IVVI: Shares Fall After Q1 Financial Result and Management Reorganization
Submitted By Knobias ClipReport
By Fain Hughes, fhughes@knobias.com
Shares of Ivivi Technologies, Inc. (IVVI) fell on Friday after the Company reported financial results for the first quarter of fiscal 2009 and a shake-up in their management structure.
For the three month period ended June 30, 2008, Ivivi reported total revenue of $383,196, a 17% decrease from $460,999 reported for the three month period ended June 30, 2007. The Company had a net loss of $2,202,315, or $0.21 per share, for the three month period ended June 30, 2008 as compared to a net loss of $1,412,608, or $0.15 per share, in the year ago period.
Alan V. Gallantar, CFO of Ivivi Technologies, commented on the earnings results in a conference call, “We ended the quarter with cash and cash equivalents of approximately $4.8 million, no outstanding long term debt and 10,715,130 common shares outstanding. The Company estimates that it presently has sufficient funds to meet its cash requirements through March 31, 2009. However, the Company’s cash needs could change as a result of potential payments that the Company may be required to make to Allergan, which could be material, under the Allergan agreement and other matters. The Company will need to obtain additional capital through the issuance of its securities, debt financings, licensing arrangements, joint ventures, or other transactions. Management also believes that it could reduce or delay certain variable of discretionary costs to help meet its working capital needs.”
On August 6, 2008, the Company received a letter from Allergan notifying the Company of their determination to cease distribution of the Company’s products until such time as the FDA clears the products the Company has sold to Allergan for U.S. distribution. Allergan has certain rights under its agreement with the Company, including the right to recoup certain costs relating to ceasing the distribution of the Company’s products in the U.S.
Andre’ DiMino Executive Vice President and Chief Technical Officer commented, “We do not believe that the FDA will require us to cease marketing or recall any products, however, if the Company is unsuccessful in its efforts to have the FDA reconsider data and it does not modify its determination, the FDA may require us to do so until FDA marketing clearance is obtained. Allergan has certain rights under its agreement with the Company, including the right to recoup certain costs relating to ceasing the distribution of our products in the U.S., which could be material. We cannot determine our estimated liability, if any, due Allergan under our agreement and thus the financial results for the quarter ended June 30, 2008 do not include any reserve for this contingency.”
The Company also announced several management changes, including the appointment of Steven M. Gluckstern, Chairman of Ivivi Technologies, to the positions of President and Chief Executive Officer. Mr. Gluckstern will also continue to serve as Chairman of the Board of Directors. Mr. Gluckstern assumes the CEO position from Andre’ A. DiMino and David Saloff, who were previously Co-CEOs of the Company. Mr DiMino will assume the position of Executive Vice President, Chief Technical Officer and Mr. Saloff has been named Executive Vice President, Chief Business Development Officer. Mr. DiMino will also continue to serve as Vice-Chairman of the Board of Directors. Edward J. Hammel, who had been serving as Chief Operating Officer, will assume the position of Senior Vice President, Chief Administrative Officer. Also, in addition to their current positions with the Company, the Board has appointed Chief Financial Officer, Alan Gallantar and Chief Scientific Officer, Sean Hagberg as Senior Vice Presidents.
Mr. Gluckstern explained, “These changes are designed to streamline management and refocus the Company in the cardiovascular space, where we believe we will have the greatest growth potential. While we continue our presence and seek opportunities in the wound care, post surgical and pain areas, which have been our historical areas of concentration, the cardiovascular area will represent the key future focus and investment priority of the Company.”
Mr. Saloff added, “We will continue to pursue our strategy of using successes in the field to attract marketing partners. These discussions are continuing, and we hope to see the results of those efforts by year end.”
