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PolarityTE Reports Second Quarter 2020 Results

SALT LAKE CITY–(BUSINESS WIRE)–PolarityTE, Inc. (Nasdaq: PTE), a biotechnology company developing regenerative tissue products and biomaterials, today reported financial results for the second calendar quarter of 2020. PolarityTE will host a conference call and webcast today, August 6, 2020 at 8:00 a.m. ET.

Highlights

  • Total revenues were $2.27 million in Q2:20 compared to $1.33 million in Q2:19
  • SkinTE revenues were $0.94 million in Q2:20 compared to $0.50 million in Q2:19
  • Paid Cases were 88 in Q2:20 compared to 46 in Q2:19

Financial Results for the Three Months Ended June 30, 2020

Total revenue for the three months ended June 30, 2020 was $2.27 million, of which $0.94 million was from sales of SkinTE and $1.32 million from PolarityTE’s contract service operations, which includes $0.71 million from COVID-19 testing services that the Company started providing at the end of May 2020. (Read more…)

Research and development expenses for the three months ended June 30, 2020 were approximately $3.16 million versus $4.76 million for the three months ended June 30, 2019. Research and development expenses for the three months ended June 30, 2020 included an expense of $0.40 million from stock-based compensation which is a non-cash charge, versus $1.48 million for the three months ended June 30, 2019.

General and administrative expenses for the three months ended June 30, 2020 were $5.21 million versus $15.06 million for the three months ended June 30, 2019. General and administrative expenses for the three months ended June 30, 2020 included $0.14 million of stock-based compensation which is a non-cash charge, versus $6.89 million for the three months ended June 30, 2019.

Sales and marketing expenses for the three months ended June 30, 2020 were $2.02 million versus $3.98 million for the three months ended June 30, 2019.

Net loss for the three months ended June 30, 2020 was $12.68 million compared with a net loss of $22.79 million for the three months ended June 30, 2019.

Cash and Liquidity as of June 30, 2020

As of June 30, 2020, our cash, cash equivalents and short-term investments balance was approximately $30.50 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 June 30, 2020 was approximately $11.56 million, or approximately $3.85 million per month on average, 10% lower than the $4.27 million monthly average in the three months ended June 30, 2019 and 17% lower than the $4.62 million monthly average in the three months ended March 31, 2020.

The Company believes capital resources will be sufficient to fund its current business plan including related operating expenses and capital expenditure requirements into the second quarter of 2021.

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 679989 and referencing “PolarityTE Second 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)

 

 

 

June 30,

2020

 

December 31,

2019

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

$

30,504

 

$

10,218

 

Short-term investments

 

 

 

19,022

 

Accounts receivable, net

 

2,115

 

 

1,731

 

Inventory

 

281

 

 

252

 

Prepaid expenses and other current assets

 

2,453

 

 

1,264

 

Total current assets

 

35,353

 

 

32,487

 

Property and equipment, net

 

12,729

 

 

14,911

 

Operating lease right-of-use assets

 

3,559

 

 

4,590

 

Intangible assets, net

 

636

 

 

731

 

Goodwill

 

278

 

 

278

 

Other assets

 

599

 

 

602

 

TOTAL ASSETS

$

53,154

 

$

53,599

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable and accrued expenses

$

5,050

 

$

7,095

 

Other current liabilities

 

2,644

 

 

2,338

 

Current portion of long-term notes payable

 

1,436

 

 

528

 

Deferred revenue

 

97

 

 

98

 

Total current liabilities

 

9,227

 

 

10,059

 

Common stock warrant liability

 

8,736

 

 

 

Operating lease liabilities

 

2,192

 

 

2,994

 

Other long-term liabilities

 

1,022

 

 

1,630

 

Long-term notes payable

 

2,410

 

 

 

Total liabilities

 

23,587

 

 

14,683

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Preferred stock – 25,000,000 shares authorized, 0 shares issued and outstanding at June 30, 2020 and December 31, 2019

 

 

 

 

Common stock – $.001 par value; 250,000,000 shares authorized; 38,496,910 and 27,374,653 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively

 

38

 

 

27

 

Additional paid-in capital

 

490,603

 

 

474,174

 

Accumulated other comprehensive income

 

 

 

72

 

Accumulated deficit

 

(461,074

)

 

(435,357

)

Total stockholders’ equity

 

29,567

 

 

38,916

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

53,154

 

$

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 Six Months Ended

 

 

June 30,

 

June 30,

 

 

2020

 

2019

 

2020

 

2019

Net revenues

 

 

 

 

 

 

 

 

 

 

 

 

Products

$

944

 

$

504

 

$

1,372

 

$

801

 

Services

 

1,322

 

 

822

 

 

1,827

 

 

1,990

 

Total net revenues

 

2,266

 

 

1,326

 

 

3,199

 

 

2,791

 

Cost of sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

275

 

 

342

 

 

615

 

 

615

 

Services

 

607

 

 

254

 

 

783

 

 

757

 

Total cost of sales

 

882

 

 

596

 

 

1,398

 

 

1,372

 

Gross profit

 

1,384

 

 

730

 

 

1,801

 

 

1,419

 

Operating costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

3,164

 

 

4,764

 

 

6,537

 

 

10,116

 

General and administrative

 

5,211

 

 

15,060

 

 

15,816

 

 

32,255

 

Sales and marketing

 

2,024

 

 

3,981

 

 

5,718

 

 

7,934

 

Restructuring and other charges

 

2,084

 

 

 

 

2,536

 

 

 

Total operating costs and expenses

 

12,483

 

 

23,805

 

 

30,607

 

 

50,305

 

Operating loss

 

(11,099

)

 

(23,075

)

 

(28,806

)

 

(48,886

)

Other income (expenses)

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of common stock warrant liability

 

(1,591

)

 

 

 

2,941

 

 

 

Interest (expense) income, net

 

(65

)

 

29

 

 

(77

)

 

99

 

Other income, net

 

78

 

 

254

 

 

225

 

 

422

 

Net loss

$

(12,677

)

$

(22,792

)

$

(25,717

)

$

(48,365

)

Net loss per share, basic and diluted

$

(0.33

)

$

(0.92

)

$

(0.72

)

$

(2.09

)

Weighted average shares outstanding, basic and diluted

 

38,428,289

 

 

24,768,453

 

 

35,724,141

 

 

23,190,343

 

 

POLARITYTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

 

 

For the Six Months Ended

June 30,

 

 

2020

 

2019

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

$

(25,717

)

$

(48,365

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Stock based compensation expense

 

3,784

 

 

18,907

 

Depreciation and amortization

 

1,549

 

 

1,446

 

Amortization of intangible assets

 

95

 

 

99

 

Amortization of debt discount

 

13

 

 

28

 

Change in fair value of common stock warrant liability

 

(2,941

)

 

 

Change in fair value of contingent consideration

 

 

 

(48

)

Loss on abandonment of property and equipment

 

1,529

 

 

 

 

Other non-cash adjustments

 

(21

)

 

30

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

(384

)

 

(624

)

Inventory

 

(29

)

 

(26

)

Prepaid expenses and other current assets

 

(1,189

)

 

(486

)

Operating lease right-of-use assets

 

899

 

 

791

 

Other assets

 

3

 

 

25

 

Accounts payable and accrued expenses

 

(2,109

)

 

(17

)

Other current liabilities

 

9

 

 

367

 

Deferred revenue

 

(1

)

 

(126

)

Operating lease liabilities

 

(903

)

 

(670

)

Other long-term liabilities

 

 

 

(120

)

Net cash used in operating activities

 

(25,413

)

 

(28,789

)

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

Purchase of property and equipment

 

(1,170

)

 

(2,110

)

Purchase of available-for-sale securities

 

(14,144

)

 

(15,445

)

Proceeds from maturities of available-for-sale securities

 

16,945

 

 

9,278

 

Proceeds from sale of available-for-sale securities

 

16,171

 

 

 

Net cash provided by (used in) investing activities

 

17,802

 

 

(8,277

)

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

 

(6

)

 

(636

)

Payment of contingent consideration liability

 

 

 

(109

)

Principal payments on financing leases

 

(243

)

 

(225

)

Proceeds from term note payable and financing arrangements

 

4,629

 

 

 

Principal payments on term note payable and financing arrangements

 

(830

)

 

(262

)

Net cash provided by financing activities

 

27,897

 

 

27,280

 

Net increase (decrease) in cash and cash equivalents

 

20,286

 

 

(9,786

)

Cash and cash equivalents – beginning of period

 

10,218

 

 

55,673

 

Cash and cash equivalents – end of period

$

30,504

 

$

45,887

 

 

Contacts

Investors:
Rich Haerle

VP, Investor Relations

PolarityTE, Inc.

[email protected]
(385) 315-0697

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