CV Technologies Releases Positive Third Quarter Results

Edmonton, Alberta - CV Technologies Inc. (TSX-VEN:CVQ) announced today the release of its third quarter financial statements. Mr. Kim Lucas reports the consolidated net losses from continuing operations for the nine-month period ending June 30, 2002, and 2001 were $652,159 and $3,287,899, respectively, representing a 80 percent decrease. For the three-month period ending June 30, 2002, and 2001 the consolidated net losses were $357,480 and $922,836, respectively, which represented a 61 percent decrease. Consolidated cash flow from operations for the nine-month period ending June 30, 2002, and 2001 were $(313,367) and $(2,842,205), respectively, representing an 89 percent decrease. This nine-fold reduction in losses from operations is a result of the company's successful cost reduction program. For the three-month period ending June 30, 2002, and 2001 consolidated cash flow from operations were $(337,126) and $(548,694), respectively, which was a 39% decrease.

Revenues from natural health product sales for three- and nine-month period ending June 30, 2002 were $160,314 and $926,645, respectively. This compares to $185,317 and $707,871 for the same periods of the previous year and represents a decrease of 13% and an increase of 31%, respectively. The year-to-date increase is attributable to the increased volume of sales, as well as to the changes in the discount structures implemented by the Company in the fall of 2001. Furthermore, compared to the previous fiscal year, the gross margin increased from 40% to 70%. This is the result of the Company's close monitoring of direct expenses, and realignment of its manufacturing processes. The Company is continuing its efforts to further reduce the discount structure and cost of goods sold, to maintain and increase the favourable gross margin. The decrease for the three-month period ending June 30, 2002, compared the same period the previous year, can be attributed to the decreased incidence of cold-and-flu, due to spring weather conditions in Canada. The Company will continue to aggressively market its premium quality natural health line of products in Canada. On a worldwide basis, it will continue to pursue options that will enhance distribution and sales worldwide. Also, the Company will continue to pursue licensing opportunities and collaborative alliances for its products and technologies, which is are expected to contribute to future revenue generation.

Total consolidated expenses for the three- and nine-month period ending June 30, 2002 were $549,342 and $1,525,974, respectively, as compared to $1,226,009 and $4,150,888 for the three- and nine-month period ending June 30, 2002, a decrease of 64% and 70%, respectively.

CV Technologies' General & Administrative expenses year-to-date were $701,755. This amount decreased significantly compared to the previous year's expenses of $1,298,445. The decrease is due to the end of CV Technologies' administrative presence in the United States in 2001, and a concerted successful effort by management to reduce general & administrative expenses. The cost associated with, business development, professional fees, insurance, investor relations, administration and corporate salaries and benefits, and various other expenses relating to the operation and growth of the Company are included in this category. Quality Control and Product Development expenses were $478,128. This category saw a significant decrease, from $2,581,363, when compared to the same nine-month period of the previous year. This decrease is mainly due to the companies reduction in major research & development expenditures, until such time as revenues permit re-investment in this area.

The Company believes that by maintaining a small research and development program the essence of its research & development can be preserved. The services maintained by this department are required to ensure the quality of Company's products currently sold under the HerbTechr name. Selling expenses were $346,091. These expenses increased by 28%, when compared to the comparable nine-month period of the previous fiscal year. This increase can be attributed to an increased focus on selling the HerbTechr line of products, and in particular COLD-FXr, as well as the re-classification of expenditures to marketing, to more closely reflect the nature of the expenses. Capital expenditures for the nine-month period ending June 30 totalled $91,964. These expenses are related to the maintenance and the continued prosecution of the Company's issued and pending patents and registered trademarks, as well as continued payment towards equipment leases.

At June 30, 2002 the consolidated current cash position totalled $1,194,399 as compared to $1,501,645 at September 30, 2001. Of the consolidated $271,151 cash and cash equivalents, $269,827 is included in the books of the Company's subsidiary ChemBioPrint Asia Ltd., of which the Company owns 57.4%. The Company's current asset position decreased during the nine-month period due to a decrease in cash and cash equivalents, inventory and prepaids.

Receivables increased slightly due the cyclical nature of the Company's sales of natural health products. At June 30, 2002 consolidated payables & accruals totalled $565,156 as compared to $438,301 at September 30, 2001. Of this, $46,792 is included in the books of the Company's subsidiary.

CV Technologies has implemented a disciplined approach to the management of liquidity, capital and overall financial stability. The Company's future funding needs may vary depending on a number of factors including the amount of revenue generated through the natural product sales, further product development, the cost, timing and outcome of the regulatory processes, the establishment of business collaborations, the cost of preparing, filing, maintaining, defending and enforcing patent claims and the availability of other funding. The Company may need to raise additional capital to fund its operations in the future. It would seek such additional funding through public or private equity or debt financing from time to time as market conditions permit, or through collaborative agreements.

CV Technologies has rich and innovative pipeline of both early and late-stage products. It is CV Technologies' objective to become a global products-oriented biotechnology and natural health products company. To achieve this objective, the Company continues to maintain its strategic direction to retain sole ownership of its core technology, ChemBioPrintT. It will continue to market and license-out the resultant products of this technology, either natural health or pharmaceutical products. In addition, CVT's future growth will depend on the marketing of CVT's current natural health line of products, HerbTechr. CV Technologies' expects to be increasingly successful in marketing its premium quality natural health line of products. Consumers are gaining increased confidence in the industry, particularly due to the changing regulatory environment.

CV Technologies is significantly ahead of its competitors and is poised to gain competitive advantage by having put its products through a rigorous scientific process (ChemBioPrintT) in past years. In addition, the completion of Phase II clinical studies and recent patent allowance, for CVT's lead pharmaceutical product, CVT-E002, has placed it in an attractive position for strategic partnership discussions. Interest has been expressed regarding technology-partnering opportunities for CVT-E002, ChemBioPrintT technology, and the sale of bulk natural health products.

The complete Financial Statements & Notes, Management Discussion & Analysis and more information about CV Technologies, Inc. can be found at and

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.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.