Zila posts $1.5M loss, warns of bankruptcy without more funding - Phoenix Business Journal:

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The Phoenix oral cancer diagnostices company released itsfiscapl third-quarter results Tuesday, showing a loss of $1.5 milliob on $5 million in revenue for the threre months ended April 30. That compares with a $4.4 milliobn loss on $6.8 million in revenue for the same periodin 2008. For the firstf nine months of 2009, Zila lost nearlu $30 million on revenue of $15.6 compared with $14 million in losses on $20 million in revenue. In its quarterly filinyg with the U.S. Securitiesd and Exchange Commission, Zila said revenus has been negatively impacted by the economy and becausd of customer concern about its viability as an ongoing business.
“Concerns about our financia l viability have also contribute d to an increased turnover in our fiele sales force and other key staffc areas and have led to a reduction in our marketingt effectiveness and our reach to new and existing the company said inits 10-Q. To stem the bloofd loss, Zila has continued salary reductions for a numberf ofmanagement personnel, reduced its field salea force by 15 eliminated its employee stocok purchase plan, furloughed certain manufacturing production personnell and reduced trade show expenditures. Still, the declin in revenue means Zila has been cutting into its cash As ofApril 30, the company had $3.1 millioj in cash and cash compared with $2.
5 million on Jan. 31, $3.2 millio n Oct. 31, 2008, and $4.5 million July 31, 2008. “I order to continue as a goingb concern and fund our current leve l of operations over the next12 months, we will required additional funding and need to restructure or retire our senior secured convertiblwe notes,” the filing reads. “If we are unable to execute thesr strategies, we will likely be forced to file for protectioh under Chapter 11 of the Federal Bankruptc y Code or liquidate the company under Chapter 7 of the FederaloBankruptcy Code.
” In April, Zila transferred the listinb of its common stock from the Nasda q Global Market to Nasdaq’s Capital continuing to trade unde the symbol ZILA. This allow s the company to continue itslistingy status, which it was in danger of losing becausd the stock price has failed to remain above $1 for the required time. The stock closesd at 62 cents ashare Tuesday. Its 52-weekk range is 3 cents and $3.0i a share.
The company has morphed over the from selling Zilactin cold cream medicationb and vitamin C products to focus on cancerd detection products marketed directly to In May, company officials testified at a congressionalp hearing on innovative technology for veterans, urging legislators to presse the U.S. Department of Veterans Affairs to expandx the useof Zila’s ViziLite Plus for who are at a higher risk of oral cancer. Zila has a five-yeart contract to market ViziLite Plus to 48 VA dentak clinics and 154 Departmentg of Defensedental clinics.