Beacon Securities comments on Hydreight Technologies pharmacy partnership

Beacon Securities analyst Gabriel Leung noted in a July 14 update that Hydreight Technologies (Hydreight Technologies Stock Quote, Chart, News, Analysts, Financials TSXV:NURS) has entered into a binding letter of intent with Texas-based Perfect Scripts to form a strategic partnership.

Nevada-based Hydreight has developed an integrated platform that connects a network of about 3,000 nurses with brick-and-mortar franchises and online healthcare companies. The platform includes a proprietary suite of tools for managing appointments, inventory, and patient records, along with nationwide access to physicians, telehealth services, and both 503A and 503B pharmacy networks.

“Hydreight will acquire an initial 5% interest in Perfect Scripts for consideration of 2,250,000 common shares of Hydreight with each Hydreight Compensation Share issued at a deemed price equal to the greater of $2.30/sh and the lowest price permitted by the policies of TSX Venture Exchange,” Leung said.

Hydreight and Perfect Scripts are teaming up to launch a 503B pharmacy in the United States. As part of the partnership, Hydreight will get the lowest pricing on all products sold or provided by Perfect Scripts and its subsidiaries, under terms to be outlined in a future pharmacy services agreement.

Hydreight will also have the right to keep its proportional ownership in Perfect Scripts and the option to acquire up to 40% of the company’s outstanding shares.

Perfect Scripts runs a group of pharmacies that includes local retail, large-scale distribution, and nationwide mail-order service. One pharmacy is based in Iowa, another in Florida, and their mail-order operation serves all 50 states. They use their own digital system, PerfectOS, to process prescriptions quickly and accurately, with the capacity to handle over 150,000 orders a day.

“Hydreight noted that this strategic deal helps to further vertically integrate its supply chain by adding a preferred, 50-state, 503A pharmacy, which will help to secure allocation of various pharmaceuticals (brand-name, 503A and 503B compounded medication) and also offer preferred pricing to the benefit of Hydreight’s gross margins,” Leung said.

He said Hydreight management sees potential to move some of Perfect Scripts’ direct-to-consumer customers onto Hydreight’s VSDHOne platform, which could speed up growth and include profit sharing. They also expect the planned 503B pharmacy—possibly online by early 2026—to boost growth and margins by securing a steady supply of compounded medications. The deal is expected to close within 45 days, pending conditions.

In June Leung noted that the company’s revenue has grown sharply, from $1.2-million in 2021 to $16-million in 2024. In the first quarter of fiscal 2025, revenue rose 34% year-over-year, and Hydreight posted net income profitability for the second straight quarter. Gross margin for Q1 was 33.1%.

Revenue currently comes from three sources: pharmacy sales (80% of Q1 revenue), business partner contracts (16%), and commissions (4%). The company’s newer vertical, VSDHOne, a direct-to-consumer healthcare platform, is expected to start contributing revenue in Q3.

Hydreight had $6-million in cash and $812,000 in debt as of the end of Q1. In February, it raised $5.4-million through a share offering priced at $1.55 per share, which included three-year warrants exercisable at $2.00.

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