Mednow to Buy Liver Specialty Group

Doctor writing out RX prescription selective focus

Canadian healthcare technology company Mednow Inc. (TSXV:MNOW) announced Tuesday that it has entered into an agreement to acquire Liver Care Canada Inc. and London Pharmacare Inc. (together, “Liver Specialty Group”) in London, Ontario. Thes proposed acquisitions will be Mednow’s second and third acquisition within the specialty pharmacy market and is expected to strengthen the company’s expertise in hepatological drugs. Mednow is a healthcare technology company, with its own digital pharmacies, offering telemedicine services as well as home doctor visits, genetic testing, mental health assessments and nutritionists.

As per each of the share purchase agreements, the digital pharmacy and virtual care company is expected to acquire all the issued and outstanding shares of each of the companies consisting of the Liver Specialty Group, for an aggregate initial cash payment of $650,000 and two subsequent earn-out payments for each of the companies consisting of the Liver Speciality Group in the amount of 0.1x revenue generated by each of the companies consisting of the Liver Specialty Group in each of its 2022 and 2023 financial years.

In its last fiscal year, Liver Specialty Group generated an aggregate of approximately C$21.3M in revenue and C$2.1M in gross profits from selling prescription medications and support

services to their patients. The Liver Specialty Group deal follows the acquisitions of InfusiCare Canada Inc. on November 18, 2021,and Medvisit on August 6, 2021. The combination of Liver Specialty Group, InfusiCare and Medvisit’s aggregate revenue in their last fiscal years was approximately C$33.6M and C$3.3M in total gross profit.

Liver Specialty Group’s acquisition is expected to expand Mednow’s offering of specialty pharmacy services, following the acquisition of InfusiCare Canada Inc. last month. Liver Care Canada Inc.’s database includes a patient base of 100,000 patients, ten Hepatologist and Gastrointestinal Specialists, ten Nurses and two Nurse practitioners and boasts a history of 5,000 cured patients of hepatitis C. Liver Care Canada Inc.’s’s clinic provides a holistic approach to liver disease management which includes early detection, direct access to treatments and supportive therapies such as weight loss and nutrition counselling. The combined Liver Specialty Group’s patient care team coordinates patient services and connects patients with programs needed based on an individual’s care plans. Liver Care Canada Inc.’s’s clinic also travels across Canada to help treat patients with liver diseases.

“The share purchase agreements with the companies consisting of the Liver Specialty Group further demonstrates the continuation of our acquisition strategy to continue to expand nationally and grow organically” said Karim Nassar, Chief Executive Officer of Mednow. “Over the last ten months, since our initial public offering in March 2021, Mednow has continued on its growth trajectory, and assuming the successful closing of the acquisition of the Liver Speciality Group, Mednow will have acquired companies with aggregate revenue in their last fiscal year of approximately C$33.6M and C$3.2M in total gross profit.”

Mednow Inc. (TSXV:MNOW) is focused on the future and believes that chronic disease management is an important aspect of its mission to lead the digital health evolution, combining its people-first approach with helpful technology, and redefining pharmacy’s role in holistic care. Upon the expected closing of the Transactions with Liver Care Canada Inc. and London Pharmacare Inc. (together, the “Targets”) and integration of the Targets’ operations with Mednow, the Targets’ patient base is expected to benefit from Mednow’s diverse product and service offerings and holistic approach to healthcare which complements the Targets’ holistic approach to liver disease management and digital customer service infrastructure providing same-day delivery services to London, Ontario, and the surrounding areas.

The Targets’ acquisition agreements are expected to expand Mednow’s expertise into hepatology drugs and liver disease management. The recent acquisition of InfusiCare Canada Inc., also located in London, Ontario, offers synergies to Mednow’s specialized assets, which now include rheumatology and hepatology.

“With virtual care and the ability to reach patients through Mednow’s platforms, I believe Liver Care Canada Inc. and London Pharmacare Inc. will be able to provide their services all over Canada and help more patients access care and receive their treatments safely, and efficiently” Karim Ragheb President of the Targets.

Mednow’s Recent Strategic Investments and Acquisitions

Earlier in November, Mednow Inc. (TSXV:MNOW) announced a strategic investment in Doko Medical Inc., a virtual healthcare provider operating in the United States. Currently serving 38 states, Doko Medical has more than 100 physicians and health workers engaged on its telemedicine platform, which helps clinicians provide patient care wherever and whenever. This strategic investment is expected to help Doko Medical fuel its future growth as it begins to deploy capital prudently in key pillars of growth.

On November 18, Mednow entered into an agreement to acquire InfusiCare Canada Inc, a specialty pharmacy based in London, Ontario, operating out of the Arva clinic. InfusiCare patients will benefit from Mednow’s digital pharmacy infrastructure.

In the most recent fiscal year, InfusiCare generated revenues of C$9.3 million and gross profit of C$400,000.

Mednow plans expansion of same-day delivery services in London, Ontario, its fourth largest city in Canada.

On November 12, Mednow also acquired exclusive Canadian license and distribution rights of genetic testing technology TruDiagnostic™ for a cash payment of US$150,000 and a two-year term. TruDiagnostic™ TruAge Complete Collection is a comprehensive means for a patient to analyze methylation biomarkers to quantify the aging process. This acquisition expands Mednow’s holistic healthcare offerings on its digital platform.

Financial Results and Operational Highlights Show Strong Growth

Mednow Inc. (TSXV:MNOW) had more than C$28 million in cash at the end of its fiscal fourth quarter thanks to a series of wise strategic moves during the quarter. The Toronto-based company reported sales of C$414,000 for its 2020 fiscal year ended July 31, 2021, up from zero for the same period last year.

Mednow also reported several operational milestones in Q4 2021 including the acquisition of Medvisit, Canada’s largest and longest standing doctor house call service. Medvisit conducts approximately 30,000 patient home visits annually and has served over 400,000 patients since inception. Medvisit earned revenue of approximately C$3 million and a gross profit of approximately C$790,000 in its latest fiscal year.