Comtech Appoints Ken Peterman President and Chief Executive Officer

Research, News, and Market Data on Comtech Telecommunications

Company reiterates its financial guidance for the fiscal fourth
quarter and full year 2022

MELVILLE, N.Y.–(BUSINESS WIRE)–Aug. 10, 2022– August 10, 2022 — Comtech Telecommunications Corp. (NASDAQ: CMTL) today announced that its Board of Directors has appointed Chairman Ken Peterman President and Chief Executive Officer, succeeding Michael Porcelain effective immediately. Mr. Porcelain has also resigned from Comtech’s Board of Directors. Mr. Porcelain will be available to assist in the transition as needed.

Mr. Peterman joined the Comtech Board in May 2022 after the Board initiated a national search process in January 2022 with the goal of deepening the Board’s industry experience and strengthening its executive leadership expertise. Mr. Peterman’s career spans over 40 years leading major organizations in the creation of innovative, technology-enabled solutions addressing some of the world’s most challenging customer problems. A recognized thought leader in defense and aerospace, Mr. Peterman earned distinguished credentials across multiple technology sectors in both commercial and government markets at companies including Viasat, ITT/Exelis, Collins Aerospace, Raytheon and SpyGlass Group. Most recently, Mr. Peterman served as President of the Government Systems Segment of Viasat.

“Based on the Board’s extensive interactions with Ken since the beginning of 2022, we are confident Ken is the right leader to accelerate Comtech’s ongoing transformation,” said Lead Independent Director Lawrence Waldman. “The refreshed Board is excited to support Ken as he executes on his strategic vision for the Company.”

“I am genuinely excited about Comtech’s enormous potential. Thanks to our dedicated employees, our mission-critical technology portfolio, and our customer-centric culture, I believe Comtech is uniquely positioned to capitalize on the significant investment, steepening growth trajectories and continual renewal cycles taking place in assured communications, space and satellite networks and next-generation 911 failsafe communications infrastructures,” said Chairman and CEO Ken Peterman. “I’d like to thank Mike for his hard work and long-standing dedication to Comtech as well as for the recent groundwork he established to set the stage for the Company’s exciting next chapter. I look forward to engaging more deeply with our employees, customers, partners, and shareholders around the world over the coming weeks.”

“We’re grateful to Mike for his many contributions to the Company over the past 20 years in a variety of key positions,” added Judy Chambers, Head of the Nominating and Governance Committee of the Comtech Board. “We thank him for his longtime commitment to the Company, its customers, and its employees.”

“It has been an honor to lead Comtech,” said Mr. Porcelain. “After serving more than 20 years as a senior executive and positioning the Company for its next chapter, it is the right time for me to take a breather and spend time with my family before moving on to my next endeavor. I appreciated the opportunity to work with the Board to set the Company on a new path, and I know our platform, technologies and teams are in good hands. I intend to remain a shareholder of the Company and will be rooting for Comtech every step of the way.”

The Company reiterates its financial guidance for the fiscal fourth quarter and full year 2022, as provided in a press release issued on June 9, 2022.

About Comtech

Comtech Telecommunications Corp. is a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies to commercial and government customers around the world. Headquartered in Melville, New York and with a passion for customer success, Comtech designs, produces and markets advanced and secure wireless solutions. For more information, please visit www.comtech.com.

Forward-Looking
Statements

Certain information in this press release contains statements that are forward-looking in nature and involve certain significant risks and uncertainties. Actual results could differ materially from such forward-looking information. The Company’s Securities and Exchange Commission filings identify many such risks and uncertainties. Any forward-looking information in this press release is qualified in its entirety by the risks and uncertainties described in such Securities and Exchange Commission filings.

PCMTL

View source version on businesswire.com: https://www.businesswire.com/news/home/20220809006117/en/

Investor
Relations
Robert Samuels
631-962-7102

robert.samuels@comtech.com

Source: Comtech Telecommunications Corp.

 

Tuesday, August 09, 2022

Information Services Group (III)
Another Solid Quarter

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

More Records. ISG announced revenue of $70.7 million for the second quarter, flat with the $70.6 million in the year ago period. On a constant currency basis, revenue rose 5%. The quarter had record net income of $5.0 million, or $0.10 fully diluted EPS, versus $4.1 million and $0.08 the previous year. Adjusted EBITDA also was a record at $10.7 million, a 10% increase year-over-year.

Quarterly Drivers. Revenue was negatively impacted by a higher forex headwind than anticipated. In addition, the completion of a large Automation contract and relatively soft environment in the vertical negatively impacted overall revenue. Nonetheless, ISG continues to see growing demand for specialized services like cybersecurity, data analytics, application development, and technology modernization as well as an increased focus from clients on cost optimization….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

V2X (Formerly Vectrus) Reports Strong Second Quarter 2022 Results

Research, News, and Market Data on V2X

Company Release – 
8/9/2022

Important Note: On July 5, 2022, Vectrus, Inc. closed on the
merger with The Vertex Company (“the Transaction”) and in connection
with the closing was renamed V2X, Inc. “Reported results” reflect the
contributions of Vectrus, Inc. based on results prior to the close of the
Transaction, unless otherwise noted.

Vectrus Second Quarter Highlights:

• Second quarter revenues of $498 million, up +6% Y/Y
• Operating income (inclusive of V2X transaction expenses) of $15.0 million with a margin of 3.0%
• Adjusted EBITDA¹ of $24.7 million with a margin of 5.0%
• Second quarter fully diluted EPS of $0.88; Adjusted diluted EPS¹ of $1.41
• Strong second quarter operating cash flow of $46 million

Guidance:

• The V2X merger closed on July 5, 2022, creating a more diversified company generating approximately $3.6 billion in combined pro forma annual revenue
• Establishing second-half 2022 guidance for V2X that reflects the contributions of both Vectrus and Vertex with a total revenue range of $1.90 to $1.94 billion, an Adjusted EBITDA¹ range of $140 to $150 million, and an operating cash flow range of $130 to $150 million

MCLEAN, Va., Aug. 9, 2022 /PRNewswire/ — V2X, Inc. (NYSE:VVX) announced second quarter 2022 financial results. The second quarter 2022 results are based on Vectrus’ stand-alone financial metrics for the period ended July 1, 2022, and do not include contribution from The Vertex Company.

Transaction
Update

“We’re excited to announce the successful combination of Vectrus and The Vertex Company, creating a larger, higher margin and more diversified, V2X,” said Chuck Prow, Chief Executive Officer of V2X.  “With 14,000 employees, $3.6 billion in pro forma annual revenue, and $290 million of Adjusted EBITDA, V2X is a leader in the operational segment of the federal services market providing converged solutions throughout the mission lifecycle of our clients most critical and enduring global missions.”

Prow continued, “V2X has a strong financial profile with significant free cash flow and long-term revenue visibility through several notable contract wins that are in the early stages of their lifecycle. These wins are reflected in the company’s trailing twelve-month awards of approximately $6 billion, which include two recent significant awards at Vertex, the Naval Test Wing Atlantic, a seven-year program valued at $850 million, and the Air Force Global Strike Command five-year contract valued at $130 million. This also includes $600 million of awards booked at Vectrus during the quarter that were driven by expansion and increased scope on existing programs as well as follow-on contracts. The strong velocity of awards has resulted in a significant backlog of approximately $12 billion that provides solid visibility over the next several years.”

“In summary, the financial and strategic attributes of V2X are compelling,” added Prow. “Our integration activities are well underway and the commitment to our clients, the missions we are privileged to support, and delivering results remains our focus.”

Vectrus
Second Quarter Results

“Second quarter results for stand-alone Vectrus were strong, propelled by top-line performance and favorable operating cash flow,” said Prow.  “During the quarter, revenue grew 6% year-over-year and 9% sequentially to $498 million. Revenue growth was driven by building on the momentum of programs in INDOPACOM and Europe, along with successful phase-in of new contracts, including the Logistics Readiness Center at Fort Benning,” said Prow.  “Each day, our global team of dedicated employees execute on our core programs while also bringing innovation and technology-oriented solutions to complex challenges throughout the mission lifecycle.”  

“With a high-level readiness to meet the needs of our clients, the team continued its support of several important missions during the quarter, including providing the DoD with urgent and compelling services for the European Deterrence Initiative,” said Prow. “We leveraged our rapid response capability and over 40-year history of operating in Europe to provide the DoD with unique services in support of this complex and ongoing mission. Additionally, achieving full operational capability on LOGCAP V Kwajalein, approximately a month and a half ahead of schedule, has helped to expand our footprint in the INDOPACOM region. Activity in the region remains robust and our position continues to expand. For example, we recently expanded our scope of responsibilities at Subic Bay in the Philippines.  This program is expected to run over the next eight years and provides strategic logistics services to the DoD.  Work content in the INDOPACOM region now represents 9% of total revenue, up 3% from last year, and positions us well to support the DoD in a full range of operations over the next ten years.”

“Adjusted EBITDA for the quarter was strong at $24.7 million or 5.0% margin.  Adjusted EBITDA increased sequentially $6.5 million and was driven by higher revenue volume and success on operational excellence initiatives.  We remain focused on margin improvement, and this quarter’s results reflect our ability to expand earnings even as we execute on several programs in the early phases of period of performance. As we have noted in the past, LOGCAP V is generating higher revenue volume with a greater amount of material and pass-through content that has a different margin complexion. However, our teams are focused on driving program efficiencies and improving margin rates through contract add-on work while working with clients to convert certain components of work to more advantageous contract structures.”

Prow concluded, “Our second quarter results demonstrate the Company’s success in achieving top-line growth through increased work scope on existing programs, expansion of capabilities, broadening our geographic footprint, and adding new clients.  As we embark on the Company’s new chapter as V2X, I am excited about the greater scale, market leadership, and enhanced portfolio of offerings with the Vectrus/Vertex combination.”

Second quarter 2022 revenue of $498.1 million was up $27.2 million year on year.  “Revenue grew 6% year-over-year, driven by our transition to full operational capability on LOGCAP V programs in Iraq and Kuwait late last year, and INDOPACOM this year. In addition, revenue benefitted from transitioning Fort Benning and volume associated with rapid response and contingency efforts,” said Susan Lynch, Senior Vice President and Chief Financial Officer. “This revenue growth demonstrates achievement of our enterprise goal of growing the business through contract expansion and portfolio diversity despite the headwinds associated with the withdrawal of the US military from Afghanistan,” added Lynch. 

Operating income was $15.0 million or 3.0% margin.  This includes M&A and integration related expenses of $5.9 million and amortization of acquired intangible assets of $2.1 million which were incurred in the quarter.  Adjusted operating income¹ was $23.0 million or 4.6% margin, increasing sequentially by $6.4 million and 100 basis points.  Adjusted EBITDA¹ was $24.7 million or 5.0% margin, increasing sequentially by $6.5 million and 100 basis points.  Adjusted EBITDA margin compares to $26.6 million or 5.6% in the prior year period. “The year-on-year margin change was influenced by the significant amount of revenue and contracts that are in the early stages of their lifecycle.  In aggregate, on average and over time, we expect to see improvement in the margin profile as we drive operational efficiencies and diversify into higher margin scopes of work,” said Lynch.

Fully diluted EPS for the second quarter of 2022 was $0.88 as compared to $1.35 in the prior year.  Fully diluted EPS in the quarter included the aforementioned M&A and integration related costs.  Adjusted diluted EPS¹ was $1.41 in the quarter as compared to $1.52 in the prior year. The year-on-year change in Adjusted diluted EPS¹ was primarily due to the above-mentioned change in Adjusted EBITDA¹.

Cash generated from operating activities for the quarter was $46.0 million.  Through July 1, 2022, net cash from operating activities was $19.6 million, compared to net cash from operating activities of $14.0 million through the second quarter of 2021. Cash from operating activities through the first half of 2022 was negatively impacted by an approximately $8.0 million repayment of CARES Act tax deferrals and $5.8 million of merger-related payments.

Net debt on July 1, 2022, was $58.4 million, compared to $105.2 million on July 2, 2021.  Total debt on July 1, 2022, was $90.2 million, down $84.8 million from $175.0 million on July 2, 2021. Cash at quarter-end was $35.1 million.  Total consolidated indebtedness to consolidated EBITDA¹ (total leverage ratio) was 1.09x compared to 1.76x at the same time last year.

Total backlog as of July 1, 2022, was $4.6 billion.  Funded backlog was $1.3 billion. 

V2X
Guidance

Lynch continued, “We are establishing second half 2022 guidance ranges for V2X, which includes the contribution from both Vectrus and The Vertex Company.”

V2X guidance for the second half (2H) 2022 is as follows:

$ millions, except for EBITDA margins and per share amounts	V2X 2H 2022 Guidance
Revenue	$1,900	to	$1,940
Adjusted EBITDA1	$140	to	$150
Adjusted Diluted Earnings Per Share 1	$1.94	to	$2.19
Net Cash Provided by Operating Activities	$130	to	$150

Forward-looking statements are based upon current expectations and are subject to factors that could cause actual results to differ materially from those suggested here, including those factors set forth in the Safe Harbor Statement below. 

Second Quarter 2022 Conference Call

Management will conduct a conference call with analysts and investors at 4:30 p.m. ET on Tuesday, August 9, 2022. U.S.-based participants may dial in to the conference call at 877-242-2259, while international participants may dial 416-981-9017. A live webcast of the conference call as well as an accompanying slide presentation will be available on the Vectrus Investor Relations website at https://app.webinar.net/P4Qe37VDnop.

A replay of the conference call will be posted on the V2X website shortly after completion of the call and will be available for one year. A telephonic replay will also be available through August 23, 2022, at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 22020062.    

Footnotes:

¹ See “Key Performance Indicators and Non-GAAP Financial Measures” for descriptions and reconciliations.

About V2X

V2X is a leading provider of critical mission solutions and support to defense clients globally, formed by the 2022 merger of Vectrus and The Vertex Company to build on more than 120 combined years of successful mission support. The Company delivers a comprehensive suite of integrated solutions across the operations and logistics, aerospace, training and technology markets to national security, defense, civilian and international clients. Our global team of approximately 14,000 employees brings innovation to every point in the mission lifecycle, from preparation, to operations, to sustainment, as it tackles the most complex challenges with agility, grit, and dedication.

Safe Harbor Statement

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 (the “Act”): Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Act. These forward-looking statements include, but are not limited to, all the statements and items listed in the table in “2022 Guidance” above and other assumptions contained therein for purposes of such guidance, other statements about our 2021 performance outlook, five-year growth plan, revenue, DSO, contract opportunities, the potential impact of COVID-19, and any discussion of future operating or financial performance.

Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “could,” “potential,” “continue” or similar terminology. These statements are based on the beliefs and assumptions of the management of the Company based on information currently available to management.

These forward-looking statements are not guarantees of future performance, conditions, or results, and involve a number of known and unknown risks, uncertainties, assumptions, and other important factors, many of which are outside our management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements.  In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company’s historical experience and our present expectations or projections. For a discussion of some of the risks and important factors that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the U.S. Securities and Exchange Commission.

We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

V2X, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
		Three Months Ended				Six Months Ended
		July 1,		July 2,		July 1,		July 2,
(In thousands, except per share data)		2022		2021		2022		2021
Revenue		$      498,066		$             470,845		$         954,537		$         904,849
Cost of revenue		453,305		422,660		872,581		816,308
Selling, general, and administrative expenses		29,740		25,605		61,699		49,427
Operating income		15,021		22,580		20,257		39,114
Interest expense, net		(1,963)		(2,253)		(3,643)		(4,186)
Income from operations before income taxes		13,058		20,327		16,614		34,928
Income tax expense		2,586		4,393		3,287		6,946
Net income		$         10,472		$               15,934		$           13,327		$           27,982
Earnings per share
Basic		$           0.89		$                   1.36		$               1.13		$               2.40
Diluted		$           0.88		$                   1.35		$               1.12		$               2.37
Weighted average common shares outstanding – basic		11,826		11,715		11,793		11,681
Weighted average common shares outstanding – diluted		11,954		11,828		11,917		11,823

 

V2X, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
		July 1,		December 31,
(In thousands, except per share information)		2022		2021
Assets
Current assets
Cash and cash equivalents		$                   31,760		$                   38,513
Restricted cash		3,311		__—_
Receivables		374,980		348,605
Prepaid expenses		26,262		21,160
Other current assets		10,646		15,062
Total current assets		446,959		423,340
Property, plant, and equipment, net		23,530		23,758
Goodwill		321,734		321,734
Intangible assets, net		62,159		66,582
Right-of-use assets		39,705		43,651
Other non-current assets		11,760		10,394
Total non-current assets		458,888		466,119
Total Assets		$                 905,847		$                 889,459
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable		$                 244,080		$                 212,533
Compensation and other employee benefits		82,534		80,284
Short-term debt		10,400		10,400
Other accrued liabilities		48,322		55,031
Total current liabilities		385,336		358,248
Long-term debt, net		78,884		94,246
Deferred tax liability		32,489		32,214
Operating lease liability		30,719		34,536
Other non-current liabilities		14,941		20,128
Total non-current liabilities		157,033		181,124
Total liabilities		542,369		539,372
Commitments and contingencies (Note 9)
Shareholders’ Equity
Preferred stock; $0.01 par value; 10,000,000 shares authorized; No shares issued and outstanding		—		—
Common stock; $0.01 par value; 100,000 shares authorized; 11,846 and 11,738 shares issued and outstanding as of July 1, 2022, and December 31, 2021, respectively		118		117
Additional paid in capital		91,464		88,116
Retained earnings		281,081		267,754
Accumulated other comprehensive loss		(9,185)		(5,900)
Total shareholders’ equity		363,478		350,087
Total Liabilities and Shareholders’ Equity		$                 905,847		$                 889,459

 

V2X, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
		Six Months Ended
		July 1,		July 2,
(In thousands)		2022		2021
Operating activities
Net income		$              13,327		$              27,982
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		3,238		3,097
Amortization of intangible assets		4,423		4,891
(Gain) Loss on disposal of property, plant, and equipment		(15)		60
Stock-based compensation		4,725		4,923
Amortization of debt issuance costs		388		463
Changes in assets and liabilities:
Receivables		(29,302)		(38,882)
Prepaid expenses		(5,321)		(4,660)
Other assets		5,185		597
Accounts payable		32,470		18,784
Deferred taxes		—		370
Compensation and other employee benefits		2,507		11,285
Other liabilities		(11,989)		(14,884)
Net cash provided by operating activities		19,636		14,026
Investing activities
Purchases of capital assets		(3,492)		(4,833)
Proceeds from the disposition of assets		18		16
Business acquisition purchase price adjustment		—		262
Contribution to joint venture		(2,113)		(1,846)
Net cash used in investing activities		(5,587)		(6,401)
Financing activities
Repayments of long-term debt		(5,200)		(4,000)
Proceeds from revolver		392,000		215,000
Repayments of revolver		(402,000)		(215,000)
Proceeds from exercise of stock options		370		113
Payment of debt issuance costs		(458)		(17)
Payments of employee withholding taxes on share-based compensation		(1,696)		(2,272)
Net cash used in financing activities		(16,984)		(6,176)
Exchange rate effect on cash		(507)		(373)
Net change in cash, cash equivalents and restricted cash		(3,442)		1,076
Cash, cash equivalents and restricted cash – beginning of year		38,513		68,727
Cash, cash equivalents and restricted cash – end of period		$              35,071		$              69,803
Supplemental disclosure of cash flow information:
Interest paid		$                3,409		$                3,111
Income taxes paid		$                6,112		$                5,747
Purchase of capital assets on account		$                    13		$                   618

Key Performance Indicators and Non-GAAP Measures

The primary financial performance measures we use to manage our business and monitor results of operations are revenue trends and operating income trends. Management believes that these financial performance measures are the primary drivers for our earnings and net cash from operating activities. Management evaluates its contracts and business performance by focusing on revenue, operating income, and operating margin. Operating income represents revenue less both cost of revenue and selling, general and administrative (SG&A) expenses. Cost of revenue consists of labor, subcontracting costs, materials, and an allocation of indirect costs, which includes service center transaction costs. SG&A expenses consist of indirect labor costs (including wages and salaries for executives and administrative personnel), bid and proposal expenses and other general and administrative expenses not allocated to cost of revenue. We define operating margin as operating income divided by revenue.

We manage the nature and amount of costs at the program level, which forms the basis for estimating our total costs and profitability. This is consistent with our approach for managing our business, which begins with management’s assessing the bidding opportunity for each contract and then managing contract profitability throughout the performance period.

In addition to the key performance measures discussed above, we consider adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, and organic revenue to be useful to management and investors in evaluating our operating performance, and to provide a tool for evaluating our ongoing operations. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives. We provide this information to our investors in our earnings releases, presentations, and other disclosures.

Adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, and organic revenue, however, are not measures of financial performance under GAAP and should not be considered a substitute for operating income, operating margin, net income, and diluted earnings per share as determined in accordance with GAAP.  Definitions and reconciliations of these items are provided below.

• Adjusted
  operating income is defined as operating income, adjusted to exclude items that may include, but are not limited to significant charges or credits, and unusual and infrequent non-operating items, such as M&A, integration and related costs, LOGCAP V pre-operational legal costs, and amortization of acquired intangible assets that impact current results but are not related to our ongoing operations.
• Adjusted
  operating margin is defined as adjusted operating income divided by revenue.
• Adjusted
  net income is defined as net income, adjusted to exclude items that may include, but are not limited to, significant charges or credits, and unusual and infrequent non-operating items, such as M&A, integration and related costs, LOGCAP V pre-operational legal costs, and amortization of acquired intangible assets that impact current results but are not related to our ongoing operations.
• Adjusted
  diluted earnings per share is defined as adjusted net income divided by the weighted average diluted common shares outstanding.
• EBITDA is defined as operating income, adjusted to exclude depreciation and amortization.
• Adjusted
  EBITDA is defined as EBITDA, adjusted to exclude items that may include, but are not limited to, significant charges or credits and unusual and infrequent non-operating items, such as M&A, integration and related costs, LOGCAP V pre-operational legal costs that impact current results but are not related to our ongoing operations.
• EBITDA
  margin is defined as EBITDA divided by revenue.
• Adjusted
  EBITDA margin is defined as Adjusted EBITDA divided by revenue.

 

Adjusted Net Income, Adjusted Diluted Earnings Per Share (Non-GAAP Measures)
($K, except per share data)		Three Months Ended July 01, 2022 As Reported		M&A, Integration and Related Costs		LOGCAP V Pre- Operational Legal Costs		Amortization of Acquired Intangible Assets			Three Months Ended July 01, 2022 – Adjusted
Revenue		$       498,066		$                      —		$                     —		$                     —			$       498,066
Growth		5.8 %									5.8 %
Operating income		$         15,021		$                5,879		$                     —		$          2,122			$         23,022
Operating margin		3.0 %									4.6 %
Interest expense, net		$          (1,963)		$                      —		$                     —		$                     —			$          (1,963)
Income from operations before income taxes		$            13,058		$                5,879		$                     —		$               2,122			$         21,059
Income tax expense		$               2,586		$                1,164		$                     —		$                  420			$           4,170
Income tax rate		19.8 %									19.8 %
Net income		$            10,472		$                4,715		$                     —		$               1,702			$         16,889
Weighted average common shares outstanding, diluted		11,954									11,954
Diluted earnings per share		$              0.88		$                  0.39		$                     —		$                 0.14			$             1.41
EBITDA (Non-GAAP Measures)
($K)		Three Months Ended July 01, 2022 As Reported		M&A, Integration and Related Costs		LOGCAP V Pre- Operational Legal Costs		Amortization of Acquired Intangible Assets			Three Months Ended July 01, 2022 – Adjusted
Operating Income		$         15,021		$                5,879		$                     —		$               2,122			$         23,022
Add:
Depreciation and amortization		$        3,769		$                      —		$                     —		$               (2,122)			$           1,647
EBITDA		$         18,790		$                5,879		$                     —		$                     —			$         24,669
EBITDA Margin		3.8 %									5.0 %

 

Adjusted Net Income, Adjusted Diluted Earnings Per Share (Non-GAAP Measures)
($K, except per share data)		Three Months Ended July 02, 2021 As Reported		M&A, Integration and Related Costs		LOGCAP V Pre- Operational Legal Costs		Amortization of Acquired Intangible Assets			Three Months Ended July 02, 2021 – Adjusted
Revenue		$       470,845		$                     —		$                     —		$                     —			$       470,845
Operating income		$      22,580		$                     —		$                   21		$               2,436			$         25,037
Operating margin		4.8 %									5.3 %
Interest expense, net		$          (2,253)		$                     —		$                     —		$                     —			$          (2,253)
Income from operations before income taxes		$         20,327		$                     —		$                   21		$               2,436			$         22,784
Income tax expense		$            4,393		$                     —		$                     4		$                   463			$           4,860
Income tax rate		21.6 %									21.3 %
Net income		$         15,934		$                     —		$                   17		$               1,973			$         17,924
Weighted average common shares outstanding, diluted		11,828									11,828
Diluted earnings per share		$              1.35		$                     —		$                 0.00		$                 0.17			$              1.52
EBITDA (Non-GAAP Measures)
($K)		Three Months Ended July 02, 2021 As Reported		M&A, Integration and Related Costs		LOGCAP V Pre- Operational Legal Costs		Amortization of Acquired Intangible Assets			Three Months Ended July 02, 2021 – Adjusted
Operating Income		$         22,580		$                     —		$                   21		$               2,436			$         25,037
Add:
Depreciation and amortization		$            3,991		$                     —		$                     —		$            (2,436)			$           1,555
EBITDA		$         26,571		$                     —		$                   21		$                     —			$         26,592
EBITDA Margin		5.6 %									5.6 %

 

Adjusted Net Income, Adjusted Diluted Earnings Per Share (Non-GAAP Measures)
($K, except per share data)		Six Months Ended July 01, 2022 As Reported		M&A, Integration and Related Costs			LOGCAP V Pre- Operational Legal Costs		Amortization of Acquired Intangible Assets			Six Months Ended July 01, 2022 – Adjusted
Revenue		$       954,537		$                     —			$                     —		$                     —			$      954,537
Growth		5.5 %										5.5 %
Operating income		$         20,257		$             14,947			$                   —		$               4,423			$        39,627
Operating margin		2.1 %										4.2 %
Interest expense, net		$          (3,643)		$                     —			$                     —		$                     —			$         (3,643)
Income from operations before income taxes		$         16,614		$             14,947			$                   —		$               4,423			$        35,984
Income tax expense		$            3,287		$               2,957			$                     —		$                    875			$          7,119
Income tax rate		19.8 %										19.8 %
Net income		$              13,327		$             11,990			$                   —		$               3,548			$        28,865
Weighted average common shares outstanding, diluted		11,917										11,917
Diluted earnings per share		$              1.12		$                 1.01			$                 —		$                 0.30			$             2.42
EBITDA (Non-GAAP Measures)
($K)		Six Months Ended July 01, 2022 As Reported		M&A, Integration and Related Costs			LOGCAP V Pre- Operational Legal Costs		Amortization of Acquired Intangible Assets			Six Months Ended July 01, 2022 – Adjusted
Operating Income		$         20,257		$             14,947			$                   —		$               4,423			$        39,627
Add:
Depreciation and amortization		$            7,661		$                     —			$                     —		$                (4,423)			$            3,238
EBITDA		$         27,918		$             14,947			$                   —		$                     —			$        42,865
EBITDA Margin		2.9 %										4.5 %

 

Adjusted Net Income, Adjusted Diluted Earnings Per Share (Non-GAAP Measures)
($K, except per share data)		Six Months Ended July 02, 2021 As Reported		M&A, Integration and Related Costs			LOGCAP V Pre- Operational Legal Costs		Amortization of Acquired Intangible Assets			Six Months Ended July 02, 2021 – Adjusted
Revenue		$      904,849		$                    —			$                    —		$                    —			$      904,849
Operating income		$        39,114		$                     —			$                 178		$              4,891			$        44,183
Operating margin		4.3 %										4.9 %
Interest expense, net		$         (4,186)		$                    —			$                    —		$                    —			$         (4,186)
Income from operations before income taxes		$        34,928		$                     —			$                 178		$              4,891			$        39,997
Income tax expense		$          6,946		$                     —			$                   34		$                 929			$          7,909
Income tax rate		19.9 %										19.9 %
Net income		$        27,982		$                     —			$                 144		$              3,962			$        32,088
Weighted average common shares outstanding, diluted		11,823										11,823
Diluted earnings per share		$             2.37		$                     —			$                0.01		$                0.33			$             2.71
EBITDA (Non-GAAP Measures)
($K)		Six Months Ended July 02, 2021 As Reported		M&A, Integration and Related Costs			LOGCAP V Pre- Operational Legal Costs		Amortization of Acquired Intangible Assets			Six Months Ended July 02, 2021 – Adjusted
Operating Income		$        39,114		$                     —			$                 178		$              4,891			$        44,183
Add:
Depreciation and amortization		$          7,988		$                    —			$                    —		$           (4,891)			$          3,097
EBITDA		$        47,102		$                     —			$                 178		$                    —			$        47,280
EBITDA Margin		5.2 %										5.2 %

 

 

SUPPLEMENTAL INFORMATION
Revenue by client branch, contract type, contract relationship, and geographic region for the periods presented below was as follows:
Revenue by Client
		Three Months Ended								Six Months Ended
		July 1,				July 2,				July 1,				July 2,
(In thousands)		2022		%		2021		%		2022		%		2021		%
Army		$    326,756		65 %		$    310,638		66 %		$     606,869		63 %		$      567,987		63 %
Air Force		68,457		14 %		63,206		13 %		129,930		14 %		141,375		16 %
Navy		64,885		13 %		56,399		12 %		140,102		15 %		112,827		12 %
Other		37,968		8 %		40,602		9 %		77,636		8 %		82,660		9 %
Total revenue		$    498,066				$    470,845				$     954,537				$      904,849
Revenue by Contract Type
		Three Months Ended								Six Months Ended
		July 1,				July 2,				July 1,				July 2,
(In thousands)		2022		%		2021		%		2022		%		2021		%
Cost-plus and cost-reimbursable		$    355,559		71 %		$    344,189		73 %		$     666,653		70 %		$      634,420		70 %
Firm-fixed-price		128,348		26 %		111,416		24 %		256,352		27 %		240,173		27 %
Time and material		14,159		3 %		15,240		3 %		31,532		3 %		30,256		3 %
Total revenue		$    498,066				$    470,845				$     954,537				$      904,849
Revenue by Contract Relationship
		Three Months Ended								Six Months Ended
		July 1,				July 2,				July 1,				July 2,
(In thousands)		2022		%		2021		%		2022		%		2021		%
Prime contractor		$    468,453		94 %		$    440,040		93 %		$     895,546		94 %		$      843,303		93 %
Subcontractor		29,613		6 %		30,805		7 %		58,991		6 %		61,546		7 %
Total revenue		$    498,066				$    470,845				$     954,537				$      904,849
Revenue by Geographic Region
		Three Months Ended								Six Months Ended
		July 1,				July 2,				July 1,				July 2,
(In thousands)		2022		%		2021		%		2022		%		2021		%
Middle East		$    250,222		50 %		$    258,488		55 %		$     485,313		51 %		$      498,500		55 %
United States		158,719		32 %		146,549		31 %		325,454		34 %		296,362		33 %
Europe		42,739		9 %		36,084		8 %		81,178		8 %		76,706		8 %
Asia		46,386		9 %		29,724		6 %		62,592		7 %		33,281		4 %
Total revenue		$    498,066				$    470,845				$     954,537				$      904,849

CONTACT: 
V2X, Inc. 
Mike Smith, CFA
719-637-5773

 

Image Credit: Russ Seidel (Flickr)

Is a Metaverse Presence or Product Becoming Less of a Priority for Businesses?

Match Group CEO told Tinder metaverse unit he wants to stay in touch; he has a lot going on right now; that funds are tight, and until we meta again. While he sees a future with the metaverse, there are other units the company has a greater interest in, so it’s not ready for a full commitment.

A number of tech companies had the exact right product for consumers to better adapt to lockdowns during the pandemic. Many of these companies may have gotten ahead of themselves, planning for the lockdown lifestyle to continue strong. Examples include Meta (Meta), which announced last week that it may change its strategy and lay off staff, Peloton (PLTN), which announced in July it will exit all in-house manufacturing and instead outsource more to Taiwan, online retailer Amazon (AMZN), which shrank workers by 100,000 last quarter, and Robinhood (HOOD) which also announced cutting back on staff and growth plans.

Match Group (MTCH) owns dating apps Match.com, Tinder, and Hinge. The CEO, Bernard Kim, cited economic uncertainty as a reason for its pulling its planned investment in Hyperconnect, the company’s metaverse initiative. Bernard Kim discussed these plans in a letter to shareholders dated August 2.

Mr. Kim wrote that he scaled back on Hyperconnect as the company would be reducing its metaverse ambitions. Tinder acquired Hyperconnect last year. The division focuses on video, AI, and augmented reality technology. Its avatar-based “Single Town” experience was planned to be a meeting place in the metaverse for Tinder customers. 

Source: Match
Group Letter to Shareholders (August 2, 2022)

Kim has only been the CEO for 62 days (as of the date on the shareholder letter). He shared that as he settles into the role and shapes the culture of the various divisions, taking advantage of the easier growth potential from lower hanging fruit should come before other priorities. Referring to a slowdown in domestic growth, Kim explained, “Although the overall market opportunity remains substantial, the current environment is presenting some unique trends related to consumer behavior. While people have generally moved past lockdowns and entered a more normal way of life, their willingness to try online dating products for the first time hasn’t yet returned to pre-pandemic levels.”  We are still seeing higher engagement from pre-existing users compared to before the pandemic.” He said he’d challenge staff to make increase the rate of first-time users. 

The company sees the largest untapped market opportunity in the Asia Pacific region as well as parts of Europe. One current headwind is the rise in the dollar vs. other currencies.

Take Away

Match Group expects the metaverse dating experience is important to capture the next generation of Users. The Hyperconnect division (purchased by Tinder last year) has been innovating in the virtual world. However, given “uncertainty about the ultimate contours of the metaverse and what will or won’t work, as well as the more challenging operating environment,” the company is not ready for a full commitment. Kim said, “We’ll continue to evaluate this space carefully, and we will consider moving forward at the appropriate time when we have more clarity on the overall opportunity and feel we have a service that is well-positioned to succeed.

Paul Hoffman

Managing Editor, Channelchek

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Sources

https://s22.q4cdn.com/279430125/files/doc_financials/2022/q2/Earnings-Letter-Q2-2022-vF.pdf

https://www.cnbc.com/2022/07/12/peloton-to-outsource-all-manufacturing-as-part-of-its-turnaround-efforts.html

https://news.crunchbase.com/startups/tech-layoffs-2022/

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Image Credit: Ford.com

What are Automotive ‘Over-the-Air’ Updates?

Whenever automakers discover that a vehicle has a defect or does not comply with U.S. laws, they must notify the National Highway Traffic Safety Administration and mail a notice to each customer who owns or leases the affected vehicles. Automakers must also recall those cars, trucks or SUVs – which means they have to fix the defect across the entire fleet.

People with recalled vehicles usually have to schedule a visit to an authorized dealership, where a mechanic repairs the car.

But vehicles are increasingly high-tech contraptions. Although most recalls still require the replacement or repair of auto parts, such as air bags or brakes, a growing number of issues are resolved without any help from a mechanic.

All they require is an “over-the-air update.” That’s the technical term for what happens when you update any software program used by a device, whether it’s a smartphone or a sedan.

Over-the-air updates are especially common for vehicles that run fully or partially on electricity instead of gasoline or another fuel. These digital recalls require little or no effort. For example, Tesla regularly fixes its cars by updating its software. Its drivers often don’t have to do a thing. In other cases, a Tesla owner simply has to tap a few buttons on the car’s touchscreen.

According to the law, it doesn’t matter if safety-related fixes demand a software upgrade or a trip to the dealership. Either way, notifying the National Highway Traffic Safety Administration and all affected drivers is mandatory.

 

Why Over-the-Air Updates Matter

Electric vehicle sales nearly doubled from about 300,000 in 2020 to more than 600,000 in 2021. EV sales rose another 76% in first quarter of 2022 even as sales of all new vehicles dropped by 15.7%.

U.S. EV sales could be on the verge of far more growth, which would make over-the-air updates increasingly common. But drivers and investors are raising an array of safety concerns that could put the brakes on the EV market’s expansion.

Serious problems have included electric vehicles failing to start, losing power and catching fire because of battery defects.

Musk Objects to the Word ‘Recall’

Tesla has pushed harder than its competitors to rely primarily on over-the-air updates to fix problems with its electric vehicles. Its CEO, Elon Musk, has for years publicly questioned the wisdom of calling over-the-air updates “recalls.”

In some cases, Tesla has conducted over-the-air updates to resolve safety defects without notifying the National Highway Traffic Safety Administration or Tesla owners that a recall was underway. Because that’s against the law, the agency has ordered Tesla to provide those details.

Tesla has used over-the-air updates to resolve, for example, issues with its windshield wipers and seat belt chimes. It has also used over-the-air updates to address problems with its partially automated driving systems. Those features are the subject of a government investigation because of a spate of crashes with parked emergency vehicles in which first responders were using warning signs, such as flashing lights or flares.

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It was written by and represents the research-based opinions of Vivek Astvansh, Professor of Marketing and Data Science, Indiana University

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Wednesday, August 03, 2022

DLH Holdings (DLHC)
Another Solid Quarter

DLH delivers improved health and readiness solutions for federal programs through research, development, and innovative care processes. The Company’s experts in public health, performance evaluation, and health operations solve the complex problems faced by civilian and military customers alike, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 2,300 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to public health to improve the lives of millions. For more information, visit www.DLHcorp.com.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

3QFY22 Results. Revenue totaled $66.4 million, up from $61.6 million in 3Q21. The short-term FEMA business has been completed, with the increase in the quarter’s revenues due to expanded work across the Company’s existing contracts. Earnings were $4.9 million, or $0.34 per diluted share, compared to $2.9 million, or $0.21 per diluted share last year. EBITDA was $9.0 million, or 13.5% of revenue, compared to $7.0 million and 11.3% last year. We had projected revenue of $67 million, EBITDA of $7.0 million, and EPS of $0.23.

Debt Paydown Continues. During the quarter, DLH reduced the outstanding term loan to $28.5 million from the $37.5 million at the end of March. Mandatory principal amortization on the loan has now been satisfied. We expect debt reduction to continue to be a focus of management, all else being equal. With the rapid paydown, additional M&A, which remains a key aspect of the Company’s growth strategy, may move to the forefront….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Image Credit: Christine Daniloff (MIT)

How to Tell if Artificial Intelligence is Working the Way We Want it To

 

Adam Zewe | MIT
News Office

About a decade ago, deep-learning models started achieving superhuman results on all sorts of tasks, from beating world-champion board game players to outperforming doctors at diagnosing breast cancer.

These powerful deep-learning models are usually based on artificial neural networks, which were first proposed in the 1940s and have become a popular type of machine learning. A computer learns to process data using layers of interconnected nodes, or neurons, that mimic the human brain.

As the field of machine learning has grown, artificial neural networks have grown along with it.

Deep-learning models are now often
composed of millions or billions of interconnected nodes in many layers that
are trained to perform detection or classification tasks using vast amounts of
data. But because the models are so enormously complex, even the researchers
who design them don’t fully understand how they work. This makes it hard to
know whether they are working correctly.

For instance, maybe a model designed to help physicians diagnose patients correctly predicted that a skin lesion was cancerous, but it did so by focusing on an unrelated mark that happens to frequently occur when there is cancerous tissue in a photo, rather than on the cancerous tissue itself. This is known as a spurious correlation. The model gets the prediction right, but it does so for the wrong reason. In a real clinical setting where the mark does not appear on cancer-positive images, it could result in missed diagnoses.

With so much uncertainty swirling around these so-called “black-box” models, how can one unravel what’s going on inside the box?

This puzzle has led to a new and rapidly growing area of study in which researchers develop and test explanation methods (also called interpretability methods) that seek to shed some light on how black-box machine-learning models make predictions.

What are Explanation Methods?

At their most basic level, explanation methods are either global or local. A local explanation method focuses on explaining how the model made one specific prediction, while global explanations seek to describe the overall behavior of an entire model. This is often done by developing a separate, simpler (and hopefully understandable) model that mimics the larger, black-box model.

But because deep learning models work in fundamentally complex and nonlinear ways, developing an effective global explanation model is particularly challenging. This has led researchers to turn much of their recent focus onto local explanation methods instead, explains Yilun Zhou, a graduate student in the Interactive Robotics Group of the Computer Science and Artificial Intelligence Laboratory (CSAIL) who studies models, algorithms, and evaluations in interpretable machine learning.

The most popular types of local explanation methods fall into three broad categories.

The first and most widely used type of explanation method is known as feature attribution. Feature attribution methods show which features were most important when the model made a specific decision.

Features are the input variables that are fed to a machine-learning model and used in its prediction. When the data are tabular, features are drawn from the columns in a dataset (they are transformed using a variety of techniques so the model can process the raw data). For image-processing tasks, on the other hand, every pixel in an image is a feature. If a model predicts that an X-ray image shows cancer, for instance, the feature attribution method would highlight the pixels in that specific X-ray that were most important for the model’s prediction.

Essentially, feature attribution methods show what the model pays the most attention to when it makes a prediction.

“Using this feature attribution explanation, you can check to see whether a spurious correlation is a concern. For instance, it will show if the pixels in a watermark are highlighted or if the pixels in an actual tumor are highlighted,” says Zhou.

A second type of explanation method is known as a counterfactual explanation. Given an input and a model’s prediction, these methods show how to change that input so it falls into another class. For instance, if a machine-learning model predicts that a borrower would be denied a loan, the counterfactual explanation shows what factors need to change so her loan application is accepted. Perhaps her credit score or income, both features used in the model’s prediction, need to be higher for her to be approved.

“The good thing about this explanation method is it tells you exactly how you need to change the input to flip the decision, which could have practical usage. For someone who is applying for a mortgage and didn’t get it, this explanation would tell them what they need to do to achieve their desired outcome,” he says.

The third category of explanation methods are known as sample importance explanations. Unlike the others, this method requires access to the data that were used to train the model.

A sample importance explanation will show which training sample a model relied on most when it made a specific prediction; ideally, this is the most similar sample to the input data. This type of explanation is particularly useful if one observes a seemingly irrational prediction. There may have been a data entry error that affected a particular sample that was used to train the model. With this knowledge, one could fix that sample and retrain the model to improve its accuracy.

How are Explanation Methods Used?

One motivation for developing these explanations is to perform quality assurance and debug the model. With more understanding of how features impact a model’s decision, for instance, one could identify that a model is working incorrectly and intervene to fix the problem, or toss the model out and start over.

Another, more recent, area of research is exploring the use of machine-learning models to discover scientific patterns that humans haven’t uncovered before. For instance, a cancer diagnosing model that outperforms clinicians could be faulty, or it could actually be picking up on some hidden patterns in an X-ray image that represent an early pathological pathway for cancer that were either unknown to human doctors or thought to be irrelevant, Zhou says.

It’s still very early days for that area of research, however.

 

Words of Warning

While explanation methods can sometimes be useful for machine-learning practitioners when they are trying to catch bugs in their models or understand the inner-workings of a system, end-users should proceed with caution when trying to use them in practice, says Marzyeh Ghassemi, an assistant professor and head of the Healthy ML Group in CSAIL.

As machine learning has been adopted in more disciplines, from health care to education, explanation methods are being used to help decision makers better understand a model’s predictions so they know when to trust the model and use its guidance in practice. But Ghassemi warns against using these methods in that way.

“We have found that explanations make people, both experts and nonexperts, overconfident in the ability or the advice of a specific recommendation system. I think it is very important for humans not to turn off that internal circuitry asking, ‘let me question the advice that I am given,’” she says.

Scientists know explanations make people over-confident based on other recent work, she adds, citing some recent studies by Microsoft researchers.

Far from a silver bullet, explanation methods have their share of problems. For one, Ghassemi’s recent research has shown that explanation methods can perpetuate biases and lead to worse outcomes for people from disadvantaged groups.

Another pitfall of explanation methods is that it is often impossible to tell if the explanation method is correct in the first place. One would need to compare the explanations to the actual model, but since the user doesn’t know how the model works, this is circular logic, Zhou says.

He and other researchers are working on improving explanation methods so they are more faithful to the actual model’s predictions, but Zhou cautions that, even the best explanation should be taken with a grain of salt.

“In addition, people generally perceive these models to be human-like decision makers, and we are prone to overgeneralization. We need to calm people down and hold them back to really make sure that the generalized model understanding they build from these local explanations are balanced,” he adds.

Zhou’s most recent research seeks to do just that.

 

What’s Next for Machine-Learning Explanation Methods?

Rather than focusing on providing explanations, Ghassemi argues that more effort needs to be done by the research community to study how information is presented to decision makers so they understand it, and more regulation needs to be put in place to ensure machine-learning models are used responsibly in practice. Better explanation methods alone aren’t the answer.

“I have been excited to see that there is a lot more recognition, even in industry, that we can’t just take this information and make a pretty dashboard and assume people will perform better with that. You need to have measurable improvements in action, and I’m hoping that leads to real guidelines about improving the way we display information in these deeply technical fields, like medicine,” she says.

And in addition to new work focused on improving explanations, Zhou expects to see more research related to explanation methods for specific use cases, such as model debugging, scientific discovery, fairness auditing, and safety assurance. By identifying fine-grained characteristics of explanation methods and the requirements of different use cases, researchers could establish a theory that would match explanations with specific scenarios, which could help overcome some of the pitfalls that come from using them in real-world scenarios.

Reprinted with permission from MIT News ( http://news.mit.edu/)

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Monday, July 25, 2022

MustGrow Biologics Corp. (MGROF)
Canada Distribution

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

A New Distributor. On Wednesday, MustGrow’s management announced the Company has reached an exclusive marketing and distribution agreement in the Canadian canola and pulse market for TerraMG with NexusBioAg. The agreement allows the companies to move forward to the next stage of the development process. Financial details of the agreement were not disclosed.

Potential Market?  In the Canadian market, it has been estimated farmers suffer a CAD$500 million economic loss on the Canola crop due to clubroot and a CAD$100 million economic loss in Pulse crops (peas, lentils, legumes, etc.) due to  aphanomyces. …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

U.S. Enterprises Committing to IoT With Long-Term Plans

Research, News, and Market Data on Information Services Group

Companies
want both a future vision and short-term results, with goals for visibility,
data analytics and security, ISG Provider Lens™ report says

STAMFORD, Conn.–(BUSINESS WIRE)– U.S. enterprises investing in the Internet of Things (IoT) increasingly are starting out with long-term strategies instead of just discrete proofs of concept, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2022 ISG Provider Lens™ Internet of Things — Services and Solutions report for the U.S. finds a growing number of U.S. organizations want to develop a high-level view of their IoT future while achieving immediate, measurable benefits from the technology.

“Enterprise IoT plans are growing more ambitious,” said John Lytle, industrial manufacturing client lead for ISG in the Americas. “Companies are looking to optimize their operations, address security threats and extract insights from IoT data.”

Advances in AI and machine learning have expanded the possibilities of IoT analytics, ISG says. In its most basic form, IoT gives enterprises visibility into their operations by collecting data from sensors in machine tools, vehicles and other assets. That data can be used in real time to track objects, generate alerts or predict failures. Using analytics tools, managed services providers are now using the same data sources to derive higher-level business insights.

As in most IT fields today, both enterprises and service providers face a tight market for qualified professionals who can design, integrate and operate complex IoT systems, the report says. Providers and clients are opening delivery centers in Eastern Europe, Latin America and Asia Pacific to spread out the risk of attrition beyond established centers in India.

“Managed IoT services are most affected by the skills shortage,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Providers are responding with recruitment, training and intelligent automation.”

Enterprises are seeking plug-and-play interoperability among devices, software and networks so they can respond to future requirements and avoid vendor lock-in, but this remains a challenge, ISG says. To deliver maximum value, an enterprise’s IoT infrastructure often needs to be customized to work with specific telecom networks and hyperscale cloud platforms. Yet a lengthy integration process can cut into a project’s return on investment. Providers are continuing efforts to offer open platforms and smooth integration services.

The 2022 ISG Provider Lens™ Internet of Things — Services and Solutions report for the U.S. evaluates the capabilities of 33 providers across five quadrants: Strategy Consulting, Implementation and Integration, Managed Services, Mobile Asset Tracking and Management, and Data Management and AI on the Edge.

The report names Atos, Capgemini, Cognizant and HCL as Leaders in all five quadrants. It names HARMAN DTS and IBM as Leaders in four quadrants each and Accenture and Siemens as Leaders in three quadrants each. Verizon is named as a Leader in two quadrants, and Bosch, Infosys, LTTS, PwC, TCS and Wipro are named as Leaders in one quadrant each.

In addition, Hitachi Vantara is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in two quadrants. Cyient, eInfochips, HARMAN DTS, HPE, NTT and TCS are named as Rising Stars in one quadrant each.

Customized versions of the report are available from Cyient and PwC.

The 2022 ISG Provider Lens™ Internet of Things — Services and Solutions report for the U.S. is available to subscribers or for one-time purchase on this webpage.

About
ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG’s global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG’s enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

About
ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 800 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

Source: Information Services Group, Inc.

 

Thursday, July 21, 2022

Tokens.com Corp. (SMURF)
Hulk Labs is Getting Stronger

Tokens.com Corp is a publicly traded company that invests in Web3 assets and businesses focused on the Metaverse, NFTs, DeFi, and gaming based digital assets. Tokens.com is the majority owner of Metaverse Group, one of the world’s first virtual real estate companies. Hulk Labs, a wholly-owned Tokens.com subsidiary, focuses on investing in play-to-earn revenue generating gaming tokens and NFTs. Additionally, Tokens.com owns and stakes crypto assets to earn additional tokens. Through its growing digital assets and NFTs, Tokens.com provides public market investors with a simple and secure way to gain exposure to Web3.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

New Financing. Tokens.com’s management announced subsidiary Hulk Labs has completed a strategic financing round led by DV Investment Management. The total amount for the round was $750,000, with the pre-money valuation for Hulk Labs being at $8 million, according to management. The Company is participating in the round and will continue to own over 90% of the subsidiary. DV Investment Management represented themselves in the financing round.

Who is DV Investment Management? DV Investment Management is an affiliate of the DV Group of financial services companies, and serves as an independent proprietary trading firm. DV Group affiliates include two broker-dealers, a cryptocurrency market making firm, and a bourgeoning investment adviser….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Growth Of Direct Digital Holdings’ Colossus SSP Reflects Strong Results Generated For Multicultural And General Market Publishers and Leading Brands

Research, News, and Market Data on Direct Digital Holdings

SSP Kicked Off
2022 With Significant Revenue Growth – Q1 2021 vs Q1 2022 Marks 540% Upswing –
Driven by Diverse Marketplace Approach & Opportunity for Marketers to
Invest in Under-Represented Communities

HOUSTON, July 20, 2022 /PRNewswire/ — Direct Digital Holdings (Nasdaq: DRCT) announced today that its supply-side advertising platform, Colossus SSP, had a strong first quarter, with comparisons between Q1 2021 to Q1 2022 showing a 540 percent surge in revenue. This uptick comes on the heels of year-over-year revenue growing by 330 percent between 2020 and 2021, as well as a triple digit increase the previous year, with the platform’s revenue rising by 235 percent between 2019 and 2020. Leadership credits the dramatic growth to the company’s commitment to normalize diversity in the field of programmatic advertising – delivering multicultural and general market audiences at scale. In addition, it points to several brands living up to their promises to support under-represented communities in their media buys.

“Colossus SSP’s approach has always been one of inclusivity, bringing together a diverse set of audiences – Black, Hispanic, Asian, LGBTQ, and more – alongside general market, to serve as a one-stop-shop for advertisers who want to reach a cross-section of consumers,” said Lashawnda Goffin, CEO, Colossus SSP. “Not only has this allowed savvy marketers the opportunity to reach a vibrant range of consumers, but it has helped them increase investment in minority-owned media properties that have often been left out of the programmatic mix. Moreover, by putting their budgets to work to support multicultural voices, these brands are seeing remarkable results in meeting critical KPIs.”

The number of brands and media agencies tapping into Colossus SSP’s inclusive audience approach rose by 87 percent comparing Q1 2021 to Q1 2022, with clients such as Bayer, HP, and the NBA coming on board.

“At Bayer, we believe everyone should have the opportunity to live the healthiest life possible, and that we have a responsibility to make our vision of Health for All, Hunger for None a reality,” said Gary Guarnaccia, Head of Platform & Publisher Investment, Bayer Consumer Health, North America. “Partnering with Colossus SSP and their growing marketplace of diverse content and minority-owned publishers has enabled our in-house digital media buying team to expand our reach to consumers with important information about our healthcare products and brands, such as Aleve, Midol and One-A-Day.”

In lockstep with demand, in Q1 2022 Colossus SSP significantly expanded its publisher inventory supply. Currently Colossus SSP makes over approximately 90 billion impressions available each month with a diverse audience marketplace that includes over 13,000 sites and apps.

Blavity Inc, a market leader for Black media, reaching over 100 million millennials per month, began working with Colossus SSP in January 2020 and over the course of the following two years saw a 7-fold increase in revenues derived from the partnership.

“Colossus SSP has proven to be a valuable partner, one that has a deep understanding of publishers – especially multicultural publishers – as well as the media and marketing landscape at large,” said Orchid Richardson, Senior Vice President of Digital, Blavity Inc. “After two years of exponential growth, we are on track to see revenues from our relationship with Colossus SSP rise at a steady clip – if not outpace.”

“Colossus SSP’s rapid growth is a testament to its distinct approach to diversity, technology and the dynamic team that Lashawnda Goffin has been able to build,” said Mark Walker, CEO, Direct Digital Holdings. “Marketers are experiencing the benefits through multiple ROI metrics and subsequently publisher partners are experiencing significant growth in revenues. It’s a win-win situation.”

About Direct Digital Holdings
Direct Digital Holdings (Nasdaq: DRCT) brings state-of-the-art sell- and buy-side advertising platforms together under one umbrella company. The holding group’s Sell-side platform Colossus SSP offers advertisers of all sizes extensive reach within general market and multicultural media properties. Its operating companies Huddled Masses and Orange142 deliver significant ROI for middle market advertisers by providing data-optimized programmatic solutions at scale for businesses in sectors that range from energy to healthcare and travel to financial services. Direct Digital Holdings’ sell- and buy-side solutions manage approximately 70,000 clients monthly, generating over 90 billion impressions per month across display, CTV, in-app, and other media channels. The company has been named a top minority-owned business by The Houston Business Journal (“HBJ”).

About Colossus SSP
Part of Direct Digital Holdings (Nasdaq: DRCT), Colossus SSP is a leading custom supply-side platform (SSP) that delivers a diverse marketplace, enabling programmatic media buyers to connect with multicultural and general market audiences at scale. Colossus SSP’s consulting arm provides brands of all sizes with meaningful insights and actionable guidance for reaching curated audiences.  For more information, visit www.colossusmediassp.com.

 

 View original content to download multimedia:https://www.prnewswire.com/news-releases/growth-of-direct-digital-holdings-colossus-ssp-reflects-strong-results-generated-for-multicultural–general-market-publishers-and-leading-brands-301590136.html

SOURCE Direct Digital Holdings

 

Digerati Technologies Provides Update on its SkyNet and NextLevel Internet Acquisitions

Research, News, and Market Data on Digerati Technologies

SAN ANTONIO, July 19, 2022 (GLOBE NEWSWIRE) — Digerati Technologies, Inc. (OTCQB: DTGI) (“Digerati” or the “Company”), a provider of cloud services specializing in UCaaS (Unified Communications as a Service) solutions for the small to medium-sized business (“SMB”) market, is pleased to provide an update on the integration of its SkyNet and NextLevel Internet acquisitions that were closed in December 2021 and February 2022 and contributed to the Company’s highest quarterly revenue in its history.

The Company is approximately six months into its integration playbook that has resulted in the following:

• Appointment of Patti Cuthill from NextLevel Internet as VP of People and Culture for the entire organization.
• Appointment of George Robyn from NextLevel Internet as VP of Engineering and DevOps for the entire organization.
• Armando Muniz, who joined the Company via the acquisition of ActivePBX in November 2020, was appointed Director of Voice Engineering for the entire organization.
• Other re-alignments throughout the organization to gain efficiencies and maximize team productivity.
• Annualized cost synergies of approximately $500K that are expected to continue contributing to OPCO EBITDA in the coming quarters.

The Company and its subsidiaries now serve over 4,000 business customers and approximately 45,000 users, with a run-rate of over $32 million in annual revenue.

As previously highlighted, some of the operating efficiencies, expected cost synergies and consolidation savings from the SkyNet and NextLevel acquisitions were realized over several months following the closing of the transactions. As a result, all of Digerati’s financial measures have steadily improved over the past several months which contributed to an increase in gross margin to 61.3% and improvement in non-GAAP operating EBITDA (OPCO EBITDA) to $0.969 million for the three months ended April 30, 2022. The Company continues to execute on its integration playbook and expects additional cost synergies over the next two to three quarters.

In addition, NextLevel was recently awarded and certified a Great Place to Work for the third year in a row. The prestigious award is based entirely on what current employees say about their experience working at NextLevel. This year, 97% of NextLevel’s employees said it is a great place to work, compared to the national average of 53%.

Arthur L. Smith, Chief Executive Officer of Digerati, commented, “We are pleased with the progress on integration of both SkyNet and NextLevel since the closing of both acquisitions earlier in FY 2022. Our emphasis on the UCaaS/Cloud Communications business, which operates in a segment of the telecommunications industry that continues to experience solid growth as businesses migrate from legacy phone systems to cloud-based telephony systems, has proven to be a solid strategy. We also continue to prove that the M&A aspect of our business model works while increasing penetration in Texas and expanding west into California.”

Mr. Smith added, “I commend our team on successful execution of our integration playbook while achieving financial results that demonstrated improved margins at every operating level and a boost to our profitability.”

Recap of previously reported third quarter ended April 30, 2022:

• Revenue increased by 118% to $8.163 million compared to $3.751 million for Q3 FY2021.
• Gross profit increased 125% to $5.002 million compared to $2.225 million for Q3 FY2021.
• Gross margin increased to 61.3% compared to 59.3% for Q3 FY2021.
• Non-GAAP Adjusted EBITDA income was $0.557 million, excluding all non-cash items and one-time transactional expenses, compared to Adjusted EBITDA income of $0.321 million for Q3 FY2021.
• Non-GAAP operating EBITDA (OPCO EBITDA) improved to income of $0.969 million, excluding corporate expenses, all non-cash items, and one-time transactional expenses, compared to a non-GAAP operating EBITDA of $0.619 million for Q3 FY2022.

Digerati expects to report its fourth quarter and fiscal year end July 31, 2022, operating and financial results the week of October 24, 2022.

Use of Non-GAAP Financial Measurements

The Company believes that EBITDA (earnings before interest, taxes, depreciation and amortization) is useful to investors because it is commonly used in the cloud communications industry to evaluate companies on the basis of operating performance and leverage. Adjusted EBITDA provides an adjusted view of EBITDA that takes into account certain significant non-recurring transactions, if any, such as impairment losses and expenses associated with pending acquisitions, which vary significantly between periods and are not recurring in nature, as well as certain recurring non-cash charges such as changes in fair value of the Company’s derivative liabilities and stock-based compensation. The Company also believes that Adjusted EBITDA provides investors with a measure of the Company’s operational and financial progress that corresponds with the measurements used by management as a basis for allocating resources and making other operating decisions. Although the Company uses Adjusted EBITDA as one of several financial measures to assess its operating performance, its use is limited as it excludes certain significant operating expenses. Non-GAAP operating EBITDA (OPCO EBITDA) is useful to investors because it reflects EBITDA for the core operation of the business excluding corporate expenses, non-cash expenses and transactional expenses. EBITDA, Adjusted EBITDA, and Non-GAAP operating EBITDA are not intended to represent cash flows for the periods presented, nor have they been presented as an alternative to operating income or as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In accordance with SEC Regulation G, the non-GAAP measurements in this press release have been reconciled to the nearest GAAP measurement, which can be viewed under the heading “Reconciliation of Net Loss to Adjusted EBITDA” in the financial table included in this press release.

About Digerati Technologies, Inc.

Digerati Technologies, Inc. (OTCQB: DTGI) is a provider of cloud services specializing in UCaaS (Unified Communications as a Service) solutions for the business market. Through its operating subsidiaries NextLevel Internet (NextLevelinternet.com) T3 Communications (T3com.com), Nexogy (Nexogy.com), and SkyNet Telecom (Skynettelecom.net), the Company is meeting the global needs of small businesses seeking simple, flexible, reliable, and cost-effective communication and network solutions including, cloud PBX, cloud telephony, cloud WAN, cloud call center, cloud mobile, and the delivery of digital oxygen on its broadband network. The Company has developed a robust integration platform to fuel mergers and acquisitions in a highly fragmented market as it delivers business solutions on its carrier-grade network and Only in the Cloud™. For more information, please visit www.digerati-inc.com and follow DTGI on LinkedIn, Twitter and Facebook.

Forward-Looking Statements

The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements related to the future financial performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements such as annualized cost synergies of approximately $500K that are expected to continue contributing to OPCO EBITDA in the coming quarters and the Company expects additional cost synergies over the next 2-3 quarters, are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful execution of growth strategies, product development and acceptance, the impact of competitive services and pricing, general economic conditions, and other risks and uncertainties described in the Company’s periodic filings with the Securities and Exchange Commission. 

Facebook: Digerati Technologies, Inc.

Twitter: @DIGERATI_IR LinkedIn: Digerati Technologies, Inc.

Investors:

The Eversull Group
Jack Eversull
jack@theeversullgroup.com
(972) 571-1624

ClearThink
Brian Loper
bloper@clearthink.capital
(347) 413-4234

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA
DIGERATI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
		Three months ended April 30,									Nine months ended April 30,
			2022					2021				2022					2021
OPERATING REVENUES:
Cloud software and service revenue		$	8,163				$	3,751			$	15,959				$	8,629
Total operating revenues			8,163					3,751				15,959					8,629
OPERATING EXPENSES:
Cost of services (exclusive of depreciation and amortization)			3,161					1,526				6,203					3,708
Selling, general and administrative expense			4,296					1,993				8,211					4,969
Legal and professional fees			756					204				2,505					717
Bad debt			36					5				51					9
Depreciation and amortization expense			1,540					611				2,514					1,204
Total operating expenses			9,789					4,339				19,484					10,607
OPERATING LOSS			(1,626	)				(588	)			(3,525	)				(1,978	)
OTHER INCOME (EXPENSE):
Gain (loss) on derivative instruments			6,827					(10,878	)			7,835					(10,860	)
Loss on extinguishment of debt			–					–				(5,480	)				–
Gain on settlement of debt			–					150				–					347
Income tax benefit (expense)			(167	)				(63	)			(285	)				(122	)
Other income (expense)			2					–				–					–
Interest expense			(1,676	)				(1,577	)			(4,563	)				(3,079	)
Total other income (expense)			4,986					(12,368	)			(2,493	)				(13,714	)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST			3,360					(12,956	)			(6,018	)				(15,692	)
Less: Net loss attributable to the noncontrolling interests			546					158				1,306					223
NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI’S SHAREHOLDERS			3,906					(12,798	)			(4,712	)				(15,469	)
Deemed dividend on Series A Convertible preferred stock			(4	)				(5	)			(14	)				(15	)
NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI’S COMMON SHAREHOLDERS		$	3,902				$	(12,803	)		$	(4,726	)			$	(15,484	)
INCOME (LOSS) PER COMMON SHARE – BASIC		$	0.03				$	(0.09	)		$	(0.03	)			$	(0.12	)
LOSS PER COMMON SHARE – DILUTED		$	(0.01	)			$	(0.09	)		$	(0.03	)			$	(0.12	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – BASIC			139,751,107					136,719,871				139,285,833					126,524,312
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – DILUTED			254,167,793					136,719,871				139,285,833					126,524,312
See notes to consolidated unaudited financial statements
Reconciliation of Net Income (Loss) to Adjusted EBITDA – OPCO, Net of Non-cash expenses & Transactional Costs.
NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI’S SHAREHOLDERS, as reported		$	3,906				$	(12,798	)		$	(4,712	)			$	(15,469	)
EXCLUDING NON-CASH ITEMS TRANSACTIONAL COSTS & CORP EXP
ADJUSTMENTS:
Stock compensation & warrant expense			28					183				75					906
Corp Expenses (Net of stock compensation & Transactional cost)			412					298				1,169					682
Legal and professional fees – transactional costs			579					110				1,968					488
Depreciation and amortization expense			1,540					611				2,514					1,204
Bad Debt			36					5				51					9
OTHER ADJUSTMENTS
Gain (loss) on derivative instruments			(6,827	)				10,878				(7,835	)				10,860
Loss on extinguishment of debt			–					–				5,480					–
Gain (loss) on settlement of debt			–					(150	)			–					(347	)
Other income (expense)			(2	)				–				–					–
Interest expense			1,676					1,577				4,563					3,079
Income tax			167					63				285					122
Less: Net loss attributable to the noncontrolling interest			(546	)				(158	)			(1,306	)				(223	)
ADJUSTED EBITDA – OPCO		$	969				$	619			$	2,252				$	1,311
ADD-BACKS Expenses
Corp Expenses net of stock compensation & Transactional cost			412					298				1,169					682
ADJUSTED EBITDA – INCOME		$	557				$	321			$	1,083				$	629

 

 

Voyager Digital Provides Update on Listing of its Shares

Research, News, and Market Data on Voyager Digital

NEW YORK, July 15, 2022 /CNW/ – Voyager Digital Ltd. (“Voyager” or the “Company”) (TSX: VOYG) (OTC: VYGVQ) (FRA: UCD) today announced that common shares of the Company have resumed trading on the OTC Pink Sheets under the new ticker symbol “VYGVQ.” Due to the Company’s July 5, 2022, bankruptcy filing, Voyager no longer qualifies to trade on OTCQX International.  

Trading of the Company’s common shares on the OTC was initially halted on July 7, 2022, when Voyager notified the Toronto Stock Exchange (the “TSX”) that the Company would voluntarily delist its common shares from the TSX. The Company took this action in response to a notification from the TSX that the TSX would review the eligibility of the Company’s common shares for continued listing on TSX as a result of the Company and its main operating subsidiaries filing voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court of the Southern District of New York.

The resumption of trading on the OTC Pink Sheets and the voluntary delisting of the Company’s common shares on the TSX have no impact on the Company’s continued business operations.

Additional information regarding the ticker symbol change can be found at www.otcmarkets.com/stock/VYGVQ/security.

Parties with questions about the chapter 11 process may contact the Company’s Claims Agent, Stretto, at +1 (855) 473-8665 (toll-free in the U.S.) or +1 (949) 271-6507 (for parties outside the U.S.). They have also set up a website at 
http://cases.stretto.com/Voyager, which includes court documents and other information.

About Voyager Digital
Ltd.

Voyager Digital Ltd.’s (TSX: VOYG) (OTC Pink: VYGVQ) (FRA: UCD) US subsidiary, Voyager Digital, LLC, is a cryptocurrency platform in the United States founded in 2018 to bring choice, transparency, and cost-efficiency to the marketplace. Voyager offers a secure way to trade over 100 different crypto assets using its easy-to-use mobile application. Through its subsidiary Coinify ApS, Voyager provides crypto payment solutions for both consumers and merchants around the globe. To learn more about the company, please visit https://www.investvoyager.com.

Forward
Looking Statements

Certain information in this press release, including, but not limited to, statements regarding the restructuring process, the restructuring Plan, available remedies for recovery from 3AC, intended filings as part of the restructuring process, resumption of account access, return of value to customers, the ability of Voyager to continue as a going concern, exploration of strategic alternatives, discussions with third parties in respect of strategic alternatives and the results of those discussions, the temporary nature of the suspension of the platform, future growth and performance of the business, the exploration of strategic alternatives, future adoption of digital assets, anticipated trends and challenges in our business and industry, the regulation of digital assets offerings, the impact of the 3AC default on the Company, the Company’s liquidity and ability to satisfy customer orders and withdrawals and the Company’s anticipated results may constitute forward looking information (collectively, forward-looking statements), which can be identified by the use of terms such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” (or the negatives) or other similar variations. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Voyager’s actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. It is uncertain as to the timing or results of the restructuring process or the terms of the final restructuring plan, when account access will resume, the value to be returned to customers, what amount Voyager will be able to recover from 3AC for non-payment or the legal remedies available to Voyager in connection with such non-payment or the impact on the future business, cash flows, liquidity and prospects of Voyager as a result of 3AC’s non-payment. Forward looking statements are subject to the risk that the global economy, industry, or the Company’s businesses and investments do not perform as anticipated, that revenue or expenses estimates may not be met or may be materially less or more than those anticipated, that parties to whom the Company lends assets are able to repay such loans in full and in a timely manner, that trading momentum does not continue or the demand for trading solutions declines, customer acquisition does not increase as planned, product and international expansion do not occur as planned, risks of compliance with laws and regulations that currently apply or become applicable to the business and those other risks contained in the Company’s public filings, including in its Management Discussion and Analysis and its Annual Information Form (AIF). Factors that could cause actual results of the Company and its businesses to differ materially from those described in such forward-looking statements include, but are not limited to, the results of the restructuring process and the terms of the restructuring plan, if such a plan is ultimately agreed to, the results from the exploration of strategic alternatives, the inability to resume trading, deposits, withdrawals and rewards on the platform in a timely manner, an inability to drawdown under the credit facility or access other sources of financing, an increase in customer demands for withdrawals from the platform, any insolvency or similar proceedings with respect to 3AC, our ability to find a strategic alternative, a decline in the digital asset market or general economic conditions; changes in laws or approaches to regulation, the failure or delay in the adoption of digital assets and the blockchain ecosystem by institutions; changes in the volatility of crypto currency, changes in demand for Bitcoin and Ethereum, changes in the status or classification of cryptocurrency assets, cybersecurity breaches, a delay or failure in developing infrastructure for the trading businesses or achieving mandates and gaining traction; failure to grow assets under management, an adverse development with respect to an issuer or party to the transaction or failure to obtain a required regulatory approval. Readers are cautioned that Assets on Platform and trading volumes fluctuate and may increase and decrease from time to time and that such fluctuations are beyond the Company’s control. Forward-looking statements, past and present performance and trends are not guarantees of future performance, accordingly, you should not put undue reliance on forward-looking statements, current or past performance, or current or past trends. Information identifying assumptions, risks, and uncertainties relating to the Company are contained in its filings with the Canadian securities regulators available at www.sedar.com. The forward-looking statements in this press release are applicable only as of the date of this release or as of the date specified in the relevant forward-looking statement and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events, except as required by law. The Company assumes no obligation to provide operational updates, except as required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements, unless required by law. Readers are cautioned that past performance is not indicative of future performance. There is no assurance that the funds available under the loan agreement will be available or, even if available will, together with any other assets of Voyager be sufficient to safeguard assets.

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Voyager
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Voyager Public Relations Team
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SOURCE Voyager Digital Ltd.