Edmonton, Alberta - CV Technologies Inc. (TSX-VEN:CVQ) announced today the release of its year-end Financial Statements and Annual Report to shareholders. CV Technologies is reporting continuing progress in the strategic areas of the Company.
Dr. Jackie Shan, CVT's President & CSO, reports during the past year we re-aligned the organization resulting in a leaner, more agile company. We removed $2.6 million in costs, and have re-focused on marketing our products. These activities grew gross sales revenue to $1.4 million (net sales revenue, $1.1 million), with a corresponding 67.3% increase in our gross margin, and a 69.6% decrease in our net loss. In August 2002 Cold-FX(r) was granted a patent both for process and composition by the US Patent & Trademark Office. The issuance of this patent is unique, as very few standardized natural health products are granted patent protection. This patent provides the assurance of strong market protection and differentiation from our competitors. The US FDA regulated Double-blind Placebo-Controlled Phase II clinical trial results were released, indicating that use of Cold-FX, when compared to placebo, reduced the relative risk by 89% of developing laboratory confirmed Influen za
(Flu) or Respiratory Syncytial Virus illness (Cold).
At this point our focus is very simply health maintenance and diseases prevention. We will promote our concept of preventative medicine by using natural health products to improve body functions, and thus help people to maintain their health and all live better and longer lives. We have scientifically proven products. All consumer feedback on Cold-FX is very positive. Our products are very timely for the aging demographics of the market. Health maintenance and disease prevention are important priorities for not only the consumer, but also for government and corporations trying to contain rising health care costs. We have built relationships with well-established retailers. We aim to penetrate the mass consumer market with celebrity endorsement on mass media channels. Our goal is for Cold-FX to be a household name. We are aggressively seeking creative means to generate consumer awareness, in both Canada and the US, of our FX (ChemBioPrint (tm)) standardizing technology and our lead product Cold-FX.
In the long term, we are determined to maximize the potential of our science by gradually launching other FX products. Consumers in this market are looking:
· For products that are toxicity tested to be safe;
· For products that have proper scientific evidence to show effectiveness;
· For products that are uniform and consistent;
· For products that are natural and have virtually no effects.
CV Technologies has products that meet these needs, developed and standardized using the ChemBioPrint(tm)/FX(tm) technology. We will use this FX logo on all our brands, to guarantee to the consumer; safety, effectiveness, uniformity, and all natural.
Consolidated net losses from continuing operations for the year ending September 30, 2002, decreased by 70 percent from $3,897,566 in 2001 to $1,184,197. Consolidated cash flow from (to) operations for the fiscal year 2002 and 2001 were $(608,269) and $(3,280,677), respectively, which was an 81 percent decrease. This eight-fold reduction in cash flows from operations is a result of the company's increased sales and cost reduction program (primarily in Research & Development).
Consolidated net revenues from FX product sales for year ending September 30, 2002 were $1,126,422. This compares to $856,022 for the previous year and represents an increase of 32%. Non-consolidated gross revenues were $1,411,487, compared to $1,199,632 for the previous fiscal year, a modest increase of 18%. Non-consolidated net revenues in 2002 were $1,203,372, compared to $852,124 for the 2001 fiscal year, a significant increase of 41.2%. The year-over-year increases are attributable to increasing sales, as well as to the changes in our discount structures.
CV Technologies' Selling, General & Administrative expenses for the fiscal year were $1,522,103 or 72% of the consolidated total expenses. This represented a decrease of 19% compared to the previous year's expenses ($1,884,089 or 39% of total expenses). The decrease is mainly due to the end of CV Technologies' administrative presence in the United States in 2001, and a concerted effort by management to reduce expenses.
Quality Control, Research & Development expenses were $588,428, which represented 28% of the consolidated total expenses. This was a significant decrease, from $2,944,192 or 61% of the total expenses in the 2001 fiscal year.
CVT's immediate growth will depend on building Cold-FX and the FX product line as leading brands in North America. The Company expects to be increasingly successful in marketing its premium quality FX line of products. The regulatory environment is changing in Canada with the imminent implementation of the Natural Health Product Directorate. CV Technologies has a competitive advantage due to its high quality science and having put its products through the rigorous FX process in the past years, in preparation for the new regulations. No other natural health products company has achieved the FX standard of quality.
The complete Annual Report and Financial Statements and more information about CV technologies, Inc. can be found at www.cvtechnologies.com and www.sedar.com
This news release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. For this purpose, any statements that are contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes", "anticipates", "plans", "intends", "expects" and similar expressions are intended to identify forward-looking statements. Such risks and uncertainties include, but are not limited to, the need for capital, changing market conditions, completion of clinical trials, patient enrolment rates, uncertainty of pre-clinical, retrospective and early clinical trial results, the establishment of manufacturing processes and new corporate alliances, the timely development, regulatory approval and market acceptance of the Company's products, and other risks detailed from time to time in the Company's filings with Canadian securities authorities.
Jackie Shan, Ph.D., D.Sc., President & CSO, CV Technologies, (780) 989-4476, [email protected]