Medifocus Inc. Announces Revenues for Year Ended March 31, 2013 and Adjustment of Prior Period Accounting Error
Submitted by Medifocus Inc. on Monday, 07/29/2013
COLUMBIA, Md. and Toronto, ON- July 24, 2013 – Medifocus, Inc. (OTCQX: MDFZF), (TSX VENTURE: MFS) (Medifocus or the Company) has filed its financial statements for the year ended March 31, 2013. Included in the financial statements is a correction of a prior period error that reflects the expensing of $3,904,313 of product development costs relating to the APA technology. The error resulted in a reduction of the total assets as at March 31, 2012 from $4,340,956 to $436,643, a reduction of 90%. These costs would have represented 34% of the total assets on the statement of financial position as at March 31, 2013. The Company had previously capitalized the research and development expenses of the APA 1000 Breast Cancer System following approval by the U.S. FDA in 1997 of the base machine of the APA system. The Company also received approval from Health Canada in 2009 and FDA in 2010 to proceed with the Phase III clinical trial to determine the efficacy of the APA 1000 System in reducing breast cancer tumor size in conjunction with chemotherapy. However, the approval to initiate the Phase III trials does not guarantee the receipt of the final approval for commercial sales of the APA 1000 system. The prior FDA approval of the base machine and approvals to proceed with the Phase III clinical trials does not provide sufficient basis to meet the criteria of technical feasibility for the purposes of capitalizing the research and development costs of the APA system. This has been accounted for as a prior period accounting error in the consolidated financial statements and has been reflected retrospectively in the financial statements. The prior period adjustment has reduced our intangible assets – product development costs by $3,904,313, and increased our opening deficit as at March 31, 2012 to $9,115,601. The accumulated deficit for the Company as at March 31, 2013 is $14,944,163.
First Year of Revenue
Medifocus is pleased to announce that it continues to increase sales from its Prolieve® Thermodilatation System, reaching $862,538 from January to March, 2013, representing an increase of 37% from the prior quarter. Since acquiring the Prolieve® business in July 2012 the Company has achieved total sales of $1,805,969. Due to a rapidly growing sales force and enhanced infrastructure that has led to stronger gross margins, the Company expects to deliver continued top and bottom-line growth.
The Prolieve® Thermodilatation System is designed to provide a relatively painless and effective alternative to drug therapy and certain types of surgical procedures used to treat the symptoms of Benign Prostatic Hyperplasia (BPH). Dr. Augustine Y. Cheung, President and CEO of Medifocus, commented, “We are extremely pleased with the progress we are making with the rollout of the Prolieve® system. In only three quarters, we have exceeded sales of $1.8 million and have strengthened our operational infrastructure so that we can further improve upon these strong results.”
Dr. Cheung continued, “We expect demand for the Prolieve® treatment to continue as it is the only microwave therapy to be randomized against drug therapy in FDA clinical trials and to show superior results than medication in those trials. The global drug market potential for BPH is estimated at approximately $8 billion annually. Prolieve® is more effective and creates far less side effects than the current drug regimens. We believe Prolieve® will achieve significant revenue rates in the next several years if we could capture a very modest share of that market”
Medifocus owns two fully developed technology platforms with comprehensive US and international patent protection: (1) The Endo-thermotherapy Platform-a catheter-basis focused heat technology platform that utilizes natural body openings to deliver precise microwave thermotherapy to the diseased sites. The U.S. FDA approved Prolieve Thermodilatation System for the treatment of Benign Prostatic Hyperplasia (“BPH”) was developed based on the Endo-thermotherapy and is currently generating revenue, and (2) The Adaptive Phased Array (APA) Microwave Focusing Platform-invented by MIT, licensed to Medifocus, directs precisely focused microwave energy at tumor center to induce shrinkage or eradication of tumors without undue harm to surrounding tissue. The Company’s APA 1000 Breast Cancer Treatment System, developed from the APA technology platform has received approval from the U.S. FDA and Health Canada to conduct the pivotal Phase III clinical trials. The Company believes that these two technology platforms can provide the design basis for the development of multiple cancer treatment systems for surface, subsurface and deep seated localized and regional cancers. Please visit www.medifocusinc.com, www.prolieve.com and http://www.facebook.com/pages/Medifocus-Inc-Company-Page/546315028715627 for more details.
www.medifocusinc.com, www.prolieve.com and http://www.facebook.com/pages/Medifocus-Inc-Company-Page/546315028715627 for more details.
This management’s discussion and analysis may contain statements that are “Forward-looking Statements”. These include statements about the Company’s expectations, beliefs, plans, objectives and assumptions about future events or performance. These statements are often, but not always, made through the use of words or phrases such as “will likely result”, “are expected to”, “will continue”. “anticipate”, “believes”, “estimate”, “intend”, “plan”, “would”, and “outlook” or statements to the effect that actions, events or results “will”, “may”, “should” or “would” be taken, occur or be achieved. Forward-looking statements are not historical facts, and are subject to a number of risks and uncertainties beyond the Company’s control. Accordingly, the Company’s actual results could differ materially from those suggested by these forward-looking statements for various reasons discussed throughout this analysis. Forward-looking statements are made on the basis of the beliefs, opinions, and estimates of the Company’s management on the date the statements are made and, other than in compliance with applicable securities laws, the Company does not undertake any obligation to update forward-looking statements if the circumstances or management’s beliefs, opinions or estimates should change. Readers should not place undue reliance on forward-looking statements.
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