Date: Jan 01, 2010 Source: NASDAQ SPO filings (
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We are a medical device company engaged in the research, development, and
commercialization of an ultrasound breast imaging system. We developed a unique
ultrasound technology platform, known as the Warm Bath Ultrasound imaging
system ("WBU"), which utilizes computational software to produce high
resolution images and unique information about the bulk properties of tissues
in the breast. WBU is a flexible, automated breast imaging system that produces
images using both reflection and transmission properties of ultrasound. The
images produced by WBU are unique, three-dimensional, whole breast images and
are expected to provide radiologists, surgeons and oncologists with an
effective imaging tool for managing diagnostic imaging of the breast.
The WBU system produces three unique images based on both traditional B-mode
(reflective) and transmission ultrasound. Traditional reflection ultrasound
images are created from the reflected sound waves and transmission ultrasound
images are created using the data that are generated as the sound waves travel
through the breast tissue. In particular, WBU uses proprietary, patented
software algorithms that utilize the mathematics of inverse scattering to
produce transmission images of the speed and attenuation of sound through the
breast. The WBU imaging platform also incorporates a three-dimensional version
of B-mode ultrasound (or reflective ultrasound). The reflection images are
refraction corrected by utilizing the transmission data—the speed of
sound—traveling through human breast tissue. We believe that the unique
combination of these refraction corrected reflection images into a three-
dimensional volume will provide physicians with a new way of viewing and
interpreting ultrasound images, especially when combined with the quantitative
information about the bulk tissue properties of the breast provided by the
numerical transmission data.
We are developing support for clinical users of the WBU system through the
TechniScan Imaging Network ("TIN"), which is a suite of tools and applications
designed to enhance the value and capabilities of the system. We believe that
TIN will offer a reliable and secure method of providing physicians,
administrators, payers and patients with timely access to their diagnostic
studies and reports, while ensuring that all data is disclosed only to those
with permission to access it. TIN is expected to optimize the use of diagnostic
information by healthcare providers by providing a common platform to store,
archive, correlate, analyze and/or collaborate about cases, giving the
physician ultimate control of the diagnostic process. We believe that TIN will
also allow healthcare professionals a flexible, fully customizable, environment
in which they can develop and store their own data or access anonymized data
from other related images.
We have not yet begun selling our product or services commercially. We plan to
enter markets in both the United States and Europe during 2011. We anticipate
installing initial WBU systems on a subscription basis in the United States
beginning the first half of 2011, with commercial release of the WBU and TIN
in the second half of 2011. We expect that the WBU system will be marketed as
a B-mode (i.e. handheld) and automated reflection tomography ultrasonic system
for imaging of a patient's whole breast. We plan to commercialize our products
to aid in the detection of breast cancer and to further expand our services in
the same market. We believe that our technology provides a painless and
efficient imaging method, that does not require breast compression or ionizing
radiation. The procedure also provides unique information which may help
radiologists differentiate cancerous from benign and normal tissues. We plan
to enter our product into the breast cancer screening and detection market as
a diagnostic device that would initially be used by radiologists, physicians,
hospitals and screening centers as an adjunct to mammography to provide them
with additional information that may influence decisions relating to the need
for further invasive or surgical testing, examination, and/or treatment for
lesions or tumors.
We expect that TIN will provide us with a recurring revenue stream, allowing
us to charge for system use in the United States on a subscription basis. We
also plan to sell TIN as a subscription service in Europe through a
third-party sales channel. TIN is being developed as an "open ended development
system" that allows users, researchers, and other software developers to
integrate their own applications through our network, providing us with
significant development resources and continuing access to new applications.
It is designed to allow them to archive and retrieve, compare images to other
similar data sets, store their own images and diagnostic notes, collaborate
with others, and correlate information with diagnostic results and outcomes.
Our technology was developed through years of research supported, in part, by
federal research grants and private and government research contracts. To date,
our revenues have been from government grants that supported research and
development of the WBU system and from the shipment of two prototype systems
to Esaote S.p.A. ("Esaote"), an Italian medical equipment manufacturer, and
also a stockholder of ours.
Pursuant to United States Food and Drug Administration ("FDA") regulations, we
must obtain either a 510(k) clearance or pre-marketing approval ("PMA") prior
to marketing our products in the United States. The WBU system will only be
cleared for marketing in the United States upon receipt of a letter from the
FDA which finds the WBU system to be substantially equivalent ("SE"), or upon
PMA. We intend to submit a 510(k) or PMA application to the FDA by the end of
2010 for both the reflection and transmission elements of the WBU system. The
clinical work to establish and support the clinical utility of the system is
already underway at three luminary breast screening facilities: the Mayo
Clinic Breast Center in Rochester Minnesota, the University of California
Moores Cancer Center in La Jolla, California, and the University of Freiburg
Women's Center in Freiburg Germany. We anticipate that the FDA will issue a
final ruling on our application for the WBU system sometime in the first half
of 2011, although there can be no assurance of the timing of this ruling.
In order to sell products within the European Union ("EU"), companies are
required to achieve compliance with the European Union Medical Device Directive
and affix a "CE" mark on their products to demonstrate such compliance. The
"CE" mark is a mandatory conforming mark on many products marketed in the EU.
It certifies that a product has met EU consumer safety, health and/or
environmental requirements. We have performed compliance testing for CE mark
certification. Based on our compliance testing, two modifications need to be
made to bring the WBU system into compliance. We anticipate that those
modifications will be completed during the first half of 2011.
Since inception, we have incurred net operating losses. As of June 30, 2010,
we had an accumulated deficit of approximately $29.4 million and negative
working capital of $4.9 million. Losses have principally occurred as a result
of the substantial resources required for research and development and
clinical trials required to develop the WBU system for FDA approval and market
launch. Losses have also been incurred from general and administrative
expenses associated with our operations. We expect operating losses to
continue, mainly due to the anticipated expenses associated with the
regulatory approval process and proposed commercialization of our technology,
research and development. We will also need to increase our selling and
marketing activities and general and administration expenses to market and
sell the WBU system in the United States and overseas after approval is
obtained.
Our continuing losses, among other things, have caused our independent
registered public accounting firm to add an explanatory paragraph to its audit
report on our 2009 and 2008 financial statements indicating that there is
substantial doubt about our ability to continue as a going concern. Although
we are focused on our research, development, and commercialization of the WBU
system, there can be no reasonable assurances that such efforts will result in
the establishment of predictable and scalable sources of revenue.
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TechniScan, Inc. ("we," "us," the "Company" and "TechniScan") was incorporated
under the name Castillo, Inc. pursuant to the laws of the State of Nevada on
February 2, 2007, and changed our state of incorporation from the State of
Nevada to the State of Delaware on October 8, 2009. Until the Merger
(described below), we had no substantial business operations and no revenues.
On October 9, 2009, TechniScan, Inc, a Utah corporation ("TechniScan Utah") was
first merged into our wholly owned subsidiary, and then immediately merged into
us (collectively referred to as the "Merger"). Pursuant to the Merger, we
succeeded to the business of TechniScan Utah as our sole line of business and
changed our name to "TechniScan, Inc."
Our principal offices are located at 3216 South Highland Drive, Salt Lake City,
Utah 84106 and our telephone number is (801) 521-0444. Our primary website is
www.tsni.com .
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