QHSLab (USAQ) Debt-to-Equity & Note Maturity Extension Impact Analysis

Based on brokerage API data and online search information, QHSLab Inc. (OTCQB: USAQ) entered into a convertible note modification and partial conversion agreement with Alex Mirakian MD on January 2, 2026. Under this agreement, $126,548 of principal and interest was converted into 421,827 common shares at a conversion price of $0.30 per share, and the maturity date of the remaining $20,000 note was extended to December 31, 2026 [1]. The following analysis is conducted from two dimensions: minority shareholder equity and the company’s financial health.

Based on the company’s market capitalization ($9.81 million) and current stock price ($0.87) from brokerage API data:

• Estimated outstanding shares before conversion: ~11,275,862
• Outstanding shares after conversion: ~11,697,689, with an increase of 421,827 shares
• Dilution rate: ~3.6%
• This conversion is relatively mild and does not cause extreme dilution to existing shareholders [0]

• Conversion price is $0.30 per share; current market price is $0.87 (as of closing on January 2, 2026), with a price difference of 190%
• For note holders, based on the current price, the immediately realized value of the obtained shares is approximately $366,989, representing an approximate 190% book gain compared to the conversion cost ($126,548) [0][1]
• For the company, settling debt at a price significantly lower than the current market price helps improve its capital structure and cash flow, but it also implies a certain degree of potential value dilution for original shareholders

• Strong short-term stock performance: +43.59% in 1 day, +112.20% in 5 days, +89.33% in 1 month, +335.00% in 3 months [0]
• From a technical analysis perspective, it is currently in an “UPTREND (pending confirmation)”, with MACD leaning bullish, KDJ and RSI indicating overbought risks; support level is around $0.41, resistance level around $0.63, and next target level around $0.69 [0]
• Combining market sentiment and capital inflows, the market holds an overall positive attitude towards this capital restructuring, but short-term technical corrections and increased volatility need to be watched [0]

• The total amount of this restructuring is $146,548, of which 86.4% ($126,548) was converted into equity, and the remaining 13.6% ($20,000) had its maturity extended to December 31, 2026 [0][1]
• Referring to the company’s retired interest-bearing notes of approximately $1.4 million (with an 18% interest rate) in November 2025, this conversion is expected to save about $22,779 in annual interest expenses (estimated at 18%), significantly improving cash flow and reducing debt burden [0][1]
• Combined with the $500,000 private placement completed earlier (on December 29, 2025), the company’s capital structure is cleaner, providing greater financial flexibility for operations in the next 1-2 years [1]

• Current current ratio is 0.18 and quick ratio is 0.17, both at very low levels, indicating high short-term liquidity risk [0]
• Although this debt-to-equity conversion does not directly increase the current ratio (reducing equal current liabilities and increasing equal equity), it buys the company more time to improve operating cash flow and financing conditions by reducing interest expenses and extending maturity dates
• Without significantly expanding equity dilution, the company needs to substantially improve liquidity through revenue growth and cost control

• Earnings per share (TTM) is -$0.04, net profit margin is -14.80%, and operating profit margin is 6.46% (indicating that the core business has certain cash-generating capacity, but the company as a whole is still in the investment and loss phase) [0]
• Price-to-earnings ratio (TTM) is -25.38x; the company has not yet achieved sustained profitability, so valuation needs to be mainly based on future revenue growth and the path to profitability [0]
• DCF scenario valuation shows that intrinsic value is significantly lower than the current price under different assumptions, reflecting the impact of high uncertainty and high discount rates [0]
• If revenue growth rate and profit margin can be improved in the future, there is room for revaluation of the stock price; otherwise, continuous losses will limit valuation recovery

• Debt scale is controllable; this dilution is relatively mild (~3.6%) and within an acceptable range
• Reducing interest expenses and extending maturity dates eases short-term repayment pressure, helping to focus resources on business growth and product development
• The recent sharp rise in stock price reflects the market’s positive expectations for the company’s digital medical product line (such as the Q-Cog™ cognitive assessment tool) and improved capital structure [0][1]

• Extremely low liquidity ratio (current ratio of 0.18); if operating cash flow improvement is less than expected, the company still needs frequent financing, which may bring continuous dilution risks
• The company has not yet achieved stable profitability; if revenue growth slows or cost control is ineffective, losses may further expand and drag down valuation
• The stock price has risen sharply in the short term; technical indicators show overbought risks, and there is a possibility of correction and increased volatility [0]

• For minority shareholders, this debt-to-equity conversion and maturity extension is a strategic move of “trading time for space”: exchanging controllable dilution for a longer operating runway and lighter debt burden
• Key tracking indicators include: progress in improving operating cash flow, quarterly revenue and profit trends, whether liquidity ratios are steadily recovering, and the scale and terms of subsequent financing
• It is recommended to continuously monitor the company’s revenue realization and cash flow improvement pace, as well as the dilution intensity and term settings of future financing arrangements

[0] Jinling API Data (including real-time quotes, company overview, financial indicators, technical analysis, valuation scenarios, historical prices, and Python calculation results)

[1] TradingView — “QHSLab Signs Promissory Note Modification and Partial Conversion Agreement With Alex Mirakian MD”
https://www.tradingview.com/news/tradingview:5d8df59bc0ed2:0-qhslab-signs-promissory-note-modification-and-partial-conversion-agreement-with-alex-mirakian-md/

[2] Yahoo Finance — “QHSLab, Inc. (OTCQB:USAQ) Completes $500K Private Placement, Enters 2026 With Clean Capital Structure”
https://finance.yahoo.com/news/qhslab-inc-otcqb-usaq-completes-500k-private-placement-Enters-2026-With-Clean-Capital-Structure.html

[3] Globe Newswire — “QHSLab, Inc. (OTCQB:USAQ) Completes $500K Private Placement, Enters 2026 With Clean Capital Structure”
https://www.globenewswire.com/news-release/2025/12/29/3210915/0/en/QHSLab-Inc-OTCQB-USAQ-Completes-500K-Private-Placement-Enters-2026-With-Clean-Capital-Structure.html