Themoneynarrative’s interview with RHT.V’s CFO, Kevin Cornish

On April 16, 2024, themoneynarrative had the opportunity to speak with Kevin Cornish, newly-appointed CFO of Reliq Health Technologies (RHT.V).  The company has been in the news as a result of delayed financials.  The questions posed were not provided in advance. Chris Shields, RHT.V’s Interim CEO, provided a response regarding capital markets, where indicated.

themoneynarrative:  Tell us about your prior experience and how that fits with Reliq Health’s business.

Kevin Cornish:  My prior experience is refocusing companies that are either transitioning, going public (IPO) or restructuring.  I enjoy that, and when I came over to Reliq, this was kind of that, a perfect fit, a situation of “we are where we’re at today and we know where we want to go”, so what are the strategy needs?  I’m happy to be part of this team.  My experience with other companies similar to Reliq is in as much as the structure, as it is what needs to happen, and is a very good fit.  I’ve worked with companies that are CSE, TSX, and TSX-V listed; small cap companies are my forte.  I have a bit of a history turning companies around or launching start-ups and achieving growth economies of scale.  In terms of performance management, I’m the person who likes to ask how we get there, creating hands-on written strategy that will be followed; not fly-by-the-seat-of-our pants in any way. I find that taking that approach at companies I’ve been with has led to success.  So I’m happy and excited to work with Chris [Interim CEO Chris Shields].  So far my experience has been more than positive and I am excited to see what we can do with Reliq and start getting it going to a place that we all would like to see it go.

themoneynarrative:  Are you full time at Reliq Health, or are your responsibilities divided with other projects such as G6 Materials Corp. (GGG.V)?

Kevin Cornish:  I’m available for as much time as the company needs, up to full time.

themoneynarrative:  Apart from issuing the delayed financials, what are your top priorities as Reliq Health’s new CFO?

Kevin Cornish:  So, obviously, number one being the audit, and after that we are currently figuring out what are my priorities going to be, where are we going and where can I best add value to this company and the shareholders.  That is being worked on as we speak.

themoneynarrative:  Some investors worry that the extensive delay in releasing the financials means that the company is in serious trouble, or perhaps is seeking to be acquired or go private.  Can you offer any reassurances about the financial state of the company and where it is headed?

Kevin Cornish:  Some of that stuff would be private and confidential for now but what I can say is companies that have not posted financial statements in my history of being CFO is nothing critical for the most part.  And I’ve been there where companies haven’t posted financial statements, and they’ve turned around, posted the financials and become great successes.  So the fact that we haven’t posted our financial statements is not an indicator in any way of any negatives.  In fact, I would look at it as a positive where we’re getting our financial systems in order and going to come out with an updated strategy that builds upon the current one.  And in the future, after the audit is posted, we will have a corporate-wide update and we will fill everybody in on the back-end processes that we’ve been working on improving.

themoneynarrative:  Investors are quite naturally concerned by delayed financials.  What steps is executive management taking to ensure that future deadlines are met?

Kevin Cornish:  Well they hired me, that was a good one, because I’ve yet to miss a filing deadline in anything under my control.  Going forward, we’ll look at what happened and why.  I think this is a one-off, an anomaly, why we haven’t posted.  Going forward, it’s just more corporate governance controls and just basically creating the right plans and processes in the company to make deadlines so that we will not miss filings again.  I am not worried or concerned about missing future filing deadlines.

themoneynarrative:  While you haven’t had a lot of time to evaluate fully the situation, have you had a positive experience thus far working with the company’s auditors, KPMG, and is their service offering a good match for the company from your perspective?

Kevin Cornish:  I can’t speak too much about that since I haven’t had too much interaction yet; however, I have worked with KPMG in the past and have nothing but positive things to say about KPMG and have no problem working with them in the future.  Now, going forward, if we are not the right fit, or we need to look for other auditors, that’s not beyond us.  And we would look at that.  So it’s what makes best sense for our shareholders and filing, and obviously financial controls, that allow us to choose the best auditors for the right price.

themoneynarrative:  Every company needs to be concerned about administrative matters, and particularly proper billing and accounts receivable collection.  Can you offer any thoughts on this subject regarding Reliq Health’s situation?

Kevin Cornish:  The big one with accounts payable/accounts receivable is obviously in dealing with the older stuff first.  Accounts payable – I find that a lot of companies are willing to work with you if you’re open and honest and just put it all out on the table and here’s where we’re at.  I’ve never really run into any companies that aren’t willing to work with you.  And that’s the plan as we get into this with accounts payable.  We will be, obviously, working with our bank because we need them on board going forward.  But we also need a little bit of understanding of where we’re at to finish turning everything around with the audit, and so on and so forth.  I enjoy accounts payable; it is a forte of mine managing the money correctly.  My typical pay terms, if we can get them, are 90 days, but I don’t really accept terms under 60 days for payables and my process in payables is getting rid of all paper.  I like to use electronic wires, ACH payments, which allows for quick processing where we’re not having hundreds of thousands of dollars of uncashed checks out there where we can’t manage our cash flow correctly.  Managing the accounts payable is critical to cash flows along with the accounts receivable and ensuring that we offer proper terms to our customers to incentivize them to pay on time.

themoneynarrative:  With capital markets effectively closed to Reliq Health at present, is the company’s cash burn going to cause a financial crunch, or do improving revenue and collections metrics eliminate this issue?

Chris Shields:  With our limit to the capital markets we have less capital available for growth than we could take advantage of.  As soon as we get back to trading, we’ll have access to additional capital if needed.  Collections has eased somewhat our cash burden, but we were on a very extensive growth phase, which required a lot of capital.  We’re reevaluating all of that, but once we come out of the cease trade, we’ll be back to business as usual with respect to growth.  We’ve been adding clients on a regular basis, but we probably have toned back a bit on the growth just to conserve cash.

themoneynarrative:  A top priority must be a permanent CEO who will lead the company in the right strategic direction.  As a member of the executive team, what thoughts would you share with your CEO and the board when considering candidates?

Kevin Cornish:  Good question.  Honestly, the biggest qualities I find that are important with CEOs is understanding the bigger picture of the company, where they’re always focusing on the strategy and what we need to do in growing the company, which is the standard description of the CEO.  However, I enjoy a CEO who lets the rest of the executive team run autonomously, and trusts their team.  They trust the team and they put the team in place and if the CEO decides that they need to make any changes, that they make those changes quickly rather than waiting too long to make those changes.  I’d like to see a CEO who has great connections in the capital markets, great connections in the banking industry, and great connections, as funny as it may be, in the legal industry; companies always need legal backup.  It’s more about the charisma and being just a straight shooter, transparent, a CEO who has great integrity.  And when he gives his word, or her word, that is the beyond all.

themoneynarrative:  Do you have any other thoughts you would like to share?

Kevin Cornish:  As of right now, so far, this experience with Chris has been great.  Everything I’ve experienced so far has been at the top echelon of my career.  So I’m very excited to be with Reliq; very professional so far from what I’ve seen.  I’m excited to get in here and see what we can do.  I believe there’s great opportunity here and the future will tell that.