NIR Diagnostics announces 2006 financial and operational results



    TSX Venture: NID

    CAMPBELLVILLE, ON, April 30 /CNW/ - NIR Diagnostics Inc. (TSX Venture:
NID), an innovator in the development of handheld healthcare diagnostic
devices today announced its operational and financial results for the year
ended December 31, 2006, as well as financial results for the fourth quarter.

    
    Highlights:

    -   Lifescan, Inc., a Johnson & Johnson company, and NIR Diagnostics
        signed a combined feasibility and first option agreement for the
        Company's light-based in-vitro glucose monitoring technology.
    -   Shaklee Corporation and NIR Diagnostics formed a strategic alliance
        to utilize NIR Diagnostics' in-vivo light-based technology to develop
        a prototype device for use in Shaklee's food supplement business. As
        part of the strategic alliance the Company received an upfront
        payment from Shaklee of $2,000,000.
    -   Shaklee licensed marketing rights for the HemoNIR(TM) CO-oximetry
        device from the Company for specific Asian territories in return for
        an upfront payment of $250,000 and an industry standard royalty.
    -   Raised gross proceeds of $711,000 from a private placement financing.
    -   A convertible debenture debt agreement was amended with the holders
        to extend the maturity date of the debentures by fifteen months to
        June/July 2008.
    -   Received US$550,000 (subsequent to year end), representing NIR
        Diagnostics' share of the proceeds of a Shaklee sub-license agreement
        with a developer of diagnostic devices.
    

    "Our progress during 2006 on business and product development is
evidenced by our success with the strategic alliance agreement with Shaklee
and the feasibility agreement with Lifescan," said Duncan J. MacIntyre,
President, Chief Executive Officer and Executive Vice-chairman of NIR
Diagnostics Inc. "Our strategy of expanding our product development to include
glucose and additional analytes in the medical and food supplement market
highlights our extensive patent portfolio."

    Financial Results

    For the three months ended December 31, 2006 the Company reported a net
loss from operations of $593,000 ($0.02 per share) compared to net loss of
$498,000 ($0.02 per share) for the three months ended December 31, 2005.
    For the year ended December 31, 2006 the Company reported a net loss from
operations of $2,397,000 ($0.09 per share) compared to a net loss of
$1,897,000 ($0.08 per share) for the year ended December 31, 2005.
    Revenue for the three months ended December 31, 2006 was $86,000 compared
with $24,000 for the corresponding three-month period in 2005. The difference
is principally due to revenue from the glucose first option agreement earned
in the fourth quarter of 2006.
    Revenue for the year ended December 31, 2006 was $607,000 compared with
$530,000 for the corresponding period in 2005.
    Research and development expenses for the three months ended December 31,
2006 were $145,000 compared with $94,000 for the three months ended
December 31, 2005. The difference is attributable to design and development
costs incurred in the current quarter associated with the food supplement
prototype device.
    Research and development expenses for the year ended December 31, 2006
were $544,000 compared with $534,000 for the year ended December 31, 2005.
    General and administrative expenses for the three months ended
December 31, 2006 were $451,000 compared with $406,000 for the corresponding
period in 2005. The difference is attributable primarily to one-time costs
related to financing and licensing transactions incurred in the fourth quarter
of 2006.
    General and administrative expenses for the twelve months ended
December 31, 2006 were $1,774,000 compared with $1,836,000 for the
corresponding period in 2005.
    At December 31, 2006, the Company had working capital, exclusive of the
convertible debenture debt and non-cash deferred items, of $2,122,000 compared
to $1,188,000 at December 31, 2005. Cash flows from financing activities in
2006 included net proceeds of $330,000 from a convertible debenture financing,
net proceeds of $625,000 from an equity financing, and $213,000 from the issue
of common share purchase warrants.
    Management believes that the Company has sufficient funds to finance
operations until the end of 2007. The Company will continue to actively seek
other sources of capital, which may include equity financings, license fees,
arrangements with strategic partners, or other sources.

    About NIR Diagnostics

    NIR Diagnostics is an innovator in the development of near-infrared,
spectroscopic medical diagnostics. The Company has an extensive portfolio of
optical, electronic and algorithm related patents in the field of in-vitro and
in-vivo blood analysis.

    Forward-looking Statements

    This press release contains forward-looking information. Forward-looking
statements are not guarantees of future performance, and actual results may
differ materially from those expressed or implied in such forward-looking
statements. In particular, any forecast of future cash inflows and outflows is
subject to a certain amount of uncertainty. The Company disclaims any
intention or obligation to update or revise forward-looking statements,
whether as a result of new information, future events or otherwise.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.


    
    NIR Diagnostics Inc.

    CONSOLIDATED BALANCE SHEETS

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                      (Audited)    (Audited)
                                                     December 31  December 31
    (in thousands of dollars)                            2006         2005
    -------------------------------------------------------------------------

    ASSETS
    Current
    Cash and cash equivalents                                 41          59
    Short-term investments                                 1,575         954
    Accounts receivable                                      134          95
    Inventory                                                740         494
    Investment tax credits recoverable                        41           -
    Prepaid expenses                                          60          72
    -------------------------------------------------------------------------
    Total current assets                                   2,591       1,674
    Deferred debenture issuance costs                         59         173
    Capital assets                                            85         113
    -------------------------------------------------------------------------
    Total assets                                           2,735       1,960
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' (DEFICIENCY) EQUITY
    Current
    Accounts payable and accrued liabilities                 469         486
    Current portion - deferred revenue                     1,839          52
    Tax-assisted financing obligation                          -         312
    -------------------------------------------------------------------------
    Total current liabilities                              2,308         850
    Convertible debentures                                 1,184         780
    Deferred revenue                                         130         182
    -------------------------------------------------------------------------
    Total liabilities                                      3,622       1,812
    -------------------------------------------------------------------------
    Shareholders' (deficiency) equity
    Share capital                                         23,579      22,824
    Contributed surplus                                      947         382
    Conversion option of convertible debentures               63          43
    Compensation warrants                                     72          50
    (Deficit)                                            (25,548)    (23,151)
    -------------------------------------------------------------------------
    Total shareholders' (deficiency) equity                 (887)        148
    -------------------------------------------------------------------------
    Total liabilities and shareholders' (deficiency)
     equity                                                2,735       1,960
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    NIR Diagnostics Inc.

    CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                              (Unaudited) (Unaudited)   (Audited)   (Audited)
                                 Three       Three
                                Months      Months         Year        Year
                                 Ended       Ended        Ended       Ended
    (in thousands of            Dec. 31     Dec. 31      Dec. 31     Dec. 31
     dollars)                     2006        2005         2006        2005
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Revenue                           86          24         607         530
    -------------------------------------------------------------------------

    Expenses
    Research and development         145          94         544         534
    General and administration       451         406       1,774       1,836
    Contractual rights                 -           -         228           -
    Royalties                          -           -          50           -
    Amortization                       -          14          35          49
    Interest                          37           3         142           3
    Accretion in carrying
     value of convertible
     debentures                       13           1          57           1
    Amortization of deferred
     debenture issuance costs         33           4         174           4
    -------------------------------------------------------------------------
                                     679         522       3,004       2,427
    -------------------------------------------------------------------------
    Net loss                        (593)       (498)     (2,397)     (1,897)

    (Deficit), beginning of
     period                      (24,955)    (22,653)    (23,151)    (21,254)
    -------------------------------------------------------------------------
    (Deficit), end of period     (25,548)    (23,151)    (25,548)    (23,151)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net loss per share             (0.02)      (0.02)      (0.09)      (0.08)
    -------------------------------------------------------------------------

    Weighted average number
     of common shares
     outstanding              29,701,060  23,838,039  27,927,620  23,824,231
    -------------------------------------------------------------------------



    NIR Diagnostics Inc.

    CONSOLIDATED STATEMENTS OF CASH FLOWS

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                              (Unaudited) (Unaudited)   (Audited)   (Audited)
                                 Three       Three
                                Months      Months         Year        Year
                                 Ended       Ended        Ended       Ended
    (in thousands of            Dec. 31     Dec. 31      Dec. 31     Dec. 31
     dollars)                     2006        2005         2006        2005
    -------------------------------------------------------------------------

    OPERATING ACTIVITIES
    Net loss                        (593)       (498)     (2,397)     (1,897)
    Add (deduct) non-cash
     items:
      Stock-based
       compensation expense           22          42         163         228
      Amortization of
       capital assets                  -          14          35          49
      Accretion in carrying
       value of convertible
       debentures                     13           1          57           1
      Amortization of
       deferred debenture
       issuance costs                 33           4         174           4
    Net change in non-cash
     working capital                 (64)         60       1,404         590
    -------------------------------------------------------------------------
    Cash (applied to)
     operations                     (589)       (377)       (564)     (1,025)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Decrease (increase) in
     short-term investments          575        (220)       (621)       (104)
    Purchase of capital
     assets                           (3)        (57)         (7)        (57)
    -------------------------------------------------------------------------
    Cash provided by (applied
     to) investing activities        572        (277)       (628)       (161)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Issuance of common share
     purchase warrants                 -           -         213           -
    Issuance of convertible
     debentures                        -         834         372         834
    Debenture issuance costs           -        (139)        (42)       (139)
    Issuance of common shares          -           -         717          17
    Share issuance costs               -           -         (86)          -
    Proceeds from tax-
     assisted financing                -           -           -         450
    -------------------------------------------------------------------------
    Cash provided by
     financing activities              -         695       1,174       1,162
    -------------------------------------------------------------------------

    Net cash (applied)
     provided during period          (17)         41         (18)        (24)
    Cash and cash equivalents,
     beginning of period              58          18          59          83
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period                    41          59          41          59
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    





For further information:

For further information: INVESTOR RELATIONS CONTACT: Ross Marshall, The
Equicom Group Inc., (416) 815-0700 ext. 238, (416) 815-0080 Fax, Email:
rmarshall@equicomgroup.com, Internet: www.equicomgroup.com; Duncan MacIntyre,
President, CEO and Executive Vice Chairman, NIR Diagnostics Inc., (905)
854-5727, (905) 854-5729 Fax, E-mail: info@nirdiagnostics.com, Internet:
www.nirdiagnostics.com

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NIR DIAGNOSTICS INC.

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