Quarterly report pursuant to Section 13 or 15(d)

SEGMENT INFORMATION

v3.19.1
SEGMENT INFORMATION
3 Months Ended
Mar. 31, 2019
SEGMENT INFORMATION [Text Block]

NOTE 3 - SEGMENT INFORMATION

            The Chief Executive Officer ("CEO") is the Company’s chief operating decision-maker ("CODM"). Management has determined that there are two operating segments, based on the Company's organizational structure, its business activities and information reviewed by the CODM for the purposes of allocating resources and assessing performance.

POC Business

            Through the POC business, the Company is focused on the development of proprietary cell and gene therapies, including the autologous trans-differentiation technology, and therapeutic collaborations and licensing with other pre-clinical and clinical-stage biopharmaceutical companies and research and healthcare institutes.

CDMO

            The CDMO platform is comprised of a specialization in cell manufacturing and development and includes two types of services to its customers: (i) manufacturing and development services and (ii) cGMP contract manufacturing services. The CDMO platform operates through Masthercell Global, which currently consists of MaSTherCell in Belgium, Atvio in Israel, CureCell in South Korea, and Masthercell U.S. LLC in the United States, each having unique know-how and expertise for manufacturing in a multitude of cell types.

            The Company does not review assets by segment, therefore the measure of assets has not been disclosed for each segment.

            Segment data for the three months ended March 31, 2019 is as follows:

          POC     Corporate and        
    CDMO     Business     Eliminations     Consolidated  
                (in th ousands)        
Revenues from external customers $ 8,573   $   -   $ (1,272 ) $ 7,301  
Cost of revenues   (4,709 )   -     698     (4,011 )
Segment gross profit (loss)   3,864     -     (574 )   3,290  
Research and development                        
expenses, net   (293 )   (2,378 )   455     (2,216 )
Operating expenses   (3,036 )   (1,815 )   119     (4,732 )
Other income   37     -           37  
Segment operating profit (loss) $ 572   $ (4,193 )       $ (3,621 )
                         
Adjustments to presentation of segment Adjusted EBIT:                        
Depreciation and amortization   (933 )   (5 )         (938 )
Segment performance $ (361 )   (4,198 )       $ (4,559 )

            Reconciliation of segment performance to loss for the three months ended March 31, 2019:

    Three-Months  
    Ended  
    March 31,  
    2019  
    (in Thousands)  
Segment performance $ (4,559 )
Stock-based compensation   (1,073 )
Stock-based compensation to First Choice   ( 2,641 )
Financial expenses, net   (140 )
Loss before income tax $ (8,413 )

 Segment data for the three months ended February 28, 2018 is as follows:

          POC     Corporate and        
    CDMO     Business     Eliminations     Consolidated  
    (in tho usands)  
Revenues from external customers $ 3,181   $   -   $ (545 ) $ 2,636  
Cost of revenues   (1,725 )   -     240     (1,485 )
Segment gross profit (loss)   1,456     -     (305 )   1,151  
Research and development                        
expenses, net   -     (887 )   305     (582 )
Operating expenses   (1,080 )   (1,356 )         (2,436 )
Other income   316     -           316  
Segment operating profit (loss) $ 692   $ (2,243 )       $ (1,551 )
                         
Adjustments to presentation of segment Adjusted EBIT:                        
Depreciation and amortization   (595 )   (2 )         (597 )
Segment performance $ 97     (2,245 )       $ (2,148 )

            Reconciliation of segment performance to loss for the three months ended February 28, 2018:

    Three-Months  
    Ended  
    February 28,  
    2018  
    (in Thousands)  
Segment performance $ (2,148 )
Stock-based compensation   (1,090 )
Financial expenses, net   (2,681 )
Share in losses of associated company   46  
Loss before income tax $ (5,873 )

            Segment data for the one-month transition period ended December 31, 2018 is as follows:

          POC     Corporate and        
    CDMO     Business     Eliminations     Consolidated  
    (in th ousands)  
Revenues from external customers $ 2,377   $   -   $ (525 ) $ 1,852  
Cost of revenues   (1,314 )   -     167     (1,147 )
Segment gross profit (loss)   1,063     -     (358 )   705  
Research and development expenses, net   (78 )   (1,573 )   301     (1,350 )
Operating expenses   (776 )   (600 )   57     (1,319 )
Other income   -     -           -  
Segment operating profit (loss) $ 209   $ (2,173 )   -   $ (1,964 )
                         
Adjustments to presentation of segment Adjusted EBIT:                        
Depreciation and amortization   (264 )   (1 )         (265 )
Segment performance $ (55 )   (2,174 )       $ (2,229 )

Reconciliation of segment performance to loss for the transition period, one-month ended December 31, 2018:

    Transition Period, one-  
    month ended December  
    31, 2018  
    (in Thousands)  
Segment performance $ (2,229 )
Stock-based compensation   (734 )
Financial expenses, net   (27 )
Loss before income tax $ (2,990 )

Geographic, Product and Customer Information

            Most of the Company's revenues and long-lived assets are located in Belgium through its subsidiary, MaSTherCell. Net revenues from single customers from the CDMO segment that exceed 10% of total net revenues are:

      Three Months Ended     Transition Period One-month Ended  
      March 31, 2019     February 28, 2018     December 31, 2018  
      (in thousands)  
                     
  Customer A $   -   $ 894   $   -  
                     
  Customer B $ 2,215   $ 957   $ 593  
                     
  Customer C $ 1,554   $ 971   $ 267  
                     
  Customer D $ 765   $   -   $ 266  
                     
  Customer E $ 1,308   $   -   $ 266