Executive Summary

Q3 2022 reflected the company’s transition to a pure clinical-stage model: revenue was $0 as SkinTE sales remain halted pending a future BLA, and IBEX services were divested in April 2022; operating loss narrowed vs. last year on lower OpEx, but GAAP net loss increased year over year on smaller non-cash warrant fair value gains in the quarter .
Liquidity remained adequate for near-term clinical execution with $16.1M cash and cash equivalents and $15.7M working capital at September 30, 2022; quarterly cash used in operations was $4.0M (~~$1.3M/month), an improvement from $4.6M (~~$1.5M/month) in Q3 2021 .
Regulatory path advanced: SkinTE holds RMAT designation; management now estimates completing enrollment of the 100-subject pivotal DFU RCT in H1 2024 (vs. prior expectation of YE 2023), with an interim analysis of the first 50 patients targeted for data in Q4 2023; the change reflects updated enrollment timing, not a change in study design .
No Wall Street consensus estimates from S&P Global were available for Q3 2022 for PTEIQ; therefore, no vs-estimates comparisons could be made (consensus unavailable via S&P Global).

What Went Well and What Went Wrong

What Went Well
- Continued regulatory momentum: SkinTE holds RMAT designation, facilitating expedited FDA dialogue on the BLA path and a second planned multi-center RCT to pursue a broader DFU indication .
- Operating discipline: Operating costs and expenses fell 32% year over year in Q3; monthly operating cash burn improved to ~$1.3M from ~$1.5M last year .
- Management focus: CEO emphasized disciplined expense management and prioritization of milestones to advance the SkinTE program toward a BLA submission: “we will continue to exercise financial discipline and look to reduce operating expenses wherever possible” .
What Went Wrong
- Revenue base fully absent: The company reported $0 revenue in Q3 2022 (SkinTE sales ceased in 2021; IBEX services sold in April 2022), underscoring dependence on external financing and non-operating items for P&L variability .
- Enrollment timing pushed: Target for completing enrollment moved to H1 2024 from YE 2023, extending time to potential pivotal readouts; interim analysis timing communicated for Q4 2023 .
- Volatile non-cash items persist: Quarterly GAAP results remain sensitive to warrant liability remeasurement; Q3 included a $2.0M gain vs. $6.4M in Q3 2021, contributing to year-over-year net loss increase despite much lower OpEx .

Financial Results

Income statement comparison (all figures in USD thousands except per-share). Note: The company reported no revenue in Q3 2022.

Metric	Q3 2021	Q2 2022	Q3 2022
Total Net Revenues ($000)	$1,116	$73	$0
Gross Profit ($000)	$482	$(52)	$0
Operating Loss ($000)	$(7,410)	$(6,730)	$(5,405)
Net Loss ($000)	$(1,021)	$(68)	$(3,400)
GAAP Basic EPS ($)	$(0.31)	$(0.01)	$(0.47)
Non-GAAP Adjusted Net Loss ($000)	$(7,375)	$(6,698)	$(5,384)
Non-GAAP Adjusted EPS (Basic & Diluted) ($)	$(2.27)	$(1.30)	$(0.75)

Segment revenue breakdown

Metric	Q3 2021	Q2 2022	Q3 2022
Products Revenues ($000)	$0	$0	$0
Services Revenues ($000)	$1,116	$73	$0
Total Net Revenues ($000)	$1,116	$73	$0

Liquidity and operating cash flow KPIs

KPI	Q4 2021	Q2 2022	Q3 2022
Cash & Cash Equivalents ($000)	$19,375 (12/31/21)	$20,518 (6/30/22)	$16,094 (9/30/22)
Working Capital	—	$19.4M (6/30/22)	$15.7M (9/30/22)
Cash Used in Operating Activities (Quarter)	—	—	$4.0M (vs. $4.6M in Q3’21)

Notes: Management does not expect operating revenues “for the foreseeable future” until BLA approval; SkinTE sales ceased in May 2021; IBEX services were divested at end of April 2022 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
COVER DFUs Trial – Complete Enrollment (100 subjects)	Study timeline	“By end of calendar year 2023”	“Sometime in the first six months of 2024”	Lowered (slower enrollment)
COVER DFUs Trial – Interim Analysis (first 50 patients)	Data timing	Not previously specified	Data expected Q4 2023	New disclosure
Financial Outlook (Revenue/OpEx/Margins)	2022	No financial guidance provided; revenue-generating activities ceased	No financial guidance provided; no operating revenues expected for the foreseeable future	Maintained stance

Earnings Call Themes & Trends

(Note: No Q3 2022 earnings call transcript was filed; themes reflect management commentary across Q1/Q2 press releases and Q3 press release.)

Topic	Previous Mentions (Q1 2022 and Q2 2022)	Current Period (Q3 2022)	Trend
Regulatory/RMAT/IND	FDA removed clinical hold (Jan 14, 2022); RMAT designation highlighted as enabling expedited FDA dialogue	RMAT reiterated; continued FDA engagement on tasks to support BLA and second multi-center RCT for broader DFU indication	Steady progress
Clinical Enrollment (COVER DFUs)	First subject enrolled; plan to enroll up to 100 subjects; estimate to complete by YE 2023	Completion target updated to H1 2024; interim analysis planned with data in Q4 2023	Slight delay
Operating Expense Discipline	Q1: cash used in ops down 9% YoY; Q2: OpEx -35% YoY for the quarter	Q3: OpEx -32% YoY; monthly cash burn ~$1.3M vs $1.5M LY	Improving
Portfolio Focus (IBEX divestiture)	Announced sale of IBEX and related real estate in April 2022 to focus on SkinTE	Reflects in minimal/absent services revenues; focus on clinical execution	Complete/refocused
Revenue Model	No SkinTE sales post-May 2021; services revenues waning and then divested	No operating revenues expected until BLA approval (3–4 years from 2022 perspective)	Unchanged

Management Commentary

“We remain firmly focused on enrolling our Phase III pivotal study in Wagner 2 DFUs for SkinTE… RMAT designation is reserved for products that FDA believes has the potential to treat, modify, reverse or cure a serious or life threatening condition… we will continue to exercise financial discipline and look to reduce operating expenses wherever possible.” — Richard Hague, President & CEO .
“The RMAT designation we achieved has already benefited us by expediting direct communication with the FDA… This will allow us to prioritize our efforts to advance SkinTE and effectively manage our capital and resources accordingly.” — CEO commentary on Q2 update .

Q&A Highlights

No Q3 2022 earnings call transcript was found in filings; the Q3 press release did not include call details; therefore, no Q&A themes or clarifications are available from management for Q3 2022 [ListDocuments: no earnings-call-transcript found for the period].

Estimates Context

Wall Street consensus from S&P Global: Not available for PTEIQ in Q3 2022; retrieval attempt failed due to missing SPGI/CIQ mapping. As a result, vs-estimates comparisons (revenue, EPS) could not be provided (consensus unavailable via S&P Global).

Key Takeaways for Investors

Execution pivot complete: With SkinTE sales halted and IBEX divested, PTEIQ is now a clinical-stage, single-asset story centered on DFU, with no operating revenue near term .
Regulatory tailwinds: RMAT designation and ongoing FDA engagement help clarify and potentially expedite the BLA path, including plans for a second RCT to support a broader DFU label .
Updated clinical timing: Full enrollment completion moved to H1 2024 from YE 2023; however, the interim analysis (first 50 patients) is now targeted to yield data in Q4 2023, which may serve as an earlier catalyst .
Cost control improving: OpEx declined materially year over year and quarterly cash burn moderated; sustaining this discipline is critical given absent operating revenues .
P&L volatility from non-cash items: Warrant liability remeasurement continues to drive quarter-to-quarter swings in GAAP net loss; investors should focus on non-GAAP adjusted loss to assess underlying burn and runway .
Liquidity watch: $16.1M cash and $15.7M working capital at quarter-end support near-term trial execution; additional capital may be required ahead of pivotal milestones given no revenue generation .
Near-term catalyst path: Interim analysis data for COVER DFUs in Q4 2023 (as communicated) is the key prospective event that could reshape the risk/reward and funding flexibility .

POLARITYTE, INC. (PTEIQ)·Q3 2022 Earnings Summary