IRVINE, Calif., July 15, 2020 (GLOBE NEWSWIRE) — ShiftPixy, Inc. (NASDAQ: PIXY), a California-based gig engagement platform provider, today announced operating results for the quarter ended May 31, 2020 (“2020 Third Quarter”).
2020 Third Quarter Financial HighlightsSignificantly improved balance sheet with cash position of $10.8 million and no long-term debt as of May 31, 2020 compared to cash of $0.4 million and long-term debt of $3.6 million as of February 29, 2020.Successfully closed $12 million public equity offering on May 26, 2020 and an additional $1.3 million through July 7, 2020.Resolved NASDAQ Delisting issue; cleared by NASDAQ after recapitalization.Fully converted all convertible debt outstanding.Net Loss of $73.2 million, or $2.73 per share included $67.1 million of non-cash and non-recurring “below the line” other expenses.  Non-recurring expenses included capitalization related non-cash charges for preferred options and convertible notes recorded as paid in capital ($0 net equity impact).Net Loss excluding non-recurring items was $6.1 million or $0.23 per share.Continuing Operating Loss of $4.6 million as compared to $4.3 million for Q3 2019.Discontinued operations charge related to January 2020 Asset Sale of $1.5 million for increased workers’ compensation reserves.EBITDAS Loss (Operating Loss excluding depreciation and share-based compensation) improved to $3.9 million from $4.1 million the prior year period due to improved margins and reduced spending on our mobile application, offset by increased operating costs.Excluding non-recurring charges to gross margin for $0.3 million of COVID-19 related workers’ compensation reserves and $0.4 million of non-recurring cash basis operating expense charges, EBITDAS adjusted for non-recurring items would be negative $3.2 million.Despite COVID-19 related impacts on our Southern California based restaurant customers, gross billings grew 21% to $14.4 million, or $57.6 million on an annualized basis, compared to $11.9 million or $47.6 million for Q3-2019. Revenues increased 23% to $2.0 million compared to $1.6 million in the prior-year period.Gross profit was $141,000 including a $280,000 charge for additional workers’ compensation reserves, compared to $171,000 for Q3 2019.  Excluding the COVID-19 related workers’ comp charge, gross profit would be 20.9% of revenues compared to 8.6% of revenues for Q3-2019.Operating expenses were $4.7 million compared to $4.5 million in Q3 2019.  Excluding non-recurring charges, operating expenses were $4.0 million for Q3 2020.No resolution of Asset Sale working capital settlement due to COVID-19 delays.2020 Third Quarter Operational Highlights and COVID -19 ImpactsDespite the impact of COVID-19, our customer count continues to increase with approximately 81 clients representing over 300 customer locations and 2,700 billed employees, an increase of 106% over Q3 2019.June 2020 ending billed employees recovered to 3,200 employees.  Unfortunately, we do expect to be impacted by the July 13, 2020 COVID-19 restrictions implemented by the State of California.Average annualized gross billings per worksite employee decreased to $21,300 from $29,700 in Q3 2019 due to lower per employee billings during the COVID-19 pandemic.Despite our asset sale in January 2020, we remain staffed to manage up to 50,000 active worksite employees with our current corporate overhead.COVID-19 impacted our development cycles and has delayed key features for our HRIS and mobile application launch. We did not apply for PPP funds under the CARES Act.  We elected to defer payment of certain federal taxes as an alternative to PPP funds.  These taxes are accrued and will be paid beginning in fiscal 2021.“Despite a significant impact on our customers from the shutdown due to the COVID-19 pandemic, we are well positioned to provide them key support services.  With our renewed focus on franchise operators as our target customers in the restaurant space, we see an increased need for the delivery features of our application as food operators increasingly move towards delivery as an increased source of revenues.  We continue to see strong demand and new opportunities,” stated Chief Executive Officer, Scott Absher.  “Our recapitalization and improved balance sheet have been instrumental in helping us address opening and re-opening opportunities with larger customers and we are excited to have a clean capital structure.  COVID-19 related delays in the launch of our mobile application solution are now behind us as our team has migrated to add features that will provide us with new revenue sources from new markets. Our internal sales team has been streamlined and focused to take advantage of the application and we are extremely excited about our near-term opportunities for significantly larger customers in new markets.”About ShiftPixyShiftPixy is a disruptive human capital management platform, revolutionizing employment in the Gig Economy by delivering a next-gen mobile engagement technology to help businesses with shift-based employees navigate regulatory mandates, minimize administrative burdens and better connect with a ready-for-hire workforce. With expertise rooted in management’s nearly 25 years of workers’ compensation and compliance programs experience, ShiftPixy adds a needed layer for addressing compliance and continued demands for equitable employment practices in the growing Gig Economy.ShiftPixy Cautionary Statement
The information provided in this release includes forward-looking statements, the achievement or success of which involves risks, uncertainties, and assumptions. Although such forward-looking statements are based upon what management of the Company believes are reasonable assumptions, there can be no assurance that forward-looking statements will prove to be accurate. If any of the risks or uncertainties, including those set forth below, materialize or if any of the assumptions proves incorrect, the results of ShiftPixy, Inc., could differ materially from the results expressed or implied by the forward-looking statements we make. The risks and uncertainties include, but are not limited to, risks associated with the nature of our business model; our ability to execute the Company’s vision and growth strategy; our ability to attract and retain clients; our ability to assess and manage risks; changes in the law that affect our business and our ability to respond to such changes and incorporate them into our business model, as necessary; our ability to insure against and otherwise effectively manage risks that affect our business; risks arising from the Covid-19 pandemic or any other events that could cause wide-scale business disruptions; competition; reliance on third-party systems and software; our ability to protect and maintain our intellectual property; and general developments in the economy and financial markets. Statements made in connection with any guidance may refer to financial statements that have not been reviewed or audited. The Company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change, except as required by applicable securities laws. The information in this press release shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and will not be deemed an admission as to the materiality of any information that is required to be disclosed solely by Regulation FD. Further information on these and other factors that could affect the financial results of ShiftPixy, Inc., is included in the filings we make with the Securities and Exchange Commission from time to time. These documents are available on the “SEC Filings” subsection of the “Investor Information” section of our website at https://ir.shiftpixy.com/financial-information/sec-filings. Consistent with the SEC’s April 2013 guidance on using social media outlets like Facebook and Twitter to make corporate disclosures and announce key information in compliance with Regulation FD, ShiftPixy is alerting investors and other members of the general public that ShiftPixy will provide updates on operations and progress required to be disclosed under Regulation FD through its social media on Facebook, Twitter, LinkedIn and YouTube. Investors, potential investors, shareholders and individuals interested in our Company are encouraged to keep informed by following us on Facebook, Twitter, LinkedIn and YouTube.INVESTOR CONTACT:
[email protected]
800.475.3655
ShiftPixy, Inc.
Condensed Consolidated Balance Sheets These unaudited interim condensed consolidated financial statements should be read with the accompanying footnotes and Management Discussion and Analysis available on Form 10-Q file on July 15, 2020 with the Securities and Exchange Commission.
 ShiftPixy Inc.
Condensed Consolidated Statements of Operations
(Unaudited) These unaudited interim condensed consolidated financial statements should be read with the accompanying footnotes and Management Discussion and Analysis available on Form 10-Q file on July 15, 2020 with the Securities and Exchange Commission.

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