prva-20210809
0001759655FALSE00017596552021-08-092021-08-09

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 8-K
_______________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 9, 2021
_________________________
Privia Health Group, Inc.
(Exact Name of Registrant as Specified in Its Charter)
_________________________
Delaware
001-4036581-3599420
(State or other jurisdiction of incorporation or organization)
(Commission
File No.)
(I.R.S. Employer Identification No.)
950 N. Glebe Rd.,
Suite 700
Arlington,Virginia22203
(Address of Principal Executive Offices)
(Zip Code)
(571) 366-8850
Registrant's telephone number, including area code

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per sharePRVAThe Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02 Results of Operations and Financial Condition.

On August 9, 2021, Privia Health Group, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2021. A copy of the press release is furnished as Exhibit 99.1 to this report.

The information in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, are “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibit:
Exhibit No.Description
99.1
Privia Health Group, Inc. Press Release Dated August 9, 2021



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PRIVIA HEALTH GROUP, INC.
Date: August 9, 2021
By:/s/ David Mountcastle
Name: David Mountcastle
Title: Chief Financial Officer and Authorized Officer



EXHIBIT INDEX
Exhibit
Number
Description
99.1

Document
https://cdn.kscope.io/87e2bf4b3adb2d2284e02a9cd12091f7-privialogo.jpg
Exhibit 99.1

Privia Health Reports Second Quarter 2021 Financial Results

ARLINGTON, VA – August 9, 2021 – Privia Health Group, Inc. (Nasdaq: PRVA) today announced financial results for the second quarter and six-month periods ended June 30, 2021.

Second Quarter
Total revenue for the second quarter of 2021 was $225.8 million, compared to total revenue of $183.3 million for the prior year second quarter (+23.2%). Operating loss for the second quarter of 2021 was $193.2 million, compared to operating income of $6.2 million for the prior year second quarter. Net loss for the second quarter of 2021 was $172.5 million, or a loss of $1.68 per diluted share, compared to net income of $5.3 million, or $0.06 per diluted share, for the second quarter of 2020. The operating and net losses in the second quarter of 2021 were due to $202.6 million in non-cash stock compensation expense as well as $0.2 million of one-time legal and other expenses, both related to the Company’s initial public offering (IPO) completed on May 3, 2021. Excluding these non-cash or non-recurring expenses, non-GAAP adjusted net income was $10.4 million, or $0.09 per diluted share, for the second quarter of 2021 (+69.0%).
Key operating and non-GAAP financial metrics include:
Practice Collections were $367.2 million, compared to $281.7 million for the three months ended in 2Q’20 (+30.3%).
Care Margin was $55.8 million, compared to $41.7 million for the three months ended in 2Q’20 (+33.7%).
Platform Contribution was $23.1 million, compared to $17.4 million for the three months ended in 2Q’20 (+32.8%).
Adjusted EBITDA was $10.0 million, compared to $7.0 million for the three months ended in 2Q’20 (+43.0%).
Implemented Providers were 2,692, compared to 2,531 at the end of 2Q’20 (+6.4%).
Value-Based Care Attributed Lives were approximately 739,000, compared to 749,000 at the end of 2Q’20 (-1.3%) and to 682,000 at December 31, 2020 (+8.3%).
“We delivered strong growth in the second quarter, with practice collections increasing 30.3%, care margin growing 33.7% and adjusted EBITDA up 43.0% when compared to the Q2 last year,” said Shawn Morris, Chief Executive Officer, Privia Health. “We continue to gain momentum with greater awareness of our uniquely aligned provider partnership model, which is highlighted by 6.4% growth of implemented providers and an 8.3% increase in attributed lives across a number of value-based reimbursement programs since year-end 2020. Over the coming quarters, we expect to continue to expand our number of provider partners, increase attributed lives, enter new markets and leverage our capital-efficient operating structure to drive profit margin expansion as we execute on multiple opportunities to drive future growth.”
Six Months
Total revenue for the first six months of 2021 was $439.4 million, compared to total revenue of $396.2 million for the same period in the prior year 2020 (+10.9%). Operating loss for the first six months of 2021 was $185.3 million, compared to operating income of $12.7 million for the same period in the prior
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year 2020. Net loss for the first six months of 2021 was $167.1 million, or $1.68 per diluted share, compared to net income of $10.7 million, or $0.11 per diluted share, for the same period in 2020. Excluding non-cash stock compensation expense and one-time legal and other expenses in the first six months of 2021, non-GAAP adjusted net income was $19.6 million or $0.17 per diluted share (+54.6%).
Practice Collections for the first six months of 2021 were $711.3 million, compared to $609.1 million for the same period in the prior year (+16.8%). Care Margin was $108.3 million, compared to $89.6 million for the six months ended in June 30, 2020 (+20.9%). Platform Contribution for the first six months of 2021 was $48.7 million, compared to $37.7 million for the same period in the prior year (+29.1%). Adjusted EBITDA was $20.0 million, compared to $14.1 million for the six months ended in June 30, 2020 (+42.0%).
Financial and Business Outlook
The Company is providing the following update to its full year 2021 guidance:
($ in millions)FY 2020 ActualFY 2021 GuidanceUpdated Guidance Y - Y % Change from FY 2020
LowHighLowHigh
Implemented Providers2,5502,850 2,900 Mid-to-High End11.8 %13.7 %
Attributed Lives682,000730,000 750,000 High End7.0 %10.0 %
Practice Collections$1,301.1$1,445 $1,465 High End11.1 %12.6 %
GAAP Revenue$817.1$860 $880 High End5.3 %7.7 %
Care Margin$187.6$215 $221 High End14.6 %17.8 %
Platform Contribution$82.6$93 $98 High End12.6 %18.6 %
Adjusted EBITDA$29.4$34 $38 High End15.6 %29.3 %
Management has not reconciled forward-looking non-GAAP measures to their most directly comparable GAAP measures of operating income and net income. This is because the Company cannot predict with reasonable certainty and without unreasonable efforts the ultimate outcome of Care Margin, Platform Contribution or Adjusted EBITDA due to market-related assumptions that are not within our control as well as certain legal or advisory costs, tax costs or other costs that may arise. For these reasons, management is unable to assess the probable significance of the unavailable information, which could materially impact the amount of the future directly comparable GAAP measures.
See “Key Metrics and Non-GAAP Financial Measures” for more information as to how the Company defines and calculates Implemented Providers, Attributed Lives, Practice Collections, Care Margin, Platform Contribution, and Adjusted EBITDA, and for a reconciliation of the most comparable GAAP measures to Care Margin, Platform Contribution, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income Per Share.
Certain non-recurring or non-cash expenses will be treated as an add back in the reconciliation of Net Income to Adjusted EBITDA, and the reconciliation of Net Income to Adjusted Net Income and Adjusted Net Income Per Share, the details of which can be found in the Reconciliation schedules near the end of this and in future quarterly financial press releases.

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Webcast and Conference Call Information
The Company will host a conference call on August 9, 2021, at 8:00 am ET / 7:00 am CT to discuss these results and management’s outlook for future financial and operational performance. The conference call can be accessed via webcast at ir.priviahealth.com/news-and-events/events-and-presentations or by dialing 855-940-5315 (929-517-0419 for international participants), and referencing participant code 4782857.
The webcast will be archived and available for replay for on-demand listening shortly after the completion of the call at ir.priviahealth.com/news-and-events/events-and-presentations. This news release and the financial statements contained herein, and the slide presentation for the webcast, are also available on the Privia Health Investor Relations website at ir.priviahealth.com.
About Privia Health
Privia Health™ is a technology-driven, national physician enablement company that collaborates with medical groups, health plans, and health systems to optimize physician practices, improve patient experiences, and reward doctors for delivering high-value care in both in-person and virtual settings. Our platform is led by top industry talent and exceptional physician leadership, and consists of scalable operations and end-to-end, cloud-based technology that reduces unnecessary healthcare costs, achieves better outcomes, and improves the health of patients and the well-being of providers. For more information, visit priviahealth.com.
Non-GAAP Financial Measures
The Company reports and discusses its operating results using financial measures consistent with accounting principles generally accepted in the United States ("GAAP"). From time to time, in press releases, financial presentations, earnings conference calls or otherwise, the Company may disclose certain non-GAAP financial measures. The non-GAAP financial measures presented in this press release should not be viewed as alternatives or substitutes for the Company's reported GAAP results. A reconciliation to the most directly comparable GAAP financial measure is set forth in the tables that accompany this release.
The Company believes that the non-GAAP financial measures presented in this press release are relevant and provide useful information to the Company's management, investors, and other interested parties about the Company's operating performance because the measures allow them to understand and compare the Company's actual and expected operating results during the prior, current and future periods in a more consistent manner. The non-GAAP measures presented in this press release may not be comparable to similarly titled measures used by other companies. These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and reflect an additional way of viewing aspects of the Company's operations that, when viewed with GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provides a more complete understanding of the results of operations and trends affecting the Company's business. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to financial measures calculated in accordance with GAAP.

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Safe Harbor Statement
The financial results in this press release reflect preliminary, unaudited results, which are not final until the Company’s Form 10-Q is filed with the Securities and Exchange Commission (“SEC”). This press release contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such statements relate to our current expectations, projections and assumptions about our business, the economy and future events or conditions. They do not relate strictly to historical or current facts. Forward-looking statements can be identified by words such as “aims,” “anticipates,” "assumes," “believes,” “estimates,” “expects,” “forecasts,” “future,” “intends,” “likely,” “may,” “outlook,” “plans,” “potential,” “projects,” “seeks,” “strategy,” “targets,” “trends,” “will,” “would,” “could,” “should,” and variations of such terms and similar expressions and references to guidance, although some forward-looking statements may be expressed differently. In particular, these include statements relating to, among other things, the possible effects of COVID-19; our future actions, business plans, objectives and prospects; and our future operating or financial performance and projections, including our full year guidance for 2021. Factors or events that could cause actual results to differ may emerge from time to time and are difficult to predict. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results may differ materially from past results and those anticipated, estimated or projected. We caution you not to place undue reliance upon any of these forward-looking statements.
Factors related to these risks and uncertainties include, but are not limited to: compliance with applicable healthcare laws and government regulations in the heavily regulated industry in which the Company operates; the Company’s dependence on relationships with its medical groups, some of which the Company does not own; the Company’s growth strategy, which may not prove viable and the Company may not realize expected results; difficulties implementing the Company’s proprietary end-to-end, cloud-based technology solution for Privia physicians and new medical groups; the high level of competition in the Company’s industry and the Company’s failure to compete and innovate; challenges in successfully establishing a presence in new geographic markets; the Company’s reliance on its electronic medical record vendor, which the Privia Technology Solution is integrated and built upon; changes in the payer mix of patients and potential decreases in the Company’s reimbursement rates as a result of consolidation among commercial payers; the Company’s use, disclosure, and other processing of personally identifiable information, including health information, is subject to the Health Insurance Portability and Accountability Act of 1996 and other federal and state privacy and security regulations; and those factors referenced in Part II, Item 1A, “Risk Factors” in the Company’s final prospectus dated April 28, 2021, filed with the SEC on April 30, 2021, and the Company’s other public filings.

Contact:
Robert Borchert
SVP, Investor & Corporate Communications
IR@priviahealth.com
817.783.4841



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Privia Health Group, Inc.
Condensed Consolidated Statements of Operations (a)
Unaudited

For the Three Months Ended June 30,For the Six Months Ended June 30,
2021202020212020
Revenue$225,756 $183,264 439,363 396,206 
Operating expenses:
Physician and practice expense169,937 141,521 331,050 306,627 
Cost of platform68,731 24,331 95,693 51,892 
Sales and marketing11,178 2,220 14,362 4,672 
General and administrative168,657 8,419 182,653 19,408 
Depreciation and amortization440 594 885 932 
Total operating expenses418,943 177,085 624,643 383,531 
Operating (loss) income(193,187)6,179 (185,280)12,675 
Interest expense302 509 593 976 
(Loss) income before (benefit from) provision for income taxes(193,489)5,670 (185,873)11,699 
(Benefit from) Provision for income taxes(20,004)474 (18,004)1,174 
Net (loss) income(173,485)5,196 (167,869)10,525 
Less: Loss attributable to non-controlling interests(951)(85)(733)(170)
Net (loss) income attributable to Privia Health Group, Inc. $(172,534)$5,281 $(167,136)$10,695 
Net (loss) income per share attributable to Privia Health Group, Inc. stockholders – basic and diluted$(1.68)$0.06 $(1.68)$0.11 
Weighted average common shares outstanding – basic and diluted102,739,033 95,931,549 99,381,053 95,931,549 
(a) Any slight variations in totals due to rounding.

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Privia Health Group, Inc.
Condensed Consolidated Balance Sheets(a)
June 30, 2021December 31, 2020
Assets(unaudited)
Current assets:
Cash and cash equivalents$299,751 $84,633 
Accounts receivable126,872 99,118 
Prepaid expenses and other current assets9,827 6,333 
Total current assets436,450 190,084 
Non-current assets:
Property and equipment, net4,449 4,814 
Right-of-use asset5,618 — 
Intangible assets, net5,659 5,980 
Goodwill118,663 118,663 
Deferred tax asset23,162 4,953 
Other non-current assets3,138 4,475 
Total non-current assets160,689 138,885 
Total assets$597,139 $328,969 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$4,517 $5,235 
Accrued expenses23,910 31,185 
Physician and practice liability131,027 106,811 
Current portion of note payable1,313 875 
Operating lease liabilities, current2,188 — 
Other current liabilities4,363 2,832 
Total current liabilities167,318 146,938 
Non-current liabilities:
Note payable, net of current portion31,893 32,784 
Operating lease liabilities, non-current8,124 — 
Other non-current liabilities333 5,595 
Total non-current liabilities40,350 38,379 
Total liabilities207,668 185,317 
Commitments and contingencies
Stockholders’ equity:
Common stock 1,057 960 
Additional paid-in capital579,257 165,666 
Accumulated deficit(187,014)(19,878)
Total Privia Health Group, Inc. stockholders’ equity393,300 146,748 
Non-controlling interest(3,829)(3,096)
Total stockholders’ equity389,471 143,652 
Total liabilities and stockholders’ equity$597,139 $328,969 
(a) Any slight variations in totals are due to rounding.

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Privia Health Group, Inc.
Consolidated Statements of Cash Flows (a)
Unaudited
(In thousands)For the Six Months Ended June 30,
20212020
Cash flows from operating activities
Net (loss) income$(167,869)$10,525 
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation 564 599 
Amortization of intangibles320 321 
Amortization of debt issuance costs77 67 
Stock-based compensation202,661 242 
Deferred tax (benefit) provision(18,209)1,270 
Changes in asset and liabilities:
Accounts receivable(27,754)(20,651)
Prepaid expenses and other current assets(9,112)(1,541)
Other non-current assets1,337 2,297 
Accounts payable(810)2,357 
Accrued expenses(7,275)(3,937)
Physician and practice liability24,216 14,012 
Other current liabilities1,531 617 
Operating lease liabilities10,312 — 
Other long-term liabilities(5,262)512 
Net cash provided by in operating activities4,727 6,690 
Cash from investing activities
Purchases of property and equipment(199)(379)
Net cash used in investing activities(199)(379)
Cash flows from financing activities
Proceeds from initial public offering223,686 — 
Payments of underwriting fees, net of discounts and offering costs(12,658)— 
Repayment of note payable (438)(438)
Proceeds from revolving loan— 10,000 
Net cash provided by financing activities210,590 9,562 
Net increase in cash and cash equivalents215,118 15,873 
Cash and cash equivalents at beginning of period84,633 46,889 
Cash and cash equivalents at end of period$299,751 $62,762 
Supplemental disclosure of cash flow information:
Interest paid$585 $914 
Income taxes paid$451 $46 
(a) Any slight variations in totals are due to rounding.


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Key Metrics and Non-GAAP Financial Measures

Privia Health reviews a number of operating and financial metrics, including the following key metrics and non-GAAP financial measures, to evaluate the Company’s business, measure performance, identify trends affecting the Company’s business, formulate business plans, and make strategic decisions.

Key Metrics(a)
For the Three Months Ended June 30,For the Six Months Ended June 30,
(unaudited; $ in millions)2021202020212020
Implemented Providers (as of end of period) (1)
2,692 2,531 2,692 2,531 
Attributed Lives (as of end of period) (2)
739,000 749,000 739,000 749,000 
Practice Collections(3)
$367.2 $281.7 $711.3 $609.1 
(1) Implemented Providers is defined as the total of all service professionals on Privia Health’s platform at the end of a given period who are credentialed by Privia Health and billed for medical services, in both Owned and Non-Owned Medical Groups during that period.
(2) Attributed Lives are defined as any patient that a payer deems attributed to Privia Health, in both Owned and Non-Owned Medical Groups, to deliver care as part of a Value Based Care arrangement. Attributed lives include patients who have selected one of Privia Health’s owned or Non-Owned Medical Groups as their provider of primary are services as of the end of a particular period.
(3) Practice Collections are defined as the total collections from all practices in all markets and all sources of reimbursement that the Company receives for delivering care and providing Privia Health’s platform and associated services. Practice Collections differ from revenue by including collections from Non-Owned Medical Groups.
(a) Any slight variations in totals are due to rounding.

Non-GAAP Financial Measures (4)(a)
For the Three Months Ended June 30,For the Six Months Ended June 30,
(unaudited; $ in thousands)2021202020212020
Care Margin$55,819$41,743$108,313$89,579
Platform Contribution23,12817,41248,66037,687
Platform Contribution Margin41.4%41.7%44.9%42.1%
Adjusted EBITDA10,0367,01619,98314,071
Adjusted EBITDA Margin18.0%16.8%18.4%15.7%
(4) In addition to results reported in accordance with GAAP, Privia Health discloses Care Margin, Platform Contribution, Platform Contribution margin, Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP financial measures. Each are defined as follows:
Care Margin is total revenue less the sum of physician and practice expense.
Platform Contribution is total revenue less the sum of (i) physician and practice expense, (ii) cost of platform, and (iii) stock-based compensation expense.
Platform Contribution margin is platform contribution divided by care margin.
Adjusted EBITDA is net income (loss) attributable to Privia Health Group, Inc. shareholders and subsidiaries excluding minority interests, provision (benefit) for income taxes, interest income, interest expense, depreciation and amortization, stock-based compensation, severance charges and other nonrecurring expenses.
Adjusted EBITDA margin is Adjusted EBITDA divided by Care Margin.
(a) Any slight variations in totals are due to rounding.

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Reconciliation of Operating (Loss) Income to Care Margin(a)
For the Three Months Ended June 30,For the Six Months Ended June 30,
(unaudited; $ in thousands)2021202020212020
Operating (loss) income $(193,187)$6,179$(185,280)$12,675
Depreciation and amortization 440594885932
General and administrative 168,6578,419182,65319,408
Sales and marketing 11,1782,22014,3624,672
Cost of platform 68,73124,33195,69351,892
Care margin $55,819$41,743$108,313$89,579
(a) Any slight variations in totals are due to rounding.
Reconciliation of Operating (Loss) Income to Platform Contribution(a)
For the Three Months Ended June 30,For the Six Months Ended June 30,
(unaudited; $ in thousands)2021202020212020
Operating (loss) income$(193,187)$6,179$(185,280)$12,675
Depreciation and amortization 440594885932
General and administrative 168,6578,419182,65319,408
Sales and marketing 11,1782,22014,3624,672
Stock-based compensation(5)
$36,040 $— $36,040 $— 
Platform contribution $23,128$17,412$48,660$37,687
(a) Slight variations in totals are due to rounding.
(5) Amount represents stock-based compensation expense included under Cost of Platform.


Reconciliation of Net (Loss) Income to Adjusted EBITDA(a)
For the Three Months Ended June 30,For the Six Months Ended June 30,
(unaudited; $ in thousands)2021202020212020
Net (loss) income$(172,534)$5,281$(167,136)$10,695
Net loss attributable to non-controlling interests(951)(85)(733)(170)
Provision for income taxes(20,004)474(18,004)1,174
Interest expense302509593976
Depreciation and amortization440594885932
Stock-based compensation202,560121202,661242
Other expenses(6)
2231221,717222
Adjusted EBITDA$10,036$7,016$19,983$14,071
(a) Any slight variations in totals are due to rounding.
(6) Other expenses include certain non-cash or non-recurring costs.


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Reconciliation of Net (Loss) Income to Adjusted Net Income and Adjusted Net Income Per Share(a)

For the Three Months Ended June 30,For the Six Months Ended June 30,
(unaudited; $ in thousands)2021202020212020
Net (loss) income$(172,534)$5,281$(167,136)$10,695
Stock-based compensation202,560121202,661242
Intangible amortization expense160160320321
Provision for income tax(20,004)474(18,004)1,174
Other expenses2231221,717222
Adjusted net income$10,405$6,158$19,558$12,654
Adjusted net income per share attributable to Privia Health Group, Inc. stockholders – basic $0.10$0.06$0.20$0.13
Adjusted net income per share attributable to Privia Health Group, Inc. stockholders – diluted$0.09$0.06$0.17$0.13
Weighted average common shares outstanding – basic 102,739,03395,931,54999,381,05395,931,549
Weighted average common shares outstanding – diluted115,727,02695,931,549112,505,97795,931,549
(a) Any slight variations in totals due to rounding.


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