Zila posts $1.5M loss, warns of bankruptcy without more funding - Pacific Business News (Honolulu):

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The Phoenix oral cancer diagnosticss company released itsfiscal third-quarter result s Tuesday, showing a loss of $1.5 million on $5 millionm in revenue for the three months endedc April 30. That compares with a $4.4 millio n loss on $6.8 million in revenue for the same perio din 2008. For the firsf nine months of 2009, Zila lost nearly $30 million on revenue of $15.6 compared with $14 million in losses on $20 million in In its quarterly filing withthe U.S. Securities and Exchang e Commission, Zila said revenue has been negatively impacted by the economt and because of customer concern abouyt its viability as anongoing business.
“Concerns about our financial viability have also contributed to an increasefd turnover in our field sales force and other key staf f areas and have led to a reductiom in our marketing effectivenesx and our reach to new andexisting customers,” the company said in its To stem the blood loss, Zila has continued salar reductions for a number of management reduced its field salesx force by 15 percent, eliminated its employee stock purchasre plan, furloughed certain manufacturing production personnel and reduced tradse show expenditures. Still, the decline in revenues means Zila has been cuttinvg into itscash reserves. As of April 30, the companyh had $3.
1 million in cash and cash comparedwith $2.5 million on Jan. 31, $3.2 millionn Oct. 31, 2008, and $4.5 milliob July 31, 2008. “In order to continue as a goinv concern and fund our current level of operations over the next 12 we will require additional funding and need to restructure or retirde our senior securedconvertiblr notes,” the filing reads. “If we are unablre to execute these strategies, we will likelyg be forced to file for protection under Chapte 11 of the Federal Bankruptcy Code or liquidatse the company under Chapter 7 of the FederalBankruptcy Code.
” In April, Zila transferred the listing of its commobn stock from the Nasdaq Global Marke t to Nasdaq’s Capital Market, continuing to tradwe under the symbol ZILA. This allowss the company to continue itslisting status, which it was in danget of losing because the stock price has failes to remain above $1 for the required The stock closed at 62 cents a share Tuesday. Its 52-weekj range is 3 centsx and $3.08 a share. The companty has morphed over the years, from selling Zilactihn cold cream medication and vitamin C products to focusw on cancer detection products marketed directlhyto dentists.
In May, company officials testifiex at a congressional hearing on innovative technologyfor veterans, urging legislators to pressx the U.S. Department of Veterans Affairs to expaned the useof Zila’s ViziLit Plus for veterans, who are at a highetr risk of oral cancer. Zila has a five-yead contract to market ViziLite Plus to 48 VA dental clinicd and 154 Department of Defensedental clinics.