RANCHO CORDOVA, Calif.,
March 17, 2021 /PRNewswire/ --
ThermoGenesis Holdings, Inc. (Nasdaq: THMO), a market leader in
automated cell processing tools and services in the cell and gene
therapy field, today reported financial and operating results for
the year ended December 31, 2020 and
provided a corporate strategic update.
Key 2020 and Subsequent Achievements:
- On February 17, 2021, the Company
began its 35th year of operation and announced the
alignment of its future corporate strategy by offering cell
processing systems and services to meet the large-scale
manufacturing needs for the growing number of cell and gene
therapies anticipated to be developed over the next decade,
including CAR-T cell therapy.
- On February 3, 2021, the Company
completed the development process of its new PXP®-LAVARE System and
submitted a Letter to File with an updated device listing to the
U.S. Food and Drug Administration (FDA). The PXP-LAVARE is a GMP
compliant automated cell processing system that allows for fast,
automated, and reliable cell washing. It is an optional cell
reformation accessory designed for use along with the PXP®-1000
System, a 510(k) Class II medical device designed for isolating
various cellular components from blood.
- On June 29, 2020, the Company was
added to Russell Microcap® Index.
- On June 23, 2020,
Corning Incorporated's Life Sciences Division began the
commercial launch of ThermoGenesis' X-SERIES® cell processing
platform under ThermoGenesis and the Corning® dual brand as part of
the previously announced global distribution agreement.
- On March 27, 2020, the Company
closed a $3.5 million registered
direct offering of common stock.
"During 2020, we remained focused on our core business,
providing tools and services for the cell and gene therapy
markets," stated Chris Xu, Ph.D.,
Chief Executive Officer of ThermoGenesis. "We are committed to the
expansion of our brand, especially within immuno-oncology and aim
to not only continue providing improvements and new accessories for
our CAR-TXpress™ platform, but also intend to offer customers a
one-stop shop with cell-based contract development and
manufacturing (CDMO) services, as well. According to industry
sources, there are over 1,000 cell and gene therapy trials
currently under way and the industry could see numerous cell
therapy approvals in the coming years, making it more important
than ever to ensure companies can rely on the manufacturing of
high-quality, clinical-grade cell therapies at commercial scale.
With that in mind, ThermoGenesis intends to utilize its high
efficiency, semi-automated CAR-TXpress™ platform to help provide
these groundbreaking treatments to as many patients as
possible."
Dr. Xu continued, "To address the industry's ever-growing needs,
in early 2021, we were pleased to introduce the PXP-LAVARE System,
an optional cell reformation accessory for our cutting edge,
FDA-cleared PXP-1000, which is used for downstream cGMP compliant
clinical manufacturing of cell-based therapeutics, such as CAR-T
cells. Also, of note, in mid-2020, was the implementation of
our global distribution agreement with Corning Life Sciences to
distribute our X-SERIES cell processing platform. We continue to
explore opportunities to co-develop, in-license and acquire
additional innovative products and solutions which would be
synergistic with our current portfolio."
Jeff Cauble, Chief Financial
Officer of ThermoGenesis, added, "In 2020, we significantly
bolstered our balance sheet, ending the year with approximately
$7.2 million in cash. While our
revenues were impacted by the global pandemic, we expect sales
within our core business line to return to their prior levels once
the health emergency subsides."
Financial Results for the Year Ended December 31, 2020
Net revenues. Net revenues for the year ended
December 31, 2020 were $9.7 million compared to $13.0 million for the year ended December 31, 2019, a decrease of $3.3 million or 25%. The decrease was
driven by AXP® disposable sales, which declined by approximately
$1.7 million, with approximately
1,000 fewer cases sold in 2020 as compared to 2019. The primary
reason for the decrease was the COVID-19 pandemic, which had a
significant impact on the cord blood industry, with fewer cord
blood units being stored globally after the start of the pandemic.
The pandemic also caused other problems with some domestic
customers opting to utilize existing safety stock at the start of
the pandemic in lieu of placing new orders, to minimize on-site
workers. Internationally, customs delays led some customers to
temporarily switch to manual processing due to the long wait to
clear products through customs departments with reduced staffing.
AXP® device sales decreased by approximately $0.9 million in 2020 as compared to 2019 due to
one-time revenues in 2019 from customers converting to the
Company's new generation AXP® II devices. The Company also had a
decrease of approximately $0.9
million in BioArchive® sales, primarily due to two fewer
devices being sold and lower service revenue in 2020 as compared to
2019. Partially offsetting these decreases was an increase of
approximately $0.3 million in
CAR-TXpress revenue driven by $0.2
million more recognized in 2020 from the exclusivity fee
paid by the Company's X-SERIES distributor in 2019 and other
revenue which increased by approximately $0.3 million primarily due to antibody testing
kits sold in 2020.
Gross profit. Gross profit was $1.3 million, or 13% of net revenues, for the
year ended December 31, 2020 compared
to $5.7 million, or 44% of net
revenues, for the year ended December 31,
2019, a decrease of $4.4
million, or 78%. The decrease was primarily due to an
inventory disposition expense of approximately $2.8 million for the remaining inventory of
COVID-19 testing kits purchased from ImmuneCyte and a $0.5 million increase in inventory reserves
driven by X-Series disposables. The remainder of the decrease was
driven by reduced gross profit of approximately $1.2 million from lower AXP® device and
disposable sales.
Sales and marketing expenses. Sales and marketing
expenses were $1.9 million for the
year ended December 31, 2020, as
compared to $1.7 million for the year
ended December 31, 2019, an increase
of $0.3 million or 18%. The increase
was driven by approximately $0.2
million more in salaries and benefits and approximately
$0.1 million in additional consulting
expenses for the new marketing firm the Company engaged in
2020.
Research and development expenses. Research and
development expenses were $2.5
million for the year ended December
31, 2020, compared to $2.4
million for the year ended December
31, 2019, an increase of $0.1
million or 3%. The increase was driven primarily by
approximately $0.1 million more in
spending for project expenses in 2020, offset by a decrease in
salaries and benefits of approximately $35,000.
General and administrative expenses. General and
administrative expenses for the year ended December 31, 2020 were $5.7 million, compared to $6.4 million for the year ended December 31, 2019, a decrease of $0.6 million or 10%. The decrease was driven by a
settlement expense of $1.4 million
related to the Mavericks lawsuit in 2019, partially offset by
approximately $0.4 million in accrued
expenses related to the Company's employee short-term incentive
program, approximately $0.3 million
more in stock compensation expense related to awards granted in
2020 to Executives and Directors and approximately $0.1 million more in corporate insurance
expense.
Interest Expense. Interest expense increased to
$7.9 million for the year ended
December 31, 2020 as compared to
$4.5 million for the year ended
December 31, 2019, a difference of
$3.4 million. The increase was driven
by the accelerated expense of the unamortized debt discount of
$2.5 million for the beneficial
conversion feature associated with the portions of the Revolving
Credit Agreement with Boyalife Asset Holding II, Inc. which were
converted during the first quarter of 2020. The remainder of the
increase was driven by additional interest expense and amortization
of the debt discount of approximately $0.8
million related to the Revolving Credit Agreement with
Boyalife Asset Holding II, Inc.
Loss on Extinguishment of Debt: The Company recorded a
loss of extinguishment of debt of $0
for the year ended December 31, 2020
as compared to $0.8 million for the
year ended December 31, 2019. The
recorded loss of extinguishment of debt in 2019 was due to the
extinguishment of an unsecured note payable to an accredited
investor.
Net loss. For the year ended December 31, 2020, the Company reported a
comprehensive loss attributable to common stockholders of
$16.3 million, or ($2.60) per share, based on approximately 6.3
million weighted average basic and diluted common shares
outstanding. This compares to a comprehensive net loss of
$9.5 million, or ($3.36) per share, based on approximately 2.8
million weighted average basic and diluted common shares
outstanding for the year ended December 31,
2019.
Adjusted EBITDA. In addition to the results
reported under US GAAP, the Company also uses a non-GAAP measure,
Adjusted EBITDA, to evaluate operating performance and to
facilitate the comparison of our historical results and trends. The
Company uses the metric to determine operational cash flow.
Adjusted EBITDA loss for the year ended December 31, 2020 was $7.3
million, as compared to a loss of $3.3 million for the year ended December 31, 2019, an increase of $4.0 million or 119%. The increase in the
adjusted EBITDA loss was primarily due to an inventory disposition
expense of approximately $2.8 million
for the remaining inventory of COVID-19 testing kits purchased from
ImmuneCyte and a $0.5 million
increase in inventory reserves driven by X-SERIES disposables. The
year ended December 31, 2020 also had
reduced gross profit of approximately $1.2
million due to lower sales and approximately $0.5 million more in salaries and benefits. These
increases were partially offset by a settlement expense of
$1.4 million related to the Mavericks
lawsuit in 2019. A reconciliation of adjusted EBITDA loss to net
loss is set forth below.
Liquidity and Capital Resources. At December 31, 2020, the Company had cash and cash
equivalents totaling $7.2 million,
compared with $3.2 million at
December 31, 2019. Working capital
improved to $9.2 million at
December 31, 2020 as compared to
$2.8 million at December 31, 2019.
Conference Call and Webcast Information
ThermoGenesis will host a conference call today at 1:30 p.m. PT/4:30 p.m.
ET. To participate in the conference call, please dial
1-844-889-4331 (domestic), 1-412-380-7406 (international) or
1-866-605-3852 (Canada). To access
a live webcast of the call, please visit:
https://thermogenesis.com/investors/news-and-events/events-webcasts.
A webcast replay will also be available on ThermoGenesis'
website for three months, please visit:
https://thermogenesis.com/investors/news-and-events/events-webcasts.
About ThermoGenesis Holdings, Inc.
ThermoGenesis Holdings, Inc. develops, commercializes, and markets
a range of automated technologies for CAR-T and other cell-based
therapies. The Company currently markets a full suite of solutions
for automated clinical biobanking, point-of-care applications, and
automation for immuno-oncology, including its semi-automated,
functionally closed CAR-TXpress™ platform, which streamlines
the manufacturing process for the emerging CAR-T immunotherapy
market. For more information about ThermoGenesis, please
visit: www.thermogenesis.com.
Forward-Looking Statements
This press release contains "forward-looking statements" within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995. The forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements contained herein. When
used in this press release, the words "anticipate," "believe,"
"estimate," "expect" and similar expressions as they relate to the
Company or its management are intended to identify such
forward-looking statements. Actual results, performance or
achievements could differ materially from the results expressed in
or implied by these forward-looking statements. Readers should be
aware of important factors that, in some cases, have affected, and
in the future could affect, actual results to differ materially
from those expressed in any forward-looking statements made by or
on behalf of the Company. These factors include without
limitation, the ability to obtain capital and other financing in
the amounts and at the times needed to launch new products, market
acceptance of new products, the nature and timing of regulatory
approvals for both new products and existing products for which the
Company proposes new claims, realization of forecasted revenues,
expenses and income, initiatives by competitors, price pressures,
failure to meet FDA regulated requirements governing the Company's
products and operations (including the potential for product
recalls associated with such regulations), risks associated with
initiating manufacturing for new products, failure to meet Foreign
Corrupt Practice Act regulations, legal proceedings, uncertainty
associated with the COVID-19 pandemic, and other risk factors
listed from time to time in our reports with the Securities and
Exchange Commission ("SEC"), including, in particular, those set
forth in ThermoGenesis Holdings' Form 10-K for the year ended
December 31, 2020.
Company Contact:
Wendy
Samford
916-858-5191
ir@thermogenesis.com
Investor Contact:
Paula Schwartz, Rx
Communications
917-322-2216
pschwartz@rxir.com
Financials
|
|
ThermoGenesis
Holdings, Inc.
|
Consolidated
Balance Sheets
|
(Unaudited)
|
|
|
December 31,
2020
|
|
December 31,
2019
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$7,161,000
|
|
$3,157,000
|
Restricted
cash
|
--
|
|
1,000,000
|
Accounts
receivable, net
|
1,382,000
|
|
1,278,000
|
Inventories
|
5,877,000
|
|
3,484,000
|
Prepaid
expenses and other current assets
|
878,000
|
|
602,000
|
Total current
assets
|
15,298,000
|
|
9,521,000
|
|
|
|
|
Inventories,
non-current
|
1,221,000
|
|
340,000
|
Equipment and leasehold
improvements, net
|
1,424,000
|
|
2,028,000
|
Right-of-use operating
lease assets, net
|
730,000
|
|
859,000
|
Goodwill
|
781,000
|
|
781,000
|
Intangible assets,
net
|
1,358,000
|
|
1,467,000
|
Other assets
|
48,000
|
|
218,000
|
Total assets
|
$20,860,000
|
|
$15,214,000
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$1,366,000
|
|
$1,447,000
|
Other current
liabilities
|
4,777,000
|
|
5,238,000
|
Total current
liabilities
|
6,143,000
|
|
6,685,000
|
|
|
|
|
Long-term
liabilities
|
8,847,000
|
|
7,613,000
|
|
|
|
|
Total ThermoGenesis
Holdings, Inc. stockholders' equity
|
5,800,000
|
|
386,000
|
|
|
|
|
Noncontrolling
interests
|
70,000
|
|
530,000
|
Total
liabilities and equity
|
$20,860,000
|
|
$15,214,000
|
ThermoGenesis
Holdings, Inc.
|
Consolidated
Statements of Operations
|
(Unaudited)
|
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
|
|
|
Net
revenues
|
$9,744,000
|
|
$13,047,000
|
Cost of
revenues
|
8,485,000
|
|
7,351,000
|
Gross
profit
|
1,259,000
|
|
5,696,000
|
|
|
|
|
Expenses:
|
|
|
|
Sales and
marketing
|
1,948,000
|
|
1,656,000
|
Research and
development
|
2,477,000
|
|
2,396,000
|
General and
administrative
|
5,729,000
|
|
6,377,000
|
Total operating
expenses
|
10,154,000
|
|
10,429,000
|
|
|
|
|
Loss from
operations
|
(8,895,000)
|
|
(4,733,000)
|
|
|
|
|
Other income
(expense):
|
|
|
|
Interest
expense
|
(7,908,000)
|
|
(4,479,000)
|
Fair value
change of derivative instruments
|
--
|
|
1,000
|
Loss on
extinguishment of debt
|
--
|
|
(840,000)
|
Loss on equity
method investments
|
(13,000)
|
|
(15,000)
|
Other income
(expense)
|
5,000
|
|
(33,000)
|
Total other income
(expense)
|
(7,916,000)
|
|
(5,366,000)
|
|
|
|
|
Net loss
|
$
(16,811,000)
|
|
$
(10,099,000)
|
|
|
|
|
Loss attributable to
noncontrolling interests
|
(460,000)
|
|
(602,000)
|
Net loss attributable
to common stockholders
|
$(16,351,000)
|
|
$(9,497,000)
|
ThermoGenesis
Holdings, Inc.
|
Consolidated
Statements of Cash Flows
|
(Unaudited)
|
|
|
Year
Ended December 31,
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
Net cash used in
operating activities
|
$(14,393,000)
|
|
$(3,260,000)
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(23,000)
|
|
(182,000)
|
Net cash used
in investing activities
|
(23,000)
|
|
(182,000)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from long-term
debt
|
4,287,000
|
|
1,800,000
|
Proceeds from convertible
promissory note-related party
|
--
|
|
1,513,000
|
Payments on finance lease
obligations
|
(33,000)
|
|
(24,000)
|
Proceeds from sale of common
stock, net
|
10,839,000
|
|
756,000
|
Proceeds from exercise of warrants and pre-funded
warrants
|
1,683,000
|
|
154,000
|
Proceeds from note
payable
|
646,000
|
|
--
|
Net cash
provided by financing activities
|
17,422,000
|
|
4,199,000
|
|
|
|
|
Effects of
foreign currency rate changes on cash and cash
equivalents
|
(2,000)
|
|
--
|
Net increase in
cash, cash equivalents and restricted cash
|
3,004,000
|
|
757,000
|
|
|
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
4,157,000
|
|
3,400,000
|
Cash, cash
equivalents and restricted cash at end of period
|
$7,161,000
|
|
$4,157,000
|
ThermoGenesis
Holdings, Inc.
|
Reconciliation of
Adjusted EBITDA to Net Income (Loss)
|
(Unaudited)
|
|
|
|
Year Ended
December 31,
|
|
|
2020
|
|
2019
|
Net loss
|
|
$(16,811,000)
|
|
$(10,099,000)
|
|
|
|
|
|
Deduct:
|
|
|
|
|
Interest
expense
|
|
(7,908,000)
|
|
(4,479,000)
|
Loss on
extinguishment of debt
|
|
--
|
|
(840,000)
|
Fair
value change of derivative instruments and other
|
|
5,000
|
|
(32,000)
|
Loss on
equity method investments
|
|
(13,000)
|
|
(15,000)
|
Loss from
operations
|
|
$(8,895,000)
|
|
$(4,733,000)
|
|
|
|
|
|
Add:
|
|
|
|
|
Depreciation and amortization
|
|
742,000
|
|
805,000
|
Stock-based compensation expense
|
|
880,000
|
|
614,000
|
Adjusted
EBITDA
|
|
$(7,273,000)
|
|
$(3,314,000)
|
The Company defines adjusted EBITDA as income (or loss) from
operations less, depreciation, amortization, stock compensation and
impairment of intangible assets.
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SOURCE ThermoGenesis Holdings, Inc.