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QHR Releases First Quarter 2007 Financial Results

Monday, May 28, 2007

May 28, 2007 (QHR - TSX Venture Exchange) Mr. Al Hildebrandt, President and CEO of the Company, announces that the Company has released its interim financial statements for the three months ended March 31, 2007. The Company reports revenue of $1,289,951 for the three months ended March 31, 2007 and a profit of $17,563 for the first quarter.

Financial Highlights for the First Quarter 2007

• The Company grew its revenue to $1,289,951 for the three months ended March 31, 2007 compared with $943,480 for the same period in 2006 - growth of 37 %.
• EBITDA recovers to $130,475 for the first quarter of 2007 compared to a loss of $254,104 for the same period in 2006 - a $384,579 turnaround from the prior year.
• Profits for the first quarter were $17,563 compared to a loss of $349,048 - a $366,611 turnaround from the prior year.
• Total assets recover by 88% from year-end 2006 to $3,425,106 at March 31, 2007.
• The Company's operations have been profitable since the third quarter of 2006.
• The Company has generated $261,064 of net earnings over the last three reported quarters.
• Cash flows from operations were sufficient to maintain financial health during the first quarter of 2007.
• Financial health improved dramatically during the first quarter through internal resources.
• At March 31, 2007 cash on deposit was $447,892 up from $48,182 at year-end.
• At March 31, 2007 accounts receivables to be collected were in the amount of $1,979,877 up from $860,469 at year-end.
• New business received and billed in the first three months of 2007 grew to $2,684,192 with a deferred revenue balance to be recognized in subsequent periods in the amount of $2,626,628 at March 31, 2007, up from $250,416 as of year-end.
• Annual recurring revenue from operations reached $220,000 per month or 50% of overall anticipated annual expenditures by the end of March 31, 2007.

The Company invested $303,897 in sales and marketing activities for Quadrant HR™ and Accuro™ EMR during the quarter ended March 31, 2007 compared to $260,881 in 2006. The increase is due to the addition of marketing staff, Web Based marketing tools and increases in sales activity. The Company is focused on longterm annual recurring revenue that has a higher front end marketing cost to establish.

Service delivery expenses for the quarter ended March 31, 2007 increased marginally to $387,407 compared to $344,596 for 2006. These expenses include the cost of software implementation, training and support for both Quadrant HR™ and Accuro™ EMR. These costs are variable as this cost centre serviced the increase in revenue during the quarter.

Administrative expenses for the quarter ended March 31, 2007 decreased to $257,039 compared to $310,666 for 2006. Administration costs have stabilized and now fully reflect the regulatory requirements of the corporate governance of a public company.

Product development expenditures for the quarter ended March 31, 2007 decreased to $211,133 compared to $281,441 for 2006. Costs associated with new product development and the maintenance of Quadrant HR™ and Accuro™ EMR are expensed as incurred. Our markets are highly competitive and these expenditures continue to be made for ongoing improvements to Quadrant HR™ and Accuro™ EMR to ensure customer value, acceptance and adoption.

Total assets increased dramatically to $3,425,106 at March 31, 2007 compared to $1,819,943 at December 31, 2006 mainly due to annual recurring product support billings and new customer business. Shareholders' equity stood at a deficit of $243,291 at March 31, 2007 compared to $260,854 at December 31, 2006.

The Company had cash on deposit of $447,892; accounts receivable in the amount of $1,979,877; and $191,110 in prepaid expenses and deposits for a total current asset position of $2,618,879 - a 161% turnaround from December 31, 2006. QHR also has long-term cash commitments from several customers recorded as long-term receivables. The non-current balance of these receivables stood at $186,966 at March 31, 2007.

The Company had a working capital deficiency of $961,552 at March 31, 2007. The working capital deficiency includes a $250,000 shareholder loan and $2,626,628 of deferred revenue that will be satisfied through the delivery of products and services in future periods. No additional corporate resources are required to fulfill the
delivery of these products and services. Management calculates its adjusted working capital for internal operational purposes as current assets less current liabilities before deferred revenue. At March 31, 2007, this adjusted working capital amount was $1,657,327, up from $250,416 at December 31, 2006.

Management believes that the reported financial results are indicative of a developing software company that is using marketing initiatives to educate potential customers to the merits of the Company's products and investing heavily in product development.

Market opportunities and conditions remain favourable. The Company has recorded earnings of $261,064 over the last nine months of operations ending March 31, 2007 and the business momentum appears to be continuing. QHR must still endure the unpredictability of lengthy sales cycles for Quadrant HR™ and slow start-up adoption rate for Accuro™ EMR due to government processes. Management believes that its recurring annual revenue model is making healthy progress toward reliable long-term profitability.

For a more complete business and financial profile of the Company, management encourages interested parties to visit the Company's website, www.QHRtechnologies.com.

On behalf of the Board of Directors

Al Hildebrandt
President & Chief Executive Officer

Legal Notice Regarding Forward Looking Statements

This news release contains "forward looking statements" within the meaning of applicable Canadian securities legislation. Forwardlooking statements are indicated expectations or intentions. Forward-looking statements included in this news release include that "Management believes that its recurring annual revenue model is making healthy progress toward reliable long-term profitability". Results from operations in any given period are not necessarily indicative of results to be expected in future periods. QHR is a technology business development enterprise where investment; various trends and factors in the marketplace; and product enhancements must be carefully managed to achieve long-term revenue growth and profitability. These statements are subject to risks that may cause the actual results to be materially different in future periods from those expressed or implied by such forward looking statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Further risk information on the Company is available at www.sedar.com.

For further information, please contact:

Al Hildebrandt at (250) 979-1701
ahildebrandt@QHRtechnologies.com

Investor Relations - Tangent Mgmt. 1-866-345-0115
info@tangentmanagementcorp.com

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© 2007, QHR Technologies Inc.

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