Glowpoint Announces Third Quarter 2019 Results
DENVER, Nov. 14, 2019 (GLOBE NEWSWIRE) — Glowpoint, Inc. (NYSE American: GLOW) (“Glowpoint” or the “Company”), a managed service provider of video collaboration and network applications, today announced financial results for the third quarter ended September 30, 2019.
Third Quarter and Recent Highlights:On October 1, 2019, Glowpoint closed its previously announced acquisition of Oblong Industries, Inc. (“Oblong” and, such acquisition, the “Oblong Transaction”).
On October 1, 2019, Glowpoint closed the first tranche of its previously announced private placement of Series E Convertible Preferred Stock (the “Series E Financing”) for approximately $2.51 million in gross proceeds. The Series E Convertible Preferred Stock issued in the Series E Financing is automatically convertible into an aggregate of approximately 880,700 shares of Glowpoint’s common stock at a price of $2.85 per share of common stock upon receipt of Glowpoint stockholder approval and approval of the NYSE American for the continued listing of the combined company following such conversion.
Investors in the Series E Financing have committed to purchase an additional $1.25 million of Glowpoint’s Series E Convertible Preferred Stock, upon demand by Glowpoint, on the same terms.
Assuming consummation of the second tranche of the Series E Financing, Glowpoint will have approximately 23.9 million shares of common stock outstanding, pro forma for the conversion of the Series D Preferred Stock issued by Glowpoint in the Oblong Transaction and conversion of the Series E Preferred Stock.
The Series E investors are investing this capital into the combined company at an implied equity valuation of approximately $68 million (based upon the total $3.75 million investment for 5.5% ownership of the 23.9 million shares of pro forma common stock outstanding referenced above, which assumes the conversion of Glowpoint’s issued and outstanding shares of Series D and Series E Preferred Stock).
The Company appointed three new members to its Board of Directors since July 2019, Jason Adelman, Richard Ramlall and John Underkoffler.“The transformative merger with Oblong, which closed on October 1st, combines Glowpoint’s core expertise in IT Service Management and Oblong’s patented suite of collaboration products and services,” said Peter Holst, Chairman and CEO of Glowpoint. “In parallel with ongoing integration efforts between the two companies, we are actively pursuing the launch of our recently announced partnership with Cisco’s Collaboration Group and expect both efforts to yield material results in the first half of 2020. The successful completion of our Series E Financing on October 1st at a significant premium relative to the market price demonstrates investor confidence regarding the substantial market opportunity the combined company has before it. We look forward to communicating this exciting opportunity to both our current shareholders and the investment community at large in the weeks and months ahead.”Glowpoint’s Third Quarter Financial Results:Revenue of $2.37 million in the third quarter was comparable with revenue of $2.44 million in the second quarter of 2019.
Net loss of $0.6 million and adjusted EBITDA (“AEBITDA”) of negative $0.2 million. AEBITDA is a non-GAAP financial measure. See “Non-GAAP Financial Information” below for additional information regarding this non-GAAP financial measure, and “GAAP to Non-GAAP Reconciliation” later in this release for a reconciliation of this non-GAAP financial measure to net loss.
Working capital of $1.6 million, including cash of $1.3 million as of September 30, 2019.Because the closing of the Oblong Transaction and the Series E Financing (as defined below) occurred after September 30, 2019, the Company’s condensed consolidated financial statements included in its Quarterly Report on Form 10-Q for the third quarter of 2019 and in this press release do not reflect these transactions.Glowpoint’s results from operations and financial condition are more fully discussed in our Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2019 on file with the Securities and Exchange Commission (the “SEC”). Investors are encouraged to carefully review the Company’s Form 10-Q for a complete analysis of its results from operations and financial condition.About GlowpointGlowpoint, Inc. (NYSE American: GLOW) is a managed service provider of video collaboration and network applications. Our services are designed to provide a comprehensive suite of automated and concierge applications to simplify the user experience and expedite the adoption of video as the primary means of collaboration. To learn more please visit www.glowpoint.com.Oblong Industries, Inc. (“Oblong”) is a wholly-owned subsidiary of Glowpoint. Oblong’s innovative technologies change the way people work, create, and communicate. With roots in more than two decades of research at the MIT Media Lab, Oblong’s flagship product Mezzanine™ is the technology platform defining the next era of computing: multi-stream, concurrent multi-user, multi-screen, multi-device, and multi-location for dynamic and immersive visual collaboration. This focus continues with the debut of cloud-based Rumpus™ for purely virtual teams. Oblong is headquartered in Los Angeles, California. To learn more please visit www.oblong.com, and connect via Twitter, Facebook, LinkedIn, and Instagram.Our customers include Fortune 500 and 1000 companies, along with small and medium sized enterprises in a variety of industries, and we supply Oblong’s Mezzanine™ systems to Fortune 500 enterprise customers and reseller partners.Non-GAAP Financial InformationAdjusted EBITDA (“AEBITDA”), a non-GAAP financial measure, is defined as net loss before depreciation and amortization, income tax expense, stock-based compensation, impairment charges, merger expenses and interest and other expense, net. AEBITDA is not intended to replace operating loss, net loss, cash flow or other measures of financial performance reported in accordance with generally accepted accounting principles (GAAP). Rather, AEBITDA is an important measure used by management to assess the operating performance of the Company and is used in determining achievement of performance-based stock awards. AEBITDA as defined here may not be comparable to similarly titled measures reported by other companies due to differences in accounting policies. Therefore, AEBITDA should be considered in conjunction with net loss and other performance measures prepared in accordance with GAAP, such as operating loss or cash flow provided by (used in) operating activities, and should not be considered in isolation or as a substitute for GAAP measures, such as net loss, operating loss or any other GAAP measure of liquidity or financial performance. A reconciliation of AEBITDA to net loss is shown under “GAAP to Non-GAAP Reconciliation” in the attached schedules.Forward looking and cautionary statementsThis press release and any oral statements made regarding the subject of this release contain forward-looking statements as defined under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, that address activities that Glowpoint assumes, plans, expects, believes, intends, projects, estimates or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Glowpoint’s actual results may differ materially from its expectations, estimates and projections, and consequently you should not rely on these forward-looking statements as predictions of future events. Without limiting the generality of the foregoing, forward-looking statements contained in this press release include statements regarding the Company’s future financial and operating performance, ability to integrate with Oblong following the completion of its acquisition of Oblong, ability to satisfy the NYSE American’s initial listing standards, future compliance with the NYSE American’s continued listing standards, and opportunities for increasing shareholder value. The forward-looking statements are based on management’s current belief, based on currently available information, as to the outcome and timing of future events, and involve factors, risks, and uncertainties that may cause actual results in future periods to differ materially from such statements. A list and description of these and other risk factors can be found in the Company’s Annual Report on Form 10-K for the year ending December 31, 2018 and in other filings made by the Company with the SEC from time to time, including the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2019. Any of these factors could cause Glowpoint’s actual results and plans to differ materially from those in the forward-looking statements. Therefore, Glowpoint can give no assurance that its future results will be as estimated. Glowpoint does not intend to, and disclaims any obligation to, correct, update or revise any information contained herein.INVESTOR CONTACT:Investor Relations
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value, stated value, and shares)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND GAAP to Non-GAAP Reconciliation
(In thousands, except per share data)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)