Bioscrypt Reports Results for the Second Quarter Ended June 30, 2007



    Bioscrypt business transition underway
    Robert M. Douglas appointed as Chief Executive Officer
    Stephen McDonald appointed as Chief Financial Officer
    10% employee reduction completed

    TORONTO, Aug. 2 /CNW/ - Bioscrypt Inc. (TSX: BYT), a leading provider of
enterprise access control technology, today announced its financial results
for the second quarter ended June 30, 2007.
    Bioscrypt's second quarter revenue of US$4.2 million narrowed 12% from
the US$4.8 million reported during the same period in the previous year.
Product gross margin for the quarter was 41%, four percentage points less than
the 45% in the prior quarter and three percent less than the same quarter in
2006. Overall gross margins were 47%.
    Loss before interest, tax, foreign exchange, depreciation and
amortization ("EBITDA")(1) for the three months ended June 30, 2007 of
US$3.9 million or $0.03 per share is approximately US$2.0 million greater than
the same period the previous year. The second quarter net loss was
US$3.9 million or $0.05 per share versus a net loss of US$1.3 million in 2006,
or $0.02 per share.
    Bioscrypt revenue for the six months ended June 30, 2007 of
US$8.5 million narrowed by 4% from the US$8.8 million reported during the same
period of the previous year. Product gross margin for the six months was 43%,
four percentage points less than the 47% in the prior quarter and two percent
less than the same period in 2006. Overall gross margins were 49%.
    EBITDA loss for the six months ended June 30, 2007 of US$4.7 million or
$0.07 per share is approximately US$3.8 million greater than the same period
the previous year. The net loss for the six month period was US$6.6 million or
$0.09 per share versus a net loss of US$2.7 million in 2006, or $0.05 per
share.
    "The second quarter of 2007 was a period of significant transformation
within Bioscrypt including a change in leadership, the consolidation of
offices and the integration of an acquired company," said Robert M. Douglas,
president and CEO of Bioscrypt Inc. "Today we announced decisive action
including the appointment of Stephen McDonald as CFO and a 10% reduction to
our employee base. We are committed to taking the necessary steps in order to
accelerate our leadership position and financial performance in the emerging
biometric access control and identity management market."
    "The majority of the greater EBITDA and net loss for the period can be
attributed to the costs associated with the acquisition of A4 Vision and not
achieving the revenue expectations that would compensate for the Company's
2007 product development and sales expense requirement," said Stephen
McDonald, CFO of Bioscrypt Inc. "It is the intention of the organization to
support continued investment in product development and sales activities,
however, managing the expense to produce positive cash flow and earnings is
the primary mandate for the Company."
    Product sales represented 88% of total sales or US$3.7 million on
approximately 10,250 units sold. Sales of the MV Series units represented
approximately 58% of total unit shipments and 30% of product revenue; sales of
Veri-Series(TM) products represented approximately 41% of unit shipments and
65% of product revenue and sales of 3D Vision products represented
approximately 1% of total unit shipments and 5% of product revenue. The total
number of units the Company has sold to date is now beyond 230,000. Licensing
of software represented 12% of total sales.

    
    Q2 Corporate Announcements
    --------------------------

    -   Bioscrypt announced that Robert M. Douglas replaced Robert L.
        Williams as President and CEO to lead the Company to profitable
        growth.
    -   Bioscrypt was named Global Market Leader for Biometric Physical
        Access Control Readers by IMS, a leading market research provider to
        the global electronics industry.

    Q2 New Client Announcements
    ---------------------------

    -   Saferkidz, www.saferkidz.net, selected the Bioscrypt 3D face solution
        for their parent controlled online child identification system with
        the first deployment taking place at the U.S. Army's Fort Bragg in
        North Carolina.
    -   Pictet & Cie, www.pictet.com, one of the renowned Swiss banks is
        expanding the deployment of the Bioscrypt 3D facial recognition
        solution in support of Card-Free Employee Access System to enable
        secure access for 2,100 employees to the bank's new building.

    Q2 New Product Developments
    ---------------------------

    -   Bioscrypt Launched Version 2.0 of VeriSoft Single Sign On with
        support for user self-service password reset, a simplification of
        Enterprise SSO manageability and enhanced Smart Card capabilities.
    -   Bioscrypt brought the PIV Station to market, a product that has
        become the first biometric smart card reader to receive GSA approval
        as a FIPS 201-compliant contact and contactless CHUID reader.
    

    Conference Call
    ---------------

    The Corporation will be hosting an earnings report conference call today
at 8:00 a.m. Eastern Standard Time. The call can be accessed by phone by
dialing 1-866-334-4934 or at www.vcall.com/IC/CEPage.asp?ID=119174.
    If you are unable to attend the original call, you may subsequently
listen to the playback at 1-866-245-6755, pass code 155774, for one week after
the call or by going to www.vcall.com/IC/CEPage.asp?ID=119174.

    Financial Statements Attached

    About Bioscrypt Inc.

    Bioscrypt is an enterprise access control solution provider, enabling the
unification of physical and logical access with its Door to Desktop(R)
products. Bioscrypt's hardware and software solutions deliver strong
authentication processes to facilities, equipment, IT networks and computer
applications and allow organizations to administer unified identities across
the enterprise.
    Building on its proven expertise in biometric technology and its unique
multi-factor authentication platform, Bioscrypt integrates all major secure
authentication standards, transforming how organizations are bridging the gap
between physical and logical access to create secure working environments.
More information is available at www.bioscrypt.com.

    
    -------------------------------------------------------------------------
    1   - EBITDA is defined by the company as operating revenues less
        operating expenses and therefore reflects earnings before interest,
        foreign exchange, taxes, depreciation and amortization. Bioscrypt
        uses EBITDA, amongst other measures, to assess the operating
        performance of its on-going business, and applies the use of such
        measure consistently from quarter to quarter. The term EBITDA does
        not have a standardized meaning prescribed by Canadian generally
        accepted accounting principles and therefore may not be comparable to
        similarly titled measures presented by other companies. EBITDA should
        not be construed as the equivalent of net cash flows from operating
        activities.
    

    Forward-looking (safe harbour) statement

    Statements made in this news release that relate to future plans, events
or performances are forward-looking statements. Any statement containing words
such as "believes," "plans," "expects," or "intends" and other statements
which are not historical facts contained in this release are forward-looking,
and these statements involve risks and uncertainties and are based on current
expectations. Consequently, actual results could differ materially from the
expectations expressed in these forward-looking statements.

    Bioscrypt and Door to Desktop(R) are registered trademarks and
    Veri-Series and VeriSoft are trademarks of Bioscrypt Inc. All other
    product and company names mentioned are the property of their respective
    owners and are mentioned for identification purposes only.



    
    BIOSCRYPT INC.
    CONSOLIDATED BALANCE SHEETS
    (Unaudited)                                        June 30,  December 31,
    (in U.S. dollars)                                     2007          2006
    -------------------------------------------------------------------------

    ASSETS
    Current Assets
      Cash                                        $  4,435,034  $  4,706,046
      Accounts receivable                            3,729,327     3,890,855
      Inventory                                      3,155,457     2,548,263
      Prepaid expenses and deposits                    686,597       363,487
    -------------------------------------------------------------------------
                                                    12,006,415    11,508,651

    Restricted cash                                     44,216             -
    Fixed assets                                     1,162,984       987,132
    Intangible assets                               10,596,398     5,133,274
    Goodwill                                         6,978,742     6,978,742
    -------------------------------------------------------------------------
                                                  $ 30,788,755  $ 24,607,799
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities
      Accounts payable and accrued liabilities    $  3,363,603  $  3,188,077
      Deferred revenue                                 101,621        50,584
      Current portion of deferred tenant
       inducement                                       62,055        57,312
    -------------------------------------------------------------------------
                                                     3,527,279     3,295,973

    Deferred tenant inducement                         138,505       167,161
    -------------------------------------------------------------------------
                                                     3,665,784     3,463,134
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
    Share capital                                   76,714,203    66,125,742
    Warrants                                         1,475,622        59,420
    Contributed surplus                              3,565,651     2,990,209
    Deficit                                        (54,632,505)  (48,030,706)
    -------------------------------------------------------------------------
                                                    27,122,971    21,144,665
    -------------------------------------------------------------------------
                                                  $ 30,788,755  $ 24,607,799
    -------------------------------------------------------------------------



    BIOSCRYPT INC.
    CONSOLIDATED STATEMENTS
    OF EARNINGS AND DEFICIT      Three months                Six months
    (Unaudited)                 ended June 30,              ended June 30,
    (in U.S. dollars)         2007          2006          2007          2006
    --------------------------------------------- ---------------------------

    Revenue
      Product sales   $  3,710,030  $  4,444,897  $  7,551,769  $  8,259,684
      License,
       royalties and
       services            511,788       352,317       943,203       557,422
    --------------------------------------------- ---------------------------
                         4,221,818     4,797,214     8,494,972     8,817,106
    --------------------------------------------- ---------------------------

    Cost of Revenue
      Product sales      2,194,060     2,479,555     4,315,555     4,514,223
      License,
       royalties and
       services             27,899        20,100        54,297        30,379
    --------------------------------------------- ---------------------------
                         2,221,959     2,499,655     4,369,852     4,544,602
    --------------------------------------------- ---------------------------

    Gross Margin         1,999,859     2,297,559     4,125,120     4,272,504
    --------------------------------------------- ---------------------------

    Expenses
      Research and
       development       1,760,529     1,072,646     3,147,518     1,959,922
      Selling,
       general and
       administration    2,300,732     1,791,722     4,302,284     3,546,729
      Stock
       compensation        203,581       206,779       502,461       369,207
      Restructuring        471,719             -       915,533             -
    --------------------------------------------- ---------------------------
                         4,736,561     3,071,147     8,867,796     5,875,858
    --------------------------------------------- ---------------------------

    Loss Before
     Amortization
     and Other          (2,736,702)     (773,588)   (4,742,676)   (1,603,354)
    --------------------------------------------- ---------------------------

    Amortization
      Fixed assets         143,906        86,276       245,670       171,479
      Intangible
       assets              971,140       502,010     1,632,173     1,000,319
    --------------------------------------------- ---------------------------
                         1,115,046       588,286     1,877,843     1,171,798
    --------------------------------------------- ---------------------------

    Loss Before
     Other              (3,851,748)   (1,361,874)   (6,620,519)   (2,775,152)
    --------------------------------------------- ---------------------------

    Other
      Interest income       62,074        71,455       109,764       132,721
      Interest expense      (2,585)       (6,182)       (3,008)      (17,518)
      Foreign exchange
       (loss) gain         (73,298)        9,210       (88,036)       (1,819)
    --------------------------------------------- ---------------------------
                           (13,809)       74,483        18,720       113,384
    --------------------------------------------- ---------------------------

    Net Loss            (3,865,557)   (1,287,391)   (6,601,799)   (2,661,768)

    Deficit Beginning
     of Period         (50,766,948)  (43,848,295)  (48,030,706)  (42,473,918)
    --------------------------------------------- ---------------------------
    Deficit End of
     Period           $(54,632,505) $(45,135,686) $(54,632,505) $(45,135,686)
    --------------------------------------------- ---------------------------
    --------------------------------------------- ---------------------------

    Loss Per Share
    Basic and
     diluted          $      (0.05) $      (0.02) $      (0.09) $      (0.05)

    Basic and diluted
     weighted average
     number of shares   80,034,003    58,910,429    71,597,002    58,921,567



    BIOSCRYPT INC.
    CONSOLIDATED STATEMENTS
    OF CASH FLOWS                Three months                Six months
    (Unaudited)                 ended June 30,              ended June 30,
    (in U.S. dollars)         2007          2006          2007          2006
    -------------------------------------------------------------------------

    Net Inflow
     (Outflow) of Cash
    Related to the
     Following
     Activities:

    Operating
    Net loss          $ (3,865,557) $ (1,287,391) $ (6,601,799) $ (2,661,768)
    Items not
     affecting cash:
    Amortization:
      Fixed assets         143,906        86,276       245,670       171,479
      Intangible
       assets              971,140       502,010     1,632,173     1,000,319
      Deferred tenant
       inducement          (17,162)      (14,328)      (32,019)      (28,656)
    Non-cash draw-downs
     included in
     restructuring          85,549             -        85,549             -
    Stock compensation     203,581       206,779       502,461       369,207
    Loss on disposal
     of fixed assets             -             -             -         7,894
    -------------------------------------------------------------------------
                        (2,478,543)     (506,654)   (4,167,965)   (1,141,525)

    Changes in non-cash
     operating working
     capital items:
      Accounts
       receivable          882,363      (167,092)      586,644       526,393
      Inventory            258,375        94,406       (91,177)      290,683
      Prepaid expenses
       and deposits         93,147        (8,705)      (38,539)     (108,863)
      Accounts payable
       and accrued
       liabilities      (1,983,370)      432,826    (1,993,837)      (36,552)
      Deferred revenue         744             -       (10,943)       (3,676)
    -------------------------------------------------------------------------
                        (3,227,284)     (155,219)   (5,715,817)     (473,540)
    -------------------------------------------------------------------------

    Investing
      Purchase of
       fixed assets        (24,595)      (27,201)     (105,639)      (69,696)
      Purchase of
       intangible
       assets               (6,487)      (28,005)       (9,529)      (34,676)
      Acquisition
       net of cash
       acquired           (343,882)            -      (851,272)            -
    -------------------------------------------------------------------------
                          (374,964)      (55,206)     (966,440)     (104,372)
    -------------------------------------------------------------------------

    Financing
      Issuance of
       common shares       108,889             -     6,481,826             -
      Issuance cost of
       common shares             -             -       (70,581)            -
    -------------------------------------------------------------------------
                           108,889             -     6,411,245             -
    -------------------------------------------------------------------------

    Net decrease in
     cash               (3,493,359)     (210,425)     (271,012)     (577,912)
    Cash at Beginning
     of Period           7,928,393     6,756,818     4,706,046     7,124,305
    -------------------------------------------------------------------------
    Cash at End of
     Period           $  4,435,034  $  6,546,393  $  4,435,034  $  6,546,393
    -------------------------------------------------------------------------

    Supplementary
     Information
    Interest paid
     during the
     period           $      2,585  $      6,182  $      3,008 $      17,518
    Interest received
     during the
     period           $     51,832  $     71,455  $     99,522 $     132,721
    

    %SEDAR: 00002471E




For further information:

For further information: Laura Slater, High Road Communications, (613)
688-1192, lslater@highroad.com; Stephen McDonald, Bioscrypt Inc., (905)
940-7774, stephen.mcdonald@bioscrypt.com

Organization Profile

BIOSCRYPT INC.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890