MedAvail Holdings, Inc.

Hello, ladies and gentlemen, and welcome to today's conference call. My name is Natasha, and I'll be coordinating your call today. I will now hand you over to Caroline Poole from Investor Relations. Over to you.

Thank you, and thank you all for participating in today's call. Joining me are Ed Kilroy, Chief Executive Officer, and Ramona Sebaugh, Chief Financial Officer. Earlier today, MedEvil Holdings released financial results for the third quarter ended September 30th, 2021. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance, or similar statements are forward-looking statements. All forward-looking statements, including, without limitation, those relating to our operating trends and future financial performance, the impact of COVID-19 on our business and prospects for recovery, expense management, expectations for hiring, growth in our organization and reimbursement, market opportunity and expansion, and guidance for revenue gross margin and operating expenses in 2021 are based upon our current estimates and various assumptions. Also, management may make additional forward-looking statements in response to your questions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements and do not guarantee future performance. Accordingly, you should not place undue reliance on these statements and should not rely on them in making an investment decision without considering the risks associated with such statements. For a list and description of the risks and uncertainties associated with our business, please refer to the risk factors section in our most recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, November 8th, 2021. Medavail Holdings disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. And with that, I will turn the call over to Ed.

Thank you, Caroline, and good afternoon, everyone, and thank you for joining us. We are encouraged by our strong top line performance of 15% sequential revenue growth from the second quarter of 2021. As a reminder, our business model has two segments. Retail pharmacy services consists of sales from the operation of our technology enabled high touch retail pharmacy and pharmacy technology revenues comprised of the sale or provision of these technologies to large customers to support their own pharmacy operations. Our retail pharmacy sales segment generated $5.4 million of revenue in the third quarter of 2021, representing 149% growth over this period in 2020, and a 21% increase from the second quarter of 2021. Our pharmacy technology revenues decreased 93% year-over-year in the second quarter of 2021 to approximately $350,000. Notably, 2020 included a one-time benefit of $4.7 million recognized in conjunction with the accounting for a non-recurring commercial agreement from 2018. Excluding this one-time accounting adjustment, pharmacy technology revenues increased 51%. After a challenging first half of the year, we saw momentum return and made meaningful progress during the third quarter, signing partnerships and expanding into new sites with existing clients. We remain focused on growing with clinic operators that have large numbers of sites to maximize the potential of our land and expand strategy. We deliver a unique value proposition to our partners with our SpotRx embedded pharmacy model. These care providers are focused on improving both medication adherence and patient satisfaction, and we are delivering results to them each and every day. Our real-time operationalized data identifies at-risk patients and enables tracking by patient, clinic, and disease state. By evaluating metrics such as proportion of days covered or PBC scores, we are able to place patients on auto refill, work with clinicians to prevent hospitalizations, and perform a number of other operational actions that are valuable to our partners. These are important metrics to our clients in the Medicare market. as we can help influence their star ratings and therefore their level of reimbursement from CMS. To that end, beginning with new clinic installations, we had a strong third quarter. We deployed 14 new SpotRx med centers in clinic sites. The 14 new clinic deployments in the third quarter were led by clients such as Kano Health, Access Health, and CareMore. as we continue to expand with our value-based care clients. Geographically, we installed three sites in Arizona, two in California, and nine in Florida. We also remain on track with our expectation to have 45 new in-clinic deployments by year-end 2021. We continue to execute on business development, delivering expansion within our current deployed states in the third quarter, as well as new partnerships. We continue to work with our clients planning further geographic expansion as we grow with them. In September, we signed an agreement with IMA Medical Group, a growing network provider of medical and wellness services to embed our SpotRx pharmacy model into an initial four clinics with an objective to improve medication access and adherence for IMA patients. IMA serves patients in 21 medical centers across Central Florida. As announced today, we also signed an agreement with InovaCare, a leader in transforming care delivery. to offer patients access to our SpotRx kiosks, courier home delivery, and support by our clinic account managers at initial three InovaCare locations in the Orlando area. InovaCare manages more than 500,000 lives, including more than 150,000 dual eligible beneficiaries across over 30 clinics. This continued expansion in Florida one of our key states with a large and concentrated market, demonstrates SpotRx's strong value proposition to Medicare patients and value-based care providers. Importantly, with these new deployments and new partnerships, we are building the foundation for scalable and sustainable revenue growth with large and growing value-based care providers. Our pharmacy technology segment continues to represent a significant opportunity for Medivale. Clients such as Sam's Club, Kaiser, and Texas Health Resources continue to operate our technology in their production environments and are working closely with us as they move forward. Previously, we did announce that we started development of a full integration with the Epic electronic health record software. This capability will help us to expedite deployments with the many health customers who have Epic installed and reduce the time from signing a deal with Medivale to deployment of our pharmacy technology. Today, we have multiple clients, such as Texas Health Resources and Providence Health, that have installed or are in Epic and intend to take advantage of this integration work. Most importantly, this integration work opens the market for installed Epic users to us as prospects for our pharmacy technology. Currently, there are approximately 350 integrated delivery networks using the Epic pharmacy software in the United States. We are also adding sales resources to accelerate the Epic opportunity. The integration work is currently scheduled to be completed in the second quarter of 2022. Turning to our 2021 outlook, we continue to expect net revenue to be at least $21 million. The timelines we are seeing from physical installation to first dispense remain unchanged from the last quarter. Further, excluding the one-time benefits previously mentioned, we continue to expect to deliver revenue growth in excess of 100% in 2021 and expect to maintain this top line growth rate in 2022, given the demand we see for our offerings and our ongoing expansion into new geographies. Finally, as we announced in September, we are excited to have Ramona Sebaugh join our leadership team as CFO. Ramona brings over 20 years of experience with pharmacy and healthcare services organizations leading strategic growth initiatives. Ramona's expertise will be invaluable in executing our strategy to drive strong operational and financial performance. We are pleased with our growth as we continue to build and execute against our business development strategy and we are excited about our opportunity ahead. The Medicare Advantage market continues to grow quickly and we are... to be the leading onsite pharmacy partner to the top risk-bearing clinic operators in the marketplace. With that, I'll now turn the call over to Ramona to provide a review of our third quarter financial results.