Full Press Release Details
Pulse Biosciences Reports Third Quarter 2022 Financial Results
HAYWARD, Calif. [Business Wire] November 10, 2022 Pulse Biosciences, Inc. (Nasdaq: PLSE), a novel bioelectric medicine company and creator of the unique CellFX System which harnesses and effectively controls the application of Nano-Pulse Stimulation (NPS ) to human cells and tissue for ablation in multiple therapeutic conditions, today announced financial results for the third quarter ended September 30, 2022.
Third Quarter 2022 Results
There was no revenue recognized in the third quarter of 2022. Total GAAP cost and expenses representing cost of revenues, research and development, sales and marketing, and general and administrative expenses for the three months ended September 30, 2022 were $18.0 million, compared to $14.8 million for the prior year period. Cost of revenues in the third quarter of 2022 includes a $7.2 million inventory reserve related to the dermatology business. Non-GAAP cost and expenses for the three months ended September 30, 2022 were $16.8 million, compared to $13.0 million for the prior year period.
GAAP net loss for the three months ended September 30, 2022 was ($18.0) million compared to ($14.3) million for the three months ended September 30, 2021. Non-GAAP net loss for the three months ended September 30, 2022 was ($16.8) million compared to ($12.4) million for the three months ended September 30, 2021.
Cash and cash equivalents totaled $69.2 million as of September 30, 2022 compared to $28.6 million as of December 31, 2021 and $14.8 million as of June 30, 2022. Cash used in the third quarter of 2022 totaled $10.6 million. This compares to $13.8 million used in the same period in the prior year and $12.8 million used in the second quarter of 2022.
Reconciliations of GAAP to non-GAAP cost and 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.
Webcast and Conference Call Information
Pulse Biosciences' management will host a conference call today, November 10, 2022, beginning at 1:30pm PT. Investors interested in listening to the conference call may do so by dialing 1-877-704-4453 for domestic callers or 1-201-389-0920 for international callers. A live and recorded webcast of the event will be available at https://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 (NPS) 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 conditions for which an optimal solution remains unfulfilled.
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 and restructuring charges. 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 cost and 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 cost and expenses and net loss measures. Depreciation and amortization are non-cash charges to current operations.
Restructuring charges. The Company has excluded restructuring charges in calculating its non-GAAP cost and expenses and net loss measures. Restructuring programs involve discrete initiatives designed to improve operating efficiencies and include employee termination, contract termination, and other exit costs associated with the restructuring program. The Company believes that excluding discrete restructuring charges allows for better comparisons from period to period.
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 Company's activities to develop and commercialize NPS technology to drive growth, such as statements about market opportunities in cardiology to treat atrial fibrillation and in other medical specialties, statements about the Company's prospects for successfully using NPS technology in cardiology, statements relating to the possible safety and effectiveness of the Company's NPS technology and the CellFX System for cardiac ablation, statements about the Company's team being well positioned to pursue valuable opportunities for the CellFX System in cardiology, statements about the Company's prospect for partnering with one or more other companies to commercialize the CellFX System in dermatology, and other future events. These forward-looking 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.
Kevin Danahy, President and CEO
PULSE BIOSCIENCES, INC.
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
| September 3 0 , | December 31, | |||||
| 202 2 | 202 1 | |||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 69,162 | $ | 28,614 | ||
| Accounts Receivable | 5 | 61 | ||||
| Inventory , net | 750 | 5,824 | ||||
| Prepaid expenses and other current assets | 1,244 | 2,131 | ||||
| Total current assets | 71,161 | 36,630 | ||||
| Property and equipment, net | 2,286 | 2,462 | ||||
| Intangible assets, net | 2,717 | 3,216 | ||||
| Goodwill | 2,791 | 2,791 | ||||
| Right-of-use assets | 8,250 | 8,785 | ||||
| Other assets | 365 | 365 | ||||
| Total assets | $ | 87,570 | $ | 54,249 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 2,022 | $ | 2,904 | ||
| Accrued expenses | 3,982 | 4,389 | ||||
| Deferred revenue | 38 | 16 | ||||
| Lease liability, current | 858 | 774 | ||||
| N ote payable, current | 436 | |||||
| Related party note payable, current | 98 | |||||
| Total current liabilities | 6,998 | 8,519 | ||||
| Lease liability, less current | 9,383 | 10,040 | ||||
| Related party note payable, less current | 65,000 | |||||
| Total liabilities | 81,381 | 18,559 | ||||
| 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 37 , 228 shares and 2 9 , 716 shares at September 30, 202 2 and December 31, 202 1 , respectively | 37 | 29 | ||||
| Additional paid-in capital | 291,660 | 271,861 | ||||
| Accumulated other comprehensive income (loss) | ||||||
| Accumulated deficit | (285,508) | (236,200) | ||||
| Total stockholders' equity | 6,189 | 35,690 | ||||
| Total liabilities and stockholders' equity | $ | 87,570 | $ | 54,249 |
PULSE BIOSCIENCES, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except per share amounts)
| Three-Month Periods Ended | Nine -Month Periods Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 202 2 | 202 1 | 202 2 | 202 1 | |||||||||
| Revenues: | ||||||||||||
| Product revenues | $ | $ | 574 | $ | 709 | $ | 574 | |||||
| Total revenues | 574 | 709 | 574 | |||||||||
| Cost and expenses: | ||||||||||||
| Cost of revenues | 8,400 | 727 | 10,653 | 727 | ||||||||
| Research and development | 4,517 | 6,460 | 16,744 | 22,982 | ||||||||
| Sales and marketing | 2,020 | 3,404 | 11,251 | 10,697 | ||||||||
| General and administrative | 3,088 | 4,256 | 11,373 | 13,772 | ||||||||
| Total cost and expenses | 18,025 | 14,847 | 50,021 | 48,178 | ||||||||
| Loss from operations | (18,025) | (14,273) | (49,312) | (47,604) | ||||||||
| Other income (expense): | ||||||||||||
| Interest income (expense), net | (14) | (9) | 4 | (640) | ||||||||
| Total other income (expense) | (14) | (9) | 4 | (640) | ||||||||
| Net loss | (18,039) | (14,282) | (49,308) | (48,244) | ||||||||
| Other comprehensive loss: | ||||||||||||
| Unrealized gain on available-for-sale securities | 1 | |||||||||||
| Comprehensive loss | $ | (18,039) | $ | (14,282) | $ | (49,308) | $ | (48,243) | ||||
| Net loss per share: | ||||||||||||
| Basic and diluted net loss per share | $ | (0.49) | $ | (0.48) | $ | (1.50) | $ | (1.76) | ||||
| Weighted average shares used to compute net loss per common share basic and diluted | 37,158 | 29,612 | 32,825 | 27,400 |
| Three-Month Periods Ended | Nine -Month Periods Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| Stock Based Compensation Expense: | 202 2 | 202 1 | 202 2 | 202 1 | ||||||||
| Cost of revenues | $ | 24 | $ | 37 | $ | 204 | $ | 37 | ||||
| Research and development | 287 | 418 | 1,240 | 4,586 | ||||||||
| Sales and marketing | (44) | 65 | 772 | 2,326 | ||||||||
| General and administrative | 456 | 1,057 | 2,227 | 4,041 | ||||||||
| Total stock-based compensation expense | $ | 723 | $ | 1,577 | $ | 4,443 | $ | 10,990 |
| PULSE BIOSCIENCES, INC. | |||||||||||||||||||
| Consolidated Revenue Financial Highlights | |||||||||||||||||||
| (In thousands) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three-Month Periods Ended | Nine -Month Periods Ended | ||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
| Revenue by category: | |||||||||||||||||||
| Systems | $ | 0% | $ | 490 | 85% | $ | 576 | 81% | $ | 490 | 85% | ||||||||
| Cycle units | 0% | 84 | 15% | 133 | 19% | 84 | 15% | ||||||||||||
| Total revenue | $ | 0% | $ | 574 | 100% | $ | 709 | 100% | $ | 574 | 100% | ||||||||
| Revenue by geography: | |||||||||||||||||||
| North America | $ | 0% | $ | 405 | 71% | $ | 526 | 74% | $ | 405 | 71% | ||||||||
| Rest of World | 0% | 169 | 29% | 183 | 26% | 169 | 29% | ||||||||||||
| Total revenue | $ | 0% | $ | 574 | 100% | $ | 709 | 100% | $ | 574 | 100% |
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 - Month Periods Ended | Nine- Month Periods Ended | ||||||||||
| September 30, | September 30, | ||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||
| Reconciliation of GAAP to non-GAAP Cost of revenues: | |||||||||||
| GAAP Cost of revenues | $ | 8,400 | $ | 727 | $ | 10,653 | $ | 727 | |||
| Less: Stock-based compensation expense | (24) | (37) | (204) | (37) | |||||||
| Less: Depreciation and amortization | (5) | (3) | (14) | (3) | |||||||
| Less: Restructuring | (27) | (43) | |||||||||
| Non-GAAP Cost of revenues | $ | 8,344 | $ | 687 | $ | 10,392 | $ | 687 | |||
| Reconciliation of GAAP to non-GAAP Research and development: | |||||||||||
| GAAP Research and development | $ | 4,517 | $ | 6,460 | $ | 16,744 | $ | 22,982 | |||
| Less: Stock-based compensation expense | (287) | (418) | (1,240) | (4,586) | |||||||
| Less: Depreciation and amortization | (75) | (43) | (203) | (123) | |||||||
| Less: Restructuring | (54) | (177) | |||||||||
| Non-GAAP Research and development | $ | 4,101 | $ | 5,999 | $ | 15,124 | $ | 18,273 | |||
| Reconciliation of GAAP to non-GAAP Sales and marketing: | |||||||||||
| GAAP Sales and Marketing | $ | 2,020 | $ | 3,404 | $ | 11,251 | $ | 10,697 | |||
| Less: Stock-based compensation expense | 44 | (65) | (772) | (2,326) | |||||||
| Less: Depreciation and amortization | (15) | (43) | |||||||||
| Less: Restructuring | (95) | (598) | |||||||||
| Non-GAAP Sales and marketing | $ | 1,954 | $ | 3,339 | $ | 9,838 | $ | 8,371 | |||
| Reconciliation of GAAP to non-GAAP General and administrative: | |||||||||||
| GAAP General and administrative | $ | 3,088 | $ | 4,256 | $ | 11,373 | $ | 13,772 | |||
| Less: Stock-based compensation expense | (456) | (1,057) | (2,227) | (4,041) | |||||||
| Less: Depreciation and amortization | (244) | (241) | (758) | (722) | |||||||
| Less: Restructuring | (22) | (60) | |||||||||
| Non-GAAP General and administrative | $ | 2,366 | $ | 2,958 | $ | 8,328 | $ | 9,009 | |||
| Reconciliation of GAAP to non-GAAP Cost and expenses: | |||||||||||
| GAAP Cost and expenses | $ | 18,025 | $ | 14,847 | $ | 50,021 | $ | 48,178 | |||
| Less: Stock-based compensation expense | (723) | (1,577) | (4,443) | (10,990) | |||||||
| Less: Depreciation and amortization | (339) | (287) | (1,018) | (848) | |||||||
| Less: Restructuring | (198) | (878) | |||||||||
| Non-GAAP Cost and expenses | $ | 16,765 | $ | 12,983 | $ | 43,682 | $ | 36,340 | |||
| Reconciliation of GAAP to non-GAAP Net loss: | |||||||||||
| GAAP Net loss | $ | (18,039) | $ | (14,282) | $ | (49,308) | $ | (48,244) | |||
| Add: Stock-based compensation expense | 723 | 1,577 | 4,443 | 10,990 | |||||||
| Add: Depreciation and amortization | 339 | 287 | 1,018 | 848 | |||||||
| Add: Restructuring | 198 | 878 | |||||||||
| Non-GAAP Net loss | $ | (16,779) | $ | (12,418) | $ | (42,969) | $ | (36,406) |