Exhibit 99.1
News release via Canada NewsWire, Toronto 416-863-9350
Attention Business/Financial Editors:
PreMD Inc. Reports Third Quarter Results and Appoints New Chief
Financial Officer
TORONTO, Nov. 13 /CNW/ - Predictive medicine company PreMD Inc. (TSX:
PMD; PREMF.pk) ("PreMD" or the "Company") today announced unaudited financial
results for the third quarter of fiscal 2008 ended September 30, 2008 ("Q3
2008").
<<
During the third quarter, PreMD announced that:
- the PREVU(x) appeal is being reviewed by the FDA Commissioner's
Office;
- the agreement with AstraZeneca has been terminated;
- the Company's shares have been delisted from AMEX; and
- the Company has begun trading on the Pink Sheets.
Subsequent to quarter end:
- the Company completed a secured debenture financing for gross
proceeds of $500,000;
- the Company's breast cancer clinical data was accepted for
presentation at the 4th Annual Academic Surgical Congress; and
- a listing review was initiated by the Toronto Stock Exchange.
>>
"We are working hard to create opportunities for PreMD. We are looking at
revenue generation strategies for PREVU(x) with companies like Medivon, LLC as
well as others in Canada, Europe and Asia and we are also pursuing
opportunities in the cosmetics field," stated Dr. Brent Norton, President and
CEO of PreMD. "We are also looking at strategies to monetize various tangible
and intangible assets and raise short-term capital to fund operations. There
are no guarantees that we will be able to achieve these plans, but we are
working towards improving the future of PreMD."
The Company is also pleased to announce the appointment of Catherine
Auld, C.A., as Chief Financial Officer. Ms. Auld will be responsible for
PreMD's financial matters as well as assist in strategic and investor
relations activities. Ms. Auld brings a breadth of knowledge in both the
biotechnology and financial industries and is currently working as a financial
consultant within the biotechnology industry. Previously, Ms. Auld was Chief
Financial Officer of NeuroMedix Inc. and Interim Chief Financial Officer of
ARIUS Research Inc., and prior thereto, Chief Financial Officer of Transition
Therapeutics Inc.
Mr. Ron Hosking, who has been with PreMD over 11 years is retiring as
Chief Financial Officer, but will continue to act as a consultant to the
Company. "Ron has been a significant asset to PreMD and we are very grateful
for his years of dedication and contribution," said Dr. Brent Norton. "He will
really be missed, so we are pleased that he has agreed to continue as a
consultant."
Financial Review (All amounts are in Canadian dollars)
The consolidated net loss for the three months ended September 30, 2008
(Q3 2008) was $1,879,000 or $(0.07) per share compared with a loss of
$1,635,000 or $(0.07) per share for the quarter ended September 30, 2007 (Q3
2007).
Total product sales were $7,000 for both Q3 2008 and Q3 2007. Similarly,
license revenue was $27,000 for Q3 2008 and Q3 2007. Product sales reflect
direct sales to customers. The license revenue consisted of the upfront cash
payment received in accordance with the 2007 licensing agreement with
AstraZeneca Pharmaceuticals LP ("AstraZeneca") which was deferred and
recognized into income on a straight-line basis over five years. This
agreement was terminated subsequent to September 30, 2008.
<<
Research and development expenditures for the quarter decreased by
$122,000 to $615,000 from $737,000 in Q3 2007. Significant causes of the
variance include:
- a decrease of $13,000 in spending on clinical trials for cancer;
- a decrease of $17,000 in R&D related travel;
- an increase of $22,000 in legal fees on intellectual property;
- a decrease of $37,000 on product development related to manufacturing
validation for the new cordless reader, as this project nears
completion;
- a decrease of $69,000 in stock compensation costs;
- a decrease of $218,000 in salaries and benefits for research
personnel due to reduction in staff; and
- a provision for obsolescence of $221,000 for components of the
PREVU(x) reader.
General and administration expenses amounted to $367,000 for Q3 2008
compared with $995,000 in Q3 2007, a decrease of $628,000. Significant causes
of the variance include:
- a reduction in annual meeting and annual report costs of $16,000 due
to cost containment activities;
- a decrease of $18,000 in directors fees;
- a decrease of $29,000 in travel costs;
- a decrease of $110,000 in stock compensation costs;
- a decrease of $178,000 in professional fees for legal, audit and
human resources; the 2007 amount included expenses of a business
development consultant; and
- a decrease of $235,000 in salaries and benefits due to reductions in
administrative staff;
>>
Interest on convertible debentures (issued on August 30, 2005) amounted
to $167,000 in both Q3 2008 and Q3 2007. The debentures bear interest at an
annual rate of 7%, payable quarterly in either cash or stock. The amount
accrued for Q3 2008 was subsequently paid in common shares, whereas the amount
for Q3 2007 was paid partly in shares ($135,000) and partly in cash. Imputed
interest on convertible debentures of $296,000 and $253,000 in Q3 2008 and
2007, respectively, represents the expense related to the accretion of the
liability component at an effective interest rate of approximately 15%.
Interest on senior unsecured debentures, issued on March 12, 2008,
amounted to $35,000 for Q3 2008. Imputed interest on the liability component
of the 2008 senior unsecured debentures amounted to $103,000 in Q3 2008, at an
effective interest rate of 10.9%.
Amortization expenses for capital assets and intangible assets for Q3
2008 amounted to $30,000 compared with $42,000 for Q3 2007.
The loss on foreign exchange was $348,000 for Q3 2008, compared with a
gain of $533,000 for Q3 2007. The major contributing factor for the change was
the impact of foreign exchange rates on the convertible debentures which are
repayable in US dollars.
Refundable scientific investment tax credits ("ITCs") accrued for Q3 2008
amounted to $49,000 versus $54,000 for Q3 2007.
As at September 30, 2008, PreMD had cash, cash equivalents and short-term
investments totaling $35,000 ($1,190,000 as at December 31, 2007). Cash used
to fund operating activities during Q3 2008 amounted to $409,000 compared with
$1,116,000 in Q3 2007. Subsequent to September 30, 2008, on October 7, 2008,
the Company issued secured debentures for gross proceeds of $500,000. To date,
the Company has financed its activities through product sales, license
revenues, the issuance of shares and debentures and the recovery of provincial
ITCs. The Company reported a loss of $1,879,000 for the three months ended
September 30, 2008, has a shareholders' deficiency of $7,701,000 as at
September 30, 2008 and has experienced significant operating losses and cash
outflows from operations since inception. The Company has operating and
liquidity concerns due to its significant net losses and negative cash flows
from operations.
Financial statements are attached to this press release and are available
at www.sedar.com.
About PreMD Inc.
PreMD Inc. is a leader in predictive medicine, dedicated to developing
rapid, non-invasive tests for the early detection of life-threatening
diseases. PreMD's cardiovascular products include PREVU(x) POC and PREVU(x) LT,
both non-invasive skin cholesterol tests. The Company's cancer tests include
ColorectAlert(TM), LungAlert(TM) and a breast cancer test. PreMD's head office
is located in Toronto, Ontario and its research and product development
facility is at McMaster University in Hamilton, Ontario. For more information
about PreMD, please visit www.premdinc.com.
This press release contains forward-looking statements. These statements
involve known and unknown risks and uncertainties, which could cause the
Company's actual results to differ materially from those in the
forward-looking statements. Such risks and uncertainties include, among
others, the successful development or marketing of the Company's products, the
competitiveness of the Company's products if successfully commercialized, the
lack of operating profit and availability of funds and resources to pursue R&D
projects, the successful and timely completion of clinical studies, product
liability, reliance on third-party manufacturers, the ability of the Company
to take advantage of business opportunities, uncertainties related to the
regulatory process, and general changes in economic conditions. In addition,
while the Company routinely obtains patents for its products and technology,
the protection offered by the Company's patents and patent applications may be
challenged, invalidated or circumvented by our competitors and there can be no
guarantee of our ability to obtain or maintain patent protection for our
products or product candidates.
Investors should consult the Company's quarterly and annual filings with
the Canadian and U.S. securities commissions for additional information on
risks and uncertainties relating to the forward-looking statements. Investors
are cautioned not to rely on these forward-looking statements. PreMD is
providing this information as of the date of this press release and does not
undertake any obligation to update any forward-looking statements contained in
this press release as a result of new information, future events or otherwise.
<<
PreMD Inc.
Incorporated under the laws of Canada
CONSOLIDATED BALANCE SHEETS
(In Canadian dollars)
(See note 1 - Nature of Operations and Going Concern Uncertainty)
Unaudited
As at As at
September 30, December 31,
2008 2007
$ $
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ASSETS
Current
Cash and cash equivalents 34,918 282,200
Short-term investments - 907,768
Accounts receivable 1,246 8,292
Inventory 23,661 61,177
Prepaid expenses and other receivables 718,767 758,715
Investment tax credits receivable 234,000 340,000
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Total current assets 1,012,592 2,358,152
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Capital assets, net of accumulated
amortization of $284,333 (2007 - $267,458) 69,235 93,867
Intangible assets, net of accumulated
amortization of $1,037,340 (2007 - $991,473) 259,916 305,783
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1,341,743 2,757,802
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LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current
Accounts payable 312,109 305,333
Accrued liabilities 621,516 765,312
Current portion of deferred revenue 400,050 106,680
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Total current liabilities 1,333,675 1,177,325
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Long-term debt
Debentures 658,964 -
Convertible debentures 7,049,694 5,626,987
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7,708,658 5,626,987
Deferred revenue - 373,380
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Total liabilities 9,042,333 7,177,692
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Shareholders' deficiency
Capital stock 29,617,770 29,120,655
Contributed surplus 3,443,288 3,098,928
Equity component of convertible debentures 2,239,385 2,239,385
Warrants 2,314,356 1,557,296
Deficit (45,315,389) (40,436,154)
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Total shareholders' deficiency (7,700,590) (4,419,890)
-------------------------------------------------------------------------
1,341,743 2,757,802
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See accompanying note
PreMD Inc.
CONSOLIDATED STATEMENTS OF LOSS, COMPREHENSIVE LOSS AND DEFICIT
(In Canadian dollars)
Unaudited
(note 1)
Three months ended Nine months ended
September 30 September 30
-------------------------- --------------------------
2008 2007 2008 2007
$ $ $ $
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REVENUE
Product sales 7,150 7,150 21,900 33,484
License revenue 26,670 26,670 80,010 26,670
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33,820 33,820 101,910 60,154
Cost of product sales 4,406 93,057 31,085 101,623
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Gross profit 29,414 (59,237) 70,825 (41,469)
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EXPENSES
Research and
development 614,501 736,855 1,470,235 2,108,491
General and
administration 367,052 995,433 1,314,130 2,547,538
Interest on
long-term debt 201,357 167,217 571,703 496,200
Imputed interest
on long-term debt 398,787 253,093 1,058,989 732,667
Amortization 30,059 42,046 74,422 124,744
Loss (gain) on
foreign exchange 347,760 (533,217) 574,743 (1,287,658)
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1,959,516 1,661,427 5,064,222 4,721,982
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RECOVERIES AND
OTHER INCOME
Investment tax
credits 49,000 54,000 94,000 102,000
Interest 2,599 31,531 20,162 95,760
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51,599 85,531 114,162 197,760
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Net loss and
comprehensive loss
for the period (1,878,503) (1,635,133) (4,879,235) (4,565,691)
Deficit, beginning
of period (43,436,886) (37,050,900) (40,436,154) (34,162,342)
Adjustment to
opening deficit - - - 42,000
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Deficit, end of
period (45,315,389) (38,686,033) (45,315,389) (38,686,033)
-------------------------------------------------------------------------
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Basic and diluted
loss per share $(0.07) $(0.07) $(0.19) $(0.19)
-------------------------------------------------------------------------
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Weighted average
number of
common shares
outstanding 26,660,746 25,080,610 26,033,574 24,036,431
-------------------------------------------------------------------------
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See accompanying note
PreMD Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Canadian dollars)
Unaudited
(note 1)
Three months ended Nine months ended
September 30 September 30
------------------------ -------------------------
2008 2007 2008 2007
$ $ $ $
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OPERATING ACTIVITIES
Net loss and
comprehensive loss
for the period (1,878,503) (1,635,133) (4,879,235) (4,565,691)
Add (deduct) items
not involving
cash
Amortization 30,059 42,046 74,422 124,744
Stock compensation
costs included in:
Research and
development
expense 15,557 84,261 92,832 151,644
General and
administration
expense 43,914 154,803 251,528 335,408
Loss on sale of
capital assets 3,938 - 3,938 143
Imputed interest
on long-term debt 398,787 253,093 1,058,989 732,667
Capitalized interest
on debenture 34,595 - 75,045 -
Interest on
convertible
debentures paid in
common shares 164,949 135,457 497,115 406,368
Add loss (deduct
gain) on foreign
exchange 347,760 (533,217) 574,743 (1,287,658)
Net change in non-cash
working capital
balances related to
operations 456,496 (123,726) 55,160 (962,444)
Increase (decrease)
in deferred revenue (26,670) 506,730 (80,010) 506,730
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Cash used in operating
activities (409,118) (1,115,686) (2,275,473) (4,558,089)
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INVESTING ACTIVITIES
Short-term investments 416,616 15,521 907,768 2,124,980
Proceeds from sale of
capital assets 1,300 - 1,300 1,435
Purchase of capital
assets - (7,845) (9,161) (10,078)
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Cash provided by
investing activities 417,916 7,676 899,907 2,116,337
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FINANCING ACTIVITIES
Issuance of debentures,
net of issue costs - - 1,137,534 -
Issuance of capital
stock, net of issue
costs - (46,153) - 3,683,804
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Cash provided by
(used in) financing
activities - (46,153) 1,137,534 3,683,804
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Effect of exchange rate
changes on cash and
cash equivalents (349) (20,665) (9,250) (14,019)
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Net increase (decrease)
in cash and cash
equivalents during
the period 8,449 (1,174,828) (247,282) 1,228,033
Cash and cash
equivalents
Beginning of period 26,469 2,515,438 282,200 112,577
End of period 34,918 1,340,610 34,918 1,340,610
-------------------------------------------------------------------------
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Represented by
Cash 34,918 294,138 34,918 294,138
Cash equivalents - 1,046,472 - 1,046,472
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34,918 1,340,610 34,918 1,340,610
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See accompanying note
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
(In Canadian dollars unless otherwise noted)
September 30, 2008
Unaudited
1. GOING CONCERN UNCERTAINTY
The Company's consolidated financial statements have been prepared on
a going-concern basis which presumes the realization of assets and
discharge of liabilities in the normal course of business for the
foreseeable future. The Company reported a loss of $4,879,235 for the
nine months ended September 30, 2008, has a shareholders' deficiency
of $7,700,590 as at September 30, 2008 and has experienced
significant operating losses and cash outflows from operations since
its inception. The Company has operating and liquidity concerns due
to its significant net losses and negative cash flows from
operations.
The Company's ability to continue as a going-concern is uncertain and
is dependent upon its ability to raise additional capital to
successfully complete its research and development programs,
commercialize its technologies, obtain regulatory approvals for its
products and ultimately, generate profitable operations and positive
operating cash flows. It is not possible at this time to predict the
outcome of these matters. It will be necessary for the Company to
raise additional funds for the continuing development and marketing
of its technologies. These consolidated financial statements do not
include any adjustments and classifications to the carrying values of
assets and liabilities that may be required should the Company be
unable to continue as a going concern.
>>
%SEDAR: 00007927E %CIK: 0001179083
/For further information: Brent Norton, President & CEO, Tel: (416)
222-3449 ext 22, Email: bnorton(at)premdinc.com/
(PREMF PMD.)
CO: PreMD Inc.
CNW 17:00e 13-NOV-08
