UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): October 31, 2019
Trxade Group, Inc.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
000-55218 | 46-3673928 | |
(Commission File Number) | (I.R.S. Employer Identification No.) |
3840 Land O’ Lakes Blvd
Land O’ Lakes, Florida 34639
(Address of principal executive offices zip code)
800-261-0281
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: None.
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [X]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02 Results of Operations and Financial Condition.
On October 31, 2019, Trxade Group, Inc. (the “Company”) issued a press release disclosing its financial results for the three and nine months ended September 30, 2019. A copy of the press release, which includes a summary of such financial results is furnished as Exhibit 99.1 to this Form 8-K.
The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
The press release furnished as Exhibits 99.1 to this Current Report on Form 8-K, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, as such, may involve known and unknown risks, uncertainties and assumptions. These forward-looking statements relate to the Company’s current expectations and are subject to the limitations and qualifications set forth in the press release as well as in the Company’s other filings with the Securities and Exchange Commission, including, without limitation, that actual events and/or results may differ materially from those projected in such forward-looking statements. These statements also involve known and unknown risks, which may cause the results of the Company, its divisions and concepts to be materially different than those expressed or implied in such statements. Accordingly, readers should not place undue reliance on any forward-looking statements. Forward-looking statements may include comments as to the Company’s beliefs and expectations as to future financial performance, events and trends affecting its business and are necessarily subject to uncertainties, many of which are outside the Company’s control. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s periodic and current filings with the SEC, including the Form 10-Qs and Form 10-Ks, filed with the SEC and available at www.sec.gov. Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that occur after that date, except as otherwise provided by law.
Item 9.01 Financial Statements And Exhibits.
Exhibit No. | Description | |
99.1* | Press Release of Trxade Group, Inc., dated October 31, 2019 |
* Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TRXADE GROUP, INC. | ||
Date: October 31, 2019 | By: | /s/ Suren Ajjarapu |
Name: | Suren Ajjarapu | |
Title: | Chief Executive Officer |
EXHIBIT INDEX
Exhibit No. | Description | |
99.1* | Press Release of Trxade Group, Inc., dated October 31, 2019 |
* Furnished herewith.
Trxade Group Generates Record Revenues in Third Quarter of 2019
Revenue Growth of 173% to $2.311 Million
Operating Income Growth of 94% to $177,853
7th straight quarter of positive operating income
Shareholder Equity increased to $3.89mil
TAMPA, FL (Access wire) – October 31st, 2019 – Trxade Group, Inc. (OTCQB: TRXD) (“Trxade” or the “Company”), an integrated pharma supply chain and care platform, announced today its financial results for its third quarter ended September 30, 2019, and provided a business update.
Third Quarter Highlights:
● | Generated record revenues of $2,311,426 in quarter ending September 30, 2019 vs. $847,471 in quarter ending September 30, 2018 | |
● | Gross profit increased to $1,310,509 from $845,126, in quarters ending September 30, 2019 and 2018, respectively | |
● | Operating income increased to $177,853 from $91,829, in the quarters ending September 30, 2019 and 2018, respectively | |
● | For the three months ended at September 30, 2019, Trxade has validated over 431 New Independent pharmacies to its trading platform, a 9% sequential increase from the prior quarter and a 54% increase from the end of the third quarter of 2018 | |
● | Wholesale and Mail Order Pharmacy operational model further developed | |
● | Shareholder equity increased to $3.89M, debt was reduced and cash on hand totaled $3.3M as of September 30, 2019 |
CEO Sees Continuing Strong Revenue Growth and Profitability in 2019
“During the third quarter of 2019, we made excellent progress in our core proprietary B2B trading platform www.trxade.com, which enables independent pharmacies to purchase drugs at discount prices compared to their primaries, enabling us to experience top and bottom line growth,” commented, Suren Ajjarapu, Chairman and Chief Executive Officer of Trxade Group, who continued, “Additionally, we are investing in core infrastructure for our B-to-C business in our wholesale, e-commerce and delivery capabilities as increasing pharmaceutical prices drive independent pharmacies, payors and consumers to be more aggressive in sourcing medication. Accordingly, I am optimistic that our new product lines will generate profitability.”
Financial Results for the Third Quarter Ended September 30, 2019:
Revenues for the three months ended September 30, 2019 were $2,311,425 vs. $847,471 in the prior year’s quarter, an increase of 173%, and a 21% sequential increase over the second quarter ended June 30, 2019. The revenue growth was primarily attributable to the acquisition of our wholly-owned subsidiary Community Specialty Pharmacy, LLC, and an increase of fee income generated from the Company’s web-based supplier-to-pharmacy trading platform (www.trxade.com).
Trxade Group Inc. Press Release Page 2 of 4 |
Gross profit for the three months ended September 30, 2019 was $1,310,509, resulting in a gross margin of 56.7%, compared to $845,126 and 99.7% for the three months ended September 30, 2018. The increase in gross profit reflected a sales mix with greater revenue from specialty pharmaceutical sales, which carries a higher cost of sales, reflecting the lower margins, than the Company’s other revenue sources.
General and administrative expenses increased to $1,132,656 in the third quarter of 2019, compared with $753,297 in the prior year’s quarter.
Operating income increased for the third quarter of 2019 to $177,853, versus $91,829 in the prior year’s quarter.
Net income for the three months ended September 30, 2019, was $27,565, a decrease as compared to net income of $94,249, for the same period in 2018. The decrease was primarily due to a one time investment loss of $162,178. Earnings per share (EPS) for the three months period ended September 30, 2019 were $0.00, as compared to $0.00 for the same period in 2018.
At September 30, 2019, Trxade had $3,359,288 of cash, $622,552 of debt and 38.6 million shares issued and outstanding.
Financial Results for the Nine Months Ended September 30, 2019:
Revenues for the nine months ended September 30, 2019 were $5,740,361 vs. $2,538,082 for the nine months ended September 30, 2018, an increase of 126%. The revenue growth was primarily attributable to the acquisition of our wholly-owned subsidiary Community Specialty Pharmacy, LLC, and an increase of fee income generated from the Company’s web-based supplier-to-pharmacy trading platform (www.trxade.com).
Gross profit for the nine months ended September 30, 2019 was $3,620,467, resulting in a gross margin of 63%, compared to $2,535,737 and 99.5% for the nine months ended September 30, 2018. This increase reflected a sales mix with greater revenue from Specialty pharmaceutical sales, which carries a higher cost of sales, reflecting the lower margin, than the Company’s other revenue sources.
General and administrative expenses increased to $3,138,150 for the nine months ended September 30, 2019, compared with $2,313,734 for the nine months ended September 30, 2018.
Operating Income increased for the nine months ended September 30, 2019 to $482,317, versus $222,003 in the nine months ended September 30, 2018.
Net income for the nine months ended September 30, 2019, was $210,775, compared to net income of $197,031, for the same period in 2018. The improvement in net income was primarily due to increasing revenue and gross profit contributed from Community Specialty Pharmacy and an increase in fee income generated from the Company’s web-based supplier-to-pharmacy trading platform (www.trxade.com). The resulting EPS for the nine month period ended September 30, 2019 was $0.01, as compared to $0.01 for the same period in 2018.
About Trxade Group, Inc.
Headquartered in Tampa, Florida, Trxade Group, Inc. (OTCQB: TRXD) is an integrated drug procurement, delivery and healthcare platform that enables trade among healthcare buyers and sellers of pharmaceuticals, accessories and services. Founded in 2010, Trxade Group is comprised of three synergistic operating platforms; the Trxade B2B trading platform with 11,000 registered pharmacists buying over $120M annually, licensed Wholesale and Mail Order Pharmacy capabilities, including Delivmeds, as well as the newly acquired assets of Bonum Health. For additional information, please visit us at http://www.trxade.com, http://www.delivmeds.com, and http://www.bonumhealth.com.
Trxade Group Inc. Press Release Page 3 of 4 |
Forward-Looking Statements
Certain statements in this press release, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. We caution you not to place undue reliance on any forward-looking statements, which are made as of the date of this press release. We undertake no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Certain risks and uncertainties applicable to us and our operations are described in the “Risk Factors” sections of our most recent annual and quarterly reports and in other reports we have filed with the U.S. Securities and Exchange Commission. These reports are available at www.sec.gov.
Investor Relations Contact:
IR@trxade.com
800-261-0281
[Financial Tables Follow]
Trxade Group Inc. Press Release Page 4 of 4 |
Trxade
Group, Inc.
Selected Consolidated Financial Data
Three and Nine Months Ended September 30, 2019 and 2018
Three months ended | Nine months ended | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenues | $ | 2,311,426 | $ | 847,471 | $ | 5,740,361 | $ | 2,538,082 | ||||||||
Cost of Sales | 1,000,917 | 2,345 | 2,119,894 | 2,345 | ||||||||||||
Gross Profit | 1,310,509 | 845,126 | 3,620,467 | 2,535,737 | ||||||||||||
Operating Expenses | ||||||||||||||||
General and Administrative | 1,132,656 | 753,297 | 3,138,150 | 2,313,734 | ||||||||||||
Operating Income | 177,853 | 91,297 | 482,317 | 222,003 | ||||||||||||
Other Income | 25,275 | 22,500 | 25,275 | 22,500 | ||||||||||||
Investment Loss | (162,178 | ) | - | (250,000 | ) | - | ||||||||||
Loss on Extinguishment of Debt | - | (7,444 | ) | - | (7,444 | ) | ||||||||||
Interest Expense | (13,385 | ) | (12,636 | ) | (46,817 | ) | (40,028 | ) | ||||||||
Net Income | $ | 27,565 | $ | 94,249 | $ | 210,775 | $ | 197,031 | ||||||||
Net Income per Common Share – Basic: | $ | 0.00 | $ | 0.00 | $ | 0.01 | $ | 0.01 | ||||||||
Net Income per Common Share – Diluted: | $ | 0.00 | $ | 0.00 | $ | 0.01 | $ | 0.01 | ||||||||
Weighted average Common Shares Outstanding Basic | 34,489,969 | 32,083,629 | 34,370,522 | 32,083,629 | ||||||||||||
Weighted average Common Shares Outstanding Diluted | 36,286,487 | 34,737,964 | 36,167,040 | 34,732,540 |
Balance Sheet Data | September 30, 2019 | December 31, 2018 | ||||||
Working Capital | $ | 3,359,288 | $ | 605,710 | ||||
Total Assets | $ | 5,854,523 | $ | 2,227,587 | ||||
Long-Term Notes Payable | $ | 300,000 | $ | 522,552 | ||||
Shareholders’ Equity | $ | 3,890,549 | $ | 844,668 |