NEW YORK , May 19 /PRNewswire-FirstCall/ -- Advance Nanotech, Inc. (OTC Bulletin Board: AVNA) today reported financial results for its first quarter ended March 31, 2008 . This quarter was the first, full fiscal period since the Company refocused its business model from managing the development of a portfolio of early-stage nanotechnologies to developing one technology within the portfolio that has extraordinary immediate and long-term commercial potential: the Owlstone chemical detection system. Highlights from the quarter include:
-- Commenced a realignment of operations to focus on the Owlstone technology -- Board approved Bret Bader as incoming CEO effective upon completion of Owlstone Exchange Agreement -- Achieved initial product orders and shipments for Lonestar and Owlstone vapor generators -- Awarded second patent from the U.S. patent office, bringing total issued U.S. patents to two, with 17 pending by Owlstone Nanotech, Inc. Added homeland security expert to its Board of Directors"The chemical detection industry is a large, rapidly growing market that spans across many commercial sectors, including industrial process control, homeland security, environmental monitoring and healthcare. Owlstone has developed next generation chemical detection products that are based on patented and patent-pending, proprietary technology to port real-time detection capabilities onto a silicon chip. Having successfully concluded the development of the core sensor, we are now developing and shipping product to meet real-time chemical detection needs in a wide range of industries. Given the near completion of the Advance Nanotech restructuring, we are eager to take the reins and rigorously grow our opportunities with our unique chemical detection platform," commented Bret Bader , incoming CEO of Advance Nanotech, Inc.
Mr. Bader continued, "Our goal for 2008 is to penetrate new and existing markets, continue to grow our patented intellectual property and build successful distribution partnerships. We have made progress in all three fronts thus far in 2008. With the core sensor built, our focus now is on developing application specific interfaces that provide the end user with a superior chemical detection product suited to their needs. In parallel, we are continuing to achieve milestones in the miniaturization and cost optimization of the surrounding electronics. This will enable us to provide a fully integrated, reprogrammable, chemical detection system that will set the standards for detection performance and system miniaturization. Our research and engineering efforts are further enhancing our already profound value proposition for existing chemical detection requirements and enabling new deployment scenarios currently unachievable. In addition to these commercial milestones, we are simultaneously continuing to right-size and reduce the operating costs of the combined organization. We anticipate rising gross margins during 2008 through both improvements to our manufacturing process as well as increased contract volumes. In addition, we intend to make meaningful improvements to our balance sheet over the remainder of the year as we move towards achieving cash flow profitability."
The Company reported revenues for the first quarter of approximately
The Company reported a net loss of
Operating expenses during the first quarter of 2008 totaled approximately
Interest expense incurred during the first quarter of 2008 increased by
approximately
Total assets remained essentially unchanged from the prior quarter at
QUARTER HIGHLIGHTS AND SUBSEQUENT EVENTS
Advance Nanotech added homeland security expert to its Board of Directors
On January 23, 2008 , Advance Nanotech announced the appointment of Mr. Joseph C. Peters to its Board of Directors. Mr. Peters is an internationally recognized authority on high-level security, intelligence, surveillance and protection systems, having served both the Clinton and Bush Administrations. Mr. Peter's thirty-year public service career began as a police officer to Executive Deputy Attorney General of Pennsylvania , Special U.S. Department of Justice Mafia Prosecutor and notably as the Drug Czar's Liaison to Tom Ridge and the White House Office of Homeland Security. Currently, Mr. Peters consults to national and international law enforcement organizations on counter-terrorism and related technology issues. He is a member of the International Association of Chiefs of Police, and serves on its Terrorism Committee
Advance Nanotech announced stockholder vote results
On February 12, 2008 , Advance Nanotech held a special meeting of its stockholders seeking approval to increase its authorized shares of common stock from 75,000,000 to 200,000,000 shares. The Company received an affirmative vote of approximately 95 percent.
Advance Nanotech appoints new incoming CEO and makes other management changes
On May 5, 2008 , Advance Nanotech announced that it had confirmed the appointment of Bret Bader as its incoming Chief Executive Officer effective upon completion of the Owlstone Exchange Agreement. Mr. Bader is currently Chief Executive Officer of Owlstone Nanotech, Inc, Advance Nanotech's majority owned subsidiary. Mr. Bader is a recognized authority on the availability and effective deployment of security technology, with emphasis on explosive, chemical, biological, narcotics and weapons detection systems. Mr. Bader was the general manager and vice president of Smith's Detection, Americas from 2004 to 2005. He was responsible for the generation and implementation of business strategy and [development plane], and is well-versed in the oversight of U.S. accounting and controller operations. His previous experience (1999 to 2004) was as general manager of the U.S. Security Inspection Division in the Heimann Systems organization (acquired by Smith's Detection), and with the EG&G Astrophysics Corp. (1989 to 1999)
In addition, Mr. Lee Cole has accepted the position of acting Principal Executive Officer and Mr. Peter Rugg has accepted the position of acting Chairman of the Board of Directors.
About Advance Nanotech
Advance Nanotech is in the process of restructuring its business and
becoming an operating company focused on chemical and biological next
generation detection. Its proprietary technologies, developed at
About Owlstone Nanotech, Inc.
Owlstone Nanotech, Inc. ("Owlstone") is a majority owned subsidiary of Advance Nanotech and is a pioneer in the commercialization of nanotechnology- based chemical detection products. The Owlstone Detector is a revolutionary dime-sized sensor that can be programmed to detect a wide range of chemical agents that may be present in extremely small quantities. Using leading-edge micro- and nano-fabrication techniques, Owlstone has created a complete chemical detection system that is significantly smaller and can be produced more cost effectively than products using existing technology. There are numerous applications -- across industries from security and defense to industrial process, air quality control and healthcare -- that depend on the rapid, accurate detection and measurement of chemical compounds. Owlstone works with market leaders within these industries to integrate the detector into next generation chemical sensing products and solutions. Owlstone's technology offers a unique combination of benefits, including small size, low manufacturing costs, minimal power consumption, reduced false-positives, and a customizable platform.
The information contained in this news release, other than historical information, consists of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Although the Company believes that the expectations reflected in such forward- looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors, including general economic conditions, spending levels, market acceptance of product lines, the recent economic slowdown affecting technology companies, the future success of scientific studies, ability to successfully develop products, rapid technological change, changes in demand for future products, legislative, regulatory and competitive developments and other factors could cause actual results to differ materially from the Company's expectations. Advance Nanotech's Annual Report on Form 10-K, recent and forthcoming Quarterly Reports on Form 10-Q, recent Current Reports and other SEC filings discuss some of the important risk factors that may affect Advance Nanotech's business, results of operations and financial condition. The Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
ADVANCE NANOTECH, INC. AND SUBSIDIARIES (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED BALANCE SHEETS March 31, December 31, 2008 2007 (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $2,329,970 $1,867,626 Restricted cash 77,843 77,557 Prepaid expenses and other current assets 327,443 162,622 Accounts receivable 770,480 1,325,080 Grants receivable - - Inventory 118,149 74,672 VAT tax refund receivable 91,035 3,902 Deferred financing costs, current position 800,735 801,618 Loans receivable - - TOTAL CURRENT ASSETS 4,515,655 4,313,077 Property plant and equipment, net 249,658 242,005 Patents 644,834 636,381 Deferred financing costs, net of current portion 600,553 801,620 Investment - - TOTAL ASSETS $6,010,700 $5,993,083 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Accounts payable $1,298,968 $1,291,882 Accrued expenses 1,535,274 1,369,538 Deferred equity compensation 411,395 345,268 Deferred revenue - 38,279 Capital lease obligation, current portion 17,670 21,483 TOTAL CURRENT LIABILITIES 3,263,307 3,066,450 Loan payable - 334,001 Convertible notes payable 9,031,679 6,294,105 Common stock warrants 2,345,618 2,184,266 Capital lease obligation, net of current portion 11,802 13,879 TOTAL LIABILITIES 14,652,406 11,892,701 Minority interests in subsidiaries 7,187,471 6,854,191 STOCKHOLDERS' DEFICIT Preferred stock; $0.001 par value; 25,000,000 shares authorized; 0 shares issued and outstanding in 2007 and 2006, respectively - - Common stock; $0.001 par value; 200,000,000 shares authorized; 36,667,686 and 36,595,686 shares issued and outstanding in March 31, 2008 and December 31, 2007, respectively 36,668 36,596 Additional paid in capital 16,753,299 16,128,733 Warrant valuation 665,043 2,708,358 Accumulated other comprehensive loss (1,372,437) (801,386) Deficit accumulated during development stage (31,911,750) (30,826,109) TOTAL STOCKHOLDERS' DEFICIT (15,829,177) (12,753,808) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $6,010,700 $5,993,083 ADVANCE NANOTECH, INC. AND SUBSIDIARIES (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) Three months Three months ended ended March 31, March 31, 2008 2007 Revenue- product $126,079 $ $86,973 Revenue- service 544,816 53,205 Total net revenue 670,895 140,178 Cost of sales (399,721) (79,971) Gross margin 271,174 60,207 Research and development (550,202) (1,166,781) Selling, general and administrative (2,236,421) (1,919,694) Total operating expenses (2,786,623) (3,086,475) Loss from operations (2,515,449) (3,026,268) Other income/ (expense) Interest Income 12,953 24,400 Grant income - 113,318 Gain on sale of investment - - Forgiveness of accounts payable and other income 86,554 - Interest expense (165,649) (19,737) Fair value of warrants gain / (loss) 961,516 - Accrued late registration costs - - Net loss before minority interest $(1,620,075) $(2,908,287) Minority interest in net loss of subsidiary 534,434 475,919 Net loss $(1,085,641) $(2,432,368) Foreign currency translation adjustment gain / (loss) (571,051) (132,442) Comprehensive loss $(1,656,051) $(2,564,810) Net loss per share- basic and diluted $(0.04) $(0.08) Net loss per share after minority interest- basic and diluted $(0.03) $(0.07) Comprehensive loss per share- basic and diluted $(0.05) $(0.07) Weighted average shares outstanding- basic and diluted 36,650,279 34,536,914SOURCE Advance Nanotech, Inc.
