Millenium Biologix Corporation
TSX : MBC

Millenium Biologix Corporation

March 01, 2007 08:48 ET

Millenium Announces its Results for the Third Quarter Ended December 31, 2006

KINGSTON, ONTARIO, CANADA--(CCNMatthews - March 1, 2007) - Millenium Biologix Corporation ("Millenium" or the "Company")(TSX:MBC) today released its unaudited consolidated financial statements for the three and nine months ended December 31, 2006.

All amounts in this release are in Canadian dollars.

Results for the three and nine month periods ended December 31, 2006

The Company reported consolidated revenue for the nine month period of $1,136,000 and a net loss of $10,532,000.

Revenues for the three and nine months ended December 31, 2006 were $416,000 and $1,136,000 respectively, compared with revenues of $318,000 and $851,000 for the same periods in 2005. These reflect a quarter over quarter increase for both comparable periods in 2005 of $98,000 and $285,000 respectively. These increases are primarily driven from increases in the Company's contract research activities with the Canadian and European space agencies.

Expenses for the three and nine months ended December 31, 2006 were $2,143,000 and $9,001,000 respectively, compared with expenses of $3,926,000 and $11,304,000 for the same periods in 2005. These reflect a quarter over quarter decrease for both comparable periods in 2005 of $1,783.000 and $2,303,000, respectively. The decreases in the three and nine month periods reflect the impact of operational and project cost reductions offset by increased restructuring and advisory costs associated with financing and partnering activities.

For the three months ended December 31, 2006, other income of $1,244,000 includes a gain on the sale of tax losses of $1,475,000. For the nine months ended December 31, 2006, other expense of $2,667,000 reflects the gain on sale of tax losses offset by a write-down of fixed and intangible assets of $4,089,000.

At December 31, 2006 the Company had cash and cash equivalents of $756,000 compared to March 31, 2006 balances of $4,606,000. At December 31, 2006, the Company had negative working capital of $3,398,000, compared with working capital of $2,648,000 at March 31, 2006.

During the quarter the Company issued $325,000 of convertible debentures.

Also during the quarter the Toronto Stock Exchange delisted the common shares of the Company.

Millenium continues to explore various strategic options for the Company. There can be no assurance that such efforts will be successful. In the event the Company is unable to secure sufficient financing, there is substantial doubt as to the Company's ability to continue as a going concern, which could require the partial or complete divestiture of its core technologies.

About Millenium Biologix Corporation

Millenium Biologix Corporation is focused on the development and commercialization of next generation cell culture and tissue engineering systems that will drive change from synthetic implants to more effective biologics-based solutions. For more information about Millenium, please visit www.millenium-biologix.com.

Forward-looking Statements

This press release may contain forward-looking statements, which provide our current expectations or forecasts of future events. In some cases, forward-looking statements can be identified by words such as "anticipate", "expect", "believe", "plan", "project", "forecast" or "intend" or future or conditional words such as "may", "will", "should", "would" or "could"; however, the absence of such words does not necessarily mean that a statement is not forward-looking.

The forward-looking statements are based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including management's perception of historical trends, current conditions and expected future developments as well as other factors management believes are appropriate in the circumstances.

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Millenium's actual results will depend almost entirely on its success in attracting financing and/or disposing of core assets. These actual results could differ materially from those anticipated in the forward-looking statements due to a number of material factors, including the level of costs and operating expenses relative to the Company's revenues, future capital requirements and the sufficiency of the Company's cash and cash equivalents, investments and other sources of funds, including financing from external sources, to meet these requirements, the value received from any assets sold, the outcome of contingencies, and other factors described in the "Risk Factors" section of our 2006 annual information form, in particular, those under the heading "Dependence on Additional Financing/Need for Additional Financing". Readers should carefully consider the factors described above and in the "Risk Factors" section in evaluating management's forward-looking statements. Other factors besides those described above and in the annual information form could also affect actual results.

Undue reliance should not be placed on these forward-looking statements. Management undertakes no obligation to update publicly any forward-looking statement to reflect circumstances or events after the date such statement was made or to reflect the occurrence of unanticipated events. Readers should, however, review the factors and risks described in the reports filed by the Company from time to time with the applicable Canadian securities commissions or similar regulatory authorities. Such additional information is available at www.sedar.com.



MILLENIUM BIOLOGIX CORPORATION
Consolidated Statements of Operations
For the three and nine months ended December 31, 2006 and 2005
(unaudited)


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December 31, March 31,
2006 2006
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(unaudited)
Assets
Current assets:
Cash $755,780 $4,605,571
Accounts receivable 426,575 387,353
Investment tax credits receivable 130,000 200,000
Inventories (note 2) 56,164 245,794
Prepaid expenses 274,674 341,651
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1,643,193 5,780,369

Property and equipment (note 3) 777,460 4,861,370

Patents, licenses and
technology rights (note 4) 450,000 657,146

Other assets (note 12) 103,981 70,740
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$2,974,634 $11,369,625
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Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable and accrued liabilities $3,842,032 $2,820,142
Current portion of
long-term debt (note 5) 66,025 41,700
Current portion of obligations under
capital leases (note 6) 250,116 269,976
Convertible debentures (note 8) 883,334 -
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5,041,507 3,131,818

Long-term debt (note 5) - 55,600

Obligations under capital leases (note 6) - 204,473

Shareholders' equity:
Share capital (note 9) 42,149,531 42,149,531
Contributed surplus 3,803,885 3,316,719
Deficit (48,020,289) (37,488,516)
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(2,066,873) 7,977,734

Going concern (note 1(a))
Commitments (note 11)
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$2,974,634 $11,369,625
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See accompanying notes to consolidated financial statements.


MILLENIUM BIOLOGIX CORPORATION
Consolidated Statements of Operations
For the three and nine months ended December 31, 2006 and 2005
(unaudited)

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Three months ended
December 31, December 31,
2006 2005
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Revenue:
Skelite $ - $ 66,682
Space 296,277 211,737
Other 120,222 39,864
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416,499 318,283

Expenses:
General and administrative 990,692 1,760,699
Research and development, net of
investment tax credits 796,034 1,553,479
Cost of materials 262,104 206,835
Sales and marketing - 224,066
Depreciation and amortization 94,470 180,725
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2,143,300 3,925,804
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-
Loss before other income (expenses) (1,726,801) (3,607,521)

Other income (expenses):
Gain on sale of tax losses (note 15) 1,475,000 -
Write down of fixed assets,
patents, licences, and
technologyrights (Notes 3 and 4) (153,787) -
Interest income 2,028 20,945
Interest expense (96,764) (34,799)
Gain on foreign exchange 17,487 47,867
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1,243,964 34,013

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Net loss $(482,837) $(3,573,508)
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Basic and diluted net loss per share
(note 10) $(0.01) $(0.04)
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Nine months ended
December 31, December 31,
2006 2005
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Revenue:
Skelite $93,228 $94,236
Space 855,091 517,179
Other 188,163 239,726
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1,136,482 851,141

Expenses:
General and administrative 4,198,540 4,736,574
Research and development, net of
investment tax credits 3,421,263 4,862,617
Cost of materials 660,979 685,241
Sales and marketing 158,689 578,648
Depreciation and amortization 562,012 440,925
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9,001,483 11,304,005
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Loss before other income (expenses) (7,865,001) (10,452,864)

Other income (expenses):
Gain on sale of tax losses (note 15) 1,475,000 -
Write down of fixed assets,
patents, licences, and
technology rights (Notes 3 and 4) (4,089,183) -
Interest income 25,021 76,190
Interest expense (146,214) (78,190)
Gain on foreign exchange 68,604 69,962
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(2,666,772) 67,962

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Net loss $(10,531,773) $(10,384,902)
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Basic and diluted net loss per share
(note 10) $(0.08) $(0.14)
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Consolidated Statements of Deficit
For the nine months ended December 31, 2006 and 2005
(unaudited)
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December 31, December 31,
2006 2005
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Deficit, beginning of period: $(37,488,516) $(21,918,680)

Net loss (10,531,773) (10,384,902)

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Deficit, end of period $(48,020,289) $(32,303,582)
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See accompanying notes to consolidated financial statements.


MILLENIUM BIOLOGIX CORPORATION
Consolidated Statements of Operations
For the three and nine months ended December 31, 2006 and 2005
(unaudited)
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Three months ended
December 31, December 31,
2006 2005
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Cash provided by (used in):

Operations:
Net loss $(482,837) $(3,573,508)
Items not involving cash:
Depreciation and amortization 94,470 180,725
Stock based compensation - -
Gain on sale of fixed assets - -
Write down of fixed assets,
patents, licences and
technology rights 153,786 60,071
Change in non-cash operating
working capital (note 13) 387,944 163,016
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153,363 (3,169,696)
Financing:
Repayment of long-term debt (10,425) (10,425)
Repayment of obligations under
capital leases (66,113) (66,455)
Proceeds from private placement - 15,143,250
Transaction costs associated
with private placement - (1,809,505)
Proceeds on issuance of capital lease - -
Proceeds from demand loan (note 7) - -
Repayment of demand loan (note 8) - (516,926)
Proceeds from issuance of
convertible debenture (note 8) 325,000 -
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248,462 12,739,939
Investments:
Purchase of property and equipment - (471,334)
Acquisition of patents, licences
and technology rights - (64,942)
Other assets (2,880) -
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(2,880) (536,276)

Increase (decrease) in cash and
Cash equivalents 398,945 9,033,967

Cash and cash equivalents,
Beginning of period 356,835 -
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Cash and cash equivalents,
end of period $755,780 $9,033,967
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Nine months ended
December 31, December 31,
2006 2005
---------------------------------------------------------------------
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Cash provided by (used in):
Operations:
Net loss $(10,531,773) $(10,384,902)
Items not involving cash:
Depreciation and amortization 562,012 440,925
Stock based compensation 45,500 -
Gain on sale of fixed assets 780 -
Write down of fixed assets,
patents, licences and
technology rights 4,089,183 60,071
Change in non-cash operating
working capital (note 13) 1,309,278 434,796
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(4,525,020) (9,449,110)
Financing:
Repayment of long-term debt (31,275) (31,275)
Repayment of obligations under
capital leases (224,333) (191,757)
Proceeds from private placement - 15,143,250
Transaction costs associated
with private placement - (1,809,505)
Proceeds on issuance of capital lease - 229,945
Proceeds from demand loan (note 7) 500,000 516,926
Repayment of demand loan (note 8) (500,000) (516,926)
Proceeds from issuance of
convertible debenture (note 8) 1,325,000 -
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1,069,392 13,340,658
Investments:
Purchase of property and equipment (294,980) (3,601,208)
Acquisition of patents, licences
and technology rights (65,939) (246,948)
Other assets (33,244) 26,000
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(394,163) (3,822,156)

Increase (decrease) in cash
and cash equivalents (3,849,791) 69,392

Cash and cash equivalents,
Beginning of period 4,605,571 8,964,575
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Cash and cash equivalents,
end Of period $755,780 $9,033,967
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The Company considers cash and cash equivalents to be highly liquid
investments with original maturities of three months or less.

See accompanying notes to consolidated financial statements.

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