41% Growth in 340B Contract Service Revenue and Momentum in Prescription Volumes Drive Positive Cashflow from Operations MIAMI, Aug. 14, 2024 /PRNewswire/ -- Progressive Care Inc. (OTCQB:RXMD) ("Progressive Care" or the "Company"), a personalized healthcare services and technology provider, today announced financial results for its second quarter of 2024. The Company reported second quarter revenues of approximately $13.5 million, a 17% increase compared to revenues reported in the second quarter of 2023. Results reflect continued increases in revenue generated from multiple 340B pharmacy service agreements secured late last year and increased prescription volumes at the Company's PharmcoRx pharmacies. "Progressive Care continues to benefit from strong momentum in our 340B and pharmacy business, contributing to record-setting growth and margins, and most importantly, driving positive cashflow from operations," said Charles M. Fernandez, Chairman and CEO of Progressive Care Inc. "Our results clearly demonstrate our ability to successfully deliver value to the entire spectrum of healthcare stakeholders including patients, providers, long-term care facilities and covered 340B entities. In the months ahead, through our combination with NextPlat and our plans to invest in the further expansion of our services and technology platforms, we believe we can continue to further execute on our mission to improve the business of healthcare and the quality of care delivered to patients." Second Quarter 2024 Financial Highlights: Total revenues increased by approximately $1.9 million, or 17%, to approximately $13.5 million during the three months ended June 30, 2024, compared to approximately $11.6 million in the prior year period. Prescription revenue, net of pharmacy benefit managers ("PBM") fees, increased by approximately $1.1 million, or 11%, to approximately $10.5 million during the second quarter of 2024, compared to approximately $9.4 million in the prior year period. 340B contract revenue was approximately $3.0 million during the second quarter of 2024, an increase of approximately $0.9 million, or 41%, compared to approximately $2.1 million in the same prior year period. The increase was primarily attributable to an increase in new 340B contracts that were secured late last year. Overall gross profit margin in the second quarter of 2024 was approximately 35%, versus approximately 31% in the second quarter of 2023. Second quarter of 2024 results include a non-cash goodwill impairment charge of approximately $0.7 million and a non-cash intangible assets impairment charge of approximately $9.1 million. The Company conducts ongoing impairment testing on the estimated fair value of goodwill and intangible assets in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). Fair value methodologies for intangible assets include estimates of future cashflows related to the Company's 340B pharmacy service agreements. These estimates of future cash flows are subject to change due to multiple external factors including the 340B covered entity's patient outcomes and adherence with program compliance requirements. As of June 30, 2024, there was no remaining goodwill and approximately $4.0 million of intangibles assets to be amortized over the next four years. Cash balance as of June 30, 2024 was approximately $8.5 million as compared to approximately $7.9 million as of December 31, 2023. The Company generated approximately $0.8 million of cash from operating activities for the second quarter of 2024. Organizational Highlights and Recent Business Developments: On April 12, 2024, NextPlat announced a proposed merger with Progressive Care Inc. in an all-stock transaction which is expected to provide annual operating cost reductions. On August 6, 2024, the Company filed the definitive proxies regarding the proposed business combination and set September 13, 2024, as the Annual Meeting date for the shareholder vote. If approved by shareholders at the Annual Meeting, and subject to customary closing conditions and requirements, the Company anticipates completing the transaction in early October. Business development activities targeting 340B covered entities conducted late last year combined with enhanced sales efforts and resources dedicated to long-term care and assisted living facilities launched earlier this year, have contributed to increased revenue and growth in prescription volumes at its PharmcoRx pharmacies. The Company's focus on providing high-touch, data-driven personalized patient care services at its concierge PharmcoRx pharmacies is a significant differentiator in the market compared to the broader "commodity" retail sector which is currently closing thousands of locations. Summary Financials for the Three Months Ended June 30, 2024 and 2023: Note on Financial Presentation On July 1, 2023, NextPlat, Mr. Charles Fernandez, Chairman and Chief Executive Officer of the Company, and Mr. Rodney Barreto, Vice-Chairman of the Company, exercised their common stock purchase warrants in Progressive Care and collectively owned 53% of Progressive Care's voting common stock as of such date. In connection with such change in control on July 1, 2023, the application of push-down accounting created a new basis of accounting for all assets and liabilities based on their fair value at the date of acquisition. As a result, our financial results of operations subsequent to the acquisition on July 1, 2023 have been segregated to indicate pre-acquisition and post-acquisition periods. The pre-acquisition period through June 30, 2023 is referred to as the "Predecessor". The post-acquisition period, July 1, 2023 and forward, includes the impact of push-down accounting and is referred to as the "Successor". Successor Predecessor Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 $ Change