CollPlant Reports First Quarter 2019

CollPlant Reports First Quarter 2019

Financial Results and

Provides Business Update

Rehovot, May 30, 2019, CollPlant (NASDAQ:CLGN),

a regenerative medicine company, today announced financial results for the first quarter ended March 31, 2019 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 $594,000

for the first quarter of 2019. The Company ended the first quarter of 2019 with $3.7 million in cash and cash equivalents. Comprehensive

loss for the first quarter of 2019 was $2.0 million on a GAAP basis, or adjusted comprehensive loss of $1.2 million, on a non-GAAP

"During the first quarter of 2019,

we continued advancing our 3D bioprinting business. We are moving forward with development activities with various biotechnology

and medical device companies that are using CollPlant's rhCollagen based BioInk for bioprinting organs and tissues. We are

very pleased to collaborate with United Therapeutics Corporation (NASDAQ: UTHR) which is using CollPlant's rhCollagen-based

BioInk to 3D bioprint lung scaffolds with the longer-term goal of manufacturing an unlimited supply of transplantable lungs for

patients with serious medical conditions," said Yehiel Tal, CollPlant's Chief Executive Officer.

"In the medical aesthetics market,

we are moving forward with the development of a new dermal filler product line, addressing the need for more innovative aesthetic

products to treat wrinkles. CollPlant is advancing collaborations with leading companies in this segment. Our new product line

will be based on the combination of hyaluronic acid, a naturally-occurring, moisture-binding compound, with our plant-based, tissue

regenerating rhCollagen. As part of this activity, we supplied our first material rhCollagen order into the aesthetics market during

the first quarter of 2019," added Mr. Tal.

"Recently, we launched a new headquarters

and R&D center in Rehovot, Israel. The new R&D facility will serve CollPlant in the development of its product pipeline,

including BioInks for 3D bioprinting of tissues and organs, and dermal fillers for medical aesthetics. During the first quarter,

we welcomed U.S. based specialty pharma executive Jonathan M.N. Rigby as Chairman of our Board. We also continued to see clinical

efficacy data on our rhCollagen-based products published in peer reviewed journals, including a study regarding our rhCollagen's

role in bone repair and in chronic wound closure. The combination of our professional team, breakthrough technology, and new R&D

center, enables us to take a significant step forward through development of new state-of-the-art products and facilitates significant

business partnerships with leading corporations," concluded Mr. Tal.

First Quarter 2019 Financial Results

on IFRS basis ("GAAP")

Revenues for the first three months ended

March 31, 2019 increased by 164% to $594,000, compared to $225,000 in the first quarter of 2018. Revenues were derived from sales

in the U.S. of CollPlant's BioInk for the development of 3D bioprinting of tissues and organs, sales of rhCollagen for medical

aesthetics, as well as sales in Europe of CollPlant's soft tissue repair matrix, VergenixSTR, and VergenixFG for treatment

The Company's gross profit for the

first three months ended March 31, 2019 decreased by 6% to $189,000 compared to $200,000 in the first quarter of 2018.

Total operating costs and expenses for

the first three months ended March 31, 2019 were $1.7 million, a decrease of 26% compared to $2.3 million in the first quarter

of 2018. The decrease is mainly due to non-cash share-based compensation amounting to $407,000.

Operating loss for the first three months

ended March 31, 2019 was $1.6 million, a decrease of 24% compared to an operating loss of $2.1 million in the first quarter of

Financial expenses, net for the first three

months ended March 31, 2019 were $482,000 compared to financial expenses, net of $6,000 in the first quarter of 2018. The increase

is mainly due to non-cash re-evaluation expenses of the company's warrants and the anti-dilution derivatives.

Comprehensive loss for the first quarter

of 2019 was $2.0 million, or $0.01 per share, compared to a comprehensive loss of $2.2 million, or $0.01 per share, for the first

Cash used in operating activities during

the first quarter was $870,000 compared to $1.5 million in the first quarter of 2018. As of March 31, 2019, cash and cash equivalents

totaled $3.7 million.

Cash used in investing activities during

the first quarter was $711,000 compared to $208,000 in the first quarter of 2018. The increase is mainly attribute to the establishment

of CollPlant's new HQ and R&D center in Rehovot, Israel.

First Quarter 2019 Financial Results on Non-IFRS Basis ("non-GAAP")

On a non-GAAP basis, the operating costs

and expenses for the first quarter of 2019 were $1.4 million, compared to $1.5 for the first quarter of 2018, while the comprehensive

loss for the first quarter of 2019 was $1.2 million, or $0.01 per share, compared to $1.2 million, or $0.01 per share, for the

first quarter of 2018. Non-GAAP measures exclude certain non-cash expenses. The table on page 9 includes a reconciliation of the

Company's GAAP results to non-GAAP results. The reconciliation reflects non-cash expenses in the amount of $789,000 with

respect to (i) change in fair value of financial instruments and (ii) share-based compensation to employees, directors and consultants.

Change in Functional and Presentation Currency

From the Company's inception through

January 1, 2019, the Company's functional and presentation currency was the New Israeli Shekel (NIS). Management conducted

a review of the functional currency of the Company and decided to change its functional and presentation currency to the U.S. dollar

from the NIS effective January 1, 2019. This change was based on an assessment by Company management that the dollar is the primary

currency of the economic environment in which the Company operates. Accordingly, the functional and presentation currency of the

Company in the financial results presented in this press release is the U.S. dollar.

In determining the appropriate

functional currency to be used, the Company followed the guidance in International Accounting Standard (IAS) 21 " The

Effects of Changes in Foreign Exchange Rates", which states that factors relating to sales, costs and expenses,

financing activities and cash flows, as well as other potential factors, should be considered. In this regard, the Company

recently incurred a significant increase in revenues denominated in dollars relating to collaboration with its customers in

the US, which is reflected primarily in the agreement the Company signed in October 2018, with United Therapeutics. The

Company expects additional increase in revenues denominated in dollars related to its activities. The Company incurred an

increase and expects to continue to incur a significant part of its expenses in U.S. dollars as a result of its activity in

the US capital markets. These changes, as well as the fact that the majority of the Company's available funds are in

U.S. dollars, the Company's principal source of financing is the U.S. capital market, and all of the Company's

budgeting is conducted solely in U.S. dollars, led to the decision to make the change in functional currency as of January 1,

2019, as indicated above.

The effect of the change in the functional currency is accounted

for prospectively. Assets and liabilities were translated into the new functional currency using the exchange rate at the date

of the change. The resulting translated amounts for non-monetary items are treated as their historical cost.

Due to the change in its functional currency as above and concurrently

with it, the Company decided to change its presentation currency from NIS to the U.S. dollar.

The change in presentation currency was applied retrospectively

to all comparative figures presented.

In effecting the change in presentation

currency to the U.S. dollar, with respect to comparative figures: (1) all assets and liabilities of the Company were translated

using the dollar exchange rate as of each balance sheet presented; (2) equity items were translated using historical exchange rates

at the relevant transaction dates; (3) the statement of comprehensive loss items have been translated at the average exchange rates

for the relevant reporting periods; and (4) the resulting translation differences have been reported as "currency translation

differences" within other comprehensive loss.

Use of Non-IFRS ("non-GAAP")

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 Alpha

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,