Dr. James Timourian reports

INNOVOTECH REPORTS THIRD QUARTER 2015 FINANCIAL RESULTS

Innovotech Inc. has released its unaudited financial and operational results for the quarter ended Sept. 30, 2015.

Highlights:

• Continued cost reductions initiated in 2014 led to a significant reduction in the losses incurred in the first three quarters of 2015 compared with those in the same quarters in 2014;
• MBEC plate sales are almost double in the third quarter of this year compared with the same quarter in 2014;
• 11 per cent of the contract research revenues in quarter is from new clients.

"Contract research revenues have not increased as desired, because of some client cancelations and postponements, but we are especially pleased that 11 per cent of the revenue in the latest quarter comes from new clients," said general manager Dr. Amin Omar. "Careful control of costs and R&D [research and development] expenditures has significantly reduced losses. Meanwhile an increase in plate sales has affirmed the usefulness of the product and technology for those seeking to investigate or validate antimicrobial claims."

            FINANCIAL SUMMARY

                  Q3 2015         Q3 2014
Gross
revenue          $185,513        $135,913
R&D
expense            58,022          91,681
Net
income           
(loss)            (47,135)       (132,993)
Net
income
(loss)             
per 
share               (0.00)          (0.00)

Revenues

In the three-month period ended Sept. 30, 2015, total revenues were $185,513 (2014 -- $183,804). This included contract research revenue of $120,745 (2014 -- $102,269) and product sales of $64,768 (2014 -- $33,644). In the nine-month period ended Sept. 30, 2015, total revenues were $544,533 (2014 -- $530,983).

General and administrative expense

In the three-month period ended Sept. 30, 2015, general and administrative expense, including stock-based compensation expense and allocated amortization expense, was $104,597 (2014 -- $128,703). In the nine-month period ended Sept. 30, 2015, general and administrative expenses were $344,383 (2014 -- $411,292). The reduction of expenses is a result of various cost saving measures initiated during 2014, including staff reductions and reduction of office rent.

Research and development

In the three-month period ended Sept. 30, 2015, research and development expense, including allocated amortization and patents costs, was $58,022 (2014 -- $91,681). The cost was partially offset by various grants of $7,398 (2014 -- $32,917). In the nine-month period ended Sept. 30, 2015, research and development expense was $202,209 (2014 -- $345,030). The decrease in costs is mainly attributed to the freeze of agricultural programs in favour of the development of the InnovoSIL product line.

Liquidity and capital resources

At Sept. 30, 2015, the company had $14,314 in cash compared with $4,795 at Dec. 31, 2014.

Disciplined investment in development in the company's lead products, an increase in revenues during the fourth quarter 2014 and the increase in deferred revenues for future projects have contributed to an increase in cash reserves.

At present, the company's expenses are in excess of its revenue, thereby creating year-to-date losses that have accumulated since the company's inception. However, the loss for the nine-month period ended Sept. 30, 2015, is 46 per cent lower than that in 2014.

We seek Safe Harbor.