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Published: 2020-11-06 16:46:10 ET
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EX-99.1 2 oblnpressreleaseq32020.htm EXHIBIT 99.1 Exhibit



Obalon Announces Third Quarter 2020 Financial Results
SAN DIEGO, CA November 6, 2020 (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 third quarter ended September 30, 2020.
Financial results for the third quarter of 2020
Revenue for the third quarter of 2020 was $44,000, compared to $0.3 million for the third quarter of 2019, with the decrease primarily due to the suspension of operations in the second quarter of 2020. Net loss for the third quarter of 2020 was $1.6 million, compared to $3.7 million for the third quarter of 2019. Net loss per share for the third quarter of 2020 was $0.20, compared to $0.61 for the third quarter of 2019.
Cost of revenue was $41,000 for the third quarter of 2020, down from $0.4 million for the third quarter of 2019. Gross profit for the third quarter of 2020 was $3,000 compared to a gross deficit of $0.1 million for the third quarter of 2019.
Research and Development expense for the third quarter of 2020 totaled $0.3 million, down from $1.2 million for the third quarter of 2019. Selling, General and Administrative expense decreased to $1.3 million for the third quarter of 2020, compared to $2.5 million for the third quarter of 2019.
Operating loss for the third quarter of 2020 was $1.6 million, down from a loss of $3.7 million for the third quarter of 2019.
As of September 30, 2020, the Company had cash and cash equivalents of $5.5 million and $0.4 million of debt related to its Payroll Protection Program loan. The Company intends to continue exploring the potential for third-party reimbursement for the Obalon Balloon System, as well as exploring and evaluating financial alternatives to help meet its capital needs and strategic alternatives that might enhance stockholder value. There is no assurance that any financial or strategic alternative will be identified. If the Company is not able to raise additional capital to meet its needs or to identify a suitable strategic alternative, it will have to discontinue all operations and may be required to declare bankruptcy or dissolve.

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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.
Cautionary Statement Regarding Forward Looking Statements
This press release contains forward-looking statements that are not purely historical regarding Obalon’s or its management’s intentions, beliefs, expectations and strategies for the future, including those related to new products and their potential benefits. All forward-looking statements and reasons why results might differ included in this press release are made as of the date of this release, based on information currently available to Obalon, deal with future events, are subject to various risks and uncertainties, and actual results could differ materially from those anticipated in those forward looking statements. The risks and uncertainties that may cause actual results to differ materially from Obalon’s current expectations are more fully described in Obalon’s annual report on Form 10-K for the period ended December 31, 2019, periodic reports on Form 10-Q for the periods ended September 30, 2020, June 30, 2020 and March 31, 2020 and its other reports, each as filed with the Securities and Exchange Commission. Except as required by law, Obalon assumes no obligation to update any such forward-looking statement after the date of this report or to conform these forward-looking statements to actual results.


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

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2020
 
2019
 
2020
 
2019
 
 
 
 
 
 
 
 
 
 
Revenue
$
44

 
$
333

 
$
1,527

 
$
2,494

Cost of revenue
41

 
412

 
1,005

 
2,323

Gross profit (deficit)
3

 
(79
)
 
522

 
171

Operating expenses:
 

 
 

 
 

 
 
Research and development
271

 
1,174

 
2,293

 
5,401

Selling, general and administrative
1,291

 
2,489

 
7,546

 
13,025

Asset impairment and other charges
—

 
—

 
1,310

 
—

Total operating expenses
1,562

 
3,663

 
11,149

 
18,426

Loss from operations
(1,559
)
 
(3,742
)
 
(10,627
)
 
(18,255
)
Interest (expense) income, net
(1
)
 
37

 
29

 
(448
)
Other expense, net
—

 
(1
)
 
(411
)
 
(60
)
Net loss and comprehensive loss
$
(1,560
)
 
$
(3,706
)
 
$
(11,009
)
 
$
(18,763
)
Net loss per share, basic and diluted
$
(0.20
)
 
$
(0.61
)
 
$
(1.42
)
 
$
(5.07
)
Weighted-average common shares outstanding, basic and diluted
7,728,639

 
6,061,248

 
7,727,494

 
3,700,538





















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OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and par value data)
 
September 30, 2020
 
December 31, 2019
Assets
(unaudited)
 
 
Current assets:
 

 
 

Cash and cash equivalents
$
5,514

 
$
14,055

Accounts receivable, net
—

 
285

Inventory
—

 
1,936

Other current assets
3,517

 
1,959

Total current assets
9,031

 
18,235

Property and equipment, net
982

 
1,081

Lease right-of-use assets
646

 
1,077

Other long-term assets
1,303

 
—

Total assets
$
11,962

 
$
20,393

Liabilities and Stockholders’ Equity
 

 
 

Current liabilities:
 

 
 

Accounts payable
$
656

 
$
648

Accrued compensation
116

 
820

Deferred revenue
61

 
424

Other current liabilities
3,634

 
1,524

Current portion of lease liabilities
583

 
561

Total current liabilities
5,050

 
3,977

Lease liabilities, long-term
553

 
567

Long-term debt
430

 
—

Other long-term liabilities
7

 
—

Total long-term liabilities
990

 
567

Total liabilities
6,040

 
4,544

Commitments and contingencies
 
 
 
Stockholders’ equity:
 

 
 

Common stock, $0.001 par value; 100,000,000 shares authorized as of September 30, 2020 and December 31, 2019; 7,770,698 and 7,724,100 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively
8

 
8

Additional paid-in capital
189,353

 
188,271

Accumulated deficit
(183,439
)
 
(172,430
)
Total stockholders’ equity
5,922

 
15,849

Total liabilities and stockholders’ equity
$
11,962

 
$
20,393















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OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
 
Nine Months Ended September 30,
 
2020
 
2019
Operating activities:
 

 
 

Net loss
$
(11,009
)
 
$
(18,763
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
Depreciation
260

 
361

Stock-based compensation
1,021

 
2,300

Issuance of cash-settled options
7

 
—

Issuance of warrants for the purchase of common stock
45

 
—

Loss on disposal of fixed assets
—

 
128

Amortization of right-of-use assets
378

 
301

Accretion of investment discount, net
—

 
(2
)
Amortization of debt discount
—

 
70

Impairment of long-lived assets and other charges
1,257

 
—

Impairment of inventory
53

 
—

Change in operating assets and liabilities:
 
 
 
Accounts receivable, net
285

 
632

Inventory
(524
)
 
(117
)
Other long-term assets
(9
)
 
—

Other current assets
(1,389
)
 
1,604

Accounts payable
8

 
(724
)
Accrued compensation
(688
)
 
(3,097
)
Deferred revenue
(363
)
 
(69
)
Lease liabilities, net
(293
)
 
(248
)
Other current and long term liabilities
2,107

 
(363
)
Net cash used in operating activities
(8,854
)
 
(17,987
)
Investing activities:
 

 
 

Maturities of short-term investments
—

 
2,550

Purchase of property and equipment
(117
)
 
(44
)
Net cash (used in) provided by investing activities
(117
)
 
2,506

Financing activities:
 

 
 

Proceeds from long-term loan
430

 
10,000

Payment on long-term loan
—

 
(20,000
)
Proceeds from issuance of common and warrants, net of paid issuance costs
—

 
15,014

Proceeds from issuance of common stock, net of issuance costs
—

 
8,659

Proceeds from sale of common stock upon exercise of stock options
—

 
1

Net cash provided by financing activities
430

 
13,674

Net decrease in cash and cash equivalents
(8,541
)
 
(1,807
)
Cash and cash equivalents at beginning of period
14,055

 
21,187

Cash and cash equivalents at end of period
$
5,514

 
$
19,380

Supplemental cash flow information:
 

 
 

Interest paid
$
—

 
$
700

Unpaid issuance costs
$
—

 
$
295


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