84% increase in sequential quarterly revenues
- Quarterly gross loss narrowed 61% compared to Q4 2015
- Net loss narrowed by 29% compared to Q4 2015
- Launched Dario Blood Glucose Monitoring System in the United States late in the first quarter
- Social media marketing campaign featured in Business Success Story case study on Facebook.com
- Completed $8.5 million capital raise and NASDAQ uplisting
CAESAREA, Israel, May 11, 2016 /PRNewswire/ — LabStyle Innovations Corp. (NASDAQ: DRIO), developer of the Dario™ Diabetes Management Solution, today reported financial and operational results for the quarter ended March 31, 2016 and provided an outlook for the coming quarters.
“We are very proud of our progress during the first quarter of 2016. Our continued growth in revenues, and the narrowing of our gross loss and net loss provide evidence of the continued adoption of the Dario, and represent an important endorsement of our user-centric approach to diabetes management from the market,” said Erez Raphael, LabStyle’s Chief Executive Officer. “In the first quarter, we reached a major milestone by successfully completing our public offering, increasing the Company’s shareholder’s equity and uplisting our stock to NASDAQ. The proceeds of this capital raise will enable us to ramp our sales and marketing initiatives in the U.S., as well as expand Dario’s presence to additional strategic markets, while more effectively serving customers in our existing markets. Our mission is to bring positive change to people with diabetes around the world, while leading the growth and innovation in the digital and mHealth market. We believe we have the right product and the right strategy to succeed in these efforts and look forward to the opportunities ahead of us.”
First Quarter 2016 Financial Highlights
- Sequential quarterly revenues from distribution partners and customers of products and software services increased 84% from $308,000 in Q4 2015 to $568,000 in Q1 2016.
- Initial online sales in the U.S.
- Gross loss narrowed by 61% in Q1 2016, compared to Q4 2015
- Net loss narrowed by 29% in Q1 2016, compared to Q4 2015
- Shareholders’ equity increased to $7.6 million at the end of Q1 compared to a shareholders’ deficiency of $1.6 million and the end of Q4 2015
- Completed $8.5 million capital raise and uplisted to NASDAQ
Summary of Financial Results
LabStyle’s revenues for Q1 2016 totaled approximately $568,000, an 84% increase compared to approximately $308,000 in Q4 2015. This includes product sales to distributors in the United Kingdom, the Netherlands, New Zealand, Australia and Canada and initial sales in the U.S. to direct customers, as well as services provided with respect to LabStyle’s patient management software platform.
GAAP gross loss decreased by approximately $157,000, or 61%, to approximately $102,000 in Q1 2016, compared to approximately $259,000 in Q4 2015.
GAAP net loss attributable to holders of common stock, as detailed in the table below, improved by approximately $483,000, or 29%, to approximately $1,189,000 in Q1 2016, compared to approximately $1,672,000 in Q4 2015.
Non-GAAP adjusted EBITDA loss in the first quarter of 2016, as detailed in the table below, improved by approximately $76,000, or 4.8%, to approximately $1,497,000 for the first quarter of 2016, compared to approximately $1,573,000 in Non-GAAP adjusted EBIDTA loss in the fourth quarter of 2015.
As of March 31, 2016 cash and cash equivalents totaled approximately $8,267,000, compared to approximately $2,671,000 at the end of 2015.
Note on Non-GAAP Measures
Readers should note that LabStyle has, in certain disclosures above and in the schedule below, supplemented its GAAP net 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 the current period 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 EBIDTA to GAAP net loss, 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:
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|
Three Months ended March 31, |
||||
| 2016 | 2015 | ||||
| Net loss as reported | $ (1,644) | $ (1,638) | |||
| Adjustments: | |||||
| Depreciation | 102 | 79 | |||
| Revaluation of warrants | (747) | (150) | |||
| Other finance expense | 13 | 11 | |||
| Deemed dividend related to Series A Preferred Stock exchange agreement | 455 | – | |||
| Stock-based compensation and Common Stock | 324 | 125 | |||
| Non-GAAP adjusted EBITDA | $ (1,497) | $ (1,573) | |||
| Weighted average number of Common Stock used in computing basic net loss per share | 3,652,474 | 1,175,603 | |||
| Non-GAAP adjusted EBITDA per share | $ (0.41) | $ (1.34) | |||
About LabStyle Innovations
LabStyle Innovations Corp. (NASDAQ: DRIO) creates innovative mobile and digital tools that empower and engage users to lead healthier lives. LabStyle’s “Real data. Real time. Real improvements” approach and strategy is positioning the company as a major player in the mHealth industry; an industry currently worth $10B and expected to reach $31B by 2020. LabStyle’s flagship product, The Dario™ Smart Diabetes Management Solution, is a platform for diabetes management that combines an all-in-one blood glucose meter, native smart phone app (iOS & Android), website portal and a wide variety of treatment tools to support more proactive and better informed decisions by users living with diabetes, their doctors and healthcare systems.
Cautionary Note Regarding Forward-Looking Statements
This news release and the statements of representatives and partners of LabStyle Innovations Corp. (the “Company”) related thereto contain 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. For example, the Company is using forward-looking statements in this press release when the Company discusses the planned use of proceeds from its capital raise, the Company’s future opportunities, and the expected size of the mHealth industry. 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 SHEETS
U.S. dollars in thousands
| March 31, December 31, | ||||||
| 2016 | 2015 | |||||
| Unaudited | ||||||
| ASSETS | ||||||
| CURRENT ASSETS: | ||||||
| Cash and cash equivalents | $ 8,267 | $ 2,671 | ||||
| Short-term bank deposits | 82 | 80 | ||||
| Inventories | 1,005 | 601 | ||||
| Other accounts receivable and prepaid expenses | 894 | 935 | ||||
| Total current assets | 10,248 | 4,287 | ||||
| LEASE DEPOSITS | 33 | 41 | ||||
| PROPERTY AND EQUIPMENT, NET | 682 | 749 | ||||
| Total assets | $ 10,963 | $ 5,077 | ||||
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except stock and stock data)
|
March 31, December 31, |
||||||
| 2016 | 2015 | |||||
| Unaudited | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY) | ||||||
| CURRENT LIABILITIES: | ||||||
| Trade payables | $ 556 | $ 978 | ||||
| Deferred revenues | 8 | 31 | ||||
| Other accounts payable and accrued expenses | 925 | 681 | ||||
| Total current liabilities | 1,489 | 1,690 | ||||
| LIABILITY RELATED TO WARRANTS | 1,863 | 2,610 | ||||
| COMMITMENTS AND CONTINGENT LIABILITIES | ||||||
| CONVERTIBLE PREFERRED SHARES: | ||||||
| Series A Preferred Stock of $0.0001 par value –
Authorized: 60,000 shares at March 31, 2016 (unaudited) and December 31, 2015; Issued and Outstanding: None and 1,984 shares at March 31, 2016 (unaudited) and December 31, 2015 respectively; Aggregate liquidation preference of none and $3,560 at March 31, 2016 (unaudited) and December 31, 2015, respectively |
– | 2,357 | ||||
| STOCKHOLDERS’ EQUITY (DEFICIENCY) | ||||||
| Common Stock of $0.0001 par value –
Authorized: 160,000,000 shares at March 31, 2016 and (unaudited) and December 31, 2015; Issued and Outstanding: 5,755,633 and 2,911,788 shares at March 31, 2016 (unaudited) and December 31, 2015, respectively |
6 | 5 | ||||
| Preferred Stock of $0.0001 par value –
Authorized: 4,940,000 shares at March 31, 2016 (unaudited) and December 31, 2015; Issued and Outstanding: None at March 31, 2016 (unaudited) and December 31, 2015 |
– | – | ||||
| Additional paid-in capital | 52,603 | 41,769 | ||||
| Accumulated deficit | (44,998) | (43,354) | ||||
| Total stockholders’ equity (deficiency) | 7,611 | (1,580) | ||||
| Total liabilities and stockholders’ equity (deficiency) | $ 10,963 | $ 5,077 | ||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
U.S. dollars in thousands (except stock and stock data)
| Three months ended March 31, | ||||||
| 2016 | 2015 | |||||
| Unaudited | ||||||
| Revenues | $ 568 | $ 67 | ||||
| Cost of revenues | 670 | 297 | ||||
| Gross loss | 102 | 230 | ||||
| Operating expenses: | ||||||
| Research and development | $ 397 | $ 883 | ||||
| Sales and marketing | 519 | 252 | ||||
| General and administrative | 905 | 412 | ||||
| Total operating expenses | 1,821 | 1,547 | ||||
| Operating loss | 1,923 | 1,777 | ||||
| Financial expenses (income), net: | ||||||
| Revaluation of warrants | (747) | (150) | ||||
| Other financial expense, net | 13 | 11 | ||||
| Total financial expenses (income), net | (734) | (139) | ||||
| Net loss | $ 1,189 | $ 1,638 | ||||
| Deemed dividend related to Series A Preferred Stock exchange agreement | $ 455 | $ – | ||||
| Net loss attributable to holders of Common Stock | $ 1,644 | $ 1,638 | ||||
| Net loss per share | ||||||
| Basic and diluted loss per share | $ (0.33) | $ (1.39) | ||||
| Weighted average number of Common Stock used in computing basic and diluted net loss per share | 3,652,474 | 1,175,603 | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
| Three months ended March 31, | ||||
| 2016 | 2015 | |||
| Unaudited | ||||
| Cash flows from operating activities: | ||||
| Net loss | $ (1,189) | $ (1,638) | ||
| Adjustments required to reconcile net loss to net cash used in operating activities: | ||||
| Stock-based compensation and Common Stock to service providers | 324 | 125 | ||
| Depreciation | 102 | 79 | ||
| Increase in trade receivables | – | (22) | ||
| Decrease accounts receivable and prepaid expenses | 10 | 22 | ||
| Increase in inventories | (404) | – | ||
| Increase (decrease) in trade payables | (422) | 145 | ||
| Increase (decrease) in deferred revenues | (23) | 32 | ||
| Increase (decrease) in other accounts payable and accrued expenses | 244 | (118) | ||
| Decrease in the fair value of warrants | (747) | (150) | ||
| Net cash used in operating activities | (2,105) | (1,525) | ||
| Cash flows from investing activities: | ||||
| Proceeds from maturities of short-term bank deposits | – | (13) | ||
| Investment in restricted cash | – | 13 | ||
| Maturity of (investment in) lease deposits | 8 | 7 | ||
| Purchase of property and equipment | (35) | (36) | ||
| Net cash used in investing activities | (27) | (29) | ||
| Cash flows from financing activities: | ||||
| Proceeds from issuance of Common Stock and warrants, net of issuance cost | 7,538 | 1,956 | ||
| Proceeds from exercise of options and warrants | 190 | *) – | ||
| Net cash provided by financing activities | 7,728 | 1,956 | ||
| Increase in cash and cash equivalents | 5,596 | 402 | ||
| Cash and cash equivalents at the beginning of the period | 2,671 | 1,453 | ||
| Cash and cash equivalents at the end of the period | $ 8,267 | $ 1,855 | ||
| Non-cash investing and financing activities: | ||||
| Purchase of property and equipment | $ – | $ 29 | ||
| Conversion of Series A Preferred Stock into Common Stock | $ 2,277 | $ 102 | ||
| Payment for executives under Salary Program | $ 51 | $ – | ||
*) Represents an amount lower than $1
| Press | Investor Relations |
| Brenda Zeitlin
LabStyle Innovations Corp. |
Lee Roth
The Ruth Group |
| 1 800 896 9062 | 646 536 7012 |
| Brenda@mydario.com | lroth@theruthgroup.com |