NASDAQ: MEDS “The Trusted Marketplace for Pharmacies” Corporate Presentation August 2020
Safe Harbor Statement The information set forth herein contains forward-looking statements. Forward-looking statements include all statements that do not relate solely to historical or current facts, including, but not limited to, statements regarding future operations, financial results, cash flows, costs and cost management initiatives, plans, expectations, projections, timelines, and operational and strategic initiatives, and can also be identified by the use of words like “will”, “may,” “can,” “could,” “should,” “predict,” “aim,” “potential,” “continue,” “opportunity,” “intend,” “goal,” “estimate,” “expect,” “expectations,” “project,” “projections,” “plans,” “anticipates,” “believe,” “think,” “confident,” “scheduled,” or similar expressions. Readers should not place undue reliance on these forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors. These risk factors and others are included from time to time in documents Trxade Group, Inc. files with the Securities and Exchange Commission (SEC), including, but not limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks and other filings with the SEC, available at the SEC's website at www.sec.gov. Other unknown or unpredictable factors also could have material adverse effects on Trxade Group, Inc.’s future results. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, Trxade Group, Inc.’s business, plans, prospects, financial condition, liquidity, cash flows, projections and results could differ materially from those expressed in any forward-looking statement. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. Except as required by law, Trxade Group, Inc. expressly disclaims any obligation or undertaking to update any forward-looking statements to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based. Past performance information given in this document is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. In this document, we may rely on and refer to information regarding our industry and the market for our products and services in general from market research reports, analyst reports and other publicly available information. Although we believe that this information is reliable, we cannot guarantee the accuracy and completeness of this information, and we have not independently verified any of it. Some data is also based on our good faith estimates. The information set forth herein does not constitute an offer to sell or the solicitation of an offer to buy any securities of Trxade Group, Inc., nor will there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such jurisdiction. Use of Non-GAAP Financial Information This presentation discusses “EBITDA” (earnings before interest, taxes, depreciation and amortization) and “Adjusted EBITDA” (EBITDA plus share in equity loss on investment and stock-based compensation). These measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. EBITDA and Adjusted EBITDA are presented because we believe they provide additional useful information to investors due to the various noncash items during the period. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: EBITDA and Adjusted EBITDA do not reflect cash expenditures, future requirements for capital expenditures, or contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments. Although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. Additionally, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than Trxade Group, Inc. does, limiting its usefulness as a comparative measure. See appendix for reconciliation of these amounts to GAAP. NASDAQ: MEDS • 2
TRxADE Corporate Timeline 2010 - Founded by Suren Ajjarapu (CEO) and Prashant 2018 - Acquired Community 2019 – Acquired 2014 – Began trading as Patel (COO & president), Specialty Pharmacy, an accredited Bonum Health Assets public company TRXD investing a total of ~$5.5M of independent retail pharmacy with their own capital a focus on specialty medications 2020 – Uplisted to 2013 - Launched second service to help 2017 – First quarter NASDAQ: MEDS, sale of pharmaceutical distributors’ better of profitability $5 million of securities source their pharmaceutical needs within in underwritten offering a highly structured single platform of 0.8M shares at $6.50 2013 - Software development 2014 - Launched “RxGuru” completed, and first to bring product information customer secured on a just-in-time basis to member base 2010 2012 2014 2016 2018 2020 Pharmacies Secured: 1,000 5,000 8,000 11,400 NASDAQ: MEDS • 3
About TRxADE Group, Inc. TRxADE is a technology & services company focused on a more effective process for TRxADE Group, Inc. purchasing and delivering prescription drugs to independent pharmacists & consumers (NASDAQ: MEDS) Share Price 1 $5.52 An Online Pharmaceutical Supply Chain Market Cap 1 $44.5M Marketplace Revenues (TTM) 3 $12.8M Business to Business • Market Leader: Operates the largest technology Gross Margin (TTM) 3 48.5% Robust procurement technology platform platform serving the pharmaceutical supply Net Income (TTM) 3 $(0.8)M that delivers lower cost, more transparent chain (similar to eBay or Kayak-style platform) Q2 Adj. EBITDA 4 $501K fulfillment process for independent • Disruptive Innovation: Significantly lowering pharmacists compared to industry norms Cash 2 $4.2M drug costs via a proprietary technology platform Debt 2 $0.2M • Growing Rapidly: Grew revenues 94% in 2019 & Shares O/S 2 8.1M added +3,200 pharmacies to a total of 11,725 Float 2 3.7M • Profitable: Positive operating profits in 9 of the Business to Consumer Headquarters Land O’ Lakes, FL last 11 quarters with strong margins Turnkey service through a retail mail order Management 54% • specialty pharmacy, wholesale operations Robust Balance Sheet: $4.2 million in cash with Ownership 2 as drugs are increasingly ordered & limited debt 1) As of August 26, 2020. 2) As of the quarter ended June 30, 2020. 3) TTM = Trailing twelve months ended June 30, 2020. delivered directly to consumers • 4) Adj. EBITDA is a non-GAAP term, net income before interest, taxes, Experienced Management: Management and depreciation and amortization as well as share in equity loss on investment and stock-based compensation. See appendix for reconciliation to GAAP. Directors own ~54% of shares outstanding NASDAQ: MEDS • 4
Pharmaceutical Market Overview Independent Pharmacy U.S. Pharmaceutical Industry 1 Nationwide Footprint 1 • $330 billion per year industry Trxade Users Growth • Over 65,000 pharmacy facilities & hundreds of state-licensed Opportunity suppliers 12,275 11,725 • Excluding several large national chains, there are ~24,000 independent pharmacies in the U.S. that represent ~20% of all drug purchases (~$93 Billion) • Average annual sales per pharmacy are approximately $3.5 Projected North America ePharmacy Market 3 million 2 & owners (typically 50+ years old) are looking for both (USD Billion) more revenue channels & profits; as many prescriptions filled at 2014 – 2025 CAGR of 14.8% independent pharmacists are done at a LOSS for the pharmacist 1) Global Data 2) www.pbahealth.com 3) Grandview Research NASDAQ: MEDS • 5
Market Dynamics Problem • The existing market for prescription drugs is both large & growing; yet highly inefficient & costly • Large pharmacy benefit managers (PBM), wholesalers & retail chains stifle competition to capture significant excess margin at the cost of the consumer, employers & government • Suppliers, particularly the big 3 wholesalers (AmerisourceBergen Corporation, Cardinal Health & McKesson Corporation), often reprice/restock inventory daily Solution • TRxADE platform allows independent pharmacies to analyze “up-to-the- minute” supply & pricing on a cost-effective basis • Increases transparency, while decreasing cost & time for independent pharmacies NASDAQ: MEDS • 6
Divisions of TRxADE Group, Inc. Marketplace Platform Chart is purely illustrative and not representative of the Company’s revenue mix NASDAQ: MEDS • 7
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