Innovotech Inc.
TSX VENTURE : IOT

Innovotech Inc.

November 15, 2005 16:30 ET

Innovotech Announces Third Quarter, 2005 Unaudited Consolidated Financial Statements

EDMONTON, ALBERTA--(CCNMatthews - Nov. 15, 2005) - Innovotech Inc. (TSX VENTURE:IOT) today announced its unaudited consolidated financial and operational results for the three and nine month period ended September 30, 2005.

"We are very pleased that we achieved profitably in the current quarter. Sales more than doubled over the comparative period in the previous year. We look forward to continued progress in the balance of the year which will bring us closer to our goal of being a consistently profitable early stage biotechnology company" said Dr. James Timourian, CFO of Innovotech.



------------------------------------------------------------------------
Three month Three month Nine month Nine month
period ended period ended period ended period ended
September 30, September 30, September 30, September 30,
2005 2004 2005 2004
------------------------------------------------------------------------
Revenues 297,932 123,925 661,012 368,966
------------------------------------------------------------------------
G&A 143,213 102,367 471,227 207,410
------------------------------------------------------------------------
R&D 71,169 66,914 159,105 212,183
------------------------------------------------------------------------
Net Income
(Loss) 26,901 (224,622) (182,122) (322,683)
------------------------------------------------------------------------


Results of Operations

During the three month period ended September 30, 2005, the Corporation gained $40,584 as a result of its operations and at September 30, 2005 had $447,507 cash on hand.

In the three month period ended September 30, 2005, the Company incurred a net gain in the amount $26,901 (2004 - (224,622)). In the nine month period, the Company incurred a net loss of $182,122 (2004 - $322,683). The increase for the three month period resulted from increased revenues and a decrease in G&A costs. In the nine month period, the decrease in the net loss from the previous year resulted from increased revenues. This was offset by increased G&A costs due to increased salary costs in the subsidiary MBEC, professional fees, travel costs and an expense of $31,120 for an employee and director grant of stock options.

Revenues

In the three month period ended September 30, 2005, total revenues were $297,932 (2004 - $123,925). In the nine month period, revenues were $661,012 (2004 - $368,966). This consisted of contract research fees - $507,033 (2004 - $334,880), product sales - $83,674 (2004 - $34,086) and grant revenue $70,305 (2004 - nil). The increase in sales is due to continued growth of the current client base, expansion of the business into industrial markets with a 113% increase in contract revenue, and a 103% increase in the sale of the "MBEC Assay™."

Innovotech earned $1,849 (2004 - $1,292) in interest revenue during the three month period ended September 30, 2005. In the nine month period, interest was $6,433 (2004 - $7,727). The decrease in interest received in the nine month period is attributable to the use of cash to support operations.

Direct Costs

Direct costs for the three month period ended September 30, 2005 were $43,418 (2004 - $64,423). Direct costs for the nine month period were $142,279 (2004 - $157,826). The decrease in costs from the previous year are due to improvements to internal systems resulting in tighter cost control.

General and Administrative

In the three month period ended September 30, 2005, general and administrative expense was $143,213 compared to $100,200 in 2004. In the nine month period, expense was $471,227 (2004 - $207,410). The increase for the three and nine month period is directly related to increased costs for personnel, professional costs and travel costs related to promoting MBEC products and services. An expense of $31,120 was recorded for the currently vested stock option grant. This non-cash expense has been recorded in compliance with the latest accounting principles.

Research & Development

For the three month period ended September 30, 2005, research and development expense was $71,169 (2004 - $66,914). In the nine month period, the expense was $159,105 (2004 - $212,183). The decrease for the nine month period relates to timing differences in allocation of costs to research and development in the previous year. The Company expenses research and development costs in the year that costs are incurred, unless development costs meet generally accepted accounting criteria for deferral and amortization. The Company has not deferred any research and development expense to date.

Amortization

For the three month period ended September 30, 2005, amortization was $15,080 (2004 - $5,694). In the nine month period amortization was $$45,836 (2004 - $11,516). The increase relates to amortization of costs incurred in pursuing patents, acquiring license agreements and the purchase of computers and laboratory equipment.

On January 11, 2005, the TSX Venture Exchange approved the private placement of 1,111,111 of common shares in Innovotech Inc. at $ 0.18 per share for total proceeds of $200,000 by First Yellowhead Equities Inc.

Innovotech Inc. is a public company focused on acquiring novel technologies or promising technology based companies with an existing or imminent revenue stream. In addition to financial investment in these technologies, Innovotech provides management and technology commercialization expertise.

Certain information contained in this document is forward-looking and is subject to unknown risks or uncertainties. The actual results, performance or achievements of Innovotech Inc. and/or its subsidiary MBEC Bioproducts Inc. may differ materially from the results, performance or achievements expressed or implied by such forward-looking statements.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Innovotech Inc.
    Dr. Gerard Tertzakian
    CEO
    (780) 448-0585
    (780) 424-0941 (FAX)
    or
    MBEC Bioproducts Inc.
    Ken Boutilier
    President
    (780) 425-7717
    (780) 424-0941 (FAX)
    Email:ken.boutilier@mbec.ca
    Website: www.mbec.ca