QHSLab, Inc. Annual Report: A Performance Summary

I’ve put together this guide to help you understand how QHSLab, Inc. (ticker: USAQ) performed this year. My goal is to explain their financial filings in plain English so you can decide if this company fits your investment goals.

1. What does this company do?

Think of QHSLab as a digital assistant for independent primary care doctors. They offer two main services:

• A Digital Platform: Software that helps doctors screen patients for behavioral health issues and manage care outside the office. Doctors pay a monthly subscription fee for every patient enrolled, creating steady, recurring income.
• AllergiEnd®: A system that lets regular doctors perform allergy testing in their own offices instead of sending patients to specialists. QHSLab sells the initial equipment and makes ongoing money by selling the necessary testing kits and supplies.

2. Financial performance: A mixed bag

QHSLab is a small company, and their financial results tell two different stories.

• The Good News: They turned a profit of about $457,000 in 2025, up from a loss of $259,000 in 2024.
• The Catch: That profit didn't come entirely from sales. About $666,000 came from a one-time deal where they negotiated to reduce their debt. Without this, the company would have lost roughly $209,000 from its actual operations.
• Revenue Growth: Revenue grew from $2.13 million in 2024 to $2.69 million in 2025—a 26.3% increase. This growth came mostly from more doctors using the AllergiEnd® system.

3. The "Going Concern" Warning

Their accountants have issued a "going concern" warning. This means there is real uncertainty about whether the company can stay in business long-term. Because they have historically lost money and rely on loans, they currently owe more in the short term than they have in cash, leaving them with little room to fund daily operations.

4. Key risks to watch

• Regulatory Hurdles: Healthcare is heavily regulated. If the FDA decides to reclassify their software or kits as "medical devices," the company will face much higher costs and potential delays.
• Internal Controls: The company admitted to "material weaknesses" in their accounting. They lack enough staff to properly separate financial duties, which increases the risk of errors or misuse of assets.
• Supply Chain: Half of their revenue comes from AllergiEnd®. They rely on a few third-party manufacturers for their kits. If these suppliers have delays or cancel contracts, the company’s revenue could drop significantly.
• Debt and Dilution: They still owe about $200,000. If they cannot pay this from their own cash, they may issue more shares to raise money. This would reduce your ownership percentage and could lower the stock price.

5. What’s next?

QHSLab is focusing on small, independent doctors that larger tech firms often ignore. Their future depends on growing their subscriber base enough to cover their costs. Until they reach that break-even point, they must continue to secure new financing to stay afloat.

Investor Takeaway: When looking at QHSLab, consider whether you believe their growth in the AllergiEnd® business can eventually outpace their operating costs. Because of the "going concern" warning and the reliance on one-time debt adjustments to show a profit, this is a high-risk situation where the company's ability to manage its cash flow is just as important as its ability to sell its products.