Pacific Biosciences of California (PACB) 8-K Results of Operations and Financial Condition

Exhibit 99.1

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

Condensed Consolidated Balance Sheets

(unaudited)

	March 31,		December 31,
(in thousands, except per share amounts)	2017		2016
Assets
Current assets
Cash and cash equivalents	$	28,982	$	16,765
Investments		27,068		55,213
Accounts receivable		10,441		11,421
Inventory		15,348		15,634
Prepaid expenses and other current assets		6,501		9,978
Total current assets		88,340		109,011
Property and equipment, net		42,449		14,560
Long-term restricted cash		4,500		4,500
Other long-term assets		219		9,813
Total assets	$	135,508	$	137,884
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	8,221	$	8,359
Accrued expenses		17,246		16,604
Deferred service revenue, current		6,683		7,130
Other liabilities, current		167		1,681
Notes payable, current		3,123		—
Total current liabilities		35,440		33,774
Deferred service revenue, non-current		1,484		1,297
Deferred rent, non-current		14,148		19
Other liabilities, non-current		1,741		1,664
Notes payable, non-current		13,302		16,106
Financing derivative		208		356
Total liabilities		66,323		53,216
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 93,540 and 92,677 shares at March 31, 2017 and December 31, 2016, respectively		94		93
Additional paid-in-capital		880,505		872,114
Accumulated other comprehensive income (loss)		(3)		5
Accumulated deficit		(811,411)		(787,544)
Total stockholders’ equity		69,185		84,668
Total liabilities and stockholders’ equity	$	135,508	$	137,884

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

	Three-Month Periods Ended March 31,
(in thousands, except per share amounts)	2017		2016
Revenue:
Product revenue	$	21,294	$	12,379
Service and other revenue		3,621		3,152
Contractual revenue		—		3,596
Total revenue		24,915		19,127
Cost of revenue:
Cost of product revenue		11,362		6,880
Cost of service and other revenue		4,616		2,743
Total cost of revenue		15,978		9,623
Gross profit		8,937		9,504
Operating expense:
Research and development		16,971		16,361
Sales, general and administrative		15,265		11,708
Total operating expense		32,236		28,069
Operating loss		(23,299)		(18,565)
Interest expense		(838)		(779)
Other income (expense), net		270		(8)
Net loss		(23,867)		(19,352)
Other comprehensive loss:
Unrealized gain on investments		(8)		48
Comprehensive loss	$	(23,875)	$	(19,304)
Net loss per share:
Basic and diluted net loss per share	$	(0.26)	$	(0.23)
Shares used in computing basic and diluted net loss per share		92,970		83,604

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited)

	Three-Month Periods Ended March 31,
(in thousands)	2017		2016
Cash flows from operating activities
Net loss	$	(23,867)	$	(19,352)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation		2,850		848
Amortization of debt discount and financing costs		319		268
Stock-based compensation		4,985		4,581
Other items		(145)		74
Changes in assets and liabilities
Accounts receivable		980		(2,865)
Inventory		366		(2,119)
Prepaid expenses and other assets		3,377		4,709
Accounts payable		(5,929)		(39)
Accrued expenses		562		(3,350)
Deferred service revenue		(260)		(705)
Deferred contractual revenue		—		(3,596)
Other liabilities		92		1,279
Net cash used in operating activities		(16,670)		(20,267)
Cash flows from investing activities
Purchase of property and equipment		(2,668)		(457)
Disposal of property and equipment		—		111
Purchase of investments		(10,419)		(43,383)
Sales of investments		3,662		4,949
Maturities of investments		34,905		15,539
Net cash provided by (used in) investing activities		25,480		(23,241)
Cash flows from financing activities
Proceeds from issuance of common stock from equity plans		3,407		3,423
Proceeds from issuance of common stock from at-the-market equity offering, net of issuance costs		—		26,536
Net cash provided by financing activities		3,407		29,959
Net decrease in cash and cash equivalents		12,217		(13,549)
Cash and cash equivalents at beginning of period		16,765		33,629
Cash and cash equivalents at end of period	$	28,982	$	20,080
Supplemental disclosure of non-cash investing and financing activities
Changes in unpaid property and equipment	$	5,791	$	24
Changes in deposits for property and equipment paid in prior period	$	9,694	$	—
Property and equipment paid by landlord	$	12,600		—