OREM, Utah, Feb. 24, 2014 (GLOBE NEWSWIRE) -- ActiveCare, Inc. (OTCQB:ACAR), a leader in diabetes management and wellness services for self-insured employers nationwide, today reported financial results for the first quarter of fiscal year 2014 ended December 31, 2013.
Total revenues for the quarter were $2.4 million, a slight increase compared to the first quarter of fiscal 2013. Gross profit for the quarter was $0.9 million, an increase of 392% compared with gross profit of $0.2 million for the prior-year quarter. Total operating expenses, including stock-based compensation expense, were $2.8 million, virtually unchanged compared with the fiscal 2013 period.
The net loss from continuing operations for the first quarter of fiscal year 2014 was $2.8 million, compared with a net loss of $3.6 million for same period of 2013. The net loss attributable to common stockholders for the quarter was $5.1 million, or $0.20 per share, compared with a net loss of $3.6 million, or $0.78 per share, for the prior-year quarter. This net loss attributable to common stockholders in the quarter included a non-cash deemed dividend of $2.2 million for the conversion of preferred stock to common stock.
During the quarter, the Company strengthened its balance sheet by completing the sale of $3.2 million, net of $0.5 million of related costs, of Series F preferred stock and converting to equity $3.0 million of debt and accrued interest. As of December 31, 2013 the Company had positive working capital of $1.3 million compared to a working capital deficit of $3.3 million at the end of the previous quarter. As of December 31, 2013 the Company had stockholders' equity of $3.8 million compared to stockholders' deficit of $0.8 million as of September 30, 2013.
Commenting on the quarter, David Derrick, Chairman and CEO of ActiveCare, said, "We have strengthened our balance sheet by raising $3.2 million and by converting $3.0 million of debt and accrued interest to equity. By these actions, we have put ActiveCare in position to be able to service contracts with much larger benefits providers and third party administrators. We continue to penetrate these key markets as has been demonstrated by our recent agreements with International Benefits Administrators in New York and RxBenefits in Alabama. Each of these new customers offers the potential to add several thousand new members to the ActiveCare disease management program in 2014."
About ActiveCare
ActiveCare, Inc. provides patented diabetes and chronic disease management and wellness solutions that increase visibility, lower costs and provide real-time care for members resulting in improved outcomes. Utilizing state-of-the-art meters with embedded cellular technology, trained CareSpecialists can intervene in real-time and provide members with the support needed to control their disease 24 hours a day, every day. ActiveCare's solution is revolutionizing the way employers, individuals and their health plans monitor chronic disease. To learn more about ActiveCare please visit www.activecare.com.
Safe Harbor
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Our actual results could differ materially from those projected in these forward-looking statements, which involve a number of risks and uncertainties, including global economic conditions generally, regulatory uncertainty and economic pressure on the healthcare industry in particular, the governmental regulation of our products, manufacturing and marketing risks, adverse publicity risks, and risks associated with assimilating our recent acquisitions. The contents of this release should be considered in conjunction with the risk factors, warnings, and cautionary statements that are contained in our most recent filings with the Securities and Exchange Commission.
| ActiveCare, Inc. | ||
| Condensed Consolidated Statements of Operations (Unaudited) | ||
| Three Months Ended | ||
| December 31, | ||
| 2013 | 2012 | |
| Revenues: | ||
| Chronic illness monitoring | $ 2,079,467 | $ 1,953,605 |
| CareServices | 348,791 | 419,688 |
| Total revenues | 2,428,258 | 2,373,293 |
| Cost of revenues: | ||
| Chronic illness monitoring | 1,191,815 | 1,461,786 |
| CareServices | 302,224 | 721,527 |
| Total cost of revenues | 1,494,039 | 2,183,313 |
| Gross profit | 934,219 | 189,980 |
| Operating expenses: | ||
| Selling, general and administrative (including $572,194 and $997,128, respectively, of stock-based compensation) | 2,709,700 | 2,676,644 |
| Research and development | 75,291 | 97,381 |
| Total operating expenses | 2,784,991 | 2,774,025 |
| Loss from operations | (1,850,772) | (2,584,045) |
| Other income (expense): | ||
| Gain on derivatives liability | 479,737 | 38,337 |
| Loss on induced conversion of debt | (114,098) | -- |
| Interest expense, net | (1,269,076) | (1,023,593) |
| Other income | 2,368 | 2,326 |
| Total other income (expense) | (901,069) | (982,930) |
| Net loss from continuing operations | (2,751,841) | (3,566,975) |
| Loss from discontinued operations | -- | (13,742) |
| Net loss | (2,751,841) | (3,580,717) |
| Deemed dividend on conversion of preferred stock to common stock | (2,234,924) | -- |
| Dividends on preferred stock | (153,013) | (59,544) |
| Net loss attributable to common stockholders | $ (5,139,778) | $ (3,640,261) |
| Net loss per common share - basic and diluted | ||
| Continuing operations | $ (0.20) | $ (0.78) |
| Discontinued operations | -- | (0.00) |
| Net loss per common share | $ (0.20) | $ (0.78) |
| Weighted average common shares outstanding – basic and diluted | 25,302,000 | 4,647,000 |
| ActiveCare, Inc. | ||
| Condensed Consolidated Balance Sheets (Unaudited) | ||
| December 31, | September 30, | |
| 2013 | 2013 | |
| Assets | ||
| Current assets: | ||
| Cash | $ 354,065 | $ 223,835 |
| Accounts receivable, net | 7,033,600 | 7,345,912 |
| Inventory | 1,336,164 | 1,249,220 |
| Prepaid expenses and other | 54,338 | 38,998 |
| Total current assets | 8,778,167 | 8,857,965 |
| Customer contracts, net of accumulated amortization of $1,143,619 and $935,361, respectively | 1,226,263 | 1,434,521 |
| Goodwill | 825,894 | 825,894 |
| Patents, net of accumulated amortization of $387,176 and $355,458, respectively | 535,202 | 566,920 |
| Property and equipment, net | 567,823 | 570,360 |
| Deposits and other assets | 53,479 | 106,950 |
| Domain name, net of accumulated amortization of $3,039 and $2,860, respectively | 11,261 | 11,440 |
| Total assets | $ 11,998,089 | $ 12,374,050 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Accounts payable | $ 4,885,659 | $ 6,621,234 |
| Accounts payable, related-party | 72,173 | 251,386 |
| Accrued expenses | 1,406,176 | 1,267,201 |
| Derivatives liability | -- | 795,151 |
| Current portion of notes payable | 1,028,166 | 1,278,585 |
| Notes payable, related-party | 85,365 | 1,892,415 |
| Dividends payable | 14,311 | 3,471 |
| Total current liabilities | 7,491,850 | 12,109,443 |
| Notes payable, net of current portion | 741,808 | 1,055,918 |
| Total liabilities | 8,233,658 | 13,165,361 |
| Stockholders' equity (deficit): | ||
| Preferred stock, $.00001 par value: 10,000,000 shares authorized; 0 and 480,000 shares of Series C; 45,000 and 938,218 shares of Series D; 70,070 and 61,723 shares of Series E; and 4,353 and 0 shares of Series F, respectively | 1 | 15 |
| Common stock, $.00001 par value: 50,000,000 shares authorized; 32,944,215 and 21,775,303 shares outstanding, respectively | 330 | 220 |
| Additional paid-in capital, common and preferred | 69,992,052 | 62,519,542 |
| Accumulated deficit | (66,227,952) | (63,311,088) |
| Total stockholders' equity (deficit) | 3,764,431 | (791,311) |
| Total liabilities and stockholders' equity | $ 11,998,089 | $ 12,374,050 |