The Company may from time to time make written or oral “forward-looking statements” including statements contained in this report and in other communications by the Company, which are made in good faith pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on our beliefs as well as assumptions made by and information currently available to us. When used in this document, words like “may,” “might,” “will,” “except,” “anticipate,” “believe,” “potential,” and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from our current expectations.
The Company’s revenue, however, in 2019, decreased from its revenue in 2018. This decrease occurred primarily as a result of the acquisition of the Company’s largest account by another account with whom the Company also had a contract, but had not yet had time to implement. In 2018, the Company had existing contracts with two of the nation’s largest clinic chains servicing the interstate commercial trucking industry -- Concentra and U.S. Healthworks (USHW). Although the Company had contractual relationships with both accounts, at the time of the acquisition of USHW by Concentra, the Company’s principal relationship from a revenue perspective was with USHW. Prior to the acquisition, the Company’s national account representatives would regularly visit select USHW clinic facilities. In 2019, we were asked to suspend our visit activities so as to not disrupt Concentra’s efforts to integrate the two corporate cultures into one. The Company immediately ceased these visits and turned its attention to diversifying its client base, focusing more heavily on national labor unions and other third-party payors. The Company’s intent was to broaden its client base while still retaining its existing client base with a now much larger Concentra.
In February 2020, we entered into an exclusive three-year agreement with CoreChoice, a third party payor who added our sleep apnea detection and treatment program to their portfolio of covered programs. CoreChoice has approximately 1 million union members who, along with their dependents, total approximately 2.5 million covered lives. We begin servicing this account in March 2020.
In the first part of 2020, we entered into a three-year, exclusive, worldwide cooperation agreement with Sleep Cycle AB (Sleep Cycle). The Sleep Cycle app is devoted to the single issue of sleep -- how one sleeps, the best time to wake up, snoring, etc. It claims to be the single largest selling app in the world with over 25 million active users. We began working with Sleep Cycle during the latter part of 2019. In January 2020, we began beta testing in select U.S. market areas to determine how to effectively incorporate our SleepMaster Solutions™ program into their database such that we could most accurately identify which of their app users, if tested, would most likely test positive for obstructive sleep apnea (OSA). Although the Beta testing is still in the early stages, 100% of all app users tested so far have tested positive.
Additionally, the Company believes that the integration of USHW into Concentra is essentially complete, and the Company’s revenue from this account has shown a material increase. In the first quarter of 2020, we had an overall increase in sales in January 2020 of almost 74% compared to sales in January 2019; and comparative sales in February 2020 to February 2019 increased over 101%. Overall sales for the period of January-February 2020 compared to 2019 are up an aggregate of 86.41%. This was primarily due to increased patient flow from Concentra clinics. We expect that our relationship with Concentra coupled with the new business relationships established primarily during the third and fourth quarters of 2019 and the first quarter of 2020, and particularly our relationships with certain third-party, union-based payors, will result in a material increase in revenue to the Company in 2020 without a concomitant increase in expenses. The Company believes it has adequately prepared for the anticipated increase in its business and the systems and staffing burden this may place on the Company.
A quantitative summary of our revenues by source category for 2019 and 2018 as follows:
Revenues For the year ended December 31, 2019, were $300,098 compared to revenues of $524,172 for the comparable period ending December 31, 2018.
Travel expense increased by $4,406. Travel was relatively the same between 2018 and 2019.
Payroll related expenses decreased by $29,734. The company had 1 less commissioned sales person for part of the year.
Other Expense decreased by $8,340. Other expense was relatively the same from 2018 to 2019
Subsequent to 2019, we issued $182,000 of promissory notes through April 9, 2020.
Preparation of our consolidated financial statements requires us to make significant estimates and judgments to develop the amounts reflected and disclosed in the consolidated financial statements. On an on-going basis, we evaluate the appropriateness of our estimates and we maintain a thorough process to review the application of our accounting policies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
In February 2016, the FASB issued ASU 2016-02, “Leases,” which significantly changes the accounting for a lessee. Under previous guidance, lessees did not have to record a lease it designated as operating on its balance sheet. Under the new guidance, a lessee must record a liability for lease payments (referred to as the lease liability) and an asset for the right to use the leased asset during the lease term (referred to as the right of use asset) for all leases, regardless of whether they are designated as finance or operating leases. If a lessee has a lease with a term of 12 months of less, it may make an accounting policy election (by leased asset class) not to recognize lease assets or lease liabilities. This election generally requires the lessee to recognize lease expense on a straight-line basis over the lease term. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018 for public entities, not-for-profit entities that have issued (including conduit bond obligors) securities that are traded, listed, or quoted on an exchange or an over-the-counter market, and employee benefit plans that file financial statements with the United States Securities and Exchange Commission (SEC). All other entities must apply the ASU to annual periods beginning after December 15, 2019, and interim periods beginning after December 15, 2020. Any entity may early adopt the ASU. Management has determined this ASU will have an impact on the Company and has implemented this ASU.