Group 1 - CollPlant Biotechnologies will report its financial results for Q1 2024 on May 29, 2024, before U.S. market opening [1] - A conference call and webcast will be held on May 29 at 10:00 a.m. EDT to discuss financial results and corporate updates [1] - The company specializes in regenerative and aesthetic medicine, focusing on non-animal-derived collagen for tissue regeneration [5] Group 2 - CollPlant's products are based on rhCollagen produced through proprietary plant-based genetic engineering technology [5] - The company has a development and commercialization agreement with Allergan for dermal and soft tissue fillers, enhancing its position in the market [6]

CollPlant Biotechnologies Ltd. Sponsored ADR (CLGN) shares rallied 8.2% in the last trading session to close at $6.75. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 19.1% gain over the past four weeks.Last month, the company reported robust financial results for the full year ended 2023. The company also made significant progress with the advancement of the dermal and soft tissue filler program toward comme ...

Financial Data and Key Metrics Changes - GAAP revenues for Q4 2023 were $299,000, an increase of $241,000 compared to $58,000 in Q4 2022 [49] - GAAP revenues for the full year ended December 31, 2023, were $11 million, an increase of $10.7 million compared to $299,000 in the same period last year, primarily due to a $10 million milestone payment from AbbVie [50] - GAAP net loss for Q4 2023 was $4.7 million or $0.41 basic loss per share, compared to a net loss of $4.4 million or $0.39 basic loss per share for Q4 2022 [30] - GAAP net loss for the year ended December 31, 2023, was $7 million or $0.62 basic loss per share, compared to a net loss of $16.7 million or $1.53 basic loss per share for the year ended December 31, 2022 [30] - Cash and cash equivalents as of December 31, 2023, were $26.7 million, providing a runway until at least the end of 2025 [31] Business Line Data and Key Metrics Changes - The dermal filler product candidate is now in the clinical phase of development, with significant progress made in collaboration with AbbVie [18] - The regenerative breast implants are intended to promote tissue regeneration and are being developed with proprietary non-animal derived rhCollagen [12] - The company has received a U.S. patent for its photocurable dermal filler product candidate, strengthening its position in the aesthetics market [11] Market Data and Key Metrics Changes - The global breast implant market size reached $2.6 billion in 2023 and is expected to reach $4.1 billion by 2032, with a compound annual growth rate of 3.7% from 2024 to 2032 [44] - The aesthetics market is expected to see meaningful growth, with a ramp-up anticipated after multiple quarters of decline in the U.S. filler market [18] Company Strategy and Development Direction - The company's vision is to lead in regenerative medicine through innovative collagen technology, aiming to create better alternatives for regenerative aesthetic medicine applications [4] - The focus for 2024 includes advancing the regenerative dermal and soft tissue filler program with AbbVie and extending large animal studies for breast implants [41] - The company is committed to ESG initiatives, with plans to unveil its inaugural formalized ESG report for 2023 in the second quarter of 2024 [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the company's main development programs despite ongoing geopolitical challenges [43] - The company aims to maintain its operational plans while navigating uncertainties in the global capital market [55] Other Important Information - The company has decided to put its gut-on-a-chip program on hold to focus resources on the medical aesthetics arena and collaboration with AbbVie [47] - The company is eligible to receive up to an additional $226 million in milestone payments from AbbVie for the dermal filler product [27] Q&A Session Summary Question: Timing of data publication for breast implants study - Management indicated that data publication is expected in late 2024 or early 2025, with two time points for information release [34][35] Question: Collaboration with AbbVie - Management confirmed that the collaboration is crucial, with the dermal filler product in clinical studies, but specific milestone timelines cannot be disclosed [38] Question: Potential for addressing Ozempic face - Management acknowledged the potential for new market expansions, including addressing conditions like Ozempic face [60] Question: Market opportunity for bio-fabrication of human tissues and organs - Management highlighted the significant market opportunity in bio-fabrication, with various segments identified, including drug discovery and life-saving organs [61][66]

[Corporate Update and Business Highlights](index=1&type=section&id=Corporate%20Update%20and%20Business%20Highlights) [Collaboration Updates](index=1&type=section&id=Collaboration%20Updates) In 2023, CollPlant significantly advanced its collaboration with AbbVie on a dermal and soft tissue filler program, which has now entered the clinical phase, triggering a $10 million milestone payment, and entered a new joint development agreement with Stratasys for an industrial-scale bioprinter for its regenerative breast implant program - The dermal filler program in partnership with AbbVie has advanced to the clinical development phase[1](index=1&type=chunk)[2](index=2&type=chunk)[3](index=3&type=chunk) - Achieved a significant milestone under the AbbVie collaboration, resulting in a **$10 million payment** to CollPlant in June 2023 The agreement includes potential for further milestone payments and royalties[2](index=2&type=chunk)[4](index=4&type=chunk) - Announced a joint development and commercialization agreement with Stratasys Ltd to develop a bioprinter for creating CollPlant's regenerative breast implants, aiming for an industrial-scale production solution[5](index=5&type=chunk) [Product Pipeline Development](index=2&type=section&id=Product%20Pipeline%20Development) The company's regenerative breast implant program is progressing, with a large-animal study of commercial-size implants initiated in late 2023; topline data is anticipated in Q4 2024, targeting a $2.9 billion market, while the gut-on-a-chip program has been temporarily paused to reallocate resources towards core medical aesthetics projects - The regenerative breast implant program targets the **$2.9 billion** global breast implant market, offering a potential alternative to synthetic silicone implants[7](index=7&type=chunk) - In December 2023, a large-animal study was initiated to evaluate commercial-size regenerative breast implants, with topline data expected in **Q4 2024**[11](index=11&type=chunk) - The gut-on-a-chip program for ulcerative colitis has been put on hold to prioritize resources for the medical aesthetics area and the AbbVie collaboration[15](index=15&type=chunk) [Intellectual Property](index=2&type=section&id=Intellectual%20Property) CollPlant strengthened its intellectual property portfolio for its photocurable dermal filler technology, securing a key patent from the U.S. Patent and Trademark Office in November 2023, with subsequent allowances in Brazil, Israel, and Australia, providing protection until 2039 - The U.S. Patent and Trademark Office granted a patent for the company's photocuring technology, which is fundamental to its photocurable dermal filler product candidate[12](index=12&type=chunk)[13](index=13&type=chunk) - The same patent application received allowance in Brazil, and patents were also granted in Israel and Australia, providing protection until **2039** in these jurisdictions[12](index=12&type=chunk) [Corporate Governance](index=3&type=section&id=Corporate%20Governance) In 2023, CollPlant enhanced its commitment to corporate responsibility by hiring a dedicated expert to lead its ESG initiatives and joining the United Nations Global Compact, with its first ESG report planned for release in the second quarter of 2024 - Hired a dedicated expert to lead its Environment, Social and Governance (ESG) efforts and plans to file its first ESG report in **Q2 2024**[16](index=16&type=chunk) - Joined the United Nations Global Compact, reinforcing its commitment to sustainable and responsible corporate governance[17](index=17&type=chunk) [Financial Performance for Fiscal Year 2023](index=3&type=section&id=Financial%20Performance%20for%20Fiscal%20Year%202023) [Summary of Financial Results](index=3&type=section&id=Summary%20of%20Financial%20Results) For the fiscal year ended December 31, 2023, CollPlant's revenues surged to $11.0 million from $299,000 in 2022, primarily driven by a $10.0 million milestone payment from its partner, AbbVie, leading to a gross profit of $9.0 million and a narrowed GAAP net loss of $7.0 million ($0.62 per share) from $16.9 million ($1.53 per share) in 2022 FY2023 vs FY2022 Key Financials (GAAP) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Revenues | $11.0M | $0.3M | +$10.7M | | Gross Profit (Loss) | $9.0M | ($0.1M) | +$9.1M | | Operating Expenses | $16.5M | $17.0M | -$0.5M | | Net Loss | ($7.0M) | ($16.9M) | +$9.9M | | Basic Loss Per Share | ($0.62) | ($1.53) | +$0.91 | - The substantial increase in revenue is mainly attributed to the achievement of a milestone under the AbbVie Agreement, which triggered a **$10.0 million payment**[18](index=18&type=chunk) - Operating expenses saw a slight decrease of **$0.5 million**, primarily due to lower general and administrative costs[21](index=21&type=chunk) [Balance Sheet and Cash Flow Highlights](index=4&type=section&id=Balance%20Sheet%20and%20Cash%20Flow%20Highlights) CollPlant concluded 2023 with a strong balance sheet, holding $26.7 million in cash and cash equivalents, and dramatically improved cash flow from operations, with cash used in operating activities decreasing to $2.8 million for the year, compared to $13.7 million in 2022, largely due to the $10 million milestone payment from AbbVie - The company ended 2023 with a cash and cash equivalents balance of **$26.7 million**[1](index=1&type=chunk)[24](index=24&type=chunk) Cash Flow from Activities (Year-ended Dec 31) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Cash used in operating activities | ($2.8M) | ($13.7M) | | Net cash used in investing activities | ($1.2M) | $28.9M (provided) | | Cash provided by financing activities | $1.1M | $1.9M | [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents the detailed consolidated financial statements for the year ended December 31, 2023, including the Balance Sheets, Statements of Operations, and Statements of Cash Flows, providing a comprehensive view of the company's financial position and performance [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of December 31, 2023, total assets were $34.1 million, down from $37.8 million in 2022, primarily due to a decrease in cash, with total liabilities at $5.8 million, resulting in total shareholders' equity of $28.3 million Balance Sheet Summary (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $26,674 | $29,653 | | Total current assets | $28,022 | $31,658 | | Total assets | $34,126 | $37,768 | | **Liabilities & Equity** | | | | Total current liabilities | $3,251 | $3,105 | | Total liabilities | $5,786 | $5,487 | | Total shareholders' equity | $28,340 | $32,281 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the year ended December 31, 2023, the company reported revenues of $11.0 million and a gross profit of $9.0 million, with a net loss of $7.0 million, or $0.62 per share, after total operating expenses of $16.5 million Statement of Operations Summary (in thousands, except per share data) | Account | 2023 | 2022 | | :--- | :--- | :--- | | Revenues | $10,959 | $299 | | Gross profit (loss) | $8,968 | $(101) | | Research and development | $10,484 | $10,255 | | General, administrative and marketing | $5,996 | $6,741 | | Net income (loss) | $(7,019) | $(16,925) | | Basic net income (loss) per ordinary share | $(0.62) | $(1.53) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For 2023, net cash used in operating activities was $2.8 million, investing activities used $1.2 million, and financing activities provided $1.1 million, resulting in a net decrease in cash and cash equivalents of $3.2 million for the year Cash Flow Summary (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(2,763) | $(13,698) | | Net cash provided by (used in) investing activities | $(1,156) | $28,922 | | Net cash provided by financing activities | $1,108 | $1,874 | | Net decrease in cash and cash equivalents | $(3,190) | $16,490 | | Cash and cash equivalents at end of the year | $26,674 | $29,864 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) The company provides non-GAAP financial measures to supplement its GAAP results, primarily by excluding non-cash share-based compensation expenses, with a non-GAAP net loss of $5.2 million ($0.46 per share) for 2023, compared to the GAAP net loss of $7.0 million ($0.62 per share), offering a clearer view of operational performance - Non-GAAP financial measures are provided to exclude the effects of non-cash expenses, mainly share-based compensation, to better evaluate operating performance[45](index=45&type=chunk) GAAP to Non-GAAP Reconciliation Summary (2023, in thousands) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Operating loss | $(7,512) | $1,937 | $(5,575) | | Net loss | $(7,019) | $1,826 | $(5,193) | | Loss per share | $(0.62) | $0.16 | $(0.46) | [Other Information](index=11&type=section&id=Other%20Information) [About the Company](index=11&type=section&id=About%20the%20Company) CollPlant is a regenerative and aesthetic medicine company specializing in 3D bioprinting of tissues and organs, leveraging its proprietary plant-based recombinant human collagen (rhCollagen) technology, and holds a significant development and commercialization agreement with Allergan, an AbbVie company, for dermal and soft tissue fillers - The company focuses on regenerative and aesthetic medicine, including 3D bioprinting of tissues and organs[42](index=42&type=chunk) - Products are based on its proprietary plant-based recombinant human collagen (rhCollagen) technology[42](index=42&type=chunk) - Has a key development and global commercialization agreement with Allergan (an AbbVie company) for dermal and soft tissue fillers, initiated in **2021**[43](index=43&type=chunk) [Forward-Looking Statements](index=12&type=section&id=Forward-Looking%20Statements) This section serves as a standard safe harbor disclaimer, advising investors that the press release contains forward-looking statements which are not guarantees of future performance, highlighting that actual results may differ materially due to various risks and uncertainties, such as the company's history of losses, the need to raise capital, clinical trial outcomes, regulatory actions, market competition, and general economic conditions - The press release includes forward-looking statements based on management's current expectations and are subject to significant risks and uncertainties[51](index=51&type=chunk) - Key risks include a history of significant losses, the need for additional capital, uncertainty of clinical trial results, regulatory hurdles, market acceptance of products, and reliance on strategic partnerships[52](index=52&type=chunk)

[Introduction](index=6&type=section&id=INTRODUCTION) CollPlant specializes in regenerative and aesthetic medicine, leveraging rhCollagen for 3D bioprinting and dermal fillers through key collaborations - CollPlant is a regenerative and aesthetic medicine company specializing in 3D bioprinting of tissues and organs. Its core technology is a proprietary plant-based genetic engineering method to produce recombinant human collagen (rhCollagen)[16](index=16&type=chunk) - The company has a significant development and commercialization agreement with Allergan (an AbbVie company) for dermal and soft tissue fillers. A milestone achievement in June 2023 triggered a **$10 million** payment from AbbVie[32](index=32&type=chunk) - In 2023, CollPlant launched Collink.3D 50L, its first rhCollagen-based bioink in powder form, expanding its product line for 3D-bioprinting applications[17](index=17&type=chunk) - The company strengthened its commitment to sustainability by joining the United Nations Global Compact in September 2023, aligning with its use of plant-based technology as an ethical alternative to animal-derived collagen[18](index=18&type=chunk)[33](index=33&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=7&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section outlines forward-looking statements and key risk factors that could cause actual results to differ from projections - This report contains forward-looking statements concerning the company's objectives, plans, and projections for operational results and financial conditions. These statements are identified by words like "may," "will," "expect," and "anticipate"[21](index=21&type=chunk)[37](index=37&type=chunk) - Key factors that could cause actual results to differ from forward-looking statements include the timing and cost of clinical trials, market acceptance of products, the ability to maintain strategic partnerships, reliance on third-party manufacturing, and competition[22](index=22&type=chunk)[23](index=23&type=chunk) - The company also faces risks related to its history of significant losses, the need for additional capital, intellectual property protection, and the political and security situation in Israel[38](index=38&type=chunk)[39](index=39&type=chunk) [PART I](index=10&type=section&id=PART%20I) This part details the company's key risks, business operations, financial performance, and corporate governance [ITEM 3. KEY INFORMATION](index=10&type=section&id=ITEM%203.%20KEY%20INFORMATION) CollPlant faces significant risks including financial losses, reliance on novel rhCollagen products, third-party dependence, and challenges in clinical development and intellectual property protection [Risk Factors](index=10&type=section&id=D.%20Risk%20Factors) Principal risks facing the company are categorized into financial, commercialization, clinical/regulatory, third-party reliance, operational, intellectual property, and ownership-related factors - The company has a history of significant losses, incurring a total comprehensive loss of **$7.0 million** in 2023 and having an accumulated deficit of **$96.7 million** as of December 31, 2023[44](index=44&type=chunk)[104](index=104&type=chunk) - Future success is heavily dependent on medical aesthetics and 3D bioprinting product candidates, which require successful development, regulatory approval, and commercialization[49](index=49&type=chunk) - The company relies on third-party collaborators for sales and manufacturing, and strategic partnerships for development and commercialization, which introduces risks related to performance and potential termination of agreements[51](index=51&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - Significant risks are associated with protecting the company's extensive worldwide patent portfolio and trade secrets for its rhCollagen technology[59](index=59&type=chunk)[82](index=82&type=chunk) - Operations are primarily located in Israel, exposing the company to potential political, economic, and military instability, including the ongoing war with Hamas[85](index=85&type=chunk)[103](index=103&type=chunk) [ITEM 4. INFORMATION ON THE COMPANY](index=54&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) CollPlant's business overview details its history, operations, proprietary rhCollagen platform for 3D bioprinting and medical aesthetics, key collaborations, product pipeline, and market opportunities [History and Development of the Company](index=54&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) The company's corporate history includes its Israeli incorporation, 2010 merger, Nasdaq listing since 2021, and capital expenditures for laboratory and production facilities - CollPlant Biotechnologies Ltd was incorporated in Israel in 1981 and became public on the TASE in 1993. It merged with its subsidiary CollPlant Ltd in 2010[435](index=435&type=chunk) - The company's ordinary shares began trading on the Nasdaq Global Market on June 4, 2021, under the symbol "CLGN", following a mandatory cancellation and exchange of its previous ADSs[407](index=407&type=chunk) Capital Expenditures | Year | Capital Expenditures (USD) | | :--- | :--- | | 2023 | $954,000 | | 2022 | $1.3 million | | 2021 | $1.4 million | [Business Overview](index=55&type=section&id=B.%20Business%20Overview) The company focuses on regenerative and aesthetic medicine using plant-derived rhCollagen, with key programs including AbbVie collaboration, 3D-bioprinted breast implants, and Collink.3D bioinks - The company is collaborating with AbbVie to develop and commercialize dermal and soft tissue fillers. A milestone payment of **$10 million** was received from AbbVie in July 2023[409](index=409&type=chunk)[414](index=414&type=chunk) - CollPlant is developing 3D-bioprinted regenerative breast implants designed to be replaced by the patient's own tissue. A large-animal study was initiated in December 2023 to evaluate commercial-size implants[380](index=380&type=chunk)[415](index=415&type=chunk) - The company commercially launched its Collink.3D™ bioink platform, including Collink.3D™ 50, Collink.3D™ 90, and the powder-form Collink.3D™ 50L, for use in 3D bioprinting of tissues and organs[381](index=381&type=chunk)[416](index=416&type=chunk) - The estimated market size for the company's bioink and medical aesthetics product candidates exceeded **$10 billion** in 2021 and is projected to reach **$18 billion** by 2026[412](index=412&type=chunk)[447](index=447&type=chunk) - The company's rhCollagen technology is positioned as superior to tissue-derived collagens, offering better bio-functionality, high homogeneity, and an improved safety profile without the risk of immune response or disease transmission[423](index=423&type=chunk)[424](index=424&type=chunk)[452](index=452&type=chunk) [Organizational Structure](index=90&type=section&id=C.%20Organizational%20Structure) The company's corporate structure includes its wholly-owned Israeli subsidiary, CollPlant Ltd, and CollPlant Inc, a Delaware corporation wholly-owned by CollPlant Ltd - The company has two subsidiaries: CollPlant Ltd (wholly-owned, incorporated in Israel) and CollPlant Inc (wholly-owned by CollPlant Ltd, incorporated in Delaware)[584](index=584&type=chunk) [Property, Plants and Equipment](index=90&type=section&id=D.%20Property,%20Plants%20and%20Equipment) The company's main facilities, including corporate headquarters, research labs, and production sites, are leased in Israel, primarily in Rehovot and Yessod Hama'ala - Corporate headquarters and research labs are located in a leased 16,250 sq. ft. facility in Weizmann Science Park, Rehovot, Israel, with the lease expiring in April 2024 and an automatic five-year extension[585](index=585&type=chunk) - The company leases approximately 64,583 sq. ft. in Yessod Hama'ala for plant research and rhCollagen extraction, with the lease expiring in April 2027[586](index=586&type=chunk)[587](index=587&type=chunk) - An additional 6,329 sq. ft. production facility is leased in Rehovot, with the lease expiring in December 2026[588](index=588&type=chunk) [ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=91&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes the company's financial condition and operating results, highlighting a significant 2023 revenue increase from an AbbVie milestone payment, net loss, and current liquidity [Operating Results](index=94&type=section&id=A.%20Operating%20Results) The company's 2023 operating results show a substantial revenue increase to **$11.0 million**, primarily from an AbbVie milestone, leading to a narrowed net loss of **$7.0 million** Results of Operations (USD in thousands) | Statement of operations data: | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Revenues** | **$10,959** | **$299** | **$15,641** | | Cost of revenues | $1,991 | $400 | $2,005 | | **Gross profit (loss)** | **$8,968** | **($101)** | **$13,636** | | Research and development expenses | $10,484 | $10,255 | $7,631 | | General, administrative, and marketing expenses | $5,996 | $6,741 | $5,940 | | **Total operating income (loss)** | **($7,512)** | **($17,097)** | **$65** | | Financial income, net | $493 | $172 | $172 | | **Net income (loss)** | **($7,019)** | **($16,925)** | **$237** | - **2023 vs. 2022:** Revenue surged to **$11.0 million** in 2023 from **$299,000** in 2022, mainly due to a **$10 million** milestone payment from AbbVie. Net loss narrowed significantly to **$7.0 million** from **$16.9 million**[967](index=967&type=chunk) - **2022 vs. 2021:** Revenue dropped to **$299,000** in 2022 from **$15.6 million** in 2021. The 2021 revenue was primarily driven by a **$14 million** upfront payment from the AbbVie license agreement[996](index=996&type=chunk) - Research and development expenses were **$10.5 million** in 2023, a slight increase from **$10.3 million** in 2022, driven by higher employee-related costs for new product development[970](index=970&type=chunk) - General, administrative, and marketing expenses decreased to **$6.0 million** in 2023 from **$6.7 million** in 2022, mainly due to lower employee salary and share-based compensation expenses[971](index=971&type=chunk) [Liquidity and Capital Resources](index=96&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) As of December 31, 2023, the company held **$26.7 million** in cash, funding operations through sales and partnerships, with sufficient liquidity for the next 12 months - The company held **$26.7 million** in cash and cash equivalents as of December 31, 2023, compared to **$29.7 million** at the end of 2022[1022](index=1022&type=chunk) Consolidated Statement of Cash Flows (USD in thousands) | Net cash provided by (used in): | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Operating activities | ($2,763) | ($13,698) | $2,501 | | Investing activities | ($1,156) | $28,922 | ($31,556) | | Financing activities | $1,108 | $1,874 | $38,760 | - Net cash used in operating activities decreased to **$2.8 million** in 2023 from **$13.7 million** in 2022, primarily due to the **$10 million** milestone payment received[1024](index=1024&type=chunk)[1025](index=1025&type=chunk) - The company believes its existing cash of **$26.7 million** is sufficient to fund operating expenses and capital expenditures for at least the next 12 months[1009](index=1009&type=chunk) [ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=99&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details the company's leadership, workforce, and governance practices, including executive and director compensation and board committee structures [Compensation](index=102&type=section&id=B.%20Compensation) Compensation for senior management and directors totaled approximately **$2.6 million** in salaries and fees, plus **$1.7 million** in options granted for 2023 Aggregate Compensation for Senior Management and Directors (2023) | Compensation Type | Amount (USD in thousands) | | :--- | :--- | | Salaries, fees, commissions, and bonuses | $2,602 | | Value of Options Granted | $1,672 | - The Chairman of the Board receives a monthly consulting fee of **$14,584**, while other non-employee directors receive an annual fee of **$25,000** and a per-meeting fee of **$800**[1049](index=1049&type=chunk)[1077](index=1077&type=chunk) [Employees](index=105&type=section&id=D.%20Employees) As of March 20, 2024, CollPlant had **75 employees** in Israel, distributed across R&D, manufacturing, and general/administrative roles - As of March 20, 2024, the company had **75 employees**, with **14 holding MDs or PhDs**[619](index=619&type=chunk) - Employee distribution is as follows: **23 in R&D**, **39 in manufacturing**, and **13 in general/administrative roles**[619](index=619&type=chunk) [ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=108&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section discloses beneficial ownership of ordinary shares, with senior management and directors holding **10.8%**, and details related party transactions Beneficial Ownership of Ordinary Shares (as of March 20, 2024) | Shareholder Group | Percentage Beneficially Owned | | :--- | :--- | | All senior management and directors as a group (12 persons) | 10.8% | | Ami Sagy | 17.0% | | Loewenbaum Group | 11.2% | - The company has entered into employment, indemnification, and option agreements with its directors and senior management[505](index=505&type=chunk)[506](index=506&type=chunk) [ITEM 8. FINANCIAL INFORMATION](index=112&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) The report includes consolidated financial statements, and the company does not anticipate paying cash dividends, intending to reinvest earnings - The company has never paid cash dividends and does not anticipate doing so in the foreseeable future, as it intends to reinvest earnings[1176](index=1176&type=chunk) - There have been no material legal proceedings involving the company[622](index=622&type=chunk)[1204](index=1204&type=chunk) [ITEM 10. ADDITIONAL INFORMATION](index=113&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section provides supplementary details on share capital, articles of association, material contracts, and applicable Israeli and U.S. tax considerations - The company may be eligible for reduced corporate tax rates in Israel under the "Preferred Enterprise" or "Preferred Technological Enterprise" programs if it generates taxable income in the future[367](index=367&type=chunk)[518](index=518&type=chunk)[543](index=543&type=chunk) - Grants received from the Israel Innovation Authority (IIA) require royalty payments on future revenues and impose restrictions on transferring manufacturing and know-how outside of Israel[545](index=545&type=chunk) - The company does not believe it was a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes for the 2023 taxable year, but notes that this status is an annual determination and cannot be guaranteed for future years[372](index=372&type=chunk)[402](index=402&type=chunk) [PART II](index=127&type=section&id=PART%20II) This part details the company's internal controls, disclosure procedures, and corporate governance practices, including auditor fees [ITEM 15. CONTROLS AND PROCEDURES](index=127&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded the company's disclosure controls and internal control over financial reporting were **effective** as of December 31, 2023, with an **unqualified auditor opinion** - Management concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2023[615](index=615&type=chunk) - Based on the COSO framework, management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2023[668](index=668&type=chunk) - The independent registered public accounting firm, Kost Forer Gabbay & Kasierer (a member of EY Global), issued an attestation report concurring with management's assessment of **effective** internal control over financial reporting[669](index=669&type=chunk) [ITEM 16. [RESERVED]](index=128&type=section&id=ITEM%2016.%20%5BRESERVED%5D) This section covers corporate governance, including audit committee expertise, accountant fees, foreign private issuer practices, and cybersecurity risk management - The board has determined that Dr. Elan Penn is an audit committee financial expert[671](index=671&type=chunk) Principal Accountant Fees (USD in thousands) | Fee Type | 2023 | 2022 | | :--- | :--- | :--- | | Audit fees | $261 | $230 | | Tax fees | $12 | $12 | | All other fees | $63 | $54 | | **Total** | **$336** | **$296** | - As a foreign private issuer, the company follows Israeli home country practices for certain governance matters, such as a **20% quorum** requirement for shareholder meetings, instead of the **33.3% required by Nasdaq rules**[360](index=360&type=chunk)[653](index=653&type=chunk) - The company has a cybersecurity risk management program that is integrated into its overall risk management system and is managed internally[658](index=658&type=chunk) [PART III](index=132&type=section&id=PART%20III) This part confirms the inclusion of consolidated financial statements and lists all exhibits filed with the report [ITEM 17. FINANCIAL STATEMENTS](index=132&type=section&id=ITEM%2017.%20FINANCIAL%20STATEMENTS) The company has elected to provide financial statements and related information as required by Item 18 - The company has elected to provide financial statements pursuant to Item 18[708](index=708&type=chunk) [ITEM 18. FINANCIAL STATEMENTS](index=132&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) The consolidated financial statements and related notes are included in the Annual Report, beginning on page F-1 - The consolidated financial statements and related notes are included in the report starting from page F-1[660](index=660&type=chunk) [ITEM 19. EXHIBITS](index=132&type=section&id=ITEM%2019.%20EXHIBITS) This section lists exhibits filed with the Annual Report on Form 20-F, including corporate documents, material contracts, and share ownership plans - The report includes key corporate documents as exhibits, such as the Amended and Restated Articles of Association and the Form of Letter of Indemnification Agreement[687](index=687&type=chunk) - Exhibits also include the company's 2010 and 2024 Share Ownership and Option Plans, employment agreements with key executives, and the Amended and Restated Compensation Policy[710](index=710&type=chunk) [Consolidated Financial Statements](index=148&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's audited consolidated financial statements, including balance sheets, operations, cash flows, and notes, with the independent auditor's report [Report of Independent Registered Public Accounting Firm](index=149&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The independent auditor issued an **unqualified opinion** on the consolidated financial statements and internal control, highlighting liquidity as a critical audit matter - The auditor issued an **unqualified opinion**, stating the financial statements are fairly presented in accordance with U.S. GAAP[694](index=694&type=chunk) - An **unqualified opinion** was also issued on the **effectiveness** of the company's internal control over financial reporting as of December 31, 2023[703](index=703&type=chunk) - The critical audit matter highlighted was the management's subjective judgments regarding liquidity and the company's ability to continue as a going concern, given its history of losses and negative cash flow from operations[696](index=696&type=chunk)[697](index=697&type=chunk)[719](index=719&type=chunk) [Consolidated Balance Sheets](index=153&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show a decrease in total assets and shareholders' equity, and a slight increase in total liabilities from 2022 to 2023 Consolidated Balance Sheet Data (USD in thousands) | | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $26,674 | $29,653 | | Total current assets | $28,022 | $31,658 | | Total non-current assets | $6,104 | $6,110 | | **Total assets** | **$34,126** | **$37,768** | | **Liabilities and Shareholders' Equity** | | | | Total current liabilities | $3,251 | $3,105 | | Total non-current liabilities | $2,535 | $2,382 | | **Total liabilities** | **$5,786** | **$5,487** | | **Total shareholders' equity** | **$28,340** | **$32,281** | [Consolidated Statements of Operations](index=155&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations detail the company's financial performance, showing 2023 revenues of **$11.0 million** and a net loss of **$7.0 million** Consolidated Statement of Operations Highlights (USD in thousands) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Revenues | $10,959 | $299 | $15,641 | | Gross profit (loss) | $8,968 | ($101) | $13,636 | | Total operating income (loss) | ($7,512) | ($17,097) | $65 | | **Net income (loss)** | **($7,019)** | **($16,925)** | **$237** | | Basic net income (loss) per share | ($0.62) | ($1.53) | $0.02 | [Consolidated Statements of Changes in Shareholders' Equity](index=156&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) This statement shows a decrease in total shareholders' equity from **$32.3 million** in 2022 to **$28.3 million** in 2023, primarily due to the net loss - Shareholders' equity decreased by **$4.0 million** during 2023, from **$32.3 million** to **$28.3 million**[1429](index=1429&type=chunk) - The main drivers of the change in 2023 were the net loss of **$7.0 million**, offset by **$1.1 million** from the exercise of warrants and options, and **$2.0 million** in share-based compensation[1429](index=1429&type=chunk) [Consolidated Statements of Cash Flows](index=157&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement details cash flows, showing net cash used in operating activities of **$2.8 million** in 2023, with a **$3.0 million** decrease in cash Consolidated Cash Flow Summary (USD in thousands) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | ($2,763) | ($13,698) | $2,501 | | Net cash from investing activities | ($1,156) | $28,922 | ($31,556) | | Net cash from financing activities | $1,108 | $1,874 | $38,760 | | **Net change in cash** | **($2,981)** | **$16,380** | **$9,848** | [Notes to the Consolidated Financial Statements](index=159&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of accounting policies and figures, covering revenue recognition, commitments, leases, property, and share capital - The company recognized **$10 million** in revenue in 2023 from a milestone payment achieved under the AbbVie Development Agreement[1313](index=1313&type=chunk) - As of December 31, 2023, the company has a maximum remaining royalty obligation of approximately **$7.0 million** to the Israel Innovation Authority (IIA) for past R&D grants[1344](index=1344&type=chunk) - In August 2023, the company repriced outstanding options for 969,886 ordinary shares to an exercise price of **$6.39 per share**, resulting in an incremental fair value of **$579,000** to be expensed over the vesting period[1367](index=1367&type=chunk)[1368](index=1368&type=chunk) - The company recorded inventory write-downs of **$866,000** in 2023, which were included in the cost of revenues[1328](index=1328&type=chunk)

Dermal filler program with AbbVie in clinical phase Regenerative breast implant program large-animal study underway to evaluate commercial-size implants with topline data expected in Q4 Ends 2023 with $26.7 million in cash and cash equivalents Conference call to be held on Thursday, April 4, 2024 at 10:00 a.m. U.S. EDT  REHOVOT, Israel, April 4, 2024 /PRNewswire/ -- CollPlant Biotechnologies (Nasdaq: CLGN), a regenerative and aesthetics medicine company developing innovative technologies and products base ...

Financial Data and Key Metrics Changes - GAAP revenues for Q3 2023 were $43,000, a decrease of $66,000 compared to $109,000 in Q3 2022 [16] - GAAP revenues for the nine months ended September 30, 2023, were $10.7 million, an increase of $10.5 million compared to $241,000 in the same period last year [16] - GAAP net loss for Q3 2023 was $4.4 million or $0.38 basic loss per share, compared to a net loss of $4.4 million or $0.40 basic loss per share for Q3 2022 [20] - Cash, cash equivalents, and restricted cash as of September 30, 2023, were $29 million, representing a cash runway of at least two years [22] Business Line Data and Key Metrics Changes - The dermal filler product candidate partnered with AbbVie is in clinical phase and has the potential to shift the fillers market, with a $10 million payment received in Q3 2023 [8] - The regenerative breast implants program is preparing for a large animal study set to begin in December 2023, following a successful initial study [10][11] - The Gut-on-a-Chip program aims to develop a 3D bioprinted gut tissue model for drug discovery and personalized medicine [12][14] Market Data and Key Metrics Changes - The company is focusing on advancing its key programs despite the ongoing war in Israel, with minimal impact on production and development [5][6] - The company has established a crisis team to monitor operations and maintain communication with stakeholders during the war [6] Company Strategy and Development Direction - The company aims to create products that enable tissue and organ regeneration using proprietary recombinant human collagen technology [7] - The focus remains on core programs and partnerships, with a commitment to sustainability and ESG initiatives [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed hope for a return to normalcy in Israel and emphasized the importance of maintaining operations and employee safety during the war [5][6] - The company plans to continue advancing its regenerative medicine programs and is optimistic about future milestones with AbbVie [43] Other Important Information - The company has joined the United Nations Global Compact, reaffirming its commitment to sustainable practices [15] - A U.S. patent was granted for the photocurable dermal filler product candidate, strengthening the company's position in the aesthetic market [9] Q&A Session Summary Question: What is the next milestone for the dermal filler product with AbbVie? - The next milestone will be related to development, clinical trials, regulatory, and commercial sales, but specific timelines cannot be disclosed [27] Question: What is the development strategy for the breast implant after the upcoming large animal study? - The study will evaluate commercial-sized implants and help finalize the implant design, with discussions with the FDA planned for 2025 [28][29] Question: What is the rationale behind terminating the agreement with Tel Aviv University for the Gut-on-a-Chip product? - The company decided to take the development in-house after one year of collaboration, restructuring the development team and optimizing the plan [30][31] Question: Does the two-year runway include expected payments from AbbVie? - The two-year runway is based solely on the current cash balance and does not include potential future milestone payments from AbbVie [35]

[Executive Summary & Q3 2023 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q3%202023%20Highlights) CollPlant's Q3 2023 highlights include a major AbbVie milestone, regenerative breast implant progress, and a strong two-year cash runway [Key Financial and Operational Highlights](index=1&type=section&id=Key%20Financial%20and%20Operational%20Highlights) CollPlant's Q3 2023 results highlight a significant AbbVie milestone, regenerative breast implant progress, and a strong two-year cash runway - Received a **$10 million** milestone payment in the third quarter from partner, AbbVie Inc., for achieving a major milestone in the second quarter related to the clinical-phase dermal filler product candidate[1](index=1&type=chunk)[4](index=4&type=chunk) - Company is preparing to launch a large-animal study with a commercial size breast implant by year-end[2](index=2&type=chunk)[3](index=3&type=chunk) Key Financials (Nine Months Ended September 30, 2023) | Metric | Amount ($ million) | | :----------------- | :---------- | | Revenues | 10.7 | | Operating Loss | 2.4 | | Cash & Equivalents | 29.0 | - Cash and cash equivalents totaled **$29 million** as of September 30, 2023, representing an estimated cash runway of at least **two years**[2](index=2&type=chunk)[28](index=28&type=chunk) [Corporate and Program Updates](index=2&type=section&id=Corporate%20and%20Program%20Updates) CollPlant provided updates on its dermal filler, breast implants, gut-on-a-chip, bioink portfolio, and ESG initiatives [Dermal and Soft Tissue Filler Program](index=2&type=section&id=Dermal%20and%20Soft%20Tissue%20Filler%20Program) CollPlant achieved a significant milestone with AbbVie for its dermal filler, triggering a **$10 million** Q3 payment and potential future royalties - Achieved a milestone with respect to the dermal and soft tissue filler product candidate, in accordance with its collaboration agreement with AbbVie, triggering a **$10 million** payment received in Q3[1](index=1&type=chunk)[4](index=4&type=chunk) - CollPlant has the potential to receive additional milestone payments as well as future royalties in accordance with its long-term collaboration with AbbVie[4](index=4&type=chunk) [Photocurable Dermal Filler Patent](index=2&type=section&id=Photocurable%20Dermal%20Filler%20Patent) CollPlant secured a U.S. patent for its photocurable dermal filler, providing IP protection until **2039** and strengthening its market position - U.S. Patent No. **11,801,329** was granted, covering CollPlant's photocurable dermal filler product candidate for the aesthetics market, providing intellectual property protection until **2039**[5](index=5&type=chunk) - The patent is directed to a method of filling tissue space under the epidermis by introducing a polymerizable filler solution and applying external light to induce in-situ polymerization[5](index=5&type=chunk) [Regenerative Breast Implants Program](index=2&type=section&id=Regenerative%20Breast%20Implants%20Program) CollPlant is advancing its regenerative breast implants program, planning a large-animal study by year-end after positive tissue regeneration results - CollPlant is planning to initiate the next large-animal study to evaluate commercial size, **3D bioprinted**, regenerative breast implants by year-end[2](index=2&type=chunk)[6](index=6&type=chunk) - Positive results from the first large-animal study demonstrated progressive stages of tissue regeneration and neovascular networks within the implants, with no adverse events reported[6](index=6&type=chunk) - CollPlant's breast implants, comprised of proprietary plant-derived rhCollagen, are expected to regenerate breast tissue without eliciting immune response, offering a revolutionary alternative for aesthetic and reconstructive procedures[18](index=18&type=chunk) [Gut-on-a-Chip Development](index=2&type=section&id=Gut-on-a-Chip%20Development) CollPlant is independently developing a **3D bioprinted** gut tissue model for personalized IBD treatment, successfully growing epithelial cells on scaffolds - CollPlant is developing a gut tissue model to enable predictive and personalized treatment for inflammatory bowel diseases (IBD) by mimicking gut structure using high-resolution **3D printing** and rhCollagen-based bioink[19](index=19&type=chunk) - The CollPlant team successfully grew epithelial cells on **3D printed** scaffolds that mimic the gut tissue geometry[19](index=19&type=chunk) - CollPlant elected to terminate its collaboration agreement with Tel Aviv University and Sheba Medical Center and continues to develop this program on its own[19](index=19&type=chunk) [Commercial Bioink Solutions Portfolio](index=3&type=section&id=Commercial%20Bioink%20Solutions%20Portfolio) CollPlant expanded its BioInks portfolio with a third formulation, enabling diverse **3D bioprinting** applications and streamlining product development - CollPlant has released a **third BioInk formulation** to the market and continues to expand its BioInks portfolio, enabling a wide range of **3D bioprinting** applications[8](index=8&type=chunk) - Applications include drug discovery, drug screening, tissue testing, and the development of transplantable tissues and organs[8](index=8&type=chunk) - CollPlant's bioink platform is intended to enable customers to streamline new product development, accelerate timelines, and reduce overall costs[21](index=21&type=chunk) [Environmental, Social, and Governance (ESG) Initiatives](index=3&type=section&id=Environmental%2C%20Social%2C%20and%20Governance%20%28ESG%29%20Initiatives) CollPlant strengthens its ESG commitment by hiring a dedicated manager and joining the UN Global Compact, aligning with SEC standards - CollPlant recruited a dedicated manager to analyze, formulate, and execute upon the set of standards for its Environmental, Social and Governance (ESG) program[9](index=9&type=chunk) - This initiative is designed to help CollPlant meet SEC standards for publicly listed companies and align with sustainable values[9](index=9&type=chunk) - In September, CollPlant announced its participation in the United Nations Global Compact, the world's largest initiative for sustainable and responsible corporate governance[22](index=22&type=chunk) [Financial Results for Q3 and Nine Months Ended September 30, 2023](index=3&type=section&id=Financial%20Results%20for%20Q3%20and%20Nine%20Months%20Ended%20September%2030%2C%202023) CollPlant's Q3 and nine-month financial results show significant revenue growth, improved gross profit, and reduced net loss, driven by an AbbVie milestone [Revenues](index=3&type=section&id=Revenues) CollPlant's GAAP revenues for the nine months ended September 30, 2023, significantly increased to **$10.7 million**, driven by the AbbVie milestone, despite a Q3 decrease GAAP Revenues Comparison | Period | 2023 ($ million) | 2022 ($ million) | Change ($ million) | Change (%) | | :---------------------- | :-------- | :-------- | :---------- | :--------- | | Nine Months Ended Sep 30 | 10.7 | 0.241 | +10.5 | +4357% | | Three Months Ended Sep 30 | 0.043 | 0.109 | -0.066 | -60.6% | - The increase in nine-month revenues is mainly related to the achievement of a milestone under the AbbVie Agreement and an increase in sales of rhCollagen products[10](index=10&type=chunk) [Cost of Revenues](index=3&type=section&id=Cost%20of%20Revenues) GAAP cost of revenues increased for both nine-month and Q3 periods, driven by AbbVie milestone royalties, BioInk/rhCollagen sales, and inventory impairments GAAP Cost of Revenues Comparison | Period | 2023 ($ million) | 2022 ($ million) | Change ($ million) | Change (%) | | :---------------------- | :-------- | :-------- | :---------- | :--------- | | Nine Months Ended Sep 30 | 1.2 | 0.338 | +0.880 | +260.4% | | Three Months Ended Sep 30 | 0.278 | 0.264 | +0.014 | +5.3% | - The nine-month increase is mainly comprised of **$312,000** in royalty expenses to the IIA related to the AbbVie milestone payment, and **$430,000** relating to the sales of BioInk, VergenixFG, and rhCollagen[11](index=11&type=chunk) - The third-quarter increase in cost of revenues is mainly related to inventory impairments[49](index=49&type=chunk) [Gross Profit (Loss)](index=4&type=section&id=Gross%20Profit%20%28Loss%29) CollPlant reported a **$9.4 million** GAAP gross profit for the nine months ended September 30, 2023, a significant improvement from prior year's loss, despite a Q3 gross loss GAAP Gross Profit (Loss) Comparison | Period | 2023 ($ million) | 2022 ($ million) | | :---------------------- | :-------- | :-------- | | Nine Months Ended Sep 30 | 9.4 | (0.097) | | Three Months Ended Sep 30 | (0.235) | (0.155) | [Operating Expenses](index=4&type=section&id=Operating%20Expenses) GAAP operating expenses for the nine months ended September 30, 2023, decreased by **$0.438 million**, due to reduced R&D and G&A, while Q3 operating expenses slightly increased GAAP Operating Expenses Comparison | Period | 2023 ($ million) | 2022 ($ million) | Change ($ million) | Change (%) | | :---------------------- | :-------- | :-------- | :---------- | :--------- | | Nine Months Ended Sep 30 | 11.9 | 12.3 | -0.438 | -3.6% | | Three Months Ended Sep 30 | 4.4 | 4.3 | +0.1 | +2.3% | - The nine-month decrease is mainly attributed to **$247,000** in research and product development activities and approximately **$191,000** in general and administrative expenses, primarily due to a decrease in share-based compensation expenses[51](index=51&type=chunk) [Financial Income (Expenses), Net](index=4&type=section&id=Financial%20Income%20%28Expenses%29%2C%20Net) CollPlant saw a positive shift in net financial income for both nine-month and Q3 periods, driven by higher interest rates and earnings from short-term cash deposits GAAP Financial Income (Expenses), Net Comparison | Period | 2023 ($ million) | 2022 ($ million) | | :---------------------- | :-------- | :-------- | | Nine Months Ended Sep 30 | 0.114 | (0.103) | | Three Months Ended Sep 30 | 0.225 | 0.089 | - The increase in financial income, net, is due to the increase in interest rates and interest received from the Company's short-term cash deposits[13](index=13&type=chunk)[26](index=26&type=chunk) [Net Loss and Basic Loss Per Share](index=5&type=section&id=Net%20Loss%20and%20Basic%20Loss%20Per%20Share) CollPlant significantly reduced its GAAP net loss for the nine months ended September 30, 2023, to **$2.3 million**, a substantial improvement from prior year, while Q3 net loss remained stable GAAP Net Loss and Basic Loss Per Share Comparison | Period | 2023 Net Loss ($ million) | 2022 Net Loss ($ million) | 2023 Basic EPS ($) | 2022 Basic EPS ($) | | :---------------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Nine Months Ended Sep 30 | (2.3) | (12.5) | (0.20) | (1.14) | | Three Months Ended Sep 30 | (4.4) | (4.4) | (0.38) | (0.40) | Non-GAAP Net Loss and Basic Loss Per Share Comparison | Period | 2023 Non-GAAP Net Loss ($ million) | 2022 Non-GAAP Net Loss ($ million) | 2023 Non-GAAP Basic EPS ($) | 2022 Non-GAAP Basic EPS ($) | | :---------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Nine Months Ended Sep 30 | (1.2) | (11.2) | (0.11) | (1.02) | | Three Months Ended Sep 30 | (4.0) | (3.7) | (0.35) | (0.34) | [Condensed Consolidated Financial Statements](index=7&type=section&id=Condensed%20Consolidated%20Financial%20Statements) CollPlant's condensed consolidated financial statements provide a detailed overview of its balance sheets, statements of operations, and cash flows for the reported periods [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2023, CollPlant's balance sheet shows slight decreases in total assets and liabilities, with cash and cash equivalents remaining a significant current asset Condensed Consolidated Balance Sheets (U.S. dollars in thousands) | Metric | Sep 30, 2023 (Unaudited) ($ thousand) | Dec 31, 2022 (Audited) ($ thousand) | | :--------------------------- | :------------------------------------ | :---------------------------------- | | Cash and cash equivalents | 28,981 | 29,653 | | Total current assets | 31,207 | 31,658 | | Total non-current assets | 6,351 | 6,110 | | Total assets | 37,558 | 37,768 | | Total current liabilities | 2,634 | 3,105 | | Total non-current liabilities | 2,526 | 2,382 | | Total liabilities | 5,160 | 5,487 | | Total shareholders' equity | 32,398 | 32,281 | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The Condensed Consolidated Statements of Operations reflect significant improvement in nine-month net loss, driven by increased revenues and gross profit, despite an operating loss Condensed Consolidated Statements of Operations (U.S. dollars in thousands) | Metric | Nine Months Ended Sep 30, 2023 ($ thousand) | Nine Months Ended Sep 30, 2022 ($ thousand) | Three Months Ended Sep 30, 2023 ($ thousand) | Three Months Ended Sep 30, 2022 ($ thousand) | | :------------------------------------------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------- | :------------------------------------------- | | Revenues | 10,660 | 241 | 43 | 109 | | Cost of Revenue | 1,218 | 338 | 278 | 264 | | Gross Profit (loss) | 9,442 | (97) | (235) | (155) | | Operating expenses: | | | | | | Research and development | 7,371 | 7,618 | 2,695 | 2,777 | | General, administrative and marketing | 4,515 | 4,706 | 1,672 | 1,536 | | Total Operating loss | (2,444) | (12,421) | (4,602) | (4,468) | | Financial income (expenses), net | 114 | (103) | 225 | 89 | | Net loss for the period | (2,330) | (12,524) | (4,377) | (4,379) | | Basic and diluted loss per ordinary share | (0.20) | (1.14) | (0.38) | (0.40) | | Weighted average ordinary shares outstanding used in computation of basic and diluted loss per share | 11,367,767 | 10,986,454 | 11,443,023 | 11,086,481 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) CollPlant's operating cash flow significantly improved, shifting from substantial use to minor use, driven by the AbbVie milestone, while investing activities shifted to cash usage Net Cash Flows (U.S. dollars in thousands) | Activity | Nine Months Ended Sep 30, 2023 ($ thousand) | Nine Months Ended Sep 30, 2022 ($ thousand) | | :------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net cash used in operating activities | (418) | (10,352) | | Net cash provided by (used in) investing activities | (784) | 29,226 | | Net cash provided by financing activities | 1,108 | 1,474 | | Net increase (decrease) in cash and cash equivalents and restricted deposits | (94) | 20,348 | [Cash Flows from Operating Activities](index=5&type=section&id=Cash%20Flows%20from%20Operating%20Activities) Q3 2023 operating cash flow was **$6.8 million** provided, a significant improvement, and nine-month cash used decreased, both benefiting from the **$10 million** AbbVie milestone Cash Flows from Operating Activities Comparison | Period | 2023 ($ million) | 2022 ($ million) | | :---------------------- | :------------- | :------------- | | Three Months Ended Sep 30 | 6.8 (provided) | 3.2 (used) | | Nine Months Ended Sep 30 | 0.418 (used) | 10.4 (used) | - Cash provided in the three and nine-month periods ended September 30, 2023, includes the **$10 million** milestone payment from AbbVie[15](index=15&type=chunk) [Cash Flows from Investing Activities](index=5&type=section&id=Cash%20Flows%20from%20Investing%20Activities) Q3 2023 cash used in investing activities decreased, and nine-month investing shifted from cash provision to usage, primarily due to changes in short-term cash deposits Cash Flows from Investing Activities Comparison | Period | 2023 ($ million) | 2022 ($ million) | | :---------------------- | :------------- | :------------- | | Three Months Ended Sep 30 | 0.243 (used) | 0.322 (used) | | Nine Months Ended Sep 30 | 0.784 (used) | 29.2 (provided)| - The decrease in cash provided by investing activities for the nine months is mainly attributed to repayment and investment in short-term cash deposits during the nine months ended September 30, 2022[54](index=54&type=chunk) [Cash Flows from Financing Activities](index=5&type=section&id=Cash%20Flows%20from%20Financing%20Activities) Q3 2023 financing cash provided was **$0.216 million**, an increase from prior year, and nine-month cash was **$1.1 million**, mainly from option and warrant exercises Cash Flows from Financing Activities Comparison | Period | 2023 ($ million) | 2022 ($ million) | | :---------------------- | :------------- | :------------- | | Three Months Ended Sep 30 | 0.216 (provided) | 0 (provided) | | Nine Months Ended Sep 30 | 1.1 (provided) | 1.5 (provided) | - Cash provided by financing activities is mainly attributed to proceeds from the exercise of options and warrants into shares[29](index=29&type=chunk) [Cash and Cash Equivalents](index=5&type=section&id=Cash%20and%20Cash%20Equivalents) CollPlant maintained a strong cash position with **$29 million** in cash and cash equivalents as of September 30, 2023, providing an estimated cash runway of at least **two years** - Cash and cash equivalents as of September 30, 2023, were **$29 million**[2](index=2&type=chunk)[28](index=28&type=chunk) - Based on current estimates, the cash balance represents a company cash runway of at least **two years** of operation as of November 2023[2](index=2&type=chunk)[28](index=28&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=4&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP to non-GAAP financial measures, providing adjusted operating expenses, loss, net loss, and EPS by excluding non-cash items [Non-GAAP Operating Expenses and Loss](index=4&type=section&id=Non-GAAP%20Operating%20Expenses%20and%20Loss) CollPlant's non-GAAP operating expenses and loss for both Q3 and nine-month periods showed improvements or slight increases, reflecting adjustments for non-cash expenses Non-GAAP Operating Expenses Comparison (U.S. dollars in thousands) | Period | 2023 Non-GAAP Operating Expenses ($ thousand) | 2022 Non-GAAP Operating Expenses ($ thousand) | | :---------------------- | :------------------------------------------ | :------------------------------------------ | | Nine Months Ended Sep 30 | 10,560 | 11,047 | | Three Months Ended Sep 30 | 3,860 | 3,668 | Non-GAAP Operating Loss Comparison (U.S. dollars in thousands) | Period | 2023 Non-GAAP Operating Loss ($ thousand) | 2022 Non-GAAP Operating Loss ($ thousand) | | :---------------------- | :---------------------------------------- | :---------------------------------------- | | Nine Months Ended Sep 30 | (1,118) | (11,144) | | Three Months Ended Sep 30 | (4,095) | (3,823) | [Non-GAAP Net Loss and EPS](index=4&type=section&id=Non-GAAP%20Net%20Loss%20and%20EPS) Non-GAAP net loss for the nine months ended September 30, 2023, significantly decreased to **$1.2 million**, reflecting a substantial improvement, while the Q3 non-GAAP net loss slightly increased Non-GAAP Net Loss and Basic Loss Per Share Comparison (U.S. dollars in thousands) | Period | 2023 Non-GAAP Net Loss ($ thousand) | 2022 Non-GAAP Net Loss ($ thousand) | 2023 Non-GAAP Basic EPS ($) | 2022 Non-GAAP Basic EPS ($) | | :---------------------- | :---------------------------------- | :---------------------------------- | :-------------------------- | :-------------------------- | | Nine Months Ended Sep 30 | (1,239) | (11,247) | (0.11) | (1.02) | | Three Months Ended Sep 30 | (3,957) | (3,734) | (0.35) | (0.34) | [Explanation of Non-GAAP Measures](index=13&type=section&id=Explanation%20of%20Non-GAAP%20Measures) CollPlant uses non-GAAP measures, excluding non-cash expenses like share-based compensation, to provide supplemental performance information and compare historical results - Non-GAAP financial measures exclude the effects of non-cash expense for share-based compensation to employees, directors and consultants, and change in operating lease accounts[44](index=44&type=chunk) - Management believes these non-GAAP measures provide meaningful supplemental information regarding the Company's performance, enhancing the ability to evaluate operating costs, net income (loss), and EPS, and to compare them to historical results[44](index=44&type=chunk) - The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for financial information prepared and presented in accordance with GAAP[66](index=66&type=chunk) [Additional Information](index=6&type=section&id=Additional%20Information) This section provides background on CollPlant, webcast details, forward-looking statement disclaimers, and contact information [About CollPlant](index=13&type=section&id=About%20CollPlant) CollPlant Biotechnologies is a regenerative and aesthetic medicine company specializing in **3D bioprinting** and medical aesthetics, using proprietary rhCollagen technology - CollPlant is a regenerative and aesthetic medicine company focused on **3D bioprinting** of tissues and organs, and medical aesthetics[42](index=42&type=chunk) - The Company's products are based on its rhCollagen (recombinant human collagen) produced with CollPlant's proprietary plant-based genetic engineering technology[42](index=42&type=chunk) - In **2021**, CollPlant entered into a development and global commercialization agreement for dermal and soft tissue fillers with Allergan, an AbbVie company[64](index=64&type=chunk) [Webcast and Conference Call Information](index=6&type=section&id=Webcast%20and%20Conference%20Call%20Information) CollPlant provided details for its Q3 2023 earnings conference call and webcast, including dial-in numbers and a link for live and replay access - A conference call was scheduled for **November 29, 2023**, at **10:00 am U.S. ET** to discuss the financial results[2](index=2&type=chunk) - Dial-in information for U.S., international, and Israel investors, along with a live webcast link and replay availability, were provided[30](index=30&type=chunk)[55](index=55&type=chunk) [Forward-Looking Statements](index=14&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding CollPlant's future performance and plans, subject to risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied[48](index=48&type=chunk)[69](index=69&type=chunk) - Many factors could cause actual results to differ, including significant losses, need for additional capital, timing and cost of clinical trials, regulatory actions, commercial success, strategic partnerships, manufacturing reliance, intellectual property, economic conditions, and geopolitical events like the Israel-Hamas war[48](index=48&type=chunk) - CollPlant does not undertake and specifically disclaims any obligation to update or revise any forward-looking statements[48](index=48&type=chunk) [Contacts](index=14&type=section&id=Contacts) Contact information for CollPlant's Deputy CEO & CFO, Eran Rotem, and investor relations through LifeSci Advisors - Eran Rotem, Deputy CEO & CFO, can be contacted at **+972-73-2325600** or Eran@collplant.com[70](index=70&type=chunk) - For investor inquiries, John Mullaly of LifeSci Advisors can be reached at jmullaly@lifesciadvisors.com[70](index=70&type=chunk)

Financial Data and Key Metrics Changes - For Q2 2023, GAAP revenues were $10.2 million, a significant increase from $66,000 in Q2 2022, primarily due to a $10 million milestone payment from AbbVie [51][52] - GAAP gross profit for Q2 2023 was $9.6 million compared to $23,000 in Q2 2022, positively impacted by the AbbVie milestone [53] - GAAP net income for Q2 2023 was $5.8 million or $0.51 per share, compared to a net loss of $4.3 million or $0.39 per share in Q2 2022 [61] Business Line Data and Key Metrics Changes - The dermal filler product candidate with AbbVie is in clinical phase and has the potential to create a paradigm shift in the fillers market, with additional milestone payments of up to $26 million expected [39][52] - The regenerative breast implants program is set to initiate a second large animal study by year-end to evaluate safety and efficacy [40] Market Data and Key Metrics Changes - The global dermal filler market is currently valued at approximately $5.5 billion, with an expected annual growth rate of 10% [7] - Allergan, a key player in the dermal filler market, generates annual sales between $1.5 billion and $2 billion [9] Company Strategy and Development Direction - The company aims to lead in regenerative medicine, focusing on developing advanced organ and tissue solutions using non-animal derived recombinant human collagen technology [38] - Collaborations with industry leaders, such as Stratasys, are intended to enhance the development of biofabrication solutions for regenerative breast implants and other tissues [42][43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing collaboration with AbbVie and the potential for future royalties and milestone payments [39][52] - The company is committed to advancing its ESG initiatives and has hired an expert to lead these efforts [50] Other Important Information - As of June 30, 2023, the company had $22.4 million in cash, which does not include the $10 million milestone payment received in July [56] - The company has no outstanding debt and expects its cash reserves to last for at least two years based on current operational expenses [30] Q&A Session Summary Question: What is the regulatory pathway for the breast implant program? - The regulatory pathway is likely a PMA pathway, with a combination of CDRH and CBER involved, focusing on safety and efficacy in upcoming studies [58] Question: When can the PMA process start? - It is premature to determine the timeline for the PMA process as the company needs to complete the upcoming study first [64] Question: How does the company plan to monetize the gut-on-a-chip program? - The monetization strategy for the gut-on-a-chip program is still being developed, with potential for providing services to the drug developer market [65]

CollPlant Biotechnologies Ltd. (NASDAQ:CLGN) Q1 2023 Earnings Conference Call May 24, 2023 10:00 AM ET Company Participants Dory Kurowski - LifeSci Advisors Yehiel Tal - CEO Eran Rotem - Deputy CEO and CFO Conference Call Participants Ben Haynor - Alliance Global Partners Swayampakula Ramakanth - H.C. Wainwright Operator Welcome to the CollPlant Biotechnologies Investor Conference Call to discuss Financial Results for the First Quarter of 2023 and Corporate Updates. I'd now like to turn the call over to you ...