Noveko International Inc Announces Results for the Fourth Quarter and the Fiscal Year Ended June 30, 2008



    A strategic year focused on developing new products, setting up
    distribution networks, financing developments, expanding through
    acquisitions and strengthening the management team

    EKO/TSX

    MONTREAL, Oct. 24 /CNW/ - Noveko International Inc. ("the Company")
announces its results for the fourth quarter and the fiscal year ended
June 30, 2008.

    
    Operating Results for the Fourth Quarter and Fiscal Year Ended
    June 30,2008
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    Three-Month and 12-Month Periods Ended June 30, 2008 and 2007
    (in thousands of $, except per-share amounts) (unaudited)
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                                        Three Months               12 Months
                                         (Unaudited)               (Audited)
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------
    Revenues                       4,345       3,043      14,516      12,845
    Loss before amortization,
     financial expenses,
     other item and income taxes  (5,809)     (1,853)    (14,206)     (2,409)
    Net loss                      (7,612)     (2,323)    (16,613)     (4,623)
    Loss per Class A share
      (basic and diluted)          (0.13)      (0.05)      (0.30)      (0.11)
    Weighted average
     number of Class A
     shares outstanding
     (in thousands)               58,407      44,401      54,767      41,650
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    "Our results did not meet our expectations. They were mainly affected by
major expenses related to product and market development, acquisitions and
stock-based compensation, but we regard these as investments for future growth
and creating an important sense of membership in our team. During the year, we
made great strides and have started to market our products worldwide after a
busy year focused on research and development, organizing production and
setting up distribution networks. We also broadened our bases by closing
strategic acquisitions that fit with our vision of a strong and specialized
group aiming for long-term growth. These acquisitions will give rise to
marketing synergies enabling us to better develop and further expand our
target markets, especially in the biomedical and environmental field. During
fiscal 2008-2009, we will concentrate primarily on increasing our sales and
improving our bottom line," indicated André Leroux, Chairman of the Board and
Chief Executive Officer of Noveko.

    Operating Results
    -----------------

    Fourth Quarter Ended June 30, 2008
    ----------------------------------

    For the fourth quarter ended June 30, 2008, consolidated revenues grew by
42.8% to $4.3 million for the fourth quarter ended June 30, 2008. This growth
is due to a 50.7% or $0.7 million increase in BLI's revenues thanks to its
market development efforts, a 27.7% or $0.4 million increase in the revenues
of ECM which has started to reap the initial benefits of marketing its new
generation of ultrasound scanners, a $0.2 million contribution by the
biomedical activities stemming from the new subsidiaries and the first sales
of Noveko(TM) antimicrobial face masks and air filters.
    The operating loss before amortization, financial expenses, other item and
income taxes amounted to $5.8 million for the fourth quarter, compared with
$1.9 million for the corresponding quarter of the previous year. ECM's
operating loss increased by $0.1 million as a result of the costs incurred for
the marketing of its new ultrasound scanners and the strengthening of its team
compared with the corresponding period of the previous year. BLI's operating
loss increased by approximately $0.7 million due to the fact that it had to
outsource part of its new contracts while also sustaining a loss on a major
contract. The operating loss of the biomedical activities increased by
approximately $0.7 million due to the fact that Noveko is starting to record
its first sales while pursuing its market development and working on its FDA
file. The loss before amortization, financial expenses, other item and income
taxes stemming from Noveko International Inc. and Noveko Trading increased by
$2.5 million over the fourth quarter of the previous year due to the rise in
stock-based compensation expense, as aforementioned, the strengthening of the
management team and the expenses related to acquisitions that the Company
closed during the fourth quarter and subsequent thereto.
    The fourth-quarter net loss amounted to $7.6 million, compared with
$2.3 million for the corresponding quarter of the previous year, among others,
 on account of a goodwill impairment charge of $1.9 million with respect to
BLI. Considering a net change in losses on translation of financial statements
of self-sustaining foreign operations of $0.1 million for the quarter, as
opposed to $0.5 million for the fourth quarter of the previous year, a net
loss of $7.7 million represented the comprehensive loss for the fourth
quarter, compared with $2.8 million for the corresponding quarter of the
previous year.
    The loss per Class A share (basic and diluted) amounted to $0.13 on a
weighted average of 58,407,108 outstanding shares, compared with a loss per
share of $0.05 on a weighted average of 44,500,510 shares for the fourth
quarter of the previous year. The increased weighted average number of
outstanding shares is due to the share issues during the fiscal year ended
June 30, 2008.

    Fiscal Year Ended June 30, 2008
    -------------------------------

    Operating Results
    -----------------

    Consolidated revenues grew by 13.0% to $14.5 million for the fiscal year
ended June 30, 2008. This growth is due mainly to the increase in BLI's
revenues and the contribution of the biomedical and environmental activities,
whereas ECM's revenues remained relatively stable compared with the previous
year.
    BLI achieved significant sales growth during the year, as its revenues
grew by $1.1 million or 18.6%. This increase is due to its market development
efforts which enabled it to conclude new larger-scale contracts. Despite the
slowdown in the hog market and the marketing of a new generation of ultrasound
scanners for use in veterinary and human medicine, ECM's revenues declined
just slightly compared with the previous year. The launch of these new
products was postponed to the beginning of the third quarter. ECM is now
positioned to benefit from its return to growth in upcoming periods. Revenues
of the biomedical and environmental activities mainly reflect the
contributions of the new subsidiaries as well as that of Noveko, which began
delivering Canadian orders for antimicrobial air filters and face masks in the
third quarter.
    Selling and administrative expenses increased by 69.2% to $10.8 million,
due mainly to the following factors:

    - the expenses related to the accelerated marketing of the derivative
      products from the antimicrobial filtration technology, specifically
      antimicrobial face masks and air filters, whereas these initiatives had
      barely started at the end of the previous year; and
    - the increase in the group's total payroll subsequent to the
      strengthening of the team at different levels of responsibility and the
      acquisitions closed during the year.

    Stock-based compensation represented an expense of $7.4 million for the
fiscal year ended June 30, 2008, compared with $0.7 million for the previous
year. During fiscal 2007-2008, the Company granted stock options to employees
and consultants, entitling them to acquire a total of 2,900,000 Class A shares
at a weighted average exercise price of $6.51 per share with a vesting period
extending over 18 months - whereas during the previous year, it had granted
stock options allowing the purchase of 4,300,000 Class A shares at a weighted
average exercise price of $1.19 per share.
    Considering the aforementioned factors, the Company incurred an operating
loss before amortization, financial expenses, other item and income taxes of
$14.2 million, compared with an operating loss of $2.4 million for the
previous year. ECM incurred an operating loss of $1.4 million, as opposed to
EBITDA of approximately $0.2 million for the previous year, due to the costs
related research and development and the marketing of its new generation of
ultrasound scanners as well the hiring of human resources in anticipation of
future growth. For its part, BLI recorded an operating loss before
amortization, financial expenses, other item and income taxes of $0.2 million,
as opposed to EBITDA of $0.1 million for the previous year. BLI's profit
margin declined during the fourth quarter as it had to outsource subsequent to
the increase in its order backlog; it also sustained a loss on a major
contract. As mentioned in other management's reports for its interim periods
throughout the fiscal year, Noveko focused its efforts on finalizing its file
in view of obtaining FDA approval, penetrating markets and organizing the
production of its antimicrobial face masks and air filters. Thus, the
biomedical activities posted a loss of $3.8 million, compared with
$0.9 million for the previous year. The loss before amortization, financial
expenses, other item and income taxes stemming from Noveko International Inc.
and Noveko Trading amounted to $8.7 million, compared with $1.7 million for
the previous year; this increase is due mainly to the stock-based compensation
expense of $5.5 million, as well as the expenses related to the acquisitions
that the Company closed during and subsequent to the end of the year.
    Amortization expenses stood at $0.9 million, remaining practically at the
same level as the previous year.
    Financial expenses decreased to $0.2 million from $1.4 million for the
fiscal year ended June 30, 2007. This sharp decline is due mainly to
investment income of $0.7 million, as opposed to a nil amount for the previous
year, and a repayment of long-term debt during fiscal 2007-2008.
    The net loss amounted to $16.6 million for the year, compared with a net
loss of $4.6 million for the previous year, mainly on account of the
aforementioned factors and of a goodwill impairment charge of $1.9 million
with respect to BLI - the Company carried out an assessment of the fair value
of this subsidiary's intangible assets, including its goodwill, by means of
impairment tests. Since BLI's fair value is below its book value, the Company
recorded a corresponding impairment loss on this intangible asset. In
addition, the Company recognized income tax recoveries of approximately
$0.2 million for the current fiscal year and future income tax charges of
$0.5 million. Considering a net change in unrealized gains on translation of
financial statements of self-sustaining foreign operations of $0.8 million for
the year, compared with $45,444 a year earlier, a net loss of $15.8 million
represented the comprehensive loss for the current fiscal year, compared with
$4.6 million last year.
    The loss per Class A share (basic and diluted) amounted to $0.30 on a
weighted average of 54,767,174 outstanding shares, compared with a loss per
share of $0.11 on a weighted average of 41,649,795 shares for the previous
year. The increased weighted average number of outstanding shares is due to
the various share issues during the fiscal year ended June 30, 2008.

    Principal Cash Flows
    --------------------

    For the fiscal year ended June 30, 2008, operating activities, after net
change in non-cash working capital, used cash flows of $9.7 million, compared
with $2.9 million for the previous year. This change is explained primarily by
the increase in the net loss, less the adjustments for stock-based
compensation, accreted interest on secured convertible debentures,
amortization, loss on fair value of short-term investments, goodwill
impairment charge and net change in non-cash working capital. Net change in
non-cash working capital represented a cash outflow of $3.5 million, compared
with a cash outflow of $0.3 million for the previous year. This variation is
due mainly to an increase in accounts receivable and a growth in inventories,
especially ECM's new ultrasound scanners and BLI's products in progress.
    Financing activities for the year provided cash flows of $21.7 million,
compared with $20.4 million for the previous year. This change is due
primarily to the issue of Class A shares, net of share issue expenses, for an
amount of approximately $21.0 million. The year-to-date increase in the bank
loan and net changes in bank advances represented a total of over
$1.6 million; this amount was used primarily to finance material for ECM and
BLI orders in progress. The Company paid interest of more than $0.2 million on
secured convertible debentures, compared with more than $0.4 million for the
previous year; this change reflects the conversion of an amount of
$2.1 million in debentures into Class A shares. Finally, the Company made a
net principal repayment on long-term debt of $0.9 million during the year.
    Investing activities used cash flows of $3.2 million, including an amount
of $0.6 million paid in cash for the acquisition of SyMa at the end of July
2007 and of Magnum at the beginning of June 2008. In addition, a consideration
of $2.2 million was allocated to the purchase of a building housing the head
office as well as office equipment and information technology, plus amounts of
more than $0.3 million in capitalized development costs and approximately
$1.6 million for the acquisition of Purer Life, closed subsequent to year-end.
The Company also received short-term investments of $66.9 million and acquired
short-term investments of $65.2 million, representing an actual divestment of
$1.7 million for the year.
    Aggregate cash inflows and outflows provided net cash flows of
$8.9 million, compared with $2.0 million for the previous year. The Company
ended the fiscal year with cash and cash equivalents of $11.6 million,
compared with $2.7 million as at June 30, 2007.

    Financial Position
    ------------------

    Balance Sheet Highlights as at June 30, 2008
    (in thousands of $)
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                                                       As at           As at
                                                     June 30,        June 30,
                                                        2008            2007
    -------------------------------------------------------------------------
    Total assets                                      62,858          42,243
    Shareholders' equity                              49,773          27,351
    Total interest-bearing debt(1)                     7,860           8,367
    Cash and cash equivalents,
     short-term investments
     and cash in trust                                25,386          16,960
    Working capital                                   30,537          19,993
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    (1) Including long-term debt and its current portion, bank advances and
        bank loan, as well as convertible debentures.

    The changes in the Company's financial position between June 30, 2007 and
June 30, 2008 notably reflect the period's results, the purchase of a building
for a consideration of $1.2 million and the acquisition of all the issued and
outstanding shares of Laboratoire SyMa Inc., concluded on July 26, 2007, and
of Magnum Pharmaceutics Inc., on June 10, 2008. The SyMa acquisition was
settled by a cash consideration of $0.5 million and the issue of 745,156 Class
A shares for an amount of $4.9 million, whereas the Magnum acquisition was
settled by the issue of 618,557 Class A shares for an amount of $3.0 million.
    These transactions explain the increase in fixed assets, intangible assets
and goodwill over June 30, 2007.
    As at June 30, 2008, total assets amounted to $62.9 million, up by 48.8%
or $20.6 million over June 30, 2007. Working capital stood at $30.5 million
for a current ratio of 5.6:1 as at June 30, 2008, compared with $20.0 million
and a 4.2:1 ratio as at June 30, 2007.
    As at June 30, 2008, shareholders' equity totaled $49.8 million, compared
with $27.4 million as at June 30, 2007, primarily reflecting the $36.5 million
increase in capital stock subsequent to the Class A share issues and the
$6.6 million increase in contributed surplus, less the $16.7 million increase
in the fiscal year's deficit.
    Considering the period's debt repayments, long-term debt including the
current portion totaled $3.7 million as at June 30, 2008, compared with
$4.0 million as at June 30, 2007. Total interest-bearing debt (consisting of
bank advances and bank loan, current portion of long-term debt, long-term debt
and secured convertible debentures) amounted to $7.9 million as at June 30,
2008, compared with $8.4 million as at June 30, 2007, a reduction of $0.5
million reflecting the decrease of approximately $2.0 million in convertible
debentures from June 30, 2007, due mainly to the conversion of an amount of
$2.1 million in debentures into Class A shares, whereas bank advances and bank
loan increased by $1.6 million.

    Capital Stock Information
    -------------------------

    During the fiscal year ended June 30, 2008, the Company issued 745,156
Class A shares for a total of $4,932,933 in consideration of the acquisition
of all the issued and outstanding shares of Laboratoire SyMa Inc., as well as
618,557 Class A shares for a total of $3,009,279 in consideration of the
acquisition of all the issued and outstanding shares of Magnum Pharmaceutics
Inc.
    It also issued 1,188,404 Class A shares subsequent to the exercise of
1,188,404 stock options for a cash consideration of $1,182,380 and a transfer
of $798,367 from contributed surplus, as well as 7,572,000 Class A shares
subsequent to the exercise of 7,572,000 warrants for a cash consideration of
$19,820,000 and a transfer of $4,568,449 from warrants.
    In addition, the Company issued 2,347,729 Class A shares subsequent to the
exercise of the conversion right of $2,124,586 of convertible debenture.
Amounts of $1,894,533 and $307,198 were transferred from the secured
convertible debentures and from the portion of secured convertible debentures
included in equity, respectively.
    Considering these issues, the Company's capital stock consisted of
63,087,727 Class A shares as at June 30, 2008, compared with 50,615,881 as at
June 30, 2007.

    Overview of Acquisitions Closed During and Subsequent to the Year Ended
    June 30, 2008
    -----------------------------------------------------------------------

    In July 2007, the Company acquired Laboratoire SyMa Inc. ("SyMa"), a
company specializing in the manufacture of sanitizers, more specifically the
antimicrobial products marketed under the Azuro(TM) brand. This acquisition is
fully consistent with its objective of developing its line of antimicrobial
products.
    In June 2008, the Company acquired Magnum Pharmaceutics Inc. ("Magnum"), a
specialized management services company focused on partnering with small to
medium-sized pharmaceutical, over-the-counter drug and medical device
manufacturers and distributors. Along with the activities specific to Magnum,
the Company gained a complete marketing team for its own products.
    Subsequent to the fiscal year ended June 30, 2008, the Company closed four
new acquisitions: (i) Groupe Conseils Micron-Air Inc. ("Micron-Air"), a
designer and manufacturer of air quality systems marketed under the
EPURAIR(TM) brand and targeted to the residential and commercial market. One
of the objectives of this acquisition is to develop products combining the
characteristics specific to Micron-Air's products with Noveko's antimicrobial
filtration technology; (ii) Unitam International Management Corporation Inc.,
an agency focused on the development of international business services
primarily for Canadian and Asian companies, and which already acted as a
consultant to the Company; (iii) SARL Noveko Algérie, a medical equipment
import company based in Algeria; and (iv) Purer Life Technology Co. Ltd (and
an entity of the same group U-Bond Inc.) (collectively "Purer"), a filtration
fabric development and manufacturing company that holds the rights to seven
types of patents issued in Taiwan, China and the United States (for a total of
10 patents) and the intellectual property rights to 15 patent applications
either in Taiwan or internationally, under the Patent Cooperation Treaty
(PCT). One of the objectives of this latest acquisition is to ensure the
combination of Purer's 3-D filter technology with the Company's antimicrobial
filtration technology.

    Profile
    -------

    Noveko International Inc. is a holding company listed on the Toronto Stock
Exchange. Its subsidiaries specialize in the following business segments: the
development, manufacturing and marketing of medical equipment - the custom
processing and distribution of steel products - and the development and
marketing of products in the biomedical and environmental fields.

    Noveko International Inc. uses earnings before amortization, financial
expenses, other item and income taxes because this measure enables management
to assess the Company's operational performance. However, EBITDA should not be
considered by investors as an alternative to operating income or net earnings,
an indicator of operating performance or cash flows, or as a measure of
liquidity. Certain statements set forth in this press release constitute
forward-looking statements. In some cases, these statements are identified by
the use of terms such as "may", "could", "might", "intend", "should",
"expect", "project", "plan", "believe", "estimate" or other comparable
variants. These statements are based on the information available at the time
they are written, on assumptions made by management and on the expectations of
management, acting in good faith, regarding future events, including those
relating to economic conditions, fluctuations in exchange rates and operating
expenses, and the absence of unusual events entailing supplementary
expenditures. Although management considers these assumptions and expectations
reasonable based on the information available at the time they are written,
they could proved inaccurate. Forward-looking statements are also subject, by
their very nature, to known and unknown risks and uncertainties such as those
related to the industry, acquisitions, labor relations, credit, key officers,
supply and product liability. The actual results of Noveko International Inc.
could differ materially from those indicated or underlying these
forward-looking statements. The reader is therefore recommended not to unduly
rely on these forward-looking statements. Forward-looking statements do not
reflect the potential impact of special items, any business combination or any
other transaction that may be announced or occur subsequent to the date
hereof. The Company undertakes no obligation to update or revise the
forward-looking statements to account for new events or new circumstances,
except where provided for by applicable legislation.

    -------------------------------------------------------------------------
    The Management's Report, consolidated financial statements and
    accompanying notes for the fiscal year ended June 30, 2008, along with
    the amended and restated interim financial statements for the periods
    ended December 31, 2007 and March 31, 2008, will be filed on SEDAR
    (www.sedar.com).
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    Consolidated balance sheets

    as at June 30, 2008 and 2007

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                                                        2008            2007
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    Assets

    Current assets:
      Cash and cash equivalents                 $ 11,594,335    $  2,668,494
      Deposit for acquisition                      1,274,625               -
      Short-term investments                      12,516,884      14,291,887
      Accounts receivable                          5,092,191       2,494,052
      Inventories                                  5,868,045       3,276,904
      Prepaid expenses                               820,119         502,982
      Investment in Canadian Immigrant
       Investor Program                                    -       3,087,423
    -------------------------------------------------------------------------
                                                  37,166,199      26,321,742

    Fixed assets                                   7,206,885       5,605,250
    Intangible assets                              2,572,372       1,656,586
    Other assets                                   1,442,283         911,354
    Future income taxes                              762,311         680,706
    Goodwill                                      13,708,240       7,067,385

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                                                $ 62,858,290    $ 42,243,023
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    Liabilities and shareholders' equity

    Current liabilities:
      Bank advances                             $  1,112,665    $     18,287
      Bank loan                                      561,435               -
      Accounts payable and accrued liabilities     4,318,727       2,422,273
      Loans under Canadian Immigrant Investor              -       3,087,423
      Current portion of long-term debt              636,116         801,029
    -------------------------------------------------------------------------

                                                   6,628,943       6,329,012

    Long-term debt                                 3,086,827       3,158,442
    Secured convertible debentures                 2,462,909       4,389,576
    Future income taxes                              906,464       1,014,814

    Shareholders' equity:
      Capital stock                               70,084,061      33,570,722
      Portion of secured convertible
       debentures included in equity                 611,537         918,735
      Warrants                                        85,983       4,667,446
      Contributed surplus                          7,967,778       1,325,504
      Accumulated other comprehensive
       income (loss)                                 347,359        (458,974)
      Deficit                                    (29,323,571)    (12,672,254)
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                                                  49,773,147      27,351,179
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                                                $ 62,858,290    $ 42,243,023
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    Consolidated statements of operations

    Years ended June 30, 2008 and 2007

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                                                        2008            2007
    -------------------------------------------------------------------------

    Revenues                                    $ 14,515,588    $ 12,844,715

    Cost of sales                                  9,527,597       8,074,095
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                                                   4,987,991       4,770,620

    Operating expenses:
      Administrative and selling expenses         10,823,974       6,396,320
      Stock-based compensation                     7,427,627         707,333
      Research and development                     1,336,758         262,175
      Research and development tax credits          (394,799)       (186,410)
      -----------------------------------------------------------------------
                                                  19,193,560       7,179,418

    -------------------------------------------------------------------------
    Loss before the following items and income
     taxes                                       (14,205,569)     (2,408,798)

    Amortization                                     932,645         901,193
    Financial expenses less investment revenues      186,449       1,374,690
    Goodwill impairment charge                     1,902,735               -
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                                                   3,021,829       2,275,883

    -------------------------------------------------------------------------
    Loss before income taxes                     (17,227,398)     (4,684,681)

    Income taxes:
      Current (recovered)                           (157,859)        196,351
      Future                                        (456,151)       (257,810)
      -----------------------------------------------------------------------
                                                    (614,010)        (61,459)

    Net loss                                    $(16,613,388)   $ (4,623,222)
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    Basic and diluted earnings per share        $      (0.30)   $      (0.11)
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    Weighted average number of outstanding
     shares, basic and diluted                    54,767,174      41,649,795
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    Consolidated statements of comprehensive loss

    Years ended June 30, 2008 and 2007

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        2008            2007
    -------------------------------------------------------------------------

    Net loss                                    $(16,613,388)   $ (4,623,222)

    Other comprehensive income, net of
     income taxes:

    Change in unrealized gains on translation
     of financial statements of self-sustaining
     foreign operations                              806,333          45,444

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    Comprehensive loss                          $(15,807,055)   $ (4,577,778)
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    Consolidated statements of deficit and contributed surplus

    Years ended June 30, 2008 and 2007

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                                                        2008            2007
    -------------------------------------------------------------------------

    DEFICIT

    Deficit, beginning of year                  $(12,672,254)   $ (5,693,747)

    Restatement related to the new accounting
     policies regarding financial instruments          3,161               -
    -------------------------------------------------------------------------
    Restated balance                             (12,669,093)     (5,693,747)

    Net loss                                     (16,613,388)     (4,623,222)

    Share issuance fees                              (41,090)     (2,355,285)

    -------------------------------------------------------------------------
    Deficit, end of year                        $(29,323,571)   $(12,672,254)
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    CONTRIBUTED SURPLUS

    Contributed surplus, beginning of year      $  1,325,504    $     85,673

    Fair value of stock options granted            7,427,627         707,333

    Warrants expired                                  13,014         572,000

    Fair value of stock options exercised           (798,367)        (39,502)

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    Contributed surplus, end of year            $  7,967,778    $  1,325,504
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    Consolidated statements of cash flows

    Years ended June 30, 2008 and 2007

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                                                        2008            2007
    -------------------------------------------------------------------------

    Cash flows from operating activities:
      Net loss                                  $(16,613,388)   $ (4,623,222)
      Adjustments for:
        Future income taxes                         (456,151)       (257,810)
        Accreted interest on secured
         convertible debentures                      455,444         436,995
        Stock-based compensation                   7,427,627         707,333
        Gain on disposal of fixed assets             (18,690)         (6,037)
        Amortization of discounts on bonds                 -           2,517
        Amortization                                 932,645         901,193
        Amortization - deferred financing
         costs and write-off                               -         278,710
        Goodwill impairment charge                 1,902,735               -
        Loss on fair value of short-term
         investments                                 125,329               -
        Foreign exchange loss                         (1,653)          2,132
        ---------------------------------------------------------------------
                                                  (6,246,102)     (2,558,189)
    Net change in non-cash working capital        (3,488,701)       (311,478)
    -------------------------------------------------------------------------
                                                  (9,734,803)     (2,869,667)

    Cash flows from financing activities:
      Net changes in bank advances                 1,030,290      (1,663,661)
      Increase in bank loan                          561,435               -
      Increase in long-term debt                     241,533       1,063,824
      Grant receipt                                        -          45,001
      Repayment of long-term debt                   (853,255)     (2,995,731)
      Interest paid on secured convertible
       debentures                                   (212,727)       (416,000)
      Proceeds from convertible debentures issued          -       2,200,000
      Proceeds from Class A shares and warrants
       issued                                     21,002,580      23,950,502
      Class A shares issue expenses                  (41,090)     (1,749,925)
      -----------------------------------------------------------------------
                                                  21,728,766      20,434,010

    Cash flows from investing activities:
      Business acquisition                          (576,474)              -
      Acquisition of short-term investments      (65,244,308)    (14,288,718)
      Proceeds from disposal of short-term
       investments                                66,875,738               -
      Acquisition of fixed assets                 (2,174,981)       (772,843)
      Proceeds from disposal of fixed assets          22,575          38,763
      Government assistance related to
       acquisition of fixed assets                    47,500               -
      Acquisition of intangible assets              (110,686)        (38,007)
      Acquisition of other assets                   (368,883)              -
      Deposit for acquisition                     (1,274,625)              -
      Deferred financing fees                              -        (104,350)
      Deferred development costs, net of
       related research tax credits received        (348,154)       (360,713)
      -----------------------------------------------------------------------
                                                  (3,152,298)    (15,525,868)

    Foreign exchange gain on cash in foreign
     currencies                                       84,176           3,925
    Increase in cash and cash equivalents          8,925,841       2,042,400
    Cash and cash equivalents, beginning
     of year                                       2,668,494         626,094
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of year      $ 11,594,335    $  2,668,494
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash flows related to operating activities include interest paid of
    $579,617 ($776,607 in 2007) and income taxes paid of $222,106
    ($331,249 in 2007).
    




For further information:

For further information: Eric Favreau, Vice-President and Chief
Financial Officer, Noveko International Inc., (514) 875-0606,
http://www.noveko.com

Organization Profile

Noveko International Inc.

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