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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
August 8, 2023
Journey Medical Corporation
(Exact Name of Registrant as Specified in Charter)
Delaware | |
001-41063 | |
47-1879539 |
(State or Other Jurisdiction of Incorporation) | |
(Commission File Number) | |
(IRS
Employer Identification No.) |
9237 E Via de Ventura Blvd., Suite 105
Scottsdale, AZ 85258
(Address of Principal Executive Offices)
(480) 434-6670
(Registrant’s telephone number, including
area code)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications
pursuant to Rule 425 under the Securities Act.
¨ Soliciting material pursuant
to Rule 14a-12 under the Exchange Act.
¨ Pre-commencement communications
pursuant to Rule 14d-2b under the Exchange Act.
¨ Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act.
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Stock |
DERM |
Nasdaq Capital Market |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter). x
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
| Item 2.02. | Results of Operations and Financial Condition. |
On August 8, 2023, Journey
Medical Corporation (the “Company” or “Journey”) issued a press release to provide a corporate update and to announce
its financial results for the three months ended June 30, 2023. A copy of such press release is being furnished as Exhibit 99.1 to this
report.
The information, including
Exhibit 99.1, in this Form 8-K is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Form 8-K shall not
be incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall otherwise be expressly set
forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are furnished herewith:
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
Journey Medical Corporation |
|
(Registrant) |
|
|
|
|
Date: August 8, 2023 |
|
|
By: |
/s/ Claude Maraoui |
|
|
Claude Maraoui |
|
|
Chief Executive Officer, President and Director |
Exhibit 99.1
Journey Medical Corporation Reports Second Quarter
2023 Financial Results and Recent Corporate Highlights
The Company generated
total net revenues of $17.2 million in the second quarter of 2023, a 41% increase from $12.2 million in the first quarter of 2023
Announced positive
topline results from two Phase 3 clinical trials evaluating DFD-29 (minocycline hydrochloride modified release capsules, 40mg); both trials
achieved the co-primary and all secondary endpoints over placebo and the current standard of care Oracea® (doxycycline, 40mg) with
no significant safety issues
The Company plans to
submit a New Drug Application to FDA for DFD-29 in the second half of 2023
Company to hold conference
call today at 4:30 p.m. ET
Scottsdale, AZ – August 8, 2023
– Journey Medical Corporation (Nasdaq: DERM) (“Journey Medical” or “the Company”), a commercial-stage pharmaceutical
company that primarily focuses on the selling and marketing of U.S. Food and Drug Administration (“FDA”) approved prescription
pharmaceutical products for the treatment of dermatological conditions, today announced financial results and recent corporate highlights
for the second quarter ended June 30, 2023.
Claude Maraoui, Journey Medical’s Co-Founder,
President and Chief Executive Officer, said, “In the second quarter of 2023, our total net revenues were $17.2 million, a 41% increase
from $12.2 million in the first quarter. We are also extremely pleased with the positive topline results from our two Phase 3 clinical
trials evaluating DFD-29 for the treatment of papulopustular rosacea (“PPR”). We expect to submit a New Drug Application (“NDA”)
to the FDA for DFD-29 in the second half of 2023 and look forward to continued revenue growth during the remainder of this year.”
Neal Bhatia, M.D., Director
of Clinical Dermatology at Therapeutics Clinical Research, San Diego, CA and investigator from the DFD-29 Phase 3 clinical trials, stated,
“DFD-29, a low dose oral minocycline, has demonstrated superior efficacy to Oracea®
40 mg, in the Phase 3 clinical trials in patients with papulopustular rosacea. If approved, these results are likely to position DFD-29
as a well-differentiated therapeutic in the dermatologist’s armamentarium for this indication. Patients with rosacea feel the need
for a safe and highly effective oral treatment to avoid the local irritation from topical treatments. Dermatologists will be at ease
using the lowest dose minocycline available, for the longer term given its potential for improved safety and the sub antimicrobial
data.”
Journey Medical’s
Vice President of R&D, Srinivas Sidgiddi, M.D., who has led this development program from inception, added, “Both Phase 3 trials
achieved their co-primary and all secondary endpoints, and DFD-29 demonstrated statistical superiority over both placebo and the current
standard of care, Oracea 40 mg. These results demonstrate the potential for DFD-29, if approved, to be the best-in-class systemic therapy
in the treatment of rosacea. DFD-29 has the potential to address the large unmet need for safe and efficacious therapies that address
the inflammatory lesions and the redness of rosacea.”
Financial Results:
| • | Total net revenues in the second quarter of 2023 were $17.2 million, a decrease of $1.1 million compared
to the second quarter of 2022. The decrease is primarily due to lower unit volumes from the Company’s legacy products, Targadox®,
Ximino® and Exelderm® substantially driven by continued generic competition for Targadox. The results were
offset by an increase in net product revenues from the Company’s four core products, Qbrexza®, Accutane®,
Amzeeq® and Zilxi® due to increased unit volumes as a result of the Company’s focused sales and marketing
emphasis on these products, which lead to 19% growth year-over-year and now reflect approximately 92%, or $15.6 million, of the Company’s
total net product revenue for second quarter of 2023. |
| • | Selling, general and administrative expenses (“SG&A”) decreased by $3.0 million, or 20%,
to $12.1 million for the second quarter 2023, from $15.2 million for the second quarter 2022. The decrease is mainly attributable to the
Company’s expense reduction efforts, primarily in sales and marketing and other SG&A areas. During Q4 2022, the Company implemented
a cost reduction initiative designed to improve operational efficiencies, optimize expenses and reduce overall costs. The initiative is
intended to reduce SG&A expenses to better align costs with revenues being generated. In connection with the cost reduction initiative,
the Company pivoted to focus on its four core products, allowing it to minimize overall headcount including its sales force along with
implemented marketing and other cost cuts. The impact of the cost reduction initiatives is expected to result in a reduction of greater
than $12.0 million of annual SG&A expenses. |
| | |
| • | Research and Development (“R&D”) expenses decreased by $0.8 million, or 32%, to $1.8 million
for the second quarter 2023, from $2.6 million for second quarter 2022. The decrease is related to lower clinical trial expenses, as the
two Phase 3 studies have concluded. |
| | |
| • | The Company recorded a non-cash loss on the impairment of the Ximino intangible asset of $3.1 million
in the second quarter 2023. During the six months ended June 30, 2023, the Company experienced lower net product revenues and gross
profit levels for its Ximino product. |
| | |
| • | GAAP net loss was $8.4 million, or $0.46 per share basic and diluted, for the second quarter of 2023,
compared to a GAAP net loss of $10.1 million, or $0.57 per share basic and diluted, for the first quarter of 2023 and $7.5 million, or
$0.43 per share basic and diluted, for the second quarter of 2022. |
| | |
| • | The Company’s non-GAAP results in the table below reflect Adjusted EBITDA of $(0.6 million), or
$(0.04) per share basic and diluted, for the second quarter of 2023, compared to Adjusted EBITDA of $(5.3 million), or $(0.30) per share
basic and diluted, for the first quarter of 2023 and Adjusted EBITDA of $(2.6 million), or $(0.15) per share basic and diluted for the
second quarter of 2022. Adjusted EBITDA, Adjusted EBITDA per share basic and diluted are non-GAAP financial measures, each of which are
reconciled to the most directly comparable financial measures calculated in accordance with GAAP below under “Use of Non-GAAP
Measures.” |
| | |
| • | At June 30, 2023, the Company had $17.0 million in cash and cash equivalents including $8.75 million
of restricted cash as compared to $26.1 million of cash and cash equivalents and $8.75 million of restricted cash at March 31, 2023
and $32.0 million in cash and cash equivalents as of December 31, 2022. The decrease in cash from the first quarter was primarily
a result of $13.0 million in repayments on our EWB debt facility. Subsequently, in July 2023, the Company voluntarily paid-off the
entire $10.0 million outstanding EWB term loan. The Company no longer has any outstanding bank debt. |
Recent Corporate Highlights:
| • | In July 2023, Journey Medical announced positive topline data from its two DFD-29 Phase 3 clinical
trials for the treatment of PPR. The Phase 3 clinical trials achieved the co-primary and all secondary endpoints and subjects completed
the 16-week treatment with no significant safety issues. DFD-29 demonstrated statistical superiority over both the standard of care Oracea
capsules and placebo for Investigator’s Global Assessment treatment success and the reduction in the total inflammatory lesion count
in both studies. Journey Medical plans to file an NDA to the U.S. Food and Drug Administration for DFD-29 in the second half of 2023 and
expects potential approval from the FDA in the second half of 2024. |
Summary Topline Results from MVOR-1
and MVOR-2
| |
MVOR-1 | | |
MVOR-2 | |
| |
IGA Success
at Week 16 | | |
Inflammatory
Lesion Change at
Week 16 | | |
IGA Success
at Week 16 | | |
Inflammatory
Lesion Change at
Week 16 | |
DFD-29 (40 mg) | |
| 65.0 | % | |
| -21.3 | | |
| 60.1 | % | |
| -18.4 | |
Oracea (40 mg) | |
| 46.1 | % | |
| -15.9 | | |
| 31.4 | % | |
| -14.9 | |
Placebo | |
| 31.2 | % | |
| -12.2 | | |
| 26.8 | % | |
| -11.1 | |
P-value: DFD-29 versus Oracea | |
| P=0.014 | | |
| P<0.001 | | |
| P<0.001 | | |
| P<0.001 | |
P-value: DFD-29 versus Placebo | |
| P<0.001 | | |
| P<0.001 | | |
| P<0.001 | | |
| P<0.001 | |
| • | In June 2023, Journey Medical announced positive Phase 1 clinical trial data assessing the impact
of DFD-29 on the microbial flora of healthy adults. Results indicated that DFD-29 can be safely used for up to 16 weeks with no significant
risk of microbiota suppression or development of resistance. |
Conference Call and Webcast Information
Journey Medical management will conduct a conference
call and audio webcast on Tuesday, August 8, 2023, at 4:30 p.m. ET.
To listen to the conference call, interested
parties within the U.S. should dial 1-866-777-2509 (domestic) or 1-412-317-5413 (international). All callers should dial in approximately
10 minutes prior to the scheduled start time and ask to be joined into the Journey Medical conference call. Participants can register
for the conference here: https://dpregister.com/sreg/10181142/f9fee9e324.
Please note that registered participants will receive their dial-in number upon registration.
A live audio webcast can be accessed on the News
and Events page of the Investors section of Journey Medical’s website, www.journeymedicalcorp.com, and will remain
available for replay for approximately 30 days after the meeting.
About Journey Medical Corporation
Journey Medical Corporation (Nasdaq: DERM) (“Journey
Medical”) is a commercial-stage pharmaceutical company that primarily focuses on the selling and marketing of U.S. Food and Drug
Administration-approved prescription pharmaceutical products for the treatment of dermatological conditions through its efficient sales
and marketing model. The company currently markets eight branded and three generic products that help treat and heal common skin conditions.
The Journey Medical team comprises industry experts with extensive experience in developing and commercializing some of dermatology’s
most successful prescription brands. Journey Medical is located in Scottsdale, Arizona and was founded by Fortress Biotech, Inc.
(Nasdaq: FBIO). Journey Medical’s common stock is registered under the Securities Exchange Act of 1934, as amended, and it files
periodic reports with the U.S. Securities and Exchange Commission (“SEC”). For additional information about Journey Medical,
visit www.journeymedicalcorp.com.
Forward-Looking Statements
This press release may contain “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. As used below and throughout this press release, the words “the Company”, “we”,
“us” and “our” may refer to Journey Medical. Such statements include, but are not limited to, any statements relating
to our growth strategy and product development programs and any other statements that are not historical facts. The words “anticipate,”
“believe,” “estimate,” “may,” “expect,” “will,” “could,” “project,”
“intend,” “potential” and similar expressions are generally intended to identify forward-looking statements. Forward-looking
statements are based on management’s current expectations and are subject to risks and uncertainties that could negatively affect
our business, operating results, financial condition and stock price. Factors that could cause actual results to differ materially from
those currently anticipated include: the fact that our products and product candidates are subject to time and cost intensive regulation
and clinical testing and as a result, may never be successfully developed or commercialized; a substantial portion of our sales derive
from products that may become subject to third-party generic competition, the introduction of new competitor products, or an increase
in market share of existing competitor products, any of which could have a significant adverse impact on our operating income; we operate
in a heavily regulated industry, and we cannot predict the impact that any future legislation or administrative or executive action may
have on our operations; our revenue is dependent mainly upon sales of our dermatology products and any setback relating to the sale of
such products could impair our operating results; competition could limit our products’ commercial opportunity and profitability,
including competition from manufacturers of generic versions of our products; the risk that our products do not achieve broad market acceptance,
including by government and third-party payors; our reliance third parties for several aspects of our operations; our dependence on our
ability to identify, develop, and acquire or in-license products and integrate them into our operations, at which we may be unsuccessful;
the dependence of the success of our business, including our ability to finance our company and generate additional revenue, on the successful
development and regulatory approval of the DFD-29 product candidate and any future product candidates that we may develop, in-license
or acquire; clinical drug development is very expensive, time consuming, and uncertain and our clinical trials may fail to adequately
demonstrate the safety and efficacy of our current or any future product candidates; our competitors could develop and commercialize products
similar or identical to ours; risks related to the protection of our intellectual property and our potential inability to maintain sufficient
patent protection for our technology and products; our business and operations would suffer in the event of computer system failures,
cyber-attacks, or deficiencies in our or our third parties’ cybersecurity; the substantial doubt about our ability to continue as
a going concern; the effects of major public health issues, epidemics or pandemics on our product revenues and any future clinical trials;
our potential need to raise additional capital; Fortress controls a voting majority of our common stock, which could be detrimental to
our other shareholders; as well as other risks described in Part I, Item 1A, “Risk Factors,” in our Annual Report
on Form 10-K for the year ended December 31, 2022, subsequent Reports on Form 10-Q, and our other filings we make with
the SEC. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement
is based, except as may be required by law, and we claim the protection of the safe harbor for forward-looking statements contained in
the Private Securities Litigation Reform Act of 1995.
Company Contact:
Jaclyn Jaffe
(781) 652-4500
ir@jmcderm.com
Media Relations Contact:
Tony Plohoros
6 Degrees
(908) 591-2839
tplohoros@6degreespr.com
JOURNEY MEDICAL CORPORATION
Unaudited Condensed Consolidated Balance Sheets
($ in thousands except for share and per share
amounts)
| |
June 30, | | |
December 31, | |
| |
2023 | | |
2022 | |
ASSETS | |
| | | |
| | |
Current assets | |
| | | |
| | |
Cash and cash equivalents | |
$ | 8,230 | | |
$ | 32,003 | |
Accounts receivable, net of reserves | |
| 16,737 | | |
| 28,208 | |
Inventory | |
| 12,166 | | |
| 14,159 | |
Prepaid expenses and other current assets | |
| 1,796 | | |
| 3,309 | |
Restricted cash | |
| 8,750 | | |
| - | |
Total current assets | |
| 47,679 | | |
| 77,679 | |
| |
| | | |
| | |
Intangible assets, net | |
| 21,916 | | |
| 27,197 | |
Operating lease right-of-use asset, net | |
| 146 | | |
| 189 | |
Other assets | |
| 6 | | |
| 95 | |
Total assets | |
$ | 69,747 | | |
$ | 105,160 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accounts payable | |
$ | 31,773 | | |
$ | 36,570 | |
Due to related party | |
| 603 | | |
| 413 | |
Accrued expenses | |
| 23,329 | | |
| 19,388 | |
Accrued interest | |
| 83 | | |
| 160 | |
Income taxes payable | |
| 35 | | |
| 35 | |
Line of credit | |
| - | | |
| 2,948 | |
Term loan, short-term (net of discount of $58) | |
| 9,942 | | |
| - | |
Deferred cash payment (net of discount of $9) | |
| - | | |
| 4,991 | |
Installment payments – licenses, short-term | |
| 2,333 | | |
| 2,244 | |
Operating lease liability, short-term | |
| 95 | | |
| 83 | |
Total current liabilities | |
| 68,193 | | |
| 66,832 | |
| |
| | | |
| | |
Term loan, long-term (net of debt discount of $174) | |
| - | | |
| 19,826 | |
Installment payments – licenses, long-term | |
| 1,490 | | |
| 1,412 | |
Operating lease liability, long-term | |
| 59 | | |
| 108 | |
Total liabilities | |
| 69,742 | | |
| 88,178 | |
| |
| | | |
| | |
Stockholders' equity | |
| | | |
| | |
Common stock, $.0001 par value, 50,000,000 shares authorized, 12,133,890 and 11,765,700 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | |
| 1 | | |
| 1 | |
Common stock - Class A, $.0001 par value, 50,000,000 shares authorized, 6,000,000 shares issued and outstanding as of June 30, 2023 and December 31, 2022 | |
| 1 | | |
| 1 | |
Additional paid-in capital | |
| 87,004 | | |
| 85,482 | |
Accumulated deficit | |
| (87,001 | ) | |
| (68,502 | ) |
Total stockholders' equity | |
| 5 | | |
| 16,982 | |
Total liabilities and stockholders' equity | |
$ | 69,747 | | |
$ | 105,160 | |
JOURNEY
MEDICAL CORPORATION
Unaudited
Condensed Consolidated Statements of Operations
($ in thousands
except for share and per share amounts)
| |
Three-Month Periods Ended | |
|
Six-Month Periods Ended | |
​ | |
June 30, | |
|
June 30, | |
| |
2023 | |
|
2022 | |
|
2023 | |
|
2022 | |
Revenue: | |
| ​ | |
|
| ​ | |
|
| ​ | |
|
| ​ | |
Product revenue, net | |
$ | 16,961 | |
|
$ | 18,235 | |
|
$ | 29,126 | |
|
$ | 39,031 | |
Other revenue | |
| 211 | |
|
| 56 | |
|
| 259 | |
|
| 2,556 | |
Total revenue | |
| 17,172 | |
|
| 18,291 | |
|
| 29,385 | |
|
| 41,587 | |
| |
| | |
|
| | |
|
| | |
|
| | |
Operating expenses | |
| ​ | |
|
| ​ | |
|
| ​ | |
|
| ​ | |
Cost of goods sold – product revenue | |
| 7,767 | |
|
| 7,633 | |
|
| 14,216 | |
|
| 15,836 | |
Research and development | |
| 1,774 | |
|
| 2,609 | |
|
| 3,807 | |
|
| 3,875 | |
Selling, general and administrative | |
| 12,141 | |
|
| 15,191 | |
|
| 25,433 | |
|
| 29,906 | |
Loss on impairment of intangible assets | |
| 3,143 | |
|
| - | |
|
| 3,143 | |
|
| - | |
Total operating expenses | |
| 24,825 | |
|
| 25,433 | |
|
| 46,599 | |
|
| 49,617 | |
Loss from operations | |
| (7,653 | ) |
|
| (7,142 | ) |
|
| (17,214 | ) |
|
| (8,030 | ) |
| |
| | |
|
| | |
|
| | |
|
| | |
Other expense (income) | |
| | |
|
| | |
|
| | |
|
| | |
Interest income | |
| (79 | ) |
|
| (4 | ) |
|
| (201 | ) |
|
| (7 | ) |
Interest expense | |
| 756 | |
|
| 454 | |
|
| 1,406 | |
|
| 843 | |
Foreign exchange transaction losses | |
| 33 | |
|
| - | |
|
| 80 | |
|
| - | |
Total other expense (income) | |
| 710 | |
|
| 450 | |
|
| 1,285 | |
|
| 836 | |
Loss before income taxes | |
| (8,363 | ) |
|
| (7,592 | ) |
|
| (18,499 | ) |
|
| (8,866 | ) |
| |
| | |
|
| | |
|
| | |
|
| | |
Income tax (benefit) expense | |
| - | |
|
| (64 | ) |
|
| - | |
|
| 40 | |
Net Loss | |
$ | (8,363 | ) |
|
$ | (7,528 | ) |
|
$ | (18,499 | ) |
|
$ | (8,906 | ) |
| |
| | |
|
| | |
|
| | |
|
| | |
Net loss per common share: | |
| | |
|
| | |
|
| | |
|
| | |
Basic and diluted | |
$ | (0.46 | ) |
|
$ | (0.43 | ) |
|
$ | (1.03 | ) |
|
$ | (0.51 | ) |
Weighted average number of common shares: | |
| | |
|
| | |
|
| | |
|
| | |
Basic and diluted | |
| 18,005,055 | |
|
| 17,455,894 | |
|
| 17,906,671 | |
|
| 17,386,538 | |
Use of Non-GAAP Measures:
In addition to the GAAP financial measures, the
Company has, in this press release, included certain non-GAAP measurements, including Adjusted EBITDA, Adjusted EBITDA per share basic
and Adjusted EBITDA per share diluted. We define Adjusted EBITDA as net income (loss) excluding interest, taxes and depreciation, less
certain other non-cash and infrequent items not considered to be normal, recurring operating expenses, including, share-based compensation
expense, amortization and impairment of acquired intangible assets, inventory step-ups from the purchases of intangibles assets and products,
severance, non-core research and development expense and foreign exchange transaction losses. In particular, we exclude the following
matters for the reasons more fully described below:
| • | Share-Based Compensation Expense: We exclude share-based compensation from our adjusted financial
results because share-based compensation expense, which is non-cash, fluctuates from period to period based on factors that are not within
our control, such as our stock price on the dates share-based grants are issued. |
| | |
| • | Non-core and Short-term Research and Development Expense: We exclude research and development
costs incurred in connection with our DFD-29 product candidate, which is the only product in our portfolio not currently approved for
marketing and sale, because we do not consider such costs to be normal, recurring operating expenses that are core to our long-term strategy.
Instead, our long-term strategy is focused on the marketing and sale of acquired and/or licensed FDA-approved dermatological products. |
| | |
| • | Amortization and impairments of Acquired Intangible assets: We exclude the impact of certain
amounts recorded in connection with the acquisitions of intangible assets that are either non-cash or not normal, recurring operating
expenses due to their nature, variability of amounts, and lack of predictability as to occurrence and/or timing. These amounts may include
non-cash items such as the amortization of acquired intangible assets, impairments and amortization of step-ups of acquisition accounting
adjustments to inventories. |
Adjusted EBITDA per share basic and Adjusted EBITDA
per share diluted are determined by dividing the resulting Adjusted EBITDA by the number of shares outstanding on an actual and fully
diluted basis.
Management believes use of these non-GAAP measures
provide meaningful supplemental information regarding the Company’s performance because (i) it allows for greater transparency
with respect to key measures used by management in its financial and operational decision-making, (ii) it excludes the impact of
non-cash or, when specified, non-recurring items that are not directly attributable to the Company’s core operating performance
and that may obscure trends in the Company’s core operating performance and (iii) it is used by institutional investors and
the analyst community to help analyze the Company's results. However, Adjusted EBITDA, Adjusted EBITDA per share basic, Adjusted EBITDA
per share diluted and any other non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior
to, the corresponding measures calculated in accordance with GAAP. Further, non-GAAP financial measures used by the Company and the manner
in which they are calculated may differ from the non-GAAP financial measures or the calculations of the same non-GAAP financial measures
used by other companies, including the Company’s competitors.
The table below provides a reconciliation from
GAAP to non-GAAP measures:
JOURNEY MEDICAL CORPORATION
Reconciliation of GAAP to Non-GAAP Adjusted
EBITDA
($ in thousands except for share and per share
amounts)
| |
Three-month
period ended | | |
Three-month periods ended | | |
Six-month periods ended | |
| |
March 31, | | |
June 30, | | |
June 30, | |
| |
2023 | | |
2023 | | |
2022 | | |
2023 | | |
2022 | |
GAAP Net Loss | |
$ | (10,136 | ) | |
$ | (8,363 | ) | |
$ | (7,528 | ) | |
$ | (18,499 | ) | |
$ | (8,906 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
EBITDA: | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest | |
| 528 | | |
| 677 | | |
| 450 | | |
| 1,205 | | |
| 836 | |
Taxes | |
| - | | |
| - | | |
| (64 | ) | |
| - | | |
| 40 | |
Depreciation | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Amortization of acquired intangible assets | |
| 1,069 | | |
| 1,069 | | |
| 1,017 | | |
| 2,138 | | |
| 2,034 | |
EBITDA | |
| (8,539 | ) | |
| (6,617 | ) | |
| (6,125 | ) | |
| (15,156 | ) | |
| (5,996 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Non-GAAP Adjusted EBITDA: | |
| | | |
| | | |
| | | |
| | | |
| | |
Share-based compensation | |
| 646 | | |
| 873 | | |
| 774 | | |
| 1,519 | | |
| 1,547 | |
Loss on impairment of intangible assets | |
| - | | |
| 3,143 | | |
| - | | |
| 3,143 | | |
| - | |
Inventory step-up expense | |
| - | | |
| - | | |
| 171 | | |
| - | | |
| 311 | |
Non-core & short-term R&D | |
| 1,999 | | |
| 1,744 | | |
| 2,609 | | |
| 3,743 | | |
| 3,875 | |
Foreign exchange transaction losses | |
| 47 | | |
| 33 | | |
| - | | |
| 80 | | |
| - | |
Severance | |
| 526 | | |
| 185 | | |
| - | | |
| 711 | | |
| - | |
Non-GAAP Adjusted EBITDA | |
$ | (5,321 | ) | |
$ | (639 | ) | |
$ | (2,571 | ) | |
$ | (5,960 | ) | |
$ | (263 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss per common share Basic and diluted : | |
| | | |
| | | |
| | | |
| | | |
| | |
GAAP Net loss | |
$ | (0.57 | ) | |
$ | (0.46 | ) | |
$ | (0.43 | ) | |
$ | (1.03 | ) | |
$ | (0.51 | ) |
Non-GAAP Net loss | |
$ | (0.30 | ) | |
$ | (0.04 | ) | |
$ | (0.15 | ) | |
$ | (0.33 | ) | |
$ | (0.02 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Weighted average number of common shares Basic and diluted : | |
| 17,807,194 | | |
| 18,005,055 | | |
| 17,455,894 | | |
| 17,906,671 | | |
| 17,386,538 | |
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