PolarityTE, Inc. (Nasdaq: PTE), a biotechnology company developing regenerative tissue products and biomaterials, today reported financial results for the first calendar quarter of 2020. PolarityTE will host a conference call and webcast today, May 11, 2020 at 8:00 a.m. ET.
Highlights
- SkinTE revenues were $0.428 million in Q1:20 compared to $0.297 million in Q1:19
- Total revenues were $0.933 million in Q1:20 compared to $1.465 million in Q1:19
- Paid Cases were 81 in Q1:20 compared to 41 in Q1:19
- New Users were 24 in Q1:20 compared to 18 in Q1:19
- Repeat Users were 28 in Q1:20 compared to 9 in Q1:19
Financial Results for the Three Months Ended March 31, 2020
Total revenue for the three months ended March 31, 2020 was $0.933 million, of which $0.428 million was from sales of SkinTE and $0.505 million was associated with PolarityTE’s contract research operations.
Research and development expenses for the three months ended March 31, 2020 were approximately $3.373 million versus $5.352 million for the three months ended March 31, 2019. Research and development expenses for the three months ended March 31, 2020 included a $0.036 million benefit from stock-based compensation which is a non-cash charge, versus an expense of $1.084 million for the three months ended March 31, 2019.
General and administrative expenses for the three months ended March 31, 2020 were $11.057 million versus $17.195 million for the three months ended March 31, 2019. General and administration expenses for the three months ended March 31, 2020 included $1.16 million of issuance fees related to the February raise. Also included in the period was $3.076 million of stock-based compensation which is a non-cash charge, versus $9.037 million for the three months ended March 31, 2019.
Sales and marketing expenses for the three months ended March 31, 2020 were $3.694 million versus $3.953 million for the three months ended March 31, 2019.
Net loss for the three months ended March 31, 2020 was $13.040 million compared with a net loss of $25.573 million for the three months ended March 31, 2019.
Cash and Liquidity as of March 31, 2020
As of March 31, 2020, our cash, cash equivalents and short-term investments balance was approximately $39.5 million, compared to cash and cash equivalents and short-term investments of $29.2 million at December 31, 2019.
Cash used in operating activities for the three-month period ended March 31, 2020, was approximately $13.854 million, of which $1.156 million was issuance fees related to the February capital raise. Cash used in operating activities, net of issuance fees, was approximately $12.698 million or approximately $4.233 million per month, 21% lower than the $5.333 million per month in the three months ended December 31, 2019 and 20% lower than the $5.323 million per month in the three months ended March 31, 2019.
Based on product development and commercialization plans, the Company believes existing cash, cash equivalents and short-term investments will be adequate to meet capital needs for at least the next 12 months. As noted in our April 21, 2020 press release, we have already taken action to reduce future cash burn by reducing payroll expense, adopting a salary and wage reduction, and reducing discretionary spending across the organization to minimal levels. As discussed in our April 30, 2020 press release updating corporate strategy and regulatory pathway for SkinTE, we are substantially reducing commercial operations and other functions to further significantly decrease cash burn.
Conference Call and Webcast Details
The conference call can be accessed by calling 1-888-394-8218 (U.S. and Canada) or +44 (0)330 336 9105 (International), with confirmation code 9016712 and referencing “PolarityTE First Quarter 2020 Earnings Call.” A webcast of the conference call can be accessed by using the link below.
Earnings Call Webcast – CLICK HERE
A replay of the earnings conference call will be available for 30 days, beginning approximately one hour after the conclusion of the call and can be found by visiting PolarityTE’s website at https://www.polarityte.com/news-media/events or by clicking on the link above.
About PolarityTE®
PolarityTE is focused on transforming the lives of patients by discovering, designing and developing a range of regenerative tissue products and biomaterials for the fields of medicine, biomedical engineering and material sciences. Rather than manufacturing with synthetic and foreign materials within artificially engineered environments, PolarityTE manufactures products from the patient's own tissue and uses the patient's own body to support the regenerative process. From a small piece of healthy autologous tissue, the company creates an easily deployable, dynamic and self-propagating product designed to regenerate the target tissues. PolarityTE's innovative method is intended to promote and accelerate growth of the patient's tissues to undergo a form of effective regenerative healing. Learn more at www.PolarityTE.com – Welcome to the Shift®.
Forward Looking Statements
Certain statements contained in this release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. They are generally identified by words such as "believes," "may," "expects," "anticipates," "intend," "plan," "will," "would," "should" and similar expressions. Readers should not place undue reliance on such forward-looking statements, which are based upon the Company's beliefs and assumptions as of the date of this release. The Company's actual results could differ materially due to the impact of the COVID-19 pandemic and FDA regulatory matters, which cannot be predicted, and the risk factors and other items described in more detail in the "Risk Factors" section of the Company's Annual Reports and other filings with the SEC (copies of which may be obtained at www.sec.gov). Subsequent events and developments may cause these forward-looking statements to change. The Company specifically disclaims any obligation or intention to update or revise these forward-looking statements as a result of changed events or circumstances that occur after the date of this release, except as required by applicable law. Our actual results could differ materially due to risk factors and other items described in more detail in the "Risk Factors" section of the Company's Annual Reports and other filings with the SEC (copies of which may be obtained at www.sec.gov).
POLARITYTE, the POLARITYTE logo, SKINTE, WHERE SELF REGENERATES SELF and WELCOME TO THE SHIFT are trademarks or registered trademarks of PolarityTE, Inc.
POLARITYTE, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited, in thousands, except share and per share amounts) | ||||||||
March 31,
| December 31,
| |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 38,517 | $ | 10,218 | ||||
Short-term investments | 997 | 19,022 | ||||||
Accounts receivable, net | 1,186 | 1,731 | ||||||
Inventory | 233 | 252 | ||||||
Prepaid expenses and other current assets | 2,807 | 1,264 | ||||||
Total current assets | 43,740 | 32,487 | ||||||
Property and equipment, net | 15,022 | 14,911 | ||||||
Operating lease right-of-use assets | 4,142 | 4,590 | ||||||
Intangible assets, net | 683 | 731 | ||||||
Goodwill | 278 | 278 | ||||||
Other assets | 598 | 602 | ||||||
TOTAL ASSETS | $ | 64,463 | $ | 53,599 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses | $ | 8,026 | $ | 7,095 | ||||
Other current liabilities | 3,223 | 2,338 | ||||||
Current portion of long-term note payable | 536 | 528 | ||||||
Deferred revenue | 23 | 98 | ||||||
Total current liabilities | 11,808 | 10,059 | ||||||
Common stock warrant liability | 7,145 | – | ||||||
Operating lease liabilities | 2,614 | 2,994 | ||||||
Other long-term liabilities | 1,243 | 1,630 | ||||||
Total liabilities | 22,810 | 14,683 | ||||||
Commitments and Contingencies (Note 12) | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Preferred stock - 25,000,000 shares authorized, 0 shares issued and outstanding at March 31, 2020 and December 31, 2019 | – | – | ||||||
Common stock – $.001 par value; 250,000,000 shares authorized; 38,393,289 and 27,374,653 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 38 | 27 | ||||||
Additional paid-in capital | 490,009 | 474,174 | ||||||
Accumulated other comprehensive income | 3 | 72 | ||||||
Accumulated deficit | (448,397 | ) | (435,357 | ) | ||||
Total stockholders’ equity | 41,653 | 38,916 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 64,463 | $ | 53,599 | ||||
POLARITYTE, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(Unaudited, in thousands, except share and per share amounts) | ||||||||
For the Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
Net revenues | ||||||||
Products | $ | 428 | $ | 297 | ||||
Services | 505 | 1,168 | ||||||
Total net revenues | 933 | 1,465 | ||||||
Cost of sales | ||||||||
Products | 340 | 273 | ||||||
Services | 176 | 503 | ||||||
Total costs of sales | 516 | 776 | ||||||
Gross profit | 417 | 689 | ||||||
Operating costs and expenses | ||||||||
Research and development | 3,373 | 5,352 | ||||||
General and administrative | 11,057 | 17,195 | ||||||
Sales and marketing | 3,694 | 3,953 | ||||||
Total operating costs and expenses | 18,124 | 26,500 | ||||||
Operating loss | (17,707 | ) | (25,811 | ) | ||||
Other income (expense) | ||||||||
Change in fair value of common stock warrant liability | 4,532 | – | ||||||
Interest (expense) income, net | (12 | ) | 70 | |||||
Other income, net | 147 | 168 | ||||||
Net loss | $ | (13,040 | ) | $ | (25,573 | ) | ||
Net loss per share, basic and diluted | $ | (0.39 | ) | $ | (1.18 | ) | ||
Weighted average shares outstanding, basic and diluted | 33,019,994 | 21,594,699 | ||||||
POLARITYTE, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited, in thousands) | ||||||||
For the Three Months ended
| ||||||||
2020 | 2019 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (13,040 | ) | $ | (25,573 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Stock based compensation expense | 3,221 | 10,289 | ||||||
Depreciation and amortization | 752 | 676 | ||||||
Amortization of intangible assets | 48 | 51 | ||||||
Amortization of debt discount | 8 | 15 | ||||||
Change in fair value of common stock warrant liability | (4,532 | ) | – | |||||
Change in fair value of contingent consideration | – | 20 | ||||||
Other non-cash adjustments | (16 | ) | (7 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 545 | (76 | ) | |||||
Inventory | 19 | 27 | ||||||
Prepaid expenses and other current assets | (1,543 | ) | (412 | ) | ||||
Operating lease right-of-use assets | 448 | 355 | ||||||
Other assets | 4 | – | ||||||
Accounts payable and accrued expenses | 818 | (1,331 | ) | |||||
Other current liabilities | (61 | ) | 425 | |||||
Deferred revenue | (75 | ) | (80 | ) | ||||
Operating lease liabilities | (450 | ) | (343 | ) | ||||
Other long-term liabilities | – | (4 | ) | |||||
Net cash used in operating activities | (13,854 | ) | (15,968 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Purchase of property and equipment | (999 | ) | (1,539 | ) | ||||
Purchase of available-for-sale securities | (14,144 | ) | (5,220 | ) | ||||
Proceeds from maturities of available-for-sale securities | 15,945 | 1,700 | ||||||
Proceeds from sale of available-for-sale securities | 16,171 | – | ||||||
Net cash provided by (used in) investing activities | 16,973 | (5,059 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Net proceeds from the sale of common stock and warrants | 24,276 | – | ||||||
Proceeds from stock options exercised | 31 | 529 | ||||||
Cash paid for tax withholdings related to net share settlement | (2 | ) | – | |||||
Payment of contingent consideration liability | – | (109 | ) | |||||
Principal payments on financing leases | (123 | ) | (118 | ) | ||||
Proceeds from financing arrangements | 1,053 | – | ||||||
Principal payments on financing arrangements | (55 | ) | – | |||||
Net cash provided by financing activities | 25,180 | 302 | ||||||
Net increase (decrease) in cash and cash equivalents | 28,299 | (20,725 | ) | |||||
Cash and cash equivalents - beginning of period | 10,218 | 55,673 | ||||||
Cash and cash equivalents - end of period | $ | 38,517 | $ | 34,948 | ||||
Non-cash investing and financing activities: | ||||||||
Unpaid liability for acquisition of property and equipment | $ | 137 | $ | 170 | ||||
Reclassification of stock-based compensation expense that was previously classified as a liability to paid-in capital | $ | – | $ | 38 | ||||
Unpaid tax liability related to net share settlement | $ | 3 | $ | 617 | ||||
Allocation of proceeds from sale of common stock and warrants to warrant liability | $ | 11,677 | $ | – | ||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20200511005217/en/
Contacts:
Rich Haerle
VP, Investor Relations
PolarityTE, Inc.
ir@PolarityTE.com
(385) 315-0697
