Trimel Pharmaceuticals Corporation
TSX : TRL

Trimel Pharmaceuticals Corporation

March 25, 2013 17:05 ET

Trimel Announces Fourth Quarter and Year-End 2012 Financial Results

TORONTO, ONTARIO--(Marketwire - March 25, 2013) - Trimel Pharmaceuticals Corporation (TSX:TRL) ("Trimel" or "the Company") today reported its financial results for the three and twelve month periods ended December 31, 2012.

Financial Results for the Three and Twelve Months Ended December 31, 2012

For the three and twelve month periods ended December 31, 2012, Trimel incurred Research and Development expenses ("R&D") of US$3.9 million and US$16.5 million respectively as compared to US$2.2 million and US$13.2 million for the comparable 2011 periods. The increase in R&D spending for the 2012 period relates primarily to the costs associated with the advancement of the CompleoTRT™ Phase III and Tefina™ Phase II clinical trials.

Trimel incurred General and Administrative expenses of US$3.3 million and US$10.9 million for the three and twelve month periods ended December 31, 2012 respectively as compared to US$2.7 million and US$8.4 million for the comparable 2011 periods. The increase in spending for the 2012 period(s) as compared to spending levels for the same 2011 period(s) was primarily attributable to employment related expenses and legal fees related to intellectual property and arbitration matters.

For the three and twelve month periods ended December 31, 2012, the Company incurred a net loss of US$0.09 and US$0.32 per share respectively, as compared to US$0.06 and US$0.39 per share for the comparable 2011 periods.

As at December 31, 2012, the Company had total assets of US$16.9 million as compared to US$25.3 million at September 30, 2012 and total liabilities of US$12.2 million at December 31, 2012 as compared to US$13.7 million at September 30, 2012.

The information set out above is in summary form. Readers are encouraged to review the Company's annual information form, financial statements (and accompanying notes), together with management's discussion and analysis available on SEDAR at www.sedar.com and on the Company's website at www.trimelpharmaceuticals.com.

Short Form Preliminary Prospectus

As previously announced, the Company has filed a preliminary short form prospectus in connection with a proposed marketed offering of units, each unit consisting of one common share of the Company and one-half of one common share purchase warrant. The common shares forming a part of the units will be comprised of a combination of common shares issued by the Company and common shares sold by Mr. Eugene Melnyk. The warrants forming a part of the units will all be warrants issued by the Company. Mr. Melnyk will receive the net proceeds from the sale of common shares sold by him. The Company will receive the net proceeds from the sale of common shares and warrants issued by the Company.

Further information with respect to the Company and the proposed offering is set out in the preliminary short form prospectus of the Company dated March 20, 2013, available on SEDAR at www.sedar.com.

About Trimel:

Trimel Pharmaceuticals Corporation (TSX:TRL) - Trimel is a specialty pharmaceutical company actively developing medications for male hypogonadism, female sexual dysfunction and various respiratory disorders. CompleoTRT™, a product utilizing Trimel's licensed bioadhesive intranasal gel technology, has successfully completed its pivotal Phase III study for the treatment of male hypogonadism, a condition commonly referred to as "Low T", and Trimel is preparing to file its New Drug Application with the FDA in the second quarter of 2013. For more information, please visit www.trimelpharmaceuticals.com.

Notice regarding forward-looking statements:

Information in this press release that is not current or historical factual information may constitute forward looking information within the meaning of securities laws. Implicit in this information, are assumptions regarding our future operational results. These assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual performance of the Company is subject to a number of risks and uncertainties, and could differ materially from what is currently expected as set out above. For more exhaustive information on these risks and uncertainties you should refer to our preliminary short form prospectus dated March 20, 2013 which is available at www.sedar.com. Forward-looking information contained in this press release is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time, whether as a result of new information, future events or otherwise, except as required by applicable securities law.

TRIMEL PHARMACEUTICALS CORPORATION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT DECEMBER 31, 2012 AND DECEMBER 31, 2011
(expressed in U.S. Dollars)
ASSETS
2012 2011
CURRENT
Cash $ 9,216,999 $ 14,528,625
Other receivables 72,209 74,304
Prepaids and other assets 1,023,047 276,578
10,312,255 14,879,507
NON-CURRENT ASSETS
Restricted cash 25,128 -
Property and equipment, net 3,026,160 3,508,194
Intangible assets 3,562,600 3,858,400
TOTAL ASSETS $ 16,926,143 $ 22,246,101
LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 4,802,114 $ 3,207,507
Provisions 42,494 417,378
Income taxes payable - 74,611
Current portion of capital lease obligation 140,551 393,807
Current portion of long-term debt, net of issuance costs 2,425,562 -
7,410,721 4,093,303
LONG-TERM
Capital lease obligation - 137,497
Deferred tax liability - 56,953
Long-term debt, net of issuance costs 4,561,686 -
Derivative financial instrument 203,248 -
TOTAL LIABILITIES 12,175,655 4,287,753
SHAREHOLDERS' EQUITY
Share capital 78,214,661 67,430,241
Warrants 3,452,607 2,413,367
Contributed surplus 4,318,927 1,610,972
Accumulated other comprehensive income 362,920 78,682
Deficit (81,598,627 ) (53,574,914 )
TOTAL SHAREHOLDERS' EQUITY 4,750,488 17,958,348
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 16,926,143 $ 22,246,101
TRIMEL PHARMACEUTICALS CORPORATION
CONSOLIDATED STATEMENT OF LOSS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
(expressed in U.S. Dollars)
2012 2011
EXPENSES
Research and development, net of refundable tax credits $ 16,522,603 $ 13,229,964
General and administrative 10,896,746 8,440,763
Total operating expenses 27,419,349 21,670,727
FINANCE COSTS, NET
Accretion of long-term debt 28,573 1,672,859
Interest on long-term debt and other financing costs 606,674 737,407
Interest income (14,060 ) (160,327 )
Change in fair value of derivative financial instrument 94,158 -
715,345 2,249,939
REORGANIZATION AND OTHER COSTS - 2,085,751
TOTAL EXPENSES 28,134,694 26,006,417
LOSS BEFORE INCOME TAXES (28,134,694 ) (26,006,417 )
PROVISION FOR (RECOVERY OF) INCOME TAXES
Current (53,036 ) 348,090
Deferred (57,945 ) 23,817
(110,981 ) 371,907
NET LOSS $ (28,023,713 ) $ (26,378,324 )
OTHER COMPREHENSIVE LOSS, NET OF INCOME TAX
Foreign currency translation adjustment 284,238 78,682
TOTAL COMPREHENSIVE LOSS FOR THE YEAR $ (27,739,475 ) $ (26,299,642 )
Basic and Diluted Weighted Average Shares Outstanding 86,633,082 67,019,568
Basic and Diluted Net Loss per Common Share $ (0.32 ) $ (0.39 )
TRIMEL PHARMACEUTICALS CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
(expressed in U.S. Dollars)
Share capital Warrants Debt conversion option Contributed surplus Accumulated other comprehensive income Deficit Total
Balance, January 1, 2011 $ 4,252,937 $ - $ 3,609,798 $ 916,912 $ - $ (27,196,590 ) $ (18,416,943 )
Net loss for the year - - - - - (26,378,324 ) (26,378,324 )
Cumulative translation adjustment - - - - 78,682 - 78,682
Total comprehensive loss for the year - - - - 78,682 (26,378,324 ) (26,299,642 )
Issuance of Class A shares and warrants, net of issuance costs 28,666,612 2,413,367 - - - - 31,079,979
Equity portion of convertible debt issued - - 141,571 - - - 141,571
Conversion of convertible debt 33,222,160 - (3,751,369 ) - - - 29,470,791
Share issuance in amalgamation transaction 1,288,532 - - - - - 1,288,532
Share based compensation - - - 694,060 - - 694,060
Balance as at December 31, 2011 $ 67,430,241 $ 2,413,367 $ - $ 1,610,972 $ 78,682 $ (53,574,914 ) $ 17,958,348
Balance, January 1, 2012 $ 67,430,241 $ 2,413,367 $ - $ 1,610,972 $ 78,682 $ (53,574,914 ) $ 17,958,348
Net loss for the year - - - - - (28,023,713 ) (28,023,713 )
Cumulative translation adjustment - - - - 284,238 - 284,238
Total comprehensive loss for the year - - - - 284,238 (28,023,713 ) (27,739,475 )
Unit issuance in public offering, net of issuance costs 10,728,722 1,002,882 - - - - 11,731,604
Broker warrants issued as part of long-term debt - 36,823 - - - - 36,823
Conversion of warrants 5,698 (465 ) - - - - 5,233
Conversion of options 50,000 - - - - - 50,000
Share based compensation - - - 2,707,955 - - 2,707,955
Balance as at December 31, 2012 $ 78,214,661 $ 3,452,607 $ - $ 4,318,927 $ 362,920 $ (81,598,627 ) $ 4,750,488
TRIMEL PHARMACEUTICALS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
(expressed in U.S. Dollars)
2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the year $ (28,023,713 ) $ (26,378,324 )
Items not requiring an outlay of cash:
Amortization of intangible assets 295,800 295,800
Depreciation of property and equipment 687,890 555,220
Accretion of long-term debt 28,573 1,672,859
Amortization of deferred financing costs 153,386 -
Broker warrants issued 36,823 -
Interest expense 414,771 737,407
Change in fair value of derivative financial instrument 94,158 -
Share based compensation 2,707,955 694,060
Reorganization and other costs - 2,085,751
Loss on property and equipment 1,889 43,333
Deferred income tax provision (57,945 ) 23,817
Income tax provision (53,036 ) 348,090
Other - (11,748 )
Net changes in non-cash working capital items related to operating activities:
Other receivables 3,494 175,092
Accounts payable and accrued liabilities 1,490,869 871,452
Prepaids and other assets (737,871 ) (77,784 )
Provisions (382,357 ) 309,900
Income taxes received (paid) (22,876 ) (357,475 )
(23,362,190 ) (19,012,550 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of Class A shares and warrants, net of issuance costs - 31,079,979
Proceeds from issuance of common shares and warrants, net of financing costs 11,731,604 -
Proceeds from issuance of convertible debt - 2,399,900
Proceeds from long-term debt financing, net of financing costs 6,914,379 -
Proceeds from exercise of warrants 5,233 -
Proceeds from exercise of options 50,000 -
Payment of capital lease obligations (400,669 ) (175,957 )
Interest paid (346,419 ) (16,456 )
17,954,128 33,287,466
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment (136,941 ) (527,699 )
Proceeds from sale of fixed assets 2,833 -
Restricted cash (25,128 ) -
(159,236 ) (527,699 )
NET (DECREASE)/INCREASE IN CASH FOR THE YEAR (5,567,298 ) 13,747,217
Exchange gain on cash 255,672 (5,426 )
CASH, BEGINNING OF THE YEAR 14,528,625 786,834
CASH, END OF THE YEAR $ 9,216,999 $ 14,528,625

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