Reliq Health Technologies, Inc. Files FY 2022 Annual Audited Financial Statements, Announces 485% Year-over-Year Increase in Revenues
Reliq Health Technologies Inc. (TSXV:RHT or OTCQB:RQHTF) (“Reliq” or the “Company”), a rapidly growing global healthcare technology company that specializes in developing innovative Virtual Care solutions for the multi-billion dollar Healthcare market, today announced that the annual audited consolidated financial statements (“Financial Statements”) and Management’s Discussion and Analysis (“MD&A”) for the fiscal year ended June 30, 2022, are now available on the Company’s profile on SEDAR (www.sedar.com).
“We have now filed our annual audited financials for Fiscal Year 2022,” said Dr. Lisa Crossley, CEO of Reliq Health Technologies, Inc. “FY 2022 was a period of tremendous growth for the Company. Revenues for the fiscal year increased by 485% to $8,551,807 for FY 2022 as compared to $1,462,165 for FY 2021. Despite the significant resurgence of COVID-19 (Omicron variant) in late 2021 / early 2022, revenue from software and services sales increased by over 1,940% to $2,739,516 for FY 2022 compared to $134,264 for FY 2021, consistent with the Company’s prior statements that for 2023 and beyond the majority of the Company’s revenue would be generated by software and services sales vs device sales. We expect growth to accelerate through the end of calendar year 2022 and through 2023. We remain on track to onboard over 100,000 patients to the platform by the end of December 2022 and over 200,000 by mid-calendar year 2023.”
“Subsequent to June 30, 2022 the Company received $341,805 in proceeds from the exercise of 1,139,350 share purchase warrants @ $0.30. The remaining 3,738,332 outstanding warrants @ $0.30 have expiry dates between November 13, 2022 and December 3, 2022. Exercise of these warrants would generate up to an additional $1,121,499.60 in proceeds for the Company.”
“To date as a Company we have been focused primarily on cementing our first mover advantage and establishing ourselves as the market leader by acquiring as many clients and patients as possible in the shortest possible time period,” continued Dr. Crossley. “Going forward we will be shifting resources to the account management side to help accelerate onboarding, reduce the time it takes for patients to go from initial onboarding to fully adherent and billable, and accelerate collections. The Company expects to be generating significant free cash in 2023 and intends to initiate a share buyback program at that time to offset any dilution incurred over the past several years.”
The Company is also pleased to provide the following corporate update.
Highlights from FY 2022 Annual Audited Financial Statements
During the twelve month period ending June 30, 2022 and subsequent, the Company:
Increased sales 485% to $8,551,807 for FY 2022 relative to $1,462,165 for FY 2021.
Increased revenue from software and services by over 1,940% to $2,739,516 for FY 2022 (FY 2021 – $134,264). Going forward the Company expects the majority of its revenue in 2023 and beyond to come from higher margin software and services vs device sales.
Increased gross profits over 515% to $5,301,304 for FY 2022 (FY 2021 – $857,954). Gross Margin for the year was 62%. The gross margin was affected by a temporary increase in device costs in Q3 and Q4 FY 2022 which has subsequently been resolved as the Company identified new device suppliers. Gross margins are expected to reach the target 75% in 2023 due to reduced device costs and an increase in the percentage of the Company’s total revenues from higher margin software and services vs device sales.
On January 1, 2022 CMS introduced five new billing codes for Remote Therapeutic Monitoring (RTM), allowing clinicians to provide ongoing in-home treatment and monitoring for patients with musculoskeletal and respiratory conditions. RTM involves having patients use medical devices that collect non-physiological data such as therapy/medication adherence and therapy/medication response, and also allows for patient self-reporting of key metrics such as pain level, mobility, nighttime waking due to breathing difficulties, etc. The new RTM codes have increased Reliq’s target patient population by over 20 million newly eligible patients to over 57 Million total eligible patients in the US alone.
Signed an agreement with Data Soft Logic (DSL) to provide iUGO Care to DSL’s existing and new clients. Data Soft Logic currently has over 600 home health and hospice care agency clients who work with more than 1,000 primary care physicians to provide care to over 500,000 Medicare and Medicaid patients. Reliq started onboarding DSL’s patients in Q2 Calendar Year 2022 and expects to ramp up to adding over 50,000 new patients per year each year beginning in 2023, at an estimated revenue of $60 per patient per month.
Signed an agreement with Cognizant to leverage Cognizant’s Care Management resources for future deployments of Reliq’s iUGO Care software to large scale clients. Cognizant provides services to 300+ health systems and over 347,000 care providers who together provide care to over 200 million lives globally. The agreement with Cognizant will allow Reliq to scale to new levels and provide even the largest healthcare organizations with confidence that the Company can meet the needs of their patient populations, no matter the size, allowing Reliq to access new opportunities to provide virtual care to much larger patient populations both within the US and globally.
Signed a contract with a large physician practice network in Florida to onboard over 50,000 patients to its iUGO Care platform by the end of 2023.
Signed a contract with a network of 40 Skilled Nursing Facilities (SNFs) in Florida which is expected to add over 48,000 patients to its iUGO Care platform every year beginning in 2023.
Signed contracts with 99 new US primary care physician practices and 28 other healthcare organizations in specialties including hospice care, nephrology, orthopedics, long term care, skilled nursing, hospital care, cardiology and care management.
Signed contracts with 25 new home health agencies in the US and 3 adult medical day care facilities.
Signed an agreement with a US Contract Research Organization to use Reliq’s iUGO Care software and Patient Engagement services to support their oncology and other clinical trials.
Notes on Accounts Receivable and Revenue from Financing
To date the majority of the Company’s revenues have been generated through the sale of devices. Subsequent to July 1, 2021 all device purchases are associated with a subscription for software and services, and therefore are a direct leading indicator of future software and services revenue. Clients are offered 12- or 24-month payment plans for hardware purchases. The Company charges a higher price for devices that are paid for through payment plans and therefore generates higher margin revenue for these devices. Because hardware revenue is collected on a monthly basis over a 12- or 24-month period per the purchase payment plan, the Company’s receivables will continue to increase as device sales increase. This is as expected and is not an indication that the receivables are at risk of not being collected. As the Company’s software and services revenue increases as a percentage of total sales, the outstanding receivables as a percentage of total sales will decrease.
Note that revenue from hardware sales (corresponding to the total purchase price of the devices) is recognized when the client takes possession of the hardware. Hardware revenue is then received monthly in accordance with the hardware purchase payment plan. Software and services revenue is recognized on a monthly basis for software and services delivered in the given month and is collected monthly in accordance with the Company’s standard Net 60 day payment terms.
The audit process for FY 2022 was substantively different from previous years. Since the Company’s revenue had grown significantly and new revenue lines and payment terms had been introduced, the process was much more complex and time-consuming than either the Company or its auditors had originally anticipated.
During the audit, various changes were made to the financial statements for FY 2022 to address the evolution of the business and to comply with IFRS standards, including:
A Long-Term Receivables category was added to account for Sales of devices and services with payment plans lasting more than 12 months.
A portion of revenue from any Sales involving payment plans lasting more than 12 months was recognized as Financing Income. As a result, ~$306,000 of Q4 Sales revenue was moved from Sales to Financing Income, with ~$76,000 recognized in FY2022 and ~$230,000 deferred, to be recognized in FY 2023 and FY 2024. This had a small negative impact on gross margin for Q4 FY 2022 but is not expected to impact gross margin in future years.
Impact of COVID-19 on Operations in Q3 and Q4 FY 2022
Revenue for the quarters ending March 31, 2022 and June 30, 2022 was temporarily impacted by the COVID-19 surge caused by the Omicron variant during the period from November 2021 through February 2022. During this period, many of the patients on the iUGO Care platform contracted COVID-19. Some of these patients became sufficiently ill that they required hospitalization or were temporarily prescribed in person home care visits. Under the terms of the Medicare and Medicaid virtual care programs leveraged by the Company’s clients, clinicians cannot bill for many of the proactive, preventative services delivered using the iUGO Care platform for any month in which a patient receives acute care in the form of hospitalization or prescribed in person home care visits. The Company was therefore not able to provide billable services to those specific patients during the month in which they received acute care due to COVID-19, and as a result was not able to bill the associated client for affected patients during the acute care period. In addition, many of the Company’s physician and home health agency clients and their clinical staff contracted COVID-19 during the Omicron wave, which in some cases resulted in longer training and patient engagement times for new patients. For these clients this increased the time from which their patients were onboarded to the point at which the Company was able to bill for its services to over 90 days. Despite the challenges associated with the Omicron variant surge and its impact on growth in Q3 and Q4 FY 2022, the Company’s software and services revenue for the year increased over 1940% relative to FY 2021.
While there is the potential for COVID-19 surges in the future, these waves will only have a short term impact on revenue. Overall the long term impact of the COVID-19 pandemic on the Company’s business is strongly positive, as it led to a significant increase in the scope and reimbursement levels of the virtual care programs funded by the Centers for Medicare & Medicaid Services, and drove a dramatic increase in acceptance and adoption of virtual care solutions in the Community Healthcare market. As a result, the market demand for the Company’s products and services has increased exponentially over the last twelve month.
Date for Webinar to Review Q1 FY 2023 Annual Audited Financials
The Company’s quarterly financial statements for Q1 FY 2023 (quarter ending September 30, 2022) are due to be filed on or before November 29, 2022. The webinar to review the financial statements will be scheduled on or before November 30, 2022.
About Reliq Health
Reliq Health Technologies is a rapidly growing global healthcare technology company that specializes in developing innovative Virtual Care solutions for the multi-billion dollar Healthcare market. Reliq’s powerful iUGO Care platform supports care coordination and community-based virtual healthcare. iUGO Care allows complex patients to receive high quality care at home, improving health outcomes, enhancing quality of life for patients and families and reducing the cost of care delivery. iUGO Care provides real-time access to remote patient monitoring data, allowing for timely interventions by the care team to prevent costly hospital readmissions and ER visits. Reliq Health Technologies trades on the TSX Venture under the symbol RHT, on the OTC as RQHTF and on the Frankfurt Stock Exchange under the WKN: A2AJTB.
ON BEHALF OF THE BOARD
“Dr. Lisa Crossley”
CEO and Director
For further information please contact:
Investor Relations at email@example.com
US Investor Relations Contact
Lytham Partners, LLC
New York | Phoenix
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Cautionary Statements Regarding Forward Looking Information
Certain statements in this press release constitute forward-looking statements, within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs of future performance, are “forward-looking statements”.
We caution you that such “forward-looking statements” involve known and unknown risks and uncertainties that could cause actual and future events to differ materially from those anticipated in such statements.
Forward-looking statements include, but are not limited to, statements with respect to commercial operations, including technology development, anticipated revenues, projected size of market, and other information that is based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.
Reliq Health Technologies Inc. (the “Company”) does not intend and does not assume any obligation, to update these forward-looking statements except as required by law. These forward-looking statements involve risks and uncertainties relating to, among other things, technology development and marketing activities, the Company’s historical experience with technology development, uninsured risks. Actual results may differ materially from those expressed or implied by such forward-looking statements.
SOURCE: Reliq Health Technologies Inc.