Good Clinic, launched in Minneapolis last year by the founder of the MinuteClinic chain, is now struggling to survive.
Its parent company, called Mitesco, is trying to raise capital after borrowing nearly $7 million from company executives and others to stay afloat this year, according to a filing with the U.S. Securities and Exchange Commission.
"There is substantial doubt about the ability of the company to continue as a going concern for one year," Mitesco said in the filing. "The company's continuance is dependent on raising capital and generating revenues sufficient to sustain operations."
Mitesco reported cash of $6,000 on Sept. 30, current liabilities of $14.4 million and a net loss of $11.7 million so far in 2022, according to the SEC filing.
An unspecified number of employees have been furloughed, following missed paychecks in November. Four of its six clinics have closed.
Mitesco CEO Larry Diamond declined comment this week.
Good Clinic is precluded from commenting publicly while trying to raise capital and also gain a listing on the Nasdaq stock exchange, an attorney for the company said.
Mitesco's stock price has fallen from 42 cents per share to 6 cents, giving it a market value of about $14 million. It trades over-the-counter; a so-called "pink sheets" company.
One employee who asked not to be identified said the company indicated it found stop-gap capital to make good on November wages, but that couldn't be confirmed.
Another employee who has been furloughed said, "I'm hoping to learn more about the viability of the company. Good Clinic offers a better patient experience and a better experience for our providers. The patients seemed happy with their care."
In a bid to retain employees, Good Clinic management offered an extra week of time off in 2023 for staying with the company through December.
Good Clinic had a promising start last year, with designs on a 50-clinic company focused on primary care delivered by nurse practitioners.
Michael Howe, a former CEO of MinuteClinic, a pioneer of the walk-in medical clinic model that was sold to CVS in 2006 for $170 million, decided last year to return for a second entrepreneurial try.
He and several other veterans of MinuteClinic opened the first Good Clinic in a residential-commercial complex called NordHaus in northeast Minneapolis.
Mitesco disclosed in 2021 that it would spend about $900,000 to build and market the NordHaus clinic and would need $50 million for the next 50 clinics.
Howe said last year that Good Clinic distinguishes itself by providing a "medical home" and more time with patients.
"We want the accountability of health care to be" in the hands of patients, Howe said then. "But they need coaches, education and empathy."
Amid a primary-care doctor shortage, care increasingly is being delivered by physician assistants and nurses, often outside doctor offices. There's plenty of competition.
CVS acquired Target's pharmacy business in 2015 for $1.9 billion and added MinuteClinics in many stores. Walmart, Walgreens and others are in the walk-in primary-care business.
Diamond said last year that Good Clinic's focus was on the 70% of Americans who account for 25% of the U.S. health care spending, as opposed to the 5% who account for 50%.
Now, it's unclear if Good Clinic will last long enough to prove its model.