SALT LAKE CITY, Nov. 10, 2021 /PRNewswire/ -- PolarityTE,
Inc. (Nasdaq: PTE) a biotechnology company developing
regenerative tissue products and biomaterials, today provided a
business update and reported financial results for the three and
nine-month periods ended September 30,
2021.
Recent Business and Financial Updates
- Based on recent informal interactions with FDA regarding
certain chemistry, manufacturing, and control (CMC) issues related
to the proposed potency assay for SkinTE®, the Company
believes that its complete response to FDA's clinical hold
correspondence will be submitted by year end.
- The Company continues to engage clinical trial sites and
expects to be prepared to commence a pivotal study under the IND in
short order if FDA accepts the IND following the submission of the
Company's complete response.
- On October 26, 2021, the U.S.
Patent and Trademark Office issued a Notice of Allowance in U.S.
Application No. 15/650,659, which covers additional methods using
the Company's minimally polarized functional unit (MPFU)
technology. This is the Company's third patent allowance in
the United States. The Company was
also granted Chinese Patent No. ZL 201580075326.3 on September 3, 2021, received a Notification Prior
to Acceptance for Israeli Patent Application No. 252613 on
July 25, 2021, and was granted
Philippines Patent No. 1/2017/501009 on August 26, 2021. The Chinese patent covers
skin-regenerative compositions utilizing the Company's MPFU
technology as well as methods of making a skin-regenerative
composition utilizing the MPFU technology. The Israeli application
and the patent in the Philippines
each cover skin-regenerative compositions utilizing the Company's
MPFU technology. The Company continues to pursue additional patent
applications in the United States
and abroad related to its regenerative technologies, including
SkinTE.
- Cash used in operations for the three months ended September 30, 2021 was $4.6 million, or an average of $1.5 million per month, representing a 32%
reduction from the comparable period in 2020.
- Operating loss for the nine months ended September 30, 2021, was $24.2 million, an improvement of 35% from the
operating loss of $37.4 million for
the comparable period in 2020.
- The Company had cash and cash equivalents of $27.4 and working capital of $24.9 million at September
30, 2021.
Richard Hague, Chief Executive
Officer, commented, "We are encouraged by the feedback we have
received from the FDA regarding our IND for SkinTE, and we are on
track to submit our complete response to the Agency by year
end. Additionally, we are making good progress preparing for
the launch of our first pivotal study and we believe if FDA accepts
our IND that we can enroll our first patient shortly after
approval. We are also pleased with the continued growth of our
intellectual property portfolio, and we are executing on these
fronts while demonstrating good discipline with respect to managing
our capital efficiently."
Financial Results for the Period Ended September 30, 2021
There have been significant changes in the Company's operations
affecting its results of operations for the three and nine-month
periods ended September 30, 2021,
compared to the three and nine-month periods ended September 30, 2020.
SkinTE was registered and listed with the FDA in August 2017 based on the Company's determination
that SkinTE should be regulated solely under Section 361 of the
Public Health Service Act and Part 1271 of Title 21 of the Code of
Federal Regulations (i.e., as a so-called 361 HCT/P) and that, as a
result, no premarket review or approval by the FDA was
required. The Company proceeded to develop sales and
manufacturing capabilities for SkinTE and focused on advancing
commercialization of SkinTE. The Company began a regional
commercial rollout of SkinTE in October
2018, and while it was marketed it was used in complex
wounds, such as diabetic foot ulcers penetrating to tendon,
capsule, and bone classified, Stage 3 and 4 pressure injuries, and
acute wounds. Given the Company's significant real-world
experience with the application of SkinTE and several supporting
publications, the Company believes SkinTE could significantly
improve clinical outcomes. Following informal, voluntary
discussions between the Company and the FDA the Company was advised
by the FDA in April 2020 that its
preliminary assessment is that SkinTE does not meet the
requirements to be regulated solely as a 361 HCT/P. Rather,
the FDA's preliminary assessment was that SkinTE is a biological
product that should be regulated under Section 351 of the Public
Health Service Act. The Company re-evaluated its regulatory
approach and determined it is prudent to submit an IND for SkinTE
and an eventual BLA rather than engage in a protracted dispute with
the FDA. On July 23, 2021, the
Company submitted an IND through its subsidiary and the Company's
business resources and activities are now focused primarily on
advancing its IND, including addressing a clinical hold on our IND
imposed by the FDA on August 20,
2021. The Company ceased selling SkinTE at the end of
May 2021, when the period of
enforcement discretion previously announced by the FDA with respect
to its IND and premarket approval requirements for 361 HCT/Ps came
to an end. As a result, the Company generated revenues from
the sale of SkinTE and related sales, marketing, and administrative
expenses related to that sales effort during the three and nine
months ended September 30, 2020,
which were not present during the period beginning in June 2021 and ending September 30, 2021.
Arches Research, Inc. a subsidiary of the Company ("Arches")
began offering COVID-19 testing services in May 2020 under 30-day renewable testing
agreements with multiple nursing home and pharmacy facilities in
the state of New York controlled
by a single company, which substantially added to the Company's
services net revenues in the last seven months of 2020 and first
three months of 2021. When the New
York nursing homes and pharmacies adopted on-site employee
testing at the end of March 2021, the
Company's COVID-19 testing revenues declined substantially, and on
or about August 17, 2021, the Company
decided to cease COVID-19 testing.
The COVID-19 pandemic had a significant adverse effect on the
preclinical research services offered by IBEX Preclinical Research,
Inc., a subsidiary of the Company ("IBEX") in 2020, but there has
been a resurgence in that business during the first nine months of
2021. The increase in revenues from IBEX services helped to
offset the loss of COVID-19 testing revenues in the second and
third quarters of 2021. Nevertheless, revenues from the
Company's services business declined 63% in the third quarter of
2021 compared to the first quarter of the year. Due to the
circumstances described above, the Company expects revenues from
its services business will be derived primarily from IBEX's
preclinical research and veterinary sciences business for the
remainder of 2021.
As a result of the foregoing developments, the Company made a
number of changes to its operations that impacted results of
operations. These included reductions in the Company's work
force in 2020 and 2021, and reducing the services and
infrastructure needed to support a larger work force and commercial
sales effort.
Comparison of the three months ended September 30, 2021, and the three months ended
September 30, 2020
Net Revenues. Net revenues decreased $2.2 million, or 67%, for the three months ended
September 30, 2021, compared to the
same period in 2020.
Products net revenues were $0 for
the three months ended September 30,
2021, compared to $1.2 million
for the three-month period ended September
30, 2020. We will not engage in any products sales
activity in the fourth quarter of 2021, so the only products net
revenues we may recognize in that period or subsequent, foreseeable
periods are nominal amounts collected on accounts for product
shipped prior to the end of May 2021
that were not previously recognized because of concerns with
collectability.
Net revenues from services decreased by 49% for the three-month
period ended September 30, 2021,
compared to the corresponding period in 2020. The substantial
majority of the Company's services net revenues in the third
quarter of 2021 were generated by IBEX's preclinical research and
veterinary sciences business due to the decline in the Company's
COVID-19 testing business and cessation of that testing business in
August 2021. At this time, the Company does not plan to offer
COVID-19 testing in the future, so services net revenues in future
periods will be generated through research services excluding
COVID-19 testing that the Company has offered,
historically.
Cost of Sales. Cost of sales decreased $0.7 million, or 53%, for the three months ended
September 30, 2021, compared to the
three months ended September 30,
2020. There were no costs of sales attributable to products
net revenues in the third quarter of 2021 because the Company
ceased SkinTE sales in the second quarter of 2021. Cost of
sales for services revenues decreased 44% period over period for
the three months ended September 30,
2021, compared to the three months ended September 30, 2020, which is primarily
attributable to the decline in the Company's COVID-19 testing
business and cessation of that testing business in August
2021.
Operating Costs and Expenses. Operating costs and expenses
decreased $2.7 million, or 25%, for
the three months ended September 30,
2021, compared to the three months ended September 30, 2020. The reduction in
operating costs and expenses is attributable to reductions in
general and administrative expenses and sales and marketing
expenses that were partially offset by increases in research and
development expenses and restructuring and other charges.
Research and development expenses increased 43% period over
period for the three months ended September
30, 2021, compared to the three months ended September 30, 2020. The substantial
increase in the three-month period ended September 30, 2021, is primarily attributable to
an increase in lab supply costs and consulting services for work on
the CMC elements of the Company's IND and re-allocation of costs
for manufacturing supplies and compensation following the cessation
of SkinTE sales from products cost of goods, general and
administrative expenses, and sales and marketing expenses to
research and development costs.
The Company effectuated a substantial reduction in work force
for its commercial operations in May
2020 and in May 2021. Consequently, there were
significant reductions in cash compensation, stock compensation,
consulting fees, and travel expense. As the Company pared
down its staff and sales activity, the Company also reduced
expenses related to a larger operation by terminating its lease for
the Utah corporate office in
September 2020 and ceasing operations
at its satellite manufacturing facility in Georgia in the fourth quarter of 2020.
Furthermore, with the cessation of SkinTE sales the Company
re-allocated manufacturing supplies and compensation from general
and administrative expenses to research and development
costs. The cost cutting measures and re-allocation of costs
described above are the primary causes of a 41% decrease in general
and administrative expense period over period for the three months
ended September 30, 2021, compared to
the three months ended September 30,
2020.
When the Company reduced its commercial sales team and related
commercial activities beginning in May
2020 and May 2021, the Company
also took steps to reduce staff and consultants in sales and
marketing. With the cessation of SkinTE sales several
employees who supported sales and marketing moved into new roles in
research and development, so their compensation was allocated to
research and development. Consequently, there were
significant reductions in cash compensation, stock compensation,
consulting fees, and travel expense, which resulted in a 94%
decrease in sales and marketing expense for the three months ended
September 30, 2021, compared to the
three months ended September 30,
2020.
In the three-month period ended September
30, 2021, the Company paid severance and recognized costs
for adjustment of equity awards arising from the reduction in force
the Company implemented at the end of May
2021, which were recorded as restructuring and other
charges. The Company did not have restructuring charges in
the three-month period ended September
30, 2020.
Operating Loss and Net Loss. Operating loss decreased
$1.2 million, or 14%, for the three
months ended September 30, 2021,
compared to the three months ended September
30, 2020. Net loss decreased $6.1 million, or 86%, for the three months ended
September 30, 2021, compared to the
three months ended September 30,
2020.
Warrants issued in connection with financings the Company
completed in January 2021 are
classified as liabilities and remeasured each period until settled
or until classified as equity. As a result of the periodic
remeasurement the Company recorded a gain for change in fair value
of common stock warrant liability of $6.4
million for the three months ended September 30, 2021, compared to a gain of
$1.5 million for the three months
ended September 30, 2020.
Comparison of the nine months ended September 30, 2021, and the nine months ended
September 30, 2020
Net Revenues. Net revenues increased $1.8 million, or 28%, for the nine months ended
September 30, 2021, compared to the
nine months ended September 30,
2020.
Products net revenues of $2.9
million were the same for the nine months ended September 30, 2021, as they were for the six
months ended June 30, 2021, due to
the cessation of the Company's commercial sales operation for
SkinTE at the end of May 2021. As a result of the cessation
of the Company's commercial sales operation, products net revenues
increased only 16% for the nine months ended September 30, 2021, compared to the corresponding
period in 2020. The Company expects products net revenues for
fiscal year 2021 will remain essentially unchanged from the amount
recorded for the six-month period ended June
30, 2021, except for nominal amounts we may collect on
accounts for product shipped prior to the end of May 2021 that were not previously recognized
because of concerns with collectability.
The mix of business activity generating services net revenues
changed from a majority of service revenues generated by COVID-19
testing in the nine months ended September
30, 2020, to a majority of service revenues generated by
preclinical research services in the nine months ended September 30, 2021. Service revenues
generated by the Company's preclinical research services business
in the nine months ended September 30,
2021, were substantially higher than the comparable period
in 2020, as this business activity experienced a strong recovery
from the poor results in 2020 attributable to the COVID-19
pandemic. Our COVID-19 testing services were a significant
contributor to overall services revenues only in the first three
months of 2021. As a result of these developments net
revenues from services increased by 36% for the nine months ended
September 30, 2021, compared to the
corresponding period in 2020.
Cost of Sales. Cost of sales increased $1.0 million, or 35%, for the nine months ended
September 30, 2021, compared to the
nine months ended September 30,
2020. This increase is a result of a 70% increase in the cost
of sales for services revenues during the first nine months of 2021
that is primarily a result of the increase in business generated by
the Company's preclinical research services, which was only
partially offset by lower cost of sales arising from the fall-off
in its COVID-19 testing business after March
2021 and the elimination of cost of sales for its products
business during the four-month period ended September 30, 2021, resulting from the cessation
of SkinTE sales at the end of May 2021.
Cost of sales attributable to products net revenues was the same
for the nine months ended September 30,
2021, as it was for the six months ended June 30, 2021, due to the cessation of the
Company's commercial sales operation for SkinTE at the end of May
2021. For the nine-month period ended September 30, 2021, cost of sales for products
revenues decreased 46% period over period compared to the nine
months ended September 30, 2020, even
though revenues were higher in 2021 for the nine-month period,
which is attributable to the economies of scale the Company
achieved in the first five months of 2021 by selling product for
larger wound sizes in 2021 compared to 2020 and the elimination of
products cost of sales during the four-month period ended
September 30, 2021.
Operating Costs and Expenses. Operating costs and expenses
decreased $12.3 million, or 30%, for
the nine months ended September 30,
2021, compared to the nine months ended September 30, 2020. The reduction in
operating costs and expenses is attributable to reductions in
general and administrative expenses, sales and marketing expenses,
and restructuring and other charges that were partially offset by
increases in research and development expenses.
Research and development expenses increased 14% period over
period for the nine months ended September
30, 2021, compared to the nine months ended September 30, 2020. The substantial
increase in the nine-month period ended September 30, 2021 is primarily attributable to
an increase in lab supply costs and consulting services for work on
the CMC elements of the Company's IND; re-allocation of costs for
manufacturing supplies and compensation following the cessation of
SkinTE sales from products cost of goods, general and
administrative expenses, and sales and marketing expenses to
research and development costs; and, the costs in pre-IND clinical
trials that the Company concluded during the period.
As noted above, the Company effectuated a substantial reduction
in force for its commercial operations in May 2020 and in May 2021. Consequently,
there were significant reductions in cash compensation, stock
compensation, consulting fees, and travel expense. As the
Company pared down its staff and sales activity, the Company also
reduced expenses related to a larger operation by terminating its
lease for the Utah corporate
office in September 2020 and ceasing
operations at its satellite manufacturing facility in Georgia in the fourth quarter of 2020.
Furthermore, with the cessation of SkinTE sales the Company
re-allocated manufacturing supplies and compensation from general
and administrative expenses to research and development
costs. The cost cutting measures and re-allocation of costs
described above are the primary causes of a 32% decrease in general
and administrative expense period over period for the nine months
ended September 30, 2021, compared to
the nine months ended September 30,
2020.
When the Company reduced its commercial sales team and related
commercial activities beginning in May
2020 and May 2021, the Company
also took steps to reduce staff and consultants in sales and
marketing. With the cessation of SkinTE sales several
employees who supported sales and marketing moved into new roles in
research and development, so their compensation was allocated to
research and development. Consequently, there were
significant reductions in cash compensation, stock compensation,
consulting fees, and travel expense, which resulted in a 63%
decrease in sales and marketing expense for the three months ended
September 30, 2021, compared to the
three months ended September 30,
2020.
The Company realized restructuring and other charges as a result
of the transition to a clinical stage company, much of which was
recognized in the nine-month period ended September 30, 2020. The reduction in force
in March 2020 resulted in a severance
charge of $0.5 million, and the
subsequent reduction in May 2020
resulted in a charge of $0.6
million. In the second quarter of 2020 the Company
also decided to abandon equipment in addition to the development of
a vivarium research facility at the Company's Salt Lake City location resulting in a charge
of $1.5 million. By contrast,
during the nine month-period ended September
30, 2021, the Company recognized a loss on impairment of
property and equipment in the amount of $0.4
million and severance charges of $0.6
million, which were offset by a $0.3
million gain on the termination of the Company's
Augusta, GA satellite
manufacturing facility lease. Consequently, there was a 73%
decrease in restructuring and other charges for the nine months
ended September 30, 2021, compared to
the nine months ended September 30,
2020.
Operating Loss and Net Loss. Operating loss decreased
$13.1 million, or 35%, for the nine
months ended September 30, 2021,
compared to the nine months ended September
30, 2020. Net loss decreased $11.2 million, or 34%, for the nine months ended
September 30, 2021, compared to the
nine months ended September 30,
2020.
Warrants issued in connection with financings the Company
completed in January 2021 are
classified as liabilities and remeasured each period until settled
or until classified as equity. As a result of the periodic
remeasurement the Company recorded a gain for change in fair value
of common stock warrant liability of $4.1
million for the nine months ended September 30, 2021, compared to a gain of
$4.4 million for the nine months
ended September 30, 2020.
When the PPP Loan was forgiven in June
2021, the Company recognized a gain on extinguishment of
debt in the amount of $3.6
million. For the nine months ended September 30, 2021, this gain was offset by a day
one loss on warrants issued in January
2021 of $5.2 million, which
together with the change in fair value of common stock warrant
liability, primarily accounts for the difference of $2.6 million between the Company's operating loss
and net loss for the nine months ended September 30, 2021.
Non-GAAP Financial Measure
The table below shows adjusted net loss, which is a non-GAAP
measure that shows net loss before fair value adjustments relating
to the Company's common stock warrant liability and warrant
inducement loss. The Company believes this measure is useful
to investors because it eliminates the effect of non-operating
items that can significantly fluctuate from period to period due to
fair value remeasurements. For purposes of calculating
non-GAAP per share metrics, the same denominator is used as that
which was used in calculating net loss per share under GAAP.
Adjusted Net Loss
Attributable to Common Stockholders
|
(in thousands -
unaudited non-GAAP measure)
|
|
|
|
For the Three
Months Ended
September
30,
|
|
|
For the Nine
Months Ended
September
30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
GAAP Net
Loss
|
|
$
|
(1,021)
|
|
|
$
|
(7,081)
|
|
|
$
|
(21,619)
|
|
|
$
|
(32,798)
|
|
Change in fair value
of common stock warrant liability
|
|
|
(6,354)
|
|
|
|
(1,503)
|
|
|
|
(4,134)
|
|
|
|
(4,444)
|
|
Inducement loss on
sale of liability classified warrants
|
|
|
–
|
|
|
|
–
|
|
|
|
5,197
|
|
|
|
–
|
|
Non-GAAP adjusted net
loss attributable to common stockholders - basic
|
|
$
|
(7,375)
|
|
|
$
|
(8,584)
|
|
|
$
|
(20,556)
|
|
|
$
|
(37,242)
|
|
Gain from change in
fair value of warrant liabilities
|
|
|
(174)
|
|
|
|
–
|
|
|
|
(27)
|
|
|
|
–
|
|
Non-GAAP adjusted net
loss attributable to common stockholders - diluted
|
|
$
|
(7,549)
|
|
|
$
|
(8,584)
|
|
|
$
|
(20,583)
|
|
|
$
|
(37,242)
|
|
GAAP net loss per
share attributable to common stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.01)
|
|
|
$
|
(0.18)
|
|
|
$
|
(0.27)
|
|
|
$
|
(0.89)
|
|
Diluted
|
|
$
|
(0.01)
|
|
|
$
|
(0.18)
|
|
|
$
|
(0.27)
|
|
|
$
|
(0.89)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net
loss per share attributable to common stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.09)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.26)
|
|
|
$
|
(1.01)
|
|
Diluted
|
|
$
|
(0.09)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.26)
|
|
|
$
|
(1.01)
|
|
Cash and Liquidity as of September 30,
2021
As of September 30, 2021, the
Company had $27.4 million in cash and
cash equivalents and working capital of approximately $24.9 million. The Company believes the
cash and cash equivalents on its balance sheet will fund its
business activities into the fourth quarter of 2022. In the
third quarter of 2021 cash used in operating activities was
$4.6 million, or an average of
$1.5 million per month, compared to
$6.8 million cash used in operating
activities, or an average of $2.3
million per month, in the third quarter of 2020.
Conference Call and Webcast Details
The conference call can be accessed by calling 1-800-581-5838
(U.S. and Canada) or +44 (0)330
336 9104 (International) with confirmation code 612545 and
referencing "PolarityTE Third Quarter 2021 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.
PolarityTE's products, including SkinTE, are in the development
stage, and are not approved or available for clinical use. 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, future clinical studies,
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 Reports 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.
POLARITYTE, the POLARITYTE logo, SKINTE, WHERE SELF REGENERATES
SELF and WELCOME TO THE SHIFT are registered trademarks of
PolarityTE, Inc.
CONTACTS
Investors:
PolarityTE Investor Relations
ir@PolarityTE.com
385-831-5284
POLARITYTE, INC.
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited, in
thousands, except share and per share amounts)
|
|
|
|
September
30, 2021
|
|
|
December 31,
2020
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
27,351
|
|
|
$
|
25,522
|
|
Accounts receivable,
net
|
|
|
1,186
|
|
|
|
3,819
|
|
Inventory
|
|
|
–
|
|
|
|
883
|
|
Prepaid expenses and
other current assets
|
|
|
2,384
|
|
|
|
992
|
|
Total current
assets
|
|
|
30,921
|
|
|
|
31,216
|
|
Property and
equipment, net
|
|
|
8,025
|
|
|
|
10,550
|
|
Operating lease
right-of-use assets
|
|
|
1,411
|
|
|
|
2,452
|
|
Intangible assets,
net
|
|
|
400
|
|
|
|
542
|
|
Goodwill
|
|
|
278
|
|
|
|
278
|
|
Other
assets
|
|
|
225
|
|
|
|
472
|
|
TOTAL
ASSETS
|
|
$
|
41,260
|
|
|
$
|
45,510
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$
|
3,685
|
|
|
$
|
4,148
|
|
Other current
liabilities
|
|
|
2,053
|
|
|
|
2,106
|
|
Current portion of
long-term notes payable
|
|
|
–
|
|
|
|
2,059
|
|
Deferred
revenue
|
|
|
255
|
|
|
|
168
|
|
Total current
liabilities
|
|
|
5,993
|
|
|
|
8,481
|
|
Common stock warrant
liability
|
|
|
7,705
|
|
|
|
5,975
|
|
Operating lease
liabilities
|
|
|
226
|
|
|
|
1,476
|
|
Other long-term
liabilities
|
|
|
435
|
|
|
|
723
|
|
Long-term notes
payable
|
|
|
–
|
|
|
|
1,517
|
|
Total
liabilities
|
|
|
14,359
|
|
|
|
18,172
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies (Note 14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Preferred stock -
25,000,000 shares authorized, 0 shares issued and outstanding at
September 30, 2021 and December 31, 2020
|
|
|
–
|
|
|
|
–
|
|
Common stock – $.001
par value; 250,000,000 shares authorized; 81,563,295 and 54,857,099
shares issued and outstanding at September 30, 2021 and December
31, 2020, respectively
|
|
|
82
|
|
|
|
55
|
|
Additional paid-in
capital
|
|
|
526,649
|
|
|
|
505,494
|
|
Accumulated
deficit
|
|
|
(499,830)
|
|
|
|
(478,211)
|
|
Total stockholders'
equity
|
|
|
26,901
|
|
|
|
27,338
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$
|
41,260
|
|
|
$
|
45,510
|
|
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,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Net
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
|
$
|
–
|
|
|
$
|
1,156
|
|
|
$
|
2,924
|
|
|
$
|
2,528
|
|
Services
|
|
|
1,116
|
|
|
|
2,181
|
|
|
|
5,438
|
|
|
|
4,008
|
|
Total net
revenues
|
|
|
1,116
|
|
|
|
3,337
|
|
|
|
8,362
|
|
|
|
6,536
|
|
Cost of
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
|
|
–
|
|
|
|
210
|
|
|
|
448
|
|
|
|
825
|
|
Services
|
|
|
634
|
|
|
|
1,142
|
|
|
|
3,275
|
|
|
|
1,925
|
|
Total cost of
sales
|
|
|
634
|
|
|
|
1,352
|
|
|
|
3,723
|
|
|
|
2,750
|
|
Gross
profit
|
|
|
482
|
|
|
|
1,985
|
|
|
|
4,639
|
|
|
|
3,786
|
|
Operating costs
and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
3,870
|
|
|
|
2,698
|
|
|
|
10,491
|
|
|
|
9,235
|
|
General and
administrative
|
|
|
3,687
|
|
|
|
6,264
|
|
|
|
14,999
|
|
|
|
22,080
|
|
Sales and
marketing
|
|
|
93
|
|
|
|
1,606
|
|
|
|
2,718
|
|
|
|
7,324
|
|
Restructuring and
other charges
|
|
|
242
|
|
|
|
–
|
|
|
|
678
|
|
|
|
2,536
|
|
Total operating costs
and expenses
|
|
|
7,892
|
|
|
|
10,568
|
|
|
|
28,886
|
|
|
|
41,175
|
|
Operating
loss
|
|
|
(7,410)
|
|
|
|
(8,583)
|
|
|
|
(24,247)
|
|
|
|
(37,389)
|
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
extinguishment of debt
|
|
|
–
|
|
|
|
–
|
|
|
|
3,612
|
|
|
|
–
|
|
Change in fair value
of common stock warrant liability
|
|
|
6,354
|
|
|
|
1,503
|
|
|
|
4,134
|
|
|
|
4,444
|
|
Inducement loss on
sale of liability classified warrants
|
|
|
–
|
|
|
|
–
|
|
|
|
(5,197)
|
|
|
|
–
|
|
Interest expense,
net
|
|
|
(29)
|
|
|
|
(58)
|
|
|
|
(106)
|
|
|
|
(135)
|
|
Other income,
net
|
|
|
64
|
|
|
|
57
|
|
|
|
185
|
|
|
|
282
|
|
Net
loss
|
|
$
|
(1,021)
|
|
|
$
|
(7,081)
|
|
|
$
|
(21,619)
|
|
|
$
|
(32,798)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to common stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.01)
|
|
|
$
|
(0.18)
|
|
|
$
|
(0.27)
|
|
|
$
|
(0.89)
|
|
Diluted
|
|
$
|
(0.01)
|
|
|
$
|
(0.18)
|
|
|
$
|
(0.27)
|
|
|
$
|
(0.89)
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
81,284,678
|
|
|
|
38,761,141
|
|
|
|
79,367,407
|
|
|
|
36,743,864
|
|
Diluted
|
|
|
81,754,705
|
|
|
|
38,761,141
|
|
|
|
79,419,667
|
|
|
|
36,743,864
|
|
POLARITYTE, INC.
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited, in
thousands)
|
|
|
|
For the Nine
Months Ended September 30,
|
|
|
|
2021
|
|
2020
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(21,619)
|
|
|
$
|
(32,798)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
|
4,389
|
|
|
|
5,963
|
|
Depreciation and
amortization
|
|
|
2,083
|
|
|
|
2,337
|
|
Amortization of
intangible assets
|
|
|
142
|
|
|
|
142
|
|
Amortization of debt
discount
|
|
|
–
|
|
|
|
17
|
|
Bad debt
expense
|
|
|
99
|
|
|
|
–
|
|
Inventory
write-off
|
|
|
747
|
|
|
|
–
|
|
Gain on
extinguishment of debt – PPP loan
|
|
|
(3,612)
|
|
|
|
–
|
|
Change in fair value
of common stock warrant liability
|
|
|
(4,134)
|
|
|
|
(4,444)
|
|
Inducement loss on
sale of liability classified warrants
|
|
|
5,197
|
|
|
|
–
|
|
Loss on restructuring
and other charges
|
|
|
321
|
|
|
|
–
|
|
Loss on abandonment
and disposal of property and equipment
|
|
|
–
|
|
|
|
1,566
|
|
Loss on sale of
property and equipment
|
|
|
7
|
|
|
|
–
|
|
Other non-cash
adjustments
|
|
|
–
|
|
|
|
(21)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
2,534
|
|
|
|
(1,648)
|
|
Inventory
|
|
|
136
|
|
|
|
(655)
|
|
Prepaid expenses and
other current assets
|
|
|
(1,392)
|
|
|
|
(332)
|
|
Operating lease
right-of-use assets
|
|
|
1,011
|
|
|
|
1,348
|
|
Other
assets
|
|
|
247
|
|
|
|
130
|
|
Accounts payable and
accrued expenses
|
|
|
(456)
|
|
|
|
(2,349)
|
|
Other current
liabilities
|
|
|
(29)
|
|
|
|
–
|
|
Deferred
revenue
|
|
|
87
|
|
|
|
(73)
|
|
Operating lease
liabilities
|
|
|
(1,082)
|
|
|
|
(1,353)
|
|
Net cash used in
operating activities
|
|
|
(15,324)
|
|
|
|
(32,170)
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
(18)
|
|
|
|
(1,225)
|
|
Proceeds from sale of
property and equipment
|
|
|
23
|
|
|
|
–
|
|
Purchase of
available-for-sale securities
|
|
|
–
|
|
|
|
(14,144)
|
|
Proceeds from
maturities of available-for-sale securities
|
|
|
–
|
|
|
|
16,945
|
|
Proceeds from sale of
available-for-sale securities
|
|
|
–
|
|
|
|
16,171
|
|
Net cash provided by
investing activities
|
|
|
5
|
|
|
|
17,747
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from term
note payable and financing arrangements
|
|
|
1,028
|
|
|
|
4,630
|
|
Principal payments on
term note payable and financing arrangements
|
|
|
(708)
|
|
|
|
(1,096)
|
|
Principal payments on
financing leases
|
|
|
(413)
|
|
|
|
(376)
|
|
Net proceeds from the
sale of common stock, warrants and pre-funded warrants
|
|
|
9,884
|
|
|
|
24,276
|
|
Proceeds from the
sale of new warrants
|
|
|
1,002
|
|
|
|
–
|
|
Proceeds from
warrants exercised
|
|
|
6,671
|
|
|
|
–
|
|
Proceeds from
pre-funded warrants exercised
|
|
|
8
|
|
|
|
–
|
|
Cash paid for tax
withholdings related to net share settlement
|
|
|
(355)
|
|
|
|
(114)
|
|
Proceeds from stock
options exercised
|
|
|
3
|
|
|
|
31
|
|
Proceeds from ESPP
purchase
|
|
|
28
|
|
|
|
40
|
|
Net cash provided by
financing activities
|
|
|
17,148
|
|
|
|
27,391
|
|
Net increase in cash
and cash equivalents
|
|
|
1,829
|
|
|
|
12,968
|
|
Cash and cash
equivalents - beginning of period
|
|
|
25,522
|
|
|
|
10,218
|
|
Cash and cash
equivalents - end of period
|
|
$
|
27,351
|
|
|
$
|
23,186
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
|
96
|
|
|
$
|
139
|
|
|
|
|
|
|
|
|
|
|
Supplemental
schedule of non-cash investing and financing
activities:
|
|
|
|
|
|
|
|
|
Fair value of
placement agent warrants issued in connection with
offering
|
|
$
|
838
|
|
|
$
|
–
|
|
Reclassification of
warrant liability to stockholders' equity upon exercise of
warrant
|
|
$
|
8,964
|
|
|
$
|
–
|
|
Unpaid tax liability
related to net share settlement
|
|
$
|
–
|
|
|
$
|
5
|
|
Unpaid liability for
acquisition of property and equipment
|
|
$
|
–
|
|
|
$
|
10
|
|
Accrued offering
costs
|
|
$
|
400
|
|
|
$
|
–
|
|
Allocation of
proceeds to warrant liability
|
|
$
|
8,629
|
|
|
$
|
11,677
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE PolarityTE, Inc.