Contract Adding Thousands of Patients to Co.'s Telehealth Platform

Telehealth company Reliq Health Technologies Inc. (RHT:TSX.V; RQHTF:OTCQB; A2AJTB:WKN) announced it has signed a new contract with a Texas respiratory clinic that is expected to add 10,000 new patients to its iUGO platform by mid-2024.

The iUGO platform helps manage diseases such as 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. 

"The iUGO Care platform supports patients with asthma, (COPD) and other breathing issues by providing remote monitoring with connected spirometers, inhalers, and nebulizers," said Reliq Chief Executive Officer Lisa Crossley. "According to the CDC (Centers for Disease Control and Prevention), over 20 million Americans have COPD, and it is the fourth-leading cause of death in the States. Remote monitoring of asthma and COPD patients allows health care providers to identify early changes in lung function that can be easily treated at home with antibiotics, steroid inhalers, or nebulizer treatments."

The telehealth market was valued at US$128.12 billion in 2022 and is projected to grow to US$504.24 billion by 2030, a compound annual growth rate (CAGR) of 19.7%, according to Fortune Business Insights.

Drawing on data from fall detection devices, medication tracking, and vital signs, iUGO flags patients at home or in facilities who need additional monitoring.

These early interventions can prevent complications like inflammation, bronchitis, and pneumonia in COPD patients that can cause permanent lung damage and lead to lengthy intensive care unit stays.

Onboarding of the 10,000 patients, at US$65 per patient per month and greater than 70% gross margin, will begin this month, the company said.

The telehealth market was valued at US$128.12 billion in 2022 and is projected to grow to US$504.24 billion by 2030, a compound annual growth rate (CAGR) of 19.7%, according to Fortune Business Insights.

"The market is getting a significant boom with the rising start-up funding and launch of products, especially for virtual consultations," researchers wrote.

The COVID-19 pandemic brought the world to a standstill and put many burdens on healthcare workers. 

"This has opened new market opportunities for digital health platforms," according to the report. "The demand for virtual consultations increased by many folds amid the crisis,

The Catalyst: 'Continuing Momentum'

The company is gathering "continuing momentum," wrote Maxim analyst Allen Klee, who rated the stock a Buy with a CA$1.75 per share target price. "We believe the company has hit an inflection point of accelerating revenue and EBITDA profitability. Tailwinds include a significant number of larger contracts that have been won."

Reliq had its first profitable quarter during the three months ending March 31 with a gain from operations of CA$731,017 YoY. It also has started scoring larger contracts for iUGO, including one with a U.S. health plan that operates in five states with more than 3,000 doctors and 1 million patients.

The company is gathering "continuing momentum," wrote Maxim analyst Allen Klee, who rated the stock a Buy with a CA$1.75 per share target price. 

The company will not release its final results for fiscal year 2023, which ended June 30, until October. But Crossley recently told analysts and shareholders that according to estimates, revenues more than doubled from fiscal year 2022.

iUGO is a "compelling offer for practitioners," Klee wrote. "A typical practice can bring in more than US$1 million in Medicare and Medicaid payments implementing it."

"We project FY23 revenue of CA$17.1M, up 101% (YoY), in line with management's expectations for revenue to double in FY23 and implying F4Q23 revenue of CA$4.8M, up 110% (YoY)," Klee wrote. "For FY24, we project revenue of CA$34.2M, +99% (YoY), roughly in line with management's expectations for revenue doubling in F2024."

Klee's revenue predictions could prove conservative if the company is "successful in onboarding some of the larger contracts that have been announced," he wrote.

Little Effect from Idalia

Reliq, which has contracts in Florida, also announced that Hurricane Idalia did not significantly impact its clients there and "will not disrupt onboarding or billing for Reliq's clients in the state," Crossley said.

"Onboarding, adherence, and collections have continued to improve this quarter, and the company's profitability continues to increase," Crossley noted. "Sales for FY 2023 more than doubled year-over-year relative to FY 2022 and are expected to more than double again in FY 2024."

Recently, the company also announced it had signed contracts with 20 new rural health clinics (RHCs) in California, Nevada, Puerto Rico, Texas, and the U.S. Virgin Islands.

The contracts are expected to add more than 50,000 patients to iUGO by the end of 2024.

Ownership and Share Structure

About 8% of Reliq's shares are owned by insiders, including Crossley, with 1.6% or 3.22 million shares. About 0.3% of the company is owned by institutional investors, including FNB Wealth Management, with 0.01% or 0.03 million shares, according to Reuters.

Other top investors include Eugene Beukman, who owns 0.11% or 0.23 million shares, and Brian Storseth, who owns 0.07% or 0.14 million shares, Reuters said.

Crossley said 91.7% of the company is retail.

The company has 203 million shares outstanding, with about 200 million free-floating. It has a market cap of CA$91.3 million and trades in a 52-week range of CA$0.76 and CA$0.375.

Important Disclosures:

1. Reliq Health Technologies Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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