The following discussion and analysis summarizes the significant factors
affecting our results of operations, financial conditions and liquidity position
for the three months ended
Statements and information included in this Quarterly Report on Form 10-Q that are not purely historical, including, without limitation, statements that relate to the Company's expectations with regard to the future impact on the Company's results from new products in development, are forward-looking statements within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. When used in this report, words such as "believe," "expect," "intend," "goal," "plan," "pursue," "likely," "believe," "project," "anticipate," "intend," "estimate," "evaluate," "opinion," "may," "could," "future," "potential," "probable," "if," "will" and similar expressions generally identify forward-looking statements. These statements are subject to risks and uncertainties.
Forward-looking statements in this Quarterly Report on Form 10-Q represent our beliefs, projections and predictions about future events. These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievement described in or implied by such statements. Actual results may differ materially from the expected results described in our forward-looking statements, including with respect to the correct measurement and identification of factors affecting our business or the extent of their likely impact, the accuracy and completeness of publicly available information relating to the factors upon which our business strategy is based, or the success of our business. The factors or uncertainties that could cause actual results, performance or achievement to differ materially from forward-looking statements contained in this report can be found in our filings with the
Some of our key financial performance statistics for the three months ended
? Total revenue increased by approximately 48% to
$356,229as compared to $240,420for the prior period; ? Net loss increased by approximately $134,168to $376,320or $(0.01)per share for the quarter as compared to a loss of $242,152or $(0.01)per share during the prior period; and ? Sales and marketing expense decreased 18% to $87,949as compared to $107,347for the prior period, offset by an increase in general and administrative expense which increased to $345,757as compared to $256,617for the prior period, and an increase in interest expense to $107,607from $28,716in the prior period;
Some of our key non-financial highlights and milestones achieved during the first quarter of 2014 include the following:
? We received CE Marking approval of our flagship product, the
OxySureModel 615, paving the way for the launching of the product into the thirty countries belonging to the European Economic Area (EEA); ? We announced that we removed approximately $967,609of claimed indebtedness from our balance sheet by converting notes and other indebtedness to restricted common stock at conversion prices ranging from $1.50per share to $.76per share. ? We made significant progress in respect if the enhancement of Model 615 and replacement cartridges to for European markets and direct to consumer markets, by developing new molds and modifying existing molds; and
? We made significant progress on our corporate development initiatives.
To date, we have been issued 9 patents and we have other patents pending on this process and technology that we believe is revolutionizing the emergency/short duration oxygen supply marketplace. We believe that
The OxySure Model 615 emergency oxygen device was cleared by the
We have diversified our product portfolio to provide include solutions focused on the emergency medical preparedness and respiratory needs of our education, commercial and government customers. Our solutions include Automated External Defibrillators (AEDs) and accessories, resuscitation equipment, and respiratory and monitoring equipment and supplies.
The OxySure Strategy
The following summarizes the principal elements of our strategy:
? We launched the OxySure Model 615 into the K-12 education market in
the United States, and we subsequently diversified into other institutional markets, such as colleges, churches and places of worship, manufacturing facilities and other commercial and municipal buildings. We plan to continue to pursue institutional customers in these and other vertical markets, both in the United Statesand internationally. ? We believe that Model 615 is a natural complement and companion product to an Automated External Defibrillator (AED). We plan to continue to market Model 615 as a companion product to AEDs, and our goal in the foreseeable future is to pursue the placement of the OxySure Model 615 next to as many AEDs as possible, in the United Statesas well as internationally. We believe in the long term, however, Model 615 has the potential to become a standard issue item for public and private settings, just like a fire extinguisher. ? We plan to continue to leverage our core competencies in oxygen, breathing technologies, research and manufacturing to pursue revenue opportunities in new vertical markets, including the military. ? We plan to continue to build our sales force by recruiting dedicated sales professionals focusing on former first responders, paramedics and firefighters as well individuals from other medical, first aid and safety sales areas to market our products and craft solutions for our customers. ? Our channel strategy includes leveraging distribution partnerships to enhance market penetration, and we plan to increase our efforts to partner with distributors, including distributors of AEDs, safety products and medical devices. We plan to invest resources in training and tools for our distribution partners' sales, systems and support organizations, in order to improve the overall efficiency and effectiveness of these partnerships. ? We plan to continue our increasing efforts to promote market awareness and education of our products and their critical need, and our efforts may include partnerships with industry, medical thought leaders, and community and advocacy organizations. ? We plan to pursue market catalysts such as a legislative agenda for state and federal mandates, medical reimbursement for at risk markets, and insurance underwriting benefits and discounts for product users. ? We plan to continue to diversify our product offerings through the addition of complimentary or additive products and solutions that enhance our core product usability, feasibility, appeal or application, or that enhances our ability to access or add value to existing and new customers. In addition, we plan to continue our development efforts focused on developing new products incorporating our core "oxygen from powder" technology for other vertical markets, such as aviation, mining, and sports and recreation as applicable. ? We plan to pursue strategic alliances where applicable to accelerate our growth and access to new customers, sales channels, markets and products. Results of Operations
You should read the selected financial data set forth below along with our discussion and our financial statements and the related notes. We have derived the financial data from our unaudited financial statements. We believe the financial data shown in the table below include all adjustments consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of such information. Operating results for the period are not necessarily indicative of the results that may be expected in the future.
Three months ended March 31, 2014 2013 Net income loss
$ (376,320 ) $ (248,152 )
Shares used in computing basic loss per share amounts (weighted ave.)
25,889,334 22,665,515 Shares used in computing diluted loss per share amounts (weighted ave.) 25,889,334 22,665,515 Net loss per share: Basic and Diluted
$ (0.01 ) $ (0.01 )
Results for the Three Months Ended
Total expenses for the three months ended
Research and Development
Research and development expenses of
Net Income (Loss)
Net loss for the three months ended
Liquidity and Capital Resources
We had a cash balance of approximately
We had positive working capital of approximately
We had total notes payable of
We generally provide our customers with terms of up to 30 days on our accounts receivable. In some cases we require prepayment, depending on history or credit review. Further, we generally require pre-payment on orders shipped to international destinations. Our accounts receivable, net of allowances, were
Since inception, we have been engaged primarily in product research and development, obtaining certain regulatory approvals, investigating markets for our products, developing manufacturing and supply chain partners, developing our production capability, and developing distribution, licensing and other channel relationships. In the course of funding research and development activities, we have sustained operating losses since inception and have an accumulated deficit of
We completed product development of our launch product, the OxySure Model 615 and launched sales thereof in 2008. We have and will continue to use significant capital to manufacture and commercialize our products. These factors raise doubt about our ability to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of our common stock.
During the remainder of 2014 and 2015, we will need additional capital to market and sell our products, and to further develop and enhance our current product offerings, introduce new products and address unanticipated competitive threats, technical problems, economic conditions or other requirements. We estimate that we will require approximately