Q1 2022 TRxADE Health Inc Earnings Call

Good afternoon, ladies and gentlemen, thank you for standing by welcome to Chicks aid Health first quarter 2022 earnings Conference call.

During todays presentation, all parties will be in a listen only mode.

Following the presentation the conference will be opened for questions.

The earnings press release the company accompanying this conference call was issued at the close of the market today.

The report, which includes additional information regarding the company's results of operations for the quarter ended March 31, 2022 was filed with the SEC earlier today.

On our call today is <unk> founder Chairman and Chief Executive Officer, Sharon I'll drop and Janet Huffman Chief Financial Officer.

The replay of this call and webcast will be available for the next 30 days on the Companys website under the NASDAQ Meds link.

The company's web site also includes more supporting industry information.

At this time I'd like to turn the call over to Janet Hoffman, The Companys Chief Financial Officer, Janet the floor is yours.

Thank you operator.

Greater and thank you for joining us today I'd like to welcome you to our 2022 first quarter financial results Conference call.

A press release announcing our 2022 first quarter financial results was issued after the close of market today and is posted on our website. We have also furnished such press release to the SEC on form 8-K.

Statements made on this call and webcast include forward looking statements. These.

These statements include but are not limited to our outlook for the company and statements that estimate or project future results of operations or the performance of the company, including the potential continued impact of COVID-19 on the company's business and results of operations.

These statements speak only as of the date hereof and the company assumes no obligation except as required by law to revise any forward looking statements that may be made in today's press release call or webcast.

These statements do not guarantee future performance and are subject to risks uncertainties and assumptions. Please refer to the press release and the risk factors and documents, we file with the Securities and Exchange Commission.

Including our most recent quarterly report on Form 10-Q, and any subsequently filed periodic report for current report on form 8-K.

For information on risks uncertainties and assumptions that may cause actual results to differ materially from those set forth in such statements.

In addition, during today's call and webcast, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of tri state's performance.

These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results.

You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results at the end of our earnings press release.

Unless otherwise stated all financial comparisons in this call will be to our results for the comparable period of fiscal 2021.

During the question and answer portion of today's call. Please limit yourself to no more than one question and one follow up.

At this time I'd like to turn the call over to surrender of Jericho, The company's Chief Executive Officer.

Brian the floor is yours.

Thank you Janet.

We saw revenue improvement first quarter results for 2022.

Our revenue base continues to return to the core fashion pharmaceutical exchange platform.

From the one time personal protective suits driven by the initial onset of the COVID-19 pandemic.

Our nationwide footprint continues to grow as well.

And lastly focus on exciting new ways to expand proportional wallet share within our large and growing network of registered users, while better enabling them to how do we stay in respect to customers.

Part of that we're growing the loyalty to their local retail pharmacy.

Before we do have more detailed walk through our financial and operational results for the 2020 to first quarter.

For those of you who are new to the company I would like to walk you through who we are how we are utilizing the retail pharmacy experience.

The optimization of drug procurement.

<unk> journey.

And engagement.

Prior to the launch of taxi.

Turning drug courts.

Pharmacy was an extremely laborious and patenting an efficient process.

Inside of transparency framework with price.

Or what other sort of paying for the drug.

Traditional hold centers will provide unparalleled payment terms no deliveries create a difficult commander.

Approximately 19400 independent pharmacies nationwide.

We identified this marketing efficiency as well as the incredible potential in these independent pharmacies, which together maintaining an estimated approximately 67 1 billion.

Annual purchasing power of course eager to lodge tracks.

We design and operate our business to business web based market platform, bringing together the nation's independent pharmacies within it.

National pharmaceutical suppliers to provide a uniquely efficient and perhaps where the buying and selling process.

Our platform independent pharmacies more.

Receiving a pay price from competing supplier.

Payment terms and often with next day delivery.

We believe this radical price transparency economy of scale and competition among suppliers needs up to a 10% reduction in pharmacies total annual drug purchase costs.

Doug level savings of up to 90% and certain pharmaceutical products.

Our platform says promises from having to manually compare.

Prices across the distributors, serving hundreds of hours of unnecessary labor annually and eliminating negative reimbursement fulfilling a prescription at a loss.

Our revenue model is simple.

Net administrative fee of up to 6%.

The buying prices of generic pharmaceuticals, and up two 1% of the brand Pharmaceuticals Pascagoula pharmaceutical platform similar to Paypal like we felt like model.

Today, we have seen incredible success in garnering attention I'm independent pharmacies nationwide.

Validating our business model.

We currently have over 13400, plus a registered members on our platform.

With approximately 340 newly registered members added to the first quarter of 2022 compared to 223.

In the first quarter of 2021.

Another exciting growth metric on our trucks and platform includes a 25% increase in sales volume.

Processed across all platforms in the first quarter of 2022 compared to the same quarter in 2021.

Tax rate Prime has also experienced exciting growth in the first quarter of 2022.

Comparing the first quarter of 2022 to 2021 reflects an increase in the number of orders processed by approximately 300%.

And units sold increased over 500%.

We expect this growth to continue in 2022, as we expand our customer base to medical facilities and into the veterinarian industry.

Great.

In February 2022, the company announced a new venture with <unk> health LLC Sos Artic L T with pharmaceutical Microsoft platform.

This new venture that's what I thought acts as an exciting addition to the tax rate.

Additional availability to short dated overstock.

That would otherwise be subject to destruction.

Oh, that's always Rx marketplace brings to manufacturers and wholesalers together, providing an efficient and transparent buying and selling process.

The tax rate in peso.

<unk> marketplaces deliver radical price transparency economy of scale competition and benefit the independent pharmacies and wholesalers, while expanding the settling potential puts us closer to market participants.

We believe that practice here at <unk> platforms provide the opportunity to deliver more affordable prescription costs for consumers.

Yeah.

Tax rate anticipates growth in this joint go entering 2022 as more progress through manufacturers are expected to address the public need what enhanced mitigation accessibility reliable supply of cost effective pharmaceuticals.

The capital market front.

We continue to be proactive and presented.

President of the Maxim or killer growth conference on the panel technology and growing health care, how that March 30th.

I will also be attending LD micro invitational, which will be held on June seven towards doing that.

We attended these conferences with the goal of enhancing broader in Westwood I read Metrocolor company.

Now I would like to turn the call over to <unk>.

Our Chief Financial Officer got it Hoffman to walk through some key financials. Thanks from the first quarter of 2022.

Thank you Sharon.

Now, let's discuss the first quarter 2022 results.

Revenues for the first quarter of 2022 increased 6% to $3 2 million compared to revenue of $3 1 million in the same quarter last year.

Increase in revenue was primarily due to revenue generated by the Czech Jade platform and check them crime.

Gross profit in the first quarter of 2022 decreased 3% to $1 3 million or 41, 2% of revenue compared to one 4 million or 45, 3% of revenues in the same quarter last year.

Decrease in gross profit as a result of Integra pharma solution.

We're trying to save time.

Operating expenses in the first quarter of 2022 were $2 3 million compared to 2 million in the same quarter last year.

This increase was due primarily to increased salary and wages and legal expenses in the first quarter of 2022.

Net loss in the first quarter of 2022 was 1 million or zero point once you curb basic and diluted share outstanding compared to 0.7 million or 0.08 per basic and diluted share outstanding for the same quarter in 2021.

Adjusted EBITDA, a non-GAAP financial measure decreased to negative 0.7 million compared to negative <unk> 5 million in the same quarter last year.

Looking at our balance sheet cash and cash equivalents were $1 9 million as of March 31, 2022 <unk>.

Compared with $3 1 million as of December 31st 2021.

The decrease in cash was primarily due to our I T initiatives.

Investment in our new venture with Sos Iraq.

Increased salaries and wages and increased legal expenses for the first quarter of 2022.

With that I will turn the call back to surrender for closing remarks.

Thank you Janet in summary, we're focusing on exciting new strategic partnerships to drive forward, our core business, while diversifying our revenue base.

Taken as a whole I think we are building an incredible compiling health care ecosystem.

Allowing consumers access to affordable health care and building an exciting value probably you should call stakeholders.

Look forward to seeing what the future holds as we continue our rapid pace of operational execution.

Adding sustainable long term value for <unk> shareholders.

I'll turn it over to the operator to begin the question answer session operator.

Thank you Sir we will now begin the question and answer session. As a reminder, if you have a question. Please press star followed by the one on your Touchtone phone. If you would like to withdraw your question press. The star followed by the two and if you are using speaker equipment, you will need to lift the handset before making your selection one moment.

Please.

Your first question comes from the line of Howard Halpern with <unk> Brothers. Please proceed with your question.

Congratulations on the quarter top line results look good.

Uh huh.

My question is in regards to I guess, both the trucks Aden.

What were the prime offering do you see sequential growth occurring from this point forward in those two segments.

Thank you Howard first of all yes, that's what our aim and we continues to see more truck seat I think this is the first time we've released.

Earnings and giving you the volume increase on our platform and the number of orders and a number of buyers on our tax rate time. Those metrics continues to provide going forward. So I think you'll see in our press release of those metrics.

And my follow up would be.

Is there a way now that you're starting to gain volume and traction with customers in the prime offering is there a way to maybe improve gross profit margins in that segment.

Yeah.

That's our growth, but as you all aware some of their trucks at a time the shipping costs are a little bit of higher becoming for everybody. In every industry is affected by the inflation. So we may see that.

Probably.

We cannot comment on that but that's all of our anticipation of increasing that gross profit and probably towards the third quarter or fourth quarter holiday economy behaves in inflation in transportation costs.

Able to give you more depth.

Definitely do answer on that.

Okay. So for right now low forty's mid forties in gross margin is a safe bet going forward until things sort of normalize in the economy.

Yeah.

Okay I'll jump back in the queue.

Thank you.

As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad one moment. Please.

Your next question comes from the line of Allen Klee with Maxim Group. Please proceed with your question.

Yeah.

Yes, hi.

So for.

Sure.

The venture with exchange House.

Our Sos Rx.

<unk>.

Help us understand how when we're going to see.

How we should expect.

When the contribution from that could could be material.

2022.

Sure. Thanks Alan.

Yes, we just started that in February .

We may not see towards the end of the year or beginning of next quarter.

The impact.

Because.

As I mentioned, it's a technology platform got to.

Educate both manufacturers and wholesalers alright.

Box trade.

Kind of a grocery chains and stuff like that.

So we'll continue to.

Creator adoption for our technology.

Probably towards the end of this year or beginning of next year, we'll see that.

Okay, Great and then kind of the same question on.

Uh huh.

Bone health and group purchasing organizations.

Okay.

Yes, we still see some other cloud traction.

We continue to talk about those.

Our group purchase organizations.

The product availability the key for them too.

Jump into the marketplace.

Because they want to buy 100% through us.

We may see that the results coming towards the second quarter of sort of third quarter on for Paul.

Yeah.

Okay.

Okay. Thank you so much.

Thank you.

Your next question comes from Robert Smith, with the center of performance investment. Please proceed with your question.

Good afternoon, Thanks for taking my call.

My questions.

<unk>.

Can you give me an idea and see.

Continuing losses in <unk>.

Diminishing cash how are you.

We think about financing.

Our growth strategies.

Thanks, Robert Yeah, we continuous to operate as far as the new technology investment that we're doing.

Probably we look for.

As I mentioned the growth towards our existing platform will support our new initiatives.

Yes, but your cash position continues to decline so wondering what are your.

What are your strategies for financing the growth in the business.

And running continuing losses, I mean, where are you going to get that capital.

I think we have an existing capital base.

That will sustain us.

Two going forward. So we'll keep looking at other avenues at this time, but right now we're not looking to do any capital right.

Your next question is a follow up from Howard Halpern with <unk> Brothers. Please proceed with your question.

I just I noticed when I was looking at.

Q that.

Revenue in our specialty pharmacy area dipped a little bit.

Was that just a one time event or was there.

In event that caused that to happen and it's going to rebound back to.

Back to normalcy, because you've been sort of flat normally going in and around that.

And this time it dipped a little bit.

Yes, going forward and as I mentioned, our focus is primarily part of our marketplace and the traction try it.

The reason for that direction.

Maybe.

Plus quarter over the last month of the market's a onetime dip I don't see it's pretty much flat.

It's 100% tax and how it is focusing on platform marketplaces.

Call Center to pharmacy, and going forward also the manufacturers to the whole support will be our marketplaces, what would be the highest priority for us.

And one just follow up for Matt do you.

Focus now.

What you've talked about the exact same platform are.

Operating expenses.

Where are they going to a normalized down to around that $2 million area or a little bit less than that going forward are you able to make that adjustment.

I think this is Phil.

The salary increases the way that you could give us to keep that sustainability.

Existing in place.

An hour.

Salaries and stuff. So I think that's normalization is around $2 million range.

Okay. Okay. Thanks.

Okay.

Ladies and gentlemen, we have reached the end of the question and answer session and I'd like to turn the call back to Mr. Sharon <unk> for closing remarks.

Yeah.

Thank you operator.

Also like to thank all of you for joining our earnings call today.

Look forward to continuing to update you on our ongoing progress and growth.

Unable to answer any of your questions. Please reach out to our IR department, who will be more than happy to.

Or any of you who might have joined the call and progress remember the replay of this call and webcast will be available for the next 30 days on the Companys website under the NASDAQ <unk> link and have more information regarding the financial information on this.

Closed on this call and webcast, including the cancellation of our non-GAAP financial information can be found in our press release, which was filed after the close of the market today.

Thank you all.

This concludes today's conference you may disconnect your lines at this time. Thank you all for your participation.

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