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HealthWarehouse.com Reports Results for Third Quarter 2018

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Online mail-order pharmacy's consumer prescription sales grow by 20%

HealthWarehouse.com, Inc. (OTC:HEWA) has announced today that its core
consumer prescription sales for the third quarter ended September 30,
2018, increased 20% to $3,268,979 compared to $2,733,690 for the third
quarter of 2017. Overall revenues improved by 2% to $4,011,248 compared
to $3,932,446 for the third quarter of 2017 as the growth in the
prescription business was offset by a reduction in 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 third-quarter growth in prescription sales
to strong customer retention, targeted advertising campaigns, improved
order conversion rates and quicker processing times.

"In the second quarter of this year we reached a great milestone in
processing over 100,000 prescriptions for the first time in company
history. We are proud to announce that trend continued in the third
quarter. Our 20% growth in core prescription revenue, coupled with the
growth in customers and prescription fills, shows that consumers
appreciate HealthWarehouse.com as an affordable option for their
prescription medications. As a result of our sales growth, along with
improved efficiencies, we generated approximately $150,000 in adjusted
EBITDA during the quarter," said Joseph Peters, the Company's President
and CEO.

"It is no secret that Americans value affordability and convenience.
Thanks to our investments in pharmacy robotics and infrastructure, we
have maintained affordable rates in the midst of direct price
competition and shortened our processing times during periods of
increased prescription fill volume. As we look to 2019, we plan to
provide an improved customer experience by investing in pharmacy
software and platform development," Peters added. "We have built an
energetic team, executing at a high level on behalf of our customers. We
treat our customers like we treat our family and our team is doing a
fantastic job of providing excellent pharmacy experiences through
compassion, convenience and transparency."

The Company reported a net loss of $601,091 for the nine months ended
September 30, 2018, compared to net income of $547,653 for the same
period in 2017. The net loss resulted primarily from reduced pharmacy
efficiencies during the first quarter due to changes required to prepare
for the installation of the robotics, costs associated with development
of marketing strategy and creative, lower over-the-counter revenue and
higher stock-based compensation expense.

During the three and nine months ended September 30, 2018, Adjusted
EBITDA was $149,863 and $64,711, respectively, as compared to Adjusted
EBITDA of $138,772 and $775,041, respectively, for the three and nine
months ended September 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 $3,268,979 for
the three months ended September 30, 2018, as compared to $2,733,690 for
the same period of 2017, an increase of $535,289, or 20%. For the nine
months ended September 30, 2018, core consumer prescription sales were
$9,166,789, an increase of $943,259, or 11%, over the $8,223,530 of
sales reported for the same period in 2017. The year-to-date sales
growth was achieved despite substantial prescription price reductions
during the first half of the year. The number of prescriptions shipped
for the three and nine months ended September 30, 2018, was 102,691 and
295,424, representing increases of 16,053 (19%) and 37,159 (14%),
respectively, compared to the prior-year periods.

Over-the-counter product net sales were $654,240 for the three months
ended September 30, 2018, a decrease of $403,444, or 38% from $1,057,684
in the comparable period in 2017. For the nine months ended September
30, 2018, over-the-counter product sales were $2,000,312, a $573,593 or
22% decrease from $2,573,905 of sales reported for the same period in
2017. The decline in over-the-counter product sales was directly
attributable to reduced advertising spend for over-the-counter products
and 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 nine months ended
September 30, 2018, was $2,615,312 and $7,430,524, increases of $86,693
and $23,435, respectively, as compared to the same periods of 2017. The
increases are due to the increase in prescription sales volume, which
offset the impact of the prescription price reductions and the decline
in over-the-counter sales.

SG&A Expenses: SG&A expenses were $2,650,862 and $7,835,208
for the three and nine months ended September 30, 2018, resulting in
increases of $204,705 (8%) and $1,049,737 (15%), 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
 
Net sales $ 4,011,248 $ 3,932,446 $ 11,446,550 $ 11,214,751
 
Cost of sales   1,395,936     1,403,827     4,016,027     3,807,663  
 
Gross profit 2,615,312 2,528,619 7,430,523 7,407,088
 
Selling, general and administrative expenses   2,650,862     2,446,157     7,835,208     6,785,471  
 
Net income (loss) from operations (35,550 ) 82,462 (404,685 ) 621,617
 
Interest expense   (72,261 )   (21,958 )   (196,406 )   (73,964 )
 
Net income (loss) (107,811 ) 60,504 (601,091 ) 547,653
 
Preferred stock:
Series B convertible contractual dividends   (85,558 )   (73,582 )   (256,674 )   (256,675 )
 
Net income (loss) attributable to common stockholders $ (193,369 ) $ (13,078 ) $ (857,765 ) $ 290,978  
 
Per share data:
Net income (loss) - basic $ (0.00 ) $ 0.00 $ (0.01 ) $ 0.01
Net income (loss) - diluted $ (0.00 ) $ 0.00 $ (0.01 ) $ 0.01
Series B convertible contractual dividends $ (0.00 ) $ (0.00 ) $ (0.01 ) $ (0.01 )
 
Net income (loss) attributable to common stockholders:
- basic $ (0.00 ) $ (0.00 ) $ (0.02 ) $ 0.01  
- diluted $ (0.00 ) $ (0.00 ) $ (0.02 ) $ 0.01  
 
Weighted average common shares outstanding:
- basic   48,833,093     45,711,118     48,597,139     44,630,004  
- diluted   48,833,093     45,711,118     48,597,139     53,175,132  
 
 
Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA
(Non-GAAP)
(Unaudited)
             
Three Months Ended Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
 
Net income (loss) $ (107,811 ) $ 60,504 $ (601,091 ) $ 547,653
Non-GAAP adjustments:
Interest expense 72,261 21,958 196,406 73,964
Depreciation and amortization 41,605 17,970 82,546 60,708

Stock-based compensation

143,808 87,005 379,043 223,495
Gain on settlement of accrued expenses - (48,665 ) - (144,479 )

Impairment loss on website development costs

- - - 13,700
Loss on disposal of equipment   -     -     7,807     -  
 
Adjusted EBITDA $ 149,863   $ 138,772   $ 64,711   $ 775,041  
 

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 and/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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