Critical Outcome Technologies Reports Year-End Financial and Operating Results - Seite 2

The quarterly R&D expense decrease year over year was primarily due to a decrease of in vivo/in vitro testing partially offset by an increase in synthesis cost and miscellaneous R&D expenses, and salaries and benefits. The decrease of in vivo/in vitro testing relates primarily to the 28‐day two‐species toxicity testing for COTI‐2 that was underway throughout the fourth quarter of the previous year, which was completed in the first quarter of FYE 2015. The decrease in G&A expenditures was due primarily to a decrease in professional fees. The fourth quarter of the previous year included strategic financial advisory services to assist the Company in entering the U.S. market for financing purposes. These services concluded in November 2014 and accordingly no cost in this regard was incurred in the fourth quarter of FYE 2015. The financing expense increase related to the expensing of costs associated with the issuance of warrants initially recognized in equity but determined in the fourth quarter to be accounted for as warrant liability.

Fiscal Year

For the fiscal year, the Company had a loss of $3,813,186, or $0.04 per share, compared to a net loss of $2,996,179, or $0.03 per share, for the previous year. The increased loss of $817,007 was attributable to a $321,092 increase in R&D expenses, a $383,869 increase in G&A expenses, and a $180,712 increase in sales and marketing expenses.

The increase in R&D expenses was driven primarily by development efforts for COTI‐2 and the preparation of its IND application. Higher G&A expenses included an increase in share-based compensation, higher professional fees relating to financing and investor relations activities, and higher corporate governance expenses.

Financing

During the year, the Company realized gross proceeds of approximately $4.9 million through non-brokered private placements with accredited investors, and the exercise of warrants and share options. A portion of this financing was used to repay a $400,000 debenture that matured in February 2015. At the year-end, the Company had approximately $1.87 million in cash, cash equivalents and short-term investment that will provide funding for operations in fiscal 2016 as compared to approximately $0.83 million at FYE 2014. Subsequent to year-end, the Company announced a private placement financing for approximately $1.29 million to further support operations.