PRLX - Parallax Health Sciences Reports Third Quarter 2019 Financial Results

November, 18 2019 06:00 AM Parallax Health Sci Inc

SANTA MONICA, Calif., Nov. 18, 2019 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE – Parallax Health Sciences, Inc. (OTCQB: PRLX) (“Parallax”), an outcome-driven connected healthcare company, reports financial results for the three and nine months ended September 30, 2019 and provides a business update.

"We are continuing to make progress, and our third quarter shows improvement in revenues and a reduction in expenses, while we reduced our shareholders deficit to under $5 million from more than $28 million in less than two years since December 31, 2017. We have positioned Parallax and its operating subsidiaries for accelerated growth, and upon completion of additional financial engineering, we expect the Company’s financial performance to demonstrate marked improvement in the future,” stated Paul Arena, Chief Executive Officer of Parallax Health Sciences. “In addition, we are getting ready to launch our service offerings across a number of verticals with a software-as-a-service (SaaS) business model to provide recurring revenues. We also continue to execute strategic intellectual property licenses that are highly profitable to us, and give us a further upside through royalty revenues in the future.”

“The global IoT in the healthcare market size is projected to reach over US$500 billion by 2025, expanding at a compounded annual growth rate of nearly 20% over that same period. Our technology platform provides vital outcomes optimization, as well as measurement and interventional tools, that are poised to meet the scale and extraordinary demands of our growing marketplace,” Mr. Arena added. “Our platform is ubiquitous, connecting to all IoT devices, and is the only platform that enables legacy and non-IoT diagnostic and biometric measurement devices to deliver data to the cloud. Our Good Health Outcomes platform has been developed to address the nearly US$1 trillion in waste in the US medical system by addressing patients’ adherence to medical and pharmaceutical regimens.”

Third Quarter Financial Highlights
Total revenues from continuing operations for the three months ended September 30, 2019 were $25,855, compared with total revenues of $990 for the third quarter of 2018.

A net loss from continuing operations of $2.4 million was recognized for the third quarter of 2019, or $0.01 per diluted share, compared with a net profit from continuing operations for the third quarter of 2018 of $25.0 million, or $0.12 per diluted share. The $27.4 million difference in net income from continuing operations is primarily due to extraordinary gains from the disposal of a subsidiary, and related extinguished debt, recognized during the 2018 fiscal year.

Cost of sales from continuing operations for the third quarter of 2019 were $3,899, compared with cost of sales of $5,230 for the same period last year. The decrease is due to lower expenses related to the human capital necessary to facilitate the effective delivery of the Company's remote patient monitoring and related services to its customers. Gross profit for the third quarter of 2019 was $21,956, an improvement from a gross loss from continuing operations of ($4,240) in the quarter ended September 30, 2018.

General and administrative (G&A) expenses for the third quarter of 2019 were $1.9 million, a 10% decrease from G&A expenses from continuing operations of $2.1 million for the same period last year. The decrease was primarily due to a reduction in legal and professional fees of $300,401. Stock compensation of $1.15 million represented a major component of G&A expenses in the third quarter of 2019.

In the third quarter of 2018, the Company deconsolidated RoxSan Pharmacy, recognizing a gain of $5,079,416, as well as a gain of $22,781,281 from the debt extinguished in connection with the subsidiary.

Net income (loss) from continuing operations for the three months ended September 30, 2019 was ($2.4) million, or ($0.01) per diluted common share, compared with net income of $25.0 million, or $0.17 per share, for the same period last year.

Year-to-date Financial Results
Total revenues from continuing operations for the nine months ended September 30, 2019 were $77,745, compared to total revenues from continuing operations of $10,749 for the same period last year. The increase in revenues is primarily due to licensing fees collected in the current year. Gross profit increased to $64,874 for the nine months ended September 30, 2019, compared with a gross (loss) from continuing operations of ($4,758) for the nine months ended September 30, 2018, an improvement of $69,632. Total operating expenses decreased to $5.20 million for the nine months ended September 30, 2019, compared with operating expenses from continuing operations of $5.25 million for the same period last year.

The Company recorded a net operating loss from continuing operations of $5.1 million, or $0.02 per diluted share, for the nine months ended September 30, 2019, compared with a net operating loss of $5.2 million or $0.03 per diluted share, for the same period last year.

Discount amortization and interest expense decreased significantly, from $4.5 million for the nine months ended September 30, 2018, to $0.5 million for the current year, a reduction of over $4.0 million.

A net loss of $6.5 million was recognized for the nine months ended September 30, 2019, compared to net income of $17 million for the same period last year. Excluding the extraordinary gains of $28 million recognized in the prior year, the net loss for the current year was reduced by $4.2 million.

Business Outlook
The Company forecasts that recognizable revenues will be sufficient to achieve breakeven from operations by the end of 2020, subject to the conversion of prospective business opportunities into revenues within the period.

Intellectual Property Portfolio
Parallax's solutions are supported by its intellectual property portfolio. The Company now owns or has exclusive licenses for 5 patent families and 15 patents with 6 additional patents pending with the United States Patent & Trademark Office, along with hundreds of claims. The claims cover a broad range of the Company's proprietary technologies and products. Parallax also owns 4 trademarks protecting the names of its products and identity in the marketplace.

About Parallax Health Sciences
Parallax Health Sciences is an advanced technology, outcome-driven telehealth company that allows for cost-effective remote diagnosis, treatment and monitoring of patients through proprietary platforms of integrated products and services. The Company's interoperable novel applications provide patients point-of-care testing and monitoring with information communicated via internet-based mobile phone applications that are agnostic as to operating system and are built on highly sophisticated data analytics. Information is retrieved real-time by physicians who are monitoring patients with chronic diseases or through biometric feedback for health-related behavior modification, and is automated for integration into electronic health records. The Company's products and offerings capitalize on the digital transformation in healthcare for improved patient compliance, diagnosis and treatment, and support healthcare system cost savings and efficiencies. For more information, please visit www.parallaxhealthsciences.com or www.parallaxcare.com.

Forward-Looking Statements
This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding our expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will," and other similar expressions are forward-looking statements. All forward-looking statements involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. Factors that may cause actual results to differ materially from those in the forward-looking statements include those set forth in our Form 10-K and other reports filed with the SEC. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Contact:

Paul Arena
paul@parallaxcare.com
cell 404-915-8449



PARALLAX HEALTH SCIENCES, INC

CONSOLIDATED BALANCE SHEETS







September 30, 2019

December 31, 2018


Unaudited



ASSETS






Current assets






Cash and cash equivalents
$
11,973

$
262

Operating lease right of use asset

77,494


––

Total current assets

89,467


262








Investments

1,000,000


––

Property and equipment, net

2,408


––

Intangible assets, net

488,570


579,035

Deposits

7,800


––

Goodwill

785,060


785,060








TOTAL ASSETS
$
2,373,305

$
1,364,357








LIABILITIES AND STOCKHOLDERS' DEFICIT






Current liabilities






Accounts payable and accrued expenses
$
2,419,514

$
2,655,138

Operating lease liability

77,494


––

Derivative liability, short-term

53,920


23,925

Debentures, convertible

––


724,903

Debentures, convertible, related party

––


411,006

Notes payable

360,000


––

Notes payable, related party

126,152


––

Notes payable, convertible, net of unamortized discount

680,176


296,000

Notes payable, convertible, related party

20,000


––

Related party payables

1,474,436


1,004,720

Total current liabilities

5,211,692


5,115,692








Long-term liabilities






License fees payable

450,000


430,000

Royalties payable

316,258


310,000

Derivative liability, long-term

––


34,000

Debentures, convertible, net of unamortized discount

––


184,870

Notes payable, related party

633,294


––

Notes payable, convertible

576,154


720,154

Notes payable, convertible, related party

––


491,100

Notes payable, bank

21,320


28,995

Total long-term liabilities

1,997,026


2,199,119

Total liabilities

7,208,718


7,314,811








Stockholders' deficit






Preferred stock, $.001 par, 10,000,000 shares authorized,

978


1,014

977,352 and 1,013,691 issued and outstanding






at September 30, 2019, and December 31, 2018, respectively






Common stock, $.001 par, 500,000,000 shares authorized,

234,455


158,113

234,454,740 and 158,113,141 issued and outstanding






at September 30, 2019, and December 31, 2018, respectively






Additional paid in capital - preferred

1,599,036


1,699,000

Additional paid in capital - common

19,479,319


11,382,341

Subscriptions receivable

(500,000
)

––

Accumulated deficit

(25,649,201
)

(19,190,922
)
Total stockholders' deficit

(4,835,413
)

(5,950,454
)







TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
$
2,373,305

$
1,364,357

The accompanying notes are an integral part of these consolidated financial statements.



PARALLAX HEALTH SCIENCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited







For the three months ended

For the nine months ended


September 30, 2019

September 30, 2018

September 30, 2019

September 30, 2018






As Restated





As Restated














Revenue
$
25,855

$
990

$
77,745

$
10,749

Cost of sales

3,899


5,230


12,871


15,507

Gross profit (loss)

21,956


(4,240
)

64,874


(4,758
)













General and administrative expenses

1,937,991


2,116,821


5,203,088


5,252,498














Operating loss

(1,916,035
)

(2,121,061
)

(5,138,214
)

(5,257,256
)













Other expenses












Gain on disposal of subsidiary

––


5,079,416


––


5,079,416

Gain (loss) on fair value adjustments

1,253


(93,700
)

105,141


(156,300
)
Gain (loss) on extinguishment of debt

(347,612
)

22,931,148


(915,615
)

22,931,148

Loss on settlement

––


––


(33,272
)

––

Discount amortization

(48,000
)

(155,000
)

(19,000
)

(2,775,000
)
Interest expense

(149,914
)

(660,518
)

(457,319
)

(1,741,726
)
Total other expenses

(544,273
)

27,101,346


(1,320,065
)

23,337,538














Net income (loss) – continuing operations

(2,460,308
)

24,980,286


(6,458,279
)

18,080,282














Net income (loss) – discontinued operations

––


93,773


––


(824,398
)













Net loss
$
(2,460,308
)
$
25,074,058

$
(6,458,279
)
$
17,255,884














Net income (loss) per common share – basic












Continuing operations
$
(0.011
)
$
0.167

$
(0.034
)
$
0.124

Discontinued operations
$
––

$
0.001

$
––

$
(0.006
)













Net income (loss) per common share – diluted












Continuing operations
$
(0.009
)
$
0.120

$
(0.028
)
$
0.088

Discontinued operations
$
––

$
––

$
––

$
(0.004
)













Weighted average common shares outstanding - basic

218,115,643


149,431,153


190,038,071


146,294,981

Weighted average common shares outstanding - diluted

262,011,413


208,254,652


233,933,841


205,118,481

The accompanying notes are an integral part of these consolidated financial statements



PARALLAX HEALTH SCIENCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited





For the nine months ended


September 30, 2019

September 30, 2018




As Restated

Cash flows from operating activities:






Net income (loss)
$
(6,458,279
)
$
18,080,282

Adjustments to reconcile net loss to net cash used by operating activities:






Depreciation and amortization

90,685


90,465

Stock compensation/stock option amortization

2,572,741


3,152,943

Discount amortization

19,000


2,775,000

Allowance for bad debt

––


236

Gain on disposal of subsidiary

––


(5,079,416
)
(Gain) loss on extinguishment of debt

915,615


(22,931,148
)
(Gain) loss on fair value adjustments

(105,141
)

156,300

Loss on settlement

33,272


––

Debt accretion

136,582


791,125

Changes in operating assets and liabilities:






Decrease in trade and other receivables

––


3,039

(Increase) in deposits

(7,800
)

––

Increase in accounts payable and accrued expenses

95,155


1,398,093

Increase in royalties payable

7,258


––

Increase in related party payables

886,383


492,356

Net cash used by operating activities

(1,814,529
)

(1,070,725
)







Cash flows from investing activities:






Purchase of professional equipment

(2,628
)

––

Net cash used by investing activities

(2,628
)

––








Cash flows from financing activities:






Proceeds from notes payable

220,000


––

Repayment of notes payable

(22,675
)

(5,451
)
Proceeds from convertible notes payable

556,780


825,000

Repayment of convertible notes payable

(65,000
)

(50,000
)
Repayment of debentures

(754,369
)

––

Proceeds from issuance of preferred shares

69,000


300,000

Proceeds from issuance of common shares

1,825,132


41,250

Net cash provided by financing activities

1,828,868


1,110,799








Net cash provided by continuing operations

11,711


40,074








Cash flows from discontinued operations:






Net cash used by operating activities

––


(39,942
)
Net cash used by discontinued operations

––


(39,942
)







Net increase in cash

11,711


132








Cash - beginning of period

262


183








Cash - end of period
$
11,973

$
315








NON-CASH ACTIVITIES






Discounts on long-term liabilities
$
19,000

$
2,775,000

Beneficial conversion feature of convertible promissory note
$
––

$
347,457

Fair value of stock warrants
$
335,310

$
810,000

Embedded conversion option of convertible promissory notes
$
9,370

$
850

Deemed dividends on preferred stock
$
––

$
283,347

Dividends paid in kind on preferred stock returned to treasury
$
58,232

$
––

Conversion of preferred stock to common stock
$
69,000

$
––

Preferred stock returned to treasury for debt settlement
$
100,000

$
––

Conversion of accounts payable to convertible note payable
$
20,000

$
37,500

Conversion of related party payables to preferred stock
$
––

$
450,000

Conversion of accounts payable to related party convertible note payable
$
20,000

$
––

Conversion of convertible notes payable to common stock
$
1,093,240

$
296,114

Conversion of related party convertible notes payable to common stock
$
1,021,057

$
––

Conversion of related party convertible notes payable to non-related party convertible notes payable
$
––

$
576,154

Conversion of related party payables to non-related party payables
$
––

$
42,356

Subscriptions receivable
$
(500,000
)
$
(92
)







SUPPLEMENTAL INFORMATION






Interest paid






Continuing operations
$
539,476

$
798

Discontinued operations
$
––

$
106

Income taxes paid
$
––

$
––

The accompanying notes are an integral part of these consolidated financial statements

Company Name:	Parallax Health Sci Inc
Stock Symbol:	PRLX
Market:	OTC

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