Market Overview

HealthWarehouse.com Reports Full Year 2017 Results

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Online mail-order pharmacy year-over-year net sales grow 43% and exceed
$14M; records first annual net profit

HealthWarehouse.com, Inc. (OTC:HEWA) announced today that its net
sales for 2017 increased 43% to $14,847,262 compared to $10,384,893 in
2016.

HealthWarehouse.com is a Verified Internet Pharmacy Practice Sites
(VIPPS) accredited online and mail-order pharmacy licensed and/or
authorized to sell and deliver prescriptions to all 50 states. The
Company attributed its 2017 sales performance to growth in core consumer
prescription and over-the-counter product sales along with strong
customer retention and acquisition.

"I am proud to announce that the Company was able to report the first
profitable year in its history, while continuing the significant growth
rates in our core consumer prescription and over-the-counter
businesses," said Joseph Peters, the Company's President and CEO. "Our
results for 2017 are a reflection of our team's dedication to providing
our patients with excellent pharmacy experiences through compassion,
convenience and transparency. In 2017, we were able to satisfy a large
payables balance and invest in the installation of new pharmacy
automation equipment. These initiatives will provide us with financial
flexibility and increased productivity, positioning us well for 2018 and
beyond. Additionally, we are evaluating funding options to support an
expansion of our marketing campaigns, an upgrade of our pharmacy
software, and the refinancing of our current debt obligations."

The Company reported net income of $371,775 for the year ended December
31, 2017 compared to a net loss of $1,408,203 for the year ended
December 31, 2016. The 2016 results include $854,651 of nonrecurring
expenses including annual meeting proxy and solicitation costs and
severance expense for departing executives.

In 2017, Adjusted EBITDA was $856,118, versus negative EBITDA of $57,544
for the same period of 2016. Adjusted EBITDA and EBITDA are non-GAAP
financial measures and a reconciliation to the GAAP measures is provided
below.

2017 Overview:

Net Sales: Total net sales were $14,847,262 for the year ended
December 31, 2017 compared to $10,384,893 in 2016, an increase of
$4,462,369 or 43%. Core consumer prescription sales were $10,842,910 for
the year ended December 31, 2017 as compared to $7,999,818 in 2016, an
increase of $2,843,092 or 36%. Over-the-counter net sales grew 75% to
$3,436,832 as compared to $1,959,602 in 2016. The growth in both
categories has been aided by increased consumer awareness partially a
result of being featured in a prominent national magazine.

Gross Profit: Gross profit for the year ended December 31, 2017
was $9,837,599, a $3,100,139 or 46% increase over the 2016 year due to
sales growth, improved procurement practices, fulfillment process
enhancements and better cost controls.

SG&A Expenses: SG&A expenses were $9,359,593 for the year
ended December 31, 2017, an increase of $1,332,957 or 17% as compared to
the year 2016. Increases in 2017 resulted from increases in advertising
and marketing expenses, headcount, freight and other volume-related
expenses.

 
HEALTHWAREHOUSE.COM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
   
 
Year Ended
December 31,
2017 2016
Net sales $ 14,847,262 $ 10,384,893
Cost of sales   5,009,663     3,647,433  
Gross profit 9,837,599 6,737,460
Selling, general and administrative expenses   9,359,593     8,026,636  
Net income (loss) from operations 478,006 (1,289,176 )
Interest expense   106,231     119,027  
Net income (loss) 371,775 (1,408,203 )
Preferred stock:
Series B convertible contractual dividends   (342,232 )   (342,233 )
Net income (loss) attributable to common stockholders $ 29,543   $ (1,750,436 )
Per share data:
Net income (loss) - basic $ 0.01 $ (0.03 )
Net income (loss) - diluted $ 0.01 $ (0.03 )
Series B convertible contractual dividends $ (0.01 ) $ (0.01 )
 
Net income (loss) attributable to common stockholders - basic $ 0.00 $ (0.04 )
Net income (loss) attributable to common stockholders - diluted $ 0.00   $ (0.04 )
 
     

Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA
(Non-GAAP)

 
Year Ended
December 31,
(Unaudited) 2017   2016
 
Net income ( loss) $ 371,775 $ (1,408,203 )
Non-GAAP adjustments:
Interest expense 106,231 119,027
Depreciation and amortization 77,065 149,553
Stock-based compensation 351,076 327,202

Gain on settlement of accounts payable and accrued expenses

(139,479 ) (99,774 )
Proxy solicitation costs 37,113 578,484
Severance   52,337     276,167  
 
Adjusted EBITDA $ 856,118   $ (57,544 )
 

About HealthWarehouse.com

HealthWarehouse.com, Inc. (OTC:HEWA) is a trusted VIPPS accredited
online pharmacy based in Florence, Kentucky. The Company is focused on
the out of pocket prescription market, which is expected to grow to over
$50 billion in 2018. With a mission to provide affordable healthcare to
every American by focusing on technology that is revolutionizing
prescription delivery, HealthWarehouse.com has become the largest VIPPS
accredited online pharmacy in the United States exclusively servicing
the cash market.

HealthWarehouse.com is licensed or authorized to ship prescription
medication to all 50 states and only sells drugs that are FDA-approved
and legal for sale in the United States. Visit HealthWarehouse.com
online at http://www.HealthWarehouse.com.

Forward-Looking Statements

This announcement and the information incorporated by reference herein
contain "forward looking statements" as defined in federal securities
laws including but not limited to Section 27A of the Securities Act of
1933, Section 21E of the Securities Exchange Act of 1934, and the
Private Securities Litigation Reform Act of 1995, which statements are
based on our current expectations, estimates, forecasts and projections.
Statements that are not historical facts, including statements about the
beliefs, expectations and future plans and strategies of the Company,
are forward-looking statements. Actual results may differ materially
from those expressed in forward looking statements or in management's
expectations. Important factors which could cause or contribute to
actual results being materially and adversely different from those
described or implied by forward looking statements include, among
others, risks related to competition, management of growth, access to
sufficient capital to fund our business and our growth, new products,
services and technologies, potential fluctuations in operating results,
international expansion, outcomes of legal proceedings and claims,
fulfillment center optimization, seasonality, commercial agreements,
acquisitions and strategic transactions, foreign exchange rates, system
interruption, cyber-attacks, access to sufficient inventory, government
regulation and taxation, payments and fraud. More information about
factors that potentially could affect HealthWarehouse.com's financial
results is included in HealthWarehouse.com's filings with the Securities
and Exchange Commission, including its most recent Annual Report on Form
10-K and subsequent filings.

Use of Non-GAAP Financial Measures

HealthWarehouse.com, Inc. (the "Company") prepares its consolidated
financial statements in accordance with the United States generally
accepted accounting principles ("GAAP"). In addition to disclosing
financial results prepared in accordance with GAAP, the Company
discloses information regarding Adjusted EBITDA, which is commonly used.
In addition to adjusting net loss to exclude interest, depreciation and
amortization, Adjusted EBITDA also excludes stock-based compensation,
and certain other nonrecurring charges. Adjusted EBITDA is not a measure
of performance defined in accordance with GAAP. However, Adjusted EBITDA
is used internally in planning and evaluating the Company's performance.
Accordingly, management believes that disclosure of this metric offers
investors, bankers and other shareholders an additional view of the
Company's operations that, when coupled with the GAAP results, provides
a more complete understanding of the Company's financial results.

Adjusted EBITDA should not be considered as an alternative to net loss
or to net cash used in operating activities as a measure of operating
results or of liquidity. It may not be comparable to similarly titled
measures used by other companies, and it excludes financial information
that some may consider important in evaluating the Company's performance.

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