Braxia Scientific cash dwindles even as revenues rise

Braxia Scientific Corp. (CSE: BRAX) (OTC Pink: BRAXF)  reported its earnings for the third quarter ending December 31, 2023 as the company struggles to stay afloat amid a cash crunch. On a positive note, revenue increased 0.7% to $0.492 million in the quarter. The net loss of $0.904 million for the quarter improved over last year’s third-quarter net loss of $2.17 million.

Cash crunch

However, the company remains in a cash bind. At the end of 2023, Braxia‘s cash and cash equivalents were just $0.128 million with a working capital deficit of $1.81 million. The company said in a statement, “The Board has continued to look for strategic alternatives and alternative sources of capital or partnerships; however, challenges in accessing capital through public markets remain as a result of ongoing economic conditions.”

The company cut staff significantly this fiscal year and the remaining members have agreed to defer salary to enable the company to reach its next phase. The company warned that if additional funding wasn’t found in the “very short term”, the company would have to have more cost reductions, restructuring, the potential scaling back of clinic locations, and creditor concessions.

Despite the dire situation at the company, CEO Dr. Roger McIntyre preferred to remain positive and only said, “Treatment volumes across our clinical footprint continued to trend higher as our referrals for new patients also continued to increase in fiscal 2024 resulting in revenue growth. While our team aims to further reduce expenses, we expect to see improving efficiencies in the second half of this calendar year. Improvements underway to expand some of our clinical space will enable us to take in a higher volume of patients while adding new treatments and other support services that will increase revenues.”

Braxia has yet to achieve profitable operations, has accumulated cash and non-cash losses of $118,011,233 since inception, and expects to incur further losses in the development of its business. In addition to that, the existing funds and operational cash flow are not sufficient to fund the company’s operations.

Company turmoil

The company has clinic operations in the Canadian cities of Mississauga, Kitchener-Waterloo, Ottawa and Montreal. It said it continues to look to expand its clinic footprint in North America and beyond despite the turmoil within the company.

In January 2023, the company announced that it was entering into a combination with Irwin Naturals but that was terminated in March 2023. In addition to that, the C-suite has been subject to numerous changes. KetaMD CEO Warren Gumpel stepped down but remained as a special advisor, while Dr. McIntyre assumed the role of KetaMD CEO. KetaMD will still be taking treatment requests but will not be conducting any new patient treatments. The company initially bought KetaMD in a deal valued at over $6 million.

Dr. Josh Rosenblat has stepped down from his role as Chief Medical Officer and remains a Psychiatrist on staff at the company’s Clinics. In November 2023 Stephen Brooks stepped down as CFO and Olga Cwiek resigned from the board. Both positions are being filled by Peter Rizakos, the company’s general counsel.

Braxia also got a notice of default on January 24, 2024, from its Toronto office landlord claiming arrears of rent for $149,440.75. The company was required to remedy the default by January 30, 2024, which it did not, and the lease was terminated. Braxia said the Toronto lease was not an operational clinic at the time of termination.

Even though the company is struggling, it said it continues to experience strong demand at its clinics. Treatment volumes across the company’s clinics increasedapproximately 3.2% to 2,726 treatments from 2,642 treatments over the nine month periods ending December 31, 2023 and December 31, 2022, respectively.

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