Edmonton, Alberta, Canada
March 27, 2013
Innovotech Inc. (TSX VENTURE:IOT), a pioneer in the field of biofilm product development, today announced its audited financial and operational results for the year ended December 31, 2012.
Highlights of the Year:
-
Further progress in the development of the exciting InnovoSIL(TM) antibacterial wound care and medical device coating compound
- Expansion of novel InnovoSCEPT(TM) veterinary test kit product line
During the year Innovotech continued its development of the proprietary InnovoSIL(TM) antibacterial product. Hospital acquired infections have a major patient and financial impact, and InnovoSIL has the potential to reduce one of the major contributors, infections spread by medical devices. Innovotech has demonstrated that InnovoSIL has a high level or performance, in effectiveness, in persistence of activity, and in ability to maintain its performance even in the presence of blood and other bodily fluids. The Company incorporated InnovoSIL(TM) into a number of medical device materials including titanium, plastics and silicone. Product prototypes are now being evaluated by a number of medical device companies. Wound care applications are also being evaluated.
The InnovoSCEPT(TM) veterinary test kit line was expanded during the year to include a wider range of bacteria that can be tested as well as antibiotics and combinations of antibiotics. This will expand the market for the kits as they will supply more and better information to aid veterinarians in dealing with chronic pet infections. A substantial portion of the new product development was completed in the year, so that the kits will be available for sale in 2013. As InnovoSCEPT represents a new approach to treating infections, Innovotech recognizes that an educational period is required prior to full-fledged adoption of InnovoSCEPT. The Company therefore has moderate sales expectations during this educational period.
"InnovoSIL(TM) has captured the interest of a number of medical device companies who have commented that they have not seen silver products with such a high level of performance" says Ken Boutilier, Innovotech's CEO. "Given the economic and emotional impact that hospital- acquired infections are causing in our healthcare systems we are truly excited about the opportunities that this product line creates in reducing these infections."
Financial Summary
($) Year ended December 31, 2012 Year ended December 31, 2011
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Revenues 868,590 1,087,905
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G&A 1,078,919 1,098,577
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R&D 1,084,092 1,100,567
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Net loss (1,497,723) (1,176,899)
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Share Price 0.305 0.74
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Cash position 447,469 495,275
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Revenues
In the year ended December 31, 2012, total revenues were $868,590 (2011 - $1,087,905; 2010 - $1,595,052). This included contract research revenue of $706,260 (2011 - $935,990; 2010 - $1,431,975) and product sales of $162,330 (2011 - $151,915; 2010 - $103,077). Revenue in contract research decreased because a drop off in activity from key existing clients. Increased marketing efforts, while improving sales in the second half of 2012 did not have a sufficient impact to achieve 2011 sales.
General and Administrative Expense
In the year ended December 31, 2012, general and administrative expense, including stock based compensation expense and allocated amortization expense, was $1,078,918 (2011 - $1,098,577). While some G&A expenses have decreased due to cost saving measures ("salaries & benefits" have decreased by 14%), other less discretionary expenses.
Research and Development
In the year ended December 31, 2012, research and development expense, including allocated amortization and patents costs, was $1,084,092 (2011 - $1,100,567). The cost was partially offset by various grants of $385,582 (2011 - $499,060). The company retained activities in research and development of products in human/veterinary susceptibility testing and Agress(R), while initiating extensive chemistry work on the InnovoSIL(TM) platform.
Liquidity and Capital Resources
At December 31 2012, the Company had $447,469 in cash compared to $495,275 at December 31, 2011. Continued investment in development and marketing of InnovoSCEPT(TM) and InnovoSIL(TM) has contributed to a decrease in cash reserves since December 31, 2011. These expenditures were partially offset by the proceeds from the private placements initiated in 2012, as well as by cash inflows from product sales, contract research revenue and various grants. The Company will continue with a high level of activity to increase contract research and product sales revenue in 2013 as seen with an increased number of purchase orders already in place with clients.
Innovotech's audited Financial Statements for the year ended December 31, 2012 and Management's Discussion and Analysis will be filed on The System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
Annual General Meeting
Innovotech's Annual General Meeting of Shareholders will be held on April 30, 2013 at 10:00am (Edmonton time) in the Windsor Room, 3rd Floor, Conference Centre, Manulife Place, 10180 - 101 Street, Edmonton, Alberta, T5J 3S4.
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