SAN DIEGO, Nov. 16, 2012 /PRNewswire/ -- Organovo Holdings, Inc. (OTCQX: ONVO) ("Organovo") a three-dimensional biology company focused on delivering breakthrough 3D bioprinting technology, has reported on its financial results for the three and nine month period ended September 30, 2012.
Third Quarter Corporate Highlights
Third quarter 2012 revenues increased by $237,300 or approximately 102% over the same period in 2011, commensurate with the Company's continued delivery against collaborative research agreements and the initiation of research activities within the scope of a grant from the National Institutes of Health ("NIH"). Collaborative research agreement revenues contributed $141,800 or 60% of the revenue increase while grant revenues contributed $95,500.
Cash receipts related to the reported revenues partially offset the Company's operating expenses and strengthened our balance sheet. During the quarter the balance sheet was additionally strengthened through the receipt of approximately $1.7 million in capital from warrant and stock option exercises. The Company had approximately $7.7 million cash on hand at the end of the quarter. While the Company reported net earnings of approximately $38.5 million for the quarter, investors should note those earnings were primarily the result of a non-cash adjustment resulting from the change in fair value of our warrant liabilities. The warrant liability is volatile in nature and is driven primarily by changes in the price of our Common stock, absent material changes in the number of warrants outstanding. Investors should anticipate swings in that fair value will continue to impact reported earnings and losses.
On July 9, 2012, Organovo announced the receipt of two issued patents. The patents consisted of the issuance in the United States of a patent to which the Company owns the exclusive license from the University of Missouri, and the issuance in the United Kingdom of the Company's first assigned patent.
On July 9, 2012, Organovo announced the appointment of James T. Glover, former CFO of Beckman Coulter and Anadys Pharmaceuticals, to its Board of Directors. Mr. Glover has been affirmed as an independent director by the Organovo Board of Directors, and the Company expects to recruit additional independent directors in the future to meet the Board independence requirements of both NASDAQ and NYSE.
On July 17, 2012, Organovo announced the commencement of operations at its new, larger facility in San Diego, California. The increased capacity will facilitate execution of planned research, product development, and commercial initiatives. The new facility has three times the laboratory space and approximately four times the cleanroom space of our prior facility and is expected to provide adequate capacity for our immediate and near-term needs including product manufacturing.
At September 30, 2012, the Company employed twenty-six full-time employees and six part-time employees, including twenty-four individuals in research and development, an increase over second quarter employment by four full-time and two part-time employees.
"Organovo has continued to execute its business plan and has grown substantially in 2012," stated Keith Murphy, chief executive officer of Organovo. "As a result we are better positioned to deliver on 3D bioprinted liver, new tissue-based disease models, and future partnership opportunities. We believe all of these efforts will continue to grow shareholder value over the long term."
Financial ResultsFor the third quarter 2012 total revenues of approximately $469,200 were $237,300 or 102% above the approximately $232,000 in revenues for the same period in 2011. Collaborative research revenues for the third quarter of approximately $373,800 increased $141,800 or 61% over the same period of prior year revenues of approximately $232,000. Grant revenue for the three months ended September 30, 2012 of approximately $95,500 increased approximately $95,500 over the same period of prior year. No grant revenue was received in the prior year third quarter.
Operating expenses increased approximately $3,232,500 or 378% in the three months ended September 30, 2012 over the same period in 2011, from approximately $854,400 in 2011 to $4,086,900 in 2012. Most significantly, relative to the same period in the prior year, the Company invested in infrastructure and outside services to support its transition from private ownership to a publicly owned and traded corporation. As expected in such transition, incremental initiatives were established in investor outreach, corporate governance, and SEC financial reporting. Non-payroll related incremental public company expenses incurred in the three month period ended September 30, 2012 were approximately $308,200. There were no such expenses incurred in the same period, prior year, due to our status as a private company. Moreover, the Company invested in building its executive, research, and development staff, and in expanding the number of independent board directors. As a result payroll related expenses, for the three months ended September 30, 2012, increased by approximately $676,800 or 236% over the same period in 2011. Similarly, stock-based compensation expenses increased approximately $1,277,200, fees to our non-employee board members were initiated, raising period expenses by $32,900 and we moved into a new, larger facility to accommodate our growing administrative and research staff. Facility related expenses increased approximately of $97,500 over the same period in 2011, as a result of that move.
The approximate $42,278,500 increase in other income (expense) for the three month period ending September 30, 2012 over the same period of the prior year, was primarily related to the change in fair value of warrant liabilities for the three months ended September 30, 2012 of approximately $42,252,400. During the Private Placement in the first quarter of 2012 we issued warrants to purchase 6,099,195 shares of our common stock to the placement agent and warrants to purchase 15,247,987 of our common stock to investors in the Private Placement. The warrants issued to the placement agent and Private Placement investors were determined to be derivative liabilities as a result of the anti-dilution provisions in the warrant agreements that may result in an adjustment to the warrant exercise price. We will revalue the derivative liability on each balance sheet date and will do so until the securities to which the derivatives liabilities relate are exercised or expire. The third quarter of 2012 also included a loss on disposal of fixed assets of approximately $158,400 which occurred in relation to moving to our new facility. Other expenses for the three months ended September 30, 2011 of approximately $182,800 related primarily to interest recorded on convertible notes payable.
About Organovo Holdings, Inc. Organovo is a three-dimensional biology company focused on delivering breakthrough bioprinting technology and creating tissue on demand for research and medical applications. The Company's NovoGen three-dimensional bioprinting technology is a platform that works across all tissue and cell types. Organovo's NovoGen MMX Bioprinter was selected as one of the "Best Inventions of 2010" by TIME Magazine. Organovo is helping pharmaceutical partners develop human biological disease models in three dimensions that enable therapeutic drug discovery and development. Organovo's bioprinting technology can also be developed to create surgical tissues for direct therapy. Organovo leads the way in solving complex medical research problems and building the future of medicine. For more information, please visit http://www.organovo.com.
Safe Harbor StatementAny statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on current expectations, but are subject to a number of risks and uncertainties. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, risks and uncertainties relating to the Company's ability to develop, market and sell products based on its technology; the expected benefits and efficacy of the Company's products and technology; the availability of substantial additional funding for the Company to continue its operations and to conduct research and development, clinical studies and future product commercialization; and, the Company's business, research, product development, regulatory approval, marketing and distribution plans and strategies. These and other factors are identified and described in more detail in our filings with the SEC, including, our current reports on Form 8-K. We do not undertake to update these forward-looking statements made by us.
Organovo Holdings Inc.(A development stage company)Condensed Consolidated Balance Sheets September 30, 2012 December 31, 2011 (Unaudited)(Audited)AssetsCurrent AssetsCash and cash equivalents$
291,881Deferred financing costs—
318,843Prepaid expenses and other current assets144,515
79,874Total current assets8,228,092
1,030,205Fixed Assets - Net605,920
—Other Assets 120,890
,408,832Liabilities and Stockholders' DeficitCurrent LiabilitiesAccounts payable$
152,500Capital lease obligation, current portion
—Accrued interest payable—
24,018Convertible notes payable, current portion—
703,833Total current liabilities976,225
1,975,748Capital lease obligation, net current portion19,712
3,242,617Commitments and Contingencies Stockholders' DeficitCommon stock, $0.001 par value; 150,000,000
shares authorized, 43,772,483 and 22,445,254
issued and outstanding at September 30, 2012
and December 31, 2011, respectively46,969
22,445Additional paid-in capital13,208,039
4,835,326Deficit accumulated during the development stage(40,679,249)
(6,691,556)Total stockholders' deficit
(1,833,785)Total Liabilities and Stockholders' Deficit$
,408,832 Organovo Holdings, Inc.(A development stage company)Unaudited Condensed Consolidated Statements of OperationsThree Months EndedSeptember 30, 2012
Three Months EndedSeptember 30, 2011
Nine Months EndedSeptember 30, 2012
Nine Months EndedSeptember 30, 2011
Period fromApril 19, 2007(Inception)throughSeptember 30, 2012 RevenuesProduct$
2,498,913Cost of product revenue—
133,607Selling, general, and administrative expenses2,981,481
7,605,440Research and development
5,503,699Loss from Operations(3,617,699)
(10,743,833)Other Income (Expense)Fair value of warrant liabilities
in excess of proceeds received
(19,019,422 )Change in fair value of warrant
(5,197,206)Financing transaction costs in
excess of proceeds received
(2,129,500)Loss on disposal of fixed assets
5,348Other income (expense)596
(30,172)Total Other Income (Expense)42,095,742
(29,935,416)Net Loss$ 38,478,043
$ (40,679,249)Net income (loss) per common share - basic
(0.16)Net income (loss) per common share - diluted
(0.16)Weighted average shares used in computing net income (loss) per common share - basic
11,537,879Weighted average shares used in computing net income (loss) per common share - diluted
11,537,879 Organovo Holdings, Inc.(A development stage company)Unaudited Condensed Consolidated Statements of Cash Flows Nine Months EndedSeptember 30, 2012 Nine Months EndedSeptember 30, 2011 Period fromApril 19, 2007(Inception)throughSeptember 30, 2012Cash Flows From Operating ActivitiesNet loss$
$ (40,679,249)Adjustments to reconcile net loss to net cash used
in operating activities:Amortization of deferred financing costs318,843
438,296Loss on disposal of fixed assets
158,366Depreciation and amortization116,828
273,156Amortization of debt discount896,167
2,083,735Interest accrued on convertible notes payable11,616
495,392Fair value of warrant liabilities in excess of
19,019,422Change in fair value of warrant liabilities5,190,637
1,301,478Amortization of warrants issued for services
36,054Warrants issued in connection with exchange
527,629Increase (decrease) in cash resulting from
changes in:Accounts receivable—
(619,874)Prepaid expenses and other assets(53,490)
75,000Net cash used in operating activities(7,713,708)
(11,043,982)Cash Flows From Investing ActivitiesRestricted cash deposits(88,321)
(88,321)Purchases of fixed assets(255,750)
(682,573)Purchases of intangible assets—
(95,000)Net cash used in investing activities(344,071)
(865,894)Cash Flows From Financing ActivitiesProceeds from issuance of convertible notes payable—
4,630,000Proceeds from issuance of common stock and warrants15,491,075
15,491,075Proceeds from exercise of stock options
17,925Proceeds from issuance of related party notes payable—
250,000Principal payments on capital lease obligations
(4,663)Repayment of related party notes payable—
(250,000)Repayment of convertible notes and interest payable(110,247)
(110,247)Deferred financing costs—
(438,296)Net cash provided by financing activities15,394,090
19,585,794Net Increase (Decrease) in Cash and Cash Equivalents7,336,311
7,675,918Cash and Cash Equivalents at Beginning of Period339,607
—Cash and Cash Equivalents at End of Period$
|SOURCE Organovo Holdings, Inc.|
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