VANCOUVER, BC / ACCESSWIRE / November 27, 2017 / LED Medical Diagnostics Inc. (OTCQB: LEDIF; TSX-V: LMD; FRA: LME) (''LED Medical'' or the ''Company'') today announced its financial results for the third quarter ended September 30, 2017, reported in United States dollars and in accordance with International Financial Reporting Standards (''IFRS''). The Company's results are presented in comparison to the third quarter ended September 30, 2016. All balances are expressed in United States dollars unless otherwise stated.
Business Highlights and Events Subsequent to the Quarter
- American Dental Partners selected LED Medical Diagnostics subsidiary Apteryx as their provider for cloud dental imaging software technologies. American Dental Partners will transition their entire network--nearly 300 US-based dental and specialty practices--to Apteryx's XVWeb cloud imaging technology within the next 12 months.
- Dental Care Alliance selected LED Medical Diagnostics as preferred imaging technology providers for dental imaging devices and software technologies. Dental Care Alliance is one of the United States' largest and oldest dental support organizations, with 265 affiliated practices across all of the dental specialties in 13 states.
- On October 30, 2017 (the ''closing date''), the Company issued 250 senior secured debentures with a principle amount of CDN $2,500,000 (US$1,938,690), maturing 24 months from the closing date. Each unit consists of a debenture in principal in the amount of CDN $10,000 and 21,250 common shares of the company and is attached with a 12% coupon. The Company issued 888,000 broker warrants (the ''Broker's Warrants'') to arm's length brokers. Each Broker's Warrant is non-transferrable and exercisable at an exercise price of CDN $0.10 at any time up to and including the date which is 24 months from the closing date. Transaction costs associated with this issuance were CDN $232,031.65 (US$179,935) and have been netted against the debenture proceeds received. Certain insiders of LED, including a director and officer, acquired units in the offering.
Financial Highlights
- LED Medical reported revenue of US$3.2 million, which is a decrease of 14% from the three months ended June 30, 2017 and a 28% increase from the three months ended September 30, 2016.
- The net loss before tax was US$1,447,713 for the three months ended September 30, 2017, as compared to a net loss of US$855,484 for the three months ended September 30, 2016. The net loss for the three months ended September 30, 2017 was largely due to a significant decrease in the fair market value of the Company's Canadian dollar denominated warrants as well as losses resulting from normal business operations. The decrease in the fair market value of the Canadian dollar warrants is an accounting adjustment with no impact on cash flow.
- Gross Margin for the three months ended September 30, 2017 was 65% compared to 25% in the three months ended September 30, 2016. Increase in gross margin over the comparable periods was due to revenue mix, specifically the addition of higher margin Apteryx software products.
- Total operating expenses for the three months ended September 30, 2017 were US$2.25 million as compared to US$1.46 million for the three months ended September 30, 2016. Core operating expenses (excluding stock-based compensation, deferred share unit compensation and other operating expenses) for the three months ended September 30, 2017 were US$2.16 million, as compared to US$1.46 million for the three months ended September 30, 2016.
- The Company had cash of US$1.12 million as of September 30, 2017. Cash flow used in operations was US$2.7 million during the nine months ended September 30, 2017 compared to US$1.8 million during the nine months ended September 30, 2016. The cash outflows from investing activities during the nine months ended September 30, 2017 were US$10.2 million relating to the purchase of Apteryx, Inc. There were inflows from financing activities for the nine months ended September 30, 2017 of US$13.6 million attributed to the financing related to the purchase of Apteryx.
Dr. David Gane, CEO of LED stated, ''I am pleased to report that Q3 was near breakeven EBITDA from operations for the three months ended September 30, 2017 at US ($58,673). Revenues in Q3 declined over the prior quarter due to the lower sales seasonality typically seen in the summer months as well as a dip in Apteryx software revenues as we transition from sales of our perpetual license software to our cloud based XV Web software as a service (SaaS) subscription model.''
Financial Statements and Management's Discussion & Analysis
Please see the audited consolidated financial statements and related Management's Discussion & Analysis (''MD&A'') for more details. The interim consolidated financial statements for the three months ended September 30, 2017 and related MD&A have been reviewed and approved by the Company's Audit Committee and Board of Directors. The Company has prepared this truncated news release to alert investors to its results and that a more detailed explanation and analysis is readily available in the MD&A. These reports have been filed on SEDAR at www.sedar.com and also posted to www.ledmd.com.
Non-IFRS Measures
The following and preceding discussion of financial results includes references to Gross Margin and Core Operating Expenses, which are non-IFRS financial measures. The measure of gross margin is provided as management believes this is a good indicator in evaluating the operating performance of the Company. EBITDA is defined as net loss and comprehensive loss and excludes interest; income taxes; depreciation; amortization; finder's warrants issuance costs; stock-based compensation; deferred share unit compensation; mark to market adjustments on Canadian dollar denominated warrants; foreign exchange gain or loss; and other income. The measure of working capital is provided as management believes this is a good indicator of the operating liquidity available to the Company.
About LED Medical Diagnostics Inc.
Founded in 2003 and headquartered in Vancouver, British Columbia, Canada, LED Medical Diagnostics Inc., through its wholly-owned subsidiaries LED Dental Inc. and LED Dental Ltd, provide dentists and oral health specialists with advanced diagnostic imaging products and software, in addition to the award-winning VELscope® Vx tissue fluorescence visualization technology. Backed by an experienced leadership team and dedicated to a higher level of service and support, LED Dental is committed to providing dental practitioners with the best technology available by identifying and adding leading products to its growing portfolio.
The Company is currently listed on the TSX Venture Exchange (TSX-V) under the symbol ''LMD,'' the OTCQB under the symbol ''LEDIF,'' as well as the Frankfurt Stock Exchange under the symbol ''LME.'' For more information, call 844.952.7327 or visit www.leddental.com/investor-relations.
Investor Relations:
Bristol Capital Glen Akselrod
Phone: 905-326-1888 x10
Email: [email protected]
Media Contact:
LED Dental Chris Koch
Phone: 678.293.9413
Email: [email protected]
Corporate Contact:
LED Medical David Gane, CEO
Phone: 604.434.4614 x227
Email: [email protected]
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements
This press release contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking information under applicable Canadian securities legislation that involve risks and uncertainties. Such forward-looking statements or information include statements regarding, but not limited to the Company's future growth strategy, its distribution strategy and product offerings, potential expansion of the Company's technology to other medical applications or markets, or the potential introduction of new technologies by the Company. Persons reading this press release are cautioned that such statements or information are only predictions, and that the Corporation's actual future results or performance may be materially different. Factors that could cause actual events or results to differ materially from those suggested by these forward-looking statements include, but are not limited to competition risks, distributor risks, product development risks such as regulatory, design, intellectual property and other factors described in the Corporation's reports filed on SEDAR including its Annual Information Form and financial report for the year ended December 31, 2016. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. All forward-looking statements made in this press release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company will be realized. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
1 EBITDA or Earnings before Interest, Taxes Depreciation and Amortization is a non-IFRS measure that does not have a standardized meaning and may not be comparable to a similar measure disclosed by other issuers. This measure does not have a comparable GAAP measure. EBITDA referenced here relates to net loss and comprehensive loss and excludes interest, income taxes, depreciation, amortization, finder's warrants issuance costs, stock-based compensation, deferred share unit compensation, mark to market adjustments on Canadian dollar denominated warrants, foreign exchange gain or loss and other income. This measure does not have a comparable IFRS measure and is used by the Company to manage and evaluate the cash operating loss of the business.
2 Gross margin is a non-IFRS measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. Gross margin referenced here relates to revenues less cost of sales. This measure does not have a comparable IFRS measure and is used by the Company to manage and evaluate the operating performance of the Company.
3 Core operating expense is a non-IFRS measure that does not have a standardized meaning and may not be comparable to a similar measure disclosed by other issuers. This measure does not have a comparable IFRS measure. Core operating expense includes sales and marketing, research and development and administration expense. The Company believes that the inclusion of this no-IFRS measure financial measure provides investors with an alternative presentation useful to investors' understanding of the Company's core operating results and trends.
SOURCE: LED Medical Diagnostics Inc.