SALT LAKE CITY, Feb. 18, 2015 /PRNewswire/ -- Great Basin Scientific, Inc. (NASDAQ: GBSN), a molecular diagnostics company, today reported financial results for the fourth quarter and the full year ended December 31, 2014. For the fourth quarter of 2014, revenue was $445,283, an increase of 50.5% compared to $295,785 for the fourth quarter of 2013. For the 12 months ended December 31, 2014 revenue was $1,606,254, an increase of 111.2% compared to $760,646 for the 12 months ended December 31, 2013.
Recent Business Highlights
- Filed a 510(k) pre-market application for the Company’s Group B Strep test in November of 2014
- Initiated a clinical trial for the Company’s Staph ID/R panel in November of 2014
- Initiated a clinical trial for the Company’s Shiga toxin producing E. coli (STEC) test in February of 2015
Fourth Quarter and Full Year 2014 Financial Results:
- Revenue during the three month period ended December 31, 2014, was $445,283 vs. $295,785 for the same period in 2013, which represented an increase of 50.5%. For the year ended December 31, 2014 revenue was $1,606,254, an increase of 111.2% compared to $760,646 for the year ended December 31, 2013.
- The Company ended the quarter with 84 U.S. customers.
- Operating expenses during the three month period ended December 31, 2014, were $2.9 million as compared to $1.8 million in the prior year period, an increase of 59.9%. For the year ended December 31, 2014 operating expenses were $9.8 million as compared to $7.9 million in the prior year period, an increase of 25.2%.
- Loss from Operations was $3.7 million for the three months ended December 31, 2014 as compared to $2.6 million for the same period in 2013, an increase of 39.6%. For the year ended December 31, 2014 the loss from operations was $12.2 million as compared to $9.3 million in the prior year period, an increase of 31.4%.
- Net Income per common share for the three months ended December 31, 2014 was $0.33 and $0.14 per share on a basic and diluted basis respectively, as compared to a Net Loss of $24.34 per share on a basic and diluted basis for the same period in 2013. The net income for the three months ended December 31, 2014 was the result of a non-cash gain from the change in the fair value of our derivative liability. Net Loss per common share for the year ended December 31, 2014 was $17.32 per share on a primary and fully diluted basis, as compared to a Net Loss of $104.71 per share on a primary and diluted basis for the prior year period.
Fourth Quarter 2014 Operating Results
Revenue
Revenue increased by $149,498, or 50.5% in the three months ended December 31, 2014 as compared to the three months ended December 31, 2013. This increase was attributable to the increase in the sales of our C. diff tests following an increase in the number of our customers.
Cost of Sales
Cost of sales increased $99,650, or 9.0%, for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013. The increase is attributable to the increased costs associated with manufacturing additional C. diff tests and the depreciation on additional analyzers needed to support the increase in customers. The gross loss decreased from (274.4)% for the three months ended December 31, 2014 to (171.1)% for the three months ended December 31, 2014.
Research and Development
Research and development expenses increased by $677,983, or 101.7%, for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013 as we filed our 510(k) pre-market application for Group B Strep, began our Staph ID/R panel clinical trial and ramped up efforts to prepare additional diagnostic assay for clinical trials.
Selling and Marketing
Selling and marketing expenses increased $102,406, or 18.5%, for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013 as we reinitiated our sales and marketing activities and hired additional sales people to increase our Sales Funnel.
General and Administrative
General and administrative expenses increased $314,340, or 51.6%, for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013 as we increased our business activities, raised additional capital, completed an initial public offering and began operations as a public company.
Interest Expense
Interest expense increased by $146,561, or 86.1%, for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013 due to an increase in interest incurred on our capital lease payments and our letters of credit associated with the analyzer sale-leaseback agreement and interest on our related party note payable.
Liquidity and Capital Resources
As of December 31, 2014, Great Basin had approximately $2.0 million in cash and cash equivalents on hand, as compared to $1.2 million as of December 31, 2013.
Change in Fair Value of Derivative Liability
The change in fair value of derivative liability resulted in other income of $5.5 million as a result of the change in the estimated fair value of certain warrants during the three months ended December 31, 2014. These warrants contain an exercise price adjustment provision that requires them to be accounted for as a derivative liability. The warrants were granted during 2014 and revalued at December 31, 2014. The change in the fair value of the derivative liability represents the change in the estimated fair value of the warrants from the estimated fair value at the beginning of the period. There were no warrants that were required to be recorded at fair value in 2013.
Full Year 2014 Operating Results
Revenue
Revenue increased by $845,608, or 111.2% in the year ended December 31, 2014 as compared to the year ended December 31, 2013. This increase was attributable to the increase in the sales of our C. diff test following an increase in the number of our customers.
Cost of Sales
Cost of sales increased $1,782,193, or 81.5%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013. The increase is attributable to the increased costs associated with manufacturing additional C. diff tests and the depreciation on additional analyzers needed to support the increase in customers. The gross loss decreased from (187.4)% for the year ended December 31, 2013 to (147.1)% for the year ended December 31, 2014.
Research and Development
Research and development expenses increased by $1,264,220, or 37.8%, for the year ended December 31, 2014 as compared to the year ended December 31 30, 2013 as we filed our 510(k) pre-market application for Group B Strep, began our Staph ID/R panel clinical trial and ramped up efforts to prepare additional diagnostic assay for clinical trials.
Selling and Marketing
Selling and marketing expenses decreased $317,291, or 12.1%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013 as we decreased our selling efforts in the first nine months of the year due to our lack of capital.
General and Administrative
General and administrative expenses increased $1,061,311, or 56.8%, for the year December 31, 2014 as compared to the year ended December 31, 2013 as we increased our business activities, raised additional capital, completed an initial public offering and began operations as a public company.
Interest Expense
Interest expense increased by $851,731, or 299.6%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013 due to an increase in interest incurred on our capital lease payments and our letters of credit associated with the analyzer sale-leaseback agreement and interest on our related party note payable.
Liquidity and Capital Resources
As of December 31, 2014, Great Basin had approximately $2.0 million in cash and cash equivalents on hand, as compared to $1.2 million as of December 31, 2013.
Change in Fair Value of Derivative Liability
The change in fair value of derivative liability resulted in an other expense of $8.4 million as a result of the change in the estimated fair value of certain warrants during the year ended December 31, 2014. These warrants contain an exercise price adjustment provision that requires them to be accounted for as a derivative liability. The warrants were granted during 2014 and revalued at December 31, 2014. The change in the fair value of the derivative liability represents the change in the estimated fair value of the warrants from the estimated fair value at their grant date. There were no warrants that were required to be recorded at fair value in 2013.
About Great Basin Scientific
Great Basin Scientific is a molecular diagnostics company that commercializes breakthrough chip-based technologies. The Company is dedicated to the development of simple, yet powerful, sample-to-result technology and products that provide fast, multiple-pathogen diagnoses of infectious diseases. The Company’s vision is to make molecular diagnostic testing so simple and cost-effective that every patient will be tested for every serious infection, reducing misdiagnoses and significantly limiting the spread of infectious disease. More information can be found on the company’s website at www.gbscience.com.
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