Scienture Holdings, Inc 10-K for FY2023

Scienture Holdings, Inc. (SCNX)

10-K 2024-04-22 For: 2023-12-31

Added on April 10, 2026

About this 10-K

Scienture Holdings, Inc filed this 10-K on April 22, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $8.27M; down 19.3% from $10.25M a year earlier
Net loss: $17.84M; compared with a net loss of $3.47M a year earlier
Diluted EPS: -$7.49; compared with -$6.13 a year earlier

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Delaware		46-3673928
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

2420 Brunello Trace
Lutz, Florida		33558
(Address of principal executive offices)		(Zip Code)

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

		Page

Glossary		3
Cautionary Statement Regarding Forward-Looking Information		5

	PART I
Item 1.	Business	7
Item 1A.	Risk Factors	17
Item 1B.	Unresolved Staff Comments	44
Item 1C.	Cybersecurity	44
Item 2.	Properties	44
Item 3.	Legal Proceedings	45
Item 4.	Mine Safety Disclosures	45

	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	45
Item 6.	[Reserved]	46
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	53
Item 8.	Financial Statements and Supplemental Data	54
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	82
Item 9A.	Controls and Procedures	82
Item 9B.	Other Information	83
Item 9C.	Disclosure Regarding Foreign Jurisdictions That Prevent Inspections	83

	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	84
Item 11.	Executive Compensation	84
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	84
Item 13.	Certain Relationships and Related Transactions, and Director Independence	84
Item 14.	Principal Accountant Fees and Services	84

	PART IV
Item 15.	Exhibits, Financial Statements and Schedules	85
Item 16.	Form 10–K Summary	87
Signatures		88

	●	Risks related to our history of operating losses and that our operations may not become profitable;
	●	Claims relating to alleged violations of intellectual property rights of others;
	●	Technical problems with our websites;
	●	Risks relating to implementing our acquisition strategies, and the risk that acquisitions will likely be dilutive to our stockholders and we may not realize the anticipated benefits of certain strategic transactions that we pursue or effect;
	●	Our ability to manage our growth;
	●	Negative effects on our operations associated with the opioid pain medication health crisis;
	●	Regulatory and licensing requirement risks;
	●	Risks related to changes in the U.S. healthcare environment;
	●	The status of our information systems, facilities and distribution networks;
	●	Risks associated with the operations of our more established competitors;
	●	Regulatory changes;
	●	Healthcare fraud;

	●	Our ability to respond to general economic conditions, including financial market volatility and disruption, elevated levels of inflation, and declining economic conditions in the United States;
	●	Changes in laws or regulations relating to our operations;
	●	Privacy laws;
	●	System errors;
	●	Dependence on current management;
	●	Our growth strategy; and
	●	Other risks disclosed below under, and incorporated by reference in, “Risk Factors”.

	●	“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

	●	“SEC” or the “Commission” refers to the United States Securities and Exchange Commission; and

	●	“Securities Act” refers to the Securities Act of 1933, as amended.

	●	We are currently unprofitable, have generated net losses, and we may incur losses in the future;
	●	We may need additional financing in the future, which may not be available on favorable terms, if at all;
	●	We may not be able to manage our future growth;
	●	Risks relating to implementing our acquisition strategies, and the risk that acquisitions will likely be dilutive to our stockholders and we may not realize the anticipated benefits of certain strategic transactions that we pursue or effect;
	●	Many of our competitors are better established and have resources significantly greater than ours;
	●	We face risks associated with our operations within the pharmaceutical distribution market;
	●	We are dependent on our current management;
	●	We rely on third party contracts, which may not be renewed or may be terminated;
	●	We may in the future face difficulties in sourcing products and inventory due to a variety of causes;
	●	We have in the past, and may in the future, not be able to sell our inventory, at or above the price we acquired such inventory for, have in the past, and may in the future, be forced to write-down inventory and certain of our other assets which may have a material adverse effect on our balance sheet;
	●	We have in the past, and may in the future, not receive products or receive refunds for deposited amounts and have experienced losses in connection with such deposits;
	●	We may be subject to claims that we violated intellectual property rights of others, which are extremely costly to defend and could require us to pay significant damages and limit our ability to operate;
	●	Our business and operations depend on the proper functioning of information systems, critical facilities and distribution networks and a disruption, cyber-attack, failure or destruction of such networks, systems, or technologies may disrupt our business or result in liability;
	●	There may be losses or unauthorized access to or releases of confidential information, including personally identifiable information, that could subject the Company to significant reputational, financial, legal and operational consequences;
	●	We face numerous risks, including risks associated with legal challenges, relationships with third parties and affiliated professionals, competition for services; new technologies, failure to develop widespread brand awareness and regulatory risks from the Office of Inspector General, U.S. Department of Health and Human Services (OIG) and the United States Department of Justice (DOJ) and state regulators around pharmaceutical distribution now and in the future.
	●	Our certificate of incorporation limits the liability of our officers and directors and provides for indemnification rights, mandatory forum selection provisions and limits the ability of stockholders to call special meetings of stockholders;
	●	We incur significant costs to ensure compliance with U.S. and NASDAQ Capital Market reporting and corporate governance requirements;
	●	At various times we have not been in compliance with NASDAQ’s continued listing requirements, and may not be able to maintain the listing of our common stock on the NASDAQ Capital Market;
	●	Regulatory changes that affect our distribution channels could harm our business;
	●	Healthcare fraud laws are often vague and uncertain, exposing us to potential liability;
	●	New and expanded laws or regulations could have a material adverse effect on our business operations, cash flows or future prospects;
	●	The public health crisis involving the abuse of prescription opioid pain medication could have a material negative effect on our business operations and timely reporting to new state regulations.
	●	Consolidation in the U.S. healthcare industry may negatively impact our results of operations;
	●	We have identified material weaknesses in our internal control over financial reporting and controls and procedures;
	●	There may not be sufficient liquidity in the market for our securities in order for investors to sell their shares. The market price of our common stock may continue to be volatile;
	●	Stockholders may experience dilution to future equity sales, the exercise or conversion of outstanding convertible securities or future transactions;
	●	Our results of operations are subject to rising inflation, rising interest rates, governmental responses thereto and possible recessions caused thereby;
	●	Our Chief Executive Officer and President are our two largest stockholders and, as a result, they can exert significant control over us and have actual or potential interests that may differ from yours;
	●	Cyber security attacks and website problems;
	●	There is substantial doubt regarding our ability to continue as a going concern; and
	●	Claims, litigation, government investigations, and other proceedings that may adversely affect our business and results of operations.

	a)	We had $725,973 of loss on impairment of goodwill for the fiscal year ended December 31, 2020, in connection with the acquisition of Community Specialty Pharmacy, LLC;

	b)	We designed and invested resources into the “Bonum Health Hub”, a self-enclosed, free standing virtual examination room, which was launched by the Company’s wholly-owned Bonum Health, LLC, in November 2019 and was expected to be operational in April 2020; however, the Company does not anticipate installations moving forward, and took a write off of the hubs purchased at June 30, 2021 in the amount of $143,891, which was included under loss on inventory investments in the statement of operations for the year ended December 31, 2021;

	c)	We also used resources and funding to create a Health Passport application during 2020 and 2021, which was planned to store a user’s health and vaccination status and allow confirmation thereof via a QR code; however, we did not generate any revenue from this product and the product was discontinued at the end of December 2021;

	d)	We had $792,500 of loss on impairment of intangible assets related to our investment in the joint venture SOSRx, LLC formed in February of 2022. The subsidiary did not generate material revenue and in February of 2023 the Company voluntarily withdrew from the joint venture agreement. The asset impairment is reflected in the statement of operations for the year ended December 31, 2022 as impairment of intangible asset. Additionally, the Company contributed a cash investment of $275,000 in February of 2022 when the joint venture was formed, the Company did not recover this investment as part of the withdrawal settlement;

	e)	We recorded a loss of $875,250 in connection with CSP Test Kits purchased for our Community Specialty Pharmacy that were later deemed inappropriate for distribution by the FDA. The inventory was written down and was recorded as loss on inventory investment in the statement of operations during the year ended December 31, 2022; and
	d)	During the year ended December 31, 2023 we acquired Superlatus through a merger transaction, however, due to various complications with the post-closing integration we elected to divest Superlatus in March 2024.

	●	implement additional management information systems;

	●	further develop our operating, administrative, legal, financial, and accounting systems and controls;

	●	hire additional personnel;

	●	develop additional levels of management within our company;

	●	locate additional office space;

	●	maintain close coordination among our engineering, operations, legal, finance, sales and marketing, and client service and support organizations; and

	●	manage our expanding international operations.

	●	the difficulty of integrating acquired products, services or operations;

	●	the potential disruption of the ongoing businesses and distraction of our management and the management of acquired companies;

	●	difficulties in maintaining uniform standards, controls, procedures and policies;

	●	the potential impairment of relationships with employees and customers as a result of any integration of new management personnel;

	●	the potential inability or failure to achieve additional sales and enhance our customer base through cross-marketing of the products to new and existing customers;

	●	the effect of any government regulations which relate to the business acquired;

	●	potential unknown liabilities associated with acquired businesses or product lines, or the need to spend significant amounts to retool, reposition or modify the marketing and sales of acquired products or operations, or the defense of any litigation, whether or not successful, resulting from actions of the acquired company prior to our acquisition; and

	●	potential expenses under the labor, environmental and other laws of various jurisdictions.

	●	Improperly manufactured products may prove dangerous to the end consumer.
	●	Products may become adulterated by improper warehousing methods or modes of shipment.
	●	Counterfeit products or products with fake pedigree papers.
	●	Unlicensed or unlawful participants in the distribution channel.
	●	Risk with default and the assumption of credit loss.
	●	Regulatory risks.
	●	Risk related to the loss of supply, or the loss of a number of suppliers, or in the delay of obtaining the supply of drugs.

	●	facilitate the purchase and distribution of inventory items

	●	receive, process and ship orders on a timely basis;

	●	manage accurate billing and collections for thousands of customers;

	●	process payments to suppliers; and

	●	generate financial information.

	●	If a “penny stock” is sold to the investor in violation of the requirements listed above, or other federal or states securities laws, the investor may be able to cancel the purchase and receive a refund of the investment.

	●	If a “penny stock” is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms that committed the fraud for damages.

	●	Volatility: Penny stocks are known for their extreme price fluctuations. This volatility can be caused by a number of factors, including changes in the overall stock market, news about the company or industry, and changes in investor sentiment.

	●	Lack of liquidity: Penny stocks are often traded on over-the-counter markets, which can make them more difficult to buy and sell. This lack of liquidity can increase the risk of large price swings and can make it difficult to exit a position if needed.

	●	Lack of information: Many penny stock companies are not required to file regular reports with the Securities and Exchange Commission (SEC), which means there may be limited information available to investors. This can make it difficult to evaluate the financial health of the company and to make informed investment decisions.

	●	Manipulation: Because of their low trading volumes and lack of regulatory oversight, penny stocks can be vulnerable to market manipulation. This can include practices such as “pump and dump” schemes, where investors artificially inflate the price of a stock before selling their shares for a profit.

	●	actual or anticipated fluctuations in our operating results;

	●	the absence of securities analysts covering us and distributing research and recommendations about us;

	●	we may have a low trading volume for a number of reasons, including that a large portion of our stock is closely held;

	●	overall stock market fluctuations;

	●	announcements concerning our business or those of our competitors;

	●	actual or perceived limitations on our ability to raise capital when we require it, and to raise such capital on favorable terms;

	●	conditions or trends in our industry;

	●	litigation;

	●	changes in market valuations of other similar companies;

	●	future sales of common stock;

	●	departure of key personnel or failure to hire key personnel; and

	●	general market conditions.

	●	Plan of Operations. Summary of the Company’s plan of operations for the next 12 months.

	●	Sources of Revenue. Summary of the main sources of Company revenue during the reported periods.

	●	Results of Operations. An analysis of our financial results comparing the years ended December 31, 2023, and 2022.

	●	Liquidity and Capital Resources. An analysis of changes in our balance sheets and cash flows and discussion of our financial condition.

	●	Critical Accounting Policies and Estimates. Accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.

	●	Recently Issued Accounting Standards. A summary of recently issued accounting standards affecting the Company, if any.

	○	$250,000 repayments of debt, net of new debt issuances; and
	○	$733,694 paid for interest expense related to the sale of future accounts receivable.

	○	$1,554,070 increase in accounts payable balance as of December 31, 2023 compared to the comparable period;
	○	$1,138,310 increase in the balance due on the sale of future accounts receivable as of December 31, 2023 compared to the comparable period;
	○	$6,363,333 increase in the current portion of notes payable balance; and a
	○	$350,000 increase in purchase price payable balance as of December 31, 2023 compared to the comparable period.

	Fiscal Year Ended December 31,									Percentage
	2023			2022			Change			Change
Revenues	$	8,272,214		$	10,250,168			(1,977,954	)		(19.3	%)
Cost of sales		5,673,957			4,730,897			943,060			19.9	%
Gross profit		2,598,257			5,519,271			(2,921,014	)		(52.9	%)
Operating expenses:
Loss on inventory investment		-			875,250			(875,250	)		(100	%)
Technology, research & development		1,376,908			993,185			383,723			38.6	%
Wages and salary		2,698,178			3,581,089			(882,911	)		(24.7	%)
Accounting and legal		1,534,377			829,751			704,626			84.9	%
Professional fees		1,466,567			466,735			999,832			214.2	%
Other general and administrative (less stock-based compensation expense)		2,498,123			1,355,946			1,142,177			84.2	%
Warrants and options expense		287,510			333,284			(45,774	)		(13.7	%)
Total operating expenses		9,861,663			8,435,240			1,426,423			16.9	%
Change in fair value of warrant liability		(148,420	)		825,544			(973,964	)		(118.0	%)
Interest, net		(1,194,148	)		(315,217	)		(878,931	)		278.8	%
Goodwill impairment		(5,129,115	)		-			(5,129,115	)		(100.0	%)
Gain on disposal of asset		-			2,200			(2,200	)		(100.0	%)
Other income		14,543			-			14,543			100.0	%
Net loss from operations	$	(13,720,546	)	$	(2,403,442	)	$	(11,317,104	)		470.9	%
Loss on discontinued operations		(4,123,028	)		(1,506,426	)		(2,616,602	)		173.7	%
Net loss attributable to TRxADE Health, Inc.		(17,843,574	)		(3,472,099	)		(14,371,475	)		413.9	%
Net loss attributable to non-controlling interests		-			(437,769	)		437,769			(100.0	%)

	December 31, 2023			December 31, 2022
Cash	$	151,908		$	1,094,894
Current assets (excluding cash)		2,601,154			998,229
Current liabilities (excluding short term debt)		5,026,355			1,980,124
Short term debt		6,530,000			166,667
Working deficit		(8,803,293	)		(53,668	)

Projected Expenses for 2024	Amount
General and administrative (1)	$	4,800,000
Total	$	4,800,000

			Payments due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Operating lease obligations		651,528		187,935		356,634		106,959		-
Total Contractual obligations	$	651,528		187,935		356,634		106,959		-

Report of Independent Registered Public Accounting Firm (Firm ID: 6866)	55
Report of the Independent Registered Public Accounting Firm (MaloneBailey, LLP, Houston, Texas, Firm ID: 00206)	57
Consolidated Balance Sheets	58
Consolidated Statements of Operations	59
Consolidated Statements of Changes in Stockholders’ Equity	60
Consolidated Statements of Cash Flows	61
Notes to Consolidated Financial Statements	62

	●	We evaluated the Company’s revenue growth rate and margin assumptions by comparing them to the pre-acquisition budget and the Company’s historical financial results.

	●	We evaluated the discount rate used by comparing it to a discount rate that was developed using publicly available market data for comparable entities.

	●	We compared the revenue growth rate, margin, to those of comparable entities

	●	We validated the mathematical accuracy of the management’s calculations.

	●	Obtaining an understanding of the Company’s process and related controls to evaluate goodwill for impairment.

	●	Evaluating the reasonableness of managements forecasts of future net sales, operating margins, and operating expenses by comparing the forecasts to historical results, marketing plans relevant economic factors, and other comparable company and industry information.

	December 31,			December 31,
	2023			2022
Assets
Current Assets
Cash	$	151,908		$	1,094,894
Accounts receivable, net		821,804			629,921
Inventory		968			65,523
Prepaid assets		107,774			104,461
Notes receivable		1,300,000			-
Other receivables		370,608			-
Current assets of discontinued operations		-			198,324
Total Current Assets		2,753,062			2,093,123

Property, plant and equipment, net		277,009			65,214
Intangible assets and capitalized software, net		8,962,688			-
Security deposits		10,531			49,029
Operating lease right-of-use assets		529,623			1,051,815
Noncurrent assets of discontinued operations		-			450,845
Total Assets	$	12,532,913		$	3,710,026

Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable		2,082,054			527,984
Accrued liabilities		400,987			271,230
Other current liabilities		70,310			67,517
Contingent funding liabilities		1,246,346			108,036
Lease liabilities – current portion		139,705			196,872
Notes payable – current portion		6,530,000			166,667
Warrant liability		736,953			588,533
Purchase price payable		350,000			-
Current liabilities of discontinued operations		-			219,952
Total Current liabilities		11,556,355			2,146,791

Long Term Liabilities
Lease liabilities – net of current portion		409,205			887,035
Notes payable		25,000			333,333

Total Liabilities		11,990,560			3,367,159

Stockholders’ Equity

Series A preferred stock, $0.00001 par value; 9,211,246 shares authorized; none issued and outstanding as of December 31, 2023 and December 31, 2022		-			-
Series B preferred stock, $0.00001 par value; 787,754 shares authorized; 15,759 outstanding as of December 31, 2023, and none as December 31, 2022		-			-
Series C preferred stock, $0.00001 par value; 1,000 shares authorized; 290 issued and outstanding as of December 31, 2023, and none as of December 31, 2022		-			-
Preferred stock value
Common stock, $0.00001 par value; 100,000,000 shares authorized; 905,008, and 626,247 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively		9			6
Additional paid-in capital		33,788,284			20,482,666
Retained deficit		(33,245,940	)		(19,719,536	)
Total TRxADE Health, Inc stockholders’ equity		542,353			763,136
Non-controlling interest in subsidiary		-			(420,269	)
Total stockholders’ equity		542,353			342,867

Total Liabilities and Stockholders’ Equity	$	12,532,913		$	3,710,026

	2023			2022
	Years Ended December 31,
	2023			2022

Revenues	$	8,272,214		$	10,250,168
Cost of sales		5,673,957			4,730,897
Gross Profit		2,598,257			5,519,271

Operating Expenses:
Loss on inventory investment		-			875,250
Wage and salary expense		2,698,178			3,581,089
Professional fees		1,466,567			466,735
Accounting and legal expense		1,534,377			829,751
Technology expense		1,376,908			993,185
General and administrative		2,785,633			1,689,230
Total operating expenses		9,861,663			8,435,240
Operating Loss		(7,263,406	)		(2,915,969	)

Nonoperating Income (Expense)
Change in fair value of warrant liability		(148,420	)		825,544
Interest income		4,198			20,989
Goodwill impairment		(5,129,115	)		-
Gain on disposal of asset		-			2,200
Other income		14,543			-
Interest expense		(1,198,346	)		(336,206	)
Total nonoperating income (expense)		(6,457,140	)		512,527
Net loss from continuing operations		(13,720,546	)		(2,403,442	)

Net loss on discontinued operations		(4,123,028	)		(1,506,426	)
Net Loss		(17,843,574	)		(3,909,868	)

Net loss attributable to TRxADE Health, Inc.		(17,843,574	)		(3,472,099	)
Net loss attributable to non-controlling interests		-			(437,769	)
Net loss per common share from continuing operations
Basic	$	(17.96	)	$	(3.48	)
Diluted	$	(5.76	)	$	(3.47	)
Net loss per common share from discontinued operations
Basic	$	(5.40	)	$	(2.67	)
Diluted	$	(1.73	)	$	(2.66	)
Net loss attributable to common stockholders
Basic	$	(23.35	)	$	(6.15	)
Diluted	$	(7.49	)	$	(6.13	)
Weighted average common shares outstanding
Basic		764,058			564,862
Diluted		2,381,443			566,609


	Series B Preferred Stock				Series C Preferred Stock			Common Stock				Additional					Non-Controlling			Total
	Shares		$ Amount		Shares		$ Amount	Shares		$ Amount		Paid-in Capital		Accumulated Deficit			Interest in Subsidiary			Stockholders’ Equity
Balance at December 31, 2021		-	$	-	-	$	-		544,430	$	5	$	20,017,605	$	(16,247,437	)	$	-		$	3,770,173
Capital Contributions		-		-	-		-		-		-		-		-			792,500			792,500
Capital Distribution		-		-	-		-		-		-		-		-			(775,000	)		(775,000	)
Common stock issued for services		-		-	-		-		19,511		-		254,106		-			-			254,106
Common stock issued for placement, net issuance costs		-			-		-		61,334		1		130,917		-			-			130,918
Warrants exercised for cash		-		-	-		-		972		-		875		-			-			875
Options expense		-		-	-		-		-		-		79,163		-			-			79,163
Net loss		-		-	-		-		-		-		-		(3,472,099	)		(437,769	)		(3,909,868	)
Balance at December 31, 2022		-	$	-	-	$	-		626,247	$	6	$	20,482,666	$	(19,719,536	)	$	(420,269	)	$	342,867
Balance		-	$	-					626,247	$	6	$	20,482,666	$	(19,719,536	)	$	(420,269	)	$	342,867
Common stock issued for services		-		-	-		-		38,480		-		257,772		-			-			257,772
Warrants exercised for cash		-		-	-		-		41,911		1		1,621		-			-			1,622
Options expense		-		-	-		-		-		-		29,738		-			-			29,738
Reverse split rounding adjustment		-		-	-		-		21,929		-		-		-			-			-
Disposition of assets		-		-	-		-		-		-		-		4,317,170			420,269			4,737,439
Shares issued pursuant to merger agreement		15,759		-	-		-		136,441		1		12,500,088		-			-			12,500,089
Shares issued pursuant to securities purchase agreement		-		-	290		-		40,000		1		516,399		-			-			516,400
Net loss		-		-	-		-		-		-		-		(17,843,574	)		-			(17,843,574	)
Balance at December 31, 2023		15,759	$	-	290	$	-		905,008	$	9	$	33,788,284	$	(33,245,940	)	$	-		$	542,353
Balance		15,759	$	-	290		-		905,008	$	9	$	33,788,284	$	(33,245,940	)	$	-		$	542,353

	2023			2022
Cash flows from operating activities:
Net loss	$	(13,720,546	)	$	(2,403,442	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		19,375			13,486
Options expense		29,738			79,163
Common stock issued for services		257,772			254,106
Bad debt expense		-			(246,683	)
Loss on write-off of intangible asset		-			792,500
Loss on inventory investment		-			875,250
Goodwill impairment		5,129,115			-
Loss on inventory investments		-			-
Gain on sale of asset		-			(2,200	)
Amortization of right-of-use assets		215,665			181,218
Amortization of intangible assets		814,790			-
Changes in operating assets and liabilities:
Accounts receivable, net		(293,784	)		369,932
Prepaid assets and deposits		38,367			335,066
Inventory		4,232,947			(51,737	)
Other receivables		(254,924	)		(875,250	)
Right-of-use assets		306,527			-
Lease liability		(534,997	)		(164,618	)
Accounts payable		1,607,625			199,833
Accrued liabilities		58,692			(211,694	)
Purchase price payable		350,000			-
Current liabilities		2,794			67,517
Warrant liability		148,420			588,533
Net cash used in operating activities from continuing operations		(1,592,424	)		(199,020	)
Net cash used in operating activities from discontinued operations		(481,177	)		(1,365,648	)

Cash flows from investing activities:
Funds acquired through acquisitions		(344,454	)		-
Proceeds from sale of fixed assets		-			749
Investment in capitalized software		-			-
Net cash (used in) investing activities from continuing operations		(344,454	)		749
Net cash provided by investing activities from discontinued operations		68,737			(428,594	)

Cash flows from financing activities:
Proceeds from the issuance of debt		400,000			-
Repayment of debt		(150,000	)		-
Repayment of contingent liability		(1,043,107	)		(716,964	)
Proceeds from sale of future revenue		2,181,417			825,000
Proceeds from exercise of stock options		-			-
Proceeds from exercise of warrants		1,622			875
Proceeds from securities purchase agreement		516,400			-
Proceeds from issuance of common stock, net of issuance costs		-			130,918
Net cash provided by (used in) financing activities from continuing operations		1,906,332			239,829
Net cash (used in) financing activities from discontinued operations		(500,000	)		(275,000	)

Net decrease in cash		(942,986	)		(2,027,684	)
Cash at beginning of the year		1,094,894			3,122,578
Cash at end of the period	$	151,908		$	1,094,894

Supplemental disclosure of cash flow information
Cash paid for interest, net	$	733,694		$	336,206
Cash paid for income taxes	$	-		$	-
Non-Cash Transactions
Insurance premium financed	$	306,152		$	220,354
Note issued as SOSRx contribution		-		$	500,000
Not cancelled from SORx agreement termination	$	500,000			-
Intangible asset contribution from non-controlling interest	$	-		$	792,500
Disposition of assets, related party	$	492,030			-
Issuance of note receivable	$	1,300,000		$	-


	For the Years Ended December 31,
	2023			2022
Numerator:
Net loss from continuing operations	$	(13,720,546	)	$	(2,403,442	)
Net loss attributable to noncontrolling interest		-			(437,769	)
Net loss from continuing operations available to common stockholders		(13,720,546	)		(1,965,673	)
Net loss from discontinued operations		(4,123,028	)	$	(1,506,426	)
Numerator for basic and diluted EPS - income available to common stockholders		(17,843,574	)	$	(3,472,099	)
Denominator:
Denominator for EPS – weighted average shares
Basic		764,058			564,862
Diluted		2,381,443			566,609
Net loss per common share attributable to common stockholders
Basic	$	(23.35	)	$	(6.15	)
Diluted	$	(7.49	)	$	(6.13	)
Net loss per common share from continuing operations
Basic	$	(17.96	)	$	(3.48	)
Diluted	$	(5.76	)	$	(3.47	)
Net loss per common share from discontinued operations
Basic	$	(5.40	)	$	(2.67	)
Diluted	$	(1.73	)	$	(2.66	)

	July 31, 2023
Purchase consideration:
Common Stock, at fair value	$	996,019
Series B Preferred Stock, at fair value		11,504,070
Total purchase consideration	$	12,500,089

Purchase price allocation:
Cash	$	5,546
Prepaid expenses		3,705
Inventory		122,792
Intangible assets, net		9,777,479
Goodwill		5,129,115
Assets acquired		15,038,637
Accounts payable and other current liabilities		(283,548	)
Purchase price payable		(350,000	)
Notes payable		(1,905,000	)
Liabilities assumed		(2,538,548	)
Net assets acquired	$	12,500,089

	September 27, 2023
Purchase consideration:
Promissory note	$	4,400,000
Total purchase consideration	$	4,400,000

Allocation of cost of assets acquired:
Inventory	$	4,168,830
Property and equipment		231,170
Assets acquired		4,400,000
Net assets acquired	$	4,400,000

	Alliance Pharma Solutions, LLC			Community Specialty Pharmacy, LLC
Cash	$	1,050		$	61,988
Accounts receivable, net		-			101,901
Inventory		-			123,230
Prepaid assets		-			525
Intangible assets and capitalized software, net		739,337			-
Accounts payable		(23,982	)		(231,876	)
Accrued liabilities		-			(10,182	)
Net assets sold	$	716,405		$	45,586