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HOLLISTON, Mass.May 14, 2020 /PRNewswire/ -- Biostage, Inc. (OTCQB: BSTG) ("Biostage" or the "Company"), a clinical-stage biotechnology company developing bioengineered organ implants based on the Company's novel Cellspan™ technology, today announced its financial results for the three months ended March 31, 2020.

BSTG Logo (PRNewsfoto/Biostage, Inc.)

 

The Company will not hold an earnings conference call at this time. The Company plans to hold a conference call at a future date to discuss its clinical and business plans based on the U.S. Food and Drug Administration (FDA) removing the clinical hold on its Cellspan Esophageal Implant (CEI) study.

 

Operating Highlights

On March 19, 2020, the FDA notified the Company that the clinical hold on its CEI product candidate has been removed and the Company may proceed with its First in Human (FIH) Clinical study. This FDA approval enables us to start clinical planning, including engaging with a clinical research organization and site readiness in advance of starting the clinical trial for our CEI product candidate. The COVID-19 pandemic has and will continue to affect the Company's operations, including causing delays or difficulties in its ability to plan and commence clinical trials.

 

Summary of Financial Results

 

For the three months ended March 31, 2020, the Company reported a net loss of $2.0 million($0.24) per share, compared to a net loss of $1.9 million($0.32) per share, for the three months ended March 31, 2019. The $0.1 million year-over-year increase in net loss was due primarily to a $0.3 million increase in general and administrative expenses costs, a $0.1 million decrease in grant income for qualified expenditures from our Fast-Track Small Business Innovation Research grant, and a $0.1 million increase in expense due to the change in the fair value of our warrant liability. This was offset, in part, by a $0.4 million decrease in research and development costs.

 

Balance Sheet and Cash

 

At March 31, 2020, the Company had operating cash on-hand of $0.8 million and no debt. The Company used net cash in operations of $1.1 million during the three-month period ended March 31, 2020.

During the three months ended March 31, 2020, the Company received $1.0 million from financing activities, including approximately $0.6 million from the issuance of 151,027 shares of common stock and warrants to investors in private placement transactions, and approximately $0.4 million from the issuance of 214,000 shares of its common stock to a group of investors in connection with the exercise of previously issued warrants.

 

About Biostage, Inc.

 

Biostage is a clinical-stage biotechnology company developing bioengineered organ implants based on the Company's novel Cellspan™ technology. The Company's Cellspan technology combines a proprietary, biocompatible scaffold with a patient's own cells to create an esophageal implant that could potentially be used to treat pediatric esophageal atresia and other tubular organ conditions. Our novel technology harnesses the body's response and modulates it toward the healing process to regenerate tissue and restore the continuity and integrity of the organ. These implants have the potential to dramatically improve the quality of life for children and adults. At Biostage, we believe the future of medicine has been inside us all along.

 

For more information, please visit www.biostage.com and connect with the Company on Twitter and LinkedIn.

 

Forward-Looking Statements

 

Some of the statements in this press release are "forward-looking" and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These "forward-looking" statements in this press release include, but are not limited to, statements relating to the viability of our technology; success with respect to any clinical trials and other development and commercialization efforts of the Company's products, which such success may not be achieved on a timely basis or at all; our financing activities; expectations as to regulatory approval of any of the Company's products, including those utilizing its Cellspan™ and Cellframe™ technology, by the U.S. Food and Drug Administration, the European Medicines Agency or otherwise, which approvals may not be obtained on a timely basis or at all. These statements involve risks and uncertainties that may cause results to differ materially from the statements set forth in this press release, including, among other things, the Company's inability to obtain needed funds in the immediate future; the impact of COVID-19 on our business and operations; the Company's ability to obtain and maintain regulatory approval for its products; plus other factors described under the heading "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 or described in the Company's other public filings. The Company's results may also be affected by factors of which the Company is not currently aware. The forward-looking statements in this press release speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to such statements to reflect any change in its expectations with regard thereto or any changes in the events, conditions or circumstances on which any such statement is based.

 

Investor Relations Contacts

 

Shunfu Hu
Vice President of Business Development and Operations
774-233-7300
This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Peter Chakoutis
Vice President of Finance
774-233-7300
This email address is being protected from spambots. You need JavaScript enabled to view it.

 

BIOSTAGE, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value and share data)

 

   

March 31,

 

December 31,

2020

2019

Assets

   (Unaudited)    
Current assets:            

Cash 

 

$

806

 

$

913

Restricted cash

   

50

   

50

Prepaid expenses and other current assets

   

346

   

444

Total current assets

   

1202

   

1,407

Property, plant and equipment, net

   

346

   

394

Right-of-use assets

   

166

   

191

Total non-current assets

 

 

512

 

 

585

Total assets

 

$

1,714

 

$

1,992

             

Liabilities and stockholders' equity

         
Current liabilities            

Accounts payable

 

$

227

 

$

241

Accrued and other current liabilities

   

544

   

438

Warrant liability

   

133

   

33

Current portion of operating lease liability

 

 

105

 

 

102

Total current liabilities

 

 

1009

 

 

814

Operating lease liability, net of current portion

 

 

61

 

 

89

 Total liabilities  

$

1,070

 

$

903

             
Commitments and contingencies            
             
Stockholders' equity:            

Undesignated preferred stock, $0.01 par value; 984,000 shares authorized and none

issued and outstanding at  June 30, 2020 and December 31, 2019

 

$

-

 

$

-

Common stock, par value $0.01 per share, 60,000,000 shares authorized at

June 30, 2020 and December 31, 2019; 8,688,083 and 8,155,555 issued and

outstanding at June 30, 2020 and December 31, 2019, respectively

   

85

   

82

Additional paid-in capital

   

66,650

   

65,102

Accumulated deficit

   

(66,091)

   

(64,095)

Total stockholders' equity  

 

644

 

 

1,089

Total liabilities and stockholders' equity  

$

1,714

 

$

1,992

 

 

 

BIOSTAGE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)

 

   

Three Months Ended
March 31,

 
   

2020

 

2019

 

Revenues

 

$

-

 

$

-

 
               

Operating expenses

             

Research and development

 

 

643

 

$

1,034

 

Selling, general and administrative

   

1,253

   

1,000

 

Total operating expenses

   

1,896

   

2,034

 
               

Operating loss

   

(1,896)

   

(2,034)

 
               

Other income (expense)

             

     Grant income

   

-

   

114

 

Change in fair value of warrant liability

   

(100)

   

(7)

 

Total other income (expense), net

   

(100)

   

107

 
               

Net loss

 

$

(1,996)

 

$

(1,927)

 
               

Basic and diluted net loss per share

 

$

(0.24)

 

$

(0.32)

 

Weighted-average common shares, basic and diluted

 

 

8,287

 

 

6,003

 

 

 

BIOSTAGE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

 

   

Three Months Ended

March 31,

 
 

2020

 

2019

 

CASH FLOWS FROM OPERATING ACTIVITIES

           

Net loss

$

(1,996)

 

$

(1,927)

 
Adjustments to reconcile net loss to net cash used in operating activities:            

Share-based compensation expense

 

588

   

293

 

Depreciation

 

48

   

61

 

Amortization of right-of-use assets

 

25

   

23

 

Change in fair value of warrant liability

 

100

   

7

 
Changes in operating assets and liabilities:            

Grant receivable

 

-

   

62

 

Prepaid expenses and other current assets

 

98

   

124

 

Accounts payable

 

(14)

   

127

 

Accrued and other current liabilities

 

82

   

37

 

Lease liabilities

 

(25)

   

(23)

 

Net cash used in operating activities

 

(1,094)

   

(1,216)

 
             

CASH FLOWS FROM INVESTING ACTIVITIES

           

Purchases of property, plant and equipment

 

-

   

(24)

 

Net cash used in investing activities

 

-

   

(24)

 
             

CASH FLOWS FROM FINANCING ACTIVITIES

           

Proceeds from issuance of common stock and warrants

 

559

   

-

 

Proceeds from exercise of warrants

 

428

   

1,000

 

Net cash provided by financing activities

 

987

   

1,000

 

Net decrease in cash and restricted cash

 

(107)

   

(240)

 

Cash and restricted cash at the beginning of the year

 

963

   

1,355

 

Cash and restricted cash at the end of the year 

856

   $

1,115

 
 
 

SOURCE Biostage, Inc.