What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-03-28 compared with 2021-03-29 · 61 added, 467 removed, 5 unchanged (99% of the section changed)

FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

for Common Stock

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

MEDS ”, on February 13,

Prior to that, it traded on the OTCQB Market under the symbol “

TRXD ”.

At present, there is a limited

market for our common stock.

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

Prior to that, it traded on the OTCQB Market under the symbol “ TRXD ”.

At present, there is a limited market for our

common stock.

Stock and Preferred Stock Outstanding and Holders of Record

of March 26, 2021, we had 8,093,199 shares of common stock outstanding, held by 49 stockholders of record, not including holders

who hold their shares in street name, and no shares of Preferred Stock issued or outstanding.

have never paid or declared any cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable

We anticipate that we will retain all of our future earnings for use in the operation of our business and for general

corporate purposes.

of March 28, 2022, we had 8,181,041 shares of common stock outstanding, held by 39 stockholders of record, not including holders who

hold their shares in street name, and no shares of Preferred Stock issued or outstanding.

have never paid or declared any cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future.

We anticipate that we will retain all of our future earnings for use in the operation of our business and for general corporate purposes.

Any determination to pay dividends in the future will be at the discretion of our board of directors.

investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize

any future gains on their investments.

Accordingly, investors must rely

on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their

Sales of Unregistered Securities

disclosures below include information on recent sales of unregistered securities during the three months ended December 31, 2020

and from the period from January 1, 2021 to the filing date of this report, and do not include information which has previously

been included in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K:

October 2020, warrants to purchase 22,528 shares of common stock were exercised at $0.06 per share by Nikul Panchal, a non-executive

officer of the Company.

The Company issued 22,528 shares of common stock upon such exercise, and $1,351 in proceeds were received

in connection with such exercise.

the extent such issuance described above is deemed “

sold or offered ”

(and not issued under a no-sale theory),

we claim an exemption from registration pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D of the Securities Act, since

the foregoing issuance did not involve a public offering, the recipient was (a) an “

accredited investor ”;

(b) had access to similar documentation and information as would be required in a Registration Statement under the Securities

The securities are subject to transfer restrictions, and the certificates evidencing the securities contain an appropriate

legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration

or pursuant to an exemption therefrom.

disclosures below include information on recent sales of unregistered securities during the three months ended December 31, 2021, and

from the period from January 1, 2022, to the filing date of this report, and do not include information which has previously been included

in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K:

January 2022, warrants to purchase 14,584 shares of common stock were exercised with an exercise price of $0.06 per share;

issued 14,584 shares of common stock, and $875 in proceeds were received in connection with such exercise.

claim an exemption from registration pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D of the Securities Act, since the foregoing

issuances did not involve a public offering, the recipients were (a) “ accredited investors ”;

and/or (b) had access

to similar documentation and information as would be required in a Registration Statement under the Securities Act.

The securities

are subject to transfer restrictions, and the certificates evidencing the securities contain an appropriate legend stating that such

securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption

Purchases of Equity Securities

FINANCIAL DATA

registrant such as the Company, that qualifies as a smaller reporting company, as defined by §229.10(f)(1), is not required

to provide the information required by this Item.

MANAGEMENT’S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking

Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “

MD&A ”)

is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our

results of operations, financial condition, and cash flows.

MD&A is organized as follows:

of Operations .

An analysis of our financial results comparing the twelve months ended December 31, 2020 and 2019.

and Capital Resources .

An analysis of changes in our balance sheets and cash flows and discussion of our financial condition.

Accounting Policies .

Accounting estimates that we believe are important to understanding the assumptions and judgments

incorporated in our reported financial results and forecasts.

of Operations

following discussion of the Company’s historical performance and financial condition should be read together with the consolidated

financial statements and related notes in “

Financial Statements and Supplemental Data ”

of this Report.

This discussion contains forward-looking statements based on the views and beliefs of our management, as well

as assumptions and estimates made by our management.

Cautionary Statement Regarding Forward-Looking Information ”

These statements by their nature are subject to risks and uncertainties and are influenced by various factors.

As a consequence,

actual results may differ materially from those in the forward-looking statements.

Risk Factors ”

of this report for the discussion of risk factors.

For all periods presented, the consolidated statements of income and consolidated

balance sheet data have been adjusted for the reclassification of discontinued operations information, unless otherwise noted.

All references to years relate to the calendar year ended December 31 of the particular year.

of Operations

had working capital of $8,379,060 as of December 31, 2020.

With our current cash on hand, expected revenues, and based

on our current average monthly expenses, we do not anticipate the need for additional funding in order to continue our operations

at their current levels, and to pay the costs associated with being a public company, for the next 12 months.

We may require additional

funding in the future to expand or complete acquisitions.

The sources of this capital are expected to be equity investments and

notes payable.

Our plan for the next twelve months is to continue development of the IT used in the Company subsidiaries, which

it is anticipated that current cash on hand is able to fund and continue providing a quality product with excellent customer

service while also seeking to expand our operations organically or through acquisitions as funding and opportunities arise.

our business continues to grow, customer feedback will be integral in making small adjustments to improve the product and overall

customer experience.

In the event we require additional funding, we plan to raise that through the sale of debt or equity, which

may not be available on favorable terms, if at all, and may, if sold, cause significant dilution to existing stockholders.

we are unable to access additional capital moving forward, it may hurt our ability to grow and to generate future revenues.

Coronavirus (COVID-19)

December 2019, a novel strain of coronavirus, which causes the infectious disease known as COVID-19, was reported in Wuhan, China.

The World Health Organization declared COVID-19 a “Public Health Emergency of International Concern”

on January 30,

2020 and a global pandemic on March 11, 2020.

In March and April, many U.S.

states and local jurisdictions began issuing ‘stay-at-home’

For example, the state of Florida, where the Company’s principal business operations are, issued a ‘stay-at-home’

order effective on April 1, 2020, which remained in place, subject to certain exceptions, through June 2020, when the order was

gradually lifted until September 2020, when the order was completely lifted.

in general and Florida specifically, has

recently seen decreases in total new COVID-19 infections, however, it is unknown whether such decreases will continue, new strains

of the virus will cause numbers to increase and/or whether the state of Florida, or other jurisdictions in which we operate, will

issue new or expanded ‘stay-at-home’

orders, or how those orders, or others, may affect our operations.

date, we have been deemed an essential healthcare technology provider under applicable governmental orders based on the critical

nature of the products we offer and the community we serve.

As such, our business operations were not materially impacted by the

prior restrictions put in place by the State of Florida to slow the spread of COVID-19, which have since expired.

Additionally,

as shown in our results of operations below, we have to date, not experienced any significant material negative impact to our

operations, revenues or gross profit due to COVID-19.

We have however been adversely affected by reductions to, and interruptions

in, the delivery of supply chain pharmaceuticals that have had a negative impact on our wholesalers and certain technology outsourcing

in India and the Philippines due to the pandemic, which may become more frequent or material in the future.

We are carefully managing

our inventory supply network while we work to overcome these hopefully temporary challenges.

As a result of the above and other

unknown issues associated with the pandemic, our sales and operating results may be adversely impacted in the coming months.

full extent of the impact of COVID-19 on our business and operations currently cannot be estimated and will depend on a number

of factors including the scope and duration of the global pandemic.

the start of the pandemic, we have taken steps to prioritize the health and safety of our employees.

The Company’s employees

started working remotely around March 17, 2020, and our corporate office is currently planned to be closed through June 30, 2021,

unless the current situation improves.

we believe that we have sufficient cash on hand and will generate sufficient cash through operations to support our operations

for the foreseeable future;

however, we will continue to evaluate our business operations based on new information as it becomes

available and will make changes that we consider necessary in light of any new developments regarding the ongoing pandemic.

COVID-19 has had a major impact on businesses around the world, to date, the pandemic has not had a significant negative impact

on our business.

However, the future impact of COVID-19 on our business and operations is currently unknown.

The pandemic is developing

rapidly and the full extent to which COVID-19 will ultimately impact us depends on future unknowable developments, including the

duration and spread of the virus, the efficacy, availability and willingness of individuals to take vaccines, as well as potential

new seasonal outbreaks.

currently have three main revenue streams:

Trxade, Inc., our wholly-owned subsidiary, provides an online web-based buying and selling platform for licensed

pharmaceutical wholesalers (“

Suppliers ”) to sell products and services to licensed pharmacies

Customers ”).

The Company charges Suppliers a transaction fee, a percentage of the purchase price of the

prescription drugs and other products sold through its website service.

The Company holds no inventory and assumes no

responsibility for the shipment or delivery of any products or services from our website.

The Company considers itself an

agent for this revenue stream and as such, reports revenue as net.

Integra Pharma Solutions, LLC, our wholly-owned subsidiary, is a licensed wholesaler of brand, generic and non-drug products

to Customers.

The Company takes orders for products, creates invoices for each order and recognizes revenue at the time the

Customer receives the product.

Customer returns, to date, have not been material.

Community Specialty Pharmacy, LLC, our wholly-owned subsidiary, is a licensed retail pharmacy.

The Company fills

prescriptions for drugs written by a doctor and recognizes revenue at the time the patient confirms delivery of the

prescription.

Customer returns, to date, have not been material.

OF OPERATIONS

the Year Ended December 31, 2020 Compared to the Year Ended December 31, 2019

of Operations

following selected consolidated financial data should be read in conjunction with the consolidated financial statements and the

notes to these statements included in “

Financial Statements and Supplemental Data ”

of this Report.

years presented, the consolidated statements of income and consolidated balance sheet data set forth in this Form 10-K have been

adjusted for the reclassification of discontinued operations information, unless otherwise noted.

Fiscal Year Ended

December 31, 2020

Cost of Sales

Operating Expenses:

Loss on write off of software

Loss on Impairment of Goodwill

General and Administrative

Warrants and Options Expense

Total Operating Expense

Investment Loss

Loss on Extinguishment of Debt

Interest Expense

$ (2,536,051 )

revenues during the years ended December 31, 2020 and 2019 were from the Trxade platform, Community Specialty Pharmacy and Integra

Pharma Solutions.

Revenues increased by $9,686,256 for the 2020 year, compared to the prior year’s period.

In Trxade, Inc.,

revenue increased by $1,019,006, which is attributable to our sales department continuing to add customers throughout 2019 and

into 2020, through direct marketing and customer training and the availability of items from suppliers.

Integra Pharma Solutions

increased revenue to $9,877,067 for the year ended December 31, 2020, compared to $1,020,438 in the same period of 2019.

was mainly a result of sourcing items –

N95 masks, sanitizers and gloves –

i.e., PPE items that were needed in large

The Trxade Platform revenue increased 23% to $5,546,746, compared to $4,527,740, for the years ended December 31,

2020 and 2019, respectively.

The increase in revenue was a result of more product transactions through the platform and an increase

of average monthly unique users.

of Sales and gross profit were $11,415,198 and $5,707,322, for the year ended December 31, 2020 and $2,565,500 and

$4,870,764, for the year ended December 31, 2019.

As sales for PPE increased in 2020, the cost of sales increased.

profit as a percentage of sales was 33% for the year ended December 31, 2020, compared to 66% for the year ended December

The reason for the decrease in gross profit as a percentage of sales was a result of the orders of PPE related product

during the year ended December 31, 2020, which include a relatively high cost of sales.

In 2019, a larger percentage of our revenue

was from the Trxade Platform, which carries no cost of sales.

PPE sales increased due to the COVID-19 pandemic.

had $368,520 of loss on write off of software for the year ended December 31, 2019 in connection with our Bonum Health asset acquisition,

as the software did not have the needed capabilities.

Technology expenditures increased to $662,726 for 2020, compared to $647,140 for 2019, as the Company continued to develop apps

for customers.

had $725,973 of loss on impairment of goodwill for the year ended December 31, 2020, in connection with Community Specialty Pharmacy,

LLC, compared to no loss on impairment of goodwill in the prior period.

and administrative expenses (less stock-based compensation expense and technology) increased for the year ended December 31, 2020

to $4,962,237, compared to $3,448,052 for the comparable period in 2019.

The increase was mainly due to increases in employee

compensation, legal expenses, filing fees and marketing expenses as a result of expanding and developing the newer business units.

stock-based compensation expense increased by 561.1% for the year ended December 31, 2020, compared to the prior year’s

period due to the value of warrants granted to consultants, 2019 bonus shares issued to executives, shares issued to directors,

2020 bonus accruals and employee option grants, as described in greater detail under “

Statements and Supplemental Data ”–

Note 4 –

Stockholders’

Equity ”

had no other income for the year ended December 31, 2020, compared to other income of $72,075 for the year ended December 31,

2019, which was from the recovery of disputed charges and local economic incentives.

had $250,000 of investment loss for the year ended December 31, 2019 in connection with the SyncHealth, LLC joint venture, which

was terminated effective as of January 31, 2020.

had $178,500 of loss on extinguishment of debt for the year ended December 31, 2019, in connection with the October 2019 conversion

of $175,000 of convertible debt and notes payable, which was not represented in the year ended December 31, 2020.

had interest expense of $29,389 for the year ended December 31, 2020, compared to interest expense of $53,227 for the year ended

December 31, 2019, which decreased due to decreases in the amount of outstanding debt the Company had from $300,000 to $225,000

at the years ended December 31, 2019 and 2020, respectively.

loss increased by $2,251,623, to a net loss of $2,536,051 for the year ended December 31, 2020, compared to net

loss of $284,428 for the year ended December 31, 2019, mainly due to the increase in general and administrative expenses associated

with the value of the 2019 bonus stock award grants issued to management, as described in greater detail under “

Financial Statements and Supplemental Data ”–

Note 4 –

Stockholders’

Equity ”,

offset partially by the increase in gross profit.

and Capital Resources

and Cash Equivalents

and cash equivalents were $5,919,578 at December 31, 2020.

We expect that our future available capital resources will consist

primarily of cash generated from operations, remaining cash balances, borrowings, and any additional funds raised through sales

of debt and/or equity.

and cash equivalents, current assets , current liabilities, short term debt and working capital at the end of each period

were as follows:

December 31, 2020

December 31, 2019

Current assets (excluding cash)

Current liabilities (excluding short term debt)

Short term debt*

Working Capital

Short term notes payable –

related parties.

principal sources of liquidity during the years ended December 31, 2020 and 2019 have been cash provided by operations, equity

capital and borrowings under various debt arrangements.

Our principal uses of cash have been for operating expenses and acquisitions.

We anticipate these uses will continue to be our principal uses of cash in the future.

increase in cash and cash equivalents from 2019 was primarily due to equity capital raised in connection with the underwritten

offering discussed below.

The increase in our current assets was primarily due to higher cash.

Cash and other current assets increased

by $3,047,885 and $2,370,457, respectively.

increase in current assets (excluding cash) by $2,370,457 from 2019 was primarily due to increases in inventory purchases

of PPE items and inventory deposits.

increase in current liabilities from 2019 is primarily due to an increase in accrued liabilities from franchise tax and professional

Current liabilities increased by $96,422.

February 18, 2020, we sold 806,452 shares of common stock in a firm commitment underwritten offering and on February 21, 2020, we sold

an additional 115,767 shares of common stock in the offering in connection with the exercise of an overallotment option.

The shares were

sold at a public offering price of $6.50 per share.

The Company paid the underwriters a cash fee equal to 8% of the aggregate gross proceeds

received by the Company in connection with the offering and reimbursed certain expenses.

The Company received net proceeds of approximately

$5.3 million from the offering.

The Company used the net proceeds from the offering for working capital and general corporate purposes

with approximately $3.4 million remaining in cash.

had $225,000 of amounts owed to related parties as of December 31, 2020, which represented amounts owed to Nikul Panchal, a non-executive

officer of the Company, accruing simple interest at the rate of 10% per annum, payable annually, and having a maturity date in

October 15, 2021.

Outlook cash explanation.

primary objectives for 2021 are to continue the development of the Trxade Platform, DelivMeds and Bonum Health and increase our

client base and operational revenue.

As a result of our cash generated through operations and the cash raised in the 2020 offering

discussed above, we believe we have sufficient cash to support our operations for the foreseeable future.

There can be no assurance

that our operations will generate significant positive cash flow, or that additional funds will be available to us, through borrowings

or otherwise, on favorable terms if required in the future, or at all.

estimate our operating expenses and working capital requirements for the next 12 months to be approximately as follows:

Expenses for 2021

and administrative (1)

wages and payroll, legal and accounting, marketing, rent and web development.

inception, we have funded our operations primarily through debt and equity capital raises and operational revenue.

In 2019, common stock

was sold for approximately $2,455,000.

In 2020, common stock was sold for net proceeds of $5,262,068.

may require additional funding in the future to expand or complete acquisitions.

The sources of this capital are expected to be

equity investments and notes payable.

Our plan for the next twelve months is to continue using the same marketing and management

strategies and continue providing a quality product with excellent customer service while also seeking to expand our operations

organically or through acquisitions, as funding and opportunities arise.

As our business continues to grow, customer feedback

will be integral in making small adjustments to improve our products and overall customer experience.

In the event we require

additional funding, we plan to raise that through the sale of debt or equity, which may not be available on favorable terms, if

at all, and may, if sold, cause significant dilution to existing stockholders.

If we are unable to access additional capital moving

forward, it may hurt our ability to grow and to generate future revenues.

believe that we have adequate cash to implement our plan to operate a business-to-business web-based marketplace focused on the

United States pharmaceutical industry.

Our core service is designed to bring the nation’s independent pharmacies and accredited

national suppliers of pharmaceuticals together to provide efficient and transparent buying and selling opportunities.

following table summarizes our Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2020 and 2019:

December 31, 2020

December 31, 2019

Percent Change

$ (2,536,051 )

$ (2,251,623 )

Net Cash Provided by (used in):

Operating Activities

Investing Activities

Financing Activities

Net increase (decrease) in cash

used by operations for the fiscal year ended December 31, 2020 was $2,214,786.

This compared to $141,775 of cash provided by operating

activities for the fiscal year ended 2019.

The increase was primarily due to inventory purchases of PPE items and inventory deposits,

and the inventory write-down of $1,218,020.

activities used cash of $37,505 and $332,252 for the years ended December 31, 2020 and 2019, respectively.

In 2019, the amount included

cash used to purchase fixed assets associated with Bonum Health, LLC hub kiosks, totalling $164,981 ($82,252 in cash and $82,729

in accounts payable), and the investment in connection with the joint venture with SyncHealth, LLC, totalling $250,000, which

was fully written off during the year ended December 31, 2019.

provided by financing activities for 2019 included the repayment of short-term debt of $262,552 and $2,455,000 in common stock

proceeds from the sale of stock.

Cash provided by financing activities for 2020, included the sale of common stock in the February

2020 underwritten offering which generated $5,994,424 of proceeds and $5,300,175 in cash to the Company after expenses,

as described in greater detail above, and the exercise of warrants and options which generated cash of $38,107.

Obligations and Commitments.

addition to our long-term debt obligations to our various lenders, we have certain other contractual working capital obligations,

including contractual purchase obligations related to various supply contracts.

following table summarizes our contractual obligations as of December 31, 2020:

Payments due by Period

Contractual Obligations

Less than 1 year

More than 5 years

Short and Long-term debt obligations

Operating lease obligations

Total Contractual obligations

Sheet Arrangements

had no outstanding off-balance sheet arrangements as of December 31, 2020.

Accounting Policies

discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements,

which have been prepared in accordance with accounting principles generally accepted in the United States of America.

The preparation

of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities

and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales

and expenses for each period.

The following represents a summary of our critical accounting policies, defined as those policies

that we believe are the most important to the portrayal of our financial condition and results of operations and that require

management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the

effects of matters that are inherently uncertain.

general, the Company accounts for revenue recognition in accordance with Financial Accounting Standards Board (“

FASB ”)

Accounting Standards Codification (“

ASC ”) 606, “

Revenue from Contracts with Customers.

Company, through its wholly-owned subsidiary, Trxade, Inc., provides an online website service, a buying and selling marketplace

for licensed Pharmaceutical Wholesalers to sell products and services to licensed Pharmacies.

The Company charges Suppliers a

transaction fee, a percentage of the purchase price of the Prescription Drugs and other products sold through its website service.

The fulfillment of confirmed orders, including delivery and shipment of Prescription Drugs and other products, is the responsibility

of the Supplier and not of the Company.

The Company holds no inventory and assumes no responsibility for the shipment or delivery

of any products or services from our website.

The Company considers itself an agent for this revenue stream and as such, reports

revenue as net.

Identify the contract with the customer –

the Company’s Terms and Use Agreement is acknowledged

between the Wholesaler and the Company which outlines the terms and conditions.

The collection is probable based on the credit

evaluation of the Wholesaler.

Identify the performance obligations in the contract –

The Company provides to the

Supplier access to the online website, uploading of catalogs of products and Dashboard access to review status of inventory posted

and processed orders.

The Agreement requires the supplier to provide a catalog of pharmaceuticals for posting on the platform,

deliver the pharmaceuticals and upon shipment remit the stated platform fee.

Determine the transaction price –

The Fee Agreement outlines the fee based on the type of product, generic, brand or non-drug.

There are no discounts for volume

of transactions or early payment of invoices.

Allocate the transaction price –

The Fee Agreement outlines the

There is no difference between contract price and “

stand-alone selling price ”.

Recognize revenue

when or as the entity satisfies a performance obligation –

Revenue is recognized the day the order has been processed by

the Supplier.

Pharma Solutions, LLC, the Company’s wholly-owned subsidiary, is a licensed wholesaler and sells to licensed pharmacies

brand, generic and non-drug products.

The Company takes orders for product and creates invoices for each order and recognizes

revenue at the time the Customer receives the product.

Customer returns are not material.

Identify the contract with

the customer –

The Company requires that an application and a credit card for payment is completed by the Customer prior

to the first order.

Each transaction is evidenced by an order form sent by the customer and an invoice for the product is sent

by the Company.

The collection is probable based on the application and credit card information provided prior to the first order.

Identify the performance obligations in the contract –

Each order is distinct and evidenced by the shipping order

Determine the transaction price –

The consideration is variable if product is returned.

The variability

is determined based on the return policy of the product manufacturer.

There are no sales or volume discounts.

The transaction

price is determined at the time of the order evidenced by the invoice.

Allocate the transaction price –

is no difference between contract price and “

stand-alone selling price ”.

Recognize revenue when

or as the entity satisfies a performance obligation - The Revenue is recognized when the Customer receives the product.

Specialty Pharmacy, LLC, the Company’s wholly-owned subsidiary, is in the retail pharmacy business.

The Company fills prescriptions

for drugs written by a doctor and recognizes revenue at the time the patient confirms delivery of the prescription.

Customer returns

are not material.

Identify the contract with the customer –

The prescription is written by a doctor for a Customer

and delivered to the Company.

The prescription identifies the performance obligations in the contract.

The Company fills the prescription

and delivers to the Customer the prescription, fulfilling the contract.

The collection is probable because there is confirmation

that the customer has insurance for the reimbursement to the Company prior to filling of the prescription.

the performance obligations in the contract –

Each prescription is distinct to the Customer.

Determine the transaction

price –

The consideration is not variable.

The transaction price is determined to be the price of prescription at the time

of delivery which considers the expected reimbursements from third party payors (e.g., pharmacy benefit managers, insurance companies

and government agencies).

Allocate the transaction price –

The price of the prescription invoiced represents

the expected amount of reimbursement from third party payors.

There is no difference between contract price and “

selling price ”.

Recognize revenue when or as the entity satisfies a performance obligation –

is recognized upon the delivery of the prescription.

Company accounts for stock-based compensation to employees in accordance with ASC 718, “

Compensation-Stock Compensation ”.

ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments, including

stock options, based on the grant date fair value of the award and to recognize it as compensation expense over the period the

employee is required to provide service in exchange for the award, usually the vesting period.

Stock option forfeitures are recognized

at the date of employee termination.

Effective January 1, 2019, the Company adopted ASU 2018-07 for the accounting of share-based

payments granted to non-employees for goods and services.

ISSUED ACCOUNTING STANDARDS

more information on recently issued accounting standards, see “

Note 2 - Summary of Significant Accounting Policies ”

to the Notes to Consolidated Financial Statements included herein under “

Financial Statements and Supplemental

Data ”.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

to Item 305(e) of Regulation S-K (§

229.305(e)), the Company is not required to provide the information required by this

Item as it is a “

smaller reporting company, ”

as defined by Rule 229.10(f)(1).

following table sets forth share repurchase activity for the respective periods:

Total Number of Shares Purchased

Paid Per Share

Total Number of Shares Purchased

as Part of Publicly Announced Plans or Programs

Dollar Value of

Shares that May Yet Be Purchased Under the Plans or Programs (1)

Shares that May Yet Be Purchased Under the Plans or Programs (2)

October 1, 2021 – October 31, 2021

November 1, 2021 – November 30, 2021

December 1, 2021 – December 31, 2021

On May 27, 2021, our Board of Directors authorized the repurchase up to $1 million of the currently outstanding shares of the Company’s

common stock.

Under the stock repurchase program, shares may be repurchased from time to time in the open market or through negotiated

transactions at prevailing market rates, or by other means in accordance with federal securities laws.

Repurchases will be made at management’s

discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject

to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s

financial performance.

Open market purchases will be conducted in accordance with the limitations set forth in Rule 10b-18 of Exchange

Act and other applicable legal requirements.

Repurchases may also be made under a Rule 10b5-1 plan.

There was no time frame or expiration

date for the repurchase program, and such program was to remain in place until a maximum of $1.0 million of the Company’s common

stock had been repurchased or until such program was suspended or discontinued by the Board of Directors.

July 18, 2021, our Board of Directors approved an “at-the-market” offering and paused the Stock Repurchase Program until

the offering is complete.

July 22, 2021, our Board of Directors delayed the “at-the-market” offering and reactivated the Stock Repurchase Program.

August 5, 2021, our Board of Directors paused the Stock Repurchase Program until a planned “at-the-market” offering was complete,

which “at-the-market” offering was terminated effective on December 5, 2021.

no dollar amount of shares may be purchased pursuant to the terms of the Stock Repurchase Program, which as discussed in footnote (2)

below, has been modified to allow for the repurchase of 100,000 shares of common stock instead of a dollar amount.

On December 10, 2021, the Board of Directors authorized and approved the resumption of the Company’s prior share repurchase

program (as modified).

The share repurchase program as approved by the Board of Directors on December 10, 2021, modified the prior repurchase

program to allow for the repurchase of up to 100,000 of the currently outstanding shares of the Company’s common stock.

no time frame for the repurchase program, and such program will remain in place until a maximum of 100,000 shares of the Company’s

common stock have been repurchased or until such program is discontinued by the Board of Directors.

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 5. Market for Registrant’s Common Equity