Exhibit 99.1

 

 

CollPlant Reports Third Quarter 2018 Financial Results and

Provides Business Update

 

Ness Ziona, November 29, 2018, CollPlant (NASDAQ:CLGN), a regenerative medicine company utilizing its proprietary plant-based rhCollagen technology for tissue repair products (recombinant human, “rhCollagen”), today announced financial results for the third quarter ended September 30, 2018 and provided an update on the Company’s business developments. Certain metrics, including those expressed on an adjusted basis, are non-GAAP measures. See “Use of Non-IFRS (non-GAAP) Measures” below.

 

CollPlant reported revenues of $224,000 (NIS 813,000) for the third quarter of 2018. The Company ended the third quarter of 2018 with $2.6 million (NIS 9.4 million) in cash and cash equivalents, excluding an additional $5.0 million (NIS 18.1 million) that the Company received from United Therapeutics at the beginning of November 2018. Comprehensive loss for the third quarter of 2018 was $1.3 million (NIS 4.8 million) on a GAAP basis, or adjusted comprehensive loss of $1.3 million (NIS 4.9 million), on a non-GAAP basis.

 

“Last month we entered into a license, development and commercialization agreement for 3D bioprinted lung transplants with United Therapeutics (UTHR). The agreement combines CollPlant’s rhCollagen and BioInk technology with the regenerative medicine and organ manufacturing capabilities of United Therapeutics. This strategic agreement is a major achievement for CollPlant as it aligns us with a global leader, validates our technology and creates value for our shareholders." stated Yehiel Tal, CollPlant’s Chief Executive Officer.

 

“During the third quarter we made progress advancing our other 3D bioprinting business. We are moving forward with our development activities with various companies that are using CollPlant’s rhCollagen based BioInk for the bioprinting of organs and tissues,” Mr. Tal added.

 

“In addition to the collaboration with United Therapeutics and progress we made with our BioInks, we are continuing the development of next-generation dermal fillers for the aesthetic market. Based on our work with major market players in the fields of 3D bioprinting and medical aesthetics, we believe that CollPlant’s rhCollagen is the ideal building block for regenerative medicine scaffolds available today, and will play a critical role in those markets” concluded Mr. Tal.

 

Third Quarter 2018 Financial Results on IFRS basis (“GAAP”)

 

Revenues for the three months ended September 30, 2018 increased 209% to $224,000 (NIS 813,000), compared to $73,000 (NIS 263,000) in the third quarter of 2017. Revenues were derived from sales in the U.S. of CollPlant’s BioInk for development of 3D bioprinting of organs, as well as sales in Europe of mainly CollPlant’s soft tissue repair matrix, VergenixSTR, for treating tendinopathy.

 

The Company’s gross profit for the three months ended September 30, 2018 increased 105% to $148,000 (NIS 539,000) compared to $73,000 (NIS 263,000) in the third quarter of 2017. The increase in gross profit derives from the increase in revenues and includes recognition of $76,000 (NIS 274,000) in cost of revenue in the three months ended September 30, 2018, compared to no recognition of cost of revenue in the third quarter of 2017.

 

Total operating costs and expenses were $1.7 million (NIS 6.1 million) compared to $1.1 million (NIS 4.0 million) in the third quarter of 2017. The net increase in the amount of $600,000 is attributed primarily to an increase in salaries and share based expenses of $296,000, costs attributed to being a public company traded on the Nasdaq in the United States of $188,000, and a $70,000 decrease in a 2018 grant from the Israel Innovation Authorities.

 

Operating loss was $1.5 million (NIS 5.6 million) compared to an operating loss of $1.0 million (NIS 3.7 million) in the third quarter of 2017. Comprehensive loss for the third quarter of 2018 was $1.3 million (NIS 4.8 million), or $0.01 (NIS 0.02) per share, compared to a comprehensive loss of $1.0 million (NIS 3.9 million), or $0.01 (NIS 0.03) per share, for the third quarter of 2017. Comprehensive loss per share assumes the full exercise of previously issued pre-paid warrants.

 

 

 

 

Third Quarter 2018 Financial Results on Non-IFRS Basis (“non-GAAP”)

 

On a non-GAAP basis, the operating costs and expenses for the third quarter of 2018 were $1.5 million (NIS 5.3 million), compared to $1.0 (NIS 3.5 million) for the third quarter of 2017. The comprehensive loss on a non-GAAP basis for the third quarter of 2018 was $1.3 million (NIS 4.9 million), or $0.01 (NIS 0.02) per share, compared to $1.0 million (NIS 3.5 million), or $0.01 (NIS 0.03) per share, for the third quarter of 2017. Non-GAAP measures exclude certain non-cash expenses. The table at the end of this press release titled “Reconciliation of GAAP to Non-GAAP Financial Measures” includes a reconciliation of the Company’s GAAP results to non-GAAP results. The net reconciliation reflects non-cash income in the amount of $7,000 (NIS 27,000) in the third quarter of 2018, with respect to (i) fair market value attributed to services received through a securities purchase agreement with an investor (the “Share Purchase Agreement”), (ii) change in fair value of financial instruments and (iii) share-based compensation to employees, directors and consultants.

 

Use of Non-IFRS (“non-GAAP”) Measures

 

This press release contains certain non-GAAP financial measures for operating costs and expenses, operating loss, comprehensive loss and basic and diluted comprehensive loss per share that exclude the effects of non-cash expense for fair market value attributed to services received through the Share Purchase Agreement, recognition and amortization of unrecognized day one loss, and share-based compensation to employees, directors and consultants. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s performance that enhances management’s and investors’ ability to evaluate the Company’s operating costs, comprehensive loss and loss per share, and to compare them to historical Company results.

 

The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when operating and evaluating the Company’s business internally and therefore decided to make these non-GAAP adjustments available to investors. The non-GAAP financial measures used by the Company in this press release may be different from the measures used by other companies.

 

For more information on the non-GAAP financial measures, please see the “Reconciliation of GAAP to Non-GAAP Financial Measures” table on page _ in this press release. This accompanying table on page _ has more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.

 

For the convenience of the reader, the amounts have been translated from NIS into U.S. dollars, at the representative rate of exchange as of September 30, 2018 (U.S. $1.00 = NIS 3.627).

 

The Company’s consolidated financial results for the nine months ended September 30, 2018 are presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

 

About CollPlant

 

CollPlant is a regenerative medicine company focused on 3D bioprinting of tissues and organs, and on developing and commercializing tissue repair products for orthobiologics, and advanced wound care markets. Our products are based on our rhCollagen (recombinant human collagen) that is produced with CollPlant’s proprietary plant based genetic engineering technology.

 

Our products address indications for diverse fields of organ and tissue repair, and are ushering in a new era in regenerative medicine. Our flagship rhCollagen BioInk product line is ideal for 3D bioprinting of tissues and organs, and our unique Vergenix line of rhCollagen products includes a soft tissue repair matrix for treating tendinopathy and a wound repair matrix to promote a rapid optimal healing of acute and chronic wounds.

 

For more information about CollPlant, visit http://www.collplant.com

 

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Safe Harbor Statements

 

This press release may include forward-looking statements. Forward-looking statements may include, but are not limited to, statements relating to CollPlant’s objectives plans and strategies, as well as statements, other than historical facts, that address activities, events or developments that CollPlant intends, expects, projects, believes or anticipates will or may occur in the future. These statements are often characterized by terminology such as “believes,” “hopes,” “may,” “anticipates,” “should,” “intends,” “plans,” “will,” “expects,” “estimates,” “projects,” “positioned,” “strategy” and similar expressions and are based on assumptions and assessments made in light of management’s experience and perception of historical trends, current conditions, expected future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Many factors could cause CollPlant’s actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to, the following: the Company’s history of significant losses and its need to raise additional capital and its inability to obtain additional capital on acceptable terms, or at all; the Company’s expectations regarding the timing and cost of commencing clinical trials with respect to tissues and organs which are based on its rhCollagen based BioInk, VergenixSTR, and VergenixFG; the Company’s ability to obtain favorable pre-clinical and clinical trial results; regulatory action with respect to rhCollagen based BioInk, VergenixSTR, and VergenixFG including but not limited to acceptance of an application for marketing authorization, review and approval of such application, and, if approved, the scope of the approved indication and labeling; commercial success and market acceptance of the Company’s rhCollagen based BioInk, VergenixSTR, and VergenixFG; the Company’s ability to establish sales and marketing capabilities or enter into agreements with third parties and its reliance on third party distributors and resellers; the Company’s ability to establish and maintain strategic partnerships and other corporate collaborations; the Company’s reliance on third parties to conduct some or all aspects of its product manufacturing; the scope of protection we are able to establish and maintain for intellectual property rights and the Company’s ability to operate its business without infringing the intellectual property rights of others; the overall global economic environment; the impact of competition and new technologies; general market, political, and economic conditions in the countries in which the Company operates; projected capital expenditures and liquidity; changes in the Company’s strategy; and litigation and regulatory proceedings. More detailed information about the risks and uncertainties affecting CollPlant is contained under the heading “Risk Factors” included in CollPlant’s most recent annual report on Form 20-F filed with the SEC, and in other filings that CollPlant has made and may make with the SEC in the future. The forward-looking statements contained in this press release are made as of the date of this press release and reflect CollPlant’s current views with respect to future events, and CollPlant does not undertake and specifically disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

  

Contact at CollPlant:
 
Eran Rotem
Chief Financial Officer
Tel: + 972-73-2325600/612
Email: Eran@collplant.com

 

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COLLPLANT HOLDINGS LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(UNAUDITED)

 

  

Convenience translation

into USD

     
   September 30   September 30   December 31 
   2018   2018   2017 
  

USD

in thousands

  

NIS

in thousands

 
     
Assets            
Current assets:            
Cash and cash equivalents   2,603    9,442    17,817 
Accounts receivables:               
Trade receivables   268    971    354 
Other   518    1,881    3,543 
Inventory   813    2,948    700 
    4,202    15,242    22,414 
Non-current assets:               
Restricted deposit   145    526    503 
Long-term receivables   17    63    92 
Property and equipment, net   1,465    5,314    3,582 
Intangible assets, net   363    1,318    1,454 
    1,990    7,221    5,631 
TOTAL ASSETS   6,192    22,463    28,045 
                
Liabilities and equity               
Current liabilities -               
Accounts payable:               
Loan   22    84    - 
Trade payables   475    1,723    2,922 
Accrued liabilities and other   580    2,104    1,996 
    1,077    3,911    4,918 
Non-current liabilities               
Debentures at fair value   -    -    12,639 
Warrants at fair value   1,057    3,832    - 
Derivatives   15    54    141 
Royalties to the Israel Innovation Authority   307    1,114    1,203 
Loan   29    105    - 
Long-term payables   -    -    61 
    1,408    5,105    14,044 
Total liabilities   2,485    9,016    18,962 
                
Equity:               
Ordinary shares   1,574    5,710    4,998 
Additional paid in capital and warrants   50,837    184,386    178,467 
Prepaid warrant   3,435    12,460    - 
Accumulated deficit   (52,139)   (189,109)   (174,382)
TOTAL EQUITY   3,707    13,447    9,083 
TOTAL LIABILITIES AND EQUITY   6,192    22,463    28,045 

 

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COLLPLANT HOLDINGS LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

 

    Convenience
translation into USD
                   
    

Nine months

ended

September 30

    

Three months

ended

September 30

    Nine months ended September 30    Three months ended September 30 
    2018    2018    2017    2018    2017    2018 
    USD in thousands    NIS in thousands 
                               
Revenue   619    224    716    2,245    263    813 
Cost of Revenue   165    76    -    598    -    274 
Gross Profit   454    148    716    1,647    263    539 
                               
Operating costs and expenses:                              
Research and development expenses, net:   2,816    941    11,087    10,215    2,747    3,413 
General, administrative and marketing expenses   2,550    748    4,190    9,251    1,260    2,712 
Total operating costs and expenses:   5,366    1,689    15,277    19,466    4,007    6,125 
Operating loss   4,912    1,541    14,561    17,819    3,744    5,586 
Financial income   115    204    -    418    -    - 
Other financial expenses (income)   73    -    407    264    187    (739)
Financial (income) expenses, net   (42)   (204)   407    (154)   187    (739)
Comprehensive loss   4,870    1,337    14,968    17,665    3,931    4,847 
Basic and diluted loss per ordinary share (NIS/USD)   0.02    0.01    0.12    0.08    0.03    0.02 
Weighted average ordinary shares outstanding   214,551,093    229,649,737    129,182,765    214,551,093    138,336,328    229,649,737 

 

5

 

 

COLLPLANT HOLDINGS LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

  

Convenience translation

into USD

     
   Nine months ended September 30 
   2018   2017   2018 
  

USD

in thousands

  

NIS

in thousands

 
     
Cash flows used in operating activities:               
Comprehensive loss for the period   (4,870)   (14,968)   (17,665)
Adjustments for:               
Depreciation and amortization   283    842    1,027 
Share-based compensation to employees and consultants   810    1,508    2,938 
Changes in fair market value of services received through the Alpha Agreement   422    -    1,530 
Changes in fair value of financial instruments   55    -    198 
Exchange differences on cash and cash equivalents   (87)   49    (317)
Exchange differences on restricted cash   (6)   45    (23)
    (3,393)   (12,524)   (12,312)
Changes in operating asset and liability items:               
Decrease (increase) in trade receivables   (170)   12    (617)
Increase in inventory   (620)   (63)   (2,248)
Decrease in other receivables (including long- term receivables)   43    2,255    161 
Decrease in trade payables (including long-term payables)   (295)   (2,911)   (1,071)
Decrease in accrued liabilities and other payables   30    360    108 
Increase (decrease) in royalties to the IIA   (25)   117    (89)
    (1,037)   (230)   (3,756)
Net cash used in operating activities   (4,430)   (12,754)   (16,068)
Cash flows from investing activities:               
Purchase of property and equipment   (723)   (56)   (2,623)
Net cash used in investing activities   (723)   (56)   (2,623)
Cash flows from financing activities:               
Proceeds from issue of shares and warrants, net of issue expenses   2,757    13,846    9,999 
Exercise of warrants into shares   -    3,618    - 
Loan received   58    -    210 
Loan returned   (6)   -    (21)
Equipment purchased in unusual credit terms   (52)   (190)   (189)
Net cash provided by financing activities   2,757    17,274    9,999 
Increase (Decrease) in cash and cash equivalents   (2,396)   4,464    (8,692)
Cash and cash equivalents at the beginning of the period   4,912    3,797    17,817 
Exchange differences on cash and cash equivalents   87    (49)   317 
Cash and cash equivalents at the end of the period    2,603    8,212    9,442 
Non-cash investing activities:               

Conversion of Debentures to pre-paid warrant

   3,504    -    12,708 
Conversion of pre-paid warrant to shares   68    -    248 

 

6

 

 

CollPlant Holdings Ltd.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

 

    Convenience
translation into USD
                   
    

Nine months

ended

September 30

    

Three months

ended

September 30

    Nine months ended September 30    Three months ended September 30 
    2018    2018    2017    2018    2017    2018 
    USD in thousands    NIS in thousands 
           
GAAP gross profit   454    148    716    1,647    263    539 
                               
GAAP operating costs and expenses:   5,366    1,689    15,277    19,466    4,007    6,125 
Fair market value attributed to services received through the Alpha Agreement    422    -    -    1,530    -    - 
Share-based compensation to employees, directors and consultants   810    220    1,508    2,938    452    797 
Non-GAAP operating costs and expenses:   4,134    1,469    13,769    14,998    3,555    5,328 
GAAP operating loss   4,912    1,541    14,561    17, 819    3,744    5,586 
Non-GAAP operating loss   3,680    1,321    13,053    13,351    3,292    4,789 
GAAP Comprehensive loss   4,870    1,337    14,968    17,665    3,931    4,847 
Fair market value attributed to services received through the Alpha Agreement   422    -    -    1,530    -    - 
Changes in fair value of financial instruments   54    (227)   -    198    -    (824)
Share-based compensation to employees, directors and consultants   810    220    1,508    2,938    452    797 
Non-GAAP Comprehensive loss   3,584    1,344    13,460    12,999    3,479    4,874 
GAAP Basic and diluted loss per ordinary share (NIS/USD)   0.02    0.01    0.12    0.08    0.03    0.02 
Non-GAAP Basic and diluted loss per ordinary share (NIS/USD)   0.02    0.01    0.10    0.06    0.03    0.02 

 

 

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