Edmonton, Alberta, Canada
November 20, 2013
Innovotech Inc. (TSX VENTURE:IOT), an innovator in the field of biofilm product development, today announced its audited financial and operational results for the quarter ended September 30, 2013.
Highlights:
- Revenue increases by 11% for nine-month period compared to 2012.
- Losses reduced by 49% from previous nine-month period
- InnovoSIL(TM)-1 development allows pursuit of licensing and new product opportunities.
In the nine-month period ended September 30, 2013, total revenue increased to $713,575 compared to $644,860 in 2012 representing an 11% increase. Completion of work in the current contract pipeline will lead to 2013 annual revenue that is higher than the comparable figure for 2012.
Total net loss for the nine-month period decreased 49% compared to the previous year. The Company has reduced operating expenses and has tightly focused R&D costs.
"InnovoSIL(TM)-1 is at a stage in which licensing agreements and potential products are being actively pursued," says Ken Boutilier, Innovotech's CEO. "The continuing threat of hospital-acquired infections will force health systems and medical device companies to reconsider their current approaches and pursue more innovative products and services. Innovotech is well positioned to meet this need."
Financial Summary
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($) Three-month Three-month Nine-month Nine-month
period ended period ended period ended period ended
September 30, September 30, September 30, September 30,
2013 2012 2013 2012
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Revenues 175,396 342,031 713,575 644,860
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G&A 183,765 270,165 649,272 816,863
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R&D 140,067 264,037 472,116 817,731
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Net income (loss) (206,636) (235,302) (552,122) (1,075,354)
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Share Price 0.14 0.35
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Cash position 61,710 242,633
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Revenue
In the three-month period ended September 30, 2013, total revenues were $175,396 (2012 - $342,031; 2011 - $393,970). This included contract research revenue of $156,843 (2012 - $285,834; 2011 - $327,614) and product sales of $18,553 (2012 - $56,197; 2011 - $66,356). Higher product sales numbers in 2012 and 2011 were due to test sales of a preliminary version of the InnovoSCEPT veterinary panel. In the nine- month period ended September 30, 2013, total revenues were $713,575 (2012 - $644,860; 2011 - $825,428). Sales of the MBEC Assay were up 19% for the nine-months ended September 30, 2013 compared to the same period in 2012.
General and Administrative Expense
In the three-month period ended September 30, 2013, general and administrative expense, including stock based compensation expense and allocated amortization expense, was $183,765 (2012 - $270,165). In the nine-month period ended September 30, 2013, general and administrative expenses were $649,272 (2012 - $816,863).
Research and Development
In the three-month period ended September 30, 2013, research and development expense was $140,067 (2012 - $264,037). The cost was partially offset by various grants of $64,271 (2012 - $129,056). In the nine-month period ended September 30, 2013, research and development expense was $472,116 (2012 - $817,731). The decrease in costs is mainly attributed to the freeze of agricultural programs in favour of the development of InnovoSIL(TM) and the InnovoSCEPT(TM) product lines.
Liquidity and Capital Resources
At September 30, 2013, the Company had $61,710 in cash compared to $447,469 at December 31, 2012. Continued investment in development in the Company's lead products and slower growth than expected in revenue have contributed to a decrease in cash reserves over the past year.
The Company has a cash management plan in place that focuses on expanding revenue from its contract research business and limiting expenses to cover only critical activities.
As of November 19, 2013, the Company had $99,653 cash on hand, accounts receivable totaling $99,991 and accounts payable totaling $251,761.
If cash flow from operations is insufficient to cover planned expenditures, management will allocate available resources in such manner as deemed to be in the Company's best interest. This may result in a significant reduction in the scope of existing and planned operations.
Innovotech's second quarter 2013 Financial Statements and Management's Discussion and Analysis will be filed on The System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
Grant of Stock Options
In accordance with the policies of the TSX Venture Exchange, the Board of Directors has approved a grant of stock options to some of the Company's directors to purchase an aggregate of 110,000 common shares pursuant to its stock option plan in consideration of their expanded service to the Company. These options have an exercise price of $0.18 per common share which is $0.10 above the approximate average share price for the past month and expire on November 19, 2023.
About Innovotech Inc.:
Innovotech Inc. is an innovator in the field of biofilm product development, focused on providing innovative and practical solutions to medical, agricultural and industrial problems caused by microbial biofilms. Biofilms are organized communities of microorganisms that exist in virtually every natural environment and are responsible for a host of diseases in human health, animal health and agriculture. There are few products or regulatory standards, aside from those of Innovotech, designed specifically for biofilm-forming organisms.
Innovotech has a broad range of products that address the issue of biofilms within a number of different industries, including commercially available products in a variety of market segments; the MBEC Assay(TM), InnovoSIL(TM), bioFILM PA(TM) InnovoSCEPT(TM)-Human and InnovoSCEPT(TM)-Veterinary tests. The MBEC Assay(TM) is a high throughput biofilm growth device that was recently approved as an ASTM International standard. InnovoSIL(TM) is a family of silver-based antimicrobials promising superior performance for medical device coatings, bioFILM PA(TM) and InnovoSCEPT(TM)-Human are the first diagnostic tests to assist physicians in the selection of the most effective antibiotic treatment for patients with biofilm-based chronic infections, while the InnovoSCEPT(TM)-Veterinary tests are designed to determine the most effective antibiotic treatment for chronic infections in both large and small animals. Agress(R) and AgreGuard(TM) are unique, environmentally friendly seed treatments and plant sprays designed to protect crops against both bacterial and fungal infections. Agress(R) is entering the regulatory approval stage.
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