- Q4/22 revenue increased over 11% quarter-over-quarter, and more
than 5,700% year-over-year;
- Mednow patient count increased quarter over quarter, growing by
more than 35% to ~31,000 in Q4 versus ~23,000 in Q3;
- Achieved significant cost savings in the August to October 2022
period, to reduce cash burn and streamline operations;
- New business partnerships signed, including Mednow’s
partnership with Aya
Mednow Inc. (“Mednow'' or the “Company”)
(TSXV:MNOW), Canada’s on-demand virtual pharmacy, is pleased to
announce it has released its financial results for the period
ending July 31th, 2022 (“Q4 2022”). Mednow’s Financial
Statements and Management, Discussion & Analysis are available
on sedar.com and on the Company’s website,
https://investors.mednow.ca.
Key M&A, Partnerships and Milestones During and
Subsequent to Q4 2022:
Key Financials
- Revenue increased by 11% quarter-over-quarter, to $7,206,664
during the three months period ended July 31, 2022, driven
primarily by sales from the Company's retail pharmacy operating
segment.
- Retail pharmacies based in British Columbia, Manitoba, Ontario
and Nova Scotia collectively generated revenue of $6,698,297, as
compared to $0 in the prior year comparative period.
- Revenue generated by doctor services was $482,366 as compared
to $0 in the prior year comparative period.
- Gross margin for the quarter increased 262% year-over-year to
$449,003, as compared $124,200 in the prior year comparative
period.
- EBITDA for the year was a loss of $13,319,073, as compared to a
loss of $3,753,496 in the prior year comparative period,
representing a decrease in EBITDA of $9,565,577 compared to the
prior comparative period.
- The change is primarily driven by increased corporate costs,
such as increased headcount, technology development and marketing
as the Company has continued to build out its internal teams in
order to scale and grow its businesses.
- Adjusted EBITDA for the quarter was a loss of $4,614,122, as
compared to a loss of $2,203,582 in the prior year comparative
period, representing a decrease in adjusted EBITDA of $2,410,540.
- Adjusted EBITDA has been adjusted for certain items.
2022 operational milestones
In addition to these strong and forecasted results, it is also
important to understand the long-term potential of the national
digital pharmacy distribution network that has been established by
the company pursuant to the following:
- Patient Growth: Mednow patient count increased
significantly quarter over quarter, growing by approximately 35% to
~31,000 in Q4 versus ~23,000 in Q3.
- Pharmacy Licenses: 9 Provincially licensed pharmacies,
allowing Mednow to ship to Canadians from coast-to-coast.
- Investment in Technology: Investing in an area the
pharmacy industry desperately needs, Mednow has recruited more top
talent. This is the team that builds the stable, scalable, secure
and proprietary Mednow CRM and patient app. The Mednow app makes it
easy to manage prescriptions and provides patients with instant
access to pharmacists, nurse practitioners as well as
non-prescription product shopping. Built for a virtual pharmacy
environment it also coordinates delivery and allows Mednow’s cloud
based contact center to manage relationships with patients, payors
and prescribers.
- Acquired Medvisit: Canada’s largest and most established
doctor home visit organization, serving the GTA with “house call”
doctor care.
- Specialty pharmacy acquisitions: Established a
nationwide specialty pharmacy preferred provider network offering
to address this fastest growing drug category by dollars spent.
High barriers to entry means few competitors and with Mednow’s
“pharmacy of the future” infrastructure, we believe we have a major
competitive advantage.
- Medical clinic network: By solving administrative
challenges and offering clear clinical value, Mednow is positioned
as the ideal pharmacy partner for medical clinics. Partnering with
these clinics offers a catalyst for Mednow’s growth.
- Mednow for Business (MFB): Partnering as the much-needed
digital pharmacy solution for benefits providers and other
organizations offers mutual benefits and allows Mednow to add
patients at scale. MFB has secured several partnerships in this
vein with more in the late stages, all the while building and
working the pipeline that brings these valuable deals to
fruition.
- Established product-market fit: Mednow has earned and
maintains an exceptionally rare perfect 5-star rating on Google.
Even skimming the reviews shows that we’re solving real problems
and changing what Canadians expect from their pharmacy. Customer
service is our obsession and in a market as price-regulated as
pharmacy, personal customer relationships make the difference.
Mednow For Business (MFB)
MFB has demonstrated strong traction already, with access to
over 500,000 lives. MFB is an enterprise pharmacy solution suited
to employers to better manage their drug benefit expenditure, which
normally represents up to 80% of the total benefits expenditure
made by employers. In addition, MFB also offers wellness and
digital health programs to their employees, that includes a broad
spectrum of solutions including digital pharmacy, nutritional
services, personalized vitamins and supplements programs, and a
wellness store which includes a broad array of health-related
products.
To date, MFB has formed strategic channel partner relationships
with PACE Consulting Benefits and Pensions Ltd., PACE Consulting
MGA Services Inc. and Sterling Capital Brokers. MFB has launched
and onboarded over 450 employers, including, but not limited to
Tucows, Consensus Cloud Solutions, and Arista Networks.
Furthermore, MFB has a healthy pipeline of groups which is expected
to be launched in the coming months, and is working with multiple
net new partners.
Summary of Financial Results
Below is a summary of each operating segment's performance for
the three month period ended July 31, 2022 and 2021, and for the
year ended July 31, 2022 and 2021.
Three months ended July
31,
2022
2021
Retail Pharmacies
Doctor Services
Mednow Inc.
Total
Mednow Inc.
Revenue
$ 6,698,297
$ 482,366
$ 26,004
$ 7,206,664
$ 124,200
Other amounts in loss
8,982,346
720,011
11,358,813
21,061,170
3,974,386
Net loss
$ (2,284,049)
$ (237,645)
$ (11,332,809)
$ (13,854,503)
$ (3,850,186)
Source: Mednow’s MD&A as of
November 28, 2022
For the year ended July
31,
2022
2021
Retail Pharmacies
Doctor Services
Mednow Inc.
Total
Mednow Inc.
Revenue
$ 14,319,421
$ 2,069,551
$ 249,698
$16,638,670
$ 414,000
Other amounts in loss
17,192,498
2,608,623
26,393,449
46,194,570
9,367,835
Net loss
$ (2,873,077)
$ (539,072)
$ (26,143,751))
$ (29,555,900)
$ (8,953,835)
Normal Course Issuer Bid Update
As at July 31, 2022, the Company purchased and canceled a life
to date total of 309,100 common shares for $865,955 of cash
consideration. The life to date weighted average cost of the
canceled shares totaled $455,233 resulting in a loss on
cancellation of $410,822 allocated to the deficit. During the year
ended July 31, 2022, the Company did not purchase and cancel common
shares.
DEFINITIONS OF CERTAIN NON-IFRS FINANCIAL
MEASURES
This MD&A uses certain non-IFRS financial measures which are
defined below. Non-IFRS financial measures are not standardized
financial measures under IFRS. As such, these measures may not be
comparable to similar financial measures that are disclosed by
other companies. These measures include “EBITDA” and “Adjusted
EBITDA”. These measures are provided as additional information that
is disclosed to provide further insight into the Company's results
of operations from management's perspective. These measures should
not be reviewed and assessed as a substitute for financial
information reported under IFRS. A reconciliation of the non-IFRS
measures to the IFRS measure is in the section "Selected Financial
Information".
EBITDA and Adjusted EBITDA
EBITDA represents net loss and comprehensive loss for the period
before interest expense, income taxes, and depreciation and
amortization expenses. Adjusted EBITDA represents net loss and
comprehensive loss for the period before interest expense, income
taxes, depreciation and amortization expenses, loss on investment
in equity securities, share-based compensation expense, acquisition
costs incurred, asset impairment charges, the fair value
remeasurement of the note receivable from Doko and severance
expenses. These adjustments to calculate the non-IFRS measures of
EBITDA and Adjusted EBITDA are for items that are not necessarily
reflective of the Company’s underlying operating performance. As
there is no generally accepted or standard method of calculating
EBITDA, these measures are not necessarily comparable to similarly
titled measures reported by other issuers. EBITDA and Adjusted
EBITDA are presented as management believes it is a useful
indicator of the Company’s relative financial performance. These
measures should not be considered by an investor as an alternative
to net income or other IFRS financial measures as determined in
accordance with IFRS.
The Company presents EBITDA and Adjusted EBITDA to indicate
ongoing financial performance from period to period, including
comparative prior year periods. The Company has disclosed certain
non-IFRS measures on this report, including the disclosure of
non-IFRS financial measures for prior year comparative periods.
Reconciliation of Non-IFRS Financial Measures
The following are reconciliations of net loss and comprehensive
loss to EBITDA. The adjustments include:
- The amortization and depreciation expenses of intangible
assets, fixed assets, and the right-of-use assets of the
Company.
- The net interest expenses, which primarily includes interest
expense on the Company's credit facility and interest expense and
interest income recorded in accordance with IFRS 16.
- The underlying income taxes recorded.
The following are reconciliations of EBITDA to Adjusted EBITDA.
The adjustments include:
- The loss on investment in equity securities in connection with
the Company's investment in Life Support.
- The share-based compensation expense recorded by the Company in
connection with the stock option plan.
- The acquisition costs incurred by the Company.
- The asset impairment charges recorded by the Company as part of
its annual impairment test of goodwill and intangible assets.
- The fair value remeasurement of the promissory note with
Doko.
- The severance expenses incurred by the Company.
In prior periods, Adjusted EBITDA represented net loss and
comprehensive loss for the period before interest expense, income
taxes, depreciation and amortization expenses, loss on investment
in equity securities, share-based compensation expense, and
acquisition costs incurred. In the current period, the composition
of Adjusted EBITDA has changed. It now excludes the following
additional items: asset impairment charges, the fair value
remeasurement of the note receivable from Doko and severance
expenses.
The exclusion of certain items in calculating the non-IFRS
measures does not imply that they are non-recurring, infrequent,
unusual or not useful to investors.
About Mednow Inc.
Mednow (TSXV: MNOW) (OTCQX:MDNWF) is a healthcare technology
company offering virtual access with a high-standard of care.
Designed with accessibility and quality of care in mind, Mednow
provides virtual pharmacy and telemedicine services as well as
doctor home visits through an interdisciplinary approach to
healthcare that is focused on the patient experience. Mednow’s
services include free at-home delivery of medications, doctor
consultations, a user-friendly interface for easy upload, transfer,
and refill of prescriptions, access to healthcare professionals
through an intuitive chat experience and the specialized PillSmart™
system that packages prescriptions in easy to use daily dose packs,
each labelled with the date and time of the next dose.
To learn more, follow Mednow on Facebook, Twitter,
LinkedIn, and Instagram, or visit our
website at www.mednow.ca/.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements:
This release includes certain statements and information that
may constitute forward-looking information within the meaning of
applicable Canadian securities laws. All statements in this news
release, other than statements of historical facts, including
statements regarding future estimates, plans, objectives, timing,
assumptions or expectations of future performance, including
without limitation, the Company’s competitive advantage in the
pharmacy industry and the launch of additional strategic channel
partner relationships, are forward-looking statement and contains
forward-looking information.
Generally, forward-looking statements and information can be
identified by the use of forward-looking terminology such as
“intends” or “anticipates”, or variations of such words and phrases
or statements that certain actions, events or results “may”,
“could”, “should”, “would” or “occur”. Forward-looking statements
are based on certain material assumptions and analysis made by the
Company and the opinions and estimates of management as of the date
of this press release, including that the Company will be
successful in the deployment of its resources and personnel, the
Company’s operations will not be adversely impacted by COVID-19,
the availability of financing, the cost of planned expansion, third
party contractors and supplies and governmental and other approvals
required to conduct the Company’s planned activities will be
available on reasonable terms and in a timely manner and that
general business and economic conditions will not change in a
material adverse manner, the Company will be able to maintain its
competitive advantage in the pharmacy industry with its “pharmacy
of the future infrastructure”, the Company will be able to execute
on additional strategic channel partner relationships and the
Company will be successful in its strategic objectives, including
the integration of existing business acquisitions and the pursuit
of other investments and acquisitions.
These forward-looking statements are subject to known and
unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of
the Company to be materially different from those expressed or
implied by such forward-looking statements or forward-looking
information. Important factors that may cause actual results to
vary, include, without limitation, changes in market conditions,
fluctuations in the currency markets, changes in national and local
governments, legislation, taxation, controls, regulations, and
political or economic developments in Canada or other countries in
which the Company may carry on business in the future; risks
relating to the credit worthiness or financial condition of
suppliers and other parties with whom the Company does business;
inadequate insurance or inability to obtain insurance to cover
these risks; availability and increasing costs associated with
operational inputs and labor; business opportunities that may be
presented to, or pursued by the Company; the Company’s ability to
successfully integrate acquisitions; the ongoing global economic
impacts of the COVID 19 pandemic and the war in eastern Europe, and
the risk factors discussed or referred to in the Company’s
disclosure documents under the Company’s profile at
www.sedar.com
Although management of the Company has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking statements or
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements and
forward-looking information. Readers are cautioned that reliance on
such information may not be appropriate for other purposes. The
Company does not undertake to update any forward-looking statement,
forward-looking information or financial out-look that are
incorporated by reference herein, except in accordance with
applicable securities laws.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221129005456/en/
Investor Relations Contact:
Benjamin Ferdinand, Chief Financial Officer ir@mednow.ca
1.855.686.6300
Mednow (TSXV:MNOW)
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