10-Q: QHSLab Reports Increased Revenue but Losses Persist in Q1 2025
Quarterly Report
QHSLab, Inc. reports increased revenue for the quarter ended March 31, 2025, but continues to experience net losses and going concern uncertainties.
Summary
- QHSLab, Inc. reported revenue of $645,419 for the three months ended March 31, 2025, compared to $488,587 for the same period in 2024.
- The increase in revenue is attributed to clinical study revenue and growth in Integrated Service Program (ISP) services and Allergy Diagnostic Kit sales.
- The company's net loss for the quarter was $79,609, compared to a net loss of $18,525 for the same period in the previous year.
- Operating expenses increased to $441,983 from $272,554 in the prior year, driven by higher general and administrative, sales and marketing, and research and development costs.
- The company's financial statements have been prepared assuming it will continue as a going concern, but substantial doubt exists about its ability to do so.
- The company is currently in default of its obligations under its OID Notes and the Acquisition Note.
- The company's continuation as a going concern is dependent upon its ability to obtain necessary equity or debt financing and ultimately from generating revenues and positive cash flow to continue operations.
Sentiment
Score: 3
Explanation: While revenue increased, the company's net loss, default on debt obligations, and going concern uncertainty indicate a negative outlook.
Positives
- Revenue increased by approximately 32% compared to the same quarter last year.
- Gross margin improved from 58.6% to 66.6%.
- The company is focused on expanding its QHSLab platform and introducing new products and services.
Negatives
- The company experienced a net loss of $79,609 for the quarter.
- Operating expenses increased significantly.
- The company has a substantial accumulated deficit of $4,410,959.
- The company is in default of its obligations under its OID Notes and the Acquisition Note.
- There is substantial doubt about the company's ability to continue as a going concern.
Risks
- The company's ability to continue as a going concern is uncertain.
- The company is dependent on obtaining additional financing.
- The company is in default of its obligations under its OID Notes and the Acquisition Note.
- The company's lenders may choose to exercise their rights, which could have a material adverse effect on the business.
- The company's ability to obtain funds through the issuance of debt or equity is dependent upon the state of the financial markets.
Future Outlook
The company plans to increase revenues by charging physicians various service, assessment, program and subscription fees for the use of QHSLab and soliciting additional healthcare providers to increase their revenues by using our proven revenue generating QHSLab and AllergiEnd line of products.
Industry Context
The company operates in the value-based healthcare, informatics, and personalized medicine sectors, focusing on enabling primary care physicians to increase their revenues through chronic disease management and preventive care.
Legal Proceedings
- On February 20, 2025, the Company received a notice of default from Mercer in respect of the $806,000 Note and the $440,000 Note.
Related Party Transactions
- Amounts due to related parties consist of cash advances received from our principal shareholder, bear no interest and are due on demand.
- The Company's Chief Executive Officer and principal shareholder is a minority shareholder of MedScience.
- Convertible notes payable, related party: See Note 7.
Stakeholder Impact
- Shareholders face potential dilution from future equity issuances.
- Employees face uncertainty due to the company's going concern status.
- Creditors face the risk of non-payment due to the company's financial difficulties.
Next Steps
- The company will continue to upgrade QHSLab in an effort to increase the number of products sold based upon the services it can provide.
- The company intends to continually explore its options to raise additional capital or, when available, borrow additional funds on terms which it believes are favorable to us.
Key Dates
| Date | Description |
|---|---|
| 1983-09-01 | QHSLab, Inc. was incorporated in Delaware. |
| 2019 | The Company became engaged in value-based healthcare, informatics and algorithmic personalized medicine. |
| 2021-06-21 | Information Statement on Form 14-C filed. |
| 2021-06-23 | The Company entered into a purchase agreement to acquire certain assets from MedScience Research Group, Inc. |
| 2021-09-23 | The Company changed its state of incorporation from Delaware to Nevada. |
| 2021-12-29 | Report on Form 8-K filed. |
| 2022-04-19 | The Company changed its name to QHSLab, Inc. |
| 2022-07-19 | The Company entered into a Securities Purchase Agreement with Mercer Fund. |
| 2024-08-12 | The Company entered into a fixed-fee short-term loan with its merchant bank. |
| 2025-01-06 | Mercer Fund converted $25,000 of the principal amount of the $806,000 Note into 125,000 shares of the Company's common stock. |
| 2025-01-13 | Mercer Fund converted $50,000 of the principal amount of the $806,000 Note into 250,000 shares of the Company's common stock. |
| 2025-02-20 | The Company received a Notice of Default from Mercer Fund in connection with the $806,000 Note and the $440,000 Note. |
| 2025-03-20 | The most recent notice of forbearance was received from MedScience. |
| 2025-03-31 | End of the quarterly period. |
| 2025-05-14 | Date of the report. |
Keywords
QHSLab, revenue, net loss, going concern, convertible notes, AllergiEnd, SaaS, medical device, healthcare, default
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