Processa Pharmaceuticals, Inc. (PCSA) Initiation Report

October 28, 2020 Processa Pharmaceuticals, Inc. Page 12 of 16 ALPHA SELECT LIST Institutional Research Figure 17: Income Statement Income Statement (USD in 000s, except per share) 2020E 2021E 2022E 2017A 2018A 2019A Q1A Q2A Q3E Q4E 2020E Q1E Q2E Q3E Q4E 2021E Q1E Q2E Q3E Q4E 2022E - - - - - - - - - - - - - - - - - - Cost of Goods Sold (COGS) incl. D&A - - - - - - - - - - - - - - - - - - Gross Income - - - - - - - - - - - - - - - - - - SG&A 874 1,440 1,615 484 859 859 859 3,062 864 868 872 877 3,480 881 885 890 894 3,550 Research & Development 926 3,085 2,321 502 926 833 501 2,761 883 917 900 696 3,397 915 1,254 1,174 800 4,144 EBIT (Operating Income) (1,801) (4,525) (3,935) (986) (1,785) (1,693) (1,360) (5,824) (1,747) (1,785) (1,772) (1,573) (6,877) (1,796) (2,139) (2,064) (1,695) (7,694) Nonoperating Income - Net 5 18 12 1 18 - - 19 4 4 4 4 15 4 4 4 4 15 Nonoperating Interest Income - - - - - - - - - - - - - - - - Other Income (Expense) - - - - - - - - - - - - - - - - Interest Expense 59 161 37 17 19 19 19 75 19 19 19 19 75 19 19 19 19 75 Unusual Expense - Net - 59 - - - - - - - - - - - - - - - - Pretax Income (1,854) (4,727) (3,961) (1,002) (1,786) (1,712) (1,379) (5,880) (1,762) (1,800) (1,787) (1,588) (6,937) (1,811) (2,154) (2,079) (1,710) (7,754) Income Taxes (Benefit) - (903) (603) (128) (88) (137) (118) (471) (141) (144) (143) (127) (556) (145) (173) (167) (137) (621) Other After Tax Adjustments - - (507) - - - - - - - - - - - - - - - Net Income (Loss) (1,854) (3,824) (3,865) (874) (1,699) (1,575) (1,261) (5,409) (1,620) (1,656) (1,644) (1,461) (6,381) (1,666) (1,982) (1,912) (1,573) (7,133) Per Share EPS ($0.42) ($0.71) ($0.70) ($0.16) ($0.13) ($0.16) ($0.09) ($0.63) ($0.12) ($0.11) ($0.11) ($0.09) ($0.43) ($0.10) ($0.12) ($0.11) ($0.09) ($0.43) Weighted Average Shares (000s) 4,657 5,332 5,526 5,515 5,515 9,559 13,604 8,549 13,923 14,562 15,201 15,840 14,882 16,260 16,462 16,664 16,866 16,563 FullyDiluted Shares Outstanding (000s) 5,039 5,525 5,486 5,486 5,514 14,307 14,307 14,307 14,946 15,585 16,224 16,862 16,862 17,064 17,266 17,468 17,670 17,670 Source: Company Reports and Craig-Hallum Estimates Figure 18: Cash Flow Statement 2017A 2018A 2019A 2020E 2021E 2022E Cash Flow Statement (USD in 000s) Cash used in / provided by operating activities (3,402.0) (2,387.0) (2,739.0) (4,298.6) (5,270.8) (6,022.7) Net Income (Loss) (1,856.3) (3,765.0) (3,357.9) (5,408.7) (6,380.9) (7,132.8) Adjustments for items not affecting cash 1.9 (272.7) 275.2 451.2 451.2 451.2 Changes in non-cash working capital balances 161.1 188.7 (101.9) 658.9 658.9 658.9 Cash used in / provided by investing activities 1,005.0 (22.3) (20.5) (20.5) (20.5) (20.5) Disposal of property and equipment - - - - - - Other 1,025.6 (1.8) - - - - Purchase of property and equipment (20.6) (20.5) (20.5) (20.5) (20.5) (20.5) Cash provided by / used in financing activities 2,425.2 2,706.2 1,627.2 17,781.8 15,000.0 - Repayment of lease liabilities - - - - - - Change in loan payable 2,580.0 - 727.2 623.6 - - Receipt of deferred lease inducement - - - - - - Change in long-term liability - 162.5 162.5 162.5 - - Exercise of stock options - - - - - - Issuance of warrants, net of issuance costs - - - - - - Issue of share capital, net of issuance costs - 2,874.7 - 16,995.7 15,000.0 Other (168.5) 900.0 - - Net decrease / increase in cash during the period 28.2 128.5 (232.3) 13,462.7 9,708.7 (6,043.2) Source: Company Reports and Craig-Hallum Estimates