PolarityTE, Inc. PTE, a biotechnology company developing regenerative tissue products and biomaterials, today reported financial results for the third calendar quarter of 2020. PolarityTE will host a conference call and webcast today, November 9, 2020 at 8:00 a.m. ET.
Highlights
- Total revenues were $3.34 million in Q3:20 compared to $1.40 million in Q3:19
- SkinTE revenues were $1.16 million in Q3:20 compared to $0.84 million in Q3:19
- Contract services revenues were $2.18 million in Q3:20 and includes $1.75 million from COVID-19 testing
Financial Results for the Three Months Ended September 30, 2020
Total revenue for the three months ended September 30, 2020 was $3.34 million, of which $1.16 million was from sales of SkinTE and $2.18 million from PolarityTE's contract service operations, which includes $1.75 million from COVID-19 testing services that the Company started providing at the end of May 2020.
Research and development expenses for the three months ended September 30, 2020 were approximately $2.70 million versus $2.96 million for the three months ended September 30, 2019. Research and development expenses for the three months ended September 30, 2020 included an expense of $0.39 million from stock-based compensation, which is a non-cash charge.
General and administrative expenses for the three months ended September 30, 2020 were $6.26 million versus $16.04 million for the three months ended September 30, 2019. General and administrative expenses for the three months ended September 30, 2020 included stock-based compensation expense of $1.65 million, which is a $3.17 million reduction in stock compensation expense compared to the three months ended September 30, 2019, due to restricted stock and option forfeitures related to the reductions in force taken during 2020. Other Q3 2020 general and administrative reductions from Q3 2019 include a $2.89 million decrease in severance expense, a $1.68 million reduction in legal, accounting, and consulting fees, and a $2.41 million reduction in compensation-related expenses.
Sales and marketing expenses for the three months ended September 30, 2020 were $1.61 million versus $4.99 million for the three months ended September 30, 2019. Sales and marketing expenses for the three months ended September 30, 2020 included a reduction in compensation and benefits costs of $0.81 million and reduction of marketing and consultant spending of $1.45 million compared to the three months ended September 30, 2019.
Net loss for the three months ended September 30, 2020 was $7.08 million compared with a net loss of $22.98 million for the three months ended September 30, 2019.
Cash and Liquidity as of September 30, 2020
As of September 30, 2020, our cash, cash equivalents and short-term investments balance was approximately $23.19 million, compared to cash and cash equivalents and short-term investments of $29.24 million at December 31, 2019.
Cash used in operating activities for the three-month period ended September 30, 2020 was approximately $6.76 million, or approximately $2.25 million per month on average, 43% lower than the $3.95 million monthly average in the three months ended September 30, 2019 and 42% lower than the $3.85 million monthly average in the three months ended June 30, 2020.
Conference Call and Webcast Details
The conference call can be accessed by calling 1-888-599-8688 (U.S. and Canada) or +44 (0)330 336 9104 (International), with confirmation code 496517 and referencing "PolarityTE Third 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 methods are 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 report on Form 10-K, quarterly reports on Form 10-Q, 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)
|
|
September 30, 2020 |
|
|
December 31, 2019 |
|
||
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
23,186 |
|
|
$ |
10,218 |
|
Short-term investments |
|
|
– |
|
|
|
19,022 |
|
Accounts receivable, net |
|
|
3,379 |
|
|
|
1,731 |
|
Inventory |
|
|
907 |
|
|
|
252 |
|
Prepaid expenses and other current assets |
|
|
1,596 |
|
|
|
1,264 |
|
Total current assets |
|
|
29,068 |
|
|
|
32,487 |
|
Property and equipment, net |
|
|
11,970 |
|
|
|
14,911 |
|
Operating lease right-of-use assets |
|
|
3,110 |
|
|
|
4,590 |
|
Intangible assets, net |
|
|
589 |
|
|
|
731 |
|
Goodwill |
|
|
278 |
|
|
|
278 |
|
Other assets |
|
|
472 |
|
|
|
602 |
|
TOTAL ASSETS |
|
$ |
45,487 |
|
|
$ |
53,599 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
4,818 |
|
|
$ |
7,095 |
|
Other current liabilities |
|
|
2,311 |
|
|
|
2,338 |
|
Current portion of long-term notes payable |
|
|
1,887 |
|
|
|
528 |
|
Deferred revenue |
|
|
25 |
|
|
|
98 |
|
Total current liabilities |
|
|
9,041 |
|
|
|
10,059 |
|
Common stock warrant liability |
|
|
7,233 |
|
|
|
– |
|
Operating lease liabilities |
|
|
1,817 |
|
|
|
2,994 |
|
Other long-term liabilities |
|
|
872 |
|
|
|
1,630 |
|
Long-term notes payable |
|
|
1,964 |
|
|
|
– |
|
Total liabilities |
|
|
20,927 |
|
|
|
14,683 |
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (Note 14) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Preferred stock - 25,000,000 shares authorized, 0 shares issued and outstanding at September 30, 2020 and December 31, 2019 |
|
|
– |
|
|
|
– |
|
Common stock – $.001 par value; 250,000,000 shares authorized; 38,912,005 and 27,374,653 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively |
|
|
39 |
|
|
|
27 |
|
Additional paid-in capital |
|
|
492,676 |
|
|
|
474,174 |
|
Accumulated other comprehensive income |
|
|
– |
|
|
|
72 |
|
Accumulated deficit |
|
|
(468,155 |
) |
|
|
(435,357 |
) |
Total stockholders' equity |
|
|
24,560 |
|
|
|
38,916 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
45,487 |
|
|
$ |
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 |
|
|
For the Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Net revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
$ |
1,156 |
|
|
$ |
839 |
|
|
$ |
2,528 |
|
|
$ |
1,640 |
|
Services |
|
|
2,181 |
|
|
|
556 |
|
|
|
4,008 |
|
|
|
2,546 |
|
Total net revenues |
|
|
3,337 |
|
|
|
1,395 |
|
|
|
6,536 |
|
|
|
4,186 |
|
Cost of sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
|
210 |
|
|
|
315 |
|
|
|
825 |
|
|
|
930 |
|
Services |
|
|
1,142 |
|
|
|
330 |
|
|
|
1,925 |
|
|
|
1,087 |
|
Total cost of sales |
|
|
1,352 |
|
|
|
645 |
|
|
|
2,750 |
|
|
|
2,017 |
|
Gross profit |
|
|
1,985 |
|
|
|
750 |
|
|
|
3,786 |
|
|
|
2,169 |
|
Operating costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
2,698 |
|
|
|
2,956 |
|
|
|
9,235 |
|
|
|
13,072 |
|
General and administrative |
|
|
6,264 |
|
|
|
16,044 |
|
|
|
22,080 |
|
|
|
48,299 |
|
Sales and marketing |
|
|
1,606 |
|
|
|
4,988 |
|
|
|
7,324 |
|
|
|
12,922 |
|
Restructuring and other charges |
|
|
– |
|
|
|
– |
|
|
|
2,536 |
|
|
|
– |
|
Total operating costs and expenses |
|
|
10,568 |
|
|
|
23,988 |
|
|
|
41,175 |
|
|
|
74,293 |
|
Operating loss |
|
|
(8,583 |
) |
|
|
(23,238 |
) |
|
|
(37,389 |
) |
|
|
(72,124 |
) |
Other income (expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of common stock warrant liability |
|
|
1,503 |
|
|
|
– |
|
|
|
4,444 |
|
|
|
– |
|
Interest (expense) income, net |
|
|
(58 |
) |
|
|
27 |
|
|
|
(135 |
) |
|
|
126 |
|
Other income, net |
|
|
57 |
|
|
|
228 |
|
|
|
282 |
|
|
|
650 |
|
Net loss |
|
$ |
(7,081 |
) |
|
$ |
(22,983 |
) |
|
$ |
(32,798 |
) |
|
$ |
(71,348 |
) |
Net loss per share, basic and diluted |
|
$ |
(0.18 |
) |
|
$ |
(0.87 |
) |
|
$ |
(0.89 |
) |
|
$ |
(2.94 |
) |
Weighted average shares outstanding, basic and diluted |
|
|
38,761,141 |
|
|
|
26,405,307 |
|
|
|
36,743,864 |
|
|
|
24,273,774 |
|
POLARITYTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
|
|
For the Nine Months Ended September 30, |
|
|||||
|
|
2020 |
|
|
2019 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(32,798 |
) |
|
$ |
(71,348 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Stock based compensation expense |
|
|
5,963 |
|
|
|
23,932 |
|
Depreciation and amortization |
|
|
2,337 |
|
|
|
2,243 |
|
Amortization of intangible assets |
|
|
142 |
|
|
|
146 |
|
Amortization of debt discount |
|
|
17 |
|
|
|
40 |
|
Change in fair value of common stock warrant liability |
|
|
(4,444 |
) |
|
|
– |
|
Change in fair value of contingent consideration |
|
|
– |
|
|
|
(48 |
) |
Loss on abandonment and disposal of property and equipment |
|
|
1,566 |
|
|
|
265 |
|
Other non-cash adjustments |
|
|
(21 |
) |
|
|
3 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(1,648 |
) |
|
|
(881 |
) |
Inventory |
|
|
(655 |
) |
|
|
(10 |
) |
Prepaid expenses and other current assets |
|
|
(332 |
) |
|
|
126 |
|
Operating lease right-of-use assets |
|
|
1,348 |
|
|
|
1,214 |
|
Other assets |
|
|
130 |
|
|
|
25 |
|
Accounts payable and accrued expenses |
|
|
(2,349 |
) |
|
|
4,095 |
|
Other current liabilities |
|
|
– |
|
|
|
155 |
|
Deferred revenue |
|
|
(73 |
) |
|
|
(36 |
) |
Operating lease liabilities |
|
|
(1,353 |
) |
|
|
(1,142 |
) |
Other long-term liabilities |
|
|
– |
|
|
|
571 |
|
Net cash used in operating activities |
|
|
(32,170 |
) |
|
|
(40,650 |
) |
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(1,225 |
) |
|
|
(2,386 |
) |
Purchase of available-for-sale securities |
|
|
(14,144 |
) |
|
|
(29,002 |
) |
Proceeds from maturities of available-for-sale securities |
|
|
16,945 |
|
|
|
14,636 |
|
Proceeds from sale of available-for-sale securities |
|
|
16,171 |
|
|
|
1,877 |
|
Net cash provided by (used in) investing activities |
|
|
17,747 |
|
|
|
(14,875 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Net proceeds from the sale of common stock and warrants |
|
|
24,276 |
|
|
|
27,948 |
|
Proceeds from stock options exercised |
|
|
31 |
|
|
|
529 |
|
Proceeds from ESPP purchase |
|
|
40 |
|
|
|
35 |
|
Cash paid for tax withholdings related to net share settlement |
|
|
(114 |
) |
|
|
(679 |
) |
Payment of contingent consideration liability |
|
|
– |
|
|
|
(109 |
) |
Principal payments on financing leases |
|
|
(376 |
) |
|
|
(336 |
) |
Proceeds from term note payable and financing arrangements |
|
|
4,630 |
|
|
|
– |
|
Principal payments on term note payable and financing arrangements |
|
|
(1,096 |
) |
|
|
(263 |
) |
Net cash provided by financing activities |
|
|
27,391 |
|
|
|
27,125 |
|
Net increase (decrease) in cash and cash equivalents |
|
|
12,968 |
|
|
|
(28,400 |
) |
Cash and cash equivalents - beginning of period |
|
|
10,218 |
|
|
|
55,673 |
|
Cash and cash equivalents - end of period |
|
$ |
23,186 |
|
|
$ |
27,273 |
|
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
Unpaid liability for acquisition of property and equipment |
|
$ |
10 |
|
|
$ |
249 |
|
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 |
|
$ |
5 |
|
|
$ |
– |
|
Allocation of proceeds from sale of common stock and warrants to warrant liability |
|
$ |
11,677 |
|
|
$ |
– |
|
Property and equipment acquired through finance lease |
|
$ |
– |
|
|
$ |
2,341 |
|
Property and equipment acquired through financing arrangement |
|
$ |
– |
|
|
$ |
58 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20201109005264/en/
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