Scienture Holdings, Inc.
For the period ended Dec 31, 2024. Filed Mar 26, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 26, 2025
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-K
Period ended 2023-12-31; filed 2024-04-22.
0001493152-24-015595
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-26.
0001641172-25-000657
Item 7. 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 80 previous paragraphs and 72 current paragraphs.
10 unchanged; 17 reworded; 45 added; 52 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 7 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 (45)
Current report
Summary of The Information Contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report
Company Overview
Current report
On September 20, 2024, the Company filed with the Secretary of State of the State of Delaware an amendment to its Second Amended and Restated Certificate of Incorporation to change the legal name of the Company from “TRxADE HEALTH, Inc.” to “Scienture Holdings, Inc.”
Current report
The Company owned, as of December 31, 2024, 100% of Softell Inc. (f/k/a Trxade Inc.), Integra Pharma Solutions, LLC and Scienture, LLC (f/k/a Scienture, Inc.).
Current report
On October 4, 2024, the Company and Softell entered into IPS Assignment Agreement, pursuant to which the Company transferred, and Softell accepted, 100% of the membership interests of IPS. As a result, IPS is now a wholly-owned subsidiary of Softell. During the year ended December 31, 2023 and a portion of the quarter ended March 31, 2024, Softell, operated a web-based market platform that enabled commerce among healthcare buyers and sellers of pharmaceuticals, accessories and services. Softell’s current primary operations are conducted through IPS. IPS 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.
Current report
Bonum Health, LLC 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
The Company is in the process of determining a divestment and winddown plan for Softell and IPS. On January 25, 2025, the Company’s Board of Directors approved the preparation of a divestment and winddown plan for the winddown of each of Softell, IPS, Bonum Health, Inc., and Bonum.
Current report
Scienture LLC is a New York based branded, specialty pharmaceutical research company which is engaged in the research and development of branded pharmaceutical products. The intellectual property application process was initiated in November 2019 and the product development activities commenced in January 2020. Scienture LLC also plans to foray into commercialization of innovative and branded pharmaceutical products in the US market. Scienture LLC’s assets in development are across therapeutics areas and indications and cater to different market segments. Scienture LLC’s mission is to identify, develop and bring to market innovative technology-based products to address unmet medical needs. Its targeted portfolio consists of short term and long-term opportunities with efficient development, regulatory, and go to market strategies.
Current report
See ITEM 1 of PART 1
Current report
Dispositions
Current report
See ITEM 1 of PART 1
Current report
Recent Events
Current report
On September 20, 2024, the Company filed with the Secretary of State of the State of Delaware an amendment to its Second Amended and Restated Certificate of Incorporation to change the legal name of the Company from “TRxADE HEALTH, Inc.” to “Scienture Holdings, Inc.” (the “Name Change”). Other than the Name Change, there were no changes to the Company’s certificate of incorporation or bylaws.
Current report
Effective September 23, 2024, the Company’s common stock trades under the ticker symbol “SCNX”. The Name Change resulted in a change to the CUSIP number for the Company’s outstanding shares of common stock offered on the Nasdaq Stock Market LLC.
Current report
(1) Includes estimated wages and payroll, legal and accounting, marketing, rent and research and development.
Current report
Going Concern
Current report
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued. In accordance with Financial Accounting Standards Board, or the FASB, Accounting Standards Update No. 2014-15,*Presentation of Financial Statements - Going Concern (Subtopic 205-40),*our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.
Current report
As of December 31, 2024, the Company had an accumulated deficit of $39,038,973 and $308,096 in cash.
Current report
Cash used in operating activities for the year ended December 31, 2024, was $14,265,238 compared to $2,225,192 in 2023. The increase in cash used in operations for the year ended December 31, 2024 was mainly due to our net loss and cash used in operating assets and liabilities in 2024 driven by other receivables, partially offset by non-cash charges.
Current report
Cash provided by investing activities for the year ended December 31, 2024, was $27,552,791 and cash used in investing activities was $275,717 for the year ended December 31, 2023. The increase in cash provided by investing activities in 2024 was primarily due to the MMS disposition in the first quarter and cash received in acquisition of Scienture, Inc., partially offset by the investment in securities of $2,500,000.
Current report
Year Ended December 31, 2024, compared to Year Ended December 31, 2023
Current report
There were $136,643 in revenues for the year ended December 31, 2024. Revenues decreased by $1,227,187, compared to the same period ended December 31, 2023 primarily because of the disposition of the assets and operations of Softell completed in February 2024 which resulted in the Company having fewer revenue generating operations when compared to the comparable period in 2023.
Current report
For the year ended December 31, 2024, cost of goods sold and gross profit were $130,638 and $6,005, and $1,314,800 and $49,031, all respectively for the same period in 2023. Cost of goods sold decreased by $1,184,162, compared to the same period ended December 31, 2023 primarily because of the disposition of the assets and operations of Softell completed in February 2024 which resulted in the Company having fewer cost of goods sold. Gross profit as a percentage of sales was 4.39% for the year ended December 31, 2024, compared to 3.60% for the year ended December 31, 2023.
Current report
Wages and salary expense increased by $1,484,520 for the year ended December 31, 2024 to $2,111,067 compared to $626,547 for the comparable period in 2023. The increase is primarily due to an increase in salary of the COO and CEO of IPS, as well as the increased personnel as a result of the Scienture Merger in July 2024, as compared to the same period in 2023.
Current report
Professional fees increased by $583,196 to $1,458,332 compared to $875,136 for the comparable period in 2023. The increase was primarily due to increase in Board members’ fees and consulting expense and post- acquisition professional fees of Scienture LLC.
Current report
Accounting and legal expenses increased by $162,836 for the year ended December 31, 2024 to $1,669,717 compared to $1,506,881 for the comparable period in 2023. The increase is primarily due to increase in amount of legal services during the year ended December 31, 2024 as compared to the same period in 2023.
Current report
General and administrative expenses (including stock-based compensation expense) increased by $5,369,446 for the year ended December 31, 2024, to $6,706,082 compared to $1,336,637 for the comparable period in 2023. The increase was mainly due to shares issued for services at fair value of $4,598,294 in 2024.
Current report
Technology expense increased by $316,031 for the year ended December 31, 2024 to $416,311 compared to $100,280 for the comparable period in 2023. The increase was mainly due to increased software expense and software support expense.
Current report
Research and development expense pertaining to Scienture LLC’s operations post-acquisition was $2,236,690 for the year ended December 31, 2024. Research and development expenses was mainly due to contract research organization costs of Scienture LLC. Total expenses by program were as follows:
Current report
We had interest expense of $1,335,631 for the year ended December 31, 2024, compared to interest expense of $1,143,223 for the year ended December 31, 2023. The increase is due to the interest expense on Scienture LLC’s convertible debt, the convertible notes issued in August and 2024, and related debt discount amortization on these notes, partially offset by the Superlatus notes no longer being outstanding after its disposition in early 2024.
Current report
We recognized a loss on the change in the fair value of the derivative liability of $180,383 for the year ended December 31, 2024, based on the underlying valuation inputs and the conversion features of the Arena convertible debenture.
Current report
We recognized impairment loss of $2,500,000 of the investment in equity securities for the year ended December 31, 2024.
Current report
During the year ended December 31, 2024, the Company incurred a net loss from continuing operations of $18,244,480 compared to $8,482,864 for the year ended December 31, 2023. The change was due to change in operating income, other income (expense), and provision for income taxes.
Current report
Cash
Current report
The increase in cash as of December 31, 2024 compared to 2023 was primarily due to the proceeds received in February 2024 and May 2024 resulting from the disposition of assets to MMS as described above, as well as the convertible note issued in August 2024 and convertible debentures issued in November 2024.
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 certain assets.
Current report
On July 9, 2024, the Company announced the declaration of a special cash dividend of one dollar and fifty cents ($1.50) per share of common stock, payable to stockholders of record as of July 19, 2024, with the dividend being paid on July 22, 2024. The special dividend was $2,187,759 paid using a portion of the proceeds received in May 2024 in connection with the February 2024 sale of certain assets.
Current report
Critical Accounting Policies
Current report
Revenue Recognition
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Removed paragraphs (52)
Previous report
Plan of Operations
Previous report
We had a working capital deficit of $8,803,293 as of December 31, 2023, compared to working capital deficit of $53,668 as of December 31, 2022. The decrease in working capital of $8,749,625 is related to decreases in cash and increases in liabilities. Below are reasons for the decrease in working capital.
Previous report
Sources of Revenue
Previous report
During 2023 we had four main revenue streams:
Previous report
(1) Trxade, Inc., our wholly-owned subsidiary, provides an online web-based buying and selling platform for licensed pharmaceutical wholesalers (“Suppliers”) to sell products and services to licensed pharmacies (“Customers”). The Company charges Suppliers a transaction fee, a percentage of the purchase price of the prescription drugs and other products sold through its website service. The Company holds no inventory and assumes no responsibility for the shipment or delivery of any products or services from our website. The Company considers itself an agent for this revenue stream and as such, reports revenue as net. Subsequent to December 31, 2023, we divested substantially all of our assets previously owned and operated by Trxade, Inc.
Previous report
(3) Community Specialty Pharmacy, LLC, our wholly-owned subsidiary, is a licensed retail pharmacy. The Company fills prescriptions for drugs written by a doctor and recognizes revenue at the time the patient confirms delivery of the prescription. Customer returns, to date, have not been material. In August 2023 we sold our entire interest in Community Specialty Pharmacy, LLC.
Previous report
For the Year Ended December 31, 2023, compared to the Year Ended December 31, 2022
Previous report
Operations
Previous report
Our revenues during the years ended December 31, 2023, and 2022 were mainly from the Trxade Inc. platform, Integra Pharma Solutions, and The Urgent Company. Revenues decreased $1,977,954 for fiscal year 2023, compared to the prior year’s revenue of $10,250,168. Trxade, Inc., revenue increased by $852,933 or 16% to $6,200,334, compared to $5,347,401, for the years ended December 31, 2023, and 2022, which is attributable to a 16% increase in sales volume on the platform in 2023. Integra Pharma Solutions’ revenue decreased by $3,390,237, or 71%, which is attributable to decreased sales volume and pricing changes. The Trxade, Inc. platform is a secondary marketplace for pharmaceuticals and medical supplies with consistent growth year over year.
Previous report
Cost of sales was $5,673,957 and gross profit was $2,598,257, for the year ended December 31, 2023, compared to $4,730,897 and $5,519,271, respectively, for the year ended December 31, 2022. The increase in cost of sales is attributed to the inventory costs and inventory write-downs associated with The Urgent Company.
Previous report
Gross profit as a percentage of sales was 31.4% for the year ended December 31, 2023, compared to 53.8% for the year ended December 31, 2022. The reason for the decrease in gross profit as a percentage of sales was a result of increased inventory and cost of sales associated with The Urgent Company.
Previous report
Technology, research and development expenditures increased to $1,376,908 for the year ended December 31, 2023, compared to $993,185 for the year ended December 31, 2022, as the Company continued to develop apps for customers and make improvements to our platform technology.
Previous report
Professional fees increased for the year ended December 31, 2023 by $999,832 to $1,466,567 compared to $466,735 for the year ended December 31, 2022. The increase in professional fees for the year ended December 31, 2023 related to the merger with Superlatus and purchase of The Urgent Company.
Previous report
General and administrative expenses (less stock-based compensation expense) increased for the year ended December 31, 2023 to $2,498,123 compared to $1,355,946 for the year ended December 31, 2022. The increase is largely driven by amortization expense related to intangible assets acquired through the Sapientia Technologies acquisition.
Previous report
Total stock-based compensation expense decreased by 13.7% or $45,774 to $287,510 from $333,284 for the year ended December 31, 2023, compared to the prior year’s period. The decrease was due to less common stock issued for services during the year ended December 31, 2023 compared to the year ended December 31, 2022.
Previous report
The Company recognized a loss on inventory investment of $875,520 for the year ended December 31, 2022, in connection with COVID-19 test kits that were purchased and could not be resold due to issues with the FDA.
Previous report
The Company had interest expense, net, of $1,194,148 for the year ended December 31, 2023, compared to interest expense of $315,217 for the year ended December 31, 2022. The increased interest expense is driven by the increases in the contingent funding liability due to additional accounts receivable advances during the year ended December 31, 2023.
Previous report
The Company recognized a goodwill impairment loss of $5,129,115 for the year ended December 31, 2023. The goodwill resulted from the acquisition of Superlatus and was subsequently determined to be impaired based on the facts and circumstances surrounding the sale of Superlatus on March 5, 2024.
Previous report
Net loss from operations increased $11,317,104 to a net loss of $13,720,546 for the year ended December 31, 2023, compared to a net loss of $2,403,442 for the year ended December 31, 2022. The increase in net loss is mainly due to the write-down of inventory due to spoilage, increases in spending related to the merger transaction with Superlatus and purchase of TUC and goodwill impairment charges.
Previous report
Cash and Cash Equivalents
Previous report
Cash decreased by $942,986 and other current assets increased by $1,602,925. The decrease in cash was primarily due to interest expense associated with the sale of future receivables and net repayments of debt as well as the professional fees and accounting and legal expenses associated with the merger with Superlatus and the acquisition of The Urgent Company. The increase in other current assets was primarily due to a note receivable and other receivables from the sale of APS and CSP.
Previous report
Current liabilities (excluding short term debt) increased by $3,046,231 from $1,980,124 to $5,026,355 for the year ended December 31, 2023. The increase is primarily due to an increase in accounts payable and contingent funding liabilities from the sale of future receivables.
Previous 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.
Previous report
Cash used in operations for the fiscal year ended December 31, 2023 was $2,073,601. This compared to $1,564,668 of cash used in operating activities for the fiscal year ended December 31, 2022. The increase in cash used in operations was mainly due to increased professional fees and accounting and legal expense for the comparable period as a result of the merger with Superlatus and the purchase of The Urgent Company, partially offset by decreased wages and salary expense due to the departure of two members of management during 2023.
Previous report
Cash used in investing activities for the year ended December 31, 2023 was $275,717. This compared to $427,845 of cash used in investing activities for the year ended December 31, 2022. In 2023, the net cash used mainly related to net cash exchanged in acquisition and disposals. During the year ended December 31, 2022, the cash was used for an investment in capitalized software for Delivmeds.
Previous report
Known Contractual and Other Obligations & Commitments
Previous report
In addition to our long-term debt obligations to our various lenders, we have certain other known contractual working capital obligations, including contractual purchase obligations related to various supply contracts, lease obligations, and other liabilities.
Previous report
We had no outstanding off-balance sheet arrangements as of December 31, 2023.
Previous report
Critical Accounting Policies and Estimates
Previous report
Allowance for Doubtful Accounts
Previous report
We provide short-term credit and other customer financing arrangements to customers who purchase our products. We estimate the receivables for which we do not expect full collection based on historical collection rates and specific knowledge regarding the current creditworthiness of our customers and record an allowance in our consolidated financial statements for these amounts.
Previous report
We consider historical experience, the current economic environment, customer credit ratings or bankruptcies, and reasonable and supportable forecasts to develop its allowance for doubtful accounts. Management reviews these factors quarterly to determine if any adjustments are needed to the allowance.
Previous report
Reserve methodologies are assessed annually based on historical losses and economic, business and market trends. In addition, reserves are reviewed quarterly and updated if unusual circumstances or trends are present. We believe the reserves maintained and expenses recorded during the year ended December 31, 2023 are appropriate and consistent in the context of historical methodologies employed, as well as assessment of trends currently available.
Previous report
Inventory Costs
Previous report
In determining whether an inventory valuation allowance is required, we consider various factors including estimated quantities of slow-moving inventory by reviewing on-hand quantities, outstanding purchase obligations and forecasted sales. Shifts in market trends and conditions, changes in customer preferences due to the introduction of generic drugs or new pharmaceutical products or the loss of one or more significant customers are factors that could affect the value of our inventories. We write down inventories which are considered excess and obsolete as a result of these reviews. These factors could make our estimate of inventory valuation differ from actual results.
Previous report
Business Combinations
Previous report
We account for business combinations using the acquisition method of accounting whereby the identifiable assets and liabilities of the acquired business, as well as any noncontrolling interest in the acquired business, are recorded at their estimated fair value as the date that we obtain control of the acquired business. Any purchase consideration in excess of the fair values of the net assets acquired is recorded as goodwill. Acquisition-related expenses and related restructuring costs are expensed as incurred.
Previous report
Several valuation methods may be used to determine the fair value of the assets acquired and liabilities assumed. For intangible assets, we typically use a method that is a form of variation of the income approach, whereby a forecast of future cash flows attributable to the asset are discounted to present value using a risk-adjusted discount rate. Some of the more significant estimates and assumptions inherent in the income approach include the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash flows and the assessment of the asset’s expected useful life.
Previous report
Goodwill
Previous report
We perform an impairment test on goodwill balances annually in the third quarter and more frequently if indicators for potential impairment exist. Indicators that are considered include significant declines in performance relative to expected operating results, significant changes in the use of the assets, significant negative industry or economic trends, or a significant decline in the Company’s stock price and/or market capitalization for a sustained period of time.
Showing the first 40 of 52 passages. Open the source sections for the rest.
Reworded paragraphs (17)
Previous wording
The following discussion of the Company’s historical performance and financial condition should be read together with the consolidated financial statements and related notes in “Item 8. Financial Statements and Supplemental Data” of this Report. This discussion contains forward-looking statements based on the views and beliefs of our management, as well as assumptions and estimates made by our management. See “Cautionary Statement Regarding Forward-Looking Information” above. These statements by their nature are subject to risks and uncertainties and are influenced by various factors. As a consequence, actual results may differ materially from those in the forward-looking statements. See “Item 1A. Risk Factors” of this report for the discussion of risk factors. For all periods presented, the consolidated statements of income and consolidated balance sheet data have been adjusted for the reclassification of discontinued operations information, unless otherwise noted. All references to years relate to the calendar year ended December 31 of the particular year.
Current wording
The following discussion of the Company’s historical performance and financial condition should be read together with the consolidated financial statements and related notes in the section entitled “Item 8. Financial Statements and Supplemental Data” of this Annual Report. This discussion contains forward-looking statements based on the views and beliefs of our management, as well as assumptions and estimates made by our management. See the section entitled “Cautionary Statement Regarding Forward-Looking Information” above. These statements by their nature are subject to risks and uncertainties and are influenced by various factors. As a consequence, actual results may differ materially from those in the forward-looking statements. See “Item 1A. Risk Factors” of this Annual Report for the discussion of risk factors. For all periods presented, the consolidated statements of income and consolidated balance sheet data have been adjusted for the reclassification of discontinued operations information, unless otherwise noted. All references to years relate to the calendar year ended December 31 of the particular year.
Previous wording
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:
Current wording
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:
Previous wording
Our primary objectives for 2024 are to continue the development and operational expansion of Integra Pharma Solutions and to explore strategic transactions, relationships or acquisitions to grow or operations whether in our legacy industry or outside of that general industry. 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.
Current wording
Our primary objectives for the year of 2025 are expected to be the continued implementation of the Scienture LLC business plan, 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 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.
Current wording
We may require additional funding in the future to implement on our business plan and potentially 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 IPS assets and operations, exploring strategic transactions involving our corporate assets, while also seeking to expand our and Scienture LLC operations organically or through acquisitions, as funding and opportunities arise. 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
With our current cash on hand, expected revenues, and based on our current average monthly expenses, we anticipate the need for additional funding in order to continue our operations at their current levels, and to pay the costs associated with being a public company, for the next 12 months. 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 development of the information technology used in the Company subsidiaries. As our business continues to grow, customer feedback will be integral in making small adjustments to improve the product and overall customer experience. We will require additional funding, we may seek 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.
Current wording
We will need to raise additional capital or secure debt funding to support on-going operations, and to fund the assets and operations of any businesses or assets we acquire. The sources of this capital are expected to be the sale of equity and debt, 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, our financial position, and liquidity. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Unless Management is able to obtain additional financing, it is unlikely that the Company will be able to meet its funding requirements during the next 12 months. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Previous wording
The following table summarizes our Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2023, and 2022:
Current wording
The following table summarizes our Consolidated Statements of Cash Flows for the following periods:
Previous wording
Cash provided by financing activities for the year ended December 31, 2023 was $1,406,332 and cash used in financing activities for the year ended December 31, 2022, was $35,171. The increase was mainly due to proceeds from the sale of future receivables.
Current wording
Cash provided by in financing activities for the year ended December 31, 2024, was ($14,979,770) compared to $1,406,332 of cash provided by financing activities for the year ended December 31, 2023. The change was primarily due to the payment of dividends of $14,858,831 in 2024. In August 2024, the Company received note proceeds of $314,000 and $2,640,000 in net proceeds from convertible debenture in November 2024.
Previous wording
The following selected consolidated financial data should be read in conjunction with the consolidated financial statements and the notes to these statements included in “Item 8. Financial Statements and Supplemental Data” of this Report. For all years presented, the consolidated statements of income and consolidated balance sheet data set forth in this Form 10-K have been adjusted for the reclassification of discontinued operations information, unless otherwise noted.
Current wording
The following selected consolidated financial data should be read in conjunction with the unaudited consolidated financial statements and the notes to these statements included above.
Previous wording
During the year ended December 31, 2023, the Company recognized a loss from the change in the fair value of warrants of $148,420. During the year ended December 31, 2022, the Company recognized a gain from the change in the fair value of warrants of $825,544.
Current wording
We recognized a loss on the change in the fair value of the warrant liability of $182,982 for the year ended December 31, 2024 compared to a loss of $148,420 during the year ended December 31, 2023, based on the underlying valuation inputs.
Previous wording
Net loss from discontinued operations increased $2,616,602 to a net loss of $4,123,028 for the year ended December 31, 2023, compared to a net loss from discontinued operations of $1,506,426 for the year ended December 31, 2022.
Current wording
Net income from discontinued operations increased by $36,670,988 to a net income of $27,310,278 for the year ended December 31, 2024, compared to a net loss from discontinued operations of $9,360,710 for the year ended December 31, 2023. The increase was primarily due to the disposal of Softell assets, partially offset by loss on disposal of Superlatus during the year ended December 31, 2024.
Previous wording
Cash and cash equivalents were $151,908 as of December 31, 2023. We expect that our future available capital resources will consist primarily of cash generated from operations, remaining cash balances, proceeds from potential asset divestitures or strategic transactions, borrowings, and any additional funds raised through sales of debt and/or equity.
Current wording
Cash was $308,096 as of December 31, 2024, compared to $314 as of December 31, 2023. The increase in cash was primarily due to the proceeds in February 2024 and May 2024 related to the disposition of certain assets to MMS as described above and convertible debentures issued in November 2024. 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 principal sources of liquidity during the years ended December 31, 2023 and 2022 have been cash provided by operations (internal source). During the year ended December 31, 2023, sales of future receivables provided a principal source of liquidity. During the year ended December 31, 2022, equity capital and borrowings under various debt arrangements (external source) and a stock placement deal of 920,000 shares. Our principal uses of cash have been for operating expenses and research and development of our newer business units. We anticipate these uses will continue to be our principal uses of cash in the future in addition to any necessary business acquisitions. We currently do not have any material unused sources of liquid assets.
Current wording
Our principal sources of liquidity have historically been cash provided by operations, sales of business assets and operations from time to time, sales of equity, and borrowings under various debt arrangements. Our principal uses of cash have been for operating expenses, technology development, and acquisitions. We anticipate these uses will continue to be our principal sources of, and uses of, cash in the future.
Previous wording
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses for each period. We consider an accounting estimate to be critical if the estimate requires us to make assumptions about matters that were uncertain at the time the accounting estimate was made and if different estimates that we reasonably could have used in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on our financial condition or results from operations. Below are the estimates that we believe are critical to the understanding of our operation results and financial condition. Other accounting policies are described in Financial NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. Because of the uncertainty inherent in such estimates, actual results may differ from these estimates.
Current wording
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of net sales and expenses for each period. The following represents a summary of our critical accounting policies, defined as those policies that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.
Previous wording
(2) Integra Pharma Solutions, LLC, our wholly-owned subsidiary, is a licensed wholesaler of brand, generic and non-drug products to Customers. The Company takes orders for products, creates invoices for each order and recognizes revenue at the time the Customer receives the product. Customer returns, to date, have not been material.
Current wording
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 product is shipped to the Customer. 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 product is shipped to the Customer.
Previous wording
(4) The Urgent Company, Inc., our wholly-owned subsidiary, is a retail and distribution provider of prepackaged, prepared foods. Subsequent to December 31, 2023, we divested our interest in The Urgent Company, LLC.
Current wording
The Urgent Company, Inc., which was a wholly-owned subsidiary, is a retail and distribution provider of prepackaged, prepared foods. Subsequent to December 31, 2023, we divested our interest in The Urgent Company, Inc.
Previous wording
We account for stock-based compensation to employees in accordance with ASC 718, “Compensation-Stock Compensation”. ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments, including stock options, based on the grant date fair value of the award and to recognize it as compensation expense over the period the employee is required to provide service in exchange for the award, usually the vesting period. Stock option forfeitures are recognized at the date of employee termination. Effective January 1, 2019, the Company adopted ASU 2018-07 for the accounting of share-based payments granted to non-employees for goods and services.
Current wording
The Company accounts for stock-based compensation to employees in accordance with ASC 718, “Compensation-Stock Compensation”. ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments, including stock options, based on the grant date fair value of the award and to recognize it as compensation expense over the period the employee is required to provide service in exchange for the award, usually the vesting period. Stock option forfeitures are recognized at the date of employee termination. Effective January 1, 2019, the Company adopted ASU 2018-07 for the accounting of share-based payments granted to non-employees for goods and services.
Previous wording
For more information on recently issued accounting standards, see “Note 2 - Summary of Significant Accounting Policies”*,*to the Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and Supplemental Data”.
Current wording
For more information on recently issued accounting standards, see “NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION”, to the Notes to Consolidated Financial Statements included herein under “PART I. - ITEM 1. FINANCIAL STATEMENTS”.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The following table summarizes our contractual obligations as of December 31, 2023: