Critical Outcome Technologies Reports Fiscal 2015 Second Quarter Results - Seite 2

Financial Results

The Company's operational activities during the quarter were focused in three main areas; first, the completion of testing and preparation of the IND submission for COTI-2; second, financing efforts to fund the Phase 1 human trial of COTI-2 and the Company's operations for the next year; and, third, business development initiatives. These activities resulted in the Company incurring a net loss of $946,204, or $0.01 per share, for the quarter compared to a net loss of $598,220, or $0.01 per share, for the second quarter a year earlier. For the six months ended October 31, 2014, the Company reported a loss of $1,917,000 or $0.02 per common share, compared to a loss of $1,098,273, or $0.01 per common share, for the same period last year. The increased loss for the quarter and year-to-date were attributable to increased expenses of $325,507 and $776,726 respectively in all functional expense areas but primarily research and development and general and administration.

Research and development expenditures increased $231,052 for the quarter and $332,749 year-to-date primarily reflecting the completion of the two-species toxicity studies, chemistry and manufacturing testing and analysis in support of the COTI-2 IND filing, and third party assistance in the preparation of the investigational new drug submission to the FDA.

General and administration ("G&A") expenditures increased $95,869 in the quarter and $443,326 year-to-date primarily related to professional fees and corporate governance costs supporting strategic advice and pursuit of financing in the U.S. Other activities that increased G&A expenditures included; investor relations activities in the U.S., support costs in obtaining the U.S. listing on the OTC trading platform, assistance with successfully obtaining the Orphan Drug Designation for COTI-2, information technology upgrades and strategic planning sessions.

Financing

During the quarter, the Company generated approximately $723,000 in gross proceeds to fund operations with approximately $522,000 from the first tranche of a non-brokered private placement with accredited investors and a further $201,000 from the exercise of warrants. Subsequent to the quarter end, the Company closed the second and third tranches of the private placement for aggregate gross proceeds from the total financing of approximately $2.628 million.