Rennova Health Reports 43.7% Revenue Increase to $18.7 Million, Faces $7.7 Million Net Loss

Rennova Health, Inc. reported a net revenue of $18.7 million for the fiscal year ending December 31, 2023, marking a significant increase of 43.7% from $13.0 million in 2022. The company attributed this growth to higher inpatient admissions, increased outpatient and emergency room services, and improved reimbursement rates following its designation as a Critical Access Hospital. Despite the revenue increase, Rennova recorded a net loss of $7.7 million for 2023, compared to a loss of $3.3 million in the previous year, primarily due to rising operational costs and legal settlements.

The company's operating expenses rose to $17.3 million in 2023, up from $14.5 million in 2022. Direct costs of revenues increased by 11.9% to $7.6 million, driven by higher staffing and supply costs. General and administrative expenses also saw a notable rise, increasing by 30.7% to $9.4 million, largely due to expenses related to its behavioral health subsidiary, Myrtle Recovery Centers, which began accepting patients in August 2023. The company’s interest expenses decreased to $1.5 million from $2.3 million, reflecting a waiver agreement with debenture holders that eliminated default interest.

Strategically, Rennova has undergone significant changes, including the formation of Myrtle Recovery Centers to expand its behavioral health services. The company also entered into stock exchange agreements with FOXO Technologies, exchanging its equity interests in Myrtle and Rennova Community Health, Inc. for shares and notes. These transactions are part of a broader strategy to streamline operations and focus on core healthcare services. As of December 31, 2023, Rennova had a working capital deficit of $35.6 million and a stockholders' deficit of $36.8 million, raising concerns about its ability to continue as a going concern.

Operationally, Rennova's workforce consisted of 149 employees as of April 1, 2024, with 96 being full-time. The company has faced challenges in maintaining adequate staffing levels, which have been exacerbated by the COVID-19 pandemic. The pandemic also impacted demand for services, although recent trends indicate a recovery. The company is currently evaluating the potential reopening of its Jamestown Regional Medical Center, which has been closed since 2019.

Looking ahead, Rennova aims to leverage its existing facilities to provide specialized services needed in rural communities. However, the company faces ongoing risks, including regulatory changes, competition, and the need for additional capital to fund operations and repay debts. Management has indicated that future cash needs will require seeking additional financing, which may lead to further dilution of existing shareholders. The company’s ability to execute its business plan remains contingent on improving its liquidity and operational efficiency.