Innovotech Inc.
TSX VENTURE : IOT

Innovotech Inc.

August 28, 2013 16:25 ET

Innovotech Reports Second Quarter 2013 Financial Results and Change of Board Chairmanship

EDMONTON, ALBERTA--(Marketwired - Aug. 28, 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 June 30, 2013.

Highlights:

  • Change of Board Chairmanship
  • Modest quarterly net income
  • Strong sales revenue and reduced expenses in the half year
  • Focused R&D programs advance milestones

Kerry Brown has resigned as a member of the Board of Directors of Innovotech. He was replaced as Chairman of the Board on August 27, 2013 by Dr. James Timourian. Dr. Timourian has served on the Innovotech board for many years and brings a wealth of experience in growing and financing technology companies. He has invested in and served on the boards and management teams of many companies in his career.

The net income achieved in the quarter resulted from a number of factors such as, increased contract research revenue at an increased profit margin, increased product sales, decreased operating expenses and accrual of SR&ED credits. "We are pleased with the improved financial results in the quarter," says Ken Boutilier, Innovotech's CEO. Subsequent to the period end, the Company had $212,978 in cash on hand, $161,038 in accounts receivable and $270,812 in accounts payable at August 26, 2013.

"Development work continued on the veterinary InnovoSCEPT™ combination antibiotic panel with the development team reporting that several combinations had shown effectiveness against previously resistant bacterial strains," continued Boutilier.

Faced with the growing threat of hospital-acquired infections, more medical device companies are showing an interest in testing and developing InnovoSIL™-1 as an antimicrobial coating for medical devices. Innovotech has broadened its scope of companies to include orthopedics (joints), veterinary and surgical device companies. The Company sees an equally large opportunity in the wound care market.

Financial Summary


($)
Three-month
period ended
June 30, 2013
Three-month
period ended
June 30, 2012
Six-month
period ended
June 30, 2013
Six-month
period ended
June 30, 2012
Revenues
374,752

129,834

538,179

302,829
G&A
236,116

248,712

465,507

546,698
R&D
122,950

315,975

332,049

553,694
Net income (loss)
8,908

(445,059)

(345,486)

(840,053)
Share Price
-

-

0.27

0.37
Cash position
-

-

43,934

409,185

Revenues

In the three-month period ended June 30, 2013, total revenues were $374,752 (2012 - 129,834; 2011 - $138,612). This included contract research revenue of $329,629 (2012 - $111,989; 2011 - $115,287) and product sales of $45,123 (2012 - 17,845; 2011 - 23,325).

In the six month period ended June 30, 2013, total revenues were $538,179 (2012 - 302,829; 2011 - 431,457).

General and Administrative Expense

In the three-month period ended June 30, 2013, general and administrative expense, including stock based compensation expense and allocated amortization expense, was $236,116 (2012 - 248,712). In the six-month period ended June 30, 2013, general and administrative expenses were $465,507 (2012 - 546,698). The reduction of G&A expense is a result of various ongoing cost saving measures.

Research and Development

In the three-month period ended June 30, 2013, research and development expense was $122,950 (2012 - $315,975). The cost was partially offset by various grants of $86,480 (2012 -$32,850). In the six-month period ended June 30, 2013, research and development expense was $332,049 (2012 - 553,694). The decrease in costs is mainly attributed to the freeze of agricultural programs in favour of the development of InnovoSIL™ and the InnovoSCEPT™ product line.

Liquidity and Capital Resources

At June 30, 2013, the Company had $43,934 in cash compared to $447,469 at December 31, 2012. Continued investment in development in the Company's lead products has contributed to a decrease in cash reserves over the past year. Since several large projects were completed late in the period, the cash position does not reflect the increase in sales.

Subsequent to the period end, the Company had $212,978 in cash on hand, $161,038 in accounts receivable and $270,812 in accounts payable at August 26, 2013.

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.

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™, InnovoSIL™, bioFILM PA™ InnovoSCEPT™-Human and InnovoSCEPT™-Veterinary tests. The MBEC Assay™ is a high throughput biofilm growth device that was recently approved as an ASTM International standard. InnovoSIL™ is a family of silver-based antimicrobials promising superior performance for medical device coatings, bioFILM PA™ and InnovoSCEPT™-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™-Veterinary tests are designed to determine the most effective antibiotic treatment for chronic infections in both large and small animals. Agress® and AgreGuard™ are unique, environmentally friendly seed treatments and plant sprays designed to protect crops against both bacterial and fungal infections. Agress® is entering the regulatory approval stage.

This document may contain forward-looking statements that are predictive in nature and subject to risks and uncertainties that cannot be predicted or quantified; consequently, actual results may differ materially from past results and those expressed or implied by any forward-looking statements. Factors that could cause or contribute to such risks or uncertainties include, but are not limited to: the regulatory environment including the difficulty of predicting regulatory outcomes; changes in the value of the Canadian dollar; the Company's reliance on a small number of customers including government organizations; fluctuations in operating results; government policies or actions; progress and cost of clinical trials; reliance on key strategic relationships; uncertainty related to intellectual property protection and potential costs associated with its defense; the Company's exposure to lawsuits and other matters beyond the control of management. Should known or unknown risks or uncertainties materialize, or should management's assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly make or update any forward-looking statements, except as required by applicable law.

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

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