Annidis Corporation Reports 2013 Second Quarter Results and Provides Update on the YIMAI Transaction
OTTAWA, Aug. 28, 2013 /CNW/ - Annidis Corporation (TSX Venture: RHA), today announced its results for the three and six month periods ended June 30, 2013, and provided an update on the YIMAI transaction. The unaudited condensed consolidated financial statements for the three months ended June 30, 2013, and the related Management's Discussion and Analysis are available at www.sedar.com.
Annidis Corporation developed and markets imaging technologies to eye care professionals. The Annidis RHA™ instrument, which is based on Multi-Spectral Imaging (MSI), assists eye-care professionals in screening, diagnosing and managing ocular diseases by allowing them to view non-invasively the deepest layers of the eye instrumental for preserving vision.
- Entered into a Letter of Understanding with YIMAI Technology International Company Limited ("YIMAI"), a Hong Kong based company. Through its affiliate Shenzen New Industries Material of Ophthalmology Co. Ltd. ("NIMO"), YIMAI markets and distributes ophthalmology products in China. The Letter of Understanding provided for three components, including a Distribution Agreement, participation in a Promissory Note Financing the Company was undertaking and a Private Placement of common equity of the Company (the "Private Placement"). See the Company's press releases of June 17, 2013, June 26, 2013, and July 16, 2013.
- Finalized the distribution agreement with YIMAI. The distribution agreement provides exclusive distribution rights for Annidis products in the People's Republic of China, Hong Kong and Macau. YIMAI's affiliate NIMO distributes ophthalmology products in China through its 13 nationwide offices.
- The term of the agreement is six years following the date of Chinese regulatory approval. Annidis has shipped a unit to China and is working closely with YIMAI to obtain all regulatory approvals to market and sell the instrument in the Chinese market.
- The Company closed its previously announced $3,000,000 promissory note financing on June 26th, 2013, in which YIMAI participated, subscribing for $1,000,000.
- Announced a $5,000,000 Private Placement in which YIMAI agreed to subscribe for an aggregate of 27,801,652 Common Shares. Of these 27,801,652 Common Shares, 6,968,319 will be held in escrow by Annidis (the "Escrowed Shares") and will be released to YIMAI on the basis of one Escrowed Share for each 3.26 Common Shares which are issued upon exercise of the Company's other outstanding convertible securities on or before September 30, 2016. After such date any Escrowed Shares not already released to YIMAI will be cancelled. Immediately following closing of the Private Placement and excluding the Escrowed Shares, YIMAI will own 20,833,333 Common Shares, acquired at a price of $0.24 per Common Share, resulting in an approximate 23.48% ownership interest in the Company.
- The Private Placement was originally expected to close on or before August 31, 2013. YIMAI has completed its due diligence and has confirmed it will complete the Private Placement, subject to all necessary closing conditions including regulatory approvals. YIMAI has requested an extension to close the transaction on or before October 20, 2013, in order to obtain all necessary approvals. Annidis has accepted this extension, subject to shareholder and regulatory approval. As part of the extension, YIMAI has agreed to provide Annidis with a bridge loan of up to $600,000 at an interest rate of 10% per annum, repayable from the proceeds of the Private Placement.
- In addition to its expansion into China, Annidis installed two additional instruments and grew committed orders by two since last reporting May 30th, 2013.
- The Company also advanced negotiations with potential strategic partners on a number of opportunities central to which is Annidis' world leading MSI Technology. One opportunity includes participation in a clinical trial.
|Key Financial Metrics||Q2 2013||Q2 2012||% Change|
|Installed Machines (as of May 30)||40||30||+33%|
|Committed Orders (as of May 30)||31||9||+245%|
|Net Income (loss)||$(1,123,649)||$(1,289,759)||-13%|
|Net Income (loss) per share||$(0.02)||$(0.02)||-|
"Our ability to grow this quarter was constrained by our limited financial resources but, with the anticipated closing of our financing agreement with YIMAI, we will have strengthened our balance sheet and be in a position to grow our installed base," said Gerald Slemko, CEO of Annidis. "We used the proceeds from our promissory note financing to strengthen our sales, marketing and customer support efforts and the additional funds will allow us to meet our manufacturing commitments and move towards profitability."
Revenue was $130,049 and $491,867 for the three and six months ended June 30, 2013, compared to $150,366 and $468,286 for the same period in 2012. The year-over-year change in revenue is attributable to lower rental revenue in Canada as well as a higher average sale price for units in 2012.
General and administrative expenses were $342,745 and $617,291 for the three and six months ended June 30, 2013, compared to $320,764 and $627,788 for the corresponding periods in 2012. The change in expenses reflects lower compensation in 2013 partly offset by higher legal, regulatory, and other costs associated with the note financing and proposed transaction with YIMAI.
Research and development expenses were $215,496 and $434,820 for the three and six months ended June 30, 2013, compared with $143,061 and $332,140 for the same period in 2012. The change in expenses is largely attributed to the development of new products together with costs associated with filing patents.
Net loss was $1,123,649 ($0.02 per share) and $2,090,022 ($0.03 per share) for the three and six months ended June 30, 2013, compared to a loss of $1,289,759 ($0.02 per share) and $2,223,620 ($0.03 per share) for the corresponding period in 2012. The change in net loss is attributable to increased interest and financing charges in 2013 offset by reduced share based compensation.
Cash used in operating activities was $577,250 and $1,275,346 for the three and six months ended June 30, 2013, compared to $423,369 and $1,273,165 for the corresponding period in 2012.
At June 30, 2013, the Company's working capital deficiency was $3,839,210 compared to a working capital deficiency of $2,476,459 at December 31, 2012. The Company's position should improve as the YIMAI financing is expected to provide the resources to grow the revenue as additional devices are deployed.
Issuance of Options
Annidis announces that it has granted an aggregate of 1,230,000 options to employees and consultants of the Corporation. Each option entitles the holder to acquire one common share in the capital of the Corporation at an exercise price of $0.40. These options will expire on August 26, 2017.
About Annidis Corporation
Annidis (TSX-V: RHA) has developed and is marketing a new imaging platform technology based on Multi-Spectral Imaging (MSI). This new technology is opening a new frontier in disease identification and its management. The Annidis MSI technology allows eye-care professionals to view non-invasively the deepest areas of the eye aiding eye care professionals in the early identification and treatment of debilitating eye diseases. The Company's existing RHA 2020-U Gold, used by eye care professionals as a broad based tool for detecting early-onset of eye related diseases such as Dry AMD, has a potential market of over 20,000 clinics in North America. The RHA Platinum MD will further strengthen the value proposition allowing doctors to visualize choroidal and retinal vasculature non-invasively. The RHA Platinum MD has global market potential of more than 100,000 Ophthalmologists.
This news release may contain "forward-looking information" within the meaning of applicable Canadian securities legislation. Statements made in this news release, other than those concerning historical financial information, may be forward-looking and therefore subject to various risks and uncertainties. The words "may", "will", "could", "should", "would", "suspect", "outlook", "believe", "plan", "anticipate", "estimate", "expect", "intend", "forecast", "objective", "hope", and "continue" (or the negative thereof), and words and expressions of similar import are intended to identify forward-looking statements. Certain material factors or assumptions are implied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. Factors that could cause results to vary include those identified in the Corporation's filings with Canadian securities regulatory authorities, as well as the applicability of patents and proprietary technology; the outcome of pending corporate transactions; possible patent ligation; regulatory approval of products in development; changes in government regulation or regulatory approval processes; government and third party reimbursement; dependence on strategic partnerships; intensifying competition; rapid technological change in the industry; anticipated future losses; the ability to access capital; and the ability to attract and retain key personnel. All forward-looking information presented herein should be considered in conjunction with such filings. Except as required by Canadian securities laws, the Corporation does not undertake to update any forward-looking statements; such statements speak only as of the date made.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Annidis CorporationFor further information:
Gerald Slemko, CEO
(519) 858-1582 ext. 239
James Binckly, Investor Relations
(416) 815-0700 ext. 228