USAQ: Strong Fundamental Growth, Strong Industry Trends, and Strong Technicals Line Up

One of the defining trends that will drive a major part of the economy over the next decade is the decentralization of the healthcare system.

Home health spending, an excellent measure of this trend, is expected increase at a faster rate through 2027 than all other categories of care, according to a recent analysis from the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary.

It is expected to reach more than $186 billion in 2027, according to the report. This is miles above any other category of health care service, including hospital inpatient care, physician and professional services, nursing facilities, prescription drugs, retail sales of medical products and literally everything else in the space.

That growth reflects one simple point: that the economics of the traditional hospital model for healthcare has toppled from its own weight.

The pandemic simply accelerated this trend, driving the healthcare decentralization trend into a rapid acceleration, boosting telehealth, home healthcare, and the consolidation of medical offices into larger outpatient care centers offering ambulatory surgery centers, urgent cares and sophisticated diagnostic and treatment facilities.

At the center of this constellation of concepts is a striking opportunity for new healthcare technology solutions that help to reshape the relationship between patients and providers to take full advantage of the greater efficiency on offer as this landscape evolves.

One company now at the heart of this transformative opportunity is USA Equities Corp (OTCMKTS:USAQ), a Medical Technology SaaS focused holding company that equips physicians with the digital solutions needed to increase revenues through value-based tools that evaluate and treat chronic disease, producing greater efficiency, better outcomes, and stronger unit economics.

Symbol:  USAQ
Company:  USA Equities Corp
Quote:  http://finance.yahoo.com/q?s=USAQ
Latest News:  http://finance.yahoo.com/q/h?s=USAQ+Headlines
Company Website: www.usaqcorp.com

Who is USAQ

USA Equities Corp (OTCMKTS:USAQ) engages in the provision of medical device technology and software as a services. 

It focuses on enabling primary care physicians to increase their revenues by providing them with relevant, value-based tools to evaluate, and treat chronic disease through reimbursable procedures. Its products will enable physicians to diagnose and treat patients with chronic diseases which they historically have referred to specialists. 

Given the skyrocketing costs associated with acute and chronic care in a centralized healthcare model, this revolutionary shift has the potential to contribute to powerful gains in cost and care efficiencies.

According to the company, “Our products improve clinical outcomes for patients – often saving them the time and expense of a specialist visit while allowing physicians to increase their practice revenue through existing reimbursement codes. We provide our clients with the software and training necessary to improve clinical outcomes using value-based healthcare, informatics, and algorithmically personalized medicine to manage behavior-based, remote patient monitoring, chronic care, and preventive medicine.”

On December 20, 2019, USA Equities Corp completed a share exchange whereby it acquired Medical Practice Income, Inc. (MPI). The Company is focused on value-based healthcare solutions, clinical informatics and algorithmic personalized medicine including digital therapeutics, behavior based remote patient monitoring, chronic care and preventive medicine. 

The Company’s products are intended to allow the general practice physician to increase his revenues by cost effectively diagnosing and treating chronic diseases generally referred to specialists. The Company’s products and information service portfolio are directed towards prevention, early detection, management, and reversal of cardio-metabolic and other chronic diseases. Our principal objectives are to develop proprietary software tools, devices, and approaches, providing more granular, timely, and specific clinical decision-making information for practicing physicians and other health care providers to address todays obese, diabetic and cardiovascular disease population. 

According to recent company communications, USAQ is projecting entry level monthly subscriptions will be $299/month or $3,588 per year. Its near-term projection is to acquire 5,000 physician clients by the end of 2023 and over 20,000 physicians in the medium to longer term, which is still less than five percent of the total target physician audience in the US today. 

According to the Journal of Pharma and Healthcare: “There are over 450,000 primary care physicians, including licensed nurse practitioners, in the United States.” 

With a range between $3,588 – $10,000 per physician per year, USAQ is targeting an addressable annual market of roughly $1.6 billion. Capturing just 5% of this market would generate revenue of at least $87 million.

The company’s near-term objective is to acquire five thousand physicians by 2023, which would generate $17.9 million on the topline. All current and future products and services will be sold through the same distribution channel and customer base allowing it to generate additional revenue without the customer acquisition cost. 

Additional future distribution channels will come from licensed nurse practitioners starting their own private practices, walk-up clinics at pharmacies, urgent care clinics in grocery stores, and workplace health clinics for the large self-insured employers seeking healthcare cost savings by providing their employees with cost effective access to primary health care at their place of work. 

For a more in-depth profile, the company was recently featured in an audio podcast on SmallCapVoice.com, which can be accessed here.

Recent Catalysts

Positive Coverage. Most recently, the company announced the publication of a research report on USAQ by global research firm, Litchfield Hills Research LLC. The report, which was accessible on Bloomberg, FactSet, NASDAQ, NYSE Connect, S&P Cap IQ, Thomson Reuters (Refinitiv) and 12 other platforms around the globe, rated the Company a “Buy” under its three-tiered (buy-hold-sell) rating system, with a target price of $5.00 per share.

“Litchfield Hills research report highlights the strong sequential improvement in revenue and gross margin we saw in our first quarter financial results. We have made significant progress over the past few months with the commercial launch of AllergiEnd®’s allergy diagnostic and Allergen immunotherapy products expansion of our management team and visibility in the industry among primary care physicians. We continue to expect an increase in revenue and gross margin in the second quarter of 2021,” said Troy Grogan, CEO of USA Equities Corp.

Booming Growth. The company also recently announced results from a breakout quarter of growth during the 3-months ended March 31, 2021, including strong sequential growth and expectations for the second quarter.

“We made excellent progress executing on our financial and strategic priorities in the first quarter of 2021,” stated USAQ Chief Executive Officer Troy Grogan. “On a sequential basis, our revenue more than doubled to approximately $304,000, while gross margin improved 370 basis points to 43.9%. This growth is due to increased sales of allergy diagnostic kits and immunotherapy treatments as well as expansion of our customer base We also saw continued momentum in April, and currently expect an increase in revenue and gross margin in the second quarter of 2021.”

Expanding Braintrust. The company also recently announced that it has appointed Mr. Mike Mangus to its advisory and physician network development team. Mike will provide strategic guidance in the expansion of the Company’s physician network in conjunction with the Company’s automated cloud-based SaaS digital medicine and virtual care system.

“Mike has shown an invaluable depth of experience in the medical device and technology industry. His demonstrated business and physician network development at previous fortune 1,000 medical companies is expected to be an important contribution to the next phase of commercialization of our digital medicine and virtual care technologies at USAQ,” said Troy Grogan, President and CEO at USA Equities Corp.

This is important given the company’s strong guidance and objectives around expanding its physician network to drive accelerating growth over coming quarters.

Technical Analysis

USAQ has been tracing out a very large Bullish Ascending Triangle breakout pattern for the better part of the past two years. The rule of thumb among technical analysts is: the longer such a triangle breakout pattern has been building, the more explosive its eventual breakout stands to be, potentially.

Nothing in life is remotely guaranteed, and anything is possible in markets.

But, no matter how you slice it, this type of pattern is often very promising. A clear breakout and close above $0.70 would be the trigger for the pattern, in theory.

About USAQ

USAQ (USA Equities Corp) is focused on value-based healthcare solutions, clinical informatics and algorithmic personalized medicine including digital therapeutics, behavior based remote patient monitoring, chronic care, and preventive medicine. 

The Company’s products are intended to allow the general practice physician to increase his revenues by cost effectively diagnosing and treating chronic diseases generally referred to specialists. 

The Company’s products and information service portfolio are directed towards prevention, early detection, management, and reversal of cardio-metabolic and other chronic diseases. 

Its principal objectives are to develop proprietary software tools, devices, and approaches, providing more granular, timely, and specific clinical decision-making information for practicing physicians and other health care providers to address todays obese, diabetic, and cardiovascular disease population.

Key Points:

• USAQ drove strong topline growth in Q1, with revs topping $300k, representing whopping q/q sequential growth of 144%
• USAQ gross margin improved 370 basis points to 43.9% in Q1
• USAQ has seen breakout sales of its Allergy Diagnostic Kits and Immunotherapy Treatments to start 2021
• USAQ also recently projected another sequential increase in Gross Margin in Q2 2021
• USAQ just recorded a MACD Bullish reversal, suggesting a technical change in trend.
• USAQ is positioning itself as a leader in core technology aligned with the powerful healthcare decentralization trend, which is rounding the shoulder of an apparently exponential growth curve in developed countries

Conclusion

USAQ is an impressive small-cap in an impressive industry context. The drive to find new disruptive innovations that help scale powerful healthcare treatment solutions with improved outcomes, a wider footprint, and better unit economics at the provider level has taken root and depends on new technology solutions such as those on offer from this innovative name.

Recent results prove the model to some extent, as USAQ sees very strong growth across core metrics and establishes a realistic growth plan with achievable but impressive objectives for coming quarters.

The company is squaring off with a large and growing total addressable market and making rapid strides toward top positioning in its niche.

And, technically, USAQ shares are locked in a clear “Bullish Ascending Triangle” pattern that potentially points to breakout upside action ahead.

Recent Chart Activity

Recent News