Reports Results for Second Quarter 2018

Online mail-order pharmacy exceeds 100,000 prescription volume for first time in history

CINCINNATI--(), Inc. (OTC: HEWA) has announced today that its core consumer prescription sales for the second quarter ended June 30, 2018, increased 7% to $3,085,031 compared to $2,880,563 for the second quarter of 2017. Overall revenues declined by 1.3% to $3,850,691 compared to $3,901,841 for the second quarter of 2017 as a result of regulatory requirements that negatively impacted over-the-counter sales for the period. is a Verified Internet Pharmacy Practice Sites (VIPPS) accredited online and mail-order pharmacy licensed and/or authorized to sell and deliver prescriptions to all 50 states. The Company attributed its 2018 second-quarter growth in prescription sales to strong customer retention and targeted advertising campaigns, which benefited from a positive article published in a leading consumer magazine in April 2018.

We achieved another company milestone, processing over 100,000 prescriptions this quarter as we continue to provide an affordable option for consumers to purchase their prescription medication. Along with the growth in patients and prescription fills, we are proud to announce another quarter of sales growth in our core consumer prescription business. This prescription sales growth was achieved alongside substantial prescription price reductions,” said Joseph Peters, the Company’s President and CEO.

During the quarter, we also completed the installation of our $1.1 million robotics equipment. In the short time that the equipment has been operational, we have realized increased throughput, improved quality control and operating efficiencies resulting in lower fulfillment costs,” Peters added. “We believe our investments in automation and marketing initiatives during the first half of 2018 position us well for the future. Our team remains dedicated to providing our patients with excellent pharmacy experiences through compassion, convenience and transparency.”

The Company reported a net loss of $493,280 for the six months ended June 30, 2018, compared to net income of $487,149 for the same period in 2017.

In the three and six months ended June 30, 2018, Adjusted EBITDA was $77,122 and $(85,152), respectively, as compared to Adjusted EBITDA of $403,372 and $636,269, respectively, for the three and six months ended June 30, 2017. Adjusted EBITDA is a non-GAAP financial measure. Definitions and reconciliations to GAAP measures are provided below.

2018 Overview:

Net Sales: Core consumer prescription sales were $3,085,031 for the three months ended June 30, 2018, as compared to $2,880,563 for the same period of 2017, an increase of $204,468, or 7%. For the six months ended June 30, 2018, core consumer prescription sales were $5,897,810, an increase of $407,970, or 7%, over the $5,489,840 of sales reported for the same period in 2017. The sales growth was achieved despite substantial prescription price reductions.

The number of prescriptions shipped for the three and six months ended June 30, 2018, was 100,499 and 192,733, representing increases of 11,062 (12%) and 21,106 (12%), respectively, compared to the prior-year periods. Over-the-counter product net sales were $672,274 for the three months ended June 30, 2018, a decrease of $196,503, or 23% from $868,777 in the comparable period in 2017. For the six months ended June 30, 2018, over-the-counter product sales were $1,346,073, a $170,149 or 11% decrease from $1,516,221 of sales reported for the same period in 2017. The decline in over-the-counter product sales was directly attributable to additional regulatory requirements imposed on the sale of certain products, which mandated the receipt of personal documentation to process the sale.

Gross Profit: Gross profit for the three and six months ended June 30, 2018, was $2,453,243 and $4,815,211, resulting in decreases of $125,458 and $63,258, respectively, as compared to the same periods of 2017. The decreases are due to the decline in over-the-counter sales and prescription pricing reductions.

SG&A Expenses: SG&A expenses were $2,539,943 and $5,184,346 for the three and six months ended June 30, 2018, resulting in increases of $354,073 (16%) and $845,032 (19%), respectively, compared to the same periods of 2017. Increases in 2018 resulted primarily from volume-related expenses such as increased staffing, freight costs and payment processing fees, and marketing and advertising expenses.

Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Net sales $ 3,850,691 $ 3,901,841 $ 7,435,302 $ 7,282,305
Cost of sales   1,397,448     1,323,140     2,620,091     2,403,836  
Gross profit 2,453,243 2,578,701 4,815,211 4,878,469
Selling, general and administrative expenses   2,539,943     2,185,870     5,184,346     4,339,314  
Net income (loss) from operations (86,700 ) 392,831 (369,135 ) 539,155
Interest expense   65,829     27,413     124,145     52,006  
- -
Net income (loss) (152,529 ) 365,418 (493,280 ) 487,149
Preferred stock:

Series B convertible contractual dividends

  (85,558 )   (91,548 )   (171,116 )   (183,093 )


Net income (loss) attributable to common stockholders

$ (238,087 ) $ 273,870   $ (664,396 ) $ 304,056  
Per share data:
Net income (loss) – basic $ (0.00 ) $ 0.01 $ (0.01 ) $ 0.01
Net income (loss) – diluted $ (0.00 ) $ 0.01 $ (0.01 ) $ 0.01
Series B convertible contractual dividends   (0.00 )   0.01     (0.00 )   (0.00 )
Net income (loss) attributable to common stockholders -
- basic $ (0.00 ) $ 0.01   $ (0.01 ) $ 0.01  
- diluted $ (0.00 ) $ 0.01   $ (0.01 ) $ 0.01  
Weighted average common shares outstanding
- basic   48,725,670     45,473,820     48,477,206     44,080,487  
- diluted   48,725,670     46,258,274     48,477,206     44,899,941  

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


Three Months Ended Six Months Ended
June 30, June 30,
2018   2017 2018   2017
Net income ( loss) $ (152,529 ) $ 365,418 $ (493,280 ) $ 487,149
Non-GAAP adjustments:
Interest expense 65,829 27,413 124,145 52,006
Depreciation and amortization 24,611 19,994 40,941 42,738
Stock-based compensation 139,211 72,661 235,235 136,490
Gain on settlement of accounts payable - (95,814 ) - (95,814 )
Impairment loss website development costs - 13,700 - 13,700
Loss on disposal of equipment   -     -     7,807     -  
Adjusted EBITDA $ 77,122   $ 403,372   $ (85,152 ) $ 636,269  

About, Inc. (OTC Pink:HEWA) is a trusted VIPPS-accredited online pharmacy based in Florence, Kentucky. The Company is focused on the out-of-pocket prescription market, which is expected to grow to over $50 billion in 2018. With a mission to provide affordable healthcare to every American by focusing on technology that is revolutionizing prescription delivery, has become the largest VIPPS-accredited online pharmacy in the United States exclusively servicing the cash market. is licensed or authorized to ship prescription medication to all 50 states and sells only drugs that are FDA-approved and legal for sale in the United States. Visit online at

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, cyberattacks, access to sufficient inventory, government regulation and taxation, payments and fraud. More information about factors that potentially could affect's financial results is included in's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent filings on

Use of Non-GAAP Financial Measures, 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 Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA). In addition to adjusting net loss to exclude interest, taxes, depreciation and amortization, Adjusted EBITDA also excludes stock-based compensation, and certain other nonrecurring charges. Adjusted EBITDA is not a measure 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 investors, bankers and other stakeholders an additional view of the Company`s operations that, when coupled with the GAAP results, provides a more complete understanding of the Company’s financial results.

Adjusted EBITDA should not be considered as an alternative to net loss or to net cash 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.

Contacts, Inc.
Joseph Peters, 800-748-7001

Contacts, Inc.
Joseph Peters, 800-748-7001