WEST PALM BEACH, FL, May 24, 2022 (GLOBE NEWSWIRE) — QHSLab, Inc. (USAQ), a company focused on providing clinicians with tools to leverage proactive, value-based healthcare solutions through emerging digital health and point-of-care technologies, has issued the following letter to its shareholders from Troy Grogan, its CEO, taking into account current market conditions and the company’s recent quarterly performance.
Dear valued shareholders and friends of QHSLab, Inc.
Recent headlines have undoubtedly worried investors across all sectors. However, at QHSLab, Inc., we are confident in our ability to weather market volatility with our strong fundamental focus on point-of-care and digital healthcare. Since our inception, we have focused on achieving positive earnings and cash flow and we have steadily progressed towards these goals. Despite these difficult times, we have generated growing revenues over the past six quarters and are seeing continued progress, while keeping our expenses low.
Highlights from our Q122 quarterly report include:
- Revenue increased 17% to $355,330 from Q1 2021 and increased 7% sequentially from Q421.
- Gross profit increased 41% to $188,688 from Q121 due to AllergiEnd acquisition® assets and a decrease in the cost of goods due to the acquisition.
- Net operating loss (NOL) of $61,127 in Q122 decreased by 20% compared to Q121 due to higher gross profit margin and revenue.
If you have looked at our Q122 financial statements and noticed the “other expenses” related to interest charges, I would like to explain this entry. The increase of $116,728 from Q121 reflects non-cash amortization costs of $83,041 related to warrants issued in 2021. Let me repeat this, this is a non-cash expense. We did not pay the $83,041 in cash during Q122; this was the accounting under US GAAP of the expense associated with the warrants issued in Q321 in connection with a major financing for the Company. These warrants have been registered with the SEC and, if exercised by the investor, at the exercise price of $1.25 per share, would result in a capital contribution of $1,162,500 to the Company. with little dilutive effect on our recent stock price. These warrants are described in Note 6 to our financial statements.
Items affecting T122 growth:
Recent industry-wide shipping delays have unfortunately impacted our ability to expand our physician base due to limited available inventory. As supplies have been delayed, we have chosen to prioritize the needs of our existing physician accounts in order to maintain profitable relationships. Our supplier has reported that shipping delays and transportation costs have decreased over the past few months and we expect to see shipments resume in a timely manner. Therefore, we do not anticipate any further stockouts for 2022 and are resuming our aggressive solicitation of new accounts.
Like many leading technology companies, we employ a handful of excellent software developers from Ukraine and Russia. They have worked with us for two years under the direction of our US-based team. Russia’s invasion of Ukraine in February interrupted the work of these individuals on the expansion of our systems. I can happily report that we have been in daily contact with these wonderful people and they have all moved safely to various countries out of danger. While the war pushed back some of our production deadlines, these dedicated professionals kept working and are now back full time. We are very grateful for their efforts and professionalism during this crisis. Rest assured that our US software engineers are highly skilled and knowledgeable software development professionals, and there was no impact to our live production systems.
The summer months have generally been slower for most physician practices due to staff and patient vacations. We anticipate that our physician customers will take advantage of the revenue generation opportunity presented by our innovative QHSLab clinical decision support and patient tracking system to sustain revenue for their practices during the otherwise slow summer months.
Physicians are not immune to current economic conditions. Supply chain, labor shortages and logistics are also strongly affecting the market for allergy specialists, giving us the opportunity to disrupt the traditional supply chains used by these allergy and ENT specialists. for essential allergy testing equipment. We are in preliminary discussions with our contract manufacturer regarding the licensing or acquisition of the necessary technologies and intellectual properties to enable us to enter this market, allowing us to offer significant cost advantages to these allergy physicians. .
Although we focus on the large primary care market, which accounts for 52% of all healthcare utilization in the United States each year, we believe that the niche market for allergy skin testing equipment s amounts to about $40 million per year in the United States alone. I think we could take a good chunk of that annual revenue by targeting allergy specialists with a newer and improved skin testing device, the first such innovation in the industry in about three decades.
We are also delighted to announce that we started charging for subscriptions for QHSLab in May. Additionally, we validated current Medicare reimbursement for our non-face-to-face digital medical assessments at approximately $100 per encounter. We also announced the planned launch of our new product, the Rapid Allergy Test, under the brand AllergiQT™who addresses a projected $90 million annual market. The Rapid Allergy Test enables the primary care physician’s office to administer a simple allergy skin test without pain, involving only the forearms, without needles, and with results in 15 minutes or less, reducing the cost of healthcare while providing a reimbursable source of revenue for the physician’s office. This product could prove to be a game changer in primary care allergy management.
In addition, we have had discussions with our lender about extending the maturity of our debt which is due to mature in August and we are confident that we will reach an accommodation. We are also preparing for an additional capital raise to strengthen our cash and inventory balances. Both of these steps should support long-term growth in our share price.
I won’t make any forward earnings projections here; recent and current market conditions and our lack of operating history create too much uncertainty regarding customer buying patterns in the near term. Likewise, our ability to achieve the milestones mentioned in this letter is subject to various risks and uncertainties. However, our expenses are low compared to our peers and we continue to seek alternatives, if any, to reduce costs while simultaneously exploring growth opportunities. I think this is evident from our Q122 earnings report and FY2021 financial statements.
I believe QHSLab, Inc. (USAQ, The current market capitalization of Financial) does not reflect the true value, prospects or market opportunities of the Company. I am in the same situation as you as a shareholder, and I remain dedicated to the mission and my belief in doing the job for the long term. I am confident in our ability to move forward and thrive as we create the tools needed to shape the future of medicine.
To view our most recent investor presentation, click here and for complete information regarding our Q122 financial results, please refer to our quarterly filing here.
While there is no guarantee of future success or that any of the developments described in this letter will be achieved, I remain confident.
President and CEO
For more information, please visit www.usaqcorp.com.
QHSLab, Inc. (USAQ) is a medical device company that provides digital healthcare solutions and point-of-care diagnostic testing to primary care physicians. Digital healthcare allows physicians to quickly and efficiently assess their patients’ responses using advanced artificial intelligence algorithms. Digital healthcare can also remotely monitor patient vital signs and assess the effects of prescribed drugs and treatments on patient health through real-time data transferred from patient to physician. QHSLab, Inc. also markets and sells point-of-care rapid response diagnostic tests used in primary care practice. QHSLab, Inc.’s products and services are designed to help physicians improve patient follow-up and medical care while improving their practice revenue.
Certain matters discussed in this press release are “forward-looking statements” intended to benefit from the safe harbor of liability established by the Private Securities Litigation Reform Act of 1995. market, future revenues, products, and potential future results and acquisitions are examples of such forward-looking statements. Forward-looking statements are generally identified by words such as “may”, “could”, “believe”, “estimate”, “target”, “expect” or “intend” and other words similar that express risks and uncertainties. These statements are subject to numerous risks and uncertainties, including, but not limited to, the timing of new product introductions, the inherent discrepancy between actual results and estimates, projections and forecasts made by management. , regulatory delays, changes in public funding and budgets, and other factors, including general economic conditions, beyond the Company’s control. The factors discussed herein and expressed from time to time in the Company’s filings with the Securities and Exchange Commission could cause actual results and developments to differ materially from those expressed or implied by such statements. Forward-looking statements speak only as of the date of this press release. The Company undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.
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