INNI Innovaro Inc (PK)

Innovaro, Inc. (QTCQB:INNI), The Innovation Solutions Company, announced today that the Company will release its year-end 2012 financial results.

Year Ended 2012 Financial Results

Revenue from continuing operations was $531,000 for the year ended December 31, 2012 as compared to $435,000 for the year ended December 31, 2011. Net loss from continuing operations was $6.5 million for the year ended December 31, 2012 and $6.1 million for the year ended December 31, 2011.

Some of the highlights from 2012 include:

• Total revenue from continuing operations for the year ended December 31, 2012 increased by 22% over year ended December 31, 2011;
• Total expenses from continuing operations for the year ended December 31, 2012 increased by 4% over year ended December 31, 2011;
• Loss from continuing operations for the year ended December 31, 2012 was ($6.5) million, which included the following non-cash expenses: $2.1 million impairment loss, $1.0 million in non-cash depreciation and amortization, $1.1 million loss related to the write down of one of our notes receivable and $193,000 in non-cash stock-based compensation expense related to vesting options, partially offset by a non-cash benefit of $151,000 from the provision for income tax. Loss from continuing operations for the year ended December 31, 2011 was ($6.1) million, which included the following non-cash expenses: $1.2 million impairment loss, $1.1 million in non-cash depreciation and amortization, and $293,000 in non-cash stock-based compensation expense related to vesting options, partially offset by a non-cash benefit of $134,000 from the provision for income tax.

Financial Condition

Our total assets were $8.5 million at December 31, 2012 compared to $20.8 million at December 31, 2011. At December 31, 2012, we had $76,000 in cash, $250,000 in accounts receivable, $1.2 million in accounts payable and accrued expenses and $5.2 million in debt outstanding. At December 31, 2011, we had $268,000 in cash, $102,000 in accounts receivable, $878,000 in accounts payable and accrued expenses and $5.6 million in debt outstanding.

Recent Developments

On March 11, 2013, we were delisted from the New York Stock Exchange (“NYSE”) MKT and we began trading on the OTCQB Marketplace under the ticker symbol “INNI.” Prior to March 11, 2013, our stock was traded on the NYSE MKT (formerly known as the NYSE Amex) under the ticker symbol “INV.”

The continued decline in the Company’s market capitalization resulted in a triggering event in which management determined that the implied fair value of its intangible assets is less than their carrying values. We recorded an impairment loss related to continuing operations of approximately $2.1 million for the year ended December 31, 2012.

Our promissory note with Greenwood Hudson Portfolio which was due on December 31, 2012 was not collected and we subsequently learned that, despite our related security interest, the property located in Pasco County, Florida had been sold by the State of Florida for property taxes due. The reduction of our collateral required a write-down of the note receivable to net realizable value. We recorded a loss of $1.1 million related to the write-down of this note for the year ended December 31, 2012.

Innovaro, Inc. Consolidated Balance Sheet   ASSETS     December 31, 2012 2011 Current assets: Cash $ 75,910 $ 268,170 Accounts receivable, net 250,426 101,785 Available-for-sale securities 4,765 55,038 Prepaid expenses and other current assets 188,567 225,657 Current portion of notes receivable and accrued interest 1,199,611 1,804,000 Current assets held for sale   -     1,279,458   Total current assets 1,719,279 3,734,108 Cost method investments 86,784 86,784 Equity method investments 92,148 92,148 Notes receivable and accrued interest, less current portion 829,670 - Fixed assets, net 5,420,138 5,597,622 Intangible assets, net 321,323 3,158,505 Non-current assets held for sale   -     8,097,098   Total assets $ 8,469,342   $ 20,766,265   LIABILITIES Current liabilities: Accounts payable $ 723,211 $ 512,840 Accrued expenses 450,271 364,891 Deferred revenue 250,936 123,836 Current maturities of long-term debt 3,294,896 1,644,664 Current liabilities held for sale   -     2,324,389   Total current liabilities 4,719,314 4,970,620 Long-term debt, less current maturities 1,938,520 3,997,775 Derivative liability 29,000 - Deferred tax liability 38,002 190,039 Non-current liabilities held for sale   -     800,503   Total liabilities   6,724,836     9,958,937   Commitments and contingencies - -   EQUITY Innovaro stockholders’ equity: Preferred stock, $.01 par value, 1,000,000 shares authorized; none issued and outstanding - - Common stock, $.01 par value, 29,000,000 shares authorized; 16,165,952 and 15,159,544 shares issued; 16,150,952 and 15,039,544 shares outstanding at December 31, 2012 and 2011, respectively 161,510 150,396 Additional paid-in capital 87,796,900 86,820,437 Accumulated deficit (86,445,142 ) (76,453,214 ) Accumulated other comprehensive income   3,139     53,939   Total Innovaro stockholders’ equity 1,516,407 10,571,558 Noncontrolling interest   228,099     235,770   Total equity   1,744,506     10,807,328   Total liabilities and equity $ 8,469,342   $ 20,766,265     Innovaro, Inc. Consolidated Statements of Comprehensive Loss     Years Ended December 31, 2012   2011   Revenue $ 530,834 $ 435,425   Expenses: Direct costs of revenue 668,813 610,450 Salaries and wages 759,696 1,013,179 Professional fees 410,851 321,934 Research and development 413,638 751,775 Sales and marketing 71,084 133,917 General and administrative 1,129,946 1,150,962 Depreciation and amortization 1,015,562 1,144,746 Impairment loss   2,052,153     1,169,012   6,521,743 6,295,975   Other (income) and expense: Loss related to write-down of note receivable 1,128,000 - Other (income) expense (851,798 ) (56,856 ) Interest expense, net   390,279     433,201   666,481 376,345   Loss from continuing operations before income taxes (6,657,390 ) (6,236,895 ) Provision for income tax expense (benefit)   (151,231 )   (134,046 ) Loss from continuing operations (6,506,159 ) (6,102,849 ) Income (loss) from discontinued operations, net of tax (including loss on disposal)   (3,493,440 )   1,182,126   Net loss $ (9,999,599 ) $ (4,920,723 )   Net loss attributable to noncontrolling interest   (7,671 )   (296,853 ) Net loss attributable to Innovaro stockholders $ (9,991,928 ) $ (4,623,870 )   Net loss $ (9,999,599 ) $ (4,920,723 ) Other comprehensive loss: Unrealized loss from available-for-sale securities   (34,000 )   (93,983 ) Comprehensive loss $ (10,033,599 ) $ (5,014,706 )   Basic and diluted income (loss) per share: Loss from continuing operations $ (0.42 ) $ (0.41 ) Income (loss) from discontinued operations   (0.23 )   0.08   Net loss $ (0.65 ) $ (0.33 )   Weighted average shares outstanding: Basic and diluted 15,464,506 15,013,299   Innovaro, Inc. Consolidated Statements of Cash Flows   Years Ended December 31, 2012   2011 Operating Activities: Net loss $ (9,999,599 ) $ (4,920,723 ) Less: Income from discontinued operations, net of tax   (3,493,440 )   1,182,126     Loss from continuing operations (6,506,159 ) (6,102,849 ) Adjustments to reconcile net loss from continuing operations to net cash flows from operating activities: Depreciation and amortization 1,015,562 1,144,746 Amortization of debt discount from investor warrants 122,146 132,138 Stock issued for services 182,250 - Long-lived asset impairment 2,052,153 1,169,012 Loss on write-down of note receivable 1,128,000 - Loss (gain) on sale and impairment of available-for-sale securities (47,630 ) 201,441 Loss (gain) on derivative liabilities (51,000 ) 150,825 Stock-based compensation 191,919 293,237 Deferred income taxes (151,231 ) (134,046 ) Other 7,088 9,683 Changes in operating assets and liabilities: Accounts receivable (148,641 ) (40,453 ) Prepaid expenses and other assets 35,790 161,764 Deferred revenue 127,100 (19,324 ) Accounts payable and other liabilities   366,082     202,417   Net cash flows from operating activities of continuing operations   (1,676,571 )   (2,831,409 )   Investing Activities: Capital expenditures (1,279 ) (39,218 ) Capitalization of software development costs (45,525 ) (225,172 ) Proceeds from disposal of business 600,000 - Payments received on notes receivable 100,000 - Proceeds from sale of available-for-sale securities   63,903     42,870   Net cash flows from investing activities of continuing operations   717,099     (221,520 )   Financing Activities: Net proceeds from stock offering 389,923 - Proceeds from debt borrowings 250,000 200,000 Payments on long-term debt   (731,480 )   (621,467 ) Net cash flows from financing activities of continuing operations   (91,557 )   (421,467 )   Net cash flows from continuing operations (1,051,029 ) (3,474,396 )   Net cash flows from discontinued operations   858,769     3,479,947     (Decrease) increase in cash (192,260 ) 5,551 Cash at beginning of period   268,170     262,619   Cash at end of period $ 75,910   $ 268,170    

Conference Call Information

We will host a live conference call at 4:30 p.m. ET today to discuss the results. Investors and analysts are invited to attend the conference call.

Investors and analysts can participate in the call by dialing:

US & Canada: 866-240-5139

International Callers: 713-481-0091

About Innovaro, Inc.

Innovaro is The Innovation Solutions Company. The focus of our business is to help organizations innovate and grow. Innovaro offers a comprehensive set of software and services to assure the success of any innovation project, regardless of the size or intent. The Company’s unique combination of LaunchPad software, consulting services expertise, and Trends and Foresight services provides an integrated innovation environment to businesses to drive success. For more information about Innovaro, please visit its website at www.innovaro.com.

Forward-Looking Statements

Certain matters discussed in this press release are “forward-looking statements.” These forward-looking statements can generally be identified as such because the context of the statement will include words such as “expects,” “should,” “believes,” “anticipates” or words of similar import. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements and these factors are identified from time to time in our filings with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This press release is available on Innovaro’s website www.innovaro.com.