Mednow Reports Q1 2022 Financial Results and Operational Milestones
- Q1/22 revenue increased over 4.5x quarter-over-quarter, and more than 13.5x year-over-year;
- The combination of the announced acquisitions of Liver Specialty Group, InfusiCare Canada, and Medvisit’s aggregate revenue for their last fiscal years was approximately C$33.6M and C$3.3M in total gross profit;
- Mednow expects to achieve nationwide service throughout all of Canada by mid calendar year 2022;
- In November, Mednow entered two partnerships; acquired the exclusive Canadian distribution rights for genetic testing from TruDiagnosticTM and closed an investment with Doko Medical by way of convertible debenture.
Toronto, ON. (December 20th, 2021) – 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 October 31st, 2021 (“Q1 2022”). Mednow’s Financial Statements and Management, Discussion & Analysis are available on sedar.com and on the Company’s website, https://investors.mednow.ca.
“I am extremely proud of our achievements just nine months into becoming a public company, and our growth trajectory is on-track as we continue to build out our digital pharmacies and interdisciplinary model of care across Canada” said Karim Nassar, Chief Executive Officer at Mednow. “To date, we currently service more than half of the population of Canada and expect to achieve nationwide status by the first half of calendar 2022. We have continued our rapid expansion, with growth through the launch of our digital pharmacies and telemedicine services, the continuation of our efforts to increase patient acquisition en masse through our institutional business, Mednow for Business, and agreements to acquire two specialty pharmacies. We have also entered into partnerships with mental health and genetic testing companies and have an interest in the U.S. market through our investment with Doko Medical. Mednow is in a favorable position to continue to grow and implement our strategic plan with plenty of runway, given our cash balance of approximately C$23M and no debt on the balance sheet.”
Key M&A, Partnerships and Milestones During and Subsequent to Q1 2022:
- Key Acquisitions
- On December 17, 2021, Mednow entered an agreement to acquire London Pharmacare Inc. and Liver Care Canada Inc. (“Liver Specialty Group”), for an aggregate cash payment of C$650,000 and and two subsequent earn-out payments in the amount of 0.1x of the revenue generated by Liver Specialty Group in each of its 2022 and 2023 financial years. Liver Specialty Group generated an aggregate of C$21.3M in revenue and C$2.1M in gross profit in their last fiscal year. Liver Specialty Group focuses on the management of hepatology.
- Mednow acquired specialty pharmacy InfusiCare Canada Inc. (“InfusiCare”) on November 18, 2021, for a cash payment of C$1.85M, which is expected to bolster the Company’s expertise in biologic drugs, the fastest-growing class of drugs in the pharmaceutical industry. Annualized revenue of InfusiCare was C$9.3M and C$400,000 gross profit in its latest fiscal year.
- On August 5, 2021, Mednow acquired Medvisit, a business that provides in-home doctor and patient consultations in Ontario, for C$1.3M in cash. Medvisit has approximately 30,000 patient home visits per year and over 400,000 patients serviced since inception. Annualized revenue of Medvisit was C$3M and C$790,000
- In October 2021, Mednow acquired 100% interest in “Mednow Pharmacy Inc.” (“Mednow West”). The walk-in and online pharmacy is open for business, operating under the trade name Mednow Pharmacy, and services the province of British Columbia, providing same-day delivery services to the Greater Vancouver Area and surrounding areas.
- Key Investments
- On November 24, 2021, Mednow closed a C$500,000 investment in Doko Medical Inc. (“Doko Medical”) by way of convertible debenture. If the convertible debenture is converted to equity, this would equate to a 2.8% equity interest at a C$17.5M pre-money valuation. Doko Medical is a virtual healthcare provider operating across the U.S. currently servicing 38 states; it has over 100 physicians and health care workers engaged over its platform.
- Mednow increased its equity interest in Life Support Mental Health (LSMH) to 12.3% from 10.5% in October 2021, with a follow-on investment of C$250,000. In Q1, LSMH entered a partnership with a major Canadian pharmacy chain, to provide its clients access to LSMH’s Mental Health Check, reinforcing Mednow’s position that offering holistic services provides greater avenues to assist patients.
- On November 12, 2021, Mednow acquired the License and Exclusive Distribution Rights of TruDiagnostic™ for a two-year term and a cash payment of US$150,000 to expand the Company’s holistic healthcare offerings on its digital platform. Mednow’s customers are expected to be able to order this epigenetic test in the first calendar quarter of 2022.
- Operational Milestones
- Mednow launched Mednow Virtual Care in September 2021, a proprietary platform to provide virtual care and telemedicine services, facilitated through the Mednow web application and mobile application. Mednow Virtual Care is currently available in the province of Ontario and expects to expand its coverage to serve patients across Canada in calendar 2022.
- Mednow continues to target large institutional contracts through its Mednow For Business division (“MFB”). MFB has been successfully executing with current broker channel partners and has received commitments from individual plan sponsors and companies to retain Mednow as their preferred pharmacy to support their employees.
- In September 2021, Mednow received regulatory approvals from the Nova Scotia College of Pharmacists and opened for business under the trade name Mednow Pharmacy. The pharmacy services the province of Nova Scotia and can fill orders from walk-in patients as well as online orders. Mednow Pharmacy provides same-day delivery services to Halifax and surrounding areas.
Summary of Financial Results
Normal Course Issuer Bid Update
As of October 31, 2021, the Company purchased and canceled a life-to-date total of 309,100 common shares for C$865,955 of cash consideration. The life-to-date weighted average cost of the canceled shares totaled C$455,233resulting in a loss on cancellation of C$410,821 allocated to the deficit. The Company did not purchase common shares during the period ended October 31, 2021.
Mednow continues to have a first-mover advantage in the digital pharmacy market, as it completes its technological and logistical infrastructure. During the next 12 months, the Company is on course to build and open retail pharmacies in the provinces of Manitoba, Alberta and Quebec, and expects to acquire a pharmacy based in Toronto, from related parties of Mednow. Mednow expects to own and operate brick-and-mortar retail pharmacies in these provinces across Canada, which will allow the Company to further develop brand presence, serve walk-in patients as well as serve the majority of orders through home delivery of medications ordered via the web and mobile applications. Its recent acquisitions and partnerships have increased its holistic offering and positions itself to be a leader, providing best-in-class service to every person living in Canada.
About Mednow Inc.
Mednow is a healthcare technology company offering virtual access with exceptional care. Designed with access and quality care in mind, Mednow.ca provides virtual pharmacy and telemedicine services, as well as doctor home visits, with convenience and through an interdisciplinary approach to healthcare that is focused on the patient experience. Mednow’s services include free at-home delivery of medications, a user-friendly interface for easy upload, transfer, and refill of prescriptions, access to healthcare professionals through an intuitive chat experience, a specialized PillSmart™ system that packages prescriptions, and vitamins by date and time, and doctor consultations.
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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 statement that the Company expects to achieve nationwide status by the first half of calendar 2022, Mednow is in a favorable position to continue to grow and implement its strategic plan, Mednow’s customers are expected to be able to order the epigenetic test in calendar first quarter of 2022, the acquisition of InfusiCare bolstering the Company’s expertise in biologic drugs and expanding Mednow’s logistical infrastructure in Southwestern Ontario, how the proceeds of the Doko Medical investment are expected to be used by Doko Medical, Mednow’s strategic investment in Doko Medical fueling Doko Medical’s future growth, that the acquisition of Liver Specialty Group will complete as anticipated by management, the Company’s 12 month plans, including building and opening retail pharmacies in the provinces of Manitoba, Alberta and Quebec, the acquisition of a pharmacy based in Toronto, Mednow owning and operating brick-and-mortar retail pharmacies in three provinces across Canada which will further develop brand presence, serve walk-in patients as well as serve the majority of orders through home delivery of medications ordered via the web and mobile applications and Mednow positioned as a leader providing best-in-class service to every person living in Canada are forward-looking statements and contain 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 is in a favorable position to continue to grow, the Company being able to implement its strategic plans, the acquisition of Liver Specialty Group, the Company will receive the required corporate and regulatory approvals, including TSX Venture Exchange approval for the acquisition of Liver Specialty Group, Mednow will expand its infrastructure in Southwestern Ontario, the acquisition of InfusiCare will bolster the Company’s expertise in biological drugs, how the proceeds of the Doko Medical investment are expected to be used by Doko Medical, Mednow’s strategic investment in Doko Medical will fuel Doko Medical’s future growth, Mednow achieving its 12 month plans, including building and opening retail pharmacies in the provinces of Manitoba, Alberta and Quebec, the acquisition of a pharmacy based in Toronto, Mednow owning and operating brick-and-mortar retail pharmacies in three provinces across Canada. 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, that the acquisition of Liver Specialty Group will not complete as anticipated by management, the Company does not receive the required corporate and regulatory approvals, including TSX Venture Exchange approval, that the Company will not be able to implement its strategic plans, the acquisition of InfusiCare will not bolster the company’s expertise in biological drugs, the Company will not expand its logistical infrastructure in Southwestern Ontario, Doko Medical will not use the proceeds from the Doko Medical investment as anticipated, the Company will not achieve its 12 month plans, including building and opening retail pharmacies in the provinces of Manitoba, Alberta and Quebec, acquiring a pharmacy based in Toronto and owning and operating brick-and-mortar retail pharmacies in three provinces across Canada. 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.