MonoGen, Inc.

MonoGen, Inc.

March 20, 2008 08:00 ET

MonoGen Announces Financial Results for the Quarter and Year Ended December 31, 2007


MonoGen, Inc., ("Corporation")(TSX:MOG), today announced the results of its audited consolidated financial statements for the year ended December 31, 2007. The complete financial statements, including our 2007 Management's Discussion and Analysis of the results and our Annual Information Report dated March 19, 2008, will be filed with SEDAR ( A selection of financial information, derived from the Corporation's audited consolidated financial statements for the years ended December 31, 2007 and 2006, is presented below. All amounts are reported in United States dollars.

Recent Highlights


- submitted a 180-Day PMA Supplement seeking FDA approval to manufacture
the MonoPrep Pap Test at its new manufacturing facility located in
Waukegan, Illinois.

- hosted high profile educational and interactive events at the 55th Annual
American Society of Cytopathology Meeting in Houston, Texas.

- announced that the findings of its pivotal clinical trial of MonoPrep®
have been published in the February 2008 issue of the peer-reviewed
American Journal of Clinical Pathology.

- announced several additions to its senior management team including:

- James R. Boyle, Chief Financial Officer and Vice President of
Finance and Administration,

- Jan L. Zorn, Vice President of Regulatory and Clinical Affairs,

- Juan Felix, MD, Medical Director, and

- John P. Witkowski, Vice President of Operations.

- announces that Claude Bedard was elected Chairman of the Board of
Directors by the other members of the board.

Selected Annual Financial Information

Comparison to prior year

Prior to October 31, 2006, we owned a 41% interest in MonoGen, Inc. (MonoGen USA). On October 31, 2006 we acquired remaining 59% interest in MonoGen USA (the "Transaction").

Prior the Transaction, we accounted for our investment in MonoGen USA using the equity method. Beginning on November 1, 2006, the operations and balance sheet of MonoGen USA were fully consolidated with those of the Corporation.

Year ended Year ended
December 31, December 31,
US Dollars $000s except per share data 2007 2006
Revenue 1,036 2,676
Net loss and comprehensive loss (31,327) (9,688)
Basic and diluted net loss per share (0.18) (0.11)

Net working capital 10,086 21,314
Total assets 57,416 68,852
Convertible promissory note 3,192 2,868
Shareholders' equity 51,247 64,730

Overall Performance

For the three-month period ended and year ended December 31, 2007, we reported a consolidated net loss and comprehensive loss of $10,764,000 ($0.06 per share) and $31,327,000 ($0.18 per share) respectively compared to a consolidated net loss and comprehensive loss of $3,029,000 ($0.02 per share) and of $9,688,000 ($0.11 per share) respectively for the same periods in 2006.

The net loss for the years ended December 31, 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 ten months of 2006, a 41% share of the losses in MonoGen USA, or $6,911,000, was included in our net loss as an equity pick-up. After the Transaction, for the last two months of 2006 and for all of 2007, MonoGen USA's results of operations, cash flows and financial position were fully consolidated. In addition the net loss for 2007 increased compared to 2006, because expenses increased as new personnel were added and the Corporation accelerated its activities toward commercialization of the MonoPrep Processor.

Interest income earned on investments in the year ended December 31, 2007, was $1,036,000 compared with $2,552,000 in 2006. In the first ten months of 2006, non-cash interest revenue of $2,080.000 arose from convertible notes held by the Corporation in MonoGen USA. Following the completion of the Transaction, this interest income was eliminated on consolidation.

During 2007, general and administrative expenses increased to $8,535,000 from $2,208,000 in 2006. The increase was due mostly to the consolidation of MonoGen USA's result 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 $1,587,000 compared to $711,000 in 2006.

As a result of the Transaction, in 2007 we recorded selling and marketing, research and development and regulatory, and amortization expense incurred by MonoGen USA. These expenses included non-cash expenses of $976,000 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 with a related party. 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 replacement of the distribution agreement with Cardinal Health with a new marketing agreement with Cardinal Health. We also incurred non-cash expenses related to the amortization of tangible and intangible assets of $2,570,000. In addition, we incurred non-cash expenses of $3,435,000 related to the impairment of intangible assets.

Since 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 to date," said Ted S. Geiselman, MonoGen's President and Chief Executive Officer. "With the February publication of a favorable peer reviewed article in the American Journal of Clinical Pathology, the hiring and training of additional members of our sales team, our significant presence earlier this month at the United States and Canadian Academy of Pathology meeting 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."

About MonoGen, Inc.

MonoGen, Inc., headquartered in the Chicago area, is a medical device and diagnostics company providing high-quality and cost-effective cytological screening and diagnostic products to healthcare providers in the anatomic pathology industry.

Forward-Looking Statements

This press release contains forward-looking statements. 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 assumptions were 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. By its nature, such forward-looking information is subject to various risks and uncertainties which could cause our actual results 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, and the competitive response from existing and potential competitors. Additional discussions of the various risks are contained in our Annual Information Form dated March 19, 2008, which may be found on SEDAR at 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.

Conference Call to Review Results and Business Outlook

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

TIME: 9:00 AM ET on Thursday March 20, 2008

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


United States: (877) 419-6600

Rest of world: 1 (719) 325-4896


Access at

Replay: (Available for one week after the conference call)

United States: (888) 203-1112

Rest of world: 1 (719) 457-0820

Passcode: 8930194.

MonoGen, Inc.

As at December 31,
(in thousands of United States dollars)
2007 2006
$ $
Cash and cash equivalents 571 961
Cash from discontinued operations - 13
Short-term investments 11,554 20,136
Accounts receivable and other assets 236 140
Inventories 1,865 1,096
Other current assets 571 217
Total current assets 14,797 22,563
Restricted Cash 280 -
Deposit - 25
Property, plant and equipment 3,661 2,215
Intangible assets 18,546 23,912
Goodwill 20,132 20,132
57,416 68,847

Accounts payable and accrued liabilities 1,479 903
Due to related parties - 310
Accrued interest on convertible promissory note 40 36
Convertible promissory note 3,192 -
Total current liabilities 4,711 1,249
Convertible promissory note - 2,868
Lease inducements 63 -
Termination Benefits 1,395 -
Shareholders' equity
Share capital 91,731 81,796
Warrants 7,078 1,638
Additional paid-in capital 6,122 3,653
Equity component of convertible note 27 27
Deficit (61,581) (30,254)
Accumulated other comprehensive income 7,870 7,870
Total shareholders' equity 51,247 64,730
57,416 68,847

MonoGen, Inc.


Years ended December 31,
(in thousands of United States dollars
except per common share amounts)

Three-Months Ended Year Ending
December 31, December 31,
(unaudited) (unaudited)
2007 2006 2007 2006
$ $ $ $
Interest income 205 432 1,036 2,552
Consulting fees - 12 - 124
205 444 1,036 2,676
General and administrative 2,296 1,177 8,535 2,208
Selling and marketing 1,572 120 7,118 120
Research and development and
regulatory 2,654 1,316 10,361 1,316
Amortization of property,
plant and equipment 239 111 674 111
Amortization of intangible
assets 482 321 1,930 321
Foreign exchange loss (2) (665) 21 374
Equity loss in MonoGen USA - 1,048 - 6,911
Interest expense 79 49 325 49
Other interest expense 4 - 4 -
Loss on disposal of equipment 215 - 284 -
Impairment of intangible
asset 3,435 - 3,435 -
Recovery of promissory note - - (325) -
10,974 3,479 32,362 11,410
Loss from continuing
operations for the period
before income taxes (10,769) (3,033) (31,326) (8,734)
Income tax expense - - 1 938
Loss from continuing
operations for the period, (10,769) (3,033) (31,327) (9,672)
Gain (loss) from
discontinued operations
for the period, net of
income taxes 5 4 - (16)
Net loss and comprehensive
Loss for the period (10,764) (3,029) (31,327) (9,688)
Deficit, beginning of the
period (50,817) (27,225) (30,254) (20,566)
Deficit, end of the period (61,581) (30,254) (61,581) (30,254)

Loss per common share, basic
and diluted
Loss from continuing
operation (0.06) (0.02) (0.18) (0.11)
Weighted average number of
common shares
outstanding 182,347,372 132,084,724 177,189,465 93,733,000

MonoGen, Inc.


Years ended December 31,
(in thousands of United States dollars)
Year Ending
December 31,
2007 2006
$ $
Net loss for the year (31,327) (9,688)
Income from discontinued operations - 16
Items not affecting cash:
Capitalized interest (income) expense and other revenue 325 (2,066)
Amortization 2,604 432
Foreign exchange losses - 775
Deferred financing charges 4 1
Stock-based compensation 6,335 711
Loss on disposal of property, plant and equipment 284 -
Equity loss in MonoGen USA - 6,911
Impairment of intangible asset 3,435 -
Future income taxes - 938
(18,340) (1,970)
Net change in other operating assets and liabilities 249 (3,787)
Cash flows related to operating activities from
continuing operations (18,091) (5,757)
Cash flows related to operating activities from
discontinued operations - (51)
Cash flows related to operating activities (18,091) (5,808)
Exercise of options 72 87
Issue of share capital 10,840 16,344
Issue of warrants 1,719 -
Share issue costs (1,121) (619)
Cash flows related to financing activities 11,510 15,812
Cash acquired on acquistion on MonoGen USA - 4,309
Additions to property, plant and equipment (2,432) (16)
Proceeds on disposition of property, plant and
equipment 28 -
Purchases of short-term investments (16,177) (20,127)
Disposals of short-term investments 24,759 -
Additions to investments in MonoGen USA - (6,528)
Transaction costs related to the acquisition on
MonoGen USA - (465)
Cash Flows Related to investing activities from
continuing operations 6,178 (22,827)
Cash flows related to investing activities from
discontinued operations - (192)
Cash flows related to investing activities 6,178 (23,019)
Foreign exchange loss on cash and cash equivalents
held in foreign currency - 3
Increase (decrease) in cash and cash equivalents
position (403) (13,012)
Cash and cash equivalents , beginning of period
From continuing operations 961 13,730
From discontinued operations 13 256
Cash and cash equivalents, end of period
From continuing operations 571 961
From discontinued operations - 13
There was no interest paid in either of the years presented and taxes
of $1 were paid in 2007

Contact Information