Inspire Veterinary Partners Reports Full Year 2023 Financial Results

*Full year 2023 revenue increases approximately 70% year-over-year to $16.7 million*

*Outlook for growth in the pet health sector remains attractive with active pipeline of acquisition opportunities*

*Implemented cost reduction initiatives to maximize operational efficiency to deliver profitable growth*

*Major reduction of consultant fees and other discretionary expenses post IPO*

*SG&A savings of at least $1 million expected to be fully embedded by end of 2024*

*VIRGINIA BEACH, VA / ACCESSWIRE / April 8, 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 financial results for its full year ended December 31, 2023.

"We are pleased to report strong year end 2023 top-line results as a newly public company with revenue growing 70 percent year-over-year, driven by acquisitions made during the past 12 months and organic revenue growth" said Kimball Carr, Chairman, President & Chief Executive Officer of Inspire. "We enter 2024 as a stronger company in a category that remains resilient and growing; and our experienced and dedicated team is executing to deliver purpose driven performance. Keeping our clients and pets at the center of everything we do is core to our mission of becoming a trusted destination for pet parents seeking high-quality and convenient pet health and wellness. Our acquisition of Valley Veterinary Service animal hospital, our first facility in the state of Pennsylvania, closed in the fourth quarter. The Valley team has done an incredible job integrating with our Inspire team while continuing to provide the highest level of care to its clients and pets. We're excited about our opportunities to fuel growth with our existing base of business and believe that the pipeline of attractive animal hospital acquisition candidates in both existing and new states remains active."

Carr, continued, "Over the past few years, we have invested in building a talented leadership and field team, adding technology that enhances the organizations integration and capabilities, and strengthening the infrastructure required to support our expanding family of animal hospitals as we continue to execute our growth strategy. Notably in 2023, we transitioned all hospitals to unified financial reporting systems aimed at enhancing speed of monthly reporting and maintaining our compliance with audit and regulatory requirements. We also launched enterprise-wide metric measurement systems which give us granular analysis of KPIs in each of our locations. This allows our field leader teams to coach each day, celebrating wins as our hospitals grow and the creation of detailed plans for the improvement of each lever which drives our business. Also completed in 2023, was the migration of every Inspire location to one practice management system which allows cloud-based oversight of patient records, client schedules, financial data and treatment plans for each pet under our care. Moving the Inspire portfolio to one ‘PIMs' provides a unified set of behaviors at hospital level, creating a consistency for coaching by our field leaders and allows our medical teams to provide case guidance whether on site or thousands of miles away. As we continue to advance in 2024, the work completed in 2023 means much of the organizational infrastructure is in place and should allow us to scale the business while adding only a modest amount of operating expense in the years ahead. On this front, 2023 was a standout year for bringing processes in house based on several changes implemented which were both cost-favorable to the company while bringing additional efficiency. We remain committed to redefining the industry through our differentiated offering and demonstrating the attractiveness of our operational strategy powered by a very passionate team in veterinary care. Looking ahead, we are focused on what is within our control and capitalizing on the secular trends of the resilient pet category to drive long-term, profitable growth. Toward that aim, we remain committed and focused on growth, business fundamentals and taking excellent care of team and pets as a means to bring value to our shareholders."

"In fiscal year 2023, we delivered solid top line results," said Inspire CFO Richard Frank. "While we are pleased with this growth, since our IPO, we have heightened our focus on execution, operational excellence, and improved efficiencies while we continue our strategy to grow revenues in existing animal hospitals and through acquisitions. We believe the implementation of numerous operational efficiency measures will improve organizational integration, accountability and efficiency, and drive meaningful margin improvement in both the near and the long term, which should set Inspire on a trajectory to achieve stronger, more predictable results and value creation for all stakeholders."

*Recent Business Highlights Since IPO*

· Added three veteran leaders to further strengthen its medical, operational and financial expertise in support of its future growth and development: Dr. Chuck Dunn, as Director of Medical Operations; Kimberly King as Director of Field Operations; and Debbe Bastian, Finance Controller.
· Completed the acquisition of Valley Veterinary Service, Inc. animal hospital located in Pennsylvania, Inspire's first entry in that state. Valley Veterinary Service's 2022 gross revenues were in excess of $1.7 million.
· Opened newly located Family Pet Care animal hospital in Lakeside Town Center, Sugarland, Texas, designed to enhance customer service and improve staff support. Custom-built animal hospital, centered around the needs of IVP's care team and clients, represents the first of a new model of state-of-the-art companion animal hospitals Inspire expects to replicate as it expands existing and new clinics throughout the U.S.
· Introduced new benefit for its employees with BetterHelp.com, a provider of professional, affordable, and personalized therapy in a convenient online format. Starting April 1, 2024, all Inspire team members will have access to convenient and professional therapy online.

*Full Year 2023*

Total revenue was $16.7 million for the twelve months of 2023, an increase of 70% compared to total revenue of $9.8 million in the prior year period, driven by an increase in sales in both Service and Product revenue which were significantly positively impacted by acquisitions. Service revenue for the twelve months of 2023 increased 69% to $11.9 million primarily driven by acquisitions of animal hospitals and clinics accumulated since the prior year period and increasing the prices of our services throughout our clinics and animal hospitals that resulted in organic growth in 9 of 14 animal hospitals and clinics increasing daily service revenue from the year prior, and the addition to the Valley Veterinary Service acquisition in November 2023. Product revenue of $4.8 million increased 71% compared to the prior year period driven primarily by acquisitions of animal hospitals and clinics in 2023, price increases, and the acquisition of Valley Veterinary Service.

General and administrative expenses were $9.5 million for the first twelve months of 2023 compared to $5.5 million in the prior year period. The increase was primarily due to the Company's initial public offering (IPO) and Nasdaq listing in August 2023, the additional cost of being a public company, and higher wages and third-party costs due to inflationary pressures.

Net loss was $14.8 million for the first twelve months of 2023 compared to a net loss of $4.9 million for the prior year period. The increase in net loss was primarily attributable to the additional operating expenses, the non-cash beneficial conversion feature of $4.1 million on the convertible debenture and series A preferred stock recognized upon the completion of the IPO and the costs associated with the Company's acquisition of Valley Veterinary Service. Additionally, the Company incurred costs associated with its IPO and increased costs associated with being a public company.

*Balance Sheet*

As of December 31, 2023, the Company had cash and cash equivalents of approximately $0.2 million. Subsequent to the end of fiscal year 2023, the Company announced on February 13, 2024, it had completed a public offering of shares of Class A common stock for gross proceeds of approximately $4.0 million, prior to deducting placement agent fees and other offering expenses payable by the Company.

*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.*

*Facebook*

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

*LinkedIn*

https://www.linkedin.com/company/inspire-veterinary-partners/

*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
kevin@tradigitalir.com

*General Inquires*

Morgan Wood
Mwood@inspirevet.com

*Inspire Veterinary Partners, Inc.*
*Unaudited Condensed Consolidated Balance Sheets* *December 31,* *December 31,*

*2023* *2022*
*Assets*

Current assets:

Cash and cash equivalents
$ 178,961 $ 444,253
Accounts receivable, net
28,573 -
Due from former owners
32,519 269,883
Inventory
571,512 582,019
Refundable income tax
151,796 192,139
Prepaid expenses and other current assets
388,759 253,795
Total current assets
1,352,120 1,742,089


Restricted cash - non-current
200,000 -
Property and equipment, net
7,949,144 7,323,050
Right-of-use assets
1,616,198 746,973
Other intangibles, net
2,513,028 2,729,574
Goodwill
8,147,590 7,614,553
Other assets
12,895 29,456
Total assets
$ 21,790,975 $ 20,185,695


*Liabilities and Stockholder's Deficit*

Current liabilities:

Accounts payable
$ 3,206,594 $ 1,018,931
Accrued expenses
858,334 690,740
Cumulative Series A preferred stock dividends payable
92,322 -
Operating lease liabilities
141,691 91,152
Loan payable, net of discount
1,713,831 -
Bridge note, net of discount
- 3,899,156
Convertible debentures, net of issuance costs
100,000 -
Notes payable, net of discount
1,469,043 1,549,861
Total current liabilities
7,581,815 7,249,840


Operating lease liabilities, non-current
1,514,044 666,179
Convertible debentures, net of issuance costs
- 3,688,805
Notes payable - noncurrent
13,483,375 13,716,352
Total liabilities
22,579,234 25,321,176


COMMITMENTS AND CONTINGENCIES (Note 12)



STOCKHOLDER'S EQUITY (DEFICIT)

Common stock - Class A, $0.0001 par value, 100 million shares authorized, 7,042,106 and 970,457 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively
705 98
Common stock - Class B, $0.0001 par value, 20 million shares authorized, 3,891,500 and 4,300,000 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively
389 430
Convertible series A preferred stock, $0.0001 par value, 1,000,000 shares authorized, 403,640 and 0 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively
40 -
Additional paid in capital
20,425,864 1,107,439
Accumulated deficit
(21,215,257 ) (6,243,448 )
Total stockholder's equity (deficit)
(788,259 ) (5,135,481 )
Total liabilities and stockholder's equity (deficit)
$ 21,790,975 $ 20,185,695

*Inspire Veterinary Partners, Inc. and Subsidiaries*
*Unaudited Condensed Consolidated Statements of Operations* *Year Ended December 31,*

*2023* *2022*
Service revenue
$ 11,879,934 $ 7,032,800
Product revenue
4,795,459 2,801,978
Total revenue
16,675,393 9,834,778


Operating expenses

Cost of service revenue (exclusive of depreciation and amortization, shown separately below)
9,700,963 5,308,104
Cost of product revenue (exclusive of depreciation and amortization, shown separately below)
3,420,515 1,981,046
General and administrative expenses
9,476,287 5,467,642
Debt extinguishment loss
16,105 -
Depreciation and amortization
1,252,539 596,124
Total operating expenses
23,866,409 13,352,916


Loss from operations
(7,191,016 ) (3,518,138 )


Other income (expenses):

Interest income
21 1,021
Interest expense
(2,538,710 ) (1,425,260 )
Loss on debt modification
(927,054 ) -
Beneficial conversion feature
(4,137,261 ) -
Other income
1,134 357
Total other expenses
(7,601,870 ) (1,423,882 )


Loss before income taxes
(14,792,886 ) (4,942,020 )


Benefit for income taxes
- 30,094


Net loss
(14,792,886 ) (4,911,926 )
Dividend on convertible series A preferred stock
(271,245 ) -
Net loss attributable to class A and B common stockholders
$ (15,064,131 ) $ (4,911,926 )


Net loss per Class A and B common shares:

Basic and diluted
$ (2.25 ) $ (0.95 )
Weighted average shares outstanding per Class A and B common shares:

Basic and diluted
6,692,515 5,160,182

*Inspire Veterinary Partners, Inc. and Subsidiaries*
*Consolidated Statements of Cash Flows* *Year Ended December 31,*

*2023* *2022*
*Cash flows from operating activities:*

Net loss
$ (14,792,886 ) $ (4,911,926
Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization
1,252,539 595,627
Bad debt provision
123,513 -
Amortization of debt issuance costs
128,583 189,414
Amortization of debt discount
864,350 689,554
Amortization of operating right of use assets
162,298 13,958
Debt extinguishment loss
16,105 -
Issuance of warrants to CEO
2,701 -
Issuance of class A common stock for services
397,892 216,252
Loss on debt modification
927,054 -
Beneficial conversion feature
4,137,261 -
Changes in operating assets and liabilities, net of effect of acquisitions:

Accounts receivable
(152,086 ) -
Due from former owners
237,364 (233,898
Inventory
84,912 (230,125
Refundable income tax
40,343 -
Prepaid expenses and other current assets
(134,964 ) (187,931
Other assets
16,561 -
Accounts payable
2,187,663 974,040
Accrued expenses
813,144 230,326
Operating lease liabilities
(133,119 ) (3,600
Net cash used in operating activities
(3,820,772 ) (2,658,309


*Cash flows from investing activities:*

Purchase of property and equipment
(383,729 ) (134,971
Purchase of intangible assets
- (41,819
Payment for acquisition of businesses
(1,485,800 ) (14,511,804
Advances for target acquisitions
- 21,798
Net cash used in investing activities
(1,869,529 ) (14,666,796


*Cash flows from financing activities:*

Proceeds from issuance of class A common stock in connection with initial public offering, net of offering costs
5,439,571 -
Net proceeds from loan payable
2,038,531 -
Payments on loan payable
(1,923,474 ) -
Proceeds from note payable, net of discount
- 12,253,585
Debt issuance costs
- (260,611
Repayment of note payable
(329,620 ) (494,034
Proceeds from issuance of bridge notes
- 2,600,000
Proceeds from issuance of convertible debentures
650,000 1,612,000
Repayment of convertible debentures
(250,000 ) -
Net cash provided by financing activities
5,625,009 15,710,940


Net increase (decrease) in Cash, cash equivalents and restricted cash
(65,292 ) (1,614,165
Cash, cash equivalents and restricted cash, beginning of period
444,253 2,058,418
Cash, cash equivalents and restricted cash, end of period
$ 378,961 $ 444,253


*Supplemental Disclosure of Cash Flow Information*

Interest payments during the year
$ 1,316,378 $ 239,430
Income tax refund
$ - $ 192,139


*Noncash investing and financing activity*

Acquisition of assets through operating leases
$ 1,031,523 $ 760,931
Series A Preferred Stock Dividend
$ 271,245 $ -
Issuance of common stock in connection with business acquisition
$ 400,000 $ -
Issuance of convertible series A preferred stock due to conversion of bridge notes
$ 4,440,688 $ -
Issuance of class A common stock due to conversion of convertible debentures
$ 4,414,317 $ -

*SOURCE: *Inspire Veterinary Partners, Inc.
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