INNOVA Announces Q4 and Full Year 2016 Financial Results

2016 Revenue $22.7 million; Adjusted EBITDA1 $5.8 million; Adjusted EPS2 $0.15

LOS ANGELES, March 23, 2017 /CNW/ - INNOVA Gaming Group Inc. ("INNOVA" or the "Company") (TSX: IGG), announced today its financial results for the three and twelve-month periods ended December 31, 2016. All figures in this press release are in U.S. dollars, unless otherwise noted. 

2016 Operational Highlights

  • Deployed 185 new LT-3 ticket dispensers ("LT-3s") in the twelve months ending December 31st. 2,062 LT-3s were deployed at December 31, 2016 and 1,968 LT-3s were deployed at March 22, 2017. The reduction in LT-3's from December 31, 2016 to March 22, 2017 is primarily related to removals from Missouri liquor-by-the-drink locations. We believe that accommodating the Missouri Lottery with the withdrawal of our machines from liquor-by-the-drink locations will facilitate the continuation of our pilot program in fraternal and veteran halls in the State of Missouri, and potentially allow us to redeploy some of the removed machines in fraternal and veteran halls in the state.
  • INNOVA'S wholly-owned subsidiary Diamond Game Enterprises ("Diamond Game"), signed an agreement with Tonk Group to distribute LT-3s in New Hampshire under a charitable program regulated by the New Hampshire Lottery.
  • Diamond Game was approved to join the World Lottery Association as an Associate Member, recognizing Diamond Game's success as a provider of unique local, extended play gaming solutions to North American lotteries and the Company's growing influence within the global lottery community.
  • Diamond Game unveiled NexPlay™—a suite of innovative lottery products—at the North American State and Provincial Lottery Conference in October 2016. The Conference is the largest lottery show in North America.

2016 Financial Highlights

  • Revenue of $22.7 million in 2016, compared to $21.2 million in 2015.
  • LT-3 Revenue grew 19.1% in 2016, compared to 2015.
  • Average LT-3 WPU3 (Win Per Unit per day) and ARPU4 (Average Revenue Per Unit per day) of $142 and $29, respectively.
  • Adjusted EBITDA1 of $5.8 million in 2016, compared to $4.6 million in 2015.
  • Adjusted EPS2 of $0.15 in 2016, compared to $0.09 in 2015.
  • Instituted a normal course issuer bid ("NCIB") on March 29, 2016 and as of December 31, 2016, the Company had purchased and cancelled an aggregate of 369,500 Common Shares under this program.
  • Recognized $1,342,763 of EBITDA support compensation as part of other non-operating income, of which $638,839 was received in cash.

1     Adjusted EBITDA is a non-IFRS measure. See "Non-IFRS Measures and Financial Indicators"

2     Adjusted EPS is a non-IFRS measure. See "Non-IFRS Measures and Financial Indicators"

3     WPU is a non-IFRS measure. See "Non-IFRS Measures and Financial Indicators"

4     ARPU is a non-IFRS measure. See "Non-IFRS Measures and Financial Indicators".

 

"We continued to drive solid revenue and earnings growth in 2016 despite some specific challenges from a new deployment perspective," said Richard Weil, Chairman and CEO of INNOVA. "The reality of dealing with heavily regulated customers is that approval for new deployments can take longer than desired.  However, once installed, the units generate strong recurring revenue that benefits INNOVA, lotteries and the charities they support. In the almost two years since going public, we have assembled the team and established the infrastructure required to maintain our business and drive growth. In 2017, with the bulk of near-term product and new feature spending behind us, we expect to continue to generate earnings growth on our current base while working with existing and potential customers to drive deployment upside."

Subsequent Highlights 
On March 10, 2017, INNOVA received an unsolicited proposal from Pollard Banknote Limited ("Pollard Banknote") to acquire all of the outstanding Common Shares of INNOVA (the "Shares") for cash consideration of $2.10 per Share (the "Pollard Proposal").  On the same day, Pollard Banknote and Amaya ("Amaya") entered into an agreement (the "Support Agreement") pursuant to which Amaya has agreed to support the Pollard Proposal.  Amaya indirectly owns 8,180,000 Shares, representing approximately 40.45% of the outstanding Shares on a non-diluted basis. The Support Agreement (i) contains covenants restricting Amaya's ability to solicit or in any manner assist with any proposal for a transaction involving INNOVA other than the Pollard Proposal, (ii) may be terminated by Amaya in order to accept a proposal superior to the Pollard Proposal, subject to Pollard Banknote's ability to match any such superior proposal, (iii) requires that any acquisition agreement entered into between Pollard Banknote and INNOVA in connection with the Pollard Proposal include customary "fiduciary out", "right to match" and termination provisions, and (iv) may be terminated by Amaya if Pollard Banknote has not entered into an acquisition agreement with INNOVA or commenced a formal take-over bid that has not been withdrawn prior to May 8, 2017. 

The board of directors of INNOVA has formed a special committee (the "Special Committee") comprised of Paul van Eyk and Edward Stanek, each an independent director of the Company, to review and evaluate the Pollard Proposal and to consider any strategic alternatives to the Pollard Proposal that might be available to the Company. The Special Committee has engaged Davies Ward Phillips & Vineberg LLP to act as its legal advisors and Raymond James Ltd. to act as financial advisors.

There can be no assurance that the Pollard Proposal or any strategic alternatives to the Pollard Proposal that might be available to the Company will result in a formal take-over bid or offer for the Shares or that any such take-over bid or offer will ultimately result in a completed transaction.  INNOVA's shareholders do not need to take any action with respect to the Pollard Proposal at this time.  The Company intends to continue provide updates if and when necessary in accordance with applicable securities laws.

Selected Condensed Consolidated Financial Information





For the three month

period ended December 31,

For the year

 ended December 31,


2016

2015

2016

2015

2014








$

$

$

$

$

Revenue

5,771,057

5,796,418

22,677,196

21,229,051

18,525,902

Gross profit

4,981,115

5,151,763

19,975,654

18,756,288

16,043,291

Net income (loss)

(33,771)

1,290,020

1,335,417

(395,326)

6,813,068

Total assets



34,407,809

35,109,394

22,939,203

Total long term financial liabilities



1,949,635

4,127,883

3,957,978







Reconciliation of Basic to Adjusted EPS1






Basic and diluted earnings (loss) per Common Share

-

0.06

0.07

(0.02)

0.41

Income taxes

0.01

(0.08)

0.04

(0.09)

(0.39)

Acquisition and related costs

-

-

-

0.05

0.05

Audit adjustment

-

-

-

0.01

-

IPO discretionary bonus

-

-

-

0.06

-

Office shut down costs

-

-

-

-

0.01

Related party payable write off

-

-

-

(0.01)

-

Inventory adjustment

-

-

-

0.01

-

Stock based compensation

0.01

0.03

0.03

0.03

-

Severance and related cost

0.02

-

0.02

-

0.01

Unrealized foreign exchange (gain) loss

0.01

(0.01)

(0.01)

0.05

(0.01)

Adjusted EPS1

0.05

-

0.15

0.09

0.08







Weighted average number of basic and

diluted Common Shares

 

20,180,166

 

20,450,000

 

20,347,919

 

19,186,301

 

16,700,000


 1      Adjusted EPS is a non-IFRS measure. See "Non-IFRS Measures and Financial Indicators"

 

Selected Condensed Consolidated Financial Information (continued)





For the three month

period ended December 31,

For the year

 ended December 31,


2016

2015

2016

2015

2014








$

$

$

$

$

Reconciliation of net income (loss) to adjusted EBITDA1






Net income (loss)

(33,771)

1,290,020

1,335,417

(395,326)

6,813,068

Interest and financing costs (net of interest income)

24,354

46,960

142,166

268,245

223,532

Income tax expense (recovery)

222,061

(1,673,435)

848,002

(1,690,540)

(6,518,657)

Depreciation and amortization

697,418

909,343

2,629,733

2,598,536

2,377,646

Acquisition and related costs

4,262

(450)

11,352

894,362

820,757

Audit adjustment

-

-

-

95,807

-

IPO discretionary bonus

-

-

-

1,125,204

-

Office shut down costs

-

-

-

-

138,000

Related party payable write off

-

-

-

(98,113)

-

Standard inventory adjustment

-

-

-

211,086

-

Stock based compensation

111,637

630,289

575,580

630,289

-

Severance and related cost

488,213

-

488,213

-

153,000

Unrealized foreign exchange (gain) loss

201,392

(278,667)

(245,876)

944,879

(97,951)

Adjusted EBITDA1

1,715,566

924,060

5,784,587

4,584,429

3,909,395






For the three month

period ended December 31,

For the year

 ended December 31,


2016

2015

2016

2015






LT-3 Revenue

$5,539,127

$5,050,208

$21,561,848

$18,105,207

AGP Revenue

$231,930

$746,210

$1,115,348

$3,123,844

Total Revenue

$5,771,057

$5,796,418

$22,677,196

$21,229,051






LT-3 Key Performance Indicators ("KPIs"):





Total units

2,062

1,877

2,062

1,877

Net units deployed

(12)

148

185

502

WPU(2)

$148

$123

$142

$118

ARPU(3)

$29

$30

$29

$29






AGP KPIs:





Total units

205

477

205

477

Net units removed

(19)

(189)

(272)

(286)

WPU2

$194

$116

$177

$108

ARPU3

$14

$15

$14

$13







1      Adjusted EBITDA is a non-IFRS measure. See "Non-IFRS Measures and Financial Indicators"

2      WPU is a non-IFRS measure. See "Non-IFRS Measures and Financial Indicators"

3      ARPU is a non-IFRS measure. See "Non-IFRS Measures and Financial Indicators".

 

Revenue

Three months ended December 31, 2016

LT-3 revenue grew by $0.5 million or 10% compared to the same period in 2015, offset by a decrease in AGP revenue of $0.5 million or 69%. LT-3 revenue growth was primarily attributable to the 185 additional machine deployments relative to Q4 2015, most significantly in Missouri and Maryland. The lower AGP revenue is primarily attributable to the removal of 272 machines from operation relative to the end of the same period in 2015, mostly related to the machine reductions in Texas of $0.5 million. The significant LT-3 WPU increase from $123 in Q4 2015 to $148 in Q4 2016 was caused primarily by LT-3 deployment into comparably higher-performance locations in Missouri, and improvements resulting from additional game features in Ontario, but ARPU was slightly lower due partly to the decrease in the fixed fee revenue components of some contracts. The significant increase in AGP WPU is primarily due to the removal of relatively lower performing WPU AGP machines.

Year ended December 31, 2016

LT-3 revenue grew by $3.5 million or 19% compared to the same period in 2015, partially offset by a decrease in AGP revenue of $2.0 million or 55%.  LT-3 revenue growth was driven by the growth of our LT-3 installed base to 2,062 machine currently in operation, compared to 1,877 LT-3 machines compared to prior year.  LT-3 WPU increased but ARPU was flat for the reasons noted previously.  The lower AGP revenue is primarily attributable to the removal of 272 machines from operation relative to the end of the same period in 2015.  As mentioned previously, AGP WPU growth has been driven by the removal of relatively lower performing AGP machines.

The machine reductions in Texas resulted from the termination of an equipment lease agreement between the Company's wholly-owned subsidiary, Diamond Game, and Blue Stone Entertainment LLC ("Blue Stone") on January 5, 2016. Prior to the termination, Blue Stone operated donation-based sweepstakes terminals leased from Diamond Game ("Terminals") at the Ysleta del Sur Pueblo's (the "Pueblo") two entertainment centers in Texas, pursuant to a separate agreement between Blue Stone and the Pueblo. The Terminals, which have been removed from the Pueblo's entertainment centers, are part of a class of products previously referred to in the Company's communications as alternative gaming products, or AGPs.

In connection with INNOVA's initial public offering, the Company entered into an EBITDA support agreement (the "EBITDA Support Agreement") with Amaya, pursuant to which, subject to the terms and conditions thereof, Amaya will pay INNOVA each year for up to five years from July 1, 2015 an amount equal to the shortfall, if any, between (i) the Company's EBITDA directly or indirectly derived from the deployment of Diamond Game's products at the Pueblo's entertainment centers or in connection with INNOVA's relationship with Blue Stone and/or the Pueblo, and (ii) CAD$2.0 million. The Company believes that the EBITDA Support Agreement will substantially mitigate any adverse financial impact resulting from the termination of the lease agreement with Blue Stone.  A copy of the EBIDTA support agreement is available on SEDAR at www.sedar.com

For the three month period and year ended December 31, 2016, the Company recognized $327,821 and $1,342,763 of EBITDA support compensation, respectively as part of other non-operating income (2015: $nil). Outstanding accounts receivable from Amaya Inc. as of December 31, 2016 was $703,924 (2015: $nil).

Missouri

In response to discussions with the Missouri Lottery, and members of the Missouri state legislature, we have amended our participation in the pilot program in the State of Missouri on a number of fronts, including working with liquor-by-the-drink locations to withdraw their suit against the Missouri Lottery.   In conjunction with the withdrawal of the suit, we agreed with the Missouri Lottery to withdraw our machines from the remaining liquor-by-the-drink locations by the end of March 2017.  We believe that accommodating the Missouri Lottery with the withdrawal of our machines from liquor-by-the-drink locations will facilitate the continuation of our pilot program in fraternal and veteran halls in the State of Missouri, and potentially allow us to redeploy some of the removed machines in fraternal and veteran halls in the state.

Cost of products

Three months ended December 31, 2016

Cost of products was higher by $0.2 million or 23% compared to the same period in 2015 due mainly to higher machine service and data line expenses resulting from additional machine deployments and inventory provisions. 

Year ended December 31, 2016

Cost of products was higher by $0.2 million or 9% compared to the same period in 2015 due mainly to higher machine service and data line expenses of $0.4 million resulting from additional machine deployments and paper costs of $0.1 million resulting from increased sales volume, partially offset by lower repair parts expenses of $0.3 million

Selling expenses

Three months and year ended December 31, 2016

Selling expenses for the three month period and year ended December 31, 2016 were lower by $0.2 million or 45% and $0.4 million or 22%, respectively, compared to the same period in 2015.  Lower expenses were due mainly to lower royalty expenses resulting from the termination of Texas lease agreements, travel, shipping and promotion expenses.  

General and administrative expenses

Three months ended December 31, 2016

General and administrative expenses were lower by $0.6 million or 13% compared to the same period in 2015. The decrease was largely resulting from lower: stock based compensation expense of $0.5 million, bad debt provisions $0.3 million, depreciation of $0.2 million, consulting $0.2 million and software related $0.1 million, partially offset by severance and related cost of $0.5 million and payroll cost of $0.2 million resulting from increase in headcount.

Year ended December 31, 2016

General and administrative expenses were flat compared to the same period in 2015. Lower acquisition related costs of $0.9 million (mainly IPO related in prior year) and bad debt provisions of $0.3 million were offset by severance and related cost of $0.5 million and $0.7 million of increased public company costs, including lobbying, legal, directors fees, business taxes and insurance, investor relations expenses and software related costs.

Financial expenses

Three months and year ended December 31, 2016

Financial expenses for the three month period was lower by $0.4 million or 217% due mainly to unrealized foreign exchange gains. Financial expenses were higher for the year ended December 31, 2016 by $1.3 million or 106% due mainly to unrealized foreign exchange losses.

Income taxes

Three months and year ended December 31, 2016

Income taxes for the three month period and year ended December 31, 2016 were higher by $1.9 million and $2.5 million, respectively compared to the same period in 2015 due mainly to increase in taxable earnings. Also, prior year included adjustment to income tax recovery and deferred income tax assets resulting from adjustments to Company assets and difference in foreign tax rates. 

Outlook 

We believe we are well-positioned for future growth in our existing lottery markets and other new markets. We have secured five lottery contracts in North America since 2012, four of which were earned after competitive request for proposal processes, and we entered a new charitable market (New Hampshire) in 2016 which is now regulated by that state's lottery. Our sales and marketing staff continue to pursue long-term recurring revenue relationships with new customers, as well as fostering growth within existing customers.  We believe that our business development team has the ability to capitalize on its extensive relationships and knowledge of market opportunities, including lottery RFP responses independently or in partnership with other vendors.  We also believe that our product portfolio, with the recent development of our NexPlay suite of products, puts our business development team in an even better position to open new markets.

We are also actively pursuing opportunities to continue to grow our average WPU by improving game functionality, offering new game titles, and introducing enhanced features.  For example, we have deployed new features and enhancements into all existing facilities in Ontario and have received approvals on four new game themes for the market with deployments under way.  The new features and game themes have been very well received and have helped to bolster WPU and ARPU figures.  Similarly, we have submitted for approval game theme and denomination recommendations to Michigan, Missouri, and Maryland Lotteries that we expect will improve WPU and ARPU once deployed.

As a management team, we have a significant amount of experience executing accretive acquisitions and we see a number of opportunities in the lottery and charitable gaming space. We will continue to evaluate opportunities and pursue those that meet both our strategic and financial criteria.

Normal Course Issuer Bid

On March 29, 2016, the TSX approved Company's notice of intention to make a NCIB to purchase for cancellation up to 1,199,066 Shares, representing approximately 10% of the public float of Shares issued and outstanding as of March 28, 2016. The program expires on March 30, 2017. INNOVA may purchase Shares at prevailing market prices and by means of open market transactions through the facilities of the TSX or alternative Canadian trading systems or by such other means as may be permitted by the TSX rules and policies. The actual number of Shares that may be purchased and the timing of any such purchases will be determined by the Company. In accordance with the applicable TSX rules, daily purchases under the NCIB will be limited to 8,836 Shares, representing 25% of the average daily trading volume of the Shares for the most recent completed six calendar months ending on February 29, 2016, and the Company may make, once per calendar week, a block purchase of Shares not owned, directly or indirectly, by insiders of INNOVA that exceeds the daily repurchase restriction. The NCIB commenced on March 31, 2016 and will remain in effect until the earlier of March 30, 2017 or the date on which the Company has purchased the maximum number of Shares permitted under the NCIB.

As of December 31, 2016, the Company purchased and cancelled an aggregate of 369,500 Shares under this program at an average price per Share of CAD$1.35 for a total amount of CAD$498,264. The total amount paid to purchase the Shares is allocated to the Shares in our Consolidated Statements of Changes in Equity. The amount allocated to Shares is based on the average cost per Share and amounts paid above the average cost are allocated to retained earnings.

INNOVA's audited consolidated financial statements and the accompanying notes for the year ended December 31, 2016, Management's Discussion and Analysis for the three-month and year-ended December 31, 2016 and additional information regarding the business of the Company are available on the System for Electronic Document Analysis and Retrieval "Sedar") at www.sedar.com and the Company's website at www.innovagaminggroup.com.

OUTSTANDING SHARE DATA

INNOVA is authorized to issue an unlimited number of Shares without nominal or par value and an unlimited number of preferred shares, issuable in series. As at December 31, 2016, INNOVA had 20,080,500 Shares issued and outstanding, no preferred shares outstanding and options of 867,458, and restricted share units of 387,406 entitling holders thereof to acquire Shares.

Non-IFRS Measures

INNOVA's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). In this press release, as a complement to results provided in accordance with IFRS, INNOVA discloses and discusses certain non‐IFRS financial measures, including EBITDA, Adjusted EBITDA, Adjusted EPS, WPU and ARPU as well as other measures discussed elsewhere in this release. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of INNOVA's results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of INNOVA's financial information reported under IFRS. These measures are used to provide investors with supplemental measures of INNOVA's operating performance. For a full description of these measures and, where applicable, a reconciliation to the most directly comparable measure calculated in accordance with IFRS. Please refer to the "Non‐IFRS Measures and Financial Indicators" section in INNOVA's Management's Discussion and Analysis for the three-month and year-ended December 31, 2016, available on SEDAR at www.sedar.com and the Company's website at www.innovagaminggroup.com.

About INNOVA Gaming Group Inc.

INNOVA develops unique games and products for the global gaming industry, with particular focus on state and provincial lotteries. Through the Company's wholly-owned subsidiary, Diamond Game, INNOVA focuses on enhancing the revenues of government-sponsored lotteries and other regulated operators by offering its unique "extended play" products in traditional and non-traditional gaming venues. Its primary product is the LT-3, an instant ticket vending machine that dispenses tickets while simultaneously displaying the results of each ticket on a video monitor in an entertaining fashion. For more information, please visit www.innovagaminggroup.com.

Forward-Looking Statements

Certain statements and information included herein, including those that express management's expectations or estimates of our future performance or future events, including with respect to the deployment of additional machines, the creation of higher sales volumes and ongoing revenue and the expected mitigation of adverse financial impact as a result of the EBITDA support agreement, constitute "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic, regulatory and competitive uncertainties, contingencies and risks that could cause actual results or events to differ materially from those expressed or implied in such statements. Applicable risks and uncertainties include those identified under the heading "Risk Factors" in INNOVA's annual information form dated March 28, 2016, available on SEDAR at www.sedar.com, and in other filings that INNOVA has made and may make with applicable securities authorities in the future. Investors are cautioned not to put undue reliance on forward-looking statements. The forward-looking statements contained herein reflect INNOVA's current views with respect to future events, and except as required by law, INNOVA does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events, or otherwise.

Consolidated Statements of Financial Position
In US dollars





December 31,
2016

$

December 31,
2015

$




ASSETS



Current



Cash

10,560,806

11,098,280

Accounts receivable

2,948,497

2,305,545

Inventories

1,047,378

1,910,159

Prepaid expenses and deposits

653,807

799,848

Income taxes receivable

29,166

409,492


15,239,654

16,523,324







Property and equipment

9,520,953

9,190,511

Intangibles

1,894,737

983,610

Deferred income taxes

7,656,681

8,310,577

Long term prepaid expenses and deposits

95,784

101,372


34,407,809

35,109,394




LIABILITIES



Current



Accounts payable and accrued liabilities

2,797,983

2,713,367

Deferred revenue

1,201,902

1,263,022

Current portion of equipment financing

1,215,571

1,307,678

Current portion of long term debt

380,989

369,442


5,596,445

5,653,509




Deferred revenue

1,173,201

2,214,173

Equipment financing

516,392

1,380,293

Deferred income taxes

107,615

-

Long term debt

152,427

533,417


7,546,080

9,781,392




SHAREHOLDERS' EQUITY



Share capital

21,358,650

21,735,920

Share issuance reserve

1,205,869

630,289

Retained earnings

4,297,210

2,961,793


26,861,729

25,328,002


34,407,809

35,109,394

 

 

Consolidated Statements of Income (loss) and Comprehensive Income (loss)
In US dollars




For the year ended

December 31,


2016

$

2015

$




Revenue

22,677,196

21,229,051

Cost of products

2,701,542

2,472,763

Gross Profit

19,975,654

18,756,288




Selling

1,408,422

1,795,448

General and administrative

17,764,381

17,795,235

Income (loss) from operations

802,851

(834,395)




Financial expenses

227,885

279,825

Interest income

(85,719)

(11,580)

Effects of foreign exchange (gain) loss

(227,271)

944,878

Other non-operating (income) expenses

(1,295,463)

38,348

Income (loss) before income taxes

2,183,419

(2,085,866)




Current income tax expense (recovery)

86,489

(213,201)

Deferred income tax expense (recovery)

761,513

(1,477,339)

Net income (loss) and comprehensive income

1,335,417

(395,326)




Basic and diluted earnings (loss) per share

0.07

(0.02)

 

 

Consolidated Statements of Cash Flows
In US dollars




For the year ended

December 31,


2016

$

2015

$




Cash from (used in) operating activities



Net income (loss)

1,335,417

(395,326)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:




Loss on disposal of property and equipment

49,412

38,348


Depreciation and amortization expense

2,629,733

2,598,536


Share-based compensation expense

575,580

630,289


Unrealized foreign exchange loss/gain)

(232,454)

1,094,787


Deferred income tax expense (recovery)

761,513

(1,477,339)


Increase (decrease) in deferred revenue

(1,040,972)

433,189


Increase (decrease) in prepaid expenses and deposits

5,588

(101,372)


Income tax expense (recovery) recognized in net income

86,489

(213,201)


Interest expense

208,872

231,153


Interest income

(85,719)

(11,580)

Changes in non-cash operating elements of working capital

389,366

(132,289)

Income taxes received (paid)

293,835

(556,263)

Interest paid

(208,872)

(231,153)


4,767,788

1,907,779




Cash from (used in) investing activities



Purchase of property and equipment

(3,416,795)

(3,302,056)

Proceeds from sale of property and equipment

11,054

-


(3,405,741)

(3,302,056)

Cash from (used in) financing activities



Proceeds from issuance of common stock

-

12,393,042

Transaction costs related to the issuance of common stock

-

(2,224,826)

Proceeds from shareholder injection

-

1,000,000

Repurchase of shares

(377,270)

-

Proceeds from debt

-

1,207,161

Repayment of debt

(369,443)

(246,626)

Repayment of equipment financing

(1,499,324)

(1,120,991)

Interest income

85,719

11,580


(2,160,318)

11,019,340




Increase (decrease) in cash

(798,271)

9,625,063

Cash – beginning of year

11,098,280

3,136,182

Effects of foreign exchange on cash

260,797

(1,662,965)

Cash – end of year

10,560,806

11,098,280

 

SOURCE INNOVA Gaming Group

For further information: Jonathan Ross, LodeRock Advisors, INNOVA Investor Relations, jon.ross@loderockadvisors.com, Tel: (416) 283-0178


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