Great Basin Scientific

INCLUDEPICTURE "http://vvdb.irpage.net/wp-content/uploads/2011/01/logo-v2.png" \*

MERGEFORMATINET

Great Basin Scientific, Inc.

Second Quarter 2015 Business Update Call

August 12 2015 Great Basin Scientific, Inc. – Second Quarter 2015 Business Update, August 12, 2015

C O R P O R A T E P A R T I C I P A N T S

Bob Yedid, Investor Relations, ICR

Ryan Ashton, Chief Executive Officer and President

Jeffrey Rona, Chief Financial Officer

C O N F E R E N C E C A L L P A R T I C I P A N T S

Brian Marckx, Zacks Investment Research

Sam Bongiovanni, Newbridge Securities

P R E S E N T A T I O N

Operator:

Greetings and welcome to the Great Basin Scientific Business Update Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star, zero on your telephone keypad. As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Bob Yedid of ICR. Please go ahead, sir.

Bob Yedid:

Good afternoon and welcome to Great Basin Scientific's Q2 2015 Business Update Call. This is Bob Yedid of ICR Investor Relations.

Before we begin, I'd like to start with some cautionary statements. The following discussion regarding Great Basin Scientific contains forward-looking statements for the purposes of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, which forward-looking statements involve significant risks and uncertainties, including those discussed in this presentation and others that could be found in the Risk Factors section of Great Basin's most recent quarterly report on Form 10-Q and other SEC fillings.

All statements, other than statements of historical fact included in this presentation regarding our strategy, future operations, future financial position, product performance and acceptance, prospects, plans, and Management's objectives, as well as growth of the overall market for our products in general and certain products in particular, and the relative performance of other market participants are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievement to be materially different from those expressed or implied by the forward-looking statements. You should rely only on forward-looking statements as predictions of future events—excuse me—you should not rely on forward-looking 2 ViaVid has made considerable efforts to provide an accurate transcription, there may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only. 1-888-562-0262 1-604-929-1352 www.viavid.com Great Basin Scientific, Inc. – Second Quarter 2015 Business Update, August 12, 2015

statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date hereof, or to conform these statements to actual results or to changes in our expectations.

Please note that Great Basin has and will continue to hold periodic business update calls with Investors to review important operational and progress and initiatives, which we believe are more timely and informative in quarterly earnings calls. While this businesses update call coincides with our Q2 2015 results, we will not always hold business update calls following the release of our quarterly results. After brief remarks, we'll opening the call to a question-and-answer period.

At this time, it's my pleasure to turn the conference over to Ryan Ashton, Great Basin's Chief Executive Officer and President. Ryan?

Ryan Ashton:

Good afternoon and thank you for joining us on this business update call. We are pleased with the developments in our sales product pipeline and operations and we wanted to take the opportunity to update our current and potential Investors on our progress.

I'm going to highlight four key achievements we have made over the last few months.

First, we now have 122 customers and another 60 sites in either evaluation or scheduled to begin an evaluation in the coming weeks. With those 60 sites our total sales funnel now stands at 182, and we can reaffirm our guidance that we expect to have 170 to 180 customers by the end of this year.

Second, the customer take-up rate for our Group B Strep test which we launched in June continues to exceed our expectations with over 50 customer sites now either using the test, in evaluation to look at the test or scheduled for evaluation soon.

Third, our two clinical trials are progressing well and we can reaffirm our guidance that, subject to FDA review, we expect to end 2015 with four FDA-cleared tests in our product menu, up from the current two.

Fourth, with the proceeds of our March financing we have now procured all of the materials for 250 additional instruments and we delivered the first of those instruments on schedule in early July. As you can see, Great Basin continues to meet the targets we outlined to Investors at our IPO and our subsequent financing and in our regular communications. With the completion of our most recent financing in early March, we now have the financial resources to continue to execute against our business goals.

Starting with customer acquisition, let me give you a little more detail. We continue to see very strong demand for the Great Basin platform among small to medium hospitals and reference labs that make up our target market. We ended the second quarter having met our guidance of 115 revenue-generating customers which was an increase of 52% over the prior year. At quarter end there were also 49 sites either in evaluation or scheduled for evaluation as compared to 13 evaluations at the end of Q2 in 2014, representing a 73% increase. And, as of August 11, we had 122 customers and another 60 sites either in evaluation or scheduled for eval starts soon, for total customer funnel, as I said a few moments ago, of 180.

We believe our powerful product offering, which combines sample-to-result, ease-of-use, no cost instrumentation and low per test cost, continues to resonate deeply with the under 400-bed hospitals who have historically lacked the resources both capital and personnel to implement molecular testing. This despite the obvious power of molecular testing to improve standard of care of those hospitals and labs

3 ViaVid has made considerable efforts to provide an accurate transcription, there may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only. 1-888-562-0262 1-604-929-1352 www.viavid.com Great Basin Scientific, Inc. – Second Quarter 2015 Business Update, August 12, 2015

through a faster and more accurate result. In fact, as our test menu grows, we are seeing increased interest in switching to the Great Basin platform from these small to medium hospitals, of which there are approximately 4,000, and from smaller independent reference labs as well.

As promised, we also continue to expand our test menu. June 1st we launched our Group B Strep test in the United States. This is our second FDA-cleared test, and within one month we had secured more than 40 commitments to evaluate the test and already had two customers who had adopted the test and were reporting results using it. As of Tuesday, August 11, we now have secured 53 commitments to evaluate the test and we have eight Group B Strep customers. We're thrilled to have eight customers already buying the test and reporting results so soon. This is well ahead of our expectation for the timing of adoption given the requirement that each lab must perform a complete evaluation and validation of each new Great Basin test they bring on; a process that can typically last from one to three months for a test like Group B Strep. We will continue to update you on our Group B Strep take-up rates through at least the end of the third quarter, but please be aware that eventually we will stop providing detail around our product revenue mix and take-up rates as we believe this information is competitively sensitive.

Great Basin's R&D team continues to execute to our aggressive plan and we are excited about the promise and revenue potential of our upcoming product pipeline. As previously announced, we are running clinical trials for our Staph Blood Sepsis panel, our Staph ID/R, or Identification and Resistance, and for our test for Shiga toxin-producing E. coli. Those trials are on track. The tests are performing well and the data from those trials is meeting or exceeding our expectations for sensitivity and specificity. We anticipate we will file both 510(k) applications with the FDA before the end of the third quarter, and response from the FDA would be due within 90 days from submission, therefore we should see response from the FDA before the end of 2015.

Now, the final point was to talk about analyzer manufacturing, and its impact on both our R&D efforts and our sales funnel. With the proceeds of our follow-on offering in March, we announced that we would be able to manufacture approximately 250 additional analyzers, in addition to the 150 analyzers we manufacture with the proceeds from our IPO in October. Lead times for some of these instrument materials are quite long and we anticipate that the first of these 250 instruments would roll off the manufacturing line in early July and that their numbers would steadily build until we had delivered the final instrument in early November. As I mentioned earlier, all materials for this (inaudible) have been received and we have met our initial delivery schedule for these instruments and expect we will deliver all the instruments by early November, as committed.

With the availability of these additional analyzers, we made the decision to allocate many of the instruments produced in July and August to our R&D team, doubling our fleet of instruments available for clinical trials and product development. We believe this strategic decision was an important investment for the near and long-term success of the Company since it allows us to expand—to increase the number of new tests in development and accelerate the speed of clinical testing. By expanding our test menu we enhance the attractiveness of Great Basin's system for new and existing customers and significantly increase the potential recurring revenue per customer, a key measure of our success. The expansion of our menu and the added potential revenue per customer represents—it represents is at the core of our business strategy for 2015 and 2016.

The majority of the analyzers, however, are being allocated to our Sales team for securing new customers, and to date, every new instrument produced and allocated to sales has been placed at an evaluation site. As I mentioned earlier in this call, we now have 60 sites either currently in evaluation or scheduled to receive analyzers and begin an evaluation as soon as one is available. We have historically reported very high win rates for our evaluations and we continue to believe that the number of sites we have in evaluation is a significant indication of our future growth and the business' strength.

Based on our current group of revenue-generating customers, and the lab sites in evaluation, and with the increase in analyzers we are manufacturing during the second half of 2015, as I mentioned earlier, we reaffirm our guidance that we expect to end the calendar year with approximately 170 to 180 customers,

and another 50 to 60 sites in evaluation or scheduled for evaluation. With the instruments already manufactured or for which we have already procured materials, we now have adequate instruments to reach 250 customers, a target we expect to achieve in the first half of next year.

As we've mentioned before, historically, our average revenue per customer for our C. diff test has been approximately $20,000 per year. With the four tests we expect in our menu by end of year, we now expect potential revenue per customer will triple to just under $60,000 per year. Now we don't expect every customer to adopt every test in our menu, but we do anticipate a substantial increase in revenue per customer as these tests receive FDA clearance and our customers begin to adopt them. The increase in customers over the coming months, combined with the increase in potential revenue per customer, give us great optimism for the coming year.

With that, I would like to turn the call over to Jeffrey Rona, Executive Vice President and Chief Financial Officer, to provide additional detail on Great Basin's financial performance. Jeff?

Jeffrey Rona:

Thank you Ryan. Welcome everybody to our business update conference call. Our total revenue for the quarter ended June 30, 2015 was approximately $525,000 versus approximately $402,000 for the same period in 2014, an increase of over 30%. This increase was due to growth in the customer base from 75 in the second quarter of 2014 to 115 at the end of the second quarter in 2015, as Ryan has previously mentioned.

Also, as indicated in today's earnings release, our operating expenses increased in R&D, sales and marketing and G&A as we expanded our research and selling efforts and experienced higher cost due to our increased business activities, as well as costs related to operating now as a public company. The resulting loss from operations was $4.9 million for the second quarter 2015 as compared to $2.9 million for the same period in 2014.

Net income in the fourth quarter—I'm sorry—in the second quarter of 2015 was $19.2 million compared to a net loss of $3.2 million for the same period in 2014. During the second quarter of 2015, a change in the fair value of the derivative liability related to various common stock warrants generated non-cash other income of $24.3 million. Excluding the derivative liability of other income, adjusted net loss for the second quarter 2015 was $5.1 million. There was no derivative liability in the same period in 2014.

As outlined in our 10-Q, Great Basin received net cash proceeds during the second quarter of 2015 of $2.8 million from warrant exercises of approximately 1 million Series A warrant exercises and 384,000 Series C warrant exercises.

Moving to our balance sheet. Great Basin's balance sheet is solid, as a result of the important financing completed in March of this year which raised $21.9 million in net proceeds for the Company. As of June 30, 2015 we had $15.3 million in cash as compared to the balance sheet of March 31, 2015 our cash position decreased by $5.3 million. In addition to the operating expense for the quarter, this decrease was due in part to our investment in new capital equipment and new analyzer components of $2.3 million, a decrease in working capital of $0.5 million and a reduction in our debt of $0.5 million.

With that, I'd like to turn the call back to Ryan Ashton for some closing remarks before a question-and- answer session. Ryan?

Ryan Ashton:

Thank you. So, we're really pleased with our progress to date and based on our improved cash position very encouraged about the opportunities ahead. We hope you are as well.

That's the extent of our prepared remarks. Jeff and I are happy to answer your questions now. Operator, will you please open the line for questions?

Operator:

Certainly. At this time we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star, one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star, two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, if you'd like to ask a question today, please press star, one at this time. One moment, please, while we poll for questions.

Our first question today is coming from Brian Marckx with Zacks Investment Research. Please proceed with your question.

Brian Marckx:

Hi guys. I was wondering if you can talk about the adoption process and the decision-making that's involved with a typical customer, so in terms of length of time, how long a typical customer might take to make a decision about whether they want to use your instrument or another instrument? What are kind of the main factors in determining whether they'll go with your instrument or a competitors' instrument or just kind of stick with what they have now?

Ryan Ashton:

So I think you're talking about new customer adoption, so a customer is not—was not previously a Great Basin customer. The timing of that typically our eval cycle runs between 45, say and 75 days. Median is probably about 50 days. We've had sites close as quickly. In fact two weeks ago we had a site close in a day. They—we brought the machines in, we did their validation and then a day later they were a customer. So the process typically is fairly straightforward. They run a validation, they run site-by-site comparison of their current method versus the Great Basin method, at the end of that they look at the data, they look at the user experience and then they make a decision about what to do. Factors that affect their decision are generally speaking—honestly by the time a site has decided to go into evaluation they've already decided they want to switch to Great Basin, and now they're just confirming that that decision was a good now. So the factors that go into their decision really are if they are presently molecular they're looking for either a lower cost solution or one that's easier to use. Typically it's mostly that they're looking for something easier to use than a complex, labor-intensive molecular process, and if they are not previously molecular they're looking to switch to get a better, faster results.

Did that answer your question?

Brian Marckx:

It does. Thank you Ryan. So in terms of operating expenses R&D was up quite a bit, and I understand some of that's with the new tests that are about to come to market, but if you can kind of help us with what we should expect in terms of R&D and G&A going forward with the—I think you've got another three tests that may come to market here in the next say 12 months or less, if you can kind of guide us with what we should expect in terms of R&D and G&A for at least for the rest of 2015?

Jeffrey Rona:

So, Brian, it's Jeff Rona. So, we're not giving out guidance at this point. I think I want to make a couple of points, they'll just help you understand the differences. If you think about where we were six months—I'm sorry—12 months ago, so in the second quarter of 2014, the Company was private and was working towards an IPO but had limited cash resources. So the comparison between the two periods you could

expect that now that we've solidified the balance sheet we would increase our efforts pretty significantly in order to deliver on the targets that we've set. So, I think what you've probably seen is, you know, the biggest change if you will in terms of us getting R&D to where it needs to be so that we can run these trials and getting G&A to the point at which it needs to be and frankly sales and marketing to the point in which we could support our current business operation. So I think that's the extent of the kind of the guidance that we're giving at this point.

Brian Marckx:

Okay, yes, understood. Year-over-year that there would be a big change. I'm looking from Q1 to Q2 it was about $400,000 difference from Q1 in R&D and say $200,000 difference in G&A. So—and I can understand your reasons for not wanting to give guidance but can we I guess expect that these levels will at least persist through the end of the year?

Jeffrey Rona:

So, when you look at the quarter-over-quarter increase, again the second quarter—in the first quarter we really didn't—we're not in a very strong capital position until the beginning of March. So I would expect that the increase in activity that you saw will continue in terms of it being at similar levels.

Brian Marckx:

Okay, great. One more on the direct sales force that you have now. I think you were at about, if I remember right, five reps, and maybe I'm thinking of another company it's been a long day, but if you can just talk about that and what your plans are in terms of scaling up the sales force?

Ryan Ashton:

So as of today we have a total of eight Sales Representatives, four field reps and four inside, and we expect to end the year probably somewhere closer to—depending on how things are going somewhere between 10 and 12.

Brian Marckx:

Okay. All right. Clearly I was thinking of somebody else. Thanks a lot guys, that's all I had.

Ryan Ashton:

Mm-hmm.

Jeffrey Rona:

Operator:

Thank you. As a reminder, if you'd like to be placed in the question queue, please press star, one at this time.

Our next question is coming from Sam Bongiovanni from Newbridge Securities. Please proceed with your question.

Sam Bongiovanni:

Hey guys. I just had a question on as far as the new test data going to be expected to be submitted to the FDA. Now that timeline would be in the next two to three months, is that correct?

Ryan Ashton:

Correct, it'll be before the end of this quarter.

Sam Bongiovanni:

Okay, and so we're expecting some sort of FDA approval on those two tests before December 2015, hopefully?

Ryan Ashton:

That's correct. If the process goes well post-submission with the FDA we should see both clearances by the end of the year.

Sam Bongiovanni:

Can you give us any update—I know that you guys got a really a good award to go ahead with that new test development. Can you give you guys give us any update on how that's going?

Ryan Ashton:

That project is in fairly early stage right now. It's a research project that I think is expected to last—I don't even know—it's a four year project and grant. So it's—there's not a lot that really I think can update on it.

Sam Bongiovanni:

Okay, thank you.

Ryan Ashton:

We're really thrilled about the grant, by the way. I mean it's going to be a really cool product.

Sam Bongiovanni:

Right. Would you consider—is that—if that, you know, works out the way you're expecting it to be somewhat of a game changer, I mean could that be an actual game changer, I mean to have that test roll- out?

Ryan Ashton:

You know, that's a hard question to answer because it's—I don't know enough about the market yet. Because it's an early research project we haven't really looked at the specific market. We do know that that particular bacteria is a problem, it creates an enormous hospital-acquired infection problem that hospitals are really struggling with. A good test for that bacteria will be valuable to those hospitals, is probably the best way I can put it.

Sam Bongiovanni:

Okay, thank you.

Operator:

Thank you. We have reached the end of our question-and-answer session. I'd like to turn the floor back over to Management for any further closing comments.

Ryan Ashton:

We really have no other comments today. Thank you for your time and your questions. We'll speak to you again soon.

Operator:

Thank you. That does conclude today's teleconference. You may now disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.

9 ViaVid has made considerable efforts to provide an accurate transcription, there may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only. 1-888-562-0262 1-604-929-1352 www.viavid.com