Preaxia Healthcare Payment Systems Reports Improved Financial Results, But Remains Cash-Strapped and Uncertain About Future Funding

Preaxia Healthcare Payment Systems Inc. reported its financial results for the three months ended August 31, 2024, showing significant changes compared to the same period in the previous year. The company recorded a net loss of $4,627, a substantial decrease from the net loss of $40,919 reported for the three months ended August 31, 2023. This improvement is attributed to a dramatic reduction in total operating expenses, which fell to $4,627 from $40,919 in the prior year. The decrease in expenses was primarily due to a reduction in consulting fees, professional fees, and research and development costs.

The company reported no revenue for both the current and prior periods, maintaining its position in the healthcare payment processing market without generating sales. Preaxia earns a 10% commission on amounts reimbursed for eligible expenses, but no such transactions were recorded during the reporting periods.

Cash and cash equivalents at the end of the reporting period were $1, down from $14 as of May 31, 2024. The company’s total current liabilities increased slightly to $2,400,807 from $2,396,193 in the previous quarter. The accumulated deficit also widened to $(5,133,007) from $(5,128,380) as of May 31, 2024. Preaxia's working capital deficit increased to $2,400,806, compared to $2,396,179 in the prior period.

Cash flows used in operating activities improved to $(2,396) from $(13,599) year-over-year, while net cash provided by financing activities decreased to $2,383 from $13,948. The company continues to rely on advances from its principal shareholders to cover operational costs, with no assurance of future financing success.

Research and development expenses were eliminated in the current period, down from $1,520 in the previous year, reflecting a strategic decision to cut costs. The company has no long-term commitments for equipment purchases or leases and operates without a physical office space, with the CEO managing operations from his residence.

Preaxia's management has expressed substantial doubt regarding the company's ability to continue as a going concern, emphasizing the need for approximately $1,000,000 in capital over the next twelve months to meet creditor payments and advance its business plan. The company plans to pursue private placements of equity securities or loans to secure the necessary funding.