Exhibit 99.2
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
Date
of Report (Date of Earliest Event Reported):
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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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| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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 |
(Nasdaq Capital Market) |
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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an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
On October 25, 2021, TRxADE HEALTH, INC., (“Trxade” or the “Company”) issued a press release announcing and will hold a conference call and webcast at 5:00 p.m. Eastern time regarding, its financial results for the three and nine months ended September 30, 2021. A copy of the press release, which includes information on the conference call and webcast and a summary of such financial results is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein 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 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 October 25, 2021 | |
| 99.2 | TRxADE HEALTH, INC. – October 2021 PowerPoint Presentation | |
| 104 | Inline XBRL for the cover page of this Current Report on Form 8-K |
Forward Looking Statements
The press release and presentation furnished as Exhibit 99.1 and Exhibit 99.2 to this Current Report on Form 8-K, contain forward-looking statements within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and assumptions. These forward-looking statements 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, including, without limitation, that actual events and/or results may differ materially from those projected in such forward-looking statements. 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. 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 Note 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.trxadegroup.com, and specifically including the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2021. 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: October 25, 2021 | By: | /s/ Suren Ajjarapu |
| Name: | Suren Ajjarapu | |
| Title: | Chief Executive Officer | |
Exhibit 99.1
TRxADE HEALTH Reports Third Quarter 2021 Financial Results
Third Quarter 2021 Revenue Increased 34.3% over Second Quarter 2021
TAMPA, FL, October 25, 2021 — TRxADE HEALTH, INC. (NASDAQ: MEDS), 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 third quarter ended September 30, 2021.
Recent Operational Highlights:
| ● | TRxADE HEALTH continued to expand its drug procurement marketplace nationwide, adding approximately 250 new registered members in the third quarter, bringing the total registered members to over 12,950. |
| ● | Bonum Health, a TRxADE Company, launched pre-paid digital telemedicine passes, providing an innovative new way for uninsured consumers to gain access to vital healthcare services while concurrently streamlining the path for organizations to efficiently gift healthcare to those in need. |
| ● | Attended leading investor conferences nationwide, including the Colliers 5th Annual Investor Conference, the H.C. Wainwright 23rd Annual Global Investment Conference, the Benzinga Virtual Healthcare Conference and the LD Micro Main Event. |
Management Commentary
“We saw strong margin improvement as our revenue base returned to the core TRxADE pharmaceutical exchange platform in the third quarter, seeing a drop-off in the one-time personal protective equipment sales recognized in 2020, which were driven by the initial onset of the COVID-19 pandemic,” said Suren Ajjarapu, Chairman and Chief Executive Officer of TRxADE HEALTH. “Our nationwide footprint continues to grow and we have relentlessly focused on exciting new ways to expand proportional wallet-share within our large, growing network of registered users, while better enabling them to service their respect customers – the end-users, further growing their loyalty to their local retail pharmacy.
“Our telehealth subsidiary Bonum Health has continued to grow, building a foundation that we believe we can build upon for years to come – not only offering an advanced telehealth offering, but concurrently allowing consumers to retain their own healthcare data in a secure, compliant manner. This provides an exciting opportunity, leveraging our large, established national footprint of retail partners to drive growth.
“In summary, we are focusing new strategic partnerships to drive forward our core business while diversifying our revenue base and leveraging our existing strengths through Bonum Health. Taken as a whole, we believe we are building an incredibly compelling healthcare ecosystem – allowing consumers access to affordable healthcare while building an exciting value proposition for our shareholders,” concluded Ajjarapu.
Third Quarter 2021 Financial Summary
| ● | Revenues for the third quarter of 2021 were $2.6 million, as compared to $1.9 million for the second quarter of 2021, and $6.3 million in the same quarter last year. The decrease in revenue compared to last year was primarily a result of one-time, non-recurring sales of personal protective equipment (PPE) in 2020 related to the COVID-19 pandemic that did not continue in 2021. |
| ● | Gross profit in the third quarter of 2021 totaled $1.3 million, or 50.2% of revenues, compared to gross profit of $1.9 million, or 30.5% of revenues, in the same quarter last year. The increase in gross profit margin percentage was a result of fewer lower-margin PPE sales in 2021. |
| ● | Operating expenses in the third quarter of 2021 were $2.6 million, compared to $1.8 million in the same quarter last year, primarily as a result of IT development and marketing investments made in Bonum Health and a bad debt write-off of $630,000 (due to accounts receivable for certain PPE items which were deemed uncollectable). |
| ● | Net loss in the third quarter of 2021 was $(1.3) million, or $(0.16) per basic and diluted share outstanding, compared to a net profit of $0.1 million, or $0.02 per basic share outstanding, in the same quarter last year. The decrease was due in part to non-cash equity compensation expenses and the non-recurring write-down of the value of PPE inventory on-hand in accordance with GAAP accounting rules. |
| ● | Adjusted EBITDA, a non-GAAP financial measure, was $(1.2) million in the third quarter of 2021, compared to $0.7 million in the same quarter last year.1 |
| ● | Cash and cash equivalents were $3.6 million as of September 30, 2021, compared with $4.5 million as of June 30, 2021. |
1Adjusted EBITDA is a non-GAAP financial measure and is described below under “Use of Non-GAAP Financial Information” and is reconciled to its most directly comparable GAAP measure at the end of this release under “Reconciliation of Net Income (Loss) attributable to TRxADE HEALTH, INC., to Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA”.
Conference Call and Webcast
Management will host a conference call today, Monday, October 25, 2021, at 5:00 p.m. Eastern time to discuss TRxADE HEALTH’s third quarter 2021 financial results. The call will conclude with Q&A from participants.
To participate, please use the following information:
Q3 2021 Conference Call and Webcast
Date: Monday, October 25, 2021
Time: 5:00 p.m. Eastern time
U.S. Dial-in: 1-877-425-9470
International Dial-in: 1-201-389-0878
Conference ID: 13723384
Webcast: http://public.viavid.com/index.php?id=146615
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 November 25, 2021. To listen, call 1-844-512-2921 within the United States or 1-412-317-6671 when calling internationally and enter replay pin number 13723384. 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 (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 12,950+ members nationwide, fostering price transparency and under the Bonum Health brand, offering patient centric telehealth services. For info on TRxADE HEALTH, please visit the Company’s IR website at investors.trxadegroup.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 before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before stock-based compensation expense, loss on inventory investment and gain (loss) in equity investment. 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 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. 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 the adoption of our MedCheks app by partners and end-users, the apps of other competitors, including governments which may make certain apps mandatory or free, our ability to gain traction for our app in the marketplace, and the continued demand for our app; risks related to our operations not being profitable; 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; healthcare fraud; COVID-19, governmental responses thereto, economic downturns and possible recessions caused thereby; risks associated with the market for health passports, adoption thereof, consumer acceptance thereof, and changes in the market for such products; changes in laws or regulations relating to our operations; privacy laws; system errors; dependence on current management; our growth strategy; 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. 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:
Lucas Zimmerman
Director
MZ Group - MZ North America
(949) 259-4987
www.mzgroup.us
TRxADE HEALTH, INC.
Consolidated Balance Sheets
September 30, 2021, and December 31, 2020
(unaudited)
| September 30, 2021 | December 31, 2020 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | 3,571,889 | $ | 5,919,578 | ||||
| Accounts Receivable, net | 1,008,816 | 805,043 | ||||||
| Inventory | 94,822 | 1,257,754 | ||||||
| Prepaid Assets | 435,747 | 151,248 | ||||||
| Deferred Offering Costs | 78,000 | - | ||||||
| Other Receivables | - | 1,087,675 | ||||||
| Total Current Assets | 5,189,274 | 9,221,298 | ||||||
| Property Plant and Equipment, Net | 13,256 | 162,397 | ||||||
| Other Assets | ||||||||
| Deposits | 21,636 | 21,636 | ||||||
| Right of use leased assets | 289,935 | 387,371 | ||||||
| Total Assets | $ | 5,514,101 | $ | 9,792,702 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | 275,220 | $ | 256,829 | ||||
| Accrued Liabilities | 316,081 | 219,256 | ||||||
| Current Portion Lease Liabilities | 63,560 | 131,153 | ||||||
| Customer Deposits | - | 10,000 | ||||||
| Notes Payables– Related Party | - | 225,000 | ||||||
| Total Current Liabilities | 654,861 | 842,238 | ||||||
| Long Term Liabilities | ||||||||
| Other Long-Term Liabilities — Leases | 241,945 | 271,306 | ||||||
| Total Liabilities | 896,806 | 1,113,544 | ||||||
| Stockholders’ Equity | ||||||||
| Series A Preferred Stock, $0.00001 par value shares authorized; none issued and outstanding as of September 30, 2021, and December 31, 2020 | - | - | ||||||
| Common Stock, $0.00001 par value; 100,000,000 shares authorized; 8,166,457 and 8,093,199 shares issued and outstanding as of September 30, 2021, and December 31, 2020, respectively | 82 | 81 | ||||||
| Additional Paid-in Capital | 20,080,310 | 19,610,631 | ||||||
| Accumulated Deficit | (15,463,097 | ) | (10,931,554 | ) | ||||
| Total Stockholders’ Equity | 4,617,295 | 8,679,158 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 5,514,101 | $ | 9,792,702 | ||||
TRxADE HEALTH, INC.
Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2021, and 2020
(unaudited)
| Three months ended | Nine months ended | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues | $ | 2,550,046 | $ | 6,332,269 | $ | 7,501,535 | $ | 15,128,226 | ||||||||
| Cost of Sales | 1,269,005 | 4,402,967 | 3,995,792 | 9,554,016 | ||||||||||||
| Gross Profit (Loss) | 1,281,041 | 1,929,302 | 3,505,743 | 5,574,210 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Loss on Inventory Investment | 1,285 | - | 1,226,426 | - | ||||||||||||
| General and Administrative | 2,575,882 | 1,783,481 | 6,789,286 | 5,775,439 | ||||||||||||
| Operating Income (Loss) | (1,296,126 | ) | 145,821 | (4,509,969 | ) | (201,229 | ) | |||||||||
| Interest Expense | (5,622 | ) | (7,430 | ) | (21,574 | ) | (22,664 | ) | ||||||||
| Net Income (Loss) | $ | (1,301,748 | ) | $ | 138,391 | $ | (4,531,543 | ) | $ | (223,893 | ) | |||||
| Net (Loss) Income per Common Share – Basic and Diluted: | $ | (0.16 | ) | $ | 0.02 | $ | (0.56 | ) | $ | (0.03 | ) | |||||
| Weighted average Common Shares Outstanding – Basic and Diluted | 8,163,522 | 8,063,043 | 8,126,689 | 7,572,954 | ||||||||||||
TRxADE HEALTH, INC.
Consolidated Statements of Cash Flows
For the Nine months ended September 30, 2021, and 2020
(unaudited)
| 2021 | 2020 | |||||||
| Operating Activities: | ||||||||
| Net Income (Loss) | $ | (4,531,543 | ) | $ | (223,893 | ) | ||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Depreciation Expense | 5,250 | 3,750 | ||||||
| Options expense | 191,305 | 372,900 | ||||||
| Warrant Expense | 21,640 | 149,158 | ||||||
| Common Stock Issued for Services | 239,913 | 1,178,113 | ||||||
| Bad Debt Expense | 616,215 | 35,539 | ||||||
| Loss on Inventory Investments | 1,226,426 | 137,155 | ||||||
| Amortization of right of use asset | 97,436 | 60,600 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts Receivable | (819,988 | ) | (277,971 | ) | ||||
| Prepaid Assets and other Current Assets | (284,499 | ) | (150,219 | ) | ||||
| Inventory | 1,162,932 | (1,727,482 | ) | |||||
| Deferred Offering Costs | (78,000 | ) | - | |||||
| Deposits for Inventory Purchases | - | (1,081,250 | ) | |||||
| Other Receivables | 5,140 | - | ||||||
| Lease Liability | (96,954 | ) | (64,522 | ) | ||||
| Accounts Payable | 18,391 | (98,422 | ) | |||||
| Customer Deposits | (10,000 | ) | - | |||||
| Accrued Liabilities and Other Liabilities | 96,825 | 187,293 | ||||||
| Net Cash used in operating activities | (2,139,511 | ) | (1,499,251 | ) | ||||
| Investing Activities: | ||||||||
| Purchase of Fixed Assets | - | (23,505 | ) | |||||
| Net Cash used in Investing activities | - | (23,505 | ) | |||||
| Financing Activities: | ||||||||
| Repayment of Promissory Notes – Related Party | (225,000 | ) | - | |||||
| Stock Issuance Costs | - | (732,355 | ) | |||||
| Proceeds from exercise of Warrants | 15,001 | 36,255 | ||||||
| Proceeds from exercise of Stock Options | 1,821 | 501 | ||||||
| Proceeds from Issuance of Common Stock | - | 5,994,424 | ||||||
| Net Cash provided by (used in) financing activities | (208,178 | ) | 5,298,825 | |||||
| Net increase (decrease) in Cash | (2,347,689 | ) | 3,776,069 | |||||
| Cash at Beginning of the Period | 5,919,578 | 2,871,694 | ||||||
| Cash at End of the Period | $ | 3,571,889 | $ | 6,647,763 | ||||
| Supplemental Cash Flow Information | ||||||||
| Cash Paid for Interest | $ | 26,321 | $ | 5,789 | ||||
| Cash Paid for Income Taxes | $ | - | $ | - | ||||
| Non-Cash Transactions | ||||||||
Remeasurement of ROU Assets and Lease Liability for Nonrenewal of Lease | $ | - | $ | 384,110 | ||||
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 September 30, | For the nine months ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net Income (loss) attributable to TRxADE HEALTH, INC. | $ | (1,301,748 | ) | $ | 138,391 | $ | (4,531,543 | ) | $ | (223,893 | ) | |||||
| Add (deduct): | ||||||||||||||||
| Interest, net | 5,622 | 7,430 | 21,574 | 22,664 | ||||||||||||
| Depreciation and amortization | 1,750 | 1,250 | 5,250 | 3,750 | ||||||||||||
| EBITDA | (1,294,376 | ) | 147,071 | (4,504,719 | ) | (197,479 | ) | |||||||||
| Add (deduct): | ||||||||||||||||
| Loss on Inventory Investment | 1,285 | - | 1,226,426 | - | ||||||||||||
| Loss on Uncollectible Notes Receivable | 630,000 | - | 630,000 | - | ||||||||||||
| Stock-based compensation | 117,065 | 524,018 | 452,858 | 1,700,170 | ||||||||||||
| Adjusted EBITDA * | $ | (546,026 | ) | $ | 671,089 | $ | (2,195,435 | ) | $ | 1,502,691 | ||||||
| * | 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 Measures”, above. |
Exhibit 99.2