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CST: 23/09/2019 06:01:27   

Obalon Announces Second Quarter 2019 Financial Results

60 Days ago

SAN DIEGO, July 24, 2019 (GLOBE NEWSWIRE) -- Obalon Therapeutics, Inc. (NASDAQ:OBLN), a vertically integrated medical technology company with the first and only FDA-approved swallowable, gas-filled intragastric balloon system for the treatment of obesity, today announced its financial results for the second quarter ended June 30, 2019.

Second Quarter 2019 highlights:

  • Further streamlined operations and spend to support new commercial strategy
  • Promoted William Plovanic to President and Chief Financial Officer
  • Appointed Robert MacDonald as Chief Retail Officer to create network of Obalon-branded retail outlets
  • Signed store lease to begin the development of Obalon's first Company-owned retail weight loss center targeted to open in Fall 2019
  • Raised $8.8 million in equity capital
  • Reduced debt by $15 million

"We worked throughout the second quarter to restructure the organization, making key leadership changes, significantly reducing expenses, and improving our balance sheet in preparation of the roll out of our new business model later this fall,” said William J. Plovanic, Obalon’s President and Chief Financial Officer. “There continues to be significant patient interest in our proprietary and patented FDA-approved weight loss solution, and our strategy to create a network of retail centers dedicated to treatment with the Obalon Balloon System is intended make this safe and effective technology available to obese individuals who are frustrated with not being able to lose weight with diet and exercise-alone and who are not interested in surgery. I look forward to providing more detail on the Obalon retail center strategy on our earnings call today.”

Revenues for the second quarter of 2019 was $0.4 million, compared to $2.7 million for the second quarter of 2018, as the Company restructured its operations, eliminating its direct field sales force in advance of a transition to its new strategy and business model. Obalon intends to create a network of Company-owned retail weight loss centers dedicated to delivering the Obalon Balloon System. Net loss for the second quarter of 2019 was $6.8 million, compared to $9.8 million for the second quarter of 2018. Net loss per share for the second quarter of 2019 was $0.25, compared to $0.57 for the second quarter of 2018.

Cost of revenue was $0.7 million for the second quarter of 2019, down from $1.7 million for the second quarter of 2018. Gross deficit for the second quarter of 2019 was $0.3 million, compared to a gross profit of $1.0 million for the second quarter of 2018.

Research and Development expense for the second quarter of 2019 totaled $1.8 million, down from $3.4 million for the second quarter of 2018. Selling, General and Administrative expense decreased to $4.3 million for the second quarter of 2019, compared to $7.3 million for the second quarter of 2018.

Operating loss for the second quarter of 2019 was $6.4 million, down from a loss of $9.6 million for the second quarter of 2018.

As of June 30, 2019, the Company had cash and cash equivalents of $13.5 million and $5.0 million of debt outstanding under its loan and security agreement. The terms of the loan and security agreement require the Company to maintain a cash balance in its account with the lender in an amount equal to the amount of outstanding indebtedness.

Call Information

A conference call to discuss second quarter 2019 financial results is scheduled for today, July 24, 2019, at 8:30 AM Eastern Time (5:30 AM Pacific Time). Interested parties may access the conference call by dialing (844) 889-7791 (U.S.) or (661) 378-9934 (international) using passcode 1787979. Media and individuals will be in a listen-only mode. Participants are asked to dial in a few minutes prior to the call to register for the event. The conference call will also be webcast live at: http://edge.media-server.com/mmc/p/vvo9cozg.

An archive of the webcast will be available for twelve months following the event on the Obalon Therapeutics, Inc. website located at http://investor.obalon.com in the “News & Events” section.

About Obalon Therapeutics, Inc. 
Obalon Therapeutics, Inc. (NASDAQ:OBLN) is a San Diego-based company focused on developing and commercializing novel technologies for weight loss. For more information, please visit http://www.obalon.com.

For Obalon Therapeutics, Inc.

Investor Contact: 
William Plovanic 
President and Chief Financial Officer 
Obalon Therapeutics, Inc. 
Office: +1 760 607 5103 
wplovanic@obalon.com


OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except shares and per share data)

  Three Months Ended June 30,   Six Months Ended June 30,
  2019   2018   2019   2018
               
  (Unaudited)
Revenue $ 386     $ 2,732     $ 2,161     $ 4,078  
Cost of revenue 679     1,732     1,911     2,501  
Gross (deficit) profit (293 )   1,000     250     1,577  
Operating expenses:              
Research and development 1,788     3,352     4,227     5,991  
Selling, general and administrative 4,332     7,250     10,536     17,256  
Total operating expenses 6,120     10,602     14,763     23,247  
Loss from operations (6,413 )   (9,602 )   (14,513 )   (21,670 )
Interest expense, net (295 )   (57 )   (485 )   (94 )
Other expense, net (59 )   (94 )   (59 )   (115 )
Net loss (6,767 )   (9,753 )   (15,057 )   (21,879 )
Other comprehensive income             6  
Net loss and comprehensive loss $ (6,767 )   $ (9,753 )   $ (15,057 )   $ (21,873 )
Net loss per share, basic and diluted $ (0.25 )   $ (0.57 )   $ (0.60 )   $ (1.29 )
Weighted-average common shares outstanding, basic and diluted 26,877,568     17,039,876     25,005,475     17,013,529  



OBALON THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and par value data)

  June 30, 2019   December 31, 2018
Assets (Unaudited)
Current assets:      
Cash and cash equivalents $ 13,513     $ 21,187  
Short-term investments     2,548  
Accounts receivable, net of allowance of $900 and $665, respectively 447     870  
Inventory 2,107     1,580  
Other current assets 954     2,462  
Total current assets 17,021     28,647  
Property and equipment, net 1,038     1,739  
Lease right-of-use assets 1,140      
Total assets $ 19,199     $ 30,386  
Liabilities and Stockholders’ Equity      
Current liabilities:      
Accounts payable $ 1,082     $ 1,159  
Accrued compensation 1,093     3,805  
Deferred revenue 320     352  
Other current liabilities 2,127     1,985  
Current portion of lease liabilities 468      
Current portion of long-term loan 5,000     9,930  
Total current liabilities 10,090     17,231  
Lease liabilities long-term 722      
Other long-term liabilities     48  
Total long-term liabilities 722     48  
Total liabilities 10,812     17,279  
Commitments and contingencies      
Stockholders’ equity:      
Common stock, $0.001 par value; 100,000,000 shares authorized as of June 30, 2019 and December 31, 2018; 35,582,614 and 23,513,292 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively 36     23  
Additional paid-in capital 172,162     161,838  
Accumulated deficit (163,811 )   (148,754 )
Total stockholders’ equity 8,387     13,107  
Total liabilities and stockholders’ equity $ 19,199     $ 30,386  



OBALON THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

  Six Months Ended June 30,
  2019   2018
  (Unaudited)
Operating activities:      
Net loss $ (15,057 )   $ (21,879 )
Adjustments to reconcile net loss to net cash used in operating activities:      
Depreciation 256     276  
Stock-based compensation 1,641     2,603  
Loss on disposal of fixed assets 95     107  
Amortization of right-of-use asset 186      
Accretion of investment discount, net (2 )   (7 )
Amortization of debt discount 70     22  
Change in operating assets and liabilities:      
Accounts receivable, net 423     1,174  
Inventory (157 )   (424 )
Other current assets 1,760     857  
Accounts payable (191 )   275  
Accrued compensation (2,712 )   (2,362 )
Deferred revenue (32 )   (208 )
Lease liabilities, net (136 )    
Other current and long term liabilities (142 )   842  
     Net cash used in operating activities (13,998 )   (18,724 )
Investing activities:      
Purchases of short-term investments     (995 )
Maturities of short-term investments 2,550     23,301  
Purchase of property and equipment (20 )   (657 )
     Net cash provided by (used in) investing activities 2,530     21,649  
Financing activities:      
Proceeds from long-term loan 10,000      
Payment on long-term loan (15,000 )    
Proceeds from issuance of common stock, net of issuance costs 8,793      
Proceeds from stock issued under employee stock purchase plan     148  
Proceeds from sale of common stock upon exercise of stock options 1     31  
     Net cash provided by financing activities 3,794     179  
     Net (decrease) increase in cash and cash equivalents (7,674 )   3,104  
Cash and cash equivalents at beginning of period 21,187     21,108  
Cash and cash equivalents at end of period $ 13,513     $ 24,212  
Supplemental cash flow information:      
Interest paid $ 563     $ 307  
Unpaid issuance costs $ 377     $  
Property and equipment in accounts payable $     $ 106  

 

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