Our latest Investing Matters Podcast episode with QuotedData's Edward Marten has just been released. Listen here.

Less Ads, More Data, More Tools Register for FREE

Pin to quick picksAKR.L Regulatory News (AKR)

  • There is currently no data for AKR

Watchlists are a member only feature

Login to your account

Alerts are a premium feature

Login to your account

3rd Quarter Results

15 Nov 2017 07:00

RNS Number : 5093W
Akers Biosciences, Inc.
15 November 2017
 

November 15, 2017

This announcement contains inside information

Akers Biosciences, Inc.

Financial Results for the Third Quarter Ended September 30, 2017

 Revenues up 10% as Breathalyzers and Cholesterol Tests Begin to Contribute

Akers Biosciences, Inc. (NASDAQ: AKER) (AIM: AKR.L), ("Akers," "Akers Bio" or the "Company"), a developer of rapid health information technologies, reports its financial results for the third quarter ended September 30, 2017. The Form 10-Q containing the full financial statements for the third quarter - and nine months - ended September 30, 2017 is available for viewing on the Company's website at www.akersbio.com or at www.sec.gov.

Q3 and 9M Financial Highlights:

· Q3 Total Revenue up 10% to $675,831 (Q3 2016: $613,198)

 

§ 9M Total Revenue up 10% to $2,540,942 (9M 2016: $2,307,708)

 

· Q3 PIFA Heparin/PF4 Rapid Assay product sales were $490,058 (Q3 2016: $514,839) - the Company is positioning the test towards large integrated delivery network customers with longer sales cycles but higher quality long-term revenue potential

 

§ 9M PIFA Heparin/PF4 Rapid Assay product and related components were $1,977,726 (9M 2016: $2,029,095)

 

· Q3 Gross Margin reduced to 52% (Q3 2016: 61%) as the Company initiated production (including one-off costs) for rapid cholesterol tests in line with strong demand from "First Check"

 

§ 9M Gross Margin reduced 2% to 67% (9M 2016: 69%)

 

· Q3 Gross Profit down 6% to $352,304 (Q3 2016: $376,498)

 

§ 9M Gross Profit up 6% to $1,694,455 (9M 2016: $1,594,132)

 

· Q3 overall cash burn (excluding extraordinary legal expenses) continues to reduce:

o General and Administrative Expenses (excluding extraordinary legal expenses) up 19% to $662,621 (Q3 2016: $558,293)

o Sales and Marketing Expenses down 28% to $377,091 (Q3 2016: $526,197)

o Research and Development Expenses up 17% to $290,447 (Q3 2016: $247,578)

 

§ 9M overall cash burn (excluding extraordinary legal expenses) down 3% to $3,411,729 (9M 2016: $3,533,649)

 

· Loss Before Income Tax increased 19% to $1,177,644 (Q3 2016: $989,454 (excluding a reversal of an allowance for bad debts))

 

§ 9M Loss Before Income Tax increased 45% to $3,193,571 (9M 2016: $2,207,707); however, during 2016, the Company reversed a reserve for an uncollectable trade receivable in the amount of $1,299,609 which reduced the Loss Before Income Tax for 2016. Adjusting for this one-time event, the 9M 2017 loss before income tax decreased 9%

 

· Cash and Marketable Securities at September 30, 2017 of $145,311 (December 31, 2016: $122,701)

o Cash and Marketable Securities boosted after the quarter-end following receipt of $680,748 in net proceeds from the conversion of warrants

 

Q3 Operational Highlights

· Breathalyzer product sales up 22%, driven by growing sales of BreathScan OxiChek™ cartridges and BreathScan Lync™ readers from the Akers Wellness line; as well as BreathScan® Alcohol Detector sales

 

· Continued progress in positioning PIFA Heparin/PF4 Rapid Assay products for sales to large integrated delivery network customers in the US

o Company actively campaigning to drive future growth by pursuing further clinical pathway studies, heparin-induced thrombocytopenia (HIT) awareness campaigns and a strategic focus on surgeons

 

· Shipments of the rapid cholesterol test began under the distribution agreement with First Check Diagnostics (whose products are sold through major retailers including, CVS, Rite Aid, Target, Kmart, Meijer, Giant Eagle, Stop & Shop, Giant and ShopKo)

o Company anticipates at least a 4x increase in Q4 shipments versus Q3 in line with over-the-counter demand

 

· US commercial team strengthened with appointment of Pamela E. Hibler as Vice President, Sales and Distribution, North America - 25+ years of success in medical device sector sales

 

Q3 Corporate Highlights

· Series of new non-executive directors appointed to the Company's board of directors:

o Bill J. White - 30+ years of experience in financial management, operations and business development

o Richard C. Tarbox III - 40+ years of management experience in the medical device and diagnostics sector of the healthcare industry

o Christopher C. Schreiber - 30+ years of experience in the securities industry

 

· John J. Gormally, Chief Executive Officer of Akers Bio since November 2015, appointed to board of directors - 30+ years of experience in the healthcare industry

 

 

Commentary from John J. Gormally, Chief Executive Officer and Raymond F. Akers Jr, PhD., Executive Chairman and Chief Scientific Director:

 

Total Revenues were up by 10% in the third quarter as increasing sales of the Company's breathalyzer products and rapid cholesterol tests complemented the robust, albeit plateaued, core revenues from our flagship rapid test for heparin-induced thrombocytopenia (HIT).

The Company is not satisfied with the plateau in sales of rapid HIT tests, which were broadly flat in the US during the third quarter, and is actively campaigning to drive future growth by pursuing further clinical pathway studies, heparin-induced thrombocytopenia (HIT) awareness campaigns and a strategic focus on surgeons who are central to any decision to test for heparin platelet factor 4 antibodies.

We continue to anticipate strong growth from this core product as a result of these initiatives and of our strategy to market to large integrated delivery network customers in the US. While these have a longer sales cycle attached, we believe they will ultimately deliver higher quality revenues over the long-term than individual hospital purchasers. Additionally, we believe sales in China will materialize when NovoTek Pharmaceuticals ("NovoTek"), our distribution partner for the PIFA Heparin/PF4 Rapid Assay products in China, gains approvals for reimbursement rates from the various Provinces. Over the past several years, NovoTek has created significant product demand by identifying and working with the key opinion leaders and seeding the marketplace with sample products. As a result, they anticipate strong demand once reimbursement rates are approved, albeit the timing remains unknown.

Akers Bio recorded a 22% increase in breathalyzer product sales in the third quarter, driven by growing sales of BreathScan OxiChek™ cartridges and BreathScan Lync™ readers from the Akers Wellness line; as well as BreathScan® Alcohol Detector sales, which are beginning to pick up in Western Europe, Australia and East Asia. The Company expects this trend to continue as the distribution partners in these areas continue to expand their markets.

Notably, during August 2017, the Company received a non-refundable license fee from a potential customer for BreathScan OxiChek™ in exchange for the use of equipment, access to product documentation and data, technical support and to temporarily restrict the Company from actively pursuing another commercial partner for BreathScan OxiChek™ in a specific market segment. We look forward to reporting further progress as the commercialization of this test - aimed at the significant health and wellness market - continues to gain traction.

The Company began shipping its rapid cholesterol test product, based on the Company's REA technology, during the third quarter, under the distribution agreement with First Check Diagnostics, whose products are sold through major retailers including, CVS, Rite Aid, Target, Kmart, Meijer, Giant Eagle, Stop & Shop, Giant and ShopKo. We are highly encouraged by the progress of this relationship which we anticipate will deliver at least a 4x increase in shipments in Q4 versus Q3, in line with over-the-counter demand.

Research and Development has focused on key projects designed to produce rapid growth potential from new product lines. Among those in the pipeline are BreathScan KetoChek™, a health and wellness test to determine the level of ketosis - or optimal fat burning metabolism - in individuals interested in weight loss, fitness or endurance athletic events. Also targeted for introduction in 2018 are BreathScan Asthma, the first 2-minute rapid test for asthma, and BreathScan DKA, the first home test for diabetic ketoacidosis, a serious complication of type 1, and some type 2, diabetes. The Company continues to work proactively with the US Food and Drug Administration to obtain market clearance for the rapid chlamydia assay. We are confident in our data package and submission but currently have no visibility over a market clearance date.

Akers Bio announced a series of highly experienced new non-executive director appointments to the Company's board in August 2017. Bill J. White joined with more than 30 years of experience in financial management, operations and business development; Richard C. Tarbox III joined with more than 40 years of management experience in the medical device and diagnostics sector of the healthcare industry; and Christopher C. Schreiber joined with more than 30 years of experience in the securities industry.

John J. Gormally, the Chief Executive Officer since November 2015, also joined the board of directors in Q3 2017; and Raymond F. Akers Jr, PhD., the Company's co-founder and Chief Scientific Director, resumed the position of Executive Chairman. We believe the board of directors has a diverse and relevant skillset to steer Akers Bio through its next phase of growth and product commercialization.

We were also delighted to welcome Pamela E. Hibler in September 2017 to lead the Company's North American commercial team as Vice President, Sales and Distribution. Pamela has over 25 years of success in the medical device sector in sales, sales management and as a corporate director. In particular, she has specialized in helping companies to launch new and innovative technology into the healthcare market.

Outlook

Our year to date picture is an encouraging one overall which shows revenues tracking a 10% increase over 2016 and with cash burn shrinking (save for extraordinary legal expenses). There are a number of individual potential catalysts - such as the conversion of our integrated delivery network strategy in the US, the China opportunity and exciting projects ongoing with BreathScan OxiChek™ - which could take the Company into profitability in the near term. In addition, the Company remains excited about the introduction of several new products targeted for introduction in 2018 which we believe will further enhance sales growth potential.

Conference call information:

 

Wednesday, November 15, 2017 at 2:00 p.m. GMT (9:00 a.m. Eastern Time)

International: 1-323-794-2423

US: 1-800-289-0438

Conference ID: 5598811

Webcast: http://public.viavid.com/index.php?id=127288

 

About Akers Biosciences, Inc.

Akers Bio develops, manufactures, and supplies rapid screening and testing products designed to deliver quicker and more cost-effective healthcare information to healthcare providers and consumers. The Company has advanced the science of diagnostics while responding to major shifts in healthcare through the development of several proprietary platform technologies. The Company's state-of-the-art rapid diagnostic assays can be performed virtually anywhere in minutes when time is of the essence. The Company has aligned with major healthcare companies and high volume medical product distributors to maximize product offerings, and to be a major worldwide competitor in diagnostics.

 

Additional information on the Company and its products can be found at www.akersbio.com. Follow us on Twitter @AkersBio.

 

For more information:

 

Akers Biosciences, Inc.

John J. Gormally, Chief Executive Officer

Raymond F. Akers, Jr. PhD, Executive Chairman and Chief Scientific Director

Tel. +1 856 848 8698

 

finnCap (UK Nominated Adviser and Broker)

Adrian Hargrave / Scott Mathieson (Corporate Finance)

Steve Norcross (Broking)

Tel. +44 (0)20 7220 0500

 

Vigo Communications (Global Public Relations)

Ben Simons / Fiona Henson

Tel. +44 (0)20 7830 9704

Email: akers@vigocomms.com

 

Summary of Statements of Operations for the Three Months Ended September 30, 2017 and 2016

 

Revenue

 

Akers' revenue for the three months ended September 30, 2017 totaled $675,831, a 10% increase from the same period in 2016. The table below summarizes our revenue by product line for the three months ended September 30, 2017 and 2016 as well as the percentage of change year-over-year:

 

Product Lines

3 MonthsEndedSeptember 30, 2017

3 MonthsEndedSeptember 30, 2016

Percent Change

Particle ImmunoFiltration Assay ("PIFA")

$

490,058

$

514,839

(5

)%

MicroParticle Catalyzed Biosensor ("MPC")

104,094

85,338

22

%

Rapid Enzymatic Assay ("REA")

27,500

-

100

%

Other

16,679

13,021

28

%

Total Product Revenue

638,331

613,198

4

%

License & Service Revenue

37,500

-

100

%

Total Revenue

$

675,831

$

613,198

10

%

 

Revenue from the Company's PIFA Heparin/PF4 Rapid Assay products decreased 5% during the three months ended September 30, 2017 over the same period of 2016. The small decrease of $24,781 is due primarily to changes by the Company's distribution partners to their management of inventory levels.

 

The Company is taking steps to improve its market presence and to educate the marketplace through the preparation and publication of additional clinical studies and physician seminars on the risks associated with heparin induced thrombocytopenia.

 

The Company's MPC breathalyzer technology product sales increased 22% during the three months ended September 30, 2017 over the same period of 2016. Sales in this category include the BreathScan OxiChek and BreathScan Lync products as well as the traditional BreathScan Breath Alcohol product lines.

 

Demand for the BreathScan Breath Alcohol products is beginning to re-emerge in Western Europe, Australia and the Far East through the efforts of our Independent Manufacturing Representative ("IMR") in Italy working in conjunction with our Corporate staff. The Company expects this trend to continue as the distribution partners in these areas continue to expand their markets.

 

The Company began shipping the Tri-Cholesterol product, based on the Company's REA technology, during the three months ended September 30, 2017. The first order, totaling $27,500, was fulfilled in September and two additional orders have been received to date and will ship before the end of the fourth quarter.

 

Other operating revenue increased to $16,679 (2016: $13,021) during the three months ended September 30, 2017. The product group consists of fees received for shipping and handling and the sale of components.

 

During August 2017, the Company received a non-refundable $50,000 fee from a potential customer for the Company's BreathScan OxiChek products in exchange for the use of equipment, access to product documentation and data, technical support and to restrict the Company from actively pursuing another commercial partner in a specific market segment.

 

The Company recognized $37,500 of this fee as License & Service Revenue during the three months ended September 30, 2017 and will recognize the balance of $12,500 in the three months ended December 31, 2017.

 

The table below summarizes our revenue by geographic region for the three months ended September 30, 2017 and 2016 as well as the percentage of change year-over-year:

 

Geographic Region

3 MonthsEndedSeptember 30, 2017

3 MonthsEndedSeptember 30, 2016

PercentChange

United States

$

626,077

$

603,006

4

%

People's Republic of China

-

383

(100

)%

Rest of World

49,754

9,809

407

%

Total Revenue

$

675,831

$

613,198

10

%

 

Domestic sales represent the most significant portion of the Company's revenue, contributing 92.6% (2016: 98.3%). The primary sales and marketing efforts are concentrated on expanding the Company's domestic market share in the rapid clinical diagnostic and health and wellness segments and the recent introduction of the Tri-Cholesterol test has allowed the Company to re-enter the retail market.

 

Revenue from China continues to be highly unpredictable. NovoTek Pharmaceuticals ("NovoTek"), our distribution partner for the PIFA Heparin/PF4 Rapid Assay products, continues to pursue approvals for reimbursement rates from the various Provinces and although they anticipate receipt of these approvals, their timing is unknown. Over the past several years, NovoTek has created significant product demand by identifying and working with the key opinion leaders and seeding the marketplace with sample products. As a result, they anticipate strong demand for the PIFA Heparin/PF4 Rapid Assay product once reimbursement rates are approved.

 

Revenue from the rest of the world consists mostly of the BreathScan Breath Alcohol products being distributed in Western Europe and Australia.

 

The Company's gross margin declined to 52% (2016: 61%) for the three months ended September 30, 2017. The initial commercial production of the Company's new Tri-Cholesterol product contributed to the decline in gross margin. One-time costs associated with the transition from Research and Development to Manufacturing as the production plans were implemented and adjusted included engineering, raw material waste as processes were fine-tuned to meet commercial production levels, training of the production staff and increased quality review and testing. The inclusion of several of the Research and Development department's professional staff as part of the initial production team significantly increased direct labor costs.

 

Cost of sales for the three months ended September 30, 2017 totaled $323,526 (2016: $236,700). Direct cost of sales increased to 31% of product revenue while other cost of sales decreased to 20% for the three months ended September 30, 2017 as compared to 18% and 21% respectively for the same period in 2016.

 

Direct cost of sales for the three-month period ended September 30, 2017 were $196,866 (2016: $109,835). Other cost of sales for the three months ended September 30, 2017 were $126,660 (2016: $126,865).

 

General and Administrative Expenses

 

General and administrative expenses for the three months ended September 30, 2017, totaled $819,565, which was a 47% increase as compared to $558,293 for the three months ended September 30, 2016.

 

The table below summarizes our general and administrative expenses for the three months ended September 30, 2017 and 2016 as well as the percentage of change year-over-year:

 

Description

3 Months EndedSeptember 30, 2017

3 MonthsEndedSeptember 30, 2016

Percent Change

Personnel Costs

$

223,361

$

168,913

32

%

Professional Service Costs

320,081

110,101

191

%

Stock Market & Investor Relations Costs

120,807

88,953

36

%

Other General and Administrative Costs

155,316

190,326

(18

)%

Total General and Administrative Expense

$

819,565

$

558,293

47

%

 

Personnel expenses increased by 32% for the three months ended September 30, 2017 as compared to the same period of 2016. The increase is related to the creation of the Controller's position in the Finance department, salary adjustments for executive management and higher employee benefit expenses.

 

Professional service costs increased by 191% for the three months ended September 30, 2017 as compared to the same period of 2016. A significant increase in legal fees ($258,026 (2016: $56,919)) accounted for the majority of the change.

 

Stock market and investor relations costs increased by 36% for the three months ended September 30, 2017 as compared to the same period of 2016. Expenses related to the Company's annual meeting, transfer agent fees and investor relations fees contributed to the increase.

 

The Company's other general and administrative expenses declined by 18% for the three months ended September 30, 2017 as compared to the same period of 2016. Continued efforts to reduce costs resulted in savings across several expense categories, the most significant of which resulted from the travel restrictions put in place earlier in the year. Travel expenses for the executive and administrative staff totaled $10,140 (2016: $18,074).

 

Sales and Marketing Expenses

 

Sales and marketing expenses for the three months ended September 30, 2017 totaled $377,091, which was a 28% decrease as compared to $526,197 for the three months ended September 30, 2016.

 

The table below summarizes our sales and marketing expenses for the three months ended September 30, 2017 and 2016 as well as the percentage of change year-over-year:

 

Description

3 MonthsEndedSeptember 30, 2017

3 MonthsEndedSeptember 30, 2016

Percent Change

Personnel Costs

$

184,835

$

222,980

(17

)%

Professional Service Costs

67,111

77,094

(13

)%

Royalties and Outside Commission Costs

43,635

128,828

(66

)%

Other Sales and Marketing Costs

81,510

97,295

(16

)%

Total Sales and Marketing Expenses

$

377,091

$

526,197

(28

)%

 

Personnel costs decreased in the three months ended September 30, 2017 as compared to the same period of 2016. The Company has reduced its sales and marketing staff from 10 members on January 1, 2016 to 4 as of September 30, 2017. The new sales and marketing strategy targets large integrated delivery networks instead of individual facilities. This strategy requires fewer, but more experienced and technically knowledgeable sales personnel to interact with executive management, laboratory and medical directors.

 

The Company renegotiated or eliminated several consulting arrangements targeted at improving market penetration or identifying marketing or distribution partners during the first half of 2016. The result is a reduction of 13% in professional service costs with general consulting services ($60,862 (2016: $75,010)) accounting for the majority of the savings for the three months ended September 30, 2017.

 

The legal settlement with ChubeWorkx Guernsey, Ltd ("ChubeWorkx"), signed on August 11, 2016, requires the Company to pay a 5% royalty on adjusted gross sales to ChubeWorkx on a quarterly basis. During the three months ended September 30, 2017, this royalty totaled $34,328 (2016: $117,949).

 

A decline in travel expenses ($37,405 (2016: $46,189)), sponsorships ($- (2016: $10,500)) and small decreases in other expenses resulted in an overall decline of 16% in other sales and marketing costs.

 

Research and Development

 

Research and development expenses for the three months ended September 30, 2017 totaled $290,447, which was a 17% increase as compared to $247,578 for the three months ended September 30, 2016.

 

The table below summarizes our research and development expenses for the three months ended September 30, 2017 and 2016 as well as the percentage of change year-over-year:

 

Description

3 MonthsEndedSeptember 30, 2017

3 MonthsEndedSeptember 30, 2016

Percent Change

Personnel Costs

$

214,369

$

161,257

33

%

Clinical Trial Costs

2,153

19,062

(89

)%

Professional Service Costs

41,829

39,369

6

%

Other Research and Development Costs

32,096

27,890

15

%

Total Research and Development Expenses

$

290,447

$

247,578

17

%

 

Personnel costs increased 33% during the three months ended September 30, 2017 as compared to the same period of 2016. The increase is related to salary adjustments and higher employee benefit expenses.

 

Clinical trial costs decreased 89% during the three months ended September 30, 2017 as compared to the same period of 2016. The Company continued to perform two clinical trials during the three months ended September 30, 2016, one to test the effectiveness of the PIFA Chlamydia assay and one for the KetoChek™ health and wellness product. Both studies were completed during 2016 and no significant expense was incurred during the three months ended September 30, 2017.

 

An increase is travel expenses ($9,282 (2016: $2)) was offset by reduced costs in several other expense categories which accounted for the 15% increase in other research and development expenses.

 

The following table illustrates research and development costs by project for the three months ended September 30, 2017 and 2016, respectively:

 

Project

2017

2016

Asthma/pH

$

52,368

$

-

Breath Alcohol

1,714

-

Chlamydia Trachomatis

32,791

22,307

Heparin/PF4

19,257

16,885

Ketone

3,689

-

KetoChek / OxiChek

70,056

117,871

METRON

-

74

Other Projects

-

248

Pulmo Health

-

5,447

Tri-Cholesterol

110,572

84,746

 

Other Income and Expense

 

Other expense, net of income for the three months ended September 30, 2017 totaled $68, which was a 101% decrease as compared to other income, net of expense of $8,893 for the three months ended September 30, 2016.

 

The table below summarizes our other income and expenses for the three months ended September 30, 2017 and 2016 as well as the percentage of change year-over-year:

 

Description

3 MonthsEndedSeptember 30, 2017

3 MonthsEndedSeptember 30, 2016

Percent Change

Currency Translation Gain/(Loss)

$

(3,195

)

$

3,629

(188

)%

Realized Gain/(Loss) on Investments

1,719

1,269

35

%

Interest and Dividends

1,408

3,995

(65

)%

Other Income

-

-

-

%

Total Other Income, Net of Expenses

$

(68

)

$

8,893

(101

)%

 

Gains and losses associated with foreign currency transactions declined by 188% during the three months ended September 30, 2017 as compared to the same period of 2016, primarily a result of the increased strength of the British Pound compared to the US Dollar.

 

Realized gains, interest and dividend income declined to $3,127 (2016: $5,264). The Company's available capital for investment activities was limited during the three months ended September 30, 2017 resulting in the decline in investment income.

 

Summary of Statements of Operations for the Nine Months Ended September 30, 2017 and 2016:

 

Revenue

 

Akers' revenue for the nine months ended September 30, 2017 totaled $2,540,942, a 10% increase from the same period in 2016. The table below summarizes our revenue by product line and geographic region for the nine months ended September 30, 2017 and 2016 as well as the percentage of change year-over-year:

 

Product Lines

9 MonthsEndedSeptember 30, 2017

9 MonthsEndedSeptember 30, 2016

Percent Change

Particle ImmunoFiltration Assay ("PIFA")

$

1,477,726

$

2,029,095

(27

)%

MicroParticle Catalyzed Biosensor ("MPC")

381,569

195,040

96

%

Rapid Enzymatic Assay ("REA")

27,500

-

100

%

Other

616,647

83,573

638

%

Total Product Revenue

2,503,442

2,307,708

8

%

License & Service Revenue

37,500

-

100

%

Total Revenue

$

2,540,942

$

2,307,708

10

%

 

Revenue from the Company's PIFA Heparin/PF4 Rapid Assay products decreased 27% during the nine months ended September 30, 2017 over the same period of 2016. Additional revenue from PIFA related components, totaling $500,000, during the nine months ended September 30, 2017 is included in other revenue. During the nine months ended September 30, 2016 the Company recognized approximately $494,000 (2017: $-) in PIFA revenue from the Company's distribution partner in the People's Republic of China ("PRC"). The distributor continues to work with the various provincial governments in the PRC to finalize reimbursement rates for the providers. Once these rates are established, the distributor expects strong demand for the PIFA products.

 

The Company is taking steps to improve its market presence and to educate the marketplace through the preparation and publication of additional clinical studies and physician seminars on the risks associated with heparin induced thrombocytopenia.

 

The Company's MPC breathalyzer technology product sales increased 96% during the nine months ended September 30, 2017 over the same period of 2016. Sales in this category include the BreathScan OxiChek and BreathScan Lync products as well as the traditional BreathScan Breath Alcohol product lines.

 

Demand for the BreathScan Breath Alcohol products is beginning to re-emerge in Western Europe, Australia and the Far East through the efforts of our Independent Manufacturing Representative ("IMR") in Italy working in conjunction with our Corporate staff. The Company expects this trend to continue as the distribution partners in these areas continue to expand their markets.

 

The Company began shipping the Tri-Cholesterol product, based on the Company's REA technology, during the nine months ended September 30, 2017. The first order, totaling $27,500, was fulfilled in September and two additional orders have been received to date and will ship before the end of the fourth quarter.

 

Other operating revenue increased to $616,647 (2016: $83,573) during the nine months ended September 30, 2017 as compared to the same period of 2016. The product group consists of fees received for shipping and handling and the sale of components. The significant increase resulted from an initial order, as explained above, for manufacturing components from NovoTek totaling $500,000. NovoTek will utilize these components along with additional materials to be purchased in a future period to assemble PIFA Heparin/PF4 products in either the PRC or Poland.

 

During August 2017, the Company received a non-refundable $50,000 fee from a potential customer for the Company's BreathScan OxiChek products in exchange for the use of equipment, access to product documentation and data, technical support and to restrict the Company from actively pursuing another commercial partner in a specific market segment.

 

The Company recognized $37,500 of this fee as License & Service Revenue during the three months ended September 30, 2017 and will recognize the balance of $12,500 in the three months ended December 31, 2017.

 

The table below summarizes our revenue by geographic region for the nine months ended September 30, 2017 and 2016 as well as the percentage of change year-over-year:

 

Geographic Region

9 MonthsEndedSeptember 30, 2017

9 MonthsEndedSeptember 30, 2016

Percent Change

United States

$

1,755,695

$

1,721,967

2

%

People's Republic of China

627,132

506,781

24

%

Rest of World

158,115

78,960

100

%

Total Revenue

$

2,540,942

$

2,307,708

10

%

 

Domestic sales represent the most significant portion of the Company's revenue, contributing 69.1% (2016: 74.6%). The primary sales and marketing efforts are concentrated on expanding the Company's domestic market share in the rapid clinical diagnostic and health and wellness segments and the recent introduction of the Tri-Cholesterol test has allowed the Company to re-enter the retail market.

 

Revenue from China continues to be highly unpredictable. NovoTek Pharmaceuticals ("NovoTek"), our distribution partner for the PIFA Heparin/PF4 Rapid Assay products, continues to pursue approvals for reimbursement rates from the various Provinces and although they anticipate receipt of these approvals, their timing is unknown. Over the past several years, NovoTek has created significant product demand by identifying and working with the key opinion leaders and seeding the marketplace with sample products. As a result, they anticipate strong demand for the PIFA Heparin/PF4 Rapid Assay product once reimbursement rates are approved.

 

Revenue from the rest of the world consists mostly of the BreathScan Breath Alcohol products being distributed in Western Europe and Australia.

 

The Company's gross margin declined to 67% (2016: 69%) for the nine months ended September 30, 2017. The initial commercial production of the Company's new Tri-Cholesterol product contributed to the decline in gross margin. One-time costs associated with the transition from Research and Development to Manufacturing as the production plans were implemented and adjusted included engineering, raw material waste as processes were fine-tuned to meet commercial production levels, training of the production staff and increased quality review and testing. The inclusion of several of the Research and Development department's professional staff as part of the initial production team significantly increased direct labor costs.

 

Cost of sales for the nine months ended September 30, 2017 totaled $846,488 (2016: $713,576). Direct cost of sales increased to 16% of product revenue while other cost of sales remained steady at 17% for the nine months ended September 30, 2017 as compared to 14% and 17% respectively for the same period in 2016.

 

Direct cost of sales for the nine-month period ended September 30, 2017 were $420,189 (2016: $325,922). Other cost of sales for the nine months ended September 30, 2017 were $426,299 (2016: $387,654).

 

General and Administrative Expenses

 

General and administrative expenses for the nine months ended September 30, 2017, totaled $2,440,023, which was a 6% increase as compared to $2,298,099 for the nine months ended September 30, 2016.

 

The table below summarizes our general and administrative expenses for the nine months ended September 30, 2017 and 2016 as well as the percentage of change year-over-year:

 

Description

9 Months EndedSeptember 30, 2017

9 MonthsEndedSeptember 30, 2016

Percent Change

Personnel Costs

$

781,833

$

712,683

10

%

Professional Service Costs

866,403

587,196

48

%

Stock Market & Investor Relations Costs

320,446

322,956

(1

)%

Other General and Administrative Costs

471,341

675,264

(30

)%

Total General and Administrative Expense

$

2,440,023

$

2,298,099

6

%

 

Personnel expenses increased by 10% for the nine months ended September 30, 2017 as compared to the same period of 2016. The increase is related to the creation of the Controller's position in the Finance department, salary adjustments for executive management and higher employee benefit expenses.

 

Professional service costs increased by 48% for the nine months ended September 30, 2017 as compared to the same period of 2016. A significant increase in accounting and audit ($140,130 (2016: $80,896)), personnel recruitment ($22,355 (2016: $409)), engineering ($82,718 (2016: $51,072)), legal fees ($568,225 (2016: $443,065)) and general consulting services ($52,975 (2016: $5,513)) accounted for the change.

 

The Company's other general and administrative expenses declined by 30% for the nine months ended September 30, 2017 as compared to the same period of 2016. Continued efforts to reduce costs resulted in savings across several expense categories, the most significant of which resulted from the travel restrictions put in place earlier in the year. Travel expenses for the executive and administrative staff totaled $36,345 (2016: $114,293).

 

Sales and Marketing Expenses

 

Sales and marketing expenses for the nine months ended September 30, 2017 totaled $1,382,416 which was a 22% decrease as compared to $1,764,952 for the nine months ended September 30, 2016.

 

The table below summarizes our sales and marketing expenses for the nine months ended September 30, 2017 and 2016 as well as the percentage of change year-over-year:

 

Description

9 MonthsEndedSeptember 30, 2017

9 MonthsEndedSeptember 30, 2016

Percent Change

Personnel Costs

$

702,319

$

937,777

(25

)%

Professional Service Costs

204,237

384,114

(47

)%

Royalties and Outside Commission Costs

192,470

178,873

8

%

Other Sales and Marketing Costs

283,390

264,188

7

%

Total Sales and Marketing Expenses

$

1,382,416

$

1,764,952

(22

)%

 

Personnel costs decreased 25% in the nine months ended September 30, 2017 as compared to the same period of 2016. The Company has reduced its sales and marketing staff from 10 members on January 1, 2016 to 4 as of September 30, 2017. The new sales and marketing strategy targets large integrated delivery networks instead of individual facilities. This strategy requires fewer, but more experienced and technically knowledgeable sales personnel to interact with executive management, laboratory and medical directors. The Company incurred severance expenses related to staff reductions during the nine months ended September 30, 2016 which did not recur during the same period of 2017.

 

The Company renegotiated or eliminated several consulting arrangements targeted at improving market penetration or identifying marketing or distribution partners during the first half of 2016. The result is a reduction of 47% in professional service fees. General consulting services ($190,176 (2016: $295,299)) and marketing services ($161 (2016: $51,246)) accounted for the savings for the nine months ended September 30, 2017.

 

The legal settlement with ChubeWorkx Guernsey, Ltd ("ChubeWorkx"), signed on August 11, 2016, requires the Company to pay a 5% royalty on adjusted gross sales to ChubeWorkx on a quarterly basis. During the nine months ended September 30, 2017, this royalty totaled $128,109 (2016: $117,949).

 

The Company has launched an awareness campaign directed at surgeons, pathologists and laboratory and medical directors regarding the risks associated with heparin induced thrombocytopenia ("HIT") and a campaign directed at health and wellness professionals to introduce the BreathScan Lync™ and OxiChek™ products. In support of the health and wellness project, the Company produced an infomercial in coordination with Balancing Act that aired on May 8, 2017. Expenses related to the production, which occurred in February 2017, totaled $54,700.

 

Research and Development

 

Research and development expenses for the nine months ended September 30, 2017 totaled $952,724, which was a 2% increase as compared to $932,858 for the nine months ended September 30, 2016.

 

The table below summarizes our research and development expenses for the nine months ended September 30, 2017 and 2016 as well as the percentage of change year-over-year:

 

Description

9 MonthsEndedSeptember 30, 2017

9 MonthsEndedSeptember 30, 2016

Percent Change

Personnel Costs

$

727,206

$

539,810

35

%

Clinical Trial Costs

2,453

160,405

(98

)%

Professional Service Costs

89,541

96,515

(7

)%

Other Research and Development Costs

133,524

136,128

(2

)%

Total Research and Development Expenses

$

952,724

$

932,858

2

%

 

Personnel costs increased 35% during the nine months ended September 30, 2017 as compared to the same period of 2016. This increase was a result of the transfer of Dr. Akers' salary and benefits from the General and Administrative department to Research and Development as he assumed his new responsibilities for the Company. In addition, employee benefit expenses ($72,026 (2016: $45,052)) also contributed to the increase.

 

Clinical trial costs decreased 98% during the nine months ended September 30, 2017 as compared to the same period of 2016. The Company performed two clinical trials during the nine months ended September 30, 2016, one to test the effectiveness of the PIFA Chlamydia assay and one for the KetoChek™ health and wellness product. Both studies were completed during 2016 and no significant expense was incurred during the nine months ended September 30, 2017.

 

A reduction in general consulting services ($30,503 (2016: $57,651)) was offset by an increase in engineering and product design fees ($56,164 ($36,593)) for the nine months ended September 30, 2017 resulting in a 7% decline in professional service fees.

 

Moderate decreases in several expense categories were offset by increases in internal resource utilization ($17,110 (2016: $6,976)) and travel expenses ($28,875 (2016 $11,050)) to account for the 2% decrease in other research and development expenses.

 

The following table illustrates research and development costs by project for the nine months ended September 30, 2017 and 2016, respectively:

 

Project

2017

2016

Asthma/Ph

$

52,368

$

-

Breath Alcohol

6,885

1,381

Chlamydia Trachomatis

182,825

10,685

CHUBE

-

22,307

Heparin/PF4

57,180

72,823

HIV

-

16,885

Ketone

7,154

2,125

KetoChek / OxiChek

284,278

365,177

Lithium

-

117,871

METRON

1,098

2,507

Other Projects

59,688

101,659

Pulmo Health

11,361

6,126

SeraSTAT

5,610

-

Sonicator OQ

-

5,447

Tri-Cholesterol

283,685

117,903

VIVO

592

89,962

Total R&D Expenses:

$

952,724

$

932,858

 

Other Income and Expense

 

Other income, net of expense for the nine months ended September 30, 2017 totaled $15,468, which was a 32% decrease as compared to $22,792 for the nine months ended September 30, 2016.

 

The table below summarizes our other income and expenses for the nine months ended September 30, 2017 and 2016 as well as the percentage of change year-over-year:

 

Description

9 MonthsEndedSeptember 30, 2017

9 MonthsEndedSeptember 30, 2016

Percent Change

Currency Translation Gain/(Loss)

$

6,172

$

(1,189

)

619

%

Realized Gain on Investments

3,375

3,421

(1

)%

Interest and Dividends

5,921

20,560

(71

)%

Other Income

-

-

-

%

Total Other Income, Net of Expenses

$

15,468

$

22,792

(32

)%

 

Gains and losses associated with foreign currency transactions increased by 619% during the nine months ended September 30, 2017 as compared to the same period of 2016, primarily a result of the increased strength of the US Dollar compared to the British Pound during the three quarters of 2017.

 

Realized gains, interest and dividend income declined to $9,296 (2016: $23,981). The Company's available capital for investment activities was limited during the nine months ended September 30, 2017 resulting in the decline in investment income.

 

Liquidity and Capital Resources

 

For the nine months ended September 30, 2017 and 2016, the Company generated a net loss attributable to shareholders of $3,193,571 and $2,207,707, respectively. As of September 30, 2017 and December 31, 2016, the Company has an accumulated deficit of $100,673,108 and $94,479,537 and had cash and equivalents totaling $145,311 and $72,700, respectively.

 

Currently, our primary focus is to expand the domestic and international distribution of our PIFA Heparin/PF4 rapid assays. The Company's secondary focus is fully commercializing the health and wellness product line linked to smartphones and tablets. The Company continues commercialization tasks for its PIFA PLUSS® Infectious Disease single-use assays, BreathScan® DKA, and Breath PulmoHealth products, including advancement of the steps required for FDA clearance or CE marking in the EU where necessary.

 

The Company continues to expand the global distribution of our PIFA Heparin/PF4 rapid assays. The Company's future and focus resides in preparing for the launch of our health and wellness product line linked to smartphones and tablets and the Company's rapid manual point-of-care chlamydia assay.

 

Substantial doubt exists about the Company's ability to continue as a going concern within one year after the financial statements are issued. The company has identified three conditions or events that support this determination:

 

The Company's current working capital position

 

Negotiations are underway with a potential customer for the Company's BreathScan OxiChek products and are anticipated to be completed during the three months ending December 31, 2017; however, they have requested product design changes that must be completed prior to the consummation of the purchase agreement. All parties are confident that a solution can be achieved but a significant delay will impact revenue projections.

 

The Company is awaiting a 510(k) approval from the United States Food & Drug Administration ("FDA") for its PIFA Chlamydia product. An extended delay in receipt of this approval will negatively impact revenue projections.

 

Please refer to Note 3, Management Plan, of the Financial Statements in the Form 10-Q for the Company's plans to address the going concern.

 

We expect that our primary expenditures will be to continue development of our health and wellness line, Tri-cholesterol test, PIFA Chlamydia assay and PIFA PLUSS® Infectious Disease single-use assays products, enrolling patients in clinical trials to support performance claims, generating studies in peer-reviewed journals to support product marketing, and provide data for the FDA 510(k) clearance/CE certifications processes when required. We will also continue to support commercialization and marketing activities of commercialized products. Based upon our experience, clinical trial and related regulatory expenses can be significant costs. Steps to achieve commercialization of emerging products will be an ongoing and evolving process with expected improvements and possible subsequent generations being evaluated for commercialized and emerging tests. Should we be unable to achieve FDA clearance for products that require such regulatory "approval", develop performance characteristics for rapid tests that satisfy market needs, or generate sufficient revenue from commercialized products, we would need to rely on other business or product opportunities to generate revenue and costs that we have incurred for the patents may be deemed impaired.

 

Capital expenditures for the nine months ended September 30, 2017 were $37,191 (2016: $88,023). Capital expenditures, primarily for production and laboratory costs for the year ending December 31, 2017 are expected to be approximately $50,000. As per the Company's lease agreement, the owner of the facility will be handling the majority of facility upgrades, and we anticipate financing any production and laboratory capital expenditures through working capital.

 

The Company may enter into generally short-term consulting and development agreements primarily for testing services and in connection with clinical trials conducted as part of the Company's development process which may include activities related to the development of technical files for FDA 510(k) clearance submissions. Such commitments at any point in time may be significant but the agreements typically contain cancellation provisions.

 

We lease our manufacturing facility which also contains our administrative offices. Our current lease was executed January 1, 2013 and is effective through December 31, 2019. The Company has leased this property from the current owner since 1997.

 

The Company executed a lease for a satellite office in Ramsey, New Jersey on June 23, 2017 which is effective through May 31, 2019. The satellite office supports members of executive management and the sales and marketing team with convenient access to resources in the metro New York area.

 

Due to recent market events that have adversely affected all industries and the economy as a whole, management has placed increased emphasis on monitoring the risks associated with the current environment, particularly the recoverability of current assets, the fair value of assets, and the Company's liquidity. At this point in time, there has not been a material impact on the Company's assets and liquidity. Management will continue to monitor the risks associated with the current environment and their impact on the Company's results.

 

The table below summarizes our cash flows for the nine months ended September 30, 2017 and 2016 as well as the percentage of change year-over-year:

 

Description

9 MonthsEndedSeptember 30, 2017

9 MonthsEndedSeptember 30, 2016

Percent Change

Cash at beginning of period

$

72,700

$

402,059

(82

)%

Loss from operations

(3,193,571

)

(2,207,707

)

(45

)%

Adjustments

Non-Operating Gains

-

-

-

%

Non-Cash Activities

266,881

(846,749

)

129

%

Cash Used in Operating Activities

Cash Consumed by Operating Activities

(935,622

)

(754,781

)

(12

)%

Cash Contributed by Operating Activities

207,454

275,588

(50

)%

Cash Flows from Investing Activities

Cash Consumed by Investing Activities

(2,746,339

)

(125,383

)

(2,090

)%

Cash Contributed by Investing Activities

2,749,119

3,452,833

(20

)%

Cash Flows from Financing Activities

Cash Consumed by Financing Activities

-

-

-

%

Cash Contributed by Financing Activities

3,714,511

-

100

%

Cash at end of period

$

135,133

$

195,860

(31

)%

 

The Company's net cash provided by investing and financing activities totaled $6,463,630 during the nine months ended September 30, 2017. Cash of $2,746,339 was consumed by capital expenditures and the purchase of marketable securities. Proceeds from the sale of marketable securities contributed cash of $2,749,119 for the period ended September 30, 2017.

 

The Company's net cash provided by investing and financing activities totaled $3,452,833 during the nine months ended September 30, 2016. Cash of $125,383 was consumed by capital expenditures and the purchase of marketable securities. Proceeds from the sale of marketable securities contributed cash of $3,452,833 for the period ended September 30, 2016.

 

Our net cash consumed by operating activities totaled $3,654,858 during the nine months ended September 30, 2017. Cash was consumed by the loss of $3,193,571 plus non-cash adjustments of $182,866 for depreciation and amortization of non-current assets, $46,239 for allowances for doubtful accounts, $15,784 for amortization of deferred compensation, $14,502 for share based compensation, $2,183 for options issued for services and $5,455 for restricted stock issued for services less and $148 for accrued income on marketable securities. For the nine months ended September 30, 2017, decreases in deposits and other receivables of $2,034, prepaid expense of $68,798, prepaid expense - related parties of $38,438 and an increase in trade and other payables of $85,684 and deferred revenue of $12,500 provided cash, primarily related to routine changes in operating activities. A net increase in trade receivables of $570,065, trade receivables - related parties of $93,109, inventories of $49,346 and other assets of $9,280 and a decrease in trade and other payables - related party of $213,822 consumed cash from operating activities.

 

Our net cash consumed by operating activities totaled $3,533,649 during the nine months ended September 30, 2016. Cash was consumed by the loss of $2,207,707 plus non-cash adjustments of $221,946 for depreciation and amortization of non-current assets, $146,196 for allowances for doubtful accounts, $24,834 for amortization of deferred compensation, $22,828 for share based compensation, $23,676 for options issued for services and $13,380 for accrued income on marketable securities less $1,299,609 for the reversal of a bad debt allowance. For the nine months ended September 30, 2016, decreases in deposits and other receivables of $65,855. prepaid expense of $91,706, prepaid expense - related party of $58,974 and an increase in trade and other payables - related party of $59,673 provided cash, primarily related to routine changes in operating activities. A net increase in trade receivables of $275,541 and inventories of $60,862 and a decrease in trade and other payables of $418,998 consumed cash from operating activities.

 

Financial Statements

 

Condensed Consolidated Balance Sheets

September 30, 2017 and December 31, 2016

 

2017

2016

(unaudited)

(audited)

ASSETS

Current Assets

Cash

$

135,133

$

72,700

Marketable Securities

10,178

50,001

Trade Receivables, net

1,125,097

601,271

Trade Receivables - Related Parties, net

125,001

31,892

Deposits and other receivables

21,748

23,782

Inventories, net

2,085,867

2,036,521

Prepaid expenses

99,479

168,277

Prepaid expenses - Related Parties

380,789

202,500

Total Current Assets

3,983,292

3,186,944

Non-Current Assets

Prepaid expenses - Related Party

53,456

270,183

Property, Plant and Equipment, net

242,048

259,392

Intangible Assets, net

1,173,444

1,301,775

Other Assets

76,093

66,813

Total Non-Current Assets

1,545,041

1,898,163

Total Assets

$

5,528,333

$

5,085,107

LIABILITIES

Current Liabilities

Trade and Other Payables

$

1,549,047

$

1,463,363

Trade and Other Payables - Related Parties

20,245

234,067

Deferred Revenue

12,500

Total Current Liabilities

1,581,792

1,697,430

Total Liabilities

1,581,792

1,697,430

STOCKHOLDERS' EQUITY

Convertible Preferred Stock, No par value, 50,000,000 shares authorized, no shares issued and outstanding as of September 30, 2017 and December 31, 2016

-

-

Common Stock, No par value, 500,000,000 shares authorized, 8,901,245 and 5,452,545 issued and outstanding as of September 30, 2017 and December 31, 2016

104,628,437

100,891,786

Deferred Compensation

(8,788

)

(24,572

)

Accumulated Deficit

(100,673,108

)

(97,479,537

)

Accumulated Other Comprehensive Income

-

-

Total Stockholders' Equity

3,946,541

3,387,677

Total Liabilities and Stockholders' Equity

$

5,528,333

$

5,085,107

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

 

Three months ended

Nine months ended

September 30,

September 30,

2017

2016

2017

2016

Revenues:

Product Revenue

$

638,331

$

613,198

$

2,378,811

$

2,307,328

Product Revenue - Related parties

-

-

124,631

380

License & Service Revenue

37,500

-

37,500

-

Total Revenues

675,831

613,198

2,540,942

2,307,708

Cost of Sales:

Product Cost of Sales

(323,527

)

(236,700

)

(846,487

)

(713,576

)

Gross Income

352,304

376,498

1,694,455

1,594,132

Administrative Expenses

819,565

558,293

2,440,023

2,298,099

Sales and Marketing Expenses

342,763

408,248

1,254,308

1,647,003

Sales and Marketing Expenses - Related Party

34,328

117,949

128,108

117,949

Research and Development Expenses

290,447

247,578

929,730

932,858

Research and Development Expenses - Related Party

-

-

22,994

-

(Reversal of Allowance for) Bad Debt Expenses- Related parties

-

(1,299,609

)

-

(1,299,609

)

Amortization of Non-Current Assets

42,777

42,777

128,331

128,331

(Loss)/Income from Operations

(1,177,576

)

301,262

(3,209,039

)

(2,230,499

)

Other (Income)/Expenses

Foreign Currency Transaction (Gain)/Loss

3,195

(3,629

)

(6,172

)

1,189

Interest and Dividend Income

(3,127

)

(5,264

)

(9,296

)

(23,981

)

Other Income

-

-

-

-

Total Other (Income)/Expense

68

(8,893

)

(15,468

)

(22,792

)

(Loss)/Income Before Income Taxes

(1,177,644

)

310,155

(3,193,571

)

(2,207,707

)

Income Tax Benefit

-

-

-

-

Net (Loss)/Income Attributable to Common Stockholders

(1,177,644

)

310,155

(3,193,571

)

(2,207,707

)

Other Comprehensive Income/(Loss)

Net Unrealized Gain/(Loss) on Marketable Securities

(1,009

)

(2,837

)

-

3,691

Total Other Comprehensive Income/(Loss)

(1,009

)

(2,837

)

-

3,691

Comprehensive (Loss)/Income

$

(1,178,653

)

$

307,318

$

(3,193,571

)

$

(2,204,016

)

Basic income/(loss) per common share

$

(0.13

)

$

0.06

$

(0.39

)

$

(0.41

)

Diluted income/(loss) per common share

$

(0.13

)

$

0.06

$

(0.39

)

$

(0.41

)

Weighted average basic common shares outstanding

8,892,079

5,434,212

8,268,851

5,428,859

Weighted average diluted common shares outstanding

8,892,079

5,508,545

8,268,851

5,428,859

 

Condensed Consolidated Statement of Changes in Stockholder's Equity

For the nine months ended September 30, 2017

 

Common

Accumulated

Shares

Other

Issued and

Common

Deferred

Accumulated

Comprehensive

Total

Outstanding

Stock

Compensation

Deficit

Income/(Loss)

Equity

Balance at December 31, 2016 (audited)

5,452,545

$

100,891,786

$

(24,572

)

$

(97,479,537

)

$

-

$

3,387,677

Net loss

-

-

-

(3,193,571

)

-

(3,193,571

)

Public offering of common stock, net of offering costs of $494,406

1,789,500

1,652,994

-

-

-

1,652,994

Private offering of common stock, net of offering costs of $267,443

1,448,400

1,760,317

-

-

-

1,760,317

Exercise of warrants for common stock

200,800

301,200

-

-

-

301,200

Amortization of deferred compensation

-

-

15,784

-

-

15,784

Issuance of non-qualified stock options to key employees

-

14,502

-

-

-

14,502

Issuance of non-qualified stock options for services to non-employees

-

2,183

-

-

-

2,183

Issuance of restricted stock for services for non-employees

10,000

5,455

-

-

-

5,455

Balance at September 30, 2017 (unaudited)

8,901,245

$

104,628,437

$

(8,788

)

$

(100,673,108

)

$

-

$

3,946,541

 

Condensed Consolidated Statements of Cash Flows

For the nine months ended September 30, 2017 and 2016

(unaudited)

 

2017

2016

Cash flows from operating activities

Net loss

$

(3,193,571

)

$

(2,207,707

)

Adjustments to reconcile net loss to net cash used in operating activities:

Accrued income on marketable securities

(148

)

13,380

Depreciation and amortization

182,866

221,946

Allowance for/(reversal of) doubtful accounts

46,239

(1,153,413

)

Amortization of deferred compensation

15,784

24,834

Share based compensation to employees - options

14,502

22,828

Share based compensation to non-employees - options

2,183

23,676

Share based compensation to non-employees - restricted stock

5,455

-

Changes in assets and liabilities:

Increase in trade receivables

(570,065

)

(275,541

)

Increase in trade receivables - related parties

(93,109

)

-

Decrease in deposits and other receivables

2,034

65,855

Increase in inventories

(49,346

)

(60,862

)

Decrease in prepaid expenses

68,797

91,706

Decrease in prepaid expenses - related parties

38,438

58,974

Increase in other assets

(9,280

)

-

Increase/(decrease) in trade and other payables

85,685

(418,998

)

Increase/(decrease) in trade and other payables - related parties

(213,822

)

59,673

Increase in deferred revenue

12,500

-

Net cash used in operating activities

(3,654,858

)

(3,533,649

)

Cash flows from investing activities

Purchases of property, plant and equipment

(37,191

)

(88,023

)

Purchases of marketable securities

(2,709,148

)

(37,360

)

Proceeds from sale of marketable securities

2,749,119

3,452,833

Net cash provided by investing activities

2,780

3,327,450

Cash flows from financing activities

Net proceeds from issuance of common stock

3,413,311

-

Net proceeds from exercise of warrants for common stock

301,200

-

Net cash provided by financing activities

3,714,511

-

Net increase/(decrease) in cash

62,433

(206,199

)

Cash at beginning of period

72,700

402,059

Cash at end of period

$

135,133

$

195,860

Supplemental Schedule of Non-Cash Financing and Investing Activities

Issuance of a restricted common stock grant to an officer

$

-

$

54,725

Net unrealized gains on marketable securities

$

-

$

3,691

Reclassification of note receivable to inventory

$

-

$

750,000

Reclassification of note receivable to prepaid expense

$

-

$

549,609

 

 

Cautionary Statement Regarding Forward Looking Statements

 

Statements contained herein that are not based upon current or historical fact are forward-looking in nature and constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements reflect the Company's expectations about its future operating results, performance and opportunities that involve substantial risks and uncertainties. These statements include but are not limited to statements regarding the intended terms of the offering, closing of the offering and use of any proceeds from the offering. When used herein, the words "anticipate," "believe," "estimate," "upcoming," "plan," "target", "intend" and "expect" and similar expressions, as they relate to Akers Biosciences, Inc., its subsidiaries, or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company's actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
QRTDBBDBIGBBGRS
Date   Source Headline
6th Mar 20197:00 amRNSResult of Special Meeting of Shareholders
6th Feb 20199:00 amRNSHolding in Company
6th Feb 20197:01 amRNSForm DEFA14A Filing - Additional Proxy Materials
6th Feb 20197:00 amRNSNotice of Special Meeting of Shareholders
5th Feb 20191:00 pmRNSFurther Re. Directorate Change
28th Jan 20197:00 amRNSForm PRE 14A Filing
28th Dec 20183:45 pmRNSDirector/PDMR Shareholding
19th Dec 20184:45 pmRNSIntention to Delist from AIM
18th Dec 20186:00 pmRNSIssue of Equity
10th Dec 20187:00 amRNSResult of AGM & Form 8-K Filing
26th Nov 20182:00 pmRNSFurther Re. Notice of AGM
19th Nov 20182:00 pmRNSFurther Re. Strategic Update
16th Nov 20184:00 pmRNSReverse Stock Split Update
15th Nov 20187:00 amRNSNotice of AGM
15th Nov 20187:00 amRNS3rd Quarter 2018 Results
12th Nov 20187:00 amRNSForm 8-K Filing
8th Nov 20187:30 amRNSSuspension - Akers Biosciences, Inc.
8th Nov 20187:00 amRNSTemporary Suspension of Share Trading on LSE
7th Nov 20182:50 pmRNSStrategic Update & Reverse Stock Split
2nd Nov 20184:15 pmRNSIssue of Equity - Completion & Form 8-K/A Filing
2nd Nov 201810:52 amRNSUpdate Re Issue of Equity
31st Oct 20181:35 pmRNSIssue of Equity & Form 8-K
19th Oct 20182:53 pmRNSForm 8-K Filing
19th Oct 20187:00 amRNSDirectorate Change
12th Oct 20187:00 amRNSForm 8-K/A Filing & Other Updates
8th Oct 20187:00 amRNSDirectorate Change & Other Information
13th Sep 20187:00 amRNSDirectorate Change - Form 8-K Filing
15th Aug 20187:00 amRNS2nd Quarter & H1 2018 Results
27th Jul 20183:00 pmRNSHolding(s) in Company
26th Jul 20187:30 amRNSRestoration - Akers Biosciences Inc.
26th Jul 20187:00 amRNSMailing of 2017 Annual Report
20th Jul 20183:05 pmRNSIssue of Equity
20th Jul 20183:00 pmRNSCorrection: Issue of Equity
18th Jul 201812:00 pmRNSIndependent Sales Representative Agreements - PIFA
16th Jul 20187:03 amRNS1st Quarter 2018 Results
16th Jul 20187:02 amRNSFinal Results 2017 (Restated)
16th Jul 20187:01 amRNS3rd Quarter 2017 Results (Restated)
16th Jul 20187:00 amRNS2nd Quarter 2017 Results (Restated)
3rd Jul 201812:00 pmRNSIndependent Sales Representative Agreements - PIFA
2nd Jul 20187:30 amRNSSuspension - Akers Bioscience, Inc
29th Jun 20187:00 amRNSTemporary Suspension
21st Jun 20187:00 amRNSNotification of Class Action
20th Jun 20187:22 amRNSForm 8-K Filing
18th Jun 20187:00 amRNSForm 8-K Filing
6th Jun 20187:00 amRNSForm 8-K/A Filing
4th Jun 20187:00 amRNSForm 8-K Filing
31st May 20187:25 amRNSUpdate Re. Nasdaq Minimum Bid Price Requirement
29th May 20187:00 amRNSDirectorate Change
29th May 20187:00 amRNSWithdrawal of 510(k) Submission - Chlamydia Assay
29th May 20187:00 amRNSNotice of Form 10-Q Filing Delinquency from Nasdaq

Due to London Stock Exchange licensing terms, we stipulate that you must be a private investor. We apologise for the inconvenience.

To access our Live RNS you must confirm you are a private investor by using the button below.

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.