UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

Commission File No. 001-32404

POLARITYTE, INC.

(Exact name of registrant as specified in its charter)

delaware		06-1529524
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

1960 S. 4250 West, Salt Lake City, UT 84104

(Address of principal executive offices)

Registrant’s Telephone Number, Including Area Code: (800) 560-3983

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, Par Value $0.001		PTE		Nasdaq Capital Market NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of August 5, 2021, there were 81,382,372 shares of the Registrant’s common stock outstanding.

INDEX

	Page
PART I - FINANCIAL INFORMATION	3

Item 1. Financial Statements:	3
Condensed Consolidated Balance Sheets as of June 30, 2021, and December 31, 2020 (unaudited)	3
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 (unaudited)	4
Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2021 and 2020 (unaudited)	5
Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2021 and 2020 (unaudited)	6
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited)	7
Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3. Quantitative and Qualitative Disclosures about Market Risk	36
Item 4. Controls and Procedures	36

PART II - OTHER INFORMATION	36

Item 1A. Risk Factors	36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 5. Other Information	37
Item 6. Exhibits	38

SIGNATURES	39

As used in this report, the terms “we,” “us,” “our,” “the Company,” and “PolarityTE” mean PolarityTE, Inc., a Delaware corporation, and our wholly owned Nevada subsidiaries (direct and indirect), PolarityTE, Inc., PolarityTE MD, Inc., Arches Research, Inc., Utah CRO Services, Inc., IBEX Preclinical Research, Inc., and IBEX Property LLC., unless otherwise indicated or required by the context.

POLARITYTE, the PolarityTE Logo, WELCOME TO THE SHIFT, WHERE SELF REGENERATES SELF, COMPLEX SIMPLICITY, IBEX, ARCHES, and SKINTE are all trademarks or registered trademarks of PolarityTE. Solely for convenience, the trademarks and trade names in this report may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that we will not assert, to the fullest extent under applicable law, our rights thereto.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements:

POLARITYTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except share and per share amounts)

	June 30, 2021			December 31, 2020
ASSETS
Current assets
Cash and cash equivalents	$	32,614		$	25,522
Accounts receivable, net		2,042			3,819
Inventory		76			883
Prepaid expenses and other current assets		2,286			992
Total current assets		37,018			31,216
Property and equipment, net		8,684			10,550
Operating lease right-of-use assets		1,756			2,452
Intangible assets, net		447			542
Goodwill		278			278
Other assets		227			472
TOTAL ASSETS	$	48,410		$	45,510

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	3,924		$	4,148
Other current liabilities		2,509			2,106
Current portion of long-term notes payable		–			2,059
Deferred revenue		86			168
Total current liabilities		6,519			8,481
Common stock warrant liability		14,059			5,975
Operating lease liabilities		550			1,476
Other long-term liabilities		514			723
Long-term notes payable		–			1,517
Total liabilities		21,642			18,172

Commitments and Contingencies (Note 14)		-			-

STOCKHOLDERS’ EQUITY
Preferred stock - 25,000,000 shares authorized, 0 shares issued and outstanding at June 30, 2021 and December 31, 2020		–			–
Common stock – $.001 par value; 250,000,000 shares authorized; 80,742,443 and 54,857,099 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		81			55
Additional paid-in capital		525,496			505,494
Accumulated deficit		(498,809	)		(478,211	)
Total stockholders’ equity		26,768			27,338
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	48,410		$	45,510

The accompanying notes are an integral part of these condensed consolidated financial statements

POLARITYTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except share and per share amounts)

	2021			2020			2021			2020
	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Net revenues
Products	$	1,195		$	944		$	2,924		$	1,372
Services		1,342			1,322			4,322			1,827
Total net revenues		2,537			2,266			7,246			3,199
Cost of sales
Products		207			275			448			615
Services		717			607			2,641			783
Total cost of sales		924			882			3,089			1,398
Gross profit		1,613			1,384			4,157			1,801
Operating costs and expenses
Research and development		4,190			3,164			6,621			6,537
General and administrative		4,941			5,211			11,312			15,816
Sales and marketing		1,099			2,024			2,625			5,718
Restructuring and other charges		11			2,084			436			2,536
Total operating costs and expenses		10,241			12,483			20,994			30,607
Operating loss		(8,628	)		(11,099	)		(16,837	)		(28,806	)
Other income (expenses)
Gain on extinguishment of debt		3,612			–			3,612			–
Change in fair value of common stock warrant liability		1,807			(1,591	)		(2,220	)		2,941
Inducement loss on sale of liability classified warrants		–			–			(5,197	)		–
Interest expense, net		(39	)		(65	)		(77	)		(77	)
Other income, net		60			78			121			225
Net loss	$	(3,188	)	$	(12,677	)	$	(20,598	)	$	(25,717	)

Net loss per share attributable to common stockholders
Basic	$	(0.04	)	$	(0.33	)	$	(0.26	)	$	(0.72	)
Diluted	$	(0.04	)	$	(0.33	)	$	(0.26	)	$	(0.72	)
Weighted average shares outstanding
Basic		80,602,931			38,428,289			78,392,881			35,724,141
Diluted		81,162,256			38,428,289			78,392,881			35,724,141

The accompanying notes are an integral part of these condensed consolidated financial statements

POLARITYTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited, in thousands)

	2021			2020			2021			2020
	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Net loss	$	(3,188	)	$	(12,677	)	$	(20,598	)	$	(25,717	)
Other comprehensive income/(loss):
Unrealized gain on available-for-sale securities		–			7			–			11
Reclassification of realized gains included in net loss		–			(10	)		–			(83	)
Comprehensive loss	$	(3,188	)	$	(12,680	)	$	(20,598	)	$	(25,789	)

The accompanying notes are an integral part of these condensed consolidated financial statements

POLARITYTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in thousands, except share and per share amounts)


	For the Three and Six Months Ended June 30, 2021
	Common Stock					Additional Paid-in			Accumulated Other		Accumulated			Total Stockholders’
	Number			Amount		Capital			Comprehensive Income		Deficit			Equity
Balance – December 31, 2020		54,857,099		$	55	$	505,494		-	-	$	(478,211	)	$	27,338
Issuance of common stock and pre-funded warrants through underwritten offering, net of issuance costs of $114		6,670,000			7		1,248		-			–			1,255
Issuance of common stock, net of issuance costs of $1,319
Issuance of common stock, net of issuance costs of $1,319, shares										-
Issuance of common stock upon exercise of warrants		10,713,543			10		6,661					–			6,671
Reclassification of warrant liability upon exercise		–			–		8,964					–			8,964
Issuance of common stock upon exercise of pre-funded warrants		7,658,953			8		–					–			8
Stock-based compensation expense		–			–		1,651					–			1,651
Stock option exercises		2,500			–		3					–			3
Purchase of ESPP shares
Purchase of ESPP shares, shares
Vesting of restricted stock units		565,427			–		–					–			–
Shares withheld for tax withholding		(116,593	)		–		(139	)				–			(139	)
Forfeiture of restricted stock awards		(34,620	)		–		–					–			–
Cancellation of restricted stock awards
Cancellation of restricted stock awards, shares
Other comprehensive loss
Net loss		–			–		–					(17,410	)		(17,410	)
Balance – March 31, 2021		80,316,309		$	80	$	523,882		-	-	$	(495,621	)	$	28,341
Stock-based compensation expense		–			–		1,640					–			1,640
Purchase of ESPP shares		49,248			–		28					–			28
Vesting of restricted stock units		434,144			1		(1	)	-	-

SEC Form 10-Q filed by PolarityTE, Inc.