Innovus Pharma Reports Record Quarterly Revenues For The Third Quarter Of 2016, Increasing 947% To $1.9 Million, And Record Nine Months Ended September 2016 Revenues, Increasing 463% To $3.1 Million

Innovus Pharmaceuticals, Inc. ("Innovus Pharma") (OTCQB: INNV), today announced a 947% increase in third quarter of 2016 revenues to a record $1.9 million, compared to $0.2 million in revenues for the same period in 2015, and a 463% increase in the nine months ended September 30, 2016 revenues to $3.1 million, compared to $0.6 million in revenue for the same period in 2015.

"Our increase in revenues for the third quarter is a testament to our Beyond Human marketing platform we acquired in March 2016 and to the high value products we commercialize," stated Bassam Damaj, President and Chief Executive Officer of Innovus Pharma. "During the third quarter we strengthened our balance sheet by raising $3.0 million from institutional investors, in-licensed and launched additional products under our Beyond Human Sales and Marketing Platform, and strengthened our senior management team. We are on track to meet our 2016 revenue guidance of $5.0 million and we continue to be focused on executing on our goals of expanding our product line, making our products commercially available, and achieving our projected 2017 goals of profitability and $15 million in revenues."

Financial highlights for the three months ended September 30, 2016
  • Net revenues totaled $1.9 million for the three months ended September 30, 2016, compared to net revenues of $0.2 million for the three months ended September 30, 2015.
  • Gross margins increased to 82.4% for the three months ended September 30, 2016, nearly 40% higher than gross margins for the three months ended September 30, 2015, which totaled 43.1%.
  • Total operating expenses increased to $4.1 million and included $0.7 million in non-cash, share-based compensation for the three months ended September 30, 2016.
  • Net loss totaled $4.4 million, or $0.04 per common share, for the three months ended September 30, 2016. The net loss included interest expense of $3.7 million, of which $3.6 million was non-cash and related to amortization of debt discounts and the excess initial fair value of the embedded conversion feature from our 2016 financing. Net loss for the three months ended September 30, 2015 totaled $0.9 million, or $0.02 per common share.
  • Cash balance totaled $1.5 million at September 30, 2016.

Financial highlights for the nine months ended September 30, 2016
  • Net revenues totaled $3.1 million for the nine months ended September 30, 2016, compared to net revenues of $0.6 million for the nine months ended September 30, 2015.
  • Gross margins increased to 77.2% for the nine months ended September 30, 2016, compared to gross margins of 56.6% for the nine months ended September 30, 2015.
  • Total operating expenses increased to $7.0 million and included $1.9 million in non-cash, share-based compensation for the nine months ended September 30, 2016.
  • Net loss totaled $10.3 million, or $0.12 per common share, for the nine months ended September 30, 2016. The net loss included interest expense of $6.0 million, of which $5.8 million was non-cash and related to amortization of debt discounts and the excess initial fair value of the embedded conversion feature from our 2016 financing. Net loss for the nine months ended September 30, 2015 totaled $3.2 million, or $0.06 per common share.

Third quarter 2016 and recent highlights included:
  • Announced the initiation of a pre-clinical and clinical program intended to evaluate the safety and efficacy of the combination of its supplement Vesele® for promoting sexual health with sildenafil indicated for treating erectile dysfunction.
  • Entered into an exclusive licensing agreement with Seipel Group for the rights to market Urox® Formulation, which has been clinically proven to reduce urinary urgency, accidents, and both day and night frequency in Overactive Bladder (OAB) and Urinary Incontinence (UI), and will be marketed under the name UriVarx™.
  • Announced the launch of Sensum+® under the Beyond Human Sales and Marketing Platform, which is clinically proven to increase penile sensitivity, in the U.S.
  • Announced the launch of its brain health supplement, RecalMax™, under the Beyond Human Sales and Marketing Platform in the U.S.
  • Announced the appointment of Mr. Robert E. Hoffman as Executive Vice President and Chief Financial Officer.
  • Closed on $3 million in financing.
  • Continued our preparation for the anticipated launch of FlutiCare™ in the second quarter of 2017 if approved by the FDA by the end of 2016.

The Company will host a conference call at 4:30 p.m. ET/1:30 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. Participant Elite Entry Number: 3007123. 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 and reference Conference ID: 10096488. The replay will be available shortly after the end of the conference call.
 

Condensed Consolidated Statements of Operations
                 
Three months ended Nine months ended
September 30, September 30,
2016 2015 2016 2015
(unaudited) (unaudited)
Revenues
Product sales, net $ 1,882,129

$

179,744
$ 3,126,112

$

555,069
License revenue   -   -   1,000   5,000
Total net revenues   1,882,129   179,744   3,127,112   560,069
 
Operating Expenses
Cost of product sales 331,227 102,359 714,284 242,808
Research & development 43,775 - 47,667 -
Sales & marketing 1,972,155 80,682 2,257,166 132,778
General & administrative   1,779,048   650,539   4,012,357   2,948,413
Total operating expenses   4,126,205   833,580   7,031,474   3,323,999
 
Loss from operations   (2,244,076 )   (653,836 )   (3,904,362 )   (2,763,930 )
 
Other Income and (Expenses)
Interest expense (3,727,168 ) (473,360 ) (6,000,752 ) (744,726 )
Loss on extinguishment of debt - - - (32,500 )
Other income, net 194,744 - 196,620 -
Change in fair value of derivative liabilities   1,350,688   268,449   (632,627 )   316,378
Total other expense, net   (2,181,736 )   (204,911 )   (6,436,759 )   (460,848 )
 
Net loss $

(4,425,812

)

$

(858,747

)
$ (10,341,121 )

$

(3,224,778
)
 
 
Net loss per share of common stock - basic and diluted:

$

(0.04

)

$

(0.02

)

$

(0.12

)

$

(0.06

 

)
 
Weighted average number of shares of common stock outstanding - basic and diluted  

104,972,645
 

55,076,819
 

86,498,234
 

59,486,501
 
 
 
Condensed Consolidated Balance Sheet Data
                         
September 30, 2016

December 31, 2015 1
(unaudited)

 
Assets
Cash $ 1,454,545 $ 55,901
Accounts receivable, net 30,875 83,097
Prepaid expenses & other current assets 1,179,212 53,278
Inventories 396,772 254,443
Intangible assets & other non-current assets 5,998,132 5,900,286
Total assets $ 9,059,536 $ 6,347,005
 
Liabilities & Stockholders' Deficit
Accounts payable & accrued liabilities $ 1,623,547 $ 258,695
Total accrued compensation 2,023,856 1,442,790
Deferred revenue & customer deposits 11,000 24,079
Accrued interest payable 30,656 79,113
Total notes payable and non-convertible debentures 407,129 303,551
Total derivative liabilities 1,330,593 734,572
Total contingent consideration 3,229,804 3,229,804
Total line of credit convertible debenture and non-convertible debenture - related party, net of discount - 416,472
Convertible debentures, net of discount 410,580 407,459
Total stockholders' deficit

(7,629

)

 
(446,338 )
Total liabilities & stockholders' deficit $ 9,059,536 $ 6,347,005
 
 
1   The Condensed Consolidated Balance Sheet Data has been derived from the audited financial statements as of that date.
 

About Innovus Pharmaceuticals, Inc.

Headquartered in San Diego, Innovus Pharma is an emerging commercial stage pharmaceutical company delivering over-the-counter medicines and consumer care products for men's and women's health and respiratory diseases. The Company generates revenues from its lead products (a) BTH® Testosterone Booster, (b) BTH® Human Growth Agent, (c) Zestra® for female arousal, and (d) EjectDelay® for premature ejaculation, and has an additional five marketed products in this space, including (e) Sensum+® to help with reduced penile sensitivity, (f) Zestra Glide®, (g)Vesele® for promoting sexual health, (h) RecalMax™ for promoting brain and cognitive health, (i) Androferti® (in the US and Canada) to support overall male reproductive health and sperm quality, (j) BTH Vision Formula, and (k) BTH Blood Sugar, among others, and FlutiCare™ OTC for allergic rhinitis, if its ANDA is approved by the U.S. FDA.

For more information, go to www.innovuspharma.com, www.zestra.com, www.ejectdelay.com, www.myvesele.com, www.sensumplus.com, www.myandroferti.com, www.beyondhumantestosterone.com, www.getbeyondhuman.com, www.trybeyondhuman.com, www.recalmax.com, www.urivarx.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, receiving patent protection for any of its products, receiving approval or to be compliant with the requirements of any relevant regulatory authority, to successfully commercialize its products and to achieve its other development, commercialization, meeting its sales projections, 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 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.

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