IOT Innovotech Inc

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, 2011.


Highlights:



--  LevPharm receives regulatory approval to market and distribute
    Innovotech's bioFILM PA(TM) test in Israel 
--  Innovotech's MBEC Assay(TM) approved as an ASTM International biofilm
    standard 
--  Innovotech's Sani-Lux(TM) approved by the Canadian Food Inspection
    Agency 
--  Exclusive worldwide rights granted to Spectrum Labs to market
    Innovotech's veterinary biofilm tests 
--  Innovotech's crop protection product, Agress(R), shown to be effective
    replacement for Streptomycin in Fire Blight trials 
--  Significant advances in Agress(R) chemistry which will be used to
    support its registration 
--  Completion of private placement 



"2011 was a significant year for Innovotech as we achieved a number of key
milestones related to product validation and market expansion, including receipt
of regulatory approvals, designation as a standard, and the signing of a
distribution agreement for the Company's veterinary tests which included
preliminary sales," said Ken Boutilier, President and Chief Executive Officer of
Innovotech. "While contract research revenue for the year decreased, we
anticipate the trend for increased product sales, seen in 2011, to continue.
Innovotech remains focused on the progression of products that are closer to
generating revenue."


During the fourth quarter of 2011, Innovotech released results of a recent field
trial demonstrating that its environmentally friendly crop protection product,
Agress(R), is an effective replacement for standard antibiotic treatments for
the control of Fire Blight, a devastating bacterial disease of fruit trees.


Other 2011 Agress(R) field trials confirmed positive internal field and
greenhouse trial results that had been seen in previous years for high-value
added crops such as fruits, vegetables and pulses. During 2011, Innovotech also
made significant progress in the area of Agress(R) chemistry, which will become
an integral part of the Company's Environmental Protection Agency (EPA)
submission. 


Subsequent to the end of fiscal 2011, Innovotech announced that Syngenta decided
not to pursue its Right of First Refusal for Innovotech's seed treatment
product, Agress(R).


 Financial Summary



----------------------------------------------------------------------------
($)             Year ended December 31, 2011   Year ended December 31, 2010 
----------------------------------------------------------------------------
Revenues                           1,087,905                      1,595,052 
----------------------------------------------------------------------------
G&A                                1,098,577                      1,323,097 
----------------------------------------------------------------------------
R&D                                1,100,567                        947,393 
----------------------------------------------------------------------------
Net loss                          (1,176,899)                    (1,164,036)
----------------------------------------------------------------------------
Share Price                             0.74                           0.70 
----------------------------------------------------------------------------
Cash position                        495,275                        766,758 
----------------------------------------------------------------------------



Revenues 

In the year ended December 31, 2011, total revenues were $1,087,905 (2010 -
$1,595,052; 2009 - $1,453,924). This included contract research revenue of
$935,990 (2010 - $1,431,975; 2009 - $1,360,979) and product sales of $151,915
(2010 - $103,077; 2009 - $92,945). Delays in regulatory approvals slowed the
development programs of several clients resulting in the revenue decreases seen
by Innovotech. Product sales, however, have increased by 48%, mainly as a result
of sales of the Company's new product line for the veterinary market.


General and Administrative Expense 

In the year ended December 31, 2011, general and administrative expense,
including stock based compensation expense and allocated amortization expense,
was $1,098,577 (2010 - $1,323,098). The decrease was mainly attributable to
reduced expenses for legal and other professional services and improved
management of foreign exchange transactions.


Research and Development 

In the year ended December 31, 2011, research and development expense, including
allocated amortization, was $1,100,567 (2010 - $947,393). The cost was partially
offset by various grants of $499,060 (2010 - $236,892). The increase in research
and development expense is directly related to increased development costs of a
new family of products in human and veterinary susceptibility testing and
extensive chemistry work on Agress(R).


Liquidity and Capital Resources

At December 31, 2011, the Company had $495,275 in cash compared to $766,758 at
December 31, 2010. Continued investment in development and marketing of two of
the Company's lead products have contributed to a decrease in cash reserves
since December 31, 2010. These expenditures were partially offset by the
proceeds from the private placement initiated during the second quarter, as well
as by cash inflows from product sales, contract research revenue and various
grants. 


The Company sees several opportunities for increased revenue from its expanded
InnovoSCEPT product line, both in human health and the veterinary market. In
human health, revenue channels include sales in the Israeli market and in the
provision of a "biofilm diagnostic testing service" provided worldwide to
doctors dealing with treatment failures in chronic infections that represent a
$94 billion health care cost in the United States alone. The veterinary market
provides additional revenue opportunities, where biofilm infections are as
predominant as with humans, but where markets operate without regulatory
approval and payment by pet owners is a standard practice. Any of these market
opportunities could evolve very rapidly into sufficient revenue that could
significantly change the Company's liquidity and capital resource position. 


Innovotech's year end 2011 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.


Annual General Meeting 

Innovotech's Annual General Meeting of Shareholders will be held on April 17,
2012 at 10:00am (Edmonton time) in the King Edward Room, 3rd Floor, Conference
Centre, Manulife Place, 10180 - 101 Street, Edmonton, Alberta, T5J 3S4.


About Innovotech Inc.

Innovotech Inc. is a pioneer 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 three market segments; the MBEC Assay(TM), bioFILM PA(TM) and
InnovoSCEPT veterinary kits. The MBEC Assay(TM) is a high throughput biofilm
growth device that was recently approved as an ASTM International standard.
bioFILM PA(TM) is the first diagnostic test to assist physicians in the
selection of the most effective combination antibiotic treatment of patients
with biofilm-based chronic lung infections, while the InnovoSCEPT veterinary
tests are designed to determine the most effective antibiotic treatment for
infections in both large and small animals. 


Innovotech also has three products in advanced stages of development;
InnovoSCEPT human tests have been designed specifically to address antibiotic
treatment for human infections, Agress(R) is a unique, environmentally friendly
seed treatment and plant spray designed to protect crops against both bacterial
and fungal infections and Sani-Lux(TM) is a light-activated, natural hard
surface sanitizer.


Connect with us:

Website: www.innovotech.ca

Blog: www.cf-test.ca

Twitter: www.twitter.com/innovotech

Facebook: www.facebook.com/innovotech

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.

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