Market Overview

HealthWarehouse.com Reports Results for Second Quarter 2018

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Online mail-order pharmacy exceeds 100,000 prescription volume for first
time in history

HealthWarehouse.com, Inc. (OTC:HEWA) has announced today that its core
consumer prescription sales for the second quarter ended June 30, 2018,
increased 7% to $3,085,031 compared to $2,880,563 for the second quarter
of 2017. Overall revenues declined by 1.3% to $3,850,691 compared to
$3,901,841 for the second quarter of 2017 as a result of regulatory
requirements that negatively impacted over-the-counter sales for the
period.

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 2018 second-quarter growth in prescription sales
to strong customer retention and targeted advertising campaigns, which
benefited from a positive article published in a leading consumer
magazine in April 2018.

"We achieved another company milestone, processing over 100,000
prescriptions this quarter as we continue to provide an affordable
option for consumers to purchase their prescription medication. Along
with the growth in patients and prescription fills, we are proud to
announce another quarter of sales growth in our core consumer
prescription business. This prescription sales growth was achieved
alongside substantial prescription price reductions," said Joseph
Peters, the Company's President and CEO.

"During the quarter, we also completed the installation of our $1.1
million robotics equipment. In the short time that the equipment has
been operational, we have realized increased throughput, improved
quality control and operating efficiencies resulting in lower
fulfillment costs," Peters added. "We believe our investments in
automation and marketing initiatives during the first half of 2018
position us well for the future. Our team remains dedicated to providing
our patients with excellent pharmacy experiences through compassion,
convenience and transparency."

The Company reported a net loss of $493,280 for the six months ended
June 30, 2018, compared to net income of $487,149 for the same period in
2017.

In the three and six months ended June 30, 2018, Adjusted EBITDA was
$77,122 and $(85,152), respectively, as compared to Adjusted EBITDA of
$403,372 and $636,269, respectively, for the three and six months ended
June 30, 2017. Adjusted EBITDA is a non-GAAP financial measure.
Definitions and reconciliations to GAAP measures are provided below.

2018 Overview:

Net Sales: Core consumer prescription sales were $3,085,031 for
the three months ended June 30, 2018, as compared to $2,880,563 for the
same period of 2017, an increase of $204,468, or 7%. For the six months
ended June 30, 2018, core consumer prescription sales were $5,897,810,
an increase of $407,970, or 7%, over the $5,489,840 of sales reported
for the same period in 2017. The sales growth was achieved despite
substantial prescription price reductions.

The number of prescriptions shipped for the three and six months ended
June 30, 2018, was 100,499 and 192,733, representing increases of 11,062
(12%) and 21,106 (12%), respectively, compared to the prior-year
periods. Over-the-counter product net sales were $672,274 for the three
months ended June 30, 2018, a decrease of $196,503, or 23% from $868,777
in the comparable period in 2017. For the six months ended June 30,
2018, over-the-counter product sales were $1,346,073, a $170,149 or 11%
decrease from $1,516,221 of sales reported for the same period in 2017.
The decline in over-the-counter product sales was directly attributable
to additional regulatory requirements imposed on the sale of certain
products, which mandated the receipt of personal documentation to
process the sale.

Gross Profit: Gross profit for the three and six months ended
June 30, 2018, was $2,453,243 and $4,815,211, resulting in decreases of
$125,458 and $63,258, respectively, as compared to the same periods of
2017. The decreases are due to the decline in over-the-counter sales and
prescription pricing reductions.

SG&A Expenses: SG&A expenses were $2,539,943 and $5,184,346
for the three and six months ended June 30, 2018, resulting in increases
of $354,073 (16%) and $845,032 (19%), respectively, compared to the same
periods of 2017. Increases in 2018 resulted primarily from
volume-related expenses such as increased staffing, freight costs and
payment processing fees, and marketing and advertising expenses.

     
HEALTHWAREHOUSE.COM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
 
Net sales $ 3,850,691 $ 3,901,841 $ 7,435,302 $ 7,282,305
 
Cost of sales   1,397,448     1,323,140     2,620,091     2,403,836  
 
Gross profit 2,453,243 2,578,701 4,815,211 4,878,469
 
Selling, general and administrative expenses   2,539,943     2,185,870     5,184,346     4,339,314  
 
Net income (loss) from operations (86,700 ) 392,831 (369,135 ) 539,155
 
Interest expense   65,829     27,413     124,145     52,006  
- -
Net income (loss) (152,529 ) 365,418 (493,280 ) 487,149
 
Preferred stock:

Series B convertible contractual dividends

  (85,558 )   (91,548 )   (171,116 )   (183,093 )
 

 

Net income (loss) attributable to common stockholders

$ (238,087 ) $ 273,870   $ (664,396 ) $ 304,056  
 
Per share data:
Net income (loss) – basic $ (0.00 ) $ 0.01 $ (0.01 ) $ 0.01
Net income (loss) – diluted $ (0.00 ) $ 0.01 $ (0.01 ) $ 0.01
Series B convertible contractual dividends   (0.00 )   0.01     (0.00 )   (0.00 )
 
Net income (loss) attributable to common stockholders -
- basic $ (0.00 ) $ 0.01   $ (0.01 ) $ 0.01  
- diluted $ (0.00 ) $ 0.01   $ (0.01 ) $ 0.01  
 
Weighted average common shares outstanding
- basic   48,725,670     45,473,820     48,477,206     44,080,487  
- diluted   48,725,670     46,258,274     48,477,206     44,899,941  
 

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

(Unaudited)

 
Three Months Ended Six Months Ended
June 30, June 30,
2018   2017 2018   2017
 
Net income ( loss) $ (152,529 ) $ 365,418 $ (493,280 ) $ 487,149
Non-GAAP adjustments:
Interest expense 65,829 27,413 124,145 52,006
Depreciation and amortization 24,611 19,994 40,941 42,738
Stock-based compensation 139,211 72,661 235,235 136,490
Gain on settlement of accounts payable - (95,814 ) - (95,814 )
Impairment loss website development costs - 13,700 - 13,700
Loss on disposal of equipment   -     -     7,807     -  
 
Adjusted EBITDA $ 77,122   $ 403,372   $ (85,152 ) $ 636,269  
 

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 sells only 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, cyberattacks, 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 on http://www.otcmarkets.com.

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 Earnings Before Interest,
Taxes, Depreciation and Amortization (Adjusted EBITDA). In addition to
adjusting net loss to exclude interest, taxes, 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 stakeholders 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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