Ivivi Technologies, Inc. (Ivivi), a wound care management company, has reported revenues of $0.28 million for the third quarter of fiscal 2009, compared with the revenues of $0.39 million in the year-ago quarter. It has posted a net loss of $1.50 million, or $0.15 loss per share, for the third quarter of fiscal 2009, compared with the net loss of $2.05 million, or $0.20 loss per share, in the year-ago quarter.
Direct sales, which represent products sold into medical facilities, up 88% to $168,896 during the third quarter of fiscal 2009 from $89,733 in the prior year period. Rental revenue related to the wound care market decreased 43% during the third quarter to $112,885 from $196,366 in the third quarter of fiscal 2008. As a result of the November 2008 mutual termination agreement to end the Allergan contract, there was no revenue from licensing sales and fees in the fiscal third quarter. This compares to $107,517 in the year ago period, which was comprised of $91,892 of licensee sales to Allergan for initial product shipments of SofPulse units and $15,625 of licensing fee revenue related to the amortization of milestone payments.
The decrease in net loss primarily resulted from cost cutting initiatives initiated in the second quarter of fiscal 2009 and the sale of tax benefits described below. In the third quarter of fiscal 2009, under the New Jersey Emerging Technology and Biotechnology Financial Assistance Program, the company sold tax benefits related to a portion of its 2007 net operating losses and in exchange received $254,269, net of fees.
For the nine month period ended December 31, 2008, Ivivi Technologies reported total revenue of $1,253,204, up $172,857, or 16%, from $1,080,347 reported in the nine month period ended December 31, 2007. Direct unit sales increased 65% to $677,005 from $409,692 in the year ago period while rentals were $445,163 compared to $531,888. The company also recorded licensing sales and fees of $131,036 in the most recent nine month period compared to $138,767 in the year ago period.
As earlier reported, on November 19, 2008, Allergan and Ivivi entered into a mutual termination agreement to end the Allergan contract with respect to the distribution of the company’s products. We believe the termination agreement signed with Allergan is a one-time event with a distributor licensee and should not reoccur. During the three months and six months ended September 30, 2008, Ivivi reported a loss on the termination of the Allergan contract in the amount of $92,423 which was disclosed as a net number in the company’s non-operating expenses and was not part of operating results on its statements of operations for the three and six months ended September 30, 2008. Ivivi’s statement of operations for the nine months ended December 31, 2008 has been reclassified to present the components of the $92,423 on the termination of the Allergan contract in operating expenses. If the reclassifications were made as of September 30, 2008, the effect on costs and expenses would have been an increase in operating costs and expenses for the three and six months ended September 30, 2008 of $92,423 or 3% and 2%, respectively, and an increase in loss from operations for the three and six months ended September 30, 2008 of $92,423 or 4% and 2%, respectively. Revenue, net loss and net loss per share for the three and six months ended September 30, 2008 remain the same. The balance sheet at September 30, 2008 was also not affected by this reclassification.
The company had a net loss of $5,889,940, or $0.56 per share, for the nine month period ended December 31, 2008 against a net loss of $5,270,477, or $0.53 per share, for the nine month period ended December 31, 2007.
On December 31, 2008, Ivivi Technologies had cash and cash equivalents of approximately $1.5 million, no outstanding long term debt and 10,116,930 common shares outstanding. The company’s fiscal third quarter financials have been prepared on a going concern basis. The company’s ability to continue as a going concern is dependent on its ability to raise additional funds to finance operations through the issuance of its securities, debt financings, licensing arrangements, joint ventures, or other transactions.
During the third quarter of 2008, the company reached an important milestone with the receipt of US Food and Drug Administration (FDA) 510(k) Clearance for its currently marketed targeted pulsed electromagnetic field therapeutic products, including the SofPulse Models 912-M10, Roma3 and Torino II products. This latest generation of Ivivi signals evolved as a result of Ivivi’s significant advances in understanding the mechanism of action of tPEMF. This clearance will enable Ivivi to freely market the SofPulse family of products for their labeled indications.
In December 2008, Ivivi signed a definitive agreement with RecoverCare, LLC for the exclusive right to distribute, sell and rent its products into long term acute care hospitals and VA facilities in the US In early 2009, the company also entered into an agreement with Grupo Venta Internacional, S.A. de C.V. (GVI), granting them the exclusive right to sell certain of its targeted pulsed electromagnetic field products in Mexico into the plastic and reconstructive surgery, maxillofacial surgery and cosmetic surgery markets.