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Rosetta Genomics Reports Second Quarter 2010 Financial Results

Use of Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures. A “non-GAAP financial measure” refers to a numerical measure of historical or future financial performance, financial position, or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the financial statements. In this release, Rosetta provides non-GAAP net loss and non-GAAP net loss per share data as additional information relating to its operating results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net loss or net loss per share prepared in accordance with GAAP.

Pursuant to the requirements of Regulation G promulgated by the SEC, the Company has provided a reconciliation of each non-GAAP financial measure used in this earnings release and related conference call or webcast to the most directly comparable financial measure prepared in accordance with GAAP. This reconciliation is presented in a table below under the heading “Reconciliation of GAAP to Non-GAAP Consolidated Statement of Operation.” Investors are encouraged to review these reconciliations to ensure they have a thorough understanding of the reported non-GAAP financial measures and their most directly comparable GAAP financial measures.

Management uses these non-GAAP measures for internal reporting and forecasting purposes. The Company has provided these non-GAAP financial measures in addition to GAAP financial results because it believes that these non-GAAP financial measures provide useful information to certain investors and financial analysts for comparison across accounting periods not influenced by certain non-cash items that are not used by management when evaluating the Company's historical and prospective financial performance.

[Tables to follow]

       
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
 

June 30,

December 31,

2010     2009 2009
Unaudited
ASSETS
 
CURRENT ASSETS:
Cash and cash equivalents $ 2,903 $ 5,984 $ 3,329
Restricted cash 993 1,178 1,076
Short-term bank deposits 1,144 8,326 3,143
Marketable securities 2,649 1,194 2,756
Trade receivables, net 131 31 72
Other accounts receivable and prepaid expenses 551 736 557
 

Total current assets

8,371 17,449 10,933
 
SEVERANCE PAY FUND 103 75 92
PROPERTY AND EQUIPMENT, NET 1,376 1,275 1,216
LONG-TERM ACCOUNTS RECEIVABLES 260 606 502
 

Total long term assets

1,739 1,956 1,810
 

Total assets

$ 10,110 $ 19,405 $ 12,743
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
CURRENT LIABILITIES:
Short-term bank loan, current maturities of capital lease and of long-term bank loan 108 94 125
Trade payables 849 983 654
Other accounts payable and accruals 1,495 1,390 1,526
 

Total current liabilities

2,452 2,467 2,305
 
LONG-TERM LIABILITIES:
Long-term bank loan and capital lease 2 70 46
Convertible loan - 1,500 1,500
Deferred revenue 1,928 1,928 1,928
Accrued severance pay 135 107 122
 

Total Long-term Liabilities

2,065 3,605 3,596
 
EQUITY:
Rosetta Genomics Shareholders equity:
Share capital: 39 32 32
Additional paid-in capital 74,485 67,295 68,174
Other comprehensive income 2 - 96
Deficit accumulated during the development stage (69,662 ) (53,994 ) (61,460 )
 

Total Rosetta Genomics shareholders’ equity

4,864 13,333 6,842
 

Non-controlling interest

729 - -
 

Total Equity

$ 5,593 $ 13,333 $ 6,842
 

Total liabilities and shareholders’ equity

$ 10,110 $ 19,405 $ 12,743
 
       

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands (except share and per share data)
 
Three months ended Six months ended
June 30, June 30,
  2010         2009   2010         2009
Unaudited Unaudited
 
Revenues $ 70 $ 14 $ 97 $ 31
Cost of revenues:   140     167   298     305
 
Gross loss   70     153   201     274
Operating expenses:
Research and development, net 1,941 1,432 3,561 3,117
Marketing and business development 1,569 1,435 2,745 2,299
General and administrative   854     749   1,583     1,499
 
Total operating expenses 4,364 3,616 7,889 6,915
 
Operating loss 4,434 3,769 8,090 7,189
Financial expenses(income) net   (9 )   30   (50 )   18
Net loss 4,425 3,799 8,040 7,207
Attributable to non controlling interest   (198 )   -   (219 )   -
Net loss attributable to Rosetta Genomics before discontinued operation 4,227 3,799 7,821 7,207
 
Net loss attributable to Rosetta Genomics from discontinued operation   381     1,621   381     1,832
 
Net loss attributable to Rosetta Genomics after discontinued operation $ 4,608   $ 5,420 $ 8,202   $ 9,039
Basic and diluted net loss per Ordinary share of continuing operation attributable to Rosetta Genomics' shareholders $ 0.25   $ 0.28 $ 0.48   $ 0.56
Basic and diluted net loss per Ordinary share of discontinuing operation attributable to Rosetta Genomics' shareholders $ 0.02   $ 0.12 $ 0.02   $ 0.14
Basic and diluted net loss per Ordinary share attributable to Rosetta Genomics' shareholders $ 0.27   $ 0.40 $ 0.50   $ 0.70
 
Weighted average number of Ordinary shares used to computed basic and diluted net loss per Ordinary share   16,778,127     13,581,036   16,508,281     12,880,557
 
 

RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENT OF OPERATION:

             
Six Months ended Three Months ended
June 30,     June 30,
2010     2009 2010       2009
 
GAAP net loss as reported $ 7,821   $ 7,207   $ 4,227  

 

$ 3,799  
NON-GAAP Adjustment:
Expenses reported for stock-based compensation
Cost of revenues (3 ) - (3 ) -
Research and development, net (302 ) (164 ) (234 ) (88 )
Marketing and business development (524 ) (162 ) (446 ) (60 )
General and administrative   (288 )   (219 )   (215 )   (120 )
Total Adjustment (1,117 ) (545 ) (898 ) (268 )
       
NON-GAAP net loss   6,704     6,662     3,329     3,531  
 
NON-GAAP Basic net loss (income) per Ordinary share $ 0.41   $ 0.52   $ 0.20   $ 0.26  
 




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