NEWS RELEASE TRANSMITTED BY CCNMatthews
FOR: INNOVOTECH INC.
TSX VENTURE SYMBOL: IOT
APRIL 22, 2005 - 13:23 ET
Innovotech Announces Consolidated Financial Results
for Year-Ended December 31, 2004
EDMONTON, ALBERTA--(CCNMatthews - April 22, 2005) - Innovotech Inc. (TSX
VENTURE:IOT) today announced its consolidated financial and operational
results for the year-ended December 31, 2004.
"The main objective of fiscal 2004, the Qualifying Transaction, was
completed on July 2, 2004 with the acquisition of MBEC BioProducts Inc.,
a biotechnology company with expertise and technology in growth, testing
and eradication of organized colonies of microorganisms, commonly called
biofilms. MBEC is now a wholly owned subsidiary of Innovotech whose
revenue substantially supports a promising research and development
effort in drug and biocide discovery." said Dr. James Timourian, CFO of
Innovotech.
Results of Operations
In the fiscal year ended December 31, 2004, the Company incurred a net
loss of $544,948 compared to a net loss of $222,121 in the previous
year-ended 2003. The increased loss in the amount $322,827 was mainly
the result of a one time $110,441 expense of deferred and current
acquisition costs, as a result of the Qualifying Transaction, increased
research and development activity, hiring of personnel and other general
and administrative activities required to support the operation of a
public company.
Innovotech earned $10,115 in interest revenue during the year ended
December 31, 2004, compared to $6,725 for the same period last year. The
increase in interest received is attributable to the funds received from
the public offering in 2003.
Revenues
In the year ended December 31, 2004 total revenue was $448,344 compared
to $201,744 in 2003. This included contract research fees - $374,050
(2003 - $193,693), product sales - $50,921 (2003 - $8,051) and grant
revenue - $23,373 (2003 - nil). The increase in revenue is due to
expansion of the contract research business into industrial markets,
continued growth of the current client base, the launch of a "MBEC
Assay(TM)" device in November 2003 and the application for grants to
support research and development.
Summary of Fourth Quarter
Innovotech's revenue for the three months ended December 31, 2004 was
$87,834. No comparative amounts are available for the same period in
2003.
Research and Development expense for the three month period was $35,668.
No comparative figures are available for the same period in 2003.
General and Administrative expense for the three month period was
$294,608. No comparative figures are available for 2003.
During the year-ended December 31, 2004, the Corporation used $364,139
to support its operations and at year- end had $406,923 cash on hand.
Subsequent to year end, 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.
/T/
Innovotech Inc.
Consolidated Balance Sheet
Audited
------------------------------------------------------------------------
2004 2003
$ $
Assets
Current assets
Cash and cash equivalents 406,923 771,062
Accounts receivable 55,819 74,561
Note receivable - 25,000
Goods and services tax recoverable 6,347 2,692
Prepaid expenses 6,503 89
-------------------------
475,592 873,404
Business acquisition costs - 62,148
Equipment 27,153 23,766
Patents and licenses 256,438 270,002
-------------------------
759,183 1,229,320
-------------------------
-------------------------
Liabilities
Current liabilities
Trade accounts payable and accrued liabilities 108,954 313,645
Other accounts payable and accrued liabilities 109,875 -
Shareholders' loans - 189,528
Deferred revenue 3,627 -
-------------------------
222,456 503,173
Long-term payables 156,000 -
-------------------------
378,456 503,173
-------------------------
Shareholders' Equity
Share capital 1,053,718 854,190
Contributed surplus 88,205 -
Approved by the Board of Directors
(Signed) "Dr. James Timourian" (Signed) "Kerry Brown"
--------------------------- Director -------------------- Director
Innovotech Inc.
Consolidated Statements of Deficit
Audited
------------------------------------------------------------------------
Deficit (761,196) (128,043)
-------------------------
380,727 726,147
-------------------------
759,183 1,229,320
-------------------------
-------------------------
14-month
Year ended period ended
December December
31, 31,
2004 2003
$ $
Balance - Beginning of year 128,043 (94,078)
Net loss for the year 544,948 222,121
Adjustment for stock-based compensation 88,205 -
-------------------------
Balance - End of year 761,196 128,043
-------------------------
-------------------------
Innovotech Inc.
Consolidated Statements of Loss
Audited
------------------------------------------------------------------------
14-month
Year ended period ended
December December
31, 31,
2004 2003
$ $
Revenue
Contract research fees 374,050 193,693
Product sales 50,921 8,051
Grant revenue 23,373 -
--------------------------
448,344 201,744
Direct costs 162,870 75,866
--------------------------
Gross margin 285,474 125,878
--------------------------
Expenses
General administrative 445,191 153,775
Research and development 247,671 183,582
Amortization 46,636 16,736
Promotion - 631
--------------------------
739,498 354,724
--------------------------
Loss from operations (454,024) (228,846)
--------------------------
Other income (expense)
Interest 10,115 6,725
Other 9,402 -
Business acquisition costs (110,441) -
--------------------------
(90,924) 6,725
--------------------------
Net loss for the year (544,948) (222,121)
--------------------------
--------------------------
$ $
Basic and diluted loss per common share (0.06) (0.04)
--------------------------
# #
Weighted average number of common shares
outstanding for the year 9,348,504 5,090,411
--------------------------
--------------------------
Innovotech Inc.
Consolidated Statements of Cash Flows
Audited
------------------------------------------------------------------------
14-month
Year ended period ended
December December
31, 31,
2004 2003
$ $
Cash provided by (used in)
Operating activities
Net loss for the year (544,948) (222,121)
Items not affecting cash
Amortization 46,636 16,736
Business acquisition costs 110,441 -
Bad debt expense 12,500 -
--------------------------
(375,371) (205,385)
Net change in non-cash working capital items 73,484 225,705
--------------------------
(301,887) 20,320
--------------------------
Financing activities
Issuance of share capital - 700,019
Share issue costs - (146,109)
--------------------------
- 553,910
--------------------------
Investing activities
Purchase of equipment (9,202) (7,126)
Expenses pursuing patents and licenses (27,257) (8,994)
Decrease (increase) in note receivable 12,500 (25,000)
Business acquisition costs (38,293) (62,148)
--------------------------
(62,252) (103,268)
--------------------------
(Decrease) increase in cash
and cash equivalents (364,139) 470,962
Cash and cash equivalents
- Beginning of year 771,062 300,100
--------------------------
Cash and cash equivalents
- End of year 406,923 771,062
--------------------------
Supplementary information
Interest paid 12,539 201
--------------------------
--------------------------
Interest received 10,115 6,725
--------------------------
--------------------------
Income taxes paid - -
--------------------------
--------------------------
/T/
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Innovotech Inc.
Dr Gerard Tertzakian
CEO
(780) 448-0585
(780) 424-0941 (FAX)
or
MBEC BioProducts
Ken Boutilier
President
(780) 425-7717
(780) 424-0941 (FAX)
Email: ken.boutilier@mbec.ca
Website: www.mbec.ca
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
