10-Q: Earth Science Tech Reports Strong Revenue Growth in Q3 2025, Driven by Strategic Acquisitions and Expanded Operations

Earth Science Tech, Inc. reports a significant increase in revenue for the quarter ended December 31, 2024, driven by strategic acquisitions and expanded operational capabilities.

Summary

• Earth Science Tech, Inc. (ETST) reported its financial results for the third quarter of fiscal year 2025, ended December 31, 2024.
• The company operates as a strategic holding company with a focus on acquiring, optimizing, and managing operating businesses.
• ETST's wholly-owned subsidiaries include RxCompoundStore.com, LLC (RxCompound), MisterMeds, LLC (MisterMeds), Peaks Curative, LLC (Peaks), Avenvi, LLC (Avenvi), and Earth Science Foundation, Inc. (EST).
• Revenue for the three months ended December 31, 2024, was $7,352,635, compared to $3,790,112 for the three months ended December 31, 2023.
• Gross profit for the three months ended December 31, 2024, was $5,086,873, representing a gross margin of 69%, compared to $2,376,698 and a 63% gross margin for the same period in 2023.
• Net income for the three months ended December 31, 2024, was $206,411, compared to $225,443 for the three months ended December 31, 2023.
• For the nine months ended December 31, 2024, revenue was $24,440,600, compared to $5,937,766 for the nine months ended December 31, 2023.
• Net income for the nine months ended December 31, 2024, was $2,081,033, compared to $582,815 for the nine months ended December 31, 2023.
• The company repurchased 7,317,248 shares of its common stock for $1,049,891 during the nine months ended December 31, 2024.
• ETST acquired Mister Meds and Avenvi, LLC during the period, accounting for these transactions as asset acquisitions.

Sentiment

Score: 8

Explanation: The document presents a positive outlook for Earth Science Tech, Inc., with strong revenue growth, improved profitability, and strategic acquisitions. The company's management appears confident in its future prospects, and the share repurchase program suggests a belief that the company's stock is undervalued.

Positives

• Significant revenue growth in both the three and nine months ended December 31, 2024.
• Improved gross profit margin for the three months ended December 31, 2024.
• Substantial increase in net income for the nine months ended December 31, 2024.
• Strategic acquisitions of Mister Meds and Avenvi, LLC.
• Active pursuit of licensure for RxCompoundStore.com in additional states.
• Share repurchase program, indicating management's confidence in the company's value.
• Acquisition of Las Villas Healthcare, LLC. and Doconsultations.com, LLC. for $400,000.
• Acquisition of Magnefuse, LLC and Alicat, LLC for $240,500.

Negatives

• Labor expenses increased significantly for the three months ended December 31, 2024, due to hiring new employees.
• Bank charges increased significantly for the three months ended December 31, 2024, related to credit card processing fees.
• Accrued expenses totaled $1,394,754 as of December 31, 2024, and $854,719 as of March 31, 2024.

Risks

• The company's reliance on three large customers, representing 16%, 11%, and 9% of revenue for the nine months ended December 31, 2024, poses a concentration risk.
• The company's future performance is subject to risks and uncertainties, as indicated by the forward-looking statements disclaimer.
• Legal proceedings could arise from time to time, seeking monetary damages and other relief.
• The company's CEO and COO amended the Employment Agreement originally dated August 26, 2024. Under the amended terms, the CEO will receive a monthly salary of two hundred thousand dollars, and the COO will receive a monthly salary of one hundred fifty thousand dollars, effective January 1, 2025.

Future Outlook

Mister Meds is projected to begin operations in the first quarter of 2025. Peaks plans to extend its services to all 50 states through the development of its own network of healthcare providers and the continued expansion of state licensure for RxCompoundStore.com and Mister Meds.

Management Comments

• The revenue increase during the three months ended December 31, 2024, compared with the three months ended December 31, 2023, is primarily due to an increase marketing campaigns and addition of sales personnel.

Industry Context

The company's strategic focus on compounding pharmacies and telemedicine aligns with the growing trends in personalized medicine and remote healthcare services. The acquisition of Avenvi, a real estate company, diversifies the company's holdings and provides potential synergies for future development.

Comparison to Industry Standards

• It is difficult to compare ETST's results directly to industry standards without knowing the specific segments in which it operates and the size of its competitors.
• However, the company's gross margin of 69% for the three months ended December 31, 2024, suggests a strong pricing strategy and efficient cost management.
• Comparable companies in the compounding pharmacy space include Fagron and Wedgewood Pharmacy, while telemedicine competitors include Teladoc Health and Amwell.
• The company's growth strategy through acquisitions is similar to that of other holding companies in the healthcare sector, such as CareTrust REIT and National Health Investors.

Legal Proceedings

• From time to time and in the course of business, we may become involved in various legal proceedings seeking monetary damages and other relief.

Related Party Transactions

• The Company pays the employee compensation for Giorgio R. Saumat and Mario Tabraue to their respective, solely owned LLCs, Point96 Consulting, LLC and Tabraue Consulting, LLC.
• Officer compensation of approximately $ 7,700,000 was incurred during the nine months ended December 31, 2024, paid to Point 96 Consulting owned by Giorgio R. Saumat and Tabraue Consulting, owned by Mario Tabraue.
• The Company purchased other entities from related parties.

Stakeholder Impact

• Shareholders: The strong financial performance and share repurchase program are likely to be viewed positively by shareholders.
• Employees: The company's growth and expansion may create new job opportunities.
• Customers: The expansion of services and product offerings may benefit customers.
• Suppliers: Increased sales volume may lead to increased demand for suppliers' products.
• Creditors: The company's improved financial position may enhance its creditworthiness.

Next Steps

• Mister Meds is projected to begin operations in the first quarter of 2025.
• Peaks plans to extend its services to all 50 states.
• The remaining balance of three hundred fifty thousand dollar will be paid at closing, which will occur after a ninety-day due diligence period for Las Villas Healthcare, LLC. and Doconsultations.com, LLC..
• The remaining balance of thirty thousand dollar will be paid at closing, which will occur after a ninety-day due diligence period for Magnefuse, LLC and Alicat, LLC.
• The Company will also have the option to purchase the remaining twenty percent ownership of the Targets for up to two years following the closing for Magnefuse, LLC and Alicat, LLC.

Key Dates

Keywords

pharmacy, compounding, telemedicine, acquisitions, revenue, financial results, Earth Science Tech, ETST