The timing of Reliq getting to where it is now has been disappointing and I doubt anyone would disagree with that. There was a big disconnect between seeing patients being on the system to being compliant that no one really saw. With the substantial AR they have been banking, they should have been profitable long before now but as a shareholder, none of us understood the terms that allowed AR to get over 20 Million and had it been payable things would have resulted in very different results. Not that they don't still have a lot of work to do on getting the patients on the system adherent so that they can be billed. A big part of the breakdown was trusting clinics to manage the patients but the company has addressed that. With all of the positive changes that we have heard about, I have no idea how to quantify their upcoming financial reports. All I can do is look at the potential as they realize the contracts and get people more and more adherent so that they can collect on the billings.
I still expect some low numbers in October with significant improvement in November. What that will look like in Q3 in May is what I am focused on now. Assuming the company can get adherence close to the 70% at year end, we will see a much larger AR for that period as at this time the company should be well over 200k people on the system and at $50 a person that should be 7 million a month billable. Considering they should have had 200k on by July, I hope my number is low. Company came clean on their issues and challenges in January so 10 months ago was a completely different picture. I still believe this gets to 1B market cap and gets bought out but the timeframe has been pushed 18 months to 2 years out while they address the challenges. Still likely a 10x for those who can wait.
All this said, the last two news releases were huge and show that the faith in the company was not poorly placed. Time will tell of course but for Maxim, I assume they, like myself have realized that the delay between operations and billing is basically 6 to 9 month minimum lag so they built themselves a buffer. As I see it, although most of the big stuff is done by an automatic upload, training the people takes some extra time. They all know it works but habits need to be made for Reliq to bill for it and habits take 6-8 weeks usually. So figure a month or two of not using devices properly. Then a month or two of automated daily reminders and some phone conversations until the average patient can be billed. Then add three months. Best case we are 6 month behind on billing from first contact. I assume 9 months and I think Maxim would have to as well.
