SOURCE: Advance Nanotech, Inc.

May 18, 2010 12:43 ET

Advance Nanotech Q1 2010 Financial Results

MONTEBELLO, NY--(Marketwire - May 18, 2010) -  Advance Nanotech, Inc. (OTCBB: AVNA) today reported its financial results for the quarter ended March 31, 2010. Advance Nanotech holds an approximate 35% non-controlling equity interest in Owlstone Nanotech, Inc. ("Owlstone"), a privately held company focused on the development of chemical sensing products using its proprietary technology. Advance Nanotech's financial statements reflect its current business, which has no revenues or operations other than those attributed to its equity interest in Owlstone and expenditures associated with being a public company.

Results of Operations
For the three months ended March 31, 2010, the Company had net loss from continuing operations of $0.00 cents per share, compared with net loss of $0.04 cents per share for the same three month period in 2009. The Company had a loss from operations of $101,103 for the first quarter ended March 31, 2010, compared to $499,195 for the comparable period in 2009, representing a decrease of $398,092, or approximately 80%, attributed primarily to a reduction in general and administrative expenses. General and administrative expenses for the three months ended March 31, 2010 decreased primarily due to the reduction in salaries and benefits and related support services. 

The Company had net loss from continuing operations of $8,847 for the quarter ended March 31, 2010, compared to net loss from continuing operations of $2,520,004 for the comparable period in 2009, representing a decrease of $2,511,157. The Company had a net loss of $8,847 for the three months ended March 31, 2010, compared to $2,795,039 for the comparable period in 2009, representing a decrease of $2,786,192, or approximately 99%.

The Company recognized a non-cash gain for the three months ended March 31, 2010 and a non-cash loss for the three months ended March 31, 2009 of $36,835 and $(1,761,913), respectively, for the change in fair value of the warrant liability driven by the decline in the price of the Company's common stock.

For 2010, other income included recognized non-cash income from Owlstone of $299,160 where the Company treats its investment under the equity method of accounting. 

Interest expense for the three months ended March 31, 2010 and 2009 was $149,386 and $149,536, respectively, representing a decrease of $150 from 2009. In addition, the Company recognized a non-cash late registration cost of $109,555 for both three months ended March 31, 2010 and 2009.

Executive Commentary -- Jon Buttles, Principal Executive Officer
"Advance Nanotech has continued its efforts to achieve its stated objectives throughout the first quarter of 2010. With Owlstone able to operate with sufficient resources, we expect to see positive results and the achievement of milestones as set forth by Owlstone in its Q1 Shareholder Report dated April 5, 2010, a copy of which is available through our website. We are working aggressively with our existing shareholder base and with new shareholders to continue the evolution of Advance Nanotech's shareholder base. We appreciate the support we have received from our shareholders as we seek to get over this hump through a broadening of our shareholder base and fundamentals tied to the performance of Owlstone. We are keenly aware of the first maturity date of our senior secured indebtedness in December 2010 and have continued strategic planning on structures that we believe will be amenable to the holders of these notes. Our existing cash resources have provided us with the much needed time to complete our objectives, along with the time for Owlstone to continue executing on its business plans."

About Advance Nanotech, Inc. and Owlstone Nanotech, Inc.

Advance Nanotech, Inc. owns a minority position in Owlstone Nanotech, Inc. ("Owlstone"). Owlstone is a pioneer in the commercialization of chemical detection products. The Owlstone detector is a revolutionary dime-sized sensor that can be programmed to detect a wide range of chemical agents that may be present in extremely small quantities. Using leading-edge micro- and nano-fabrication techniques, Owlstone has created a complete chemical detection sensor that is significantly smaller and can be produced more cost effectively than products using existing technology. There are numerous applications -- across industries from security and defense to industrial process, air quality control and healthcare -- that depend on the rapid, accurate detection and measurement of chemical compounds. Owlstone works with market leaders within these industries to integrate the detector into next generation chemical sensing products and solutions. Owlstone's technology offers a unique combination of benefits, including small size, low manufacturing costs, minimal power consumption, reduced false-positives, and a customizable platform. For more information about Advance Nanotech, Inc. please visit www.advancenanotech.com. For more information about Owlstone, please visit www.owlstonenanotech.com.

The information contained in this news release, other than historical information, consists of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors, including general economic conditions, spending levels, market acceptance of product lines, the recent economic slowdown affecting technology companies, the future success of scientific studies, ability to successfully develop products, rapid technological change, changes in demand for future products, legislative, regulatory and competitive developments, the Company's ability to secure additional working capital and/or generate sufficient cash flow to support its operations, and other factors could cause actual results to differ materially from the Company's expectations. Advance Nanotech's Annual Report on Form 10-K, recent and forthcoming Quarterly Reports on Form 10-Q, recent Current Reports and other SEC filings discuss some of the important risk factors that may affect Advance Nanotech's business, results of operations and financial condition. The Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

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