Novoheart Holdings Inc.

Novoheart Holdings Inc.

February 26, 2018 08:00 ET

Novoheart Holdings Inc. Announces AGM Results, Receives Governmental Funding to Expand R&D Team, and Reports Second Quarter 2018 Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Feb. 26, 2018) - Novoheart Holdings Inc. ("Novoheart" or the "Company") (TSX VENTURE:NVH) today announced that it has been awarded two internship grants from the Innovation and Technology Commission (ITC) of Hong Kong to support the recruitment of local graduates. These have provided financial support towards the expansion of the R&D team in Hong Kong, allowing the Company to recruit and train top talent, in conjunction with its expansion into the brand new 5,300 sq ft facility in the Hong Kong Science Park, and thus accommodate additional commercial drug screening contracts. The two new internship grants total approximately $150,000, in addition to approximately $1.8 million that Novoheart has been awarded via various schemes from ITC for supporting the development of MyHeart™ Platform.

Second Quarter 2018 Financial Results

Novoheart reports financial results for the three and six months ended December 31, 2017. Amounts, unless specified otherwise, are expressed in Canadian dollars and are in accordance with International Financial Reporting Standards (IFRS).

"We are very pleased with Novoheart's progress over the past quarter. Commercially, we successfully completed in December 2017 our second contract with a global pharmaceutical company which required us to design and generate engineered human heart chambers that carried a hereditary disease, triggering an additional final payment," said Dr. Ronald Li, CEO of Novoheart. "In addition, we signed a new commercial contract with New York-based Sumocor to test their candidate therapeutics on our MyHeart™ Platform to provide thorough pre-clinical assessment of efficacy and cardiotoxicity in preparation for filing an Investigational New Drug (IND) application with the FDA."

Dr. Li continued, "As we move ahead for the remainder of fiscal year 2018, we expect to continue to focus on expanding our commercial footprint via new contracts with global pharmaceutical companies and biotechnology firms. It is clear that Novoheart's MyHeart™ platform adds tremendous value to the drug screening and development processes, and we will continue to expand our presence in these areas."

"Scientifically, we progressed on several fronts," said Dr. Kevin Costa, Chief Scientific Officer. "In the past three months alone, we filed two provisional patents, one for a three-tier screening system and one for our proprietary multi-organoid bioreactor platform. Secondly, we published a landmark study demonstrating the use of machine learning to accelerate drug screening. These milestones all signify our constant and persistent efforts to maintain our technological excellence. Ultimately, the new technology enhances Novoheart's capacity and further expands its ability to identify promising bioactive therapeutics, classify toxicity of unknown drugs and pioneer innovative methods of addressing diseases and disorders. Taken collectively, Novoheart is on track to launch the significantly enhanced MyHeart™ Platform 2.0 in 2018 with higher sensitivity, accuracy, capacity as well as throughput."

Recent Business Highlights:

  • Signed commercial agreement with Sumocor to develop novel therapeutics for heart failure
  • Completed second commercial contract with a global pharmaceutical company with the results to be publicized and announced
  • Filed two patents for three-tier drug screening system and new multi-organoid bioreactor platform
  • Published landmark study demonstrating the use of machine learning for accelerating drug screening

Financial Results for the Second Quarter of 2018

The Company recorded net loss of C$1,660,675 (loss per share of C$0.02) for the three months ended December 31, 2017 compared to a net loss of C$780,106 (loss per share of C$0.15) for the three months ended December 31, 2016. On a year-to-date basis, the Company recorded a net loss of C$7,933,244 (loss per share of C$0.15) for the six months ended December 31, 2017 compared to a net loss of C$1,216,229 (loss per share of C$0.23) for the six months ended December 31, 2016. The increase in net loss on a year-to-date basis was due primarily to the completion of the reverse takeover transaction, for which the Company incurred a non-cash loss on completion of reverse takeover of C$5,213,597.

Operating expenses for the second quarter of 2018 was C$1,737,289 compared to operating expense of C$867,165 for the second quarter of 2017. Operating expenses for the six months ended December 31, 2017 and 2016 were C$2,820,756 and C$1,362,190, respectively. The increase in operating expenses is primarily related to an increase in intellectual property and patent expenses, and general and administrative expenses. The increase in intellectual property and patent expenses is due to fees incurred for the intellectual property licensing agreements that the Company entered into during calendar year 2017. The increase in general and administrative expenses is primarily due to increases in professional and regulatory fees due to the reverse takeover listing and the listing on the Frankfurt Stock Exchange, as well as the increase in personnel costs resulting from the build-out of the Company's management team.

The Company earned other income of C$53,856 and C$110,665 in the three and six months ended December 31, 2017 compared to other income of C$68,308 and C$135,271 in the three and six months ended December 31, 2017. Other Income is earned from the agreement with a global pharmaceutical partner. Work for the agreement was completed in December 2017.

Liquidity and Outstanding Share Capital

As at December 31, 2017, the Company had cash of C$4,723,926. As at February 26, 2018, there were 93,462,025 common shares issued and outstanding, and 4,203,576 common shares issuable upon the exercise of outstanding stock options (of which none are exercisable) at an exercise price of C$0.50 per share. The Company also has 972,037 purchase warrants outstanding with an exercise price of C$0.50, expiring in September 2019.

Results of Annual General Meeting

Novoheart is pleased to announce the results of its annual general meeting of shareholders held on February 23, 2018. Shareholders elected six directors to the Company's board, being Dr. Ronald Li, Dr. Camie Chan, Victor Chang, Ricky Chiu, Allen Ma and James Topham.

The shareholders also approved all other matters proposed, including the appointment of KPMG LLP, Chartered Accountants as auditors of the Company for the ensuing year, the re-approval of the Company's stock option plan and the approval of the Company's restricted share unit plan (the "RSU Plan"), pursuant to which 2,803,860 shares are reserved for issuance. In combination, all share compensation arrangements of the Company, including the RSU Plan, will not exceed 10% of the issued and outstanding Common Shares. The RSU Plan remains subject to final acceptance by the TSX Venture Exchange.


Novoheart is a global stem cell biotechnology company dedicated to human heart engineering with offices and laboratories in the United States, Canada and Hong Kong. Novoheart's scientific team has pioneered a range of bioengineering technologies collectively known as the MyHeart™ platform, including the world's first human mini-heart "novoHeart™" (otherwise known as a "human heart-in-a-jar") that is fully capable of pumping and ejecting fluid. Novoheart believes that its proprietary platform uniquely positions the Company to enter into commercial partnerships with leading pharmaceuticals and research institutions to deliver pre-clinical cardiotoxicity screening and to develop custom-tailored engineered heart constructs for disease modeling and drug discovery. Novoheart also believes that the MyHeart™ platform is well-positioned for the potential development of cell-based cardiac regenerative therapies with superior safety and efficacy.

Common shares of Novoheart is traded on the TSX Venture Exchange under the symbol "NVH".

Cautionary Note Regarding Forward-Looking Statements

Information set forth in this news release may involve forward-looking statements under applicable securities laws. Forward-looking statements are statements that relate to future, not past, events. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions. All statements, other than statements of historical fact, included herein including, without limitation; statements about the Company's future plans, its goals and expectations, and the potential applications its MyHeart platform are forward-looking statements. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the risks identified in the management discussion and analysis section of Novoheart Holdings Inc.'s interim and most recent annual financial statement or other reports and filings with the TSX Venture Exchange and applicable Canadian securities regulators. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the respective companies undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements.

Condensed Consolidated Interim Statement of Financial Position (unaudited)
(Expressed in Canadian dollars)
December 31,
June 30,
Cash and cash equivalents $ 4,723,926 $ 1,319,748
Accounts and other receivables 613,938 602,240
Prepaid expenses and deposits 420,832 98,255
Due from related parties 6,729 13,874
5,765,425 2,034,117
Long-term prepayment 42,428 -
Equipment 1,336,494 214,934
$ 7,144,347 $ 2,249,051
Accounts payable and accrued liabilities $ 1,154,492 $ 443,182
Due to related parties - 39,554
1,154,492 482,736
Deferred government grants 51,025 64,013
1,205,517 546,749
Shareholders' Equity
Share capital 17,426,693 5,819,874
Contributed surplus 620,994 -
Accumulated other comprehensive income 44,130 102,170
Accumulated deficit (12,152,987) (4,219,743)
5,938,830 1,702,302
$ 7,144,347 $ 2,249,051

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Condensed Consolidated Interim Statements of Loss and Comprehensive Loss (unaudited)
(Expressed in Canadian dollars, except number of common shares)
Three months ended Six months ended
Dec 31,
Dec 31,
Dec 31,
Dec 31,
Research and development $ 377,043 $ 344,366 $ 615,838 $ 604,334
Intellectual property and patent 103,781 33,019 361,339 51,263
General and administrative 906,165 470,732 1,470,424 671,709
Share-based compensation 295,500 - 300,222 -
Depreciation 54,800 19,048 72,933 34,884
1,737,289 867,165 2,820,756 1,362,190
LOSS FROM OPERATIONS (1,737,289) (867,165) (2,820,756) (1,362,190)
Government grants 16,310 6,126 21,687 11,984
Other income 53,856 68,308 110,665 135,271
Finance expense (1,263) (488) (1,768) (661)
Foreign exchange gain (loss) 7,711 13,113 (29,475) (633)
Non-cash loss on completion of reverse takeover - - (5,213,597) -
76,614 87,059 (5,112,488) 145,961
NET LOSS FOR THE QUARTER (1,660,675) (780,106) (7,933,244) (1,216,229)
Foreign currency translation adjustment (17,215) 23,632 (58,041) (14,115)
COMPREHENSIVE LOSS FOR THE QUARTER (1,677,890) (756,474) (7,991,285) (1,230,344)
Loss per share - Basic and Diluted $ (0.02) $ (0.15) $ (0.15) $ (0.23)
Weighted average number of shares outstanding - basic and diluted 93,462,025 5,210,843 52,425,645 5,210,843

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Condensed Consolidated Interim Statements of Cash (unaudited)
(Expressed in Canadian dollars)
For the six months ended Dec 31,
Dec 31,
Net loss for the period (7,933,244) (1,216,229)
Items not affecting cash:
Non-cash loss on completion of reverse takeover 5,213,597 -
Share-based compensation 300,222 -
Depreciation 72,933 34,884
(2,346,492) (1,181,344)
Changes in non-cash working capital items:
Decrease/(increase) in accounts and other receivables (12,817) (99,244)
Decrease/(increase) in prepaid expenses (321,664) (615,799)
Increase/(decrease) in accounts payable and accrued liabilities 599,886 126,861
Increase/(decrease) in due to related parties (11,686) (225,619)
Decrease in deferred income - (11,850)
Decrease in deferred government grants (10,830) (34,521)
242,889 (860,173)

Net cash used in operating activities
(2,103,603) (2,041,517)
Prepayment for equipment (42,428) -
Acquisition of equipment and payment for leasehold improvements (1,213,048) (47,688)
Net cash used in investing activities (1,255,476) (47,688)
Proceeds from share issuance, net 6,663,982
Cash acquired in RTO 112,662 -
Net cash provided by financing activities 6,776,644 -
Change in cash during the period 3,417,565 (2,089,205)
Effect of exchange rate changes on cash held in a foreign currency (13,387) 57,754
Cash and cash equivalents, beginning of period 1,319,748 2,460,038
Cash and cash equivalents, end of period 4,723,926 427,587

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Contact Information

  • Novoheart Holdings Inc.
    Suite 1430, 800 West Pender Street
    Vancouver, British Columbia
    V6C 2V6

    Babak Pedram
    Investor Relations
    +1 416-644-5081

    Christian Darbyshire
    Media Relations
    +1 587-352-5053