Inspire Veterinary Partners Reports Second Quarter 2024 Financial Results

Rhea-AI Summary

Inspire Veterinary Partners (NASDAQ:IVP) reported its Q2 2024 financial results, showing mixed performance. Total revenue decreased by 2% to $4.4 million compared to the prior year period. Services revenue increased by 1% to $3.2 million, while product revenue declined by 9% to $1.2 million. For the six-month period, total revenue increased by 5% to $9.2 million. The company made progress in reducing operating expenses, with Q2 2024 operating expenses down 11.8% compared to Q1 2024. Net loss increased to $3.4 million in Q2 2024 from $1.2 million in the prior year period. Inspire strengthened its balance sheet through a public offering after the quarter's end, aiming to provide financial flexibility for future growth.

Positive

• Services revenue increased by 1% to $3.2 million in Q2 2024
• Total revenue for the six-month period increased by 5% to $9.2 million
• Q2 2024 operating expenses decreased by 11.8% compared to Q1 2024
• Loss from operations improved by 16.4% in Q2 2024 compared to Q1 2024
• Earnings per share improved by 17.6% to $(0.70) in Q2 2024 from $(0.85) in Q1 2024
• Completed a public offering of 6,000,000 units at $1.00 per unit to strengthen the balance sheet

Negative

• Total revenue decreased by 2% to $4.4 million in Q2 2024
• Product revenue declined by 9% to $1.2 million in Q2 2024
• Net loss increased to $3.4 million in Q2 2024 from $1.2 million in the prior year period
• General and administrative expenses increased to $2.2 million from $1.9 million in the prior year period
• Cash and cash equivalents were only $7,600 as of June 30, 2024

Financial Analyst

Inspire Veterinary Partners' Q2 2024 results paint a mixed picture. While total revenue decreased by 2% year-over-year to $4.4 million, there are some positive signs. The company's cost-cutting measures are showing results, with Q2 2024 operating expenses down 11.8% compared to Q1 2024. This led to a 16.4% reduction in loss from operations and a 17.6% improvement in earnings per share sequentially.

However, the company's financial position remains precarious. With only $7,600 in cash as of June 30, 2024, the recent public offering was crucial. The $6 million raised should provide some breathing room, but it's essential to monitor how quickly this cash is burned through. The company's ability to achieve profitability and positive cash flow in the near term will be critical for its long-term viability.

Market Research Analyst

The pet care industry has been growing steadily, but Inspire's performance suggests challenges in capturing market share. The 1% increase in services revenue is positive but lags behind industry growth rates. The 9% decrease in product revenue is concerning, indicating potential issues with pricing, product mix, or customer retention.

The company's strategy of growth through acquisitions in a fragmented market has merit, but execution is key. The recent public offering provides capital for this strategy, but Inspire must demonstrate it can integrate acquisitions effectively and drive synergies. The focus on cost control is prudent, but the company needs to balance this with investments in growth to avoid falling behind competitors in this dynamic market.

Legal Expert

From a legal perspective, Inspire's recent public offering and its status as a publicly traded company bring increased regulatory scrutiny. The company must ensure strict compliance with SEC reporting requirements and maintain transparent communication with shareholders. The mention of "third-party consulting arrangements" for investor communications and customer outreach should be carefully managed to avoid any potential conflicts of interest or disclosure issues.

Additionally, as Inspire pursues its acquisition strategy, it must conduct thorough due diligence to mitigate risks associated with each transaction. This includes assessing potential liabilities, ensuring regulatory compliance in different jurisdictions and properly structuring deals to protect shareholder interests. The company's ability to navigate these legal complexities will be important for its long-term success and risk management.

VIRGINIA BEACH, VA / ACCESSWIRE / August 14, 2024 / Inspire Veterinary Partners, Inc. (NASDAQ:IVP) ("Inspire" or the "Company"), an owner and provider of pet health care services throughout the U.S., today reported its financial results for the second quarter and six months ended June 30, 2024.

Second Quarter 2024 Revenue Highlights Compared to Prior Year Period

• Total revenue of approximately 4.4 million, a decrease of 2%

• Services revenue of $3.2 million, an increase of 1%

• Product revenue of $1.2 million, a decrease of 9%

Six Month 2024 Revenue Highlights Compared to Prior Year Period

• Total revenue of approximately $9.2 million, an increase of 5%

• Services revenue of approximately $6.8 million, an increase of 8%

• Product revenue of $2.4 million, a decrease of 2%

Second Quarter 2024 Compared to First Quarter 2024

• Q2 2024 operating expenses down 11.8%

• Q2 2024 loss from operations lower by 16.4%

• Q2 2024 earnings (loss) per share improved by 17.6%, or $(0.70) vs. $(0.85)

"In the second quarter and first half of 2024, we made meaningful progress against our strategy to reposition the business for sustainable and profitable growth," said Kimball Carr, President & Chief Executive Officer of Inspire. "The steps implemented at the end of 2023 and early 2024 to improve operating efficiencies are evidenced by lower operating expenses, a reduced loss from operations, and an improvement in net loss per share, sequentially in the first half of 2024. As a result of these actions, Inspire aims to achieve clear line of sight toward a sustainable business model with the ongoing financial resources and liquidity needed to support the company's long-term strategy. After the close of the second quarter, we strengthened our balance sheet through the previously announced public offering, which is expected to provide us with the additional financial flexibility to drive revenue and earnings growth."

Carr added, "I believe the underlying value proposition of our growth strategy remains valid, and I'm confident that a renewed focus on fundamentals and effective delivery of cost transformation will restore profitability. The strategic investments and operational initiatives our team is executing across the organization are delivering results and we expect them to support our long-term growth and success. I look forward to building momentum into the second half of the year where we will remain focused on executing our acquisition strategy, building trust and preference for our best-in-class services and delivering value to shareholders."

Second Quarter 2024 Highlights Compared to Prior Year Period

Total revenue was $4.4 million for the second quarter of 2024, a decrease of 2% compared to total revenue of $4.5 million in the prior year period. Service revenue for the second quarter of 2024 increased 1% to $3.2 million compared to the prior year period, primarily driven by organic growth in existing clinic and animal hospital services and one new animal hospital acquired in the fourth quarter of 2023. Product revenue of $1.2 million decreased 9% compared to the prior year period driven primarily by customers purchasing less products per visit.

General and administrative expenses were $2.2 million for the second quarter of 2024 compared to $1.9 million in the prior year period. The increase was primarily due to the expenses generated by the Company's animal hospitals and clinics acquired, the cost of its public offering completed in the second quarter of 2024, and other third-party consulting arrangements entered into to increase investor communications, customer outreach and improve operations.

Net loss was $3.4 million for the second quarter of 2024 compared to a net loss of $1.2 million for the prior year period. The increase in net loss was attributable to the operating expenses associated with the Company's animal hospitals and clinics, the cost of its public offering completed in the second quarter of 2024, and other third-party consulting arrangements entered into to increase investor communications, customer outreach and improve operations.

Balance Sheet

As of June 30, 2024, the Company had cash and cash equivalents of approximately $7,600. Subsequent to the end of the second quarter of 2024, the Company announced on July 10th the closing of its previously announced public offering of 6,000,000 units, each unit consisting of either one share of the Company's Class A common stock or one pre-funded warrant to purchase one share of the Company's Class A common stock and one warrant to purchase one share of the Company's Class A common stock at a public offering price of $1.00 per unit.

About Inspire Veterinary Partners, Inc.

Inspire Veterinary Partners is an owner/operator of veterinary hospitals in the US. As the Company expands, it expects to acquire additional veterinary hospitals, including general practice, mixed animal facilities, and critical and emergency care.

For more information, please visit: www.inspirevet.com.

Connect with Inspire Veterinary Partners, Inc.

Facebook

https://www.facebook.com/InspireVeterinaryPartners/

LinkedIn

https://www.linkedin.com/company/inspire-veterinary-partners/

Forward-Looking Statements

This press release contains forward-looking statements regarding the Company's current expectations. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ include, but are not limited to, risks and uncertainties related to the satisfaction of customary closing conditions related to anticipated acquisitions, or factors that result in changes to the Company's anticipated results of operations related to acquisitions. These and other risks and uncertainties are described more fully in the section captioned "Risk Factors" in the Company's public filings made with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.

Investor Contact

TraDigital IR
Kevin McGrath
+1-646-418-7002
kevin@tradigitalir.com

General Inquires
Morgan Wood
Mwood@inspirevet.com

Inspire Veterinary Partners, Inc.
Unaudited Condensed Consolidated Balance Sheets

		June 30,				December 31,
		2024				2023
Assets
Current assets:
Cash and cash equivalents		$	7,658			$	178,961
Accounts receivable, net			39,720				28,573
Due from former owners			-				32,519
Inventory			574,593				571,512
Refundable income tax			-				151,796
Prepaid expenses and other current assets			1,580,239				388,759
Total current assets			2,202,210				1,352,120
Restricted cash - non-current			200,000				200,000
Property and equipment, net			7,849,271				7,949,144
Right-of-use assets			1,349,394				1,616,198
Other intangibles, net			2,105,229				2,513,028
Goodwill			8,147,590				8,147,590
Other assets			73,989				12,895
Total assets		$	21,927,683			$	21,790,975
Liabilities and Stockholder's Deficit
Current liabilities:
Accounts payable		$	3,717,966			$	3,206,594
Accrued expenses			941,076				858,334
Cumulative Series A preferred stock dividends payable			-				92,322
Operating lease liabilities			124,580				141,691
Loans payable, net of discount			3,313,925				1,713,831
Convertible notes payable			1,000,000				-
Convertible debentures, net of issuance costs			-				100,000
Notes payable, net of discount			3,316,147				1,469,043
Total current liabilities			12,413,694				7,581,815
Operating lease liabilities, non-current			1,450,332				1,514,044
Convertible debentures, net of issuance costs			-				-
Notes payable - noncurrent			11,177,975				13,483,375
Total liabilities			25,042,001				22,579,234
COMMITMENTS AND CONTINGENCIES (Note 13)
STOCKHOLDER'S EQUITY (DEFICIT)
Common stock - Class A, $0.0001 par value, 100 million shares authorized, 1,044,055 and 70,421 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.			104				7
Common stock - Class B, $0.0001 par value, 20 million shares authorized, 3,891,500 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.			389				389
Convertible series A preferred stock, $0.0001 par value, 1 million shares authorized, 27,229 and 403,640 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.			3				40
Additional paid in capital			25,129,506				20,426,562
Accumulated deficit			(28,244,320	)			(21,215,257	)
Total stockholder's equity (deficit)			(3,114,318	)			(788,259	)
Total liabilities and stockholder's equity (deficit)		$	21,927,683			$	21,790,975

Inspire Veterinary Partners, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2024				2023				2024				2023
Service revenue		$	3,220,238			$	3,200,694			$	6,765,837			$	6,273,579
Product revenue			1,170,143				1,288,732				2,456,111				2,498,362
Total revenue			4,390,381				4,489,426				9,221,948				8,771,941
Operating expenses
Cost of service revenue (exclusive of depreciation and amortization, shown separately below)			2,428,740				2,333,844				5,137,887				4,641,747
Cost of product revenue (exclusive of depreciation and amortization, shown separately below)			935,997				898,730				1,952,104				1,778,130
General and administrative expenses			2,218,734				1,885,801				5,092,077				3,687,460
Debt extinguishment loss			859,584				-				1,587,862				-
Depreciation and amortization			340,926				304,016				708,123				602,508
Total operating expenses			6,783,981				5,422,391				14,478,053				10,709,845
Loss from operations			(2,393,600	)			(932,965	)			(5,256,105	)			(1,937,904	)
Other income (expenses):
Interest income			-				5				2				6
Interest expense			(988,053	)			(285,376	)			(1,547,342	)			(830,811	)
Other expenses			(4,768	)			(9,458	)			(4,768	)			1,966
Total other expenses			(992,821	)			(294,829	)			(1,552,108	)			(828,839	)
Loss before income taxes			(3,386,421	)			(1,227,794	)			(6,808,213	)			(2,766,743	)
Benefit for income taxes			-				-				-				-
Net loss			(3,386,821	)			(1,227,794	)			(6,808,213	)			(2,766,743	)
Dividend on convertible series A preferred stock			(6,330	)			-				(220,850	)			-
Net loss attributable to class A and B common stockholders			(3,392,751	)			(1,227,794	)		$	(7,029,063	)		$	(2,766,743	)
Net loss per Class A and B common shares:
Basic and diluted		$	(0.70	)		$	(0.28	)		$	(1.56	)		$	(0.64	)
Weighted average shares outstanding per Class A and B common shares:
Basic and diluted			4,821,424				4,309,705				4,508,452				4,309,705

Inspire Veterinary Partners, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows

		Six Months Ended June 30,
		2024				2023
Cash flows from operating activities:
Net loss		$	(6,808,213	)		$	(2,766,743	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			688,308				602,508
Amortization of debt issuance costs			15,825				85,347
Amortization of debt discount			984,924				488,896
Amortization of operating right of use assets			266,804				87,911
Issuance of warrants to CEO			-				2,701
Issuance of class A common stock for services			286,696				-
Loss on debt modification			1,587,862				-
Issuance of class A common stock in connection with general release agreement			20,000				-
Issuance of Class A common stock and pre-funded warrants in connection with commitment shares			600,000				-
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable			(11,147	)			(99,217	)
Due from former owners			32,519				210,804
Inventory			(3,081	)			(119,856	)
Refundable income tax			151,796				-
Prepaid expenses and other current assets			(1,191,480	)			117,872
Other assets			(61,094	)			(94,224	)
Accounts payable			511,372				1,078,457
Accrued expenses			82,742				(27,291	)
Cumulative Series A preferred stock dividends payable			(92,322	)			-
Operating lease liabilities			(80,823	)			(74,125	)
Net cash used in operating activities			(3,019,312	)			(506,960	)
Cash flows from investing activities:
Purchase of property and equipment			(180,636	)			(119,532	)
Purchase of intangible assets			-				(4,016	)
Net cash used in investing activities			(180,636	)			(123,548	)
Cash flows from financing activities:
Proceeds from issuance of class A common stock and pre-funded warrants, net of issuance costs			3,375,458				-
Net proceeds from loans payable			1,467,935				1,000,000
Payments on loans payable			(2,440,627	)			(229,384	)
Proceeds from issuance of convertible series A preferred stock			200,000				-
Proceeds from convertible note payable			1,000,000				-
Repayment of note payable			(474,121	)			(371,183	)
Proceeds from issuance of convertible debentures			-				650,000
Repayment of convertible debentures			(100,000	)			-
Net cash provided by financing activities			3,028,645				1,049,433
Net increase (decrease) in Cash, cash equivalents and restricted cash			(171,303	)			418,925
Cash, cash equivalents and restricted cash, beginning of period			378,961				444,253
Cash, cash equivalents and restricted cash, end of period		$	207,658			$	863,178
Supplemental Disclosure of Cash Flow Information
Interest payments during the year		$	1,552,313			$	188,952
Income tax refund		$	151,796			$	-
Noncash investing and financing activity
Series A Preferred Stock Dividend		$	220,850			$	-

SOURCE: Inspire Veterinary Partners, Inc.

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FAQ

What was Inspire Veterinary Partners' (IVP) total revenue for Q2 2024?

Inspire Veterinary Partners' total revenue for Q2 2024 was $4.4 million, a 2% decrease compared to the prior year period.

How did Inspire Veterinary Partners' (IVP) services revenue perform in Q2 2024?

Inspire Veterinary Partners' services revenue increased by 1% to $3.2 million in Q2 2024 compared to the prior year period.

What was Inspire Veterinary Partners' (IVP) net loss for Q2 2024?

Inspire Veterinary Partners reported a net loss of $3.4 million for Q2 2024, compared to a net loss of $1.2 million in the prior year period.

How did Inspire Veterinary Partners (IVP) strengthen its balance sheet after Q2 2024?

After Q2 2024, Inspire Veterinary Partners completed a public offering of 6,000,000 units at $1.00 per unit to strengthen its balance sheet and provide financial flexibility.