OXYSURE SYSTEMS REPORTS FOURTH QUARTER AND FULL-YEAR 2012 RESULTS
Conference Call at 4:45 pm ET on April 1, 2013
Frisco, Texas, April 1, 2013 – OxySure®Systems, Inc. (OXYS: OTCQB) (“OxySure,” or the “Company”), today reported financial and operating results for the fourth quarter and year ended December 31, 2012.
Fiscal Year 2012 Highlights:
- Revenues increased 46%, led by an 43% increase in product sales in the United States
- Gross profit increased 113%; gross margins up from 44.2% to 64.6%
- General & administrative expenses down 14%
- Interest expense down by $401,594 or 66%
- Notes payable decreased by $2,252,789
- Stockholder equity increased by $2,125,014
- Cash outflows from operations increased by $569,004
- Net loss per share for the year down from $.10 to $.04
Julian T. Ross, Chairman of the Board and Chief Executive Officer of OxySure stated, “We continued to build our brand and increase sales in our commercial market segment. We added Global Industrial, a division of Systemax and AED Professionals in the U.S. and Aero Healthcare to sell our products in Australia, New Zealand and the U.K. We have opportunistically invested in our sales and marketing initiatives, which include the addition of three territory representatives and several agents. These investments are just beginning to show results and we expect to see the financial contribution from these efforts accelerate in future quarters.”
For the fiscal year ended December 31, 2012, revenues increased by 46% to $269,697 from $185,209 in the comparable period last year. The increase was driven by a 43% increase in product sales in the United States. In fiscal year 2012, the Company added a significant new distributor in the AED sector, expanding its presence in the “AED companion market.” While revenues from K-12 education markets remained stable, revenues from international customers were strong, increasing by approximately 49% compared to 2011. The Company also expanded its commercial customer base, adding Halliburton, Oshkosh, Kinder Morgan, and Four Seasons to its growing list of marquee customers. Unit cartridge reorder rates were especially encouraging, representing approximately 35% of base unit sales for a 24-month sample period ending December 2012. This is consistent with historical trends of rising reorders as customers become more accustomed to OxySure’s products.
Gross profit was $174,110 for the twelve months ended December 31, 2012, an increase of 113%, primarily due to the combined effect of an increase in service revenues, and an increase in product gross margins. Gross margin was 64.6%, up significantly from 44.2% in 2011.
Selling, general and administrative expenses were $1,020,298 compared to $1,150,786 for fiscal year 2011. The Company increased sales and marketing expenses by 405% to $76,427 as it expanded its sales, branding and investor relations efforts. General and administrative expenses fell by 14% to $943,872 as a result of primarily as a result of a decrease in depreciation expense and employee stock option expense, offset by an increase in amortization expense.
Interest expense fell 66% from $608,316 during 2011 to $206,722 during 2012.
Net loss decreased to $828,272, or $0.04 per share, compared to $1,532,399 or $0.10 per share. The weighted average shares outstanding were 19,862,088 and 15,930,327 for fiscal year 2012 and 2011, respectively. The Company converted $2,433,850 of notes payable into common stock during 2012 at an aggregate conversion price of $1.42 per share.
Total assets increased by $267,863 to $1,215,797 at December 31, 2012. The Company increased its cash outflows from operations by $569,004 primarily as a result of the combined effects of a reduction in net loss, and an improvement in amortization expense. The Company is opportunistically evaluating various debt and equity options to finance its growth.
Business updates
OxySure enters 2013 in a strong competitive position. Over the past twelve months, the Company has:
- Expanded its distribution footprint significantly in the U.S. and internationally by adding new distributors such as Global Industrial, a division of Systemax, Amazon and AED Professionals;
- Added a comprehensive group of Automated External Defibrillators (AEDs) offerings to provide its customers, distributors and agents a total solution for medical emergency preparedness;
- Opportunistically invested in operational efficiencies; and
- Significantly reduced its debt to allow for more financial flexibility.
The Company will focus on enhancing its competitive position across three areas: sales and marketing, regulatory approvals and product costs. These initiatives and investments will result in higher sales for OxySure in the future by allowing deeper and wider penetration if its existing markets, and by developing new markets. At the same time, they will expand OxySure’s leadership position in the emergency/short duration oxygen market and the pre-hospital medical emergency market in general.
“We strive to maintain our culture of innovation by developing new products and by combining them with complimentary, third party products in high growth markets, such as our six new brands of AEDs and related AED accessories,” concluded Mr. Ross. “We will continue to enter new markets and adjunct product categories by leveraging our core technology and sales infrastructure.”
Conference Call
OxySure’s CEO Julian Ross will host the conference call to discuss the Company’s fiscal year 2012 results.
Date: Monday, April 1, 2013
Time: 4:45 pm ET
US Dial-In: 1-877-317-6776
International Dial-In: 1-412-317-6776
Conference ID: OxySure
Webcast: http://webcast.mzvaluemonitor.com/Cover.aspx?PlatformId=1063
Please dial in at least 10-minutes before the call to ensure timely participation.
A playback of the call will be available until 11:30 am ET on April 9, 2013. To listen, call +1-877-344-7529 within the United States or +1-412-317-0088 when calling internationally. Please use the replay PIN number 10026840. The playback of the call will also be made available on the investor relations section of the Company’s website.
About OxySure Systems, Inc.
OxySure Systems, Inc. (OXYS) is a medical technology company that focuses on the design, manufacture and distribution of specialty respiratory and medical solutions. The company pioneered a safe and easy to use solution to produce medically pure (USP) oxygen from inert powders. The company owns numerous issued patents and patents pending on this technology which makes the provision of emergency oxygen safer, more accessible and easier to use than traditional oxygen provision systems. OxySure's products improve access to emergency oxygen that affects the survival, recovery and safety of individuals in several areas of need: (1) Public and private places and settings where medical emergencies can occur; (2) Individuals at risk for cardiac, respiratory or general medical distress needing immediate help prior to emergency medical care arrival; and (3) Those requiring immediate protection and escape from exposure situations or oxygen-deficient situations in industrial, mining, military, or other "Immediately Dangerous to Life or Health" (IDLH) environments. www.OxySure.com
Forward-Looking Statements
Statements in this earnings release that are not historical facts are considered to be forward-looking statements. Such statements include, but are not limited to, statements regarding management beliefs and expectations, based upon information available at the time the statements are made, regarding future plans, objectives and performance. All forward-looking statements are subject to risks and uncertainties, many of which are beyond management’s control and actual results and performance may differ significantly from those contained in forward-looking statements. OxySure Systems, Inc. intends any forward-looking statement to be covered by the Litigation Reform Act of 1995 and is including this statement for purposes of said safe harbor provisions. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. OxySure Systems, Inc. undertakes no obligation to update any forward-looking statements to reflect events or circumstances that occur after the date as of which such statements are made. A discussion of certain risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements is included in OxySure Systems, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2012.
| OXYSURE SYSTEMS INC. | |||
| BALANCE SHEETS | |||
| December 31, | |||
| 2012 | 2011 | ||
| ASSETS | |||
| Current assets | |||
| Cash and cash equivalents | $ 13,514 | $ 65,118 | |
| Accounts receivable, net of allowances for sales returns and allowance for doubtful accounts | 18,487 | 2,758 | |
| Inventories | 221,345 | 247,956 | |
| Prepaid expenses and other current assets | - | - | |
| Total current assets | 253,346 | 315,833 | |
| Property and equipment, net | 27,599 | 133,659 | |
| Intangible assets, net | 418,479 | 445,168 | |
| Other assets | 516,373 | 53,274 | |
| TOTAL ASSETS | $ 1,215,797 | $ 947,934 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
| Current liabilities | |||
| Accounts payable and accrued expenses | 595,655 | $ 245,340 | |
| Capital leases - current | 296,116 | 327,939 | |
| Notes payable - current | 398,589 | 1,565,059 | |
| Deferred revenue | 499,225 | 421,713 | |
| Total current liabilities | 1,789,585 | 2,560,051 | |
| Long-term liabilities | |||
| Capital leases | 2,265 | 2,632 | |
| Notes payable | 76,072 | 1,162,390 | |
| Total long-term liabilities | 78,337 | 1,165,022 | |
| TOTAL LIABILITIES | 1,867,922 | 3,725,073 | |
| STOCKHOLDERS’ EQUITY | |||
| Preferred stock, par value $0.0005 per share; 25,000,000 shares authorized; 818,750 Series A convertible preferred shares issued and outstanding as of December 31, 2012 and 3,126,434 shares issued and outstanding as of December 31, 2011. | 409 | 1,563 | |
| Common stock, par value $0.0004 per share; 100,000,000 shares authorized; 22,548,678 shares of voting stock issued and outstanding as of December 31, 2012 and 16,519,865 shares issued and outstanding as of December 31, 2011 | 9,016 | 6,608 | |
| Additional Paid-in Capital | 13,597,117 | 10,645,347 | |
| Accumulated deficit | (14,258,667) | (13,430,659) | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME | (652,125) | (2,777,139) | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,215,797 | $ 947,934 |
| OXYSURE SYSTEMS INC. | ||||
| STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT | ||||
| For the year ended December 31, | ||||
| 2012 | 2011 | |||
| Revenues, net | $ 269,697 | $ 185,209 | ||
| Cost of goods sold | 95,587 | 103,389 | ||
| Gross profit | 174,110 | 81,820 | ||
| Operating expenses | ||||
| Selling, general and administrative | 1,020,298 | 1,150,786 | ||
| Loss from operating expenses | (846,188) | (1,068,966) | ||
| Other income (expenses) | ||||
| Other income (expense) | 224,639 | 144,882 | ||
| Interest expense | (206,722) | (608,316) | ||
| Total other income (expenses) | 17,917 | (463,434) | ||
| Net loss | (828,271) | (1,532,399) | ||
| Accumulated deficit - beginning of the period | (13,430,659) | (11,898,260) | ||
| Prior period adjustments | 263 | - | ||
| Accumulated deficit - end of the period | $ (14,258,667) | $ (13,430,659) | ||
| Basic net income (loss) per common share | $ (0.04) | $ (0.10) | ||
| Diluted net income (loss) per common share | $ (0.04) | $ (0.10) | ||
| Weighted average common shares outstanding: | ||||
| Basic | 19,862,088 | 15,930,327 | ||
| Diluted | 19,862,088 | 15,930,327 | ||
| OXYSURE SYSTEMS INC. | |||
| STATEMENTS OF CASH FLOWS | |||
| Year Ended December 31, | |||
| 2012 | 2011 | ||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||
| Net loss | $ (828,271) | $ (1,532,399) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||
| Depreciation | 138,936 | 174,173 | |
| Amortization | 54,834 | 29,766 | |
| Prior period adjustment | 263 | - | |
| Amortization of debt discount | 189,611 | 546,104 | |
| Changes in deferred rent | 65,079 | (18,106) | |
| Issuance of common stock warrants in connection with license agreements | - | - | |
| Issuance of common stock options to employees as compensation | 7,999 | 104,419 | |
| Issuance of common stock options and warrants in exchange for services | 20,748 | 29,354 | |
| Changes in current assets and liabilities: | |||
| Accounts receivable | (15,729) | (2,409) | |
| Inventory | 26,611 | (20,265) | |
| Prepaid expenses and other current assets | - | (40,666) | |
| Accounts payable and accrued liabilities | 141,950 | (125,491) | |
| Deferred revenue | 77,512 | 166,058 | |
| NET CASH USED IN OPERATING ACTIVITIES | (120,457) | (689,461) | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Purchases of intangible assets | (3,172) | (1,231) | |
| Other assets | - | (40,142) | |
| Purchases of property and equipment | (32,876) | (3,435) | |
| NET CASH USED IN INVESTING ACTIVITIES | (36,048) | (44,808) | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Loan proceeds, net | (8,549) | 763,940 | |
| Payment of capital leases | (32,190) | (27,810) | |
| Issuance of common stock for cash | 41,250 | - | |
| Proceeds from exercise of common stock options and warrants | 104,390 | 23,370 | |
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 104,901 | 759,500 | |
| Net decrease in cash and cash equivalents | (51,604) | 25,231 | |
| Cash and cash equivalents, at beginning of period | 65,118 | 39,887 | |
| Cash and cash equivalents, at end of period | $ 13,514 | $ 65,118 | |
| Supplemental disclosure of cash flow information: | |||
| Cash paid during the period for: | |||
| Interest | $ 679 | $ 4,368 | |
| Income taxes | $ - | $ - | |
| Supplemental non-cash investing and financing activities: | |||
| Promissory subordinated convertible notes issued in connection | $ - | $ 200,100 | |
| with rent satisfaction agreements | |||
| Issuance of common stock upon conversion of convertible notes | $ 2,433,850 | $ 465,969 | |
| Promissory subordinated convertible note issued in connection with | |||
| with distribution agreement and licensing agreement | |||
| Issuance of common stock warrants in connection with | $ - | $ 458,114 | |
| convertible notes | |||
| Issuance of common stock upon conversion of preferred stock | $ 2,307,684 | $ - | |
| Website development with financing arrangement | $ 143,286 | $ - | |
| Issuance of common stock for assets acquired | $ 95,062 | $ - | |
| Issuance of common stock in connection with deferred loan costs | $ 249,723 | $ - | |
Contacts:
Investor Relations, US West:
MZ North America
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Tel: +1-760-755-2716
Email: thaberfield@mzgroup.us
Web: www.mzgroup.us
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