RANCHO CORDOVA, Calif.,
Aug. 14, 2020 /PRNewswire/ --
ThermoGenesis Holdings, Inc. (Nasdaq: THMO), a market leader in
automated cell processing tools and services in the cell and gene
therapy field, today announced financial and operating results for
the second quarter ended June 30,
2020 and provided a corporate strategic update.
Second Quarter and Subsequent Achievements:
- In April 2020, the Company's
19%-owned joint venture, ImmuneCyte, acquired worldwide
intellectual property for development of fully human antibody
therapeutics for COVID-19, including four high-affinity monoclonal
antibody drug candidates against SARS-CoV-2 and tools for screening
and quantifying efficacy of such neutralizing antibodies. Results
of the research related to these neutralizing antibody therapeutics
were published in an article entitled, "Cross-neutralization
antibodies against SARS-CoV-2 and RBD mutations from convalescent
patient antibody libraries," in bioRxiv in June 2020.
- On June 4, at the 2020 annual
stockholder meeting, the Company received majority stockholder
approval to authorize a new class of non-voting class B common
stock. The Company intends to issue shares of the class B common
stock to existing stockholders as a dividend payout. The class B
common stock will be publicly traded under a separate ticker from
its current class of common stock. The Company intends to use the
class B shares as a vehicle to assist with future strategic
acquisitions. The timing of the dividend will be determined by the
Company at a later date.
- On June 11, the Company filed
patent applications for a point-of-care device which improves the
speed and accuracy of its lateral flow immunoassays (LFIA) to
detect COVID-19 IgM and IgG antibodies from a single drop of
blood.
- On June 23, Corning
Incorporated's Life Sciences Division began the commercial launch
of the Company's X-SERIES® cell processing platform under the
ThermoGenesis® and Corning® dual brand, as part of the previously
announced global distribution agreement.
- On June 29, the Company was added
to the Russell Microcap® Index.
- On August 11, the Company entered
into a supply agreement with BioHit Healthcare (Hefei) Co., Ltd., to market, under the
ThermoGenesis brand, its SARS-CoV-2 IgM/IgG Antibody Test Kit,
which has already received Emergency Use Authorization (EUA) from
the U.S. Food and Drug Administration (FDA). Marketing activities
are expected to begin on August 17,
2020.
"During the last few months, we adapted our strategy to develop
and market a range of solutions to fight the global pandemic,"
stated Chris Xu, Ph.D., Chief
Executive Officer of ThermoGenesis. "Notably, we contracted with a
new manufacturer for a SARS-CoV-2 (COVID-19) IgM/IgG Antibody Test
Kit which has already obtained EUA designation from the FDA and
look forward to begin marketing next week. We plan to further
differentiate this kit with the addition of a lateral flow
immunoassay cartridge testing kit reader, now in the final stages
of development, which is designed to improve the speed and
accuracy of the COVID-19 antibody assay. Our research team has
already filed a number of key patent applications around the
reader, which allows for big data analysis, which we believe
will be essential information as we continue to re-open our society
and our economy."
Dr. Xu continued, "Also of note, was the commercial launch of
our proprietary X-SERIES cell processing platform by our global
distributor, Corning Life Sciences, under the ThermoGenesis and
Corning® dual brand. We remain committed to expanding our robust
product line of automated cellular processing tools and services to
become a market leader for cell banking and cell therapies, which
will sustain our growth beyond this COVID-19 pandemic."
Jeff Cauble, Chief Financial
Officer of ThermoGenesis, added, "The second quarter marked one of
our best quarters for CAR-TXpress™ sales, up $400,000 from the prior period. This is an
encouraging indication of the strength of Corning's distribution
and their ability to expand the market penetration for this product
line. While this improvement was offset by a reduction in revenues
for our other product lines as a result of the COVID-19 pandemic,
we expect sales to return to prior levels as the health emergency
subsides."
Financial Results for the Quarter Ended June 30, 2020
Net revenues. Net revenues for the three months
ended June 30, 2020 were $2.2 million compared to $4.3 million for the three months ended
June 30, 2019, a decrease of
$2.1 million or 48%. The decrease was
driven by AXP disposable sales, which declined from 1,403 cases
sold in the quarter ended June 30,
2019 to 372 cases sold in the quarter ended June 30, 2020. The COVID-19 pandemic has
had a significant impact on the cord blood industry, with fewer
cord blood units being stored globally after the start of the
pandemic. Additionally, with many countries and states on lockdown,
some customers opted to consume their existing safety stock in lieu
of placing new orders during the current quarter. The Company
currently expects AXP disposable sales to increase back to their
prior levels after the pandemic is over. Also contributing to the
decrease was BioArchive® device sales, as one device was sold in
the quarter ended June 30, 2019 as
opposed to no devices sold in the current quarter. Offsetting these
decreases was an increase of $0.5
million in CAR-TXpress™ sales due to the distributor for
this product line, Corning Incorporated, adding CAR-TXpress to its
suite of products and beginning sales to their customers in the
quarter ended June 30, 2020. Other
revenue also increased by $267,000,
driven by approximately $200,000 for
COVID-19 testing kits.
Gross profit. Gross profit (loss) was $(2.6) million or (117)% of net revenues for the
three months ended June 30, 2020
compared to $2.0 million or 45% of
net revenues for the three months ended June
30, 2019, a decrease of $4.6
million. The loss was driven by an inventory reserve of
approximately $3.6 million for the
remaining on hand inventory of COVID-19 testing kits from
ImmuneCyte recognized during the quarter ended June 30, 2020. Additionally, the quarter ended
June 30, 2020 had 1,031 fewer cases
of AXP disposables sold as compared to the same period in 2019.
This resulted in approximately $1.0
million less in gross profit from AXP disposables. There was
also a reduction in gross profit of approximately $75,000 due to no BioArchive devices being sold
in the quarter ended June 30, 2020.
The reduction in gross profit was offset by an increase in gross
profit of approximately $225,000 due
to increased CAR-TXpress sales in the quarter ended June 30, 2020 as compared to the same period in
2019.
Sales and marketing expenses. For the three months
ended June 30, 2020 sales and
marketing expenses were $442,000
compared to $384,000 for the three
months ended June 30, 2019, an
increase of $58,000 or 15%. The
increase was driven by expenses related to the Company's short-term
incentive program.
Research and development expenses. Research and
development expenses were $578,000
for the three months ended June 30,
2020 compared to $611,000 for
the three months ended June 30, 2019,
a decrease of $33,000 or 5%. The
decrease was driven by development expenses for the Company's BACS
technology of approximately $100,000
which were incurred in the three months ended June 30, 2019. Those expenses were offset by
increases of approximately $35,000 in
development costs related to the COVID-19 cartridge reader and
approximately $30,000 in expenses for
the Company's short-term incentive program which were incurred in
the three months ended June 30,
2020.
General and administrative expenses. General and
administrative expenses for the three months ended June 30, 2020 were $1.5
million, compared to $1.2
million for the three months ended June 30, 2019, an increase of $0.3 million or 26%. The increase is due to
approximately $200,000 more for stock
compensation expense in the quarter ended June 30, 2020, related to stock options granted
to the Board and Company Executives during the current quarter; and
approximately $100,000 in accrued
expenses related to the Company's short-term incentive program.
Interest expense. Interest expense for the three
months ended June 30, 2020 was
$1.3 million, as compared
$1.2 million for the three months
ended June 30, 2019, an increase of
$103,000. The increase was driven by
additional interest expense and amortization of the debt discount
related to the Revolving Credit Agreement with Boyalife Asset
Holding II, Inc.
Net loss. For the quarter ended June 30, 2020, the Company reported a
comprehensive loss attributable to common stockholders of
$6.4 million, or $(1.02) per share, based on 6,315,566 weighted
average basic and diluted common shares outstanding. This compares
to a comprehensive net loss of $1.3
million, or $(0.47) per share,
based on 2,784,776 weighted average basic and diluted common shares
outstanding for the quarter ended June 30,
2019.
Adjusted EBITDA. In addition to the results
reported under US GAAP, the Company also uses a non-GAAP measure to
evaluate operating performance and to facilitate the comparison of
its historical results and trends. The Company uses the metric to
determine operational cash flow. Adjusted EBITDA loss for the
quarter ended June 30, 2020 was
$4.7 million, as compared to an
Adjusted EBITDA of $53,000 for the
quarter ended June 30, 2019, a
decrease of $4.7 million. The
adjusted EBITDA decrease was primarily due to the $4.6 million decrease in gross profit in the
quarter ended June 30, 2020 as
compared to the same quarter in 2019, as well as approximately
$175,000 more in expenses related to
the Company's short-term incentive program. A reconciliation of
adjusted EBITDA loss to net loss is set forth below.
At June 30, 2020, the Company had
cash and cash equivalents totaling $7.0
million, compared with $3.2
million at December 31, 2019.
Working capital improved to $8.0
million at June 30, 2020 as
compared to $3.2 million at
December 31, 2019.
Conference Call and Webcast Information
ThermoGenesis will host a conference call today at 1:30 p.m. PT/4:30 p.m.
ET. To participate in the conference call, please dial
1-844-889-4331 (domestic), 1-412-380-7406 (international) or
1-866-605-3852 (Canada). To access
a live webcast of the call, please visit:
https://thermogenesis.com/investors/news-and-events/events-webcasts.
A webcast replay will be available on ThermoGenesis' website for
three months by visiting the Investor page of the Company's website
at www.thermogenesis.com.
About ThermoGenesis Holdings, Inc.
ThermoGenesis Holdings, Inc. develops, commercializes, and markets
a range of automated technologies for CAR-T and other cell-based
therapies. The Company currently markets a full suite of solutions
for automated clinical biobanking, point-of-care applications, and
automation for immuno-oncology, including its semi-automated,
functionally-closed CAR-TXpress™ platform, which streamlines
the manufacturing process for the emerging CAR-T immunotherapy
market. For more information about ThermoGenesis, please
visit: www.thermogenesis.com.
Forward-Looking Statements
This press release contains "forward-looking statements" within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995. The forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements contained herein. When
used in this press release, the words "anticipate," "believe,"
"estimate," "expect" and similar expressions as they relate to the
Company or its management are intended to identify such
forward-looking statements. Actual results, performance or
achievements could differ materially from the results expressed in
or implied by these forward-looking statements. Readers should be
aware of important factors that, in some cases, have affected, and
in the future could affect, actual results to differ materially
from those expressed in any forward-looking statements made by or
on behalf of the Company. These factors include without
limitation, the ability to obtain capital and other financing in
the amounts and at the times needed to launch new products, market
acceptance of new products, the nature and timing of regulatory
approvals for both new products and existing products for which the
Company proposes new claims, realization of forecasted revenues,
expenses and income, initiatives by competitors, price pressures,
failure to meet FDA regulated requirements governing the Company's
products and operations (including the potential for product
recalls associated with such regulations), risks associated with
initiating manufacturing for new products, failure to meet Foreign
Corrupt Practice Act regulations, legal proceedings, uncertainty
associated with the COVID-19 pandemic, and other risk factors
listed from time to time in our reports with the Securities and
Exchange Commission ("SEC"), including, in particular, those set
forth in ThermoGenesis Holdings' Form 10-K for the year ended
December 31, 2019.
Company Contact:
Wendy
Samford
916-858-5191
ir@thermogenesis.com
Investor Contact:
Paula Schwartz, Rx
Communications
917-322-2216
pschwartz@rxir.com
Financials
ThermoGenesis
Holdings, Inc.
|
Condensed
Consolidated Balance Sheets
|
|
|
|
June 30,
2020
|
|
December
31,
2019
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and
cash equivalents
|
|
$6,984,000
|
|
$3,157,000
|
Restricted cash
|
|
--
|
|
1,000,000
|
Accounts
receivable, net
|
|
1,654,000
|
|
1,278,000
|
Inventories, net
|
|
5,189,000
|
|
3,824,000
|
Prepaid
expenses and other current assets
|
|
837,000
|
|
602,000
|
|
|
|
|
|
Total current assets
|
|
14,664,000
|
|
9,861,000
|
|
|
|
|
|
Equipment and
leasehold improvements, net
|
|
1,657,000
|
|
2,028,000
|
Right-of-use
operating lease assets, net
|
|
797,000
|
|
859,000
|
Goodwill
|
|
781,000
|
|
781,000
|
Intangible assets,
net
|
|
1,406,000
|
|
1,467,000
|
Other
assets
|
|
48,000
|
|
218,000
|
|
|
|
|
|
Total assets
|
|
$19,353,000
|
|
$15,214,000
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$3,236,000
|
|
$1,447,000
|
Other
current liabilities
|
|
3,369,000
|
|
5,238,000
|
|
|
|
|
|
Total current liabilities
|
|
6,605,000
|
|
6,685,000
|
|
|
|
|
|
Long-term
liabilities
|
|
7,418,000
|
|
7,613,000
|
|
|
|
|
|
ThermoGenesis
Holdings, Inc. stockholders' equity
|
|
5,014,000
|
|
386,000
|
|
|
|
|
|
Noncontrolling
interests
|
|
316,000
|
|
530,000
|
|
|
|
|
|
Total liabilities and equity
|
|
$19,353,000
|
|
$15,214,000
|
ThermoGenesis
Holdings, Inc.
|
Condensed
Consolidated Statements of Operations
|
(Unaudited)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net
revenues
|
$2,242,000
|
|
$4,305,000
|
|
$5,442,000
|
|
$7,268,000
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
4,874,000
|
|
2,354,000
|
|
6,582,000
|
|
4,057,000
|
|
|
|
|
|
|
|
|
Gross profit (loss)
|
(2,632,000)
|
|
1,951,000
|
|
(1,140,000)
|
|
3,211,000
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
Sales
and marketing
|
442,000
|
|
384,000
|
|
886,000
|
|
725,000
|
|
|
|
|
|
|
|
|
Research
and development
|
578,000
|
|
611,000
|
|
1,187,000
|
|
1,175,000
|
|
|
|
|
|
|
|
|
General
and administration
|
1,536,000
|
|
1,218,000
|
|
3,184,000
|
|
2,478,000
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
2,556,000
|
|
2,213,000
|
|
5,257,000
|
|
4,378,000
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(5,188,000)
|
|
(262,000)
|
|
(6,397,000)
|
|
(1,167,000)
|
|
|
|
|
|
|
|
|
Interest
expense
|
(1,314,000)
|
|
(1,211,000)
|
|
(4,845,000)
|
|
(2,343,000)
|
Other income
(expenses)
|
(8,000)
|
|
(2,000)
|
|
2,000
|
|
(11,000)
|
Loss on equity method
investments
|
--
|
|
--
|
|
(13,000)
|
|
--
|
|
|
|
|
|
|
|
|
Total other
expense
|
(1,322,000)
|
|
(1,213,000)
|
|
(4,856,000)
|
|
(2,354,000)
|
|
|
|
|
|
|
|
|
Net loss
|
(6,510,000)
|
|
(1,475,000)
|
|
(11,253,000)
|
|
(3,521,000)
|
|
|
|
|
|
|
|
|
Loss attributable to
noncontrolling interests
|
(73,000)
|
|
(178,000)
|
|
(214,000)
|
|
(354,000)
|
|
|
|
|
|
|
|
|
Net loss attributable
to common stockholders
|
$(6,437,000)
|
|
$(1,297,000)
|
|
$(11,039,000)
|
|
$(3,167,000)
|
ThermoGenesis
Holdings, Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
Net cash used in operating activities
|
$(8,953,000)
|
|
$(2,911,000)
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(23,000)
|
|
(142,000)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from convertible
promissory note-related party
|
4,287,000
|
|
1,513,000
|
Payments on finance lease
obligations
|
(22,000)
|
|
(15,000)
|
Proceeds from issuance of
common stock, net of expenses
|
5,214,000
|
|
756,000
|
Proceeds from the exercise
of options, warrants and pre-funded warrants
|
1,683,000
|
|
23,000
|
Proceeds from long-term
debt
|
--
|
|
800,000
|
Proceeds from note
payable
|
646,000
|
|
--
|
|
|
|
|
Net cash
provided by financing activities
|
11,808,000
|
|
3,077,000
|
|
|
|
|
Effects of foreign
currency rate changes on cash and cash equivalents
|
(5,000)
|
|
--
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
2,827,000
|
|
24,000
|
|
|
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
4,157,000
|
|
3,400,000
|
Cash, cash
equivalents and restricted cash at end of period
|
$6,984,000
|
|
$3,424,000
|
ThermoGenesis
Holdings, Inc.
|
Reconciliation of
Adjusted EBITDA to Net Loss
|
(Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended June
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net loss
|
|
$(6,510,000)
|
|
$(1,475,000)
|
|
$(11,253,000)
|
|
$(3,521,000)
|
|
|
|
|
|
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(1,314,000)
|
|
(1,211,000)
|
|
(4,845,000)
|
|
(2,343,000)
|
Other
income (expense)
|
|
(8,000)
|
|
(2,000)
|
|
2,000
|
|
(11,000)
|
Loss on
equity method investments
|
|
--
|
|
--
|
|
(13,000)
|
|
--
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
$(5,188,000)
|
|
$(262,000)
|
|
$(6,397,000)
|
|
$(1,167,000)
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
193,000
|
|
190,000
|
|
392,000
|
|
402,000
|
Stock-based compensation expense
|
|
314,000
|
|
125,000
|
|
381,000
|
|
206,000
|
Adjusted
EBITDA
|
|
$(4,681,000)
|
|
$53,000
|
|
$(5,624,000)
|
|
$(559,000)
|
The Company defines adjusted EBITDA as income (or
loss) from operations less, depreciation, amortization, stock
compensation and impairment of intangible assets.
View original
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SOURCE ThermoGenesis Holdings, Inc.