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Quad M Solutions Reports Fiscal Third Quarter 2020 Results

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Gaining Momentum as the Gig Economy Gains Traction

Quarterly Revenues of $4.7 Million Leads to Improvement in

Operating Loss to $0.4 Million

EDGEWATER, NJ / ACCESSWIRE / September 1, 2020 / Quad M Solutions, Inc. (OTC PINK:MMMM) ("Quad M" or the "Company"), a public holding company that offers staffing services and employee benefits such as health plans, HR-human resources, and payroll services, to small and mid-sized group employers, today announced the Company's operating and financial results for the fiscal third quarter ended June 30, 2020.

Key Financial Highlights for Three Months Ended June 30, 2020

  • Revenue increased to $4.7 million

  • Operating loss decreased to $0.4 million

Key Financial Highlights for Nine Months Ended June 30, 2020

  • Revenues increased to $10.0 million

  • Operating loss decreased to $1.0 million

Key Business Highlights for Year-to-Date

  • Partnered with Rejuvenan Global Health to offer jointly digital healthcare insurance coverage

  • Entered into Definitive Agreement to acquire iCan Benefit Group

  • Partnered with EdLogics for innovative health insurance offerings

  • Signed master broker agreement with Otegrity

Management Commentary

Mr. Pat Dileo, Quad M Solutions' Chief Executive Officer, commented, "I am very pleased with our results since the beginning of 2020, as we continue to execute on our plans of providing health insurance offerings to the self-insured and small businesses of the gig economy. Our early success is exemplified by our dramatic increase to record revenue of $10.0 million over the past six months. We believe this is just the tip of the iceberg, as our Company is poised for hockey stick-like growth over the next few years."

Dileo, continued, "We are very well-positioned for the current and post-Covid-19 environment as unemployment in the U.S. nears 15% and large corporations continue to downsize. Self-employment and 1099 contractor work are on the rise, just as they were after the 2009 financial crisis. However, we strongly believe this is the new-normal and here to stay. Different from past instances, today's work environment is more connected thanks to the power of the Internet and increased mobility. The gig economy of freelance and part-time workers is enabled by such technology advancements, and this increasing population needs access to affordable and sensible health insurance. The recent battle in California whereby Uber and Lyft do not want to recognize their drivers as employees and thus do not want to provide them with health insurance provides us opportunity."

Dileo, concluded, "We are very excited with our recent strategic business partnerships with Rejuvenan Global Health, EdLogics and Otegrity and announced letter of intent to acquire iCan Benefit Group. All of these business deals will increase our visibility to qualified gig economy workers for our health insurance offerings. In regards to our capital markets positioning, we successfully completed a recapitalization of our common stock earlier this year and believe it makes our stock more appealing to a much wider audience of potential buyers. Our team and advisors continue work on further improving our balance sheet and positioning us for an uplist to a major national stock exchange in 2021. We look forward to reporting our progress as it unfolds throughout the remainder of 2020 and into 2021."

Financial Results for the Three Months Ended June 30, 2020:

Revenue for the three months ended June 30, 2020 was $4.7 million, an increase of $4.7 million, compared to $0 for the three months ended June 30, 2019, as the Company previously generated no revenue.

Gross profit for the three months ended June 30, 2020 was $0.2 million, an increase of $0.2 million, compared to $0 for the three months ended June 30, 2019. The resulting gross margin was 4.0% for the three months ended June 30, 2020.

Operating expenses for the three months ended June 30, 2020 were $0.5 million, an increase of $0.1 million or 22%, compared to $0.4 million for the three months ended June 30, 2019.

Operating loss for the three months ended June 30, 2020 was $0.4 million, a decrease of $0.1 million, or 20%, compared to $0.4 million for the three months ended June 30, 2019.

Net loss for the three months ended June 30, 2020 was $0.9 million, a decrease of $0.6 million, or 40%, compared to $1.6 million for the three months ended June 30, 2019. The net loss for the three months ended June 30, 2020 included non-cash items totaling $0.6 million made up of interest expense, financing expense, loss on issuance of convertible debt and gain on revaluation of derivative, compared to $1.1 million for the three months ended June 30, 2019. The resulting loss per share for the three months ended June 30, 2020 was ($0.15) per share, compared to ($0.02) per share for the three months ended June 30, 2019.

Financial Results for the Nine Months Ended June 30, 2020:

Revenue for the nine months ended June 30, 2020 was $10.0 million, an increase of $10.0 million, compared to $0 for the nine months ended June 30, 2019, as the Company previously generated no revenue.

Gross profit for the nine months ended June 30, 2020 was $0.4 million, an increase of $0.4 million, compared to $0 for the nine months ended June 30, 2019. The resulting gross margin was 3.7% for the nine months ended June 30, 2020.

Operating expenses for the nine months ended June 30, 2020 were $1.4 million, an increase of $0.3 million or 27%, compared to $1.1 million for the nine months ended June 30, 2019.

Operating loss for the nine months ended June 30, 2020 was $1.0 million, a decrease of $0.1 million, or 6%, compared to $1.1 million for the nine months ended June 30, 2019.

Net loss for the nine months ended June 30, 2020 was $4.0 million, an increase of $1.7 million, or 74%, compared to $2.3 million for the nine months ended June 30, 2019. The net loss for the nine months ended June 30, 2020 included non-cash items totaling $2.9 million made up of interest expense, financing expense, loss on issuance of convertible debt and gain on revaluation of derivative, compared to $1.2 million for the nine months ended June 30, 2019. The resulting loss per share for the nine months ended June 30, 2020 was ($1.52) per share, compared to ($1.03) per share for the nine months ended June 30, 2019.

Use of Non-GAAP Financial Measures

To supplement Quad M Solutions's financial statements presented on a GAAP basis, Quad M Solutions provides Adjusted EBITDA as a supplemental measure of its performance.

To provide investors with additional insight and allow for a more comprehensive understanding of the information used by management in its financial and decision-making surrounding pro forma operations, we supplement our consolidated financial statements presented on a basis consistent with U.S. generally accepted accounting principles, or GAAP, Adjusted EBITDA as a non-GAAP financial measures of earnings. Adjusted EBITDA represents EBITDA plus stock-based compensation and change in fair value of derivative liabilities. Our management uses Adjusted EBITDA, as financial measures to evaluate the profitability and efficiency of our business model. We use these non-GAAP financial measures to access the strength of the underlying operations of our business. These adjustments, and the non-GAAP financial measures that are derived from them, provide supplemental information to analyze our operations between periods and over time. We find this especially useful when reviewing pro forma results of operations, which include large non-cash amortizations of intangible assets from acquisitions and stock-based compensation. Investors should consider our non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.

About Quad M Solutions, Inc.

Quad M Solutions, Inc., is a public holding company that offers self-funded health plans, staffing services, HR-human resources, payroll services, retirement, supplemental and workers compensation insurance to small and mid-sized group employers with 1-500 employees, and to the exploding essential worker "Gig Economy," a labor market that is characterized by the prevalence of short-term contracts or freelance work, not permanent jobs. The company's four subsidiaries, NuAxess 2, Inc., PrimeAxess, Inc., OpenAxess, Inc. and PrimeAxess 2, LLC are important in conveying who we are and what we do.

We strive to provide those employers and individuals the right tools to be able to manage and control all the facets in their healthcare experience and their eventual health outcomes. Prevention, wellness, and cures have become part of our corporate mission to individuals who want to manage and control their short and long-term healthcare needs.

Our self-insured programs are consumer-driven and technology-leveraged and, by itself, self-insurance is affordable, transparent and responsive to the healthcare and retirement needs of employees who are looking for higher quality benefits, integrated health information and better medical provider access and outcomes.

For additional information, please visit: QuadMSolutions.com and NuAxess.com.

Forward-looking Statements:

The statements contained herein that are not historical facts are forward-looking statements within the meaning of the federal securities laws (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). You can identify such forward-looking statements by the words "expects," "intends," "plans," "projects," "believes," "estimates," "likely," "possibly," "probably," "goal," "opportunity," "objective," "target," "assume," "outlook," "guidance," "predicts," "appears," "indicator" and similar expressions. Forward-looking statements involve a number of risks and uncertainties. In the normal course of business, Quad M Solutions, in an effort to help keep our stockholders and the public informed about our operations, may from time to time issue such forward-looking statements, either orally or in writing. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, or projections involving anticipated revenues, earnings, profits, pricing, operating expenses or other aspects of operating results. We base the forward-looking statements on our expectations, estimates, and projections at the time such statements are made. These statements are not guarantees of future performance and involve risks and uncertainties that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. The actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements.

Corporate Contact:

Pat Dileo
CEO, Chairman, Quad M Solutions, Inc.
p732-423-5520
p844-NuAxess

Investors:

IR@QuadMsolutions.com

SOURCE: Quad M Solutions, Inc.



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