Edmonton, Alberta, Canada
August 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 $270,812 in accounts payable at August 26, 2013.
"Development work continued on the veterinary InnovoSCEPT(TM) combination antibiotic panel with the development team reporting that several combinations had shown effectiveness against previously resistant bacterial strains," continued Boutilier.
Faced with the growing threat of hospital-acquired infections, more medical device companies are showing an interest in testing and developing InnovoSIL(TM)-1 as an antimicrobial coating for medical devices. Innovotech has broadened its scope of companies to include orthopedics (joints), veterinary and surgical device companies. The Company sees an equally large opportunity in the wound care market.
Financial Summary
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Three-month Three-month Six-month Six-month
period ended period ended period ended period ended
($) June 30, 2013 June 30, 2012 June 30, 2013 June 30, 2012
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Revenues 374,752 129,834 538,179 302,829
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G&A 236,116 248,712 465,507 546,698
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R&D 122,950 315,975 332,049 553,694
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Net income
(loss) 8,908 (445,059) (345,486) (840,053)
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Share Price - - 0.27 0.37
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Cash position - - 43,934 409,185
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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(TM) and the InnovoSCEPT(TM) 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(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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