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TRxADE HEALTH(MEDS) - 2024 Q1 - Quarterly Report
MEDSTRxADE HEALTH(MEDS)2024-06-26 13:50

Acquisition and Disposition - The Company acquired 100% of Superlatus for a total fair value of 225,000,169,consistingof136,441sharesofcommonstockand306,855sharesofSeriesBPreferredStock[20].−TheCompanyrecognizedagainonthedispositionofbusinessamountingto225,000,169, consisting of 136,441 shares of common stock and 306,855 shares of Series B Preferred Stock[20]. - The Company recognized a gain on the disposition of business amounting to 29,685,946, included in income from discontinued operations[24]. - As of March 31, 2024, the total carrying amount of assets and liabilities acquired in the Superlatus transaction was 2,083,743[21].−TheCompanyissuedapromissorynotetoPerfectDay,Inc.for2,083,743[21]. - The Company issued a promissory note to Perfect Day, Inc. for 4,400,000 as part of the acquisition consideration[35]. - The Company sold all equity shares of Superlatus Inc. for a nominal price of 1.00,resultinginthelossof1.00, resulting in the loss of 2,083,742 included in income from discontinued operations[50]. - The company completed the acquisition of Superlatus on July 31, 2023, with a merger consideration valued at 12,500,089[135].−ThemergerconsiderationforSuperlatusshareholderswasadjustedto136,441sharesofcommonstockand15,759sharesofSeriesBPreferredStock,valuedat12,500,089[135]. - The merger consideration for Superlatus shareholders was adjusted to 136,441 shares of common stock and 15,759 shares of Series B Preferred Stock, valued at 12,500,089 at the time of closing[200]. Financial Performance - Total product revenue for the three months ended March 31, 2024, was 476,356,withtotalservicerevenueof476,356, with total service revenue of 16,960, resulting in total revenue of 493,316[53].−TotalrevenuesforQ12024were493,316[53]. - Total revenues for Q1 2024 were 0, down from 493,316inQ12023,representinga100493,316 in Q1 2023, representing a 100% decrease[122]. - Operating expenses surged to 5,496,471 in Q1 2024, a 525% increase from 879,309inQ12023,drivenbya1902879,309 in Q1 2023, driven by a 1902% increase in general and administrative expenses[122]. - Net loss from operations for Q1 2024 was (6,636,922), compared to (1,136,637)inQ12023,markinga484(1,136,637) in Q1 2023, marking a 484% increase in losses[122]. - Net income from discontinued operations rose to 27,882,955 in Q1 2024, up from 458,684inQ12023,reflectinga5979458,684 in Q1 2023, reflecting a 5979% increase due to the disposal of Trxade, Inc.[125]. - The company reported no revenues for Q1 2024, a decrease of 493,316 compared to the same period in 2023[169]. - The company reported a net income of 21,246,033forMarch2024,contrastingwithanetlossof21,246,033 for March 2024, contrasting with a net loss of 677,953 in the same period last year[215]. Cash Flow and Liquidity - Cash used in operations for Q1 2024 was (10,189,673),asignificantincreasefrom(10,189,673), a significant increase from (931,531) in Q1 2023, primarily due to shares issued for services valued at 4,450,919andincreasedexpenses[121].−CashbalanceasofMarch31,2024,was4,450,919 and increased expenses[121]. - Cash balance as of March 31, 2024, was 3,498,812, a dramatic increase of 968108% from 361onDecember31,2023[139].−CashprovidedbyinvestingactivitiesforQ12024was361 on December 31, 2023[139]. - Cash provided by investing activities for Q1 2024 was 27,432,589, a substantial increase from 333,197inQ12023,primarilyduetothedispositionofTrxade,Inc.andSuperlatus,Inc.[167].−CashusedinfinancingactivitiesforQ12024was333,197 in Q1 2023, primarily due to the disposition of Trxade, Inc. and Superlatus, Inc.[167]. - Cash used in financing activities for Q1 2024 was (13,896,011), a decrease from cash provided of 681,257inQ12023,largelyduetorepaymentofcontingentfundingliabilityanddividendpayments[144].−Thecompanydeclaredaspecialcashdividendof681,257 in Q1 2023, largely due to repayment of contingent funding liability and dividend payments[144]. - The company declared a special cash dividend of 8.00 per share, totaling 12,671,072,tobepaidonMarch22,2024,fundedbyproceedsfromthesaleofTrxadeassets[118].ExpensesandLiabilities−Generalandadministrativeexpensesroseto12,671,072, to be paid on March 22, 2024, funded by proceeds from the sale of Trxade assets[118]. Expenses and Liabilities - General and administrative expenses rose to 4,700,840 in Q1 2024, compared to 248,021inQ12023,mainlyduetostock−basedcompensation[147].−Thecompanyrecordedtotalleaseexpensesof248,021 in Q1 2023, mainly due to stock-based compensation[147]. - The company recorded total lease expenses of 20,925 for the three months ended March 31, 2024, compared to 81,024forthesameperiodin2023[103].−Currentliabilitiesdecreasedby7481,024 for the same period in 2023[103]. - Current liabilities decreased by 74% to 2,951,387 as of March 31, 2024, down from 11,556,355onDecember31,2023[139].−Thecompanyhassubstantialdoubtaboutitsabilitytocontinueasagoingconcernduetotheneedforadditionalcapital,whichmaynotbeavailableonfavorableterms[196].StockandShareholderInformation−Thecompanyissued470,482sharesofcommonstockforservices,withafairvalueof11,556,355 on December 31, 2023[139]. - The company has substantial doubt about its ability to continue as a going concern due to the need for additional capital, which may not be available on favorable terms[196]. Stock and Shareholder Information - The company issued 470,482 shares of common stock for services, with a fair value of 4,450,919 included in general and administrative expenses[40]. - The weighted average common shares outstanding increased to 1,036,756 from 670,716 year-over-year, reflecting potential dilution[215]. - The company has not repurchased any shares of common stock during the first quarter of 2024[192]. Internal Controls and Compliance - The company does not expect its disclosure controls and procedures to prevent or detect all errors and fraud, indicating a need for ongoing evaluation and improvement[155]. - The company has not fully implemented necessary internal controls, leading to material weaknesses in financial reporting processes[180]. - The company is currently not in compliance with Nasdaq's continued listing standards, which may affect its ability to maintain its listing on the Nasdaq Capital Market[198]. Future Outlook and Strategy - The company anticipates its future capital resources will primarily consist of cash generated from operations, remaining cash balances, borrowings, and additional funds raised through sales of debt and/or equity securities[115]. - The company plans to continue operational expansions on its Trxade Prime platforms and explore strategic transactions for its business-to-consumer subsidiaries[140]. - The company plans to continue using existing marketing and management strategies while exploring strategic transactions and potential acquisitions[165]. - The company may need to raise additional capital or secure debt funding to support ongoing operations, which could lead to significant dilution for existing stockholders[187].