UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
January 29, 2016
TEARLAB CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 000-51030 | 59-343-4771 | ||
| (State
or other jurisdiction of incorporation) |
(Commission
File Number) |
(IRS
Employer Identification No.) |
9980 Huennekens St., Ste 100
San Diego, CA 92121
(Address of principal executive offices, including zip code)
(858) 455-6006
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] 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
On February 1, 2016, TearLab Corporation (“TearLab” or the “Company”) issued a press release announcing preliminary estimates that total revenue will be approximately $6.8 million, reflecting an increase of approximately 28% from the fourth quarter of 2014. In addition, TearLab estimates that a net total of 258 TearLab Osomarlity® Systems were added in the fourth quarter of 2015, of which 200 were under the Company’s new Flex program and 66 were purchased outside of the United States.
The following table sets out the estimated annualized revenue per U.S. device and account analysis for the fourth quarter ended December 31, 2015:
| Active | Active | Annualized Revenues | Annualized Revenues | |||||||||||||
| Program | Devices | Accounts | Per Device | Per Account | ||||||||||||
| Purchased | 277 | 231 | $ | 1,780 | $ | 2,134 | ||||||||||
| Use | 391 | 390 | $ | 7,408 | $ | 7,427 | ||||||||||
| Masters | 1,708 | 234 | $ | 4,330 | $ | 31,605 | ||||||||||
| Flex | 1,550 | 700 | $ | 8,409 | $ | 18,621 | ||||||||||
| Total: | 3,926 | 1,555 | ||||||||||||||
For the full year 2015, the Company anticipates total revenues to be approximately $25.2 million, representing total year-over-year revenue growth of approximately 28%. In addition, the Company estimates its available cash balance at December 31, 2015 to be $13.8 million.
The text of the press release is included as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
Item 2.05 Costs Associated with Exit or Disposal Activities.
On February 1, 2016, TearLab issued a press release announcing that on January 29, 2016, TearLab decided, based on a strategic review of its business, to initiate a divestiture or orderly wind down of its majority owned OcuHub, LLC (“OcuHub”) subsidiary.
While TearLab continues to explore a possible sale of OcuHub, if a divestiture transaction does not materialize, the wind down of the OcuHub operations is expected to be completed by the end of March 2016. In addition, in the event of a wind down of the OcuHub business, TearLab expects to record an estimated pre-tax restructuring charge of approximately $0.6 million for expenses related to winding down the business in the first quarter of 2016. Substantially all of the charges are expected to be paid in cash and relate to payment of contractual obligations and severance. TearLab expects to see a favorable impact of $3.5 million on its operating expenses on a full year basis after excluding the impairment charge discussed below, potential shutdown cost of OcuHub and related first quarter 2016 operating expenses for OcuHub.
The text of the press release is included as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
Item 2.06 Material Impairments.
The information required to be disclosed in this Item 2.06 is included in Item 2.05 above and incorporated herein by reference. In connection with the preparation of its financial statements for the fourth quarter and full year ended December 31, 2015, TearLab concluded that it would be required under United States generally accepted accounting principles to incur an impairment charge for the fourth quarter of 2015 related to OcuHub of approximately $1.4 million related to the impairment of intangibles and fixed assets.
Item 7.01 Regulation FD Disclosure
On February 1, 2016, TearLab issued a press release announcing its intention to offer, subject to market and other conditions, shares of its common stock in an underwritten public offering. The text of the press release is included as Exhibit 99.2 to this Form 8-K and is incorporated herein by reference. Additionally, TearLab’s disclosure contained in Item 2.02 above is incorporated herein by reference.
The information in this item shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of Section 18, nor shall it be deemed incorporated by reference in any of the Company’s filings under the Securities Act or the Exchange Act, except to the extent, if any, expressly set forth by specific reference in such filing.
Forward-Looking Statements
In order to provide TearLab’s investors with an understanding of our current intentions and future prospects, this release may contain statements that are forward-looking. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Words such as “believes,” “anticipates,” “plans,” “expects,” “will,” “intends,” “potential,” “possible” and similar expressions are intended to identify forward-looking statements. Forward-looking statements contained in this Current Report on Form 8-K include, among others, statements relating to TearLab’s current, preliminary estimates of total revenue and booked systems orders for the fourth quarter of 2015, statements concerning the expected timing of a sale or divestiture of Ocuhub, expected restructuring costs and charges, and the favorable impact on operating expenses.
Forward-looking statements involve risks and uncertainties related to our business and the general economic environment, many beyond our control. These risks, uncertainties and other factors could cause our actual results to differ materially from those projected in forward-looking statements, including market risk and the risks we identify in reports filed with the SEC.
Although we believe that the forward-looking statements contained herein are reasonable, we can give no assurance that our expectations are correct. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. For a detailed description of our risks and uncertainties, you are encouraged to review the official corporate documents filed with the SEC. TearLab does not undertake any obligation to publicly update its forward-looking statements based on events or circumstances after the date hereof except as required by law.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
| Exhibit No. | Description | |
| 99.1 | Press release, dated February 1, 2016, announcing 4th quarter 2015 preliminary financial results and corporate update. | |
| 99.2 | Press release, dated February 1, 2016, announcing launch of public offering of common stock. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TEARLAB CORPORATION |
| By: | /s/ Wes Brazell | |
Wes Brazell Chief Financial Officer |
Date: February 1, 2016
TearLab Announces Fourth Quarter 2015 Preliminary
Financial Estimates and Provides Corporate Update
SAN DIEGO, CA, February 1, 2016 — TearLab Corporation (NASDAQ:TEAR; TSX:TLB) (“TearLab” or “the Company”) announced today certain preliminarily unaudited financial estimates for the fourth quarter of 2015 and provided an update on its business.
Preliminary Unaudited Q4-2015 Revenue and Available Cash
TearLab estimates that total revenue for the quarter ended December 31, 2015 will be approximately $6.8 million, reflecting an increase of approximately 28% from the fourth quarter of 2014. In addition, TearLab estimates that a net total of 258 TearLab Osomarlity® Systems were added in the fourth quarter of 2015, of which 200 were under the Company’s new Flex program and 66 were purchased outside of the United States.
The following table sets out the estimated annualized revenue per U.S. device and account analysis for the fourth quarter ended December 31, 2015:
| Active | Active | Annualized Revenues | Annualized Revenues | ||||||||||||||
| Program | Devices | Accounts | Per Device | Per Account | |||||||||||||
| Purchased | 277 | 231 | $ | 1,780 | $ | 2,134 | |||||||||||
| Use | 391 | 390 | $ | 7,408 | $ | 7,427 | |||||||||||
| Masters | 1,708 | 234 | $ | 4,330 | $ | 31,605 | |||||||||||
| Flex | 1,550 | 700 | $ | 8,409 | $ | 18,621 | |||||||||||
| Total: | 3,926 | 1,555 | |||||||||||||||
“Our fourth quarter revenue growth reflects the continued adoption of TearLab’s osmolarity test along with solid sales execution in adding nearly 100 new Flex customers,” commented Seph Jensen, TearLab’s Chief Executive Officer.
For the full year 2015, the Company anticipates total revenue to be approximately $25.2 million, representing total year-over-year revenue growth of approximately 28%. In addition, the Company estimates its available cash balance at December 31, 2015 to be $13.8 million.
These figures are preliminary and unaudited, and actual results may differ. The Company currently expects to report audited full year financial results in March 2016.
Next Generation Tear Testing Platform
TearLab continues to make progress toward introducing its next product, a multiplex testing platform that combines the measurement of osmolarity and other biomarkers in human tears in a single test. The Company has recently completed the development of an alpha device and is planning to initiate the necessary clinical studies for obtaining regulatory approvals in the coming months.
“We believe our next generation platform will bring significant value to clinicians by providing previously unavailable molecular data that will guide more targeted treatment decisions,” said Dr. Benjamin Sullivan, TearLab’s Chief Scientific Officer. “Based on market research and feedback from key opinion leaders, we are initially pursuing a test which includes both osmolarity and inflammatory biomarkers. Also, we believe the new platform will enable future expansion into testing for a range of eye diseases.”
TearLab currently expects to launch its new multiplex testing platform, subject to regulatory approval, in Europe and the United States in mid-2016 and 2017, respectively.
OcuHub Update
TearLab also announced that, based on a strategic review of its business, it has made a decision to initiate a divestiture or orderly wind down of its majority owned OcuHub, LLC (“OcuHub”) subsidiary.
While TearLab continues to explore a possible sale of OcuHub, if a divestiture transaction does not materialize, the wind down of the OcuHub operations is expected to be completed by the end of the first quarter of 2016. TearLab expects to record a pre-tax charge of approximately $1.4 million related to the impairment of intangibles and fixed assets, which will be recorded in the fourth quarter of 2015. In addition, in the event of a wind down of the OcuHub business, TearLab expects to record an estimated pre-tax restructuring charge of approximately $0.6 million for expenses related to winding down the business in the first quarter of 2016. However, the final restructuring charge and actual cost of winding down the business may vary significantly depending on the final disposition of OcuHub.
“Following on the heels of strong growth throughout 2015, we concluded that focusing all of our resources on the core diagnostics business is the best way to achieve our goal of maximizing value for our shareholders,” said Mr. Jensen.” OcuHub’s 2015 estimated operating expenses, excluding the impairment charge, were approximately $3.5 million. TearLab expects to see a favorable impact of $3.5 million on its operating expenses on a full year basis after excluding the potential shutdown cost and related first quarter 2016 operating expenses of OcuHub.
Current Business Outlook
TearLab anticipates that it will maintain a 20 plus percent year-over-year revenue growth rate in 2016. This may be positively impacted by a number of potential growth accelerators, such as a regulatory approval(s) and commercial launch for TearLab’s next generation multiplex tear testing platform, increased international market development, and the addition of osmolarity testing to professional clinical practice guidelines and protocols, some of which may occur during 2016. Over the longer-term, the productivity of its installed base should help the gross margins for the osmolarity testing business increase from the approximate 50% level achieved today to up to 60%. TearLab believes the combination of revenue growth, improving gross margins and disciplined cost control would allow it to achieve positive cash flow from operations when its annual revenue reaches a range of $50 million to $60 million.
Mr. Jensen concluded, “We are excited about the momentum we have built in 2015, and now with the focus solely on our diagnostics platform, we believe we are in a great position to expand adoption going forward.”
About TearLab Corporation
TearLab Corporation (www.tearlab.com) develops and markets lab-on-a-chip technologies that enable eye care practitioners to improve standard of care by objectively and quantitatively testing for disease markers in tears at the point-of-care. The TearLab Osmolarity Test, for diagnosing Dry Eye Disease, is the first assay developed for the award-winning TearLab Osmolarity System. TearLab Corporation’s common shares trade on the NASDAQ Capital Market under the symbol ‘TEAR’ and on the Toronto Stock Exchange under the symbol ‘TLB’.
Forward-Looking Statements
In order to provide TearLab’s investors with an understanding of our current intentions and future prospects, this release may contain statements that are forward-looking. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Words such as “believes,” “anticipates,” “plans,” “expects,” “will,” “intends,” “potential,” “possible” and similar expressions are intended to identify forward-looking statements. These forward-looking statements include our expectations regarding the value proposition of our next generation platform, the timing of its launch, the OcuHub divestiture’s impact on expenses, and the business outlook.
Forward-looking statements involve risks and uncertainties related to our business and the general economic environment, many beyond our control. These risks, uncertainties and other factors could cause our actual results to differ materially from those projected in forward-looking statements, including market risk and the risks we identify in reports filed with the SEC.
Although we believe that the forward-looking statements contained herein are reasonable, we can give no assurance that our expectations are correct. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. For a detailed description of our risks and uncertainties, you are encouraged to review the official corporate documents filed with the SEC. TearLab does not undertake any obligation to publicly update its forward-looking statements based on events or circumstances after the date hereof except as required by law.
CONTACTS:
Investors:
Stephen Kilmer
(647) 872-4849
skilmer@tearlab.com
TearLab Announces Proposed Public Offering of Common Stock
SAN DIEGO, CA, February 1, 2016 — TearLab Corporation (NASDAQ:TEAR; TSX:TLB) (“TearLab” or “the Company”) announced today its intention to offer, subject to market and other conditions, shares of its common stock in an underwritten public offering. The Company currently estimates the size of the offering at $15.0 million. In addition, TearLab intends to grant the underwriters of the offering the right for a period of 30 days to purchase up to an additional $2.25 million of shares of common stock at the public offering price, less underwriting discounts and commissions. The proceeds of the offering will be used for general corporate purposes, including commercializing our products, research and product development, capital expenditures, and working capital.
Stephens Inc. and Craig-Hallum Capital Group LLC are acting as joint book-running managers for the offering. Feltl and Company, Inc. and Roth Capital Partners are acting as co-managers.
TearLab intends to offer and sell these securities pursuant to its existing shelf registration statement (File No. 333-201355) filed with the Securities and Exchange Commission on January 2, 2015, and declared effective on December 11, 2015. A preliminary prospectus supplement describing the terms of the offering will be filed with the Securities and Exchange Commission and will form a part of the effective registration statement. Copies of the preliminary prospectus supplement and accompanying prospectus relating to the offering may be obtained, when available, by contacting the below book running managers at the following addresses:
Stephens Inc.
Attention: Prospectus
111 Center Street
Little Rock, AR 72201
Telephone: 501-377-2131
Email: prospectus@stephens.com
Craig-Hallum Capital Group LLC
222 South Ninth Street, Suite 350
Minneapolis, MN 55402
Telephone: 612-334-6300
Email: prospectus@chlm.com
An electronic copy of the preliminary prospectus supplement and accompanying prospectus relating to the offering will be available on the website of the Securities and Exchange Commission at www.sec.gov.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of TearLab, and shall not constitute an offer, solicitation or sale of any security in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About TearLab Corporation
TearLab Corporation (www.tearlab.com) develops and markets lab-on-a-chip technologies that enable eye care practitioners to improve standard of care by objectively and quantitatively testing for disease markers in tears at the point-of-care. The TearLab Osmolarity® Test, for diagnosing Dry Eye Disease, is the first assay developed for the award-winning TearLab Osmolarity System. TearLab Corporation’s common shares trade on the NASDAQ Capital Market under the symbol ‘TEAR’ and on the Toronto Stock Exchange under the symbol ‘TLB’.
Forward-Looking Statements
In order to provide TearLab’s investors with an understanding of our current intentions and future prospects, this release may contain statements that are forward-looking. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Words such as “believes,” “anticipates,” “plans,” “expects,” “will,” “intends,” “potential,” “possible” and similar expressions are intended to identify forward-looking statements. These forward-looking statements include our expectations regarding the proposed offering and the use of proceeds from such offering.
Forward-looking statements involve risks and uncertainties related to our business and the general economic environment, many beyond our control. These risks, uncertainties and other factors could cause our actual results to differ materially from those projected in forward-looking statements, including market risk and the risks we identify in reports filed with the Securities and Exchange Commission.
Although we believe that the forward-looking statements contained herein are reasonable, we can give no assurance that our expectations are correct. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. For a detailed description of our risks and uncertainties, you are encouraged to review the official corporate documents filed with the Securities and Exchange Commission. TearLab does not undertake any obligation to publicly update its forward-looking statements based on events or circumstances after the date hereof.
CONTACTS:
Investors:
Stephen Kilmer
(647) 872-4849
skilmer@tearlab.com