MedAvail Holdings, Inc.

Good afternoon, and thank you for attending today's MeditVail second quarter 2022 earnings call. My name is Austin, and I'll be your operator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Caroline Paul, Investor Relations with MeditVail. Caroline, you may begin.

Thank you, and thank you all for participating in today's call. Joining me are Mark Doher, Chief Executive Officer, and Ramona Sebaugh, Chief Financial Officer. Earlier today, Medavail Holdings, referred to as Medavail or the company, released financial results for the second quarter ended June 30th, 2022. 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, including statements or responses in addressing your questions 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 or in response to your questions 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, the ongoing military action launched by Russian forces in Ukraine, or the impact of other global economic conditions, including any economic effects stemming from adverse geopolitical events and economic downturn in inflation or interest rates 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 2022 are based upon our current estimates and various assumptions. Any forward-looking 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 factor section in our most recent periodic reports, including our annual report on Form 10-K and our quarterly report on 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, August 11, 2022. MediVille 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'll turn the call over to Mark.

Thank you, Carolyn, and good afternoon, everyone. In the second quarter, we continued to execute against our strategic priorities of increasing dispensing med centers and utilization, expanding pharmacy technology, and reducing costs across the enterprise. Net revenue in the second quarter was $11.2 million, representing over double the revenue in the same period of the prior year. Retail pharmacy services generated $10.6 million in revenue for the second quarter of 2022, representing 137% growth over the same period in 2021, while pharmacy technology revenues were essentially flat at approximately $500,000 year over year. Pharmacy technology revenue can be variable from quarter to quarter due in large part to customer purchasing patterns associated with enterprise level capital sales. As a result of our progress year to date and visibility into the second half of the year, we are introducing net revenue guidance of at least $42 million for the full year 2022. We are also raising our projection of 25 to 30 net new dispensing units for the full year 2022 to 30 to 35 net new dispensing units. Now I'd like to share a few highlights from the quarter that will illustrate the effectiveness of our strategic initiatives, and then Ramona will provide more detail on our financial results and outlook. Returning to Retail Pharmacy Services and SpotRx, we ended the second quarter with 91 dispensing units, representing a 3% increase from 88 as of March 31, 2022, and a year-to-date increase of 34%. Net cumulative deployments at the end of Q2 2022 were 98 units. We continue to drive our corporate strategy to leverage our expansion with current clinic partners and seek to broaden our footprint as they continue to build their networks. We work purposefully with each of our partners on selecting sites we view as being highly productive in order to drive profitable growth. As each site ramps and matures, we routinely review MedCenter data with the goal to optimize dispensing and increase productivity. We continue to balance expanding new clinic sites with driving organic performance of existing med centers, which is a cornerstone of our strategy to leverage our hub and spoke pharmacy model. In Central Florida, we recently opened our Tampa pharmacy hub. We look forward to leveraging our new hub, pharmacy, to address the continued demand we are seeing from our key clinic partners in the region, Kano Health and the IMA Medical Group. Additionally, we are pleased to announce a new partnership with Advent Health. Advent Health has agreed to deploy SpotRx at two clinics in Tampa initially, with opportunity for additional sites as we seek to prove our value proposition driving patient and provider satisfaction, as well as positively impacting medication adherence. We are excited to be partnering with AdventHealth, a connected system with 50 hospital campuses and hundreds of care sites. In Arizona, We are pleased to be growing with our partners as they continue to build their networks. One of our key partners has been expanding primarily through a de novo strategy in Arizona, which has recently started to drive utilization through both our Phoenix and Tucson hubs. We would reiterate that ramping of revenue is anticipated to be longer in de novo sites as partners clinics are building their patient panels. Additionally, We've been working with Honor Health since summer 2021 in the Phoenix market, and we have been seeing momentum more recently as a result of our efforts to strengthen our value proposition to our existing partners. We are encouraged by this continued momentum with each of our partners that leverages our current hub pharmacy infrastructure. We anticipate most of these sites will be dispensing by late this year, and would note that over 10 additional sites are currently contracted for SpotRx but are not yet deployed. Turning to pharmacy technology, we're encouraged by our recent progress on expanding the breadth of our pharmacy technology. As a reminder, we sell our hardware and, importantly, license our software and systems and provide maintenance to our platform, which is intended to create highly predictable and profitable recurring revenue. We are happy to announce that during the second quarter, University of Florida Health implemented three MedEvail med centers in Gainesville, Florida. The three med centers are serving patients admitted to the emergency departments of the University of Florida Health Shands Cancer Hospital, University of Florida Health Shands Emergency Center, Spring Hill, and the University of Florida Health Emergency Center of Canepa. While timelines can vary from partner to partner, we were pleased to have moved from contract signing to the implementation of the three med centers in approximately four months. Finally, as part of our aim to expand gross margins and reduce costs across the enterprise, we are using data more effectively to identify potential cost savings opportunities. During the second quarter, we were able to achieve 8.2% gross margins, which significantly improved on a sequential basis from 5.5% during the first quarter. Our team's focus on streamlining prescription delivery was a core contributor to margin expansion, and we anticipate the improvements to continue into the back half of 2022. Additionally, during the first half of this year, we increased efficiency in our patient contact center by reducing our reliance on contractors, and in data management and research and development areas by leveraging existing technology and internal resources. We expect these changes, which began in the second quarter and will continue through the remainder of the year, to result in projected savings of 20% over the fourth quarter 2021 cash burn rate. In summary, we believe we are delivering growth and executing on each of the strategic priorities we have previously outlined. I am optimistic about our opportunities to drive utilization and expansion while continuing to reduce expenses. We remain strongly committed to delivering long-term profitable growth and maximizing value for our shareholders. With that, I'll now turn the call over to Ramona to provide a review of our second quarter financial results.