Pacific Biosciences of California (PACB) 8-K Other Events

Exhibit 99.1

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

Consolidated Balance Sheets

(unaudited)

	December 31,
(in thousands, except per share amounts)	2016		2015
Assets
Current assets
Cash and cash equivalents	$	16,765	$	33,629
Investments		55,213		48,641
Accounts receivable		11,421		5,245
Inventory		15,634		10,955
Prepaid expenses and other current assets		9,978		12,071
Total current assets		109,011		110,541
Property and equipment, net		14,560		8,548
Long-term restricted cash		4,500		4,500
Other long-term assets		9,813		7,518
Total assets	$	137,884	$	131,107
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	8,359	$	4,749
Accrued expenses		16,604		15,551
Deferred service revenue, current		7,130		6,815
Deferred contractual revenue, current		—		10,822
Other liabilities, current		1,681		241
Total current liabilities		33,774		38,178
Deferred service revenue, non-current		1,297		1,143
Deferred contractual revenue, non-current		—		1,312
Other liabilities, non-current		1,683		1,386
Notes payable		16,106		14,948
Financing derivative		356		600
Total liabilities		53,216		57,567
Commitments and contingencies
Stockholders’ equity
Preferred Stock, $0.001 par value:
Authorized 50,000 shares; No shares issued or outstanding		—		—
Common Stock, $0.001 par value:
Authorized 1,000,000 shares; Issued and outstanding 92,677 and 79,983 shares at December 31, 2016 and 2015, respectively		93		80
Additional paid-in-capital		872,114		786,636
Accumulated other comprehensive income (loss)		5		(7)
Accumulated deficit		(787,544)		(713,169)
Total stockholders’ equity		84,668		73,540
Total liabilities and stockholders’ equity	$	137,884	$	131,107

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

	Years ended December 31,
(in thousands, except per share amounts)	2016		2015		2014
Revenue:
Product revenue	$	64,609	$	37,502	$	35,299
Service and other revenue		13,971		10,896		8,511
Contractual revenue		12,134		44,384		16,784
Total revenue		90,714		92,782		60,594
Cost of Revenue:
Cost of product revenue		34,512		30,704		29,626
Cost of service and other revenue		12,042		8,628		7,566
Total cost of revenue		46,554		39,332		37,192
Gross profit		44,160		53,450		23,402
Operating Expense:
Research and development		67,617		60,440		48,230
Sales, general and administrative		47,787		45,187		38,026
Gain on lease amendments		—		(23,043)		—
Total operating expense		115,404		82,584		86,256
Operating loss		(71,244)		(29,134)		(62,854)
Interest expense		(3,234)		(2,926)		(2,828)
Other income (expense), net		103		364		(478)
Net loss		(74,375)		(31,696)		(66,160)
Other comprehensive loss:
Unrealized gain (loss) on investments		12		(16)		(5)
Comprehensive loss	$	(74,363)	$	(31,712)	$	(66,165)
Net loss per share:
Basic and diluted net loss per share	$	(0.83)	$	(0.42)	$	(0.94)
Shares used in computing basic and diluted net loss per share		89,148		75,614		70,475

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

Consolidated Statements of Cash Flows

(unaudited)

	Years Ended December 31,
(in thousands)	2016		2015		2014
Cash flows from operating activities
Net loss	$	(74,375)	$	(31,696)	$	(66,160)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		3,875		3,677		4,221
Amortization of debt discount and financing costs		1,158		957		793
Stock-based compensation		19,562		13,840		9,943
Non-cash portion of gain on lease amendments		—		(3,043)		—
Other items		(147)		(230)		507
Changes in assets and liabilities
Accounts receivable		(6,176)		(1,738)		(660)
Inventory		(6,151)		(2,466)		(1,285)
Prepaid expenses and other assets		(202)		(17,889)		(224)
Accounts payable		3,402		(716)		3,891
Accrued expenses		1,053		5,732		3,536
Deferred service revenue		469		708		2,686
Deferred contractual revenue		(12,134)		(14,386)		(6,784)
Other liabilities		1,737		(639)		(1,932)
Net cash used in operating activities		(67,929)		(47,889)		(51,468)
Cash flows from investing activities
Purchase of property and equipment		(8,207)		(3,009)		(1,609)
Proceeds from disposal of property and equipment		10		36		—
Long-term restricted cash		—		(4,500)		—
Purchase of investments		(95,848)		(84,579)		(126,413)
Sales of investments		23,285		8,317		—
Maturities of investments		65,896		92,341		147,586
Net cash provided by (used in) investing activities		(14,864)		8,606		19,564
Cash flows from financing activities
Proceeds from issuance of common stock from equity plans		7,729		7,363		3,968
Proceeds from issuance of common stock from "at-the-market" offering, net of issuance costs		58,200		29,100		38,023
Net cash provided by financing activities		65,929		36,463		41,991
Net increase (decrease) in cash and cash equivalents		(16,864)		(2,820)		10,087
Cash and cash equivalents at beginning of period		33,629		36,449		26,362
Cash and cash equivalents at end of period	$	16,765	$	33,629	$	36,449
Supplemental disclosure of cash flow information
Interest paid	$	1,799	$	1,794	$	1,794
Supplemental disclosure of non-cash investing and financing activities
Inventory transferred to property and equipment		1,282		2,846		—