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Innovus Pharma Reports Record Annual Revenue for Fiscal 2018 of $24.0 million in line with Previous Guidance and Product Gross Margins of 81%

April 1, 2019 Off By BusinessWire

Revenue growth of 2.7x compared to Fiscal 2017 Revenues

SAN DIEGO–(BUSINESS WIRE)–Innovus Pharmaceuticals, Inc. (“Innovus Pharma” or the “Company”)
(OTCQB: INNV), an emerging commercial-stage pharmaceutical company that
delivers safe, innovative and effective over-the-counter medicine
and consumer care products to improve men’s and women’s health and
respiratory diseases, announced today its reported results for the
fiscal year 2018.

Recent Corporate Highlights

  • Acquired assets of SupplementHunt.com adding another revenue channel
    with recent historical annual revenues of $1.2 million;
  • Acquired assets of PrimeSavingsClub.com adding another revenue channel
    with recent historical annual revenues of $2.5 million;
  • Acquired assets of Boston Topicals, LLC which adds four products:
    HealthiFeet®, ThermoMax® (two strengths), and BreastLift™ to the
    Company’s product portfolio;
  • Completed $3.17 million private placement for working capital purposes
    along with the placement of warrants for up to $7 million; and
  • Completed reverse stock split with an intention to eventually up list
    to Nasdaq.

Financial highlights for the year ended December 31, 2018 compared to
December 31, 2017 included:

  • Revenues of approximately $24.0 million, highest annual gross revenue
    in Company’s history and 2.7x year-over-year growth;
  • Product gross margin for the year of 81.1% compared to 79.0% in the
    prior year;
  • Annual product subscription net revenue of $3.1 million compared to
    $1.6 million in the prior year or a 94.0% increase;
  • Sales and marketing expenses as a percentage of revenue declines to
    71.7% from prior year of 77.7%;
  • General and administrative expenses as a percentage of revenue
    decreased to 33.3% from prior year of 58.7%; and
  • Extended our Beyond Human® marketing and sales platform to Canada
    resulting in 19.3% of total net sales for the fiscal, increasing our
    country diversification away from a reliance on the U.S. market.

Financial highlights for the three months ended December 31, 2018
compared to three months ended September 30, 2018 and from the three
months ended December 31, 2017 respectively included:

  • Revenues of approximately $4.8 million, an increase of 100% compared
    to the three months ended December 31, 2017;
  • Reduced sales & marketing expense as a percentage of total revenue to
    64.6% compared with 71.3% in the three months ended September 30, 2018
    and 83.2% from the three months ended December 31, 2017; and
  • Quarterly subscription revenue recognized of $1.1 million an increase
    of 22.3% from $0.9 million reported in the three months ended
    September 30, 2018 and an increase of 104.2% from $0.5 million
    reported in the three months ended December 31, 2017.

“2018 was a year of significant growth for Innovus Pharma. We closed our
most successful year in business with continued strong revenue growth,
achieving record high gross margins year over year and we look forward
to continuing strong performance this year and beyond,” stated Bassam
Damaj, President and Chief Executive Officer of Innovus Pharma.
“Ultimately, Innovus is being positioned and is progressing to continue
to unlock value of its sales and marketing platform to release not just
growth but also profit in the near future.”

The Company will host a conference call at 4:15 p.m. ET/1:15 p.m. PT
today to discuss the financial results and recent business developments.
To participate in the call, please dial 1-877-883-0383 for domestic
callers or 1-412-902-6506 for international callers or 1-877-885-0477
for Canadian callers. Participant Elite Entry Number: 7875805. A replay
of the call will be available for 30 days. To access the replay, dial
1-877-344-7529 domestically or 1-412-317-0088 internationally or
1-855-669-9658 for Canada and reference Replay Access Code: 10129968.
The replay will be available shortly after the end of the conference
call.

 
Consolidated Statements of Operations (amounts in thousands
except weighted average share and per share amounts)
       
Three months ended Year ended
December 31, December 31,
2018 2017 2018 2017
(unaudited)
Net revenue:
Product sales, net $ 4,410 $ 2,380 $ 22,879 $ 8,806
License revenue 3 – 9 10
License revenue 164 – 509 –
License revenue   176     –     593     –  
Total net revenue 4,753 2,380 23,990 8,816
 
Cost of product sales   585     519     4,325     1,848  
Gross profit   4,168     1,861     19,665     6,968  
 
Operating expense:
Research and development 67 12 160 39
Sales and marketing 3,112 1,984 17,206 6,853
General and administrative   2,353     967     7,991     5,175  
Total operating expense   5,532     2,963     25,357     12,067  
 
Loss from operations  

(1,364

)

  (1,102 )   (5,692 )   (5,099 )
 
 
Other income and (expense):
Interest expense (496 ) (100 ) (1,446 ) (872 )
Loss on extinguishment of debt (292 ) (306 ) (1,332 ) (700 )
Other income (expense), net (14 ) (1 ) (13 ) (7 )
Fair value adjustment for contingent consideration 6 (1 ) 204 194
Change in fair value of derivative liabilities   –     15     –     (17 )
Total other expense, net   (796 )   (393 )   (2,587 )   (1,402 )
 
Loss before provision for income taxes (2,160 ) (1,495 ) (8,279 ) (6,501 )
 
Provision for income taxes   –     –     –     3  
 
Net loss $ (2,160 ) $ (1,495 ) $ (8,279 ) $ (6,504 )
 
 
Net loss per share of common stock – basic and diluted:

$

(0.99

)

$

(0.90

)

$

(4.16

)

$

(4.32

)

 
Weighted average number of shares of common stock outstanding –
basic and diluted 		 

2,175,026

   

1,662,623

   

1,989,134

   

1,504,135

 
 
 

Condensed Consolidated Balance Sheet Data (in thousands)

 
  December 31,   December 31,
2018 2017

1

1

Assets
Cash $ 1,248 $ 1,565
Accounts receivable, net 282 68
Prepaid expenses and other current assets 1,116 363
Inventories 2,370 1,726
Intangible assets and other non-current assets   5,111     5,309  
Total assets $ 10,127   $ 9,031  
Liabilities & Stockholders’ Equity
Accounts payable & accrued liabilities $ 2,622 $ 2,607
Total accrued compensation 2,480 2,650
Deferred revenue and customer deposits 108 25
Accrued interest payable 32 4
Short-term loans payable 266 65
Notes payable and non-convertible debenture, net of discount 3,073 1,239
Total derivative liabilities – 59
Total contingent consideration 1,256 1,479
Deferred rent 181 –
Total stockholders’ equity   109     903  
Total liabilities & stockholders’ equity $ 10,127   $ 9,031  
 

1 The Condensed Consolidated Balance Sheet Data has
been derived from the audited consolidated financial statements as of
that date.

About Innovus Pharmaceuticals, Inc.

Headquartered in San Diego, Innovus Pharma is an emerging OTC consumer
goods and specialty pharmaceutical company engaged in the
commercialization, licensing and development of safe and effective
non-prescription medicine and consumer care products to improve men’s
and women’s health and vitality and respiratory diseases. Innovus Pharma
delivers innovative and uniquely presented and packaged health solutions
through its (a) OTC medicines and consumer and health products, which we
market directly, (b) commercial partners to primary care physicians,
urologists, gynecologists and therapists, and (c) directly to consumers
through our on-line channels, retailers and wholesalers. The Company is
dedicated to being a leader in developing and marketing new OTC and
branded Abbreviated New Drug Application (“ANDA”) products. The Company
is actively pursuing opportunities where existing prescription drugs
have recently, or are expected to, change from prescription (or Rx) to
OTC.

For more information, go to www.innovuspharma.com;
www.zestra.com;
www.ejectdelay.com;
www.myvesele.com;
www.urivarx.com;
www.sensumplus.com;
www.myandroferti.com;
www.beyondhumantestosterone.com;
www.getbeyondhuman.com;
www.trybeyondhuman.com;
www.recalmax.com;
www.prostagorx.com;
www.xyralid.com;
www.fluticare.com;
www.allervarx.com;
and www.apeaz.com;
www.mzssleepingaid.com;
www.novalere.com;
and www.diabasens.com.

Innovus Pharma’s Forward-Looking Safe Harbor

Statements under the Private Securities Litigation Reform Act, as
amended: with the exception of the historical information contained in
this release, the matters described herein contain forward-looking
statements that involve risks and uncertainties that may individually or
mutually impact the matters herein described for a variety of reasons
that are outside the control of the Company, including, but not limited
to, its financial results, projected revenues, projected online
subscribers and other customers, estimated markets for its products, and
statements about achieving its other corporate and business development,
growth, commercialization, financial and staffing objectives. Readers
are cautioned not to place undue reliance on these forward-looking
statements as actual results could differ materially from the
forward-looking statements contained herein. Readers are urged to read
the risk factors set forth in the Company’s most recent filing on Form
S-1, annual report on Form 10-K, subsequent quarterly reports filed on
Form 10-Q and other filings made with the SEC. Copies of these reports
are available from the SEC’s website or without charge from the Company.

Contacts

Randy Berholtz
Innovus Pharma Investor Relations
Tel: +1 858
249 7865
[email protected]