Skyline Medical Reports 2013 Full-Year Results

Revenue and gross profit margin up significantly with greater demand, volume purchasing and inventory control for STREAMWAY® Fluid Waste Management System

News provided by

Skyline Medical Inc.

Mar 27, 2014, 08:00 ET

MINNEAPOLIS, March 27, 2014 /PRNewswire/ -- Skyline Medical Inc. (OTCQB: SKLN) — producer of the FDA-approved STREAMWAY System for automated, direct-to-drain medical fluid disposal — today reported its results for the full year ended December 31, 2013.

Key 2013 Financial Highlights:

Revenues increased 149% to $468,000.
Gross profit margin increased to 59%.
Units sold increased 200% to 21.
Trial program sales conversion was 100%.
Strengthened balance sheet through conversion of all convertible notes.

Key 2013 Operational and Marketing Highlights:

Completed first production run of the enhanced STREAMWAY System in Q4.
Added seven regional sales managers to support national rollout of enhanced system.
Expanded presence in the important Northeast region through distribution agreement with regional leader O.R. Specialties.
Increased accessibility of STREAMWAY to new and renovating customer facilities through partnership with Attainia, the world's most widely used healthcare equipment planning and budgeting software.
Began penetrating the large radiology market, focusing on procedures to remove excess fluid around the lungs (pleural) and abdominal cavity (ascitic).
Became a member of Practice GreenHealth, to reinforce the significant environmental advantages of the STREAMWAY System over traditional canister and mobile cart systems.

Full-year 2013 revenues rose to $468,000, up 149% compared to $188,000 in 2012. Gross profit for 2013 was $278,000, an increase from $60,232 in 2012. As a result, 2013 gross profit margin of 59% was significantly higher than the 32% gross profit margin in 2012, and moves us closer to our anticipated margins in the future.

Net loss for 2013 was ($9.4) million, or ($0.06) per diluted share, compared to net loss of ($7.4) million, or ($0.11) per diluted share, in 2012. The increase in net loss was primarily driven by increases in General and Administrative, and Sales and Marketing expenses as the Company prepares for a national rollout of the STREAMWAY System. However, the loss per diluted share improved due to an increase in shares.

"We're very pleased with the significant achievements made in 2013, as we are on track with our plan to make the STREAMWAY System the new standard in medical fluid waste management," stated Josh Kornberg, CEO of Skyline Medical.

"Our successes are a testament to both the passion of our employees and the industry's desire for a safer, more economical and environmentally conscientious way to manage medical fluid waste," commented Kornberg. "We're gradually taking market share away from our major competitor as healthcare facilities recognize the benefits of our more advanced, fully automated STREAMWAY System. Once they see our direct-to-drain system — which ties into their existing plumbing and vacuum systems, eliminating the need for staff to handle infectious fluid — healthcare facilities are eager to switch from antiquated manual canisters and mobile cart systems.

"In 2013, we expanded our footprint beyond surgical suites and began tapping the potential in interventional radiology, endocrinology, cystoscopy and urology, which also have fluid waste management needs," Kornberg said.

2014 Business Outlook

More than 55 STREAMWAY units are already scheduled for sale or trial in early 2014. Two of the trials are with major U.S. hospital systems that have multiple locations.

"With our improved product, rapid adoption of our technology in the marketplace, and the recent addition of technical and sales staff to fulfill back orders and meet growing demand, we're confident that 2014 will be a pivotal year for Skyline Medical," Kornberg said.

About Skyline Medical Inc.

Skyline Medical Inc. produces a fully automated, patented, FDA-cleared, waste fluid disposal system that virtually eliminates staff exposure to blood, irrigation fluid and other potentially infectious fluids found in the healthcare environment. Antiquated manual fluid handling methods — which require hand carrying and emptying filled-fluid canisters — present an exposure risk and potential liability. Skyline Medical's STREAMWAY System fully automates the collection, measurement and disposal of waste fluids and is designed to: 1) reduce overhead costs to hospitals and surgical centers, 2) improve compliance with Occupational State and Health Association (OSHA) and other regulatory agency safety guidelines, 3) improve efficiency in the operating room, and radiology and endoscopy departments — leading to greater profitability, and 4) provide greater environmental stewardship by helping to eliminate the approximately 50 million potentially disease-infected canisters that go into landfills annually in the United States. For additional information, please visit: www.skylinemedical.com.

Forward-looking Statements

Certain of the matters discussed in this announcement contain forward-looking statements that involve material risks to and uncertainties in the company's business that may cause actual results to differ materially from those anticipated by the statements made herein. Such risks and uncertainties include, among other things, inability to raise sufficient additional capital to operate our business; approximately $3.8 million in debts, liabilities and cash obligations that become due over the next twelve months; unexpected costs and operating deficits, and lower than expected sales and revenues, if any; adverse economic conditions; adverse results of any legal proceedings; the volatility of our operating results and financial condition; inability to attract or retain qualified senior management personnel, including sales and marketing personnel; our ability to establish and maintain the proprietary nature of our technology through the patent process, as well as our ability to possibly license from others patents and patent applications necessary to develop products; the Company's ability to implement its long range business plan for various applications of its technology; the Company's ability to enter into agreements with any necessary marketing and/or distribution partners; the impact of competition, the obtaining and maintenance of any necessary regulatory clearances applicable to applications of the Company's technology; and management of growth and other risks and uncertainties that may be detailed from time to time in the Company's reports filed with the Securities and Exchange Commission, which are available for review at www.sec.gov. This is not a solicitation to buy or sell securities and does not purport to be an analysis of the company's financial position. See the Company's most recent Annual Report on Form 10-K, as amended, and subsequent reports and other filings at www.sec.gov.

SKYLINE MEDICAL, INC. STATEMENTS OF OPERATIONS (USD $)
Year Ended December 31,
	2013		2012
Revenue	$	468,125	$	188,772

Cost of goods sold		189,707		128,540

Gross margin		278,418		60,232

General and administrative expense		7,530,037		6,285,905

Operations expense		1,096,969		761,047

Sales and marketing expense		578,793		172,970

Interest expense		636,503		259,349

Loss (gain) on valuation of equity-linked financial instruments		-157,580		3,116

Total expense		9,684,722		7,482,387

Net loss available to common shareholders	$	-9,406,304	$	-7,422,155

Loss per common share – basic and diluted	$	-0.06	$	-0.11

Weighted average shares used in computation – basic and diluted		151,958,618		69,587,814

SKYLINE MEDICAL, INC.
BALANCE SHEETS (USD $)

	December 31,		December 31,
	2013		2012
ASSETS
Current Assets:
Cash	$	101,953	$	13,139
Accounts receivable, net of Allowance for Doubtful Accounts of $0 and $4,073 in 2013 and 2012		97,245		39,711
Inventories		122,175		145,209
Prepaid expense and other assets		60,588		27,409
Total Current Assets		381,961		225,468

Fixed assets, net		158,110		3,521
Intangibles, net		53,355		140,588

Total Assets	$	593,426	$	369,577

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Current portion of convertible debt, net of discounts of $0 and $21,138 (See Note 6)	$	-	$	1,081,187
Accounts payable		1,062,108		733,595
Accrued expenses		2,057,957		1,599,519
Short-term note payable (See Note 9)		280,000		-
Deferred Revenue		69,000		-
Total Current Liabilities		3,469,065		3,414,301

Long-term debt and convertible debt, net of discounts of $0 and $0 (See Note 6)		-		89,300
Accrued Expenses		331,216		-
Liability for equity-linked financial instruments (See Note 8)		11,599		169,179
Total Liabilities		3,811,880		3,672,780
Commitments and Contingencies		-		-
Stockholders' Deficit:
Common stock, $.01 par value, 800,000,000 authorized, 219,937,619 and 104,247,228 outstanding		2,199,376		1,042,473
Additional paid-in capital		23,279,585		14,945,435
Deficit accumulated during development stage		-28,697,415		(19,291,111)
Total Stockholders' Deficit		-3,218,454		(3,303,203)

Total Liabilities and Stockholders' Deficit	$	593,426	$	369,577