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.
Contacts:
Tania Bernier, 813-754-4330 Ext. 223
media@innovaro.com
