Cautionary Statement Regarding Forward-looking Statements.
This Interim Report on Form 10-Q contains, in addition to historical
information, certain forward-looking statements regarding Non-Invasive
Monitoring Systems, Inc. (the "Company" or "NIMS," also referred to as "us",
"we" or "our"). These forward-looking statements represent our expectations or
beliefs concerning the Company's operations, performance, financial condition,
business strategies, and other information and that involve substantial risks
and uncertainties. For this purpose, any statements contained in this Report
that are not statements of historical fact may be deemed to be forward-looking
statements. Without limiting the generality of the foregoing, words such as
"may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate,"
or "continue" or the negative or other variations thereof or comparable
terminology are intended to identify forward-looking statements. The Company's
actual results of operations, some of which are beyond the Company's control,
could differ materially from the activities and results implied by the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to the Company's: history of operating
losses and accumulated deficit; need for additional financing; dependence on
management; risks related to proprietary rights; other factors described herein
as well as the factors contained in "Item 1A - Risk Factors" of our Annual
Report on Form 10-K for the year ended July 31, 2021. We do not undertake any
obligation to update forward-looking statements, except as required by
applicable law. These forward-looking statements are only predictions and
reflect our views as of the date they are made with respect to future events and
financial performance.
Overview
We previously were engaged in the development, manufacture and marketing of
non-invasive, whole body periodic acceleration ("WBPA") therapeutic platforms,
which are motorized platforms that move a subject repetitively head to foot. The
Company discontinued operations in May 2019, accordingly, certain liabilities
are classified as discontinued operations.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations
are based upon our condensed consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these condensed consolidated financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, expenses, and related disclosure of contingent
assets and liabilities. On an on-going basis, we evaluate our estimates,
including those related to income taxes. We base our estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. A more detailed discussion on the
application of these and other accounting policies can be found in Note 2 in the
Notes to the Consolidated Financial Statements set forth in Item 8 of this
Annual Report on Form 10-K. While we believe that the factors we evaluate
provide us with a meaningful basis for establishing and applying sound
accounting policies, we cannot guarantee that the results will always be
accurate. Since the determination of these estimates requires the exercise of
judgment, actual results could differ from such estimates.
14
Results of Operations
We have discontinued operations in May 2019. The Company is assessing potential
mergers, acquisitions and strategic collaborations.
Three and Nine months ended April 30, 2022 Compared to Three and Nine months
Ended April 30, 2021
General and administrative costs and expenses from continuing operations.
General and administrative ("G&A") costs and expenses from continuing operations
were $31,000 and $124,000 for the three and nine months ended April 30, 2022,
respectively, as compared to $29,000 and $127,000 for the three and nine months
ended April 30, 2021, respectively. The $2,000 increase and $3,000 decrease for
the three and nine months was primarily due to professional services.
Total operating costs and expenses from continuing operations. Total operating
costs and expenses were $31,000 and $124,000 for the three and nine months ended
April 30, 2022, respectively, as compared to $29,000 and $127,000 for the three
and nine months ended April 30, 2021, respectively. The $2,000 increase and
$3,000 decrease for the three and nine months are explained above in G&A.
Interest expense. Net interest expense was $4,000 and $10,000 for the three and
nine months ended April 30, 2022, respectively, as compared to $0 for the three
and nine months ended April 30, 2021. The interest expense is related to the
Promissory Notes described in Note 7 to the accompanying unaudited condensed
consolidated financial statements.
Net loss. Net loss was $35,000 and $134,000 for the three and nine months ended
April 30, 2022, respectively, as compared to $29,000 and $127,000 for the three
and nine months ended April 30, 2021, respectively. The $6,000 and $7,000
increase for the three and nine months ended April 30, 2022, respectively, was
primarily due to interest expense on related party notes payable (see Note 7)
and professional fees.
Liquidity and Capital Resources
The Company's operations have been primarily financed through private sales of
its equity securities and advances under Credit Facility and Promissory Notes.
At April 30, 2022, we had approximately $53,000 of cash and working capital
deficit of approximately $214,000. We believe that the cash on hand at April 30,
2022 is not sufficient to meet our anticipated cash requirements for the next 12
months.
We expect to incur losses for the foreseeable future. It is likely that we will
be required to obtain additional external financing through public or private
equity offerings, debt financings from shareholders or collaborative agreements.
No assurance can be given that such additional financing will be available on
acceptable terms or at all.
Current economic conditions have been, and continue to be, volatile and
continued instability in these market conditions may limit our ability to access
the capital in a timely manner. Additionally, the sales of equity or convertible
debt securities may result in dilution to our stockholders.
Net cash used in operating activities was $152,000 and $142,000 for nine months
ended April 30, 2022 and 2021, respectively. This $10,000 increase was primarily
due to increased prepaid expenses and accrued interest and a reduction of
accrued expenses and accounts payable during the nine months ended April 30,
2022 as compared to the nine months ended April 30, 2021.
Net cash provided by financing activities was $150,000 and $0 for nine months
ended April, 2022 and 2021, respectively. This $150,000 increase was primarily
due to the proceeds from Promissory Notes described in Note 7 to the
accompanying unaudited condensed consolidated financial statements.
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