EX-99.1 2 ex99-1.htm

 

Exhibit 99.1

 

TearLab Corporation Reports Second Quarter and June Year-To-Date 2016 Financial Results

 

SAN DIEGO, August 3, 2016 — TearLab Corporation (NASDAQ:TEAR) (TSX: TLB) (“TearLab” or the “Company”) today reported its consolidated financial results for the second quarter and six months ended June 30, 2016. All dollar amounts are expressed in U.S. currency and results are reported in accordance with United States generally accepted accounting principles except where noted otherwise.

 

Q2 Highlights

 

  ● Year-to-date revenue grew 16% compared to the same period in 2015
     
  ● Cash burn of $2.6 million declined $4 million from the first quarter of 2016
     
  ● Basic loss per share in the second quarter of 2016 improved by $0.14 compared to the same period in 2015.
     
  ● Flex business achieved a new record of $19,963 annualized revenue per account
     
  ● Completed a follow-on equity offering for gross proceeds of $17.3 million on May 9, 2016 resulting in an ending cash position at June 30, 2016 of $20.1 million

 

For the three months ended June 30, 2016, TearLab’s net revenues were $6.9 million, up 9% from $6.3 million for the same period in 2015. A net total of 58 TearLab Osmolarity® Systems were added in the second quarter of 2016, of which 61 were under the Company’s new Flex program and 35 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 second quarter ended June 30, 2016:

 

           Annualized   Annualized 
   Active   Active   Revenue   Revenue 
Program  Devices   Accounts   Per Device   Per Account 
Purchased   372    316   $1,878   $2,211 
Use    261    260   $5,353   $5,374 
Masters   1,731    223   $3,612   $28,040 
Flex   1,798    798   $8,860   $19,963 
Total   4,162    1,597           

 

The Company’s Adjusted Loss Per Share (a non-GAAP financial measure) for the second quarter of 2016, taking into account its new capital structure after the May 9, 2016 financing, was ($0.08)(1) compared to an Adjusted Loss Per Share in the first quarter of 2016 of ($0.14) (1) on a comparable basis. Reported net loss for the 2016 second quarter was approximately $4.3 million, or ($0.10) basic loss per share, compared to a reported net loss of approximately $8.1 million, or ($0.24) basic loss per share, in the second quarter of 2015.

 

“We achieved important milestones in the second quarter including a financing round that provides us with a long runway and strengthens our balance sheet. We also implemented a new and more efficient sales model that significantly reduced our expenses and cash burn while at the same time we reached record utilization levels in our Flex business and increased our footprint of Flex devices and accounts. We believe all of these developments position us well for growth in the second half of 2016,” said Seph Jensen, TearLab’s Chief Executive Officer.

 

 
   

 

Current Business Outlook

 

  ● TearLab expects annual revenue growth of 13% - 18% for the full year 2016.
     
  ● The Company continues to make progress on its next generation platform to incorporate additional biomarkers in a single test. The Company has made the strategic decision to include three biomarkers on the first test in its next generation device including osmolarity and two biomarkers for inflammation. The Company still expects to receive CE mark in the European Union by the end of December 2016. The CE mark approval is then expected to be used to build clinical data and the registration file for a 510K submission to the U.S. Food and Drug Administration (FDA) in the first half of 2017.
     
  ● The Company expects to spend approximately $1.5 million in additional R&D spending for the remainder of the year in order to add the additional biomarker and retain the timeline for submission for its next generation device. The majority of the incremental cash costs will be absorbed through operating expense offsets, more efficient capital expenditures and working capital improvements.
     
  ● The Company expects its cash burn under its new operating model for the remainder of 2016 to be in the range of $6.0 million to $6.5 million which includes the full funding of the $1.5 million additional R&D cost.

 

Mr. Jensen commented further, “With the recent approval of Xiidra™ (lifitegrast ophthalmic solution) 5% by Shire and subsequent feedback received from key opinion leaders and customers, we have decided to increase our investment in the development of our next generation device that will result in a more robust commercial profile. However, we have been able to fund the majority of this increased investment through cash spending offsets which allows us to maintain our path to sustainability within our current capital structure.”

 

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

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among others, statements concerning our future financial and operational performance including anticipated savings from the strategic restructuring, opportunities associated with new program offerings, accessing future capital, and plans with respect to our marketing strategy. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by the forward-looking statements. Forward-looking statements are based on management’s current, preliminary expectations and are subject to various risks and uncertainties. Many factors, risks and uncertainties may cause our actual results to differ materially from forward-looking statements, including the factors, risks, and uncertainties detailed in our filings with the Securities and Exchange Commission and Canadian securities regulatory authorities, including but not limited to our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 9, 2016, and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, expected to be filed with the SEC on August 4, 2016. We do not undertake to update any forward-looking statements except as required by law.

 

 
   

 

(1) Adjusted Loss Per Share is a Non-GAAP measure. The Company has included this Non-GAAP measure this quarter as its capital structure changed significantly during the second quarter of 2016 making comparison of results on a per share basis from the previous quarter difficult. The Adjusted Loss Per Share was calculated by using the basic common shares outstanding as of June 30, 2016 and dividing this number by the GAAP Net Loss of the Company for both the second and the first quarter of 2016 to arrive at a Loss Per Share number that is more comparable between quarters. The Company believes investors would use this number to be more informative of how much the company improved its operations and operating loss between both quarters ignoring the effects of the issuance of more shares, which does not reflect true changes in operating results. The Company chose the number of shares outstanding as of June 30, 2016 to allow investors to better predict how the changes in operations will effect Loss Per Share in future quarters. The following table reconciles Adjusted Loss Per Share for the second and first quarter of 2016 to the reported amounts:

 

   Reported   Adjusted     
(000’s Except per Share Data)  Loss per Share   Loss per Share   Difference 
Net Loss, Quarter ended June 30, 2016   (4,344)   (4,344)   - 
Shares Outstanding   44,849    52,825    7,976 
Loss Per Share, Quarter ended June 30, 2016   (0.10)   (0.08)   0.02 
                
                
Net Loss, Quarter ended March 31, 2016   (7,254)   (7,254)   - 
Shares Outstanding   33,826    52,825    19,000 
Loss Per Share, Quarter ended March 31, 2016   (0.21)   (0.14)   0.09 

 

 
   

 

TearLab Corp.

 

Condensed Consolidated Statements of Operations and Consolidate Loss

 

(Expressed in U.S. Dollars (000’s) except for number of shares and net loss per share)

 

(Unaudited)

 

   Three months 
   ended June 30, 
   2016   2015 
Revenue          
Product sales  $5,428   $4,920 
Reader equipment rentals   1,475    1,425 
Total revenue   6,903    6,345 
Cost of goods sold          
Cost of goods sold (excluding amortization of intangible assets)   2,465    2,812 
Cost of goods sold - reader equipment depreciation   555    404 
Gross profit   3,883    3,129 
Operating expenses          
Sales and marketing   3,364    5,065 
Clinical, regulatory and research & development   661    1,711 
General and administrative   2,960    3,673 
Amortization of intangible assets   304    382 
Total operating expenses   7,289    10,831 
Loss from operations   (3,406)   (7,702)
Other income (expense)   (938)   (370)
Net loss and comprehensive loss  $(4,344)  $(8,072)
Weighted average shares outstanding - basic   44,849,247    33,658,153 
Net loss per share – basic  $(0.10)  $(0.24)
Weighted average shares outstanding - diluted   44,849,247    33,703,584 
Net loss per share – diluted  $(0.10)  $(0.24)

 

 
   

 

TearLab Corp.

 

Condensed Consolidated Statements of Operations and Consolidate Loss

 

(Expressed in U.S. Dollars (000’s) except for number of shares and net loss per share)

 

(Unaudited)

 

   Six months 
   ended June 30, 
   2016   2015 
Revenue          
Product sales  $10,930   $9,011 
Reader equipment rentals   2,740    2,741 
Total revenue   13,670    11,752 
Cost of goods sold          
Cost of goods sold (excluding amortization of intangible assets)   5,005    5,246 
Cost of goods sold - reader equipment depreciation   1,109    749 
Gross profit   7,556    5,757 
Operating expenses          
Sales and marketing   8,000    10,343 
Clinical, regulatory and research & development   1,799    3,115 
General and administrative   6,891    7,309 
Amortization of intangible assets   608    764 
Total operating expenses   17,298    21,531 
Loss from operations   (9,742)   (15,774)
Other income (expense)   (1,856)   (466)
Net loss and comprehensive loss  $(11,598)  $(16,240)
Weighted average shares outstanding - basic   39,337,458    33,650,479 
Net loss per share – basic  $(0.29)  $(0.48)
Weighted average shares outstanding - diluted   39,337,458    33,697,938 
Net loss per share – diluted  $(0.29)  $(0.49)

 

 
   

 

TearLab Corp.

 

Consolidated Balance Sheets

 

(Expressed in U.S. Dollars (000’s)

 

(Unaudited)

 

   June 30, 2016   December 31, 2015 
ASSETS          
Current assets          
Cash  $20,110   $13,838 
Accounts receivable, net   2,257    3,021 
Inventory   3,307    3,972 
Prepaid expenses and other current assets   1,104    790 
Total current assets   26,778    21,621 
           
Fixed assets, net   4,957    5,352 
Intangible assets, net   556    1,197 
Other non-current assets   247    181 
Total assets  $32,538   $28,351 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities          
Accounts payable  $2,278   $2,292 
Accrued liabilities   3,003    5,047 
Deferred Rent   97    114 
Obligations under warrants   —    29 
Total current liabilities   5,378    7,482 
           
Long-term debt   25,524    24,859 
           
Total liabilities   30,902    32,341 
           
Exchange right   —    250 
           
Stockholders’ equity (deficit)          
Capital stock          
Preferred Stock, $0.001 par value, 10,000,000 authorized, 3,292 and 0 issued and outstanding at June 30, 2016 and December 31, 2015, respectively   2,275    — 
Common stock, $0.001 par value, 95,000,000 and 65,000,000 authorized, 52,825,347 and 33,760,904 issued and outstanding at June 30, 2016 and December 31, 2015, respectively   53    34 
Additional paid-in capital   503,694    488,514 
Accumulated deficit   (504,386)   (492,788)
Total stockholders’ equity (deficit)   1,636    (4,240)
Total liabilities and stockholders’ equity  $32,538   $28,351