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

Company Affirms Revenue Guidance of $5 Million for Fiscal Year 2016

SAN DIEGO–(BUSINESS WIRE)–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, 20151

(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.

Contacts

Chesapeake Group
Kevin Holmes, 410-825-3930
info@chesapeakegp.com