2016 Q4 Form 10-Q Financial Statement

#000119312516765874 Filed on November 10, 2016

View on sec.gov

Income Statement

Concept 2016 Q4 2016 Q3 2015 Q3
Revenue $0.00 $0.00 $0.00
YoY Change
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin $2.390M $1.770M $2.190M
YoY Change 7.17% -19.18% 28.82%
% of Gross Profit
Research & Development $5.320M $4.880M $5.848M
YoY Change -7.8% -16.55% -55.82%
% of Gross Profit
Depreciation & Amortization $400.0K $404.0K $414.0K
YoY Change -6.98% -2.42% 144.97%
% of Gross Profit
Operating Expenses $7.710M $6.648M $8.039M
YoY Change -3.63% -17.3% -46.19%
Operating Profit -$6.648M -$8.039M
YoY Change -17.3% -46.19%
Interest Expense $16.92M $20.00K $23.00K
YoY Change -84700.0% -13.04% 21.05%
% of Operating Profit
Other Income/Expense, Net $50.00K -$2.667M -$39.00K
YoY Change -600.0% 6738.46% -101.31%
Pretax Income $9.060M -$9.320M -$8.080M
YoY Change -208.5% 15.35% -32.5%
Income Tax
% Of Pretax Income
Net Earnings $9.060M -$9.315M -$8.078M
YoY Change -208.5% 15.31% -32.54%
Net Earnings / Revenue
Basic Earnings Per Share
Diluted Earnings Per Share $31.24M -$42.36M -$36.73M
COMMON SHARES
Basic Shares Outstanding 15.93M shares 13.27M shares 0.000 shares
Diluted Shares Outstanding

Balance Sheet

Concept 2016 Q4 2016 Q3 2015 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $31.91M $37.99M $37.72M
YoY Change 3.2% 0.72% 1057.06%
Cash & Equivalents $31.91M $37.99M $37.72M
Short-Term Investments
Other Short-Term Assets $68.00K $200.0K $370.0K
YoY Change -65.13% -45.95% -88.1%
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets $32.08M $38.20M $38.09M
YoY Change 2.71% 0.28% 497.93%
LONG-TERM ASSETS
Property, Plant & Equipment $3.860M $4.263M $5.513M
YoY Change -25.95% -22.67% 63.11%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $140.0K $140.0K $1.190M
YoY Change 0.0% -88.24% -29.17%
Total Long-Term Assets $3.997M $4.600M $7.213M
YoY Change -27.98% -36.23% 28.12%
TOTAL ASSETS
Total Short-Term Assets $32.08M $38.20M $38.09M
Total Long-Term Assets $3.997M $4.600M $7.213M
Total Assets $36.08M $42.80M $45.30M
YoY Change -1.92% -5.53% 277.51%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.588M $1.665M $2.001M
YoY Change -21.54% -16.79% -54.11%
Accrued Expenses $2.097M $4.290M $2.449M
YoY Change 45.22% 75.17% 50.25%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change -100.0%
Long-Term Debt Due $580.0K $580.0K $580.0K
YoY Change 0.0% 0.0% 544.44%
Total Short-Term Liabilities $5.171M $7.209M $6.690M
YoY Change -18.68% 7.76% -61.95%
LONG-TERM LIABILITIES
Long-Term Debt $180.0K $320.0K $910.0K
YoY Change -76.32% -64.84% 145.95%
Other Long-Term Liabilities $17.16M $31.23M $1.530M
YoY Change 1067.35% 1941.18% -94.0%
Total Long-Term Liabilities $17.34M $31.55M $2.440M
YoY Change 677.58% 1193.03% -90.56%
TOTAL LIABILITIES
Total Short-Term Liabilities $5.171M $7.209M $6.690M
Total Long-Term Liabilities $17.34M $31.55M $2.440M
Total Liabilities $22.51M $38.76M $9.125M
YoY Change 162.12% 324.76% -78.99%
SHAREHOLDERS EQUITY
Retained Earnings -$181.8M -$190.8M -$157.2M
YoY Change 9.79% 21.38%
Common Stock $195.3M $194.9M $193.4M
YoY Change 0.81% 0.77%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $13.57M $4.036M $36.18M
YoY Change
Total Liabilities & Shareholders Equity $36.08M $42.80M $45.30M
YoY Change -1.92% -5.53% 277.51%

Cashflow Statement

Concept 2016 Q4 2016 Q3 2015 Q3
OPERATING ACTIVITIES
Net Income $9.060M -$9.315M -$8.078M
YoY Change -208.5% 15.31% -32.54%
Depreciation, Depletion And Amortization $400.0K $404.0K $414.0K
YoY Change -6.98% -2.42% 144.97%
Cash From Operating Activities -$5.900M -$5.460M -$6.880M
YoY Change -15.59% -20.64% 146.59%
INVESTING ACTIVITIES
Capital Expenditures $0.00 -$10.00K -$500.0K
YoY Change -100.0% -98.0% -64.03%
Acquisitions
YoY Change
Other Investing Activities
YoY Change
Cash From Investing Activities $0.00 -$10.00K -$500.0K
YoY Change -100.0% -98.0% -64.03%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -190.0K 27.53M -120.0K
YoY Change 26.67% -23041.67% -64.71%
NET CHANGE
Cash From Operating Activities -5.900M -5.460M -6.880M
Cash From Investing Activities 0.000 -10.00K -500.0K
Cash From Financing Activities -190.0K 27.53M -120.0K
Net Change In Cash -6.090M 22.06M -7.500M
YoY Change -16.23% -394.13% 65.93%
FREE CASH FLOW
Cash From Operating Activities -$5.900M -$5.460M -$6.880M
Capital Expenditures $0.00 -$10.00K -$500.0K
Free Cash Flow -$5.900M -$5.450M -$6.380M
YoY Change -13.99% -14.58% 355.71%

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<div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt"> <b>Reclassifications</b></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt"> The Company has reclassified certain prior period amounts to conform to the current period presentation. The amounts reclassified impact Accounts Payable and Accrued Expenses and Accounts Payable due to Intrexon Corporation (&#x201C;Intrexon&#x201D;) and Accrued Expenses due to Intrexon for the nine months ended September&#xA0;30, 2015 and the year ended December&#xA0;31, 2015.</p> </div>
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<div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; font-variant-ligatures: normal; font-variant-caps: normal"> <b>1. NATURE OF BUSINESS</b></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; font-variant-ligatures: normal; font-variant-caps: normal"> <b>Organization</b></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; font-variant-ligatures: normal; font-variant-caps: normal"> Histogenics Corporation (the &#x201C;Company&#x201D;) was incorporated under the laws of the Commonwealth of Massachusetts on June&#xA0;28, 2000 and has its principal operations in Waltham, Massachusetts. In 2006, the Company&#x2019;s board of directors approved a corporate reorganization pursuant to which the Company incorporated as a Delaware corporation. The Company is a regenerative medicine company engaged in developing and commercializing products in the musculoskeletal segment of the marketplace. The Company combines cell therapy and tissue engineering technologies to develop products for tissue repair and regeneration and is initially focused on patients suffering from cartilage-derived pain and immobility. The Company&#x2019;s most advanced product, NeoCart, is currently in a Phase 3 clinical trial in the United States (the &#x201C;U.S.&#x201D;) under a special protocol assessment with the U.S. Food and Drug Administration (&#x201C;FDA&#x201D;) for the treatment of knee cartilage damage.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; font-variant-ligatures: normal; font-variant-caps: normal"> On May&#xA0;13, 2011, the Company completed the acquisition of ProChon Biotech Ltd. (&#x201C;ProChon&#x201D;), a privately-held biotechnology company focused on modulating the fibroblast growth factor system for consideration of $2,224 to enable it to create more effective solutions for tissue regeneration. ProChon&#x2019;s products combine cell regeneration technologies with proprietary growth factors and biocompatible scaffolds to restore injured or chronically damaged tissues. The acquisition of ProChon provided the Company with access to a significant portfolio of intellectual property, including proprietary cell growth factors, in addition to furthering opportunities for the use of biomaterials to create more effective solutions for regenerating human tissue. The acquisition led to the initial recognition of goodwill, which was subsequently written off in 2011, and intangible assets including IPR&amp;D and a licensing agreement which have been impaired as discussed in Note 2.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; font-variant-ligatures: normal; font-variant-caps: normal"> On December&#xA0;18, 2014, the Company formed a wholly owned subsidiary, Histogenics Securities Corporation, under the laws of the Commonwealth of Massachusetts.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; font-variant-ligatures: normal; font-variant-caps: normal"> On September&#xA0;29, 2016, the Company closed a private placement of common stock, preferred stock and warrants, contemplated by a securities purchase agreement dated September&#xA0;15, 2016, with certain institutional and accredited investors. The net proceeds after deducting placement agent fees and other transaction-related expenses was $27.7 million. (See Note 6 for further discussion of the private placement.) Since its inception, the Company has devoted substantially all of its efforts to product development, recruiting management and technical staff, raising capital, starting up production and building infrastructure and has not yet generated revenues from its planned principal operations. Expenses have primarily been for research and development and related administrative costs.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; font-variant-ligatures: normal; font-variant-caps: normal"> The Company is subject to a number of risks. The developmental nature of its activities is such that significant inherent risks exist in the Company&#x2019;s operations. Principal among these risks are the successful development of therapeutics, successfully enrolling patients in its clinical trials in a timely manner, obtaining regulatory approval for any of its product candidates in any jurisdiction, compliance with government regulations, ability to obtain adequate financing, protection of proprietary therapeutics, fluctuations in operating results, dependence on key personnel and collaborative partners, adoption of the Company&#x2019;s products by the physician community, rapid technological changes inherent in the markets targeted, and substitute products and competition from larger companies.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; font-variant-ligatures: normal; font-variant-caps: normal"> The condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying condensed consolidated financial statements, the Company has incurred losses and cash flow deficits from operations for the nine months ended September&#xA0;30, 2016 and 2015. The Company has financed operations to date primarily through private placements of equity securities, including the sale of common stock and preferred stock, and the related issuance of warrants in September 2016, the issuance of common stock in the initial public offering completed in December 2014, and borrowings under debt agreements. The Company has incurred losses and negative cash flows from operations resulting in an accumulated deficit at September 30, 2016 of $190.8 million. The Company anticipates that it will continue to incur net losses for the next several years. The Company believes that its existing cash and cash equivalents will be sufficient to fund its projected cash needs into the middle of 2018.&#xA0;The Company will require additional capital to complete the filing of a biologics license application with the FDA and commercialize NeoCart, if approved, and for the future development of its existing product candidates.</p> <p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; font-variant-ligatures: normal; font-variant-caps: normal"> &#xA0;</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; font-variant-ligatures: normal; font-variant-caps: normal"> <b>Basis of Accounting</b></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; font-variant-ligatures: normal; font-variant-caps: normal"> The condensed consolidated financial statements are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America (&#x201C;U.S. GAAP&#x201D;). However, they do not include all of the information and footnotes required by GAAP for complete financial statements. These interim condensed consolidated financial statements, in the opinion of the Company&#x2019;s management, reflect all normal recurring adjustments necessary for a fair presentation of the Company&#x2019;s financial position and results of operations for the interim periods ended September&#xA0;30, 2016 and 2015. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December&#xA0;31, 2015, and the notes thereto, which are included in the Company&#x2019;s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the &#x201C;SEC&#x201D;) on March&#xA0;10, 2016.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: &quot;Times New Roman&quot;; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px; font-variant-ligatures: normal; font-variant-caps: normal"> The condensed consolidated financial statements include the accounts of Histogenics Corporation and its wholly-owned subsidiaries, ProChon and Histogenics Securities Corporation. All significant intercompany accounts and transactions are eliminated in consolidation.</p> </div>
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