Rennova Health saw revenue drop last year and is struggling to stay afloat, according to an April 15 filing with the Securities and Exchange Commission.
The West Palm Beach, Fla.-based company reported revenue of $7.2 million in 2020, down from $16 million a year earlier. The company attributed the decline to several factors, including the COVID-19 pandemic.
"As a result of the COVID-19 pandemic, we believe demand for our services was reduced," Rennova said. "Also reducing revenue were staffing issues and supply shortages caused by cash constraints during the 2020 period, which required us to divert patients to third party facilities."
The company said its Tennessee hospitals have operated at a loss with a cash deficiency.
"Cash deficiencies mean that payroll has been late, making retention of key employees difficult," Rennova said. "Unless this situation is corrected we may lose employees to the point where it becomes difficult to operate, or we may fail to attract employees to key positions necessary for the business to succeed."
As of March 19, Rennova was three pay periods behind on payroll at its hospital in Oneida, Tenn., according to The Independent Herald.
Rennova said lower revenue at Jamestown (Tenn.) Regional Medical Center also contributed to the company's drop in revenue last year. The hospital suspended operations in June 2019, and Rennova said it plans to reopen the facility once it secures the capital to do so.
Revenue from Rennova's Jellico (Tenn.) Community Hospital also declined last year, and the company closed the hospital in March. Rennova closed the 54-bed hospital after the city of Jellico issued a 30-day termination notice for the lease of the building, according to the SEC filing.
The company said the losses have led to situations where it needed more capital, often at short notice, for it to remain in business.
"The company relies on its CEO to secure funding to meet cash shortfalls," Rennova said. "If capital is not secured, it will be difficult for the company to remain in operation."
Rennova is also carrying a large debt load. As of Dec. 31, the company had total debt outstanding of approximately $19.6 million, and, as a result of non-payment of past-due amounts, the company recorded penalties and penalty interest of $14.8 million, according to the SEC filing.
"Our indebtedness could, among other things, make it more difficult for us to satisfy our debt and other obligations, require us to use a large portion of our cash flow from operations to repay and service our debt or otherwise create liquidity problems, limit our flexibility to adjust to market conditions and place us at a competitive disadvantage," Rennova said.