Hamilton Thorne announces third quarter results

TSX VENTURE: HTL

TORONTO , Nov. 24 /CNW/ - Hamilton Thorne Ltd. (TSX-V: HTL), formerly Calotto Capital Inc., a leading provider of advanced laser systems and instruments for the stem cell research and fertility clinic markets, today reported operational and financial results for the third quarter ended September 30, 2009 .

    
    Q3 2009 Highlights

    -   Revenue was $1.46 million compared with $1.43 million in Q3 2008
    -   Gross profit margin was 66.3 percent compared with 66.1 percent in Q3
        2008
    -   Net loss reduced to $148,000 compared to $283,000 in Q3 2008
    -   Launched Staccato, an advanced laser system for the automated
        processing of stem cell colonies to enhance purity and scale-up
    -   Two new peer-reviewed scientific articles published in Nature by
        customers that reference Hamilton Thorne instruments as part of the
        research methods
    -   New customers include Weill Cornell Medical Center and an additional
        lab within theUniversity of California
    

"With our recent public listing complete, we have embarked on this next stage of our corporate strategy with a focus on sales and marketing of our existing Zilos-tk(R) and XYClone(R) products and generating traction for our recently launched Staccato laser instrument," said Meg Spencer , Chief Executive Officer of Hamilton Thorne Ltd. "While we anticipate our results will continue to reflect the quarter to quarter variability of the business at this stage, we are confident in our long-term prospects as a pre-eminent supplier of the instruments and tools necessary for the exciting field of stem cell research. Staccato is a great example our innovative product offering that targets this growing market. It enhances the scale-up of pure stem cell colonies by providing researchers with an instrument that facilitates the process of separating undesirable stem cells from a colony in scale-up. Our direct sales team is now introducing the benefits of Staccato, including the reduction in procedure time and the elimination of contamination and damage to cells, to key opinion leaders in the stem cell research community."

Financial Results

As the financial results relate to a period preceding the completion of Hamilton Thorne's Qualifying Transaction, these results represent the performance of Hamilton Thorne, Inc. on a standalone basis, and should be read in conjunction with Calotto's financial statements for the three-month period ended July 31, 2009 and its Filing Statement relating to the Qualifying Transaction.

All amounts are in US dollars, unless specified otherwise, and results expressed in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP).

For the three-month period ended September 30, 2009 , the Company recorded revenue of $1,463,000 , compared with $1,426,000 for the same period last year. For the nine-month period ended September 30, 2009 , revenue was $3,598,000 compared to $4,102,000 for the corresponding period last year.

For the three-month period ended September 30, 2009 , total operating expenditures were $1,043,000 , compared with $1,150,000 for the same period last year. For the nine-month period ended September 30, 2009 , total operating expenditures were $3,092,000 compared with $3,390,000 for the corresponding period in 2008.

Research and development (R&D) expenses for the three-month period ended September 30, 2009 were $193,000 , compared with $205,000 for the same period last year. R&D expenses for the nine-month period in 2009 were $590,000 , compared with $613,000 for the corresponding period in 2008. Sales and marketing expenses for the three-month period ended September 30, 2009 were $524,000 , compared with $580,000 for the same period last year. Sales and marketing expenses for the nine-month period ended September 30, 2009 were $1,434,000 , compared with $1,693,000 for the corresponding period in 2008. General and administrative expenses for the three-month period ended September 30, 2009 were $326,000 , compared with $365,000 for the same period last year. General and administrative expenses for the nine-month period ended September 30, 2009 were $1,067,000 , compared with $1,085,000 for the corresponding period last year.

Net loss for the three-month period ended September 30, 2009 , totalled $148,000 , compared with $283,000 for the corresponding period in 2008. For the nine-month period ended September 30, 2009 , net loss was $983,000 , compared with $1,001,000 for the corresponding period last year.

As at September 30, 2009 , the Company's cash and cash equivalents amounted to $46,000 .

Subsequent to the end of the quarter, the Company completed a qualifying transaction on October 28, 2009 and concurrently with the merger, completed financings relating to a Private Placement and debt conversion, in the gross amount of CDN$2,200,000. Upon the Exchange's issuance of its Final Exchange Bulletin approving the qualifying transaction, the Company ceased to be a Capital Pool Company, and its trading symbol on the TSX-Venture is now "HTL".

The financial statements are available on www.sedar.com.

About Hamilton Thorne Ltd.

Hamilton Thorne's advanced laser systems and instruments are rapidly emerging as the dominant products to facilitate precise procedures in the stem cell research and fertility clinic markets. Hamilton Thorne's lead products, the ZILOS-tk and XYClone laser systems, attach to standard inverted microscopes and operate as robotic micro-surgeons, significantly reducing time and increasing efficiency in key in-vitro fertilization, stem cell, embryo, reproductive toxicology and living cell procedures.

Hamilton Thorne's growing customer base includes pharmaceutical companies, biotechnology companies, fertility clinics, university research centers and other commercial and academic research establishments worldwide. Current customers include world-leading research labs such as Harvard University, MIT, Yale, DuPont, Monsanto, Charles River Labs, Jackson Labs , Merck, Novartis, Pfizer, Oxford University and Cambridge.

    
    Neither the exchange nor its regulation services provider (as that term
    is defined in the policies of the exchange) accepts responsibility for
    the adequacy or accuracy of this release.
    

Certain information in this press release may contain forward-looking statements. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in filings by the company with the Canadian securities regulators, which filings are available at www.sedar.com.

    
    Financial results included below:

                                                              Balance Sheets
                                                      (Unaudited and in US $)

                                                 September 30,   December 31,
                                                     2009           2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Assets

    Current assets:
      Cash                                        $     46,470  $      5,029
      Accounts receivable, less allowance
       for doubtful accounts of $10,000 at
       September 30, 2009 and $5,000
       at December 31, 2008                            850,081       958,239
      Inventories, net                                 504,801       633,212
      Prepaid expenses and other current assets         40,852        45,161
      Note receivable, officer                          23,599        22,963
    -------------------------------------------------------------------------

        Total current assets                         1,465,803     1,664,604

    Property and equipment, net                        114,322       131,920

    Other assets                                       509,945       116,881
    -------------------------------------------------------------------------

       Total assets                               $  2,090,070  $  1,913,405
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities, Redeemable Convertible
     Preferred Stock and Stockholders' Deficit

    Current liabilities:
      Notes payable, banks                        $          -  $  4,970,000
      Notes payable, shareholder                        25,000        25,000
      Notes payable, officers                           55,964        56,069
      Notes payable, other                               8,028             -
      Accounts payable, trade                        1,274,979       743,203
      Accrued expenses and other
       current liabilities                             385,618       350,348
      Current portion of obligations
       under capital lease                               5,888         5,888
      Deferred revenue                                  30,027        22,382
    -------------------------------------------------------------------------

        Total current liabilities                    1,785,504     6,172,890

    Subordinated notes payable                         525,000             -
    Notes payable, banks                             5,000,000             -
    Obligation under capital lease                       9,362        14,725
    -------------------------------------------------------------------------

        Total liabilities                            7,319,866     6,187,615

    Commitments and contingencies

    Series C-2 redeemable convertible preferred
     stock, $.01 par value: 5,809 shares
     authorized, issued and outstanding at
     (liquidation value of $3,712,708)               2,087,584     1,990,078

    Stockholders' deficit:
      Preferred stock, 33,622 shares authorized
        Series A convertible, $.01 par value:
         6,243 shares authorized, issued
         and outstanding (liquidation value
         of $2,193,478)                              1,150,039     1,150,039
        Series B convertible, $.01 par
         value: 8,676 shares authorized,
         issued and outstanding (liquidation
         value of $7,267,278)                       11,180,413    11,180,413
        Series C-1 convertible, $.01 par
         value: 12,894 shares authorized
         and 11,789 shares issued and
         outstanding (liquidation value
         of $10,740,497)                             5,294,768     5,294,768
      Common stock, $.01 par value,
       voting, 166,378 shares authorized and
       8,500 shares issued
       and outstanding                                      85            85
      Additional paid-in capital                     2,878,682     2,948,408
      Accumulated deficit                          (27,821,367)  (26,838,001)
    -------------------------------------------------------------------------

        Total stockholders' deficit                 (7,317,380)   (6,264,288)
    -------------------------------------------------------------------------

        Total liabilities, redeemable
         convertible preferred stock and
         stockholders' deficit                    $  2,090,070  $  1,913,405
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                                        Statements of Operations and Deficit
                                                      (Unaudited and in US $)


    Nine and three
     months ended              Nine Months                Three Months
     September 30,         2009          2008          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Revenues          $  3,597,533  $  4,101,593  $  1,463,109  $  1,426,310

    Cost of revenues     1,316,211     1,492,646       493,138       483,388
    -------------------------------------------------------------------------

        Gross profit     2,281,322     2,608,947       969,971       942,922
    -------------------------------------------------------------------------

    Operating expenses:
      Research
       and development     590,293       612,757       192,596       204,887
      Selling and
       marketing         1,434,464     1,692,518       524,460       580,058
      General and
       administration    1,067,305     1,084,750       325,652       365,175
        Total operating
         expenses        3,092,062     3,390,025     1,042,708     1,150,120

    Loss from
     operations           (810,740)     (781,078)      (72,737)     (207,198)
    -------------------------------------------------------------------------

    Interest (expense)
     income:
    Interest expense      (173,262)     (221,024)      (75,161)      (76,511)
    Interest income            636           998           214           303
    -------------------------------------------------------------------------

        Total interest
         expense, net     (172,626)     (220,026)      (74,947)      (76,208)
    -------------------------------------------------------------------------

    Loss from
     continuing
     operations           (983,366)   (1,001,104)     (147,684)     (283,406)

    Loss from
     discontinued
     operations                  -       (26,258)            -             -
    -------------------------------------------------------------------------

    Net loss          $   (983,366) $ (1,027,362) $   (147,684) $   (283,406)


    Deficit,
     beginning
     of period         (26,838,001)  (25,747,979)  (27,673,683)  (26,517,002)

    Spin-off of
     molecular
     biology
     business                    -       (25,067)            -             -

    Deficit, end
     of period        $(27,821,367) $(26,800,408) $(27,821,367) $(26,600,408)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                                                    Statements of Cash Flows
                                                      (Unaudited and in US $)


    Nine and three
     months ended              Nine Months                Three Months
     September 30,         2009          2008          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash flows from
     operating
     activities:
      Net loss        $   (983,366)   (1,027,362)     (147,684)     (283,406)
      Adjustments
       to reconcile
       net loss to
       net cash used
       in operating
       activities:
        Depreciation
         and amorti-
         zation             84,678       108,391        27,276        33,139
        Share-based
         compensation
         expense            27,780        29,200         8,330         9,700
        Changes in
         operating
         assets and
         liabilities:
          Accounts
           receivable      108,158       409,521      (367,418)      193,048
          Inventories      128,411        60,863       122,638        24,458
          Prepaid
           expenses
           and other
           current
           assets            3,673        38,415        11,835        22,505
          Other
           assets         (402,127)       (7,771)     (392,725)       (5,059)
          Accounts
           payable,
           trade           531,776         1,406       553,362         2,710
          Accrued
           expenses
           and other
           current
           liabilities      35,270      (331,365)      (10,677)      (42,479)
          Deferred
           revenue           7,645         4,127        11,000         1,931
    -------------------------------------------------------------------------

          Net cash
           used in
           operating
           activities     (458,102)     (714,575)     (184,063)      (43,453)
    -------------------------------------------------------------------------

    Cash flows
     from investing
     activities:
      Purchase of
       property and
       equipment           (58,017)     (135,982)            -             -

    -------------------------------------------------------------------------

          Net cash
           used in
           investing
           activities      (58,017)     (135,982)            -             -
    -------------------------------------------------------------------------

    Cash flows
     from financing
     activities:
      Proceeds from
       notes payable,
       banks               140,000       738,113        10,000       180,000
      Principal
       payments on
       notes payable,
       banks              (110,000)            -             -             -
      Proceeds from
       subordinated
       notes payable       525,000             -       225,000             -
      Proceeds
       from notes
       payable,
       other                17,714        44,107             -             -
      Principal
       payments on
       notes payable,
       other                (9,686)      (14,828)       (5,858)      (22,158)
      Principal
       payments on
       obligations
       under capital
       leases               (5,363)       (3,740)       (1,535)       (1,293)
      Principal
       payments on
       notes payable,
       officers               (105)         (979)            6          (833)
      Principal
       payments on
       installment
       notes                     -       (13,377)            -        (4,530)
    -------------------------------------------------------------------------

          Net cash
           provided
           by financing
           activities      557,560       907,178       227,613       151,186
    -------------------------------------------------------------------------

    Net increase
     in cash                41,441        56,621        43,550       107,733

    Cash at
     beginning
     of period               5,029        52,998         2,920         1,886
    -------------------------------------------------------------------------

    Cash at end
     of period        $     46,470  $    109,619  $     46,470  $    109,619
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

%SEDAR: 00025407E

For further information: David Wolf, President, Hamilton Thorne Ltd., [phone], [email protected]; Ross Marshall, The Equicom Group, [phone] x238, [email protected]