TRxADE HEALTH, Inc. (NASDAQ: MEDS) This autumn 2021 earnings name dated Mar. 28, 2022
Company Individuals:
Howard Doss — Chief Monetary Officer
Suren Ajjarapu — Chief Government Officer
Analysts:
Allen Klee — Maxim Group, LLC — Analyst
Howard Halpern — Taglich Brothers, Inc. — Analyst
Presentation:
Operator
Good afternoon, women and gents. Thanks for standing by. Welcome to TRxADE HEALTH’S Fourth Quarter and Annual 2021 Earnings Convention Name. [Operator Instructions] The earnings press launch accompanying this convention name was issued on the shut of the market in the present day. The Annual Report, which incorporates further data concerning the corporate’s outcomes of operations for the yr ended December 31, 2021 was filed with the SEC earlier in the present day. On our name in the present day is TRxADE HEALTH’s Founder, Chairman and Chief Government Officer, Suren Ajjarapu; and Howard Doss, its Chief Monetary Officer. A replay of this name and webcast will probably be obtainable for the following 30 days within the firm’s web site underneath the NASDAQ MEDS hyperlink. The corporate’s web site additionally contains extra supporting business data.
Right now, I’d like to show the decision over to Howard Doss, the corporate’s Chief Monetary Officer. Howard, the ground is yours.
Howard Doss — Chief Monetary Officer
Thanks, operator and thanks for becoming a member of us in the present day. I’d wish to welcome you to our fourth quarter and annual 2021 monetary outcomes convention name. Our press launch saying our 2021 fourth quarter and annual monetary outcomes was issued after the shut of market in the present day and is posted on our web site. We now have additionally furnished such press launch to the SEC on Kind 8-Okay. Lastly, now we have printed a duplicate of the presentation that accompanies this name and webcast on our web site and furnished such press launch and presentation to the SEC on Kind 8-Okay.
Statements made on this name and webcast embrace forward-looking statements. These statements embrace however should not restricted to our outlook for the corporate and statements that estimate or challenge future outcomes of operations or the efficiency of the corporate together with the potential continued impression of COVID-19 on the corporate’s enterprise and outcomes of operations. These statements communicate solely as of the date hereof and the corporate assumes no obligation to revise any forward-looking statements which may be made in in the present day’s press launch, name or webcast, besides as required by legislation.
These statements don’t assure future efficiency and are topic to dangers, uncertainties and assumptions. Please check with the press launch and the chance elements and paperwork we file with the Securities and Change Fee, together with our most up-to-date Annual Report on Kind 10-Okay and the subsequently filed quarterly experiences on Kind 10-Q for data on dangers, uncertainties and assumptions that will trigger precise outcomes to vary materially from these set forth in such statements. As well as, throughout in the present day’s name and webcast we are going to talk about non-GAAP monetary measures, which we consider are helpful as supplemental measures of TRxADE’s efficiency.
These non-GAAP measures ought to be thought-about along with and never an alternative choice to or in isolation from GAAP outcomes. Yow will discover further disclosures concerning these non-GAAP measures, together with reconciliations with comparable GAAP outcomes on the finish of our earnings press launch. Until in any other case said, all monetary comparisons on this name will probably be to our outcomes for the comparable interval of fiscal 2020. In the course of the question-and-answer portion of in the present day’s name, please restrict your self to no a couple of query and one follow-up.
Right now, I’d like to show the decision over to Suren Ajjarapu, the corporate’s Chief Government Officer. Suren, the ground is yours.
Suren Ajjarapu — Chief Government Officer
Thanks, Howard. We noticed margin enchancment as our income base returned to the core TRxADE Pharmaceutical change platform within the year-end 2021 seeing an anticipated drop-off within the one-time private protecting gear gross sales acknowledged in 2020, which have been pushed by the preliminary onset of the COVID-19 pandemic. Our nationwide footprint continues to develop and now we have relentlessly centered on thrilling new methods to develop proportional pockets share inside our giant rising community of registered customers by higher enabling them to service their respective clients, the top customers additional rising their loyalty to their native retail pharmacy.
Earlier than we do a extra detailed walk-through of our monetary and operational outcomes for the yr 2021 fourth quarter and the yr ended December 31, 2021 for these of you who’re new to the corporate I’d wish to stroll you thru who we’re, how we’re digitalizing the retail pharmacy expertise by means of optimization of drug procurement, prescription journey and affected person engagement. Previous to the launch of TRxADE, acquiring drug cohorts as an impartial pharmacy was a particularly laborious and timing environment friendly course of with no perception or transparency into a good market worth or what others are paying for a similar drug.
Conventional wholesalers would supply unfavorable fee phrases, gradual supply and create a tough conundrum for the roughly 57,900 impartial pharmacies and focused medical clinics nationwide. We recognized this market inefficiency in addition to the unimaginable potential in these impartial pharmacies and clinics, which collectively maintained estimated roughly $67.1 billion in annual buying energy and proceeded to launch TRxADE. We designed owned and operated business-to-business web-based market platform bringing collectively the nation’s impartial pharmacies with an accredited nationwide pharmaceutical provider to supply a uniquely environment friendly and clear shopping for and promoting course of.
Our platform lets impartial pharmacies know that they’re receiving a good worth from competing suppliers on a good fee phrases and supply them subsequent day supply. We consider this radical worth transparency, economic system of scale and competitors amongst our suppliers leads as much as a ten% discount of their pharmacies complete annual drug buy price with a drug degree financial savings of as much as 90% on sure pharmaceutical merchandise. Our platform saves pharmacies from having to manually evaluate costs throughout the distributors saving tons of of hours of pointless labor yearly and eliminating detrimental reimbursement or fulfilling a prescription at a loss.
Our income mannequin is straightforward. Have paid an administrative price of as much as 6% on the shopping for worth on a generic prescription drugs and as much as 1% on branded medicine that go by means of our pharmaceutical platform just like a PayPal or resale-like mannequin. To-date, now we have seen unimaginable success in garnering consideration from impartial pharmacies and clinics nationwide validating our enterprise mannequin. On the finish of 2021, we had over 13,100 plus registered members on our platform with roughly 175 new registered members added within the fourth quarter alone. In February 2022, the corporate introduced the formation with an Change Well being, LLC of a three way partnership, SOSRx LLC, a pharmaceutical platform.
SOSRx will present pharmaceutical producers a single platform to optimize the sale and distribution of their stock on to giant pharmaceutical consumers throughout a number of courses of commerce. SOSRx opens the market to short-dated, over-stock and gradual shifting prescription drugs that may in any other case be topic to destruction. TRxADE anticipate progress on this three way partnership in 2022 as extra progressive producers are anticipated to handle the general public want for enhanced medicine accessibility and dependable provider of cost-effective prescription drugs.
We now have leveraged our vital success because the launch of the aforementioned market platform shifting into an adjoining, complementary enterprise the place we are able to leverage our robust retail pharmacy community and core competency in know-how. These embrace Bonum Well being, our telehealth subsidiary which for the yr ended 2021 had roughly 22,000 software downloads with an roughly 10.9% affected person registration fee. Nevertheless, lots of {our relationships} are nonetheless within the rollout section and have but to generate vital revenues.
On the capital market entrance, we have been proactive in 2021 attending 4 premier investor conferences, The Collier Fifth Annual Investor Convention, H.C. Wainwright twenty third Annual World Funding Convention and Benzinga Healthcare Convention, and at last the LD Micro Major Occasion. This week on the Maxim Digital Progress Convention I’ll be presenting on the panel know-how enhancing well being care, which will probably be held on March 30 at 1:30 PM Jap Daylight Time. We attended convention with the objective of enhancing broader investor consciousness of our firm.
I’d wish to now flip the decision over to our Chief Monetary Officer Howard Doss to stroll by means of some key monetary highlights from the fourth quarter of 2021 and the complete yr ended December 2021.
Howard Doss — Chief Monetary Officer
Thanks Suren. Allow us to talk about fourth quarter 2021 outcomes. Revenues for the fourth quarter of 2021 elevated 19.7% to $2.4 million in comparison with income of $2.0 million in the identical quarter final yr. The rise in income was primarily because of income generated by the TRxADE platform and TRxADE Prime. Gross revenue within the fourth quarter of 2021 elevated 831% to $1.24 million or 51.9% of revenues in comparison with $0.1 million or 6.5% of revenues in the identical quarter final yr. The rise in gross revenue was primarily because of income generated by TRxADE platform, which has decrease price of gross sales.
Working bills for the fourth quarter of 2021 have been $2.0 million in comparison with $2.4 million in the identical quarter final yr. This lower was due primarily to a lack of impairment of goodwill acknowledged in the identical quarter final yr, which was a one-time cost. Web loss within the fourth quarter of 2021 was $0.8 million or $0.10 per primary and diluted excellent share in comparison with $2.3 million or $0.29 per primary and a diluted share excellent on account of $726,000 lack of impairment of goodwill and a one-time $1.81 million stock write-down of PPE objects in comparison with the identical quarter final yr.
Adjusted EBITDA and non-GAAP monetary measure decreased to detrimental $0.8 million in comparison with a detrimental $1.4 million in the identical quarter final yr. Allow us to now talk about the fiscal 2021 outcomes. Revenues for the 2021 yr decreased 42.2% to $9.9 million in comparison with $17.1 million in 2020. The lower in income was because of income generated by Integra Pharma Options, our wholly-owned subsidiary, which income was from private protecting gear gross sales regarding the COVID-19 pandemic in 2020.
Gross revenue in fiscal 2021 decreased 16.8% to $4.7 million or 48% of revenues in comparison with $5.7 million or 33% of revenues for a similar interval final yr. The rise in gross revenue proportion was primarily attributable to greater margins related to TRxADE platform income, which has a decrease price of gross sales. Working bills in 2021 have been $10.0 million in comparison with $8.2 million final yr. This improve is primarily because of the loss on stock funding and a rise in IT initiatives in our Bonum Well being and Alliance Pharma corporations.
Web loss in 2021 was $5.3 million or $0.65 per primary and diluted share excellent in comparison with $2.5 million or $0.33 per primary and diluted share excellent final yr. Adjusted EBITDA for the yr ended 2021 was a detrimental $3.7 million in comparison with a optimistic $0.1 million for the yr ended 2020. Taking a look at our steadiness sheet, money and money equivalents have been $3.1 million as of December 31, 2021 in contrast with $5.9 million as of December 31, 2020 The lower in money was primarily because of our IT initiatives with Bonum Well being and Alliance Pharma and a loss on stock funding.
With that I’ll flip the decision again to Suren for closing feedback.
Suren Ajjarapu — Chief Government Officer
Thanks, Howard. In abstract, we’re specializing in thrilling methods to drive ahead our core enterprise. I feel we’re a constructing an unimaginable compelling healthcare ecosystem, of constructing an thrilling worth proposition for all stakeholders and sit up for seeing what the long run holds as we proceed our fast tempo of operational execution, creating sustainable long-term worth for my fellow shareholders.
With that, I’ll flip it over to the operator to start the question-and-answer periods. Operator?
Questions and Solutions:
Operator
Thanks. [Operator Instructions] Our first query comes from Allen Klee with Maxim Group. Please proceed along with your query.
Allen Klee — Maxim Group, LLC — Analyst
Good afternoon. Might you discuss just a little extra about your new pharmaceutical three way partnership till — when it comes to how you consider what the chance is and the way you consider the timing of rolling this out? Thanks.
Suren Ajjarapu — Chief Government Officer
Certain Allen. Thanks. Good afternoon. So far as Rx, in case you take a look at the whole U.S. generic drug market reached virtually like $127.8 billion in 2020 alone. The share of merchandise develop into short-dated, over inventory, gradual shifting over time and develop into off contract. SOSRx market is an progressive platform that provides another gross sales channel to producers to promote these off contract prescription drugs to nationwide distributors and chain pharmacies, grocery chains and different pharmacies that considerably cheaper price in bulk. This market presents proprietary algorithms, state regulatory compliance, pricing transparency and negotiation instruments to enhance product units. So to reply your query how lengthy, we simply began this within the February of 2022 this three way partnership we develop all through the massive chains whereas we’re nonetheless supplying the TRxADE platform focuses on our impartial pharmacies.
Allen Klee — Maxim Group, LLC — Analyst
Thanks. After which my follow-up query is, is there any commentary you can provide us on the way you’re interested by 2022?
Suren Ajjarapu — Chief Government Officer
Allen, as we’re nonetheless in a progress section, we’re unable to offer you that projected numbers as a result of as you’ve seen the brand new initiatives of SOSRx — we cost an administrative price up 20% paid by the producers for our buy worth on the pharmaceutical that go by means of our platform whereas within the tax fee, it’s a 6% on a shopping for worth on a generic. So these initiatives have began most just lately. So now we have but to see how briskly and this know-how platforms each TRxADE in addition to SOSRx will happen. In order that’s why we’re unable to provide the projections whereas it continues to develop each the platforms.
Allen Klee — Maxim Group, LLC — Analyst
Nice, thanks a lot. I’ll get again in queue.
Operator
Our subsequent query comes from Howard Halpern with Taglich Brothers. Please proceed along with your query.
Howard Halpern — Taglich Brothers, Inc. — Analyst
Hello guys. Might you give just a little little bit of a view on how the provision chain has possibly modified just a little bit between generics and branded merchandise? Has it returned to a extra regular sample for you?
Suren Ajjarapu — Chief Government Officer
I’ll take a primary stab at it. I’ll let Howard offer you extra in depth additionally. We nonetheless see a few of the provide chain occasions extra rolling into this yr, as all people understands the warfare is happening a few of the — generic prescription drugs primarily come from whether or not it’s, India or China or Europe that has an impression on it. That’s the explanation you’ll be able to see the branded gross sales on our platform or the generic. After all, in case you take a look at our numbers, we earn more money on the generic gross sales and fewer proportion on the branded and that’s the explanation you see that a few of the fall by means of that, however I feel it’s going to select again up because it’s coming to the normalcy as we see within the second — coming quarters like second and third quarters. Howard, do you need to add something?
Howard Doss — Chief Monetary Officer
Yeah, no, Howard I might I might concur with Suren. I feel the wholesalers are telling us proper now that they’re beginning to see just a little bit higher view in provide of the generics, which is the place they make their cash as nicely, similar to we make it on our platform. So we predict that’s changing into extra normalized, though it’s fairly not there but.
Howard Halpern — Taglich Brothers, Inc. — Analyst
Okay. And my follow-up can be, may you discuss just a little bit in regards to the group buying group and the way that’s progressing and the place will that income movement into? Will that be into the Integra section first?
Suren Ajjarapu — Chief Government Officer
Yeah. The GPO, it’s nonetheless coming onto the platform facet, not fully onto the Integra facet. The reason being we elevated the GPO’s to usher in an increasing number of pharmacies to return onto our platform and purchase their merchandise by means of our platform. So we don’t distinguish from there.
Howard Halpern — Taglich Brothers, Inc. — Analyst
Okay. Okay, thanks. I’ll hop again in queue.
Operator
Our subsequent query is a follow-up from Allen Klee with Maxim Group. Please proceed along with your query.
Allen Klee — Maxim Group, LLC — Analyst
On your telemedicine efforts may you discuss just a little about the way you’re interested by the pickup and type of what your methods will probably be going ahead? I do know it’s very early to extend the adoption.
Suren Ajjarapu — Chief Government Officer
Sure. Allen, in case you take a look at in 2021, we introduced in an enormous wholesaler. I imply, to say the wholesaler, the massive grocery chain, like Winn-Dixie and Berkshire Hathaway, and so forth and so forth. However in case you take a look at in 2022 we signed and launched the Coborn’s, which has 163 groceries and gasoline and merchandize markets. And together with our impartial pharmacies roughly added within the final quarter, it’s repeatedly choosing up the momentum however we’re not there but as you precisely stated. So if we take a look at, now we have round 22,000 downloads as I discussed, and roughly 11% of them transformed into the affected person registrations.
Allen Klee — Maxim Group, LLC — Analyst
Might you inform us — that is my follow-up, the whole quantity of consumers? Are these theoretical clients that you could possibly penetrate and possibly an affordable penetration fee of them could possibly be whenever you’re lastly scaled up a variety of how you’d give it some thought that could possibly be a yr or a few years from now, however how ought to we possibly consider that?
Suren Ajjarapu — Chief Government Officer
Certain. I don’t have the paperwork readability on the Winn-Dixie and Berkshire as a part of that, however I’ll offer you what now we have on the visibility on our 13,100 plus members. Not directly I’m serving virtually like 15 million to twenty million sufferers so even when I can convert the following 4 to 5 years, 10% of that it’s 1,000,000 sufferers which are on the market which are paying $20 per subscription per thirty days, that’s the place we are able to have a possible and might develop on high of that.
Allen Klee — Maxim Group, LLC — Analyst
Nice. Since I’m going to attempt to ask one other query, since I feel there is likely to be, I’m not holding any but additionally — your bills have been higher this quarter and also you didn’t have like one-time issues. How do you consider like your plans to develop bills, working bills relative to income?
Suren Ajjarapu — Chief Government Officer
I’ll take a primary stab at it after which I’ll ask Howard to hitch. As I discussed, you’ve seen the gross margin elevated, I feel, comparatively we hold these bills standardized. Now, it’s the market platform has to select up an increasing number of. That’s the place per pockets share per thirty days. So with an present platform we attempt to see an increasing number of product quantity going by means of our member community so the an increasing number of margin improve with the identical type of an expense. Howard, do you need to add something?
Howard Doss — Chief Monetary Officer
Yeah, I feel these are, these are the important thing factors there Allen. I feel the bills have been stabilized, actually on a month-to-month foundation after which now it’s simply type of a choice on whether or not we need to hold them at these ranges or change them relative to how the revenues coming in.
Allen Klee — Maxim Group, LLC — Analyst
Howard, thanks. You answered a query about your GPO. Your GPOs have — it look like that could possibly be a really giant alternative when it scales up. I wasn’t fairly positive I understood your reply when it comes to the way you’re interested by the timing of getting them working and in case you may present some colour on that?
Suren Ajjarapu — Chief Government Officer
Certain Allen. We’ve simply launched that idea few quarters in the past. We’re nonetheless but to see the complete blown outcomes on the GPO. So we’re going to proceed to undergo that R&D mode for one more quarter and we’ll be capable to offer you a extra elaborate reply in the direction of the second quarter.
Allen Klee — Maxim Group, LLC — Analyst
Okay, nice. And possibly a final query, whenever you discuss to your impartial pharmacies what are they saying are the most important challenges they’re going through now and the way they’re feeling in regards to the relative demand outlook in the present day possibly versus a yr in the past?
Suren Ajjarapu — Chief Government Officer
Certain. As you’re seeing we additionally noticed the pinch within the provide chain and squeezed from the massive containers and our insurance coverage corporations by means of the VIR charges and so forth and so forth. That’s the explanation that permit our platform, they’re attempting to spend extra on our platform. And it’s that as you’re conscious of many of the telehealth prescriptions are strolling into this field chain and that’s the place we’ve launched our Bonum Well being. We need to empower our independence by means of our Bonum Well being in order that at the very least we are able to supply to their sufferers for the following time the affected person has [Indecipherable] well being want, these prescription can stroll into my impartial shops then stroll into that additionally within the field pattern. By way of that, that’s one other alternative and I do know you might have seen the opposite alternatives within the telehealth facet that’s developing within the tele webs and so forth and so forth. These are the prescriptions that they’ll — these independents can see in order that they’ll maintain the enterprise within the longer run.
Allen Klee — Maxim Group, LLC — Analyst
Nice. Seems like you might have loads of nice alternatives. So, thanks a lot.
Suren Ajjarapu — Chief Government Officer
Thanks Allen.
Operator
Our subsequent query is a follow-up from Howard Halpern with Taglich Brothers. Please proceed along with your query.
Howard Halpern — Taglich Brothers, Inc. — Analyst
Simply two fast ones for you. When it comes to the specialty pharma, what number of states you have been capable of function in?
Suren Ajjarapu — Chief Government Officer
That quantity, now we have not segregated that we are able to in all probability provide the extra element, however proper now I don’t have on high of my head out of the ten,000 now we have.That quantity, now we have not segregated that we are able to in all probability provide the extra element, however proper now I don’t have on high of my head out of the ten,000 now we have.
Howard Halpern — Taglich Brothers, Inc. — Analyst
It’s greater than half the nation, proper?
Suren Ajjarapu — Chief Government Officer
Yeah. For those who take a look at out of our complete member community the place we’re going with that is now we have on the impartial pharmacies like 21,000 and plus. We now have expanded into the clinics virtually one other 30,000 to 40,000 mixed we predict round 57,000 member that we are able to go after out of which I solely have a 13,100 plus members on my platform.
Howard Halpern — Taglich Brothers, Inc. — Analyst
Okay. And the ultimate one is the TRxADE Prime, how profitable or how a lot client acceptance or your buyer acceptance that you just’re seeing and is that income since you had an excellent fourth quarter within the Integra is that income flowing by means of the Integra section?
Suren Ajjarapu — Chief Government Officer
Sure, completely. The income is flowing by means of the Integra Pharma however we’re nonetheless at a nascent stage. We haven’t even seen even a considerable ends in that mannequin. So in case you take a look at it, it’s solely, not even lower than 10% of the highest line revenues by means of the TRxADE Prime revenues. So we’re but to see that product or at the very least see that mannequin rising considerably.
Howard Halpern — Taglich Brothers, Inc. — Analyst
Okay. Okay, thanks.
Operator
Girls and gents, now we have reached the top of the query and reply session. And I want to flip the decision again to Mr. Suren Ajjarapu for closing remarks.
Suren Ajjarapu — Chief Government Officer
Thanks, operator. I’d additionally wish to thanks all for becoming a member of our earnings name, convention name. We sit up for persevering with to replace you on our ongoing progress and progress. If we’re unable to reply any of your questions, please attain out to our IR division at electronic mail [email protected], the corporate can be very happy to help you. For any of you who could have joined the decision in progress do not forget that the replay of this name and webcast will probably be obtainable for the following 30 days within the firm’s web site underneath the NASDAQ-MEDS hyperlink and that extra data concerning the monetary disclosures on this name and webcast together with the set up of non-GAAP monetary data may be present in our press launch, which we filed after the shut of the market in the present day. Thanks, everybody.
Operator
[Operator Closing Remarks]
