Hydreight Technologies Inc. (“
Hydreight” or
the
“Company”) ( TSXV:
NURS )( OTCQB: HYDTF )( FSE: SO6 ), a
fast-growing mobile clinical network and medical platform which
enables flexible at-home medical services across 50 states in the
United States, is pleased to announce its financial results for the
third quarter ended September 30, 2023. All financial information
is presented in Canadian dollars unless otherwise indicated.
Shane Madden, CEO of Hydreight
commented, “Q3 2023 was an excellent quarter for Hydreight and our
financial results reflect the continued organic growth across all
our divisions and diverse revenue mix. Q3 was the 8th consecutive
quarter of meaningful revenue growth, and we expect a strong finish
to 2023 and momentum to continue into 2024. Our focus in the first
half of the year was developing and advancing our proprietary
technology platform, adding features including direct booking,
telemedicine and a dispatch center, and adhering to the
state-by-state healthcare regulations to ensure compliance. These
advancements in turn, create a fully automated, fully-integrated,
turnkey solution which enables nurses to deliver services outside
of traditional brick-and-mortar healthcare facilities. We have
created one of the only healthcare technology platforms that works
across 50 states and over 650 cities in the United States. Because
of that, Hydreight has a significant competitive advantage in the
sector.”
He continued, “In the last two
years, we’ve experienced significant growth. Looking ahead, our
focus includes expanding services for our customers, growing our
network of nurses and users, driving white label partnerships,
increasing margins on our pharmacy division, and looking at
strategic tuck-in M&A opportunities to scale the business
quickly and efficiently. Recent legislative changes in the
healthcare market, particularly in the 503B landscape, have
affected patient-specific prescriptions for previously
over-the-counter medications. The technology and legal investments
we made in the beginning of the year, have uniquely positioned
Hydreight to fill this gap and enable healthcare practitioners, and
healthcare businesses to operate legally under our platform. This
remains a key competitive advantage, establishing us as industry
leaders with a proprietary platform poised for continued growth. I
am proud of our team's ability to execute our growth strategy,
adapt swiftly to evolving industry legislation, and deliver
meaningful results."
Third Quarter 2023 Key Highlights and
Subsequent Events
- Q3 2023 topline revenues1 were
$3.97 million, GAAP revenues were $3.09 million. Year-to-Date
(“YTD”) topline1 revenues were $12.06 million, YTD
GAAP revenues were $8.14 million. On a topline basis, the revenue
contribution across its three main revenue streams: subscriptions,
service fee and pharmacy were equal. The Company recently launched
its new white-label solution, which will start contributing to the
current revenue mix.
- Q3 2023 Gross profit margin (GAAP)
was 41% compared to 52% in Q3 2022. The decrease in overall gross
margin percentage is due to the increase in the lower gross margin
pharmacy sales relative to total revenue.
- The Company onboarded 318 nurses on
its platform in Q3 2023; YTD the Company onboarded 595 nurses on
the platform. Currently there are approximately 2,600 nurses on the
platform.
- The Company expanded its doctor
network to over 100 doctors nationally and expanded its service
offering to over 650 cities across 50 states.
- The Company has approximately 90
white-label locations nationwide, with new locations opening every
month.
- On November 8, 2023, Hydreight was
named one of Canada’s Companies to Watch as part of the 2023
Deloitte Technology Fast 50™ program. The award highlights the
Company’s significant organic revenue growth of 250% year-over-year
and validates the business operations and key differentiators
Hydreight has in the market.
- On October 19, 2023, Hydreight
Launched NAD+ as part of its robust patient service offering on its
proprietary healthcare technology platform. NAD+ or Nicotinamide
Adenine Dinucleotide is a coenzyme central to metabolism which is
found in all living cells and consists of two nucleotides joined
through their phosphate groups. Clinical studies have suggested
that NAD+ may help to improve cognitive function, energy, weight
management, pain management, and may also reduce and reverse
effects of aging and more.
- On October 5, 2023, Hydreight
provided a corporate update reflecting significant revenue growth
and strong organic operational growth.
- On August 23, 2023, Hydreight
announced nationwide expansion of doctor network to meet demand
across all 50 states across the U.S.
- On July 26, 2023, Hydreight
announced the launch of its new website booking system and nurse
dispatch service, making bookings faster and easier for its
customers.
- On July 19, 2023, Hydreight
provided a corporate update citing tremendous growth along with new
features and services.
The Company believes the following Non-GAAP1
financial measures provide meaningful insight to aid in the
understanding of the Company’s performance and may assist in the
evaluation of the Company’s business relative to that of its
peers:
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
|
2023 |
|
|
|
2022 |
% change |
|
|
2023 |
|
|
|
2022 |
% change |
Adjusted Revenue |
$ |
3,974,626 |
|
|
$ |
2,355,006 |
69% |
|
$ |
12,058,150 |
|
|
$ |
5,610,147 |
115% |
Deduct (add) - deferred business partner contract revenue |
|
(1,784 |
) |
|
|
451,482 |
|
|
|
170,102 |
|
|
|
991,445 |
|
Deduct - business partner payouts on app service gross revenue |
|
888,191 |
|
|
|
767,014 |
|
|
|
3,751,745 |
|
|
|
2,045,405 |
|
GAAP Revenue |
$ |
3,088,219 |
|
|
$ |
1,136,510 |
172% |
|
$ |
8,136,303 |
|
|
$ |
2,573,297 |
216% |
|
|
|
|
|
|
|
|
Adjusted Gross Margin |
$ |
1,267,431 |
|
|
$ |
1,041,502 |
22% |
|
$ |
3,561,578 |
|
|
$ |
2,254,222 |
58% |
Deduct (add) - deferred business partner contract revenue |
|
(1,784 |
) |
|
|
451,482 |
|
|
|
170,102 |
|
|
|
991,445 |
|
GAAP Gross Margin |
$ |
1,269,215 |
|
|
$ |
590,020 |
115% |
|
$ |
3,391,476 |
|
|
$ |
1,262,777 |
169% |
1Refer to Use of Non-GAAP Financial Measures |
|
Hydreight has expanded each division according
to the revenue generation and needs of each specific division;
scaling while the division’s initiatives are performing
successfully.
The table below sets out a summary of certain
financial results of the Company over the past eight quarters and
is derived from the audited annual consolidated financial
statements and unaudited quarterly consolidated financials
statements of the Company.
Fiscal Quarter Ended |
Revenue |
Net Loss After Taxes |
Comprehensive Loss |
Basic and Diluted Loss Per
Share |
September 30, 2023 |
3,088,219 |
(466,973) |
(548,954) |
(0.01) |
June 30, 2023 |
2,699,668 |
(471,890) |
(405,638) |
(0.01) |
March 31, 2023 |
2,348,416 |
(122,304) |
(121,502) |
(0.00) |
December 31, 2022 |
1,695,134 |
(5,060,755) |
(5,062,144) |
(1.44) |
September 30, 2022 |
1,136,510 |
(240,360) |
(298,367) |
(160.24) |
June 30, 2022 |
823,053 |
(262,632) |
(309,635) |
(175.09) |
March 31, 2022 |
613,734 |
(431,443) |
(442,446) |
(287.63) |
December 31, 2021 |
357,427 |
(242,579) |
(255,871) |
(161.72) |
|
|
|
|
|
The Company has experienced dramatic user growth
over the past two years as can be seen by the consistent revenue
growth over the past eight quarters. Net loss and comprehensive
loss have generally remained comparable from the fourth quarter of
2021 through the current period when looking only at operating
expenses, not including the reverse takeover
(“RTO”) Transaction related expenses included in
the fourth quarter of 2022 (See 2022 Audited Annual Financial
Statements).
Outlook
The Company continues to deliver on its mission
of building the largest mobile clinical network in the United
States. Through its medical network, pharmacy network and
proprietary technology platform that adheres to the complex
healthcare legislation across 50 states, Hydreight has provided a
fully integrated solution for healthcare providers to become
independent contractors.
Hydreight remains focused on its strategic
priorities of (1) onboarding and supporting additional nurses on
the platform (2) adding more product and service offerings for its
customers, (3) increasing pharmacy margins (4) driving white label
partnerships and (5) looking for strategic tuck in M&A
opportunities to scale and grow the business quickly and
efficiently. Hydreight will continue to invest into its technology
to ensure continuous improvements, advancements and updates
adhering to changes within the healthcare industry.
In 2024, management expects to see meaningful
revenue growth and margin expansion across all divisions.
Company Webinar
Management will be hosting a webinar to discuss
the overall operational performance of the Company, as well as its
financial performance and growth drivers moving forward. Investors
are encouraged to join the presentation.
Date and Time: Wednesday, November 22, 2023, at
9:15am Pacific Time / 12:15pm Eastern Time
Registration Link:
https://us06web.zoom.us/webinar/register/WN_IuaulPeDRPORRvvY2aHe-A
RSU GrantThe Company also
announces that it has granted 254,500 share units (“RSUs” and,
together with the Options, the “Awards”) to certain employees, a
consultant, and a director of the Company. The Awards were granted
in accordance with the Company’s fixed equity incentive plan dated
for reference August 29, 2022 (the “Plan”). 50% of the RSUs will
vest on the one-year anniversary of date of grant, then 25% every
six months thereafter, subject to certain exemptions. Each RSU
entitles the holder to receive one common share of the Company, or
in certain circumstances a cash payment equal to the value of one
common share of the Company, at the time the RSU becomes payable
pursuant to the terms of the applicable RSU award agreement.
Pursuant to the Plan, the Company is able to grant an additional
1,286,072 awards.
Financial Statements and Management’s
Discussion and Analysis
This news release should be read in conjunction
with the Company’s condensed interim consolidated financial
statements and related notes, and management’s discussion and
analysis (“MD&A”) for the three and nine
months ended September 30, 2023 and audited annual consolidated
financial statements for the year ended December 31, 2022. and
copies of which can be found under the Company’s profile
at SEDAR+.
About Hydreight Technologies
Inc.
Hydreight Technologies Inc. is building the
largest mobile clinic network in the United States. Its
proprietary, fully integrated platform hosts a network of over 2500
nurses, over 100 doctors and a pharmacy network across 50 states.
The platform includes a built-in, easy-to-use suite of fully
integrated tools for accounting, documentation, sales, inventory,
booking, and managing patient data, which enables licensed
healthcare professionals to provide services directly to patients
at home, office or hotel. Hydreight is bridging the gap between
provider compliance and patient convenience, empowering nurses, med
spa technicians, and other licensed healthcare professionals. The
Hydreight platform allows healthcare professionals to deliver
services independently, on their own terms, or to add mobile
services to existing location-based operations. Hydreight has a
503B pharmacy network servicing all 50 states and is closely
affiliated with a U.S. certified e-script and telemedicine provider
network that provides services in over 650 cities and
growing.
On behalf of the Board of DirectorsShane MaddenDirector and
Chief Executive OfficerHydreight Technologies Inc.
Contact
Email: ir@hydreight.com; Telephone:
(480) 790 6886
This press release does not constitute an offer
of securities for sale in the United States. The securities being
offered have not been, nor will they be, registered under the
United States Securities Act of 1933, as amended, and such
securities may not be offered or sold within the United States
absent U.S. registration or an applicable exemption from U.S.
registration requirements.
Use of Non-GAAP Financial
Measures:
This release contains references to non-GAAP
financial measures Adjusted Revenue and Adjusted Gross Margin. The
Company defines Adjusted Revenue as gross cash income before
adjustment for the deferred portion of business partner contract
revenue and gross receipts from Hydreight App service sales. The
Company defines Adjusted Gross Margin as GAAP gross margin plus
inventory impairment plus the deferred portion of business partner
contract revenue. The Company believes that the measures provide
information useful to its shareholders and investors in
understanding the Company’s operating cash flow growth, user
growth, and cash generating potential and may assist in the
evaluation of the Company’s business relative to that of its peers
more accurately than GAAP financial measures alone. This data is
furnished to provide additional information and does not have any
standardized meaning prescribed by GAAP. Accordingly, it should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP and is not necessarily
indicative of other metrics presented in accordance with GAAP.
Neither TSXV nor its Regulation Services
Provider (as that term is defined in policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this release. This
press release does not constitute an offer of securities for sale
in the United States. The securities being offered have not been,
nor will they be, registered under the United States Securities Act
of 1933, as amended, and such securities may not be offered or sold
within the United States absent U.S. registration or an applicable
exemption from U.S. registration requirements.
Cautionary Note Regarding
Forward-Looking Information
This press release contains statements which
constitute “forward-looking information” within the meaning of
applicable securities laws, including statements regarding the
plans, intentions, beliefs and current expectations of the Company
with respect to future business activities and operating
performance. Forward-looking information is often identified by the
words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”,
“anticipate”, “believe”, “estimate”, “expect” or similar
expressions and includes information regarding expectations for the
Company's growth in 2023.
Investors are cautioned that forward-looking
information is not based on historical facts but instead reflects
the Company’s management’s expectations, estimates or projections
concerning future results or events based on the opinions,
assumptions and estimates of management considered reasonable at
the date the statements are made. Although the Company believes
that the expectations reflected in such forward-looking information
are reasonable, such information involves risks and uncertainties,
and undue reliance should not be placed on such information, as
unknown or unpredictable factors could have material adverse
effects on future results, performance or achievements of the
Company. Among the key factors that could cause actual results to
differ materially from those projected in the forward-looking
information are the following: the ability to obtain requisite
regulatory and other approvals with respect to the business
operated by the Company and/or the potential impact of the listing
of the Company’s shares on the TSXV on relationships, including
with regulatory bodies, employees, suppliers, customers and
competitors; changes in general economic, business and political
conditions, including changes in the financial markets; changes in
applicable laws; compliance with extensive government regulation;
and the diversion of management time as a result of being a
publicly listed entity. This forward-looking information may be
affected by risks and uncertainties in the business of the Company
and market conditions.
Should one or more of these risks or
uncertainties materialize, or should assumptions underlying the
forward-looking information prove incorrect, actual results may
vary materially from those described herein as intended, planned,
anticipated, believed, estimated or expected. Although the Company
has attempted to identify important risks, uncertainties and
factors which could cause actual results to differ materially,
there may be others that cause results not to be as anticipated,
estimated or intended. The Company does not intend, and does not
assume any obligation, to update this forward-looking information
except as otherwise required by applicable law.
1Refer to Use of Non-GAAP Financial Measures.
“Topline revenue” and “Adjusted revenue” are be used
interchangeably.
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