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SANTA CLARA, Calif., Aug. 15, 2011 /PRNewswire/ -- NewCardio, Inc., (OTC BB: NWCI) a cardiac diagnostic technology provider, today announced financial results for the second quarter ended June 30, 2011. More details on the financial results are available in the Company's Quarterly Report on Form 10-Q, filed today with the Securities and Exchange Commission.
Highlights
NewCardio generated ECG license and professional services revenue associated with the deployment of QTinno for use in the cardiac safety component of a drug development study, totaling $102,000 compared to $21,000 in the second quarter of last year, an increase of 386%. Net cash used in operating activities was $682,000 in the current quarter, which is a decrease of 54% from $1,492,000 in the second quarter last year. For the quarter, the Company reported a net loss attributable to common shareholders of $935,000, or $(0.03) per fully diluted share, compared to a net loss attributable to common shareholders of $1.5 million, or $(0.05) per fully diluted share, in the second quarter last year.
The Company is continuing to explore potential strategic funding opportunities to provide capital and other resources for the further development and marketing of its 3-D platform technology solutions; however, there can be no assurance that such efforts will be successful.
Vincent Renz, NewCardio's President and CEO commented, "Progress in the development and commercialization of our initial solutions remains steady, but sure, as we continue our strategic funding efforts in raising the capital required to accelerate the development of CardioBip and my3KG. QTinno continues to gain market adoption, as marked by our selection by Merck for use in two early phase QT trials, which we believe will continue as our partners continue to educate their drug development customers who continue to look for advanced science and technology which will enable them to receive quality results in a more timely and cost effective manner. In addition, we continue to bolster the reputation of CardioBip and my3KG in the industry through our current development and validation efforts, as evidenced by the presentations and the acceptance of papers, and believe this will ultimately lead to commercial success."
Dr. Patrick Maguire, Chairman of the Board of Directors, added, "Since becoming Chairman in June 2011, I have been actively working with the management team and the Board on our strategic opportunities. I continue to believe in NewCardio and the opportunity to move forward our superior technology, which has the potential to successfully address significant clinical needs in cardiac safety, remote monitoring and arrhythmia detection. I look forward to being part of NewCardio's progress and success, bringing both my medical background as a cardiologist and business background as CEO of a VC-backed cardiology technology company to help the Company realize its potential."
About NewCardio, Inc.NewCardio is a cardiac diagnostic and services company developing and marketing proprietary software platform technologies to provide higher accuracy to, and increase the value of, the standard 12L ECG. NewCardio's 3-D ECG software platform reduces the time and expense involved in assessing cardiac status while increasing the ability to diagnose clinically significant conditions which were previously difficult to detect. NewCardio's software products and services significantly improve the diagnosis and monitoring of cardiovascular disease, as well as cardiac safety assessment of drugs under development. For more information, visit www.newcardio.com.
Forward-Looking StatementsThis press release contains forward-looking statements. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based on currently available information and assumptions made by management. Although we believe that the assumptions on which the forward-looking statements contained herein are based are reasonable, any of those assumptions could prove to be inaccurate given the inherent uncertainties as to the occurrence or nonoccurrence of future events. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including the potential risks and uncertainties set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2010 and relate to our business plan, our business strategy, development of our proprietary technology platform and our products, timing of such development, timing and results of clinical trials, level and timing of FDA regulatory clearance or review, market acceptance of our products, protection of our intellectual property, implementation of our strategic, operating and people initiatives, benefits to be derived from personnel and directors, ability to commercialize our products, our assumptions regarding cash flow from operations and cash on-hand, the amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations and infrastructure, implementation of marketing programs, our key agreements and strategic alliances, our ability to obtain additional capital as, and when, needed, and on acceptable terms and general economic conditions specific to our industry, any of which could impact sales, costs and expenses and/or planned strategies and timing. We assume no obligation to, and do not currently intend to, update these forward-looking statements.
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Tables followNEWCARDIO, INC.CONDENSED CONSOLIDATED BALANCE SHEETSJune 30,
December 31,2011
2010(unaudited)ASSETSCurrent assets:Cash
$
22,044
$
584,974Accounts receivable, trade
47,811
42,905Prepaid expenses
16,972
32,303Prepaid commitment fees
550,910
1,958,654 Total current assets
737,737
2,618,836Property, plant and equipment, net of accumulated depreciation of $200,067 and $158,950 as of June 30, 2011 and December 31, 2010, respectively
116,843
156,261Other assets:Patent costs, net
81,431
55,357Deposits
22,600
22,600 Total other assets
104,031
77,957$
958,611
$
2,853,054LIABILITIES AND STOCKHOLDERS' DEFICITCurrent liabilities:Accounts payable and accrued expenses
$
918,705
$
8,413Unearned revenue
1,000
1,500Line of credit, $2,200,000 and $1,900,000 to a related party as of June 30, 2011 and December 31, 2010, respectively
3,900,000
3,000,000 Total current liabilities
4,819,705
3,619,913Warrant derivative liability
336,443
2,141,871Preferred stock derivative liability
9,052
250,863 Long term liabilities
345,495
2,392,734 Total liabilities
5,165,200
6,012,647Temporary equity:Preferred shares subject to liability conversion
-
-Permanent equity:Stockholders' deficit:Preferred stock, $0.001 par value; 1,000,000 shares authorized:Preferred stock Series B, $0.001 par value; 18,000 shares designated; 12,116 and 12,250 shares issued and outstanding as of June 30, 2011 and December 31, 2010, respectively
12
12Preferred stock Series C, $0.001 par value; 7,000 shares designated; 2,295 shares issued and outstanding as of June 30, 2011 and December 31, 2010
2
2Preferred stock Series D, $0.001 par value; 1,000 shares designated; 1,000 and 800 shares issued and outstanding as of June 30, 2011 and December 31, 2010, respectively
1
1Common stock, $0.001 par value, 500,000,000 shares authorized; 32,556,576 and 30,688,902 shares issued as of June 30, 2011 and December 31, 2010, respectively; 32,494,076 and 30,563,902 shares outstanding as of June 30, 2011 and December 31, 2010, respectively
32,557
30,689Additional paid in capital
41,537,281
39,236,320Deficit
(45,776,442)
(42,426,617) Total stockholders' deficit
(4,206,589)
(3,159,593)$
958,611
$
2,853,054NEWCARDIO, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)Three months ended June 30,
Six months ended June 30,2011
2010
2011
2010Revenue
$
,559
$
21,077
$
40,628
$
70,118Cost of sales
35,933
44,823
97,645
63,307Gross profit (loss)
65,626
(23,746)
42,983
6,811Operating expenses:Selling, general and administrative
1,095,513
1,645,112
2,305,467
3,547,122Depreciation
11,927
11,496
24,246
21,969Research and development
692,568
1,037,614
1,417,186
1,925,688 Total operating expenses
1,800,008
2,694,222
3,746,899
5,494,779Net loss from operations
(1,734,382)
(2,717,968)
(3,703,916)
(5,487,968)Other income (expense)Gain on change in fair value of warrant derivative liability and preferred stock derivative liability
1,726,046
1,880,553
2,084,270
614,233Amortization of commitment fees
(742,531)
(541,318)
(1,425,502)
(781,443)Other financing costs
(75,202)
(60,000)
(100,438)
(85,000)Interest, net
(109,061)
(27,408)
(204,239)
(41,113)Total other income (expense):
799,252
1,251,826
354,091
(293,323)Net loss before income taxes
(935,130)
(1,466,141)
(3,349,825)
(5,781,291)Provision for income taxes
-
-
-
-NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
$
(935,130)
$
(1,466,141)
$
(3,349,825)
$
(5,781,291)Net (loss) per share-basic and fully diluted
$
(0.03)
$
(0.05)
$
(0.11)
$
(0.21)Weighted average number of shares-basic and fully diluted
32,227,739
28,495,245
31,488,868
27,418,543Investor Contact:
Hayden IR
Jeff Stanlis, Partner
(602) 476-1821
jeff@haydenir.com
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