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NewCardio Announces Financial Results for Its 2011 Second Quarter

August 15, 2011

SANTA CLARA, Calif., Aug. 15, 2011 /PRNewswire/ — NewCardio, Inc., (OTC BB: NWCI) a cardiac diagnostic technology provider, today announced financial results for the second quarter ended June 30, 2011. More details on the financial results are available in the Company’s Quarterly Report on Form 10-Q, filed today with the Securities and Exchange Commission.

Highlights

  • QTinno® was selected by a top 5 global pharmaceutical company for two Phase I drug safety studies, both of which were initiated in the second quarter. The fully automated ECG analysis will be delivered by one of NewCardio’s existing customers, the ECG core lab of a top 3 Clinical Research Organization, a CRO.
  • NewCardio presented the results of a recent QTinno performance study in April at a conference “Cardiovascular Safety in Drug Development: State-of-the-Art Assessments,” sponsored by the FDA, the Cardiac Safety Research Consortium and the Heart Rhythm Society (“HRS”).
  • NewCardio presented the results of a key study showing that our urgent care solution, my3KG(TM), had substantially greater accuracy than expert cardiologists’ interpretation of standard 12-lead ECG (12L ECG) in diagnosing Acute Myocardial Infarction in diabetic patients at the 60th Annual American College of Cardiology Scientific Meeting in April 2011.
  • The Company presented the results of a recent clinical study showing at the HRS conference in May 2011 showing that recurrent atrial fibrillation (AF) was accurately and timely detected in patients who used CardioBip(TM) for daily monitoring following catheter ablation procedures. The presentation was titled “Long-term Intermittent Wireless Remote Monitoring of Reconstructed 12L ECG in Post-Ablation AF Patients Using the CardioBip System.” The NewCardio study results showed that CardioBip detects recurrent AF earlier and more reliably than the current gold standard, which is periodic Holter monitoring.
  • Two of NewCardio’s recent medical and technical submissions were accepted for presentations at the 33rd Annual International Conference of the IEEE Engineering in Medicine and Biology Society conference to be held early September 2011 in Boston. The two papers were titled: ‘Wireless Monitoring of Reconstructed 12L ECG in AF Patients Enables Differential Diagnosis of Recurrent Arrhythmias’ and ‘Algorithm for Quantitative 3-D Analysis of ECG Signals Improves Myocardial Diagnosis Over Cardiologists in Diabetic Patients’.

NewCardio generated ECG license and professional services revenue associated with the deployment of QTinno for use in the cardiac safety component of a drug development study, totaling $102,000 compared to $21,000 in the second quarter of last year, an increase of 386%. Net cash used in operating activities was $682,000 in the current quarter, which is a decrease of 54% from $1,492,000 in the second quarter last year. For the quarter, the Company reported a net loss attributable to common shareholders of $935,000, or $(0.03) per fully diluted share, compared to a net loss attributable to common shareholders of $1.5 million, or $(0.05) per fully diluted share, in the second quarter last year.

The Company is continuing to explore potential strategic funding opportunities to provide capital and other resources for the further development and marketing of its 3-D platform technology solutions; however, there can be no assurance that such efforts will be successful.

Vincent Renz, NewCardio’s President and CEO commented, “Progress in the development and commercialization of our initial solutions remains steady, but sure, as we continue our strategic funding efforts in raising the capital required to accelerate the development of CardioBip and my3KG. QTinno continues to gain market adoption, as marked by our selection by Merck for use in two early phase QT trials, which we believe will continue as our partners continue to educate their drug development customers who continue to look for advanced science and technology which will enable them to receive quality results in a more timely and cost effective manner. In addition, we continue to bolster the reputation of CardioBip and my3KG in the industry through our current development and validation efforts, as evidenced by the presentations and the acceptance of papers, and believe this will ultimately lead to commercial success.”

Dr. Patrick Maguire, Chairman of the Board of Directors, added, “Since becoming Chairman in June 2011, I have been actively working with the management team and the Board on our strategic opportunities. I continue to believe in NewCardio and the opportunity to move forward our superior technology, which has the potential to successfully address significant clinical needs in cardiac safety, remote monitoring and arrhythmia detection. I look forward to being part of NewCardio’s progress and success, bringing both my medical background as a cardiologist and business background as CEO of a VC-backed cardiology technology company to help the Company realize its potential.”

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 12L ECG. NewCardio’s 3-D 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, 2010 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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Tables follow


                               NEWCARDIO, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                                   June 30,     December 31,
                                                          2011          2010
                                                          ----          ----
                                                  (unaudited)
                                                  -----------
                      ASSETS
    Current assets:
    Cash                                              $122,044      $584,974
    Accounts receivable, trade                          47,811        42,905
    Prepaid expenses                                    16,972        32,303
    Prepaid commitment fees                            550,910     1,958,654
                                                       -------     ---------
      Total current assets                             737,737     2,618,836

    Property, plant and equipment, net of
     accumulated depreciation of $200,067 and
     $158,950 as of June 30, 2011 and December
     31, 2010, respectively                            116,843       156,261
                                                       -------       -------

    Other assets:
    Patent costs, net                                   81,431        55,357
    Deposits                                            22,600        22,600
                                                        ------        ------
      Total other assets                               104,031        77,957
                                                       -------        ------

                                                      $958,611    $2,853,054
                                                      ========    ==========

       LIABILITIES AND STOCKHOLDERS' DEFICIT
    Current liabilities:
    Accounts payable and accrued expenses             $918,705      $618,413
    Unearned revenue                                     1,000         1,500
    Line of credit, $2,200,000 and $1,900,000
     to a related party as of June 30, 2011
     and December 31, 2010, respectively             3,900,000     3,000,000
                                                     ---------     ---------
      Total current liabilities                      4,819,705     3,619,913
                                                     ---------     ---------

    Warrant derivative liability                       336,443     2,141,871
    Preferred stock derivative liability                 9,052       250,863
                                                         -----       -------
      Long term liabilities                            345,495     2,392,734
                                                       -------     ---------

      Total liabilities                              5,165,200     6,012,647
                                                     ---------     ---------

    Temporary equity:
    Preferred shares subject to liability
     conversion                                              -             -
                                                           ---           ---

    Permanent equity:
    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; 12,116
     and 12,250 shares issued and outstanding
     as of  June 30, 2011 and December 31,
     2010, respectively                                     12            12
    Preferred stock Series C, $0.001 par
     value; 7,000 shares designated; 2,295
     shares issued and outstanding as of June
     30, 2011 and December 31, 2010                          2             2
    Preferred stock Series D, $0.001 par
     value;  1,000 shares designated; 1,000
     and 800 shares issued and outstanding as
     of June 30, 2011 and December 31, 2010,
     respectively                                            1             1
    Common stock, $0.001 par value,
     500,000,000 shares authorized; 32,556,576
     and 30,688,902 shares issued as of June
     30, 2011 and December 31, 2010,
     respectively; 32,494,076 and 30,563,902
     shares outstanding as of June 30, 2011
     and December 31, 2010, respectively                32,557        30,689
    Additional paid in capital                      41,537,281    39,236,320
    Deficit                                        (45,776,442) (42,426,617)
                                                   -----------   -----------
      Total stockholders' deficit                   (4,206,589)   (3,159,593)
                                                    ----------    ----------

                                                      $958,611    $2,853,054
                                                      ========    ==========


                                   NEWCARDIO, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (unaudited)

                    Three months ended June 30,     Six months ended June 30,
                            2011           2010         2011           2010
                            ----           ----         ----           ----
    Revenue             $101,559        $21,077     $140,628        $70,118
    Cost of
     sales                35,933         44,823       97,645         63,307
                          ------         ------       ------         ------
    Gross
     profit
     (loss)               65,626        (23,746)      42,983          6,811

    Operating
     expenses:
    Selling,
     general
     and
     administrative    1,095,513      1,645,112    2,305,467      3,547,122
    Depreciation          11,927         11,496       24,246         21,969
    Research
     and
     development         692,568      1,037,614    1,417,186      1,925,688
                         -------      ---------    ---------      ---------
      Total
       operating
       expenses        1,800,008      2,694,222    3,746,899      5,494,779
                       ---------      ---------    ---------      ---------

    Net loss
     from
     operations       (1,734,382)    (2,717,968)  (3,703,916)    (5,487,968)
                      ----------     ----------   ----------     ----------

    Other
     income
     (expense)
    Gain on
     change in
     fair value
     of warrant
     derivative
     liability
     and
     preferred
     stock
     derivative
     liability         1,726,046      1,880,553    2,084,270        614,233
     Amortization
     of
     commitment
     fees               (742,531)      (541,318)  (1,425,502)      (781,443)
    Other
     financing
     costs               (75,202)       (60,000)    (100,438)       (85,000)
    Interest,
     net                (109,061)       (27,408)    (204,239)       (41,113)
                        --------        -------     --------        -------
    Total other
     income
     (expense):          799,252      1,251,826      354,091       (293,323)
                         -------      ---------      -------       --------

    Net loss
     before
     income
     taxes              (935,130)    (1,466,141)  (3,349,825)    (5,781,291)

    Provision
     for income
     taxes                     -              -            -              -
                             ---            ---          ---            ---

    NET LOSS
     ATTRIBUTABLE
     TO COMMON
     SHAREHOLDERS      $(935,130)   $(1,466,141) $(3,349,825)   $(5,781,291)
                       =========    ===========  ===========    ===========

    Net (loss)
     per share-
     basic and
     fully
     diluted              $(0.03)        $(0.05)      $(0.11)        $(0.21)
                          ======         ======       ======         ======

    Weighted
     average
     number of
     shares-
     basic and
     fully
     diluted          32,227,739     28,495,245   31,488,868     27,418,543
                      ==========     ==========   ==========     ==========

Investor Contact:
Hayden IR
Jeff Stanlis, Partner
(602) 476-1821
jeff@haydenir.com

SOURCE NewCardio, Inc.


Source: newswire



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