Biostage Reports Fourth Quarter and Fiscal Year 2021 Financial Results

Biostage, Inc. (OTCQB: BSTG) ("Biostage" or the "Company"), a cell-therapy biotechnology company with successful "first-in-human" experience in treating esophageal cancer (conducted at the Mayo Clinic and published last August) and FDA approval to commence a clinical trial of the Biostage Esophageal Implant for severe esophageal disease including cancer, today announced its financial results for the three months and year ended December 31, 2021.

The Company will be hosting a conference call on Friday, April 1, 2022 at 9;00 A.M. Eastern Time. You can access the live conference call by dialing the following phone numbers toll free 877-407-8293 or international +1 201-689-8349. 

For the three months ended December 31, 2021, the Company reported a net loss of $5.9 million, or $0.55 per share, as compared to a net loss of $1.0 million, or $0.12 per share, for the three months ended December 31, 2020. The $4.9 million quarter-over-quarter increase in net loss was due primarily to a charge of approximately $3.3 million relating to the contingency matter for our ongoing litigation for a wrongful death complaint and related matters more fully described in Note 9 to our consolidated financial statements and an increase in legal costs of approximately $1.3 million for fees for filing claims against our insurance carrier to seek continuance of insurance coverage for the same litigation. In addition, research and development costs increased $0.2 million and the Company recognized lower grant income for qualified expenditures from the SBIR grant of $0.1 million as the grant expired effective September 30, 2021.  

Net loss increased approximately $3.1 million to approximately $8.0 million, or $0.79 per share, for the year ended December 31, 2021 as compared to approximately $4.9 million, or $0.55 per share, for the year ended December 31, 2020.

The $3.1 million year-over-year increase in net loss was due primarily to a charge of approximately $3.3 million relating to the contingency matter for our ongoing litigation for a wrongful death complaint and related matters more fully described in Note 9 to our consolidated financial statements and an increase in legal costs of approximately $1.3 million for fees for filing claims against our insurance carrier to seek continuance of insurance coverage for the same litigation. These increases are offset, in part, by approximately $0.8 million of lower employee and share-based expenses due to the separations of our former chief executive and chief financial officers during 2020.

In addition, research and development costs decreased by $0.5 million Notes Payable were forgiven resulting in a $0.4 million gain and grant income decreased by $0.2 million which account for the change in net loss year-over-year.

As of December 31, 2021, the Company had operating cash on-hand of $1.2 million, a decrease of $0.2 million from the prior year. During the year ended December 31, 2021, the Company used net cash in operations of $2.6 million, which was offset, in total, by $2.8 million of proceeds from private placement transactions that resulted in the issuance of 1,372,464 shares of our common stock and warrants to existing investors.

We expect that our operating cash on-hand as of December 31, 2021 of $1.2 million will enable us to fund our operating expenses and capital expenditure requirements into early third quarter of 2022.