10-Q/A: 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. filed an amendment to its quarterly report on Form 10-Q for the quarter ended December 31, 2024, to correct the number of common shares outstanding and the gross profit for the three months ended December 31, 2023.
• The company operates as a strategic holding company focused on acquiring, optimizing, and managing operating businesses.
• Key subsidiaries include RxCompoundStore.com, LLC, MisterMeds, LLC, Peaks Curative, LLC, Avenvi, LLC, and Earth Science Foundation, Inc.
• Revenue for the three months ended December 31, 2024, was $7,352,635, compared to $3,790,112 for the same period in 2023.
• Gross profit for the three months ended December 31, 2024, was $5,086,873, compared to $2,376,698 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 same period in 2023.
• For the nine months ended December 31, 2024, revenue was $24,440,600 compared to $5,937,766 in 2023.
• Net income for the nine months ended December 31, 2024, was $2,081,033 compared to $582,815 in 2023.
• The company repurchased 7,317,248 shares of its common stock for $1,049,891 during the nine months ended December 31, 2024.
• The company acquired Mister Meds and Avenvi, LLC during the period.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong revenue growth, improved gross margins, and strategic acquisitions. While there are some increased expenses, the overall tone is optimistic and suggests a healthy financial trajectory.

Positives

• Significant revenue growth in Q3 2025, with revenue increasing to $7,352,635 from $3,790,112 in Q3 2024.
• Gross profit more than doubled, reaching $5,086,873 in Q3 2025 compared to $2,376,698 in Q3 2024.
• Gross margin improved from 63% to 69% year-over-year.
• Net income for the nine months ended December 31, 2024, increased significantly to $2,081,033 from $582,815 in the prior year period.
• Strategic acquisitions of Mister Meds and Avenvi, LLC, expanding the company's operational scope.
• Share repurchase program executed, with 7,317,248 shares repurchased for $1,049,891 during the nine months ended December 31, 2024.
• Net cash provided by operating activities increased to $2,378,347 for the nine months ended December 31, 2024, compared to $307,280 for the same period in 2023.

Negatives

• Labor expenses increased significantly to $3,297,826 for the three months ended December 31, 2024, due to rapid growth and new hires.
• General and administrative expenses decreased from $1,496,708 for the three months ended December 31, 2023, to $809,850 for the three months ended December 31, 2024, this 85% decrease is mainly attributable to the outsourcing of area managers.
• Net cash used in investing activities during the nine months ended December 31, 2024, was $1,810,891.
• Net cash used in financing activities during the nine months ended December 31, 2024, was $742,938, of which $1,049,891 was repurchased of shares.

Risks

• The company's future performance depends on the successful integration and operation of acquired businesses.
• The company is subject to legal proceedings, although management believes these will not have a material adverse effect.
• The company's success depends on maintaining effective internal controls over financial reporting.
• The company's CEO and COO are eligible for significant quarterly performance bonuses contingent upon the company's assets increasing by at least five percent quarter-over-quarter, which could incentivize short-term decision-making.
• The company's cash position decreased from $697,721 as of March 31, 2024, to $522,239 as of December 31, 2024.

Future Outlook

Mister Meds is projected to begin operations in the first quarter of 2025 and plans to apply for state licenses in markets where RxCompoundStore.com is not yet licensed. 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.
• This increase had been contemplated by management as part of the strategic plan to increase sales.

Industry Context

The company operates in the pharmaceutical, telemedicine, and real estate industries. The growth in revenue and strategic acquisitions reflect a broader trend of consolidation and expansion in these sectors. The company's focus on compounding pharmacies and telemedicine aligns with the increasing demand for personalized medicine and remote healthcare services.

Comparison to Industry Standards

• While specific competitor data isn't provided, the company's revenue growth and gross margin improvement suggest a competitive position within its industry.
• Comparable companies in the compounding pharmacy space include Fagron and Wedgewood Pharmacy, while telemedicine competitors include Teladoc Health and Amwell.
• The company's performance should be benchmarked against these industry leaders to assess its relative success and growth potential.

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.
• As of the date hereof, there are no legal claims currently pending or, to our knowledge, threatened against us or any of our officers or directors in their capacity as such or against any of our properties that, in the opinion of our management, would be likely to have a material adverse effect on our financial position, results of operations or cash flows.

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 share repurchase program and improved financial performance are likely to positively impact shareholder value.
• Employees: Increased hiring and labor expenses suggest a growing workforce, potentially leading to more job opportunities.
• Customers: The expansion of services through telemedicine and compounding pharmacies could improve access to healthcare.
• Suppliers: The company's reliance on a few main suppliers could create dependencies and potential risks.

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 company will complete the acquisitions of Las Villas Healthcare, LLC. and Doconsultations.com, LLC., and Magnefuse, LLC and Alicat, LLC after a ninety-day due diligence period.

Key Dates

Keywords

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