Nutex Health (NUTX) - 2019 Q3 - Quarterly Report

Part I Financial Statements The unaudited financial statements for the nine months ended September 30, 2019, report a net loss of $1.5 million, a decrease in total assets, and a going concern warning due to an accumulated deficit and reliance on future financing Unaudited Condensed Consolidated Balance Sheets Consolidated Balance Sheet Summary (Unaudited) | Balance Sheet Items | Sep 30, 2019 ($) | Dec 31, 2018 ($) | | :--- | :--- | :--- | | Total Assets | $2,104,777 | $2,618,466 | | Total Current Assets | $52,988 | $42,313 | | Intangible assets, net | $2,050,113 | $2,572,015 | | Total Liabilities | $1,464,845 | $1,385,447 | | Total Current Liabilities | $1,464,845 | $1,385,447 | | Convertible notes payable, net | $72,546 | $377,611 | | Derivative liability | $0 | $288,242 | | Total Stockholders' Equity | $639,932 | $1,233,019 | | Accumulated Deficit | $(13,966,325) | $(12,462,814) | - The decrease in total assets was primarily driven by the amortization of intangible assets, while the reduction in stockholders' equity reflects the net loss incurred during the period[11] Unaudited Condensed Consolidated Statements of Operations Consolidated Statements of Operations Summary (Unaudited) | Metric | Three Months Ended Sep 30, 2019 ($) | Three Months Ended Sep 30, 2018 ($) | Nine Months Ended Sep 30, 2019 ($) | Nine Months Ended Sep 30, 2018 ($) | | :--- | :--- | :--- | :--- | :--- | | Sales | $7,550 | $22,582 | $19,175 | $30,500 | | Gross Profit (Loss) | $(2,492) | $14,748 | $(7,161) | $6,842 | | Loss from Operations | $(363,754) | $(367,012) | $(1,105,575) | $(1,267,990) | | Net Loss | $(373,749) | $(608,519) | $(1,503,511) | $(1,944,799) | | Net Loss per Share | $(0.48) | $(2.09) | $(2.13) | $(7.39) | - Sales decreased year-over-year for both the three and nine-month periods, however, the net loss narrowed in both periods, primarily due to lower operating expenses and favorable changes in other income/expenses, including the change in fair value of derivative liability[13] Unaudited Condensed Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows Summary (Unaudited) | Cash Flow Activity (Nine Months Ended Sep 30) | 2019 ($) | 2018 ($) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(332,349) | $(712,767) | | Net Cash Provided by Financing Activities | $342,009 | $706,500 | | Net Increase (Decrease) in Cash | $9,660 | $(6,267) | | Cash - End of Period | $10,029 | $3,182 | - For the nine months ended September 30, 2019, cash used in operations was significantly reduced compared to the prior year, and the company was dependent on financing activities, primarily proceeds from notes payable ($443,093), to fund its operations and debt repayments[17] Notes to Consolidated Financial Statements - Going Concern: The company has an accumulated deficit of $13,966,325 and a working capital deficit of $1,411,857 as of September 30, 2019, which raises substantial doubt about its ability to continue as a going concern, with its continuation dependent on obtaining necessary financing[47] - Subsequent Event - Reverse Merger: On October 29, 2019, the company (formerly iGambit Inc.) consummated a reverse merger with Clinigence Holdings, Inc., resulting in Clinigence becoming a wholly-owned subsidiary and former Clinigence stockholders acquiring 85% of the combined company's equity[95][96][97] - Subsequent Event - Corporate Actions: In connection with the merger, the company effected a 1-for-500 reverse stock split of its common stock and changed its name to Clinigence Holdings, Inc[98][83] - Customer Concentration: For the nine months ended September 30, 2019, two customers accounted for approximately 15% and 14% of total sales, and one customer accounted for 100% of accounts receivable[88] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the transformative reverse merger with Clinigence, shifting focus to medical technology, while highlighting declining revenues, reduced net loss, and critical liquidity challenges - The company's primary focus is the expansion of its subsidiaries, HealthDatix Inc., which provides a SaaS solution for Medicare's Annual Wellness Visits and Chronic Care Management, and the newly acquired Clinigence Health Inc., a healthcare IT company with a cloud-based platform for value-based care[107][108][113] Year-over-Year Comparison of Results | Period | Revenue (2019 vs 2018) ($) | Net Loss (2019 vs 2018) ($) | | :--- | :--- | :--- | | Three Months Ended Sep 30 | $7,550 vs $22,582 | $(373,749) vs $(608,519) | | Nine Months Ended Sep 30 | $19,175 vs $30,500 | $(1,503,511) vs $(1,944,799) | - General and Administrative (G&A) expenses decreased to $576,512 for the nine months ended Sep 30, 2019, from $752,930 in the prior-year period, primarily due to reductions in employee benefits, marketing, filing fees, and consulting expenses[122] - The company's liquidity is critical, with only $10,029 in cash at September 30, 2019, and management states that its ability to continue as a going concern depends on obtaining necessary equity financing and generating revenues from its subsidiaries[125][131] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk - Not Required[133] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of September 30, 2019, with no material changes to internal control over financial reporting - Based on an evaluation as of September 30, 2019, the CEO and CFO concluded that the company's disclosure controls and procedures are effective to provide reasonable assurance that required information is recorded, processed, summarized, and reported in a timely manner[135] - There were no changes in internal control over financial reporting during the quarter ended September 30, 2019, that have materially affected, or are reasonably likely to materially affect, internal controls[136] Part II Legal Proceedings As of September 30, 2019, the company is not a party to any material litigation - The Company is not a party to any litigation that is material to ongoing operations as of the period ended September 30, 2019[140] Risk Factors As a smaller reporting company, the company is not required to provide a detailed discussion of risk factors - Not required[141] Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report during the period - None[141] Defaults upon Senior Securities There were no defaults upon senior securities to report during the period - None[142] Other Information No other material information is required to be reported for the period - None[144] Exhibits The report includes CEO and CFO certifications as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 - Exhibits filed with this report include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[145]