Apr 03, 2019 (Market Exclusive via COMTEX) — OBALON THERAPEUTICS, INC. OBLN, +0.00% Files An 8-K Results of Operations and Financial Condition
On April 2, 2019, Obalon Therapeutics, Inc. (the “Company”) issued a press release announcing an organizational restructuring. As part of that announcement, the Company noted that it expects the restructuring to reduce operating expenses in the second quarter of 2019 by approximately 35%, after estimated one-time charges of approximately $1.0 million, when compared to the first quarter of 2019. The Company expects to recognize the majority of these charges in the second quarter of 2019.
The Company also stated that it expects to end the first quarter of 2019 with approximately $24.7 million in cash and cash equivalents and total indebtedness of $20 million under its loan and security agreement. As previously disclosed, the terms of the loan and security agreement require the Company to maintain a cash balance in its accounts with the lender in an amount equal to or greater than the outstanding indebtedness.
The information furnished with Item 2.02 of this report is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Exchange Act or under the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing.
On April 2, 2019, the Company notified approximately 49 employees whose employment will be terminated, or approximately 50% of its workforce, with the intent to refocus activities, streamline operations and make more efficient use of cash. The Company estimates it will incur pre-tax cash charges of approximately $1.0 million for severance pay expenses