HXBM Helix Biomedix Inc (PK)

Helix BioMedix, Inc. (OTCQB: HXBM), a developer of bioactive peptides, today announced financial results for the first quarter ended March 31, 2012.

First Quarter 2012 Financial and Business Highlights

• Revenue increased 90% to $680,000, compared to $358,000 for the same period in 2011.
• The year-over-year increase in revenue reflected a 120% increase in consumer product sales to NuGlow Cosmaceuticals, LLC, an affiliated company, an 87% increase in peptide and consumer product sales to non-affiliates and an 84% increase in licensing revenue.
• Net loss decreased to $582,000, compared to $710,000 for the same period in 2011.
• The company strengthened its capital resources through a $2.0 million line of credit with JP Morgan Chase Bank, N.A.

First Quarter 2012 Results

Total revenue for the first quarter of 2012 was $680,000, compared to $358,000 for the first quarter of 2011. The 90% year-over-year increase in revenue included an 87% growth in peptide and consumer product sales to non-affiliates, reflecting a higher volume of peptide utilizations by our ingredient distributors as well as stronger demand for our skin care products. License revenue increased 84% compared to the prior year, driven by higher volumes with licensees. Sales to NuGlow Cosmaceuticals, LLC, an affiliated company, increased 120% to $113,000 in the first quarter of 2012, reflecting ramped up sales of NuGlow products to target consumers.

Gross profit for the first quarter of 2012 was $471,000, compared to $237,000 for the first quarter of 2011, representing an increase of 99%. The improved gross profit was derived from higher royalties as well as growth in sales of peptides and consumer products.

Commenting on the results, R. Stephen Beatty, President and Chief Executive Officer of Helix BioMedix, stated, “The first quarter reflects continued execution across our business lines. Revenue improved significantly from the prior year quarter, driven by growth in both license activity and sales of peptide and consumer products. Sales to NuGlow continued to increase, driven by higher customer adoption.”

Total operating expenses were $1.0 million for the first quarter, compared to $963,000 in the prior year period. Marketing and business development expenses increased 48% year-over-year due to higher advertising costs and stock-based compensation expenses. Research and development decreased by 61% compared to the prior year period, reflecting reduced R&D staffing and lower research expenses recorded in the quarter.

Net loss for the first quarter of 2012 was $582,000, or $(0.01) per share, compared to a net loss of $710,000, or $(0.01) per share, for the first quarter of 2011. The decrease in net loss for 2012 compared to the prior year reflects revenue growth combined with continued operating expense controls as Helix BioMedix product volumes and license utilization have increased.

As of March 31, 2012, cash and cash equivalents were $1.2 million, compared to $1.7 million at December 31, 2011. The decrease in cash was due primarily to cash used in operations during the quarter. In addition, a $2.0 million line of credit with JP Morgan Chase Bank, N.A. was established in March 2012 on the company’s behalf by its largest stockholder with JP Morgan Chase Bank, N.A. The line of credit has a maturity date of July 1, 2013 but will automatically renew until July 1, 2014 unless terminated by JP Morgan at least 14 days prior to the maturity date, at which time the company may draw up to the balance remaining on the line of credit. Amounts outstanding under the line of credit bears an interest rate of 0.75% per annum and are due and payable on or before July 1, 2014.

Beatty concluded, “Helix BioMedix continues to build on its improved market position, broadened distribution channels and increased customer base. We have closely controlled operating expenses as revenue ramped over the past year, but we anticipate higher patent expenses related to the nationalization process of new patent grants during the remainder of the year. We are working closely with our customers and partners to further expand utilization of our peptides and provide greater support for their new product development and sales efforts. We look forward to continued progress in 2012.”

About Helix BioMedix, Inc.

Helix BioMedix, Inc. is a biopharmaceutical company with an extensive library of structurally diverse bioactive peptides and patents covering hundreds of thousands of peptide sequences. Core competencies include peptide design, synthesis and characterization together with assay development, screening, tissue culture and microbiology, leveraged through relationships with contract research organizations and peptide manufacturers. The company takes product development programs from theoretical concept to a qualified skin care active ingredient fully validated as to efficacy and safety. Applications for Helix BioMedix peptides include anti-aging cosmeceutical skin care and acne treatment as well as other topical anti-infective pharmaceuticals and wound healing applications. Striking and SmartPeptides are registered trademarks and Cerakine, Apothederm and SmartPeptide are trademarks of Helix BioMedix, Inc. More information about the company and its proprietary peptides may be found on the company’s website at www.helixbiomedix.com.

Forward-Looking Statements

This press release contains forward-looking statements (statements which are not historical facts) within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding activities, events or developments that the company expects, believes or anticipates may occur in the future, including statements related to its potential growth, product development and commercialization and revenue. A number of factors could cause actual results to differ from those indicated in the forward-looking statements, including the company's ability to successfully raise additional capital, enter into revenue generating license agreements, continue its research and development efforts, including pre-clinical and clinical studies, and continue developing marketable peptide-based products, and general economic conditions. Additional assumptions, risks and uncertainties are described in detail in the company’s reports and other filings with the Securities and Exchange Commission. Such filings are available on the company’s website or at www.sec.gov. Readers are cautioned that such forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those set forth in the forward-looking statements. The company undertakes no obligation to publicly update or revise forward-looking statements to reflect subsequent events or circumstances.

HELIX BIOMEDIX, INC. CONDENSED BALANCE SHEETS (Unaudited)    

March 31,

December 31, 2012 2011 ASSETS Current assets: Cash and cash equivalents $ 1,163,534 $ 1,688,945 Accounts receivable, net 424,824 239,773 Accounts receivable, affiliated company, net 235,265 200,935 Inventory 322,891 363,869 Deferred debt issuance costs, current 201,040 — Prepaid expenses and other current assets   80,441     64,583   Total current assets 2,427,995 2,558,105 Property and equipment, net 19,946 26,098 Intangible assets, net 129,354 146,297 Deferred debt issuance costs, non current 251,713 — Other long term assets 14,264 20,884 Investment in affiliated company   205,607     223,255   Total assets $ 3,048,879   $ 2,974,639     LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 177,035 $ 125,324 Accrued compensation and benefits 48,478 87,859 Accrued expenses 114,106 55,463 Deferred revenue 7,060 — Deferred gross profit, affiliated company 131,151 134,842 Deferred rent, current   7,748     7,155   Total current liabilities 485,578 410,643 Deferred rent, non-current   26,328     28,660   Total liabilities 511,906 439,303 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.001 par value, 25,000,000 shares authorized; no shares issued or outstanding — — Common stock, $0.001 par value, 100,000,000 shares authorized; 49,720,255 shares outstanding at March 31, 2012 and December 31, 2011 49,721 49,721 Additional paid-in capital 49,125,928 48,542,453 Accumulated deficit   (46,638,676 )   (46,056,838 ) Total stockholders’ equity   2,536,973     2,535,336   Total liabilities and stockholders’ equity $ 3,048,879   $ 2,974,639       HELIX BIOMEDIX, INC. CONDENSED STATEMENTS OF OPERATIONS (Unaudited)     Three months ended March 31, 2012 2011 Revenue: Licensing fees $ 315,092 $ 171,425 Peptide and consumer product sales 252,727 134,932 Consumer product sales to affiliated company   112,603     51,271   Total revenue   680,422     357,628   Cost of revenue: Cost of peptide and consumer product sales 157,773 91,297 Cost of consumer product sales to affiliated company   51,758     29,530   Total cost of revenue   209,531     120,827   Gross profit 470,891 236,801   Operating expenses: Research and development 87,085 225,163 Marketing and business development 303,106 204,437 General and administrative 384,576 341,792 Accounting, legal and professional fees 219,222 165,437 Depreciation and amortization   23,095     26,617   Total operating expenses   1,017,084     963,446   Loss from operations   (546,193 )   (726,645 )   Other income (expense): Interest income 740 1,204 Amortization of debt issuance costs (12,117 ) — Equity in earnings (loss) of affiliated company (17,648 ) 7,992 Change in value of option to purchase interest in affiliated company   (6,620 )   7,715   Other income (expense), net   (35,645 )   16,911   Net loss and comprehensive loss $ (581,838 ) $ (709,734 ) Basic and diluted net loss per share $ (0.01 ) $ (0.01 ) Weighted average shares outstanding   49,720,255     49,720,255