Critical Outcome Technologies Inc.
TSX VENTURE : COT

Critical Outcome Technologies Inc.

April 02, 2007 11:42 ET

Critical Outcome Technologies Inc. Reports Third Quarter 2007 Financial Results

LONDON, ONTARIO--(CCNMatthews - April 2, 2007) - Critical Outcome Technologies Inc. (TSX VENTURE:COT) today announced its financial results for the third quarter ended January 31, 2007. There were no revenues from operations during the quarter as the Company reported a net loss for the period of $501,305 or $0.01 per share compared to a net loss of $66,788 or $0.01 per share for the three months ended January 31, 2006. There were two major expenses in the quarter which accounted for the majority of the increased loss over the comparable period in 2006; a non-cash expense for stock option compensation recorded in the amount of $213,705 resulting from the announcement of stock options granted in January 2007 and $97,940 in synthesis costs incurred for its multiple sclerosis molecules.

Revenues from operations for the first nine months ending January 31, 2007 were $2,500. A net loss of $766,026 or $0.03 per share was incurred for this period compared to a net loss of $160,309 or $0.02 per share in the comparable period in 2006. These year to date results reflect the increased business activity of the Company in fiscal 2007, as it put infrastructure in place focused on moving its molecular libraries forward.

On January 16th the Company successfully closed a $1,000,000 private placement which raised net proceeds of $984,518. "This financing built upon the major financing we closed on October 11, 2006 and combined with those proceeds of $2,178,386 provides the financial capacity to move our molecular libraries forward through our development cycle in a substantial way," stated Dr. Wayne Danter, President & CSO.

At January 31, 2007 the Company had $2,534,008 in cash and cash equivalents.

Highlights during the quarter included:

- On November 7th the Company completed the discovery, optimization and final selection of its library of lead compounds for the oral treatment of acute multiple sclerosis. The compounds were engineered to be orally available, have low toxicity, cross the blood brain barrier and selectively inhibit Vascular Endothelial Growth Factor (VEGF-R) and Platelet Derived Growth Factor (PDGF-R) receptor kinases. The process of synthesizing these compounds was also started in early November with Dalton Pharma Services.

- On January 23rd the Company through its interest in DDP Therapeutics (formerly 6441513 Canada Inc.) received promising preliminary results regarding in vitro drug resistance in Lung Cancer cell lines for the first 3 small cell lung cancer lead molecules.

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
---------------------------------------------------------------------------
---------------------------------------------------------------------------
January 31, April 30,
2007 2006
---------------------------------------------------------------------------

Assets

Current assets:

Cash $ 2,534,008 $ 170,464
Other receivables 69,162 8,842
Prepaid expenses and deposits 79,515 5,241
---------------------------------------------------------------------------
2,682,685 184,547

Equipment (note 4) 23,174 33,766
Patents (note 5) 95,982 68,727
Trademark (note 6) 1,088 1,740
Investment in 6441513 Canada Inc (note 7) 1 1
---------------------------------------------------------------------------
$ 2,802,930 $ 288,781
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Liabilities and Shareholders' Deficiency

Current liabilities:

Accounts payable and accrued liabilities $ 101,532 $ 171,266
Due to shareholders (note 8) 109,377 127,194
Notes payable and other advances (note 9) 20,000 45,000
Current portion of capital lease
obligations (note 10) 4,867 16,128
---------------------------------------------------------------------------
235,776 359,588
---------------------------------------------------------------------------

Capital lease obligations (note 10) 41,514 33,525

Shareholders' equity

Share capital and warrants (note 11) 3,771,595 576,292
Contributed surplus (note 13) 464,751 251,000
Deficit 1,710,706 931,624
---------------------------------------------------------------------------
2,525,640 (104,332)
---------------------------------------------------------------------------

Commitments (note 17)
Subsequent events (note 19)
---------------------------------------------------------------------------
$ 2,802,930 $ 288,781
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes to unaudited interim financial statements



Critical Outcome Technologies Inc.
(a development stage company)
Interim Statements of Operation and Deficit
(Unaudited)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Three Months Ended Nine Months Ended
January 31, January 31,
2007 2006 2007 2006
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Revenues:
Contract services $ - $ - $ - $ 30,000
Screening services - 2,500 2,500 2,500
---------------------------------------------------------------------------
- 2,500 2,500 32,500
---------------------------------------------------------------------------

Expenses:

Salaries and benefits 103,174 43,500 275,497 105,061
Stock option compensation
(note 12) 213,705 - 213,705 -
Professional fees 40,237 7,408 99,433 33,552
Synthesis costs 97,940 - 97,940 -
Marketing 29,399 1,329 80,455 3,689
Amortization of furniture &
equipment 7,339 8,919 21,672 13,634
Research and product
development 278 9,000 15,350 18,000
Office and general 3,481 977 14,233 3,525
Rent 3,206 1,467 12,461 10,267
Computer expense 6,941 1,780 12,032 7,848
Interest and bank charges 834 1,339 8,304 3,229
Corporate Governance 5,867 - 5,867 -
Insurance 2,888 - 2,888 -
Amortization of trademark 218 218 653 653
Education and training 189 - 189 -
Reorganization costs - - (500) -
---------------------------------------------------------------------------
515,696 75,937 860,179 199,458
---------------------------------------------------------------------------

Loss before other income 515,696 73,437 857,679 166,958

Other income
Investment tax credit
refund (note 14) - 6,320 75,050 6,320
Interest income 14,391 329 16,603 329
---------------------------------------------------------------------------
14,391 6,649 91,653 6,649
---------------------------------------------------------------------------

Loss 501,305 66,788 766,026 160,309

Deficit, beginning of
the period 1,208,709 434,216 931,624 340,695

Net book value of Aviator
Petroleum Corp on
amalgamation (692) - (13,056) -

---------------------------------------------------------------------------
Deficit, end of the period $ 1,710,706 $ 501,004 $ 1,710,706 $ 501,004
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Basic and diluted loss per
common share $ 0.01 $ 0.01 $ 0.03 $ 0.02

Weighted average number of
common shares outstanding 35,088,419 9,280,000 27,477,437 8,765,507
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes to unaudited interim financial statements



Critical Outcome Technologies Inc.
(a development stage company)
Interim Statements of Cash Flows
(Unaudited)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Three Months Ended Nine Months Ended
January 31, January 31,
2007 2006 2007 2006
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Cash provided by (used in):

Operating activities:
Loss $ 501,305 $ 66,788 $ 766,026 $ 160,309
Items not involving cash:
Stock option compensation 213,705 - 213,705 -
Amortization of trademark 217 218 653 653
Amortization of equipment 7,339 8,919 21,672 13,634
Net cash acquired on
amalgamation with Aviator
Petroleum (692) - (13,056) -
Change in non-cash
operating working capital (380,604) 62,398 (204,329) 56,889
---------------------------------------------------------------------------
(661,340) 4,747 (747,381) (89,133)
---------------------------------------------------------------------------

Investing activities:
Additions to furniture and
equipment (11,080) - (11,080) -
Additions to patents (8,295) (4,902) (27,255) (21,852)
---------------------------------------------------------------------------
(19,375) (4,902) (38,335) (21,852)
---------------------------------------------------------------------------

Financing activities:
Issue of common shares &
warrants (net) 1,016,917 - 3,195,303 99,999
Cash on amalgamation with
1336554 Ontario Inc - - 46 -
Issue of preference shares - - - 1
Note payable and other
advances - - (25,000) -
Repayment of obligation
under capital lease 4,683 - (3,272) (1,540)
Due to shareholders (44,476) 10,847 (17,817) 21,626
---------------------------------------------------------------------------
977,124 10,847 3,149,260 120,086
---------------------------------------------------------------------------

Increase in cash 296,409 10,692 2,363,544 9,101

Cash, beginning of the period 2,237,599 229 170,464 1,820
---------------------------------------------------------------------------

Cash, end of the period $ 2,534,008 $ 10,921 $ 2,534,008 $ 10,921
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Supplemental cash flow
information:
Interest expense paid $ 8 $ - $ 2,351 $ -
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes to unaudited interim financial statements

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

Contact Information