SEC Filing - MedAvail

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medavail-20230413

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 13, 2023

MEDAVAIL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware

001-36533

90-0772394

(State or other jurisdiction of

incorporation)

(Commission File Number)

(I.R.S. Employer

Identification Number)

4720 East Cotton Gin Loop, Suite 220,

Phoenix, Arizona

85040

(Address of principal executive offices)

+1 (905) 812-0023

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.001 per share	MDVL	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On April 13th, 2023, MedAvail Holdings, Inc. ("MedAvail" or the "Company") issued a press release regarding its financial and operational results for the year and three months ended December 31st, 2022. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The press release includes a discussion of Operating Results and Adjusted EBITDA, non-GAAP (generally accepted accounting principles) financial measures. The press release also includes reconciliations of those measures to the most directly comparable financial measures calculated and presented in accordance with GAAP.

This information is intended to be furnished under Items 2.02 and 9.01 of this Current Report on Form 8-K, including Exhibit 99.1, and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), except as shall be expressly set forth by specific reference in such a filing.

Item 7.01 Regulation FD Disclosure.

On April 13th, 2023, MedAvail hosted a conference call and webcast to discuss the Company's financial and operational results for the year and three months ended December 31st, 2022.

Additionally, attached as Exhibit 99.2 to this Current Report on Form 8-K is an investor presentation that the Company may use in presentations to investors beginning April 13, 2023.

The information included in this Item 7.01 and in Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The Company undertakes no duty or obligation to update or revise information included in this Report or in the Exhibit 99.1.

Item 9.01 Financial Statement and Exhibits.

(d) Exhibits


Exhibit No.						Description
99.1						MedAvail Holdings, Inc. Press Release dated April 13, 2023
99.2						MedAvail Holdings, Inc. Investor Presentation

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	MEDAVAIL HOLDINGS, INC.

Date: April 13, 2023	By:	/s/ Ramona Seabaugh
		Ramona Seabaugh Chief Financial Officer

Document

Exhibit 99.1

MedAvail Reports Fourth Quarter and Full-Year 2022 Financial Results

PHOENIX, Ariz. GlobeNewswire – April 13, 2023 – MedAvail Holdings, Inc. (Nasdaq: MDVL) (“MedAvail”), an innovative pharmacy technology company, today reported financial results for the three months and full-year ended December 31, 2022.

“Since assuming the role of CEO in January 2022, I have been impressed by the many growth opportunities addressable by both our pharmacy services and pharmacy technology solutions,” said Mark Doerr, Chief Executive Officer of MedAvail. “However, I believe it is in the best interest of our company to balance topline growth with an alternative path that targets accelerated profitability. As such, we made the difficult decision earlier this year to restructure and sell a majority of our SpotRx pharmacy services assets to CVS. This action will reduce our operating expense run rate by $35 million to $37 million this year, and our annual cash usage by approximately 65%.”

“As we progress through 2023, we will be focused exclusively on our MedCenter pharmacy technology business as a lean and nimble organization capable of responding quickly to new opportunities as they emerge, primarily within the primary care and urgent care channels where we currently have a majority of our dispensing MedCenters. Longer term, we see opportunities in additional channels and states where we think automated prescription dispensing can play an important role in the future pharmacy landscape.”

“With our recently completed financing, we have a strengthened balance sheet that we believe will support our pharmacy technology growth initiatives, intended to allow us to progress toward profitability without the need for an additional equity capital raise. I am optimistic for what we can achieve as a company this year, and I believe we have created a foundation from which to drive strong, profitable growth over the long-term, to the benefit of our partners, patients and shareholders.”

Recent Highlights

•Completed a successful $16 million private placement in March 2023.

•Announced a strategic restructuring which included the sale of certain assets of the company’s SpotRx pharmacy services business to CVS.

•Post the restructuring, the company currently operates 32 net cumulative dispensing MedCenters in our continuing technology focused business.

Fourth Quarter and Full-year 2022 Highlights

•Full year revenue exceeded $43 million, approximately a 95% increase over 2022.

•Achieved a significant milestone with the successful completion of the Epic Willow integration and the availability of the MedCenter platform in the Epic App Orchard Gallery.

•Completed a successful $50 million private placement by July 2022.

•Completed a rewrite of the MedDispense software intended to enable greater flexibility and faster deployment of MedCenters.

Exhibit 99.1

Financial Outlook

MedAvail expects stand-alone technology revenue for 2023 to be approximately $3 million, which would represent greater than 100% growth over 2022 stand-alone technology revenue of $1.4 million (excluding revenue attributed to SpotRx).

MedAvail further expects full-year 2023 gross margins to be in excess of 60%.

In addition, the company expects to place an additional 25 net new dispensing MedCenters, which would result in 57 cumulative net dispensing MedCenters generating revenue by the end of 2023.

Conference Call

MedAvail will host a conference call at 1:30 p.m. PT / 4:30 p.m. ET on Thursday, April 13, 2023, to discuss its fourth quarter and full-year 2022 financial results. The conference call can be accessed live by dialing (877) 704-4453 for domestic callers or (201) 389-0920 for international callers and referring to Conference ID: 13737951. A webcast of the conference call can be accessed at https://investors.medavail.com. The webcast will be archived and available for replay for at least 90 days after the event.

About MedAvail

MedAvail Holdings, Inc. (NASDAQ: MDVL) is a pharmacy technology company, providing turnkey in-clinic pharmacy services through its proprietary robotic dispensing platform, the MedAvail MedCenter. MedAvail helps patients to optimize drug adherence, resulting in better health outcomes. Learn more at www.medavail.com.

Non-GAAP Financial Measures

MedAvail refers to certain financial measures that are not recognized under U.S. generally accepted accounting principles ("GAAP") in this press release, including adjusted EBITDA. See the schedules to this press release for additional information and reconciliations of such non-GAAP financial measures.

Forward Looking Statements

Certain statements included in this press release that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "should," "would," "plan," "predict," "potential," "seem," "seek," "future," "outlook," "project," and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding MedAvail's business strategy and market opportunity; preliminary estimates of selected financial results, potential future revenue and cost savings projections and expectations for growth and profitability; restructuring and reorganization targets, customer demand and expansion plans; margin, utilization and cost reduction improvements; customer partnerships and potential financing transactions. These statements are based on various assumptions, whether or not identified in this press release, and on the current

Exhibit 99.1

expectations of MedAvail's management and are not predictions of actual performance. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements, including but not limited to our ability to successfully achieve the benefits of a pharmacy technology only business and the efficiencies related to a restructuring and reorganization, and risks relating to our ability to successfully consummate potential strategic, financing and restructuring transactions, as well as other risks discussed under the heading "Risk Factors" in MedAvail’s recent Annual Report on Form 10-K and, MedAvail’s Quarterly Reports on Form 10-Q, and other filings MedAvail makes with the Securities and Exchange Commission ("SEC") in the future. Any preliminary estimates regarding selected 2022 financial results are further subject to the completion of management’s and the audit committee’s final reviews and MedAvail’s other financial closing procedures and are therefore subject to change. You should not place undue reliance on such preliminary information and estimates because they may prove to be materially inaccurate. While we believe that such preliminary information and estimates are based on reasonable assumptions, actual results may vary, and such variations may be material. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. These forward-looking statements speak only as of the date hereof and MedAvail specifically disclaims any obligation to update these forward-looking statements.

Contacts:

Investor Relations

Steven Halper/Caroline Paul

Managing Directors, LifeSci Advisors

ir@medavail.com

SOURCE MedAvail Holdings, Inc.

Exhibit 99.1

MEDAVAIL HOLDINGS, INC.

Consolidated Statements of Operations

(in thousands, except share and per share data)

(Unaudited)


	Three Months Ended December 31,				Years Ended December 31,
	2022		2021		2022		2021
Revenue:
Pharmacy and hardware revenue	$	11,258	$	6,954	$	42,468	$	21,119
Service revenue	92		326		641		1,010
Total revenue	11,350		7,280		43,109		22,129
Cost of products sold and services:
Pharmacy and hardware cost of products sold	11,432		7,562		40,259		21,306
Service costs	44		80		265		506
Total cost of products sold and services	11,476		7,642		40,524		21,812
Operating expense:
Pharmacy operations	3,937		4,068		15,907		13,496
General and administrative	4,770		5,544		23,499		22,277
Selling and marketing	1,748		2,148		8,486		7,204
Research and development	163		248		1,115		849
Total operating expense	10,618		12,008		49,007		43,826
Operating loss	(10,744)		(12,370)		(46,422)		(43,509)
Other gain (loss), net	—		—		—		206
Interest income	1		5		2		79
Interest expense	(327)		(261)		(1,172)		(589)
Loss before income taxes	(11,070)		(12,626)		(47,592)		(43,813)
Income tax expense	—		—		(24)		(2)
Net loss and comprehensive loss	$	(11,070)	$	(12,626)	$	(47,616)	$	(43,815)
Net loss per share - basic and diluted	$	(0.14)	$	(0.38)	$	(0.72)	$	(1.34)
Weighted average shares outstanding - basic and diluted	80,105,540		32,851,997		65,776,384		32,656,325

Exhibit 99.1

MEDAVAIL HOLDINGS, INC.

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(Unaudited)


	December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	11,444	$	19,689
Restricted cash	676		400
Accounts receivable (net of allowance for doubtful accounts of $239 thousand for 2022 and $66 thousand for 2021)	2,209		1,189
Inventories	6,937		3,916
Prepaid expenses and other current assets	2,663		2,191
Total current assets	23,929		27,385
Property, plant and equipment, net	6,455		5,692
Intangible assets, net	465		2,300
Right-of-use assets	2,085		2,538
Other assets	198		228
Total assets	$	33,132	$	38,143
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	1,675	$	2,477
Accrued liabilities	1,193		1,530
Accrued payroll and benefits	2,213		2,733

Deferred revenue	152		83
Current portion of lease obligations	708		682
Total current liabilities	5,941		7,505
Long-term debt, net	4,798		9,538
Long-term portion of lease obligations	1,569		2,027
Total liabilities	12,308		19,070
Commitments and contingencies
Stockholders' equity:
Common shares ($0.001 par value, 300,000,000 and 100,000,000 shares authorized, 81,169,719 and 32,902,048 shares issued and outstanding at December 31, 2022 and 2021, respectively)	81		33
Warrants	11,148		1,373
Additional paid-in-capital	256,229		216,685
Accumulated other comprehensive loss	(6,928)		(6,928)
Accumulated deficit	(239,706)		(192,090)
Total shareholders’ equity	20,824		19,073
Total liabilities and shareholders’ equity	$	33,132	$	38,143

Exhibit 99.1

MEDAVAIL HOLDINGS, INC.

Supplemental Financial Information - Segments

(in thousands)

(Unaudited)


	Retail Pharmacy Services		Pharmacy Technology		Total
Three Months Ended December 31, 2022
Revenue:
Pharmacy and hardware revenue:
Retail pharmacy revenue	$	11,095	$	—	$	11,095
Hardware	—		61		61
Subscription	—		102		102
Total pharmacy and hardware revenue	11,095		163		11,258
Service revenue:
Software integration	—		—		—
Software	—		(17)		(17)
Maintenance and support	—		43		43
Installation	—		55		55
Professional services and other	—		11		11
Total service revenue	—		92		92
Total revenue	11,095		255		11,350
Cost of products sold and services	11,343		133		11,476
Segment gross profit	$	(248)	$	122	$	(126)


	Retail Pharmacy Services		Pharmacy Technology		Total
Three Months Ended December 31, 2021
Revenue:
Pharmacy and hardware revenue:
Retail pharmacy revenue	$	6,846	$	—	$	6,846
Hardware	—		—		—
Subscription	—		108		108
Total pharmacy and hardware revenue	6,846		108		6,954
Service revenue:
Software integration	—		—		—
Software	—		134		134
Maintenance and support	—		47		47
Installation	—		—		—
Professional services and other	—		145		145
Total service revenue	—		326		326
Total revenue	6,846		434		7,280
Cost of products sold and services	6,901		741		7,642
Segment gross profit	$	(55)	$	(307)	$	(362)

Exhibit 99.1

MEDAVAIL HOLDINGS, INC.

Supplemental Financial Information - Segments

(in thousands)

(Unaudited)


	Retail Pharmacy Services		Pharmacy Technology		Total
Year Ended December 31, 2022
Revenue:
Pharmacy and hardware revenue:
Retail pharmacy revenue	$	41,747	$	—	$	41,747
Hardware	—		297		297
Subscription	—		424		424
Total pharmacy and hardware revenue	41,747		721		42,468
Service revenue:

Software	—		210		210
Maintenance and support	—		170		170
Installation	—		132		132
Professional services and other	—		129		129
Total service revenue	—		641		641
Total revenue	41,747		1,362		43,109
Cost of products sold and services	39,803		721		40,524
Segment gross profit	$	1,944	$	641	$	2,585


	Retail Pharmacy Services		Pharmacy Technology		Total
Year Ended December 31, 2021
Revenue:
Pharmacy and hardware revenue:
Retail pharmacy revenue	$	20,203	$	—	$	20,203
Hardware	—		470		470
Subscription	—		446		446
Total pharmacy and hardware revenue	20,203		916		21,119
Service revenue:

Software	—		259		259
Maintenance and support	—		161		161
Installation	—		39		39
Professional services and other	—		551		551
Total service revenue	—		1,010		1,010
Total revenue	20,203		1,926		22,129
Cost of products sold and services	20,031		1,781		21,812
Segment gross profit	$	172	$	145	$	317

Exhibit 99.1

Non-GAAP Financial Measures

To supplement our consolidated condensed financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: EBITDA, and adjusted EBITDA. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We define Adjusted EBITDA for a particular period as net (loss) income before interest, taxes, depreciation and amortization, and as further adjusted for non-recurring revenue from stock-based compensation expense.

We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.

There are a number of limitations related to the use of non-GAAP financial measures. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluating these non-GAAP financial measures together with their relevant financial measures in accordance with GAAP.

Exhibit 99.1

MEDAVAIL HOLDINGS, INC.

Unaudited Reconciliation of GAAP to Non-GAAP Measures

(in thousands)


	Three Months Ended December 31,				Years Ended December 31,
	2022		2021		2022		2021
Net loss	$	(11,070)	$	(12,626)	$	(47,616)	$	(43,815)
Adjustments to calculate EBITDA:
Interest income	(1)		(5)		(2)		(79)
Interest expense	327		261		1,172		589
Income tax expense	—		—		24		2
Depreciation and amortization (1)	1,465		569		3,998		1,827
EBITDA	$	(9,279)	$	(11,801)	$	(42,424)	$	(41,476)
Adjustments as follows:
Inventory cost adjustment	—		626		—		626
Share-based compensation expense	555		257		2,296		1,205
Adjusted EBITDA	$	(8,724)	$	(10,918)	$	(40,128)	$	(39,645)

(1) Excludes $158 thousand and $203 thousand in operating lease amortization for the three months ended December 31, 2022, and 2021, respectively. Excludes $657 thousand and $750 thousand in operating lease amortization for the years ended December 31, 2022, and 2021, respectively.

Document

Exhibit 99.2