Exhibit 99.1
EQUIDYNE CORPORATION
Press release
EQUIDYNE CORPORATION
REPORTS FIRST QUARTER RESULTS FY 2003 AND
ANNOUNCES AGREEMENT TO SELL NEEDLE-FREE ASSETS
VANCOUVER, BRITISH COLUMBIA, CANADA, December 9, 2003 ------- EQUIDYNE
CORPORATION (AMEX:IJX) announced today unaudited financial results for its first
quarter ended October 31, 2003. Net loss for the three months ended October 31,
2003 was $1,660,000, or $0.11 per share, compared to $616,000, or $0.04 per
share for the three months ended October 31, 2002, an increase of 169%. The
increase principally reflects increased professional service fees and corporate
expenditures including costs associated with the Company's 2003 Annual Meeting
of Stockholders held on September 9, 2003 and associated proxy contest thereon
and related employee severance costs. Further, the Company no longer has the
ability to carry back its operating losses, thus has no income tax benefits
associated with its losses incurred in the current period.
Equidyne reported that consolidated net sales decreased by 91% to $2,000 for the
three months ended October 31, 2003, compared to $22,000 for the three months
ended October 31, 2002.
Equidyne also reported that it had cash and cash equivalents of $7.8 million and
working capital of $10.9 million as of October 31, 2003. This compares to cash
and working capital of $9.5 million and $12.4 million, respectively as of July
31, 2003. The decrease in cash and working capital reflects the net effect of
the Company's operating losses. In November 2003, the Company received an income
tax refund of approximately $2.8 million.
The Company also announced that its wholly owned subsidiary, Equidyne Systems,
Inc. ("ESI") had entered into an agreement with HNS International Inc. ("HNS")
to sell certain assets related to ESI's needle-free business to HNS. The assets
being sold include all of the intellectual property related to the needle-free
business and various equipment and inventories. The purchase price is $750,000,
including a $100,000 deposit which is non-refundable should HNS choose not to
complete the transaction. The sale is expected to close on January 6, 2004. HNS
is a company owned by Jim Fukushima, a former director of Equidyne and a
stockholder of the Company.
The Company further announced that it is pursuing discussions in respect of
certain acquisition opportunities in a field not related to the medical product
or health care field.
The Company updated stockholders on the progress of its cost cutting program. In
the previous fiscal year, the Company had an operating loss of $4.5 million on
net sales of only $82,000. Included in this loss were G&A expenses of $3.2
million, of which over $800,000 was salaries and bonuses for the Company's CEO,
President, and Chief Financial Officer. Since the Stockholders' Meeting, the
Company has:
i) terminated the former CEO, President and Chief Financial Officer;
ii) relocated its "executive office space" from Dallas to shared office
space in Vancouver;
iii) prepared to shut down its San Diego office by calendar year end;
iv) terminated the investment bankers formerly engaged by the Company;
v) discontinued the Company's D&O insurance, thus receiving a refund of
almost $275,000 on the cancelled policy;
vi) discontinued a lawsuit the Company had been pursuing against various
stockholders and other persons related to postings made on an internet
chat board about the Company;
vii) sold redundant assets; and
viii) generally lowered overhead expenses and operating costs.
Michael Smith, the Company's President, commented, "Since being elected in
September, the new Boards of Directors' objectives have been to preserve cash by
minimizing overhead expenses, rationalize and realize value from the Company's
existing needle-free technologies and seek new business opportunities,
investments and acquisitions. We feel we have made substantial progress in all
of these areas."
Mr. Smith continued, "At the time of the Stockholders' Meeting, the Company's
staffing consisted of the CEO, the President, a CFO, a controller and a human
resources manager with no employees in R&D, marketing or operations. R&D and
most marketing activities had been discontinued by former management. The
Company no longer had the product or technical expertise to further develop or
customize its technology. Prior management had allowed the Company's technology
to stagnate while the rest of the industry had moved forward. Sales of product
are now at a trivial level ($2,000 in the three months ended October 31, 2003).
Further, prior management had made no material progress in establishing
licensing or similar relationships with pharmaceutical companies or in any other
sort of transaction regarding the technology. All of these factors have led to a
diminishment in the value of the needle-free business, as well as severely
limiting the Company's options going forward. Further, it is clear that
additional delays in implementing a plan for the needle free business will only
lead to further diminishment of the value of the technology, as well as cause
the company to incur additional operating losses. In light of all circumstances,
and after consideration of all options, we believe that the sale of the assets
to HNS clearly presents the best economic alternative for the Company."
Mr. Smith concluded, "After a lengthy period of costly stagnation, we are happy
to inform stockholders that progress at the Company is being made. The drain on
company resources due to excessive G&A and management compensation and needless
legal expenses has been relieved, and we have made significant progress towards
charting a new course for the Company. We would like to thank stockholders for
the support they continue to give us in our efforts."
The Company also announced that Roy Zanatta has resigned as a director and
secretary of the Company in order to pursue other business interests. The
Company would like to thank Mr. Zanatta for his efforts on behalf of Equidyne.
For further information, please call Rene Randall, Investor Relations, at
604-408-8538.
All statements included in this press release, other than statements of
historical facts, that address activities, events or developments that we
intend, expect, project, believe or anticipate will or may occur in the future
are forward-looking statements (as such term is defined in Section 27A of the
Securities Exchange Act of 1934, as amended). Such statements are typically
characterized by terminology such as "believe," "anticipate," "should,"
"intend," "plan," "will," "expect," "estimate," "project," "positioned,"
"strategy" and similar expressions. These statements are based upon assumptions
and assessments made by the Company's management in light of its experience and
its perception of historical trends, current conditions, expected future
developments and other factors it believes to be appropriate. These
forward-looking statements are subject to a number of risks and uncertainties,
including risks and uncertainties associated with excess or obsolete inventory;
the success of research and development activities and the speed with which
regulatory authorizations and product launches may be achieved; trends toward
managed care and healthcare containment and the ability of the Company to obtain
favorable insurance reimbursement coverage for the Company's products; market
acceptance of the Company's products; changes in government laws and regulations
affecting the Company and its products; exposure to product liability and other
types of lawsuits; the Company ability to protect its intellectual property; the
Company's ability to manufacture its products in sufficient quantities to meet
the demands of the marketplace; the Company's dependence on key customers and
suppliers and their financial viability; the impact of competition in the
Company's markets; the Company's ability to effectively manage its growth; the
potential impairment of the Company's assets; the effect of losses and other
factors on the Company's business, financial condition and results of
operations; and the Company's capital resources and its ability to fulfill its
existing obligations and ongoing capital needs. A further list and description
of these risks, uncertainties and other matters can be found in the Company's
Annual Report on Form 10-KSB, as amended, for the fiscal year ended July 31,
2003, and the Company's other filings with the Securities and Exchange
Commission. Any such forward-looking statements are not guarantees of future
performance and actual results, developments and business decisions may differ
materially from those contemplated by such forward-looking statements. Except as
required by applicable law, the Company undertakes no obligation to update any
forward-looking statements, whether as a result of new information, future
events or otherwise.
- FINANCIAL TABLES FOLLOW -
EQUIDYNE CORPORATION
Suite 1620 400 Burrard Street Vancouver BC V6C 3A6 Phone (604)408-8538
Fax (604) 683-3205
EQUIDYNE CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
OCTOBER 31, JULY 31,
2003 2003
----------- --------
(Thousands)
ASSETS
Cash and cash equivalents $ 7,783 $ 9,517
Other current assets 6,772 6,583
------- -------
Total current assets 14,575 16,100
Property and equipment, net 11 50
Deposits 5 5
Patents, net 477 490
------- -------
$ 1,068 $16,645
======= =======
LIABILITIES & STOCKHOLDERS' EQUITY
Total current liabilities $ 3,618 $ 3,706
Total stockholders' equity 11,450 12,939
------- -------
$15,068 $16,645
======= =======
EQUIDYNE CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
OCTOBER 31,
---------------------------
2003 2002
------- -------
(Thousands, except per share
amounts)
Net sales $ 2 $ 22
Cost of goods sold (19) 25
------- -------
Gross loss (17) (3)
Operating expenses 1,632 928
------- -------
Operating loss (1,649) (931)
Other income (expense):
Interest and other, net (11) 53
------- -------
Loss before income tax benefit (1,660) (878)
Income tax benefit -- (262)
------- -------
Net loss $(1,660) $ (616)
======= =======
Net loss per common share, basic $ (0.11) $ (0.04)
======= =======
Net loss per common share, diluted $ (0.11) $ (0.04)
======= =======