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Lattice Biologics Ltd. Reports Second Quarter 2017 Highlights

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Lattice Biologics Ltd. Reports Second Quarter 2017 Highlights

Lattice Biologics Ltd. Reports Second Quarter 2017 Highlights

Amnion based products grow 76% quarter over quarter

SCOTTSDALE, ARIZONA--(Marketwired - May 30, 2017) - Lattice Biologics Ltd. (TSX:LBL) (OTCQB:LBLTF) ("Lattice Biologics" or the "Company") announces financial results for the second quarter ended March 31, 2017:

Highlights:

  • New sales team focused on high growth markets with immediate impact.
  • Increased gross margins from 19.9% to 33.7% for six months ended 2016 over 2017.
  • Higher gross profit for three months ended March 31, 2017 than any quarter in fiscal 2016.
  • Entered into agreements to restructure $4.5 million in debt.
  • Granted approval from American Association of Tissue Banks (AATB) through 9/29/19.
  • Acellular Dermal Products sales growth 340% Q2 2017over Q2 2016.
  • High margin amnion based products now account for 10% of all sales.
  • G&A expenses reduced to 14% of sales vs 21% of sales on higher margins.

Q2 2017 Business Update:

The Company remains focused on raising additional capital to: assist with its working capital constraint; fulfill open purchase orders; launch the Company's new product lines; and support R&D efforts. Appropriate working capital conditions will allow the Company to expand current operations by accepting and processing a greater number of donors each month, launch new higher-margin product lines, and to create a direct sales force to attain our growth objectives.

Furthermore, Lattice Biologics is proactively working to complete key additions to its Scientific Advisory Boards (SABs) which are comprised of strategic Key Opinion Leaders (KOLs) in each of the Company's targeted surgical specialties. These professionals play a significant role in influencing industry perception and opinion and can be instrumental in the recruitment of new surgeon partners and generation of critical clinical data.

"I am extremely pleased with our new sales team efforts to secure national and international accounts that will provide an immediate impact to our sales revenues. Their dedicated efforts over the last few months have allowed us to achieve a higher gross margin than previous quarters, while decreasing G&A and salary expenses. We are a much leaner and more efficient organization," states CEO Guy Cook.

Lattice Biologics maintains its commitment to honoring the gift of donation by implementing a strong quality control environment for the recovery and processing of donors, which has resulted in a multi-year American Association of Tissue Banks (AATB) re-accreditation.

As indicated above, the Company continues efforts to diversify the sales mix across the new higher margin product lines added in 2016 and expected new products in 2017.

Second Quarter 2017 Financial Results (all figures denoted in USD):

The product launches have been well received by surgeons and the Company continues to replace unprofitable legacy contracts and focus on the newer higher margin products. Lattice Biologics' total revenue was $765,357 in the three months ended March 31, 2017 compared to $1,006,975 for the three months ended March 31, 2016, a decrease of 24%, however gross margin increased 23% over the same period, as shown in the following quarter tables:

Mar-31 Dec-31 Sep-30 Jun-30 Mar-31 Dec-31 Sep-30 Jun-30
2017 2016 2016 2016 2016 2015 2015 2015
ADM dermis $ 212,740 28% $ 208,912 23% $ 130,575 18% $ 220,365 23% $ 48,336 5% $ 51,430 5% $ 92,659 9% $ 53,544
DBM putty 62,964 8% 58,110 7% 151,071 21% 246,235 25% 104,856 10% 50,856 5% 21,175 2% 8,984
Bone scaffold 403,027 53% 567,841 64% 411,131 56% 505,603 52% 847,326 84% 954,496 89% 918,983 89% 840,033
Other 86,626 11% 56,588 6% 40,128 5% 117 0% 6,457 1% 8,872 1% 4,348 0% 11,995
Total revenue $ 765,357 100% $ 891,451 100% $ 732,905 100% $ 972,320 100% $
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