UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

for the quarterly period ended ~~September~~March 3031, ~~2014~~ 2015

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to __________________

Commission File Number: 000-54550

SCRIPSAMERICA, INC.

(Exact name of registrant as specified in its charter)

DELAWARE		26-2598594
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~Corporate Office Centre Tysons II, 1650~~1094 ~~Tysons~~Main ~~Boulevard~~Avenue, Suite ~~1580~~A, ~~Tysons Corner~~Clifton, VANJ ~~22102~~07011

(Address of principal executive offices)

800-957-7622

(Registrant’s telephone number)

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

Yes ~~x No~~ o No x

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 (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a small 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	o	Accelerated filer	o
	Non-accelerated filer	o	Smaller reporting company	x

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

Yes o No x

As of ~~November~~March 1431, ~~2014~~2016, the registrant had ~~136~~ 141,~~605~~084,~~958~~564 shares of common stock, $.001 par value, issued and outstanding and 2,990,~~252shares~~252 shares of Series A Preferred Stock issued and outstanding.

SCRIPSAMERICA, INC.

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED ~~SEPTEMBER~~MARCH 3031, ~~2014~~2015

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013	3
	Condensed Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2014 and 2013	4
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014	4
	Condensed Consolidated Statements of Changes in Equity (Deficit) for the nine months ended September 30, 2014	5
	Condensed Consolidated Statement of Changes in Convertible Preferred Stock and Stockholders’ Deficit for the three months ended March 31, 2015	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013	6
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014	6
	Condensed Notes to the Consolidated Financial Statements	7
	Notes to the Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2723
Item 4.	Controls and Procedures	42
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	30
Item 4.	Controls and Procedures	30

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	4331
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 1A	Risk Factors	32
Item 3.	Defaults Upon Senior Securities	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 4.	Mine Safety Disclosures	44
Item 3.	Defaults Upon Senior Securities	32
Item 5.	Other Information	44
Item 4.	Mine Safety Disclosures	33
Item 6.	Exhibits	44
Item 5.	Other Information	33
SIGNATURES		45
Item 6.	Exhibits	33
SIGNATURES		34

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

SCRIPSAMERICA, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

	March 31,			December 31,
	2015			2014
	(Unaudited)
ASSETS
Current Assets
Cash	$	160,846		$	454,215
Accounts receivable trade, net of allowance for deductions of $429,415 and $589,415, respectively		2,188,932			3,128,951
Receivable - commissions		24,397			113,647
Inventories		1,348,789			735,763
Prepaid expenses and other current assets		92,092			91,661

Total Current Assets		3,815,056			4,524,237

Property and Equipment, net		111,289			101,393

Other Assets
Intangible assets		538,000			538,000
Other assets, net		454,815			480,406
		992,815			1,018,406

TOTAL ASSETS	$	4,919,160		$	5,644,036

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts receivable line of credit	$	624,376		$	377,056
Accounts payable and accrued expenses		3,627,602			4,873,166
Reserve for charge backs		1,383,438			1,302,441
Royalty payable		14,643			26,827
Royalty payable - related party		3,081			5,520
Note payable, current portion		200,000			–
Notes payable - related party, current portion		141,000			–
Stock to be issued		40,195			40,195
Current portion of long-term debt - related party		137,062			134,024
Total Current Liabilities		6,171,397			6,759,229

Non-Current Liabilities
Preferred stock dividends payable		292,040			271,180
Accrued expense for Ironridge settlement		1,400,000			–
Note payable, net of current portion		–			200,000
Notes payable - related party, net of current portion		–			100,000
Convertible notes payable - related parties		112,669			112,669
Convertible notes payable		559,852			559,852
Finance fee payable		25,000			25,000
Long-term debt, net of current portion - related party		60,837			96,262
Total Non-Current Liabilities		2,450,398			1,364,963

Total Liabilities		8,621,795			8,124,192

Commitments and Contingencies
Series A convertible preferred stock - $0.001 par value; 10,000,000 shares authorized, 2,990,252 shares issued and outstanding (aggregate liquidation preference of $1,335,040 at March 31, 2015)		1,043,000			1,043,000

Stockholders' Deficit
Common stock - $0.001 par value; 250,000,000 shares authorized; 139,013,556 and 136,937,253 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively		139,014			136,937
Additional paid-in capital		15,484,077			15,040,696
Accumulated deficit		(20,104,875	)		(18,423,564	)

Total ScripsAmerica, Inc. Stockholders' Deficit		(4,481,784	)		(3,245,931	)

Noncontrolling interest		(263,851	)		(277,225	)

Total Stockholders' Deficit		(4,745,635	)		(3,523,156	)

TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT	$	4,919,160		$	5,644,036

	September 30,			December 31,
	2014			2013
ASSETS
Current Assets
Cash	$	1,200,099		$	47,293
Accounts receivable trade, net of allowance for deductions of $510,025 and $0, respectively		3,213,760			–
Receivable - contract packager, net of allowance of $81,631 and $408,150, respectively		1,120,231			1,088,598
Receivable - related party commissions		64,562			24,223
Inventory		728,164			–
Intangible asset, net		4,000			–
Prepaid expenses and other current assets		114,565			329,673
Total Current Assets		6,445,381			1,489,787
Property and Equipment, net		58,532			–
Other Assets
Investment		278,265			276,956
Intangible assets		538,000			–
Other Assets		14,720			14,720
		830,985			291,676
TOTAL ASSETS	$	7,334,898		$	1,781,463
LIABILITIES AND EQUITY (DEFICIT)
Current Liabilities
Line of credit	$	–		$	99,222
Accounts payable and accrued expenses		2,475,221			226,570
Purchase order financing - related party		1,020,096			1,037,494
Term loans payable		407,379			–
Term loan payable - related party		100,746			–
Deferred Revenue		418,540
Royalty payable		44,579			–
Royalty payable - related party		18,149			5,302
Stock to be issued		–			273,947
Current portion of long-term debt - related party		131,053			122,529
Convertible notes payable		–			289,839
Derivative liability		–			1,133,393
Total Current Liabilities		4,615,763			3,188,296
Non-Current Liabilities
Preferred stock dividends payable		250,320			187,740
Convertible notes payable - related parties		106,109			120,738
Convertible notes payable - net of discounts $0 and $168,273 respectively		548,231			628,795
Long-term debt, less current portion - related party		130,904			230,287
Total Non-Current Liabilities		1,035,564			1,167,560
Total Liabilities		5,651,327			4,355,856
Commitments and Contingencies
Series A Convertible preferred stock - $.001 par value; 10,000,000 shares authorized, 2,990,252 issued and outstanding		1,043,000			1,043,000
Equity (Deficit)
Common stock - $0.001 par value; 250,000,000 shares authorized; 136,166,625 and 91,792,839 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively		136,166			91,794
Additional paid-in capital		14,831,788			10,046,457
Accumulated deficit		(13,952,015	)		(13,609,078	)
Total Stockholders' Equity (Deficit) of ScripsAmerica, Inc.		1,015,939			(3,470,827	)
Noncontrolling interest		(375,368	)		(146,566	)
Total Equity (Deficit)		640,571			(3,617,393	)
TOTAL LIABILITIES AND EQUITY (DEFICIT)	$	7,334,898		$	1,781,463

See accompany notes to the condensed consolidated financial statements.

See accompanying notes to condensed consolidated financial statements.

SCRIPSAMERICA, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

	For the three months ended September 30,						For the nine months ended September 30,
	For the three months ended
	2014			2013			2014			2013
	March 31, 2015			March 31, 2014
Net revenues
Product revenues, net	$	129,~~644~~370,~~130~~581		$	–617,133		$	~~16,768,055~~		$	~~150,499~~
Revenues net, from contract packager		~~128,892~~–			56123,~~642~~702			~~371,810~~			~~285,144~~
Commission fees		4449,~~391~~542			1683,~~625~~024			~~202,128~~			~~16,625~~
Total net revenues		129,~~817~~420,~~413~~123			73823,~~267~~859			~~17,341,993~~			~~452,268~~
Cost of Goods Sold
Cost of goods sold
Product		1,~~052~~589,~~931~~529			–109,129			~~1,453,660~~			~~210,540~~
Royalty expense		~~160~~62,~~037~~485			30117,~~600~~060			~~362,990~~			~~213,945~~
		1,212,968			30,600			1,816,650			424,485
		1,652,014			226,189
Gross Profit		11,604,445			42,667			15,525,343			27,783
Gross profit - product		7,768,109			597,670
Selling, General and Administrative Expenses		9,889,393			575,063			13,962,163			1,695,057
Selling		6,637,204			425,767
Selling, General and Administrative Expenses share-based compensation issued for services		135,652			2,074,367			1,082,240			3,214,472
General and administrative expenses		814,259			171,291
Allowance for and recoveries of receivable - contract packager		(81,631	)		(27,210	)		(244,893	)		1,183,789
Ironridge settlement (Note 15)		1,400,000			–
Total Operating Expenses		9,943,414			2,622,220			14,799,510			6,093,318
Selling, general and administrative expenses share-based compensation issued for services		445,458			214,171
Net Income (Loss) from Operations		1,661,031			(2,579,553	)		725,833			(6,065,535	)
Total operating expenses		9,296,921			811,229
Other Income (Expenses), net
Loss from operations		(1,528,812	)		(213,559	)
Interest expense		(87,717	)		(59,907	)		(203,493	)		(286,455	)
Other income (expenses), net
Financing costs		(26,926	)		–			(850,758	)		–
Interest expense		(56,237	)		(82,923	)
Loss from derivatives issued with debt greater than carrying value		–			(544,053	)		–			(887,474	)
Financing costs		(62,028	)		(813,394	)
Gain (Loss) on revaluation of derivatives		–			795,555			(511,911	)		(672,903	)
Change in fair value of derivative liabilities		–			(512,790	)
Amortization of debt discount		–			(~~233~~93,~~517~~335	)		~~(110,916~~	)		~~(447,523~~	)
Gain (Loss) on extinguishment of debt		(28,931	)		299,709			555,014			417,674
Gain on extinguishment of debt		–			456,912
Income from equity investments		–			–1,309			~~1,309~~			–
		(143,574	)		257,787			(1,120,755	)		(1,876,681	)
		(118,265	)		(1,044,221	)
Net Income (Loss) Before Provision for Income taxes		1,517,457			(2,321,766	)		(394,922	)		(7,942,216	)
Loss before provision for income taxes		(1,647,077	)		(1,257,780	)
Provision for Tax Expense		–			–			–			–
Provision for income taxes		–			–
Net Income (Loss)		1,517,457			(2,321,766	)		(394,922	)		(7,942,216	)
Net loss		(1,647,077	)		(1,257,780	)
Net Loss Attributed to noncontrolling interest		(28,931	)		–			(114,565	)		–
Net income (loss) attributable to noncontrolling interest		13,374			(44,400	)
Net Income (Loss) Attributed to ScripsAmerica, Inc.		1,546,388			(2,321,766	)		(280,357	)		(7,942,216	)
Net loss attributable to ScripsAmerica, Inc.		(1,660,451	)		(1,213,380	)
Preferred Stock Dividend		(20,860	)		(20,860	)		(62,580	)		(62,580	)
Preferred stock dividend		(20,860	)		(20,860	)
Net Income (Loss) Available to Common Shareholders	$	1,525,528		$	(2,342,626	)	$	(342,937	)	$	(8,004,796	)
Net loss attributable to common stockholders	$	(1,681,311	)	$	(1,234,240	)
Net income (Loss) Per Common Share
Net loss per common share
Basic	$	(0.01	)	$	(0.0301	)	$	~~(0.00~~	)	$	~~(0.13~~	)
Diluted	$	(0.01	)	$	(0.0301	)	$	~~(0.00~~	)	$	~~(0.13~~	)
Weighted Average Number of Common Shares
Weighted average number of common shares outstanding
Basic		~~135~~138,~~881~~796,~~121~~270			70108,~~641~~380,~~911~~842			~~124,435,629~~			~~63,442,789~~
Diluted		~~161~~138,~~280~~796,~~997~~270			70108,~~641~~380,~~911~~842			~~149,835,505~~			~~63,442,789~~

See accompany ~~accompanying~~ notes to the condensed consolidated financial statements.

SCRIPSAMERICA, INC.

Condensed Consolidated ~~Statements~~Statement of Changes in ~~Equity~~ (Convertible Preferred Stock and Stockholders' Deficit)

For the ~~nine~~three ~~month~~months period ended ~~September~~March 3031, ~~2014~~2015 (Unaudited)

	Common Stock				Additional Paid-In		Accumulated			Equity (Deficit)			Noncontrolling			Total Equity
	Series A Convertible Preferred Stock				Common Stock					Additional Paid-In			Accumulated			Stockholders' Deficit of ScripsAmerica,			Noncontrolling			Total Stockholders'
	Shares		Amount		~~Capital~~Shares		~~Deficit~~Amount			~~ScripsAmerica~~Capital			~~Interest~~Deficit			~~(Deficit)~~Inc.			Interest			Deficit
Balance - January 1, 2014		91,792,839	$	91,794	$	10,046,457	$	(13,609,078	)	$	(3,470,827	)	$	(146,566	)	$	(3,617,393	)
Balance - December 31, 2014		2,990,252	$	1,043,000		136,937,253	$	136,937		$	15,040,696		$	(18,423,564	)	$	(3,245,931	)	$	(277,225	)	$	(3,523,156	)
Common stock issued for cash		27,299,202		27,299		1,522,320					1,549,619						1,549,619
Common stock issued for services - employees and directors		–		–		911,000		911			185,129			–			186,040			–			186,040
Common stock issued for services - Directors		88,000		88		9,352					9,440						9,440
Common stock issued for services - non employees		–		–		1,165,303		1,166			230,438			–			231,604			–			231,604
Common stock issued for conversion of Convertible Notes payable		9,009,937		9,010		1,240,277		–			1,249,287			–			1,249,287
Dividends for convertible preferred stock		–		–		–		–			–			(20,860	)		(20,860	)		–			(20,860	)
Common stock issued for services - non employees		4,427,614		4,427		529,540					533,967						533,967
Common stock options issued for services - directors		–		–		–		–			18,494			–			18,494			–			18,494
Common stock issued for royalty payment		921,203		921		105,860					106,781						106,781
Common stock options issued for services - employees		–		–		–		–			9,320			–			9,320			–			9,320
Common stock issued for debt financing charges		1,740,550		1,740		222,281					224,021						224,021
Net loss		–		–		–		–			–			(1,660,451	)		(1,660,451	)		13,374			(1,647,077	)
Common stock issued in settlement agreement		887,280		887		124,494					125,381						125,381
Balance - March 31, 2015		2,990,252	$	1,043,000		139,013,556	$	139,014		$	15,484,077		$	(20,104,875	)	$	(4,481,784	)	$	(263,851	)	$	(4,745,635	)
Dividends for convertible preferred stock								(62,580	)		(62,580	)					(62,580	)
Common stock options issued for services - Directors						12,973					12,973						12,973
Common stock options issued for services - employees						465,916					465,916						465,916
Common stock warrants issued for financing costs						552,318					552,318						552,318
Distribution taken from noncontrolling interest											–			(114,237	)		(114,237	)
Net Loss								(280,357	)		(280,357	)		(114,565	)		(394,922	)
Balance - September 30, 2014		136,166,625	$	136,166	$	14,831,788	$	(13,952,015	)	$	1,015,939		$	(375,368	)	$	640,571

See ~~accompanying~~ accompanying notes to the condensed consolidated financial statements.

SCRIPSAMERICA, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the nine months end September 30,
	For the three months ended March 31,
	2014			2013
	2015			2014
Cash Flows from Operating Activities
Cash flows from operating activities
Net Loss	$	(394,922	)	$	(7,942,216	)
Net loss	$	(1,647,077	)	$	(1,257,780	)
Adjustments to reconcile net loss to net cash provided by (uses in) operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Income from equity method investee		~~(1,309~~–	)		–(1,309	)
Amortization of discount on convertible notes		110,916			447,523
Amortization of discount on convertible notes payable		–			93,335
Loss from derivatives issued with debt		–			887,474
Depreciation expense		9,226			–
Depreciation expense		2,349			–
Amortization of financing fees		28,216			8,000
Amortization of licenses		8,000			–
Common stock issued for services		417,644			158,800
Amortization of loan fees		8,000			125,224
Common stock issued for payment of royalty fees		–			56,553
Common stock issued for services		543,407			3,007,783
Common stock issued for financing fees		–			66,000
Common stock issued for payment of royalty fees		106,781			235,845
Options issued for services - employees and directors		27,814			3,971
Common stock issued for finance fees		66,000			–
Warrants issued for settlement agreement		–			552,318
Options issued for services - Employees		465,916			206,689
Change in fair value of derivative liabilities		–			512,790
Options issued for services - Directors		12,973			–
Settlement with Ironridge		1,400,000			–
Warrants issued for settlement fee		552,318			–
Settlement with Pharmanostics		287,500			–
Change in derivative liability		511,911			672,903
Gain on extinguishment of debt		–			(456,912	)
Reserve on receivable - Trade		(94,044	)		–
Allowance for chargebacks		80,997			–
Reserve on receivable - Contract packager		(244,893	)		1,357,790
Gain on extinguishment of debt		(555,014	)		(417,674	)
Allowance for deductions and chargebacks		510,025			(11,399	)
Change in operating assets and liabilities
Accounts receivable - trade		(3940,~~629,739~~019	)		~~290~~(459,~~742~~442	)
Accounts receivable - related party		~~(40,339~~–	)		(4259,~~449~~801	)
Receivable - Contract packager		213,259			(559,167	)
Receivable - commissions		89,250			–
Prepaid expenses and other current assets		(59,902	)		143,524
Receivable - contract packager		–			4,037
Inventory		(453,154	)		–
Prepaid expenses and other assets		(3,056	)		(23,849	)
Deferred revenue		418,540
Inventories		(613,026	)		(12,844	)
Accounts payable and accrued expenses		2,166,121			172,131
Accounts payable and other liabilities		(1,547,687	)		346,791
Cash provided by (used in) operating activities		223,200			(1,425,277	)
Cash used in operating activities		(530,180	)		(469,342	)
Cash Flows from Investing Activities
Cash flows from investing activities
Acquisition of businesses		~~(175,000~~–	)		–(175,000	)
Purchase of property and equipment		(6019,~~880~~122	)		–(52,169	)
Cash used in investing activities		(~~235~~19,~~880~~122	)		–(227,169	)
Cash Flows from Financing Activities
Cash flows from financing activities
Payments under bank line of credit, net		~~(99,222~~–	)		(4099,~~059~~222	)
Proceeds from Issuance of common stock		1,675,000			245,697
Proceeds from accounts receivable line of credit, net		247,320			–
Proceeds from term loan, net		20,648			–
Proceeds from issuance of common stock		–			1,277,902
Proceeds from convertible notes payable		114,750			1,372,867
Proceeds from term loan, net		–			87,313
Payments for convertible notes payable		(141,837	)		–
Proceeds from convertible notes payable		–			73,620
Proceeds from notes payable from stockholder		250,000			–
Proceeds from notes payable - related party		41,000			–
Proceeds from notes payable - related party		75,000			–
Payments for PO financing from related party, net		–			(603	)
Payments on note payable to stockholder		(121,269	)		–
Payments on convertible notes payable		–			(259,003	)
Payments on note payable - related party		(1432,~~269~~387	)		–(37,572	)
Proceeds from PO financing from related party, net		(17,398	)		328,169
Payments to member of noncontrolling interest		–			(114,237	)
Payments to factor, net		–			(141,725	)
Cash provided by financing activities		255,933			928,198
Payments on convertible notes payable		(321,482	)		(242,734	)
Net change in cash		(293,369	)		231,687
Payments on convertible note payable - related party		(49,339	)		–
Cash - Beginning of period		454,215			47,293
Payments on note payable - related party		(90,859	)		(83,067	)
Cash - End of period	$	160,846		$	278,980
Payments to members of noncontrolling interest		(114,237	)		–
Supplemental disclosures of cash flow information
Cash provided by financing activities		1,165,486			1,439,148
Net Increase in Cash		1,152,806			13,871
Cash - Beginning of Period		47,293			13,513
Cash - End of Period	$	1,200,099		$	27,384
Supplemental Disclosures of Cash Flow Information		–
Cash Paid:
Interest	$	~~135~~68,~~474~~317		$	~~128~~35,~~446~~490
Noncash financing and investing activities:
Accrued Preferred Dividend payable	$	62,580		$	62,580
Accrued preferred stock dividend payable		20,860			20,860
Investments - Main Ave Pharmacy		(300,000	)		(154,000	)
Debt incurred to finance Main Ave Pharmacy		–			(300,000	)
Financing – loans obtained for Main Ave Pharmacy		300,000			–
Assets acquired in Business Combination		–			300,000
Conversion of notes payable for common stock	$	694,273		$	274,968

See accompany ~~accompanying~~ notes to the condensed consolidated financial statements.

SCRIPSAMERICA, INC.

~~Condensed~~ Notes to ~~Consolidated Financial~~condensed consolidated financial statements (Unaudited)

~~Statements~~For ~~(Unaudited) for~~ the ~~nine~~three months ended March 31, 2015

ended September 30, 2014

1 – ORGANIZATION AND BUSINESS

~~The~~ScripsAmerica, Inc, ~~accompanying~~(“us”, ~~financial~~“we”, ~~statements reflect~~“our” ~~financial~~or ~~information~~the “Company”) was incorporated in the State of ~~ScripsAmerica~~Delaware on May 12, ~~Inc~~2008. (At March 31, 2015 the “Company” had one wholly owned subsidiary, Main Avenue Pharmacy Inc. (“~~ScripsAmerica~~Main Avenue”), a Delaware Corporation, and owned 90% of PIMD International LLC., (“usPIMD”), a Florida Limited Liability Company. The ~~“we”~~accompanying orcondensed “consolidated financial statements reflect our”) financial information and that of Main Avenue and PIMD.

~~ScripsAmerica, Inc. was incorporated~~In inDecember ~~the State of Delaware on May 12~~2014, ~~2008.~~we ~~Since~~acquired ~~inception,~~a ~~the~~90% ~~Company’s~~interest ~~business~~in ~~model has evolved significantly~~PIMD. ~~Through March~~Prior ~~2013, and~~ to aacquiring ~~lesser extent into early 2014, the Company primarily provided pharmaceutical distribution services to~~ a ~~wide range~~90% ofinterest ~~end users across the health care industry through major pharmaceutical distributors~~ in ~~North America. The end users included retail~~PIMD, ~~hospitals,~~PIMD ~~long-term~~was ~~care~~consolidated ~~facilities~~as ~~and~~it ~~government and home care agencies. The majority of the Company’s revenue~~was ~~from~~considered ~~this~~a ~~model~~variable ~~came~~interest ~~from~~entity ~~orders facilitated by McKesson Corporation~~ (“~~McKesson~~VIE”)~~, the largest pharmaceutical distributor in North America, and a few other major pharmaceutical distributors~~.

~~However~~Since February 2014, weour ~~had~~primary nobusiness ~~exclusive~~has ~~contract with~~been ~~McKesson and~~ the ~~Company’s~~sale ~~other pharmaceutical distributors to utilize our services~~ and ~~our~~compounding ~~margins became compressed. As a result, in 2013 the business~~ of ~~providing~~non-sterile ~~these~~topical ~~pharmaceutical distribution services was curtailed~~ and wetransdermal ~~are~~pain ~~now~~creams ~~primarily focused on generating revenue~~ through ~~(1)~~ the ~~marketing,~~acquisition ~~sale and distribution~~ of ~~our~~Main ~~RapiMed®~~Avenue ~~products,~~and ~~(2)~~fulfillment ~~our~~ services to the independent pharmacy distribution business, ~~and~~which ~~(3)~~we ~~our~~service ~~entry into the specialty pharmacy business~~through PIMD.

~~Specifically, we have developed~~We aalso branded over the counter (“OTC”) product called “RapiMed” (www.rapimeds.com), which is a children’s pain reliever and fever reducer which is in the process of being launched in Hong Kong through our sales and distribution consortium Global Pharma Hub Inc. (“Global Pharma”), and which we hope to launch in retail outlets in North America upon obtaining financing sometime in 2016. We have ~~also~~ entered into agreements with third parties pursuant to which we receive ~~fees based on~~ a ~~formula~~percentage ~~tied~~of to the gross profit on sales of pharmaceutical products ~~to independent pharmacies by such third parties~~. In February 2014, we entered into a management agreement with a New Jersey pharmacy, Main Avenue Pharmacy, Inc. (“MAVP”), that specializes in predominantly topical pain and scar creams and since we will have significant controlling interest , the Company consolidates the financial activities of this specialty pharmacy. We acquired 100% ownership of MAVP in the fourth quarter 2014.

The accompanying unaudited interim condensed consolidated financial statements of the Company, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited consolidated financial statements of ScripsAmerica, Inc. and related notes thereto contained in the Company’s Form 10-K for the year ended December 31, ~~2013~~ 2014 filed with the SEC on ~~April~~January 1529, ~~2014~~2016. Certain information and note disclosures normally included in annual ~~financial~~consolidated financial statements prepared in accordance with ~~generally~~GAAP ~~accepted accounting principles~~ have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

2 – LIQUIDITY AND BUSINESS RISKS

AtAs of ~~September~~March 3031, ~~2014~~2015, ~~the~~we ~~Company~~ had approximately $~~1.2~~161,000 ~~million~~ in cash, approximately $~~6.4~~3,800,000 ~~million~~ in current assets and approximately $4.6 ~~million~~ ,200,000 in current liabilities for a negative working capital of approximately $12,400,000.8 ~~million.~~ For the three months ~~period~~ended ~~ending~~March ~~September 30~~31, ~~2014~~2015, we ~~earned approximately~~had ~~$1.5~~a ~~million~~loss infrom ~~operating~~operations ~~income~~of ~~and~~approximately we$1,529,000 ~~expect~~and toincurred ~~continue~~a tonet ~~have~~loss ~~positive~~of ~~income~~approximately ~~from~~$1,647,000. ~~our~~As ~~operations.~~of AtMarch ~~September~~31, 302015, ~~2014~~ our accumulated deficit iswas approximately $1320,100,000.9 ~~million,~~Management ~~but~~believes that after taking into consideration our ~~2014 interim results to date and current~~ projections for ~~the~~2015 ~~remainder~~and ~~of 2014~~2016, ~~management believes~~ that ~~the~~our ~~Company’s~~ cash ~~flow~~flows from operations will be sufficient to support the working capital requirements, debt service~~, applicable debt maturity~~ requirements, and operating expenses ~~through~~for ~~September~~the ~~30,~~next ~~2015~~twelve months.

We completed the development of a children’s pain relief rapid orally disintegrating 80 mg and 160 mg tablets for OTC products and due to the significant costs needed for a successful launch of RapiMed® we do not anticipate launching RapiMed® in the United States within the next 15 months. In January 2014, the Company formed a sales and distribution consortium (formerly referred to as a joint venture entity), Global Pharma Hub, Inc., for the licensing, marketing and distribution of our pediatric RapiMed® acetaminophen in foreign markets, with the initial target market being Hong Kong. On March 10, 2014, we received a $200,000 purchase order for our children’s pain relief rapid orally disintegrating 80mg tablets from Global Pharma Hub for the China market. However, as of November 14, 2014, no shipments have been made. The Company’s ability to obtain regulatory approval and launch RapiMed® in the United States is highly dependent upon management’s ability to (i) equal or exceed the planned operating cash flows, (ii) maintain continued availability on the existing line of credit and (iii) obtain additional financing or capital to fund and reduce the Company’s debt service obligations coming due and its operating expenses in addition to the normal regulatory and marketing risks expected.

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Principles of Consolidation - The condensed consolidated financial statements include ~~the~~our accounts, ofour ~~the~~wholly-owned subsidiary, ~~Company~~Main Avenue, our 90% owned subsidiary, PIMD, and ~~all~~Implex for the first three fiscal quarters of ~~its~~2014 ~~subsidiaries~~as init ~~which~~was considered to be a ~~controlling~~variable interest isentity ~~maintained~~(“VIE”). All inter-company accounts and transactions have been eliminated in consolidation. For investments which are considered to be a ~~Variable Interest Entity (~~VIE), ~~the~~we ~~Company~~ would be considered the primary beneficiary of the VIE if ~~it has~~ both of the following characteristics are present: (a) we have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (b) we have the obligation to absorb losses of the VIE that could potentially be significant or the right to receive benefits from the VIE that could potentially be significant. Investments in entities in which ~~the~~we ~~Company~~do ~~does~~ not have a controlling financial interest, but over which we have significant influence are accounted for using the equity method. For those consolidated entities where Company ownership is less than 100%, the outside stockholders’ interests are shown as non-controlling interest.

b. Use of Estimates - The preparation of consolidated financial statements in conformity with ~~accounting~~GAAP ~~principles generally accepted in the United States~~ requires management to make estimates and assumptions that affect the amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenues, and expenses during the reporting period. Significant estimates made by management are, among others, allowance for doubtful receivables and contractual adjustments, realizability of inventories, valuation of deferred taxes and intangible assets, recoverability of long-lived assets and indefinite lived intangible assets, reserve for chargebacks, valuation of debt instruments and derivative liabilities, and valuation of stock-based compensation issued to employees and non-employees. Actual results could differ from those estimates.

c. Revenue Recognition - Product revenue associated with our pharmaceutical distribution services and our specialty pharmacy business is recognized when product is shipped from a contract packager or our pharmacy to our customers’ warehouses or directly to a patient, and is adjusted for anticipated charge backs from our customers which include inventory credits, discounts or volume incentives. The sales revenue and accounts receivables are reduced accordingly based on historical experience, customer contract programs, product pricing trends and the mix of products shipped.7

~~Purchase orders from our customers generate our shipments~~SCRIPSAMERICA, ~~provide persuasive evidence that an arrangement exists and that the pricing is determinable. The credit~~ ~~worthiness of our customers assures that collectability is reasonably assured~~INC.

Notes Our specialty pharmacy revenue is not recognized until the patient receives the filled prescription. We will prepare and fill a prescription that has been approved by an insurance provider, ship the filled prescription to ~~the~~condensed ~~patient~~consolidated ~~and~~financial ~~upon confirmation~~statements of receipt of the prescription by patient will recognize revenue. Any prescription in which patient has not received product but we may have been reimbursed by the insurance provider is recorded at deferred revenue. As of September 30, 2014, deferred balance is $418,540.(Unaudited)

~~We also recognize revenue from~~For ~~our contract packager on a net basis according to ASC 605-45, Revenue Recognition: Principal Agent Considerations. Since we are not deemed to be~~ the ~~principal~~three inmonths ~~these~~ended ~~sales~~March transactions we do not report the transaction on a gross basis in our statement of operations. These sales transactions relate to a contract that a Contract Packager has obtained with a government agency. The revenue is reported in a separate line in the statement of operations as “Revenues net31, ~~from Contract Packager”, and the gross sales are reduced by the cost of sales fees from our Contract Packager.~~2015

~~Commission fees are recognized when earned on shipments of generic pharmaceutical and OTC products by WholesaleRx which is DEA and State-licensed to store and distribute controlled substances~~c. ~~Per our amended agreement the Company is to earn a 14% commission fee on the gross profit (sales~~ Revenue ~~less~~Recognition ~~cost of goods sold, freight in and credits and allowances) of products shipped to independent pharmacies.~~–

~~d. Accounts~~Product ~~Receivable~~Revenues ~~Trade,~~– ~~net~~Specialty Pharmacy - ~~Accounts~~Our ~~receivable~~specialty ~~are~~pharmacy ~~stated~~revenue atis ~~estimated~~not ~~net~~recognized ~~realizable~~until ~~value.~~the ~~These~~patient receives the filled ~~receivables~~prescription. ~~are~~Typically, ~~from~~we ~~our~~prepare ~~specialty~~and ~~pharmacy,~~fill ina ~~which~~prescription wethat ~~only~~has been approved by an insurance provider, ship ~~prescription~~the ~~products~~filled prescription to ~~patients~~the patient, and upon ~~payment~~confirmation ~~approval~~of receipt of the prescription by the ~~patients’~~patient, ~~insurance~~we ~~company~~recognize revenue. ~~Payments~~Any ~~are~~prescription ~~usually~~in which the patient has not received ~~within~~product, 30but ~~days~~we ofmay have been reimbursed by the ~~product~~insurance ~~being~~provider, ~~shipped.~~is Asrecorded ofas deferred ~~September~~revenue 30or accounts receivable reserved, ~~2014~~for future deductions. Occasionally, ~~$510~~a patient may return the product or the product was not deliverable,~~025~~ ~~has~~in ~~been~~such ~~recorded~~cases asthe revenue related to the prescription is reversed. If we received payment from a third-party payor for undelivered product, we record an allowance for ~~insurance~~deductions ~~company~~to ~~deductions~~be ~~and~~applied ~~chargebacks~~to future reimbursements due from the third-party payors. As of ~~September~~ 30March 31, ~~2014~~2015 and December 31, ~~2013~~2014, we had no deferred revenue, but we did have an allowance for ~~doubtful~~future ~~accounts~~deductions of ~~was~~$429,415 ~~deemed~~and ~~necessary~~$589,415 reserved against accounts receivable, respectively.

e. Due ~~Property~~to ~~and~~the ~~Equipment~~nature -of ~~Property~~the industry and ~~equipment~~the reimbursement environment in which we operate, certain estimates are ~~stated~~required in order to record net revenues and accounts receivable at ~~cost~~their ~~less~~net ~~accumulated~~realizable ~~depreciation~~values. ~~The~~Inherent ~~Company computes~~in ~~depreciation~~these ~~using~~estimates is the ~~straight-line~~risk ~~method~~that ~~over~~they may ~~the~~have ~~estimated~~to ~~useful~~be ~~lives~~revised ofor ~~the~~updated ~~assets~~as additional information becomes available. ~~Maintenance~~It ~~costs~~is possible that domanagement’s estimates ~~not~~could ~~significantly~~change, ~~extend~~which ~~the~~could ~~useful~~have ~~lives~~an ofimpact on operations and cash flows. Specifically, the ~~respective~~complexity ~~assets~~of many billing arrangements and ~~repair~~the ~~costs~~uncertainty ~~are~~of ~~charged~~reimbursement toamounts ~~operating~~for ~~expense~~certain asservices ~~incurred~~from certain third-party payors may result in adjustments to amounts originally recorded.

As of March 31, 2015 and December 31, 2014, $1,383,438 and $1,302,441, respectively, has been recorded as a reserve for third-party payors deductions and chargebacks. We believe we have adequate allowances for contractual adjustments relating to all known third-party payors disputes. However, no assurance can be given with respect to such estimates of reimbursements and offsets or the ultimate outcome of any refund requests.

Product Revenues – Pharmaceutical Distribution Services - Product revenue associated with our pharmaceutical distribution services is recognized when the product is shipped from a contract packager to our customers’ warehouses, and is adjusted for anticipated chargebacks. The sales revenue is reduced accordingly based on historical experience, customer contract programs, product pricing trends and the mix of products shipped.

Purchase orders from our customers provide persuasive evidence that an arrangement exists and that the pricing is determinable. The credit worthiness of our customers assures that collectability is reasonably assured.

Revenues from Contract Packager - We recognize revenue from our contract packager on a net basis according to Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 605-45, Revenue Recognition: Principal Agent Considerations. Since we are not deemed to be the principal in these sales transactions we do not report the transaction on a gross basis in our condensed consolidated statements of operations. These sales transactions relate to a contract that a contract packager has obtained with a government agency. The revenue is reported in a separate line in the condensed consolidated statements of operations as “Revenues net, from contract packager”, and the gross sales are reduced by the cost of sales fees from Marlex Pharmaceuticals, Inc. (“Marlex Pharmaceuticals”), our contract packager.

Commission Fees - Commission fees are recognized when earned on shipments of generic pharmaceutical products by WholesaleRx, LLC (“WholesaleRx”), which is licensed by the Drug Enforcement Agency and sixteen states to store and distribute controlled substances. Under the terms of our amended agreement with WholesaleRx, we earn a 14% commission fee on the gross profit (sales less cost of goods sold, freight in and credits and allowances) of products shipped to independent pharmacies.

We also earn commission fees with various other pharmacies for shipments on generic pharmaceutical products in which we broker the costs from various supplies. Under this agreement we earned an agreed commission fee from the pharmacies.

d. Accounts Receivable Trade, Net - Accounts receivable are stated at an estimated net realizable value. These receivables are primarily from our pharmacy business and represent amounts due from insurance companies, through various third-party payor networks. Payments are usually received within 30 days of the product being shipped. Occasionally a patient may return the product or the product was not deliverable, in such cases the receivable is reversed. The timing of these adjustments may carry over from one month to the next month and we may have received payment before the third-party payor’s system recognizes changes in the billing status. If this occurs, we record an allowance for deductions to be applied to future reimbursements due form the third-party payor. In addition to the allowance for future deductions, we examine other receivables and will record an allowance for doubtful receivables if deemed necessary. As of March 31, 2015 and December 31, 2014, no allowance for doubtful receivables was deemed necessary.

f. Intangible assets - The Company amortizes the cost of intangibles over their useful lives unless such lives are deemed indefinite. Intangible assets with indefinite lives are not amortized; howeverSCRIPSAMERICA, ~~they are tested annually for impairment~~ ~~and written down to fair value if required~~INC.

~~We review the carrying values~~Notes ofto ~~property~~condensed ~~and~~consolidated ~~equipment~~financial ~~and~~statements ~~long-lived intangible assets for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. Such events or circumstances include the following:~~(Unaudited)

~~o significant declines in an asset’s market price; o significant deterioration in an asset’s physical condition; o significant changes in~~ For the ~~nature~~three ormonths ~~extent~~ended ofMarch ~~an asset’s use or operation; o significant adverse changes in the business climate that could impact an asset’s value~~31, including adverse actions or assessments by regulators; o accumulation of costs significantly in excess of original expectations related to the acquisition or construction of an asset; o current-period operating or cash flow losses combined with a history of such losses or a forecast that demonstrates continuing losses associated with an asset’s use; and o expectations that it is more likely than not that an asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.2015

Ife. Intangible ~~impairment~~Assets ~~indicators are present, we determine whether an impairment loss should be recognized by testing the applicable asset or asset group’s carrying value for recoverability. This test requires long~~-~~lived~~ ~~assets to be grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, the determination of which requires judgment.~~ We ~~estimate~~amortize the ~~undiscounted~~cost ~~future cash flows expected to be generated from the use and eventual disposal~~ of ~~the~~intangibles ~~assets~~over ~~and~~their ~~compare~~useful ~~that~~lives ~~estimate~~unless ~~to the respective carrying values in order to determine if~~ such ~~carrying~~ ~~values~~lives are ~~recoverable~~deemed indefinite. ~~This assessment requires the exercise of judgment in assessing the future use of, and projected~~Intangible ~~value to be derived from, the eventual disposal of the~~ assets towith beindefinite ~~held~~lives ~~and~~are ~~used.~~not Ifamortized; ~~the carrying value of the assets is not recoverable~~however, ~~then~~they weare ~~record~~tested aannually ~~loss~~ for ~~the~~impairment ~~difference~~and ~~between~~written ~~the~~down ~~assets’~~to fair value ~~and respective carrying value. We believe~~ ~~our~~if ~~current assumptions and estimates are reasonable and appropriate~~required. ~~Unanticipated events and changes in market conditions, however, could affect such estimates, resulting in the need for an impairment charge in future periods~~

gf. Long-Lived ~~Receivable~~Assets - ~~Contract~~We ~~Packager~~review the carrying values of property and equipment and long-lived ~~The~~intangible ~~Company~~assets ~~has~~for ~~receivables~~impairment ~~from~~whenever events ~~Marlex~~or ~~Pharmaceuticals~~changes in circumstances indicate that their carrying values may not be recoverable. If impairment indicators are present, we ~~Inc~~determine whether an impairment loss should be recognized by testing the applicable asset or asset group’s carrying value for recoverability. ~~(“Contract~~This test requires long-lived assets to be grouped at the lowest level for which identifiable cash flows are ~~Packager”),~~largely inindependent of the ~~amount~~cash flows of ~~$1,201,231~~other assets and $1liabilities,~~088,598~~ atthe ~~September~~determination ~~30,~~of ~~2014~~which requires judgment. We estimate the undiscounted future cash flows expected to be generated from the use and ~~December~~eventual ~~31,~~disposal ~~2013,~~of ~~respectively~~the assets and compare that estimate to the respective carrying values in order to determine if such carrying values are recoverable. This ~~receivable~~assessment requires ~~consists~~the exercise of ~~revenue~~judgment ~~earned~~in ~~for~~assessing ~~U.S.~~the ~~government~~future ~~sales~~use of, and ~~monthly~~projected ~~payments~~value ~~due~~to be derived from, the ~~settlement~~eventual ~~agreement~~disposal ~~entered~~of ~~into~~the assets onto ~~September 6,~~be ~~2013~~held and used. ~~Under~~If the ~~September~~carrying 6,value ~~2013~~of ~~settlement~~the ~~agreement~~assets is not recoverable, then we record a loss for the ~~Company~~difference isbetween the ~~entitled~~assets’ tofair ~~recover~~value ~~$408,150~~and ofrespective ~~these~~carrying ~~receivables~~value. ofWe believe our current assumptions and estimates are reasonable and ~~which~~appropriate. ~~$326,524~~Unanticipated ~~has~~events ~~been~~and ~~recovered~~changes asin ofmarket ~~September~~conditions, 30however, ~~2014~~could affect such estimates, resulting in the need for an impairment charge in future periods.

hg. Inventories ~~Receivable~~ - ~~related~~Inventories ~~party~~represent -purchased ~~WholesaleRx,~~finished ~~the~~products ~~pharmaceutical~~at ~~aggregator~~PIMD’s ~~which~~inventory islocation ~~DEA~~ and ~~State-licensed~~at ~~to store and distribute controlled substances in which we have~~ a ~~14%~~third ~~investment,~~party ~~is an entity from which we recognize Commission fees when~~location. ~~earned~~Raw onmaterials ~~shipments~~represent ofthe ~~generic~~cost ~~pharmaceutical and OTC products. The receivable consists~~ of POpurchased ~~financing,~~materials ~~and~~used ~~revenue~~to ~~earned~~make ~~for commission~~our ~~sales~~compounded ~~agreement~~prescription ~~entered~~products ~~into~~at inMain ~~November 1, 2013 (as subsequently amended by oral agreements)~~Avenue’s location. InBoth ~~August~~finished ~~2014,~~products ~~WholesaleRx stopped~~and ~~providing~~raw ~~the~~material ~~necessary~~costs ~~information~~are ~~for~~stated ~~recording~~at the ~~commission~~lower ~~fees~~of ~~and~~cost ~~stopped~~or ~~making~~market ~~payments~~determined onby the ~~open~~first ~~receivables. Subsequent to September 30~~in, ~~2014, the Company has filed legal action (see footnote #7 below for details) and as further disclosed~~ infirst ~~note~~out ~~7, does not believe a reserve on this receivable is warranted at September 30, 2014~~method.

ih. Income ~~Inventory~~Taxes - ~~Inventories~~We ~~represent~~provide ~~purchased~~for ~~finished~~income ~~products~~taxes atusing ~~P.I.M.D.~~the ~~International~~asset ~~LLC’s~~and ~~(“PIMD”)~~liability based approach for reporting income taxes. Deferred ~~inventory~~income ~~location~~tax assets and atliabilities aare ~~third~~computed ~~party~~annually ~~manufacturer’s~~for ~~warehouse~~differences ~~location.~~between ~~Raw~~the ~~materials~~financial ~~represent~~statement and the ~~cost~~tax basis of ~~purchased~~assets ~~material~~and ~~use~~liabilities tothat ~~make~~will ~~our~~result ~~compounded~~in ~~prescription~~taxable ~~products~~or atdeductible ~~our~~amounts ~~MAVP~~in ~~location.~~the ~~Both~~future ~~finished~~based ~~products~~on ~~and~~enacted ~~raw~~tax ~~material~~laws ~~costs~~and rates applicable ~~are~~to ~~stated~~the atperiods in which the ~~lower~~differences ofare ~~cost~~expected orto ~~market~~affect ~~determined~~taxable byincome. Valuation allowances are established to reduce deferred tax assets to the ~~first~~amounts ~~in,~~expected ~~first~~to ~~out~~be ~~method~~realized.

k. We ~~Derivative~~also ~~Financial~~comply ~~Instruments~~with -the ~~Derivative~~provisions ~~financial instruments consist~~ of ~~financial~~ASC ~~instruments~~740 orwhich ~~other contracts~~prescribes ~~that contain~~ a ~~notional~~recognition ~~amount~~threshold and ~~one~~measurement orprocess ~~more~~for ~~underlying~~recording ~~values~~in ~~(e.g. interest rate, security price or other variable)~~the ~~that~~condensed ~~require~~consolidated nofinancial ~~initial~~statements ~~net~~uncertain ~~investment~~tax ~~and~~positions ~~permit~~taken ~~net~~or ~~settlement.~~expected ~~Derivative~~to ~~financial instruments may~~ be ~~free-standing~~taken ~~or embedded~~ in ~~other~~a ~~financial~~tax ~~instruments~~return. ~~Further,~~We ~~derivative~~classify any ~~financial~~assessment ~~instruments~~for ~~are,~~interest ~~initially,~~ and/or ~~subsequently,~~penalties ~~measured at fair value and recorded~~ as ~~liabilities or, assets. The Company generally does not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However,~~ the ~~Company has entered into various types of financing arrangements to fund its business capital requirements, including convertible debt and~~ other ~~financial~~expenses ~~instruments. These contracts require evaluation to determine whether derivative features embedded~~ in ~~host~~the ~~contracts~~condensed ~~require~~consolidated ~~bifurcation~~financial ~~and fair value measurement or~~statements, inif ~~the case of freestanding derivatives (principally warrants) whether certain conditions for equity classification have been achieved~~applicable. There Inwere ~~instances~~no ~~where~~uncertain ~~derivative~~tax ~~financial~~positions ~~instruments~~at ~~require~~March ~~liability classification~~31, ~~the~~2015 ~~Company is required to initially~~ and ~~subsequently~~December ~~measure~~31, ~~such instruments at fair value~~2014.

9i. Fair Value Measurements - We follow the provision of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 clarifies that fair value is an estimate of the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date) and provides for use of a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels:

Derivative financial instruments are initially recorded at fair value and subsequently adjusted to fair value at the close of each reporting period. The Company estimates fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered to be consistent with the objective measuring fair values. In selecting the appropriate technique, management considers, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. For less complex derivative instruments, such as free-standing warrants, the Company generally uses the Black-Scholes-Merton option valuation technique because it embodies all of the requisite assumptions (including trading volatility, dividend yield, estimated terms and risk free rates) necessary to fair value these instruments. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of our common stock, which historically has a high volatility. Since derivative financial instruments are initially and subsequently carried at fair values, our income (loss) will reflect the volatility in these estimate and assumption changes.

l. Fair Value Measurements - The Company follows the provision of ASC No. 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 clarifies that fair value is an estimate of the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date) and provides for use of a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Input other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of ~~the Company~~us.

Level 3: Unobservable inputs reflect the assumptions that ~~the~~we ~~Company~~develop ~~develops~~ based on available information about what market participants would use in valuing the asset or liability.

An asset or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability of observable inputs can vary and is affected by a variety of factors.

~~The~~We use ~~Company uses~~ judgment in determining the fair value of assets and liabilities, and level 3 assets and liabilities involve greater judgment than level 1 and level 2 assets and liabilities.

The carrying values of ~~accounts receivable~~receivables, ~~inventory~~inventories, accounts payable and accrued expenses, royalty payable, and ~~notes payable~~short-term ~~approximate~~debt approximate their fair values due to their short-term maturities. ItManagement ~~was~~believes ~~impracticable to estimate~~ the ~~fair~~carrying ~~value~~values of ~~the~~ ~~Company’s~~our ~~investment~~lines ~~(see notes 7). However, management believes the carrying value~~ of ~~the~~credit ~~Company’s~~ and long-term debt approximates fair value due to the borrowing rates currently available to ~~the~~us ~~Company~~ for loans with similar terms. ~~See note 3 for fair value of derivative liabilities.~~

m. Advertising Expenses - The Company expenses advertising costs as incurred. The Company incurred advertising expenses in the amount of $0 and $63,000 for the three month period ended September 30, 2014 and 2013, respectively, and $29,017 and 267,413 for the nine months ended September 30, 2014 and 2013, respectively.9

~~n. Stock-Based Compensation - Compensation expense is recognized for the fair value of all share-based payments issued to employees and consultants. As of September 30~~SCRIPSAMERICA, ~~2014 and December 31, 2013, the Company issued 10,450,000 and 5,015,000, respectively~~ ~~for employee stock options that required calculating the fair value using a pricing model such as the Black-Scholes pricing model~~INC. ~~See Note 13 for fair value of these employee stock options.~~

Notes to condensed consolidated financial statements (Unaudited)

For the three months ended March 31, 2015

j. Stock-Based Compensation - Compensation expense is recognized for the fair value of all share-based payments issued to employees and consultants. During the three months ended March 31, 2015 and 2014, we issued 205,000 and 75,000 employee and directors stock options, respectively, that required calculating the fair value using a pricing model such as the Black-Scholes pricing model (see Note 10).

For non-employees, stock grants issued for services are valued at either the invoiced or contracted value of services rendered, or the fair value of stock at the date the agreement is reached, whichever is more readily determinable. For stock options and warrants granted to non-employees, the fair value at the grant date is used to value the expense. If the options or warrants are for future services, they are revalued at each reporting period unless there is a significant disincentive for non-performance. In calculating the estimated fair value of our stock options and warrants, we used a Black-Scholes pricing model which requires the consideration of the following variables for purposes of estimating fair value:

the stock option or warrant exercise price;

the expected term of the option or warrant;

the grant date fair value of our common shares, which is issuable upon exercise of the option or warrant;

the expected volatility of our common shares;

expected dividends on our common shares (although we do not anticipate paying dividends in the foreseeable future);

the risk free interest rate for the expected option or warrant term; and

the expected forfeiture rate.

k. Noncontrolling Interest - We recognize noncontrolling interest as equity in the condensed consolidated financial statements separate from the parent company’s equity (deficit). Noncontrolling interest results from a partner in PIMD owning 10% of PIMD as of March 31, 2015, and December 31, 2014. The amount of net income (loss) attributable to noncontrolling interests is included in condensed consolidated net income (loss) on the condensed consolidated statements of operations. For the three months ended March 31, 2015 and 2014, the noncontrolling interests’ share of net income (loss) totaled $13,374 and ($44,400), respectively. Additionally, operating losses are allocated to noncontrolling interests even when such allocation creates a deficit balance for the noncontrolling interest member.

l. Earnings (Loss) Per Share - Basic net income (loss) per common share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock warrants, options, convertible notes payable and Series A Convertible Preferred Shares. Common stock equivalents are not included in the computation of diluted earnings per share when we report a loss because to do so would be anti- dilutive. For details on number of common stock equivalents, see Note 11 below.

m. Recent Accounting Pronouncements - In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases, which requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the condensed consolidated balance sheet. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. While the Company is still evaluating ASU 2016-02, the Company expects the adoption of ASU 2016-02 to have a material effect on the Company’s condensed consolidated financial condition due to the recognition of the lease rights and obligations as assets and liabilities. The Company does not expect ASU 2016-02 to have a material effect on the Company’s results of operations and cash flows.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory, which requires entities to measure most inventory “at the lower of cost and net realizable value (“NRV”),” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. Under the new guidance, inventory is “measured at the lower of cost and net realizable value,” which eliminates the need to determine replacement cost and evaluate whether it is above the ceiling (NRV) or below the floor (NRV less a normal profit margin). The guidance defines NRV as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” The guidance is effective for annual periods beginning after December 15, 2016, and interim periods therein. Early application is permitted. The Company is evaluating the impact of adoption of this guidance on its condensed consolidated financial statements.

~~For non-employees~~SCRIPSAMERICA, ~~stock grants issued for services are valued at either the invoiced or contracted value of services provided, or~~ ~~the fair value of stock at the date the agreement is reached, whichever is more readily determinable~~INC. For stock options and warrants granted to non-employees, the fair value at the grant date is used to value the expense. If the options or warrants are for future services, they are revalued at each reporting period unless there is a significant incentive for non-performance. In calculating the estimated fair value of its stock options and warrants, the Company used a Black-Scholes pricing model which requires the consideration of the following seven variables for purposes of estimating fair value:

·Notes to ~~the~~condensed ~~stock~~consolidated ~~option~~financial orstatements warrant exercise price, · the expected term of the option or warrant, · the grant date fair value of our common stock, which is issuable upon exercise of the option or warrant, · the expected volatility of our common stock, · expected dividends on our common stock (~~although we do not anticipate paying dividends in the foreseeable future~~Unaudited)~~, · the risk free interest rate for the expected option or warrant term, and · the expected forfeiture rate.~~

o. For ~~Earnings (Loss) Per Share - Basic net income (loss) per common share is computed using~~ the ~~weighted~~three ~~average number~~months ofended ~~common~~March ~~shares outstanding during the period. Diluted earnings per share include additional dilution from common stock equivalents~~31, such as stock issuable pursuant to the exercise of stock warrants, options, convertible notes payable and Series A convertible preferred shares. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive. As of September 30, 2014, common stock equivalents consisted of preferred stock convertible into 5,980,504 shares of common stock, warrants convertible into 5,228,572 shares, options convertible into 10,450,000 shares and notes payable convertible into 3,740,800 shares of common stock.2015

p. In ~~Reclassification~~April -2015, ~~Certain~~the ~~reclassifications~~FASB ~~have~~issued ~~been~~ASU ~~made~~2015-03, toSimplifying the ~~2013~~Presentation ~~financial~~of ~~statements~~Debt Issuance Costs. This update requires capitalized debt issuance costs to ~~conform~~be classified as a reduction to the carrying value of debt rather than a deferred charge, as is currently required. This update will be effective for the Company for all annual and interim periods beginning after December 15, 2015 and ~~2014~~is ~~condensed~~required ~~financial~~to ~~statements~~be ~~presentation~~adopted retroactively for all periods presented, and early adoption is permitted. ~~These~~In ~~reclassifications~~August ~~had~~2015, noASU ~~effect~~2015-15 was onissued ~~net~~to ~~loss~~address orASU ~~cash~~2015-03 ~~flows~~as it relates to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as ~~previously~~an asset and subsequently amortizing the deferred debt issuance costs ratably over the term ~~reported~~of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company is evaluating the impact of adoption of this guidance on its condensed consolidated financial statements.

q. In ~~Recent~~August 2014, the FASB issued Accounting ~~Pronouncements~~Standards –Update, ~~Management~~or ~~does~~ASU, ~~not~~No. ~~believe~~2014-05, Presentation Of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU 2014-15 requires management to evaluate whether there are conditions and events that ~~any~~raise ~~recently~~substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued ~~but~~(or ~~not~~available ~~yet~~to ~~effective~~be issued when ~~accounting~~applicable) ~~pronouncements~~and, if ~~adopted~~so, ~~would~~disclose that fact. ASU 2014- 15 is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have anot previously been issued. We do not expect the adoption of the ASU 2014-15 to have a material effect on ~~the~~our ~~accompanying~~condensed consolidated financial ~~statement~~statements and disclosures.e.

4In –May ~~REVENUES~~2014, ~~NET~~the FASB issued ASU 2014-09, ~~FROM~~Revenue ~~CONTRACT~~from ~~PACKAGER~~Contracts ~~AND~~with ~~COMMISSION~~Customers. ~~FEES~~This updated guidance supersedes the current revenue recognition guidance, including industry-specific guidance. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The updated guidance is effective for interim and annual periods beginning after December 15, 2016, and early adoption is not permitted. In July 2015, the FASB decided to delay the effective date of ASU 2014-09 until December 15, 2017. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. The Company is currently evaluating which transition method it will adopt and the expected impact of the updated guidance on its condensed consolidated financial statements.

~~The~~Management ~~Company~~does ~~previously~~not ~~had~~believe anthat ~~agreement~~any ~~with~~other ~~its~~recently ~~Contract Packager~~issued, ~~which~~but ~~was~~not ~~superseded~~yet byeffective, anaccounting ~~amended~~pronouncements, ~~agreement~~if ~~entered into on September 6~~adopted, ~~2013.~~would ~~Under~~have ~~this September 6th agreement the Company is entitled to receive~~ a ~~percentage of the Contract~~material ~~Packager’s~~effect ~~profit,~~on ~~defined as~~ the ~~net~~accompanying ~~of financing charges and royalties. Since the Company is not deemed to be the principal in these sales transactions we do not report these sales transactions on a gross basis in our~~ condensed ~~statements of~~consolidated ~~operations.~~financial ~~The revenue is reported separately in the condensed~~ statements ~~of operations as “Revenues net, from Contract Packager”~~.

~~The~~n. Reclassification - ~~gross~~Certain ~~sales~~reclassifications ~~and~~have ~~cost~~been ofmade ~~sales~~to the 2014 condensed consolidated financial statements to conform to the 2015 ~~from~~condensed ~~this~~consolidated Ufinancial statements presentation.S. ~~government~~These ~~contracts~~reclassifications ~~were:~~had no effect on the net loss or cash flows as previously reported.

	Three month sales as of September 30,				Nine month sales as of September 30,
	2014		2013		2014		2013
Sales from US government contract	$	3,519,621	$	1,005,606	$	10,726,464	$	4,269,931
Cost on US government, per agreement		3,390,729		948,964		10,354,654		3,984,787
Revenue - net, from contract packager	$	128,892	$	56,642	$	371,810	$	285,144

4 – INVENTORIES

Inventories consist of the following:

	March 31, 2015		December 31, 2014
Finished product at PIMD and Main Ave Pharmacy	$	926,888	$	191,908
Raw material at Main Avenue Pharmacy		421,901		543,855
Total Inventories	$	1,348,789	$	735,763

No inventory reserves or lower of cost or market adjustments are considered necessary as of March 31, 2015 and December 31, 2014.

~~In August 2013~~SCRIPSAMERICA, ~~the Company~~ ~~entered into an agreement with a pharmaceutical aggregator (“WholesaleRx”) which began shipping generic pharmaceutical and OTC products to independent pharmacies~~INC. Under this agreement, which was amended on November 1, 2013, and then, subsequently amended by oral agreements, the Company received a commission of 14% on gross margins of pharmaceutical products sold.

	Three month sales as of September 30,				Nine month sales as of September 30,
	2014		2013		2014		2013
Sales - WholesaleRx	$	356,154	$	188,232	$	1,845,591	$	188,232
Cost		318,296		171,607		1,649,996		171,607
Commission Revenue	$	37,858	$	16,625	$	195,595	$	16,625

Notes to condensed consolidated financial statements (Unaudited)

~~In August 2014, the Company~~For ~~also entered into two other commission revenue agreements with independent pharmacy which generated commission revenue of $6,533 for~~ the three ~~and nine~~ months ~~period~~ ended ~~September~~March 3031, ~~2014.~~2015

5 – ~~INVENTORY~~PREPAID EXPENSES AND OTHER CURRENT ASSETS

Inventory consists of the following:

	As of September 30, 2014		As of December 31, 2013
Finished product at subcontract - RapiMed®	$	275,010	$	–
Finished product at PIMD, net of discounts		11,691		–
Raw material at Main Avenue Pharmacy		441,463		–
Total Inventory	$	728,164	$	–

No inventory reserves or lower of cost or market adjustments are considered necessary at September 30, 2014 since all products are less than 12 months in age. The finished goods product at subcontractor is for product to be sold once we get approval from Hong Kong regulators (see note 10).

6 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

	As of September 30, 2014			As of December 31, 2013
	March 31, 2015			December 31, 2014
Prepayment for product to be manufactured	$	–	(a)	$	275,000
Prepaid insurance	$	49,327		$	46,271
Prepaid insurances		56,396			25,400
Deferred financing costs, net		14,450			17,075
Deferred financing costs, net		19,700			27,575
Prepaid royalty		28,315			28,315
Prepaid, other		5,984			1,698
Total prepaid expenses and other current assets	$	92,092		$	91,661
Advances to WholesaleRx		32,485			–
Total prepaid expenses and other current assets	$	114,565		$	329,673

~~(a)~~6 – ~~Funds~~PROPERTY ~~provided~~AND ~~for production of RapiMed® tablets by third party manufacturer. The production was completed and the tablets were reclassified as inventory in June 2014~~EQUIPMENT, ~~and remain so classified.~~NET

Property and equipment consist of the following:

	March 31, 2015			December 31, 2014
Machinery and equipment	$	121,537		$	103,415
Furniture and Fixtures		9,703			9,703
Software		6,909			5,909
		138,149			119,027
Less accumulated depreciation		(26,860	)		(17,634	)
	$	111,289		$	101,393

Depreciation expense for the three months ended March 31, 2015 and 2014, was $9,226 and $0, respectively.

7 – OTHER ASSETS, NET

Other assets consist of the following:

	March 31,		December 31,
	2015		2014
Prepayment for product to be manufactured	$	160,520	$	160,520
Accounts receivable line of credit deferred financing costs		275,175		300,766
Other		19,120		19,120
Total other assets	$	454,815	$	480,406

7SCRIPSAMERICA, ~~– INVESTMENTS in WholesaleRx~~INC.

~~As of September 30, 2014, the Company has a 14% non-controlling ownership interest~~Notes ~~in WholesaleRx. WholesaleRx represents over 700 such independent pharmacy operators. WholesaleRx is DEA and State-licensed~~ to ~~store~~ ~~and~~condensed ~~distribute~~consolidated ~~controlled~~financial ~~substances~~statements (~~which are drugs that have the potential for abuse or dependence and are regulated under the federal Controlled Substances Act~~Unaudited). WholesaleRx orders the goods from the manufacturers and has them shipped to its warehouse facility. WholesaleRx then ships the goods to the pharmacies in the bottles as received by the manufacturer. Upon receiving orders from the pharmacies, goods are sent to them COD which eliminates any accounts receivable realization issues. Prior to November 1, 2013, the Company and WholesaleRx had an oral agreement pursuant to which the Company secured third party financing to fund WholesaleRx’s purchase orders. The Company would receive 12.5% of WholesaleRx’s “gross profit” for the prior month (which gross profit would consist of (i) sales to all customers minus (ii) cost of goods sold, freight in (to WholesaleRx), credits and allowances).

~~Per the November 1, 2013 agreement~~For the Company agreed to make an equity investment of $400,000 for 12,000 shares, (which would represent a 20% ownership interest in WholesaleRx) and to provide purchase order financing. WholesaleRx would pay the Company, on or before the 15th calendar day of each month, 14% of the gross profit (as described above) for the prior calendar month. If WholesaleRx is late in paying such 14% fee, then the amount owed will accrue interest at the rate of 18% per annum until paid. The subscription amount was to be paid in three ~~installments,~~months ~~$150,000~~ended ~~upon~~March ~~execution of the agreement, $125,000 on December~~ 31, ~~2013 which was paid in January 2014 and $125,000 on February 15, 2014, which was not paid due to the November 1, 2013 amendment.~~2015

Subsequent to November 1, 2013, the Company and WholesaleRx made certain changes to the agreement, whereby the Company’s investment was modified to $275,000, and the Company’s ownership interest was modified to 14%, and the Company’s monthly fee was reduced to 14% of the gross profit for the preceding month if the purchase order financing was used during such prior month but only 8~~% if the purchase order~~ ~~financing~~– ~~was~~ACCOUNTS ~~not~~PAYABLE ~~used~~AND inACCRUED ~~such prior month. The subsequent amendments to the arrangement have not been reduced to a formal, written agreement and some of the arrangements are oral amendments.~~EXPENSES

AsAccounts ofpayable ~~August 6, 2014, WholesaleRx stopped making payments to the Company~~ and ~~stopped~~accrued ~~providing~~expenses ~~the~~consist ~~required financial information for calculation~~ of the 14% fee. Accordingly, on October 8, 2014 the Company filed a Complaint in the State of Delaware for the unpaid amounts owing. At the same time, the Company joined with a 40% shareholder, giving them a 54% voting interest and they have jointly filed a derivative action in the Tennessee courts seeking return to the Company of funds alleged to have been improperly withdrawn by management, a 40% shareholder. In addition, the two shareholders (including the Company) have called a shareholders meeting with the intent to change the Board of directors and management. Based on these actions and current information available the Company does not believe the investment to be impaired.following:

On November 10, 2014, new management was installed as a result of the Board meeting. No significant assets were reduced and with the change of management our current agreement will resume, consequently no reserve for our outstanding receivable or reserve for our investment was considered necessary as of September 30, 2014.

	March 31, 2015		December 31, 2014
Accounts payable and general accruals	$	1,223,984	$	676,467
Accrued commissions and billing expense		1,925,922		4,003,088
Accrued Ironridge settlement (see Note 15)		1,564,655		164,655
Accrued Pharmanostics settlement (see Note 15)		287,500		–
Finance fee payable		50,000		50,000
Deferred rent		541		3,956
Total accounts payable and accrued expenses		5,052,602		4,898,166
Less current portion		3,627,602		4,873,166
Long-term accounts payable and accrued expenses	$	1,425,000		25,000

~~This investment was originally accounted~~9 ~~for~~– under the equity method because the Company expected the investment to exceed 20%. The Company’s initial investment of $275,000 was increased for the equity earnings of our 14% interest from the date of initial investment to March 31, 2014, to a total of $278,265. It was originally anticipated that the investment would be 20% or possibly greater so we had recorded the investment using the equity method but circumstances have changed. As of September 30, 2014, we had no access to WholesaleRx’s records and the Company is continuing to recording this investment using the cost method.DEBT

8Debt consists –of ~~P.I.M.D~~the ~~International~~following as of March 31, ~~LLC~~ 2015 and December 31, 2014:

P.I.M.D. International, LLC (“PIMD”), a start-up limited liability company based in, and proposing to do business in, Florida, is considered to be a Variable Interest Entity (VIE). Our determination that PIMD is a variable interest entity (VIE) was based on the fact that PIMD’s equity at risk is insufficient to finance its activities. The Company would be considered the primary beneficiary of the VIE as it has both: (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant or the right to receive benefits from the VIE that could potentially be significant. The Company receives a majority of PIMD’s expected profits and losses. We also will provide the primary financing for inventory purchases through related parties.

	March 31, 2015		December 31, 2014
Line of credit – Wells Fargo	$	–	$	–
Line of credit - Triumph		624,376		377,056
Debt with related party		197,899		230,286
12% Fixed rate convertible notes payable		559,852		559,852
12% Fixed rate convertible notes payable-related party		112,669		112,669
12% note payable		200,000		200,000
12% notes payable – related party		141,000		100,000
Total notes payable		1,835,796		1,579,863
Less current maturities		1,102,438		511,080
Long-term debt	$	733,358	$	1,068,783

Line of Credit – Wells Fargo

In October 2013, our line of credit from Wells Fargo Bank was renewed through October 2017. This line of credit allowed us to borrow up to a maximum of $100,000, at an interest rate of prime plus 6.25% (9.50% as of March 31, 2015). The line of credit was secured by a personal guarantee from our former Chief Executive Officer. The outstanding borrowings under this line of credit as of March 31, 2015 and December 31, 2014, was $0. During the three months ended March 31, 2015, we borrowed $76,000 and paid off the $76,000 balance. We incurred interest expense under this line of credit of approximately $50 and $134 during the three months ended March 31, 2015 and 2014, respectively. In July 2015, this line of credit was terminated with the bank in connection with our former Chief Executive Officer’s resignation (see Note 17 for details).

The assets and liabilities and revenues and expenses of PIMD have been included in the accompanying condensed consolidated financial statements. During 2014 the non-controlling interest in PIMD made a distribution of $114SCRIPSAMERICA,~~237, and in 2013 also made a distribution of $119,650 to the shareholders of PIMD.~~ ~~In nine months period ending September 30, 2014, the loss recorded to the statement of operations was $114,565 for a cumulative loss of $132,875~~INC. ~~The total equity attributed to the non-controlling interest is a deficit of $375,368 at September 30, 2014.~~

~~In December, 2013, the Company revised~~Notes ~~an October 2013 purchase agreement~~ to ~~acquire~~condensed ~~90%~~consolidated offinancial ~~the~~statements Membership Units in PIMD. Although founded approximately 4 years ago, PIMD has had no sales, but has the necessary licenses for operation of a drug wholesale operation. The purchase of the Membership Units in PIMD was subject to certain conditions precedent, of which the most important was that the Company obtain the necessary licenses from Florida (~~and from the DEA~~Unaudited) for the ownership of a drug distribution company like PIMD. However, it was determined that securing the licenses was going to require a substantially longer period of time than the parties had anticipated. Consequently, in order to preserve the business opportunity, it was necessary to change the structure of the relationship. Accordingly, the original purchase agreement was cancelled and voided. The funds already advanced by the Company to PIMD were converted to a loan and the relationship between PIMD and the Company became a Sourcing and Marketing Agreement. Implex Corporation (“Implex”), owned by the Company’s legal counsel and a shareholder, who is a Florida resident, has stepped in to assist with any licensing issues. The Company believes that if licensing is required it will be that of Implex, based in Florida and with a Florida owner.

~~PIMD~~For the ~~unaudited~~three ~~financial~~months ~~information~~ended isMarch ~~as follows:~~31, 2015

P.I.M.D Statement of Operations	For the threemonths ended September 30, 2014			For the ninemonths ended September 30, 2014
Product revenue-net	$	65,900		$	72,700
Cost of Goods Sold	$	42,600		$	48,500
Gross Profit	$	23,300		$	24,200
Operating Costs and Expenses:
Selling, General and Administrative	$	52,200		$	138,800
Net Loss	$	(28,900	)	$	(114,600	)

Line of Credit – Triumph

	As of September 30, 2014			As of December 31, 2013
Current assets	$	47,000		$	31,000
Total assets	$	130,000		$	31,000
Liabilities	$	505,000		$	177,000
Stockholders' Equity	$	(375,000	)	$	(146,000	)

On December 8, 2014, Main Avenue entered into an agreement for a revolving line of credit facility with Triumph Community Bank, N.A. d/b/a Triumph Healthcare Finance (“Triumph”). The agreement is for a term of three years. The facility covers, and is both secured through a lockbox account arrangement and limited by, the accounts receivable of the pharmacy, as well as being secured by a security interest in all of the other assets of Main Avenue. Main Avenue may draw against the line of credit, up to a maximum of $4,000,000, as accounts receivable are developed from the filling of prescriptions for the specialty drugs and may continue to draw as the then outstanding line is reduced by the payment of the previously financed receivables. The amount drawn cannot exceed 85% of the accounts receivable. The interest rate is variable, being calculated as the Base Rate plus the Margin (3%). The Base Rate is the greater of the Prime Rate or the Floor Rate (3.25%). As of March 31, 2015, the interest rate was 6.25% per annum.

~~Implex,~~On December ~~a related party~~9, ~~borrowed $272~~2014,~~000~~ ~~from~~Main ~~the~~Avenue ~~Company~~paid at$197,095 andirectly ~~interest rate of 2% and it has re-loaned the funds~~ to ~~PIMD~~third atparties anfor ~~interest~~various ~~rate~~financing offees ~~5%.~~covering ~~Implex~~origination, ~~will~~legal, ~~keep~~audit ~~the~~and 3%finder ~~differential~~fees. ~~The~~These ~~Company’s~~fees ~~loan~~were torecorded ~~Implex~~as ~~and~~prepaid ~~Implex’s~~financing ~~loan~~fees toand ~~PIMD~~will ~~are~~be ~~both~~amortized ~~for~~using athe ~~five~~straight-line ~~year period. Implex~~method ~~entered~~which ~~into~~approximates athe ~~“Business~~effective ~~Development~~interest ~~and~~method ~~Retention~~over ~~Agreement” with PIMD to assist PIMD with~~ the ~~development~~term of ~~its business~~36 months.

9The agreement –has ~~BUSINESS~~a ~~COMBINATION~~facility ~~AND~~fee of $50,000 payable as follows: $25,000 payable on December 8, 2015 and $25,000 on the second anniversary ~~INTANGIBLE~~on ~~ASSETS~~December 8, 2016. This fee is included in the prepaid finance fees which is being amortized over the term of this agreement. The agreement has an early termination fee of $120,000 if terminated before the first anniversary of the closing date, $60,000 to the second anniversary closing date and $20,000 until the day immediately prior to December 8, 2017. The agreement has an unused line fee of 0.75% per annum payable in arrears on the first day of each month, calculated on the difference between the average daily balance and the total facility limit.

OnThe agreement ~~January~~contains ~~29,~~certain ~~2014,~~customary ~~Implex, which is owned by our legal counsel~~ and ~~related~~financial ~~party,~~covenants ~~Richard~~that C.must ~~Fox,~~be ~~entered~~met ~~into~~each afiscal ~~stock~~quarter ~~purchase~~beginning ~~agreement~~with tothe ~~acquire~~quarterly period ~~from~~ended ~~MAVP,~~December ~~located in Clifton~~31, ~~New Jersey, for $550,000~~2014. ~~The~~Financial ~~purchase~~covenants ~~price~~are ~~was~~as ~~paid~~follows: in(a) ~~installments~~Minimum ~~and~~Debt ~~paid~~Service inCoverage ~~full~~Ratio (as ofdefined) ~~June~~shall be ~~30,~~at ~~2014~~least 1.10 ~~Since~~to ~~the~~1.0, ~~Company~~(b) ~~will have~~Minimum ~~significant~~Current ~~controlling~~Ratio ~~interest~~(as ~~via~~defined) ~~related~~shall ~~party~~be ~~relationships~~at ~~and~~least ~~will~~1.10 beto ~~the~~1.0 ~~primary~~and ~~beneficiary,~~(c) ~~the~~Minimum ~~Company~~Tangible ~~consolidated~~net worth ~~financial~~(as ~~activities~~defined) of ~~MAVP~~$2,500,000. ~~Subsequently~~As inof ~~October~~March ~~2014~~31, ~~the~~2015 ~~Implex~~and ~~ownership~~December ~~interest~~31, in2014, ~~MAvP~~we ~~was~~were ~~transferred~~not toin ~~the~~compliance ~~Company for~~with nothese ~~additional~~covenants ~~consideration~~and ashave obtained ~~the~~a ~~Company~~waiver ~~previously~~from ~~reflected~~Triumph ~~100%~~which ofhas cured the ~~purchase~~events ~~price through VIE consolidation. The Company now owns 100%~~ of ~~the~~default ~~assets~~(see ~~and~~Note ~~outstanding common stock of MAvP~~17).

On January 5, 2016, as part of the waiver, Triumph amended and modified covenants as follows: (a) Minimum Debt Service Coverage Ratio (as defined) shall be at least 1.10 to 1.0, (b) Minimum Current Ratio (as defined) shall be at least 0.85 to 1.0 (c) Minimum Tangible net worth (as defined) of 100,000 at December 31, 2015 increasing $50,000 per quarter until reaching $300,000, (d) Minimum EBITDA (as defined) shall be at least $10,000 per quarter, and (e) added concentration limits (as defined) percent on the total accounts receivable deemed eligible.

The outstanding borrowings under this line of credit as of March 31, 2015 and December 31, 2014 was $624,376 and $377,056, respectively. We incurred interest expense under this line of credit of $22,202 and recorded a finance fee expense of $25,591 for the three months ended March 31, 2015, related to the amortization of deferred financing fees.

Debt with Related Party

On August 15, 2012, we entered into a four year term loan agreement in the amount of $500,001 with Development 72, LLC (“Development 72”), a Limited Liability Company, a company controlled by Andrius Pranskevicius, a member of our Board of Directors and related party, for the purpose of funding the inventory purchases of RapiMed®. This loan bears interest at the rate of 9% per annum, with 48 equal monthly installments of interest and principal payments of $12,443 and matures on August 15, 2016. We may prepay the loan, in full or in part, subject to a prepayment penalty equal to 5% of the amount of principal being prepaid. The loan is secured by our assets.

In addition to the monthly loan repayments during the 48 month period ending August 15, 2016, and regardless if the related debt is prepaid in full, we will pay to Development 72 a royalty equal to one percent (1%) of all revenues that we receive from our sale or distribution of RapiMed®. The royalty payments will be made quarterly and are subject to a fee for late payment or underpayment. There were no sales of RapiMed® during the three months ended March 31, 2015 and 2014, and therefore, no royalties were paid or owed.

Interest expense associated with this note for the three months ended March 31, 2015 and 2014 was $4,940 and $7,717, respectively. The total outstanding balance on this loan as of March 31, 2015 and December 31, 2014 was $197,899 and $230,286, respectively, with current maturities balance of $137,062 and $134,024, respectively. On January 14, 2016, we prepaid Development 72 $96,985 for balance of principal and interest related to this note payable.

~~Under the purchase agreement with the seller~~SCRIPSAMERICA, ~~Implex acquired~~ ~~the workforce (3 employees) and the applicable state pharmacy licenses but the purchase did not include cash, receivables or any existing customer lists of the owner~~INC. It also excluded any existing liabilities prior to January 29, 2014. The total purchase price of $550,000 was preliminary allocated to MAvP’s net tangible and intangible assets based on the estimated fair value as of January 29, 2014. Excess purchase consideration, if any, was allocated to goodwill. This preliminary valuation determined that there were two intangible assets acquired, were the licenses with an estimated value of $12,000 and a one year life and licenses that have an indefinite life. As a result, $538,000 was allocated to indefinite intangible assets. The Company amortized the intangible assets for the licenses beginning in March 2014 and has recorded an amortization expense of $8,000 as of September 30, 2014. Intangible assets with indefinite lives are not amortized; however, they are tested annually for impairment and when events or circumstances indicate change in fair value.

~~The payment of the purchase price of $550,000 is as follows:~~Notes The initial installment payment of $475,000 was made via a $175,000 payment directly from the Company on Implex’s behalf and $300,000 in borrowings obtained by Implex, 250,000 from a current stockholder and $50,000 from a related party (See note 10 for note details). A $60,000 installment payment was made in April 2014 and the final payments were made in June 2014. MAvP is a specialty pharmacy which is licensed to ~~prepare~~condensed and fill prescriptions via a topical cream format versus pill format. MAvP was basically a dormant business and had no significant sales prior to the acquisition in 2014, and MAvP was acquired for its Pharmacist and license. Since the Company has significant controlling interest via related party relationships and will be the primary beneficiary, the Company has consolidated ~~the~~ financial ~~activities~~statements ~~of MAvP from the date of MAvP acquisition.~~(Unaudited)

~~The~~For ~~Company’s condensed consolidated financial statements for~~ the ~~nine~~three months ended ~~September~~March 3031, 2014 include the results of MAVP since the date of acquisition. The entire product revenue and product cost of sales in the September 30, 2014 statement of operations is related to MAVP. Because there were not significant operations in 2013 and because the 2014 operations prior to the acquisitions on January 29, 2014, were not material, proforma financial information for 2013 and 2014 is not deemed necessary. No material transactions in 2013 or prior to acquisition so no proforma is required as it is represents actual operations.2015

On February 20, 2014, Implex and MAVP, the specialty pharmacy being acquired by Implex, entered into a Business Management Agreement with ScripsAmerica, effective as of February 7, 2014. Under this agreement, Implex has engaged the Company to manage the day to day business operations of MAVP, subject to the directives of Implex. The Company’s day to day management responsibilities includes financial management but excludes any matters related to licensing and those responsibilities which require Federal or state licensure (“Licensing Matters”). Implex will be responsible for managing Licensing Matters. The Company will also provide funding (as a loan or advance), to the extent not covered by the funds of the pharmacy, to pay all costs and expenses incurred in the operation of MAVP.

The original agreement date February 20, 2014 has been amended so that Scrips for its management services provided by the amended Business Management Agreement, effective April 1, 2014, ScripsAmerica will receive 100% of the profits and losses of MAVP as defined by GAAP for profits and losses and since ScripsAmerica has controlling interest in Implex, management has consolidated the accounts and activities of MAVP from January 29, 2014 through September 30, 2014.

10 – Foreign Sales Consortium (formerly referred as JOINT VENTURES AGREEMENT)

In January 2014, the Company formed a sales and distribution consortium with Forbes Investments, Ltd. (and its assigns) and Sterling, LLC (and its assigns) for the purpose of marketing, supplying and distributing RapiMed® in foreign markets. Global Pharma was chosen to be the distributor. The initial market is to be in China, where Global Pharma began marketing RapiMed®. The ownership of Global Pharma is as follows: (a) the Company owns 37%, (b) Forbes Investments, Ltd. owns 37% and (c) Sterling, LLC owns 26%. Forbes Investment, Ltd. is based in Shenzhen, China. The parties have a written understanding of this consortium although a final, binding contract is in process of being prepared for signature.

In January 2014, we entered into an exclusive license and marketing agreement that allows Global Pharma to be the exclusive distributor of RapiMed® as well as our registered trade mark “MELTS IN YOUR CHILD'S MOUTH” worldwide other than the U.S. Global Pharma must meet minimum sales quotas terms as follows:

1. $500,000 in purchase orders during first 12 months of License Agreement; 2. $1,400,000 in purchase orders during second 12 months; and 3. $2,400,000 in purchase orders during the third 12 months.

Global Pharma entered into an exclusive sub-licensing agreement for RapiMed® in the territory of Hong Kong on January 28, 2014, with NYJJ Hong Kong Ltd. to generate initial and ongoing orders for the product following its registration approval by the Hong Kong government. The minimum sales quotas terms of the exclusive Hong Kong sub-licensing agreement are as follows:

1. $550,000 in purchase orders during first 12 months; 2. $1,500,000 in purchase orders during the second 12 months; and 3. $2,500,000 in purchase orders during the third 12 months.

On February 22, 2014, Global Pharma entered into an exclusive sub-licensing agreement with Jetsaw Pharmaceutical, Inc. for the marketing and distribution of RapiMed® pediatric acetaminophen in the territory of Canada for an initial term of three years. The minimum sales quotas terms of the exclusive Canadian sub-licensing agreement are as follows:

1. $120,000 in purchase orders during first 12 months; 2. $220,000 in purchase orders during the second 12 months; and 3. $320,000 in purchase orders during the third 12 months.

As of September 30, 2014, no funds have been provided by any partner, no losses or income generated and this consortium is still in the development stage.

11 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

	September 30, 2014		December 31, 2014
Accounts payable and general accruals	$	713,586	$	226,570
Accrued commission expense	$	1,587,693		–
Accrued Ironridge expense (see note 17)	$	164,655		–
Deferred rent payable - PIMD	$	9,287		–
Total	$	2,475,221	$	226,570

12 – DEBT

Debt consists of the following as of September 30, 2014 and December 31, 2014:

	September 30, 2014		December 31, 2013
Line of credit	$	–		99,223
Debt with related party		261,957		352,816
12% Fixed rate Convertible notes payable		548,231		574,778
12% Fixed rate Convertible notes payable-related party		106,109		120,738
8% variable convertible notes payable		–		116,334
10% variable convertible notes payable		–		179,291
12% variable convertible notes payable		–		48,230
12% 1 year term loan		128,731		–
12% 1 year term loan – related party		25,746		–
24% 1 year term loan		250,000		–
24% 1 year term loan – related party		75,000		–
QuarterSpot – Term loan		28,648		–
Total notes payable		1,424,422		1,491,410
Less current maturities		639,178		511,590
Long-term debt	$	785,244	$	979,820
Debt discounts consist of the following:
8% variable convertible notes payable	$	–	$	286,166
10% variable convertible notes payable		–		100,709
12% variable convertible notes payable		–		40,794
Total Discounts	$	–	$	427,669

Line of Credit

In October 2013, the Company’s line of credit from Wells Fargo Bank was renewed through October 2017. This line of credit allows the Company to borrow up to a maximum of $100,000, at an interest rate of prime plus 6.25% (9% at September 30, 2014). The line is secured by a personal guarantee by the Company’s CEO. The outstanding borrowings under this line of credit at September 30, 2014 and December 31, 2013 were $0 and $99,222, respectively. The Company incurred interest expense under this line of credit of approximately $0 and $937 and $146 and $2,406 for the three and nine months ended September 30, 2014 and 2013, respectively.

Debt With Related Party

On August 15, 2012, the Company entered into a four year term loan agreement in the amount of $500,001 with Development 72, LLC (a related party) for the purpose of funding the inventory purchases of RapiMed®. This loan bears interest at the rate of 9% per annum, with 48 equal monthly installments of interest and principal payments of $12,443 and matures on August 15, 2016. The Company may prepay the loan, in full or in part, subject to a prepayment penalty equal to 5% of the amount of principal being prepaid. The loan is secured by the assets of the Company.

In addition to the monthly loan repayments, during the 48 month period ending August 15, 2016, and regardless if the loan is prepaid in full, the Company will pay to Development 72 a royalty equal to one percent (1%) of all revenues that the Company receives from the Company’s sale or distribution of RapiMed®. The royalty payments will be made quarterly and are subject to a fee for late payment or underpayment. Development 72 is a related party because the manager of Development 72, Andrius Pranskevicius, is a member of the Company’s board of directors. There were no sales during the first three quarters of 2014 and 2013 related to this and therefore no royalties were expensed or owed.

In the event of a default on our loan from Development 72, the interest rate on the loan will increase to 13% for as long as the default continues. A default will occur upon (i) non-payment of a monthly installment or non-performance under the note or loan agreement, which is not cured within ten (10) days of written notice of such non-payment or nonperformance from Development 72, (ii) a materially false representation or warranty made to Development 72 in connection with the loan, (iii) a bankruptcy or dissolution of the Company or (iv) a change of control of the Company or an acquisition of an entity or business by the Company without the affirmative vote of Andrius Pranskevicius as a member of the Company’s board of directors.

The Company is subject to various negative covenants in its loan agreement with Development 72, including but not limited to (i) restrictions on secured loans (subject to certain exceptions), (ii) judgments against the Company in excess of $25,000, (iii) prepayment of any long-term debt of the Company other than promissory notes held by certain investors in the Company and (iv) repurchases by the Company of outstanding shares of its common stock. The loan agreement also provides certain financial covenants which limit the amount of indebtedness the Company may incur until the loan is repaid and restricts the payment of any dividends on its capital stock except for dividends payable with respect to the Company’s outstanding shares of its Series A Preferred Stock.

Interest expenses associated with this note for the three and nine month periods ended September 30, 2014 and 2013 were $6,360 and $21,123, $9,016 and $28,915, respectively. The outstanding balance at September 30, 2014 and December 31, 2013 was $261,957 and $352,816, respectively, with a current liability balance of $131,053 and $122,529, respectively.

12% Fixed Rate Convertible Notes Payable

~~The Company~~ We obtained loans in various amounts beginning in 2011. ~~These notes currently have terms of no required principal payments until maturity which currently are April 1, 2016.~~ In June of 2014, the owners of these notes agreed to extend the maturity dates ~~to April 1, 2016~~ from January 30, 2015 and November 30, 2015 to April 1, 2016. The ~~principal~~holders ~~portion~~ of these notes ~~can~~may beelect ~~converted~~to ~~into~~convert ~~common~~the ~~stock~~principal atand interest ~~any~~outstanding ~~time~~into ~~during~~shares ~~the term~~ of ~~the~~our ~~loan~~common stock at the ~~rate~~price of $0.17 per share at any time during the ~~option~~term of the ~~lender~~note. These notes ~~provides~~provide for interest only payments of 3%, payable quarterly (12% annually), in cash, or ~~in shares of~~ common stock of the Company at $0.17 per share, at the option of the ~~lender~~holder.

During the ~~nine~~three ~~month~~months ~~period~~ ended ~~September~~March 3031, ~~2014 the following activity occurred relating to various notes in this category: the Company received $114~~2015,~~750 in~~ ~~cash~~no ~~for~~payment ~~several~~of ~~new convertible promissory notes; the Company made $149,830 in~~ principal ~~payments.~~occurred ~~The outstanding balance at September 30, 2014~~ and ~~December~~we ~~31,~~recorded ~~2013,~~interest ~~was~~expense ~~$548,231~~of ~~and~~ $~~628~~16,~~795, respectively, with the current liability balance $0 and $289,839, respectively~~796. The Company recorded interest expense of $24,019 for the three ~~and~~months ~~nine month period~~ ended ~~September~~March 3031, 2014,. ~~of $16,799~~The ~~and~~outstanding ~~$59,067,~~balance ~~respectively,~~at ~~and~~March ~~for~~31, ~~the~~2015 ~~three~~ and December ~~nine month periods ended September 30~~31, ~~2013,~~2014 ofwas $12559,~~900 and $37,700, respectively~~852.

With respect to one of the notes in this category, we are also obligated to pay the holder of the note a 1.8% royalty payment on the first $10 million of sales of a generic prescription drug under distribution contracts with Federal government agencies and 0.09% on the next $15,000,000 of such sales. Payments for royalties were made monthly and quarterly.

During the three months ended March 31, 2015 and 2014, we recorded royalty expense of $0 and $112,000, respectively. The contract with the Federal government agencies expired December 31, 2014, and no more royalty expense is expected related to this particular note.

On December 30, 2015, we paid $86,250 to the holder of one of these notes to repay the note in full.

12% Fixed Rate Convertible Notes Payable-Related Party

~~The Company~~ We obtained loans in the aggregate amount of $80,000 ~~in 2011~~ from a company owned by ~~the~~our ~~Company’s~~former Chief Executive Officer. ~~There~~The isloans nowere aggregated into one note. We are not required to make a principal payment on the note until maturity, which is April 1, 2016. ~~The~~In ~~owner~~June of2014, the ~~this~~holder ~~note~~ agreed ~~in June of 2014~~ to extend the maturity date from January 30, 2015 to April 1, 2016. ~~from~~At ~~January~~the ~~30,~~option ~~2015.~~of ~~The~~the holder, the principal and ~~portion~~interest ofdue under the note can be converted into our common stock at any time during the term of the ~~loan~~note at the rate of $0.17 per share ~~at the option of the lender~~. These notes ~~provides~~provide for interest only payments of 3%, payable quarterly (12% annually), in cash, or ~~in shares of~~ common stock of the Company at $0.17 per share, at the option of the ~~lender~~holder.

As of March ~~September 30~~31, ~~2014~~2015 and December 31, ~~2013~~2014, the principal balance of ~~this~~the note with our former Chief Executive Officer was $80,000. We ~~The Company~~ recorded interest expense ~~for~~ ~~the~~of ~~three~~$2,400 ~~and~~for ~~nine~~each ~~month~~of ~~periods~~the ~~ended~~three ~~September~~months ~~30,~~ended ~~2014~~March ~~and 2013~~31, of2015 ~~$2,400~~ and ~~$7,200 and $2,400 and $7,200, respectively~~2014.

In 2012, we received $50,000 in cash for a convertible promissory note from the wife of our former Chief Executive Officer. The note provides for interest only payments of 3%, payable quarterly (12% annually), in cash, or in shares of our common stock at $0.17 per share, at the option of the holder. There is no required principal payment due on the note until maturity which is April 1, 2016. Marlex Pharmaceuticals also co-signed this note.

At March 31, 2015 and December 31, 2014, the principal balance of this note was $32,669. We recorded interest expense of $901 and $980 for the three months ended March 31, 2015 and 2014, respectively. On November 19, 2015, we paid the holder $23,031 for principal and interest to retire this note in full.

We are also obligated to pay a royalty of 0.9% to the holder on the first $25,000,000 of sales of generic prescription drugs under distribution contracts with Federal government agencies. Royalties are required to be paid quarterly. The contract with the Federal government agencies expired December 31, 2014, and no more royalty expense is expected related to this particular note.

SCRIPSAMERICA, INC.

Notes to condensed consolidated financial statements (Unaudited)

For the three months ended March 31, 2015

12% Note Payable

On November 18, 2014, Main Avenue borrowed $200,000 from a stockholder in order to provide funding for inventory. This loan bears interest at the rate of 12% per annum, interest payments are due monthly beginning in December 2014, and on December 31, 2014, by mutual consent, the maturity date was changed from February 18, 2015, to January 30, 2016, for the principal payment along with any outstanding interest payments. Additionally, we shall pay to the lender a royalty of $6.67 for every box of pain patches sold for a period of 90 days beginning November 18, 2014. We recorded interest expense of $6,000 for the three months ended March 31, 2015. We recorded a royalty expense of $2,174 for the pain patches sold during the three months ended March 31, 2015. The balance as of March 31, 2015 and December 31, 2014 is $200,000.

On December 30, 2015, we paid $200,000 to the holder to repay this note in full.

12% Notes Payable – Related Party

On November 18, 2014, Main Avenue borrowed $100,000 from the wife of our former Chief Executive Officer in order to provide funding for inventory. This loan bears interest at the rate of 12% per annum. Interest payments are due monthly beginning in December 2014, and on December 31, 2014, by mutual consent, the maturity date was changed from February 18, 2015, to January 30, 2016, for the principal payment along with any outstanding interest payments. Additionally, we shall pay to the lender a royalty of $3.33 for every box of pain patches sold for a period of 90 days beginning November 18, 2014. We recorded interest expense for the three months ended March 31, 2015 of $3,000. We recorded a royalty expense of $1,086 for the pain patches sold during the three months ended March 31, 2015. The note balance as of March 31, 2015 and December 31, 2014 is $100,000. On February 4, 2016, we paid the holder $112,000 for principal and interest to repay this note in full.

On March 27, 2015, ScripsAmerica borrowed $41,000 from the wife of our former Chief Executive Officer in order to provide funding for inventory. This loan was non-interest bearing. We made various principal payments during April to August 2015 and this loan was paid in full on August 13, 2015.

10 – STOCKHOLDERS’ DEFICIT

General

We are authorized to issue 250,000,000 common shares with a par value of $0.001 per share. Each share is entitled to cast one vote for each share held at all stockholders’ meetings for all purposes, including the election of Directors. The common stock does not have cumulative voting rights.

We are authorized to issue 10,000,000 preferred shares, $0.001 par value per share. Our preferred stock may be issued by our Board of Directors in one or more classes or one or more series within any class, and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations or restrictions as the Board of Directors may determine, from time to time as a class or series is issued.

On March 26, 2014, our Board of Directors approved the “ScripsAmerica, Inc. Incentive Stock Plan” (“SOP”). On April 16, 2014, the SOP was approved by the written consent of our shareholders. The SOP is designed to serve as an incentive for retaining qualified and competent employees, officers and Directors, and certain consultants and advisors. There are 6,000,000 shares authorized for issuance under the SOP.

The purchase price per share of common stock options issued under the SOP shall not be less than 100% of the fair market value at the time the options are granted. The purchase price per option under the SOP to a person who owns more than 10% of our voting power of our voting stock shall not be less than 110% of the fair market value of such shares at the time the options are granted. The total value of options granted, under the SOP, to any one person, shall not exceed any limit imposed by Section 422 or the rules and regulations promulgated by the Internal Revenue Service thereunder. Currently, the limitation is $100,000 in value in our fiscal year.

As of March 31, 2015, no options were issued under the SOP.

SCRIPSAMERICA, INC.

Notes to condensed consolidated financial statements (Unaudited)

For the three months ended March 31, 2015

Issuances during the three months ended March 31, 2015:

During the three months ended March 31, 2015, the Company issued 583,000 restricted shares of common stock in connection with payments for services provided by members of the Board of Directors. These shares were valued at $120,440.

During the three months ended March 31, 2015, the Company issued 328,000 restricted shares of common stock in connection with payments for services provided by employees. These shares were valued at $65,600.

During the three months ended March 31, 2015, we issued 1,165,303 restricted shares of our common stock to non-employee consultants for services rendered. These shares were valued at $231,604.

Warrants

Summary of our warrants activity and related information as of March 31, 2015:

	Number of Shares Under Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
Outstanding at December 31, 2014		5,228,572	$	0.55		4.0	$	–

Granted		–
Exercised		–
Cancelled/expired		–

Outstanding at March 31, 2015		5,228,572	$	0.55		3.7	$	–

Vested and exercisable at March 31, 2015		5,228,572

Options

On January 7, 2015, we granted 80,000 options to members of the Board of Directors and employees for services rendered. These options vested immediately and will expire three years from date of issuance. The options are exercisable at the price of $0.22 per share. The fair value of these options is $12,921, which was expensed to general and administrative expenses.

On January 28, 2015, we granted 45,000 options to members of the Board of Directors for services rendered. These options vested immediately and will expire three years from date of issuance. The options are exercisable at the price of $0.22 per share. The fair value of these options is $7,269, which was expensed to general and administrative expenses.

On March 26, 2015, we granted 80,000 options to members of the Board of Directors and employees for services rendered. These options vested immediately and will expire three years from date of issuance. The options are exercisable at the price of $0.132 per share. The fair value of these options is $7,624 which was expensed to general and administrative expenses.

~~In 2012~~SCRIPSAMERICA, ~~the Company received $50,000~~ ~~in cash for one convertible promissory note from a related party~~INC. The note provides for interest only payments of 3%, payable quarterly (12% annually), in cash, or in shares of common stock of the Company at $0.17 per share, at the option of the lender. There is no required principal payment on the note until maturity which is April 1, 2016. The owner of this note agreed to change the maturity date from January 30, 2015. The principal portion of the note can be converted into common stock at any time during the term of the loan at the rate of $0.17 per share at the option of the lender. The note can be extended by mutual consent of the lender and the Company. Our Contact Packager also co-signed this note.

~~Additionally, the Company shall~~Notes ~~pay~~ to ~~the~~condensed ~~lender~~consolidated ~~under~~financial ~~the~~statements 2012 $50,000 note a royalty of 0.9% on the first $25 million of sales of a generic prescription drug under distribution contracts with Federal government agencies. Payments for royalty will be paid quarterly. During the nine month period ended September 30, 2014, the Company made cash payments of $14,629 in principal and as of September 30, 2014 and December 31, 2013, the principal balance was $26,109 and $40,738, respectively. The Company recorded interest expense for three and nine month periods ended September 30, 2014 of $823 and $3,699, respectively. During the three and nine month periods ended September 30, 2014 the Company, made cash payments for royalty expense in the amount of $25,200 and $63,098, respectively, and issued 42,000 and 163,427, shares of its common stock, respectively, for payment of royalty expense, and recorded a royalty expenses, of $29,400 and $93,400, for the three and nine month periods ended September 30, 2014 respectively.(Unaudited)

8%For the ~~Variable~~three ~~Convertible~~months ~~Notes~~ended ~~Payable~~March 31, 2015

~~In fiscal year 2013 the Company~~Summary ~~entered into six new securities purchase agreements (as~~ of ~~September~~options ~~30,~~activity ~~2014~~and norelated ~~notes~~information ~~were outstanding and~~ as of ~~December~~March 31, ~~2013~~ only four were still outstanding) with various lenders pursuant to which the lenders purchased an 8% convertible note. The Company received $462,000 in cash for these 8% convertible notes payable with the aggregate principal amount equaling $547,500. Some of these notes included (i) a 10% discount in the aggregate amount of $27,500, and (ii) fees totaling $58,000 paid directly to third parties for legal and finder fees. The maturity dates for these notes range from six months to nineteen months from date of issuance. The conversion price for these notes is equal to a 40% to 65% discount to the lowest closing trading prices or an average of trading prices of the Company’s common stock at the close of trading during a 5 to 10 trading day period prior the date of the notice of conversion. For some of these note, there is a prepayment charge ranging from 125% to 150% of the principal amount and accrued interest thereon if made prepayment is made before a set period of time.2015:

Since these notes have a convertible features with a significant discount and could result in the note principal being converted to a variable number of the Company’s common stock, the instrument includes an embedded derivative. The fair value of the derivative associated with these note was determined by using the Black-Scholes pricing model with the following assumptions: no dividend yield, expected volatility ranges between161.6% to 200.7%, risk-free interest rate ranges between 0.07% to 0.12% and expected life of 12 to 11 months. The fair value of the derivative at the date issued amounted to $1,329,815 and was revalued at December 31, 2013 to be $606,112. The debt discount associated with these derivatives is being amortized over the life of the notes.

	Number of Shares Under options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
Outstanding at December 31, 2014		11,445,000	$	0.14		2.2	$	367,090

Granted		205,000	$	0.19		3.0
Exercised		–
Cancelled/expired		–

Outstanding at March 31, 2015		11,650,000	$	0.14		1.9	$	13,275

Vested and exercisable at March 31, 2015		11,650,000

	2015
Option fair value		$0.095 - $0.162
Risk-free interest rate		0.98% - 1.01%
Volatility		148% - 153%
Terms in years		3
Dividend yield		0%

~~During the nine month period ended~~11 ~~September~~– ~~30,~~EARNINGS ~~2014~~(LOSS) ~~the~~PER ~~following~~COMMON activity occurred relating to the various notes in this category: No new borrowings occurred. The Company paid the sum of $66,732 to a holder of one of these notes for the principal of $50,000. This cash payment of $66,732 included the accrued interest and a prepayment penalty charge. The Company extinguished the debt and the embedded derivative which resulted in a gain on extinguishment of $81,792. Two lenders converted $125,000 of principal into 1,890,699 shares of our common stock valued at $368,606. The Company extinguished the debt and the embedded derivative which resulted in a gain on extinguishment of $68,521. The Company also partially paid down the principal of a loan by making cash payments of $127,260 and issuing 2,039,864 of our common stock valued at $224,230. The Company recognized a gain for this extinguishment in the amount of $82,450.SHARE

AsThe basic ofearnings ~~September~~(loss) ~~30,~~per ~~2014,~~share ~~and~~is ~~December~~computed ~~31, 2013~~using the ~~principal~~weighted ~~balance~~average ~~was~~number $0of ~~and~~common ~~$402,500,~~shares ~~respectively,~~outstanding. ~~and~~The ~~the~~assumed ~~unamortized~~exercise of ~~debt~~common ~~discount~~stock ~~was~~equivalents $0were ~~and~~excluded ~~$286,166,~~from ~~respectively. The~~the ~~Company~~calculation ~~recorded~~of ~~interest~~diluted ~~expense~~net ~~for~~loss ~~first~~per ~~quarter~~common ofshare ~~2014~~for ~~and~~the ~~2013~~three ofmonths ~~$61~~ended March 31,~~493~~ 2015 and ~~$13,036,~~2014 ~~respectively.~~because ~~The~~their ~~Company~~inclusion would have been ~~required~~anti-dilutive. toAs ~~issue~~of 0March ~~and~~31, 62015,~~044,978~~ common stock equivalents consisted of ~~common~~preferred stock ifconvertible ~~the~~into ~~lenders~~5,980,504 ~~converted~~shares, onwarrants ~~September~~exercisable 30into 5,228,572 ~~2014~~shares, options exercisable into 11,650,000 shares and ~~December~~notes payable convertible into 3,956,006 shares of common stock. As of March 31, ~~2013~~2014, ~~respectively.~~ ~~The~~common ~~fair~~stock equivalents ~~value~~consisted of ~~the~~preferred ~~derivative~~stock ~~liability~~convertible atinto ~~September~~5,980,504 30shares, ~~2014~~options ~~and~~exercisable ~~December~~into 315,090,000 ~~2013~~shares, ~~was~~warrants exercisable $0into 5,228,572 shares and ~~$606~~notes payable convertible into 8,~~112~~148,206 ~~respectively~~shares of common stock.

~~10%~~12 – ~~Variable~~INCOME ~~Convertible Notes Payable~~TAXES

~~During~~Deferred income ~~the~~tax ~~fiscal~~assets ~~year~~and ~~2013 the~~liabilities ~~Company~~are ~~entered~~determined ~~into~~based ~~twelve~~upon ~~securities~~difference ~~purchase~~between ~~agreements~~the ~~(as~~financial ofreporting ~~September~~and ~~30,~~tax ~~2014,~~basis noof ~~note~~assets and ~~was~~liabilities ~~outstanding~~ and asare ofmeasured ~~December 31,~~using ~~2013~~the ~~only~~enacted ~~seven~~tax ~~were~~rates ~~still~~and ~~outstanding)~~laws ~~with~~that ~~various~~will ~~lenders~~be ~~pursuant~~in toeffect ~~which~~when the ~~lenders~~differences ~~purchased~~are aexpected to ~~10% convertible note~~reverse. ~~The~~ ~~Company~~We ~~received~~do ~~$371,167~~not inexpect ~~cash~~to ~~for~~pay ~~these~~any ~~10%~~significant ~~convertible~~federal ~~notes~~or ~~payable~~state ~~with~~income ~~the~~tax ~~aggregate~~for ~~principal~~2015 ~~amount~~as ~~equaling~~a ~~$405,000. Some~~result of ~~these notes included~~ (i) athe ~~10%~~losses ~~discount~~recorded during in the ~~aggregate~~three ~~amount~~months ofended ~~$11~~March 31,~~250~~ ~~and~~2015, (ii) ~~fees~~additional ~~totaling~~losses ~~$22,583~~expected ~~paid~~for ~~directly to~~the ~~third~~remainder ~~parties~~of ~~for~~2015, ~~legal~~ and/or ~~finder~~(iii) ~~fees.~~net ~~The~~operating loss ~~maturity~~carry ~~dates~~forwards ~~for these notes range~~ from ~~six~~prior ~~months~~years. toAccounting ~~twelve~~standards ~~months~~require ~~from~~the ~~date~~ consideration of ~~issuance.~~a ~~The~~valuation ~~conversion~~allowance ~~price~~ for ~~these~~deferred ~~notes~~tax assets ~~are~~if ~~equal~~it tois a"more ~~35%~~likely tothan ~~65%~~not" ~~discount~~that tosome ~~the~~component ~~lowest closing trading prices~~ or ~~an average~~all of ~~trading~~the ~~prices~~benefits of ~~the~~deferred ~~Company’s~~tax ~~common~~assets ~~stock~~will atnot ~~the~~be realized. ~~close~~As of ~~trading~~March ~~during~~31, a2015, 5we tomaintain 20a ~~trading~~full ~~day~~valuation ~~period~~allowance ~~prior the~~for ~~date~~all ofdeferred ~~the~~tax ~~notice of conversion~~assets. ~~For~~Based ~~some~~on of these ~~note~~requirements, no ~~there~~provision isor abenefit ~~prepayment~~for ~~charge~~income ~~ranging~~taxes ~~from~~has ~~125%~~been torecorded. ~~150%~~There ofwere ~~the~~no ~~principal amount~~recorded ~~and~~unrecognized ~~accrued~~tax ~~interest~~benefits ~~thereon~~at ifthe ~~made~~end ~~prepayment~~of isthe reporting ~~made before a set~~ period ~~of time~~.

We file federal and Delaware state income taxes. Currently, there are no tax examinations in progress, nor have we had any federal or state examinations since our inception in 2008. All of our tax years are subject to federal and state tax examination.

~~Since these notes have a convertible feature with a significant discount and could result in the note principal being converted to a variable number of the Company’s common stock~~SCRIPSAMERICA, ~~the instrument includes an embedded derivative. The fair value of the derivative associated with this note was determined~~ ~~by using the Black-Scholes pricing model with the following assumptions: no dividend yield, expected volatility ranges between 161~~INC.6% to 200, 7%, risk-free interest rate ranges between 0.07% to 0.12% and expected life of 12 to 11 months. The fair value of the derivative at the date issued amounted to $631,361 and was revalued at December 31, 2013 to be $383,337. The debt discount associated with this derivative is being amortized over the life of the notes.

~~During the nine month period ended~~Notes ~~September 30, 2014 the following activity occurred relating various notes in this category: No new borrowing occurred. The Company paid $70,000~~ to acondensed ~~holder~~consolidated offinancial ~~one~~statements of these notes for the principal of $50,000. This cash payment of $70,000 included the accrued interest and a prepayment penalty charge. The Company extinguished the debt and the embedded derivative which resulted in a gain on extinguishment of $98,390. Five lenders converted $178,750 of principal into 3,146,367 shares of our common stock valued at $408,028, and the Company extinguished the debt and the embedded derivative which resulted in a gain on extinguishment of $169,323. One lender partially converted a note with a principal of $51,250 into 457,099 shares valued at $54,852 in our fiscal second quarter and in third quarter converted the remaining principal balance of $25,625 into 446,724 shares.(Unaudited)

~~As of September 30, 2014 and December~~For ~~31, 2013,~~ the ~~principal balance was $0 and $280,000, respectively, and the unamortized debt discount was $0 and $100,709, respectively. For the~~ three ~~and nine~~ months ~~period~~ ended ~~September~~March 30, 2013, the Company recorded interest expense of $4,800 and $9,588, respectively. The Company would have been required to issue 0 and 4,484,138 shares of common stock if the lenders converted on September 30, 2014 and December 31, ~~2013, respectively. The fair value of the derivative liability at September 30, 2014 and December 31, 2013 was $0 and $383,337, respectively.~~2015

~~12%~~13 – ~~Variable Convertible Notes Payable~~COMMITMENTS

~~During~~Operating Lease ~~fiscal~~- ~~year~~We ~~2013 the Company~~ entered into ~~seven~~two ~~new~~long-term ~~securities~~leases ~~purchase~~for ~~agreements~~rented ~~(as~~space. ofOn ~~September~~December 301, 2014, noMain ~~notes~~Avenue ~~were~~entered ~~outstanding~~into ~~and~~a assecond ~~of December~~addendum ~~31,~~for ~~2013~~additional ~~only~~space ~~three~~in ~~were~~Clifton, ~~still~~N.J. ~~outstanding)~~for ~~with~~store/production ~~various~~facility ~~lenders~~and ~~pursuant~~office ~~to which the lenders purchased a 12% convertible note~~space. ~~The~~ ~~Company~~This ~~received~~addendum ~~$233,200~~revised inprior ~~cash~~terms for ~~these~~leases entered ~~12%~~into ~~convertible~~by ~~notes~~Main ~~payable~~Avenue ~~with~~in ~~the~~April ~~aggregate~~2014 ~~principal~~and ~~amount~~October ~~of $263,000~~2014. ~~Some~~ ofThe ~~these~~lease ~~notes~~expires ~~included~~on ~~(i)~~November a30, ~~10%~~2019. ~~discount~~The inmonthly ~~the~~rent ~~aggregate~~is ~~amount of~~ $155,~~000 and (ii) fees totaling $14~~432,~~800 paid directly~~ toescalating ~~third~~by ~~parties~~3% annually, for ~~legal~~total ~~and~~minimum ~~finder~~payments ~~fees.~~over ~~The~~the ~~maturity~~life ~~dates~~of ~~for~~the ~~these~~lease ~~notes~~of ~~range~~$369,065. ~~from~~In ~~three~~November ~~months~~2013, toPIMD ~~twelve~~entered ~~months from date~~into ofa ~~issuance.~~25 ~~The~~month ~~conversion~~operating ~~price~~lease for ~~these~~a ~~notes~~distribution ~~are~~facility ~~equal~~in toDoral, ~~a range of 42~~Florida.5% toThe ~~60%~~lease ~~discount~~began toJanuary ~~the~~1, ~~lowest~~2014 ~~closing~~and ~~trading~~expired ~~prices~~February or14, an2016. ~~average~~The ofmonthly ~~trading~~rent ~~prices~~was of$4,585 for the ~~Company’s~~first ~~common~~thirteen ~~stock~~months atand ~~the~~$4,724 ~~close~~for ofthe ~~trading~~last ~~during~~twelve amonths. 5The tototal 20minimum ~~trading day period~~payments ~~prior~~over the ~~date~~life of the ~~notice~~lease ofwere ~~conversion~~$111,714. ~~For~~In ~~some~~February of2016, ~~these~~PIMD ~~notes~~entered ~~there~~into is a ~~prepayment~~new ~~charge~~36 ~~ranging~~month ~~from~~lease ~~125%~~for toa ~~150%~~distribution ~~of the~~facility ~~principal~~in ~~amount~~Pooler, ~~and~~Georgia. ~~accrued~~This ~~interest~~new ~~thereon~~lease ifbegins ~~the~~March ~~payment~~1, is2016 ~~made~~and ~~before~~expires aFebruary ~~set~~28, ~~period~~2019. ofThe ~~time.~~monthly Werent ~~did~~is ~~not~~$3,700 ~~incur~~for ~~any~~the ~~penalty~~first ~~costs~~twelve ~~during~~months, ~~2013~~$3,750 for ~~conversion~~the ofnext ~~12%~~twelve ~~variable~~months ~~notes~~and ~~payable~~$3,800 for the last twelve months.

~~Since these notes have a convertible~~In ~~feature~~connection with avarious ~~significant~~notes ~~discount~~payable ~~and~~that ~~could~~we ~~result~~have inentered ~~the~~into, ~~note~~we ~~principal~~are ~~being~~obligated ~~converted~~ to apay ~~variable number of~~ the ~~Company’s common~~holders ~~stock, the instrument includes an embedded derivative. The fair value~~ of ~~the~~these ~~derivative~~notes ~~associated~~royalty ~~with this note was determined by using the Black-Scholes pricing model with the following assumptions: no dividend yield~~fees, ~~expected volatility ranges used were~~ ~~between~~see ~~161.6%~~Note ~~to 187.~~9%, ~~risk-free~~for ~~interest~~details ~~rate~~concerning ~~ranges~~royalty ~~between~~fees ~~0.07% to 0.12%~~ and ~~expected life of 11 to 12 months~~payments. The fair value of the derivative at the date issued amounted to $407,104 and was revalued at December 31, 2013 to be $143,944. The debt discount associated with this derivative is being amortized over the life of the notes.

~~During~~On March ~~nine~~5, ~~month period ended September 30~~2015, ~~2014~~we ~~the~~entered ~~following~~into ~~activity~~two ~~occurred~~non-binding ~~relating~~letters ~~various notes in this category: No new borrowings occurred. The Company paid the sum~~ of ~~$57,089~~intent ~~to a holder of one of these notes~~ for the ~~principal~~acquisition of ~~$40,000.~~an ~~This~~equity ~~cash~~interest ~~payment~~in ofthird-party ~~$57~~pharmacies which,~~089~~ ~~included~~if ~~the~~acquired, ~~accrued interest~~will ~~and~~expand aour ~~prepayment~~activities ~~penalty~~into ~~charge.~~approximately ~~The~~forty ~~Company~~states, ~~extinguished~~most ~~the~~of ~~debt~~which ~~and~~are ~~the~~not ~~embedded~~currently ~~derivative~~serviced ~~which~~by ~~resulted in a gain~~Main onAvenue. ~~extinguishment~~In ofSeptember ~~$57~~2015,~~249.~~ Awe ~~lender~~notified ~~converted~~both ~~$25,000~~pharmacies of ~~principal~~cancellation ~~into 569,801 shares~~ of ~~our~~intent ~~common~~for ~~stock valued at $68,376. The Company extinguished~~ the ~~debt and the embedded derivative which resulted in a gain on extinguishment of $26,220~~acquisitions.

AsOn June ~~of September~~ 30, ~~2014 and December 31~~2015, ~~2013,~~our ~~the~~then ~~principal~~Chief ~~balance~~Executive ~~of these notes was $0 and $89~~Officer,~~025,~~ ~~respectively,~~President and ~~the unamortized debt discount was $0 and $40~~Secretary,~~795, respectively.~~ ~~The~~Robert ~~Company recorded interest expense for three and nine months periods ended September 30~~Schneiderman, ~~2014~~resigned ofall ~~$200~~positions ~~and~~he ~~$15,794,~~held ~~respectively.~~with ~~For the three and nine month periods ended September 30, 2013, the Company recorded interest expense of $2,670 and $25,660, respectively~~us. ~~The~~See ~~Company~~Note ~~would~~17 ~~have~~for ~~been~~details ~~required to issue 0 and 1,512,736 of common stock if the lenders converted~~ on ~~September~~ ~~30,~~settlement ~~2014 and December 31, 2013, respectively~~agreement. ~~The fair value of the derivative liability at September 30, 2014 and December 31, 2013, is $0 and $143,944 respectively.~~

See Note 17 for details concerning our Recapitalization/Repurchase plan for the Series A Convertible Preferred Stock.

14 – CONCENTRATIONS

During the three months ended March 31, 2015, and 2014, we purchased product from four suppliers. A disruption in the availability of raw materials from our suppliers could cause a possible loss of sales, which could affect operating results adversely.

For the three months ended March 31, 2015, no customer accounted for more than 10% of net revenues but two third-party payors account for approximately 78% of our net revenues. Should our contract be cancelled with these third-party payors it would have a significant impact on our future net revenues.

On March 4, 2015, CVS/Caremark notified Main Avenue that it was terminating the provider agreement with Main Avenue. No basis for the termination was provided. During the three months ended March 31, 2015, CVS/Caremark represented approximately 26% of our net revenues.

As of March 31, 2015 and December 31, 2014 we had two insurance third-party payors representing 87% of our accounts receivable.

15 – CONTINGENCIES

Ironridge

In November 2013, we entered into an agreement with Ironridge Global IV, Ltd. (“Ironridge”) whereby we issued 8,690,000 shares of our common stock to Ironridge in settlement for bona fide claims owed to our creditors (the “Claim Amount”). The shares issued to Ironridge were unrestricted securities and exempt from registration under Section 3(a)(10) of the Securities Act of 1933, as amended. Under the terms of the transaction, the number of shares issuable to Ironridge is subject to an adjustment based on the trading price of our common shares such that the value of the shares is sufficient to cover the Claim Amount, a 10% agent fee amount, and Ironridge’s reasonable legal fees and expenses which were determined to be $766,238.

~~12% One Year Term Loan~~SCRIPSAMERICA, INC.

~~To finance the purchase of MAvP,~~Notes Implex Corporation, borrowed $250,000 from a stockholder of the Company in 2014. This loan bears interest at the rate of 12% per annum, with 12 equal monthly installments of interest and principal payments of $22,214 beginning April 1, 2014 and matures on May 1, 2015. Additionally, the Company shall pay to ~~the~~condensed ~~lender~~consolidated afinancial ~~royalty~~statements ~~of $25 on the first 10,000 prescriptions processed by MAvP during the preceding month~~ (~~except that the first such payment shall include prescriptions processed since the initial closing on February 7, 2014~~Unaudited) and $8 for all prescriptions thereafter. The Company has recorded a royalty expense of $61,795 and $93,895for the three and nine month period ended September 30, 2014, respectively. The Company on Implex’s behalf, paid $121,269 in principal payments and recorded interest expense of $13,306. The balance as of September 30, 2014 is $128,731.

~~12%~~For the ~~One~~three ~~Year~~months ~~Term~~ended ~~Loan~~March –31, ~~Related Party~~2015

ToOn February ~~finance the purchase of MAVP~~10, ~~Implex~~ ~~borrowed $50~~2014,~~000~~ ~~from~~Ironridge ~~the~~made ~~wife~~a ofrequest ~~the Company’s Chief Executive Officer. This loan bears interest at the rate of 12% per annum~~for, ~~with 12 equal monthly installments of interest~~ and ~~principal~~we ~~payments of $4~~issued,~~412~~ ~~beginning~~an ~~April~~additional 1, ~~2014 and matures on May 1~~615,550 ~~2015.~~shares ~~Additionally,~~of ~~the~~our ~~Company~~common ~~shall~~stock ~~pay~~as ~~to the lender~~ a ~~royalty~~ result of ~~$5 on~~ the ~~first~~adjustment ~~10,000~~provisions ~~prescription~~contained ~~processed~~in ~~by MAVP during~~ the ~~preceding~~stipulation ~~month~~ (~~except that~~ the ~~first~~“Stipulation”) ~~such~~in ~~payment~~the ~~shall~~Court ~~include~~Order ~~prescriptions~~issued ~~processed~~by ~~since~~ the ~~initial closing~~California onState ~~February 7, 2014) and $2 for all prescription thereafter~~Court. ~~The~~We ~~Company~~expensed ~~has~~these ~~recorded~~additional ashares ~~royalty~~in ~~expense~~December ~~of $12~~2013,~~335~~ ~~and~~valued at $18210,~~775 for~~022, ~~the three~~ and ~~nine~~on ~~month~~February ~~periods ended September 30~~22, 2014. ~~The~~we ~~Company~~issued ~~on Implex’s behalf paid $24~~1,~~254 in principal payments~~615,550 ~~and~~share ~~recorded interest expense~~ of ~~$2,658~~our ~~and~~common ~~the~~stock ~~balance~~to ~~as of September 30, 2014 is $25,746~~Ironridge.

~~24%~~On April ~~One~~4, ~~Year~~2014, ~~Term~~Ironridge ~~Loan~~requested an additional 1,646,008 common shares. We declined to issue these additional shares because Ironridge had already received approximately 10,305,550 common shares with a market value of approximately $1,300,000 in satisfaction of $766,238.

On May 196, 2014, ~~MAVP~~Ironridge ~~borrowed $250,000~~submitted ~~from~~an aex ~~stockholder~~parte ofapplication to the ~~Company~~California inState ~~order~~Court to ~~provide~~compel ~~funding~~the ~~for~~issuance ~~inventory and payment~~ of ~~commission expenses. This loan bears interest at~~ the ~~rate of 24% per annum, interest payments are due monthly beginning July~~ 1,646,008 common ~~2014~~shares, and the ~~principal~~California ~~payment is~~State ~~due~~Court atentered ~~the~~an ~~maturity~~order ~~date~~compelling ofus ~~May~~to ~~18,~~issue ~~2015,~~the ~~along~~additional ~~with any outstanding interest payments~~shares. ~~Additionally,~~The ~~the~~order ~~Company~~also ~~shall pay~~prohibits tous ~~the~~from ~~lender~~issuing aor ~~royalty~~transferring ofnew $2shares ~~for~~to ~~each~~third ~~prescription~~parties ~~processed~~before byissuing ~~MAVP~~these ~~upon~~shares. ~~the~~We ~~commencement~~appealed of the $8court's decision.00 ~~royalty under~~ On the ~~investment contract~~same ~~dated January 17~~day, ~~2014,~~we ~~with~~filed ~~Implex.~~a ~~The~~notice ~~balance as~~ of ~~September~~appeal ~~30,~~with ~~2014~~the isCalifornia ~~$250,000.~~State NoCourt’s ~~royalty~~order ~~has~~which ~~been~~automatically ~~paid~~stayed ~~since~~the Court’s ~~this~~order. ~~royalty~~The ~~clause~~matter ~~does~~is ~~not require payment until prior notes are paid in full~~pending.

~~24%~~We accrued ~~One~~the ~~Year~~potential ~~Term~~issuance ~~Loan~~of –the ~~Related~~shares to Ironridge during the year ended December 31, 2014 and have recorded ~~Party~~$164,655. In October 2015, to stop a contempt action, we requested the 1,646,008 shares be issued and such shares were ultimately issued on January 22, 2016. the shares were not accepted by Ironridge until March 17, 2016.

OnWe pursued ~~May~~an 19appeal, ~~2014,~~and ~~MAVP borrowed $75~~reversal,~~000~~ ~~from the wife~~ of the ~~Company’s~~California ~~Chief~~State ~~Executive~~Court ~~Officer in~~ order ~~to provide funding for inventory~~ and ~~payment of commission expenses. This loan bears interest at the rate of 24% per annum, interest payments~~ are ~~due~~in ~~monthly~~litigation ~~beginning~~in ~~July~~California ~~1, 2014,~~ and ~~the~~ ~~principal~~New ~~payment~~Jersey. isOn ~~due at the maturity date of May 18~~October 29, 2015, ~~along~~Ironridge ~~with~~in ~~any outstanding interest payments. Additionally~~California, ~~the Company~~requested ~~shall pay to~~ the ~~lender~~issuance ~~a royalty~~ of $2an ~~for~~additional ~~each prescription processed by MAVP upon the commencement of the $8.00 royalty under the investment contract dated January 17~~87, ~~2014~~000, ~~with Implex. The balance as of September 30, 2014 is $75,~~000. Noshares ~~royalty has~~under ~~been~~the ~~paid~~formula ~~since~~set ~~this~~forth ~~royalty clause is not effective until prior notes are paid~~ in ~~full~~the Stipulation.

~~QuarterSpot~~In New ~~Term~~Jersey, ~~Loan~~Ironridge brought an action against Olde Monmouth, our transfer agent, to force it to issue shares or pay damages resulting from their refusal to issue the shares requested by Ironridge. We intervened and contested jurisdiction in New Jersey.

OnIn January ~~March 17~~2016, ~~2014,~~we were ordered by the ~~Company received~~Federal ~~$92,000~~Court in ~~cash~~California to pay for anIronridge’s ~~8.9%~~legal ~~note~~fees ~~payable~~and ~~with~~on aFebruary ~~principal~~22, 2016 we paid this legal fee in the amount of $~~100~~269,~~000,~~365. ~~and~~The ~~incurred~~Court ~~fees~~instructed ~~totaling~~both ~~$8,000~~parties ~~which~~to work out a mutually agreeable settlement. ~~were~~We ~~paid~~believe ~~directly~~that towe ~~third~~have ~~parties~~a ~~for~~valid ~~legal~~defense ~~and~~to ~~broker~~the ~~fees.~~issuance ~~Beginning~~of ~~March~~the 1987,000,000 ~~2014~~shares ~~daily~~sought ~~payments~~by ofIronridge ~~$520.83~~based ~~began~~upon ~~and~~usury ~~will~~laws and ~~continue~~also ~~until~~violations ~~this~~of ~~loan~~the isCalifornia ~~paid~~business incode ~~full~~for onunconscionable oractions ~~about~~since ~~December~~Ironridge 17paid $766,238 ~~2014. As~~ of ~~September~~debt ~~30,~~obligations ~~2014,~~and received ~~the~~a ~~principal~~return ~~balance~~of isapproximately $281,~~648 and~~300,000. ~~the~~Due ~~Company~~to ~~recorded~~expensive ~~interest~~costs ~~expense~~and ~~for~~uncertainty ~~the~~in ~~three~~litigation ~~and~~we ~~nine~~believe ~~months~~it ~~period~~is ~~ended~~in ~~September~~the ~~30,~~best interest ~~2014~~ of ~~$2,897~~the ~~and~~Company ~~$9,456,~~to ~~respectively~~settle the matter.

13In February –2016, ~~DERIVATIVE~~we ~~FINANCIAL~~proposed the following settlement agreement to Ironridge to fully resolve all litigation and any and ~~INSTRUMENTS~~all claims, causes of action or potential causes of action between the parties, principals, affiliates and ScripsAmerica’s transfer agent, Olde Monmouth Transfer Company:

~~Derivative liabilities consist of~~1. ~~convertible~~ScripsAmerica ~~notes~~will ~~with~~make ~~features that could result in the note principal being converted to~~ a ~~variable~~$400,000 ~~number~~payment ofat the ~~Company’s common~~time ~~shares. The fair value of~~ the ~~embedded~~settlement ~~derivative~~agreement ~~associated~~is ~~with~~fully ~~these~~executed ~~notes~~and ~~was~~all ~~determined~~cases byare ~~using the Black- Scholes~~dismissed ~~pricing~~that ~~model~~were ~~with~~brought ~~the following assumptions:~~by Ironridge.

As of :	September 30, 2014		June 30, 2014		March 31, 2014		December 31, 2013
Volatility		135.00%		133.60%		132.9% -98.9%		110.4% - 28.5%
Expected life (in years)		0		0.11		0.4 – 0.9		0.03 – 0.6
Risk-free interest rate		0.10%		0.10%		0.10% - 0.13%		0.07% -0.12%
Dividend yield		0.00%		0.00%		0.00%		0.00%

2. ScripsAmerica will issue a non-interest bearing note to Ironridge in the amount of $1 million to be paid over a ten month period in installments of $100,000 per month starting the month after settlement agreement and lawsuits brought by Ironridge are dismissed. This payment is in lieu of any shares to be issued to Ironridge.

3. The parties will dismiss all pending litigation with prejudice, including the Los Angeles Superior Court action, the Los Angeles federal court action, the New Jersey action and the New York action. Ironridge would release any and all claims to the LNK funding ($160,000).

4. The parties shall execute general releases in favor of each other and their respective officers, directors, affiliates and related parties excluding only ScripsAmerica’s obligation to pay the note specified in paragraph 2, above.

Ironridge notified our attorney of acceptance of this settlement but subsequent to signing of the final agreement Ironridge’s principal reneged on the acceptance. We plan to purse enforcement of the settlement and our attorneys are preparing a motion to enforce settlement terms. We recorded an expense of $1,400,000 to the condensed consolidated statement of operations for the three months ended March 31, 2015 for the expected settlement amount.

~~Activity during the current~~SCRIPSAMERICA, ~~period is as follows:~~INC.

Derivative liabilities at December 31, 2013	$	1,133,393
New derivative liabilities issued in first quarter 2014		–
Extinguishment		(1,318,853	)
Revalue at reporting period		512,790
Derivative liabilities at March 31, 2014	$	327,330
New derivative liabilities issued in second quarter 2014		–
Extinguishment	$	(310,791	)
Revalue at reporting period	$	(879	)
Derivative liabilities at June 30, 2014	$	15,660
Extinguishment	$	(15,660	)
Revalue at reporting period	$	(0	)
Derivative liabilities at September 30, 2014

Notes to condensed consolidated financial statements (Unaudited)

14For the ~~– EQUITY~~three ~~(DEFICIT)~~months ended March 31, 2015

~~General~~Pharmanostics

~~The~~On December ~~Company~~29, is2015, ~~authorized~~Pharmanostics toGroup, ~~issue 10~~LLC,~~000~~ (“Pharmanostics”),~~000~~ ~~preferred~~a ~~shares~~Florida ~~with~~limited liability company, filed a ~~par~~civil lawsuit ~~value~~in Broward County Florida seeking payment from us of $~~.001~~1,835,712 ~~per~~for ~~share.~~billing ~~The~~services ~~preferred~~it ~~stock~~alleges it provided during 2014 and first two months of 2015. In January 2016, we filed a motion to move the ~~Company~~suit ~~shall~~to beFederal ~~issued~~Court byfrom Florida and the ~~board~~motion ofwas ~~directors~~granted. ofIn ~~the~~February ~~Company~~2016, inwe ~~one~~filed ora ~~more~~counter ~~classes~~suit orfor ~~one~~damages orcaused ~~more~~by ~~series~~Pharmanostics’ ~~within~~poor ~~any~~business ~~class~~practices. In March 2016, due to expensive costs and ~~such~~uncertainty ~~classes~~in orlitigation ~~series~~we ~~shall~~believe ~~have~~it is in the best interest of the Company to settle ~~such~~the ~~voting~~matter ~~powers,~~with ~~full~~Pharmanostics. orOn ~~limited~~March 10, or2016, nowe ~~voting~~paid ~~powers,~~the ~~and~~owner ~~such~~of ~~designations,~~Pharmanostics ~~preferences~~$287,500 ~~limitations~~in orcash ~~restrictions~~and asthus ~~the~~accrued and recorded ~~board~~an expense of ~~directors~~$287,500 ofto the ~~Company~~condensed ~~may~~consolidated ~~determine,~~statement ~~from~~of ~~time~~operations tofor ~~time~~the asthree amonths ~~class~~ended orMarch ~~series~~31, ~~is issued~~2015.

~~The Company is authorized to issue~~16 ~~250,000,000~~– ~~common~~RELATED ~~shares~~PARTY with a par value of $.001 per share. Each share is entitled to cast one vote for each share held at all stockholders’ meetings for all purposes, including the election of directors. The common stock does not have cumulative voting rights.TRANSACTIONS

~~On March 26, 2014 the Board adopted~~During ~~a resolution to amend~~ the ~~Certificate~~three ofmonths ~~Incorporation~~ended ofMarch ~~the~~31, ~~Company~~2015, toand ~~change~~2014 the ~~capital structure of the corporation by increasing the authorized shares of common stock of the~~ Company ~~from~~paid ~~150~~$32,~~000,000~~500 toand ~~250~~$30,~~000~~950,~~000.~~ ~~On April 16~~respectively, ~~2014,~~in ~~the~~consulting ~~increase~~fees into ~~the~~a ~~authorized~~consulting ~~shares~~firm ofowned ~~common stock was approved~~ by the ~~written consent of shareholders holding a majority of the voting power of the~~ Company’s ~~outstanding~~ ~~capital~~former ~~stock (“Shareholder Consent”)~~CEO. ~~On June 2, 2014, the Company filed its Certificate of Amendment to the Certificate of Incorporation to effect the increase in the number of shares authorized common stock.~~

OnDuring the three months ended March 2631, 2015 and 2014, the Company~~’s board~~ ofalso ~~directors~~paid ~~approved~~$49,500 ~~the~~and ~~ScripsAmerica~~$44, ~~Inc.~~050, ~~Incentive Stock Plan (“SOP”). On April 16~~respectively, ~~2014,~~in ~~the~~consulting ~~SOP~~fees ~~was approved~~to bya ~~the~~consulting ~~written~~firm ~~consent~~owned ofby the Company’s ~~shareholders.~~Chief ~~The~~Financial ~~SOP was designed to serve as incentive for retaining qualified and competent employees, officers and directors, and certain consultants and advisors~~Officer. ~~There are 6,000,000 shares authorized for issuance under the SOP.~~

The Company ~~purchase~~has ~~price~~entered ~~per~~into ~~share~~transactions ~~of a~~with ~~Common~~Mr. ~~Stock~~Adam ~~option~~Brosius, ~~under~~our ~~the~~interim ~~SOP~~president ~~plan~~as ~~shall~~of ~~not~~July be1, ~~less~~2015 ~~than~~and ~~100~~our ~~percent~~newly approved ofpresident ~~the~~as ~~fair~~of ~~market~~November ~~value~~13, at2015. ~~the~~Mr. ~~time~~Brosius ~~the~~is ~~options~~also ~~are granted.~~owner ~~The~~of ~~purchase~~Black ~~price~~Cat ~~per~~Consulting ~~share~~and ofPharma ~~Common~~Sales ~~Stock~~Group, privately ~~option~~held ~~under~~companies ~~the~~that ~~SOP~~provide ~~plan~~marketing toconsulting aand ~~person~~business ~~who~~services ~~owns~~to ~~more~~Main ~~than~~Avenue 10Pharmacy. ~~percent~~During of the three ~~voting~~months ~~power~~ended ofMarch ~~the~~31, ~~Corporation's~~2015, ~~voting~~we ~~stock~~paid ~~shall~~Black ~~not~~Cat beConsulting ~~less~~$52,000 ~~than~~in ~~110~~cash, ~~percent~~paid ofPharma ~~the~~Sales ~~fair~~Group ~~market~~in ~~value~~cash of$710,738 ~~such~~and accrued ~~shares~~$1,925,922 atfor ~~the time~~consulting ~~the~~and ~~options~~commission ~~are~~fees ~~granted.~~to ~~The~~be ~~total~~paid ~~value~~to ofmarketers ~~options~~by ~~granted,~~Pharma ~~under~~Sales ~~the~~Group ~~SOP~~on our behalf. As our President, toMr. ~~any~~Brosius ~~one~~receives ~~person~~$8,000 ~~shall~~per ~~not~~month ~~exceed~~and ~~any~~a ~~limit imposed~~travel byallowance ~~Section~~of ~~422~~$1,000 orper ~~the~~month. ~~rules~~We ~~and~~also ~~regulations~~reimbursed ~~promulgated~~Mr. byBrosius for ~~the~~various ~~Internal~~purchases ~~Revenue~~of ~~Service~~inventory ~~thereunder.~~and ~~Currently,~~supplies ~~the~~using ~~limitation is~~his ~~One~~personal ~~Hundred~~credit ~~Thousand~~card ~~Dollars~~since ~~($100,000)~~our incredit ~~value~~line inwas ~~any~~not ~~one~~large ~~corporate~~enough ~~fiscal~~to support ~~year~~business activities required.

AsSee Note of9 ~~September~~for ~~30,~~related ~~2014,~~party nodebt ~~options have~~and ~~been~~royalties ~~issued~~paid ~~under~~to ~~the~~a ~~SOP~~related party.

~~Issuances~~See Note ~~during~~17 ~~2014~~for the repurchase of the Series A Convertible Preferred stock in February 2016.

~~During the nine months period ended September~~17 ~~30,~~– ~~2014,~~SUBSEQUENT ~~the Company issued 27,299,202 restricted shares of common stock for cash proceeds of $1,549,619 in various private subscription agreements. Subscription price is issued in a range from $0.05 to $.0633~~EVENTS

~~During~~From April ~~the~~1, ~~nine~~2015 ~~months~~to ~~period~~date ~~ended September~~of ~~30,~~this ~~2014~~filing, ~~the~~we ~~Company~~ issued 4425,~~427,614~~000 ~~restricted~~ shares of ~~its~~our common stock to ~~non-employees~~members ~~for~~of ~~services~~the ~~rendered~~Board ~~during 2014.~~of ~~These~~Directors and employees for services rendered which were valued at $~~533~~38,~~967 and the Company charged its operations in 2014~~210.

On June 30, 2015, our then Chief Executive Officer, President and Secretary, Robert Schneiderman, resigned all positions he held with us. Upon the acceptance of Mr. Schneiderman’s resignation on June 30, 2015, Brian Ettinger, the Chairman of our Board of Directors became our Chief Executive Officer and Chairman of our Board of Directors and Adam Brosius became our President.

On June 30, 2015, we entered into an agreement with Mr. Schneiderman, our then Chief Executive Officer, President and Secretary that provides for the following terms:

We agreed to pay to Mr. Schneiderman, a severance of $144,000 in semi-monthly installments of $6,000, commencing in July 2015 until paid. In August 2015 these payments were suspended and we are currently in default.

Mr. Schneiderman will meet with our new management, as may be requested, at any mutually convenient time during regular business hours until the close of business on June 30, 2016 and provide such factual background information, documents, files, e-mails, computer files, etc. as may be requested by us.

We are obligated to repay two loans in the aggregate amount of $212,669 which mature in January 2016, each bearing simple interest at the rate of 12% per annum. We are required to make monthly payments of interest and pay the principal on the maturity date.

We would pay Andrea Schneiderman, the spouse of our Chief Executive officer, for loans made to Wholesale Rx of $19,214 which we paid on July 13, 2015.

We shall pay the credit card, also issued on the credit of and in the name of Mr. Schneiderman, which has been used by Main Avenue and which has an over-limit balance of $59,614. We are required to pay $59,614 of the total outstanding balance. As of the date of this Form 10-Q, these balances have not been paid.

~~During the nine months period ended September 30~~SCRIPSAMERICA, ~~2014, the Company issued 88,000 restricted shares of its common stock in connection with payments provided to members~~ ~~of the board of directors during 2014~~INC. ~~The Company charged its operations $9,440 in 2014.~~

~~During the nine months period ended~~Notes ~~September 30, 2014, the Company issued 1,740,550 restricted shares of its common stock in connection with financing costs during 2014. The Company charged~~ to ~~financing~~condensed ~~cost~~consolidated infinancial ~~the~~statements ~~statement of operations $224,021 in 2014.~~(Unaudited)

~~Pursuant to its the settlement agreement~~For ~~with GEM Global Yield Fund Limited (as described below), (a)~~ the ~~Company~~three ~~sold~~months ~~887,280~~ended ~~shares~~March ~~of its common stock to GEM for a purchase price of $125~~31,~~381,~~ and (b) GEM concurrently assigned to Steve Urbanski the right to receive the 887,280 shares of the Company's common stock upon the receipt by the Company of the purchase price (net of $15,211 which was paid to GEM's legal counsel). The Company issued the 887,280 shares to Mr. Urbanski on January 22, 2014.2015

~~During~~· ~~the~~Until ~~nine~~December ~~months~~31, ~~period~~2015, ~~ended September~~Mr. ~~30,~~Schneiderman ~~2014,~~may ~~the~~sell ~~Company~~up ~~issued~~to ~~756~~100,~~400~~000 ~~restricted~~ shares of ~~its~~our common stock per week, and may accumulate any unsold amount from week to ~~non-employees~~week for ~~payment~~a maximum of ~~stock~~ten toweeks ~~be issued~~or ~~for~~a ~~cash~~total ~~received~~of in1,000,000 ~~2013~~shares.

~~During~~· ~~the~~For a period of nine months ~~period~~after ~~ended September~~his 30termination, ~~2014,~~Mr. ~~the~~Schneiderman ~~Company~~may ~~issued~~sell ~~921,203~~up ~~restricted~~to 150,000 shares ofeach ~~its~~week, ~~common~~and ~~stock~~may accumulate any unsold amount from week to ~~non-employees~~week for ~~payment~~a maximum of ~~royalties. The~~ten ~~payment~~weeks ofor ~~royalties~~an ~~was~~aggregate ~~valued~~of ~~at $106~~1,~~782~~500,000 shares.

~~During~~· Upon the ~~nine~~sale ~~months~~of ~~period~~all ~~ended September~~or ~~30,~~any ~~2014,~~part of the ~~Company~~accumulated ~~issued~~share 9total,~~009,937~~ ~~shares~~Mr. ofSchneiderman ~~its~~may ~~common~~either ~~stock~~sell ~~for~~up ~~the~~to ~~conversion of approximately $623~~150,~~446~~000 ofshares ~~principal of~~and/or ~~our~~accumulate ~~convertible~~the ~~notes~~difference ~~payable.~~between ~~These~~the ~~shares~~amount ~~have~~sold aand ~~fair~~the ~~value~~150,000 ofshare ~~$1,249,287~~cap.

On· ~~April 21, 2014, 250,000 common stock shares were returned to the Company by Sean R~~Mr. ~~Fitzgibbons~~Schneiderman ~~and~~shall ~~were~~place ~~cancelled~~sell byorders ~~the~~of ~~Company.~~his ~~These~~ shares ~~were~~at ~~issued~~a ~~in 2013~~price, ~~and~~of ~~were~~not ~~valued~~less atthan ~~$32,500.~~one-half ~~The~~of ~~Company reversed~~ the ~~expense~~difference ~~that~~between ~~was recorded to~~ the ~~statement~~highest ofbid ~~operation in 2013~~ and the ~~second~~ ~~quarter~~lowest ~~of 2014~~offer.

~~Cancellation~~· OfAfter ~~Gem~~such ~~Agreement~~nine month period, there shall be no further volume restriction, but for a further period of three months all sell orders shall be placed at a price, at the time of placing such order, of no less than one-half of the difference between the highest bid and the lowest offer.

On· ~~October~~Private ~~11,~~transactions ~~2013,~~are ~~the~~not ~~Company entered~~limited into a financing agreement with GEM Global Yield Fund Limited ("GEM Global") and a related party to provide funding to the Company of up to $2 million. Under the terms of the financing agreement, the Company may sell restricted shares of its common stock to GEM Global, subject to the satisfaction of certain conditions, at a purchase price to be negotiated between the Company and GEM Global pursuant to section 4(a)(2) and/or ~~rule~~affected ~~506~~by ~~of Regulation D. The Registrant was expecting to use~~ the ~~capital~~dribble ~~raised from~~out ~~the~~provisions ~~financing~~applicable ~~agreement primarily~~ to ~~fund~~his ~~the~~public ~~manufacturing and marketing of its RapiMed® children's pain reliever domestically and internationally, as well as for working capital~~sales. ~~As of November 14, 2013 there were no shares issued for funding.~~

On April ~~January 14~~10, ~~2014~~2015, ~~the~~we ~~Company entered~~formed ~~into~~ a ~~settlement~~wholly ~~agreement~~owned ~~with GEM Global~~subsidiary, ~~590~~known ~~Partners,~~as ~~LLC and the GEM Group~~DispenseDoc, ~~pursuant~~Inc. toin ~~which, among other things,~~ the ~~parties~~state ~~agreed to declare null and void and~~ of noa ~~further~~Delaware to ~~effect the financing agreement entered into on October 11, 2013 as~~provide ~~well~~services asfor ~~any~~our ~~other~~new ~~negotiated~~pharmacy ~~but~~dispensing ~~unsigned~~program ~~documents~~with ~~between~~individual ~~and/or among the parties~~doctors. InOn ~~addition,~~February ~~in connection with such voiding~~22, ~~the~~ ~~GEM Warrants were cancelled and the Company issued to each of GEM Global and 590 Partners~~2016, ~~LLC~~we ~~(i)~~entered ainto ~~warrant~~an ~~exercisable~~agreement to ~~purchase~~sell ~~1,000,000~~DispenseDoc ~~shares of common stock at an exercise price of $0.41, (ii) a warrant exercisable~~ to ~~purchase~~Bread ~~750,000 shares of common stock at an exercise price of $0.55~~ and ~~(iii)~~Circuses ~~a warrant exercisable to purchase 750~~Media,~~000~~ ~~shares~~Inc. offor ~~common stock at an exercise price of~~ $~~0.75 (collectively~~26,520 ~~the~~plus ~~“New~~royalty ~~GEM~~payments ~~Warrants”). All~~ of ~~the~~1% New GEM Warrants expire on January 14, 2019 and are only exercisable on a cash basis (they do not contain any cashless exercise provisions). Additionally, the Company granted registration rights to 590 Partners and GEM Global to register the resale of the ~~shares~~amount ~~underlying the New GEM Warrants. Additionally, in the event that the closing price~~ of the ~~Company’s~~adjudicated ~~common stock is equal to or greater than 160% of the exercise price~~value of the ~~applicable~~monthly ~~New~~sales ~~GEM~~made ~~Warrant~~through ~~for 22 consecutive trading days, then such New GEM Warrant will automatically be cancelled 30 days after~~ the ~~Company~~DispenseDoc ~~delivers~~system ~~notice~~by ofeach ~~such~~DispenseDoc ~~cancellation~~until toMarch ~~GEM Global and 590 Partners. However~~20, ~~each of GEM Global and 590 Partners may exercise their New GEM Warrant in full after the notice from the Company but prior to the cancellation date~~2017.

~~The~~On July ~~fair~~21, ~~value~~2015, ofwe ~~these~~formed ~~5.0~~a ~~million warrants~~wholly onowned ~~January 14~~subsidiary, ~~2014,~~known ~~was~~as ~~$552~~Pharmacy Administration,~~318~~ ~~using~~Inc. ~~the~~in ~~Black-Sholes model with~~ the ~~following~~state ~~assumptions:~~of Delaware to ~~Volatility~~provide ~~182.9%,~~billing 5and ~~year life,~~administrative ~~risk~~services ~~free~~to ~~rate~~other ofindependent 1pharmacies.~~65%~~ ~~and~~As ~~zero~~of ~~dividend~~the ~~rate.~~date ~~This~~of ~~fair~~this ~~value~~Form of10-Q ~~$552,318~~we ~~has~~have ~~been~~not ~~expensed~~generated any insignificant ~~our~~sales ~~first~~from ~~quarter~~this ~~earnings in 2014~~subsidiary.

~~Pursuant to its the settlement agreement~~In ~~with~~November ~~GEM~~2015, ~~(a)~~WholesaleRx’s ~~the~~management ~~Company~~proposed ~~sold~~a ~~887,280~~settlement ~~shares of its common stock~~ to ~~GEM~~pay-off ~~for~~the areceivable ~~purchase~~balance ~~price~~ of $~~125~~143,~~381~~569, ~~and~~which ~~(b)~~was ~~GEM concurrently~~written ~~assigned~~off toin ~~Steve Urbanski the right to receive the 887~~2014,~~280~~ ~~shares~~and ofa ~~the~~tentative ~~Company's~~agreement ~~common~~obligates ~~stock~~WholesaleRx ~~upon~~to ~~the~~pay ~~receipt~~us ~~by the Company of the purchase price (net of~~ $156,~~211~~000 ~~which~~monthly ~~was~~until ~~paid~~the toreceivable ~~GEM's~~amount ~~legal~~is ~~counsel)~~paid. ~~The Company issued the 887~~To date,~~280~~ ~~shares~~we tohave ~~Mr.~~received ~~Urbanski on~~an ~~January~~aggregate ~~22,~~of ~~2014~~$18,000.

On January 5, 2016, the Company and Triumph entered into amendment no. 1 to the revolving line of credit facility. The amendment was entered into to waive all events of default as a result of the financial covenant violations as described in Note 9 for the period December 31, 2014 through September 30, 2015. The amendment also amended the defined terms of the financial covenants beginning with the three months period ended December 31, 2015. The Company was required to pay a $15,000 modification fee in connection with the amendment.

On February 22, 2016, our Board of Directors authorized the repurchase of the Series A Convertible Preferred Stock (“Preferred Stock”) from Development 72 LLC., a related party, for a price of $1,439,340, which covers the original purchase price, accrued but unpaid dividends, and deemed interest rate of 8% per annum (“Recapitalization Plan Agreement”). This Recapitalization Plan Agreement is to be effective retroactively to February 1, 2016. The Company will make 24 payments of $65,097 for the repurchase of all 2,990,552 shares of the Series A Convertible Preferred Stock. Upon making of the first installment payment the Preferred Stock shall be deemed to occur and the shareholder shall deliver the stock certificate(s) representing such 2,990,252 shares promptly following such initial payment and the Company shall cancel such shares and then, (i) in accordance with the provision in Section 160 of the Delaware General Corporation Act, and (ii) in accordance with the provisions of the Series A Convertible Preferred Stock, shall take all steps necessary to retire such shares as provided in Sections 243 and 244 of the Delaware General Corporation Act. Simultaneously, the capital applicable to the Preferred Stock ($1,043,000) shall be reduced to the full extent thereof, which sum shall be a liability to shareholder.

On March 25, 2016, Pharmacy Administration, Inc. (“Manager”) entered into a Membership Participation Agreement (“Agreement”) with the member owners of Lake Side Pharmacy, LLC, (“LSP members”) an Alabama limited liability company. Lake Side Pharmacy, LLC engages in operations of a non-sterile compounding pharmacy.

Per the Agreement for the aggregate sum of $740,000, Manager shall purchase from the LSP members 49% of their Class One voting units, for the total amount of $453,250. Manager shall also loan to each LSP member various amounts for an aggregate sum of $286,750 with a maturity date of March 1, 2018. The purchase of 49% of units of LSP members and the loans will entitle Manager a portion of the distribution fees earned by Lake Side Pharmacy, LLC and a management fee.

Warrants

Summary of our warrants activity and related information as of September 30, 2014:

	Number of shares under warrants		Weighted Average Exercise price		Weighted Average Remaining Contractual term in Years		Aggregate Intrinsic Value
Outstanding at December 31, 2013		228,572	$	0.39		3.1	$	–
Granted		5,000,000	$	0.55		4.5	$	–
Exercised		–
Cancelled/expired		–
Outstanding at September 30, 2014		5,228,572	$	0.14		4.2	$	–
Vested and exercisable at September 30, 2014		5,228,572
		2014
Option fair value		$0.11
Risk-free interest rate		1.65%
Volatility		183%
Terms in years		5
Dividend yield		0%

Options

On March 27, 2014, the Company issued 75,000 options to members of the Board of directors for services provided. These options vested immediately and will expire 3 years from date of issuance. The option price is $.099 and the fair value of these warrants is $3,971 which was expensed to selling, general and administrative.

On April 25, 2014, Company issued 50,000 options to members of the Board of directors for services provided. These options vested immediately and will expire 3 years from date of issuance. The option price is $.121 and the fair value of these options is $4,841 which was expensed to selling, general and administrative in the second quarter of 2014.

On April 25, 2014, the Company issued 5,010,000 employee options which have an excise price of $0.118, are exercisable immediately and expire on April 25, 2017. The Company’s Chief Executive officer received 2,510,000 options and the Chief Financial Officer received 2,500,000. The fair value of these options are $437,620 and were expensed in our second quarter of 2014. The fair value was determined by using the Black-Scholes pricing model with the following assumptions: no dividend yield, expected volatility of 181.27% risk-free interest rate of .88% and an expected life of three years.

On June 23, 2014, the Company issued 250,000 employee options to an employee for services. These options have an excise price of $0.143, are exercisable immediately and expire on June 23, 2017, with a fair value of these options is $28,296 and were expensed to selling, general and administrative expenses in the second quarter of 2014.

On July 21, 2014, Company issued 50,000 options to members of the Board of directors for services provided. These options vested immediately and will expire 3 years from date of issuance. The option price is $.132 and the fair value of these options is $4,161 which was expensed to selling, general and administrative in the third quarter of 2014.

Summary of options activity and related information as of September 30, 2014

	Number of shares under warrants		Weighted Average Exercise price		Weighted Average Remaining Contractual term in Years		Aggregate Intrinsic Value
Outstanding at December 31, 2013		5,015,000	$	0.16		2.3	$	–
Granted		5,435,000	$	0.12		2.6		–
Exercised		–
Cancelled/expired		–
Outstanding at September 30, 2014		10,450,000	$	0.14		2.3	$	–
Vested and exercisable at September 30, 2014		10,450,000
	2014		2013
Option fair value		$0.079 - $.113		$ 0.10 - $ 0.19
Risk-free interest rate		.82 - .88%		.34% - .78%
Volatility		177 - 183%		186% - 195%
Terms in years		3		3
Dividend yield		0%		0%

15 – COMMITMENTS

The holders of a $250,000 convertible note which was converted into 2,000,000 shares of our common stock on March 12, 2012 are entitled to a 4% royalty from the sales of our orally disintegrating rapidly dissolving 80mg and 160mg pain relief tablets. The royalty payments associated with this agreement have no minimum guarantee amounts and royalty payments will end only if the product line of Acetaminophen rapidly dissolving 80mg and 160mg tablets is sold to a third party. There have been no shipments through September 30, 2014 applicable to this royalty payment.

The holder of a $320,000 note payable are entitled to a to 1.8% royalty payment on the first $10 million of sales of a generic prescription drug under distribution contracts with Federal government agencies and 0.09% on the next $15 million of such sales. Payments for royalties will be paid quarterly. During fiscal year 2013 the Company issued the holder of this note 1,114,672 shares of its common stock for payment of royalty expense. In addition, a holder of a $50,000 note payable, a related party, is entitled to a 0.9% on the first $25 million of sales of a generic prescription drug under distribution contracts with Federal government agencies. During the nine months ended September 30, 2014, the Company also made cash payments for royalty expense associated with one of the notes in the amount of $175,572 and issued 757,776 shares of its common stock which have a fair value of $87,819 for payment of royalty expense and recorded a royalty expense of $263,391 to the statement of operation for the nine months period ended September 30, 2014. For the nine months ended September 30, 2013 the Company issued 513,834 shares of common stock as payment for the royalty expense and the Company recorded an expense of $213,945.

On October 15, 2013, our Board of Directors approved a revised compensation plan for our CEO, Robert Schneiderman and our CFO, Jeffrey Andrews, contingent on the Company raising $4 million via equity, debt, or a combination of both. Contingent on raising the $4 million, compensation would be as follows: CEO annual salary - $200,000, CFO annual salary - $192,000, and both would receive 50,000 options quarterly at 120% of the market price on the date granted with a one year vesting period. As of August 13, 2014, the $4 million raise has not been reached and consequently these conditions are not effective.

Operating Lease - We entered into two long-term lease for rented space. In April 2014, MAVP entered into a 36 month operating lease for store/production facility in Clifton, NJ. The lease expires on March 31, 2016, the monthly rent is $2,231.67 for the first 12 months with a 3% increase in year 2 and another 3% increase in year 3, for a total minimum payments over the life of the lease of $82,774. In October 2014, MAVP also leased additional space for a monthly rental fee of $1,000 per month, this lease expires September 30, 2015. In November, 2013 PIMD entered into a 25 month operating lease for a distribution facility in Doral, Florida. The lease begins January 1, 2014 and expires January 31, 2016, monthly rent is $4,585 for the first thirteen months and $4,724 for the last twelve months. Payments did not begin until April 2014, the total minimum payments over the life of the lease is $111,714

As of September 30, 2014, future minimum lease rental payments are as follows:

2014	$	25,684
2015	$	92,654
2016	$	42,376
2017	$	7,103
Total	$	167,817

16 – PURCHASE ORDER FINANCING WITH RELATED PARTY

In June 2012, the Company entered into a purchase order finance agreement with Development 72, a major stockholder of the Company which is controlled by a member of the Board of Directors. The agreement will allow the Company to borrow up to $1.2 million on a case by case basis, at an interest rate of 0.6% per 10 day period, 1.8% monthly and 21.6% annually. During the nine months period ended September 30, 2014 and 2013, the Company financed $9,244,000 and $3,218,129, respectively of its purchase orders and incurred an interest expense of $83,040 and $81,016, respectively. As of September 30, 2014 and December 31, 2013, the unpaid purchase order finance balance was $1,020,096 and $906,448 respectively, and accrued fees and interest are $12,096 and $21,249, respectively.

17 – CONCENTRATIONS

During the nine month period ended September 30, 2014, the Company purchased product from four suppliers, and in 2013 from two suppliers. A disruption in the availability of raw materials from the Company’s suppliers could cause a possible loss of sales, which could affect operating results adversely.

For the three and nine months period ended September 30, 2014, no customer accounted for more than 10% of revenue. For the three month period ended September 30, 2013, the Company derived approximately $73,000 or 100% of its revenue from two customers. For the nine month period ended September 30, 2013, the Company derived revenue from two customers with one customer accounting for 97% of the revenue.

As of September 30, 2014, the Company had one customer representing 100% of our accounts receivable-related party. As of December 31, 2013, the Company had one customer representing 100% of our accounts receivable-related party.

18 – CONTINGENCIES

The Company issued to Ironridge Global IV, Ltd. (“Ironridge”) 8,690,000 shares of its common stock in settlement of bona fide claims against the Company which were purchased by Ironridge from various creditors of the Company (the “Claim Amount”). The shares issued to Ironridge were freely tradable and exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Section 3(a)(10) of the Securities Act. Pursuant to the court order issued by the California Superior Court for the County of Los Angeles (“California State Court”) on November 8, 2013, the shares of the Company’s common stock were deemed issued in settlement of the claims (subject to certain adjustments based on the future trading value of the stock) when delivered to Ironridge. The number of shares issued to Ironridge is subject to an adjustment based on the trading price of our stock such that the value of the shares is sufficient to cover the Claim Amount, a 10% agent fee amount and Ironridge’s reasonable legal fees and expenses (the “Final Amount”), which was determined to be $766,238.

On February 10, 2014, Ironridge made a request for, and we issued, an additional 1,615,550 shares of the Registrant’s common stock as a result of the adjustment provisions under the stipulation in the term sheet.

On April 4, 2014, Ironridge requested even more shares pursuant to the added adjustment provisions under the stipulation in the court order issued by the California State Court. This time their request was for an additional 1,646,550 shares of the Company’s common stock. We declined to issue these additional shares because Ironridge had already received, to that date, approximately 10,305,550 shares of free trading stock with a market value of approximately $1.2 million (based on the closing stock price on May 6, 2012), in settlement of a Final Amount of $766,238. The shares issued to Ironridge represent a premium of 48% to the Final Amount.

On May 6, 2014, Ironridge submitted an ex parte application to the California State Court to compel the issuance of the 1,646,550 shares requested from the Company on April 4, 2014, and the California State Court without a hearing entered an order to compel the Company to issue the additional shares. On the same day, we filed a notice of appeal with the California State Court’s order. The appeal automatically stays enforcement of the California State Court’s May 6th order.

We believe that Ironridge is not entitled to additional shares as it has received a significant premium on the Final Amount which Ironridge itself had declared to the California State Court served as the basis of the adjustment mechanism for the number of shares issued based on the Company’s stock price. We will vigorously pursue the appeal, and reversal, of the California State Court order.

We accrued the potential issuance of these shares and have expensed $164,655 to financing costs in the financial statement as of September 30, 2014, as well as reversing 1,646,550 shares of the Company’s common stock.

19 – SUBSEQUENT EVENTS

From October 1, 2014 to November 12, 2014, the Company issued 439,333 shares of common stock for the following transactions: We issued a) 119,000 common stock shares for payment of royalty expense valued at $10,710, b) 238,333 common stock shares to consultants under a consulting agreements with regard to investor relations services, which were valued at $21,450, c) 62,000 common stock shares to various employees for services provided valued at $5,580, and d) 20,000 shares were issued to members of the Board of Directors for services provided, valued at $1,800.

In October 2014 the Company, which had previously owned 49% of MAvPby assumption of all of Implex’s responsibilities to the lenders, obtained the other 51% from Implex and, accordingly, is now the owner of 100% of the issued and outstanding stock of that compounding pharmacy. The Implex ownership interest in MAvP was transferred to the Company for no additional consideration as the Company previously reflected 100% of the purchase price through VIE consolidation. The Company now owns 100% of the assets and outstanding common stock of MAvP.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Caution Regarding Forward-Looking Information

The following discussion and analysis provides information that we believe to be relevant to an assessment and understanding of our results of operations and financial condition for the periods described. This discussion should be read together with our condensed consolidated financial statements and the notes to the condensed consolidated financial statements, which are included in this Quarterly Report on Form 10-Q for the three months ended March 31, 2015. This information should also be read in conjunction with the information contained in our Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission, or the Commission or the SEC, on January 29, 2016, or the Annual Report, including the audited financial statements and notes included therein. The reported results will not necessarily reflect future results of operations or financial condition.

Certain statements contained herein, including, without limitation, statements containing the words “believes”, “anticipates”, “expects” and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; our ability to sustain, manage or forecast our growth; our ability to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the ability to raise adequate capital on reasonable terms, if at all, to execute our business plan and other factors referenced in this and previous filings.

Given these uncertainties, readers are cautioned not to place undue reliance on such forward looking statements.

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes thereto included in this document.

Overview

ScripsAmerica, Inc., (“usScripsAmerica”, “weus”, “~~our~~we” or ~~the~~ “~~Company~~our”) was incorporated in the State of Delaware on May 12, 2008. ~~Since inception,~~We ~~our~~have ~~business~~two ~~model~~wholly ~~has~~owned ~~evolved significantly. From inception through March 2013~~subsidiaries, ~~and~~Main toAvenue aPharmacy ~~lesser~~Inc. ~~extent~~(“Main ~~into~~Avenue”) ~~early 2014, we primarily provided pharmaceutical distribution services to~~ a ~~wide~~New ~~range~~Jersey ~~of end users across the health care industry through~~corporation ~~major~~formed ~~pharmaceutical~~on ~~distributors~~January in4, ~~North America~~2011, ~~such~~and asPharmacy ~~McKesson~~Administration, ~~Corporation~~Inc. (~~McKesson~~“Pharmacy Administration”), ~~and~~a ~~Cardinal~~Delaware ~~Health.~~corporation ~~The end users~~formed ~~included~~on ~~retail,~~July ~~hospitals~~21, ~~long-term~~2015. ~~care~~We ~~facilities~~also ~~and~~own ~~government~~90% ~~and~~of ~~home~~P.I.M.D. ~~care~~International ~~agencies~~LLC. ~~The~~(“PIMD”) ~~majority~~a ofFlorida ~~our~~Limited ~~revenue~~Liability ~~from~~Company ~~this~~formed ~~model~~on ~~came~~March ~~from orders facilitated by McKesson~~26, ~~the largest pharmaceutical distributor in North America, and a few other major pharmaceutical distributor clients~~2009.

~~However,~~Since our weinception ~~had~~in no2008, ~~exclusive~~our ~~contract with~~business ~~McKesson~~model ~~and~~has ~~our~~evolved ~~other~~significantly. ~~users~~Through ofMarch ~~our~~2013, ~~distribution services~~ and asto a ~~result,~~lesser ~~our~~extent ~~margins~~into ~~became~~early ~~compressed. As a result~~2014, we ~~changed~~we ~~our~~primarily ~~business~~provided ~~plan~~pharmaceutical todistribution ~~primarily~~services ~~focus~~to onend ~~(1)~~users across the ~~marketing,~~health ~~sale~~care ~~and~~industry ~~distribution~~through ofmajor ~~our~~pharmaceutical distributors ~~over~~in ~~the~~North ~~counter~~America. ~~(“OTC”) branded~~In ~~product~~2013, ~~known~~the asmajority ~~RapiMed®~~of ~~pediatric~~our ~~pain~~revenue ~~reliever~~came ~~and~~from ~~fever~~orders ~~reducer~~facilitated ~~product~~by ~~(“RapiMed®”)~~McKesson ~~(www~~Corporation.~~rapimeds.com)~~ However, ~~(2)~~we ~~providing~~had ~~distribution~~no ~~services~~exclusive tocontract ~~independent~~with ~~pharmacies,~~McKesson ~~and~~or ~~(3)~~the ~~our~~other ~~entry~~pharmaceutical ~~into~~distributors ~~the~~and ~~specialty~~our ~~pharmacy~~margins ~~market~~became compressed.

~~We plan to launch RapiMed® in Hong~~Our ~~Kong~~current ~~though~~operations ~~our~~consist ~~distributor, Global Pharma Hub (“Global Pharma”). We also entered into agreements with third parties whereby we receive fees based on a percentage~~ of gross profit from pharmaceutical products to independent pharmacies by such third parties. In February 2014 we entered into an agreement with Main Avenue Pharmacy, Inc., (“MAVP”) a New Jersey pharmacy that specializes in topical pain and scar creams, and since the Company will have significant controlling interest, we will consolidate the financial activities of this specialty pharmacy.:

~~Evolving~~· ~~Business~~the ~~Model~~sale and compounding of non-sterile topical and transdermal pain creams through Main Avenue,

~~Since~~· ~~inception,~~ our ~~business model~~wholesale ~~has evolved significantly. We previously provided pharmaceutical distribution~~ services to aindependent ~~wide~~pharmacies ~~range of end users across the health care industry through pharmaceutical distributors in North America. These end users included retail, hospitals, long-term care facilities~~ and ~~government and home care agencies. The majority of our revenue from this model came from orders facilitated by McKesson, the largest pharmaceutical distributor in North America, and a few~~ other ~~major~~medical ~~pharmaceutical~~providers ~~distributor~~through ~~clients.~~PIMD,

~~However,~~· ~~because~~billing weand ~~had~~administrative ~~no exclusive contract with users of our distribution~~ services, ~~our margins began to shrink. These pharmaceutical distribution services are no longer our main source of income. We are now primarily focused on generating revenue~~ through ~~our~~Pharmacy ~~RapiMed® products, our specialty pharmacy business and our independent pharmacy distribution model~~Administration.

~~On September 6~~In 2015, ~~2013,~~ we ~~resolved various~~discontinued ~~disputes with~~ our ~~former~~plans ~~Contract Packager including: (i) an agreement with the U.S. government, (ii) the parties agreement with respect~~ to ~~the~~launch ~~production and packaging of~~ our RapiMed® ~~products~~children’s ~~and~~pain ~~(iii)~~reliever ~~shares~~and offever ~~our~~reducer ~~common~~because ~~stock issued to the principals~~ of ~~the Contract Packager for consulting services. The settlement agreement provides mutual releases, continues the U.S. government~~delays ~~arrangement~~in ~~under~~obtaining ~~modified~~approvals ~~terms, and provides~~ for ~~partial~~distribution ~~reimbursement~~in ofHong ~~prior amounts due to us over fifteen months~~Kong.

This new agreement stipulates that we will provide financing through a related party, Development 72 LLC, for the continuance of its pharmaceutical distribution contract with the U.S. government and for the Contract Packager to make 15 monthly payments to us totaling $408,154, with respect to prior shipments under U.S. government contract (which had had stopped in May 2013 due to a dispute but have resumed in September 2013) which we previously reserved for or wrote off in 2013. The U.S. government contract was revised in terms of the rate and the number of bottles of product sold to the U.S. government for which we would receive payments.23

27Main Avenue Pharmacy

~~RapiMed®~~Main Avenue, ~~Children~~a licensed retail and compounding pharmacy located in Clifton, New Jersey focuses on the development and sale of prescription pain creams which may incorporate up to eight active pharmaceutical ingredients for application on the skin, in localized areas, resulting in minimal systemic absorption and a reduction of possible side effects. Main Avenue’s ~~Pain~~products ~~Reliever~~require a prescription from a physician, are shipped directly to the patient and ~~Fever~~are ~~Reducer~~billed through the patient’s insurance provider.

~~Our~~In connection ~~target~~with ~~market~~our ~~for~~acquisition ~~RapiMed®~~of Main Avenue, we assumed two notes payable totaling $300,000 and these notes were paid in full ison ~~2-11~~December ~~year~~9, ~~olds~~2014. WeThese ~~anticipate~~notes included a royalty payment clause where that on the ~~formula~~first ~~for~~10,000 ~~our~~prescription ~~orally~~processed ~~disintegrating~~we ~~tablets~~pay a ~~will~~$30 beroyalty ~~more~~fee ~~effective~~per ~~than~~prescription, ~~existing~~this ~~products due~~royalty fees decreases to ~~its~~$10 ~~ability~~a toprescription ~~melt~~when ~~faster~~the 10,001 ~~taste~~prescription ~~better~~is ~~and~~processed by ~~provide~~Main ~~more~~Avenue. ~~accurate~~On ~~dosing~~September 1, 2014, the royalty fee dropped to $10 prescription.

Unlike other products available, RapiMed® is much smaller and dissolves in the child’s mouth in 25 seconds, therefore entering their system faster. RapiMed® contains Acetaminophen (main ingredient in Tylenol®), however the bitter taste of this active ingredient is masked by a patented technology. The cherry and wild grape flavors that our RapiMed® children’s pain reliever product will come in are most appealing to children. Additionally, the dosage of RapiMed® is controlled, not like the syringe based competing products. We offer the 80 mg for 2-6 year olds, and 160 mg for the 6-11 year olds.

The RapiMed® packaging is convenient, portable, child resistant and easy to use as well as eye-catching. The contents are aspirin free, ibuprofen free, sugar free and gluten free as well. Since the numerous Tylenol® recalls in the recent past, there is a clear need for a better controlled, more efficient product to fill the void. We believe our RapiMed® is that product. Currently due to the significant costs needed for a successful launch of RapiMed® we do not anticipate launching RapiMed® in the United States within the next 15 months.

In January 2014, we entered into an exclusive world-wide licensing agreement with Global Pharma Hub, Inc. (“Global Pharma”) for the marketing and distribution of RapiMed® in all countries except the United States. The license will allow Global Pharma to market and distribute the product under our registered trademark, RapiMed® as well as our registered trade mark “MELTS IN YOUR CHILD'S MOUTH”. In order to keep the license agreement, Global Pharma must meet minimum sales quotas terms which are as follows:

1. $500,000 in purchase orders during first 12 months of License Agreement; 2. $1,400,000 in purchase orders during second 12 months; and 3. $2,400,000 in purchase orders during the third 12 months.

Global Pharma signed an exclusive sub-licensing agreement for RapiMed® in the territory of Hong Kong on January 28, 2014, with NYJJ Hong Kong Ltd. to generate initial and ongoing orders for the product following its registration approval by the Hong Kong government. The minimum sales quotas terms of the exclusive Hong Kong sub-licensing agreement are as follows:

1. $550,000 in purchase orders during first 12 months; 2. $1,500,000 in purchase orders during the second 12 months; and 3. $2,500,000 in purchase orders during the third12 months.

On February 22, 2014, Global Pharma signed an exclusive sub-licensing agreement with Jetsaw Pharmaceutical, Inc. for the marketing and distribution of RapiMed® pediatric acetaminophen in the territory of Canada for an initial term of three years. The minimum sales quotas terms of the exclusive Canadian sub-licensing agreement are as follows:

1. $120,000 in purchase orders during first 12 months; 2. $220,000 in purchase orders during the second 12 months; and 3. $320,000 in purchase orders during the third12 months.

As of November 12, 2014 no sales or shipment have been made pursuant to the above agreements

Independent Pharmacy Distribution

In December ~~addition~~of 2014, we exercised an option to ~~our~~purchase 90% of PIMD’s membership units (“PIMD Units”) from its ~~RapiMed®~~sole ~~products,~~member. wePIMD ~~are~~holds ~~also~~the ~~implementing~~licenses ~~our~~required ~~plan~~to distribute wholesale prescription drugs. The purchase of the PIMD Units was subject to ~~generate~~certain ~~revenue~~conditions byprecedent ~~entering~~including that we obtain the ~~Independent~~necessary ~~Pharmacy~~licenses ~~distribution~~from the state of Florida and the DEA which we ~~market~~did not obtain until 2015. On March 15, 2014, we entered into a Sourcing and Marketing Agreement with PIMD.

~~This~~Prior to ~~market~~acquiring ~~will allow~~a us90% tointerest ~~provide~~in aPIMD, ~~solution~~PIMD towas a ~~problem~~Variable ~~experienced~~Interest byEntity ~~small~~(“VIE”). ~~retail~~We ~~chains~~were ~~and~~considered ~~individual~~the ~~pharmacies,~~primary ~~which~~beneficiary of isPIMD ~~their~~because ~~inability to~~we ~~fill~~had ~~prescriptions~~both: ~~for~~(a) ~~their~~the ~~clients~~power ~~when~~to direct the ~~prescription~~activities isof ~~for~~PIMD athat ~~controlled~~most ~~substance.~~significantly ~~Because~~impacted ~~manufacturers~~its ofeconomic ~~controlled~~performance ~~substances,~~and ~~impose~~(b) ~~minimum~~the ~~order~~obligation ~~requirements~~to ~~larger~~absorb ~~than~~losses of PIMD that could have potentially been significant or the ~~typical~~right ~~order~~to ~~placed~~receive bybenefits from ~~small,~~PIMD ~~independent~~that ~~pharmacies,~~could ~~small~~have ~~independent~~potentially been significant. We received a majority of PIMD’s expected profits and losses. In ~~pharmacies~~2015, ~~cannot~~we plan to provide ~~these~~financing ~~prescriptions~~for toPIMD’s ~~their~~inventory ~~customers~~purchases through related parties.

In November 2013, we entered into an agreement with WholesaleRx, Inc.(“WholesaleRx”), which represents over 300 independent pharmacy operator. WholesaleRX is licensed by the Drug Enforcement Agency (“DEA”) and multiple states to store and distribute controlled substances (which are drugs that have the potential for abuse or dependence and are regulated under the federal Controlled Substances Act). WholesaleRx orders the goods from the manufacturers who ship the goods to WholesaleRx’s warehouse facility. Upon receiving orders, WholesaleRx ships the goods to the pharmacies in the bottles as received from the manufacturer, COD which eliminates any accounts receivable.DispenseDoc

~~Under~~On April ~~the~~10, ~~Agreement~~2015, we ~~agreed~~formed toDispenseDoc, ~~provide $400~~Inc.,~~000~~ a wholly owned subsidiary to ~~WholesaleRx~~distribute ~~for~~medications adirectly ~~20%~~to ~~equity~~physicians allowing ~~interest~~them into ~~WholesaleRx.~~dispense Inmedication ~~consideration~~to ~~for~~their ~~providing~~patients ~~the~~at ~~purchase order~~their ~~financing~~offices and topoints ~~cover~~of ~~our~~care. ~~costs~~In oforder ~~administering~~to ~~the~~dispense ~~financing~~prescription drugs, ~~WholesaleRx~~physicians ~~agreed~~must toobtain ~~pay~~a usspecific ~~14%~~license ofwith ~~its~~the ~~gross~~state ~~profit~~where ontheir practice is located and contract with Pharmacy orBenefit ~~before~~Managers ~~the~~(“PBM”). ~~15th~~The ~~calendar~~plan ~~day~~was ofto ~~each~~assist ~~month~~physicians ~~for~~with ~~the~~these ~~preceding~~requirements ~~calendar~~and ~~month~~provide billing software and product formulary. ~~Late~~The ~~payments~~secondary ~~will~~benefit ~~accrue~~was ~~interest~~PIMD atwould become the ~~rate~~ sole source provider of ~~18%~~all ~~per~~products ~~annum~~dispensed ~~until~~by ~~paid~~the doctors.

28Due to significant resources required to get DispenseDoc to be truly successful and profitable for the Company, we decided on February 22, 2016, to enter into an agreement to sell DispenseDoc to Bread and Circuses Media, Inc. for $26,520 plus royalty payments of 1% of the amount of the adjudicated value of the monthly sales made through the DispenseDoc system by each DispenseDoc until March 20, 2017.

~~Subsequently, the~~Pharmacy ~~Agreement~~Administration ~~was amended to reduce our investment to $275,000, and our ownership interest to 14%~~Inc. Additionally, our monthly fee was reduced to 14% of the gross profit for the preceding month if the credit line was used during such prior month but only 8% if the credit line was not used in such prior month. The subsequent amendments to the arrangement have not been reduced to a formal, written agreement and some of the arrangements are oral amendments.

InOn April ~~July~~10, ~~2014~~2015, ~~the Company’s~~we ~~relationship~~formed ~~with~~our ~~WholesaleRx~~wholly ~~deteriorated~~owned ~~and as of August 6~~subsidiary, ~~2014,~~Pharmacy ~~WholesaleRx stopped making payments and stopped providing the required financial information for calculation of the 14% fee due to us. Accordingly on October 8~~Administration, ~~2014 we filed an action in the State of Delaware for the unpaid amounts owed to us~~Inc. At(“Pharmacy ~~the~~Administration”) ~~same time, we joined with a 40% shareholder of WholesaleRX,~~to ~~giving~~provide ~~them~~billing ~~a 54% voting interest~~ and ~~they~~administrative ~~have~~services ~~jointly filed a derivative action in the Tennessee seeking the return~~ to usindependent ~~of funds alleged to have been improperly withdrawn by WholesaleRX’s management, a 40% shareholder~~pharmacies. InAs ~~addition,~~of the ~~Company and~~date ~~the 40% shareholder have called a shareholder’s meeting with the intent to change the Board~~ of ~~Directors~~this ~~and~~Form ~~Management. That change in WholesaleRx’s Board occurred on October 31~~10-Q, ~~2014,~~we ~~and~~have ~~the~~not ~~change in Management took place on November 11,~~generated ~~2014.~~any No significant ~~assets~~revenue ~~were~~from ~~reduced~~Pharmacy and with the change of management and our current agreement will resume, consequently no reserve for our outstanding receivable or receive for our investment was considered necessary as of September 30, 2013Administration.

In December, 2013, we revised an October 2013 purchase agreement to acquire 90% of the Membership Units in P.I.M.D. International, LLC (“PIMD”), a start-up limited liability company based in, and proposing to do business in Florida. Although founded approximately four years ago, PIMD has had no sales, but has the necessary licenses for operation of a drug wholesale operation. The purchase of the Membership Units in PIMD was subject to certain conditions precedent, of which the most important was that we obtain the necessary licenses from the state of Florida (and the DEA) for the ownership of a drug distribution company like PIMD. However, it was determined that securing the licenses was going to require a substantially longer period of time than the parties had anticipated. Consequently, in order to preserve the business opportunity, it was necessary to amend the agreement between the parties. Accordingly, the October 2013 agreement, as amended, was terminated. The funds already advanced by us to PIMD were converted into a loan and the agreement became a Sourcing and Marketing Agreement

P.I.M.D. International, LLC (“PIMD”), a start-up limited liability company based in, and proposing to do business in, Florida, is considered to be a Variable Interest Entity (VIE). Our determination that PIMD is a variable interest entity (VIE) was based on the fact that PIMD’s equity at risk is insufficient to finance its activities. The Company would be considered the primary beneficiary of the VIE as it has both: (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant or the right to receive benefits from the VIE that could potentially be significant. ScripsAmerica receives a majority of PIMD’s expected profits and losses. We also will provide the primary financing for inventory purchases through related parties.

On February 20, 2014, we entered into a Business Management Agreement with Implex Corporation (“Implex”) which had acquired MAVP for $550,000. Under this agreement, Implex engaged us to manage the day to day business operations of MAVP, subject to the directives of Implex. Our day to day management responsibilities include financial management but excludes any matters related to licensing and those responsibilities which require Federal or state licensure (“Licensing Matters”). Prior to the final closing, the Licensing Matters were handled by Implex and since the final closing Implex has been responsible for managing Licensing Matters. We will also provide funding (as a loan or advance), to the extent not covered by the funds of the pharmacy, to pay all costs and expenses incurred in the operation of MAVP.

In October 2014, we purchased from Implex, both (a) its Option to acquire 90 of the 100 PIMD limited liability company membership units presently owned by its sole member, Vanessa Gonzalez and (b) a promissory note from PIMD for $272,000, in exchange for cancellation of the Implex indebtedness to us, and assumption by us of Implex’s obligation to PIMD.

In October 2014, we acquired 51% of MAVP from Implex by assumption of all of Implex’s responsibilities to the lenders making us the owner of 100% of the issued and outstanding stock of MAVP. The Implex ownership interest in MAVP was transferred to us for no additional consideration as we previously reflected 100% of the purchase price through VIE consolidation. The Company now owns 100% of the assets and outstanding common stock of MAVP.

We assumed the following MAVP, debt: (i) commencing on April 1, 2014 and continuing to, and including, March 1, 2015, $47,003 plus $30 for each prescription processed by MAVP during the preceding month (except that the first such payment shall include prescriptions processed since the initial closing on February 7, 2014); (ii) commencing on April 1, 2015 and continuing to, and including, March 1, 2016, $8,827 plus $30 for each prescription processed by MAVP during the preceding month; (iii) commencing on April 1, 2016 and continuing thereafter plus $30 for each prescription processed by MAVP during the preceding month and (iv) commencing on the 10,001 prescription processed by MAVP the rate will be reduced to $10 for each prescription processed by MAVP during the preceding month.

Description of Revenues

WeBeginning in ~~offer~~February 2014, we provided fulfillment of ~~prescription~~prescriptions ~~and~~through ~~over~~Main Avenue. We process prescriptions to the ~~counter~~physician’s desired ~~(“OTC”)~~specifications ~~orders.~~and Towe ~~fulfill~~recognized ~~purchase~~revenue ~~orders~~for prescriptions shipped directly to patients from ~~customers~~Main Avenue. WeMain ~~process orders~~Avenue only ships prescriptions to ~~the~~patients ~~end~~upon ~~user~~payment approval by the patients’s ~~desired~~insurance ~~specifications~~companies. ~~Capabilities~~Payments ~~range~~are ~~from~~usually ~~unit~~received within 30 days of ~~use~~shipment. ~~packaging~~Any ~~for~~prescription in- which the patient ~~nursing~~has ~~homes~~not received product, but we may have been reimbursed by the insurance provider, is recorded as deferred revenue or accounts receivable reserve for future deductions. In the event a patient returns a product, or if the product was not deliverable, the prescription is reversed and marked as “unbilled”. If ~~hospitals~~we received payment prior to ~~bulk~~the ~~packaging~~adjustment, the payment is recorded in the reserve for ~~government~~charge backs. As of March 31, 2015, we had no deferred revenue, had $429,415 in accounts receivable reserve for future deductions and ~~international~~$1,383,438 ~~organizations~~in allowance for insurance company deductions and charge backs.

2924

In 2014, ~~2013~~ we ~~had~~recognized ~~product~~ revenue ~~associated~~from ~~with~~ our ~~curtailed~~contract ~~pharmaceutical~~packager ~~distribution~~Marlex ~~services~~Pharmaceuticals, isInc. ~~recognized~~(“Marlex ~~when~~Pharmaceuticals”) ~~product~~on a isnet ~~shipped~~basis ~~from~~according ato ~~contract packager~~Financial toAccounting ~~our~~Standards ~~customers~~Board (“FASB”) Accounting Standards Codification (“ASC’) 605-45, ~~warehouses~~Revenue ~~and~~Recognition: isPrincipal ~~adjusted~~Agent ~~for~~Considerations. ~~anticipated~~Since ~~charge~~we ~~backs~~are ~~from~~not ~~our~~deemed ~~customers~~to ~~which~~be ~~include~~the ~~inventory credits,~~principal ~~discounts~~in orthese ~~volume~~sales transactions ~~incentives.~~we ~~These~~do ~~charge~~not ~~back~~report ~~costs~~the ~~are~~transaction ~~received~~on ~~monthly~~a ~~from~~gross basis in our ~~customers’~~consolidated ~~and~~statements ~~the~~of operations. These sales transactions related to a contract that Marlex Pharmaceuticals had with a government agency. The revenue ~~and~~is ~~accounts~~reported ~~receivables~~in ~~are~~a ~~reduced~~separate ~~accordingly~~line ~~based~~in the oncondensed ~~historical~~consolidated ~~experience~~statements of operations as “Revenues net, ~~customer~~from contract ~~programs~~packager”, ~~product~~and ~~pricing~~the gross sales ~~trends~~are ~~and~~reduced by the ~~mix~~cost of ~~products~~sales ~~shipped~~fees from Marlex Pharmaceuticals. In 2015, we no longer received revenues from Marlex Pharmaceuticals as the agreement terminated.

~~Purchase orders~~Results ~~from our customers generate our shipments, provide persuasive evidence that an arrangement exists and that the pricing is determinable. The credit worthiness~~ of ~~our~~Operations ~~customers~~(rounded ~~assures~~to ~~that~~nearest collectability is reasonably assured. For our specialty pharmacy business revenue is not recognized until confirmation that the patient has received the prescription via Federal Express delivery confirmation.thousand)

Beginning in February 2014, we began recognizing revenue for prescriptions shipped directly to patients from our specialty pharmacy business, MAVP which only ships prescription products to patients upon payment approval by the patients’ insurance company, payments are usually received with 30 days of product being shipped. Consequently, no sales allowance has been recorded as of September 30, 2014.

									( ) = unfavorable
	For the three months ended March 31,								Change
	2015				2014				$ change
Product revenues-net	$	9,371,000		99%	$	617,000		75%	$	8,754,000
Revenue net, from contract packager		–		0%		124,000		15%		(124,000	)
Commission fees		49,000		1%		83,000		10%		(34,000	)
Net revenues		9,420,000		100%		824,000		100%		8,596,000
Cost of goods sold		1,652,000		18%		226,000		27%		1,426,000
Gross profit - product		7,768,000		82%		598,000		73%		7,170,000
Operating costs and expenses:
Selling		6,637,000		70%		426,000		52%		(6,211,000	)
General and administrative		814,000		9%		172,000		21%		(642,000	)
Ironridge Settlement		1,400,000		15%		–		0%		(1,400,000	)
Share-base compensation issued for payment of services		446,000		5%		214,000		26%		(232,000	)

Total operating expenses		9,297,000		99%		812,000		99%		(8,485,000	)
Operating loss		(1,529,000	)	-16%		(214,000	)	-26%		(1,315,000	)
Other income (expenses) :
Interest expense		(56,000	)	-1%		(83,000	)	-10%		27,000
Loss on revaluation of derivatives		–		0%		(513,000	)	-62%		513,000
Financing costs		(62,000	)	-1%		(813,000	)	-99%		751,000
Amortization of debt discount		–		0%		(93,000	)	-11%		93,000
Gain on extinguishment		–		0%		457,000		55%		(457,000	)
Income from equity investments		–		0%		1,000		0%		(1,000	)
Total other expenses, net		(118,000	)	-1%		(1,044,000	)	-127%		926,000
Loss before taxes		(1,647,000	)	-17%		(1,258,000	)	-153%		(389,000	)
Provision for income taxes		–		0%		–		0%		–
Net loss	$	(1,647,000	)	-17%	$	(1,258,000	)	-153%	$	(389,000	)

~~We also recognize~~Net ~~revenue from our Contract Packager on a net basis according to ASC 605-45,~~ Revenue ~~Recognition~~: ~~Principal~~The ~~Agent~~following ~~Considerations. Since~~table wesets ~~are~~forth ~~not~~selected ~~deemed~~condensed toconsolidated bestatements ~~the principal in these sales transactions we do not report the transaction on a gross basis in our statement~~ of operations. ~~These~~data ~~sales~~as ~~transactions relate to~~ a ~~contract~~percentage ~~that our Contract Packager has obtained with a government~~of ~~agency.~~total ~~The~~net revenue isfor ~~reported in a separate line in~~ the ~~statement~~three ofmonths ~~operations~~ended asMarch ~~“Product revenues net from Contract Packager”~~31, 2015 and ~~the gross sales are reduced by the cost of sales fees from our Contract Packager.~~2014:

In addition, commission fees are recognized when earned on shipments of generic pharmaceutical and OTC products by WholesaleRx, which is a DEA and State-licensed to store and distribute controlled substances, pursuant to an agreement entered into in 2013. Under this agreement with WholesaleRx, we will earn a 14% commission fees on the gross margin of products shipped to independent pharmacies by WholesaleRx.

Products sold	2015			% to total		2014			% to total		Change
Prescription drug products	$	8,544,000			90%	$	617,000			12%	$	7,927,000
OTC & Non Prescription Products		957,000			10%		–			–		957,000
Revenue, from contract packager		–			-%		3,687,000			72%		(3,687,000	)
Revenue, from pharmaceutical partner		–			-%		793,000			16%		(793,000	)
Gross Sales		9,501,000			100%		5,097,000			100%		4,404,000
Discounts / Charge backs		(81,000	)		-1%		–			–		(81,000	)
Adjustment to sales for contract packager and pharmaceutical partner		–			–		(4,273,000	)		-84%		4,273,000
Net Revenue	$	9,420,000				$	824,000				$	8,596,000

~~THREE MONTHS ENDED SEPTEMBER 30, 2014 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2013~~25

									( ) = unfavorable
	For the three months ended September 30,								Change
	2014				2013				$ change
Product revenue-net	$	12,644,000		99%	$	–		0%	$	12,644,000
Revenue net, from contract packager		129,000		1%		57,000		78%		72,000
Commission fees		44,000		0%		16,000		22%		28,000
Net Sales		12,817,000		100%		73,000		100%		12,744,000
Cost of Goods Sold		1,213,000		9%		30,000		41%		1,183,000
Gross Profit		11,604,000		91%		43,000		59%		11,561,000
Operating Costs and Expenses:
Selling and Marketing		9,329,000		72%		64,000		88%		(9,265,000	)
General and Administrative		561,000		5%		511,000		700%		(95,000	)
Recovery of bad debt / reserve for bad debt		(82,000	)	-1%		(27,000	)	-37%		55,000
Share-base Comp issued for payment of services		135,000		1%		2,074,000		2841%		1,939,000
Total Operating expenses		9,943,000		76%		2,622,000		3592%		(7,321,000	)
Operating Income (Loss)		1,661,000		14%		(2,579,000	)	-3533%		4,433,000
Other Income (expenses) :
Interest expense		(88,000	)	-1%		(60,000	)	-82%		(28,000	)
Gain (Loss) on revaluation of derivatives		–		0%		795,000		1089%		(795,000	)
Loss from derivative issued with debt greater than carrying value		–		0%		(544,000	)	-745%		544,000
Financing costs		(27,000	)	0%		–		0%		(27,000	)
Amortization of debt discount		–		0%		(234,000	)	-321%		234,000
Gain on extinguishment		(29,000	)	0%		300,000		411%		(329,000	)
Total Other Income / (expenses)		(144,000	)	-1%		257,000		352%		(401,000	)
Income (Loss) before taxes		1,517,000		13%		(2,322,000	)	-3181%		3,839000
Tax Expense		–		0%		–		0%		–
Net Income (loss)	$	1,517,000		13%	$	(2,322,000	)	-3181%	$	3,839,000

For the three months ended March 31, 2015, we generated net revenue of approximately $9,420,000 compared to net revenue of approximately $824,000 for the same period in 2014, an increase of approximately $8,596,000. This increase is primarily due to prescription sales from Main Avenue which we acquired in February 2014 for $550,000. In 2015, PIMD had sales of approximately $908,000 compared to $0 in 2014. For the three months ended March 31, 2014, sales from the U.S. government contract through Marlex Pharmaceuticals which are recorded net of costs, was approximately $124,000. We earned sales commissions of approximately $50,000 for the three months ended March 31, 2015, versus approximately $83,000 for the same three month period in 2014.

30Gross Profit. Our gross profit for the three months ended March 31, 2015, was approximately $7,768,000, which was 82% of our net revenue as compared to a gross profit of approximately $598,000 in 2014, an increase of approximately $7,170,000. The increase is attributed to a full quarter of sales from Main Avenue Pharmacy which we acquired in February 2014. Sales from Main Avenue generate gross margins that range from 65% to 89%.

~~Revenue~~Operating Expenses. ~~Net:~~For ~~The~~the ~~following~~three ~~table~~months ~~sets~~ended ~~forth~~March ~~selected statement~~31, 2015, our operating expenses consisted of ~~operations~~selling, ~~data~~general asand aadministrative expenses ~~percentage~~(“SG&A”), ofexcluding ~~total~~share-based ~~revenue~~compensation issued for services in the ~~three~~amount ~~month~~of ~~period~~approximately ~~ended~~$445,000 and ~~September~~settlement 30cost to Ironridge of $1,400,000, ~~2014~~total SG&A was $7,451,000. Selling expenses were approximately $6,637,000, which is 71% of operating expenses and ~~2013~~general and administrative expenses were approximately $814,000 for first quarter 2015.

Products sold	2014			% to total		2013			% to total		Change
											( ) = unfavorable
Prescription drug products –specialty pharmacy business	$	13,144,000			77%		–			0%	$	13,144,000
Principal operating cost consist of :	2015					2014					$ Change
Revenue, from contract packager		3,519,000			21%		1,006,000			84%		2,513,000
Human resources	$	379,000			5%	$	96,000			12%	$	(283,000	)
Revenue, from pharmaceutical partners		363,000			2%		188,000			16%		175,000
Sales Marketing		6,637,000			84%		426,000			52%		(6,211,000	)
Gross Sales		17,026,000			100%		1,194,000			100%		5,832,000
Professional fees: legal & accounting		173,000			2%		81,000			10%		(92,000	)
Discounts / Charge backs – specialty pharmacy business		(500,000	)		-2%		–			0%		(500,000	)
Consulting		78,000			1%		10,000			1%		(68,000	)
Adjustment to sales for contract packager and pharmaceutical partner		(3,709,000	)		-22%		(1,121,000	)				(2,588,000	)
Investor relations and marketing		299,000			4%		227,000			28%		(72,000	)
Net Revenue	$	12,817,000				$	73,000				$	12,744,000
Recovery of bad debt		–			0%		(109,000	)		-13%		(109,000	)
General expense		330,000			4%		81,000			10%		(249,000	)
Total selling, general & administrative		7,896,000			100%		812,000			100%		(7,084,000	)
Share-based compensation included in S,G & A above		445,000					214,000					(231,000	)
Total selling, general & administrative excluding share-base compensation	$	7,451,000				$	598,000				$	(6,853,000	)

~~Net Revenues~~Selling. For the three ~~month~~months ~~period~~ ended ~~September~~March 3031, ~~2014~~2015, weselling ~~generated~~costs ~~net~~increased ~~revenue of~~ approximately by $126,~~817~~211,000 as compared to ~~net~~the ~~revenue of approximately $73,000 for~~ same period in ~~2013,~~2014. anA ~~increase~~significant portion of ~~approximately~~this ~~$12,744,000. This~~ increase ~~in revenue versus the same three month period a year ago~~ is ~~mainly~~ due to ~~prescription~~ sales ~~from~~commissions ~~our~~paid ~~specialty~~by ~~pharmacy~~Main ~~business~~Avenue, ~~for~~which ~~topical pain~~were ~~creams. The topical pain creams prescription business accounted for~~ approximately $126,~~578~~139,000 and of the ~~sales~~settlement ~~increase.~~agreement ~~In February 2014 we entered into a Business Management Agreement~~ with ~~Implex~~Pharmanostics ~~which~~of ~~had acquired MAVP for~~ $~~550~~287,~~000.~~500 ~~MAVP~~for ~~is a specialty pharmacy which ships~~ the ~~topical pain creams. This was the~~ first quarter ~~in which we had significant sales of approximately $66,000 from PIMD Inc~~2015. ~~Sales~~We ~~from~~paid ~~the U.S. government contract through~~ a ~~contract~~commission ~~packager~~to ~~which~~an ~~are~~outside ~~recorded~~sales force ~~net~~ of ~~costs,~~between ~~increased~~ approximately ~~$72,000.~~ ~~Sales~~55% ~~commission~~to ~~earned from WholesaleRx under which we earn a 14~~65%. ~~commission~~There ~~on the gross margin of generic pharmaceutical sales,~~ was ~~approximately~~a $28159,000 increase in ~~third~~selling ~~quarter~~costs ~~2014;~~mainly ~~there~~for ~~were~~our noin-house ~~commissions~~billing ~~earned~~services department inwhich ~~2013~~we ~~from~~created ~~sales~~in byDecember ~~WholesaleRx~~2014.

~~Gross~~General ~~Profit~~and Administrative. ~~Gross~~For ~~profit~~first ~~for~~quarter ~~three~~2015, ~~month~~general ~~period~~and ~~end~~administrative ~~September~~expenses ~~30,~~(“G&A”) ~~2014~~including ~~was~~share-based compensation increased approximately $11874,~~604,~~000 to approximately $1,259,000 ~~which~~as ~~was~~compared ~~91%~~to ofapproximately ~~our~~$385,000 ~~net~~for the same period ~~revenues~~in as2014. ~~compared~~If tothe ashare-based ~~gross~~compensation ~~profit~~is ofexcluded, then the G&A costs increased approximately $43643,000. Included in G&A for ~~the~~2015 ~~same~~are: ~~period~~(i) non-cash stock compensation payments for services in ~~2013~~the amount of approximately $445,000. anThe ~~increase~~changes in G&A expenses excluding share-base compensation was primarily the result of: (a) increases in professional fees of approximately $1192,~~561,~~000., ~~The~~(b) increase in ~~our~~consulting ~~gross~~fees ~~profit~~of ~~from~~approximately ~~three~~$46,000 ~~months~~(c) ~~ended~~a ~~September~~increase 30of approximately $77,000 ~~2014~~excluding ~~compared~~stock tobased ~~the~~compensation paid ~~same~~for ~~period~~these services in ~~2013~~investor ~~can~~relations beand ~~attributed~~public relations costs which include costs associated with market awareness toof our ~~management~~common ofstock, ~~the~~press ~~specialty~~releases, ~~pharmacy~~assistance ~~business~~in capital raising and ~~topical~~fees ~~pain~~for ~~and~~obtaining ~~scar~~funding, ~~cream~~(d) ~~prescriptions~~an increase of approximately $69,000 in employee costs expenses which ~~generated~~included ~~significant sales~~salary, and benefits and (e) an increase in ~~third~~all ~~quarter~~other general expenses of ~~2014~~approximately $249,000 ~~and~~which ~~also~~includes ~~has~~D&O ainsurance, ~~gross~~telephone, ~~margin~~computer ~~percentage~~expenses, ~~that~~and ~~ranges~~general ~~from~~overhead ~~85%~~and toother ~~91%~~office-related expenses.

Operating Expenses. Our third quarter 2014 operating expenses consist of Selling, General and Administrative expenses (“SG&A”), excluding share-based compensation issued for services in the amount of approximately $135,000, total SG&A was $9,808,000. Selling expenses were approximately $9,329,000, and General and Administrative costs were approximately $479,000 for the three month period ended September 30, 2014.26

									( ) = unfavorable
Principal operating cost consist of :	2014				2013				$ Change
Human resources	$	137,000		1%	$	75,000		3%	$	(62,000	)
Sales Marketing		9,329,000		94%		64,000		2%		(9,265,000	)
Professional fees: Legal & accounting		149,000		1%		126,000		5%		(23,000	)
Consulting		33,000		0%		204,000		8%		171,000
Investor relations and Marketing		164,000		2%		1,892,000		72%		1,728,000
(Recovery of) bad debt or expense		(82,000	)	-1%		(27,000	)	-1%		55,000
General expense		213,000		2%		288,000		11%		75,000
Total Selling, General & Administrative		9,943,000		100%		2,622,000		100%		(7,321,000	)
Share-based compensation included in S,G & A above		135,000				2,074,000				1,939,000
Adjusted total Selling, General & Administrative	$	9,807,000			$	548,000			$	(9,259,000	)

Share-Based Compensation Issued for Services. Due to our cash flow issues in the three months ended March 31, 2015 and 2014, we issued common stock as payment for services to various service providers. The following table lists the area of General and Administrative expenses for common stock issued:

Selling. For the three months ended September 30, 2014, selling costs increased approximately $9.3 million compared to the same period in 2013. A significant portion of this increase is due to sales commission paid on sales from our management of the specialty pharmacy business and prescription topical creams business, which commission costs were approximately $8.6 million. We pay a commission fee of approximately 45% to 65% on the sales revenue on prescriptions shipped in the quarter to our outside third party sales forces. The other $700,000 of selling costs increase were for a special billing services, provided by a third party provider, which assist in getting insurance prescriptions approved and costs related to RapiMed® marketing.

	2015		2014
Human resources	$	214,000	$	–
Consulting		22,000		–
Investor Relations and Marketing		209,000		214,000

Total Selling, General & Administrative	$	445,000	$	214,000

Total Other Expenses. Other expenses for the three months ended March 31, 2015 decreased by approximately $926,000 to approximately $118,000 from approximately $1,044,000 for the same period in 2014.

~~General~~The dollar ~~and~~changes ~~Administrative. For~~for the three ~~month~~months ~~period~~ ended ~~September~~March 3031, ~~2014,~~2015 ~~general and administrative expenses (“G&A”) decreased approximately $1,944,000 to approximately $614,000 as~~ compared to approximately $2,558,000 for the same three month period in 2013, the majority of this decrease is due to share-based compensation which was issued for various services. If excluded, the share-based compensation the G&A costs were basically flat versus the prior year, approximately $479,000 in 2014 ~~versus $484,000~~ for same three month period in 2013. Included in G&A totals in the three months period ended September 30, 2014 are (i) non-cash stock compensation payments for services in the amount of $135,000 and (ii) recovery of bad debt previously written off in 2013 in the amount of $55,000. The changes in G&A expenses were mainly a result of (a) increases in professional fees of approximately $23,000, (b) an increase of approximately $36,000 in investor relations and public relations costs which include costs associated with market awareness of our common stock, press releases, assistance in capital raising and fees for obtaining funding, (c) an increase of $68,000 in employee costs, which included salary and benefits, employee options costs and board of directors costs, (e) a decrease in all other ~~general expense of approximately $76,000 which includes D&O insurance, telephone, computer~~ expenses~~, and~~ ~~general~~consist ~~overhead and other office-related expenses and (f) recovery~~ of ~~$55,000~~the ~~for bad debt previously written off in 2013.~~following:

Share-based compensation issued for services. Due to our cash flow issues for the three months ended September 30, 2014 and 2013, we issued common stock for payment of service to various vendors. The following table lists what area of General and Administrative expenses for which we issue our common stock:

	Three months ended March 31,						( ) = unfavorable change
Other income (expenses) :	2015			2014			$ Change
Interest expense	$	(56,000	)	$	(83,000	)	$	27,000
Change in fair value of derivatives		–			(513,000	)		513,000
Financing costs		(62,000	)		(813,000	)		751,000
Amortization of debt discount		–			(93,000	)		93,000
Gain on extinguishment of debt		–			457,000			(457,000	)
Income from equity investments		–			1,000			(1,000	)
Total other expenses, net	$	(118,000	)	$	(1,044,000	)	$	926,000

	2014		2013
Human resources	$	7,000	$	13,000
Consulting		–		170,000
Investor relations and Marketing		128,000		1,891,000
Total Selling, General & Administrative	$	135,000	$	2,074,000

Interest expense for the three months ended March 31, 2015 consisted of the following: (a) interest on our convertible debt, including relating party amounts was approximately $20,000. We made cash payments of approximately $20,000 in 2015, as compared to cash payments for interest of approximately $28,000, in 2014, (b) interest cost associated with a term loan of $500,001 which was approximately $5,000, as compared to approximately $7,700 in 2014, (c) interest costs associated with our lines of credit (Wells Fargo bank and Triumph Bank) was approximately $22,000, as compared to $100 in 2014, (d) interest cost associated with our purchase order financing from a related party which was approximately $0, as compared to approximately $25,000 in 2014.

~~Total~~The change ~~Other~~in ~~Expenses.~~fair ~~Other~~value ~~expenses~~of derivative liability for the three ~~month~~months ~~period~~ ended ~~September~~March 3031, 2014 ~~increased~~was by approximately $~~401~~513,000 as compared to ~~expense~~$0 offor ~~approximately~~2015. ~~$144,000~~The aschange ~~compared to~~is ~~income~~a result of ~~approximately~~the ~~$257,000~~reduction ~~for~~of variable convertible debt during the ~~same~~first ~~period~~quarter 2014, as compared to no derivative liabilities in ~~2013~~2015.

~~The~~With the ~~dollar~~reduction ~~changes~~of ~~for~~debt ~~three~~by ~~months ended~~paying ~~September~~off 30convertible notes early, ~~2014~~we ~~versus~~incurred ~~2013~~gains ~~for~~of ~~other~~approximately ~~expenses~~$457,000 ~~consists~~in offirst ~~the~~quarter ~~following:~~2014, as compared to no gains in first quarter 2015.

							( ) = unfavorable Change
Other Income (expenses) :	2014			2013			$ Change
Interest expense	$	(88,000	)	$	(60,000	)	$	(28,000	)
Gain (Loss) on revaluation of derivatives		–			796,000			(796,000	)
Loss from derivatives issued with debt greater than carrying value		–			(544,000	)		(544,000	)
Financing costs		(27,000	)		–			27,000
Amortization of debt discount		–			(234,000	)		(234,000	)
Gain on extinguishment		(29,000	)		300,000			(329,000	)
Income from equity investments		–			–			–
Total Other Income / (expenses)	$	(144,000	)	$	258,000		$	(402,000	)

Net Loss Applicable to Common Shares. We recorded a net loss of approximately $1,647,000 for the three months ended March 31, 2015, compared to a net loss of approximately $1,258,000 for the same three month period in 2014, which is an increase in our net loss of approximately $389,000 as compared to 2014. If you exclude the one-time settlement cost to Ironridge of $1,400,000 we had income of approximately $40,000, compared to a loss in the prior year of approximately $1,298,000 which is due to increased sales from Main Avenue. In first quarter 2015, sales increases were significantly offset by the increase in selling costs for commissions, an increase of $6,211,000. For first quarter 2015, we had income attributed to operations of approximately $158,000 (excluding Ironridge and Pharmanostics settlements) compared to a loss of approximately $214,000 in 2014, an increase of approximately $372,000 mainly due to our 2015 sales volume. Other expenses declined approximately $926,000 in 2015 as compared to 2014. We accrued a preferred stock dividend of $20,860 for the three months ended March 31, 2015 and 2014, respectively. We have a net loss available to common stockholders of approximately $1,681,000 and $1,234,000 for the three months ended March 31, 2015 and 2014, respectively. Our basic and diluted net loss per common share is ($0.01) and ($0.01) for 2015 and 2014, respectively.

Interest expense in for the three month period ended September 30, 2014 consisted of the following: a) interest on our convertible debt, which was approximately $40 and of this amount we made cash payments of $25,000 as compared to interest cash payments of approximately $113,000 in the same period in 2013, b) interest cost associated with a term loan of $500,001 which was approximately $6,000, as compared to approximately $10,000 in the same period in 2013, c) interest costs associated with our line of credit with a bank was $0, for both years and d) interest cost associated with our purchase order financing from a related party was approximately ($36,000), as compared to approximately $8,000 for the same period in 2013. Our total interest expense for the second quarter of 2014 was approximately $33,000 as compared to approximately $143,000 for the second quarter of 2013.27

~~The~~Liquidity ~~revaluation~~and ~~change~~Capital onResources derivative liability in third quarter of 2014 was no gain as compared to a loss of approximately $300,000 for the same period in 2013. The change is a result of decreased amount of variable convertible debt in third quarter 2014 as compare to the third quarter of 2013 when we increased our borrowing as result of using variable convertible debt.

With an extinguishment of debt from paying off convertible notes early, we incurred loss of approximately $29,000 in the third quarter of 2014, as compared to a gain of approximately $300,000 for the same period in 2013.Summary

~~Income~~Since our ~~taxes~~inception ~~(benefit)~~in 2008, we have had significant losses from operations. ~~Total income~~We ~~taxes~~have ~~expense~~funded ~~for~~our operations primarily through the ~~three~~private placement ~~month~~of ~~period~~equity ~~ended~~and ~~September~~debt 30securities. On March 31, ~~2014~~2015, we had approximately $161,000 in cash, approximately $3,815,000 in current assets and ~~2013~~approximately ~~was~~$6,171,000 ~~none~~in current liabilities for a negative working capital of approximately $2,356,000. On ~~For~~March ~~2014~~31, ~~and~~2015 ~~2013~~our accumulated deficit was approximately $20,105,000, In 2016, we ~~incurred~~expect ~~losses~~to have positive income from operations ~~that~~mainly ~~increased~~from Main Avenue operations and management believes after taking into consideration the current ~~deferred~~projections ~~tax~~for ~~benefit.~~2015 ~~However~~and 2016, ~~because~~that ~~the~~our ~~high~~cash ~~likelihood~~flow ~~that~~from weoperations will ~~not~~ be ~~able~~sufficient to ~~recover~~support our working capital requirements for the ~~deferred~~next twelve months. ~~tax~~Our ~~benefit~~current assets consisted of approximately $161,000 wein ~~recorded~~cash, aapproximately ~~valuation~~$2,189,000 ~~allowance~~in receivables, approximately $1,349,000 in inventory, and approximately $92,000 in prepaid expenses. Current liabilities at March 31, 2015 consist of: ~~100%~~accounts payable of approximately $3,628,000, mainly accrued commission payments of approximately $1,926,000; accounts receivable line of credit of approximately $624,000, term notes payable of approximately $478,000, reserve for charge backs of approximately $1,383,000, stock to be issued of approximately $40,000 and royalty payable of approximately $18,000.

~~Net Income (Loss) Applicable~~The tofollowing ~~Common~~table ~~Shares.~~summarizes Weour ~~recorded~~cash aflows ~~net~~from ~~income of approximately $1~~operating,~~517,000~~ ~~for the three month period ended September 30~~investing, ~~2014, compared~~and tofinancing aactivities ~~net loss of approximately $2,322,000~~ for the ~~same~~three ~~period~~months ofended ~~2013, which is an increase in our net income of approximately~~March $331,~~839,000~~ ~~for~~2015 the third quarter of 2014 as compared to the third quarter of 2013. This increase in net income is due to a) increased revenue due to our infusion of new businesses which increased our gross profit by approximately $11,561,000, as described above, b) this increase in the gross profit was offset significantly, by an increase in Selling, General and ~~Administrative cost of approximately $7,732,000, and c) an increases in other expenses of approximately $402,000 as described above. We accrued a preferred stock dividend of $20,860 in both~~ 2014 ~~and~~(rounded ~~2013, resulting in net income available~~ to ~~common~~nearest shareholders of $1,526,000 and a loss of $2,342,000 for the third quarter 2014 and 2013, respectively. Basic and diluted income per common share was $0.01 for third quarter 2014 and basic and diluted loss for the third quarter 2013, was ($0.03thousands).:

Total cash provided by (used in):	2015			2014			change
Operating activities	$	(530,000	)	$	(469,000	)	$	(61,000	)
Investing activities		(19,000	)		(227,000	)		208,000
Financing activities		256,000			928,000			(672,000	)
Change in cash	$	(293,000	)	$	232,000		$	(525,000	)

NINE MONTHS ENDED SEPTMEBER 30, 2014 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2013

	For the nine months ended September 30,								Change
	2014				2013
Product revenue-net	$	16,768,000		97%	$	151,000		33%	$	16,617,000
Revenue net, from contract packager		372,000		2%		285,000		63%		87,000
Commission fees		202,000		1%		16,000		4%		186,000
Net Revenue		17,342,000		100%		452,000		100%		16,890,000
Cost of Goods Sold		1,817,000		10%		424,000		94%		1,393,000
Gross Profit		15,525,000		90%		28,000		6%		15,497,000
Operating Costs and Expenses:
Selling and Marketing		12,597,000		72%		268,000		59%		(12,329,000	)
General and Administrative		1,365,000		8%		1,427,000		316%		62,000
Recovery of bad debt / reserve for bad debt		(245,000	)	-1%		1,184,000		262%		1,429,000
Share-base Comp issued for payment of services		1,082,000		6%		3,214,000		711%		2,132,000
Total Operating expenses		14,799,000		84%		6,093,000		1348%		(8,706,000	)
Operating Income (Loss)		726,000		5%		(6,065,000	)	-1342%		6,984,000
Other Income (expenses) :
Interest expense		(203,000	)	-1%		(287,000	)	-63%		82,000
Gain (Loss) on revaluation of derivatives		(512,000	)	-3%		(673,000	)	-149%		161,000
Loss from derivative issued with debt greater than carrying value		–		0%		(887,000	)	-196%		887,000
Financing costs		(851,000	)	-5%		–		0%		(851,000	)
Amortization of debt discount		(111,000	)	-1%		(447,000	)	-99%		336,000
Gain on extinguishment		555,000		3%		417,000		92%		138,000
Income from equity investments		1,000		0%		–		0%		1,000
Total Other Income / (expenses)		(1,121,000	)	-6%		(1,877,000	)	-415%		756,000
Loss before taxes		(395,000	)	-1%		(7,942,000	)	-1757%		7,547,000
Tax Expense		–		0%		–		0%		–
Net loss	$	(395,000	)	-1%	$	(7,942,000	)	-1757%	$	7,547,000

Revenue Net: The following table sets forth selected statement of operations data as data as a percentage of total revenue for the nine months period ended September 30, 2014 and 2013:

Products sold	2014			% to total		2013			% to total		Change
Prescription drug products –specialty pharmacy business	$	17,268,000			101%	$	184,000			4%	$	17,084,000
OTC & non-prescription products		–			0%		4,255,000			90%		(4,255,000	)
Revenue, from contract packager		10,726,000			63%		117,000			2%		10,609,000
Revenue, from pharmaceutical partner		1,853,000			11%		188,000			4%		1,665,000
Gross Sales		29,847,000			175%		4,744,000			100%		25,103,000
Discounts / Charge backs –specialty pharmacy business		(500,000	)		-2%		(150,000	)		-3%		(500,000	)
Adjustment to sales for contract packager and pharmaceutical partner		(12,005,000	)		-71%		(4,142,000	)		-347%		(7,863,000	)
Net Revenue	$	17,342,000				$	452,000				$	16,890,000

For the nine month period ended September 30, 2014, we generated net revenue of approximately $17,342,000 as compared to net revenue of approximately $452,000 for same nine month period in 2013, an increase of approximately $16,890,000. This increase in revenues versus the same nine month period a year ago is mainly due to prescription sales from our specialty pharmacy business for topical pain creams. The topical pain creams prescription business accounted for approximately $16,695,000 of the sales increase. In February 2014 we entered into a Business Management Agreement with Implex which had acquired MAVP for $550,000. MAVP is a specialty pharmacy which ships the topical pain creams. This was the first quarter in which we had significant sales of approximately $73,000 from PIMD Inc. Sales from the U.S. government contract through a contract packager which are recorded net of costs, increased approximately $87,000. Sales commission earned from WholesaleRx under which we earn an 8% or a 14% commission on the gross margin of generic pharmaceutical sales, was approximately $185,000 in 2014; there were no commissions earned in 2013.

In 2013 we had net sales of approximately $151,000, mainly to McKesson, but in the second quarter of 2013 we made a strategic business decision to exit sales to McKesson due to increase charge back costs. Consequently we have no sales in this area in 2014.

Gross Profit: Gross profit for the nine months period end September 30, 2014 was approximately $15,25,000, which was 90% of our net sales as compared to a gross profit of approximately $28,000 for the same period in 2013, an increase of approximately $15,497,000. The increase in our gross profit from 2014 to 2013 can be attributed to our management of the specialty pharmacy business and topical pain creams prescriptions, which generated significant sales in the first nine months of 2014 and also has a gross margin percentage that ranges from 85% to 91%.

Operating Expenses. For the nine month period ended September 30, 2014, our operating expenses consist of Selling, General and Administrative expenses (“SG&A”), excluding share-based compensation issued for services in the amount of approximately $1,082,000, total SG&A was $14,799,000. Selling expenses were approximately $12,597,000, and General and Administrative costs were approximately $2,201,000 for the nine month period ended September 30, 2014.

								( ) = unfavorable
Principal operating cost consist of :	2014				2013			$ Change
Human resources	$	830,000		6%	$	224,000	4%	$	(606,000	)
Sales Marketing		12,597,000		85%		268,000	4%		(12,329,000	)
Professional fees: Legal & accounting		376,000		3%		278,000	5%		(98,000	)
Consulting		167,000		1%		683,000	11%		516,000
Investor relations and Marketing		680,000		5%		2,864,000	47%		2,184,000
(Recovery of) bad debt or expense		(245,000	)	-2%		1,184,000	19%		1,429,000
General expense		393,000		3%		592,000	10%		199,000
Total Selling, General & Administrative		14,798,000		100%		6,093,000	100%		(8,705,000	)
Share-based compensation included in S,G & A above		1,082,000				3,214,000			2,132,000
Adjusted total Selling, General & Administrative	$	13,716,000			$	2,879,000		($	10,837,000	)

Selling. For the nine months ended September 30, 2014, selling costs increased approximately $12.3 million compared to the same period in 2013. A significant portion of this increase is due to sales commission paid on sales from our management of the specialty pharmacy business and prescription topical pain and skin creams business, which commission costs were approximately $11.3 million year to date. We pay a commission fee of approximately 40% to 65% on the sales revenue on prescriptions shipped in the quarter to our outside third party sales force. The other $1.2 million selling costs increase were for a special billing services, provided by a third party provider, which assist in getting insurance prescriptions approved and costs related to RapiMed® marketing.

General and Administrative. For the nine month period ended September 30, 2014, general and administrative expenses (“G&A”) decreased approximately $3.6 million to approximately $2.2 million as compared to approximately $5.8 million for the same nine months period in 2013 the majority of this decrease is due to share-based compensation which was issued for various services. If exclude the share-based compensation the G&A cost were down from the prior year, approximately $1.5 million in 2014 versus $2.6 million for same nine month period in 2013.. Included in G&A totals for the nine months ended September 30, 2014 are (i) non-cash stock compensation payments for services in the amount of $1.1 million and (ii) recovery of bad debt previously written off in 2013 in the amount of $245,000. The changes in G&A expenses were mainly a result of (a) increases in professional fees of approximately $98,000, (b) a decline of $1,1 million for write-off of a receivable and a deposit from our contract packager which occurred in 2013, (c) an increase of approximately $290,000 excluding stock back come paid for these services ( a decline of $2.2 million if include the stock base compensation) in investor relations and public relations costs which include costs associated with market awareness of our common stock, press releases, assistance in capital raising and fees for obtaining funding. If (d) an increase of approximately $606,000 in employee costs expenses which included salary, options granted and benefits and board of directors costs, the majority of this increase due to non-cash value for options granted to our CFO and CEO which were valued at approximately $437,000 (e) an increase in all other general expense of $199,000 which includes D&O insurance, telephone, computer expenses, and general overhead and other office-related expenses and (f) recovery of $245,000 for bad debt previously written off in 2013.

Share-based compensation issued for services: Due to our cash flow issues in 2014 and 2013, we issued common stock for payment of service to various vendors. The following table lists what area of General and Administrative expenses for which we issue our common stock:

	2014		2013
Human resources	$	488,000	$	13,000
Consulting		187,000		337,000
Investor relations and Marketing		407,000		2,864,000
Total Selling, General & Administrative	$	1,082,000	$	3,214,000

Total Other Expenses. Other expenses for the nine months ended September 30, 2014 decreased by approximately $754,000 to approximately $1,123,000 from approximately $1,877,000 for the same period in 2013.

The dollar changes for the nine month period ended September 30, 2014 versus the same period in 2013 for other expenses consists of the following:

	Nine Months Ended September 30,						( ) = unfavorable change
Other Income (expenses) :	2014			2013			$ Change
Interest expense	$	(203,000	)	$	(287,000	)	$	84,000
Loss on revaluation of derivatives		(512,000			(673,000			161,000
Loss from derivatives issued with debt greater than carrying value		–			(887,000	)		887,000
Financing costs		(851,000	)		–			(851,000	)
Amortization of debt discount		(111,000			(447,000	)		336,000
Gain on extinguishment		555,000			417,000			138,000
Income from equity investments		1,000			–			1,000
Total Other Income / (Expenses)	$	(1,121,000	)	$	(1,877,000		$	756,000

Interest expense in for the first nine months of 2014 consist of the following: a) interest on our convertible debts, which was approximately $80,000, and of this amount we made cash payments of $80,000 as compared to interest cash payments of approximately $165,000 in the same period in 2013, b) interest cost associated with a term loan of $500,001 which was approximately $21,000, as compared to approximately $31,000 in the same period in 2013, c) interest costs associated with our line of credit with a bank was approximately $146, as compared to $2,500 in the same period in 2013 and d) interest cost associated with our purchase order financing from a related party was approximately $62,000, as compared to approximately $44,000 for the same period in 2013 e) interest cost associated with short-term loans of $6,250, relating to MAVP’s business was approximately $42,000. Our total interest expense for the nine month period ended September 30, 2014 was approximately $205,000 as compared to approximately $287,000 for the nine month period ended September 30, 2013.

A significant portion of our financing costs for the nine month period ended September 30, 2014 was due to financing costs which were mainly the issuance of warrants for a settlement with GEM which was valued at $552,000 and accrued expense to financing fee of $165,000 for Ironridge and the issuance of common stock for payment of fees valued at $106,000.

The loss on derivative liability for the nine month period ended September 30, 2014 was approximately $512,000 as compared to $673,000 for the same period in 2013. The change is a result of decreased amount of variable convertible debt during the nine month period ended September 30, 2014 as compared to the same period in 2013 when we increased our borrowings using variable convertible debt.

With an extinguishment of debt from paying off convertible notes early, we incurred gains of approximately $555,000 for the nine month period ended September 30, 2014, as compared $417,000 for the same period in 2013.

For the nine month period ended September 30, 2013 we incurred a loss of approximately $887,000 because we issued common stock with a value greater than the value associated with debt, but in the same period of 2014 we had no loss from such debt issues.

Income taxes (benefit). Total income taxes expense for the nine month periods ended September 30, 2014 and 2013 was none. For 2014 and 2013 we incurred losses that increased the current deferred tax benefit. However, because the high likelihood that we will not be able to recover the deferred tax benefit, we recorded a valuation allowance of 100%.

Net Loss Applicable to Common Shares. We recorded a net loss of approximately $0.4 million for the nine month period ended September 30, 2014, compared to a net loss of approximately $7.9 million for the same period in 2013, which is a decrease in our net loss of approximately $7.5 million for the nine month period ended September 30, 2014 as compared to the nine month period ended September 30, 2013. This decrease in net loss is due to a) increased sales due to our infusion of new businesses which increased our gross profit by approximately $15.5 million, as described above, b) sales increases were significantly offset by the increase in selling costs for commissions, an increase of 12.3 million and c) significant cost decreases in other expenses of approximately $754,000 as described above. We accrued a preferred stock dividend of $ 62,580 for the nine month period ended September 30, 2014 and 2013, resulting in a loss of income available to common shareholders of approximately $343,000 and $8,004,000 for the nine month period ended September 30, 2014 and 2013, respectively. Basic and diluted loss per common share were $0.00 and $0.13 for the nine month period ended September 30, 2014 and 2013, respectively.

Liquidity and Capital Resources Summary

Since our inception in 2008, we have had significant losses from operations. With the acquisition of MAVP, management foresees that trend ending. Beginning in this quarter we generated approximately $1.5 million in income from our operations. We have funded our operations primarily through the private placement of equity and debt securities. At September 30, 2014, we had approximately $1.2 million in cash, approximately $6.4 million in current assets and approximately $4.6 million in current liabilities for a working capital of approximately $1.8 million. For the three months period ending September 30, 2014 we earned approximately $1.5 million in operating income and we expect to continue to have positive income from our from operations. At September 30, 2014 our accumulated deficit is approximately $14.0 million. After taking into consideration our 2014 interim results to date and current projections for the remainder of 2014, management believes that our cash flow from operations will be sufficient to support the working capital requirements. Our cash expenditures are projected to be approximately $3.6 million a month on a continuing operating basis. Included in these cash expenditures are approximately $3.1 million for commissions and approximately $13,000 a month in interest costs. Our current assets consisted of approximately $1.2 million in cash, approximately $4.4 million in receivables, approximately $.7 million inventory, approximately $.1 million in prepaid expenses and $4,000 for intangible assets. Current liabilities at September 30, 2014 consist of accounts payable of approximately $2.5 million, purchase order financing of approximately $1.0 million, current portion of long term debt from related party of approximately $.1 million, term notes payable of approximately $0.4 million, deferred revenue of approximately $.4 million and royalty payable of approximately $0.1 million.

Our ability to obtain regulatory approval and launch RapiMed® in the United States is highly dependent upon management’s ability to (i) equal or exceed the planned operating cash flows, (ii) maintain continued availability on the existing line of credit and (iii) obtain additional financing or capital to fund and reduce our debt service obligations coming due and our operating expenses in addition to the normal regulatory and marketing risks expected. Although we have successfully obtained various funding and financing in the past, future financing and funding options may be challenging in the current environment.

We completed the development of the RapiMed® 80 mg and 160 mg tablets during the period. In the second quarter of 2014, we signed a manufacturing and supply agreement with a generic manufacturer for the production of the 80 mg and 160 mg RapiMed® tablets for marketing, sale, and distribution outside of the United States. In January 2014, we identified Global Pharma to license, market, and distribute RapiMed® outside of the United States. Our initial target market is in China. On March 10, 2014, we received a $200,000 purchase order for RapiMed® 80mg tablets from Global Pharma for the Hong Kong market. As of November 12, 2014, no shipments have been made and we do not expect to make any shipments until sometime in the fourth quarter of 2014.

During the first six months of 2014 we supplemented our liquidity needs primarily from financing activities. Our revenue did not cover our operational costs and our debt requirements. But beginning in fiscal third quarter 2014 our sales were able to cover our operational costs. During 2014, we raised approximately $1,844,000 in cash through the following: we raised approximately $1,337,000 from the sale of common stock and we received approximately $392,000 and $115,000 from proceeds from the sale of notes payable and convertible notes payable, respectively. Approximately $877,000 of these funds were used for payments on convertible notes payable, payments on our purchase order financing, and payments on note payable to a related party.

The following table summarizes our cash flows from operating investing and financing activities for the nine month period ended September 30, 2014 and 2013:

	2014			2013			Change
Total cash provided by (used in):
Operating activities	$	223,000		$	(1,425,000	)	$	1,648,000
Investing activities		(236,000	)		–			(236,000	)
Financing activities		1,166,000			1,439,000			(273,000	)
Increase in cash	$	1,153,000		$	14,000		$	1,139,000

Operating Activities

Net cash ~~provided by~~used in operating activities was approximately $~~223~~530,000 for ~~the~~ first ~~nine~~quarter ~~months~~2015 ~~of 2014~~ as compared to cash used in operating activities of approximately $1469,~~425,~~000 for ~~the~~first ~~same~~quarter ~~period in 2013~~2014, an increase in cash ~~provided~~used by operations of approximately $1461,~~648,~~000. The increase in the cash ~~provide~~used ~~from~~in ~~operation~~operations for ~~the~~2015 ~~2014~~ as compared to ~~the~~2014 ~~same period in 2013~~ is primarily from the significant increase in ~~revenue~~selling expenses ($~~16.7 million~~5,924,000) mainly ~~from~~for ~~MAVP.~~commission ~~Our~~expenses ~~issuance~~which ofoffset ~~common~~increases ~~stock~~ in ~~payment for services had a significant impact on reducing~~ our ~~use~~revenues ~~of cash~~ from ~~operating~~Main ~~activities in both years~~Avenue.

Investing Activities

InInvesting activities ~~nine~~for ~~month~~first ~~period ended~~quarter ~~September~~2015 30was for the purchase of property and equipment of approximately $19,000 ~~2014~~compared to $52,000 in first quarter 2014. In first quarter 2014 we made down payment of $175,000 for the ~~following~~acquisition ~~investments:~~of Main Avenue.

The payment of the purchase price of $550,000 for the acquisition of MAVP was made as follows: The initial installment payment of $475,000 was made via a $175,000 payment directly by us on Implex’s behalf and $300,000 in borrowings obtained by Implex (which consisted of a, $250,000 loan from a current stockholder and $50,000 loan from a related party). This $300,000 loan is considered non-cash a transaction since the loan payment was paid on Implex Corporation’s behalf. The $75,000 installment payment was in second quarter 2014. MAVP is specialty pharmacy which is license to prepare and fill prescription via a topical cream format versus pill format. MAVP was basically a dormant business and had no significant sales in 2014, but we acquired it for its Pharmacist and license. Since we will have significant controlling interest via related party relationships and will be the primary beneficiary, we will consolidate financial activities of MAVP. Our PIMD subsidiary has made a $70,000 deposit for a 100% ownership in a start-up limited liability company based in Florida named Pharma-Net America LLC (“Pharma-Net”). Pharma-Net’s business purpose is to provide doctor’s offices with special software that would act as a platform/link/network with the PBMs and doctors. It will provide 3rd party access for doctors, payers (insurance companies) and pharmacies. The agreement and final terms have not been signed or finalized by either party as of August 14, 2014. It was determined that this project was not feasible and the $70,000 was expensed in September of 2014.

During the nine months ended September 30, 2014, we purchased approximately $61,000 of equipment used for operations.

Financing Activities

Net cash provided by financing activities was approximately $1256,~~166,~~000 for the first ~~nine~~quarter ~~months~~2015 ~~of fiscal year 2014~~ compared to approximately $1928,~~439,~~000 ~~for the same period~~ in ~~2013~~first quarter 2014. Financing activities ~~for~~in ~~nine~~first ~~month~~quarter ~~period ended September 30~~2015, ~~2014~~consist ~~consisted~~ of the following: we (a) ~~sold~~payment ~~shares~~ of ~~common~~ ~~stock~~approximately ~~for gross proceeds of~~ $132,~~675,~~000~~, (b) sold convertible notes payables for gross proceeds of $115,000, (c) received~~ ~~$92,000~~to ~~for~~ a ~~$100,000,~~related ~~nine~~party ~~month~~for ~~note~~amounts ~~payable~~due ~~which~~under ~~is being paid daily, (d) paid down the balance on convertible notes in the amount of $345,000, (e) paid down $60,000 on~~ a ~~four~~five year term loan, (fb) ~~paid~~received ~~off~~proceeds ~~the year-end balance under our line~~ of ~~credit in the amount of~~ $9941,000 ~~and~~from ~~(g)~~ a ~~distribution~~related ofparty ~~equity~~for ina ~~our PIMD subsidiary of approximately $114,000 and h) new one year~~short-term note ~~borrowings~~payable ofand ~~$325,000~~ (~~of which $75,000 from related party~~c). ~~Non-cash~~net ~~transactions~~proceeds ~~include the borrowing by Implex~~ of ~~$250,000 and~~approximately $50247,000 ~~for~~under aaccounts ~~term~~receivable ofline ~~one year from a stockholder and a related party, respectively, which are included in the condensed consolidated balance sheet as~~ of ~~September 30, 2014~~credit.

Recent Financial Events

~~During~~From January ~~the~~1, ~~nine months~~2015, ~~period~~to ~~ended~~the ~~September~~date ~~30,~~of ~~2014,~~this ~~the~~filing ~~Company~~we issued 271,~~299~~165,~~202~~303 restricted shares of our common stock ~~for~~to ~~cash~~non-employees ~~proceeds~~for ~~of $1,489,675~~services inrendered ~~various~~during ~~private subscription agreements~~2015. ~~Subscription~~These ~~price~~services ~~issued~~were invalued aat ~~range from~~ $0231,604.~~05 to $.0633~~

~~During~~From April ~~the~~1, ~~nine months~~2015, ~~period~~to ~~ended~~the ~~September~~date ~~30,~~of ~~2014,~~this ~~the~~filing ~~Company~~we issued 4425,~~677,614~~000 restricted shares of ~~its~~our common stock toin ~~non-employees~~connection ~~for~~with payments ~~services~~provided ~~rendered~~to members of the Board of Directors and employees during ~~2014~~2015. These services were valued at $~~566~~38,~~465 and the Company charged its operations in 2014~~210.

During the nine month period ended September 30, 2014, we issued 88,000 restricted shares of our common stock in connection with payments provided to members of the board of directors during 2014. We charged our operations $9,440 in 2014.28

~~During the nine~~Commitments ~~month~~and period ended September 30, 2014, we issued 1,740,550 restricted shares of our common stock in connection with financing costs during 2014. We charged to financing cost in the statement of operations $224,022 in 2014.Concentrations

~~Pursuant to the~~We ~~settlement~~entered ~~agreement~~into ~~with~~two ~~GEM~~long-term ~~Global~~leases ~~Yield~~for ~~Fund~~rented ~~Limited~~space. ~~(as~~On ~~described~~December ~~below)~~1, (2014, Main Avenue entered into a) wesecond ~~sold~~addendum ~~887~~for additional space in Clifton,~~280~~ ~~shares~~N.J. offor ~~our~~store/production ~~common~~facility ~~stock~~and tooffice space. This addendum revised prior terms for leases entered into ~~GEM~~by Main Avenue in April 2014 and October 2014. The lease expires on November 30, 2019. The monthly rent is $5,432, escalating by 3% annually, for atotal ~~purchase~~minimum ~~price~~payments over the life of the lease of $~~125~~369,~~381~~065. In November 2013, ~~and~~PIMD ~~(b)~~entered ~~GEM~~into ~~concurrently~~a ~~assigned~~25 tomonth operating ~~Steve~~lease ~~Urbanski~~for ~~the~~a ~~right~~distribution tofacility ~~receive~~in ~~the~~Doral, ~~887~~Florida. The lease began January 1,~~280~~ ~~shares~~2014 and expired February 14, 2016. ofThe ~~our~~monthly ~~common~~rent ~~stock~~was ~~upon~~$4,585 for the ~~receipt~~first bythirteen usmonths ofand $4,724 for the ~~purchase~~last ~~price~~twelve ~~(net~~months. The total minimum payments over the life of the lease was $15111,~~211~~714. ~~which~~In ~~was~~February ~~paid~~2016, toPIMD ~~GEM's~~entered ~~legal~~into ~~counsel).~~a Wenew ~~issued~~36 month lease for a distribution facility in Pooler, ~~the~~George. ~~887~~This new lease begins March 1,~~280~~ ~~shares~~2016 toand Mrexpires February 28, 2019. ~~Urbanski~~The onmonthly ~~January~~rent 22is $3,700 ~~2014~~for the first twelve months, $3,750 for the next twelve months and $3,800 for the last twelve months.

~~During~~In connection ~~the~~with ~~nine month~~various ~~period~~notes ~~ended~~payable ~~September~~that ~~30,~~we ~~2014~~have entered into, we ~~issued~~are ~~756,400~~obligated ~~restricted~~to ~~shares~~pay the holders of ~~our~~these ~~common~~notes ~~stock~~royalty fees, see Note 9 to ~~nonemployees~~our ~~for~~condensed ~~payment~~consolidated ~~of stock~~financial tostatements beincluded ~~issued~~in this Quarterly Report for ~~cash~~details ~~received~~concerning inroyalty fees ~~2013~~and payments.

~~During~~On June ~~the~~30, ~~nine month~~2015, ~~period~~our ~~ended~~then ~~September~~Chief ~~30,~~Executive ~~2014~~Officer, wePresident ~~issued~~and ~~921~~Secretary,~~203~~ ~~restricted~~Robert ~~shares~~Schneiderman, ofresigned ~~our~~all ~~common~~positions ~~stock~~he held with us. See Note 17 to ~~non-employees~~our ~~for~~condensed ~~payment~~consolidated ~~of royalties.~~financial ~~The~~statements ~~payment~~included ofin ~~royalties~~this ~~was~~Quarterly ~~valued~~Report atfor ~~$106,782~~details on the settlement agreement.

~~During the nine~~See ~~month~~Note ~~period~~17 ~~ended~~to ~~September~~our ~~30,~~condensed ~~2014,~~consolidated wefinancial ~~issued~~statements ~~9,009,937~~included ~~shares~~in ofthis ~~our~~Quarterly ~~common~~Report ~~stock~~ for ~~the~~details ~~conversion~~concerning ofour ~~approximately $623,446~~Recapitalization/Repurchase ofplan ~~principal~~for ofthe ~~our~~Series ~~convertible~~A ~~notes~~Convertible ~~payable.~~Preferred ~~These shares have a fair value of $1,249,287~~Stock.

37During the three months ended March 31, 2015, and 2014, we purchased product from four suppliers. A disruption in the availability of raw materials from our suppliers could cause a possible loss of sales, which could affect operating results adversely.

~~On April 21, 2014,~~For ~~250,000~~the ~~common~~three ~~stock~~months ~~shares~~ended ~~were~~March ~~returned~~31, to2015, usno bycustomer ~~Sean~~accounted R.for ~~Fitzgibbons~~more ~~and~~than ~~were~~10% ~~cancelled~~of bynet ~~us.~~revenues ~~These~~but ~~shares~~two ~~were~~third-party ~~issued~~payors ~~in 2013~~account ~~and~~for ~~were~~approximately ~~valued~~78% atof ~~$32,500~~our net revenues. WeShould ~~reversed~~our ~~the~~contract ~~expense~~be ~~that~~cancelled ~~was~~with ~~recorded~~these tothird-party ~~the~~payors ~~statement~~it ofwould ~~operation~~have ina ~~2013~~significant impact ~~and~~on ~~the~~our ~~second~~future ~~quarter of~~net ~~2014~~revenues.

~~From~~On March ~~October 1~~4, ~~2014~~ ~~to November 12 2014~~2015, weCVS/Caremark ~~issued~~notified ~~439,333~~Main ~~shares~~Avenue ofthat ~~our~~it ~~common~~was ~~stock~~terminating ~~for~~ the ~~following~~provider ~~transactions:~~agreement Wewith ~~issued~~Main a)Avenue. ~~119,000~~No ~~common stock~~basis ~~shares~~ for ~~payment of royalty expense valued at $10,710, b) 238,333 common stock shares to consultants under a consulting~~ ~~agreements~~the ~~with~~termination ~~regard~~was toprovided. ~~investor~~During ~~relations~~the ~~services,~~three ~~which~~months ~~were~~ended ~~valued~~March ~~at $21~~31,~~450,~~ ~~c) 62~~2015,~~000~~ ~~common~~CVS/Caremark ~~stock~~represented ~~shares to various~~approximately ~~employees~~26% ~~for services provided value at $5,580, and d) 20,000 shares were issued to members~~ of ~~the~~our ~~Board~~net ~~of Directors for services provided, valued at $1,800~~revenues.

~~Commitments~~As of March 31, 2015 and December 31, 2014 we had two insurance third-party payors representing 87% of our accounts receivable.

~~The holders of a~~See ~~$250,000~~PART ~~convertible note which was converted into 2~~II,~~000,000~~ ~~shares~~Item of1 ~~our common stock on March 12, 2012, are entitled to a 4% royalty from the sales~~ of ~~our~~this ~~orally~~document ~~disintegrating~~for ~~rapidly~~detail ~~dissolving~~concerning ~~80mg~~Ironridge ~~and~~Global ~~160mg~~IV, ~~pain~~LTD ~~relief~~legal ~~tablets.~~Action ~~The royalty payments associated with this agreement have no minimum guarantee amounts~~ and ~~royalty~~Pharmanostics ~~payments~~legal ~~will end only if RapiMed® is sold to a third party~~actions. ~~There have been no shipments through September 30, 2014, from this royalty.~~

The holder of a $320,000 note payable are entitled to a to 1.8% royalty payment on the first $10 million of sales of a generic prescription drug under distribution contracts with Federal government agencies and 0.09% on the next $15 million of such sales. Payments for royalties will be paid quarterly. During fiscal year 2013, we issued the holder of this note 1,114,672 shares of our common stock for payment of royalty expense. In addition, a holder of a $50,000 note payable, a related party, is entitled to a 0.9% on the first $25 million of sales of a generic prescription drug under distribution contracts with Federal government agencies. During the nine months September 30, 2014, we also made cash payments for royalty expense associated with one of the notes in the amount of $175,572 and issued 757,776 shares of our common stock which have a fair value of $87,819 for payment of royalty expense and recorded a royalty expense of $263,391 to the statement of operation for the nine months period ended September 30, 2014. For the nine months ended September 30, 2013, we issued 513,834 shares of common stock as payment for the royalty and we recorded an expense of $213,945.

On November 4, 2013, we entered into a securities purchase agreement with Seaside 88, L.P. ("Seaside") pursuant to which we agreed to sell, and Seaside agreed to purchase, up to seven million (7,000,000) restricted shares of our common stock in one or more closings. The number of shares to be purchased at each closing will be equal to ten percent (10%) of the aggregate trading volume of shares of our common stock during normal trading hours for the 20 consecutive trading days prior to each closing. The purchase price for the shares to be purchased by Seaside at each closing will be equal to sixty percent (60%) of the average of “daily average stock price” for the five (5) trading days preceding the date of the closing. The “daily average stock price” for a trading day is equal to the quotient of (a) the sum of the highest and lowest sale price for the trading day divided by (b) two.

We had an initial closing under the securities purchase agreement on November 4, 2013, at which we sold to Seaside 1,152,514 restricted shares of our common stock for gross proceeds of $200,537, of which $7,500 was used to pay the legal fees for Seaside and $19,303 was paid for a finder’s fee. We also had closings on (i) December 4, 2013, at which we sold to Seaside 841,426 restricted shares of common stock for gross proceeds of $90,926 of which $2,500 was used to pay the legal fees for Seaside, (ii) January 6, 2014, at which we sold to Seaside 928,670 restricted shares of common stock for gross proceeds of $69,093 of which $2,500 was used to pay the legal fees for Seaside, (iii) February 4, 2014, at which we sold to Seaside 1,342,070 restricted shares of common stock for gross proceeds of $142,527, (iv) April 8, 2014, at which we sold to Seaside 925,153 restricted shares of common stock for gross proceeds of $61,060 and (v) May 5, 2014, at which we sold to Seaside 781,840 restricted shares of common stock for gross proceeds of $48,317.

On February 24, 2014, we issued 1,615,550 restricted shares of common stock to Ironridge Global Partners LLC pursuant to an adjustment provision based on the trading price of our common stock which provision was contained in a stipulation contained in the court order issued by the California Superior Court for the County of Los Angeles (“California State Court”) on November 8, 2013. These shares were issued as part of the settlement of bona fide claims against us which were purchased by Ironridge from our various creditors.

On October 15, 2013 the Board of Directors approved revise compensation for the CEO, Robert Schneiderman and the CFO, Jeffrey Andrews, contingent on our raising $4 million via equity, debt or a combination of both. Contingent on raising the $4 million compensation would be as follows: CEO annual salary $200,000, CFO annual salary $192,000, both would receive 50,000 options quarterly at 120% of market price on the date granted with a one year vesting period. As of November 13, 2014, the $4 million raise has not been reached and consequently these conditions are not effective.

On October 15, 2013 the Board of Directors approved additional compensation to Board members in the form of issuance of stock options. Board members shall be granted 100,000 stock options for each year served commencing in 2012. The chairman of the Board shall be granted 135,000 stock options for each year served. The Effective Date is October 7, 2013, options vest immediately and option price is 110% of the market price on the grant date. Additionally for each board meeting 10,000 options will be granted and for each committee meeting 5,000 options will be granted.

We have entered into two long-term leases for rented space. In April 2014, MAVP entered into a 36 month operating lease for store/production facility in Clifton NJ. The lease expires on March 31, 2016, the monthly rent is $2,232 for the first 12 months with a 3% increase in year 2 and another 3% increase in year 3, for a total minimum payment over the life of the lease of $82,774. In October 2014 MAVP also leased additional space for a monthly rental fee of $1,000 per month, this lease expires September 30, 2015. In November, 2013 PIMD entered into a 25 month operating lease for a distribution facility in Doral, Florida. The lease begins January 1, 2014 and expires January 31, 2016, monthly rent is $4,585 for the first thirteen months and $4,724 for the last twelve months. Payments did not begin until April 2014, the total minimum payments over the life of the lease is $111,714.

During the nine month period ended September 30, 2014, we purchased product from three suppliers, and during the first and second quarters of 2013 we purchased 100% of our product packaging from our Contract Packager. A disruption in the availability of product packaging from our suppliers could cause a possible loss of sales, which could affect operating results adversely.

For the three month period ended June 30, 2013, we derived approximately $91,600 or 100% of our revenue from one customer. For the six month period ended June 30, 2013, we derived revenue from two customers with one customer accounting for 60% of our revenue. For the three and nine months period ended September 30, 2014, no customer accounted for more than 10% of revenue.

As of September 30, 2014, we had one customer representing 100% of our accounts receivable-related party, and numerous customers with no more than 10% for accounts receivable-trade. As of December 31, 2013, we had one customer representing 100% of our accounts receivable-related party, and no customers in our accounts receivable-trade.

IRONRIDGE GLOBAL IV, LTD – LEGAL ACTION

As previously disclosed by us in a Current Report on Form 8-K filed with the Securities and Exchange commission on November 19, 2013, the we issued to Ironridge Global IV, Ltd. (“Ironridge”) 8,690,000 shares of our common stock in settlement of bona fide claims against us which were purchased by Ironridge from our various creditors (the “Claim Amount”). The shares issued to Ironridge were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Section 3(a)(10) of the Securities Act. Pursuant to the court order issued by the California Superior Court for the County of Los Angeles (“California State Court”) on November 8, 2013, our common shares were deemed to be issued in settlement of the claims (subject to certain adjustments based on the future trading value of the stock) when delivered to Ironridge. The number of shares issued to Ironridge is subject to an adjustment based on the trading price of our common shares such that the value of the shares is sufficient to cover the Claim Amount, a 10% agent fee amount and Ironridge’s reasonable legal fees and expenses ( the “Final Amount”), which Final Amount is equal to $766,238.29.

On February 10, 2014, Ironridge made a request for, and we issued, an additional 1,615,550 common shares as a result of the adjustment provisions under a Stipulation in the court order issued by the California State Court.

On April 4, 2014, Ironridge requested even more shares pursuant to the adjustment provision under the Stipulation in the court order issued by the California State Court. This time, their request was for an additional 1,646,550 shares of our common stock. We declined to issue these additional shares because Ironridge had already received, to that date, approximately 10,305,550 shares with a market value of approximately $1.2 million (based on the closing stock price on May 6, 2012), in settlement of a Final Amount of $766,238.29. The shares issued to Ironridge represent a premium of 48% to the Final Amount.

On May 6, 2014, Ironridge submitted an ex parte application to the California State Court to compel us to issue the 1,646,550 common shares requested on April 4, 2014, and the California State Court without a hearing entered an order to compel us to issue the additional shares. On the same day, we filed a notice of appeal of the California State Court’s order. The appeal automatically stays enforcement of the California State Court’s May 6th order.

We believe that Ironridge is not entitled to additional shares and plan to vigorously pursue an appeal, and reversal, of the California State Court order.

We accrued the potential issuance of these shares and have expensed $164,655 to financing cost in the financial statement as of September 30, 2014, as well as, reserving 1,646,550 shares of our common stock.

Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements.

39Critical Accounting Policies

For the three months ended March 31, 2015, there were no material changes to the “Critical Accounting Policies” discussed in Part II, Item 7 (Management’s Discussion and ~~estimates~~Analysis of Financial Condition and Results of Operations) of our 2014 10-K.

~~Principles~~Recent ofAccounting ~~Consolidation~~Pronouncements - The condensed consolidated financial statements include our accounts and all of the accounts of our subsidiaries in which a controlling interest is maintained. All significant inter-company accounts and transactions have been eliminated in consolidation. We would be considered the primary beneficiary of the Variable Interest Entity (“VIE”) as it has both of the following characteristics: (a) the power to direct the activities of the VIE that most significantly impacts the VIE’s economic performance, and (b) the obligation to absorb losses of the VIA that could potentially be significant. Our ownership is less than 100%, the outside stockholders’ interests are shown as non-controlling interest. Investments in entities in which we do not have a controlling financial interest, but over which we have significant influence are accounted for using the equity method. Investments in which we do not have the ability to exercise significant influence are accounted for using the cost method. For those consolidated subsidiaries where our equity investment is classified in “Equity Investments” on the balance sheet.

~~Use~~See Note of3 ~~Estimates -~~to ~~The~~our ~~preparation~~condensed ofconsolidated financial statements inincluded ~~conformity with accounting principles generally accepted~~ in ~~the~~this ~~United~~Quarterly States 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 balance sheet and reported amounts of revenues and expenses during the reporting periodReport. ~~Actual results could differ from those estimates.~~

Revenue Recognition - Product revenue associated with our pharmaceutical distribution services and our specialty pharmacy business is recognized when product is shipped from a contract packager or our pharmacy to our customers’ warehouses or directly to a patient, and is adjusted for anticipated charge backs from our customers which include inventory credits, discounts or volume incentives. These charge back costs are received monthly from our customers’ and the sales revenue and accounts receivables are reduced accordingly based on historical experience, customer contract programs, product pricing trends and the mix of products shipped.29

~~Purchase orders~~ITEM ~~from our customers generate our shipments, provide persuasive evidence that an arrangement exists and that the pricing is determinable~~3. ~~The~~ ~~credit~~QUANTITATIVE ~~worthiness~~AND ofQUALITATIVE ~~our~~DISCLOSURE ~~customers~~ABOUT ~~assures~~MARKET ~~that collectability is reasonably assured.~~RISK

Our ~~specialty pharmacy revenue is not recognized until the patient receives the filled prescription. We will prepare and~~ ~~fill~~market arisk ~~prescription that~~ has ~~been~~not ~~approved~~changed bymaterially anrisks ~~insurance~~disclosed ~~provider, ship the filled prescription to the patient and upon confirmation of receipt of the prescription by patient will recognize revenue. Any prescription~~ in ~~which~~Item ~~patient~~7A ~~has not received product but we may have been reimbursed by the insurance provider is recorded at deferred revenue. As~~ of ~~September 30,~~our ~~2014,~~Annual ~~deferred balance is $418,540~~Report.

We also recognize revenue from our contract packager on a net basis according to ASC 605-45, Revenue Recognition: Principal Agent Considerations. Since we are not deemed to be the principal in these sales transactions we do not report the transaction on a gross basis in our statement of operations. These sales transactions relate to a contract that a Contract Packager has obtained with a government agency. The revenue is reported in a separate line in the statement of operations as “Product revenues net from Contract Packager”, and the gross sales are reduced by the cost of sales fees from our Contract Packager.

Commission fees are recognized when earned on shipments of generic pharmaceutical and OTC products by WholesaleRx which is DEA and State-licensed to store and distribute controlled substances. Per our amended agreement we would earn a 14% commission fee on the gross profit (sales less cost of goods sold, freight in and credits and allowances) of products shipped to independent pharmacies.

Accounts Receivable Trade, net - Accounts receivable are stated at estimated net realizable value. These receivable are from MAVP, which we manage under an agreement with the sole shareholder, Implex Corporation, and we only ship prescription products to patients upon payment approval by the patients’ insurance company, payments are usually received with 30 days of product being shipped. As of September 30, 2014, a $510,025 allowance for insurance company deductions and chargebacks recorded and December 31, 2013, no allowance for doubtful accounts was deemed necessary.

Intangible assets - We amortize the cost of intangibles over their useful lives unless such lives are deemed indefinite. Amortizable intangible assets are tested for impairment based on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values. We review intangible assets for impairment annually or when events or circumstances indicate that their carrying amount may not be recoverable. Intangible assets with indefinite lives are not amortized; however, they are tested annually for impairment and written down to fair value as required.

Impairment of Long-Lived Assets

We review the carrying values of property and equipment and long-lived intangible assets for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. Such events or circumstances include the following:

· significant declines in an asset’s market price; · significant deterioration in an asset’s physical condition, significant changes in the nature or extent of an asset’s use or operation; · significant adverse changes in the business climate that could impact an asset’s value, including adverse actions or assessments by regulators; · accumulation of costs significantly in excess of original expectations related to the acquisition or construction of an asset; · current-period operating or cash flow losses combined with a history of such losses or a forecast that demonstrates continuing losses associated with an asset’s use; and · expectation is that it is more likely than not that an asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.

If impairment indicators are present, we determine whether an impairment loss should be recognized by testing the applicable asset or asset group’s carrying value for recoverability. This test requires long-lived assets to be grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, the determination of which requires judgment. We estimate the undiscounted future cash flows expected to be generated from the use and eventual disposal of the assets and compare that estimate to the respective carrying values in order to determine if such carrying values are recoverable. This assessment requires the exercise of judgment in assessing the future use of and projected value to be derived from the eventual disposal of the assets to be held and used. If the carrying value of the assets is not recoverable, then we record a loss for the difference between the assets’ fair value and respective carrying value. We believe our current assumptions and estimates are reasonable and appropriate. Unanticipated events and changes in market conditions, however, could affect such estimates, resulting in the need for an impairment charge in future periods

Receivable - Contract Packager - We have receivables from Marlex Pharmaceuticals, Inc. (“Contract Packager”), in the amount of $1.201,231 and $1,088,598, at September 30, 2014 and December 31, 2013, respectively. This receivable consists of revenue earned for U.S. government sales and monthly payments due under the settlement agreement entered into on September 6, 2013. Under the September 6, 2013 settlement agreement, the Company is entitled to recover $408,150 of these receivables of which $362,524 has been recovered as of September 30, 2014. Consequently, the reserved amount has been offset for this recovery.

Receivable - related party - WholesaleRx, the pharmaceutical aggregator which is DEA and State-licensed to store and distribute controlled substances in which we have a 14% investment, is an entity from which we recognize Commission fees when earned on shipments of generic pharmaceutical and OTC products. The receivable consists of PO financing, and revenue earned for commission sales agreement entered into in November 1, 2013 (as subsequently amended by oral agreements). In August 2014, WholesaleRx stopped providing the financial information for calculating the commission fees earned and stopped making payments on the open receivables. Subsequent to September 30, 2014, the Company filed a legal action (see footnote 7 for additional details) and the Company does not believe a reserve on this receivable is warranted at September 30, 2014.

Fair Value Measurements - We follow the provision of ASC No. 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 clarifies that fair value is an estimate of the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date) and provides for use of a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 3: Unobservable inputs reflect the assumptions that we develop based on available information about what market participants would use in valuing the asset or liability.

We use judgment in determining the fair value of assets and liabilities, and level 3 assets and liabilities involve greater judgment than level 1 and level 2 assets and liabilities.

The carrying values of accounts receivable, inventory, accounts payable and accrued expenses, royalty payable, and notes payable approximate their fair values due to their short-term maturities. It was impracticable to estimate the fair value of our investments and long-term debt (see notes 7 and 12 for more information). The carrying value of our long-term debt approximates fair value due to the borrowing rates currently available to us for loans with similar terms. See note 12 for fair value of derivative liabilities.

Stock-Based Compensation - Compensation expense is recognized for the fair value of all share-based payments issued to employees. As of September 30, 2014 and December 31, 2013, we issued 10,450,000 and 5,015,000, respectively for employee stock options that would require calculating the fair value using a pricing model such as the Black-Scholes pricing model.

For non-employees, stock grants issued for services are valued at either the invoiced or contracted value of services provided, or the fair value of stock at the date the agreement is reached, whichever is more readily determinable. For stock options and warrants granted to non-employees, the fair value at the grant date is used to value the expense if the options or warrants are for future services, they are revalued at each reporting period unless there is a significant incentive for non-performance. In calculating the estimated fair value of its stock options and warrants, the Company used a Black-Scholes pricing model which requires the consideration of the following seven variables for purposes of estimating fair value:

· the stock option or warrant exercise price, · the expected term of the option or warrant, · the grant date fair value of our common stock, which is issuable upon exercise of the option or warrant, · the expected volatility of our common stock, · expected dividends on our common stock (although we do not anticipate paying dividends in the foreseeable future), · the risk free interest rate for the expected option or warrant term, and · the expected forfeiture rate.

Earnings (Loss) Per Share - Basic net income (loss) per common share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock warrants, options, convertible notes payable and Series A convertible preferred shares. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive. As of September 30, 2014, common stock equivalents consisted of preferred stock convertible into 5,980,504 shares of common stock, warrants convertible into 5,228,572 shares, options convertible into 10,450,000 shares and notes payable convertible into 3,740,800 shares of common stock

ITEM 4. CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures. Our management, with the participation of our principal executive officer (chief executive officer) and principal financial officer (chief financial officer), conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of ~~September~~March 3031, ~~2014~~2015 (the “Evaluation Date”). Based on this evaluation, our chief executive officer and chief financial officer concluded that as of the Evaluation Date, our disclosure controls and procedures are ineffective.

(b) Internal Controls Over Financial Reporting. There was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

4230

PART II – - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As previously disclosed by us in a Current Report on Form 8-K filed with the Securities and Exchange ~~commission~~Commission on November 19, 2013, the we issued to Ironridge Global IV, Ltd. (“Ironridge”) 8,690,000 shares of our common stock in settlement of bona fide claims against us which were purchased by Ironridge from our various creditors (the “Claim Amount”). The shares issued to Ironridge were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Section 3(a)(10) of the Securities Act. Pursuant to the court order issued by the California Superior Court for the County of Los Angeles (“California State Court”) on November 8, 2013, our common shares were deemed to be issued in settlement of the claims (subject to certain adjustments based on the future trading value of the stock) when delivered to Ironridge. The number of shares issued to Ironridge is subject to an adjustment based on the trading price of our common shares such that the value of the shares is sufficient to cover the Claim Amount, a 10% agent fee amount and Ironridge’s reasonable legal fees and expenses ( the “Final Amount”), which Final Amount is equal to $766,238.~~29.~~

On February 10, 2014, Ironridge made a request for, and we issued, an additional 1,615,550 shares of our common ~~shares~~stock as a result of the adjustment provisions ~~under~~contained ain the stipulation (the “Stipulation ”) in the ~~court~~Court ~~order~~Order issued by the California State Court. We expensed these additional shares in December 2013, valued at $210,022, and on February 22, 2014 we issued 1,615,550 share of our common stock to Ironridge.

On April 4, 2014, Ironridge requested ~~even~~ ~~more shares pursuant to the adjustment provision under the Stipulation in the court order issued by the California State Court. This time their request was for~~ an additional 1,646,~~550~~008 ~~shares of our~~ common ~~stock~~shares. We declined to issue these additional shares ~~because~~ because Ironridge had already received, ~~to that date,~~ approximately 10,305,550 common shares with a market value of approximately $1~~.2 million (based on the closing stock price on May 6~~, ~~2012)~~300,000 in ~~settlement~~ satisfaction of ~~a Final Amount of~~ $766,238.~~29. The shares issued to Ironridge represent a premium of 48% to the Final Amount.~~

On May 6, 2014, Ironridge submitted an ex parte application to the California State Court to compel usthe toissuance ~~issue~~of the 1,646,~~550~~ 008 common shares ~~requested on April 4~~, ~~2014,~~ and the California State Court ~~without a hearing~~ entered an order tocompelling ~~compel~~ us to issue the additional shares. OnThe order also prohibits us from issuing or transferring new shares to third parties before issuing these shares. We appealed the court's decision. On the same day, we filed a notice of appeal ofwith the California State Court’s order. ~~The~~which ~~appeal~~ automatically ~~stays~~stayed ~~enforcement of~~ the ~~California State~~ Court’s order. ~~May~~The ~~6th~~matter ~~order~~is pending.

We accrued ~~believe~~the ~~that~~potential ~~Ironridge~~issuance isof ~~not entitled~~the shares to ~~additional~~Ironridge ~~shares~~during the year ended December 31, 2014 and ~~plan~~have recorded $164,655. In October 2015, to ~~vigorously~~stop ~~pursue~~a ancontempt ~~appeal~~action, ~~and~~we ~~reversal~~reserved the 1,646,008 ofshares ~~the~~which ~~California~~were ~~State~~not ~~Court~~accepted ~~order~~by Ironridge as of until March 17, 2016.

~~ITEM~~We pursued 1Aan appeal, and reversal, of the California State Court order and are in litigation in California and New Jersey. ~~RISK~~On ~~FACTORS~~October 29, 2015, Ironridge in California, requested the issuance of an additional 87,000,000 shares under the formula set forth in the Stipulation.

~~Not~~In New ~~applicable~~Jersey, Ironridge brought an action against Olde Monmouth, our transfer agent, to force it to issue shares or pay damages resulting from their refusal to issue the shares requested by Ironridge. We intervened and contested jurisdiction in New Jersey.

~~ITEM~~In January 22016, we were ordered by the Federal Court in California to pay for Ironridge’s legal fees and on February 22, 2016 we paid this legal fee in the amount of $269,365. ~~UNREGISTERED~~The ~~SALES~~Court OFinstructed ~~EQUITY~~both ~~SECURITIES~~parties ~~AND~~to ~~USE~~work out a mutually agreeable settlement. OFWe ~~PROCEEDS~~believe that we have a valid defense to the issuance of the 87,000,000 shares sought by Ironridge based upon usury laws and also violations of the California business code for unconscionable actions since Ironridge paid $766,238 of debt obligations and received a return of approximately $1,300,000. Due to expensive costs and uncertainty in litigation we believe it is in the best interest of the Company to settle the matter.

~~During~~In February ~~the three month period ending September 30~~2016, ~~2014,~~ we ~~offered and~~proposed ~~sold securities below. We used~~ the ~~proceeds~~following ~~from~~settlement ~~the~~agreement ~~sale~~to ofIronridge ~~these~~to ~~securities~~fully ~~for~~resolve ~~working~~all litigation and ~~capital.~~any ~~None of the issuances involved~~and ~~underwriters~~all claims, ~~underwriting~~causes ~~discounts~~of action or ~~commissions.~~potential Wecauses ~~relied~~of ~~upon~~action ~~Section~~between ~~4(2) of~~ the ~~Securities Act~~parties, principals, affiliates and ~~Rule 506 of the Securities~~ScripsAmerica’s ~~Act~~transfer ~~of 1933~~agent, asOlde ~~amended~~Monmouth ~~for~~Transfer ~~the offer and sale of the securities. We believed Section 4(2) was available because~~Company:

·1. ScripsAmerica Wewill ~~are~~make ~~not~~ a ~~blank~~$400,000 ~~check~~payment ~~company;~~at ·the Wetime ~~filed~~the asettlement ~~Notice~~agreement ofis ~~Sales~~fully onexecuted ~~Form~~and D,all ~~with~~cases ~~the~~are dismissed ~~Securities~~that ~~& Exchange Commission; · Sales~~ were ~~not~~brought ~~made~~ by ~~general solicitation or advertising; · All certificates had restrictive legends; and · Sales were made to persons with a pre-existing relationship to our management~~Ironridge.

On2. ScripsAmerica ~~July~~will 1,issue ~~2014,~~a wenon-interest ~~issued~~bearing ~~100,000~~note ~~shares~~to Ironridge in the amount of ~~our~~$1 ~~common~~million ~~stock~~ to anbe paid ~~accredited~~over ~~investor~~a atten amonth ~~subscription~~period ~~price~~in installments of $~~.05~~100,000 per ~~share~~month starting the month after settlement agreement and lawsuits brought by Ironridge are dismissed. This payment is in lieu of any shares to be issued to Ironridge.

~~On July 3, 2014, we issued 1,500,000 shares of our common stock to a consultant for services rendered. We valued these shares at$.14 per share.~~31

On3. The ~~July~~parties 7,will ~~2014,~~dismiss weall ~~issued~~pending litigation with ~~446~~prejudice,~~724~~ ~~shares~~including ofthe ~~its~~Los ~~common~~Angeles ~~stock~~Superior Court action, tothe aLos ~~creditor~~Angeles ~~upon~~federal ~~conversion~~court ofaction, athe ~~convertible~~New ~~promissory~~Jersey ~~note~~action atand athe ~~price~~New ofYork $action.15 ~~per~~Ironridge would ~~share~~release any and all claims to the LNK funding ($160,000).

On4. The ~~July~~parties 7,shall ~~2014,~~execute wegeneral ~~issued~~releases ~~430,350~~in ~~shares~~favor of ~~our~~each ~~common~~other ~~stock~~and their respective officers, directors, affiliates and torelated anparties ~~accredited~~excluding ~~investor~~only atScripsAmerica’s aobligation ~~subscription~~to ~~price~~pay ofthe ~~$.07~~note ~~per~~specified ~~share~~in paragraph 2, above.

OnIronridge notified ~~July~~our 8,attorney ~~2014,~~of weacceptance ~~issued~~of ~~580,000~~this ~~shares~~settlement but subsequently to signing of ~~our~~the ~~common~~final ~~stock~~agreement Ironridge’s principal reneged on the acceptance. We plan to anpurse ~~accredited~~enforcement ~~investor~~of atthe asettlement ~~subscription~~and ~~price~~our attorneys are preparing motion to enforce settlement terms. We recorded an expense of $~~.05~~1,400,000 ~~per~~to ~~share~~the condensed consolidated statement of operations for the three months ended March 31, 2015 for the expected settlement amount.

~~On July 9, 2014, we issued 21,786 shares of our common stock to an accredited investor to fulfill a subscription from 2013, at a subscription price of $.05 per share.~~Pharmanostics

43On December 29, 2015, Pharmanostics Group, LLC, (“Pharmanostics”), a Florida limited liability company, filed a civil lawsuit in Broward County Florida seeking payment from us of $1,835,712 for billing services it alleges it provided during 2014 and first two months of 2015. In January 2016, we filed a motion to move the suit to Federal Court from Florida and the motion was granted. In February 2016, we filed a counter suit for damages caused by Pharmanostics’ poor business practices. In March 2016, due to expensive costs and uncertainty in litigation we believe it is in the best interest of the Company to settle the matter with Pharmanostics. On March 10, 2016, we paid the owner of Pharmanostics $287,500 in cash and thus accrued and recorded an expense of $287,500 to the condensed consolidated statement of operations for the three months ended March 31, 2015.

~~On July 21, 2014, we issued 20,000 shares of our common stock,~~ITEM ~~4,000 shares each, to 5 directors in payment of director’s fees for the July meeting~~1A. WeRISK ~~valued these shares at $.13 per share.~~FACTORS

~~On July 30, 2014, we issued 38,350 shares of our common stock~~There ~~(17,350~~have ~~shares~~been ~~and~~no ~~21,000~~material ~~shares,~~changes ~~respectively) as royalty payments pursuant~~ to athe ~~contractual~~risk ~~arrangement,~~factors ~~representing~~previously adisclosed ~~calculated value~~in ofour ~~$.10~~annual ~~per share~~report.

~~On July 30, 2014, we issued 10,000 shares of our common stock,~~ITEM ~~at an assigned value of $~~2.10 ~~per~~UNREGISTERED ~~share,~~SALES toOF aEQUITY ~~consultant~~SECURITIES inAND ~~payment~~USE ~~for~~OF ~~services valued at $1,000.~~PROCEEDS

OnDuring the ~~each~~three ofmonths ~~August~~ended 4March 31, ~~2014~~2015, we offered and ~~August~~sold 6,securities ~~2014,~~below. weWe ~~issued~~used ~~156,150~~the proceeds from the sale of these securities ~~shares~~for (aworking ~~total~~capital. None of ~~312~~the issuances involved underwriters,~~300~~ ~~shares~~underwriting discounts or commissions. We relied upon Section 4(2) of ~~our~~the ~~common~~Securities ~~stock~~Act, asand ~~royalty~~Rule ~~payments~~506 ~~pursuant~~of tothe aSecurities ~~contractual~~Act ~~arrangement~~of 1933, ~~representing a~~as ~~calculation~~amended ~~value~~for the offer and sale of $the securities.09 ~~per~~We believed ~~share.~~Section 4(2) was available because:

On· ~~August~~We ~~29,~~were ~~2014,~~not ~~we issued 88,235 shares of our common stock to~~ a ~~consultant,~~blank atcheck ~~an assigned value of approximately $.09 per share, to a consultant in payment for services valued at $7,941.~~company;

On· ~~September~~And 8,have ~~2014,~~never webeen ~~issued 21,000 shares of our common stock as~~ a ~~royalty~~shell ~~payment pursuant to a contractual arrangement, representing a calculation value of $.10 per share.~~company;

On· ~~September~~Sales ~~18,~~were ~~2014,~~not wemade ~~issued~~by 45general ~~shares~~solicitation ofor ~~our common stock to a prior subscriber as a mathematical correction to a prior issuance.~~advertising;

~~ITEM~~· 3.All ~~DEFAULTS~~certificates ~~UPON~~had ~~SENIOR~~restrictive ~~SECURITIES~~legends; and

~~None~~· Sales were made to persons with a pre-existing relationship to our management.

~~ITEM~~During the 4three months ended March 31, 2015, the Company issued 911,000 restricted shares of common stock in connection with payments for services provided by members of the Board of Directors and employees. ~~MINE~~These ~~SAFETY~~shares ~~DISLCOSURES~~were valued at $186,040.

~~Not~~During the ~~applicable~~three months ended March 31, 2015, we issued 1,165,303 restricted shares of our common stock to non-employee consultants for services rendered. These shares were valued at $231,604.

ITEM 5 3. ~~OTHER~~DEFAULTS ~~INFORMATION~~UPON SENIOR SECURITIES

None.

~~ITEM 6. EXHIBITS~~32

Number		Description
3.1		Certificate of Amendment to the Amended and Restated Certificate of Incorporation
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1		Temporary Hardship Exemption
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*

ITEM 4. MINE SAFETY DISCLOSURES

* To beNot ~~furnished by amendment per Temporary Hardship Exemption under Regulation S-T~~applicable.

44ITEM 5. OTHER INFORMATION

~~SIGNATURE PAGE~~None.

~~Pursuant to the~~ITEM ~~requirements 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~~6. EXHIBITS

	SCRIPSAMERICA, INC.
Number	Description
Dated: November 14, 2014	By:	/s/ Robert Schneiderman
3.1	Certificate of Amendment to the Amended and Restated Certificate of Incorporation
		Chief Executive Officer(Duly Authorized Officer)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	By:	/s/ Jeffrey Andrews
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
		Chief Financial Officer
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002
		(Duly Authorized Officer)
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL 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

4533

SIGNATURE PAGE

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 on April 4, 2016 by the undersigned thereunto duly authorized.

SCRIPSAMERICA, INC.

/s/ Brian Ettinger

Brian Ettinger, Chief Executive Officer

/s/ Jeffrey Andrews

Jeffrey Andrews, Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Joseph Camardo, M.D.	Director	April 4, 2016
Joseph Camardo, M.D.

/s/ Michael Imperiale, M.D.	Director	April 4, 2016
Michael Imperiale, M.D.

/s/ Andrius Pranskevicius	Director	April 4, 2016
Andrius Pranskevicius

/s/ Anderson L. Triggs	Director	April 4, 2016
Anderson L. Triggs

/s/ William Austin Lewis, IV	Director	April 4, 2016
William Austin Lewis, IV

/s/ Adam Brosius	Director	April 4, 2016
Adam Brosius

Filing Compare · ScripsAmerica, Inc.