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Neovasc Inc. Reports Third Quarter Fiscal Year 2008 Financial Results
Date:12/1/2008

         -- Product Sales More Than Doubled Over Prior Year Quarter --
          -- Fully Integrated New Company has Streamlined Operations
                       and Sharpened Commercial Focus --

TSX Venture Exchange: NVC

RICHMOND, BC, Dec. 1 /PRNewswire-FirstCall/ - Neovasc Inc. (TSXV: NVC), a new specialty vascular device company, today announced financial results for the third quarter and nine months ended September 30, 2008.

Neovasc Chief Executive Officer Alexei Marko noted, "These third quarter results, which reflect the first period of Neovasc's operations as a fully consolidated company, include encouraging signs of progress while also reflecting significant one-time, non-recurring charges and expenses associated with the acquisition and integration of the two Israeli companies now combined into Neovasc. We made important gains during the quarter in integrating our three constituent companies into one well-functioning unit, including significantly streamlining our operations for greater efficiency and maximum effectiveness. We also actively participated in several major interventional cardiology conferences during the quarter, working with key opinion leaders to conduct a number of educational programs that were well-received and reflect the increased marketing focus that we view as essential to our future growth. Our goal is to strengthen our positioning as an innovative vascular intervention company with an exciting pipeline of products and technologies, and we will continue to focus on advancing our existing and new products and expanding our commercial reach."

Financial Results

Results for the three and nine months ended September 30, 2008 follow. All amounts are in Canadian dollars.

Revenues

During the third quarter, revenues increased 169% year-over-year from $218,840 for the quarter ended September 30, 2007 to $587,884 for the quarter ended September 30, 2008. Revenues increased 63% year-over-year from $890,899 for the nine months ended September 30, 2007 to $1,454,430 for the nine months ended September 30, 2008. The increase in revenues was primarily the result of growth in product sales of Neovasc's tissue and surgical products and services.

Cost of Sales

The cost of sales and services for the three and nine months ended September 30, 2008 was $283,070 and $711,674 as compared to $105,897 and $426,637 in the comparative periods of 2007. Gross margins remained consistent during these periods. The gross margin for the third quarter of 2008 was 52%, compared to 52% in the third quarter of 2007.

Expenses

Total expenses excluding cost of sales and services for the third quarter of 2008 were $4,307,855, compared to $1,942,259 in the third quarter of 2007, primarily reflecting increased general and administrative costs associated with the acquisitions of the two Israeli companies and the formation of Neovasc, as well as increased investment in research and development. In addition, the Company began the amortization of the intangible, technology assets acquired in the acquisition of B-Balloon and Neovasc Medical. A non-cash amortization charge of $1,064,785 was incurred, which significantly impacted the Total Expense figure. Total expenses for the nine months ended September 30, 2008 and 2007 were $8,413,041 and $6,042,767, respectively.

Net Losses

The consolidated net loss for the three and nine months ended September 30, 2008 was $4,004,023 and $7,661,271 or $0.23 and $0.81 basic loss per share as compared with a net loss of $1,802,176 and $5,530,725, or $0.32 and $1.17 per share for the comparative periods in 2007. The increase in net loss in the third quarter of 2008 was primarily the result of increased general and administrative costs associated with the integration of the two companies and the formation of Neovasc, increased investment in research and development and initiation of amortization on the intangible technology assets acquired in the acquisitions.

Cash Position

At September 30, 2008, the Company had cash and cash equivalents of $5,106,522 and restricted cash related to a security on long-term debt of $50,000, as compared to cash of $3,242,404 as of December 31, 2007. At September 30, 2008 the Company had working capital of $4,784,455 as compared to working capital of $3,431,266 at December 31, 2007. Cash reserves were bolstered by an $8,325,004 equity financing the Company completed after the close of the second quarter, on July 1, 2008.

    NEOVASC INC. (Formerly Medical Ventures Corp.)
    Interim Consolidated Balance Sheets

    -------------------------------------------------------------------------
                                                  September 30,  December 31,
                                                          2008          2007
    -------------------------------------------------------------------------

    ASSETS

    CURRENT
      Cash and cash equivalents                   $  5,106,522  $  3,242,404
      Accounts receivable                              512,332       568,964
      Inventory (Note 7)                               496,205       384,124
      Prepaid expenses and other assets (Note 8)       351,229        18,755
    -------------------------------------------------------------------------
                                                     6,466,288     4,214,247
    RESTRICTED CASH AND CASH EQUIVALENTS (Note 13)      50,000        50,000
    RETIREMENT ASSETS (Note 12)                         54,010             -
    TECHNOLOGY (Note 10)                            20,568,715             -
    GOODWILL (Note 11)                               3,557,082             -
    PROPERTY AND EQUIPMENT (Note 9)                  1,447,795     1,425,553
    -------------------------------------------------------------------------
                                                  $ 32,143,890  $  5,689,800
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued liabilities    $  1,630,217  $    735,310
      Current portion of long-term debt                 20,297        19,559
      Current portion of repayable contribution
       agreement                                        31,319        28,112
    -------------------------------------------------------------------------
                                                     1,681,833       782,981
    LONG-TERM DEBT (Note 13)                           423,899       441,540
    REPAYABLE CONTRIBUTION AGREEMENT (Note 14)         286,835       283,959
    RETIREMENT LIABILITIES (Note 12)                    83,205             -
    -------------------------------------------------------------------------
                                                     2,475,772     1,508,480
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY

    Share capital (Note 15)                         58,606,916    28,835,081
    Contributed surplus (Note 15)                    4,352,871       976,637
    Deficit                                        (33,291,669)  (25,630,398)
    -------------------------------------------------------------------------
                                                    29,562,179     4,181,320
    -------------------------------------------------------------------------
                                                  $ 32,143,890  $  5,689,800
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    NEOVASC INC. (Formerly Medical Ventures Corp.)
    Interim Consolidated Statements of Operations, Comprehensive Loss
    and Deficit
    For the three and nine months ended September 30
    -------------------------------------------------------------------------
                              Three months ended           Nine months ended
                              2008          2007          2008          2007
    -------------------------------------------------------------------------
                        (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)

    SALES (Note 17)
      Product sales   $    547,118  $    185,375  $  1,385,042  $    707,818
      Consulting
       services             40,766        33,465        69,388       182,081
    -------------------------------------------------------------------------
                           587,884       218,840     1,454,430       890,899
    COST OF SALES,
      including
       underutilized
       capacity of
       $25,144             283,070       105,897       711,674       426,637
    -------------------------------------------------------------------------
    GROSS PROFIT           304,814       112,943       742,756       464,262
    -------------------------------------------------------------------------

    EXPENSES
      Selling              816,421       801,805     2,351,416     2,054,124
      General and
       administration    1,297,333       475,247     2,614,981     1,657,453
      Product
       development and
       clinical trials   1,087,292       618,971     2,123,995     2,061,534
      Inventory write
       down                      -             -        94,404       124,170
      Amortization       1,106,809        46,236     1,228,245       145,486
    -------------------------------------------------------------------------
                         4,307,855     1,942,259     8,413,041     6,042,767
    -------------------------------------------------------------------------
    LOSS BEFORE OTHER
     INCOME (EXPENSES)  (4,003,041)   (1,829,316)   (7,670,285)   (5,578,505)
    -------------------------------------------------------------------------
    OTHER INCOME
     (EXPENSES)
      Interest income       36,500        59,689        59,803       141,769
      Interest on
       long-term debt      (45,477)       (2,808)      (58,012)       (8,544)
      Accreted interest
       on repayable
       contribution
       agreement
       (Note 14)            (3,880)            -       (11,565)            -
      Gain (Loss) on
       foreign exchange     11,875       (29,741)       18,788       (85,445)
    -------------------------------------------------------------------------
                              (982)       27,140         9,014        47,780
    -------------------------------------------------------------------------
    NET LOSS AND
     COMPREHENSIVE
     LOSS FOR THE
     PERIOD             (4,004,023)   (1,802,176)   (7,661,271)   (5,530,725)
    DEFICIT, BEGINNING
     OF PERIOD         (29,287,646)  (21,628,986)  (25,630,398)  (17,900,437)
    -------------------------------------------------------------------------
    DEFICIT, END OF
     PERIOD           $(33,291,669) $(23,431,162) $(33,291,669) $(23,431,162)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    BASIC LOSS PER
     SHARE            $      (0.23) $      (0.32) $      (0.81) $      (1.17)
    FULLY DILUTED
     LOSS PER SHARE   $      (0.21) $      (0.32) $      (0.77) $      (1.17)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    WEIGHTED AVERAGE
     NUMBER OF COMMON
     SHARES OUTSTANDING 17,701,276     5,560,477     9,607,410     4,725,886
    WEIGHTED AVERAGE
     NUMBER OF FULLY
     DILUTED SHARES
     OUTSTANDING        18,901,403     5,560,477    10,007,456     4,725,886
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    NEOVASC INC. (Formerly Medical Ventures Corp.)
    Interim Consolidated Statements of Cash Flows
    For the three and six months ended June 30
    -------------------------------------------------------------------------
                              Three months ended           Nine months ended
                              2008          2007          2008          2007
    -------------------------------------------------------------------------
    OPERATING
     ACTIVITIES
      Net loss for the
       period         $ (4,004,023) $ (1,802,176) $ (7,661,271) $ (5,530,725)
      Items not
       affecting cash
        Inventory write
         down                    -             -        94,404       124,170
        Amortization     1,106,809        46,236     1,228,245       145,486
        Interest on
         repayable
         contribution
         agreement           3,880             -        11,565             -
        Stock-based
         compensation      273,687        44,770       303,427       138,528
    -------------------------------------------------------------------------
                        (2,619,647)   (1,711,170)   (6,023,630)   (5,122,541)
      Change in
       non-cash
       operating assets
       and liabilities
        Accounts
         receivable       (171,684)      (53,382)       56,632      (109,859)
        Inventory         (118,451)        5,570      (206,485)      141,218
        Prepaid
         expenses and
         other assets      255,610        48,883        86,025        42,605
        Retirement assets   34,388             -        34,388             -
        Accounts payable
         and accrued
         liabilities      (150,910)       30,018       (45,417)      336,906
        Retirement
         liabilities       (25,604)            -       (25,604)            -
    -------------------------------------------------------------------------
                        (2,796,298)   (1,680,081)   (6,124,091)   (4,711,671)
    -------------------------------------------------------------------------
    INVESTING ACTIVITY
      Acquisition of
       business, net
       of cash of
       $781,008
        B-Balloon Ltd.    (274,858)            -      (274,858)            -
        Neovasc Medical
         Ltd.              210,625             -       210,625             -
        Accounts payable
        on acquisitions    273,046             -       273,046             -
      Purchase of
       property and
       equipment           (59,175)     (492,665)      (72,867)     (525,807)
    -------------------------------------------------------------------------
                           149,638      (492,665)      135,946      (525,807)
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
      Increase in
       long-term debt            -       298,911             -       298,911
      Repayment of
       long-term debt       (4,868)       (1,548)      (16,903)      (11,748)
      Repayment of loan
       from related party
       of B-Balloon       (356,440)            -      (356,440)            -
      Repayment of
       repayable
       contribution
       agreement            (1,099)       (1,161)       (5,482)       (3,717)
      Proceeds from
       share issue, net
       of costs          8,231,088             -     8,231,088     7,251,421
    -------------------------------------------------------------------------
                         7,868,681       296,202     7,852,263     7,534,867
    -------------------------------------------------------------------------
    (DECREASE)/INCREASE
     IN CASH             5,222,021    (1,876,544)    1,864,118     2,297,389
    CASH AND CASH
     EQUIVALENTS,
      BEGINNING OF
       PERIOD             (115,499)    6,872,668     3,242,404     2,698,735
    -------------------------------------------------------------------------
      END OF PERIOD   $  5,106,522  $  4,996,124  $  5,106,522  $  4,996,124
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    REPRESENTED BY:
      (Bank Overdraft)
       /Cash               287,849       516,580       287,849       516,580
      Cashable
       guaranteed
       investment
       certificates      4,818,673     4,479,544     4,818,673     4,479,544
    -------------------------------------------------------------------------
                      $  5,106,522  $  4,996,124  $  5,106,522  $  4,996,124
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NON CASH
     TRANSACTIONS
      Change in Asset
       Use (Note 9)              -             -             -        53,592
      Issuance of
       shares to
       acquire                                 -
        B-Balloon and
         Neovasc Medical
         (Note 4)       24,613,554             -    24,613,554             -
    SUPPLEMENTAL CASH
     FLOW INFORMATION
      Interest paid          7,417         2,494        19,952         8,544
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

About Neovasc Inc.

Neovasc Inc. develops, manufactures and markets medical devices for the rapidly growing vascular and surgical marketplace. The company's current products help doctors diagnose and treat a wide range of health conditions, including vascular diseases and obesity. They include the Metricath(R) arterial and in-stent measurement system, and PeriPatch(TM) surgical tissue and staple line reinforcement products. Neovasc also provides contract medical device development and manufacturing services as well as a pipeline of newly acquired technologies and products. For more information, visit: www.neovasc.com.

Statements contained herein that are not based on historical or current fact, including without limitation statements containing the words "anticipates," "believes," "may," "continues," "estimates," "expects," and "will" and words of similar import, constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, both nationally and in the regions in which the Company operates; history of losses and lack of and uncertainty of revenues, ability to obtain required financing, receipt of regulatory approval of product candidates, ability to properly integrate newly acquired businesses, technology changes; competition; changes in business strategy or development plans; the ability to attract and retain qualified personnel; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; liability and other claims asserted against the Company; and other factors referenced in the Company's filings with Canadian securities regulators. Although the Company believes that expectations conveyed by the forward-looking statements are reasonable based on the information available to it on the date such statements were made, no assurances can be given as to the future results, approvals or achievements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company does not assume the obligation to update any forward-looking statements except as otherwise required by applicable law.


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