TRxADE HEALTH INC
For the period ended Mar 31, 2024. Filed Jun 26, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed Jun 26, 2024
SCNX$3.13+0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-09-30; filed 2024-01-16.
0001493152-24-002429
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-03-31; filed 2024-06-26.
0001493152-24-025217
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 95 previous paragraphs and 70 current paragraphs.
34 unchanged; 20 reworded; 16 added; 40 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
Bonum Health, LLC (“Bonum Health”), was formed to hold certain telehealth assets acquired in October 2019. The “Bonum Health Hub” was launched in February 2020; however, the Company does not anticipate installations moving forward.
Current report
Merger
Current report
Not all of the closing conditions of the Merger Agreement were met. As a result, the Company entered into Amendment No. 1 to the Amended and Restated Agreement and Plan of Merger (the “Amendment”) on January 8, 2024. Under the terms of the Amendment, the merger consideration to the shareholders of Superlatus was adjusted to the aggregate of 136,441 shares of common stock of the Company, representing 19.99% of the total issued and outstanding common stock of the Company after the consummation of the Merger and 15,759 shares of Company’s Series B Preferred Stock, with a conversion ratio of 100 shares of Series B Preferred Stock to one share of common stock. At Closing, the value of the common stock was $7.30 per share, resulting in a total value of $12,500,089. Additionally, the shareholders of Superlatus agreed to surrender back to the Company 291,096 shares of the Company’s Series B Preferred Stock. As described below, in March 2024 the Company divested of its interest in Superlatus.
Current report
Dispositions
Current report
On February 16, 2024, the Company, together with Trxade, Inc., and Micro Merchant Systems, Inc. (“MMS”) entered into an asset purchase agreement (the “APA”) under which MMS agreed to purchase for cash substantially all of the assets of Trxade, Inc. On February 16, 2024, the parties consummated the closing of the transactions contemplated by the APA. Trxade, Inc. operated a web-based market platform designed to enable trading among healthcare buyers and sellers of pharmaceuticals, accessories and services. The purchase price paid at closing was $22.6 million. Pursuant to the terms and conditions of the APA, because MMS received $1.6 million or greater in certain collections from third parties resulting from any products or services sold, or provided, by the business assets and operations acquired from Trxade, Inc. during the period ending on the four-month anniversary of the closing date, Trxade, Inc. was due an additional $7.5 million payment from MMS. The Company received the $7.5 million in May 2024.
Current report
On March 5, 2024, the Company entered in a Stock Purchase Agreement (“SPA”) with Superlatus Foods Inc. (the “Buyer”). Pursuant to the SPA, the Company sold all of the issued and outstanding stock of Superlatus Inc., to the Buyer. The $1.00 purchase price for the Stock was delivered to the Company at the closing, which occurred simultaneously with the execution of the SPA. As a result of the transaction Superlatus is no longer a subsidiary of the Company, and the rights and assets of Superlatus together with various liabilities and obligations that were specific to Superlatus became rights and obligations of Buyer.
Current report
On May 23, 2024, the Company received a notice (the “Notice”) from the Nasdaq Listing Qualifications Department indicating that the Company was not compliant with the timely filing requirement for continued listing under Nasdaq Listing Rule 5250(c)(1) (the “Listing Rule”), which requires listed companies to timely file all required periodic reports with the SEC. The Notice indicates that the Company must, no later than July 22, 2024, submit a plan to regain compliance with respect to the filing requirement. Following receipt of such plan, Nasdaq may grant an extension of up to 180 calendar days from the due date of the Company’s Quarterly Report on Form 10-Q for the period ending March 31, 2024 (the “Form 10-Q”), or until November 18, 2024, for the Company to regain compliance. However, as a result of filing this Form 10-Q, the Company believes it has fully regained compliance with the Nasdaq Listing Rule.
Current report
The increase in cash as of March 31, 2024, compared to December 31, 2023, was primarily due to the proceeds from the disposition of assets and liabilities of Trxade, Inc., from the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Current report
Special Cash Dividend
Current report
On March 6, 2024, the Company announced the declaration of a special cash dividend of eight dollars ($8.00) per share of common stock, payable to stockholders of record as of March 18, 2024, with the dividend being paid on March 22, 2024. The special dividend of $12,671,072 was paid using a portion of the proceeds from the closing of the sale of the Company’s Trxade assets.
Current report
We believe that we have adequate cash to implement our plan to operate a business-to-business web-based marketplace focused on the United States pharmaceutical industry. Our core service is designed to bring the nation’s independent pharmacies and accredited national suppliers of pharmaceuticals together to provide efficient and transparent buying and selling opportunities.
Current report
There are no revenues for the three months ended March 31, 2024. Revenues decreased by $493,316, compared to the same period ended March 31, 2023.
Current report
Accounting and legal expenses increased $90,831 for the three months ended March 31, 2024 to $339,047 compared to $248,216 for the comparable period in 2023. The increase is primarily due to increase in amount of legal services during the three months ended March 31, 2024 as compared to the same period in 2023.
Current report
Professional fees increased $43,599 to $179,553 compared to $135,954 for the comparable period in 2023. The increase was primarily due to increase in Board members’ fees and consulting expense.
Current report
General and administrative expenses (including stock-based compensation expense) increased $4,452,819 for the three months ended March 31, 2024 to $4,700,840 compared to $248,021 for the comparable period in 2023. The increase was mainly due to shares issued for services at fair value of $4,450,919.
Current report
Technology expense increased $10,142 for the three months ended March 31, 2024 to $53,859 compared to $43,717 for the comparable period in 2023. The increase was mainly due to increased software expense and software support expense.
Removed paragraphs (40)
Previous report
TRxADE HEALTH is a technology-enabled health services platform. Through our subsidiary companies we focus on digitalizing the retail pharmacy and health services experience by optimizing drug procurement, the prescription journey, access to physicians in the patient’s home and patient engagement in the U.S.
Previous report
Our services provide pricing transparency, purchasing capabilities and other value-added services on a single platform focused on serving the nation’s approximately 19,397 independent pharmacies with annual purchasing power of $67.1 billion (according to the National Community of Pharmacists Association’s 2021 Digest). Our national wholesale supply partners are able to fulfill orders on our platform in real-time and provide pharmacies with cost-saving payment terms and next-day delivery capabilities in unrestrictive states under the Model State Pharmacy Act and Model Rules of the National Association of Boards of Pharmacy (Model Act). We have expanded significantly since 2015 and now have around 14,100+ registered members on our sales platform.
Previous report
On September 27, 2023, the Company entered into an Asset Purchase Agreement (“APA”) with The Urgent Company, Inc. (“TUC”) and its wholly owned subsidiaries, pursuant to which, the Company was assigned certain inventory and property and equipment for consideration of a $3,150,000 promissory note. This acquisition is expected to enhance the Company’s production of sustainable food products and enable the expansion of market share.
Previous report
As a condition and inducement to Superlatus’ willingness to enter into the Merger Agreement, on June 28, 2023, Suren Ajjarapu and Prashant Patel (the “Principal Stockholders”) entered into an agreement with TRxADE (the “Stock Swap Agreement”), pursuant to which, TRxADE will transfer all of the shares or membership interest of a variety of operating subsidiaries currently own by TRxADE to Principal Stockholders, in exchange for Suran Ajjarapu to surrender 85,000 share of common stock of TRxADE and Prashant Patel to surrender 81,666 shares of the common stock of TRxADE (the “Stock Swap Transaction”). The closing of the Stock Swap Transaction shall take place simultaneously with the approval of TRxADE stockholders of the conversion of the Series B preferred Stock into common stock. The closing of the Stock Swap Transaction is subject to the simultaneous condition that the Merger is successfully closed. As of the date of this filing, TRxADE stockholders have not approved the conversion.
Previous report
In connection with the Merger, on July 31, 2023, certain Superlatus shareholders as of immediately prior to the Merger, and certain directors and officers of TRxADE as of immediately prior to the Merger, entered into lock-up agreements with the Company, pursuant to which each such stockholder will be subject to a 360 day lockup on the sale or transfer of shares of common stock or securities nued into or exercisable for or exchangeable for common stock held by each such stockholder at the closing of the Merger (the “Lock-up Agreements”).
Previous report
In connection with the Merger, effective one (1) business day immediately prior to the Closing Date (the “MEDS Rights Record Date”), the Company issued to the shareholders of the Company as of the MEDS Rights Record Date, including the independent directors who are entitled to certain amount of common stock of the Company in connection with their 2023 annual compensation and regardless of whether the common stock has been issued or vest before the MEDS Rights Records Date (collectively, the “MEDS Rights Shareholders”) a non-transferrable right to receive one share of common stock of the Company at no cost (the “MEDS Rights”), with seven (7) MEDS Rights issued per share of common stock of the Company held as of the MEDS Rights Record Date, conditioned upon their execution of a Registration Rights Agreement. Such issuances will be made in reliance on the exemption from registration pursuant to Section 3(a)(9) or Section 4(a)(2) of the Securities Act, Regulation D under the Securities Act promulgated thereunder, and corresponding provisions of state securities or “blue sky” laws. The MEDS Rights are not actionable or transferable until registration; provided they become transferable one year after the date of the Merger if no registration has occurred. As of the date of this filing, no shares of common stock were issued to MEDS Rights Shareholders.
Previous report
On February 4, 2023, and effective as of February 1, 2023, the Company entered into a Voluntary Withdrawal and Release Agreement, (the “Release Agreement”). Pursuant to the Release Agreement, (a) the Company voluntarily withdrew as a member of SOSRx pursuant to the terms of the Operating Agreement of SOSRx, (b) the Company’s interests in SOSRx were terminated; (c) the Company’s promissory note in favor of SOSRx was canceled; and (d) the parties agreed that no earn out payments will be due.
Previous report
TRxADE Inc
Previous report
Trxade.com is a web-based pharmaceutical marketplace engaged in promoting and enabling commerce among independent pharmacies, small chains, hospitals, clinics and alternate dispensing sites with large pharmaceutical suppliers nationally. Our marketplace has over 72 national and regional pharmaceutical suppliers providing over 120,000 branded and generic drugs, including over the counter drugs and drugs available for purchase by pharmacists. We generate revenue from these services by charging a transaction fee to the seller of the products for sales conducted on the Trxade platform. The buyers do not bear the cost of transaction fees for the purchases that they make, nor do they pay a fee to join or register with our platform. Our core service has the goal of bringing the nation’s independent pharmacies and accredited national suppliers of pharmaceuticals together to provide efficient and transparent buying and selling opportunities.
Previous report
As of September 30, 2023, the TRxADE platform increased its registered users by 870 or 6.17% compared to September 30, 2022. For the nine months ended September 30, 2023, new registrations were 196 compared to 296 for the same period in 2022. As of September 30, 2023, total registered users were approximately 14,900+ compared to 14,100+ at September 30, 2022.
Previous report
The table below summarizes the key metrics that management evaluated in relation to the activity on the Trxade platform for the nine-month period ended September 30, 2023 compared to the same period in 2022:
Previous report
Integra Pharma Solutions, LLC
Previous report
Community Specialty Pharmacy, LLC
Previous report
Community Specialty Pharmacy, LLC (“CSP”) is a licensed retail pharmacy. CSP was founded in 2010 with a goal of providing customer care at a level above and beyond anything the market had experienced before. CSP has carved a niche in the competitive independent pharmacy industry with its patient-driven approach. As discussed below, we have started a process to explore strategic alternatives for CSP, as well as our other business-to-consumer (B2C) subsidiaries.
Previous report
Alliance Pharma Solutions, LLC
Previous report
Alliance Pharma Solutions, LLC, a.k.a. DelivMeds, (“APS”) was established in 2018 as a digital option to traditional prescription delivery. APS is currently being rebranded and the digital technology continues to be developed. APS has generated no revenue and we continue to incur significant technology expenses. As discussed above, we entered into a Membership Purchase Agreement in January of 2023 to sell 100% of the outstanding membership interests of Alliance Pharma Solutions, LLC and Community Specialty Pharmacy, LLC. The sale closed on August 22, 2023. The financial results of APS and CSP are presented in discontinued operations on the Consolidated Balance Sheets and Consolidated Statements of Operations.
Previous report
Bonum Health, LLC
Previous report
Our Bonum Health, LLC (“Bonum”) operations were acquired in October of 2019. Bonum is a digital healthcare technology platform focused on making healthcare affordable, accessible and convenient through Telehealth services. Patients can use the Bonum Health mobile app or website to access board-certified medical providers, for non-emergent services. As of May 2022, Bonum also announced agreements to offer telehealth veterinary services. Additional services also available include Men’s and Women’s Health, Dermatology, Pediatrics and Ophthalmology in the comfort of their home or from anywhere. These services can be affordably accessed by the under-insured, non-insured and under-served communities seeking access to essential healthcare services. For employers, Bonum provides Telehealth solutions allowing employers to provide convenient and affordable health coverage to their employees without requiring health insurance. Our Bonum health subsidiary provides affordable access to medical professionals in the patient’s home. As discussed below, we have started a process to explore strategic alternatives for Bonum, as well as our other business-to-consumer (B2C) subsidiaries.
Previous report
SOSRx, LLC
Previous report
On February 15, 2022, the Company entered into a relationship with Exchange Health, LLC. On February 4, 2023, a voluntary withdrawal agreement was signed by both parties.
Previous report
Superlatus, Inc.
Previous report
The Urgent Company, Inc.
Previous report
The Urgent Company and its consumer brands focus on creating sustainable, animal-free products.
Previous report
Nasdaq Listing Rule 5550(b)
Previous report
As previously disclosed in the Current Report on Form 8-K, filed by the Company with the SEC on August 1, 2022, on July 29, 2022, the Company received a letter from Nasdaq notifying the Company that it was not in compliance with the minimum $2,500,000 stockholders’ equity requirement in Nasdaq Listing Rule 5550(b)(1) (the “Rule”) for continued listing on the Nasdaq Capital Market, and did not meet the alternative listing requirements under Nasdaq Listing Rule 5550(b). On October 17, 2022, Nasdaq granted the Company’s request for an extension until January 25, 2023, to regain compliance with this requirement.
Previous report
On January 30, 2023, the Company received a delist determination letter from Nasdaq advising the Company that Nasdaq had determined that the Company did not meet the terms of the extension. Specifically, the Company did not complete its proposed transactions and was unable to file a Current Report on Form 8-K by January 25, 2023, evidencing compliance with the Rule.
Previous report
On February 6, 2023, the Company submitted a hearing request to the Nasdaq Hearings Panel (the “Panel”), which request stayed any delisting action by Nasdaq at least until the hearing process concludes and any extension granted by the Panel expires.
Previous report
A hearing before the Panel was held on March 23, 2023, at which the Company presented a plan to regain compliance with the Rule that included an underwritten public offering of Company securities of up to $15,000,000 and expense reductions. On April 5, 2023, the Company received a letter from Nasdaq advising the Company that the Panel was granting the Company’s request for an exception to permit the continued listing of the Company’s stock on the Nasdaq Capital Market while it completes a public offering of its Company securities up to $15,000,000. The Panel’s grant of the Company’s request for continued listing is subject to the conditions that (i) on or before April 15, 2023, the Company must advise the Panel on the status of the filing of an S-1 registration statement for the offering, and (ii) on or before June 21, 2023, the Company must demonstrate compliance with the Rule.
Previous report
The Company received a notice from the Panel that the Panel had granted the Company an extension until July 31, 2023, to demonstrate compliance with the $2,500,000 minimum stockholders’ equity requirement, as outlined in the Nasdaq’s listing rule 5550(b)(1). As a result of the Merger as described below, the Company now has stockholders’ equity above the minimum stockholders’ equity requirement for continued listing of $2,500,000.
Previous report
The decrease in cash as of September 30, 2023, compared to December 31, 2022, was primarily due to increases in professional fees and accounting and legal expense of $525,479 and $215,409, respectively, from the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Increased expenses were mainly the result of the Merger and the TUC acquisition. Additionally, technology expense increased as a result of an increase in the primary vendor’s rates*.*The effect of these increases was partially offset by decreases in wage and salary expense as a result of the departure of two members of management during the nine months ended September 30, 2023.
Previous report
Our revenues for the three months ended September 30, 2023, were from the Trxade platform and Integra Pharma Solutions. Revenues increased by $2,225, compared to the same period ended September 30, 2022. Revenue generated by Trxade Inc from platform sales and Trxade Prime increase approximately 0% for the three months ended September 30, 2023 compared to the same period ended September 30, 2022.
Previous report
Accounting and legal expenses increased $217,950 for the three months ended September 30, 2023 to $408,957 compared to $191,007 for the comparable period in 2022 and professional fees increased $335,584 to $418,294 compared to $82,710 for the comparable period in 2022. These increases were due to the Merger and purchase of TUC. General and administrative expenses (less stock-based compensation expense) increased $409,764 for the three months ended September 30, 2023, to $610,074 compared to $200,310 for the comparable period in 2022. The increase was mainly due to increased operations as a result of the Merger. Technology, research and development increased $172,035 for the three months ended September 30, 2023 to $410,612 compared to $238,577 for the comparable period in 2022. The increase was mainly due to increased billing rates from the primary vendor. These increases were partially offset by decreases in wages and salary expense as a result of the departure of two members of management as well as the effects of other cost-cutting efforts.
Previous report
Our revenues for the nine months ended September 30, 2023, were from the Trxade platform and Integra Pharma Solutions. Revenues decreased by $2,074,019 compared to the same period ended September 30, 2022. Trxade Inc revenue generated from platform sales and Trxade Prime decreased approximately 26% for the nine months ended September 30, 2023 compared to the same period ended September 30, 2022. The decrease in revenue for Trxade Prime is related to decreased sales, see “Company Overview - Integra Pharma Solutions”.
Previous report
For the nine-month period ended September 30, 2023, cost of goods sold and gross profit were $1,072,934 and $4,846,852 respectively, and $3,991,234 and $4,002,571, respectively for the same period in 2022. Gross profit as a percentage of sales was 82% for the nine months ended September 30, 2023, compared to 50% for the nine months ended September 30, 2022.
Previous report
Accounting and legal expenses increased $215,409 for the nine months ended September 30, 2023 to $782,495 compared to $567,086 for the comparable period in 2022 and professional fees increased $525,479 to $782,286 compared to $256,807 for the comparable period in 2022. These increases were due to the Merger and purchase of TUC. Technology, research and development increased $319,499 for the nine months ended September 30, 2023 to $1,010,374 compared to $690,875 for the comparable period in 2022. The increase was mainly due to increased billing rates from the primary vendor. These increases were partially offset by decreases in wages and salary expense as a result of the departure of two members of management.
Previous report
We had interest expense, net of $490,706 for the nine months ended September 30, 2023, compared to interest expense of $132,230 for the nine months ended September 30, 2022. The reason for the increase was the increase in the balance of the contingent funding liability due to the accounts receivable advances taken in 2023 and 2022, off set by interest income from the GSG legal settlement (see discussion above under “Recent Events”).
Previous report
During the nine months ended September 30, 2023, the Company recognized a loss the change in the fair value of warrants of $443,308. As the warrants were issued in October 2022, no gain or loss was recognized during the three months ended September 30, 2022.
Previous report
Net loss from operations increased $20,838 to a net loss of $2,004,581 for the nine months ended September 30, 2023, compared to a net loss of $1,983,743 for the nine months ended September 30, 2022. The increase in net loss is mainly due to an increase in gross profit, partially offset but increases in spending related to the Merger and purchase of TUC.
Previous report
Net loss from discontinued operations increased $3,499,932 to a net loss of $4,123,028 for the nine months ended September 30, 2023, compared to a net loss from discontinued operations of $623,096 for the nine months ended September 30, 2022.
Previous report
Bonum, LLC is a telehealth company that provides services to its subscribers. We derive our revenues from subscription-based services through our mobile application on a business-to-business or business-to-customer models. Business-to-business – Organizations contract with Bonum to provide tele-health services to their members on a per-member basis. Organizations are invoiced by Bonum, and revenue is recognized as services are provided each month. Bonum also generates revenues through business-to-customer relationships, where customers can download and subscribe to the Bonum mobile application on their digital device. Subscriptions can be monthly, annual or per encounter. Revenue is recognized as it is earned. Deferred revenue is recorded for unearned subscriptions income and recognized in the financial statements in the period earned.
Reworded paragraphs (20)
Previous wording
The Company changed its name on June 1, 2021, from “Trxade Group, Inc” to “TRxADE HEALTH, INC.”. TRxADE HEALTH, INC. owns 100% of Trxade, Inc., Integra Pharma Solutions, LLC (formerly Pinnacle Tek, Inc.), Alliance Pharma Solutions, LLC, Community Specialty Pharmacy, LLC, Bonum Health, LLC, Superlatus, Inc. and The Urgent Company, Inc. Trxade, Inc. is a web-based market platform that enables commerce among healthcare buyers and sellers of pharmaceuticals, accessories and services.
Current wording
The Company owns, as of March 31, 2024, 100% of Trxade, Inc., Integra Pharma Solutions, LLC Bonum Health, Inc., and Bonum Health, LLC. During the year ended December 31, 2023 and a portion of the quarter ended March 31, 2024, Trxade, Inc., operated a web-based market platform that enables commerce among healthcare buyers and sellers of pharmaceuticals, accessories and services.
Previous wording
Integra Pharma Solutions, LLC (“Trxade Prime”) is a licensed wholesaler of brand, generic and non-drug products to customers. Trxade Prime takes orders for products, creates invoices for each order and recognizes revenue at the time the customer receives the product. We utilize “just in time” inventory and drop ship partnerships to ship orders to customers. The focus of Trxade Prime is to be the pharmaceutical supplier of choice for healthcare organizations of all sizes. Our expertise in the distribution of products extends to all healthcare markets including government organizations, hospitals, clinics, and independent pharmacies nationwide.
Current wording
Integra Pharma Solutions, LLC (“IPS” d.b.a. Trxade Prime), is a licensed pharmaceutical wholesaler and sells brand, generic and non-drug products to customers. IPS customers include all healthcare markets including government organizations, hospitals, clinics and independent pharmacies nationwide.
Previous wording
On January 20, 2023, the Company entered into Membership Interest Purchase Agreements to sell 100% of the outstanding membership interests of Alliance Pharma Solutions, LLC and Community Specialty Pharmacy, LLC. The transactions closed on August 22, 2023.
Current wording
On January 20, 2023, the Company entered into Membership Interest Purchase Agreements to sell 100% of the outstanding membership interests of the Company’s former subsidiaries, Community Specialty Pharmacy, LLC (“CSP”) and Alliance Pharma Solutions, LLC (“APS” d.b.a DelivMeds). The Company will receive consideration in the amount of $125,000 for APS and $100,000 for CSP. The Company also agreed to enter into a Master Service Agreement to operate the businesses prior to closing. Additional amounts owed to the Company as a result of this Master Service Agreement totaled $1,075,000 as of the closing date of August 22, 2023 (see Note 3 and Note 7).
Previous wording
On February 15, 2022, the Company entered into a relationship with Exchange Health, LLC, a technology company providing an online platform for manufacturers and suppliers to sell and purchase pharmaceuticals (“Exchange Health”). SOSRx LLC, the created entity relating to the relationship, a Delaware limited liability company, was formed in February 2022, and was owned 51% by the Company and 49% by Exchange Health (“SOSRx”).
Current wording
SOSRx, LLC (“SOSRx”) was formed on February 15, 2022. The Company entered into a relationship with Exchange Health, LLC (“Exchange Health”), a technology company providing an online platform for manufacturers and suppliers to sell and purchase pharmaceuticals. SOSRx, a Delaware limited liability company, was formed, which was owned 51% by the Company and 49% by Exchange Health. SOSRx did not generate material revenue and in February of 2023, the Company voluntarily withdrew from the joint venture agreement. As part of the voluntary withdrawal the Company has recorded a loss of $352,244 from disposal of assets, which is included in net loss on discontinued operations in the audited consolidated statement of operations in the amount of for the year ended December 31, 2023.
Previous wording
On July 31, 2023, the Company merged with Superlatus, Inc. (see above), a U.S.-based holding company of food products and distribution capabilities. With its subsidiary, Sapientia, Inc. (“Sapientia”), a food tech business, Superlatus is adiversified food technology company with distribution capabilities and systems to optimize food security and population health via innovative Consumer Packaged Goods (“CPG”) products, agritech, foodtech, plant-based proteins and alt-proteins. Superlatus provides industry-leading processing and forming technologies that create high nutrition, high taste, and textured foods.
Current wording
Superlatus is a diversified food technology company with distribution capabilities and systems to optimize food security and population health via innovative Consumer Packaged Goods (“CPG”) products, agritech, foodtech, plant-based proteins and alt-protein and includes wholly-owned subsidiary, Sapientia, Inc. (“Sapientia”), a food tech business.
Previous wording
On July 31, 2023 (the “Closing Date”), the Company completed its acquisition of Superlatus in accordance with the terms and conditions of the Merger Agreement (the “Merger”), pursuant to which the Company acquired Superlatus by way of a merger of the Merge Sub with and into Superlatus, with Superlatus being a wholly owned subsidiary of the Company and the surviving entity in the Merger.
Current wording
On July 31, 2023 , the Company completed its acquisition of Superlatus in accordance with the terms and conditions of the Merger Agreement (the “Merger”), pursuant to which the Company acquired Superlatus by way of a merger of the Merger Sub with and into Superlatus, with Superlatus being a wholly owned subsidiary of the Company and the surviving entity in the Merger.
Previous wording
Under the terms of the Merger Agreement, at the closing of the Merger (the “Closing”), shareholders of Superlatus received in aggregate 136,441 shares of common stock of the Company, representing 19.9% of the total issued and outstanding common stock of the Company after the consummation of the Merger and 306,855 shares of Company’s Series B Preferred Stock, par value $0.00001 per share (the “Series B Preferred Stock”), with a conversion ratio of 100 to one. Upon consummation of the Merger, the Company will continue to trade under the current ticker symbol “MEDS.”
Current wording
Under the terms of the Merger Agreement, at the closing of the Merger (the “Closing”), shareholders of Superlatus received in aggregate 136,441 shares of common stock of the Company, representing 19.99% of the then total issued and outstanding common stock of the Company after the consummation of the Merger and 306,855 shares of Company’s Series B Preferred Stock, par value $0.00001 per share (the “Series B Preferred Stock”), with a conversion ratio of 100 shares of Series B Preferred Stock to one share of common stock. At Closing, the value of the common stock was $7.30 per share, resulting in a total value of $225,000,169. Upon consummation of the Merger, the Company continued to trade under the current ticker symbol “MEDS.”
Previous wording
Cash was $34,031 as of September 30, 2023, compared to $1,094,891 as of December 31, 2022. The decrease in cash was mainly due to the increased operating expenses as a result of the Merger and the TUC acquisition, partially offset by cash generated from increased revenues. We expect that our future available capital resources will consist primarily of cash generated from operations, remaining cash balances, borrowings, and additional funds raised through sales of debt and/or equity securities.
Current wording
Cash was $3,498,812 as of March 31, 2024, compared to $361 as of December 31, 2023. The increase in cash was mainly due to the proceeds from disposition of assets and liabilities of Trxade, Inc. We expect that our future available capital resources will consist primarily of cash generated from operations, remaining cash balances, borrowings, and additional funds raised through sales of debt and/or equity securities.
Previous wording
Our primary objectives for the remainder of 2023 are to take steps in an effort to increase our client base and operational revenue on our Trxade Inc. and Trxade Prime platforms, and to complete potential strategic transactions of our business-to-consumer subsidiaries, which may include a potential sale, spin-off, fund raising, combination or other strategic transaction, and also include the winding down of such entities. There can be no assurance that our operations will generate significant positive cash flow, or that additional funds will be available to us, through borrowings or otherwise, on favorable terms if required in the future, or at all. We may also raise additional funding in the future through the sale of equity.
Current wording
Our primary objectives for the remainder of 2024 are continue development and operational expansions on our Trxade Prime platforms, and to complete potential strategic transactions of our business-to-consumer subsidiaries, which may include a potential sale, spin-off, fund raising, combination or other strategic transaction, and also include the winding down of such entities. There can be no assurance that our operations will generate significant positive cash flow, or that additional funds will be available to us, through borrowings or otherwise, on favorable terms if required in the future, or at all. We may also raise additional funding in the future through the sale of equity.
Previous wording
We will still require additional funding in the future to support our operations.
Current wording
We may require additional funding in the future to expand or complete acquisitions. The sources of this capital are expected to be equity investments and notes payable. Our plan for the next twelve months is to continue using the same marketing and management strategies to promote our Integra Pharma Solutions assets and operations, exploring strategic transactions involving our corporate assets, while also seeking to expand our operations organically or through acquisitions, as funding and opportunities arise. As our business continues to grow, customer feedback will be integral in making small adjustments to improve our products and overall customer experience. In the event we require additional funding, we plan to raise that through the sale of debt or equity, which may not be available on favorable terms, if at all, and may, if sold, cause significant dilution to existing stockholders. If we are unable to access additional capital moving forward, it may hurt our ability to grow and to generate future revenues.
Previous wording
Cash used in operations for the nine months ended September 30, 2023, was $(1,206,077), compared to cash used in operations for the nine months ended September 30, 2022, of $(2,755,979). The decrease in cash used in operations for the nine months ended September 30, 2023, compared to September 30, 2022, was mainly due to increased professional fees and accounting and legal expense for the comparable periods as a result of the Merger and the purchase of TUC, partially offset by decreased wage and salary expense due to the departure of two members of management during the nine months ended September 30, 2023.
Current wording
Cash used in operations for the three months ended March 31, 2024, was $(10,189,673), compared to cash used in operations for the three months ended March 31, 2023, of $(931,531). The increase in cash used in operations for the three months ended March 31, 2024, compared to March 31, 2023, was mainly due to shares issued for services at fair value of $4,450,919 and increased professional fees and technology expense.
Previous wording
Cash provided by investing activities for the nine months ended September 30, 2023, was $74,283 and cash used in investing activities was $(312,902) for the nine months ended September 30, 2022. The decrease in cash provided by investing activities is related to the discontinuation of SOSRx.
Current wording
Cash provided by investing activities for the three months ended March 31, 2024, was $27,432,589 and cash provided by investing activities was $333,197 for the three months ended March 31, 2023. The increase in cash provided by investing activities is related to the disposition of Trxade, Inc. and Superlatus, Inc., partially offset by investment in securities of $2,500,000.
Previous wording
Cash provided by financing activities for the nine months ended September 30, 2023, was $70,934 compared to cash provided by financing activities for the nine months ended September 30, 2022, which was $268,018. The decrease was mainly due to a decrease in the net balance of the contingent funding liability.
Current wording
Cash used in financing activities for the three months ended March 31, 2024, was $(13,896,011) compared to cash provided by financing activities for the three months ended March 31, 2023, which was $681,257. The decrease was mainly due to repayment of the net balance of the contingent funding liability of $1,246,346 and payment of dividends of $12,671,072.
Previous wording
For the three-month period ended September 30, 2023, cost of goods sold and gross profit were $353,450 and $1,704,578 respectively, and $683,375 and $1,372,428, respectively for the same period in 2022. Gross profit as a percentage of sales was 83% for the three months ended September 30, 2023, compared to 67% for the three months ended September 30, 2022.
Current wording
For the three-month period ended March 31, 2024, cost of goods sold and gross profit were $0, and $420,097 and $73,219, respectively for the same period in 2023. Gross profit as a percentage of sales was 0% for the three months ended March 31, 2024, compared to 14.84% for the three months ended March 31, 2023.
Previous wording
We had interest expense, net, of $251,778 for the three months ended September 30, 2023, compared to interest expense, net, of $121,711 for the three months ended September 30, 2022. The increase is due to the increase balance of the accounts receivable advances as a result of advances taken in 2023 and 2022.
Current wording
We had interest expense, net, of $98,515 for the three months ended March 31, 2024, compared to interest expense, net, of $62,392 for the three months ended March 31, 2023. The increase is due to the higher balance of the accounts receivable advances as a result of advances taken in 2024 and 2023.
Previous wording
We recognized a gain on the change in the fair value of the warrant liability of $925,320 for the three months ended September 30, 2023. As the warrants were issued in October 2022, no gain or loss was recognized during the three months ended September 30, 2022.
Current wording
We recognized a loss on the change in the fair value of the warrant liability of $729,889 for the three months ended March 31, 2024, compared to a gain of $79,891 during the three months ended March 31, 2023.
Previous wording
During the three months ended September 30, 2023, the Company generated a net loss from operations of $171,607 compared to a net loss from operations of $340,474 for the three months ended September 30, 2023. The increase in net loss is mainly driven by the increased operating costs as a result of the Merger, partially offset by an increase in gross profit.
Current wording
During the three months ended March 31, 2024, the Company generated a net loss from continuing operations of $6,636,922 compared to a net loss from continuing operations of $1,136,637 for the three months ended March 31, 2023. The increase in net loss is mainly driven bystock compensation in 2024.
Previous wording
Net loss from discontinued operations increased $3,165,239 to a net loss of $3,353,507 for the three months ended September 30, 2023, compared to a net loss from discontinued operations of $188,268 for the three months ended September 30, 2022. The increase was due to the disposal of APS and CSP during the three months ended September 30, 2023.
Current wording
Net profit from discontinued operations increased by $27,424,271 to a net income of $27,882,955 for the three months ended March 31, 2024, compared to a net income from discontinued operations of $458,684 for the three months ended March 31, 2023. The increase was due to the disposal of Trxade, Inc., partially offset by loss on disposal of Superlatus, Inc. during the three months ended March 31, 2024.
Previous wording
Trxade, Inc. provides an online web-based buying and selling platform for licensed pharmaceutical wholesalers (“Suppliers”) to sell products and services to licensed pharmacies (“Customers”). Trxade, Inc. charges Suppliers a transaction fee, a percentage of the purchase price of the prescription drugs and other products sold through its website service. Fulfillment of confirmed orders, including delivery and shipment of prescription drugs and other products, is the responsibility of the Supplier, not Trxade, Inc. Trxade, Inc. holds no inventory and assumes no responsibility for the shipment or delivery of any products or services from our website. Trxade, Inc. considers itself an agent for this revenue stream and as such, reports revenue as net. Step One: Identify the contract with the Customers – Trxade, Inc.’s Terms and Use “Agreement,” which outlines the terms and conditions between Trxade, Inc. and the Supplier, is acknowledged and agreed to by the Supplier. Collection is probable based on a credit evaluation of the Supplier. Step Two: Identify the performance obligations in the Agreement – Trxade, Inc. provides the Supplier access to the online website, ability to upload catalogs of products and Dashboard access to review status of inventory as well as posted and processed orders. The Agreement requires the Supplier to post a catalog of pharmaceuticals on the platform, deliver the pharmaceuticals and, upon shipment, remit the stated platform fee. Step Three: Determine the transaction price – the Agreement outlines the fee, which is based on the type of product: generic, brand or non-drug. There are no discounts for volume transactions or early payment of invoices. Step Four: Allocate the transaction price – the Agreement details the fee. There is no difference between contract price and “stand-alone selling price”. Step Five: Recognize revenue when or as the entity satisfies a performance obligation – revenue is recognized upon Supplier’s fulfillment of the applicable order.
Current wording
Trxade, Inc. provided an online web-based buying and selling platform for licensed pharmaceutical wholesalers (“Suppliers”) to sell products and services to licensed pharmacies (“Customers”). Trxade, Inc. charged Suppliers a transaction fee, a percentage of the purchase price of the prescription drugs and other products sold through its website service. Fulfillment of confirmed orders, including delivery and shipment of prescription drugs and other products, was the responsibility of the Supplier, not Trxade, Inc. Trxade, Inc. holds no inventory and assumed no responsibility for the shipment or delivery of any products or services from our website. Trxade, Inc. considered itself an agent for this revenue stream and as such, reported revenue as net. Step One: Identify the contract with the Customers – Trxade, Inc.’s Terms and Use “Agreement,” which outlined the terms and conditions between Trxade, Inc. and the Supplier, was acknowledged and agreed to by the Supplier. Collection was probable based on a credit evaluation of the Supplier. Step Two: Identify the performance obligations in the Agreement – Trxade, Inc. provides the Supplier access to the online website, ability to upload catalogs of products and Dashboard access to review status of inventory as well as posted and processed orders. The Agreement required the Supplier to post a catalog of pharmaceuticals on the platform, deliver the pharmaceuticals and, upon shipment, remit the stated platform fee. Step Three: Determine the transaction price – the Agreement outlined the fee, which is based on the type of product: generic, brand or non-drug. There were no discounts for volume transactions or early payment of invoices. Step Four: Allocate the transaction price – the Agreement detailed the fee. There was no difference between contract price and “stand-alone selling price”. Step Five: Recognize revenue when or as the entity satisfies a performance obligation – revenue was recognized upon Supplier’s fulfillment of the applicable order. In February 2024, we sold substantially all of the assets and liabilities of Trxade, Inc. to MMS.
Previous wording
Integra Pharma Solutions, LLC (“Trxade Prime”) is a licensed wholesaler of brand, generic and non-drug products to Customers. Integra LLC takes orders for products, creates invoices for each order and recognizes revenue at the time the Customer receives the product. Customer returns are not material. Step One: Identify the contract with the Customer – Integra LLC requires that an application and a credit card for payment be completed by the Customer prior to the first order. Each transaction is evidenced by an order form sent by the Customer and an invoice for the product is sent by Integra LLC. The collection is probable based on the application and credit card information provided prior to the first order. Step Two: Identify the performance obligations in the contract – Each order is distinct and evidenced by the shipping order and invoice. Step Three: Determine the transaction price – The consideration is variable if product is returned. The variability is determined based on the return policy of the product manufacturer. There are no sales or volume discounts. The transaction price is determined at the time of the order evidenced by the invoice. Step Four: Allocate the transaction price – There is no difference between contract price and “stand-alone selling price”. Step Five: Recognize revenue when or as the entity satisfies a performance obligation – The Revenue is recognized when the Customer receives the product.
Current wording
Integra Pharma Solutions, LLC (“IPS”) is a licensed wholesaler of brand, generic and non-drug products to Customers. IPS takes orders for products, creates invoices for each order and recognizes revenue at the time the Customer receives the product. Customer returns are not material. Step One: Identify the contract with the Customer – IPS requires that an application and a credit card for payment be completed by the Customer prior to the first order. Each transaction is evidenced by an order form sent by the Customer and an invoice for the product is sent by IPS. The collection is probable based on the application and credit card information provided prior to the first order. Step Two: Identify the performance obligations in the contract – Each order is distinct and evidenced by the shipping order and invoice. Step Three: Determine the transaction price – The consideration is variable if product is returned. The variability is determined based on the return policy of the product manufacturer. There are no sales or volume discounts. The transaction price is determined at the time of the order evidenced by the invoice. Step Four: Allocate the transaction price – There is no difference between contract price and “stand-alone selling price”. Step Five: Recognize revenue when or as the entity satisfies a performance obligation – The Revenue is recognized when the Customer receives the product.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Nine Month Period Ended September 30, 2023, compared to Three Month Period Ended September 30, 2022