Bradmer Pharmaceuticals records net loss of $117,000 for fourth quarter of 2010

Bradmer Pharmaceuticals Inc. ("Bradmer" or the "Company") today announced its 2010 fourth quarter and fiscal year operational and financial results. 

Operational Highlights

The Company announced today that it had entered into a letter of intent with P1 Energy Corp. dated February 9, 2011 to complete a business combination. P1 Energy is a private company based in Calgary, Alberta, with interests in 15 oil and gas properties located in Colombia. Upon completion of the transaction, the combined entity will carry on the business of P1 Energy, which is the exploration for, and development and production of, oil and gas in Colombia.

It is currently contemplated that the transaction will be completed by way of an amalgamation between Bradmer and P1 Energy (the amalgamated entity being referred to herein as the "Resulting Issuer"). The transaction is an arm's length transaction and will constitute a reverse take-over under the policies of the TSX Venture Exchange. It is anticipated that the Resulting Issuer will be named "P1 Energy Corp." or such other name as may be determined by P1 Energy.

Bradmer currently has 19,659,726 common shares issued and outstanding, as well as 499,000 stock options and 3,512,731 warrants (23,671,457 common shares on a fully-diluted basis). Under the amalgamation, the common shares of Bradmer will be exchanged for common shares of the Resulting Issuer on a 13.6364 for one basis (i.e., one common share of the Resulting Issuer will be issued in exchange for every 13.6364 common shares of Bradmer). The exchange ratio is based on a deemed price of CDN$0.22 per common share of Bradmer and a deemed price of CDN$3.00 per common share of P1 Energy.

P1 Energy currently has 146,413,171 common shares issued and outstanding, as well as 9,600,621 options, 4,583,500 performance warrants, 2,977,929 warrants, convertible debentures (convertible into 7,350,012 common shares, subject to adjustment depending on the date of completion of the Transaction) and obligations to issue up to 2,843,600 common shares pursuant to asset acquisition agreements (173,768,834 common shares on a fully-diluted basis). Under the amalgamation, each common share of P1 Energy will be exchanged for one common share of the Resulting Issuer.

All outstanding convertible securities of Bradmer and P1 Energy (including all outstanding options and warrants) will be exchanged, subject to regulatory approval, for convertible securities of the Resulting Issuer having economically equivalent terms and conditions.

Following the completion of the transaction (based on the outstanding share capital of each of Bradmer and P1 Energy as of the date hereof), approximately 147,854,880 common shares will be issued and outstanding (175,504,734 common shares on a fully-diluted basis). Bradmer shareholders will hold common shares representing approximately 1% of the outstanding common shares of the Resulting Issuer following the completion of the Transaction.

The letter of intent is non-binding with respect to commercial terms, but includes binding obligations typical in the circumstances, including those relating to a period of exclusive dealing and confidentiality. The proposed transaction is subject to a number of terms and conditions, including the entering into by the parties of a definitive agreement with respect to the transaction (such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature), the completion of satisfactory due diligence investigations, the approval of the directors of each of Bradmer and P1 Energy, the approval of the shareholders of Bradmer, the approval of the shareholders of P1 Energy and the approval of the TSX-Venture Exchange and other applicable regulatory authorities.

Financial Results

Amounts in US dollars, unless specified otherwise, and results expressed in accordance with Canadian Generally Accepted Accounting Principles (Canadian GAAP).

For the year ended December 31, 2010, the Company recorded a net loss of $467,000 or $0.03 per common share based on the weighted average outstanding shares of 14,682,445 during the year, compared to a net loss of $5,476,000 or $0.49 per common share for the year ended December 31, 2009 based on the weighted average outstanding shares of 11,157,746.  The decreased loss in 2010 related to the dormancy of the Company in 2010 as well as the reduction in the Company's staffing and administrative functions during 2009. 

Research and development expenses totalled $121,000 in fiscal 2010, compared to $2,326,000 in fiscal 2009. Patent maintenance expenses and related legal fees amounted to $80,000 in 2010.  The material components of research and development expenses in 2009 were drug manufacturing of $514,000 and clinical research organization charges of $658,000.  Compensation, severance and contractual termination costs for ten employees, all of whom were terminated, amounted to $754,000 in 2009.

General and administrative expenses were $386,000 in 2010 compared to $2,446,000 in the prior year.  There were no compensation costs in 2010 compared with $1,208,000 in 2009.  Compensation in 2009 included severance and contractual termination costs for eight employees.  The Chief Executive Officer continues to serve on a consultancy basis without cash compensation and the Chief Financial Officer continues to serve on a consultancy basis and receives a per diem fee.  Major expenses in 2010 consisted of consultant's fees of $143,000, legal fees of $69,000 and insurance premiums of $60,000.

Fourth Quarter Results

For the three-month period ended December 31, 2010, Bradmer recorded a net loss of $117,000, or $0.01 per common share based on the weighted average outstanding shares of 19,659,726.  This compares to a net loss of $800,000, or $0.13 per common share for the three months ended December 31, 2009 based on the weighted average outstanding shares of 6,026,627. 

Research and development expenses for the fourth quarter of 2010 were $72,000, compared with $36,000 in the same period of 2009. Patent maintenance expenses and related legal fees amounted to $65,000 in the fourth quarter of 2010.

General and administrative expenses were $85,000 in the fourth quarter of 2010, compared with $760,000 in 2009.

At December 31, 2010, the Company had working capital of $1,491,000, as compared to $810,000 at December 31, 2009.  Available cash was $1,525,000 at December 31, 2010, compared to $860,000 at December 31, 2009. The increase was primarily due to the two private placement financings offset by the operating loss incurred in the year.

As at February 10, 2011, there were 19,659,726 common shares, warrants to purchase 3,512,731 common shares and options to purchase 499,000 common shares outstanding.