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Aptilon Corporation (TSX-V: APZ) review and analysis

Contributed by eResearch

By eResearch

Aptilon’s revenues for Q2/2010 were up 179% over Q2/2009, at $8.586 million compared with $3.076 million. The revenue increase reflects a broader base of customers, growth in the size of enterprise customer initiatives, and a contribution from assets purchased in 2009. Gross profit increased 138% in Q2/2010 to $5.448 million, compared with $2.286 million in Q2/2009.

The net loss for Q2/2010 was $305,787 compared with a net loss of $440,862 in Q2/2009. The Company generated positive cash flow from operations in Q2/2010 of $1.957 million, before a net change in non-cash working capital items of ($2.166 million). In the corresponding period of 2009, cash flow used in operating activities was ($16,324), before a net change in non-cash working capital items of ($544,573).

Commentary on First-Half/2010

For the first six months of 2010, Aptilon reported an increase in revenues of 177% over the corresponding six months of 2009, at $16.261 million compared with $5.878 million in the corresponding period of 2009. Gross profit increased 130% to $9.74 million for the first six months of 2010 versus $4.23 million for the same period in 2009. The net loss for the first half of 2010 decreased to $249,460 from a loss of $914,629 for the first half of 2009. Working Capital

At June 30, 2010, Aptilon’s working capital position included the short-term portion of a promissory note payable in connection with a business acquisition. Working capital totalled ($721,319), including cash and cash equivalents and restricted cash of $2.95 million. This compared to working capital of ($3.5 million), including cash and cash equivalents and restricted cash of $2.06 million, at December 31, 2009.

Outlook

Pharmaceutical, medical device and other health-care companies increasingly seek alternative sales and marketing solutions such as those offered by Aptilon over the Internet. Through the Company’s AxcelRxSM service offering and access to more than 550,000 health-care practitioners, Aptilon assists client companies, offering both increased reach and frequency.

THE COMPANY

Aptilon Corporation (“Aptilon” or the “Company”) provides a one-stop solution that allows healthcare marketers to effectively reach, engage, and interact with physicians and other health-care professionals over the Internet through its innovative AxcelRx(SM) live video platform. The Company’s Web-based solutions: (1) enable valuable interactions with physicians; (2) deliver promotional material in a controlled manner; and (3) provide immediate feedback and reporting analysis. Aptilon is based in Montreal, Quebec.

eResearch Analysts:

Shash Patel, B.Sc., MBA

Bob Weir, B.Sc., B. Comm., CFA