VANCOUVER, British Columbia, May 17, 2019 (GLOBE NEWSWIRE) -- Novoheart Holdings Inc. (“Novoheart” or the “Company”) reports financial results for the three and nine months ended March 31, 2019. Amounts, unless specified otherwise, are expressed in Canadian dollars and are in accordance with International Financial Reporting Standards (IFRS).

Q3 2019 Highlights:

  • Entered into a Revolving Facility Credit for up to approximately $5 Million (the “Facility”) with The Hongkong and Shanghai Banking Corporation
  • Appointed Michelle Khine as the Interim Chair of the Scientific Advisory Board, following the resignation of Roger Haijar

Financial Results for the Third Quarter of 2019

The Company recorded net loss of $1,179,198 (loss per share of $0.01) for the three months ended March 31, 2019 compared to a net loss of $1,586,471 (loss per share of $0.02) for the three months ended March 31, 2018. On a year-to-date basis, the Company recorded a net loss of $5,074,458 (loss per share of $0.05) for the nine months ended March 31, 2019 compared to a net loss of $9,519,714 (loss per share of $0.14) for the nine months ended March 31, 2018. The decrease in the net loss on a year-to-date basis was due primarily to the completion of the reverse takeover transaction that occurred in Q1 2018, for which the Company incurred a non-cash loss on completion of reverse takeover of $5,213,597. The decrease is offset by the increase in operating expenses including costs in research and development, marketing and share-based compensation,compared to the nine months ended March 31, 2018.

The Company recorded revenue of $107,955 and cost of sales of $49,123, achieving a gross margin of 54% for the three months ended March 31, 2019 compared to revenue of $19,348 and cost of sales of $7,818 for the three months ended March 31, 2018. The Company recorded revenue of $113,210 and cost of sales of $50,867 for the nine months ended March 31, 2019 compared to revenue of $19,348 and cost of sales of $7,818 for the nine months ended March 31, 2018. The increase in revenue on a year-to-date basis was due to the increased efforts in pursuing commercial agreements. The revenue recorded in the third quarter of 2019 was from a contract with another top-15 pharmaceutical company (the “Global Pharma Partner”). The contract with the Global Pharma Partner requires the Company to design and fabricate reliable multi-well plates for high-throughput generation, culture and contractility measurements of miniature engineered human cardiac tissue strips. Services commenced in December 2018.

Operating expenses for the third quarter of 2019 was $1,740,805 compared to the operating expenses of $1,622,173 for the third quarter of 2018. Operating expenses for the nine months ended March 31, 2019 and 2018 were $5,715,499 and $4,442,929, respectively. The increase in operating expenses is primarily due to the increase in research and development expenses, marketing expenses and shared-based compensation expenses. The increase in research and development expenses is primarily due to the expansion of Novoheart’s scientific team resulting in an increase in personnel costs and the commencement of a sponsored research agreement signed with the Regents of the University of California, Irvine Campus. The increase in marketing expenses is primarily due to expansion of the commercialization of its  MyHeartTM platform, along with the hiring of the Senior Vice President commercial development in August 2018 to lead the effort. The increase in share-based compensation expenses is due to the issuance of stock options and restricted share units during Q2 and Q3 2019.

Liquidity and Outstanding Share Capital

As at March 31, 2019, the Company had cash of $752,472 and has drawn down $851,000 (HK$5,000,000) out of the $5 million (HK$30,000,000) facility. The Facility is secured by a deposit pledge of a $5,000,000 Xellera Therapeutics Ltd (“XT”). XT is a company dedicated to developing cell- and gene-based therapies, with the mission of bringing advanced therapeutic options to patients in an era of precision medicine. The Chief Executive Officer of the Company controls an entity that owns approximately 40% of XT. He is also a director of XT.

As at May 17, 2019, there were 95,326,025 common shares issued and outstanding, and 6,164,373 common shares issuable upon the exercise of outstanding stock options at an exercise price ranging from $0.32 to $0.50 per share and 491,000 of the issuance of vested restricted share units. The Company also has 972,037 purchase warrants outstanding with an exercise price of C$0.50, expiring in September 2019.

Stock Option Grants

Novoheart announces that it has granted incentive stock options to purchase an aggregate of 114,167 common shares of the Company (the “Options”) to its new employees.

The Options have an exercise price of $0.40 per common share.  The Options expire on May 9, 2024 and vest 40% on the first anniversary of the grant date and 30% on each of the second and third anniversaries of the grant date. The Option grants are subject to the acceptance of the TSX Venture Exchange.  

ABOUT NOVOHEART HOLDINGS INC.

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 MyHeartTM platform, including the world’s first human mini-heart “novoHeartTM” (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 MyHeartTM 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”.

For further information please contact:

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

Ronald Li
Chief Executive Officer
info@novoheart.com

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 MyHeartTM 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.


NOVOHEART HOLDINGS INC.
(Formerly Novoheart Holdings Limited)

Condensed Consolidated Interim Statement of Financial Position (unaudited)
(Expressed in Canadian dollars)

   March 31, 2019   June 30, 2018 
      
ASSETS     
      
Current     
Cash and cash equivalents $752,472 $1,595,094 
Accounts and other receivables  542,171  615,332 
Prepaid expenses and deposits  303,082  312,161 
   1,597,725  2,522,587 
      
Property and equipment, net  915,332  1,245,981 
Intangible assets, net  215,894  277,948 
      
  $2,728,951 $4,046,516 
      
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
Current    
Accounts payable and accrued liabilities $848,633 $1,357,713 
Loan  851,000  - 
Contract liabilities  2,301,655  - 
Due to related parties  30,489  60,684 
   4,031,777  1,418,397 
      
Deferred government grants  25,537  40,648 
Long-term license payable  79,143  75,424 
      
   4,136,457  1,534,469 
      
Shareholders' Equity     
Share capital  17,952,693  17,426,693 
Contributed surplus  2,118,088  1,493,175 
Accumulated other comprehensive income  307,253  303,261 
Accumulated deficit  (21,785,540) (16,711,082)
   (1,407,506) 2,512,047 
      
  $2,728,951 $4,046,516 
        


NOVOHEART HOLDINGS INC.
(Formerly Novoheart Holdings Limited)

Condensed Consolidated Interim Statements of Loss and Comprehensive Loss (unaudited)
(Expressed in Canadian dollars, except number of common shares)

   Three months endedNine months ended
   March 31, 2019  March 31, 2018  March 31, 2019  March 31, 2018 
       
Revenue $107,955 $  19,348 $   113,210 $   19,348 
Cost of sales  49,123  7,818  50,867  7,818 
   58,832  11,530  62,343  11,530 
OPERATING EXPENSES      
Research and development  533,678    371,009    1,468,232    1,062,144 
Intellectual property and patent  62,393  52,316  131,202  413,655 
General and administrative  577,135  712,170  1,858,539  2,094,282 
Marketing  167,265  28,751  607,158  41,766 
Share-based compensation  232,107  289,715  1,150,913  589,937 
Depreciation and amortization  168,227  168,212  499,455  241,145 
   1,740,805  1,622,173  5,715,499  4,442,929 
              
LOSS FROM OPERATIONS  (1,681,973)   (1,610,643) (5,653,156)   (4,431,399)
       
Government grants  464,327  18,331  537,665  40,018 
Other income / (loss)  187  -  (157) 110,665 
Finance expense / Interest income /  (449) 7,441  1,349  5,673 
Foreign exchange gain / (loss)  38,710  (1,600) 39,841  (31,074)
Non-cash loss on completion of reverse takeover  -  -  -  (5,213,597)
   502,775  24,172  578,698  (5,088,315)
       
NET LOSS FOR THE PERIOD $(1,179,198)$  (1,586,471)$  (5,074,458)$  (9,519,714)
       
OTHER COMPREHENSIVE INCOME (LOSS)      
Foreign currency translation adjustment  (36,436) 22,731  3,992  (35,309)
       
COMPREHENSIVE LOSS FOR THE PERIOD $(1,215,634)$  (1,563,740)$  (5,070,466)$  (9,555,023)
       
Loss per share – Basic and Diluted $  (0.01)$     (0.02)$  (0.05)$   (0.14)
       
       
Weighted average number of shares outstanding – basic and diluted  94,581,937  93,462,025  93,829,879  65,693,397 
      


NOVOHEART HOLDINGS INC.
(Formerly Novoheart Holdings Limited)

Condensed Consolidated Interim Statements of Cash Flow (unaudited)
(Expressed in Canadian dollars)

   
For the nine months ended  March 31, 2019  March 31, 2018 
    
CASH FLOWS FROM OPERATING ACTIVITIES   
Net loss for the period $    (5,074,458)$  (9,519,714)
Items not affecting cash:   
Non-cash loss on completion of reverse takeover  -  5,213,597 
Share-based compensation  1,150,913  589,938 
Depreciation and amortization  499,455  241,145 
   (3,424,090) (3,475,034)
Changes in non-cash working capital items:   
Decrease in accounts and other receivables  97,598  72,584 
Decrease/(increase) in prepaid expenses  37,255  (340,352)
Decrease in accounts payable and accrued liabilities  (542,175) (63,559)
Decrease in due to related parties  (89,828) (28,190)
Increase in contract liabilities  2,284,596  - 
Decrease in deferred government grants  (16,919) (16,245)
   1,770,527  (375,762)

Net cash used in operating activities
  (1,653,563) (3,850,796)
    
CASH FLOWS FROM INVESTING ACTIVITIES   
Acquisition of equipment and payment of leasehold improvements  (36,875) (1,309,710)
Acquisition of intangible assets  -  (69,537)
Prepayment for equipment  -  (960)
    
Net cash used in investing activities  (36,875) (1,380,207)
    
CASH FLOWS FROM FINANCING ACTIVITIES   
Proceeds from share issuance, net  -  6,663,982 
Cash acquired in RTO  -  112,662 
Proceeds from loan  847,000  - 
    
Net cash provided by financing activities  847,000  6,776,644 
    
Change in cash during the period  (843,438) 1,545,641 
    
Effect of exchange rate changes on cash held in a foreign currency  816  (10,118)
Cash and cash equivalents, beginning of period  1,595,094  1,319,748 
    
Cash and cash equivalents, end of period $    752,472 $  2,855,271 
    
Supplemental information:   
Non-cash transactions:   
Share issuance from vested RSUs $    526,000 $    -