NASDAQ, TSX: NVCN
VANCOUVER, March 28, 2018 /PRNewswire/ - Neovasc Inc.
("Neovasc" or the "Company") (NASDAQ, TSX: NVCN), a leader in the
development of minimally invasive transcatheter mitral valve
replacement technologies and the Reducer therapy for Refractory
Angina, today announced financial results for the fourth quarter
and fiscal year ended December 31,
2017 (all figures in U.S. dollars unless otherwise
indicated).
"Since joining Neovasc in late January, I have been evaluating
the Company's current clinical and commercial activities, as well
as organizational and financial matters. We are making adjustments
to these programs and have started to implement a broader
turnaround strategy designed to more effectively create value for
our patients, customers, shareholders and employees, while bringing
our innovative products to market," commented Fred Colen, Neovasc's Chief Executive Officer.
"We still face challenges, however, I believe that our innovative
and promising products, as well as the determination of our team,
will lead us to long-term success."
"We have three specific tasks to focus on, in order to recognize
the potential of our Tiara and Reducer products. Our goal is to
expand on the foundation we established in Europe and on the growing enthusiasm in the
market for the Reducer therapy, based on the initial, promising
clinical experiences. We also remain pleased with the clinical
results to-date from the first 50 Tiara implants, with ongoing
enrollment in our Tiara I and II studies, as well as the initiation
of the development of the transfemoral, trans-septal version of
Tiara," concluded Colen.
The Tiara Mitral Valve
The Tiara™ (the "Tiara") Mitral
Valve has shown its potential as a viable clinical treatment in the
early results of the Company's clinical science programs, as well
as in compassionate use cases for patients with severe Mitral
Regurgitation and enlarged left ventricles, in patients who are
considered to be at high risk for surgery.
Neovasc will continue to focus on enrolling patients in the
European Tiara II CE Mark clinical study. To date, 12 patients have
been enrolled in this study, with an additional two patients
scheduled for implantation and several other patients currently
under evaluation for eligibility. The 30-day survival rate in the
first 49 patients is 44 of 49, or 90%. There were 21 cases
performed in 2017, each of which was a technical success (100%),
and had a 90% survival rate at 30 days.
The European Tiara II CE Mark clinical study is on track to
allow the Company to apply for CE Mark approval in approximately
2020. In an effort to streamline and increase patient enrollment
for this trial, the Company has worked hard to establish an
easy-to-use, local pre-screening process and tool, which has
recently been completed and is now being implemented in
Europe. Neovasc has also increased
its field clinical engineering support in Europe, which will provide greater "on
the ground" support to the sites and streamline the screening
process by reducing the time it takes from initially identifying a
patient to the time of implantation.
Simultaneously, Neovasc is in the process of recruiting and
qualifying additional clinical study sites in Germany, the UK, Spain and Israel. The Company currently has ten clinical
sites: five in Germany, three in
Italy and two in the
UK. Neovasc will seek to add six clinical sites in the first
list of countries over the course of the next few months, and is in
early-stage discussions on additional clinical study sites in
Germany and one in the Netherlands.
The Reducer
The Neovasc Reducer™ (the "Reducer") has a
solid market opportunity as implant rates start to gain traction in
Europe and the Middle
East. The commercial progress for the Reducer in the first
2018 quarter to-date has been encouraging with a 41% increase in
implants compared to the same time-period of 2017. The Company
plans to further increase that momentum to achieve a doubling of
implants in EMEA in 2018 over 2017. A key factor for success and
growth is the NUB 1 status for new therapies in Germany, which the Reducer received at the end
of January 2018.
The Company continues to enroll in the Reducer I clinical study
and is exploring options for initiating of the COSIRA-II IDE study,
an approximately 380-patient study to be conducted at up to 35
centers in the United States,
which was recently approved by the FDA in late 2017.
Results for the quarters ended December 31, 2017 and 2016
Revenues
Revenues decreased 43% to $5,389,014 for the year ended December 31, 2017, compared to revenues of
$9,512,796 for the same period in
2016. The Company continues to focus its business away from its
traditional revenue streams and towards the development and
commercialization of its own products, the Reducer and the Tiara.
In December 2017, the Company closed
its contract manufacturing and consulting services.
Sales of the Reducer for the year ended December 31, 2017 were $1,128,126, compared to $1,004,948 for the same period in 2016,
representing an increase of 12%. While the Company is disappointed
by this top line growth, management can point to a 38% increase in
implantations from 174 in 2016 to 240 in 2017 as a sign that the
underlying business is growing. Importantly, in the fourth
quarter of 2017, the Company reported a doubling of the implant
rate as compared to the same period in 2016. The Company
expects that orders from our distributors, and our recorded
revenue, will trend toward this underlying growth rate in the
coming periods. The Company recognizes that future revenues
may be unstable before the Reducer becomes widely adopted. The
continued success of the commercialization of the Reducer will be
dependent on the amount of internal resources allocated to the
product, obtaining appropriate reimbursement codes in various
territories and correctly managing the referrals process.
Contract manufacturing revenues for the year ended December 31, 2017 were $949,379, compared to $3,746,521 for the same period in 2016,
representing a decrease of 75%. The decrease in revenue for the
year ended December 31, 2017 compared
to the same period in 2016 is primarily due to the loss of Boston
Scientific Corporation ("Boston Scientific") as a
customer. Revenues from consulting services for the year ended
December 31, 2017 were $3,311,509, compared to $4,761,327 for the same period in 2016,
representing a decrease of 30%. This decline is indicative of the
trend the Company was seeing in consulting service revenue prior to
closing its consulting services.
Cost of Goods Sold
The cost of goods sold for the year
ended December 31, 2017 was
$3,477,821, compared to $7,091,761 for the same period in 2016. The
overall gross margin for the year ended December 31, 2017 was 35%, compared to 25% gross
margin for the same period in 2016. The Company has seen its gross
margins increase due to a change in the product mix as Reducer
revenues reflect an increasing proportion of the overall
revenues.
Expenses
Total expenses for the year ended
December 31, 2017 were $34,060,101, compared to $39,243,928 for the same period in 2016,
representing a decrease of $5,183,857
or 13%. The decrease in total expenses for the year ended
December 31, 2017 compared to the
same period in 2016 reflects a $3,498,004 reduction in general and
administrative expenses (of which, $10,377,241 relates to a decrease in litigation
expenses offset by expenses related to the 2017 Financings (as
defined below) of $5,447,182) and a
$1,875,411 decrease in product
development and clinical trial expenses to preserve cash
resources.
Selling expenses for the year ended December 31, 2017 were $886,226, compared to $696,638 for the same period in 2016,
representing an increase of $189,588,
or 27%. The increase in selling expenses for the year ended
December 31, 2017 compared to the
same period in 2016 reflects an increase in costs incurred for
commercialization activities related to the Reducer. The
Company continues to minimize its selling expenses in the light of
the impact of litigation on the cash resources of the Company.
General and administrative expenses for the year ended
December 31, 2017 were $15,684,783, compared to $19,182,787 for the same period in 2016,
representing a decrease of $3,498,004, or 18%. The decrease in general
and administrative expenses for the year ended December 31, 2017 compared to the same period in
2016 can be substantially explained by a $10,759,788 decrease in litigation expenses,
partially offset by an increase in expenses related to the 2017
Financings of $5,447,182.
Product development and clinical trial expenses for the year
ended December 31, 2017 were
$17,489,092 compared to $19,364,503 for the same period in 2016,
representing a decrease of $1,875,411, or 10%. The decrease in product
development and clinical trial expenses for the year ended
December 31, 2017 was the result of a
decision and need to preserve cash resources until the decision
from the Appeals Court in the primary U.S. litigation with CardiAQ
was final.
Other Income and Loss
The other income for the year
ended December 31, 2017 was
$9,724,615, compared to a loss of
$49,471,477 for the same period in
2016, an increase in other income of $59,196,092. The increase in the other
income can be substantially explained by a $111,781,096 damages provision in relation to the
Company's litigation with CardiAQ charged in year ended
December 31, 2016 and an offsetting
$65,095,733 gain on sale of assets
related to an agreement with Boston Scientific in the same
year. The accounting treatment of the 2017 Financings resulted
in a $7,380,102 net gain and foreign
exchange changes accounted for a $5,690,603 gain between the years.
Losses
The operating losses and comprehensive losses
for the year ended December 31, 2017
were $22,908,721 and $24,859,117, respectively, or $0.28 basic and diluted loss per share, as
compared with losses of $86,494,893
and $82,397,922, respectively, or
$1.28 basic and diluted loss per
share, for the same period in 2016.
The $63,870,077 decrease in the
operating loss incurred for the year ended December 31, 2017 compared to the same period in
2016 is mostly attributable to a $111,781,096 damages provision in relation to the
Company's primary U.S. litigation with CardiAQ that was charged in
year ended December 31, 2016 and an
offsetting gain of $65,095,733 on the
sale of assets related to an agreement with Boston Scientific in
the same year. The accounting treatment of the 2017 Financings
resulted in a net $7,380,102 gain and
foreign exchange changes accounted for a $5,690,603 gain between the years. In addition,
there was a $3,498,004 reduction in
general and administrative expenses, of which $10,377,241 relates to a decrease in litigation
expenses offset by expenses related to the 2017 Financings of
$5,447,182, and a decrease of in
product development and clinical trial expenses of $1,875,411.
Discussion of Liquidity and Capital Resources
Neovasc
finances its operations and capital expenditures with cash
generated from operations and equity, and debt financings. As
at December 31, 2017, the Company had
cash and cash equivalents of $17,507,157 compared to cash and cash equivalents
of $22,954,571 as at December 31, 2016. The Company will require
significant additional financing in order to continue to operate
its business. There can be no assurance that such financing will be
available on favorable terms, or at all, and the Company's
outstanding Warrants and Notes (as defined below) will make raising
this capital more difficult. These circumstances create material
uncertainty and cast substantial doubt about the Company's ability
to continue as a going concern.
The Company has paid the $112
million litigation damages associated with the primary U.S.
CardiAQ litigation and there is no provision for litigation damages
as of December 31, 2017.
Outstanding Share Data
On November 17, 2017, the Company completed an
underwritten offering of 6,609,588 Series A units and 19,066,780
Series B units of the Company, at a price of $1.46 per Unit for gross proceeds of
approximately $37,487,497 (the "2017
Public Transaction"). Concurrent with the 2017 Public Transaction,
the Company completed a private placement for the sale of
$32,750,000 aggregate principal
amount of senior secured convertible notes (the "Notes") and Series
E warrants of the Company (the "2017 Private Placement", and
together with the 2017 Public Transaction, the "2017 Financings").
The proceeds from the 2017 Financings were mostly applied towards
damages and interest awards associated with the primary U.S.
CardiAQ litigation.
On January 30, 2018, the remaining
1,698,841 Series D warrants issued pursuant to the 2017 Public
Transaction were exercised for gross proceeds of $16,699 and 1,698,841 shares were issued from
treasury.
As of March 28, 2018, of the
25,676,368 Series B warrants initially issued pursuant to the 2017
Public Transaction (the "Series B Warrants"), 11,170,788 had been
exercised using the cashless alternative net number mechanism for
149,350,096 common shares of the Company and of the 22,431,506
Series F Warrants initially issued pursuant to the 2017 Public
Transaction (the "Series F Warrants"), 21,041,660 had been
exercised using the cashless alternative net number mechanism for
223,427,286 common shares of the Company. As of March 28, 2018, there were 14,505,580 Series B
Warrants and 1,389,846 Series F Warrants outstanding.
As at March 28, 2018, the Company
had 477,441,751 common voting shares issued and outstanding.
Further, the following securities are convertible into common
shares of the Company: 9,419,117 stock options with a weighted
average price of C$3.13, 74,277,272
warrants and a convertible note that could convert into 22,431,507
common shares (not taking into account the alternate net number
mechanism in the Series B Warrants and Series F Warrants or the
alternate conversion price mechanism in the Notes). Our fully
diluted share capital as of the same date is 583,569,647. Our fully
diluted share capital, adjusted on the assumption that all the
remaining Series B Warrants and Series F Warrants are exercised
using the cashless alternative net number mechanism and the
outstanding Notes are exercised using the alternate conversion
price at the closing price on March 27, 2018 is
1,519,760,607.
For description of the terms of the securities issued pursuant
to the 2017 Financings, see the forms of warrants and note
previously filed on SEDAR and with the SEC on Form 6-K and the
prospectus supplement previously filed on SEDAR and with the SEC.
For a description of the risks associated with the securities
issued pursuant to the 2017 Financings, the amount of such
securities exercised to date and the dilution to date caused by
such exercises, see the Company's Annual Information Form, which is
available on SEDAR at www.sedar.com and on Form 6-K furnished with
the SEC at www.sec.gov.
The Company prepares its consolidated financial statements in
accordance with International Financial Reporting Standards, as
issued by the International Accounting Standards Board.
Neovasc's 2017 Annual Information Form, Management's Discussion
and Analysis and Consolidated Financial Statements and related
notes will be posted on the Company's website at
www.neovasc.com and will be filed on SEDAR and with the SEC on
Form 6-K. In addition to the summary contained herein, readers are
encouraged to review the full disclosure in these documents. The
Company's Annual Report on Form 20-F will be filed with the SEC by
April 30, 2018.
Conference Call and Webcast information
Neovasc will
be hosting a conference call today at 4:30 pm ET to
discuss these results. To participate in the conference, dial
800-281-7973 (domestic) or 323-794-2093 (international) and use
passcode 4395026#. A recording of the call will be available until
April 10, 2018 by calling
844-512-2921 or 412-317-6671 and using passcode 4395026#. A
link to the live and archived audio webcast of the conference call
will also be available on the Presentations and Events page of the
Investors section of Neovasc's website at
www.neovasc.com.
NEOVASC
INC.
|
Consolidated
Statements of Financial Position
|
As at December
31,
|
(Expressed in U.S.
dollars)
|
|
|
2017
|
2016
|
2015
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
17,507,157
|
$
|
22,954,571
|
$
|
55,026,171
|
|
|
Cash held in
escrow
|
-
|
70,000,000
|
-
|
|
|
Accounts
receivable
|
1,334,923
|
3,117,474
|
1,736,941
|
|
|
Inventory
|
398,556
|
196,723
|
598,136
|
|
|
Prepaid expenses and
other assets
|
802,366
|
505,340
|
146,590
|
|
Total current
assets
|
20,043,002
|
96,774,108
|
57,507,838
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
Restricted
cash
|
478,260
|
449,760
|
-
|
|
|
Property, plant and
equipment
|
1,685,181
|
1,585,635
|
3,720,556
|
|
Total non-current
assets
|
2,163,441
|
2,035,395
|
3,720,556
|
|
|
|
|
Total
assets
|
$
|
22,206,443
|
$
|
98,809,503
|
$
|
61,228,394
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
1,844,955
|
$
|
2,490,943
|
$
|
3,232,971
|
|
|
Damages
provision
|
-
|
111,781,096
|
-
|
|
|
Convertible
Note
|
4,261,597
|
-
|
-
|
|
|
Derivative liability
from financing
|
19,997,345
|
-
|
-
|
|
Total current
liabilities
|
26,103,897
|
114,272,039
|
3,232,971
|
|
|
|
|
|
Non-Current
Liabilities
|
|
|
|
|
|
Convertible
Note
|
15,745,962
|
-
|
-
|
|
|
Derivative liability
from financing
|
16,831,685
|
-
|
-
|
Total non-current
liabilities
|
32,577,647
|
-
|
-
|
|
|
|
|
|
|
|
|
Total
liabilities
|
$
|
58,661,544
|
$
|
114,272,039
|
$
|
3,232,971
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Share
capital
|
$
|
171,803,816
|
$
|
168,712,673
|
$
|
161,505,037
|
|
|
Contributed
surplus
|
23,056,846
|
22,301,437
|
20,569,110
|
|
|
Accumulated other
comprehensive loss
|
(6,643,436)
|
(4,693,040)
|
(8,790,011)
|
|
|
Deficit
|
(224,692,327)
|
(201,783,606)
|
(115,288,713)
|
|
Total
equity
|
(36,475,101)
|
(15,462,536)
|
57,995,423
|
|
|
|
|
Total liabilities
and equity
|
$
|
22,206,443
|
$
|
98,809,503
|
$
|
61,228,394
|
NEOVASC
INC.
|
Consolidated
Statements of Loss and Comprehensive Loss
|
For the years ended
December 31,
|
(Expressed in U.S.
dollars)
|
|
|
2017
|
2016
|
2015
|
|
|
|
|
REVENUE
|
|
|
|
Reducer
|
$
|
1,128,126
|
$
|
1,004,948
|
$
|
526,412
|
Product
sales
|
-
|
-
|
353,736
|
Contract
manufacturing
|
949,379
|
3,746,521
|
3,236,978
|
Consulting
services
|
3,311,509
|
4,761,327
|
5,812,814
|
|
5,389,014
|
9,512,796
|
9,929,940
|
|
|
|
|
COST OF GOODS
SOLD
|
3,477,821
|
7,091,761
|
6,938,134
|
GROSS
PROFIT
|
1,911,193
|
2,421,035
|
2,991,806
|
|
|
|
|
EXPENSES
|
|
|
|
Selling
expenses
|
886,226
|
696,638
|
655,669
|
General and
administrative expenses
|
15,684,783
|
19,182,787
|
13,913,076
|
Product development
and clinical trials expenses
|
17,489,092
|
19,364,503
|
17,181,395
|
|
34,060,101
|
39,243,928
|
31,750,140
|
|
|
|
|
OPERATING
LOSS
|
(32,148,908)
|
(36,822,893)
|
(28,758,334)
|
|
|
|
|
OTHER
INCOME/(EXPENSE)
|
|
|
|
Interest
income
|
355,806
|
177,761
|
577,006
|
Interest
expense
|
-
|
-
|
(2,538)
|
Damages
provision
|
(738,021)
|
(111,781,096)
|
-
|
Gain on sale of
assets
|
-
|
65,095,733
|
-
|
Gain/(loss) on
foreign exchange
|
2,726,728
|
(273,746)
|
1,620,727
|
Unrealized gain on
derivative liability and convertible note
|
10,732,089
|
-
|
-
|
Amortization of
deferred loss
|
(3,351,987)
|
-
|
-
|
Foreign exchange loss
on damages provision
|
-
|
(2,690,129)
|
-
|
|
9,724,615
|
(49,471,477)
|
2,195,195
|
LOSS BEFORE
TAX
|
(22,424,293)
|
(86,294,370)
|
(26,563,139)
|
|
|
|
|
Tax
expense
|
(484,428)
|
(200,523)
|
(167,351)
|
|
|
|
|
LOSS FOR THE
YEAR
|
$
|
(22,908,721)
|
$
|
(86,494,893)
|
$
|
(26,730,490)
|
|
|
|
|
OTHER
COMPREHENSIVE (LOSS)/GAIN FOR THE YEAR
Items that will be
reclassified subsequently to profit or loss
|
|
|
|
Exchange difference
on translation for other than damages
provision
|
(1,950,396)
|
1,406,842
|
(8,386,205)
|
Exchange difference
on translation for damages provision
|
-
|
2,690,129
|
-
|
|
(1,950,396)
|
4,096,971
|
(8,386,205)
|
|
|
|
|
LOSS AND OTHER
COMPREHENSIVE LOSS
FOR THE
YEAR
|
$
|
(24,859,117)
|
$
|
(82,397,922)
|
$
|
(35,116,695)
|
|
|
|
|
LOSS PER
SHARE
|
|
|
|
Basic and diluted
loss per share
|
$
|
(0.28)
|
$
|
(1.28)
|
$
|
(0.41)
|
Consolidated
Statements of Cash Flows
|
For the years ended
December 31,
|
(Expressed in U.S.
dollars)
|
|
|
2017
|
2016
|
2015
|
OPERATING
ACTIVITIES
|
|
|
|
Loss for the
year
|
$
|
(22,908,721)
|
$
|
(86,494,893)
|
$
|
(26,730,490)
|
Adjustments
for:
|
|
|
|
|
Depreciation
|
534,545
|
755,734
|
503,709
|
|
Share-based
payments
|
2,484,542
|
1,810,111
|
4,114,165
|
|
Damages
provision
|
738,021
|
111,781,096
|
-
|
|
Gain on sale of
assets
|
-
|
(65,095,733)
|
-
|
|
Unrealized gain on
derivative liability and convertible note
|
(10,732,089)
|
-
|
-
|
|
Amortization of
deferred loss
|
3,351,987
|
-
|
-
|
|
Income tax
expense
|
484,428
|
200,523
|
-
|
|
Interest
income
|
(355,806)
|
(177,761)
|
(609,493)
|
|
Interest
expense
|
-
|
-
|
2,538
|
|
(26,403,093)
|
(37,220,923)
|
(22,719,571)
|
Net change in
non-cash working capital items:
|
|
|
|
|
Accounts
receivable
|
1,907,768
|
(1,357,201)
|
(442,585)
|
|
Inventory
|
(174,392)
|
(470)
|
(269,605)
|
|
Prepaid expenses and
other assets
|
(235,366)
|
(221,973)
|
31,592
|
|
Accounts payable and
accrued liabilities
|
(1,046,664)
|
(842,360)
|
1,527,656
|
|
Damages
Provision
|
(112,519,117)
|
-
|
-
|
|
(112,067,771)
|
(2,422,004)
|
847,058
|
Income tax and
Interest paid and received:
|
|
|
|
|
Income tax
paid
|
(255,118)
|
(326,492)
|
-
|
|
Interest
received
|
112,036
|
175,260
|
592,093
|
|
Interest
paid
|
-
|
-
|
(2,538)
|
|
(143,082)
|
(151,232)
|
589,555
|
Net cash applied
to operating activities
|
(138,613,946)
|
(39,794,159)
|
(21,282,958)
|
|
|
|
|
INVESTING
ACTIVITES
|
|
|
|
|
Decrease/(increase)
in restricted cash
|
2,520
|
(449,760)
|
-
|
|
Decrease/(increase)
in cash held in escrow
|
70,000,000
|
(70,000,000)
|
-
|
|
Redemption of
guaranteed investment certificates
|
-
|
-
|
9,322,492
|
|
Purchase of property,
plant and equipment
|
(505,667)
|
(656,170)
|
(2,143,128)
|
|
Proceeds from sale of
assets
|
-
|
67,741,740
|
-
|
Net cash from /
(applied to) investing activities
|
69,496,853
|
(3,364,190)
|
7,179,364
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
Repayment of
long-term debt
|
-
|
-
|
(164,364)
|
|
Proceeds from private
placements and public offerings
|
-
|
7,054,660
|
69,879,210
|
|
Proceeds from
exercise or warrants
|
18,750
|
-
|
-
|
|
Proceeds from
financing before fees
|
65,324,997
|
-
|
-
|
|
Proceeds from
exercise of options
|
234,952
|
75,192
|
1,090,092
|
Net cash from
financing activities
|
65,578,699
|
7,129,852
|
70,804,938
|
|
|
|
|
NET CHANGE IN CASH
AND CASH EQUIVALENTS
|
(3,538,394)
|
(36,028,497)
|
56,701,344
|
CASH AND CASH
EQUIVALENTS
|
|
|
|
Beginning of the
year
|
22,954,571
|
55,026,171
|
5,193,561
|
Exchange difference
on cash and cash equivalents
|
(1,909,020)
|
3,956,897
|
(6,868,734)
|
End of the
year
|
$
|
17,507,157
|
$
|
22,954,571
|
$
|
55,026,171
|
Represented
by:
|
|
|
|
Cash
|
17,507,157
|
13,961,537
|
7,860,728
|
Cashable high
interest savings accounts
|
-
|
8,993,034
|
25,490,443
|
Cashable guaranteed
investment certificates
|
-
|
-
|
21,675,000
|
|
$
|
17,507,157
|
$
|
22,954,571
|
$
|
55,026,171
|
About Neovasc Inc.
Neovasc is a specialty medical
device company that develops, manufactures and markets products for
the rapidly growing cardiovascular marketplace. Its products
include the Neovasc Reducer™, for the treatment of refractory
angina, which is not currently available in the United States and has been available in
Europe since 2015, and the Tiara™,
for the transcatheter treatment of mitral valve disease, which is
currently under clinical investigation in the United States, Canada and Europe. For more information, visit:
www.neovasc.com.
This news release contains forward-looking statements within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995 and applicable Canadian securities laws regarding the
Company's plans and expectations concerning implementing a
turnaround strategy to create value and bring its products to
market, its products leading it to long-term success, expanding
enthusiasm for the Reducer, future enrollment in the Tiara I and II
studies, the development of a transfemoral, trans-septal version of
Tiara, the viability of the Tiara as a clinical treatment, the
Company's ability to complete the Tiara II study and timing of any
application for CE Mark approval, the Company's ability to support
additional clinical sites in Europe and to reduce time between when a site
identifies a patient to when they are enrolled, the Company's
ability to recruit additional clinical sites for the Tiara II
study, the opportunity for the Reducer to gain traction in
Europe and the Middle East, the Company's plan to
double the number of implants in EMEA in 2018 over 2017, the
Company's ability to initiate the COSIRA-II IDE study, the
Company's ability to minimize selling expenses to preserve cash
resources, the Company's ability to raise significant additional
financing in order to continue to operate its business, and the
shares issuable upon exercise or conversion of the warrants (the
"Warrants") and notes (the "Notes") issued pursuant to the 2017
Financings. Words and phrases such as "believe", "goal", "ongoing",
"potential", "on track", "plan", "initiating", "may", "intends",
"expect", "could", "continue" and "will", and similar words or
expressions, are intended to identify these forward-looking
statements. Forward-looking statements are based on estimates
and assumptions made by the Company in light of its experience and
its perception of historical trends, current conditions and
expected future developments, as well as other factors that the
Company believes are appropriate in the circumstances. Many
factors and assumptions could cause the Company's actual results,
performance or achievements to differ materially from those
expressed or implied by the forward-looking statements, including,
without limitation, the substantial doubt about the Company's
ability to continue as a going concern; risks relating to the
Warrants and Notes issued pursuant to the 2017 Financings,
resulting in significant dilution to the Company's shareholders;
risks relating to the Company's need for significant additional
future capital and the Company's ability to raise additional
funding; risks relating to cashless exercise and adjustment
provisions in the Warrants and Notes issued pursuant to the 2017
Financings, which could make it more difficult and expensive for
the Company to raise additional capital in the future and result in
further dilution to investors; risks relating to the sale of a
significant number of common shares of the Company; risks relating
to the exercise of Warrants or conversion of Notes issued pursuant
to the 2017 Financings, which may encourage short sales by third
parties; risks relating to the possibility that the Company's
Common Shares may be delisted from the Nasdaq or the TSX, which
could affect their market price and liquidity; risks relating to
the Company's Common Share price being volatile; risks relating to
the influence of significant shareholders of the Company over the
Company's business operations and share price; risks relating to
the Company's significant indebtedness, and its effect on the
Company's financial condition; risks relating to claims by third
parties alleging infringement of their intellectual property
rights; risks relating to lawsuits that the Company is subject to,
which could divert the Company's resources and result in the
payment of significant damages and other remedies; the Company's
ability to establish, maintain and defend intellectual property
rights in the Company's products; risks relating to results from
clinical trials of the Company's products, which may be unfavorable
or perceived as unfavorable; the Company's history of losses and
significant accumulated deficit; risks associated with product
liability claims, insurance and recalls; risks relating to use of
the Company's products in unapproved circumstances, which could
expose the Company to liabilities; risks relating to competition in
the medical device industry, including the risk that one or more of
the Company's competitors may develop more effective or more
affordable products; risks relating to the Company's ability to
achieve or maintain expected levels of market acceptance for the
Company's products, as well as the Company's ability to
successfully build its in-house sales capabilities or secure
third-party marketing or distribution partners; the Company's
ability to convince public payors and hospitals to include the
Company's products on their approved products lists; risks relating
to new legislation, new regulatory requirements and the efforts of
governmental and third-party payors to contain or reduce the costs
of healthcare; risks relating to increased regulation, enforcement
and inspections of participants in the medical device industry,
including frequent government investigations into marketing and
other business practices; risks associated with the extensive
regulation of the Company's products and trials by governmental
authorities, as well as the cost and time delays associated
therewith; risks associated with post-market regulation of the
Company's products; health and safety risks associated with the
Company's products and industry; risks associated with the
Company's manufacturing operations, including the regulation of the
Company's manufacturing processes by governmental authorities and
the availability of two critical components of the Reducer; risk of
animal disease associated with the use of the Company's products;
risks relating to the manufacturing capacity of third-party
manufacturers for the Company's products, including risks of supply
interruptions impacting the Company's ability to manufacture its
own products; risks relating to the Company's dependence on limited
products for substantially all of the Company's current revenues;
risks relating to the Company's exposure to adverse movements in
foreign currency exchange rates; risks relating to the possibility
that the Company could lose its foreign private issuer status under
U.S. federal securities laws; risks relating to breaches of
anti-bribery laws by the Company's employees or agents; risks
associated with future changes in financial accounting standards
and new accounting pronouncements; risks relating to the Company's
dependence upon key personnel to achieve its business objectives;
the Company's ability to maintain strong relationships with
physicians; risks relating to the sufficiency of the Company's
management systems and resources in periods of significant growth;
risks associated with consolidation in the health care industry,
including the downward pressure on product pricing and the growing
need to be selected by larger customers in order to make sales to
their members or participants; risks relating to the Company's
ability to successfully identify and complete corporate
transactions on favorable terms or achieve anticipated synergies
relating to any acquisitions or alliances; risks relating to the
Company's ability to successfully enter into fundamental
transactions as defined in the Series C warrants issued pursuant to
the 2017 Financings; anti-takeover provisions in the Company's
constating documents which could discourage a third party from
making a takeover bid beneficial to the Company's shareholders; and
risks relating to conflicts of interests among the Company's
officers and directors as a result of their involvement with other
issuers. These risk factors and others relating to the Company are
discussed in greater detail in the "Risk Factors" sections of the
Company's Annual Information Form, which has also been filed on
Form 6-K with the United States Securities and Exchange Commission
(copies of which filings may be obtained at
www.sedar.com or www.sec.gov). These
factors should be considered carefully, and readers should not
place undue reliance on the Company's forward-looking statements.
The Company has no intention and undertakes no obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by
law.
SOURCE Neovasc Inc.