CAESAREA, Israel, Aug. 15, 2014 /PRNewswire/ -- LabStyle Innovations Corp. (OTCQB: DRIO), developer of the Dario™ Diabetes Management Solution, today reported its financial and operational results for the three and six months period ending June 30, 2014. The company also presented an overview of results of the Dario™ smart meter soft launch, recent corporate achievements and anticipated milestones for the remainder of 2014.
The initial launch of the Dario™ smart meter which has been underway since late March 2014 has met with promising market demand demonstrated in the initial soft launch territories; the United Kingdom, Italy, and New Zealand.
The initial launch feedback includes the following:
During the first half and the early third quarter of 2014, LabStyle believes that its roll out execution is on target as he following milestones were achieved:
"It was a very exciting quarter for LabStyle", stated Erez Raphael, president and chief executive officer of LabStyle. "We closed the quarter with first shipments of Dario™ to distributors in Italy, New Zealand and the United Kingdom. We are delighted with the initial market demand that has been demonstrated in the UK and New Zealand where we have marketed the Dario™ smart meter. Although Italy has lagged behind, we have been working very hard to increase market penetration in all the territories and to ensure customer supply and satisfaction. The soft launch has demonstrated product demand and the efficacy of our agile marketing techniques. Compared to the fourth quarter of 2013, our marketing and pre-production expenses have increased, as we prepared for the soft launch that began in March 2014, and we have reduced our research and development expenses and general and administrative spending during this quarter in order to preserve our resources for the ongoing commercialization efforts. The company will require additional funding and will continue to manage its capital resources by reducing the manufacturing costs and research and development expenses as we deal with market demand for the Dario™ smart meter."
Summary of Financial Results As evidenced by a reduction in expenses as detailed below, LabStyle's management is working to focus the company's resources on activities aimed at driving stockholder value.
LabStyle commenced its initial "soft" commercial launch of the Dario™ Smart Meter in late March 2014 with first shipments occurring during April 2014. However, no revenues could be recognized for the second quarter of 2014 since not all revenue recognition criteria according to US-GAAP were met.
As of June 30, 2014, LabStyle had approximately $1,819,000 in cash on hand. The company forecasts such funds will be sufficient to continue its activities into October 2014, and additional funding will be required to meet the company's anticipated milestones.
Ramp up of manufacturing costs for the second quarter of 2014 were approximately $605,000 compared with none for the second quarter of 2013, and for the first half of 2014 were approximately $1,026,000 compared with none for the first half of 2013. The increase was due to the commencement of our initial commercial sales during March 2014 with first shipments occurring during April 2014.
Research and development expenses for the second quarter of 2014 were approximately $1,333,000 compared with approximately $1,416,000 for the second quarter of 2013, and for the first half of 2014 were approximately $2,440,000 compared with $2,091,000 for the first half of 2013. The increase was largely due to recruitment of new employees and progress in product development which resulted in our initial "soft" commercial launch.
Marketing and pre-production expenses were approximately $373,000 for the second quarter of 2014 compared with approximately $664,000 for the second quarter of 2013 and approximately $659,000 in the first half of 2014 compared with approximately $1,161,000 for the first half of 2013. This decrease was largely due to pre-production costs which, during 2013, were allocated to marketing and pre-production costs and in 2014, since we commenced the initial commercial sales of our product, we allocated production costs to ramp up of manufacturing costs.
General and administrative expenses for the second quarter of 2014 were approximately $1,292,000 compared to approximately $1,516,000 for the second quarter of 2013 and approximately $2,146,000 for the first half of 2014 compared with approximately $3,420,000 for the first half of 2013. The decrease from 2013 was mainly due to non-cash stock based compensation and non-cash expenses related to the issuance of common stock and warrants granted to service provider during the first half of 2014 in the amount of approximately $1,199,000 and $0, respectively, compared to non-cash stock-based compensation expenses for the first half of 2013 of approximately $1,358,000 and $1,011,000, respectively.
Financing expenses for the second quarter of 2014 were mainly driven by gain of approximately $396,000 non-cash charge related to the revaluation of warrants, compared with a loss related to the revaluation of warrants of approximately $1,664,000 in the second quarter of 2013. Financing expenses for the first half of 2014 were mainly driven by a gain of approximately $538,000 non-cash charge related to the revaluation of warrants offset by a loss of approximately $489,000 from non-cash issuance costs related to warrants in the first half of 2014, compared with a loss related to the revaluation of warrants of approximately $3,800,000
The net loss for the second quarter of 2014 was approximately $3,254,000, or $0.14 per share, compared with a net loss of approximately $5,286,000, or $0.29 per share, for the second quarter of 2013. For the first six months of 2014 the net loss was approximately $6,238,000, or $0.28 per share, compared with a net loss of approximately $10,513,000, or $0.63 per share, for the first six months of 2013.
The non-GAAP adjusted loss for the second quarter of 2014 was approximately $2,753,000, or $0.11 per share, compared with a non-GAAP adjusted loss for the second quarter of 2013 of approximately $2,251,000, or $0.12 per share. The non-GAAP adjusted loss for the first half of 2014 was approximately $4,714,000, or $0.21 per share, versus a non-GAAP adjusted loss of approximately $3,497,000, or $0.21 per share, in the corresponding period in 2013.
LabStyle used approximately $4,418,000 in cash to fund operating activities during the first half of 2014. As of June 30, 2014, LabStyle had cash, cash equivalents, restricted cash and short-term bank deposits of approximately $1,985,000.
Note on Non-GAAP Measures Readers should note that LabStyle has, in the schedule below, supplemented its GAAP net income (loss) with a non-GAAP measure of adjusted EBITDA. Management believes that this non-GAAP financial measure provides useful supplemental information to management and investors regarding LabStyle's performance, facilitates a more meaningful comparison of results for current periods with previous operating results, and assists management in analyzing future trends, making strategic and business decisions and establishing internal budgets and forecasts. A reconciliation of non-GAAP adjusted EBITDA to GAAP net income (loss) in the most directly comparable GAAP measure is provided in the schedule below.
There are limitations in using this non-GAAP financial measure because it is not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. This non-GAAP financial measure should not be considered in isolation or as a substitute for GAAP financial measures. Investors and potential investors should consider non-GAAP financial measures only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP and the reconciliations of the non-GAAP financial measure provided in the schedule below:UnauditedUS Dollars in thousands except stock and stock dataThree months ended June 30,Six months ended June 30,2014201320142013Net income (loss) as reported $
(10,513)Adjustments: Depreciation160196358314Revaluation of warrants(396)1,664(538)3,800Other finance expenses472650541EBITDA$
(6,358)Stock-based compensation6905311,1991,850Expenses related to Issuance of common stock and warrants to service provider-618-1,011Non-GAAP adjusted EBITDA $
(3,497)Weighted average number of common stock used in computing basic and diluted net loss per share22,985,52318,327,387
22,152,67516,590,423Non-GAAP adjusted EBITDA per stock $
(0.21)About LabStyle InnovationsLabStyle Innovations Corp. (OTCQB:DRIO) develops and commercializes patent-pending technology providing consumers with laboratory-testing capabilities using smart mobile devices. LabStyle's flagship product is the Dario™ Diabetes Management Solution. Dario™ received CE mark certification in September 2013 and began a world rollout in select countries in December 2013. LabStyle filed a Premarket Notification Application, also known as a 510(k), with the US Food and Drug Administration (FDA) for the Dario™ smart meter (Dario™ Blood Glucose Monitoring System) in December 2013. LabStyle is pursuing patent applications in multiple areas covering the specific processes related to blood glucose level measurement as well as more general methods of rapid tests of body fluids using mobile devices and cloud-based services. For more information: www.mydario.com and http://mydario.investorroom.com.
Cautionary Note Regarding Forward-Looking StatementsThis news release and the statements of representatives and partners of LabStyle Innovations Corp. (the "Company") related thereto contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "plan," "project," "potential," "seek," "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate" or "continue" are intended to identify forward-looking statements. Readers are cautioned that certain important factors may affect the Company's actual results and could cause such results to differ materially from any forward-looking statements that may be made in this news release. Factors that may affect the Company's results include, but are not limited to, regulatory approvals, product demand, market acceptance, impact of competitive products and prices, product development, commercialization or technological difficulties, the success or failure of negotiations and trade, legal, social and economic risks, and the risks associated with the adequacy of existing cash resources. Additional factors that could cause or contribute to differences between the Company's actual results and forward-looking statements include, but are not limited to, those risks discussed in the Company's filings with the U.S. Securities and Exchange Commission. Readers are cautioned that actual results (including, without limitation, the timing for and results of the Company's commercial and regulatory plans for Dario™ as described herein) may differ significantly from those set forth in the forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
CONSOLIDATED BALANCE SHEETSU.S. dollars in thousandsJune 30,December 31,20142013UnauditedASSETSCURRENT ASSETS:Cash and cash equivalents $
2,263Restricted cash-38Short-term bank deposits 166154Other accounts receivable and prepaid expenses355475Inventory22-Total current assets2,3622,930LEASE DEPOSIT4941PROPERTY AND EQUIPMENT, NET9911,145Total assets$
4,116 CONSOLIDATED BALANCE SHEETSU.S. dollars in thousands (except stock and stock data) June 30,December 31,20142013UnauditedLIABILITIES AND STOCKHOLDERS' DEFICITCURRENT LIABILITIES:Trade payables $
586Other accounts payable and accrued expenses1,095920Total current liabilities1,7761,506LIABILITY RELATED TO WARRANTS 5,3792,696COMMITMENTS AND CONTINGENT LIABILITIES STOCKHOLDERS' EQUITY DEFICIT:Common Stock of $0.0001 par value -
Authorized: 80,000,000 (unaudited) and 45,000,000 shares at June 30, 2014 and December 31, 2013; Issued and Outstanding: 23,013,889 (unaudited) and 20,071,816 shares at June 30, 2014 and December 31, 2013, respectively22Preferred Stock of $0.0001 par value -
Authorized: 5,000,000 shares at June 30, 2014 and December 31, 2013; Issued: None at June 30, 2014 and December 31, 2013; Outstanding: None at June 30, 2014 and December 31, 2013--Additional paid-in capital22,48619,915Accumulated deficit(26,241)(20,003)Total stockholders' deficit(3,753)(86)Total liabilities and stockholders' deficit$
4,116 CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. dollars in thousands (except stock and stock data)Three months ended June 30Six months ended June 302014201320142013UnauditedUnauditedRevenues$
-Ramp up of manufacturing costs605-1,026-Gross loss605-1,026-Operating expenses:Research and development $
2,091Marketing and pre-production costs3736646591,161General and administrative 1,2921,5162,1463,420Total operating expenses2,9983,5965,2456,672Operating loss3,6033,5966,2716,672Financial expenses (income), net:Revaluation of warrants (396)1,664(538)3,800Other financial expense 472650541Total financial expenses (income), net (349)1,690(33)3,841Net loss $
,513Net loss per share Basic loss per share$
(0.63)Weighted average number of common stock
used in computing basic net loss per share22,985,52318,327,38722,152,67516,590,423Diluted loss per share$
(0.63)Weighted average number of common stock
used in computing diluted net loss per share23,202,07718,327,38722,260,95216,590,423 Contacts: Press
Investor RelationsBrenda Zeitlin
Book and Company Inc.
1 212 490 90951 800 896 9062
|SOURCE LabStyle Innovations Corp.|
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