MedAvail Holdings, Inc.

Hello everyone and thank you for joining MedAvril's 2023 first quarter conference call. My name is Alicia and I'll be your operator for today. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance before the conference, press star zero on your telephone keypad. As a reminder, this conference is being recorded. I now have the pleasure of handing over to Call to your host, Steve Hapler, Managing Director at LifeSci Advisors. Please go ahead.

Thank you all for participating in today's call. Joining me are Mark Dorr, Chief Executive Officer, and Ramona Sebaugh, Chief Financial Officer. Earlier today, Medivale Holdings, Inc., referred to as Medivale or the company, released financial results for the first quarter of 2023. 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 the 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 or forward-looking statements. All forward-looking statements, including without limitation, those relating to the company's operating trends and future financial performance, general market, and macroeconomic conditions, including the effect of inflationary pressure, including any impact of adverse developments affecting the financial services industry, such as those based on liquidity constraints or concerns and events, including the outbreak of war in Ukraine or the impact of COVID-19, expense management, expectations for hiring, growth in the company's organization and reimbursement, market opportunity and expansion and guidance for revenue, gross margin and operating expenses in 2023 are based upon 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 those 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 Metafail's business, please refer to the risk factors section in the company's most recent periodic reports including its annual report on Form 10-K and quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, May 15, 2023. MedEval 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 now turn the call over to Mark.

Thank you, Steve. And thanks to all of you for joining us this afternoon for our first quarter 2023 financial and operational update. During the first quarter, we continue to make excellent progress executing on our mission to become a leading pharmacy technology company following our announcement in January. that we were divesting the SpotRx pharmacy services business, which we subsequently sold to CVS during the quarter. Recall that concurrent with the sale of SpotRx, we pivoted towards our pharmacy technology business that we believe can address key unmet needs in the pharmacy market, including workforce shortages and medication access challenges, especially in rural, less populated areas. With the Med Center, we bring prescription medication dispensing to the point of care through our innovative hardware and software platforms. And while it is still early, our leading indicators suggest that our strategy is working, as evidenced in part by our robust and growing pipeline, which is comprised of both existing and new partners that I will discuss in more detail shortly. Our successful integration with the Epic Willow Pharmacy Management System is providing a significant tailwind for us and is resonating with many primary care and urgent care clinics across the U.S. who utilize that system. In parallel with these activities, we are closely monitoring state regulations and playing an active role, where possible, to create regulatory environments that are favorable to remote kiosk pharmacy dispensing. We played a critical role in Colorado, where legislation was just signed into law that supports our med center technology and remote dispensing. We believe there will be others as additional states embrace the many advantages kiosk dispensing to both the clinic and patients. We are executing against our plan and remain on track to nearly double our footprint this year with 25 net new dispensing med centers in the field during 2023. Our early progress is very encouraging and gives me confidence that we have placed MedEvail on a path to success. Looking at the quarter, we generated revenue of $620,000 and installed four net new dispensing med centers. Ramona will cover the financials and guidance shortly, but we remain on track to generate total revenue of $3 million for 2023, representing more than 100% growth over pharmacy technology revenue of $1.4 million for full year 2022. And assuming we are successful in placing 25 net new med centers in the field this year, we would exit the year with 57 dispensing med centers by the end of this year. Again, we are in the very early stages of tapping into the numerous significant and long-term growth opportunities that we have identified for the pharmacy technology business. And we are excited about what we can achieve this year in terms of laying a foundation for future growth and profitability. On the topic of SpotRF, The planned divestiture and wind-down of that business is progressing as planned. As we indicated previously, this transaction reduced our headcount by approximately 75%. Our annual OpEx run rate by $35 to $37 million, and our cash usage by about 65%. As part of the wind-down, we have retrieved all the med centers that were previously serviced by SpotRx hub pharmacies, and a substantial number of the hub pharmacies have been dismantled to date. We anticipate being substantially done by the end of the second quarter, and the majority of expenses associated with the closure, which have been lower than projected, are expected to be captured in the second quarter as well. Taking a step back, or for those who may be new to the story, on January 19th, Medavail announced a shift in focus from our SpotRx pharmacy services business to our emerging pharmacy technology business. The underlying technology of Medavail, which includes our MedCenter dispensing kiosk and the associated proprietary MedDispense software, is the core of our value propositions. The ability to remotely dispense 600 to 1,000 medications in roughly 13 square feet is a cost-effective way to bring pharmacy to the point of care. And it's like having a pharmacy in a box. Through the MedAvail technology business, we offer partners the ability to purchase or lease the MedCenter and to license our software in order to provide point-of-prescribing dispensing solutions under their own brand. In the MedAvail pharmacy technology model, partners employ their own pharmacy staff and procure their own inventory. MedAvail pharmacy technology enables providers to dispense medications at the point of care. With the MedCenter, the patient can easily initiate medication therapy while avoiding an inconvenient separate trip to a retail pharmacy. By doing so, prescription abandonment rates can be reduced, and this can inherently lead to improved patient outcomes. Additionally, pharmacies are currently suffering a shortage of both pharmacists and pharmacy technicians, which is resulting in restricted or delayed patient access to medication. This pharmacy labor shortage has been persistent and has not been improving. The Med Center is designed to provide patients with enhanced quality and safety through its integrated barcode technology and convenience with expeditious dispensing times that average five to seven minutes, while offering access to a live pharmacist when needed. There are additional benefits to the clinic that offer the convenience of point-of-prescription medication dispensing, such as improved quality ratings associated with medication compliance, and increased patient satisfaction that can drive potential incremental reimbursement revenue. With the wind down SpotRx well underway, we have continued to look for opportunities within the core pharmacy technology business to manage our expenses carefully and become more nimble and efficient. To that end, we conducted an additional reduction in force at the end of April, mostly impacting our development quality assurance teams. This was another difficult but required action that further reduced our overall headcount by approximately 27%. Prior to this action, we commenced a partnership with the software engineering company Ancora for future development activities. Ancora has significant experience in software development and, specifically, integrations with the various pharmacy management systems that are used by our partners. We previously announced integrations with Epic Willow and McKesson Enterprise RX systems, but there are several other pharmacy management systems used in the market, and the Ancora partnership should facilitate faster completion of full integrations with these systems. Medavail is able to complete a proof-of-concept integration in six to eight weeks for partners that want to accelerate deployment of the MedCenter. We also terminated our agreement with our kiosk manufacturer, Kitron, given the more than 100 pre-built med centers that we currently have in inventory. And we are also bringing med center service in-house, whereas we had previously been using an external vendor to service the kiosk. This not only positively impacts our current expense run rate, but should also create a better experience for our partnership. We are continually exploring options for service and manufacturing aligned to our expansion and sales pipeline. In the second quarter, we anticipate bringing our first partner live on our cloud-based software platform, which will be hosted on the Google Cloud. This is a net new partner to Metavail, and we intend to migrate all partners to the cloud before the end of the year. This will further reduce costs and accelerate med center deployments. Importantly, this migration will be primarily done by in-house resources, will be minimally disruptive to partners, and will be completed by the end of the year. In summary, we have identified and continue to work to identify areas of our core pharmacy technology business that we believe can be executed more efficiently. We make every one of these decisions after careful consideration of alternatives and with the partner and patient experience in mind. We are committed to operating a lean organization capable of responding quickly to new growth opportunities as they emerge. Turning now to our pipeline. We continue to see growing demand for the med center among both existing and new partners across our current primary care and urgent care channels. Franciscan missionaries of Our Lady Health System in Baton Rouge, Louisiana, recently executed a contract for four med centers. This health system uses Epic, so our successful integration with Epic Willow was critical to securing this partnership. We expect to bring the first med center online with them during the third quarter. In addition, we have six more contracted med centers with partners who are new to our company, including Courant Health, who we expect to bring live next month. In addition to the 10 contracted med centers previously mentioned, there are an additional five med centers that have been committed to in 2023 by an existing partner. In all, based on the current contracting momentum that we are seeing, as I stated previously, we are confident with our guidance of 25 net new dispensing med centers in place during 2023, bringing our total network to 57 cumulative dispensing med centers by December 31st. In terms of a regulatory update, the current states that are open to remote dispensing or have favorable waiver rules in place cover greater than 72% of the U.S. population. As previously mentioned, Colorado recently passed new regulations essentially opening up the state to remote dispensing as well. We were involved in this effort. Given the many benefits of remote dispensing to both patient and the clinic that I previously touched on, and the worsening shortage of pharmacists and pharmacy techs, we anticipate that the regulatory environment will continue to evolve in our favor. Oregon is also currently evaluating legislation that would essentially allow remote dispensing as well. Despite these positive developments, half of the states continue to be restricted or have rules in place that we consider to be unfavorable. Over the long term, we view this as a significant opportunity to work with state lawmakers to continue to expand our serviceable market, which currently stands at more than $1.3 billion, with an additional $500 million in recurring software license and maintenance revenue. It is worth recapping that if we just look at the primary care and urgent care channels, if all states were open to pharmacy kiosk dispensing, we believe our total addressable market encompasses more than 20,000 sites across the U.S. and represents more than $3.4 billion in MedCenter sales or leases, with an additional more than $1.3 billion in annual recurring software license and maintenance contracts. And this analysis excludes additional channels such as federally qualified health clinics and retail pharmacies that will likely be long-term growth drivers for our company and add billions more to our addressable market. I would now like to turn the call over to Ramona to review our financials. Ramona?