Inspire Veterinary Partners Reports Third Quarter 2024 Financial Results

ECONOMY 13.11.2024

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 third quarter and nine months ended September 30, 2024.

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Select Third Quarter 2024 Highlights Compared to Prior Year Period

Total revenue of approximately $4.0 million, a decrease of 1.7%
Services revenue of $2.9 million, an increase of 1%
Product revenue of $1.1 million, a decrease of 9%
G&A decreased 16%
Net loss decreased 56%
Total revenue of approximately $13.3 million, an increase of 3%
Services revenue of approximately $9.7 million, an increase of 6%
Product revenue of $3.5 million, a decrease of 4%
G&A increased 11%
Net loss decreased 3%

Select Nine Month 2024 Highlights Compared to Prior Year Period

Total revenue of approximately $13.3 million, an increase of 3%
Services revenue of approximately $9.7 million, an increase of 6%
Product revenue of $3.5 million, a decrease of 4%
G&A increased 11%
Net loss decreased 3%

"Our third quarter results demonstrate the ongoing work of our dedicated teams on key initiatives to strengthen our fundamentals and accelerate the path to improved profitability," said Kimball Carr, President & Chief Executive Officer of Inspire. "While our third quarter total revenue was slightly lower on a quarterly comparative basis, we continued to streamline our operations to lower our cost structure, leading to a 16% decrease in G&A and a reduction in net loss. Looking ahead, I see tremendous opportunities for us to significantly improve our operating and financial performance and better leverage IVP's platform by continuing to add attractive single and multi-unit animal hospitals, and other synergistic products and services. We remain confident in our direction and belief that the changes and investments we are making across our business will create a more compelling, enduring value proposition for all stakeholders."

Third Quarter 2024 Highlights Compared to Prior Year Period

Total revenue was approximately $4.0 million for the third quarter of 2024, a decrease of 1.7% compared to total revenue of $4.1 million in the prior year period. Service revenue for the third quarter of 2024 increased 1% to $2.9 million compared to the prior year period, primarily driven by the acquisition of Valley Veterinary animal hospital in the fourth quarter of 2023. Product revenue of $1.1 million decreased 9% compared to the prior year period driven primarily bycustomers purchasing less products per visit.

General and administrative expenses decreased 16% to $3.0 million for the third quarter of 2024 compared to $3.5 million in the prior year period. The decrease was primarily due to the Company's decrease in payroll cost from a reduced headcount, cost associated with the initial public offering in August 2023 and termination of the consulting arrangements with Blue Herron and Star Circle.

Net loss decreased 56% to $3.5 million for the third quarter of 2024 compared to a net loss of $7.9 million for the prior year period which included the beneficial conversion feature on the convertible debenture and series A preferred stock of approximately $4.1 million recognized upon the completion of the IPO.

Balance Sheet

As of September 30, 2024, the Company had cash and cash equivalents of approximately $0.68 million. Subsequent to the end of the third quarter of 2024, the Company closed its previously announced registered direct offering on October 23 for the purchase and sale of an aggregate of 10 million shares of its Class A common stock at a purchase price of $0.25 per share. The aggregate gross proceeds to the Company from the offering were $2.5 million, prior to deducting placement agent's fees and other offering expenses payable by Inspire.

Inspire Veterinary Partners, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets

	September 30,		December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	681,199	$	178,961
Accounts receivable, net	115,551	28,573
Due from former owners	-	32,519
Inventory	563,595	571,512
Refundable income tax	-	151,796
Prepaid expenses and other current assets	3,090,371	388,759
Total current assets	4,450,716	1,352,120

Restricted cash - non-current	200,000	200,000
Property and equipment, net	6,486,444	7,949,144
Right-of-use assets	1,347,026	1,616,198
Other intangibles, net	1,864,355	2,513,028
Goodwill	8,022,082	8,147,590
Other assets	25,115	12,895
Total assets	$	22,395,738	$	21,790,975

Liabilities and Stockholder's Equity (Deficit)
Current liabilities:
Accounts payable	$	2,073,582	$	3,206,594
Accrued expenses	305,118	858,334
Cumulative Series A preferred stock dividends payable	-	92,322
Operating lease liabilities	164,107	141,691
Loans payable, net of discount	2,233,004	1,713,831
Convertible notes payable	850,000	-
Convertible debentures, net of issuance costs	-	100,000
Notes payable, net of discount	1,401,449	1,469,043
Total current liabilities	7,027,260	7,581,815

Operating lease liabilities, non-current	1,417,372	1,514,044
Notes payable - noncurrent	10,921,103	13,483,375
Total liabilities	19,365,735	22,579,234

Commitments and Contingencies (Note 15)

Stockholder's Equity (Deficit)
Common stock - Class A, $0.0001 par value, 100 million shares authorized, 13,363,688 and 70,421 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.	1,336	7
Common stock - Class B, $0.0001 par value, 20 million shares authorized, 3,891,500 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.	389	389
Convertible series A preferred stock, $0.0001 par value, 1 million shares authorized, 0 and 403,640 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.	-	40
Additional paid in capital	34,761,924	20,426,562
Accumulated deficit	(31,733,646	)	(21,215,257	)
Total stockholder's equity (deficit)	3,030,003	(788,259	)
Total liabilities and stockholder's equity (deficit)	$	22,395,738	$	21,790,975

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

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2024		2023		2024		2023
Service revenue	$	2,969,748	$	2,935,922	$	9,735,585	$	9,209,501
Product revenue	1,079,277	1,183,726	3,535,388	3,682,088
Total revenue	4,049,025	4,119,648	13,270,973	12,891,589

Operating expenses
Cost of service revenue (exclusive of depreciation and amortization, shown separately below)	2,568,085	2,206,216	7,705,972	6,847,963
Cost of product revenue (exclusive of depreciation and amortization, shown separately below)	854,921	853,622	2,807,025	2,631,752
General and administrative expenses	2,988,122	3,561,790	8,080,199	7,249,250
Debt extinguishment loss	-	16,105	1,587,862	16,105
Depreciation and amortization	340,167	313,316	1,048,290	915,824
Gain on sale of business	(467,049	)	-	(467,049	)	-
Total operating expenses	6,284,246	6,951,049	20,762,299	17,660,894

Loss from operations	(2,235,221	)	(2,831,401	)	(7,491,326	)	(4,769,305	)

Other income (expenses):
Interest income	44	12	46	18
Interest expense	(1,254,149	)	(914,604	)	(2,801,491	)	(1,745,415	)
Beneficial conversion feature	-	(4,137,261	)	-	(4,137,261	)
Other expenses	-	(748	)	(4,768	)	1,218
Total other expenses	(1,254,105	)	(5,052,601	)	(2,806,213	)	(5,881,440	)

Loss before income taxes	(3,489,326	)	(7,884,002	)	(10,297,539	)	(10,650,745	)

Benefit for income taxes	-	-	-	-

Net loss	(3,489,326	)	(7,884,002	)	(10,297,539	)	(10,650,745	)
Dividend on convertible series A preferred stock	-	(133,828	)	(220,850	)	(133,828	)
Net loss attributable to class A and B common stockholders	$	(3,489,326	)	$	(8,017,830	)	$	(10,518,389	)	$	(10,784,573	)

Net loss per Class A and B common shares:
Basic and diluted	$	(0.38	)	$	(1.86	)	$	(1.75	)	$	(2.50	)
Weighted average shares outstanding per Class A and B common shares:
Basic and diluted	9,070,371	4,321,507	6,019,913	4,313,683

Inspire Veterinary Partners, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)

Convertible Series A
	Preferred Stock					Class A Common Stock					Class B Common Stock					Additional		Accumulated	Stockholders' Equity
	No. of Shares		Amount		No. of Shares		Amount		No. of Shares		Amount		Paid-in Capital		Deficit (As Restated)		(Deficit) (As Restated)
Balance as of December 31, 2022	-	$	-	9,705	$	1	4,300,000	$	430	$	1,107,536	$	(6,243,448	)	$	(5,135,481	)
Issuance of warrants to CEO	-	-	-	-	-	-	2,701	-	2,701
Net loss	-	-	-	-	-	-	-	(1,538,949	)	(1,538,949	)
Balance as of March 31, 2023	-	$	-	9,705	$	1	4,300,000	$	430	$	1,110,237	$	(7,782,397	)	$	(6,671,729	)
Issuance of convertible series A preferred stock in exchange for bridge note (contingent upon a qualified offering as of or before September 1, 2023 (See note 8))	442,458	-	-	-	-	-	-	-	-
Net loss	-	-	-	-	-	-	-	(1,227,794	)	(1,227,794	)
Balance as of June 30, 2023	442,458	$	-	9,705	$	1	4,300,000	$	430	$	1,110,237	$	(9,010,191	)	$	(7,899,523	)
Issuance of class A common stock in connection with initial public offering, net of issuance costs	-	-	16,000	2	-	-	5,439,569	-	5,439,571
Recognition of convertible series A preferred stock issuance upon initial public offering	-	44	-	-	-	-	4,440,644	-	4,440,688
Conversion of convertible debentures into class A common stock	-	-	14,959	1	-	-	4,414,316	-	4,414,317
Conversion of class B common stock into class A common stock	-	-	4,085	-	(408,500	)	(41	)	41	-	-
Convertible series A preferred stock cumulative dividends	-	-	-	-	-	-	(133,828	)	-	(133,828	)
Issuance of common stock for services	-	-	1,302	-	-	-	197,892	-	197,892
Beneficial conversion feature on convertible debentures	-	-	-	-	-	-	1,569,395	-	1,569,395
Beneficial conversion feature on convertible series A preferred stock	-	-	-	-	-	-	2,567,866	-	2,567,866
Net loss	-	-	-	-	-	-	-	(7,884,002	)	(7,884,002	)
Balance as of September 30, 2023	442,458	$	44	46,051	$	5	3,891,500	$	389	$	19,606,132	$	(16,894,193	)	$	2,712,376

	Convertible Series A Preferred Stock					Class A Common Stock					Class B Common Stock
	No. of Shares		Amount		No. of Shares		Amount		No. of Shares		Amount		Additional Paid-in Capital		Accumulated Deficit		Stockholder' Equity (Deficit)
Balance as of December 31, 2023	403,640	$	40	70,421	$	7	3,891,500	$	389	$	20,426,562	$	(21,215,257	)	$	(788,259	)
Issuance of class A common stock and pre-funded warrants, net of issuance costs	-	-	28,599	3	-	-	3,375,455	-	3,375,458
Exercise of pre-funded warrants	-	-	441,989	44	-	-	(44	)	-	-
Issuance of Class A common stock and pre-funded warrants in connection with commitment shares	-	-	12,143	1	-	-	599,999	-	600,000
Issuance of convertible series A preferred stock	20,000	2	-	-	-	-	199,998	-	200,000
Issuance of class A common stock for services	-	-	39,051	4	-	-	286,692	-	286,696
Issuance of class A common stock in connection with general release agreement	-	-	2,460	-	-	-	20,000	-	20,000
Conversion of convertible series A preferred stock into class A common stock	(363,725	)	(36	)	147,900	15	-	-	21	-	-
Convertible series A preferred stock cumulative dividends	-	-	-	-	-	-	(2,250	)	-	(2,250	)
Convertible series A preferred stock dividend	21,227	2	-	-	-	-	212,268	(212,270	)	-
Net loss	-	-	-	-	-	-	-	(3,421,792	)	(3,421,792	)
Balance as of March 31, 2024	81,142	$	8	742,563	$	74	3,891,500	$	389	$	25,118,701	$	(24,849,319	)	$	269,853
Exercise of pre-funded warrants	-	-	102,500	10	-	-	(10	)	-	-
Conversion of convertible series A preferred stock into class A common stock	(54,771	)	(5	)	198,992	20	-	-	(15	)	-	-
Convertible series A preferred stock dividend	858	-	-	-	-	-	10,830	(8,580	)	2,250
Net loss	-	-	-	-	-	-	-	(3,386,421	)	(3,386,421	)
Balance as of June 30, 2024	27,229	$	3	1,044,055	$	104	3,891,500	$	389	$	25,129,506	$	(28,244,320	)	$	(3,114,318	)
Issuance of class A common stock and warrants, net of issuance costs	-	-	146,475	15	-	-	5,459,985	-	5,460,000
Exercise of pre-funded warrants	-	-	5,853,846	585	-	-	(585	)	-	-
Exercise of class A common stock warrants	-	-	3,500,000	350	-	-	3,499,650	-	3,500,000
Conversion of convertible series A preferred stock into class A common stock	(27,229	)	$	(3	)	272,290	$	27	-	-	(24	)	-	-
Conversion of convertible notes payable	-	-	2,547,022	255	-	-	649,745	-	650,000
Stock-based compensation	-	-	-	-	-	-	23,647	-	23,647
Net loss	-	-	-	-	-	-	-	(3,489,326	)	(3,489,326	)
Balance as of September 30, 2024	-	$	-	13,363,688	$	1,336	3,891,500	$	389	$	34,761,924	$	(31,733,646	)	$	3,030,003

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.

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

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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
[email protected]

General Inquires

Morgan Wood
[email protected]