VANCOUVER, British Columbia, March 01, 2019 (GLOBE NEWSWIRE) -- Novoheart Holdings Inc. (“Novoheart” or the “Company”) reports financial results for the three and six months ended December 31, 2018. Amounts, unless specified otherwise, are expressed in Canadian dollars and are in accordance with International Financial Reporting Standards (IFRS).
Q2 2019 Highlights:
- Entered into a multi-phase partnership with another top-15 Pharmaceutical Company (the “Global Pharma Partner”) to develop high-throughput contractility assays
- Entered into a third project with Pfizer Inc. (“Pfizer”) extending disease modeling work on Friedreich’s Ataxia
- Published a research paper with Pfizer on the predictive capabilities of the MyHeart™ Platform
- Appointed Chief Operating Officer as the Interim Chief Financial Officer and Corporate Secretary
Financial Results for the Second Quarter of 2019
The Company recorded net loss of $1,945,459 (loss per share of $0.02) for the three months ended December 31, 2018 compared to a net loss of $1,660,675 (loss per share of $0.02) for the three months ended December 31, 2017. On a year-to-date basis, the Company recorded a net loss of $3,895,260(loss per share of $0.04) for the six months ended December 31, 2018 compared to a net loss of $7,933,244 (loss per share of $0.15) for the six months ended December 31, 2017. The decrease in the net loss on a year-to-date basis was due primarily to the completion of the reverse takeover transaction that occurred in Q1 2018, for which the Company incurred a non-cash loss on completion of reverse takeover of $5,213,597. The decrease is offset by the increase in operating expenses including costs in marketing, share-based compensation and research and development,compared to the six months ended December 31, 2017.
For the second quarter of 2019, the Company recorded revenue of $5,255 and cost of sales of $1,744, achieving a gross margin of 67%. The revenue was from a contract with the Global Pharma Partner. The contract with the Global Pharma Partner requires the Company to design and fabricate reliable multi-well plates for high-throughput generation, culture and contractility measurements of miniature engineered human cardiac tissue strips. Services commenced in December 2018.
Operating expenses for the second quarter of 2019 was $1,999,010 compared to the operating expenses of $1,737,289 for the second quarter of 2018. Operating expenses for the six months ended December 31, 2018 and 2017 were $3,974,694 and $2,829,756, respectively. The increase in operating expenses is primarily due to the increase in marketing expenses, shared-based compensation expenses and research and development expenses. The increase in marketing expenses is primarily due to expansion of the commercialization of its MyHeartTM platform, along with the hiring of the Senior Vice President commercial development in August 2018 to lead the effort. For share-based compensation expenses, such expenses were only incurred upon the Company being listed on September 27, 2017. The increase in research and development expenses is primarily due to the expansion of Novoheart’s scientific team resulting in an increase in personnel costs, the completion of the ITF project and the commencement of a sponsored research agreement signed with the Regents of the University of California, Irvine Campus.
Liquidity and Outstanding Share Capital
As at December 31, 2018, the Company had cash of $666,494. From the service agreement with XT, the Company received proceeds of $1,1811,680 in Q2 2019 and received the remaining balance of $452,920 in February 2019. As at March 1, 2019, there were 94,634,025 common shares issued and outstanding, and 5,018,555 common shares issuable upon the exercise of outstanding stock options (of which none are exercisable) at an exercise price ranging from $0.32 to $0.50 per share and 1,183,000 of the issuance of vested restricted share units. The Company also has 972,037 purchase warrants outstanding with an exercise price of C$0.50, expiring in September 2019.
Results of Annual General Meeting
Novoheart is pleased to announce the results of its annual general meeting of shareholders held on February 11, 2019. Shareholders elected six directors to the Company’s board, being Dr. Ronald Li, Dr. Camie Chan, Victor Chang, Ricky Chiu, Allen Ma and James Topham.
The shareholders also approved all other matters proposed, including the re-appointment of KPMG LLP, Chartered Accountants as auditors of the Company for the ensuing year and the re-approval of the Company’s stock option plan. All share compensation arrangements of the Company, including the RSU Plan, will not exceed 10% of the issued and outstanding Common Shares.
ABOUT NOVOHEART HOLDINGS INC.
Novoheart is a global stem cell biotechnology company dedicated to human heart engineering with offices and laboratories in the United States, Canada and Hong Kong. Novoheart’s scientific team has pioneered a range of bioengineering technologies collectively known as the MyHeartTM platform, including the world’s first human mini-heart “novoHeartTM” (otherwise known as a “human heart-in-a-jar”) that is fully capable of pumping and ejecting fluid. Novoheart believes that its proprietary platform uniquely positions the Company to enter into commercial partnerships with leading pharmaceuticals and research institutions to deliver pre-clinical cardiotoxicity screening and to develop custom-tailored engineered heart constructs for disease modeling and drug discovery. Novoheart also believes that the MyHeartTM platform is well-positioned for the potential development of cell-based cardiac regenerative therapies with superior safety and efficacy.
Common shares of Novoheart is traded on the TSX Venture Exchange under the symbol “NVH”.
For further information please contact:
Novoheart Holdings Inc.
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
V6C 2V6
Ronald Li
Chief Executive Officer
info@novoheart.com
Cautionary Note Regarding Forward-Looking Statements
Information set forth in this news release may involve forward-looking statements under applicable securities laws. Forward-looking statements are statements that relate to future, not past, events. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions. All statements, other than statements of historical fact, included herein including, without limitation; statements about the Company’s future plans, its goals and expectations, and the potential applications its MyHeartTM platform are forward-looking statements. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the risks identified in the management discussion and analysis section of Novoheart Holdings Inc.’s interim and most recent annual financial statement or other reports and filings with the TSX Venture Exchange and applicable Canadian securities regulators. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the respective companies undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements.
NOVOHEART HOLDINGS INC.
(Formerly Novoheart Holdings Limited)
Condensed Consolidated Interim Statement of Financial Position (unaudited)
(Expressed in Canadian dollars)
| December 31, 2018 | June 30, 2018 | ||||||
| ASSETS | |||||||
| Current | |||||||
| Cash and cash equivalents | $ | 666,494 | $ | 1,595,094 | |||
| Accounts and other receivables | 538,818 | 615,332 | |||||
| Prepaid expenses and deposits | 281,177 | 312,161 | |||||
| 1,486,489 | 2,522,587 | ||||||
| Property and equipment, net | 1,081,384 | 1,245,981 | |||||
| Intangible assets, net | 246,815 | 277,948 | |||||
| $ | 2,814,688 | $ | 4,046,516 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
| Current | |||||||
| Accounts payable and accrued liabilities | $ | 1,272,828 | $ | 1,357,713 | |||
| Contract liabilities | 1,811,680 | - | |||||
| Due to related parties | 41,180 | 60,684 | |||||
| 3,125,688 | 1,418,397 | ||||||
| Deferred government grants | 31,976 | 40,648 | |||||
| Long-term license payable | 81,003 | 75,424 | |||||
| 3,238,667 | 1,534,469 | ||||||
| Shareholders' Equity | |||||||
| Share capital | 17,426,693 | 17,426,693 | |||||
| Contributed surplus | 2,411,981 | 1,493,175 | |||||
| Accumulated other comprehensive income | 343,689 | 303,261 | |||||
| Accumulated deficit | (20,606,342 | ) | (16,711,082 | ) | |||
| (423,979 | ) | 2,512,047 | |||||
| $ | 2,814,688 | $ | 4,046,516 | ||||
NOVOHEART HOLDINGS INC.
(Formerly Novoheart Holdings Limited)
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
(unaudited)
(Expressed in Canadian dollars, except number of common shares)
| Three months ended | Six months ended | ||||||||||||
| December 31, 2018 | December 31, 2017 | December 31, 2018 | December 31, 2017 | ||||||||||
| Revenue | $ | 5,255 | - | $ | 5,255 | - | |||||||
| Cost of sales | 1,744 | - | 1,744 | - | |||||||||
| 3,511 | - | 3,511 | - | ||||||||||
| OPERATING EXPENSES | |||||||||||||
| Research and development | $ | 575,277 | $ | 427,475 | $ | 935,554 | $ | 691,135 | |||||
| Intellectual property and patent | 27,240 | 103,781 | 68,809 | 361,339 | |||||||||
| General and administrative | 734,200 | 842,718 | 1,281,404 | 1,382,112 | |||||||||
| Marketing | 199,428 | 13,015 | 439,893 | 13,015 | |||||||||
| Share-based compensation | 295,483 | 295,500 | 918,806 | 300,222 | |||||||||
| Depreciation and amortization | 167,382 | 54,800 | 331,228 | 72,933 | |||||||||
| 1,999,010 | 1,737,289 | 3,974,694 | 2,820,756 | ||||||||||
| LOSS FROM OPERATIONS | (1,995,499 | ) | (1,737,289 | ) | (3,971,183 | ) | (2,820,756 | ) | |||||
| Government grants | 49,469 | 16,310 | 73,338 | 21,687 | |||||||||
| Other (loss) / income | - | 53,856 | (344 | ) | 110,665 | ||||||||
| Interest income / (finance expense) | 101 | (1,263 | ) | 1,798 | (1,768 | ) | |||||||
| Foreign exchange gain / (loss) | 470 | 7,711 | 1,131 | (29,475 | ) | ||||||||
| Non-cash loss on completion of reverse takeover | - | - | - | (5,213,597 | ) | ||||||||
| 50,040 | 76,614 | 75,923 | (5,112,488 | ) | |||||||||
| NET LOSS FOR THE PERIOD | $ | (1,945,459 | ) | $ | (1,660,675 | ) | $ | (3,895,260 | ) | $ | (7,933,244 | ) | |
| OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||
| Foreign currency translation adjustment | 12,701 | (17,215 | ) | 40,428 | (58,041 | ) | |||||||
| COMPREHENSIVE LOSS FOR THE PERIOD | $ | (1,932,758 | ) | $ | (1,677,890 | ) | $ | (3,854,832 | ) | $ | (7,991,285 | ) | |
| Loss per share – Basic and Diluted | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.15 | ) | |
| Weighted average number of shares outstanding – basic and diluted | 93,462,025 | 93,462,025 | 93,462,025 | 52,110,915 | |||||||||
NOVOHEART HOLDINGS INC.
(Formerly Novoheart Holdings Limited)
Condensed Consolidated Interim Statements of Cash Flow (unaudited)
(Expressed in Canadian dollars)
| For the six months ended | December 31, 2018 | December 31, 2017 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss for the period | $ | (3,895,260 | ) | $ | (7,933,244 | ) | ||
| Items not affecting cash: | ||||||||
| Non-cash loss on completion of reverse takeover | - | 5,213,597 | ||||||
| Share-based compensation | 918,806 | 300,222 | ||||||
| Depreciation and amortization | 331,228 | 72,933 | ||||||
| (2,645,226 | ) | (2,346,492 | ) | |||||
| Changes in non-cash working capital items: | ||||||||
| Increase/(decrease) in accounts and other receivables | 112,399 | (12,817 | ) | |||||
| Decrease/(increase) in prepaid expenses | 64,004 | (321,664 | ) | |||||
| Decrease / (increase) in accounts payable and accrued liabilities | (153,606 | ) | 599,886 | |||||
| Decrease in due to related parties | (31,037 | ) | (11,686 | ) | ||||
| Increase in contract liabilities | 1,755,520 | - | ||||||
| Decrease in deferred government grants | (11,241 | ) | (10,830 | ) | ||||
| 1,621,318 | 242,889 | |||||||
| Net cash used in operating activities | (909,187 | ) | (2,103,603 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Acquisition of equipment and payment of leasehold improvements | (34,341 | ) | (42,428 | ) | ||||
| Prepayment for equipment | - | (1,213,048 | ) | |||||
| Net cash used in investing activities | (34,341 | ) | (1,255,476 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from share issuance, net | - | 6,663,982 | ||||||
| Cash acquired in RTO | - | 112,662 | ||||||
| Net cash provided by financing activities | - | 6,776,644 | ||||||
| Change in cash during the period | (943,528 | ) | 3,417,565 | |||||
| Effect of exchange rate changes on cash held in a foreign currency | 14,928 | (13,387 | ) | |||||
| Cash and cash equivalents, beginning of period | 1,595,094 | 1,319,748 | ||||||
| Cash and cash equivalents, end of period | $ | 666,494 | $ | 4,723,926 | ||||