Greg Crawford: Yes, absolutely. In that those are things that we’re having internal discussions on now. It’s just all different ways in that, that we can continue in that to serve our patients in that and kind of grow that line of our business in that. That is certainly a strong hold for us, and we expect that to kind of continue well into the future. If anything, with the most recent study that was brought out by one of the largest manufacturers of sleep devices in that is, is the correlation in that was kind of surprising, I guess, you could say, was that patients in that, that were utilizing GLP-1s in that were more likely and more compliant in that on their CPAP or BiPAP device, and they ordered supplies more frequently. So I think that would tell us that people get more health conscious and they want to improve all facets of their life, and that including sleeping better, which leads to a lot of other health conditions as we know.
Operator: The next question comes from Julian Hung with Stifel.
Julian Hung: This is Julian stopping in for Justin today. We’ve noted from looking at some of the insurance companies that they’ve noted that there’s higher utilization of Medicare Advantage and they expect this to continue for the rest of 2024. We were wondering if you’ve seen this and what are maybe some of the implications for the Company going forward?
Greg Crawford: Yes. This is Greg. Thanks, Julian. That’s actually a really good question. And actually that is something that we’ve monitored internally in that as far as looking for patients that have converted over to a Medicare Advantage plan in that from traditional Medicare. And thus far this year, most of that happens in that in the first part of the year here. We haven’t seen anything that’s been materially different than prior years. There are certain parts of the country in that to where you could say there are more patients/customers that have converted over to Medicare Advantage plans. But as a whole, in that throughout the entire organization in that, we haven’t seen any material change.
Julian Hung: Okay. And just a question on the investigative demand. Have you seen any similar cases across the industry? And if so, like what’s been the result in those cases?
Greg Crawford: Yes, absolutely in that. I mean it’s not uncommon in that for a DME company or any health care company in that within the U.S. to see these types of inquiries, especially larger companies. There’s plenty of public information out there in that to kind of see these. I think each one probably takes a path of its own. And I think it’s really important in that to just — the government has not concluded any wrongdoing or anything. And even if there was in that, you still have the opportunity in that to come up with a mutual resolution in that. So — and then even if that can’t be reached in that, we also have the option to appeal. So anything you would likely find out there, if you just Google the CID and DME company-related, you’re probably going to find more settlement type cases there than you are going to find ones that were had — maybe been resolved or they came to a conclusion, nothing was done in that.
So once again in that, we feel very, very confident in that in our internal controls and our billing and compliance. So we’re confident in our practices.
Operator: The next question comes from Stefan Quenneville with Echelon Capital Markets.
Stefan Quenneville: Congrats on the quarter. I wanted to also again probe a bit more on this, Department of Justice. And just maybe get you to help me frame this a bit better. I have looked at a number of those cases and settlements, and I have a budget here in front of me. And what I’m seeing largely is that these things take typically a number of years to occur. And even with much larger companies than you, we’ve seen settlements in the low-to-mid millions of dollars. I think in the 2022 overall numbers, the average settlement for one of these cases is about $6 million. Is that a fair way to frame sort of a worst case scenario? Obviously, like that use case is something to long to, and it did occur, obviously — or allegedly occurred. Is that a reasonable way to look at this? Like they will take a couple of years for this to be settled? Or maybe help me understand like the parameters.
Greg Crawford: Yes. Well, I think based on information that’s been provided in that by our counsel in that, that could be a good judgment of that, but also at the same time in that. I mean these cases once again end up taking legs of their own and go down different paths on that. At this point in that we don’t believe in that there’s been any wrongdoing. And once again, we’re very confident in our billing practices in that. So it’s just really tough to say whether or not it’s going to take years in that, I guess, if they continue to investigate, yes, it could take that long.
Hardik Mehta: And Stefan, this is Hardik again. I’ll just add to what Greg said. I think you’re right in terms of what you see in the public information. We’re only seeing the most part, information around companies that came to some kind of a resolution or some kind of a negative outcome from that. What you’re not seeing is the phase that we are in, right? This is a predetermination phase. So we don’t — they’re probably — what we don’t know is, out of the hundreds of this, that results in one or two that actually reduces the settlement phase and the numbers that you kind of presented, right? In that there is not much of a public information in how many investigations actually led to some kind of a settlement or a number out there. So I just want to point that out, we are still in that phase.
Stefan Quenneville: Yes. I said, obviously, this is more of a worst-case scenario type thing. So I wasn’t trying to imply that, that was going to occur. I guess, I have two sort of follow-up questions. One is what kind of disclosure should we expect about this going forward? Is it going to be on a sort of quarterly basis, we’ll be hearing updates on this? Or — and then finally, maybe — just tied into this, with this going on, is this in any way impacting you guys operationally in terms of looking for different M&A opportunities or things of that nature? Like is it having an operational impact at this point? Or is it still sort of early days and you’re just monitoring it as a part of normal sort of legal issues that pop up over time?
Greg Crawford: Yes, could you repeat the first part of the question?
Stefan Quenneville: The first part is just sort of when would we expect updates on this? Should we expect like ongoing quarterly updates on what’s occurring with this when you report your quarters? Is that reasonable?
Greg Crawford: Okay. Got it. Yes. Yes, absolutely in that. I mean we will report in that, whether it’s on a quarterly basis or things become material in that. We’ve been — have always been very transparent and disclosing in that different regulatory issues that do come up in normal ordinary course and this is a perfect example. And we will continue to update timely in that whether that’s quarterly or as something would happen, it would be done through a PR or something. As far as running the business, no, in that, I mean we are heads down here. We are focused on our strategic plan in that of growing both organic and through inorganic opportunities. And we’re not going to deviate from that. We’ve got a very, very strong balance sheet to go out and execute in that. And once again, we’re very confident in our billing and compliance procedures in that, that we have in place.
Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Crawford for any closing remarks. Please go ahead.
Greg Crawford: All right. Thank you, operator, and thank you all for your participation today. As always, you can find us on the web at www.quipthomemedical.com, where we will be posting a transcript of this call and our updated investor deck. Thank you, and have a great day.
Operator: This concludes today’s conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
