AKR.L Regulatory News (AKR)

For Immediate Release

Akers Biosciences, Inc.

Financial Results for 2014

Revenues Up 24% - Flagship PIFA Heparin/PF4 Rapid Test Sales Double

Akers Biosciences, Inc. (NASDAQ: AKER) (AIM: AKR.L), ("Akers" or the "Company"), a medical device company focused on reducing the cost of healthcare through faster, easier diagnostics, announces financial results for the fiscal year ended December 31, 2014. 

2014 Financial Highlights:

· 24% increase in revenue for 2014 to $4,427,174 (2013: $3,577,851)

· EBITDA was a loss of $2,854,723 (2013: loss of $1,172,376)

· Cash and marketable securities of $9,720,802 (2013: $103,634)

· Sales of Akers' rapid test to detect a potentially fatal allergy to the blood thinner Heparin (PIFA Heparin/PF4) more than doubled in 2014 to $2,241,405

· First international sales of PIFA Heparin/PF4 products achieved during 2014 with $1,000,000 initial order from China

2014 Operational Highlights:

· Completed IPO on NASDAQ Capital Market in January 2014, raising approximately $15 million in gross proceeds

· Significant expansion of sales and marketing with senior managerial appointments in the US and EU; and sales reps placed in multiple strategic locations throughout US

· PIFA Heparin/PF4 products are now being marketed in the US by four leading healthcare product distributors as well as direct sales force

· Advancements in international sales strategy with product distribution agreements signed for territories including India, the Middle East, Australia, Singapore and multiple countries within Europe

· Initial order valued at $864,000 for rapid cholesterol tests for Australia, Singapore and the Middle East

· Established Joint Venture in China for marketing and distribution of Akers products

· Commenced clinical trials for the first rapid finger stick blood test for chlamydia

Chairman's Statement

January 2014's NASDAQ IPO facilitated a significant acceleration of our commercialization and product development process; and we are beginning to see the benefits.

The Company has been able to attract multiple experienced sales and marketing professionals both at the head office and other strategic locations across the US as well as in the EU. We believe the benefits are already evident in the growing number of distribution partnerships formed, the growth in revenues and, in particular, the more than doubling of sales of our flagship rapid test for detecting an allergy to the widely used blood thinner Heparin. We believe this rapid test has the capacity to save an average US hospital upwards of $1 million per annum while at the same time accelerating the process of diagnosis and therefore the speed at which the right treatment is given to the patient. I believe we are scratching the surface of a very substantial existing market for Heparin PF4 antibody testing which can be replaced with Akers' faster and more cost-effective single-use devices. This proposition is actively being communicated to US hospitals by the Company's marketing partners and by our internal sales team.

2014 has seen Akers add new distributors in the Middle East, Australia, Singapore, India, France, Belgium, the Netherlands, Luxembourg, Switzerland and Lichtenstein. During the period the Company entered into a substantial Joint Venture agreement for the marketing and distribution of all Akers' rapid tests - excluding PIFA Heparin/PF4 - in China; while our Chinese distributor for PIFA Heparin/PF4 placed its first order ($1m) for the products in November 2014. This initial stocking order provides some insight into just how large a market we believe China can become for Akers. In fact, we believe China to be the second biggest potential market in the world for our PIFA Heparin/PF4 tests after the US.

The Company's improving balance sheet and growing sales is also enabling Akers to fully develop a range of products that serve the nutraceutical and weight loss marketplaces. These are large marketplaces in all developed countries but nowhere more so than in the US where the Company is currently focusing its efforts. Akers' technology can measure biomarkers present in breath condensate related to various metabolic processes. As a result, Akers has used its proprietary, easy-to-use platform to design disposable breath tubes that measure ketone (acid) production associated with fat-burning and oxidative stress levels that relate to cellular damage and the development of many preventable diseases. The Company is developing a consumer-focused reagent device, and linking this device to an app for smartphones and tablets that can not only produce a result, but also track progress over time. Initial marketing activities have commenced for these products and the Company is preparing for commercialization.

While the Company's sales and marketing professionals focus on growing sales of existing product lines, the development team continues to advance a pipeline of rapid tests designed to improve the process of diagnosis in large markets such as respiratory disease, where we are developing breath tests for lung cancer, for asthma and for chronic obstructive pulmonary disease; in diabetes, where we are developing a breath test to help diabetics rapidly evaluate their ketone levels without the need to provide blood or urine samples; in cardiovascular disease, where we are developing, on the commission of Konica Minolta, a rapid blood test for heart attacks; and in infectious diseases, where we are developing - among other tests - an on-the-spot finger stick blood test for chlamydia, one of the most prevalent of all STDs.

What each of these areas has in common is that the market for testing is already established with existing diagnostic procedures which could be replaced with faster, easier and lower-costing technology.

Outlook

Akers exited 2014 with an improved balance sheet, higher revenues, with a more substantial sales and marketing function, new distribution partners in new markets and with a pipeline of tests advancing through the developmental process. Among our key goals for 2015 are the continued acceleration of PIFA Heparin/PF4 sales in the US; while assisting our international distributors in establishing these tests in overseas markets. Additionally we will in the coming months advance the consumer proposition for the Company's Wellness product line which we believe could be significant. I look forward to reporting further progress throughout the year ahead.

Raymond F. Akers, Jr. PhD, Co-founder and Executive Chairman of the Board

March 23, 2015

Financial Statements

A summary report including the key financial statements for the fiscal year 2014 appears below. A Form 10-K containing the detailed financial statements is available for viewing on the Company's website at www.akersbiosciences.com or www.sec.gov.

Conference Call Information:

ABOUT AKERS BIOSCIENCES, INC.

Akers Biosciences 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.akersbiosciences.com. Follow us on Twitter @AkersBio

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.

For more information:

Akers Biosciences, Inc.

Raymond F. Akers, Jr. PhD

Executive Chairman of the Board

Tel. +1 856 848 8698

finnCap (UK Nominated Adviser and Broker)

Geoff Nash / Scott Mathieson (Corporate Finance)

Steve Norcross (Broking)

Tel. +44 (0)20 7220 0500

Taglich Brothers, Inc. (US Investor Relations)

Chris Schreiber

Tel. +1 917 445 6207

Vigo Communications (UK Investor Relations)

Ben Simons / Alexandra Roper

Tel. +44 (0)20 7016 9570

Email: akers@vigocomms.com

Summary Report for the Fiscal Year Ended December 31, 2014

At December 31, 2014, The Company had cash of $455,841, working capital of $11,215,747, stockholders' equity of $99,691,096 and an accumulated deficit of $84,864,086. The Company believes that its current working capital position will be sufficient to meet its estimated cash needs for at least 36 months.

The fair value of the Company's investments in marketable securities as of December 31, 2014 was $9,264,961 (2013: $-). The Company restricts its investments to Level I and Level II securities and maturities generally range up to three years. Securities are evaluated with an emphasis on minimizing risk while achieving reasonable rates of return on the investment. These marketable securities are a key component of the Company's cash management strategy and as such are monitored regularly.

Revenue

The Company's total revenue for the year ended December 31, 2014 was $4,427,174, a 24% increase over the same period in 2013. Revenues improved in two of the major product lines, PIFA Heparin/PF4 Rapid Assay increased by 110% and the sales of Rapid Enzymatic Assay products which did not exist in 2013. These increases were offset by decreases in the MPC Product line by 51%, other products, which includes shipping and handling fees, by 36% and Licensing revenues by 36%. The Company's MicroParticle Catalyzed Biosensor ("MPC") product revenues associated with our breath alcohol products decreased to $918,049 (2013: $1,885,028) during the year ended December 31, 2014. This is attributable to a decline in orders from our world-wide distributor of this product, ChubeWorkx Guernsey Limited. During the year ended December 31, 2014, ChubeWorkx accounted for $766,379 (2013: $1,719,340) of our MPC product revenue."). The decline of orders from ChubeWorkx is as a result of the French government's postponement, indefinitely, of the fine that was to be imposed for drivers failing to possess breathalyzers in their vehicles. Although drivers are still required to carry the self-tests, the lack of a monetary fine has reduced product demand. It is unknown how long this interruption will continue for, but the Company's distributor of alcohol breathalyzers believes that it is well positioned to resume large volume sales of the product should full enforcement resume. ChubeWorkx accounted for an additional $333,333 in licensing fees. 

Sales of the Company's PIFA Heparin/PF4 Rapid Assay ("PIFA") products increased by 110% during the year ended December 31, 2014 to $2,241,405 (2013: $1,065,432). The Company's dedicated technical sales account executives are supporting over 300 sales representatives of Akers' US distribution partners, Cardinal Health ("Cardinal Health"), Medline Industries, Inc. ("Medline"), Fisher HealthCare ("Fisher Healthcare") and Typenex Medical, LLC ("Typenex"). The Company's addition of Typenex and Medline during the second quarter and the relationship-building initiative with our other partners has already delivered a measureable increase in product trials and adoptions. Domestic sales for the year ended December 31, 2014 of our distributors, Cardinal Health and Fisher Health, accounted for $1,064,733 of the total PIFA Heparin/PF4 Rapid Assay as compared to $849,346 for the same period of 2013 and individually represented 36% and 11% of such sales. The remaining $176,672 of domestic sales was generated from Akers' new distributors and direct customers during 2014 as compared to $216,086 in 2013.

International sales of the Company's PIFA Heparin/PF4 Rapid Assay products began in the fourth quarter with the receipt of the initial stocking order from NovoTek Therapeutics, Inc. ("NovoTek"). This $1,000,000 initial order shipped in December, 2014 and accounted for 45% of the Company's total PIFA Heparin/PF4 Rapid Assay product sales for the year ended December 31, 2014.

Revenue from Rapid Enzymatic Assay ("REA") products for the year ended December 31, 2014 totaled $864,000 (2013: $-). This revenue is attributable to The Company's new distributor in Australia, Singapore, Oman and the United Arab Emirates, 36 Strategies General Trading, LLC ("36S"), a related party, who placed their first order with the Company during the period. The Company is working with 36S on a number of product approvals in the territory.

Cost of sales for the year ended December 31, 2014 decreased by 39% to $1,175,232 (2013: $1,913,844). The reduction primarily reflects the change in emphasis from the production of Breathalyzers (MPC products) in 2013 to PIFA Heparin/PF4 Rapid Assay (PIFA products) during 2014. Direct cost of sales declined to 18% (2013: 39%) and indirect cost of sales declined to 11% (2013: 24%) of product revenue for year ended December 31, 2014. Overall, cost of sales, as a percentage of product revenue, was 29% and 63% for the years ended December 31, 2014 and 2013.

The change of production emphasis from MPC products to PIFA products is the primary contributor to the improvement in direct costs additionally, the Company had removed its REA products from its active inventory while the Company worked to develop a market and identify a distributor for the product line. As a result of this inventory write-down, there was no significant cost of sales for the REA products reported for the year ended December 31, 2014. Direct costs associated with the MPC products increased to 44% (2013: 41%) and PIFA products increased to 15% (2013: 12%) related to the loss of bulk purchase discounts for MPC components and higher costs of raw materials for PIFA.

The decrease in indirect cost of sales is attributed to decreases in shipping expenses, repairs and maintenance of equipment, and manufacturing supplies due to the reduced levels of production and improvements to the component inventory handling and reporting procedures that resulted in a reduction of materials lost to the production process during the year ended December 31, 2014.

Licensing fee revenue declined to $343,333 (2013: $533,333). The decline is associated with a one-time restricted licensing fee of $200,000 received in the first quarter of 2013 from a customer while they performed a product evaluation project.

Akers' gross profit margin improved to 71% of product revenue for the year ended December 31, 2014 as compared to 37% in 2013. The improvement in gross profit margin was derived from events described above for the year ended December 31, 2014.

General and Administrative Expenses

General and administrative expenses in the year ended December 31, 2014 totaled $3,979,080, which was a 161% increase as compared to $1,524,626 for the year ended December 31, 2013. The increase was the result of personnel costs ($663,879 (2013: $139,661)), professional services ($1,008,508 (2013: $756,078)), stock market and investor services ($650,559 (2013: $128,069)), travel ($124,611 (2013: $5,987)) and the issuance of stock options to board member, officers and key employees ($357,276 (2013: $-)). Additionally, an accrual of $697,300 has been recorded for restricted stock grants issued to board members on January 9, 2015 as a bonus for services rendered during the year ended December 31, 2014.

The increase in personnel costs relates to the salaries and benefits of the Chief Executive Officer and the Vice President of Finance, positions that were previously contracted. Increases in professional services and stock market and investor services are directly related to the maintenance of our stock listings in the United States (NASDAQ) and Great Britain (London Stock Exchange). The dual listing requires us to maintain public relations, stock registrars, nominated advisors and legal counsel for both markets and requires additional accounting services to insure compliance with regulators.

Sales and Marketing Expenses

Sales and marketing expenses in the year ended December 31, 2014 totaled $1,302,103, which was a 90% increase as compared to $684,720 for the year ended 2013. The increase was the result of the use of market consultants and other professionals ($550,515 (2013: $21,325)) to develop sales and marketing strategies for the Company's product lines and travel ($72,625 (2013: $24,599)) in support of technical customer services and market development.

Research and Development

Research and development expenses in the year ended December 31, 2014 totaled $916,308, which was a 9% decrease as compared to $1,006,800 for the year ended 2013. The decrease was the result of personnel reassignments which reduced personnel costs ($586,027 (2013: $840,177)), the consumption of raw materials ($10,917 (2013: $47,979)) and travel ($796 (2013: $13,900)) which was offset by increases professional services ($85,702 (2013: 7,419)), supplies ($54,157 (2013: $27,216)) and the issuance of stock options to key employees ($120,203 (2013: $-)). The professional services fees were related to the significant increase in activities related to obtaining regulatory approvals and the certification of our Quality Management System by the International Standards Organization ("ISO") 13485:2003 which was achieved in February 2015.

Other Income and Expense

Other income decreased for the year ended December 31, 2014 over the same period in 2013, primarily as a result of income from two notable events. On June 13, 2013, Akers sold its interest in (en)10, the Company's exclusive CHUBE distributor based in the UK, to Chubeworkx for $100,000; a realized gain of $99,710, representing the difference between the sale price and carried value of the interest. We have determined that the sale of our interest was an independent transaction, unrelated to the extension of the licensing agreement to include North America.

In addition, the Company recognized $91,286 in 2013 as compared to $4,669 as other income from the net proceeds gained from Akers' insurer demutualizing upon receiving a payment of such amount representing our share of the demutualization as determined by the insurer.

Other items, including interest, dividends and other miscellaneous income amounted to $72,285 for the year ended December 31, 2014 as compared to $1,037 for the year ended December 31, 2013. During 2013, approximately $91,905 in old trade payables were reversed and the income recognized as miscellaneous income.

Income Taxes

As of December 31, 2014 and 2013, the Company had Federal net operating loss carry forwards of approximately $51,300,000 and $47,600,000, respectively, expiring through the year ending December 31, 2034. As of December 31, 2014 and 2013, the Company had New Jersey state net operating loss carry forwards of approximately $11,900,000 and $8,100,000, respectively, expiring the year ending December 31, 2021.

Liquidity and Capital Resources

For the years ended December 31, 2014 and 2013, the Company generated a net loss attributable to shareholders' of $3,142,960 and $1,526,773, respectively. As of December 31, 2014 and 2013, the Company has an accumulated deficit of $84,864,086 and $81,721,126 and had cash and cash equivalents totaling $455,841 and $103,634, respectively.

Currently, our primary focus is to expand the domestic and international distribution of our PIFA Heparin/PF4 rapid assays. The Company continues initial commercialization tasks for METRON and VIVO, as well as development activities for its PIFA PLUSS® Infectious Disease single-use assays, Breath Ketone "Check", and Breath PulmoHealth "Check" products, including advancement of the steps required for FDA clearance or CE marking in the EU where necessary.

We expect to continue to incur losses from operations for the near-term and these losses could be significant as we incur product development, clinical and regulatory activities, contract consulting and other product development and commercialization related expenses. We believe that our current working capital position will be sufficient to meet our estimated cash needs for at least 36 months. We are closely monitoring our cash balances, cash needs and expense levels. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might result in the possible inability of the Company to continue as a going concern.

We expect that our primary expenditures will be to continue development of PIFA PLUSS® Infectious Disease single-use assays, Breath Ketone "Check" and Breath PulmoHealth "Check" products and enroll patients in clinical trials to support performance claims, generate 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 in-line products (PIFA Heparin/PF4 rapid assays, PIFA PLUSS® PF4, breath alcohol detectors, METRON and VIVO) in the US and internationally. 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.

On December 31, 2014 a note of $1,475,766 was issued to the Company in exchange for the Company's open trade receivables from ChubeWorkx Guernsey Limited, a major shareholder. It is payable in sixty equal installments of $27,734 commencing January 1, 2015 and has an interest rate of 5% per annum. Installments due on the first of January, February and March 2015 have been settled. In the event of default, the Company, at its sole discretion, has the right to redeem any and all Company shares owned by ChubeWorkx Guernsey Limited to satisfy the monies owed to the Company under this note.

Operating Activities

The Company's net cash consumed by operating activities totaled $3,883,929 during the year ended December 31, 2014. Cash was consumed by the loss of $3,127,167 less non-operating gains of $26,203 plus non-cash adjustments of $349,398 for depreciation and amortization of non-current assets and $746,400 for share based compensation and services. For the year ended December 31, 2014, decreases in inventory and other assets of $179,306 and an increase in trade and other payables of $538,017 provided cash, primarily related to routine changes in operating activities. A net increase in trade receivables, notes receivables - related party, and other receivables of $2,203,761, a decrease in other payables - related party of $6,586 and a net decrease in deferred revenue of $333,333 consumed cash from operating activities. 

Key Financial Statements for the Fiscal Year Ended December 31, 2014

Condensed Consolidated Balance Sheets

December 31, 2014 and 2013

Condensed Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statement of Cash Flow

Years ended December 31, 2014 and 2013