NSCI Nanalysis Scientific Corp

CALGARY, AB, Aug. 24, 2020 /CNW/ - Nanalysis Scientific Corp. ("the Company", TSXV:NSCI, OTCQX:NSCIF, FRA:1N1) released today its second quarter 2020 results.

OUTLOOK

Nanalysis has addressed the recent outbreak of COVID-19 by adapting numerous work policies. This has allowed Nanalysis to continue operations with minimal disruptions to our development, manufacturing, and distribution. Marketing and sales still face significant disruptions to normal operating procedures due to the restrictions of in-person meetings and border closures during the quarter. The Company has utilized government programs offered to Company's impacted by COVD-19, specifically the Canadian Emergency Wage Subsidy ("CEWS") and Canadian Emergency Business Account ("CEBA"). Nanalysis will continue to monitor results and seek government assistance where applicable.

Despite COVID-19 short-term market forces presenting challenges in the second quarter and into the latter half of 2020, Nanalysis continues to have confidence that the market for compact NMR spectrometers and related accessories and services will grow in the medium term. To date, the Company has received $2,626k pre-orders for our 100MHz product, of which $438k was reflected in unearned revenue as at June 30, 2020. The nascent nature of the Company's market opportunity coupled with the value proposition to its customers will continue to drive increased demand for compact NMR devices in growing number of research, commercial, and industrial applications. The Company is continuing to develop cutting edge new products, is working with local, national, and international partners to develop use-specific solutions in a variety of industries, and will continue to execute its acquisition strategy.

The five objectives the Company is committed to for the remainder of 2020 are: (1) release of our new 100 MHz product, (2) continued execution of our acquisition strategy, (3) continued vertical market partnering agreements, and (4) expanding investor relations activity, especially in the United States in keeping with our recent OTCQX listing (5) realization of our large balance of unearned revenue.

SECOND QUARTER HIGHLIGHTS

• Revenue for the three months ended June 30, 2020 was $1,995K as compared to $2,535K in the prior ended June 30, 2019. Nanalysis reported revenues of $1,405K, with RS2D reporting $590K for the three months ended June 30, 2020.
• Gross profit for three months ended June 30, 2020 was $1,264K (a margin of 63%) as compared to gross profit of $1767K (a margin of 70%) for 2019.
• Total comprehensive loss for the three months ended June 30, 2020 was $358K as compared to a loss of $1,177K from the comparative period ended June 30, 2019. Basic and diluted loss per share for three months ended June 30, 2020 was $0.01 as compared to a loss per share for the three months ended June 30, 2019 of $0.02.

FINANCIAL POSITION

At June 30, 2020, Nanalysis had $5,233K (December 31, 2019 - $8,534K) of working capital, including $4,805K (December 31, 2019 - $6,619k) in cash. The Company has an undrawn line of credit of $2,000K and $1,046K of available borrowing on the Western Economic Diversification Canada interest free loan. Nanalysis's business has been affected by COVID-19 and as such is eligible for a subsidy of 75% of employees' wages. During the three and six months ended June 30, 2020 the Company received $715K from the CEWS. Nanalysis will continue to monitor revenues and seek government assistance where applicable.  

OVERALL PERFORMANCE

For the six months ended June 30, 2020, the Company reported consolidated revenue of $3,520K, a decrease of $1,080K or 23% from the comparative period in 2019. Unearned revenue was $2,170K as at June 30, 2020, an increase of $1,554K from $616K as at December 31, 2019.  The increase was due to the acquisition of RS2D and the associated backlog of work that they were unable to complete in the quarter due to COVID-19 delays, couple with an increase in extended warranty sales to customers, and customer deposits on pre-orders for the 100MHz product. The decrease in revenue was partially a result from COVID-19 as local, national, and international regulations have made conducting business difficult amid 'shut down and shelter in place' orders. Nanalysis has faced delayed international shipments due to border closures, while RS2D employees in Strasbourg, France were unable service customers as all nonessential services were prohibited. Also contributing to the reduction in revenue is customers holding off on purchases and awaiting the release of the 100MHz device.

Gross profit for six months ended June 30, 2020 was $2,248K (a margin of 64%) as compared to gross profit of $3,102K (a margin of 67%) for 2019.

The Company's comprehensive loss for the six months ended June 30, 2020 was $1,290K as compared to comprehensive loss of $1,379K for the comparative period in 2019. The loss for the six months ended June 30, 2020 was due to decreased sales, increased depreciation and amortization, acquisition transaction costs, increase general and administration expense, partially offset by an increase on foreign exchange gain, finance income, other comprehensive income and deferred tax recovery. The loss for the six months ended June 30, 2019 was primarily due to $1,360K of reverse takeover transaction costs.

About Nanalysis Scientific Corp. (TSXV:NSCI, OTCQX:NSCIF, FRA:1N1)

The Company trades on the TSX Venture Exchange (TSXV) in Canada with ticker symbol 'NSCI' and over the counter in the United States under the ticker symbol 'NSCIF'.

Nanalysis business is what we term "MRI for industry": It develops and manufactures portable Nuclear Magnetic Resonance (NMR) spectrometers or analyzers for laboratory and industrial markets. The NMReady60™ was the first fully featured portable NMR spectrometer in a single compact enclosure requiring no liquid helium or any other cryogens, and the company continues to develop new products and has a strong innovation pipeline. Nanalysis began taking orders for the 100MHz device in early 2020. The Company's new device will be the most powerful non-cryogen, permanent magnet compact NMR device ever brought to market. Nanalysis devices are used by chemical professionals in many industries (oil and gas, chemical, mining, pharma, biotech, flavor and fragrances, agrochemicals, and more) as well as numerous government and university research labs around the world. The company continues to exploit new global market opportunities both independently and with partners.

In March 2020, the Company acquired all outstanding shares of RS2D, a complementary technology company based in Strasbourg France that specializes in the development of cutting-edge MR electronics.  Based on a single electronic board, RS2D has developed MR product lines in high-field ("HF") NMR and magnetic resonance imaging ("MRI") that can further advance Nanalysis' existing product line, while the new products to round out the Company's magnetic resonance technology portfolio.

Notice regarding Forward Looking Statements and Legal Disclaimer

This news release contains certain "forward-looking statements" within the meaning of such statements under applicable securities law. Forward-looking statements are frequently characterized by words such as "anticipates", "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed", "positioned" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

Neither TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

SOURCE Nanalysis Scientific Corp.