Executive Summary

Q2 2022 was a transitional quarter with de minimis revenue ($0.07M) as the company has ceased commercial activity; GAAP net loss narrowed to $(0.07)M driven by a $6.63M non‑cash gain from warrant liability remeasurement; cash was $20.5M at quarter-end .
Strategic/regulatory execution advanced: FDA granted RMAT designation for SkinTE and the Phase III COVER DFUs pivotal trial began enrolling in May; management plans a second RCT to support a BLA in DFUs .
Portfolio and balance sheet actions: divested IBEX preclinical services and real estate in April; completed an $8.0M registered direct/private placement in June; effected a 1‑for‑25 reverse split in May to maintain Nasdaq compliance .
Outlook: management does not expect operating revenues “for the foreseeable future” and guided to no services revenue in 2H22; enrollment for up to 100 patients in COVER DFUs is estimated to complete by end of 2023 .
Potential stock catalysts: COVER DFUs enrollment cadence and interim site adds , RMAT-enabled FDA interactions on development/manufacturing plans , and funding runway following the June financing .

What Went Well and What Went Wrong

What Went Well
- RMAT designation accelerated FDA dialogue on milestones to efficiently advance SkinTE; CEO: “RMAT designation…has provided important guidance on the milestones we need to achieve to efficiently advance our development program for SkinTE” .
- Execution on pivotal program: first subject enrolled in COVER DFUs in May; trial targets up to 100 subjects across up to 20 U.S. sites .
- Cost discipline: operating costs fell 35% YoY in Q2; R&D down 27% YoY for the quarter; G&A down 28% YoY for the quarter .
What Went Wrong
- Revenue base effectively eliminated: Q2 total net revenue fell to $0.07M (from $2.54M YoY) as commercial SkinTE sales ceased and IBEX was sold; gross profit turned to a $(0.05)M loss .
- Visibility: company “does not expect to generate operating revenues…for the foreseeable future” and expects no services revenue in 2H22, heightening reliance on external financing .
- Listing/structure actions highlight pressure: required a 1‑for‑25 reverse stock split to satisfy Nasdaq minimum bid price and obligations under prior financing .

Financial Results

Metric	Q2 2021	Q1 2022	Q2 2022
Revenue ($USD Thousands)	$2,537	$741	$73
Gross Profit ($USD Thousands)	$1,613	$250	$(52)
Gross Margin %	63.6%	33.8%	(71.2%)
Operating Loss ($USD Thousands)	$(8,628)	$(8,873)	$(6,730)
Net Loss ($USD Thousands)	$(3,188)	$(3,771)	$(68)
Diluted EPS ($)	$(1.01)	$(0.09)	$(0.49)
Basic EPS ($)	$(0.99)	$(0.04)	$(0.01)

Segment breakdown

Metric	Q2 2021	Q1 2022	Q2 2022
Product Revenue ($USD Thousands)	$1,195	$0	$0
Services Revenue ($USD Thousands)	$1,342	$741	$73

KPIs and Opex

Metric	Q2 2021	Q1 2022	Q2 2022
R&D Expense ($USD Thousands)	$4,190	$2,860	$3,078
G&A Expense ($USD Thousands)	$4,941	$6,209	$3,562
Cash & Equivalents (period-end, $USD Thousands)	n/a	$18,723	$20,518
Working Capital ($USD Millions)	n/a	$17.2	$19.4
Warrant Liability (period-end, $USD Thousands)	n/a	$4,868	$4,222

Non-GAAP (as reported)

Metric	Q2 2021	Q2 2022 YTD	Q2 2022
Adjusted Net Loss ($USD Thousands)	$(4,995)	$(15,574)	$(6,698)
Adjusted EPS Basic/Diluted ($)	$(1.55)	$(4.20)	$(1.30)

Notes: Net loss improvement in Q2 2022 was primarily due to a $6.63M non‑cash gain from change in fair value of warrant liability .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Operating Revenues	“Foreseeable future”	n/a	Do not expect operating revenues for the foreseeable future	Lowered/withdrawn commercial outlook
Services Net Revenues	2H 2022	n/a	Do not expect any services net revenues in 2H22	Lowered
COVER DFUs Enrollment Target	Through end-2023	n/a	Estimate completion of enrollment (100 subjects) by end of CY2023	New operational target
Development Path (DFUs)	Pre‑BLA plan	n/a	Plan a second multicenter RCT to support DFU BLA; further FDA engagement under RMAT	New development plan clarity

No quantitative revenue/EPS margin guidance was provided.

Earnings Call Themes & Trends

(Transcript not available in corpus; themes derived from company press materials)

Topic	Previous Mentions (Q4 2021)	Previous Mentions (Q1 2022)	Current Period (Q2 2022)	Trend
Regulatory/IND Status	IND accepted; preparing to treat first patients in pivotal study	RMAT designation granted; IND active; first subject enrolled in Phase III	RMAT enables expedited FDA dialogue; planning a second RCT to support DFU BLA	Positive momentum, deeper FDA engagement
R&D Execution (COVER DFUs)	Expect up to 16 sites operational by end of May 2022	First subject enrolled; 100-subject plan reiterated	Estimate enrollment completion by end‑2023	Execution milestone set; long enrollment runway
Commercial/Revenue Outlook	2021 operating loss improved; ceased SkinTE sales in 2021	No product revenue; services to be nominal in Q2 and absent in 2H22	No operating revenues foreseeable; no services revenue in 2H22	Diminishing revenue base
Corporate/Capital Actions	Cash $19.4M; substantial doubt about going concern noted for FY21	Sold IBEX/real estate; Q1 cash $18.7M; reverse split authorized	$8.0M financing completed; cash $20.5M; reverse split effected	Added liquidity, addressed listing
Manufacturing/CMC	Resolved CMC issues noted by FDA (prior period)	Planning manufacturing strategy discussions under RMAT	RMAT-enabled expedited manufacturing development dialogue	Advancing

Management Commentary

“The RMAT designation we achieved has already benefited us by expediting direct communication with the FDA, which has provided important guidance on the milestones we need to achieve to efficiently advance our development program for SkinTE…” — Richard Hague, CEO .
“FDA granting our request for an RMAT designation for SkinTE validates…preliminary clinical evidence…We…look forward to…a multidisciplinary, comprehensive discussion…including planned clinical trials and…expediting the manufacturing development strategy.” — Richard Hague, CEO .
“Enrolling our first subject in a pivotal study under an FDA‑accepted IND is a critical milestone…we are…to see SkinTE return to the clinic.” — Richard Hague, CEO (COVER DFUs launch) .

Q&A Highlights

The Q2 2022 earnings call transcript was not available in the document corpus; the press release provided webcast access details but no transcript text, so Q&A details and tone shifts cannot be assessed from primary sources .

Estimates Context

Wall Street consensus (S&P Global) for PTEIQ Q2 2022 revenue/EPS and FY22 was unavailable in our S&P Global feed for this ticker at the time of analysis; therefore, we cannot provide beat/miss comparisons to consensus for this quarter. Consensus unavailable from S&P Global.

Key Takeaways for Investors

The investment case is now binary around clinical/regulatory execution: RMAT plus an active Phase III in DFUs de‑risks timelines and process but commercial revenue is unlikely before a BLA approval (management suggests 3–4 years) .
Revenue headwinds persist by design: no commercial activity and no services revenue expected in 2H22; financial updates will be driven by opex pace and non‑cash warrant revaluations rather than top line .
Liquidity: $20.5M cash at 6/30/22, supplemented by an $8.0M June raise; continued access to capital remains important as the pivotal program progresses .
Cost structure is tightening: Q2 operating costs fell 35% YoY; watch R&D step‑ups as sites and enrollment scale in COVER DFUs .
Catalysts: enrollment milestones, potential interim operational updates under RMAT guidance, and clarity on a planned second RCT to support the DFU BLA .
Structural actions completed: reverse split achieved Nasdaq compliance and financing covenants; reduces headline risk tied to listing status .
Non‑GAAP optics: sizable quarter‑to‑quarter swings in GAAP loss can occur from warrant liability remeasurement; use adjusted loss metrics to track operating burn trajectory .

Supporting details and sources:

Q2 2022 press release financials, cash, and RMAT/clinical updates .
Q1 2022 press release for sequential comparisons and liquidity commentary .
FY 2021 press release for baseline context and prior‑period regulatory updates .
RMAT designation announcement .
COVER DFUs first subject enrolled .
June 2022 $8.0M financing .
Reverse stock split and rationale .

POLARITYTE, INC. (PTEIQ)·Q2 2022 Earnings Summary