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Perseon Announces Financial Results for First Quarter Fiscal Year 2015

Thursday, May 14, 2015 7:26 am MDT

Dateline:
Salt Lake City

Public Company Information:

NASDAQ:
PRSN
"I am optimistic about our ability to achieve the goals we outlined this past January."

Perseon Corporation (NASDAQ:PRSN) (Perseon or the Company), a leading provider of medical systems that utilize energy to treat cancer, today announced year-to-date operational highlights and financial results for the first quarter ended March 31, 2015[1].

First Quarter Highlights and Commentary

  • Executing 3-year strategic plan including the successful divestiture of the Company’s hyperthermia assets

  • U.S MicroThermX®  sales increased by 43% year-over-year

  • Conducting six ongoing clinical studies

  • Reiterates product pipeline of a next generation generator and new antennae offerings over the next 18-24 months

  • Received two FDA clearances with expanded indications for laparoscopic ablation procedures using image guidance and ablation of non-resectable liver tumors

  • Completed launch of new Perseon corporate name and brand, including launching a new ticker symbol, restructuring management and changing the Board of Directors

    “I am pleased with the progress we are making against our strategic initiatives.  The team is executing well with a disciplined focus on our energy ablation platform,” said Clint Carnell, CEO of Perseon.  “I am optimistic about our ability to achieve the goals we outlined this past January.”  

    Financial Results[2]

    Total revenues were $1,156,626 for the first quarter ended March 31, 2015, compared to total revenues of $1,535,534 for the three months ended March 31, 2014.  The decrease in revenue is directly attributable to a decrease in hyperthermia sales.  Revenues recognized from hyperthermia sales have historically fluctuated significantly.

    Total gross margin was $359,888, or approximately 31% of total revenues, for the three months ended March 31, 2015, compared to $676,976, or approximately 44%, for the three months ended March 31, 2014. The decrease in gross margin and gross margin percentage resulted primarily from higher than expected costs to produce the final hyperthermia systems completed and sold in the three months ended March 31, 2015.  Gross margin for MicroThermX® was approximately 58% of revenues for the quarter ended March 31, 2015 compared to 56% for the quarter ended March 31, 2014.

    Research and development expenses decreased to $496,635 for the first quarter of fiscal year 2015, from $521,264 for the comparable period last year. Selling, general and administrative expenses for the first quarter of fiscal year 2015 increased to $2,721,864 from $1,715,281 for the comparable period last year.  The increase resulted primarily from nonrecurring corporate restructuring costs and expenses related to the sale of the hyperthermia assets, rebranding efforts, changing the Company’s fiscal year-end and resultant reporting requirements, and increased legal costs.  As Perseon continues to roll out the MicroThermX product line and the support of its global distribution network, selling, general and administrative expenses may continue to increase over the level reported for the first quarter of fiscal year 2015.

    The Company reported a net loss of $2.9 million, or $0.07 per share, for the first quarter of fiscal year 2015, compared to a net loss of $1.6 million, or $0.05 per share, for the comparable period last year.

    As of March 31, 2015, Perseon had cash and cash equivalents of $3.6 million, total current assets of $5.9 million and no long-term debt.

    Conference Call and Webcast

Perseon management will host a conference call with a live webcast today at 2:00 p.m. Eastern Time/12:00 p.m. Mountain Time to discuss the financial results for the first quarter ended March 31, 2015.

Individuals interested in listening to the conference call may do so by visiting the Investor Relations section of the Company's website at www.perseonmedical.com or by dialing 800.860.2442 from the United States, or 412.858.4600 from outside the United States, and referencing “Perseon Corporation.”  If you would like to submit a question via email in advance of the conference call, please emailtross@finprofiles.com  

A telephone replay will be available through May 21, 2015, by dialing 877.344.7529 from the United States, or 412.317.0088 from outside the United States, and entering conference ID 10064204. A webcast replay will be available for 90 days.

About Perseon

Perseon Corporation invests its resources in fighting humanity’s worst disease: cancer. Perseon’s people are dedicated to finding innovative technologies and means to deliver energy solutions to healthcare providers and patients around the world. MicroThermX® treats soft tissue tumors with precision-focused energy, expanding the options and broadening the opportunities for cancer treatment.

Forward-Looking Statements

Statements contained in this press release that are not historical facts, including statements relating to our focus on microwave ablation to create stockholder value and pursuit of our strategic plans are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to risks and uncertainties, including the risk that for a variety of reasons we may not be able to execute on our strategic plans, and other risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date, except as required by law.

Contact

Tricia Ross

Financial Profiles

310-622-8226

tross@finprofiles.com

 

PERSEON CORPORATION

(Formerly BSD Medical Corporation)

Condensed Balance Sheets

(Unaudited)


ASSETS

March 31,

2015

December 31,

2014

Current assets:

 

 

   Cash and cash equivalents

$         3,560,193

$         5,594,578

   Accounts receivable, net of allowance for doubtful
      accounts of $66,480 and $140,000, respectively


794,575


275,072

   Related party trade accounts receivable

2,269

13,471

   Inventories, net

1,268,254

1,775,648

   Other current assets

259,799

86,583

      Total current assets

5,885,090

7,745,352

 

 

 

Property and equipment, net

1,204,734

1,140,871

 

 

 

 

$         7,089,824

$         8,886,223

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

   Accounts payable

$         1,015,861

$            598,466

   Accrued liabilities

856,512

1,105,152

   Notes payable, net of discount

846,790

-

   Customer deposits

19,825

41,667

   Deferred revenue

-

54,218

      Total current liabilities

2,738,988

1,799,503

 

 

 

Commitments and contingencies

 

 

 

 

 

Stockholders’ equity:

 

 

   Preferred stock, $.001 par value; 10,000,000 shares
      authorized, no shares issued and outstanding


-


-

   Common stock, $.001 par value, 80,000,000 shares
      authorized, 39,713,540 shares issued


39,714


39,714

   Additional paid-in capital

63,723,103

63,587,400

   Treasury stock, 24,331 shares at cost

(234)

(234)

   Accumulated deficit

(59,411,747)

(56,540,160)

      Total stockholders’ equity

4,350,836

7,086,720

 

 

 

 

$         7,089,824

$         8,886,223

 

 



PERSEON CORPORATION

 

(Formerly BSD Medical Corporation)

 

Condensed Statements of Comprehensive Loss

 

(Unaudited)

 

 

 

Three Months Ended
March 31,

 

 

2015

2014

 

Revenues:

 

 

 

   Sales

$         1,064,094

$         1,443,142

 

   Sales to related parties

11,232

12,492

 

   Equipment rental

81,300

79,900

 

 

 

 

 

   Total revenues

1,156,626

1,535,534

 

 

 

 

 

Cost of revenues:

 

 

 

   Cost of sales

788,105

847,647

 

   Cost of related party sales

6,668

7,964

 

   Cost of equipment rental

1,965

2,947

 

 

 

 

 

   Total cost of revenues

796,738

858,558

 

 

 

 

 

Gross margin

359,888

676,976

 

 

 

 

 

Operating costs and expenses:

 

 

 

   Research and development

496,635

521,264

 

   Selling, general and administrative

2,721,864

1,715,281

 

 

 

 

 

   Total operating costs and expenses

3,218,499

2,236,545

 

 

 

 

 

Loss from operations

(2,858,611)

(1,559,569)

 

 

 

 

 

Other income (expense):

 

 

 

   Interest income (expense), net

(3,856)

4,874

 

   Other expense, net

(9,120)

(2,699)

 

 

 

 

 

   Total other income (expense)

(12,976)

2,175

 

 

 

 

 

Loss before income taxes

(2,871,587)

(1,557,394)

 

 

 

 

 

Income tax benefit

-

-

 

 

 

 

 

Net loss and comprehensive loss

$        (2,871,587)

$        (1,557,394)

 

 

 

 

 

Net loss per common share:

 

 

 

   Basic

$                 (0.07)

$                 (0.05)

 

   Diluted

$                 (0.07)

$                 (0.05)

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

   Basic

39,689,000

33,982,000

 

   Diluted

39,689,000

33,982,000

 

 

 

 


PERSEON CORPORATION

 

(Formerly BSD Medical Corporation)

 

Condensed Statements of Cash Flows

 

(Unaudited)

 

 

 

Three Months Ended
March 31,

 

2015

2014

Cash flows from operating activities:

 

 

   Net loss

$    (2,871,587)

$    (1,557,394)

   Adjustments to reconcile net loss to net cash used
      in operating activities:

 

 

      Depreciation and amortization

29,577

31,599

      Stock-based compensation

135,703

206,513

      (Gain) loss on disposition of property and equipment

2,590

(67)

      Amortization of debt discount

2,209

-

      Decrease (increase) in:

 

 

         Receivables

(508,301)

145,941

         Inventories

507,394

231,142

         Other current assets

(173,216)

(50,547)

      Increase (decrease) in:

 

 

         Accounts payable

417,395

(135,539)

         Accrued liabilities

(248,640)

126,143

         Customer deposits

(21,842)

(91,897)

         Deferred revenue

(54,218)

(38,571)

 

 

 

   Net cash used in operating activities

(2,782,936)

(1,132,677)

 

 

 

Cash flows from investing activities:

 

 

   Proceeds from disposition of property and equipment

-

2,025

   Purchase of property and equipment

(96,030)

(22,657)

 

 

 

   Net cash used in investing activities

(96,030)

(20,632)

 

 

 

Cash flows from financing activities:

 

 

   Proceeds from notes payable, net

844,581

82,465

 

 

 

   Net cash provided by financing activities

844,581

82,465

 

 

 

Net decrease in cash and cash equivalents

(2,034,385)

(1,070,844)

Cash and cash equivalents, beginning of period

5,594,578

7,423,091

 

 

 

Cash and cash equivalents, end of period

$      3,560,193

$      6,352,247

 

 

 


[1] In January 2015, the Board of Directors of Perseon changed the Company’s fiscal year end from August 31 to December 31, beginning December 31, 2014. The report covering the Company’s transition period ended December 31, 2014 was filed on Form 10-K on March 31, 2015.

[2] Financial results for the three months ended March 31, 2015 include results associated with Perseon’s former hyperthermia cancer treatment product offering.  Subsequent to the end of the quarter on April 1, 2015, Perseon sold the assets associated with its hyperthermia cancer treatment systems among other assets, certain contracts, inventory, intellectual property and permits, pursuant to an Asset Purchase Agreement with Pyrexar Medical, Inc., a Nevada corporation.  A Current Report on 8-K related to the Asset Purchase Agreement was filed with the Securities and Exchange Commission on April 1, 2015.