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NewCardio Announces Financial Results for Its 2010 Third Quarter
Nov 15, 2010 (03:11 PM EST)


Company Reports Continued Commercialization Progress

SANTA CLARA, Calif., Nov. 15, 2010 /PRNewswire-FirstCall/ -- NewCardio, Inc., (OTC Bulletin Board: NWCI) a cardiac diagnostic technology provider, today announced financial results for the third quarter and nine months ended September 30, 2010. More details on the financial results are available in the SEC Form 10-Q, filed today with the Securities and Exchange Commission.

"We continue to make progress in the commercialization of our initial solution, QTinno™, and in securing the strategic funding which will accelerate the development and commercialization of our 3-D platform technology solutions, including CardioBip™, the emerging opportunity in telemedicine with remote patient monitoring – and my3KG™ - whose first deployment is expected to be in the emergency room," commented Vincent Renz, NewCardio's President and CEO. "We are gaining visibility to  a growing number of  Phase 1 QT studies, from both current and prospective customers, and we remain optimistic regarding acceleration of revenues due to pent-up demand for these studies as the economy, and with it, the market, improve. Our initiative to identify a strategic funding partner also continues to move forward, and I am encouraged by the progress to date and continue to believe we are on the right path towards securing strategic funding to support our development and commercialization activities."

Highlights

  • Pharma Lynx, a global contract research organization and a subsidiary of Diverse Lynx, has signed an MSA to license NewCardio's QTinno solution for use in Phase 1 studies. To date, the Company has 7 MSAs, including three of the top five Contract Research Organizations (CROs) in the world, and QTinno has been selected by two pharmaceutical companies as the preferred solution for automated QT studies.
  • The Company bolstered its position with industry leaders and regulators, with management presenting data, speaking at or chairing events at a variety of conferences, including the Cambridge Healthtech Institute (CHI) inaugural conference entitled "Mitigating Safety Risks in Early Clinical Development," and the Diabetic Drug Safety Conference meeting entitled "Development of Type 2 Diabetes Mellitus Drugs: State-of-the-Art Cardiovascular Safety Assessments." In addition, a clinical study of the my3KG titled "Vectorcardiographic and Electrocardiographic Criteria to Distinguish New and Old Left Bundle Branch Block," has been published in the August 2010 issue of the peer-reviewed journal, Heart Rhythm, the official journal of the Heart Rhythm Society.

Financial Results

NewCardio generated revenue, derived from professional services associated with the deployment of QTinno for use in the cardiac safety component of a drug development study, as well as initial per ECG revenues from the first two studies, totaling $99,210 with no corresponding revenue in the prior year quarter. Net cash used in operating activities was $852,000 in the current quarter, which is a decrease of 43% compared to $1.5 million in both the third quarter last year and the immediately prior quarter of this year, as the Company implemented an initiative to reduce its cash usage by 30-35%. For the quarter, the Company reported a net loss attributable to common shareholders of $2.5 million, or $(0.08) per fully diluted share, compared to a net loss attributable to common shareholders of $3.4 million, or $(0.14) per fully diluted share, in the third quarter last year. The net loss per share was based on 29.5 million and 23.9 million weighted average shares outstanding, respectively.

For the nine months ending September 30, 2010, the Company reported revenue of $169,328, compared to no revenue in the prior year. For the nine months ending September 30, 2010, the Company's net loss attributable to common shareholders was $8.3 million, or $(0.29) per share, compared to a net loss attributable to common shareholders of $8.3 million, or $(0.35) per share last year.

Conference Call

NewCardio management will conduct a conference call to provide a corporate update and discuss progress at 1:30 p.m. PT/ 4:30 p.m. ET, Monday, November 15, 2010. Interested parties should dial 1-888-846-5003 (domestic) or 1-480-629-9856 (International) five to 10 minutes before the call.  Investors will also have the opportunity to listen to the conference call and the replay on the News and Events section of the NewCardio website at http://www.newcardio.com.  A replay of the call will be available by dialing 1-877-870-5176 (domestic) or 1-858-384-5517 (international) and referencing passcode 4381453.

About NewCardio, Inc.

NewCardio is a cardiac diagnostic and services company developing and marketing proprietary software platform technologies to provide higher accuracy to, and increase the value of, the standard 12-lead ECG.  NewCardio's 3D ECG software platform reduces the time and expense involved in assessing cardiac status while increasing the ability to diagnose clinically significant conditions which were previously difficult to detect.  NewCardio's software products and services significantly improve the diagnosis and monitoring of cardiovascular disease, as well as cardiac safety assessment of drugs under development. For more information, visit www.newcardio.com.

Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based on currently available information and assumptions made by management. Although we believe that the assumptions on which the forward-looking statements contained herein are based are reasonable, any of those assumptions could prove to be inaccurate given the inherent uncertainties as to the occurrence or nonoccurrence of future events. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including the potential risks and uncertainties set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2009 and relate to our business plan, our business strategy, development of our proprietary technology platform and our products, timing of such development, timing and results of clinical trials, level and timing of FDA regulatory clearance or review, market acceptance of our products, protection of our intellectual property, implementation of our strategic, operating and people initiatives, benefits to be derived from personnel and directors, ability to commercialize our products, our assumptions regarding cash flow from operations and cash on-hand, the amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations and infrastructure, implementation of marketing programs, our key agreements and strategic alliances, our ability to obtain additional capital as, and when, needed, and on acceptable terms and general economic conditions specific to our industry, any of which could impact sales, costs and expenses and/or planned strategies and timing. We assume no obligation to, and do not currently intend to, update these forward-looking statements.

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Investor Contact:

Hayden IR

Jeff Stanlis, Partner

(602) 476-1821

jeff@haydenir.com



Tables follow

NEWCARDIO, INC

(a development stage company)

CONDENSED CONSOLIDATED BALANCE SHEETS










September 30,

December 31,



2010

2009



(unaudited)



ASSETS




Current assets:




Cash

$    1,005,320

$         1,386,007


Short term investment

-

25,010


Accounts receivable, trade

86,053

-


Prepaid expenses

97,484

111,871


Prepaid commitment fees

2,451,754

556,875


 Total current assets

3,640,611

2,079,763






Property, plant and equipment, net of accumulated depreciation of $138,231 and $79,041 as of September 30, 2010 and  December 31, 2009, respectively

173,315

198,955






Other assets:




Patent costs, net

15,986

-


Deposits

22,600

22,600







$    3,852,512

$         2,301,318






LIABILITIES AND STOCKHOLDERS' DEFICIT




Current liabilities:




Accounts payable and accrued expenses

$       482,297

$            480,152


Unearned revenue

1,500

-


Line of credit

3,000,000

-


Put liability

-

744,280


 Total current liabilities

3,483,797

1,224,432






Warrant liability

1,683,102

1,078,292


Reset derivative

-

687,958


 Total liabilities

5,166,899

2,990,682






Preferred shares subject to liability conversion

-

784,010






Stockholders' deficit:




Preferred stock, $0.001 par value; 1,000,000 shares authorized:




Preferred stock Series B, $0.001 par value; 18,000 shares designated; 12,250 and 16,435 shares issued and outstanding as of  September 30, 2010 and December 31, 2009, respectively

12

16


Preferred stock Series C, $0.001 par value; 7,000 shares designated; 2,920 and -0- shares issued and outstanding as of September 30, 2010 and December 31, 2009, respectively

3

-


Preferred stock Series D, $0.001 par value; 1,000 shares designated; no shares issued and outstanding as of September 30, 2010 and December 31, 2009

-

-


Common stock, $0.001 par value, 500,000,000 and 99,000,000 shares authorized as of September 30, 2010 and December 31, 2009, respectively; 29,871,857 and 24,290,279 shares issued and outstanding as of September 30, 2010 and December 31, 2009, respectively

29,872

24,290


Stock subscription

500,000

-


Additional paid in capital

37,371,015

29,432,680


Deficit accumulated during development stage

(39,215,289)

(30,930,360)


 Total stockholders' deficit

(1,314,387)

(1,473,374)







$    3,852,512

$         2,301,318








NEWCARDIO, INC

(a development stage company)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS






From September 7, 2004



Three months ended
September 30,

Nine months ended
September 30,

(date of inception) through



2010

2009

2010

2009

September 30, 2010


Revenue

$99,210

$ -

$169,328

$            -

$                        169,328


Cost of sales

37,937

-

84,468

-

84,468


Gross (loss) profit

61,273

-

84,860

-

84,860









Operating expenses:







Selling, general and administrative

1,185,170

1,538,141

4,732,292

4,821,003

16,296,612


Depreciation

20,446

17,941

59,191

41,249

138,232


Research and development

748,401

796,168

2,674,089

2,338,589

9,007,193


Total operating expenses

1,954,017

2,352,250

7,465,572

7,200,841

25,442,037









Net loss from operations

(1,892,744)

(2,352,250)

(7,380,712)

(7,200,841)

(25,357,177)









Other income (expense)







Gain (loss) on change in fair value of warrant liability and reset derivative

97,473

(748,941)

711,706

(748,941)

(3,393,303)


Amortization of commitment fees

(626,352)

(170,156)

(1,407,795)

(170,156)

(1,577,951)


Other financing costs

(1,655)

(10,000)

(86,655)

(133,345)

(5,034,951)


Interest, net

(80,360)

1,051

(121,473)

23,984

(1,034,197)









Net loss before income taxes

(2,503,638)

(3,280,296)

(8,284,929)

(8,229,299)

(36,397,579)









Provision for income taxes

-

-

-

-

-









Net loss

(2,503,638)

(3,280,296)

(8,284,929)

(8,229,299)

(36,397,579)









Preferred stock dividend

-

(109,986)

-

(109,986)

(4,356,048)









NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

$(2,503,638)

$(3,390,282)

$ (8,284,929)

$(8,339,285)

$                  (40,753,627)









Net (loss) income per share-basic and fully diluted

$ (0.08)

$ (0.14)

$(0.29)

$        (0.35)










Weighted average number of shares-basic and fully diluted

29,520,144

23,882,507

28,126,775

23,607,055


























SOURCE NewCardio, Inc.