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"The chemical detection industry is a large, rapidly growing market thatspans across many commercial sectors, including industrial process control,homeland security, environmental monitoring and healthcare. Owlstone hasdeveloped next generation chemical detection products that are based onpatented and patent-pending, proprietary technology to port real-timedetection capabilities onto a silicon chip. Having successfully concluded thedevelopment of the core sensor, we are now developing and shipping product tomeet real-time chemical detection needs in a wide range of industries. Giventhe near completion of the Advance Nanotech restructuring, we are eager totake the reins and rigorously grow our opportunities with our unique chemicaldetection platform," commented Bret Bader, incoming CEO of Advance Nanotech,Inc.
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Mr. Bader continued, "Our goal for 2008 is to penetrate new and existingmarkets, continue to grow our patented intellectual property and buildsuccessful distribution partnerships. We have made progress in all threefronts thus far in 2008. With the core sensor built, our focus now is ondeveloping application specific interfaces that provide the end user with asuperior chemical detection product suited to their needs. In parallel, weare continuing to achieve milestones in the miniaturization and costoptimization of the surrounding electronics. This will enable us to provide afully integrated, reprogrammable, chemical detection system that will set thestandards for detection performance and system miniaturization. Our researchand engineering efforts are further enhancing our already profound valueproposition for existing chemical detection requirements and enabling newdeployment scenarios currently unachievable. In addition to these commercialmilestones, we are simultaneously continuing to right-size and reduce theoperating costs of the combined organization. We anticipate rising grossmargins during 2008 through both improvements to our manufacturing process aswell as increased contract volumes. In addition, we intend to make meaningfulimprovements to our balance sheet over the remainder of the year as we movetowards achieving cash flow profitability."
The Company reported revenues for the first quarter of approximately$671,000, a nearly four-fold increase from the revenues in the first quarterof 2007 of $140,000. The increase in first quarter revenues were the directresult of Owlstone shipping its Lonestar and Owlstone Vapor Generator productsalong with contracted, instructional and set-up services provided to customersand government grant revenue. As stated in previous guidance, the Companycontinues to expect to achieve $7.7 million in revenues for the current year.
The Company reported a net loss of $1.1 million in the three months endedMarch 31, 2008 compared to a net loss of $2.4 million for the comparableperiod in 2007, representing a decrease of $1.3 million, or 55 percent. In2008, the Company had a net loss of $0.03 cents per basic share, compared witha net loss of $0.07 cents per basic share for the same quarter in 2007.Revenue increased by $531,000 while operating expenses decreased by $300,000and the Company had a gain of $534,000 from minority interest related tosubsidiaries' losses.
Operating expenses during the first quarter of 2008 totaled approximately$2.8 million, a decrease of approximately 10 percent ove
