Reports 27% Increase in Revenues; Named to Forbes List of Best Online Pharmacies

HealthWarehouse.com, Inc. (OTC:HEWA) announced today its results of operations for the three and six months ended June 30, 2023. The Company reported net sales for the second quarter of 2023 of $5.3 million, a 27% increase over the same period in 2022, resulting from strong growth in partner services and B2C revenue. The Company reported a net loss of $477,000 for the quarter and a net loss of $825,000 for the six months ended June 30, 2023.

HealthWarehouse.com, a technology company with a focus on healthcare e-commerce, sells and delivers prescription and over-the-counter medications to all 50 states as an Approved Digital Pharmacy through the National Association of Boards of Pharmacy (NABP). HealthWarehouse.com provides a platform focused on increasing access and reducing costs of healthcare products for consumers and business partners nationwide.

Joseph Peters, President and CEO, commented, “We continued to report strong revenue growth during the second quarter, resulting from growth in our partner services and direct-to-consumer (B2C) businesses. HealthWarehouse.com remains a leader in the industry, providing essential products and world-class service to our own customers and those of our healthcare partners. Our recent recognition as a top five online pharmacy by Forbes magazine, and as an affordable online option by a leading consumer magazine, are a testament to our incredible team and their dedication to our mission.”

HealthWarehouse.com continues to invest in proprietary technology to remain at the forefront of new developments and offerings in the world of healthcare, focusing on patient experience, operational efficiency, and scalability.

“We recently launched our new pharmacy software and are making our final preparations to launch our proprietary e-commerce platform during the third quarter. Additional launch-related expenses we incurred during the second quarter will improve future efficiencies, expand our healthcare partner offerings, allow for new application programming interfaces to customize our platform, and provide the necessary resources to grow and support our partner services and direct-to-consumer businesses. We remain committed to offering transparent and affordable healthcare solutions and providing world-class service levels while extending our position as a technology leader in the industry,” added Peters.

Overview of Results for Three and Six Months Ended June 30, 2023:

Net Sales: Total net sales for the three and six months ended June 30, 2023, were $5.3 million and $10.6 million, respectively, increasing by $1.1 million (26.8%) and $2.1 million (24.5%), respectively, versus the same periods in 2022.

Prescription sales were $4.5 million and $8.8 million for the three and six months ended June 30, 2023, respectively, an increase of $1.1 million (31.8%) and $2.0 million (28.7%), respectively, compared with the same periods in 2022. The increase in prescription sales was due to growth in partner services revenue and our direct-to-consumer (B2C) business.

Sales of over-the-counter products were $750,000 and $1.7 million for the three and six months ended June 30, 2023, respectively, an increase of $72,000 (10.6%) and $165,000 (11.1%), respectively, over the same periods in 2022, primarily due to higher partner services and marketplace sales.

Gross Profit: Gross profit for the three and six months ended June 30, 2023, was $3.2 million and $6.3 million, respectively, representing increases of $261,000 and $546,000, respectively, compared with the same periods in 2022. The increases were the result of higher sales volume, somewhat offset by lower margins on our direct-to-consumer prescription and over-the-counter and businesses. Gross margin percentages were 59.2% and 59.3% for the three and six month periods ended June 30, 2023, respectively, which were 9.7 and 8.1 percentage points lower, respectively, versus prior-year periods. The primary contributors to the reduction were (i) a higher percentage of partner services revenues, which generate lower margins than the B2C business, and (ii) year-over-year margins in the B2C prescription business decreased due to a more brand-name prescription drug sales. Those were offset in part by higher year-over-year margins in partner services.

Operating Expenses: Selling, general and administrative expenses were $3.6 million and $7.0 million for the three and six months ended June 30, 2023, respectively, which were increases of $449,000 (14.3%) and $867,000 (14.1%), respectively, compared to the same periods in 2022. Expense increases for shipping and supplies, salaries, stock-based compensation, telephone and software were principal factors. Those increases were offset by a reduction in advertising and marketing expenses. Approximately $191,000 of the increases can be attributed to the operational disruption and additional costs incurred related to the implementation of new software.

Net Income and Adjusted EBITDA: The Company reported net losses of $477,000 and $825,000 for the three and six months ended June 30, 2023, respectively, compared with net losses of $293,000 and $508,000, respectively, for the same periods in 2022.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”), as adjusted for stock-based compensation and certain non-recurring charges (“Adjusted EBITDA”), were $(152,000) for the three months and $(190,000) for the six months ended June 30, 2023. That compares with Adjusted EBITDA of $(21,000) and $43,000, respectively, for the three and six months ended June 30, 2022. EBITDA and Adjusted EBITDA are non-GAAP financial measures. Definitions of these non-GAAP terms and a reconciliation to GAAP measures are provided below.

Use of Non-­GAAP Financial Measures

HealthWarehouse.com, Inc. (the "Company") prepares its consolidated financial statements in accordance with the United States’ Generally Accepted Accounting Principles (GAAP). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses information regarding EBITDA and Adjusted EBITDA, which are commonly used. In addition to adjusting net income or net loss to exclude interest, taxes, depreciation and amortization (“EBITDA”), Adjusted EBITDA also excludes stock-based compensation, and certain nonrecurring charges. EBITDA and Adjusted EBITDA are not measures of performance defined in accordance with GAAP. However, Adjusted EBITDA is used internally in planning and evaluating the Company`s performance. Accordingly, management believes that disclosure of this metric offers lenders and other shareholders an additional view of the Company`s operations that, when coupled with GAAP results, provides a more complete understanding of the Company’s financial results.

Adjusted EBITDA should not be considered as an alternative to net income, net loss, or to net cash provided by or used in operating activities as a measure of operating results or of liquidity. It may not be comparable to similarly titled measures used by other companies, and it excludes financial information that some may consider important in evaluating the Company`s performance.

Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP)

About HealthWarehouse.com

HealthWarehouse.com, Inc. (OTCQB: HEWA), a technology company with a focus on healthcare e-commerce, sells and delivers prescription and over-the-counter medications to all 50 states as an Approved Digital Pharmacy through the National Association of Boards of Pharmacy (“NABP”). HealthWarehouse.com provides a platform focused on increasing access and reducing costs of healthcare products for consumers and business partners nationwide. Based in Florence, Kentucky, the Company operates America's Leading Online Pharmacy and is a pioneer in affordable healthcare. As one of the first National Association of Boards of Pharmacy Approved Digital Pharmacies, HealthWarehouse.com services the mission of providing affordable healthcare and incredible patient services to help Americans. Learn more at www.HealthWarehouse.com.

Forward-­Looking Statements

This announcement and the information incorporated by reference herein contain “forward-looking statements” as defined in federal securities laws, including but not limited to Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995, which statements are based on our current expectations, estimates, forecasts and projections. Statements that are not historical facts, including statements about the beliefs, expectations and future plans and strategies of the Company, are forward-looking statements. Actual results may differ materially from those expressed in forward looking statements or in management's expectations. Important factors which could cause or contribute to actual results being materially and adversely different from those described or implied by forward looking statements include, among others, risks related to competition, management of growth, access to sufficient capital to fund our business and our growth, new products, services and technologies, potential fluctuations in operating results, international expansion, outcomes of legal proceedings and claims, fulfillment center optimization, seasonality, commercial agreements, acquisitions and strategic transactions, foreign exchange rates, system interruption, cyber attacks, access to sufficient inventory, government regulation and taxation and fraud. More information about factors that potentially could affect HealthWarehouse.com's financial results is included in HealthWarehouse.com's audited Annual Reports and Quarterly Reports available at otcmarkets.com and in prior filings with the U.S. Securities and Exchange Commission.

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