accessibilityaccreditedactiveactivityaimalarmalign-bottomalign-center-horizontalalign-center-verticalalign-leftalign-rightalign-topanchorangelannoyedapplearchivearrow-downarrow-leftarrow-rightarrow-uparticleat-signawardbalanceballoonbandaidbarcodebellbicyclebinocularsblindboatbook-closedbookbookmarkbookmarkedbooksbottlebriefcasebrushbugbullhornbuscabinetcakecalendarcameracarcashcertificatechalkchart-barschart-linechart-piechatcheckmarkchevron-downchevron-leftchevron-rightchevron-upcircle-arrow-downcircle-arrow-leftcircle-arrow-rightcircle-arrow-upcircle-backwardcircle-checkmarkcircle-chevron-downcircle-chevron-leftcircle-chevron-rightcircle-chevron-upcircle-crosscircle-ejectcircle-exclamationcircle-facebookcircle-firstcircle-forwardcircle-googlepluscircle-gustcircle-lastcircle-linkedincircle-minuscircle-nextcircle-pausecircle-play-thincircle-playcircle-pluscircle-previouscircle-questioncircle-stopcircle-twittercircleclipboard-checkclipboardclockcloud-databasecloud-downloadcloud-fogcloud-gearcloud-lightningcloud-lockcloud-raincloud-snowcloud-synccloud-uploadcloudcocktail-glasscodecombinecomment-fillcommentcommentscompassconfusedconnectconstruction-coneconstructioncontactscoolcopycredit-cardcropcrosscrowncubedatabasedeletedesigndesktopdiamonddicedinnerdisconnectdocumentdownloaddrawerdreamdropletdumbbellearthediteggellipsisenter-downenter-leftenter-rightenter-upenterenvelopeevilexcludeexit-downexit-leftexit-rightexit-upexitexpandeye-droppereyefacebookfactoryfeatherfile-audiofile-codefile-imagefile-videofile-zipfilefilm-playfindfirefirst-aidflagflip-horizontalflip-verticalfloppy-diskfolderfootprintframefunnelgamepadgasgeargiftglassglassesgoogleplusgraduationgrin-evilgringroupgungusthamburgerhammerhappy-grinhappyheadsetheart-fillhearthistoryhomeiconsinboxintersectipadiphonekeykeyboardkeyholeknifelablamplaptopleafleave-downleave-leftleave-rightleave-uplibrarylifebuoylighterlightning-boltlinklinkedinlistlocationlocklotusmadmagicmagnetmalletmanmapmedalmeet-downmeet-leftmeet-rightmeet-upmic-mutemicminusmoonmousemovemusic-notemusicmustachemutenavigationneutralnewsoptionsoutletpaint-rollerpaintbrushpairpaper-planepaperclippaperspastepatchpawpenpencilphonephotopicturepinpine-treeplaneplayplaylistplug-cordpluspodiumpowerpresentationprinterprofilepulsepuzzlequestionquote-closequote-openradiorank1rank2rank3receptionrecycleredorefreshregisterreply-allreplyroad-signrocketrulersadscissorsscreensearchshareshieldshipshirtshockedshrinkshufflesignalsitemapskullsmartphonesmilespeed-fastspeed-mediumspeed-slowspell-checksquaresubtractsunsyncsyringetabtablettagtagstargetteacupterminalthumbs-downthumbs-uptickettilestimertoilet-papertonguetoolstrailertraintransmissiontrashtreetrophytrucktvtwitterumbrellaundounlinkunlockuploaduserusersvolume-highvolume-lowvolume-mediumvolumewarningwheelchairwifiwinkwomanwonderingwrenchzoom-inzoom-out

Share:

Invest in NowRx

Technology-driven, on-demand pharmacy providing free, same-day delivery

  • $2,082,231Amount raised
  • 1,082Total investors
  • $3.4477Share Price

Purchased securities are not currently tradeable. Expect to hold your investment until the company lists on a national exchange or is acquired.

NowRx is offering securities through the use of an Offering Statement that has been qualified by the Securities and Exchange Commission under Tier II of Regulation A. A copy of the Final Offering Circular that forms a part of the Offering Statement may be obtained both here and below. The contents of the Highlights, Term Sheet sections have been prepared by SI Securities, LLC and shall be deemed broker-dealer communications subject to FINRA Rule 2210 (the “Excluded Sections”). With the exception of the Excluded Sections noted above, this profile contains offering materials prepared solely by NowRx without the assistance of SI Securities, and not subject to FINRA Rule 2210 (the “Issuer Profile”). The Issuer Profile may contain forward-looking statements and information relating to, among other things, the company, its business plan and strategy, and its industry. These statements reflect management’s current views with respect to future events based on information currently available and are subject to risks and uncertainties that could cause the company’s actual results to differ materially. Investors are cautioned not to place undue reliance on these forward-looking statements as they are meant for illustrative purposes and they do not represent guarantees of future results, levels of activity, performance, or achievements, all of which cannot be made. Moreover, no person nor any other person or entity assumes responsibility for the accuracy and completeness of forward-looking statements, and is under no duty to update any such statements to conform them to actual results.


Company Highlights

  • Annual Revenue Run Rate of $7.2mm (based on July 2019 revenue, unaudited)— Revenues for 2018 were $4.7mm, an increase of 89.9% as compared to 2017
  • The company has filled over 100,000 prescriptions and served more than 18,000 customers
  • More than 4,500 referring physicians, an increase of more than 84% since YE 2018
  • Scalable growth model: $40 customer acquisition cost vs. $300 customer lifetime value (physician referral channel)
  • Proprietary Pharmacy Management System, Quickfill v3, certified on Surescripts Health Alliance Network, a network that, according to Surescripts, handles 85% of pharmacies in the US

Fundraise Highlights

  • Total Amount Raised: US $2,082,231
  • Total Investors: 1082
  • Total Round Size: US $20,000,001
  • Raise Description:  Series B
  • Minimum Investment:  US $1,000 per investor
  • Security Type:  Preferred Equity
  • Pre-Money Valuation:  US $65,000,000

NowRx is an on-demand pharmacy, founded with the goal of developing software, artificial intelligence, robotics, and logistics to create the most convenient retail pharmacy service available, focused on free same-day delivery for prescription and OTC medications, thereby eliminating the need to visit a pharmacy.


NowRx is a technologically advanced, customer-centric pharmacy delivery solution, utilizing a comprehensive array of communication devices including mobile apps, text, email, phone, fax, and voice-activated virtual personal assistants (e.g., Google Home), end-to-end robotic dispensing, and an advanced logistics platform that provides convenient, free same-day delivery for all prescription needs. NowRx is disrupting the pharmaceutical industry by replacing the traditional distribution model with an on-demand delivery model while providing a superior customer experience. By eliminating the dependency on store front retail space, NowRx operates out of micro-fulfilment centers resulting in a fixed cost at a fraction of the cost of traditional pharmacies. An end-to-end, fully automated dispensing process driven by robotics and artificial intelligence provides further cost efficiencies.

For employers, NowRx can improve worker productivity by eliminating time employees spend having prescriptions filled off-campus. NowRx can also reduce overall health plan costs through better medication compliance.

Through NowRx's platform, pharmacy services are provided from low cost, highly automated micro-fulfilment centers. NowRx utilizes end-to-end robotic dispensing (“One-Click Fill”) to deliver prescriptions directly to consumers by NowRx's drivers and plug-in electric vehicles. NowRx increases the likelihood of timely prescription fills, encourages medication adherence, reduces the number of missed refills, ultimately reducing costs to health plan insurers, and providing better consumer health. 

NowRx expects to transform the pharmacy delivery industry by providing nationwide free same day on-demand delivery of medical prescription drugs and OTC products, while improving the health of consumers by measuring and increasing prescription compliance.

Pitch Deck

Product & Service

Model: NowRx exists to provide the most convenient pharmacy experience available, with free, same-day delivery of prescription medications. Expedited one-hour delivery is also offered for a $5.00 charge. All pharmacy services are provided from a low cost, highly automated "virtual pharmacy" location, utilizing end-to-end robotic dispensing ("One-Click Fill") and artificially intelligent chat bots, coupled with NowRx drivers and plug-in electric vehicles, to provide a more efficient and effective pharmacy experience for busy customers.

For Customers & Physicians: We offer our services through the NowRx app, by text, by telephone, and through virtual assistants such as Google Home. Physicians are able to send prescriptions to NowRx through electronic prescribing, fax, the NowRx app, or telephone. Current services provided include fulfilling new prescriptions or refills, transferring prescriptions from other pharmacies, consulting pharmacists via phone, and applying of drug manufacturer coupons.

Data-Driven: NowRx's business automatically generates a substantial database recording a wealth of medical prescription data. This affords the company the opportunity to develop, using machine-learning techniques, powerful tools to initiate pharmacy interventions for patients more likely to miss a dose or refill (NowRx Medication Adherence Index), thereby providing better medication adherence and improved health outcomes.

Market & Vision: NowRx is responding to the rapidly increasing consumer demand for services delivered same-day and managed by convenience of mobile apps, chat bots, and voice-activated assistants. The on-demand economy has already attracted more than 22.4 million consumers annually and $57.6 billion in spending. Retail pharmacy is a $260 billion industry. We believe it's only a matter of time before the bulk of the pharmacy industry will fulfill customer needs through same-day delivery and customers standing in line at a pharmacy counter will be a thing of the past. By offering a much more convenient, efficient, and zero cost service, NowRx eliminates the need for its customers to ever visit crowded pharmacies, enabling them to stay at home with their families or remain in their office or at their place of business. Furthermore, NowRx increases the likelihood of timely prescription fills, encourages medication adherence, reduces the number of missed refills, ultimately reducing costs to health plan insurers and providing better consumer health. For employers, NowRx can improve worker productivity by eliminating time employees spend off-campus having prescriptions filled and reduce overall health plan costs through better medication compliance.

Media Mentions

Team Story

One day in early 2015, Cary Breese left his doctor's office with a prescription in hand and drove across town to his local pharmacy where he found himself waiting in three separate lines: the first to drop off the prescription, the second to pay (after a 20 minute wait for the medication to be counted out by hand!), and the third to speak to the pharmacist. Cary found himself thinking: in a new world of on-demand where you can order a car to pick you up within a few minutes, or have practically any retail product delivered to your doorstep, how can it be that the status quo for picking up medications requires you to drive to a pharmacy, stand in multiple lines, and often wait for 20-30 minutes or more for your prescription to be prepared?

Cary immediately called his friend and former work colleague, Sumeet Sheokand, a technical wizard. Together they researched the industry and surrounded themselves with industry experts. Cary and Sumeet jumped in and NowRx was born. 

Four years later NowRx has 5 licensed facilities spread across the San Francisco Bay area, Orange County, and Los Angeles, and has delivered more than 90,000 prescriptions to 16,545 customers.

NowRx is now preparing for its nationwide expansion in 2020 and beyond.

Founders and Officers

Cary Breese

CEO and Co-founder

Cary has more than 15 years experience in senior leadership and is a multiple time CEO, with expertise in technology, healthcare, and financial services. He is experienced in large Fortune 500 companies as well as small start-up environments. As an analytical thinker who excels at execution, creating organizational focus, and leading teams in a consultative management style, he is a versatile leader skilled in operations, with strong foundations in both engineering and finance. He is an Expert in Lean Startup methodology.

Cary Breese

CEO and Co-founder

Cary has more than 15 years experience in senior leadership and is a multiple time CEO, with expertise in technology, healthcare, and financial services. He is experienced in large Fortune 500 companies as well as small start-up environments. As an analytical thinker who excels at execution, creating organizational focus, and leading teams in a consultative management style, he is a versatile leader skilled in operations, with strong foundations in both engineering and finance. He is an Expert in Lean Startup methodology.

Sumeet Shoekand

CTO and Co-Founder

Technology executive with 19 years of experience. As an entrepreneur at heart, with a record of building solutions from ground up, Sumeet has built teams and led them from vision validation, to product definition, design, and delivery. He has wide-ranging technology and framework experience., and is interested in building businesses that will delight customers.

Sumeet Shoekand

CTO and Co-Founder

Technology executive with 19 years of experience. As an entrepreneur at heart, with a record of building solutions from ground up, Sumeet has built teams and led them from vision validation, to product definition, design, and delivery. He has wide-ranging technology and framework experience., and is interested in building businesses that will delight customers.

Key Team Members

Michael Rosenberg

Chief Revenue Officer

Melissa Bostock

Head of Pharmacy

Laemsing Root

Pharmacist-in-Charge

Notable Advisors & Investors

Ulu Ventures

Investor, VC

SI Selections Fund I, L.P.

Investor, Investor, Early Stage Venture Capital Fund

Barry Karlin

Investor, Founder/Chairman/CEO: CRC Health (acq. $720M), Prospira PainCare and NavTech.

Terry Cater

Advisor, Pharmacy Advisory

Jerry Miller

Advisor, Over 37 years experience in Pharmacy Benefit Management. PharmD.

Term Sheet

Fundraising Description

  • Round type:
    Series B

  • Round size:
    US $20,000,001

  • Raised to date:
    US $2,082,231

  • Minimum investment:
    US $1,000

  • Target Minimum:
    US $1,500,000
  • Key Terms

  • Security Type:
    Preferred Equity

  • Share price:
    US $3.4477

  • Pre-money valuation:
    US $65,000,000

  • Option pool:
    2.36%

  • Liquidation preference:
    1.0x
  • Additional Terms

  • Custody of Shares

    Investors who invest $50,000 or less will have their securities held in trust with a Custodian that will serve as a single shareholder of record. These investors will be subject to the Custodian’s Account Agreement, including the electronic delivery of all required information. 


  • Closing Conditions

    SI Securities, LLC has the authority to prevent a closing from occurring if it determines, in its sole discretion, that this investment is no longer suitable at the time of the closing, which includes, but is not limited to, the Company raising at least US $1,500,000 in connection to the current round.


  • Use of Proceeds

    Investor Perks

    Live Offering Perks:

    For those who invest $1,000:

    • Quarterly investor update emails

    For those who invest $5,000:

    • All the above plus
    • Participation in annual investor call with CEO

    For those who invest $10,000:

    • All the above plus
    • “Hydro Flask” with NowRx logo

    For those who invest $25,000:

    • All the above plus
    • Yearly group video chat session with CEO

    For those who invest $50,000:

    • All the above plus
    • Yearly one-on-one video chat session with CEO
    • Attendance at group leadership dinner in Bay Area, CA

    For those who invest $100,000:

    • All the above plus
    • Participation in quarterly group investor call
    • One-time private tour of NowRx facility with CEO

    For those who invest $250,000:

    • All the above plus
    • Quarterly one-on-one video session with CEO
    • Attendance at annual private leadership dinner in Bay Area
    • Participate in annual private tour of a NowRx facility with CEO


    For those who reserved shares and converted those shares into an investment by 11:59pm ET on Thursday, October 31st, you will receive the following reservation period perks:

    For those who converted a reservation of $1,000:

    • Quarterly investor update emails
    • Participation in annual investor call with CEO

    For those who converted a reservation of $5,000:

    • All the above plus
    • “Hydro Flask” with NowRx logo

    For those who converted a reservation of $10,000:

    • All the above plus
    • Yearly group video chat session with CEO

    For those who converted a reservation of $25,000:

    • All the above plus
    • Yearly one-on-one video chat session with CEO
    • Attendance at group leadership dinner in Bay Area, CA

    For those who converted a reservation of $50,000:

    • All the above plus
    • Participation in quarterly group investor call
    • One-time private tour of NowRx facility with CEO

    For those who converted a reservation of $100,000:

    • All the above plus
    • Quarterly one-on-one video session with CEO
    • Attendance at annual private leadership dinner in Bay Area
    • Participate in annual private tour of a NowRx facility with CEO

    It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.

    Prior Rounds

    The graph below illustrates the valuation cap or the pre-money valuation of NowRx's prior rounds by year.


    This chart does not represent guarantees of future valuation growth and/or declines.

    Other

  • Round Size
    US $904,000
  • Closed Date
    Mar 11, 2017
  • Security Type
    Convertible Note
  • Valuation Cap
    US $6,000,000
  • Seed

  • Round Size
    US $1,345,000
  • Closed Date
    Mar 23, 2018
  • Security Type
    Convertible Note
  • Valuation Cap
    US $10,000,000
  • Other

  • Round Size
    US $248,641
  • Closed Date
    Jun 2, 2017
  • Security Type
    Convertible Note
  • Valuation Cap
    US $6,000,000
  • Pre-Seed

  • Round Size
    US $1,027,500
  • Closed Date
    Nov 23, 2016
  • Security Type
    Convertible Note
  • Valuation Cap
    US $6,000,000
  • Series A

  • Round Size
    US $6,796,700
  • Closed Date
    Aug 31, 2018
  • Security Type
    Preferred Equity
  • Pre-money Valuation
    US $20,000,000
  • Financial Discussion

    The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in the financial report. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Unless otherwise indicated, the latest results discussed below are as of December 31, 2018.

    Overview

    NowRx was founded in February 2015 and commenced operations and revenue generation in January 2016. In 2015 the company was focused on obtaining its pharmacy licenses, developing the technology for the pharmacy platform and the mobile app, and establishing its first pharmacy location.

    The company’s net sales consist of payments for prescription and some over-the-counter (“OTC”) items. For a prescription medication covered by a third party payor, such as an insurance company, a pharmacy benefit management (“PBM”) company or a manufacturer coupon plan, the company receives a portion of its revenues from the patient, in the form of a co-payment paid or charged at the time the prescription is filled, and the remainder as a reimbursement from the third-party payor, at contracted prices. For prescription medications not covered by a third-party payor, the payment is collected entirely from the patient. The company records the amounts subject to reimbursement in accounts receivable until payment is received, typically 20-45 days after the prescription is filled. Cost of goods sold consists primarily of prescription and OTC medications that are acquired from wholesale suppliers.

    Our net sales, gross profit margin and gross profit are impacted by, among other things, the percentage of prescriptions that we fill that are generic versus brand name, the rate at which new generic and brand name drugs are introduced to the market, the mix of business between prescription medications and OTC items, and variations in wholesale pricing. Because any number of factors outside of our control can affect timing for a generic conversion, we face substantial uncertainty in predicting when such conversions will occur and what effect they will have on particular future periods. Further consolidation among generic manufacturers coupled with changes in the number of major brand name drugs anticipated to undergo a conversion from branded to generic status may also result in gross margin pressures within the industry. We continuously face reimbursement pressure from PBM companies and other commercial third-party payors. In addition, plan changes with rate adjustments often occur in January and our reimbursement arrangements may provide for rate adjustments at prescribed intervals during their term. We experienced lower reimbursement rates as a percentage of revenue in fiscal year 2018 as compared to the same period in the prior year. Wholesale pricing plans provide volume discounts that present an opportunity to increase gross margins as we grow our business. Increasing the percentage of revenue contributed by OTC items can also expand margins, as OTC items typically have higher margins than prescription medications. Longer-term, we expect downward pressure on reimbursements to be offset by improvements in wholesale volume discounting and increased OTC sales. However there is significant uncertainty in predicting the result of these offsetting factors on margins.

    Results of operations

    Year ended December 31, 2018 Compared to Year ended December 31, 2017

    The company’s net sales for the year ended December 31, 2018 were $4,743,075, an increase of $2,245,408, or 89.9%, from net sales of $2,497,667 in 2017. This increase is attributable to a significant increase in number of customers. Cost of goods sold was $4,108,233 in 2018, resulting in gross profit of $634,842, and a gross margin of 13.4%. This compares to cost of goods sold totaling $2,162,965, gross profit of $334,702, and a gross margin of 13.4% in 2017. The company sold 41,834 prescription orders in 2018, as compared to 20,772 prescription orders in 2017. Average revenue per prescription and average gross profit per prescription in 2018 were $113.38 and $15.17, respectively. In 2017, average revenue per prescription was $120.34 and average gross profit per prescription was $16.11. The company’s mix of business, brand name drug vs. generic drug, was slightly more weighted towards generic drugs in 2018 as compared to 2017, which generally have lower revenue per prescription, similar margin percentage, and lower average gross profit per prescription as compared to brand name products. While the company does not anticipate dramatic change in the mix of business in the near term, new contracts from wholesaler arrangements, drug manufacturers, health facilities, or other partners could have significant impact in its mix of business and/or margins.

    The company’s operating expenses consist of general and administrative, sales and marketing, depreciation, and research and development expenses. Operating expenses in 2018 were $3,514,435, compared to $1,351,086 in 2017, an increase of $2,163,349, or 160.1%, resulting from the company’s expanding operations to meet increased customer demand.

    General and administrative expenses represented the largest component of this increase, from $1,218,349 in 2017 to $2,677,727 in 2018, as:

    • the company’s payroll increased from $789,140, to $1,826,659 as it increased executive compensation in line with early stage startups and added 10 employees,
    • legal and professional services increased from $42,061 to $96,938,
    • lease arrangements increased from $56,194 to $109,027,
    • travel expenses decreased from $54,071 to $44,763, and
    • delivery costs increased from $276,883 to $600,340.

    We anticipate that our general and administrative expenses will continue to increase as we continue to grow and expand geographically. To execute on our plan to establish multiple locations in strategic patient-dense areas, we will need to lease additional space. For instance, in 2018, we extended our lease for our first micro-fulfillment site in Mountain View for an additional 3-year period and entered into a 5-year lease in San Jose, California and a 3-year lease for additional space in Mountain View to establish micro-fulfillment centers. In the fourth quarter of 2018, we entered into additional leases for space in Santa Ana and Burlingame, California, and in 2019 we entered into an additional lease in Mountain View.

    Sales and marketing expenses grew 356.1% from $118,307 in 2017 to $539,623 in 2018 as the company increased marketing efforts to raise awareness among physicians, health facilities and consumers, including the recruiting and hiring of 2 new sales representatives in 2018, and marketing to prospective investors for the Regulation A Offering (see below). The company used a portion of the net proceeds of the Regulation A Offering on marketing, including advertising and hiring sales representatives, to drive further sales. The company continues to invest in sales and marketing, including direct-to-consumer marketing, which will result in a significant increase in these costs in future periods.

    Research and development expenses increased from $2,518 in 2017 to $266,140 in 2018. The company used a significant portion of the net proceeds of the Regulation A Offering on developing a proprietary pharmacy management system, which will require ongoing research and development costs to maintain and further develop.

    Other expenses consist of interest expense, which amounted to $121,308 in 2018, compared to $76,497 in 2017, as the company accrued or paid interest on outstanding convertible securities and inventory financing. See “—Liquidity and Capital Resources – Indebtedness” in the financial report.

    As a result of the foregoing factors, the company’s net loss was $3,000,901 in 2018, a 174.6% increase from a net loss of $1,092,881 in 2017.

    Liquidity and Capital Resources

    As of December 31, 2018, the company’s cash and equivalents was $4,253,065. To date, the company has not made any profits and is still a “development stage company.” The company has recorded losses from the time of its inception in the total amount of $4,963,557.

    In accordance with ASU No. 2014-15 Presentation of Financial Statements – Going Concern (subtopic 205-40), our management evaluates whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the audited financial statements are issued. We have incurred substantial losses since our inception and we expect to continue to incur operating losses in the near-term. We expect that we will need to raise additional capital to meet anticipated cash requirements for the 18-month period following the final closing date of the Regulation A Offering in September 2018. In addition, we regularly consider fundraising opportunities and will determine the timing, nature and amount of financings based upon various factors, including market conditions and our operating plans. As we have done historically, we may again in the future elect to finance operations by selling equity or debt securities or borrowing money. If we raise funds by issuing equity securities, dilution to stockholders may result. Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of our common and preferred stock. If additional funding is required, we cannot assure you that additional funds will be available to us on acceptable terms on a timely basis, if at all, or that we will generate sufficient cash from operations to adequately fund our operating needs. If we are unable to raise additional capital or generate sufficient cash from operations to adequately fund our operations, we will need to curtail planned activities to reduce costs. Doing so will likely have an unfavorable effect on our ability to execute on our business plan, and have an adverse effect on our business, results of operations, and future prospects.

    Market Landscape

    BIA/Kelsey - Sizing the Local On-Demand Economy: 2016-2017


    Traditional Pharmacy Model: In-Store Pickup or Mail Delivery

    The large players in the industry are currently committed financially to a business model that is fundamentally dependent on customers coming into stores to pick up their prescriptions and then buying additional items such as over-the-counter drugs and sundries. In 2017, there were approximately 63,500 traditional pharmacies that dispensed 5.8 billion 30-day prescriptions. The traditional pharmacy model with expansive retail space offering other products beyond prescription medications (such as over-the-counter medications and sundries) creates a strong financial incentive for large pharmacy chains to maintain their in-store pickup model for the up-sell opportunity. We believe adopting a free same-day delivery necessarily reduces the up-sell opportunity created by in-store foot traffic and thereby undermines the financial viability of the thousands of brick and mortar locations that are the backbone of the industry (i.e., industry disruption). Furthermore, we believe the reliance on extensive retail infrastructure by the large pharmacy chains and the apparent lack of automation technology, places them at a significant competitive disadvantage in attempting the NowRx free same-day delivery model. In fact, recent attempts at same-day delivery by several industry leaders come with a charge of $8.99 to the customer or $4.99 for next day delivery, a model we believe will be a non-starter for most mainstream pharmacy customers.

    Current Consumer Options:

    Option 1 - Free, 2-5 day Mail Delivery

    • Amazon / Pillpack
    • Express Scripts
    • Caremark
    • OptumRx

    Option 2 - Next Day Delivery (1-2 day) or $8 Same-Day

    • CVS 
    • Walgreens

    Option 3 - Free, Same-Day Deliver / 1 Hour Delivery for $5

    • NowRx
    • Capsule
    • Medly
    • Alto Pharmacy

    Risks and Disclosures

    The Commission requires the company to identify risks that are specific to its business and its financial condition. The company is still subject to all the same risks that all companies in its business, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological developments (such as hacking and the ability to prevent hacking). Additionally, early-stage companies are inherently more risky than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.

    We could be adversely affected by a decrease in the introduction of new brand name and generic prescription drugs as well as increases in the cost to procure prescription drugs. The profitability of our business depends upon the utilization of prescription drugs. Utilization trends are affected by, among other factors, the introduction of new and successful prescription drugs as well as lower-priced generic alternatives to existing brand name drugs. Inflation in the price of drugs also can adversely affect utilization, particularly given the increased prevalence of high-deductible health insurance plans and related plan design changes. New brand name drugs can result in increased drug utilization and associated sales, while the introduction of lower priced generic alternatives typically results in relatively lower sales, but relatively higher gross profit margins. Accordingly, a decrease in the number or magnitude of significant new brand name drugs or generics successfully introduced, delays in their introduction, or a decrease in the utilization of previously introduced prescription drugs could materially and adversely affect our results of operations.

    In addition, if we experience an increase in the amounts we pay to procure pharmaceutical drugs, including generic drugs, it could have a material adverse effect on our results of operations. Our gross profit margins would be adversely affected to the extent we are not able to offset such cost increases. Any failure to fully offset any such increased prices and costs or to modify our activities to mitigate the impact could have a material adverse effect on our results of operations. Additionally, any future changes in drug prices could significantly differ from our expectations.

    We derive a significant portion of our sales from prescription drug sales reimbursed by a limited number of pharmacy benefit management companies and other third party payors. We derive a significant portion of our sales from prescription drug sales reimbursed through prescription drug plans administered by a limited number of pharmacy benefit management (“PBM”) companies. PBM companies typically administer multiple prescription drug plans that expire at various times and provide for varying reimbursement rates, and often limit coverage to specific drug products on an approved list, known as a formulary, which might not include all of the approved drugs for a particular indication. We cannot assure you that we will continue to participate in any particular PBM company’s pharmacy provider network in any particular future time period. If our participation in the pharmacy provider network for a prescription drug plan administered by one or more of the large PBM companies is restricted or terminated, we expect that our sales would be adversely affected, at least in the short-term. If we are unable to replace any such lost sales, either through an increase in other sales or through a resumption of participation in those plans, our operating results could be materially and adversely affected. If we exit a pharmacy provider network and later resume participation, we cannot assure you that we will achieve any particular level of business on any particular pace, or that all clients of the PBM company will choose to include us again in the pharmacy network for their plans, initially or at all. In addition, in such circumstances we may incur increased marketing and other costs in connection with initiatives to regain former patients and attract new patients covered by such plans.

    Reductions in third party reimbursement levels, from private or government agency plans, and potential changes in industry pricing benchmarks for prescription drugs could materially and adversely affect our results of operations. The substantial majority of the prescriptions we fill are reimbursed by third-party payors, including private and government agency payors. The continued efforts of health maintenance organizations, managed care organizations, PBM companies, government agencies, and other third-party payors to reduce prescription drug costs and pharmacy reimbursement rates, as well as litigation and other legal proceedings relating to how drugs are priced, may adversely impact our results of operations. Typically, health plan changes with rate adjustments often occur in January and our reimbursement arrangements may provide for rate adjustments at prescribed intervals during their term. In addition, in an environment where some PBM company clients utilize narrow or restricted pharmacy provider networks, some of these entities may offer pricing terms that we may not be willing to accept or otherwise restrict our participation in their networks of pharmacy providers.

    Changes in political, economic and regulatory influences also may significantly affect healthcare financing and prescription drug reimbursement practices. For example, there have been multiple attempts through legislative action and legal challenges to repeal or amend the Patient Protection and Affordable Care Act (“ACA”). We cannot predict whether current or future efforts to repeal or amend these laws will be successful, nor can we predict the impact that such a repeal or amendment and any subsequent legislation would have on our business and reimbursement levels. There have also been a number of other proposals and enactments by the federal government and various states to reduce Medicare Part D and Medicaid reimbursement levels in response to budget deficits, and we expect additional proposals in the future. We cannot assure you that recent or future changes in prescription drug reimbursement policies and practices will not materially and adversely affect our results of operations. Efforts to control healthcare costs, including prescription drug costs, are continuous and reductions in third party reimbursement levels could materially and adversely affect our results of operations.

    In addition, many payors are increasingly considering new metrics as the basis for reimbursement rates, such as average sales price, average manufacturer price, and actual acquisition cost. It is possible that the pharmaceutical industry or regulators may evaluate and/or develop an alternative pricing reference to replace average wholesale price, which is the pricing reference used for many of our contracts. Future changes to the pricing benchmarks used to establish pharmaceutical pricing, including changes in the basis for calculating reimbursement by third-party payors, could adversely affect us.

    A shift in pharmacy mix toward lower margin plans and programs could adversely affect our results of operations. We seek to grow prescription volume while operating in a marketplace with continuous reimbursement pressure. A shift in the mix of pharmacy prescription volume towards 90-day, Medicare or other programs offering lower reimbursement rates could adversely affect our results of operations. We currently offer limited 90-day fulfillments. In addition, preferred Medicare Part D networks have increased in number in recent years; however, we do not participate in all such networks. In the future, we may accept lower reimbursement rates in order to secure preferred relationships with Medicare Part D plans serving senior patients with significant pharmacy needs. We intend to develop and expand our relationships with commercial third-party payors to enable new and/or improved market access via participation in the pharmacy provider networks they offer. If we are not able to generate additional prescription volume from patients participating in these programs that is sufficient to offset the impact of lower reimbursement, or if the degree or terms of our participation in such preferred networks declines from current levels in future years, our results of operations could be materially and adversely affected.

    Declines in reimbursement rates that insurance companies pay for prescription medications may adversely impact our gross profit margin and ability to achieve profitability. Our primary source of revenue is based on reimbursements from customer’s health insurance plans, which are largely beyond our control. Reimbursement rates tend to vary over time and across products and health plans. Generally, we have experienced a broader trend of decreasing reimbursement rates impacting our gross profit margin. Although increased sales of OTC products and an increase in our purchasing power to lower our costs of goods sold may offset declining reimbursement rates to some extent, further declines in reimbursement rates may continue to adversely impact our gross profit margins and ability to achieve profitability.

    We operate in a highly competitive industry that is dominated by several very large, well-capitalized market leaders and constantly evolving. New entrants to the market, existing competitor actions, or other changes in market dynamics could adversely impact us. The level of competition in the retail pharmacy and pharmaceutical wholesale industries is high, with several very large, well-capitalized competitors holding a majority share of the market. Changes in market dynamics or actions of competitors or manufacturers, including industry consolidation and the emergence of new competitors and strategic alliances, could materially and adversely impact our business. Disruptive innovation by existing or new competitors could alter the competitive landscape in the future and require us to accurately identify and assess such changes and make timely and effective changes to our strategies and business model to compete effectively. We face intense competition from local, regional, national and global companies, including drugstore and pharmacy chains, independent drugstores and pharmacies, mail-order pharmacies and various other online retailers, some of which are aggressively expanding in California and markets we may seek to enter. Competition may also come from other sources in the future. As competition increases, a significant increase in general pricing pressures could occur, which could require us to reevaluate our pricing structures to remain competitive. For example, if we are not able to anticipate and successfully respond to changes in market conditions, it could result in a loss of customers or renewal of contracts or arrangements on less favorable terms.

    Consolidation in the healthcare industry could adversely affect us. Many organizations in the healthcare industry have consolidated in recent years to create larger healthcare enterprises with greater bargaining power, which has resulted in greater pricing pressures on pharmaceuticals. If this consolidation trend continues, it could give the resulting enterprises even greater bargaining power, which may lead to further pressure on the prices for our products and services. If these pressures result in reductions in our prices, our business would become less profitable unless we are able to achieve corresponding reductions in costs or develop profitable new revenue streams.

    We expect that market demand, government regulation, third-party reimbursement policies, government contracting requirements, and societal pressures will continue to cause the healthcare industry to evolve, potentially resulting in further business consolidations and alliances and increased vertical integration among the industry participants we engage with, which may adversely impact our business operations, financial condition and results of operations.

    We purchase a substantial portion of our brand name and generic drugs from a single wholesaler. A disruption in this relationship may have a negative effect on us. We purchase approximately 90% of our brand name and generic drugs from a single wholesaler, McKesson. The remaining 10% is sourced from Independent Pharmacy Cooperative (“IPC”) and several small suppliers. Because McKesson acts as a wholesaler for drugs purchased from ultimate manufacturers worldwide, any disruption in the supply of a given drug, including supply shortages of key ingredients, or regulatory actions by domestic or foreign government agencies, or specific actions taken by drug manufacturers, could adversely impact McKesson's ability to fulfill our demands, which could adversely affect us. While we believe that alternative sources of supply for most generic and brand name pharmaceuticals are readily available, a significant disruption in our relationship with McKesson or IPC could make it difficult for us to continue to operate our business on a regular basis until we execute a replacement wholesaler agreement or develop and implement self-distribution processes. We believe we could obtain and qualify alternative sources, including through self-distribution, for substantially all of the prescription drugs we sell on an acceptable basis, and accordingly that the impact of any disruption would be temporary.

    If we do not maintain the privacy and security of sensitive customer and business information, it could damage our reputation and we could suffer a loss of revenue, incur substantial additional costs and become subject to litigation and regulatory scrutiny. Our operations are dependent on our information systems and the information collected, processed, stored, and handled by these systems. We rely heavily on our computer systems to manage our ordering, pricing, fulfillment, inventory replenishment, claims processing and other processes. Throughout our operations, we receive, retain and transmit certain confidential information, including personally identifiable information that our customers provide to purchase products or services, interact with our personnel, or otherwise communicate with us. In addition, for these operations, we depend in part on the secure transmission of confidential information over public networks. Our information systems are subject to damage or interruption from power outages, facility damage, computer and telecommunications failures, computer viruses, security breaches, including credit card or personally identifiable information breaches, coordinated cyber attacks, vandalism, catastrophic events and human error. Although we deploy a layered approach to address information security threats and vulnerabilities, including ones from a cyber security standpoint, designed to protect confidential information against data security breaches, a compromise of our information security controls or of those businesses with whom we interact, which results in confidential information being accessed, obtained, damaged, or used by unauthorized or improper persons, could harm our reputation and expose us to regulatory actions and claims from customers, financial institutions, payment card associations and other persons, any of which could adversely affect our business, financial position, and results of operations. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may not immediately produce signs of intrusion, we may not be able to anticipate these techniques or to implement adequate preventative measures. In addition, a security breach could require that we expend substantial additional resources related to the security of information systems and disrupt our businesses.

    Because we store, process and use data that contains personal information, we are subject to complex and evolving laws and regulations regarding privacy and data protection. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in investigations, claims, changes to our business practices, increased cost of operations, and declines in customer retention, any of which could harm our business. The regulatory environment surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and changing requirements across businesses. We are required to comply with increasingly complex and changing data privacy regulations. Complying with these and other changing requirements could cause us to incur substantial costs and require us to change our business practices in certain jurisdictions, any of which could materially adversely affect our business operations and operating results. We may also face audits or investigations by one or more government agencies relating to our compliance with these regulations. Compliance with changes in privacy and information security laws and standards may result in significant expense due to increased investment in technology and the development of new operational processes. If we or those with whom we share information fail to comply with these laws and regulations or experience a data security breach, our reputation could be damaged and we could be subject to additional litigation and regulatory risks. Our security measures may be undermined due to the actions of outside parties, employee error, malfeasance, or otherwise, and, as a result, an unauthorized party may obtain access to our data systems and misappropriate business and personal information. Any such breach or unauthorized access could result in significant legal and financial exposure, damage to our reputation, and potentially have a material adverse effect on our business operations, financial condition and results of operations.

    We are subject to payment-related risks that could increase our operating costs, expose us to fraud or theft, subject us to potential liability and potentially disrupt our business operations. We accept payments using a variety of methods, including cash, checks, credit and debit cards, gift cards and mobile payment technologies such as Apple Pay™, and we may offer new payment options over time. Acceptance of these payment options subjects us to rules, regulations, contractual obligations and compliance requirements, including payment network rules and operating guidelines, data security standards and certification requirements, and rules governing electronic funds transfers. These requirements and related interpretations may change over time, which could make compliance more difficult or costly. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which could increase over time and raise our operating costs. We rely on third parties to provide payment-processing services, including the processing of credit cards, debit cards, and other forms of electronic payment. If these companies become unable to provide these services to us, or if their systems are compromised, it could disrupt our business. The payment methods that we offer also subject us to potential fraud and theft by persons who seek to obtain unauthorized access to or exploit any weaknesses that may exist in the payment systems. If we fail to comply with applicable rules or requirements, or if data is compromised due to a breach or misuse of data relating to our payment systems, we may be liable for costs incurred by payment card issuing banks and other third parties or subject to fines and higher transaction fees, or our ability to accept or facilitate certain types of payments could be impaired. In addition, our reputation could suffer and our customers could lose confidence in certain payment types, which could result in higher costs. As a result, our business and operating results could be adversely affected.

    A significant change in, or noncompliance with, government regulations and other legal requirements could have a material adverse effect on our reputation and profitability. We operate in a complex, highly regulated environment and our operations could be adversely affected by changes to existing legal requirements including the related interpretations and enforcement practices, new legal requirements and/or any failure to comply with applicable regulations. Our business is subject to numerous federal, state and local regulations including licensing and other requirements for pharmacies and reimbursement arrangements. The regulations to which we are subject include, but are not limited to: federal and state registration and regulation of pharmacies and drug discount card programs; dispensing and sale of controlled substances and products containing pseudoephedrine; applicable governmental payor regulations including Medicare and Medicaid; data privacy and security laws and regulations including those under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”); the ACA or any successor to that act; laws and regulations relating to the protection of the environment and health and safety matters, including those governing exposure to, and the management and disposal of, hazardous substances; regulations regarding food and drug safety including those of the Food and Drug Administration (“FDA”) and Drug Enforcement Administration (“DEA”), trade regulations including those of the Federal Trade Commission, and consumer protection and safety regulations including those of the Consumer Product Safety Commission, as well as state regulatory authorities, governing the availability, sale, advertisement and promotion of products we sell; anti-kickback laws; false claims laws; laws against the corporate practice of medicine; and federal and state laws governing health care fraud and abuse and the practice of the profession of pharmacy. For example, the DEA, FDA and various other regulatory authorities regulate the distribution and dispensing of pharmaceuticals and controlled substances. We are required to hold valid DEA and state-level licenses, meet various security and operating standards and comply with the federal and various state controlled substance acts and related regulations governing the sale, dispensing, disposal, holding and distribution of controlled substances. The DEA, FDA and state regulatory authorities have broad enforcement powers, including the ability to seize or recall products and impose significant criminal, civil and administrative sanctions for violations of these laws and regulations.

    Changes in laws, regulations and policies and the related interpretations and enforcement practices may alter the landscape in which we do business and may significantly affect our cost of doing business. The impact of new laws, regulations and policies and the related interpretations and enforcement practices generally cannot be predicted, and changes in applicable laws, regulations and policies and the related interpretations and enforcement practices may require extensive system and operational changes, be difficult to implement, increase our operating costs and require significant capital expenditures. Untimely compliance or noncompliance with applicable laws and regulations could result in the imposition of civil and criminal penalties that could adversely affect the continued operation of our business, including: suspension of payments from government programs; loss of required government certifications; loss of authorizations to participate in or exclusion from government programs, including the Medicare and Medicaid programs; loss of licenses; and significant fines or monetary penalties. Any failure to comply with applicable regulatory requirements could result in significant legal and financial exposure, damage our reputation, and have a material adverse effect on our business operations, financial condition and results of operations.

    We could be adversely affected by product liability, product recall, personal injury or other health and safety issues. We could be adversely impacted by the supply of defective or expired products, including the infiltration of counterfeit products into the supply chain, errors in re-labeling of products, product tampering, product recall and contamination or product mishandling issues. We are also exposed to risks relating to the services we provide. Errors in the dispensing and packaging of pharmaceuticals, including related counseling, and in the provision of other healthcare services could lead to serious injury or death. Product liability or personal injury claims may be asserted against us with respect to any of the pharmaceuticals we sell or services we provide. Should a product or other liability issue arise, the coverage limits under our insurance programs and the indemnification amounts available to us may not be adequate to protect us against claims and judgments. We also may not be able to maintain this insurance on acceptable terms in the future. We could suffer significant reputational damage and financial liability if we experience any of the foregoing health and safety issues or incidents, which could have a material adverse effect on our business operations, financial condition and results of operations.

    We only operate in one geographic area, the Bay Area. Our growth plan depends on establishing our service in new geographic areas outside of the Bay Area. If we are not able to establish additional locations in new geographic areas, we may not be able to successfully implement our planned growth. As of June 30, 2019, we operate out of two licensed micro-fulfilment centers in the Bay Area, with two more facilities permitted and soon to be operational, and one more facility leased but not yet licensed in Orange County, California. In order to continue to grow our business and extend our market position, we will need to establish more micro-fulfilment centers in other patient-dense geographies throughout the United States, including receiving the necessary licenses and permits. Our ability to expand the market for our products and services depends on a number of factors, including, among others, the cost of establishing and operating micro-fulfilment centers, continued customer acceptance of app or web-enabled ordering, our ability to efficiently scale customer acquisition and our ability to attract more physicians who can refer their patients to our services. If we are unable to expand to other areas and/or scale customer acquisition at a cost that provides acceptable long-term return, we may not be able to successfully grow our business.

    We could be adversely affected by a failure to correctly deliver prescriptions. Proof of customer receipt is required for all deliveries of prescription medications, including especially deliveries of narcotics or other controlled drugs, designated as Schedule 2 through 5, where we also require a customer to present picture identification to the driver in addition to providing a digital signature. In certain circumstances, for non-controlled substances and with prior approval of the patient, our drivers are permitted to leave the delivery on the customer door-step and we request subsequent confirmation from the customer via text or app that they successfully received the delivery. In these circumstances, the driver also takes a photo of the package on the customer doorstep using the NowRx driver-side app, Wheels, which digitally stamps the photo with GPS coordinates, time and date and stores it in the customer file. The company’s technology also maintains detailed digital records of delivery routes and delivery stops for each delivery driver at each moment in time, and utilizes sophisticated software to identify delivery address and customer identity. Despite these precautions and technological systems, there remains a small risk that the delivery will be made incorrectly, whether because a prescription is delivered to the wrong address, the wrong medication is left at the right address, the right medication is left at the wrong address, the customer claims the medication was never delivered, or the medication is stolen by a third party. In such instances of mistaken delivery, we could suffer reputational damage or regulatory or financial harm.

    Our failure to attract and retain highly qualified personnel in the future could harm our business. As the company grows, it will be required to hire and attract additional qualified professionals such as pharmacists, pharmacist technicians, accounting, legal, finance, service and engineering experts. The company may not be able to locate or attract qualified individuals for such positions, which will affect the company’s ability to grow and expand its business.

    The company has a history of losses, and may not achieve or maintain profitability in the future. The company has operated at a loss since inception and has raised additional capital and borrowed funds to meet its growth needs. We expect to make significant future investments in order to develop and expand our business and develop more advanced technology to operate more efficiently, which we believe will result in additional sales and marketing and general and administrative expenses that will require increased sales to recover these additional costs. While net sales have grown in recent periods, this growth may not be sustainable or sufficient to cover the costs required to successfully compete. While the company believes its research and development in automation technology will continue to reduce pharmacy labor and operating expense, these technologies are state of the art and have not yet been proven in the industry, so the anticipated gains in efficiency are somewhat uncertain and may not emerge as anticipated. Delivery efficiency, and the resulting reduction in delivery expense, represents a significant factor in the company’s future profitability. As the company gains more customer penetration in the markets in which it operates, we expect more deliveries per square mile per hour will generally result in more efficient routing and higher deliveries per driver per hour (driver-hour). In addition, the company uses state of the art pharmacy management software algorithms to triage new and refill orders to further optimize routing and increase delivery per driver-hour. Should the market penetration and resulting customer density or the algorithms not perform as anticipated, the company may not be able to reduce delivery costs to a level sufficient to achieve sustained profitability. The company anticipates that our purchasing power with the wholesale providers will increase as we scale the business, and that this increased purchasing power will lower the price we pay to the wholesalers and reduce our cost of goods sold. The company may not be able to achieve sufficient size and/or the dynamics of the wholesale market may change, and this reduction in cost of goods sold may not materialize. The company plans to meaningfully increase average revenue per order (“basket size”) and gross profit per order through the sale of over-the-counter medications and related products. If the company is not successful in its efforts to market and sell these additional products, the increase in basket size and gross profit per order may not materialize as anticipated.

    We expect to raise additional capital through equity and/or debt offerings to support our working capital requirements and operating losses. In order to fund future growth and development, the company will likely need to raise additional funds in the future by offering shares of its common or preferred stock and/or other classes of equity or debt that convert into shares of common or preferred stock, any of which offerings would dilute the ownership percentage of investors in this offering. See “Dilution.” Furthermore, if the company raises debt, the holders of the debt would have priority over holders of common and preferred stock and the company may accept terms that restrict its ability to incur more debt. We cannot assure you that the necessary funds will be available on a timely basis, on favorable terms, or at all, or that such funds if raised, would be sufficient. The level and timing of future expenditure will depend on a number of factors, many of which are outside our control. If we are not able to obtain additional capital on acceptable terms, or at all, we may be forced to curtail or abandon our growth plans, which could adversely impact the company, its business, development, financial condition, operating results or prospects.

    The auditor included a “going concern” note in its audit report. We may not have enough funds to sustain the business until it becomes profitable. Even if we raise funds through this offering, we may not accurately anticipate how quickly we may use the funds and whether these funds are sufficient to bring the business to profitability.

    Some investors have more rights than others. As discussed below in “Description of Capital Stock,” the subscription agreement for this offering will provide information rights to investors who invest more than $50,000 in this offering and the right to participate in future financings on more favorable terms to investors who invest more than $250,000 in this offering.

    If you fail to vote your shares, the company’s board of directors may vote them instead. The terms of the Series B Preferred Stock set forth in the company’s amended and restated certificate of incorporation includes a voting procedure. If holders of Series B Preferred Stock fails to take action to vote the holders’ shares within a specified period of time, in certain circumstances, the company’s board of directors will be authorized to vote on behalf of such shares that failed to vote in the board of directors’ discretion. See “Description of Capital Stock – Series B Preferred Stock – Voting Procedure.”

    Investors in this offering must vote their shares to approve of certain future events, including our sale. The subscription agreement that investors will execute in connection with the offering contains a “drag-along provision” related to the sale of the company whereby investors and their transferees agree to vote any shares they own in the same manner as the majority holders of our other classes of voting stock. Specifically, and without limitation, if the board of directors and majority holders of our other classes of stock may determine to sell the company, depending on the nature of the transaction, investors will be forced to sell their stock in that transaction regardless of whether they believe the transaction is the best or highest value for their shares, and regardless of whether they believe the transaction is in their best interests. Furthermore, if the consideration in such a sale includes securities and an investor’s receipt of such securities requires registration or qualification under securities laws or the provision to the investor of any information other than such information as would generally be available in an offering under Regulation D, the company may instead pay the investor in cash in lieu of such securities. See “Description of Capital Stock – Series B Preferred Stock – Drag Along Right.”

    This investment is illiquid. There is no currently established market for reselling these securities. If you decide that you want to resell these securities in the future, you may not be able to find a buyer.

    The value of your investment may be diluted if the company issues additional options. A pool of unallocated options is typically reserved for future employees, which affects the fully-diluted pre-money valuation for this offering. The price per share of the Series B Preferred Stock has been calculated assuming a 2.36% post-money unallocated option pool, which may not account for all additional options the company will issue after the offering and may not provide adequate protection against the dilution investors may face due to such additional issuances. Any option issuances by the company over the 2.36% pool will lower the value of your shares.

    General Risks and Disclosures

    Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.

    Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for these shares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a "liquidation event" occurs. A "liquidation event" is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.

    The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.

    Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.

    You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events — through continuing disclosure that you can use to evaluate the status of your investment.

    Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company's employees, including its management. You should carefully review any disclosure regarding the company's use of proceeds.

    Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.

    Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company's board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.

    Representatives of SI Securities, LLC are affiliated with SI Advisors, LLC ("SI Advisors") Representatives of SI Securities, LLC are affiliated with SI Advisors, LLC ("SI Advisors"). SI Advisors is an exempt investment advisor that acts as the General Partner of SI Selections Fund I, L.P. ("SI Selections Fund"). SI Selections Fund is an early stage venture capital fund owned by third-party investors. From time to time, SI Selections Fund may invest in offerings made available on the SeedInvest platform, including this offering. Investments made by SI Selections Fund may be counted towards the total funds raised necessary to reach the minimum funding target as disclosed in the applicable offering materials.

    NowRx's Offering Circular

    The offering circular is the legal document filed with the SEC for a Regulation A offering and provides facts that an investor needs to make an informed investment decision. The offering circular includes an overview of company and company's business, historical financials and capitalization, and key risk factors.

    Download NowRx's  Offering Circular here.

    Frequently Asked Questions

    About Reg A Offerings
    What does it mean that the SEC has qualified this offering?

    "The SEC has qualified this offering" means the SEC has permitted NowRx to offer for sale the securities described in the Offering Circular to investors such as you. The SEC is not judging the merits, accuracy, or completeness of the offering and information in the Offering Circular.


    Making an Investment in NowRx
    How does investing work?

    When you complete your investment on SeedInvest, your money will be transferred to an escrow account where an independent escrow agent will watch over your investment until it is accepted by NowRx. Once NowRx accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to NowRx in exchange for your securities. At that point, you will be a proud owner in NowRx.


    What is the difference between preferred equity and a convertible note?

    Preferred equity is usually issued to outside investors and carries rights and conditions that are different from that of common stock. For example, preferred equity may include rights that prevent or minimize the effects of dilution or grants special privileges in situations when the company is sold.

    A convertible note is a unique form of debt that converts into equity, usually in conjunction with a future financing round. The investor effectively loans money to a startup with the expectation that they will receive equity in the company in the future at a discounted price per share when the company raises its next round of financing.

    To learn more about startup investment types check out “How to Choose a Startup Investment” in our academy.


    What will I need to complete my investment?

    To make an investment, you will need the following information readily available:

    1. Personal information such as your current address and phone number
    2. Employment and employer information
    3. Net worth and income information
    4. Social Security Number or passport
    5. ABA bank routing number and checking account number (typically found on a personal check or bank statement)

    What if I change my mind about investing?

    Until a closing occurs, you may cancel your investment at any time, for any reason. You will receive an email when the closing occurs and your securities have been issued. If you have already funded your investment and your funds are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please go to your portfolio page by clicking your profile icon in the top right corner.


    After My Investment
    How can I sell my securities in the future?

    Currently there is no market or liquidity for these securities. Right now NowRx does not plan to list these securities on a national exchange or another secondary market. At some point NowRx may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when NowRx either lists their securities on an exchange, is acquired, or goes bankrupt.


    How do I keep track of this investment?

    You can return to SeedInvest at any time to view your portfolio of investments and obtain a summary statement.


    Other General Questions
    What is this page about?

    This is NowRx's fundraising profile page, where you can find information that may be helpful for you to make an investment decision in their company. The information on this page includes the company overview, team bios, and the risks and disclosures related to this investment opportunity. You will also find a copy of the NowRx's Offering Circular, which has been qualified by the SEC. The Offering Circular includes important details about NowRx's fundraise that you should review before investing.


    What are the risks of this investment?

    This investment is highly speculative and should not be made by anyone who cannot afford to risk the entire investment amount. In addition to these risks, you should carefully consider the specific information and risks disclosed in NowRx’s profile and Offering Circular.