Parallax Health Sciences eliminates $25M contingent liability; focuses on operating growth

Parallax Health Sciences Inc (OTCMKTS:PRLX) announced Monday it has reached a settlement that releases the company of all potential liabilities and litigation with the previous owner of RoxSan Pharmacy Inc.   Under the settlement terms, a contingent liability in the principal and interest of about $25 million has been canceled, the company said in a statement.  Parallax said the terms include a payment of $4 million to be paid over the next two years and delivery of 10 million shares of restricted stock of the company to the owner of RoxSan.  READ: Parallax Health Sciences' Good Health Outcomes platform to be deployed in US healthcare industry Looking ahead, CEO Paul Arena said the company is now free to focus on operating growth.  “Since my first day with the company, this has been our priority and I am pleased to be able to tell shareholders that with this matter behind us, we can now turn all of our energies into making Parallax the healthcare services powerhouse we have envisioned,” Arena said. “Although we believe our case was strong, our board of directors determined that it was in the best interests of our shareholders to agree to a substantial discount of our potential liability in exchange for the ability to put this matter behind us in a definitive way that will not continue to prolong the existence of this burden and costs overhanging the company." Arena added: “Now having achieved this important milestone, for the first time in more than four years since this litigation has been present we are now in a position for our shareholders and potential investors to begin to credit the company with the proper potential enterprise value and intellectual property value the company deserves without having to massively discount those values because of this litigation matter. The near- to intermediate-term goals of the company can now be accomplished in a manner that will be more accretive to our shareholders, on a less dilutive basis.” In other company news, Parallax also issued a mid-quarter update and listed its goals for the next 12 months, which include: Profitability; Increase patient adoption of patented Good Health Outcomes platform; Up-list to Nasdaq; Monetize company intellectual properties; and Enhance sales pipeline ($10 million) Parallax has developed and continues to improve its technological advantages in service delivery for remote patient monitoring that is deployed through its Good Health Outcomes software-as-a-service (“SaaS”) licensing platform through channel partners and direct sales.  The company’s patented mobile remote patient monitoring technology has been built to the Health Insurance Portability and Accountability Act standards to be compliant for security and designed to enable healthcare practitioners to connect with and intervene to improve outcomes for their patients. In addition to direct sales, the company said it has a channel distribution strategy that will allow it to address the market opportunities within chronic disease management. It is expected that the new SaaS software license model will launch during the second quarter of the current fiscal year (FY2020). According to Knowledge Sourcing Intelligence LLP, the global remote patient monitoring market is expected to reach US$31 billion by the end of 2023, increasing from US$15.8 billion in 2017, growing at a CAGR of 12% during the forecast period. 15 patents issued or licensed so far  The company also said it has been issued or has exclusively licensed 15 patents and has been notified that two additional patents will be allowed pending formal issuance by the US Patent & Trademark Office and additional patent applications are pending or in process for filing.  The patents contain a broad range of claims covering the company's proprietary technologies and products. Parallax said it also owns 10 trademarks, two of which are registered, protecting the names of its products and identity in the marketplace. Parallax, based in Santa Monica, California, reiterated its plans to assert its intellectual property rights, a process which could include litigation, in the face of what it says is more than $500 million in potential infringement damages.  Contact the author: patrick@proactiveinvestors.com Follow him on Twitter @PatrickMGraham