Reports Fourth Quarter and Year End 2018 Financial Results and Provides Business Update

Reports Fourth Quarter and Year End 2018 Financial Results and Provides Business Update

April 1, 2019, CollPlant (NASDAQ:CLGN), a regenerative medicine company, today announced financial results for the fourth

quarter and year ended December 31, 2018 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.

reported revenues of $4.2 million for the fourth quarter of 2018. The Company ended the fourth quarter of 2018 with $5.4 million

in cash and cash equivalents. Comprehensive income for the fourth quarter of 2018 was $1.0 million on a GAAP basis, or adjusted

comprehensive income of $904,000, on a non-GAAP basis.

the fourth quarter, we were very pleased to enter into a global licensing and commercialization agreement with United Therapeutics

(UTHR) for 3D bioprinting of lungs. We recognized $4 million as revenues in 2018 relating to the UTHR license agreement which,

when combined with revenues from the sale of our commercialized products, resulted in a net profit during the fourth quarter,"

stated Yehiel Tal, CollPlant's Chief Executive Officer.

believe our rhCollagen is the ideal building block for scaffolds used in regenerative medicine including for building organs

manufacturing. The ability to repair and build tissues and whole organs has the potential to transform medicine and we are

pleased to be on the forefront of this technology. We are actively collaborating with multiple companies by providing our

BioInks for various 3D printing applications."

the medical aesthetics market, we are expanding our development scope into the field of surgical incisions. We are currently running

a proof of concept study in breast and abdominal surgeries with our VergenixFG product. Our goal is to position CollPlant as a

major player in the medical aesthetics market. Additionally, we are pleased to report that during the first quarter of 2019, we

supplied our first material order into the aesthetics market," concluded Mr. Tal.

Quarter 2018 Financial Results

Revenues from the licensing agreement and the

sale of our Bioink, VergenixFG and VergenixSTR products for the fourth quarter of 2018 were $4.2 million (NIS 15.8 million), an

increase of 1,559% compared to $254,000 (NIS 952,000) for the fourth quarter of 2017. Revenues recognized in the fourth quarter

of 2018 are mainly attributable to revenue from the UTHR license agreement in the amount of $4.0 million (NIS 14.7 million).

Gross profit for the fourth quarter of 2018

was $4.0 million (NIS 15.0 million), an increase of 1,567% compared to $240,000 (NIS 900,000) in the fourth quarter of 2017.

Research and development expenses for the fourth

quarter of 2018, net of participations, were $2.5 million (NIS 9.2 million), an increase of 207% compared to $800,000 (NIS 3.0

million) for the fourth quarter of 2017. Research and development expenses, net, for the fourth quarter of 2018 includes royalty

expenses paid to the Israel Innovation Authority (IIA) in connection with the UTHR license agreement, amounting to $1.2 million

General, administrative, and marketing expenses

for the fourth quarter of 2018 were $862,000 (NIS 3.2 million), a decrease of 22% compared to $1.1 million (NIS 4.1 million) for

the fourth quarter of 2017.

Operating income for the fourth quarter of

2018 was $669,000 (NIS 2.5 million), an increase of 140% compared to operating loss of $1.7 million (NIS 6.2 million) for the fourth

The Company posted a comprehensive income of

$1.00 million (NIS 3.8 million), or $0.004 (NIS 0.02) per share, for the fourth quarter of 2018, compared to a net loss

of $1.6 million (NIS 5.9 million), or $0.01 (NIS 0.02) per share, for the fourth quarter of 2017.

Year Ended December 31, 2018 Financial

Revenues from the sale of our Bioink, VergenixFG

and VergenixSTR products in the year ended December 31, 2018 were $4.8 million (NIS 18.0 million), an increase of 959%, compared

to $453,000 (NIS 1.7 million) in the year ended December 31, 2017. Revenues recognized in 2018 are mainly attributable to revenues

from the UTHR license agreement in the amount of $4.0 million (NIS 14.7 million).

Gross profit for 2018 was $4.4 million (NIS

16.6 million), an increase of 938% compared to $427,000 (NIS 1.6 million) for the year ended December 31, 2017.

Research and development expenses for the year

ended December 31, 2018, net of participations, were $5.2 million (NIS 19.4 million), an increase of 38% compared to $3.8 million

(NIS 14.1 million) for the year ended December 31, 2017. Research and development expenses, net, includes royalty expenses paid

to the IIA in connection with the UTHR license agreement, amounting to $1.2 million (NIS 4.7 million).

General, administrative, and marketing expenses

for the year ended December 31, 2018 were $3.3 million (NIS 12.5 million), an increase of 51% compared to $2.2 million (NIS 8.3

million) for the year ended December 31, 2017. Operating loss for the year ended December 31, 2018 was $4.1 million (NIS 15.3 million),

a decrease of 26% compared to $5.5 million (NIS 20.8 million) for the year ended December 31, 2017.

Comprehensive loss was $3.7 million (NIS13.9

million), or $0.02 (NIS 0.06) per share, for the year ended December 31, 2018 compared to a net loss of $5.6 million

(NIS 20.9 million), or $0.05 (NIS 0.16) per share, for the year ended December 31, 2017.

Quarter 2018 Financial Results on Non-IFRS Basis ("non-GAAP")

a non-GAAP basis, the operating costs and expenses for the fourth quarter of 2018 were $3.1 million (NIS 11.8 million), compared

to $1.6 (NIS 6.0 million) for the fourth quarter of 2017. The comprehensive income on a non-GAAP basis for the fourth quarter

of 2018 was $904,000 (NIS 3.4 million), or $0.004 (NIS 0.02) per share, compared to comprehensive loss of $1.3 million (NIS 4.8

million), or $0.01 (NIS 0.04) per share, for the fourth quarter of 2017. Non-GAAP measures exclude certain non-cash expenses.

The table at the end of this press release titled "Reconciliation of GAAP to Non-GAAP Financial Measures" includes

a reconciliation of the Company's GAAP results to non-GAAP results. The net reconciliation reflects non-cash income in the

amount of $104,000 (NIS 309,000) in the fourth quarter of 2018, with respect to (i) change in fair value of financial instruments

and (ii) share-based compensation to employees, directors and consultants.

Ended December 31, 2018 Financial Results on Non-IFRS Basis ("non-GAAP")

a non-GAAP basis, the operating costs and expenses for the year ended December 31, 2018 were $7.2 million (NIS 26.9 million),

compared to $5.3 million (NIS 19.7 million) for the year ended December 31, 2017. The comprehensive income on a non-GAAP

basis for the year ended December 31, 2018 was $2.6 million (NIS 9.7 million), or $0.02 (NIS 0.06) per share, compared to

comprehensive loss of $4.9 million (NIS 18.3 million), or $0.04 (NIS 0.16) per share, for the fourth quarter of 2017. Non-GAAP

measures exclude certain non-cash expenses. The table at the end of this press release titled "Reconciliation of GAAP to

Non-GAAP Financial Measures" includes a reconciliation of the Company's GAAP results to non-GAAP results. The net

reconciliation reflects non-cash expenses in the amount of $1.1 million (NIS 4.1 million) in the year ended December 31,

2018, with respect to (i) fair market value attributed to services received through a securities purchase agreement with an investor

(the "Share Purchase Agreement"), (ii) change in fair value of financial instruments and (iii) remeasurement of liability

to the IIA, and (iv) share-based compensation to employees, directors and consultants.

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

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 Share Purchase Agreement, recognition and amortization 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, and to compare them to historical Company

presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial

information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when operating and

evaluating the Company's business internally and therefore decided to make these non-GAAP adjustments available to investors.

The non-GAAP financial measures used by the Company in this press release may be different from the measures used by other companies.

more information on the non-GAAP financial measures, please see the "Reconciliation of GAAP to Non-GAAP Financial Measures"

table on page 10 in this press release. This accompanying table on page 10 has more details on the GAAP financial measures that

are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.

of December 31, 2018, the Company had cash and cash equivalents of $5.4 million (NIS 20.7 million), compared to

$4.7 million (NIS 17.8 million) as of December 31, 2017. The increase was mainly due to $2.6 million (NIS 9.9 million)

in proceeds generated by financing activities and $4.9 million (NIS 18.4 million) from the UTHR license agreement. The Company

utilized $1.2 million (NIS 4.7 million) in cash to fund its operating activities during 2018.

the convenience of the reader, the amounts have been translated from NIS into U.S. dollars, at the representative rate of exchange

as of December 31, 2018 (U.S. $1 = NIS 3.748).

Company's consolidated financial results for the twelve months ended December 31, 2018 are presented in accordance with International

Financial Reporting Standards.

copy of the Company's annual report on Form 20-F for the year ended December 31, 2018 has been filed with the U.S. Securities

and Exchange Commission at www.sec.gov and posted on the Company's investor relations website at http://ir.check-cap.com/.