Chembio Diagnostics, Inc. (“Chembio” or the “Company”) (Nasdaq:
CEMI), a leading point-of-care diagnostics company focused on
infectious diseases, today reported financial results for the
quarter ended September 30, 2021.
Recent Highlights
- Achieved third quarter 2021 total revenue of $12.1 million and
product revenue of $9.4 million, representing growth of 17% and
12%, respectively, compared to the prior year period. After
reflecting the deferred recognition to the third quarter of
2020 of revenue associated with shipments from the second quarter
of 2020, total revenues in the third quarter of 2021 increased by
$4.5 million, or 59.2%, compared to the prior year period.
- Awarded substantial purchase orders in July 2021 from
Bio-Manguinhos for DPP SARS-COV-2 Antigen tests and the Partnership
for Supply Chain Management, supported by The Global Fund, for
STAT-PAK 1/2 HIV tests.
- Launched US commercial distribution of a third-party COVID-19
Antigen Assay.
- Raised $38.8 million in net proceeds from at-the-market
offerings of common stock launched in July.
“Product revenue growth is being driven by the
largest purchase order in company history, received from
Bio-Manguinhos in Brazil in July, for our DPP SARS-CoV-2 Antigen
tests,” said Richard Eberly, Chembio’s President and Chief
Executive Officer. “Operationally we continue to take steps to
address the tight labor market and global supply chain issues for
certain test components to ramp production. We are increasing our
production and are delighted that our strong revenue growth was
achieved in the face of these challenges. Notwithstanding the
team’s hard work to increase capacity over the past few months, we
currently anticipate that at least $11.5 million of the purchase
order from Bio-Manguinhos will not be fulfilled by December 31,
2021, the end of the existing shipment schedule under the order. We
continue to discuss with Bio-Manguinhos the possibility of
fulfilling a portion of the order in early 2022, and in addition,
are doing everything we can to minimize the impact of the
continuing market challenges on all of our customers.”
Mr. Eberly continued, “We continue to make
progress on our other commercial and regulatory initiatives. In the
United States, our commercial team is gaining traction with
customers interested in the third-party COVID-19 tests we are
distributing. Also, we are hopeful for a straightforward review of
the EUA submission for our DPP Respiratory Antigen Panel.”
Third Quarter 2021 Financial
ResultsTotal revenue for the third quarter of 2021 was
$12.1 million, an increase of 17.4% compared to the prior year
period. Net product sales for the third quarter of 2021 were $9.4
million, an increase of 11.5% compared to the prior year period,
including $5.4 million and $1.2 million of product revenue under
the purchase orders received from Bio-Manguinhos and the
Partnership for Supply Chain Management, respectively. After
reflecting the deferred recognition to the third quarter of 2020 of
revenue associated with shipments from the second quarter of 2020,
net product sales during the third quarter of 2021 increased by
$4.5 million, or 59.2%, compared to the prior year period.
Government grant, license and royalty, and R&D revenue for the
third quarter of 2021 totaled $2.7 million, an increase of 44.0%
compared to the prior year period.
Gross product margin for the third quarter of
2021 was $1.5 million, compared to $0.9 million for the prior year
period. Gross product margin percentage for the third quarter of
2021 was 15.7%, compared to 11.2% for the prior year period. Gross
product margin in the third quarter of 2021 was favorably impacted
from higher product margins due to higher average selling prices
and higher product sales volume. Gross product margin in the prior
year period was impacted by several factors, including the
revocation by the U.S. Food and Drug Administration (the “FDA”) of
the emergency uses authorization (“EUA”) for DPP COVID-19 IgM/IgG
Systems in June 2020, which precluded planned sales of COVID-19
IgM/IgG Systems to customers in the United States as well as
operational inefficiencies it triggered, offset by the recognition
of $2.7 million net revenue from product shipments outside the
United States that had been deferred from the second quarter of
2020.
Research and development expenses increased by
$1.1 million, or 46.3%, in the third quarter of 2021 compared to
the prior year period. The increase in research and development
costs was primarily associated with clinical and regulatory affairs
costs related to pursuing an EUA and 510(k) from the FDA for the
DPP SARS-CoV-2 Antigen test system and an EUA for the DPP
Respiratory Panel, each pursuant to awards from the Biomedical
Advanced Research and Development Authority (part of the U.S.
Department of Health and Human Services’ Office of the Assistant
Secretary for Preparedness and Response) (“BARDA”). Selling,
general and administrative expenses increased by $0.6 million, or
11.2%, in the third quarter of 2021 compared to the prior year
period, primarily due to increased costs associated with
compensation costs related to Chembio’s expanded U.S. commercial
team; commissions; and insurance; offset by a decrease in legal
fees.
During the third quarter of 2021, Chembio
recognized $0.4 million of restructuring costs related to
professional fees.
Net loss for the third quarter of 2021 was $6.4
million, or $0.24 per diluted share, compared to a net loss of $5.4
million, or $0.28 per diluted share, for the prior year
period. The net losses reflected asset impairment,
restructuring, severance, and related costs of $0.4 million, or
$0.01 per share, for the third quarter of 2021, compared to $0
million, or $0 per diluted share, for the prior year period.
Cash and cash equivalents as of September 30,
2021 totaled $36.0 million. During the three months ended September
30, 2021, Chembio issued and sold in at-the-market offerings a
total of 9,709,328 shares of common stock at a volume-weighted
average price of $4.2011 per share for gross proceeds of $40.8
million and net proceeds, after giving effect to placement fees and
other transaction costs, of $38.8 million.
Going Concern
ConsiderationsRevenues during the three months ended
September 30, 2021 did not meet the Company’s expectations. The
Company’s increase in cash and cash equivalents over the first nine
months of 2021 reflected its issuance of common stock in
at-the-market offerings for net proceeds of $38.8 million. The
Company continued to experience market, clinical trial and
regulatory complications in seeking to develop and commercialize a
portfolio of COVID-19 test systems during the continuing, but
evolving, uncertainty of the COVID‑19 pandemic. In the three months
ended September 30, 2021, the Company continued to incur
significant expenses in connection with pending legal matters,
delayed achievement of milestones associated with government grant
income, investments in inventory, and the continuing automation of
manufacturing.
The Company performed an assessment to determine
whether there were conditions or events that, considered in the
aggregate, raised substantial doubt about the Company’s ability to
continue as a going concern within one year after the date on which
its unaudited condensed consolidated financial statements will be
issued (the “Issuance Date”). Initially, this assessment did not
consider the potential mitigating effect of management’s plans that
had not been fully implemented. Because, as described below,
substantial doubt was determined to exist as the result of this
initial assessment, management then assessed the mitigating effect
of its plans to determine if it is probable that the plans (1)
would be effectively implemented within one year after the Issuance
Date and (2) when implemented, would mitigate the relevant
conditions or events that raise substantial doubt about the
entity’s ability to continue as a going concern.
During the three months ended September 30,
2021, the Company undertook measures to increase its total revenues
and improve its liquidity position. The Company received
significant purchase orders from two customers (the “July Purchase
Orders”). The Company had pursued the July Purchase Orders for an
extended period of time. The July Purchase Orders consist of the
following:
- On July 20, 2021, the Company received a $28.3 million purchase
order from Bio-Manguinhos for the purchase of DPP SARS-CoV-2
Antigen tests for delivery during 2021 to support the urgent needs
of Brazil’s Ministry of Health in addressing the COVID-19
pandemic.
- On July 22, 2021, the Company received a $4 million purchase
order from the Partnership for Supply Chain Management, supported
by The Global Fund, for the purchase of HIV 1/2 STAT-PAK Assays for
shipment to Ethiopia into early 2022.
These measures and other plans and initiatives
have been designed to provide the Company with adequate liquidity
to meet its obligations for at least the twelve-month period
following the Issuance Date. The Company’s execution of those
measures and its other plans and initiatives continue to depend,
however, on factors that are beyond the Company’s control, or that
may not be addressable on terms acceptable to the Company or at
all. The Company considered in particular how:
- Limitations of the Company’s staffing, supply chain and
liquidity have impaired, and are expected to continue to impair,
the Company’s ability to fulfill at least $11.5 million of the July
Purchase Order from Bio-Manguinhos by December 31, 2021, the end of
the existing shipment schedule under the order.
- Earlier delays in clinical trials, which reflected the impact
of the COVID-19 vaccination rollout and the related decline in
positivity rates at clinical trials on the Company’s clinical plan
enrollment levels, and continuing requirements of achievement of
regulatory approvals may limit the Company’s ability to achieve a
portion of the revenue- and cash- generating milestones under a
$12.7 million award granted pursuant to the Company’s contract
dated December 2, 2020 with the BARDA, which contract will, unless
extended by BARDA, expire on December 2, 2021.
- The ongoing healthcare and economic impacts of the COVID-19
pandemic on the global customer base for the Company’s non‑COVID-19
products continue to negatively affect the timing and rate of
recovery of the Company’s revenues from those products by, for
example, decreasing the allocation of funding for HIV testing,
thereby continuing to adversely affect the Company’s
liquidity.
- Although the Company has entered into agreements to distribute
third-party COVID-19 products in the United States, its ability to
sell those products could be constrained because of staffing and
supply chain limitations affecting the suppliers of those
products.
The Company further considered how these factors
and uncertainties could impact its ability over the next year to
meet the obligations specified in the Company’s existing credit
agreement. Those obligations include a covenant requiring minimum
total revenue amounts for the twelve months preceding each quarter
end. For the next year, the minimum total revenue requirements
range from $40.3 million for the twelve months ending December 31,
2021 to $ 45.6 million for the twelve months ending September 30,
2022. Upon an event of default under the credit agreement, the
lender could elect to declare all amounts outstanding thereunder,
together with accrued interest, to be immediately due and payable.
In such an event, there can be no assurance that the Company would
have sufficient liquidity to fund payment of the amounts that would
be due under the credit agreement or that, if such liquidity were
not available, the Company would be successful in raising
additional capital on acceptable terms, or at all, or in completing
any other endeavor to continue to be financially viable and
continue as a going concern. The Company’s inability to raise
additional capital on acceptable terms in the near future, whether
for purposes of funding payments required under the credit
agreement or providing additional liquidity needed for its
operations, could have a material adverse effect on its business,
prospects, results of operations, liquidity and financial
condition.
Accordingly, management determined the Company
could not be certain that its plans and initiatives would be
effectively implemented within one year after the Issuance Date.
Without giving effect to the prospect of raising additional capital
in at-the-market offerings, increasing product revenue in the near
future or executing other mitigating plans, many of which are
beyond the Company’s control, it is unlikely that the Company will
be able to generate sufficient cash flows to meet its required
financial obligations, including its rent, debt service and other
obligations due to third parties. The existence of these conditions
raises substantial doubt about the Company’s ability to continue as
a going concern for the twelve-month period following the Issuance
Date.
The Company’s third quarter financial statements
are being prepared assuming the Company will continue as a going
concern, which contemplates continuity of operations, realization
of assets and the satisfaction of liabilities in the normal course
of business for the twelve-month period following the Issuance
Date.
Conference CallChembio will
host a conference call today beginning at 4:30 pm ET to discuss its
financial results and recent business highlights. Investors
interested in listening to the call may do so by dialing
888-506-0062 from the United States or 973-528-0011 from outside
the United States and providing entry code 938540. To listen to a
live webcast of the call, please visit the Investor Relations
section of Chembio's website at www.chembio.com. Following the
call, a replay will be available on the Investor Relations section
of Chembio’s website. A telephone replay will be available until
4:30 pm ET on November 18, 2021 by dialing 877-481-4010 from the
United States or 919-882-2331 from outside the United States and
using passcode 43155.
About Chembio
DiagnosticsChembio is a leading diagnostics company
focused on developing and commercializing point-of-care tests used
for the rapid detection and diagnosis of infectious diseases,
including sexually transmitted disease, insect vector and tropical
disease, COVID-19 and other viral and bacterial infections,
enabling expedited treatment. Coupled with Chembio’s extensive
scientific expertise, its novel DPP technology offers broad market
applications beyond infectious disease. Chembio’s products are sold
globally, directly and through distributors, to hospitals and
clinics, physician offices, clinical laboratories, public health
organizations, government agencies, and consumers. Learn more at
www.chembio.com.
Forward-Looking
StatementsCertain statements contained in the two
paragraphs following the bulleted items under “Recent Highlights”
above are not historical facts and may be forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include statements
regarding the intent, belief or current expectations with respect
to the distribution and sale of Chembio’s diagnostic tests, the
availability, timing, functionality and regulatory approval of
Chembio’s COVID-19 diagnostic tests, and Chembio’s ability to
maintain sufficient liquidity to fund its operation, including its
sales of tests pursuant to the July Purchase Orders. Such
statements, which are expectations only, reflect management's
current views, are based on certain assumptions, and involve risks
and uncertainties. Actual results, events or performance may differ
materially from forward-looking statements due to a number of
important factors, and will be dependent upon a variety of factors,
including, but not limited to, the following, any of which could be
exacerbated even further by the continuing COVID-19 outbreak in the
United States and globally: the ability of Chembio to generate
revenue from the July Purchase Orders or other product orders, and
the margins it can realize from that revenue, will depend on the
availability and cost of human, material and other resources
required to build and deliver the tests, which factors are largely
outside Chembio’s control; the ability of Chembio to maintain
existing, and timely obtain additional, regulatory approvals,
particularly for its proposed COVID-19 diagnostic tests, which
approvals are subject to processes that can change recurringly
without notice; Chembio’s dependence upon, and limited experience
with, COVID-19 diagnostic tests; the highly competitive and rapidly
developing market for testing solutions for COVID-19, which
includes a number of competing companies with strong relationships
with current and potential customers, including governmental
authorities, and with significantly greater financial and other
resources that are available to Chembio; and the risks of doing
business with foreign governmental entities, including
geopolitical, international and other challenges as well as
potential material adverse effects of tariffs and other changes in
U.S. trade policy. Chembio undertakes no obligation to publicly
update forward-looking statements in this release to reflect events
or circumstances that occur after the date hereof or to reflect any
change in Chembio's expectations with regard to the forward-looking
statements or the occurrence of unanticipated events. Factors that
may impact Chembio's success are more fully disclosed in Chembio's
periodic public filings with the U.S. Securities and Exchange
Commission, including its Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2021, its Current Report on Form
8-K filed with the Securities and Exchange Commisson on July 19,
2021, and its Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2021, particularly under the heading “Risk
Factors.”
DPP is Chembio’s registered trademark, and the
Chembio logo is Chembio’s trademark. For convenience, these
trademarks appear in this release without ® or ™ symbols, but that
practice does not mean that Chembio will not assert, to the fullest
extent under applicable law, its rights to the trademarks. All
other trademarks appearing in this release are the property of
their respective owners.
Investor Relations
ContactPhilip TaylorGilmartin Group(415)
937-5406investor@chembio.com
CHEMBIO DIAGNOSTICS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended
(Unaudited) |
|
For the nine months ended
(Unaudited) |
|
September 30, 2021 |
|
September 30, 2020 |
|
September 30, 2021 |
|
September 30, 2020 |
REVENUES: |
|
|
|
|
|
|
|
Product revenue |
$ |
9,371,160 |
|
|
$ |
8,406,457 |
|
|
$ |
17,327,204 |
|
|
$ |
17,914,623 |
|
R&D
revenue |
|
441 |
|
|
|
1,444,724 |
|
|
|
1,107,808 |
|
|
|
3,546,385 |
|
Government grant income |
|
2,400,000 |
|
|
|
209,776 |
|
|
|
8,030,000 |
|
|
|
209,776 |
|
License and royalty
revenue |
|
286,843 |
|
|
|
211,521 |
|
|
|
779,901 |
|
|
|
572,450 |
|
TOTAL
REVENUES |
|
12,058,444 |
|
|
|
10,272,478 |
|
|
|
27,244,913 |
|
|
|
22,243,234 |
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
Cost of product revenue |
|
7,902,819 |
|
|
|
7,467,746 |
|
|
|
15,490,956 |
|
|
|
17,512,925 |
|
Research and development
expenses |
|
3,442,044 |
|
|
|
2,351,880 |
|
|
|
9,102,363 |
|
|
|
6,233,040 |
|
Selling, general and
administrative expenses |
|
5,947,327 |
|
|
|
5,348,958 |
|
|
|
18,033,748 |
|
|
|
13,903,192 |
|
Asset impairment, severance,
restructuring and related costs |
|
396,740 |
|
|
|
11,651 |
|
|
|
2,440,983 |
|
|
|
1,122,310 |
|
Acquisition costs |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
63,497 |
|
|
|
17,688,930 |
|
|
|
15,180,235 |
|
|
|
45,068,050 |
|
|
|
38,834,964 |
|
LOSS FROM
OPERATIONS |
|
(5,630,486 |
) |
|
|
(4,907,757 |
) |
|
|
(17,823,137 |
) |
|
|
(16,591,730 |
) |
|
|
|
|
|
|
|
|
OTHER
EXPENSE: |
|
|
|
|
|
|
|
Interest expense, net |
|
(735,336 |
) |
|
|
(735,819 |
) |
|
|
(2,175,188 |
) |
|
|
(2,110,011 |
) |
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME
TAXES |
|
(6,365,822 |
) |
|
|
(5,643,576 |
) |
|
|
(19,998,325 |
) |
|
|
(18,701,741 |
) |
|
|
|
|
|
|
|
|
Income tax (provision)
benefit |
|
(28 |
) |
|
|
104,778 |
|
|
|
67,928 |
|
|
|
319,597 |
|
|
|
|
|
|
|
|
|
NET LOSS |
$ |
(6,365,850 |
) |
|
$ |
(5,538,798 |
) |
|
$ |
(19,930,397 |
) |
|
$ |
(18,382,144 |
) |
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
$ |
(0.24 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.89 |
) |
|
$ |
(0.98 |
) |
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding, basic and diluted |
|
26,701,546 |
|
|
|
20,104,547 |
|
|
|
22,361,899 |
|
|
|
18,728,372 |
|
CHEMBIO DIAGNOSTICS, INC. AND SUBSIDIARIES |
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
AS OF |
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
September 30, 2021 |
|
December 31, 2020 |
|
|
|
|
|
|
|
- ASSETS - |
|
|
|
|
|
CURRENT
ASSETS: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
36,004,000 |
|
|
$ |
23,066,301 |
|
|
Accounts receivable, net of
allowance for doubtful accounts of $193,535 and $296,793 as of
September 30, 2021 and December 31, 2020, respectively |
|
|
6,782,798 |
|
|
|
3,377,387 |
|
|
Inventories, net |
|
|
16,805,669 |
|
|
|
12,516,402 |
|
|
Prepaid expenses and other
current assets |
|
|
1,191,678 |
|
|
|
778,683 |
|
|
TOTAL CURRENT
ASSETS |
|
|
60,784,145 |
|
|
|
39,738,773 |
|
|
|
|
|
|
|
|
FIXED
ASSETS: |
|
|
|
|
|
Property, Plant and Equipment,
net |
|
|
8,744,713 |
|
|
|
8,688,403 |
|
|
Finance lease right-of-use
asset, net |
|
|
208,908 |
|
|
|
233,134 |
|
|
TOTAL FIXED ASSETS,
net |
|
|
8,953,621 |
|
|
|
8,921,537 |
|
|
|
|
|
|
|
|
OTHER
ASSETS: |
|
|
|
|
|
Operating lease right-of-use
assets, net |
|
|
6,085,655 |
|
|
|
6,112,632 |
|
|
Intangible assets, net |
|
|
2,178,186 |
|
|
|
3,645,986 |
|
|
Goodwill |
|
|
5,674,132 |
|
|
|
5,963,744 |
|
|
Deposits and other assets |
|
|
367,396 |
|
|
|
509,342 |
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
$ |
84,043,135 |
|
|
$ |
64,892,014 |
|
|
|
|
|
|
|
|
- LIABILITIES AND STOCKHOLDERS’ EQUITY - |
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
Accounts payable and accrued
liabilities |
|
$ |
10,182,488 |
|
|
$ |
10,042,790 |
|
|
Deferred revenue |
|
|
20,195 |
|
|
|
1,606,997 |
|
|
Operating lease
liabilities |
|
|
856,917 |
|
|
|
642,460 |
|
|
Finance lease liabilities |
|
|
66,790 |
|
|
|
58,877 |
|
|
Current portion of long-term
debt |
|
|
300,000 |
|
|
|
- |
|
|
TOTAL CURRENT
LIABILITIES |
|
|
11,426,390 |
|
|
|
12,351,124 |
|
|
|
|
|
|
|
|
OTHER
LIABILITIES: |
|
|
|
|
|
Long-term operating lease
liabilities |
|
|
6,207,698 |
|
|
|
6,327,143 |
|
|
Long-term finance lease
liabilities |
|
|
157,251 |
|
|
|
185,239 |
|
|
Long-term debt, net |
|
|
18,333,267 |
|
|
|
18,182,158 |
|
|
Deferred tax liability |
|
|
- |
|
|
|
69,941 |
|
|
TOTAL
LIABILITIES |
|
|
36,124,606 |
|
|
|
37,115,605 |
|
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY: |
|
|
|
|
|
Preferred stock – 10,000,000
shares authorized, none issued or outstanding |
|
|
- |
|
|
|
- |
|
|
Common stock - $0.01 par
value; 100,000,000 shares authorized; 30,086,283 shares and
20,223,498 shares issued at September 30, 2021 and December 31,
2020, respectively |
|
|
300,863 |
|
|
|
202,235 |
|
|
Additional paid-in
capital |
|
|
165,442,942 |
|
|
|
124,961,514 |
|
|
Accumulated deficit |
|
|
(117,036,729 |
) |
|
|
(97,106,331 |
) |
|
Treasury stock 41,141 shares
at cost as of September 30, 2021 and December 31, 2020,
respectively |
|
|
(190,093 |
) |
|
|
(190,093 |
) |
|
Accumulated other
comprehensive loss |
|
|
(598,454 |
) |
|
|
(90,916 |
) |
|
TOTAL STOCKHOLDERS’
EQUITY |
|
|
47,918,529 |
|
|
|
27,776,409 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
$ |
84,043,135 |
|
|
$ |
64,892,014 |
|
|
CHEMBIO DIAGNOSTICS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWSFOR THE NINE MONTHS
ENDED(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
September 30, |
|
|
|
2021 |
|
2020 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
Cash received from customers and grants |
|
$ |
22,355,958 |
|
|
$ |
26,122,815 |
|
|
Cash paid to suppliers and employees |
|
|
(43,732,182 |
) |
|
|
(37,776,303 |
) |
|
Cash paid for operating leases |
|
|
(1,049,198 |
) |
|
|
(797,482 |
) |
|
Cash paid for finance leases |
|
|
(15,358 |
) |
|
|
(14,762 |
) |
|
Interest and taxes, net |
|
|
(1,709,704 |
) |
|
|
(1,681,155 |
) |
|
Net cash used in
operating activities |
|
|
(24,150,484 |
) |
|
|
(14,146,887 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
Acquisition of and deposits on fixed assets |
|
|
(1,387,601 |
) |
|
|
(3,000,763 |
) |
|
Patent Application Costs |
|
|
(32,648 |
) |
|
|
(181,417 |
) |
|
Net cash used in
investing activities |
|
|
(1,420,249 |
) |
|
|
(3,182,180 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
Issuance of stock, net |
|
|
38,811,960 |
|
|
|
28,463,741 |
|
|
Stimulus package loan |
|
|
- |
|
|
|
2,978,315 |
|
|
Payment of stimulus package loan |
|
|
- |
|
|
|
(2,978,315 |
) |
|
Payments on note payable |
|
|
- |
|
|
|
(180,249 |
) |
|
Payments of tax withholdings on stock award |
|
|
(119,513 |
) |
|
|
(348,944 |
) |
|
Payments on finance lease |
|
|
(45,680 |
) |
|
|
(37,166 |
) |
|
Net cash provided by
financing activities |
|
|
38,646,767 |
|
|
|
27,897,382 |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
(138,335 |
) |
|
|
(125,214 |
) |
|
DECREASE IN CASH AND
CASH EQUIVALENTS |
|
|
12,937,699 |
|
|
|
10,443,101 |
|
|
Cash and cash equivalents - beginning of the period |
|
|
23,066,301 |
|
|
|
18,271,352 |
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents - end of the period |
|
$ |
36,004,000 |
|
|
$ |
28,714,453 |
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET
LOSS TO NET CASH USED IN OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(19,930,397 |
) |
|
$ |
(18,382,144 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
2,186,684 |
|
|
|
2,057,275 |
|
|
Share based compensation |
|
|
1,802,056 |
|
|
|
824,345 |
|
|
Non-cash inventory changes |
|
|
926,499 |
|
|
|
2,530,444 |
|
|
Benefit from deferred tax liability |
|
|
(69,941 |
) |
|
|
(301,000 |
) |
|
Impairment of long-lived assets |
|
|
1,273,945 |
|
|
|
- |
|
|
Provision (recovery) for doubtful accounts |
|
|
(103,258 |
) |
|
|
214,210 |
|
|
Changes in assets and
liabilities, net of effects from acquisitions: |
|
|
|
|
|
|
|
Accounts receivable |
|
|
(3,302,153 |
) |
|
|
138,827 |
|
|
Inventories |
|
|
(5,215,766 |
) |
|
|
(5,295,899 |
) |
|
Prepaid expenses and other current assets |
|
|
(412,995 |
) |
|
|
(314,460 |
) |
|
Deposits and other assets |
|
|
141,946 |
|
|
|
80,873 |
|
|
Accounts payable and accrued liabilities |
|
|
139,698 |
|
|
|
559,888 |
|
|
Deferred revenue |
|
|
(1,586,802 |
) |
|
|
3,740,754 |
|
|
Net cash used in
operating activities |
|
$ |
(24,150,484 |
) |
|
$ |
(14,146,887 |
) |
|
|
|
|
|
|
|
|
|
Supplemental
disclosures for non-cash investing and financing
activities: |
|
|
|
|
|
|
|
Deposits on manufacturing equipment transferred to fixed
assets |
|
$ |
- |
|
|
$ |
472,651 |
|
|
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