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Item 8. Financial Statements and Supplementary Data

2024-04-22 compared with 2023-03-27 · 1207 added, 868 removed, 230 unchanged (90% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

STATEMENTS AND SUPPLEMENTAL DATA

OF CONTENTS TO FINANCIAL STATEMENTS

1 unchanged sentence

Report of Independent Registered Public Accounting Firm (Firm ID:

Report of the Independent Registered Public Accounting Firm (MaloneBailey,

LLP, Houston, Texas, Firm ID:

Consolidated Balance Sheets

4 unchanged sentences

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

TRxADE HEALTH, INC.

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheets of TRxADE HEALTH, INC.

and its subsidiaries (collectively, the “Company”) as of December 31, 2022 and 2021,

and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended,

and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present

fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of their operations

and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Matter

The accompanying financial statements have

been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company

has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue

as a going concern.

Management’s plans in regard to these matters are also described in Note 2.

The financial statements do not include

any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with

the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

the Board of Directors and

of TRxADE HEALTH Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheet of TRxADE Health, Inc.

(the Company) as of December 31, 2023, and the related

consolidated statements of operations, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively

referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended then ended,

in conformity with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that

respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as

evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

of a matter – Going concern

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note

2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises

substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter

in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,

providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

value of acquired intangible assets

of the matter

discussed in Note 1 and Note 3 to the consolidated financial statements, on July 31, 2023, the Company acquired Superlatus, Inc.

transaction accounted for as a business combination.

As a result of the transaction, the Company recognized acquired technology associated

with the generation of future income.

The acquisition-date fair value of the acquired technology was $9.8 million.

identified the evaluation of the acquisition-date fair value of the acquired technology as a critical audit matter.

A high degree of

subjective auditor judgment was required to evaluate the key assumptions within the discounted cash flows model used to estimate the

acquisition-date fair value of the acquired technology, specifically the revenue growth rate, margin, and discount rate.

There was limited

observable market information related to these assumptions and the estimated acquisition-date fair value of the acquired technology was

sensitive to minor changes in such assumptions.

We Addressed the Matter in our Audit

following are the primary procedures we performed to address this critical audit matter.

evaluated the Company’s revenue growth rate and margin assumptions by comparing them to the pre-acquisition budget and the

Company’s historical financial results.

evaluated the discount rate used by comparing it to a discount rate that was developed using publicly available market data for comparable

compared the revenue growth rate, margin, to those of comparable entities

validated the mathematical accuracy of the management’s calculations.

of the Matter

reflected in the Company’s consolidated financial statements at December 31, 2023, the Company impaired all goodwill as of December

As disclosed in Notes 1 to the consolidated financial statements, goodwill is tested for impairment at least

annually or more frequently if indicators of impairment require the performance of an interim impairment assessment.

As a result of these

assessments, management concluded that there was an impairment to goodwill for the year ended December 31, 2023, in the amount of $5.1

management’s impairment tests of goodwill is complex and highly judgmental due to the significant measurement uncertainty in determining

the fair values of the reporting units.

In particular, the fair value estimates of the reporting units were sensitive to changes in significant

assumptions such as discount rates, revenue growth rates, operating margins, estimated spending on capital expenditures, terminal growth

rates, and comparable company specific information.

These assumptions are affected by current and expected future market or economic

We Addressed the Matter in our Audit

audit procedures related to the selection of the discount rates used and forecasts of future net sales, operating margins, operating

expenses, and other market and economic data of the reporting units, involved:

an understanding of the Company’s process and related controls to evaluate goodwill for impairment.

the reasonableness of managements forecasts of future net sales, operating margins, and operating expenses by comparing the forecasts

to historical results, marketing plans relevant economic factors, and other comparable company and industry information.

We have served as the Company’s auditor since 2023

San Diego, California

April 22, 2024

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of

on the Financial Statements

have audited the accompanying consolidated balance sheet of TRxADE HEALTH, INC.

(the “Company”) as of December 31, 2022,

and the related statements of operations, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively

referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects,

the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then

ended, in conformity with accounting principles generally accepted in the United States of America.

Concern Matter

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note

2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises

substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

MaloneBailey, LLP

www.malonebailey.com

have served as the Company’s auditor since 2013.

have served as the Company’s auditor from 2013 to 2023.

Balance Sheets

3 unchanged sentences

Prepaid assets

Notes receivable

Other receivables

Current assets of discontinued operations

Total Current Assets

1 unchanged sentence

Intangible assets and capitalized software, net

Security deposits

Operating lease right-of-use assets

Noncurrent assets of discontinued operations

Liabilities and Shareholders’ Equity

4 unchanged sentences

Contingent funding liabilities

Current portion lease liabilities

Lease liabilities – current portion

Notes payable – current portion

Warrant liability

Notes payable— related party

Purchase price payable

Current liabilities of discontinued operations

Total Current liabilities

Long Term Liabilities

Other long-term liabilities — leases

Notes payable- related party

Lease liabilities – net of current portion

Notes payable

Total Liabilities

3 unchanged sentences

none issued and outstanding as of December 31, 2023 and December 31, 2022

Series B preferred stock, $ 0.00001 par value;

787,754 shares authorized;

15,759 outstanding as of December 31, 2023, and none as December 31, 2022

Series C preferred stock, $ 0.00001 par value;

1,000 shares authorized;

290 issued and outstanding as of December 31, 2023, and none as of December 31, 2022

Preferred stock value

Common stock, $ 0.00001 par value;

15 unchanged sentences

Operating Expenses:

Impairment of intangible asset

Loss on inventory investment

Loss on write-down of inventory

Wage and salary expense

7 unchanged sentences

( 2,915,969 )

Other income (expense)

Nonoperating Income (Expense)

Change in fair value of warrant liability

Interest income

Goodwill impairment

( 5,129,115 )

Gain on disposal of asset

Interest expense

Total nonoperating expense

( 1,198,346 )

Total nonoperating income (expense)

( 6,457,140 )

Net loss from continuing operations

( 13,720,546 )

( 2,403,442 )

Net loss on discontinued operations

( 4,123,028 )

( 1,506,426 )

( 17,843,574 )

( 3,909,868 )

Net loss attributable to TRxADE Health, Inc.

2 unchanged sentences

Net loss attributable to non-controlling interests

Net loss per common share — basic and diluted

Weighted average common shares outstanding - basic and diluted

Net loss per common share from continuing operations

Net loss per common share from discontinued operations

Net loss attributable to common stockholders

Weighted average common shares outstanding

accompanying notes are an integral part of the consolidated financial statements.

2 unchanged sentences

Preferred Stock

Series C Preferred

Non-Controlling

Accumulated Deficit

Interest in Subsidiary

Stockholders’ Equity

Stockholders’

Balance at December 31, 2021

$ ( 16,247,437 )

Capital Contributions

Capital Distribution

Common stock issued for services

Common stock issued for placement, net issuance costs

Warrants exercised for cash

Warrants expense

Option exercised for cash

Options expense

3 unchanged sentences

$ ( 19,719,536 )

Capital Contributions

Capital Distribution

$ ( 420,269 )

$ ( 19,719,536 )

$ ( 420,269 )

Common stock issued for services

Common stock issued for placement, net issuance costs

Warrants exercised for cash

Options expense

Reverse split rounding adjustment

Disposition of assets

Shares issued pursuant to merger agreement

Shares issued pursuant to securities purchase agreement

( 17,843,574 )

14 unchanged sentences

Bad debt expense

Warrant Expense

Loss on write-off of intangible asset

Loss on write-down of inventory

Loss on inventory investment

Goodwill impairment

Loss on inventory investments

1 unchanged sentence

Amortization of right-of-use assets

Amortization of intangible assets

Changes in operating assets and liabilities:

2 unchanged sentences

Other receivables

Right-of-use assets

Lease liability

1 unchanged sentence

Accrued liabilities

Purchase price payable

Current liabilities

Warrant liability

Customer deposits

cash used in operating activities

Net cash used in operating activities from continuing operations

( 1,592,424 )

Net cash used in operating activities from discontinued operations

( 1,365,648 )

Cash flows from investing activities:

Purchase of fixed assets

Sale of fixed assets

Funds acquired through acquisitions

Proceeds from sale of fixed assets

Investment in capitalized software

Net cash used in investing activities

Net cash (used in) investing activities from continuing operations

Net cash provided by investing activities from discontinued operations

Cash flows from financing activities:

Repayments of Promissory Notes - Related Parties

Proceeds from the issuance of debt

Repayment of debt

Repayment of contingent liability

Distributions to non-controlling interest

( 1,043,107 )

Proceeds from sale of future revenue

1 unchanged sentence

Proceeds from exercise of warrants

Proceeds from securities purchase agreement

Proceeds from issuance of common stock, net of issuance costs

Net cash provided by financing activities

Net cash provided by (used in) financing activities from continuing operations

Net cash (used in) financing activities from discontinued operations

Net decrease in cash

( 2,027,684 )

( 2,797,000 )

Cash at beginning of the year

4 unchanged sentences

Non-Cash Transactions

premium financed

Insurance premium financed

Note issued as SOSRx contribution

Not cancelled from SORx agreement termination

Intangible asset contribution from non-controlling interest

Disposition of assets, related party

Issuance of note receivable

accompanying notes are an integral part of the consolidated financial statements.

1 unchanged sentence

the years ended December 31, 2023 and 2022

1 – ORGANIZATION

(“ we ”, “ our ”, “ Trxade ”, and the “ Company ”) owns

100 % of Trxade, INC., Integra Pharma Solutions, LLC, Community Specialty Pharmacy, LLC, Alliance Pharma Solutions, LLC, Bonum Health,

LLC and MedCheks, LLC (from January 2021 to December 2021, when it was dissolved).

The merger of Trxade, Inc.

and TRxADE HEALTH, INC.

occurred in May 2013.

Community Specialty Pharmacy was acquired in October 2018.

operates a web-based market platform that enables commerce among healthcare buyers and sellers of pharmaceuticals, accessories and

Pharma Solutions, LLC is a licensed pharmaceutical wholesaler and sells brand, generic and non-drug products.

Specialty Pharmacy, LLC is an accredited independent retail pharmacy with a focus on specialty medications and a community-based model

offering home delivery services to patients.

Pharma Solutions, LLC (d.b.a.

DelivMeds) has developed a same day Pharma delivery software – Delivmeds.com and invested in SyncHealth

MSO, LLC a managed services organization in January 2019, which investment was divested in February 2020.

Health, LLC, was formed to hold certain telehealth assets acquired in October 2019.

The “ Bonum Health Hub ” was launched

in November 2019 and was expected to be operational in April 2020;

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 Loss on Inventory Investments of $ 143,891

for the year ended December 31, 2021.

The Bonum Health mobile application 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.

LLC was formed 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 Health”).

SOSRx LLC, the

created entity relating to the relationship, a Delaware limited liability company, was formed in February 2022, and is owned 51 % by the

Company and 49 % by Exchange Health.

LLC, 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.

This product has been discontinued and MedCheks, LLC was subsequently dissolved

in December 2021.

October 9, 2019, the Company’s Board of Directors, and on October 15, 2019, stockholders holding a majority of the Company’s

outstanding voting shares, approved resolutions authorizing a reverse stock split of the outstanding shares of the Company’s common

stock in the range from one-for-two (1-for-2) to one-for-ten (1-for-10) and provided authority to the Company’s 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

adjustments were made to the conversion and exercise prices of the Company’s outstanding warrants and stock options, and to the

number of shares issued and issuable under the Company’s stock incentive plans in connection with the Reverse Stock Split.

Reverse Stock Split did not affect any stockholder’s ownership percentage of the Company’s common stock, except to the limited

extent that the Reverse Stock Split resulted in any stockholder owning a fractional share.

Fractional shares of common stock were rounded

up to the nearest whole share based on each holder’s aggregate ownership of the Company.

All issued and outstanding shares of common

stock, options and warrants to purchase common stock and per share amounts contained in the financial statements, have been retroactively

adjusted to reflect the Reverse Stock Split for all periods presented.

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States

of America (“ GAAP ”) in all material respects and have been consistently applied in preparing the accompanying financial

summary of significant accounting policies presented below is designed to assist in understanding the Company’s financial statements.

Such financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their

integrity and objectivity.

1 – ORGANIZATION AND BASIS OF PRESENTATION

(“ we ”, “ our ”, “ Trxade ”, and the “ Company ”)

owns as of December 31, 2023, 100 %

of Trxade, Inc.

and Integra Pharma Solutions, LLC, Bonum Health,

LLC, Superlatus, Inc.

and its wholly-owned subsidiaries, Sapientia Technologies, LLC (“Sapientia”), Superlatus Food

Service Holding Company, Superlatus PD Holding Company, and The Urgent Company, Inc.

On July 31, 2023, the Company completed a merger

transaction that resulted in with Superlatus, Inc.

becoming a wholly owned subsidiary of the Company (see “Merger”,

On September 27, 2023, the Company acquired The Urgent Company, Inc.

and its related subsidiaries (see Note 3).

the year ended December 31, 2023, Trxade, Inc., operated a web-based market platform that enables commerce among healthcare buyers and

sellers of pharmaceuticals, accessories and services.

Pharma Solutions, LLC (“IPS”, d.b.a.

Trxade Prime), is a licensed pharmaceutical wholesaler and sells brand, generic and

non-drug products to customers.

IPS customers include all healthcare markets including government organizations, hospitals, clinics and

independent pharmacies nationwide.

Specialty Pharmacy, LLC, (“CSP”) is an accredited independent retail pharmacy with a focus on a community-based model offering

home delivery services to patients.

Pharma Solutions, LLC (“APS”, d.b.a.

DelivMeds) is currently being rebranded and the consumer-based app is still being developed.

To date, the Company has not generated any revenue from this product.

January 20, 2023, the Company entered into Membership Interest Purchase Agreements to sell 100 % of the outstanding membership interests

of the Company’s subsidiaries, CSP and APS.

The Company will receive consideration in the amount of $ 125,000 for APS and $ 100,000

The Company also agreed to enter into a Master Service Agreement to operate the businesses prior to closing.

Additional amounts

owed to the Company as a result of this Master Service Agreement totaled $ 1,075,000 as of the closing date of August 22, 2023 (see Note

3 and Note 7).

Health, LLC (“Bonum Health”), was formed to hold certain telehealth assets acquired in October 2019.

The “Bonum Health

Hub” was launched in February 2020;

however, the Company does not anticipate installations moving forward.

The Bonum Health mobile

application 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.

LLC (“SOSRx”) was formed on February 15, 2022.

The Company entered into a relationship with Exchange Health, LLC (“Exchange

Health”), a technology company providing an online platform for manufacturers and suppliers to sell and purchase pharmaceuticals.

SOSRx, a Delaware limited liability company, was formed, which was owned 51 % by the Company and 49 % by Exchange Health.

SOSRx did not

generate material revenue and in February of 2023, the Company voluntarily withdrew from the joint venture agreement.

As part of the

voluntary withdrawal the Company has recorded a loss of $ 352,244 from disposal of assets, which is included in net loss on discontinued

operations in the audited consolidated statement of operations in the amount of for the year ended December 31, 2023.

July 14, 2023, the Company entered into an Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”) with

Superlatus, Inc., a U.S.-based holding company of food products and distribution capabilities (“Superlatus”) and Foods Merger

Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”).

is a diversified food technology company with distribution capabilities and systems to optimize food security and population health via

innovative Consumer Packaged Goods (“CPG”) products, agritech, foodtech, plant-based proteins and alt-protein and includes

wholly-owned subsidiary, Sapientia, Inc.

(“Sapientia”), a food tech business.

July 31, 2023 (the “Closing Date”), the Company completed its acquisition of Superlatus in accordance with the terms and

conditions of the Merger Agreement (the “Merger”), pursuant to which the Company acquired Superlatus by way of a merger of

the Merger Sub with and into Superlatus, with Superlatus being a wholly owned subsidiary of the Company and the surviving entity in the

the terms of the Merger Agreement, at the closing of the Merger (the “Closing”), shareholders of Superlatus received in aggregate

136,441 shares of common stock of the Company, representing 19.99 % of the then total issued and outstanding common stock of the Company

after the consummation of the Merger and 306,855 shares of Company’s Series B Preferred Stock, par value $ 0.00001 per share (the

“Series B Preferred Stock”), with a conversion ratio of 100 shares of Series B Preferred Stock to one share of common stock.

At Closing, the value of the common stock was $ 7.30 per share, resulting in a total value of $ 225,000,169 .

Upon consummation of the Merger,

the Company continued to trade under the current ticker symbol “MEDS.”

a condition and inducement to Superlatus’ willingness to enter into the Merger Agreement, on June 28, 2023, Suren Ajjarapu and

Prashant Patel (the “Principal Stockholders”) entered into an agreement with TRxADE (the “Stock Swap Agreement”),

pursuant to which, TRxADE was to transfer all of the shares or membership interest of the operating subsidiaries currently owned by TRxADE

to Principal Stockholders, in exchange for Suran Ajjarapu to surrender 85,000 share of common stock of TRxADE and Prashant Patel to surrender

81,666 shares of the common stock of TRxADE (the “Stock Swap Transaction”).

The closing of the Stock Swap Transaction was

to take place simultaneously with the approval of TRxADE stockholders of the conversion of the Series B preferred stock into common stock.

As of the date of this filing, TRxADE stockholders have not approved the conversion.

connection with the Merger, effective one (1) business day immediately prior to the Closing Date (the “MEDS Rights Record Date”),

the Company issued to the shareholders of the Company as of the MEDS Rights Record Date, including the independent directors who are

entitled to certain amount of common stock of the Company in connection with their 2023 annual compensation and regardless of whether

the common stock has been issued or vest before the MEDS Rights Records Date (collectively, the “MEDS Rights Shareholders”)

a non-transferrable right to receive one share of common stock of the Company at no cost (the “MEDS Rights”), with seven

(7) MEDS Rights issued per share of common stock of the Company held as of the MEDS Rights Record Date, conditioned upon their execution

of a Registration Rights Agreement.

Such issuances will be made in reliance on the exemption from registration pursuant to Section 3(a)(9)

or Section 4(a)(2) of the Securities Act, Regulation D under the Securities Act promulgated thereunder, and corresponding provisions

of state securities or “blue sky” laws.

The MEDS Rights are not actionable or transferable until registration;

provided they

become transferable one year after the date of the Merger if no registration has occurred.

As of the date of this filing, no MEDS Rights

shares have been issued.

all of the closing conditions of the Merger Agreement were met.

As a result, the Company entered into Amendment No.

1 to the Amended

and Restated Agreement and Plan of Merger (the “Amendment”) on January 8, 2024.

Under the terms of the Amendment, the merger

consideration to the shareholders of Superlatus was adjusted to the aggregate of 136,441 shares of common stock of the Company, representing

19.99 % of the total issued and outstanding common stock of the Company after the consummation of the Merger and 15,759 shares of Company’s

Series B Preferred Stock, par value $ 0.00001 per share (the “Series B Preferred Stock”), with a conversion ratio of 100 shares

of Series B Preferred Stock to one share of common stock.

At Closing, the value of the common stock was $ 7.30 per share, resulting in

a total value of $ 12,500,089 .

Additionally, the shareholders of Superlatus agreed to surrender back to the Company 291,096 shares of

the Company’s Series B Preferred Stock.

In March 2024 the Company divested of its interest in Superlatus and, among other things,

the Stock Swap Transaction in not expected to occur.

of Presentation and Principles of Consolidation

Company’s consolidated financial statements include the accounts of TRxADE HEALTH, INC., Trxade, Inc., Integra Pharma Solutions,

Inc., Bonum Health, LLC, Superlatus, Inc., Sapientia Technologies, LLC and The Urgent Company, Inc.

The accompanying consolidated financial

statements of TRxADE HEALTH, Inc.

have been prepared in accordance with accounting principles generally accepted in the United States

of America (“U.S.

GAAP”) and the rules of the SEC.

All significant intercompany accounts and transactions have been eliminated.

preparation of condensed consolidated financial statements in accordance with U.S.

GAAP requires management to make estimates and assumptions

that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue

and expenses in the reporting period.

The Company bases its estimates and assumptions on current facts, historical experience and various

other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about

the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources.

The actual results experienced by the Company may differ materially and adversely from its estimates.

To the extent there are material

differences between estimates and the actual results, future results of operations will be affected.

Significant estimates for the years ended December 31, 2023 and 2022 include the valuation of intangible assets, including goodwill.

value of financial instruments

carrying amounts for cash, accounts receivable, accounts payable, accrued liabilities, and other current liabilities approximate their

fair value because of their short-term maturity.

June 21, 2023, the Company executed a 1:15 reverse stock split for stockholders of record on that date .

This was executed to comply with

the Nasdaq Listing Rule 5550(a)(2) to have the price of the stock above $ 1.00 .

Issued Accounting Pronouncements

June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13,

“Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”).

ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration

of a broader range of reasonable and supportable information to inform credit loss estimates.

ASU 2016-13 is effective for fiscal years

beginning after December 15, 2022, including interim periods within those fiscal years.

The Company adopted ASU 2016-13 effective January

The Company determined that the update applied to trade receivables, but that there was no material impact to the consolidated

financial statements from the adoption of ASU 2016-13.

August 2020, the FASB issued ASU 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and

Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40)”.

This ASU reduces the number of accounting models for convertible

debt instruments and convertible preferred stock and amends the guidance for the derivatives scope exception for contracts in an entity’s

own equity to reduce form-over-substance-based accounting conclusions.

In addition, this ASU improves and amends the related earnings

per share guidance.

This standard is effective for us on January 1, 2022, including interim periods within those fiscal years.

is either a modified retrospective method or a fully retrospective method of transition.

The adoption of ASU 2020-06 did not have a material

impact on the consolidated financial statements.

Receivable, net

January 1, 2023, the Company adopted ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses

on Financial Instruments” and its related amendments using the prospective method.

The new standard requires the use of a current

expected credit loss impairment model to develop and recognize credit losses for financial instruments at amortized cost when the asset

is first originated or acquired, and each subsequent reporting period.

Company’s receivables are from customers and are typically collected within 90 days.

The Company determines the allowance based

on known troubled accounts, historical experience, and other currently available evidence.

Company had an account receivable with a single customer, GSG PPE, LLC (“GSG”), for the amount of $ 630,000 , which was past

The Company had obtained a Note Receivable which was due on September 30, 2021 and remained unpaid.

The Company did not believe

the amount to be collectible without legal actions, and therefore, recorded bad debt expense reflected on the consolidated statement

of operations during the year ended December 31, 2021.

The note was not paid pursuant to its terms and the Company had filed a suit to

collect on the note and the personal guaranty securing the note.

The Company settled the lawsuit in June of 2022.

During the years

ended December 31, 2023, and 2022, there was a bad debt recovery from the GSG lawsuit of $ 32,074 and $ 98,841 respectively.

Receivables, net

Company’s other receivables balance is from one vendor.

On May 20, 2022, effective as of May 18, 2022, Community Specialty Pharmacy,

LLC (“CSP”) entered into an agreement to acquire COVID-19 testing kits from a third-party vendor for an aggregate of $ 1,200,000 ,

of which $ 875,000

was paid on May 23, 2022.

The Company received

the COVID-19 testing kits in July 2022.

On August 18, 2022, the Company was informed by the vendor that the vendor had received a letter

from the U.S.

Food and Drug Administration (“FDA”) that the COVID-19 test kits were misbranded under Section 502(o) of the

Federal Food, Drug, and Cosmetic Act (“FDC Act”) (21 USC 352(o)) and adulterated under Section 501(f) of the FDC Act (21

Furthermore, the vendor informed the Company that the letter from the FDA also stated that because of the FDA’s prohibition

on the distribution of adulterated and/or misbranded devices applies to all parties along the distribution chain, the FDA was advising

the vendor against furthering the distribution of the COVID-19 test kits in interstate commerce.

The company wrote the amount off as

a loss of inventory as of December 31, 2022.

As of December 31, 2023, and December 31, 2022, the balance of this receivable was $ 0 .

August 22, 2023, the Company completed the sale of CSP and APS (see Note 3).

The net balance due to the Company from these entities,

in excess of the Note Receivable (see Note 6), was $ 370,608 as of December 31, 2023.

Company accounts for acquisitions and investments in businesses as business combinations if the target meets the definition of a business

and (a) the target is a variable interest entity (“VIE”) and the Company is the target’s primary beneficiary, and therefore

the Company must consolidate its financial statements, or (b) the Company acquires more than 50% of the voting interest of the target

and it was not previously consolidated.

The Company records business combinations using the acquisition method of accounting, which requires

all the assets acquired and liabilities assumed to be recorded at fair value as of the acquisition date.

The excess of the purchase price

over the estimated fair values of the net tangible and intangible assets acquired is recorded as goodwill.

application of the acquisition method of accounting for business combinations requires management to make significant estimates and assumptions

in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration

between assets that are depreciated and amortized from goodwill.

The fair value assigned to tangible and intangible assets acquired and

liabilities assumed are based on management’s estimates and assumptions, as well as other information compiled by management, including

valuations that utilize customary valuation procedures and techniques.

Significant assumptions and estimates include, but are not limited

to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the cost

savings expected to be derived from acquiring an asset, if applicable.

the actual results differ from the estimates and judgments used in these estimates, the amounts recorded in the Company’s financial

statements may be exposed to potential impairment of the intangible assets and goodwill.

the Company’s investment involves the acquisition of an asset or group of assets that does not meet the definition of a business,

the transaction is accounted for as an asset acquisition.

An asset acquisition is recorded at cost, which includes capitalizing transaction

costs, and does not result in the recognition of goodwill.

Assets and Goodwill

Company tests indefinite-lived intangible assets for impairment on an annual basis or whenever events or changes occur that would more-likely-than

not reduce the fair value of the indefinite-lived intangible asset below its carrying value between annual impairment tests.

Any indefinite-lived

intangible asset assessment is performed at the Company level.

The Company recognized a goodwill impairment loss of $ 5,129,115 for the year ended December 31, 2023.

The goodwill resulted from the acquisition of Superlatus and was subsequently determined to be impaired based on the facts and circumstances surrounding

the sale of Superlatus on March 5, 2024.

(loss) Per Common Share

net income per common share is computed by dividing net income available to common stockholders by the weighted average number of

common shares outstanding.

Diluted net income per common share is computed similar to basic net income per common share except that

the denominator is increased to include the number of additional common shares that would have been outstanding if the potential

common shares had been issued and if the additional common shares were dilutive.

The dilutive effect of the Company’s options

and warrants is computed using the treasury stock method.

As of December 31, 2023, we had 218,729

outstanding warrants to purchase shares of common stock and 26,229

options to purchase shares of common stock.

As part of the termination of the White Lion deal, White Lion was issued 50,000

shares of stock per the agreement on March 1, 2023.

Armistice Capital executed its pre-funded warrants on January 4, 2023, and

purchased 601,740

shares ( 40,116 shares after the effect of the 1:15 reverse stock split on June 21, 2023, see Note 13) of stock with a purchase price

following table sets forth the computation of basic and diluted loss per share:

OF BASIC AND DILUTIVE INCOME (LOSS) PER SHARE

For the Years Ended

Net loss from continuing operations

$ ( 13,720,546 )

$ ( 2,403,442 )

Net loss attributable to noncontrolling interest

Net loss from continuing operations available to common stockholders

( 13,720,546 )

( 1,965,673 )

Net loss from discontinued operations

( 4,123,028 )

$ ( 1,506,426 )

Numerator for basic and diluted EPS - income available to common stockholders

( 17,843,574 )

$ ( 3,472,099 )

Denominator for EPS – weighted average shares

Net loss per common share attributable to common stockholders

Net loss per common share from continuing operations

Net loss per common share from discontinued operations

Company’s provision for income taxes was $ 0

for the year ended December 31, 2023, and $ 0

for the year ended December 31, 2022, respectively.

The income tax provisions for the twelve-month periods are based upon

estimates of annual income (loss), annual permanent differences and statutory tax rates in the various jurisdictions in which the

Company operates.

For all periods presented, the Company utilized net operating loss carryforwards to offset the impact of any

taxable income.

The Company’s tax rate differs from the applicable statutory rates due primarily to the establishment of a

valuation allowance, utilization of deferred and the effect of permanent differences and adjustments.

2 – GOING CONCERN

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates

6 unchanged sentences

of December 31, 2023, the Company had an accumulated deficit of $ 33,245,940 .

We have limited financial resources.

As of December 31, 2022 we had working capital deficit of approximately $ 54,000

and a cash balance of $ 1.1

We will need to raise additional capital or secure debt funding to support on-going operations.

The sources of this capital

are expected to be the sale of equity and debt, 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, our financial position, and liquidity.

These factors raise substantial doubt about the

ability of the Company to continue as a going concern.

Unless Management is able to obtain additional financing, it is unlikely that

the Company will be able to meet its funding requirements during the next 12 months.

The financial statements do not include any

adjustments that might result from the outcome of this uncertainty.

– Historically, operations have been funded

primarily through the sale of equity or debt securities and operating activities.

In 2022, the Company raised approximately $ 1.5

million in capital (See Note 4 – Stockholders’

of Estimates – In preparing these financial statements, management is required to make estimates and assumptions that effect

the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements

and the reported amount of revenues and expenses during the reporting periods.

Actual results could differ from those estimates.

Reclassification

– Certain prior year amounts have been

reclassified to conform to the current year presentation.

The reclassification did not result in a change in the net loss.

of Consolidation – The Company’s consolidated financial statements include the accounts of TRxADE HEALTH, INC., Trxade,

Inc., Integra Pharma Solutions, Inc., Alliance Pharma Solutions, LLC, Community Specialty Pharmacy, LLC, Bonum Health, LLC and MedCheks,

All significant intercompany accounts and transactions have been eliminated.

Cash in bank accounts are at risk to the extent that they exceed U.S.

Federal Deposit Insurance Corporation insured amounts.

All investments

purchased with a maturity of three months or less are cash equivalents.

Cash is available on demand and are generally within

FDIC insurance limits for 2022.

Receivable – The Company’s receivables are from customers and are collectible within 90 days.

The Company determines

the allowance based on known troubled accounts, historical experience, and other currently available evidence.

During the years ended

December 31, 2022, and 2021, $( 246,683 ) and $ 615,657 of bad debt expense, respectively and $ 247,861 of recovery

of bad debt, was recognized.

Inventories are stated at the lower of cost or net realizable value.

Cost is determined on a first in first out basis.

merchandise inventories at Community Specialty Pharmacy, LLC and Integra Pharma Solutions, LLC.

On a quarterly basis, we evaluate

inventory for net realizable value using estimates based on historical experience, current or projected pricing trends, specific

categories of inventory, age and expiration dates of on-hand inventory and manufacturer return policies.

If actual conditions are

less favorable than our assumptions, additional inventory write-downs may be required, and no reserve is maintained as obsolete or

expired inventories are written off.

We believe that the inventory valuation provides a reasonable approximation of the current

value of inventory.

There is no reserve for inventory obsolescence and inventory is not pledged during the periods presented.

the years ended December 31, 2022 and 2021, included in cost of sales were write-downs to reduce inventory to net realizable value

of $ 0 and $ 376,348 , respectively.

Conversion Features – The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which

is not bifurcated and accounted for separately from the convertible note payable and may not be settled in cash upon conversion, is treated

as a discount to the convertible note payable.

This discount is amortized over the period from the date of issuance to the date the note

is due using the effective interest method.

If the note payable is retired prior to the end of its contractual term, the unamortized

discount is expensed in the period of retirement to interest expense.

In general, the beneficial conversion feature is measured by comparing

the effective conversion price, after considering the relative value of detachable instruments included in the financing transaction,

if any, to the fair value of the common shares at the commitment date to be received upon conversion.

Value of Financial Instruments – The Company measures its financial assets and liabilities in accordance with the requirements

of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, “ Fair Value Measurements and Disclosures ”.

ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to

classify the inputs used in measuring fair value as follows:

1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date.

Active markets

are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on

an ongoing basis.

Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and

listed equities.

2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly

observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies.

These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities,

time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic

Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be

derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

3 – Pricing inputs include significant inputs that are generally less observable from objective sources.

These inputs may be

used with internally developed methodologies that result in management’s best estimate of fair value.

Company has warrant liabilities on its balance sheet at December 31, 2022 that are required to be measured and recorded at fair value

on a recurring basis.

The Company uses the Black Scholes method to calculate the liability.

carrying amounts of cash, accounts receivable, accounts payable, accrued liabilities and short-term debt approximate fair value because

of the short-term nature of these instruments.

The carrying amount of long-term debt approximates fair value because the debt is based

on current rates at which the Company could borrow funds with similar maturities.

The Company accounts for goodwill and intangible assets in accordance with ASC 350 “ Intangibles

Goodwill and Other ”.

ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for

impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset is more likely than

not has decreased below its carrying value.

The Company had no

goodwill as of December 31, 2022 and 2021.

The Company recorded an intangible asset associated with the joint venture formed with

Exchange Health in February 2022 in the amount of $ 792,000 .

It was determined that the intangible assets had a definite live of 15

years and is being amortized quarterly with the straight line method.

The Company recognized an amortization expense of $ 44,100

in fiscal year 2022.

At December 31, 2022 the Company

determined this asset was impaired and recorded a loss on asset impairment of $ 792,000 .

Recognition – In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No.

(Topic 606) “ Revenue from Contracts with Customers.

” Topic 606 supersedes the revenue recognition requirements in

Accounting Standards Codification Topic 605, “ Revenue Recognition ”, and requires entities to recognize revenue when

they transfer control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects

to be entitled to in exchange for those goods or services.

The Company adopted ASU 2014-09 using the modified retrospective approach

effective January 1, 2018, under which prior periods were not retrospectively adjusted.

The adoption of Topic 606 did not have a material

impact on the Company’s consolidated financial statements, including the presentation of revenues in the Company’s Consolidated

Statements of Operations.

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 the Company’s website.

The Company considers itself

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

Identify the contract with the customer – Trxade,

Inc.’s Terms and Use Agreement is acknowledged between the Wholesaler and Trxade, Inc.

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 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.

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 and invoice.

Determine the transaction price – The consideration is variable if product

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 –

There 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 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.

Identify 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 the 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 “ stand-alone selling price ”.

Recognize revenue when or as the entity satisfies a performance

obligation – Revenue is recognized upon the delivery of the prescription.

SOSRx provides pharmaceutical manufacturers with an efficient platform in which to divest short-dated, overstock, and slow-moving

products to direct purchasers.

SOSRx’s proprietary method researches the current market, allowing the manufacturer to list the

optimal selling price for their products.

Manufacturers list their short-dated overstock and slow-moving products by lot with pictures

and descriptions.

The manufacturer then determines which vetted and registered customers can bid on or outright purchase their products.

products from a manufacturer have been entered into SOSRx’s platform, a bid cycle begins.

Each bid cycle is 3 days.

(wholesaler, distributor or chain) will have 3 options.

The options are buy now, bid, or pass.

In the buy now option the manufacturer

has an established price in which they would sell the product.

The bid option allows the buyers to put in a price if they value the product

and at the end of the bid cycle the manufacturer has several options.

The manufacturer can accept the highest bidder if the buyer has

met the minimum bid requirement, counter if the bid is below the minimum bid requirement or begin a negotiation to an agreed upon price

or accepted bid, regardless of minimum bid requirement.

The fourth option is to decline.

one of the four options described above, except decline, have been selected a committed offer is generated in the system.

The buyer then

submits a purchase order to the manufacturer.

The manufacturer then processes the purchase order and sends the product directly to the

This is when revenue is recognized as a transaction fee.

At no point does SOSRx take possession of the inventory.

the manufacturer per committed offer at a fee percentage of total offer value.

of Sales – The Company recognized cost of goods sold from activities in Integra Pharma Solutions, LLC and Community

Specialty Pharmacy, LLC.

Compensation – The 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.

Taxes – The Company accounts for income taxes utilizing ASC 740, “ Income Taxes ” (SFAS No.

740 requires the measurement of deferred tax assets for deductible temporary differences and operating loss carry forwards, and of deferred

tax liabilities for taxable temporary differences.

Measurement of current and deferred tax liabilities and assets is based on provisions

of enacted tax law.

The effects of future changes in tax rates are not included in the measurement.

The Company recognizes the amount

of taxes payable or refundable for the current year and recognizes deferred tax liabilities and assets for the expected future tax consequences

of events and transactions that have been recognized in the Company’s financial statements or tax returns.

The Company currently

has substantial net operating loss carry forwards.

The Company has recorded a 100 % valuation allowance against net deferred tax assets

due to uncertainty of their ultimate realization.

Valuation allowances are established when necessary to reduce deferred tax assets to

the amount expected to be realized.

Tax years from 2018 forward are open to examination by the Internal Revenue Service.

Liability - The Company will account for the 2,663,045 warrants issued in connection with the Private Placement in accordance

with the guidance contained in FASB ASC 815 “Derivatives and Hedging” whereby under that provision the warrants do not meet

the criteria for equity treatment and must be recorded as a liability.

Accordingly, the Company will classify the warrant instruments

as a liability at fair value and adjust the instrument to fair value at each reporting period.

This liability will be re-measured at

each balance sheet date until the warrants are exercised or expire, and any change in fair value will be recognized in the Company’s

statement of operations.

The fair value of warrants will be estimated using a Black-Scholes model.

The valuation model will utilize inputs

such as closing share prices, volatility, risk free interest factors and other assumptions and may not be reflective of the price at

which they can be settled.

(loss) Per Share – Basic net income (loss) per common share is computed by dividing net loss available to common stockholders

by the weighted average number of common shares outstanding.

Diluted net loss per common share is computed similar to basic net loss

per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding

if the potential common shares had been issued and if the additional common shares were dilutive.

The dilutive effect of the Company’s

options and warrants is computed using the treasury stock method.

As of December 31, 2022, we had 2,689,969 outstanding warrants to

purchase shares of common stock and 295,623 options to purchase shares of common stock.

following table sets forth the computation of basic and diluted income (loss) per common share for the years ended December 31, 2022,

SCHEDULE OF BASIC AND DILUTIVE INCOME (LOSS) PER SHARE

The Company has limited financial resources.

As of December

31, 2023, the Company had a working capital deficit of $ 8,803,293 and a cash balance of $ 151,908 .

The Company will need to raise additional

capital or secure debt funding to support on-going operations.

The sources of this capital are expected to be the sale of equity and

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

If the Company is unable to access additional capital moving forward, it may hurt the Company’s ability to grow and to generate

future revenues, financial position, and liquidity.

These factors raise substantial doubt about the ability of the Company to continue

as a going concern.

Unless Management is able to obtain additional financing, it is unlikely that the Company will be able to meet its

funding requirements during the next 12 months.

The financial statements do not include any adjustments that might result from the outcome

of this uncertainty.

3 – ACQUISITIONS AND DISPOSITIONS

July 31, 2023, the Company entered into the Merger Agreement (see Note 1) with Superlatus (“Seller”) whereby the Company

acquired 100 % of the stock of the Seller (the “Acquisition”).

Superlatus includes a wholly-owned subsidiary, Sapientia.

Consideration

for the Acquisition consisted of (i) 136,441 shares of the Company’s common stock at a fair value of $ 7.30 per share, representing

19.99 % of the total issued and outstanding share of the Company’s common stock at Closing, and (ii) 306,855 shares of the Company’s

Series B Preferred Stock, a new class of the Company’s non-voting convertible preferred stock with a conversion ratio of 100 to

The total fair value of the common stock and Series B Preferred Stock on the Closing Date was $ 225,000,169 (“Purchase Price”).

On January 8, 2024, the Company entered into Amendment No.

1 to the Agreement and Plan of Merger (the “Amendment”).

the terms of the Amendment, the merger consideration to the shareholders of Superlatus was adjusted to an aggregate of 136,441 shares

of common stock of the Company, representing 19.99 % of the total issued and outstanding common stock of the Company after the consummation

of the Merger and 15,759 shares of Company’s Series B Preferred Stock, par value $ 0.00001 per share, with a conversion ratio of

100 shares of Series B Preferred Stock to one share of common stock.

The total fair value of the common stock and Series B Preferred

Stock on the Closing Date was adjusted to $ 12,500,089 (“Amended Purchase Price”).

Additionally, the shareholders of Superlatus

agreed to surrender back to the Company 291,096 shares of the Company’s Series B Preferred Stock previously received before the

acquisition of Superlatus was accounted for as a business combination using the acquisition method pursuant to FASB ASC Topic 805.

the acquirer for accounting purposes, the Company had estimated the Purchase Price, assets acquired and liabilities assumed as of the

acquisition date, with the excess of the Purchase Price over the fair value of net assets acquired recognized as goodwill.

An independent

valuation expert assisted the Company in determining these fair values.

The Amended Purchase Price allocation as of the acquisition date is presented as follows:

OF PURCHASE PRICE ALLOCATION

July 31, 2023

Purchase consideration:

Common Stock, at fair value

Series B Preferred Stock, at fair value

Total purchase consideration

Purchase price allocation:

Prepaid expenses

Intangible assets, net

Assets acquired

Accounts payable and other current liabilities

Purchase price payable

Notes payable

( 1,905,000 )

Liabilities assumed

( 2,538,548 )

Net assets acquired

Urgent Company, Inc.

September 27, 2023, the Company entered into an Asset Purchase Agreement (“APA”) with The Urgent Company, Inc.

and its wholly owned subsidiaries, pursuant to which, the Company was assigned certain inventory and property and equipment and assumed

certain operating leases for consideration of $ 4,400,000 in promissory notes (“Purchase Price”, see Note 11).

This acquisition

is expected to enhance the Company’s production of sustainable food products and enable the expansion of market share.

transaction was accounted for as an asset acquisition pursuant to FASB ASC Topic 805.

As the acquirer for accounting purposes, the Company

allocated the cost of the asset acquisition to the assets acquired and liabilities assumed as of the acquisition date based on their

respective relative fair value as of the date of the transaction.

following summarizes the relative fair values of the assets acquired as of the acquisition date based on the allocation of

the cost of the asset acquisition:

OF FAIR VALUES OF ASSETS ACQUIRED

September 27, 2023

Purchase consideration:

Promissory note

Total purchase consideration

Allocation of cost of assets acquired:

Property and equipment

Assets acquired

Net assets acquired

and Divestitures

on, February 1, 2023, the Company, Exchange Health and SOSRx, entered into a Voluntary Withdrawal and Release Agreement, which was replaced

in its entirety, corrected, and became effective on February 4, 2023 (as replaced and corrected, the “Release Agreement”).

part of the Release Agreement, a note payable to Exchange Health was forgiven in the amount of $ 500,000 and $ 15,000 in accounts payable

Effective February 4, 2023, the operations of SOSRx were discontinued and operations were shut down.

As a result of this,

the assets and liabilities of SOSRx have been reflected as assets and liabilities of discontinued operations in the Company’s consolidated

balance sheets.

As of December 31, 2023 and December 31, 2022 as follows:

SCHEDULE OF FINANCIAL STATEMENTS OF DISCONTINUED OPERATIONS

Accounts receivable

Total assets of discontinued operations

Accounts payable

Total liabilities of discontinued operations

terms of the Release Agreement qualify the transaction as a discontinued operation in accordance with U.S.

As a result, operating

results and cash flows related to the SOSRx operations have been reflected as discontinued operations in the Company’s consolidated

statements of operations, consolidated statements of cash flows and consolidated statements of shareholders’ equity.

Pharma Solutions, LLC and Community Specialty Pharmacy, LLC

August 22, 2023, the Company and Wood Sage, LCC (“Wood Sage”) entered into a Membership Interest Purchase Agreement, pursuant

to which the Company sold 100 % of the membership interest in Alliance Pharma Solutions, LLC (“ASP MIPA”) for consideration

of a $ 125,000 promissory note (“ASP Sale Price”) and a Membership Interest Purchase Agreement, pursuant to which the Company

sold 100 % of the membership interest in Community Specialty Pharmacy, LLC (“CSP MIPA”) in exchange for a $ 100,000 promissory

note (“CSP Sale Price”).

divestiture of APS and CSP represented an intended strategic shift in the Company’s operations and will allow the Company to become

focused on food technology As a result, the results of APS and CSP were classified as discontinued operations in our condensed statements

of operations and excluded from both continuing operations and segment results for the years ended December 31, 2023 and 2022.

part of recognizing the business as held for sale in accordance with U.S.

GAAP, the Company was required to measure APS and CSP at the

lower of its carrying amount or fair value less cost to sell.

As a result of this analysis, during the year ended December 31,

2023, the Company recognized a non-cash, pre-tax loss on disposal of $ 3,300,225.42 .

The loss is included in “Net loss from discontinued

operations” in the consolidated statements of operations.

The loss was determined by comparing the fair value of the consideration

received for the sale of a 100% interest in APS and CSP with the net assets of APS and CSP, respectively, immediately prior to the transaction.

a result of the transactions, the following assets and liabilities of APS and CSP were transferred to Wood Sage as of August 22, 2023:

OF ASSETS AND LIABILITIES

Solutions, LLC

Pharmacy, LLC

Accounts receivable, net

Prepaid assets

Intangible assets and capitalized software, net

Accounts payable

Accrued liabilities

Net assets sold

results of operations from discontinued operations for the years ended December 31, 2023 and 2022, have been reflected as discontinued

operations in the consolidated statements of operations and consist of the following:

OF DISCONTINUED OPERATIONS

ended December 31,

Cost of sales

Operating Expenses

Impairment of intangible asset

Wage and salary expense

Professional fees

Accounting and legal expense

Technology expense

General and Administrative

Total operating expense

Operating income (loss) from discontinued operations

( 1,508,326 )

Other income (expense)

Gain (loss) on asset sale

Total other income (expense)

Net income (loss) from discontinued operations

$ ( 893,407 )

$ ( 143,241 )

$ ( 435,288 )

$ ( 469,778 )

$ ( 470,559 )

$ ( 1,506,426 )

4 - RELATED PARTY TRANSACTIONS

April 1, 2023 and July 1, 2023 the Company entered into a relationship with Scietech, LLC (“Scietech”) in an independent

contractor agreement to consult on increasing sales on the IPS and Trxade Inc.

The agreement was for an annual fee of $ 400,000

to be split equally between IPS and Trxade Inc.

A 31 % investor in Scietech is the spouse of the interim CFO, Prashant Patel, which qualifies

as a related party.

The company was chosen because they were the most qualified to perform the desired qualifications.

February 15, 2022, the Company entered into a relationship with Exchange Health, a technology company providing an online platform for

manufacturers and suppliers to sell and purchase pharmaceuticals.

In connection therewith, SOSRx was formed in February 2022, which is

owned 51 % by the Company and 49 % by Exchange Health.

On February 15, 2022, the Company contributed cash to SOSRx in the amount of $ 325,000 ,

issued a promissory note to SOSRx in the amount of $ 500,000 , which was immediately assigned to Exchange Health (the “Promissory

Note”), and agreed to make an earn out payment of up to $ 400,000 , payable, at the Company’s discretion, in cash or common

stock of the Company, based on SOSRx achieving certain revenue targets of SOSRx (the “Earn Out Payments”);

and entered into

a Distribution Services Agreement with SOSRx (the “Distribution Agreement”).

Exchange Health contributed $ 792,000 in software

and contracts which was recorded as an intangible asset on the balance sheet of SOSRx.

The intangible asset was determined to be impaired

and was written off on December 31, 2022.

December 31, 2023, total related party debt was $ 0 .

and effective on, February 1, 2023, the Company, Exchange Health and SOSRx, entered into a Voluntary Withdrawal and Release Agreement,

which was replaced in its entirety and corrected on February 4, 2023, and effective February 4, 2023 (as replaced and corrected, the “Release

Pursuant to the Release Agreement, the Company voluntarily withdrew as a member of SOSRx pursuant to the terms of

the Operating Agreement of SOSRx, which provided that the Company would withdraw from SOSRx if certain revenue targets were not met,

which targets have not been met.

pursuant to the Release Agreement, (a) the Company agreed to the termination of its interests in SOSRx and its withdrawal as a member

thereof for no consideration (the “Withdrawal”);

(b) the Promissory Note, and all of the Company’s obligations under

such Promissory Note were terminated;

and (c) the parties agreed that no Earn Out Payments will be due.

The Release Agreement also (i)

provides that all accumulated losses of SOSRx through December 20, 2022, will be allocated 51% to the Company and 49% to Exchange Health;

(ii) provides for a total of approximately $15,000 in outstanding invoices owed by the Company to SOSRx to be waived;

(iii) includes

certain indemnification obligations of SOSRx and Exchange Health;

(iv) requires SOSRx to pay certain pre-agreed outstanding invoices

(v) includes mutual releases of the Company and SOSRx and Exchange Health;

and (vi) includes customary representations and

warranties of the parties.

5 – REVENUE RECOGNITION

Company derives revenue from two primary sources—product revenue and service revenue.

revenue consists of shipments of:

of pharmaceutical products to pharmacies;

Revenues for our products are recognized and invoiced when the product is shipped to the customer.

revenue consists primarily of:

fees from the facilitation of buyer generated purchase orders to suppliers, billed monthly;

service fees associated with providing vendors of pharmaceutical products with data analysis of their catalogues and branding of

their products or company to the Company’s registered buyers, billed monthly or as a one-time fee;

Software-as-a-Service

(“SaaS”) fees for a platform for virtual healthcare provider visits, billed monthly.

for the Company’s services that are billed monthly are recognized and invoiced when the at the beginning of the month.

for one-time services are recognized at the point in time when services are rendered.

terms for products and services are generally 0 to 60 days and the Company has no contract assets or liabilities.

following table presents disaggregated revenue by major product and service categories during the years ended December 31, 2023,

OF DISAGGREGATED REVENUE

Years ended December 31,

Product revenues

Pharmaceutical product resale

Packaged food resale

Total product revenue

Service revenues

Transaction fee income

Data service fee income

SaaS fee income

Total service revenue

Total revenues

6 – INVENTORY

value is determined using the weighted average cost method and is stated at the lower cost or net realizable value.

As of December

31, 2023, and 2022, inventory was comprised of the following:

As of December 31,

Raw materials

Finished goods

7 – NOTES RECEIVABLE

August 22, 2023, the Company received a Promissory Note (the “Wood Sage Note”) in the amount of $ 1,300,000 from Wood Sage,

LLC and entered into the APS MIPA and CSP MIPA for the Company to sell APS and CSP and entered into a Master Service Agreement (“Wood

The Wood Sage Note bears no interest and is due and payable within thirty days of a change in control, as defined by

the Wood Sage Note, of the borrower.

As of December 31, 2023, the outstanding balance of the Wood Sage Note was $ 1,300,000 .

8 – INTANGIBLE ASSETS

of December 31, 2023, intangible assets, net consisted of the following:

OF INTANGIBLE ASSETS NET

Developed technology

$ ( 814,790 )

December 31, 2023

December 31, 2022

Amortization expense

Total Amortization Expense

9 – OTHER CURRENT LIABILITIES

of December 31, 2023 and December 31, 2022, other current liabilities consisted of the following:

OF OTHER CURRENT LIABILITIES

Insurance refunds payable

Deferred revenue

Other payables

Other current liabilities

10 – CONTINGENT FUNDING LIABILITIES

December 13, 2023, the Company entered into a non-recourse funding agreement with a third-party for the purchase and sale of future receivables

(the “Receivables Agreement”).

Pursuant to the Receivables Agreement, the third party agreed to fund the Company $ 150,000

to purchase $ 214,500 of future receivables.

Under the funding agreement, the third-party receives a priority interest in the receivables

of Trxade Inc.

The Company also paid $ 7,500 as a one-time origination fee in connection with the Receivables Agreement.

The Receivables

Agreement also allows for the third-party funder to file UCCs securing their interest in the receivables and includes customary events

As of December 31, 2023, the balance of the payable balance is $ 144,231 .

November 22, 2023, the Company entered into a non-recourse funding agreement with a third-party for the purchase and sale of future receivables

(the “Receivables Agreement”).

Pursuant to the Receivables Agreement, the third party agreed to fund the Company $ 275,000

to purchase $ 393,250 of future receivables.

Under the funding agreement, the third-party receives a priority interest in the receivables

of Trxade Inc.

The Company also paid $ 13,750 as a one-time origination fee in connection with the Receivables Agreement.

The Receivables

Agreement also allows for the third-party funder to file UCCs securing their interest in the receivables and includes customary events

As of December 31, 2023, the balance of the payable balance is $ 222,115 .

October 25, 2023, the Company entered into a non-recourse funding agreement with a third-party for the purchase and sale of future receivables

(the “Receivables Agreement”).

Pursuant to the Receivables Agreement, the third party agreed to fund the Company $ 1,200,000

to purchase $ 1,728,000 of future receivables.

Under the funding agreement, the third-party receives a priority interest in the receivables

of Trxade Inc.

The Company also paid $ 60,000 as a one-time origination fee in connection with the Receivables Agreement.

The Receivables

Agreement also allows for the third-party funder to file UCCs securing their interest in the receivables and includes customary events

As of December 31, 2023, the balance of the payable balance is $ 880,000 .

June 27, 2023, the Company entered into a non-recourse funding agreement with a third-party for the purchase and sale of future receivables

(the “Receivables Agreement”).

Pursuant to the Receivables Agreement, the third party agreed to fund the Company $ 1,250,000

to purchase $ 1,800,000 of future receivables.

Under the funding agreement, the third-party receives a priority interest in the receivables

of Trxade Inc.

The Company also paid $ 62,500 as a one-time origination fee in connection with the Receivables Agreement.

The Receivables

Agreement also allows for the third-party funder to file UCCs securing their interest in the receivables and includes customary events

This agreement was fully paid off in October 2023.

March 14, 2023, the Company entered into a non-recourse funding agreement with a third-party for the purchase and sale of future receivables

(the “Receivables Agreement”).

Pursuant to the Receivables Agreement, the third party agreed to fund the Company $ 875,000

to purchase $ 1,224,000 of future receivables.

Under the funding agreement, the third-party receives a priority interest in the receivables

of Trxade Inc.

The Company also paid $ 42,500 as a one-time origination fee in connection with the Receivables Agreement.

The Receivables

Agreement also allows for the third-party funder to file UCCs securing their interest in the receivables and includes customary events

This agreement was fully paid off in June 2023.

September 14, 2022, the Company entered into a non-recourse funding agreement with a third-party for the purchase and sale of future

receivables (the “Receivables Agreement”).

Pursuant to the Receivables Agreement, the third party agreed to fund the Company

$ 275,000 to purchase $ 396,000 of future receivables.

Under the funding agreement, the third-party receives a priority interest in the

receivables of Trxade Inc.

The Company also paid $ 15,000 as a one-time origination fee in connection with the Receivables Agreement.

The Receivables Agreement also allows for the third-party funder to file UCCs securing their interest in the receivables and includes

customary events of default.

This agreement was fully paid off in January 2023.

June 27, 2022, the Company entered into a non-recourse funding agreement with a third-party funder for the purchase and sale of future

Pursuant to the Receivables Agreement, the third party agreed to fund the Company $ 550,000 to purchase $ 792,000 of future

Under the funding agreement, the third-party receives a priority interest in the receivables of Trxade Inc.

also paid $ 27,500 as a one-time origination fee in connection with the Receivables Agreement.

The Receivables Agreement also allows for

the third-party funder to file UCCs securing their interest in the receivables and includes customary events of default.

This agreement

was fully paid off in January 2023.

Company’s relationship with the funding source meets the criteria in ASC 470-10-25 – Sales of Future Revenues or Various

Other Measures of Income (“ASC 470”), which relates to cash received from a funding source in exchange for a specified percentage

or amount of revenue or other measure of income of a particular product line, business segment, trademark, patent or contractual right

for a defined period.

Under this guidance, the Company recognized the fair value of its contingent obligation to the funding source,

as of the acquisition date, as a current liability in its consolidated balance sheet.

ASC 470, amounts recorded as debt are to be amortized under the interest method.

The Company made an accounting policy election to utilize

the prospective method when there is a change in the estimated future cash flows, whereby a new effective interest rate is determined

based on the revised estimate of remaining cash flows.

The new rate is the discount rate that equates the present value of the revised

estimate of remaining cash flows with the carrying amount of the debt, and it will be used to recognize interest expense for the remaining

Under this method, the effective interest rate is not constant, and any change in expected cash flows is recognized prospectively

as an adjustment to the effective yield.

As of December 31, 2023, and December 31, 2022, the total contingent funding liability was $ 1,246,346

and $ 108,036 , respectively, and the effective interest rate was approximately 31 % and 31 %, respectively.

This rate represents the discount

rate that equates the estimated future cash flows with the fair value of the debt and is used to compute the amount of interest to be

recognized each period.

Any future payments made to the funding source will decrease the contingent funding liability balance accordingly.

11 – NOTES PAYABLE

November 17, 2023, the Company issued promissory notes to Moku Foods, Inc.

(the “Moku Foods November 2023 Note”) in the amount

of $ 50,000 .

The promissory note accrues interest at 11.5 % per annum, compounded monthly and is payable upon demand at any time after

November 30, 2023.

As of December 31, 2023, the balance of the Moku Foods October 2023 Note is $ 50,000 .

The Company has accrued interest

of $ 945 as of December 31, 2023.

October 16, 2023, the Company issued promissory notes to Moku Foods, Inc.

(the “Moku Foods October 2023 Note”) in the amount

of $ 150,000 .

The promissory note accrues interest at 11.5 % per annum, compounded monthly and is payable upon demand at any time after

October 31, 2023.

As of December 31, 2023, the balance of the Moku Foods October 2023 Note is $ 150,000 .

The Company has accrued interest

of $ 4,300 as of December 31, 2023.

September 27, 2023, the Company issued promissory notes to Perfect Day, Inc.

(the “Perfect Day Note”) in the amount of $ 4,400,000

as consideration for the TUC APA (see Note 3).

The promissory notes do not accrue interest and are payable upon demand at any time after

October 31, 2023.

The entire aggregate, unpaid principal sum of the note is immediately due and payable upon the occurrence of a change

in control, as defined in the agreement.

September 14, 2023, the Company issued a promissory note to Danam Health, Inc.

(the “Danam Note”) in the amount of $ 300,000 .

The Company received a deposit of $ 200,000 on September 14, 2023, and an additional deposit of $ 100,000 on October 13, 2023.

Note accrues interest at 0 % per annum and is due and payable no later than 30 days after a change in control of borrower, as defined

in the note agreement.

As of December 31, 2023, the balance of the Danam Note is $ 50,000 .

June 16, 2023, the Company issued a secured debenture to Eat Well Investment Group, Inc.

(the “Eat Well June 2023 Note”)

in the amount of $ 1,150,000 for the purchase of Sapientia, a wholly-owned subsidiary of Superlatus.

The Eat Well June 2023 Note is secured

by 100 % of the membership interests in Sapientia.

The Eat Well June 2023 Note began accruing interest at 12 % per annum, compounded monthly,

as of October 31, 2023.

The Eat Well June 2023 matured on December 31, 2023 .

As of December 31, 2023, the balance of the Eat Well June

2023 Note is $ 1,150,000 .

The Company has accrued interest of $ 23,063 as of December 31, 2023.

As of the date of this filing, the parties

are working on an amendment for an extension.

February 8, 2023, Sapientia, a wholly-owned subsidiary of Superlatus, entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well February 2023 Note”) in the amount of $ 25,000 .

The Eat Well February 2023 Note is unsecured, accrues interest

at a rate of 1.87 % per annum, and matures February 7, 2025 .

As of December 31, 2023, the balance of the Eat Well February 2023 Note is

The Company has accrued interest of $ 418 as of December 31, 2023.

September 14, 2022, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well September 2022

Note”) in the amount of $ 50,000 .

The Eat Well September 2022 Note is unsecured, accrues interest at a rate of 1.87 % per annum,

and matures September 13, 2024 .

As of December 31, 2023, the balance of the Eat Well September 2022 Note is $ 50,000 .

The Company has

accrued interest of $ 1,212 as of December 31, 2023.

July 26, 2022, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well July 26, 2022 Note”)

in the amount of $ 35,000 .

The Eat Well July 26, 2022 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matures July

As of December 31, 2023, the balance of the Eat Well July 26, 2022 Note is $ 35,000 .

The Company has accrued interest of $ 938

as of December 31, 2023.

July 12, 2022, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well July 12, 2022 Note”)

in the amount of $ 25,000 .

The Eat Well July 12, 2022 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matures July

As of December 31, 2023, the balance of the Eat Well July 12, 2022 Note is $ 25,000 .

The Company has accrued interest of $ 688

as of December 31, 2023.

March 15, 2022, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well March 2022 Note”)

in the amount of $ 100,000 .

The Eat Well March 2022 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matures March

As of December 31, 2023, the balance of the Eat Well March 2022 Note is $ 100,000 .

The Company has accrued interest of $ 3,361

as of December 31, 2023.

February 1, 2022, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well February 2022 Note”)

in the amount of $ 100,000 .

The Eat Well February 2022 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matures February

As of December 31, 2023, the balance of the Eat Well February 2022 Note is $ 100,000 .

The Company has accrued interest of $ 3,576

as of December 31, 2023.

January 20, 2022, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well January 2022 Note”)

in the amount of $ 20,000 .

The Eat Well January 2022 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matures January

As of December 31, 2023, the balance of the Eat Well January 2022 Note is $ 20,000 .

The Company has accrued interest of $ 728

as of December 31, 2023.

December 24, 2021, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well December 2021 Note”)

in the amount of $ 100,000 .

The Eat Well December 2021 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matured December

As of December 31, 2023, the balance of the Eat Well December 2021 Note is $ 100,000 .

The Company has accrued interest of $ 3,776

as of December 31, 2023.

As of the date of this filing, the parties are working on an amendment for an extension.

November 10, 2021, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well November 2021 Note”)

in the amount of $ 50,000 .

The Eat Well November 2021 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matured November

As of December 31, 2023, the balance of the Eat Well November 2021 Note is $ 50,000 .

The Company has accrued interest of $ 2,001

as of December 31, 2023.

As of the date of this filing, the parties are working on an amendment for an extension.

August 18, 2021, Sapientia entered into a Loan Agreement with Eat Well Investment Group, Inc.

(the “Eat Well August 2021 Note”)

in the amount of $ 250,000 .

The Eat Well August 2021 Note is unsecured, accrues interest at a rate of 1.87 % per annum, and matured August

As of December 31, the balance of the Eat Well August 2021 Note is $ 250,000 .

The Company has accrued interest of $ 11,079 as

of December 31, 2023.

As of the date of this filing, the parties are working on an amendment for an extension.

following table summarizes notes payable balances as of December 31, 2023:

NOTES PAYABLE BALANCES

Current Portion

Non current Portion

Payable Total

Accrued Interest

Perfect Day Notes

Moku Foods November 2023 Note

Moku Foods October 2023 Note

Eat Well June 2023 Note

Eat Well February 2023 Note

Eat Well September 2022 Note

Eat Well July 26, 2022 Note

Eat Well July 12, 2022 Note

Eat Well March 2022 Note

Eat Well February 2022 Note

Eat Well January 2022 Note

Eat Well December 2021 Note

Eat Well November 2021 Note

Eat Well August 2021 Note

NOTE 12 – INCOME TAXES

provision for income taxes on income from operations for fiscal 2023 and 2022 consists of the following:

OF PROVISION FOR INCOME TAXES

(loss) before income taxes for the years ended December 31, 2023 and 2022 consisted of the following:

(LOSS) BEFORE INCOME TAXES

the year ended December 31,

( 17,843,574 )

( 3,909,868 )

Numerator for basic and diluted EPS - income available to common stockholders

a result of the full net valuation allowance position, the Company did not recognize any U.S.

federal income tax expense or tax benefit

on any components of continuing or discontinued operations.

OF DEFERRED TAX ASSETS AND LIABILITIES

operating Losses

Deferred Tax Assets

Tax Liabilities

to Use Assets

Deferred Tax Liabilities

( 5,936,557 )

( 4,030,755 )

Denominator for basic and diluted EPS – weighted average shares

Basic and diluted loss per common share

Concentration

of Credit Risks and Major Customers - Financial instruments that potentially subject the Company to credit risk consist principally

of cash and cash equivalents and receivables.

The Company places its cash and cash equivalents with financial institutions.

are insured to Federal Deposit Insurance Corp limits.

The amount of cash not insured by the FDIC as of December 31, 2022 is $ 518,419 .

the years ended December 31, 2022, no sales to customers represented greater than 10 % of revenue.

Accounting Pronouncements – The Company has implemented all new relevant accounting pronouncements that are in effect through

the date of these financial statements.

The pronouncements did not have any material impact on the financial statements unless otherwise

disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have

a material impact on its consolidated financial position or results of operations.

Issued Accounting Pronouncements Not Yet Adopted - In June 2016, the FASB issued ASU No.

2016-13, “Financial Instruments

- Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments” (“ ASU 2016-13 ”).

requires financial assets measured at amortized cost to be presented at the net amount expected to be collected.

The measurement of expected

credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable

and supportable forecasts that affect the collectability of the reported amounts.

An entity must use judgment in determining the relevant

information and estimation methods that are appropriate in its circumstances.

ASU 2016-13 is effective for annual reporting periods beginning

after December 15, 2019, including interim periods within those fiscal years, and a modified retrospective approach is required, with

a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective.

In November of 2019, the FASB issued ASU 2019-10, which delayed the implementation of ASU 2016-13 to fiscal years beginning after December

15, 2022, for smaller reporting companies.

Company does not expect the adoption of this new accounting guidance to have a material impact on its financial position, results of

operations, or cash flows.

3 – SHORT-TERM DEBT AND RELATED PARTIES DEBT

Party Promissory Notes

October 2018, in connection with the acquisition of Community Specialty Pharmacy, LLC, a $ 300,000 promissory note was issued 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 on October 15, 2021 .

In October 2019, $ 75,000 of the note was converted into 25,000 common shares at $ 3.00 per share,

leaving $ 225,000 of principal owed under the promissory note.

There was a loss recognized on this conversion of $ 76,500 .

2021, the promissory note was paid in full.

December 31, 2022 and 2021, total related party debt was $ 0 .

Deferred Taxes

Company has established a valuation allowance equal to the full amount of the deferred tax asset primarily due to uncertainty in the

utilization of the net operating loss carry forwards.

estimated net operating loss carry forwards of approximately $ 24,893,624 will be available based on the new carryover rules in section

172(a) passed with the Tax Cuts and Jobs Acts.

13 – STOCKHOLDERS’ EQUITY

January of 2022, warrants to purchase 14,584 shares of common stock were exercised and $ 875 in proceeds were received in connection with

the exercise.

August 2021, warrants to purchase 5,000 shares of common stock were granted with an exercise price of $ 3.00 per share, and were exercised

at $ 3.00 per share;

the Company issued 5,000 shares of common stock, and $ 15,000 in proceeds were received in connection with such exercise.

Equity Compensation Awards

September 1, 2022, the Board of Directors and Compensation Committee, awarded shares to six employees

and officers in lieu of reduced cash salary.

In lieu of the reduced cash salary payable to each employee and Officer, the Board and Compensation

Committee agreed to issue such officers and employees shares of the Company’s common stock equal to the amount of reduced cash

salary set forth in the table above, divided by the closing sales price of the Company’s common stock on the NASDAQ Capital Market

on August 31, 2022, the date approved by the Board of Directors.

There was a total of 108,617 common stock shares issued at a price of

$ 1.16 , the closing price of MEDS on August 31, 2022.

A total of the shares of common stock issuable to the employees and officers vest

at the rate of 1/4 th of such shares on each of September 30, 2022, October 31, 2022, November 30, 2022, and December 31, 2022,

subject to each applicable Officer’s and employees continued service to the Company on such dates and subject to the restricted

stock award agreements entered into to evidence such awards.

Independent Director Compensation

on August 31, 2022, the Board of Directors approved the issuance of 54,525 shares of common stock of the Company to each independent

member of the Board of Directors, for services rendered to the Company during fiscal 2022, which shares were valued at $ 63,250 , and based

on the closing sales price of the Company’s common stock on the date approved by the Board of Directors.

The shares vest at the

rate of 1/4 th of such shares immediately on the grant date, and 1/4 th of such shares on each of October 1, 2022,

January 1, 2023 and April 1, 2023, subject to each applicable independent director’s continued service to the Company on such dates.

of the awards discussed above were issued under the Company’s Second Amended and Restated 2019 Plan and all restricted stock awards

discussed above were evidenced by Restricted Stock Grant Agreements.

will be 1,407,276 shares available to grant from the Company’s Second Amended and restated 2019 Equity Incentive Plan.

Designation of Series C Preferred Stock

Effective October 4, 2023, the Company filed a Certificate

of Designation, Preferences, Rights and Limitations of the Series C Preferred Stock with the Secretary of the State of Delaware which

designated 1,000 shares of the Company’s authorized and unissued preferred stock as convertible Series C Preferred Stock at a par

value of $ 0.00001 per share.

Global Ventures Stock Purchase Agreement

On October 4, 2023, the Company entered into a Securities Purchase Agreement

(“Agreement”, or “SPA”) with Hudson Global Ventures, LLC (“Hudson”).

Under the terms of the Agreement,

the Company agreed to sell, and Hudson agreed to purchase, Two Hundred Ninety ( 290 ) shares of Series C Preferred Stock (the “Purchased

Shares”) at a price of $ 1,000 per share and a Warrant to purchase up to 41,193 shares of Common Stock.

Additionally, pursuant to

the Agreement, 40,000 shares of Common Stock were issued to Hudson upon closing for a commitment fee.

The Company received $ 250,000 in

exchange for the Purchased Shares, Common Stock, and Warrants, net of issuance costs.

of Series B Preferred Stock

June 26, 2023, the Company filed a Certificate of Designation, Preferences, Rights and Limitations of the Series B Preferred Stock with

the Secretary of the State of Delaware which designated 787,754 shares of the Company’s authorized and unissued preferred stock

as convertible Series B Preferred Stock at a par value of $ 0.00001 per share.

1:15 Stock Split

June 21, 2023, the Company executed a 1:15 reverse stock split for stockholders of record on that date.

This was executed to comply with

the Nasdaq Listing Rule 5550(a)(2) to have the price of the stock above $ 1 .

Equity Compensation Awards

April 15, 2021, the Board of Directors, with the recommendation of the Compensation Committee, approved the grant of options to purchase

an aggregate of 17,500 shares of our common stock to certain employees of the Company, in consideration for services to be rendered by

such individuals through 2025.

The options vest at the rate of ¼ th of such options per year, on the first, second,

third and fourth anniversaries of the grant date, subject to such option holders continuing to provide services to the Company on such

dates, subject to the terms of the Company’s Second Amended and Restated 2019 Equity Incentive Plan (the “Plan”) and

the option agreements entered into evidence such grants.

The options were granted pursuant to, and are subject to, the Plan, and have

a term of five years from the grant date.

The options have an exercise price of $ 4.76 per share, the closing price of the Company’s

common stock on the date of the grant of such options.

September of 2022 and effective on September 1, 2022 the Board of Directors with recommendation of the Compensation Committee, agreed

to issue certain employees of the Company shares of the Company’s common stock in lieu of reductions to annual cash compensation.

The employees agreed to reduce their salaries by an aggregate of $ 37,000 in consideration for an aggregate of 31,896 shares of the Company’s

restricted common stock.

The shares vested at a rate of 1/4 th each on September 30, 2022, October 31, 2022, November 30, 2022

and December 31, 2022.

connection with and pursuant to the independent director compensation policy previously adopted by the Board of Directors, on April 15,

2021, the then three independent members of the Board of Directors (Mr.

Pamela Tenaerts, and Mr.

were each awarded 10,721 shares of restricted stock, valued at $ 55,000 ($ 5.13 per share) based on the closing sales price of the Company’s

common stock on the Nasdaq Capital Market on the effective date of the grant, April 1, 2021, which vest at the rate of ¼ th

of such shares on July 1 and October 1, 2021 and January 1 and April 1, 2022, subject to such persons continuing to provide services

to the Company on such dates, subject to the terms of the Plan and the Restricted Stock Grant Agreements entered into as evidence of

The shares have a fair value of $ 165,000 and the Company recognized stock-based compensation expense of $ 68,750 for the

twelve months ended December 31, 2021.

Common Shares totaling 16,082 were cancelled on May 27, 2021, when the director services of Mr.

Peterson and Ms.

Tenaerts were terminated.

Board of Directors of the Company, on May 27, 2021, confirmed the vesting of 2,680 shares of common stock previously issued to each of

Peterson and Dr.

Pamela Tenaerts on July 1, 2021, which were subject to forfeiture subject to such persons continued service

on the Board of Directors prior to the vesting date.

connection with and pursuant to the independent director compensation policy previously adopted by the Board of Directors, on May 27,

2021, the Board of Directors awarded Charles L.

Pope, and Christine L.

Jennings, each independent members of the Board of Directors appointed

to the Board of Directors on May 27, 2021, 10,912 shares of restricted stock each, valued at $ 41,250 each ($ 3.78 per share) based on

the closing sales price of the Company’s common stock on the Nasdaq Capital Market on the effective date of the grant, May 27,

2021, which vested at the rate of 1/3rd of such shares on October 1, 2021 and January 1, with the last tranche thereof vesting on April

1, 2022, subject to such persons continuing to provide services to the Company on such date.

The Company recognized stock-based compensation

expense of $ 64,167 for the twelve months ended December 31, 2021.

Agreement with Suren Ajjarapu, Chief Executive Officer

connection with our employment agreement with Mr.

Suren Ajjarapu, our Chief Executive Officer, no stock or other equity compensation

was granted for the year ended December 31, 2021.

September 1, 2022 the Board of Directors and Compensation Committee with the approval of the officers agreed to reduce the annual cash

compensation of Mr.

Suren Ajjarapu.

The reduction was documented in a Second Amendment to Employment Agreement with Mr.

Ajjarapu’ s annual compensation was reduced from $ 360,000 to $ 300,000 .

In lieu of the reduced cash salary payable the Board and

Compensation Committee agreed to issue shares of the Company’s common stock equal to the amount of reduced cash salary divided

by the closing sales price of the Company’s common stock on the Nasdaq Capital Market on August 31, 2022.

The number of common

shares issued was 51,724 .

The shares vested at a rate of 1/4 th each on September 30, 2022, October 31, 2022, November 30,

2022 and December 31, 2022.

Agreement with Prashant Patel, Chief Operating Officer

September 1, 2022 the Board of Directors and Compensation Committee with the approval of the officers agreed to reduce the annual cash

compensation of Mr.

September 1, 2022, the Board of Directors and Compensation Committee of the Company, with the approval of each of the following officers,

agreed to reduce the annual cash compensation payable to Suren Ajjarapu, the Company’s Chief Executive Officer;

Prashant Patel,

The reduction was documented in the First Amendment to Employment Agreement with Mr.

s annual compensation was reduced from $ 150,000 to $ 140,000 .

In lieu of the reduced cash salary payable the Board and Compensation Committee

agreed to issue shares of the Company’s common stock equal to the amount of reduced cash salary divided by the closing sales price

of the Company’s common stock on the Nasdaq Capital Market on August 31, 2022.

The number of common shares issued was 8,620 .

shares vested at a rate of 1/4 th each on September 30, 2022, October 31, 2022, November 30, 2022 and December 31, 2022.

Letter with Ms.

Huffman, Chief Financial Officer

September 1, 2022 the Board of Directors and Compensation Committee with the approval of the officers agreed to reduce the annual cash

compensation of Ms.

The reduction was documented in an Amendment to Offer Letter with Ms.

Huffman’s annual

compensation was reduced from $ 225,000 to $ 200,000 .

In lieu of the reduced cash salary payable the Board and Compensation Committee agreed

to issue shares of the Company’s common stock equal to the amount of reduced cash salary divided by the closing sales price of

the Company’s common stock on the Nasdaq Capital Market on August 31, 2022.

The number of common shares issued was 21,551 .

shares vested at a rate of 1/4 th each on September 30, 2022, October 31, 2022, November 30, 2022 and December 31, 2022.

December 13, 2022 the Board of Directors with recommendation of the Compensation Committee approved the issuance of 50,000 shares of

Restricted Common Stock of the Company to Ms.

Huffman in consideration for services to be rendered.

The shares were awarded pursuant

to and are subject in all cases to the terms and conditions of, the Company’s Second Amended and Restated 2019 Equity Incentive

The shares vest at the rate of 1/4th of such Restricted Common Stock shares on each of December 31, 2022, March 31, 2023, June

30, 2023 and September 30, 2023, subject to Ms.

Huffman remaining employed by the Company through such vesting dates.

The shares were

awarded pursuant to, and are subject in all cases to the terms and conditions of, the Company’s Second Amended and Restated 2019

Equity Incentive Plan.

Repurchase Program

May 27, 2021, the Board of Directors of the Company authorized and approved a stock repurchase program for up to $ 1 million of the currently

outstanding shares of the Company’s common stock.

There is no time frame for the repurchase program, and such program will remain

in place until a maximum of $1.0 million of the Company’s common stock has been repurchased or until such program is suspended

or discontinued by the Board of Directors.

the Market Offering

August 5, 2021, our Board of Directors paused the Stock Repurchase Program until the “at-the-market” offering (discussed

below) was complete.

August 6, 2021, the Company entered into an Equity Distribution Agreement, relating to an “at-the-market” offering for the

sale of up to $ 9 million in shares of the common stock under which EF Hutton, division of Benchmark Investments, LLC, the distribution

agent, could sell the offering shares in public market transactions reported on the consolidated tape or privately negotiated transactions

which could include block trades pursuant to and in connection with the Company’s previously filed Form S-3 Shelf Registration

Statement filed with the Securities and Exchange Commission on August 28, 2020 and declared effective by the Commission on September

3, 2020 (File Number:

333-248473) and the Prospectus Supplement was filed with the Commission under Rule 424(b)(5) dated August 6, 2021

(the “ATM Program”).

on November 30, 2021, the Company provided the distribution agent notice of the termination of the Equity Distribution Agreement and

the ATM Program (each of which were terminated effective December 5, 2021, pursuant to the terms of the Equity Distribution Agreement),

and as a result, $ 128,000 of deferring offering costs were recognized.

shares of common stock were sold pursuant to the “at-the-market” offering prior to the termination date.

of the Stock Repurchase Program

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

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.

There is 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 has

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

of December 31, 2022, no shares have been repurchased.

the Company’s President and Chief Operating Officer and Janet Huffman, the Company’s former Chief Financial Officer, in an

effort to conserve cash.

lieu of the reduced cash salary payable to each officer, the Board and Compensation Committee agreed to issue such officers shares of

the Company’s common stock equal to the amount of reduced cash salary, divided by the closing sales price of the Company’s

common stock on the NASDAQ Capital Market on August 31, 2022, the date approved by the Board of Directors.

The total amount of shares

of common stock issued on August 31, 2022, to the officers was 5,460 .

shares of common stock issuable to the officers vested at the rate of 1/4th of such shares on each of September 30, 2022, October 31,

2022, November 30, 2022, and December 31, 2022, subject to each applicable Officer’s continued service to the Company on such dates

and subject to the restricted stock award agreements entered into as evidence of such awards.

certain employees of the Company agreed to reduce their cash salaries by an aggregate of $ 37,000 in consideration for an aggregate of

2,126 shares of the Company’s restricted common stock, with the same vesting terms as the officer shares discussed above.

on August 31, 2022, the Board of Directors approved the issuance of 3,635 shares of common stock of the Company to each independent member

of the Board of Directors, for services rendered to the Company during fiscal 2022, which shares were valued at $ 63,250 , based on the

closing sales price of the Company’s common stock on the date approved by the Board of Directors.

The shares vested at the rate

of 1/4th of such shares immediately on the grant date, and 1/4th of such shares on each of October 1, 2022, January 1, 2023, and April

1, 2023, subject to each applicable independent director’s continued service to the Company on such dates.

of the awards discussed above were issued under the Company’s Second Amended and Restated 2019 Equity Incentive Plan (the “Plan”)

and all restricted stock awards discussed above were evidenced by Restricted Stock Grant Agreements.

14 – PREFUNDED AND PRIVATE PLACEMENT WARRANTS

October 4, 2022 the Company entered into a securities purchase agreement (the “Purchase Agreement”) with a certain institutional

investor (the “Purchaser”) which provided for the sale and issuance by the Company of (i) the Company’s common stock

(the “Common Stock”), (ii) pre-funded warrants (the “Pre-Funded Warrants”) and (iii) warrants (the “Private

Placement Warrants” and, together with the Shares and the Pre-Funded Warrants, the “Securities”).

The Private Placement

Warrants were sold in a concurrent private placement (the “Private Placement”).

Simultaneously

with the closing of the stock placement, the investor pre-purchased 40,116 Private Warrants at a purchase price of $ 17.25 per warrant.

The Pre-Funded Warrants are immediately exercisable, have an exercise price of $ 0.00001 per share, and may be exercised at any time until

all of the Pre-Funded Warrants are exercised in full.

Each Private Warrant has an exercise price of $ 1.50 per share, will be exercisable

following Stockholder Approval, which was obtained in December 2022, and will expire on the fifth anniversary of the date on which the

Private Warrants become exercisable.

The Private Warrants contain standard adjustments to the exercise price including for stock splits,

stock dividend, rights offerings and pro rata distributions, and include full ratchet anti-dilutive rights in the event the Company issues

shares of Common Stock or Common Stock equivalents within fifteen months of the initial exercise date, with a value less than the then

exercise price of such Private Warrants, subject to certain customary exceptions, and further subject to a minimum exercise price of

$ 0.232 per share.

The Private Warrants also include certain rights upon ‘fundamental transactions’ as described in the Private

Warrants, including allowing the holders thereof to require that the Company re-purchase such Private Warrants at the Black Scholes Value

of such securities.

2022, 2,663,045 private-placement warrants were granted as part of the stock offering, 14,584 were exercised and warrants to purchase

3,027 shares of common stock expired and were forfeited.

2021, warrants to purchase 5,000 shares of common stock were granted, 5,000 were exercised, and warrants to purchase 38,216 shares of

common stock expired and were forfeited.

See Note 4 – Stockholders’ Equity .

the twelve-month period ended December 31, 2022 and 2021, warrants to purchase 14,584 and 5,000 shares of common stock were exercised,

resulting in proceeds of $ 875 and $ 15,000 respectively.

The Pre-Funded Warrants are immediately exercisable into one share of common stock per warrant, have an exercise price of $ 0.00015 per

share, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full.

On January 4, 2023, the investor

exercised the 40,116 warrants for a purchase price of $ 6.02 .

The investor was issued the shares on this date.

Each Private Warrant has

an exercise price of $ 22.50 per share, will be exercisable following Stockholder Approval, which was obtained in December 2022, and will

expire on the fifth anniversary of the date on which the Private Warrants become exercisable.

The Private Warrants contain standard adjustments

to the exercise price including for stock splits, stock dividend, rights offerings and pro rata distributions, and include full ratchet

anti-dilutive rights in the event the Company issues shares of Common Stock or Common Stock equivalents within fifteen months of the

initial exercise date, with a value less than the then exercise price of such Private Warrants, subject to certain customary exceptions,

and further subject to a minimum exercise price of $ 3.48 per share.

The Private Warrants also include certain rights upon ‘fundamental

transactions’ as described in the Private Warrants, including allowing the holders thereof to require that the Company re-purchase

such Private Warrants at the Black Scholes Value of such securities.

15 – WARRANTS

the year ended December 31, 2023, 41,193

warrants were granted, and none

During the year ended December 31, 2023, 40,116

prefunded warrants and 1,795

granted warrants to purchase shares of common stock were exercised for a total purchase price of $ 1,621 .

See Note 13 for further description.

Company uses the Black-Scholes pricing model to estimate the fair value of stock-based awards on the date of the grant.

There were 2,663,045

warrants granted in 2022.

The warrant valuation income/(expense) for the fiscal year 2022 was $ 825,544 .

There was no warrant expense

for the fiscal year ended 2021.

following table summarizes the assumptions used to estimate the fair value of the warrants granted during the years ended December 31,

was no compensation cost related to the warrants for the years ended December 31, 2023, and 2022, respectively.

following table summarizes the assumptions used to estimate the fair value of the outstanding warrants during the years ended December

31, 2023, and 2022.

7 unchanged sentences

SCHEDULE OF OUTSTANDING AND EXERCISABLE WARRANTS

Number Outstanding

Weighted Average Exercise Price

Contractual Life In Years

Intrinsic Value

Exercise Price

Life In Years

Warrants outstanding as of December 31, 2021

10 unchanged sentences

The stock option plans provide for the grant of up to 155,556 shares, and the Company’s Second Amended and Restated 2019

Equity Incentive Plan provides for automatic increases in the number of shares available under such plan (currently 2,000,000 shares)

on April 1 st of each calendar year, beginning in 2021 and ending in 2029 (each a “Date of Determination”), in

each case subject to the approval and determination of the administrator of the plan (the Board of Directors or Compensation Committee)

on or prior to the applicable Date of Determination, equal to the lesser of (A) ten percent (10%) of the total shares of common stock

of the Company outstanding on the last day of the immediately preceding fiscal year and (B) such smaller number of shares as determined

by the administrator, provided that not more than 25 million shares of common stock may be issued pursuant to the exercise of incentive

stock options pursuant to the plan.

The administrator did not approve an increase in the number of shares covered under the plan as of

April 1, 2021.

2022, no options were exercised, 18,499 shares were forfeited, and 96,842 shares expired.

For 2021, options to purchase 36,700 shares

of common stock were granted, 30,353 were exercised, 21,200 were forfeited, and none expired.

The options granted during the period vest

over a four -year period, the average exercise price was $ 4.86 per share and the options have a term of 5 years.

the twelve-month period ended December 31, 2021, options to purchase 30,353 shares of common stock were exercised, resulting in proceeds

the Black-Scholes option price model, fair value of the options granted in 2021 and 2020 were $ 168,008 and $ 557,308 , respectively.

Company uses the Black-Scholes option pricing model to estimate the fair value of stock-based awards on the date of grant.

no stock options granted during the year ended December 31, 2022.

The following table summarizes the assumptions used to estimate the

fair value of stock options granted during the year ended December 31, 2021:

SCHEDULE OF ESTIMATE FAIR VALUE OF STOCK OPTIONS

Expected dividend yield

Weighted-average expected volatility

Weighted-average risk-free interest rate

Expected life of options

compensation cost related to stock options was $ 79,163 and $ 187,273 for the years ended December 31, 2022 and 2021, respectively.

of December 31, 2022, there was $ 29,729 of unrecognized compensation costs related to stock options, which is expected to be recognized

over a weighted average period of 5 years .

The following table represents stock option activity for the two years ended December 31,

Equity Incentive Plan provides for automatic increases in the number of shares available under such plan (currently 133,333 shares) on

April 1 st of each calendar year, beginning in 2021 and ending in 2029 (each a “Date of Determination”), in each

case subject to the approval and determination of the administrator of the plan (the Board of Directors or Compensation Committee) on

or prior to the applicable Date of Determination, equal to the lesser of (A) ten percent (10%) of the total shares of common stock of

the Company outstanding on the last day of the immediately preceding fiscal year and (B) such smaller number of shares as determined

by the administrator.

The administrator as a result of the annual meeting shareholder vote increased the number of shares available to

grant to employees under the 2019 incentive plan by 2 million.

The administrator did not approve an increase in the number of shares

covered under the plan as of April 1, 2022.

the year ended December 31, 2023, 9,053 options to purchase shares were granted, 140 options to purchase shares were forfeited

and 2,393 options expired.

For the year ended December 31, 2023, no options to purchase shares of common stock were exercised.

compensation cost related to stock options granted was $ 29,738 and $ 79,163 for the years ended December 31, 2023, and 2022, respectively.

following table represents stock option activity for the year ended December 31, 2023:

SCHEDULE OF STOCK OPTION ACTIVITY

Number Outstanding

Weighted-Average Exercise Price

Weighted-Average Contractual Life in Years

Intrinsic Value

Weighted-Average

Exercise Price

Weighted-Average

Life in Years

Options outstanding as of December 31, 2021

12 unchanged sentences

Options exercisable as of December 31, 2023

8 – INCOME TAXES

December 22, 2017, H.R.

1, originally known as the Tax Cuts and Jobs Act, (the “ Tax Act ”) was enacted.

Among the significant

changes to the U.S.

Internal Revenue Code, the Tax Act lowers the U.S.

federal corporate income tax rate (“ Federal Tax Rate ”)

from 35 % to 21 % effective January 1, 2018.

statutory tax rate is the percentage imposed by law;

the effective tax rate is the percentage of income actually paid by a company after

considering tax deductions, exemptions, credits and operating loss carry forwards.

December 31, 2022 and 2021 deferred tax assets consist of the following:

SCHEDULE OF DEFERRED TAX ASSETS

December 31, 2022

December 31, 2021

Federal loss carryforwards

valuation allowance

( 4,030,755 )

( 2,347,266 )

Company has established a valuation allowance equal to the full amount of the deferred tax asset primarily due to uncertainty in the

utilization of the net operating loss carry forwards.

estimated net operating loss carry forwards of approximately $ 17,105,445 will be available based on the new carryover rules in section

172(a) passed with the Tax Cuts and Jobs Acts.

9 – OTHER RECEIVABLES

November 19, 2021, Integra filed a complaint against GSG PPE, LLC (“GSG”) and Gary Waxman (“Waxman”), the owner,

alleging three counts of breach of contract for a purchase agreement, a promissory note, and a personal guaranty.

Collectively, the company

alleges that GSG and Waxman have materially breached all three contracts.

In late 2020, GSG and Integra executed a valid initial contract

setting the terms of a business transaction.

GSG failed to pay Integra approximately 75% of the amount owed to Integra.

GSG acknowledged

it owed the money and executed a promissory note in favor of Integra in the amount of $ 630,000 which matured on September 30, 2021.

note provides for attorney fees and interest in addition to the $ 630,000 .

Waxman’s personal guaranty confirmed that GSG owed Integra

On September 30, 2021, the $ 630,000 was recorded as Bad Debt Expense.

A settlement was entered into between the parties in

June 2022, whereby GSG and Waxman agreed to pay $ 743,000 which included attorney fees and interest, which is required to be paid to the

Company in monthly installments over 17 months.

In Fiscal 2022, the Company received approximately $ 248,000 recorded as credits to legal

expenses and bad debt expense.

17 – CONTINGENCIES

Defense Group, LLC

July 2020, the Company’s wholly-owned subsidiary, Integra Pharma Solutions, LLC (“Integra”), entered into an agreement

with Studebaker Defense Group, LLC (“Studebaker”) wherein Integra would pay Studebaker a down payment of $ 500,000 and Studebaker

would deliver 180,000 boxes of nitrile gloves by August 14, 2020.

Integra wired the $ 500,000 to Studebaker, but to date, Studebaker has

not delivered the gloves or provided a refund of the deposit.

In December 2020, we filed a complaint against Studebaker in Florida state

court, Case No.

20-CA-010118 in the Circuit Court for the Thirteenth Judicial Circuit in Hillsborough County, for among other things,

breach of contract.

Studebaker did not answer the complaint, nor did counsel for Studebaker file an appearance.

Accordingly, in February

2021, the Company filed for a default judgment;

however, on March 22, 2021, counsel for Studebaker filed an appearance and shortly thereafter

filed a motion to vacate the default judgment and dismiss the complaint on jurisdictional grounds.

The court granted Studebaker’s

motion to set aside the default judgment but denied the motion to dismiss.

The Company has filed several pretrial motions;

the next step

in the litigation after the pre-trial motions are resolved will be a motion for summary judgment.

The Company believes it will prevail

on the merits but cannot determine the timing of the judgment or the amount ultimately collected.

At June 30, 2021, the $ 500,000 was

recorded as Loss on Inventory Investment.

July 2020, the Company’s wholly-owned subsidiary, IPS, entered into an agreement with Studebaker Defense Group, LLC (“Studebaker”)

wherein IPS would pay Studebaker a down payment of $ 500,000 and Studebaker would deliver 180,000 boxes of nitrile gloves by August 14,

IPS wired the $ 500,000 to Studebaker, but to date, Studebaker has not delivered the gloves or provided a refund of the deposit.

In December 2020, the Company filed a complaint against Studebaker in Florida state court, Case No.

20-CA-010118 in the Circuit Court

for the Thirteenth Judicial Circuit in Hillsborough County, for among other things, breach of contract.

Studebaker did not answer the

complaint, nor did counsel for Studebaker file an appearance.

Accordingly, in February 2021, the Company filed for a default judgment;

however, on March 22, 2021, counsel for Studebaker filed an appearance and shortly thereafter filed a motion to vacate the default judgment

and dismiss the complaint on jurisdictional grounds.

The court granted Studebaker’s motion to set aside the default judgment but

denied the motion to dismiss.

At June 30, 2021, the $ 500,000 was recorded as Loss on Inventory Investment.

The Company won this case

but has not collected any settlement yet, another lawsuit was filed to collect.

April 13, 2023, a settlement was reached in the Studebaker and IPS legal case.

The court found in favor of IPS and ordered Studebaker

to pay $ 550,000 to IPS.

The payments were to commence on May 1, 2023 and continue monthly in 17 installments until the full amount is

paid in full but as of the filing date, no payment has been received by IPS.

Group Dsn Bhd and Crecom Burj Group SDN BHD

August 2020, Integra, entered into an agreement with Sandwave Group Dsn Bhd (“Sandwave”), wherein Integra would pay Sandwave

a down payment of $ 581,250 and Sandwave’s supplier, Crecom Burj Group SDN BHD (“Crecom”), would deliver 150,000 boxes

of nitrile gloves within 45 days.

Integra wired the $ 581,250 to Sandwave, which in turn wired the purchase price to Crecom, which Crecom

however, to date, Crecom has not delivered the nitrile gloves.

Integra demanded return of its $ 581,250 and Crecom has acknowledged

that Integra is entitled to a refund, but to date Crecom has failed to return Integra’s money.

In February 2021, Integra filed

a complaint against Crecom in Malaysia:

WA-22NCC-55-02/2021 in the High Court of Malaysia at Kuala Lumpur in the Federal Territory,

Malaysia for the Malaysian equivalent of breach of contract.

Crecom filed an appearance on March 1, 2021.

In April 2021, an Application

for Summary Judgment was filed with the court, and on May 25, 2021, the Court extracted the sealed application, and a copy thereof was

served on Crecom’s attorneys and Crecom, 14 days later, filed an Affidavit in Reply with the court alleging that there are issues

to be tried and that this case must go to a full trial.

On June 28, 2021, the court directed both parties to file their written submissions/arguments

in relation to the application for summary judgment on or before July 12, 2021, and scheduled a hearing thereon for August 26, 2021.

At the final hearing on October 18, 2021, the ruling for the summary judgment was denied.

On September 1, 2022, Crecom informed the court

that Crecom had been liquidated pursuant to Malaysian insolvency laws and the court proceedings were stayed.

ON September 7, 2022, Integra

received written confirmation from Crecom counsel and a copy of the relevant Winding Up Order.

Accordingly, the complaint was dismissed.

August 2020, IPS entered into an agreement with Sandwave Group Dsn Bhd (“Sandwave”), wherein IPS would pay Sandwave a down

payment of $ 581,250 and Sandwave’s supplier, Crecom Burj Group SDN BHD (“Crecom”), would deliver 150,000 boxes of nitrile

gloves within 45 days.

IPS wired the $ 581,250 to Sandwave, which in turn wired the purchase price to Crecom, which Crecom accepted;

to date, Crecom has not delivered the nitrile gloves.

IPS demanded return of its $ 581,250 and Crecom acknowledged that IPS was entitled

As of February 2021, Crecom had not returned any funds and IPS filed a complaint against Crecom in Malaysia:

WA-22NCC-55-02/2021

in the High Court of Malaysia at Kuala Lumpur in the Federal Territory, Malaysia for the Malaysian equivalent of breach of contract.

On September 1, 2022 counsel for Crecom informed the court that Crecom had been wound up on August 23, 2022;

under Section 471 of the

Malaysian Companies Act 2016, the suit filed by IPS was stayed until leave of the court is obtained to proceed.

Given this new information

regarding Crecom the Company has decided at this time to stop its pursuit of this lawsuit until or unless additional information is obtained

by counsel for IPS.

At June 30, 2021, the $ 581,250 was recorded as Loss on Inventory Investment.

Memantine, et al.

January 2020, we became aware of a complaint filed by Jitendra Jain, Manish Arora, Scariy Kumaramangalam, Harsh Datta and Balvant Arora

(collectively, plaintiffs), against our wholly-owned subsidiary, Trxade, Inc.

and our Chief Executive Officer, Suren Ajjarapu as well

as certain unrelated persons, Annapurna Gundlapalli, Gajan Mahendiran and Nexgen Memantine (collectively, defendants), in the Circuit

Court of Madison County, Alabama (Case:47-CV-2019-902216.00).

The complaint alleged causes of actions against the defendants including

fraud in the inducement, relating to certain investments alleged to have been made by plaintiffs in Nexgen Memantine, breach of fiduciary

duty, conversion and voidable transactions.

The complaint related to certain investments alleged made by the plaintiffs in Nexgen Memantine

and certain alleged fraudulent transfers of assets and funds alleged to have been taken by the defendants which are unrelated to the

May 14, 2021, Plaintiffs filed a second amended complaint against the defendants.

The second amended complaint alleges causes of action

against the defendants including securities fraud, breach of fiduciary duty, violation of the Florida RICO Act, and breach of contract.

The operative complaint relates to certain investments alleged to have been made by the plaintiffs in Nexgen Memantine and certain alleged

transfers of assets and funds alleged to have been taken by the defendants which are unrelated to the Company.

The amended complaint

seeks injunctive relief, $ 425,000 in compensatory damages, treble damages, punitive damages, and fees and costs.

February 2022, a settlement as to Suren Ajjarapu, Annapurna Gundlapalli and the Company was reached and signed.

This settlement involved

no admission of liability and a full and complete release of all actions after a lump-sum payment of $ 225,000 was made.

Because the complaint

purports to be a derivative action, court approval was required, which approval was received on March 14, 2022.

As a result of the settlement,

the Plaintiff’s dismissed their lawsuit with prejudice.

Company elected the practical expedient under ASU 2018-11 “ Leases:

Targeted Improvements ” which allows the Company

to apply the transition provision for Topic 842 at the Company’s adoption date instead of at the earliest comparative period presented

in the financial statements.

Therefore, the Company recognized and measured leases existing at January 1, 2019, but without retrospective

In addition, the Company elected the optional practical expedient permitted under the transition guidance which allows the

Company to carry forward the historical accounting treatment for existing leases upon adoption.

No impact was recorded to the beginning

retained earnings for Topic 842.

The Company has two operating leases for corporate offices.

The following table outlines the details

of such leases:

November 19, 2021, IPS filed a complaint against GSG PPE, LLC (“GSG”) and Gary Waxman (“Waxman”), the owner,

alleging three counts of breach of contract for a purchase agreement, a promissory note, and a personal guaranty.

Collectively, the company

alleges that GSG and Waxman have materially breached all three contracts.

In late 2020, GSG and IPS executed a valid initial contract

setting the terms of a business transaction.

GSG failed to pay IPS approximately 75% of the amount owed to IPS.

GSG acknowledged it owed

the money and executed a promissory note in favor of IPS in the amount of $ 630,000 which matured on September 30, 2021.

The note provides

for attorney fees and interest in addition to the $ 630,000 .

Waxman’s personal guaranty confirmed that GSG owed IPS $ 630,000 .

September 30, 2021, the $ 630,000 was recorded as Bad Debt Expense.

A settlement was entered into between the parties in June 2022, whereby

GSG and Waxman agreed to pay $ 743,000 which included attorney fees and interest, which is required to be paid to the Company in monthly

installments over 17 months.

The Company received additional monthly installment payments as part of the agreement through January 2023.

As of December 31, 2023, and through the date of this filing, the Company has not received the monthly installment payments due to the

Company from GSG since January of 2023.

Company has two operating leases for corporate offices as of December 31, 2023.

The following table outlines the details of the leases:

SCHEDULE OF OPERATING LEASES

1 unchanged sentence

January 2021 to December 2021

November 2018 to November 2023

Renewal Lease Term

November 2023 to November 2028

October 2018 to November 2023

October 2023 to September 2026

New Initial Lease Term

January 2022 to December 2026

New Renewal Lease Term

January 2027 to December 2031

Initial Recognition of Right to use assets at January 1, 2019

New Initial Recognition of Right to use Assets at December 31, 2021

November 2023 to October 2028

Initial Recognition of Right of use assets at January 1, 2019

New Initial Recognition of Right of use Assets at December 31, 2021

New Initial Recognition of Right of use Assets at December 31, 2023

Incremental Borrowing Rate

Company entered into a new corporate office lease (Lease 1) on January 2022.

The Company determined that entering into the new lease

Company entered into a new corporate office lease (Lease 1) in January 2022.

At inception, the Company determined that the new lease

required remeasurement of the lease liability resulting in the increase of the right-of-use asset and the associated lease liability

by $ 977,220 .

The new lease is still classified as an operating lease.

The Company and the Lessor agreed to terminate the lease and vacate the premises in November 2023.

The termination resulted in the

surrender of the Company’s security deposit of $ 38,500 .

The related right-of-use assets of $ 642,887 and lease liabilities of

$ 664,992 were removed from the balance sheet as of December 31, 2023.

Company entered into a lease agreement (Lease 2) for the period of October 2018 to November 2023.

At inception, management had included

the renewal period from November 2023 to November 2028 within the initial recognition of the related right of use assets and lease liabilities,

as it was reasonably expected, at the time, that the renewal option would be exercised.

The Company determined that the new lease required

measurement and recognition of the lease liability and right-of-use assets of $ 313,301 .

The lease is classified as an operating lease.

No incentives were included in the lease.

Company entered into a new warehouse lease (Lease 3) October 2023.

The Company determined that the new lease required measurement

and recognition of the lease liability and right-of-use assets of $ 351,581 .

The lease is classified as an operating lease.

No incentives were included in the lease.

table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years

to the operating lease liabilities recorded in the Consolidated Balance Sheet as of December 31, 2022.

to the lease liabilities recorded in the Consolidated Balance Sheet as of December 31, 2023.

SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR OPERATING LEASE LIABILITIES

Amounts due within twelve months of December 31

Future lease obligations

Total minimum lease payments

3 unchanged sentences

Long-term lease obligations

difference to the balance sheet above is due to the current and long-term remaining obligations of the copier lease not included in the

amount of $ 13,943 as of December 31, 2022.

the years ended December 31, 2022, and 2021, amortization of right-of-use assets was $ 181,218

and $ 131,558 ,

respectively.

the years ended December 31, 2022, and 2021, operating lease liabilities paid was $ 164,618 and 131,153 , respectively.

Weighted Average Discount Rate

Weighted Average Term Remaining

Short-Term Lease Expense Remaining

the years ended December 31, 2023, and 2022, total lease expense was $ 385,977 and $ 344,525 , respectively.

the years ended December 31, 2023, and 2022, amortization of right-of-use assets was $ 215,665 and $ 181,218 , respectively.

the years ended December 31, 2023, and 2022, net operating lease liabilities settled was $ 195,475 and $ 164,618 , respectively.

19 – SEGMENT REPORTING

Company classifies its business interests into reportable segments which are Trxade, Inc., Community Specialty Pharmacy, LLC, Integra

Pharma, LLC and Other (Unallocated).

Operating segments are defined as the components of an enterprise about which separate financial

information is available that is evaluated regularly by the chief operating decision makers in deciding how to allocate resources and

in assessing performance.

The Company’s chief operating decision makers direct the allocation of resources to operating segments

based on the profitability, cash flows, and growth opportunities of each respective segment.

segments are defined as the components of an enterprise about which separate financial information is available that is evaluated regularly

by the chief operating decision makers in deciding how to allocate resources and in assessing performance.

The Company’s chief

operating decision makers direct the allocation of resources to operating segments based on the profitability, cash flows, and growth

opportunities of each respective segment.

Company classifies its business interests into reportable segments which are:

- Web based pharmaceutical marketplace platform – B2B sales

- Integra Pharma, LLC - Licensed wholesaler of brand, generic and non-drug products – B2B sales

– holds Sapientia’s intellectual property for advanced food extrusion technology and The Urgent Company – Manufacturer

of ice cream that is animal product-free, vegan, lactose-free, and made with plants – B2B sales

- Other – corporate overhead expense, discontinued operations and Bonum Health, LLC.

SCHEDULE OF BUSINESS INTERESTS INTO REPORTABLE SEGMENTS

Year Ended December 31, 2022

Years Ended December 31, 2023

( 3,872,136 )

Segment Assets

2 unchanged sentences

( 9,083,777 )

( 17,843,574 )

Cost of Sales

Year Ended December 31, 2021

Years Ended December 31, 2022

Segment Assets

2 unchanged sentences

( 3,909,868 )

( 5,315,883 )

Cost of Sales

20 – SUBSEQUENT EVENTS

to December 31, 2022 and prior to the filing of this Form 10-K the Company had the following events.

January 3, 2023, Charles L.

Pope resigned as a member of the Board of Directors.

Pope’s resignation he also served as

the Chairman of the Company’s Audit Committee and served on the Company’s Compensation Committee and Nominating and Governance

January 4, 2023, to fill the vacancy left by Mr.

Pope’s resignation, the Board of Directors of the Company, with the recommendation

of the Nominating and Corporate Governance Committee of the Board of Directors, appointed Mr.

Peterson as a member of the

Board of Directors.

Peterson was also appointed to serve as the Chairperson of the Board of Director’s Audit Committee and

as a member of the Compensation Committee and Nominating and Corporate Governance Committee.

As part of Mr.

Peterson’s compensation

he will receive cash compensation in the amount of $ 55,000 per year for services on the board of directors, $ 20,000 per year for services

as the Chairman of the Audit Committee (each paid 1/4 th quarterly).

The Company also issued Mr.

Peterson 100,000 shares of

restricted common stock, vesting quarterly over two years (beginning April 1, 2023), as well as options vesting over two years valued

at $ 55,000 , for his services on the Board.

All equity awards were issued under a stockholder approved equity incentive plan, and are

subject to the terms of such plan.

January 6, 2023, a restricted stock grant to Jeff Newell of 79,062 ,

as compensation as part of Board compensation.

January 6, 2023, the investor exercised their prefunded warrants in the amount of 601,740

shares per the stock issuance agreement from the October 2023 funding.

The total amount paid to exercise the shares was $ 6.02

at a price of $ .00001

January 20, 2023, the Company entered into Membership Interest Purchase Agreements to sell 100 % of the outstanding membership interests

of the Company’s subsidiaries, Alliance Pharma Solutions, LLC and Community Specialty Pharmacy, LLC.

The Company will receive consideration

in the amount of $ 125,000 for Alliance Pharma Solutions, LLC and $ 100,000 for Community Specialty Pharmacy, LLC.

The Company also agreed

to enter into a Master Service Agreement to operate the businesses prior to closing, additional amounts owed to the Company as a result

of this Master Service Agreement are estimated to total approximately an aggregate of $ 266,000 as of the closing date, currently expected

to occur on April 30, 2023.

January 30, 2023, the Company received a delist determination letter from The Nasdaq Stock Market LLC.

(the “Staff”), advising

the Company that the Staff had determined that the Company was not in compliance with the minimum continued listing requirements of stockholders’

equity, and that the Company had not met the terms of the extension granted to them in in October 2022 to regain compliance by the deadline

of January 25, 2023.

Specifically, the Company did not complete its proposed transactions and was unable to file a Current Report Form

8-K by the January 25, 2023 deadline previously required by the Staff, evidencing compliance with the Rule.

February 6, 2023, the Company submitted a hearing request to the Nasdaq Hearings Panel (the “Panel”), which request will

stay any delisting action by the Staff at least until the hearing process concludes and any extension granted by the Panel expires.

the Panel hearing, the Company intends to present a plan to regain compliance with the minimum stockholders’ equity requirement.

In the interim, the Company’s common stock will continue to trade on Nasdaq under the symbol “MEDS” at least pending

the ultimate conclusion of the hearing process.

February 27, 2023, Ms.

Janet Huffman, the Company’s Chief Financial Officer notified the Company of the termination of her Offer

Letter dated February 3, 2022.

Effective March 1, 2023, Ms.

Huffman also transitioned from Chief Financial Officer to a consulting relationship

with the Company instead of a full-time employee relationship.

It is expected that Ms.

Huffman will provide a set number of hours of

her time to the Company and that the Company will engage a new Chief Financial Officer (or similar position) to replace Ms.

Effective March 6, 2023, Prashant Patel, a member of the Board of Directors, the President and the Chief Operating Officer of the Company,

was appointed as Interim Principal Financial/Accounting Officer of the Company.

March 1, 2023, the Company issued 50,000

shares to White Lion Capital LLC as part of an

On March 2, 2023, the Company entered into an

agreement with Agile Capital Funding LLC., for an accounts receivable funding agreement in the amount of $ 787,500 .

CHANGES IN AND DISAGREEMENTS

WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Purchase Agreement

February 16, 2024, the Company, together with Trxade, Inc., a wholly owned subsidiary of the Company, and Micro Merchant Systems, Inc.

(“MMS”) entered into an asset purchase agreement (the “APA”) under which MMS agreed to purchase for cash substantially

all of the assets of Trxade, Inc.

On February 16, 2024, the parties consummated the closing of the transactions contemplated by the APA.

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

accessories and services.

The purchase price paid at closing was $ 22.5 million, subject to customary adjustments for cash, indebtedness,

working capital and transaction expenses.

Subject to the terms and conditions of the APA, if, during the period beginning on the closing

date and ending on the four-month anniversary of the closing date, MMS receives $ 1.6 million or greater in certain collections from third

parties resulting from any products or services sold, or provided, by the business assets and operations acquired from Trxade, Inc.,

will be due an additional $ 7.5 million payment from MMS.

February 29, 2024, the Company’s wholly owned subsidiary Trxade, Inc.

entered into a Subscription Agreement (the “Subscription

Agreement”) with Lafayette Energy Corp., a Delaware corporation (“Lafayette”).

Pursuant to the Subscription Agreement,

will, in two equal tranches, invest a total of up to $ 5.0 million in Lafayette in exchange for up to 2,000,000 shares of

Lafayette’s newly created Series A Convertible Preferred Stock, with the second tranche becoming payable only upon Trxade, Inc.’s

receipt of notice that Lafayette has successfully drilled its first oil and gas well and produced at least one hundred (100) barrels

Michael Peterson is a director of the Company

as well as the CEO of Lafayette and a member of Lafayette’s board of directors.

This relationship was disclosed to the Company’s

Board of Directors and the audit committee of the Board of Directors prior to, and at the time that the terms of the Subscription Agreement

and the transaction effected thereby were approved by the Board of Directors as a whole and the members of the audit committee.

Purchase Agreement

March 5, 2024, the Company entered in a Stock Purchase Agreement (“SPA”) with Superlatus Foods Inc.

(the “Buyer”).

Pursuant to the SPA, the Company sold all of the issued and outstanding stock (the “Stock”) of Superlatus Inc., a Delaware

corporation and wholly-owned subsidiary of the Company (“Superlatus”), to the Buyer.

The purchase price for the Stock was

$ 1.00 which was delivered to the Company at the closing, which occurred simultaneously with the execution of the SPA.

As a result of

the transaction Superlatus is no longer a subsidiary of the Company, and the rights and assets of Superlatus together with various liabilities

and obligations that were specific to Superlatus became rights and obligations of Buyer.

Cash Dividend

March 6, 2024, the Company announced the declaration of a special cash dividend of eight dollars ($ 8.00 ) per share of common stock, payable

to stockholders of record as of March 18, 2024, with the dividend being paid on or about March 22, 2024.

The special dividend was paid

using a portion of the proceeds from the closing of the sale of the Company’s web-based market platform assets.

IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data