 SAN DIEGO, July 30, 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 second quarter ended June 30, 2020. Financial results for the second quarter of 2020Revenue for the second quarter of 2020 was 0.7 million, compared to 0.4 million for the second quarter of 2019, primarily due to reversals of revenue reserves as a result of suspending business operations at the company-branded retail treatment centers. Net loss for the second quarter of 2020 was 4.2 million, compared to 6.8 million for the second quarter of 2019. Net loss per share for the second quarter of 2020 was 0.54, compared to 2.52 for the second quarter of 2019.Cost of revenue was 0.4 million for the second quarter of 2020, down from 0.7 million for the second quarter of 2019. Gross profit for the second quarter of 2020 was 0.3 million, compared to a gross deficit of 0.3 million for the second quarter of 2019.Research and Development expense for the second quarter of 2020 totaled 0.8 million, down from 1.8 million for the second quarter of 2019. Selling, General and Administrative expense decreased to 2.4 million for the second quarter of 2020, compared to 4.3 million for the second quarter of 2019.The Company recognized 1.3 million impairment expense and other charges related to its inventory and long-lived assets during the second quarter of 2020, as a result in the Companys shift in business strategy away from the retail treatment centers to reimbursement.Operating loss for the second quarter of 2020 was 4.2 million, down from a loss of 6.4 million for the second quarter of 2019.As of June 30, 2020, the Company had cash and cash equivalents of 6.8 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 strategic alternative in the best interest of stockholders, it will have to discontinue all operations and may be required to declare bankruptcy or dissolve.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 StatementsThis press release contains forward-looking statements that are not purely historical regarding Obalons or its managements 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 Obalons current expectations are more fully described in Obalons annual report on Form 10-K for the period ended December 31, 2019, periodic reports on Form 10-Q for the period ended 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.OBALON THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS unaudited in thousands, except shares and per share data Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Revenue703 386 1,483 2,161 Cost of revenue423 679 964 1,911 Gross profit deficit280 293 519 250 Operating expenses: Research and development765 1,788 2,022 4,227 Selling, general and administrative2,362 4,332 6,255 10,536 Asset impairment and other charges1,310 1,310 Total operating expenses4,437 6,120 9,587 14,763 Loss from operations4,157 6,413 9,068 14,513 Interest expense income, net5 295 30 485 Other expense, net26 59 411 59 Net loss and comprehensive loss4,188 6,767 9,449 15,057 Net loss per share, basic and diluted0.54 2.52 1.22 6.02 Weighted-average common shares outstanding, basic and diluted7,728,624 2,687,829 7,726,915 2,500,619 OBALON THERAPEUTICS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS in thousands, except shares and par value data June 30, 2020 December 31, 2019 Assetsunaudited Current assets: Cash and cash equivalents6,804 14,055 Accounts receivable, net 285 Inventory 1,936 Other current assets3,971 1,959 Total current assets10,775 18,235 Property and equipment, net1,055 1,081 Lease right-of-use assets748 1,077 Other long-term assets1,295 Total assets13,873 20,393 Liabilities and Stockholders Equity Current liabilities: Accounts payable1,054 648 Accrued compensation240 820 Deferred revenue123 424 Other current liabilities3,603 1,524 Current portion of lease liabilities579 561 Total current liabilities5,599 3,977 Lease liabilities long-term666 567 Long-term debt430 Total long-term liabilities1,096 567 Total liabilities6,695 4,544 Commitments and contingencies Stockholders equity: Common stock, 0.001 par value; 100,000,000 shares authorized as of June 30, 2020 and December 31, 2019; 7,731,633 and 7,724,100 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively8 8 Additional paid-in capital189,049 188,271 Accumulated deficit181,879 172,430 Total stockholders equity7,178 15,849 Total liabilities and stockholders equity13,873 20,393 OBALON THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS unaudited in thousands Six Months Ended June 30, 2020 2019 Operating activities: Net loss9,449 15,057 Adjustments to reconcile net loss to net cash used in operating activities: Depreciation187 256 Stock-based compensation762 1,641 Loss on disposal of fixed assets 95 Amortization of right-of-use assets239 186 Accretion of investment discount, net 2 Amortization of debt discount 70 Impairment of long-lived assets and other charges1,257 Impairment of inventory53 Change in operating assets and liabilities: Accounts receivable, net285 423 Inventory524 157 Other current assets1,845 1,760 Accounts payable405 191 Accrued compensation564 2,712 Deferred revenue302 32 Lease liabilities, net147 136 Other current and long term liabilities2,079 142 Net cash used in operating activities7,564 13,998 Investing activities: Maturities of short-term investments 2,550 Purchase of property and equipment117 20 Net cash used in provided by investing activities117 2,530 Financing activities: Proceeds from long-term loan430 10,000 Payment on long-term loan 15,000 Proceeds from issuance of common stock, net of issuance costs 8,793 Proceeds from sale of common stock upon exercise of stock options 1 Net cash provided by financing activities430 3,794 Net decrease in cash and cash equivalents7,251 7,674 Cash and cash equivalents at beginning of period14,055 21,187 Cash and cash equivalents at end of period6,804 13,513 Supplemental cash flow information: Interest paid 563 Unpaid issuance costs 377 CONTACT: For Obalon Therapeutics, Inc. Investor Contact: Andrew Rasdal President and Chief Executive Officer Obalon Therapeutics, Inc. Office: 1 844 362 2566 