TRxADE HEALTH(US:MEDS)2023-08-18 20:05Financial Performance - Total revenues for Q2 2023 were $2,251,076, a decrease of 31.2% compared to $3,278,729 in Q2 2022[14] - Gross profit for the first half of 2023 was $3,201,807, up 27.7% from $2,506,617 in the same period of 2022[14] - Operating loss for Q2 2023 was $(345,625), an improvement from $(1,103,106) in Q2 2022[14] - Net loss attributable to TRxADE Health, Inc. for the first half of 2023 was $(2,652,831), compared to $(2,043,910) in the first half of 2022[14] - For the six-month period ended June 30, 2023, the company reported no revenue from discontinued operations, with a net loss of $146 compared to a net loss of $11,611 for the same period in 2022[43] - For the six months ended June 30, 2023, the company reported a net loss of $2,300,587, an increase of 11% compared to a net loss of $2,078,097 for the same period in 2022[134] - Revenues for the six months ended June 30, 2023, were $4,498,826, down 31% from $6,519,001 in the same period in 2022[144] - Gross profit for the six months ended June 30, 2023, was $3,201,807, representing a gross margin of 71%, compared to 38% for the same period in 2022[145] - Operating expenses decreased by 14.9% to $3,894,838 for the six months ended June 30, 2023, from $4,578,295 in the same period in 2022[144] Cash Flow and Liquidity - Cash decreased to $745,561 as of June 30, 2023, down from $1,111,156 at the end of 2022[12] - Cash flows from operating activities resulted in a net cash used of $602,965 for the six months ended June 30, 2023, compared to $2,179,054 for the same period in 2022, indicating a significant reduction in cash outflow[19] - Cash at the end of the period was $745,561, down from $962,227 at the end of the same period in 2022, a decrease of approximately 22.6%[19] - The company had a cash balance of $745,561 as of June 30, 2023, indicating limited financial resources[175] - The company’s cash paid for interest increased to $243,126 for the six months ended June 30, 2023, compared to $3,328 for the same period in 2022[19] - Cash provided by investing activities for the six months ended June 30, 2023, was $281,394, compared to cash used of $257,172 in the same period in 2022[135] Liabilities and Equity - Total current liabilities increased significantly to $4,262,947 as of June 30, 2023, from $2,146,791 at the end of 2022[12] - As of June 30, 2023, the company had an accumulated deficit of $21.9 million and a working capital deficit of $2.2 million, with a cash balance of $746,000[40] - Current liabilities increased by 115% to $4,262,947 as of June 30, 2023, compared to $1,980,124 at the end of 2022[129] - Working capital deficit expanded to $(2,167,902) as of June 30, 2023, a 3939% increase from $(53,670) at the end of 2022[129] - The company recognized the fair value of its contingent obligation to the funding source as a current liability in its consolidated balance sheet[53] Compliance and Regulatory Matters - The company executed a 1:15 reverse stock split effective June 21, 2023, to comply with Nasdaq Listing Rule 5550(a)(2)[29] - The Company received a notice from Nasdaq indicating non-compliance with the minimum stockholders' equity requirement of $2,500,000, with an extension granted until January 25, 2023, to regain compliance[82] - A public offering plan was presented to regain compliance, including an underwritten offering of up to $15,000,000, which was approved by Nasdaq[83] - The Company demonstrated compliance with the $2,500,000 minimum stockholders' equity requirement following a merger, as confirmed by Nasdaq[84] - The company is at risk of delisting from Nasdaq if it fails to meet compliance requirements, which could adversely affect stock liquidity and trading[189] - The company must maintain a stock price over $1.00 per share to comply with Nasdaq listing requirements[188] Strategic Initiatives and Acquisitions - The company completed the acquisition of Superlatus on July 31, 2023, making it a wholly owned subsidiary[88] - Shareholders of Superlatus received 136,441 shares of common stock, representing 19.9% of the total issued and outstanding common stock post-merger[89] - The company entered into Membership Interest Purchase Agreements to sell subsidiaries for a total consideration of $225,000, with an additional estimated amount of $266,000 owed as part of a Master Service Agreement[24] - The company is exploring strategic alternatives for its business-to-consumer subsidiaries, including potential sales or spin-offs[111][113] Operational Highlights - The company reported a significant increase in accounts payable, rising to $863,579 from $682,653 at the end of 2022[12] - The company granted 603 stock options during the six-month period ended June 30, 2023, with a total compensation cost of $22,217, down from $51,875 in the same period of 2022, reflecting a decrease of approximately 57.3%[68] - The company experienced a 30.3% reduction in wages and salary expenses, totaling $1,726,858 for the six months ended June 30, 2023, compared to $2,248,082 in 2022[144] - The company implemented expense reduction initiatives starting in July 2022, leading to a reduction in salary and wages expense of approximately $521,000 for the six months ended June 30, 2023[148] - The company has expanded significantly since 2015, with a total of 14,100+ registered members on its sales platform[102] - The company’s services focus on optimizing drug procurement and enhancing the retail pharmacy experience for approximately 19,397 independent pharmacies with an annual purchasing power of $67.1 billion[102] Challenges and Risks - The company may face challenges in obtaining additional capital, which could adversely affect its ability to continue as a going concern[175] - There are no commitments for additional financing, and any equity financing will be dilutive to existing stockholders[177] - The company has not fully implemented necessary internal controls, which were identified as material weaknesses[162] - The company experienced significant inflationary pressures in 2022 and the first half of 2023, impacting operating costs due to supply chain disruptions and increased demand[178]