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MyDx Reports Strong Third Quarter 2016 Financial Results

New Licensing Model to Drive Rapid Earnings Growth and
Rebuild Shareholder Value in 2017

Third Quarter Highlights:

  • Changes Business Model with Initial $2.5 Million Licensing Deal
  • Company Reduces Operating Cash Burn by 83%
  • Launches AquaDxTM and OrganaDxTM Sensors
  • New MyDx Smart Phone App Tops Apple iOS App Store Charts
  • Anticipates Reaching Positive Cash Flow in Current Quarter
  • Expects to Enter 2017 with a Strengthened Balance, Poised for Profitability

LA JOLLA, Calif., Nov. 23, 2016 (GLOBE NEWSWIRE) -- MyDx, Inc. (OTCQB:MYDX), a rapidly growing science and technology company that has developed MyDx®, the first multi-use handheld chemical analyzer for consumers, today announced its financial results for the third quarter ended September 30, 2016 and provided guidance that -- fueled in part by its new licensing model -- it expects to reach positive cash flow in the fourth quarter ending December 31, 2016 and achieve profitability in early 2017.

Strong, Third Quarter Operating Results
For the three months ended September 30, 2016 and 2015, the Company had net revenues of $134,240 and $219,180, respectively. The comparable decline in net revenues, year over year, reflects the revenues from CannaDx shipments in 2015 that were a cumulative buildup of nearly one year of pre-sales. For the three months ended September 30, 2016 and 2015, gross profit as a percentage of net revenues held steady at a healthy 40.2% and 40.8%, respectively.

For the three months ended September 30, 2016, the Company incurred operating expenses in the amount of $1,976,382 compared to $1,447,564 for the three months ended September 30, 2015. In the quarter ended September 30, 2016, the increase in expenses were a direct result of new investments made to create and launch a new global licensing model, with an initial emphasis across the greater China region. The Company’s licensing deal is expected to generate a minimum of $2.5 million in Earnings over the next 5 years.

On an operating basis, for the nine months ended September 30, 2016, MyDx reported net cash used in operating activities declined approximately 83% to ($698,547) compared with ($4,104,595) in the nine months ended September 30, 2015. For the quarter ended September 30, 2016, MyDx posted a net loss of ($2.87 million) or ($0.08) per share compared with a net loss of ($1.36 million) or ($0.06) per share in the year earlier quarter.

Commenting on the Company’s achievements, Daniel R. Yazbeck, MyDx Chairman and CEO, said, “Over the last nine months, we streamlined our operations across the board, reducing our operating cash burn by 83% year over year, which solidifies our path towards becoming cashflow positive by the end of the fourth quarter and profitable in 2017.

“During the third quarter, while completing the development, branding and launch of the AquaDx and OrganaDx product lines, we have been working diligently to create, negotiate and close a landmark Asian licensing distribution deal,” he added. “We are pleased to report successfully closing a 5 year $2.5 million high-margin transaction with our first licensing partner in China who will market and distribute the OrganaDx, AquaDx, and AeroDx product lines in that region.”

Q316 Progress: Triples Product Lines and Reaches Top of the iOS Charts

Driven by widespread liberalization of marijuana laws at the state level in the Nov. 8 US Election and a successful test marketing campaign, on November 15, the Company announced its CannaDxTM iOS smartphone app had catapulted to the top of the Apple iOS App Store Charts. This is a major accomplishment following its June 1, launch of its new, feature-rich CannaDxTM smart phone App for both iOS and Android platforms.

In addition to CannaDxTM Sensor launched in late 2015, in recent weeks, the Company has tripled its number of product lines launching two new Sensor Chips for its Analyzer that address major, global mass markets:

“We believe 2017 will be a watershed year for MyDx and its shareholders as we expand on our new products launches and licensing model. We extend our sincere thanks to our partners, customers, shareholders and industry advocates for their continued support of our mission,” Mr. Yazbeck concluded.

About MyDx, Inc.
MyDx, Inc. (OTCQB:MYDX) is a chemical detection and sensor technology company based in San Diego, California whose mission is to help people Trust & Verify® what they put into their minds and bodies. The Company developed MyDx®, a patented, affordable portable analyzer that provides real-time chemical analysis and fits in the palm of the user’s hand. The multi-use MyDx analyzer leverages over a decade of established chemical detection technology to measure chemicals of interest. The Company owns a substantial and growing intellectual property portfolio of patents covering its technology. The MyDx CannaDxTM, AquaDxTM and OrganaDxTM sensors are now commercialized, and the AeroDxTM application is next in line. All Sensors will be compatible with a MyDx App that empowers consumers to test the chemical composition of what they eat, drink and inhale. For more information, please visit www.cdxlife.com.

Forward-Looking Statements
This news release contains "forward-looking statements" as that term is defined in Section 27(a) of the Securities Act of 1933, as amended, and Section 21(e) of the Securities Exchange Act of 1934, as amended. Statements may contain certain forward-looking statements pertaining to future anticipated or projected plans, performance and developments, as well as other statements relating to future operations and results. Any statements in this press release that are not statements of historical fact may be considered to be forward-looking statements. Words such as "may," "will," "expect," "believe," "anticipate," "estimate," "intends," "goal," "objective," "seek," "attempt," or variations of these or similar words, identify forward-looking statements. These forward-looking statements by their nature are estimates of future results only and involve substantial risks and uncertainties, including but not limited to risks associated with the uncertainty of future financial results, additional financing requirements, development of new products, our ability to complete our product testing and launch our product commercially, the acceptance of our product in the marketplace, the uncertainty of the laws and regulations relating to cannabis, the impact of competitive products or pricing, technological changes, the effect of economic conditions and other uncertainties detailed from time to time in our reports filed with the Securities and Exchange Commission, available at http://ir.cdxlife.com/all-sec-filings or www.sec.gov.

MyDx, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
September 30, December 31,
ASSETS 2016 2015
Current assets:
Cash $183,752 $143,680
Accounts receivable 40,397 10,702
Inventory 341,522 451,973
Prepaid expenses and other current assets 34,264 51,978
Total current assets 599,935 658,333
Property and equipment, net 160,516 233,064
Other assets 87,828 104,365
Total assets $848,279 $995,762
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Asset based loans $223,497 $-
Accounts payable 843,662 619,528
Customer deposits 56,312 9,467
Accrued liabilities 1,472,617 281,761
Current portion of leases payable 2,915 2,773
Due to related party 1,075 1,075
Derivative liability 111,048 -
Convertible notes payable, current 309,649 50,574
Total current liabilities 3,020,775 965,178
Long-term liabilities
Note payable - Related Party 200,000 175,000
Convertible notes payable - 200,274
Other long-term obligations 508 2,721
Total liabilities 3,221,283 1,343,173
Commitments and contingencies (Note 11)
Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 authorized; zero shares issued as of September 30, 2016 and December 31, 2015, respectively. - -
Common stock, $0.001 par value, 10,000,000,000 shares authorized; 114,620,112 and 22,081,928 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively 114,620 22,081
Additional paid-in capital 11,757,927 9,528,072
Accumulated deficit (14,245,551) (9,897,564)
Total stockholders' deficit (2,373,004) (347,411)
Total liabilities and stockholders' deficit $848,279 $995,762

MyDx, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
for the three months
ended
September 30,
for the nine months
ended
September 30,
2016
2015
2016
2015
Net Revenues $134,240 $219,180 $574,880 $219,180
Cost of goods sold 79,434 131,173 285,123 131,173
Gross profit 54,806 88,007 289,757 88,007
Operating Expenses
Research and development 111,315 364,370 352,407 1,717,784
Sales and marketing 1,588,884 203,091 1,792,496 875,744
General and administrative 276,183 880,103 1,416,440 2,779,156
Total operating expenses 1,976,382 1,447,564 (3,561,343) 5,372,684
Loss from operations (1,921,576) (1,359,557) (3,271,586) (5,284,677)
Interest expense, net 807,622 1,051 863,001 442,811
Change in fair value of derivative liability (198,338) - (198,338) -
Loss on settlement of debt 335,952 - 409,887 -
Loss before provision for income taxes (2,866,812) (1,360,608) (4,346,136) (5,727,488)
Provision for income taxes - 575 1,850 1,375
Net loss $(2,866,812) $(1,361,183) $(4,347,986) $(5,728,863)
Basic and diluted loss per share $(0.08) $(0.06) $(0.15) $(0.35)
Weighted average shares used in computing net loss per share
Basic and diluted 34,235,772 21,845,932 29,750,062 16,601,476


Investor Contact: Phillip Sugarman, Vice President Investor Relations Partners Phone: 818-280-6800 psugarman@irpartnersinc.com

Source:MyDx, Inc.