10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________

FORM 10-Q

 (Mark One)

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2016

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  to 

Commission File Number 0-13117

HealthWarehouse.com, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	22-2413505
(State or Other Jurisdiction	(I.R.S. Employer
of Incorporation or Organization)	Identification No.)

7107 Industrial Road, Florence, Kentucky	41042
(Address of Principal Executive Offices)	(Zip Code)

(800) 748-7001

(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 Exchange Act of 1934 during the past 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 ☒    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  ☒     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.

Large Accelerated Filer  ☐                                                                       Accelerated Filer                     ☐

Non-accelerated Filer     ☐                                                                       Smaller Reporting Company  ☒

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

There were 37,693,404 shares of Common Stock outstanding as of May 10, 2016

HEALTHWAREHOUSE.COM, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2016

TABLE OF CONTENTS

	Page
PART I – FINANCIAL INFORMATION	3
Item 1.      Financial Statements.	3
Item 2.      Management's Discussion and Analysis of Financial Condition and Results of Operations.	12
Item 3.      Quantitative and Qualitative Disclosures About Market Risk.	16
Item 4.      Controls and Procedures.	16
PART II – OTHER INFORMATION
Item 1.      Legal Proceedings.	17
Item 1A.   Risk Factors.	17
Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds.	17
Item 3.      Defaults upon Senior Securities.	17
Item 4.      Mine Safety Disclosures.	17
Item 5.      Other Information.	17
Item 6.      Exhibits.	18
SIGNATURES	19

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PART I – FINANCIAL INFORMATION

Item 1.      Financial Statements.

HEALTHWAREHOUSE.COM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
	March 31,			December 31,
	2016			2015
	(unaudited)
Assets
Current assets:
Cash	$	24,866		$	11,217
Restricted cash		115,088			145,088
Accounts receivable, net of allowance of $47,143 as of March 31, 2016 and
December 31, 2015		64,521			51,627
Inventories - finished goods, net		241,642			182,647
Prepaid expenses and other current assets		85,423			81,718
Total current assets		531,540			472,297
Property and equipment, net of accumulated depreciation of $827,528 and $801,270 as of
March 31, 2016 and December 31, 2015		382,990			409,248
Web development costs, net of accumulated amortization of  $165,699 and $146,448 as of
March 31, 2016 and December 31, 2015		65,311			84,562
Total assets	$	979,841		$	966,107
Liabilities and Stockholders' Deficiency
Current liabilities:
Accounts payable – trade	$	2,310,300		$	2,189,649
Accounts payable – related parties		260			862
Accrued expenses and other current liabilities		347,844			597,665
Current portion of equipment lease payable		29,349			46,143
Notes payable and other advances, net of debt discount of $12,056 and $0 as of March 31, 2016		1,087,944			991,089
and December 31, 2015, respectively
Note payable and other advances – related parties		16,058			23,889
Redeemable preferred stock - Series C; par value $0.001 per share;
10,000 designated Series C: 10,000 issued and outstanding as of
March 31, 2016 and December 31, 2015 (aggregate liquidation preference of $1,000,000)		1,000,000			1,000,000
Total current liabilities		4,791,755			4,849,297
Total liabilities		4,791,755			4,849,297
Commitments and contingencies
Stockholders' deficiency:
Preferred stock – par value $0.001 per share; authorized 1,000,000 shares; issued and outstanding
as of March 31, 2016 and December 31, 2015 as follows:
Convertible preferred stock - Series A – 200,000 shares designated Series A; 44,443 shares available
to be issued; no shares issued and outstanding		-			-
Convertible preferred stock - Series B – 625,000 shares designated Series B; 517,359 and 483,512
shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively (aggregate
liquidation preference of $4,974,601 and $4,889,043 as of March 31, 2016 and		517			484
December 31, 2015, respectively)
Common stock – par value $0.001 per share; authorized 100,000,000 shares; 38,844,374 shares
issued and 37,665,162 shares outstanding as of March 31, 2016 and December 31, 2015		38,844			38,844
Additional paid-in capital		31,067,056			30,656,598
Treasury stock, at cost, 1,179,212 shares as of  March 31, 2016 and December 31, 2015		(3,419,715	)		(3,419,715	)
Accumulated deficit		(31,498,616	)		(31,159,401	)
Total stockholders' deficiency		(3,811,914	)		(3,883,190	)
Total liabilities and stockholders' deficiency	$	979,841		$	966,107
The accompanying notes are an integral part of these condensed consolidated financial statements.

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HEALTHWAREHOUSE.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	For the Three Months Ended
	March 31,
	2016			2015
Net sales	$	2,347,798		$	1,612,677
Cost of sales		891,820			631,163
Gross profit		1,455,978			981,514
Operating expenses:
Selling, general and administrative expenses		1,683,716			1,107,550
Net loss from operations		(227,738	)		(126,036	)
Other expense:
Interest expense		(25,919	)		(74,752	)
Total other expense		(25,919	)		(74,752	)
Net loss		(253,657	)		(200,788	)
Preferred stock:
Series B convertible contractual dividends		(85,558	)		(79,961	)
Net loss attributable to common stockholders	$	(339,215	)	$	(280,749	)
Per share data:
Net loss – basic and diluted	$	(0.01	)	$	(0.01	)
Series B convertible contractual dividends		(0.00	)		(0.00	)
Net loss attributable to common stockholders - basic and diluted	$	(0.01	)	$	(0.01	)
Weighted average number of common shares outstanding - basic and diluted		37,665,162			37,570,383
The accompanying notes are an integral part of these condensed consolidated financial statements.

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HEALTHWAREHOUSE.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	For the Three Months Ended
	March 31,
	2016			2015
Cash flows from operating activities
Net loss	$	(253,657	)	$	(200,788	)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for doubtful accounts		-			90
Provision for employee advance reserve		-			2,143
Depreciation and amortization		45,509			45,661
Stock-based compensation		75,138			79,005
Gain on settlement of accounts payable		-			(66,179	)
Amortization of debt discount		3,444			54,517
Changes in operating assets and liabilities:
Accounts receivable		(12,894	)		(11,558	)
Inventories - finished goods		(58,995	)		(1,034	)
Prepaid expenses and other current assets		(3,705	)		12,857
Accounts payable – trade		120,651			(65,472	)
Accounts payable – related parties		(602	)		(382	)
Accrued expenses and other current liabilities		(15,526	)		(57,168	)
Net cash used in operating activities		(100,637	)		(208,308	)
Cash flows from investing activities
Change in restricted cash		30,000			-
Capital expenditures		-			(5,539	)
Website development costs		-			(10,942	)
Net cash provided by (used in) investing activities		30,000			(16,481	)
Cash flows from financing activities
Principal payments on equipment leases payable		(16,794	)		(15,382	)
Proceeds from issuance of notes payable		108,911			-
Repayment of notes payable		(7,831	)		-
Net cash provided by (used in) financing activities		84,286			(15,382	)
Net increase (decrease) in cash		13,649			(240,171	)
Cash - beginning of period		11,217			506,019
Cash - end of period	$	24,866		$	265,848
Cash paid for:
Interest	$	22,474		$	19,544
Non-cash investing and financing activities:
Issuance of Series B preferred stock for settlement of accrued dividends	$	319,853		$	298,918
Warrants issued as debt discount in connection with notes payable	$	15,500		$	41,300
Accrual of contractual dividends on Series B convertible preferred stock	$	85,558		$	79,961
The accompanying notes are an integral part of these condensed consolidated financial statements.

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HEALTHWAREHOUSE.COM, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

1.  Organization and Basis of Presentation

HealthWarehouse.com, Inc. ("HEWA" or the "Company"), a Delaware company incorporated in 1998, is an online mail order pharmacy, licensed in 50 states and the District of Columbia to focus on the out-of-pocket prescription drug market. The Company is Verified Internet Pharmacy Practice Site ("VIPPS") accredited by the National Association of Boards of Pharmacy ("NABP").  The Company markets a complete range of generic, brand name, and pet prescription medications as well as over-the-counter ("OTC") medications and products.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed consolidated financial statements of the Company as of March 31, 2016 and for the three months ended March 31, 2016 and 2015. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the operating results for the full year ending December 31, 2016 or any other period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related disclosures of the Company as of December 31, 2015 and for the year then ended, which were filed with the Securities and Exchange Commission on Form 10-K on March 25, 2016.

2. Going Concern and Management's Liquidity Plans

Since inception, the Company has financed its operations primarily through debt and equity financings and advances from related parties. As of March 31, 2016, the Company had a working capital deficiency of $4,260,215 and an accumulated deficit of $31,498,616. During the three months ended March 31, 2016 and the year ended December 31, 2015, the Company incurred net losses of $253,657 and $626,682, respectively and used cash in operating activities of $100,637 and $548,281, respectively. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

Subsequent to March 31, 2016, the Company continues to incur net losses, use cash in operating activities and experience cash and working capital constraints.

The Company is subject to a 2013 Notice of Redemption related to its Series C Redeemable Preferred Stock aggregating $1,000,000, whereby the Company must now apply all of its assets to redemption of the Series C Preferred Stock and to no other corporate purpose, except to the extent prohibited by Delaware law governing distributions to stockholders (the Company is not permitted to utilize toward the redemption those assets required to pay its debts as they come due and those assets required to continue as a going concern).

The Company recognizes it will need to raise additional capital in order to fund operations, meet its payment obligations and execute its business plan. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company and whether the Company will become profitable and generate positive operating cash flow. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, attempt to extend note repayments, attempt to negotiate the preferred stock redemption and reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.  If the Company is unable to obtain financing on a timely basis, the Company could be forced to sell its assets, discontinue its operation and /or seek reorganization under the U.S. bankruptcy code.

Accordingly, the accompanying condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the condensed consolidated financial statements do not necessarily represent realizable or settlement values. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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3. Summary of Significant Accounting Policies

Principles of Consolidation

The condensed consolidated financial statements include the accounts of HealthWarehouse.com, Inc., Hwareh.com, Inc., Hocks.com, Inc., ION Holding NV and ION Belgium NV, its wholly-owned subsidiaries. ION Holding NV and ION Belgium NV are inactive subsidiaries. All material inter-company balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  The Company's significant estimates include reserves related to accounts receivable and inventory, the recoverability and useful lives of long-lived assets, the valuation allowance related to deferred tax assets, the valuation of equity instruments and debt discounts.

Reclassifications

Certain accounts in the prior period condensed consolidated financial statements have been reclassified for comparison purposes to conform to the presentation of the current period condensed consolidated financial statements.  These reclassifications had no effect on the previously reported net loss.

Net Earnings (Loss) Per Share of Common Stock

Basic net earnings (loss) per share is computed by dividing net earnings (loss) attributable to Common Stockholders by the weighted average number of common shares outstanding during the period.  Diluted net earnings (loss) per share reflects the potential dilution that could occur if securities or other instruments to issue Common Stock were exercised or converted into Common Stock.  Potentially dilutive securities are excluded from the computation of diluted net earnings (loss) per share if their inclusion would be anti-dilutive and consist of the following:

	March 31,
	2016		2015
Options		5,381,205		3,944,557
Warrants		10,121,198		9,839,044
Series B Convertible Preferred Stock		5,892,720		5,507,202
Total potentially dilutive shares		21,395,123		19,290,803

4. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

	March 31,		December 31,
	2016		2015
Deferred Rent	$	19,389	$	25,852
Advertising		76,639		76,639
Salaries and Benefits		58,937		64,007
Dividend Payable		85,558		319,854
Accrued Interest		44,249		44,249
Accrued Rent		50,078		49,614
Other		12,994		17,450
Total	$	347,844	$	597,665

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5. Notes Payable

The Company is a party to a Loan and Security Agreement (the "Loan Agreement") with a lender (the "Lender").  Under the terms of the Loan Agreement, the Company borrowed an aggregate of $1,000,000 from the Lender (the "Loan").  The Loan is evidenced by a promissory note (the "Senior Note") in the face amount of $1,000,000 (as amended).  The Senior Note bears interest on the unpaid principal balance of the Note until the full amount of principal has been paid at a floating rate equal to the Prime Rate plus four and one-quarter percent (4.25%) per annum (7.75% as of March 31, 2016).  Under the terms of the Loan Agreement, the Company has agreed to make monthly payments of accrued interest on the first day of every month. The principal amount and all unpaid accrued interest on the Note is payable on May 31, 2016, or earlier in the event of default or a sale or liquidation of the Company. The Loan may be prepaid in whole or in part at any time by the Company without penalty.  The Senior Note contains financial covenants which require the Company to meet certain minimum targets for earnings before interest, taxes and non-cash expenses, including depreciation, amortization and stock-based compensation ("EBITDAS").  The Company granted the Lender a first, priority security interest in all of the Company's assets, in order to secure the Company's obligation to repay the Loan, including a Deposit Account Control Agreement, which grants the Lender a security interest in certain bank accounts.

On January 11, 2016, the Company entered into an Amendment to Promissory Note in the face amount of $100,000 with a different lender, effective October 31, 2015, which extended the maturity date of the note payable from November 1, 2015 to October 31, 2016.  In consideration of the extension of the maturity date of the note payable, the Company issued to the lender a five-year warrant to purchase 75,000 shares of Common Stock at an exercise price of $0.25 per share. The warrants had a fair value of $15,500 using the Black-Scholes model (see note 6) which was established as debt discount during the three months ended March 31, 2016 and will be amortized using the effective interest method over the remaining term of the Promissory Note.   Including the value of the warrants issued in connection with the extension of the maturity date of the Promissory Note, the Promissory Note has an effective interest rate of 23% per annum during the extension period.

The Company recorded amortization of debt discount associated with notes payable of $3,444 and $54,517 for the three months ended March 31, 2016 and 2015, respectively.

6. Stockholders' Deficiency

Preferred Stock

As of March 31, 2016 and December 31, 2015, the Company had accrued contractual dividends of $85,558 and $319,853, respectively, related to the Series B Preferred Stock. On January 1, 2016 and 2015, the Company issued 33,847 and 31,633 shares of Series B convertible preferred stock valued at approximately $320,000 and $299,000, respectively, representing approximately $0.66 in value per share of Series B Preferred Stock outstanding on each date, to the Series B convertible preferred stock holders as payment in kind for dividends.

Stock Options

Valuation

In applying the Black-Scholes option pricing model to stock options, the Company used the following weighted average assumptions:

	For The Three Months Ended
	March 31,
	2016	2015
Risk free interest rate	1.63% to 2.12%	n/a
Dividend yield	0.00%	n/a
Expected volatility	199% to 200.0%	n/a
Expected life in years	5.5 to 10.0	n/a

Grants

The weighted average fair value of the stock options granted during the three months ended March 31, 2016 was $0.24 per share.  There were no stock options granted during the three months ended March 31, 2015.

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During the three months ended March 31, 2016, the Company granted options to consultants and directors of the Company to purchase an aggregate of 172,254 shares of common stock under a previously approved plan at exercise prices ranging between $0.24 and $0.25 per share for an aggregate grant date value of $41,379.  The options vested on the grant date and have a term of ten years.

Stock-based compensation expense related to stock options was recorded in the condensed consolidated statements of operations as a component of selling, general and administrative expenses and totaled $75,138 and $78,789 for the three months ended March 31, 2016 and 2015, respectively.

As of March 31, 2016, stock-based compensation expense related to stock options of $996,064 remains unamortized, including $104,495 which is being amortized over the weighted average remaining period of 2.0 years.  The remaining $891,569 is related to a performance based option where vesting is currently deemed to be improbable and no amount is being amortized.

Summary

A summary of the stock option activity during the three months ended March 31, 2016 is presented below:

				Weighted		Average
				Average		Remaining	Aggregate
	Number of			Exercise		Life	Intrinsic
	Options			Price		In Years	Value
Outstanding, January 1, 2016		5,341,284		$	0.70
Granted		172,254			0.24
Exercised		-			-
Forfeited		(132,333	)		0.49
Outstanding, March 31, 2016		5,381,205		$	0.69	7.6	$	332,554
Exercisable, March 31, 2016		4,169,539		$	0.62	7.6	$	240,254

The following table presents information related to stock options at March 31, 2016:

		Options Outstanding				Options Exercisable
		Weighted				Weighted		Weighted
Range of		Average		Outstanding		Average		Average	Exercisable
Exercise		Exercise		Number of		Exercise		Remaining Life	Number of
Price		Price		Options		Price		In Years	Options
$	0.09 - $2.20	$	0.23		4,701,705	$	0.25	8.0	3,740,039
$	2.21 - $3.80		3.35		492,500		2.88	3.8	242,500
$	3.81 - $6.99		5.17		187,000		5.17	5.4	187,000
		$	0.69		5,381,205	$	0.62	7.6	4,169,539

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Warrants

Valuation

In applying the Black-Scholes option pricing model to stock warrants, the Company used the following weighted average assumptions:

	For The Three Months Ended
	March 31,
	2016	2015
Risk free interest rate	1.58%	1.50%
Dividend yield	0.00%	0.00%
Expected volatility	200.0%	196.0%
Contractual term in years	5.00	5.00

Grants

The weighted average fair value of the stock warrants granted during the three months ended March 31, 2016 and 2015, was $0.24 and $0.08 per share, respectively.

Stock-based compensation expense related to warrants for the three months ended March 31, 2016 and 2015 was recorded in the condensed consolidated statements of operations as a component of selling, general and administrative expenses and totaled $0 and $216, respectively.  As of March 31, 2016, stock-based compensation expense related to warrants of $576,840 remains unamortized.  The remaining $576,840 is related to a performance based warrant where vesting is currently deemed to be improbable and no amount is being amortized.

A summary of the stock warrant activity during the three months ended March 31, 2016 is presented below:

			Weighted		Average
			Average		Remaining	Aggregate
	Number of		Exercise		Life	Intrinsic
	Warrants		Price		In Years	Value
Outstanding, January 1, 2016		10,046,198	$	0.41
Granted		75,000		0.25
Exercised		-		-
Forfeited		-		-
Outstanding, March 31, 2016		10,121,198	$	0.40	3.1	$	150,922
Exercisable, March 31, 2016		9,871,198	$	0.34	3.1	$	150,922

The following table presents information related to stock warrants at March 31, 2016:

		Warrants Outstanding			Warrants Exercisable
		Weighted			Weighted		Weighted
Range of		Average		Outstanding	Average		Average	Exercisable
Exercise		Exercise		Number of	Exercise		Remaining Life	Number of
Price		Price		Warrants	Price		In Years	Warrants
$	0.10 - $0.35	$	0.25	9,571,198	$	0.25	3.2	9,571,198
$	0.36 - $3.00		2.90	520,000		2.90	0.5	270,000
$	3.01 - $4.95		4.95	30,000		4.95	1.5	30,000
$	0.10 - $4.95	$	0.40	10,121,198	$	0.33	3.1	9,871,198

7.   Commitments and Contingent Liabilities

Operating Leases

The Company is a party to a lease agreement for approximately 28,500 square feet of office and storage space with an entity. On March 15, 2016, the Company entered into an amendment of the lease agreement which extended the lease for an additional three years.  The amended monthly lease rate will be $5,462 in 2016, $6,649 in 2017, $6,886 in 2018 and $7,124 in 2019.  The lease expires on December 31, 2019.  The Company accounts for rent expense using the straight line method of accounting, deferring the difference between actual rent due and the straight line amount. Deferred rent payable of $19,389 and $25,852 as of March 31, 2016 and December 31, 2015, respectively, has been included in accrued expenses and other current liabilities on the condensed consolidated balance sheets.

- 10 -

On June 7, 2013, Pagosa signed a three year lease for $1,000 per month to house an office, pharmacy as well as inventory and is located in Lawrenceburg, IN.  On July 8, 2013, the parties agreed to extend the lease for two additional years, such that the new termination date is now June 7, 2018.  On January 14, 2014, the Company closed Pagosa Health and vacated the Lawrenceburg facility.  The Company is currently in discussions with the Landlord regarding termination of the lease related to the building.   The present value of the remaining lease payments of $50,078 is reflected as a component of accrued expenses and other liabilities on the condensed consolidated financial statements as of March 31, 2016.

Future minimum payments, by year and in the aggregate, under operating leases as of March 31, 2016 are as follows:

For years ending December 31,	Amount
2016	$	58,152
2017		91,783
2018		87,633
2019		85,482
Total future minimum lease payments	$	323,050

During the three months ended March 31, 2016 and 2015, the Company recorded aggregate rent expense of $20,274 and $18,342 (net of sub-lease), respectively.

Litigation

In the ordinary course of business, we may become subject to lawsuits and other claims and proceedings that might arise from litigation matters or regulatory audits. Such matters are subject to uncertainty and outcomes are often not predictable with assurance. Our management does not presently expect that any such matters will have a material adverse effect on the Company's condensed consolidated financial condition or condensed consolidated results of operations. We are not currently involved in any pending or threatened material litigation or other material legal proceedings nor have we been made aware of any penalties from regulatory audits.

8. Concentrations

During the three months ended March 31, 2016, three vendors represented 49%, 16% and 15% of total inventory purchases. During the three months ended March 31, 2015, two vendors represented 74% and 10% of total inventory purchases, respectively.

Two vendors represented 40% and 12% of the accounts payable balance as of March 31, 2016.  Two vendors represented 43% and 13% of the accounts payable balance as of December 31, 2015.

9. Subsequent Events

The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed.

Stock Option Grants

On April 8, 2016, the Company granted options to directors of the Company to purchase an aggregate of 94,848 shares of common stock under a previously approved plan at an exercise price of $0.29 per share for an aggregate grant date value of $27,000.  The options vested on the grant date and have a term of ten years.  The options were granted as part of director compensation approved by the Compensation Committee.

Common Stock Issued

On May 3, 2016, the Company issued 28,242 shares of common stock to an investor as a result of a cashless exercise of warrants.

Employment Agreement

On May 9, 2016, the Company entered into an employment agreement (the "Employment Agreement") with Mr. Lalit Dhadphale.  The terms of the Employment Agreement include a term of two years beginning on January 1, 2016 with an extension provision, the titles and positions of Chief Executive Officer and President, an initial base salary of $175,000 per year, subject to certain bonus and severance provisions.  Mr. Dhadphale's agreement is bound by restrictive covenants regarding disclosure of confidential information, non-solicitation and employee non-competition.

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Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operation.

The following discussion and analysis of the results of operations and financial condition of HealthWarehouse.com, Inc. (and including its subsidiaries,  the "Company") as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form 10-Q. References in this Management's Discussion and Analysis of Financial Condition and Results of Operations to "us," "we," "our," and similar terms refer to the Company. This Quarterly Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Quarterly Report may not occur. Generally these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words "may," "will," "expect," "believe," "anticipate," "project," "plan," "intend," "estimate," and "continue," and their opposites and similar expressions, are intended to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Factors that may affect our results include, but are not limited to, the risks and uncertainties discussed in Item 7 ("Management's Discussion and Analysis of Financial Condition and Results of Operations – Factors That May Affect Results and Financial Condition") of our Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission (the "SEC") on March 25, 2016.

Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

Overview

HealthWarehouse.com, Inc. ("HEWA" or the "Company") is America's Trusted Online Pharmacy, licensed in 50 states to focus on the out-of-pocket prescription drug market, a market which is expected to grow to $80 billion in 2016. HealthWarehouse.com is currently 1 of 45 Verified Internet Pharmacy Practice Websites ("VIPPS") accredited by the National Association of Boards of Pharmacy ("NABP") and is the only VIPPS accredited pharmacy licensed in all 50 states and the District of Columbia that processes out-of-pocket prescriptions online.  The Company won the 2015 BizRate Circle of Excellence Award for outstanding customer service and satisfaction along with 186 other major online retailers, the fourth time since its inception and was prominently featured in two nationally recognized consumer magazines during the fourth quarter of 2015 as having the lowest price among top US pharmacies for five commonly prescribed medications.  The Company markets a complete range of generic, brand name, and pet prescription medications as well as over-the-counter ("OTC") medications and products.

Consumers who pay out of pocket for their prescriptions include those:

●   with no insurance coverage;

●   with high insurance deductibles or copays;

●   with Medicare Part D plans with high deductibles;

●   with Health Savings Accounts (HSA) or Flexible Savings Accounts (FSA);

●   with insurance through the Affordable Care Act (ACA) with high deductibles;

●   with drug exclusions and quantity restrictions placed by insurance companies.

Our objectives are to utilize our proprietary technology to make the pharmaceutical supply chain more efficient and to pass the savings on to the consumer.  We are becoming known by consumers as a convenient, reliable, discount provider of over-the-counter products and prescription medications. We intend to continue to expand our product line as our business grows.

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Results of Operations

For The Three Months Ended March 31, 2016 Compared to Three Months Ended March 31, 2015

	For three months ended			% of		For three months ended			% of
	Ended March 31, 2016			Revenue		Ended March 31, 2015			Revenue
Net sales	$	2,347,798		100.0	%	$	1,612,677		100.0	%
Cost of sales		891,820		38.0	%		631,163		39.1	%
Gross profit		1,455,978		62.0	%		981,514		60.9	%
Selling, general & administrative expenses		1,683,716		71.7	%		1,107,550		68.7	%
Loss from operations		(227,738	)	(9.7	%)		(126,036	)	(7.8	%)
Interest expense		(25,919	)	(1.1	%)		(74,752	)	(4.6	%)
Net loss	$	(253,657	)	(10.8	%)	$	(200,788	)	(12.4	%)

Net Sales

For three months ended		%			$		For three months ended
March 31, 2016		Change			Change		March 31, 2015
$	2,347,798		45.6	%	$	735,121	$	1,612,677

Net sales for the three months ended March 31, 2016 increased to $2,347,798 from $1,612,677, an increase of $735,121, or 45.6% due to an increase in core consumer prescription and over-the-counter sales offset by a reduction in business-to-business sales.  The core prescription sales grew by $691,929 or 63.3% as new customers grew 198.5% and repeat customers grew 38.9%, in comparison to the same quarter of the prior year, continuing the upward trend experienced during 2015.  Core over-the-counter sales grew by $187,029 or 68.8% and order volume more than doubled due to continued advertising efforts and improved order fulfillment rates and customer satisfaction.  The combined first quarter core consumer prescription and over-the-counter order volume increased 89.4% when compared to order levels of the same quarter of the prior year due to new customer acquisition through advertising and customer retention.

The Company continues to benefit from being prominently featured in two nationally recognized consumer magazines during the fourth quarter of 2015 as having the lowest price among top US Pharmacies for five commonly prescribed medications.  The favorable articles had an immediate impact on order volume beginning in December 2015 with consumer prescription orders from new customers in March 2016 increasing by 88% in comparison to order levels in October 2015, prior to the release of the article.  We believe this trend in new customer acquisition growth will positively impact repeat customer orders during the remainder of 2016 as the Company will continue to focus on customer acquisition, conversion and retention.

Cost of Sales and Gross Margin

	For three months ended			%			$			For three months ended
	March 31, 2016			Change			Change			March 31, 2015
Cost of sales	$	891,820			41.3	%		260,657		$	631,163
Gross margin $	$	1,455,978			48.3	%		474,464		$	981,514
Gross margin %		62.0	%		1.8	%		1.1	%		60.9	%

Cost of sales were $891,820 for the three months ended March 31, 2016 as compared to $631,163 for the three months ended March 31, 2015, an increase of $260,657, or 41.3%, primarily as a result of an increase in consumer prescription and over-the-counter order volume offset by a reduction in business-to-business orders. Gross margin percentage increased from 60.9% for the three months ended March 31, 2015 to 62.0% for the three months ended March 31, 2016, primarily due to a reduction in the lower margin business-to-business sales.  Management will continue to focus its advertising and operational efforts on promoting and offering its higher margin product lines to consumers and strategic purchasing efforts to further improve costs.

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Selling, General and Administrative Expenses

For three months ended			%			$		For three months ended
March 31, 2016			Change			Change		March 31, 2015
$	1,683,716			52.0	%	$	576,166	$	1,107,550
	71.7	%							68.7	%

Selling, general and administrative expenses totaled $1,683,716 for the three months ended March 31, 2016 compared to $1,107,550 for the three months ended March 31, 2015,  an increase of $576,166, or 52.0%.  The three months ended March 31, 2016 expense increases included (a) an increase in salary expense of $184,681 (primarily due to an increase  in headcount to process higher levels of call and order volumes, reduced efficiency of pharmacy staff due to higher level of new customer orders and the addition of the Chief Financial Officer); (b) an increase in freight expense of $134,042 (due to higher volume and higher expedited shipping cost);  (c) an increase in advertising and public relations expenses of  $101,811 (primarily due to an increase in the advertising and promotion campaigns); (d) an increase in credit card processing expense of $34,672 (primarily due to the increase in order volume);  (e) an increase in legal expense of $19,778 (primarily related to efforts to release the garnishment of funds in our bank account); and (f) an increase in the board of directors fees of $18,000.  We will continue to focus on controlling costs and improving efficiencies of our personnel to limit the future growth in expenses.

Interest Expense

Interest expense decreased from $74,752 in the three months ended March 31, 2015 to $25,919 in the three months ended March 31, 2016,  a decrease of $48,833, or 65.3% primarily due to a reduction  in amortization of debt discounts.

 Adjusted EBITDAS

We believe Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation ("Adjusted EBITDAS"), a non-GAAP financial measure, is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance. We believe that:

● Adjusted EBITDAS provides investors and other users of our financial information consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations and facilitates comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and

● Adjusted EBITDAS is useful because it excludes non-cash charges, such as depreciation and amortization, stock-based compensation and one-time charges, which the amount of such expense in any specific period may not directly correlate to the underlying performance of our business operations and these expenses can vary significantly between periods.

We use Adjusted EBITDAS in conjunction with traditional GAAP measures as part of our overall assessment of our performance, to evaluate the effectiveness of our business strategies and to communicate with our lenders, stockholders and board of directors concerning our financial performance.

Adjusted EBITDAS should not be considered as a substitute for other measures of financial performance reported in accordance with GAAP. There are limitations to using non-GAAP financial measures, including that other companies may calculate these measures differently than we do. We compensate for the inherent limitations associated with using Adjusted EBITDAS through disclosure of these limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDAS to the most directly comparable GAAP measure, specifically net loss.

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The following provides a reconciliation of net loss to Adjusted EBITDAS:

	March 31,
	2016			2015
	(unaudited)
Net loss	$	(253,657	)	$	(200,788	)
Non-GAAP adjustments:
Gain on settlement of accounts payable		-			(66,179	)
Interest expense		25,919			74,752
Depreciation and amortization		45,509			45,661
Stock-based compensation		75,138			79,005
Change in fair value of collateral securing
employee advances		-			2,143
Adjusted EBITDAS	$	(107,091	)	$	(65,406	)

Off-Balance Sheet Arrangements

We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.

Impact of Inflation

We believe that inflation has not had a material impact on our results of operations for the three months ended March 31, 2016 and 2015. We cannot assure you that future inflation will not have an adverse impact on our operating results and financial condition.

Liquidity and Capital Resources

Since inception, we have financed operations primarily through debt and equity financings and advances from stockholders.  As of March 31, 2016, we had a working capital deficiency of $4,260,215 and an accumulated deficit of $31,498,616.  During the three months ended March 31, 2016 and the year ended December 31, 2015, we incurred net losses of 253,657 and $626,682 and used cash in operating activities of $100,637 and $548,281, respectively.  These conditions raise substantial doubt about our ability to continue as a going concern.

Subsequent to March 31, 2016, we continue to incur net losses, use cash in operating activities and experience cash and working capital constraints.

The Company is subject to a Notice of Redemption related to our Series C Redeemable Preferred Stock aggregating $1,000,000 and must apply all of our assets to redemption of the Series C Preferred Stock and to no other corporate purpose, except to the extent prohibited by Delaware law governing distributions to stockholders (we are not permitted to utilize toward the redemption those assets required to pay our debts as they come due and those assets required to continue as a going concern).

We recognize that we will need to raise additional capital in order to fund operations, meet our payment obligations, including the redemption of the Series C Redeemable Preferred Stock, and execute our business plan. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to us and whether we will become profitable and generate positive operating cash flow. If we are unable to raise sufficient additional funds, we will have to develop and implement a plan to further extend payables, extend note repayments, extend the preferred stock redemption and reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.  If we are unable to obtain financing on a timely basis, we could be forced to sell our assets, discontinue our operations and/or seek reorganization under the U.S. bankruptcy code.

Accordingly, the accompanying condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate our continuation as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the condensed consolidated financial statements do not necessarily represent realizable or settlement values. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As of March 31, 2016 and December 31, 2015, the Company had cash on hand of $24,866 and $11,217, respectively.  Our cash flow from operating, investing and financing activities during these periods were as follows:

For the three months ended March 31, 2016, cash flows included net cash used in operating activities of $100,637.  This amount included a decrease in operating cash related to a net loss of $253,657, partially offset by aggregate non-cash adjustments of $124,091 and aggregate cash provided by changes in operating assets and liabilities of $28,929 (primarily a result of increased accounts payable offset by increased inventories).  For the three months ended March 31, 2015, cash flows included net cash used in operating activities of $208,308.  This amount included a decrease in operating cash related to a net loss of $200,788, partially offset by aggregate non-cash adjustments of $115,237, plus aggregate cash used by changes in operating assets and liabilities of $122,757 (primarily a result of a reduction of accounts payable).

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For the three months ended March 31, 2016, net cash provided by investing activities was $30,000 related to a decrease in restricted cash.   For the three months ended March 31, 2015, net cash utilized by investing activities was $16,481 related to capitalized website development costs and the purchase of computer equipment.

For the three months ended March 31, 2016, net cash provided by financing activities was $84,286 related to proceeds received from the issuance of notes payable offset by principal payments on equipment leases and repayment of notes payable.  For the three months ended March 31, 2015, net cash used by financing activities was $15,382 related to the principal payment on equipment leases.

Critical Accounting Policies and Estimates

There are no material changes from the critical accounting policies set forth in "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K filed on March 25, 2016. Please refer to that document for disclosures regarding the critical accounting policies related to our business.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d–15(e) under the Exchange Act) are designed to provide reasonable assurance that information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the forms and rules of the SEC and that such information is accumulated and communicated to management, including the Chief Executive Officer, in a manner to allow timely decisions regarding required disclosures.

In connection with the preparation of this Form 10–Q, our management, (Chief Executive and Principal Financial Officer), evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2016. Management had previously identified material weaknesses in our internal control over financial reporting as of December 31, 2015 (see Form 10-K filed with the SEC on March 25, 2016), which is an integral component of our disclosure controls and procedures.  During the year ended December 31, 2015, management implemented policies, procedures and controls to address the weaknesses in various areas including operational and financial systems integration, separation of duties in review and approval of disbursement, cash handling, purchasing, receiving, shipping and invoicing functions, daily transaction processing and monthly financial closing procedures and timelines and board approval of related party and other significant transactions.  Management believes that the controls implemented in these specific areas are sufficient to address the above weaknesses, however, they have concluded that such controls have not been in place for a sufficient period of time in order to conclude that the identified material weaknesses described above have been fully remediated.  Therefore, management has concluded that as of March 31, 2016, our disclosure controls were not effective.

Effective January 1, 2016, the Company hired a Chief Financial Officer with sufficient experience with United States generally accepted accounting principles to address the accounting for complex transactions.  The Chief Financial Officer is developing a plan to continue to evaluate the controls and procedures implemented in the prior year.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting or in other factors during the three months ended March 31, 2016, that have materially affected, or were reasonably likely to materially affect, our internal control over financial reporting, except as discussed above.

Limitations of the Effectiveness of Control

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations of any control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

In the ordinary course of business, we may become subject to lawsuits and other claims and proceedings that might arise from litigation matters or regulatory audits. Such matters are subject to uncertainty and outcomes are often not predictable with assurance. Our management does not presently expect that any such matters will have a material adverse effect on the Company's consolidated financial condition or consolidated results of operations. We are not currently involved in any pending or threatened material litigation or other material legal proceedings nor have we been made aware of any penalties from regulatory audits, except as described below.

Item 1A. Risk Factors.

Not applicable.

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

None.

Recent Repurchases of Common Stock

There were no repurchases of our Common Stock during the three months ended March 31, 2016.  The Company does not currently have an announced repurchase program.

Item 3. Defaults upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.
 

Item 5. Other Information.

On May 9, 2016, the Company entered into an employment agreement (the "Employment Agreement") with Mr. Dhadphale, the Company's current President and Chief Executive Officer and Chairman of the Board of Directors.  The Employment Agreement contains the following key terms: (a) a term of one year beginning on May 9, 2016, subject to automatic one year extensions, unless written notice of non-extension is provided by either party; (b) the titles and positions of President and Chief Executive Officer reporting directly to the Company's Board of Directors; (c) nomination for election as a member of the Board of Directors at each annual meeting of the Company's stockholders during his employment with the Company; (d) an initial base salary of $175,000 per year beginning May 9, 2016, with an increase to $185,000 per year on May 9, 2017; (d) an annual target bonus of up to 100% of base salary under the annual bonus program for senior management of the Company, which bonus is payable 50% in cash and 50% in stock options; provided that for calendar years 2016 and 2017, Mr. Dhadphale will earn a minimum bonus of 30% of base salary; (e) in the event of a termination of Mr. Dhadphale's employment other than for cause (as defined in the Employment Agreement) or a resignation for good reason (as defined in the Employment Agreement), Mr. Dhadphale will be entitled to severance equal to twelve (12) months of his then-current base salary; and (f) Mr. Dhadphale's agreement is bound by restrictive covenants regarding (i) disclosure of confidential information for his lifetime, (ii) non-solicitation of clients, customers and employees for 18 months after termination of employment and (iii) non-competition with the Company's business for 18 months after termination of employment.

The foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to such Employment Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

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Item 6.     Exhibits.

The following exhibits are provided:

Exhibit Number	Description
10.1	Employment Agreement dated  May 9, 2016 between the Company and Lalit Dhadphale.*
31.1	Certification of CEO Pursuant to Section 302 of the Sarbanes Oxley Act of 2002.*
31.2	Certification of CFO Pursuant to Section 302 of the Sarbanes Oxley Act of 2002.*
32.1	Certification of CEO Pursuant to Section 906 of the Sarbanes Oxley Act of 2002.*
32.2	Certification of CFO Pursuant to Section 906 of the Sarbanes Oxley Act of 2002.*
101.INS	XBRL Instance Document *
101.SCH	XBRL Schema Document *
101.CAL	XBRL Calculation Linkbase Document *
101.DEF	XBRL Definition Linkbase Document *
101.LAB	XBRL Label Linkbase Document *
101.PRE	XBRL Presentation Linkbase Document *

    *    Filed herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: May 12, 2016 HEALTHWAREHOUSE.COM, INC.     By:/s/ Lalit Dhadphale                                                                            Lalit Dhadphale                President and Chief Executive Officer

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EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT, entered into as of May 9, 2016 (the "Agreement"), by and between HealthWarehouse.com, Inc., a Delaware corporation (the "Company"), and Lalit Dhadphale (the "Employee").

W I T N E S S E T H:

WHEREAS, the Company desires to employ the Employee as its President and Chief Executive Officer so that it will have the benefit of his ability, experience and services, and the Employee is willing to enter into an agreement to that end, upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby covenant and agree as follows:

1.       Employment

The Company hereby agrees to employ the Employee, and the Employee hereby agrees to be in the employ of the Company, on and subject to the terms and conditions of this Agreement.

2.       Term

The period of this Agreement (the "Agreement Term") shall commence and become effective on May 9, 2016 (the "Effective Date") and shall expire on the first anniversary of the Effective Date.  Thereafter, the Agreement Term shall be automatically extended for an additional year on each anniversary of the Effective Date, unless written notice of non-extension is provided by either party to the other party at least ninety (90) days prior to such anniversary.  The period of the Employee's employment hereunder (the "Employment Period") shall commence as of the Effective Date and shall expire at the end of the Agreement Term, unless earlier terminated in accordance with the terms and conditions of this Agreement or except as otherwise set forth herein.

3.       Position and Duties

(a)      Position, Reporting.  During the Employment Period, the Employee shall serve as, and with the title, office and authority of, the President and Chief Executive Officer of the Company.  The Employee shall have such duties and authority as are normally associated with such positions and will generally have responsibility for managing Company activities, subject to the authority of the Company's Board of Directors of the Company (the "Board"). These activities include but are not limited to Board activities, investor and public relations, fund raising and banking relations. The Employee shall report directly to the Board.

Page 1 of 9

(b)       Business Time.  During the Employment Period, the Employee agrees to devote his full business time, efforts and skills to the performance of his duties and responsibilities under this Agreement.  Subject to Section 7 hereof, the Employee shall not be precluded from devoting reasonable periods of time to participate in professional, philanthropic or community activities; provided that such activities do not interfere with the Employee's regular performance of his duties and responsibilities hereunder.

(c)       Location.  The Employee shall perform his duties in the Florence, Kentucky and Las Vegas, Nevada areas and from time to time the Employee will be required to travel to other locations in connection with his responsibilities under this Agreement.

4.         Compensation and Benefits

In consideration of the services rendered by the Employee during the Employment Period, and subject in all respects to the terms and provisions of this Agreement, the Company shall pay or provide the Employee the compensation and benefits set forth below:

(a)        Base Salary.  During the Employment Period, the Company shall pay the Employee a base salary at the rate of $175,000 per annum (the "Base Salary"), to be paid in accordance with the normal payroll practices of the Company.  The Base Salary shall be increased to $185,000 per year on May 9, 2017 and thereafter may be reviewed from time to time by the Compensation Committee of the Board (the "Compensation Committee") for possible merit increases.

(b)        Annual Bonus.  During the Employment Period, the Employee shall have the opportunity to earn an annual bonus (the "Annual Bonus") with a target equal to 100% of Base Salary under the annual bonus program in which management employees of the Company are eligible to participate, as determined by the Compensation Committee from time to time, with the amount and payment of the Annual Bonus to be based on the achievement of performance goals by the Company and/or the Employee under the terms of such program.  The Annual Bonus shall be paid 50% in cash and 50% in stock options. Notwithstanding the foregoing, for the 2016 and 2017 calendar years, the Employee shall be deemed to have earned at least a minimum Annual Bonus of 30% of Base Salary irrespective of whether applicable performance targets are met.  To be eligible for payment of the Annual Bonus, Employee must be employed by the Company on the date of payment of such Annual Bonus.  The Annual Bonus shall be paid no later than June 30 of the calendar year immediately following the calendar year to which such bonus relates.

(c)         Benefits.  The Employee shall be entitled to participate in the employee and fringe benefit plans and programs of the Company in which employees of the Company are generally eligible to participate from time to time during the Employment Period, subject to and on a basis consistent with the terms, conditions, eligibility requirements and overall administration of such plans and programs.

Page 2 of 9

(d)         Vacation.  The Employee shall be entitled to up to four (4) weeks of vacation per year.

(e)          Business Expenses.  The Company shall reimburse all reasonable business expenses and disbursements incurred by the Employee in the performance of his duties under this Agreement in accordance with the Company's normal practices and procedures, upon proper accounting therefor.

5.           Termination of Employment

The Employment Period and the Employee's employment hereunder shall be terminated upon the occurrence of any of the following events, subject to the provisions of this Agreement applicable to termination of employment, as follows:

(a)          Resignation for Good Reason.  The Employee may voluntarily terminate the Employment Period and the Employee's employment hereunder for Good Reason.  For these purposes of this Agreement, "Good Reason" shall mean (i) the assignment to the Employee of any duties materially inconsistent with the Employee's position, title, authority or responsibilities as contemplated by Section 3(a) hereof, or any action by the Company that results in a material diminution in such position, title, authority or responsibilities without the Employee's express written consent or (ii) a change in control wherein individuals who, as of the date of the signing of this Agreement, constitute the Board of Directors (the "Incumbent Board") cease for any reason to constitute at least a majority of such Board; provided that any individual who becomes a director of the Company subsequent to the date of the signing of this Agreement, whose election, or nomination for election by the Company stockholders, was approved by the vote of at least a majority of the directors then in office shall be deemed a member of the Incumbent Board.  In no event shall the Employee be considered to have terminated his employment for "Good Reason" unless the Employee delivers a written notice of termination to the Company identifying in reasonable detail the acts or omissions constituting "Good Reason" and the provision of this Agreement relied upon, and such acts or omissions are not cured by the Company within 15 days of receipt of such notice.  If the acts or omissions are not cured, the Employee may terminate his employment not earlier than 30 days following the date of the written notice of termination referred to in the preceding sentence

(b)          Resignation without Good Reason.  The Employee may voluntarily terminate the Employment Period and the Employee's employment hereunder for any reason that does not constitute Good Reason ("Without Good Reason") by giving the Company 30 days advance written notice of such termination.

(c)          Termination For Cause.  The Company may terminate the Employment Period and the Employee's employment hereunder for Cause.  For purposes of this Agreement, "Cause" shall mean the occurrence of one of the following: (i) fraud or willful or intentional misrepresentation in connection with the Employee's performance of his duties hereunder; (ii) the failure by the Employee to substantially perform his duties hereunder; (iii) willful or intentional conduct by the Employee that is detrimental to the Company's reputation, goodwill or business operations in any material respect; (iv) breach or threatened breach by the Employee of the restrictive covenants incorporated in Section 7 hereof; (v) the Employee's conviction for, or plea of nolocontendere to a charge of commission of, a felony or a violation of federal or state securities laws; or (vi) a material breach of the representations in Section 9 hereof.

Page 3 of 9

(d)         Termination Without Cause.  The Company may terminate the Employment Period and the Employee's employment hereunder without Cause ("Termination Without Cause") at any time by giving the Employee 30 days' advance written notice of such termination, or in lieu thereof by paying the Employee, in addition to any amounts the Employee is due under Section 6 hereof, his then-current daily Base Salary for each day the Company's written notice of termination is less than 30 days.

(e)          Disability.  The Employment Period and the Employee's employment hereunder shall terminate upon his Disability.  For purposes of this Agreement, "Disability" shall mean the inability of the Employee to perform his essential duties to the Company, with or without accommodation, on account of physical or mental illness or incapacity for a period of three consecutive months, or for a period of six months, whether or not consecutive, during any 12-month period.  The Employee's employment hereunder shall be deemed terminated by reason of Disability on the last day of the applicable period.

(f)           Death.  The Employment Period and the Employee's employment hereunder shall terminate upon his death.

6.            Rights Upon Termination

In the event the Employment Period and the Employee's employment hereunder is terminated during the Agreement Term, the Employee shall have the rights provided below.

(a)           Resignation for Good Reason; Termination Without Cause.  In the event that the Employment Period and the Employee's employment hereunder is terminated by the Employee for Good Reason or by the Company as a Termination Without Cause, the Company shall pay the Employee: (i) any earned but unpaid Base Salary through the date of termination, (ii) any unreimbursed business expenses as of the date of termination under Section 4(e) hereof and (iii) subject to Section 6(d) below, severance pay equal to twelve (12) months of Base Salary at the rate then in effect, payable in equal installments over a twelve month period following the date of termination in accordance with the normal payroll practices of the Company.

(b)           Resignation Without Good Reason; Termination for Cause; Death; Disability.  In the event that the Employment Period and the Employee's employment hereunder is terminated by the Employee Without Good Reason, by the Company for Cause or on account of death or Disability, the Employee shall not be entitled to receive, and the Company shall have no obligation to provide, any severance payments, bonus, or benefits under this Agreement; except that the Company shall pay the Employee: (i) any earned but unpaid Base Salary through the date of termination, and (ii) any unreimbursed business expenses as of the date of termination under Section 4(e) hereof.

(c)           Other Obligations.  The benefits payable to the Employee under this Agreement are not in lieu of any benefits payable under any employee benefit plan, program or arrangement of the Company, except as specifically provided herein, and upon termination of employment, the Employee will receive such benefits or payments, if any, as he may be entitled to receive pursuant to the terms and conditions of such plans, programs and arrangements.  Except for the obligations of the Company provided by this Section 6, the Company shall have no other obligations to the Employee upon his termination of employment.

(d)            Releases of Claims.  As a condition of the Employee's entitlement to any severance payment under Section 6(a) hereof, the Employee to execute and honor a release of claims in the form specified by the Company.

Page 4 of 9

7.        Restrictive Covenants

(a)       Nondisclosure of Confidential Information.

(i)      The Employee acknowledges that during the course of the Employee's employment with the Company, the Employee has had or will have access to and knowledge of certain information that the Company considers confidential, and the release of such information to unauthorized persons would be extremely detrimental to the Company.  As a consequence, the Employee hereby agrees and acknowledges that the Employee owes a duty to the Company not to disclose, and agrees that without the prior written consent of the Company, at any time, either during or after the Employee's employment with the Company, the Employee will not communicate, publish or disclose, to any person anywhere or use, any Confidential Information (as hereinafter defined), except as may be necessary or appropriate to conduct the Employee's duties hereunder, provided the Employee is acting in good faith and in the best interest of the Company, or as may be required by law or judicial process.  The Employee will use reasonable best efforts at all times to hold in confidence and to safeguard any Confidential Information from falling into the hands of any unauthorized person.  The Employee will return to the Company all Confidential Information in the Employee's possession or under the Employee's control whenever the Company shall so request, and in any event will promptly return all such Confidential Information if the Employee's relationship with the Company is terminated for any or no reason and will not retain any copies thereof.  For purposes hereof, the term "Confidential Information" shall mean any information used by or belonging or relating to the Company or any of its affiliates that is not known generally to the industry in which the Company is or may be engaged and which the Company maintains on a confidential basis, including, without limitation, any and all trade secrets and proprietary information, information relating to the Company's business and services, employee information, customer lists and records, business processes, procedures or standards, know-how, manuals, business strategies, records, financial information, in each case whether or not reduced to writing or stored electronically, as well as any information that the Company advises the Employee should be treated as confidential information.  Further, Confidential Information shall not include information which is independently obtained from a third party whose disclosure violates no duty of confidentiality to the Company.

(ii)        The Employee acknowledges and agrees that all analyses, reports, proposals, software, documentation, machine code and other intellectual property owned by the Company (collectively, the "Company's Intellectual Property") are and shall remain the sole and exclusive property of the Company, or as otherwise may be noted, and that in no event shall the Employee have any ownership interest therein.  In that connection, the Employee hereby irrevocably assigns, transfers and conveys to the Company all of his right, title and interest, if any, in and to the Company's Intellectual Property, including any rights the Employee may have of patent, copyright, trade secret or other proprietary rights in the Company's Intellectual Property.  The Employee agrees to assist the Company in every proper way to obtain and from time to time enforce patents, copyrights, trade secrets and all other proprietary and intellectual property rights and interest in and to all the Company's Intellectual Property in any and all countries, and to that end the Employee will execute and deliver all documents and other papers and materials for use in applying for, obtaining and enforcing such patents, copyrights, trademarks and other proprietary and intellectual property rights and interests, as the Company may request in writing, together with any assignments thereof to the Company or persons designated by it.  The Employee agrees that the Company is appointed as his attorney to execute all such instruments and do all such things for the purpose of assuring to the Company (or its designee) the full benefit of the provisions of this paragraph.

(b)        Noninterference with Clients or Employees.  The Employee agrees that, during the period of the Employment Period and for a period of 18 months from the date of termination of employment for any reason (the "Restricted Period"), the Employee shall not, on the Employee's own behalf or on behalf of any other person or entity, solicit or in any manner influence or encourage any current or prospective client, customer, employee or other person or entity that has a business relationship with the Company or any subsidiary, to terminate or limit in any way their relationship with the Company, or interfere in any way with such relationship.

Page 5 of 9

(c)         Noncompetition.  The Employee agrees that, during the Restricted Period, the Employee shall neither directly nor indirectly, engage or hold an interest in any business engaged in the Business in those geographic areas in which the Company or its subsidiaries conduct the Business, nor directly or indirectly, have any interest in, own, manage, operate, control, be connected with as a stockholder (other than as a stockholder of less than five percent (5%) of the issued and outstanding stock of a publicly held corporation), joint venturer, officer, director, partner, employee or consultant, or otherwise engage or invest or participate in the Business in those geographic areas in which the Company or its subsidiaries engage in the Business.  For purposes of this Agreement, "Business" shall mean (i) the marketing and distribution of pharmaceuticals, prescription medications and over-the-counter ("OTC") medications and products and pet prescription medications in all 50 states and the District of Columbia through the mail or a commercial delivery service, and (ii) any other business in which the Company or its subsidiaries are engaged in during the Restricted Period.

(d)          Survival.  The provisions of this Section 7 shall be applicable and shall survive for the time periods specified herein without regard to the termination of the Employment Period or the expiration of the Agreement Term.

(e)          Enforcement.  The Employee acknowledges and agrees that the provisions of this Section 7 are reasonable and necessary for the successful operation of the Company.  The Employee further acknowledges that if he breaches any provision of this Section 7, the Company will suffer irreparable injury.  It is therefore agreed that the Company shall have the right to enjoin any such breach or threatened breach, without posting any bond, if ordered by a court of competent jurisdiction.  The existence of this right to injunctive and other equitable relief shall not limit any other rights or remedies that the Company may have at law or in equity including, without limitation, the right to monetary and compensatory damages.  In addition, the Employee further acknowledges that if he breaches any provision of this Section 7 following his termination of employment with the Company, the Employee will forfeit the right to any unpaid severance or other payments due under this Agreement.  If any provision of this Section 7 is determined by a court of competent jurisdiction to be unenforceable in the manner set forth herein, the Employee and the Company agree that it is the intention of the parties that such provision should be enforceable to the maximum extent possible under applicable law.  If any provisions of this Section 7 are held to be invalid or unenforceable, such invalidation or unenforceability shall not affect the validity or enforceability of any other provision of this Section 7 (or any portion thereof).  For purposes of the restrictions of this Section 7, references to the "Company" include reference to its subsidiaries and affiliates.

8.           Successors and Assigns

(a)          This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company upon any sale of all or substantially all of the Company's assets, or upon any merger, consolidation or reorganization of the Company with or into any other corporation, all as though such successors and assigns of the Company and their respective successors and assigns were the Company.  Except as provided above, this Agreement shall not be assignable by the Company to any person without the prior written consent of the Employee.

(b)           This Agreement and all rights of the Employee hereunder shall inure to the benefit of and be enforceable by the Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  The Employee's obligations under this Agreement shall not be assignable by the Employee.

9.             Representations

The Employee represents and warrants that his entering into this Agreement and his employment with the Company will not be in breach of any other agreement with any current or former employer and that he is not subject to any other restrictions on solicitation of clients or customers or competing against another entity.  The Employee understands that the Company has relied on this representation in entering into this Agreement.

Page 6 of 9

10.       Board Membership

At each annual meeting of the Company's stockholders during the Employment Period, the Company will nominate Employee to serve as a member of the Board.  Employee's service as a member of the Board will be subject to any required stockholder approval.  Upon the termination of Employee's employment for any reason, unless otherwise requested by the Board, Employee agrees to resign from the Board (and all other positions held at the Company and its affiliates), and Employee, at the Board's request, will execute any documents necessary to reflect his resignation.

11.       Entire Agreement

This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and cancels and supersedes any and all prior agreements between the parties with respect to the subject matter hereof, except to the extent specifically provided herein.  Any amendment or modification of this Agreement shall not be binding unless in writing and signed by the Company and the Employee.  The Company represents that there are no other agreements with the Company or other undertakings to or for the Company which have been executed by the Employee other than as expressly set forth herein.

12.       Severability

In the event that any provision of this Agreement is determined to be invalid or unenforceable, the remaining terms and conditions of this Agreement shall be unaffected and shall remain in full force and effect, and any such determination of invalidity or unenforceability shall not affect the validity or enforceability of any other provision of this Agreement.

13.       Tax Withholding

All compensation paid to the Employee under this Agreement shall be subject to all applicable income tax, employment tax and all other federal, state and local tax withholdings and deductions.

14.       Waiver of Breach

The waiver by either party of a breach of any provision of this Agreement by the other party must be in writing and will not operate or be construed as a waiver of any subsequent breach by such other party.

15.       Notices

All notices which may be necessary or proper for either the Company or the Employee to give to the other shall be in writing and shall be delivered by hand or sent by registered or certified mail, return receipt requested, or by air courier, to the Employee at:  the Employee's then-current address as listed in the Company's payroll records or at such other address as may be provided to the Company for this purpose, and shall be sent in the manner described above to Chief Operating Officer and Chief Financial Officer, HealthWarehouse.com, Inc., 7107 Industrial Road, Florence, Kentucky, 41042, and shall be deemed given when sent, provided that any notice given under Section 5 hereof shall be deemed given only when received.  Any party may by like notice to the other party change the address at which he or they are to receive notices hereunder.

Page 7 of 9

16.         Governing Law

This Agreement shall be governed by and enforceable in accordance with the laws of the Commonwealth of Kentucky, without giving effect to the principles of conflict of laws thereof.

17.         Counterparts

This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

18.         Drug Screen

This Agreement is contingent upon the Employee's successful completion of a pre-employment drug screen.  In the event that, for any reason, such drug screen shall not be successfully completed, this Agreement shall be null and void and the Company and the Employee shall have no obligations hereunder.

Page 8 of 9

IN WITNESS WHEREOF, the Company and the Employee have executed this Agreement as of May 9, 2016.

EMPLOYEE

_/s/ Lalit Dhadphale                                                                    

       Lalit Dhadphale

HEALTHWAREHOUSE.COM, INC.

_/s/    Daniel Seliga                                                                       

By:     Daniel Seliga

Title:   Chief Operating Officer

Page 9 of 9

EX-31.1

Exhibit 31.1

CERTIFICATION OF C.E.O. PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, in the capacity and date indicated below, hereby certifies that:

1. I have reviewed this quarterly report on Form 10-Q of HealthWarehouse.com, Inc.

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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(d)) 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(s) 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 the 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 control over financial reporting.

May 12, 2016	/s/ Lalit Dhadphale
	Lalit Dhadphale
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF C.F.O. PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, in the capacity and date indicated below, hereby certifies that:

1. I have reviewed this quarterly report on Form 10-Q of HealthWarehouse.com, Inc.

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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(d)) 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(s) 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 the 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 control over financial reporting.

May 12, 2016	/s/ Daniel Seliga
	Daniel Seliga
	Principal Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATE PURSUANT TO 18 U.S.C. SECTION 1350, SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (Chief Executive Officer)

In connection with the annual report of HealthWarehouse.com, Inc. (the "Company") on Form 10-Q for the quarterly period ended March 31, 2016 as filed with the Securities and Exchange Commission (the "Report"), I, Lalit Dhadphale, President and Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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 the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 12, 2016	/s/  Lalit Dhadphale
	Lalit Dhadphale
	President and Chief Executive Officer

A signed original of this written statement required by section 906 has been provided to HealthWarehouse.com, Inc. and will be retained by HealthWarehouse.com, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

This certification is being furnished to the SEC with this Report pursuant to Section 906 of the Sarbanes – Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.

EX-32.2

Exhibit 32.2

CERTIFICATE PURSUANT TO 18 U.S.C. SECTION 1350, SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (Chief Financial Officer)

In connection with the annual report of HealthWarehouse.com, Inc. (the "Company") on Form 10-Q for the quarterly period ended March 31, 2016 as filed with the Securities and Exchange Commission (the "Report"), I, Daniel Seliga, Principal Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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 the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 12, 2016	/s/  Daniel Seliga
	Daniel Seliga
	Principal Financial Officer

A signed original of this written statement required by section 906 has been provided to HealthWarehouse.com, Inc. and will be retained by HealthWarehouse.com, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

This certification is being furnished to the SEC with this Report pursuant to Section 906 of the Sarbanes – Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 10, 2016
Document And Entity Information
Entity Registrant Name	HealthWarehouse.com, Inc.
Entity Central Index Key	0000754813
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		37,693,404
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2016

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash	$ 24,866	$ 11,217
Restricted cash	115,088	145,088
Accounts receivable, net of allowance of $47,143 as of March 31, 2016 and December 31, 2015	64,521	51,627
Inventories - finished goods, net	241,642	182,647
Prepaid expenses and other current assets	85,423	81,718
Total current assets	531,540	472,297
Property and equipment, net of accumulated depreciation of $827,528 and $801,270 as of March 31, 2016 and December 31, 2015	382,990	409,248
Web development costs, net of accumulated amortization of $165,699 and $146,448 as of March 31, 2016 and December 31, 2015	65,311	84,562
Total assets	979,841	966,107
Current liabilities:
Accounts payable - trade	2,310,300	2,189,649
Accounts payable - related parties	260	862
Accrued expenses and other current liabilities	347,844	597,665
Current portion of equipment lease payable	29,349	46,143
Notes payable and other advances, net of debt discount of $12,056 and $0 as of March 31, 2016 and December 31, 2015, respectively	1,087,944	991,089
Note payable and other advances - related parties	16,058	23,889
Redeemable preferred stock - Series C; par value $0.001 per share; 10,000 designated Series C: 10,000 issued and outstanding as of March 31, 2016 and December 31, 2015 (aggregate liquidation preference of $1,000,000)	1,000,000	1,000,000
Total current liabilities	4,791,755	4,849,297
Total liabilities	$ 4,791,755	$ 4,849,297
Stockholders' deficiency:
Preferred stock - par value $0.001 per share; authorized 1,000,000 shares; issued and outstanding as of March 31, 2016 and December 31, 2015 as follows:
Convertible preferred stock - Series A - 200,000 shares designated Series A; 44,443 shares available to be issued; no shares issued and outstanding
Convertible preferred stock - Series B - 625,000 shares designated Series B; 517,359 and 483,512 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively (aggregate liquidation preference of $4,974,601 and $4,889,043 as of March 31, 2016 and December 31, 2015, respectively)	$ 517	$ 484
Common stock - par value $0.001 per share; authorized 100,000,000 shares; 38,844,374 shares issued and 37,665,162 shares outstanding as of March 31, 2016 and December 31, 2015	38,844	38,844
Additional paid-in capital	31,067,056	30,656,598
Treasury stock, at cost, 1,179,212 shares as of March 31, 2016 and December 31, 2015	(3,419,715)	(3,419,715)
Accumulated deficit	(31,498,616)	(31,159,401)
Total stockholders' deficiency	(3,811,914)	(3,883,190)
Total liabilities and stockholders' deficiency	$ 979,841	$ 966,107

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Current liabilities:
Accounts receivable, net of allowance	$ 47,143	$ 47,143
Property and equipment, net of accumulated depreciation	827,528	801,270
Web development costs, net of accumulated amortization	165,699	146,448
Current portion of notes payable, net of debt discount	$ 12,056	$ 0
Redeemable preferred stock Series C, par value	0.001	0.001
Redeemable preferred stock Series C, shares designated	10,000	10,000
Redeemable preferred stock Series C, shares issued	10,000	10,000
Redeemable preferred stock Series C, shares outstanding	10,000	10,000
Redeemable preferred stock Series C, aggregate liquidation preference	$ 1,000,000	$ 1,000,000
Stockholders' deficiency:
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	1,000,000	1,000,000
Series A Convertible preferred stock, shares designated	200,000	200,000
Series A Convertible preferred stock, shares available to be issued	44,443	44,443
Series A Convertible preferred stock, shares issued	0	0
Series A Convertible preferred stock, shares outstanding	0	0
Series B Convertible preferred stock, shares designated	625,000	625,000
Series B Convertible preferred stock, shares issued	517,359	483,512
Series B Convertible preferred stock, shares outstanding	517,359	483,512
Series B Convertible preferred stock, aggregate liquidation preference	$ 4,974,601	$ 4,889,043
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	100,000,000	100,000,000
Common stock, shares issued	38,844,374	38,844,374
Common stock, shares outstanding	37,665,162	37,665,162
Treasury stock, shares	1,179,212	1,179,212

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Consolidated Statements Of Operations
Net sales	$ 2,347,798	$ 1,612,677
Cost of sales	891,820	631,163
Gross profit	1,455,978	981,514
Operating expenses:
Selling, general and administrative expenses	1,683,716	1,107,550
Net loss from operations	(227,738)	(126,036)
Other expense:
Interest expense	(25,919)	(74,752)
Total other expense	(25,919)	(74,752)
Net loss	(253,657)	(200,788)
Preferred stock:
Series B convertible contractual dividends	(85,558)	(79,961)
Net loss attributable to common stockholders	$ (339,215)	$ (280,749)
Per share data:
Net loss - basic and diluted	$ (0.01)	$ (0.01)
Series B convertible contractual dividends	(0.00)	(0.00)
Net loss attributable to common stockholders - basic and diluted	$ (0.01)	$ (0.01)
Weighted average number of common shares outstanding - basic and diluted	37,665,162	37,570,383

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Cash flows from operating activities
Net loss	$ (253,657)	$ (200,788)	$ (626,682)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for doubtful accounts		90
Provision for employee advance reserve		2,143
Depreciation and amortization	$ 45,509	45,661
Stock-based compensation	$ 75,138	79,005
Gain on settlement of accounts payable		(66,179)
Amortization of debt discount	$ 3,444	54,517
Changes in operating assets and liabilities:
Accounts receivable	(12,894)	(11,558)
Inventories - finished goods	(58,995)	(1,034)
Prepaid expenses and other current assets	(3,705)	12,857
Accounts payable - trade	120,651	(65,472)
Accounts payable - related parties	(602)	(382)
Accrued expenses and other current liabilities	(15,526)	(57,168)
Net cash used in operating activities	(100,637)	$ (208,308)	(548,281)
Cash flows from investing activities
Change in restricted cash	$ 30,000
Capital expenditures		$ (5,539)
Website development costs		(10,942)
Net cash provided by (used in) investing activities	$ 30,000	(16,481)
Cash flows from financing activities
Principal payments on equipment leases payable	(16,794)	$ (15,382)
Proceeds from issuance of notes payable	108,911
Repayment of notes payable	(7,831)
Net cash provided by (used in) financing activities	84,286	$ (15,382)
Net increase (decrease) in cash	13,649	(240,171)
Cash - beginning of period	11,217	506,019	506,019
Cash - end of period	24,866	265,848	$ 11,217
Cash paid for:
Interest	22,474	19,544
Non-cash investing and financing activities:
Issuance of Series B preferred stock for settlement of accrued dividends	319,853	298,918
Warrants issued as debt discount in connection with notes payable	15,500	41,300
Accrual of contractual dividends on Series B convertible preferred stock	$ 85,558	$ 79,961

XML

Organization and Basis of Presentation

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

1. Organization and Basis of Presentation

HealthWarehouse.com, Inc. ("HEWA" or the "Company"), a Delaware company incorporated in 1998, is an online mail order pharmacy, licensed in 50 states and the District of Columbia to focus on the out-of-pocket prescription drug market. The Company is Verified Internet Pharmacy Practice Site ("VIPPS") accredited by the National Association of Boards of Pharmacy ("NABP").  The Company markets a complete range of generic, brand name, and pet prescription medications as well as over-the-counter ("OTC") medications and products.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed consolidated financial statements of the Company as of March 31, 2016 and for the three months ended March 31, 2016 and 2015. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the operating results for the full year ending December 31, 2016 or any other period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related disclosures of the Company as of December 31, 2015 and for the year then ended, which were filed with the Securities and Exchange Commission on Form 10-K on March 25, 2016.

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Going Concern and Management's Liquidity Plans

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

2. Going Concern and Management's Liquidity Plans

Since inception, the Company has financed its operations primarily through debt and equity financings and advances from related parties. As of March 31, 2016, the Company had a working capital deficiency of $4,260,215 and an accumulated deficit of $31,498,616. During the three months ended March 31, 2016 and the year ended December 31, 2015, the Company incurred net losses of $253,657 and $626,682, respectively and used cash in operating activities of $100,637 and $548,281, respectively. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

Subsequent to March 31, 2016, the Company continues to incur net losses, use cash in operating activities and experience cash and working capital constraints.

The Company is subject to a 2013 Notice of Redemption related to its Series C Redeemable Preferred Stock aggregating $1,000,000, whereby the Company must now apply all of its assets to redemption of the Series C Preferred Stock and to no other corporate purpose, except to the extent prohibited by Delaware law governing distributions to stockholders (the Company is not permitted to utilize toward the redemption those assets required to pay its debts as they come due and those assets required to continue as a going concern).

The Company recognizes it will need to raise additional capital in order to fund operations, meet its payment obligations and execute its business plan. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company and whether the Company will become profitable and generate positive operating cash flow. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, attempt to extend note repayments, attempt to negotiate the preferred stock redemption and reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.  If the Company is unable to obtain financing on a timely basis, the Company could be forced to sell its assets, discontinue its operation and /or seek reorganization under the U.S. bankruptcy code.

Accordingly, the accompanying condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the condensed consolidated financial statements do not necessarily represent realizable or settlement values. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

3. Summary of Significant Accounting Policies

Principles of Consolidation

The condensed consolidated financial statements include the accounts of HealthWarehouse.com, Inc., Hwareh.com, Inc., Hocks.com, Inc., ION Holding NV and ION Belgium NV, its wholly-owned subsidiaries. ION Holding NV and ION Belgium NV are inactive subsidiaries. All material inter-company balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  The Company's significant estimates include reserves related to accounts receivable and inventory, the recoverability and useful lives of long-lived assets, the valuation allowance related to deferred tax assets, the valuation of equity instruments and debt discounts.

Reclassifications

Certain accounts in the prior period condensed consolidated financial statements have been reclassified for comparison purposes to conform to the presentation of the current period condensed consolidated financial statements.  These reclassifications had no effect on the previously reported net loss.

Net Earnings (Loss) Per Share of Common Stock

Basic net earnings (loss) per share is computed by dividing net earnings (loss) attributable to Common Stockholders by the weighted average number of common shares outstanding during the period.  Diluted net earnings (loss) per share reflects the potential dilution that could occur if securities or other instruments to issue Common Stock were exercised or converted into Common Stock.  Potentially dilutive securities are excluded from the computation of diluted net earnings (loss) per share if their inclusion would be anti-dilutive and consist of the following:

	March 31,
	2016		2015
Options		5,381,205		3,944,557
Warrants		10,121,198		9,839,044
Series B Convertible Preferred Stock		5,892,720		5,507,202
Total potentially dilutive shares		21,395,123		19,290,803

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Accrued Expenses and Other Current Liabilities

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

4. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

	March 31, 2016		December 31, 2015
Deferred Rent	$	19,389	$	25,852
Advertising		76,639		76,639
Salaries and Benefits		58,937		64,007
Dividend Payable		85,558		319,854
Accrued Interest		44,249		44,249
Accrued Rent		50,078		49,614
Other		12,994		17,450
Total	$	347,844	$	597,665

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Notes Payable

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

5. Notes Payable

The Company is a party to a Loan and Security Agreement (the "Loan Agreement") with a lender (the "Lender").  Under the terms of the Loan Agreement, the Company borrowed an aggregate of $1,000,000 from the Lender (the "Loan").  The Loan is evidenced by a promissory note (the "Senior Note") in the face amount of $1,000,000 (as amended).  The Senior Note bears interest on the unpaid principal balance of the Note until the full amount of principal has been paid at a floating rate equal to the Prime Rate plus four and one-quarter percent (4.25%) per annum (7.75% as of March 31, 2016).  Under the terms of the Loan Agreement, the Company has agreed to make monthly payments of accrued interest on the first day of every month. The principal amount and all unpaid accrued interest on the Note is payable on May 31, 2016, or earlier in the event of default or a sale or liquidation of the Company. The Loan may be prepaid in whole or in part at any time by the Company without penalty.  The Senior Note contains financial covenants which require the Company to meet certain minimum targets for earnings before interest, taxes and non-cash expenses, including depreciation, amortization and stock-based compensation ("EBITDAS").  The Company granted the Lender a first, priority security interest in all of the Company's assets, in order to secure the Company's obligation to repay the Loan, including a Deposit Account Control Agreement, which grants the Lender a security interest in certain bank accounts.

On January 11, 2016, the Company entered into an Amendment to Promissory Note in the face amount of $100,000 with a different lender, effective October 31, 2015, which extended the maturity date of the note payable from November 1, 2015 to October 31, 2016.  In consideration of the extension of the maturity date of the note payable, the Company issued to the lender a five-year warrant to purchase 75,000 shares of Common Stock at an exercise price of $0.25 per share. The warrants had a fair value of $15,500 using the Black-Scholes model (see note 6) which was established as debt discount during the three months ended March 31, 2016 and will be amortized using the effective interest method over the remaining term of the Promissory Note.   Including the value of the warrants issued in connection with the extension of the maturity date of the Promissory Note, the Promissory Note has an effective interest rate of 23% per annum during the extension period.

The Company recorded amortization of debt discount associated with notes payable of $3,444 and $54,517 for the three months ended March 31, 2016 and 2015, respectively.

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Stockholders' Deficiency

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

6. Stockholders' Deficiency

Preferred Stock

As of March 31, 2016 and December 31, 2015, the Company had accrued contractual dividends of $85,558 and $319,853, respectively, related to the Series B Preferred Stock. On January 1, 2016 and 2015, the Company issued 33,847 and 31,633 shares of Series B convertible preferred stock valued at approximately $320,000 and $299,000, respectively, representing approximately $0.66 in value per share of Series B Preferred Stock outstanding on each date, to the Series B convertible preferred stock holders as payment in kind for dividends.

Stock Options

Valuation

In applying the Black-Scholes option pricing model to stock options, the Company used the following weighted average assumptions:

	For The Three Months Ended
	March 31,
	2016	2015
Risk free interest rate	1.63% to 2.12%	n/a
Dividend yield	0.00%	n/a
Expected volatility	199% to 200.0%	n/a
Expected life in years	5.5 to 10.0	n/a

Grants

The weighted average fair value of the stock options granted during the three months ended 31, 2016 was $0.24 per share. There were no stock options granted during the three months March 31, 2015.

During the three months ended March 31, 2016, the Company granted options to consultants and directors of the Company to purchase an aggregate of 172,254 shares of common stock under a previously approved plan at exercise prices ranging between $0.24 and $0.25 per share for an aggregate grant date value of $41,379.  The options vested on the grant date and have a term of ten years. 

Stock-based compensation expense related to stock options was recorded in the condensed consolidated statements of operations as a component of selling, general and administrative expenses and totaled $75,138 and $78,789 for the three months ended March 31, 2016 and 2015, respectively.

As of March 31, 2016, stock-based compensation expense related to stock options of $996,064 remains unamortized, including $104,495 which is being amortized over the weighted average remaining period of 2.0 years.  The remaining $891,569 is related to a performance based option where vesting is currently deemed to be improbable and no amount is being amortized.

Summary

A summary of the stock option activity during the three months ended March 31, 2016 is presented below:

				Weighted		Average
				Average		Remaining	Aggregate
	Number of			Exercise		Life	Intrinsic
	Options			Price		In Years	Value
Outstanding, January 1, 2016		5,341,284		$	0.70
Granted		172,254			0.24
Exercised		-			-
Forfeited		(132,333	)		0.49
Outstanding, March 31, 2016		5,381,205		$	0.69	7.6	$	332,554
Exercisable, March 31, 2016		4,169,539		$	0.62	7.6	$	240,254

The following table presents information related to stock options at March 31, 2016:

		Options Outstanding				Options Exercisable
		Weighted				Weighted		Weighted
Range of		Average		Outstanding		Average		Average	Exercisable
Exercise		Exercise		Number of		Exercise		Remaining Life	Number of
Price		Price		Options		Price		In Years	Options
$	0.09 - $2.20	$	0.23		4,701,705	$	0.25	8.0	3,740,039
$	2.21 - $3.80		3.35		492,500		2.88	3.8	242,500
$	3.81 - $6.99		5.17		187,000		5.17	5.4	187,000
		$	0.69		5,381,205	$	0.62	7.6	4,169,539

Warrants

Valuation

In applying the Black-Scholes option pricing model to stock warrants, the Company used the following weighted average assumptions:

	For The Three Months Ended
	March 31,
	2016	2015
Risk free interest rate	1.58%	1.50%
Dividend yield	0.00%	0.00%
Expected volatility	200.0%	196.0%
Contractual term in years	5.00	5.00

Grants

The weighted average fair value of the stock warrants granted during the three months ended March 31, 2016 and 2015, was $0.24 and $0.08 per share, respectively.

Stock-based compensation expense related to warrants for the three months ended March 31, 2016 and 2015 was recorded in the condensed consolidated statements of operations as a component of selling, general and administrative expenses and totaled $0 and $216, respectively.  As of March 31, 2016, stock-based compensation expense related to warrants of $576,840 remains unamortized.  The remaining $576,840 is related to a performance based warrant where vesting is currently deemed to be improbable and no amount is being amortized.

A summary of the stock warrant activity during the three months ended March 31, 2016 is presented below:

			Weighted		Average
			Average		Remaining	Aggregate
	Number of		Exercise		Life	Intrinsic
	Warrants		Price		In Years	Value
Outstanding, January 1, 2016		10,046,198	$	0.41
Granted		75,000		0.25
Exercised		-		-
Forfeited		-		-
Outstanding, March 31, 2016		10,121,198	$	0.40	3.1	$	150,922
Exercisable, March 31, 2016		9,871,198	$	0.34	3.1	$	150,922

The following table presents information related to stock warrants at March 31, 2016:

		Warrants Outstanding			Warrants Exercisable
		Weighted			Weighted		Weighted
Range of		Average		Outstanding	Average		Average	Exercisable
Exercise		Exercise		Number of	Exercise		Remaining Life	Number of
Price		Price		Warrants	Price		In Years	Warrants
$	0.10 - $0.35	$	0.25	9,571,198	$	0.25	3.2	9,571,198
$	0.36 - $3.00		2.90	520,000		2.90	0.5	270,000
$	3.01 - $4.95		4.95	30,000		4.95	1.5	30,000
$	0.10 - $4.95	$	0.40	10,121,198	$	0.33	3.1	9,871,198

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Commitments and Contingent Liabilities

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

7. Commitments and Contingent Liabilities

Operating Leases

The Company is a party to a lease agreement for approximately 28,500 square feet of office and storage space with an entity. On March 15, 2016, the Company entered into an amendment of the lease agreement which extended the lease for an additional three years.  The amended monthly lease rate will be $5,462 in 2016, $6,649 in 2017, $6,886 in 2018 and $7,124 in 2019.  The lease expires on December 31, 2019.  The Company accounts for rent expense using the straight line method of accounting, deferring the difference between actual rent due and the straight line amount. Deferred rent payable of $19,389 and $25,852 as of March 31, 2016 and December 31, 2015, respectively, has been included in accrued expenses and other current liabilities on the condensed consolidated balance sheets.

On June 7, 2013, Pagosa signed a three year lease for $1,000 per month to house an office, pharmacy as well as inventory and is located in Lawrenceburg, IN.  On July 8, 2013, the parties agreed to extend the lease for two additional years, such that the new termination date is now June 7, 2018.  On January 14, 2014, the Company closed Pagosa Health and vacated the Lawrenceburg facility.  The Company is currently in discussions with the Landlord regarding termination of the lease related to the building.   The present value of the remaining lease payments of $50,078 is reflected as a component of accrued expenses and other liabilities on the condensed consolidated financial statements as of March 31, 2016.

Future minimum payments, by year and in the aggregate, under operating leases as of March 31, 2016 are as follows:

For years ending December 31,	Amount
2016	$	58,152
2017		91,783
2018		87,633
2019		85,482
Total future minimum lease payments	$	323,050

During the three months ended March 31, 2016 and 2015, the Company recorded aggregate rent expense of $20,274 and $18,342 (net of sub-lease), respectively.

Litigation

In the ordinary course of business, we may become subject to lawsuits and other claims and proceedings that might arise from litigation matters or regulatory audits. Such matters are subject to uncertainty and outcomes are often not predictable with assurance. Our management does not presently expect that any such matters will have a material adverse effect on the Company's condensed consolidated financial condition or condensed consolidated results of operations. We are not currently involved in any pending or threatened material litigation or other material legal proceedings nor have we been made aware of any penalties from regulatory audits.

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Concentrations

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

8. Concentrations

During the three months ended March 31, 2016, three vendors represented 49%, 16% and 15% of total inventory purchases. During the three months ended March 31, 2015, two vendors represented 74% and 10% of total inventory purchases, respectively.

Two vendors represented 40% and 12% of the accounts payable balance as of March 31, 2016.  Two vendors represented 43% and 13% of the accounts payable balance as of December 31, 2015.

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Subsequent Events

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

9. Subsequent Events

The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed.

Stock Option Grants

On April 8, 2016, the Company granted options to directors of the Company to purchase an aggregate of 94,848 shares of common stock under a previously approved plan at an exercise price of $0.29 per share for an aggregate grant date value of $27,000.  The options vested on the grant date and have a term of ten years.  The options were granted as part of director compensation approved by the Compensation Committee.

Common Stock Issued

On May 3, 2016, the Company issued 28,242 shares of common stock to an investor as a result of a cashless exercise of warrants.

Employment Agreement

On May 9, 2016, the Company entered into an employment agreement (the "Employment Agreement") with Mr. Lalit Dhadphale.  The terms of the Employment Agreement include a term of two years beginning on January 1, 2016 with an extension provision, the titles and positions of Chief Executive Officer and President, an initial base salary of $175,000 per year, subject to certain bonus and severance provisions.  Mr. Dhadphale's agreement is bound by restrictive covenants regarding disclosure of confidential information, non-solicitation and employee non-competition.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2016

Summary Of Significant Accounting Policies Policies

Principles of Consolidation

The condensed consolidated financial statements include the accounts of HealthWarehouse.com, Inc., Hwareh.com, Inc., Hocks.com, Inc., ION Holding NV and ION Belgium NV, its wholly-owned subsidiaries. ION Holding NV and ION Belgium NV are inactive subsidiaries. All material inter-company balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  The Company's significant estimates include reserves related to accounts receivable and inventory, the recoverability and useful lives of long-lived assets, the valuation allowance related to deferred tax assets, the valuation of equity instruments and debt discounts.

Reclassifications

Certain accounts in the prior period condensed consolidated financial statements have been reclassified for comparison purposes to conform to the presentation of the current period condensed consolidated financial statements.  These reclassifications had no effect on the previously reported net loss.

Net Earnings (Loss) Per Share of Common Stock

Basic net earnings (loss) per share is computed by dividing net earnings (loss) attributable to Common Stockholders by the weighted average number of common shares outstanding during the period.  Diluted net earnings (loss) per share reflects the potential dilution that could occur if securities or other instruments to issue Common Stock were exercised or converted into Common Stock.  Potentially dilutive securities are excluded from the computation of diluted net earnings (loss) per share if their inclusion would be anti-dilutive and consist of the following:

	March 31,
	2016		2015
Options		5,381,205		3,944,557
Warrants		10,121,198		9,839,044
Series B Convertible Preferred Stock		5,892,720		5,507,202
Total potentially dilutive shares		21,395,123		19,290,803

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2016

Summary Of Significant Accounting Policies Tables

Schedule of Potentially Dilutive Securities

	March 31,
	2016		2015
Options		5,381,205		3,944,557
Warrants		10,121,198		9,839,044
Series B Convertible Preferred Stock		5,892,720		5,507,202
Total potentially dilutive shares		21,395,123		19,290,803

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Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Mar. 31, 2016

Accrued Expenses And Other Current Liabilities Tables

Accrued expenses and other current liabilities

	March 31, 2016		December 31, 2015
Deferred Rent	$	19,389	$	25,852
Advertising		76,639		76,639
Salaries and Benefits		58,937		64,007
Dividend Payable		85,558		319,854
Accrued Interest		44,249		44,249
Accrued Rent		50,078		49,614
Other		12,994		17,450
Total	$	347,844	$	597,665

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Stockholders' Deficiency (Tables)

3 Months Ended

Mar. 31, 2016

Stock Option [Member]

Schedule of Stock Granted

	For The Three Months Ended
	March 31,
	2016	2015
Risk free interest rate	1.63% to 2.12%	n/a
Dividend yield	0.00%	n/a
Expected volatility	199% to 200.0%	n/a
Expected life in years	5.5 to 10.0	n/a

Summary of Stock Activity

				Weighted		Average
				Average		Remaining	Aggregate
	Number of			Exercise		Life	Intrinsic
	Options			Price		In Years	Value
Outstanding, January 1, 2016		5,341,284		$	0.70
Granted		172,254			0.24
Exercised		-			-
Forfeited		(132,333	)		0.49
Outstanding, March 31, 2016		5,381,205		$	0.69	7.6	$	332,554
Exercisable, March 31, 2016		4,169,539		$	0.62	7.6	$	240,254

Summary of Stock Outstanding and Exercisable

		Options Outstanding				Options Exercisable
		Weighted				Weighted		Weighted
Range of		Average		Outstanding		Average		Average	Exercisable
Exercise		Exercise		Number of		Exercise		Remaining Life	Number of
Price		Price		Options		Price		In Years	Options
$	0.09 - $2.20	$	0.23		4,701,705	$	0.25	8.0	3,740,039
$	2.21 - $3.80		3.35		492,500		2.88	3.8	242,500
$	3.81 - $6.99		5.17		187,000		5.17	5.4	187,000
		$	0.69		5,381,205	$	0.62	7.6	4,169,539

Warrant [Member]

Schedule of Stock Granted

	For The Three Months Ended
	March 31,
	2016	2015
Risk free interest rate	1.58%	1.50%
Dividend yield	0.00%	0.00%
Expected volatility	200.0%	196.0%
Contractual term in years	5.00	5.00

Summary of Stock Activity

			Weighted		Average
			Average		Remaining	Aggregate
	Number of		Exercise		Life	Intrinsic
	Warrants		Price		In Years	Value
Outstanding, January 1, 2016		10,046,198	$	0.41
Granted		75,000		0.25
Exercised		-		-
Forfeited		-		-
Outstanding, March 31, 2016		10,121,198	$	0.40	3.1	$	150,922
Exercisable, March 31, 2016		9,871,198	$	0.34	3.1	$	150,922

Summary of Stock Outstanding and Exercisable

		Warrants Outstanding			Warrants Exercisable
		Weighted			Weighted		Weighted
Range of		Average		Outstanding	Average		Average	Exercisable
Exercise		Exercise		Number of	Exercise		Remaining Life	Number of
Price		Price		Warrants	Price		In Years	Warrants
$	0.10 - $0.35	$	0.25	9,571,198	$	0.25	3.2	9,571,198
$	0.36 - $3.00		2.90	520,000		2.90	0.5	270,000
$	3.01 - $4.95		4.95	30,000		4.95	1.5	30,000
$	0.10 - $4.95	$	0.40	10,121,198	$	0.33	3.1	9,871,198

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Commitments and Contingent Liabilities (Tables)

3 Months Ended

Mar. 31, 2016

Commitments And Contingent Liabilities Tables

Summary of future minimum payments under operating leases

For years ending December 31,	Amount
2016	$	58,152
2017		91,783
2018		87,633
2019		85,482
Total future minimum lease payments	$	323,050

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Going Concern and Management's Liquidity Plans (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Going Concern And Managements Liquidity Plans Details Narrative
Working Capital Deficiency	$ (4,260,215)
Accumulated deficit	(31,498,616)		$ (31,159,401)
Net losses	(253,657)	$ (200,788)	(626,682)
Net Cash Used in Operating Activities	$ (100,637)	$ (208,308)	$ (548,281)

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Summary of Significant Accounting Policies (Details) - USD ($)	Mar. 31, 2016	Mar. 31, 2015
Summary Of Significant Accounting Policies Details
Options	$ 5,381,205	$ 3,944,557
Warrants	10,121,198	9,839,044
Series B Convertible Preferred Stock	5,892,720	5,507,202
Total potentially dilutive shares	$ 21,395,123	$ 19,290,803

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Accrued Expenses and Other Current Liabilities (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Accrued Expenses And Other Current Liabilities Details
Deferred rent	$ 19,389	$ 25,852
Advertising	76,639	76,639
Salaries and benefits	58,937	64,007
Dividends payable	85,558	319,854
Accrued interest	44,249	44,249
Accrued Rent	50,078	49,614
Other	12,994	17,450
Total	$ 347,844	$ 597,665

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Notes Payable (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Interest rate on Senior Note	7.75%
Fair value related to warrants	$ 15,500
Amortization of debt discount	3,444	$ 54,517
Lender [Member]
Borrowed loan	$ 1,000,000

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Stockholders' Deficiency (Details) - Stock Option [Member]	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Risk free interest rate
Dividend yield	0.00%
Expected volatility
Minimum [Member]
Risk free interest rate	1.63%
Expected volatility	199.00%
Expected life in years	5 years 6 months
Maximum [Member]
Risk free interest rate	2.12%
Expected volatility	200.00%
Expected life in years	10 years

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Stockholders' Deficiency (Details 1) - Stock Option [Member]	3 Months Ended
	Mar. 31, 2016 USD ($) $ / shares shares
Number of Options, outstanding
Outstanding, beginning of period (in shares) | shares	5,341,284
Granted | shares	172,254
Exercised | shares
Forfeited | shares	(132,333)
Outstanding, end of period (in shares) | shares	5,381,205
Exercisable, March 31, 2016 | shares	4,169,539
Weighted average exercise price
Outstanding, beginning of period (in dollars per share) | $ / shares	$ 0.70
Granted | $ / shares	$ 0.24
Exercised | $ / shares
Forfeited | $ / shares	$ 0.49
Outstanding, end of period (in dollars per share) | $ / shares	0.69
Exercisable, March 31, 2016 | $ / shares	$ 0.62
Weighted Average Remaining Life In Years
Weighted Average Remaining Life (in years) Outstanding	7 years 7 months 6 days
Weighted Average Remaining Life (in years) Exercisable	7 years 7 months 6 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding | $	$ 332,554
Aggregate Intrinsic Value Exercisable, March 31, 2016 | $	$ 240,254

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Stockholders' Deficiency (Details 2) - Stock Option [Member] - $ / shares	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Weighted Average Exercise Price Outstanding	$ 0.69	$ 0.70
Number Outstanding	5,381,205	5,341,284
Weighted Average Exercise Price Exercisable	$ 0.62
Weighted Average Remaining Years of Contractual Life	7 years 7 months 6 days
Number Exercisable	4,169,539
$0.09 - $2.20
Weighted Average Exercise Price Outstanding	$ 0.23
Number Outstanding	4,701,705
Weighted Average Exercise Price Exercisable	$ 0.25
Weighted Average Remaining Years of Contractual Life	8 years
Number Exercisable	3,740,039
$2.21 - $3.80
Weighted Average Exercise Price Outstanding	$ 3.35
Number Outstanding	492,500
Weighted Average Exercise Price Exercisable	$ 2.88
Weighted Average Remaining Years of Contractual Life	3 years 9 months 18 days
Number Exercisable	242,500
$3.81 - $6.99
Weighted Average Exercise Price Outstanding	$ 5.17
Number Outstanding	187,000
Weighted Average Exercise Price Exercisable	$ 5.17
Weighted Average Remaining Years of Contractual Life	5 years 4 months 24 days
Number Exercisable	187,000

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Stockholders' Deficiency (Details 3) - Warrant [Member]	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Risk free interest rate	1.58%	1.50%
Dividend yield	0.00%	0.00%
Expected volatility	200.00%	196.00%
Contractual term in years	5 years	5 years

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Stockholders' Deficiency (Details 4) - Warrant [Member]	3 Months Ended
	Mar. 31, 2016 USD ($) $ / shares shares
Number of Warrants, outstanding
Outstanding, beginning of period (in shares) | shares	10,046,198
Granted | shares	75,000
Exercised | shares
Forfeited | shares
Outstanding, end of period (in shares) | shares	10,121,198
Exercisable, March 31, 2016 | shares	9,871,198
Weighted average exercise price
Outstanding, beginning of period (in dollars per share) | $ / shares	$ 0.41
Granted | $ / shares	$ 0.25
Exercised | $ / shares
Forfeited | $ / shares
Outstanding, end of period (in dollars per share) | $ / shares	$ 0.40
Exercisable, March 31, 2016 | $ / shares	$ 0.34
Weighted Average Remaining Life In Years
Weighted Average Remaining Life (in years) Outstanding	3 years 1 month 6 days
Weighted Average Remaining Life (in years) Exercisable	3 years 1 month 6 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding | $	$ 150,922
Aggregate Intrinsic Value Exercisable, March 31, 2016 | $	$ 150,922

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Stockholders' Deficiency (Details 5) - Warrant [Member] - $ / shares	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Weighted Average Exercise Price Outstanding	$ 0.40	$ 0.41
Number Outstanding	10,121,198	10,046,198
Weighted Average Exercise Price Exercisable	$ 0.34
Weighted Average Remaining Years of Contractual Life	3 years 1 month 6 days
Number Exercisable	9,871,198
$0.10 - $0.35
Weighted Average Exercise Price Outstanding	$ 0.25
Number Outstanding	9,571,198
Weighted Average Exercise Price Exercisable	$ 0.25
Weighted Average Remaining Years of Contractual Life	3 years 2 months 12 days
Number Exercisable	9,571,198
$0.36 - $3.00
Weighted Average Exercise Price Outstanding	$ 2.9
Number Outstanding	520,000
Weighted Average Exercise Price Exercisable	$ 2.9
Weighted Average Remaining Years of Contractual Life	6 months
Number Exercisable	270,000
$3.01 - $4.95
Weighted Average Exercise Price Outstanding	$ 4.95
Number Outstanding	30,000
Weighted Average Exercise Price Exercisable	$ 4.95
Weighted Average Remaining Years of Contractual Life	1 year 6 months
Number Exercisable	30,000
$0.10 - $4.95
Weighted Average Exercise Price Outstanding	$ 0.4
Number Outstanding	10,121,198
Weighted Average Exercise Price Exercisable	$ 0.33
Weighted Average Remaining Years of Contractual Life	3 years 1 month 6 days
Number Exercisable	9,871,198

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Stockholders' Deficiency (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Stock Option [Member]
Weighted Average Fair Value	$ 0.24	$ 0.00
Selling, General And Administrative Expenses	$ 75,138	$ 78,789
Stock-based compensation expense, unamortized	996,064
Stock-based compensation expense, amortized	$ 104,495
Weighted Average Remaining Period	2 years
Performance based option vesting	$ 891,569
Warrant [Member]
Weighted Average Fair Value	$ 0.24	$ 0.08
Selling, General And Administrative Expenses	$ 0	$ 216
Stock-based compensation expense, unamortized	$ 576,840
Series B Preferred Stock [Member]
Preferred Stock Contractual Dividends	85,558		319,853
Consultants [Member] | Stock Option [Member]
Common stock purchased	172,254
Aggregate grant date value	$ 41,379
Consultants [Member] | Stock Option [Member] | Minimum [Member]
Weighted Average Fair Value	$ 0.24
Consultants [Member] | Stock Option [Member] | Maximum [Member]
Weighted Average Fair Value	$ 0.25

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Commitments and Contingent Liabilities (Details)	Mar. 31, 2016 USD ($)
Commitments And Contingent Liabilities Details
2016	$ 58,152
2017	91,783
2018	87,633
2019	85,482
Total future minimum lease payments	$ 323,050

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Commitments and Contingent Liabilities (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Commitments And Contingent Liabilities Details Narrative
Deferred rent payable	$ 19,389		$ 25,852
Rent Expense	$ 20,274	$ 18,342

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Concentrations (Details Narrative)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Vendor 1 [Member]
Concentration Inventory Purchases Percentage	49.00%	74.00%
Concentration Accounts Payable Percentage	40.00%		43.00%
Vendor 2 [Member]
Concentration Inventory Purchases Percentage	16.00%	10.00%
Concentration Accounts Payable Percentage	12.00%		13.00%
Vendor 3 [Member]
Concentration Inventory Purchases Percentage	15.00%