LabStyle Innovations Announces 2014 First Quarter Results and Highlights Recent Achievements and Milestones for the Remainder of the Year - WSFX - FOX Wilmington, NC

LabStyle Innovations Announces 2014 First Quarter Results and Highlights Recent Achievements and Milestones for the Remainder of the Year

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SOURCE LabStyle Innovations Corp.

Positive Results of the Dario™ Diabetes Management Solution Initial Global Market Launch

CAESAREA, Israel, May 15, 2014 /PRNewswire/ -- LabStyle Innovations Corp. (OTCQB: DRIO), developer of the Dario™ Diabetes Management Solution, reported today its financial and operational results for the three months period ending March 31, 2014.  The company also presented an overview of recent corporate achievements and anticipated milestones for the remainder of 2014.

During the first quarter and early second quarter of 2014, LabStyle achieved the following milestones:

  • Commenced first shipments of the Dario™ Diabetes Management Solution to distributors  in Italy, New Zealand and the United Kingdom, collecting initial positive feedback.
  • Received a Notice of Allowance from the U.S. Patent and Trademark Office for core patent claims covering the Dario™ Personalized Smart Meter, which works in tandem with the novel and powerful Dario™ software application to form the overall Dario™ Diabetes Management Solution.
  • Received national and regional insurance reimbursement approval for the Dario™ Personalized Smart Meter in Italy.  LabStyle is actively seeking reimbursement in  other strategic territories.
  • Worked with FDA towards potential clearance of the Dario™ Personalized Smart Meter in the U.S. following a 510K filing made in late December 2013.
  • Partnered with FatSecret, a leading global nutrition data source, to integrate such data into the Dario™ Diabetes Management Solution.
  • Raised $3.8 million in net proceeds from private placement which had its closing on February 2014.

As of March 31, 2014, LabStyle had approximately $3,812,000 in cash on hand.  The company forecasts such funds will be sufficient to continue its activities through October 2014. Nevertheless, to the extent required, management believes it could execute certain cost reduction measures which could enable the company to continue to operate for up to an additional three months.

LabStyle's business strategy and goals for the remainder of 2014 include:

  • Expedite production of Dario™ Personalized Smart Meters in selected jurisdictions with maximum optimization and efficiency.
  • Continue to enhance logistics and shipment process in order to ship and deliver Dario™ Personalized Smart Meters and test strips in a timely and productive manner.
  • Expand distributor network with purchase commitments in strategic markets.
  • Increase awareness of Dario™ and sales penetration in key target markets. 
  • Facilitate reimbursement in key target markets.
  • Continue to refine and enrich the cutting edge software component of the Dario™ Diabetes Management Solution.
  • Obtain 510K FDA clearance for the Dario™ personalized smart meter by the end of 2014.  
  • Establish an online sales strategy.
  • Augment LabStyle's intellectual property portfolio with additional potential patent approvals in the U.S. and globally.

"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 distributers in Italy, New Zealand and the United Kingdom and we already received positive feedback from both our distribution partners and end-users.  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 and focus resources for our ongoing commercialization efforts."

Summary of Financial Results

From its founding in August 2011 through March 31, 2014, LabStyle raised approximately $21 million through private placements, and to a small degree, through the exercise of investor warrants.  As company activities have increased, LabStyle believes it has deployed its resources during the company's pre-revenue stage in a much focused manner, to advance its business goals, particularly in the areas of research and development, manufacturing and personnel expansion that have brought the company to its initial product launch in March 2014. 

Presently, and 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.

Research and development expenses for the three months ended March 31, 2014 were approximately $1,089,000 compared with approximately $675,000 for the three months ended March 31, 2013 and approximately $1,743,000 for the three months ended December 31, 2013. The increase from the first quarter of 2013 was mainly due to recruitment of new employees in order to support the company's research and development activities during 2013 towards the initial launch of Dario™ on March 2014.  The decrease from the fourth quarter of 2013 was mainly due to decrease in regulatory (including CE Mark) and other product related subcontractor's expenses moving forward to the company's product launch and focusing on sales and marketing efforts.

Marketing and pre-production expenses were approximately $725,000 for the three months ended March 31, 2014 compared to approximately $497,000 for the three months ended March 31, 2013 and approximately $430,000 for the three months ended December 31, 2013. The increase from the first quarter of 2013 was mainly due to depreciation expenses derived from production equipment and the increase from the fourth quarter of 2013 was mainly due to increase in sales and marketing efforts going towards the initial product launch in March 2014.

General and administrative expenses for the three months ended March 31, 2014 were approximately $854,000 compared to approximately $1,904,000 for the three months ended March 31, 2013 and approximately $1,478,000 for the three months ended December 31, 2013. The decrease from the first quarter of 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 quarter of 2013 in the amount of approximately $1,078,000 and $392,000, respectively, compared to non-cash stock-based compensation expenses for the first quarter of 2014 of approximately $346,000. The decrease from the fourth quarter of 2013 was mainly due to a decrease in office expenses resulting from a move to new offices, a decrease in payroll expenses as well as decrease in other professional expenses.

Financing expenses for the three months ended March 31, 2014 were mainly driven by an approximately $142,000 non-cash gain related to the revaluation of warrants, compared with an approximately $2,136,000 non-cash loss in the three months ended March 31, 2013 as well as an approximately $448,000 non-cash loss driven by issuance costs related to warrants issued to investors and service providers during the first quarter of 2014.

Net loss for the three months ended March 31, 2014 was approximately $2,984,000, or $0.14 per share, compared with a net loss of approximately $5,227,000, or $0.35 per share, for the three months ended March 31, 2013.

The non-GAAP adjusted EBITDA loss for the three months ended March 31, 2014 was approximately $1,961,000, or $0.092 loss per share, compared with a non-GAAP adjusted EBITDA loss for the three months ended March 31, 2013 of approximately $1,247,000, or $0.084 loss per share. The non-GAAP adjusted EBITDA loss for the three months ended December 31, 2013 was approximately $2,770,000 thousand.

LabStyle used approximately $2,337,000 in cash to fund operating activities during the three months ended March 31, 2014 as compared to approximately $ 972,000 for three months ended March 31, 2013.  

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:


Unaudited

 

US Dollars in thousands
except stock and stock data


Three months ended March 31,


 

Three months ended
December 31,



2014


2013


2013








Net income (loss) as reported


$  (2,984)


$  (5,227)


$  54

Adjustments:







Depreciation


198


117


262

Revaluation of warrants


(142)


2,136


(3,698)

Other finance expenses


458


15


(7)








EBITDA


$   (2,470)


$  (2,959)


$  (3,389)








Stock-based compensation


509


1,320


620

Expenses related to 
               Issuance of common 
               stock and warrants to 
               service provider


-


392


-








Non-GAAP adjusted EBITDA


$   (1,961)


$    (1,247)


$         (2,769)

 

Weighted average number of 
     common stock used in 
     computing basic and diluted 
     net loss per share


21,274,831


14,808,563



 

Non-GAAP adjusted 
     EBITDA per stock


$         (0.092)


$        (0.084)










About LabStyle Innovations

LabStyle 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 Statements

This 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. 

 


LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARY
(A Development-Stage Company)


CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands






March 31,


December 31,





2014


2013





Unaudited










ASSETS














CURRENT ASSETS:







Cash and cash equivalents




$          3,812


$         2,263

Restricted cash




-


38

Short-term bank deposit




193


154

Other current assets




615


475








Total current assets




4,620


2,930








LEASE DEPOSIT




41


41








PROPERTY AND EQUIPMENT, NET




1,066


1,145








Total assets




$          5,727


$         4,116










 


LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARY
(A Development-Stage Company)


CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands (except stock and stock data)




March 31,


December 31,



2014


2013



Unaudited








LIABILITIES AND STOCKHOLDERS' DEFICIENCY










CURRENT LIABILITIES:





Trade payables


$            539


$            586

Other accounts payable and accrued expenses


678


920






Total current liabilities


1,217


1,506






LIABILITY RELATED TO WARRANTS


5,775


2,696











COMMITMENTS AND CONTINGENT LIABILITIES










STOCKHOLDERS' DEFICIENCY





Common Stock of $0.0001 par value -

Authorized: 45,000,000 shares at March 31, 2014 and 
          December 31, 2013; Issued and Outstanding: 22,879,368 
          (unaudited) and 20,071,816 shares at March 31, 2014 and 
          December 31, 2013, respectively


2


2

Preferred Stock of $0.0001 par value -

Authorized: 5,000,000 shares at March 31, 2014 and 
          December 31, 2013; Issued and Outstanding: None at 
          March 31, 2014 and December 31, 2013


-


-

Additional paid-in capital


21,720


19,915

Deficit accumulated during the development stage


(22,987)


(20,003)






Total stockholders' deficiency


(1,265)


(86)






Total liabilities and stockholders' deficiency


$         5,727


$       4,116

 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARY
(A Development-Stage Company)


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

U.S. dollars in thousands (except stock and stock data)








Three months ended

March 31,


Period from
August 11, 2011
(inception date)
to March 31
,



2014


2013


2014



Unaudited










Operating expenses:







Research and development


$           1,089


$              675


$          7,581

Marketing and pre-production costs


725


497


3,375

General and administrative


854


1,904


9,483








Operating loss


2,668


3,076


20,439








Revaluation of warrants


(142)


2,136


1,742

Other financial expense


458


15


806








Financial expenses, net


316


2,151


2,548








Net loss


$           2,984


$           5,227


$         22,987








Net loss per share














Basic loss per share


$         (0.14)


$         (0.35)



Weighted average number of 
     common stock used in computing 
     basic net loss per share


21,274,831


14,808,563










Diluted loss per share


$         (0.14)


$             (0.35)



Weighted average number of 
     common stock used in computing 
     diluted net loss per share


21,418,439


14,808,563



 

 

Contacts:





Press




Investor Relations






Brenda Zeitlin

LabStyle Innovations




Book and Company Inc.

1 212 490 9095

1 800 896 9062




admin@bookeandco.com

Brenda@mydario.com





 

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