What changed in this filing

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Item 1. Business

2022-03-28 compared with 2021-03-29 · 575 added, 687 removed, 111 unchanged (92% of the section changed)

information included in this Annual Report on Form 10-K should be read in conjunction with the consolidated financial statements

and related notes in “

Financial Statements and Supplemental Data ”

of this Report.

see the “

Glossary ”

above for a list of abbreviations and definitions used throughout this Report.

information included in this Annual Report on Form 10-K should be read in conjunction with the consolidated financial statements and

related notes in “ Item 8.

Financial Statements and Supplemental Data ” of this Report.

see the “ Glossary ” above for a list of abbreviations and definitions used throughout this Report.

logo and some of our trademarks and tradenames are used in this Report.

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marks that are the property of others.

Solely for convenience, trademarks, tradenames and service marks referred to in this Report

may appear without the ®, ™

and SM symbols.

References to our trademarks, tradenames and service marks are not intended

to indicate in any way that we will not assert to the fullest extent under applicable law our rights or the rights of the applicable

licensors if any, nor that respective owners to other intellectual property rights will not assert, to the fullest extent under

applicable law, their rights thereto.

We do not intend the use or display of other companies’

trademarks and trade names

to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

market data and certain other statistical information used throughout this Report are based on independent industry publications,

reports by market research firms or other independent sources that we believe to be reliable sources.

Industry publications and

third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to

be reliable, although they do not guarantee the accuracy or completeness of such information.

We are responsible for all of the

disclosures contained in this Report, and we believe these industry publications and third-party research, surveys and studies

are reliable.

While we are not aware of any misstatements regarding any third-party information presented in this Report, their

estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties,

and are subject to change based on various factors, including those discussed under the section entitled “

Risk Factors ”

beginning on page 19 of this Report.

These and other factors could cause our future performance to differ materially from our

assumptions and estimates.

Some market and other data included herein, as well as the data of competitors as they relate to Trxade

Group, Inc., is also based on our good faith estimates.

Solely for convenience, trademarks, tradenames and service marks referred to in this Report may

appear without the ®, ™ and SM symbols.

References to our trademarks, tradenames and service marks are not intended to indicate

in any way that we will not assert to the fullest extent under applicable law our rights or the rights of the applicable licensors if

any, nor that respective owners to other intellectual property rights will not assert, to the fullest extent under applicable law, their

rights thereto.

We do not intend the use or display of other companies’ trademarks and trade names to imply a relationship with,

or endorsement or sponsorship of us by, any other companies.

market data and certain other statistical information used throughout this Report are based on independent industry publications, reports

by market research firms or other independent sources that we believe to be reliable sources.

Industry publications and third-party research,

surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do

not guarantee the accuracy or completeness of such information.

We are responsible for all of the disclosures contained in this Report,

and we believe these industry publications and third-party research, surveys and studies are reliable.

While we are not aware of any

misstatements regarding any third-party information presented in this Report, their estimates, in particular, as they relate to projections,

involve numerous assumptions, are subject to risks and uncertainties, and are subject to change based on various factors, including those

discussed under the section entitled “ Risk Factors ” beginning on page 19 of this Report.

These and other factors could

cause our future performance to differ materially from our assumptions and estimates.

Some market and other data included herein, as

well as the data of competitors as they relate to TRxADE HEALTH, INC., is also based on our good faith estimates.

fiscal year ends on December 31st.

Interim results are presented on a quarterly basis for the quarters ended March 31, June 30,

and September 30th, the first quarter, second quarter and third quarter, respectively, with the quarter ending December 31st being

referenced herein as our fourth quarter.

Fiscal 2020 means the year ended December 31, 2020, whereas fiscal 2019 means the year

ended December 31, 2019.

the context requires otherwise, references to the “

Company, ”

Trxade ”, “

Trxade Group ”

Trxade Group, Inc.

refer specifically to Trxade Group, Inc.

Interim results are presented on a quarterly basis for the quarters ended March 31st, June 30th, and

September 30th, the first quarter, second quarter and third quarter, respectively, with the quarter ending December 31st being referenced

herein as our fourth quarter.

Fiscal 2021 means the year ended December 31, 2021, whereas fiscal 2020 means the year ended December 31,

the context requires otherwise, references to the “ Company, ” “ we, ” “ us, ” “ our, ”

“ Trxade ”, “ Trxade Group ” and “ TRxADE HEALTH, INC.

” refer specifically to TRxADE

and its consolidated subsidiaries.

addition, unless the context otherwise requires and for the purposes of this Report only:

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

or the “

Commission ”

refers to the United States Securities and Exchange Commission;

refers to the Securities Act of 1933, as amended.

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

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

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

You Can Find Other Information

file annual, quarterly, and current reports, proxy statements and other information with the SEC.

Our SEC filings are available

to the public over the Internet at the SEC’s website at www.sec.gov and are available for download, free of charge,

soon after such reports are filed with or furnished to the SEC, on the “

MEDS ,”

SEC Filings ”

page of our website at www.rx.trxade.com .

Copies of documents filed by us

with the SEC are also available from us without charge, upon oral or written request to our Secretary, who can be contacted at

the address and telephone number set forth on the cover page of this Report.

address i s www.rx.trxade.com .

The information on, or that may be accessed

through, our website is not incorporated by reference into this Report and should not be considered a part of this Report.

Our SEC filings are available to the

public over the Internet at the SEC’s website at www.sec.gov and are available for download, free of charge, soon after

such reports are filed with or furnished to the SEC, on the “ NASDAQ:

MEDS ,” “ SEC Filings ” page

of our website at www.rx.trxade.com .

Copies of documents filed by us with the SEC

are also available from us without charge, upon oral or written request to our Secretary, who can be contacted at the address and telephone

number set forth on the cover page of this Report.

Our website addresses are www.rx.trxade.com

www.trxadegroup.com , www.rx.trxade.com , www.bonumhealth.com , www.comsprx.com , and www.rxintegra.com .

Information on our websites is not incorporated by reference into this Form 10-K.

The information

on, or that may be accessed through, our website is not incorporated by reference into this Report and should not be considered a part

of this Report.

AND ORGANIZATIONAL HISTORY

Company was incorporated in Delaware on July 15, 2005, as “

Bluebird Exploration Company ”

Bluebird ”).

Company was incorporated in Delaware on July 15, 2005, as “ Bluebird Exploration Company ” (“ Bluebird ”).

Bluebird was originally formed to engage in the exploitation of mineral properties.

In December 2008, Bluebird changed its name

Xcellink International, Inc.

XCEL ”), and subsequently announced that its business

plan was being expanded to include the development and marketing of platform-independent customer-centric payment systems and

methodologies.

XCEL was unable to raise the funds necessary to implement its business strategy, never generated any revenue and

was reporting as a “

shell ”

On January 9, 2014, Trxade Group, Inc., a privately held Nevada corporation,

merged with and into XCEL, and XCEL changed its name to “

In December 2008, Bluebird changed its name to “ Xcellink

International, Inc.

” (“ XCEL ”), and subsequently announced that its business plan was being expanded to include

the development and marketing of platform-independent customer-centric payment systems and methodologies.

XCEL was unable to raise the

funds necessary to implement its business strategy, never generated any revenue and was reporting as a “ shell ” corporation.

On January 9, 2014, Trxade Group, Inc., a privately held Nevada corporation, merged with and into XCEL, and XCEL changed its name to

“ Trxade Group, Inc.

LLC, a Nevada limited liability company (“

PharmaCycle ”), was formed in August 2010 by Prashant Patel, our President,

” On June 1, 2021, the Company changed its name from “Trxade Group, Inc” to “TRxADE

HEALTH, INC.”

LLC, a Nevada limited liability company (“ PharmaCycle ”), was formed in August 2010 by Prashant Patel, our President,

to serve as a web-based market platform designed to enable trading among healthcare buyers and sellers of pharmaceuticals, accessories

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In January 2013, PharmaCycle converted into a Florida corporation and changed its name to Trxade, Inc.

Florida ”).

In May 2013, Trxade Florida created a new wholly-owned subsidiary, Trxade Group, Inc., a Nevada corporation

Trxade Nevada ”).

Trxade Nevada acquired Trxade Florida pursuant to a reverse triangular merger, resulting

in Trxade Florida becoming a wholly-owned subsidiary of Trxade Nevada (the “

Nevada-Florida Merger ”).

purpose of the Nevada-Florida Merger was to provide for a holding company to own Trxade Florida, the operating company.

times, up to the Nevada-Florida Merger, Trxade Florida was capitalized exclusively by cash capital contributions from Messrs.

Suren Ajjarapu and Patel, our Chief Executive Officer and President, respectively.

Immediately following the Nevada-Florida Merger,

Ajjarapu and Patel collectively owned 99% of Trxade Nevada.

After the Nevada-Florida Merger (but prior to the merger with

XCEL), Trxade Nevada raised $670,000 through the sale of its preferred stock in private placements made to third party investors.

In May 2013, Trxade Florida created a new wholly-owned subsidiary, Trxade Group, Inc., a Nevada corporation (“ Trxade

Trxade Nevada acquired Trxade Florida pursuant to a reverse triangular merger, resulting in Trxade Florida becoming

a wholly-owned subsidiary of Trxade Nevada (the “ Nevada-Florida Merger ”).

The sole purpose of the Nevada-Florida Merger

was to provide for a holding company to own Trxade Florida, the operating company.

At all times, up to the Nevada-Florida Merger, Trxade

Florida was capitalized exclusively by cash capital contributions from Messrs.

Suren Ajjarapu and Patel, our Chief Executive Officer

and President, respectively.

Immediately following the Nevada-Florida Merger, Messrs.

Ajjarapu and Patel collectively owned 99% of Trxade

After the Nevada-Florida Merger (but prior to the merger with XCEL), Trxade Nevada raised $670,000 through the sale of its preferred

stock in private placements made to third party investors.

Merger with Trxade

September 26, 2008, Mark Fingarson, the former President, sole Director and controlling shareholder of XCEL, sold 80,000,000 shares

of XCEL (prior to the reverse split discussed below and the Reverse Stock Split (defined below)) to XCEL’s then attorney,

Ron McIntyre.

September 26, 2008, Mark Fingarson, the former President, sole Director and controlling shareholder of XCEL, sold 80,000,000 shares of

XCEL (prior to the Merger Reverse Split and Reverse Stock Split (each discussed and defined below)) to XCEL’s then attorney, Ron

On November 22, 2013, Trxade Nevada acquired Mr.

McIntyre’s controlling interest of 80,000,000 shares in XCEL

pursuant to a Purchase and Sale Agreement dated November 7, 2013.

At the time of the sale, XCEL had 104,160,000 shares of common

stock issued and outstanding, including the 80,000,000 shares of stock acquired by Trxade Nevada (prior to the reverse split discussed

below and the Reverse Stock Split).

December 16, 2013, Trxade Nevada and XCEL entered into a definitive merger agreement (the “

Merger Agreement ”)

providing for the merger (the “

Merger ”) of Trxade Nevada with and into XCEL, with XCEL continuing as the surviving

McIntyre’s controlling interest of 80,000,000 shares in XCEL pursuant

to a Purchase and Sale Agreement dated November 7, 2013.

At the time of the sale, XCEL had 104,160,000 shares of common stock issued

and outstanding, including the 80,000,000 shares of stock acquired by Trxade Nevada (prior to the Merger Reverse Split and Reverse Stock

Split (each discussed and defined below)).

December 16, 2013, Trxade Nevada and XCEL entered into a definitive merger agreement (the “ Merger Agreement ”) providing

for the merger (the “ Merger ”) of Trxade Nevada with and into XCEL, with XCEL continuing as the surviving corporation.

The Merger closed on January 8, 2014.

Under the terms of the Merger Agreement, we amended our certificate of incorporation

and changed our name to “

Trxade Group, Inc., ”

and changed our trading symbol to “

TRXD ”.

Under the terms of the Merger Agreement, we amended our certificate of incorporation and changed

our name to “ Trxade Group, Inc., ” and changed our trading symbol to “ TRXD ”.

Recapitalization

of Common Stock by a Reverse Split and Increase of Authorized Shares of Stock

also reversed our issued and outstanding stock at the ratio of one for one thousand (1:1,000) shares effective upon the closing

of the Merger (the “

Merger Reverse Split ”).

In connection with the Merger Reverse Split, 104,160,000 outstanding

shares of our common stock, including the 80,000,000 shares held by Trxade Nevada, were exchanged for 104,160 post-Merger Reverse

Split shares of common stock.

As a result of the Merger, Trxade Nevada stockholders holding 28,800,000 shares of common stock

and 670,000 shares of Series A Preferred Stock converted their shares on a one-to-one basis into 28,800,000 shares of our common

stock and 670,000 shares of our Series A Preferred Stock, for an aggregate total of 29,470,000 shares.

Further, 100,000 shares

of our common stock (on a post-Reverse Split basis and taking into account the Reverse Stock Split (discussed below)) were issued

following the Merger in connection with the conversion of our promissory notes.

The 80,000,000 pre-Merger shares held by Trxade

Nevada, which amounted to 13,334 shares (on a post-Reverse Split basis and taking into account the Reverse Stock Split), reverted

to treasury stock of the Company.

Except as otherwise disclosed, the share amounts in the paragraph above have not been adjusted

for the Merger Reverse Split or the Reverse Stock Split.

also reversed our issued and outstanding stock at the ratio of one for one thousand (1:1,000) shares effective upon the closing of the

Merger (the “ Merger Reverse Split ”).

In connection with the Merger Reverse Split, 104,160,000 outstanding shares of

our common stock, including the 80,000,000 shares held by Trxade Nevada, were exchanged for 104,160 post-Merger Reverse Split shares

of common stock.

As a result of the Merger, Trxade Nevada stockholders holding 28,800,000 shares of common stock and 670,000 shares of

Series A Preferred Stock converted their shares on a one-to-one basis into 28,800,000 shares of our common stock and 670,000 shares of

our Series A Preferred Stock, for an aggregate total of 29,470,000 shares.

Further, 100,000 shares of our common stock (on a post-Reverse

Split basis and considering the Reverse Stock Split (discussed below)) were issued following the Merger in connection with the conversion

of our promissory notes.

The 80,000,000 pre-Merger shares held by Trxade Nevada, which amounted to 13,334 shares (on a post-Reverse Split

basis and taking into account the Reverse Stock Split), reverted to treasury stock of the Company.

Except as otherwise disclosed, the

share amounts in the paragraph above have not been adjusted for the Merger Reverse Split or the Reverse Stock Split.

2020 Reverse Stock Split and NASDAQ Capital Market Listing

October 9, 2019, our Board of Directors, and on October 15, 2019, stockholders holding a majority of our outstanding voting shares,

approved resolutions authorizing a reverse stock split of the outstanding shares of our common stock in the range from one-for-two

(1-for-2) to one-for-ten (1-for-10), and provided authority to our Board of Directors to select the ratio of the reverse stock

split in their discretion (the “

Stockholder Authority ”).

On February 12, 2020, the Board of Directors of the

Company approved a stock split ratio of 1-for-6 (“

Reverse Stock Split ”) in connection with the Stockholder

Authority and the Company filed a Certificate of Amendment with the Secretary of Delaware to affect the Reverse Stock Split.

Reverse Stock Split became effective at 12:01 a.m.

October 9, 2019, our Board of Directors, and on October 15, 2019, stockholders holding a majority of our outstanding voting shares, approved

resolutions authorizing a reverse stock split of the outstanding shares of our common stock in the range from one-for-two (1-for-2) to

one-for-ten (1-for-10), and provided authority to our Board of Directors to select the ratio of the reverse stock split in their discretion

(the “ Stockholder Authority ”).

On February 12, 2020, the Board of Directors of the Company approved a stock split

ratio of 1-for-6 (“ Reverse Stock Split ”) in connection with the Stockholder Authority and the Company filed a Certificate

of Amendment with the Secretary of Delaware to affect the Reverse Stock Split.

The Reverse Stock Split became effective at 12:01 a.m.

Eastern Standard Time on February 13, 2020.

The Reverse Stock Split was completed

in order to allow us to meet the initial criteria of The NASDAQ Capital Market.

common stock was approved for listing on The NASDAQ Capital Market under the symbol “

MEDS ”, on February 13,

own 100% of Trxade Florida.

This subsidiary is included in our attached consolidated financial statements and is engaged in the

same line of business as Trxade.

Trxade Florida is a web-based market platform that enables commerce among healthcare buyers and

sellers of pharmaceuticals, accessories and services.

The Reverse Stock Split was completed in order to allow us to meet the initial criteria of

The NASDAQ Capital Market.

common stock was approved for listing on The NASDAQ Capital Market under the symbol “ MEDS ”, on February 13, 2020.

own 100% of Trxade Inc.

(a Florida corporation).

This subsidiary is included in our attached consolidated financial statements and is

engaged in the same line of business as Trxade.

is a web-based market platform that enables commerce among healthcare buyers

and sellers of pharmaceuticals, accessories and services.

own 100% of Integra Pharma Solutions, LLC (formerly Pinnacle Tek, Inc., a Florida corporation) founded by Mr.

Suren Ajjarapu,

our CEO, in 2011 (“

Integra ”).

Until the end of 2016, Integra served as our technology consultant provider,

but we discontinued that line of business in 2016.

Suren Ajjarapu, our CEO,

in 2011 (“ Integra ”).

Until the end of 2016, Integra served as our technology consultant provider, but we discontinued

that line of business in 2016.

Integra now serves as our logistics company for pharmaceutical distribution.

own 100% of Community Specialty Pharmacy, LLC, an independent retail specialty pharmacy with a focus on specialty medications.

own 100% of Alliance Pharma Solutions, LLC, a Florida limited liability company, which was founded in January 2018 (“

Alliance ”).

Alliance previously owned 30% of SyncHealth MSO, LLC (“

SyncHealth ”) which was part of a joint venture formed

in January 2019 with PanOptic Health, LLC (“

PanOptic ”) with the goal of enabling independent retail pharmacies

to better compete with large national pharmacies on pricing, distribution and logistics.

We did not realize any income from the

joint venture and we terminated the joint venture agreements pursuant to their terms effective as of January 31, 2020 and assigned

the 30% ownership of SyncHealth back to PanOptic.

As of February 1, 2020, we own no equity in SyncHealth and only the terms of

the agreements relating to confidentiality, non-solicitation and each party’s obligation to cease use of the other party’s

intellectual property survive the termination.

own 100% of Bonum Health, LLC, a Delaware limited liability company which owns our “

Bonum Health Hub ”

and operations as discussed in further detail below.

previously owned 100% of PharmCentrix, LLC, a Delaware limited liability company which had no revenue in 2020 and was dissolved

in December 2020.

own 100% of MedCheks, LLC, a Delaware limited liability company which was formed in January 2021 and is

a patient-centered, digital, precision healthcare platform that lets patients consolidate and control their health data via a

digital Health Passport.

The digital Health Passport allows users to share their health profile, tests and vaccinations simply

Secured in a blockchain, the Health Passport includes health and vaccination status verification via a QR code (a

two-dimensional machine-readable optical label), which is available for travel, entry into stadiums, concert venues, events, offices,

industrial plants, warehouses, and other physical access points.

MedCheks Health Passport stores all of a user’s health

records securely in one place.

own 100% of Alliance Pharma Solutions, LLC (d.b.a.

DelivMeds), a Florida limited liability company, which was founded in

January 2018 (“ Alliance ”).

Alliance previously owned 30% of SyncHealth MSO, LLC (“ SyncHealth ”)

which was part of a joint venture formed in January 2019 with PanOptic Health, LLC (“ PanOptic ”) with the goal of enabling

independent retail pharmacies to better compete with large national pharmacies on pricing, distribution and logistics.

We did not realize

any income from the joint venture, and we terminated the joint venture agreements pursuant to their terms effective as of January 31,

2020, and assigned the 30% ownership of SyncHealth back to PanOptic.

As of February 1, 2020, we own no equity in SyncHealth and only

the terms of the agreements relating to confidentiality, non-solicitation and each party’s obligation to cease use of the other

party’s intellectual property survive the termination.

own 100% of Bonum Health, LLC, a Delaware limited liability company which owns our “ Bonum Health Hub ” assets and operations

as discussed in further detail below.

previously owned 100% of MedCheks, LLC, a Delaware limited liability company which was formed in January 2021, had no revenue in 2021

and was dissolved in December 2021.

previously owned 100% of PharmCentrix, LLC, a Delaware limited liability company which had no revenue in 2020 and was dissolved in December

of Community Specialty Pharmacy, LLC

October 15, 2018, the Company entered into and consummated the purchase of 100% of the equity interests of Community Specialty

Pharmacy, LLC, a Florida limited liability company, (“

CSP ”), pursuant to the terms and conditions of the Membership

Interest Purchase Agreement, entered into by and among the Company as the buyer, and CSP, and Nikul Panchal, the equity owner

of CSP, a non-executive officer of the Company (collectively, the “

Seller ”).

The purchase price for the 100%

equity interest in CSP was $300,000 in cash, a promissory note issued by the Company in the amount of $300,000, and warrants to

purchase 67,585 shares of common stock of the Company (on a post-Reverse Split basis and taking into account the Reverse Stock

Split) of which 33% of such warrants were revocable by the Company prior to October 15, 2019 (but were not revoked);

revocable by the Company prior to October 15, 2020 (but were not revoked);

and the remaining 33% of such warrants are revocable

by the Company prior to October 15, 2021, which are exercisable for eight (8) years from the issuance date at a strike price of

$0.06 per share.

October 15, 2018, the Company entered into and consummated the purchase of 100% of the equity interests of Community Specialty Pharmacy,

LLC, a Florida limited liability company, (“ CSP ”), pursuant to the terms and conditions of the Membership Interest

Purchase Agreement, entered into by and among the Company as the buyer, and CSP, and Nikul Panchal, the equity owner of CSP, a non-executive

officer of the Company (collectively, the “ Seller ”).

The purchase price for the 100% equity interest in CSP was $300,000

in cash, a promissory note issued by the Company in the amount of $300,000, and warrants to purchase 67,585 shares of common stock of

the Company (on a post-Reverse Split basis and taking into account the Reverse Stock Split) of which 33% of such warrants were revocable

by the Company prior to October 15, 2019 (but were not revoked);

33% were revocable by the Company prior to October 15, 2020 (but were

not revoked);

and the remaining 33% of such warrants are revocable by the Company prior to October 15, 2021 (which were revoked on September

23, 2021), which are exercisable for eight (8) years from the issuance date at a strike price of $0.06 per share.

As of the date of this

Report, there are no warrants to purchase shares of common stock remain outstanding in connection with the purchase.

MSO, LLC Joint Venture

January 17, 2019, the Company and Alliance Pharma Solutions, LLC, a Delaware limited liability company and wholly-owned subsidiary

of the Company (hereafter “

Alliance, ”

with Alliance and Trxade referred to collectively herein as the “

Parties ”), entered into a transaction effective as of January 17, 2019 with PanOptic Health, LLC, a Delaware limited

liability company (“

PanOptic ”), to create a new entity, SyncHealth MSO, LLC (“

SyncHealth ”)

as part of a joint venture to enable independent retail pharmacies to better compete with large national pharmacies on pricing,

distribution and logistics.

January 17, 2019, the Company and Alliance Pharma Solutions, LLC, a Delaware limited liability company and wholly-owned subsidiary of

the Company (hereafter “ Alliance, ” with Alliance and Trxade referred to collectively herein as the “ Trxade

Parties ”), entered into a transaction effective as of January 17, 2019 with PanOptic Health, LLC, a Delaware limited liability

company (“ PanOptic ”), to create a new entity, SyncHealth MSO, LLC (“ SyncHealth ”) as part of a joint

venture to enable independent retail pharmacies to better compete with large national pharmacies on pricing, distribution and logistics.

As part of the transaction Alliance owned 30% of SyncHealth.

We did not realize any income from the

joint venture and we terminated the joint venture agreements pursuant to their terms effective as of January 31, 2020 and assigned

the 30% ownership of SyncHealth back to PanOptic.

As of February 1, 2020, we own no equity in SyncHealth and only the terms of

the agreements relating to confidentiality, non-solicitation and each party’s obligation to cease use of the other party’s

intellectual property survive the termination.

We did not realize any income from the joint venture, and we terminated

the joint venture agreements pursuant to their terms effective as of January 31, 2020, and assigned the 30% ownership of SyncHealth back

As of February 1, 2020, we own no equity in SyncHealth and only the terms of the agreements relating to confidentiality,

non-solicitation and each party’s obligation to cease use of the other party’s intellectual property survive the termination.

Health Asset Acquisition

October 23, 2019 (the “

Closing Date ”), Bonum Health, LLC, a Delaware limited liability company, and a then

newly formed wholly-owned subsidiary of the Company (“

Bonum Health ”) entered into an Asset Purchase Agreement

with Bonum Health, LLC, a Florida limited liability company (“

Seller ”) and Hardikkumar Patel, the sole member

of the Seller (the “

Member ”).

Pursuant to the Asset Purchase Agreement, the Company (through Bonum Health)

acquired from the Seller, certain specified assets and certain specified contracts associated with the assets of the Seller’s

operation as a telehealth service provider (the Tele Meds Platform)(the “

Assets ”).

Included with the acquisition

of the Assets, were contracts (relating to the Assets), intellectual property for the Bonum Health Tele Medicine software &

Technology and personal computers.

The Company agreed to provide the Seller consideration equal to 41,667 shares of restricted

common stock of the Company at the closing (the “

Closing Shares ”), and the Seller had the right to earn up

to an additional 108,334 shares of restricted common stock of the Company in the event certain milestones were met within the

first anniversary of the Closing date, none of which were met.

October 23, 2019, Bonum Health, LLC, a Delaware limited liability company, and a then newly formed wholly-owned subsidiary of the Company

(“ Bonum Health ”) entered into an Asset Purchase Agreement with Bonum Health, LLC, a Florida limited liability company

(“ Seller ”) and the sole member of the Seller (the “ Member ”).

Pursuant to the Asset Purchase Agreement,

the Company (through Bonum Health) acquired from the Seller, certain specified assets and certain specified contracts associated with

the assets of the Seller’s operation as a telehealth service provider (the Tele Meds Platform)(the “ Assets ”).

Included with the acquisition of the Assets, were contracts (relating to the Assets), intellectual property for the Bonum Health Tele

Medicine software & Technology and personal computers.

The Company agreed to provide the Seller consideration equal to 41,667 shares

of restricted common stock of the Company at the closing, and the Seller had the right to earn up to an additional 108,334 shares of

restricted common stock of the Company in the event certain milestones were met within the first anniversary of the Closing date, none

of which were met.

Asset Purchase Agreement includes a three year non-compete requirement, prohibiting the Seller and the Member from competing against

1 unchanged sentence

on liability disclosed in the Asset Purchase Agreement.

to the acquisition, the Company determined that the assets were not usable and wrote off the value of the assets amounting to

approximately $369,000.

to the acquisition, the Company determined that the assets were not usable and wrote off the value of the assets amounting to approximately

are 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.

and have designed and developed, and now own and operate, a business-to-business web-based

Our core service brings the nation’s independent pharmacies, accredited national suppliers, and manufacturers of pharmaceuticals

together to provide efficient and transparent buying and selling opportunities.

began operations as Trxade Group, Inc., a Nevada corporation (“ Trxade Nevada ”) in August of 2010 and spent over two

years creating and enhancing our web-based services.

The Company changed its name on June 1, 2021, from “Trxade Group, Inc”

to “TRxADE HEALTH, INC.” Our services provide pricing transparency, purchasing capabilities and other value-added services

on a single platform focused on serving the nation’s approximately 19,397 independent pharmacies with annual purchasing power of

$67.1 billion (according to the National Community of Pharmacists Association’s 2021 Digest).

Our national wholesale supply partners

and manufacturers are able to fulfill orders on our platform in real-time and provide pharmacies and wholesale suppliers with cost-saving

payment terms and next-day delivery capabilities in unrestrictive states.

We have expanded significantly since 2015 and now serve

approximately 13,100+ registered members on our sales platform.

Principal Products and Services and their Markets.

is a web-based pharmaceutical marketplace engaged in promoting and enabling commerce among independent pharmacies and large

pharmaceutical suppliers nationally.

Our marketplace has hundreds of suppliers providing over 20,000 branded and generic drugs

available for purchase by pharmacists.

We serve approximately 11,800 registered independent pharmacies, providing access to Trxade’s

proprietary pharmaceutical database, data analytics regarding medication pricing, and manufacturer return policies.

revenue from these services by charging a transaction fee to the seller of the products for sales conducted via the Trxade platform.

The buyers do not bear the cost of transaction fees for the purchases that they make, nor do they pay a fee to join or register

with our platform.

Substantially all of our revenues during the years ended December 31, 2020, and 2019, were from platform revenue

generated on www.rx.trxade.com and product sales through Integra Pharma Solutions, LLC.

For additional information, please

visit us at www.trxadegroup.com , www.rx.trxade.com , www.bonumhealth.com , www.comsprx.com , and www.rxintegra.com .

Information on our websites is not incorporated by reference into this Form 10-K.

of any publicly announced new products or services.

is a web-based pharmaceutical marketplace engaged in promoting and enabling commerce among independent pharmacies, small chains,

hospitals, clinics, and alternate dispensing sites with large pharmaceutical suppliers nationally.

Our marketplace has over 60 national

and regional pharmaceutical suppliers providing over 120,000 branded and generic drugs, including over-the-counter drugs (OTCs), and

drugs available for purchase by pharmacists.

We serve approximately 13,100+ registered members, providing access to Trxade’s

proprietary pharmaceutical database and data analytics regarding medication pricing.

We generate revenue from these services by charging

a transaction fee to the seller of the products for sales conducted via the Trxade platform.

The buyers do not bear the cost of transaction

fees for the purchases that they make, nor do they pay a fee to join or register with our platform.

Substantially all of our revenues

during the years ended December 31, 2021 and 2020, were from platform revenue generated on www.rx.trxade.com , product sales through

Integra Pharma Solutions, LLC, and prescription sales through Community Specialty Pharmacy, LLC.

of current products and services.

have a number of products and services still in development, which are described below.

InventoryRx.com .

InventoryRx, launched in the first quarter of 2014, is a web-based pharmaceutical exchange platform where wholesalers can buy

and sell pharmaceuticals or over-the-counter medications with each other in a systematized online sales platform.

The site offers

these trading partners greater product availability and pricing transparency.

The site may also substantially improve our customers

buying efficiency and lower their cost of goods on a continuous basis.

This product is built into the Trxade.com platform

and, accordingly, we have not generated any independent revenue from this product.

Pharmabayonline .

We formed Pharmabayonline to provide proprietary pharmaceutical data analytics and governmental reimbursement benchmarks analysis

to United States based independent pharmacies and pharmaceutical databases.

Our RxGuru application was launched in the first quarter of 2014 and underscores our commitment to deliver timely information

to our customers at the moment before purchase.

Our industry leading price prediction model “

RxGuru ”

product insight into pharmacy acquisition benchmarks (“

PAC ”) to ascertain trends and pricing variances which

result in significant purchasing opportunities.

RX Guru ”

helps to predict prices and affords our members an

opportunity continuously to benefit from real price purchasing opportunities that are often concealed from the rest of the industry.

This product is built into the Trxade.com platform and, accordingly, this application works in conjunction with the Trxade

platform but, to date, has not generated any independent revenue.

Pharma Solutions, LLC .

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Specialty Pharmacy, LLC .

We acquired Community Specialty Pharmacy, LLC, a Florida limited liability company (“

CSP ”),

We acquired Community Specialty Pharmacy, LLC, a Florida limited liability company (“ CSP ”),

on October 15, 2018.

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CSP has a focus on specialty medications.

The company operates with an innovative pharmacy model which offers home delivery services to any patient thereby providing convenience.

company operates with an innovative pharmacy model which offers home delivery services to any patient thereby providing convenience.

Delivmeds.com .

Delivmeds.com was launched in late 2018 as a consumer-based app to provide delivery of pharmaceutical products associated

with Alliance Pharma Solutions, LLC.

Delivmeds.com was launched in late 2018 as a consumer-based app to provide delivery of pharmaceutical products associated with

Alliance Pharma Solutions, LLC.

We are currently working on reformulating the application from a prescription delivery portal to a fully

integrated, interoperable, end-to-end prescription delivery and medication adherence tool.

The new product has been rebranded and is

targeted for consumer re-release and use in the near future.

To date, we have not generated any revenue from this product.

Trxademso technology was developed in early 2019 as part of the SyncHealth MSO, LLC joint venture to develop technology that could

potentially assist independent retail pharmacies to compete better with large national pharmacies on prescription generation workflow

optimization, pricing, distribution and logistics.

We did not realize any income from the joint venture and we terminated the

joint venture agreements pursuant to their terms effective as of January 31, 2020 and assigned the 30% ownership of SyncHealth

back to PanOptic.

As of February 1, 2020, we own no equity in SyncHealth and only the terms of the agreements relating to confidentiality,

non-solicitation and each party’s obligation to cease use of the other party’s intellectual property survive the termination.

Trxade Prime allows pharmacy members on the Trxade platform to process, consolidate

and ship purchase orders that are placed directly with Trxade suppliers via the Trxade Prime service.

This is at no cost, with

the goal of offering a single tool with one low order minimum, one invoice, one package and one delivery from multiple quality

wholesalers and distributors.

Revenue has been generated from this service though our Integra subsidiary, which provides the consolidation

of the orders.

Bonum Health Hub ”, a self-enclosed, free standing virtual examination room, was launched

by the Company’s wholly-owned Bonum Health, LLC subsidiary, in November 2019 and was expected to be operational in April

however, due to the COVID-19 pandemic, at present the Company does not anticipate installations moving forward until 2021

at the earliest.

The hub is a Health Insurance Portability and Accountability Act (HIPPA)-compliant booth planned to be placed

in various independent retail pharmacies in rural and urban areas to provide care for patients that otherwise would not be able

to afford primary or collaborative care.

Bonum Health Hub ”

is expected to feature an online interface

that will expand the power of the Bonum Health application into a digital, face-to-face platform that brings patients and physicians

eye-to-eye in a fully secure, private setting.

This will allow for more substantial and effective dialogue about sensitive conditions

and other collaborative care concerns.

Bonum Health Hubs ”

is planned to include a screen for two-way video

communication, the necessary medical equipment for the services available, and a table and chair for in-person consultations.

The Health Hubs will be compatible with the “

Bonum Health app ”, which provides an overall healthcare experience

comparable to a Primary Care practitioner, and an online portal as a personal electronic medical record and scheduling system.

Following the results of the Company’s initial pilot program of the “

Bonum Health Hub ”

and the effects

of the COVID-19 pandemic, the Company is developing new plans to expand such hubs into its network of independent pharmacies.

To date, we have not generated any revenue from this product.

This is at no cost, with the goal

of offering a single tool with one low order minimum, one invoice, one package and one delivery from multiple quality wholesalers and

distributors.

Revenue has been generated from this service though our Integra subsidiary, which provides the consolidation of the orders.

Health Hub and Application .

The “ Bonum Health Hub ”, a self-enclosed, free standing virtual examination room, was

launched by the Company’s wholly-owned Bonum Health, LLC subsidiary, in November 2019 and was expected to be operational in April

however, due to the COVID-19 pandemic, the Company does not anticipate installations moving forward, and has taken a write off

of the hubs purchased at June 30, 2021 in the amount of $143,891, which is included under loss on inventory investments in the statement

of operations for the year ended December 31, 2021, in Note 8 - Other Receivables ” to the Notes to Consolidated Financial Statements

included herein under “ Item 8.

Financial Statements and Supplemental Data ”.

“ Bonum Health app ”, which provides an overall healthcare experience comparable to a Primary Care practitioner, and

an online portal as a personal electronic medical record and scheduling system is available on a subscription basis, primarily as a stand-alone

telehealth software application that can be licensed on a business-to-business (B2B) model to clients as an employment health benefit

for the clients’ employees.

Revenue has been generated from this service through our Bonum subsidiary.

Business to Business (B2B).

Bonum+ bundles telehealth, a COVID-19 risk assessment tool and a Personal Protective Equipment

(PPE) purchasing tool, through a secure mobile dashboard for corporate clients.

The B2B platform eases pressure on employees who

are required to report any relevant health issues daily, centralizing communication and contact tracing to deliver risk scores.

This allows employers to monitor employee COVID-19 risk profiles and streamlines the ordering of new PPE as needed.

An integrated

artificial intelligence (AI) tool offers health recommendations and connects employees with board certified physicians, as needed.

To date, we have not generated any revenue from this product.

Bonum+ bundles telehealth, a COVID-19 risk assessment tool and a Personal Protective Equipment (PPE)

purchasing tool, through a secure mobile dashboard for corporate clients.

The B2B platform eases pressure on employees who are required

to report any relevant health issues daily, centralizing communication and contact tracing to deliver risk scores.

This allows employers

to monitor employee COVID-19 risk profiles and streamlines the ordering of new PPE as needed.

An integrated artificial intelligence (AI)

tool offers health recommendations and connects employees with board certified physicians, as needed.

To date, we have not generated

any revenue from this product.

Health Passport .

The Health Passport is a patient-centered, digital, precision healthcare

platform that lets patients consolidate and control their health data via a digital Health Passport and allows them to share their

health profile, tests and vaccinations simply and safely.

Secured in a blockchain, the Health Passport includes health and vaccination

status verification via a QR code, which is available for travel, entry into stadiums, concert venues, events, offices, industrial

plants, warehouses, and other physical access points.

The Passport stores all of a user’s health records securely in one

The platform is under development and we have not generated any revenue from this product to date.

of our product offerings are focused on the United States markets.

Some products are restricted just to certain states, depending

upon the various applicable state regulations and guidelines pertaining to pharmaceuticals, particularly, and drug businesses,

Our services are distributed through our online platform.

The Health Passport is a patient-centered, digital, precision healthcare platform

that lets patients consolidate and control their health data via a digital Health Passport and allows them to share their health profile,

tests and vaccinations simply and safely.

Secured in a blockchain, the Health Passport includes health and vaccination status verification

via a QR code, which is available for travel, entry into stadiums, concert venues, events, offices, industrial plants, warehouses, and

other physical access points.

The Passport stores all of a user’s health records securely in one place.

W e have not generated

any revenue from this product to date and the product was discontinued at the end of December 2021.

We previously owned 100% of MedCheks,

LLC, a Delaware limited liability company which was formed in January 2021, had no revenue in 2021 and was dissolved in December 2021.

On February 15, 2022, the Company entered into a relationship with Exchange

Health, LLC, a technology company providing an online platform for manufacturers and suppliers to sell and purchase pharmaceuticals (“ Exchange

SOSRx LLC, a Delaware limited liability company (“ SOSRx ”), was formed, which is owned 51% by the

Company and 49% by Exchange Health.

All of our product offerings

are focused on the United States markets.

Some products are restricted just to certain states, depending upon the various applicable

state regulations and guidelines pertaining to pharmaceuticals, particularly, and drug businesses, generally.

Our services are distributed

through our online platform

Organizational

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Pharmaceutical Industry

to the NCPA 2020 Digest Report, United States pharmaceutical companies comprise a burgeoning estimated $685 billion industry

by 2023, consisting of over 65,000 pharmacy facilities.

Management believes that few platforms are currently in place to bring

these participants together to share market knowledge, product pricing transparency and product availability.

to the NCPA 2020 Digest Report, United States pharmaceutical companies comprise a burgeoning estimated $685

billion industry by 2023, consisting of over 65,000 pharmacy facilities.

Management believes that few platforms are currently in place

to bring these participants together to share market knowledge, product pricing transparency and product availability.

According to this,

the pharmaceutical market is comprised primarily of three wholesalers that control an estimated approximately 92% of the market.

Our management believes that this concentration has, over the years, led to a lack of price and cost transparency, thereby resulting

in severe limitations on the purchasing choices of industry participants.

These market dynamics have enabled these large wholesalers

(McKesson, Cardinal Health and AmerisourceBergen), known as ADR distributors, to dominate the industry with respect to both generic

and brand pharmaceuticals.

The increasing concentration of generic medications (ANDA or Abbreviated New Drug Application), however,

with many more expected to go to market in the near future (approximately $80 billion in branded medications lost their patent

protection from 2008 to 2018, according to an article in Drug Topics from August 2004, called “

Big Pharma uses effective

strategies to battle generic competitors ”, by Martin Sipkoff), have enabled smaller suppliers’

access to an increasing

number of medications at highly discounted prices.

The market is slowly changing towards one where medications will become commoditized

and influenced by price rather than the business relationships imposed by the dominant participants of the past.

fuel this change, insurance companies (Pharmacy Benefits Management (“

PBM ”) and private health payers) and

the federal government have recently initiated lower medication reimbursement payments to healthcare providers.

We believe that

pharmacies in due course will face increasing pressure to source medications as inexpensively as possible and improve operational

Trxade seeks to be in the forefront of solving these transparency and pricing concerns by providing independent, retail

pharmacies with real-time, pharmacy acquisition cost (“

PAC ”) benchmarks to the National Drug Code (the “

The NDC mark is a unique product identifier used in the United States for drugs intended for human use.

management believes that this concentration has, over the years, led to a lack of price and cost transparency, thereby resulting in severe

limitations on the purchasing choices of industry participants.

These market dynamics have enabled these large wholesalers (McKesson,

Cardinal Health and AmerisourceBergen), known as ADR distributors, to dominate the industry with respect to both generic and brand pharmaceuticals.

fuel this change, insurance companies (Pharmacy Benefits Management (“ PBM ”) and private health payers) and the federal

government have initiated lower medication reimbursement payments to healthcare providers.

We believe that pharmacies face increasing

pressure to source medications as inexpensively as possible and improve operational efficiency.

Trxade seeks to be in the forefront of

solving these transparency and pricing concerns by providing independent, retail pharmacies with real-time, pharmacy acquisition cost

(“ PAC ”) benchmarks to the National Drug Code (the “ NDC ”) standard.

The NDC mark is a unique product

identifier used in the United States for drugs intended for human use.

Business Conditions, Our competitive position in our Industry, and our Methods of Competition.

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distributors, buying groups, software products, and other start-up companies.

Most of our competitors’

operations have substantially

greater financial- and manufacturer-backed resources, longer operating histories, greater name recognition, and more established

relationships in the industry.

Most of our competitors’ operations have substantially

greater financial- and manufacturer-backed resources, longer operating histories, greater name recognition, and more established relationships

in the industry.

Start-up Companies Which Provide Competitive Services.

have identified start-ups that provide for supplier-pharmacy trading such as PharmaBid, RxCherrypick, PharmSaver, MatchRx and

GenericBid, and provide web-based services similar to ours, allowing pharmacies to buy from several suppliers.

Trxade differentiates

itself from these exchanges by providing our pharmacies with both brand and generic pharmaceutical products.

Additional companies

target “

direct-to-consumer ”

pharmacy deliveries, including Amazon.com ’s PillPack , Capsule

and GetRoman.com .

have identified start-ups that provide for supplier-pharmacy trading such as PharmaBid, RxCherrypick, PharmSaver, MatchRx and GenericBid,

and provide web-based services similar to ours, allowing pharmacies to buy from several suppliers.

Trxade differentiates itself from

these exchanges by providing our pharmacies with both brand and generic pharmaceutical products.

Additional companies target “ direct-to-consumer ”

pharmacy deliveries, including Amazon.com ’s PillPack , Capsule, Costplusdrugs, and GetRoman.com .

Groups provide discounted prices to their members by negotiating better pricing with one primary wholesaler, while charging administrative

fees generally ranging from 3 to 5 percent.

Some Buying Groups are structured like co-operatives (such as Independent Pharmacy

Cooperative (IPC) and American Pharmacy Cooperative, Inc.

Some Buying Groups are structured like co-operatives (such as Independent Pharmacy Cooperative

(IPC) and American Pharmacy Cooperative, Inc.

(APCI)) and offer their members monthly or quarterly rebates.

they can function well to bring pricing competition to the industry, they often offer rebates only after the purchase.

does not believe Buying Groups will provide long-term savings to customers with this model given the increased transparency and

competition in the industry.

Although they can function

well to bring pricing competition to the industry, they often offer rebates only after the purchase.

Management does not believe Buying

Groups will provide long-term savings to customers with this model given the increased transparency and competition in the industry.

Pharmaceutical

pharmaceutical software companies compete with us to varying degrees at different levels.

SureCost, for example, provides inventory

management software enabling pharmacies to comply with primary supplier contracts.

SureCost, for example, provides inventory management

software enabling pharmacies to comply with primary supplier contracts.

This software is fee-based and requires training.

may be reluctant to buy pharmaceuticals on the internet due to the historical negativity and uncertainty with respect to the origin

and purity of drugs purchased off the web.

Trxade management believes that as we continue to develop our brand, our customer base,

and our vast product offerings, we will gain the trust of the market and overcome the negativity associated with purchasing via

a pharmaceutical online marketplace.

advantage that we believe we have over our competition is our ability to be flexible and fast moving in adjusting our business

model to address the needs of our customer base.

Trxade started by offering pharmacies a reverse auction model to enhance savings

on the purchase of their pharmaceuticals.

Customer feedback suggested that pharmacies prefer a more “

buy now ”

format, which we implemented.

This resulted in a “

one-stop-one-search ”

platform to buy quality pharmaceuticals

for less and a data-rich platform to help pharmacies overcome the complexities related to supply chain purchasing.

also anticipate facing competition in the telehealth industry (in connection with our planned “

Bonum Health Hubs ”)

from current and future health care companies in the telehealth market including, Teladoc Health, Inc., MDLive, Inc., American

Well Corporation and Grand Rounds, Inc., among other smaller industry participants.

may be reluctant to buy pharmaceuticals on the internet due to the historical negativity and uncertainty with respect to the origin and

purity of drugs purchased off the web.

Trxade management believes that as we continue to develop our brand, our customer base, and our

vast product offerings, we will gain the trust of the market and overcome the negativity associated with purchasing via a pharmaceutical

online marketplace.

advantage that we believe we have over our competition is our ability to be flexible and fast moving in adjusting our business model

to address the needs of our customer base.

Trxade started by offering pharmacies a reverse auction model to enhance savings on the purchase

of their pharmaceuticals.

Customer feedback suggested that pharmacies prefer a more “ buy now ” format, which we implemented.

This resulted in a “ one-stop-one-search ” platform to buy quality pharmaceuticals for less and a data-rich platform

to help pharmacies overcome the complexities related to supply chain purchasing.

also anticipate facing competition in the telehealth industry (in connection with “ Bonum Health ”) from current and

future health care companies in the telehealth market including, Teladoc Health, Inc., MDLive, Inc., American Well Corporation and Grand

Rounds, Inc., among other smaller industry participants.

and Availability of Raw Materials;

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Because we are not a manufacturing company, we do not need any raw materials.

Our module on

the platform is drug supplier-to-retailer.

Our module on the platform

is drug supplier-to-retailer.

We bring buyers and sellers together on this platform.

Our suppliers include National

Apothecary Solutions, Integral RX, and South Pointe Wholesale, Inc.

Our suppliers include National Apothecary Solutions,

Integral RX, and South Pointe Wholesale, Inc.

on One or More Major Customers.

of the date of this filing, we have approximately 11,800 registered independent pharmacies and over 30 pharmaceutical suppliers

as customers, with a market potential of approximately 21,000 independent pharmacies and 1,500 regional and local suppliers.

have a working relationship with over 25 wholesalers and the nation’s largest buying group.

Although we believe those entities

are satisfied with their business relationship with Trxade, if our buying group and two or three of the largest wholesalers decided

no longer to do business with Trxade, the resulting supplier void would materially and adversely affect our competitiveness in

the marketplace.

of the date of this filing, we have approximately 13,100+ registered members and over 30 pharmaceutical suppliers as customers,

with an estimated market potential of approximately 19,397 independent pharmacies and 1,500 regional and local suppliers.

a working relationship with over 25 wholesalers and the nation’s largest buying group.

Although we believe those entities are satisfied

with their business relationship with Trxade, if our buying group and two or three of the largest wholesalers decided no longer to do

business with Trxade, the resulting supplier void would materially and adversely affect our competitiveness in the marketplace.

we believe that our name and brand are protected by applicable state common law trademark laws, we do not currently have any patents,

concessions, licenses, royalty agreements, or franchises, provided that we do currently maintain a number of registered trademarks

and our pharmaceutical pricing benchmarks, PAC.

Our business operates under a proprietary software system which includes trade

secrets within our database, business practices and pricing model.

concessions, licenses, royalty agreements, or franchises, provided that we do currently maintain a number of registered trademarks and

our pharmaceutical pricing benchmarks, PAC.

Our business operates under a proprietary software system which includes trade secrets within

our database, business practices and pricing model.

We also maintain a number of websites.

believe that we have taken all necessary steps to protect our proprietary rights, but no assurance can be given that we will be able

to successfully enforce or protect our rights in the event that they are infringed upon by a third party.

for Government Approval of Products and Services.

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Drug Administration Guidelines

April 12, 1988, President Ronald Reagan signed into law the Prescription Drug Marketing Act of 1987 (PDMA), setting the baseline

for wholesale distribution regulations.

The final regulations were published in 1999, establishing the minimum wholesale distribution

requirements for state licensure.

With the intent to prevent the introduction and retail sale of substandard, ineffective, or

counterfeit drugs into the distribution system, state licensing systems moved to update their standards to match those provided

federally as guided under FDA’s Guidelines for State Licensing of Wholesale Prescription Drug Distributors (21 CFR 205).

PDMA established minimum federal pedigree requirements to trace the ownership of prescription drugs through the supply chain.

The principal goal of the PDMA was to further secure the nation’s drug supply from counterfeit and substandard prescription

April 12, 1988, President Ronald Reagan signed into law the Prescription Drug Marketing Act of 1987 (PDMA), setting the baseline for

wholesale distribution regulations.

The final regulations were published in 1999, establishing the minimum wholesale distribution requirements

for state licensure.

With the intent to prevent the introduction and retail sale of substandard, ineffective, or counterfeit drugs into

the distribution system, state licensing systems moved to update their standards to match those provided federally as guided under FDA’s

Guidelines for State Licensing of Wholesale Prescription Drug Distributors (21 CFR 205).

PDMA established minimum federal pedigree requirements

to trace the ownership of prescription drugs through the supply chain.

The principal goal of the PDMA was to further secure the nation’s

drug supply from counterfeit and substandard prescription drugs.

The law establishes two types of distributors:

Authorized distributor[s] of record ”

distributor[s], ”

such as wholesalers.

The pedigree requirement was to require each person engaged in the wholesale distribution

of a prescription drug in interstate commerce, who is not the manufacturer or an authorized distributor of record for that drug,

to provide a pedigree to the recipient.

After meeting resistance from various stakeholders, the FDA delayed the effective date

of the regulations several times, until final implementation in December 2006.

distributor[s] of record ” or ADRs;

and “ Unauthorized distributor[s], ” such as wholesalers.

requirement was to require each person engaged in the wholesale distribution of a prescription drug in interstate commerce, who is not

the manufacturer or an authorized distributor of record for that drug, to provide a pedigree to the recipient.

After meeting resistance

from various stakeholders, the FDA delayed the effective date of the regulations several times, until final implementation in December

the federal level the implementation of the track and trace legislation which went into effect in 2018, requires the use of pharmaceutical

pedigree to track the movement of pharmaceuticals along the supply chain.

The costs of complying with this new legislation may

be too burdensome for many of the smaller suppliers.

The costs of complying with this new legislation may be too

burdensome for many of the smaller suppliers.

Drug Administration Guidelines

are a number of national and state-wide regulations that have an effect on our business.

All drug wholesalers must be licensed

under state licensing systems, which must in turn meet the FDA guidelines under State Licensing of Wholesale Prescription Drug

Distributors (21 CFR Part 205).

The regulations set forth minimum requirements for prescription drug storage and security as well

as for the treatment of returned, damaged, and outdated prescription drugs.

Further, wholesale drug distributors must establish

and maintain inventories and records of all transactions regarding the receipt and distribution of prescription drugs and make

these available for inspection and copying by authorized federal, state, or local law enforcement officials.

In most states, wholesale

distributor licenses are issued by the State Boards of Pharmacy and require periodic renewal.

Approximately 40 states also require

out-of-state wholesalers that distribute drugs within their borders to be licensed as well.

Florida, Nevada, New Mexico and Indiana define the normal distribution channel to not include the lateral sales of pharmaceuticals

between wholesalers.

The Supply Chain Act, part of the Quality Drug Act, which was signed into federal law in December 2013, precludes

all states from restricting, investigating or inspecting the distribution channel and transactional history.

Until the federal

government provides guidelines for the new federal law, no state regulation or guideline exists.

All drug wholesalers must be licensed under

state licensing systems, which must in turn meet the FDA guidelines under State Licensing of Wholesale Prescription Drug Distributors

(21 CFR Part 205).

The regulations set forth minimum requirements for prescription drug storage and security as well as for the treatment

of returned, damaged, and outdated prescription drugs.

Further, wholesale drug distributors must establish and maintain inventories and

records of all transactions regarding the receipt and distribution of prescription drugs and make these available for inspection and

copying by authorized federal, state, or local law enforcement officials.

In most states, wholesale distributor licenses are issued by

the State Boards of Pharmacy and require periodic renewal.

Approximately 40 states also require out-of-state wholesalers that distribute

drugs within their borders to be licensed as well.

Florida, Nevada, New Mexico and Indiana define the normal distribution channel to not include the lateral sales of pharmaceuticals between

The Supply Chain Act, part of the Quality Drug Act, which was signed into federal law in December 2013, precludes all states

from restricting, investigating or inspecting the distribution channel and transactional history.

Until the federal government provides

guidelines for the new federal law, no state regulation or guideline exists.

warehousing of pharmaceuticals is also restricted and requires additional state licenses.

Some licenses require bonds and written

exams and may take some time to approve.

Currently, Integra Pharma Solutions, LLC, our wholesale distributor, asks for formal

pedigrees from the ADR wholesalers and provides pedigrees to those entities they sell to in the marketplace.

This requirement

limits liability and provides assurance if a recall is warranted that Trxade and its participants will receive value for the commodity.

Some licenses require bonds and written exams

and may take some time to approve.

Currently, Integra Pharma Solutions, LLC, our wholesale distributor, asks for formal pedigrees from

the ADR wholesalers and provides pedigrees to those entities they sell to in the marketplace.

This requirement limits liability and provides

assurance if a recall is warranted that Trxade and its participants will receive value for the commodity.

national wholesale supply partners are able to fulfill orders on our platform in real-time and provide pharmacies with cost-saving payment

terms and next-day delivery capabilities in unrestrictive states under the Model State Pharmacy Act and Model Rules of the National Association

of Boards of Pharmacy (Model Act).

New Regulations;

addition to the above, regulatory mandates in response to certain unexpected events, such as viral outbreaks, could negatively

impact sales.

For example, in December 2019 an outbreak of a coronavirus surfaced in China and has resulted, and may continue

to result, in governments around the world adopting restrictions on public gatherings, travel and restrictions on companies’

(including our) ability to conduct normal business operations.

gouging may be an issue in the coming months due to the continued effects of the coronavirus and responses thereto;

date of this Report, 34 states have enacted price gouging laws of one kind or another.

The laws vary from state to state, but

one constant throughout is a prohibition to charge “excessive”

or “unconscionable”

prices for consumer

Some states define “excessive”

or “unconscionable”

while others define what makes a prima facia

case for price gouging and what constitutes a prima facia defense, shifting the burden of proof to the accuser.

In almost all

of the 34 states with price gouging laws on the books, a price is excessive or unconscionable if the price of a good has increased,

in some states by a certain percentage, over the price of the good prior to the onset of

the abnormal disruption of the market.

Some states have clearly excepted from the price gouging definition a rise in prices

caused by an increase in the merchant’s cost of delivering that good for sale –

whether it be increased shipping costs,

gasoline prices or simply the cost of the good itself.

Other states have less defined exceptions –

Virginia for example

only treats the fact of increased input costs as a merchant’s prima facia defense to an accusation of price gouging.

states except from the price gouging definition prices that do not exceed a normal margin (i.e., the merchant’s margin immediately

prior to the market disruption) PLUS 10%.

In general, while the l aw may not specifically

define what constitutes an “unconscionably excessive price,”

the statutes typically provide that a price may be “unconscionably

excessive”

the amount charged represents a “gross disparity”

from the price such goods or services were

sold or offered for sale immediately prior to the onset of the abnormal disruption of the market.

Merchants may provide evidence

that justifies their higher prices were justified by increased costs beyond their control.

We will need to comply with the excessive

price statutes;

as of the date of this Report, we believe we were in compliance with all 34 states’

price gouging laws.

Price Gouging Rules

addition to the above, regulatory mandates in response to certain unexpected events, such as viral outbreaks, could negatively impact

For example, in December 2019 an outbreak of a coronavirus surfaced in China and resulted in governments around the world adopting

restrictions on public gatherings, travel and restrictions on companies’ (including our) ability to conduct normal business operations.

gouging may be an issue in the coming months due to the continued effects of the coronavirus and responses thereto and supply chain issues

associated therewith and separately;

as of the date of this Report, 42 states have enacted price gouging laws of one kind or another.

The laws vary from state to state, but one constant throughout is a prohibition to charge “excessive” or “unconscionable”

prices for consumer goods.

Some states define “excessive” or “unconscionable” while others define what makes

a prima facia case for price gouging and what constitutes a prima facia defense, shifting the burden of proof to the accuser.

all of the 42 states with price gouging laws on the books, a price is excessive or unconscionable if the price of a good has increased,

in some states by a certain percentage, over the price of the good prior to the onset of the abnormal

disruption of the market.

Some states have clearly excepted from the price gouging definition a rise in prices caused by an increase

in the merchant’s cost of delivering that good for sale – whether it be increased shipping costs, gasoline prices or simply

the cost of the good itself.

Other states have less defined exceptions – Virginia for example only treats the fact of increased

input costs as a merchant’s prima facia defense to an accusation of price gouging.

Several states except from the price gouging

definition prices that do not exceed a normal margin (i.e., the merchant’s margin immediately prior to the market disruption) PLUS

In general, while the l aw may not specifically define what constitutes an “unconscionably

excessive price,” the statutes typically provide that a price may be “unconscionably excessive” if:

the amount charged

represents a “gross disparity” from the price such goods or services were sold or offered for sale immediately prior to the

onset of the abnormal disruption of the market.

Merchants may provide evidence that justifies their higher prices were justified by increased

costs beyond their control.

We will need to comply with the excessive price statutes;

as of the date of this Report, we believe we were

in compliance with all 42 states’ price gouging laws.

Federal and State Fraud and Abuse Laws

are subject to the federal self-referral prohibitions, commonly known as the Stark Law.

Where applicable, this law prohibits a

physician from referring Medicare patients to an entity providing “designated health services”

if the physician or

a member of such physician’s immediate family has a “financial relationship”

with the entity, unless an exception

The penalties for violating the Stark Law include the denial of payment for services ordered in violation of the statute,

mandatory refunds of any sums paid for such services, civil penalties, disgorgement and possible exclusion from future participation

in the federally funded healthcare programs.

A person who engages in a scheme to circumvent the Stark Law’s prohibitions

may be subject to fines for each applicable arrangement or scheme.

The Stark Law is a strict liability statute, which means proof

of specific intent to violate the law is not required.

In addition, the government and some courts have taken the position that

claims presented in violation of the various statutes, including the Stark Law can be considered a violation of the federal False

Claims Act (described below) based on the contention that a provider impliedly certifies compliance with all applicable laws,

regulations and other rules when submitting claims for reimbursement.

A determination of liability under the Stark Law could have

a material adverse effect on our business, financial condition and results of operations.

Where applicable, this law prohibits a physician

from referring Medicare patients to an entity providing “designated health services” if the physician or a member of such

physician’s immediate family has a “financial relationship” with the entity, unless an exception applies.

The penalties

for violating the Stark Law include the denial of payment for services ordered in violation of the statute, mandatory refunds of any

sums paid for such services, civil penalties, disgorgement and possible exclusion from future participation in the federally funded healthcare

A person who engages in a scheme to circumvent the Stark Law’s prohibitions may be subject to fines for each applicable

arrangement or scheme.

The Stark Law is a strict liability statute, which means proof of specific intent to violate the law is not required.

In addition, the government and some courts have taken the position that claims presented in violation of the various statutes, including

the Stark Law can be considered a violation of the federal False Claims Act (described below) based on the contention that a provider

impliedly certifies compliance with all applicable laws, regulations and other rules when submitting claims for reimbursement.

A determination

of liability under the Stark Law could have a material adverse effect on our business, financial condition and results of operations.

Anti-Kickback Statute

are also subject to the federal Anti-Kickback Statute.

The Anti-Kickback Statute is broadly worded and prohibits the knowing and

willful offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce, (i) the referral of a

person covered by Medicare, Medicaid or other governmental programs, (ii) the furnishing or arranging for the furnishing of items

or services reimbursable under Medicare, Medicaid or other governmental programs or (iii) the purchasing, leasing or ordering

or arranging or recommending purchasing, leasing or ordering of any item or service reimbursable under Medicare, Medicaid or other

governmental programs.

In addition, a person or entity does not need to have actual knowledge of this statute or specific intent

to violate it to have committed a violation.

Moreover, the government may assert that a claim including items or services resulting

from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act, as

discussed below.

Violations of the Anti-Kickback Statute can result in exclusion from Medicare, Medicaid or other governmental

programs as well as civil and criminal penalties and fines.

Imposition of any of these remedies could have a material adverse

effect on our business, financial condition and results of operations.

The Anti-Kickback Statute is broadly worded and prohibits the knowing and willful

offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce, (i) the referral of a person covered

by Medicare, Medicaid or other governmental programs, (ii) the furnishing or arranging for the furnishing of items or services reimbursable

under Medicare, Medicaid or other governmental programs or (iii) the purchasing, leasing or ordering or arranging or recommending purchasing,

leasing or ordering of any item or service reimbursable under Medicare, Medicaid or other governmental programs.

In addition, a person

or entity does not need to have actual knowledge of this statute or specific intent to violate it to have committed a violation.

the government may assert that a claim including items or services resulting from a violation of the Anti-Kickback Statute constitutes

a false or fraudulent claim for purposes of the False Claims Act, as discussed below.

Violations of the Anti-Kickback Statute can result

in exclusion from Medicare, Medicaid or other governmental programs as well as civil and criminal penalties and fines.

Imposition of

any of these remedies could have a material adverse effect on our business, financial condition and results of operations.

federal and state government agencies have continued civil and criminal enforcement efforts as part of numerous ongoing investigations

of healthcare companies and their executives and managers.

Although there are a number of civil and criminal statutes that can

be applied to healthcare providers, a significant number of these investigations involve the federal False Claims Act.

These investigations

can be initiated not only by the government but also by a private party asserting direct knowledge of fraud.

Penalties for False

Claims Act violations include fines, plus up to three times the amount of damages sustained by the federal government.

Claims Act violation may provide the basis for exclusion from the federally funded healthcare programs.

In addition, some states

have adopted similar fraud, whistleblower and false claims provisions.

Although there are a number of civil and criminal statutes that can be applied

to healthcare providers, a significant number of these investigations involve the federal False Claims Act.

These investigations can

be initiated not only by the government but also by a private party asserting direct knowledge of fraud.

Penalties for False Claims Act

violations include fines, plus up to three times the amount of damages sustained by the federal government.

A False Claims Act violation

may provide the basis for exclusion from the federally funded healthcare programs.

In addition, some states have adopted similar fraud,

whistleblower and false claims provisions.

Fraud and Abuse Laws

states in which we operate have also adopted similar fraud and abuse laws as described above.

The scope of these laws and the

interpretations of them vary from state to state and are enforced by state courts and regulatory authorities, each with broad

Some state fraud and abuse laws apply to items or services reimbursed by any payor, including patients and commercial

insurers, not just those reimbursed by a federally funded healthcare program.

A determination of liability under such state fraud

and abuse laws could result in fines and penalties and restrictions on our ability to operate in these jurisdictions.

The scope of these laws and the interpretations

of them vary from state to state and are enforced by state courts and regulatory authorities, each with broad discretion.

fraud and abuse laws apply to items or services reimbursed by any payor, including patients and commercial insurers, not just those reimbursed

by a federally funded healthcare program.

A determination of liability under such state fraud and abuse laws could result in fines and

penalties and restrictions on our ability to operate in these jurisdictions.

Healthcare Laws

federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic

and Clinical Health Act, or HITECH, and their implementing regulations, which we collectively refer to as HIPAA, established several

separate criminal penalties for making false or fraudulent claims to insurance companies and other non-governmental payors of

healthcare services.

federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and

Clinical Health Act, or HITECH, and their implementing regulations, which we collectively refer to as HIPAA, established several separate

criminal penalties for making false or fraudulent claims to insurance companies and other non-governmental payors of healthcare services.

Under HIPAA, these two additional federal crimes are:

“Healthcare Fraud”

and “False Statements

Relating to Healthcare Matters.”

The Healthcare Fraud statute prohibits knowingly and recklessly executing a scheme or artifice

to defraud any healthcare benefit program, including private payors.

A violation of this statute is a felony and may result in

fines, imprisonment or exclusion from government sponsored programs.

The False Statements Relating to Healthcare Matters statute

prohibits knowingly and willfully falsifying, concealing or covering up a material fact by any trick, scheme or device or making

any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits,

items or services.

These provisions are intended to punish some of the same conduct in the submission of claims to private payors

as the federal False Claims Act covers in connection with governmental health programs.

“Healthcare Fraud” and “False Statements Relating to Healthcare

Matters.” The Healthcare Fraud statute prohibits knowingly and recklessly executing a scheme or artifice to defraud any healthcare

benefit program, including private payors.

A violation of this statute is a felony and may result in fines, imprisonment or exclusion

from government sponsored programs.

The False Statements Relating to Healthcare Matters statute prohibits knowingly and willfully falsifying,

concealing or covering up a material fact by any trick, scheme or device or making any materially false, fictitious or fraudulent statement

in connection with the delivery of or payment for healthcare benefits, items or services.

These provisions are intended to punish some

of the same conduct in the submission of claims to private payors as the federal False Claims Act covers in connection with governmental

health programs.

addition, the Civil Monetary Penalties Law imposes civil administrative sanctions for, among other violations, inappropriate billing

of services to federally funded healthcare programs and employing or contracting with individuals or entities who are excluded

from participation in federally funded healthcare programs.

Moreover, a person who offers or transfers to a Medicare or Medicaid

beneficiary any remuneration, including waivers of copayments and deductible amounts (or any part thereof), that the person knows

or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier of

Medicare or Medicaid payable items or services may be liable for civil monetary penalties for each wrongful act.

certain cases, providers who routinely waive copayments and deductibles for Medicare and Medicaid beneficiaries can also be held

liable under the Anti-Kickback Statute and civil False Claims Act, which can impose additional penalties associated with the wrongful

One of the statutory exceptions to the prohibition is non-routine, unadvertised waivers of copayments or deductible amounts

based on individualized determinations of financial need or exhaustion of reasonable collection efforts.

Although this prohibition

applies only to federal healthcare program beneficiaries, the routine waivers of copayments and deductibles offered to patients

covered by commercial payers may implicate applicable state laws related to, among other things, unlawful schemes to defraud,

excessive fees for services, tortious interference with patient contracts and statutory or common law fraud.

of services to federally funded healthcare programs and employing or contracting with individuals or entities who are excluded from participation

in federally funded healthcare programs.

Moreover, a person who offers or transfers to a Medicare or Medicaid beneficiary any remuneration,

including waivers of copayments and deductible amounts (or any part thereof), that the person knows or should know is likely to influence

the beneficiary’s selection of a particular provider, practitioner or supplier of Medicare or Medicaid payable items or services

may be liable for civil monetary penalties for each wrongful act.

Moreover, in certain cases, providers who routinely waive copayments

and deductibles for Medicare and Medicaid beneficiaries can also be held liable under the Anti-Kickback Statute and civil False Claims

Act, which can impose additional penalties associated with the wrongful act.

One of the statutory exceptions to the prohibition is non-routine,

unadvertised waivers of copayments or deductible amounts based on individualized determinations of financial need or exhaustion of reasonable

collection efforts.

Although this prohibition applies only to federal healthcare program beneficiaries, the routine waivers of copayments

and deductibles offered to patients covered by commercial payers may implicate applicable state laws related to, among other things,

unlawful schemes to defraud, excessive fees for services, tortious interference with patient contracts and statutory or common law fraud.

Change Regulation

government and foreign governments are currently in the process of considering new or expanded laws to address climate change.

laws, if adopted, may include limitations on greenhouse gas (“ GHG ”) emissions, mandates that companies implement processes

to monitor and disclose climate-related matters, additional taxes or offset charges on specified energy sources, and other requirements.

Compliance with climate-related laws may be further complicated by different regulatory approaches and requirements in the various jurisdictions

in which we operate.

New or expanded climate-related laws could impose substantial costs on us.

Until the timing and extent of climate-related

laws are clarified, we cannot predict their potential effect on our capital expenditures or our results of operations .

Environmental

operations are subject to regulations under various federal, state, local and foreign laws concerning the environment, including laws

addressing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes, and the

cleanup of contaminated sites.

We could incur substantial costs, including cleanup costs, fines and civil or criminal sanctions and third-party

damage or personal injury claims, if in the future we were to violate or become liable under environmental laws.

We are not aware of

any costs or effects of our compliance with environmental laws.

Our Business Startups Act

April 2012, the Jumpstart Our Business Startups Act (“

JOBS Act ”) was enacted into law.

The JOBS Act provides,

among other things:

emerging growth companies ”

from certain financial disclosure and governance requirements for up to

five years and provides a new form of financing to small companies;

to certain provisions of the federal securities laws to simplify the sale of securities and increase the threshold number

of record holders required to trigger the reporting requirements of the Exchange Act;

April 2012, the Jumpstart Our Business Startups Act (“ JOBS Act ”) was enacted into law.

The JOBS Act provides, among

other things:

for “ emerging growth companies ” from certain financial disclosure and governance requirements for up to five years

and provides a new form of financing to small companies;

to certain provisions of the federal securities laws to simplify the sale of securities and increase the threshold number of record

holders required to trigger the reporting requirements of the Exchange Act;

of the general solicitation and general advertising prohibition for Rule 506 offerings;

of a new exemption for public offerings of securities in amounts not exceeding $50 million;

from registration by a non-reporting company of offers and sales of securities of up to $1,000,000 that comply with rules

to be adopted by the SEC pursuant to Section 4(6) of the Securities Act and exemption of such sales from state law registration,

documentation or offering requirements.

general, under the JOBS Act a company is an “

emerging growth company ”

if its initial public offering (“

of common equity securities was affected after December 8, 2011 and the company had less than $1.07 billion of total annual gross

revenues during its last completed fiscal year.

A company will no longer qualify as an “

emerging growth company ”

from registration by a non-reporting company of offers and sales of securities of up to $1,000,000 that comply with rules to be adopted

by the SEC pursuant to Section 4(6) of the Securities Act and exemption of such sales from state law registration, documentation

or offering requirements.

general, under the JOBS Act a company is an “ emerging growth company ” if its initial public offering (“ IPO ”)

of common equity securities was affected after December 8, 2011, and the company had less than $1.07 billion of total annual

gross revenues during its last completed fiscal year.

A company will no longer qualify as an “ emerging growth company ”

after the earliest of

completion of the fiscal year in which the company has total annual gross revenues of $1.07 billion or more,

completion of the fiscal year of the fifth anniversary of the company’s IPO;

company’s issuance of more than $1 billion in nonconvertible debt in the prior three-year period, or

company becoming a “

larger accelerated filer ”

as defined under the Exchange Act.

completion of the fiscal year of the fifth anniversary of the company’s IPO;

company’s issuance of more than $1 billion in nonconvertible debt in the prior three-year period, or

company becoming a “ larger accelerated filer ” as defined under the Exchange Act.

JOBS Act provides additional new guidelines and exemptions for non-reporting companies and for non-public offerings.

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that impact the Company are discussed below.

The financial disclosure in a registration statement filed by an “

emerging growth company ”

pursuant to the Securities Act, will differ from registration statements filed by other companies as follows:

financial statements required for only two fiscal years (provided that “

smaller reporting companies ”

as the Company are only required to provide two years of financial statements);

financial data required for only the fiscal years that were audited (provided that “

smaller reporting companies ”

The financial disclosure in a registration statement filed by an “ emerging growth company ” pursuant

to the Securities Act, will differ from registration statements filed by other companies as follows:

financial statements required for only two fiscal years (provided that “ smaller reporting companies ” such as the

Company are only required to provide two years of financial statements);

financial data required for only the fiscal years that were audited (provided that “ smaller reporting companies ”

such as the Company are not required to provide selected financial data as required by Item 301 of Regulation S-K);

compensation only needs to be presented in the limited format now required for “

smaller reporting companies ”.

the requirements for financial disclosure provided by Regulation S-K promulgated by the Rules and Regulations of the SEC already

provide certain of these exemptions for smaller reporting companies.

compensation only needs to be presented in the limited format now required for “ smaller reporting companies ”.

the requirements for financial disclosure provided by Regulation S-K promulgated by the Rules and Regulations of the SEC already provide

certain of these exemptions for smaller reporting companies.

The Company is a smaller reporting company.

Currently a smaller

reporting company is not required to file as part of its registration statement selected financial data and only needs to include

audited financial statements for its two most current fiscal years with no required tabular disclosure of contractual obligations.

JOBS Act also exempts the Company’s independent registered public accounting firm from having to comply with any rules adopted

by the Public Company Accounting Oversight Board (“

PCAOB ”) after the date of the JOBS Act’s enactment,

except as otherwise required by SEC rule.

JOBS Act further exempts an “

emerging growth company ”

from any requirement adopted by the PCAOB for mandatory

rotation of the Company’s accounting firm or for a supplemental auditor report about the audit.

Currently a smaller reporting

company is not required to file as part of its registration statement selected financial data and only needs to include audited financial

statements for its two most current fiscal years with no required tabular disclosure of contractual obligations.

JOBS Act also exempts the Company’s independent registered public accounting firm from having to comply with any rules adopted

by the Public Company Accounting Oversight Board (“ PCAOB ”) after the date of the JOBS Act’s enactment, except

as otherwise required by SEC rule.

JOBS Act further exempts an “ emerging growth company ” from any requirement adopted by the PCAOB for mandatory rotation

of the Company’s accounting firm or for a supplemental auditor report about the audit.

Control Attestation.

The JOBS Act also provides an exemption from the requirement of the Company’s independent registered

public accounting firm to file a report on the Company’s internal control over financial reporting, although management

of the Company is still required to file its report on the adequacy of the Company’s internal control over financial reporting.

102(a) of the JOBS Act exempts “

emerging growth companies ”

from the requirements in §14A(e) of the Exchange

Act for companies with a class of securities registered under the Exchange Act to hold stockholder votes for executive compensation

and golden parachutes.

The JOBS Act also provides an exemption from the requirement of the Company’s independent registered public

accounting firm to file a report on the Company’s internal control over financial reporting, although management of the Company

is still required to file its report on the adequacy of the Company’s internal control over financial reporting.

102(a) of the JOBS Act exempts “ emerging growth companies ” from the requirements in §14A(e) of the Exchange Act

for companies with a class of securities registered under the Exchange Act to hold stockholder votes for executive compensation and golden

Items of the JOBS Act.

The JOBS Act also provides that an “

emerging growth company ”

can communicate with

potential investors that are qualified institutional buyers or institutions that are accredited to determine interest in a contemplated

offering either prior to or after the date of filing the respective registration statement.

The JOBS Act also permits research

reports by a broker or dealer about an “

emerging growth company ”

regardless of whether such report provides

sufficient information for an investment decision.

In addition, the JOBS Act precludes the SEC and FINRA from adopting certain

restrictive rules or regulations regarding brokers, dealers and potential investors, communications with management and distribution

of research reports on the “

emerging growth company’s ”

initial public offerings (IPOs).

106 of the JOBS Act permits “

emerging growth companies ”

to submit registration statements under the Securities

Act on a confidential basis provided that the registration statement and all amendments thereto are publicly filed at least 21

days before the issuer conducts any road show.

This is intended to allow “

emerging growth companies ”

the IPO option without disclosing to the market the fact that it is seeking to go public or disclosing the information contained

in its registration statement until the company is ready to conduct a roadshow.

The JOBS Act also provides that an “ emerging growth company ” can communicate with potential

investors that are qualified institutional buyers or institutions that are accredited to determine interest in a contemplated offering

either prior to or after the date of filing the respective registration statement.

The JOBS Act also permits research reports by a broker

or dealer about an “ emerging growth company ” regardless of whether such report provides sufficient information for

an investment decision.

In addition, the JOBS Act precludes the SEC and FINRA from adopting certain restrictive rules or regulations

regarding brokers, dealers and potential investors, communications with management and distribution of research reports on the “ emerging

growth company’s ” initial public offerings (IPOs).

106 of the JOBS Act permits “ emerging growth companies ” to submit registration statements under the Securities Act

on a confidential basis provided that the registration statement and all amendments thereto are publicly filed at least 21 days before

the issuer conducts any road show (which time period has since been reduced to 15 days).

This is intended to allow “ emerging

growth companies ” to explore the IPO option without disclosing to the market the fact that it is seeking to go public or disclosing

the information contained in its registration statement until the company is ready to conduct a roadshow.

to Opt Out of Transition Period.

Section 102(b)(1) of the JOBS Act exempts “

emerging growth companies ”

from being required to comply with new or revised financial accounting standards until private companies (that is, those that

have not had a Securities Act registration statement declared effective or do not have a class of securities registered under

the Exchange Act) are required to comply with the new or revised financial accounting standard.

JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that

apply to non-emerging growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out

of the transition period.

Section 102(b)(1) of the JOBS Act exempts “ emerging growth companies ” from being

required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities

Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to

comply with the new or revised financial accounting standard.

JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to

non-emerging growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out of the transition

as Emerging Growth Company .

Our first sale of common equity securities pursuant to an effective registration statement under the

Securities Act occurred on or around May 2019.

As such, we will remain an emerging growth company, until no later than December 31, 2024,

the completion of the fiscal year of the fifth anniversary of the Company’s IPO.

and Development.

the last two fiscal years, Trxade.com, InventoryRx.com, Pharmabayonline, DelivMeds, RxGuru and Bonum Health have been developed

as proprietary software.

For the years ended December 31, 2020 and 2019, $662,726 and $647,140, respectively, was spent by the

Company in technology activities, which were included in General and Administrative expenses.

None of these expenses were borne

directly by customers.

of Compliance with Environmental Laws.

operations are subject to regulations under various federal, state, local and foreign laws concerning the environment, including

laws addressing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes,

and the cleanup of contaminated sites.

We could incur substantial costs, including cleanup costs, fines and civil or criminal

sanctions and third-party damage or personal injury claims, if in the future we were to violate or become liable under environmental

We are not aware of any costs or effects of our compliance with environmental laws.

the last two fiscal years, Trxade.com, DelivMeds, MedCheks Health Passport and Bonum Health have been developed as proprietary

For the years ended December 31, 2021, and 2020, $509,210 and $662,726, respectively, was

spent by the Company in research and development activities, which were included in general and administrative expenses.

None of these

expenses were borne directly by customers.

we have approximately 47 full-time employees.

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with performance and to provide the proper incentives to attract, retain and motivate employees to achieve superior results.

structure of our compensation programs balances incentives earnings for both short-term and long-term performance such as health

insurance, paid time off and flexibility schedules.

To empower employees to unleash their potential, we provide onboarding training,

development mentorship with C-suite executives, and one on one coaching.

The Company believes that its rich culture of inclusion

and diversity enables it to create, develop and fully leverage the strength of its workforce to exceed customer expectation and

meet its growth objectives.

The Company places a high value on diversity and inclusion.

The structure

of our compensation programs balances incentives earnings for both short-term and long-term performance such as health insurance, paid

time off and flexibility schedules.

To empower employees to unleash their potential, we provide onboarding training, development mentorship

with C-suite executives, and one on one coaching.

The Company believes that its rich culture of inclusion and diversity enables it to

create, develop and fully leverage the strength of its workforce to exceed customer expectation and meet its growth objectives.

places a high value on diversity and inclusion.

also utilize numerous outside consultants.

Our future success will depend partially on our ability to attract, retain and motivate

qualified personnel.

Our future success will depend partially on our ability to attract, retain and motivate qualified

We are not a party to any collective bargaining agreements and have not experienced any strikes or work stoppages.

We consider our relations with our employees to be satisfactory.

business is not directly affected by seasonal fluctuations but is affected indirectly by the fall and winter flu season, to the

extent it leads to an increased demand for certain generic pharmaceuticals.

our relations with our employees to be satisfactory.

business is not directly affected by seasonal fluctuations but is affected indirectly by the fall and winter flu season, to the extent

it leads to an increased demand for certain generic pharmaceuticals.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business