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Business Combination

6 Months Ended

12 Months Ended

Jun. 30, 2019

Dec. 31, 2018

NOTE 9 – BUSINESS COMBINATION

On October 15, 2018, Trxade Group, Inc. (“Company”) entered into and consummated the purchase of 100% of the equity interests of Community Specialty Pharmacy, LLC, a Florida limited liability company, (“CSP”), pursuant to the terms and conditions of the Membership Interest Purchase Agreement, entered into by and among the Company as the buyer, and CSP, and Nikul Panchal, the equity owner of CSP (collectively, the “Seller”). The purchase price for the 100% equity interest in CSP was $300,000 in cash, a promissory note from the Company of $300,000 (see Note 3), and warrants to purchase 405,507 shares of the Common Stock of the Company which vested at the acquisition date, are exercisable for eight (8) years from the issuance date at a strike price of $0.01 per share, and subject to exercise restrictions which lapse over three (3) years.

The Company recorded the acquisition under ASC 805 “Business Combination. All of the assets acquired and liabilities assumed are recorded at their corresponding fair values. The excess of the purchase price over the net assets acquired resulted in goodwill of $725,973. The following table is a summary of the allocation of the purchase price of $770,291 consisting of $300,000 in cash, a promissory note from the Company of $300,000, and the fair value of the warrants issued calculated under the Black-Scholes calculation at $170,291.

	Purchase Price Allocation
Purchase Price	$	770,291
Cash		(49,728	)
Accounts Receivable		(114,899	)
Inventory		(76,156	)
Prepaid		(3,000	)
Accounts Payable		199,312
Accrued Expenses		153
Goodwill	$	725,973

The accompanying unaudited pro forma statements of operations presents the accounts of Trxade and CSP for the six- months ended June 30, 2018, assuming the acquisition occurred on January 1, 2018.

2018 Summary Statement of Operations	Trxade		CSP		Combined

Revenue	$	1,690,611	$	1,323,117	$	3,013,723

Net Income	$	102,782	$	64,800	$	167,582

Net Income per common share – basic	$	0.00			$	0.01

Net Income per common share - diluted	$	0.00			$	0.00

Weighted average common shares - basic		31,985,827				31,985,827

Weighted average common shares - diluted		34,472,811				34,472,811

The accompanying unaudited pro forma statements of operations presents the accounts of Trxade and CSP for the three- months ended June 30, 2018, assuming the acquisition occurred on January 1, 2018.

2018 Summary Statement of Operations	Trxade		CSP			Combined

Revenue	$	837,688	$	677,900		$	1,515,588

Net Income (Loss)	$	20,513	$	(12,185	)	$	8,328

Net Income per common share – basic	$	0.00				$	0.00

Net Income per common share - diluted	$	0.00				$	0.00

Weighted average common shares - basic		31,985,827					31,985,827

Weighted average common shares - diluted		34,479,406					34,479,406

NOTE 12 – BUSINESS COMBINATION

On October 15, 2018, the Company entered into and consummated the purchase of 100% of the equity interests of Community Specialty Pharmacy, LLC, a Florida limited liability company, (“CSP”), pursuant to the terms and conditions of the Membership Interest Purchase Agreement, entered into by and among the Company as the buyer, and CSP, and Nikul Panchal, the equity owner of CSP (collectively, the “Seller”). The purchase price for the 100% equity interest in CSP was $300,000 in cash, a promissory note issued by the Company of $300,000 (see Note 4), and warrants to purchase 405,507 shares of the Common Stock of the Company which vested at the acquisition date, are exercisable for eight (8) years from the issuance date at a strike price of $0.01 per share, and subject to exercise restrictions which lapse over a period of three (3) years.

The Company recorded the acquisition under the guidance of ASC 805 “Business Combinations”. All the assets acquired and liabilities assumed are recorded at their corresponding fair values. The excess of the purchase price over the net assets acquired resulted in goodwill of $725,973. The following table is a summary of the allocation of the purchase price of $770,291 consisting of $300,000 in cash, a promissory note from the Company of $300,000, and the fair value for the warrants issued calculated under the Black-Scholes calculation at $170,291.

	Purchase Price Allocation
Purchase Price	$	770,291
Cash		(49,728	)
Accounts Receivable		(114,899	)
Inventory		(76,156	)
Prepaid		(3,000	)
Accounts Payable		199,312
Accrued Expenses		153
Goodwill	$	725,973

The accompanying unaudited pro forma combined statements of operations presents the accounts of Trxade and CSP for the years ended December 31, 2018 and 2017, respectively, assuming the acquisition occurred on January 1, 2017.

2018 Summary Statement of Operations	Trxade		CSP			Combined
Revenue	$	3,436,360	$	2,387,636		$	5,823,996

Net Income (Loss)	$	125,626	$	(6,723	)	$	118,903

Net Income per common share – basic	$	0.00				$	0.00

Net Income per common share - diluted	$	0.00				$	0.00

Weighted average common shares - basic		32,260,622					32,260,622

Weighted average common shares - diluted		34,958,502					34,958,502

2017 Summary Statement of Operations	Trxade		CSP			Combined
Revenue	$	2,931,280	$	2,633,914		$	5,565,194

Net Income (Loss)	$	288,983	$	(63,132	)	$	225,851

Net Income per common share – basic	$	0.01				$	0.01

Net Income per common share - diluted	$	0.01				$	0.01

Weighted average common shares - basic		31,955,416					31,955,416

Weighted average common shares - diluted		34,086,251					34,086,251