What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-26 compared with 2024-04-22 · 313 added, 382 removed, 32 unchanged (96% of the section changed)

1 unchanged sentence

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

financial statements and related notes in “Item 8.

Financial Statements and Supplemental Data” of this Report.

This discussion

contains forward-looking statements based on the views and beliefs of our management, as well as assumptions and estimates made by our

See “Cautionary Statement Regarding Forward-Looking Information” above.

These statements by their nature are

subject to risks and uncertainties and are influenced by various factors.

As a consequence, actual results may differ materially from

those in the forward-looking statements.

financial statements and related notes in the section entitled “ Item 8.

Financial Statements and Supplemental Data ”

of this Annual Report.

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

as assumptions and estimates made by our management.

See the section entitled “ Cautionary Statement Regarding Forward-Looking

Information ” above.

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

As a consequence, actual results may differ materially from those in the forward-looking statements.

See “ Item 1A.

Risk Factors” of this report for the discussion of risk factors.

all periods presented, the consolidated statements of income and consolidated balance sheet data have been adjusted for the reclassification

of discontinued operations information, unless otherwise noted.

All references to years relate to the calendar year ended December 31

of the particular year.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “ MD&A ”) is provided

in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations,

financial condition, and cash flows.

Risk Factors ”

of this Annual Report for the discussion of risk factors.

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

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

All references

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

of The Information Contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is provided in addition to the

accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition,

and cash flows.

MD&A is organized as follows:

of Operations .

Summary of the Company’s plan of operations for the next 12 months.

Summary of the main sources of Company revenue during the reported periods.

of Operations .

An analysis of our financial results comparing the years ended December 31, 2023, and 2022.

Discussion of our business and overall analysis of financial and other highlights affecting us, to provide context

for the remainder of MD&A.

Summary of material transactions occurring during year ended December 31, 2024.

and Capital Resources .

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

Accounting Policies and Estimates .

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

and judgments incorporated in our reported financial results and forecasts.

Issued Accounting Standards .

A summary of recently issued accounting standards affecting the Company, if any.

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

of Operations .

had a working capital deficit of $8,803,293 as of December 31, 2023, compared to working capital deficit of $53,668 as of December

The decrease in working capital of $8,749,625 is related to decreases in cash and increases in liabilities.

reasons for the decrease in working capital.

decreased approximately $943,000 from December 31, 2022 to December 31, 2023.

The reasons for the

decrease are as follows:

repayments of debt, net of new debt issuances;

paid for interest expense related to the sale of future accounts receivable.

in current liabilities of approximately $9,409,564 from December 31, 2022 to December 31, 2023 were driven by the following main

increase in accounts payable balance as of December 31, 2023 compared to the comparable period;

increase in the balance due on the sale of future accounts receivable as of December 31, 2023 compared to the comparable period;

increase in the current portion of notes payable balance;

increase in purchase price payable balance as of December 31, 2023 compared to the comparable period.

our current cash on hand, expected revenues, and based on our current average monthly expenses, we anticipate the need for additional

funding in order to continue our operations at their current levels, and to pay the costs associated with being a public company, for

the next 12 months.

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

The sources of this capital are expected to be equity

investments and notes payable.

Our plan for the next twelve months is to continue development of the information technology used in the

Company subsidiaries.

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

product and overall customer experience.

We will require additional funding, we may seek to raise that through the sale of debt or equity,

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

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

2023 we had four main revenue streams:

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

(“ Suppliers ”) to sell products and services to licensed pharmacies (“ Customers ”).

The Company charges

Suppliers a transaction fee, a percentage of the purchase price of the prescription drugs and other products sold through its website

The Company holds no inventory and assumes no responsibility for the shipment or delivery of any products or services from our

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

Subsequent to December 31,

2023, we divested substantially all of our assets previously owned and operated by Trxade, Inc.

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

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

Customer returns, to date, have not been material.

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

The Company fills prescriptions for drugs

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

Customer returns, to date,

have not been material.

In August 2023 we sold our entire interest in Community Specialty Pharmacy, LLC.

The Urgent Company, Inc., our wholly-owned subsidiary, is a retail and distribution provider of prepackaged, prepared foods.

Subsequent to December 31, 2023, we divested our interest in The Urgent

Company, LLC.

An analysis of our financial results comparing the years ended December 31, 2024, and 2023.

Accounting Policies .

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

in our reported financial results and forecasts.

September 20, 2024, the Company filed with the Secretary of State of the State of Delaware an amendment to its Second Amended and Restated

Certificate of Incorporation to change the legal name of the Company from “TRxADE HEALTH, Inc.” to “Scienture Holdings,

Company owned, as of December 31, 2024, 100% of Softell Inc.

(f/k/a Trxade Inc.), Integra Pharma Solutions, LLC and Scienture, LLC (f/k/a

Scienture, Inc.).

October 4, 2024, the Company and Softell entered into IPS Assignment Agreement, pursuant to which the Company transferred, and Softell

accepted, 100% of the membership interests of IPS.

As a result, IPS is now a wholly-owned subsidiary of Softell.

During the year ended

December 31, 2023 and a portion of the quarter ended March 31, 2024, Softell, operated a web-based market platform that enabled commerce

among healthcare buyers and sellers of pharmaceuticals, accessories and services.

Softell’s current primary operations are conducted

IPS 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.

Health, LLC 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 Company is in the process of determining a divestment and winddown plan for Softell and IPS.

On January 25, 2025,

the Company’s Board of Directors approved the preparation of a divestment and winddown plan for the winddown of each of Softell,

IPS, Bonum Health, Inc., and Bonum.

LLC is a New York based branded, specialty pharmaceutical research company which is engaged in the research and development of branded

pharmaceutical products.

The intellectual property application process was initiated in November 2019 and the product development activities

commenced in January 2020.

Scienture LLC also plans to foray into commercialization of innovative and branded pharmaceutical products

in the US market.

Scienture LLC’s assets in development are across therapeutics areas and indications and cater to different market

Scienture LLC’s mission is to identify, develop and bring to market innovative technology-based products to address unmet

medical needs.

Its targeted portfolio consists of short term and long-term opportunities with efficient development, regulatory, and

go to market strategies.

ITEM 1 of PART 1

See ITEM 1 of PART 1

September 20, 2024, the Company filed with the Secretary of State of the State of Delaware an amendment to its Second Amended and Restated

Certificate of Incorporation to change the legal name of the Company from “TRxADE HEALTH, Inc.” to “Scienture Holdings,

Inc.” (the “Name Change”).

Other than the Name Change, there were no changes to the Company’s certificate of

incorporation or bylaws.

September 23, 2024, the Company’s common stock trades under the ticker symbol “SCNX”.

The Name Change resulted in a

change to the CUSIP number for the Company’s outstanding shares of common stock offered on the Nasdaq Stock Market LLC.

Outlook Cash Explanation

primary objectives for the year of 2025 are expected to be the continued implementation of the Scienture LLC business plan, and to complete

potential strategic transactions of our business-to-consumer subsidiaries, which may include a potential sale, spin-off, fund raising,

combination or other strategic transaction, and also include the winding down of such entities.

There can be no assurance that our operations

will generate significant positive cash flow, or that additional funds will be available to us, through borrowings or otherwise, on favorable

terms if required in the future, or at all.

We may also raise additional funding in the future through the sale of equity.

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

Expenses from January 2025 to December 2025

administrative (1)

Includes estimated wages and payroll, legal and accounting, marketing, rent and research and development.

may require additional funding in the future to implement on our business plan and potentially to expand or complete acquisitions.

sources of this capital are expected to be equity investments and notes payable.

Our plan for the next twelve months is to continue using

the same marketing and management strategies to promote our IPS assets and operations, exploring strategic transactions involving our

corporate assets, while also seeking to expand our and Scienture LLC operations organically or through acquisitions, as funding and opportunities

In the event we require additional funding, we plan to raise that through the sale of debt or equity, which may not be available

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

If we are unable to access additional

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

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

realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated

financial statements are issued.

In accordance with Financial Accounting Standards Board, or the FASB, Accounting Standards Update No.

2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions

or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after

the date that the financial statements are issued.

of December 31, 2024, the Company had an accumulated deficit of $39,038,973 and $308,096 in cash.

will need to raise additional capital or secure debt funding to support on-going operations, and to fund the assets and operations of

any businesses or assets we acquire.

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.

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.

following table summarizes our Consolidated Statements of Cash Flows for the following periods:

Net cash (used in) provided by

operating activities from continuing operations

(13,286,163 )

(16,931,420 )

Net cash used in operating activities from

discontinued operations

Operating Activities

(14,265,238 )

(12,040,046 )

Net cash used in investing activities from

continuing operations

Net cash provided by investing activities from

discontinued operations

Investing Activities

Net cash (used in) provided by financing

activities from continuing operations

(12,974,770 )

(14,881,102 )

Net cash used in financing activities from

discontinued operations

Financing Activities

(12,979,770 )

(14,386,102 )

Net change in cash

$ (1,094,577 )

used in operating activities for the year ended December 31, 2024, was $14,265,238 compared to $2,225,192 in 2023.

The increase in

cash used in operations for the year ended December 31, 2024 was mainly due to our net loss and cash used in operating assets and

liabilities in 2024 driven by other receivables, partially offset by non-cash charges.

provided by investing activities for the year ended December 31, 2024, was $27,552,791 and cash used in investing activities was $275,717

for the year ended December 31, 2023.

The increase in cash provided by investing activities in 2024 was primarily due to the MMS disposition

in the first quarter and cash received in acquisition of Scienture, Inc., partially offset by the investment in securities of $2,500,000.

Cash provided by in financing activities for the year ended December 31, 2024, was ($14,979,770) compared to $1,406,332 of cash provided

by financing activities for the year ended December 31, 2023.

The change was primarily due to the payment of dividends of $14,858,831

In August 2024, the Company received note proceeds of $314,000 and $2,640,000 in net proceeds from convertible debenture in

November 2024.

of Operations

the Year Ended December 31, 2023, compared to the Year Ended December 31, 2022

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

to these statements included in “Item 8.

Financial Statements and Supplemental Data” of this Report.

For all years presented,

the consolidated statements of income and consolidated balance sheet data set forth in this Form 10-K have been adjusted for the reclassification

of discontinued operations information, unless otherwise noted.

Fiscal Year Ended

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

the notes to these statements included above.

Ended December 31, 2024, compared to Year Ended December 31, 2023

Cost of sales

Operating expenses:

Loss on inventory investment

Technology, research & development

Wages and salary

Accounting and legal

Wage and salary expense

Professional fees

Other general and administrative (less stock-based compensation expense)

Warrants and options expense

Total operating expenses

Change in fair value of warrant liability

Interest, net

Goodwill impairment

Gain on disposal of asset

Net loss from operations

$ (13,720,546 )

Accounting and legal

Technology expense

General and administrative

(including stock-based compensation expense)

Research and development

operating expenses

Change in fair value

of warrant liability

Change in fair value

of derivative liability

Investment impairment

Interest income

Loss on disposal of

Interest expense

loss from continuing operations

(18,778,876 )

(10,296,011 )

Loss on discontinued operations

Net loss attributable to TRxADE Health, Inc.

Benefit / (provision) for income taxes

Net loss from continuing operations, net of tax

(18,244,480 )

Income (loss) from discontinued operations,

Net income/(loss)

$ (17,843,574 )

Net loss attributable to non-controlling interests

revenues during the years ended December 31, 2023, and 2022 were mainly from the Trxade Inc.

platform, Integra Pharma Solutions, and The Urgent Company.

Revenues decreased $1,977,954 for fiscal year 2023, compared to the prior year’s

revenue of $10,250,168.

Trxade, Inc., revenue increased by $852,933 or 16% to $6,200,334, compared to $5,347,401, for the years ended

December 31, 2023, and 2022, which is attributable to a 16% increase in sales volume on the platform in 2023.

Integra Pharma Solutions’

revenue decreased by $3,390,237, or 71%, which is attributable to decreased sales volume and pricing changes.

The Trxade, Inc.

is a secondary marketplace for pharmaceuticals and medical supplies with consistent growth year over year.

of sales was $5,673,957 and gross profit was $2,598,257, for the year ended December 31, 2023, compared to $4,730,897 and

$5,519,271, respectively, for the year ended December 31, 2022.

The increase in cost of sales is attributed to the inventory costs

and inventory write-downs associated with The Urgent Company.

profit as a percentage of sales was 31.4% for the year ended December 31, 2023, compared to 53.8% for the year ended December 31, 2022.

The reason for the decrease in gross profit as a percentage of sales was a result of increased inventory and cost of sales associated

with The Urgent Company.

research and development expenditures increased to $1,376,908 for the year ended December 31, 2023, compared to $993,185 for the

year ended December 31, 2022, as the Company continued to develop apps for customers and make improvements to our platform

fees increased for the year ended December 31, 2023 by $999,832 to $1,466,567 compared to $466,735 for the year ended December 31,

The increase in professional fees for the year ended December 31, 2023 related to the merger with Superlatus and purchase of

The Urgent Company.

administrative expenses (less stock-based compensation expense) increased for the year ended December 31, 2023 to $2,498,123

were $136,643 in revenues for the year ended December 31, 2024.

Revenues decreased by $1,227,187, compared to the same period ended December

31, 2023 primarily because of the disposition of the assets and operations of Softell completed in February 2024 which resulted in the

Company having fewer revenue generating operations when compared to the comparable period in 2023.

the year ended December 31, 2024, cost of goods sold and gross profit were $130,638 and $6,005, and $1,314,800 and $49,031, all

respectively for the same period in 2023.

Cost of goods sold decreased by $1,184,162, compared to the same period ended December 31,

2023 primarily because of the disposition of the assets and operations of Softell completed in February 2024 which resulted in the

Company having fewer cost of goods sold.

Gross profit as a percentage of sales was 4.39% for the year ended December 31, 2024,

compared to 3.60% for the year ended December 31, 2023.

The increase is largely driven by amortization expense related to

intangible assets acquired through the Sapientia Technologies acquisition.

stock-based compensation expense decreased by 13.7% or $45,774 to $287,510 from $333,284 for the year ended December 31, 2023, compared

to the prior year’s period.

The decrease was due to less common stock issued for services during the year ended December 31, 2023 compared to the year ended December

Company recognized a loss on inventory investment of $875,520 for the year ended December 31, 2022, in connection with COVID-19 test

kits that were purchased and could not be resold due to issues with the FDA.

Company had interest expense, net, of $1,194,148 for the year ended December 31, 2023, compared to interest expense of $315,217 for the

year ended December 31, 2022.

The increased interest expense is driven by the increases in the contingent funding liability due to additional

accounts receivable advances during the year ended December 31, 2023.

the year ended December 31, 2023, the Company recognized a loss from the change in the fair value of warrants of $148,420.

the year ended December 31, 2022, the Company recognized a gain from the change in the fair value of warrants of $825,544.

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 from operations increased $11,317,104 to a net loss of $13,720,546 for the year ended December 31, 2023, compared to a net loss

of $2,403,442 for the year ended December 31, 2022.

The increase in net loss is mainly due to the write-down of inventory due to

spoilage, increases in spending related to the merger transaction with Superlatus and purchase of TUC and goodwill impairment charges.

loss from discontinued operations increased $2,616,602 to a net loss of $4,123,028 for the year ended December 31, 2023, compared to

a net loss from discontinued operations of $1,506,426 for the year ended December 31, 2022.

and salary expense increased by $1,484,520 for the year ended December 31, 2024 to $2,111,067 compared to $626,547 for the comparable

period in 2023.

The increase is primarily due to an increase in salary of the COO and CEO of IPS, as well as the increased personnel

as a result of the Scienture Merger in July 2024, as compared to the same period in 2023.

fees increased by $583,196 to $1,458,332 compared to $875,136 for the comparable period in 2023.

The increase was primarily due to increase

in Board members’ fees and consulting expense and post- acquisition professional fees of Scienture LLC.

and legal expenses increased by $162,836 for the year ended December 31, 2024 to $1,669,717 compared to $1,506,881 for the comparable

period in 2023.

The increase is primarily due to increase in amount of legal services during the year ended December 31, 2024 as compared

to the same period in 2023.

and administrative expenses (including stock-based compensation expense) increased by $5,369,446 for the year ended December 31, 2024,

to $6,706,082 compared to $1,336,637 for the comparable period in 2023.

The increase was mainly due to shares issued for services at

fair value of $4,598,294 in 2024.

expense increased by $316,031 for the year ended December 31, 2024 to $416,311 compared to $100,280 for the comparable period in 2023.

The increase was mainly due to increased software expense and software support expense.

and development expense pertaining to Scienture LLC’s operations post-acquisition was $2,236,690 for the year ended December 31,

Research and development expenses was mainly due to contract research

organization costs of Scienture LLC.

Total expenses by program were as follows:

Project Codes

research and development expense

had interest expense of $1,335,631 for the year ended December 31, 2024, compared to interest expense of $1,143,223 for the year ended

December 31, 2023.

The increase is due to the interest expense on Scienture LLC’s convertible debt, the convertible notes issued

in August and 2024, and related debt discount amortization on these notes, partially offset by the Superlatus notes no longer being outstanding

after its disposition in early 2024.

recognized a loss on the change in the fair value of the warrant liability of $182,982 for the year ended December 31, 2024 compared

to a loss of $148,420 during the year ended December 31, 2023, based on the underlying valuation inputs.

recognized a loss on the change in the fair value of the derivative liability of $180,383 for the year ended December 31, 2024, based

on the underlying valuation inputs and the conversion features of the Arena convertible debenture.

recognized impairment loss of $2,500,000 of the investment in equity securities for the year ended December 31, 2024.

the year ended December 31, 2024, the Company incurred a net loss from continuing operations of $18,244,480 compared to $8,482,864 for

the year ended December 31, 2023.

The change was due to change in operating income, other income (expense),

and provision for income taxes.

income from discontinued operations increased by $36,670,988 to a net income of $27,310,278 for the year ended December 31, 2024, compared

to a net loss from discontinued operations of $9,360,710 for the year ended December 31, 2023.

The increase was primarily due to the

disposal of Softell assets, partially offset by loss on disposal of Superlatus during the year ended December 31, 2024.

and Capital Resources

and Cash Equivalents

and cash equivalents were $151,908 as of December 31, 2023.

We expect that our future available capital resources will consist primarily

of cash generated from operations, remaining cash balances, proceeds from potential asset divestitures or strategic transactions, borrowings,

and any additional funds raised through sales of debt and/or equity.

was $308,096 as of December 31, 2024, compared to $314 as of December 31, 2023.

The increase in cash was primarily due to the proceeds

in February 2024 and May 2024 related to the disposition of certain assets to MMS as described above and convertible debentures issued

in November 2024.

We expect that our future available capital resources will consist primarily of cash generated from operations, remaining

cash balances, borrowings, and additional funds raised through sales of debt and/or equity securities.

current assets, current liabilities, short term debt and working capital at the end of each period were as follows:

Current assets (excluding cash)

Current liabilities (excluding short term debt)

Short term debt

Working deficit

principal sources of liquidity during the years ended December 31, 2023 and 2022 have been cash provided by operations (internal source).

the year ended December 31, 2023, sales of future receivables provided a principal source of liquidity.

During the year ended December 31, 2022, equity capital and borrowings

under various debt arrangements (external source) and a stock placement deal of 920,000 shares.

Our principal uses of cash have been

for operating expenses and research and development of our newer business units.

We anticipate these uses will continue to be our

principal uses of cash in the future in addition to any necessary business acquisitions.

We currently do not have any material

unused sources of liquid assets.

decreased by $942,986 and other current assets increased by $1,602,925.

The decrease in cash was primarily due to interest expense

associated with the sale of future receivables and net repayments of debt as well as the professional fees and accounting and legal expenses associated with the merger with Superlatus and

the acquisition of The Urgent Company.

The increase in other current assets was primarily due

to a note receivable and other receivables from the sale of APS and CSP.

Current liabilities

(excluding short term debt) increased by $3,046,231 from $1,980,124 to $5,026,355 for the year ended December 31, 2023.

increase is primarily due to an increase in accounts payable and contingent

funding liabilities from the sale of future receivables.

Outlook cash explanation

primary objectives for 2024 are to continue the development and operational expansion of Integra Pharma Solutions and to explore

strategic transactions, relationships or acquisitions to grow or operations whether in our legacy industry or outside of that

general industry.

There can be no assurance that our operations will generate significant positive cash flow, or that additional

funds will be available to us, through borrowings or otherwise, on favorable terms if required in the future, or at all.

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

Projected Expenses for 2024

General and administrative (1)

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

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

The sources of this capital are expected to be equity

investments and notes payable.

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

to promote our Integra Pharma Solutions assets and operations, exploring strategic transactions involving our corporate assets, while

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

As our business continues

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

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

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

If we are unable to access additional capital

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

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

States pharmaceutical industry.

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

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

following table summarizes our Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2023, and 2022:

Percent Change

Net loss from continuing operations

$ (3,649,462 )

$ (2,403,442 )

Working capital

$ (1,601,416 )

Net cash provided by (used in):

Net cash (used in) operating activities from continuing operations

Net cash (used in) operating activities from discontinued operations

Operating activities

Net cash (used in) investing activities from continuing operations

Net cash provided by (used in) investing activities from discontinued operations

Investing activities

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

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

Financing activities

Net change in cash

$ (8,803,292 )

used in operations for the fiscal year ended December 31, 2023 was $2,073,601.

This compared to $1,564,668 of cash used in

operating activities for the fiscal year ended December 31, 2022.

The increase in cash used in operations was mainly due to

increased professional fees and accounting and legal expense for the comparable period as a result of the merger with Superlatus and

the purchase of The Urgent Company, partially offset by decreased wages and salary expense due to the departure of two members of

management during 2023.

used in investing activities for the year ended December 31, 2023 was $275,717.

This compared to $427,845 of cash used in investing

activities for the year ended December 31, 2022.

In 2023, the net cash used mainly related to net cash exchanged in acquisition and

During the year ended December 31, 2022, the cash was used for an investment in capitalized software for

provided by financing activities for the year ended December 31, 2023 was $1,406,332 and cash used in financing activities

for the year ended December 31, 2022, was $35,171.

The increase was mainly due to proceeds from the sale of future receivables.

Contractual and Other Obligations & Commitments

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

including contractual purchase obligations related to various supply contracts, lease obligations, and other liabilities.

following table summarizes our contractual obligations as of December 31, 2023:

Payments due by Period

Contractual Obligations

Operating lease obligations

Total Contractual obligations

Sheet Arrangements

had no outstanding off-balance sheet arrangements as of December 31, 2023.

Accounting Policies and Estimates

principal sources of liquidity have historically been cash provided by operations, sales of business assets and operations from time

to time, sales of equity, and borrowings under various debt arrangements.

Our principal uses of cash have been for operating expenses,

technology development, and acquisitions.

We anticipate these uses will continue to be our principal sources of, and uses of, cash in

increase in cash as of December 31, 2024 compared to 2023 was primarily due to the proceeds received in February 2024 and May 2024 resulting

from the disposition of assets to MMS as described above, as well as the convertible note issued in August 2024 and convertible debentures

issued in November 2024.

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 March 22, 2024.

The special dividend of $12,671,072 was

paid using a portion of the proceeds from the closing of the sale of certain assets.

July 9, 2024, the Company announced the declaration of a special cash dividend of one dollar and fifty cents ($1.50) per share of common

stock, payable to stockholders of record as of July 19, 2024, with the dividend being paid on July 22, 2024.

The special dividend was

$2,187,759 paid using a portion of the proceeds received in May 2024 in connection with the February 2024 sale of certain assets.

Accounting Policies

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

2 unchanged sentences

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

of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses for each

We consider an accounting estimate to be critical if the estimate requires us to make assumptions about matters that were uncertain

at the time the accounting estimate was made and if different estimates that we reasonably could have used in the current period, or

changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on our financial

condition or results from operations.

Below are the estimates that we believe are critical to the understanding of our operation results

and financial condition.

Other accounting policies are described in Financial NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

Because of the uncertainty inherent in such estimates, actual results may differ from these estimates.

for Doubtful Accounts

provide short-term credit and other customer financing arrangements to customers who purchase our products.

We estimate the receivables

for which we do not expect full collection based on historical collection rates and specific knowledge regarding the current creditworthiness

of our customers and record an allowance in our consolidated financial statements for these amounts.

consider historical experience, the current economic environment, customer credit ratings or bankruptcies, and reasonable and supportable

forecasts to develop its allowance for doubtful accounts.

Management reviews these factors quarterly to determine if any adjustments

are needed to the allowance.

methodologies are assessed annually based on historical losses and economic, business and market trends.

In addition, reserves are reviewed

quarterly and updated if unusual circumstances or trends are present.

We believe the reserves maintained and expenses recorded during the year ended December 31, 2023

are appropriate and consistent in the context of historical methodologies employed, as well as assessment of trends currently available.

determining whether an inventory valuation allowance is required, we consider various factors including estimated quantities of slow-moving

inventory by reviewing on-hand quantities, outstanding purchase obligations and forecasted sales.

Shifts in market trends and conditions,

changes in customer preferences due to the introduction of generic drugs or new pharmaceutical products or the loss of one or more significant

customers are factors that could affect the value of our inventories.

We write down inventories which are considered excess and obsolete

as a result of these reviews.

These factors could make our estimate of inventory valuation differ from actual results.

account for business combinations using the acquisition method of accounting whereby the identifiable assets and liabilities of the acquired

business, as well as any noncontrolling interest in the acquired business, are recorded at their estimated fair value as the date that

we obtain control of the acquired business.

Any purchase consideration in excess of the fair values of the net assets acquired is recorded

Acquisition-related expenses and related restructuring costs are expensed as incurred.

valuation methods may be used to determine the fair value of the assets acquired and liabilities assumed.

For intangible assets, we typically

use a method that is a form of variation of the income approach, whereby a forecast of future cash flows attributable to the asset are

discounted to present value using a risk-adjusted discount rate.

Some of the more significant estimates and assumptions inherent in the

income approach include the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent

in the future cash flows and the assessment of the asset’s expected useful life.

perform an impairment test on goodwill balances annually in the third quarter and more frequently if indicators for potential impairment

Indicators that are considered include significant declines in performance relative to expected operating results, significant

changes in the use of the assets, significant negative industry or economic trends, or a significant decline in the Company’s stock

price and/or market capitalization for a sustained period of time.

impairment testing is conducted at the reporting unit level, which is generally defined as an operating segment or a component, one level

below our operating segment, for which discrete financial information is available and segment management regularly reviews the operating

results of the reporting unit.

estimate the fair value of our reporting units, we generally use a combination of the market approach and the income approach.

the market approach, we estimate fair value by comparing the business to similar business, or guideline companies whose securities are

actively traded in public markets.

Under the income approach, we use a discounted cash flow (“ DCF ”) model in which

cash flows anticipated over several periods, plus a terminal value at the end of that time horizon, are discounted to their present value

using an appropriate rate that is commensurate with the risk inherent within the reporting unit.

In addition, we compare the aggregate

of the reporting units’ fair values to our market capitalization as further corroboration of the fair values.

of fair value result from a complex series of judgements about future events and uncertainties and rely heavily on estimates and assumptions

at a point in time.

Judgements made in determining an estimate of fair value may materially impact our results of operations.

The valuations

are based on information available as of the impairment testing date and are based on expectations and assumptions that have been deemed

reasonable by management.

Any material changes in key assumptions, including failure to meet business plans, negative changes in government

reimbursement rates, deterioration in the U.S.

and global financial markets, an increase in interest rates or an increase in the cost

of equity financing by market participants within the industry or other unanticipated events and circumstances, may decrease the projected

cash flows or increase the discount rate and could potentially result in an impairment charge.

Under the market approach, significant

estimates and assumptions also include the selection of appropriate guideline companies and the determination of appropriate valuation

multiples to apply to the reporting unit.

Under the income approach, significant estimates and assumptions also include the determination

of discount rates.

The discount rates represent the weight-average cost of capital measuring the reporting unit’s cost of debt

and equity financing, which are weighted by the percentage of debt and percentage of equity in a company’s target capital structure.

Included in the estimate of the weight-average cost of capital is the assumption of an unsystematic risk premium to address the incremental

uncertainty related to the reporting units’ future cash flow projections.

An increase in the unsystematic risk premium increases

the discount rate.

of Equity Method Investments

evaluate our investments for other-than-temporary impairments when circumstances indicate those assets may be impaired.

When the decline

in value is deemed to be other than temporary, an impairment is recognized to the extent that the fair value is less than the carrying

value of the investment.

We consider various factors in determining whether a loss in value of investment is other than temporary including:

the length of time and the extent to which the fair value has been below the cost, the financial condition of the investees, and our

intent and ability to retain the investment for a period of time sufficient to allow for recovery of value.

Management makes certain

judgments and estimates in its assessment including but not limited to:

identifying if circumstances indicate a decline in value is other

than temporary, expectations about the business operations of investees, as well as industry, financial, and market factors.

Any significant

changes in assumptions or judgments in assessing impairments could result in an impairment charge.

income tax expenses, and deferred tax assets and liabilities reflect management’s best assessment of estimated current and future

taxes to be paid.

We are subject to income taxes in the U.S.

Significant judgments and estimates are required in determining the consolidated

income tax provision and in evaluating income tax uncertainties.

We review our tax positions at the end of each quarter and adjust the

balances as new information becomes available.

income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense.

In evaluating

our ability to recover our deferred tax assets, we consider all available positive and negative evidence including our past operating

results, the existence of cumulative net operating losses in the most recent years, and our forecast of future taxable income.

In estimating

the future taxable income, we develop assumptions including the amount of future federal operating income, the reversal of temporary

differences, and the implementation of feasible and prudent tax planning strategies.

These assumptions require significant judgment about

the forecasts of future taxable income and are consistent with the plans and estimate we use to manage the underlying businesses.

in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future.

Should tax laws change, our tax expense

and cash flows could be materially impacted.

Contingencies

may be subject to various claims, including claims with customers and vendors, pending and potential legal actions for damages, investigations

relating to laws and regulations and other matters arising out of the normal conduct of our business.

When a loss is considered probably

and reasonably estimable, we record a liability in the amount of our best estimate for the ultimate loss.

However, the likelihood of

a loss with respect to a particular contingency is often difficult to predict and determining a meaningful estimate of the loss or a

range of loss may not be practicable based on the information available and the potential effect of future events and decisions by third

party that will determine the ultimate resolution of the contingency.

Moreover, it is not uncommon for such matters to be resolved over

many years, during which time relevant developments and new information must be reevaluated at least quarterly to determine both the

likelihood of potential loss and whether it is possible to reasonably estimate a range of possible loss.

When a material loss is reasonably

possible or probably, but a reasonable estimate cannot be made, disclosure of the proceeding is provided.

Legal fees are recognized as

incurred when the legal services are provided.

review all contingencies at least quarterly to determine whether the likelihood of loss has changed and to assess whether a reasonable

estimate of the potential loss or range of the loss can be made.

As discussed above, development of a meaningful estimate of loss or

a range of potential loss is complex when the outcome is directly dependent on future negotiations with our decision by third parties,

such as regulatory agencies, the court system and other interest parties.

account for stock-based compensation to employees in accordance with ASC 718, “ Compensation-Stock Compensation ”.

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.

of contingent assets and liabilities at the date of the financial statements and the reported amount of net sales and expenses for each

The following represents a summary of our critical accounting policies, defined as those policies that we believe are the most

important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective

or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

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

Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers.”

is a licensed wholesaler of brand, generic and non-drug products to Customers.

IPS takes orders for products, creates invoices for each

order and recognizes revenue at the time the product is shipped to the Customer.

Customer returns are not material.

the contract with the Customer – IPS requires that an application and a credit card for payment be 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 IPS.

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

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 is returned.

The variability is determined based on

the return policy of the product manufacturer.

There are no sales or volume discounts.

The transaction price is determined at the time

of the order evidenced by the invoice.

Allocate the transaction price – 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 product is shipped to the Customer.

Urgent Company, Inc., which was a wholly-owned subsidiary, is a retail and distribution provider of prepackaged, prepared foods.

to December 31, 2023, we divested our interest in The Urgent Company, Inc.

Acquisitions,

Goodwill and Other Intangible Assets

Company allocates the cost of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values

at the date of acquisition.

The excess value of the cost of an acquired business over the estimated fair value of the assets acquired

and liabilities assumed is recognized as goodwill.

The Company uses a variety of information sources to determine the value of acquired

assets and liabilities, including:

identifiable intangibles.

and indefinite-lived intangibles are not amortized but are instead evaluated annually for impairment as part of the Company’s annual

financial review, or when indicators of a potential impairment are present.

The annual test for impairment performed for goodwill can

be qualitative or quantitative, taking into consideration certain factors surrounding the fair value of the goodwill including, level

by which fair value exceeded carrying value in the prior valuation, as well as macroeconomic factors, industry conditions and actual

results at the test date.

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.

Sheet Arrangements

the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under SEC rules.

Issued Accounting Standards

more information on recently issued accounting standards, see “ Note 2 - Summary of Significant Accounting Policies ” ,

to the Notes to Consolidated Financial Statements included herein under “ Item 8.

Financial Statements and Supplemental Data ”.

more information on recently issued accounting standards, see “NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION”, to

the Notes to Consolidated Financial Statements included herein under “PART I.

FINANCIAL STATEMENTS”.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1 unchanged sentence

it is a “ smaller reporting company, ” as defined by Rule 229.10(f)(1).

STATEMENTS AND SUPPLEMENTAL DATA

Holdings, Inc.

formerly TRxADE HEALTH, INC.

the Year Ended December 31, 2024

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PCAOB ID:

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FINANCIAL INFORMATION

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 7. Management’s Discussion and Analysis