Company sees 59.4% growth in revenue; reaffirms
guidance of 300-325 customers by year-end
Great Basin Scientific, Inc. (NASDAQ:GBSN), a molecular
diagnostic testing company, today reported financial results for
the first quarter ended March 31, 2016.
First Quarter 2016 Financial Results and
Business Highlights
- Revenue for the first quarter was
$731,422, versus $458,730 for the same period in 2015, representing
a 59.4% year-over-year increase;
- 222 revenue-generating U.S. customers
as of March 31, 2016, representing 119.8% growth year over
year;
- Shiga Toxin Direct Test received 510(k)
clearance by the U.S. Food & Drug Administration (FDA);
- Staph ID/R Blood Culture Panel received
510(k) clearance by the FDA;
- Appointed Suzette Chance, Ph.D., Senior
Director of Clinical Trials to lead clinical trial strategy,
beginning with the five clinical trials slated for this year.
“We are pleased to report our financial results and business
progress for the first quarter,” said Ryan Ashton, Co-founder and
Chief Executive Officer. “Great Basin continues to execute on our
strategic initiatives for 2016, and are on track to meet our
previously-stated guidance of ending the year with 300 to 325
customers, launching our two recently FDA-cleared tests and
starting five clinical trials this calendar year, two of which will
begin in the first half of the year. The investments we made in the
first quarter facilitated the Company’s ability to make those goals
a reality.”
Great Basin Scientific’s First Quarter
2016 Results
Total revenues for the first quarter of 2016 were $731,422,
compared to $458,730 for the same period in 2015, representing an
increase of 59.4%. Continued growth in Great Basin’s customer base
as well as adoption of its Group B Strep assay drove the
year-over-year increase.
Great Basin ended the first quarter of 2016 with 222 U.S.
customers, compared to 101 customers for the first quarter ending
March 31, 2015, representing an increase of 119.8%.
Operating expenses were $6.0 million in the first quarter of
2016, as compared to $3.4 million in the first quarter of 2015.
Research and development expenses increased by $0.8 million over
the first quarter of 2015 to $2.3 million in the first quarter of
2016, primarily due to increased clinical and regulatory activities
related to our Staph ID/R Blood Culture Panel and Shiga Toxin
Direct Test and ongoing pipeline development. Selling and marketing
expenses increased by $0.7 million over the first quarter of 2015
to $1.5 million in the first quarter of 2016, reflecting increases
in headcount, sales commissions and other costs. General and
administrative costs increased by $1.1 million over the first
quarter of 2015 to $2.2 million in the first quarter of 2016, due
to increased legal, accounting and consulting fees related to
financing and restructuring transactions, an increase in headcount
and other corporate expenses.
Loss from operations was $7.1 million for the first quarter,
compared to $3.9 million for the same period of 2015.
Net loss was $33.7 million for the quarter ended March 31, 2016,
compared to a net loss of $71.2 million for the same period in
2015.
Basic and diluted net loss per share was $15.26 for the quarter
ended March 31, 2016, compared to basic and diluted net loss per
share of $29,374.17 for the same period in 2015.
Warrant Exercises & Preferred Conversion
During the first quarter of 2016, the Company received cashless
warrant exercises for 5,229,973 Series C Warrants. The Company
settled 5,091,815 of the cashless warrant exercises through the
issuance of 1,520,888 shares of common stock and settled 138,158 of
the cashless warrant exercises with cash in the amount of
$314,879.
In addition, 121,540 underwriter unit purchase options were
exercised for cash proceeds of $1,335,950. Pursuant to the exercise
of these options, 121,540 shares of Series E Convertible Preferred
Stock were issued and immediately converted into 232 shares of
common stock and 972,230 Series C Warrants were issued and
immediately cashless exercised into 346,667 shares of common
stock.
Also, during the first quarter of 2016, 13,967 shares of Series
E Convertible Preferred Stock were converted into 27 shares of
common stock.
Non-GAAP Financial Measure
This press release includes an Adjusted Net Loss “non-GAAP
financial measure” as defined by the U.S. Securities and Exchange
Commission (SEC). The presentation of this financial information,
which is not prepared under any comprehensive set of accounting
rules or principles, is not intended to be considered in isolation
of, or as a substitute for the financial information prepared and
presented in accordance with generally accepted accounting
principles (GAAP). For reconciliation of this non-GAAP financial
measure to the nearest comparable GAAP measure, see “Reconciliation
of Non-GAAP Financial Measure” included in this press release.
Reconciliation of Non-GAAP Financial Measure
Adjusted Net Loss
The Company excludes the amortization of the convertible note
debt discount as well as the change in fair value of the derivative
liability in calculating adjusted net loss because they are
non-cash in nature and because the Company believes that the
non-GAAP financial measures excluding these items provide
meaningful supplemental information regarding operational
performance. The Company further believes this measure is useful to
investors in that it allows for greater transparency to certain
line items in its financial statements and facilitates comparisons
to peer operating results.
GREAT BASIN SCIENTIFIC, INC. ADJUSTED NET LOSS
(Unaudited) Three Months Ended March
31, The calculation of adjusted net loss is as follows:
2016 2015 Net loss $ (33,652,506) $
(71,173,625) Adjustment for amortization of debt discount included
in interest 6,107,467 - Adjustment for change in fair value of
derivative liability 20,219,263 66,994,149 Adjusted
net loss $ (7,325,776) $ (4,179,476)
Amortization of Debt Discount included in Interest
The amortization of the debt discount that is included in
interest for the three months ended March 31, 2016 resulted in
non-cash other expense in the amount of $6.1 million. This is a
non-cash charge as the result of the excess of the fair value of
the conversion feature of the convertible notes payable and the
associated Series D Warrants over the face value of the notes that
was required to be recorded as a debt discount and amortized over
the life of the notes.
Change in Fair Value of Derivative Liability
The change in fair value of our instruments recorded as
derivative liabilities for the three months ended March 31, 2016
resulted in a non-cash expense of $20.2 million as a result of a
net increase in the fair value of our derivative instruments during
the period. The issuance of Series E Warrants and the increase in
the fair value of the conversion feature of the convertible notes
was partially offset by a decrease in the fair value of our Series
D Warrants and other derivative securities.
The change in fair value of our instruments recorded as
derivative liabilities for the three months ended March 31, 2015
resulted in non-cash expense in the amount of $67.0 million. This
is the result of the issuance of our Series C Warrants and the
increase in fair value of our other derivative instruments due to
the increase of our common stock price during the period.
About Great Basin Scientific
Great Basin Scientific is a molecular diagnostics company that
commercializes breakthrough chip-based technologies. The Company is
dedicated to the development of simple, yet powerful,
sample-to-result technology and products that provide fast,
multiple-pathogen diagnoses of infectious diseases. The Company's
vision is to make molecular diagnostic testing so simple and
cost-effective that every patient will be tested for every serious
infection, reducing misdiagnoses and significantly limiting the
spread of infectious disease. More information can be found on the
Company's website at www.gbscience.com.
Forward-Looking Statements
This press release includes forward-looking statements regarding
events, trends and business prospects, which may affect our future
operating results and financial position. Such statements include,
but are not limited to, statements regarding projected customer
growth, anticipated number and timing of future clinical trials,
the launching and prospective success of new products and other
similar statements. Forward-looking statements involve risk and
uncertainties, which could cause actual results to differ
materially, and reported results should not be considered as an
indication of future performance. These risk and uncertainties
include, but are not limited to: (i) our limited operating history
and history or losses; (ii) our ability to develop and
commercialize new products and the timing of commercialization;
(iii) our ability to obtain capital when needed; and (iv) other
risks set forth in the Company's filings with the Securities and
Exchange Commission, including the risks set forth in the Company's
Annual Report on Form 10-K for the year ended December 31, 2015 and
Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.
These forward-looking statements speak only as of the date hereof
and Great Basin Scientific specifically disclaims any obligation to
update these forward-looking statements, except as required by
law.
FINANCIAL TABLES FOLLOW
GREAT BASIN SCIENTIFIC, INC. CONDENSED BALANCE SHEETS
March 31, 2016 and December 31, 2015 (Unaudited)
March 31 December 31, 2016 2015
Assets Current assets: Cash $ 2,307,191 $ 4,787,759
Restricted Cash 13,800,478 13,800,000 Accounts receivable, net
348,534 411,390 Inventory 1,156,012 1,133,142 Prepaid and other
current assets 1,571,608 564,910 Total current assets
19,183,823 20,697,201 Intangible assets, net 93,465 119,171
Property and equipment, net 8,315,185 7,741,991 Total
assets $ 27,592,473 $ 28,558,363
Liabilities and Stockholders'
Deficit Current liabilities: Accounts payable $ 2,503,422 $
2,432,459 Accrued expenses 1,754,966 1,313,149 Current portion of
notes payable
-
5,693 Current portion of convertible notes payable, net of discount
8,271,184 1,638,717 Notes payable - related party, net of discount
500,000 500,000 Current portion of capital lease obligations
1,376,049 1,305,426 Current portion of derivative liability
35,096,383
-
Total current liabilities 49,502,004 7,195,444 Notes payable, net
of current portion
-
-
Convertible notes payable, net of current portion and debt discount
-
525,000 Capital lease obligations, net of current portion 483,681
851,410 Derivative liability, net of current portion
21,011,177 43,181,472 Total liabilities 70,996,862
51,753,326 Commitments and contingencies Stockholders'
deficit:
Preferred stock, $.001 par value,
5,000,000 shares authorized; 74,380 and 88,347 shares issued and
outstanding, respectively
74 88
Common stock, $.0001 par value:
200,000,000 shares authorized; 3,292,683 and 296,869 shares issued
and outstanding, respectively
329 30 Additional paid-in capital 112,151,579 98,708,784
Accumulated deficit (155,556,371 ) (121,903,865 )
Total stockholders' deficit (43,404,389 ) (23,194,963
) Total liabilities and stockholders' deficit $ 27,592,473 $
28,558,363
GREAT BASIN SCIENTIFIC, INC.
CONDENSED STATEMENTS OF OPERATIONS For the Three Months
Ended March 31, 2016 and 2015 (Unaudited)
Three Months Ended March 31, 2016
2015 Revenues $ 731,422 $ 458,730 Cost of sales
1,861,745 966,593 Gross loss (1,130,323 ) (507,863 )
Operating expenses: Research and development 2,297,983 1,503,558
Selling and marketing 1,478,778 806,118 General and administrative
2,208,657 1,060,652 Total operating expenses
5,985,418 3,370,328 Loss from operations (7,115,741 )
(3,878,191 ) Other income (expense): Interest expense
(6,316,330 ) (305,582 ) Interest income 578 4,297 Change in fair
value of derivative liability (20,219,263 )
(66,994,149 ) Total other income (expense) (26,535,015 )
(67,295,434 ) Loss before provision for income taxes
(33,650,756 ) (71,173,625 ) Provision for income taxes
(1,750 ) — Net loss $ (33,652,506 ) $ (71,173,625 ) Net loss
per common share - basic and diluted $ (15.26 ) $ (29,374.17 )
Weighted average common shares - basic and diluted 2,205,230
2,423
GREAT BASIN SCIENTIFIC, INC.
CONDENSED STATEMENTS OF CASH FLOWS For the Three Months
Ended March 31, 2016 and 2015 (Unaudited)
Three Months Ended March 31, 2016
2015 Cash flows from operating activities: Net loss $
(33,652,506 ) $ (71,173,625 ) Adjustments to reconcile net loss to
net cash used in operating activities: Depreciation and
amortization 563,322 339,593 Bad debt expense 86,273
-
Change in fair value of derivative liability 20,219,263 66,994,149
Employee stock compensation 37,045 18,720 Debt discount
amortization 6,107,467 25,000 Changes in operating assets and
liabilities: Increase in accounts receivable (23,417 ) (23,024 )
Increase in inventory (22,870 ) (47,602 ) Increase in prepaid and
other assets (1,006,698 ) (181,741 ) Decrease in accounts payable
(899,776 ) (37,237 ) Increase in accrued liabilities 441,817
495,060 Net cash used in operating activities
(8,150,080 ) (3,590,707 ) Cash flows from investing
activities: Acquisition of property and equipment (216,230 )
(83,566 ) Construction of equipment (408,271 )
(77,769 ) Net cash used in investing activities (624,501 )
(161,335 ) Cash flows from financing activities: Proceeds
from exercise of warrants 1,335,950 88,000 Proceeds from follow-on
offering 5,575,741 22,154,639 Proceeds from issuance of notes
payable - related party
-
250,000 Payment of cash settlement for warrant exercises (314,879 )
-
Principal payments of capital leases (297,106 ) (158,090 )
Principal payments of notes payable (5,693 ) (11,969
) Net cash provided by financing activities 6,294,013
22,322,580 Net increase (decrease) in cash (2,480,568 ) 18,570,538
Cash, beginning of the period 4,787,759 2,017,823
Cash, end of the period $ 2,307,191 $ 20,588,361 Supplemental
disclosures of cash flow information: Interest paid $ 215,199 $
241,228 Income taxes paid $ 1,750 $
-
Supplemental schedule of non-cash investing and financing
activities: Initial public offering and follow-on offering costs
incurred but unpaid $ 483,952 $ 453,015 Property and equipment
included in accounts payable $ 486,309 $ 419,693 Cashless exercise
of warrants $ 187 $
-
Change in derivative liability from exercised and issued warrants $
12,384,852 $
-
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Media:ICRKate Ottavio Kent,
203-682-8276Kate.Ottavio-Kent@icrinc.comorInvestor
Relations:CorProminenceScott Gordon,
516-222-2560gbinfo@corprominence.comorICRDavid Clair,
646-277-1266David.Clair@icrinc.com