OxySure Systems Inc. is planning to raise any additional money it may need through loans or stock sales, after terminating a merger agreement with Estill Medical Technologies.
Frisco, Texas-based OxySure products that enable medical-grade oxygen to be generated on demand, instead of stored in tanks. The company's product is called the OxySure Model 615, which is a portable emergency oxygen system approved by the U.S. Food & Drug Administration. OxySure also makes automated external defibrillators and other resuscitation and respiratory equipment.
The company filed a notice with the U.S. Securities and Exchange Commission on Nov. 26 that a merger with Estill Medical had been terminated after both parties gave notice to the other to abandon the transaction. Estill, headquartered in Dallas, makes a medical device called the Thermal Angel Blood IV Fluid Infusion Warmer, which heats blood or other fluids to body temperature prior to injection. If the deal had closed, OxySure would have been merged into Estill. Combined, the companies anticipated they would have had annual revenues of more than $10 million.
OxySure had a $16.45 million deficit as of Sept. 30. For the nine months ended Sept. 30, 2014, the company had a net loss of about $1.16 million, compared with $474,089 for the same period in 2013.
OxySure's products require significant capital for manufacturing and commercialization, which raises doubt about the company's ability to continue as a going concern, according to a Nov. 14 filing with the U.S. Securities and Exchange Commission. The company's management team expects that if funds from operations are not sufficient to sustain the company, it will either sell additional shares of stock or take out a loan. OxySure was able to increase its revenue for the third quarter significantly, to $818,456 from $545,820.
The company estimates in the Nov. 14 filing that it needs about $2.52 million to remain viable over the following 12 months. If Oxysure can't access the capital, it might have to curtail operations.
In the first three quarters in 2014, the company issued eight convertible notes to bring in $412,500.
For the previous edition of Turnaround Tuesday, see Struggling Video Eyewear Maker Vuzix Considers Licensing IP, More Debt.
For more struggling companies, see Mergers & Acquisitions Distressed Company Watch List.