Great Basin Scientific revenue up 31% in first quarter 2015

Great Basin Scientific, Inc. (NASDAQ: GBSN), a molecular diagnostic testing company, today reported earnings results for the quarter ended March 31, 2015. Revenue for the quarter was $458,730, which represented a 31 percent increase in year-over-year revenues, and Loss from Operations was $3.9 million.

First Quarter 2015 Financial Results:

• Revenue during the three month period ended March 31, 2015, was $458,730 versus $349,135 for the same period in 2014, which represented an increase of 31.4%. This increase was due to growth in the customer base.
• The Company ended the first quarter with 101 U.S. customers and 52 evaluations either in-progress or scheduled as compared to 71 customers and 23 evaluations at the end of the prior year period, an increase of 42.3% and 126.1%, respectively.
• Research and development expenses during the first quarter of 2015 were $1.5 million as compared to $0.8 million in the prior year period, an increase of 84.7%. The change was due to an increase in clinical trials and test development.
• Selling, general and administrative expenses during the first quarter of 2015 were $1.9 million as compared to $1.2 million in the prior year period, an increase of 50.5%. The change was due to increased sales efforts and the increased cost of operating as a public company.
• Loss from Operations was $3.9 million for the first quarter 2015 as compared to $2.5 million for the same period in 2014, an increase of 52.4%.
• Net Loss Per Share was $(13.99) for the first quarter 2015 as compared to $(34.98) for the same period in 2014, a decrease of 60.0%.
  • The Net Loss Per Share includes a non-cash charge of $13.17 per share due to an increase in the derivative liability.
  • Excluding the non-cash derivative liability charge, adjusted net loss per common share for the first quarter 2015 was $(0.82) per share as compared to $(23.74) per share for the first quarter of 2014 a decrease of 96.5%.

Recent Business Highlights

• GBSN completed a Units Offering raising $21.7 million of net proceeds.
• 20% increase in number of revenue generating customers versus the fourth quarter 2014.
• Clinical trial initiated for Shiga Toxin-producing E. coli molecular diagnostic test.
• In January 2015, the Company received a new patent for its sample-to-result molecular diagnostic testing technology.
• On April 22, 2015 the Company received FDA clearance for its Group B Strep molecular diagnostic test.

Warrant Exercises

During the first quarter the Company received 40,000 Series A warrant exercises for proceeds of $88,000. From April 1, 2015 to the date of this release the Company received 785,407 Series A warrant exercises for proceeds of $1,727,895. The Company also received cashless warrant exercises for 483,643 Class A warrants, issuing 225,757 common shares and cashless warrant exercises for 324,889 Class B warrants issuing 307,596 common shares.

Non-GAAP Financial Measure

This press release includes an Adjusted Net Loss "non-GAAP financial measure" as defined by the United States Securities and Exchange Commission (SEC). The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with generally accepted accounting principles (GAAP). For a reconciliation of this non-GAAP financial measure to the nearest comparable GAAP measure, see "Reconciliation of Non-GAAP Financial Measure" included in this press release.

Reconciliation of Non-GAAP financial measure

Adjusted Net Loss

The Company excludes the value of the derivative liability in calculating Adjusted Net Loss because it is non-cash in nature and because the Company believes that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance and liquidity. The Company further believes this measure is useful to investors in that it allows for greater transparency to certain line items in its financial statements and facilitates comparisons to peer operating results.

Change in Fair Value of Derivative Liability

The change in fair value of derivative liability from $10.0 million on December 31, 2014 to $98.7 million on March 31, 2015 resulted in a non-cash expense in the amount of $67.0 million for the first quarter of 2015. The charge is the result of the issuance of the Series C common warrants offered as part of our Units offering as well as the increase in the fair value of the Class A, Class B, Series A, and Series B common warrants previously issued. Fair value accounting requires that warrants accounted for as derivative liabilities be recorded at fair value at inception and any changes in the fair value of the derivative liabilities be charged or credited to income during each accounting period. The changes in valuation have several variables; primary among them is the change in the Company's stock price since decreases in the stock price produce gains on the derivative liability, while increases in the stock price produces losses on the derivative liability. The value of our common stock during the first quarter increased to $3.90 on March 31, 2015, from $2.46 on December 31, 2014.