Attached files
| file | filename |
|---|---|
| EXCEL - IDEA: XBRL DOCUMENT - OxySure Therapeutics, Inc. | Financial_Report.xls |
| EX-32.1 - CERTIFICATION - OxySure Therapeutics, Inc. | f10q0314ex32_oxysure.htm |
| EX-31.2 - CERTIFICATION - OxySure Therapeutics, Inc. | f10q0314ex31ii_oxysure.htm |
| EX-31.1 - CERTIFICATION - OxySure Therapeutics, Inc. | f10q0314ex31i_oxysure.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2014
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 000-54137
OXYSURE SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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71-0960725
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(State or other jurisdiction of
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(IRS Employer
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|
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incorporation or organization)
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Identification No.)
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10880 John W. Elliott Drive, Suite 600, Frisco, TX 75033
(Address of principal executive offices)
(972) 294-6450
(Registrant’s telephone number)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yesþ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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þ
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(Do not check if a smaller reporting company)
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|||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
Our common stock is traded in the over-the-counter market and quoted on the OTCQB under the symbol “OXYS.”
The number of shares outstanding of the registrant’s class of $0.0004 par value common stock as of May 14, 2014 was 25,969,163
INDEX
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Page
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Number
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PART I - FINANCIAL INFORMATION
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||
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Item 1.
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Condensed Financial Statements (Unaudited)
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F-1
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Condensed Balance Sheets – March 31, 2014 and December 31, 2013
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F-1
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Condensed Statements of Operations – For the three months ended March 31, 2014 and 2013
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F-2
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|
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Condensed Statements of Cash Flows – For the three months ended March 31, 2014 and 2013
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F-3
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|
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Condensed Notes to Financial Statements
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F-4 – F-15
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|
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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2
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Item 3.
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Quantitative and Qualitative Disclosures about Market Risk
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6
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Item 4.
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Controls and Procedures
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6
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PART II - OTHER INFORMATION
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||
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Item 1.
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Legal Proceedings
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7
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Item 1A.
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Risk Factors
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7
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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7
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Item 3.
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Defaults upon Senior Securities
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7
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Item 4.
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Mine Safety Disclosures
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7
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Item 5.
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Other Information
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7
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Item 6.
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Exhibits
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7
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SIGNATURES
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8
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ITEM 1. CONDENSED FINANCIAL STATEMENTS
OXYSURE SYSTEMS INC.
BALANCE SHEETS
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March 31,
2014
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December 31,
2013
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|||||||
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(Unaudited)
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||||||||
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ASSETS
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||||||||
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Current assets
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||||||||
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Cash and cash equivalents
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$
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150,669
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$
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657,673
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||||
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Accounts receivable, net
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319,999
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47,183
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||||||
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Inventories
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277,259
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287,666
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||||||
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License fee receivable
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463,308
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500,000
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||||||
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Prepaid expenses and other current assets
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50,542
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107,305
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||||||
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Total current assets
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1,261,777
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1,599,827
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||||||
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Property and equipment, net
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129,617
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70,249
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||||||
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Intangible assets, net
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385,238
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392,746
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||||||
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Other assets
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306,122
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289,532
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||||||
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TOTAL ASSETS
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$
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2,082,754
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$
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2,352,354
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||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||||
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Current liabilities
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||||||||
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Accounts payable and accrued expenses
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$
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352,021
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$
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147,719
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||||
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Related party payable
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29,501
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118,627
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||||||
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Deferred revenue
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-
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2,976
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||||||
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Capital leases - current
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308,553
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309,129
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||||||
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Notes payable - current, net of discount
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47,103
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44,000
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||||||
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Convertible notes payable, net of discount
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252,643
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229,903
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||||||
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Total current liabilities
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989,821
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852,354
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||||||
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Long-term liabilities
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||||||||
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Capital leases
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554
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554
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||||||
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Notes payable, net of discount
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76,072
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76,072
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||||||
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Total long-term liabilities
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76,626
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76,626
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||||||
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TOTAL LIABILITIES
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1,066,448
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928,980
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||||||
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COMMITMENTS AND CONTINGENCY (NOTE 9)
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||||||||
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STOCKHOLDERS’ EQUITY
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||||||||
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Preferred stock, par value $0.0005 per share; 25,000,000 shares authorized;
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||||||||
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693,750 Series A convertible preferred shares issued and outstanding as of March 31, 2014 and 743,750 shares issued and outstanding as of December 31, 2013.
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346
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371
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||||||
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750 Series B convertible preferred shares issued and outstanding as of March 31, 2014 and 750 shares issued and outstanding as of December 31, 2013.
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-
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-
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||||||
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Common stock, par value $0.0004 per share; 100,000,000 shares authorized;
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||||||||
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25,969,163 shares of voting common stock issued and outstanding as of March 31, 2014 and 25,854,307 shares issued and outstanding as of December 31, 2013
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10,391
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10,343
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||||||
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Additional Paid-in Capital
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16,669,538
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16,700,307
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||||||
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Accumulated deficit
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(15,663,968
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) |
(15,287,647
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)
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||||
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TOTAL STOCKHOLDERS’ EQUITY
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1,016,307
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1,423,374
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||||||
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$
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2,082,754
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$
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2,352,354
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||||
See accompanying notes to financial statements
F-1
OXYSURE SYSTEMS INC.
STATEMENTS OF OPERATIONS
(Unaudited)
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For the three months ended
March 31,
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||||||||
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2014
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2013
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|||||||
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(Restated)
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||||||||
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Revenues, net
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$
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356,229
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$
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240,420
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||||
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Cost of goods sold
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205,590
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53,181
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||||||
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Gross profit
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150,639
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187,239
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||||||
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Operating expenses
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||||||||
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Research and development
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1,541
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36,711
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||||||
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Sales and marketing
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87,949
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107,347
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||||||
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Other general and administrative
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345,757
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256,617
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||||||
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Loss from operations
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(284,608
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)
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(213,436
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)
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||||
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Other income (expenses)
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||||||||
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Gain on settlement of debt
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16,226 | - | ||||||
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Other income (expense)
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(331
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) |
-
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|||||
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Interest expense
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(107,607
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)
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(28,716
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)
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||||
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Total other expenses
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(91,712
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)
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(28,716
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)
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||||
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Net loss
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$
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(376,320
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)
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$
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(242,152
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)
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Basic net loss per common share
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$
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(0.01
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)
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$
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(0.01
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)
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||
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Diluted net loss per common share
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$
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(0.01
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)
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$
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(0.01
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)
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||
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Weighted average common shares outstanding:
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||||||||
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Basic
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25,889,334
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22,665,515
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||||||
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Diluted
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25,889,334
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22,665,515
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||||||
See accompanying notes to financial statements
F-2
STATEMENTS OF CASH FLOWS
(Unaudited)
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Three Months Ended
March 31,
|
||||||||
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2014
|
2013
(Restated)
|
|||||||
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CASH FLOWS FROM OPERATING ACTIVITIES:
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||||||||
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Net loss
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$
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(376,320
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)
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$
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(169,349
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)
|
||
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Adjustments to reconcile net loss to net cash from operating activities:
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||||||||
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Depreciation and amortization expense
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12,141
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35,610
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||||||
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Amortization of debt discount and beneficial conversion features
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95,776
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21,802
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Expenses paid by related parties
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4,374
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-
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||||||
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Stock based compensation
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17,588
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(12,061
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)
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|||||
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Gain on extinguishment of debt
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(16,226
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)
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-
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|||||
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Stock issued for services
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-
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19,023
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||||||
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Changes in operating assets and liabilities:
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||||||||
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Accounts receivable
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(272,816
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)
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(54,542
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)
|
||||
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Inventories
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10,407
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(142
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)
|
|||||
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License fees receivable
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36,692
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-
|
||||||
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Prepaid expenses and other current assets
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40,173
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-
|
||||||
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Accounts payable and accrued liabilities
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212,259
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91,364
|
||||||
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Deferred revenue
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(2,976
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)
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(125,000
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)
|
||||
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NET CASH USED IN OPERATING ACTIVITIES
|
(238,928
|
)
|
(193,295
|
)
|
||||
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CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
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Purchase of property and equipment
|
(64,000
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)
|
(623
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)
|
||||
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Purchase of intangible assets
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-
|
-
|
||||||
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NET CASH USED IN INVESTING ACTIVITIES
|
(64,000
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)
|
(623
|
)
|
||||
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CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
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Common stock issued for cash
|
-
|
230,824
|
||||||
|
Payments made to related parties
|
(93,500
|
)
|
-
|
|||||
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Cash received from convertible notes payable
|
-
|
28,103
|
||||||
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Payments made on convertible notes payable
|
(110,000
|
)
|
-
|
|||||
|
Payments on capital leases
|
(576
|
)
|
12,881
|
|||||
|
Exercising of warrants
|
-
|
3,500
|
||||||
|
NET CASH USED IN FINANCING ACTIVITIES
|
(204,076
|
)
|
275,308
|
|||||
|
Net change in cash and cash equivalents
|
(507,004
|
)
|
81,390
|
|||||
|
Cash and cash equivalents, at beginning of period
|
657,673
|
13,514
|
||||||
|
Cash and cash equivalents, at end of period
|
$
|
150,669
|
$
|
94,905
|
||||
|
Supplemental disclosure of cash flow information:
|
||||||||
|
Cash paid during the period for:
|
||||||||
|
Interest
|
$
|
7,492
|
$
|
182
|
||||
|
Income taxes
|
$
|
-
|
$
|
-
|
||||
|
Supplemental non-cash investing and financing activities:
|
||||||||
|
Conversion of convertible notes payable
|
25,000
|
-
|
||||||
|
Conversion of Series A preferred stock to common stock
|
25
|
-
|
||||||
See accompanying notes to financial statements
F-3
OXYSURE® SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2014
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies of OxySure® Systems, Inc. (“OxySure” or the “Company”) is presented to assist in understanding the Company’s financial statements. The accounting policies presented in these footnotes conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the accompanying financial statements. These financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity.
Basis of Presentation - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. The interim financial statements include all adjustments which, in the opinion of management, are necessary in order to make the financial statements not misleading.
The accompanying Condensed Financial Statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”) and therefore do not contain all of the information and footnotes required by GAAP and the SEC for annual financial statements. The Company's Condensed Financial Statements reflect all adjustments that management believes are necessary for the fair presentation of their financial position, results of operations, comprehensive loss and cash flows for the periods presented. The information at December 31, 2013 in the Company's Condensed Balance Sheet included in this quarterly report was derived from the audited Balance Sheet included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on April 14, 2013. Where applicable, the Company's 2013 Annual Report on Form 10-K is referred to in this quarterly report as the “2013 Annual Report.” This quarterly report should be read in conjunction with the 2013 Annual Report.
F-4
OXYSURE® SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2014
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deferred Revenue and Income - We defer revenue and income when we invoice a customer or a customer makes a payment and the requirements of revenue recognition have not been met (i.e. persuasive evidence of an arrangement exists, shipment from a company warehouse has occurred, the price is fixed or determinable and collectability is reasonably assured). Deferred Revenue was $0 and $2,976 as at March 31, 2014 and December 31, 2013, respectively.
Inventory – Our inventory consists of raw material and components for our portable oxygen systems as well as completed products and accessories. Inventories are computed using the lower of cost or market, which approximates actual cost on a first-in first-out basis. Inventory components are parts, work-in-process and finished goods. Finished goods are reported as inventories until the point of title transfer to the customer.
At March 31, 2014 inventories consisted of the following:
|
March 31,
2014
|
||||
|
Parts inventory
|
$
|
$128,824
|
||
|
Work in process
|
78,809
|
|||
|
Finished goods
|
$
|
69,626
|
||
|
Total inventories
|
$
|
277,259
|
||
F-5
OXYSURE® SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2014
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash and Cash Equivalents - We invest our cash in deposits and money market funds with major financial institutions. We place our cash investments in instruments that meet high credit quality standards, as specified in our investment policy guidelines. These guidelines also limit the amount of credit exposure to any one issue, issuer or type of instrument.
Fair Value of Financial Instruments - Our financial instruments consist principally of cash and cash equivalents, accounts receivable and accounts payable. We believe that the recorded values of all of our other financial instruments approximate their fair values because of their nature and respective maturity dates or durations. The fair value of our long-term debt is determined by using estimated market prices. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows:
Level 1: Inputs are based on quoted market prices for identical assets or liabilities in active markets at the measurement date.
Level 2: Inputs include quoted prices for similar assets or liabilities in active markets and/or quoted prices for identical or similar assets or liabilities in markets that are not active near the measurement date.
Level 3: Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation.
The fair value of the majority of our cash equivalents was determined based on “Level 1” inputs. We do not have any marketable securities in the “Level 2” and “Level 3” category. We believe that the recorded values of all our other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.
Property and Equipment – Property and equipment are recorded at cost with depreciation and amortization provided over the shorter of the remaining lease term or the estimated useful life of the improvement ranging from three to seven years. Renewals and betterments that materially extend the life of an asset are capitalized. Expenditures for maintenance and repairs are charged to expense when incurred. Furniture and fixtures are depreciated over five years. Machinery and equipments are depreciated over five to seven years. Software is depreciated over three years. Leasehold improvements are computed using the shorter of the estimated useful lives of the assets or the lease terms. Depreciation expense was $4,631 and $4,883 for the three month periods ended March 31, 2014 and 2013, respectively.
Other Long-Lived Assets – We have two types of intangible assets – patents and trademarks. Intangible assets are carried at cost, net of accumulated amortization. Amortization expense for patents and trademarks was $7,508 and $7,489 for the three month periods ended March 31, 2014 and 2013, respectively.
Intangible assets with definite useful lives and other long-lived assets are tested for impairment if certain impairment indicators are identified. Management evaluates the recoverability of its identifiable intangible assets in accordance with applicable accounting guidance, which requires the assessment of these assets for recoverability when events or circumstances indicate a potential impairment exists. If impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Impairment charges for patents were $0 for each of the three month periods ended March 31, 2014 and 2013.
5-Year amortization expense for patents and trademarks is as follows:
|
2014
|
$ | 29,995 | ||
|
2015
|
29,995 | |||
|
2016
|
29,995 | |||
|
2017
|
29,995 | |||
|
Thereafter
|
264,957 | |||
| $ | 384,937 |
F-6
OXYSURE® SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2014
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Other Assets– We record Other Assets net of accumulated amortization. Amortization expense for Other Assets was $27,242 and $25,601 for the three month periods ended March 31, 2014 and 2013, respectively.
Capitalization of software: The Company accounts for internal-use software and website development costs, including the development of its partner marketplaces in accordance with ASC 350-50 (Intangibles – Website cost). The Company capitalizes internal costs consisting of payroll and direct payroll-related costs of employees who devote time to the development of internal-use software, as well as any external direct costs. It amortizes these costs over their estimated useful lives, which typically range between three to five years. The Company’s judgment is required in determining the point at which various projects enter the stages at which costs may be capitalized, in assessing the ongoing value of the capitalized costs, and in determining the estimated useful lives over which the costs are amortized. The estimated life is based on management’s judgment as to the product life cycle.
Research and Development Costs – Costs associated with the development of our products are charged to expense as incurred. $1,541 and $36,711 were incurred in the three month periods ended March31, 2014 and 2013, respectively.
Equity Warrants - We issued warrants to purchase shares of our common stock in connection with convertible notes. In accordance with ASC 470-20, Debt with conversions and other options, the proceeds from the notes were allocated based on the relative fair values of the notes without the warrants issued in conjunction with the notes and of the warrants themselves at the time of issuance. We record the fair value of the warrants at the time of issuance as additional paid in capital and as a debt discount to the notes. We amortize this debt discount as interest expense over the life of the note. Additionally, as a result of issuing the warrants with the convertible notes, a beneficial conversion option is recorded as a debt discount reflecting the incremental conversion option intrinsic value of the conversion option provided to the holders of the notes. We also amortize this debt discount as interest expense over the life of the notes. The intrinsic value of each conversion option was calculated as the difference between the effective conversion price and the fair value of the common stock, multiplied by the number of shares into which the note is convertible.
Stock-Based Compensation – We account for share-based payments, including grants of stock options to employees, consultants and non-employees; moreover, we issue warrants to the consultants and related parties. We are required to estimate the fair value of share-based awards and warrants on the date of grant. The value of the award is principally recognized as expense ratably over the requisite service periods. We have estimated the fair value of stock options and warrants as of the date of grant or assumption using the Black-Scholes option pricing model.
F-7
OXYSURE® SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2014
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
For the three month periods ended March 31, 2014 and 2013, stock based compensation expense was approximately $17,588 and $(12,061), respectively, which consisted primarily of stock-based compensation expense related to stock options issued to the employees and recognized under GAAP.
Shipping and Handling Costs - Shipping and handling charges to customers are included in net revenues, and the associated costs incurred are recorded in cost of revenues.
Advertising Costs - Advertising costs are charged to operations when incurred. We incurred $87,949 and $107,347 in advertising and promotion costs during the three month periods ended March 31, 2014 and 2013, respectively.
Net Income (Loss) Per Share - Basic earnings (loss) per share is computed based on the weighted average number of common shares outstanding. However, basic loss per share excludes anti-dilutive securities. Diluted earnings per share is computed based on the weighted average number of common shares outstanding, increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued, and reduced by the number of shares the Company could have repurchased from the proceeds from issuance of the potentially dilutive shares. Potentially dilutive shares of common stock include stock options and other stock-based awards granted under stock-based compensation plans and shares committed to be purchased under the employee stock purchase plan. As of March 31, 2014 there were 1,600,416 potentially dilutive shares.
Restatements and Reclassifications - Certain financial statement items have been reclassified to conform to the current periods’ presentation. These reclassifications had no impact on previously reported net loss.
Recent Accounting Pronouncements
We have reviewed recent accounting pronouncements and concluded that they are either not applicable to our business or that no material effect is expected on the financial statements as a result of future adoption.
F-8
OXYSURE® SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2014
(Unaudited)
NOTE 2 – NOTES PAYABLE
We have issued warrants for the purchase of shares of our restricted common stock in connection with raising equity and debt financing and for other professional services. The fair value of warrants issued is determined in accordance with Codification topic 470-20.
Frisco Promissory Note On March 22, 2011 we entered into an Amended and Restated Performance Agreement with the Frisco Economic Development Corporation (“FEDC”) pursuant to an economic incentive package. In terms of the Amended and Restated Performance Agreement, the FEDC provided us with economic assistance in the form of the renewal and extension a forgivable loan of $213,000 (the “Frisco Note”) together with performance credits over 5 years, commencing on March 22, 2011 and ending on the earlier to occur of: (i) the full payment of the economic incentives; or (ii) March 31, 2016.
The Frisco Note requires varying annual principal payments through December 2015. The Frisco Note is non-interest bearing; however, interest has been imputed at 12.34% per annum. On December 1, 2011 we received the first performance credit from the FEDC in the amount of $26,000 pursuant to the Amended and Restated Performance Agreement. Effective December 1, 2012 we received the second performance credit from the FEDC in the amount of $39,000. As of March 31, 2014 no determination was made regarding the third performance credit. The unamortized discount at March 31, 2014 was $24,825, and the net amount of the Frisco Note as at March 31, 2014 was $123,175.
On March 14, 2014 we settled a dispute with JMJ Financial in terms of which we extinguished three notes with a principal value of $110,000 plus approximately $14,650 in accrued but unpaid interest for $125,000 in cash.
F-9
OXYSURE® SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2014
(Unaudited)
NOTE 3 - SHAREHOLDERS’ EQUITY
Preferred Shares Rights
We have 25,000,000 shares of preferred stock authorized, par value $0.0005 per share.
Series A Convertible Preferred Stock: As of December 31, 2013, the Company had authorized the issuance of 3,143,237 shares of preferred stock designated as Series A Convertible Preferred Stock (“Series A Preferred”). The original issue price of the Series A Preferred is $1.00 per share. There were 693,750 and 743,750 Series A Preferred shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively.
During the three months ended March 31, 2014 the Company did not issue any shares of the Series A Preferred, and 50,000 shares of the Series A Preferred have been converted into approximately 61,000 shares of our common stock in a cashless conversion at a conversion ratio of 1.22:1.
Series B Convertible Preferred Stock: On December 19, 2013, the Company’s Board of Directors authorized the issuance of 750 shares of preferred stock designated as Series B Convertible Preferred Stock (“Series B Preferred”). The original issue price of the Series B Preferred is $1,000 per share. There were 750 and 750 Series B Preferred shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively.
During the three months ended March 31, 2014 the Company did not issue any shares of the Series B Preferred and no shares of Series B Preferred were converted to common stock.
Common Stock
The Company has authorized 100,000,000 shares of $0.0004 par value common stock.
During the three months ended March 31, 2014 we issued 61,000 shares of common stock pursuant to the cashless conversion of 50,000 shares of Series A Preferred.
During the three months ended March 31, 2014 we issued 53,856 shares of common stock pursuant to the cashless, partial conversion of convertible notes payable and accrued interest, valued at $25,000.
As of March 31, 2014 we had approximately 25,969,163 shares of common stock issued and outstanding.
F-10
OXYSURE® SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2014
(Unaudited)
NOTE 4 - STOCK OPTIONS AND WARRANTS
Equity Incentive Plans
In April 2004, our Board of Directors and the stockholders at that time approved the adoption of a Voting Stock Option Plan (“the Plan”), which provides for the issuance of stock options to eligible employees, consultants, Board members and Advisory Board members of the Company to acquire up to a maximum of 5,000,000 shares of common stock.
Our Board of Directors, which determines the number of options that will be granted, the effective dates of the grants, the option process and the vesting schedules, administers the Plan. In the absence of an established market for the common stock of the Company, the Board of Directors determines the fair market value of our common stock. Options generally expire between five and ten years from the date of grant and automatically terminate 90 days after such optionee ceases to be an eligible individual under the Plan other than by reason of death or disability.
The portion of options granted that is not exercisable on the date the optionee ceases to be an eligible individual under the Plan by reason other than death, shall terminate and be forfeited to the Company on the date of such cessation. An optionee has no right as a stockholder with respect to any shares covered by the options granted to him until a certificate representing such shares is issued to them.
Stock Options
The following table summarizes information about the number and weighted average of the options that were forfeited or expired under the Plan as at March 31, 2014:
|
Employee
|
Non-Employee
|
|||||||||||||||||||
|
Weighted
|
Weighted
|
|||||||||||||||||||
|
Number
|
Average
|
Number
|
Average
|
Combined
|
||||||||||||||||
|
Of
|
Exercise
|
Of
|
Exercise
|
Total
|
||||||||||||||||
|
Outstanding at December 31, 2013
|
1,552,991 | $ | 2.19 | 15,900 | $ | 2.50 | 1,568,891 | |||||||||||||
|
Granted
|
- | $ | - | - | $ | - | - | |||||||||||||
|
Exercised
|
- | $ | - | - | $ | - | - | |||||||||||||
|
Forfeited/Cancelled
|
(176,003 | ) | $ | 0.71 |
(15,900
|
) | $ |
0.96
|
(191,903
|
) | ||||||||||
|
Outstanding at March 31, 2014
|
1,376,988 | $ | 0.39 | - | $ |
-
|
1,376,988
|
|||||||||||||
F-11
OXYSURE® SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2014
(Unaudited)
NOTE 4 - STOCK OPTIONS AND WARRANTS (CONTINUED)
We used the following assumptions to estimate the fair value of options granted under the Plan for the three months ended March 31, 2014 and 2013:
|
Equity Incentive Plans for
Quarter
Ended March 31,
|
||||||||
|
2014
|
2013
|
|||||||
|
Expected terms (in years)
|
5-10
|
5-10
|
||||||
|
Volatility (weighted ave.)
|
40.45
|
%
|
40.45
|
%
|
||||
|
Risk-free interest rate (weighted ave.)
|
1.05%-1.74
|
%
|
0.69%-0.80
|
%
|
||||
|
Expected dividend rate
|
0
|
%
|
0
|
%
|
||||
The expected term of stock options represents the weighted average period the stock options are expected to remain outstanding. The expected term is based on the observed and expected time to exercise and post-vesting cancellations of options by optionees. We use historical volatility in deriving our expected volatility assumption because it believes that future volatility over the expected term of the stock options is not likely to differ from the past.
The expected dividend assumption is based on our history and expectation of dividend payouts. The fair value of the shares of common stock underlying the stock options has historically been determined by the board of directors. On or before February 2012, when our common stock commenced trading on the over the counter bulletin board (OTCQB), there has been no public market for our common stock. Consequently, the board of directors has historically determined the fair value of the common stock at the time of grant of the option by considering a number of objective and subjective factors including valuation of comparable companies, operating and financial performance, the lack of liquidity of capital stock and general and industry specific economic outlook, amongst other factors.
FASB ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company only records stock-based compensation expense for awards that are expected to vest. While we generally consider historical forfeitures in its estimates, judgment is also required in estimating the amount of stock-based awards that are expected to be forfeited. The Company’s estimates for forfeitures may differ from actual forfeitures. If actual results differ significantly from these estimates, stock-based compensation expense and its results of operations could be materially impacted when the Company records a true-up for the difference in the period that the awards vest. We adjust stock-based compensation expense based on our actual forfeitures on an annual basis, if necessary.
Stock compensation cost, using the graded vesting attribute method in accordance with Codification topic 718, is recognized over the requisite service period, generally 5 years, during which each tranche of shares is earned (zero, one, two, three, and four years). The value of each tranche is generally amortized on a straight-line basis. For the three months ended March 31, 2014 and 2013, stock based compensation expense was approximately $17,588 and $(12,061), respectively, which consisted primarily of stock-based compensation expense related to stock options recognized under GAAP issued to employees. For each of the three months ended March 31, 2014 and 2013, the number of options exercised was 0.
Compensation expense is recognized only for the portion of stock options that are expected to vest, assuming an expected forfeiture rate in determining stock-based compensation expense, which could affect the stock-based compensation expense recorded if there is a significant difference between actual and estimated forfeiture rates. As of March 31, 2014, total unrecognized compensation cost related to stock-based awards granted to employees and non-employee directors was $0.
F-12
OXYSURE® SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2014
(Unaudited)
NOTE 4 - STOCK OPTIONS AND WARRANTS (CONTINUED)
Warrants.
The following table summarizes our warrant activities for the three months ended March 31, 2014:
|
Weighted
|
||||||||
|
Number
|
Average
|
|||||||
|
Of
|
Exercise
|
|||||||
|
Warrants
|
Price
|
|||||||
|
Outstanding at December 31, 2013
|
2,967,009 | $ | 1.13 | |||||
|
Granted
|
- | $ | - | |||||
|
Exercised
|
- | $ | - | |||||
|
Forfeited/Cancelled
|
(17,500 | ) | $ | 0.58 | ||||
|
Outstanding at December 31, 2013
|
2,949,509 | $ | 1.13 | |||||
NOTE 5 – RELATED PARTY TRANSACTIONS
A summary of the related party financings and notes as at March 31, 2014 is as follows:
|
Related party
|
Julian Ross (1)
|
|||
|
Amount
|
$
|
29,501
|
||
|
Stated interest rate
|
0
|
%
|
||
|
Maturity
|
n/a
|
|||
(1) Our CEO, Mr. Ross provides us shareholder cash advances and other consideration from time to time to fund working capital.
F-13
OXYSURE® SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2014
(Unaudited)
NOTE 6 – OFF BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS
We have not entered into any transactions with unconsolidated entities whereby we have financial guarantees, subordinated retained interests, or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us.
NOTE 7 – SEGMENT INFORMATION
We are organized as, and operate in, one reportable segment: the development, distribution and sale of specialty respiratory products and related medical products, accessories, and services. Our chief operating decision-maker is our Chief Executive Officer. Our Chief Executive Officer reviews financial information presented for purposes of evaluating financial performance and allocating resources, accompanied by information about revenue by geographic regions. Our assets are primarily located in the United States of America and not allocated to any specific region and we do not measure the performance of our geographic regions based upon asset-based metrics. Therefore, geographic information is presented only for revenue. Revenue by geographic region is based on the ship to address on our customer orders.
The following presents total revenue by geographic region for the three month periods ended March 31, 2014 and 2013:
|
Three months ended
March 31,
|
||||||||
|
2014
|
2013
|
|||||||
|
Product Revenue:
|
||||||||
|
United States - product sales
|
$
|
301,603
|
$
|
115,420
|
||||
|
ROW - product sales
|
37,126
|
-
|
||||||
|
ROW - license fees/service revenue
|
17,500
|
125,000
|
||||||
|
Totals
|
$
|
356,229
|
$
|
240,420
|
||||
NOTE 8 – GOING CONCERN
Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Historically we have been suffering from recurring loss from operations. We have an accumulated deficit of $15,663,968 and $15,287,647 at March 31, 2014 and December 31, 2013, respectively, and stockholders’ equity of $1,016,307 and $1,423,374 as of March 31, 2014 and December 31, 2013, respectively. We require substantial additional funds to manufacture and commercialize our products. Our management is actively seeking additional sources of equity and/or debt financing; however, there is no assurance that any additional funding will be available.
In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying March 31, 2014 balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financing requirements on a continuing basis, to maintain present financing, and to generate cash from future operations. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence.
F-14
NOTE 9 – RESTATEMENT OF PREVIOUSLY AUDITED FINANCIAL STATEMENTS
As a result of the preparation of the Company’s audited financial statements as at December 31, 2013 the Company determined that the accounting treatment for certain marketing, interest and general and administrative items required restatement. The Company understated the marketing expense associated with two marketing and investor relations services agreements by $49,000; other general and administrative expense by $20,323; and interest expense by $3,480.
As a result, the Company understated its net loss by $72,803 for the three months ended March 31, 2013. In the restatement of the March 31, 2013 financial statements, the result from the changes was an increase in the net loss to $(242,152) and an increase to accumulated deficit and stockholders’ deficit of $72,803.
F-15
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis summarizes the significant factors affecting our results of operations, financial conditions and liquidity position for the three months ended March 31, 2014 and 2013, and should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this report.
Forward-Looking Statements
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 Securities and Exchange Commission, including our filings on Form 10-K.
Highlights
Some of our key financial performance statistics for the three months ended March 31, 2014, as compared to the same metric for the three months ended March 31, 2013, include the following:
|
●
|
Total revenue increased by approximately 48% to $356,229 as compared to $240,420 for the prior period;
|
|
●
|
Net loss increased by approximately $134,168 to $376,320 or $(0.01) per share for the quarter as compared to a loss of $242,152 or $(0.01) per share during the prior period; and
|
|
●
|
Sales and marketing expense decreased 18% to $87,949 as compared to $107,347 for the prior period, offset by an increase in general and administrative expense which increased to $345,757 as compared to $256,617 for the prior period, and an increase in interest expense to $107,607 from $28,716 in 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 OxySure Model 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 $967,609 of claimed indebtedness from our balance sheet by converting notes and other indebtedness to restricted common stock at conversion prices ranging from $1.50 per share to $.76 per 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.
|
2
Overview
OxySure Systems, Inc. was formed on January 15, 2004 as a Delaware “C” Corporation for the purpose of developing products with the capability of generating medical grade oxygen “on demand,” without the necessity of storing oxygen in compressed tanks. Our technology, process and methodologies involve the creation of medically pure (USP) oxygen from two dry, inert powders. We believe that other available chemical oxygen generating technologies contain hazards that make them commercially unviable for broad-based emergency use by lay rescuers or the general public. Our launch product is the OxySure Model 615 portable emergency oxygen system. We believe that the OxySure Model 615 is currently the only product on the market that can be safely pre-positioned in public and private venues for emergency administration of medical oxygen by lay persons, without the need for training.
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 OxySure makes the delivery devices lighter, safer, more affordable and easier to use. We believe our products can 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.
The OxySure Model 615 emergency oxygen device was cleared by the Food and Drug Administration (“FDA”) (510k, Class II) for over-the-counter purchase in December 2005. We believe it bridges the gap between the onset of a medical emergency and the time first responders arrive on the scene. We believe it allows a lay rescuer – a bystander or loved one – to administer medical oxygen during those first, critical minutes after an emergency occurs, improving medical outcomes and saving lives in the process. In March 2014 we also received CE Marking approval for Model 615, allowing us to begin commercializing it in the European Union.
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.
3
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 States and 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 States as 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.
4
|
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 March 31, 2014 Compared to the Three Months Ended March 31, 2013 (unaudited)
Revenues
We had $376,320 in revenues from operations for the three months ended March 31, 2014 as compared to revenues of $240,420 for the three months ended March 31, 2013. The increase in revenues is primarily attributable to an increase in US product sales.
Expenses
Total expenses for the three months ended March 31, 2014 were $748,444, which amount includes $435,247 of operating expenses, $205,590 in cost of goods sold, and $107,607 in interest expense, as compared to total expenses for the three months ended March 31, 2013 of $482,572, which amount includes $400,675 of operating expenses, $53,181 in cost of goods sold, and $28,716 in interest expense. The increase in total selling, general and administrative expenses is primarily attributable to an increase in advertising and promotional expense, an increase in other general and administrative expense, and an increase in interest expense, offset by a decrease in research and development expense. The decrease in interest expense is primarily attributable to a decrease in interest expense related to convertible notes.
Research and Development
Research and development expenses of $1,541 and $36,711 were incurred in the three months periods ended March 31, 2014 and 2013, respectively. The decrease in research and development expense is primarily attributable to a decrease in research and development expense associated with products for military markets.
Net Income (Loss)
Net loss for the three months ended March 31, 2014 was $ 376,320 basic and diluted net loss per share was $(0.01) as compared to a net loss for the three months ended March 31, 2013 of $242,152 and basic and diluted net loss per share of $(0.01). The increase in net loss during the period ended March 31, 2014 as compared to the three months ended March 31, 2013 is primarily due to the combined effect of an increase in revenues and a decrease in research and development expense, offset by a decrease in gross margins, an increase in interest expense, an increase in sales and marketing expense and an increase in other general and administrative expenses. The decrease in gross margins is primarily attributable to an increase in third party product sales as we took our molds offline for improvements and modifications.
Liquidity and Capital Resources
We had a cash balance of approximately $150,669 as of March 31, 2014, as compared to $657,673 as of December 31, 2013. Our funds are kept in financial institutions located in the United States of America.
We had positive working capital of approximately $271,956 as of March 31, 2014 as compared to a working capital of $747,473 as of December 31, 2013.
We had total notes payable of $392,633 and $377,973 as of March 31, 2014 and December 31, 2013, respectively. The increase in Notes Payable was primarily due to an increase in accrued but unpaid interest and a decrease in debt discount, offset by two partial note conversions in the amount of $25,000, and a note extinguishment in the amount of $110,000.
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 $319,999 and $47,183 as at March 31, 2014 and December 31, 2013, respectively.
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 $15,663,968 at March 31, 2014.
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 $2.1 million over the next 12 months to remain viable. There is no assurance that we will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty. However, there can be no assurance that any additional financing will be available to us. Additional equity financing may involve substantial dilution to our then existing stockholders. In the event we are unable to raise additional capital, we may be required to substantially reduce or curtail our activities.
5
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our President and Chief Financial Officer has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of the end of period covered by this report. Based upon such evaluation, the President and Chief Financial Officer concluded that our disclosure controls and procedures were not effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
6
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is subject to litigation in the normal course of business, none of which management believes will have a material adverse effect on the Company’s financial statements.
On or about December 13 of 2013, Wall Street Buy Sell Hold, Inc., (“WSBSH”) filed a lawsuit against the Company in the New York Supreme Court, Nassau County. The suit seeks damages in the form of money, stock and warrants for breach of a marketing agreement entered into on October 22, 2012 and another entered into on March 11, 2013. We have answered the complaint and filed a counterclaim against WSBSH seeking the return of all moneys and shares we paid or transferred to WSBSH, as well as punitive damages for fraud. Management believes the WSBSH claims have no merit, and we intend to vigorously defend our interests in this matter.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
The following Exhibits are filed herein:
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No.
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Title
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31.1
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Certification of President Pursuant to the Securities Exchange Act of 1934, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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31.2
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Certification of Chief Financial Officer Pursuant to the Securities Exchange Act of 1934, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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32
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Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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DATED: May15, 2014
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OXYSURE SYSTEMS, INC.
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/s/ Julian T. Ross
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BY: Julian T. Ross
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ITS: President and Chief Financial Officer
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(Principal Executive Officer,
Principal Financial Officer and Principal Accounting Officer)
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8