Scienture Holdings, Inc 8-K/A, filed Jul 26, 2022
Scienture Holdings, Inc. (SCNX)
About this 8-K/A
Scienture Holdings, Inc filed this 8-K/A on July 26, 2022, reporting on events of July 25, 2022.
Items reported
- Item 2.02: Financial results
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
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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EXPLANATORY NOTE
TRxADE HEALTH, INC. (the “Company”) is filing this Amendment No. 1 to its Current Report on Form 8-K filed with the Securities and Exchange Commission (SEC) on July 25, 2022 (“Original Form 8-K”) in order to correct certain typographical errors in the earnings release that was furnished as Exhibit 99.1 to the Original Form 8-K and the presentation which was furnished as Exhibit 99.2 to the Original Form 8-K. Specifically, the table entitled “Reconciliation of Net Income (Loss) attributable to TRxADE HEALTH, INC., to Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA” in both the press release and presentation, included errors in the total of depreciation and amortization line items for (a) the three months ended June 30, 2022, which should have totaled $20,198 instead of $9,470 as originally reported — As a result of that error, the EBITDA and Adjusted EBITDA calculations for the three months ended June 30, 2022, were also $10,728 lower (i.e., showed a loss that was $10,728 greater) than they should have been; and (b) the six months ended June 30, 2022, which should have totaled $24,170 instead of $9,470 as originally reported —As a result of that error, the EBITDA and Adjusted EBITDA calculations for the six months ended June 30, 2022, were also $14,700 lower (i.e., showed a loss that was $14,700 greater) than they should have been.
By this Amendment No. 1 to the Original Form 8-K, the Company is amending Items 2.01 and 8.01 and restating Item 9.01 thereof to include the corrected versions of 99.1 and 99.2.
Item 2.02 Results of Operations and Financial Condition.
On July 25, 2022, TRxADE HEALTH, INC. (“TRxADE” or the “Company”) issued a press release announcing it would hold a conference call and webcast at 5:00 p.m. Eastern time on July 25, 2022, regarding its financial results for the three and six months ended June 30, 2022.
As discussed above, the press release contained certain errors and on July 26, 2022, the Company filed a corrected version of the press release.
A copy of the press release as corrected 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 presentation, discussed below. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached press release and presentation.
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** | Corrected Press Release of TRxADE HEALTH, INC. dated July 26, 2022 (correcting July 25, 2022 Press Release) | |
| 99.2** | Corrected TRxADE HEALTH, Inc. – Q2 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 June 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: July 26, 2022 | By: | /s/ Suren Ajjarapu |
| Name: | Suren Ajjarapu | |
| Title: | Chief Executive Officer | |
Exhibit 99.1
Correction Notice to TRxADE HEALTH Press Release Reporting Second Quarter Revenue Growth of 73% and Q2 2022 Financial Results
Continues Nationwide Expansion of Breakthrough Digital Healthcare Services IT Platform
TRxADE HEALTH, INC. (NASDAQ:MEDS) announced today that its press release issued under the headline “TRxADE HEALTH Reports Second Quarter Revenue Growth of 73% and Q2 2022 Financial Results” on July 25, 2022, included errors in the disclosure of depreciation and amortization for both the three and six months ended June 30, 2022, in the table entitled “Reconciliation of Net Income (Loss) attributable to TRxADE HEALTH, INC., to Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA”. A corrected form of that table is included at the end of this release and the prior press release as corrected is set forth in its entirety below.
TAMPA, FL, July 26, 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., announced on July 25, 2022, its financial results for the 2022 second quarter (Q2) ended June 30, 2022.
Second Quarter 2022 and Subsequent Operational Highlights
TRxADE continued to expand the TRxADE drug procurement marketplace nationwide, adding 319 new registered members in Q2 2022 and 685 new registered members during the first six months of 2022, bringing the total registered members to approximately 13,815+ at June 30, 2022.
TRxADE announced earlier this month that its wholly-owned pharmaceutical wholesale business Integra Pharma Solutions, LLC (d/b/a TRxADE Prime) (“Integra”) secured a preferred distribution agreement with GALT Pharmaceuticals, LLC. Integra, which distributes generic and brand medications directly in 34 states through its warehouse, has now added single-source and multi-source products directly from GALT Pharmaceuticals, which further adds to the mission of helping independent pharmacies and its members access top medication products as part of the TRxADE HEALTH network.
“We are pleased to have entered this partnership between Integra and GALT Pharmaceuticals, as it will diversify our product service offerings and renew our commitment to the independent pharmacies we serve. In an everchanging healthcare landscape, equipping our pharmacies with a robust catalog, creates value,” said Mr. Suren Ajjarapu, Chairman and Chief Executive Officer of TRxADE.
Management Commentary
Mr. Ajjarapu, commented, “2022 is an exciting time for TRxADE, as we continue to position ourselves to create sustainable value for our stockholders. I am pleased with the growth we have experienced in our TRxADE and TRxADE Prime platforms. We continue to achieve several key milestones in our internal roadmap with a focus on innovation and development through our various complementary growth opportunities.”
Second Quarter 2022 Financial Summary
Revenues for the second quarter of 2022, increased 73% to $3.3 million, compared to revenue of $1.9 million in the same quarter last year. The increase in revenue was primarily due to revenue generated by the TRxADE Platform and TRxADE Prime.
Gross profit increased to $1.2 million in the second quarter of 2022 compared to $0.8 million for the same period in 2021. As a percent of revenue, gross profit decreased to 36% in the second quarter of 2022, as compared to 44% in the second quarter of 2021. The decrease in gross profit was primarily attributable to higher costs associated with TRxADE Prime transactions.
Operating expenses in the second quarter of 2022 were $2.3 million, compared to $3.4 million in the same quarter last year.
Net loss in the second quarter of 2022 was ($1.1) million, or ($0.13) per basic and diluted share outstanding, compared to a net loss of ($2.6) million, or ($0.32) per basic and diluted share outstanding, in the same quarter last year.
Adjusted EBITDA, a non-GAAP financial measure was ($1.1) million for the second quarter of 2022, compared to ($1.2) 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 six-month period ended June 30, 2022, the TRxADE Platform increased its registered users by 658. For the three-month period ended June 2022, new registrations were 339 compared to 223 for the same period in 2021. Total registered users increased 8% to 13,816 from 12,762, as of June 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 June 30, 2022 compared to the same period in 2021:
| Processed Sales Volume | 21 | % |  | |||||
| Total Revenue | 11 | % | | |||||
| Registered Users | 8 | % | | |||||
| Unique Products listed | 40 | % | |
For the three-month period ended June 30, 2022, compared to the same period in 2021, Integra Pharma Solutions, LLC (“TRxADE Prime”) increased processed sales volume over 430% and increased unique buyers on the TRxADE Prime platform by 130%.
The table below summarizes the key metrics that management evaluated in relation to the activity for TRxADE Prime for the three-month period ended June 30, 2022, compared to the same period in 2021:
| Unique Buyers | 135 | % |  | |||||
| Orders | 330 | % | | |||||
| Total Units Sold | 713 | % | | |||||
| Processed Sales | 435 | % | |
Conference Call and Webcast
Management will host a conference call on Monday, July 25, 2022, at 5:00 p.m. Eastern time to discuss TRxADE’s second quarter 2022 financial results. The call will conclude with Q&A from participants. To participate, please use the following information:
Q2 2022 Conference Call and Webcast
Date: Monday, July 25, 2022
Time: 5:00 p.m. Eastern time
U.S. Dial-in: 1-877-425-9470
International Dial-in: 1-201-389-0878
Conference ID: 13731433
Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1559222&tp_key=9bba8373c4
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 August 25, 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 13731433. 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 13,815+ 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, 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 than those expressed or implied in such statements. These risks include risks relating to agreements with third parties, including 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 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 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 “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 June 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:
IR@trxade.com
Investors.trxadegroup.com
TRxADE HEALTH, INC.
Consolidated Balance Sheets
June 30, 2022, and December 31, 2021
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | 962,227 | $ | 3,122,578 | ||||
| Accounts Receivable, net | 1,019,068 | 978,973 | ||||||
| Inventory | 127,139 | 56,279 | ||||||
| Prepaid Assets | 363,623 | 216,414 | ||||||
| Inventory Deposits | 875,321 | - | ||||||
| Total Current Assets | 3,347,378 | 4,374,244 | ||||||
| Property Plant and Equipment, Net | 70,857 | 98,751 | ||||||
| Intangible Assets and Capitalized Software, net | 1,057,972 | - | ||||||
| Deposits | 49,031 | 60,136 | ||||||
| Right of use Leased Assets | 1,147,222 | 1,233,033 | ||||||
| Total Assets | $ | 5,672,460 | $ | 5,766,164 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | 1,195,192 | 477,028 | ||||||
| Accrued Liabilities | 437,285 | 270,437 | ||||||
| Other Current Liabilities | 14,199 | - | ||||||
| Contingent Funding Liabilities | 550,000 | - | ||||||
| Current Portion Lease Liabilities | 183,066 | 178,561 | ||||||
| Notes Payable— Related Party | 166,667 | - | ||||||
| Total Current Liabilities | 2,546,409 | 926,026 | ||||||
| Long Term Liabilities | ||||||||
| Other Long-Term Liabilities — Leases | 988,185 | 1,069,965 | ||||||
| Notes Payable | 333,333 | - | ||||||
| Total Liabilities | 3,867,927 | 1,995,991 | ||||||
| Stockholders’ Equity | ||||||||
| Series A Preferred Stock, $0.00001 par value; 10,000,000 shares authorized; none issued and outstanding, as of June 30, 2022 and December 31, 2021. | - | - | ||||||
| Common Stock, $0.00001 par value; 100,000,000 shares authorized; 8,181,041 and 8,166,457 shares issued and outstanding, as of June 30, 2022 and December 31, 2021, respectively | 82 | 82 | ||||||
| Additional Paid-in Capital | 20,112,485 | 20,017,528 | ||||||
| Retained Earnings (Deficit) | (18,291,347 | ) | (16,247,437 | ) | ||||
| Total | 1,821,220 | 3,770,173 | ||||||
| Non-Controlling Interest in Subsidiary | (16,687 | ) | - | |||||
| Total Stockholders’ Equity | 1,804,533 | 3,770,173 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 5,672,460 | $ | 5,766,164 | ||||
TRxADE HEALTH, INC.
Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 2022, and 2021
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues | $ | 3,278,729 | $ | 1,898,254 | $ | 6,519,001 | $ | 4,951,489 | ||||||||
| Cost of Sales | 2,107,815 | 1,056,863 | 4,012,384 | 2,726,787 | ||||||||||||
| Gross Profit | 1,170,914 | 841,391 | 2,506,617 | 2,224,702 | ||||||||||||
| Operating Expense | ||||||||||||||||
| Loss on Inventory Investment | - | 1,225,141 | - | 1,225,141 | ||||||||||||
| Wage and Salary Expense | 1,178,124 | 922,787 | 2,248,082 | 1,862,421 | ||||||||||||
| Professional Fees | 111,057 | 286,987 | 212,066 | 551,806 | ||||||||||||
| Accounting and Legal Expense | 139,858 | 203,712 | 376,079 | 363,759 | ||||||||||||
| Technology Expense | 298,062 | 124,583 | 543,847 | 339,473 | ||||||||||||
| General and Administrative | 546,919 | 647,769 | 1,198,221 | 1,095,945 | ||||||||||||
| 2,274,020 | 3,410,979 | 4,578,295 | 5,438,545 | |||||||||||||
| Operating Loss | (1,103,106 | ) | (2,569,588 | ) | (2,071,678 | ) | (3,213,843 | ) | ||||||||
| Gain on Disposal of Asset | - | - | 4,100 | - | ||||||||||||
| Interest Expense | (9,155 | ) | (8,688 | ) | (10,519 | ) | (15,952 | ) | ||||||||
| Net Loss | $ | (1,083,763 | ) | $ | (2,578,276 | ) | $ | (2,078,097 | ) | $ | (3,229,795 | ) | ||||
| Net loss attributable to TRxADE Health, Inc. | (1,076,268 | ) | (2,578,276 | ) | (2,043,910 | ) | (3,229,795 | ) | ||||||||
| Net loss attributable to non-controlling interests | (28,498 | ) | - | (34,187 | ) | - | ||||||||||
| Net Loss per Common Share — Basic and Diluted | $ | (0.13 | ) | (0.32 | ) | $ | (0.25 | ) | $ | (0.40 | ) | |||||
| Weighted average Common Shares Outstanding - Basic and Diluted | 8,181,041 | 8,122,206 | 8,179,591 | 8,107,864 | ||||||||||||
TRxADE HEALTH, INC.
Consolidated Statements of Cash Flows
For the Three and Six months ended June 30, 2022, and 2021
(unaudited)
| 2022 | 2021 | |||||||
| Operating Activities: | ||||||||
| Net Loss | $ | (2,078,097 | ) | $ | (3,229,795 | ) | ||
| Adjustments to reconcile net loss to net cash used in | ||||||||
| Operating activities: | ||||||||
| Depreciation Expense | 8,994 | 3,500 | ||||||
| Options Expense | 49,777 | 137,130 | ||||||
| Common Stock Issued for Services | 44,305 | 198,663 | ||||||
| Bad Debt Recovery | (98,841 | ) | (10,000 | ) | ||||
| Loss on Inventory Investments | - | 1,225,141 | ||||||
| Gain on sale of asset | (4,100 | ) | - | |||||
| Amortization of Right of Use Assets | 85,811 | 64,150 | ||||||
| Amortization of Intangible Assets | 14,700 | - | ||||||
| Changes in Operating assets and liabilities: | ||||||||
| Accounts Receivable, net | 58,746 | (688,994 | ) | |||||
| Prepaid Assets and Deposits | 84,250 | (221,782 | ) | |||||
| Inventory | (70,860 | ) | 1,118,637 | |||||
| Inventory Deposits | (875,321 | ) | - | |||||
| Other Receivables | - | 6,425 | ||||||
| Lease Liability | (77,275 | ) | (63,829 | ) | ||||
| Accounts Payable | 718,164 | (88,455 | ) | |||||
| Accrued Liabilities | (53,506 | ) | 157,793 | |||||
| Current liabilities | 14,199 | (10,000 | ) | |||||
| Net Cash Used in Operating activities | (2,179,054 | ) | (1,401,416 | ) | ||||
| Investing Activities: | ||||||||
| Sale of Fixed Assets | 23,000 | - | ||||||
| Investment in Capitalized Software | (280,172 | ) | ||||||
| Net Cash Provided by Investing activities | (257,172 | ) | - | |||||
| Financing Activities: | ||||||||
| Distributions to Non-Controlling Interest | (275,000 | ) | - | |||||
| Proceeds from Sale of Future Revenue | 550,000 | - | ||||||
| Proceeds from Exercise of Warrants | 875 | 1,821 | ||||||
| Net Cash Provided by financing activities | 275,875 | 1,821 | ||||||
| Net Increase (Decrease) in Cash | (2,160,351 | ) | (1,399,595 | ) | ||||
| Cash at beginning of the Period | 3,122,578 | 5,919,578 | ||||||
| Cash at End of the Period | $ | 962,227 | $ | 4,519,983 | ||||
| Supplemental Cash Flow Information | ||||||||
| Cash Paid for Interest | $ | 3,328 | $ | 4,702 | ||||
| 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*
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net Income (Loss) attributable to TRxADE HEALTH, INC. | $ | (1,112,261 | ) | $ | (2,578,276 | ) | $ | (2,078,097 | ) | $ | (3,229,795 | ) | ||||
| Add (deduct): | ||||||||||||||||
| Interest, net | 9,155 | 8,688 | 10,519 | 15,952 | ||||||||||||
| Depreciation and amortization | 20,198 | 1,750 | 24,170 | 3,500 | ||||||||||||
| EBITDA | $ | (1,082,908 | ) | $ | (2,567,838 | ) | $ | (2,043,408 | ) | $ | (3,210,343 | ) | ||||
| Add (deduct): | ||||||||||||||||
| Loss on Inventory Investment | - | 1,225,141 | - | 1,225,141 | ||||||||||||
| Litigation Expenses | - | - | 225,000 | - | ||||||||||||
| Stock-based compensation | 29,216 | 161,808 | 94,082 | 335,793 | ||||||||||||
| Adjusted EBITDA * | $ | (1,053,692 | ) | $ | (1,180,889 | ) | $ | (1,724,326 | ) | $ | (1,649,409 | ) | ||||
* 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
