EX-99.1 2 slxcf_991.htm PRESS RELEASE slxcf_991.htm
EXHIBIT 99.1
 
 
 
Press Release
Source: Stellar Pharmaceuticals Inc.
 
Stellar Pharmaceuticals Reports First Quarter 2011 Financial Results
 
LONDON, ONTARIO — May 16, 2011 -- Stellar Pharmaceuticals Inc. (OTCQB:SLXCF) ("Stellar" or "the Company"), a Canadian pharmaceutical developer and marketer of high quality, cost-effective products for select health care markets, today announced financial results for the quarter ended March 31, 2011.  In this press release, all dollar amounts are expressed in Canadian currency and results are reported in accordance with United States generally accepted accounting principles (U.S. GAAP).
 
For the three month period ended March 31, 2011, Stellar's total revenues were $634,000 as compared to $577,900 for the same period in 2010.  The Company noted that the increase in total revenues was driven by a 52.2% growth in product sales to international markets, while the Canadian market sales experienced a 1.7% decrease in product sales.  Gross margin as a percentage of sales increased to 73.0% for the quarter end March 31, 2011, from 64.7% for the same period ended March 31, 2010.
 
Operating expenses for the first quarter of 2011, increased $161,100, to $769,000 compared with $607,900 for the first quarter of 2010. In addition to increased business development expenses, factors also contributing to the increase in operating expenses were several non-cash transactions.  These non-cash transactions included the following:

●  
share option expense in the first quarter of 2011 of $63,800, (includes $21,700 related to options which fully vested upon the retirement of an officer of the Company) compared to $33,900 during the same period in 2010;
●  
amortization expense in the first quarter of 2011 of $12,100 compared to $26,800 during the same period in 2010;
●  
warranty liability expense in the first quarter of 2011 of $39,300 related to the re-valuation of warrants, compared to $nil during the same period in 2010; and
●  
foreign currency exchange expense in the first quarter of 2011 of $45,600, compared to $20,200 during the same period in 2010.
 
Net loss from continuing operations for the three month period ended March 31, 2011 was $302,900 or $0.01 per share, compared to $247,500 or $0.01 per share in the first quarter of 2010.
 
At March 31, 2011 the Company had $3.7 million in cash and cash equivalents, a decrease of $0.6 million over the December 31, 2010 balance of $4.4 million. The primary reason for the decrease was a $0.4 million retirement payout to an executive office of the Company.
 
Arnold Tenney, Stellar's President and Chief Executive Officer, commented, "Stellar ended the first quarter of 2011, in a strong financial position, with an increase of 9.7% in total revenues,  no short or long tem debt and working capital of $4.5 million. We continue to evaluate all opportunities at supporting growth and improving our position both in Canada and international markets.”
 
 
 
 
 
Stellar Q1 2011 Results
Page 2 of 5
 
About Stellar Pharmaceuticals Inc.
 
Stellar has developed and is marketing direct in Canada, and in countries around the world through out-license agreements, three products based on its core polysaccharide technology: NeoVisc® and NeoVisc® Single Dose, for the symptomatic treatment of osteoarthritis; and Uracyst®, its patented technology for the treatment of interstitial cystitis (IC), an inflammatory disease of the urinary bladder wall. Both NeoVisc and Uracyst have their CE Mark certification for the European Community. Stellar also has an in-licensing agreement for NMP22® BladderChek®, a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer. For more information, please visit the company's website at www.stellarpharma.com.
 
Forward-Looking Statements
 
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the Company's business including increased competition; the ability of the Company to expand its operations, to attract and retain qualified professionals, technological obsolescence; general economic conditions; and other risks detailed from time to time in the Company's filings.
 

CONTACTS:

Company Contact                                                                                                

Arnold Tenney
President & CEO
Stellar Pharmaceuticals Inc.                                                                                                           
(519) 434-1540
email – arnoldt@stellarpharma.com
 
 
 
 
 
Stellar Q1 2011 Results
Page 3 of 5

STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM BALANCE SHEETS
(Expressed in Canadian dollars)
(Unaudited)
 
CURRENT
  
As at March 31,
2011
    
As at December 31,
2010
  
Cash and cash equivalents
  
$
3,738,181
    
$
4,352,285
  
Accounts receivable, net of allowance of $nil (2010 - $nil)
    
355,769
      
493,370
  
Inventories
    
795,775
      
611,676
  
Taxes recoverable
    
28,233
      
-
  
Loan receivable
    
15,814
      
15,814
  
Prepaids, deposits and sundry receivables
    
120,151
      
99,433
  
Total current assets
    
5,053,923
      
5,572,578
  
PROPERTY, PLANT AND EQUIPMENT, net
    
1,543,097
      
1,568,729
  
OTHER ASSETS
    
142,142
      
139,287
  
Total assets
  
$
6,739,162
    
$
7,280,594
  
LIABILITIES
                
CURRENT
                  
Accounts payable
  
$
106,854
    
$
236,420
  
Accrued liabilities
    
348,129
      
557,735
  
Deferred revenues
    
833
      
8,645
  
Product returns liability
    
112,500
      
112,500
  
Total current liabilities
    
568,316
      
915,300
  
                 
LONG TERM WARRANT LIABILITY
    
256,069
      
216,823
  
Total liabilities
    
824,385
      
1,132,123
  
                 
CONTINGENCIES AND COMMITMENTS
                
                 
SHAREHOLDERS’ EQUITY
                
CAPITAL STOCK
                
AUTHORIZED
                  
Unlimited Non-voting, convertible redeemable and retractable                                        
 
preferred shares with no par value
                
Unlimited Common Shares with no par value                
                   
ISSUED
                
24,585,040 Common Shares (2010 – 24,585,040)    
9,055,982
      
9,055,982
  
 
Shares to be issued
    
5,466
      
-
  
 
Additional Paid-in capital options - outstanding
    
213,293
      
211,781
  
 
Additional Paid-in capital options -  expired
    
795,740
      
733,517
  
       
10,070,481
      
10,001,280
  
DEFICIT
      
(4,155,704
)
    
(3,852,809
)
Total shareholders’ equity
    
5,914,777
      
6,148,471
  
Total liabilities and shareholders’ equity
  
$
6,739,162
    
$
7,280,594
  
 
 
 
 
Stellar Q1 2011 Results
Page 4 of 5

STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS AND DEFICITS
(Expressed in Canadian dollars)
(Unaudited)
 
   
For the Three Month Period
  
   
Ended March 31,
  
   
2011
    
2010
  
             
PRODUCT SALES
  
$
631,276
    
$
549,510
  
ROYALTIES & LICENSING REVENUE
    
2,766
      
28,369
  
TOTAL REVENUE FROM ALL SOURCES
    
634,042
      
577,879
  
COST OF PRODUCTS SOLD
    
171,396
      
203,757
  
GROSS PROFIT
    
462,646
      
374,122
  
EXPENSES
                
Selling, general and administrative
    
704,055
      
567,932
  
Change in warranty liability
    
39,246
      
-
  
Research and development
    
13,678
      
26,270
  
Amortization of assets (non-manufacturing property, plant and equipment)
    
12,062
      
13,663
  
     
769,041
      
607,865
  
LOSS FROM OPERATIONS
    
(306,395
)
    
(233,743
)
INTEREST AND OTHER INCOME
    
3,500
      
1,513
  
LOSS ON DISPOSAL OF EQUIPMENT
    
-
      
(15,308
)
NET LOSS  AND COMPREHENSIVE LOSS FOR THE PERIOD
    
(302,895
)
    
(247,538
)
                 
DEFICIT, beginning of period
    
(3,852,809
)
    
(4,378,517
)
DEFICIT, end of period
  
$
(4,155,704
)
    
(4,626,055
)
LOSS  PER SHARE                   - Basic and diluted
  
$
(0.01
)
  
$
(0.01
)
WEIGHTED AVERAGE NUMBER OF COMMON
                
SHARES  OUTSTANDING      - Basic and diluted
    
24,585,040
      
23,480,040
  

 
 
 
Stellar Q1 2011 Results
Page 5 of 5

 
STELLAR PHARMACEUTICALS INC.
CONDENSED INTERIM STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)
(Unaudited)
 
   
For the Three Month Period
  
   
Ended March 31,
  
   
2011
    
2010
  
CASH FLOWS USED IN OPERATING ACTIVITIES
            
Net loss
  
$
(302,895
)
  
$
(247,538
)
Items not affecting cash
                
Amortization
    
26,722
      
26, 785
  
Loss on disposal of equipment
    
––
      
15,308
  
Stock-based compensation
    
63,735
      
33,947
  
Change in warrant liability
    
39,246
      
––
  
Issuance of equity instruments for services rendered
    
5,466
      
––
  
Change in non-cash operating assets and liabilities
    
(442,435
)
    
(140,920
)
CASH FLOWS USED IN OPERATING ACTIVITIES
    
(610,161
)
    
(312,419
)
                 
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES
                
Additions to property, plant and equipment
    
––
      
(221,853
)
Increase in other assets
    
(3,943
)
    
(8,014
)
Proceeds from sale of equipment
    
––
      
12,630
  
CASH FLOWS USED IN INVESTING ACTIVITIES
    
(3,943
)
    
(217,237
)
                 
                 
CHANGE IN CASH AND CASH EQUIVALENTS
    
(614,104
)
    
(529,655
)
                 
CASH AND CASH EQUIVALENTS, beginning of period
    
4,352,285
      
2,325,212
  
CASH AND CASH EQUIVALENTS, end of period
  
$
3,738,181
    
$
1,795,557
  
 
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