001- 37897 | 20-1828101 | |
(Commission File Number) | (IRS Employer Identification No.) |
5421 Avenida Encinas, Suite F Carlsbad, California | 92008 | |
(Address of principal executive offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 5.02. | Appointment of Certain Officers. |
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit Number | Description | |
99.1 |
OBALON THERAPEUTICS, INC. | |||
Date: November 2, 2018 | By: | /s/ William Plovanic | |
William Plovanic | |||
Chief Financial Officer |
• | Total revenue of $3.0 million increased 9% vs Q2-18 |
• | US revenue of $1.8 million increased 17% vs Q2-18 |
• | US Reorders were $1.4 million, or 79% of US sales, an increase of 45% vs Q2-18 |
• | Gross margin of 53% increased from 37% in Q2-18 |
• | Operating loss of $6.6 million improved 31% vs $9.6 million in Q2-18 |
• | Net cash use of $5.5 million decreased 33% vs. use of $8.3 million in Q2-18 |
• | Completed Private Placement raising gross proceeds of $10.0 million |
• | Received FDA PMA-S approval for the Obalon Touch Inflation System |
• | As part of a planned succession, on January 2, 2019 the Company will transition Kelly Huang, Ph.D. to the role of Chief Executive Officer and Andy Rasdal to the role of Chairman of the Board |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Unaudited) | |||||||||||||||
Revenue | $ | 2,987 | $ | 2,787 | $ | 7,065 | $ | 6,222 | |||||||
Cost of revenue | 1,418 | 1,314 | 3,919 | 3,127 | |||||||||||
Gross profit | 1,569 | 1,473 | 3,146 | 3,095 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 2,368 | 2,798 | 8,359 | 7,958 | |||||||||||
Selling, general and administrative | 5,836 | 7,813 | 23,092 | 19,606 | |||||||||||
Total operating expenses | 8,204 | 10,611 | 31,451 | 27,564 | |||||||||||
Loss from operations | (6,635 | ) | (9,138 | ) | (28,305 | ) | (24,469 | ) | |||||||
Interest expense, net | (70 | ) | (21 | ) | (164 | ) | (110 | ) | |||||||
Other expense | (40 | ) | (11 | ) | (155 | ) | (66 | ) | |||||||
Net loss | (6,745 | ) | (9,170 | ) | (28,624 | ) | (24,645 | ) | |||||||
Other comprehensive (loss) income | (3 | ) | 15 | 3 | (3 | ) | |||||||||
Total comprehensive loss | $ | (6,748 | ) | $ | (9,155 | ) | $ | (28,621 | ) | $ | (24,648 | ) | |||
Net loss per share, basic and diluted | $ | (0.35 | ) | $ | (0.55 | ) | $ | (1.60 | ) | $ | (1.48 | ) | |||
Weighted-average common shares outstanding, basic and diluted | 19,457,971 | 16,747,791 | 17,837,297 | 16,649,447 |
September 30, 2018 | December 31, 2017 | ||||||
Assets | (Unaudited) | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 21,552 | $ | 21,108 | |||
Short-term investments | 8,116 | 23,292 | |||||
Accounts receivable, net of allowance of $538 and $239, respectively | 2,775 | 4,223 | |||||
Inventory | 1,955 | 1,418 | |||||
Other current assets | 909 | 1,714 | |||||
Total current assets | 35,307 | 51,755 | |||||
Property and equipment, net | 1,572 | 1,346 | |||||
Total assets | $ | 36,879 | $ | 53,101 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 1,458 | $ | 1,276 | |||
Accrued compensation | 2,671 | 4,494 | |||||
Deferred revenue | 301 | 510 | |||||
Other current liabilities | 2,328 | 1,773 | |||||
Current portion of long-term loan | 523 | 1,958 | |||||
Total current liabilities | 7,281 | 10,011 | |||||
Deferred rent | 46 | 13 | |||||
Long-term loan, excluding current portion | 9,399 | 7,964 | |||||
Total long-term liabilities | 9,445 | 7,977 | |||||
Total liabilities | 16,726 | 17,988 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.001 par value; 100,000,000 and 300,000,000 shares authorized as of September 30, 2018 and December 31, 2017, respectively; 23,280,310 and 17,500,604 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 23 | 18 | |||||
Additional paid-in capital | 160,130 | 146,474 | |||||
Accumulated other comprehensive loss | (2 | ) | (5 | ) | |||
Accumulated deficit | (139,998 | ) | (111,374 | ) | |||
Total stockholders’ equity | 20,153 | 35,113 | |||||
Total liabilities and stockholders’ equity | $ | 36,879 | $ | 53,101 |
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
(Unaudited) | |||||||
Operating activities: | |||||||
Net loss | $ | (28,624 | ) | $ | (24,645 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation | 428 | 221 | |||||
Stock-based compensation | 3,610 | 2,102 | |||||
Fair value of stock issued for legal settlement | — | 1,398 | |||||
Loss on disposal of fixed assets | 107 | — | |||||
(Accretion) amortization of investment (discount) premium, net | (20 | ) | 24 | ||||
Amortization of debt discount | 29 | 31 | |||||
Change in operating assets and liabilities: | |||||||
Accounts receivable, net | 1,448 | (2,515 | ) | ||||
Accounts receivable from related party | — | 515 | |||||
Inventory | (537 | ) | (84 | ) | |||
Other current assets | 805 | 240 | |||||
Accounts payable | 135 | 534 | |||||
Accrued compensation | (1,823 | ) | 174 | ||||
Deferred revenue | (209 | ) | 72 | ||||
Other current and long term liabilities | 634 | 506 | |||||
Net cash used in operating activities | (24,017 | ) | (21,427 | ) | |||
Investing activities: | |||||||
Purchases of short-term investments | (9,103 | ) | (80,317 | ) | |||
Maturities of short-term investments | 24,302 | 41,500 | |||||
Purchase of property and equipment | (867 | ) | (904 | ) | |||
Net cash provided by (used in) investing activities | 14,332 | (39,721 | ) | ||||
Financing activities: | |||||||
Fees paid in connection with loan amendment | (30 | ) | — | ||||
Proceeds from issuance of common stock, net of issuance costs | 9,973 | — | |||||
Proceeds from stock issued under employee stock purchase plan | 148 | 210 | |||||
Proceeds from sale of common stock upon exercise of stock options | 38 | 46 | |||||
Net cash provided by financing activities | 10,129 | 256 | |||||
Net increase (decrease) in cash and cash equivalents | 444 | (60,892 | ) | ||||
Cash and cash equivalents at beginning of period | 21,108 | 72,975 | |||||
Cash and cash equivalents at end of period | $ | 21,552 | $ | 12,083 | |||
Supplemental cash flow information: | |||||||
Interest paid | $ | 473 | $ | 416 | |||
Unpaid issuance costs | $ | 160 | $ | — | |||
Property and equipment in accounts payable | $ | 106 | $ | 126 |