Annidis Corporation Reports 2011 Second Quarter Results
OTTAWA, Aug. 31, 2011 /CNW/ - Annidis Corporation (TSXV:RHA), creator of the Annidis RHA™ imaging technology that assists eye-care professionals screen, detect, diagnose and manage ocular diseases including glaucoma, age related macular degeneration and diabetic retinopathy, today announced its 2011 second quarter financial results for the three and six month periods ended June 30, 2011.
Highlights
- Received FDA clearance for the RHA™ medical device
- Recruited Mr. Kevin McNaught to the position of Vice President, U.S. Sales
- Completed a Qualifying Transaction ("QT") as a Capital Pool Company on June 9, 2011, concurrent with a private placement of 6,674,000 units for gross proceeds of $3,337,000
"With the recent announcement that our RHA™ medical device has received FDA clearance, we now have the ability to build upon our existing Canadian presence and market RHA™ across North America," said Gerald Slemko, Chief Executive Officer of Annidis. "In order to execute on this sales strategy we have strengthened our balance sheet to fund its commercial roll-out and strengthened our team with the addition of Mr. Kevin McNaught to lead our U.S. sales initiatives."
Financial Highlights
The Company recorded contract revenues earned from the deployment of medical devices for the three and six months ended June 30, 2011, of $48,000 and $81,000, compared to $11,000 and $17,000 for the same periods in 2010. The increase in recorded revenue is attributable to the increase in the number of revenue generating medical devices deployed in clinics in the latter half of 2010 and during 2011.
Total general, administrative and operation expenses for the three months and six months ended June 30, 2011, were $309,000 and $583,000, compared to $293,000 and $480,000 for the corresponding periods in 2010. This increase is largely attributed to increased staff and higher salary costs.
Gross research and development expenses for the three months and six months ended June 30, 2011, were $333,000 and $619,514, compared with $349,000 and $563,487 in 2010. The increase is primarily due to increased salary costs and additional personnel. The reported 2011 amounts for the three and six months of $182,000 and $363,000 are net of investment tax credits of $151,000 and funding from government programs.
Net loss was $2,834,000 or loss of $0.05 per share and loss of $3,730,000 or loss of $0.08 per share, for the three-month and six-month periods ended June 30, 2011, compared with the loss of $629,000 or loss of $0.01 per share and loss of $976,000 or loss of $0.02 per share for the corresponding periods in 2010. The increase in reported loss is primarily attributed to the listing expense associated with the Qualifying Transaction of $1,589,000, financing transaction expenses, increased spending in general, administration & operations and sales & marketing.
During the three months and six months ended June 30, 2011, the Company used cash of $1,194,000 and $1,762,000 for operating activities as compared to $978,000 and $1,245,000 for the corresponding periods of 2010. The increase in cash consumption for the six months ended June 30, 2011, was driven by net losses of $3,730,000 offset by non-cash items of listing expenses, stock-based compensation, interest and financing expenses and amortization.
As at June 30, 2011, the Company had cash on hand of $1,913,000 compared to $22,000 as at December 31, 2010, an increase of $1,890,000 due to the proceeds of $3,337,000 from the issuance of share and warrant units on the private placement and proceeds of $1,009,000 on the exercise of warrants offset operating losses, $410,000 on the repayment of promissory notes and convertible debenture and share issuance costs of $451,000.
Total current liabilities and long term liabilities were $4,016,000 at June 30, 2011, compared to $5,990,000 at December 31, 2010.
As at June 30, 2011, the Company's working capital was $145,000 compared to a working capital deficiency of $2,353,000 as at December 31, 2010. This increase in working capital is attributed to the proceeds of $4,346,000 from the issuance of share and warrant units, offset by the reduction of $1,728,000 in promissory notes through conversion into equity, $744,000 in long-term convertible promissory notes and $410,000 in repayments.
Annidis Retains Equicom Group for Investor Relations Services
Annidis has announced that it has retained The Equicom Group Inc. ("Equicom") to provide strategic investor relations and financial communications services.
Under the terms of the agreement, Annidis will pay Equicom a monthly retainer fee of $6,000 for select strategic communications services. The initial contract term is 12 months and commences immediately.
Neither Equicom nor any of its principals have an ownership interest, directly or indirectly, in Annidis or its securities, and Annidis has not granted Equicom or its principals any right to acquire any such interests.
Equicom is a wholly-owned subsidiary of TMX Group Inc, and provides strategic communications services to approximately 100 public companies across a diverse range of industries from its offices in Toronto, Calgary and San Diego.
About Annidis Health Systems Corporation
Annidis was founded in 2007 and is dedicated to researching and developing instrumentation to assist in the early detection and monitoring of diseases of the eye. The RHA2020-U is the result of a multiyear research and development effort by the Annidis team in collaboration with leading eye care professionals and researchers in Canada including the Ottawa Eye Institute, Toronto Western Hospital, the School of Optometry in Montreal and numerous optometric clinics in Ontario.
In June, 2011, Annidis became a publicly traded Canadian company on TSX-V and trades under the symbol RHA.
Disclaimer
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
ANNIDIS CORPORATION | ||||||
Condensed Consolidated Statements of Financial Position | ||||||
As at June 30, 2011, December 31, 2010 and January 1, 2010 | ||||||
[Unaudited] | ||||||
June 30 | December 31 | January 1 | ||||
2011 | 2010 | 2010 | ||||
ASSETS | ||||||
Current | ||||||
Cash | $ 1,912,606 | $ 22,248 | $ 192,630 | |||
Restricted short-term investments | 40,000 | 40,000 | 40,000 | |||
Accounts receivable | 164,401 | 60,799 | 22,113 | |||
Government assistance receivable | - | - | 117,868 | |||
Investment tax credits receivable | 601,673 | 878,203 | 400,000 | |||
Inventories | 691,590 | 467,194 | - | |||
Prepaid expenses | 7,199 | - | 13,943 | |||
Deferred financing charges | - | 15,399 | - | |||
Total current assets | 3,417,469 | 1,483,843 | 786,554 | |||
Property and equipment, net | 501,660 | 331,888 | 45,819 | |||
Intangible assets, net | 8,356 | 27,389 | 48,596 | |||
$ 3,927,485 | $ 1,843,120 | $ 880,969 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Current | ||||||
Accounts payable and accrued liabilities | $ 348,259 | $ 468,270 | $ 269,975 | |||
Promissory notes payable | 325,532 | 3,072,202 | 301,182 | |||
Deferred government assistance | - | - | 12,499 | |||
Due to related parties | 364,392 | 296,636 | 148,197 | |||
Convertible debentures | 2,234,554 | - | - | |||
Total current liabilities | 3,272,737 | 3,837,108 | 731,853 | |||
Convertible debentures | - | 2,152,788 | 2,007,344 | |||
Convertible promissory notes | 743,745 | - | - | |||
4,016,482 | 5,989,896 | 2,739,197 | ||||
Shareholders' deficit | ||||||
Share capital | 10,514,179 | 3,209,921 | 3,209,921 | |||
Warrants | 401,180 | 371,214 | 436,450 | |||
Contributed surplus | 833,700 | 380,538 | 243,007 | |||
Deficit | (11,838,056) | (8,108,449) | (5,747,606) | |||
Total shareholders' deficit | (88,997) | (4,146,776) | (1,858,228) | |||
$ 3,927,485 | $ 1,843,120 | $ 880,969 |
ANNIDIS CORPORATION | ||||||
Condensed Consolidated Statements of Operations and Comprehensive Loss | ||||||
For the three and six month periods ended June 30, 2011 and 2010 | ||||||
[Unaudited] | ||||||
Three months | Six months | |||||
June 30 | June 30 | June 30 | June 30 | |||
2011 | 2010 | 2011 | 2010 | |||
Revenues | ||||||
Contract revenues | $ 48,109 | $ 10,590 | $ 80,702 | $ 17,000 | ||
Interest and other income | 938 | 94 | 1,642 | 94 | ||
49,047 | 10,684 | 82,344 | 17,094 | |||
Operating Costs and Expenses | ||||||
Research and development | 181,620 | 117,879 | 362,489 | 138,986 | ||
General, administrative and operations | 309,139 | 293,095 | 583,108 | 479,709 | ||
Sales and marketing | 264,661 | 126,121 | 456,398 | 200,129 | ||
Amortization of property and equipment | 33,229 | 6,627 | 60,511 | 13,436 | ||
Amortization of intangible assets | 5,301 | 5,301 | 10,603 | 10,603 | ||
793,950 | 549,023 | 1,473,109 | 842,863 | |||
Loss from Operations | (744,903) | (538,339) | (1,390,765) | (825,769) | ||
Interest and financing charges | 79,052 | 56,901 | 162,847 | 80,637 | ||
Interest on convertible debentures | 33,676 | 23,520 | 57,196 | 44,520 | ||
Accretion on convertible debentures | 3,858 | - | 3,858 | - | ||
Financing transaction costs | 192,107 | - | 332,549 | - | ||
Stock-based compensation | 183,637 | 8,364 | 185,716 | 22,981 | ||
Foreign exchange loss (gain) | (558) | 1,722 | (518) | 1,720 | ||
Loss on licensing agreement | 8,441 | - | 8,441 | - | ||
Listing expense | 1,588,753 | - | 1,588,753 | - | ||
2,088,966 | 90,507 | 2,338,842 | 149,858 | |||
Net Loss and comprehensive loss for the period | $(2,833,869) | $(628,846) | $(3,729,607) | $ (975,627) | ||
Basic and diluted loss per share | $ (0.05) | $ (0.01) | $ (0.08) | $ (0.02) | ||
ANNIDIS CORPORATION | |||||
Condensed Consolidated Statements of Changes in Equity | |||||
For the six month periods ended June 30, 2011 and 2010 | |||||
[Unaudited] | |||||
Total | |||||
Share | Contributed | Shareholders' | |||
Capital | Warrants | Surplus | Deficit | Deficit | |
$ | $ | $ | $ | $ | |
Balance as at January 1, 2010 | 3,209,921 | 436,450 | 243,007 | (5,747,606) | (1,858,228) |
Value of warrants reclassified to contributed surplus on expiry | - | (60,759) | 60,759 | - | - |
Net loss and comprehensive loss for the period | - | - | - | (975,627) | (975,627) |
Share-based compensation expense | - | - | 22,981 | - | 22,981 |
Balance as at June 30, 2010 | 3,209,921 | 375,691 | 326,747 | (6,723,233) | (2,810,874) |
Balance as at January 1, 2011 | 3,209,921 | 371,214 | 380,538 | (8,108,449) | (4,146,776) |
Exercise of share purchase warrants | 1,216,883 | (207,803) | - | - | 1,009,080 |
Common shares issued on conversion of promissory notes and accrued interest | 1,728,468 | - | - | - | 1,728,468 |
Common shares and warrants issued pursuant to private placement | 3,206,523 | 130,477 | - | - | 3,337,000 |
Broker unit warrants issued in connection with private placement | - | 81,077 | - | - | 81,077 |
Share and warrant issuance costs | (512,599) | (19,089) | (531,688) | ||
Equity component of the conversion right on the promissory note | - | - | 267,446 | - | 267,446 |
Net loss and comprehensive loss for the period | - | - | - | (3,729,607) | (3,729,607) |
Share-based compensation expense | - | - | 185,716 | - | 185,716 |
Fair value assigned to the shares on reverse takeover transaction | 1,664,983 | - | - | - | 1,664,983 |
Fair value assigned to the warrants on reverse takeover transaction | - | 45,304 | - | - | 45,304 |
Balance as at June 30, 2011 | 10,514,179 | 401,180 | 833,700 | (11,838,056) | (88,997) |
ANNIDIS CORPORATION | ||||||
Condensed Consolidated Statements of Changes of Cash Flows | ||||||
For the three and six month periods ended June 30, 2011 and 2010 | ||||||
[Unaudited] | ||||||
Three months | Six months | |||||
June 30 | June 30 | June 30 | June 30 | |||
2011 | 2010 | 2011 | 2010 | |||
OPERATING ACTIVITIES | ||||||
Net loss for the period | $(2,833,869) | $ (628,846) | $(3,729,607) | $ (975,627) | ||
Add items not involving cash | ||||||
Non-cash interest and financing expense | 48,311 | 29,592 | 125,189 | 40,573 | ||
Listing expense | 1,579,915 | - | 1,579,915 | - | ||
Interest on convertible debentures and notes | 33,676 | 23,520 | 57,196 | 44,520 | ||
Loss on licensing agreement | 8,441 | - | 8,441 | - | ||
Stock-based compensation | 183,637 | 8,364 | 185,716 | 22,981 | ||
Amortization of property and equipment | 33,229 | 6,627 | 60,511 | 13,436 | ||
Amortization of intangible assets | 5,301 | 5,301 | 10,603 | 10,603 | ||
Amortization of debenture issue costs | 28,342 | 14,180 | 31,903 | 25,523 | ||
Accretion of convertible debenture | 3,858 | - | 3,858 | - | ||
(909,159) | (541,262) | (1,666,275) | (817,991) | |||
Changes in non-cash working capital items | (285,008) | (437,142) | (95,531) | (427,008) | ||
Cash used in operating activities | (1,194,167) | (978,404) | (1,761,806) | (1,244,999) | ||
INVESTING ACTIVITIES | ||||||
Acquisition of property and equipment | (186,288) | (15,979) | (230,283) | (19,891) | ||
Cash used in investing activities | (186,288) | (15,979) | (230,283) | (19,891) | ||
FINANCING ACTIVITIES | ||||||
Proceeds from warrants exercised | - | - | 1,009,080 | - | ||
Proceeds from the issuance of promissory notes | 300,000 | 1,100,000 | 300,000 | 1,500,000 | ||
Cash received on Aumento Capital Corporation | 130,371 | 130,371 | - | |||
Repayment of promissory notes | (150,000) | - | (410,000) | - | ||
Repayment of interest on promissory notes | (10,225) | - | (33,393) | - | ||
Proceeds from the issuance of share and warrant units | 3,337,000 | - | 3,337,000 | - | ||
Convertible debenture and share issuance costs | (412,448) | - | (450,611) | - | ||
Cash provided by financing activities | 3,194,698 | 1,100,000 | 3,882,447 | 1,500,000 | ||
Net increase in cash during the period | 1,814,243 | 105,617 | 1,890,358 | 235,110 | ||
Cash, beginning of period | 98,363 | 322,123 | 22,248 | 192,630 | ||
Cash, end of period | $ 1,912,606 | $ 427,740 | $ 1,912,606 | $ 427,740 |