Parallax Health Sciences Reports 2018 Operating and Financial Results Records Net Income of $16.3 Million

Initiates $6 Million Equity Financing

Company Now Positioned for Growth through Execution on Multi-faceted Strategy

SANTA MONICA, CALIF / ACCESSWIRE / April 1, 2019 / Parallax Health Sciences, Inc. (OTCQB: PRLX) (“Parallax” or the “Company”), an outcome-driven connected healthcare company, today announced operating and financial results for the 12 months ended December 31, 2018, and provided a business update.

Management Commentary

“2018 was a transformative year for Parallax Health Sciences and we are now positioned for growth,” said Paul Arena, Parallax’s Chief Executive Officer. “Last year we successfully cleaned up our balance sheet following the closing of RoxSan Pharmacy in December 2017, and we executed on our organic initiatives.”

“During 2019, we intend to aggressively invest in our multi-faceted growth strategy, which encompasses monetization of our Point-of-Care diagnostics business, our remote patient monitoring operating business Parallax Care^™ and our IP portfolio,” continued Mr. Arena. “On the operations side, we plan to further expand our sales and client support teams, enhance the capabilities of our Fotodigm^® and Parallax Care^™ outcomes optimization platforms, and build out our distribution channels. As we progress through the year, benefits from these investments should become more evident, particularly those involving the sales and client services team expansion. In addition, as our Parallax Communications digital connected health consumer offerings launches, we anticipate a shift in revenue mix to reflect a growing proportion of recurring subscription revenues.”

“We are committed to further investments in our IP portfolio, as we seek to monetize these important assets,” added Mr. Arena. “Having recently signed our first IP licensing agreement, we have created a blueprint for future licensing activities. We will be implementing a more aggressive licensing initiative later in this year. We expect to report additional IP milestones during the year.”

“We intend to be better positioned to execute on this strategy upon completion of a $6 million equity financing, (the “Offering”). We have retained Maxim Group, LLC, to serve as our placement agent for the Offering, of which the details were filed in a Form 8-K with the Securities and Exchange Commission on March 29, 2019,” concluded Mr. Arena.

Management plans to hold an investment community conference call in mid-April 2019 to discuss the Company’s business progress, the details of which will soon be provided.

Full Year 2018 Financial Results

Revenue for the 12 months ended December 31, 2018 was $11,739, compared with $94,937 for the 12 months ended December 31, 2017. The decrease was attributed to the repositioning of our Fotodigm^® and Parallax Care^™ outcomes optimization platforms after we completed some initial testing in the market place.

Cost of sales was $20,339, or 173% of revenue, for the year ended December 31, 2018, versus $142,044, or 152% of revenue, for the year ended December 31, 2017. This decrease in the amount of cost of sales was also attributed to the repositioning of our Fotodigm^® and Parallax Care^™outcomes optimization platforms.

General and administrative expenses for 2018 were $6.6 million, versus $4.0 million for 2017.

Significant changes in general and administrative expenses of $2,555,181 during the year 2018 compared to 2017 were attributable to the following items:

• an increase in legal, accounting and consulting services of $1,537,728, primarily due to an increase in legal costs of $480,598 resulting from pending litigation and other matters requiring legal counsel; an increase from the establishment of a $250,000 reserve for anticipated future legal costs related to pending litigation; an increase of $112,441 resulting from consultants retained for litigation and valuation purposes in the current year, compared to no such expense in the prior year; a decrease in accounting and audit fees of $164,786 due to a change in auditors in the prior year, resulting in 2016 and 2017 audit fees charged by the newly engaged audit firm in the prior year, compared to only 2018 fees charged in the current year; an increase management consulting fees of $824,225 resulting from changes in management; and an increase in miscellaneous management fees of $35,250; and
• an increase in stock compensation/stock option amortization of $966,832, primarily due to an increase in stock awards, resulting in an increase in stock compensation of $926,944; an increase in deferred compensation for stock awards, resulting in an increase in stock award amortization expense of $42,863; the issuance of additional stock options, resulting in an increase in stock option amortization of $356,122; and fully amortized stock options, resulting in a decrease in stock option amortization of $359,097; and
• a decrease in salaries and fees, and related taxes and benefits of $259,348 primarily due to a decrease in compensation of $18,798, and employee benefits of $73,715, resulting from a decrease in staff; a decrease in payroll tax expense of $131,335 resulting from a reduction in accrued compensation and related payroll taxes; and a decrease in miscellaneous fees for outside services in the amount of $35,500; and
• an increase in depreciation and amortization of $36,881, primarily due to the acquisition of additional intangible assets in the prior year, resulting in partial year amortization expense in the prior year compared to a full year amortization in the current year; and
• an increase in rent expense for office space of $65,203, due to vacating certain temporary office space and the reallocation of primary office space; and
• an increase in travel, meals and entertainment of $26,867, primarily due to an increase in travel costs of $5,209; a one-time relocation cost incurred in the current year of $20,000, and an increase in meals and entertainment of $1,658; and
• an increase in office supplies and miscellaneous expenses of $181,018, due to an increase in automobile expense of $40,371, computer and internet costs of $9,814, transfer agent fees of $10,935, patent and product development costs of $73,896, storage and moving of $31,343, communication costs of $10,712, and other general office and administrative expenses of $3,947.

General and administrative expenses for both 2018 and 2017 were incurred for the purpose of advancing the Company closer to its financing and operating goals in the bio-medical and digital healthcare sectors.

The Company recognized net income of $16.3 million for 2018, or $0.12 per share, which included a $4.5 million gain on the disposal of a subsidiary, and a $23.2 million gain on extinguishment of debt, both related to the closure of the RoxSan Pharmacy subsidiary, as well as discount amortization expense of $2.8 million. This compares with a net loss for 2017 of $13.7 million, or $(0.09) per share, which included discount amortization expense of $5.5 million.

Intellectual Property Portfolio

During the second half of 2018, our wholly-owned subsidiary, Parallax Behavioral Health, Inc. (“PBH”) was granted United States Patent #US10,061,812 entitled, “Platform for Optimizing Data Driven Outcomes,” which protects Parallax’s technology platforms and proprietary, scalable and industry-first solutions. Along with this patent, PBH acquired a technology platform referred to as REBOOT™, an acronym for “Reliable Evidenced Based Outcomes Optimization Technologies,” which is specifically designed to improve health treatment outcomes using proprietary behavioral technology systems.

Our technologically advanced point-of-care diagnostics and our health management solutions are dramatically enriched and enabled through the addition of PBH’s latest behavioral health technologies. When in combination with our novel point-of-care immunoassay diagnostic testing system and our remote patient care technologies, our exclusive solutions are now fortified with our growing intellectual property portfolio that serves as an additional barrier to entry for our competitors.

Parallax has over 25 years of efficacy studies, combined with over $3.75 million invested into REBOOT™ by Grafton Health Systems, who PBH acquired the platform from in 2017. Since the acquisition, Parallax has integrated the REBOOT™ technology into the “Optimized Outcomes” division of the Parallax Care™ healthcare system, which also includes “Connected Health”, the division that joins Parallax’s POC Diagnostics and Remote Patient Care systems through its Fotodigm^® technology.

“Our data driven Optimized Outcomes platform is the cornerstone of our technology platform, and the key barrier to all of our competition in the marketplace,” said Nathaniel Bradley, Chief Technology Officer of Parallax Health Sciences. “This technology, when used within the healthcare system, has been proven to reduce healthcare costs, improve the quality of care, and empower the patients our systems serve. Our “Optimized Outcomes” division, led by Parallax Behavioral Health, is making an unabashed contribution to Parallax Health Sciences family of business operations, and its “Data Driven Outcomes” patent provides the Company the right to exclude others in an unprecedented set of lucrative vertical markets. This will enable long sought market solutions that are still being assessed by our team. The value of the assets, along with potential out-licensing and other activities, are robust and it is clear that we have exceptional, well-positioned assets within our behavioral health segment,” concluded Mr. Bradley.

For detailed information on Parallax’s patent portfolio, please refer to Part 1 item 1 of the Company’s annual Form 10-K report, filed with the Securities and Exchange Commission on March 29, 2019, and available at www.parallaxhealthsciences.com or www.sec.gov.

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.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:

LHA Investor Relations
Jody Cain jcain@lhai.com
Kevin Mc Cabe kmccabe@lhai.com
310-691-7100

SOURCE: Parallax Health Sciences, Inc.

These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to the financial statements, provided within the Company’s Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission on March 29, 2019.

PARALLAX HEALTH SCIENCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

PARALLAX HEALTH SCIENCES, INC.

CONSOLIDATED BALANCE SHEETS

These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to the financial statements, provided within the Company’s Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission on March 29, 2019.

SOURCE: Parallax Health Sciences, Inc.

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