Good day, everyone. Welcome to the Polarity Fourth Quarter 2018 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Rich Haerle. Please go ahead.

Thank you, Nicole. Good morning, and welcome to the PolarityTE Financial Results and Corporate Update Conference Call for the Fiscal Fourth Quarter of 2018. I'm Rich Haerle, Vice President of Investor Relations. With me today are Dr. Denver Lough, Chairman and CEO; Paul Mann, CFO; Dr. Nikolai Sopko, Chief Scientific Officer; Dr. Ned Swanson, COO; and Matt Kemp, Chief Commercial Officer. By now, you should have seen our earnings press release. The corresponding webcast and slide deck will be made available on our website in the Investor Relations section following this call. I'd like to remind investors that this call will include forward-looking statements within the meaning of the safe harbor provisions of the Private Securities and Litigation Reform Act of 1995 including, but not limited to, the types of statements identified as forward-looking in the most recent reports on Forms 10-K and 10-Q, including our Annual Report on Form 10-K for the year ended October 31, 2018, that will be filed soon, all of which will be available on our website in the Investor Relations section. These forward-looking statements represent our views only as of the date made, involve substantial risks and uncertainties, including many that are beyond our control. Please note that actual results could differ materially from those stated in our forward-looking statements. For a further description of the risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements as well as risks relating to our business, see our periodic reports filed with the SEC. I'd like to highlight to participants that this call is being recorded and we are making this call available to investors and the media via webcast. This call is the property of PolarityTE. Any redistribution, retransmission or rebroadcast of this call in any form without PolarityTE's expressed written consent is strictly prohibited. I would now like to turn the call over to Dr. Denver Lough, Polarity's Chairman and CEO, for highlights and key events for this fiscal fourth quarter financial results as well as a corporate update.

Thank you, Rich, and thank you to all of our shareholders for your continued support and those listeners joining us today for this fiscal fourth quarter financial results and corporate update call for 2018. We're excited to report on our activities at PolarityTE over this last year of 2018 as well as a brief overview of where we are going in 2019 and beyond. Matt Kemp, Polarity's Chief Commercial Officer, will provide more detail on our commercialization progress. But I'm happy to report that we witnessed significant quarter-over-quarter total revenue growth, SkinTE revenue growth, purchase agreement growth, account growth, and sales representative growth. While I'm very proud of what we've accomplished in 2018, we believe that progress provides a foundation that will make 2019 a pivotal year in our company's history. As we look to 2019, there are a number of milestones that I look forward to, including: one, the continued commercial rollout of SkinTE in United States, which will now be supported with our regional sales force. Two, with OsteoTE now registered with the FDA, the implementation of a segmented limited market release initially focusing on craniomaxillofacial and foot and ankle providers with other orthopedic fields to follow. Three, the build out of nodal manufacturing systems in high-volume regions and even within high-volume medical facilities. Four, looking forward to the translation of Polarity's more advanced programs, such as our ARC programs and our RTD programs. Please go to Slide 5. As many of you know, the company has sought primarily to change the paradigm in the design, the development, and practice of regenerative and neo-generative therapies. In doing so, we've sought to change, to disrupt the concept of regenerative medicine away from simply hope and dreams and into something real, something of volume, evolving and something utilized. Since forming the company, we made it our priority to develop something pragmatic, something tangible, something that can truly impact people's lives, and something that can significantly enhance and replace the current clinical standard of care. We've also sought to design and develop these technologies and products into something easy and simple to use so that providers whether surgeon, medical doctor, physician assistant, or nurse can more efficiently treat more patients more effectively in a variety of healthcare settings and systems. We seek to reduce barriers so that all patients have the ability to receive complete and comprehensive care as it relates to treatments related to their conditions and significant health challenges. In addition to reducing these functional and practice barriers, we also sought to deliver a cost effective answer to real problems by providing technologies at lower price points as well as preventing the accumulated cost of stocking products and inventory for providers and healthcare facilities. And last but not least, we at Polarity have sought to deliver a rational reimbursement mechanism for our technology so that patients, providers, and other payers can receive real outcomes and true value and improved health economics so the cost savings can be passed on to those that matter in the already complicated and capitated healthcare system. And it's with these goals and our mission of creating a company by providers, for providers, and the patients of that we serve that I believe we at PolarityTE have seen continued success since this young company was launched just now 2 years ago. Now having reiterated our cause, our priority, and our core foundational goals, I'd like to take this brief moment and highlight some of Polarity's achievements and continued progress, which has occurred over this last year of 2018. First, I would like to highlight the build-out of an incredible Polarity team, which includes now over 160 employees across the country, representing 85 advanced degrees. Polarity's Board of Directors has grown to include now 9 members, all of whom are extremely experienced. Our most recent board addition was Minnie Baylor-Henry, who possess a strong regulatory experience as a worldwide Vice President of Regulatory Affairs at Johnson & Johnson as well as holding several positions, including Director and Brands Chief at the FDA as well as National Director of Regulatory affairs at Deloitte. And it's with this Polarity team, we continue to see success across the company from research and development, manufacturing and production, the logistics and now into commercialization of sales. In the second half of 2017, we registered our first commercial product, SkinTE, which prepared us for a strategic limited market release in the first quarter of 2018. To progress from basic research and development to commercial production in just 18 months is a tremendous testament in the ability of our amazing scientific, clinical, manufacturing, quality, and regulatory affairs teams. Additionally, it is with this foundation in 2018 we were able to successfully initiate a strategic and staged commercial launch process for our SkinTE cell tissue product while conducting in-parallel head-to-head clinical trials comparing SkinTE to the current clinical standard of care, skin grafts. As I'm sure you're aware, in 2018, we registered OsteoTE, our bone regeneration product and we hold similar expectations for early commercialization as we move into 2019 and beyond. With this transition into a commercial biotechnology company, we have built out a comprehensive commercial team now led by Mr. Matthew Kemp, our recently appointed Chief Commercial Officer, who was previously with pharmaceutical device and cell therapy leaders such as Allergan, Zimmer Biomet, and Dendreon. Mr. Kemp's commercial sales team, which include over 24 account managers and sales team representatives, bring significant experience and established networks to Polarity's sales force as we head into 2019. We look forward to seeing increasing utilization of SkinTE now that Polarity has recruited a sales force and spent the last two months of 2018 conducting comprehensive sales education and training in preparation for 2019. We have recently added an experienced leader to our Department of Market Access, Ms. Sharon Whalen, who was previously with industry leaders such as Acelity and Allergan. Ms. Whalen has been appointed Vice President of Market Access and Product Reimbursement and brings with her years of experience in reimbursement and pricing strategy. She and her department have continued to see success with SkinTE reimbursement in a range of inpatient and outpatient settings, as well as received a CMS reimbursement product code or Healthcare Common Procedure Coding System code, also known as a HCPCS code for SkinTE, which became active in January 1, 2019. Also in 2018, we've continued to see successful results from our inpatient head-to-head clinical trials comparing SkinTE, skin grafts in multiple national burn centers as well as in our outpatient chronic wound lower extremity pilot trials, which have shown complete healing of diabetic foot ulcers and venous leg ulcers in significantly less time than advanced wound care in a variety of clinical standards. It is with these results that we will be initiating additional randomized controlled trials, RCTs, which specifically target the utilization of the SkinTE technology in outpatient settings to show improved clinical outcomes and enhanced health economics. We've also continued to see successful formal published abstracts and presentations at national and international clinical and scientific conferences, which include accolades and awards, including the best presentation at the 17th annual American Professional Wound Care Association national conference. We look forward to the upcoming publications from providers on their clinical outcomes across complicated case studies and diverse case series, as well as more comprehensive pilot trial evaluations and prospective clinical trials. In 2018, we were able to design, develop and build out our first centrally scalable biomedical manufacturing facility in Salt Lake City in 2018, which is now capable of national distribution of our cell tissue products. In the first half of 2018, we moved most of our R&D, manufacturing, quality and regulatory affairs to our new 250,000 square-foot multifacility campus in Salt Lake City, referred to as Polarity central campus. And it is with this completed construction and validation of our first series of high throughput manufacturing suites, which were designed not just to support the manufacturing of SkinTE and OsteoTE but also other core TE technologies and pipeline products. In addition to our strategic biomedical manufacturing facilities located at the Polarity central campus, we've also initiated the design, development and strategic planning and build-out of the PolarityTE manufacturing nodes, which will allow for Polarity to strategically place cell tissue manufacturing facilities not only within high-volume national and international regions, but also within high-volume medical facilities themselves. We believe that this form of advanced cell therapy as a new form of point-of-care treatment will deliver an entirely new form of autologous cell therapy to a full spectrum of providers and patient types. These nodes permit us to have basic form of protective redundancy capabilities in manufacturing and quality systems, as well as prepare us for agile and flexible development of international nodal systems as we continue discussions with international partners and foreign entities. We've continued the effective advancement and efficient progression of PolarityTE's pipeline, platforms and technologies across three major research and development program groups, including our core TE cell therapy programs, our related technology derivatives, or RTD program, and our Advanced Research Center programs, also known as our ARC programs. It is with our comprehensive research and development cores, advanced R&D equipment and highly skilled research teams that we're able to streamline high-throughput, high-content research data in order to optimize the translation of our technologies to viable products, such as SkinTE and OsteoTE, which were both developed, tested and translated and validated for commercial use within approximately 1 year. In 2018, we performed a strategic growth acquisition of the region's only preclinical GLP and USDA-regulated contract research organization. The fully operational CRO business facility and team is expected to continue to deliver high-quality work for outside parties, while the advanced PolarityTE preclinical product prototypes and technologies will be separately monitored and developed by our Johns Hopkins recruit and Chief Veterinary Officer, Caroline Garrett. Recognizing the synergy and accelerated potential which exist within a variety of supported channels, we've also announced the formation and leadership of our Polarity contract services group, which is headed by Dr. Jon Burrows, former CEO of OncoPlex Diagnostics Incorporated, which was successfully acquired by NantOmics in 2015. We look forward to the future success of Polarity contract services group, as well as providing updates to the details of this group on our next quarterly update call in 2019. Also in 2018, we successfully developed PolarityTE's digital phase through the development and deployment of the PolarityTE RTA, or Real-Time Assistant, as well as our national logistical footprint, which allows us real-time communication between Polarity and providers as well as real time tracking of our products anywhere, anytime, 24 hours a day, 7 days a week. As it relates to PolarityTE's intellectual property, we remain excited with where we are in the patent process and are successfully continuing the development and growth of our intellectual property estate. The company continues to actively file patent and trademark applications in the U.S. and around the world, register copyrights and maintain trade secrets to protect the intellectual property and build out its IP portfolio as it relates to core cell tissue biotechnologies; related technology derivatives, or RTDs; and Advanced Research Centers programs, also known as ARC. The PolarityTE trademark has now been registered in 14 countries, including the United States. We now have a number of patent applications pending in the United States and around the world, all of which are currently alive and being pursued. Neither we nor any patent office has negatively terminated or abandoned the process of any applications we have filed. Anyone interested in the status of our published U.S. patent applications can follow the process in our communications with the USPTO and on the USPTO's public PAIR website. European Patent Office also provides public access to our U.S. and form filings on published applications. With all that said, we are really looking forward to 2019 and beyond and particularly excited about, one, the continued commercialization of SkinTE as we advance towards positive cash flow, the initiation of SkinTE trial to assess health economics in the outpatient setting, a continued inflection of clinical outcome and representations at industry conferences, as well as in peer-review journals, the limited market release and commercialization of OsteoTE, our bone regeneration product, global expansion of our commercial footprint in Asia and Europe, development of nodes in the United States to enhance regional production adoption and turnaround times, the completion of our current head-to-head inpatient trial comparing SkinTE to the standard of care, split-thickness skin grafts, the advancement of our RTD and ARC programs consistent with our focus on pursuing cutting-edge technology with a goal of transforming how medicine is currently practiced, and the completion of the CartTE clinical studies as we look forward to 2019 and position the company for continued growth. Please go to Slide 6. I know that it seems like a lot has taken place over the last year, and that's because a lot has, and we expect to accomplish even more in 2019. In order to go into more granular detail on certain aspects of the company, I'd like to turn the call over to Mr. Paul Mann, Polarity's Chief Financial Officer, for his report on the company's financial updates.

Thank you, Denver. And good morning, everyone. We issued a press release earlier today that include the financial update, which I'll briefly summarize. Please go to Slide 7. For the fiscal fourth quarter of 2018, which concluded on October 31, 2018, we reported over $1.1 million in total revenues, which includes revenue from SkinTE and our contract services organization. Revenues from SkinTE during the quarter were $429,000. We're very excited about the initial market introduction of our first product, SkinTE. As Denver mentioned, we started the commercial rollout in the middle of 2018 and we're now introducing SkinTE with a sales force of over 20 to the market. I would like to point out that this figure understates the end market demand for the product. At this stage during the product's regional commercial rollout, which Matt Kemp will discuss in more detail, we often initially provide hospitals with products for trial evaluation, which introduces our product to the facility but not generate revenue. As Matt will explain, following evaluation, we transition to a commercial contract, which generates revenues. And more for SkinTE, greater than 70% of all wounds treated with SkinTE when measured by surface area, have been trial evaluation products. Research and development cost during the fiscal fourth quarter were $4.9 million, which include $1.4 million of non-cash charges. Our research and development expense varied during the past quarters. It was mainly due to the evolution from a purely research and development company to a commercial company. Many expense items previously categorized as research and development are now better characterized as commercial or manufacturing. In the fiscal fourth quarter 2018, cash used in operations was $11.5 million, approximately $3.8 million per month compared to $3 million in the fiscal fourth quarter of 2017, which is in line with our expectations given the growth in our manufacturing and commercial infrastructure. We finished the fiscal fourth quarter with cash and cash equivalents of $71 million on hand. We expect cash used in operation to increase very modestly from the current levels. We expect our cash used in operations to remain below $5 million per month during the next few quarters. Regarding capital expenditure, we've already made significant investments in our manufacturing footprint in Salt Lake City. We believe we have some of the best-equipped research facilities in the United States, and we don't expect any near-term significant capital projects in our headquarters. We believe we're adequately capitalized and have sufficient cash to fund operations beyond the 12 months. During the last 12 months, the finance team at PolarityTE have worked extremely hard to put in place the correct processes and structures that the company will require to become a global biotech company. The company has grown and now has multiple geographic locations, domestic manufacturing footprint, and we now have customers and revenues. During this period, the finance team has grown from 2 individuals to a team of 14, including a new Vice President of Finance, retro accounting, new controllers, internal control managers, purchasing managers and account clerks. Most of these individuals were hired during the second half of 2018 fiscal year. Please move to Slide 8. As we mentioned during our fiscal third quarter conference call, next year we'll move into December 31 fiscal year end. We'll file a transition report on Form 10-K covering the two month period ended December 31, 2018. Consequently, we will file quarterly reports on Form 10-Q for the quarters ending March 31, June 30, September 30. Please turn to Slide 9. I'm very excited about what PolarityTE has in 2019. With that, I'll hand over to Matt Kemp, our newly hired Chief Commercial Officer; and Dr. Ned Swanson, our Chief Operating Officer, to provide further insights into the ongoing commercial launch. Please turn to Slide 10.

Good morning. Thanks, Paul. Thank you for giving me the opportunity to discuss our SkinTE commercialization activities. I joined PolarityTE late last year, and I'm extremely excited to lead our commercial effort. I have nearly 20 years of experience in health care commercialization, with a focus on sales and marketing. Over the last decade, my career has centered on realizing the potential of personalized and regenerative medicine with assignments at companies like Allergan, Zimmer Biomet and most recently, Dendreon. Over that time frame, I built and led commercial organization with over 100 field team members and have been responsible for product programs with revenue in excess of $400 million. I'm very excited to have the opportunity to lead the Polarity sales organization. Our current product, SkinTE, by itself is somewhat of a once in a lifetime opportunity for someone involved in the health care space. It's an innovative transformational solution to address the needs of a very large patient population, which is a fantastic position for us to be in commercially. And in addition, our therapeutic platform is evolving with a robust pipeline of solutions for bone, cartilage, nerve and other conditions, which we're excited about bringing to the market over time. Our SkinTE business initially rests with large medical facilities, which contain regional trauma and burn centers, as well as those which possess high-volume wound centers. Within these types of medical facilities or accounts, there's often a specific and somewhat linear process one must follow to first present a new product like SkinTE and then begin progressive - the progressive utilization of it. The first step is to identify potential first users or early adopters in an account. These first users are typically physicians, which are familiar with innovations and evolving therapies in the field. Once identified and educated on the technology and the appropriate wound type, the physicians become advocates in bringing the product into the health care facility. Typically, health systems review and adopt new technologies through the approval of a value analysis committee or VAC. Every single hospital you'd likely ever driven by or visited has such a VAC and its purpose is to ensure every new product introduced or purchased provides a unique value proposition. Typically, the VAC committee meets monthly or quarterly to evaluate new products. The company provides product information to the committee and it is reviewed by these experts. To date, we've achieved 100% VAC approvals across the company, and we're now in the process of gaining access to over 336 facilities. This review process typically takes 4 to 6 months depending on the hospital or network of hospitals we are approaching. Once VAC approval is secured, we can engage with the purchasing department to finalize negotiations on pricing and other contractual matters. Before using SkinTE commercially, many accounts ask for a product trial evaluation prior to completing a formal purchase agreement. Where necessary, we'll create a trial evaluation agreement and provide trial evaluation product for free to run it through the account system. Because of SkinTE's intended use and our healing profile, the trial evaluation period can last an additional 3 to 6 months before paid product utilization begins. Finally, prior to the commercial sale of SkinTE, the purchase agreement is being finalized, which so far has occurred in all cases where we've achieved VAC approval. This process again takes time, so we typically ask the site to begin the process of patient identification, so that when the evaluation period ends, we're able to rapidly deliver this new treatment approach to the patients who will most benefit. So in summary, we're tracking VAC submissions and approvals in key burn and trauma centers. Most VAC approval we're actively engage in these accounts, bringing forth purchase agreements and, where necessary, trial evaluation product as we move to establish SkinTE as the new standard of care. So in summary, we're tracking VAC submissions and approvals in key burn and trauma center - in calendar Q3, we completed what we referred to as our limited market release. During this phase of our staged commercial launch process, we fine-tune our logistics piece, develop physician champions and initiate the formal transition from product trial evaluation at select accounts with paid SkinTE deployments. By the end of Q3, we achieved $244,000 in SkinTE revenue with 37 active accounts in place and 287 accounts moving through the approval process. Based on our success in early Q3, we initiated of regional market release in July. To support this effort, towards the end of the fiscal fourth quarter, we hired a field team, which now includes 24 sales representatives and clinical operations managers and 6 market access and sales support team members, who are focused on generating and supporting increased SkinTE demand. During this phase, our goal is to significantly expand the number of sites across the country, actively identifying and treating patients with SkinTE. At the end of fiscal fourth quarter we generated $429,000 in SkinTE revenue and increased the number of active accounts to 56, and we have accelerated the number of accounts moving through the approval process to 336. Our experience during this limited market release period tells us it takes approximately 6 months for a field team member to generate their first paid SkinTE cases. This is a combination of variable VAC approval process time lines and the need for trial evaluation product. Since the majority of the team was hired in the October, November time frame, we should see these efforts begin to pay off in Q2 of 2019. Moreover, we strategically pulled the team out of the field several times over the past - over the past few months of this year - of last year in order to complete comprehensive product technology training programs to support our market release. As we continue our regional market release launch approach resulting in a full national market release over the course of the upcoming 24 months, we'll likely experience volatility in the volume of SkinTE deployment as we build the number of active commercial sites. That said, we're looking for consistent month-over-month, quarter-over-quarter growth in terms of activities that lead to revenue. And for us, are the number of VACs submitted, VACs approved and trial evaluation agreements and purchase agreements signed. Most of these activities are required before the commercial utilization of SkinTE can occur, which will translate into revenue generation. 2019 will be a pivotal year for SkinTE as we move beyond the market's initial evaluation of this pioneering treatment for the repair, reconstruction and replacement of full thickness skin. In calendar Q4 '18, we saw a significant increase in the number of VAC approvals and completed trial evaluation agreements, both in the inpatient and outpatient settings, which led to a doubling of the number of product deployments compared to calendar Q3. We're encouraged about the progress to date and begin 2019 focused on expanding the growing universe of active commercial accounts who can offer this transformational therapy to patients in need. With that, I would like to invite Dr. Ned Swanson, our Chief Operations Officer, to share with you some specific detail on our SkinTE commercialization efforts in 2019.

Please go to Slide number 11. Thank you, Matt, and thank you to all of those joining us on the call today. Before looking forward, I'd like to briefly look backwards. The first SkinTE clinical case was performed slightly over a year ago. In that brief period of time, we have heard more than once from a provider, a patient or a patient's family that SkinTE has saved a life, saved a limb and given patients their normal back. I say this to remind everyone on the call why this company was created. This company was created by a passionate group of physicians and researchers that were tired of the standards of care in medicine and tired of iterative technologies, iterative technologies with little insight into the trenches of medicine and little insight into the world of problems that patients suffer with on a daily basis that had no promising solution. We were tired of telling patients we have nothing left to offer them and that they would have to make do and find a way to live with their problem. With SkinTE to have potentially saved lives, saved limbs and returned patients to their normal life within its first year of clinical use, I'm personally more motivated and passionate about our trajectory than the day we left clinical medicine in the pursuit of bringing this technology to clinical fruition. Ask yourself if what you just heard is meaningful to you as a person and if you believe it's meaningful to the world as a whole. At Polarity, we have over 160 employees who answer those questions with a resounding and unwavering yes and have passionately changed their careers and their lives to ensure that this technology realizes its full potential and impacts every life that it can. One of the most inspiring individuals I had the great fortune of meeting was Dr. Joseph Murray, a plastic surgeon whose research and passion led him to perform the first kidney transplantation in 1954. Prior to diving deeper into the nuts and bolts of our commercial strategy, I would like to read a few quotes from Dr. Murray. If you're going to worry about what people say, you're never going to make any progress. Blanket objection is not very reasonable to me. Any effort to control scientific advances is doomed to fail. And finally, kidney transplant seem so routine now, but the first one was like Lindbergh’s [ph] flight across the ocean. Changing preconceptions, challenging standards of care that have existed for centuries and changing the landscape of medicine were barriers Dr. Murray faced, and he relentlessly pursued the truth in spite of them. At Polarity, we're driven by the same relentless pursuit. We invite every one to be part of our relentless pursuit to change medicine. In fact, after the results achieved with SkinTE in just one year, we view this pursuit as our obligation. After hearing the statements I just made about the results we've witnessed in the first year of SkinTE, ask yourself if you think this technology, this company and the individuals driving this company will play a significant role in the field of medicine 5, 10, 20 or 50 years from now. We know that the SkinTE story has barely begun, never mind the entire Polarity story. With that said, back to the nuts and bolts. To dive deeper into our commercial strategy, I want to first touch on the three major segments of the wound care market, so please go to slide number 12. Namely, burn wounds, surgical reconstruction and traumatic wounds and chronic wounds. Based on the internal analysis composed of patient incidence and prevalence, procedure volume and average wound size, these segments represent total addressable markets with $3 billion, $23 billion and $24 billion, respectively within the United States. In this phase of our commercial efforts, we are prioritizing the burn and surgical reconstruction, traumatic wounds segments with a focus on initiating new accounts in burn centers and level I trauma centers in the United States. There are approximately 130 burn centers, of which approximately 100 reside within hospitals that are level I trauma centers. In total, there are approximately 230 level I trauma centers throughout the United States. Within the overlap of 100 burn centers within hospitals that are level I trauma centers, we are targeting a total of 230 unique hospitals to gain access to all burn centers and level I trauma centers. As of today, we have gained approval or have initiated the value analysis process within 30 burn centers, representing greater than 20% of all burn centers in the U.S., which we believe translate into continued execution on our commercial goals throughout 2019. Within burn wounds, SkinTE continues to achieve promising results. We have witnessed healing and wound coverage rates that have allowed patients to be discharged from the hospital significantly earlier to - compared to historical match controls found within the National Burn Repository Report, which is updated annually and aggregates 10 years of patient data across American burn centers. In addition, burn wounds treated with SkinTE have demonstrated the regeneration of full thickness skin with all of its natural layers and architecture with many patients achieving more functional outcomes and full range of motion when compared to their wounds that were treated with split-thickness skin grafts. Similarly, patients with traumatic wounds treated with SkinTE are achieving outcomes that are unprecedented with previous treatment options. We've consistently found that SkinTE is capable of covering exposed deep structures in traumatic wounds with a single application, including bone, tendon, cartilage and joints. Prior to SkinTE, traumatic wounds with exposed deep structures typically required extensive and complex reconstructive procedures, including free tissue transfers or free flats, which can take as long as 5 to 12 hours in the operating room to perform and require postoperative hospital stays of 3 to 7 days on average, often with nights in the ICU for monitoring. A single application of SkinTE, which usually takes less than an hour, can be performed by health care providers without highly specialized training and within any setting of care and is a dramatic shift in the treatment paradigm of these wounds with both the providers and patients. In addition, we've seen patients treated with SkinTE for traumatic wounds achieve normal contour restoration, range of motion and activities of daily living, which cannot always be said about the alternative reconstructive procedures used to treat these wounds, which often result in bulky tissue that hinders movement in activities that are taken for granted, like the ability to put a shoe on your foot. In addition to the traction experienced in the burn and surgical reconstructive wounds segments, over the last 6 months, we have seen increasing adoption and enthusiasm in the chronic wound space, including the treatment of diabetic foot ulcers and venous leg ulcers. This segment of the wound care market is vastly more diffused across thousands of wound care centers and clinics and composed of millions of patients, and we see this market as one that will provide continual growth of SkinTE over the long term. With that said, patients with chronic wounds treated with SkinTE has had wounds closed that have been recalcitrant to all alternative therapies for multiple years. And we've seen healing times in many diabetic foot ulcers and venous leg ulcers on the scale of 3 to 4 weeks, which is significantly shorter than healing times reported throughout the literature. In addition to lower extremity ulcers, we've recently seen extremely promising results in patients with pressure sores, which represents a massive patient population with no satisfactory treatment options in the large majority of cases. Again, we're encouraged and excited about the opportunity to make a significant and positive impact in the lives of these patients and hope to make SkinTE available to all the potential patients within the chronic wound market for years to come. Given the large patient populations we're aiming to serve with SkinTE, we've initiated the preliminary phases of scaling up our operations with regional manufacturing nodes in high volume metropolitan regions and in partnership with high-volume early adopter accounts. We view our long-term operational scale up to become a mix of large centralized manufacturing, such as our current biomedical manufacturing facility in Salt Lake City, combined with smaller manufacturing nodes, in essence creating a network or web of manufacturing. Regional manufacturing nodes create multiple opportunities for us as a company and for our active users, including faster product turnaround times, improved logistics, decreased COGS and partnership with health care institutions and providers. Notably, the build-out of regional manufacturing nodes accelerates the creation of SkinTE centers of excellence, which themselves will drive adoption, alignment with key accounts and serve as regional models to roll out SkinTE in a replicable fashion to standardize and optimize treatment algorithms. The scalability of our manufacturing operations throughout the United States was specifically designed to provide a similar blueprint that can be replicated worldwide in the future. We look forward to 2019 and the paradigm of wound care to continue shifting with SkinTE. And 2019 will be more than just SkinTE. At the end of 2018, we registered OsteoTE with the FDA. OsteoTE is a first of its kind autologous, from the patient, for the patient and homologous bone-for-bone product intended to repair, reconstruct, replace and supplement bone using a small sample from the patient. We believe this product is a viable alternative to bone grafts and bone substitutes in treating long bone, craniomaxillofacial, spine, dental, hand and foot and ankle defects. Similar to SkinTE, our initial commercial activity will begin with a limited market release targeting foot and ankle and craniomaxillofacial defects, two areas where we have an existing commercial footprint with podiatrists and reconstructive surgeons, respectively. Recognizing the highly segmented market encompassing bone regeneration of both specialties and applications, we plan to roll out OsteoTE in a stepwise approach, moving into arenas such as spine and long bone applications following our limited release in foot and ankle and craniomaxillofacial surgery. With the foresight that the commercial launch of OsteoTE was approaching, we strategically hired sales and clinical teams capable of driving adoption and supporting the use of both SkinTE and OsteoTE, with backgrounds encompassing wound care and bone regeneration, without any need to hire an additional team for OsteoTE at this stage. Please go to Slide number 13. With that, I'd like to call over - I'd like to turn the call over to our Chief Scientific Officer, Dr. Nikolai Sopko.

Thank you, Ned and Matt, and thank you all - to all those listening on today's fiscal fourth quarter financial results and corporate update conference call. We appreciate the opportunity to speak with you all today. Please go to Slide 14. It's my pleasure to provide updates on what Polarity has accomplished in 2018 and will be planning on pursuing in 2019 with regards to our research and development arms of the company. In order to provide a comprehensive summary of our research and development strategies, as well as our evolving technologies and flexible platforms, I think it is best to review our progression throughout our pipeline technologies, platforms and product systems chart. As an overview, Polarity has discussed publicly three major research and development program groups, which include the core TE cell tissue therapies program, related technology derivatives program and the Advanced Research Center programs. The core TE cell tissue platform include self-propagating therapies like SkinTE, OsteoTE and other hollow and solid organs cell tissue systems, which are based off our minimally polarized functional unit, or MPFU technology. The core TE technologies were designed and developed for two reasons: The first reason is to address the need for regenerative technologies that work and are cost effective. The second reason is for creating a platform technology, the MPFU, that can serve as an engine and substrate for novel and innovative cell tissue-based therapies. Our related technology derivative program involves biological accelerants, modulators, composite tissue systems, advanced tissue devices and biomedically engineered materials that can be stand-alone products or used in combination with our MPFU technology to enhance their function. The Advanced Research Center programs focus on the development of targeted gene transfer of our MPFU-based technology therapies, microbial modulation, bioreactor synthesis of targeted amyloids [ph] as well as cell-mediated therapies specific to oncology and transplant tolerance and modulation. Having now reviewed the three major research and development program groups, which include our core TE programs, our RTD and ARC program groups, I would like to now discuss our current commercially - cell tissue product, SkinTE, as well as the recently FDA-registered cell tissue product, OsteoTE. Please go to Slide 15. As Denver stated, SkinTE, our first commercial product, is a technology - the first of its kind, which was designed and developed as an autologous cell tissue product for the replacement, reconstruction, regeneration and/or supplementation of a person's own skin. It was not designed to be another temporary skin substitute, but rather to replace skin grafts, the current clinical standard of care, and become a first line treatment. SkinTE is an ex vivo cultured, 3D-printed expansive cell sheet with a technology designed to harness the body's innate regenerative potential to regenerate functionally polarized complex skin with the architecture and function of native skin. It is a non-iterative product that simply halts or slows down the disease process, but a neo-generative technology that gives patients back their skin. Examples of SkinTE's success in treating complex wounds and helping patients can be seen on Slide 15. For more information on these patient cases, please see our website. And in addition to our commercial efforts, SkinTE is being evaluated in burn patients in head-to-head clinical trial, being compared against the clinical standard of care, the skin graft. Results have been very encouraging, and we anticipate presenting interim results later this year as well as completing trial enrollment. Please go to Slide 16. In addition to the head-to-head trial, this quarter, we'll be launching 2 randomized controlled trials comparing SkinTE to the standard of care in treating diabetic foot ulcers and venous leg ulcers. They'll be run in conjunction with the contract research organization and registered in the ClinicalTrial.gov. We plan to enroll over 100 patients in each trial at up to 16 sites within the U.S. Trial evaluations in diabetic foot ulcers and venous leg ulcers, an example of which can be seen on the slide, have been very favorable. And we believe these randomized controlled trials will demonstrate not only SkinTE's superiority to the standard of care in closing these large extremity wounds, but that it decreases the financial burden of treating these wounds that affect millions of Americans. We had a successful conference season this last year presenting our preclinical and clinical SkinTE results. We presented at multiple national conferences with multiple poster and podium presentations, including Best Presentation Award at the 17th annual American Professional Wound Care Association national conference. With a total of 19 accepted abstracts since August, we will have a busy conference season this spring with accepted abstract and podium presentations at national and international conferences, including the International Society for Stem Cell Research, which in addition to presenting our ongoing clinical experience with SkinTE, will also include presentations on our preclinical research on OsteoTE. We also anticipate several peer-reviewed publications earlier this year, which will demonstrate our core TE technology and show the successful clinical application of SkinTE in multiple cutaneous indications. Please go to Slide 17. As Ned mentioned, we're pleased to announce that OsteoTE, our neo-generative autologous cell tissue product, was registered with the FDA as a 361 HCT/P in December of 2018. In parallel with the limited market release, we will initiate clinical trials with a focus on prospective trials, which will be discussed on our next quarterly corporate update call. With that said, I would like to briefly summarize results from our preclinical OsteoTE study, seen on the slide, involving the regeneration of complex osseous tissue in clinical site defects of the cranium, long bone and spine. Our preclinical study demonstrates that our platform technology, which utilizes the body's regenerative capacity, as seen in SkinTE, is applicable to other tissues, including bone. Utilizing recognized animal models, we have evaluated OsteoTE's ability to generate new bone in various clinical settings. Craniomaxillofacial defects remain a challenging indication. Although advances in polymer engineering have been promising, there's no better replacement for bone than bone, and often current techniques are unable to provide sufficient amounts of the patient's own bone to treat the defects. Our technology, which uses the patient's own tissue and body as their own bioreactor, our animals have - animal models have shown that like skin, we can close large cranial defects with a small amount of input material. Importantly, not only with OsteoTE it will have filled these defects, but did so with a diploic architecture similar to native healthy bones, which is important for the function of cranial bone. Similarly, we have performed several large animal studies in load-bearing long bone defects and spinal fusion, which demonstrate the ability of OsteoTE to neo-generate bone in these settings. Armed with this data, we are excited for initial applications of OsteoTE for foot and ankle and craniomaxillofacial applications in the near future. As we build upon our experience with OsteoTE, we will methodically approach other bone indications, including spine and dental applications. As stated on the prior corporate update call in September 2018, CartTE, our autologous regenerative cartilage product, which currently initiating a variety of preclinical critical size defect studies, with targeted completion of the studies by mid- to late 2019 and potential registration of the product to occur in late 2019 or early 2020. Please go to Slide 18. PolarityTE is not solely a skin company nor a human cell and tissue product company. To this end, we have active research programs involving our related technology derivatives and Advanced Research Center programs. During the development of our core pipeline products and clinical application, discoveries may lead to product development. These RTDs can be designed to augment the application and regenerative outcomes of our pipeline products or be used as stand alone products. Our programs may focus on the improvement of RTDs as well as the augmentation of our pipeline products. We are excited about the recent advancements in the field of gene therapy and are interested in the possibility of genetically altering our products. Our initial preclinical investigations have demonstrated feasibility of genetically modifying MPFUs. Please go to Slide 19. With that, I would like to now hand over to Denver Lough for concluding remarks.

Thank you, Nikolai. And thank you Paul, Matt and Ned for your reports on this call. As we bring the formal presentation segment of this call to a close and open up for a question-and-answer session, I'd like to say how excited we at Polarity are about the success we have seen clinically in the patients who've been treated with SkinTE, the advances we have seen in research and development across our core TE, RTD and ARC programs and the incredible growth we have seen across all arms of the company. I want to remind everyone that Polarity is a young and growing company. It is now just 2 years old. In those short, exciting and sometimes hectic 2 years, we have accomplished something tremendous. We launched a public company. Within the year ended October 31, 2018, we raised $93.2 million of operational capital to build something never seen before while moving at a speed more similar to high tech than biotech and pharma. We've doubled our employee count in the last 6 months of 2018 and currently employ over 160 employees that share our vision of what this company is committed to achieving, enhancing patient lives and changing the face of medicine. We brought 2 products from bench to bedside each in less than 1 year. We built a functional and scalable manufacturing facility and logistics center, which can turn advanced cell tissue products around in less than 1 day. We've now built our regionally based sales force and commercial team and clinical operations product support team successfully. We've continued to see successful reimbursement of the SkinTE product across multiple settings of care and was recently awarded our specific SkinTE HCPCS product code by the Centers for Medicare & Medicaid Services. I will stop there just to say again that we certainly recognize that we are different. We produce a different technology. We have assembled a different team. We take a different view towards certain strategic priorities. We execute on different approaches, and we pursue a different cause. And it's these differences that have allowed this to be successful and remain successful over the last 2 years. On behalf of the entire Polarity team, both on this call and across the country, I want to thank you for your time today and also extend my sincere gratitude for your support of PolarityTE and our collective mission.

Thank you, Denver. Now that we've completed the presentation section of this corporate update and the fourth quarter earnings call, we'd like to turn the remainder of the time over to question-and-answer session. Please be advised that some questions may be related to materials that are sensitive and/or related to non-public material information and, therefore, will not be discussed on this call. We'd also like to remind investors on the call that this question-and-answer session will include forward-looking statements within the meaning of the safe harbor provisions of the Private Securities and Litigation Reform Act of 1995, including, but not limited to, the types of statements identified as forward-looking in our most recent reports on Forms 10-K and 10-Q, including our Annual Report on Form 10-K for the year ended October 31, 2018, that will be filed soon, all of which will be available on our website in the Investor Relations section. I'd now like to turn the call over to Nicole for questions and answers.

Thank you, sir. [Operator Instructions] We'll take our first question from Tyler Van Buren at Piper Jaffray.

Hey. Thanks, guys. Good morning and thanks for taking the questions. I guess I applaud you guys on providing additional metrics. I had some initial points of clarification I was hoping you guys could answer. And I know things are pretty straightforward, but can you just better define specifically what an account is, how many different hospitals or centers can be contained within an account? And then as a follow-up to that, specifically an active account, is that an account that has had a patient that has, I guess, had a procedure that's been paid for or how specifically do you define that? As well as an in-process account, is that someone who's, say, trialed the product or is specifically undergoing the VAC process?

Yeah. Thank you, Tyler. In order to answer that question, I'll turn this over to our Chief Operating Officer, Dr. Ned Swanson.

Yes. So for us to define an account, we define that as a hospital or a clinic that could utilize the product. To define an active account, an active account to us is defined as, one, where the product has been used already whether it's through a trial evaluation or a paid product. And then an in-process account to us are defined as hospitals or clinics that have initiated the VAC review process, initiated trial evaluation agreements or purchase agreements that have not used the product yet. And we define them this way because all trial evaluation agreements, once completed, and all VACs have 100% of the time moved to approvals and then into paid accounts for us in our history.

Got it. And the in-process timeline, was that the 6 month timeline that you mentioned generally based upon your experience to date?

Yes, approximately 3 to 6 months, and some of that variability depends on if it's a hospital or a clinic.

Okay. And then you mention the additional 22 reps that have come online throughout the quarter, and that there was a lot of training required. So I guess, can you confirm that those 22 reps are all sufficiently trained, and they'll be out there selling product as of the start of the next quarter?

Yeah, and I'll turn that question over to our Chief Commercial Officer, Matt Kemp.

So to answer your question, yes, the team that we have in place is sufficiently - it's sufficiently trained and ready to go. They're actively out across the country right now as we speak doing the things that Ned just described, and that is move forward with VAC submissions separating the process from VAC submission to the VAC approval process, and then moving on ultimately to commercial agreements and then paid deployment.

Okay. And given the switch in the fiscal to the calendar quarters, should we think of that as a November 1 start date of all of them being fully online or more of a calendar year January 1?

Yes. So they all extensively were hired November 1st.

Okay. That's helpful. And then lastly, related commercial - ongoing commercial efforts. Obviously, it's a little bit too early, I think, to assess the proper breakdown of SkinTE usage between acute, chronic, and burn wounds. And clearly, they all have their advantages, some have more volume. And if you look at burn wounds, they have a very large treatment surface area, and therefore, cost price per patient. Moving forward, are you guys continuing to focus on all three areas equally? Would you expect revenues or patients to be equally split or what are your updated thoughts there?

Sure. So I think our focus right now is really on the inpatient setting primarily. But we'll be opportunistic in the outpatient setting. In the inpatient setting, reimbursement is generally more well understood and more well established at this point. So in terms of which of wound, at this point, we're treating all wounds, and over time we'll give you some more guidance on where we're landing relative to different types of wounds.

Got it. Okay. And with respect to clinical data, there's some helpful commentary there. In terms of that head-to-head clinical trials, should we expect to receive data from all of them by year-end? And can you give us any sense of what clinical trials we might receive? First, it sounds like you guys are making positive progress on the acute wound trial.

Yes. Tyler, this is Nikolai. So for our head-to-head clinical trial, yes, we do anticipate both having some interim results reporting this year, most likely in the fall burn conference season, and completing enrollment as well, and then with the final follow-up of the patients, likely having a publication about that in early 2020 or so. Additionally, we will be initiating the two independent, separate, if you will, randomized controlled trials, looking at diabetic foot ulcers and venous stasis ulcers later on this quarter. And those will have over 100 patients each and - but up to 16 high-volume centers across the U.S. So with that, we're hoping to also complete enrollment potentially later this year or early 2020, and we do plan for interim results for those randomized controlled trials as well.

That's helpful. And just as a follow up, say for the acute wound, head-to-head clinical trial versus standard of care, I'm assuming split-thickness skin grafts, what type of endpoints are we looking at, and what should expectations be there? And then also, with diabetic foot ulcers, is that maybe like 100% wound closure endpoint like we saw with Dermagraft. And with Dermagraft relative to standard of care, we saw a pretty small delta. So are we looking for something demonstrably better than that?

Yeah. For the head-to-head comparing to skin graft, when comparing to a skin graft, we look at graft take as your primary endpoint. Additionally, we'll be looking at secondary endpoints, such as the quality of the healing using validated scoring systems, as well as presence of skin structures, such as hair follicles and things along those lines to sort of really differentiate SkinTE to a split-thickness skin graft. For the randomized controlled trials, the primary endpoint is pretty well defined, and that's closure without drainage. And usually, that's assessed within 12 weeks. And as you mentioned, many prior trials have used a similar design. We'll be following a similar design as the prior trials. And our preliminary and trial evaluations in both diabetic foot ulcers and venous leg ulcers have been incredibly encouraging and showing pretty significant deltas compared to the standard of care looking at historical data.

Great. That's very helpful. And just a final question on manufacturing, can you guys talk about the improvements that you all continue to make on the manufacturing side ahead of potentially opening up nodes in different regions? And also, as a separate question, has there been any additional interactions with the FDA since this summer?

Tyler, this is Denver. Thank you for those questions. I'll first answer the FDA question first. Polarity is subject to market regulations, including facility inspections by the FDA, none of which occurred, as you know, in July of 2018. We don't comment on non-final observations relating to interactions with the FDA and are part of a routine regulatory process. However, we did address each of the observations made by those inspectors and provided evidence to the FDA within that required time line of response. We believe that we're in full compliance with all FDA requirements at this time and have utilized external services in order to further validate that for us. SkinTE continues to be available commercially. We've had no reported adverse reaction. As Ned, Dr. Swanson, discussed on the call, we are seeing patient lives being transformed as a result and providing clinical solutions to some truly devastating medical challenges. As I said above, essentially, we responded to the FDA and believe we're in complete compliance with those regulations. And we correspond with the FDA on regular, routine regulatory processes and communications, but we don't comment on specific interactions we have with the FDA. With regards to the manufacturing and sort of, I think, you said something along the lines of improvement or scalability element of it, we truly have developed a very dynamic and essentially improved cycle time capability of turning around these products relatively quickly. We have made our central manufacturing facility, which actually harbors our control production, environmental columns, CPAP [ph] columns and really been able to optimize that appropriately with bringing on some incredible regulatory affairs, quality personnel, as well as manufacturing engineers to get our cycle times essentially below three hours. In doing so, we have really begun to model the central manufacturing facility in a manner where we can scale it down in size but not necessarily in capacity. And those are where we're actually building out our manufacturing node or nodal web system that we're going to begin to now implement in areas of the United States, both in high-volume region areas as well as in specific medical facilities that have high volume. And we're also now looking at and entertaining conversations with international entities and being able to bring those manufacturing nodes and the capability of delivering and employing SkinTE to also international regions as well.

Understood. Thanks very much for taking the questions.

Thank you, Tyler.

And we will take our next question from Elemer Piros with Cantor.

Yes, good morning, gentlemen. I was wondering if you could provide us just a general sense of product shipment during the last 2.5 months since the ending of your fourth - fiscal fourth quarter in October 31st?

Elemer, it's Matt Kemp. How are you?

All right. How are you?

Good. So we don't necessarily report on the number of patients. Just one second. Yes, so we don't normally report on the number of patients treated or shipment, but what we will continue to report on is the commercialization process, as I outlined earlier in my remarks, the leading indicators and how they guide our regional market release. Specifically, we'll report the Value Analysis Committee submissions and approvals, the purchase agreements, as Ned talk about, the number of active accounts. And I think it's also important to sort of center ourselves that one patient does not equal one patient. And what I mean by that is because it's not an off-the-shelf product but an autologous, customized one, the one patient could have a five square centimeter tissue defect, and another one could have 250-square centimeter defect, so reporting patients potentially could be misleading.

Could you give us a sense, Matt, on the average size of the wound that you treated in the quarter, in the last quarter that you reported on?

No. So - or maybe I could just turn it over to Paul.

Yeah, Paul here. So we're not guiding right now to what the average size was during the last quarter. I believe what we have said was that from launch to date, the average defect treated with SkinTE is about a little over 500 square centimeters. But we haven't made any comments on any particular time period.

Okay. That's useful, Paul. And maybe one housekeeping item for you, Paul. The R&D line as reported for the fourth quarter, is this a good baseline to build on going forward in 2019?

Yes. I think that - remember, we quoted guidance towards 2019. But that's a sensible number to base it off.

Okay, okay. And maybe just one practical question about the manufacturing nodes. During the first half of '19, how many of those nodes do you plan to implement?

Well, we historically communicated, we expect to construct two manufacturing nodes during the first half of 2019. That's still the case. We may increase that number. But as and when we do, we will provide further guidance.

Okay. Thank you very much. I think that was all from me.

Thank you, Elemer.

Thank you. And there are no further questions at this time. I will like to turn the conference back over to Rich Haerle.

All right. Well, thank you. So this concludes the question-and-answer session of PolarityTE's 2018 corporate update and fourth quarter earnings conference call. To reiterate, we at PolarityTE are excited about what we have accomplished and what we expect to accomplish in 2019 and beyond. We thank you for your time and look forward to our next corporate update and quarterly earnings call for the first quarter of 2019. From all of us at PolarityTE, thank you for your time, and have a great day.

And once again, ladies and gentlemen, that concludes today's conference. We appreciate your participation today.