Full Press Release Details
Pulse Biosciences Reports Second Quarter 2021 Financial Results
HAYWARD, Calif. [Business Wire] August 9, 2021 Pulse Biosciences, Inc. (Nasdaq: PLSE), a novel bioelectric medicine company commercializing the CellFX System powered by Nano-Pulse Stimulation (NPS ) technology, today announced financial results for the second quarter of 2021.
We are pleased with the progress across the business in the second quarter. We onboarded a significant number of controlled launch participant clinics, including in Canada following the achievement of Health Canada approval for the CellFX System and continued to make progress on our clinical initiatives intended to broaden the CellFX System's applications in aesthetic dermatology and beyond, said Darrin Uecker, President and CEO of Pulse Biosciences. With this progress and anticipated ongoing commercial conversions of controlled launch participants, we are well positioned to drive growth through increased adoption of CellFX procedures. We look forward to a broader commercial launch late in the year and toward delivering the benefits of NPS technology to more patients and clinicians.
Second Quarter 2021 Results
Cash, cash equivalents and investments totaled $47.4 million as of June 30, 2021 compared to $59.9 million as of March 31, 2021. The cash balance as of June 30, 2021 excludes approximately $8.4 million of private placement proceeds received in July 2021. Cash used in the second quarter of 2021 totaled $15.0 million excluding net proceeds received under the Company's ATM program. Cash used in the second quarter of 2021 included the payment of $2.5 million to Mr. Duggan in accordance with the with terms of the May 2020 Letter Agreement whereby Mr. Duggan provided indemnity coverage on substantially the same terms as the Company's prior director and officer liability insurance program. This compares with $7.9 million used in the same period in the prior year and $10.7 million used in the first quarter of 2021.
GAAP operating expenses for the three months ended June 30, 2021 were $14.8 million, compared to $11.4 million for the prior year period. Non-GAAP operating expenses for the second quarter were $12.1 million, compared to $8.7 million for the same period in the prior year. The year-over-year increase in operating expenses was primarily driven by the expansion of commercial and operational infrastructure, including increased headcount, to support commercialization activities.
GAAP net loss for the three months ended June 30, 2021, was ($15.3) million compared to ($11.3) million for the three months ended June 30, 2020. Non-GAAP net loss for the three months ended June 30, 2021, was ($12.6) million compared to ($8.6) million for the three months ended June 30, 2020.
Reconciliations of GAAP to non-GAAP operating expenses and net loss have been provided in the tables following the financial statements in this press release. An explanation of these measures is also included below under the heading Non-GAAP Financial Measures.
The COVID-19 pandemic had minimal impact on the Company's operations in the second quarter of 2021. Product development, execution of clinical trials, regulatory timelines and Controlled Launch have not been materially affected at this time. However, due to the uncertain scope and duration of the pandemic, future impact to the Company's operations and financial results, if any, cannot be reasonably estimated.
Webcast and Conference Call Information
Pulse Biosciences' management will host a conference call today, August 9, 2021 beginning at 1:30pm PT. Investors interested in listening to the conference call may do so by dialing 1-877-705-6003 for domestic callers or 1-201-493-6725 for international callers. A live and recorded webcast of the event will be available at http://investors.pulsebiosciences.com/.
About Pulse Biosciences
Pulse Biosciences is a novel bioelectric medicine company committed to health innovation that has the potential to improve the quality of life for patients. The Company's proprietary Nano-Pulse Stimulation technology delivers nano-second pulses of electrical energy to non-thermally clear cells while sparing adjacent non-cellular tissue. The CellFX System is the first commercial product to harness the distinctive advantages of NPS technology to treat a variety of applications for which an optimal solution remains unfulfilled. The initial commercial use of the CellFX System is to address a range of dermatologic conditions that share high demand among patients and practitioners for improved dermatologic outcomes. Designed as a multi-application platform, the CellFX System offers customer value with a utilization-based revenue model. Visit pulsebiosciences.com to learn more.
To stay informed about the CellFX System, please visit CellFX.com and sign-up for updates.
Pulse Biosciences, CellFX, Nano-Pulse Stimulation, NPS and the stylized logos are among the trademarks and/or registered trademarks of Pulse Biosciences, Inc. in the United States and other countries.
Non-GAAP Financial Measures
In this press release, in order to supplement the Company's condensed consolidated financial statements presented in accordance with Generally Accepted Accounting Principles, or GAAP, management has disclosed certain non-GAAP financial measures for the statement of operations. The Company believes that an evaluation of its ongoing operations (and comparisons of its current operations with historical and future operations) would be difficult if the disclosure of its financial results were limited to financial measures prepared in accordance with GAAP. As a result, the Company is disclosing certain non-GAAP results in order to supplement investors' and other readers' understanding and assessment of the Company's financial performance. Company management uses these measurements as aids in monitoring the Company's ongoing financial performance from quarter to quarter, and year to year, on a regular basis and for financial and operational decision-making. Non-GAAP adjustments include stock-based compensation, depreciation and amortization. From time to time in the future, there may be other items that the Company may exclude if the Company believes that doing so is consistent with the goal of providing useful information to management and investors. The Company has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. Investors are cautioned that there are a number of limitations associated with the use of non-GAAP financial measures as analytical tools. Investors are encouraged to review these reconciliations, and not to rely on any single financial measure to evaluate the Company's business.
Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies, which could reduce the usefulness of the Company's non-GAAP financial measures as tools for comparison. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most directly comparable GAAP measures set forth below and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP. Non-GAAP financial measures in this earnings release exclude the following:
Non-cash expenses for stock-based compensation. The Company has excluded the effect of stock-based compensation expenses in calculating the Company's non-GAAP operating expenses and net loss measures. Although stock-based compensation is a key incentive offered to employees, the Company continues to evaluate its business performance excluding stock-based compensation expenses. The Company records stock-based compensation expense related to grants of performance and time-based options. Depending upon the size, timing and terms of the grants, as well as the probability of achievement of performance-based awards, this expense may vary significantly but will recur in future periods. The Company believes that excluding stock-based compensation better allows for comparisons from period to period.
Depreciation and amortization. The Company has excluded depreciation and amortization expense in calculating its non-GAAP operating expenses and net loss measures. Depreciation and amortization are non-cash charges to current operations.
Forward-Looking Statements
All statements in this press release that are not historical are forward-looking statements, including, among other things, statements relating to Pulse Biosciences' expectations regarding the benefits of the Company's Controlled Launch program and commercialization of the CellFX System to drive growth, including the timing for onboarding KOLs, broader commercial launch and future regulatory clearances, statements relating to the effectiveness of the Company's NPS technology and the CellFX System to improve patient outcomes, statements relating to the Company's current and planned future clinical studies, the timing for completion of such studies, and the ability of the Company to execute such studies, as well as the anticipated results of any such studies, statements relating to the Company's pipeline of product candidates, market opportunities and commercial launch plans, including the market for aesthetic dermatologic procedures, and statements relating to the impact of COVID-19 and other future events. These statements are not historical facts but rather are based on Pulse Biosciences' current expectations, estimates, and projections regarding Pulse Biosciences' business, operations and other similar or related factors. Words such as may, will, could, would, should, anticipate, predict, potential, continue, expects, intends, plans, projects, believes, estimates, and other similar or related expressions are used to identify these forward-looking statements, although not all forward-looking statements contain these words. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and assumptions that are difficult or impossible to predict and, in some cases, beyond Pulse Biosciences' control. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in Pulse Biosciences' filings with the Securities and Exchange Commission. Pulse Biosciences undertakes no obligation to revise or update information in this release to reflect events or circumstances in the future, even if new information becomes available.
Sandra Gardiner, EVP and CFO
PULSE BIOSCIENCES, INC.
Condensed Consolidated Balance Sheets
(In thousands, except par value)
| June 3 0 , | December 31, | |||||
| 2021 | 2020 | |||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 47,426 | $ | 12,463 | ||
| Investments | 8,012 | |||||
| Inventory | 2,691 | |||||
| Related party other receivable | 8,371 | |||||
| Prepaid expenses and other current assets | 3,267 | 1,864 | ||||
| Total current assets | 61,755 | 22,339 | ||||
| Property and equipment, net | 2,460 | 2,478 | ||||
| Intangible assets, net | 3,549 | 3,882 | ||||
| Goodwill | 2,791 | 2,791 | ||||
| Right-of-use assets | 9,119 | 9,438 | ||||
| Other assets | 365 | 365 | ||||
| Total assets | $ | 80,039 | $ | 41,293 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 2,823 | $ | 1,717 | ||
| Accrued expenses | 4,572 | 5,326 | ||||
| Lease liability, current | 719 | 542 | ||||
| N ote payable, current | 1,730 | |||||
| Total current liabilities | 9,844 | 7,585 | ||||
| Lease liability, less current | 10,445 | 10,814 | ||||
| Total liabilities | 20,289 | 18,399 | ||||
| Stockholders' equity: | ||||||
| Preferred stock, $0.001 par value; authorized 50,000 shares; no shares issued and outstanding | ||||||
| Common stock, $0.001 par value: authorized 500,000 shares; issued and outstanding 2 9 , 606 shares and 2 5 , 550 shares at June 3 0 , 202 1 and December 31, 20 20 , respectively | 29 | 25 | ||||
| Additional paid-in capital | 266,223 | 195,410 | ||||
| Accumulated other comprehensive income (loss) | (1) | |||||
| Accumulated deficit | (206,502) | (172,540) | ||||
| Total stockholders' equity | 59,750 | 22,894 | ||||
| Total liabilities and stockholders' equity | $ | 80,039 | $ | 41,293 |
PULSE BIOSCIENCES, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except per share data)
| Three-Month Periods Ended | Six-Month Periods Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2021 | 2020 * | 2021 | 2020 * | |||||||||
| Revenue | $ | $ | $ | $ | ||||||||
| Operating expenses: | ||||||||||||
| Research and development | 7,459 | 5,870 | 16,522 | 12,051 | ||||||||
| Sales and marketing | 3,147 | 1,485 | 7,293 | 3,180 | ||||||||
| General and administrative | 4,200 | 3,999 | 9,516 | 8,073 | ||||||||
| Total operating expenses | 14,806 | 11,354 | 33,331 | 23,304 | ||||||||
| Other income (expense): | ||||||||||||
| Interest income (expense), net | (517) | 21 | (631) | 99 | ||||||||
| Total other income (expense) | (517) | 21 | (631) | 99 | ||||||||
| Net loss | (15,323) | (11,333) | (33,962) | (23,205) | ||||||||
| Other comprehensive loss: | ||||||||||||
| Unrealized gain (loss) on available-for-sale securities | (17) | 1 | (4) | |||||||||
| Comprehensive loss | $ | (15,323) | $ | (11,350) | $ | (33,961) | $ | (23,209) | ||||
| Net loss per share: | ||||||||||||
| Basic and diluted net loss per share | $ | (0.58) | $ | (0.53) | $ | (1.29) | $ | (1.10) | ||||
| Weighted average shares used to compute net loss per common share basic and diluted | 26,477 | 21,528 | 26,276 | 21,183 |
*Certain 2020 amounts have been reclassified to conform to the current period presentation. Sales and marketing expenses have been reclassified out of general and administrative and presented as a separate line item. Amortization of intangible assets have been reclassified to general and administrative expenses.
| Three-Month Periods Ended | Six-Month Periods Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| Stock Based Compensation Expense: | 2021 | 2020* | 2021 | 2020* | ||||||||
| Research and development | $ | 1,002 | $ | 897 | $ | 4,168 | $ | 1,774 | ||||
| Sales and marketing | 500 | 280 | 2,261 | 590 | ||||||||
| General and administrative | 946 | 1,235 | 2,984 | 2,674 | ||||||||
| Total stock-based compensation expense | $ | 2,448 | $ | 2,412 | $ | 9,413 | $ | 5,038 |
Reconciliation of GAAP to Non-GAAP Financial Measures
The following table presents the reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures:
| Three Months Ended | Six Months Ended | ||||||||||
| June 30, | June 30, | ||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||
| Reconciliation of GAAP to non-GAAP Research and development: | |||||||||||
| GAAP Research and development | $ | 7,459 | $ | 5,870 | $ | 16,522 | $ | 12,051 | |||
| Less: Stock-based compensation expense | (1,002) | (897) | (4,168) | (1,774) | |||||||
| Less: Depreciation and amortization | (41) | (41) | (80) | (82) | |||||||
| Non-GAAP Research and development | $ | 6,416 | $ | 4,932 | $ | 12,274 | $ | 10,195 | |||
| Reconciliation of GAAP to non-GAAP Sales and marketing: | |||||||||||
| GAAP Sales and Marketing | $ | 3,147 | $ | 1,485 | $ | 7,293 | $ | 3,180 | |||
| Less: Stock-based compensation expense | (500) | (280) | (2,261) | (590) | |||||||
| Non-GAAP Sales and marketing | $ | 2,647 | $ | 1,205 | $ | 5,032 | $ | 2,590 | |||
| Reconciliation of GAAP to non-GAAP General and administrative: | |||||||||||
| GAAP General and administrative | $ | 4,200 | $ | 3,999 | $ | 9,516 | $ | 8,073 | |||
| Less: Stock-based compensation expense | (946) | (1,234) | (2,984) | (2,673) | |||||||
| Less: Depreciation and amortization | (241) | (234) | (481) | (463) | |||||||
| Non-GAAP General and administrative | $ | 3,013 | $ | 2,531 | $ | 6,051 | $ | 4,937 | |||
| Reconciliation of GAAP to non-GAAP Operating expenses: | |||||||||||
| GAAP Operating expenses | $ | 14,806 | $ | 11,354 | $ | 33,331 | $ | 23,304 | |||
| Less: Stock-based compensation expense | (2,448) | (2,411) | (9,413) | (5,037) | |||||||
| Less: Depreciation and amortization | (282) | (275) | (561) | (545) | |||||||
| Non-GAAP Operating expenses | $ | 12,076 | $ | 8,668 | $ | 23,357 | $ | 17,722 | |||
| Reconciliation of GAAP to non-GAAP Net loss: | |||||||||||
| GAAP Net loss | $ | (15,323) | $ | (11,333) | $ | (33,962) | $ | (23,205) | |||
| Add: Stock-based compensation expense | 2,448 | 2,411 | 9,413 | 5,037 | |||||||
| Add: Depreciation and amortization | 282 | 275 | 561 | 545 | |||||||
| Non-GAAP Net loss | $ | (12,593) | $ | (8,647) | $ | (23,988) | $ | (17,623) |