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.
themoneynarrative 
You might be right but only because […]. You keep […], you’ve been […].
Themoneynarrative replies (6:37 PM): The information source is not at the company.
Dear readers, the foregoing message has been redacted to eliminate unproductive commentary that does not contribute to an objective discussion of the subject matter, being Reliq Health.
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While the extensive delays in releasing Reliq Health’s financials have surprised many in the investment community, we understand from a source in a position to know that the company will be able to release the long-awaited financials by the end of May 2024 at the latest. We have been disappointed previously, but this time it indeed appears imminent.
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Are you signing up a 1×1 meeting at the Lytham conference?
Themoneynarrative replies (3:25 PM): We are not, already having access to Reliq Health management. We understand that investors have very pressing concerns that they would like to have addressed; however, many typical questions cannot be answered by management owing to insider or selective disclosure restrictions.
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Here at themoneynarrative, we have an appreciation for the complexities of the businesses we look at. A great deal of retail investor chatter does not address the full range and depth of issues, and as a result fails to identify fully and appreciate the real concerns. For example, in the remote patient monitoring space, an interesting starting point for those who want to understand the sorts of issues that parties implementing digital health solutions need to consider might consult a 107-page publication from the American Medical Association, which can be accessed here: https://www.ama-assn.org/system/files/ama-remote-patient-monitoring-playbook.pdf. Being better informed helps investors make better decisions, and avoid some of the anxiety that often stems from lack of awareness.
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For those who are interested in the upcoming American Medical Association review of Current Procedural Terminology (CPT, a medical code set that enables physicians and other healthcare providers to describe and report the medical, surgical, and diagnostic procedures and services they perform to government and private payers, researchers and other interested parties), a Proposed Panel Agenda has been released that outlines Code Applications submitted for discussion at the May 2024 CPT editorial panel meeting. Of particular interest to Reliq Health are the submissions relating to remote monitoring, more in particular:
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A themoneynarrative reader commented upon (April 29, 2024 (5:16 PM)) revenues relating to new billing codes. The company has provided additional clarification, as follows: “The potential changes in RPM and RTM if approved will significantly increase the amount of revenue generated on existing and new patients and should drive compliance rates higher than 90%. Patients who were compliant at 16 readings and 20 minutes will likely benefit from an extra 10 minutes of time instead of needing an additional 20 minutes. That is expected to increase per patient revenue by 15-20%. For patients that were not compliant previously, >90% will be compliant with 2 readings and 10 minutes. Those patients will likely be only 30-50% of the revenue of a patient with 16 readings and 20 minutes. Overall revenue should be >$50 per patient per month on 90% of patients if the proposed changes are enacted. BHI expansion should add significant additional revenue as well.”
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This message is for some of the other people leaving comments here. It is one thing to bash the company; that is your right, although please try to articulate your criticism in a constructive manner if possible. It is another thing to cast aspersions at this site and the helpful insight it provides. Thanks to TMN for this service, which is the only place where anyone can get any up to date information on RHT. Thanks as well for you interesting, clear-eyed and thoughtful consideration of the company and its ongoing issues.
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I tend to believe what they are telling us and still think there will be a good outcome here. I appreciate your insights and very much appreciate the effort because you really are the only source of information available.
Themoneynarrative replies (12:41 PM): Thank you. In the circumstances, whatever management does will not satisfy all observers. Small companies like Reliq Health have very limited resources, and their time is certainly best spent focussed on resolving the issues faced. Management is very dedicated to making a success of the company, despite what some believe. While a successful outcome is uncertain, in our view it remains the most likely outcome. Since there is no publicly-available information that lends weight to this viewpoint, there is no point in debating it. Investors should consider the interactions that they are aware of (which we publish periodically by way of articles and comments), and consider rationally whether it is likely that management is working nefariously behind the scenes (highly unlikely).
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“not an indication of further expected delay” means nothing when we don’t know what the current expected delay is. You keep naively printing the nonsense that they feed you.
Themoneynarrative replies (10:21 AM): The first statement you make is partially true, but it is nonetheless important to understand that the postponement of the AGM in and of itself is not an indicator of further delay in the release of the financials, whenever that might occur. As we said on April 20, 2024 (4:49 PM): “Investors are well served seeing what management has to say in that accuracy of statements is an important part of management evaluation. It’s not about being ‘right’.” It is for this reason that we asked the question, which provides information where otherwise there is none, even if the response is not as detailed as investors want. Since we ask the questions, we decide what to ask, when to ask, and what to do with the responses. Hardly naive. Investors, including themoneynarrative, are free to draw their own conclusions from information received.
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Not an indication of further delays. Riiiiiiiiigggghhhhhtttt. But thank you for getting us the latest excuses regardless.
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We asked Reliq Health to provide an explanation for such a long postponement (to December 3, 2024) of the annual meeting. Here is their response: “The postponement of the AGM until December is not an indication of further expected delay in releasing the financials. The Board felt that having the AGM moved to December will provide better insight into the Company operations for shareholders with the audited FY2025 [FY2024] being released and more time to select additional directors to be added.”
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Wow, these guys keep surprising. Looks like they’ve decided that they are better off under the CTO with no reporting obligations.
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Holey Moley. This company is an unmitigated disaster. Just how badly was this being run, that it takes over a year to fix some internal control issues? I can’t believe that the participants in the last private placement haven’t launched a class action yet….
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These guys have no intention of producing financials. They are effectively a private company except that shareholders have no representation on the Board.
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Reliq announced today they have changed the date for their annual meeting to Dec 3rd, 2024.
Can I ask what your take is with this rescheduling
Themoneynarrative replies (9:49 PM): We asked the company for an explanation earlier this evening and should have a reply tomorrow.
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While many investors are unable to trade over the counter with their brokerage firms, those that are in a position to do so can realize some quite extraordinary intra-day profits trading Reliq Health. In view of the uncertainties, traders are best advised to exit their positions daily if they are able to do so. Those holding longer-term with an appetite for higher risk and investing with discretionary and non-margin funds may do very well acquiring or averaging down at these levels.
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It’s increasingly clear that the company was not structured to collect money efficiently, and a far cry from the wild “aspirational” claims made by the previous CEO
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I think both you and Reliquary had made a wrong assumption that the rates for the new codes will be as high as the old codes. That doubling of revenue is unfounded.
Themoneynarrative replies (5:58 PM): We agree that rates for fewer readings and shorter interaction times are likely to be lower, and make no assumptions as to whether a doubling is realistic or even feasible, although that figure is also reliant upon the behavioral health expansion the Company previously announced as mentioned in the quote. The more important point is that revenues will increase if these new codes are implemented.
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This is great, sign of good things to come in 2025 but also sounds like confirmation that current business is alive and well. Would have been great to get at least some indication on the audit, I assume you asked, did they really tell you nothing? As always, thank you very much for doing this. I hope the Company appreciates that you have become their IR department.
Themoneynarrative replies (4:18 PM): We didn’t ask about the audit, knowing that they could not tell us anything. In what may surprise some readers, our (somewhat contrarian) view is that it will be interesting to see or infer what has gone wrong in the past when the financials are finally released, but the important aspect will be to determine whether the company has fixed or is fixing the problems and is in a position to move on and achieve success. If expectations are low around performance to date, the only real issue of concern is future performance capacity. Scott is still working hard at Reliq.
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Unfortunately, doubling revenue doesn’t mean anything until they demonstrate the ability to collect it.
Themoneynarrative replies (4:06 PM): With the right processes and team, collections are easy.
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Themoneynarrative maintains a regular dialogue with Reliq Health management. While some investors would like answers to questions that the company is not yet ready or able to respond to, they should rest assured that a lot is happening in the background. As has been the case the past few years, there is good news from a regulatory perspective, which is well described in this exchange received from Reliq Health, where we are pleased to see that they speak of significant revenue impact in 2025, a realistic timetable that should give investors some comfort, even if they might hope for faster progress:
“March is the time each year that additions and changes to Medicare and Medicaid programs are proposed. The last few years have had big changes with new program additions (remote therapeutic monitoring, behavioral health additions) but existing programs generally have small changes that clarify the regulations or make them run more efficiently. The American Medical Association is one group that proposes many of the changes after consultation with their members and healthcare groups. This year they are proposing a series of major changes to RPM that address the biggest hurdles that the industry faces with expansion of the program.
The first change is adding a code for 2-15 readings in addition to the existing code for 16 or more readings in a month.
The second change is adding additional care management codes for 11-19 minutes of time.
It has been well documented in a number of studies that patients benefit from RPM programs even if they do not take 16 or more readings in a month or have 20 minutes of care management time. Reliq will likely increase RPM revenue by 50% for patients added in the last 12 months who take longer to become compliant and keep patients on the program who are not as diligent about compliance.
In addition to the increase in RPM codes the behavioral health expansion the Company previously announced will likely have a significant impact on 2025 revenue. These two combined could double revenue for Reliq in 2025 and push adherence rates up into the 90+% range.”
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Stephen Samson will have no interest in talking to you. Efforts would be better focused on trying to get some useful information on the audit. They must have some sense of how close they are. If they really don’t know, that’s useful to know as well. Would also be curious to know why they think radio silence is the right communication strategy.
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Have you received a response from Stephen Samson?
Themoneynarrative replies (4:00 PM): Not yet. We will follow up in due course.
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Is there a time limit for a legally obligated update from the company? Your interviews give assurance the company is at least operating but it seems wild there have been no public updates
Themoneynarrative replies (3:57 PM): No. Filing deadlines, once missed, have various consequences that occur after varying periods of time. As we have seen, the first such consequence was the Management Cease Trade Order on October 31, 2023, followed by the (full) Cease Trade Order on January 16, 2024. If a company continues for too long a period of time without being able to demonstrate that corrective measures are being taken, it will eventually be delisted from its exchange(s), although some essentially defunct companies continue to trade over the counter because there is a market for those wishing to crystallize tax losses or, in certain cases, because the company is a shell target to be recapitalized as a brand new entity. In Reliq’s case, delisting is highly unlikely.
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If you do have a chance to interview him, it might be worthwhile to ask why Reliq isn’t even listed among their competitors in the press release
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