TRxADE HEALTH(US:MEDS)2022-11-07 21:31Financial Performance - Total revenues for the three months ended September 30, 2022, were $2,400,311, a decrease of 5.9% compared to $2,550,046 for the same period in 2021[17] - Gross profit for the nine months ended September 30, 2022, was $3,908,608, representing an increase of 11.5% from $3,505,743 in the prior year[17] - Operating loss for the three months ended September 30, 2022, was $(407,031), a significant improvement from $(1,296,126) in the same period of 2021[17] - Net loss attributable to TRxADE Health, Inc. for the nine months ended September 30, 2022, was $(2,546,913), compared to $(4,531,543) for the same period in 2021, indicating a reduction in losses[17] - Net loss for the nine months ended September 30, 2022, was $2,606,839, compared to a loss of $4,531,543 for the same period in 2021, representing a 42.5% improvement[24] - The company reported a net loss per common share of $(0.06) for the three months ended September 30, 2022, compared to $(0.16) for the same period in 2021[17] Assets and Liabilities - Total current assets decreased to $2,373,006 as of September 30, 2022, down from $4,374,244 as of December 31, 2021[15] - Total liabilities increased to $3,332,683 as of September 30, 2022, compared to $1,995,991 as of December 31, 2021[15] - Cash reserves decreased significantly to $321,715 as of September 30, 2022, from $3,122,578 as of December 31, 2021[15] - The accumulated deficit of the company reached $18.8 million as of September 30, 2022, with working capital of $0.3 million and a cash balance of $0.3 million, raising concerns about the ability to continue as a going concern[38] Operating Expenses - Operating expenses for the nine months ended September 30, 2022, totaled $6,387,317, down from $8,015,712 in the previous year[17] - Operating expenses decreased by 29.8% to $1,809,022 for the three months ended September 30, 2022, compared to $2,577,167 in the same period in 2021[180] - General and administrative expenses (excluding stock-based compensation) decreased to $1,309,840 for the nine months ended September 30, 2022, from $1,581,832 in 2021[190] Cash Flow - Cash used in operating activities for the nine months ended September 30, 2022, was $2,755,979, an increase from $2,139,511 in 2021[24] - Total cash at the end of the period was $321,715, down from $3,571,889 at the end of the same period in 2021, indicating a significant decrease in liquidity[24] - Cash used in investing activities for the nine months ended September 30, 2022, was $312,902, compared to $0 in the same period in 2021, due to software capitalization[176] Debt and Financing - The company has a total related party debt of $500,000 as of September 30, 2022, which represents a promissory note due to Exchange Health[40] - The company entered into a non-recourse funding agreement on September 14, 2022, receiving $275,000 to purchase $396,000 of future receivables, with a one-time origination fee of $15,000[41] - Net cash provided by financing activities was $268,018 in 2022, contrasting with a net cash outflow of $208,178 in 2021, reflecting improved financing conditions[24] Stock and Equity - The Company authorized a share repurchase program for up to $1 million of its common stock, with no expiration date specified[56] - The Company can sell up to 1,626,208 shares to White Lion under the Purchase Agreement, which is approximately 19.99% of the outstanding shares prior to the agreement[145] - The Company is required to file a registration statement for the resale of shares issuable upon exercise of the Private Placement Warrants within 60 days of the Purchase Agreement[160] Strategic Initiatives - The company is exploring strategic alternatives for its subsidiaries, including Community Specialty Pharmacy, Alliance Pharma Solutions, and Bonum Health[113][114][115] - The company anticipates needing to raise additional capital or secure debt funding to support ongoing operations, which may not be available on favorable terms[38] - The company has not entered into any definitive agreements for mergers or acquisitions but is in discussions with various parties[167] Internal Controls - The company has identified material weaknesses in internal controls related to insufficient written policies for accounting and financial reporting under GAAP and SEC requirements[207] - Management believes that these material weaknesses did not affect the financial results reported[209] - Plans are in place to prepare and implement sufficient written policies and checklists to address the identified weaknesses[210] Operational Challenges - The company has not experienced significant negative impacts on operations, revenues, or gross profit due to COVID-19, but has faced supply chain interruptions and staffing challenges[118] - The corporate office was closed until December 31, 2021, with employees working remotely since March 17, 2020[119] Revenue Growth - For the nine months ended September 30, 2022, total revenue was $8,919,312, an increase from $7,501,535 for the same period in 2021, representing a growth of approximately 18.9%[78] - Revenue from Trxade platform sales increased by 10%, while revenue from Trxade Prime increased by 57% for the nine months ended September 30, 2022[188]