Levelset. of financial products.

User-friendly

Cloud-based and mobile-friendly, most fintech solutions require very little or no training. The BlueTape payment and finance platform, for example, allows entrepreneurs to make and receive payments on their mobile devices via SMS. They don’t even need to download an app.

“Sometimes when we have initial conversations with contractors they can be skeptical – it sounds too good to be true when we tell them it doesn’t have a big installation or integration element,” said said BlueTape co-founder and CEO Yaser Masoudnia. “But once they try it with a few clients, they love it and immediately adapt it for use with all of their clients.”

Siteline’s Lin, who helped build the prototype of Apple Pay and served as the first product manager for Stripe, and co-founder Joel Poloney, who brought the game to the masses as co-founder and lead developer of Farmville, understood the importance of keeping their solutions “simple”, Lin said.

“It’s easy to use, but it’s also a powerful tool,” Lin said. “We manage a ton of complexity behind the scenes while presenting things in a simple interface to users. Our customers tell us it’s magic.”

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Delaware Bankruptcy Court Ruling Highlights Potential Defenses to Equitable Subordination Claim | Arnall Golden Gregory LLP https://walkonmountain.com/delaware-bankruptcy-court-ruling-highlights-potential-defenses-to-equitable-subordination-claim-arnall-golden-gregory-llp/ Wed, 27 Apr 2022 17:15:48 +0000 https://walkonmountain.com/delaware-bankruptcy-court-ruling-highlights-potential-defenses-to-equitable-subordination-claim-arnall-golden-gregory-llp/ On March 25, 2022, the U.S. Bankruptcy Court for the District of Delaware dismissed a lawsuit filed against a lender and other entities. An individual (and others) who previously controlled the bankrupt companies sued the creditor for equitable subordination of the lender’s claims under 11 USC § 510(c). The plaintiffs asserted that the claims of […]]]>

On March 25, 2022, the U.S. Bankruptcy Court for the District of Delaware dismissed a lawsuit filed against a lender and other entities. An individual (and others) who previously controlled the bankrupt companies sued the creditor for equitable subordination of the lender’s claims under 11 USC § 510(c). The plaintiffs asserted that the claims of the lender (and others acting in concert with the lender) should be subordinated to the payment of the plaintiffs’ claims due to the lender’s unfair “scheme”. The court ruling provides a guide for lenders engaged in relief discussions or, if litigation is filed by a borrower, seeking to dismiss such litigation before the costly discovery process begins.

Facts underlying the equitable subordination claim

In In re Zohar III, Corp., 2022 WL 883325, – BR – (Bankr. D.Del. Mar. 25, 2022), the Debtors (the “Zohar Funds”) were a type of investment vehicle called a “secured loan obligation”. Obligors obtained funds from several classes of noteholders and used them to purchase a portfolio of discounted distressed senior secured loans and to provide high-interest loans to distressed companies (the ” portfolio companies”) in exchange for promises of repayment and equity. positions in portfolio companies. The investment strategy was developed by the principal of the debtors, Lynn Tilton, and she — personally or through other controlled entities — owned the equity in the portfolio companies. Ms. Tilton’s affiliated entities, the patriarch entities, served as collateral managers for the Zohar funds. Ms. Tilton has also established herself as a director and manager or CEO of each of the portfolio companies. The investment plan anticipated that some loans would underperform, but the collective portfolio would generate enough cash flow to repay noteholders the promised principal and interest.

The primary target of the fair subordination suit was MBIA Insurance. MBIA provided financial guarantee insurance to the categories of notes issued by obligors Zohar I and Zohar II. When these Zohar funds defaulted, MBIA paid a total of $919 million to insured Class A noteholders. In 2019, Zohar III also defaulted.

Years of negotiations and litigation preceded the filing for bankruptcy by the Zohar funds. After the bankruptcy petitions were filed, the plaintiffs (Ms. Tilton, the Patriarch Entities, and other related entities) sued MBIA and others to have the claims of the defendants in the bankruptcy cases subordinate to the claims held by the applicants. As summarized by the bankruptcy court in its decision, the plaintiffs’ claims alleged that “MBIA devised a plan to quickly take control and sell the portfolio companies, disregarding Ms. Tilton’s interests and ignoring the decline in value.” which resulted. The amended complaint alleges that the scheme orchestrated by MBIA amounted to years of unfair conduct…. » Zohar, at 4 o’clock.

Elements of the Fair Subordination Claim

In dismissing the complaint, the bankruptcy court first addressed the elements of an equitable subordination cause of action and the different standards applicable to insiders versus non-insiders. The bankruptcy court first recognized that equitable subordination is a “drastic” and “unusual” remedy that should only be applied in limited circumstances. He then determined that to survive the motion to dismiss, the complaint had to sufficiently allege three conditions:

  1. the creditor whose claim is sought to be subordinated must have engaged in some type of unfair conduct;
  2. the fault must have caused injury to the creditors of the bankrupt company or conferred an undue advantage on the plaintiff; and
  3. the equitable subordination of the claim must not be inconsistent with the provisions of the Bankruptcy Act

The Importance of Insider Status vs. Non-Initiate Status

The bankruptcy court noted that there are key differences in considering the sufficiency of causes of action against an insider as opposed to causes of action against a non-insider. In addition to the statutory definition of an insider (including officers and directors), an “insider” under the Bankruptcy Code also includes an entity or person controlling the bankrupt entity. Outside of the legal definition, insider status is inferred when a creditor has a close relationship with the debtor and something other than the close relationship suggests that their transactions were not conducted under fair conditions. full competition. If a creditor (such as a lender) is an insider, a plaintiff may support his claim with evidence of merely unfair or unfair conduct, as transactions between a debtor and an insider are subject to greater scrutiny. If the creditor is a layperson, however, proof of more egregious conduct, such as fraud, is required.

Arguments raised

The main arguments raised by MBIA (and his co-defendants) included that:

  1. the allegations in the complaint did not support the conclusion that they were insiders;
  2. certain issues had already been the subject of litigation in the context of litigation prior to the request;
  3. factually inconsistent allegations were raised in the complaint; and
  4. there were contractual provisions expressly allowing them to take the actions that constituted the alleged inequitable conduct.

Insider Status

An accused named in the Zohar III case was US Bank, which merely served as the indentured trustee for noteholders of the Zohar funds. The bankruptcy court determined that the complaint did not explain “how US Bank possessed the necessary day-to-day control over the Zohar funds, let alone a relationship with them beyond its role as contractual trustee…”. Identifier. At 11 o’clock.

With respect to MBIA and the “controlling class” of the Zohar III fund who allegedly wanted to displace Ms. Tilton’s control of the Zohar funds, the bankruptcy court found that these defendants were “insiders” (and therefore subject to a higher level of control) only after control was wrested from Mrs. Tilton – i.e. after Mrs. Tilton and her patriarchal entities agreed, after litigation in other courts, to step down as collateral manager of the Zohar funds and to be replaced by turnaround experts (Alvarez & Marsal and Zohar Management “AMZM”), and therefore the stricter insider standard only applied at that time .

Factually inconsistent claims that the negotiations had an “illegitimate purpose”

Another category of allegations in the complaint related to MBIA’s negotiations to extend the maturity date of the Zohar I tickets. The bankruptcy court dismissed the plaintiff’s allegations that the negotiations were merely an effort to Mrs. Tilton.

The bankruptcy court said:

Plaintiffs admit that MBIA has repeatedly told Ms. Tilton and her advisors that they support a maturity date extension and global restructuring. Plaintiffs further tell a detailed story of the extensive efforts by all parties to reach an agreement which lasted three years and ended one month before the due date of Zohar I. It is undisputed that final terms for an extension and restructuring were never agreed. From these facts, the plaintiffs ask the Court to infer that MBIA, facing serious financial difficulties, intentionally “threaded [Ms. Tilton] long’ for three years with the false promise of a maturity extension and comprehensive restructuring to cause Zohar I to default and allow it to implement a plan to steal and sell its assets. To arrive at such a conclusion from the facts presented would be unreasonable.

Identifier. to *22 (emphasis added).

Contractual provisions allowing the creditor to take the measures it has taken

The complaint also included allegations that “MBIA had the right under the Trust Indenture to direct that the [Zohar Fund’s] the guarantee is liquidated. Identifier. At 11 o’clock. Further, the bankruptcy court noted, “MBIA and the Zohar III control class do not dispute that they selected AMZM and were able to run it, but argue that they were merely exercising the post-default rights available to them. were conferred under the trust deeds to recover on their claims.” Identifier. to *18. The bankruptcy court reiterated, “The Zohar III control class argues, and plaintiffs do not dispute, that their pre-petition actions were, in fact, authorized by the plain language of the deed.” Identifier. to *19.

The bankruptcy court concluded:

Plaintiffs ask the Court to disregard objective realities (including the contractual rights of the parties and the successful litigation of those rights), arguing that Class Control Zohar III and MBIA (as well as AMZM) acted for a purpose illegitimate – take and sell Mrs. Tilton’s equity for their benefit and to harm her…. But as a general rule, the pursuit of one’s legal rights, including the exercise of contractual rights, may not constitute equitable grounds for subordination even if the rights are exercised harshly and cause injury to other creditors.

Identifier. at *24.

The bankruptcy court found that “history has shown that MBIA and the Zohar Control Class III diligently and successfully enforced (and enforced by the Zohar Funds) their rights under the applicable transaction documents.” Identifier. to *25.

Conclusion

the Zohar The decision provides a number of suggested and potentially fruitful arguments for creditors who are defending against a fair subordination claim and can potentially dismiss such a claim at the litigation stage motion to dismiss. First, and to the greatest extent supported by the facts, creditors should rigorously oppose any effort to label them as insiders and subject their allegedly unfair conduct to a higher level of scrutiny. The decision also demonstrates that if a creditor has negotiated in good faith, but failed to reach an agreement, any argument that the negotiations give rise to an allegation of improper conduct must be vigorously contested. A creditor-defendant should also argue that issues previously addressed in pre-bankruptcy litigation need not be re-litigated. Finally, and perhaps most importantly, the Zohar The decision supports the proposition that a lender may be able to summarily rebut an allegation of inequitable conduct if it can demonstrate that it has exercised its rights consistently under the existing contracts between the parties, because, as recognized by the bankruptcy court, a claim to the contrary may be construed as an attempt to rewrite the terms of the agreements in question, and”[p]The parties have the right to conclude good and bad contracts, the law applies to both. Identifier. (quoting Nemec vs. Shrader991 A.2d 1120, 1126 (Del. 2010)).

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Loan sharks seen hiding at DWP office as they target victims facing higher bills https://walkonmountain.com/loan-sharks-seen-hiding-at-dwp-office-as-they-target-victims-facing-higher-bills/ Sat, 23 Apr 2022 17:08:54 +0000 https://walkonmountain.com/loan-sharks-seen-hiding-at-dwp-office-as-they-target-victims-facing-higher-bills/ Up to a million people turn to illegal moneylenders to pay their bills, despite exorbitant interest rates. Three-quarters of victims receive benefits. Ten years ago, 300,000 loan sharks used People line up to enter a benefits office ( Image: Getty Images) Ruthless loan sharks gather outside welfare offices to capture desperate victims. They were seen […]]]>

Up to a million people turn to illegal moneylenders to pay their bills, despite exorbitant interest rates. Three-quarters of victims receive benefits. Ten years ago, 300,000 loan sharks used

People line up to enter a benefits office

Ruthless loan sharks gather outside welfare offices to capture desperate victims.

They were seen hiding in a Department for Work and Pensions office and even followed a woman home.

Up to a million people turn to illegal moneylenders to pay their bills, despite exorbitant interest rates.

Three-quarters of victims receive benefits. Ten years ago, 300,000 loan sharks used loan sharks. Sylvia Simpson, of Leeds-based debt advice center Money Buddies, said: “They are like vultures. They hang around the DWP offices waiting for people to come out.

“It is a crisis situation. Every day people arrive without food or with ushers knocking on the door.

A woman was followed on a bus from her DWP office in Leeds and then tricked into accepting a £50 loan to buy food.






Sylvia Simpson said loan sharks are ‘like vultures’

She changed her mind and went to a debt counseling center in the city, which repaid the loan.

Ms Simpson told of a client where the loan shark would wait for her child outside the school gate because he was a friend of the family. She said: “The mum had come after him and she was really intimidated. That’s the kind of thing they do.

“You borrow £50 and they come back the following week and ask for £100. It’s getting out of control and people don’t know what to do.

Authorities have retaliated in some cases. This month, 10 investigators from England’s Illegal Money Lending Team, backed by cops, seized £3,000 in cash and papers in Oldbury, West Midlands.

A 47-year-old woman was questioned about illegal money lending and released pending further investigation.

The Center for Social Justice think tank said lenders often pretend to be friends before claiming double the amount a few weeks later. CSJ’s Joe Shalam said growing pressure on household budgets, lack of savings and increasingly limited credit options “are likely to produce a perfect storm” in which people are exploited.

Four in 10 households face energy poverty this autumn, as energy bills already up 54% to nearly £2,000 are set to rise another £600.

The CSJ urges a crackdown on illegal lending, including stepping up EIMLT operations and encouraging more credit unions to help those at risk. He also called on the government to renew its fight against loan sharks.

Read more

Read more

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HERC HOLDINGS INC MANAGEMENT REPORT ON FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q) https://walkonmountain.com/herc-holdings-inc-management-report-on-financial-position-and-results-of-operations-form-10-q/ Thu, 21 Apr 2022 10:35:09 +0000 https://walkonmountain.com/herc-holdings-inc-management-report-on-financial-position-and-results-of-operations-form-10-q/ Management's discussion and analysis of financial condition and results of operations ("MD&A") should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Report, which include additional information about our accounting policies, practices and the transactions underlying our financial results. The preparation of […]]]>
Management's discussion and analysis of financial condition and results of
operations ("MD&A") should be read in conjunction with the unaudited condensed
consolidated financial statements and accompanying notes included in Part I,
Item 1 of this Report, which include additional information about our accounting
policies, practices and the transactions underlying our financial results. The
preparation of our unaudited condensed consolidated financial statements
in conformity with accounting principles generally accepted in the United States
of America ("U.S. GAAP") requires us to make estimates and assumptions that
affect the reported amounts in our unaudited condensed consolidated financial
statements and the accompanying notes including receivables allowances,
depreciation of rental equipment, the recoverability of long-lived assets,
useful lives and impairment of long-lived tangible and intangible assets
including goodwill and trade name, pension and postretirement benefits,
valuation of stock-based compensation, reserves for litigation and other
contingencies, accounting for income taxes and other matters arising during the
normal course of business. We apply our best judgment, our knowledge of existing
facts and circumstances and our knowledge of actions that we may undertake in
the future in determining the estimates that will affect our condensed
consolidated financial statements. We evaluate our estimates on an ongoing basis
using our historical experience, as well as other factors we believe appropriate
under the circumstances, such as current economic conditions, and adjust or
revise our estimates as circumstances change. As future events and their effects
cannot be determined with precision, actual results may differ from these
estimates.

OVERVIEW OF OUR ACTIVITIES AND OPERATING ENVIRONMENT


We are engaged principally in the business of renting equipment. Ancillary to
our principal business of equipment rental, we also sell used rental equipment,
sell new equipment and consumables and offer certain services and support to our
customers. Our profitability is dependent upon a number of factors including the
volume, mix and pricing of rental transactions and the utilization of equipment.
Significant changes in the purchase price or residual values of equipment or
interest rates can have a significant effect on our profitability depending on
our ability to adjust pricing for these changes. Our business requires
significant expenditures for equipment, and consequently we require substantial
liquidity to finance such expenditures. See "Liquidity and Capital Resources"
below.

Our income comes mainly from rents and related charges and consists of:

• Equipment rental (includes all revenue associated with equipment rental, including ancillary revenue from delivery, rental protection programs and refueling fees);

•Sales of rental equipment and sales of new equipment, parts and supplies; and

•Service and other revenue (primarily related to training and labor provided to customers).

Our expenses mainly consist of:


•Direct operating expenses (primarily wages and related benefits, facility costs
and other costs relating to the operation and rental of rental equipment, such
as delivery, maintenance and fuel costs);

•Cost of sales of rental equipment, new equipment, parts and supplies;

• Depreciation allowance relating to rental equipment;

•Selling, general and administrative expenses; and

•Interest charges.

COVID-19 Update


We continue to monitor the ongoing impact of the COVID-19 pandemic, including
the effects of recent notable variants of the virus. The health and safety of
our employees, customers, and the communities in which we operate remains our
top priority. We remain focused on the safety and well-being of our employees,
customers and communities as we maintain a high-level of service to our
customers. We continue to communicate frequently throughout the organization to
reinforce our health and safety guidelines, informed by the Center for Disease
Control recommendations.


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                      HERC HOLDINGS INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT REPORT ON FINANCIAL POSITION AND RESULTS OF OPERATIONS (CONTINUED)


During 2021, customer demand improved as the government rolled out the
distribution of vaccines and lifted COVID-19 related restrictions, which opened
up local economic activity. Demand in 2022 remains strong, however, despite the
recovery we are seeing, the impact of the COVID-19 pandemic continues to evolve
and the economic recovery could be slowed or reversed by a number of factors,
including a widespread resurgence in COVID-19 infections, whether due to the
spread of variants of the virus or otherwise, the rate and efficacy of
vaccinations, labor constraints, the strength of the global supply chain, and
government actions. We cannot predict the extent to which our financial
condition, results of operations or cash flows will ultimately be impacted,
however, we believe we are well-positioned to operate effectively through the
present environment.

Seasonality

Our business is usually seasonal, with demand for our rental equipment tending
to be lower in the winter months, particularly in the northern United States and
Canada. Our equipment rental business, especially in the construction industry,
has historically experienced decreased levels of business from December until
late spring and heightened activity during our third and fourth quarters until
December. We have the ability to manage certain costs to meet market demand,
such as fleet capacity, the most significant portion of our cost structure. For
instance, to accommodate increased demand, we increase our available fleet and
staff during the second and third quarters of the year. A number of our other
major operating costs vary directly with revenues or transaction volumes;
however, certain operating expenses, including rent, insurance and
administrative overhead, remain fixed and cannot be adjusted for seasonal
demand, typically resulting in higher profitability in periods when our revenues
are higher, and lower profitability in periods when our revenues are lower. To
reduce the impact of seasonality, we are focused on expanding our customer base
through products that serve different industries with less seasonality and
different business cycles.

RESULTS OF OPERATIONS

                                                                            Three Months Ended March 31,
($ in millions)                                             2022                 2021           $ Change            % Change
Equipment rental                                     $    526.8               $ 400.4          $  126.4                  31.6  %
Sales of rental equipment                                  27.7                  44.2             (16.5)                (37.3)
Sales of new equipment, parts and supplies                  7.7                   6.1               1.6                  26.2
Service and other revenue                                   5.1                   3.1               2.0                  64.5
Total revenues                                            567.3                 453.8             113.5                  25.0
Direct operating                                          246.2                 183.0              63.2                  34.5
Depreciation of rental equipment                          119.3                 100.4              18.9                  18.8
Cost of sales of rental equipment                          18.5                  38.4             (19.9)                (51.8)
Cost of sales of new equipment, parts and supplies          5.3                   4.2               1.1                  26.2
Selling, general and administrative                        89.4                  65.5              23.9                  36.5

Interest expense, net                                      22.5                  21.4               1.1                   5.1
Other expense (income), net                                (1.0)                 (0.2)             (0.8)                      NM
Income before income taxes                                 67.1                  41.1              26.0                  63.3
Income tax provision                                       (8.6)                 (8.2)             (0.4)                  4.9
Net income                                           $     58.5               $  32.9          $   25.6                  77.8  %


NM - Not Meaningful

Three months completed March 31, 2022 Compared to the three months ended March 31, 2021


Equipment rental revenue increased $126.4 million, or 31.6%, during the first
quarter of 2022 when compared to the first quarter of 2021 primarily due to
higher volume of equipment on rent of 29.0% and positive pricing of 4.3% during
the first quarter of 2022 over the same period in the prior year.

Sales of rental equipment decreased $16.5 million, or 37.3%, during the first
quarter of 2022 when compared to the first quarter of 2021. During the first
quarter of 2022, the decline in volume of sales was related to the increase in
utilization and the
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                      HERC HOLDINGS INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT REPORT ON FINANCIAL POSITION AND RESULTS OF OPERATIONS (CONTINUED)


strategic management of our rental equipment to maximize fleet size as part of
our long-term strategy. The margin on sales of rental equipment was 33.2% in
2022 compared to 13.1% in 2021. The increase in margin on sale of rental
equipment in 2022 was due to a larger proportion of overall volume of sales
through higher margin sales channels and better pricing due to the overall
strong market for used equipment.

Direct operating expenses in the first quarter of 2022 increased $63.2 million,
or 34.5%, when compared to the first quarter of 2021 primarily related to
increases in (i) personnel-related expenses of $26.8 million primarily resulting
from increased headcount and increased payroll and benefits, (ii) fleet related
expenses including fuel and maintenance expense of $18.0 million related to our
increased fleet size and higher average fuel prices in 2022, (iii) re-rent
expense of $6.5 million due to the corresponding increase in re-rent revenue,
(iv) facilities expense of $4.5 million as we have added more locations through
acquisitions and opening greenfield locations.

Depreciation of rental equipment increased $18.9 millionor 18.8%, in the first quarter of 2022 compared to the first quarter of 2021 due to the increase in average fleet size.


Selling, general and administrative expenses increased $23.9 million, or 36.5%,
in the first quarter of 2022 when compared to the first quarter of 2021. The
increase was primarily due to selling expense, including commissions and other
variable compensation increases, of $11.5 million and general payroll and
benefits of $4.1 million. Travel expense also increased by $3.2 million.

Interest expense, net increased $1.1 million, or 5.1%, during the first quarter
of 2022 when compared with the same period in 2021 due to higher average
outstanding balances and slightly higher weighted average interest rates on the
ABL Credit Facility and AR Facility.

Income tax provision was $8.6 million during the first quarter of 2022 compared
to $8.2 million in 2021. The provision in each period was driven by the level of
pre-tax income, offset primarily by a benefit related to stock-based
compensation of $8.1 million and $2.5 million for three months ended March 31,
2022 and 2021, respectively, and non-deductible expenses.

CASH AND CAPITAL RESOURCES


Our primary liquidity needs include the payment of operating expenses, purchases
of rental equipment to be used in our operations, servicing of debt, funding
acquisitions and payment of dividends. Our primary sources of funding are
operating cash flows, cash received from the disposal of equipment and
borrowings under our debt arrangements. As of March 31, 2022, we had
approximately $2.2 billion of total nominal indebtedness outstanding.

Our liquidity as of March 31, 2022 consisted of cash and cash equivalents of
$22.8 million and unused commitments of approximately $1.1 billion under our ABL
Credit Facility. See "Borrowing Capacity and Availability" below for further
discussion. Our practice is to maintain sufficient liquidity through cash from
operations, our ABL Credit Facility and our AR Facility to mitigate the impacts
of any adverse financial market conditions on our operations. We believe that
cash generated from operations and cash received from the disposal of equipment,
together with amounts available under the ABL Credit Facility and the AR
Facility or other financing arrangements will be sufficient to meet working
capital requirements and anticipated capital expenditures, and other strategic
uses of cash, if any, and debt payments, if any, over the next twelve months.

Cash flow


Significant factors driving our liquidity position include cash flows generated
from operating activities and capital expenditures. Historically, we have
generated and expect to continue to generate positive cash flow from operations.
Our ability to fund our capital needs will be affected by our ongoing ability to
generate cash from operations and access to capital markets.
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                      HERC HOLDINGS INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT REPORT ON FINANCIAL POSITION AND RESULTS OF OPERATIONS (CONTINUED)



The following table summarizes the change in cash and cash equivalents for the
periods shown (in millions):
                                                   Three Months Ended March 31,
                                                 2022              2021        $ Change
Cash provided by (used in):
Operating activities                      $    143.0             $ 134.7      $    8.3
Investing activities                          (346.7)              (62.2)       (284.5)
Financing activities                           191.4               (72.8)        264.2
Effect of exchange rate changes                    -                 0.2    

(0.2)

Net change in cash and cash equivalents   $    (12.3)            $  (0.1)     $  (12.2)



Operating Activities

During the three months ended March 31, 2022, we generated $8.3 million more
cash from operating activities compared with the same period in 2021. The
increase was related to improved operating results primarily resulting from
higher revenues coupled with continued cost control measures, partially offset
by the timing of payments on accounts payable as compared to the same period in
2021.

Investing Activities

Cash used in investing activities increased $284.5 million during the three
months ended March 31, 2022 when compared with the prior-year period. Our
primary use of cash in investing activities is for the acquisition of rental
equipment, non-rental capital expenditures and acquisitions. Generally, we
rotate our equipment and manage our fleet of rental equipment in line with
customer demand and continue to invest in our information technology, service
vehicles and facilities. Changes in our net capital expenditures are described
in more detail in the "Capital Expenditures" section below. Additionally, we
closed on three acquisitions during the three months ended March 31, 2022 for a
net cash outflow of $73.0 million.

Fundraising activities


Cash provided by financing activities increased $264.2 million during the three
months ended March 31, 2022 when compared with the prior-year period. Financing
activities primarily represents our changes in debt, which included net
borrowings of $226.6 million on our revolving lines of credit and
securitization, which were used primarily to fund acquisitions during the
period. Net repayments in the prior year period were $65.0 million.

In order to reduce future cash interest payments, as well as future amounts due
at maturity or upon redemption, we may from time to time repurchase our debt,
including our notes, bonds, loans or other indebtedness, in privately
negotiated, open market or other transactions and upon such terms and at such
prices as we may determine. We will evaluate any such transactions in light of
then-existing market conditions, taking into account our current liquidity and
prospects for future access to capital. The repurchases may be material and
could relate to a substantial proportion of a particular class or series, which
could reduce the trading liquidity of such class or series.
Capital Expenditures

Our capital expenditures relate largely to purchases of rental equipment, with
the remaining portion representing purchases of property, equipment and
information technology. The table below sets forth the capital expenditures
related to our rental equipment and related disposals for the periods noted (in
millions).
                                                     Three Months Ended March 31,
                                                           2022                     2021
Rental equipment expenditures                $          286.8                     $ 90.9
Disposals of rental equipment                           (28.8)                     (40.3)
    Net rental equipment expenditures        $          258.0                     $ 50.6


                                       24

————————————————– ——————————

Contents

                      HERC HOLDINGS INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT REPORT ON FINANCIAL POSITION AND RESULTS OF OPERATIONS (CONTINUED)


Net capital expenditures for rental equipment increased $207.4 million during
the three months ended March 31, 2022 compared to the same period in 2021 as we
manage our fleet by continuing to invest in our fleet in high growth markets as
part of our long-term capital expenditure plans and manage disposals to respond
to a tightening market.

Borrowing capacity and availability


Our ABL Credit Facility and AR Facility (together, the "Facilities") provide our
borrowing capacity and availability. Creditors under the Facilities have a claim
on specific pools of assets as collateral as identified in each credit
agreement. Our ability to borrow under the Facilities is a function of, among
other things, the value of the assets in the relevant collateral pool. We refer
to the amount of debt we can borrow given a certain pool of assets as the
"Borrowing Base."

The accounts receivable and other assets of the SPE are encumbered in favor of
the lenders under our AR Facility. The SPE assets are owned by the SPE and are
not available to settle the obligations of the Company or any of its other
subsidiaries. Substantially all of the remaining assets of Herc and certain of
its U.S. and Canadian subsidiaries are encumbered in favor of our lenders under
our ABL Credit Facility. None of such assets are available to satisfy the claims
of our general creditors. See Note 11, "Debt" to the notes to our consolidated
financial statements included in Part II, Item 8 "Financial Statements" included
in our Annual Report on Form 10-K for the year ended December 31, 2021, and Note
8, "Debt" included in Part I, Item 1 "Financial Statements" of this Report for
more information.

With respect to the Facilities, we refer to "Remaining Capacity" as the maximum
principal amount of debt permitted to be outstanding under the Facilities
(i.e., the amount of debt we could borrow assuming we possessed sufficient
assets as collateral) less the principal amount of debt then-outstanding under
the Facility. We refer to "Availability Under Borrowing Base Limitation" as the
lower of Remaining Capacity or the Borrowing Base less the principal amount of
debt then-outstanding under the Facility (i.e., the amount of debt we could
borrow given the collateral we possess at such time).

From March 31, 2022we had the following items (in millions):

                                                        Availability Under
                                         Remaining        Borrowing Base
                                         Capacity           Limitation
                ABL Credit Facility     $ 1,066.8      $          1,066.8
                AR Facility                     -                       -
                Total                   $ 1,066.8      $          1,066.8



As of March 31, 2022, $24.8 million of standby letters of credit were issued and
outstanding under the ABL Credit Facility, none of which have been drawn upon.
The ABL Credit Facility had $225.2 million available under the letter of credit
facility sublimit, subject to borrowing base restrictions.

pacts


Our ABL Credit Facility, our AR Facility and our 2027 Notes contain a number of
covenants that, among other things, limit or restrict our ability to dispose of
assets, incur additional indebtedness, incur guarantee obligations, prepay
certain indebtedness, make certain restricted payments (including paying
dividends, redeeming stock or making other distributions), create liens, make
investments, make acquisitions, engage in mergers, fundamentally change the
nature of our business, make capital expenditures, or engage in certain
transactions with certain affiliates.

Under the terms of our ABL Credit Facility, our AR Facility and our 2027 Notes,
we are not subject to ongoing financial maintenance covenants; however, under
the ABL Credit Facility, failure to maintain certain levels of liquidity will
subject us to a contractually specified fixed charge coverage ratio of not less
than 1:1 for the four quarters most recently ended. As of March 31, 2022, the
appropriate levels of liquidity have been maintained, therefore this financial
maintenance covenant is not applicable.

Additional information on the terms of our 2027 Notes, ABL Credit Facility and
AR Facility is included in Note 11, "Debt" to the notes to our consolidated
financial statements included in Part II, Item 8 "Financial Statements" included
in our Annual
                                       25

————————————————– ——————————

Contents

                      HERC HOLDINGS INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT REPORT ON FINANCIAL POSITION AND RESULTS OF OPERATIONS (CONTINUED)


Report on Form 10-K for the year ended December 31, 2021. For a discussion of
the risks associated with our indebtedness, see Part I, Item 1A "Risk Factors"
contained in our Annual Report on Form 10-K for the year ended December 31,
2021.

Dividends


On February 8, 2022, the Company declared a quarterly dividend of $0.575 per
share to record holders as of February 23, 2022, with payment date of March 10,
2022. The declaration of dividends on our common stock is discretionary and will
be determined by our board of directors in its sole discretion and will depend
on our business conditions, financial condition, earnings, liquidity and capital
requirements, contractual restrictions and other factors. The amounts available
to pay cash dividends are restricted by our debt agreements.

OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS


As of March 31, 2022, there have been no material changes to our indemnification
obligations as disclosed in Note 17, "Commitments and Contingencies" in our
Annual Report on Form 10-K for the year ended December 31, 2021. For further
information, see the discussion on indemnification obligations included in Note
12, "Commitments and Contingencies" in Part I, Item 1 "Financial Statements" of
this Report.

For information regarding contingencies, see Note 12, “Commitments and Contingencies” in Part I, Item 1 “Financial Statements” of this Report.

RECENT ACCOUNTING PRONOUNCEMENTS

For a discussion of recent accounting pronouncements, see Note 2, “Basis of presentation and significant accounting policies” in Part I, Item 1 “Financial statements” of this report.

© Edgar Online, source Previews

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Why Tax Refund Loans Are Bad: Fees, Interest, and Risk https://walkonmountain.com/why-tax-refund-loans-are-bad-fees-interest-and-risk/ Sat, 16 Apr 2022 15:54:49 +0000 https://walkonmountain.com/why-tax-refund-loans-are-bad-fees-interest-and-risk/ Last-minute declarants endeavor to send their declarations to the Internal Revenue Service by the 2021 tax year deadline on Monday, April 18 — and are likely looking forward to a big check via their tax refund. Some tax firms or other lenders may offer the option of accessing these funds earlier, in the form of […]]]>

Last-minute declarants endeavor to send their declarations to the Internal Revenue Service by the 2021 tax year deadline on Monday, April 18 — and are likely looking forward to a big check via their tax refund.

Some tax firms or other lenders may offer the option of accessing these funds earlier, in the form of a tax refund loanalso known as a repayment anticipation loan.

Regulatory bodies and advocacy groups warned of the potential drawbacks of loans, especially those that come with high fees or high interest rates. Personal finance experts generally do not recommend them.

Here’s what you need to know about loans this tax season.

What is a tax-free loan?

A tax refund loan is, quite simply, an advance on your tax refund, said Matt Schulz, chief credit analyst at LendingTree.

It’s a way to borrow against your tax refund to access funds immediately: borrow the amount from a lender and give them the refund when you get it from the IRS.

“Unlike a lot of loans, it’s not necessarily something you’re looking for,” Schulz said.

Tax refund loans are usually offered by a tax preparation company, Schulz said. You will not find them in your bank.

What are the advantages and disadvantages?

The advantage of a repayment anticipation loan is quite simple: you have immediate access to your repayment amount, instead of waiting for the days or weeks it may take to obtain the funds from the IRS.

The wrong side? “It can end up costing you money,” Schulz said, in the form of interest or fees.

Some tax firms will offer you a tax refund loan at no cost, Schulz said. But, you will have to pay the company to do your taxes for you.

“Even with a 0% loan, there will always be a minimum that you will pay to prepare your taxes,” he said. “So if you’re someone who’s already planning to do your taxes, maybe it’s not that bad.”

Teresa Murray, director of the US Public Interest Research Group’s consumer watchdog office, says the cost may outweigh the benefits.

“We really urge people to avoid any type of prepayment anticipation loan,” she said. “Anything you borrow against a refund you haven’t gotten yet…it’s just bad news written all over the place.”

the North Carolina Consumer Council warns “think again” to anyone considering a loan against their tax refund.

“While getting a tax refund advance may seem tempting, these loans are actually payday loans for tax returns, and you should avoid them as much as possible,” according to advice from the council on its website. . “The full amount must be repaid, as with any other loan, even if your repayment is less than expected or ends up not being repaid at all.”

When can I expect to get my refund?

IRS issues more than nine out of 10 refunds in less than three weeks, according to its website. Taxpayers who filed their returns electronically will get their refund faster than those who mailed their tax forms.

And the department is handing out refunds faster and faster, Murray said. Now, some e-filers can expect to see the funds in their bank account within days.

“If you file electronically, you can get your money typically in four to six days,” she said.

North Carolina taxpayers may get their state tax refunds slower, but the upside is that a delay in accepting returns this year was due to a legislative reduction in the individual tax rate.

Should I consider a tax-free loan?

Schulz said if you really need the money — and read the terms carefully — a tax refund loan can be an alternative to riskier ways to fill your bank account.

“Emergencies happen: job loss, medical emergencies, whatever the case,” he said. “(In that case), there are worse things you could do than a tax refund.”

And assuming you’ve done your taxes correctly, he said, a tax refund loan is a secured loan, with your actual refund serving as collateral. This makes it much less risky than, say, an unsecured payday loan with an exorbitant interest rate.

Murray, on the other hand, cautions against lending under any circumstances. She suggests holding on until you get your refund, especially since it might not take very long if you filed electronically and set up direct deposit.

“If you’re short on money…find a friend or relative to borrow money from for a few days,” she said. “Don’t go the prepayment loan route because they’re just ridiculously expensive…you’re paying for your own money.”

As this year’s tax filing season ends without the threat of a government shutdown going forward, that could make these loans even riskier, according to the North Carolina Consumers Council.

“Frequent federal government shutdowns could make these types of loans more attractive if you want to get your money back quickly, which can complicate things. Remember that a delay in getting your repayment will not be considered by the lender and will not release you from any obligation to repay the loan on time,” its website states.

Schulz added that major tax firms — like H&R Block or Jackson Hewitt — only accept applications for tax refund loans during a certain period, often between December and February. So, for these filers, the loan application window may already be closed.

And Murray had another piece of advice for any registrants who haven’t signed up yet: start early next year.

“When you’re in a rush, you’re more likely to not pay attention,” she said. “Any time you have the words ‘not careful’ and ‘IRS’ in the same sentence, that’s not a good thing.”

This story was originally published April 15, 2022 8:36 a.m.

Charlotte Observer Related Stories

Hannah Lang covers banking and economics equity for The Charlotte Observer. She studied business journalism at the University of North Carolina at Chapel Hill and grew up in the same town as her alma mater.

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Texas Plant’s Ch. 11 has no obvious purpose, Judge Del said. https://walkonmountain.com/texas-plants-ch-11-has-no-obvious-purpose-judge-del-said/ Thu, 14 Apr 2022 01:02:00 +0000 https://walkonmountain.com/texas-plants-ch-11-has-no-obvious-purpose-judge-del-said/ By Jeff Montgomery (April 13, 2022, 9:02 p.m. EDT) — West Texas power producer Ector County Energy Center LLC’s largest unsecured creditor filed the power plant’s Chapter 11 case on Wednesday. Electric by telling a Delaware bankruptcy judge that the debtor had “no obvious reorganization goals” when filing for bankruptcy. Benjamin I. Finestone of Quinn […]]]>
By Jeff Montgomery (April 13, 2022, 9:02 p.m. EDT) — West Texas power producer Ector County Energy Center LLC’s largest unsecured creditor filed the power plant’s Chapter 11 case on Wednesday. Electric by telling a Delaware bankruptcy judge that the debtor had “no obvious reorganization goals” when filing for bankruptcy.

Benjamin I. Finestone of Quinn Emanuel Urquhart & Sullivan LLP, an attorney for Direct Energy Business Marketing LLC, told U.S. Bankruptcy Judge John T. Dorsey that Ector’s case was initiated primarily for the benefit of its parent company, Invenergy Clean Power LLC.

The 330-megawatt plant outside Odessa, Texas, filed for Chapter 11 protection on Tuesday, citing more than $400 million in secured and revolving debt and…

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Sinclair Reports Preliminary First Quarter 2022 Earnings for Select Segments and Announces First Quarter 2022 Earnings Call https://walkonmountain.com/sinclair-reports-preliminary-first-quarter-2022-earnings-for-select-segments-and-announces-first-quarter-2022-earnings-call/ Mon, 11 Apr 2022 18:00:00 +0000 https://walkonmountain.com/sinclair-reports-preliminary-first-quarter-2022-earnings-for-select-segments-and-announces-first-quarter-2022-earnings-call/ Sinclair to Report First Quarter 2022 Results May 4, 2022 at 7:30 a.m. EST BALTIMORE, April 11, 2022–(BUSINESS WIRE)–Sinclair Broadcast Group, Inc. (Nasdaq: SBGI), the “Company” or “Sinclair”, today released preliminary media revenue results for its Broadcast segment and for Other/Enterprise/Eliminations for three months ended March 31, 2022 Preliminary results, which exclude the Home Sports […]]]>

Sinclair to Report First Quarter 2022 Results May 4, 2022 at 7:30 a.m. EST

BALTIMORE, April 11, 2022–(BUSINESS WIRE)–Sinclair Broadcast Group, Inc. (Nasdaq: SBGI), the “Company” or “Sinclair”, today released preliminary media revenue results for its Broadcast segment and for Other/Enterprise/Eliminations for three months ended March 31, 2022 Preliminary results, which exclude the Home Sports segment, are provided as supplemental information to lenders evaluating a debt refinancing of Sinclair Television Group, Inc. (STG) launched on April 6, 2022.

Media revenue for the broadcast segment is expected to be within the range of prior guidance released on February 23, 2022, of $709 million to $725 million, which included $28 million in revenue for services provided by the segment. broadcast to the local sports segment. Media revenue for other/business/elimination is expected to reach the $66 million forecast, which included the elimination of $28 million in revenue for services provided by the broadcast segment to the local sports segment.

The preliminary results described in this press release are estimates only and are subject to revision. The company will release its full first quarter 2022 results at 7:30 a.m. ET on Wednesday, May 4, 2022, followed by a conference call to discuss the results at 9:00 a.m. ET. The call will be webcast live and accessible at www.sbgi.net below “Investors/ Webcasts.” The dial-in number for the earnings call is 888-506-0062, with entry code 976184.

If you plan to participate in the conference call, please call two minutes before the start time and tell the conference operator that the subject of the conference call is the “Sinclair Earnings Conference Call”.

If you are unable to listen to the live webcast or participate in the live conference call, a replay of the call and the release of the results will be available on the Sinclair Broadcast Group website at www.sbgi.net. This will be the only location through which a replay will be available.

Members of the news media will be welcome on the call in listen-only mode. Key executives will be made available to members of the news media, time permitting, following the conference call.

Sinclair Broadcast Group, Inc. is a diversified media company and a leading provider of sports and local news. The Company owns and/or operates 21 regional sports network brands; owns, operates and/or provides services to 185 television stations in 86 markets, owns several national networks, including Tennis Channel and Stadium; and has television stations affiliated with all major broadcast networks. Sinclair’s content is distributed through multiple platforms, including live multi-channel video program distributors and digital and streaming platforms NewsOn and STIRR. The Company regularly uses its website as a key source of information about the Company, which can be accessed at www.sbgi.net.

Forward-looking statements:

Matters discussed in this press release include forward-looking statements regarding, among other things, future events and actions. When used in this press release, the words “outlook”, “intends”, “believes”, “anticipates”, “expects”, “achieves”, “estimates” and the expressions similar statements are intended to identify forward-looking statements. These statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements due to a variety of important factors, including and in addition to the assumptions set forth herein, but not limited to, the potential impacts of COVID-19. pandemic of January 19 on our business operations, financial results and financial condition as well as on the global economy, including the significant disruption of operations of professional sports leagues, the need to offer discounts to our distributors related to sporting events canceled professionals and loss of advertising revenue due to the postponement or cancellation of professional sporting events and reduced consumer spending due to shelter-in-place and stay-at-home orders; our ability to generate cash to service our substantial indebtedness; proper execution of outsourcing agreements; the successful execution of retransmission consent agreements; the proper performance of affiliation and network distribution agreements; the successful execution of media rights agreements with professional sports teams; the impact of OTT and other emerging technologies and their potential impact on cord-cutting; the impact of distributors offering “skinny” programming packages that may not include all of our networks’ programming; prices and fluctuations in demand in local and national advertising; the successful implementation and consumer adoption of our direct-to-consumer sports platform; the volatility of programming costs; market acceptance of new programming; our ability to identify and complete acquisitions and investments, manage increased leverage resulting from acquisitions and investments, and earn anticipated returns on such investments when made; the impact of pending and future litigation against the Company; the ongoing assessment of the October cybersecurity event, the significant legal, financial and reputational risks resulting from a breach of the Company’s information systems and operational disruptions due to the cybersecurity event; the impact of FCC and other regulatory proceedings against the Company, uncertainties associated with potential changes in the regulatory environment affecting our business and our growth strategy, and any risk factors disclosed in the Company’s recent reports on Form 10-Q and/or Form 10-K, as filed with the Securities and Exchange Commission. There can be no assurance that the assumptions and other factors mentioned in this press release will occur. The Company undertakes no obligation to release the outcome of any revisions to these forward-looking statements, except as required by law.

See the source version on businesswire.com: https://www.businesswire.com/news/home/20220411005804/en/

contacts

Investor contacts:
Steve Zenker, Vice President, Investor Relations
Billie-Jo McIntire, Director, Investor Relations
(410) 568-1500

Media Contact:
Michael Padovano
Sinclair@5wpr.com

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