TORONTO, May 07, 2020 (GLOBE NEWSWIRE) -- Profound Medical Corp. (NASDAQ:PROF; TSX:PRN) (“Profound” or the “Company”), the only company to provide customizable, incision-free therapies which combine real-time Magnetic Resonance Imaging (“MRI”), thermal ultrasound and closed-loop temperature feedback control for the radiation-free ablation of diseased tissue, today reported financial results for the first quarter ended March 31, 2020, and provided an update on its operations.

Recent Corporate Highlights

  • On January 10, 2020, Profound announced its first-ever U.S. multi-site imaging center agreement for TULSA-PRO® with RadNet, Inc. (NASDAQ:RDNT), a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic imaging services through a network of 340 owned and/or operated outpatient imaging centers.
  • On January 10, 2020, Profound also announced that it had submitted its application for a Healthcare Common Procedure Coding System C-Code from the Centers for Medicare & Medicaid Services for the TULSA-PRO® procedure.
  • On January 27, 2020, the Company closed an underwritten offering of common shares, including the full exercise of the over-allotment option, for gross proceeds of US$39,522,625.
     
  • On February 4, 2020, Profound announced that it had retired its $12.5 million in principal amount loan with Canadian Imperial Bank of Commerce approximately 30 months ahead of schedule, thereby extinguishing all of its long-term debt.
  • On March 4, 2020, Profound presented at Cowen and Company’s 40th Annual Health Care Conference.
  • On March 18, 2020, Profound participated in a series of one-on-one virtual meetings with institutional investors in lieu of the in-person BTIG Annual Healthcare Conference originally scheduled to take place in Snowbird, UT.
  • On April 3, 2020, Profound launched a TULSA procedure website, www.tulsaprocedure.com, as a resource for patients with prostate disease.

“During the first quarter of 2020, we made important progress on our U.S. TULSA-PRO® commercialization strategy by executing a multi-site imaging center agreement with RadNet, as well as supporting TULSA-PRO® installations at Vituro Health’s center in Sarasota, FL and the Busch Center in Alpharetta, GA, both of which are now treating patients,” said Arun Menawat, Profound’s CEO. “Importantly, patients can now find up-to-date information on where the TULSA Procedure is available, both within the U.S. and internationally, on our recently launched TULSA procedure website, which features an enhanced TULSA Center Locator Page and contact forms to reach out to each center directly. As a growing resource for prostate patients, the website will provide regular updates, blog posts and patient testimonials to provide every visitor with clear and accurate information.”

Summary First Quarter 2020 Results

All amounts, unless specified otherwise, are expressed in Canadian dollars and are presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting.

For the first quarter ended March 31, 2020, the Company recorded revenue of $1,560,218, with $1,357,539 from the sale of product, $41,085 from lease of medical device revenue and $161,594 from installation and training services. First quarter 2020 revenue increased approximately 6% from $1,475,788 in the same three-month period a year ago.

The Company recorded a net loss for the three months ended March 31, 2020 of $3,607,693, or $0.25 per common share, compared to a net loss of $2,962,686 or $0.27 per common share, for the three months ended March 31, 2019. The increase in net loss was primarily attributed to an increase in research and development (“R&D”) expense of $161,471, an increase in general and administration (“G&A”) expenses of $1,539,114, an increase in selling and distribution expenses of $1,783,674 and a decrease in gross profits of $347,822. This was offset by a decrease in net finance costs of $3,241,009.

Expenditures for R&D for the three months ended March 31, 2020 were higher by $161,471 compared to the three months ended March 31, 2019. Materials, consulting fees and share based compensation increased by $173,407, $89,615, and $120,377, respectively. These increases were due to increased spending and testing for R&D projects and additional system applications, reimbursement of consultants and options awarded to employees. Offsetting these amounts were reductions in salaries and benefits, software and other expenses which decreased by $156,735, $38,947 and $30,624, respectively, resulting from decreased R&D personnel, lower software and hardware costs and an overall decrease in the general R&D expenditures.

G&A expenses for the three months ended March 31, 2020 increased by $1,539,114 compared to the three months ended March 31, 2019. Salaries and benefits, consulting fees, share based compensation, insurance, software and other expenses increased by $591,560, $230,059, $213,956, $409,517, $59,964 and $58,415, respectively, due to salary increases and bonuses awarded to management, increased costs associated with being Nasdaq listed, options vesting during the period, increased insurance costs associated with being Nasdaq listed, increased software costs for cybersecurity and overall increase in general costs. Depreciation expenses decreased by $20,781 due to certain assets being fully depreciated.

Liquidity and Outstanding Share Capital

As at March 31, 2020, the Company had cash of $61,900,725. 

As at May 7, 2020, Profound had an unlimited number of authorized common shares with 16,082,577 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, May 7, 2020, at 4:30 pm 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) 
    
Replay:  1-919-882-2331 
Replay ID:  34270 

The call will also be broadcast live and archived on the Company's website at www.profoundmedical.com under "Webcasts" in the Investors section.

About Profound Medical Corp.

Profound is a commercial-stage medical device company that develops and markets customizable, incision-free therapies for the ablation of diseased tissue.

Profound is commercializing TULSA-PRO®, a technology that combines real-time MRI, robotically-driven transurethral ultrasound and closed-loop temperature feedback control. TULSA-PRO® is designed to provide customizable and predictable radiation-free ablation of a surgeon-defined prostate volume while actively protecting the urethra and rectum to help preserve the patient’s natural functional abilities. TULSA-PRO® has the potential to be a flexible technology in customizable prostate ablation, including intermediate stage cancer, localized radio-recurrent cancer, retention and hematuria palliation in locally advanced prostate cancer, and the transition zone in large volume benign prostatic hyperplasia (BPH). TULSA-PRO® is CE marked, Health Canada approved, and 510(k) cleared by the U.S. Food and Drug Administration.

Profound is also commercializing Sonalleve®, an innovative therapeutic platform that is CE marked for the treatment of uterine fibroids and palliative pain treatment of bone metastases. Sonalleve® has also been approved by the China National Medical Products Administration for the non-invasive treatment of uterine fibroids. The Company is in the early stages of exploring additional potential treatment markets for Sonalleve® where the technology has been shown to have clinical application, such as non-invasive ablation of abdominal cancers and hyperthermia for cancer therapy.

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, uterine fibroids and palliative pain treatment. 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. 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.

COVID-19

The COVID-19 outbreak has been declared a pandemic by the World Health Organization. It is too soon to gauge the impacts of the current outbreak, given the many unknowns related to COVID-19 including the duration and severity of the outbreak. COVID-19 is altering business and consumer activity in affected areas and beyond. The global response to the COVID-19 outbreak has resulted in, among other things, border closures, severe travel restrictions, the temporary shut-down of non-essential services and extreme fluctuations in financial and commodity markets. Additional measures may be implemented by one or more governments in jurisdictions where the Company operates. These measures have caused material disruption to businesses globally, resulting in an economic slowdown. The extent to which COVID-19 and any other pandemic or public health crisis impacts the Company’s business, affairs, operations, financial condition, liquidity, availability of credit and results of operations will depend on future developments that are highly uncertain and cannot be predicted with any meaningful precision, including new information which may emerge concerning the severity of the COVID-19 virus and the actions required to contain the COVID-19 virus or remedy its impact, among others.

The actual and threatened spread of COVID-19 globally could also have a material adverse effect on the regional economies in which the Company operates, could continue to negatively impact stock markets, including the trading price of Profound’s Common Shares, could adversely impact the Company’s ability to raise capital, and could cause continued interest rate volatility and movements that could make obtaining financing more challenging or more expensive.

For further information, please contact:

Stephen Kilmer
Investor Relations
skilmer@profoundmedical.com
T: 647.872.4849


Profound Medical Corp.
Interim Condensed Consolidated Balance Sheets
(Unaudited)

  March 31,
2020
$
 December 31,
2019

$
     
Assets    
     
Current assets    
Cash 61,900,725  19,222,195 
Trade and other receivables 4,471,213  4,058,136 
Investment tax credits receivable 240,000  240,000 
Inventory 5,818,643  4,764,458 
Prepaid expenses and deposits 1,062,788  1,335,620 
Total current assets 73,493,369  29,620,409 
     
Property and equipment 803,593  684,718 
Intangible assets 2,840,409  3,128,820 
Right-of-use assets 2,121,039  2,199,381 
Goodwill 3,409,165  3,409,165 
     
Total assets 82,667,575  39,042,493 
     
Liabilities    
     
Current liabilities    
Accounts payable and accrued liabilities 2,848,789  3,933,114 
Deferred revenue 739,327  654,763 
Long-term debt -  5,144,461 
Provisions 141,071  134,956 
Other liabilities 213,430  286,858 
Derivative financial instrument 222,122  254,769 
Lease liabilities 307,185  258,685 
Income taxes payable 5,446  15,763 
Total current liabilities 4,477,370  10,683,369 
     
Long-term debt -  6,719,924 
Deferred revenue 940,458  829,784 
Provisions 29,029  19,005 
Lease liabilities 2,036,407  2,125,873 
     
Total liabilities 7,483,264  20,377,955 
     
Shareholders’ Equity    
     
Share capital 193,917,357  130,266,880 
Contributed surplus 15,872,210  19,580,338 
Accumulated other comprehensive loss 67,929  (117,188)
Deficit (134,673,185) (131,065,492)
     
Total Shareholders’ Equity 75,184,311  18,664,538 
     
Total Liabilities and Shareholders’ Equity 82,667,575  39,042,493 


Profound Medical Corp.
Interim Condensed Consolidated Statements of Cash Flows
(Unaudited)

  Three months ended
March 31,
  2020

$
Three months ended
March 31,
  2019

$
    
Revenue   
Products 1,357,539 1,347,781 
Services 161,594 128,007 
Lease of medical devices 41,085 - 
  1,560,218 1,475,788 
Cost of sales  965,608 533,356 
Gross profit 594,610 942,432 
    
Operating expenses (recovery)   
Research and development 2,839,217 2,677,746 
General and administrative 3,053,227 1,514,113 
Selling and distribution 1,254,329 (529,345)
Total operating expenses 7,146,773 3,662,514 
    
Operating Loss 6,552,163 2,720,082 
    
Net finance (income)/costs  (3,068,205)172,804 
    
Loss before taxes 3,483,958 2,892,886 
    
Income taxes  123,735 33,800 
    
Net loss attributed to shareholders for the period 3,607,693 2,926,686 
    
Other comprehensive loss (income)   
Item that may be reclassified to profit or loss   
Foreign currency translation adjustment - net of tax of $nil (2019 - $nil) 185,117 (46,389)
    
Net loss and comprehensive loss for the period 3,792,810 2,880,297 
    
Loss per share   
Basic and diluted loss per common share 0.25 0.27 


Profound Medical Corp.
Interim Condensed Consolidated Statements of Cash Flows
(Unaudited)

 Three months ended
March 31,
2020
$
Three months ended
March 31,
2019
$
   
Operating activities  
Net loss for the period(3,607,693)(2,926,686)
Adjustments to reconcile net loss to net cash flows from operating activities:  
Depreciation of property and equipment118,582 129,325 
Amortization of intangible assets288,411 282,110 
Depreciation of right-of-use assets101,173 102,224 
Share-based compensation611,124 72,638 
Interest and accretion expense665,315 342,012 
Deferred revenue195,238 438,306 
Change in fair value of derivative financial instrument(32,647)57,471 
Change in fair value of contingent consideration14,624 (72,876)
Foreign exchange on cash(3,290,028)- 
Changes in non-cash working capital balances  
Trade and other receivables(413,077)(360,565)
Prepaid expenses and deposits272,832 41,650 
Inventory(1,242,998)217,613 
Accounts payable and accrued liabilities(961,929)(347,454)
Provisions16,139 (1,206,383)
Income taxes payable(10,317)12,573 
Net cash flow used in operating activities(7,275,251)(3,218,042)
   
Financing activities  
Issuance of common shares52,098,723 - 
Transaction costs paid(4,152,072)- 
Payment of other liabilities(88,052)- 
Payment of long-term debt and interest(12,497,993)(8,545)
Proceeds from share options exercised1,480,555 (331,490)
Proceeds from warrants exercised9,904,019 - 
Payment of lease liabilities(81,427)(80,269)
Total cash from financing activities46,663,753 (420,304)
   
Net change in cash during the period39,388,502 (3,638,346)
Foreign exchange on cash3,290,028 - 
Cash – Beginning of period19,222,195 30,687,183 
Cash End of period61,900,725 27,048,837