RNS Number:8655H
CardioMag Imaging, Inc.
21 August 2006
FOR IMMEDIATE RELEASE 21 August 2006
CardioMag Imaging, Inc. ('CMI' or 'the Company')
Interim results for the 6 months ended 30 June 2006
CardioMag Imaging, Inc. (AIM: CMI/L), the developer of a new non-invasive heart
function visualization system, called a Magnetocardiograph ("MCG"), for use by
the medical and cardiology communities, announces its interim results for the
six months ended 30 June 2006.
HIGHLIGHTS
Financials
* Net loss of $2.2m
* Cash used by operations of $2.6m
Operational
*FDA approval for ischemia detection on course
*New Chinese distributors being evaluated
*Excellent interaction with clinical physicians continues
*Establishment of First Cardiac Wellness Screening Centre on track
For further details, please contact:
CardioMag Imaging, Inc. Buchanan Communications - UK
Carl H. Rosner, Executive Chairman Lisa Baderoon
Tel: +1 - 518-381-1000, Ext. 4341 Tel: +44-207-4665000
Eric Burns
Company website - www.cardiomag.com Tel: +-44-1943-833990
CardioMag ImagingTM, Inc., is a public company formed in 1999 to transition
results from over 40 years of worldwide MCG research and development based upon
SQUID (Superconducting Quantum Interference Device) sensors into clinically
useful, non-invasive cardiac diagnostic products. The Company is focused upon
collecting clinical data to position itself to provide safe, lifesaving medical
equipment, leading to cost containment solutions to the cardiac health care
community, specifically by designing, manufacturing and marketing innovative
medical diagnostic devices for early detection and monitoring of heart disease.
As of December 2005, the Company is listed on the AIM Market of the London Stock
Exchange under the symbol CMI/L.
Safe Harbor Statement: The statements presented in this press release which are
not historical facts are forward looking statements which involve various
important assumptions, risks, uncertainties and other factors set forth here,
including but not limited to, market acceptance by healthcare providers,
obtaining FDA approval for future claims, insurance reimbursement policies, and
growth of the market.
CardioMag Inc. ("CMI" or the "Company")
Interim Results for the 6 months ended 30 June 2006
Overview
The major focus for the period ended 30 June 2006 was in marketing and promotion
as well as in manufacturing systems in preparation for deliveries in the second
half of 2006. We have also implemented plans to expand our facility and
commenced the hiring of additional marketing and technical personnel.
As was previously reported, we terminated a distribution agreement with our
Chinese distributor and this has, inevitably, delayed the achievement of sales
into China. However, we are in discussions with other agents and are confident
that alternative distribution arrangements currently under consideration will
lead to sales into China in the second half of the year.
We have made important progress in communications with the FDA regarding
approval for our MagnetoCardioGraphy (MCG) system for the detection of
myocardial ischemia. Once formally obtained, this will allow us to promote the
MCG system as clinical diagnostic medical equipment for such use.
Financial results
Our results for the first half of the year 2006 reflect the delay in achieving
sales to China and therefore show no revenues from the sale of any diagnostic
systems. We have seen an increase in our operating expenses to $2.2 million (6
months ended 30 June 2005: $1.8 million), reflecting the investment that we have
made in marketing resource, people, advertising, R&D and the additional costs of
being a public company. As a result we are reporting a net loss of $2.2 million
(2005: $1.4 million).
Cash outflow from operations was $2.6 million (2005: $1.1 million), representing
operating expenses and investment in fixed assets and building up of inventories
for orders expected later in the year.
Our balance sheet position at the period end showed net assets of $2.3 million
and a net cash balance of $3.0 million. During the period we also upgraded our
IT infrastructure and expanded our facilities with a net investment (after
depreciation) of $380,000.
Regulatory approvals
As stated above, we have made good progress with the FDA towards gaining
approval of our MCG System and we believe that thereafter the ability to promote
it as diagnostic medical equipment provides us with a much more powerful message
to the medical and hospital community than is possible under the current
approval gained in July 2004. We are hopeful that we can obtain this approval by
the end of the year.
Market and Sales
Following the termination of our Chinese distribution agreement, we have
implemented a different strategy for sales into China by having a consultant
identify distribution channels approved by high level government officials.
We have been pursuing interactions and collaborations with physicians at
clinical sites and are pleased to report that 4 out of 19 publications in the
field of magnetocardiography were based upon use of the CMI system.
We also have gained valuable feedback from users of our equipment which is
allowing us to implement upgrades in operating features that, we believe, can
expand the potential market.
Employees
On 30 June 2006 we had a full time staff of 27, up from 24 on 30 June 2005, and
temporary staff of 4. We do expect these numbers to increase only modestly in
the near term as we now have most of the necessary infrastructure in place to
implement our strategy.
Our Executive Vice President of Operations, Bruce Hegstad, retired on 1 July
2006 and we thank him for his contribution to the development of the Company
over the past 5 1/2 years. He has valuable knowledge of the business and our
systems and remains available to us as a consultant.
Current trading and outlook
We expect to put in place new distribution arrangements for China and are
confident of raising orders for delivery beginning in the second half of the
year.
We are increasingly convinced of the extremely important role our safe and
non-invasive cardiac diagnostic MCG tool can play in providing greatly improved
and cost-effective cardiac healthcare through the early detection of functional
abnormalities and the planned establishment of Cardiac Wellness Screening
Centres nationally, and later worldwide.
Accordingly, despite the disruption of having to put in place new distribution
arrangements for China, your Board of Directors is confident that our system is
gaining recognition in the medical community and that this will be more visible
through sales during this year and thereafter.
CardioMag Imaging, Inc.
Unaudited Balance Sheet
(in US $)
30-Jun-06 30-Jun-05 31-Dec-05
----------- ----------- -----------
ASSETS
Total Current Assets $4,687,353 $1,440,185 $8,335,716
Total Property and Equipment 682,444 360,126 382,301
Total Other Assets 161,761 137,734 150,755
----------- ----------- -----------
Total Assets $5,531,557 $1,938,045 $8,868,772
=========== =========== ===========
LIABILITIES AND CAPITAL
Total Current Liabilities 3,241,817 7,669,123 4,373,583
Total Long-Term Liabilities 6,870 8,383 6,506
----------- ----------- -----------
Total Liabilities 3,248,688 7,677,506 4,380,089
Total Capital 2,282,870 (5,739,461) 4,488,683
----------- ----------- -----------
Total Liabilities & Capital $5,531,557 $1,938,045 $8,868,772
=========== =========== ===========
CardioMag Imaging, Inc.
Unaudited Income Statement
(in US $)
6 months ended 6 months ended 12 months ended
30-Jun-06 30-Jun-05 31-Dec-05
----------- ----------- -----------
Total Revenues $819 $672,358 $793,881
Total Cost of Sales 0 155,713 172,358
----------- ----------- -----------
Gross Profit 819 516,645 621,523
----------- ----------- -----------
Operating Expenses
--------------------
Salaries Expense 679,437 699,248 1,475,082
Research & Development Expense 327,088 264,001 537,752
Consultant Fees 205,451 142,734 466,017
Directors' Fees 154,531 0 0
Rent Expense 100,418 110,276 241,698
Other Operating Expenses 781,474 543,366 816,794
----------- ----------- -----------
Total Operating Expenses 2,248,399 1,759,625 3,537,343
Interest Income 84,649 2,598 9,193
Interest Expense 48,260 204,059 447,511
----------- ----------- -----------
Net Loss $2,211,191 $1,444,441 $3,354,138
=========== =========== ===========
Loss per share
basic $0.10 $0.17 $0.16
diluted 0.10 0.15 0.15
CardioMag Imaging, Inc.
Unaudited Statement of Cash Flow
(in US $)
6 months ended 6 months ended 12 months
ended
30-Jun-06 30-Jun-05 31-Dec-05
----------- ----------- -----------
Cash Flows from operating activities
Net Income $(2,211,191) $(1,444,441) $(3,354,138)
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and Amortization 85,188 72,633 141,142
Inventory (372,714) (6,334) (74,517)
Prepaid Expenses 62,376 (27,665) (63,412)
Accounts Payable and accrued expenses (146,582) 229,786 282,106
Income Taxes Receivable 0 12,336 43,718
Other Assets 0 5,301 5,301
Accrued Payroll and related deductions (29,597) 86,770 119,023
Accrued Interest Payable 30,694 0 426,547
----------- ----------- -----------
Total Adjustments (370,635) 372,827 879,908
----------- ----------- -----------
Net Cash provided by
Operations (2,581,826) (1,071,614) (2,474,230)
----------- ----------- -----------
Cash Flows from investing
activities
Used For
Purchases of fixed assets (385,332) (64,014) (154,648)
Acquisition of Intangible
Assets (11,006) (7,576) (20,647)
----------- ----------- -----------
Net cash used in investing (396,338) (71,590) (175,295)
----------- ----------- -----------
Cash Flows from financing activities
Proceeds From
Shareholder Loan Receivable (1,612) (1,612) (3,250)
Liability under Capital Leases (3,579) (1,791) (3,668)
Issuance of Common Stock 7,000 375,000 8,002,819
Repayment of Current
Portion Long-Term Debt (1,005,000) 0 (385,000)
Issuance of Convertible
Debt-Shareholder 0 927,000 2,017,000
----------- ----------- -----------
Net cash used in financing (1,003,191) 1,298,597 9,627,901
----------- ----------- -----------
Net increase (decrease) in
cash $(3,981,355) $155,393 $6,978,376
=========== =========== ===========
Cash Balance at End of Period 3,014,662 173,033 6,996,016
Cash Balance at Beg of Period 6,996,016 17,640 17,640
----------- ----------- -----------
Net increase (decrease) in cash $(3,981,355) $155,393 $6,978,376
----------- ----------- -----------
CardioMag Imaging, Inc.
Notes to Unaudited Interim Financial Statements
For the six months ended 30 June 2006
1. Basis of Preparation
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and do not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
The interim financial information has been prepared on the basis of the
accounting policies set out in CardioMag Imaging's statutory accounts for the
year ended 31 December 2005.
Operating results for the interim six month period ended 30 June 2006 are not
necessarily indicative of results that may be expected for the year ended 31
December 2006.
2. Loss Per Share
Loss per share has been calculated by dividing the loss for the period by the
average number of shares of 21,141,059 in issue during the period versus
8,570,114 in issue June 30, 2005.
3. A copy of this report is being sent to all shareholders and further copies
are available from the Company's registered office located at 450 Duane Avenue,
Schenectady, New York, 12304, USA.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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