Medinex Systems Inc., an Internet company that recently moved to Coeur dAlene from Post Falls, has announced a second-quarter net loss of $1.4 million, or 12 cents a share, an improvement over the $7.2 million loss it posted in the year-earlier quarter.
In its latest earnings statement, however, Medinex says that it has racked up an accumulated deficit of $44.5 million, has a working-capital deficit of $1.2 million, and has negative cash flow from operations.
These factors raise substantial doubt about the companys ability to continue as a going concern, Medinex says in the statement, echoing comments made by independent auditors in the companys annual report last spring.
The earnings statement also says that Medinexs board has decided to sell Pinnacle Medsource Inc., an Alpharetta, Ga.-based medical-products distributor that Medinex acquired 15 months ago. Medinex hadnt found a buyer for the unit by the time the earnings statement, which covers the quarter that ended June 30, was filed earlier this month.
Medinex executives couldnt be reached for comment although several messages were left at the companys new headquarters, at 1200 W. Ironwood Dr., in Coeur dAlene.
The company was founded in 1997 as Netivation.com Inc., and went public two years ago in a $21 million initial public offering of shares. It renamed itself Medinex Systems last year when it announced that it would sell off one of its two principal lines of business, a politically oriented Web site, and concentrate on its medical-industry business. Medinex offers Internet services and software to that industry. Its products include Medinex Office, a Web-based medical practice management system, and MedMarket.com, an e-commerce site.
Like many Internet companies, however, Medinex has been hit hard by a downturn in the dot-com industry, and its losses have mounted. Last year, for example, the company posted a net loss of $30 million.
Medinex says it has reduced expenses in an effort to reverse that trend, including cutting its work force to just 18 peoplewhich includes employees of the Georgia company its sellingdown from 180 people early last year.
In its second-quarter earnings statement, Medinex says it doesnt have enough cash to fund operations and growth through the year, and will need to find additional sources of capital to continue operating. The company had just $115,000 in cash and cash equivalents at the end of the second quarter, the statement says.
The earnings report also says that David Paquin, brother of Medinexs CEO, Tony Paquin, has been named chief financial officer by the board. David Paquin previously was Medinexs vice president of human resources.
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