Imi Medical Innovations (AMEX:IME)
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IMI announces fiscal 2003 financial results
TORONTO, May 3 /PRNewswire-FirstCall/ -- IMI International Medical Innovations
Inc. (TSX:IMI; Amex: IME), a leader in predictive medicine, today announced
audited financial results for the fiscal year ended December 31, 2003 and
provided operational highlights for fiscal 2004 to date.
Fiscal 2003 Highlights
"Fiscal 2003 was a year of continued progress for IMI," said Dr. Brent Norton,
President and Chief Executive Officer. "We are continuing to gain global
exposure for IMI's cardiovascular and cancer franchises while building
awareness and acceptance of new approaches to predicting disease. In addition,
with our partner, McNeil Consumer Healthcare, we are transitioning to
commercialization with our lead cardiovascular product. We are also actively
negotiating licensing partnerships for the U.S. and European markets."
The company's consolidated loss for the year was $4,063,000 ($0.19 per share)
compared with $4,018,000 ($0.20 per share) for the year ended December 31,
2002. At year end, the company had cash, cash equivalents and short-term
investments totaling $6,697,000 ($10,112,000 as at December 31, 2002).
Based on historic burn rates and the expectation that revenues from partnering
activities and product sales will begin in 2004, management believes the
company's cash resources, together with investment tax credits receivable, are
sufficient to meet its current operating and capital requirements.
Recent Operational Highlights
On April 13, 2004 the company announced that Ron Henriksen has agreed to join
IMI's Board of Directors, pending shareholder approval at the upcoming annual
shareholders meeting to be held on June 16, 2004. In the interim, IMI has
engaged Mr. Henriksen as a business consultant. Mr. Henriksen, a former senior
executive with Eli Lilly and Company, brings proven expertise in the U.S. and
global marketplaces, having completed more than 65 licensing, research
collaboration and acquisition agreements with a variety of partners.
In late April, IMI filed a patent application with the U.S. Patent and
Trademark Office and the Canadian Intellectual Property Office for the
lab-processed format of IMI's skin cholesterol test. The company also intends
to file an application with the European Patent Office in the near future. Like
IMI's other products, this test is administered painlessly and rapidly at the
point of care, without fasting, needles or blood sample required. The testing
procedure samples skin cells from the palm of the hand using a specially
designed applicator with medical-grade adhesive. The test is then sent to a
laboratory where the surface is assessed for skin cholesterol and generates a
quantitative result.
Also in April, IMI received notice that the Japan Patent Office granted the
company's patent application for a screening test for the early detection of
colorectal neoplasia. This extends IMI's patent coverage in Japan, which is a
major market, while complementing the company's existing intellectual property
related to ColorectAlert(TM).
Fiscal 2003 Financial Review
Research and development expenditures decreased to $1,919,000 from $2,105,000
in fiscal 2002. Clinical trial expenses, which consist principally of fees paid
to third parties, decreased approximately $330,000 from 2002. This resulted
from changes both in the mix and timing of various clinical trials. IMI is
currently conducting at least 15 clinical trials, but several of them are
subsidized through collaborative arrangements with third parties, thereby
significantly reducing the company's expenses. In addition, IMI committed to
several large trials near the end of the fiscal year, and, as a result, most of
those expenses will be incurred in 2004 and beyond.
General and administration expenses amounted to $2,362,000 compared with
$2,141,000 in the prior year, representing an increase of $221,000. Expenses
related to registering with the U.S. Securities and Exchange Commission (SEC)
and listing on the American Stock Exchange (Amex) amounted to approximately
$179,000 for 2003 compared with $260,000 in 2002. The company's shares
commenced trading on the Amex in September 2003. Compensation expense increased
14% or $99,000 from 2002, reflecting the addition of one employee plus annual
increases. Cash compensation for directors' fees, which commenced in the fourth
quarter of 2002, amounted to $61,500 compared with $14,750 for 2002.
Stock-based compensation relating to administration resulted in non-cash
expenses of $255,000 compared with $36,000 in 2002.
Amortization expenses amounted to $281,000 compared with $219,000 for 2002. Of
the fiscal 2003 amount, $167,000 was amortization on capital equipment and
$114,000 was amortization on acquired technologies ($77,000 and $142,000
respectively in 2002). Additions of capital equipment during 2003 and 2002
amounted to $386,000 and $21,000 respectively, and were primarily in support of
clinical trials.
Recoveries of provincial scientific research tax credits (ITCs) amounted to
$223,000 for the year. This includes an accrual of $180,000 for 2003. In 2002,
management recorded its best estimate of the recovery for the year. In 2003,
the actual recovery for 2002 exceeded management's estimate by $43,000.
Interest income was $275,000 compared with $257,000 for 2002.
Liquidity and Capital Resources
As at December 31, 2003 the company had cash, cash equivalents and short-term
investments totaling $6,697,000 ($10,112,000 as at December 31, 2002). IMI
invests its funds in short-term financial instruments and marketable
securities. During fiscal 2003, the company received $238,070 from the exercise
of options, which were previously granted pursuant to the company's stock
option plan. Cash used to fund the operating activities during the year
amounted to $3,396,000 compared with $3,550,000 in 2002. The company has no
long-term debt.
Total assets decreased by $3,305,000 to $8,074,000 as at December 31, 2003,
from $11,379,000 at December 31, 2002. This resulted primarily from the loss
for the year.
"Our clinical successes as well as the tone of our discussions with potential
partners suggest a growing awareness of the merits of predictive medicine and
support for IMI's approach to screening for disease," said Dr. Norton. "With
multiple products, a growing body of supportive scientific data and a solid
financial foundation, IMI is increasingly well positioned in its target
markets."
About IMI
IMI is a world leader in predictive medicine, dedicated to developing rapid,
non-invasive tests for the early detection of life-threatening diseases,
particularly cardiovascular disease and cancer. The company's head office is
located in Toronto, and its research and product development facility is at
McMaster University in Hamilton, Ontario. For further information, please visit
the company's website at http://www.imimedical.com/.
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IMI's Fiscal 2003 Annual Report will be mailed to shareholders of record
and posted on the company's website on May 17, 2004.
------------------------------------------------------------------------
This release contains forward-looking statements that reflect the company's
current expectation regarding future events. The forward-looking statements
involve risk and uncertainties. Actual events could differ materially from
those projected herein and depend on a number of factors including, but not
limited to, changing market conditions, successful and timely completion of
clinical studies, uncertainties related to the regulatory approval process,
establishment of corporate alliances and other risks detailed from time to time
in the company's quarterly, annual and other regulatory filings.
Financial statements are attached to this release.
IMI International Medical Innovations Inc.
Incorporated under the laws of Canada
CONSOLIDATED BALANCE SHEETS
As at As at
December 31, December 31,
2003 2002
$ $
-------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents 61,625 150,451
Short-term investments 6,635,135 9,961,743
Prepaid expenses and other receivables 340,489 237,591
Investment tax credits receivable 180,000 271,000
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Total current assets 7,217,249 10,620,785
-------------------------------------------------------------------------
Capital assets, net 403,205 191,632
Acquired technology, net of accumulated
amortization of $693,684 (2002 - $580,291) 453,573 566,966
-------------------------------------------------------------------------
8,074,027 11,379,383
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable 139,435 180,303
Accrued liabilities 403,213 409,252
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Total current liabilities 542,648 589,555
-------------------------------------------------------------------------
Deferred revenue 93,100 100,000
-------------------------------------------------------------------------
Total liabilities 635,748 689,555
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Commitments
Shareholders' equity
Capital stock 24,780,846 23,785,884
Warrants 312,200 496,000
Deficit (17,654,767) (13,592,056)
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Total shareholders' equity 7,438,279 10,689,828
-------------------------------------------------------------------------
8,074,027 11,379,383
-------------------------------------------------------------------------
-------------------------------------------------------------------------
IMI International Medical Innovations Inc.
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
11-month
Year ended Year ended period ended
December 31, December 31 December 31,
2003 2002 2001
$ $ $
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EXPENSES
Research and development 1,918,800 2,104,904 2,047,116
General and administration 2,361,602 2,141,207 1,500,434
Amortization 280,777 219,466 215,236
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4,561,179 4,465,577 3,762,786
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RECOVERIES AND OTHER INCOME
Investment tax credits 223,146 189,908 131,000
Interest 275,322 257,407 386,580
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498,468 447,315 517,580
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Net loss for the period (4,062,711) (4,018,262) (3,245,206)
Deficit, beginning
of period (13,592,056) (9,573,794) (6,328,588)
-------------------------------------------------------------------------
Deficit, end of period (17,654,767) (13,592,056) (9,573,794)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic and diluted loss
per share $(0.19) $(0.20) $(0.17)
-------------------------------------------------------------------------
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Weighted average number of
common shares outstanding 20,967,677 20,406,733 19,097,390
-------------------------------------------------------------------------
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IMI International Medical Innovations Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
11-month
Year ended Year ended period ended
December 31, December 31 December 31,
2003 2002 2001
$ $ $
-------------------------------------------------------------------------
OPERATING ACTIVITIES
Net loss for the period (4,062,711) (4,018,262) (3,245,206)
Add items not involving cash
Amortization 280,777 219,466 215,236
Stock compensation costs
included in:
Research and development
expense 189,105 81,905 -
General and administration
expense 255,112 36,483 -
Loss on sale of capital
asset 3,873 - 1,139
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(3,333,844) (3,680,408) (3,028,831)
Net change in non-cash working
capital balances related
to operations (61,870) 130,841 (209,865)
-------------------------------------------------------------------------
Cash used in operating
activities (3,395,714) (3,549,567) (3,238,696)
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Short-term investments 3,326,608 (2,603,943) 642,836
Purchase of acquired
technology - - (381,507)
Purchase of capital assets (385,605) (20,804) (275,492)
Proceeds on sale of capital
asset 2,775 - 2,376
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Cash provided by (used in)
investing activities 2,943,778 (2,624,747) (11,787)
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FINANCING ACTIVITIES
Issuance of capital stock,
net of issue costs 363,110 5,731,386 1,278,328
-------------------------------------------------------------------------
Cash provided by financing
activities 363,110 5,731,386 1,278,328
-------------------------------------------------------------------------
Net decrease in cash and
cash equivalents during
the period (88,826) (442,928) (1,972,155)
Cash and cash equivalents,
beginning of period 150,451 593,379 2,565,534
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Cash and cash equivalents,
end of period 61,625 150,451 593,379
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Represented by:
Cash 61,625 148,270 376,190
Cash equivalents - 2,181 217,189
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61,625 150,451 593,379
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DATASOURCE: IMI International Medical Innovations Inc.
CONTACT: Sarah Borg-Olivier, Director, Communications,
T: (416) 222-3449, ; Ron Hosking, Vice President,
Finance and CFO, T: (416) 222-3449,