KINGSTON, ONTARIO--(MARKET WIRE)--Nov 24, 2006 -- Millenium Biologix Corporation (TSX:MBC.TO - News) (“Millenium” or the “Company”) today announced that it has completed a corporate reorganization and closed the previously announced, non-dilutive investment in its wholly owned subsidiary, Millenium Biologix Inc (“MBI”), for $1.475 million.
The investment in MBI was completed following a corporate reorganization that transferred all of MBI’s intellectual property, operational assets and liabilities to Millenium Biologix Technologies Inc., a newly created, wholly owned subsidiary of the Company.
In order to effect the corporate reorganization necessary to complete the financing transaction, MBI had filed a Notice of Intent to make a proposal (the “Proposal”) to its creditors under the Bankruptcy and Insolvency Act (Canada) on October 6, 2006. The Proposal was made on October 18, 2006 and approved by the creditors on October 30, 2006. The completion of the reorganization and investment in MBI satisfy all of the conditions of the Proposal.
“The completion of this transaction is a critical component in Millenium’s restructuring efforts. The funds from this transaction will provide the Company with additional time to move forward with its partnering and M&A activities in an effort to maximize the value of Millenium’s technologies” noted Brian Fielding, Millenium’s CEO.
“Despite challenging financial circumstances, the Board and management team of Millenium are pleased and appreciative that the Company has been able to maintain core staff in all key program areas. We recognize that the value of Millenium’s programs are dependent upon the continued contributions of our talented team”, said Fielding.
Results for the three and six month periods ended September 30, 2006
The Company reported consolidated revenue for the period of $719,983 and a net loss of $10,048,936.
Revenues for the three and six months ended September 30, 2006 were $558,870 and $719,983 respectively, compared with revenues of $314,248 and $532,858 for the same periods in 2005. These reflect a quarter over quarter increase for both comparable periods in 2005 of $244,622 and $187,125 respectively. These increases are primarily driven from increases in the Company’s contract research activities with the Canadian and European space agencies.
Expenses for the three and six months ended September 30, 2006 were $2,999,475 and $6,858,183 respectively, compared with expenses of $4,006,701 and $7,378,200 for the same periods in 2005. These reflect a quarter over quarter decrease for both comparable periods in 2005 of $1,007,226 and $520,017 respectively. These reductions reflect the impact of restructurings undertaken by the Company in December 2005 and June 2006.
For the three and six months ended September 30, 2006, other expense included a write down of $3,935,396 in respect of assets for property, plant and equipment to their estimated fair market value of $820,000.
At September 30, 2006 the Company had cash and cash equivalents of $357,000 compared to March 31, 2006 balances of $4,606,000. At September 30, 2006, the Company had negative working capital of $2,602,523, compared with working capital of $2,648,551 at March 31, 2006.
During the quarter the Company issued $1,000,000 of convertible debentures. Additionally, subsequent to the quarter end, the Company issued a further $325,000 of convertible debentures to assist the financing of MBC’s operations. These funds enabled the Company to maintain operations on a limited basis in both Canada and Switzerland.
Millenium continues to explore various strategic options for the Company. There can be no assurance that such efforts will be successful. In the event the Company is unable to secure sufficient financing, there is substantial doubt as to the Company’s ability to continue as a going concern, which could require the partial or complete divestiture of its core technologies.
Also during the quarter the Company’s shares were suspended by the Toronto Stock Exchange. As announced by the Exchange, formal delisting has been delayed until such time as MBI has completed proceedings under the Proposal.
About Millenium Biologix Corporation
Millenium Biologix Corporation is focused on the development and commercialization of next generation cell culture and tissue engineering systems that will drive change from synthetic implants to more effective biologics-based solutions. For more information about Millenium, please visit www.millenium-biologix.com.
Forward-looking Statements
This press release may contain forward-looking statements, which provide our current expectations or forecasts of future events. In some cases, forward-looking statements can be identified by words such as “anticipate”, “expect”, “believe”, “plan”, “project”, “forecast” or “intend” or future or conditional words such as “may”, “will”, “should”, “would” or “could"; however, the absence of such words does not necessarily mean that a statement is not forward-looking.
The forward-looking statements are based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including our perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate in the circumstances.
Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements due to a number of material factors, including, the impact of general economic conditions on future operations and business plans, changes in product development plans and timing, delays in receipt of regulatory approvals for our products, the level of our costs and operating expenses relative to our revenues, our future capital requirements and the sufficiency of our cash, cash equivalents, investments and other sources of funds, including financing from external sources, to meet these requirements, the outcome of contingencies, such as litigation, and other factors described in the “Risk Factors” section of our most recent annual information form, particularly those under the heading “Dependence on Additional Financing/Need for Additional Financing”. You should carefully consider the factors described above and in that “Risk Factors” section in evaluating our forward-looking statements. Other factors besides those described above and in the annual information form could also affect actual results.
You should not place undue reliance on these forward-looking statements. We undertake no obligations to update publicly any forward-looking statement to reflect circumstances or events after the date such statement was made or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks we describe in the reports we file from time to time with the applicable Canadian securities commissions or similar regulatory authorities. Such additional information is available at www.sedar.com.
Summary consolidated financial statements attached: For complete consolidate financial statements, including accompanying notes, please go to www.sedar.com.
MILLENIUM BIOLOGIX CORPORATION Consolidated Balance Sheets As at September 30, 2006 (unaudited) and March 31, 2006 --------------------------------------------------------------- --------------------------------------------------------------- September 30, March 31, 2006 2006 --------------------------------------------------------------- (unaudited) Assets Current assets: Cash $356,835 $4,605,571 Accounts receivable 333,309 387,353 Investment tax credits receivable 325,000 200,000 Inventories 159,656 245,794 Prepaid expenses 224,709 341,651 --------------------------------------------------------------- 1,399,509 5,780,369 Property and equipment 820,000 4,861,370 Patents, licenses and technology rights 655,717 657,146 Other assets 101,104 70,740 --------------------------------------------------------------- $2,976,330 $11,369,625 --------------------------------------------------------------- --------------------------------------------------------------- Liabilities and Shareholders’ Equity Current liabilities: Accounts payable and accrued liabilities $3,609,352 $2,820,142 Current portion of long-term debt 76,450 41,700 Current portion of obligations under capital leases 316,230 269,976 --------------------------------------------------------------- 4,002,032 3,131,818 Long-term debt - 55,600 Obligations under capital leases - 204,473 Convertible debentures 666,667 - Shareholders’ equity: Share capital 42,149,531 42,149,531 Contributed surplus 3,695,552 3,316,719 Deficit (47,537,452) (37,488,516) --------------------------------------------------------------- (1,692,369) 7,977,734 --------------------------------------------------------------- $2,976,330 $11,369,625 --------------------------------------------------------------- ---------------------------------------------------------------
MILLENIUM BIOLOGIX CORPORATION Consolidated Statements of Operations For the three and six months ended September 30, 2006 and 2005 (unaudited)
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--------------------------------------------------------------------- Three months ended Six months ended September 30, September 30, September 30, September 30, 2006 2005 2006 2005 --------------------------------------------------------------------- Revenue: Skelite $43,910 $27,554 $93,228 $27,554 Space 484,125 173,823 558,814 305,442 Other 30,835 112,871 67,941 199,862 --------------------------------------------------------------------- 558,870 314,248 719,983 532,858 Expenses: General and administrative 1,230,305 1,782,911 3,207,848 2,975,874 Research and development, net of investment tax credits 1,213,458 1,731,015 2,625,228 3,309,138 Cost of materials 229,863 155,122 398,876 478,406 Sales and marketing 25,749 193,133 158,689 354,582 Depreciation and amortization 300,101 144,520 467,542 260,200 --------------------------------------------------------------------- 2,999,476 4,006,701 6,858,183 7,378,200 --------------------------------------------------------------------- Loss before other income (expenses) (2,440,606) (3,692,453) (6,138,200) (6,845,342) Other income (expenses): Write down of fixed assets (3,935,396) - (3,935,396) - Interest income 6,568 12,123 22,993 55,244 Interest expense (35,284) (30,428) (49,450) (43,392) Gain on foreign exchange 3,692 24,488 51,117 22,095 --------------------------------------------------------------------- (3,960,420) 6,183 (3,910,736) 33,947 --------------------------------------------------------------------- Net loss $(6,401,026) $(3,686,270) $(10,048,936) $(6,811,395) --------------------------------------------------------------------- --------------------------------------------------------------------- Basic and diluted net loss per share $(0.05) $(0.05) $(0.08) $(0.10) --------------------------------------------------------------------- Consolidated Statements of Deficit For the six months ended September 30, 2006 and 2005 (unaudited) --------------------------------------------------------------------- --------------------------------------------------------------------- September 30, September 30, 2006 2005 --------------------------------------------------------------------- Deficit, beginning of period: $(37,488,516) $(21,918,680) Net loss (10,048,936) (6,811,395) --------------------------------------------------------------------- Deficit, end of period $(47,537,452) $(28,730,075) --------------------------------------------------------------------- --------------------------------------------------------------------- See accompanying notes to consolidated financial statements. MILLENIUM BIOLOGIX CORPORATION Consolidated Statements of Operations For the three and six months ended September 30, 2006 and 2005 (unaudited) ------------------------------------------------------------------------ Three months ended Six months ended September 30, September 30, September 30, September 30, 2006 2005 2006 2005 ------------------------------------------------------------------------ Cash provided by (used in): Operations: Net loss $(6,401,026) $(3,686,270) $(10,048,936) $(6,811,395) Items not involving cash: Depreciation and amortization 300,101 144,520 467,542 260,200 Stock based compensation 39,200 - 45,500 - Write down of inventories 101,833 - 109,251 - Write down of fixed assets 3,935,396 - 3,935,396 - Gain on sale of fixed assets 780 - 780 - Change in non-cash operating working capital 459,043 614,374 812,084 271,781 ------------------------------------------------------------------------ (1,564,674) (2,927,376) (4,678,383) (6,279,414) Financing: Repayment of long-term debt (10,425) (10,425) (20,850) (20,850) Repayment of obligations under capital leases (81,130) (82,176) (158,220) (125,302) Proceeds on issuance of capital lease - - - 229,945 Proceeds from demand loan 500,000 516,926 500,000 516,926 Repayment from demand loan (500,000) - (500,000) - Proceeds from issuance of convertible debenture 1,000,000 - 1,000,000 - ------------------------------------------------------------------------ 908,445 424,325 820,930 600,719 Investments: Purchase of property and equipment (8,960) (2,216,397) (294,980) (3,129,873) Acquisition of patents, licences and technology rights (3,224) (96,971) (65,939) (182,007) Other assets (13,597) - (30,364) 26,000 ------------------------------------------------------------------------ (25,781) (2,313,368) (391,283) (3,285,880) Increase (decrease) in cash and cash equivalents (682,011) (4,816,419) (4,248,736) (8,964,575) Cash and cash equivalents, beginning of period 1,038,844 4,816,419 4,605,571 8,964,575 ------------------------------------------------------------------------ Cash and cash equivalents, end of period $356,835 $- $356,835 $- ------------------------------------------------------------------------ The Company considers cash and cash equivalents to be highly liquid investments with original maturities of three months or less.
Contact: Contacts: Millenium Biologix Corporation Brian Fielding CEO 613-389-6565 or Toll-free: 866-MBC-3380 investor@millenium-biologix.com
Source: Millenium Biologix Corporation