NOVEKO INTERNATIONAL INC. Announces its Results For the First Quarter Ended
September 30, 2010
Appointment of Mr. Jean Brassard to the Board of Directors
EKO / TSX
MONTREAL, Nov. 12 /CNW Telbec/ - Noveko International Inc. ("the Company") today announced the results for its first quarter ended September 30, 2010.
"Although our performance was below our expectations, we made good progress over the first quarter of the previous year, mainly with our air filtration solutions, whereas at the same time last year we had not yet started their marketing. We keep the focus on this segment, which is a driver of sustainable growth for our Company. Our many initiatives in both the transportation and building markets will enable us to achieve further advances this year that will gradually yield their benefits," indicated Mr. André Leroux, Chairman of the Board and Chief Executive Officer.
"We therefore remain optimistic, even though sales were down in the first quarter of 2011 from the same period of the previous year, when the pandemic was at its height. In addition, although ECM saw its sales grow by 40% in Euros, this outstanding growth was only partly reflected in our revenues due to the sharp devaluation of the Euro against the Canadian dollar during the period. Despite this context, we further reduced our loss," added Mr. Leroux. "We are continuing our efforts to improve our financial position and are focusing on operating cost control, especially in the sanitizers segment. As for the masks segment, despite the challenges we faced, we are working to complete the certification processes and accelerate our marketing activities. We are also happy to count on our investors' renewed support, which attests to their confidence in our business plan."
"Finally, it is with great pride that we announce today the appointment of Mr. Jean Brassard to our Board of Directors. We are privileged to have one of the pioneers and minds behind the success of CGI joining our ranks. We will certainly benefit from his vast experience, his business acumen and his leadership," concluded Mr. Leroux.
Selected consolidated information | ||||||
Three-Month Periods Ended September 30 | 2010(1) | 2009 | ||||
(in thousands of $, except per-share amounts) (unaudited) | ||||||
Revenues from continuing operations | 2,747 | 4,388 | ||||
Gross margin | 1,223 | 2,095 | ||||
Loss before amortization, financial expenses, income taxes, other items and discontinued operations(2) |
(2,434) | (2,764) | ||||
Loss from continuing operations | (2,838) | (3,503) | ||||
Loss from discontinued operations(3) | (88) | (636) | ||||
Net loss | (2,926) | (4,139) | ||||
Loss per Class A share (basic and diluted) | ||||||
Continuing operations | $ | (0.04) | $ | (0.05) | ||
Discontinued operations(3) | $ | (0.00) | $ | (0.01) | ||
Net loss | $ | (0.04) | $ | (0.06) | ||
Weighted average number of outstanding Class A shares, basic and diluted (in thousands) |
76,006 | 67,277 |
1) The consolidated financial statements include the accounts of the Company and its subsidiaries, all wholly-owned as at September 30, 2010.
2) Including stock-based compensation of $241,690 and $1,179,524 for the respective periods of 2010 and 2009, which has no impact on the cash balance.
3) Related to BLI's and Magnum's operations for the first quarter of 2010, but solely to BLI's operations for the first quarter of 2011.
Balance Sheet Data | September 30 2010 |
June 30 2010 |
||
Total assets | 45,910 | 42,675 | ||
Shareholders' equity | 35,085 | 33,063 | ||
Total interest-bearing debt(1) | 1,403 | 1,446 | ||
Non-current liabilities held for sale(2) | 1,697 | 1,753 | ||
Cash, cash equivalents, short-term investments and deposit in trust | 6,087 | 2,873 |
1) Including long-term debt and its current portion, as well as bank loans, excluding BLI.
2) Related to BLI.
In this press release, unless otherwise indicated or required by the context, "Noveko International", "the Company", "we", "us", "our", "our Company", "Group" and "our Group" designate, as the case may be, Noveko International Inc. or Noveko International Inc. and its subsidiaries, and "Noveko" designates Noveko Inc., a subsidiary of the Company. The Company's other subsidiaries are designated as follows: "ECM" for S.A.S. E.C.M., "Epurair" for Epurair Inc., "Magnum" for Magnum Pharmaceutics Inc., "Noveko Algérie" for SARL Noveko Algérie, "Noveko Beijing" for Noveko (Beijing) Hi-Tech Development Limited, "Noveko Taiwan" for Noveko Taiwan Co., Ltd., "Noveko Trading" for Noveko Trading 2008 LLC, "Purer Life" for Purer Life Technology Co., Ltd. and "BLI" for Bolduc Leroux Inc. Also, the first quarter ended September 30, 2010 and the corresponding period ended September 30, 2009 are sometimes respectively designated by the terms "first quarter of 2011" and "first quarter of 2010", while the fiscal year ended June 30, 2010 and those ended June 30 of prior years are sometimes designated by the terms "fiscal 2010", "fiscal 2009" and so on.
Analysis of Operating Results |
First Quarter of 2011 Compared with the First Quarter of 2010
Our segmented information is reported based on the following business segments: medical equipment ("medical equipment"), sanitizers ("sanitizers"), antimicrobial surgical masks and respirators ("masks"), filtration products ("filtration") and other activities consisting primarily of the activities of the parent company, Noveko International, and of Noveko Trading ("other"). Furthermore, the results of operations of BLI have been withdrawn from continuing operations to be treated as discontinued operations in the Company's financial statements The assets and liabilities related to BLI have been reclassified as assets and liabilities held for sale. As Magnum proceeded with a voluntary assignment of its assets effective June 2, 2010, its results of operations are also treated as discontinued operations in the Company's financial statements for the periods ended prior to that date. As for the assets and liabilities related to Magnum, they no longer appear in the Company's financial statements subsequent to the voluntary assignment of its assets.
Consolidated and Segmented Revenues from Continuing Operations | |||||
Quarters Ended September 30 | |||||
2010 | 2009 | ||||
Medical equipment | $ | 2,274,980 | $ | 2,295,945 | |
Sanitizers | (127,923) | 792,758 | |||
Masks | 14,603 | 794,277 | |||
Filtration | 585,268 | 505,329 | |||
Other | - | - | |||
Total | $ | 2,746,928 | $ | 4,388,309 |
Consolidated revenues for the first quarter of 2011 decreased by $1.6 million or 37% to $2.7 million. This reduction primarily reflects the sales declines in the sanitizers and masks segments, in the amounts of $0.9 million (116%) and $0.8 million (98%), respectively, but also the major depreciation of the Euro against the Canadian dollar which adversely affected the gains posted in the medical equipment segment. The decline in the sanitizers and masks segments stemmed notably from the rapid end of the A (H1N1) influenza pandemic which subsequently had a negative impact on demand by leading to the deferral and cancellation of several orders, whereas in comparison, the prevailing pandemic had led to a strong growth in sales in these segments in the corresponding period of fiscal 2010. The financial problems encountered by some of our distributors and the delays in obtaining the required authorizations and certifications for the marketing of our products also account for our much lower-than-expected sales. Furthermore, in the sanitizers segment, credits for the return of merchandise of approximately $0.2 million, granted as part of the termination of a distribution agreement, also adversely affected revenues for the first quarter of 2011 and could not be offset by the sales achieved in both hospital settings and the retail market thanks to our recent distribution agreements. Despite these disappointing results, the award of a new European certification for our antimicrobial respirators, along with new orders and agreements for our sanitizers, enable us to believe that our marketing activities will pick up in these segments during the next quarters; however, that could take longer than expected. Sales of medical equipment remained relatively stable at $2.3 million, whereas the 20% growth in ECM's sales could not offset the reduction in Noveko Algérie's sales. In ECM's case, the increase would have been higher - at more than 40% in Euros - were it not for the significant depreciation of the Euro against the Canadian dollar. The negative impact on our revenues amounted to $0.3 million. ECM's sales growth reflects both its breakthroughs in human medicine and its ongoing penetration of the veterinary medicine market. The devaluation of the Algerian dinar against the Canadian dollar, also adversely affected our medical equipment sales, although to a lesser extent. Finally, revenues from filtration products posted a $0.1 million or 16% increase, reflecting the growth in sales of filtration products recorded by our subsidiaries Epurair and Noveko Taiwan.
The operating profit margin for the first quarter of 2011 was 44.5%, compared with 47.7% for the first quarter of 2010. This decline notably reflects the weighting of certain fixed costs, including logistics services expenses in a context of lower sales in the masks and sanitizers segments, as well as increase in the provision for obsolete inventories.
Selling and administrative expenses decreased by $0.4 million or 11% to $3.2 million. This reduction partly reflects the cost control measures implemented.
Stock-based compensation charge for the first quarter of 2011, which is without impact on the Company's cash balance, decreased to $0.2 million, down by $0.9 million from the first quarter of 2010. This reduction is explained by the lower number of options granted in the past quarters and the gradual recognition of the compensation charge.
Research and development expenses increased by $0.1 million over the first quarter of 2010 to $0.3 million, due primarily to the development costs associated with the masks, filters and medical equipment segments.
Earnings (Loss) before Amortization, Financial Expenses, Income Taxes, Other Items and Discontinued Operations |
|||||
Quarters Ended September 30 | |||||
2010 | 2009 | ||||
Medical equipment | $ | 443,109 | $ | 117,486 | |
Sanitizers | (781,564) | (257,676) | |||
Masks | (205,572) | 39,414 | |||
Filtration | (595,965) | (600,354) | |||
Other | (1,294,107) | (2,062,855) | |||
Total | $ | (2,434,099) | $ | (2,763,985) |
Considering mainly the aforementioned factors, the loss before amortization, financial expenses, income taxes, other items and discontinued operations was reduced to $2.4 million for the first quarter of 2011, down by $0.3 million or 12% from the corresponding quarter of the previous year, despite the revenue decrease during the period. Segmented changes are due primarily to the following factors:
- a significant decline in the stock-based compensation charge of the parent company Noveko International (in the "other" segment) and of the other business segments, for the previously mentioned reasons;
- a $0.3 million improvement in the earnings before amortization, financial expenses and income taxes achieved by the medical equipment segment, thanks mainly to ECM's contribution and the improvement in its profitability and that of Noveko Algérie;
- a $0.2 million increase in the loss incurred by the masks segment reflecting, in a context of lower sales than in the same quarter of the previous year, an increase in development expenses and fixed costs, despite the decline in stock-based compensation charge; and
- a $0.5 million increase in the loss incurred by the sanitizers segment, primarily attributable to the reduction in the profit margin in a context of negative sales.
Amortization expenses increased by $0.3 million in the first quarter of 2011. This increase is primarily attributable to the amortization of the expenses related to the development of the Exago™ since its launch in the veterinary market and the increase in amortization expenses related to intangible assets, including our new integrated management system, the implementation of which was completed during the third quarter of fiscal 2010.
Financial expenses less investment revenues represented a negative amount of $0.4 million for the first quarter of 2011, compared with a positive amount of $0.3 million for the first quarter of 2010. This $0.7 million difference is due primarily to the recognition of a foreign exchange gain of $0.4 million for the first quarter of 2011, whereas a foreign exchange loss of $0.3 million had been recognized during the corresponding period of the previous year, and, to a lesser extent, the reduction in interest on the convertible debentures.
The reader is reminded that subsequent to a preliminary assessment, a goodwill impairment charge of $2.4 million related to the sanitizers segment was recognized in the consolidated statement of operations for the fourth quarter of fiscal 2010. This impairment, which is without impact on the Company's cash balance, reflects the market conditions affecting this segment, primarily the slowdown in the marketing of the sanitizers following the rapid end of the A (H1N1) influenza pandemic and the termination of a significant distribution agreement. With the assistance of an independent valuator, the Company is currently carrying out this comprehensive assessment including a detailed calculation of the estimated fair values of recorded and unrecorded intangible assets. The final impairment calculation is expected to be completed during fiscal 2011 and the resulting final adjustments would result in a non-cash adjustment to the consolidated statement of operations.
Net Earnings (Loss) from Continuing Operations | |||||
Quarters Ended September 30 | |||||
2010 | 2009 | ||||
Medical equipment | $ | 175,839 | $ | (68,493) | |
Sanitizers | (912,529) | (282,947) | |||
Masks | (163,723) | (8,936) | |||
Filtration | (609,843) | (736,196) | |||
Other | (1,328,049) | (2,406,589) | |||
Total | $ | (2,838,305) | $ | (3,503,161) |
Considering mainly the aforementioned factors, the net loss from continuing operations was reduced by $0.7 million to $2.8 million despite the decline in sales.
A loss of $87,584 from discontinued operations (BLI) was recognized, compared with a loss of $0.6 million for the corresponding period of the previous year. In this regard, discontinued operations include the accounts of both BLI and Magnum for the first quarter of 2010, but solely the accounts of BLI for the first quarter of 2011. Consequently, the first-quarter net loss amounted to $2.9 million, compared with $4.1 million for the corresponding quarter of the previous year, a reduction of $1.2 million.
Considering a net change in unrealized gains on translation of the financial statements of self-sustaining foreign operations of $0.3 million for the quarter, compared with a net change in realized losses of $0.3 million for the corresponding quarter of the previous year, a net loss of $2.7 million represented comprehensive income for the first quarter of 2011, compared with a net loss of $4.4 million for the corresponding quarter of the previous year.
The loss from continuing operations and the net loss per Class A share (basic and diluted) both amounted to $0.04 for the quarter, on a weighted average of 76,006,347 outstanding shares, compared with a loss from continuing operations and a net loss of $0.05 and $0.06 per share, respectively, on a weighted average of 67,276,665 shares for the corresponding period of the previous year. The increased weighted average number of outstanding shares is due to the issue of Class A shares related to the private placement closed in October 2009 and to the first closing of the 2010 private placement, as well as the issue of Class A shares subsequent to the exercise of stock options and the conversion right of convertible debentures.
Principal Quarterly Financial Information (in thousands of $, except per-share amounts) (unaudited) |
||||
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
|
Fiscal 2011 | ||||
Revenues | 2,747 | |||
Loss from continuing operations | (2,838) | |||
Comprehensive loss | (2,654) | |||
Loss per Class A share from continuing operations (basic and diluted) |
(0.04) | |||
Fiscal 2010 | ||||
Revenues | 4,388 | 4,892 | 2,935 | 2,896 |
Loss from continuing operations | (3,503) | (4,562) | (4,560) | (7,737) |
Comprehensive loss | (4,417) | (5,449) | (5,859) | (9,612) |
Loss per Class A share from continuing operations (basic and diluted) | (0.05) | (0.06) | (0.07) | (0.10) |
Fiscal 2009 | ||||
Revenues | 2,014 | 3,687 | 2,454 | 3,257 |
Loss from continuing operations | (6,057) | (6,526) | (5,216) | (10,003) |
Comprehensive loss | (6,957) | (5,506) | (7,062) | (12,865) |
Loss per Class A share from continuing operations (basic and diluted) |
(0.09) | (0.10) | (0.08) | (0.15) |
Balance Sheet Analysis |
As at September 30, 2010, total assets amounted to $45.9 million, up by $3.2 million over June 30, 2010. Working capital stood at $14.5 million for a current ratio of 2.9:1, compared with $12.8 million and a 3.1:1 ratio as at June 30, 2010. Shareholders' equity totalled $35.1 million as at September 30, 2010, compared with $33.1 million as at June 30, 2010. Total interest-bearing debt (bank loans, current portion of long-term debt and long-term debt) amounted to $1.4 million as at September 30, 2010, down by $42,878 from June 30, 2010.
Quarter Highlights and Subsequent Events |
- Financing: On September 23, 2010, announcement of a private placement of Class A shares, for a minimum amount of $4 million and a maximum amount of $10 million, at a price of $0.60 per share. First closing of $4,440,000 on September 30, 2010. Pursuant to this first closing, the Caisse de dépôt et placement du Québec acquired 4,000,000 Class A shares of the Company, increasing its shareholding to a total of 12% of our shares then outstanding. Second closing of $900,000 on October 29, 2010. The private placement has been extended to December 10, 2010.
- Appointment of Mr. Jean Brassard as director of the Company effective November 11, 2010: Mr. Brassard, who now serves as a corporate director, is one of the pioneers of CGI Group Inc. ("CGI"). He joined CGI in 1978 as Vice-Chairman of the Board and Vice-President of the Montreal office, at a time when the firm had less than a dozen consultants. He climbed the ladder until July 1996, when he was appointed as President and Chief Operating Officer, a position he held until October 2000. He remained Vice-Chairman of the Board at CGI until December 2007 and still serves on the Board as director and member of the Corporate Governance Committee. Before joining CGI's ranks, he worked for about 10 years in the Quebec civil service where he held various positions, notably as senior analyst at the Treasury Board, division head at the Civil Service Department and director of the Directorate of Organization and Methods at the Department of Justice.
- Regrouping of our head office and Noveko planned for December 2010.
- Epurair's filtration activities will move into larger premises located in Boucherville, Québec.
Air Filtration Products
We are in active talks with several parties interested in our filtration solutions and we are confident that the marketing of our air filters in the buildings and transportation segment will accelerate during fiscal 2011.
Antimicrobial Masks and Respirators Markets
We are currently finalizing the tests in order to shortly submit a new application for certification to the US National Institute for Occupational Safety and Health ("NIOSH") with respect to a new respirator model whose design and particle filtration features are identical to those of the antimicrobial respirators covered by our first application, but without any antimicrobial agent. Through this process, we hope to show buyers seeking NIOSH recognition in their purchasing decision that our respirators - with or without antimicrobial agents - meet the NIOSH's filtration criteria, even though their marketing in the United States remains subject to obtaining FDA certification. Concurrently with this process, we are pursuing the tests and obtaining the required performance data to draw up the file to support a future 510(k) submission with the US Food and Drug Administration ("FDA"). In line with our strategy of teaming up with partners in order to stimulate the development and marketing of our technologies, we are looking into various partnership opportunities.
Sanitizers
Although we look forward to a certain resumption of our marketing activities in this segment, that could take longer than anticipated. The agreements and orders referred to below attest to renewed interest in our sanitizers:
- In September 2010, signature of a distribution agreement with Benjamin News Inc. for the sale and promotion of our hand sanitizers in Quebec, New Brunswick and Eastern Ontario.
- Major order, awarded in October 2010, worth a total of $650,000 for our hand sanitizers. The 125 ml formats of our line of hand sanitizers will be offered to the customers of the some 250 IGA grocery stores in Quebec as part of a promotional campaign to be held in January 2011.
Medical Equipment
- August 2010: exclusive distribution agreement with Ningbo Xingaoyi Magnetism Co., Ltd for the purchase of Imagyne™ scanners for use in human medicine in China, all for a minimum value of 5.7 million Euros, of which 900,000 Euros the first year.
- Major breakthroughs in commercializing the Exago™ ultrasound scanner in the equine market with the signature of contracts with key players in the veterinary medicine field.
- Launch of the Exago™ in the human medicine market: ECM was just recently authorized to affix CE Marking on the Exago™ and has started its first deliveries targeted to human medicine.
Profile |
Noveko International Inc. offers innovative solutions in the environmental and medical fields worldwide. Through its subsidiaries, the Company specializes primarily in the following business segments: the development, manufacturing and marketing of derivative products from its patented antimicrobial filtration technologies, mainly air filters, surgical masks and respirators, as well as other products with antibacterial properties such as hand sanitizers - and the development, manufacturing and marketing of medical equipment, primarily portable real-time ultrasound scanners for use in human and veterinary medicine.
Certain statements set forth in this press release constitute forward-looking statements. In some cases, these statements are identified by the use of terms such as "may", "could", "might", "intend", "should", "expect", "project", "plan", "believe", "estimate" or other comparable variants. These statements are based on the information available at the time they are written, on assumptions made by management and on the expectations of management, acting in good faith, regarding future events, including those relating to economic conditions, fluctuations in exchange rates and operating expenses, and the absence of unusual events entailing supplementary expenditures. Although management considers these assumptions and expectations reasonable based on the information available at the time they are written, they could prove inaccurate. Forward-looking statements are also subject, by their very nature, to known and unknown risks and uncertainties such as those related to the industry, acquisitions, labor relations, credit, key officers, supply and product liability. The actual results of Noveko International Inc. could differ materially from those indicated or underlying these forward-looking statements. The reader is therefore recommended not to unduly rely on these forward-looking statements. Forward-looking statements do not reflect the potential impact of special items, any business combination or any other transaction that may be announced or occur subsequent to the date hereof. Unless otherwise required under securities laws, the Company does not intend and undertakes no obligation to update or revise the forward-looking statements.
The Management's Report, consolidated financial statements and accompanying notes for the quarter ended September 30, 2010 will be filed on SEDAR (www.sedar.com) and available on the Company's website (www.noveko.com). |
Noveko International Inc.
Consolidated balance sheets
As at September 30, 2010 and June 30, 2010 | |||||||||
September 30 2010 |
June 30 2010 |
||||||||
(unaudited) | (audited) | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 3,382,093 | $ | 639,543 | |||||
Deposit in trust | 58,932 | 87,787 | |||||||
Short-term investments | 2,646,050 | 2,145,631 | |||||||
Accounts receivable | 2,936,087 | 3,026,436 | |||||||
Inventories | 11,170,257 | 11,259,316 | |||||||
Prepaid expenses | 595,889 | 627,644 | |||||||
Current portion of assets held for sale | 1,263,337 | 1,231,858 | |||||||
22,052,645 | 19,018,215 | ||||||||
Fixed assets | 1,633,079 | 1,592,999 | |||||||
Intangible assets | 7,770,253 | 7,782,150 | |||||||
Other assets | 893,970 | 945,653 | |||||||
Future income taxes | 19,424 | 19,424 | |||||||
Goodwill | 7,640,513 | 7,420,012 | |||||||
Non-current portion of assets held for sale | 5,899,858 | 5,896,657 | |||||||
$ | 45,909,742 | $ | 42,675,110 | ||||||
Liabilities and shareholders' equity | |||||||||
Current liabilities: | |||||||||
Bank loans | 182,078 | 167,011 | |||||||
Accounts payable and accrued liabilities | 4,860,560 | 3,801,984 | |||||||
Current portion of long-term debt | 484,562 | 475,432 | |||||||
Current portion of liabilities held for sale | 1,991,259 | 1,780,589 | |||||||
7,518,459 | 6,225,016 | ||||||||
Long-term debt | 736,572 | 803,647 | |||||||
Future income taxes | 872,194 | 830,291 | |||||||
Non-current portion of liabilities held for sales | 1,697,406 | 1,753,146 | |||||||
Shareholders' equity: | |||||||||
Capital stock | 100,060,532 | 95,620,532 | |||||||
Warrants | 3,348,000 | 3,348,000 | |||||||
Contributed surplus | 23,116,464 | 22,874,810 | |||||||
Accumulated other comprehensive loss | (1,013,936) | (1,285,522) | |||||||
Deficit | (90,425,949) | (87,494,810) | |||||||
35,085,111 | 33,063,010 | ||||||||
$ | 45,909,742 | $ | 42,675,110 |
Noveko International Inc.
Consolidated statements of operations
Three-month periods ended September 30, 2010 and 2009 (unaudited) | |||||
September 30 2010 |
September 30 2009 |
||||
Revenues | $ | 2,746,928 | $ | 4,388,309 | |
Cost of sales | 1,524,118 | 2,293,210 | |||
1,222,810 | 2,095,099 | ||||
Operating expenses: | |||||
Administrative and selling expenses | 3,157,270 | 3,545,067 | |||
Stock-based compensation | 241,690 | 1,179,524 | |||
Research and development | 335,942 | 243,070 | |||
Research and development tax credits | (77,993) | (108,577) | |||
3,656,909 | 4,859,084 | ||||
Loss before amortization, financial fees, income taxes and discontinued operations |
(2,434,099) | (2,763,985) | |||
Amortization | 704,246 | 420,692 | |||
Financial expenses less investment revenues | (346,856) | 340,518 | |||
357,390 | 761,210 | ||||
Loss before income taxes | (2,791,489) | (3,525,195) | |||
Income taxes: | |||||
Current | 43,030 | 52,930 | |||
Future | 3,786 | (74,964) | |||
46,816 | (22,034) | ||||
Net loss from continuing operations | (2,838,305) | (3,503,161) | |||
Net loss from discontinued operations | (87,584) | (636,171) | |||
Net loss | $ | (2,925,889) | $ | (4,139,332) | |
Basic and diluted loss per share: | |||||
From continuing operations | $ | (0.04) | $ | (0.05) | |
From discontinued operations | $ | (0.00) | $ | (0.01) | |
Net loss | $ | (0.04) | $ | (0.06) | |
Weighted average number of outstanding shares, basic and diluted |
76,006,347 | 67,276,665 |
Noveko International Inc.
Consolidated statements of comprehensive loss
Three-month periods ended September 30, 2010 and 2009 (unaudited) |
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September 30 2010 |
September 30 2009 |
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Net loss | $ | (2,925,889) | $ | (4,139,332) |
Other comprehensive income, net of income taxes: | ||||
Change in unrealized gains (losses) on translation of financial statements of self-sustaining foreign operations |
271,586 | (277,241) | ||
Comprehensive loss | $ | (2,654,303) | $ | (4,416,573) |
Noveko International Inc.
Consolidated statements of deficit and contributed surplus
Three-month periods ended September 30, 2010 and 2009 (unaudited) |
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September 30 2010 |
September 30 2009 |
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DEFICIT | ||||
Deficit, beginning of period | $ | (87,494,810) | $ | (61,205,942) |
Net loss | (2,925,889) | (4,139,332) | ||
Share issuance fees | (5,250) | - | ||
Deficit, end of period | $ | (90,425,949) | $ | (65,345,274) |
CONTRIBUTED SURPLUS | ||||
Contributed surplus, beginning of period | $ | 22,874,810 | $ | 18,718,376 |
Fair value of stock options granted | 241,654 | 1,251,305 | ||
Fair value of stock options exercised | - | (50,832) | ||
Contributed surplus, end of period | $ | 23,116,464 | $ | 19,918,849 |
Noveko International Inc.
Consolidated statements of cash flows
Three-month periods ended September 30, 2010 and 2009 (unaudited) |
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September 30 2010 |
September 30 2009 |
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Cash flows from operating activities: | ||||||
Net loss | $ | (2,925,889) | $ | (4,139,332) | ||
Adjustments for: | ||||||
Loss from discontinued operations | 87,584 | 636,171 | ||||
Future income taxes | 3,786 | (74,964) | ||||
Accreted interest on secured convertible debentures | - | 55,421 | ||||
Stock-based compensation | 241,690 | 1,179,524 | ||||
Loss on disposal of fixed assets | 723 | 7,283 | ||||
Amortization | 704,246 | 420,692 | ||||
Loss on fair value of short-term investments | - | 11,676 | ||||
Foreign exchange gain | (335) | (854) | ||||
Adjustments related to discontinued operations | (47,063) | 250,359 | ||||
(1,935,258) | (1,654,024) | |||||
Net change in non-cash working capital | 1,131,754 | (402,327) | ||||
(803,504) | (2,056,351) | |||||
Cash flows from financing activities: | |
|
|
|||
Net changes in bank loan | 2,626 | - | ||||
Repayment of long-term debt | (97,595) | (178,646) | ||||
Interest paid on secured convertible debentures | - | (33,123) | ||||
Proceeds from Class A shares and warrants issued | 4,440,000 | 72,498 | ||||
Class A shares issue expenses | (5,250) | - | ||||
Cash flows related to discontinued operations | 67,460 | (83,102) | ||||
4,407,241 | (222,373) | |||||
Cash flows from investing activities: | ||||||
Acquisition of short-term investments | (1,590,000) | - | ||||
Proceeds from disposal of short-term investments | 1,090,000 | 2,634,425 | ||||
Acquisition of fixed assets | (135,870) | (50,241) | ||||
Proceeds from disposal of fixed assets | - | 12,166 | ||||
Acquisition of intangible assets | (141,759) | (37,778) | ||||
Acquisition of other assets | - | 4,615 | ||||
Deposit in trust | 287 | 3,980 | ||||
|
Deferred development costs, net of related research tax credits received |
(87,165) | (83,866) | |||
Cash flows related to discontinued operations | (3,200) | |
(90,000) | |||
(867,707) | 2,393,301 | |||||
Foreign exchange gain (loss) on cash in foreign currencies | 6,520 | (50,395) | ||||
Increase in cash and cash equivalents | |
2,742,550 | |
64,182 | ||
Cash and cash equivalents, beginning of period | 639,543 | |
937,319 | |||
Cash and cash equivalents, end of period | $ | 3,382,093 | $ | 1,001,501 |
Cash flows related to continuing operating activities include interest paid of $46,626 ($71,273 as at September 30, 2009)
and income taxes paid of $15,586 (received for $265,902 as at September 30, 2009).
For further information:
Chantal Vennat, Director,
Investor Relations and Corporate Communications
Noveko International Inc.
Tel: (514) 875-0606
http://www.noveko.com
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