Artificial Intelligence

Surgalign Holdings, Inc. Announces Fourth Quarter and Full Year 2021 Results

Published

2 years ago

March 15, 2022

DEERFIELD, Ill., March 15, 2022 (GLOBE NEWSWIRE) — Surgalign Holdings, Inc., (NASDAQ: SRGA) a global medical technology company focused on elevating the standard of care by driving the evolution of digital surgery, today reported operating results for the fourth quarter and full year 2021.

Recent Highlights:

Total global spine revenue of $21.8 million, compared to $26.2 million in the fourth quarter of 2020
Net loss from continuing operations of $88.8 million, inclusive of a $72.1 million loss related to the Inteneural Networks, Inc. (INN) acquisition, or net loss of $0.64 share in the fourth quarter of 2021
Adjusted EBITDA loss of $12.9 million, compared to a loss of $7.7 million in the fourth quarter of 2020
Cash and cash equivalents at December 31, 2021 was $51.3 million
In December 2021, the Company expanded is digital health capabilities through the acquisition of a significant equity interest in INN
In January 2022, received FDA 510(k) clearance for HOLO Portal^TM System, the world’s first AI-driven AR guidance system for spine surgery
In March 2022, the Company appointed David Lyle as Chief Financial Officer

“We are very proud of what we were able to accomplish during 2021 and early in 2022, despite the ongoing headwinds we are experiencing. I want to thank all of our employees for their hard work and perseverance to deliver for our customers while at the same time developing HOLO, which we believe is a quantum leap in the way surgical procedures are performed and ultimately the way patients are cared for throughout the care continuum,” said Terry Rich, President and Chief Executive Officer of Surgalign Holdings. “Fourth quarter performance was in line with our expectations, but continued to be heavily impacted by macro issues, including COVID-related procedural restrictions and hospital staffing shortages, both of which persisted during the first two months of 2022.”

Mr. Rich continued, “As we look to 2022, we are squarely focused on putting the pieces in place to allow us to drive the long-term adoption of HOLO. With a milestone FDA clearance in hand, our near term focus is on early commercial efforts to get HOLO into the hands of surgeons across the U.S. as part of our limited market release. We remain incredibly excited about the opportunity that exists for HOLO within the initial spine surgery market, but also for the broader opportunity for the platform as we move into additional procedural areas and incremental parts of the care continuum outside of the operating room.”

Fourth Quarter 2021

Global revenue for the quarter ended December 31, 2021, was $21.8 million compared to $26.2 million for the prior year period. The decrease in revenue is primarily due to decreased demand as a result of COVID-19 related headwinds in the fourth quarter.

Gross profit for the fourth quarter of 2021 was $12.3 million or 56.5% of revenue compared to $12.8 million or 48.8% of revenue in the fourth quarter of 2020.

General and administrative expenses for the fourth quarter of 2021 were $25.4 million compared to $27.3 million in the fourth quarter of 2020.

R&D expense for the fourth quarter of 2021 was $4.9 million compared to $2.2 million in the fourth quarter of 2020.

Net loss from continuing operations for the fourth quarter of 2021 was $88.8 million, inclusive of a $72.1 million loss related to the acquisition of INN, compared to a net loss of $118.1 million for the fourth quarter of 2020, inclusive of a $93.5 million loss related to the acquisition of Holo.

Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), for the fourth quarter of 2021 was a loss of $12.9 million compared to a loss of $7.7 million for the fourth quarter of 2020.

As of December 31, 2021, cash and cash equivalents were approximately $51.3 million. Subsequent to the end of the fourth quarter, the Company completed an underwritten public offering of its common stock, raising gross proceeds of approximately $17.8 million.

Fiscal 2022 Business Outlook

The Company anticipates full year revenue in the range of $83 to $87 million.

FDA 510(k) Clearance of HOLO Portal System

On January 18, 2022, the Company announced it had received clearance of its HOLO Portal surgical guidance system for use within lumbar spine procedures. The HOLO Portal system is the world’s first artificial intelligence (AI)-driven augmented reality (AR) guidance system for spine and the first clinical application of the Company’s HOLO^TM AI digital health platform.

The HOLO Portal system combines machine learning-based image guidance technology with AR, automated spine segmentation (i.e., anatomy recognition), and automated surgical planning utilizing proprietary AI software. Intraoperative images are autonomously processed by the AI system to create a patient-specific plan that is presented to the surgeon using the AR display.

Acquisition of Equity Interest in Inteneural Networks, Inc.

In December 2021, the Company acquired an equity interest in INN, and its proprietary AI technology for autonomously segmenting and identifying neural structures in medical images and helping identify possible pathological states. The Company will also have the ability to acquire the remainder of INN’s outstanding equity interests upon the achievement of certain regulatory, developmental, and revenue-based commercial milestones. In June of 2021, the Company and INN entered into a strategic collaboration agreement during which time the Company evaluated INN’s technology for future integration within the Company’s digital platform.

INN is developing technology that harnesses ML and AI to autonomously and accurately identify and segment neural structures in medical images and integrate specific reference information regarding possible pathological states to physicians caring for patients. This technology could have future applications in neurosurgery as well as the potential to address a wide variety of potential disorders, including dementia, autism, tumors, aneurysm, stroke, and neurovascular structures using magnetic resonance imaging and computed tomography platforms.

Appointment of David Lyle as Chief Financial Officer

On March 7, 2022, the Company announced the appointment of David Lyle as its Chief Financial Officer. Mr. Lyle brings more than two decades of financial leadership experience with the technology sector and has a proven track record of successfully scaling high growth technology companies, having served in leadership roles in both public and private organizations.

Conference Call

Surgalign will host a conference call and audio webcast at 4:30 p.m. ET today. The conference call can be accessed by dialing (866) 604-1616 (U.S.) or (201) 689-8043 (International), using conference ID 13724073. The webcast can be accessed through the investor section of Surgalign’s website at surgalign.com/investors/. A replay of the conference call will be available on Surgalign’s website for one month following the call.

About Surgalign Holdings, Inc.

Surgalign Holdings, Inc. is a global medical technology company committed to the promise of digital health to drive transformation across the surgical landscape. Uniquely aligned and resourced to advance the standard of care, the company is building technologies physicians and other health providers will look to for what is truly possible for their patients. Surgalign is focused on developing solutions that predictably deliver superior clinical and economic outcomes. Surgalign markets products throughout the United States and in more than 50 countries worldwide through an expanding network of top independent distributors. Surgalign is headquartered in Deerfield, IL, with commercial, innovation and design centers in San Diego, CA, Warsaw and Poznan, Poland and Wurmlingen, Germany. Learn more at www.surgalign.com and connect on LinkedIn and Twitter.

Forward Looking Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations, estimates and projections about our industry, our management’s beliefs and certain assumptions made by our management. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. The forward-looking statements are not guarantees of future performance and are based on certain assumptions including general economic conditions, as well as those within the Company’s industry, and numerous other factors and risks identified in the Company’s most recent Form 10-K and other filings with the SEC. Our actual results may differ materially from the anticipated results reflected in these forward-looking statements. Important factors that could cause actual results to differ materially from the anticipated results reflected in these forward-looking statements include risks and uncertainties relating to the following: (i) risks relating to existing or potential litigation or regulatory action arising from the previously announced SEC and internal investigations and their findings; (ii) the identification of control deficiencies, including material weaknesses in internal control over financial reporting and the impact of the same; (iii) potential reputational damage that the Company has or may suffer as a result of the findings of the SEC and internal investigations and related litigation; (iv) general worldwide economic conditions and related uncertainties; (v) the continued impact of the COVID-19 novel coronavirus pandemic and the Company’s attempts at mitigation, particularly in international markets served by the Company; (vi) the failure by the Company to identify, develop and successfully implement its strategic initiatives, particularly with respect to its digital surgery strategy; (vii) the reliability of our supply chain; (viii) our ability to meet obligations, including purchase minimums, under our vendor and other agreements; (ix) the duration of decreased demand for our products; (x) whether or when the demand for procedures involving our products will increase; (xi) the Company’s access to adequate operating cash flow, trade credit, borrowed funds and equity capital to fund its operations and pay its obligations as they become due, and the terms on which external financing may be available, including the impact of adverse trends or disruption in the global credit and equity markets; (xii) our financial position and results, total revenue, product revenue, gross margin, and operations; (xiii) failure to realize, or unexpected costs in seeking to realize, the expected benefits of the Holo Surgical, Inc. (“Holosurgical”) and Inteneural Networks (“INN”) acquisitions, including the failure of Holosurgical’s and INN’s products and services to be satisfactorily developed or achieve applicable regulatory approvals or as a result of the failure to commercialize and distribute its products; (xiv) the failure to effectively integrate Holosurgical’s and INN’s operations with those of the Company, including: retention of key personnel; the effect on relationships with customers, suppliers, and other third parties; and the diversion of management time and attention to the integration; (xv) the number of shares and amount of cash that will be required in connection with any post-closing milestone payments, including as a result of changes in the trading price of the Company’s common stock and their effect on the amount of cash needed by the Company to fund any post-closing milestone payments in connection with the acquisitions; (xvi) the effect of the recent resignation of our auditor and our ability to successfully onboard a new auditor; (xvii) the continuation of recent quality issues with respect to our global supply chain; (xviii) the effects of recent resignations from our Board of Directors and executive leadership team, including our ability to find qualified candidates to fill those vacancies; (xix) the effect and timing of changes in laws or in governmental regulations; and (xx) other risks described in our public filings with the SEC. These factors should be considered carefully, and undue reliance should not be placed on the forward-looking statements. Each forward-looking statement in this communication speaks only as of the date of the particular statement. Copies of the Company’s SEC filings may be obtained by contacting the Company or the SEC or by visiting Surgalign’s website at www.surgalign.com or the SEC’s website at www.sec.gov. We undertake no obligation to update these forward-looking statements except as may be required by law.

Mike Vallie
Investor and Media Contact
[email protected]


SURGALIGN HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except share and per share data)

	For the Three Months Ended						For the Twelve Months Ended
	December 31,						December 31,
	2021			2020			2021			2020
Revenues	$	21,830		$	26,187		$	90,500		$	101,749
Costs of goods sold		9,497			13,417			29,775			44,002
Gross profit		12,333			12,770			60,725			57,747

Operating Expenses:
General and administrative		25,404			27,329			104,668			124,424
Research and development		4,928			2,183			13,888			11,947
Loss (gain) on acquisition contingency		(1,034	)		4,883			(4,587	)		4,753
Asset acquisition expenses		72,087			93,501			72,087			94,999
Asset impairment and abandonments		2,401			2,656			12,195			14,773
Goodwill impairment		—			—			—			—
Transaction and integration expenses		1,179			544			3,689			4,872
Total operating expenses		104,965			131,096			201,940			255,768
Other operating income, net		—			—			(3,932	)		—
Operating loss		(92,632	)		(118,326	)		(137,283	)		(198,021	)

Other (income) expense – net
Other (income) expense – net		19			31			(202	)		(61	)
Foreign exchange loss (gain)		526			(307	)		1,447			(279	)
Change in fair value of warrant liability		(4,474	)		—			(14,736	)		—
Total other (income) expense – net		(3,929	)		(276	)		(13,491	)		(340	)
Loss before income tax (benefit) provision		(88,703	)		(118,050	)		(123,792	)		(197,681	)
Income tax (benefit) provision		118			6			(886	)		(3,486	)
Net loss from continuing operations		(88,821	)		(118,056	)		(122,906	)		(194,195	)
Discontinued operations (Note 5)
(Loss) Income from operations of discontinued operations		—			(1,651	)		(6,316	)		179,934
Income tax (benefit) provision		(1,562	)		(19,666	)		(2,674	)		19,522
Net (loss) income from discontinued operations		1,562			18,015			(3,642	)		160,412
Net loss		(87,259	)		(100,041	)		(126,548	)		(33,783	)
Net loss applicable to noncontrolling interests		41,897			—			41,897			—
Net (loss) applicable to Surgalign Holdings, Inc.	$	(45,362	)	$	(100,041	)	$	(84,651	)	$	(33,783	)

Net loss from continuing operations per share applicable to Surgalign Holdings, Inc. – basic	$	(0.64	)	$	(1.51	)	$	(1.00	)	$	(2.61	)
Net loss from continuing operations per share applicable to Surgalign Holdings, Inc. – diluted	$	(0.64	)	$	(1.51	)	$	(1.00	)	$	(2.61	)
Net income from discontinued operations per share applicable to Surgalign Holdings, Inc. – basic	$	0.01		$	0.23		$	(0.03	)	$	2.16
Net income from discontinued operations per share applicable to Surgalign Holdings, Inc. – diluted	$	0.01		$	0.23		$	(0.03	)	$	2.16
Net loss per share applicable to Surgalign Holdings, Inc.- basic	$	(0.33	)	$	(1.28	)	$	(0.69	)	$	(0.45	)
Net loss per share applicable to Surgalign Holdings, Inc. – diluted	$	(0.33	)	$	(1.28	)	$	(0.69	)	$	(0.45	)
Weighted average shares outstanding – basic		138,534,225			78,158,968			122,592,569			74,403,155
Weighted average shares outstanding – diluted		138,534,225			78,158,968			122,592,569			74,403,155


SURGALIGN HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)

	December 31,			December 31,
	2021			2020
Assets
Cash	$	51,287		$	43,962
Accounts receivable – net		19,197			27,095
Inventories – net		26,204			22,841
Prepaid and other assets		8,984			10,284
Total current assets		105,672			104,182
Non-current inventories – net		10,212			7,856
Property, plant and equipment – net		945			521
Other assets – net		6,970			10,145
Total assets	$	123,799		$	122,704

Liabilities, Mezzanine Equity and Stockholders’ Equity
Accounts payable	$	10,204		$	13,418
Current portion of acquisition contingency		25,585			8,996
Accrued expenses and other current liabilities		17,769			12,648
Accrued income taxes		484			11,761
Total current liabilities		54,042			46,823

Acquisition contingencies – Holo		26,343			47,519
Warrant liability		12,013			—
Notes payable – related party		9,982			—
Other Long-term liabilities		3,176			4,192
Total liabilities		105,556			98,534

Mezzanine equity		10,006			—

Stockholders’ equity:
Common stock and additional paid-in capital		579,670			511,548
Accumulated other comprehensive loss		(1,820	)		(2,416	)
Accumulated deficit		(569,613	)		(484,962	)
Total stockholder’s equity		8,237			24,170
Total liabilities and stockholders’ equity	$	123,799		$	122,704


SURGALIGN HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)

	For the Twelve Months Ended December 31,
	2021			2020
Cash flows from operating activities:
Net loss	$	(126,548	)	$	(33,783	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		2,479			6,581
Provision for bad debts and product returns		2,064			4,286
Change in fair value of warrant liability		(14,736	)		—
Provision for inventory write-downs		9,096			17,691
Investor Fee		2,119			—
Revenue recognized due to change in deferred revenue		—			(2,618	)
Deferred income tax provision		(171	)		(1,807	)
Stock-based compensation		5,212			6,528
Asset impairment and abandonments		12,195			14,773
Asset acquisition expenses		72,087			94,999
Loss (Gain) on acquisition contingency		(4,587	)		4,753
Loss on extinguishment of debt		—			2,686
Bargain purchase gain		(90	)		—
Amortization of debt issuance costs		—			283
Amortization of debt discount		—			2,479
Derivative loss		—			12,641
Loss (gain) on sale of OEM business (discontinued operations)		6,316			(209,800	)
Other		24			279
Change in assets and liabilities:
Accounts receivable		5,701			4,444
Inventories		(15,480	)		(12,607	)
Accounts payable		(3,112	)		5,306
Accrued expenses and income taxes payable		10,542			3,731
Right-of-use asset and lease liability		(2,542	)		—
Contract liability		—			2,956
Other operating assets and liabilities		(12,361	)		(11,839	)
Net cash (used in) provided by operating activities		(51,792	)		(88,038	)
Cash flows from investing activities:
Payments for OEM working capital adjustment		(5,430	)		—
Purchases of property and equipment		(13,423	)		(10,115	)
Patent and acquired intangible asset costs		(649	)		(3,923	)
Proceeds from sale of OEM business		—			437,097
Acquisition of INN		(5,000	)		—
Business acquisitions, net of cash acquired		(330	)		—
Acquisition of Holo Surgical		—			(32,117	)
Net cash provided by (used in) investing activities		(24,832	)		390,942
Cash flows from financing activities:
Share offering proceeds, net		82,326			—
Proceeds from exercise of common stock options		23			22
Proceeds from Employee Stock Purchase Program (ESPP)		407			—
Repayment of short-term obligations		—			(76,912	)
Proceeds from long-term obligations		—			89,892
Payments of debt issuance costs		—			(1,740	)
Payments on long-term obligations		—			(207,266	)
Payments for treasury stock		(196	)		(515	)
Redemption of preferred stock		—			(66,519	)
Net cash (used in) provided by financing activities		82,560			(263,038	)
Effect of exchange rate changes on cash and cash equivalents		1,389			(1,512	)
Net increase (decrease) in cash and cash equivalents		7,325			38,354
Cash and cash equivalents, beginning of period		43,962			5,608
Cash and cash equivalents, end of period	$	51,287		$	43,962

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements presented on a GAAP basis, we disclose non-GAAP net income applicable to common shares and non-GAAP gross profit adjusted for certain amounts. The calculation of the tax effect on the adjustments between GAAP net loss applicable to common shares and non-GAAP net income applicable to common shares is based upon our estimated annual GAAP tax rate, adjusted to account for items excluded from GAAP net loss applicable to common shares in calculating non-GAAP net income applicable to common shares. Reconciliations of each of these non-GAAP financial measures to the corresponding GAAP measures are included in the reconciliations below.

The following are explanations of the adjustments that management excluded as part of the non-GAAP measures for the three and twelve months ended December 31, 2021 and 2020. Management removes the amount of these costs including the tax effect on the adjustments from our operating results to supplement a comparison to our past operating performance.

2021 Change in fair value of warrant liability – Other income related to the revaluation of our warrant liability.

2021 and 2020 Loss/(Gain) on acquisition contingency – The 2021 gain on acquisition contingency relates to an adjustment to our estimate of obligation for future milestone payments on the Holo Surgical acquisition. The loss on acquisition contingency for 2020 relates to an adjustment to our estimate of the obligation for future milestone payments on the Holo acquisition.

2021 Supplier prepayment write-off – Cost related to the write-off of prepaid royalty payments that the Company assessed would not be met in future years

2021 Bargain purchase gain – Gain related to our acquisition of Prompt Prototypes, LLC.

2021 Other Operating Income – Gain related to the Company’s inventory settlement with OEM.

2021 and 2020 Asset impairment and abandonments – These costs relate to asset impairment and abandonments of certain long-term assets within the asset group.

2021 and 2020 Transaction and integration expenses – These costs relate to issuance costs for the registered direct offering and professional fees associated with the acquisition of Holo Surgical, Prompt Prototypes, LLC, purchase of Paradigm and as well as the disposal of OEM Businesses in 2020.

2021 and 2020 Asset acquisition expenses – The asset acquisition expenses related to the INN acquisition in 2021, and the Holo Surgical Acquisition in 2020

2021 and 2020 Inventory purchase price adjustment – These costs relate to the purchase price effects of acquired Paradigm inventory that was sold during the years ended December 31, 2021, and 2020.

2021 and 2020 Severance and restructuring costs – 2021 costs relate to the reduction of our organizational structure, primarily driven by simplification of our Marquette, MI location. 2020 costs relate to the reduction of our organizational structure, primarily driven by simplification of our international operating infrastructure, specifically our distribution model.

2020 Inventory write-off – These costs relate to the write-off of inventory related to the transition from an integrated manufacturing company to a distributed model.

2020 Restatement and related costs – These costs relate to consulting and legal fees and settlement expenses incurred as a result of the restatement, regulatory and related activities in 2020.

2020 Tax effect on new tax legislation – This adjustment represents charges relating to the Tax Legislation which was enacted on December 22, 2017.

Material Limitations Associated with the Use of Non-GAAP Financial Measures

EBITDA, Adjusted EBITDA and Adjusted Net Income Applicable to Common Shares should not be considered in isolation, or as a replacement for GAAP measures.

Usefulness of Non-GAAP Financial Measures to Investors

The Company believes that presenting EBITDA, Adjusted EBITDA and Adjusted Net Income Applicable to Common Shares in addition to the related GAAP measures provide investors greater transparency to the information used by management in its financial decision-making.


SURGALIGN HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Revenues to Adjusted Gross Profit
(Unaudited, in thousands)

	For the Three Months Ended December 31,						For the Twelve Months Ended December 31,
	2021			2020			2021			2020
Revenues	$	21,830		$	26,187		$	90,500		$	101,749
Costs of processing and distribution		9,497			13,417			29,775			44,002
Gross profit, as reported		12,333			12,770			60,725			57,747
Inventory write-off		—			5,736			—			9,367
Supplier prepayment write-off		3,000			—			3,000			—
Inventory purchase price adjustment		497			1,180			2,036			3,409
Non-GAAP gross profit, adjusted		15,830			19,686			65,761			70,523
Non-GAAP gross profit percentage, adjusted		72.5	%		75.2	%		72.7	%		69.3	%


SURGALIGN HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Net Loss Applicable to Commons Shares to Adjusted EBITDA
(Unaudited, in thousands)

	For the Three Months Ended December 31,						For the Twelve Months Ended December 31,
	2021			2020			2021			2020
Net (loss) income for continuing operations	$	(88,821	)	$	(118,056	)	$	(122,906	)	$	(194,195	)
Interest expense (income), net		—			31			—			(61	)
Provision (benefit) for income taxes		118			6			(886	)		(3,486	)
Depreciation		602			831			2,457			3,566
Amortization of intangible assets		—			(253	)		—			889
EBITDA		(88,101	)		(117,441	)		(121,335	)		(193,287	)
Reconciling items impacting EBITDA		—			—
Non-cash stock based compensation		994			978			5,212			5,736
Foreign exchange (gain) loss		526			(307	)		1,447			(279	)
Other reconciling items *		—
Inventory write-off		—			5,736			—			9,367
Supplier prepayment write-off		3,000			—			3,000			—
Other operating income		—			—			(3,932	)		—
Inventory purchase price adjustment		497			1,180			2,036			3,409
Asset Acquisition Expenses		72,087			93,501			72,087			94,999
Restatement and related costs		—			515			—			13,152
Change in fair value of warrant liability		(4,474	)		—			(14,736	)		—
Loss (Gain) on acquisition contingency		(1,034	)		4,883			(4,587	)		4,753
Bargain purchase gain		—			—			(90	)		—
Asset impairment and abandonments		2,401			2,656			12,195			14,773
Transaction and integration expenses		1,179			544			3,689			4,872
Severance and restructuring costs		(10	)		34			208			34
Adjusted EBITDA	$	(12,935	)	$	(7,721	)	$	(44,806	)	$	(42,471	)
Adjusted EBITDA as a percent of revenues		-59	%		-29	%		-50	%		-42	%

*See explanations in Non-GAAP Financial Measures above.


SURGALIGN HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Net (Loss) Income Applicable to Common Shares and Net (Loss) Income Per Diluted Share to Adjusted Net (Loss) Income Applicable to Common Shares and Adjusted Net (Loss) Income Per Diluted Share
(Unaudited, in thousands except per share data)

	For the Three Months Ended
	December 31, 2021						December 31, 2020
	Net (Loss) Income Applicable to Common Shares			Amount Per Diluted Share			Net (Loss) Income Applicable to Common Shares			Amount Per Diluted Share
Net (loss) income for continuing operations	$	(88,821	)	$	(0.64	)	$	(118,056	)	$	(1.51	)
Change in fair value of warrant liability		(4,474	)		(0.03	)		—			0.00
Loss (Gain) on acquisition contingency		(1,034	)		(0.01	)		4,883			0.06
Supplier payment write-off		3,000			0.02			—			0.00
Asset acquisition expenses		72,087			0.52			93,501			1.20
Bargain purchase gain		—			0.00			—			0.00
Other operating income, net		—			0.00			—			0.00
Asset impairment and abandonments		2,401			0.02			2,656			0.03
Transaction and integration expenses		1,179			0.01			544			0.01
Inventory purchase price adjustment		497			0.00			5,736			0.07
Inventory write-off		—			0.00			1,180			0.02
Restatement and related costs		—			0.00			515			0.01
Severance and restructuring costs		(10	)		0.00			34			0.00
Tax effect on new tax legislation		—			0.00			73			0.00
Tax effect on other adjustments		—			0.00			(2,616	)		(0.03	)
Adjusted *	$	(15,175	)	$	(0.11	)	$	(11,550	)	$	(0.14	)

*See explanations in Non-GAAP Financial Measures above.

	For the Twelve Months Ended
	December 31, 2021						December 31, 2020
	Net (Loss) Income Applicable to Common Shares			Amount Per Diluted Share			Net (Loss) Income Applicable to Common Shares			Amount Per Diluted Share
Net loss from continuing operations	$	(122,906	)	$	(1.00	)	$	(194,195	)	$	(2.61	)
Change in fair value of warrant liability		(14,736	)		(0.12	)		—			0.00
Loss (Gain) on acquisition contingency		(4,587	)		(0.04	)		4,753			0.06
Supplier payment write-off		3,000			0.02			—			0.00
Asset acquisition expenses		72,087			0.59			94,999			1.28
Bargain purchase gain		(90	)		0.00			—			0.00
Other operating income, net		(3,932	)		(0.03	)		—			0.00
Asset impairment and abandonments		12,195			0.10			14,773			0.20
Transaction and integration expenses		3,689			0.03			4,872			0.07
Inventory purchase price adjustment		2,036			0.02			3,409			0.05
Inventory write-off		—			0.00			9,367			0.13
Restatement and related costs		—			0.00			13,152			0.18
Severance and restructuring costs		208			0.00			34			0.00
Tax effect on new tax legislation		—			0.00			(3,464	)		(0.05	)
Tax effect on other adjustments		(28	)		0.00			(11,519	)		(0.15	)
Adjusted *	$	(53,064	)	$	(0.43	)	$	(63,819	)	$	(0.84	)

*See explanations in Non-GAAP Financial Measures above.

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Artificial Intelligence

Lucinity’s AI Innovation Recognized at Microsoft’s Prestigious Global Partner Awards 2024

Published

2 days ago

June 28, 2024

CISION (PR Newswire)

REYKJAVIK, Iceland, June 28, 2024 /PRNewswire/ — Lucinity has been recognized as a finalist in the AI Innovation category at the prestigious Microsoft Global Partner Awards 2024, recognizing its breakthrough AI solution and contribution to financial security through its collaboration with Microsoft.

Lucinity beat more than 4,700 companies to be named a finalist at the annual Microsoft Global Partner Awards, which highlights Lucinity’s achievements as a Microsoft partner in optimizing business processes, improving customer experiences, and opening new pathways for digital transformation.
This achievement comes in addition to winning two prestigious awards at Microsoft Partner Awards 2024 last month, including Partner of the Year – Iceland, and the Sustainability and Social Impact award.
The accolade recognizes Lucinity’s significant advancements in AI for financial crime operations, particularly through their AI-powered copilot, Luci. This innovative solution utilizes Microsoft Azure OpenAI technology to integrate advanced generative AI into financial crime investigations and regulatory compliance, optimizing processes and saving significant time and resources for financial institutions.
The Lucinity platform streamlines compliance, provides instant insights, and reduces typical investigation times from three hours to just 30 minutes. The technology can also save financial institutions an estimated $100 million in productivity savings, as well as savings in training and recruitment.
Microsoft comments on Lucinity’s award recognition, saying “Financial crime profoundly impacts our global community, with far-reaching economic, security, and social implications. It can harm a country’s reputation and increase exposure to criminal activities, emphasizing the critical need for robust anti-money laundering initiatives and persistent vigilance. Lucinity, with their innovative AI solutions, has really tried to combat this huge global challenge. They use ‘Human AI’ to enhance financial crime prevention, combining AI with human expertise for efficient, user-friendly solutions. Additionally, Lucinity has developed a tool called Luci, an AI-powered copilot that helps transform financial crime prevention from a process that took hours to one that takes minutes.”
“Being recognized as a finalist at the Microsoft Global Partner Awards is validation of our impactful collaboration with Microsoft in financial crime operations. Our partnership has been pivotal for our innovations, enabling us to use Azure OpenAI to bring tools like Luci to life and deliver impactful results for our clients,” says Guðmundur Kristjánsson, Founder & CEO of Lucinity.
Contact:Name: Celina PabloEmail: [email protected]: +354 792 4321
Logo: https://mma.prnewswire.com/media/2208676/4669079/Lucinity_Logo.jpg

View original content:https://www.prnewswire.co.uk/news-releases/lucinitys-ai-innovation-recognized-at-microsofts-prestigious-global-partner-awards-2024-302186091.html

Artificial Intelligence

Asia Pacific View: Foreigners Looking for the Most Practical Smart Technology at the 2024 World Intelligence Expo

Published

2 days ago

June 28, 2024

CISION (PR Newswire)

asia-pacific-view:-foreigners-looking-for-the-most-practical-smart-technology-at-the-2024-world-intelligence-expo

BEIJING, June 28, 2024 /PRNewswire/ — Bionic robots that speak both Chinese and English can have the same skin and nails as humans? A flying car powered solely by wind can have a maximum payload of 160 kg? A smart wheelchair can control its operation with just the “mind”? Kevin and Daria, two foreign bloggers, have experienced during the World Intelligence Expo held in Tianjin how the artificial intelligence can empower people’s future lives in industries such as technology, trade, logistics and cultural tourism.

With the theme of “Intelligent Travel Empowering Future”, the Expo integrates exhibitions, experiences and events, attracting more than 550 exhibitors and institutions from all over the world, including more than 70 well-known enterprises such as Huawei, Alibaba, Baidu and Danfoss, and 57 universities and research institutions such as Peking University, Tsinghua University, Nankai University and Tianjin University. The Expo set up 10 major themes such as artificial intelligence, intelligent networked vehicles, intelligent manufacturing and robots, covering the frontier hot spots of the intelligent industry. A number of cutting-edge new technologies, new products, and new experiences from all over the world were showcased centrally, reminding people that technology will completely change the lifestyles in the future.
At the exhibition site, various intelligent robot products such as humanoid robots, bionic robots, and intelligent robot dogs interact with the audience on the spot. They are no longer fantasies in science fiction or movies, but play an important role in monitoring, rescue, cultural tourism and other fields. In the low-altitude economic exhibition area, a number of drones, flying vehicles, and aerospace technology companies collectively display advanced technology products. A low-altitude aircraft shaped like a helicopter brought by the German company Tensor can independently complete cargo transportation, takeoff and landing according to pre-set routes according to the instructions. Robotic arms incorporating technologies such as 5G, IoT, edge computing, rocker robotics, and artificial intelligence can shoot high-frame-rate video and support autofocus, achieving effects that cannot be achieved in traditional shooting modes. Viewers can also have more novel experiences with the help of smart technology.
The Expo also hosted three major events such as the Asia-Pacific Robotics World Cup Tianjin International Invitational, the World Intelligent Driving Challenge, and the International Intelligent Sports Conference. A number of technological achievements and innovative applications were demonstrated in the competitions. For exhibiting companies, this Expo is also an opportunity to further promote the transformation of enterprises to information technology and digitalization, and will also bring huge business opportunities.
Contact: Guo RanPhone: 008610-68332663Email: [email protected]
Video: https://www.youtube.com/watch?v=VjjzurfN_r0 Logo: https://mma.prnewswire.com/media/2451195/logo_Asia_Pacific_View_Logo.jpg

View original content:https://www.prnewswire.co.uk/news-releases/asia-pacific-view-foreigners-looking-for-the-most-practical-smart-technology-at-the-2024-world-intelligence-expo-302186046.html

Artificial Intelligence

Tech Companies Leading the Charge in the Transformative AI Era

Published

2 days ago

June 28, 2024

CISION (PR Newswire)

USA News Group Commentary
Issued on behalf of Avant Technologies Inc.
VANCOUVER, BC, June 28, 2024 /PRNewswire/ — USA News Group – The world is changing rapidly thanks to artificial intelligence (AI), with what’s being called the Transformative AI era which comes with great benefits and also potential dangers. The economic impacts are global, with a new report from The Bank for International Settlements (BIS) urging central banks to adapt rapidly to AI advances. Now it’s become apparent how important it is for companies to understand how to harness the full potential of GenAI to secure strategic revenue growth in the coming years. The surge of AI’s usefulness is accelerating innovation in R&D, while behind the scenes tech companies are advancing the infrastructure required to keep this revolution going, including new developments from Avant Technologies Inc. (OTCQB: AVAI), Accenture plc (NYSE: ACN), Cloudflare, Inc. (NYSE: NET), Alphabet Inc. (NASDAQ: GOOG, GOOGL), and Amazon.com, Inc. (NASDAQ: AMZN).

Known for pioneering advancements in AI, Avant Technologies Inc. (OTCQB: AVAI) has persistently refined and expanded its premier offering, Avant AI™. This sophisticated AI platform, celebrated for its machine learning and deep learning capabilities, is the culmination of Avant’s efforts to deliver unprecedented and cost-effective compute infrastructure that unlocks the full potential of AI and ushers in a new era of technological advancement.
“There is a real unmet need as rapid growth across the entirety of the AI and big data industries is outpacing the necessary infrastructure for an industry that demands exponential power and capacity while remaining cost effective,” said Avant’s CEO William Hisey in a recent address of progress on AI supercomputer-driven data centers. “Avant’s ‘edge-native’ approach doesn’t rely on cloud-based services so we can offer AI and big data companies many advantages over the more familiar ‘cloud-native’ approach, including, reduced latency, improved security and privacy, increased scalability, and reduced costs.”
In a recent strategic development, Avant entered into a Binding Letter of Intent (BLOI) with Flow Wave, LLC (FW), a prominent Florida-based firm specializing in immersible computer server technology. This agreement allows Avant to acquire up to 50 cutting-edge immersible computer servers from FW, in a transaction valued at $50 million.
“By integrating proprietary machine learning algorithms with open-source innovations into these servers, Avant is developing a highly intelligent system designed to optimize resource allocation, enhance performance, and drive unprecedented levels of efficiency and automation,” said Hisey. “This marks the beginning of a new era for Avant Technologies, positioning us at the forefront of the supercomputer-driven data center industry and setting new standards for managing and storing AI applications.”
Flow Wave Immersible AI Supercomputer Servers are engineered for demanding AI and machine learning applications, delivering powerful processing capabilities that accelerate data analysis. Their cutting-edge cooling system is both energy-efficient and cost-effective, reducing environmental impact. These servers’ compact design facilitates easy installation in space-constrained data centers, and their robust construction ensures longevity and lower maintenance requirements.
In response to digital era challenges, Avant intends to acquire up to 50 of these high-performance servers. Their superior cooling technology boosts performance while conserving energy, aligning with Avant’s goal of providing top-tier AI infrastructure and maximizing efficiency. Additional details about the acquisition will be shared once the final agreement is secured.
In Q3 2024, Accenture plc (NYSE: ACN) brought in over $900 million in new Generative AI bookings, for a total of $2 billion fiscal year-to-date. Despite missing its overall earnings targets, the market responded by sending its shares upward.
“We achieved strong new bookings of over $21 billion, up 22% over last year, and continued to accelerate our strategy to be the reinvention partner of choice, with another 23 clients with quarterly bookings of over $100 million, bringing the total of such bookings to 92 year-to-date,” said Julie Sweet, Chair and CEO of Accenture. “We also achieved two significant milestones this quarter — with $2 billion in Generative AI sales year-to-date and $500 million in revenue year-to-date — which demonstrate our early lead in this critical technology.”
Back in May, Accenture took steps to help its clients to scale their Generative AI responsibly.
“Clients are eager to embrace the potential of generative AI, and we are ready to help them build responsible AI into every use,” said Sweet. “We do this for ourselves, and we can use that example to help our clients find success faster. Our focus is to enable our clients to innovate AI safely and be ready to seize the opportunities that AI will bring in the decades ahead.”
Recently, the cloud-based security solution provider Cloudflare, Inc. (NYSE: NET) unveiled the general availability of its AI Gateway platform. Marketed as a comprehensive interface for managing and scaling generative AI workloads, the platform has transitioned from its beta phase, which started in September 2023, to full client use after successfully handling over 500 million requests.
This launch coincides with Cloudflare’s announcement of a partnership with Hugging Face, a leading platform for AI developers. The collaboration offers a one-click global deployment for AI applications via the Workers AI platform, now also generally available. As the first serverless inference partner integrated on the Hugging Face Hub, this allows developers to deploy AI models quickly, easily, and cost-effectively on a global scale, without the need for managing infrastructure or paying for unused compute capacity.
“Workers AI is one of the most affordable and accessible solutions to run inference,” said Matthew Prince, CEO and co-founder, Cloudflare. “With Hugging Face and Cloudflare both deeply aligned in our efforts to democratize AI in a simple, affordable way, we’re giving developers the freedom and agility to choose a model and scale their AI apps from zero to global in an instant.”
In the education space, Alphabet Inc. (NASDAQ: GOOG, GOOGL) through Google, is bringing new AI tools to Google Workspace for teen students using their school accounts to help them learn responsibly and confidently in an AI-first future, and empowering educators with new tools to help create great learning experiences.
“In the coming months, we’re making Gemini available to teen students that meet our minimum age requirements while using their Google Workspace for Education accounts in English in over 100 countries around the world, free of charge for all education institutions,” said Google in a blog post. “To ensure schools are always in control, Gemini will be off by default for teens until admins choose to turn it on as an Additional Service in the Admin console.”
Google has also developed a number of resources and trainings to help students, parents and educators use generative AI tools responsibly and effectively, including a video on how teens can responsibly use AI while learning.
After recently hitting a $2-trillion valuation, Amazon.com, Inc. (NASDAQ: AMZN) continues to be a big player in the AI space. Now it’s reportedly working on its own AI chatbot that some say might be smarter than ChatGPT, named Metis, which will generate answers by grabbing info from the internet.
Metis is driven by an internal Amazon AI model known as Olympus, drawing inspiration from Greek mythology. According to sources, Olympus is a more advanced version of Amazon’s publicly available Titan model.
Amazon’s CEO Andy Jassy has noted that nearly every division within the company is engaged in some form of AI project. As a pioneer in cloud computing, Amazon has been developing machine learning, a subset of AI, for many years. Jassy recently announced that Amazon’s AI initiatives are projected to generate over $1 billion in annual revenue, with expectations of driving “tens of billions of dollars” in sales in the coming years.
However, Amazon has lagged in the realm of consumer AI assistants. An internal document from last year highlighted that Amazon “does not have a publicly or internally available product that looks and works exactly like ChatGPT.”
According to a source reported by Business Insider, the tentative launch date for Metis is September, right around the time when Amazon is set to host a big Alexa event, although the timeline could still change.
Source: https://usanewsgroup.com/2023/10/26/unlocking-the-trillion-dollar-ai-market-what-investors-need-to-know/
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