VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov 28, 2017) - Novoheart Holdings Inc. ("Novoheart" or the "Company") (TSX VENTURE:NVH) today announced financial results for the three months ended September 30, 2017. Amounts, unless specified otherwise, are expressed in Canadian dollars and are in accordance with International Financial Reporting Standards (IFRS).
"This first quarter as a public company was very much about ensuring the long-term viability of Novoheart well into the future and I adamantly believe we accomplished this through several channels," said Dr. Ronald Li, CEO of Novoheart. "The initial capital secured in the first quarter has allowed us to establish locations in both North America and Hong Kong, two locations that are critical for us to be active in. Furthermore, we have actively invested in infrastructure that will allow us to be at the forefront of innovation and further advance our commercial scalability in the near future."
Q1 2018 Highlights:
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Completed listing on the TSX Venture Exchange by way of a reverse takeover and a concurrent financing of C$7.15 million
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New R&D location at The Cove in Irvine, California
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Expansion of lab and office facilities at Hong Kong Science Park
Listing on the TSX Venture Exchange
On September 27, 2017, Novoheart completed its reverse takeover transaction with Woodrose Venture Corporation ("Woodrose"), a TSX-V listed entity. Pursuant to the agreement, the Company agreed to sell to Woodrose all of its outstanding shares and the shareholders of Novoheart received 5,200 post-consolidation Woodrose shares for each Novoheart share. Concurrent with the reverse takeover transaction, Novoheart completed a non-brokered private placement of C$7,150,000 through the issuance of 14,300,000 subscription receipts at a price of C$0.50 per subscription receipt. Each subscription receipt automatically converted into one Woodrose post-consolidation share. Woodrose paid a finder's fee in connection with the subscription receipt of C$486,018 and issued 972,037 finder's warrants. Novoheart began trading on the TSX Venture Exchange under the symbol "NVH" on October 3, 2017.
New R&D location at the Cove at Irvine, California
On October 25, 2017, Novoheart announced that it has opened a new US location at The Cove in Irvine, California. The Cove is home to University of California's Applied Innovation - a public-private endeavour to accelerate the commercialization of technology and other world-class discoveries at UCI - as well as a number of renowned VC firms, entrepreneurs and fast-growth technology organizations. It features 46,000 square feet of state-of-the-art technological facilities and collaborative office space and offers Novoheart direct access to a number of strategic partners as well as to unique and innovative technologies and talent at the forefront of drug discovery.
Expansion of lab and office facilities at Hong Kong Science Park
On July 31, 2017, Novoheart signed a lease agreement with the Hong Kong Science and Technology Park Corporation, and commenced the expansion and renovation of its operations in Phase 3 of Hong Kong Science Park. The new Novoheart location will be a 5,300 sq ft state-of-the-art facility with integrated office and laboratory space, fully equipped for stem cell culture, tissue engineering, hardware and software development, and drug screening applications of the MyHeartTM Platform. The new facilities are anticipated to open in December 2017. This expansion represents a significant boost in capacity for accepting revenue-generating commercial contracts and allowing further R&D and IP generation to strengthen the Company's position in the drug screening and phenotyping space.
Financial Results for the First Quarter of 2018
The Company recorded net loss of C$6,272,569 (loss per share of C$0.09) for the three months ended September 30, 2017 compared to a net loss of C$436,122 (loss per share of C$36.85) for the three months ended September 30, 2016. The increase in net loss was due primarily to the completion of the reverse takeover transaction, for which the Company incurred a non-cash loss on completion of reverse takeover of $5,213,597.
Operating expenses for the first quarter of 2018 was C$1,083,466 compared to operating expense of C$495,024 for the first quarter of 2017. The increase in operating expenses is primarily related to an increase in intellectual property and patent expenses, and general and administrative expenses. The increase in intellectual property and patent expenses is due to fees incurred for the IP licensing agreements that the Company entered into in calendar year 2017. The increase in general and administrative expenses is primarily due to increases in professional and regulatory fees due to the reverse takeover listing as well as the increase in personnel costs resulting from the build-out of the Company's management team.
The Company earned other income of C$56,809 in the three months ended Sept 30, 2018 compared to other income of C$66,963 in the three months ended Sept 30, 2017. Other Income is earned from the agreement with a global pharmaceutical partner.
Liquidity and Outstanding Share Capital
As at September 30, 2017, the Company had cash of C$6,954,574. The Company closed a subscription receipt offering for gross proceeds of C$7,150,000 in the first quarter of 2018. As at November 28, 2017, there were 93,462,018 common shares issued and outstanding, and 4,203,576 common shares issuable upon the exercise of outstanding stock options (of which none are exercisable) at an exercise price of C$0.50 per share. The Company also has 972,037 purchase warrants outstanding with an exercise price of C$0.50, expiring in September 2019.
ABOUT NOVOHEART HOLDINGS INC.
Novoheart is a global stem cell biotechnology company dedicated to human heart engineering with offices and laboratories in the United States, Canada and Hong Kong. Novoheart's scientific team has pioneered a range of bioengineering technologies collectively known as the MyHeart™ platform, including the world's first human mini-heart "novoHeart™" (otherwise known as a human-heart-in-a-jar) that is fully capable of pumping and ejecting fluid. Novoheart believes that its proprietary platform uniquely positions the Company to enter into commercial partnerships with leading pharmaceuticals and research institutions to deliver pre-clinical cardiotoxicity screening and to develop custom-tailored engineered heart constructs for disease modeling and drug discovery. Novoheart also believes that the MyHeart™ platform is well-positioned for the potential development of cell-based cardiac regenerative therapies with superior safety and efficacy.
Common shares of Novoheart is traded on the TSX Venture Exchange under the symbol "NVH".
Cautionary Note Regarding Forward-Looking Statements
Information set forth in this news release may involve forward-looking statements under applicable securities laws. Forward-looking statements are statements that relate to future, not past, events. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions. All statements, other than statements of historical fact, included herein including, without limitation; statements about the Company's future plans, its goals and expectations, and the potential applications its MyHeart™ platform are forward-looking statements. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the risks identified in the management discussion and analysis section of Novoheart Holdings Inc.'s interim and most recent annual financial statement or other reports and filings with the TSX Venture Exchange and applicable Canadian securities regulators. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the respective companies undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements.
| |
| NOVOHEART HOLDINGS INC. |
| Condensed Consolidated Interim Statement of Financial Position (unaudited) |
| (Expressed in Canadian dollars) |
| |
| | September 30,
2017 | | June 30,
2017 | |
| ASSETS | | | | |
| Current | | | | |
| | Cash and cash equivalents | $ | 6,954,574 | | $ | 1,319,748 | |
| | Accounts and other receivables | | 542,480 | | | 602,240 | |
| | Prepaid expenses and deposits | | 211,186 | | | 98,255 | |
| | Due from related parties | | - | | | 13,874 | |
| | | 7,708,240 | | | 2,034,117 | |
| Long-term prepayment | | 248,542 | | | - | |
| Equipment | | 189,475 | | | 214,934 | |
| | $ | 8,146,257 | | $ | 2,249,051 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | |
| Current | | | | | | |
| | Accounts payable and accrued liabilities | $ | 664,815 | | $ | 443,182 | |
| | Due to related parties | | 104,188 | | | 39,554 | |
| | | 769,003 | | | 482,736 | |
| Deferred government grants | | 56,033 | | | 64,013 | |
| | | 825,036 | | | 546,749 | |
| Shareholders' Equity | | | | | | |
| Share capital | | 17,426,693 | | | 15,213 | |
| Contributed surplus | | 325,494 | | | 5,804,661 | |
| Accumulated other comprehensive income | | 61,346 | | | 102,171 | |
| Accumulated deficit | | (10,492,312 | ) | | (4,219,743 | ) |
| | | 7,321,221 | | | 1,702,302 | |
| | $ | 8,146,257 | | $ | 2,249,051 | |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
| | |
| NOVOHEART HOLDINGS INC. | |
| Condensed Consolidated Interim Statements of Loss and Comprehensive Loss | |
| (unaudited) | |
| (Expressed in Canadian dollars, except number of common shares) | |
| | | |
| | Three months ended |
| | September 30,
2017 | | September 30,
2016 | |
| OPERATING EXPENSES | | | | |
| | Research and development | $ | 238,796 | | $ | 259,968 | |
| | Intellectual property and patent | | 257,558 | | | 18,244 | |
| | General and administrative | | 564,257 | | | 200,976 | |
| | Share-based compensation | | 4,722 | | | - | |
| | Depreciation | | 18,133 | | | 15,836 | |
| | | 1,083,466 | | | 495,024 | |
| LOSS FROM OPERATIONS | | (1,083,466 | ) | | (495,024 | ) |
| Government grants | | 5,377 | | | 5,858 | |
| Other income | | 56,809 | | | 66,963 | |
| Finance expense | | (505 | ) | | (173 | ) |
| Foreign exchange gain (loss) | | (37,187 | ) | | (13,746 | ) |
| Non-cash loss on completion of reverse takeover | | (5,213,597 | ) | | - | |
| | | (5,189,103 | ) | | 58,902 | |
| NET LOSS FOR THE QUARTER | | (6,272,569 | ) | | (436,122 | ) |
| OTHER COMPREHENSIVE INCOME (LOSS) | | | | | | |
| | Foreign currency translation adjustment | | (40,825 | ) | | (37,747 | ) |
| COMPREHENSIVE LOSS FOR THE QUARTER | | (6,313,394 | ) | | (473,869 | ) |
| Loss per share - Basic and Diluted | $ | (0.09 | ) | $ | (36.85 | ) |
| Weighted average number of shares outstanding - basic and diluted | | 69,444,383 | | | 11,834 | |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
| | |
| NOVOHEART HOLDINGS INC. | |
| Condensed Consolidated Interim Statements of Cash (unaudited) | |
| (Expressed in Canadian dollars) | |
| | |
| | Three months ended | |
| | September 30,
2017 | | September 30,
2016 | |
| | $ | | $ | |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | |
| | Net loss for the period | (6,272,569 | ) | (436,122 | ) |
| | Items not affecting cash: | | | | |
| | | Non-cash loss on completion of reverse takeover | 5,213,597 | | - | |
| | | Share-based compensation | 4,722 | | - | |
| | | Depreciation | 18,133 | | 15,836 | |
| | (1,036,117 | ) | (420,286 | ) |
| | Changes in non-cash working capital items: | | | | |
| | | Decrease/(increase) in accounts and other receivables | 55,948 | | (47,997 | ) |
| | | Decrease/(increase) in prepaid expenses | (113,186 | ) | 35,862 | |
| | | Increase/(decrease) in accounts payable and accrued liabilities | 107,953 | | (75,326 | ) |
| | | Increase/(decrease) in due to related parties | 115,170 | | (108,854 | ) |
| | | Decrease in deferred income | - | | (34,132 | ) |
| | | Decrease in deferred government grants | (5,377 | ) | (5,858 | ) |
| | 160,508 | | (236,305 | ) |
| Net cash used in operating activities | (875,609 | ) | (656,591 | ) |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | |
| | Prepayment for equipment | (244,178 | ) | - | |
| | Acquisition of equipment | (7,105 | ) | - | |
| | Net cash used in investing activities | (251,283 | ) | - | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | |
| | Proceeds from share issuance, net | 6,663,982 | | | |
| | Cash acquired in RTO | 112,662 | | - | |
| | Net cash provided by financing activities | 6,776,644 | | - | |
| Change in cash during the period | 5,649,752 | | (656,591 | ) |
| Effect of exchange rate changes on cash held in a foreign currency | (14,926 | ) | 24,936 | |
| Cash and cash equivalents, beginning of period | 1,319,748 | | 2,460,038 | |
| Cash and cash equivalents, end of period | 6,954,574 | | 1,828,383 | |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
