MonoGen, Inc.
TSX : MOG

MonoGen, Inc.

August 12, 2008 16:00 ET

Monogen Reports 2008 Q2 & YTD Results

LINCOLNSHIRE, ILLINOIS--(Marketwire - Aug. 12, 2008) - MonoGen, Inc. (TSX:MOG) today announced its financial results for the three-month and six-month periods ended June 30, 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.

SECOND QUARTER RESULTS

The 2008 second quarter net loss was $6,858,000, or $0.04 loss per basic and diluted share, compared with a 2007 second quarter loss of $4,983,000 or $0.03 loss per basic and diluted share. Revenue in the second quarter of 2008, which consisted entirely of interest income, was $51,000 compared with $286,000 for the comparable quarter in 2007.

Research and development expenses decreased to $2,655,000 in the second quarter of 2008, from $2,703,000 for the same period in 2007, primarily due to reduced professional fees.

General and administrative expenses increased to $2,152,000 in the second quarter of 2008, from $1,505,000 for the same period in 2007, primarily due to a non-cash charge related to the closure of an administrative office and an increase in professional fees.

Selling and marketing expenses increased to $1,171,000 in the second quarter of 2008, from $638,000 for the same period in 2007, primarily due 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.

YEAR-TO-DATE RESULTS

Net loss for the six months ended June 30, 2008 was $13,195,000, or a loss of $0.07 per basic and diluted share, compared to a net loss of $9,670,000, or a loss of $0.06 per basic and diluted share for the six-month period ended June 30, 2007. Revenue for the six-month period ended June 30, 2008, which was comprised entirely of interest income, was $121,000, compared with $549,000 for the six-month period ended June 30, 2007.

Research and development and regulatory expenses increased to $5,352,000 for the six-month period ended June 30, 2008, from $4,919,000 for the same period in 2007, primarily due to the expanded imaging R&D program.

General and administrative expenses increased to $3,650,000 for the six-month period ended June 30, 2008, from $3,084,000 for the same period in 2007, primarily due to an increase in compensation expense, professional fees, and a non-cash charge related to the closure of an administrative office.

Selling and marketing expenses increased to $2,555,000 for the six-month period ended June 30, 2008 to $1,095,000 for the same period in 2007, primarily due 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

MonoGen has:

- Received FDA approval to begin distributing products from its new manufacturing facility.

- Completed private equity placement offerings which raised approximately $8.5 million, net of issue costs, including insider participation of over $1.2 million.

- Received its first customer order for the MonoPrep® Processor.

- Completed the proof-of-principle phase of an advanced computer imaging system to aid in cervical cancer screening and has now transitioned to the full product development phase.

- Received FDA approval for enhanced labeling regarding the MonoPrep Pap Test. We may now claim that the MonoPrep Pap Test provides a statistically significant reduction in UNSAT slides compared to the Pap smear method.

MANAGEMENT COMMENTS

"We are extremely pleased with the FDA's approval of our new manufacturing facility, which clears the way for us to begin distribution of the MonoPrep system which will begin immediately," said Ted S. Geiselman, MonoGen's President and Chief Executive Officer. Mr. Geiselman added, "We are pleased with the Company's progress in all operational areas, including our first customer order for the MonoPrep Processor, 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-month and six-month periods ended June 30, 2008, results as
well as its business outlook.

TIME: 3:15 PM CDT on Tuesday, August 12, 2008

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

Teleconference:

North America: (877) 627-6562
Rest of world: (719) 325-4877

Webcast: Access at www.monogen.com

Replay: (Available until midnight, Tuesday, August 19, 2008)

North America: (888) 203-1112
Rest of world: (719) 457-0820
Passcode: 2246723




UNAUDITED INTERIM CONSOLIDATED BALANCE SHEETS

(in thousands of United States dollars)

As of As of
June 30, December 31,
2008 2007
$ $
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ASSETS
Current
Cash and cash equivalents 7,776 571
Short-term investments - 11,554
Other receivables 94 236
Inventories 2,485 1,865
Prepaids and deposits 755 571
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Total current assets 11,110 14,797
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Restricted cash 280 280
Property, plant and equipment, net 3,273 3,661
Intangible assets, net 17,619 18,546
Goodwill 20,132 20,132
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52,414 57,416
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 2,662 1,519
Termination benefits 289 466
Convertible promissory note - 3,192
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Total current liabilities 2,951 5,177
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Termination benefits 891 929
Other long-term liabilities 171 63
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Shareholders' equity
Share capital 99,875 91,731
Warrants 8,247 7,078
Additional paid-in capital 7,185 6,122
Equity component of convertible note - 27
Deficit (74,776) (61,581)
Accumulated other comprehensive income 7,870 7,870
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Total shareholders' equity 48,401 51,247
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52,414 57,416
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UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF LOSS,
COMPREHENSIVE LOSS AND DEFICIT

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

Three-month period Six-month periods
ended June 30, ended June 30,
2008 2007 2008 2007
$ $ $ $
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REVENUES
Interest income 51 286 121 549
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51 286 121 549
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EXPENSES
Research and development
and regulatory 2,655 2,703 5,352 4,919
General and administrative 2,152 1,505 3,650 3,084
Selling and marketing 1,171 638 2,555 1,095
Amortization of property,
plant and equipment 269 143 532 276
Amortization of intangible
assets 464 482 927 965
Interest and accretion
expense 134 81 226 163
Recovery of promissory note - (325) - (325)
Loss on disposal of equipment - 20 5 20
Foreign exchange loss 64 21 69 20
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6,909 5,268 13,316 10,217
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Loss before income taxes (6,858) (4,982) (13,195) (9,668)
Income tax expense - (1) - (2)
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Net loss and comprehensive
loss for the period (6,858) (4,983) (13,195) (9,670)
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Deficit, beginning
of period (67,918) (34,941) (61,581) (30,254)
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Deficit, end of period (74,776) (39,924) (74,776) (39,924)
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Loss per common share
Basic and diluted (0.04) (0.03) (0.07) (0.06)
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Weighted average number
of common shares
outstanding 189,679,121 175,462,167 186,134,217 171,976,122




UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

in thousands of United States dollars)


Three-month period Six-month periods
ended June 30, ended June 30,
2008 2007 2008 2007
$ $ $ $
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OPERATING ACTIVITIES
Net loss for the period (6,858) (4,983) (13,195) (9,670)
Items not affecting cash:
Interest and accretion expense 44 80 130 161
Amortization of property, plant
and equipment and intangible assets 733 625 1,459 1,241
Stock-based compensation 726 615 1,296 1,443
Loss on disposal of property, plant
and equipment - 20 5 20
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(5,355) (3,643) (10,305) (6,805)
Net change in non-cash balances
relating to operations 455 (666) 415 (314)
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Cash flows related to operating
activities (4,900) (4,309) (9,890) (7,119)
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INVESTING ACTIVITIES
Additions to property, plant
and equipment (44) (764) (149) (1,027)
Sales of short-term investments - 17,181 11,554 20,127
Additions to restricted cash - - - (280)
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Cash flows related to financing
activities (44) 16,417 11,405 18,820
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FINANCING ACTIVITIES
Repayment of convertible
promissory note (3,362) - (3,362) -
Proceeds from exercised options 248 - 546 27
Proceeds from issuance of
common shares 7,931 10,841 7,931 10,841
Proceeds from issuance of warrants 1,216 1,718 1,216 1,718
Share issuance costs (641) (1,104) (641) (1,104)
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Cash flows related to investing
activities 5,392 11,455 5,690 11,482
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Foreign exchange loss on cash and
cash equivalents held in foreign
currency - (1) - (2)

Increase in cash and cash
equivalents 448 23,562 7,205 23,181
Cash and cash equivalents,
beginning of period 7,328 593 571 974
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Cash and cash equivalents,
end of period 7,776 24,155 7,776 24,155
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Interest paid through June 30, 2008 was $1,482 (June 30, 2007 - $0), and
no taxes paid through June 30, 2008 (June 30, 2007 - $0).


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