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 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, 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 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, 2022. 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, revenues and 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.
Results of Operations
We had discontinued operations in May 2019. The Company is assessing potential
mergers, acquisitions and strategic collaborations.
Three months ended October 31, 2022 Compared to Three months Ended October 31,
2021
General and administrative costs and expenses. General and administrative
("G&A") costs and expenses were $65,000 for the three months ended October 31,
2022 as compared to $57,000 for the three months ended October 31, 2021. The
$8,000 increase was primarily due to professional fees.
Total operating costs and expenses. Total operating costs and expenses were
$65,000 for the three months ended October 31, 2022 as compared to $57,000 for
the three months ended October 31, 2021. The $8,000 increase is explained above
in G&A.
Interest expense. Net interest expense was $6,000 for the three months ended
October 31, 2022 as compared to $1,000 for the three months ended October 31,
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 $71,000 for the three months ended October 31, 2022 as
compared to $58,000 for the three months ended October 31, 2021. This $13,000
increase is primarily attributable to professional fees and interest expense as
noted above.
12
Liquidity and Capital Resources
The Company's operations have been primarily financed through private sales of
its equity securities and advances under promissory notes.
At October 31, 2022, we had approximately $89,000 of cash and negative working
capital of approximately $484,000. We believe that the cash on hand at October
31, 2022 is not sufficient to meet our anticipated cash requirements for the
next 12 months. We are currently exploring promissory notes for additional
capital.
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 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 $76,000 and $118,000 for three months
ended October 31, 2022 and 2021, respectively. This $42,000 decrease in cash
used was primarily due to the change in operating assets and liabilities.
Net cash provided by financing activities was $150,000 for both three months
ended October 31, 2022 and 2021, respectively, as a result of proceeds from
Promissory Notes described in Note 7 to the accompanying unaudited condensed
consolidated financial statements.
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