TIDMAKR
RNS Number : 4711T
Akers Biosciences, Inc.
30 March 2016
Embargoed: 0700hrs 30 March 2016
Akers Biosciences, Inc.
Financial Results for the Year Ended December 31, 2015
US Sales of PIFA Heparin/PF4 Rapid Tests Up 12%
Akers Biosciences, Inc. (NASDAQ: AKER) (AIM: AKR.L), ("Akers
Bio" or the "Company"), a developer of rapid health information
technologies, reports its financial results for the fiscal year
ended December 31, 2015. A Form 10-K containing the detailed report
of operations and financial statements (annual report) will be
available for viewing later today on the Company's website at
www.akersbio.com or www.sec.gov.
2015 Financial Highlights:
-- 12% increase in US sales of flagship heparin allergy test to $1,391,017 (2014: $1,241,406)
-- Total revenue declined to $2,115,050 (2014: $4,427,174),
partly due to deferment of certain international orders into 2016 -
received in Q1 2016
-- Net cash loss from operations of $5,132,343 (2014: loss of $3,883,929)
-- Total loss of $9,311,913 (2014: loss of $3,142,960)
substantially increased by non-cash and non-recurring items
totaling approximately $4.7 million
-- Maintaining liquid balance sheet with cash and marketable
securities of $4,427,163 (2014: $9,720,802)
2015 Operational Highlights:
-- Significant operational and regulatory approval progress
achieved in China laying the groundwork for Chinese sales to
commence this year
-- China Food and Drug Administration approved the Company's
rapid heparin allergy test leading to $2.5 million of placed orders
for 2016 to date
-- Chinese production facility completed and made fully operational
-- In addition to the rapid heparin allergy test, marketing
commenced in China for four breath tests focused on the major
markets of diabetes, weight loss, fitness and alcohol
-- Introduced new Akers Wellness product line targeting large
and growing market for personalized health - including app-enabled
tests for monitoring and tracking personal health over time
-- Expanded global distribution network for rapid heparin
allergy test providing access to all major diagnostic markets
-- Appointed a new, highly experienced CEO to drive product
commercialization - impact already showing in strong US sales in Q1
2016 for the Company's rapid heparin allergy tests
-- European Patent Office issued a patent surrounding the
Company's novel blood separator technology and method of separating
a fluid fraction from whole blood
-- Achieved ISO 13485 certification of quality management system
enabling acceleration of regulatory approval process for the
Company's products in certain countries
2016 Current Trading
-- Company performing well in 2016 with orders for rapid heparin
allergy tests already exceeding $3 million in the current year
-- Sales of rapid heparin allergy tests into US hospitals in Q1
are up 70% over the same quarter in 2015
Chairman's Statement
2015 was principally about augmenting the senior commercial
team, refining the execution strategy, laying the groundwork for
entry into China and developing a product suite to target the huge
personalized health and wellness market. I am pleased to say that
this preparatory work in 2015 is already paying off in 2016 with
orders for our rapid heparin allergy tests already exceeding $3
million in the current year.
We already have sufficient visibility from the first twelve
weeks of the year in our core heparin allergy test business to know
that sales are materially outperforming last year's. Not only is
this being driven by orders from China but it is also coming from
improvements in our domestic US business. We hope to see this trend
continue as the full impact of our new commercial team and
execution strategy begins to be felt.
Substantial work was undertaken in 2015 to prepare for market
entry into China. In November we received clearance from the China
Food and Drug Administration for our flagship rapid heparin allergy
test which led to our Chinese distributor placing $2.5 million
worth of orders for 2016. Furthermore, we worked extensively in
2015 with our Chinese joint venture partners to establish a first
class manufacturing facility in Hainan province which is now fully
operational. It is envisaged that the majority of Akers' products
for sale into China will be manufactured in-country leading to
significant commercial benefits. Marketing in China commenced for
four of our breath tests in the prolific areas of diabetes, weight
loss, fitness and alcohol. The Chinese healthcare system has
identified the critical need to address soaring obesity rates and a
diabetes epidemic which highlights the compelling opportunity to
introduce Akers' simple, inexpensive breath-based tests in these
areas.
While not yet generating significant revenue, the Company has
developed and introduced three transformational breath tests
designed for the health and wellness industry and consumers during
2015. These include the consumer-focused METRON(R), as well as the
BreathScan OxiChek(TM) ("OxiChek") and BreathScan KetoChek(TM)
("KetoChek") tests which work with a new bluetooth-enabled reading
device, BreathScan Lync(TM) and its associated BreathScan(TM)
mobile app, to enable consumers and professional users to monitor
trends in health via a mobile device. Being able to generate
near-instant health information is, I believe, key to the future of
medicine. With our Akers Wellness tests, clinicians, suppliers of
nutritional supplements and diet plans, health coaches or even
consumers themselves, can now monitor their - or their clients' -
health over time by utilizing Akers Wellness products.
With the development for the Akers Wellness line now largely
completed, the focus has turned to marketing and sales execution,
and we look forward to reporting on progress in these areas later
this year.
In February, the Company's Management System was certified to
ISO 13485. The certification is a requirement in certain countries
to enable regulatory approval of medical devices, so it an
extremely important asset when seeking accelerated product
clearance in certain countries.
Another regulatory milestone achieved in 2015 was the European
Patent Office's issuance of a patent surrounding the Company's
novel blood separator technology and method of separating a fluid
fraction from whole blood. We now have patent protection both in
the US and Europe enabling Akers to incorporate the technology into
certain of our blood-based assays where the speed of our test is
paramount to clinical decision making. It may also enable the
Company in the future to offer the technology under license to
third parties seeking to accelerate their own testing procedures by
facilitating the blood cell separation process as a component of
their test.
Multiple new distribution agreements outside of the US were
signed in 2015 giving the Company access to every major diagnostic
market in the world. The primary drivers of this distribution
network are the Company's flagship rapid heparin allergy tests, and
we are supporting our distribution partners' efforts to introduce
these tests in their respective territories. Additionally, the
Company's BreathScan(R) Alcohol Detector continues to generate
interest through our international distribution network with sales
to the EU and South Africa contributing to revenues in 2015.
Towards the end of last year I was delighted to welcome a new
CEO to focus entirely on product and technology commercialization.
The commercial team is being further strengthened with a number of
new senior hires and the improved execution of our US heparin
allergy test sales strategy has led to encouraging early sales
indicators from the first twelve weeks of this year. I am very
excited about the team we are building at Akers Bio.
Looking ahead through 2016, we have had a tremendous start to
the year with the receipt of $2.5 million worth of orders from
China (with initial sales expected imminently) and approximately
$600,000 worth of sales of tests into US hospitals already recorded
in Q1 - an increase of 70% over the same quarter in 2015. We hope
to see a continuing upward trajectory in the US heparin allergy
test business and look forward to seeing meaningful contributions
beginning to flow through again from our alcohol breathalyzers and
from the newly launched Akers Wellness line.
Raymond F. Akers, Jr. PhD, Co-founder and Executive Chairman
March 30, 2016
Conference Call Information:
Wednesday, March 30, 2016 at 2:00 p.m. BST (09:00
a.m. Eastern Time)
US callers: 1-888-364-3109
International callers: 1-719-457-1035
Conference ID: 4375738
Webcast: http://www.akersbio.com/investor-center/earnings-center#Conference-Call
For more information:
Akers Biosciences, Inc.
Raymond F. Akers, Jr. PhD
Executive Chairman
Tel. +1 856 848 8698
Taglich Brothers, Inc. (Investor Relations)
Chris Schreiber
Tel. +1 917 445 6207
Email: cs@taglichbrothers.com
finnCap (UK Nominated Adviser and Broker)
Adrian Hargrave / Scott Mathieson (Corporate Finance)
Steve Norcross (Broking)
Tel. +44 (0)20 7220 0500
Vigo Communications (Public Relations)
Ben Simons / Fiona Henson
Tel. +44 (0)20 7830 9700
Email: akers@vigocomms.com
Summary of Statements of Operations for the Year Ended December
31, 2015
Results of Operations
Management's Plans and Basis of Presentation
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To date, the Company has in large part relied on equity
financing to fund its operations, raising $13,101,336, net of
expenses, in an initial public offering on the NASDAQ Stock
Exchange in 2014. The Company continues to experience recurring
losses and negative cash flows from operations. Management's
strategic plans include the following:
-- continuing to advance the development and commercialization of the Company's products, especially
those that utilize MPC Biosensor, PIFA and seraSTAT technologies;
-- continuing to strengthen and forge domestic and international relationships with well-established
sales organizations with strong distribution channels in specific target markets for both
our currently marketed and emerging products;
-- establishing clinical protocols that support regulatory submissions and publication of data
within peer-reviewed journals; and
-- continuing to monitor and implement cost control initiatives to conserve cash.
Despite our plans, the Company expects to continue to incur
losses from operations for the near-term and these losses could be
significant for the following reasons:
-- some of Akers' distribution partnerships have been recently established or are in the process
of being initiated and, therefore, consistent and historical ordering patterns have not been
instituted;
-- the Company continues to incur expenses related to the initial commercialization and marketing
activities for its Wellness products, and product development (research, clinical trials,
regulatory tasks) costs for its emerging products, Breath PulmoHealth "Check" rapid assays
and PIFA PLUSS(R) Infectious Disease point-of-care tests); and
-- to expand the use of its clinical laboratory products, the Company may need to invest in additional
marketing support programs to increase brand awareness.
At December 31, 2015, Akers had cash of $402,059, working
capital of $4,812,337, stockholders' equity of $6,603,178 and an
accumulated deficit of $94,175,999. The Company believes that its
current working capital position will be sufficient to meet its
estimated cash needs for at least the next 12 months.
The fair value of the Company's investments in marketable
securities as of December 31, 2015 was $4,025,104 (2014:
$9,264,961). 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.
If the Company does not obtain additional capital as needed, the
Company would potentially be required to reduce the scope of its
research and development activities. The Company is closely
monitoring its cash balances, cash needs and expense levels.
Revenue
The Company's total revenue for the year ended December 31, 2015
was $2,115,050, a 52% decrease compared to the same period in 2014.
The table below presents a summary of our sales by product
line:
Year Ended Year Ended Percent
Product Line December 31, 2015 December 31, 2014 Change
------------------------------------------ ------------------- ------------------- -------
MicroParticle Catalyzed Biosensor ("MPC") $ 296,328 $ 918,049 -68%
Particle ImmunoFiltration Assay ("PIFA") 1,391,017 2,241,406 -38%
Rapid Enzymatic Assay ("REA") - 864,000 -100%
Other 107,149 60,386 77%
--------------- ---------------
Product Revenue Total $ 1,794,494 $ 4,083,841 -56%
License Fees 320,556 343,333 -7%
--------------- ---------------
Total Revenue $ 2,115,050 $ 4,427,174 -52%
=============== ===============
This decline in product revenue is associated with three
significance transactions that occurred during the year ended
December 31, 2014, which were not repeated in 2015. These
transactions (ChubeWorkx (MPC: $766,379), NovoTek (PIFA:
$1,000,000) and 36S (REA: $864,000)) are further described
below.
The Company's MPC product sales declined during the year ended
December 31, 2015. This reflects that during the same period of
2014, the Company received its last order from ChubeWorkx
($766,379) for the Company's alcohol breathalyzer product. Three
new distributors began placing orders for the alcohol breathalyzer
products during the year, two in the European Union ("EU") and one
in South Africa which generated revenue of $189,889 for the year
ended December 31, 2015.
The Company's total PIFA sales declined during the year ended
December 31, 2015; however, the domestic sales of the PIFA
Heparin/PF4 Rapid Assay products increased by 12% to $1,391,017
(2014: $1,241,406). The Company's dedicated technical sales account
executives are supporting over 300 sales representatives of Akers'
US distribution partners, Cardinal Health ("Cardinal Health"),
Fisher HealthCare ("Fisher Healthcare"), Typenex Medical, LLC
("Typenex") and Medline Industries, Inc. ("Medline"). The Company's
relationship-building initiative with our partners has already
delivered a measureable increase in product trials and adoptions.
Domestic sales for the year ended December 31, 2015 of our
distributors, Cardinal Health and Fisher Health, accounted for
$1,161,199 of the total PIFA Heparin/PF4 Rapid Assay as compared to
$1,064,733 for the same period of 2014 and individually represented
55% and 28% of such sales.
The Company did not generate any international sales of its PIFA
Heparin/PF4 Rapid Assay products during the year ended December 31,
2015 (2014: $1,000,000) primarily the result of pending regulatory
approvals. The recent approval of the product in China is expected
to stimulate minimum purchase requirements with our distributor,
NovaTek Therapeutics Inc. ("NovaTek") beginning in 2016.
There were no sales in the year ended December 31, 2015 for the
Tri-Cholesterol "Check" tests, part of the REA line of products,
which generated sales of $864,000 during the same period of 2014.
The revenue generated in the 2014 sale of the Tri-Cholesterol
"Check" tests was due to an initial stocking order from 36
Strategies General Trading, LLC, a related party, to distribute the
tests in Australia, Singapore, the United Arab Emirates and Oman
(See Note 5 - Trade Receivables - Related Party).
Other operating revenue increased due to a rise in shipping and
handling fees, a result of the mix of domestic and international
shipments and an increase in sales of miscellaneous components.
The Company's exclusive License and Supply Agreement with
ChubeWorkx Guernsey Limited ("ChubeWorkx") for the Company's
proprietary breathalyzer product was cancelled by both parties on
May 7, 2015. As a result of this event, and per the terms of the
original agreement, the Company recognized the remaining $166,667
of deferred revenue in the statement of operations and
comprehensive income for the year ended December 31, 2015. The
Company is now able to solicit business outside the United States
for its alcohol breathalyzer products and has begun to receive and
ship orders.
Licensing fee revenue declined to $320,556 (2014: $343,333). The
decline is associated with the cancellation of the Company's
exclusive License and Supply Agreement with ChubeWorkx as described
above.
Cost of sales for the year ended December 31, 2015 decreased by
19% to $950,792 (2014: $1,175,232). The reduction is primarily
reflective of the decrease in revenue during the year ended
December 31, 2015. Direct cost of sales increased to 29% (2014:
18%) and indirect cost of sales increased to 24% (2014: 11%) of
product revenue for year ended December 31, 2015. Overall, cost of
sales, as a percentage of product revenue, was 53% and 29% for the
years ended December 31, 2015 and 2014.
Prior to 2014, 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 decreased to 30%
(2014: 44%) primarily related to the mix of products sold and PIFA
products decreased to 11% (2014: 15%) related to the increased use
of sub-contractors for the assembly of components.
The increase in indirect cost of sales is attributed to an
ongoing project to improve the management, reporting and turn-over
rate of our production inventory which was completed during the
fourth quarter, significantly higher shipping costs associated with
an increase in international shipments and an increase in the cost
of consumable supplies related to production. In addition, the
percentage increase is affected by the fixed cost nature of many of
the components in this category.
Akers' gross profit margin, as a percentage of revenue,
decreased to 55% for the year ended December 31, 2015 as compared
to 73% in 2014 for the reasons described above.
General and Administrative Expenses
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General and administrative expenses in the year ended December
31, 2015 totaled $6,193,125, which was a 56% increase as compared
to $3,979,079 for the year ended December 31, 2014. The table below
summarizes our general and administrative expenses for the years
ended December 31, 2015 and 2014 as well as the percentage of
change year-over-year:
Year Ended Year Ended Percent
Description December 31, 2015 December 31, 2014 Change
---------------------------------------- ------------------- ------------------- -------
Personnel Costs $ 902,431 $ 834,750 8%
Professional Service Costs 1,233,126 1,038,508 19%
Stock Market & Investor Relations Costs 572,161 650,559 -12%
Other General and Administrative Costs 3,485,407 1,455,262 140%
--------------- ---------------
Total General and Administrative Costs $ 6,193,125 $ 3,979,079 56%
=============== ===============
Several specific categories of expense increased significantly
during the year ended December 31, 2015. Below is a summary of
these categories:
Year Ended Year Ended Percent
Description December 31, 2015 December 31, 2014 Change
---------------------------------- ------------------- ------------------- -------
Bad Debts Costs - Related parties $ 2,163,609 $ - -
Employment Agency Costs 237,553 69,968 240%
Legal Costs 736,745 492,132 50%
Travel Costs 268,201 124,611 115%
--------------- --- --------------
Total $ 3,406,108 $ 686,711 396%
=============== === ==============
Professional services included significant increases in
recruiting services and legal fees during the year ended December
31, 2015. The increase in recruiting fees are related to the
expansion of the sales and marketing staff and the recruitment of
the Company's Chief Executive Officer. The increase in legal fees
are associated with various corporate and legal affairs. Offsetting
the professional service expenses was the elimination of management
fees paid to Nicolette Consulting Group for services that were
incurred in the year ended December 31, 2014.
The Company recognized cost savings in all of its stock market
and investor relations categories. These include consulting,
investor relations, stock exchange fees and transfer agent
fees.
The Company established an allowance for doubtful accounts of
$864,000 for a trade receivable - related party that was due June
30, 2015 after receiving communications from the customer that
indicated a high level of risk of collectability. In addition, the
Company also established an allowance for doubtful accounts for
$1,299,609 for a note receivable - related party as a result of an
internal assessment indicating a high level of risk of
collectability. These allowances are reflected in the other general
and administrative expenses in the table above for the year ended
December 31, 2015.
Sales and Marketing Expenses
Sales and marketing expenses in the year ended December 31, 2015
totaled $2,543,286, which was a 95% increase as compared to
$1,302,103 for the year ended 2014. The table below summarizes our
sales and marketing expenses for the years ended December 31, 2015
and 2014 as well as the percentage of change year-over-year:
Year Ended Year Ended Percent
Description December 31, 2015 December 31, 2014 Change
-------------------------------- ------------------- ------------------- -------
Personnel Costs $ 1,359,460 $ 503,401 170%
Professional Service Costs 751,220 550,515 36%
Royalties and Commission Costs 158,347 129,780 22%
Other Sales and Marketing Costs 274,259 118,407 132%
--------------- ---------------
Total Sales and Marketing Costs $ 2,543,286 $ 1,302,103 95%
=============== ===============
Personnel costs increased in the year ended December 31, 2015
due to the expansion of the sales and marketing department from 5
employees at December 31, 2014 to 10 employees as of December 31,
2015.
The increase in professional service costs is for international
sales consultants and domestic marketing consultants to assist in
the development of new market opportunities and to increase our
market penetration in our existing markets; and web designers to
assist with the design and implementation of a new internet
presence.
Travel expenses are a result of the increased size of the sales
force and make up the most significant component of the other sales
and marketing costs.
Research and Development
Research and development expenses in the year ended December 31,
2015 totaled $1,406,895, which was a 54% increase as compared to
$916,308 for the year ended 2014. The table below summarizes our
research and development expenses for the years ended December 31,
2015 and 2014 as well as the percentage of change
year-over-year:
Year Ended Year Ended Percent
Description December 31, 2015 December 31, 2014 Change
------------------------------------- ------------------- ------------------- -------
Personnel Costs $ 699,595 $ 706,230 -1%
Professional Service Costs 504,800 85,703 489%
Clinical Trial Costs 41,586 10,500 296%
Other Research and Development Costs 160,914 113,875 41%
--------------- --- --------------
Total Research and Development Costs $ 1,406,895 $ 916,308 54%
=============== === ==============
Clinical trial costs, professional service costs and other
research and development costs have increased in the year ended
December 31, 2015 due to the significant costs associated with
preparing several key products for market. Major expenses include
engineering fees related to the development of molds for new
products, development of the BreathScan Lync and associated apps
for tablets and smartphones, new packaging design, testing and
clinical trials.
The following table illustrates research and development costs
by project for the years ended December 31, 2015 and 2014,
respectively.
2015 2014
---------- --------
Asthma/pH $ 4,917 $ 5,359
Beath Alochol Phone Application - 10,540
BreathScan 110,609 13,866
Chlamydia Trachomatis 134,362 143,312
CHUBE 397 3,867
H/PF4 98,876 107,875
HIV 150,543 56,586
Ketone/Metron 72,757 48,305
KetoChek / OxiChek 252,462 -
Lithium 41,086 -
Lyophilization - 74,956
Malaria - 6,810
Metron 77,796 4,904
Other Projects 156,379 46,138
PF4 PLUSS - 36,960
Pulmo Health 18,283 -
Sonicator OQ 886 -
Troponin 127,095 53,965
Tri Cholesterol 96,271 125,553
VIVO 64,176 182,215
--------- -------
Total R&D Expenses: $1,406,895 $916,308
========= =======
Other Income and Expense
Other income and expense increased for the year ended December
31, 2015 to $370,317 from $61,161 for the same period in 2014. The
table below summarizes our other income and expenses for the years
ended December 31, 2015 and 2014 as well as the percentage of
change year-over-year:
Year Ended Year Ended Percent
Description December 31, 2015 December 31, 2014 Change
-------------------------------------- ------------------- ------------------- -------
Currency Translation (Gain)/Loss $ 7,535 $ (2,667) -383%
Dividend on Series A Preferred Stock - 15,793 -100%
Investment (Gain)/Loss 6,512 (751) -967%
Interest and Dividends (108,968) (68,867) 58%
Sale of New Jersey Net Operating Loss (269,344) - -
Other Extraordinary Income (6,052) (4,669) 30%
--------------- --- --------------
Total Other (Income) and Expense $ (370,317) $ (61,161) 505%
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=============== === ==============
The increase is the result of interest and dividend earning on
the marketable securities and note receivable - related party and
the sale of the Company's New Jersey Net Operating Losses.
Income Taxes
During 2015, the Company was approved by the State of New Jersey
to sell a portion of its state tax benefits that existed as of
December 31, 2014, pursuant to the Technology Tax Certificate
Transfer Program. The Company received net proceeds of $269,344 for
the year ended December 31, 2015 (2014: $-) as a result of the sale
of the tax benefits.
As of December 31, 2015 and 2014, the Company had Federal net
operating loss carry forwards of approximately $58,000,000 and
$51,300,000, respectively, expiring through the year ending
December 31, 2034. As of December 31, 2015 and 2014, the Company
had New Jersey state net operating loss carry forwards of
approximately $7,200,000 and $11,900,000, respectively, expiring
the year ending December 31, 2021.
The principal components of deferred tax assets and valuation
allowance as of December 31, 2014 and December 31, 2013 are as
follows:
Deferred Tax Assets
Year Ended December 31,
---------------------------
2015 2014
------------ ------------
Reserves and other $ 2,506,000 $ 684,830
Net operating loss carry-forwards $ 20,728,000 $ 18,754,066
Valuation Allowance $(23,234,000) $(19,438,896)
----------- -----------
Net $ - $ -
----------- -----------
The valuation allowance for deferred tax assets as of December
31, 2015 and 2014 was $23,234,000 and $19,438,896. The change in
the total valuation for the years ended December 31, 2015 and 2014
were increases of $3,795,104 and $1,428,358. In assessing the
realization of deferred tax assets, management considers whether it
is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future
taxable income during the periods in which the net operating losses
and temporary differences become deductible. Management considered
projected future taxable income and tax planning strategies in
making this assessment. The value of the deferred tax assets was
fully offset by a valuation allowance, due to the current
uncertainty of the future realization of the deferred tax
assets.
The reconciliation of income taxes using the statutory U.S.
income tax rate and the benefit from income taxes for the years
ended December 31, 2015 and December 31, 2014 are as follows.
Tax Rates & Benefits
Year Ended December 31,
----------------------------
2015 2014
------------- --------
Statutory U.S. Federal Income Tax Rate (35.0)% (35.0)%
New Jersey State income taxes, net of U.S.
Federal tax effect (6.0)% (5.9)%
Benefit from sale of New Jersey NOL (2.9)% 0.0%
------------ --------
Change in Valuation Allowance 41.0% 40.9%
------------ --------
Net (2.9)% 0.00%
------------ --------
Liquidity and Capital Resources
For the years ended December 31, 2015 and 2014, the Company
generated a net loss attributable to shareholders of $9,311,913 and
$3,142,960, respectively. As of December 31, 2015 and 2014, the
Company has an accumulated deficit of $94,175,999 and $84,864,086
and had cash and cash equivalents totaling $402,059 and $455,841,
respectively (although the Company had additional marketable
securities of $4,025,104 and $9,264,961 available as of December
31, 2015 and 2014).
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 BreathScan Lync, as well as development activities for its PIFA
PLUSS(R) 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 the next 12 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(R) 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(R) PF4, breath
alcohol detectors, METRON and BreathScan Lync) in the U.S. 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.
Capital expenditures, primarily for production, laboratory and
facility improvement costs for the year ending December 31, 2015
are approximately $112,951 (2014: $24,988). 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. 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.
Operating Activities
The Company's net cash consumed by operating activities in the
year ended December 31, 2015 totaled $5,132,343, which was a 32%
increase as compared to $3,883,929 for the year ended 2014. The
table below summarizes our net cash consumed for the years ended
December 31, 2015 and 2014 as well as the percentage of change
year-over-year:
Year Ended Year Ended Percent
Description December 31, 2015 December 31, 2014 Change
------------------------------------------ ------------------- ------------------- -------
Loss from Operations $ (9,311,913) $ (3,127,167) 198%
Adjustments
Non-Operating Gains (6,052) (26,203) -77%
Non-Cash Activities 3,331,291 1,095,798 204%
Cash Used in Operating Activities
Cash Consumed by Operating Activities (663,010) (2,543,680) -74%
Cash Contributed by Operating Activities 1,517,341 717,323 112%
--------------- ---------------
Net Cash Used in Operating Activities $ (5,132,343) $ (3,883,929) 32%
=============== ===============
(MORE TO FOLLOW) Dow Jones Newswires
March 30, 2016 02:01 ET (06:01 GMT)
For the year ended December 31, 2015, cash was consumed by the
loss of $9,311,913 less non-operating gains of $6,052 plus a
non-cash adjustment of $4,199 for accrued interest and dividends,
$766,471 for depreciation, amortization and impairment of
non-current assets, $2,163,609 for allowances for doubtful accounts
and $397,012 for non-cash share based compensation and services.
Decreases in trade receivables ($513,583), trade receivables -
related party ($176,157) and an increase in trade and other
payables ($827,601) provided cash. Increases in other receivables
($54,142), inventories ($226,538), other assets ($76,774) and a
decrease in deferred revenue - related party ($305,556) consumed
cash. The increase in net cash used in operating activities was
related to routine changes in operating activities.
For the year ended December 31, 2014, cash was consumed by the
loss of $3,127,167 less non-operating gains of $26,203 plus a
non-cash adjustment of $349,398 for depreciation and amortization
of non-current assets and $746,400 for non-cash share based
compensation and services. Decreases in inventories ($123,049),
other assets ($56,257) and an increase in trade and other payables
($538,017) provided cash. Increases in trade receivables
($1,899,886), notes receivable - related party ($266,378) and other
receivables ($37,497) and a decreases other payables - related
party ($6,586) and in deferred revenue - related party ($333,333)
consumed cash. The increase in net cash used in operating
activities was related to routine changes in operating
activities.
Financial statements
Consolidated Balance Sheets
December 31, 2015 and 2014
2015 2014
------------- -----------
ASSETS
Current Assets
Cash 402,059 455,841
Marketable Securities 4,025,104 9,264,961
Trade Receivables (net) 609,195 1,154,290
Trade Receivables - Related Party, net 31,512 864,000
Notes Receivable - Related Party, net - 266,457
Other Receivables 95,577 41,435
Inventories (net) 1,131,654 905,116
Other Current Assets 185,967 107,633
------------ -----------
Total Current Assets 6,481,068 13,059,733
------------ -----------
Non-Current Assets
Notes Receivable - Related Party, net - 1,209,309
Property, plant and equipment, net 251,145 201,483
Intangible assets, net 1,472,883 2,176,065
Other Assets 66,813 4,282
------------ -----------
Total Non-Current Assets 1,790,841 3,591,139
------------ -----------
Total Assets 8,271,909 16,650,872
============ ===========
LIABILITIES
Current Liabilities
Trade and Other Payables 1,668,731 1,538,430
Deferred Revenue - Related Party - 305,556
------------ -----------
Total Current Liabilities 1,668,731 1,843,986
------------ -----------
Total Liabilities 1,668,731 1,843,986
------------ -----------
STOCKHOLDERS' EQUITY
Convertible Preferred Stock, No par value, 50,000,000 shares authorized,
no shares issued
and outstanding as of December 31, 2015 and 2014 - -
Common Stock, No par value, 500,000,000 shares authorized, 5,425,045 and
4,954,837 issued
and outstanding as of December 31, 2015 and 2014 100,785,408 99,691,096
Accumulated Deficit (94,175,999) (84,864,086)
Accumulated Other Comprehensive Loss (6,231) (20,124)
------------ -----------
Total Stockholders' Equity 6,603,178 14,806,886
------------ -----------
Total Liabilities and Stockholders' Equity 8,271,909 16,650,872
============ ===========
Consolidated Statements of Operations and Comprehensive
Income
Years ended December 31, 2015 and 2014
2015 2014
------------ -----------
Revenues:
Product Revenue $ 1,757,982 $ 2,453,462
Product Revenue - Related parties 36,512 1,630,379
License Revenue 15,000 10,000
License Revenue - Related party 305,556 333,333
----------- ----------
Total Revenues 2,115,050 4,427,174
Cost of Sales:
Product Cost of Sales (950,792) (1,175,232)
----------- ----------
Gross Profit 1,164,258 3,251,942
Administrative Expenses 4,029,516 3,784,078
Administrative Expenses - Related parties - 195,002
Sales and Marketing Expenses 2,543,286 1,302,103
Research and Development Expenses 1,406,895 916,308
Bad Debt Expenses - Related parties 2,163,609 -
Impairment of Non-Current Assets 466,476 -
Amortization of Non-Current Assets 236,706 258,572
----------- ----------
Loss from Operations (9,682,230) (3,204,121)
----------- ----------
Other (Income)/Expenses
Foreign Currency Transaction (Gain)/Loss 7,535 (2,667)
Gain from demutualization of insurance carrier (6,052) (4,669)
Interest and Dividend Income (102,456) (69,618)
----------- ----------
Total Other Income (100,973) (76,954)
----------- ----------
Loss Before Income Taxes (9,581,257) (3,127,167)
Income Tax Benefit 269,344 -
----------- ----------
Preferred Stock Dividend - (15,793)
----------- ----------
Net Loss Attributable to Common Stockholders (9,311,913) (3,142,960)
----------- ----------
Other Comprehensive Income/(Loss)
Unrealized Gains/(Losses) on Marketable Securities 13,893 (20,124)
----------- ----------
Total Other Comprehensive Income/(Loss) 13,893 (20,124)
----------- ----------
Comprehensive Loss $(9,298,020) $(3,163,084)
=========== ==========
Basic & diluted loss per common share $ (1.81) $ (0.66)
=========== ==========
Weighted average basic & diluted common shares outstanding 5,140,920 4,745,684
(MORE TO FOLLOW) Dow Jones Newswires
March 30, 2016 02:01 ET (06:01 GMT)
=========== ==========
Consolidated Statement of Cash Flows
Years ended December 31, 2015 and 2014
2015 2014
----------- ------------
Cash flows from operating activities:
Net loss for the year $(9,311,913) $ (3,127,167)
Adjustments to reconcile net loss to net cash used in operating activities:
Accrued interest and dividends on marketable securities 4,199 (18,473)
Decrease in reserve for inventory obsolescence - (3,061)
Depreciation and amortization 299,995 349,398
Impairment of non-current assets 466,476 -
Allowance for doubtful accounts 2,163,609 -
Gain from other non-operating activities (6,052) (4,669)
Non-cash share based compensation - options 52,356 549,600
Non-cash share based payments for services - shares issued 344,656 196,800
Changes in assets and liabilities:
(Increase)/decrease in trade receivables 513,583 (1,899,886)
(Increase)/decrease in notes receivables - related party 176,157 (266,378)
Increase in other receivables (54,142) (37,497)
(Increase)/decrease in inventories (226,538) 123,049
(Increase)/decrease in other assets (76,774) 56,257
Increase in trade and other payables 827,601 538,017
Decrease in other payables - related party - (6,586)
Decrease in deferred revenue - related party (305,556) (333,333)
---------- -----------
Net cash used in operating activities (5,132,343) (3,883,929)
---------- -----------
Cash flows from investing activities
Purchases of property, plant and equipment (112,951) (24,988)
Purchases of marketable securities (60,940) (12,551,106)
Investment in Hainan Savy Akers Biosciences, Ltd. joint venture (64,091) -
Proceeds from demutualization of insurance carrier 6,052 4,669
Proceeds from sale of marketable securities 5,310,491 3,284,494
---------- -----------
Net cash provided by/(used in) investing activities 5,078,561 (9,286,931)
---------- -----------
Cash flows from financing activities
Payment of short-term note payable - related party - (307,500)
Proceeds from issuance of common shares - 745,024
Net proceeds from issuance of common stock in initial public offering - 13,101,336
Dividend distribution on Series A Convertible Preferred Stock - (15,793)
---------- -----------
Net cash provided by financing activities - 13,523,067
---------- -----------
Net increase/(decrease) in cash (53,782) 352,207
Cash at beginning of year 455,841 103,634
---------- -----------
Cash at end of year $ 402,059 $ 455,841
========== ===========
Supplemental Schedule of Non-Cash Financing and Investing Activities
Unrealized gains/(losses) on marketable securities $ 13,893 $ (20,124)
========== ===========
Conversion of trade receivable as of December 31, 2013 to a note
receivable in the year ended
December 31, 2014 $ - $ 1,209,388
========== ===========
Issuance of restricted common share grants to directors and officers
accrued in 2014 $ 697,300 $ -
========== ===========
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.akersbio.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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR JMMMTMBAJMJF
(END) Dow Jones Newswires
March 30, 2016 02:01 ET (06:01 GMT)
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