Telehealth Co. Expects More Growth in 2023

After a big revenue increase that boosted its stock last fall, officials at telemedicine company Reliq Health Technologies Inc. (RHT:TSX.V; RQHTF:OTCQB; A2AJTB:WKN) said they expect to accelerate growth “significantly” in 2023.

Reliq’s cash intake went up 485% to CA$8.6 million from fiscal year 2021 to fiscal year 2022, and gross profits increased YOY by more than 515%.

Technical analyst Clive Maund of CliveMaund.com recommended the stock shortly after it jumped from CA$0.52 to CA$0.62 when the revenue news broke.

“We, therefore, stay long,” Maund wrote in Streetwise Reports on Nov. 30.

The global telehealth market is anticipated to reach US$380 billion by 2023, according to Research and Markets.

“The COVID-19 pandemic had an overall positive impact on the market,” Research and Markets said. “It led to increased awareness about telemedicine solutions, propelled the adoption rates among patients and providers, and increased the investment activities in the market. Supportive regulatory initiatives to promote the use of telemedicine further contributed to the market growth.”

The Catalysts: Telehealth Boom Creates More Contracts

So far in January, Reliq has announced contracts adding more than 25,000 patients to iUGO at an average revenue of CA$65 per patient per month at a 75% gross margin. The contracts are with a large healthcare network in Florida and physician clinics and practices in Texas, California, and Nevada. Onboarding in Florida is expected to begin this month.

Revenue for Reliq’s software and service sales increased more than 1,940% to CA$2.7 million for the fiscal year 2022, which ended June 30, compared to more than CA$134,000 for the fiscal year 2021. The gross margin for the year was 62%.

Chief Executive Officer Lisa Crossley said the company expects to initiate a share buyback program this year with the revenue.

Technical analyst Clive Maund of CliveMaund.com recommended the stock shortly after it jumped from CA$0.52 to CA$0.62 when the revenue news broke.

“By the second half of the year, we should be throwing off a fairly significant amount of free cash,” she said. “And at that point, we think it would make very good sense to look at kind of reducing some of the dilution we've seen over the previous few years, and we would do that through a share buyback program.”

In a webinar discussing the outlook for the coming year, Crossley told shareholders that Reliq faced challenges collecting fees due to tightening belts from challenges to healthcare systems like COVID and hurricanes, but it expects those issues to ease.

“Growth is now expected to accelerate significantly in 2023 as the hardware orders are starting to be fulfilled, and the associated software revenues are therefore going to be able to be recognized,” Crossley said. “As we bring new clients on, and they're not deferring hardware purchases, they're ready to get going right away. And that will certainly contribute to [a] significantly increased rate of growth in 2023.”

Online Health Care More Accepted

Internet-enabled health care is becoming more accepted in the wake of the pandemic. Government and private insurance plans have expanded their coverage for such services, allowing more doctors to look at remote solutions like Reliq’s remote patient monitoring and virtual care platform.

Reliq expects to have as many as 200,000 patients on its platform, iUGO, by the middle of 2023.

Reliq expects to have as many as 200,000 patients on its platform, iUGO, by the middle of 2023.

The average practice can generate new revenue of more than US$400 per patient per month with the platform while paying US$40 to US$100 per patient per month to subscribe to iUGO.

The company also does the pre-screening and pre-authorizations with Medicare and Medicaid and electronic submissions for payment.

Diseases the company aims to manage at home include chronic obstructive pulmonary disease (COPD), congestive heart failure, diabetes, hypertension, and others. Patients get audible reminders to step on a scale, take their blood pressure, or prick their fingers for glucose monitoring. The information is automatically uploaded to the cloud.

Reliq Now the ‘Market Leader’

The company said it has provided flexible payment plans for client practices to help them get their accounts settled, and account managers have been instructed to make collections “their top priority.”

“As of the beginning of this year, all Reliq account managers are only receiving their commissions if the collections for the accounting question are up to date,” Crossley said. “That means that unless we, as a company, are getting paid and in a timely manner in accordance with our standard terms, then our account managers don't receive their compensation or at least the incentive component of their compensation, which for the most part is the largest part of their compensation package.”

But by getting into the space early, she said Reliq is now the “market leader.”

“We’ve done that work to establish ourselves now as the market dominator and the go-to if you’re looking for virtual care or digital health solutions in the U.S.,” Crossley told shareholders.

Ownership and Share Structure

Top shareholders include Crossley, who owns 1.56% or 3 million shares; Penserra Capital Management LLC, which owns 0.23% or 0.43 million shares; and Eugene Beukman, who owns 0.12% or 0.23 million shares, according to Reuters.

The ownership breakdown is 0.3% institutional, 8% insiders, and 91.7% retail, Crossley said.

The company has 197.5 million shares outstanding, with 193.9 million of them free-floating. It has a market cap of CA$110.2 million and trades in a 52-week range of CA$1.22 and CA$0.36.

Disclosures:
1) Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.

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