Medicure Inc.

Good morning and welcome to Medicare's earnings conference call for the quarter ended June 30th, 2021. My name is Chris and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Before we proceed, I would like to remind everyone that this presentation contains forward-looking statements relating to future results, events, and expectations, which are made pursuant to the safe harbor provisions of the U.S. Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which could cause the company's actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, among others, those described in the company's most recent annual information form and Form 20F. Later, we will conduct a question and answer session. Please note that this conference call is being recorded, and today's date is August 30th, 2021. I would now like to turn the conference call over to Dr. Albert Friesen, Chief Executive Officer of Medicare, Inc. Please go ahead, Dr. Friesen.

Thank you, Chris, and good morning to everybody on the call. We appreciate your interest and the time you've taken to participate on the call. Joining me today is the Chief Financial Officer, David Gerby, and Dr. Neil Owens, President and CEO. This morning, we'll be discussing the financial statements and the business for the second quarter of 2021. COVID has provided challenges to a lot of businesses, including Medicare. Despite the challenges, we are pleased with the positive trend of revenue and net income over the last few quarters. We experienced a modest but positive EBITDA for the second quarter of 2021, a positive change from the losses that had been reported in 2019 and the first half of 2020. The sales of Agristat have stabilized and we're pleased with the early stage performance of our December 2020 acquisition, Marley Drug. One of the reasons we acquired Marley Drug, a mail order pharmacy, was to expand our sales reach for Zipidemag and we're now exploring ways to further build on the pharmacy business. Our focus, ongoing focus of Business is the sales and marketing of Agristat, the growing of the Saipanemang business with more direct marketing to patients with the help of Marley Drug, as well as continuing the marketing to healthcare providers. The revenue for the second quarter of 21 was $5,009,000, which is up substantially from 2020 quarters due mainly to the added revenue from Marley Drug. and up slightly from Q1-21. Agristar revenue of $2.8 million is similar to the previous quarters, as was Marley Drug at $1.87 million, and Zypinamang was up a bit at $403,000. As mentioned before, Medicare has transitioned away from the sales and marketing of REDS device which reduced significantly operating expenses and associated losses while retaining the value in sensible medical. Excuse me. The main focus at present is the sales and marketing of Agristats, Lipidomag, and further leveraging Marley Drug Pharmacy. We are pleased with the few quarters investments in our programs and onboarding of new products will provide both growth and revenue profits for the coming quarters and years. Medicare has expanded business with a great team, energy, talent, and experience. I'll now turn over the call to Chief Financial Officer David Kirby.

David Kirby Thank you, Bert, and good morning, everyone. A couple of quick items to note before I start. All dollar figures are in Canadian dollars unless otherwise noted by each presenter. And as a reminder, you can obtain a complete copy of our financial statements for the year ended December 31st, 2020, and the quarter ended June 30th, 2021, along with previous financial statements on the investor page of our website and a copy of all financial statements and management discussion analysis can be obtained from SEDAR.com. That's S-E-D-A-R.com. For the second quarter, revenues were $5.09 million, an increase of $150,000 from the previous quarter, and $2.67 million from the comparable quarter in 2020. The increase in revenues between the two years was primarily a result of the Marley drug acquisition. Agristat revenues were $2.79 million, consistent with the prior quarter, and slightly higher than the comparable period in 2020. Zepidemag revenues increased to $403,000 for the second quarter, an increase of $161,000 from the prior quarter and up from $103,000 in the second quarter of 2020. The increase in revenues from Zepidemag resulted from more aggressive marketing and being able to sell the product through Marley Drug, giving easier access to the medication for the consumer. As a result of the acquisition of Marley Drug, which was completed on December 17, 2020, The company recorded revenue of $1.86 million during the second quarter and at June 30, 2021, which was approximately $200,000 lower than the prior quarter for Marley Drug. Cost of the goods sold remained at a constant percentage this quarter compared to the prior quarter at just over 40%. Selling expenses for 2020 totaled $2.5 million in the second quarter compared to $2.8 million in the first quarter. The company consistently looks at ways to gain efficiencies at its operation and some efficiencies were realized causing selling expenses to moderately decrease in the quarter. General and administrative expenses were flat in the second quarter compared to the previous quarter at $571,000 and $585,000 respectively. The company is working very hard to reduce general and administrative expenses where possible and costs have been substantially reduced from the second quarter of 2020 where they were $770,000. Research and development expenses totaled $765,000 for the second quarter of 2021 and $100,000 for the comparable period in 2020. The increase is primarily a result of different levels of research and development during any particular quarter and potential refunds and payments of fees paid to governing agencies. This resulted in a net loss for the second quarter of 2021 of $639,000 which equated to six cents a share compared to income of $19,000 or nil per share for the second quarter of 2020. Adjusted EBITDA for the second quarter was $158,000 compared to adjusted EBITDA of $263,000 for the comparable period in 2020. The company is exposed to fluctuating currencies and in this quarter this negatively affected the company by approximately $200,000 as the Canadian dollar gained strength. As of June 30, 2021, the company had cash totaling $2.46 million compared to $2.7 million as of December 31, 2020. as of June 30th, 2021. The company had net working capital of $3 million compared to net working capital at December 31st, 2020 of $3.2 million. The company does not have any debt recorded on its statement of financial position. However, we are in the process of finalizing a loan with a commercial bank to replenish the cash and reestablish liquidity due to the Marley Drug acquisition. I want to remind you that there will be an opportunity at the end of today's call for you to ask questions regarding the financial results of the company as a whole. And with that, I would like to turn the call over to our President and Chief Operating Officer, Dr. Neil Owens, for some additional commentary regarding our operations.