Q4FY2017 PR 8-K filed Exhibit 99.1

Exhibit 99.1

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

Condensed Consolidated Balance Sheets

(unaudited)



	December 31,
(in thousands, except par value)	2017		2016
Assets
Current assets
Cash and cash equivalents	$	16,507	$	16,765
Investments		46,365		55,213
Accounts receivable		13,433		11,421
Inventory		23,065		15,634
Prepaid expenses and other current assets		2,249		9,978
Total current assets		101,619		109,011
Property and equipment, net		37,920		14,560
Long-term restricted cash		4,500		4,500
Other long-term assets		45		9,813
Total assets	$	144,084	$	137,884
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	9,093	$	8,359
Accrued expenses		12,618		16,604
Deferred service revenue, current		6,319		7,130
Other liabilities, current		605		1,681
Total current liabilities		28,635		33,774
Deferred service revenue, non-current		1,075		1,297
Deferred rent, non-current		14,453		19
Other liabilities, non-current		—		1,664
Notes payable, non-current		13,635		16,106
Financing derivative		183		356
Total liabilities		57,981		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 116,277 and 92,677 shares at December 31, 2017 and 2016, respectively		116		93
Additional paid-in-capital		965,752		872,114
Accumulated other comprehensive income (loss)		(32)		5
Accumulated deficit		(879,733)		(787,544)
Total stockholders’ equity		86,103		84,668
Total liabilities and stockholders’ equity	$	144,084	$	137,884

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)



	Years ended December 31,
(in thousands, except per share amounts)	2017		2016		2015
Revenue:
Product revenue	$	80,030	$	64,609	$	37,502
Service and other revenue		13,438		13,971		10,896
Contractual revenue		—		12,134		44,384
Total revenue		93,468		90,714		92,782
Cost of Revenue:
Cost of product revenue		42,900		34,512		30,704
Cost of service and other revenue		15,909		12,042		8,628
Total cost of revenue		58,809		46,554		39,332
Gross profit		34,659		44,160		53,450
Operating Expense:
Research and development		65,324		67,617		60,440
Sales, general and administrative		59,119		47,787		45,187
Gain on lease amendments		—		—		(23,043)
Total operating expense		124,443		115,404		82,584
Operating loss		(89,784)		(71,244)		(29,134)
Interest expense		(2,921)		(3,234)		(2,926)
Other income (expense), net		516		103		364
Net loss		(92,189)		(74,375)		(31,696)
Other comprehensive loss:
Unrealized gain (loss) on investments		(37)		12		(16)
Comprehensive loss	$	(92,226)	$	(74,363)	$	(31,712)
Net loss per share:
Basic and diluted net loss per share	$	(0.87)	$	(0.83)	$	(0.42)
Shares used in computing basic and diluted net loss per share		105,682		89,148		75,614

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited)



	Years Ended December 31,
(in thousands)	2017		2016		2015
Cash flows from operating activities
Net loss	$	(92,189)	$	(74,375)	$	(31,696)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		8,442		3,875		3,677
Amortization of debt discount and financing costs		1,203		1,158		957
Stock-based compensation		20,352		19,562		13,840
Non-cash portion of gain on lease amendments		—		—		(3,043)
(Gain) Loss from derivative		653		(244)		(344)
Other items		47		97		114
Changes in assets and liabilities
Accounts receivable		(2,012)		(6,176)		(1,738)
Inventory		(8,442)		(6,151)		(2,466)
Prepaid expenses and other assets		7,803		(202)		(17,889)
Accounts payable		764		3,402		(716)
Accrued expenses		(3,986)		1,053		5,732
Deferred service revenue		(1,033)		469		708
Deferred contractual revenue		—		(12,134)		(14,386)
Other liabilities		880		1,737		(639)
Net cash used in operating activities		(67,518)		(67,929)		(47,889)
Cash flows from investing activities
Purchase of property and equipment		(10,433)		(8,207)		(3,009)
Proceeds from disposal of property and equipment		41		10		36
Long-term restricted cash		—		—		(4,500)
Purchase of investments		(86,339)		(95,848)		(84,579)
Sales of investments		7,111		23,285		8,317
Maturities of investments		88,071		65,896		92,341
Net cash provided by (used in) investing activities		(1,549)		(14,864)		8,606
Cash flows from financing activities
Proceeds from issuance of common stock from equity plans		8,914		7,729		7,363
Notes payable principal payoff		(4,500)		—		—
Proceeds from issuance of common stock from "at-the-market" offering, net of issuance costs		11,865		58,200		29,100
Proceeds from issuance of common stock from underwritten public equity offering, net of issuance costs		52,530		—		—
Net cash provided by financing activities		68,809		65,929		36,463
Net decrease in cash and cash equivalents		(258)		(16,864)		(2,820)
Cash and cash equivalents at beginning of period		16,765		33,629		36,449
Cash and cash equivalents at end of period	$	16,507	$	16,765	$	33,629

Supplemental disclosure of cash flow information
Interest paid	$	1,596	$	1,799	$	1,794

Supplemental disclosure of non-cash investing and financing activities
Inventory transferred to property and equipment		1,267		1,282		2,846
Property and equipment paid by landlord		12,600		-		-
Changes in deposits for property and equipment paid in prior period		9,694		-		-
Property and equipment returned to landlord		1,854		-		-