Great Basin Scientific Announces Fourth Quarter 2014 and Full Year 2014 Financial Results
Revenue growth of 50.5% for the Fourth Quarter and 111.2% for the Full Year
SALT LAKE CITY, Feb. 18, 2015 /PRNewswire/ -- Great Basin Scientific, Inc. (NASDAQ: GBSN), a molecular diagnostics company, today reported financial results for the fourth quarter and the full year ended December 31, 2014. For the fourth quarter of 2014, revenue was $445,283, an increase of 50.5% compared to $295,785 for the fourth quarter of 2013. For the 12 months ended December 31, 2014 revenue was $1,606,254, an increase of 111.2% compared to $760,646 for the 12 months ended December 31, 2013.
Recent Business Highlights
- Filed a 510(k) pre-market application for the Company's Group B Strep test in November of 2014
- Initiated a clinical trial for the Company's Staph ID/R panel in November of 2014
- Initiated a clinical trial for the Company's Shiga toxin producing E. coli (STEC) test in February of 2015
Fourth Quarter and Full Year 2014 Financial Results:
- Revenue during the three month period ended December 31, 2014, was $445,283 vs. $295,785 for the same period in 2013, which represented an increase of 50.5%. For the year ended December 31, 2014 revenue was $1,606,254, an increase of 111.2% compared to $760,646 for the year ended December 31, 2013.
- The Company ended the quarter with 84 U.S. customers.
- Operating expenses during the three month period ended December 31, 2014, were $2.9 million as compared to $1.8 million in the prior year period, an increase of 59.9%. For the year ended December 31, 2014 operating expenses were $9.8 million as compared to $7.9 million in the prior year period, an increase of 25.2%.
- Loss from Operations was $3.7 million for the three months ended December 31, 2014 as compared to $2.6 million for the same period in 2013, an increase of 39.6%. For the year ended December 31, 2014 the loss from operations was $12.2 million as compared to $9.3 million in the prior year period, an increase of 31.4%.
- Net Income per common share for the three months ended December 31, 2014 was $0.33 and $0.14 per share on a basic and diluted basis respectively, as compared to a Net Loss of $24.34 per share on a basic and diluted basis for the same period in 2013. The net income for the three months ended December 31, 2014 was the result of a non-cash gain from the change in the fair value of our derivative liability. Net Loss per common share for the year ended December 31, 2014 was $17.32 per share on a primary and fully diluted basis, as compared to a Net Loss of $104.71 per share on a primary and diluted basis for the prior year period.
Fourth Quarter 2014 Operating Results
Revenue
Revenue increased by $149,498, or 50.5% in the three months ended December 31, 2014 as compared to the three months ended December 31, 2013. This increase was attributable to the increase in the sales of our C. diff tests following an increase in the number of our customers.
Cost of Sales
Cost of sales increased $99,650, or 9.0%, for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013. The increase is attributable to the increased costs associated with manufacturing additional C. diff tests and the depreciation on additional analyzers needed to support the increase in customers. The gross loss decreased from (274.4)% for the three months ended December 31, 2014 to (171.1)% for the three months ended December 31, 2014.
Research and Development
Research and development expenses increased by $677,983, or 101.7%, for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013 as we filed our 510(k) pre-market application for Group B Strep, began our Staph ID/R panel clinical trial and ramped up efforts to prepare additional diagnostic assay for clinical trials.
Selling and Marketing
Selling and marketing expenses increased $102,406, or 18.5%, for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013 as we reinitiated our sales and marketing activities and hired additional sales people to increase our Sales Funnel.
General and Administrative
General and administrative expenses increased $314,340, or 51.6%, for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013 as we increased our business activities, raised additional capital, completed an initial public offering and began operations as a public company.
Interest Expense
Interest expense increased by $146,561, or 86.1%, for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013 due to an increase in interest incurred on our capital lease payments and our letters of credit associated with the analyzer sale-leaseback agreement and interest on our related party note payable.
Liquidity and Capital Resources
As of December 31, 2014, Great Basin had approximately $2.0 million in cash and cash equivalents on hand, as compared to $1.2 million as of December 31, 2013.
Change in Fair Value of Derivative Liability
The change in fair value of derivative liability resulted in other income of $5.5 million as a result of the change in the estimated fair value of certain warrants during the three months ended December 31, 2014. These warrants contain an exercise price adjustment provision that requires them to be accounted for as a derivative liability. The warrants were granted during 2014 and revalued at December 31, 2014. The change in the fair value of the derivative liability represents the change in the estimated fair value of the warrants from the estimated fair value at the beginning of the period. There were no warrants that were required to be recorded at fair value in 2013.
Full Year 2014 Operating Results
Revenue
Revenue increased by $845,608, or 111.2% in the year ended December 31, 2014 as compared to the year ended December 31, 2013. This increase was attributable to the increase in the sales of our C. diff test following an increase in the number of our customers.
Cost of Sales
Cost of sales increased $1,782,193, or 81.5%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013. The increase is attributable to the increased costs associated with manufacturing additional C. diff tests and the depreciation on additional analyzers needed to support the increase in customers. The gross loss decreased from (187.4)% for the year ended December 31, 2013 to (147.1)% for the year ended December 31, 2014.
Research and Development
Research and development expenses increased by $1,264,220, or 37.8%, for the year ended December 31, 2014 as compared to the year ended December 31 30, 2013 as we filed our 510(k) pre-market application for Group B Strep, began our Staph ID/R panel clinical trial and ramped up efforts to prepare additional diagnostic assay for clinical trials.
Selling and Marketing
Selling and marketing expenses decreased $317,291, or 12.1%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013 as we decreased our selling efforts in the first nine months of the year due to our lack of capital.
General and Administrative
General and administrative expenses increased $1,061,311, or 56.8%, for the year December 31, 2014 as compared to the year ended December 31, 2013 as we increased our business activities, raised additional capital, completed an initial public offering and began operations as a public company.
Interest Expense
Interest expense increased by $851,731, or 299.6%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013 due to an increase in interest incurred on our capital lease payments and our letters of credit associated with the analyzer sale-leaseback agreement and interest on our related party note payable.
Liquidity and Capital Resources
As of December 31, 2014, Great Basin had approximately $2.0 million in cash and cash equivalents on hand, as compared to $1.2 million as of December 31, 2013.
Change in Fair Value of Derivative Liability
The change in fair value of derivative liability resulted in an other expense of $8.4 million as a result of the change in the estimated fair value of certain warrants during the year ended December 31, 2014. These warrants contain an exercise price adjustment provision that requires them to be accounted for as a derivative liability. The warrants were granted during 2014 and revalued at December 31, 2014. The change in the fair value of the derivative liability represents the change in the estimated fair value of the warrants from the estimated fair value at their grant date. There were no warrants that were required to be recorded at fair value in 2013.
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
Certain statements in this press release may be deemed to be forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risk and uncertainties, which could cause actual results to differ materially. 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, 2014. 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.
| GREAT BASIN SCIENTIFIC, INC. |
||||
| BALANCE SHEETS |
||||
| December 31, |
||||
| 2014 |
2013 |
|||
| Assets |
||||
| Current assets: |
||||
| Cash |
$ 2,017,823 |
$ 1,211,423 |
||
| Accounts receivable, net |
267,485 |
184,415 |
||
| Inventory |
457,094 |
320,239 |
||
| Prepaid and other current assets |
376,778 |
94,421 |
||
| Total current assets |
3,119,180 |
1,810,498 |
||
| Intangible assets, net |
216,580 |
334,025 |
||
| Property and equipment, net |
4,237,467 |
3,703,582 |
||
| Total assets |
$ 7,573,227 |
$ 5,848,105 |
||
| Liabilities and Stockholders' Deficit |
||||
| Current liabilities: |
||||
| Accounts payable |
$ 1,369,169 |
$ 874,119 |
||
| Accrued expenses |
612,359 |
815,814 |
||
| Current portion of notes payable |
49,994 |
44,601 |
||
| Notes payable - related party, net of discount of $58,333 |
441,667 |
— |
||
| Current portion of capital lease obligations |
947,422 |
506,506 |
||
| Total current liabilities |
3,420,611 |
2,241,040 |
||
| Notes payable, net of current portion |
5,693 |
55,730 |
||
| Capital lease obligations, net of current portion |
2,156,837 |
2,042,359 |
||
| Derivative liability |
9,998,636 |
— |
||
| Total liabilities |
15,581,777 |
4,339,129 |
||
| Commitments and contingencies |
||||
| Convertible preferred stock: |
||||
| Series A convertible preferred stock, par value $.001; 0 and 125,000,000 shares |
||||
| authorized; 0 and 117,131,171 shares issued and outstanding, respectively |
— |
18,846,539 |
||
| Series B convertible preferred stock, par value $.001; 0 and 100,000,000 shares |
||||
| authorized; 0 and 59,465,350 shares issued and outstanding, respectively |
— |
9,464,454 |
||
| Series C convertible preferred stock, par value $.001; 0 and 210,000,000 shares |
||||
| authorized; 0 and 150,989,224 shares issued and outstanding, respectively |
— |
3,674,335 |
||
| Series C-1 convertible preferred stock, par value $.001; 0 and 100,000,000 shares |
||||
| authorized; 0 and 84,027,175 shares issued and outstanding, respectively |
— |
2,067,068 |
||
| Series D convertible preferred stock, par value $.001; 0 shares |
||||
| authorized 0 shares issued and outstanding |
— |
— |
||
| Stockholders' deficit: |
||||
| Preferred stock, $.001 par value, 5,000,000 and 0 shares authorized, |
— |
— |
||
| Common stock, $.001 par value: 50,000,000 and 700,000,000 shares |
||||
| authorized; 5,086,458 and 115,510 shares issued and outstanding, respectively |
5,086 |
116 |
||
| Additional paid-in capital |
55,991,060 |
9,733,342 |
||
| Accumulated deficit |
(64,004,696) |
(42,276,878) |
||
| Total stockholders' deficit |
(8,008,550) |
(32,543,420) |
||
| Total liabilities, convertible preferred stock and stockholders' deficit |
$ 7,573,227 |
$ 5,848,105 |
||
| GREAT BASIN SCIENTIFIC, INC. |
||||||||
| STATEMENTS OF OPERATIONS |
||||||||
| For the Three Months and Years Ended December 31, 2014 and 2013 |
||||||||
| Three Months Ended |
Years Ended |
|||||||
| December 31, |
December 31, |
|||||||
| 2014 |
2013 |
2014 |
2013 |
|||||
| Revenues |
$ 445,283 |
$ 295,785 |
$ 1,606,254 |
$ 760,646 |
||||
| Cost of sales |
1,207,032 |
1,107,382 |
3,968,185 |
2,185,992 |
||||
| Gross loss |
(761,749) |
(811,597) |
(2,361,931) |
(1,425,346) |
||||
| Operating expenses: |
||||||||
| Research and development |
1,344,764 |
666,781 |
4,609,913 |
3,345,693 |
||||
| Selling and marketing |
654,828 |
552,422 |
2,301,610 |
2,618,901 |
||||
| General and administrative |
924,106 |
609,766 |
2,928,186 |
1,866,875 |
||||
| (Gain) loss on sale of assets |
- |
- |
(8,166) |
22,767 |
||||
| Total operating expenses |
2,923,698 |
1,828,969 |
9,831,543 |
7,854,236 |
||||
| Loss from operations |
(3,685,447) |
(2,640,566) |
(12,193,474) |
(9,279,582) |
||||
| Other income (expense): |
||||||||
| Interest expense |
(316,819) |
(170,258) |
(1,136,054) |
(284,323) |
||||
| Interest income |
1,119 |
931 |
3,176 |
3,876 |
||||
| Change in fair value of derivative liability |
5,504,231 |
- |
(8,396,169) |
- |
||||
| Total other income (expense) |
5,188,531 |
(169,327) |
(9,529,047) |
(280,447) |
||||
| Loss before provision for income taxes |
1,503,084 |
(2,809,893) |
(21,722,521) |
(9,560,029) |
||||
| Provision for income taxes |
- |
(1,250) |
(5,297) |
(1,250) |
||||
| Net income (loss) |
1,503,084 |
(2,811,143) |
(21,727,818) |
(9,561,279) |
||||
| Less: Cumulative preferred stock dividends (undeclared) |
- |
- |
- |
(2,533,470) |
||||
| Net income (loss) attributable to common stockholders |
$ 1,503,084 |
$ (2,811,143) |
$ (21,727,818) |
$ (12,094,749) |
||||
| Net income (loss) per common share - basic |
$ 0.33 |
$ (24.34) |
$ (17.32) |
$ (104.71) |
||||
| Weighted average common shares - basic |
4,601,741 |
115,510 |
1,254,142 |
115,510 |
||||
| Net income (loss) per common share - diluted |
$ 0.14 |
$ (24.34) |
$ (17.32) |
$ (104.71) |
||||
| Weighted average common shares - diluted |
10,752,715 |
115,510 |
1,254,142 |
115,510 |
||||
| GREAT BASIN SCIENTIFIC, INC. |
||||
| STATEMENTS OF CASH FLOWS |
||||
| Years ended December 31, |
||||
| 2014 |
2013 |
|||
| Cash flows from operating activities: |
||||
| Net loss |
$ (21,727,818) |
$ (9,561,280) |
||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||
| Depreciation and amortization |
1,157,976 |
854,950 |
||
| Change in fair value measurement |
8,396,169 |
— |
||
| (Gain) loss on sale of assets |
(8,166) |
22,768 |
||
| Interest converted to preferred stock |
13,129 |
139,403 |
||
| Employee stock compensation |
297,244 |
111,091 |
||
| Warrant issuance and modifications |
25,063 |
— |
||
| Debt discount amortization |
41,667 |
— |
||
| Asset disposal |
11,124 |
— |
||
| Changes in operating assets and liabilities: |
||||
| Increase in accounts receivable, net |
(83,070) |
(81,439) |
||
| Increase in inventory |
(136,855) |
(226,159) |
||
| Decrease (increase) in prepaid and other assets |
(217,597) |
(71,564) |
||
| Increase in accounts payable |
823,409 |
149,873 |
||
| Increase (decrease) in accrued liabilities |
(203,455) |
323,560 |
||
| Net cash used in operating activities |
(11,611,180) |
(8,338,797) |
||
| Cash flows from investing activities: |
||||
| Acquisition of property and equipment |
(248,133) |
(595,819) |
||
| Acquisition of intangible asset |
- |
(225,000) |
||
| Construction of equipment |
(1,757,360) |
(2,181,563) |
||
| Proceeds from sale of assets |
35,000 |
63,000 |
||
| Proceeds from sale leaseback |
1,500,000 |
2,500,000 |
||
| Net cash used in investing activities |
(470,493) |
(439,382) |
||
| Cash flows from financing activities: |
||||
| Proceeds from issuance of common stock |
6,375,837 |
— |
||
| Proceeds from exercise of warrants |
31,600 |
— |
||
| Proceeds from issuance of convertible notes payable |
100,000 |
4,577,688 |
||
| Proceeds from issuance of convertible notes payable - related party |
300,000 |
— |
||
| Proceeds from issuance of preferred stock |
6,569,886 |
1,160,000 |
||
| Proceeds from issuance of notes payable - related party |
890,000 |
— |
||
| Proceeds from subscriptions receivable |
— |
3,288,333 |
||
| Principal payments of capital leases |
(944,606) |
(144,071) |
||
| Principal payments of notes payable |
(44,644) |
(35,357) |
||
| Principal payments of notes payable -related party |
(390,000) |
— |
||
| Net cash provided by financing activities |
12,888,073 |
8,846,593 |
||
| Net increase in cash |
806,400 |
68,414 |
||
| Cash, beginning of the period |
1,211,423 |
1,143,009 |
||
| Cash, end of the period |
$ 2,017,823 |
$ 1,211,423 |
||
| Supplemental disclosures of cash flow information: |
||||
| Interest paid |
$ 1,121,066 |
$ 144,920 |
||
| Income taxes paid |
$ 6,447 |
$ — |
||
| Supplemental schedule of non-cash investing and financing activities: |
||||
| Conversion of preferred stock to common stock |
$ 18,846,539 |
$ — |
||
| Issuance of preferred stock as debt discount |
$ 100,000 |
$ — |
||
| Conversion of note payable to preferred stock |
$ 400,000 |
$ 4,442,000 |
||
| Assets acquired through capital leases |
$ 807,272 |
$ 1,293,205 |
||
| Initial public offering costs incurred but unpaid |
$ 64,760 |
$ — |
||
| Property and equipment included in accounts payable |
$ 393,119 |
$ — |
||
| Change in derivative liability from new and exercised warrants |
$ 1,586,181 |
$ — |
||
Media Contact:
Tony Russo, Ph.D. or Todd Davenport, Ph.D.
Russo Partners, LLC
212.845.4251
[email protected]
[email protected]
Investor Relations Contact:
Bob Yedid
ICR
646.277.1250
[email protected]
SOURCE Great Basin Scientific, Inc.
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