SCNX 8-K
Scienture Holdings, Inc. (SCNX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
$0.00001 Par Value Per Share |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Item 2.02 Results of Operations and Financial Condition.
On November 7, 2022, TRxADE HEALTH, INC., (“TRxADE” or the “Company”) issued a press release announcing it will hold a conference call and webcast at 5:00 p.m. Eastern time on November 7, 2022, regarding its financial results for the three and nine months ended September 30, 2022. A copy of the press release, which includes information on the conference call and webcast and a summary of such financial results is furnished as Exhibit 99.1 to this Form 8-K and is incorporated into this Item 2.02 by reference.
The information contained in this Current Report (and included as exhibits hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
TRxADE is making reference to non-GAAP financial information in both the press release and the conference call/webcast. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached press release.
Item 7.01 Regulation FD Disclosure.
The Company’s management plans to hold virtual roadshows and meetings with current and prospective investors, funding sources, and others, and to attend certain virtual conferences from time to time.
A copy of the presentation which the Company will use in connection with such conferences, roadshows and meetings is being furnished as Exhibit 99.2 to this Current Report on Form 8-K, and is incorporated by reference herein, and is also available on the Company’s website at https://investors.trxadegroup.com/nasdaq-meds/presentations-nasdaq-meds/, which website includes information the Company does not desire to incorporate by reference into this report.
The information responsive to Item 7.01 of this Form 8-K and Exhibit 99.2, attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended or the Exchange Act, except as expressly set forth by specific reference in such a filing. The furnishing of this Report is not intended to constitute a determination by the Company that the information is material or that the dissemination of the information is required by Regulation FD.
Item 9.01 Financial Statements and Exhibits.
| Exhibit No. | Description | |
| 99.1** | Press Release of TRxADE HEALTH, INC. dated November 7, 2022 | |
| 99.2** | TRxADE HEALTH, Inc. – Q3 2022 PowerPoint Presentation | |
| 104 | Inline XBRL for the cover page of this Current Report on Form 8-K |
** Furnished herewith.
The inclusion of any website address in this Form 8-K, and any exhibit thereto, is intended to be an inactive textual reference only and not an active hyperlink. The information contained in, or that can be accessed through, such website is not part of or incorporated into this Form 8-K.
Forward Looking Statements
The press release attached hereto as Exhibit 99.1 and presentation attached hereto as Exhibit 99.2, contain certain statements that may be deemed to be “forward-looking statements” within the federal securities laws, including the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by words such as “may,” “should,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other similar expressions. Forward-looking statements are not a guarantee of performance and are subject to a number of risks and uncertainties, many of which are difficult to predict and are beyond our control. These risks and uncertainties should be carefully considered. We caution you not to place undue reliance on the forward-looking statements, which involve known and unknown risks, uncertainties and relate to the Company’s current expectations and are subject to the limitations and qualifications set forth in the press release and presentation as well as in the Company’s other filings with the Securities and Exchange Commission. These statements also involve known and unknown risks, which may cause the results of the Company, its divisions and concepts to be materially different than those expressed or implied in such statements, including those referenced in the press release. Accordingly, readers should not place undue reliance on any forward-looking statements. Forward-looking statements may include comments as to the Company’s beliefs and expectations as to future financial performance, events and trends affecting its business and are necessarily subject to uncertainties, many of which are outside the Company’s control. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Cautionary Statement Regarding Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s periodic and current filings with the SEC, including the Form 10-Qs and Form 10-Ks, filed with the SEC and available at www.sec.gov and in the “NASDAQ:MEDS” — “SEC Filings” section of the Company’s website at https://www.investors.trxadehealth.com, and specifically including the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 and its Annual Report on Form 10-K for the year ended December 31, 2021, and subsequent periodic reports. Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that occur after that date, except as otherwise provided by law.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TRxADE HEALTH, INC. | ||
| Date: November 7, 2022 | By: | /s/ Suren Ajjarapu |
| Name: | Suren Ajjarapu | |
| Title: | Chief Executive Officer | |
Exhibit 99.1
TRxADE HEALTH Reports Third Quarter Gross Margin of 58% and Q3 2022 Financial Results
Continues Nationwide Expansion of Breakthrough Digital Healthcare Services IT Platform
TAMPA, FL, November 7, 2022 — TRxADE HEALTH, INC. (NASDAQ: MEDS)(“TRxADE” or the “Company”), a health services IT company focused on digitalizing the retail pharmacy experience by optimizing drug procurement, the prescription journey and patient engagement in the U.S., today announced its financial results for the 2022 third quarter (Q3) ended September 30, 2022.
Third Quarter 2022 and Subsequent Operational Highlights
TRxADE continued to expand the TRxADE drug procurement marketplace nationwide, adding 291 new registered members in Q3 2022 and 1,149 new registered members during the first nine months of 2022, bringing the total registered members to approximately 14,100+ at September 30, 2022.
TRxADE announced in September 2022 that Bonum Health, its Digital Healthcare business subsidiary, had signed a Telemedicine Services Distribution agreement with Wakefern Food Corp., to deploy telemedicine services throughout ShopRite pharmacy-led locations in New Jersey, New York, Pennsylvania, Connecticut, and Maryland.
Bonum Health will provide affordable telemedicine services and prescription discount savings to ShopRite customers by offering Bonum Health’s signature Mobile Health Services application and prescriber program, staffed by over 650+ Board-Certified Medical Providers. The service, which allows customers to connect virtually with doctors and healthcare providers, to get the care they need, also provides access to prescription discount savings through the innovative Bonum Health telemedicine application, which can be downloaded from both Google Play and Apple App stores.
In October 2022, TRxADE announced that Bonum Health had entered into a strategic services distribution agreement with multiple insurance brokerage firms to offer access to telemedicine services for small to medium employer groups.
Management Commentary
Mr. Ajjarapu, commented, “These first nine months of 2022 have been an exciting and challenging time for TRxADE. We continue to focus the Company’s strategic plans and partnerships working towards creating sustainable value for our stockholders. I am pleased with the growth we have experienced in our TRxADE platform. We continue to achieve key milestones in our internal roadmap with a focus on innovation and development through our various complementary growth opportunities.”
Third Quarter 2022 Financial Summary
Consolidated revenues for the third quarter of 2022 compared to the third quarter of 2021, decreased 6% to $2.4 million, compared to $2.6 million, respectively. The consolidated decrease in revenue, is driven by decreases in revenue attributed to our TRxADE Prime and Community Specialty Pharmacy subsidiaries. The revenues generated by the TRxADE Platform in the three and nine months ended September 30, 2022, increased 6% and 10%, respectively, as compared to the same periods in 2021.
Gross profit increased to $1.4 million in the third quarter of 2022 compared to $1.3 million for the same period in 2021. As a percent of revenue, gross profit increased to 58% in the third quarter of 2022, as compared to 50% in the third quarter of 2021. The increase in gross profit was primarily attributable to increased revenue generated by the TRxADE Platform that does not have cost of goods expense and the improved gross margins generated by TRxADE Prime in the third quarter of 2022.
Operating expenses in the third quarter of 2022 were $1.8 million, compared to $2.6 million in the same quarter last year.
Net loss in the third quarter of 2022 was ($0.5) million, or ($0.06) per basic and diluted share outstanding, compared to a net loss of ($1.3) million, or ($0.16) per basic and diluted share outstanding, in the same quarter last year.
Adjusted EBITDA, a non-GAAP financial measure was ($0.4) million for the third quarter of 2022, compared to $0.7 million in the same quarter last year. See “Use of Non-GAAP Financial Information” below, and the reconciliation of Adjusted EBITDA to GAAP set forth at the end of this release.
Additional metrics related to our key performance are as follows:
For the nine-month period ended September 30, 2022, the TRxADE Platform increased its registered users by 1,149. For the three-month period ended September 30, 2022, new registrations were 291, compared to 195 for the same period in 2021. Total registered users increased 9% to approximately 14,100+ from 12,962, as of September 30, 2022 and 2021, respectively.
The table below summarizes the key metrics that management evaluated in relation to the activity on the TRxADE Platform for the three-month period ended September 30, 2022 compared to the same period in 2021:
| Processed Sales Volume | 18% |  |
| Total Revenue | 6% |  |
| Registered Users | 9% |  |
For the three-month period ended September 30, 2022, compared to the same period in 2021, Integra Pharma Solutions, LLC (“TRxADE Prime”) processed sales volume decreased 28% and units sold decreased 35 %.
Although Trxade Prime experienced a decrease in top line revenue, there was an improvement in gross margin. Gross margin improved from (6%) to 3% for the three-month periods ended September 30, 2021 and 2022, respectively. This improvement in gross margin for Trxade Prime contributed to the improved consolidated gross margin of 58% for the three months ended September 2022.
During the third quarter, the Company executed on several initiatives to drive down overhead expense and to improve gross margin. In addition to the improved gross margin referenced above, the initiatives effectively reduced overhead expense 68% for the three-month period ended September 2022, as compared to the same period in 2021 (less $630,000 of bad debt expense in 2021). Among these projects to reduce overhead expense was the completion of additional automation software as well as administrative and warehouse staffing adjustments. As part of the initiative to improve gross margin, the Company is focused on executing improved vendor pricing and vendor partnerships.
The Company is committed to continued efforts designed to build a strong foundation for Trxade Prime and further growth.
Conference Call and Webcast
Management will host a conference call on Monday, November 7, 2022, at 5:00 p.m. Eastern time to discuss TRxADE’s third quarter 2022 financial results. The call will conclude with Q&A from participants. To participate, please use the following information:
Q3 2022 Conference Call and Webcast
Date: Monday, November 7, 2022
Time: 5:00 p.m. Eastern time
U.S. Dial-in: 1-844-825-9789
International Dial-in: 1-412-317-5180
Conference ID: 10172776
Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1579639&tp_key=b6cea3c0c8
Please dial in at least 10 minutes before the start of the call to ensure timely participation.
A playback of the call will be available through December 7, 2022. To listen, call 1-844-512-2921 within the United States or 1-412-317-6671 when calling internationally and enter replay pin number 10172776. A webcast will also be available for 30 days on the IR section of the Trxade Health website or by clicking the webcast link above.
About TRxADE HEALTH, Inc.
TRxADE HEALTH, Inc. (NASDAQ: MEDS) is a health services IT company focused on digitalizing the retail pharmacy experience by optimizing drug procurement, the prescription journey and patient engagement in the U.S. The Company operates the TRxADE drug procurement marketplace serving a total of approximately 14,000+ members nationwide, fostering price transparency and under the Bonum Health brand, offering patient centric telehealth services and tele vet services. For more information on TRxADE Health, please visit the Company’s IR website at investors.trxadehealth.com.
Use of Non-GAAP Financial Information
In addition to our results calculated under generally accepted accounting principles in the United States (“GAAP”), in this earnings release, we also present EBITDA and Adjusted EBITDA which are “non-GAAP financial measures” presented as supplemental measures of the Company’s performance. They are not presented in accordance with GAAP. EBITDA represents net income (loss) attributable to TRxADE HEALTH, Inc. before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before stock-based compensation expense, bad debt recovery, bad debt write-off, gain on disposal of asset, litigation expenses, loss (gain) on inventory investment and loss (gain) on impairment of goodwill. EBITDA and Adjusted EBITDA are presented because we believe they provide additional useful information to investors due to the various noncash items during the period. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: EBITDA and Adjusted EBITDA do not reflect cash expenditures, future requirements for capital expenditures, or contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments. Although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. Additionally, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than TRxADE HEALTH, Inc. does, limiting its usefulness as a comparative measure. EBITDA and Adjusted EBITDA are not recognized in accordance with GAAP, are unaudited, and have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of the Company’s results as reported under GAAP. The Company’s presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure. For more information on these non-GAAP financial measures, please see the section titled “Reconciliation of Net Income (Loss) attributable to TRxADE HEALTH, INC., to Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA”, included at the end of this release.
Forward-Looking Statements
This press release may contain forward-looking statements, including information about management’s view of TRxADE’s future expectations, plans and prospects, within the meaning of the federal securities laws, including the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. In particular, when used in the preceding discussion, the words “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions are intended to identify forward-looking statements. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of TRxADE, its divisions and concepts to be materially different from those expressed or implied in such statements. These risks include risks relating to agreements with third parties, including Wakefern Food Corp., Coborn’s and Galt Pharmaceuticals; our ability to raise funding in the future, as needed, and the terms of such funding, including potential dilution caused thereby; our ability to continue as a going concern; the planned benefits, expected users of, and projected revenues of our venture with Exchange Health; amounts we owe and may owe to Exchange Health in connection with the arrangement with Exchange Health; security interests under certain of our credit arrangements; the fact that we are exploring strategic alternatives for our Bonum Health, Inc. subsidiary; our ability to maintain the listing of our common stock on the Nasdaq Capital Market, including our current non-compliance with the continued listing standards of the Nasdaq Capital Market; risks associated with our operations not being profitable; the commercial viability of new business lines, applications, products and technologies, and the costs of such items; the Company’s stock repurchase program; the adoption of the Company’s product offerings; claims relating to alleged violations of intellectual property rights of others; our ability to monetize our technological solutions; technical problems with our websites, apps and products; risks relating to implementing our acquisition strategies; challenges to the pharmaceutical supply chain posted by the COVID-19 pandemic and related matters; 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; new competitors which may have more resources than we do; increases in direct to consumer sales of drugs; healthcare fraud; COVID-19, governmental responses thereto, economic downturns and increased inflation and possible recessions caused thereby; changes in laws or regulations relating to our operations; privacy laws; system errors; dependence on current management; our growth strategy; dilution which may be caused by future offerings; increased inflation and interest rates, including the increased costs of raising funding as a result thereof; supply chain issues caused by among other things, recessions and global conflicts; and others that are included from time to time in filings made by TRxADE with the Securities and Exchange Commission, including, but not limited to, in the “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” sections in its Form 10-Ks and Form 10-Qs and in its Form 8-Ks, which it has filed, and files from time to time, with the U.S. Securities and Exchange Commission (SEC), and more particularly in the Quarterly Report on Form 10-Q filed today with the SEC for the quarter ended September 30, 2022, and our Annual Report on Form 10-K for the year ended December 31, 2021. These reports are available at www.sec.gov. Other unknown or unpredictable factors also could have material adverse effects on TRxADE’s future results and/or could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. TRxADE cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. We undertake no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
Investor Relations:
Investors.trxadegroup.com
TRxADE HEALTH, INC.
Consolidated Balance Sheets
| September 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Current Assets | ||||||||
| Cash | $ | 321,715 | $ | 3,122,578 | ||||
| Accounts receivable, net | 850,306 | 978,973 | ||||||
| Inventory | 75,950 | 56,279 | ||||||
| Prepaid assets | 249,785 | 216,414 | ||||||
| Other receivable | 875,250 | - | ||||||
| Total Current Assets | 2,373,006 | 4,374,244 | ||||||
| Property plant and equipment, net | 68,036 | 98,751 | ||||||
| Intangible assets and capitalized software, net | 1,099,002 | - | ||||||
| Deposits | 49,031 | 60,136 | ||||||
| Operating lease right-of-use assets | 1,100,186 | 1,233,033 | ||||||
| Total Assets | $ | 4,689,261 | $ | 5,766,164 | ||||
| Current Liabilities | ||||||||
| Accounts payable | 744,412 | 477,028 | ||||||
| Accrued liabilities | 312,077 | 270,437 | ||||||
| Other current liabilities | 105,926 | - | ||||||
| Contingent funding liabilities | 542,143 | - | ||||||
| Current portion lease liabilities | 190,127 | 178,561 | ||||||
| Notes payable— related party | 166,667 | - | ||||||
| Total Current liabilities | 2,061,352 | 926,026 | ||||||
| Long Term Liabilities | ||||||||
| Other long-term liabilities — leases | 937,998 | 1,069,965 | ||||||
| Notes payable- related party | 333,333 | - | ||||||
| Total Liabilities | 3,332,683 | 1,995,991 | ||||||
| Stockholders’ Equity | ||||||||
| Series A preferred stock, $0.00001 par value; 10,000,000 shares authorized; none issued and outstanding, as of September 30, 2022 and December 31, 2021. | - | - | ||||||
| Common stock, $0.00001 par value; 100,000,000 shares authorized; 8,398,708 and 8,166,457 shares issued and outstanding, as of September 30, 2022 and December 31, 2021, respectively | 83 | 82 | ||||||
| Additional paid-in capital | 20,193,271 | 20,017,528 | ||||||
| Retained deficit | (18,794,350 | ) | (16,247,437 | ) | ||||
| Total | 1,399,004 | 3,770,173 | ||||||
| Non-controlling interest in subsidiary | (42,426 | ) | - | |||||
| Total stockholders’ equity | 1,356,578 | 3,770,173 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 4,689,261 | $ | 5,766,164 | ||||
TRxADE HEALTH, INC.
Consolidated Statements of Operations
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues | $ | 2,400,311 | $ | 2,550,046 | $ | 8,919,312 | $ | 7,501,535 | ||||||||
| Cost of Sales | 998,320 | 1,269,005 | 5,010,704 | 3,995,792 | ||||||||||||
| Gross Profit | 1,401,991 | 1,281,041 | 3,908,608 | 3,505,743 | ||||||||||||
| Operating Expenses: | ||||||||||||||||
| Loss on inventory investment | - | 1,285 | - | 1,226,426 | ||||||||||||
| Wage and salary expense | 937,062 | 1,015,816 | 3,185,144 | 2,878,237 | ||||||||||||
| Professional fees | 95,275 | 205,457 | 307,341 | 757,263 | ||||||||||||
| Accounting and legal expense | 191,611 | 98,867 | 567,690 | 462,626 | ||||||||||||
| Technology expense | 298,586 | 338,637 | 842,433 | 678,110 | ||||||||||||
| General and administrative | 286,488 | 917,105 | 1,484,709 | 2,013,050 | ||||||||||||
| Total operating expenses | 1,809,022 | 2,577,167 | 6,387,317 | 8,015,712 | ||||||||||||
| Operating Loss | (407,031 | ) | (1,296,126 | ) | (2,478,709 | ) | (4,509,969 | ) | ||||||||
| Nonoperating income (expense) | ||||||||||||||||
| Interest income | 8,396 | - | 8,396 | - | ||||||||||||
| Gain on disposal of asset | - | - | 4,100 | - | ||||||||||||
| Interest expense | (130,107 | ) | (5,622 | ) | (140,626 | ) | (21,574 | ) | ||||||||
| Total nonoperating expense | (121,711 | ) | (5,622 | ) | (128,130 | ) | (21,574 | ) | ||||||||
| Net Loss | $ | (528,742 | ) | $ | (1,301,748 | ) | $ | (2,606,839 | ) | $ | (4,531,543 | ) | ||||
| Net loss attributable to TRxADE Health, Inc. | (503,003 | ) | (1,301,748 | ) | (2,546,913 | ) | (4,531,543 | ) | ||||||||
| Net loss attributable to non-controlling interests | (25,739 | ) | - | (59,926 | ) | - | ||||||||||
| Net loss per common share — basic and diluted | $ | (0.06 | ) | $ | (0.16 | ) | $ | (0.31 | ) | $ | (0.56 | ) | ||||
| Weighted average common shares outstanding - basic and diluted | 8,249,653 | 8,163,522 | 8,203,202 | 8,126,689 | ||||||||||||
TRxADE HEALTH, INC.
Consolidated Statements of Cash Flows
| Nine Months Ended September 30, | ||||||||
| 2022 | 2021 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (2,606,839 | ) | $ | (4,531,543 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation expense | 11,815 | 5,250 | ||||||
| Options expense | 67,439 | 191,305 | ||||||
| Common stock issued for services | 107,430 | 239,913 | ||||||
| Bad debt expense | (98,841 | ) | 616,215 | |||||
| Warrant Expense | - | 21,640 | ||||||
| Loss on inventory investments | - | 1,226,426 | ||||||
| Gain on sale of asset | (4,100 | ) | - | |||||
| Amortization of right of use assets | 132,847 | 97,436 | ||||||
| Amortization of intangible assets | 29,400 | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Deferred offering costs | - | (78,000 | ) | |||||
| Accounts receivable, net | 227,508 | (819,988 | ) | |||||
| Prepaid assets and deposits | 198,088 | (284,499 | ) | |||||
| Inventory | (19,671 | ) | 1,162,932 | |||||
| Other receivables | (875,250 | ) | 5,140 | |||||
| Lease liability | (120,401 | ) | (96,954 | ) | ||||
| Accounts payable | 267,384 | 18,391 | ||||||
| Accrued liabilities | (178,714 | ) | 96,825 | |||||
| Current liabilities | 105,926 | - | ||||||
| Customer Deposits | - | (10,000 | ) | |||||
| Net cash used in operating activities | (2,755,979 | ) | (2,139,511 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Sale of fixed assets | 23,000 | - | ||||||
| Investment in capitalized software | (335,902 | ) | - | |||||
| Net cash used in investing activities | (312,902 | ) | - | |||||
| Cash flows from financing activities: | ||||||||
| Repayments of promissory notes- related parties | - | (225,000 | ) | |||||
| Repayment of contingent liability | (282,257 | ) | ||||||
| Distributions to non-controlling interest | (275,000 | ) | - | |||||
| Proceeds from sale of future revenue | 825,000 | - | ||||||
| Proceeds from exercise of stock options | - | 1,821 | ||||||
| Proceeds from exercise of warrants | 875 | 15,001 | ||||||
| Net cash provided by (used in) financing activities | 268,018 | (208,178 | ) | |||||
| Net decrease in cash | (2,800,863 | ) | (2,347,689 | ) | ||||
| Cash at beginning of the year | 3,122,578 | 5,919,578 | ||||||
| Cash at end of the period | $ | 321,715 | $ | 3,571,889 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | 3,328 | $ | 26,321 | ||||
| Cash Paid for income taxes | $ | - | $ | - | ||||
| Non-Cash Transactions | ||||||||
| Insurance premium financed | $ | 220,354 | $ | - | ||||
| Note issued as SOSRx contribution | $ | 500,000 | $ | - | ||||
| Intangible asset contribution from non-controlling interest | $ | 792,500 | $ | - | ||||
Reconciliation
of Net Income (Loss) attributable to TRxADE HEALTH, Inc.,
to Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)
and
Adjusted EBITDA*
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net loss attributable to TRxADE Health, Inc. | $ | (503,003 | ) | $ | (1,301,748 | ) | $ | (2,546,913 | ) | $ | (4,531,543 | ) | ||||
| Add (deduct): | ||||||||||||||||
| Interest, net | 121,711 | 5,622 | 132,230 | 21,574 | ||||||||||||
| Depreciation and amortization | 21,493 | 1,750 | 41,691 | 5,250 | ||||||||||||
| EBITDA * | (359,799 | ) | (1,294,376 | ) | (2,372,992 | ) | (4,504,719 | ) | ||||||||
| Add (deduct): | ||||||||||||||||
| Bad debt recovery | (64,148 | ) | - | (164,148 | ) | - | ||||||||||
| Bad debt write off | - | 630,000 | - | 630,000 | ||||||||||||
| Loss on inventory investment | - | 1,225,141 | - | 1,225,141 | ||||||||||||
| Gain on disposal of asset | - | - | (4,100 | ) | - | |||||||||||
| Litigation expenses | - | - | 225,000 | - | ||||||||||||
| Stock-based compensation | 29,216 | 161,808 | 174,869 | 431,218 | ||||||||||||
| Adjusted EBITDA * | $ | (394,731 | ) | $ | 722,573 | $ | (2,141,371 | ) | $ | (2,218,360 | ) | |||||
* EBITDA and Adjusted EBITDA are non-GAAP financial measures. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. See also “Use of Non-GAAP Financial Information”, above.
Exhibit 99.2
