TORONTO, Nov. 16, 2016 (GLOBE NEWSWIRE) -- Profound Medical Corp. (TSX-V:PRN) (“Profound” or the “Company”), an emerging medical device company focused on prostate care, today reported financial results for the three months ended September 30, 2016. All amounts, unless specified otherwise, are expressed in Canadian dollars and are presented in accordance with International Financial Reporting Standards.
Corporate Highlights
- On August 15, 2016, Profound announced the appointment of Arun Menawat, Ph.D. as its new Chief Executive Officer, the transition of its former Chief Executive Officer, Steven Plymale, to President and Chief Operating Officer, and the promotion of Rashed Dewan from Corporate Controller to Vice President, Finance.
- On September 22, 2016, the Company announced that the first patient had been treated in the TACT Pivotal Clinical Trial, designed to further evaluate the safety and efficacy of TULSA-PRO to ablate prostate tissue in patients with localized, organ-confined prostate cancer, at Vanderbilt University Medical Center in Nashville, TN.
- On October 5, 2016, the Company announced that it had received Frost & Sullivan’s 2016 European Prostate Ablation System New Product Innovation Award for its TULSA-PRO™ system.
- On October 17, 2016, Profound announced that it had entered into an agreement with a syndicate of underwriters led by GMP Securities L.P. (the “Underwriters”), pursuant to which the Underwriters agreed to purchase, on a bought deal basis pursuant to the filing of a short form prospectus, 15,820,000 common shares of the Company at a price of $1.10 per common share for aggregate gross proceeds to Profound of $17,402,000.
- On November 14, 2016, Profound announced that it has completed its previously announced bought deal offering resulting in the issuance of 15,820,000 common shares for gross proceeds of $17,402,000.
“The third quarter of 2016 was another period of good progress for Profound,” said Dr. Menawat. “Importantly, the bought deal financing arranged during the quarter provides us with the financial resources needed to support the completion of the TACT pivotal trial and, at the same time, to further advance our pilot TULSA-PRO sales activities in Europe. We look forward to updating our stakeholders as we progress.”
Summary Third Quarter 2016 Results
The Company recorded a net loss for the three months ended September 30, 2016 of $4,061,208 or $0.10 per common share, compared with a net loss of $2,957,179 or $0.08 per common share, for the three months ended September 30, 2015. For the three months ended September 30, 2016, the net loss was primarily attributed to R&D expenses of $2,506,112, SG&A expenses of $1,273,521 and interest and accretion expense of $302,122 partially offset by interest income of $25,270. For the three months ended September 30, 2015, the net loss was attributed to the ongoing R&D expenses of $1,657,700, SG&A expenses of $1,099,798, and interest and accretion expense of $266,603, partially offset by interest income of $66,922.
Expenditures for R&D for the three months ended September 30, 2016 were higher by $848,412 compared to the three months ended September 30, 2015. The increase was primarily due to the activities in preparing regulatory filings for marketing approval of TULSA-PRO in Canada, and preparation for the initiation of the multi-jurisdictional Pivotal Trial. Preparations for the Pivotal Trial include organizing the IDE submission for approximately 15 clinical sites, designed to support a 510(k) submission in the United States to provide a pathway for Class II classification for the TULSA-PRO system. As a result consulting expense increased by $432,202 and validation expense for clinical trials increased by $71,711. The number of employees involved in R&D also increased during this period, resulting in salaries and benefits increasing by $377,741. These increases were offset by reduction in materials expense of $162,571 as costs related to prototyping decreased.
SG&A expenses for the three months ended September 30, 2016 were higher by $173,723 compared to the three months ended September 30, 2015, primarily due to a $218,400 increase in salary and benefits expenses at the Company’s German sales office, established in January 2016. Rent and office expenses also increased by $108,369 due to relocation to the new larger office building on July 1, 2016, which was partially offset by lower share based compensation expense.
Liquidity and Outstanding Share Capital
As of September 30, 2016, the Company had cash and short-term investments of $9,567,378. This did not include any of the proceeds from the bought deal offering, which closed on November 14, 2016.
As at November 16, 2016, Profound had an unlimited number of authorized common shares with 55,305,577 common shares issued and outstanding.
For complete financial results, please see our filings at www.sedar.com and our website at www.profoundmedical.com.
Conference Call Details
Profound Medical is pleased to invite all interested parties to participate in a conference call today, November 16, 2016, at 4:30 p.m. ET during which time the results will be discussed.
| Live Call: | 1-877-407-9210 (Canada and the United States) | |||
| 1-201-689-8049 (International) | ||||
| Conference ID: | 13648483 | |||
| Replay: | 1-877-481-4010 (Canada and the United States) | |||
| 1-919-882-2331 (International) | ||||
| Replay ID: | 10119 | |||
The call will also be broadcast live and archived on the Company's website at profoundmedical.com under "Investor Presentations" in the Investor Relations section.
About Profound Medical Corp.
The Profound Medical team is committed to the effort to achieve a new therapeutic standard in prostate cancer. For the millions of men currently living with prostate cancer, and the thousands more who are diagnosed with it every year, current treatment options often mean having to make difficult choices based on potential side effects that can significantly impact quality of life. Our mission is to profoundly change the standard of care by creating a tomorrow where clinicians can confidently ablate cancerous prostate tissue with precision, while actively protecting critical anatomy from potential side effects; a tomorrow where patients have access to a safe, fast and effective treatment option, so they can quickly return to their daily lives.
Established in 2008, Profound Medical is commercializing a novel technology, TULSA-PRO, which combines real-time Magnetic Resonance Imaging with transurethral, robotically-driven therapeutic ultrasound and closed-loop thermal feedback control that is designed to provide precise ablation of the prostate while simultaneously protecting critical surrounding anatomy from potential side effects. TULSA-PRO is CE Marked and Profound is sponsoring a multicenter, prospective FDA-registered clinical trial, TACT, which is designed to further demonstrate the safety and effectiveness of this innovative technology.
Forward-Looking Statements
This release includes forward-looking statements regarding Profound and its business which may include, but is not limited to, the expectations regarding the efficacy of Profound’s technology in the treatment of prostate cancer. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such statements are based on the current expectations of the management of Profound. The forward-looking events and circumstances discussed in this release, may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company, including risks regarding the pharmaceutical industry, economic factors, the equity markets generally and risks associated with growth and competition. Although Profound has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Profound undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, other than as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
| Profound Medical Corp. | ||||||||||
| Interim Condensed Consolidated Balance Sheets | ||||||||||
| (Unaudited) | ||||||||||
| September 30, 2016 $ | December 31, 2015 $ | |||||||||
| Assets | ||||||||||
| Current assets | ||||||||||
| Cash | 9,567,378 | 10,522,520 | ||||||||
| Short-term investment | - | 10,000,000 | ||||||||
| HST receivable and other assets | 156,259 | 92,479 | ||||||||
| Investment tax credits receivable | 198,000 | 173,000 | ||||||||
| Prepaid expenses and deposits | 826,505 | 139,305 | ||||||||
| 10,748,142 | 20,927,304 | |||||||||
| Property and equipment | 1,057,989 | 229,112 | ||||||||
| Intangible assets | 245,165 | 32,500 | ||||||||
| 12,051,296 | 21,188,916 | |||||||||
| Liabilities | ||||||||||
| Current liabilities | ||||||||||
| Accounts payable and accrued liabilities | 2,159,774 | 980,278 | ||||||||
| Long-term debt | 2,450,906 | 286,700 | ||||||||
| Provisions | 40,594 | - | ||||||||
| 4,651,274 | 1,266,978 | |||||||||
| Long-term debt | 3,915,489 | 5,560,674 | ||||||||
| Provisions | 111,100 | - | ||||||||
| Other liability | 453,920 | 397,814 | ||||||||
| 9,131,783 | 7,225,466 | |||||||||
| Shareholders’ Equity | ||||||||||
| Share capital | 67,089,681 | 67,082,821 | ||||||||
| Contributed surplus | 2,500,040 | 2,002,190 | ||||||||
| Foreign currency translation reserve | (10,495 | ) | - | |||||||
| Deficit | (66,659,713 | ) | (55,121,561 | ) | ||||||
| 2,919,513 | 13,963,450 | |||||||||
| 12,051,296 | 21,188,916 | |||||||||
| Profound Medical Corp. | ||||||||||||||||||
| Interim Condensed Consolidated Statements of Loss and Comprehensive Loss | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| Three months ended September 30, 2016 $ | Three months ended September 30, 2015 $ | Nine months ended September 30, 2016 $ | Nine months ended September 30, 2015 $ | |||||||||||||||
| Expenses | ||||||||||||||||||
| Research and development | 2,506,112 | 1,657,700 | 7,229,806 | 3,598,282 | ||||||||||||||
| Selling, general and administrative | 1,273,521 | 1,099,798 | 3,582,523 | 5,075,436 | ||||||||||||||
| Total operating expenses | 3,779,633 | 2,757,498 | 10,812,329 | 8,673,718 | ||||||||||||||
| Finance costs - net | ||||||||||||||||||
| Preferred share dividend expense | - | - | - | 481,354 | ||||||||||||||
| Interest and accretion expense | 302,122 | 266,603 | 840,228 | 5,348,895 | ||||||||||||||
| Interest income | (25,270 | ) | (66,922 | ) | (123,785 | ) | (80,311 | ) | ||||||||||
| Listing expense | - | - | - | 2,058,234 | ||||||||||||||
| Loss on recognition of convertible notes | - | - | - | 2,094,565 | ||||||||||||||
| Change in fair value of convertible notes | - | - | - | (334,680 | ) | |||||||||||||
| Gain on conversion of convertible notes | - | - | - | (1,759,885 | ) | |||||||||||||
| Gain on extinguishment of long-term debt | - | - | - | (63,568 | ) | |||||||||||||
| Change in fair value of derivatives | - | - | - | (2,086,406 | ) | |||||||||||||
| Total finance costs | 276,852 | 199,681 | 716,443 | 5,658,198 | ||||||||||||||
| Loss before income taxes | 4,056,485 | 2,957,179 | 11,528,772 | 14,331,916 | ||||||||||||||
| Tax expense | 4,723 | - | 9,380 | (726,071 | ) | |||||||||||||
| Net loss for the period | 4,061,208 | 2,957,179 | 11,538,152 | 13,605,845 | ||||||||||||||
| Item that may be reclassified to profit or loss | ||||||||||||||||||
| Foreign currency translation adjustment | 5,341 | - | 10,495 | - | ||||||||||||||
| Net loss and comprehensive loss for the period | 4,066,549 | 2,957,179 | 11,548,647 | 13,605,845 | ||||||||||||||
| Basic and diluted weighted average shares outstanding | 39,482,212 | 39,458,683 | 39,476,278 | 18,343,256 | ||||||||||||||
| Basic and diluted net loss per common share | 0.10 | 0.08 | 0.29 | 0.74 | ||||||||||||||
| Profound Medical Corp. | |||||||||
| Interim Condensed Consolidated Statements of Cash Flows | |||||||||
| (Unaudited) | |||||||||
| Nine months ended September 30, 2016 $ | Nine months ended September 30, 2015 $ | ||||||||
| Cash provided by (used in) | |||||||||
| Operating activities | |||||||||
| Net loss for the period | (11,538,152 | ) | (13,605,845 | ) | |||||
| Depreciation of property and equipment | 113,336 | 85,714 | |||||||
| Amortization of intangible assets | 7,889 | 1,875 | |||||||
| Preferred share dividend expense | - | 481,354 | |||||||
| Share-based compensation | 501,035 | 566,872 | |||||||
| Loss on recognition of convertible notes | - | 2,094,565 | |||||||
| Gain on extinguishment of long-term debt | - | (63,568 | ) | ||||||
| Change in fair value of convertible notes | - | (334,680 | ) | ||||||
| Change in fair value of derivatives | - | (2,086,406 | ) | ||||||
| General and administrative expenses | - | 2,303,034 | |||||||
| Listing expense | - | 2,058,234 | |||||||
| Gain on conversion of convertible notes | - | (1,759,885 | ) | ||||||
| Interest and accretion expense | 840,152 | 5,348,895 | |||||||
| Net change in non-cash working capital balances | |||||||||
| Prepaid expenses | (687,200 | ) | (33,565 | ) | |||||
| Accounts payable and accrued liabilities | 1,088,126 | (575,631 | ) | ||||||
| Provisions | 40,594 | - | |||||||
| Taxes payable | - | (726,071 | ) | ||||||
| Investment tax credits receivable | (25,000 | ) | 773,105 | ||||||
| HST receivable and other assets | (63,780 | ) | 246,316 | ||||||
| (9,723,000 | ) | (5,225,687 | ) | ||||||
| Investing activities | |||||||||
| Cash acquired from Profound | - | 1,157,535 | |||||||
| Sale (purchase) of short-term investment | 10,000,000 | (10,000,000 | ) | ||||||
| Purchase of intangible assets | (139,679 | ) | - | ||||||
| Purchase of property and equipment | (831,113 | ) | (158,774 | ) | |||||
| 9,029,208 | (9,001,239 | ) | |||||||
| Financing activities | |||||||||
| Proceeds from convertible notes | - | 1,500,000 | |||||||
| Issuance of common shares | - | 24,008,828 | |||||||
| Proceeds from long-term debt | - | 4,000,000 | |||||||
| Payment of long-term debt | (265,025 | ) | (50,575 | ) | |||||
| Transaction costs paid | - | (1,657,860 | ) | ||||||
| Repayment of bank loan | - | (700,000 | ) | ||||||
| Proceeds from share option exercise | 3,675 | 7,438 | |||||||
| Interest paid | - | (8,321 | ) | ||||||
| (261,350 | ) | 27,099,510 | |||||||
| Increase (decrease) in cash during the period | (955,142 | ) | 12,872,584 | ||||||
| Cash and cash equivalents - Beginning of period | 10,522,520 | 406,495 | |||||||
| Cash and cash equivalents - End of period | 9,567,378 | 13,279,079 | |||||||
| Supplemental information | |||||||||
| Transaction costs included in accounts payable and accrued liabilities | - | 545,876 | |||||||
| Intangible asset additions included in accounts payable and accrued liabilities | 80,875 | - | |||||||
| Property and equipment additions included in provisions | 111,100 | - | |||||||