MonoGen, Inc.
TSX : MOG

MonoGen, Inc.

May 08, 2008 16:15 ET

MonoGen Reports 2008 Q1 Results

LINCOLNSHIRE, ILLINOIS--(Marketwire - May 8, 2008) - THIS PRESS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES.

MonoGen, Inc. ("Corporation")(TSX:MOG), today announced its financial results for the three-month period ended March 31, 2008. The Unaudited Interim Consolidated Financial Statements, including our Management's Discussion and Analysis of the results, will be filed with SEDAR (www.sedar.com).

Unless otherwise indicated, all amounts are reported in United States dollars.

FIRST QUARTER RESULTS

The 2008 first quarter net loss was $6,337,000, or a loss of $0.03 per basic and diluted share, compared with a 2007 first quarter loss of $4,687,000, or a loss of $0.03 per basic and diluted share. Revenue in the first quarter of 2008, comprised entirely of interest income, was $70,000 compared with $264,000 for the same period in 2007.

Research and development and regulatory expenses increased from $2,217,000 in the first quarter of 2007 to $2,697,000 for the same period in 2008. This increase was primarily due to the expanded imaging R&D program.

General and administrative expenses decreased from $1,579,000 in the first quarter of 2007 to $1,503,000 for the same period in 2008. The decrease was primarily due to a reduction in salary and wages expense. Selling and marketing expenses increased from $457,000 in the first quarter of 2007 to $1,384,000 for the same period in 2008. This increase can be attributed primarily to the early stages of our new direct marketing campaign and the increased headcount associated with the initial hiring of a dedicated and direct sales team.

RECENT HIGHLIGHTS

- The Corporation received a letter from the FDA on April 10, 2008, regarding the 180-day PMA Supplement for our new manufacturing facility. The letter indicated that the Corporation needs to have an additional inspection to allow the FDA to revisit a few items associated with the observations from their January inspection. The Corporation has responded with a comprehensive letter indicating all steps it has taken or will take to satisfy the FDA's concerns. In that correspondence the Corporation has requested an inspection anytime on or after May 8, 2008; however, it cannot at this time give an accurate estimate with respect to when the FDA will arrive at MonoGen.

- The Corporation closed an equity capital bought deal private placement financing for an aggregate amount of C$7,500,000.

MANAGEMENT COMMENTS

"Although we are obviously disappointed with the previously announced delay in our new manufacturing facility approval, we look forward to the FDA's re-inspection so that we can close out any remaining issues and begin distribution of the MonoPrep system," said Ted S. Geiselman, MonoGen's President and Chief Executive Officer. Mr. Geiselman added, "We are using this time wisely with respect to operational preparedness, R&D progress on the imaging program, and continued sales efforts. Although the recent financing allows the Corporation more financial flexibility while waiting for FDA approval of our new manufacturing facility, management and other insiders will participate in a follow-on private placement in the next several weeks and have committed in excess of $1.1 million at the same terms of the recently completed April financing. We are pleased with the company's progress and remain excited about our prospects going forward."

ABOUT MONOGEN

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 response from existing and potential competitors. Additional discussions of the various risks are contained in our Annual Information Form dated March 19, 2008, which is available on SEDAR (www.sedar.com). 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

MonoGen, Inc., will host a teleconference/audio webcast to discuss three
months ended March 31, 2008, results as well as its business outlook.

TIME: 3:45 PM CT on Thursday, May 8, 2008

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

Teleconference:

North America: (877) 627-6590
Rest of world: (719) 325-4939

Webcast: Access at www.monogen.com

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

North America: (888) 203-1112
Rest of world: (719) 457-0820
Passcode: 7945310



UNAUDITED INTERIM CONSOLIDATED BALANCE SHEETS

(in thousands of United States dollars)

As at As at
March 31, December 31,
2008 2007
$ $
----------------------------------------------------------------

Assets
Current
Cash and cash equivalents 7,328 571
Short-term investments - 11,554
Other receivables 121 236
Inventories 2,396 1,865
Prepaids and deposits 477 571
----------------------------------------------------------------
Total current assets 10,322 14,797
----------------------------------------------------------------
Restricted cash 280 280
Property, plant and equipment 3,498 3,661
Intangible assets 18,083 18,546
Goodwill 20,132 20,132
----------------------------------------------------------------
52,315 57,416
----------------------------------------------------------------
----------------------------------------------------------------


Liabilities and Shareholders' Equity
Current
Accounts payable and accrued liabilities 2,050 1,519
Termination benefits 335 466
Convertible promissory note 3,278 3,192
----------------------------------------------------------------
Total current liabilities 5,663 5,177
----------------------------------------------------------------

Lease inducements 64 63
Termination benefits 810 929
----------------------------------------------------------------

Shareholders' equity
Share capital 92,183 91,731
Warrants 7,078 7,078
Additional paid-in capital 6,538 6,122
Equity component of convertible note 27 27
Deficit (67,918) (61,581)
Accumulated other comprehensive income 7,870 7,870
----------------------------------------------------------------
Total shareholders' equity 45,778 51,247
----------------------------------------------------------------
52,315 57,416
----------------------------------------------------------------
----------------------------------------------------------------



UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF LOSS, COMPREHENSIVE LOSS
AND DEFICIT

(in thousands of United States dollars except per common share amounts)

Three-month periods ended
March 31,
2008 2007
$ $
------------------------------------------------------------------------
REVENUES
Interest income 70 264
------------------------------------------------------------------------
70 264
------------------------------------------------------------------------

EXPENSES
Research and development and regulatory 2,697 2,217
General and administrative 1,503 1,579
Selling and marketing 1,384 457
Amortization of property, plant
and equipment 263 132
Amortization of intangible assets 463 483
Interest and accretion expense on
convertible promissory note 92 83
Foreign exchange loss (gain) 5 (1)
------------------------------------------------------------------------
6,407 4,950
------------------------------------------------------------------------
Loss before income taxes (6,337) (4,686)
Income tax expense - (1)
------------------------------------------------------------------------
Net loss and comprehensive loss
for the period (6,337) (4,687)
------------------------------------------------------------------------

Deficit, beginning of period (61,581) (30,254)
------------------------------------------------------------------------
Deficit, end of period (67,918) (34,941)
------------------------------------------------------------------------
------------------------------------------------------------------------

Loss per common share
Basic and diluted (0.03) (0.03)
------------------------------------------------------------------------
------------------------------------------------------------------------

Weighted average number of common
shares outstanding 182,591,678 168,451,343



UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of United States dollars)

Three-month periods ended
March 31,
2008 2007
$ $
------------------------------------------------------------------------

OPERATING ACTIVITIES
Net loss for the period (6,337) (4,687)
Items not affecting cash:
Capitalized interest expense and
accretion on convertible promissory note 86 81
Amortization of property, plant and
equipment and intangible assets 726 615
Stock-based compensation 570 829
Loss on disposal of property,
plant and equipment 5 -
------------------------------------------------------------------------
(4,950) (3,162)
Net change in non-cash balances
relating to operations (40) 70
------------------------------------------------------------------------
Cash flows related to operating activities (4,990) (3,092)
------------------------------------------------------------------------

FINANCING ACTIVITIES
Proceeds from issuance of common shares 298 27
------------------------------------------------------------------------
Cash flows related to financing activities 298 27
------------------------------------------------------------------------

INVESTING ACTIVITIES
Additions to property, plant and equipment (105) (262)
Disposals of short-term investments 11,554 2,946
------------------------------------------------------------------------
Cash flows related to investing activities 11,449 2,684
------------------------------------------------------------------------

Increase (decrease) in cash and cash
equivalents 6,757 (381)
Cash and cash equivalents, beginning
of period 571 974
------------------------------------------------------------------------

Cash and cash equivalents, end of period 7,328 593
------------------------------------------------------------------------
------------------------------------------------------------------------

There was no interest paid through March 31, 2008 (March 31, 2007 - $0),
and no taxes paid through March 31, 2008 (March 31, 2007 - $1).

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