Inspire Veterinary Partners(US:IVP)2025-03-31 20:05Company Overview - Inspire Veterinary completed its initial public offering on August 31, 2023, with shares quoted on Nasdaq under the symbol "IVP" [233]. - As of the filing date, the company operates thirteen clinics across nine states, focusing on acquiring existing hospitals with strong financial track records and growth potential [234]. Acquisitions and Expansion Plans - The company has acquired multiple veterinary practices, with notable transactions including Pony Express Veterinary Hospital for $3,108,652 and Southern Kern Veterinary Clinic for $2,000,000 [245]. - The company aims to acquire multi-unit practices to facilitate growth and enhance internal referrals and career development opportunities [243]. - The company plans to expand into emergency care and mixed animal services, including equine care, in the coming years [239]. - The company intends to continue conducting due diligence for strategic acquisitions of general practices and specialty hospitals through 2025 and beyond [242]. - The Company acquired Pony Express Veterinary Hospital for $2,608,652 and real estate for $500,000 on October 31, 2022, financed by loans totaling $2,853,314 [259]. - Williamsburg Animal Clinic was acquired for $850,000 on December 9, 2022, financed by a loan of $637,500 [260]. - The Old 41 Animal Hospital was acquired for $665,000 and real estate for $800,000 on December 16, 2022, financed by loans totaling $1,208,000 [261]. - Valley Veterinary Service was acquired for $800,000 in cash, with a holdback of $200,000 and $400,000 in restricted shares on November 8, 2023 [262]. - The company has developed metrics for assessing and integrating new hospital acquisitions, focusing on markets with large pet populations [238]. Financial Performance - Total revenue for the year ended December 31, 2024, was $16,592,109, a decrease of $83,284 or 0% compared to 2023 [264]. - Service revenue increased by $308,592 or 3% to $12,188,526 for the year ended December 31, 2024, driven by acquisitions and price increases [271]. - Product revenue decreased by $391,876 or 8% to $4,403,583 for the year ended December 31, 2024, due to lower customer purchases per visit [272]. - General and administrative expenses rose by $1,663,815 or 18% to $11,421,352 for the year ended December 31, 2024 [264]. - The net loss attributable to Class A and B common stockholders was $14,485,111 for the year ended December 31, 2024, a decrease of $579,020 or 4% compared to 2023 [264]. - The company experienced a net loss of $14.3 million for the year ended December 31, 2024, an increase of $529 thousand compared to 2023 [335]. - Net loss decreased by $528,625, or 5%, to $14,264,261 for the year ended December 31, 2024, compared to $14,792,886 for 2023, attributed to the gain on the sale of KVC practice [279]. Costs and Expenses - Cost of service revenue increased by $35,319, or 0%, to $9,736,282 for the year ended December 31, 2024, compared to $9,700,963 for 2023, primarily driven by the acquisition of Valley Veterinary animal hospital [273]. - Cost of product revenue rose by $142,764, or 4%, to $3,563,279 for the year ended December 31, 2024, compared to $3,420,515 for 2023, mainly due to the acquisition of Valley Veterinary and increased payroll costs [275]. - General and administrative expenses increased by $1,945,065, or 21%, to $11,421,352 for the year ended December 31, 2024, compared to $9,476,287 for 2023, primarily due to expenses from the Valley Veterinary acquisition and new marketing agreements [276]. - Other expenses decreased by $2,380,752, or 31%, to $5,237,223 for the year ended December 31, 2024, compared to $7,617,975 for 2023, primarily due to a decrease in beneficial conversion [278]. - Depreciation and amortization expenses increased by $56,060, or 4%, to $1,308,619 for the year ended December 31, 2024, compared to $1,252,539 for 2023, mainly due to the acquisition of depreciable assets from Valley Veterinary [277]. Debt and Financing - The company plans to raise additional capital through a combination of private or public equity offerings, debt financings, and strategic alliances [286]. - The company has a repayment requirement of $3,416,965 due in 2025, with additional payments scheduled in subsequent years [305]. - The company entered into three commercial loans with First Southern National Bank (FSB) as part of the acquisition, with the first loan amounting to $1,105,000 at a fixed interest rate of 4.35% [293]. - The second commercial loan with FSB was for $1,278,400, also at a fixed interest rate of 4.35%, with a maturity date extended to August 31, 2024 [294]. - The company has a total of $7,623,235 in notes payable to FSB as of December 31, 2024, with a significant portion being long-term [303]. - As of December 31, 2024, total notes payable amounted to $11,983,137, a decrease from $15,076,588 in 2023, reflecting a reduction of approximately 20% [305]. - The FNBD notes payable decreased from $9,309,286 in 2023 to $8,621,519 in 2024, indicating a reduction of approximately 7.4% [305]. - The FSB notes payable also decreased from $5,767,302 in 2023 to $3,361,618 in 2024, representing a decline of approximately 41.6% [305]. - The Company recognized a debt extinguishment loss of $16,105 upon the IPO completion on August 31, 2023, and a beneficial conversion feature of $2,567,866 for the issuance of Series A preferred stock [314]. Cash Flow and Operations - The company reported a net cash used in operating activities of $(10,005,866) for the year ended December 31, 2024, compared to $(3,820,771) in 2023, indicating a significant increase in cash outflow [334]. - Financing activities generated $10,588,578 in cash for the year ended December 31, 2024, up from $5,625,009 in 2023, reflecting increased capital raising efforts [334]. - Future minimum lease payments required under operating leases total $2,127,468 as of December 31, 2024, with undiscounted cash flows amounting to $2,953,326 [333]. Intangible Assets and Goodwill - The company has intangible assets and goodwill totaling $11,430,454 as of December 31, 2024, with goodwill alone amounting to $8,022,082 [350]. - The company’s client list intangible asset is valued at $1,916,444, reflecting a conservative retention rate of 74% based on industry standards [350]. - The Company uses a 15-year useful life for client lists, with a discount rate of 19.6% applied to calculate present value of cash flows [349]. - Goodwill is tested for impairment annually or when significant changes occur that may reduce fair value [344]. - Intangible assets are amortized over a 5-year term for client lists and trademarks, and over a 2-year term for non-compete agreements [346]. - The Multi-Period Excess Earnings Method (MPEEM) is used to determine the fair market value of client list intangible assets [347].