For the quarter ended June 30, 2008, the net loss attributable to commonstockholders was $2,334,000, or $0.04 per share, compared to a net loss of$1,209,000, or $0.02 per share, for the corresponding period in 2007. Thesecond quarter 2008 net loss was impacted by non-cash expenses of $560,000,which included share-based compensation, amortization, and depreciation of$261,000, $269,000 and $30,000, respectively, whereas the second quarter 2007net loss included non-cash expenses of $405,000, which included share-basedcompensation, amortization, and depreciation of $119,000, $269,000 and$17,000, respectively.
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Income Statement
Revenues for the second quarter of 2008 were $96,000, compared with$119,000 for the same period last year. The decrease of $23,000 in revenuesis primarily attributable to a decrease in sponsored research of $35,000, asthe prior year revenue was non-recurring.
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Total costs and expenses, including amortization and depreciation,increased by $975,000 in the second quarter of 2008 to $2,508,000, as comparedwith the corresponding period in 2007 where total costs and expenses,including amortization and depreciation, were $1,533,000. The overall expenseincrease is primarily attributable to increases in Research and Development of$314,000 and increases in Selling, General and Administrative of $648,000.The increase in Research and Development expenses is attributed to additionalcosts in direct research for Altrazeal(TM) related products of $35,000 andOraDisc(TM) related products of $16,000, increases for our clinical testingprograms of $53,000, regulatory consulting and expenses of $66,000, andadditional scientific personnel costs, including share-based compensation, ofapproximately $145,000. The Selling, General and Administrative expenseincrease was comprised of administrative personnel costs of $299,000, which isinclusive of $134,000 of share-based compensation, along with increasedexpenses of $323,000 associated with the ramp-up of our initial sales andmarketing efforts for our wound care product line.
Interest and miscellaneous income decreased in the second quarter of 2008to $79,000 as compared with $206,000 for the same period in the previous year.The decrease of $127,000 is attributable to a decrease in interest income dueto lower cash balances and lower interest yields in 2008 versus prior year.
Balance Sheet
Cash and cash equivalents totaled $11,684,000 at June 30, 2008, a decreaseof $2,296,000 as compared to our cash and cash equivalents at December 31,2007 of $13,980,000. The decrease in net cash for the six months ended June30, 2008 was due primarily to the net cash used in operations of $1,781,000and the expenditure of $420,000 for manufacturing equipment purchasesassociated with our OraDisc(TM) and Altrazeal(TM) products.
Overview
Commenting on the financial results Kerry P. Gray, President and CEOstated, "With the exception of a delayed receipt of a milestone paymentassociated with a regulatory filing, our operating results were in line withour forecast projections. The increase in operating expenses are primarilyassociated with the commercialization and development of our Altrazeal(TM)range of products. To support the launch of Altrazeal(TM), we will continue toinvest in our sales and marketing efforts. These efforts are expected toestablish key opinion leader support and to develop our business in burn andwound care centers."
During the second quarter we achieved numerous important milestones toinclude;
In conjunction with strategic partners, advancements for of thedevelopment of wound care actives in Altrazeal(TM) continues. Additionally, wehave advanced the development of Altrazeal(TM) containing silver andanticipate
