Jun. 29, 2011 (Canada NewsWire Group) --
HALIFAX, June 29, 2011 /CNW/ - MedMira Inc., ("MedMira") (TSX Venture: MIR, NASDAQ: MMIRF), a developer and marketer of rapid diagnostic technology and solutions, today announced its financial results for the three and nine month periods ending April 30, 2011.
"The third quarter saw MedMira receive its first significant order from Triplex for the China market. This order, demonstrating MedMira's revitalization in the reformed China market, is in production and slated for delivery to customers in the coming weeks," said Hermes Chan, CEO, MedMira Inc. "We are confident that this is just the beginning of significant sales activity in China. In other markets our business development team and strategic partners continue to pursue many sales and marketing initiatives."
Financial Results
Product sales in the second quarter were $296 thousand, compared to $163 thousand in the same quarter last year. Total sales for the nine months ending, April 30, 2011 were $661 thousand compared to $1,043 thousand for the same period last year. The net loss for the quarter was $881 thousand ($1,006 thousand - 2010); total loss for the nine months ending, April 30, 2011 was $3,297 thousand ($0.015 per share) compared to $3,036 thousand ($0.017 per share), in the same period last year. Overall gross margin for the quarter was 50% (40% - 2010) and 49%, for the nine months ending April 30, 2011 (59% - 2010).
Restatement of Results for the Quarter Ended April 30, 2010
As previously disclosed in MedMira's Management's Discussion and Analysis for the year ended July 31, 2010 and the quarter ended January 31, 2011, in connection with MedMira's audit for the year ended July 31, 2010, MedMira identified the premature recognition of revenue from one sales contract in the quarter ended April 30, 2010. This revenue, in the amount of $437,787, was recognized upon passing of title to inventory to MedMira's distribution partner, when under a proper application of Canadian Generally Accepted Accounting Principles, recognition of this revenue should have been deferred until the associated products were sold to an end user. The reversal of this revenue recognition, and its effect on other line items in MedMira's financial statements, were disclosed in MedMira's audited financial statements and related MD&A for the year ended July 31, 2010, and is reflected in the comparative figures used above. The reversal was an accounting correction that did not have an impact on MedMira's cash position, and the related sales contract remains in effect.
MedMira has been in consultation with the Nova Scotia Securities Commission in relation to the incorrect recognition of revenue. As a result, MedMira is providing this information in the interest of ensuring that its shareholders, both current and potential, are provided with full and accurate disclosure.
The incorrect recognition of revenue occurred in quarterly financial statements that were prepared and filed at a time when MedMira did not have a Chief Financial Officer. In addition, as permitted for venture issuers like MedMira, those financial statements were not reviewed by MedMira's external auditors. The error was recognized by MedMira's newly appointed Chief Financial Officer during the review of prior periods in connection with the preparation and audit of MedMira's financial statements for the year ended July 31, 2010, and confirmed after consultation with MedMira's external auditors.
MedMira wishes to advise its shareholders that it has taken a number of steps intended to avoid a recurrence of this sort of accounting error, including hiring a full time controller whose responsibilities include compliance with financial reporting and disclosure requirements. MedMira has also adopted policies and implemented processes intended to improve the quality of its financial reporting and other disclosures, including increased involvement of its external legal and accounting advisors.
Prior to the discovery of the premature revenue recognition, MedMira had already taken steps to strengthen its senior management, including filling the Chief Financial Officer position and appointing a Chief Operating Officer. MedMira's Chief Executive Officer has also completed formal training in Canadian securities law and practice.
MedMira will continue to review its staffing and internal financial and disclosure controls to identify areas for future improvement.
About MedMira
MedMira is a leading developer and manufacturer of flow-through rapid diagnostics and technologies. The Company's tests provide hospitals, labs, clinics and individuals with reliable, rapid diagnosis for infectious diseases. MedMira diagnostics are sold under the Reveal®, MiraWell®, Multiplo™, and Miriad brands in global markets. MedMira's rapid HIV test is the only one in the world to achieve regulatory approvals in Canada, the United States, China and the European Union. MedMira's corporate offices and manufacturing facilities are located in Halifax, Nova Scotia, Canada. For more information visit MedMira's website at www.medmira.com.
This news release contains forward-looking statements, including statements regarding development of sales opportunities, which involve risk and uncertainties and reflect the company's current expectation regarding future events. Actual events could materially differ from those projected herein and depend on a number of factors including, but not limited to, changing market conditions, successful and timely completion of clinical studies, uncertainties related to the regulatory approval process, establishment of corporate alliances and other risks detailed from time to time in the company quarterly filings.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this statement.
MedMira Contact: Andrea Young
T. 902-450-1588
E. ayoung@medmira.com