Healthcare software company Reliq Health Technologies (Reliq Health Stock Quote, Chart: TSXV:RHT, OTC:RQHTF) is currently under scrutiny concerning its financial disclosures, a situation that has done major damage to the company’s share price which had already been sinking lower for much of the year. And while Reliq may be righting its ship at some point in the future, now’s certainly not the time to be jumping on board, says Charles Taerk of Faircourt Asset Management.
On Tuesday, Reliq released a statement indicating that it plans to restate certain aspects of its financial information for the quarter ended March 31, 2018.
“The decision to restate followed a review conducted by the Company’s auditor and Audit Committee, wherein it was determined that the timing and certainty of receiving the revenue invoiced to clients is substantially unclear, due to clients’ issues with securing reimbursement from the payor,” reads the press release. “The material changes to be included in the restatement will affect the Company’s revenue and are projected to increase the Company’s loss and comprehensive loss for Fiscal Year 2018. In addition, the Company’s Board of Directors have taken the position that no revenue will be reported for Q4 of fiscal 2018 until revenue collection issues are resolved.”
In response, RHT fell 58 per cent on Tuesday, closing at $0.315.
Taerk, president and CEO at Faircourt, spoke to BNN Bloomberg about the matter.
“We sold Reliq about five or six months ago,” he said. “We thought that the concept that they offered in remote health monitoring, it’s a very viable business, but unfortunately, the technology has been slow to get out into the market and now they’ve had a financial issue with collection of receivables and that’s hitting the stock pretty hard.”
“Hopefully, we’ll see better days, but it doesn’t look good at this point,” Taerk said.
By Wednesday, investor rights law firm Rosen Law Firm had released a statement saying that it would be filing a class action lawsuit on behalf of Reliq investors “resulting from allegations that Reliq may have issued materially misleading business information to the investing public.”
RHT ended trading on Wednesday up 17.5 per cent to $0.370