10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 333-130446

PRAXSYN CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Illinois	20-3191557
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

18011 Sky Park Circle, Suite N
Irvine, CA	92614
(Address of Principal Executive Offices)	(Zip Code)

(949) 777-6112

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [  ]	Accelerated filer [  ]
Non-accelerated filer [  ] (Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ] No [X]

The number of shares outstanding of the registrant’s common stock as August 19, 2014 was 343,954,384.

PRAXSYN CORPORATION

TABLE OF CONTENTS TO FORM 10-Q

			Page
PART I FINANCIAL INFORMATION
	Item 1.	Financial Statements (unaudited)	F-1
		Condensed Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013	F-1
		Condensed Consolidated Statements of Operations for the Six Months Ended June 30, 2014 and 2013	F-2
		Condensed Consolidated Statement of Stockholders’ Deficit for the Six Months Ended June 30, 2014	F-3
		Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013	F-4
		Notes to Condensed Consolidated Financial Statements	F-5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6
	Item 4.	Controls and Procedures	6
PART II OTHER INFORMATION
	Item 1.	Legal Proceedings	7
	Item 1A.	Risk Factors	7
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7
	Item 3.	Defaults Upon Securities	7
	Item 4.	Mine Safety Disclosures	7
	Item 5.	Other Information	7
	Item 6.	Exhibits	7
SIGNATURE			8

2

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

PRAXSYN CORPORATION AND SUBSIDIARIES

(FORMERLY THE PAWS PET COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

	June 30, 2014			December 31, 2013
ASSETS
Current assets:
Cash	$	518,550		$	37,494
Accounts receivable, net of allowance and long-term portion		8,523,170			3,564,770
Inventories		78,383			13,441
Other current assets		24,905			20,230
Current assets		9,145,008			3,635,935
Property and equipment, net		41,332			27,782
Accounts receivable, long-term		3,134,858			983,440
Debt issuance cost, net		-			24,361
Other assets		5,879			5,879
Deferred tax asset		248,455			248,455
Total assets	$	12,575,532		$	4,925,852
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	607,032		$	191,002
Accrued liabilities		714,417			187,502
Accrued interest		1,348,991			1,011,414
Accrued marketing		5,542,017			1,411,493
Notes payable		5,304,182			5,639,594
Notes payable to related parties		501,567			406,664
Settlement liability		697,539			248,000
Liabilities of discontinued operations		961,831			-
Deferred tax liability		459,411			459,411
Total current liabilities		16,136,987			9,555,080
Commitments and contingencies (Note 7)
Stockholders’ Deficit:
Series D, no par value, 500,000 issued; 457,168 and 174,184 outstanding at June 30, 2014 and December 31, 2013, respectively, liquidation preference $20,000,000		-			-
Series B, no par value, 70,565 and 0 issued and outstanding at June 30, 2014 and December 31, 2013, respectively, liquidation preference $2,116,950 and $0		-			-
Series C, no par value, 545 and 0 issued and outstanding at June 30, 2014 and December 31, 2013, respectively, liquidation preference $54,500 and $0		-			-
Series A, no par value, none issued and outstanding at June 30, 2014 and December 31, 2013, respectively, liquidation preference $0 and $0		-			-
Common stock, no par value, 1,400,000,000 and 1,100,000,000 shares authorized, 327,454,384 and 0 issued and outstanding at June 30, 2014 and December 31, 2013, respectively		-			-
Additional paid-in capital		49,485,468			35,624,371
Accumulated deficit		(52,846,923	)		(40,053,599	)
Treasury stock at cost, 389,623 shares at June 30, 2014 and December 31, 2013, respectively		(200,000	)		(200,000	)
Total stockholders’ deficit		(3,561,455	)		(4,629,228	)
Total liabilities and stockholders’ deficit	$	12,575,532		$	4,925,852

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-1

PRAXSYN CORPORATION

(FORMERLY THE PAWS PET COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Net revenues	$	23,242,709		$	498,712		$	32,462,272		$	3,638,285
Cost of net revenues		975,134			156,156			1,306,917			328,811
Gross profit		22,267,575			342,556			31,155,355			3,309,474
Operating expenses:
General and administrative (includes stock-based compensation of $21,317 and $0, $121,317 and $0, for the three and six months ended June 30, 2014, and 2013, respectively)		982,224			275,179			1,582,177			674,662
Sales and marketing (includes stock-based compensation of $4,975,951 and $0, $8,779,250 and $0, for the three and six months ended June 30, 2014, and 2013, respectively)		12,696,619			37,910			20,077,336			759,456
Total operating expenses		13,678,843			313,089			21,659,513			1,434,118
Operating income		8,588,732			29,467			9,495,842			1,875,356
Other income and (expense):
Interest expense		(9,558,629	)		(689,554	)		(15,266,695	)		(1,367,901	)
Warrant modification expense		-			-			(7,111,444	)		-
Other gain or loss, net		188,973			-			88,973			-
Other income (expense), net		(9,369,656	)		(689,554	)		(22,289,166	)		(1,367,901	)
Income (loss) from operations before income taxes		(780,924	)		(660,087	)		(12,793,324	)		507,455
Provision (benefit) for income taxes		-			(462,923	)		-			355,881
Net income (loss)	$	(780,924	)	$	(197,164	)	$	(12,793,324	)	$	151,574
Weighted average number of common shares outstanding:
Basic		304,290,027			-			153,749,151			-
Diluted		304,290,027			-			153,749,151			332,309,958
Net income (loss) income per share:
Basic	$	(0.00	)	$	0.00		$	(0.08	)	$	0.00
Diluted	$	(0.00	)	$	0.00		$	(0.08	)	$	0.00

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-2

PRAXSYN CORPORATION AND SUBSIDIARIES

(FORMERLY THE PAWS PET COMPANY)

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

Unaudited

For the Six Months Ended June 30, 2014

	Series D Preferred Stock					Series B Preferred Stock					Series C Preferred Stock					Series A Preferred Stock				Common Stock				Additional Paid-In			Accumulated			Treasury			Total Stockholders'
	Shares			Amount		Shares			Amount		Shares			Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Stock			Deficit
Balance December 31, 2013		174,184		$	-		-		$	-		-		$	-		-	$	-		-	$	-	$	35,624,371		$	(40,053,599	)	$	(200,000	)	$	(4,629,228	)
Shares retained in merger and net liabilities assumed		-			-		72,415			-		1,245			-		-		-		287,582,556		-		(2,185,778	)		-			-			(2,185,778	)
Repurchase and cancellation of stock		(7,549	)		-		-			-		-			-		-		-		-		-		(506,000	)		-			-			(506,000	)
Stock issued for services		132,111			-		-			-		-			-		-		-		196,167		-		8,899,808			-			-			8,899,808
Stock issued to cancel warrants		155,823			-		-			-		-			-		-		-		-		-		7,111,444			-			-			7,111,444
Stock issued to settle debt		2,599			-		-			-		-			-		-		-		7,175,661		-		524,726			-			-			524,726
Beneficial conversion feature		-			-		-			-		-			-		-		-		-		-		16,138			-			-			16,138
Series B Preferred stock conversions		-			-		(1,850	)		-		-			-		-		-		18,500,000		-		-			-			-			-
Series C Preferred stock conversions		-			-		-			-		(700	)		-		-		-		14,000,000		-		-			-			-			-
Stock options expense		-			-		-			-		-			-		-		-		-		-		759			-			-			759
Net loss		-			-		-			-		-			-		-		-		-		-		-			(12,793,324	)		-			(12,793,324	)
Balance June 30, 2014		457,168		$	-		70,565		$	-		545		$	-		-	$	-		327,454,384	$	-	$	49,485,468		$	(52,846,923	)	$	(200,000	)	$	(3,561,455	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-3

PRAXSYN CORPORATION AND SUBSIDIARIES

(FORMERLY THE PAWS PET COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

	Six Months Ended June 30,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(12,793,324	)	$	151,574
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		4,498			4,641
Loss on extinguishments of notes payable		100,000			-
Loss on disposal of fixed assets		5,184			-
Gain on settlements and extinguishment of accrued interest		(188,973	)		-
Loss on receivables sold to factor		14,208,849			851,136
Stock-based compensation		8,900,567			-
Warrant modification expense		7,111,444			-
Amortization of debt discount and beneficial conversion feature		115,060			61,203
Amortization of debt issuance costs		24,361			36,899
Deferred tax provision (benefit)		-			355,881
Change in operating assets and liabilities
Accounts receivable		(32,248,551	)		(3,525,053	)
Inventory		(64,942	)		9,201
Other current assets		(4,675	)		1,038
Accounts payable		53,448			35,767
Accrued liabilities		(67,486	)		103,663
Accrued interest		463,605			5,936
Accrued marketing		4,130,524			268,203
Settlement liability		(652,467	)		(8,000	)
Net cash used in operating activities		(10,902,878	)		(1,647,911	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(18,048	)		-
Cash acquired in connection with merger		485,012			-
Net cash provided by investing activities		466,964			-
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of accounts receivable to factor		10,929,884			1,288,551
Repayments of loans payable		(55,417	)		(14,882	)
Borrowings from related parties		246,767			-
Repayments to related parties		(204,264	)		49,102
Net cash provided by financing activities		10,916,970			1,322,771
Increase (decrease) in cash and cash equivalents		481,056			(325,140	)
Cash and cash equivalents, beginning of period		37,494			325,551
Cash and cash equivalents, end of period	$	518,550		$	411
Supplemental disclosures of cash flow information:
Cash paid for interest	$	172,964		$	449,426
Cash paid for income taxes	$	-		$	-
Non cash investing and financing activities:
Common stock issued in exchange for cancellation of note payable	$	524,726		$	-
Conversion of accrued interest into notes payable	$	20,833		$	-
Creation of obligations through settlements	$	500,000		$	-
Net liabilities assumed from reverse merger	$	2,185,778		$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-4

PRAXSYN CORPORATION AND SUBSIDIARIES

(FORMERLY THE PAWS PET COMPANY)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS

Organization and Nature of Business

Business

Praxsyn Corporation (the “Company”) is a health care company dedicated to providing medical practitioners with medications and services for their patients. Through our facility in Irvine, California, we currently formulate transdermal creams using therapeutic and preventative agents for pain management. These products are geared to patients suffering from long-term pain associated with work place related injuries. Our operations consist of the production and sale, by prescription, of our pain management products to California workers’ compensation insurance providers. The products are shipped directly to patients, and billings for these products are typically made to and collected from the insurance providers of the patients’ employers.

Merger

On December 31, 2013, we entered into a First Amended Securities Exchange Agreement (“SEA”) with Mesa Pharmacy, Inc. (“Mesa”), a wholly-owned subsidiary of Pharmacy Development Corp. (“PDC”), to acquire all of Mesa. On March 20, 2014, we replaced the SEA by entering into an Agreement and Plan of Merger Agreement (the “APMA”) with PDC whereby we agreed to acquire all the issued and outstanding shares of PDC in exchange for 500,000 shares of our Series D Preferred Stock. Each share of Series D preferred stock is convertible into 1,000 shares of our common stock. On January 23, 2014, the Company entered into an agreement with its primary marketing consultant, Trestles Pain Management Specialists, LLC (“TPS”), whereby the PDC shareholders have agreed to assign 166,664 (or 1/3) of the 500,000 shares of Praxsyn Series D preferred stock issued in connection with the merger to TPS. The shares are in exchange for future services with the Company on a performance basis. At June 30, 2014, 123,832 shares had been earned by, and issued to, TPS leaving 42,832 shares remaining to be issued. Additionally, in accordance with the APMA, certain of our convertible promissory notes were exchanged for new convertible promissory note, convertible into shares of Series D Preferred Stock at the rate of one (1) share of Series D Preferred Stock for each One Hundred Dollars ($100.00) of unpaid principal and interest. The APMA closed on March 31, 2014 (the “Acquisition Date”).

For accounting purposes, this transaction was treated as a reverse-acquisition in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations, since control of our Company passed to the PDC shareholders. We determined for accounting and reporting purposes that PDC is the acquirer because of the significant holdings and influence of its control group (which includes Mesa) before and after the acquisition. As a result of this transaction, the PDC control group owns 40% of our issued and outstanding common stock on a diluted basis. In addition, the Series D preferred shares are the only preferred shares with voting rights. With these voting rights, the PDC control group controlled approximately 63% of our common stock on a diluted basis after the acquisition. Additionally, the PDC control group, pre-acquisition, was significantly larger than Praxsyn in terms of assets and operations. Finally, the future operations of the PDC control group will be the Company’s primary operations and more indicative of the operations of the consolidated entity on a going forward basis.

Accordingly, the consolidated assets and liabilities of PDC are reported at historical costs and the historical consolidated results of operations of PDC will be reflected in this and future Praxsyn filings as a change in reporting entity. The assets and liabilities of Praxsyn are reported at their carrying value, which approximated their fair value, on the Acquisition Date and no goodwill was recorded. Praxsyn’s results of operations will be included from the Acquisition Date.

The following is a schedule of Praxsyn’s assets and liabilities at March 31, 2014:

	March 31, 2014
ASSETS:
Cash	$	485,012
Fixed assets		5,184
Total assets:		490,196
LIABILITIES:
Accounts payable		362,582
Accrued expenses		588,401
Accrued interest		96,362
Settlement liability		289,398
Convertible debentures		377,400
Liabilities of discontinued operations		961,831
Total liabilities		2,675,974
Net liabilities assumed	$	(2,185,778	)

F-5

The following unaudited pro forma information was prepared as if the acquisition had taken place at the beginning of the period for the six month periods ended June 30, 2014 and 2013:

	Pro-Forma Combined
	Six Months Ended June 30, 2014			Six Months Ended June 30, 2013
Revenue	$	32,462,272		$	3,638,285
Net loss from continuing operations		(21,281,838	)		(6,401,952	)
Net loss	$	(21,285,286	)	$	(6,437,875	)
Net loss per share, basic and diluted	$	(0.09	)	$	(0.07	)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Consolidation

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America. The condensed consolidated financial statements include the accounts of Pharmacy Development Corporation and Mesa Pharmacy, Inc., for the periods ended June 30, 2013, and 2014, and Praxsyn as of the Acquisition Date of March 31, 2014. All significant intercompany transactions have been eliminated in consolidation.

In connection with the six months ended June 30, 2014 and 2013, certain information and disclosures normally included in the annual financial statements prepared in accordance with the accounting principles generally accepted in the Unites States of America have been condensed or omitted pursuant to the rules and regulations of the United States Securities Exchange Commission. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these condensed consolidated financial statements have been included. Such adjustments consist of normal recurring adjustments. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2013 and 2012 filed on Form 8-K/A on July 16, 2014. The condensed consolidated results of operations for the six months ended June 30, 2014 and 2013 are not necessarily indicative of the results that may be expected for the full year.

F-6

On March 31, 2014, the PAWS Pet Company Inc. (the “Company”) closed the APMA with PDC whereby the Company acquired PDC through a forward triangular merger into the Company’s wholly owned subsidiary PDC, Inc. Since the PDC shareholders effectively control the Company and since PDC had existing business operations, the merger has been accounted for as a reverse recapitalization of PDC and a change in reporting entity whereby the historical consolidated financial statements of PDC are reported herein for the periods presented.

Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Since inception, management has funded operations primarily through proceeds received in connection with factoring of accounts receivable on a non-recourse basis from two primary factors, issuances of notes payable, and through sales of common stock. In addition, the Company is concentrated within the workers compensation market for which the collection of payments on receivables may be delayed for a significant period depending on various factors. Additionally, the Company is dependent upon a few third party referral services, one of them being a related party, in which generate almost 100% of the Company’s revenues. During the six months ended June 30, 2014 and 2013, the Company incurred a net loss of $12,793,324, and generated net income of $151,574, respectively. The net loss during the period ended June 30, 2014 included stock-based compensation of $8,900,567. The Company also has an accumulated deficit of $52,846,923 as of June 30, 2014. Management believes that it will need additional accounts receivable factoring, or debt and/or equity financing to be able to implement their business plan. Given the indicators described above, in addition to the capital deficiency and negative working capital, there is substantial doubt about the Company’s ability to continue as a going concern.

Management is attempting to find additional financing sources to replace or supplement the current factoring of accounts receivable to sustain operations until it can achieve profitability. Management believes that the replacement of the factoring of accounts receivable with more conventional financing will lead the Company to achieve profitability much sooner and with substantial results. The successful outcome of future activities cannot be determined at this time, and there are no assurances that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results.

The accompanying condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Use of Estimates

Financial statements prepared in accordance with accounting principles generally accepted in the United States require 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 revenues and expenses during the reporting period. The most significant estimates made by management are revenue recognition and the related allowance for doubtful accounts and contractual receivables, the allocation of accounts receivable between current and long-term, the value of stock-based compensation awards, the amount of potential legal settlements and contingencies, the fair market value of assets and liabilities of Praxsyn and the realization of deferred tax assets. Actual results could differ from those estimates. Management performs a periodic retrospective review of estimates and modifies assumptions as deemed appropriate.

Revenue Recognition

The Company sells compounding pharmaceutical products directly through its pharmacy. Revenues from compounding pharmaceutical products sold by its pharmacy are recorded using the net method, as required under ASC 954-605-25, Health Care Entities––Revenue Recognition. Compounding prescription revenue is recorded at established billing rates less estimated contractual adjustments with each respective insurance carrier. Net revenues include the amount the insurance company and the California Workers Compensation Fund are expected to pay directly to the Company.

F-7

The Company recognizes revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the sales price is fixed or determinable, and collection is probable. The Company’s pharmacy revenues are recognized when both the services are performed, which include compounding prescriptions and shipment to the customer.

Net revenues consisted of the following for the six months ended June 30, 2014 and 2013:

	Three Months Ended						Six Months Ended
	June 30, 2014			June 30, 2013			June 30, 2014			June 30, 2013
Gross billing revenue	$	49,353,084		$	1,077,141		$	69,852,030		$	7,342,812
Less: estimated contractual and other adjustments		(26,110,375	)		(578,429	)		(37,389,758	)		(3,704,527	)
Net billing revenue	$	23,242,709		$	498,712		$	32,462,272		$	3,638,285

Accounts Receivable

Accounts receivable represent amounts due from insurance companies, through various networks, for pharmaceutical compounds delivered to patients. The Company records an allowance for doubtful accounts and contractual reimbursements based on analyses of historical collections over the expected period until such cases are closed or settled. Management also assesses specific identifiable accounts considered at risk or uncollectible. The allowance for doubtful accounts and contractual reimbursements amounted to $14,627,928 and $6,265,951 as of June 30, 2014 and December 31, 2013, respectively.

Due to the nature of the industry and the reimbursement environment in which the Company operates, certain estimates are required in order to record net revenues and accounts receivable at their net realizable values. Inherent in these estimates is the risk that they may have to be revised or updated as additional information becomes available. It is possible that management’s estimates could change, which could have an impact on operations and cash flows. Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain payers may result in adjustments to amounts originally recorded.

The Company has factored receivables to multiple agents. The receivables have been sold to factors at rates ranging from 20% to 35% of the gross billings. These receivables have been determined to have a net realizable value of approximately 46% of the gross billings for the periods ended June 30, 2014 and 2013. The difference between the estimated net realizable value of receivables and the factored amounts has been classified as financing costs under interest expense at the time of sale to the factor.

During the six months ended June 30, 2014, the Company factored $10.1 million of 2013 accounts receivable for 20% and $44.5 million of 2014 prescription sales to a factor for 20% of the gross amount resulting in net proceeds of $10.9 million. In connection with these sales, the Company recorded financing costs of $14.2 million during the six months ended June 30, 2014 within interest expense on the accompanying condensed consolidated statement of operations.

During the six months ended June 30, 2013, the Company factored $4.7 million of accounts receivable for 25-30% of the gross amount resulting in net proceeds of approximately $1.3 million. In connection with these sales, the Company recorded financing costs of approximately $851,000 during the six months ended June 30, 2013 within interest expense on the accompanying condensed consolidated statement of operations.

Shipping and Handling

Shipping and handling costs incurred are included in general and administrative expenses. The amount of revenue received for shipping and handling is less than 0.5% of revenues for all periods presented.

F-8

Cash

The Company considers all highly liquid, income bearing investments purchased with original maturities of six months or less to be cash equivalents.

Inventory

Inventories are stated at the lower of cost (first-in, first-out method) or market. The Company’s inventories consist of pharmaceutical ingredients used within our compounding products. The Company’s inventory for all periods presented is substantially comprised and classified as raw materials.

Property and Equipment, Net

Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives. Leasehold improvements are amortized on a straight-line basis over the lesser of the useful lives or the remaining term of the lease. For tax purposes, accelerated tax methods are used. The Company expenses all purchases of equipment with individual costs of under $1,000. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized.

Debt Issuance Costs

The Company capitalizes direct costs related to the issuance of debt, including finder’s fees, underwriting and legal costs. The debt issuance costs are recorded as an asset and amortized as interest expense over the term of the related debt using the straight-line method, which approximated the effective interest method. Upon the extinguishment of the related debt, any unamortized debt issuance costs are expensed as interest expense.

As of June 30, 2014 and December 31, 2013, the Company had unamortized debt issuance costs of $0 and $24,361 respectively.

Impairment of Long-Lived Assets

The Company tests for impairment of its long-lived assets in accordance with Accounting Standards Codification (“ASC”) 360-10-35, Impairment or Disposal of Long-Lived Assets. Under that directive, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Such group is tested for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount.

Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.

Convertible Debt and Warrants Issued with Convertible Debt

Convertible debt is accounted for under the guidelines established by ASC 470, Debt with Conversion and Other Options and ASC 740, Beneficial Conversion Features. The Company records a beneficial conversion feature (“BCF”) when convertible debt is issued with conversion features at fixed or adjustable rates that are below market value when issued. If, however, the conversion feature is dependent upon a condition being met or the occurrence of a specific event, the BCF will be recorded when the related contingency is met or occurs. The BCF for the convertible instrument is recorded as a reduction, or discount, to the carrying amount of the convertible instrument equal to the fair value of the conversion feature. The discount is then amortized to interest over the life of the underlying debt using the effective interest method.

F-9

The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718, Compensation – Stock Compensation, except that the contractual life of the warrant is used. Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value is recorded as a debt discount or premium and is amortized over the expected term of the convertible debt to interest expense. For a conversion price change of a convertible debt issue, the additional intrinsic value of the debt conversion feature, calculated as the number of additional shares issuable due to a conversion price change multiplied by the previous conversion price, is recorded as additional debt discount and amortized over the remaining life of the debt.

The Company accounts for modifications of its BCF’s in accordance with ASC 470, Modifications and Exchanges. ASC 470 requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment.

Fair Value of Financial Instruments

The Company utilizes ASC 820-10, Fair Value Measurement, for valuing financial assets and liabilities measured on a recurring basis. ASC 820-10 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurements. This standard applies in situations where other accounting pronouncements either permit or require fair value measurements.

ASC 820-10 requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. ASC 820-10 defines the fair value of a financial instrument as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As of June 30, 2014 and December 31, 2013, the carrying value of certain financial instruments such as accounts receivable, accounts payable and accrued expenses approximates fair value due to the short-term nature of such instruments. The notes payable and convertible notes payable also approximate fair value as the interest rate under these notes approximates the Company’s current borrowing rate.

ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes six levels of inputs that may be used to measure fair value:

Level 1:	Quoted prices in active markets for identical or similar assets and liabilities.
Level 2:	Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets and liabilities.
Level 3:	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

As of June 30, 2014 and December 31, 2013, the Company did not have any level 2 or 3 financial instruments.

Stock-Based Compensation

The Company accounts for its stock-based compensation in accordance ASC 718-20, Stock-based Compensation. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite vesting period.

The Company issues warrants exercisable into the Company’s common stock and preferred stock as compensation to debt holders. The fair value of each warrant is estimated on the date of grant using the Black-Scholes pricing model. Assumptions are determined at the time of grant. No warrants were granted during the six months ended June 30, 2014 and 2013.

F-10

The assumptions used in the Black Scholes models referred to above are based upon the following data: (1) The expected life of the warrant is estimated by considering the contractual term of the warrant. (2) The expected stock price volatility of the underlying shares over the expected term of the warrant is based upon historical share price data of an index of comparable publicly-traded companies. (3) The risk free interest rate is based on published U.S. Treasury Department interest rates for the expected terms of the underlying warrants. (4) Expected dividends are based on historical dividend data and expected future dividend activity. (5) The expected forfeiture rate is based on historical forfeiture activity and assumptions regarding future forfeitures based on the composition of current grantees.

Advertising Costs

The Company expenses advertising costs as incurred. For the six months ended June 30, 2014 and 2013, the Company incurred advertising costs of $0 and $80, respectively.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes. The Company recognizes deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at currently effective tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the condensed consolidated financial statements. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. The Company classifies interest and penalties as a component of interest and other expenses. To date, there have been no interest or penalties assessed or paid.

The Company measures and records uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized.

As of the date of this report the Company is current in their income tax filings.

Concentrations, Uncertainties and Other Risks

Cash and cash equivalents - Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits of $250,000 per institution that pays Federal Deposit Insurance Corporation (FDIC) insurance premiums. The Company has never experienced any losses related to these balances.

Revenues and accounts receivable - Financial instruments that potentially subject the Company to credit risk principally consist of receivables. Insurance companies account for a substantial portion of the receivables. This risk is limited due to the ability to factor and the number of insurance companies comprising the Company’s customer base and their geographic dispersion. For the six months ended June 30, 2014 and 2013, no single customer represented more than 10% of revenues or accounts receivable, net.

The majority of the Company’s accounts receivable arise from product sales and are primarily due from government agencies and managed health care providers. The Company monitors the financial performance and creditworthiness of its customers so that it can properly assess and respond to changes in their credit profile. Conditions in the normal course of business, including inherent variability of timing of cash receipts, have resulted in, and may continue to result in, an increase in the average length of time that it takes to collect accounts receivable outstanding. For accounts receivable that are held and not factored, the Company does not expect to have write-offs or adjustments to accounts receivable which could have a material adverse effect on its consolidated financial position, results of operations or cash flows as the portion which is deemed uncollectible is already taken into account when the revenue is recognized.

F-11

During the six months ended June 30, 2014 and 2013, revenues generated from sales of compounding pharmaceutical products primarily to worker’s compensation patients represented 100% of total revenues. The Company revenues are generated from sales of compounding pharmaceutical products primarily to worker’s compensation patients, located primarily throughout Southern California. At times the collection on these receivables can take in excess of one year, during which the Company, at times, attends legal hearings, files liens to securitize claims, negotiates before worker’s compensation administrative judges, resolves liens with stipulations and orders for defendants to pay, and transmits demands to settle liens filed with the adjuster or defense attorneys.

During the six months ended June 30, 2014 and 2013, two consultants made up substantially 100% of the Company’s selling and marketing expense, one of which is a related party. Management believes the loss of these consultants to this organization would have a material impact on the Company’s consolidated financial position, results of operations, and cash flows. For the six months ended June 30, 2014 and 2013, the consultants earned $20,077,336 and $759,456, respectively. Of the 2014 amounts, $8,779,250 consisted of stock-based compensation. The amounts payable at June 30, 2014 and December 31, 2013 were $5,542,017 and $1,411,493, respectively. The terms of each contract entitled the consultant to receive an amount ranging from 13% to 17.5% of the gross prescription sales generated. The Company estimates that these two consultants generated almost 100% of the revenue for each period presented. In addition, on March 31, 2014, we added one of these consultants to the Company’s Board of Directors.

The pharmaceutical industry is highly competitive and regulated, and our future revenue growth and profitability is dependent on our timely product development, ability to retain proprietary formulas, and continued compliance. The compounding, processing, formulation, packaging, labeling, testing, storing, distributing, advertising and sale of the Company’s products are subject to regulation by one or more U.S. and California agencies, including the Board of Pharmacy, the Food and Drug Administration, the Federal Trade Commission, and the Drug Enforcement Administration as well as several other state and local agencies in localities in which the Company’s products are sold. In addition, the Company compounds and markets certain of its products in accordance with standards set by organizations, such as the United States Pharmacopeia Convention, Inc. The Company believes that its policies, operations and products comply in all material respects with existing regulations. The healthcare reform and a reduction in the coverage and reimbursement levels by insurance companies and government agencies and/or a change in the regulations or compliance with related agencies and/or a disruption in the Company’s ability to maintain its competitiveness may have a material impact on the Company’s consolidated financial position, results of operations, and cash flows.

Vendors - As of June 30, 2014 and December 31, 2013, two suppliers made up substantially 100% of the Company’s direct materials. Management believes the loss of either supplier to this organization would have a material impact on the Company’s consolidated financial position, results of operations, and cash flows. If the Company’s relationship with one of its vendors was disrupted, the Company could have temporary difficulty filling prescriptions for worker’s compensation related drugs until a replacement wholesaler agreement was executed, which would negatively impact the business. For the six months ended June 30, 2014 and 2013, expenses incurred for pharmaceutical compounding materials obtained from vendors were $952,813, and $137,619, respectively. The amounts payable at June 30, 2014 and December 31, 2013 for such costs were approximately $74,000 and $59,000, respectively.

Recent Accounting Pronouncements

There are no recently issued accounting pronouncements or standards updates that the Company has yet to adopt that are expected to have a material effect on its financial position, results of operations, or cash flows.

F-12

3. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following as of June 30, 2014 and December 31, 2013:

	June 30, 2014			December 31, 2013
Leasehold improvements	$	24,749		$	24,749
Machinery and equipment		27,229			22,629
Furniture and fixtures		3,997			3,997
Computer equipment		26,854			13,406
		82,829			64,781
Less: accumulated depreciation		(41,497	)		(36,999	)
	$	41,332		$	27,782

Depreciation expense for the six months ended June 30, 2014 and 2013 amounted to $4,498 and $4,641, respectively.

Depreciation is provided over the estimated useful lives of the assets, principally using the straight-line method. The estimated useful lives are the lesser of the life of the assets, or the lease for leasehold improvements, and primarily range from six (3) to seven (7) years for machinery and equipment, furniture and fixtures, and computer equipment.

4. NOTES AND DEBENTURES PAYABLE

The Company’s outstanding notes payable consisted of the following:

	June 30, 2014				December 31, 2013
	Principal		Accrued Interest		Principal			Accrued Interest
Non-related parties:
2007 - 2009 Convertible Notes	$	397,000	$	97,254	$	497,000		$	78,083
2010 Profit Sharing Notes		175,000		262,173		675,000			383,163
2010 and 2011 Secured Bridge Notes		449,275		79,403		449,275			72,901
2012 Convertible Promissory Notes		3,175,125		682,553		3,299,875			410,174
Unsecured Promissory Notes		782,782		36,466		817,366			5,793
Convertible Debentures		325,000		101,093		-			-
Less: Discounts on Notes Payable		-				(98,922	)
Subtotal non-related parties		5,304,182		1,258,942		5,639,594			950,114
Related parties:
2007 - 2009 Convertible Notes		152,500		75,956		152,500			43,300
2012 Convertible Promissory Notes		150,000		8,588		150,000			18,000
Unsecured Promissory Notes		146,667		3,019		-			-
Convertible Notes		52,400		2,486		-			-
Note Payable Due to Officer		-		-		104,164			-
Subtotal related parties		501,567		90,049		406,664			61,300
Total		5,805,749		1,348,991		6,046,258			1,011,414
Current Portion		5,805,749		1,348,991		6,046,258			1,011,414
Long-term Portion	$	-	$	-	$	-		$	-

F-13

Discounts

During the six months ended June 30, 2014 and 2013, the Company amortized $98,922 and $61,203, respectively, of the discount to interest expense. As of June 30, 2014 and December 31, 2013, unamortized discounts were $0 and $98,922, respectively.

Debt Issuance Costs

In connection with various notes payable discussed below, the Company paid issuance costs to third parties in connection with the notes payable. As of June 30, 2014 and December 31, 2013, the Company had unamortized debt issuance costs of $0 and $24,361, respectively.

2007 - 2009 Convertible Notes

The 2007 – 2009 Convertible Notes were initially issued in 2007 to 2009 to a series of individuals, including a related party who is a relative of the founder of the PDC control group. These notes are unsecured. The non-related notes in this category bear interest rates ranging from 18% to 33% per annum and the related party notes bear interest rates ranging from 18% to 48% per annum. All notes in this category, which were originally written on PDC, contained a provision allowing for conversion into common stock only if PDC became a public entity. This conversion provision allowed for the conversion of all unpaid principal and accrued interest at the rate of the average closing price of the common stock for the 10 days prior to conversion.

Upon finalization of the merger on March 31, 2014, as discussed in Note 1, the remaining notes were rewritten and the conversion feature modified to allow for conversion into one share one (1) share of Series D Preferred Stock for each One Hundred Dollars ($100) of unpaid principal and interest. The modification of the conversion feature created a beneficial conversion feature (“BCF”) and, as of the date of measure of March 31, 2014, the BCF in the amount of $16,138 was recorded to interest expense. Also on March 31, 2004, we entered into a Note Conversion Agreement with a shareholder and holder of one of the 2007 – 2009 Convertible Notes with a principal amount of $100,000. Under the conversion agreement, the principal was converted into 1,505 shares of Series D Preferred Stock and we issued a new Unsecured Promissory Note for the remaining balance of accrued and unpaid interest totaling $20,833 which was paid down to $10,417 as of June 30, 2014. See Unsecured Promissory Notes section below. As a result of this transaction, we recorded a loss on extinguishment of debt of $100,000 during the six months ended June 30, 2014.

At both June 30, 2014 and December 31, 2013, these 2007 – 2009 Convertible Notes are past-due and are reflected as current liabilities at each balance sheet date. There have been no demands for repayment or claims of default, and no conversions have taken place to date.

2010 Profit Sharing Notes

The Profit Sharing Notes were initially issued in 2010, have a term of four (4) years, and pay interest monthly on the gross receipts from workers compensation sales at rates ranging from 0.1% to 5%. These notes are collateralized by all receivables generated by sales of prescriptions.

On March 10, 2014, as amended on May 1, 2014, we finalized a settlement agreement with All American T.V., Inc. /John Casoria (“AATV”), a shareholder and a holder of one of the 2010 Profit Sharing Notes under which we, among other things, agreed to repay the note and accrued interest for a total payment of $600,000. Based on the finalized settlement agreement, we have reclassified this note to Settlement Liabilities in 2014 (see Note 7). In connection with the settlement agreement, we recorded a gain on extinguishment of debt during the three and six months ended June 30, 2014 in the amount of $180,973.

At both June 30, 2014 and December 31, 2013, these 2010 Profit Sharing Notes are past-due and are reflected as current liabilities at each balance sheet date. There have been no demands for repayment or claims of default, and no conversions have taken place to date.

F-14

2011 and 2010 Secured Bridge Notes

These Secured Bridge Notes were initially issued in 2010 and 2011, accrue a one-time flat-rate interest of 15%, and were to be repaid at the time of a major funding from a specified funding source. The notes are collateralized by all receivables generated by sales of prescriptions. At both June 30, 2014 and December 31, 2013, these 2010 and 2011 Secured Bridge Notes are reflected as current liabilities at each balance sheet date since funding from the funding source was never obtained.

2012 Convertible Promissory Notes

These Convertible Promissory Notes were issued during the second half of 2012, and have a term of four (4) years. One of these notes was issued to a related party, a relative of the founder of the PDC control group. All of these notes bear interest at 18% per annum. Each note may be converted, at the option of the note holder, at any time after the second anniversary of the note into an amount of our common shares calculated by dividing the amount to be converted by 95% of the average daily volume weighted average price during the five days immediately prior to the date of conversion, defined as the 5-day weighted average of the closing price of our common stock. As the conversion price of the Convertible Promissory Notes is not known and the notes cannot be converted for a period of two years from the date of issuance, the beneficial conversion feature, if any, will be calculated upon the contingencies being met.

On March 31, 2014, we entered into a Note Conversion Agreement with the holder of a 2012 Convertible Promissory Note in the principal amount of $124,750, whereby the 2012 Convertible Promissory Note and accrued and unpaid interest of $20,584 was exchanged for 1,094 shares of Series D Preferred Stock.

At both June 30, 2014 and December 31, 2013, we were in default of the interest payments required under the 2012 Convertible Promissory notes. Therefore these notes are reflected as current liabilities at each balance sheet date.

Unsecured Promissory Notes

On November 18, 2013, we issued an Unsecured Promissory Note with a principal amount of $772,365. This note, which was issued in exchange for previous notes payable and accrued interest, has a term of five (5) years, bears interest at 18% per annum, and requires monthly payments of $19,613. At both June 30, 2014 and December 31, 2013, we were in default of the monthly payment requirement and have therefore reflected this note as a current liability at each balance sheet date.

Effective December 31, 2014, we issued an Unsecured Promissory Note for $45,000. This note had a term of six months, had no stated interest rate, and was repayable in monthly payments of $7,500. As of June 30, 2014, this note has been repaid.

On February 20, 2014, we issued an Unsecured Promissory Note for $96,667 to a company whose managing member is a shareholder. This note had a stated interest rate of 0.5% per month (6% per annum), and a repayment period of thirty (30) days. We issued a similar Unsecured Promissory Note for $50,000 to the same company on March 11, 2014. The second note contained the same interest rate as the first and was also payable in thirty (30) days. The notes are currently past due.

On March 31, 2014, the Company issued an unsecured promissory note to a shareholder of Praxsyn for $20,833 for accrued and unpaid interest on an unpaid February 20, 2009 convertible Note Agreement of $100,000. On March 31, 2014, both parties above entered into a Note Conversion Agreement whereby 1,505 Series D shares were exchanged for the $100,000 combined promissory notes. As of June 30, 2014, the Company has paid $10,417 against the unsecured note and with the remaining $10,417 to be paid by September 30, 2014.

Convertible Debentures

The Convertible Debentures were assumed March 31, 2014 as a result of the Merger discussed in Note 1. The convertible debentures, which bear interest at 8% per annum, were due in August 2013 and are therefore past due. They are convertible into shares of our common stock at the rate of $0.50 per share. There was no activity with respect to these convertible debentures during the three months ended June 30, 2014.

F-15

Convertible Note (Related Party)

On March 5, 2014, we issued a convertible note in the amount of $42,500 to a shareholder. The convertible note, which has a stated interest rate of 6% per annum, was to be repaid in April 2014 and is therefore past due. The note is convertible at the option of the note holder into 260 shares of Series B Preferred Stock. As of June 30, 2014, the total principal amount outstanding for this note was $52,400.

Note Payable Due to Officer

These unsecured notes resulted from advances made in 2013 and 2014, primarily by our Pharmacist in Charge. All amounts, which were due with no stated interest, have been repaid by June 30, 2014.

5. STOCKHOLDERS’ DEFICIT

Common Stock

The Company is authorized to issue 1,400,000,000 shares of no par value common stock. There were 327,454,384  and zero shares of common stock outstanding as of June 30, 2014 and December 31, 2013, respectively. The holders of common stock are entitled to one vote per share on all matters submitted to a vote of stockholders and are not entitled to cumulate their votes in the election of directors. The holders of common stock are entitled to any dividends that may be declared by the Board of Directors out of funds legally available therefore subject to the prior rights of holders of any outstanding shares of preferred stock and any contractual restrictions against the payment of dividends on common stock. In the event of liquidation or dissolution of the Company, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any outstanding shares of preferred stock. Holders of common stock have no preemptive or other subscription rights and no right to convert their common stock into any other securities.

On April 29, 2014, the Company issued to a vendor, for services rendered, 196,167 common shares in lieu of payment of $20,588. The number of shares issued was based on the value of the services and the closing stock price on the day of issuance.

Series D Preferred Stock

On December 30, 2013, the Company filed an amended and restated Certificate of Designations of Preferences, Rights and Limitations of Series D Preferred Stock (the “Certificate of Designations D”) with the Secretary of State of the State of Illinois that designated 500,000 such shares as Series D Preferred Stock (the “Series D Stock”). A summary of the Certificate of Designations is set forth below:

Ranking The Series D Stock ranks, with respect to rights upon liquidation, winding-up or dissolution, (i) senior to the Common Stock, (ii) equal to the Series B Convertible Preferred Stock, (iii) senior to any and all other classes or series of preferred stock of the Company whether authorized now, or at any time in the future, unless any such subordination to any other class or series of Preferred Stock, is expressly agreed to, pursuant to an affirmative vote or written consent of holders of at least sixty-seven percent (67%) of the Series D Stock issued and outstanding at the time of any such vote or written consent. and (iv) junior to any and all existing and future indebtedness of the Company.

Right of Conversion Any holder of Series D Stock shall have the right to convert any or all of the holder’s Series D Stock into a number of fully paid and non-assessable shares of common stock for each share of Series D Stock so converted. The number of shares of common stock to be issued shall be 1,000 common shares for each Series D Stock share converted. In no event, shall a holder of any Series D Stock be allowed to convert such shares of Series D Stock into common stock which, upon giving effect to such conversion, would cause the aggregate number of shares of common stock beneficially owned by the holder, and/or its affiliates, to exceed four and nine tenths percent (4.9%) of the currently issued and outstanding shares of the Corporation.

Dividends Series D Stock shall not be entitled to dividends.

F-16

Liquidation In the event of any liquidation, dissolution or winding-up of the affairs of the Corporation (collectively, a “Liquidation”), the sole participation to which the holders of shares of Series D Stock then issued and outstanding (the “Series D Stockholders”) shall be entitled, out of the assets of the Corporation legally available for distribution to its stockholders, whether from capital, surplus or earnings, to receive, before any payment shall be made to the holders of the common stock or any other class or series of preferred stock ranking on Liquidation junior to such Series D Stock, an amount per share equal to $40 (forty dollars). If upon any such Liquidation, the remaining assets of the Corporation available for distribution to its shareholders shall be insufficient to pay the Holders of shares of Series D Stock the full amount to which they shall be entitled, the Holders of shares of Series D Stock, and of any class or series of stock ranking upon liquidation on a parity with the Series D Stock, shall share pari passu in any distribution of the remaining assets and funds of the Corporation in proportion to the respective liquidation amounts that would otherwise be payable to the holders of preferred stock with respect to the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. Liquidation preference at June 30, 2014 and December 31, 2013 is $20,000,000 and $0, respectively.

On January 23, 2014, the Company entered into an agreement with its primary marketing consultant, Trestles Pain Management Specialists, LLC (“TPS”), whereby Praxsyn has agreed to issue 166,664 (or 1/3) of the 500,000 shares of Praxsyn Series D preferred stock issued in connection with the merger that occurred on March 31, 2014. The shares are in exchange for future services with the Company on a performance basis. Per the agreement, 41,666 shares were issued upon execution of the agreement on January 23, 2014. The remaining shares will be issued based on referred prescriptions, at a rate of 1,000 Series D shares per $1 million in net billable revenues, beginning in February 2014. Shares due for the period of February through June 2014 were to be issued on June 30, 2014. Thereafter, the remaining net shares due will be issued on a monthly basis at the same rate of 1,000 Series D shares for each $1 million net referred prescription revenues. As of June 30, 2014, the Company has recorded $7,779,250 in additional marketing expense in conjunction with the 123,832 Series D shares earned on $69,773,034 of qualified billable gross revenues. The number of shares to shares to be issued was calculated on a monthly basis by dividing an amount equal to the revenue generated from qualified referrals within that month by 1 million. The shares to be issued were then valued by multiplication by a factor equal to the average stock price at closing for each trading day within that month. As additional compensation, the Company also pays TPS 17.5% of the gross amount of qualified prescriptions billed and shipped by the Company. Effective for the month of June 2014, and going forward, TPS has agreed to a lowered referral fee rate of 13% for any qualified prescriptions billed and shipped by the Company that are subsequently factored at 20% of gross value or lower.

On March 10, 2014, as amended on May 1, 2014, the Company entered into an agreement with a third party note and common stock holder to repurchase 7,504 Series D shares for approximately $66.63 per share totaling $500,000, the shareholders’ initial purchase price. See also Note 7 for further information.

On March 31, 2014, the Company entered into a Note Conversion Agreement whereby 1,094 Series D shares were exchanged for the $145,334 combined promissory notes authorized from the July 1, 2012 Note Agreement and Subscription Agreement and related accrued interest.

As of June 30, 2014, 500,000 shares of Series D Stock were issued, with 457,168 outstanding. There were 42,832 shares of Series D that have been committed but not yet earned by TPS. See above and Note 1 for additional information.

Series B Preferred Stock

On March 15, 2013, the Company filed an amended and restated Certificate of Designations of Preferences, Rights and Limitations of Series B Preferred Stock (the “Certificate of Designations B”) with the Secretary of State of the State of Illinois that designated 80,000 such shares as Series B Preferred Stock (the “Series B Stock”). A summary of the Certificate of Designations is set forth below:

Ranking The Series B Stock ranks, with respect to rights upon liquidation, winding-up or dissolution, (i) senior to the common stock, Series A and C Preferred Stock, and any other classes of stock or series of preferred stock of the Company whether authorized now, or at any time in the future, unless any such subordination to any other class or series of Preferred Stock, is expressly agreed to, pursuant to an affirmative vote or written consent of holders of at least sixty-seven percent (67%) of the Series B Stock issued and outstanding at the time of any such vote or written consent. and (ii) junior to any and all existing and future indebtedness of the Company.

F-17

Right of Conversion Any holder of Series B Stock shall have the right to convert any or all of the holder’s Series B Stock into a number of fully paid and non-assessable shares of common Stock for each share of Series B Stock so converted. The number of shares of common stock to be issued shall be the number that is equal to 0.001% of the number of shares of the common stock that would be issued and outstanding after the hypothetical conversion and issuance of all of the outstanding shares of any and all classes of convertible stock and/or any and all other convertible debt instruments, options and/or warrants outstanding at the time of conversion (the “Conversion Ratio”). In no event shall the Conversion Ratio be less than four thousand, three hundred (4,300) shares of common stock and in no event shall the Conversion Ratio be more than ten thousand (10,000) shares of Common Stock.

Dividends Series B Stock shall not be entitled to dividends.

Liquidation In the event of any liquidation, dissolution or winding-up of the affairs of the Corporation (collectively, a “Liquidation”), the sole participation to which the holders of shares of Series B Stock then issued and outstanding (the “Series B Stockholders”) shall be entitled, out of the assets of the Corporation legally available for distribution to its stockholders, whether from capital, surplus or earnings, to receive, before any payment shall be made to the holders of the common stock or any other class or series of preferred stock ranking on Liquidation junior to such Series B Stock, an amount per share equal to $30 (thirty dollars). If upon any such Liquidation, the remaining assets of the Corporation available for distribution to its shareholders shall be insufficient to pay the Holders of shares of Series B Stock the full amount to which they shall be entitled, the holders of shares of Series B Stock, and of any class or series of stock ranking upon liquidation on a parity with the Series B Stock, shall share pari passu in any distribution of the remaining assets and funds of the Corporation in proportion to the respective liquidation amounts that would otherwise be payable to the holders of preferred stock with respect to the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

For the six months ended June 30, 2014, shareholders elected to convert 1,850 Series B preferred shares into 18,500,000 common shares. As of June 30, 2014, 70,565 shares of Series B Stock were outstanding.

Series C Preferred Stock

On May 15, 2013, the Company filed a Certificate of Designations of Preferences, Rights and Limitations of Series C Preferred Stock (the “Certificate of Designations C”) with the Secretary of State of the State of Illinois that designated 50,000 such shares as Series C Preferred Stock (the “Series C Stock”). A summary of the Certificate of Designations is set forth below:

Ranking The Series C Stock ranks, with respect to rights upon liquidation, winding-up or dissolution, (i) senior to the common stock, Series A Preferred Stock, and any other classes of stock or series of preferred stock of the Company whether authorized now, or at any time in the future, unless any such subordination to any other class or series of Preferred Stock, is expressly agreed to, pursuant to an affirmative vote or written consent of holders of at least sixty-seven percent (67%) of the Series C Stock issued and outstanding at the time of any such vote or written consent. and (ii) junior to Series C Preferred Stock, and any and all existing and future indebtedness of the Company.

Right of Conversion Any holder of Series C Stock shall have the right to convert any or all of the holder’s Series C Stock into a number of fully paid and non-assessable shares of common stock for each share of Series C Stock so converted. The number of shares of common stock shares that is equal to ninety percent (66%) of the lowest closing price of the common stock, as quoted on any exchange or market upon which the common stock is traded over the sixty (60) calendar days preceding the date the Corporation and the holder enter into an agreement to issue for shares of Series C Stock, for each share of Class C Stock being converted, provided, however, such ratio shall not be less than $0.005 nor more than $.01.

Dividends Series C Stock shall not be entitled to dividends.

F-18

Liquidation In the event of any liquidation, dissolution or winding-up of the affairs of the Corporation (collectively, a “Liquidation”), the sole participation to which the holders of shares of Series C Stock then issued and outstanding (the “Series C Stockholders”) shall be entitled, out of the assets of the Corporation legally available for distribution to its stockholders, whether from capital, surplus or earnings, to receive, before any payment shall be made to the holders of the common stock or any other class or series of preferred stock ranking on Liquidation junior to such Series C Stock, an amount per share equal to $100 (one hundred). If upon any such Liquidation, the remaining assets of the Corporation available for distribution to its shareholders shall be insufficient to pay the holders of shares of Series C Stock the full amount to which they shall be entitled, the holders of shares of Series C Stock, and of any class or series of stock ranking upon liquidation on a parity with the Series C Stock, shall share pari passu in any distribution of the remaining assets and funds of the Corporation in proportion to the respective liquidation amounts that would otherwise be payable to the holders of preferred stock with respect to the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

For the six months ended June 30, 2014, shareholders elected to convert 700 Series C preferred shares into 14,000,000 common shares. As of June 30, 2014, 545 shares of Series C Stock were outstanding.

Series A Preferred Stock

On May 27, 2011, the Company filed an amended and restated Certificate of Designations of Preferences, Rights and Limitations of Series A Preferred Stock (the “Certificate of Designations”) with the Secretary of State of the State of Illinois that designated 500 such shares as Series A Preferred Stock (the “Preferred Stock”). A summary of the Certificate of Designations is set forth below:

Ranking The Preferred Stock ranks, with respect to rights upon liquidation, winding-up or dissolution, (i) senior to the common stock and (ii) junior to Series B and C Stock and any other series of preferred stock, and any and all existing and future indebtedness of the Company.

No right of Conversion Series A Stock is not convertible into common stock.

Dividends and Other Distributions Commencing on the date of issuance of any such shares of Preferred Stock, holders of Preferred Stock shall be entitled to receive dividends on each outstanding share of Preferred Stock, which shall accrue at a rate equal to 10% per annum from the date of issuance. Accrued dividends shall be payable upon redemption of the Preferred Stock. So long as any shares of Preferred Stock are outstanding, no dividends or other distributions may be paid, declared or set apart with respect to any junior securities other than dividends or other distributions payable on the common stock solely in the form of additional shares of common stock. After payment of dividends at the annual rates set forth above, any additional dividends declared shall be distributed ratably among all holders of Preferred Stock and common stock in proportion to the number of shares of common stock that would be held by each such holder of Preferred Stock as if the Preferred Stock were converted into common stock by taking the Series A Liquidation Value (as defined below) divided by the market price of one share of common stock on the date of distribution.

Liquidation Upon any liquidation, dissolution or winding up of the Company after payment or provision for payment of debts and other liabilities of the Company and any liquidation preferences to the senior securities. Series B and C Preferred Stock has liquidation preference to the Series A Preferred Stock. Before any distribution or payment is made to the holders of any junior securities, the holders of Preferred Stock shall first be entitled to be paid out of the assets of the Company available for distribution to its stockholders an amount with respect to the Series A Liquidation Value, after which any remaining assets of the Company shall be distributed ratably among the holders of the Preferred Stock and the holders of junior securities, as if the Preferred Stock were converted into Common Stock by taking the Series A Liquidation Value divided by the market price of one share of Common Stock on the date of distribution.

Redemption The Company may redeem, for cash or by an offset against any outstanding note payable from Socius to the Company that was issued by Socius CG II, Ltd. (“Socius”), any or all of the Preferred Stock at any time at a redemption price per share equal to $10,000 per share of Preferred Stock, plus any accrued but unpaid dividends with respect to such share of Preferred Stock (the “Series A Liquidation Value”).

F-19

On June 2, 2011, the Company’s Board of Directors designated 1,200,000 shares as Series A Preferred Stock. As of June 30, 2014, no shares of Preferred Stock were outstanding.

Warrants

On March 17, 2014, all of the PDC and its wholly-owned California Corporation subsidiary Mesa Pharmacy, Inc. outstanding warrants were exchanged for PDC common stock. The Company converted all common and preferred warrants, whether expired or not, into common stock without consideration for the strike price upon the terms and provisions set forth in the warrant agreements. The conversion resulted in an issuance of 155,823 Series D shares. This conversion was treated as a modification of the exercise price of the warrants. Accordingly, the warrants were revalued on the conversion date, resulting in a loss of $7,111,444 being recorded within the accompanying condensed consolidated statement of operations. Subsequent to the March 17, 2014 conversion, zero warrants for PDC common or preferred stock remained outstanding.

The warrants were revalued upon modification of the exercise price using the Black-Scholes option pricing model using the following assumptions:

	June 30, 2014
Annual dividend yield		-
Expected life in years		0 - 8.7 Years
Risk-free interest rate		.003% - .25	%
Expected volatility		75	%

Socius CG II, Ltd. Financing

On June 30, 2014, there were 40,953,414 Socius warrants outstanding. They have an expiration date of June 3, 2016 and exercise prices ranging from $0.01-$1.02.

Stock Incentive Plan

The Company assumed The PAWS Pet Company’s 2010 adopted Stock Incentive Plan (the “Plan”). Under the Plan, at June 30, 2014, we had 4,000,000 shares approved and reserved for the issuance of stock options to employees, officers, directors and outside advisors. Under the Plan, the options may be granted to purchase shares of common stock at fair market value at the date of grant.

At June 30, 2014, the Company had 367,000 option shares outstanding, and 3,633,000 available for issuance.

The Company also assumed The PAWS Pet Company’s February 9, 2012 adopted 2012 Stock Incentive Plan (the “2012 Plan”). Under the 2012 Plan the Company had 10,000,000 shares and shares underlying stock options approved and reserved for the issuance to employees, officers, directors and outside advisors. At June 30, 2014, the Company had 6,170,950 shares issued under the 2012 Plan and 3,829,050 available for issuance.

6. RELATED PARTY TRANSACTIONS

Related Party Convertible Notes

A relative of Bennie Birch, our founder, is the note-holder of the following instruments: $125,000 2007-2009 Convertible Note issued in April 2007 accruing interest at the rate of 48%, per annum, $112,500 2007-2009 Convertible Note issued in June 2007 accruing interest at the rate of 18%, per annum, of which $85,000 of the principal has been repaid, $150,000 2012 Convertible Promissory Note issued in July 2012 accruing interest at the rate of 18%, per annum. As of June 30, 2014 and December 31, 2013, the Company had principal amounts of $302,500 of notes held by this relative outstanding. During the six months ended June 30, 2014, and the year ended December 31, 2013, the Company paid interest amounts of $0 and $38,313, respectively, pertaining to these notes.

On March 5, 2014, the Company issued a related party convertible promissory note to a shareholder assumed from Paws Pets Company, for $42,500, with stated interest rates of 6% per annum and is convertible into 260 shares of Series B Convertible Preferred Shares. The proceeds were used for operations. As of June 30, 2014, the total principal amount outstanding to the shareholder was $52,400. Total accrued interest for this note as of June 30, 2014 is $2,486.

F-20

Related Party Notes Payable

During 2013, the Company entered into a loan agreement (the “Loan Agreement”) by and between Andrew Do, the Chief Executive Officer and a shareholder of the Company, as lender (the “Lender”), and the Company, as borrower. Pursuant to the Loan Agreement, the Lender agreed to advance to the Company a principal amount of $104,165 (the “Loan”) with no stated interest rate. The Company has promised to pay in full the outstanding principal balance of any and all amounts due under the Loan Agreement within thirty (30) days of the Company’s receipt of investment financing or a commitment from a third party to provide $1,000,000 to the Company or one of its subsidiaries (the “Due Date”), to be paid in cash. The total amount outstanding for the loan agreement above was paid in cash on May 15, 2014.

On February 28, 2014, the Company issued a related party promissory note to Andrew Do for $100,000 with no stated interest. The proceeds were used for refinancing current notes payable outstanding. The Company paid $30,000 and $70,000 in cash on April 23, 2014, and May 15, 2014, respectively.

On February 20, and March 11, 2014, the Company issued a related party promissory note to a shareholder assumed from The PAWS Pet Company for $96,667 and $50,000, respectively, with stated interest rates of 6% per annum. The proceeds were used for operations. As of June 30, 2014, the Company had a principal amount of $146,667 held by this shareholder outstanding. Total accrued interest for this note as of June 30, 2014 is $3,019.

Related Party Employees

Seven relatives of Ed Kurtz, our Director and COO, are employed by us. During the six months ended June 30, 2014 and 2013, these relatives had a total cash compensation, including base salary, bonus and other compensation, of $67,696 and $55,003; $48,000 and $39,000; $14,687 and $0; $11,229 and $0; $64,000 and $14,298; $13,550 and $6,001; $64,000 and $51,500; $9,348, and $0; $8,243 and $4,836; $5,832 and $0; $5,058 and $0; respectively.

A relative of Andrew Do, our Pharmacist in Charge, is a consultant to the Company providing management consulting and other business advisory services. During the six months ended June 30, 2014 and 2013, the consultant’s total cash compensation was $19,500 and $39,000, respectively.

Board of Directors

A member of the Board of Directors is also the owner of our primary marketing consultant, TPS. See Notes 2 and 5 for additional information.

7. COMMITMENTS AND CONTINGENCIES

Leases

The Company leases its facilities located in Irvine, California under a rental agreement that expires on September 30, 2016. The rental agreement includes operating expenses such as common area maintenance, property taxes and insurance. Total rent expense is reflected in general and administrative expenses in the accompanying condensed consolidated statements of operations. Rental expense under operating leases during the six months ended June 30, 2014 and 2013 is $43,816 and $25,743, respectively.

In connection with its assumed, previous operations with The PAWS Pet Company, the Company leased space for certain of its offices and airport facilities under leases expiring from one month to two years after March 31, 2013. In 2012, the Company abandoned the leased properties but remain liable for unpaid rent of $360,679 which has been accrued within accounts payable and accrued liabilities of discontinued operations in the accompanying Condensed Consolidated Balance Sheet.

F-21

Litigation

The Company is involved in various lawsuits and claims regarding shareholder derivative actions, third-party billing agency actions, negligent misrepresentation, and breach of contract, that arise from time to time in the ordinary course of their business. Below is a summary of litigation activity for the six months ended June 30, 2014:

Nokley Group LLC

In February 2014 we were served with a complaint from Nokley Group LLC (“Nokley”) for breach of contract under a Fee and First Right of Refusal Agreement dated May 25, 2012 between our company and Nokley. In the complaint, which was filed in Nevada, Nokley stated, among other things, that we sold certain of our accounts receivable to factoring organizations without offering Nokley first right of refusal which they allege was required under the agreement. While we estimate we would have cross-complaints against Nokley that would significantly mitigate any potential damages, we first filed a motion to dismiss based on improper venue. On July 31, 2014, our Company and Nokley agreed to dismiss the action without prejudice, and to have each party to bear its own attorney fees and costs.

The Company estimates that the potential range of exposure for this matter, if refiled in a proper venue, is $17,000 to $30,000. As of June 30, 2014, we have accrued the minimum amount of potential exposure under our estimation that a loss would be probable.

MedCapGroup LLC

In May 2014 we were served with a complaint from MedCapGroup LLC (“MedCap”) for breach of contract, breach of covenant of good faith and fair dealing, intentional misrepresentation, fraud in the inducement, and deceptive trade practices under a November 2012 Healthcare Accounts Receivable Purchase Agreement between our company and MedCap.  MedCap alleged in its complaint that because we sell our accounts receivable based on dates of service, and not by patient, that only the original purchaser of a patient’s claims controls all payments and settlement negotiations with the insurer.  As a result, MedCap alleged that we had misrepresented the collectability of certain accounts receivable they had purchased from us and that they had therefore been damaged. While we estimate we have significant defenses against MedCap’s complaint, we first filed a motion to dismiss based on improper venue. On July 30, 2014 our motion to dismiss was granted.

The Company records accruals for such contingencies when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. As of June 30, 2014 and December 31, 2013, the Company accrues for liabilities associated with certain litigation matters if they are both probable and can be reasonably estimated. The Company has accrued for these matters and will continue to monitor each related legal issue and adjust accruals for new information and further developments in accordance with ASC 450-20-25, Contingencies. For these and other litigation and regulatory matters currently disclosed for which a loss is probable or reasonably possible, the Company is unable to determine an estimate of the possible loss or range of loss beyond the amounts already accrued. These matters can be affected by various factors, including whether damages sought in the proceedings are unsubstantiated or indeterminate; scientific and legal discovery has not commenced or is not complete; proceedings are in early stages; matters present legal uncertainties; there are significant facts in dispute; or there are numerous parties involved.

In the Company’s opinion, based on its examination of these matters, its experience to date and discussions with counsel, the ultimate outcome of legal proceedings, net of liabilities accrued in the Company’s balance sheet, is not expected to have a material adverse effect on the Company’s consolidated financial position. However, the resolution in any reporting period of one or more of these matters, either alone or in the aggregate, may have a material adverse effect on the Company’s consolidated results of operations and cash flows for that period.

Settled Litigation

Settlement liabilities consist of the following at:

	June 30, 2014		December 31, 2013
Myhill	$	130,000	$	200,000
Primary Care		-		48,000
Forte Capital		117,539		-
AATV		450,000		-
Total	$	697,539		248,000

Myhill

On August 28, 2012, we received a claim from Roger Saxton, Loren Myhill, Lucas Myhill, Beryl Myhill, and Ann Marie Kaumo (collectively the “Myhill Litigants”) seeking $358,433 for delayed public entry and illiquidity stemming from an investment made by the Myhill Litigants. On January 6, 2014, we settled with the Myhill Litigants for $200,000, $20,000 of which was payable on execution of the settlement agreement and the remainder payable at $10,000 per month over the following 18 months.

The Counsel for the Plaintiffs agreed to hold the stock certificates during pendency of the payout period. During such period, Plaintiffs shall have no right to vote such shares, transfer such shares, or encumber such shares, and will not be entitled to receive cash dividends or stock dividends or any distributions based on ownership of such shares. The Plaintiffs shall return each of their stock certificates to the Company with a full executed stock power sufficient to transfer such shares. In the event of any transaction by the Company, including merger or buyout, that results in Plaintiffs’ shares of PDC to be converted to shares of another entity, such obligations and restrictions stated herein shall apply to such new or different shares.

F-22

Primary Care

In December 2009, we entered into an agreement with Primary Care Management Services (“Primary Care”) under which Primary Care would provide services consisting of billing to and collection from various insurance carriers for our products. Primary Care was to be compensated by a rate equaling two percent of the amounts billed on our behalf. In April 2012, we entered into a settlement agreement with Primary Care, who by that time had billed in excess of $10 million which it had been unable to collect. Under the settlement agreement, we agreed to pay Primary Care $92,000, $20,000 of which was payable immediately and the remainder payable at $2,000 per month over the following 36 months.

On May 15, 2014 we entered into a new settlement agreement with Primary Care under which we paid them $40,000 in full satisfaction of all remaining amounts owed them. In connection with this new settlement agreement, we recorded a gain on extinguishment of debt in the amount of $8,000 during the three and six months ended June 30, 2014.

Forte Capital

This obligation was assumed on March 31, 2014 in the amount of $289,398 as a result of the Merger discussed in Note 1. The obligation arose from a March 2014 agreement with Forte Capital Partners, LLC under which we agreed to repay amounts outstanding under a 14% convertible debenture with a total of 14,351,322 shares of our common stock, issuable in six monthly installments of 2,391,887 shares beginning in March 2014. During the three months ended June 30, 2014, we issued a total of 7,175,661 shares which reduced this obligation. As of August 19, 2014, we have issued all shares required under the agreement with Forte Capital and no further amounts are owed.

AATV

As discussed in Note 5, on May 1, 2014, we finalized a settlement agreement with AATV. Under the finalized agreement, we agreed to pay AATV $1,100,000 for the following:

● $600,000 for the full repayment of principal and accrued interest on a Profit Sharing Note, $100,000 of which was paid in March 2014 (see Note 4).

● $500,000 for the repurchase of 7,504 Series D Preferred shares, representing the amount of AATV’s original investment (see Note 5).

Through June 30, 2014, we had repaid $650,000 of our obligation to AATV. In July 2014, we repaid an additional $350,000. As of August 19, 2014, the Company has a remaining obligation of $100,000.

Other Commitments and Contingencies

There are various other pending legal commitments and contingencies involving the Company, principally material breach of contract, and committed shares with consultants that were never issued. While it is not feasible to predict the outcome of such commitments, threats, and potential liabilities, in the opinion of the Company, either the likelihood of loss is remote or any reasonably possible loss associated with the resolution of such obligations is not expected to be material to the Company’s financial position, results of operations or cash flows either individually or in the aggregate. In the opinion of their legal counsel, the Company has filed cross complaints which should mitigate some Company liability.

Consulting Agreements – On August 12, 2010, the Company entered into a consulting service agreement with a financial advisor. The financial advisor assists companies in private placements, recapitalization, and restructuring. The term of the agreement was for thirty-six months or upon termination by either party. The financial advisor was entitled to $350,000, payable in installments of which only $250,000 was paid prior to termination, and issue warrants to purchase up to ten percent (10%) of the Company on a fully-diluted basis at an exercise price of $0.50 per share. As of August 12, 2010, the Company had approximately 7 million fully diluted shares outstanding. The Company terminated this service agreement in January 2012 without ever issuing the warrants. As of June 30, 2014, the Company believes that no additional amounts agreed to under the agreement are required as the services were never provided. In addition, the Company has received no demands for any additional amounts or warrants.

On April 25, 2011, the Company entered into a consulting service agreement with a law firm. The law firm assists companies in S-1 Registration statement (“S-1”), responses to SEC comments, and FINRA requirements. Either party may terminate the agreement at any time. In connection, with filing an S-1, the law firm was potentially entitled to 75,000 shares of common stock and $25,000 upon execution of the agreement and $15,000 upon filing the S-1 The Company has opted to enter the public market by means unrelated to filing an S-1, thus, the Company intends to terminate the agreement without issuing the potentially committed shares. As of June 30, 2014, the Company believes that no additional amounts agreed to under the agreement are required as the services were never provided.

F-23

Stock Issuance to Former Officers – On March 26, 2014, the Company issued 60,000,000 common shares to two former officers of the Company for cancellation of accrued and unpaid wages and the agreement to purchase the Company’s interest in Pet Airways, Inc. The sale of Pet Airways, Inc. was to relieve the Company of debts totaling $961,831. As of June 30, 2014, the Company recognized these liabilities under Liabilities of discontinued operations, on the Condensed Consolidated Balance Sheet, as the amount is in dispute.

Legal Proceeding Related to Discontinued Operations

Described below are material pending legal proceedings (other than ordinary routine litigation incidental to the Company’s business), material proceedings known to be contemplated by governmental authorities, other proceedings arising under federal, state, or local environmental laws and regulations (including governmental proceedings involving potential fines, penalties, or other monetary sanctions in excess of $10,000) and such other pending matters that we may determine to be appropriate. These legal proceedings were assumed from The PAWS Pet Company and are included in Liabilities of discontinued operations on the June 30, 2014 Condensed Consolidated Balance Sheet.

On April 26, 2012, a judgment was entered against our subsidiary, Pet Airways, Inc., in Circuit Court in and for Palm Beach County, Florida by Sky Way Enterprises, Inc. in the sum of $180,827 for services rendered, damages, including costs, statutory interest and attorneys’ fees.

On March 4, 2013, a judgment was entered against our subsidiary, Pet Airways, Inc., in District Court of Douglas County, Nebraska by Suburban Air Freight in the sum of $87,491 for services rendered, including statutory interest and attorneys’ fees.

On March 6, 2013, an order was issued a by the labor commissioner of the State of California for our subsidiary, Pet Airways, Inc., to pay a former employee Alyce Tognotti wages and penalties in the sum of $17,611 for services rendered, including penalties, statutory interest and liquidated damages.

On May 31, 2013, a motion for final judgment was filed against our subsidiary, Pet Airways, Inc., in Circuit Court in and for Broward County, Florida by AFCO Cargo BWI, LLC in the sum of $31,120 for services rendered, including statutory interest and attorneys’ fees.

Other than the foregoing, there were no claims, actions, or lawsuits which to our knowledge are pending or threatened that could reasonably be expected to have a material effect on the results of our operations. The Company is self-insured and has not accrued a reserve against potential losses from unknown risks and liabilities.

F-24

HIPAA

The Health Insurance Portability and Accountability Act (“HIPAA”) was enacted on August 21, 1996, to assure health insurance portability, reduce healthcare fraud and abuse, guarantee security and privacy of health information, and enforce standards for health information. Organizations are required to be in compliance with HIPAA provisions by April 2005. Effective August 2009, the Health Information Technology for Economic and Clinical Health Act (“HITECH Act”) was introduced imposing notification requirements in the event of certain security breaches relating to protected health information. Organizations are subject to significant fines and penalties if found not to be compliant with the provisions outlined in the regulations. The Company continues to be in compliance with HIPAA as of September 30, 2013.

The Company’s decision to obtain insurance coverage is dependent on market conditions, including cost and availability, existing at the time such decisions are made. The Company has evaluated its risks and has determined that the cost of obtaining product liability insurance outweighs the likely benefits of the coverage that is available and, as such, has no insurance for certain product liabilities effective May 1, 2006.

The Company believes that there are no compliance issues associated with applicable pharmaceutical laws and regulations that would have a material adverse effect on the Company.

The Company is subject from time to time to various claims and lawsuits and governmental investigations arising in the ordinary course of our business. While the Company’s management cannot predict the outcome of these claims with certainty, the Company’s management does not believe that the outcome of any of these legal matters will have a material effect on its financial statements.

8. NET INCOME (LOSS) PER SHARE

Basic earnings per share are calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable upon conversion of preferred shares, exercise of stock options and warrants (calculated using the treasury stock method). As of June 30, 2014 there were warrants and options outstanding to purchase 43.4 million shares, with an average exercise price of $0.68. The preferred stock common share equivalent is calculated using the four and nine tenths percent (4.9%) per shareholder limit as outlined in the Certificates of Designations. The dilutive common shares equivalents not included in the computation of diluted earnings per share, because the inclusion would be anti-dilutive are:

	June 30, 2014
	Common Share Equivalents
Convertible Notes		10,477,094
Preferred Stock		758,604,924
Options		367,000
Warrants		43,044,989
		812,494,007

If all dilutive instruments were exercised using the treasury stock method, then the total number of shares outstanding would be 759 million shares. No adjustments were required to reconcile net income as adjusted for dilutive shares from the net income as presented on the Consolidated Statement of Operations within this report.

F-25

The following table presents the breakdown of the weighted average number of dilutive shares for the six months ended June 30, 2013:

	Six Months Ended
	June 30, 2013
Weighted average number of dilutive shares:
Series D Preferred Stock		175,728,661
Series B Preferred Stock		-
Series C Preferred Stock		-
Options		-
Warrants		156,581,297
Total dilutive shares		332,309,958

9. SUBSEQUENT EVENTS

In July 2014, shareholders elected to convert 1,000 Series B preferred shares to 10,000,000 common shares and 325 Series C preferred shares to 6,500,000 common shares.

As of July 30, 2014, an additional 21,062 Series D shares have been issued to TPS since June 30, 2014 from the remaining number of shares reserved as discussed in Note 5.

F-26

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statements Regarding Forward-Looking Statements

This Management’s Discussion and Analysis of Financial Condition and Results Of Operation and other parts of this Form 10-Q contain forward-looking statements that involve risks and uncertainties. All forward-looking statements included in this Form 10-Q are based on information available to us on the date hereof, and except as required by law, we assume no obligation to update any such forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth in the current report on the Form 8-K/A as filed with the Securities and Exchange Commission on July 16, 2014 and other filings with the SEC. The following should be read in conjunction with our condensed consolidated financial statements contained elsewhere in this report.

Business Summary

Pharmacy Development Corporation (“PDC”) was organized on May 31, 2007 as a California Corporation. PDC and its wholly-owned California Corporation subsidiary Mesa Pharmacy, Inc. (collectively, the “Company”), is a health care company with one office located in Irvine, California that delivers innovative health solutions through its prescription medicines and consumer care products. Prior to 2012, the Company operated five retail pharmacies located in Southern California for the primary purpose of marketing and distributing its compounding products. The Company’s operations consist of the production and sale, by prescription, of human health pharmaceutical products using therapeutic and preventive agents for pain management. The Company sells compounding pharmaceutical products primarily via mail order to California worker’s compensation patients.

On March 31, 2014, the Company entered into an Agreement and Plan of Merger Agreement with Praxsyn Corporation (“Praxsyn” formerly known as The PAWS Pet Company, Inc.), a publicly traded company (OTCQB:PAWS) whereby Praxsyn would acquire 100% of the outstanding stock of the Company in for consideration of 500,000 shares of Praxsyn Series D preferred stock. Each share of Series D preferred stock is convertible into 1,000 shares of Praxsyn common stock. Additionally, the Company’s convertible promissory notes shall be exchanged for a like Parent convertible promissory note, convertible into shares of Parent Series D Preferred Stock on the terms herein, into one (1) share of Parent Series D Preferred Stock for each One Hundred Dollars ($100.00) of principal and interest converted in accordance with the terms of the notes.

Management’s Plan of Operations

We invoice our customers, which are insurance companies for workers compensation cases, in accordance with the fees permitted according to the State of California fee schedule. This is our gross billing. Given the nature of our industry and the reimbursement environment in which we operate, we are required to record our revenues and related accounts receivable from our billings, at their net realizable value.  This amount is often less than the gross billing we are allowed to charge and we have recorded these amounts based on historical collection trends.  In addition, we have had to finance our operations by selling our accounts receivable (recorded at net realizable value) to a number of factoring companies. The cost of factoring, which we record as interest expense, can be quite high – anywhere from 70% to 75% of the recorded accounts receivable.

The two factors discussed above have a material impact on our operating results, but also offer a major opportunity for profit growth as we move forward. We are currently planning to allocate additional resources to our collections efforts by building out a separate collection department within the Company or a separate subsidiary of the Company. We believe this will allow us to improve our collections and thus the net realizable value of our gross billing revenues.  In addition we continue to seek more conventional financing which will allow us to move away from factoring. If we are able to secure this type of financing, we will be able to dramatically reduce our interest expense. While there is no certainty that we will be able to achieve these goals, Management is hopeful we will be successful.

Critical Accounting Policies

The preparation of interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the amounts of revenue and expenses. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. In preparing the interim financial statements, the Company utilized available information, including its past history, industry standards and the current economic environment, among other factors, in forming its estimates and judgments, giving appropriate consideration to materiality. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of the Company’s results of operations to other companies in its industry. The Company believes that of its significant accounting policies, the following may involve a higher degree of judgment and estimation, or are fundamentally important to its business.

There have been no material changes during the six months period ended June 30, 2014 to the items that the Company disclosed as its critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in its Annual Report on Form 8-K as filed on July 16, 2014, for the year ended December 31, 2013.

3

Results of Operations

Comparison of the Three Months Ended June 30, 2014 and June 30, 2013

Net Revenue and Cost of Net Revenue

Our revenues increased from $498,712 to $23,242,709 for the three months ending June 30, 2013 and June 30, 2014, respectively. The $22,743,997 increase in revenues was primarily attributable to increased marketing and a reformulation of our compounding product which comprises the primary source of our revenues. Our costs of sales increased from $156,156 (31.3% of revenues) to $975,134 (4.2% of revenues) for the three months ending June 30, 2013 and June 30, 2014. The decrease in cost of sales as a percentage of revenue from 31.3% to 4.2% was primarily attributable to the reformulation of our compounding product.

General, Administrative, & Marketing expense

Our general and administrative expenses increased from $275,179 to $982,224 for the three months ending June 30, 2013 and June 30, 2014. The $707,045 increase in general and administrative expenses was primarily attributable to stock based compensation totaling $21,317 compared to $0 in 2013, and additional salaries and outside consulting expenses related to increased operations and SEC reporting requirements. Our selling and marketing expenses increased from $37,910 to $12,696,619 for the three months ending June 30, 2013 and June 30, 2014. The $12,658,709 increase in selling and marketing expenses includes stock based compensation of $4,975,951. The remaining increase was due to increased qualified prescription referral fees, for which the agreed upon rate increased from 13% to 17.5% from the comparable period.

Interest expense

Our interest expenses from notes and debentures increased from $204,753 to $370,183, for the three months ending June 30, 2013 and June 30 2014; the increase of $165,430 was primarily attributable to additional debt financing and conversions to equity in 2014. Interest from factoring increased from $484,801 to $9,188,446 for the three months ending June 30, 2013 and June 30, 2014; the $8,703,645 increase in interest expenses due to factoring was primarily attributable increased revenues and related factoring activity in 2014.

Net Loss

During the three months ended June 30, 2014 and 2013, the Company incurred a net loss of $780,924, and $197,164, respectively. The decrease in net income of $583,760 for the three months ending June 30, 2014 was primarily due to stock-based compensation of $4,997,268 compared to $0 for the comparable prior period.

4

Comparison of the Six Months Ended June 30, 2014 and June 30, 2013

Net Revenue and Cost of Net Revenue

Our revenues increased from $3,638,285 to $32,462,272 for the six months ending June 30, 2013 and June 30, 2014, respectively. The $28,823,987 increase in revenues was primarily attributable to increased marketing and a reformulation of our compounding product which comprises the primary source of our revenues. Our costs of sales increased from $328,811 (9% of revenues) to $1,306,917 (4% of revenues) for the six months ending June 30, 2013 and June 30, 2014. The decrease in cost of sales as a percentage of revenue from 9% to 4% was primarily attributable to the reformulation of our compounding product.

General, Administrative, & Marketing expense

Our general and administrative expenses increased from $674,662 to $1,582,177 for the six months ending June 30, 2013 and June 30, 2014. The $907,515 increase in general and administrative expenses was primarily attributable to stock based compensation totaling $121,317 compared to $0 in 2013, and additional salaries and outside consulting expenses related to increased operations and SEC reporting requirements. Our selling and marketing expenses increased from $759,456 to $20,077,336 for the six months ending June 30, 2013 and June 30, 2014. The $19,317,880 increase in selling and marketing expenses includes stock based compensation of $8,779,250.

The remaining increase was due to increased qualified prescription referral fees, for which the agreed upon rate increased from 13% to 17.5% from the comparable period.

Interest expense

Our interest expenses from notes and debentures increased from $516,765 to $759,160 for the six months ending June 30, 2013 and June 30 2014; the increase of $242,395 was primarily attributable to additional debt financing and conversions to equity in 2014. Interest from factoring increased from $851,136 to $14,507,535 for the six months ending June 30st, 2013 and June 30, 2014; the $13,656,399 increase in interest expenses due to factoring was primarily attributable increased revenues and related factoring activity in 2014.

Net Loss

During the six months ended June 30, 2014 and 2013, the Company incurred a net loss of $12,793,324, and generated net income of $151,574, respectively. The decrease in net income of $12,944,898 for the period ending June 30, 2014 was primarily due to stock-based compensation of $8,900,567, losses due to modification of warrants of $7,111,444, and losses on extinguishment of debt of $100,000 related to a debt-equity conversion. Total expenses related to equity issuances and conversion were $16,112,011 compared to $0 for the six months ended June 30^st, 2014 and June 30, 2013, respectively.

Liquidity and Capital Resources

We had cash of $518,550 at June 30, 2014, whereas we had cash of $37,494 at December 31, 2013; the $481,056 increase in cash was primarily attributable to the acquisition of Praxsyn of $485,012, the remaining difference is attributable to abnormally low cash balances in the prior period due to the lack of factoring activity in late 2013. The Company received $1,419,023 in cash on January 2, 2014 related to receivables obtained during the 4th quarter of 2013. We had a working capital deficit of $6,991,979 at June 30, 2014, whereas we had a working capital deficit of $5,919,145 at December 31, 2013; the $1,072,834 increase in working capital deficit was primarily attributable to the $2,185,778 net liabilities in excess of assets obtained in relation to the merger. See also additional information in the going concern disclosure in Note 2.

Financings

We do not currently maintain a line of credit or term loan with any commercial bank or other financial institution. We factor all of our receivables under a non-recourse agreement. We will need to complete additional financing transactions in order to replace this factoring with in-house billing and collections. Financing transactions, if any, may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. Even if the Company is able to raise the funds required, it is possible that it could incur unexpected costs and expenses, fail to generate sufficient revenue, or experience unexpected cash requirements that would force the Company to seek alternative financing. Further, if the Company issues additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of the Company’s common stock. If additional financing is not available or is not available on acceptable terms, the Company may have to continue factoring its receivables.

5

Non-Cash Expense Items

During the six month period ended June 30, 2014, the Company continued to minimize cash usage and seek additional equity financings for working capital purposes while using equity for the settlement of services rendered in lieu of cash and general corporate purposes. The Company also issued shares of common stock in lieu of cash for interest payments on debentures. A significant portion of the equity issuances resulted in non-cash settlements of liabilities that are included in the net loss for the six months period ended June 30, 2014. Additionally, other transactions and events occurred in which significant non-cash expense arose due to the nature of those occurrences, as can be further reviewed in our condensed consolidated statement of cash flows.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results or operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2014 our disclosure controls and procedures were not effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our management has identified certain material weaknesses in our internal control over financial reporting.

Our management, in consultation with our independent registered public accounting firm, concluded that material weaknesses existed in the following areas as of June 30, 2014:

(1) we do not employ full time in-house personnel with the technical knowledge to identify and address some of the reporting issues surrounding certain complex or non-routine transactions. With material, complex and non-routine transactions, management has and will continue to seek guidance from third-party experts and/or consultants to gain a thorough understanding of these transactions;

(2) we have inadequate segregation of duties consistent with the control objectives including but not limited to the disbursement process, transaction or account changes, account reconciliations and approval and the performance of bank reconciliations;

(3) we have ineffective controls over the period end financial disclosure and reporting process caused by reliance on third-party experts and/or consultants and insufficient accounting staff;

(4) we do not have a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls, approvals and procedures.

Due to the material weaknesses that management identified, it was unable to conclude that our disclosure controls and procedures were effective as of June 30, 2014. The Company has relied on external consultants for a large portion of the recording of complex transactions and estimates. The Company also hired a controller during the month of May 2014 to further refine their accounting process.

Changes in Internal Control over Financial Reporting.

There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the calendar quarter ended June 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

6

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, the Company is involved in legal proceedings, claims, and litigation that occur in connection with its business. The Company routinely assesses its liabilities and contingencies in connection with these matters based upon the latest available information and, when necessary, seeks input from its third-party advisors when making these assessments. Consistent with SEC rules and requirements, described in Note 7 to the financial statements are material pending legal proceedings (other than ordinary routine litigation incidental to the Company’s business), material proceedings known to be contemplated by governmental authorities, other proceedings arising under federal, state, or local environmental laws and regulations (including governmental proceedings involving potential fines, penalties, or other monetary sanctions in excess of $10,000) and such other pending matters that we may determine to be appropriate. Below is a summary of litigation activity for the six months ended June 30, 2014:

Nokley Group LLC

In February 2014 we were served with a complaint from Nokley Group LLC (“Nokley”) for breach of contract under a Fee and First Right of Refusal Agreement dated May 25, 2012 between our company and Nokley. In the complaint, which was filed in Nevada, Nokley stated, among other things, that we sold certain of our accounts receivable to factoring organizations without offering Nokley first right of refusal which they allege was required under the agreement. While we estimate we would have cross-complaints against Nokley that would significantly mitigate any potential damages, we first filed a motion to dismiss based on improper venue. On July 31, 2014, our Company and Nokley agreed to dismiss the action without prejudice, and to have each party to bear its own attorney fees and costs.

The Company estimates that the potential range of exposure for this matter, if refiled in a proper venue, is $17,000 to $30,000. As of June 30, 2014, we have accrued the minimum amount of potential exposure under our estimation that a loss would be probable.

MedCapGroup LLC

In May 2014 we were served with a complaint from MedCapGroup LLC (“MedCap”) for breach of contract, breach of covenant of good faith and fair dealing, intentional misrepresentation, fraud in the inducement, and deceptive trade practices under a November 2012 Healthcare Accounts Receivable Purchase Agreement between our company and MedCap.  MedCap alleged in its complaint that because we sell our accounts receivable based on dates of service, and not by patient, that only the original purchaser of a patient’s claims controls all payments and settlement negotiations with the insurer.  As a result, MedCap alleged that we had misrepresented the collectability of certain accounts receivable they had purchased from us and that they had therefore been damaged. While we estimate we have significant defenses against MedCap’s complaint, we first filed a motion to dismiss based on improper venue. On July 30, 2014 our motion to dismiss was granted.

Item 1A. Risk Factors

Not applicable because we are a smaller reporting company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

information is compiled and verified for accuracy, and then billed electronically to the insurance carrier.

Item 6. Exhibits

Exhibit No.	Description
31.1	Certification of Chief Executive Officer and Acting Chief Financial Officer pursuant to Section 302, of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Chief Executive Officer and Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Extension Schema Document**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB	XBRL Taxonomy Extension Label Linkbase Document**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document**

* Filed herewith

** In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”.

7

SIGNATURE

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: August 19, 2014

PRAXSYN CORPORATION

/s/ Ed Kurtz

Ed Kurtz

Chief Executive Officer and Chief Financial Officer

8

EX-31.1

Exhibit 31.1

SECTION 302 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECURITIES EXCHANGE ACT RULES 13A-14(A) AND 15D-14(A)
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ed Kurtz, Chief Executive Officer and Chief Financial Officer, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of PRAXSYN CORPORATION;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: August 19, 2014

/s/ Ed Kurtz

Ed Kurtz

Chief Executive Officer and Chief Financial Officer

EX-32.1

Exhibit 32.1

PRAXSYN CORPORATION

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of PRAXSYN CORPORATION (the “Company”) for the period ended June 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ed Kurtz, the Chief Executive Officer and Chief Financial Officer of the Company, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in this Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, I have executed this certificate as of this 19^th day of August, 2014.

/s/ Ed Kurtz

Ed Kurtz

Chief Executive Officer and Chief Financial Officer

XML

Net Income (Loss) Per Share (Details Narrative) (USD $)	Jun. 30, 2014
Earnings Per Share [Abstract]
Outstanding warrants and options to purchase of shares	43,400,000
Average exercise price of warrants and options	$ 0.68
Percentage used for calculate the preferred stock common share equivalent	4.90%
Total number of outstanding shares	75,900,000

XML

Notes and Debentures Payable - Outstanding Notes Payable (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Debt, Gross	$ 5,805,749	$ 6,046,258
Less: Discounts on Notes Payable	0	(98,922)
Debt, Principle	5,304,182	5,639,594
Current Portion, Principle		6,046,258
Long-term Portion, Principle
Accrued Interest	1,348,991	1,011,414
Accrued Interest, Current Portion	1,348,991	1,011,414
Accrued Interest, Long-term Portion
Unsecured Promissory Notes [Member]
Debt, Principle	10,417
Non-Related Parties [Member]
Debt, Gross	5,304,182	5,639,594
Less: Discounts on Notes Payable		(98,922)
Accrued Interest	1,258,942	950,114
Non-Related Parties [Member] | 2007 - 2009 Convertible Notes [Member]
Debt, Gross	397,000	497,000
Accrued Interest	97,254	78,083
Non-Related Parties [Member] | 2010 Profit Sharing Notes [Member]
Debt, Gross	175,000	675,000
Accrued Interest	262,173	383,163
Non-Related Parties [Member] | 2010 and 2011 Secured Bridge Notes [Member]
Debt, Gross	449,275	449,275
Accrued Interest	79,403	72,901
Non-Related Parties [Member] | 2012 Convertible Promissory Notes [Member]
Debt, Gross	3,175,125	3,299,875
Accrued Interest	682,553	410,174
Non-Related Parties [Member] | Unsecured Promissory Notes [Member]
Debt, Gross	782,782	817,366
Accrued Interest	36,466	5,793
Non-Related Parties [Member] | Convertible Debentures [Member]
Debt, Gross	325,000
Accrued Interest	101,093
Related Parties [Member]
Debt, Gross	501,567	406,664
Accrued Interest	90,049	61,300
Related Parties [Member] | 2007 - 2009 Convertible Notes [Member]
Debt, Gross	152,500	152,500
Accrued Interest	75,956	43,300
Related Parties [Member] | 2012 Convertible Promissory Notes [Member]
Debt, Gross	150,000	150,000
Accrued Interest	8,588	18,000
Related Parties [Member] | Unsecured Promissory Notes [Member]
Debt, Gross	146,667
Accrued Interest	3,019
Related Parties [Member] | Convertible Notes [Member]
Debt, Gross	52,400
Accrued Interest	2,486
Related Parties [Member] | Note Payable Due To Officer [Member]
Debt, Gross		104,164
Accrued Interest

XML

Description of Business (Details Narrative)

0 Months Ended

6 Months Ended

Jun. 30, 2014

Jan. 23, 2014

Trestles Pain Management Specialists LLC [Member]

Jun. 30, 2014

Trestles Pain Management Specialists LLC [Member]

Jun. 30, 2014

Series D Preferred Stock [Member]

Jun. 30, 2014

Series D Preferred Stock [Member]

Dec. 31, 2013

Series D Preferred Stock [Member]

Preferred stock, shares issued

500,000

500,000

500,000

Series D Preferred stock converted into Common stock

1,000

Stock issued to primary marketing consultant

166,664

132,111

Share earned

123,832

Remaining shares to be issued

42,832

Promissory notes converted into stock

Convertible promissory notes were exchanged for new convertible promissory note, convertible into shares of Series D Preferred Stock at the rate of one (1) share of Series D Preferred Stock for each One Hundred Dollars ($100.00)

Issued and Outstanding stock own percentage

40.00%

Voting rights acquisition percentage

63.00%

XML

Subsequent Events (Details Narrative) (Subsequent Event [Member])	1 Months Ended			0 Months Ended
	Jul. 31, 2014 Series B Preferred Stock [Member]	Jul. 31, 2014 Common Stock [Member]	Jul. 31, 2014 Series C Preferred Stock [Member]	Jul. 30, 2014 Series D Preferred Stock [Member] Trestles Pain Management Specialists LLC [Member]
Series B Preferred stock conversions	1,000	10,000,000
Series C Preferred stock conversions		6,500,000	325
Number of stock shares issued				21,062

XML

Commitments and Contingencies (Details Narrative) (USD $)	6 Months Ended		12 Months Ended					0 Months Ended		1 Months Ended	3 Months Ended	6 Months Ended	0 Months Ended	3 Months Ended	0 Months Ended	1 Months Ended		6 Months Ended	0 Months Ended								0 Months Ended		1 Months Ended		0 Months Ended	1 Months Ended	0 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2012	Mar. 11, 2014	Feb. 20, 2014	Dec. 31, 2013	Apr. 30, 2012	Mar. 26, 2014 Two Former Officers [Member]	Apr. 25, 2011 Consulting Agreements [Member]	Dec. 31, 2009 Mesa Pharmacy, Inc. [Member]	Jun. 30, 2014 Mesa Pharmacy, Inc. [Member]	Jun. 30, 2014 Mesa Pharmacy, Inc. [Member]	Mar. 31, 2014 Forte Capital Partners LLC [Member]	Jun. 30, 2014 Forte Capital Partners LLC [Member]	May 02, 2014 All American TV Inc [Member]	Jun. 30, 2014 All American TV Inc [Member]	Mar. 31, 2014 All American TV Inc [Member]	Jun. 30, 2014 All American TV Inc [Member] July 2014 [Member]	May 02, 2014 All American TV Inc [Member] Series D Preferred Stock [Member]	May 31, 2013 Pet Airways Inc [Member]	Mar. 06, 2013 Pet Airways Inc [Member]	Mar. 04, 2013 Pet Airways Inc [Member]	Apr. 26, 2012 Pet Airways Inc [Member]	May 25, 2012 First Right of Refusal Agreements [Member] Minimum [Member]	May 25, 2012 First Right of Refusal Agreements [Member] Maximum [Member]	Aug. 28, 2012 Saxton and Myhill [Member]	Jan. 06, 2014 Myhill Litigation [Member]	Jan. 06, 2014 Immediate Payment [Member]	Apr. 30, 2012 Immediate Payment [Member]	May 15, 2014 Immediate Payment [Member] Mesa Pharmacy, Inc. [Member]	Jan. 06, 2014 Second Payment Due One Month Thereafter [Member]	Apr. 30, 2012 Fixed Payments Per Month [Member]	May 02, 2014 Full Repayment With Accrued Interest [Member] All American TV Inc [Member]	Aug. 12, 2010 Consulting Agreements [Member]
Lease agreement expiration date	Sep. 30, 2016
Operating lease rent expense	$ 43,816	$ 25,743
Unpaid rent			360,679
Estimated potential range of exposure upon initial fee received																								17,000	30,000
Delayed public entry and illiquidity																										358,433
Litigation settlement amount																				31,120	17,611	87,491	180,827				200,000	20,000	20,000		10,000	2,000
Litigation settlement liability																														40,000
Litigation settlement excess billing amount										10,000,000
Undiscounted settlement liability and other loss							92,000
Payment of termination of agreement in lieu of contracted payment terms							92,000
Gain on extinguishment of debt	(100,000)										8,000	8,000
Merger obligation amount													289,398
Percentage of convertible debt	14.00%			6.00%	6.00%								14.00%
Number of shares issued or issuable for acquisition													14,351,322
Number of shares issued or issuable for acquisition, monthly installments													2,391,887	7,175,661
Repayment of debt															1,100,000	650,000	100,000	350,000	500,000														600,000
Principal amount of notes outstanding	5,805,749					6,046,258		961,831								100,000
Consulting Agreements, Term																																		36 months
Consulting service agreement, payable																																		350,000
Consulting service agreement, installment paid prior to termination																																		250,000
Issuance warrants to purchase maximum percentage on fully-diluted basis																																		10.00%
Warrants exercise price																																		$ 0.50
Fully diluted shares outstanding																																		7,000,000
Repurchase of stock																			7,504
Company issued share to former officer								60,000,000
Consulting service agreement, potentially entitled shares of common stock									75,000
Consulting service agreement, potentially entitled for payment upon execution of agreement									25,000
Consulting service agreement, potentially entitled for payment upon filing									15,000
Pending governmental proceedings involving potential fines penalties	$ 10,000

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Consolidation

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America. The condensed consolidated financial statements include the accounts of Pharmacy Development Corporation and Mesa Pharmacy, Inc., for the periods ended June 30, 2013, and 2014, and Praxsyn as of the Acquisition Date of March 31, 2014. All significant intercompany transactions have been eliminated in consolidation.

In connection with the six months ended June 30, 2014 and 2013, certain information and disclosures normally included in the annual financial statements prepared in accordance with the accounting principles generally accepted in the Unites States of America have been condensed or omitted pursuant to the rules and regulations of the United States Securities Exchange Commission. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these condensed consolidated financial statements have been included. Such adjustments consist of normal recurring adjustments. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2013 and 2012 filed on Form 8-K/A on July 16, 2014. The condensed consolidated results of operations for the six months ended June 30, 2014 and 2013 are not necessarily indicative of the results that may be expected for the full year.

On March 31, 2014, the PAWS Pet Company Inc. (the “Company”) closed the APMA with PDC whereby the Company acquired PDC through a forward triangular merger into the Company’s wholly owned subsidiary PDC, Inc. Since the PDC shareholders effectively control the Company and since PDC had existing business operations, the merger has been accounted for as a reverse recapitalization of PDC and a change in reporting entity whereby the historical consolidated financial statements of PDC are reported herein for the periods presented.

Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Since inception, management has funded operations primarily through proceeds received in connection with factoring of accounts receivable on a non-recourse basis from two primary factors, issuances of notes payable, and through sales of common stock. In addition, the Company is concentrated within the workers compensation market for which the collection of payments on receivables may be delayed for a significant period depending on various factors. Additionally, the Company is dependent upon a few third party referral services, one of them being a related party, in which generate almost 100% of the Company’s revenues. During the six months ended June 30, 2014 and 2013, the Company incurred a net loss of $12,793,324, and generated net income of $151,574, respectively. The net loss during the period ended June 30, 2014 included stock-based compensation of $8,900,567. The Company also has an accumulated deficit of $52,846,923 as of June 30, 2014. Management believes that it will need additional accounts receivable factoring, or debt and/or equity financing to be able to implement their business plan. Given the indicators described above, in addition to the capital deficiency and negative working capital, there is substantial doubt about the Company’s ability to continue as a going concern.

Management is attempting to find additional financing sources to replace or supplement the current factoring of accounts receivable to sustain operations until it can achieve profitability. Management believes that the replacement of the factoring of accounts receivable with more conventional financing will lead the Company to achieve profitability much sooner and with substantial results. The successful outcome of future activities cannot be determined at this time, and there are no assurances that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results.

The accompanying condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Use of Estimates

Financial statements prepared in accordance with accounting principles generally accepted in the United States require 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 revenues and expenses during the reporting period. The most significant estimates made by management are revenue recognition and the related allowance for doubtful accounts and contractual receivables, the allocation of accounts receivable between current and long-term, the value of stock-based compensation awards, the amount of potential legal settlements and contingencies, the fair market value of assets and liabilities of Praxsyn and the realization of deferred tax assets. Actual results could differ from those estimates. Management performs a periodic retrospective review of estimates and modifies assumptions as deemed appropriate.

Revenue Recognition

The Company sells compounding pharmaceutical products directly through its pharmacy. Revenues from compounding pharmaceutical products sold by its pharmacy are recorded using the net method, as required under ASC 954-605-25, Health Care Entities––Revenue Recognition. Compounding prescription revenue is recorded at established billing rates less estimated contractual adjustments with each respective insurance carrier. Net revenues include the amount the insurance company and the California Workers Compensation Fund are expected to pay directly to the Company.

The Company recognizes revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the sales price is fixed or determinable, and collection is probable. The Company’s pharmacy revenues are recognized when both the services are performed, which include compounding prescriptions and shipment to the customer.

Net revenues consisted of the following for the six months ended June 30, 2014 and 2013:

	Three Months Ended						Six Months Ended
	June 30, 2014			June 30, 2013			June 30, 2014			June 30, 2013
Gross billing revenue	$	49,353,084		$	1,077,141		$	69,852,030		$	7,342,812
Less: estimated contractual and other adjustments		(26,110,375	)		(578,429	)		(37,389,758	)		(3,704,527	)
Net billing revenue	$	23,242,709		$	498,712		$	32,462,272		$	3,638,285

Accounts Receivable

Accounts receivable represent amounts due from insurance companies, through various networks, for pharmaceutical compounds delivered to patients. The Company records an allowance for doubtful accounts and contractual reimbursements based on analyses of historical collections over the expected period until such cases are closed or settled. Management also assesses specific identifiable accounts considered at risk or uncollectible. The allowance for doubtful accounts and contractual reimbursements amounted to $14,627,928 and $6,265,951 as of June 30, 2014 and December 31, 2013, respectively.

Due to the nature of the industry and the reimbursement environment in which the Company operates, certain estimates are required in order to record net revenues and accounts receivable at their net realizable values. Inherent in these estimates is the risk that they may have to be revised or updated as additional information becomes available. It is possible that management’s estimates could change, which could have an impact on operations and cash flows. Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain payers may result in adjustments to amounts originally recorded.

The Company has factored receivables to multiple agents. The receivables have been sold to factors at rates ranging from 20% to 35% of the gross billings. These receivables have been determined to have a net realizable value of approximately 46% of the gross billings for the periods ended June 30, 2014 and 2013. The difference between the estimated net realizable value of receivables and the factored amounts has been classified as financing costs under interest expense at the time of sale to the factor.

During the six months ended June 30, 2014, the Company factored $10.1 million of 2013 accounts receivable for 20% and $44.5 million of 2014 prescription sales to a factor for 20% of the gross amount resulting in net proceeds of $10.9 million. In connection with these sales, the Company recorded financing costs of $14.2 million during the six months ended June 30, 2014 within interest expense on the accompanying condensed consolidated statement of operations.

During the six months ended June 30, 2013, the Company factored $4.7 million of accounts receivable for 25-30% of the gross amount resulting in net proceeds of approximately $1.3 million. In connection with these sales, the Company recorded financing costs of approximately $851,000 during the six months ended June 30, 2013 within interest expense on the accompanying condensed consolidated statement of operations.

Shipping and Handling

Shipping and handling costs incurred are included in general and administrative expenses. The amount of revenue received for shipping and handling is less than 0.5% of revenues for all periods presented.

Cash

The Company considers all highly liquid, income bearing investments purchased with original maturities of six months or less to be cash equivalents.

Inventory

Inventories are stated at the lower of cost (first-in, first-out method) or market. The Company’s inventories consist of pharmaceutical ingredients used within our compounding products. The Company’s inventory for all periods presented is substantially comprised and classified as raw materials.

Property and Equipment, Net

Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives. Leasehold improvements are amortized on a straight-line basis over the lesser of the useful lives or the remaining term of the lease. For tax purposes, accelerated tax methods are used. The Company expenses all purchases of equipment with individual costs of under $1,000. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized.

Debt Issuance Costs

The Company capitalizes direct costs related to the issuance of debt, including finder’s fees, underwriting and legal costs. The debt issuance costs are recorded as an asset and amortized as interest expense over the term of the related debt using the straight-line method, which approximated the effective interest method. Upon the extinguishment of the related debt, any unamortized debt issuance costs are expensed as interest expense.

As of June 30, 2014 and December 31, 2013, the Company had unamortized debt issuance costs of $0 and $24,361 respectively.

Impairment of Long-Lived Assets

The Company tests for impairment of its long-lived assets in accordance with Accounting Standards Codification (“ASC”) 360-10-35, Impairment or Disposal of Long-Lived Assets. Under that directive, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Such group is tested for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount.

Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.

Convertible Debt and Warrants Issued with Convertible Debt

Convertible debt is accounted for under the guidelines established by ASC 470, Debt with Conversion and Other Options and ASC 740, Beneficial Conversion Features. The Company records a beneficial conversion feature (“BCF”) when convertible debt is issued with conversion features at fixed or adjustable rates that are below market value when issued. If, however, the conversion feature is dependent upon a condition being met or the occurrence of a specific event, the BCF will be recorded when the related contingency is met or occurs. The BCF for the convertible instrument is recorded as a reduction, or discount, to the carrying amount of the convertible instrument equal to the fair value of the conversion feature. The discount is then amortized to interest over the life of the underlying debt using the effective interest method.

The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718, Compensation – Stock Compensation, except that the contractual life of the warrant is used. Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value is recorded as a debt discount or premium and is amortized over the expected term of the convertible debt to interest expense. For a conversion price change of a convertible debt issue, the additional intrinsic value of the debt conversion feature, calculated as the number of additional shares issuable due to a conversion price change multiplied by the previous conversion price, is recorded as additional debt discount and amortized over the remaining life of the debt.

The Company accounts for modifications of its BCF’s in accordance with ASC 470, Modifications and Exchanges. ASC 470 requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment.

Fair Value of Financial Instruments

The Company utilizes ASC 820-10, Fair Value Measurement, for valuing financial assets and liabilities measured on a recurring basis. ASC 820-10 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurements. This standard applies in situations where other accounting pronouncements either permit or require fair value measurements.

ASC 820-10 requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. ASC 820-10 defines the fair value of a financial instrument as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As of June 30, 2014 and December 31, 2013, the carrying value of certain financial instruments such as accounts receivable, accounts payable and accrued expenses approximates fair value due to the short-term nature of such instruments. The notes payable and convertible notes payable also approximate fair value as the interest rate under these notes approximates the Company’s current borrowing rate.

ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes six levels of inputs that may be used to measure fair value:

Level 1:	Quoted prices in active markets for identical or similar assets and liabilities.
Level 2:	Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets and liabilities.
Level 3:	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

As of June 30, 2014 and December 31, 2013, the Company did not have any level 2 or 3 financial instruments.

Stock-Based Compensation

The Company accounts for its stock-based compensation in accordance ASC 718-20, Stock-based Compensation. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite vesting period.

The Company issues warrants exercisable into the Company’s common stock and preferred stock as compensation to debt holders. The fair value of each warrant is estimated on the date of grant using the Black-Scholes pricing model. Assumptions are determined at the time of grant. No warrants were granted during the six months ended June 30, 2014 and 2013.

The assumptions used in the Black Scholes models referred to above are based upon the following data: (1) The expected life of the warrant is estimated by considering the contractual term of the warrant. (2) The expected stock price volatility of the underlying shares over the expected term of the warrant is based upon historical share price data of an index of comparable publicly-traded companies. (3) The risk free interest rate is based on published U.S. Treasury Department interest rates for the expected terms of the underlying warrants. (4) Expected dividends are based on historical dividend data and expected future dividend activity. (5) The expected forfeiture rate is based on historical forfeiture activity and assumptions regarding future forfeitures based on the composition of current grantees.

Advertising Costs

The Company expenses advertising costs as incurred. For the six months ended June 30, 2014 and 2013, the Company incurred advertising costs of $0 and $80, respectively.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes. The Company recognizes deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at currently effective tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the condensed consolidated financial statements. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. The Company classifies interest and penalties as a component of interest and other expenses. To date, there have been no interest or penalties assessed or paid.

The Company measures and records uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized.

As of the date of this report the Company is current in their income tax filings.

Concentrations, Uncertainties and Other Risks

Cash and cash equivalents - Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits of $250,000 per institution that pays Federal Deposit Insurance Corporation (FDIC) insurance premiums. The Company has never experienced any losses related to these balances.

Revenues and accounts receivable - Financial instruments that potentially subject the Company to credit risk principally consist of receivables. Insurance companies account for a substantial portion of the receivables. This risk is limited due to the ability to factor and the number of insurance companies comprising the Company’s customer base and their geographic dispersion. For the six months ended June 30, 2014 and 2013, no single customer represented more than 10% of revenues or accounts receivable, net.

The majority of the Company’s accounts receivable arise from product sales and are primarily due from government agencies and managed health care providers. The Company monitors the financial performance and creditworthiness of its customers so that it can properly assess and respond to changes in their credit profile. Conditions in the normal course of business, including inherent variability of timing of cash receipts, have resulted in, and may continue to result in, an increase in the average length of time that it takes to collect accounts receivable outstanding. For accounts receivable that are held and not factored, the Company does not expect to have write-offs or adjustments to accounts receivable which could have a material adverse effect on its consolidated financial position, results of operations or cash flows as the portion which is deemed uncollectible is already taken into account when the revenue is recognized.

During the six months ended June 30, 2014 and 2013, revenues generated from sales of compounding pharmaceutical products primarily to worker’s compensation patients represented 100% of total revenues. The Company revenues are generated from sales of compounding pharmaceutical products primarily to worker’s compensation patients, located primarily throughout Southern California. At times the collection on these receivables can take in excess of one year, during which the Company, at times, attends legal hearings, files liens to securitize claims, negotiates before worker’s compensation administrative judges, resolves liens with stipulations and orders for defendants to pay, and transmits demands to settle liens filed with the adjuster or defense attorneys.

During the six months ended June 30, 2014 and 2013, two consultants made up substantially 100% of the Company’s selling and marketing expense, one of which is a related party. Management believes the loss of these consultants to this organization would have a material impact on the Company’s consolidated financial position, results of operations, and cash flows. For the six months ended June 30, 2014 and 2013, the consultants earned $20,077,336 and $759,456, respectively. Of the 2014 amounts, $8,779,250 consisted of stock-based compensation. The amounts payable at June 30, 2014 and December 31, 2013 were $5,542,017 and $1,411,493, respectively. The terms of each contract entitled the consultant to receive an amount ranging from 13% to 17.5% of the gross prescription sales generated. The Company estimates that these two consultants generated almost 100% of the revenue for each period presented. In addition, on March 31, 2014, we added one of these consultants to the Company’s Board of Directors.

The pharmaceutical industry is highly competitive and regulated, and our future revenue growth and profitability is dependent on our timely product development, ability to retain proprietary formulas, and continued compliance. The compounding, processing, formulation, packaging, labeling, testing, storing, distributing, advertising and sale of the Company’s products are subject to regulation by one or more U.S. and California agencies, including the Board of Pharmacy, the Food and Drug Administration, the Federal Trade Commission, and the Drug Enforcement Administration as well as several other state and local agencies in localities in which the Company’s products are sold. In addition, the Company compounds and markets certain of its products in accordance with standards set by organizations, such as the United States Pharmacopeia Convention, Inc. The Company believes that its policies, operations and products comply in all material respects with existing regulations. The healthcare reform and a reduction in the coverage and reimbursement levels by insurance companies and government agencies and/or a change in the regulations or compliance with related agencies and/or a disruption in the Company’s ability to maintain its competitiveness may have a material impact on the Company’s consolidated financial position, results of operations, and cash flows.

Vendors - As of June 30, 2014 and December 31, 2013, two suppliers made up substantially 100% of the Company’s direct materials. Management believes the loss of either supplier to this organization would have a material impact on the Company’s consolidated financial position, results of operations, and cash flows. If the Company’s relationship with one of its vendors was disrupted, the Company could have temporary difficulty filling prescriptions for worker’s compensation related drugs until a replacement wholesaler agreement was executed, which would negatively impact the business. For the six months ended June 30, 2014 and 2013, expenses incurred for pharmaceutical compounding materials obtained from vendors were $952,813, and $137,619, respectively. The amounts payable at June 30, 2014 and December 31, 2013 for such costs were approximately $74,000 and $59,000, respectively.

Recent Accounting Pronouncements

There are no recently issued accounting pronouncements or standards updates that the Company has yet to adopt that are expected to have a material effect on its financial position, results of operations, or cash flows.

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Summary of Significant Accounting Policies - Schedule of Net Revenues (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Summary Of Significant Accounting Policies - Schedule Of Net Revenues Details
Gross billing revenue	$ 49,353,084	$ 1,077,141	$ 69,852,030	$ 7,342,812
Less: estimated contractual and other adjustments	(26,110,375)	(578,429)	(37,389,758)	(3,704,527)
Net billing revenue	$ 23,242,709	$ 498,712	$ 32,462,272	$ 3,638,285

XML

Summary of Significant Accounting Policies (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Revenue percentage			100.00%
Net income (loss)	$ (780,924)	$ (197,164)	$ (12,793,324)	$ 151,574
Stock based compensation			8,900,567
Accumulated deficit	52,846,923		52,846,923		40,053,599
Allowance for doubtful accounts	14,627,928		14,627,928		6,265,951
Percentage of receivables net realizable value			46.00%	46.00%
Factoring of Accounts receivable			10,100,000	4,700,000
Factoring percentage of accounts receivable			20.00%
Sales factoring of accounts receivable			44,500,000
Sales factoring percentage of accounts receivable			20.00%
Proceeds from accounts receivable			10,900,000	1,300,000
Financing costs amount			14,200,000	851,000
Equipment expense			1,000
Unamortized debt issuance costs	0		0		24,361
Stock based compensation, warrants grant value			0	0
Advertising costs			0	80
FDIC insured amount	250,000		250,000
Maximum percentage of revenue represented for single customer			10.00%	10.00%
Percentage of revenue generated from sales			100.00%	100.00%
Amount earned by the consultants			20,077,336	759,456
Amounts payable	5,542,017		5,542,017		1,411,493
Vendors [Member]
Amounts payable	74,000		74,000		59,000
Cost of compounding supplies & materials			952,813	137,619
Selling And Marketing [Member]
Stock based compensation	$ 4,975,951	$ 0	$ 8,779,250	$ 0
Minimum [Member]
Percentage of receivables sold range			20.00%
Factoring percentage of accounts receivable				25.00%
Range of contract			13.00%
Maximum [Member]
Percentage of receivables sold range			35.00%
Factoring percentage of accounts receivable				30.00%
Range of contract			17.50%

XML

Property and Equipment, Net (Details Narrative) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Depreciation expense	$ 4,498	$ 4,641
Machinery and Equipment [Member] | Minimum [Member]
Estimated useful life	3 years
Machinery and Equipment [Member] | Maximum [Member]
Estimated useful life	7 years
Furniture and Fixtures [Member] | Minimum [Member]
Estimated useful life	3 years
Furniture and Fixtures [Member] | Maximum [Member]
Estimated useful life	7 years
Computer Equipment [Member] | Minimum [Member]
Estimated useful life	3 years
Computer Equipment [Member] | Maximum [Member]
Estimated useful life	7 years

XML

Property and Equipment, Net - Schedule of Property and Equipment (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Property, Plant and Equipment [Abstract]
Leasehold improvements	$ 24,749	$ 24,749
Machinery and equipment	27,229	22,629
Furniture and fixtures	3,997	3,997
Computer equipment	26,854	13,406
Property and equipment, total	82,829	64,781
Less : accumulated depreciation	(41,497)	(36,999)
Property and equipment, net	$ 41,332	$ 27,782

XML

Description of Business

6 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

1. DESCRIPTION OF BUSINESS

Organization and Nature of Business

Business

Praxsyn Corporation (the “Company”) is a health care company dedicated to providing medical practitioners with medications and services for their patients. Through our facility in Irvine, California, we currently formulate transdermal creams using therapeutic and preventative agents for pain management. These products are geared to patients suffering from long-term pain associated with work place related injuries. Our operations consist of the production and sale, by prescription, of our pain management products to California workers’ compensation insurance providers. The products are shipped directly to patients, and billings for these products are typically made to and collected from the insurance providers of the patients’ employers.

Merger

On December 31, 2013, we entered into a First Amended Securities Exchange Agreement (“SEA”) with Mesa Pharmacy, Inc. (“Mesa”), a wholly-owned subsidiary of Pharmacy Development Corp. (“PDC”), to acquire all of Mesa. On March 20, 2014, we replaced the SEA by entering into an Agreement and Plan of Merger Agreement (the “APMA”) with PDC whereby we agreed to acquire all the issued and outstanding shares of PDC in exchange for 500,000 shares of our Series D Preferred Stock. Each share of Series D preferred stock is convertible into 1,000 shares of our common stock. On January 23, 2014, the Company entered into an agreement with its primary marketing consultant, Trestles Pain Management Specialists, LLC (“TPS”), whereby the PDC shareholders have agreed to assign 166,664 (or 1/3) of the 500,000 shares of Praxsyn Series D preferred stock issued in connection with the merger to TPS. The shares are in exchange for future services with the Company on a performance basis. At June 30, 2014, 123,832 shares had been earned by, and issued to, TPS leaving 42,832 shares remaining to be issued. Additionally, in accordance with the APMA, certain of our convertible promissory notes were exchanged for new convertible promissory note, convertible into shares of Series D Preferred Stock at the rate of one (1) share of Series D Preferred Stock for each One Hundred Dollars ($100.00) of unpaid principal and interest. The APMA closed on March 31, 2014 (the “Acquisition Date”).

For accounting purposes, this transaction was treated as a reverse-acquisition in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations, since control of our Company passed to the PDC shareholders. We determined for accounting and reporting purposes that PDC is the acquirer because of the significant holdings and influence of its control group (which includes Mesa) before and after the acquisition. As a result of this transaction, the PDC control group owns 40% of our issued and outstanding common stock on a diluted basis. In addition, the Series D preferred shares are the only preferred shares with voting rights. With these voting rights, the PDC control group controlled approximately 63% of our common stock on a diluted basis after the acquisition. Additionally, the PDC control group, pre-acquisition, was significantly larger than Praxsyn in terms of assets and operations. Finally, the future operations of the PDC control group will be the Company’s primary operations and more indicative of the operations of the consolidated entity on a going forward basis.

Accordingly, the consolidated assets and liabilities of PDC are reported at historical costs and the historical consolidated results of operations of PDC will be reflected in this and future Praxsyn filings as a change in reporting entity. The assets and liabilities of Praxsyn are reported at their carrying value, which approximated their fair value, on the Acquisition Date and no goodwill was recorded. Praxsyn’s results of operations will be included from the Acquisition Date.

The following is a schedule of Praxsyn’s assets and liabilities at March 31, 2014:

	March 31, 2014
ASSETS:
Cash	$	485,012
Fixed assets		5,184
Total assets:		490,196
LIABILITIES:
Accounts payable		362,582
Accrued expenses		588,401
Accrued interest		96,362
Settlement liability		289,398
Convertible debentures		377,400
Liabilities of discontinued operations		961,831
Total liabilities		2,675,974
Net liabilities assumed	$	(2,185,778	)

The following unaudited pro forma information was prepared as if the acquisition had taken place at the beginning of the period for the six month periods ended June 30, 2014 and 2013:

	Pro-Forma Combined
	Six Months Ended June 30, 2014			Six Months Ended June 30, 2013
Revenue	$	32,462,272		$	3,638,285
Net loss from continuing operations		(21,281,838	)		(6,401,952	)
Net loss	$	(21,285,286	)	$	(6,437,875	)
Net loss per share, basic and diluted	$	(0.09	)	$	(0.07	)

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Notes and Debentures Payable (Details Narrative) (USD $)

6 Months Ended

6 Months Ended

0 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

0 Months Ended

3 Months Ended

6 Months Ended

6 Months Ended

3 Months Ended

0 Months Ended

3 Months Ended

6 Months Ended

3 Months Ended

0 Months Ended

Jun. 30, 2014

Jun. 30, 2013

Mar. 11, 2014

Feb. 20, 2014

Dec. 31, 2013

Jun. 30, 2014

Series D Preferred Stock [Member]

Mar. 31, 2014

Series D Preferred Stock [Member]

Note Conversion Agreement [Member]

Jun. 30, 2014

2007 - 2009 Convertible Notes [Member]

Mar. 31, 2014

2007 - 2009 Convertible Notes [Member]

Note Conversion Agreement [Member]

Jun. 30, 2014

2007 - 2009 Convertible Notes [Member]

Related Party Convertible Promissory [Member]

Jun. 30, 2014

Unsecured Promissory Notes Issued To Shareholder [Member]

Mar. 10, 2014

2010 Profit Sharing Notes [Member]

Jun. 30, 2014

2010 Profit Sharing Notes [Member]

Jun. 30, 2014

2010 Profit Sharing Notes [Member]

Jun. 30, 2014

2010 and 2011 Secured Bridge Notes [Member]

Jun. 30, 2014

2012 Convertible Promissory Notes [Member]

Mar. 31, 2014

2012 Convertible Promissory Notes [Member]

Note Conversion Agreement [Member]

Feb. 20, 2014

Unsecured Promissory Notes [Member]

Nov. 18, 2013

Unsecured Promissory Notes [Member]

Mar. 31, 2014

Unsecured Promissory Notes [Member]

Jun. 30, 2014

Unsecured Promissory Notes [Member]

Feb. 20, 2014

Related Party Unsecured Promissory Notes [Member]

Mar. 31, 2014

Convertible Debentures [Member]

Jun. 30, 2014

Convertible Note (Related Party) [Member]

Mar. 05, 2014

Convertible Note (Related Party) [Member]

Shareholder [Member]

Mar. 05, 2014

Convertible Note (Related Party) [Member]

Shareholder [Member]

Series D Preferred Stock [Member]

Amortization of discount to interest expense

$ 98,922

$ 61,203

Unamortized discounts

0

98,922

Unamortized debt issuance costs

0

24,361

Notes, Interest Rate, Minimum

18.00%

18.00%

0.01%

0.50%

0.00%

8.00%

Notes, Interest Rate, Maximum

33.00%

48.00%

5.00%

6.00%

18.00%

Beneficial conversion feature recognized to interest expense

16,138

16,138

Converstion of series D preferred stock unpaid principal amount

the remaining notes were rewritten and the conversion feature modified to allow for conversion into one share one (1) share of Series D Preferred Stock for each One Hundred Dollars ($100) of unpaid principal and interest.

Convertible Notes, shares value

145,334

100,000

Convertible Notes, shares issued

1,094

1,505

1,094

260

Unsecured Promissory Notes

20,833

124,750

45,000

20,833

50,000

Accured interest paid

172,964

449,426

10,417

Loss on extinguishment of debt

(100,000)

180,973

180,973

Outstanding on a profit sharing note

5,805,749

6,046,258

Profit-Sharing Notes' term

4 years

4 years

Repayment of debt and accrued interest

600,000

Notes interest rate

14.00%

6.00%

6.00%

15.00%

18.00%

18.00%

6.00%

6.00%

Restriction period for convertible promissory notes

2 years

Accrued and unpaid intrest

1,348,991

1,011,414

20,584

100,000

Notes outstanding

5,304,182

5,639,594

10,417

Secured Bridge Notes, Principle

772,365

Repayment of Unsecured Promissory Notes per month

19,613

7,500

7,500

Related Party Notes, Principle

$ 96,667

$ 52,400

$ 42,500

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Net Income (Loss) Per Share - Schedule of Common Share Equivalents (Details)	6 Months Ended
	Jun. 30, 2014
Common share Equivalents	812,494,007
Convertible Debt Securities [Member]
Common share Equivalents	10,477,094
Preferred Stock [Member]
Common share Equivalents	758,604,924
Options [Member]
Common share Equivalents	367,000
Warrant [Member]
Common share Equivalents	43,044,989

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Condensed Consolidated Balance Sheets (Unaudited) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Current assets:
Cash	$ 518,550	$ 37,494
Accounts receivable, net of allowance and long-term portion	8,523,170	3,564,770
Inventories	78,383	13,441
Other current assets	24,905	20,230
Total current assets	9,145,008	3,635,935
Property and equipment, net	41,332	27,782
Accounts receivable, long-term	3,134,858	983,440
Debt issuance cost, net		24,361
Other assets	5,879	5,879
Deferred tax asset	248,455	248,455
Total assets	12,575,532	4,925,852
Current liabilities:
Accounts payable	607,032	191,002
Accrued liabilities	714,417	187,502
Accrued interest	1,348,991	1,011,414
Accrued marketing	5,542,017	1,411,493
Notes payable	5,304,182	5,639,594
Notes payable to related parties	501,567	406,664
Settlement liability	697,539	248,000
Liabilities of discontinued operations	961,831
Deferred tax liability	459,411	459,411
Total current liabilities	16,136,987	9,555,080
Commitments and contingencies (Note 7)
Stockholders' Deficit:
Common stock, no par value, 1,400,000,000 and 1,100,000,000 shares authorized, 327,454,384 and 0 issued and outstanding at June 30, 2014 and December 31, 2013, respectively
Additional paid-in capital	49,485,468	35,624,371
Accumulated deficit	(52,846,923)	(40,053,599)
Treasury stock at cost, 389,623 shares at June 30, 2014 and December 31, 2013, respectively	(200,000)	(200,000)
Total stockholders' deficit	(3,561,455)	(4,629,228)
Total liabilities and stockholders' deficit	12,575,532	4,925,852
Series D Preferred Stock [Member]
Stockholders' Deficit:
Preferred stock value
Series B Preferred Stock [Member]
Stockholders' Deficit:
Preferred stock value
Series C Preferred Stock [Member]
Stockholders' Deficit:
Preferred stock value
Series A Preferred Stock [Member]
Stockholders' Deficit:
Preferred stock value

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Condensed Consolidated Statement of Stockholders' Deficit (Unaudited) (USD $)	Series D Preferred Stock [Member]	Series B Preferred Stock [Member]	Series C Preferred Stock [Member]	Series A Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2013						$ 35,624,371	$ (40,053,599)	$ (200,000)	$ (4,629,228)
Balance, shares at Dec. 31, 2013	174,184
Shares retained in merger and net liabilities assumed						(2,185,778)			(2,185,778)
Shares retained in merger and net liabilities assumed, shares		72,415	1,245		287,582,556
Repurchase and cancellation of stock						(506,000)			(506,000)
Repurchase and cancellation of stock, shares	(7,549)
Stock issued for services						8,899,808			8,899,808
Stock issued for services, shares	132,111				196,167
Stock issued to cancel warrants						7,111,444			7,111,444
Stock issued to cancel warrants, shares	155,823
Stock issued to settle debt						524,726			524,726
Stock issued to settle debt, shares	2,599				7,175,661
Beneficial conversion feature						16,138			16,138
Series B Preferred stock conversions		(1,850)			18,500,000
Series C Preferred stock conversions			700		14,000,000
Stock options expense						759			759
Net loss							(12,793,324)		(12,793,324)
Balance at Jun. 30, 2014						$ 49,485,468	$ (52,846,923)	$ (200,000)	$ (3,561,455)
Balance, shares at Jun. 30, 2014	457,168	70,565	545		327,454,384				75,900,000

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Stockholders' Deficit - Schedule of Warrants Stock Option (Details) (Warrant [Member])	6 Months Ended
	Jun. 30, 2014
Annual dividend yield	0.00%
Expected volatility	75.00%
Minimum [Member]
Expected life in years	0 years
Risk-free interest rate	0.003%
Maximum [Member]
Expected life in years	8 years 8 months 12 days
Risk-free interest rate	0.25%

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Stockholders' Deficit (Tables) (Warrant [Member])

6 Months Ended

Jun. 30, 2014

Warrant [Member]

Schedule of Warrants Stock Option

The warrants were revalued upon modification of the exercise price using the Black-Scholes option pricing model using the following assumptions:

	June 30, 2014
Annual dividend yield		-
Expected life in years		0 - 8.7 Years
Risk-free interest rate		.003% - .25	%
Expected volatility		75	%

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Related Party Transactions (Details Narrative) (USD $)	6 Months Ended						6 Months Ended																							12 Months Ended	0 Months Ended										0 Months Ended	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Mar. 11, 2014	Feb. 20, 2014	Dec. 31, 2013	Jun. 30, 2014 Shaholder Outstanding [Member]	Jun. 30, 2014 Relative One of Ed Kurtz [Member]	Jun. 30, 2013 Relative One of Ed Kurtz [Member]	Jun. 30, 2014 Relative Two of Ed Kurtz [Member]	Jun. 30, 2013 Relative Two of Ed Kurtz [Member]	Jun. 30, 2014 Relative Three of Ed Kurtz [Member]	Jun. 30, 2013 Relative Three of Ed Kurtz [Member]	Jun. 30, 2014 Relative Four of Ed Kurtz [Member]	Jun. 30, 2013 Relative Four of Ed Kurtz [Member]	Jun. 30, 2014 Relative Five of Ed Kurtz [Member]	Jun. 30, 2013 Relative Five of Ed Kurtz [Member]	Jun. 30, 2014 Relative Six of Ed Kurtz [Member]	Jun. 30, 2013 Relative Six of Ed Kurtz [Member]	Jun. 30, 2014 Relative Seven of Ed Kurtz [Member]	Jun. 30, 2013 Relative Seven of Ed Kurtz [Member]	Jun. 30, 2014 Relative Eight of Ed Kurtz [Member]	Jun. 30, 2013 Relative Eight of Ed Kurtz [Member]	Jun. 30, 2014 Relative Nine of Ed Kurtz [Member]	Jun. 30, 2013 Relative Nine of Ed Kurtz [Member]	Jun. 30, 2014 Relative Ten of Ed Kurtz [Member]	Jun. 30, 2013 Relative Ten of Ed Kurtz [Member]	Jun. 30, 2014 Relative Eleven of Ed Kurtz [Member]	Jun. 30, 2013 Relative Eleven of Ed Kurtz [Member]	Jun. 30, 2014 Related Party Convertible Promissory [Member]	Dec. 31, 2013 Related Party Convertible Promissory [Member]	May 15, 2014 Andrew Do [Member]	Apr. 23, 2014 Andrew Do [Member]	Feb. 28, 2014 Andrew Do [Member]	Jun. 30, 2014 2007-2009 Convertible Note issued in April 2007 [Member]	Jun. 30, 2014 2007-2009 Convertible Note issued in June 2007 [Member]	Jun. 30, 2014 2012 Convertible Promissory Note issued in July 2012 [Member]	Jun. 30, 2014 Related Party Convertible Promissory [Member]	Dec. 31, 2013 Related Party Convertible Promissory [Member]	Jun. 30, 2014 Convertible Note (Related Party) [Member]	Mar. 05, 2014 Convertible Note (Related Party) [Member] Shareholder [Member]	Mar. 05, 2014 Convertible Note (Related Party) [Member] Shareholder [Member] Series D Preferred Stock [Member]	Dec. 31, 2013 Loan Agreement [Member]
Convertible notes			$ 50,000	$ 96,667																													$ 100,000	$ 125,000	$ 112,500	$ 150,000
Percentage of debt	14.00%		6.00%	6.00%																														48.00%	18.00%	18.00%				6.00%
Repayment of the note	650,000																														70,000	30,000
Repayment of principal payment																																			85,000
Principal amount of notes outstanding	5,805,749				6,046,258	146,667																															302,500	302,500
Accrued interest	3,019
Payment of interest	100,000																												0	38,313
Loan, principal amount																																										104,165
Receipt of investment financing or commitment from third party																																										1,000,000
Total cash compensation, including base salary, bonus and other compensation							67,696	55,003	48,000	39,000	14,687	0	11,229	0	64,000	14,298	13,550	6,001	64,000	51,500	9,348	0	8,243	4,836	5,832	0	5,058	0
Related Party Notes, Principle																																					302,500	302,500	52,400	42,500
Convertible Notes, shares issued																																									260
Accrued Interest	1,348,991				1,011,414																																		2,486
Management consulting and other business advisory services, fees received	$ 19,500	$ 39,000

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Net Income (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Schedule of Common Share Equivalents

The dilutive common shares equivalents not included in the computation of diluted earnings per share, because the inclusion would be anti-dilutive are:

	June 30, 2014
	Common Share Equivalents
Convertible Notes		10,477,094
Preferred Stock		758,604,924
Options		367,000
Warrants		43,044,989
		812,494,007

Schedule of Net Income Loss Per Share

The following table presents the breakdown of the weighted average number of dilutive shares for the six months ended June 30, 2013:

	Six Months Ended
	June 30, 2013
Weighted average number of dilutive shares:
Series D Preferred Stock		175,728,661
Series B Preferred Stock		-
Series C Preferred Stock		-
Options		-
Warrants		156,581,297
Total dilutive shares		332,309,958

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (12,793,324)	$ 151,574
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	4,498	4,641
Loss on extinguishments of notes payable	100,000
Loss on disposal of fixed assets	5,184
Gain on settlements and extinguishment of accrued interest	(188,973)
Loss on receivables sold to factor	14,208,849	851,136
Stock-based compensation	8,900,567
Warrant modification expense	7,111,444
Amortization of debt discount and beneficial conversion feature	115,060	61,203
Amortization of debt issuance costs	24,361	36,899
Deferred tax provision (benefit)		355,881
Change in operating assets and liabilities
Accounts receivable	(32,248,551)	(3,525,053)
Inventory	(64,942)	9,201
Other current assets	(4,675)	1,038
Accounts payable	53,448	35,767
Accrued liabilities	(67,486)	103,663
Accrued interest	463,605	5,936
Accrued Marketing	4,130,524	268,203
Settlement liability	(652,467)	(8,000)
Net cash used in operating activities	(10,902,878)	(1,647,911)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(18,048)
Cash acquired in connection with merger	485,012
Net cash provided by investing activities	466,964
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of accounts receivable to factor	10,929,884	1,288,551
Repayments of loans payable	(55,417)	(14,882)
Borrowings from related parties	246,767
Repayments to related parties	(204,264)	49,102
Net cash provided by financing activities	10,916,970	1,322,771
Increase (decrease) in cash and cash equivalents	481,056	(325,140)
Cash and cash equivalents, beginning of period	37,494	325,551
Cash and cash equivalents, end of period	518,550	411
Supplementary disclosures of cash flow information
Cash paid for interest	172,964	449,426
Cash paid for income taxes
Non cash investing and financing activities:
Common stock issued in exchange for cancellation of note payable	524,726
Conversion of accrued interest into notes payable and accrued interest	20,833
Creation of obligations through settlements	500,000
Net liabilities assumed from reverse merger	$ 2,185,778

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Common stock, par value
Common stock, shares authorized	1,400,000,000	1,100,000,000
Common stock, shares issued	327,454,384	0
Common stock, shares outstanding	327,454,384	0
Treasury stock, Shares	389,623	389,623
Series D Preferred Stock [Member]
Preferred stock, par value
Preferred stock, shares issued	500,000	500,000
Preferred stock, shares outstanding	457,168	174,184
Preferred stock, liquidation preference	$ 20,000,000	$ 0
Series B Preferred Stock [Member]
Preferred stock, par value
Preferred stock, shares issued	70,565	0
Preferred stock, shares outstanding	0	0
Preferred stock, liquidation preference	2,116,950	0
Series C Preferred Stock [Member]
Preferred stock, par value
Preferred stock, shares issued	545	0
Preferred stock, shares outstanding	545	0
Preferred stock, liquidation preference	54,500	0
Series A Preferred Stock [Member]
Preferred stock, par value
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Preferred stock, liquidation preference	$ 0	$ 0

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Basis of Presentation and Consolidation

Basis of Presentation and Consolidation

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America. The condensed consolidated financial statements include the accounts of Pharmacy Development Corporation and Mesa Pharmacy, Inc., for the periods ended June 30, 2013, and 2014, and Praxsyn as of the Acquisition Date of March 31, 2014. All significant intercompany transactions have been eliminated in consolidation.

In connection with the six months ended June 30, 2014 and 2013, certain information and disclosures normally included in the annual financial statements prepared in accordance with the accounting principles generally accepted in the Unites States of America have been condensed or omitted pursuant to the rules and regulations of the United States Securities Exchange Commission. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these condensed consolidated financial statements have been included. Such adjustments consist of normal recurring adjustments. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2013 and 2012 filed on Form 8-K/A on July 16, 2014. The condensed consolidated results of operations for the six months ended June 30, 2014 and 2013 are not necessarily indicative of the results that may be expected for the full year.

On March 31, 2014, the PAWS Pet Company Inc. (the “Company”) closed the APMA with PDC whereby the Company acquired PDC through a forward triangular merger into the Company’s wholly owned subsidiary PDC, Inc. Since the PDC shareholders effectively control the Company and since PDC had existing business operations, the merger has been accounted for as a reverse recapitalization of PDC and a change in reporting entity whereby the historical consolidated financial statements of PDC are reported herein for the periods presented.

Going Concern

Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Since inception, management has funded operations primarily through proceeds received in connection with factoring of accounts receivable on a non-recourse basis from two primary factors, issuances of notes payable, and through sales of common stock. In addition, the Company is concentrated within the workers compensation market for which the collection of payments on receivables may be delayed for a significant period depending on various factors. Additionally, the Company is dependent upon a few third party referral services, one of them being a related party, in which generate almost 100% of the Company’s revenues. During the six months ended June 30, 2014 and 2013, the Company incurred a net loss of $12,793,324, and generated net income of $151,574, respectively. The net loss during the period ended June 30, 2014 included stock-based compensation of $8,900,567. The Company also has an accumulated deficit of $52,846,923 as of June 30, 2014. Management believes that it will need additional accounts receivable factoring, or debt and/or equity financing to be able to implement their business plan. Given the indicators described above, in addition to the capital deficiency and negative working capital, there is substantial doubt about the Company’s ability to continue as a going concern.

Management is attempting to find additional financing sources to replace or supplement the current factoring of accounts receivable to sustain operations until it can achieve profitability. Management believes that the replacement of the factoring of accounts receivable with more conventional financing will lead the Company to achieve profitability much sooner and with substantial results. The successful outcome of future activities cannot be determined at this time, and there are no assurances that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results.

The accompanying condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Use of Estimates

Use of Estimates

Financial statements prepared in accordance with accounting principles generally accepted in the United States require 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 revenues and expenses during the reporting period. The most significant estimates made by management are revenue recognition and the related allowance for doubtful accounts and contractual receivables, the allocation of accounts receivable between current and long-term, the value of stock-based compensation awards, the amount of potential legal settlements and contingencies, the fair market value of assets and liabilities of Praxsyn and the realization of deferred tax assets. Actual results could differ from those estimates. Management performs a periodic retrospective review of estimates and modifies assumptions as deemed appropriate.

Revenue Recognition

Revenue Recognition

The Company sells compounding pharmaceutical products directly through its pharmacy. Revenues from compounding pharmaceutical products sold by its pharmacy are recorded using the net method, as required under ASC 954-605-25, Health Care Entities––Revenue Recognition. Compounding prescription revenue is recorded at established billing rates less estimated contractual adjustments with each respective insurance carrier. Net revenues include the amount the insurance company and the California Workers Compensation Fund are expected to pay directly to the Company.

The Company recognizes revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the sales price is fixed or determinable, and collection is probable. The Company’s pharmacy revenues are recognized when both the services are performed, which include compounding prescriptions and shipment to the customer.

Net revenues consisted of the following for the six months ended June 30, 2014 and 2013:

	Three Months Ended						Six Months Ended
	June 30, 2014			June 30, 2013			June 30, 2014			June 30, 2013
Gross billing revenue	$	49,353,084		$	1,077,141		$	69,852,030		$	7,342,812
Less: estimated contractual and other adjustments		(26,110,375	)		(578,429	)		(37,389,758	)		(3,704,527	)
Net billing revenue	$	23,242,709		$	498,712		$	32,462,272		$	3,638,285

Accounts Receivable

Accounts Receivable

Accounts receivable represent amounts due from insurance companies, through various networks, for pharmaceutical compounds delivered to patients. The Company records an allowance for doubtful accounts and contractual reimbursements based on analyses of historical collections over the expected period until such cases are closed or settled. Management also assesses specific identifiable accounts considered at risk or uncollectible. The allowance for doubtful accounts and contractual reimbursements amounted to $14,627,928 and $6,265,951 as of June 30, 2014 and December 31, 2013, respectively.

Due to the nature of the industry and the reimbursement environment in which the Company operates, certain estimates are required in order to record net revenues and accounts receivable at their net realizable values. Inherent in these estimates is the risk that they may have to be revised or updated as additional information becomes available. It is possible that management’s estimates could change, which could have an impact on operations and cash flows. Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain payers may result in adjustments to amounts originally recorded.

The Company has factored receivables to multiple agents. The receivables have been sold to factors at rates ranging from 20% to 35% of the gross billings. These receivables have been determined to have a net realizable value of approximately 46% of the gross billings for the periods ended June 30, 2014 and 2013. The difference between the estimated net realizable value of receivables and the factored amounts has been classified as financing costs under interest expense at the time of sale to the factor.

During the six months ended June 30, 2014, the Company factored $10.1 million of 2013 accounts receivable for 20% and $44.5 million of 2014 prescription sales to a factor for 20% of the gross amount resulting in net proceeds of $10.9 million. In connection with these sales, the Company recorded financing costs of $14.2 million during the six months ended June 30, 2014 within interest expense on the accompanying condensed consolidated statement of operations.

During the six months ended June 30, 2013, the Company factored $4.7 million of accounts receivable for 25-30% of the gross amount resulting in net proceeds of approximately $1.3 million. In connection with these sales, the Company recorded financing costs of approximately $851,000 during the six months ended June 30, 2013 within interest expense on the accompanying condensed consolidated statement of operations.

Shipping and Handling

Shipping and Handling

Shipping and handling costs incurred are included in general and administrative expenses. The amount of revenue received for shipping and handling is less than 0.5% of revenues for all periods presented.

Cash

Cash

The Company considers all highly liquid, income bearing investments purchased with original maturities of six months or less to be cash equivalents.

Inventory

Inventory

Inventories are stated at the lower of cost (first-in, first-out method) or market. The Company’s inventories consist of pharmaceutical ingredients used within our compounding products. The Company’s inventory for all periods presented is substantially comprised and classified as raw materials.

Property and Equipment, Net

Property and Equipment, Net

Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives. Leasehold improvements are amortized on a straight-line basis over the lesser of the useful lives or the remaining term of the lease. For tax purposes, accelerated tax methods are used. The Company expenses all purchases of equipment with individual costs of under $1,000. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized.

Debt Issuance Costs

Debt Issuance Costs

The Company capitalizes direct costs related to the issuance of debt, including finder’s fees, underwriting and legal costs. The debt issuance costs are recorded as an asset and amortized as interest expense over the term of the related debt using the straight-line method, which approximated the effective interest method. Upon the extinguishment of the related debt, any unamortized debt issuance costs are expensed as interest expense.

As of June 30, 2014 and December 31, 2013, the Company had unamortized debt issuance costs of $0 and $24,361 respectively.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company tests for impairment of its long-lived assets in accordance with Accounting Standards Codification (“ASC”) 360-10-35, Impairment or Disposal of Long-Lived Assets. Under that directive, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Such group is tested for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount.

Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.

Convertible Debt and Warrants Issued with Convertible Debt

Convertible Debt and Warrants Issued with Convertible Debt

Convertible debt is accounted for under the guidelines established by ASC 470, Debt with Conversion and Other Options and ASC 740, Beneficial Conversion Features. The Company records a beneficial conversion feature (“BCF”) when convertible debt is issued with conversion features at fixed or adjustable rates that are below market value when issued. If, however, the conversion feature is dependent upon a condition being met or the occurrence of a specific event, the BCF will be recorded when the related contingency is met or occurs. The BCF for the convertible instrument is recorded as a reduction, or discount, to the carrying amount of the convertible instrument equal to the fair value of the conversion feature. The discount is then amortized to interest over the life of the underlying debt using the effective interest method.

The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718, Compensation – Stock Compensation, except that the contractual life of the warrant is used. Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value is recorded as a debt discount or premium and is amortized over the expected term of the convertible debt to interest expense. For a conversion price change of a convertible debt issue, the additional intrinsic value of the debt conversion feature, calculated as the number of additional shares issuable due to a conversion price change multiplied by the previous conversion price, is recorded as additional debt discount and amortized over the remaining life of the debt.

The Company accounts for modifications of its BCF’s in accordance with ASC 470, Modifications and Exchanges. ASC 470 requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company utilizes ASC 820-10, Fair Value Measurement, for valuing financial assets and liabilities measured on a recurring basis. ASC 820-10 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurements. This standard applies in situations where other accounting pronouncements either permit or require fair value measurements.

ASC 820-10 requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. ASC 820-10 defines the fair value of a financial instrument as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As of June 30, 2014 and December 31, 2013, the carrying value of certain financial instruments such as accounts receivable, accounts payable and accrued expenses approximates fair value due to the short-term nature of such instruments. The notes payable and convertible notes payable also approximate fair value as the interest rate under these notes approximates the Company’s current borrowing rate.

ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes six levels of inputs that may be used to measure fair value:

Level 1:	Quoted prices in active markets for identical or similar assets and liabilities.
Level 2:	Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets and liabilities.
Level 3:	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

As of June 30, 2014 and December 31, 2013, the Company did not have any level 2 or 3 financial instruments.

Stock Based Compensation

Stock-Based Compensation

The Company accounts for its stock-based compensation in accordance ASC 718-20, Stock-based Compensation. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite vesting period.

The Company issues warrants exercisable into the Company’s common stock and preferred stock as compensation to debt holders. The fair value of each warrant is estimated on the date of grant using the Black-Scholes pricing model. Assumptions are determined at the time of grant. No warrants were granted during the six months ended June 30, 2014 and 2013.

The assumptions used in the Black Scholes models referred to above are based upon the following data: (1) The expected life of the warrant is estimated by considering the contractual term of the warrant. (2) The expected stock price volatility of the underlying shares over the expected term of the warrant is based upon historical share price data of an index of comparable publicly-traded companies. (3) The risk free interest rate is based on published U.S. Treasury Department interest rates for the expected terms of the underlying warrants. (4) Expected dividends are based on historical dividend data and expected future dividend activity. (5) The expected forfeiture rate is based on historical forfeiture activity and assumptions regarding future forfeitures based on the composition of current grantees.

Advertising Costs

Advertising Costs

The Company expenses advertising costs as incurred. For the six months ended June 30, 2014 and 2013, the Company incurred advertising costs of $0 and $80, respectively.

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes. The Company recognizes deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at currently effective tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the condensed consolidated financial statements. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. The Company classifies interest and penalties as a component of interest and other expenses. To date, there have been no interest or penalties assessed or paid.

The Company measures and records uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized.

As of the date of this report the Company is current in their income tax filings.

Concentrations, Uncertainties and Other Risks

Concentrations, Uncertainties and Other Risks

Cash and cash equivalents - Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits of $250,000 per institution that pays Federal Deposit Insurance Corporation (FDIC) insurance premiums. The Company has never experienced any losses related to these balances.

Revenues and accounts receivable - Financial instruments that potentially subject the Company to credit risk principally consist of receivables. Insurance companies account for a substantial portion of the receivables. This risk is limited due to the ability to factor and the number of insurance companies comprising the Company’s customer base and their geographic dispersion. For the six months ended June 30, 2014 and 2013, no single customer represented more than 10% of revenues or accounts receivable, net.

The majority of the Company’s accounts receivable arise from product sales and are primarily due from government agencies and managed health care providers. The Company monitors the financial performance and creditworthiness of its customers so that it can properly assess and respond to changes in their credit profile. Conditions in the normal course of business, including inherent variability of timing of cash receipts, have resulted in, and may continue to result in, an increase in the average length of time that it takes to collect accounts receivable outstanding. For accounts receivable that are held and not factored, the Company does not expect to have write-offs or adjustments to accounts receivable which could have a material adverse effect on its consolidated financial position, results of operations or cash flows as the portion which is deemed uncollectible is already taken into account when the revenue is recognized.

During the six months ended June 30, 2014 and 2013, revenues generated from sales of compounding pharmaceutical products primarily to worker’s compensation patients represented 100% of total revenues. The Company revenues are generated from sales of compounding pharmaceutical products primarily to worker’s compensation patients, located primarily throughout Southern California. At times the collection on these receivables can take in excess of one year, during which the Company, at times, attends legal hearings, files liens to securitize claims, negotiates before worker’s compensation administrative judges, resolves liens with stipulations and orders for defendants to pay, and transmits demands to settle liens filed with the adjuster or defense attorneys.

During the six months ended June 30, 2014 and 2013, two consultants made up substantially 100% of the Company’s selling and marketing expense, one of which is a related party. Management believes the loss of these consultants to this organization would have a material impact on the Company’s consolidated financial position, results of operations, and cash flows. For the six months ended June 30, 2014 and 2013, the consultants earned $20,077,336 and $759,456, respectively. Of the 2014 amounts, $8,779,250 consisted of stock-based compensation. The amounts payable at June 30, 2014 and December 31, 2013 were $5,542,017 and $1,411,493, respectively. The terms of each contract entitled the consultant to receive an amount ranging from 13% to 17.5% of the gross prescription sales generated. The Company estimates that these two consultants generated almost 100% of the revenue for each period presented. In addition, on March 31, 2014, we added one of these consultants to the Company’s Board of Directors.

The pharmaceutical industry is highly competitive and regulated, and our future revenue growth and profitability is dependent on our timely product development, ability to retain proprietary formulas, and continued compliance. The compounding, processing, formulation, packaging, labeling, testing, storing, distributing, advertising and sale of the Company’s products are subject to regulation by one or more U.S. and California agencies, including the Board of Pharmacy, the Food and Drug Administration, the Federal Trade Commission, and the Drug Enforcement Administration as well as several other state and local agencies in localities in which the Company’s products are sold. In addition, the Company compounds and markets certain of its products in accordance with standards set by organizations, such as the United States Pharmacopeia Convention, Inc. The Company believes that its policies, operations and products comply in all material respects with existing regulations. The healthcare reform and a reduction in the coverage and reimbursement levels by insurance companies and government agencies and/or a change in the regulations or compliance with related agencies and/or a disruption in the Company’s ability to maintain its competitiveness may have a material impact on the Company’s consolidated financial position, results of operations, and cash flows.

Vendors - As of June 30, 2014 and December 31, 2013, two suppliers made up substantially 100% of the Company’s direct materials. Management believes the loss of either supplier to this organization would have a material impact on the Company’s consolidated financial position, results of operations, and cash flows. If the Company’s relationship with one of its vendors was disrupted, the Company could have temporary difficulty filling prescriptions for worker’s compensation related drugs until a replacement wholesaler agreement was executed, which would negatively impact the business. For the six months ended June 30, 2014 and 2013, expenses incurred for pharmaceutical compounding materials obtained from vendors were $952,813, and $137,619, respectively. The amounts payable at June 30, 2014 and December 31, 2013 for such costs were approximately $74,000 and $59,000, respectively.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

There are no recently issued accounting pronouncements or standards updates that the Company has yet to adopt that are expected to have a material effect on its financial position, results of operations, or cash flows.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 19, 2014
Document And Entity Information
Entity Registrant Name	Praxsyn Corp
Entity Central Index Key	0001346973
Document Type	10-Q
Document Period End Date	Jun. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		343,954,384
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2014

XML

Description of the Business (Tables)

6 Months Ended

Jun. 30, 2014

Description Of Business Tables

Schedule of Assets and Liabilities

The following is a schedule of Praxsyn’s assets and liabilities at March 31, 2014:

	March 31, 2014
ASSETS:
Cash	$	485,012
Fixed assets		5,184
Total assets:		490,196
LIABILITIES:
Accounts payable		362,582
Accrued expenses		588,401
Accrued interest		96,362
Settlement liability		289,398
Convertible debentures		377,400
Liabilities of discontinued operations		961,831
Total liabilities		2,675,974
Net liabilities assumed	$	(2,185,778	)

Summary of Pro Forma Combined

The following unaudited pro forma information was prepared as if the acquisition had taken place at the beginning of the period for the six month periods ended June 30, 2014 and 2013:

	Pro-Forma Combined
	Six Months Ended June 30, 2014			Six Months Ended June 30, 2013
Revenue	$	32,462,272		$	3,638,285
Net loss from continuing operations		(21,281,838	)		(6,401,952	)
Net loss	$	(21,285,286	)	$	(6,437,875	)
Net loss per share, basic and diluted	$	(0.09	)	$	(0.07	)

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Condensed Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Statement [Abstract]
Net revenues	$ 23,242,709	$ 498,712	$ 32,462,272	$ 3,638,285
Cost of net revenues	975,134	156,156	1,306,917	328,811
Gross profit	22,267,575	342,556	31,155,355	3,309,474
Operating expenses:
General and administrative (includes stock-based compensation of $21,317 and $0, $121,317 and $0, for the three and six months ended June 30, 2014, and 2013, respectively)	982,224	275,179	1,582,177	674,662
Sales and marketing (includes stock-based compensation of $4,975,951 and $0, $8,779,250 and $0, for the three and six months ended June 30, 2014, and 2013, respectively)	12,696,619	37,910	20,077,336	759,456
Total operating expenses	13,678,843	313,089	21,659,513	1,434,118
Operating income	8,588,732	29,467	9,495,842	1,875,356
Other income and (expense):
Interest expense	(9,558,629)	(689,554)	(15,266,695)	(1,367,901)
Warrant modification expense			(7,111,444)
Other gain or loss, net	188,973		88,973
Other income (expense), net	(9,369,656)	(689,554)	(22,289,166)	(1,367,901)
Income (loss) from operations before income taxes	(780,924)	(660,087)	(12,793,324)	507,455
Provision (benefit) for income taxes		(462,923)		355,881
Net income (loss)	$ (780,924)	$ (197,164)	$ (12,793,324)	$ 151,574
Weighted average number of common shares outstanding:
Basic	304,290,027		153,749,151
Diluted	304,290,027		153,749,151	332,309,958
Net income (loss) income per share:
Basic	$ 0.00		$ (0.08)
Diluted	$ 0.00		$ (0.08)

XML

Stockholders' Deficit

6 Months Ended

Jun. 30, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Deficit

5. STOCKHOLDERS’ DEFICIT

Common Stock

The Company is authorized to issue 1,400,000,000 shares of no par value common stock. There were 327,454,384 and zero shares of common stock outstanding as of June 30, 2014 and December 31, 2013, respectively. The holders of common stock are entitled to one vote per share on all matters submitted to a vote of stockholders and are not entitled to cumulate their votes in the election of directors. The holders of common stock are entitled to any dividends that may be declared by the Board of Directors out of funds legally available therefore subject to the prior rights of holders of any outstanding shares of preferred stock and any contractual restrictions against the payment of dividends on common stock. In the event of liquidation or dissolution of the Company, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any outstanding shares of preferred stock. Holders of common stock have no preemptive or other subscription rights and no right to convert their common stock into any other securities.

On April 29, 2014, the Company issued to a vendor, for services rendered, 196,167 common shares in lieu of payment of $20,588. The number of shares issued was based on the value of the services and the closing stock price on the day of issuance.

Series D Preferred Stock

On December 30, 2013, the Company filed an amended and restated Certificate of Designations of Preferences, Rights and Limitations of Series D Preferred Stock (the “Certificate of Designations D”) with the Secretary of State of the State of Illinois that designated 500,000 such shares as Series D Preferred Stock (the “Series D Stock”). A summary of the Certificate of Designations is set forth below:

Ranking The Series D Stock ranks, with respect to rights upon liquidation, winding-up or dissolution, (i) senior to the Common Stock, (ii) equal to the Series B Convertible Preferred Stock, (iii) senior to any and all other classes or series of preferred stock of the Company whether authorized now, or at any time in the future, unless any such subordination to any other class or series of Preferred Stock, is expressly agreed to, pursuant to an affirmative vote or written consent of holders of at least sixty-seven percent (67%) of the Series D Stock issued and outstanding at the time of any such vote or written consent. and (iv) junior to any and all existing and future indebtedness of the Company.

Right of Conversion Any holder of Series D Stock shall have the right to convert any or all of the holder’s Series D Stock into a number of fully paid and non-assessable shares of common stock for each share of Series D Stock so converted. The number of shares of common stock to be issued shall be 1,000 common shares for each Series D Stock share converted. In no event, shall a holder of any Series D Stock be allowed to convert such shares of Series D Stock into common stock which, upon giving effect to such conversion, would cause the aggregate number of shares of common stock beneficially owned by the holder, and/or its affiliates, to exceed four and nine tenths percent (4.9%) of the currently issued and outstanding shares of the Corporation.

Dividends Series D Stock shall not be entitled to dividends.

Liquidation In the event of any liquidation, dissolution or winding-up of the affairs of the Corporation (collectively, a “Liquidation”), the sole participation to which the holders of shares of Series D Stock then issued and outstanding (the “Series D Stockholders”) shall be entitled, out of the assets of the Corporation legally available for distribution to its stockholders, whether from capital, surplus or earnings, to receive, before any payment shall be made to the holders of the common stock or any other class or series of preferred stock ranking on Liquidation junior to such Series D Stock, an amount per share equal to $40 (forty dollars). If upon any such Liquidation, the remaining assets of the Corporation available for distribution to its shareholders shall be insufficient to pay the Holders of shares of Series D Stock the full amount to which they shall be entitled, the Holders of shares of Series D Stock, and of any class or series of stock ranking upon liquidation on a parity with the Series D Stock, shall share pari passu in any distribution of the remaining assets and funds of the Corporation in proportion to the respective liquidation amounts that would otherwise be payable to the holders of preferred stock with respect to the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. Liquidation preference at June 30, 2014 and December 31, 2013 is $20,000,000 and $0, respectively.

On January 23, 2014, the Company entered into an agreement with its primary marketing consultant, Trestles Pain Management Specialists, LLC (“TPS”), whereby Praxsyn has agreed to issue 166,664 (or 1/3) of the 500,000 shares of Praxsyn Series D preferred stock issued in connection with the merger that occurred on March 31, 2014. The shares are in exchange for future services with the Company on a performance basis. Per the agreement, 41,666 shares were issued upon execution of the agreement on January 23, 2014. The remaining shares will be issued based on referred prescriptions, at a rate of 1,000 Series D shares per $1 million in net billable revenues, beginning in February 2014. Shares due for the period of February through June 2014 were to be issued on June 30, 2014. Thereafter, the remaining net shares due will be issued on a monthly basis at the same rate of 1,000 Series D shares for each $1 million net referred prescription revenues. As of June 30, 2014, the Company has recorded $7,779,250 in additional marketing expense in conjunction with the 123,832 Series D shares earned on $69,773,034 of qualified billable gross revenues. The number of shares to shares to be issued was calculated on a monthly basis by dividing an amount equal to the revenue generated from qualified referrals within that month by 1 million. The shares to be issued were then valued by multiplication by a factor equal to the average stock price at closing for each trading day within that month. As additional compensation, the Company also pays TPS 17.5% of the gross amount of qualified prescriptions billed and shipped by the Company. Effective for the month of June 2014, and going forward, TPS has agreed to a lowered referral fee rate of 13% for any qualified prescriptions billed and shipped by the Company that are subsequently factored at 20% of gross value or lower.

On March 10, 2014, as amended on May 1, 2014, the Company entered into an agreement with a third party note and common stock holder to repurchase 7,504 Series D shares for approximately $66.63 per share totaling $500,000, the shareholders’ initial purchase price. See also Note 7 for further information.

On March 31, 2014, the Company entered into a Note Conversion Agreement whereby 1,094 Series D shares were exchanged for the $145,334 combined promissory notes authorized from the July 1, 2012 Note Agreement and Subscription Agreement and related accrued interest.

As of June 30, 2014, 500,000 shares of Series D Stock were issued, with 457,168 outstanding. There were 42,832 shares of Series D that have been committed but not yet earned by TPS. See above and Note 1 for additional information.

Series B Preferred Stock

On March 15, 2013, the Company filed an amended and restated Certificate of Designations of Preferences, Rights and Limitations of Series B Preferred Stock (the “Certificate of Designations B”) with the Secretary of State of the State of Illinois that designated 80,000 such shares as Series B Preferred Stock (the “Series B Stock”). A summary of the Certificate of Designations is set forth below:

Ranking The Series B Stock ranks, with respect to rights upon liquidation, winding-up or dissolution, (i) senior to the common stock, Series A and C Preferred Stock, and any other classes of stock or series of preferred stock of the Company whether authorized now, or at any time in the future, unless any such subordination to any other class or series of Preferred Stock, is expressly agreed to, pursuant to an affirmative vote or written consent of holders of at least sixty-seven percent (67%) of the Series B Stock issued and outstanding at the time of any such vote or written consent. and (ii) junior to any and all existing and future indebtedness of the Company.

Right of Conversion Any holder of Series B Stock shall have the right to convert any or all of the holder’s Series B Stock into a number of fully paid and non-assessable shares of common Stock for each share of Series B Stock so converted. The number of shares of common stock to be issued shall be the number that is equal to 0.001% of the number of shares of the common stock that would be issued and outstanding after the hypothetical conversion and issuance of all of the outstanding shares of any and all classes of convertible stock and/or any and all other convertible debt instruments, options and/or warrants outstanding at the time of conversion (the “Conversion Ratio”). In no event shall the Conversion Ratio be less than four thousand, three hundred (4,300) shares of common stock and in no event shall the Conversion Ratio be more than ten thousand (10,000) shares of Common Stock.

Dividends Series B Stock shall not be entitled to dividends.

Liquidation In the event of any liquidation, dissolution or winding-up of the affairs of the Corporation (collectively, a “Liquidation”), the sole participation to which the holders of shares of Series B Stock then issued and outstanding (the “Series B Stockholders”) shall be entitled, out of the assets of the Corporation legally available for distribution to its stockholders, whether from capital, surplus or earnings, to receive, before any payment shall be made to the holders of the common stock or any other class or series of preferred stock ranking on Liquidation junior to such Series B Stock, an amount per share equal to $30 (thirty dollars). If upon any such Liquidation, the remaining assets of the Corporation available for distribution to its shareholders shall be insufficient to pay the Holders of shares of Series B Stock the full amount to which they shall be entitled, the holders of shares of Series B Stock, and of any class or series of stock ranking upon liquidation on a parity with the Series B Stock, shall share pari passu in any distribution of the remaining assets and funds of the Corporation in proportion to the respective liquidation amounts that would otherwise be payable to the holders of preferred stock with respect to the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

For the six months ended June 30, 2014, shareholders elected to convert 1,850 Series B preferred shares into 18,500,000 common shares. As of June 30, 2014, 70,565 shares of Series B Stock were outstanding.

Series C Preferred Stock

On May 15, 2013, the Company filed a Certificate of Designations of Preferences, Rights and Limitations of Series C Preferred Stock (the “Certificate of Designations C”) with the Secretary of State of the State of Illinois that designated 50,000 such shares as Series C Preferred Stock (the “Series C Stock”). A summary of the Certificate of Designations is set forth below:

Ranking The Series C Stock ranks, with respect to rights upon liquidation, winding-up or dissolution, (i) senior to the common stock, Series A Preferred Stock, and any other classes of stock or series of preferred stock of the Company whether authorized now, or at any time in the future, unless any such subordination to any other class or series of Preferred Stock, is expressly agreed to, pursuant to an affirmative vote or written consent of holders of at least sixty-seven percent (67%) of the Series C Stock issued and outstanding at the time of any such vote or written consent. and (ii) junior to Series C Preferred Stock, and any and all existing and future indebtedness of the Company.

Right of Conversion Any holder of Series C Stock shall have the right to convert any or all of the holder’s Series C Stock into a number of fully paid and non-assessable shares of common stock for each share of Series C Stock so converted. The number of shares of common stock shares that is equal to ninety percent (66%) of the lowest closing price of the common stock, as quoted on any exchange or market upon which the common stock is traded over the sixty (60) calendar days preceding the date the Corporation and the holder enter into an agreement to issue for shares of Series C Stock, for each share of Class C Stock being converted, provided, however, such ratio shall not be less than $0.005 nor more than $.01.

Dividends Series C Stock shall not be entitled to dividends.

Liquidation In the event of any liquidation, dissolution or winding-up of the affairs of the Corporation (collectively, a “Liquidation”), the sole participation to which the holders of shares of Series C Stock then issued and outstanding (the “Series C Stockholders”) shall be entitled, out of the assets of the Corporation legally available for distribution to its stockholders, whether from capital, surplus or earnings, to receive, before any payment shall be made to the holders of the common stock or any other class or series of preferred stock ranking on Liquidation junior to such Series C Stock, an amount per share equal to $100 (one hundred). If upon any such Liquidation, the remaining assets of the Corporation available for distribution to its shareholders shall be insufficient to pay the holders of shares of Series C Stock the full amount to which they shall be entitled, the holders of shares of Series C Stock, and of any class or series of stock ranking upon liquidation on a parity with the Series C Stock, shall share pari passu in any distribution of the remaining assets and funds of the Corporation in proportion to the respective liquidation amounts that would otherwise be payable to the holders of preferred stock with respect to the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

For the six months ended June 30, 2014, shareholders elected to convert 700 Series C preferred shares into 14,000,000 common shares. As of June 30, 2014, 545 shares of Series C Stock were outstanding.

Series A Preferred Stock

On May 27, 2011, the Company filed an amended and restated Certificate of Designations of Preferences, Rights and Limitations of Series A Preferred Stock (the “Certificate of Designations”) with the Secretary of State of the State of Illinois that designated 500 such shares as Series A Preferred Stock (the “Preferred Stock”). A summary of the Certificate of Designations is set forth below:

Ranking The Preferred Stock ranks, with respect to rights upon liquidation, winding-up or dissolution, (i) senior to the common stock and (ii) junior to Series B and C Stock and any other series of preferred stock, and any and all existing and future indebtedness of the Company.

No right of Conversion Series A Stock is not convertible into common stock.

Dividends and Other Distributions Commencing on the date of issuance of any such shares of Preferred Stock, holders of Preferred Stock shall be entitled to receive dividends on each outstanding share of Preferred Stock, which shall accrue at a rate equal to 10% per annum from the date of issuance. Accrued dividends shall be payable upon redemption of the Preferred Stock. So long as any shares of Preferred Stock are outstanding, no dividends or other distributions may be paid, declared or set apart with respect to any junior securities other than dividends or other distributions payable on the common stock solely in the form of additional shares of common stock. After payment of dividends at the annual rates set forth above, any additional dividends declared shall be distributed ratably among all holders of Preferred Stock and common stock in proportion to the number of shares of common stock that would be held by each such holder of Preferred Stock as if the Preferred Stock were converted into common stock by taking the Series A Liquidation Value (as defined below) divided by the market price of one share of common stock on the date of distribution.

Liquidation Upon any liquidation, dissolution or winding up of the Company after payment or provision for payment of debts and other liabilities of the Company and any liquidation preferences to the senior securities. Series B and C Preferred Stock has liquidation preference to the Series A Preferred Stock. Before any distribution or payment is made to the holders of any junior securities, the holders of Preferred Stock shall first be entitled to be paid out of the assets of the Company available for distribution to its stockholders an amount with respect to the Series A Liquidation Value, after which any remaining assets of the Company shall be distributed ratably among the holders of the Preferred Stock and the holders of junior securities, as if the Preferred Stock were converted into Common Stock by taking the Series A Liquidation Value divided by the market price of one share of Common Stock on the date of distribution.

Redemption The Company may redeem, for cash or by an offset against any outstanding note payable from Socius to the Company that was issued by Socius CG II, Ltd. (“Socius”), any or all of the Preferred Stock at any time at a redemption price per share equal to $10,000 per share of Preferred Stock, plus any accrued but unpaid dividends with respect to such share of Preferred Stock (the “Series A Liquidation Value”).

On June 2, 2011, the Company’s Board of Directors designated 1,200,000 shares as Series A Preferred Stock. As of June 30, 2014, no shares of Preferred Stock were outstanding.

Warrants

On March 17, 2014, all of the PDC and its wholly-owned California Corporation subsidiary Mesa Pharmacy, Inc. outstanding warrants were exchanged for PDC common stock. The Company converted all common and preferred warrants, whether expired or not, into common stock without consideration for the strike price upon the terms and provisions set forth in the warrant agreements. The conversion resulted in an issuance of 155,823 Series D shares. This conversion was treated as a modification of the exercise price of the warrants. Accordingly, the warrants were revalued on the conversion date, resulting in a loss of $7,111,444 being recorded within the accompanying condensed consolidated statement of operations. Subsequent to the March 17, 2014 conversion, zero warrants for PDC common or preferred stock remained outstanding.

The warrants were revalued upon modification of the exercise price using the Black-Scholes option pricing model using the following assumptions:

	June 30, 2014
Annual dividend yield		-
Expected life in years		0 - 8.7 Years
Risk-free interest rate		.003% - .25	%
Expected volatility		75	%

Socius CG II, Ltd. Financing

On June 30, 2014, there were 40,953,414 Socius warrants outstanding. They have an expiration date of June 3, 2016 and exercise prices ranging from $0.01-$1.02.

Stock Incentive Plan

The Company assumed The PAWS Pet Company’s 2010 adopted Stock Incentive Plan (the “Plan”). Under the Plan, at June 30, 2014, we had 4,000,000 shares approved and reserved for the issuance of stock options to employees, officers, directors and outside advisors. Under the Plan, the options may be granted to purchase shares of common stock at fair market value at the date of grant.

At June 30, 2014, the Company had 367,000 option shares outstanding, and 3,633,000 available for issuance.

The Company also assumed The PAWS Pet Company’s February 9, 2012 adopted 2012 Stock Incentive Plan (the “2012 Plan”). Under the 2012 Plan the Company had 10,000,000 shares and shares underlying stock options approved and reserved for the issuance to employees, officers, directors and outside advisors. At June 30, 2014, the Company had 6,170,950 shares issued under the 2012 Plan and 3,829,050 available for issuance.

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Notes and Debentures Payable

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Notes and Debentures Payable

4. NOTES AND DEBENTURES PAYABLE

The Company’s outstanding notes payable consisted of the following:

	June 30, 2014				December 31, 2013
	Principal		Accrued Interest		Principal			Accrued Interest
Non-related parties:
2007 - 2009 Convertible Notes	$	397,000	$	97,254	$	497,000		$	78,083
2010 Profit Sharing Notes		175,000		262,173		675,000			383,163
2010 and 2011 Secured Bridge Notes		449,275		79,403		449,275			72,901
2012 Convertible Promissory Notes		3,175,125		682,553		3,299,875			410,174
Unsecured Promissory Notes		782,782		36,466		817,366			5,793
Convertible Debentures		325,000		101,093		-			-
Less: Discounts on Notes Payable		-				(98,922	)
Subtotal non-related parties		5,304,182		1,258,942		5,639,594			950,114
Related parties:
2007 - 2009 Convertible Notes		152,500		75,956		152,500			43,300
2012 Convertible Promissory Notes		150,000		8,588		150,000			18,000
Unsecured Promissory Notes		146,667		3,019		-			-
Convertible Notes		52,400		2,486		-			-
Note Payable Due to Officer		-		-		104,164			-
Subtotal related parties		501,567		90,049		406,664			61,300
Total		5,805,749		1,348,991		6,046,258			1,011,414
Current Portion		5,805,749		1,348,991		6,046,258			1,011,414
Long-term Portion	$	-	$	-	$	-		$	-

Discounts

During the six months ended June 30, 2014 and 2013, the Company amortized $98,922 and $61,203, respectively, of the discount to interest expense. As of June 30, 2014 and December 31, 2013, unamortized discounts were $0 and $98,922, respectively.

Debt Issuance Costs

In connection with various notes payable discussed below, the Company paid issuance costs to third parties in connection with the notes payable. As of June 30, 2014 and December 31, 2013, the Company had unamortized debt issuance costs of $0 and $24,361, respectively.

2007 - 2009 Convertible Notes

The 2007 – 2009 Convertible Notes were initially issued in 2007 to 2009 to a series of individuals, including a related party who is a relative of the founder of the PDC control group. These notes are unsecured. The non-related notes in this category bear interest rates ranging from 18% to 33% per annum and the related party notes bear interest rates ranging from 18% to 48% per annum. All notes in this category, which were originally written on PDC, contained a provision allowing for conversion into common stock only if PDC became a public entity. This conversion provision allowed for the conversion of all unpaid principal and accrued interest at the rate of the average closing price of the common stock for the 10 days prior to conversion.

Upon finalization of the merger on March 31, 2014, as discussed in Note 1, the remaining notes were rewritten and the conversion feature modified to allow for conversion into one share one (1) share of Series D Preferred Stock for each One Hundred Dollars ($100) of unpaid principal and interest. The modification of the conversion feature created a beneficial conversion feature (“BCF”) and, as of the date of measure of March 31, 2014, the BCF in the amount of $16,138 was recorded to interest expense. Also on March 31, 2004, we entered into a Note Conversion Agreement with a shareholder and holder of one of the 2007 – 2009 Convertible Notes with a principal amount of $100,000. Under the conversion agreement, the principal was converted into 1,505 shares of Series D Preferred Stock and we issued a new Unsecured Promissory Note for the remaining balance of accrued and unpaid interest totaling $20,833 which was paid down to $10,417 as of June 30, 2014. See Unsecured Promissory Notes section below. As a result of this transaction, we recorded a loss on extinguishment of debt of $100,000 during the six months ended June 30, 2014.

At both June 30, 2014 and December 31, 2013, these 2007 – 2009 Convertible Notes are past-due and are reflected as current liabilities at each balance sheet date. There have been no demands for repayment or claims of default, and no conversions have taken place to date.

2010 Profit Sharing Notes

The Profit Sharing Notes were initially issued in 2010, have a term of four (4) years, and pay interest monthly on the gross receipts from workers compensation sales at rates ranging from 0.1% to 5%. These notes are collateralized by all receivables generated by sales of prescriptions.

On March 10, 2014, as amended on May 1, 2014, we finalized a settlement agreement with All American T.V., Inc. /John Casoria (“AATV”), a shareholder and a holder of one of the 2010 Profit Sharing Notes under which we, among other things, agreed to repay the note and accrued interest for a total payment of $600,000. Based on the finalized settlement agreement, we have reclassified this note to Settlement Liabilities in 2014 (see Note 7). In connection with the settlement agreement, we recorded a gain on extinguishment of debt during the three and six months ended June 30, 2014 in the amount of $180,973.

At both June 30, 2014 and December 31, 2013, these 2010 Profit Sharing Notes are past-due and are reflected as current liabilities at each balance sheet date. There have been no demands for repayment or claims of default, and no conversions have taken place to date.

2011 and 2010 Secured Bridge Notes

These Secured Bridge Notes were initially issued in 2010 and 2011, accrue a one-time flat-rate interest of 15%, and were to be repaid at the time of a major funding from a specified funding source. The notes are collateralized by all receivables generated by sales of prescriptions. At both June 30, 2014 and December 31, 2013, these 2010 and 2011 Secured Bridge Notes are reflected as current liabilities at each balance sheet date since funding from the funding source was never obtained.

2012 Convertible Promissory Notes

These Convertible Promissory Notes were issued during the second half of 2012, and have a term of four (4) years. One of these notes was issued to a related party, a relative of the founder of the PDC control group. All of these notes bear interest at 18% per annum. Each note may be converted, at the option of the note holder, at any time after the second anniversary of the note into an amount of our common shares calculated by dividing the amount to be converted by 95% of the average daily volume weighted average price during the five days immediately prior to the date of conversion, defined as the 5-day weighted average of the closing price of our common stock. As the conversion price of the Convertible Promissory Notes is not known and the notes cannot be converted for a period of two years from the date of issuance, the beneficial conversion feature, if any, will be calculated upon the contingencies being met.

On March 31, 2014, we entered into a Note Conversion Agreement with the holder of a 2012 Convertible Promissory Note in the principal amount of $124,750, whereby the 2012 Convertible Promissory Note and accrued and unpaid interest of $20,584 was exchanged for 1,094 shares of Series D Preferred Stock.

At both June 30, 2014 and December 31, 2013, we were in default of the interest payments required under the 2012 Convertible Promissory notes. Therefore these notes are reflected as current liabilities at each balance sheet date.

Unsecured Promissory Notes

On November 18, 2013, we issued an Unsecured Promissory Note with a principal amount of $772,365. This note, which was issued in exchange for previous notes payable and accrued interest, has a term of five (5) years, bears interest at 18% per annum, and requires monthly payments of $19,613. At both June 30, 2014 and December 31, 2013, we were in default of the monthly payment requirement and have therefore reflected this note as a current liability at each balance sheet date.

Effective December 31, 2014, we issued an Unsecured Promissory Note for $45,000. This note had a term of six months, had no stated interest rate, and was repayable in monthly payments of $7,500. As of June 30, 2014, this note has been repaid.

On February 20, 2014, we issued an Unsecured Promissory Note for $96,667 to a company whose managing member is a shareholder. This note had a stated interest rate of 0.5% per month (6% per annum), and a repayment period of thirty (30) days. We issued a similar Unsecured Promissory Note for $50,000 to the same company on March 11, 2014. The second note contained the same interest rate as the first and was also payable in thirty (30) days. The notes are currently past due.

On March 31, 2014, the Company issued an unsecured promissory note to a shareholder of Praxsyn for $20,833 for accrued and unpaid interest on an unpaid February 20, 2009 convertible Note Agreement of $100,000. On March 31, 2014, both parties above entered into a Note Conversion Agreement whereby 1,505 Series D shares were exchanged for the $100,000 combined promissory notes. As of June 30, 2014, the Company has paid $10,417 against the unsecured note and with the remaining $10,417 to be paid by September 30, 2014.

Convertible Debentures

The Convertible Debentures were assumed March 31, 2014 as a result of the Merger discussed in Note 1. The convertible debentures, which bear interest at 8% per annum, were due in August 2013 and are therefore past due. They are convertible into shares of our common stock at the rate of $0.50 per share. There was no activity with respect to these convertible debentures during the three months ended June 30, 2014.

Convertible Note (Related Party)

On March 5, 2014, we issued a convertible note in the amount of $42,500 to a shareholder. The convertible note, which has a stated interest rate of 6% per annum, was to be repaid in April 2014 and is therefore past due. The note is convertible at the option of the note holder into 260 shares of Series B Preferred Stock. As of June 30, 2014, the total principal amount outstanding for this note was $52,400.

Note Payable Due to Officer

These unsecured notes resulted from advances made in 2013 and 2014, primarily by our Pharmacist in Charge. All amounts, which were due with no stated interest, have been repaid by June 30, 2014.

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2014

Commitments And Contingencies Tables

Summary of settled littigation

Settlement liabilities consist of the following at:

	June 30, 2014		December 31, 2013
Myhill	$	130,000	$	200,000
Primary Care		-		48,000
Forte Capital		117,539		-
AATV		450,000		-
Total	$	697,539		248,000

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2014

Summary Of Significant Accounting Policies Tables

Schedule Of Net Revenues

Net revenues consisted of the following for the six months ended June 30, 2014 and 2013:

	Three Months Ended						Six Months Ended
	June 30, 2014			June 30, 2013			June 30, 2014			June 30, 2013
Gross billing revenue	$	49,353,084		$	1,077,141		$	69,852,030		$	7,342,812
Less: estimated contractual and other adjustments		(26,110,375	)		(578,429	)		(37,389,758	)		(3,704,527	)
Net billing revenue	$	23,242,709		$	498,712		$	32,462,272		$	3,638,285

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Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

8. NET INCOME (LOSS) PER SHARE

Basic earnings per share are calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable upon conversion of preferred shares, exercise of stock options and warrants (calculated using the treasury stock method). As of June 30, 2014 there were warrants and options outstanding to purchase 43.4 million shares, with an average exercise price of $0.68. The preferred stock common share equivalent is calculated using the four and nine tenths percent (4.9%) per shareholder limit as outlined in the Certificates of Designations. The dilutive common shares equivalents not included in the computation of diluted earnings per share, because the inclusion would be anti-dilutive are:

	June 30, 2014
	Common Share Equivalents
Convertible Notes		10,477,094
Preferred Stock		758,604,924
Options		367,000
Warrants		43,044,989
		812,494,007

If all dilutive instruments were exercised using the treasury stock method, then the total number of shares outstanding would be 759 million shares. No adjustments were required to reconcile net income as adjusted for dilutive shares from the net income as presented on the Consolidated Statement of Operations within this report.

The following table presents the breakdown of the weighted average number of dilutive shares for the six months ended June 30, 2013:

	Six Months Ended
	June 30, 2013
Weighted average number of dilutive shares:
Series D Preferred Stock		175,728,661
Series B Preferred Stock		-
Series C Preferred Stock		-
Options		-
Warrants		156,581,297
Total dilutive shares		332,309,958

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Related Party Transactions

6 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

Related Party Transactions

6. RELATED PARTY TRANSACTIONS

Related Party Convertible Notes

A relative of Bennie Birch, our founder, is the note-holder of the following instruments: $125,000 2007-2009 Convertible Note issued in April 2007 accruing interest at the rate of 48%, per annum, $112,500 2007-2009 Convertible Note issued in June 2007 accruing interest at the rate of 18%, per annum, of which $85,000 of the principal has been repaid, $150,000 2012 Convertible Promissory Note issued in July 2012 accruing interest at the rate of 18%, per annum. As of June 30, 2014 and December 31, 2013, the Company had principal amounts of $302,500 of notes held by this relative outstanding. During the six months ended June 30, 2014, and the year ended December 31, 2013, the Company paid interest amounts of $0 and $38,313, respectively, pertaining to these notes.

On March 5, 2014, the Company issued a related party convertible promissory note to a shareholder assumed from Paws Pets Company, for $42,500, with stated interest rates of 6% per annum and is convertible into 260 shares of Series B Convertible Preferred Shares. The proceeds were used for operations. As of June 30, 2014, the total principal amount outstanding to the shareholder was $52,400. Total accrued interest for this note as of June 30, 2014 is $2,486.

Related Party Notes Payable

During 2013, the Company entered into a loan agreement (the “Loan Agreement”) by and between Andrew Do, the Chief Executive Officer and a shareholder of the Company, as lender (the “Lender”), and the Company, as borrower. Pursuant to the Loan Agreement, the Lender agreed to advance to the Company a principal amount of $104,165 (the “Loan”) with no stated interest rate. The Company has promised to pay in full the outstanding principal balance of any and all amounts due under the Loan Agreement within thirty (30) days of the Company’s receipt of investment financing or a commitment from a third party to provide $1,000,000 to the Company or one of its subsidiaries (the “Due Date”), to be paid in cash. The total amount outstanding for the loan agreement above was paid in cash on May 15, 2014.

On February 28, 2014, the Company issued a related party promissory note to Andrew Do for $100,000 with no stated interest. The proceeds were used for refinancing current notes payable outstanding. The Company paid $30,000 and $70,000 in cash on April 23, 2014, and May 15, 2014, respectively.

On February 20, and March 11, 2014, the Company issued a related party promissory note to a shareholder assumed from The PAWS Pet Company for $96,667 and $50,000, respectively, with stated interest rates of 6% per annum. The proceeds were used for operations. As of June 30, 2014, the Company had a principal amount of $146,667 held by this shareholder outstanding. Total accrued interest for this note as of June 30, 2014 is $3,019.

Related Party Employees

Seven relatives of Ed Kurtz, our Director and COO, are employed by us. During the six months ended June 30, 2014 and 2013, these relatives had a total cash compensation, including base salary, bonus and other compensation, of $67,696 and $55,003; $48,000 and $39,000; $14,687 and $0; $11,229 and $0; $64,000 and $14,298; $13,550 and $6,001; $64,000 and $51,500; $9,348, and $0; $8,243 and $4,836; $5,832 and $0; $5,058 and $0; respectively.

A relative of Andrew Do, our Pharmacist in Charge, is a consultant to the Company providing management consulting and other business advisory services. During the six months ended June 30, 2014 and 2013, the consultant’s total cash compensation was $19,500 and $39,000, respectively.

Board of Directors

A member of the Board of Directors is also the owner of our primary marketing consultant, TPS. See Notes 2 and 5 for additional information.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

7. COMMITMENTS AND CONTINGENCIES

Leases

The Company leases its facilities located in Irvine, California under a rental agreement that expires on September 30, 2016. The rental agreement includes operating expenses such as common area maintenance, property taxes and insurance. Total rent expense is reflected in general and administrative expenses in the accompanying condensed consolidated statements of operations. Rental expense under operating leases during the six months ended June 30, 2014 and 2013 is $43,816 and $25,743, respectively.

In connection with its assumed, previous operations with The PAWS Pet Company, the Company leased space for certain of its offices and airport facilities under leases expiring from one month to two years after March 31, 2013. In 2012, the Company abandoned the leased properties but remain liable for unpaid rent of $360,679 which has been accrued within accounts payable and accrued liabilities of discontinued operations in the accompanying Condensed Consolidated Balance Sheet.

Litigation

The Company is involved in various lawsuits and claims regarding shareholder derivative actions, third-party billing agency actions, negligent misrepresentation, and breach of contract, that arise from time to time in the ordinary course of their business. Below is a summary of litigation activity for the six month ended June 30, 2014:

Nokley Group LLC

In February 2014 we were served with a complaint from Nokley Group LLC (“Nokley”) for breach of contract under a Fee and First Right of Refusal Agreement dated May 25, 2012 between our company and Nokley. In the complaint, which was filed in Nevada, Nokley stated, among other things, that we sold certain of our accounts receivable to factoring organizations without offering Nokley first right of refusal which they allege was required under the agreement. While we estimate we would have cross-complaints against Nokley that would significantly mitigate any potential damages, we first filed a motion to dismiss based on improper venue. On July 31, 2014, our Company and Nokley agreed to dismiss the action without prejudice, and to have each party to bear its own attorney fees and costs.

The Company estimates that the potential range of exposure for this matter, if refiled in a proper venue, is $17,000 to $30,000. As of June 30, 2014, we have accrued the minimum amount of potential exposure under our estimation that a loss would be probable.

MedCapGroup LLC

In May 2014 we were served with a complaint from MedCapGroup LLC (“MedCap”) for breach of contract, breach of covenant of good faith and fair dealing, intentional misrepresentation, fraud in the inducement, and deceptive trade practices under a November 2012 Healthcare Accounts Receivable Purchase Agreement between our company and MedCap.  MedCap alleged in its complaint that because we sell our accounts receivable based on dates of service, and not by patient, that only the original purchaser of a patient’s claims controls all payments and settlement negotiations with the insurer.  As a result, MedCap alleged that we had misrepresented the collectability of certain accounts receivable they had purchased from us and that they had therefore been damaged. While we estimate we have significant defenses against MedCap’s complaint, we first filed a motion to dismiss based on improper venue. On July 30, 2014 our motion to dismiss was granted.

The Company records accruals for such contingencies when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. As of June 30, 2014 and December 31, 2013, the Company accrues for liabilities associated with certain litigation matters if they are both probable and can be reasonably estimated. The Company has accrued for these matters and will continue to monitor each related legal issue and adjust accruals for new information and further developments in accordance with ASC 450-20-25, Contingencies. For these and other litigation and regulatory matters currently disclosed for which a loss is probable or reasonably possible, the Company is unable to determine an estimate of the possible loss or range of loss beyond the amounts already accrued. These matters can be affected by various factors, including whether damages sought in the proceedings are unsubstantiated or indeterminate; scientific and legal discovery has not commenced or is not complete; proceedings are in early stages; matters present legal uncertainties; there are significant facts in dispute; or there are numerous parties involved.

In the Company’s opinion, based on its examination of these matters, its experience to date and discussions with counsel, the ultimate outcome of legal proceedings, net of liabilities accrued in the Company’s balance sheet, is not expected to have a material adverse effect on the Company’s consolidated financial position. However, the resolution in any reporting period of one or more of these matters, either alone or in the aggregate, may have a material adverse effect on the Company’s consolidated results of operations and cash flows for that period.

Settled Litigation

Settlement liabilities consist of the following at:

	June 30, 2014		December 31, 2013
Myhill	$	130,000	$	200,000
Primary Care		-		48,000
Forte Capital		117,539		-
AATV		450,000		-
Total	$	697,539		248,000

Myhill

On August 28, 2012, we received a claim from Roger Saxton, Loren Myhill, Lucas Myhill, Beryl Myhill, and Ann Marie Kaumo (collectively the “Myhill Litigants”) seeking $358,433 for delayed public entry and illiquidity stemming from an investment made by the Myhill Litigants. On January 6, 2014, we settled with the Myhill Litigants for $200,000, $20,000 of which was payable on execution of the settlement agreement and the remainder payable at $10,000 per month over the following 18 months.

The Counsel for the Plaintiffs agreed to hold the stock certificates during pendency of the payout period. During such period, Plaintiffs shall have no right to vote such shares, transfer such shares, or encumber such shares, and will not be entitled to receive cash dividends or stock dividends or any distributions based on ownership of such shares. The Plaintiffs shall return each of their stock certificates to the Company with a full executed stock power sufficient to transfer such shares. In the event of any transaction by the Company, including merger or buyout, that results in Plaintiffs’ shares of PDC to be converted to shares of another entity, such obligations and restrictions stated herein shall apply to such new or different shares.

Primary Care

In December 2009, we entered into an agreement with Primary Care Management Services (“Primary Care”) under which Primary Care would provide services consisting of billing to and collection from various insurance carriers for our products. Primary Care was to be compensated by a rate equaling two percent of the amounts billed on our behalf. In April 2012, we entered into a settlement agreement with Primary Care, who by that time had billed in excess of $10 million which it had been unable to collect. Under the settlement agreement, we agreed to pay Primary Care $92,000, $20,000 of which was payable immediately and the remainder payable at $2,000 per month over the following 36 months.

On May 15, 2014 we entered into a new settlement agreement with Primary Care under which we paid them $40,000 in full satisfaction of all remaining amounts owed them. In connection with this new settlement agreement, we recorded a gain on extinguishment of debt in the amount of $8,000 during the three and six months ended June 30, 2014.

Forte Capital

This obligation was assumed on March 31, 2014 in the amount of $289,398 as a result of the Merger discussed in Note 1. The obligation arose from a March 2014 agreement with Forte Capital Partners, LLC under which we agreed to repay amounts outstanding under a 14% convertible debenture with a total of 14,351,322 shares of our common stock, issuable in six monthly installments of 2,391,887 shares beginning in March 2014. During the three months ended June 30, 2014, we issued a total of 7,175,661 shares which reduced this obligation. As of August 19, 2014, we have issued all shares required under the agreement with Forte Capital and no further amounts are owed.

AATV

As discussed in Note 5, on May 1, 2014, we finalized a settlement agreement with AATV. Under the finalized agreement, we agreed to pay AATV $1,100,000 for the following:

● $600,000 for the full repayment of principal and accrued interest on a Profit Sharing Note, $100,000 of which was paid in March 2014 (see Note 4).

● $500,000 for the repurchase of 7,504 Series D Preferred shares, representing the amount of AATV’s original investment (see Note 5).

Through June 30, 2014, we had repaid $650,000 of our obligation to AATV. In July 2014, we repaid an additional $350,000. As of August 19, 2014, the Company has a remaining obligation of $100,000.

Other Commitments and Contingencies

There are various other pending legal commitments and contingencies involving the Company, principally material breach of contract, and committed shares with consultants that were never issued. While it is not feasible to predict the outcome of such commitments, threats, and potential liabilities, in the opinion of the Company, either the likelihood of loss is remote or any reasonably possible loss associated with the resolution of such obligations is not expected to be material to the Company’s financial position, results of operations or cash flows either individually or in the aggregate. In the opinion of their legal counsel, the Company has filed cross complaints which should mitigate some Company liability.

Consulting Agreements – On August 12, 2010, the Company entered into a consulting service agreement with a financial advisor. The financial advisor assists companies in private placements, recapitalization, and restructuring. The term of the agreement was for thirty-six months or upon termination by either party. The financial advisor was entitled to $350,000, payable in installments of which only $250,000 was paid prior to termination, and issue warrants to purchase up to ten percent (10%) of the Company on a fully-diluted basis at an exercise price of $0.50 per share. As of August 12, 2010, the Company had approximately 7 million fully diluted shares outstanding. The Company terminated this service agreement in January 2012 without ever issuing the warrants. As of June 30, 2014, the Company believes that no additional amounts agreed to under the agreement are required as the services were never provided. In addition, the Company has received no demands for any additional amounts or warrants.

On April 25, 2011, the Company entered into a consulting service agreement with a law firm. The law firm assists companies in S-1 Registration statement (“S-1”), responses to SEC comments, and FINRA requirements. Either party may terminate the agreement at any time. In connection, with filing an S-1, the law firm was potentially entitled to 75,000 shares of common stock and $25,000 upon execution of the agreement and $15,000 upon filing the S-1 The Company has opted to enter the public market by means unrelated to filing an S-1, thus, the Company intends to terminate the agreement without issuing the potentially committed shares. As of June 30, 2014, the Company believes that no additional amounts agreed to under the agreement are required as the services were never provided.

Stock Issuance to Former Officers – On March 26, 2014, the Company issued 60,000,000 common shares to two former officers of the Company for cancellation of accrued and unpaid wages and the agreement to purchase the Company’s interest in Pet Airways, Inc. The sale of Pet Airways, Inc. was to relieve the Company of debts totaling $961,831. As of June 30, 2014, the Company recognized these liabilities under Liabilities of discontinued operations, on the Condensed Consolidated Balance Sheet, as the amount is in dispute.

Legal Proceeding Related to Discontinued Operations

Described below are material pending legal proceedings (other than ordinary routine litigation incidental to the Company’s business), material proceedings known to be contemplated by governmental authorities, other proceedings arising under federal, state, or local environmental laws and regulations (including governmental proceedings involving potential fines, penalties, or other monetary sanctions in excess of $10,000) and such other pending matters that we may determine to be appropriate. These legal proceedings were assumed from The PAWS Pet Company and are included in Liabilities of discontinued operations on the June 30, 2014 Condensed Consolidated Balance Sheet.

On April 26, 2012, a judgment was entered against our subsidiary, Pet Airways, Inc., in Circuit Court in and for Palm Beach County, Florida by Sky Way Enterprises, Inc. in the sum of $180,827 for services rendered, damages, including costs, statutory interest and attorneys’ fees.

On March 4, 2013, a judgment was entered against our subsidiary, Pet Airways, Inc., in District Court of Douglas County, Nebraska by Suburban Air Freight in the sum of $87,491 for services rendered, including statutory interest and attorneys’ fees.

On March 6, 2013, an order was issued a by the labor commissioner of the State of California for our subsidiary, Pet Airways, Inc., to pay a former employee Alyce Tognotti wages and penalties in the sum of $17,611 for services rendered, including penalties, statutory interest and liquidated damages.

On May 31, 2013, a motion for final judgment was filed against our subsidiary, Pet Airways, Inc., in Circuit Court in and for Broward County, Florida by AFCO Cargo BWI, LLC in the sum of $31,120 for services rendered, including statutory interest and attorneys’ fees.

Other than the foregoing, there were no claims, actions, or lawsuits which to our knowledge are pending or threatened that could reasonably be expected to have a material effect on the results of our operations. The Company is self-insured and has not accrued a reserve against potential losses from unknown risks and liabilities.

HIPAA

The Health Insurance Portability and Accountability Act (“HIPAA”) was enacted on August 21, 1996, to assure health insurance portability, reduce healthcare fraud and abuse, guarantee security and privacy of health information, and enforce standards for health information. Organizations are required to be in compliance with HIPAA provisions by April 2005. Effective August 2009, the Health Information Technology for Economic and Clinical Health Act (“HITECH Act”) was introduced imposing notification requirements in the event of certain security breaches relating to protected health information. Organizations are subject to significant fines and penalties if found not to be compliant with the provisions outlined in the regulations. The Company continues to be in compliance with HIPAA as of September 30, 2013.

The Company’s decision to obtain insurance coverage is dependent on market conditions, including cost and availability, existing at the time such decisions are made. The Company has evaluated its risks and has determined that the cost of obtaining product liability insurance outweighs the likely benefits of the coverage that is available and, as such, has no insurance for certain product liabilities effective May 1, 2006.

The Company believes that there are no compliance issues associated with applicable pharmaceutical laws and regulations that would have a material adverse effect on the Company.

The Company is subject from time to time to various claims and lawsuits and governmental investigations arising in the ordinary course of our business. While the Company’s management cannot predict the outcome of these claims with certainty, the Company’s management does not believe that the outcome of any of these legal matters will have a material effect on its financial statements.

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Subsequent Events

6 Months Ended

Jun. 30, 2014

Subsequent Events [Abstract]

Subsequent Events

9. SUBSEQUENT EVENTS

In July 2014, shareholders elected to convert 1,000 Series B preferred shares to 10,000,000 common shares and 325 Series C preferred shares to 6,500,000 common shares.

As of July 30, 2014, an additional 21,062 Series D shares have been issued to TPS since June 30, 2014 from the remaining number of shares reserved as discussed in Note 5.

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Stockholders' Deficit (Details Narrative) (USD $)

3 Months Ended

6 Months Ended

6 Months Ended

3 Months Ended

0 Months Ended

3 Months Ended

6 Months Ended

0 Months Ended

6 Months Ended

0 Months Ended

0 Months Ended

0 Months Ended

0 Months Ended

6 Months Ended

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Dec. 31, 2013

Jun. 02, 2011

Jun. 30, 2014

Stock Incentive Plan [Member]

Jun. 30, 2014

2012 Stock Incentive Plan [Member]

Feb. 09, 2012

2012 Stock Incentive Plan [Member]

Jun. 30, 2014

Subsequently Factored [Member]

Mar. 17, 2014

Series D Preferred Stock [Member]

Feb. 28, 2014

Series D Preferred Stock [Member]

Mar. 31, 2014

Series D Preferred Stock [Member]

Jun. 30, 2014

Series D Preferred Stock [Member]

Jun. 30, 2014

Series B Preferred Stock [Member]

Jun. 30, 2014

Common Stock [Member]

Jun. 30, 2014

Series C Preferred Stock [Member]

Jun. 30, 2014

Series A Preferred Stock [Member]

Jan. 23, 2014

Performance Basis Agreement [Member]

Mar. 10, 2014

Amended on May 1, 2014 [Member]

Series D Preferred Stock [Member]

Jan. 23, 2014

Trestles Pain Management Specialists LLC [Member]

Dec. 30, 2013

Series D Preferred Stock [Member]

Jun. 30, 2014

Series D Preferred Stock [Member]

Jan. 23, 2014

Series D Preferred Stock [Member]

Dec. 31, 2013

Series D Preferred Stock [Member]

Mar. 31, 2014

Series D Preferred Stock [Member]

Note Conversion Agreement [Member]

Jun. 30, 2014

Series D Preferred Stock [Member]

Trestles Pain Management Specialists LLC [Member]

May 15, 2013

Series B Preferred Stock [Member]

Jun. 30, 2014

Series B Preferred Stock [Member]

Dec. 31, 2013

Series B Preferred Stock [Member]

May 15, 2013

Series C Preferred Stock [Member]

Jun. 30, 2014

Series C Preferred Stock [Member]

Dec. 31, 2013

Series C Preferred Stock [Member]

Jun. 30, 2014

Series A Preferred Stock [Member]

Dec. 31, 2013

Series A Preferred Stock [Member]

Dec. 31, 2012

Series A Preferred Stock [Member]

May 27, 2011

Series A Preferred Stock [Member]

Mar. 17, 2014

Warrant [Member]

Apr. 29, 2014

Vendor [Member]

Jun. 30, 2014

Socius CG II, Ltd. [Member]

Jun. 30, 2014

Socius CG II, Ltd. [Member]

Minimum [Member]

Jun. 30, 2014

Socius CG II, Ltd. [Member]

Maximum [Member]

Common stock, shares authorized

1,400,000,000

1,400,000,000

1,100,000,000

Common stock, no par value

Common stock, shares outstanding

327,454,384

327,454,384

0

Common stock voting rights

one vote per share

Shares issued during period for services, shares

132,111

196,167

166,664

19,167

Lieu of payment amount for issued common stock

$ 20,588

Preferred stock shares designated

1,200,000

500,000

500,000

80,000

50,000

500

Percentage of issued and outstanding for written consent

67.00%

67.00%

67.00%

Stock issued as conversion, shares

155,823

2,599

7,175,661

1,000

Percentage of Common Stock beneficially owned

4.90%

Preferred stock liquidation per share

$ 40

$ 0

$ 30

$ 100

$ 0

Preferred Stock, Liquidation Preference, Value

20,000,000

0

2,116,950

0

54,500

0

0

0

Number of stock shares issued

41,666

Numebr of stock shares issued based on referred prescriptions amount

1,000

69,773,034

Net revenue

23,242,709

498,712

32,462,272

3,638,285

1,000,000

1,000,000

Marketing expense

7,779,250

Percentage of gross amount of qualified prescriptions billed and shipped by Company

17.50%

Preferred stock shares issued

500,000

500,000

500,000

70,565

0

545

0

0

0

Preferred stock, shares outstanding

457,168

174,184

0

0

545

0

0

0

Percentage of referral fee

13.00%

20.00%

Number of shares have been committed but not yet earned

42,832

Shares exchanged for promissory notes

1,094

Combined promissory notes, amount exchanged

145,334

Repurchase of stock price per share

$ 10,000

$ 66.63

Shares of common stock repurchased

7,504

Shares repurchased, value

500,000

Percentage of common stock shares issued and outstanding after hypothetical conversion

0.001%

90.00%

Preferred stock conversion

In no event shall the Conversion Ratio be less than four thousand, three hundred (4,300) shares of common stock and in no event shall the Conversion Ratio be more than ten thousand (10,000) shares of Common Stock.

Conversion ratio of common stock, minimum

4,300

Conversion ratio of common stock, maximum

10,000

Conversion of stock

1,850

18,500,000

1,000

Series C Preferred stock conversions

14,000,000

700

Conversion price per share of common stock, minimum

$ 0.005

Conversion price per share of common stock, maximum

$ 0.01

Percentage of preferred stock dividends

10.00%

10.00%

Warrant modification expense

(7,111,444)

7,111,444

Repayment for notes

650,000

Additional payment required

$ 100,000

Warrants outstanding

0

40,953,414

Warrants exercise price per share

$ 0.01

$ 1.02

Warrants expiration date

Jun. 03, 2016

Stock issued for services, shares

132,111

196,167

166,664

19,167

Shares approved and reserved for the issuance of stock options

4,000,000

10,000,000

Option outstanding

367,000

Option available for issuance

3,633,000

3,829,050

Option issued

6,170,950

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Notes and Debentures Payable (Tables)

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Outstanding Notes Payable

The Company’s outstanding notes payable consisted of the following:

	June 30, 2014				December 31, 2013
	Principal		Accrued Interest		Principal			Accrued Interest
Non-related parties:
2007 - 2009 Convertible Notes	$	397,000	$	97,254	$	497,000		$	78,083
2010 Profit Sharing Notes		175,000		262,173		675,000			383,163
2010 and 2011 Secured Bridge Notes		449,275		79,403		449,275			72,901
2012 Convertible Promissory Notes		3,175,125		682,553		3,299,875			410,174
Unsecured Promissory Notes		782,782		36,466		817,366			5,793
Convertible Debentures		325,000		101,093		-			-
Less: Discounts on Notes Payable		-				(98,922	)
Subtotal non-related parties		5,304,182		1,258,942		5,639,594			950,114
Related parties:
2007 - 2009 Convertible Notes		152,500		75,956		152,500			43,300
2012 Convertible Promissory Notes		150,000		8,588		150,000			18,000
Unsecured Promissory Notes		146,667		3,019		-			-
Convertible Notes		52,400		2,486		-			-
Note Payable Due to Officer		-		-		104,164			-
Subtotal related parties		501,567		90,049		406,664			61,300
Total		5,805,749		1,348,991		6,046,258			1,011,414
Current Portion		5,805,749		1,348,991		6,046,258			1,011,414
Long-term Portion	$	-	$	-	$	-		$	-

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Description of Business - Schedule of Assets and Liabilities (Details) (USD $)	Mar. 31, 2014
Description Of Business - Schedule Of Assets And Liabilities Details
Cash	$ 485,012
Fixed Assets	5,184
Total assets:	490,196
Accounts payable	362,582
Accrued expenses	588,401
Accrued interest	96,362
Settlement Liability	289,398
Convertible debentures	377,400
Liabilities of discontinued operations	961,831
Total liabilities	2,675,974
Net liabilities assumed	$ (2,185,778)

XML

Net Income (Loss) Per Share - Schedule of Net Income Loss Per Share (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Options
Warrants				156,581,297
Total dilutive shares	304,290,027		153,749,151	332,309,958
Series D Preferred Stock [Member]
Series D Preferred Stock				175,728,661
Series B Preferred Stock [Member]
Series D Preferred Stock
Series C Preferred Stock [Member]
Series D Preferred Stock

XML

Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Stock based compensation			$ 8,900,567
General And Administrative [Member]
Stock based compensation	21,317	121,317	0	0
Selling And Marketing [Member]
Stock based compensation	$ 4,975,951	$ 0	$ 8,779,250	$ 0

XML

Property and Equipment, Net

6 Months Ended

Jun. 30, 2014

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

3. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following as of June 30, 2014 and December 31, 2013:

	June 30, 2014			December 31, 2013
Leasehold improvements	$	24,749		$	24,749
Machinery and equipment		27,229			22,629
Furniture and fixtures		3,997			3,997
Computer equipment		26,854			13,406
		82,829			64,781
Less: accumulated depreciation		(41,497	)		(36,999	)
	$	41,332		$	27,782

Depreciation expense for the six months ended June 30, 2014 and 2013 amounted to $4,498 and $4,641, respectively.

Depreciation is provided over the estimated useful lives of the assets, principally using the straight-line method. The estimated useful lives are the lesser of the life of the assets, or the lease for leasehold improvements, and primarily range from six (3) to seven (7) years for machinery and equipment, furniture and fixtures, and computer equipment.

XML

Description of Business - Summary of Pro Forma Combined (Details) (Pro Forma [Member], USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Pro Forma [Member]
Revenues	$ 32,462,272	$ 3,638,285
Net (loss) from continuing operations	(21,281,838)	(6,401,952)
Net loss	$ (21,285,286)	$ (6,437,875)
Net (loss) per share, basic and diluted	$ (0.09)	$ (0.07)

XML

Commitments and Contingencies - Summary of Settlement Liabilities (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Settlement Liabilities amount	$ 697,539	$ 248,000
Myhill [Member]
Settlement Liabilities amount	130,000	200,000
Primary Care [Member]
Settlement Liabilities amount		48,000
Forte Capital [Member]
Settlement Liabilities amount	117,539
AATV [Member]
Settlement Liabilities amount	$ 450,000

XML

Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2014

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following as of June 30, 2014 and December 31, 2013:

	June 30, 2014			December 31, 2013
Leasehold improvements	$	24,749		$	24,749
Machinery and equipment		27,229			22,629
Furniture and fixtures		3,997			3,997
Computer equipment		26,854			13,406
		82,829			64,781
Less: accumulated depreciation		(41,497	)		(36,999	)
	$	41,332		$	27,782