MonoGen, Inc.
TSX : MOG

MonoGen, Inc.

November 12, 2007 08:55 ET

MonoGen Announces Financial Results for the Three-Month and Nine-Month Periods Ended September 30, 2007

CHICAGO, ILLINOIS--(Marketwire - Nov. 12, 2007) - This Press Release is Not for Distribution in the United States

MonoGen, Inc., ("Corporation") (TSX:MOG) today announced the results of its unaudited interim consolidated financial statements for the three-month and nine-month periods ended September 30, 2007. The unaudited interim consolidated financial statements, including management's discussion and analysis ("MD&A") of the results will be filed with SEDAR (www.sedar.com).

On October 31, 2006 we acquired our subsidiary, also called MonoGen, Inc. (the "Transaction").

Overall Performance

For the three-month and nine-month periods ended September 30, 2007, we reported a consolidated net loss from operations of $10,893,000 ($0.06 per share) and $20,563,000 ($0.12 per share) compared to consolidated net losses from operations of $1,801,000 ($0.02 per share) and $6,659,000 ($0.09 per share) for the same periods in 2006.

The net loss for the three-month and nine-month periods ended September 30, 2007 and 2006 differ primarily as a result of the method of recording our equity share of the losses in MonoGen USA. In the first nine months of 2006, a 41% share of the losses in MonoGen USA, $5,863,000, was included in our net loss as an equity pick-up. In the first nine months of 2007, MonoGen USA's results of operations, cash flows and financial position were fully consolidated.

Interest income earned on short-term investments in the first nine months of 2007 was $830,000 compared with $2,118,000 in 2006. In the first three quarters of 2006, non-cash interest revenue of $1,783,000 arose from the convertible notes issued by MonoGen USA. Following the completion of the Transaction, this interest income was eliminated on consolidation.

During the first three quarters of 2007, general and administrative expenses increased to $6,238,000 from $1,030,000 for the same period in 2006. The increase was due mostly to the consolidation of MonoGen USA's results of operations in 2007 but also due to the accrual of $1,562,000, the present value of the severance package granted to the former Chairman and CEO of the Corporation. In 2007, general and administrative expenses included non-cash stock-based compensation expense of $1,106,000 compared to $312,000 in 2006.

As a result of the Transaction, for the first nine months of 2007 we recorded selling and marketing, research and development and regulatory, and amortization expenses incurred by MonoGen USA. These expenses included non-cash expenses of $722,000 for stock-based compensation and $400,000 related to the estimated fair value of warrants issued as compensation for the cancellation of a manufacturing agreement and lease. In addition, $3,372,000 was included in selling and marketing expense related to the estimated fair value of warrants issued as compensation for the cancellation of the distribution agreement with Cardinal Health. We incurred non-cash expenses related to the amortization of tangible and intangible assets of $435,000 and $1,448,000 respectively.

As the United States dollar is now our functional currency, our foreign exchange gains and losses are minimal compared to prior years where the fluctuation of the United States dollar versus the Canadian dollar resulted in significant foreign exchange gains and losses.

Management Comments

"We are very excited with our progress this quarter," said Ted S. Geiselman, MonoGen's President and Chief Executive Officer. "With the submission of our 180-Day Supplement to the FDA, the hiring and training of our initial sales team, our significant presence at the American Society of Cytopathology meeting earlier this month and the recent additions to our senior management team, we feel we are on track for a successful commercial launch of the MonoPrep Pap Test."

Forward-Looking Statements

To the extent any statements made in this press release contain information that is not historical, these statements are essentially forward-looking in nature and are subject to risks and uncertainties. Statements preceded by the words believe, expect, anticipate, plan, intend, continue, estimate, may, will, and similar expressions are forward-looking statements.

Forward-looking statements are based on our beliefs and assumptions based on information available at the time the assumption was made. Forward-looking statements relate to, among other things, anticipated financial performance, business prospects, strategies, regulatory developments, new services, market forces, commitments and technological developments, relating to MonoGen USA and us. By its nature, such forward-looking information is subject to various risks and uncertainties which could cause our actual results and experience to differ materially from the anticipated results or other expectations expressed. Those risks and uncertainties include, but are not limited to, our ability to raise additional capital, our ability to execute our business plan while maintaining at all times our various regulatory approvals, the performance of our strategic partners in the commercialization of our products in the marketplace and the competitive response from existing and potential competitors. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this document, and we undertake no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise.



Conference Call to Review Results and Business Outlook

MonoGen, Inc. will host a teleconference/audio web cast to discuss second
quarter 2007 results as well as its business outlook.

TIME: 9:00 am ET on November 12, 2007

To participate, please call the following at least 15 inutes prior to the
start of the event.

Teleconference:

North America: (877) 548-7914
International: (719) 325-4863

Webcast
Access at www.monogen.com

Replay: (Available until 11:59 pm, November 19, 2007)
North America: (888) 203-1112
International: (719) 457-0820 Passcode: 1455303



MonoGen, Inc.

UNAUDITED INTERIM CONSOLIDATED BALANCE SHEET

(In thousands of United States dollars)
September 30, December 31,
2007 2006
$ $
------------------------------------------------------------------------

ASSETS
Current
Cash and cash equivalents 18,476 961
Cash from discontinued operations 8 13
Short-term investments 10 20,136
Accounts receivable 79 140
Inventories 1,577 1,096
Other current assets 499 217
------------------------------------------------------------------------
Total current assets 20,649 22,563
------------------------------------------------------------------------

Restricted cash 280 -
Property, plant and equipment 3,814 2,215
Deposit 5 25
Intangible assets 22,464 23,912
Goodwill 20,132 20,132
------------------------------------------------------------------------
67,344 68,847
------------------------------------------------------------------------
------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 1,942 903
Due to related parties 12 310
Accrued interest on convertible
promissory note 39 36
Convertible promissory note 3,109 -
------------------------------------------------------------------------
Total current liabilities 5,102 1,249
------------------------------------------------------------------------

Long-term accrued liability 1,008 -
Convertible promissory note -- 2,868
------------------------------------------------------------------------
6,110 4,117
------------------------------------------------------------------------

Shareholders' equity
Share capital 91,666 81,796
Warrants 5,324 -
Additional paid-in capital 7,164 5,291
Equity component of convertible
promissory note 27 27
Deficit (50,817) (30,254)
Accumulated other comprehensive income 7,870 7,870
------------------------------------------------------------------------
Total shareholders' equity 61,234 64,730
------------------------------------------------------------------------
67,344 68,847
------------------------------------------------------------------------
------------------------------------------------------------------------



MonoGen, Inc.

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS AND
DEFICIT



(In thousands of United
States dollars)
Three-month period Nine-month period
ended September 30 ended September 30
2007 2006 2007 2006
$ $ $ $
---------------------------------------------------------------------------

REVENUES
Interest income 281 811 830 2,118
Consulting fees - 37 - 112
---------------------------------------------------------------------------
281 848 830 2,230
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EXPENSES
General and administrative 3,160 293 6,238 1,030
Selling and marketing 4,451 - 5,546 -
Research and development
and regulatory 2,788 - 7,707 -
Amortization of property,
plant and equipment 159 - 435 -
Amortization of
intangible assets 482 - 1,448 -
Foreign exchange loss 3 52 23 1,039
Equity loss in MonoGen USA - 2,301 - 5,863
Interest expense 83 - 246 -
Recovery of promissory
note - - (325) -
Loss on disposal of
equipment 48 - 69 -
---------------------------------------------------------------------------
11,174 2,646 21,387 7,932
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Loss from continuing
operations for the
period (10,893) (1,798) (20,557) (5,702)
Loss from discontinued
operations for the
period, net of income taxes - (3) (5) (19)
Income taxes - (1) (938)
---------------------------------------------------------------------------
Net loss and comprehensive
loss for the period (10,893) (1,801) (20,563) (6,659)
---------------------------------------------------------------------------
Deficit, beginning
of the period (39,924) (25,424) (30,254) (20,566)
---------------------------------------------------------------------------
Deficit, end of
the period (50,817) (27,225) (50,817) (27,225)
---------------------------------------------------------------------------
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Loss per common share
Basic and diluted
Loss from continuing (0.06) (0.02) (0.12) (0.09)
Loss from discontinued
operations - - - -
---------------------------------------------------------------------------
Loss per common share
-basic and diluted (0.06) (0.02) (0.12) (0.09)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Weighted average number of
common shares outstanding 182,288,245 76,848,075 175,451,270 76,797,278



UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of United States dollars)

Three-month period Nine-month period
ended September 30 ended September 30
2007 2006 2007 2006
$ $ $ $
--------------------------------------------------------------------------

OPERATING ACTIVITIES
Net loss for the year (10,893) (1,801) (20,563) (6,659)
Loss from discontinued
operations - 3 5 19
Items not affecting cash
Interest expense 77 - 225 -
Interest income from
promissory notes - (706) - (1,794)
Amortization of
intangible assets 482 - 1,448 -
Amortization of property,
plant and equipment 159 - 435 -
Foreign exchange losses - (43) - 1,502
Stock-based compensation 4,156 73 5,600 312
Accretion expense 5 - 18 -
Loss on disposal of fixed assets 48 - 68 -
Equity loss in MonoGen USA - 2,301 - 5,870
Future income taxes - - - 938
--------------------------------------------------------------------------
(5,966) (173) (12,764) 188
--------------------------------------------------------------------------
Net change in other
operating assets and liabilities:
Decrease (increase)
in accounts receivable 40 35 61 (85)
Increase in inventories (397) - (481) -
Increase in other current assets (137) - (282) -
Decrease in deposit 1 - 20 -
Increase in accounts payable
and accrued liabilities 877 388 1,039 317
Increase in long-term
accrued liability 1,008 - 1,008 -
Decrease in due to related
parties (1) (24) (298) (69)
Increase in accrued interest
and convertible promissory note 1 - 3 -
--------------------------------------------------------------------------
Cash flows related to
operating activities from
continuing operations (4,574) (572) (11,694) 351
--------------------------------------------------------------------------
Cash flows related to
operating activities from
discontinued operations (5) (2) (5) (37)
--------------------------------------------------------------------------
Cash flows relating to
operating activities (4,579) (574) (11,699) 314
--------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from exercised options 1 - 28 89
Proceeds from issuance of
common shares - - 10,841
Proceeds from issuance of
warrants - - 1,718
Financing costs (17) (456) (1,121) (456)
--------------------------------------------------------------------------
Cash flows related to
financing activities (16) (456) 11,466 (367)
--------------------------------------------------------------------------
INVESTING ACTIVITIES
Additions to property,
plant and equipment (1,076) - (2,103) -
Proceeds from the sale
of short-term investments - - 20,126 -
Additions to restricted cash - - (280) -
Additions to investments
in MonoGen USA - (4,406) - (6,514)
Proceeds on disposal
of Baseline Technologies Inc. - - - 203
--------------------------------------------------------------------------
Cash flows related to
investing activities from
continuing operations (1,076) (4,406) 17,743 (6,311)
--------------------------------------------------------------------------
Cash flows related to
investing activities from
discontinued operations - - - (203)
--------------------------------------------------------------------------
Cash flows related to
investing activities (1,076) (4,406) 17,743 (6,514)
--------------------------------------------------------------------------
Foreign exchange loss
on cash and cash
equivalents held in
foreign currency - (53) - (90)
Increase (decrease)
in cash and cash equivalents
from continuing operations (5,666) (4,343) 17,515 (6,417)
Increase (decrease) in cash
and cash equivalents from
discontinued operations (5) (2) (5) (240)
Cash and cash equivalents,
beginning of period
From continuing operations 24,142 11,656 961 13,730
From discontinued operations 13 18 13 256
--------------------------------------------------------------------------
Cash and cash equivalents,
end of period
From continuing operations 18,476 7,313 18,476 7,313
From discontinued operations 8 16 8 16
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