U.S. markets closed
  • S&P 500

    4,471.37
    +33.11 (+0.75%)
     
  • Dow 30

    35,294.76
    +382.20 (+1.09%)
     
  • Nasdaq

    14,897.34
    +73.91 (+0.50%)
     
  • Russell 2000

    2,265.65
    -8.52 (-0.37%)
     
  • Crude Oil

    82.66
    +1.35 (+1.66%)
     
  • Gold

    1,768.10
    -29.80 (-1.66%)
     
  • Silver

    23.35
    -0.13 (-0.54%)
     
  • EUR/USD

    1.1606
    +0.0005 (+0.05%)
     
  • 10-Yr Bond

    1.5760
    +0.0570 (+3.75%)
     
  • GBP/USD

    1.3751
    +0.0074 (+0.54%)
     
  • USD/JPY

    114.2000
    +0.5230 (+0.46%)
     
  • BTC-USD

    60,977.52
    -404.25 (-0.66%)
     
  • CMC Crypto 200

    1,464.06
    +57.32 (+4.07%)
     
  • FTSE 100

    7,234.03
    +26.32 (+0.37%)
     
  • Nikkei 225

    29,068.63
    +517.70 (+1.81%)
     

PolarityTE Reports Third Quarter 2020 Results

  • Oops!
    Something went wrong.
    Please try again later.
·10 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

PolarityTE, Inc. (Nasdaq: 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/

Contacts

Investors:
Rich Haerle
VP, Investor Relations
PolarityTE, Inc.
ir@PolarityTE.com
(385) 315-0697