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Parallax Health Sciences Reports Third Quarter 2019 Financial Results

Company Increases Revenues by More Than 700% and Reduces Operating Loss by 10% Over Prior Year Nine Months Period

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

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