Helix BioMedix Reports Second Quarter 2009 Financial Results

For the second quarter of 2009, the company reported revenue of approximately $138,000, compared to revenue of approximately $87,000 in the first quarter of 2009 and $87,000 in the second quarter of 2008. Net loss for the second quarter of 2009 was approximately $1.0 million, or $0.04 per share, compared to a net loss of approximately $920,000, or $0.04 per share in the first quarter 2009, and $1.4 million, or $0.06 per share, in the same period one year ago. Improvement in net loss for the second quarter of 2009 compared to the same period a year ago was primarily attributable to reduced operating and financing-related expenses.

"Our second quarter results were moderated by the weak global economy, resulting in customers delaying certain projects," stated R. Stephen Beatty, President and Chief Executive Officer of Helix BioMedix. "However, we are beginning to see some improvement as our second quarter product sales represented eight percent of our revenue as compared to three percent of our revenue in the first quarter and none of our revenue in the second quarter of 2008. The number of products containing Helix BioMedix peptides continues to expand even though consumer purchases of skin care products have slowed due to the economy. We remain on schedule to launch a second Helix BioMedix-branded product line by year end, positioning our business to benefit as macroeconomic conditions improve for both our partners and the broader consumer markets."

As of June 30, 2009, cash and cash equivalents were approximately $2.8 million compared to approximately $985,000 as of December 31, 2008. The increase in cash and cash equivalents primarily resulted from proceeds of approximately $3.5 million from the company's issuance of convertible notes payable and warrants in the first quarter of 2009 less cash used in operating activities during the first six months of 2009.

Beatty continued, "The company continues to invest in research and development for application of our SmartPeptide(TM) Technology to a broad array of consumer and over-the-counter products and potential prescription applications of key peptides utilized for wound care and infection control. The ongoing partnership with industry leader Evonik has expanded our opportunities in key end markets, including potential product integration with global cosmetic companies. Additionally, we plan to launch direct sales through our own webstore in late August for our branded Striking(TM) Skin Care line launched late last year."

Beatty concluded, "We have significant growth opportunities for key Helix BioMedix peptides in both the dermatology and pharmaceutical markets. We are also positioned to advance development of our lead Rx candidates for broad markets such as acne, wound care and MRSA infection once we have identified the right partners to help facilitate these efforts. During this time, we continue to closely manage costs and pursue our opportunities in the broader cosmetic and skin care markets, while maintaining focus on increasing our consumer products revenue."

About Helix BioMedix, Inc.

Helix BioMedix, Inc. is a biopharmaceutical company with an extensive library of diverse bioactive peptides and patents covering six distinct classes and hundreds of thousands of peptide sequences. Core competencies include peptide design, synthesis and characterization together with assay development, screening, tissue culture and microbiology, leveraged through relationships with contract research organizations and peptide manufacturers. The company takes product development programs from theoretical concept to a validated and qualified skin care active ingredient fully validated as to efficacy and safety. Applications for Helix BioMedix peptides include anti-aging cosmeceutical skin care and acne treatment as well as other topical anti-infective pharmaceuticals and wound healing applications. Striking and SmartPeptide are trademarks of Helix BioMedix, Inc. More information about the company and its proprietary peptides may be found on the company's website at www.helixbiomedix.com.

Forward-Looking Statements

This press release contains forward-looking statements (statements which are not historical facts) within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding activities, events or developments that the company expects, believes or anticipates may occur in the future, including statements related to its potential growth, product development and commercialization and revenue. A number of factors could cause actual results to differ from those indicated in the forward-looking statements, including the company's ability to successfully raise additional capital, enter into revenue generating license agreements, continue its research and development efforts, including pre-clinical and clinical studies, and continue developing marketable peptide-based products, and general economic conditions. Additional assumptions, risks and uncertainties are described in detail in the company's reports and other filings with the Securities and Exchange Commission. Such filings are available on the company's website or at www.sec.gov. Readers are cautioned that such forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those set forth in the forward-looking statements. The company undertakes no obligation to publicly update or revise forward-looking statements to reflect subsequent events or circumstances.

HELIX BIOMEDIX, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
                                                                      June 30,             December 31,
                                                                      2009                 2008
ASSETS
Current assets:
Cash and cash equivalents                                             $   2,807,024        $    984,844
Restricted cash - subscription deposits for convertible debt offering     --                    970,000
Accounts receivable, net                                                  108,539               50,467
Inventory                                                                 163,046               111,411
Prepaid expenses and other current assets                                 54,069                104,706
Total current assets                                                      3,132,678             2,221,428
Deposits                                                                  8,522                 8,522
Property and equipment, net                                               93,100                120,154
Intangible assets, net                                                    315,723               353,603
Total assets                                                          $   3,550,023        $    2,703,707
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable                                                      $   67,608           $    71,824
Accrued compensation and benefits                                         43,023                101,734
Accrued expenses                                                          90,516                61,563
Deferred rent                                                             927                   2,039
Other current liabilities - subscription deposits for convertible         --                    970,000
debt offering
Total current liabilities                                                 202,074               1,207,160
Convertible notes payable                                                 1,301,174             --
Convertible notes payable, related party                                  4,988,844             3,000,000
Accrued interest on convertible notes payable                             41,485                --
Accrued interest on convertible notes payable, related party              394,017               211,069
Total liabilities                                                         6,927,594             4,418,229
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, $0.001 par value, 25,000,000 shares authorized; no       --                    --
shares issued or outstanding
Common stock, $0.001 par value, 100,000,000 shares authorized;            25,654                25,654
25,653,512 shares outstanding at June 30, 2009, and December 31, 2008
Additional paid-in capital                                                30,622,339            30,342,249
Accumulated deficit                                                       (34,025,564 )         (32,082,425 )
Total stockholders' equity (deficit)                                      (3,377,571  )         (1,714,522  )
Total liabilities and stockholders' equity (deficit)                  $   3,550,023        $    2,703,707

HELIX BIOMEDIX, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
                                                                   Three months ended June 30,             Six months ended June 30,
                                                                       2009                2008                2009                2008
Revenue:
Licensing and development fees                                     $   29,795          $   59,330          $   64,572          $   206,392
Peptide and consumer product sales                                     98,441              6,143               140,970             99,451
Administrative services revenue, related party                         10,251              21,772              20,196              21,772
Total revenue                                                          138,487             87,245              225,738             327,615
Cost of revenue:
Cost of peptide and consumer product sales                             82,999              6,085               121,581             75,469
Cost of administrative service revenue, related party                  10,050              21,772              19,800              21,772
Other cost of revenue                                                  --                  --                  --                  38,781
Total cost of revenue                                                  93,049              27,857              141,381             136,022
Gross profit                                                           45,438              59,388              84,357              191,593
Operating expenses:
Research and development                                               239,278             198,238             399,692             393,415
Marketing and business development                                     120,061             89,041              236,034             203,728
General and administrative                                             411,921             586,650             773,789             1,020,019
Accounting, legal and professional fees                                116,086             159,502             300,811             320,317
Depreciation and amortization                                          32,530              34,901              66,002              69,950
Total operating expenses                                               919,876             1,068,332           1,776,328           2,007,429
Loss from operations                                                   (874,438   )        (1,008,944 )        (1,691,971 )        (1,815,836 )
Other income (expense):
Interest income                                                        3,102               17,074              8,145               35,864
Interest expense on convertible notes payable                          (27,404    )        --                  (41,485    )        --
Interest expense on convertible notes payable, related party           (101,721   )        (63,120    )        (182,948   )        (93,698    )
Accretion of discount on convertible notes payable                     (9,079     )        --                  (13,736    )        --
Accretion of discount on convertible notes payable, related party      (13,856    )        (546,011   )        (21,144    )        (831,426   )
Change in value of derivative instruments, including related party     --                  152,706             --                  11,803
Unrealized loss on marketable securities                               --                  --                  --                  (30,000    )
Other income (expense), net                                            (148,958   )        (439,351   )        (251,168   )        (907,457   )
Net loss                                                           $   (1,023,396 )    $   (1,448,295 )    $   (1,943,139 )    $   (2,723,293 )
Basic and diluted net loss per share                               $   (0.04      )    $   (0.06      )    $   (0.08      )    $   (0.11      )
Weighted average shares outstanding                                    25,653,512          25,653,512          25,653,512          25,653,512

SOURCE: Helix BioMedix, Inc.

Investor Contact: 
Shelton Group Investor Relations 
Matt Kreps, 972-239-5119 X 125 
mkreps@sheltongroup.com 
or 
Company Contact: 
Helix BioMedix, Inc. 
R. Stephen Beatty, 425-402-8400 
President and CEO 
sbeatty@helixbiomedix.com