CollPlant Reports Second Quarter 2018 Financial Results and Provides Business Update

NESS ZIONA, Israel, Sept. 21, 2018 /PRNewswire/ -- CollPlant (NASDAQ: CLGN) (TASE: 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 second quarter ended June 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 $170,000 (NIS 653,000) for the second quarter of 2018. The Company ended the second quarter of 2018 with $2.6 million (NIS 9.4 million) in cash and cash equivalents, and received an additional $1.25 million in July through a private placement, while comprehensive loss for the second quarter of 2018 was $1.5 million (NIS 5.6 million) on a GAAP basis, or adjusted comprehensive loss of $1.2 million (NIS 4.5 million), on a non-GAAP basis.

"We are very pleased to report that during the second quarter of 2018, we have successfully produced high yield batches of rhCollagen, as well as scaled-up the BioInk production in our new cGMP production facility. This constitutes an important milestone in our plan to become a market leader in the field of regenerative medicine, and as a leading supplier of BioInks for 3D bioprinting of tissues and organs. The production facility bolsters our competitiveness by yielding higher margins on our products and by serving as a process development center where we continue to develop our groundbreaking BioInk formulations," stated Yehiel Tal, CollPlant's Chief Executive Officer.

"During the second quarter, CollPlant received grant approval from the Israel Innovation Authority (IIA) supporting the continued development of BioInk formulations. Additionally, we recently received funding from investors, when in May, we completed the third investment round from an investor of $1 million, and, in July, we raised another $1.25 million through a private placement with another investor, bringing the total amount raised in the last year to $9.2 million," Mr. Tal added.

"In addition to the progress we made with our BioInks, we are continuing the development of next-generation dermal fillers for the aesthetic medicine market. Based on our work with major market players in the fields of 3D bioprinting of tissues and organs, and medical aesthetics, we believe that CollPlant's rhCollagen is the ideal building block for regenerative medicine scaffolds," concluded Mr. Tal.

Second Quarter 2018 Financial Results on IFRS basis ("GAAP")

Revenues for the three months ended June 30, 2018 increased 209% to $170,000 (NIS 653,000), compared to $55,000 (NIS 201,000) in the second 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 June 30, 2018 increased 91% to $105,000 (NIS 415,000) compared to $55,000 (NIS 201,000) in the second quarter of 2017.

Total operating costs and expenses were $1.4 million (NIS 5.4 million) compared to $1.6 million (NIS 5.9 million) in the second quarter of 2017. The net decrease in the amount of $200,000 is attributed to a 2018 grant from the Israel Innovation Authorities, supporting the Company's development program of rhCollagen based BioInk, for 3D bioprinting of tissues and organs.

Operating loss was $1.3 million (NIS 5.0 million) compared to an operating loss of $1.6 million (NIS 5.7 million) in the second quarter of 2017. Comprehensive loss for the second quarter of 2018 was $1.5 million (NIS 5.6 million), or $0.01 (NIS 0.03) per share, compared to a comprehensive loss of $1.6 million (NIS 5.8 million), or $0.01 (NIS 0.04) per share, for the second quarter of 2017.

Second Quarter 2018 Financial Results on Non-IFRS Basis ("non-GAAP")

On a non-GAAP basis, the operating costs and expenses for the second quarter of 2018 were $1.2 million (NIS 4.4 million), compared to $1.5 (NIS 5.4 million) for the second quarter of 2017. The comprehensive loss for the second quarter of 2018 was $1.2 million (NIS 4.5 million), or $0.01 (NIS 0.03) per share, compared to $1.5 million (NIS 5.4 million), or $0.01 (NIS 0.04) per share, for the second 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 reconciliation reflects non-cash expenses in the amount of $273,000 (NIS 1.1 million) in the second quarter of 2018, with respect to fair market value attributed to services received through a securities purchase agreement with an investor (the "Share Purchase Agreement"), recognition of unrecognized day one loss and 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 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 8 in this press release. This accompanying table on page 8 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 June 30, 2018 (U.S. $1.00 = NIS 3.650).

The Company's consolidated financial results for the six months ended June 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

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.

                                                                                                             
            
              COLLPLANT HOLDINGS LTD.
                                                                                                   CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
                                                                                                                             (UNAUDITED)




                                                                  
           
              Convenience
                                                                        translation into
                                                                               USD



                                                      Six months ended                                            Three months
                                                                                                                      ended                                      
          
          Six months ended                 
     
           Three months ended
                                                 June 30                                                   June 30                                                        June 30                                  
           June 30



                                                                  2018                                                     2018                                    2017                                2018          2017                    2018



                                                               
           
              USD in thousands                                                                         
            
              NIS in thousands




          Revenue                                                                392                                                                   170                                            453                      1,432                     201         653



          Cost of Revenue                                                         89                                                                    65                                                                      324                                238




          
              Gross Profit                                                303                                                                   105                                            453                      1,108                     201         415






          
              Operating costs and
      expenses:



          Research and development                                             1,863                                                                   591                                          8,340                      6,802                   4,298       2,335
      expenses, net:



          General, administrative and                                          1,792                                                                   812                                          2,930                      6,539                   1,589       3,094
      marketing expenses




          
              Total operating costs and                                 3,655                                                                 1,403                                         11,270                     13,341                   5,887       5,429
      expenses:




          
              Operating loss                                            3,352                                                                 1,298                                         10,817                     12,233                   5,686       5,014




          
              Financial income                                          (128)                                                                 (18)                                                                   (469)                              (82)



          
              Financial expenses                                          289                                                                   173                                            220                      1,054                     159         646




          
              Financial expenses, net                                     161                                                                   155                                            220                        585                     159         564




          
              Comprehensive loss                                        3,513                                                                 1,453                                         11,037                     12,818                   5,845       5,578




          
              Basic and diluted loss per                                 0.02                                                                  0.01                                           0.09                       0.06                    0.04        0.03
      ordinary share (NIS/USD)




          
              Weighted average ordinary                           206,884,141                                                           217,428,969                                    124,504,278                206,884,141             130,598,626 217,428,969
      shares outstanding


                                                                      
              
                COLLPLANT HOLDINGS LTD.
                                                              CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
                                                                                        (UNAUDITED)




                                                          Convenience
                                                           translation
                                                             into USD


                                                             June 30                                                      June 30                           December 31


                                                                  2018                                                        2018                                   2017



                                                             USD in                                                             NIS in thousands
                                                thousands




     
                Assets


                   Current assets:


      Cash and cash equivalents                                               2,565                                                                   9,363                    17,817


      Accounts receivables:



     Trade receivables                                                         423                                                                   1,544                       354



     Other                                                                     587                                                                   2,144                     3,543



     Inventory                                                                 642                                                                   2,345                       700



                                                                              4,217                                                                  15,396                    22,414



                   Non-current assets:



     Restricted deposit                                                        145                                                                     530                       503


      Long-term receivables                                                      43                                                                     157                        92


      Property and equipment, net                                             1,480                                                                   5,402                     3,582


      Intangible assets, net                                                    373                                                                   1,363                     1,454



                                                                              2,041                                                                   7,452                     5,631



                   TOTAL ASSETS                                               6,258                                                                  22,848                    28,045





                   Liabilities and equity


                   Current liabilities -



     Accounts payable:



     Trade payables                                                            643                                                                   2,350                     2,922


      Accrued liabilities and other                                             425                                                                   1,550                     1,996



                                                                              1,068                                                                   3,900                     4,918



                   Non-current liabilities


      Debentures at fair value                                                                                                                                               12,639


      Warrants at fair value                                                  1,267                                                                   4,625



     Derivatives                                                                23                                                                      84                       141


      Royalties to the Israel
       Innovation Authority                                                     299                                                                   1,092                     1,203



     Loan                                                                       58                                                                     210



     Long-term payables                                                                                                                                                         61



                                                                              1,647                                                                   6,011                    14,044



                   Total liabilities                                          2,715                                                                   9,911                    18,962





                   Equity:



     Ordinary shares                                                         1,405                                                                   5,128                     4,998


      Additional paid in capital and
       warrants                                                              52,839                                                                 192,868                   178,467



     Accumulated deficit                                                  (50,701)                                                              (185,059)                (174,382)



                   TOTAL EQUITY                                               3,543                                                                  12,937                     9,083



                   TOTAL LIABILITIES AND EQUITY                               6,258                                                                  22,848                    28,045


                                                                 
              
                COLLPLANT HOLDINGS LTD.

                                                             
         CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

                                                                              
              (UNAUDITED)




                                                                                       Convenience
                                                                                        translation
                                                                                          into USD





                                                                              
              
                Six months ended June 30



                                                                                               2018                            2017                  2018



                                                                                          USD in
                                                                                         thousands                                  NIS in thousands



                   Cash flows used in operating activities:



     Comprehensive loss for the period                                                                  (3,513)                     (11,037)             (12,818)



     Adjustments for:



     Depreciation and amortization                                                                          164                           601                   600


      Share-based compensation to employees and
       consultants                                                                                           588                         1,056                 2,141


      Changes in fair market value of services
       received through the Alpha Agreement                                                                  419                                              1,530


      Recognition of unrecognized day one loss                                                               119                                                433


      Exchange differences on cash and cash
       equivalents                                                                                          (16)                           75                  (59)


      Loss from changes in fair value of financial
       instruments                                                                                           161                                                589


      Exchange differences on restricted cash                                                                (7)                           50                  (27)



                                                                                                         (2,085)                      (9,255)              (7,611)



      Changes in operating asset and liability
       items:



     Increase in trade receivables                                                                        (326)                                           (1,190)



     Increase in inventory                                                                                (451)                         (63)              (1,645)


      Decrease (increase) in other receivables
       (including long-term receivables)                                                                    (54)                        2,757                 (196)


      Decrease) in trade payables (including long-
       term payables)                                                                                      (139)                      (2,998)                (507)


      Decrease (increase) in accrued liabilities
       and other payables                                                                                  (122)                          169                 (446)


      Increase (decrease) in royalties to the IIA                                                           (30)                         (26)                (111)



                                                                                                         (1,122)                        (161)              (4,095)



      Net cash used in operating activities                                                              (3,207)                      (9,416)             (11,706)



                   Cash flows from investing activities:



     Purchase of property and equipment                                                                   (638)                         (45)              (2,329)



      Net cash used in investing activities                                                                (638)                         (45)              (2,329)



                   Cash flows from financing activities:


      Proceeds from issue of shares and warrants,
       net of issue expenses                                                                               1,490                         6,788                 5,438



     Exercise of warrants into shares                                                                                                  3,618



     Loan received                                                                                           58                                                210


      Payments made for equipment on financing
       terms                                                                                                (35)                        (127)                (126)



      Net cash provided by financing activities                                                            1,513                        10,279                 5,522



                   Increase (Decrease) in cash and cash
                    equivalents                                                                          (2,332)                          818               (8,513)


                   Cash and cash equivalents at the beginning of
                    the period                                                                             4,881                         3,797                17,817


                   Exchange differences on cash and cash
                    equivalents                                                                               16                          (75)                   59



                   Cash and cash equivalents at the end of the
                    period                                                                                 2,565                         4,540                 9,363



                   Non-cash investing activities:


                   Conversion of Debentures to pre-paid warrant                                            3,482                                             12,708


                                                                                                  
     
                COLLPLANT HOLDINGS LTD.

                                                                                                                   RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
                                                                                                                      
                
                  (UNAUDITED)


                                                       Convenience
                                                   translation into USD




                                                     Six months ended June 30                       Three months ended June                                                Six months ended
                                                                                                       30                                                   June 30                             Three months ended

                                                                                                                                                                                        June 30



                                                                   2018                      2018         2017                   2018                     2017                                            2018



                                                                              USD in thousands                                                                           NIS in thousands





                  GAAP gross  profit                                303                       105          453                  1,108                      201                                             415





                  GAAP operating costs and
                   expenses:                                      3,655                     1,403       11,270                 13,341                    5,887                                           5,429


     Fair market value attributed to
      services received through the
      Alpha Agreement                                               419                      (16)                             1,530


     Share-based compensation to
      employees, directors and
      consultants                                                   588                       268        1,056                  2,141                      471                                           1,017



                  Non-GAAP operating costs and
                   expenses:                                      2,648                     1,151       10,214                  9,670                    5,416                                           4,412



                  GAAP operating loss                             3,352                     1,298       10,817                 12,233                    5,686                                           5,014


                  Non-GAAP operating loss                         2,345                     1,046        9,761                  8,562                    5,215                                           3,997



                  GAAP Comprehensive loss                         3,513                     1,453       11,037                 12,818                    5,845                                           5,578



     Fair market value attributed to
      services received through the
      Alpha Agreement                                               419                      (16)                             1,530


     Recognition of unrecognized day
      one loss                                                      119                        21                                433                                                                      89


     Share-based compensation to
      employees, directors and
      consultants                                                   588                       268        1,056                  2,141                      471                                           1,017



                  Non-GAAP Comprehensive loss                     2,387                     1,180        9,984                  8,714                    5,374                                           4,472



                  GAAP
                 Basic and
                   diluted loss per ordinary share
                   (NIS/USD)                                       0.02                      0.01         0.09                   0.06                     0.04                                            0.03



                  Non-GAAP    Basic and diluted
                   loss per ordinary share (NIS/
                   USD)                                            0.01                      0.01         0.08                   0.04                     0.04                                            0.02




Contact at CollPlant
Eran Rotem
Deputy CEO & CFO
Tel: +972-2325600/612
Email: Eran@collplant.com

View original content:http://www.prnewswire.com/news-releases/collplant-reports-second-quarter-2018-financial-results-and-provides-business-update-300717039.html

SOURCE CollPlant

   
Company Codes: NASDAQ-NMS:CLGN, OTC-BB:CQPTY, OTC-QX:CQPTY, OtherOTC:CQPTY, TelAviv:CLGN  

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