Critical Outcome Technologies Inc.
TSX VENTURE : COT

Critical Outcome Technologies Inc.

September 28, 2007 15:29 ET

Critical Outcome Technologies Inc. Reports First Quarter 2008 Financial Results

LONDON, ONTARIO--(Marketwire - Sept. 28, 2007) - Critical Outcome Technologies Inc. (TSX VENTURE:COT) today announced its financial results for the first quarter ended July 31, 2007 of fiscal 2008.

There were no revenues from operations during the quarter as the Company reported a net loss for the period of $500,458 or $0.01 per share compared to a net loss of $163,088 or $0.01 per share for the quarter ended July 31, 2006. There were three major expenses in the quarter which accounted for the majority of the increased loss of $359,086 over the comparable period in 2006: a non-cash expense for stock option compensation recorded in the amount of $159,909 resulting from stock options granted in May 2007, an increase in salaries and benefits of $79,378 related to increased staffing levels and a $55,621 increase in professional fees for legal and accounting costs.

These year to date results reflect the increased business activity of the Company in the quarter as the Company focused on moving its molecular libraries forward in development and marketing compared to the first quarter of fiscal 2007 where the predominant activity was raising the capital necessary to execute its business plans.

The Company realized net proceeds of $939,559 from the exercise of 1,571,665 common share warrants during the quarter. At July 31, 2007 the Company had $2,925,545 in cash and cash equivalents.

Highlights during the quarter included:

- Positive pre-clinical results from the small cell lung cancer library (in collaboration with DDP Therapeutics).

- Progress in the development of the multiple sclerosis molecules as three molecules entered pre-clinical confirmatory animal efficacy testing.

- Favourable discussions with prospective Pharma partners on a variety of lead molecule identification pilot projects.

About Critical Outcome Technologies Inc. (COTI)

COTI is formed around a unique computational platform technology called CHEMSAS®, which allows for the accelerated identification, profiling and optimization of targeted small molecules potentially effective in the treatment of human diseases for which current therapy is either lacking or ineffective. COTI's business is focused on the discovery and pre-clinical development of libraries of optimized lead molecules for the treatment of specific cancers, HIV and multiple sclerosis. Currently, five targeted libraries of lead compounds (small cell lung cancer, multiple sclerosis, HIV integrase inhibitors, colorectal cancer, and acute myelogenous leukemia in adults) are under active development.

For more information on COTI, visit www.criticaloutcome.com.



Critical Outcome Technologies Inc.
(a development stage company)
Interim Balance Sheets

---------------------------------------------------------------------------
---------------------------------------------------------------------------
Unaudited Audited
July 31, April 30,
2007 2007
---------------------------------------------------------------------------

Assets

Current assets:
Cash and cash equivalents $ 2,925,545 $ 2,417,801
Other receivables 89,260 76,655
Prepaid expenses and deposits 17,745 28,095
---------------------------------------------------------------------------
3,032,550 2,522,551

Equipment (note 2) 91,065 52,560
Patents (note 3) 139,356 134,298
Trademark (note 4) 653 870
Investment in DDP Therapeutics (note 5) 5,107 1
---------------------------------------------------------------------------
$ 3,268,731 $ 2,710,280
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable and accrued liabilities $ 151,322 $ 179,091
Due to shareholders (note 6) 110,781 118,631
Notes payable (note 7) 20,000 20,000
Current portion of capital lease obligations
(note 8) 15,304 20,244
---------------------------------------------------------------------------
297,407 337,966
---------------------------------------------------------------------------

Capital lease obligations (note 8) 21,287 21,287

Shareholders' equity
Share capital and warrants (note 9) 4,976,724 4,037,165
Contributed surplus (note 10) 835,378 675,469
Deficit 2,862,065 2,361,607
---------------------------------------------------------------------------
2,950,037 2,351,027
---------------------------------------------------------------------------

Commitments (note 14)
Subsequent events (note 17)
---------------------------------------------------------------------------
$ 3,268,731 $ 2,710,280
---------------------------------------------------------------------------



Critical Outcome Technologies Inc.
(a development stage company)
Interim Statements of Operation and Deficit
(Unaudited)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Three Months Ended
July 31,
2007 2006
Revenues:
Contract services $ - $ 2,500
Screening services - -
---------------------------------------------------------------------------
- 2,500
---------------------------------------------------------------------------

Expenses:
Stock option compensation 159,909 -
Salaries and benefits 159,123 79,745
Professional fees 92,577 36,956
Marketing 38,849 20,735
Amortization of furniture and equipment 21,440 8,312
Synthesis costs 18,889 -
Office and general 11,101 4,633
Insurance 10,134 -
Rent 4,506 4,582
Corporate governance 4,094 -
Interest and bank charges 2,039 4,588
Computer expense 1,795 1,819
Amortization of trademark 218 218
Research and product development - 9,000
Reorganization costs - (5,000)
---------------------------------------------------------------------------
524,674 165,588
---------------------------------------------------------------------------

Loss before other income 524,674 163,088

Other income
Investment tax credit refund - -
Interest income 24,216 -
---------------------------------------------------------------------------
24,216 -
---------------------------------------------------------------------------

Loss 500,458 163,088

Deficit, beginning of the period 2,361,607 931,624

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

Deficit, end of the period $ 2,862,065 $ 1,094,712
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Basic and diluted loss per common share $ 0.01 $ 0.01
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Weighted average number of common shares
outstanding 37,756,637 22,373,332
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Critical Outcome Technologies Inc.
(a development stage company)
Interim Statements of Operation and Deficit
(Unaudited)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Fiscal 2008 YTD Cumulative
Three Months Ended period April 30,
July 31, 1999 (inception)
2007 2006 to July 31, 2007
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Revenues:
Contract services $ - $ 2,500 $ 32,500
Screening services - - 2,500
- 2,500 35,000
Expenses:
Stock option compensation 159,909 - 835,378
Salaries and benefits 159,123 79,745 756,055
Professional fees 92,577 36,956 425,934
Marketing 38,849 20,735 195,707
Amortization of furniture and
equipment 21,440 8,312 77,304
Synthesis costs 18,889 - 401,449
Office and general 11,101 4,633 59,132
Insurance 10,134 - 22,826
Rent 4,506 4,582 57,574
Corporate governance 4,094 - 18,843
Interest and bank charges 2,039 4,588 27,404
Computer expense 1,795 1,819 57,966
Amortization of trademark 218 218 3,698
Research and product
development - 9,000 54,628
Reorganization costs - (5,000) 106,544
---------------------------------------------------------------------------
524,674 165,588 3,100,442
---------------------------------------------------------------------------

Loss before other income 524,674 163,088 3,065,442

Other income
Investment tax credit refund - - 137,615
Interest income 24,216 - 65,762
---------------------------------------------------------------------------
24,216 - 203,377
---------------------------------------------------------------------------

Loss 500,458 163,088 2,862,065

Deficit, beginning of the
period 2,361,607 931,624 -

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

Deficit, end of the period $ 2,862,065 $ 1,094,712 $ 2,862,065
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Basic and diluted loss per
common share $ 0.01 $ 0.01
--------------------------------------------------------
--------------------------------------------------------
Weighted average number of
common shares outstanding 37,756,637 22,373,332
--------------------------------------------------------
--------------------------------------------------------



Critical Outcome Technologies Inc.
(a development stage company)
Interim Statements of Cash Flows
(Unaudited)

---------------------------------------------------------------------------
---------------------------------------------------------------------------
Three Months Ended
July 31,
2007 2006
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Cash provided by (used in):

Operations:
Loss $ 500,458 $ 163,088
Items not involving cash:
Stock option compensation 159,909 -
Amortization of trademark 218 218
Amortization of furniture and equipment 21,440 8,312
Change in non-cash operating working capital (note
13) (30,025) 230,983
---------------------------------------------------------------------------
(348,916) 76,425
---------------------------------------------------------------------------

Investing activities:
Additions to furniture and equipment (59,945) -
Investment in DDP Therapeutics (5,106) -
Additions to patents and trademark (5,058) (8,950)
---------------------------------------------------------------------------
(70,109) (8,950)
---------------------------------------------------------------------------

Financing activities:
Issuance of common shares and warrants 939,559 45
Research advances - -
Deferred financing costs on private placement - (222,500)
Notes payable and other advances - -
Repayment of obligation under capital lease (4,940) (3,943)
Due to shareholders (7,850) 11,882
---------------------------------------------------------------------------
926,769 (214,516)
---------------------------------------------------------------------------

Increase in cash 507,744 (147,041)

Cash and cash equivalents, beginning of period 2,417,801 170,464
---------------------------------------------------------------------------

Cash and cash equivalents, end of period $ 2,925,545 $ 23,423
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Represented by:
Cash $ 425,545 $ 23,423
Cash equivalent 2,500,000 -
---------------------------------------------------------------------------

$ 2,925,545 $ 23,423
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Supplemental cash flow information:
Interest paid $ 20,988 $ 299
Non-cash transactions:
Acquisition of equipment under capital lease $ - $ -
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Critical Outcome Technologies Inc.
(a development stage company)
Interim Statements of Cash Flows
(Unaudited)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Fiscal 2008 YTD Cumulative
Three Months Ended period April 30,
July 31, 1999 (inception)
2007 2006 to July 31, 2007
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Cash provided by (used in):

Operations:
Loss $ 500,458 $ 163,088 $ 2,862,065
Items not involving cash:
Stock option compensation 159,909 - 835,378
Amortization of trademark 218 218 3,698
Amortization of furniture and
equipment 21,440 8,312 77,304
Change in non-cash operating
working capital (note 13) (30,025) 230,983 15,998
---------------------------------------------------------------------------
(348,916) 76,425 (1,929,687)
---------------------------------------------------------------------------

Investing activities:
Additions to furniture and
equipment (59,945) - (88,857)
Investment in DDP Therapeutics (5,106) - (5,107)
Additions to patents and
trademark (5,058) (8,950) (143,706)
---------------------------------------------------------------------------
(70,109) (8,950) (237,670)
---------------------------------------------------------------------------

Financing activities:
Issuance of common shares and
warrants 939,559 45 4,706,979
Research advances - - 269,745
Deferred financing costs on
private placement - (222,500) -
Notes payable and other advances - - 20,000
Repayment of obligation under
capital lease (4,940) (3,943) (14,603)
Due to shareholders (7,850) 11,882 110,781
---------------------------------------------------------------------------
926,769 (214,516) 5,092,902
---------------------------------------------------------------------------

Increase in cash 507,744 (147,041) 2,925,545

Cash and cash equivalents,
beginning of period 2,417,801 170,464 -
---------------------------------------------------------------------------

Cash and cash equivalents, end
of period $ 2,925,545 $ 23,423 $ 2,925,545
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Represented by:
Cash $ 425,545 $ 23,423 425,545
Cash equivalent 2,500,000 - 2,500,000
---------------------------------------------------------------------------

$ 2,925,545 $ 23,423 $ 2,925,545
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Supplemental cash flow
information:
Interest paid $ 20,988 $ 299 $ 23,642
Non-cash transactions:
Acquisition of equipment under
capital lease $ - $ - $ 62,274
---------------------------------------------------------------------------
---------------------------------------------------------------------------


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

Contact Information